On 7 May 1995, in compliance with the detail order, respondents reported to the Office
PANFILO V. VILLARUEL, JR., petitioner, vs. REYNALDO D. FERNANDO, MODESTO ABARCA,
JR. and MARILOU M. CLEOFAS, respondents.
DECISION
CARPIO, J.:
The Case
This petition for review on certiorari[1] seeks to reverse the Decision[2] of the Court of
Appeals in CA-G.R. SP No. 48233[3] dated 30 September 1998 denying due course to the
petition for certiorari[4] filed by Panfilo V. Villaruel, Jr. and the Resolution dated 3 December
1998 denying the motion for reconsideration.
The Facts
Petitioner Panfilo V. Villaruel, Jr. (petitioner) is the former Assistant Secretary of the Air
Transportation Office (ATO), Department of Transportation and Communication
(DOTC).Respondents Reynaldo D. Fernando, Modesto E. Abarca, Jr. (Abarca), and Marilou M.
Cleofas are the Chief, Chief Administrative Assistant, and Administrative Assistant,
respectively, of the Civil Aviation Training Center (CATC). The CATC is an adjunct agency of
the ATO tasked to train air traffic controllers, airway communicators and related civil
aviation personnel for the local aviation industry as well as for the Southeast Asian and
Pacific region.
Petitioner issued a memorandum dated 27 April 1995 addressed to the respondents,
detailing them to the Office of DOTC Undersecretary Primitivo C. Cal effective 2 May 1995.
On 29 April 1995, respondents wrote to DOTC Secretary Jesus B. Garcia and
Undersecretary Josefina T. Lichauco through petitioner requesting for reconsideration of the
detail order.
of Undersecretary Cal at DOTC.
Without acting on respondents request for reconsideration, petitioner issued a
memorandum on 19 July 1995 addressed to Abarca placing him under preventive
suspension for 90 days without pay pending investigation for alleged grave misconduct.
On 10 August 1995, respondents requested Secretary Garcia to lift the detail order and
to order their return to their mother unit since more than 90 days had already lapsed.
Respondents also sought the intervention of the Ombudsman in their case. As a result, the
Ombudsman inquired from Secretary Garcia the action taken on respondents request for
reconsideration of the detail order.
On 22 November 1995, Secretary Garcia replied to the Ombudsman that he had issued
a memorandum dated 9 November 1995 directing petitioner to recall respondents to their
mother unit. Secretary Garcia declared that the law does not sanction the continuous detail
of respondents.
Despite repeated demands by respondents, petitioner failed and refused to reinstate
respondents to their mother unit.
On 24 January 1996, respondents filed a Petition for Mandamus and Damages with
Prayer for a Preliminary Mandatory Injunction against petitioner with the Regional Trial
Court of Pasay City docketed as Civil Case No. 96-0139. Respondents prayed for the
following:
PRAYER
WHEREFORE, premises considered, petitioners herein respectfully pray of this Honorable
Court that:
1. Pending the determination of the merits of this petition, a writ of preliminary mandatory
injunction be issued ex-parte directing respondent Panfilo V. Villaruel, Jr., to recall the
petitioners herein within twenty four (24) hours from receipt hereof to their mother unit,
the Civil Aviation Training Center, Air Transportation Office, DOTC, and to forthwith allow
them to assume, perform and discharge the functions, duties and responsibilities inherent,
appurtenant and incident to their respective offices.
2. After hearing on the merits, judgment be rendered confirming the writ of preliminary On 28 May 1996, the trial court granted the motion and declared petitioner guilty of
mandatory injunction earlier issued by this Honorable Court and declaring the same indirect contempt. The trial court issued a bench warrant against petitioner.
permanent, and ordering the respondent Panfilo Villaruel, Jr., to pay petitioners herein the
Petitioner, through the Office of the Solicitor General (OSG), filed a special civil action
following damages, to wit:
for certiorari with the Court of Appeals[7] assailing the trial courts order finding petitioner
guilty of indirect contempt. The case was docketed as CA-G.R. SP No. 41263.
a) to pay petitioner Reynaldo D. Fernando the amount of P50,000 as actual and
compensatory damages; Meanwhile, the trial court declared petitioner in default for his failure to file an answer
to the petition for mandamus and damages. Accordingly, respondents adduced their
b) to pay petitioners herein moral, exemplary and temperate damages, in such amounts as evidence ex-parte before the Clerk of Court.
may hereafter be proven in the course of trial, which petitioners herein are leaving to the
On 11 July 1996, the trial court rendered a Decision the dispositive portion of which
sound discretion of this Honorable Court to determine and adjudge;
reads:
c) to pay petitioners herein attorneys fees in the amount of P100,000;
Wherefore, considering the foregoing premises, judgment is hereby rendered in favor of the
petitioners and against the respondent declaring mandamus permanent and thereby
d) to pay petitioners herein the costs of suit.
ordering respondent Panfilo V. Villaruel, Jr., to pay the following:
Petitioners herein pray for such other and further relief as may be just and equitable in the
(1) One hundred thousand pesos (P100,000.00) each as moral damages;
premises.[5]
(2) Twenty five thousand pesos (P25,000.00) each as exemplary damages;
On 23 February 1996, the trial court granted respondents prayer for a preliminary
mandatory injunction.
(3) Twenty five thousand pesos (P25,000.00) each as temperate damages, and;
Meanwhile, Judge Aurora Navarette-Recia of the trial court was appointed Chairman of
the Commission on Human Rights. Consequently, the case was re-raffled and assigned to (4) Fifty thousand pesos (P50,000.00) as attorneys fees.
Branch 231 of the Regional Trial Court, Pasay City.[6]
SO ORDERED.[8]
On 12 April 1996, the trial court issued an order modifying the 23 February 1996 order
of Judge Recia. The trial court issued a writ of preliminary mandatory injunction ordering
petitioner to comply with the 9 November 1995 order of Secretary Garcia directing Aggrieved, petitioner, represented by the OSG, appealed to the Court of Appeals. The
appeal was docketed as CA-G.R. SP No. 42447.[9] With the filing of the appeal, the Court of
petitioner to recall respondents to their mother unit until further orders by the trial court.
Appeals granted respondents motion for the dismissal of the petition for certiorari in CA-
For petitioners continued failure to comply with the writ of preliminary injunction, G.R. SP No. 41263 for being moot and academic.
respondents moved to cite petitioner in contempt. Respondents also moved to declare
The Court of Appeals granted the OSG a non-extendible extension until 13 December
petitioner in default for not filing an answer within the period prescribed in the trial courts
1996 within which to file petitioners memorandum. However, the OSG failed to file the
order of 26 January 1996.
memorandum. Subsequently, Solicitor Restituto Tuando, Jr. who was handling the case was
appointed Regional Trial Court judge of Dumaguete City. The case was re-assigned to
Assistant Solicitor Luciano Joson, Jr. On 13 March 1997, the Court of Appeals issued a
Resolution dismissing petitioners appeal for failure to file the required memorandum. The
OSG, through Assistant Solicitor Luciano Joson, Jr., filed a Motion for Reconsideration, but
the Court of Appeals denied the same. The Resolution became final and executory on 14
June 1997.
Consequently, the respondents filed a Motion for Execution with the trial
court. Although served a copy of the motion for execution, the OSG did not file any
opposition.
Acting on the motion for execution, the trial court issued a Writ of Execution on 22
September 1997. On 3 February 1998, the Sheriff issued a Notice of Sheriffs Sale setting on
23 February 1998 the sale of petitioners real property covered by Transfer Certificate of
Title No. 83030.
On 17 February 1998, petitioner, through his new counsel,[10] filed a Motion to Quash
the Writ of Execution and to Suspend Sheriffs Sale. In his motion, petitioner alleged that the
trial courts decision never became final and executory as the trial court deprived him of his
right to due process. Petitioner claimed that the OSG failed to file petitioners memorandum
in CA-G.R. SP No. 42447 resulting in the dismissal of his appeal. Furthermore, petitioner
alleged that the OSG failed to inform him of the dismissal of his appeal and of the trial
courts order granting respondents motion for execution. Petitioner further asserted that the
Resolution of the Ombudsman in OMB-ADM 0-96-0090[11] superseded the decision of the
trial court. The Ombudsmans Resolution approved the following recommendation of the
reviewing Assistant Ombudsman:
PREMISES CONSIDERED, respondent MODESTO ABARCA, JR., is hereby found GUILTY of
violation of Section 7(d) of Republic Act 6713, for which the penalty of Suspension Without
Pay for Six (6) Months is hereby recommended pursuant to Section 10(b), Rule III of
Administrative Order No. 07, in relation to Section 25(2) of Republic Act No. 6770.
It is also respectfully recommended that the charge against respondents REYNALDO
FERNANDO and MARY LOU CLEOFAS be DISMISSED.[12]
On 23 February 1998, the trial court issued an Order quashing the Writ of Execution
because the Sheriff failed to follow Section 9, Rule 39 of the Rules of Court. The trial court,
however, issued an Alias Writ of Execution. Petitioner filed a Motion for Reconsideration but
the trial court denied the same on 28 April 1998.
Dissatisfied with the trial courts orders, petitioner filed a special civil action
for certiorari with the Court of Appeals docketed as CA-G.R. SP No. 48233 assailing the
execution of the trial courts decision of 11 July 1996. The Court of Appeals denied due
course to the petition for certiorari and dismissed the same in the Decision dated 30
September 1998. Petitioner moved for reconsideration but the appellate court denied the
motion in a Resolution of 3 December 1998.
Hence, the instant petition.
The Ruling of the Court of Appeals
Petitioner raised before the Court of Appeals the following issues:
1. THE TRIAL COURTS DECISION DATED JULY 11, 1996 IS VOID FOR LACK OF DUE
PROCESS AND COULD NOT HAVE BECOME FINAL AND EXECUTORY.
2. SUPERVENING FACTS AND CIRCUMSTANCES HAVE TRANSPIRED WHICH RENDERED
EXECUTION OF THE JUDGMENT UNJUST AND INEQUITABLE.[13]
On the first issue, the Court of Appeals ruled that the negligence of the OSG could not
relieve petitioner of the effects of such negligence and prevent the decision of the trial court
from becoming final and executory. In short, the OSGs negligence binds petitioner.
The Court of Appeals admonished petitioner for his failure to ascertain periodically
from the OSG or from the Court of Appeals the status of his appeal. The appellate court
cited Reyes v. Court of Appeals,[14] which held that it is the duty of a party litigant to make
inquiries to his counsel on matters concerning his case. A party litigant bears the
responsibility of contacting his lawyer periodically to apprise himself of the progress of the
case. A lawyers negligence binds a party litigant who must suffer the consequences of such
negligence. The Court of Appeals further held that there was no proof that the OSG failed to
inform petitioner of the dismissal of his appeal.
On the second issue, the Court of Appeals concurred with the trial courts ruling that the
nature of the case before the Ombudsman is different from the case before the trial
court. The former deals with a violation of Republic Act No. 6713 (RA 6713)[15] punished with
suspension from office while the latter deals with an ultra vires act punished with
damages. The appellate court ruled that the findings of the Ombudsman had nothing to do
with the findings of the trial court, as the two forums are separate and distinct from each
other.
Moreover, the Court of Appeals opined that petitioner failed to prove that the trial
court committed grave abuse of discretion to warrant the writ of certiorari. The appellate
court ruled that the trial court acted in accord with law and prevailing jurisprudence in
issuing the questioned orders.
The Issues
Petitioner presents the following issues for resolution of this Court:[16]
1. Whether the award of moral, exemplary and temperate damages to respondents has
legal basis.
2. Whether the trial court correctly ruled that the negligence of the OSG could not
relieve petitioner of the effects of such negligence and prevent the decision of the
trial court from becoming final and executory.
3. Whether petitioner was denied of his right to due process when the appellate court
dismissed his appeal for failure of the OSG to file the memorandum.
4. Whether the resolution of the Ombudsman finding Modesto Abarca, Jr. guilty of
violating Section 7 of RA 6713 rendered the execution of the trial courts decision
unjust and inequitable.
The main issue to resolve is whether the Court of Appeals erred in dismissing the
petition for certiorari assailing the trial courts orders dated 23 February 1998 and 28 April
1998.Resolving this issue necessarily determines the validity of the questioned orders. This
in turn resolves the questions of whether the trial court denied petitioner of his right to due
process and whether the Ombudsmans resolution rendered the execution of the trial courts
decision unjust and inequitable.
We can no longer resolve the issue regarding the validity and reasonableness of the
award of damages for three reasons. First, the decision of the trial court dated 11 July 1996
is already final and executory. Second, the petition for certiorari filed by petitioner was
simply a direct consequence of the trial courts issuance of the writ of execution and notice
of sheriffs sale. In other words, petitioner merely questioned the execution of the trial
courts decision in his petition for certiorari. Third, petitioner did not raise the issue of the
validity and reasonableness of the award of damages before the Court of Appeals.[17]
The Courts Ruling
The petition has no merit.
We begin by pointing out that petitioner failed to allege the essential requisites under
Section 1, Rule 65 of the Rules of Court for a petition for certiorari to prosper. Specifically,
petitioner never alleged that the trial court acted without or in excess of its jurisdiction in
issuing the questioned orders. Neither did petitioner allege that the trial court gravely
abused its 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. In other words, there
is no issue that the trial court committed grave abuse of discretion amounting to lack or
excess of jurisdiction in handing down the questioned orders. On this score alone, the
dismissal of the petition for certiorari before the Court of Appeals is in order. However, in
disposing of the instant case, we shall still resolve the principal issues raised by petitioner.
No Denial of Petitioners Right to Due Process
 Petitioner essentially contends that the judgment of the trial court in Civil Case No. 96-
0139 is void for lack of due process. Petitioner alleges that the trial court never gave him the
chance to be heard and to submit his evidence. Petitioner, formerly represented by the
OSG, failed to file an answer to respondents petition for mandamus and
damages. Consequently, the trial court declared petitioner in default. While the OSG filed a
notice of appeal of the judgment by default, it failed to file with the Court of Appeals the
required memorandum resulting in the dismissal of the appeal. In petitioners words, the
OSG virtually abandoned[18] his case. Petitioner argues that the inexcusable negligence of
the OSG did not bind him and prevented the decision of the trial court from becoming final
and executory.
We do not agree.
Due process, in essence, is simply an opportunity to be heard[19] and this opportunity
was not denied petitioner. Throughout the proceedings in the trial court as well as in the
Court of Appeals, petitioner had the opportunity to present his side but he failed to do
so. Clearly, petitioners former counsel, the OSG, was negligent. This negligence, however,
binds petitioner. The trial and appellate courts correctly ruled that the negligence of the
OSG could not relieve petitioner of the effects such negligence[20] and prevent the decision
of the trial court from becoming final and executory.
In Villa Rhecar Bus v. De la Cruz,[21] which petitioner himself cited, the Court ruled:
It is unfortunate that the lawyer of the petitioner neglected his responsibilities to his
client. This negligence ultimately resulted in a judgment adverse to the client. Be that as it
may, such mistake binds the client, the herein petitioner. As a general rule, a client is bound
by the mistakes of his counsel. Only when the application of the general rule would result
in serious injustice should an exception thereto be called for. Under the circumstances
obtaining in this case, no undue prejudice against the petitioner has been satisfactorily
demonstrated. At most, there is only an unsupported claim that the petitioner had been
prejudiced by the negligence of its counsel, without an explanation to that effect. (Emphasis
supplied)
In the present case, there was no proof that petitioner suffered serious injustice to
exempt him from the general rule that the negligence of the counsel binds the
client. Petitioner did not even attempt to refute the respondents allegations in the petition
for mandamus and damages.
Moreover, petitioner is not entirely blameless for the dismissal of his appeal. After the
OSGs failure to file the answer to the petition for mandamus and damages and to have the
order declaring petitioner in default lifted, petitioner should have already replaced the OSG
with another lawyer. However, petitioner still retained the services of the OSG, despite its
apparent lack of interest in petitioners case, until the trial courts decision became
final. In Salva v. Court of Appeals,[22] the Court declared:
Respondents reliance on Legarda is inapropos. Notably, the decision in said case was not yet
final in 1991. The private respondent therein then filed a timely motion for
reconsideration. In granting the motion for reconsideration, the Court en banc held:
xxx
Neither Cathay nor Cabrera should be made to suffer for the gross negligence of Legardas
counsel. If she may be said to be innocent because she was ignorant of the acts of
negligence of her counsel, with more reason are respondents truly innocent. xxx In this case,
it was not respondents, but Legarda, who misjudged and hired the services of the lawyer
who practically abandoned her case and who continued to retain him even after his proven
apathy and negligence.
At any rate, we find that respondent Governor Sato, as well as the Province of Occidental
Mindoro which she represents, were not denied their day in court. Responsive pleadings
were filed before the lower courts, and respondent was given all the opportunities to prove
her case. Her chosen counsel did not diligently exhaust all legal remedies to advance
respondents cause, yet respondent did not terminate his services. She was aware of the
repeated negligence of her counsel and cannot now complain of counsels errors. Hence,
there is no justifiable reason to exempt her from the general rule that clients should suffer
the consequences of the negligence, mistake or lack of competence of the counsel whom
they themselves hired and had the full authority to fire at any time and replace with
another even without justifiable reason. (Emphasis supplied)
 Furthermore, petitioner cannot now complain of the OSGs errors. Petitioner should
have taken the initiative of making periodic inquiries from the OSG and the appellate court
about the status of his case.[23] Litigants represented by counsel should not expect that all
they need to do is sit back, relax and await the outcome of their case. [24] To agree with
petitioners stance would enable every party to render inutile any adverse order or decision
through the simple expedient of alleging negligence on the part of his counsel. [25] The Court
will not countenance such ill-founded argument which contradicts long-settled doctrines of
trial and procedure.[26]
The Ombudsmans Resolution Does Not Render the Execution
of the Trial Courts Decision Unjust and Inequitable
Petitioner contends that the Ombudsmans Resolution finding Abarca guilty of violating
Section 7(d) of RA 6713 superseded the trial courts decision finding petitioner liable for
damages.Petitioner insists that the Ombudsmans resolution rendered the execution of the
trial courts decision unjust and inequitable.
We are not persuaded.
Settled is the rule that a judgment that has acquired finality becomes immutable and
unalterable and may no longer be modified in any respect except only to correct clerical
errors or mistakes.[27] True, this rule admits of certain exceptions. One of these exceptions is
whenever circumstances transpire after the finality of the decision rendering its execution
unjust and inequitable.[28] This, however, is not the case here. In the present case, the
Ombudsman issued his Resolution prior to the finality of the trial courts decision. The
Ombudsman issued his Resolution on 22 January 1997 while the trial courts decision
became final and executory on 14 June 1997. Therefore, the resolution of the Ombudsman
is not a supervening event to warrant the stay of the execution of the decision of the trial
court.
Furthermore, the resolution of the Ombudsman finding Abarca guilty of violating
Section 7(d) of RA 6713 did not and could not supersede the decision of the trial court
holding petitioner liable for damages. The action filed by the petitioner before the
Ombudsman is completely different from the action instituted by respondents before the
trial court. The two actions, which are clearly separate and distinct from each other,
presented two different causes of action. Petitioners cause of action arose from
respondents alleged violation of certain provisions of RA 6713 whereas respondents cause
of action resulted from petitioners refusal to recall respondents to their mother unit at
CATC. In the administrative case before the Ombudsman, the issue was whether
respondents were guilty of violating RA 6713. In contrast, the issue in the civil action before
the trial court was whether respondents were entitled to the issuance of the writ of
mandamus and damages.
The findings of the Ombudsman did not render the execution of the trial courts
decision unjust and inequitable. The resolution of the Ombudsman finding Abarca guilty of
violating Section 7(d) of RA 6713 did not state that petitioner had a valid reason to detail
respondents to the Office of Undersecretary Cal. In fact, the Ombudsman dismissed the
charges against Reynaldo Fernando and Mary Lou Cleofas. Thus, the trial court correctly
awarded damages to respondents. Contrary to petitioners contention, awarding damages to
respondents does not amount to rewarding respondents for their alleged wrongdoing. The
award merely compensates respondents for petitioners own unlawful acts. Clearly illegal
were petitioners acts of unjustifiably detailing respondents to the office of DOTC
Undersecretary Cal and refusing to comply with the 9 November 1995 directive of Secretary
Garcia to recall immediately respondents to their mother unit.
WHEREFORE, we DENY the instant petition. The Decision of the Court of Appeals in CA
G.R. SP No. 48233 dated 30 September 1998 and the Resolution dated 3 December 1998 are
AFFIRMED. No costs.
SO ORDERED.
Spouses JAIME and PURIFICACION MORTA, complainants vs. Judge ANTONIO C.
BAGAGAN, Municipal Trial Court, Guinobatan, Albay; and Sheriff DANILO O.
MATIAS, Regional Trial Court, Branch 14, Ligao, Albay, respondents.
DECISION
PANGANIBAN, J.:
Unreasonable delay in resolving motions opens a judge to administrative sanctions.
Likewise, a sheriff is administratively liable for delayed implementation of a writ of
execution and failure to render the required reports thereon. These are necessary lessons
from the time-honored principle that justice delayed is justice denied.
The Case and the Facts
In their Administrative Complaint[1] dated July 26, 2001, Spouses Jaime
and Purificacion Morta Sr. charged Judge Antonio C. Bagagan of the Municipal Trial Court
(MTC) of Guinobatan, Albay with gross ignorance of the law, incompetence, bias and
delay. They also indicted Sheriff Danilo O. Matias of the Regional Trial Court (RTC)
of Ligao, Albay (Branch 14) with gross ignorance of the law, negligence and connivance with
the defendants in Civil Case Nos. 481 and 482 (MTC, Guinobatan, Albay). The Office of the
Court Administrator (OCA) summarized the factual antecedents as follows:
x x x [In] a Complaint-Affidavit dated July 26, 2001 (with enclosures), x x x [Spouses] Jaime
and Purificacion Morta[,] through their counsel[,] Atty. Rodolfo R. Paulino[,] charg[ed]
[Respondent] Judge Antonio C. Bagagan and Sheriff Danilo O. Matias with gross ignorance of
the law and procedure, incompetence, bias and delay in the disposition of Civil Case No.
481, entitled Jaime Morta, Sr. and Purficacion Padilla vs. Jamie Occidental and Atty.
Mariano Baranda, Jr., for Damages with Prayer for a Writ of Preliminary Injunction, and Civil
Case No. 482 entitled Jaime Morta, Sr. and PurficacionPadilla vs. Jamie Occidental, Atty.
Mariano Baranda, Jr. and Daniel Corral, for Damages with Prayer for a Writ of Preliminary
Injunction.
Complainants, who are the plaintiffs in the aforementioned civil cases, allege[d] that
on March 29, 1994[,] the Municipal Trial Court [of] Guinobatan, Albay rendered a decision in
their favor. The decretalportion of the decision reads:
WHEREFORE, in view of the foregoing considerations, judgment is rendered in favor of the
plaintiffs and against the defendants in both cases as follows:
1) Ordering the defendants not to molest and disturb the peaceful possession of
the plaintiffs in the lands in question situated at San Rafael, Guinobatan;
2) Condemning the defendants in Civil Case No. 481 to jointly and severally pay
the plaintiffs the total amount of P8,130.00 representing the value of the
coconuts, pili nuts and anahaw leaves and for the destroyed plants;
3) Ordering the defendants in Civil Case No. 481 jointly and severally to reimburse
the plaintiffs the amount of P202.00 as legal expenses incurred in filing their
suit;
4) Condemning the defendants in Civil Case No. 482 jointly and severally to pay
the plaintiffs the total amount of P9,950.00 representing the value of the
coconuts and anahaw leaves;
5) Ordering the said defendants in Civil Case No. 482 to jointly and severally
reimburse the plaintiffs the sum of P202.00 as legal expenses in filing this
suit.
The defendants appealed to the Regional Trial Court [of] Ligao, Albay. In its decision
dated August 10, 1994, the Regional Trial Court [RTC] dismissed the aforesaid cases on the
ground that the claims for damages are tenancy-related problems which fall under the
original and exclusive jurisdiction of the Department of Agrarian Reform Adjudicatory Board
(DARAB). On September 9, 1994, the plaintiffs filed a petition for review with the Court of
Appeals assailing the decision of the RTC. However, in its decision dated May 31, 1995, the
Court of Appeals affirmed the lower courts ruling that the cases fall within the original and
exclusive jurisdiction of DARAB. Thereafter, the First Division of this Court, acting on the
petition for review on certiorari filed by the plaintiffs, rendered its decision dated June 10,
1999 in G.R. No. 123417 affirming the decision of the Municipal Trial
Court, Guinobatan, Albay in Civil Case Nos. 481 and 482 and thereby setting aside the
decision of the Court of Appeals in CA-GR SP No. 35300 and that of the Regional Trial Court
in Civil Cases Nos. 1751 and 1752.
They now complain that despite the fact that the decision of the Supreme Court in the
aforesaid case had already become final and executory, the respondent Judge still refused
to issue a writ of possession in their favor.
Complainants further allege that on June 6, 2000 they filed a motion to cite Jaime
Occidental for contempt of court. Although more than one (1) year had already elapsed
since the motion was filed in the respondent Judges sala, the same had remained
unresolved up to the filing of the instant complaint.
As against the respondent Sheriff, the complainants aver[red] that through his ignorance,
negligence and connivance with the defendants, he failed to execute in full the writ of
execution that had been previously issued by the court in Civil Case Nos. 481 and
482. Moreover, it took respondent Sheriff a long time before he finally submitted his
Sheriff's Return of Service on the Writ of Execution.[2]
In his Answer/Comment[3] dated April 2, 2002, respondent judge explained that he had
denied complainants Motion for the issuance of a writ of possession because, by the time
Civil Case Nos. 481 and 482 were finally decided by this Court on June 10, 1999, they had
already been ousted from the lots in question pursuant to the Decisions in DARAB Case No.
2413 and Civil Case No. 1920. In Civil Case No. 1920, respondent judge ordered
complainants to vacate the disputed lots. A Writ of Execution/Demolition was thereafter
issued on January 29, 1998. On the other hand, the DARAB Decision, which became final
and executory on October 27, 1998, directed them to cease and desist from disturbing the
peaceful possession of therein Petitioner Jaime Occidental.
Regarding the alleged delay in the resolution of the Motion for Contempt filed by
complainants, respondent judge contended that an ocular inspection and a hearing had
been conducted by his court as early as June 16, 2000, to determine if their Motion had any
basis. With the consent of their counsel, the hearing had to be deferred, however, pending
receipt of the Sheriffs Report in Civil Case No. 1920.
[4]
For his part, Respondent Sheriff Matias admitted in his Comment dated April 18,
2002, that there was delay in the full implementation of the Writ of Execution in Civil Case
Nos. 481 and 482. Explaining that the delay was due to his heavy workload and thus
unintentional, he begged for compassion from this Court.
Evaluation and Recommendation of the OCA
The OCA found that the explanation of respondent judge for not granting the Motion
for Execution, filed by complainants, was sufficient. According to the court administrator,
the records showed that they had indeed been evicted from the lots they were claiming
when Civil Case Nos. 481 and 482 were finally decided by the Supreme Court on June 10,
1999.[5] Moreover, it emphasized that this Court had merely affirmed the Decision of the
MTC insofar as the award of damages was concerned.
As to complainants Motion to cite Occidental in contempt, the OCA held that the delay
was due primarily to the need of the court to clarify some important matters, not to the
negligence or partiality of respondent. Accordingly, it recommended that the charges
against him be dismissed for lack of merit.
On the other hand, the OCA found that Sheriff Matias had failed to implement the Writ
of Execution promptly and efficiently. It recommended that he be ordered to pay a fine
of P1,000, with a warning that a repetition of the same or a similar act in the future would
be dealt with more severely.
The Courts Ruling
We modify the OCAs findings and recommended penalties, consistent with Rule 140 of
the Revised Rules of Court and the Revised Uniform Rules on Administrative Cases in the
Civil Service.
Administrative Liability
We agree with the OCA that respondent judge acted correctly in not issuing a writ of
execution/possession. His action was consistent with the Decision of this Court in GR No.
123417 affirming that of the MTC as to damages. Besides, the latters Order directing
defendants not to molest complainants in their peaceful possession was rendered moot
when they were ousted from the disputed lots by virtue of the final
and executory judgments in Civil Case No. 1920 and DARAB Case No. 2413. Indeed, the
execution of a final judgment may be refused, as in this case, when there has been a change
in the situation of the parties that would make its execution inequitable.[6]
The delay in the resolution of complainants Motion, however, is an altogether different
matter. The Code of Judicial Conduct enjoins trial court judges, as paragons of justice in the
first instance, to dispose of the courts business promptly[7] and to decide cases and motions
within the required periods.[8] Section 15(1) of Article VIII of the Constitution mandates
them to do so within three months from the date of submission for decision or final
resolution. This Court, through Administrative Circular No. 1,[9] also specifically requires all
of them to act promptly on all motions and interlocutory matters pending before their
courts.[10]
Hence, it is well-settled that the unexplained failure of judges to decide cases and
resolve motions and incidents within the reglementary period of 90 days, which is fixed by
the Constitution and the law, renders them administratively liable.[11] We have stressed
often enough that delay in the administration of justice undermines the faith of the people
in the judiciary, which is expected to hear their supplications promptly. Delay reinforces in
the mind of litigants the impression that the wheels of justice grind ever so slowly. [12] As the
time-honored principle goes, justice delayed is justice denied.
In this case, respondent judge never resolved the Motion, filed on June 6, 2000, to cite
Defendant Occidental for contempt. While it is true that the former immediately conducted
an ocular inspection of the area to determine if the Motion had any basis, this act served
only to mitigate his infraction, but not absolve him from it. The Sheriffs Return of Service of
the Writ of Demolition issued in Civil Case No. 1920 would have clarified whether or not
Occidental had already been fully restored in possession. But while its absence was a valid
reason to defer action on the contempt Motion at the outset, it was certainly not an excuse
for the prolonged inaction.
Had respondent judge been so minded, he would have requested a copy of the Sheriffs
Report, so that he could rule on the Motion with dispatch. He has not satisfactorily
explained his failure to do so, considering that the Writ of Demolition issued in Civil Case No.
1920 had been fully executed as early as February 25, 1998, and the return thereon made
on March 17, 1998.[13]
With respect to the charges against respondent sheriff, we agree with the OCA that he
was remiss in his duty to implement the Writ fully in Civil Case Nos. 481 and 482. Time and
time again, we have impressed upon those tasked to implement court orders and processes
to see to it that the final stage in the litigation process -- the execution of judgment -- be
carried out promptly. They should exert every effort and indeed consider it their bounden
duty to do so, in order to ensure the speedy and efficient administration of justice. [14] A
decision that is left unexecuted or delayed indefinitely because of the sheriffs inefficiency or
negligence remains an empty victory on the part of the prevailing party.[15] For this reason,
any inordinate delay in the execution of judgment is truly deplorable and cannot be
countenanced by the Court.
There is no mistaking the mandatory character of the period prescribed under Section
14 of Rule 39 of the Revised Rules of Court on the Return of a Writ of Execution, which
reads:
SEC. 14. Return of writ of execution. The writ of execution shall be returnable to the court
issuing it immediately after the judgment has been satisfied in part or in full. If the judgment
cannot be satisfied in full within thirty (30) days after his receipt of the writ, the officer shall
report to the court and state the reason therefor. Such writ shall continue in effect during
the period within which the judgment may be enforced by motion. The officer shall make a
report to the court every thirty (30) days on the proceedings taken thereon until the
judgment is satisfied in full, or its effectivity expires. The returns or periodic reports shall set
forth the whole of the proceedings taken, and shall be filed with the court and copies
thereof promptly furnished the parties.
A similar rule is stated in Administrative Circular No. 12 dated October 1, 1985, and
incorporated in the Manual for Clerks of Court. [16] According to this Circular, all sheriffs and
deputy sheriffs shall submit to the judge concerned a report on actions taken on all writs
and processes assigned to them within 10 days from receipt.
Per the records of this case, a Writ of Execution was issued on November 22, 1999 in
Civil Case Nos. 481 and 482.[17] Respondent Sheriffs Return of Service[18] of that Writ was
filed only on May 25, 2000, however, or six months thereafter. There is nothing in the
records showing that he submitted before then a periodic report on the actions he had
taken on the Writ every 30 days from the date of receipt as required. On the contrary, the
Report indicates that the Writ was partially executed on December 15-28, 1999 and January
11, 2000; and that the damages adjudged were partly paid in the amount of P3,500 plus one
unit of Karaoke machine. But it was only on May 25, 2000, that this matter was reported to
the trial court.
The excuse proffered by respondent sheriff -- heavy workload -- cannot absolve him
from administrative sanctions.[19] As an officer of the court, he should at all times show a
high degree of professionalism in the performance of his duties. [20] He has failed to observe
that degree of dedication required of him as a sheriff. The charge of connivance is, however,
dismissed for lack of basis.
Although the OCA recommended that Respondent Judge Bagagan be absolved of all
charges, we find him guilty of undue delay[21] in resolving a pending motion, an infraction
that also constitutes a violation of a Court circular.[22] Under Section 11(B) of Rule 140 of the
Revised Rules of Court, this less serious charge[23] may be sanctioned by a fine of more
than P10,000, but not exceeding P20,000.
As to Sheriff Matias, we find him guilty of simple neglect of duty,[24] a less grave offense
under the Revised Uniform Rules on Administrative Cases in the Civil Service. This infraction
is punishable by a suspension of one month and one day to six months.[25] But under the
circumstances, we find it inadvisable to suspend respondent sheriff, considering that his
work would be left unattended in his absence. Instead, we adopt our previous ruling
in Aquino v. Lavadia [26] imposing a fine equivalent to his one-month salary, so that he can
finally implement the subject Writ and perform his other duties.
WHEREFORE, Judge Antonio C. Bagagan of the Municipal Trial Court
of Guinobatan, Albay, is found guilty of unreasonable delay and is FINED P11,000 with a
stern warning that a repetition of the same or a similar act in the future shall be dealt with
more severely. On the other hand, Sheriff Danilo O. Matias of the Regional Trial Court
of Ligao, Albay (Branch 14), is ordered to pay a fine equivalent to his one-month salary, with
a similar warning of stiffer sanctions for the same or a similar act.
SO ORDERED.
Puno, (Chairman), Sandoval-Gutierrez, Corona, and Carpio-Morales, JJ., concur.
FAR EAST BANK AND TRUST CO. (now BANK OF THE PHILIPPINE ISLANDS), petitioner, vs.
TOMAS TOH, SR., AND REGIONAL TRIAL COURT, MANDALUYONG CITY, BRANCH
214, respondents.
RESOLUTION
QUISUMBING, J.:
Assailed in this petition for review on certiorari is the Resolution[1] dated June 26, 2000
of the Court of Appeals in CA-G.R. SP No. 59234, which dismissed petitioners petition and
affirmed the Order[2] dated May 26, 2000 of the Regional Trial Court (RTC) of Mandaluyong
City, Branch 214 in Civil Case No. MC-99-643 granting private respondents motion for
discretionary execution because of private respondents advanced age. Likewise challenged
is the appellate courts Resolution[3] dated July 10, 2000, denying petitioners motion for
reconsideration in CA-G.R. SP No. 59234.
The factual antecedents of this case, as culled from the records, are as follows:
On March 17, 1999, Tomas Toh, Sr., private respondent herein, filed Civil Case No. MC-
99-643 against petitioner Far East Bank & Trust Co. (FEBTCO now merged in Bank of the
Philippine Islands), seeking recovery of his bank deposits with petitioner in the amount
of P2,560,644.68 plus damages. In his complaint, Toh claimed that petitioner had debited,
without Tohs knowledge and consent, said amount from his savings and current accounts
with petitioner bank and then applied the money as payment for the Letters of Credit
availed of by Catmon Sales International Corporation (CASICO) from petitioner. Thus, when
Toh issued two checks to Anton Construction Supply, Inc., they were dishonored by FEBTCO
allegedly for having been drawn against insufficient funds, although Toh alleged as of
February 4, 1999, he had an outstanding withdrawable balance of P2,560,644.68.
It appears that earlier on August 29, 1997, private respondent Tomas Toh, Sr., together
with his sons, Tomas Tan Toh, Jr., and Antonio Tan Toh, had executed a Comprehensive
Security Agreement in favor of petitioner, wherein the Tohs jointly and severally bound
themselves as sureties for the P22 million credit facilities, denominated as Omnibus Line and
Bills Purchased Line, earlier granted by petitioner to CASICO. Said credit line expired on June
30, 1998, but the parties renewed the same for another year, subject to the following
amendments: (1) a reduction in the credit line from P22 million to P7.5 million; and (2) the
relief of Toh, Sr., as one of the sureties of CASICO.
In its answer to private respondents complaint, petitioner bank averred that the
debiting of Tohs bank accounts was justified due to his surety undertaking in the event of
the default of CASICO in its payments. Petitioner further claimed that the reduction of credit
line does not relieve Toh, Sr. from his continuing surety obligation, citing the absence of a
new surety undertaking or any provisions in the renewal agreement releasing Toh, Sr., from
his personal obligation. It pointed out that CASICOs default in its obligations became
inevitable after CASICO filed a Petition for Declaration in a State of Suspension of Payments
before the Securities and Exchange Commission (SEC).
On July 30, 1999, private respondent filed a Motion for Judgment on the Pleadings,
which petitioner opposed. On October 15, 1999, the lower court granted the aforesaid
motion. In its Order dated March 10, 2000, the lower court rendered a decision in favor of
Toh, Sr., the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered ordering the defendant to restore immediately
to plaintiffs savings/current accounts the amount of P2,560,644.68 plus the stipulated
interest thereon from February 17, 1999, until fully restored; and to pay to the plaintiff the
amount of P100,000.00, as moral damages; and the amount of P50,000.00, as and by way of
attorneys fees. With costs against the defendant.[4]
On March 29, 2000, Toh Sr., filed a Motion for Discretionary Execution by invoking
Section 2,[5] Rule 39 of the Revised Rules of Court. He prayed that execution pending appeal
be granted on the ground of old age and the probability that he may not be able to enjoy his
money deposited in petitioners bank. Petitioner duly opposed said motion.
On March 31, 2000, while private respondents motion was pending before the RTC,
petitioner filed a notice of appeal of the trial courts order of March 10, 2000.
On May 26, 2000, the RTC issued its order granting private respondents Motion for
Discretionary Execution, thus:
WHEREFORE, the motion for discretionary execution is GRANTED. The issuance of the
corresponding writ of execution for the enforcement and satisfaction of the aforesaid
decision against the defendant is hereby ordered.[6]
On May 30, 2000, petitioners appeal was given due course.
In granting Tohs motion, the trial court held that discretionary execution may be issued
upon good reasons by virtue of Section 2(a),[7] Rule 39 of the Revised Rules of
Court. Citing De Leon v. Soriano,[8] where we held that the approach of the end of ones life
span is a compelling cause for discretionary execution pending appeal, [9] the trial court used
the circumstance of Tohs advanced age as a good reason to allow execution pending appeal.
On June 16, 2000, petitioner decided to forego filing a motion for reconsideration of
the trial courts order of May 26, 2000. Instead, it brought the matter to the Court of Appeals
in a special civil action for certiorari, docketed as CA-G.R. SP No. 59234.
On June 26, 2000, the appellate court decided CA-G.R. SP No. 59234 as follows:
WHEREFORE, premises considered, the instant petition for certiorari is hereby
DISMISSED. [10]
The Court of Appeals pointed out that petitioner filed its petition for certiorari without
filing a motion for reconsideration. It held that the fact that the lower court already ordered
the execution of its judgment did not constitute a situation of extreme urgency as to justify
petitioners by-passing the remedy of reconsideration. The appellate court declared it found
no grave abuse of discretion on the part of the trial court in granting discretionary
execution. For the trial court had determined that Toh Sr. was already 79 years old and
given his advanced age, might not be able to enjoy the fruits of a judgment favorable to him
if he were to wait for the eventual resolution of the appeal filed by petitioner.
Petitioner filed its Motion for Reconsideration but the Court of Appeals denied it on
July 10, 2000.
Hence, this petition where petitioner submits the following issues for our resolution:
1) WHETHER OR NOT THE FILING OF A MOTION FOR RECONSIDERATION IS
NECESSARY BEFORE PETITIONER BANK CAN ASSAIL THE LOWER COURTS ORDER
 DATED MAY 26, 2000 IN A SPECIAL CIVIL ACTION FOR CERTIORARI BEFORE THE
HONORABLE COURT OF APPEALS.
2) WHETHER OR NOT THE HONORABLE COURT OF APPEALS GRIEVOUSLY ERRED IN
RULING THAT THE LOWER COURT COMMITTED NO GRAVE ABUSE OF
DISCRETION IN ISSUING THE ORDER OF MAY 26, 2000.[11]
At the outset, it bears stressing that the first issue is now moot. We find that the
appellate court did note petitioners procedural by-pass or oversight. Nonetheless it
proceeded to rule on the petition on its merits. The appellate courts action is not wanting in
precedents as a special civil action for certiorari may be given due course, notwithstanding
that no motion for reconsideration has been filed before the lower court under certain
exceptional circumstances.[12] These exceptions include instances where: (1) the issue raised
is purely one of law; (2) public interest is involved; (3) the matter is one of urgency; (4) the
question of jurisdiction was squarely raised, submitted to, met and decided by the lower
court; and (5) where the order is a patent nullity.[13]
Hence, the only relevant issue for our resolution now is whether the Court of Appeals
erred in affirming the lower courts Order granting execution pending appeal on the ground
of advanced age of private respondent Tomas Toh, Sr.
Petitioner contends that the Court of Appeals erred in finding no grave abuse of
discretion on the part of the lower court when it granted the motion for discretionary
execution based on private respondents bare allegation that he was already 79 years old.
Private respondent avers that Section 2, Rule 49 of the 1997 Rules of Civil Procedure
states the requisites for a grant of a motion pending appeal. All these requirements and
conditions were complied with as evidenced by respondents motion for discretionary
execution, petitioners opposition to the motion and the special order issued by the Regional
Trial Court stating the good reason for the grant of the motion. Hence, the Regional Trial
Court could not have committed any grave abuse of discretion.[14]
In our view, the Court of Appeals committed no reversible error in sustaining the lower
court. Discretionary execution is permissible only when good reasons exist for immediately
executing the judgment before finality or pending appeal or even before the expiration of
the time to appeal. Good reasons are compelling circumstances justifying the immediate
execution lest judgment becomes illusory, or the prevailing party may, after the lapse of
time, become unable to enjoy it, considering the tactics of the adverse party who may
apparently have no case except to delay.[15]
The Rules of Court does not state, enumerate, or give examples of good reasons to
justify execution. The determination of what is a good reason must, necessarily, be
addressed to the sound discretion of the trial court. In other words, the issuance of the writ
of execution must necessarily be controlled by the judgment of the judge in accordance with
his own conscience and by a sense of justice and equity, free from the control of anothers
judgment or conscience. It must be so for discretion implies the absence of a hard and fast
rule.[16]
In this case, the trial court granted private respondents motion for discretionary
execution due to his advanced age, citing our ruling in De Leon v. Soriano.[17] It concluded
that old age is a good reason to allow execution pending appeal as any delay in the final
disposition of the present case may deny private respondent of his right to enjoy fully the
money he has with defendant bank.[18] The Court of Appeals found said ruling in conformity
with sound logical precepts, inspired as it is by the probability that the lapse of time would
render the ultimate judgment ineffective. It further stressed that the trial court was in the
vantage position to determine whether private respondents advanced age and state of
health would merit the execution private respondent prayed for.
In De Leon, we upheld immediate execution of judgment in favor of a 75-year-old
woman. We ruled that her need of and right to immediate execution of the decision in her
favor amply satisfied the requirement of a paramount and compelling reason of urgency and
justice, outweighing the security offered by the supersedeas bond.[19] In the subsequent
case of Borja v. Court of Appeals,[20] we likewise allowed execution pending appeal in favor
of a 76 year-old man on the ground that the appeal will take years to decide with finality,
and he might very well be facing a different judgment from a Court higher than any earthly
tribunal and the decision on his complaint, even if it be in his favor, would have become
meaningless as far as he himself was concerned.[21]
In the present case, private respondent Toh is already 79 years old. It cannot, by any
stretch of imagination, be denied that he is already of advanced age. Not a few might be
fortunate to live beyond 79 years. But no one could claim with certainty that his tribe would
be always blessed with long life.
 Private respondent obtained a favorable judgment in the trial court. But that judgment
in Civil Case No. MC-99-643 is still on appeal before the Court of Appeals. It might even
reach this Court before the controversy is finally resolved with finality. As well said in Borja,
while we may not agree that a man of his years is practically moribund, the Court can
appreciate his apprehension that he will not be long for this world and may not enjoy the
fruit of the judgment before he finally passes away.[22]
Petitioner avers that private respondents claim of old age was unsubstantiated by clear
and convincing evidence. In essence, petitioner wants us to re-evaluate this factual
issue.Needless to stress, such re-examination is improper in a petition for review on
certiorari. Here, only questions of law should be raised. [23] Factual findings of the trial court,
when affirmed by the appellate court, bind this Court and are entitled to utmost
respect.[24] No cogent reason having been given for us to depart therefrom we shall stand by
this salutary rule.
WHEREFORE, the petition is DENIED for lack of merit. The assailed resolutions of the
Court of Appeals in CA-G.R. SP No. 59234 are AFFIRMED. Costs against petitioner.
SO ORDERED.
Bellosillo, (Chairman), and Callejo, Sr., JJ., concur.
Austria-Martinez, J., on official leave.
MINORU FUJIKI, PETITIONER,
vs.
MARIA PAZ GALELA MARINAY, SHINICHI MAEKARA, LOCAL CIVIL REGISTRAR OF QUEZON
CITY, AND THE ADMINISTRATOR AND CIVIL REGISTRAR GENERAL OF THE NATIONAL
STATISTICS OFFICE,RESPONDENTS.
DECISION
CARPIO, J.:
The Case
This is a direct recourse to this Court from the Regional Trial Court (RTC), Branch 107,
Quezon City, through a petition for review on certiorari under Rule 45 of the Rules of Court
on a pure question of law. The petition assails the Order1 dated 31 January 2011 of the RTC
in Civil Case No. Q-11-68582 and its Resolution dated 2 March 2011 denying petitioners
Motion for Reconsideration. The RTC dismissed the petition for "Judicial Recognition of
Foreign Judgment (or Decree of Absolute Nullity of Marriage)" based on improper venue
and the lack of personality of petitioner, Minoru Fujiki, to file the petition.
The Facts
Petitioner Minoru Fujiki (Fujiki) is a Japanese national who married respondent Maria Paz
Galela Marinay (Marinay) in the Philippines2 on 23 January 2004. The marriage did not sit
well with petitioners parents. Thus, Fujiki could not bring his wife to Japan where he
resides. Eventually, they lost contact with each other.
In 2008, Marinay met another Japanese, Shinichi Maekara (Maekara). Without the first
marriage being dissolved, Marinay and Maekara were married on 15 May 2008 in Quezon
City, Philippines. Maekara brought Marinay to Japan. However, Marinay allegedly suffered
physical abuse from Maekara. She left Maekara and started to contact Fujiki.3
Fujiki and Marinay met in Japan and they were able to reestablish their relationship. In
2010, Fujiki helped Marinay obtain a judgment from a family court in Japan which declared
the marriage between Marinay and Maekara void on the ground of bigamy.4 On 14 January
2011, Fujiki filed a petition in the RTC entitled: "Judicial Recognition of Foreign Judgment (or
Decree of Absolute Nullity of Marriage)." Fujiki prayed that (1) the Japanese Family Court
judgment be recognized; (2) that the bigamous marriage between Marinay and Maekara be
declared void ab initio under Articles 35(4) and 41 of the Family Code of the
Philippines;5 and (3) for the RTC to direct the Local Civil Registrar of Quezon City to annotate
the Japanese Family Court judgment on the Certificate of Marriage between Marinay and
Maekara and to endorse such annotation to the Office of the Administrator and Civil
Registrar General in the National Statistics Office (NSO).6
The Ruling of the Regional Trial Court
A few days after the filing of the petition, the RTC immediately issued an Order dismissing
the petition and withdrawing the case from its active civil docket.7 The RTC cited the
following provisions of the Rule on Declaration of Absolute Nullity of Void Marriages and
Annulment of Voidable Marriages (A.M. No. 02-11-10-SC):
Sec. 2. Petition for declaration of absolute nullity of void marriages.
(a) Who may file. A petition for declaration of absolute nullity of void marriage may be
filed solely by the husband or the wife.
xxxx
Sec. 4. Venue. The petition shall be filed in the Family Court of the province or city where
the petitioner or the respondent has been residing for at least six months prior to the date
of filing, or in the case of a non-resident respondent, where he may be found in the
Philippines, at the election of the petitioner. x x x
The RTC ruled, without further explanation, that the petition was in "gross violation" of the
above provisions. The trial court based its dismissal on Section 5(4) of A.M. No. 02-11-10-SC
which provides that "[f]ailure to comply with any of the preceding requirements may be a
ground for immediate dismissal of the petition."8 Apparently, the RTC took the view that
only "the husband or the wife," in this case either Maekara or Marinay, can file the petition
to declare their marriage void, and not Fujiki.
Fujiki moved that the Order be reconsidered. He argued that A.M. No. 02-11-10-SC
contemplated ordinary civil actions for declaration of nullity and annulment of marriage.
Thus, A.M. No. 02-11-10-SC does not apply. A petition for recognition of foreign judgment is
a special proceeding, which "seeks to establish a status, a right or a particular fact,"9 and not
a civil action which is "for the enforcement or protection of a right, or the prevention or
redress of a wrong."10 In other words, the petition in the RTC sought to establish (1) the
status and concomitant rights of Fujiki and Marinay as husband and wife and (2) the fact of
the rendition of the Japanese Family Court judgment declaring the marriage between
Marinay and Maekara as void on the ground of bigamy. The petitioner contended that the
Japanese judgment was consistent with Article 35(4) of the Family Code of the
Philippines11on bigamy and was therefore entitled to recognition by Philippine courts.12
In any case, it was also Fujikis view that A.M. No. 02-11-10-SC applied only to void
marriages under Article 36 of the Family Code on the ground of psychological
incapacity.13 Thus, Section 2(a) of A.M. No. 02-11-10-SC provides that "a petition for
declaration of absolute nullity of void marriages may be filed solely by the husband or the
wife." To apply Section 2(a) in bigamy would be absurd because only the guilty parties
would be permitted to sue. In the words of Fujiki, "[i]t is not, of course, difficult to realize
that the party interested in having a bigamous marriage declared a nullity would be the
husband in the prior, pre-existing marriage."14 Fujiki had material interest and therefore the
personality to nullify a bigamous marriage.
Fujiki argued that Rule 108 (Cancellation or Correction of Entries in the Civil Registry) of the
Rules of Court is applicable. Rule 108 is the "procedural implementation" of the Civil
Register Law (Act No. 3753)15 in relation to Article 413 of the Civil Code.16 The Civil Register
Law imposes a duty on the "successful petitioner for divorce or annulment of marriage to
send a copy of the final decree of the court to the local registrar of the municipality where
the dissolved or annulled marriage was solemnized."17 Section 2 of Rule 108 provides that
entries in the civil registry relating to "marriages," "judgments of annulments of marriage"
and "judgments declaring marriages void from the beginning" are subject to cancellation or
correction.18 The petition in the RTC sought (among others) to annotate the judgment of the
Japanese Family Court on the certificate of marriage between Marinay and Maekara.
Fujikis motion for reconsideration in the RTC also asserted that the trial court "gravely
erred" when, on its own, it dismissed the petition based on improper venue. Fujiki stated
that the RTC may be confusing the concept of venue with the concept of jurisdiction,
because it is lack of jurisdiction which allows a court to dismiss a case on its own. Fujiki
cited Dacoycoy v. Intermediate Appellate Court19 which held that the "trial court cannot pre-
empt the defendants prerogative to object to the improper laying of the venue by motu
proprio dismissing the case."20Moreover, petitioner alleged that the trial court should not
have "immediately dismissed" the petition under Section 5 of A.M. No. 02-11-10-SC because
he substantially complied with the provision.
On 2 March 2011, the RTC resolved to deny petitioners motion for reconsideration. In its
Resolution, the RTC stated that A.M. No. 02-11-10-SC applies because the petitioner, in
effect, prays for a decree of absolute nullity of marriage.21 The trial court reiterated its two
grounds for dismissal, i.e. lack of personality to sue and improper venue under Sections 2(a)
and 4 of A.M. No. 02-11-10-SC. The RTC considered Fujiki as a "third person"22 in the
proceeding because he "is not the husband in the decree of divorce issued by the Japanese
Family Court, which he now seeks to be judicially recognized, x x x."23 On the other hand, the
RTC did not explain its ground of impropriety of venue. It only said that "[a]lthough the
Court cited Sec. 4 (Venue) x x x as a ground for dismissal of this case[,] it should be taken
together with the other ground cited by the Court x x x which is Sec. 2(a) x x x."24
The RTC further justified its motu proprio dismissal of the petition based on Braza v. The City
Civil Registrar of Himamaylan City, Negros Occidental.25 The Court in Braza ruled that "[i]n a
special proceeding for correction of entry under Rule 108 (Cancellation or Correction of
Entries in the Original Registry), the trial court has no jurisdiction to nullify marriages x x
x."26 Braza emphasized that the "validity of marriages as well as legitimacy and filiation can
be questioned only in a direct action seasonably filed by the proper party, and not through a
collateral attack such as [a] petition [for correction of entry] x x x."27
The RTC considered the petition as a collateral attack on the validity of marriage between
Marinay and Maekara. The trial court held that this is a "jurisdictional ground" to dismiss the
petition.28 Moreover, the verification and certification against forum shopping of the
petition was not authenticated as required under Section 529 of A.M. No. 02-11-10-SC.
Hence, this also warranted the "immediate dismissal" of the petition under the same
provision.
The Manifestation and Motion of the Office of the Solicitor General and the Letters of
Marinay and Maekara
On 30 May 2011, the Court required respondents to file their comment on the petition for
review.30 The public respondents, the Local Civil Registrar of Quezon City and the
Administrator and Civil Registrar General of the NSO, participated through the Office of the
Solicitor General. Instead of a comment, the Solicitor General filed a Manifestation and
Motion.31
The Solicitor General agreed with the petition. He prayed that the RTCs "pronouncement
that the petitioner failed to comply with x x x A.M. No. 02-11-10-SC x x x be set aside" and
that the case be reinstated in the trial court for further proceedings.32 The Solicitor General
argued that Fujiki, as the spouse of the first marriage, is an injured party who can sue to
declare the bigamous marriage between Marinay and Maekara void. The Solicitor General
cited Juliano-Llave v. Republic33 which held that Section 2(a) of A.M. No. 02-11-10-SC does
not apply in cases of bigamy. In Juliano-Llave, this Court explained:
[t]he subsequent spouse may only be expected to take action if he or she had only
discovered during the connubial period that the marriage was bigamous, and especially if
the conjugal bliss had already vanished. Should parties in a subsequent marriage benefit
from the bigamous marriage, it would not be expected that they would file an action to
declare the marriage void and thus, in such circumstance, the "injured spouse" who should
be given a legal remedy is the one in a subsisting previous marriage. The latter is clearly the
aggrieved party as the bigamous marriage not only threatens the financial and the property
ownership aspect of the prior marriage but most of all, it causes an emotional burden to the
prior spouse. The subsequent marriage will always be a reminder of the infidelity of the
spouse and the disregard of the prior marriage which sanctity is protected by the
Constitution.34
The Solicitor General contended that the petition to recognize the Japanese Family Court
judgment may be made in a Rule 108 proceeding.35 In Corpuz v. Santo Tomas,36 this Court
held that "[t]he recognition of the foreign divorce decree may be made in a Rule 108
proceeding itself, as the object of special proceedings (such as that in Rule 108 of the Rules
of Court) is precisely to establish the status or right of a party or a particular
fact."37 While Corpuz concerned a foreign divorce decree, in the present case the Japanese
Family Court judgment also affected the civil status of the parties, especially Marinay, who is
a Filipino citizen.
The Solicitor General asserted that Rule 108 of the Rules of Court is the procedure to record
"[a]cts, events and judicial decrees concerning the civil status of persons" in the civil registry
as required by Article 407 of the Civil Code. In other words, "[t]he law requires the entry in
the civil registry of judicial decrees that produce legal consequences upon a persons legal
capacity and status x x x."38 The Japanese Family Court judgment directly bears on the civil
status of a Filipino citizen and should therefore be proven as a fact in a Rule 108 proceeding.
Moreover, the Solicitor General argued that there is no jurisdictional infirmity in assailing a
void marriage under Rule 108, citing De Castro v. De Castro39 and Nial v. Bayadog40 which
declared that "[t]he validity of a void marriage may be collaterally attacked."41
Marinay and Maekara individually sent letters to the Court to comply with the directive for
them to comment on the petition.42 Maekara wrote that Marinay concealed from him the
fact that she was previously married to Fujiki.43Maekara also denied that he inflicted any
form of violence on Marinay.44 On the other hand, Marinay wrote that she had no reason to
oppose the petition.45 She would like to maintain her silence for fear that anything she say
might cause misunderstanding between her and Fujiki.46
The Issues
Petitioner raises the following legal issues:
(1) Whether the Rule on Declaration of Absolute Nullity of Void Marriages and
Annulment of Voidable Marriages (A.M. No. 02-11-10-SC) is applicable.
(2) Whether a husband or wife of a prior marriage can file a petition to recognize a
foreign judgment nullifying the subsequent marriage between his or her spouse and
a foreign citizen on the ground of bigamy.
(3) Whether the Regional Trial Court can recognize the foreign judgment in a
proceeding for cancellation or correction of entries in the Civil Registry under Rule
108 of the Rules of Court.
The Ruling of the Court
We grant the petition.
The Rule on Declaration of Absolute Nullity of Void Marriages and Annulment of Voidable
Marriages (A.M. No. 02-11-10-SC) does not apply in a petition to recognize a foreign
judgment relating to the status of a marriage where one of the parties is a citizen of a
foreign country. Moreover, in Juliano-Llave v. Republic,47 this Court held that the rule in A.M.
No. 02-11-10-SC that only the husband or wife can file a declaration of nullity or annulment
of marriage "does not apply if the reason behind the petition is bigamy."48
I.
For Philippine courts to recognize a foreign judgment relating to the status of a marriage
where one of the parties is a citizen of a foreign country, the petitioner only needs to prove
the foreign judgment as a fact under the Rules of Court. To be more specific, a copy of the
foreign judgment may be admitted in evidence and proven as a fact under Rule 132,
Sections 24 and 25, in relation to Rule 39, Section 48(b) of the Rules of Court. 49 Petitioner
may prove the Japanese Family Court judgment through (1) an official publication or (2) a
certification or copy attested by the officer who has custody of the judgment. If the office
which has custody is in a foreign country such as Japan, the certification may be made by
the proper diplomatic or consular officer of the Philippine foreign service in Japan and
authenticated by the seal of office.50
To hold that A.M. No. 02-11-10-SC applies to a petition for recognition of foreign judgment
would mean that the trial court and the parties should follow its provisions, including the
form and contents of the petition,51 the service of summons,52 the investigation of the
public prosecutor,53 the setting of pre-trial,54 the trial55 and the judgment of the trial
court.56 This is absurd because it will litigate the case anew. It will defeat the purpose of
recognizing foreign judgments, which is "to limit repetitive litigation on claims and
issues."57 The interpretation of the RTC is tantamount to relitigating the case on the merits.
In Mijares v. Raada,58 this Court explained that "[i]f every judgment of a foreign court were
reviewable on the merits, the plaintiff would be forced back on his/her original cause of
action, rendering immaterial the previously concluded litigation."59
A foreign judgment relating to the status of a marriage affects the civil status, condition and
legal capacity of its parties. However, the effect of a foreign judgment is not automatic. To
extend the effect of a foreign judgment in the Philippines, Philippine courts must determine
if the foreign judgment is consistent with domestic public policy and other mandatory
laws.60 Article 15 of the Civil Code provides that "[l]aws relating to family rights and duties,
or to the status, condition and legal capacity of persons are binding upon citizens of the
Philippines, even though living abroad." This is the rule of lex nationalii in private
international law. Thus, the Philippine State may require, for effectivity in the Philippines,
recognition by Philippine courts of a foreign judgment affecting its citizen, over whom it
exercises personal jurisdiction relating to the status, condition and legal capacity of such
citizen.
A petition to recognize a foreign judgment declaring a marriage void does not require
relitigation under a Philippine court of the case as if it were a new petition for declaration of
nullity of marriage. Philippine courts cannot presume to know the foreign laws under which
the foreign judgment was rendered. They cannot substitute their judgment on the status,
condition and legal capacity of the foreign citizen who is under the jurisdiction of another
state. Thus, Philippine courts can only recognize the foreign judgment as a fact according to
the rules of evidence.
Section 48(b), Rule 39 of the Rules of Court provides that a foreign judgment or final order
against a person creates a "presumptive evidence of a right as between the parties and their
successors in interest by a subsequent title." Moreover, Section 48 of the Rules of Court
states that "the judgment or final order may be repelled by evidence of a want of
jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact."
Thus, Philippine courts exercise limited review on foreign judgments. Courts are not allowed
to delve into the merits of a foreign judgment. Once a foreign judgment is admitted and
proven in a Philippine court, it can only be repelled on grounds external to its merits, i.e. ,
"want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or
fact." The rule on limited review embodies the policy of efficiency and the protection of
party expectations,61 as well as respecting the jurisdiction of other states.62
Since 1922 in Adong v. Cheong Seng Gee,63 Philippine courts have recognized foreign divorce
decrees between a Filipino and a foreign citizen if they are successfully proven under the
rules of evidence.64 Divorce involves the dissolution of a marriage, but the recognition of a
foreign divorce decree does not involve the extended procedure under A.M. No. 02-11-10-
SC or the rules of ordinary trial. While the Philippines does not have a divorce law, Philippine
courts may, however, recognize a foreign divorce decree under the second paragraph of
Article 26 of the Family Code, to capacitate a Filipino citizen to remarry when his or her
foreign spouse obtained a divorce decree abroad.65
There is therefore no reason to disallow Fujiki to simply prove as a fact the Japanese Family
Court judgment nullifying the marriage between Marinay and Maekara on the ground of
bigamy. While the Philippines has no divorce law, the Japanese Family Court judgment is
fully consistent with Philippine public policy, as bigamous marriages are declared void from
the beginning under Article 35(4) of the Family Code. Bigamy is a crime under Article 349 of
the Revised Penal Code. Thus, Fujiki can prove the existence of the Japanese Family Court
judgment in accordance with Rule 132, Sections 24 and 25, in relation to Rule 39, Section
48(b) of the Rules of Court.
II.
Since the recognition of a foreign judgment only requires proof of fact of the judgment, it
may be made in a special proceeding for cancellation or correction of entries in the civil
registry under Rule 108 of the Rules of Court. Rule 1, Section 3 of the Rules of Court
provides that "[a] special proceeding is a remedy by which a party seeks to establish a
status, a right, or a particular fact." Rule 108 creates a remedy to rectify facts of a persons
life which are recorded by the State pursuant to the Civil Register Law or Act No. 3753.
These are facts of public consequence such as birth, death or marriage,66 which the State
has an interest in recording. As noted by the Solicitor General, in Corpuz v. Sto. Tomas this
Court declared that "[t]he recognition of the foreign divorce decree may be made in a Rule
108 proceeding itself, as the object of special proceedings (such as that in Rule 108 of the
Rules of Court) is precisely to establish the status or right of a party or a particular fact."67
Rule 108, Section 1 of the Rules of Court states:
Sec. 1. Who may file petition. Any person interested in any act, event, order or
decree concerning the civil status of persons which has been recorded in the civil
register, may file a verified petition for the cancellation or correction of any entry relating
thereto, with the Regional Trial Court of the province where the corresponding civil registry
is located. (Emphasis supplied)
Fujiki has the personality to file a petition to recognize the Japanese Family Court judgment
nullifying the marriage between Marinay and Maekara on the ground of bigamy because the
judgment concerns his civil status as married to Marinay. For the same reason he has the
personality to file a petition under Rule 108 to cancel the entry of marriage between
Marinay and Maekara in the civil registry on the basis of the decree of the Japanese Family
Court.
There is no doubt that the prior spouse has a personal and material interest in maintaining
the integrity of the marriage he contracted and the property relations arising from it. There
is also no doubt that he is interested in the cancellation of an entry of a bigamous marriage
in the civil registry, which compromises the public record of his marriage. The interest
derives from the substantive right of the spouse not only to preserve (or dissolve, in limited
instances68) his most intimate human relation, but also to protect his property interests that
arise by operation of law the moment he contracts marriage.69 These property interests in
marriage include the right to be supported "in keeping with the financial capacity of the
family"70 and preserving the property regime of the marriage.71
Property rights are already substantive rights protected by the Constitution,72 but a spouses
right in a marriage extends further to relational rights recognized under Title III ("Rights and
Obligations between Husband and Wife") of the Family Code.73 A.M. No. 02-11-10-SC cannot
"diminish, increase, or modify" the substantive right of the spouse to maintain the integrity
of his marriage.74 In any case, Section 2(a) of A.M. No. 02-11-10-SC preserves this
substantive right by limiting the personality to sue to the husband or the wife of the union
recognized by law.
Section 2(a) of A.M. No. 02-11-10-SC does not preclude a spouse of a subsisting marriage to
question the validity of a subsequent marriage on the ground of bigamy. On the contrary,
when Section 2(a) states that "[a] petition for declaration of absolute nullity of void
marriage may be filed solely by the husband or the wife"75it refers to the husband or the
wife of the subsisting marriage. Under Article 35(4) of the Family Code, bigamous marriages
are void from the beginning. Thus, the parties in a bigamous marriage are neither the
husband nor the wife under the law. The husband or the wife of the prior subsisting
marriage is the one who has the personality to file a petition for declaration of absolute
nullity of void marriage under Section 2(a) of A.M. No. 02-11-10-SC.
Article 35(4) of the Family Code, which declares bigamous marriages void from the
beginning, is the civil aspect of Article 349 of the Revised Penal Code,76 which penalizes
bigamy. Bigamy is a public crime. Thus, anyone can initiate prosecution for bigamy because
any citizen has an interest in the prosecution and prevention of crimes.77If anyone can file a
criminal action which leads to the declaration of nullity of a bigamous marriage, 78 there is
more reason to confer personality to sue on the husband or the wife of a subsisting
marriage. The prior spouse does not only share in the public interest of prosecuting and
preventing crimes, he is also personally interested in the purely civil aspect of protecting his
marriage.
When the right of the spouse to protect his marriage is violated, the spouse is clearly an
injured party and is therefore interested in the judgment of the suit.79 Juliano-Llave ruled
that the prior spouse "is clearly the aggrieved party as the bigamous marriage not only
threatens the financial and the property ownership aspect of the prior marriage but most of
all, it causes an emotional burden to the prior spouse."80 Being a real party in interest, the
prior spouse is entitled to sue in order to declare a bigamous marriage void. For this
purpose, he can petition a court to recognize a foreign judgment nullifying the bigamous
marriage and judicially declare as a fact that such judgment is effective in the Philippines.
Once established, there should be no more impediment to cancel the entry of the bigamous
marriage in the civil registry.
III.
In Braza v. The City Civil Registrar of Himamaylan City, Negros Occidental, this Court held
that a "trial court has no jurisdiction to nullify marriages" in a special proceeding for
cancellation or correction of entry under Rule 108 of the Rules of Court.81 Thus, the "validity
of marriage[] x x x can be questioned only in a direct action" to nullify the marriage.82 The
RTC relied on Braza in dismissing the petition for recognition of foreign judgment as a
collateral attack on the marriage between Marinay and Maekara.
Braza is not applicable because Braza does not involve a recognition of a foreign judgment
nullifying a bigamous marriage where one of the parties is a citizen of the foreign country.
To be sure, a petition for correction or cancellation of an entry in the civil registry cannot
substitute for an action to invalidate a marriage. A direct action is necessary to prevent
circumvention of the substantive and procedural safeguards of marriage under the Family
Code, A.M. No. 02-11-10-SC and other related laws. Among these safeguards are the
requirement of proving the limited grounds for the dissolution of
marriage,83 support pendente lite of the spouses and children,84 the liquidation, partition
and distribution of the properties of the spouses,85 and the investigation of the public
prosecutor to determine collusion.86 A direct action for declaration of nullity or annulment
of marriage is also necessary to prevent circumvention of the jurisdiction of the Family
Courts under the Family Courts Act of 1997 (Republic Act No. 8369), as a petition for
cancellation or correction of entries in the civil registry may be filed in the Regional Trial
Court "where the corresponding civil registry is located."87 In other words, a Filipino citizen
cannot dissolve his marriage by the mere expedient of changing his entry of marriage in the
civil registry.
However, this does not apply in a petition for correction or cancellation of a civil registry
entry based on the recognition of a foreign judgment annulling a marriage where one of the
parties is a citizen of the foreign country. There is neither circumvention of the substantive
and procedural safeguards of marriage under Philippine law, nor of the jurisdiction of Family
Courts under R.A. No. 8369. A recognition of a foreign judgment is not an action to nullify a
marriage. It is an action for Philippine courts to recognize the effectivity of a foreign
judgment, which presupposes a case which was already tried and decided under foreign
law. The procedure in A.M. No. 02-11-10-SC does not apply in a petition to recognize a
foreign judgment annulling a bigamous marriage where one of the parties is a citizen of the
foreign country. Neither can R.A. No. 8369 define the jurisdiction of the foreign court.
Article 26 of the Family Code confers jurisdiction on Philippine courts to extend the effect of
a foreign divorce decree to a Filipino spouse without undergoing trial to determine the
validity of the dissolution of the marriage. The second paragraph of Article 26 of the Family
Code provides that "[w]here a marriage between a Filipino citizen and a foreigner is validly
celebrated and a divorce is thereafter validly obtained abroad by the alien spouse
capacitating him or her to remarry, the Filipino spouse shall have capacity to remarry under
Philippine law." In Republic v. Orbecido,88 this Court recognized the legislative intent of the
second paragraph of Article 26 which is "to avoid the absurd situation where the Filipino
spouse remains married to the alien spouse who, after obtaining a divorce, is no longer
married to the Filipino spouse"89 under the laws of his or her country. The second paragraph
of Article 26 of the Family Code only authorizes Philippine courts to adopt the effects of a
foreign divorce decree precisely because the Philippines does not allow divorce. Philippine
courts cannot try the case on the merits because it is tantamount to trying a case for
divorce.
The second paragraph of Article 26 is only a corrective measure to address the anomaly that
results from a marriage between a Filipino, whose laws do not allow divorce, and a foreign
citizen, whose laws allow divorce. The anomaly consists in the Filipino spouse being tied to
the marriage while the foreign spouse is free to marry under the laws of his or her country.
The correction is made by extending in the Philippines the effect of the foreign divorce
decree, which is already effective in the country where it was rendered. The second
paragraph of Article 26 of the Family Code is based on this Courts decision in Van Dorn v.
Romillo90 which declared that the Filipino spouse "should not be discriminated against in her
own country if the ends of justice are to be served."91
The principle in Article 26 of the Family Code applies in a marriage between a Filipino and a
foreign citizen who obtains a foreign judgment nullifying the marriage on the ground of
bigamy. The Filipino spouse may file a petition abroad to declare the marriage void on the
ground of bigamy. The principle in the second paragraph of Article 26 of the Family Code
applies because the foreign spouse, after the foreign judgment nullifying the marriage, is
capacitated to remarry under the laws of his or her country. If the foreign judgment is not
recognized in the Philippines, the Filipino spouse will be discriminatedthe foreign spouse
can remarry while the Filipino spouse cannot remarry.
Under the second paragraph of Article 26 of the Family Code, Philippine courts are
empowered to correct a situation where the Filipino spouse is still tied to the marriage while
the foreign spouse is free to marry. Moreover, notwithstanding Article 26 of the Family
Code, Philippine courts already have jurisdiction to extend the effect of a foreign judgment
in the Philippines to the extent that the foreign judgment does not contravene domestic
public policy. A critical difference between the case of a foreign divorce decree and a foreign
judgment nullifying a bigamous marriage is that bigamy, as a ground for the nullity of
marriage, is fully consistent with Philippine public policy as expressed in Article 35(4) of the
Family Code and Article 349 of the Revised Penal Code. The Filipino spouse has the option to
undergo full trial by filing a petition for declaration of nullity of marriage under A.M. No. 02-
11-10-SC, but this is not the only remedy available to him or her. Philippine courts have
jurisdiction to recognize a foreign judgment nullifying a bigamous marriage, without
prejudice to a criminal prosecution for bigamy.
In the recognition of foreign judgments, Philippine courts are incompetent to substitute
their judgment on how a case was decided under foreign law. They cannot decide on the
"family rights and duties, or on the status, condition and legal capacity" of the foreign citizen
who is a party to the foreign judgment. Thus, Philippine courts are limited to the question of
whether to extend the effect of a foreign judgment in the Philippines. In a foreign judgment
relating to the status of a marriage involving a citizen of a foreign country, Philippine courts
only decide whether to extend its effect to the Filipino party, under the rule of lex
nationalii expressed in Article 15 of the Civil Code.
For this purpose, Philippine courts will only determine (1) whether the foreign judgment is
inconsistent with an overriding public policy in the Philippines; and (2) whether any alleging
party is able to prove an extrinsic ground to repel the foreign judgment, i.e. want of
jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact. If
there is neither inconsistency with public policy nor adequate proof to repel the judgment,
Philippine courts should, by default, recognize the foreign judgment as part of the comity of
nations. Section 48(b), Rule 39 of the Rules of Court states that the foreign judgment is
already "presumptive evidence of a right between the parties." Upon recognition of the
foreign judgment, this right becomes conclusive and the judgment serves as the basis for
the correction or cancellation of entry in the civil registry. The recognition of the foreign
judgment nullifying a bigamous marriage is a subsequent event that establishes a new
status, right and fact92 that needs to be reflected in the civil registry. Otherwise, there will
be an inconsistency between the recognition of the effectivity of the foreign judgment and
the public records in the Philippines.1wphi1
However, the recognition of a foreign judgment nullifying a bigamous marriage is without
prejudice to prosecution for bigamy under Article 349 of the Revised Penal Code.93 The
recognition of a foreign judgment nullifying a bigamous marriage is not a ground for
extinction of criminal liability under Articles 89 and 94 of the Revised Penal Code. Moreover,
under Article 91 of the Revised Penal Code, "[t]he term of prescription [of the crime of
bigamy] shall not run when the offender is absent from the Philippine archipelago."
Since A.M. No. 02-11-10-SC is inapplicable, the Court no longer sees the need to address the
questions on venue and the contents and form of the petition under Sections 4 and 5,
respectively, of A.M. No. 02-11-10-SC.
WHEREFORE, we GRANT the petition. The Order dated 31 January 2011 and the Resolution
dated 2 March 2011 of the Regional Trial Court, Branch 107, Quezon City, in Civil Case No.
Q-11-68582 are REVERSED and SET ASIDE. The Regional Trial Court
is ORDERED to REINSTATE the petition for further proceedings in accordance with this
Decision.
SO ORDERED.
THE CITY OF CEBU, petitioner, vs. SPOUSES APOLONIO and BLASA DEDAMO, respondents.
DECISION
DAVIDE, JR., C.J.:
In its petition for review on certiorari under Rule 45 of the 1997 Rules of Civil
Procedure, petitioner City of Cebu assails the decision of 11 October 1999 of the Court of
Appeals in CA-G.R. CV No. 59204[1] affirming the judgment of 7 May 1996 of the Regional
Trial Court, Branch 13, Cebu City, in Civil Case No. CEB-14632, a case for eminent domain,
which fixed the valuation of the land subject thereof on the basis of the recommendation of
the commissioners appointed by it.
The material operative facts are not disputed.
On 17 September 1993, petitioner City of Cebu filed in Civil Case No. CEB-14632 a
complaint for eminent domain against respondents spouses Apolonio and Blasa
Dedamo. The petitioner alleged therein that it needed the following parcels of land
of respondents, to wit:
Lot No. 1527
Area----------------------------1,146 square meters
Tax Declaration---------------03472
Title No.-----------------------31833
Market value------------------P240,660.00
Assessed Value---------------P72,200.00
Lot No. 1528
Area--------------------------------------------------------793 square meters
Area sought to be-----------------------------------------478 square meters expropriated
Tax Declaration-------------------------------------------03450
Title No. ---------------------------------------------------31832
Market value for the whole lot--------------------------P1,666,530.00
Market value of the Area to be expropriated----------P100,380.00
Assessed Value--------------------------------------------P49,960.00
for a public purpose, i.e., for the construction of a public road which shall serve as an
access/relief road of Gorordo Avenue to extend to the General Maxilum Avenue and the
back of Magellan International Hotel Roads in Cebu City. The lots are the most suitable site
for the purpose. The total area sought to be expropriated is 1,624 square meters with an
assessed value of P1,786,400. Petitioner deposited with the Philippine National Bank the
amount of P51,156 representing 15% of the fair market value of the property to enable the
petitioner to take immediate possession of the property pursuant to Section 19 of R.A. No.
7160.[2]
Respondents, filed a motion to dismiss the complaint because the purpose for which
their property was to be expropriated was not for a public purpose but for benefit of a
single private entity, the Cebu Holdings, Inc. Petitioner could simply buy directly from them
the property at its fair market value if it wanted to, just like what it did with the neighboring
lots. Besides, the price offered was very low in light of the consideration of P20,000 per
square meter, more or less, which petitioner paid to the neighboring lots. Finally,
respondents alleged that they have no other land in Cebu City.
A pre-trial was thereafter had.
On 23 August 1994, petitioner filed a motion for the issuance of a writ of possession
pursuant to Section 19 of R.A. No. 7160. The motion was granted by the trial court on 21
September 1994.[3]
On 14 December 1994, the parties executed and submitted to the trial court an
Agreement[4] wherein they declared that they have partially settled the case and in
consideration thereof they agreed:
1. That the SECOND PARTY hereby conforms to the intention to [sic] the FIRST
PARTY in expropriating their parcels of land in the above-cited case as for
public purpose and for the benefit of the general public;
2. That the SECOND PARTY agrees to part with the ownership of the subject
parcels of land in favor of the FIRST PARTY provided the latter will pay just
compensation for the same in the amount determined by the court after due
notice and hearing;
3. That in the meantime the SECOND PARTY agrees to receive the amount of ONE
MILLION SEVEN HUNDRED EIGHTY SIX THOUSAND FOUR HUNDRED PESOS
(1,786,400.00) as provisional payment for the subject parcels of land, without
prejudice to the final valuation as maybe determined by the court;
4. That the FIRST PARTY in the light of the issuance of the Writ of Possession Order
dated September 21, 1994 issued by the Honorable Court, agreed to take
possession over that portion of the lot sought to be expropriated where the
house of the SECOND PARTY was located only after fifteen (15) days upon the
receipt of the SECOND PARTY of the amount of P1,786,400.00;
5. That the SECOND PARTY upon receipt of the aforesaid provisional amount, shall
turn over to the FIRST PARTY the title of the lot and within the lapse of the
fifteen (15) days grace period will voluntarily demolish their house and the
other structure that may be located thereon at their own expense;
6. That the FIRST PARTY and the SECOND PARTY jointly petition the Honorable
Court to render judgment in said Civil Case No. CEB-14632 in accordance with
this AGREEMENT;
 7. That the judgment sought to be rendered under this agreement shall be
followed by a supplemental judgment fixing the just compensation for the
property of the SECOND PARTY after the Commissioners appointed by this
Honorable Court to determine the same shall have rendered their report and
approved by the court.
Pursuant to said agreement, the trial court appointed three commissioners to
determine the just compensation of the lots sought to be expropriated. The commissioners
were Palermo M. Lugo, who was nominated by petitioner and who was designated as
Chairman; Alfredo Cisneros, who was nominated by respondents; and Herbert E. Buot, who
was designated by the trial court. The parties agreed to their appointment.
Thereafter, the commissioners submitted their report, which contained their respective
assessments of and recommendation as to the valuation of the property.
On the basis of the commissioners report and after due deliberation thereon, the trial
court rendered its decision on 7 May 1996,[5] the decretal portion of which reads:
WHEREFORE, in view of the foregoing, judgment is hereby rendered in accordance with the
report of the commissioners.
Plaintiff is directed to pay Spouses Apolonio S. Dedamo and Blasa Dedamo the sum of pesos:
TWENTY FOUR MILLION EIGHT HUNDRED SIXTY-FIVE THOUSAND AND NINE HUNDRED
THIRTY (P24,865.930.00) representing the compensation mentioned in the Complaint.
Plaintiff and defendants are directed to pay the following commissioners fee;
1. To Palermo Lugo - P21,000.00
2. To Herbert Buot - P19,000.00
3. To Alfredo Cisneros - P19,000.00
Without pronouncement as to cost.
SO ORDERED.
Petitioner filed a motion for reconsideration on the ground that the commissioners
report was inaccurate since it included an area which was not subject to
expropriation. More specifically, it contended that Lot No. 1528 contains 793 square meters
but the actual area to be expropriated is only 478 square meters. The remaining 315 square
meters is the subject of a separate expropriation proceeding in Civil Case No. CEB-8348,
then pending before Branch 9 of the Regional Trial Court of Cebu City.
On 16 August 1996, the commissioners submitted an amended assessment for the 478
square meters of Lot No. 1528 and fixed it at P12,824.10 per square meter, or in the amount
of P20,826,339.50. The assessment was approved as the just compensation thereof by the
trial court in its Order of 27 December 1996.[6] Accordingly, the dispositive portion of the
decision was amended to reflect the new valuation.
Petitioner elevated the case to the Court of Appeals, which docketed the case as CA-
G.R. CV No. 59204. Petitioner alleged that the lower court erred in fixing the amount of just
compensation at P20,826,339.50. The just compensation should be based on the prevailing
market price of the property at the commencement of the expropriation proceedings.
The petitioner did not convince the Court of Appeals. In its decision of 11 October
1999,[7] the Court of Appeals affirmed in toto the decision of the trial court.
Still unsatisfied, petitioner filed with us the petition for review in the case at bar. It
raises the sole issue of whether just compensation should be determined as of the date of
the filing of the complaint. It asserts that it should be, which in this case should be 17
September 1993 and not at the time the property was actually taken in 1994, pursuant to
the decision in National Power Corporation vs. Court of Appeals.[8]
In their Comment, respondents maintain that the Court of Appeals did not err in
affirming the decision of the trial court because (1) the trial court decided the case on the
basis of the agreement of the parties that just compensation shall be fixed by
commissioners appointed by the court; (2) petitioner did not interpose any serious objection
to the commissioners report of 12 August 1996 fixing the just compensation of the 1,624-
square meter lot at P20,826,339.50; hence, it was estopped from attacking the report on
which the decision was based; and (3) the determined just compensation fixed is even lower
than the actual value of the property at the time of the actual taking in 1994.
 Eminent domain is a fundamental State power that is inseparable from sovereignty. It is SEC. 5. Ascertainment of compensation. -- Upon the entry of the order of condemnation, the
the Governments right to appropriate, in the nature of a compulsory sale to the State, court shall appoint not more than three (3) competent and disinterested persons as
private property for public use or purpose.[9] However, the Government must pay the owner commissioners to ascertain and report to the court the just compensation for the property
thereof just compensation as consideration therefor. sought to be taken. The order of appointment shall designate the time and place of the first
session of the hearing to be held by the commissioners and specify the time within which
In the case at bar, the applicable law as to the point of reckoning for the determination
their report is to be filed with the court.
of just compensation is Section 19 of R.A. No. 7160, which expressly provides that just
compensation shall be determined as of the time of actual taking. The Section reads as
More than anything else, the parties, by a solemn document freely and voluntarily
follows:
agreed upon by them, agreed to be bound by the report of the commission and approved by
the trial court. The agreement is a contract between the parties. It has the force of law
SECTION 19. Eminent Domain. -- A local government unit may, through its chief executive
between them and should be complied with in good faith. Article 1159 and 1315 of the Civil
and acting pursuant to an ordinance, exercise the power of eminent domain for public use,
Code explicitly provides:
or purpose or welfare for the benefit of the poor and the landless, upon payment of just
compensation, pursuant to the provisions of the Constitution and pertinent laws: Provided,
Art. 1159. Obligations arising from contracts have the force of law between the contracting
however, That the power of eminent domain may not be exercised unless a valid and
parties and should be complied with in good faith.
definite offer has been previously made to the owner, and such offer was not
accepted: Provided, further, That the local government unit may immediately take
Art. 1315. Contracts are perfected by mere consent, and from that moment the parties are
possession of the property upon the filing of the expropriation proceedings and upon
bound not only to the fulfillment of what has been expressly stipulated but also to all the
making a deposit with the proper court of at least fifteen percent (15%) of the fair market
consequences which, according to their nature, may be in keeping with good faith, usage
value of the property based on the current tax declaration of the property to be
and law.
expropriated: Provided finally, That, the amount to be paid for the expropriated property
shall be determined by the proper court, based on the fair market value at the time of the
taking of the property. Furthermore, during the hearing on 22 November 1996, petitioner did not interpose a
serious objection.[11] It is therefore too late for petitioner to question the valuation now
without violating the principle of equitable estoppel. Estoppel in pais arises when one, by his
The petitioner has misread our ruling in The National Power Corp. vs. Court of
acts, representations or admissions, or by his own silence when he ought to speak out,
Appeals.[10] We did not categorically rule in that case that just compensation should be
intentionally or through culpable negligence, induces another to believe certain facts to
determined as of the filing of the complaint. We explicitly stated therein that although the
exist and such other rightfully relies and acts on such belief, so that he will be prejudiced if
general rule in determining just compensation in eminent domain is the value of the
the former is permitted to deny the existence of such facts.[12] Records show that petitioner
property as of the date of the filing of the complaint, the rule admits of an exception: where
consented to conform with the valuation recommended by the commissioners. It cannot
this Court fixed the value of the property as of the date it was taken and not at the date of
detract from its agreement now and assail correctness of the commissioners assessment.
the commencement of the expropriation proceedings.
Finally, while Section 4, Rule 67 of the Rules of Court provides that just compensation
Also, the trial court followed the then governing procedural law on the matter, which
shall be determined at the time of the filing of the complaint for expropriation, [13]such law
was Section 5 of Rule 67 of the Rules of Court, which provided as follows:
cannot prevail over R.A. 7160, which is a substantive law.[14]
 WHEREFORE, finding no reversible error in the assailed judgment of the Court of
Appeals in CA-G.R. CV No. 59204, the petition in this case is hereby DENIED.
No pronouncement as to costs.
SO ORDERED.
FIRST DIVISION
G.R. No. 167052, March 11, 2015
BANK OF THE PHILIPPINE ISLANDS SECURITIES CORPORATION, Petitioner, v. EDGARDO V.
GUEVARA, Respondent.
DECISION
LEONARDO-DE CASTRO, J.:
Before the Court is a Petition for Review under Rule 45 of the Rules of Court seeking the
reversal and setting aside of the Decision1 dated December 19, 2003 and Resolution2 dated
February 9, 2005 of the Court Appeals in CA-G.R. CV No. 69348, affirming the
Decision3 dated September 11, 2000 of the Regional Trial Court (RTC) of Makati City, Branch
57 in Civil Case No. 92-1445. The RTC acted favorably on the action instituted by
respondent Edgardo V. Guevara for the enforcement of a foreign judgment, particularly, the
Order4 dated March 13, 1990 of the United States (U.S.) District Court for the Southern
District of Texas, Houston Division (U.S. District Court), in Civil Action No. H-86-440, and
ordered petitioner Bank of the Philippine Islands (BPI) Securities Corporation to pay
respondent (a) the sum of US$49,500.00 with legal interest; (b) P250,000.00 attorneys fees
and litigation expenses; and (c) costs of suit.
The facts are culled from the records of the case.
Ayala Corporation, a holding company, and its subsidiaries are engaged in a wide array of
businesses including real estate, financial services, telecommunications, water and used
water, electronics manufacturing services, automotive dealership and distributorship,
business process outsourcing, power, renewable energy, and transport infrastructure. 5
In the 1980s, Ayala Corporation was the majority stockholder of Ayala Investment and
Development Corporation (AIDC). AIDC, in turn, wholly owned Philsec Investment
Corporation (PHILSEC), a domestic stock brokerage firm, which was subsequently bought by
petitioner; and Ayala International Finance Limited (AIFL), a Hong Kong deposit-taking
corporation, which eventually became BPI International Finance Limited (BPI-IFL). PHILSEC
was a member of the Makati Stock Exchange and the rules of the said organization required
that a stockbroker maintain an amount of security equal to at least 50% of a clients
outstanding debt.
Respondent was hired by Ayala Corporation in 1958. Respondent later became the Head of
the Legal Department of Ayala Corporation and then the President of PHILSEC from
September 1, 1980 to December 31, 1983. Thereafter, respondent served as Vice-President
of Ayala Corporation until his retirement on August 31, 1997.
While PHILSEC President, one of respondents obligations was to resolve the outstanding
loans of Ventura O. Ducat (Ducat), which the latter obtained separately from PHILSEC and
AIFL. Although Ducat constituted a pledge of his stock portfolio valued at approximately
US$1.4 million, Ducats loans already amounted to US$3.1 million. Because the security for
Ducats debts fell below the 50% requirement of the Makati Stock Exchange, the trading
privileges of PHILSEC was in peril of being suspended.
Ducat proposed to settle his debts by an exchange of assets. Ducat owned several pieces of
real estate in Houston, Texas, in partnership with Drago Daic (Daic), President of 1488, Inc.,
a U.S.-based corporation. Respondent relayed Ducats proposal to Enrique Zobel (Zobel),
the Chief Executive Officer of Ayala Corporation. Zobel was amenable to Ducats proposal
but advised respondent to send Thomas Gomez (Gomez), an AIFL employee who traveled
often to the U.S., to evaluate Ducats properties.
In December of 1982, Gomez examined several parcels of real estate that were being
offered by Ducat and 1488, Inc. for the exchange. Gomez, in a telex to respondent,
recommended the acceptance of a parcel of land in Harris County, Texas (Harris County
property), which was believed to be worth around US$2.9 million. Gomez further opined
that the swap would be fair and reasonable and that it would be better to take this
opportunity rather than pursue a prolonged legal battle with Ducat. Gomezs
recommendation was brought to Zobels attention. The property-for-debt exchange was
subsequently approved by the AIFL Board of Directors even without a prior appraisal of the
Harris County property. However, before the exchange actually closed, an AIFL director
asked respondent to obtain such an appraisal.
William Craig (Craig), a former owner of the Harris County property, conducted the appraisal
of the market value of the said property. In his January 1983 appraisal, Craig estimated the
fair market value of the Harris County property at US$3,365,000.
Negotiations finally culminated in an Agreement,6 executed on January 27, 1983 in Makati
City, Philippines, among 1488, Inc., represented by Daic; Ducat, represented by Precioso
Perlas (Perlas); AIFL, represented by Joselito Gallardo (Gallardo); and PHILSEC and Athona
Holdings, N. V. (ATHONA), both represented by respondent. Under the Agreement, the
total amount of Ducats debts was reduced from US$3.1 million to US$2.5 million; ATHONA,
a company wholly owned by PHILSEC and AIFL, would buy the Harris County property from
1488, Inc. for the price of US$2,807,209.02; PHILSEC and AIFL would grant ATHONA a loan of
US$2.5 million, which ATHONA would entirely use as initial payment for the purchase price
of the Harris County property; ATHONA would execute a promissory note in favor of 1488,
Inc. in the sum of US$307,209.02 to cover the balance of the purchase price for the Harris
County property; upon its receipt of the initial payment of US$2.5 million from ATHONA,
1488, Inc. would then fully pay Ducats debts to PHILSEC and AIFL in the same amount; for
their part, PHILSEC and AIFL would release and transfer possession of Ducats pledged stock
portfolio to 1488, Inc.; and 1488, Inc. would become the new creditor of Ducat, subject to
such other terms as they might agree upon.
The series of transactions per the Agreement was eventually executed. However, after
acquiring the Harris County property, ATHONA had difficulty selling the same. Despite
repeated demands by 1488, Inc., ATHONA failed to pay its promissory note for the balance
of the purchase price for the Harris County property, and PHILSEC and AIFL refused to
release the remainder of Ducats stock portfolio, claiming that they were defrauded into
believing that the said property had a fair market value higher than it actually had.
Civil Action No. H-86-440 before the
U.S. District Court of Southern District
of Texas, Houston Division
On October 17, 1985, 1488, Inc. instituted a suit against PHILSEC, AIFL, and ATHONA for (a)
misrepresenting that an active market existed for two shares of stock included in Ducats
portfolio when, in fact, said shares were to be withdrawn from the trading list; (b)
conversion of the stock portfolio; (c) fraud, as ATHONA had never intended to abide by the
provisions of its promissory note when they signed it; and (d) acting in concert as a common
enterprise or in the alternative, that ATHONA was the alter ego of PHILSEC and AIFL. The
suit was docketed as Civil Action No. H-86-440 before the U.S. District Court.
PHILSEC, AIFL, and ATHONA filed counterclaims against 1488, Inc., Daic, Craig, Ducat, and
respondent, for the recovery of damages and excess payment or, in the alternative, the
rescission of the sale of the Harris County property, alleging fraud, negligence, and
conspiracy on the part of counter-defendants who knew or should have known that the
value of said property was less than the appraisal value assigned to it by Craig.
Before the referral of the case to the jury for verdict, the U.S. District Court dropped
respondent as counter-defendant for lack of evidence to support the allegations against
him. Respondent then moved in open court to sanction petitioner (formerly PHILSEC), AIFL,
and ATHONA based on Rule 11 of the U.S. Federal Rules of Civil Procedure. 7
In its Order dated March 13, 1990, the U.S. District Court stated that on February 14, 1990,
after trial, the jury returned a verdict for 1488, Inc. In the same Order, the U.S. District Court
ruled favorably on respondents pending motion for sanction, thus:
During the course of the trial, the Court was required to review plaintiffs Exhibit No. 91 to
determine whether the exhibit should be admitted. After reviewing the exhibit and hearing
the evidence, the Court concluded that the defendants counterclaims against Edgardo V.
Guevara are frivolous and brought against him simply to humiliate and embarrass him. It is
the opinion of the Court that the defendants, Philsec Investment Corporation, A/K/A BPI
Securities, Inc., and Ayala International Finance Limited, should be sanctioned appropriately
based on Fed. R. Civ. P. 11 and the Courts inherent powers to punish unconscionable
conduct. Based upon the motion and affidavit of Edgardo V. Guevara, the Court finds that
$49,450 is reasonable punishment.
ORDERED that defendants, Philsec Investment Corporation A/K/A BPI Securities, Inc., and
Ayala International Finance Limited, jointly and severally, shall pay to Edgardo V. Guevara
$49,450 within 30 days of the entry of this order.8
Petitioner, AIFL, and ATHONA appealed the jury verdict, as well as the aforementioned
order of the U.S. District Court for them to pay respondent US$49,450.00; while 1488, Inc.
appealed a post-judgment decision of the U.S. District Court to amend the amount of
attorneys fees awarded. The appeals were docketed as Case No. 90-2370 before the U.S.
Court of Appeals, Fifth Circuit.
The U.S. Court of Appeals rendered its Decision on September 3, 1991 affirming the verdict
in favor of 1488, Inc. The U.S. Court of Appeals found no basis for the allegations of fraud
made by petitioner, AIFL, and ATHONA against 1488, Inc., Daic, Craig, and Ducat:
[2] To state a cause of action for fraud under Texas law, a plaintiff must allege sufficient
facts to show:
(1) that a material representation was made;
(2) that it was false;
(3) that when the speaker made it he knew that it was false or made it recklessly
without any knowledge of the truth and as a positive assertion;
(4) that he made it with the intention that it should be acted on by the party;
(5) that the party acted in reliance upon it;
(6) that he thereby suffered injury.
Stone v. Lawyers Title Ins. Corp., 554 S.W.2d 183, 185 (Tex.1977). We agree with the district
courts decision to grant a directed verdict against the defendants. The defendants failed to
allege sufficient facts to establish the elements necessary to demonstrate fraud. In
particular, the defendants have failed to allege any facts that would tend to show that the
plaintiff or any of the third party defendants made a false representation or a
representation with reckless disregard as to its truth.
The Houston real estate market was extremely volatile during the late 1970s and the early
1980s. Like a stream of hot air, property values rose rapidly as the heat and fury generated
by speculation and construction plans mounted, but, just as rapidly, the climate cooled and
the high-flying market came crashing to an all time low. The real estate transaction involved
in this case was certainly affected by this environment of capriciousness. Moreover, a
number of additional variables may have contributed to the uncertainty of its value. For
instance, the land abutted a two-lane asphalt road that had been targeted by the state for
conversion into a major multi-lane divided highway. Water and sewage treatment facilities
were located near the boundary lines of the property. In addition, Houstons lack of
conventional zoning ordinances meant that the value of the property could fluctuate
depending upon the use (commercial or residential) for which the property would ultimately
be used.
[3] The fact that the defendants were unable to sell the property at the price for which it
had been appraised does not demonstrate that the plaintiff or the third party defendants
knew that the value of the property was less than the appraised value, nor does it establish
that the opposing parties were guilty of negligent misrepresentation or negligence.
[4] In support of their allegation of fraud, the defendants rely heavily on a loan application
completed by 1488 shortly before the subject property was transferred to Athona. See
Defendants Exhibit 29. At the time, 1488 still owed approximately $300,000 to Republic of
Texas Savings Association on its original loan for the subject property. The debt had
matured and 1488 was planning to move the loan to Home Savings Association of Houston,
that is, take out a loan from Home Savings to pay off the debt to Republic. 1488 had
planned to borrow $350,000 for that purpose. A line item on the Home Savings loan
application form asked for the amount of the loan as a percentage of the appraised value of
the land. A figure of thirty-nine percent was typed into that space, and the defendants
suggest that this proves that the plaintiff knew Craigs appraisal was erroneous. The
defendants reason that if the $350,000 loan amount was only thirty-nine percent of the
lands appraised value, then the real estate must have been worth approximately $897,436.
Although their analysis is sound, the conclusion reached by the defendants cannot
withstand additional scrutiny. At the time that the loan application was completed, 1488
did not request to have a new appraisal done for the property. Instead, 1488 planned to
use the numbers that had been generated for a quasi-appraisal done in 1977. The 1977
report purported only to supplement an earlier appraisal that had been conducted in
1974, and the supplement described its function as estimating market value for mortgage
loan purposes only. See Defendants Trial Exhibit 4. The two page supplement was based
on such old information that even the Home Savings Association would not accept it
without additional collateral as security for the loan. See Record on Appeal, Vol. 17 at 5-29
to 5-30. The loan, however, was never made because the property was transferred to
Athona, and the outstanding loan to Republic was paid off as part of that transaction. In
addition, the loan application itself was never signed by anyone affiliated with 1488. The
district court was correct in dismissing this argument in support of the defendants fraud
allegations.
[5] The defendants also allege that the plaintiff and counter defendants knew that Craigs
appraisal was fraudulent because the purchasers statement signed by their own
representative, and the sellers statement, signed by the plaintiff, as well as the title
insurance policy all recited a purchase price of $643,416.12. Robert Higgs, general counsel
for 1488, explained that because of the nature of the transaction, 1488, for tax purposes,
wanted the purchase price on the closing statement to reflect only that amount of cash
actually exchanged at the closing as well as the promissory note given at the closing. See
Record on Appeal, Vol. 17 at 5-127. Although the closing documents recite a purchase price
well under the actual sales price, nothing indicates that any of the parties actually believed
the property to be worth less than the sales amount.
The defendants also assert that it was error for the district court to deny them permission to
designate O. Frank McPherson, a Houston appraiser, as an expert witness after the cutoff
date established by a pretrial order for such designations. The defendants contend that the
error prevented them from presenting facts that would support their fraud
allegations. Although the defendants were allowed to present the testimony of another
expert witness on the subject of valuation, they argue that McPhersons testimony was
critical because he had performed an appraisal of the property for the Texas Highway
Department close to the time period during which Craig had made his
appraisal. McPhersons appraisal was performed as part of the States condemnation
proceedings that preceded the planned highway expansion next to the subject property.
xxxx
[9] In their briefs, the defendants fail to provide an adequate explanation for their failure to
identify their expert witness in accordance with the district courts pretrial order. This law
suit was initiated in 1985, and the defendants had until November of 1988 to designate
their expert witnesses. The defendants were aware of the condemnation proceedings, and
they, therefore, had approximately three years to determine the identity of any appraiser
used by the state. The defendants simply failed to make this inquiry.
Enforcement of the district courts pretrial order did not leave the defendants without an
expert witness on the issue of valuation, and the available expert had also conducted
appraisals for the Texas Highway Department in the area surrounding the subject
property. x x x
Although the degree of prejudice suffered by the plaintiff due to the late designation of an
expert would not have been great, a district court still has the discretion to control pretrial
discovery and sanction a partys failure to follow a scheduling order. See id. at 791. Such
action is particularly appropriate here, where the defendants have failed to provide an
adequate explanation for their failure to identify their expert within the designated
timetable.
xxxx
The defendants failed to produce enough evidence from which fraud could be inferred to
justify the submission of the issue to a jury. Conclusional allegations or speculation
regarding what the plaintiff knew or did not know concerning the value of the subject
property are insufficient to withstand a motion for a directed verdict. The district court
committed no error in granting the motion.
xxxx
Since the defendants failed to present the district court with any facts that would tend to
show that the plaintiffs committed a fraud against them, their claim of a conspiracy to
commit fraud must also fail.9
The U.S. Court of Appeals likewise adjudged that petitioner, AIFL, and ATHONA failed to
prove negligence on the part of 1488, Inc., Daic, Craig, and Ducat in the appraisal of the
market value of the said property:
[10, 11] The defendants have likewise failed to present any facts that would tend to support
their claim of negligent misrepresentation or negligence. The defendants rely on
assumptions and unsupportable conclusions of law in establishing their case for
negligence: Assuming the Propertys true value is less than $800,000, it is reasonable
to assume that the counter defendants failed to exercise reasonable care or competence . .
. Brief for Athona at 45-46 x x x. A party may not rely on assumptions of fact to carry their
case forward. The defendants have presented no facts to suggest that the plaintiff was
negligent in acquiring its appraisal. The plaintiff hired Craig, a real estate broker, to perform
the appraisal after the defendants had already given their initial approval for the
transaction. Craig had performed real estate appraisals in the past, and Texas law permits
real estate brokers to conduct such appraisals, see Tex.Rev.Civ.Stat.Ann. art. 6573a, 2(2)(E)
(Vernon Supp. 1988) (Original version at Tex.Rev.Civ.Stat.Ann. art. 6573a, 4(1)(e) (Vernon
1969). These facts do not support a claim of negligence.
For the foregoing reasons the district court committed no error in granting a directed
verdict against the counterclaims advanced by the defendants.10
The U.S. Court of Appeals, however, vacated the award of exemplary damages in favor of
1488, Inc. for the fraudulent misrepresentation regarding the marketability of the two
shares of stock in Ducats portfolio. Under Texas law, a jury may not award damages unless
it was determined that the plaintiff had also sustained actual damages. The U.S. Court of
Appeals agreed with petitioner, AIFL, and ATHONA that 1488, Inc. brought its suit alleging
fraudulent misrepresentation after the two-year statute of limitation had expired. The
misrepresentation issue should never have gone to the jury. Therefore, the jurys finding of
actual damages is nullified; and since the jury verdict is left without a specific finding of
actual damages, the award of exemplary damages must be vacated.
The U.S. Court of Appeals also vacated the award of Rule 11 sanctions in favor of
respondent and against petitioner, AIFL, and ATHONA for being rendered without due
process, and remanded the issue to the U.S. District Court:
[18-20] The Rule 11 motion was first made by Guevara on February 14, 1990, and the court
immediately ruled on the issue without giving the defendants an opportunity to prepare a
written response. See Record on Appeal, Vol. 22 at 10-25 to 10-37. Although, the
defendants were given an opportunity to speak, we conclude that the hearing failed to
comport with the requirements of due process, which demand that the defendants be
provided with adequate notice and an opportunity to prepare a response. See Henderson v.
Department of Public Safety and Corrections, 901 F.2d 1288, 1293-94 (5th
Cir.1990). Providing specific notice and an opportunity to respond is particularly important
in cases, such as the one before us, in which the sanctions have been imposed on the clients
and not the attorneys. See Donaldson v. Clark, 819 F.2d 1551, 1560 (11th Cir.1987) (If
sanctions are proposed to be imposed on the client, due process will demand more specific
notice because the client is likely unaware of the existence of Rule 11 and should be given
the opportunity to prepare a defense.). A separate hearing is not a prerequisite to the
imposition of Rule 11 sanctions, see Donaldson, 819 F.2d at 1560 n. 12, but the defendants
in this case, should have been given more of an opportunity to respond to the motion than
that provided at the hearing in which the motion was first raised. Providing the defendant
with an opportunity to mount a defense on the spot does not comport with due process.
Given that the defendants were not provided with adequate notice or an opportunity to be
heard, we vacate the award of sanctions and remand so that the district court can provide
the defendants with an adequate opportunity to be heard.11
Finally, the U.S. Court of Appeals similarly vacated the award of attorneys fees and
remanded the matter to the U.S. District Court for recalculation to conform with the
requirements provided in the promissory note.
In accordance with the Decision dated September 3, 1991 of the U.S. Court of Appeals, the
U.S. District Court issued an Order12 dated October 28, 1991 giving petitioner, AIFL, and
ATHONA 20 days to formally respond to respondents motion for Rule 11
sanctions. Petitioner, AIFL, and ATHONA jointly filed before the U.S. District Court their
opposition to respondents motion for Rule 11 sanctions.13 Respondent filed his reply to the
opposition, to which petitioner, AIFL, and ATHONA, in turn, filed a reply-brief.14
In an Order15 dated December 31, 1991, the U.S. District Court still found respondents
motion for Rule 11 sanctions meritorious and reinstated its Order dated March 13, 1990:
The basis of the Courts prior decision as well as now is the fact that the defendants filed suit
against Guevara with knowledge that the basis of the suit was unfounded. In the
defendants file was an appraisal from an international appraisal firm, which the defendants
refused to disclose during discovery and was only discovered at a bench conference during a
discussion about appraisers. Based on the defendants own appraisers, no basis existed for
a suit by the defendants against their employee.
The previous judgment entered by this Court is REINSTATED.
The above-quoted Order of the U.S. District Court attained finality as it was no longer
appealed by petitioner, AIFL, and ATHONA.
Through a letter dated February 18, 1992, respondent demanded that petitioner pay the
amount of US$49,450.00 awarded by the U.S. District Court in its Order dated March 13,
1990. Given the continuous failure and/or refusal of petitioner to comply with the said
Order of the U.S. District Court, respondent instituted an action for the enforcement of the
same, which was docketed as Civil Case No. 92-1445 and raffled to the RTC of Makati City,
Branch 57.
Civil Case No. 92-1445 before
Branch 57 of the RTC of Makati City
In his Complaint for the enforcement of the Order dated March 13, 1990 of the U.S. District
Court in Civil Action No. H-86-440, respondent prayed that petitioner be ordered to pay:
1. The sum of US$49,450.00 or its equivalent in Philippine Pesos x x x with interest
from date of demand;
2. Attorneys fees and litigation expenses in the sum of P250,000.00;
3. Exemplary damages of P200,000.00; and
4. Costs of the suit.16
In its Amended Answer Ad Cautelam,17 petitioner opposed the enforcement of the Order
dated March 13, 1990 of the U.S. District Court on the grounds that it was rendered upon a
clear mistake of law or fact and/or in violation of its right to due process.
In the course of the pre-trial and scheduled trial proceedings, the parties respectively
manifested before the court that they were dispensing with the presentation of their
witnesses since the subject matter of their testimonies had already been stipulated upon.18
Thereafter, the parties formally offered their respective evidence which entirely consisted of
documentary exhibits. Respondent submitted authenticated and certified true copies of
Rule 11 of the U.S. Federal Rules of Civil Procedure;19 the Orders dated March 13, 1990,
October 28, 1991, and December 31, 1991 of the U.S. District Court in Civil Action No. H-86-
440;20 the Decision dated September 3, 1991 of the U.S. Court of Appeals in Case No. 90-
2370;21 and the opposition to respondents motion for Rule 11 sanctions and reply-brief
filed by PHILSEC, AIFL, and ATHONA before the U.S. District Court.22 Petitioner presented
photocopies of pleadings, documents, and transcripts of stenographic notes in Civil Action
No. H-86-440 before the U.S. District Court;23 the pleadings filed in other cases related to
Civil Case No. 92-1440;24 and a summary of lawyers fees incurred by petitioner in the
U.S.25 The RTC admitted in evidence the documentary exhibits of the parties in its Orders
dated September 21, 1998 and February 8, 1999,26 and then deemed the case submitted for
decision.
The RTC rendered a Decision on September 11, 2000 with the following dispositive portion:
WHEREFORE, judgment is hereby rendered in favor of [respondent] Edgardo V. Guevara
ordering [petitioner] BPI Securities Corporation to pay [respondent] the following:
1. the sum of US$49,500.00 with legal interest from the filing of this case until fully
paid;
 2. the sum of P250,000.00 as attorneys fees and litigation expenses; and
3. the costs of suit.
An award of exemplary damages for P200,000.00 is denied for being speculative.27
Petitioner appealed to the Court of Appeals, assigning the following errors on the part of the
RTC:
A. The trial court erred in not passing upon the merit or validity of [petitioners]
defenses against the enforcement of the foreign judgment in the Philippines.
Had the trial court considered [petitioners] defenses, it would have concluded that
the foreign judgment was not enforceable because it was made upon a clear
mistake of law or fact and/or was made in violation of the [petitioners] right to due
process.
B. The trial court erred in not utilizing the standard for determining the enforceability
of the foreign award that was agreed upon by the parties to this case during the
pre-trial, namely, did the defendants in the Houston case (PHILSEC, AIFL, AND
ATHONA) have reasonable grounds to implead [respondent] in the Houston case
based upon the body of the evidence submitted therein. Thus, whether or not
PHILSEC, AIFL and ATHONA ultimately prevailed against [respondent] was
immaterial or irrelevant; the question only was whether they had reasonable
grounds to proceed against him, for if they had, then there was admittedly no basis
for the Rule 11 award against them by the Houston Court.
xxxx
C. In the light of its ruling, the trial court failed to pass upon and resolve the other
issues and/or defenses expressly raised by [petitioner], including the defense that
PHILSEC, AIFL, and ATHONA were deprived of their right to defend themselves
against the Rule 11 sanction and the main decision because of the prohibitive cost
of legal representation in the us and also because of the gross negligence of its US
counsel. x x x.28
In its Decision dated December 19, 2003, the Fifth Division of the Court of Appeals decreed:
WHEREFORE, the Decision dated 11 September 2000 in Civil Case No. 92-1445 of the
Regional Trial Court of Makati, Branch 57, is hereby AFFIRMED in all respect with costs
against [petitioner].29
In its Motion for Reconsideration,30 petitioner lamented that the Fifth Division of the Court
of Appeals failed to resolve on its own petitioners appeal as the Decision dated December
19, 2003 of the said Division was copied almost verbatim from respondents brief. Thus,
petitioner prayed that the Fifth Division of the Court of Appeals recuse itself from deciding
petitioners Motion for Reconsideration and that the case be re-raffled to another division.
The Fifth Division of the Court of Appeals maintained in its Resolution dated May 25, 2004
that the issues and contentions of the parties were all duly passed upon and that the case
was decided according to its merits. The said Division, nonetheless, abstained from
resolving petitioners Motion for Reconsideration and directed the re-raffle of the case.31
Petitioners Motion for Reconsideration was re-raffled to and subsequently resolved by the
Tenth Division of the Court of Appeals. In its Resolution dated February 9, 2005, the Tenth
Division of the appellate court denied the said Motion for lack of merit.32
Hence, petitioner seeks recourse from this Court via the instant Petition for Review, insisting
that the Court of Appeals erred in affirming the RTC judgment which enforced the Order
dated March 13, 1990 of the U.S. District Court in Civil Action No. H-86-440.
Petitioner contends that it was not accorded by the Court of Appeals the right to refute the
foreign judgment pursuant to Rule 39, Section 48 of the Rules of Court because the
appellate court gave the effect of res judicata to the said foreign judgment. The Court of
Appeals copied wholesale or verbatim the respondents brief without addressing the body
of evidence adduced by petitioner showing that it had reasonable grounds to implead
respondent in Civil Action No. H-86-440.
Petitioner asserts that the U.S. District Court committed a clear mistake of law and fact in its
issuance of the Order dated March 13, 1990, thus, said Order is unenforceable in this
jurisdiction. Petitioner discusses in detail its evidence proving that respondent, together
with 1488, Inc., Ducat, Craig, and Daic, induced petitioner to agree to a fraudulent
deal. Petitioner points out that respondent had the duty of looking for an independent and
competent appraiser of the market value of the Harris County property; that instead of
choosing an unbiased and skilled appraiser, respondent connived with 1488, Inc., Ducat, and
Daic in selecting Craig, who turned out to be the former owner of the Harris County
property and a close associate of 1488, Inc. and Daic; and that respondent endorsed to
petitioner Craigs appraisal of the market value of the Harris County property, which was
overvalued by more than 400%.
According to petitioner, it had reasonable grounds to implead respondent in Civil Action No.
H-86-440 so the sanction imposed upon it under Rule 11 of the U.S. Federal Rules of Civil
Procedure was unjustified. Petitioner additionally argues that there is no basis for the U.S.
District Court to impose upon it the Rule 11 sanction as there is nothing in the said provision
which allows the imposition of sanctions for simply bringing a meritless lawsuit. If the
Rule 11 sanction was imposed upon petitioner as punishment for impleading a party (when
it had reasonable basis for doing so) and not prevailing against said party, then, petitioner
claims that such a sanction is against Philippine public policy and should not be enforced in
this jurisdiction. Settled in this jurisdiction that there should be no premium attached to the
right to litigate, otherwise parties would be very hesitant to assert a claim in court.
Petitioner further alleges that it was denied due process in Civil Action No H-86-440
because: (1) the U.S. District Court imposed the Rule 11 sanction on the basis of a single
document, i.e., the letter dated September 26, 1983 of Bruce C. Bossom, a partner at Jones
Lang Wooton, a firm of chartered surveyors and international real estate consultants,
addressed to a Mr. Senen L. Matoto of AIFL (marked as Exhibit 91 before the U.S. District
Court), which was never admitted into evidence; (2) in said letter, Jones Lang Wooton was
soliciting a listing agreement and in which the said firm unilaterally, without being asked principle the need for such recognition and enforcement, albeit subject to limitations of
as to the value of the [Harris County] property, indicated a value for the [same] which
approximate[d] with the value given in the Craig appraisal, hence, it cannot be used as
basis to conclude that petitioner, AIFL, and ATHONA assented to Craigs appraisal of the
Harris County property; (3) the counsel who represented petitioner, AIFL, and ATHONA in
Civil Action No. H-86-440 before the U.S. District Court was grossly ignorant and/or
negligent in the prosecution of their counterclaims and/or in proving their defenses, such as
when said counsel failed to present an expert witness who could have testified as to the
actual market value of the Harris County property or when said counsel failed to discredit
respondents credibility despite the availability of evidence that respondent had been
previously fined by the Philippine Securities and Exchange Commission for stock
manipulation; and (4) the excessive and unconscionable legal fees charged by their U.S.
counsel effectively prevented them from making further appeal.
The Court finds the Petition bereft of merit.
In Mijares v. Raada,33 the Court extensively discussed the underlying principles for the
recognition and enforcement of foreign judgments in Philippine jurisdiction:
There is no obligatory rule derived from treaties or conventions that requires the Philippines
to recognize foreign judgments, or allow a procedure for the enforcement
thereof. However, generally accepted principles of international law, by virtue of the
incorporation clause of the Constitution, form part of the laws of the land even if they do
not derive from treaty obligations. The classical formulation in international law sees those
customary rules accepted as binding result from the combination two elements: the
established, widespread, and consistent practice on the part of States; and a psychological
element known as the opinion juris sive necessitates (opinion as to law or necessity). Implicit
in the latter element is a belief that the practice in question is rendered obligatory by the
existence of a rule of law requiring it.
While the definite conceptual parameters of the recognition and enforcement of foreign
judgments have not been authoritatively established, the Court can assert with certainty
that such an undertaking is among those generally accepted principles of international
law. As earlier demonstrated, there is a widespread practice among states accepting in
varying degrees. The fact that there is no binding universal treaty governing the practice is
not indicative of a widespread rejection of the principle, but only a disagreement as to the
imposable specific rules governing the procedure for recognition and enforcement.
Aside from the widespread practice, it is indubitable that the procedure for recognition and
enforcement is embodied in the rules of law, whether statutory or jurisprudential, adopted
in various foreign jurisdictions. In the Philippines, this is evidenced primarily by Section 48,
Rule 39 of the Rules of Court which has existed in its current form since the early
1900s. Certainly, the Philippine legal system has long ago accepted into its jurisprudence
and procedural rules the viability of an action for enforcement of foreign judgment, as well
as the requisites for such valid enforcement, as derived from internationally accepted
doctrines. Again, there may be distinctions as to the rules adopted by each particular state,
but they all prescind from the premise that there is a rule of law obliging states to allow for,
however generally, the recognition and enforcement of a foreign judgment. The bare
principle, to our mind, has attained the status of opinio juris in international practice.
This is a significant proposition, as it acknowledges that the procedure and requisites
outlined in Section 48, Rule 39 derive their efficacy not merely from the procedural rule, but
by virtue of the incorporation clause of the Constitution. Rules of procedure are
promulgated by the Supreme Court, and could very well be abrogated or revised by the high
court itself. Yet the Supreme Court is obliged, as are all State components, to obey the laws
of the land, including generally accepted principles of international law which form part
thereof, such as those ensuring the qualified recognition and enforcement of foreign
judgments. (Citations omitted.)
It is an established international legal principle that final judgments of foreign courts of
competent jurisdiction are reciprocally respected and rendered efficacious subject to certain
conditions that vary in different countries.34 In the Philippines, a judgment or final order of
a foreign tribunal cannot be enforced simply by execution. Such judgment or order merely
creates a right of action, and its non-satisfaction is the cause of action by which a suit can be
brought upon for its enforcement.35 An action for the enforcement of a foreign judgment or
final order in this jurisdiction is governed by Rule 39, Section 48 of the Rules of Court, which
provides:
SEC. 48. Effect of foreign judgments or final orders. The effect of a judgment or final order
of a tribunal of a foreign country, having jurisdiction to render the judgment or final order is
as follows:
(a) In case of a judgment or final order upon a specific thing, the judgment or final order is
conclusive upon the title to the thing; and
(b) In case of a judgment or final order against a person, the judgment or final order is
presumptive evidence of a right as between the parties and their successors in interest by a
subsequent title.
In either case, the judgment or final order may be repelled by evidence of a want of
jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact.
The Court expounded in Mijares on the application of the aforequoted provision:
There is an evident distinction between a foreign judgment in an action in rem and one in
personam. For an action in rem, the foreign judgment is deemed conclusive upon the title
to the thing, while in an action in personam, the foreign judgment is presumptive, and not
conclusive, of a right as between the parties and their successors in interest by a subsequent
title. However, in both cases, the foreign judgment is susceptible to impeachment in our
local courts on the grounds of want of jurisdiction or notice to the party, collusion, fraud, or
clear mistake of law or fact. Thus, the party aggrieved by the foreign judgment is entitled to
defend against the enforcement of such decision in the local forum. It is essential that there
should be an opportunity to challenge the foreign judgment, in order for the court in this
jurisdiction to properly determine its efficacy.
It is clear then that it is usually necessary for an action to be filed in order to enforce a
foreign judgment, even if such judgment has conclusive effect as in the case of in
rem actions, if only for the purpose of allowing the losing party an opportunity to
challenge the foreign judgment, and in order for the court to properly determine its
efficacy. Consequently, the party attacking a foreign judgment has the burden of
overcoming the presumption of its validity.
The rules are silent as to what initiatory procedure must be undertaken in order to enforce a
foreign judgment in the Philippines. But there is no question that the filing of a civil
complaint is an appropriate measure for such purpose. A civil action is one by which a party
sues another for the enforcement or protection of a right, and clearly an action to enforce a
foreign judgment is in essence a vindication of a right prescinding either from a conclusive
judgment upon title or the presumptive evidence of a right. Absent perhaps a statutory
grant of jurisdiction to a quasi-judicial body, the claim for enforcement of judgment must be
brought before the regular courts.
There are distinctions, nuanced but discernible, between the cause of action arising from
the enforcement of a foreign judgment, and that arising from the facts or allegations that
occasioned the foreign judgment. They may pertain to the same set of facts, but there is an
essential difference in the right-duty correlatives that are sought to be vindicated. For
example, in a complaint for damages against a tortfeasor, the cause of action emanates
from the violation of the right of the complainant through the act or omission of the
respondent. On the other hand, in a complaint for the enforcement of a foreign judgment
awarding damages from the same tortfeasor, for the violation of the same right through
the same manner of action, the cause of action derives not from the tortious act but from
the foreign judgment itself.
More importantly, the matters for proof are different. Using the above example, the
complainant will have to establish before the court the tortious act or omission committed
by the tortfeasor, who in turn is allowed to rebut these factual allegations or prove
extenuating circumstances. Extensive litigation is thus conducted on the facts, and from
there the right to and amount of damages are assessed. On the other hand, in an action to
enforce a foreign judgment, the matter left for proof is the foreign judgment itself, and
not the facts from which it prescinds.
As stated in Section 48, Rule 39, the actionable issues are generally restricted to a review
of jurisdiction of the foreign court, the service of personal notice, collusion, fraud, or
mistake of fact or law. The limitations on review [are] in consonance with a strong and
pervasive policy in all legal systems to limit repetitive litigation on claims and
issues. Otherwise known as the policy of preclusion, it seeks to protect party expectations
resulting from previous litigation, to safeguard against the harassment of defendants, to
insure that the task of courts not be increased by never-ending litigation of the same
disputes, and in a larger sense to promote what Lord Coke in the Ferrers Case of 1599
stated to be the goal of all law: rest and quietness. If every judgment of a foreign court
were reviewable on the merits, the plaintiff would be forced back on his/her original
cause of action, rendering immaterial the previously concluded litigation.36 (Emphases
supplied, citations omitted.)
Also relevant herein are the following pronouncements of the Court in Minoru Fujiki v.
Marinay37:
A petition to recognize a foreign judgment declaring a marriage void does not require
relitigation under a Philippine court of the case as if it were a new petition for declaration of
nullity of marriage. Philippine courts cannot presume to know the foreign laws under
which the foreign judgment was rendered. They cannot substitute their judgment on the
status, condition and legal capacity of the foreign citizen who is under the jurisdiction of
another state. Thus, Philippine courts can only recognize the foreign judgment as a
fact according to the rules of evidence.
Section 48(b), Rule 39 of the Rules of Court provides that a foreign judgment or final order
against a person creates a presumptive evidence of a right as between the parties and their
successors in interest by a subsequent title. Moreover, Section 48 of the Rules of Court
states that the judgment or final order may be repelled by evidence of a want of
jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or
fact. Thus, Philippine courts exercise limited review on foreign judgments. Courts are
not allowed to delve into the merits of a foreign judgment. Once a foreign judgment is
admitted and proven in a Philippine court, it can only be repelled on grounds external to
its merits, i.e., want of jurisdiction, want of notice to the party, collusion, fraud, or clear
mistake of law or fact. The rule on limited review embodies the policy of efficiency and
the protection of party expectations, as well as respecting the jurisdiction of other
states. (Emphases supplied, citations omitted.)
As the foregoing jurisprudence had established, recognition and enforcement of a foreign
judgment or final order requires only proof of fact of the said judgment or final order. In an
action in personam, as in the case at bar, the foreign judgment or final order enjoys the
disputable presumption of validity. It is the party attacking the foreign judgment or final
order that is tasked with the burden of overcoming its presumptive validity.38 A foreign
judgment or final order may only be repelled on grounds external to its merits, particularly,
want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or
fact.
The fact of a foreign final order in this case is not disputed. It was duly established by
evidence submitted to the RTC that the U.S. District Court issued an Order on March 13,
1990 in Civil Action No. H-86-440 ordering petitioner, AIFL, and ATHONA, to pay respondent
the sum of US$49,450.00 as sanction for filing a frivolous suit against respondent, in
violation of Rule 11 of the U.S. Federal Rules of Civil Procedure. The said Order became final
when its reinstatement in the Order dated December 31, 1991 of the U.S. District Court was
no longer appealed by petitioner, AIFL, and/or ATHONA.
The Order dated March 13, 1990 of the U.S. District Court in Civil Action No. H-86-440 is
presumptive evidence of the right of respondent to demand from petitioner the payment of
US$49,450.00 even in this jurisdiction. The next question then is whether petitioner was
able to discharge the burden of overcoming the presumptive validity of said Order.
The Court rules in the negative.
In complete disregard of the limited review by Philippine courts of foreign judgments or final
orders, petitioner opposes the enforcement of the Order dated March 13, 1990 of the U.S.
District Court on the very same allegations, arguments, and evidence presented before and
considered by the U.S. District Court when it rendered its verdict imposing the Rule 11
sanction against petitioner. Petitioner attempts to convince the Court that it is necessary to
look into the merits of the Order dated March 13, 1990 because the U.S. District Court
committed clear mistake of law and fact in issuing the same. The Court, however, is not
convinced. A Philippine court will not substitute its own interpretation of any provision of
the law or rules of procedure of another country, nor review and pronounce its own
judgment on the sufficiency of evidence presented before a competent court of another
jurisdiction. Any purported mistake petitioner attributes to the U.S. District Court in the
latters issuance of the Order dated March 13, 1990 would merely constitute an error of
judgment in the exercise of its legitimate jurisdiction, which could have been corrected by a
timely appeal before the U.S. Court of Appeals.
Petitioner cannot insist that the RTC and the Court of Appeals resolve the issue of whether
or not petitioner, AIFL, and ATHONA had reasonable grounds to implead respondent as a
counter-defendant in Civil Action No. H-86-440. Although petitioner submitted such an
issue for resolution by the RTC in its Pre-Trial Brief, the RTC did not issue any pre-trial order
actually adopting the same. In addition, petitioner was also unable to lay the basis, whether
in U.S. or Philippine jurisdiction, for the use of the reasonable grounds standard for
determining a partys liability for or exemption from the sanctions imposed for violations of
Rule 11 of the U.S. Federal Rules of Civil Procedure. Equally baseless is petitioners assertion
that the Rule 11 sanction is contrary to public policy and in effect, puts a premium on the
right to litigate. It bears to stress that the U.S. District Court imposed the Rule 11 sanction
upon petitioner, AIFL, and ATHONA for their frivolous counterclaims against respondent
intended to simply humiliate and embarrass respondent; and not because petitioner, AIFL,
and ATHONA impleaded but lost to respondent.
Contrary to the claims of petitioner, both the RTC and the Court of Appeals carefully
considered the allegations, arguments, and evidence presented by petitioner to repel the
Order dated March 13, 1990 of the U.S. District Court in Civil Action No. H-86-440. Worthy
of reproducing herein are the following portions of the RTC judgment:
[Petitioners] contention that the judgment sought to be enforced herein is violative of its
right to due process and contrary to public policy because the Houston Court relied upon
Exhibit 91 (which is [petitioner BPI Securities] Exh. 1 in this case) and the US Court
disregarded the evidence on record in the Houston Action is unavailing. Whether or not
said Exhibit 91 (petitioners Exh. 1) is inadmissible or is not entitled to any weight is a
question which should have been addressed to the US of Court of Appeals by
[petitioner]. To ask a Philippine court to pass upon the admissibility or weight of Exh. 91
is violative of our public policy not to substitute our judgment for that of a competent
court of another jurisdiction.
[Petitioner] does not deny the fact that the judgment awarding sanctions based on [Rule 11
of the U.S.] Federal Rules of Civil Procedure was elevated to the United States Court of
Appeals for the Fifth Circuit which remanded the case to the District Court precisely to give
[petitioner] a reasonable opportunity to be heard. After remand, the District Court ordered
[petitioner] to file its response to the motion of [respondent] for sanctions and after the
filing of their respective briefs, the District Court reinstated the former judgment.
Certainly, under these circumstances, the claim of violation of due process cannot be
sustained since [petitioner] was given reasonable opportunity to present its side before the
imposition of sanctions.
xxxx
[Petitioner] likewise argued that the US District Court committed a clear mistake of law or
fact and in support thereof presented Exhibits 10 to 18 to establish that the fair market
value of the Houston property in January 1983 was no longer US$800,000.00 by the
admissions against interest of 1488 itself, of Craig who submitted the fraudulent appraisal,
and by the previous owners of the said property and to show that [respondent] Guevara
was either directly involved in the conspiracy against the Houston defendants in submitting
to the latter a fraudulent appraisal of W. Craig (or was at least responsible to the Houston
defendants for the injury that they suffered) and that the Houston defendants had
reasonable basis to implead him as a defendant in the Houston Case on account of his
participation in the conspiracy or his fault of responsibility for the injury suffered by them.
However, none of these documents show that [respondent] had any participation nor
knowledge in the execution, custody or other intervention with respect to the said. Thus,
said Exhibits 10 to 18 are irrelevant and immaterial to the issue of the enforceability
of a foreign judgment. It must be emphasized that the imposition of the sanctions under
[Rule 11 of the U.S.] Federal Rules of Civil Procedure did not flow from the merits of the
civil case in the US District Court but from the lack of even an iota of evidence against
[respondent] Guevara. To quote the US District Court:
THE COURT
xxxx
I am disturbed about that. I dont see any evidence at all in this case, after listening to all of
this evidence, that there ever was a lawsuit that could have been brought against Guevara,
and even after all of the discovery was done, there was still no evidence of a
conspiracy. There is no evidence of any conspiracy to this good day that he could have been,
but there is no proof of it, and thats what we base these lawsuits on. Thats what the Rule
11 is designed to do, to deal with the circumstance.
So, I brought it up to Mr. Guevara because I know the frustration, and irrespective as to
whether or not he brought it up, it would have been my position, my own position as an
officer of this Court to sanction the defendants in this case. That is my opinion, that they are
to be sanctioned because they have brought all of the power that they have in the
Philippines to bear and put pressure on this man so that he would have to come over 10,000
miles to defend himself or to hire lawyers to defend himself against a totally frivolous
claim.39 (Emphases supplied.)
As for petitioners contention that the Fifth Division of the Court of Appeals, in its Decision
dated December 19, 2003, copied verbatim or wholesale from respondents brief, the Court
refers to its ruling in Halley v. Printwell, Inc.,40 thus:
It is noted that the petition for review merely generally alleges that starting from its page 5,
the decision of the RTC copied verbatim the allegations of herein Respondents in its
Memorandum before the said court, as if the Memorandum was the draft of the Decision
of the Regional Trial Court of Pasig, but fails to specify either the portions allegedly lifted
verbatim from the memorandum, or why she regards the decision as copied. The omission
renders the petition for review insufficient to support her contention, considering that the
mere similarity in language or thought between Printwells memorandum and the trial
courts decision did not necessarily justify the conclusion that the RTC simply lifted verbatim
or copied from the memorandum.
It is to be observed in this connection that a trial or appellate judge may occasionally view a
partys memorandum or brief as worthy of due consideration either entirely or partly. When
he does so, the judge may adopt and incorporate in his adjudication the memorandum or
the parts of it he deems suitable, and yet not be guilty of the accusation of lifting or copying
from the memorandum. This is because of the avowed objective of the memorandum to
contribute in the proper illumination and correct determination of the controversy. Nor is
there anything untoward in the congruence of ideas and views about the legal issues
between himself and the party drafting the memorandum. The frequency of similarities in
argumentation, phraseology, expression, and citation of authorities between the decisions
of the courts and the memoranda of the parties, which may be great or small, can be fairly
attributable to the adherence by our courts of law and the legal profession to widely know
nor universally accepted precedents set in earlier judicial actions with identical factual
milieus or posing related judicial dilemmas. (Citations omitted.)
The Court is unmoved by petitioners allegations of denial of due process because of its U.S.
counsels exorbitant fees and negligence. As aptly pointed out by respondent in his
Memorandum:
On the specific claim that petitioner has been denied legal representation in the United
States in view of the exorbitant legal fees of US counsel, petitioner is now estopped from
asserting that the costs of litigation resulted in a denial of due process because it was
petitioner which impleaded Guevara. If petitioner cannot prosecute a case to its final
stages, then it should not have filed a counterclaim against Guevara in the first
place. Moreover, there is no showing that petitioner could not find a less expensive
counsel. Surely, petitioner could have secured the services of another counsel whose fees
were more affordable.41
Moreover, petitioner is bound by the negligence of its counsel. The declarations of the
Court in Gotesco Properties, Inc. v. Moral42 is applicable to petitioner:
The general rule is that a client is bound by the acts, even mistakes, of his counsel in the
realm of procedural technique. The basis is the tenet that an act performed by counsel
within the scope of a general or implied authority is regarded as an act of the
client. While the application of this general rule certainly depends upon the surrounding
circumstances of a given case, there are exceptions recognized by this Court: (1) where
reckless or gross negligence of counsel deprives the client of due process of law; (2) when its
application will result in outright deprivation of the clients liberty or property; or (3) where
the interests of justice so require.
The present case does not fall under the said exceptions. In Amil v. Court of Appeals,the
Court held that to fall within the exceptional circumstance relied upon x x x, it must be
shown that the negligence of counsel must be so gross that the client is deprived of his day
in court. Thus, where a party was given the opportunity to defend [its] interests in due
course, [it] cannot be said to have been denied due process of law, for this opportunity to
be heard is the very essence of due process. To properly claim gross negligence on the part
of the counsel, the petitioner must show that the counsel was guilty of nothing short of a
clear abandonment of the clients cause. (Citations omitted.)
Finally, it is without question that the U.S. District Court, in its Order dated March 13, 1990
in Civil Action No. H-86-440, ordered petitioner, AIFL, and ATHONA to pay respondent
US$49,450.00 as sanction for violating Rule 11 of the U.S. Federal Rules of Civil
Procedure. The Court noticed that throughout its Decision dated September 11, 2000 in
Civil Case No. 92-1445, the RTC variably mentioned the amount of Rule 11 sanction imposed
by the U.S. District Court as US$49,450.00 and US$49,500.00, the latter obviously being a
typographical error. In the dispositive portion, though, the RTC ordered petitioner to pay
respondent US$49,500.00, which the Court hereby corrects motu proprio to US$49,450.00
in conformity with the U.S. District Court Order being enforced.
The Court notes that during the pendency of the instant Petition before this Court,
respondent passed away on August 17, 2007, and is survived and substituted by his heirs,
namely: Ofelia B. Guevara, Ma. Leticia G. Allado, Jose Edgardo B. Guevara, Jose Emmanuel
B. Guevara, and Ma. Joselina G. Gepuela.
WHEREFORE, the instant Petition is hereby DENIED for lack of merit. The Decision dated
December 19, 2003 and Resolution dated February 9, 2005 of the Court Appeals in CA-G.R.
CV No. 69348, affirming the Decision dated September 11, 2000 of the Regional Trial Court
of Makati City, Branch 57 in Civil Case No. 92-1445, is hereby AFFIRMED with
MODIFICATION that petitioner BPI Securities Corporation is ordered to pay respondent
Edgardo V. Guevara the sum of US$49,450.00 or its equivalent in Philippine Peso, with
interest at six percent (6%) per annum from the filing of the case before the trial court on
May 28, 1992 until fully paid.43
SO ORDERED.
Sereno, C.J., (Chairperson), Bersamin, Perez, and Perlas-Bernabe, JJ., concur.