Vous êtes sur la page 1sur 96

A.M. NO.

05-10-20-SC March 10, 2010 power of Congress to repeal, alter or supplement rules concerning
IN RE: EXEMPTION OF THE NATIONAL POWER CORPORATION pleading, practice, and procedure; and that the power to promulgate
FROM PAYMENT OF FILING/ DOCKET FEES these rules is no longer shared by the Court with Congress and the
RESOLUTION Executive, thus:
MENDOZA, J.: Since the payment of legal fees is a vital component of the rules
The National Power Corporation (NPC) seeks clarification from the Court promulgated by this Court concerning pleading, practice and procedure, it
on whether or not it is exempt from the payment of filing fees, appeal cannot be validly annulled, changed or modified by Congress. As one of
bonds and supersedeas bonds. the safeguards of this Court’s institutional independence, the power to
On December 6, 2005, the Court issued A.M. No. 05-10-20-SC, In re: promulgate rules of pleading, practice and procedure is now the Court’s
Exemption of the National Power Corporation from the Payment of exclusive domain. That power is no longer shared by this Court with
Filing/Docket Fees, on the basis of Section 13, Republic Act No. 6395 Congress, much less the Executive.
(An Act Revising the Charter of the National Power Corporation). It reads: Speaking for the Court, then Associate Justice (now Chief Justice)
The Court Resolved, upon the recommendation of the Office of the Court Reynato S. Puno traced the history of the rule-making power of this Court
Administrator, to DECLARE that the National Power Corporation (NPC) is and highlighted its evolution and development in Echegaray v. Secretary
still exempt from the payment of filing fees, appeals bond, and of Justice:
supersedeas bonds. Under the 1935 Constitution, the power of this Court to promulgate rules
On October 27, 2009, however, the Court issued A.M. No. 05-10-20-SC concerning pleading, practice and procedure was granted but it appeared
stating that: to be co-existent with legislative power for it was subject to the power of
The Court Resolved, upon recommendation of the Committee on the Congress to repeal, alter or supplement. Thus, its Section 13, Article VIII
Revision of the Rules of Court, to DENY the request of the National provides:
Power Corporation (NPC) for exemption from the payment of filing fees Sec.13. The Supreme Court shall have the power to promulgate rules
pursuant to Section 10 of Republic Act No. 6395, as amended by Section concerning pleading, practice and procedure in all courts, and the
13 of Presidential Decree No. 938. The request appears to run counter to admission to the practice of law. Said rules shall be uniform for all courts
Section 5(5), Article VIII of the Constitution, in the rule-making power of of the same grade and shall not diminish, increase, or modify substantive
the Supreme Court over the rules on pleading, practice and procedure in rights. The existing laws on pleading, practice, and procedure are hereby
all courts, which includes the sole power to fix the filing fees of cases in repealed as statutes, and are declared Rules of Court, subject to the
courts. power of the Supreme Court to alter and modify the same. The Congress
Hence, the subject letter of NPC for clarification as to its exemption from shall have the power to repeal, alter or supplement the rules concerning
the payment of filing fees and court fees. pleading, practice and procedure, and the admission to the practice of
Section 22 of Rule 141 reads: law in the Philippines.
Sec. 22. Government exempt. – The Republic of the Philippines, its xxx xxx xxx
agencies and instrumentalities are exempt from paying the legal fees [T]he 1973 Constitution reiterated the power of this Court "to promulgate
provided in this rule. Local government units and government-owned or rules concerning pleading, practice, and procedure in all courts, x x x
controlled corporations with or without independent charters are not which, however, may be repealed, altered or supplemented by the
exempt from paying such fees. (emphasis supplied) Batasang Pambansa x x x." More completely, Section 5(2) [sic] 5 of its
Section 70 of Republic Act No. 9136 (Electric Power Industry Reform Act Article X provided:
of 2001), on privatization of NPC assets, expressly states that the NPC xxx xxx xxx
"shall remain as a national government-owned and controlled Sec. 5. The Supreme Court shall have the following powers.
corporation." xxx xxx xxx
Thus, NPC is not exempt from payment of filing fees. (5) Promulgate rules concerning pleading, practice, and procedure in all
The non-exemption of NPC is further fortified by the promulgation on - courts, the admission to the practice of law, and the integration of the Bar,
February 11, 2010 of A.M. No. 08-2-01-0, In re: Petition for Recognition of which, however, may be repealed, altered, or supplemented by the
the Exemption of the Government Service Insurance System (GSIS) from Batasang Pambansa. Such rules shall provide a simplified and
Payment of Legal Fees. In said case, the Court, citing Echegaray v. inexpensive procedure for the speedy disposition of case, shall be
1
Secretary of Justice, stressed that the 1987 Constitution took away the
! 12!
uniform for all courts of the same grade, and shall not diminish, increase, UNICAPITAL, INC., UNICAPITAL REALTY, INC., and JAIME J.
or modify substantive rights. MARTINEZ, Petitioners,
xxx xxx xxx vs.
The 1987 Constitution molded an even stronger and more independent RAFAEL JOSE CONSING, JR., and THE PRESIDING JUDGE OF THE
judiciary. Among others, it enhanced the rule making power of this Court. REGIONAL TRIAL COURT OF PASIG CITY, BRANCH
Its Section 5(5), Article VIII provides: 168, Respondents.
xxx xxx xxx x-----------------------x
Section 5. The Supreme Court shall have the following powers. G.R. No. 192073
xxx xxx xxx RAFAEL JOSE CONSING, JR., Petitioner,
(5) Promulgate rules concerning the protection and enforcement of vs.
constitutional rights, pleading, practice, and procedure in all courts, the HON. MARISSA MACARAIG-GUILLEN, in her capacity as the
admission to the practice of law, the Integrated Bar, and legal assistance Presiding Judge of the Regional Trial Court of Makati City, Branch
to the underprivileged. Such rules shall provide a simplified and 60 and UNICAPITAL, INC., Respondents.
inexpensive procedure for the speedy disposition of cases, shall be DECISION
uniform for all courts of the same grade, and shall not diminish, increase, PERLAS-BERNABE, J.:
or modify substantive rights. Rules of procedure of special courts and Before the Court are consolidated petitions for review on
1
quasi-judicial bodies shall remain effective unless disapproved by the certiorari assailing separate issuances of the Court of Appeals (CA) as
Supreme Court. follows:
The rule making power of this Court was expanded. This Court for the (a) The petitions in G.R. Nos. 175277 and 175285 filed by
first time was given the power to promulgate rules concerning the Unicapital, Inc., (Unicapital), Unicapital Realty, Inc. (URI), and
protection and enforcement of constitutional rights. The Court was also Unicapital Director and Treasurer Jaime J. Martirez
2
granted for the first time the power to disapprove rules of procedure of (Martirez)assail the CA’s Joint Decision dated October 20, 2005
3
special courts and quasi-judicial bodies. But most importantly, the 1987 and Resolution dated October 25, 2006 in CA-G.R. SP Nos.
4
Constitution took away the power of Congress to repeal, alter, or 64019and 64451 which affirmed the Resolution dated
5
supplement rules concerning pleading, practice and procedure. In fine, September 14,1999 and Order dated February 15, 2001 of the
the power to promulgate rules of pleading, practice and procedure is no Regional Trial Court (RTC) of Pasig City, Branch 68 (RTC-Pasig
longer shared by this Court with Congress, more so with the Executive. City) in SCA No. 1759, upholding the denial of their motion to
The separation of powers among the three co-equal branches of our dismiss; and
government has erected an impregnable wall that keeps the power to (b) The petition in G.R. No. 192073 filed by Rafael Jose Consing,
6
promulgate rules of pleading, practice and procedure within the sole Jr. (Consing, Jr.) assails the CA’s Decision dated September 30,
7
province of this Court. The other branches trespass upon this prerogative 2009 and Resolution dated April 28, 2010 inCA-G.R. SP No.
8
if they enact laws or issue orders that effectively repeal, alter or modify 101355 which affirmed the Orders dated July16, 2007 and
9
any of the procedural rules promulgated by this Court. Viewed from this September 4, 2007 of the RTC of Makati City, Branch 60 (RTC-
perspective, the claim of a legislative grant of exemption from the Makati City) in Civil Case No. 99-1418,upholding the denial of his
payment of legal fees under Section 39 of RA 8291 necessarily motion for consolidation.
fails.1avvphi1 The Facts
With the foregoing categorical pronouncement of the Court, it is clear that In 1997, Consing, Jr., an investment banker, and his mother, Cecilia Dela
NPC can no longer invoke Republic Act No. 6395 (NPC Charter), as Cruz (Dela Cruz), obtained an ₱18,000,000.00 loan from
amended by Presidential Decree No. 938, as its basis for exemption from Unicapital,₱12,000,000.00 of which was acquired on July 24, 1997 and
the payment of legal fees. the remaining₱6,000,000.00 on August 1, 1997. The said loan was
10 11
WHEREFORE, it is hereby CLARIFIED that the National Power secured by Promissory Notes and a Real Estate Mortgage over a
Corporation is not exempt from the payment of legal fees. 42,443 square meter-parcel of land located at Imus, Cavite, registered in
SO ORDERED. the name of Dela Cruz as per Transfer Certificate of Title (TCT) No. T-
12
G.R. Nos. 175277 & 175285 September 11, 2013 687599 (subject property). Prior to these transactions, Plus Builders,
Inc. (PBI), a real estate company, was already interested to develop the
! 13!
13
subject property into a residential subdivision. In this regard, PBI that Unicapital and PBI’s representatives were" speaking of him in a
29
entered into a joint venture agreement with Unicapital, through its real manner that was inappropriate and libelous," and that some John Does
estate development arm, URI. In view of the foregoing, the loan and "deliberately engaged in a fraudulent scheme to compromise Consing,
mortgage over the subject property was later on modified into an Option Jr.’s honor, integrity and fortune x x x consisting of falsifying or causing to
14
to Buy Real Property and, after further negotiations, Dela Cruz decided be falsified, or attempting to present as falsified certain transfers of Land
30
to sell the same to Unicapital and PBI. For this purpose, Dela Cruz Titles and Deeds for profit," classifying the foregoing as ultra vires acts
15
appointed Consing, Jr. as her attorney-in-fact. which should warrant sanctions under the corporation law, Revised
31
Eventually, Unicapital, through URI, purchased one-half of the subject Securities Act and related laws. Accordingly, Consing, Jr. prayed that:
property for a consideration of ₱21,221,500.00 (against which Dela (a) he be declared as a mere agent of Dela Cruz, and as such, devoid of
Cruz’s outstanding loan obligations were first offset), while PBI bought the any obligation to Unicapital, URI, and PBI for the transactions entered
16
remaining half for the price of ₱21,047,000.00. In this relation, Dela into concerning the subject property; (b) Unicapital, URI, and PBI be
Cruz caused TCT No. T-687599 to be divided into three separate titles as enjoined from harassing or coercing him, and from speaking about him in
17
follows: (a) TCT No. T-851861 for URI; (b) TCT No. T-851862 for a derogatory fashion; and (c) Unicapital, URI, and PBI pay him actual and
18
PBI; and (c)TCT No. T-51863 which was designated as a road consequential damages in the amount of ₱2,000,000.00, moral damages
19
lot. However, even before URI and PBI were able to have the titles of at least ₱1,000,000.00, exemplary damages of ₱1,000,000.00, all per
transferred to their names, Juanito Tan Teng (Teng) and Po Willie Yu month, reckoned from May 1, 1999 and until the controversy is resolved,
32
(Yu) informed Unicapital that they are the lawful owners of the subject and attorney's fees and costs of suit.
20
property as evidenced by TCT No.T-114708; that they did not sell the For their part, Unicapital, URI, and Martirez (Unicapital, et al.) filed
33
subject property; and that Dela Cruz’s title, i.e., TCT No. T-687599, separate Motions to Dismiss Consing, Jr.’s complaint (Unicapital, et al.’s
21
thereto was a mere forgery. Prompted by Teng and Yu’s assertions, PBI motion to dismiss) on the ground of failure to state a cause of action,
conducted further investigations on the subject property which later considering that: (a) no document was attached against which Consing,
revealed that Dela Cruz's title was actually of dubious origin. Based on Jr. supposedly derived his right and against which his rights may be as
22
this finding, PBI and Unicapital sent separate demand letters to Dela certained; (b) the demands to pay against Consing, Jr. and for him to
Cruz and Consing, Jr., seeking the return of the purchase price they had tender post-dated checks to cover the amount due were well within the
paid for the subject property. rights of Unicapital as an unpaid creditor, as Consing, Jr. had already
From the above-stated incidents stemmed the present controversies as admitted his dealings with them; (c) the utterances purportedly
detailed hereunder. constituting libel were not set out in the complaint; and (d) the laws
The Proceedings Antecedent to G.R. Nos. 175277 & 175285 supposedly violated were not properly identified. Moreover, Unicapital, et
On May 3, 1999, Consing, Jr. filed a complaint, denominated as a al. posited that the RTC-PasigCity did not acquire jurisdiction over the
23
Complex Action for Declaratory Relief and later amended to Complex case given that Consing, Jr. failed to pay the proper amount of docket
24
Action for Injunctive Relief (Consing, Jr.’s complaint) before the RTC- fees. In the same vein, they maintained that the RTC-Pasig City had no
Pasig City against Unicapital, URI, PBI, Martirez, PBI General Manager jurisdiction over their supposed violations of the Corporation Code and
Mariano Martinez (Martinez), Dela Cruz and Does 1-20, docketed as SCA Revised Securities Act, which, discounting its merits, should have been
No. 1759. In his complaint, Consing, Jr. claimed that the incessant supposedly lodged with the Securities and Exchange Commission.
demands/recovery efforts made upon him by Unicapital and PBI to return Finally, they pointed out that Consing, Jr.’s complaint suffers from a
34
to them the purchase price they had paid for the subject property defective verification and, thus, dismissible.
constituted harassment and oppression which severely affected his Similar to Unicapital et al.’s course of action, PBI and its General
25
personal and professional life. He also averred that he was coerced to Manager, Martinez (Unicapital and PBI, et al.), sought the dismissal of
26
commit a violation of Batas Pambansa Blg. 22 as Unicapital and PBI, Consing, Jr.’s complaint on the ground that it does not state a cause of
over threats of filing acase against him, kept on forcing him to issue a action. They also denied having singled out Consing, Jr. because their
post-dated check in the amount sought to be recovered, notwithstanding collection efforts were directed at both Consing, Jr. and Dela Cruz, which
27 35
their knowledge that he had no funds for the same. He further alleged should be deemed as valid and, therefore, should not be restrained.
that Unicapital and URI required him to sign blank deeds of sale and On September 14, 1999, the RTC-Pasig City issued a
36
transfers without cancelling the old one sin violation of the laws on land Resolution denying the above mentioned motions to dismiss, holding
28
registration and real estate development. Likewise, Consing, Jr. added that Consing, Jr.’s complaint sufficiently stated a cause of action for tort
! 14!
44
and damages pursuant to Article 19 of the Civil Code. It ruled that where particulars." Furthermore, it noted that Consing, Jr. does not seek to
there is abusive behavior, a complainant, like Consing, Jr., has the right recover his claims against any particular provision of the corporation code
to seek refuge from the courts. It also noted that the elements of libel in a or the securities act but against the actions of Unicapital and PBI, et al.;
criminal case are not the same as those for a civil action founded on the hence, Consing, Jr.’s complaint was principally one for damages over
provisions of the Civil Code, and therefore, necessitates a different which the RTC has jurisdiction, and, in turn, there lies no misjoinder of
45
treatment. It equally refused to dismiss the action on the ground of non- causes of action.
payment of docket fees, despite Consing, Jr.’s escalated claims for Dissatisfied, only Unicapital, et al. sought reconsideration therefrom but
46
damages therein, as jurisdiction was already vested in it upon the filing of the same was denied by the CA in a Resolution dated October 25,2006.
the original complaint. Moreover, it resolved to apply the liberal Hence, the present petitions for review on certiorari in G.R. Nos.175277
construction rule as regards the subject complaint’s verification and and 175285.
certification, despite its improper wording, considering further that such The Proceedings Antecedent to G.R. No. 192073
47
defect was not raised at the first opportunity. Consequently, it ordered On the other hand, on August 4, 1999, Unicapital filed a complaint for
Unicapital and PBI, et al. to file their Answer and, in addition, to submit" sum of money with damages against Consing, Jr. and Dela Cruz before
any Comment or Reaction within five (5) days from receipt hereof on the the RTC-Makati City, docketed as Civil Case No. 99-1418, seeking to
allegations of Consing, Jr. in his rejoinder of September 9, 1999regarding recover (a) the amount of ₱42,195,397.16, representing the value of their
37
the supposed filing of an identical case in Makati City," i.e., Civil Case indebtedness based on the Promissory Notes (subject promissory notes)
No. 99-1418. Unperturbed, Unicapital and PBI, et al. moved for plus interests; (b) ₱5,000,000.00 as exemplary damages; (c) attorney's
48
reconsideration therefrom which was, however, denied by the RTC-Pasig fees; and (d) costs of suit.
38
City in an Order dated February 15, 2001 for lack of merit. Aggrieved, PBI also filed a complaint for damages and attachment against Consing,
they elevated the denial of their motions to dismiss before the CA via a Jr. and Dela Cruz before the RTC of Manila, Branch 12, docketed as Civil
39
petition for certiorari and prohibition, docketed as CA-G.R. SP Nos. Case No. 99-95381, also predicated on the same set of facts as above
49
64019 and 64451. narrated. In its complaint, PBI prayed that it be allowed to recover the
40
On October 20, 2005, the CA rendered a Joint Decision holding that no following: (a) ₱13,369,641.79, representing the total amount of
grave abuse of discretion was committed by the RTC-Pasig City in installment payments made as actual damages plus interests; (b)
refusing to dismiss Consing, Jr.'s complaint.1âwphi1 At the outset, it ruled ₱200,000.00 as exemplary damages; (c) ₱200,000.00 as moral
50
that while the payment of the prescribed docket fee is a jurisdictional damages; (d) attorney's fees; and (e) costs of suit. Civil Case No. 99-
requirement, its non-payment will not automatically cause the dismissal of 95381 was subsequently consolidated with SCA No. 1759 pending before
51
the case. In this regard, it considered that should there be any deficiency the RTC-Pasig City.
in the payment of such fees, the same shall constitute a lien on the For his part, Consing, Jr. filed a Motion to Dismiss Civil Case No. 99-1418
41 52
judgment award. It also refused to dismiss the complaint for lack of which was, however, denied by the RTC-Makati City in an Order dated
proper verification upon a finding that the copy of the amended complaint November 16, 1999. Thereafter, he filed a Motion for
42 53
submitted to the RTC-Pasig City was properly notarized. Moreover, it Consolidation (motion for consolidation) of Civil Case No. 99-1418 with
upheld the order of the RTC-Pasig City for Unicapital and PBI, et al. to his own initiated SCA No. 1759 pending before the RTC-Pasig City.
54
submit their comment due to the alleged existence of a similar case filed In an Order dated July 16, 2007, the RTC-Makati City dismissed
43
before the RTC-Makati City. Consing, Jr.’s motion for consolidation and, in so doing, ruled that the
Anent the substantive issues of the case, the CA concurred with the RTC- cases sought to be consolidated had no identity of rights or causes of
Pasig City that Consing Jr.'s complaint states a cause of action. It found action and the reliefs sought for by Consing, Jr. from the RTC-Pasig City
that Unicapital and PBI, et al.’s purportedly abusive manner in enforcing will not bar Unicapital from pursuing its money claims against him.
their claims against Consing, Jr. was properly constitutive of a cause of Moreover, the RTC-Makati City noted that Consing, Jr. filed his motion
action as the same, if sufficiently proven, would have subjected him to only as an after thought as it was made after the mediation proceedings
"defamation of his name in business circles, the threats and coercion between him and Unicapital failed. Consing, Jr.'s motion for
55
against him to reimburse the purchase price, fraud and falsification and reconsideration therefrom was denied in an Order dated September 4,
breach of fiduciary obligation." It also found that the fact that Consing Jr.'s 2007. Hence, he filed a petition for certiorari before the CA, docketed as
complaint contains "nebulous" allegations will not warrant its dismissal as CA-G.R. SP No. 101355, ascribing grave abuse of discretion on the part
any vagueness therein can be clarified through a motion for a bill of
! 15!
of the RTC-Makati City in refusing to consolidate Civil Case No. 99-1418 relation, a complaint is said to sufficiently assert a cause of action if,
with SCA No. 1759 in Pasig City. admitting what appears solely on its face to be correct, the plaintiff would
56 63
On September 30, 2009, the CA rendered a Decision sustaining the be entitled to the relief prayed for. Thus, if the allegations furnish
Orders dated July 16, 2007 and September 4, 2007 of the RTC-Makati adequate basis by which the complaint can be maintained, then the same
City which denied Consing, Jr.’s motion for consolidation. It held that should not be dismissed, regardless of the defenses that may be averred
64
consolidation is a matter of sound discretion on the part of the trial court by the defendants. As edified in the case of Pioneer Concrete
65
which could be gleaned from the use of the word "may" in Section 1, Philippines, Inc. v. Todaro, citing Hongkong and Shanghai Banking
66
Rule38 of the Rules of Court. Considering that preliminary steps (such as Corporation, Limited. v. Catalan (HSBC):
mediation) have already been undertaken by the parties in Civil Case The elementary test for failure to state a cause of action is whether the
No.99-1418 pending before the RTC-Makati City, its consolidation with complaint alleges facts which if true would justify the relief demanded.
SCA No. 1759 pending before the RTC-Pasig City "would merely result in Stated otherwise, may the court render a valid judgment upon the facts
complications in the work of the latter court or squander the resources or alleged therein? The inquiry is into the sufficiency, not the veracity of the
57
remedies already utilized in the Makati case." Moreover, it noted that material allegations. If the allegations in the complaint furnish sufficient
the records of the consolidated Pasig and Manila cases, i.e., SCA No. basis on which it can be maintained, it should not be dismissed
1759 and Civil Case No. 99-95381, respectively, had already been regardless of the defense that may be presented by the
67
elevated to the Court, that joint proceedings have been conducted in defendants. (Emphasis supplied)
those cases and that the pre-trial therein had been terminated as early as Stated otherwise, the resolution on this matter should stem from an
October 23, 2007.Therefore, due to these reasons, the consolidation analysis on whether or not the complaint is able to convey a cause of
prayed for would be impracticable and would only cause a procedural action; and not that the complainant has no cause of action. Lest it be
faux pas. Undaunted, Consing, Jr. filed a motion for reconsideration misunderstood, failure to state a cause of action is properly a ground for a
58 68
therefrom but was denied by the CA in a Resolution dated April 28, motion to dismiss under Section 1(g), Rule 16 of the Rules of
2010. Hence, the present petition for review on certiorari in G.R. No. Court(Rules), while the latter is not a ground for dismissal under the same
192073. rule.
The Proceedings Before the Court In this case, the Court finds that Consing, Jr.’s complaint in SCA No.1759
After the filing of the foregoing cases, the parties were required to file properly states a cause of action since the allegations there insufficiently
their respective comments and replies. Further, considering that G.R. bear out a case for damages under Articles 19 and 26 of the Civil Code.
No.192073 (Makati case) involves the same parties and set of facts with Records disclose that Consing, Jr.’s complaint contains allegations which
those in G.R. Nos. 175277 & 175285 (Pasig case), these cases were aim to demonstrate the abusive manner in which Unicapital and PBI, et
59
ordered consolidated per the Court's Resolution dated November 17, al. enforced their demands against him. Among others, the complaint
2010. On March 9, 2011, the Court resolved to give due course to the states that Consing, Jr. "has constantly been harassed and bothered by
instant petitions and required the parties to submit their respective Unicapital and PBI, et al.; x x x besieged by phone calls from them; x x x
60
memoranda. has had constant meetings with them variously, and on a continuing
The Issues Before the Court basis, such that he is unable to attend to his work as an investment
69
The essential issues in these cases are as follows: (a) in G.R. banker." In the same pleading, he also alleged that Unicapital and PBI,
Nos.175277 and 175285, whether or not the CA erred in upholding the et al.’s act of "demanding a postdated check knowing fully well that he
RTC-Pasig City’s denial of Unicapital, et al.’s motion to dismiss; and (b) in does not have the necessary funds to cover the same, nor is he
G.R. No. 192073, whether or not the CA erred in upholding the RTC- expecting to have them is equivalent to asking him to commit a crime
70
Makati City’s denial of Consing, Jr.’s motion for consolidation. under unlawful coercive force." Accordingly, these specific allegations, if
The Court’s Ruling hypothetically admitted, may result into the recovery of damages
A. Propriety of the denial of pursuant to Article 19 of the Civil Code which states that "every person
Unicapital, et al.’s motion to must, in the exercise of his rights and in the performance of his duties, act
dismiss and ancillary issues. with justice, give everyone his due, and observe honesty and good faith."
A cause of action is defined as the act or omission by which a party As explained in the HSBC case:
61
violates a right of another. It is well-settled that the existence of a cause When a right is exercised in a manner which does not conform with the
62
of action is determined by the allegations in the complaint. In this norms enshrined in Article 19 and results in damage to another, a legal
! 16!
76
wrong is thereby committed for which the wrongdoer must beheld possesses - especially considering that he is an investment banker." In
responsible. But a right, though by itself legal because it is recognized or similar regard, the hypothetical admission of these allegations may result
granted by law as such, may nevertheless become the source of some into the recovery of damages pursuant to Article 26, and even
illegality. A person should be protected only when he acts in the Article2219(10), of the Civil Code.
77
legitimate exercise of his right, that is, when he acts with prudence and in Corollary thereto, Unicapital, et al.’s contention that the case should be
good faith; but not when he acts with negligence or abuse. There is an dismissed on the ground that it failed to set out the actual libelous
abuse of right when it is exercised for the only purpose of prejudicing or statements complained about cannot be given credence. These incidents,
injuring another. The exercise of a right must be in accordance with the as well as the specific circumstances surrounding the manner in which
purpose for which it was established, and must not be excessive or Unicapital and PBI, et al. pursued their claims against Consing, Jr. may
71
unduly harsh; there must be no intention to injure another. (Emphasis be better ventilated during trial. It is a standing rule that issues that
supplied) require the contravention of the allegations of the complaint, as well as
Likewise, Consing, Jr.’s complaint states a cause of action for damages the full ventilation, in effect, of the main merits of the case, should not be
78
under Article 26 of the Civil Code which provides that: within the province of a mere motion to dismiss, as in this case. Hence,
Article 26. Every person shall respect the dignity, personality, privacy and as what is only required is that the allegations furnish adequate basis by
peace of mind of his neighbors and other persons. The following and which the complaint can be maintained, the Court – in view of the above-
similar acts, though they may not constitute a criminal offense, shall stated reasons – finds that the RTC-Pasig City’s denial of Unicapital, et
produce a cause of action for damages, prevention and other relief: al.’s motion to dismiss on the ground of failure to state a cause of action
(1) Prying into the privacy of another's residence; was not tainted with grave abuse of discretion which would necessitate
(2) Meddling with or disturbing the private life or family relations the reversal of the CA’s ruling. Verily, for grave abuse of discretion to
of another; exist, the abuse of discretion must be patent and gross so as to amount
(3) Intriguing to cause another to be alienated from his friends; to an evasion of a positive duty or a virtual refusal to perform a duty
79
(4) Vexing or humiliating another on account of his religious enjoined by law, or to act at all in contemplation of law. This the Court
beliefs, lowly station in life, place of birth, physical defect, or other does not perceive in the case at bar.
personal condition. Further, so as to obviate any confusion on the matter, the Court equally
The rationale therefor was explained in the case of Manaloto v. Veloso finds that the causes of action in SCA No. 1759 were not – as Unicapital,
72 73
III, citing Concepcion v. CA, to wit: et al. claim – misjoined even if Consing, Jr. averred that Unicapital and
The philosophy behind Art. 26 underscores the necessity for its inclusion PBI, et al. violated certain provisions of the Corporation Law and the
80
in our civil law. The Code Commission stressed in no uncertain terms that Revised Securities Act.
the human personality must be exalted. The sacredness of human The rule is that a party’s failure to observe the following conditions under
personality is a concomitant consideration of every plan for human Section 5, Rule 2 of the Rules results in a misjoinder of causes of
81
amelioration. The touchstone of every system of law, of the culture and action:
civilization of every country, is how far it dignifies man. If the statutes SEC. 5. Joinder of causes of action . - A party may in one pleading
insufficiently protect a person from being unjustly humiliated, in short, if assert, in the alternative or otherwise, as many causes of action as he
human personality is not exalted - then the laws are indeed defective. may have against an opposing party, subject to the following conditions:
Thus, under this article, the rights of persons are amply protected, and (a) The party joining the causes of action shall comply with the
damages are provided for violations of a person's dignity, personality, rules on joinder of parties;
74
privacy and peace of mind. (b) The joinder shall not include special civil actions governed by
To add, a violation of Article 26 of the Civil Code may also lead to the special rules;
75
payment of moral damages under Article 2219(10) of the Civil Code. (c) Where the causes of action are between the same parties but
Records reveal that Consing, Jr., in his complaint, alleged that "he has pertain to different venues or jurisdictions, the joinder may be
come to discover that Unicapital and PBI, et al. are speaking of him in a allowed in the Regional Trial Court provided one of the causes of
manner that is inappropriate and libelous; and that they have spread their action falls within the jurisdiction of said court and the venue lies
virulent version of events in the business and financial community such therein; and
that he has suffered and continues to suffer injury upon his good name
and reputation which, after all, is the most sacred and valuable wealth he
! 17!
(d) Where the claims in all the causes of action are principally for determined shall constitute as a lien against the judgment as explicitly
89
recovery of money the aggregate amount claimed shall be the provided under Section 2, Rule 141 of the Rules.
test of jurisdiction. (Emphasis supplied) Finally, on the question of whether or not Consing, Jr.'s complaint was
A careful perusal of his complaint discloses that Consing, Jr. did not seek properly verified, suffice it to state that since the copy submitted to the
to hold Unicapital and PBI, et al. liable for any specific violation of the trial court was duly notarized by one Atty. Allan B. Gepty and that it was
Corporation Code or the Revised Securities Act. Rather, he merely only Unicapital, et al.’s copy which lacks the notarization, then there was
90
sought damages for Unicapital and PBI, et al.’s alleged acts of making sufficient compliance with the requirements of the rules on pleadings.
him sign numerous documents and their use of the same against him. In In fine, the Court finds no reversible error on the part of the CA in
this respect, Consing, Jr. actually advances an injunction and damages sustaining the RTC-Pasig City’s denial of Unicapital et al.’s motion to
82
case which properly falls under the jurisdiction of the RTC-Pasig dismiss. As such, the petitions in G.R. Nos. 175277 and 175285 must be
83
City. Therefore, there was no violation of Section 5, Rule 2 of the Rules, denied.
particularly, paragraph (c) thereof. Besides, even on the assumption that B. Propriety of the denial of
there was a misjoinder of causes of action, still, such defect should not Consing, Jr.’s motion for
result in the dismissal of Consing, Jr.’s complaint. Section 6, Rule 2 of the consolidation.
Rules explicitly states that a "misjoinder of causes of action is not a The crux of G.R. No. 192073 is the propriety of the RTC-Makati City’s
ground for dismissal of an action" and that "a misjoined cause of action denial of Consing, Jr.’s motion for the consolidation of the Pasig case,
may, on motion of a party or on the initiative of the court, be severed and i.e., SCA No. 1759, and the Makati case, i.e., Civil Case No. 99-
proceeded with separately." 1418.Records show that the CA upheld the RTC-Makati City’s denial of
Neither should Consing, Jr.’s failure to pay the required docket fees lead the foregoing motion, finding that the consolidation of these cases was
to the dismissal of his complaint.1âwphi1 It has long been settled that merely discretionary on the part of the trial court. It added that it was
while the court acquires jurisdiction over any case only upon the payment "impracticable and would cause a procedural faux pas
91
of the prescribed docket fees, its non-payment at the time of the filing of "if it were to "allow the RTC-Pasig City to preside over the Makati case."
the complaint does not automatically cause the dismissal of the complaint The CA’s ruling is proper.
provided that the fees are paid within a reasonable It is hornbook principle that when or two or more cases involve the same
84
period. Consequently, Unicapital, et al.’s insistence that the stringent parties and affect closely related subject matters, the same must be
rule on non-payment of docket fees enunciated in the case of Manchester consolidated and jointly tried, in order to serve the best interest of the
85
Development Corporation v. CA should be applied in this case cannot parties and to settle the issues between them promptly, thus, resulting in
be sustained in the absence of proof that Consing, Jr. intended to defraud a speedy and inexpensive determination of cases. In addition,
the government by his failure to pay the correct amount of filing fees. As consolidation serves the purpose of avoiding the possibility of conflicting
86
pronounced in the case of Heirs of Bertuldo Hinog v. Hon. Melicor: decisions rendered by the courts in two or more cases, which otherwise
92
Plainly, while the payment of the prescribed docket fee is a jurisdictional could be disposed of in a single suit. The governing rule is Section 1,
requirement, even its Rule 31 of the Rules which provides:
non-payment at the time of filing does not automatically cause the SEC. 1. Consolidation. - When actions involving a common question of
dismissal of the case, as long as the fee is paid within the applicable law or fact are pending before the court, it may order a joint hearing or
prescriptive or reglementary period, more so when the party involved trial of any or all the matters in issue in the actions; it may order all the
demonstrates a willingness to abide by the rules prescribing such actions consolidated; and it may make such orders concerning
payment. proceedings therein as may tend to avoid unnecessary costs or delay.
Thus, when insufficient filing fees were initially paid by the plaintiffs and In the present case, the Court observes that the subject cases, i.e., SCA
there was no intention to defraud the government, the Manchester rule No. 1759 and Civil Case No. 99-1418, although involving the same
87
does not apply. (Emphasis and italics in the original) parties and proceeding from a similar factual milieu, should remain
Indeed, while the Court acknowledges Unicapital, et al.'s apprehension unconsolidated since they proceed from different sources of obligations
that Consing, Jr.'s "metered" claim for damages to the tune of around and, hence, would not yield conflicting dispositions. SCA No. 1759 is an
88
₱2,000,000.00 per month may balloon to a rather huge amount by the injunction and damages case based on the Civil Code provisions on
time that this case is finally disposed of, still, any amount that may by abuse of right and defamation, while Civil Case No. 99-1418 is a
then fall due shall be subject to assessment and any additional fees collection and damages suit based on actionable documents, i.e., the
! 18!
subject promissory notes. In particular, SCA No. 1759 deals with whether obligations to it. In case the vehicles are not sold, Proton would return
or not Unicapital and BPI, et al, abused the manner in which they them to BNP, together with all the accompanying documents of title.
demanded payment from Consing, Jr., while Civil Case No. 99-1418 Allegedly, Proton failed to deliver the proceeds of the sale and return the
deals with whether or not Unicapital may demand payment from Consing, unsold motor vehicles.
Jr. based on the subject promissory notes. Clearly, a resolution in one Pursuant to the corporate guarantee, BNP demanded from Automotive,
case would have no practical effect as the core issues and reliefs sought Asea and Autocorp the payment of the amount of
6
in each case are separate and distinct from the other. US$1,544,984.40 representing Proton's total outstanding obligations.
Likewise, as the CA correctly pointed out, the RTC-Makati City could not These guarantors refused to pay, however. Hence, BNP filed on
have been failured in retaining Civil Case No. 99-1418 in its dockets since September 7, 1998 before the Makati Regional Trial Court (RTC) a
pre-trial procedures have already been undertaken therein and, thus, its complaint against petitioners praying that they be ordered to pay (1)
consolidation with SCA No. 1759 pending before the RTC-Pasig City US$1,544,984.40 plus accrued interest and other related charges thereon
would merely result in complications on the part of the latter court or subsequent to August 15, 1998 until fully paid and (2) an amount
squander the resources or remedies already utilized in Civil Case No. 99- equivalent to 5% of all sums due from petitioners as attorney's fees.
93
1418. In this light, aside from the perceived improbability of having The Makati RTC Clerk of Court assessed the docket fees which BNP paid
7 8
conflicting decisions, the consolidation of SCA No. 1759 and Civil Case at ₱352,116.30 which was computed as follows:
No. 99-1418 would, contrary to its objective, only delay the proceedings
First Cause of Action $ 844,674.07
and entail unnecessary costs.
All told, the Court finds the consolidation of SCA No. 1759 and Civil Case Second Cause of Action 171,120.53
No. 99-1418 to be improper, impelling the affirmance of the CA’s ruling.
Consequently, the petition in G.R. No. 192073 must also be denied. Third Cause of Action 529,189.80
WHEREFORE, the petitions in G.R. Nos. 175277, 175285 and 192073
are DENIED. Accordingly, the Court of Appeals’ Joint Decision dated $1,544,984.40
October 20, 2005 and Resolution dated October 25, 2006 in CA-G.R. SP
Nos. 64019 and 64451 and the Decision dated September 30, 2009 and 5% as Attorney's Fees $ 77,249.22
Resolution dated April 28, 2010 in CA-G.R. No. 101355 are hereby TOTAL ………….. $1,622,233.62
AFFIRMED.
G.R. No. 151242 June 15, 2005 Conversion rate to peso x 43_
PROTON PILIPINAS CORPORATION, AUTOMOTIVE PHILIPPINES,
ASEA ONE CORPORATION and AUTOCORP, Petitioners, TOTAL ………….. ₱69,756,000.00
vs. (roundoff)
1
BANQUE NATIONALE DE PARIS, Respondent. Computation based on Rule 141:
DECISION
CARPIO MORALES, J.:
COURT JDF
It appears that sometime in 1995, petitioner Proton Pilipinas Corporation
(Proton) availed of the credit facilities of herein respondent, Banque ₱ 69,756,000.00 ₱ 69.606.000.00
Nationale de Paris (BNP). To guarantee the payment of its obligation, its
co-petitioners Automotive Corporation Philippines (Automotive), Asea - 150,000.00 x .003
One Corporation (Asea) and Autocorp Group (Autocorp) executed a
2 69,606,000.00 208,818.00
corporate guarantee to the extent of US$2,000,000.00. BNP and Proton
subsequently entered into three trust receipt agreements dated June 4,
3 4
1996, January 14, 1997, and April 24, 1997.
5 x .002 + 450.00
Under the terms of the trust receipt agreements, Proton would receive 139,212.00 ₱ 209,268.00
imported passenger motor vehicles and hold them in trust for BNP.
Proton would be free to sell the vehicles subject to the condition that it + 150.00
would deliver the proceeds of the sale to BNP, to be applied to its
! 19!
₱ 139,362.00 As to the second ground relied upon by the defendants, in that a review
of all annexes to the complaint of the plaintiff reveals that there is not a
LEGAL : ₱139,362.00 single formal demand letter for defendants to fulfill the terms and
conditions of the three (3) trust agreements.
+ 209,268.00 In this regard, the court cannot sustain the submission of defendant. As
correctly pointed out by the plaintiff, failure to make a formal demand for
₱348,630.00 x 1% = ₱3,486.30 the debtor to pay the plaintiff is not among the legal grounds for the
dismissal of the case. Anyway, in the appreciation of the court, this is
₱ 139,362.00 simply evidentiary.
+ 209,268.00 xxx
WHEREFORE, for lack of merit, the Motion to Dismiss interposed by the
13
3,486.00 defendants is hereby DENIED. (Underscoring supplied)
14
Petitioners filed a motion for reconsideration of the denial of their Motion
15
₱ 352,116.30 - Total fees paid by the plaintiff to Dismiss, but it was denied by the trial court by Order of October 3,
2000.
To the complaint, the defendants-herein petitioners filed on October 12, 16
9 Petitioners thereupon brought the case on certiorari and mandamus to
1998 a Motion to Dismiss on the ground that BNP failed to pay the 17
the Court of Appeals which, by Decision of July 25, 2001, denied it in
correct docket fees to thus prevent the trial court from acquiring
10 this wise:
jurisdiction over the case. As additional ground, petitioners raised
… Section 7(a) of Rule 141 of the Rules of Court excludes interest
prematurity of the complaint, BNP not having priorly sent any demand
11 accruing from the principal amount being claimed in the pleading in the
letter.
12 computation of the prescribed filing fees. The complaint was submitted for
By Order of August 3, 1999, Branch 148 of the Makati RTC denied
the computation of the filing fee to the Office of the Clerk of Court of the
petitioners' Motion to Dismiss, viz:
Regional Trial Court of Makati City which made an assessment that
Resolving the first ground relied upon by the defendant, this court
respondent paid accordingly. What the Office of the Clerk of Court did
believes and so hold that the docket fees were properly paid. It is the
and the ruling of the respondent Judge find support in the decisions of the
Office of the Clerk of Court of this station that computes the correct
Supreme Court in Ng Soon vs. Alday and Tacay vs. RTC of
docket fees, and it is their duty to assess the docket fees correctly, which
Tagum, Davao del Norte. In the latter case, the Supreme Court explicitly
they did.1avvphi1.zw+
ruled that "where the action is purely for recovery of money or damages,
Even granting arguendo that the docket fees were not properly paid, the
the docket fees are assessed on the basis of the aggregate amount
court cannot just dismiss the case. The Court has not yet ordered (and it
claimed, exclusive only of interests and costs."
will not in this case) to pay the correct docket fees, thus the Motion to
Assuming arguendo that the correct filing fees was not made, the rule is
dismiss is premature, aside from being without any legal basis.
that the court may allow a reasonable time for the payment of the
As held in the case of National Steel Corporation vs. CA, G.R. No.
prescribed fees, or the balance thereof, and upon such payment, the
123215, February 2, 1999, the Supreme Court said:
defect is cured and the court may properly take cognizance of the action
xxx
unless in the meantime prescription has set in and consequently barred
Although the payment of the proper docket fees is a jurisdictional
the right of action. Here respondent Judge did not make any finding, and
requirement, the trial court may allow the plaintiff in an action to pay the
rightly so, that the filing fee paid by private respondent was insufficient.
same within a reasonable time within the expiration of applicable
On the issue of the correct dollar-peso rate of exchange, the Office of the
prescription or reglementary period. If the plaintiff fails to comply with this
Clerk of Court of the RTC of Makati pegged it at ₱ 43.21 to US$1. In the
requirement, the defendant should timely raise the issue of jurisdiction or
absence of any office guide of the rate of exchange which said court
else he would be considered in estoppel. In the latter case, the balance
functionary was duty bound to follow, the rate he applied is presumptively
between appropriate docket fees and the amount actually paid by the
correct.
plaintiff will be considered a lien or (sic) any award he may obtain in his
Respondent Judge correctly ruled that the matter of demand letter is
favor.
evidentiary and does not form part of the required allegations in a

! 20!
complaint. Section 1, Rule 8 of the 1997 Rules of Civil Procedure CIRCUIT TRIAL COURTS, SHARI'A DISTRICT COURTS;AND THE
pertinently provides: INTEGRATED BAR OF THE PHILIPPINES
"Every pleading shall contain in a methodical and logical form, a plain, SUBJECT: ALL COMPLAINTS MUST SPECIFY AMOUNT OF
concise and direct statement of the ultimate facts on which the party DAMAGES SOUGHT NOT ONLY IN THE BODY OF THE
pleading relies for his claim or defense, as the case may be, omitted the PLEADING, BUT ALSO IN THE PRAYER IN ORDER TO BE
statement of mere evidentiary facts." ACCEPTED AND ADMITTED FOR FILING. THE AMOUNT OF
Judging from the allegations of the complaint particularly paragraphs 6, DAMAGES SO SPECIFIED IN THE COMPLAINT SHALL BE THE BASIS
12, 18, and 23 where allegations of imputed demands were made upon FOR ASSESSING THE AMOUNT OF THE FILING FEES.
the defendants to fulfill their respective obligations, annexing the demand In Manchester Development Corporation vs. Court of Appeals, No. L-
letters for the purpose of putting up a sufficient cause of action is not 75919, May 7, 1987, 149 SCRA 562, this Court condemned the practice
required. of counsel who in filing the original complaint omitted from the prayer any
In fine, respondent Judge committed no grave abuse of discretion specification of the amount of damages although the amount of over P78
amounting to lack or excess of jurisdiction to warrant certiorari and million is alleged in the body of the complaint. This Court observed that
18
mandamus. (Underscoring supplied) "(T)his is clearly intended for no other purpose than to evade the payment
19
Their Motion for Reconsideration having been denied by the Court of of the correct filing fees if not to mislead the docket clerk, in the
20
Appeals, petitioners filed the present petition for review on assessment of the filing fee. This fraudulent practice was compounded
21
certiorari and pray for the following reliefs: when, even as this Court had taken cognizance of the anomaly and
WHEREFORE, in view of all the foregoing, it is most respectfully prayed ordered an investigation, petitioner through another counsel filed an
of this Honorable Court to grant the instant petition by REVERSING and amended complaint, deleting all mention of the amount of damages being
SETTING ASIDE the questioned Decision of July 25, 2001 and the asked for in the body of the complaint. xxx"
Resolution of December 18, 2001 for being contrary to law, to For the guidance of all concerned, the WARNING given by the court in
Administrative Circular No. 11-94 and Circular No. 7 and instead direct the afore-cited case is reproduced hereunder:
the court a quo to require Private Respondent Banque to pay the correct "The Court serves warning that it will take drastic action upon a repetition
docket fee pursuant to the correct exchange rate of the dollar to the peso of this unethical practice.
on September 7, 1998 and to quantify its claims for interests on the To put a stop to this irregularity, henceforth all complaints, petitions,
principal obligations in the first, second and third causes of actions in its answers and other similar pleadings should specify the amount of
22
Complaint in Civil Case No. 98-2180. (Underscoring supplied) damages being prayed for not only in the body of the pleading but
23
Citing Administrative Circular No. 11-94, petitioners argue that BNP also in the prayer, and said damages shall be considered in the
failed to pay the correct docket fees as the said circular provides that in assessment of the filing fees in any case. Any pleading that fails to
the assessment thereof, interest claimed should be included. There being comply with this requirement shall not be accepted nor admitted, or
an underpayment of the docket fees, petitioners conclude, the trial court shall otherwise be expunged from the record.
did not acquire jurisdiction over the case. The Court acquires jurisdiction over any case only upon the payment of
Additionally, petitioners point out that the clerk of court, in converting the prescribed docket fee. An amendment of the complaint or similar
BNP's claims from US dollars to Philippine pesos, applied the wrong pleading will not thereby vest jurisdiction in the Court, much less the
exchange rate of US $1 = ₱43.00, the exchange rate on September 7, payment of the docket fee based on the amount sought in the amended
1998 when the complaint was filed having been pegged at US $1 = pleading. The ruling in the Magaspi case (115 SCRA 193) in so far as it is
₱43.21. Thus, by petitioners' computation, BNP's claim as of August 15, inconsistent with this pronouncement is overturned and reversed."
24
1998 was actually ₱70,096,714.72, not ₱69,756,045.66. Strict compliance with this Circular is hereby enjoined.
Furthermore, petitioners submit that pursuant to Supreme Court Circular Let this be circularized to all the courts hereinabove named and to the
25
No. 7, the complaint should have been dismissed for failure to specify President and Board of Governors of the Integrated Bar of the
the amount of interest in the prayer. Philippines, which is hereby directed to disseminate this Circular to all its
Circular No. 7 reads: members.
TO: JUDGES AND CLERKS OF COURT OF THE COURT OF TAX March 24, 1988.
APPEALS, REGIONAL TRIAL COURTS, METROPOLITAN TRIAL (Sgd). CLAUDIO TEEHANKEE
COURTS IN CITIES, MUNICIPAL TRIAL COURTS, MUNICIPAL Chief Justice
! 21!
(Emphasis and underscoring supplied) it made an overpayment.
On the other hand, respondent maintains that it had paid the filing fee When Tacay was decided in 1989, the pertinent rule applicable was
which was assessed by the clerk of court, and that there was no violation Section 5 (a) of Rule 141 which provided for the following:
of Supreme Court Circular No. 7 because the amount of damages was SEC. 5. Clerks of Regional Trial Courts. - (a) For filing an action or
clearly specified in the prayer, to wit: proceeding, or a permissive counter-claim or cross-claim not arising out
2. On the FIRST CAUSE OF ACTION - of the same transaction subject of the complaint, a third-party complaint
(c) Defendant PROTON be ordered to pay the sum of (i) US DOLLARS and a complaint in intervention and for all services in the same, if the
EIGHT HUNDRED FORTY FOUR THOUSAND SIX HUNDRED sum claimed, exclusive of interest, of the value of the property in
SEVENTY FOUR AND SEVEN CENTS (US$ 844,674.07), plus accrued litigation, or the value of the estate, is:
interests and other related charges thereon subsequent to August 15,
Less than ₱ 5,000.00 ₱
1998, until fully paid; and (ii) an amount equivalent to 5% of all sums due 1.
….……………………………… 32.00
from said Defendant, as and for attorney's fees;
3. On the SECOND CAUSE OF ACTION - ₱ 5,000.00 or more but less than ₱ 10,000.00
(d) Defendant PROTON be ordered to pay the sum of (i) US DOLLARS 2. 48.00
…………
ONE HUNDRED TWENTY AND FIFTY THREE CENTS
(US$171,120.53), plus accrued interests and other related charges ₱ 10,000.00 or more but less than ₱ 20,000.00
3. 64.00
thereon subsequent to August 15, 1998 until fully paid; and (ii) an amount ………..
equivalent to 5% of all sums due from said Defendant, as and for
attorney's fees; ₱ 20,000.00 or more but less than ₱ 40,000.00
4. 80.00
4. On the THIRD CAUSE OF ACTION - ………..
(e) Defendant PROTON be ordered to pay the sum of (i) US DOLLARS
FIVE HUNDRED TWENTY NINE THOUSAND ONE HUNDRED EIGHTY ₱ 40,000.00 or more but less than ₱ 60,000.00
5. 120.00
NINE AND EIGHTY CENTS (US$529,189.80), plus accrued interests and ………..
other related charges thereon subsequent to August 15, 1998 until fully ₱ 60,000.00 or more but less than ₱ 80,000.00
paid; and (ii) an amount equivalent to 5% or all sums due from said 6. 160.00
……….
Defendant, as and for attorney's fees;
5. On ALL THE CAUSES OF ACTION - ₱ 80,000.00 or more but less than ₱ 150,000.00
Defendants AUTOMOTIVE CORPORATION PHILIPPINES, ASEA ONE 7. 200.00
………
CORPORATION and AUTOCORP GROUP to be ordered to pay Plaintiff
BNP the aggregate sum of (i) US DOLLARS ONE MILLION FIVE And for each ₱ 1,000.00 in excess of ₱
8. 4.00
HUNDRED FORTY FOUR THOUSAND NINE HUNDRED EIGHTY 150,000.00 .....
FOUR AND FORTY CENTS (US$1,544,984.40) (First through Third
Causes of Action), plus accrued interest and other related charges When the value of the case cannot be estimated
9. 400.00
thereon subsequent to August 15, 1998 until fully paid; and (ii) an amount ………
equivalent to 5% of all sums due from said Defendants, as and for
26 10. When the case does not concern property
attorney's fees.
(naturalization, adoption, legal separation, etc.)
Moreover, respondent posits that the amount of US$1,544,984.40
..……... 64.00
represents not only the principal but also interest and other related
charges which had accrued as of August 15, 1998. Respondent goes 11. In forcible entry and illegal detainer cases
even further by suggesting that in light of Tacay v. Regional Trial Court of appealed from inferior courts
27
Tagum, Davao del Norte where the Supreme Court held, …………………………………. 40.00
Where the action is purely for the recovery of money or damages, the
docket fees are assessed on the basis of the aggregate amount If the case concerns real estate, the assessed value thereof shall be
28
claimed, exclusive only of interests and costs. (Emphasis and considered in computing the fees.
underscoring supplied),
! 22!
In case the value of the property or estate or the sum claim is less or 200,000.00 …
more in accordance with the appraisal of the court, the difference of fees
shall be refunded or paid as the case may be. (Emphasis and underscoring supplied)
When the complaint in this case was filed in 1998, however, as correctly The clerk of court should thus have assessed the filing fee by taking into
pointed out by petitioners, Rule 141 had been amended by Administrative consideration "the total sum claimed, inclusive of interest, damages of
29
Circular No. 11-94 which provides: whatever kind, attorney's fees, litigation expenses, and costs, or the
BY RESOLUTION OF THE COURT, DATED JUNE 28, 1994, stated value of the property in litigation." Respondent's and the Court of
PURSUANT TO SECTION 5 (5) OF ARTICLE VIII OF THE Appeals' reliance then on Tacay was not in order.
CONSTITUTION, RULE 141, SECTION 7 (a) AND (d), and SECTION 8 Neither was, for the same reason, the Court of Appeals' reliance on
30
(a) and (b) OF THE RULES OF COURT ARE HEREBY AMENDED TO the 1989 case of Ng Soon v. Alday, where this Court held:
READ AS FOLLOWS: …The failure to state the rate of interest demanded was not fatal not
RULE 141 only because it is the Courts which ultimately fix the same, but
LEGAL FEES also because Rule 141, Section 5(a) of the Rules of Court, itemizing
xxx the filing fees, speaks of "the sum claimed, exclusive of
Sec. 7. Clerks of Regional Trial Courts interest." This clearly implies that the specification of the interest
(a) For filing an action or a permissive counterclaim or money claim rate is not that indispensable.
against an estate not based on judgment, or for filing with leave of court a Factually, therefore, not everything was left to "guesswork" as respondent
third-party, fourth-party, etc. complaint, or a complaint in intervention, and Judge has opined. The sums claimed were ascertainable, sufficient
for all clerical services in the same, if the total sum claimed, inclusive enough to allow a computation pursuant to Rule 141, section 5(a).
of interest, damages of whatever kind, attorney's fees, litigation Furthermore, contrary to the position taken by respondent Judge, the
expenses, and costs, or the stated value of the property in litigation, amounts claimed need not be initially stated with mathematical
is: precision. The same Rule 141, section 5(a) (3rd paragraph), allows
31
an appraisal "more or less." Thus:
Not more than ₱ 100,000.00 ₱ "In case the value of the property or estate or the sum claimed is less or
1.
…………………………… 400.00 more in accordance with the appraisal of the court, the difference of fee
₱ 100,000.00, or more but not more than ₱ shall be refunded or paid as the case may be."
2. 600.00 In other words, a final determination is still to be made by the Court, and
150,000.00 …
the fees ultimately found to be payable will either be additionally paid by
For each ₱ 1,000.00 in excess of ₱ 150,000.00 the party concerned or refunded to him, as the case may be. The above
3. 5.00 provision clearly allows an initial payment of the filing fees corresponding
………….
to the estimated amount of the claim subject to adjustment as to what
xxx later may be proved.
Sec. 8. Clerks of Metropolitan and Municipal Trial Courts ". . . there is merit in petitioner's claim that the third paragraph of Rule
(a) For each civil action or proceeding, where the value 141, Section 5(a) clearly contemplates a situation where an amount is
of the subject matter involved, or the amount of the alleged or claimed in the complaint but is less or more than what is later
demand, inclusive of interest, damages or whatever proved. If what is proved is less than what was claimed, then a refund will
kind, attorney's fees, litigation expenses, and costs, be made; if more, additional fees will be exacted. Otherwise stated, what
is: is subject to adjustment is the difference in the fee and not the whole
Not more than ₱ 20,000.00 ₱ amount" (Pilipinas Shell Petroleum Corp., et als., vs. Court of Appeals, et
1. 32
als., G.R. No. 76119, April 10, 1989). (Emphasis and underscoring
…………………………… ... 120.00
supplied)
More than ₱ 20,000.00 but not more than ₱ Respecting the Court of Appeals' conclusion that the clerk of court did not
2. 400.00
100,000.00 …. err when he applied the exchange rate of US $1 = ₱43.00 "[i]n the
absence of any office guide of the rate of exchange which said court
3. More than ₱ 100,000.00 but not more than ₱ 850.00 functionary was duty bound to follow,[hence,] the rate he applied is
! 23!
presumptively correct," the same does not lie. The presumption of amount is found due, he must require the private respondent to pay the
regularity of the clerk of court's application of the exchange rate is not same.
33 34
conclusive. It is disputable. As such, the presumption may be Thus, the Court rules as follows:
35
overturned by the requisite rebutting evidence. In the case at bar, 1. It is not simply the filing of the complaint or appropriate
36
petitioners have adequately proven with documentary evidence that the initiatory pleading, but the payment of the prescribed docket fee,
exchange rate when the complaint was filed on September 7, 1998 was that vests a trial court with jurisdiction over the subject-matter or
US $1 = ₱43.21. nature of the action. Where the filing of the initiatory pleading is
In fine, the docket fees paid by respondent were insufficient. not accompanied by payment of the docket fee, the court may
With respect to petitioner's argument that the trial court did not acquire allow payment of the fee within a reasonable time but in no case
jurisdiction over the case in light of the insufficient docket fees, the same beyond the applicable prescriptive or reglementary period.
does not lie. 2. The same rule applies to permissive counterclaims, third-party
37
True, in Manchester Development Corporation v. Court of Appeals, this claims and similar pleadings, which shall not be considered filed
Court held that the court acquires jurisdiction over any case only upon the until and unless the filing fee prescribed therefor is paid. The
38
payment of the prescribed docket fees, hence, it concluded that the trial court may also allow payment of said fee within a reasonable
court did not acquire jurisdiction over the case. time but also in no case beyond its applicable prescriptive or
It bears emphasis, however, that the ruling in Manchester was clarified reglementary period.
39
in Sun Insurance Office, Ltd. (SIOL) v. Asuncion when this Court held 3. Where the trial court acquires jurisdiction over a claim by the
that in the former there was clearly an effort to defraud the government in filing of the appropriate pleading and payment of the prescribed
avoiding to pay the correct docket fees, whereas in the latter the plaintiff filing fee but, subsequently, the judgment awards a claim not
demonstrated his willingness to abide by paying the additional fees as specified in the pleading, or if specified the same has been left for
required. determination by the court, the additional filing fee therefor shall
The principle in Manchester could very well be applied in the present constitute a lien on the judgment. It shall be the responsibility of
case. The pattern and the intent to defraud the government of the docket the Clerk of Court or his duly authorized deputy to enforce said
40
fee due it is obvious not only in the filing of the original complaint but also lien and assess and collect the additional fee. (Emphasis and
in the filing of the second amended complaint. underscoring supplied)
However, in Manchester, petitioner did not pay any additional docket fee The ruling in Sun Insurance Office was echoed in the 2005 case of Heirs
41
until the case was decided by this Court on May 7, of Bertuldo Hinog v. Hon. Achilles Melicor:
1987. Thus, in Manchester, due to the fraud committed on the Plainly, while the payment of the prescribed docket fee is a jurisdictional
government, this Court held that the court a quo did not acquire requirement, even its non-payment at the time of filing does not
jurisdiction over the case and that the amended complaint could not automatically cause the dismissal of the case, as long as the fee is paid
have been admitted inasmuch as the original complaint was null and within the applicable prescriptive or reglementary period, more so when
void. the party involved demonstrates a willingness to abide by the rules
In the present case, a more liberal interpretation of the rules is prescribing such payment. Thus, when insufficient filing fees were
called for considering that, unlikeManchester, private respondent initially paid by the plaintiffs and there was no intention to defraud
demonstrated his willingness to abide by the rules by paying the the government, the Manchester rule does not apply. (Emphasis and
additional docket fees as required. The promulgation of the decision underscoring supplied; citations omitted)
in Manchester must have had that sobering influence on private In the case at bar, respondent merely relied on the assessment made by
respondent who thus paid the additional docket fee as ordered by the the clerk of court which turned out to be incorrect. Under the
respondent court. It triggered his change of stance by manifesting his circumstances, the clerk of court has the responsibility of reassessing
willingness to pay such additional docket fee as may be ordered. what respondent must pay within the prescriptive period, failing which the
Nevertheless, petitioners contend that the docket fee that was paid is still complaint merits dismissal.
insufficient considering the total amount of the claim. This is a matter Parenthetically, in the complaint, respondent prayed for "accrued
which the clerk of court of the lower court and/or his duly authorized interest… subsequent to August 15, 1998 until fully paid." The complaint
docket clerk or clerk in charge should determine and, thereafter, if any having been filed on September 7, 1998, respondent's claim includes the
interest from August 16, 1998 until such date of filing.
! 24!
Respondent did not, however, pay the filing fee corresponding to its claim Makati City is ordered to reassess and determine the docket fees that
for interest from August 16, 1998 until the filing of the complaint on should be paid by respondent, BNP, in accordance with the Decision of
September 7, 1998. As priorly discussed, this is required under Rule 141, this Court, and direct respondent to pay the same within fifteen (15) days,
as amended by Administrative Circular No. 11-94, which was the rule provided the applicable prescriptive or reglementary period has not yet
applicable at the time. Thus, as the complaint currently stands, expired. Thereafter, the trial court is ordered to proceed with the case
respondent cannot claim the interest from August 16, 1998 until with utmost dispatch.
September 7, 1998, unless respondent is allowed by motion to amend its SO ORDERED.
complaint within a reasonable time and specify the precise amount of A.M. No. 08-11-7-SC August 28, 2009
1
interest petitioners owe from August 16, 1998 to September 7, RE: REQUEST OF NATIONAL COMMITTEE ON LEGAL AID TO
42
1998 and pay the corresponding docket fee therefor. EXEMPT LEGAL AID CLIENTS FROM PAYING FILING, DOCKET AND
With respect to the interest accruing after the filing of the complaint, the OTHER FEES.
same can only be determined after a final judgment has been handed RESOLUTION
down. Respondent cannot thus be made to pay the corresponding docket CORONA, J.:
fee therefor. Pursuant, however, to Section 2, Rule 141, as amended by On September 23, 2008 the Misamis Oriental Chapter of the Integrated
Administrative Circular No. 11-94, respondent should be made to pay Bar of the Philippines (IBP) promulgated Resolution No. 24, series of
2
additional fees which shall constitute a lien in the event the trial court 2008. The resolution requested the IBP’s National Committee on Legal
3
adjudges that it is entitled to interest accruing after the filing of the Aid (NCLA) to ask for the exemption from the payment of filing, docket
complaint. and other fees of clients of the legal aid offices in the various IBP
Sec. 2. Fees as lien. - Where the court in its final judgment awards a chapters. Resolution No. 24, series of 2008 provided:
claim not alleged, or a relief different or more than that claimed in the RESOLUTION NO. 24, SERIES OF 2008
pleading, the party concerned shall pay the additional fees which shall RESOLUTION OF THE IBP–MISAMIS ORIENTAL CHAPTER FOR THE
constitute a lien on the judgment in satisfaction of said lien. The clerk of IBP NATIONAL LEGAL AID OFFICE TO REQUEST THE COURTS
court shall assess and collect the corresponding fees. AND OTHER QUASI-JUDICIAL BODIES, THE PHILIPPINE
43
In Ayala Corporation v. Madayag, in interpreting the third rule laid down MEDIATION CENTER AND PROSECUTOR’S OFFICES TO EXEMPT
in Sun Insurance regarding awards of claims not specified in the LEGAL AID CLIENTS FROM PAYING FILING, DOCKET AND OTHER
pleading, this Court held that the same refers only to damages FEES INCIDENTAL TO THE FILING AND LITIGATION OF ACTIONS,
arising after the filing of the complaint or similar pleading as to AS ORIGINAL PROCEEDINGS OR ON APPEAL.
which the additional filing fee therefor shall constitute a lien on the WHEREAS, Section 1, Article I of the Guidelines Governing the
judgment. Establishment and Operation of Legal Aid Offices in All Chapters of the
… The amount of any claim for damages, therefore, arising on or before Integrated Bar of the Philippines (otherwise known as ["]Guideline[s] on
the filing of the complaint or any pleading should be specified. While it is Legal Aid["]) provides: Legal aid is not a matter of charity. It is a means
true that the determination of certain damages as exemplary or corrective for the correction of social imbalances that may often lead to injustice, for
damages is left to the sound discretion of the court, it is the duty of the which reason, it is a public responsibility of the Bar. The spirit of public
parties claiming such damages to specify the amount sought on the basis service should therefore unde[r]ly all legal aid offices. The same should
of which the court may make a proper determination, and for the proper be so administered as to give maximum possible assistance to indigent
assessment of the appropriate docket fees. The exception and deserving members of the community in all cases, matters and
contemplated as to claims not specified or to claims although situations in which legal aid may be necessary to forestall injustice.
specified are left for determination of the court is limited only to any WHEREAS, Section 2 of the same provides: In order to attain the
damages that may arise after the filing of the complaint or similar objectives of legal aid, legal aid office should be as close as possible to
pleading for then it will not be possible for the claimant to specify those who are in need thereof – the masses. Hence, every chapter of the
44
nor speculate as to the amount thereof. (Emphasis and underscoring IBP must establish and operate an adequate legal aid office.
supplied; citation omitted)1avvphi1.zw+ WHEREAS, the Legal Aid Office of the IBP–Misamis Oriental Chapter
WHEREFORE, the petition is GRANTED in part. The July 25, 2001 has long been operational, providing free legal services to numerous
Decision and the December 18, 2001 Resolution of the Court Appeals are indigent clients, through the chapter’s members who render volunteer
hereby MODIFIED. The Clerk of Court of the Regional Trial Court of services in the spirit of public service;
! 25!
WHEREAS, the courts, quasi-judicial bodies, the various mediation RESOLVED FINALLY to move the IBP Board of Governors and National
centers and prosecutor’s offices are collecting fees, be they filing, docket, Officers to make the necessary representations with the National
motion, mediation or other fees in cases, be they original proceedings or Legislature and its members to effect the filing of a bill before the House
on appeal; of Representatives and the Senate granting exemption to IBP Legal Aid
WHEREAS, IBP Legal Aid clients are qualified under the same indigency clients from the payment of docket, filing and or other fees in cases
and merit tests used by the Public Attorney’s Office (PAO), and would before the courts, quasi-judicial agencies and prosecutor’s offices and the
have qualified for PAO assistance, but for reasons other than indigency, mediation centers.
are disqualified from availing of the services of the PAO, like the Done this 23rd day of September 2008, Cagayan De Oro City.
4
existence of a conflict of interests or conflicting defenses, and other Unanimously approved upon motion severally seconded.
similar causes; The Court noted Resolution No. 24, series of 2008 and required the IBP,
5
WHEREAS, PAO clients are automatically exempt from the payment of through the NCLA, to comment thereon.
6
docket and other fees for cases, be they original proceedings or on In a comment dated December 18, 2008, the IBP, through the NCLA,
appeal, by virtue of the provisions of Section 16–D of R.A. 9406 (PAO made the following comments:
7
Law), without the need for the filing of any petition or motion to declare (a) Under Section 16-D of RA 9406, clients of the Public
them as pauper litigants; Attorneys’ Office (PAO) are exempt from the payment of docket
WHEREAS, there is no similar provision in any substantive law or and other fees incidental to the institution of action in court and
procedural law giving IBP Legal Aid clients the same benefits or other quasi-judicial bodies. On the other hand, clients of legal aid
privileges enjoyed by PAO clients with respect to the payment of docket offices in the various IBP chapters do not enjoy the same
and other fees before the courts, quasi-judicial bodies and prosecutor’s exemption. IBP’s indigent clients are advised to litigate as pauper
offices; litigants under Section 21, Rule 3 of the Rules of Court;
WHEREAS, the collection of docket and other fees from the IBP Legal (b) They are further advised to submit documentary evidence to
Aid clients poses an additional strain to their next to non-existent prove compliance with the requirements under Section 21, Rule 3
finances; of the Rules of Court, i.e., certifications from the barangay and
WHEREAS, the quarterly allowance given by the National Legal Aid the Department of Social Welfare and Development. However,
Office to the IBP Misamis Oriental Chapter is insufficient to even cover not only does the process involve some expense which indigent
the incidental expenses of volunteer legal aid lawyers, much less answer clients could ill-afford, clients also lack knowledge on how to go
for the payment of docket and other fees collected by the courts, quasi- about the tedious process of obtaining these documents;
judicial bodies and prosecutor’s offices and mediation fees collected by (c) Although the IBP is given an annual legal aid subsidy, the
the Philippine Mediation Center; amount it receives from the government is barely enough to
8
NOW THEREFORE, on motion of the Board of Officers of the IBP– cover various operating expenses;
Misamis Oriental Chapter, be it resolved as it is hereby resolved, to move (d) While each IBP local chapter is given a quarterly allocation
9
the IBP National Legal Aid Office to make the necessary requests or (from the legal aid subsidy), said allocation covers neither the
representations with the Supreme Court, the Philippine Mediation Center, incidental expenses defrayed by legal aid lawyers in handling
the Department of Justice and the National Prosecution Service and other legal aid cases nor the payment of docket and other fees
quasi-judicial agencies to effect the grant of a like exemption from the collected by the courts, quasi-judicial bodies and the prosecutor’s
payment of filing, docket and other fees to the IBP Legal Aid clients as office, as well as mediation fees and
that enjoyed by PAO clients, towards the end that IBP Legal Aid clients (e) Considering the aforementioned factors, a directive may be
be automatically exempted from the filing of the abovementioned fees; issued by the Supreme Court granting IBP’s indigent clients an
RESOLVED FURTHER, that copies of this Resolution be furnished to exemption from the payment of docket and other fees similar to
Supreme Court Chief Justice Honorable Reynato S. Puno, IBP National that given to PAO clients under Section 16-D of RA 9406. In this
President Feliciano M. Bautista, the IBP Board of Governors, Secretary of connection, the Supreme Court previously issued a circular
Justice Hon. Raul M. Gonzalez, the National Supervisor of the Philippine exempting IBP clients from the payment of transcript of
10
Mediation Center, the National Labor Relations Commission, the Civil stenographic notes.
Service Commission and other quasi-judicial bodies and their local At the outset, we laud the Misamis Oriental Chapter of the IBP for its
offices; effort to help improve the administration of justice, particularly, the access
! 26!
to justice by the poor. Its Resolution No. 24, series of 2008 in fact echoes family, considering the number of his dependents and the conditions
one of the noteworthy recommendations during the Forum on Increasing prevailing in the locality.
Access to Justice spearheaded by the Court last year. In promulgating The means test shall not be applicable to applicants who fall under the
Resolution No. 24, the Misamis Oriental Chapter of the IBP has Developmental Legal Aid Program such as Overseas Filipino Workers,
effectively performed its duty to "participate in the development of the fishermen, farmers, women and children and other disadvantaged
legal system by initiating or supporting efforts in law reform and in the groups.
11
administration of justice." SEC. 21. Merit test. – The merit test seeks to ascertain whether or not the
We now move on to determine the merits of the request. applicant’s cause of action or his defense is valid and chances of
Access to Justice: establishing the same appear reasonable.
Making an Ideal a Reality SEC. 22. Other factors. – The effect of the Legal Aid Service or of the
Access to justice by all, especially by the poor, is not simply an ideal in failure to render the same upon the Rule of Law, the proper
our society. Its existence is essential in a democracy and in the rule of administration of justice, the public interest involved in given cases and
law. As such, it is guaranteed by no less than the fundamental law: the practice of law in the locality shall likewise be considered.
Sec. 11. Free access to the courts and quasi-judicial bodies and SEC. 23. Private practice. – Care shall be taken that the Legal aid is not
adequate legal assistance shall not be denied to any person by availed of to the detriment of the private practice of law, or taken
12
reason of poverty. (emphasis supplied) advantage of by anyone for personal ends.
The Court recognizes the right of access to justice as the most important SEC. 24. Denial. – Legal aid may be denied to an applicant already
pillar of legal empowerment of the marginalized sectors of our receiving adequate assistance from any source other than the Integrated
13
society. Among others, it has exercised its power to "promulgate rules Bar.
14
concerning the protection and enforcement of constitutional rights" to The "means and merit tests" appear to be reasonable determinants of
open the doors of justice to the underprivileged and to allow them to step eligibility for coverage under the legal aid program of the IBP.
inside the courts to be heard of their plaints. In particular, indigent litigants Nonetheless, they may be improved to ensure that any exemption from
15 16
are permitted under Section 21, Rule 3 and Section 19, Rule 141 of the payment of legal fees that may be granted to clients of the NCLA and
the Rules of Court to bring suits in forma pauperis. the legal aid offices of the various IBP chapters will really further the right
The IBP, pursuant to its general objectives to "improve the administration of access to justice by the poor. This will guarantee that the exemption
of justice and enable the Bar to discharge its public responsibility more will neither be abused nor trivialized. Towards this end, the following shall
17
effectively," assists the Court in providing the poor access to justice. In be observed by the NCLA and the legal aid offices in IBP chapters
particular, it renders free legal aid under the supervision of the NCLA. nationwide in accepting clients and handling cases for the said clients:
A New Rule, a New Tool A.M. No. 08-11-7-SC (IRR): Re: Rule on the Exemption From the
for Access to Justice Payment of Legal Fees of the Clients of the National Committee on
Under the IBP’s Guidelines Governing the Establishment and Operation Legal Aid and of the Legal Aid Offices in the Local Chapters of the
of Legal Aid Offices in All Chapters of the IBP (Guidelines on Legal Aid), Integrated Bar of the Philippines
the combined "means and merit tests" shall be used to determine the Rule on the Exemption From the Payment of Legal Fees of the
eligibility of an applicant for legal aid: Clients of the National Committee on Legal Aid (NCLA) and of the
ARTICLE VIII Legal Aid Offices in the Local Chapters of the Integrated Bar of the
TESTS Philippines (IBP)
SEC. 19. Combined tests. – The Chapter Legal Aid Committee or the ARTICLE I
[NCLA], as the case may be, shall pass upon the request for legal aid by Purpose
the combined application of the means test and merit test, and the Section 1. Purpose. – This Rule is issued for the purpose of enforcing the
consideration of other factors adverted to in the following sections. right of free access to courts by the poor guaranteed under Section 11,
SEC. 20. Means test. – The means test aims at determining whether the Article III of the Constitution. It is intended to increase the access to
applicant has no visible means of support or his income is otherwise justice by the poor by exempting from the payment of legal fees incidental
insufficient to provide the financial resources necessary to engage to instituting an action in court, as an original proceeding or on appeal,
competent private counsel owing to the demands for subsistence of his qualified indigent clients of the NCLA and of the legal aid offices in local
IBP chapters nationwide.
! 27!
ARTICLE II Section 1. Persons qualified for exemption from payment of legal fees. –
Definition of Terms Persons who shall enjoy the benefit of exemption from the payment of
Section 1. Definition of important terms. – For purposes of this Rule and legal fees incidental to instituting an action in court, as an original
as used herein, the following terms shall be understood to be how they proceeding or on appeal, granted under this Rule shall be limited only to
are defined under this Section: clients of the NCLA and the chapter legal aid offices.
(a) "Developmental legal aid" means the rendition of legal The said clients shall refer to those indigents qualified to receive free
services in public interest causes involving overseas workers, legal aid service from the NCLA and the chapter legal aid offices. Their
fisherfolk, farmers, laborers, indigenous cultural communities, qualifications shall be determined based on the tests provided in this
women, children and other disadvantaged groups and Rule.
marginalized sectors; Section 2. Persons not covered by the Rule. – The following shall be
(b) "Disinterested person" refers to the punong barangay having disqualified from the coverage of this Rule. Nor may they be accepted as
jurisdiction over the place where an applicant for legal aid or clients by the NCLA and the chapter legal aid offices.
client of the NCLA or chapter legal aid office resides; (a) Juridical persons; except in cases covered by developmental
(c) "Falsity" refers to any material misrepresentation of fact or any legal aid or public interest causes involving juridical entities which
fraudulent, deceitful, false, wrong or misleading statement in the are non-stock, non-profit organizations, non-governmental
application or affidavits submitted to support it or the affidavit of a organizations and people’s organizations whose individual
disinterested person required to be submitted annually under this members will pass the means test provided in this Rule;
Rule which may substantially affect the determination of the (b) Persons who do not pass the means and merit tests;
qualifications of the applicant or the client under the means and (c) Parties already represented by a counsel de parte;
merit tests; (d) Owners or lessors of residential lands or buildings with
(d) "Legal fees" refers to the legal fees imposed under Rule 141 respect to the filing of collection or unlawful detainer suits against
of the Rules of Court as a necessary incident of instituting an their tenants and
action in court either as an original proceeding or on appeal. In (e) Persons who have been clients of the NCLA or chapter legal
particular, it includes filing or docket fees, appeal fees, fees for aid office previously in a case where the NCLA or chapter legal
issuance of provisional remedies, mediation fees, sheriff’s fees, aid office withdrew its representation because of a falsity in the
stenographer’s fees (that is fees for transcript of stenographic application or in any of the affidavits supporting the said
notes) and commissioner’s fees; application.
(e) "Means test" refers to the set of criteria used to determine Section 3. Cases not covered by the Rule. – The NCLA and the chapter
whether the applicant is one who has no money or property legal aid offices shall not handle the following:
sufficient and available for food, shelter and basic necessities for (a) Cases where conflicting interests will be represented by the
himself and his family; NCLA and the chapter legal aid offices and
(f) "Merit test" refers to the ascertainment of whether the (b) Prosecution of criminal cases in court.
applicant’s cause of action or his defense is valid and whether ARTICLE IV
the chances of establishing the same appear reasonable and Tests of Indigency
(g) "Representative" refers to the person authorized to file an Section 1. Tests for determining who may be clients of the NCLA and the
application for legal aid in behalf of the applicant when the said legal aid offices in local IBP chapters. – The NCLA or the chapter legal
applicant is prevented by a compelling reason from personally aid committee, as the case may be, shall pass upon requests for legal aid
filing his application. As a rule, it refers to the immediate family by the combined application of the means and merit tests and the
members of the applicant. However, it may include any of the consideration of other relevant factors provided for in the following
applicant’s relatives or any person or concerned citizen of sections.
sufficient discretion who has first-hand knowledge of the personal Section 2. Means test; exception. – (a) This test shall be based on the
circumstances of the applicant as well as of the facts of the following criteria: (i) the applicant and that of his immediate family must
applicant’s case. have a gross monthly income that does not exceed an amount double the
ARTICLE III monthly minimum wage of an employee in the place where the applicant
Coverage resides and (ii) he does not own real property with a fair market value as
! 28!
stated in the current tax declaration of more than Three Hundred (b) Interview – The applicant shall be interviewed by a member of
Thousand (₱300,000.00) Pesos. the chapter legal aid committee or any chapter member
In this connection, the applicant shall execute an affidavit of indigency authorized by the chapter legal aid committee to determine the
(printed at the back of the application form) stating that he and his applicant’s qualifications based on the means and merit tests and
immediate family do not earn a gross income abovementioned, nor own other relevant factors. He shall also be required to submit copies
any real property with the fair value aforementioned, supported by an of his latest income tax returns and/or current tax declaration, if
affidavit of a disinterested person attesting to the truth of the applicant’s available, and execute an affidavit of indigency printed at the
affidavit. The latest income tax return and/or current tax declaration, if back of the application form with the supporting affidavit of a
any, shall be attached to the applicant’s affidavit. disinterested person attesting to the truth of the applicant’s
(b) The means test shall not be applicable to applicants who fall under the affidavit.
developmental legal aid program such as overseas workers, fisherfolk, After the interview, the applicant shall be informed that he can
farmers, laborers, indigenous cultural communities, women, children and follow up the action on his application after five (5) working days.
other disadvantaged groups. (c) Action on the application – The chapter legal aid committee
Section 3. Merit test. – A case shall be considered meritorious if an shall pass upon every request for legal aid and submit its
assessment of the law and evidence at hand discloses that the legal recommendation to the chapter board of officers within three (3)
service will be in aid of justice or in the furtherance thereof, taking into working days after the interview of the applicant. The basis of the
consideration the interests of the party and those of society. A case fails recommendation shall be stated.
this test if, after consideration of the law and evidence presented by the The chapter board of officers shall review and act on the
applicant, it appears that it is intended merely to harass or injure the recommendation of the chapter legal aid committee within two (2)
opposite party or to work oppression or wrong. working days from receipt thereof; Provided, however, that in
Section 4. Other relevant factors that may be considered. – The effect of urgent matters requiring prompt or immediate action, the
legal aid or of the failure to render the same upon the rule of law, the chapter’s executive director of legal aid or whoever performs his
proper administration of justice, the public interest involved in a given functions may provisionally act on the application, subject to
case and the practice of law in the locality shall likewise be considered. review by the chapter legal aid committee and, thereafter, by the
ARTICLE V chapter board of officers.
Acceptance and Handling of Cases The action of the chapter board of officers on the application shall
Section 1. Procedure in accepting cases. – The following procedure shall be final.
be observed in the acceptance of cases for purposes of this Rule: (d) Cases which may be provisionally accepted. – In the following
(a) Filing of application – An application shall be made personally cases, the NCLA or the chapter legal aid office, through the
by the applicant, unless there is a compelling reason which chapter’s executive director of legal aid or whoever performs his
prevents him from doing so, in which case his representative may functions may accept cases provisionally pending verification of
apply for him. It shall adhere substantially to the form made for the applicant’s indigency and an evaluation of the merit of his
that purpose. It shall be prepared and signed by the applicant or, case.
in proper cases, his duly authorized representative in at least (i) Where a warrant for the arrest of the applicant has been
three copies. issued;
Applications for legal aid shall be filed with the NCLA or with the (ii) Where a pleading has to be filed immediately to avoid adverse
chapter legal aid committee. effects to the applicant;
The NCLA shall, as much as possible, concentrate on cases of (iii) Where an appeal has to be urgently perfected or a petition for
paramount importance or national impact. certiorari, prohibition or mandamus filed has to be filed
Requests received by the IBP National Office shall be referred by immediately; and
the NCLA to the proper chapter legal aid committee of the locality (iv) Other similar urgent cases.
where the cases have to be filed or are pending. The chapter (e) Assignment of control number – Upon approval of the chapter
president and the chairman of the chapter’s legal aid committee board of officers of a person’s application and the applicant is
shall be advised of such referral. found to be qualified for legal assistance, the case shall be
assigned a control number. The numbering shall be consecutive
! 29!
starting from January to December of every year. The control (b) Avoidance of conflict of interest – Where acceptance of a
number shall also indicate the region and the chapter handling case will give rise to a conflict of interest on the part of the
the case. chapter legal aid office, the applicant shall be duly informed and
Example: advised to seek the services of a private counsel or another legal
Region
18
Chapter Year Month Number aid organization.
Where handling of the case will give rise to a conflict of interest
GM - Manila - 2009 - 03 - 099 on the part of the chapter member assigned to the case, the
(f) Issuance of a certification – After an application is approved client shall be duly informed and advised about it. The handling
and a control number duly assigned, the chapter board of officers lawyer shall also inform the chapter legal aid committee so that
shall issue a certification that the person (that is, the successful another chapter member may be assigned to handle the case.
applicant) is a client of the NCLA or of the chapter legal aid office. For purposes of choosing the substitute handling lawyer, the rule
The certification shall bear the control number of the case and in the immediately preceding section shall be observed.
shall state the name of the client and the nature of the judicial (c) Legal aid is purely gratuitous and honorary – No member of
action subject of the legal aid of the NCLA or the legal aid office the chapter or member of the staff of the NCLA or chapter legal
of a local IBP chapter. aid office shall directly or indirectly demand or request from an
The certification shall be issued to the successful applicant free applicant or client any compensation, gift or present for legal aid
of charge. services being applied for or rendered.
Section 2. Assignment of cases. – After a case is given a control number, (d) Same standard of conduct and equal treatment – A chapter
the chapter board of officers shall refer it back to the chapter legal aid member who is tasked to handle a case accepted by the NCLA
committee. The chapter legal aid committee shall assign the case to any or by the chapter legal aid office shall observe the same standard
chapter member who is willing to handle the case. of conduct governing his relations with paying clients. He shall
In case no chapter member has signified an intention to handle the case treat the client of the NCLA or of the chapter legal aid office and
voluntarily, the chapter legal aid committee shall refer the matter to the the said client’s case in a manner that is equal and similar to his
chapter board of officers together with the names of at least three treatment of a paying client and his case.
members who, in the chapter legal aid committee’s discretion, may (e) Falsity in the application or in the affidavits – Any falsity in the
competently render legal aid on the matter. The chapter board of officers application or in the affidavit of indigency or in the affidavit of a
shall appoint one chapter member from among the list of names disinterested person shall be sufficient cause for the NCLA or
submitted by the chapter legal aid committee. The chapter member chapter legal aid office to withdraw or terminate the legal aid. For
chosen may not refuse the appointment except on the ground of conflict this purpose, the chapter board of officers shall authorize the
of interest or other equally compelling grounds as provided in the Code of handling lawyer to file the proper manifestation of withdrawal of
19
Professional Responsibility, in which case the chapter board of officers appearance of the chapter legal aid office in the case with a
shall appoint his replacement from among the remaining names in the list motion for the dismissal of the complaint or action of the erring
previously submitted by the chapter legal aid committee. client. The court, after hearing, shall approve the withdrawal of
The chapter legal aid committee and the chapter board of officers shall appearance and grant the motion, without prejudice to whatever
take the necessary measures to ensure that cases are well-distributed to criminal liability may have been incurred.
chapter members. Violation of this policy shall disqualify the erring client from
Section 3. Policies and guidelines in the acceptance and handling of availing of the benefits of this Rule in the future.
cases. – The following policies and guidelines shall be observed in the (f) Statement in the initiatory pleading – To avail of the benefits of
acceptance and handling of cases: the Rule, the initiatory pleading shall state as an essential
(a) First come, first served – Where both the preliminary allegation that (i) the party initiating the action is a
complainant/plaintiff/petitioner and defendant/ respondent apply client of the NCLA or of the chapter legal aid office and therefore
for legal aid and both are qualified, the first to seek assistance entitled to exemption from the payment of legal fees under this
shall be given preference. Rule and (ii) a certified true copy of the certification issued
pursuant to Section 1(e), of this Article is attached or annexed to
the pleading.
! 30!
Failure to make the statement shall be a ground for the dismissal Section 1. Withdrawal of legal aid. – The NCLA or the chapter legal aid
of the action without prejudice to its refiling. committee may, in justifiable instances as provided in the next Section,
The same rule shall apply in case the client, through the NCLA or direct the handling lawyer to withdraw representation of a client’s cause
chapter legal aid office, files an appeal. upon approval of the IBP Board of Governors (in the case of the NCLA)
(g) Attachment of certification in initiatory pleading – A certified or of the chapter board of officers (in the case of the chapter legal aid
true copy of the certification issued pursuant to Section 1(e), of committee) and through a proper motion filed in Court.
this Article shall be attached as an annex to the initiatory Section 2. Grounds for withdrawal of legal aid. – Withdrawal may be
pleading. warranted in the following situations:
Failure to attach a certified true copy of the said certification shall (a) In a case that has been provisionally accepted, where it is
be a ground for the dismissal of the action without prejudice to its subsequently ascertained that the client is not qualified for legal
refiling. aid;
The same rule shall apply in case the client, through the NCLA or (b) Where the client’s income or resources improve and he no
chapter legal aid office, files an appeal. longer qualifies for continued assistance based on the means
(h) Signing of pleadings – All complaints, petitions, answers, test. For this purpose, on or before January 15 every year, the
replies, memoranda and other important pleadings or motions to client shall submit an affidavit of a disinterested person stating
be filed in courts shall be signed by the handling lawyer and co- that the client and his immediate family do not earn a gross
signed by the chairperson or a member of the chapter legal aid income mentioned in Section 2, Article V, nor own any real
committee, or in urgent cases, by the executive director of legal property with the fair market value mentioned in the same
aid or whoever performs his functions. Section;
Ordinary motions such as motions for extension of time to file a (c) When it is shown or found that the client committed a falsity in
pleading or for postponement of hearing and manifestations may the application or in the affidavits submitted to support the
be signed by the handling lawyer alone. application;
(i) Motions for extension of time or for postponement – The filing (d) When the client subsequently engages a de parte counsel or
of motions for extension of time to file a pleading or for is provided with a de oficio counsel;
postponement of hearing shall be avoided as much as possible (e) When, despite proper advice from the handling lawyer, the
as they cause delay to the case and prolong the proceedings. client cannot be refrained from doing things which the lawyer
(j) Transfer of cases – Transfer of cases from one handling himself ought not do under the ethics of the legal profession,
lawyer to another shall be affected only upon approval of the particularly with reference to their conduct towards courts, judicial
chapter legal aid committee. officers, witnesses and litigants, or the client insists on having
Section 4. Decision to appeal. – (a) All appeals must be made on the control of the trial, theory of the case, or strategy in procedure
request of the client himself. For this purpose, the client shall be made to which would tend to result in incalculable harm to the interests of
fill up a request to appeal. the client;
(b) Only meritorious cases shall be appealed. If the handling lawyer, in (f) When, despite notice from the handling lawyer, the client does
consultation with the chapter legal aid committee, finds that there is no not cooperate or coordinate with the handling lawyer to the
merit to the appeal, the client should be immediately informed thereof in prejudice of the proper and effective rendition of legal aid such as
writing and the record of the case turned over to him, under proper when the client fails to provide documents necessary to support
receipt. If the client insists on appealing the case, the lawyer handling the his case or unreasonably fails to attend hearings when his
case should perfect the appeal before turning over the records of the presence thereat is required; and
case to him. (g) When it becomes apparent that the representation of the
Section 5. Protection of private practice. – Utmost care shall be taken to client’s cause will result in a representation of conflicting
ensure that legal aid is neither availed of to the detriment of the private interests, as where the adverse party had previously engaged the
practice of law nor taken advantage of by anyone for purely personal services of the NCLA or of the chapter legal aid office and the
ends. subject matter of the litigation is directly related to the services
ARTICLE VI previously rendered to the adverse party.
Withdrawal of Legal Aid and Termination of Exemption
! 31!
Section 3. Effect of withdrawal. – The court, after hearing, shall allow the Article IV hereof shall be credited for purposes of compliance with
NCLA or the chapter legal aid office to withdraw if it is satisfied that the the Rule on Mandatory Legal Aid Service.
ground for such withdrawal exists. The chairperson of the chapter legal aid office shall issue the certificate
Except when the withdrawal is based on paragraphs (b), (d) and (g) of the similar to that issued by the Clerk of Court in Section 5(b) of the Rule on
immediately preceding Section, the court shall also order the dismissal of Mandatory Legal Aid Service.
the case. Such dismissal is without prejudice to whatever criminal liability ARTICLE VIII
may have been incurred if the withdrawal is based on paragraph (c) of the Effectivity
immediately preceding Section. Section 1. Effectivity. – This Rule shall become effective after fifteen days
ARTICLE VII following its publication in a newspaper of general circulation.
Miscellaneous Provisions The above rule, in conjunction with Section 21, Rule 3 and Section 19,
Section 1. Lien on favorable judgment. – The amount of the docket and Rule 141 of the Rules of Court, the Rule on Mandatory Legal Aid Service
other lawful fees which the client was exempted from paying shall be a and the Rule of Procedure for Small Claims Cases, shall form a solid
lien on any judgment rendered in the case favorable to the indigent, base of rules upon which the right of access to courts by the poor shall be
unless the court otherwise provides. implemented. With these rules, we equip the poor with the tools to
In case, attorney’s fees have been awarded to the client, the same shall effectively, efficiently and easily enforce their rights in the judicial system.
belong to the NCLA or to the chapter legal aid office that rendered the A Final Word
legal aid, as the case may be. It shall form part of a special fund which Equity will not suffer a wrong to be without a remedy. Ubi jus ibi
shall be exclusively used to support the legal aid program of the NCLA or remedium. Where there is a right, there must be a remedy. The remedy
the chapter legal aid office. In this connection, the chapter board of must not only be effective and efficient, but also readily accessible. For a
officers shall report the receipt of attorney’s fees pursuant to this Section remedy that is inaccessible is no remedy at all.
to the NCLA within ten (10) days from receipt thereof. The NCLA shall, in The Constitution guarantees the rights of the poor to free access to the
turn, include the data on attorney’s fees received by IBP chapters courts and to adequate legal assistance. The legal aid service rendered
pursuant to this Section in its liquidation report for the annual subsidy for by the NCLA and legal aid offices of IBP chapters nationwide addresses
legal aid.1awphi1 only the right to adequate legal assistance. Recipients of the service of
Section 2. Duty of NCLA to prepare forms. – The NCLA shall prepare the the NCLA and legal aid offices of IBP chapters may enjoy free access to
standard forms to be used in connection with this Rule. In particular, the courts by exempting them from the payment of fees assessed in
NCLA shall prepare the following standard forms: the application form, connection with the filing of a complaint or action in court. With these twin
the affidavit of indigency, the supporting affidavit of a disinterested initiatives, the guarantee of Section 11, Article III of Constitution is
person, the affidavit of a disinterested person required to be submitted advanced and access to justice is increased by bridging a significant gap
annually under Section 2(b), Article VI, the certification issued by the and removing a major roadblock.
NCLA or the chapter board of officers under Section 1(f), Article V and WHEREFORE, the Misamis Oriental Chapter of the Integrated Bar of the
the request to appeal. Philippines is hereby COMMENDED for helping increase the access to
The said forms, except the certification, shall be in Filipino. Within sixty justice by the poor. The request of the Misamis Oriental Chapter for the
(60) days from receipt of the forms from the NCLA, the chapter legal aid exemption from the payment of filing, docket and other fees of the clients
offices shall make translations of the said forms in the dominant dialect of the legal aid offices of the various IBP chapters is GRANTED. The
used in their respective localities. Rule on the Exemption From the Payment of Legal Fees of the Clients of
Section 3. Effect of Rule on right to bring suits in forma pauperis. – the National Committee on Legal Aid (NCLA) and of the Legal Aid Offices
Nothing in this Rule shall be considered to preclude those persons not in the Local Chapters of the Integrated Bar of the Philippines (IBP) (which
covered either by this Rule or by the exemption from the payment of legal shall be assigned the docket number A.M. No. 08-11-7-SC [IRR] provided
fees granted to clients of the Public Attorney’s Office under Section 16-D in this resolution is hereby APPROVED. In this connection, the Clerk of
of RA 9406 to litigate in forma pauperis under Section 21, Rule 3 and Court is DIRECTED to cause the publication of the said rule in a
Section 19 Rule 141 of the Rules of Court. newspaper of general circulation within five days from the promulgation of
Section 4. Compliance with Rule on Mandatory Legal Aid Service. – this resolution.
Legal aid service rendered by a lawyer under this Rule either as a
handling lawyer or as an interviewer of applicants under Section 1(b),
! 32!
The Office of the Court Administrator is hereby directed to promptly issue The basis for the exemption from legal and filing fees is the free access
a circular to inform all courts in the Philippines of the import of this clause, embodied in Sec. 11, Art. III of the 1987 Constitution, thus:
resolution. Sec. 11. Free access to the courts and quasi judicial bodies and
SO ORDERED. adequate legal assistance shall not be denied to any person by reason of
A. M. No. 09-6-9-SC August 19, 2009 poverty.
RE: Query of Mr. Roger C. Prioreschi Re Exemption from Legal and The importance of the right to free access to the courts and quasi judicial
Filing Fees of the Good Shepherd Foundation, Inc. bodies and to adequate legal assistance cannot be denied. A move to
RESOLUTION remove the provision on free access from the Constitution on the ground
BERSAMIN, J.: that it was already covered by the equal protection clause was defeated
In his letter dated May 22, 2009 addressed to the Chief Justice, Mr. by the desire to give constitutional stature to such specific protection of
1
Roger C. Prioreschi, administrator of the Good Shepherd Foundation, the poor.
Inc., wrote: In implementation of the right of free access under the Constitution, the
The Good Shepherd Foundation, Inc. is very grateful for your 1rst. Supreme Court promulgated rules, specifically, Sec. 21, Rule 3, Rules of
2 3
Indorsement to pay a nominal fee of Php 5,000.00 and the balance upon Court, and Sec. 19, Rule 141, Rules of Court, which respectively state
the collection action of 10 million pesos, thus giving us access to thus:
the Justice Systempreviously denied by an up-front excessive court fee. Sec. 21. Indigent party. — A party may be authorized to litigate his action,
The Hon. Court Administrator Jose Perez pointed out to the need of claim or defense as an indigent if the court, upon an ex parte application
complying with OCA Circular No. 42-2005 and Rule 141 that reserves this and hearing, is satisfied that the party is one who has no money or
"privilege" to indigent persons. While judges are appointed to interpret the property sufficient and available for food, shelter and basic necessities for
law, this type of law seems to be extremely detailed with requirements himself and his family.
that do not leave much room for interpretations. Such authority shall include an exemption from payment of docket and
In addition, this law deals mainly with "individual indigent" and it does not other lawful fees, and of transcripts of stenographic notes which the court
include Foundations or Associations that work with and for the most may order to be furnished him. The amount of the docket and other lawful
Indigent persons. As seen in our Article of Incorporation, since 1985 the fees which the indigent was exempted from paying shall be a lien on any
Good Shepherd Foundation, Inc. reached-out to the poorest among the judgment rendered in the case favorable to the indigent, unless the court
poor, to the newly born and abandoned babies, to children who never otherwise provides.
saw the smile of their mother, to old people who cannot afford a few Any adverse party may contest the grant of such authority at any time
pesos to pay for "common prescriptions", to broken families who returned before judgment is rendered by the trial court. If the court should
to a normal life. In other words, we have been working hard for the very determine after hearing that the party declared as an indigent is in fact a
Filipino people, that the Government and the society cannot reach to, or person with sufficient income or property, the proper docket and other
have rejected or abandoned them. lawful fees shall be assessed and collected by the clerk of court. If
Can the Courts grant to our Foundation who works for indigent and payment is not made within the time fixed by the court, execution shall
underprivileged people, the same option granted to indigent people? issue for the payment thereof, without prejudice to such other sanctions
The two Executive Judges, that we have approached, fear accusations of as the court may impose. (22a)1avvphi1
favoritism or other kind of attack if they approve something which is not Sec. 19. Indigent litigants exempt from payment of legal fees.– Indigent
clearly and specifically stated in the law or approved by your HONOR. litigants (a) whose gross income and that of their immediate family do not
Can your Honor help us once more? exceed an amount double the monthly minimum wage of an employee
Grateful for your understanding, God bless you and your undertakings. and (b) who do not own real property with a fair market value as stated in
We shall be privileged if you find time to visit our orphanage – the Home the current tax declaration of more than three hundred thousand
of Love – and the Spiritual Retreat Center in Antipolo City. (P300,000.00) pesos shall be exempt from payment of legal fees.
To answer the query of Mr. Prioreschi, the Courts cannot grant to The legal fees shall be a lien on any judgment rendered in the case
foundations like the Good Shepherd Foundation, Inc. the same favorable to the indigent litigant unless the court otherwise provides.
exemption from payment of legal fees granted to indigent litigants even if To be entitled to the exemption herein provided, the litigant shall execute
the foundations are working for indigent and underprivileged people. an affidavit that he and his immediate family do not earn a gross income
abovementioned, and they do not own any real property with the fair
! 33!
value aforementioned, supported by an affidavit of a disinterested person Relations, the City Courts, the Municipal Courts, and the Municipal Circuit
attesting to the truth of the litigant’s affidavit. The current tax declaration, Courts.
if any, shall be attached to the litigant’s affidavit. CHAPTER I
Any falsity in the affidavit of litigant or disinterested person shall be COURT OF APPEALS
sufficient cause to dismiss the complaint or action or to strike out the Section 3. Organization. – There is hereby created a Court of Appeals
pleading of that party, without prejudice to whatever criminal liability may which consists of a Presiding Justice and fifty Associate Justice who shall
have been incurred. be appointed by the President of the Philippines. The Presiding Justice
The clear intent and precise language of the aforequoted provisions of shall be so designated in his appointment, and the Associate Justice shall
the Rules of Court indicate that only a natural party litigant may be have precedence according to the dates of their respective appointments,
regarded as an indigent litigant. The Good Shepherd Foundation, Inc., or when the appointments of two or more of them shall bear the same
being a corporation invested by the State with a juridical personality date, according to the order in which their appointments were issued by
4
separate and distinct from that of its members, is a juridical person. the President. Any member who is reappointed to the Court after
Among others, it has the power to acquire and possess property of all rendering service in any other position in the government shall retain the
kinds as well as incur obligations and bring civil or criminal actions, in precedence to which he was entitled under his original appointment, and
5
conformity with the laws and regulations of their organization. As a his service in the Court shall, for all intents and purposes, be considered
juridical person, therefore, it cannot be accorded the exemption from legal as continuous and uninterrupted. (as amended by Exec. Order No. 33,,
and filing fees granted to indigent litigants. July 28, 1986.)
That the Good Shepherd Foundation, Inc. is working for indigent and Section 4. Exercise of powers and functions. – The Court Appeals shall
underprivileged people is of no moment. Clearly, the Constitution has exercise its powers, functions, and duties, through seventeen (17)
explicitly premised the free access clause on a person’s poverty, a divisions, each composed of three (3) members. The Court may sit en
condition that only a natural person can suffer. banc only for the purpose of exercising administrative, ceremonial, or
There are other reasons that warrant the rejection of the request for other non-adjudicatory functions. (as amended by Exec. Order No. 33,.)
exemption in favor of a juridical person. For one, extending the exemption Section 5. Succession to Office of Presiding Justice. – In case of a
to a juridical person on the ground that it works for indigent and vacancy in the absence of inability to perform the powers, functions, and
underprivileged people may be prone to abuse (even with the imposition duties of his office, the associate Justice who is first in precedence shall
of rigid documentation requirements), particularly by corporations and perform his powers, functions, and duties until such disability is removed,
entities bent on circumventing the rule on payment of the fees. Also, the or another Presiding Justice is appointed and has qualified.
scrutiny of compliance with the documentation requirements may prove Section 6. Who presides over session of a division. – If the Presiding
too time-consuming and wasteful for the courts. Justice is present in any session of a division of the Court, he shall
In view of the foregoing, the Good Shepherd Foundation, Inc. cannot be preside. In his absence, the Associate Justice attending such session
extended the exemption from legal and filing fees despite its working for who has precedence shall preside.
indigent and underprivileged people. Section 7. Qualifications. – The Presiding Justice and the Associate
SO ORDERED. Justice shall have the same qualifications as those provided in
Constitution for Justice of the Supreme Court.
II. Jurisdiction Section 8. Grouping of Divisions. – (Expressly repealed by Section 4,
BATAS PAMBANSA Blg. 129 Exec. Order No. 33, July 28, 1986.)
AN ACT REORGANIZING THE JUDICIARY, APPROPRIATING FUNDS Section 9. Jurisdiction. – The Court of Appeals shall Exercise:
THEREFOR, AND FOR OTHER PURPOSES 1. Original jurisdiction to issue writs
PRELIMINARY CHAPTER of mandamus, prohibition, certiorari, habeas corpus, and quo
Section 1. Title. – This Act shall be known as "The Judiciary warranto,and auxiliary writs or processes, whether or not in aid of
Reorganization Act of 1980." its appellate jurisdiction;
Section 2. Scope. – The reorganization herein provided shall include the 2. Exclusive original jurisdiction over actions for annulment of
Court of Appeals, the Court of First Instance, the Circuit Criminal Courts, judgements of Regional Trial Courts; and
the Juvenile and Domestic Relations Courts, the Courts of Agrarian 3. Exclusive appellate jurisdiction over all final judgements,
resolutions, orders or awards of Regional Trial Courts and quasi-
! 34!
judicial agencies, instrumentalities, boards or commission, and other matters pertaining to the operations of the Court of its divisions.
including the Securities and Exchange Commission, the Social Copies of such rules and orders shall be furnished by the Supreme Court,
Security Commission, the Employees Compensation which rules and orders shall be effective fifteen (15) days after receipt
Commission and the Civil Service Commission, Except those thereof, unless directed otherwise by the Supreme Court.
falling within the appellate jurisdiction of the Supreme Court in CHAPTER II
accordance with the Constitution, the Labor Code of the REGIONAL TRIAL COURTS
Philippines under Presidential Decree No. 442, as amended, the Section 13. Creation of Regional Trial Courts. – There are hereby
provisions of this Act, and of subparagraph (1) of the third created thirteen (13) Regional Trial Courts, one for each of the following
paragraph and subparagraph 4 of the fourth paragraph od judicial regions:
Section 17 of the Judiciary Act of 1948. The First Judicial Region, consisting of the provinces of Abra, Benguet,
The court of Appeals shall have the power to try cases and conduct Ilocos Norte, Ilocos Sur, La Union, Mountain Province, and Pangasinan,
hearings, receive evidence and perform any and all acts necessary to and cities of Baguio, Dagupan, Laog and San Carlos;
resolve factual issues raised in cases falling within its original and The Second Judicial Region, consisting of the provinces of Batanes,
appellate jurisdiction, including the power to grant and conduct new trials Cagayan, Ifugao, Kalinga-Apayao, Nueva Viscaya, and Quirino;
or Appeals must be continuous and must be completed within three (3) The Third Judicial Region, consisting of the provinces of Bataan, Bulacan
months, unless extended by the Chief Justice. (as amended by R.A. No. (except the municipality of valenzuela), Nueva Ecija, Pampanga, Tarlac,
7902.) and Zambales, and the cities of Angeles, Cabanatuan, Olongapo,
Section 10. Place of holding sessions. – The Court of Appeals shall have Palayan and San Jose;
its permanent station in the City of Manila. Whenever demanded by The National Capital Judicial Region, consisting of the cities of Manila,
public interest, the Supreme Court, upon its own initiative or upon Quezon, Pasay, Caloocan and Mandaluyong, and the municipalities of
recommendation of the Presiding Justice, may authorize a division of the Navotas, Malabon, San Juan, Makati, Pasig, Pateros, Taguig, Marikina,
Court to hold sessions outside Manila, periodically, or for such periods Parañaque, Las Piñas, Muntinlupa, and Valenzuela;
and at such places as the Supreme Court may determine, for the purpose The Fourth Judicial Region, consisting of the provinces of Batangas,
of hearing and deciding cases. Cavite, Laguna, Marinduque, Mindoro Occidental, Mindoro Oriental,
Section 11. Quorum – A majority of the actual members of the Court Palawan, Quezon, Rizal (except the cities and municipalities embraced
shall constitute a quorum for its session en banc. Three members shall within the National Capital Judicial Region0, Romblon, and Aurora, and
constitute a quorum for the session of a division. The unanimous vote of the cities of Batangas, Cavite, Lipa, Lucena, Puerto Princessa, San
the three members of a division shall be necessary for the Pablo, Tagaytay, and Trece Martires;
pronouncement of a decision of final resolution, which shall be reached in The Fifth Judicial Region, consisting of the provinces of Albay, Camarines
consultation before the writing of the opinion by any members of the Sur, Camarines Norte, Catanduanes, Masbate, and Sorsogon, and the
division. In the event that the three members do not reach a unanimous cities of Legaspi, Naga and Iriga;
vote, the Presiding Justice shall request the Raffle Committee of the The Sixth Judicial Region, consisting of the provinces of Aklan, Antique,
Court for the designation of two additional Justice to sit temporarily with Capiz, Iloilo, La Calota, Roxas, San Carlos, and Silay, and the
them, forming a special division of five members and the concurrence of subprovince of Guimaras;
a majority of such division shall be necessary for the pronouncement of a The Seventh Judicial Region, consisting of the provinces of Bohol, Cebu,
decision or final resolution. The designation of such additional Justice Negros Oriental, and Siquijor, and the cities of Bais, Canlaon, Cebu,
shall be made strictly by raffle. Danao, Dumaguete, Lapu-lapu, Mandaue, Tagbilaran, and Toledo,
A month for reconsideration of its decision or final resolution shall be The Eighth Judicial Region, consisting of the provinces or Eastern Samar,
resolved by the Court within ninety (90) days from the time it is submitted Leyte, Northern, Samar, Southern Leyte, Ormoc, and Tacloban:
for resolution, and no second motion for reconsideration from the same The Ninth Judicial Region, consisting of the provinces of Basilan, Sulu,
party shall be entertainment. (as amended by Exec. Order No. 33, July Tawi-Tawi, Zamboanga del Sur, and the cities of Dapitan, Dipolog,
28, 1986.) Pagadian, and Zamboanga;
Section 12. Internal Rules. – The court en banc is authorized to The Tenth Judicial Region, consisting of the provinces of Agusan del
promulgate rules or orders governing the constitution of the divisions and Norte, Agusan del Sur, Bukidnon, Camiguin, Misamis Occidental,
the assignment of Appellate Justices thereto, the distribution of cases,
! 35!
Misamis Oriental, and Surigao del Norte, and the cities of Butuan, (b) Thirty-two Regional Trial Judges shall be commissioned for
Cagayan de Oro, Gingoog, Ozamis, Oroquieta, Surigao, and Tangub; the Second Judicial region. There shall be:
The Eleventh Judicial Region, consistingnof the provinces of Davao del Twelve branches (Branches I to XII) for the province of
Norte, Davao Oriental, Davao del Sur, South Cotabato, and Surigao del Cagayan, Branches I to V with seats at Tuguegarao,
Sur, and the cities of Davao, and General Santos; and Branches VI to X at Aparri, Branch XI at Tuao, and
The Twelfth Judicial Region, consisting of the provinces of Lanao del Branch XII at Sanchez Mira;
Norte, Lanao del Sur, Maguindanao, North Cotabato, and Sultan Kudarat, One branch (Branch XIII) for the province of Batanes,
and the cities of Cotabato, Iligan, and Marawi. with seat at Basco;
In case of transfer or redistribution of the provinces, subprovinces, cities Two branches (Branches XIV and XV) for the province of
or municipalities comprising the regions established by law of purposes of Ifugao, Branch XIV with seat at Lagawe, and Branch XV
the administrative field organization of the various departments and at Potia;
agencies of the government, the composition of the judicial regions herein Nine branches (Branches XVI to XXIV) for the province
constituted shall be deemed modified accordingly. of Isabela, Branches XVI to XVIII with seats at Ilagan,
Section 14. Regional Trial Courts. Branches XIX and XX at cauayan, Branch XXI at
(a) Fifty-seven Regional Trial Judges shall be commissioned for Santiago, Branch XXII at Cabagan, Branch XXIII at
the First Judicial Region. There shall be. Roxas, and Branch XXIV at Echague;
Two branches (Branches III ans II) for the province of Two branches (Branches XXV and XXVI) for the province
Abra, with seats at Bangued; of kalinga-Apayao, Branch XXV with seat at Tabuk, and
Eight branches (Branches III to X) for the province of Branch XXVI at Luna;
Benguet and the city of Baguio, Branches III to VII with Four branches (Branches XXVII to XXX) for the province
seats at Baguio City, and Branches VIII to X at La of Nueva Vizcaya, Branches XXVII to XXIX with seats at
Trinidad; Bayombong, and Branch XXX at Bambang;
Nine branches (Branches XI to XIX) for the province of Two branches (Branches XXXI and XXXII) for the
Ilocos Norte and the city of Laoag, Branches XI to XVI province of Quirino, with seats at Cabarroguis.
with seats at Laoag City, Branches XVII and XVIII at (c) Seventy-five Regional Trial judges shall be commissioned for
Batac, and Branch XIX at Bangui; the Third Judicial Region. There shall be:
Six branches (Braches XX to XXV) for the province of Five branches (Branches I to V) for the province of
Ilocos Sur, Branches XX and XXI with seats at Vigan, Bataan, Branches I to III with seats at Balanga, Branch
Branch XXII at Narvacan, Branch XXIII at Candon, IV at Mariveles, and Branch V at Dinalupihan;
Branch XXIV at Cabugao, and Branch XXV at Tagudin; Seventeen branches (Branches VI to XXII) for the
Nine branches (Branches XXVI to XXXIV) for the province of Bulacan (except the municipality of
province of La Union, Branches XXVI to XXX with seats Valuenzuela), with seats at Malolos;
at San Fernando, Branches XXXI and XXXII at Agoo, Eighteen branches (Branches XXIII to XL) for the
Branch XXXIII at Bauang, and Branch XXXIV at Balaoan; province of Nueva Ecija and the cities of Cabanatuan,
Two branches (Branches XXXV and XXXVI) for the San Jose and Palayan, Branches XXIII to XXX with seats
province of Mountain province, with seats at Bontoc; and at Cabanatuan City, Branches XXXI to XXXIII at Guimba,
Twenty-one branches (Branches XXXVII to LVII) for the Branches XXXIV to XXXVI at Gapan, Branch XXXVII at
province of Pangasinan and the citie sof dagupan and Sto. Domingo, Branches XXXVIII and XXXIX at San
san Carlos, Branches XXXVII to XXXIX with seats at Jose, and Branch XL at Palayan.
Lingayen, Branches XL to XLIV at dagupan, Branches Twenty-two branches (Branches XLI to LXII) for the
XLV to XLIX at Urdaneta, Branch L at Villasis, Branches province of Pampanga and the city of Angeles, Branches
LI and LII at Tayug, Branch LIII at Rosalaes, Branches XLI to XLVIII with seats at San Fernando, Branches XLIX
LIV and LV at Alaminos, and Branch LVI and LVII at san to LIII at Guagua, Branches LIV and LV at Macabebe,
Carlos. and Branches LVI to LXII at Angeles City;

! 36!
Six branches (Branches LXIII to LXVIII) for the province Pable City, Branch XXXIII at Siniloan, and Branches
of Tarlac, Branches LXVI at Capas, Branch LXVII at XXXIV to XXXVI at Calamba;
Paniqui, and Branch LXVIII at Camiling; and One branch (Branch XXXVIII) for the province of
Seven branches (Branches LXIX to LXXV) for the Marinduque, with seat at Boac;
province of Zambales and the city of Olongapo, Five branches (Branches XXXIX to XLIII) for the province
Branches LXIX to LXXI with seats at Iba and Branches of Mindoro Oriental, Branches XXXIX to XL with seats at
LXXII to LXXV at Olongapo City Calapan, Branches XLI and XLII at Pinamalayan, and
(d) One hundred seventy-two (172) Regional Trial Judges shall Branch XLII at Roxas;
be commissioned for the National Capital Judicial Region. There Three branches (Branches XLVII to XLVI) for the
shall be: province of Mindoro Occidental, Branch XLIV with seat at
Fifty-five branches (Branches 1 to 55) for the City of Mamburao, and Branches XLV and XLVI at San Jose;
Manila, wit seats thereat; Six branches (Branches XLVII to LII) for the province of
Thirty-two branches (Branches 76 to 107) for Quezon Palawan and the city of Puerto Princesa, with seats at
City, with seats thereat; Puerto Princesa City;
Twelve branches (Branches 108 to 119) for Pasay City, Thirteen branches (Branches LIII to LXV) for the province
with seats thereat; of Quezon and the city of Lucena, Branches LIII to LX
Twelve branches (Branches 120 to 131) for Caloocan with seats at Lucena City, Branches LXI and LXII at
City, with seats thereat; Gumaca, Branch LXIII at Calauag, Branch LXIV at
Fifty-eight branches (Branches 56 to 74 and 132 to 170) Mauban, and Branch LXV at Infanta;
for the Municipalities of Navotas, Malabon, San Juan, One branchj(Branch LXVI) for the province of Aurora,
Madaluyong, Makati, Pasig, Pateros, Taguig, Marikina, with seat at Baler;
Parañaque, Las Piñas, and Muntinlupa; Branches 67 to Fourteen branches (Branches LXVII to LXXX) for the
71 and 151 to 168 at Pasig; and Branches 72 to 74, 169 province of Rizal except the cities and municipalities
and 170 at Malabon; and embraced within the National Capital Judicial Region,
Three branches (Branches 75, 171 and 172) for the Branches LXVII to LXX with seats at Binangonan,
municipality of Valenzuela, with seats thereat. (As Branches LXXI to LXXIV at Antipolo, Branches LXXV to
amended by EO No. 33, July 30, 1986.) LXXVII at San Mateo, and Branches LXXVIII to LXXX at
(e) Eihty-two Regional Trial Judges shall be commissioned for Morong; and
the Fourth Judicial Region. There shall be: Two branches (Branches LXXXI and LXXXII) for the
Fourteen branches (Branches I to XIV) for the province of province of Romblon, Branch LXXXI with seat at
Batangas and the cities of Lipa and Batangas, Branches Romblon, and Branch LXXXII at Odiongan.
I to VI with seats at Batangas City, Branch V at Lemery, (f) Fifty-five Regional Trial Judges shall be commissioned for the
Branches VI to VIII at Tanuan, Branches IX to XI at Fifth Judicial Region. There shall be:
Balayan, Branches XII and XIII at Lipa, and Branch XIV Eighteen branches (Branches I to XVIII) for the province
at Nasugbu; of Albay and the city of Legaspi, Branches I to X with
Nine branches (Branches XV to XXIII) for the province of seats at Legaspi City, Branches XI to XIV at Ligao, and
Cavite and the cities of Cavite, Tagaytay and Trece Branches XV to XVIII at Tabaco;
Matires, Branch XV with seat at Naic, Branches XVII at Nineteen branches (Branches XIX to XXXVII) for the
Cavite City, Branch XVIII at Tagayatay City, Branch XIX province of Camarines Sur and the cities of Naga and
at Bacoor, Branches XX to XXII at Imus, and Branch Iriga, Branches XIX to XXVIII with seats at Naga City,
XXIII at Trece Martires; Branch XXIX at Libmanan, Branch XXX at Tigaon,
Fourteen branches (Branches XXIV to XXXVII) for the Braches XXXI to XXXIII at Pili, and Branches XXXIV to
province of Laguna and the city of San Pablo, Branches XXXVII at Iriga City;
XXVIII at Sta. Cruz, Branches XXIX to XXXII at San Four branches (Branches XXXVIII to XLII) for the
province of Camarines Norte, with seat at Daet;
! 37!
Two branches (Branches XLII and XLII) for the province One branch (Branch XLVI) for the province of Siquijor,
of Catanduanes, with seats at Virac; with seat at Larena.
Seven branches (Branches XLIV to L) for the province of (i) Thirty-three Regional Trial Judges shall be commissioned for
Masbate, Branches XLIV to XLVIII with seats at Masbate, the Eighth Judicial Region. There shall be:
Branch XLIX at Cataingan, and Branch L at San Jacinto; Five branches (Branches I to V) for the province of
and Eastern Samar, Branches I and II with seats at
Five branches (Branches LI to LV) for the province of Borongan, Branch III at Guiuan, Branch IV at Dolores,
Sorsogon, Branches LI to LIII with seats at Sorsogon, and Branch V at Oras;
Branch LVI at Gubat, and Branch LV at Irosin. Thirteen branches (Branches VI to XVIII) for the province
(g) Sixty-three Regional Trial Judges shall be commissioned for of Leyte, the sub-province of Biliran, and the cities of
the Sixth Judicial Region. There shall be: Ormoc and Tacloban, Branches VI and IX with seats at
Nine branches (Branches I to IX) for the province of Tacloban City, Branch X at Abuyog, Branch XI at
Aklan, with seats at Kalibo; Calubian, Branch XII at Ormoc City, Branch XIII at
Four branches (Branches X to XIII) for the province of Carigara, Branch XIV at Baybay, Branch XV at Burauen,
Antique, Branches X to XII with seats at San Jose, and Branch XVI at Naval, Branch XVII at Palompon, and
Branch XIII and Culasi; Branch XVIII at Hilongos;
Eighr branches (Branches XIV to XXI) for the province of Five branches (Branches XIX to XXIII) for the province of
Capiz and the city of Roxas, Branches XIV to XIX with Northern Samar, Branches XIX and XX with seats at
seats at Roxas City and Branches XX and XXI at Catarman, Branches XXI and XXII at Laoang, and
Mambusao; Branch XXIII at Allen;
Eighteen branches (Branches XXII to XXXIX) for the Three branches (Branches XXIV to XXVI) for the
province of Iloilo, the subprovince of Guimaras, and the province of Southern Leyte, Branches XXIV and XXV
city of Iloilo, with seats at Iloilo City; and with seats at Maasin, and Branch XXVI at San Juan; and
Twenty-four branches (Branches XL to LXIII) for the Seven branches (Branches XXVII to XXXIII) for the
province of Negros Occidental, and the cities of province of Samar and the city of Calbayog, Branches
Bacolod,Bago, Cadiz, La Carlota, San Carlos and Silay, XXVII to XXIX with seats at Catbalogan, Branch XXX at
Branch XL with seat at Silay City, Branches XLI to LIV at Basey, Branches XXXI and XXXII at Calbayog City, and
Bacolod City, Branches LV and LVI at Himamaylan, Branch XXXIII at Calbiga.
Branches LVII to LIX at Kabankalan, Branch LXII at Bago (j) Twenty-four Regional Trial Judges shall be commissioned for
City, and Branch LXII at La Carlota City. the Ninth Judicial Region. There shall be:
(h) Forty-six Regional Trial Judges shall be commissioned for the Two branches (Branches I and II) for the province of
Seventh Judicial Region. There shall be: Basilan, with seats at Isabela;
Four branches (Branches I to IV) for the province of Two branches (Branches III and IV) for the province of
Bohol and the city of Tagbilaran, with seats at Tagbilaran Sulu, Branch III with seat at Jolo, and Branch IV at
City; Parang;
Twenty-five branches (Branches V to XXIX) for the One branch (Branch V) for the province of Tawi-Tawi,
province of Cebu and the cities of Cebu, Danao, Lapu- with seat at Bongao;
Lapu, Mandaue and Toledo, Branches V to XXIV with Six branches (Branches VI to XI) for the province of
seats at Cebu City, Branch XXV at Danao City, Branch Zamboanga del Norte, and the cities of Dipolog and
XXVI at Argao, Branch XXVII at Lapu-Lapu City, Branch Dapitan, Branches VI to X seats at Dipolog City, and
XXVIII at Mandaue City, and Branch XXIX at Toledo City; Branch XI at Sindangan; and
Sixteen branches (Branches XXX to XLV) for the Thirteen branches (Branches XII to XXIV) for the
province of Negros Oriental and the cities of Dumaguete, province of Zamboanga del Sur and the cities of
Bais and Canlaon, Branches XXX to XLIV with seats at Pagadian and Zamboanga Branches XII to XVII with
Dumaguete City, and Branch XLV at Bais City; and seats at Zamboanga City, Branches, XVIII to XXII at
! 38!
Pagadian City, Branch XXIII at Molave, and Branch XXIV City, Branches XXIV and XXV at Koronadal, and Branch
at Ipil. XXVI at Surallah; and
(k) Thirty-two Regional Trial Judges shall be commissioned for Three branches (Branches XXVII to XXIX) for the
the Tenth Judicial Region. There shall be: province of Surigao del Sur, Branch XXVII with seat at
Five branches (Branches I to V) for the province of Tandag, Branch XXVIII at Lianga, and Branch XXIX at
Agusan del Norte and the city of Butuan, with seats at Bislig.
Butuan City; (m) Twenty Regional Trial Judges shall be commissioned for the
Two branches (Branches VI and VII) for the province of Twelfth Judicial Region. There shall be:
Agusan del Sur, Branches VI with seat at Prosperidad Seven branches (Branches I to VII) for the province of
and Branch VII with seat at Bayugan; Lanao del Norte and the city of Iligan, Branches I to VI
Four branches (Branches VIII to XI) for the province of with seats at Iligan City, and Branch VII at Tubod;
Bukidnon, Branches VIII to X with seats at Malaybalay Five branches (Branches VIII to XII) for the province of
and Branch XI at Manalo Fortich; Lanao del Sur and the city of Marawi, Branches VIII to X
Five branches (Branches XII to XI) for the province of with seats at Marawi City, and Branches XI and XII at
Misamis Occidental and the cities of Oroquieta, Ozamis, Malabang;
and Tangub, Branches XII to XIV with seats at Oroquieta Three branches (Branches XIII to XV) for the province of
City, Branch XV at Ozamis City, and Branch XVI at Maguindanao and the city of Cotabato, Branches XIII and
Tangub City; XIV with seats at Cotabato City, and Branch XV at
Eleven branches (Branches XVII to XXVII) for the Maganoy;
province of Misamis Oriental and the cities of Cagayan Three branches (Branches XVI to XVIII) for the province
de Oro and Gingoog, Branches XVII to XXV with seats at of North Cotabato, Branch XVI with seat at Kabacan,
Cagayan de Oro City, Branch XXVI at Medina, and Branch XVII at Kidapawan, and Branch XVIII at
Branch XXVII at Gingoog City; Missayap; and
One branch (Branch XXVIII) for the province of Two branches (Branches XIX and XX) for the province of
Camiguin, with seat at Mambajao; and Sultan Kudarat, Branch XIX, with seat at Isulan, and
Four branches (Branches XXIX to XXXII) for the province Branch XX at Tacurong.
of Surigao del Norte and the City of Surigao, Branches Section 15. Qualifications. – No persons shall be appointed Regional
XXIX and XXX with seats at Surigao City, Branch XXXI Trial Judge unless he is a natural-born citizen of the Philippines, at least
at Dapa, and Branch XXXII at Dinagat, Dinagat Island. thirty-five years of age, and for at least ten years, has been engaged in
(l) Twenty-nine Regional Trial Judges shall be commissioned for the practice of law in the Philippines or has held a public office in the
the Eleventh Judicial Region. There shall be Philippines requiring admission to the practice of law as an indispensable
Four branches (Branches I to IV) for the province of requisite.
Davao del Norte, Branches I and II with seats at Tagum, Section 16. Time and duration of sessions. – The time and duration of
Branch III at Nabunturan, and Branch IV at Panabo; daily sessions of the Regional Trial Courts shall be determined by the
Three branches (Branches V to VII) for the province of Supreme Court: Provided, however, That all motions, except those
Davao Oriental, Branches V and VI with seats at Mati requiring immediate action, shall be heard in the afternoon of every
and Branch VII at Banganga; Friday, unless it falls on a holiday, in which case, the hearing shall be
Fourteen branches (Branches VIII to XXI) for the held on the afternoon of the next succeeding business day: Provided,
province of Davao del Sur and the city of Davao, further, That the Supreme Court may, for good reasons, fix a different
Branches VIII to XVII with seats at Davao City, Branches motion day in specified areas
XVIII and XIX at Digos, Branch XX at Malinta, and Section 17. Appointment and assignment of Regional Trial Judges. –
Branch XXI a Bansalan; Every Regional Trial Judge shall be appointed to a region which shall be
Five Branches (Branches XXII to XXVI) for the province his permanent station, and his appointment shall state the branch of the
of South Cotabato and the city of General Santos, court and the seat thereof to which he shall be originally assigned.
Branches XXII and XXIII with seats at General Santos However, the Supreme Court may assign temporarily a Regional Trial
! 39!
Judge to another region as public interest may require, provided that such (7) In all civil actions and special proceedings falling within the
temporary assignment shall not last longer than six (6) months without exclusive original jurisdiction of a Juvenile and Domestic
the consent of the Regional Trial Judge concerned. Relations Court and of the Courts of Agrarian Relations as now
A Regional Trial Judge may be assigned by the Supreme Court to any provided by law; and
branch or city or municipality within the same region as public interest (8) In all other cases in which the demand, exclusive of interest,
may require, and such assignment shall not be deemed an assignment to damages of whatever kind, attorney's fees, litigation expenses,
another station within the meaning of this section. and costs or the value of the property in controversy exceeds
Section 18. Authority to define territory appurtenant to each branch. – One hundred thousand pesos (100,000.00) or, in such other
The Supreme Court shall define the territory over which a branch of the abovementioned items exceeds Two hundred thousand pesos
Regional Trial Court shall exercise its authority. The territory thus defined (200,000.00). (as amended by R.A. No. 7691*)
shall be deemed to be the territorial area of the branch concerned for Section 20. Jurisdiction in criminal cases. – Regional Trial Courts shall
purposes of determining the venue of all suits, proceedings or actions, exercise exclusive original jurisdiction in all criminal cases not within the
whether civil or criminal, as well as determining the Metropolitan Trial exclusive jurisdiction of any court, tribunal or body, except those now
Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts over the falling under the exclusive and concurrent jurisdiction of the
said branch may exercise appellate jurisdiction. The power herein Sandiganbayan which shall hereafter be exclusively taken cognizance of
granted shall be exercised with a view to making the courts readily by the latter.
accessible to the people of the different parts of the region and making Section 21. Original jurisdiction in other cases. – Regional Trial Courts
the attendance of litigants and witnesses as inexpensive as possible. shall exercise original jurisdiction:
Section 19. Jurisdiction in civil cases. – Regional Trial Courts shall (1) In the issuance of writs of certiorari, prohibition, mandamus,
exercise exclusive original jurisdiction: quo warranto, habeas corpus and injunction which may be
(1) In all civil actions in which the subject of the litigation is enforced in any part of their respective regions; and
incapable of pecuniary estimation; (2) In actions affecting ambassadors and other public ministers
(2) In all civil actions which involve the title to, or possession of, and consuls.
real property, or any interest therein, where the assessed value Section 22. Appellate jurisdiction. – Regional Trial Courts shall exercise
of the property involved exceeds Twenty thousand pesos appellate jurisdiction over all cases decided by Metropolitan Trial Courts,
(P20,000.00) or for civil actions in Metro Manila, where such the Municipal Trial Courts, and Municipal Circuit Trial Courts in their
value exceeds Fifty thousand pesos (50,000.00) except actions respective territorial jurisdictions. Such cases shall be decided on the
for forcible entry into and unlawful detainer of lands or buildings, basis of the entire record of the proceedings had in the court of origin and
original jurisdiction over which is conferred upon Metropolitan such memoranda and/or briefs as may be submitted by the parties or
Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial required by the Regional Trial Courts. The decision of the Regional Trial
Courts; Courts in such cases shall be appealable by petition for review to the
(3) In all actions in admiralty and maritime jurisdiction where he Court of Appeals which may give it due course only when the petition
demand or claim exceeds One hundred thousand pesos shows prima facie that the lower court has committed an error of fact or
(P100,000.00) or , in Metro Manila, where such demand or claim law that will warrant a reversal or modification of the decision or judgment
exceeds Two hundred thousand pesos (200,000.00); sought to be reviewed.
(4) In all matters of probate, both testate and intestate, where the Section 23. Special jurisdiction to try special cases. – The Supreme
gross value of the estate exceeds One hundred thousand pesos Court may designate certain branches of the Regional Trial Courts to
(P100,000.00) or, in probate matters in Metro Manila, where such handle exclusively criminal cases, juvenile and domestic relations cases,
gross value exceeds Two hundred thousand pesos (200,000.00); agrarian cases, urban land reform cases which do not fall under the
(5) In all actions involving the contract of marriage and marital jurisdiction of quasi-judicial bodies and agencies, and/or such other
relations; special cases as the Supreme Court may determine in the interest of a
(6) In all cases not within the exclusive jurisdiction of any court, speedy and efficient administration of justice.
tribunal, person or body exercising jurisdiction or any court, Section 24. Special Rules of Procedure. – Whenever a Regional Trial
tribunal, person or body exercising judicial or quasi-judicial Court takes cognizance of juvenile and domestic relation cases and/or
functions; agrarian cases, the special rules of procedure applicable under present
! 40!
laws to such cases shall continue to be applied, unless subsequently Two branches (Branches LXXVII and LXXVIII) for Parañaque
amended by law or by rules of court promulgated by the Supreme Court. with seats thereat;
CHAPTER III One branch (Branch LXXIX) for Las Piñas with seat thereat;
METROPOLITAN TRIAL COURTS, MUNICIPAL TRIAL COURTS, AND One branch (Branch LXXX) for Muntinlupa with seat thereat;
MUNICIPAL CIRCUIT TRIAL COURTS Two branches (Branches LXXXI and LXXXII) for Valenzuela with
Section 25. Establishment of Metropolitan Trial Courts, Municipal Trial seats thereat;
Courts and Municipal Circuit Trial Courts. – There shall be created a Section 28. Other Metropolitan Trial Courts. – The Supreme Court shall
Metropolitan Trial Court in each metropolitan area established by law, a constitute Metropolitan Trial Courts in such other metropolitan areas as
Municipal Trial Court in each of the other cities or municipalities, and a may be established by law whose territorial jurisdiction shall be co-
Municipal Circuit Trial Court in each circuit comprising such cities and/or extensive with the cities and municipalities comprising the metropolitan
municipalities as are grouped together pursuant to law. area.
Section 26. Qualifications. – No person shall be appointed judge of a Every Metropolitan Trial Judge shall be appointed to a metropolitan area
Metropolitan Trial Court, Municipal Trial Court, or Municipal Circuit Trial which shall be his permanent station and his appointment shall state
Court unless he is a natural-born citizen of the Philippines, at least 30 branch of the court and the seat thereof to which he shall be originally
years of age, and, for at least five years, has been engaged in the assigned. A Metropolitan Trial Judge may be assigned by the Supreme
practice of law in the Philippines, or has held a public office in the Court to any branch within said metropolitan area as the interest of justice
Philippines requiring admission to the practice of law as an indispensable may require, and such assignment shall not be deemed an assignment to
requisite. another station within the meaning of this section.
Section 27. Metropolitan Trial Courts of the National Capital Region. – Section 29. Municipal Trial Courts in cities. – In every city which does not
There shall be a Metropolitan Trial Court in the National Capital Region, form part of a metropolitan area, there shall be a Municipal Trial Court
to be known as the Metropolitan Trial Court of Metro Manila, which shall with one branch, except as hereunder provided:
be composed of eighty-two (82) branches. There shall be: Two branches for Laoag City;
Thirty branches (Branches I to XXX) for the city of Manila with Four branches for Baguio City;
seats thereat; Three branches for Dagupan City;
Thirteen branches (Branches XXXI to XLIII) for Quezon City with Five branches for Olongapo City;
seats thereat; Three branches for Cabanatuan City;
Five branches (Branches XLIV to XLVIII) for Pasay City with Two branches for San Jose City;
seats thereat; Three branches for Angeles City;
Five branches (Branches XLIX to LIII) for Caloocan City with Two branches for Cavite City;
seats thereat; Two branches for Batangas City;
One branch (Branch LIV) for Navotas with seat thereat; Two branches for Lucena City;
Two branches (Branches LV and LVI) for Malabon with seats Three branches for Naga City;
thereat; Two branches for Iriga City;
Two branches (Branches LVII and LVIII) for San Juan with seats Three branches for Legaspi City;
thereat; Two branches for Roxas City;
Two branches (Branches LIX and LX) for Mandaluyong with Four branches for Iloilo City;
seats thereat; Seven branches for Bacolod City;
Seven branches (Branches LXI and LXVII) for Makati with seats Two branches for Dumaguete City;
thereat; Two branches for Tacloban City;
Five branches (Branches LXVIII to LXXII) for Pasig with seats Eight branches for Cebu City;
thereat; Three branches for Mandaue City;
One branch (Branch LXXIII) for Pateros with seat thereat; Two branches for Tagbilaran City;
One branch (Branch LXXIV) for Taguig with seat thereat; Two branches for Surigao City;
Two branches (Branches LXXV and LXXVI) for Marikina with Two branches for Butuan City;
seats thereat; Five branches for Cagayan de Oro City;
! 41!
Seven branches for Davao City; Courts and of the Sandiganbayan, the Metropolitan Trial Courts,
Three branches for General Santos City; Municipal Trial Courts, and Municipal Circuit Trial Courts shall exercise:
Two branches for Oroquieta City; (1) Exclusive original jurisdiction over all violations of city or
Three branches for Ozamis City; municipal ordinances committed within their respective territorial
Two branches for Dipolog City; jurisdiction; and
Four branches for Zamboanga City; (2) Exclusive original jurisdiction over all offenses punishable with
Two branches for Pagadian City; and imprisonment not exceeding six (6) years irrespective of the
Two branches for Iligan City. amount of fine, and regardless of other imposable accessory or
Section 30. Municipal Trial Courts. – In each of the municipalities that are other penalties, including the civil liability arising from such
not comprised within a metropolitan area and a municipal circuit there offenses or predicated thereon, irrespective of kind, nature,
shall be a Municipal Trial Court which shall have one branch, except as value, or amount thereof: Provided, however, That in offenses
hereunder provided: involving damage to property through criminal negligence they
Two branches for San Fernando, La Union; shall have exclusive original jurisdiction thereof. (as amended by
Four branches for Tuguegarao; R.A, No. 7691)
Three branches for Lallo, and two branches for Aparri, both of Section 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial
Cagayan; Courts and Municipal Circuit Trial Courts in civil cases. – Metropolitan
Two branches for Santiago, Isabela; Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts
Two branches each for Malolos, Meycauayan and Bulacan, all of shall exercise:
Bulacan Province; (1) Exclusive original jurisdiction over civil actions and probate
Four branches for San Fernando and two branches for Guagua, proceedings, testate and intestate, including the grant of
both of Pampanga; provisional remedies in proper cases, where the value of the
Two branches for Tarlac, Tarlac; personal property, estate, or amount of the demand does not
Two branches for San Pedro, Laguna; and exceed One hundred thousand pesos (P100,000.00) or, in Metro
Two branches each for Antipolo and Binangonan, both in Rizal. Manila where such personal property, estate, or amount of the
Section 31. Municipal Circuit Trial Court. – There shall be a Municipal demand does not exceed Two hundred thousand pesos
Circuit Trial Court in each area defined as a municipal circuit, comprising (P200,000.00) exclusive of interest damages of whatever kind,
one or more cities and/or one or more municipalities. The municipalities attorney's fees, litigation expenses, and costs, the amount of
comprising municipal circuits as organized under Administrative Order which must be specifically alleged: Provided, That where there
No. 33, issued on June 13, 1978 by the Supreme Court pursuant to are several claims or causes of action between the same or
Presidential Decree No. 537, are hereby constituted as municipal circuits different parties, embodied in the same complaint, the amount of
for purposes of the establishment of the Municipal Circuit Trial Courts, the demand shall be the totality of the claims in all the causes of
and the appointment thereto of Municipal Circuit Trial Judges: Provided, action, irrespective of whether the causes of action arose out of
however, That the Supreme Court may, as the interests of justice may the same or different transactions;
require, further reorganize the said courts taking into account workload, (2) Exclusive original jurisdiction over cases of forcible entry and
geographical location, and such other factors as will contribute to a unlawful detainer: Provided, That when, in such cases, the
rational allocation thereof, pursuant to the provisions of Presidential defendant raises the question of ownership in his pleadings and
Decree No. 537 which shall be applicable insofar as they are not the question of possession cannot be resolved without deciding
inconsistent with this Act. the issue of ownership, the issue of ownership shall be resolved
Every Municipal Circuit Trial Judge shall be appointed to a municipal only to determine the issue of possession.
circuit which shall be his official station. (3) Exclusive original jurisdiction in all civil actions which involve
The Supreme Court shall determine the city or municipality where the title to, or possession of, real property, or any interest therein
Municipal Circuit Trial Court shall hold sessions. where the assessed value of the property or interest therein does
Section 32. Jurisdiction of Metropolitan Trial Courts, Municipal Trial not exceed Twenty thousand pesos (P20,000.00) or, in civil
Courts and Municipal Circuit Trial Courts in criminal cases. – Except in actions in Metro Manila, where such assessed value does not
cases falling within the exclusive original jurisdiction of Regional Trial exceed Fifty thousand pesos (P50,000.00) exclusive of interest,
! 42!
damages of whatever kind, attorney's fees, litigation expenses No warrant of arrest shall be issued by the Judge in connection with any
and costs: Provided, That value of such property shall be criminal complaint filed with him for preliminary investigation, unless after
determined by the assessed value of the adjacent lots. (as an examination in writing and under oath or affirmation of the complainant
amended by R.A. No. 7691) and his witnesses, he finds that a probable cause exists.
Section 34. Delegated jurisdiction in cadastral and land registration Any warrant of arrest issued in accordance herewith may be served
cases. – Metropolitan Trial Courts, Municipal Trial Courts, and Municipal anywhere in the Philippines.
Circuit Trial Courts may be assigned by the Supreme Court to hear and Section 38. Judgments and processes. –
determine cadastral or land registration cases covering lots where there (1) All judgments determining the merits of cases shall be in
is no controversy or opposition, or contested lots the where the value of writing, stating clearly the facts and the law on which they were
which does not exceed One hundred thousand pesos (P100,000.00), based, signed by the Judge and filed with the Clerk of Court.
such value to be ascertained by the affidavit of the claimant or by Such judgment shall be appealable to the Regional Trial Courts
agreement of the respective claimants if there are more than one, or from in accordance with the procedure now prescribed by law for
the corresponding tax declaration of the real property. Their decisions in appeals to the Court of First Instance, by the provisions of this
these cases shall be appealable in the same manner as decisions of the Act, and by such rules as the Supreme Court may hereafter
Regional Trial Courts. (as amended by R.A. No. 7691) prescribe.
Section 35. Special jurisdiction in certain cases. – In the absence of all (2) All processes issued by the Metropolitan Trial Courts,
the Regional Trial Judges in a province or city, any Metropolitan Trial Municipal Trial Courts and Municipal Circuit Trial Courts, in cases
Judge, Municipal Trial Judge, Municipal Circuit Trial Judge may hear and falling within their jurisdiction, may be served anywhere in the
decide petitions for a writ of habeas corpus or applications for bail in Philippines without the necessity of certification by the Judge of
criminal cases in the province or city where the absent Regional Trial the Regional Trial Court.
Judges sit. CHAPTER IV
Section 36. Summary procedures in special cases. – In Metropolitan GENERAL PROVISIONS
Trial Courts and Municipal Trial Courts with at least two branches, the Section 39. Appeals. – The period for appeal from final orders,
Supreme Court may designate one or more branches thereof to try resolutions, awards, judgments, or decisions of any court in all cases
exclusively forcible entry and unlawful detainer cases, those involving shall be fifteen (15) days counted from the notice of the final order,
violations of traffic laws, rules and regulations, violations of the rental law, resolution, award, judgment, or decision appealed from: Provided
and such other cases requiring summary disposition as the Supreme however, That in habeas corpus cases, the period for appeal shall be
Court may determine. The Supreme Court shall adopt special rules or forty-eight (48) hours from the notice of the judgment appealed from.
procedures applicable to such cases in order to achieve an expeditious No record on appeal shall be required to take an appeal. In lieu thereof,
and inexpensive determination thereof without regard to technical rules. the entire record shall be transmitted with all the pages prominently
Such simplified procedures may provide that affidavits and counter- numbered consecutively, together with an index of the contents thereof.
affidavits may be admitted in lieu of oral testimony and that the periods This section shall not apply in appeals in special proceedings and in other
for filing pleadings shall be non-extendible. cases wherein multiple appeals are allowed under applicable provisions
Section 37. Preliminary investigation. – Judges of Metropolitan Trial of the Rules of Court.
Courts, except those in the National Capital Region, of Municipal Trial Section 40. Form of decision in appealed cases. – Every decision of final
Courts, and Municipal Circuit Trial Courts shall have authority to conduct resolution of a court in appealed cases shall clearly and distinctly state
preliminary investigation of crimes alleged to have been committed within the findings of fact and the conclusions of law on which it is based, which
their respective territorial jurisdictions which are cognizable by the may be contained in the decision or final resolution itself, or adopted by
Regional Trial Courts. reference from those set forth in the decision, order, or resolution
The preliminary investigation shall be conducted in accordance with the appealed from.
procedure prescribed in Section 1, paragraphs (a), (b), (c), and (d), of Section 41. Salaries. – Intermediate Appellate Justices, Regional Trial
Presidential Decree No. 911: Provided, however, That if after the Judges, Metropolitan Trial Judges, Municipal Trial Judges, and Municipal
preliminary investigation the Judge finds a prima facie case, he shall Circuit Trial Judges shall receive such compensation and allowances as
forward the records of the case to the Provincial/City Fiscal for the filing of may be authorized by the President along the guidelines set forth in
the corresponding information with the proper court.
! 43!
Letter of Implementation No. 93 pursuant to Presidential Decree No. 985, Judiciary Retirement Law or general retirement law, if he has met or
as amended by Presidential Decree No. 1597. satisfied the requirements therefor.
Section 42. Longevity pay. – A monthly longevity pay equivalent to 5% of Section 47. Repealing clause. – The provisions of Republic Act No. 296,
the monthly basic pay shall be paid to the Justices and Judges of the otherwise known as the Judiciary Act of 1948, as amended, of Republic
courts herein created for each five years of continuous, efficient, and Act No. 5179 as amended, of the Rules of Court, and of all other statutes,
meritorious service rendered in the judiciary; Provided, That in no case letters of instructions and general order or parts thereof, inconsistent with
shall the total salary of each Justice or Judge concerned, after this the provisions of this Act are hereby repealed or accordingly modified.
longevity pay is added, exceed the salary of the Justice or Judge next in Section 48. Date of Effectivity. – This Act shall take effect immediately.
rank. Approved: August 14, 1981
Section 43. Staffing pattern. – The Supreme Court shall submit to the Republic Act No. 7691 March 25, 1994
President, within thirty (30) days from the date of the effectivity of this Act, AN ACT EXPANDING THE JURISDICTION OF THE METROPOLITAN
a staffing pattern for all courts constituted pursuant to this Act which shall TRIAL COURTS, MUNICIPAL TRIAL COURTS, AND MUNICIPAL
be the basis of the implementing order to be issued by the President in CIRCUIT TRIAL COURTS, AMENDING FOR THE PURPOSE BATAS
accordance with the immediately succeeding section. PAMBANSA, BLG. 129, OTHERWISE KNOWN AS THE "JUDICIARY
Section 44. Transitory provisions. – The provisions of this Act shall be REORGANIZATION ACT OF 1980"
immediately carried out in accordance with an Executive Order to be Be it enacted by the Senate and House of Representatives of the
issued by the President. The Court of Appeals, the Courts of First Philippines in Congress assembled::
Instance, the Circuit Criminal Courts, the Juvenile and Domestic Section 1. Section 19 of Batas Pambansa Blg. 129, otherwise known as
Relations Courts, the Courts of Agrarian Relations, the City Courts, the the "Judiciary Reorganization Act of 1980", is hereby amended to read as
Municipal Courts, and the Municipal Circuit Courts shall continue to follows:
function as presently constituted and organized, until the completion of "Sec. 19. Jurisdiction in civil cases. – Regional Trial Courts shall
the reorganization provided in this Act as declared by the President. Upon exercise exclusive original jurisdiction.
such declaration, the said courts shall be deemed automatically abolished "(1) In all civil actions in which the subject of the litigation
and the incumbents thereof shall cease to hold office. The cases pending is incapable of pecuniary estimation;
in the old Courts shall be transferred to the appropriate Courts constituted "(2) In all civil actions which involve the title to, or
pursuant to this Act, together with the pertinent functions, records, possession of, real property, or any interest therein,
equipment, property and the necessary personnel. where the assessed value of the property involved
The applicable appropriations shall likewise be transferred to the exceeds Twenty thousand pesos (P20,000,00) or, for
appropriate courts constituted pursuant to this Act, to be augmented as civil actions in Metro Manila, where such value exceeds
may be necessary from the funds for organizational changes as provided Fifty thousand pesos (P50,000.00) except actions for
in Batas Pambansa Blg. 80. Said funding shall thereafter be included in forcible entry into and unlawful detainer of lands or
the annual General Appropriations Act. buildings, original jurisdiction over which is conferred
Section 45. Shari'a Courts. – Shari'a Courts to be constituted as provided upon the Metropolitan Trial Courts, Municipal Trial
for in Presidential Decree No. 1083, otherwise known as the "Code of Courts, and Municipal Circuit Trial Courts;
Muslim Personal Laws of the Philippines," shall be included in the funding "(3) In all actions in admiralty and maritime jurisdiction
appropriations so provided in this Act. where the demand or claim exceeds One hundred
Section 46. Gratuity of judges and personnel separated from office. – All thousand pesos (P100,000.00) or, in Metro Manila,
members of the judiciary and subordinate employees who shall be where such demand or claim exceeds Two hundred
separated from office by reason of the reorganization authorized herein, thousand pesos (P200,000.00);
shall be granted a gratuity at a rate equivalent to one month's salary for "(4) In all matters of probate, both testate and intestate,
every year of continuous service rendered in any branch of the where the gross value of the estate exceeds One
government or equivalent nearest fraction thereof favorable to them on hundred thousand pesos (P100,000.00) or, in probate
the basis of the highest salary received: Provided, That such member of matters in Metro Manila, where such gross value
the judiciary or employee shall have the option to retire under the exceeds Two Hundred thousand pesos (P200,000.00);

! 44!
"(5) In all actions involving the contract of marriage and "(1) Exclusive original jurisdiction over civil actions and
marital relations; probate proceedings, testate and intestate, including the
"(6) In all cases not within the exclusive jurisdiction of any grant of provisional remedies in proper cases, where the
court, tribunal, person or body exercising jurisdiction of value of the personal property, estate, or amount of the
any court, tribunal, person or body exercising judicial or demand does not exceed One hundred thousand pesos
quasi-judicial functions; (P100,000.00) or, in Metro Manila where such personal
"(7) In all civil actions and special proceedings falling property, estate, or amount of the demand does not
within the exclusive original jurisdiction of a Juvenile and exceed Two hundred thousand pesos (P200,000.00),
Domestic Relations Court and of the Court of Agrarian exclusive of interest, damages of whatever kind,
Relations as now provided by law; and attorney's fees, litigation expenses, and costs, the
"(8) In all other cases in which the demand, exclusive of amount of which must be specifically alleged: Provided,
interest, damages of whatever kind, attorney's fees, That interest, damages of whatever kind, attorney's fees,
litigation expenses, and costs or the value of the property litigation expenses, and costs shall be included in the
in controversy exceeds One hundred thousand pesos determination of the filing fees: Provided, further, That
(P100,000.00) or, in such other cases in Metro Manila, where there are several claims or causes of actions
where the demand exclusive of the abovementioned between the same or different parties, embodied in the
items exceeds Two Hundred thousand pesos same complaint, the amount of the demand shall be the
(P200,000.00)." totality of the claims in all the causes of action,
Section 2. Section 32 of the same law is hereby amended to read as irrespective of whether the causes of action arose out of
follows: the same or different transactions;
"Sec. 32. Jurisdiction of Metropolitan Trial Courts, Municipal Trial "(2) Exclusive original jurisdiction over cases of forcible
Courts and Municipal Circuit Trial Courts in Criminal Cases. – entry and unlawful detainer: Provided, That when, in
Except in cases falling within the exclusive original jurisdiction of such cases, the defendant raises the questions of
Regional Trial Courts and of the Sandiganbayan, the ownership in his pleadings and the question of
Metropolitan Trial Courts, Municipal Trial Courts, and Municipal possession cannot be resolved without deciding the
Circuit Trial Courts shall exercise: issue of ownership, the issue of ownership shall be
"(1) Exclusive original jurisdiction over all violations of city resolved only to determine the issue of possession; and
or municipal ordinances committed within their respective "(3) Exclusive original jurisdiction in all civil actions which
territorial jurisdiction; and involve title to, or possession of, real property, or any
"(2) Exclusive original jurisdiction over all offenses interest therein where the assessed value of the property
punishable with imprisonment not exceeding six (6) years or interest therein does not exceed Twenty thousand
irrespective of the amount of fine, and regardless of other pesos (P20,000.00) or, in civil actions in Metro Manila,
imposable accessory or other penalties, including the where such assessed value does not exceed Fifty
civil liability arising from such offenses or predicated thousand pesos (P50,000.00) exclusive of interest,
thereon, irrespective of kind, nature, value or amount damages of whatever kind, attorney's fees, litigation
thereof: Provided, however, That in offenses involving expenses and costs: Provided, That in cases of land not
damage to property through criminal negligence, they declared for taxation purposes, the value of such
shall have exclusive original jurisdiction thereof." property shall be determined by the assessed value of
Section 3. Section 33 of the same law is hereby amended to read as the adjacent lots."
follows: Section 4. Section 34 of the same law is hereby amended to read as
"Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial follows:
Courts and Municipal Circuit Trial Courts in Civil Cases. – "Sec. 34. Delegated Jurisdiction in Cadastral and Land
Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Registration Cases. – Metropolitan Trial Courts, Municipal Trial
Circuit Trial Courts shall exercise: Courts, and Municipal Circuit Trial Courts may be assigned by
the Supreme Court to hear and determine cadastral or land
! 45!
registration cases covering lots where there is no controversy or Pambansa Blg. 129 as amended by this Act, shall be adjusted to Two
opposition, or contested lots where the value of which does not hundred thousand pesos (P200,000.00). Five (5) years thereafter, such
exceed One hundred thousand pesos (P100,000.00), such value jurisdictional amounts shall be adjusted further to Three hundred
to be ascertained by the affidavit of the claimant or by agreement thousand pesos (P300,000.00): Provided, However, That in the case of
of the respective claimants if there are more than one, or from the Metro Manila, the abovementioned jurisdictional amounts shall be
corresponding tax declaration of the real property. Their adjusted after five (5) years from the effectivity of this Act to Four hundred
decisions in these cases shall be appealable in the same manner thousand pesos (P400,000.00)."
as decisions of the Regional Trial Courts." Section 8 of the same law states that "This Act shall take effect fifteen
Section 5. After five (5) years from the effectivity of this Act, the (15) days following its publication in the Official Gazette or in two (2)
jurisdictional amounts mentioned in Sec. 19(3), (4), and (8); and Sec. national newspaper of general circulation."
33(1) of Batas Pambansa Blg. 129 as amended by this Act, shall be Republic Act No. 7691 was published simultaneously in the 30 March
adjusted to Two hundred thousand pesos (P200,000.00). Five (5) years 1994 issues of the Philippine Journal and Malaya. The law took effect on
thereafter, such jurisdictional amounts shall be adjusted further to Three 15 April 1994.
hundred thousand pesos (P300,000.00): Provided, however, That in the Considering the provisions of Section 31, 5 Chapter 8, Book I of the 1987
case of Metro Manila, the abovementioned jurisdictional amounts shall be Administrative Code, Section 5 of R.A. No. 7691 took effect on 20 March
adjusted after five (5) years from the effectivity of this Act to Four hundred 1999.
thousand pesos (P400,000.00). For information and guidance.
Section 6. All laws, decrees, and orders inconsistent with the provisions (Sgd.) ALFREDO L. BENIPAYO
of this Act shall be considered amended or modified accordingly. Court Administrator
Section 7. The provisions of this Act shall apply to all civil cases that Footnotes
have not yet reached the pre-trial stage. However, by agreement of all the 1 Under Section 19 (3) of R.A. No. 7691, the Regional Trail Courts shall
parties, civil cases cognizable by municipal and metropolitan courts by exercise exclusive original jurisdiction. "In all actions in admiralty and
the provisions of this Act may be transferred from the Regional Trial maritime jurisdiction where the demand or claim exceeds One hundred
Courts to the latter. The executive judge of the appropriate Regional Trial thousand pesos (P100,000.00) or in Metro Manila, where such demand
Courts shall define the administrative procedure of transferring the cases or claim exceeds Two hundred thousand pesos (P200,000.00)."
affected by the redefinition of jurisdiction to the Metropolitan Trial Courts, 2 Under Section 19 (4) of R.A. No. 7691, the Regional Trail Courts shall
Municipal Trial Courts, and Municipal Circuit Trial Courts. exercise exclusive original jurisdiction. "In all matters of probate, both
Section 8. This Act shall take effect fifteen (15) days following its testate and intestate, where the gross value of the estate exceeds One
publication in the Official Gazette or in two (2) national newspapers of hundred thousand pesos (P1000,000.00) or, in probate matters in Metro
general circulation. Manila, where such gross value exceeds Two hundred thousand pesos
Approved: March 25, 1994 (P200,000.00)."
CIRCULAR NO. 21-99 April 15, 1999 3 Under Section 19 (8) of R.A. No. 7691, the Regional Trail Courts shall
TO: ALL JUDGES OF THE REGIONAL TRIAL COURTS, exercise exclusive original jurisdiction. "In all other cases in which the
THE METROPOLITAN TRIAL COURTS, THE demand, exclusive of interest, damages of whatever kind, attorney's fees,
MUNICIPAL TRIAL COURTS IN CITIES, THE litigation expenses, and costs or the value of the property in controversy
MUNICIPAL TRIAL COURTS AND THE MUNICIPAL exceeds One hundred thousand pesos (P100,000.00) or, in such other
CIRCUIT TRIAL COURTS. cases in Metro Manila, where the demand, exclusive of the
SUBJECT: EFFECTIVITY OF PROVISIONS OF abovementioned items, exceeds Two hundred thousand pesos
SECTION 5 REPUBLIC ACT NO. 7691 FURTHER (P200,000.00)."
INCREASING THE JURISDICTIONAL AMOUNTS 4 Under Section 33 (1) of R.A. No. 7691, the Metropolitan Trial Courts,
PRESCRIBED BY CERTAIN PROVISIONS OF BATAS the Municipal Trial Courts in Cities, the Municipal Trial Courts and the
PAMBANSA BLG. 129, AS AMENDED. Municipal Circuit Trial Courts shall exercise "Exclusive original jurisdiction
The provisions of Section 5 of Republic Act No. 7961 prescribe that "After over civil actions and probate proceedings, testate and intestate including
five years (5) from the effectivity of this Act, the jurisdictional amounts the grant of provisional remedies in proper cases, where the value of the
mentioned in Sec. 19(3), 1 (4), 2 and (8), 3 and Sec. 33(1), 4 of Batas personal property, estate or amount of the demand does not exceed One
! 46!
hundred thousand pesos (P100,000.00) or, in Metro Manila where such B. Criminal Cases:
personal property, estate, or amount of the demand does not exceed Two (1) Violations of traffic laws, rules and regulations;
hundred thousand pesos (P200,000.00), exclusive of interest, damages (2) Violations of the rental law;
or whatever kind, attorney's fees, litigation expenses, and costs, the (3) Violations of municipal or city ordinances;
amount of which must be specifically alleged: Provided, That interest, (4) All other criminal cases where the penalty prescribed by law for the
damages of whatever kind, attorney's fees, litigation expenses, and costs offense charged is imprisonment not exceeding six months, or a fine not
shall be included in the determination of the filing fees: Provided,further, exceeding (P1,000.00), or both, irrespective of other imposable penalties,
That where there are several claims or causes of action between the accessory or otherwise, or of the civil liability arising therefrom: Provided,
same or different parties embodied in the same complaint, the amount of however, that in offenses involving damage to property through criminal
the demand shall be the totality of the claims in all the causes of action, negligence, this Rule shall govern where the imposable fine does not
irrespective of whatever the cause of action arose out of the same or exceed ten thousand pesos (P10,000.00).
different transactions." This Rule shall not apply to a civil case where the plaintiffs cause of
5 Section 31 prescribes that "Year" shall be understood to be twelve action is pleaded in the same complaint with another cause of action
calendar months; "month" of thirty days, unless it refers to a specific subject to the ordinary procedure; nor to a criminal case where the
calendar month in which case it shall be computed according to the offense charged is necessarily related to another criminal case subject to
number of days the specific month contains; "day" to a day of twenty four the ordinary procedure.
hours; and night from sunset to sunrise. Sec. 2. Determination of applicability. — Upon the filing of a civil or
REVISED RULES ON SUMMARY PROCEDURE criminal action, the court shall issue an order declaring whether or not the
RESOLUTION OF THE COURT EN BANC DATED OCTOBER 15, 1991 case shall be governed by this Rule A patently erroneous determination
PROVIDING FOR THE REVISED RULE ON SUMMARY PROCEDURE to avoid the application of the Rule on Summary Procedure is a ground
FOR METROPOLITAN TRIAL COURTS, MUNICIPAL TRIAL COURTS for disciplinary action.
IN CITIES, MUNICIPAL TRIAL COURTS AND MUNICIPAL CIRCUIT
TRIAL COURTS. II.
Civil Cases
Pursuant to Section 36 of the Judiciary Reorganization Act of 1980 (B.P Sec. 3. Pleadings. —
Blg. 129) and to achieve an expeditious and inexpensive determination of A. Pleadings allowed. — The only pleadings allowed to be filed are the
the cases referred to herein, the Court Resolved to promulgate the complaints, compulsory counterclaims and cross-claims' pleaded in the
following Revised Rule on Summary Procedure: answer, and the answers thereto.
B. Verifications. — All pleadings shall be verified.
I. Applicability Sec. 4. Duty of court. — After the court determines that the case falls
under summary procedure, it may, from an examination of the allegations
Section 1. Scope. — This rule shall govern the summary procedure in therein and such evidence as may be attached thereto, dismiss the case
the Metropolitan Trial Courts, the Municipal Trial Courts in Cities, the outright on any of the grounds apparent therefrom for the dismissal of a
Municipal Trial Courts, and the Municipal Circuit Trial Courts in the civil action. If no ground for dismissal is found it shall forthwith issue
following cases falling within their jurisdiction: summons which shall state that the summary procedure under this Rule
shall apply. d-c
A. Civil Cases: Sec. 5. Answer. — Within ten (10) days from service of summons, the
(1) All cases of forcible entry and unlawful detainer, irrespective of the defendant shall file his answer to the complaint and serve a copy thereof
amount of damages or unpaid rentals sought to be recovered. Where on the plaintiff. Affirmative and negative defenses not pleaded therein
attorney's fees are awarded, the same shall not exceed twenty thousand shall be deemed waived, except for lack of jurisdiction over the subject
pesos (P20,000.00). matter. Cross-claims and compulsory counterclaims not asserted in the
(2) All other civil cases, except probate proceedings, where the total answer shall be considered barred. The answer to counterclaims or
amount of the plaintiff's claim does not exceed ten thousand pesos cross-claims shall be filed and served within ten (10) days from service of
(P10,000.00), exclusive of interest and costs. the answer in which they are pleaded.

! 47!
Sec. 6. Effect of failure to answer. — Should the defendant fail to However should the court find it necessary to clarify certain material facts,
answer the complaint within the period above provided, the court, motu it may, during the said period, issue an order specifying the matters to be
proprio, or on motion of the plaintiff, shall render judgment as may be clarified, and require the parties to submit affidavits or other evidence on
warranted by the facts alleged in the complaint and limited to what is the said matters within ten (10) days from receipt of said order. Judgment
prayed for therein: Provided, however, that the court may in its discretion shall be rendered within fifteen (15) days after the receipt of the last
reduce the amount of damages and attorney's fees claimed for being clarificatory affidavits, or the expiration of the period for filing the same.
excessive or otherwise unconscionable. This is without prejudice to the The court shall not resort to the clarificatory procedure to gain time for the
applicability of Section 4, Rule 15 of the Rules of Court, if there are two or rendition of the judgment.
more defendants.
Sec. 7. Preliminary conference; appearance of parties. — Not later than III.
thirty (30) days after the last answer is filed, a preliminary conference Criminal Cases
shall be held. The rules on pre-trial in ordinary cases shall be applicable Sec. 11. How commenced. — The filing of criminal cases falling within
to the preliminary conference unless inconsistent with the provisions of the scope of this Rule shall be either by complaint or by information:
this Rule. Provided, however, that in Metropolitan Manila and in Chartered Cities.
The failure of the plaintiff to appear in the preliminary conference shall be such cases shall be commenced only by information, except when the
a cause for the dismissal of his complaint. The defendant who appears in offense cannot be prosecuted de oficio.
the absence of the plaintiff shall be entitled to judgment on his The complaint or information shall be accompanied by the affidavits of the
counterclaim in accordance with Section 6 hereof. All cross-claims shall compliant and of his witnesses in such number of copies as there are
be dismissed. accused plus two (2) copies for the court's files.If this requirement is not
If a sole defendant shall fail to appear, the plaintiff shall be entitled to complied with within five (5) days from date of filing, the care may be
judgment in accordance with Section 6 hereof. This Rule shall not apply dismissed.
where one of two or more defendants sued under a common cause of Sec. 12. Duty of court. —
action who had pleaded a common defense shall appear at the (a) If commenced by compliant. — On the basis of the compliant and the
preliminary conference. affidavits and other evidence accompanying the same, the court may
Sec. 8. Record of preliminary conference. — Within five (5) days after dismiss the case outright for being patently without basis or merit and
the termination of the preliminary conference, the court shall issue an order the release of the amused if in custody.
order stating the matters taken up therein, including but not limited to: (b) If commenced by information. — When the case is commenced by
(a) Whether the parties have arrived at an amicable settlement, and if so, information, or is not dismissed pursuant to the next preceding
the terms thereof; paragraph, the court shall issue an order which, together with copies of
(b) The stipulations or admissions entered into by the parties;. the affidavits and other evidence submitted by the prosecution, shall
(c) Whether, on the basis of the pleadings and the stipulations and require the accused to submit his counter-affidavit and the affidavits of his
admissions made by the parties, judgment may be rendered without the witnesses as well as any evidence in his behalf, serving copies thereof on
need of further proceedings, in which event the judgment shall be the complainant or prosecutor not later than ten (10) days from receipt of
rendered within thirty (30) days from issuance of the order; said order. The prosecution may file reply affidavits within ten (10) days
(d) A clear specification of material facts which remain controverted; and after receipt of the counter-affidavits of the defense.
(e) Such other matters intended to expedite the disposition of the case. Sec. 13. Arraignment and trial. — Should the court, upon a
Sec. 9. Submission of affidavits and position papers. — Within ten (10) consideration of the complaint or information and the affidavits submitted
days from receipt of the order mentioned in the next preceding section, by both parties, find no cause or ground to hold the accused for trial, it
the parties shall submit the affidavits of their witnesses and other shall order the dismissal of the case; otherwise, the court shall set the
evidence on the factual issues defined in the order, together with their case for arraignment and trial.
position papers setting forth the law and the facts relied upon by them. If the accused is in custody for the crime charged, he shall be
Sec. 10. Rendition of judgment. — Within thirty (30) days after receipt of immediately arraigned and if he enters a plea of guilty, he shall forthwith
the last affidavits and position papers, or the expiration of the period for be sentenced.
filing the same, the court shall render judgment. Sec. 14. Preliminary conference. — Before conducting the trial, the court
shall call the parties to a preliminary conference during which a stipulation
! 48!
of facts may be entered into, or the propriety of allowing the accused to (a) Motion to dismiss the complaint or to quash the complaint or
enter a plea of guilty to a lesser offense may be considered, or such other information except on the ground of lack of jurisdiction over the subject
matters may be taken up to clarify the issues and to ensure a speedy matter, or failure to comply with the preceding section;
disposition of the case.However, no admission by the accused shall be (b) Motion for a bill of particulars;
used against him unless reduced to writing and signed by the accused (c) Motion for new trial, or for reconsideration of a judgment, or for
and his counsel. A refusal or failure to stipulate shall not prejudice the opening of trial;
accused. (d) Petition for relief from judgment;
Sec. 15. Procedure of trial. — At the trial, the affidavits submitted by the (e) Motion for extension of time to file pleadings, affidavits or any other
parties shall constitute the direct testimonies of the witnesses who paper;
executed the same. Witnesses who testified may be subjected to cross- (f) Memoranda;
examination, redirect or re-cross examination. Should the affiant fail to (g) Petition for certiorari, mandamus, or prohibition against any
testify, his affidavit shall not be considered as competent evidence for the interlocutory order issued by the court;
party presenting the affidavit, but the adverse party may utilize the same (h) Motion to declare the defendant in default;
for any admissible purpose. (i) Dilatory motions for postponement;
Except in rebuttal or surrebuttal, no witness shall be allowed to testify (j) Reply;
unless his affidavit was previously submitted to the court in accordance (k) Third party complaints;
with Section 12 hereof. (l) Interventions.
However, should a party desire to present additional affidavits or counter- Sec. 20. Affidavits. — The affidavits required to be submitted under this
affidavits as part of his direct evidence, he shall so manifest during the Rule shall state only facts of direct personal knowledge of the affiants
preliminary conference, stating the purpose thereof. If allowed by the which are admissible in evidence, and shall show their competence to
court, the additional affidavits of the prosecution or the counter-affidavits testify to the matters stated therein.
of the defense shall be submitted to the court and served on the adverse A violation of this requirement may subject the party or the counsel who
party not later than three (3) days after the termination of the preliminary submits the same to disciplinary action, and shall be cause to expunge
conference. If the additional affidavits are presented by the prosecution, the inadmissible affidavit or portion thereof from the record.
the accused may file his counter-affidavits and serve the same on the Sec. 21. Appeal. — The judgment or final order shall be appealable to
prosecution within three (3) days from such service. the appropriate regional trial court which shall decide the same in
Sec. 16. Arrest of accused. — The court shall not order the arrest of the accordance with Section 22 of Batas Pambansa Blg. 129. The decision of
accused except for failure to appear whenever required. Release of the the regional trial court in civil cases governed by this Rule, including
person arrested shall either be on bail or on recognizance by a forcible entry and unlawful detainer, shall be immediately executory,
responsible citizen acceptable to the court. without prejudice to a further appeal that may be taken therefrom.
Sec. 17. Judgment. — Where a trial has been conducted, the court shall Section 10 of Rule 70 shall be deemed repealed.
promulgate the judgment not later than thirty (30) days after the Sec. 22. Applicability of the regular rules. — The regular procedure
termination of trial. prescribed in the Rules of Court shall apply to the special cases herein
provided for in a suppletory capacity insofar as they are not inconsistent
IV. herewith.
COMMON PROVISIONS Sec. 23. Effectivity. — This revised Rule on Summary Procedure shall
Sec. 18. Referral to Lupon. — Cases requiring referral to the Lupon for be effective on November 15, 1991.
conciliation under the provisions of Presidential Decree No. 1508 where A. M. No. 08-8-7-SC : February 16, 2010
there is no showing of compliance with such requirement, shall be (Re: RULE OF PROCEDURE FOR SMALL CLAIMS CASES.)
dismissed without prejudice and may be revived only after such The Court Resolved, upon the recommendation of the Technical Working
requirement shall have been complied with. This provision shall not Group on the Small Claims Courts Pilot Project, to APPROVE the -
apply to criminal cases where the accused was arrested without a RESOLUTION
warrant. Sec. 19. Prohibited pleadings and motions. — The following (a) Amendment of Section 8(d), Rule 141 of the Revised Rules of
pleadings, motions or petitions shall not be allowed in the cases covered Court, with the addition of the following provision as regards filing
by this Rule: fees for frequent filers in small claims cases:
! 49!
For small claims cases, only those fees set forth in this 3. Before you fill up this Form, read these Instructions to
Rule, as amended, shall be collected. If more than ten know your rights. Or, you may inquire about your rights
(10) small claims are filed by one party in the court and the Small Claims Procedure with the Office of the
station within the calendar year, an additional filing fee Clerk of Court (OCC) of the place where you intend to file
of P500.00 shall be paid for every claim filed after the your claim.
tenth (10th) claim, and an additional P100.00 or a total (Bago mo sagutin ang form na ito basahin muna ang
of P600.00 for every claim filed after the twentieth (20th) mga tagubilin upang malaman ang iyong mga karapatan.
claim, and another P100.00 or a total of P700.00 for Maari ka ring magtanong, tungkol sa iyong mga
every claim filed after the thirtieth (30th) claim, and karapatan sa Office of the Clerk of Court [OCC] ng lugar
another P100.00 for every tenth additional case kung saan mo nais maghain ng reklamo ukol sa pagsingil
thereafter, progressively and cumulatively, but the total ng maliit na hlaga.)
filing fees shall not exceed P20, 000.00. In no case shall
a party pay filing fees of more than P20, 000.00 per claim 4. If your case falls under the Small Claims Rule, theses are
in a calendar year. the things you can do at home or in the barangay:
Each party filing a claim shall declare in the Statement of (Kung ang iyong kaso ay nasasaklaw ng Tuntunin sa
Claim the number of small claims cases that party filed in Pagsingil ng Maliliit ng Halaga, ang mga bagay na ito
the court station within the calendar year. ang maaari mong gawin sa bahay o sa barangay:)
(b) Addition of the following statement in the Statement of Claim a. GATHER ALL DOCUMENTS AND EVIDENCE PERTINENT
(Form SCC),particularly between Nos. 6 and 7 thereof: TO THE CLAIM.
6-A. In this court station, how many small claims cases (TIPUNIN ANG LAHAT NG DOKUMENTO AT MGA
have you filed within this year prior to this present cases? KATIBAYANG SSUSUPORTA SA IYONG PAGSINGIL.)
_________________ Examples are: (Mga Halimbawa nito:)
(Sa court station na ito, pang ilang kaso na itong - Contract/Agreement
isinampa mo sa loob ng kasalukuyang taon? (kontrata/Kasunduan)
_________________ ) - Promissory Note / Receipts / Affidavit of
(c) Two (2) Forms on Information for the Plaintiff (Form I-SCC- Witness/es /Other Important documents such as
Info and Information for the Defendant (Form 3-SCC-Info), to wit: Check/s or Picture/s
INFORMATION FOR THE PALINTIFF (Katibayan ng Pagkakautang / Resibo /
(the person filing the claim) Sinumpaang Salaysay ng mga Saksi / Testigo /
(Kaalaman para sa Naghahabla) iba pang dokumento tulad ng Tseke at larawan.)
1. "SMALL CLAIMS RULE" - is a special procedure where b. LATEST DEMAND LETTER (if ANY). ITS PROOF OF
money claims for P100,00.00 or less are heard. The SERVICE AND PROOF OF RECEIPT
process is quick and inexpensive; the procedure is (PINAKAHULING LIHAM NG PANININGIL [KUNG MERON],
simple and informal. KATIBAYAN NG PAGPADALA AT PAGKATANGGAP NITO.)
(TUNTUNIN SA PAGSINGIL NG MALILIIT NA HALAGA c. CERTIFICATE TO FILE ACTION FROM THE BARANGAY, IF
- ay natatanging pamamaraan sa pagdinig kung saan NECESSARY
ang halagang salapi na sinisingil ay P100,000.00 o mas (KATUNAYAN NG PAGSASAMPA NG KASO SA HUKUMAN
mababa. Ang proseso ay simple at hindi pormal.) GALING SA BARANGAY, KUNG KINAKAILANGAN.)
d. SPECIAL POWER OF ATTORNEY IN CASE PALINTIFF
2. You are the plaintiff. The person you are filing the case HEARING.
against is the defendant. (NATATANGING GAWAD-KAPANGYARIHAN o "SPECIAL
(Ikaw ang Naghahabla. Ang taong siyang sinampahan ng POWER OF ATTORNEY" KUNG ANG NAGHAHABLA AY HINDI
kaso ang Hinabla. MAKADALO SA PAGDINIG.)
e. SECRETARY'S CERTIFICATE OR BOARD RESOLUTION
AUTHORIZING YOU TO FILE THE CASE, IF YOU ARE
! 50!
REPRESENTING A CORPORATION, PARTNERSHIP, (Kailangan ang Form at lahat ng kalakip na dokumento, lalong higit ang
COOPERATIVE OR ASSOCIATION. Form ng Patotoo ay pinatunayan / ninotaryo ng Clerk of Court [OCC] o
(PATUNAY NG KALIHIM O RESOLUSYON NG LUPON NA Branch Clerk of Court.)
NAGPAPAHINTULOT SA IYONG KUMATAWAN SA LUPON SA · Pay the filing fee. (except if your motion to sue as an indigent has been
PAG SAMPA NG KASO.) granted)
f. if you are unable to pay the filing fees because you have no (Magbayad ng bayarin sa pagtala [maliban kung ang iyong kahilingan na
adequate financial means, you may file the case as an indigent makapagsampa ng kaso bilang isang taong walang sapat na kabuhayan
by getting FORM 6-SCC AND ATTACHING THE FOLLOWING ay napagtibay na.])
DOCUMENTS:chanrobles virtual law library · Get the date and time of your hearing from the court to which your case
Affidavit of indigency was assigned.
Barangay Certificate of indigency [Alamin ang araw at oras ng pagdinig sa hukuman kung saan ang iyong
City or Municipal Assessor's Certificate kaso ay nakahabilin.]
City or Municipal Treasurer's Office Certificate · GO TO THE COURT ON YOUR HEARING DATE. Bring the originals of
Affidavit of 2 disinterested persons all certified documentary evidence attached to your Form 1-SCC to prove
(Kung hindi mo mabayaran ang filing fees dahil wala kang sapat your case.
na kakayahang pinansyal, maari kang magsampa ng kaso bilang [PUMUNTA SA HUKUMAN SA PETSA AT ARAW NG PAGDINIG. Dalhin
isang taong walang sapat na kabuhayan sa pamamagitan ng ang mga orihinal ng lahat ng dokumento ng katibayan, higit lalo yaong
pagsagot ng Form 6-SCC KALAKIPANG MGA SUMUSUNOD kalakip sa iyong Form 1-SCC para patunayan ang iyong kaso.]
NA DOKUMENTO: · YOU CANNOT HAVE A LAWYER AT THE HEARING. You may consult
Sinumpaang Salaysay na Walang Sapat ng Kabuhayan a lawyer before or after the hearing but the lawyer cannot appear for or
Patunay ng Barangay na Walang Sapat na Kabuhayan with you at the hearing.
Patunay ng Panglungsod na Tagatasa (assessor) (HUWAG KANG MAGSAMA NG ABOGADO SA PAGDINIG. Maari kang
Patunay ng Tanggapan ng Panglungsod na Ingat-Yaman makipag-usap o kumonsulta sa abogado bago o pagkatapos ng pagdinig
Sinumpaang Salaysay ng 2 Taong Hindi Interesado) pero ang abogado ay hindi pinahihintulutang dumalo para sa iyo sa
· Fill up Form 1-SCC. Attach to the Form your supporting documents and pagdinig.)
affidavits of witnesses. o If you are representing a corporation, partnership, cooperative or
(Punuan ang Form 1-SCC. Ilakip sa Form ang iyong mga dokumento at association, you must bring your original written authority to
sinumpaang salaysay ng mga testigo / saksi.) appear at the hearing and to enter into an amicable settlement, to
o Make copies of ALL pages of this form and your supporting submit to alternative modes of dispute resolution, and to enter
documents (file the original in court, make a copy for each into stipulations or admissions of facts and of documents.
plaintiff or defendant named in the case and an extra copy for (Kung iyong kinakatawan ay korporasyon, bakasan, kooperatiba
yourself). o asosayon / Samahan, kinakailangang magdala ka ng orihinal
(Gumawa nng lahat ng pahina ng Form na ito at ng iyong mga na gawad-kapangyarihan na dumalo sa pagdinig at para sa
dokumento [ihain ang orihinal sa hukuman, gumawa ng kopya mapayapang pag-aayos, sumailalim sa alternatibong paraan ng
para sa bawat Naghahabla o Hinahabla sa kaso at karagdagang pag-aayos o gumawa ng pag-amin o makipagyari sa mga
kopya para sa iyo.]) pangyayari at dokumento.)
o If the original documents consist of records that could not be · You must be aware that upon the filing of this case, the judge may
separated, you can photocopy the pertinent document and have dismiss your claim if she or he finds legal grounds for dismissal such as
it certified by the Clerk of Court in the OCC as a faithful lack of jurisdiction over the subject matter, improper venue, etc. as
reproduction of the original. enumerated in Section 1 of Rule 16 of the 1997 Rules of Civil Procedure.
(Kung ang orihinal na dokumento ay di maihiwalay, maari mong (Binibigyan ka ng babala na sa pagsampa ng kaso, maaring
ipakopya ito at ipacertify sa Clerk of Court ng OCC na ang maipawalang-saysay ng hukuman ang iyong kaso kung nakita niya na
dokumento ay totoo at tapat na kopya ng orihinal) mayroong legal na batayan para maipawalang-saysay ito, tulad ng
· Have the form and all your supporting documents, especially the kawalan ng kapangyarihan sa bagay ng kaso, hindi wasto ang lugar na
Verification form, notarized by the Clerk of Court in the OCC.
! 51!
pinagsampahan ng kaso, etc. na isinasaad sa Section 1, Rule 16, 1997 The judge will speak in Filipino or the local dialect. A court-
Rules of Civil Procedure.) provided interpreter shall also be available on the hearing day.
(Ang hukom ay magsasalita sa Filipino o sa lokal na diyalekto.
Ang panghukumang tagasalin ay maaaring magamit sa araw ng
INFORMATION FOR THE DEFENDANT pagdinig.)
(the person against whom the case is filed) 8. How do I get ready for court?
(Kaalaman para sa Hinahabla) (Paano ako makapaghahanda sa hukuman?)
1. "SMALL CLAIMS RULE" - is a special procedure where money Fill up the form entitled "Response" and file it in court within ten
claims for P100,000.00 or less are heard. The process is quick (10) calendar days from your receipt of the form. If you have
and inexpensive; the procedure is simple & informal. questions regarding the Form, you can inquire with the court that
(TUNTUNIN SA PAGSINGIL NG MALILIIT NA HALAGA - ay served you the summons & the Response. The telephone no. of
natatanging pamamaraan sa pagdinig kung saan ang halaga ng the court is written on the Summons.
salapi na sinisingil ay P100,000.00 o mas mababa. Ang proseso (Punuan ang Form na "Sagot" at ihain ito sa hukuman sa loob ng
ay simple at hindi pormal) sampung (10) araw simula sa pagtanggap ng Form. Kung ikaw
2. You are the defendant - the person against whom the case is ay mayroong mga tanong tungkol sa Form, maaari kang
filed. The person who is filing the case is the plaintiff. magtanong sa korte na nagpadala ng Patawag at ng Sagot. Ang
(Ikaw ang Hinahabla, ang taong sinampahan ng kaso. Ang taong numero ng telepono ng hukuman ay nakasulat sa Patawag.)
nagsampa ng kaso ay ang Naghahabla.) 9. What happen if I don't file the Response and appear at the
3. Read this form & all pages attached to understand the claim hearing?
against you & to protect your rights. (Anong mangyayari kung hindi ako naghain ng Sagot at
(Basahin ang Form na ito at ang lahat ng pahina na kalakip hindi dumalo sa pagdinig?)
upang maunawaan ang kaso laban sa iyo at upang The court shall proceed with the hearing and, if you are absent,
mapangalagaan ang iyong mga karapatan.) the court shall make a judgment as may be warranted by the
4. You must file your Response & attend the hearing on the date facts.
indicated in the Notice of Hearing. If you do not go to court, you (Ang korte ay magpapatuloy sa pagdinig at, kung ikaw ay hindi
may lose the case. dumalo, ay magpapasiya at magbibigay ng desisyon ayon sa
(Ikaw ay kinakailangang magsumite ng iyong Sagot at pumunta nararapat.)
sa korte sa petsa ng pagdinig na nakasulat sa Abiso sa Pagdinig. 10. What happens at the hearing?
Kung hindi ka makakapunta sa korte maari kang matalo sa kaso.) (Anong mangyayari sa pagdinig?)
5. Make copies of the Response & all its pages & attached If you & the plaintiff will appear at the hearing, the judge will listen
documents (file the original in court & serve one copy on each to both of you. The judge shall conduct mediation and encourage
plaintiff & keep an extra copy for yourself) you & the plaintiff to settle your case. If you don't settle, the judge
(Gumawa ng mga kopya ng Sagot at lahat ng mga pahina nito at shall render a decision on the day of hearing itself. You cannot
ilakip ang mga dokumento [ihain ang orihinal sa hukuman at appeal this decision.
bigyan ng kopya ang Naghahabla at mag-iwan ng kopya para sa (Kung ikaw at ang naghahabla ay dadalo sa pagdinig, ang hukom
iyo]). ay makikinig sa inyong dalawa. Ang hukom ay hihikayat sa
6. Do I need a lawyer? inyong magka-ayos at magkasundo at lutasin ang inyong di
(Kailangan ko ba ang abogado?) pagkakaunawaan. Kung hindi kayo magkakasundo, ang hukom
You may consult a lawyer but YOU CANNOT HAVE A LAWYER ay gagawa ng desisyon sa araw mismo ng pagdinig. Hindi ka na
WITH YOU AT THE HEARING. maaaring mag-apela sa desisyon ng korte.)
(Maaari kang komunsulta sa abogado pero HINDI KA 11. Do I have options?
MAAARING MAGSAMA NG ABOGADO SA PAGDINIG.) (Meron ba akong pagpipilian?)
7. What if I don't speak English well? Yes. If you are the defendant, you can do any of the following:
(Paano kung hindi ako makagsalitang mabuti ng Ingles?) (Oo. Kung ikaw ang Hinahabla, maaari mong gawin ang alinman
sa mga sumusunod.)
! 52!
o Settle your case before the hearing. If you and the the Judges, but also of the court personnel involved in the application of
plaintiff agree on how to settle the case, both of you must the Rule on Small Claims.
notify the court. Ask the OCC or Branch Clerk of Court A. Guidelines for Judges
for help. 1. Upon receipt of a case, determine if it is a small claim.
(Ayusin mo ang usapin bago pa dumating ang pagdinig. 1.1. It must involve a pure money claim the principal
Kung ikaw at ang Naghahabla ay nagkaayos kung paano amount of which does not exceed P100,000.00.
pagkasunduan ang kaso, pareho ninyong ipaalam sa 1.2. If the principal claim exceeds P100,000.00, there
hukuman. Humingi ng tulong sa Office of the Clerk of must be a waiver of the excess embodied in the
Court (OCC) o sa Branch Clerk of Court.) Statement of Claim.
o File the Response. Appear at the hearing. Bring the 1.3. With regard to B.P. Blg. 22 cases, the court may only
affidavits of witnesses, receipts and any evidence you entertain the civil aspect as a small claim if no complaint
need to prove your case. for the offense has yet been filed before the Office of the
(Maghain ng Sagot. Dumalo sa pagdinig. Dalhin ang mga Prosecutor. This fact must be stated under oath by the
sinumpaang salaysay ng mga testigo, mga resibo at plaintiff in the Statement of Claim, and there should be
anumang katibayang iyong kailangan upang patunayan an express waiver of such criminal action in the
ang iyong usapin.) Verification and Certification of Non-Forum Shopping.
o Agree with the plaintiff's claim & pay the money. Or, if 1.4. If a case is determined by a judge to be not a "small
you can't pay the money now go to the hearing and say claim" within the meaning of the Rule, but it still falls
you want to make payments by installment. within the jurisdiction of the First Level Courts, the case
(Sumang-ayon sa halagang sinisingil ng Naghahabla at should not be dismissed, and the judge should instead
bayaran ito. O, kung hindi mabayaran ang sinisingil declare it governed by the appropriate procedure
ngayon, dumalo ka sa pagdinig at sabihin sa korte na (Regular Procedure or Summary Procedure). The case
gusto mong magbayad ng hulugan.) should then be re-docketed but no re-assignment (by
o Let the case proceed without you. If you don't settle & do raffle in a multi-sala court) is necessary. This will prevent
not go to the hearing, the judge may give the plaintiff the forfeiture of the filing fees already paid by the party,
what he or she is asking for plus court costs. If this and the case can be immediately acted upon by the
happens, the court may order that your money or same court.
property be taken to pay the judgment. 2. Determine if there is a ground for outright dismissal.
(Magpapatuloy ang kaso kahit wala ka. Kung hindi ka The submission of a Certificate to File Action from the
nakipag-ayos at hindi ka dumalo sa pagdinig, maaaring barangay is a pre-requisite in Small Claims covered by
ipagkaloob ng hukom ang anumang hinihingi ng the barangay justice system.
Naghahabla, pati na ang gastos sa paghain ng kasong Under Rule 16 par. (j) of the 1997 Rules of Civil
ito. Kung ito ay mangyari, ang korte ay maaaring mag- Procedure, non-compliance with a condition precedent is
utos na ang iyong pera o ari-arian ay kuhanin para a ground for dismissal of a complaint. Chapter VII
bayaran ang nakasaad sa desisyon ng korte.) (Section 399-422) of R.A. No. 7160, the Local
(c) Administrative Guidelines for (a) Judges and (b) Government Code, now embodies the rules for
Executive Judges, Clerk of Courts in multi-sala stations mandatory conciliation proceedings before the barangay
and in single-sala stations and Branch Clerks of Courts, in covered cases. Although the Rule on Small Claims
to wit: Cases does not expressly refer to such requirement, it is
still mandatory as it is required by law. Non-compliance,
therefore, with the barangay requirement is still a ground
ADMINISTRATIVE GUIDELINES for dismissal pursuant to Rule 16 of the regular rules,
To aid in achieving a uniform and systematic implementation of the Rule which apply suppletorily according to Section 25 of the
by all courts concerned, the TWG recommends the issuance of Rule.
Administrative Guidelines specifically addressing the concerns of not only
! 53!
3. If there is no ground for outright dismissal, issue summons AND required judgment, to be issued also within the same
notice hearing day. It will also reduce the incidence of inclusion of terms
3.1. The summons and notice of hearing, which are which are contrary to law, morals, good customs, public
required to be issued "within the same day of receipt of policy and public order.
the Statement of Claim" under Section 10, must be 4.4. Have a template of a Compromise Agreement ready.
issued within 24 hors from such receipt, the phrase The parties may be referred to the Branch Clerk of Court
"same day" to be construed as "within one day". or the Clerk-in-Charge for assistance in filing up the
3.2. Do not wait for summons to be served before setting template, whether before or after the case is called in
the case for hearing. open court.
3.3. The hearing should be set within thirty (30) days 4.5. In all instances, review the terms of the Compromise
from receipt of the case. In case the defendant resides Agreement submitted by the parties. Do not approve
outside the judicial region, the hearing may be set not terms which are unconscionable and excessive,
later than 60 days from date of receipt of the case. especially those relating to interest rates and surcharges.
3.4. Failure of the plaintiff to cause service of summons In the latter instance, in your judgment approve the
within two (2) months from receipt of Sheriff's Return agreement in part, substitute and impose a provision
shall cause the dismissal of the claim for failure to which is reasonable, to replace those you have
prosecute (Rule 17, Section 3, Rules of Court). This is disapproved for being excessive and unconscionable.
not a ground to archive the case. 4.6. In case a non-answering defendant appears at the
3.5. Any party who appears at any time after the Court's hearing, recognize his appearance only if he is willing to
receipt of the case should be notified immediately of the enter into discussions of settlement, but guard against
date set for hearing. coercing the defendant to enter into one.
3.6. There should be, at least, one (1) hearing day every 4.7. If a non-answering defendant appears at the hearing
week devoted to Small Claims, with a minimum of five (5) and agrees to discuss a settlement but pleads partial
cases scheduled per hearing day. Cases with the same payments, which the plaintiff admits, but no settlement is
party-plaintiff may all be set on the same date for facility ultimately reached, render judgment based on the
in the preparation of notices and judgments. The Court Statement of Claim. If the plaintiff waives in writing (even
should post a notice of its small claims hearing day in the Minutes of Hearing only) the confidentiality of the
conspicuously at the Branch and at the Office of the settlement discussion, you may consider the admission
Clerk Court. of partial payments in rendering your decision.
3.7. Judges must approve an Estimate of Expenses 4.8. If at anytime before or at the hearing, a Compromise
submitted by their Sheriff/Process Server within 24 hours Agreement is submitted signed by both parties but only
from filing before any release from the STF is allowed. one or neither party appears to confirm it, issue an order
4. On the date of the hearing to the non-appearing party to confirm it within 3 days,
4.1. Make an opening statement (Section 20; see also otherwise it shall be deemed confirmed. Then issue a
Form 6A-SCC) explaining to the parties the object of the judgment based on the agreement.
Rule and the procedure for hearing the case. Ensure that 4.9. If no settlement is reached and the parties do not
the parties understand the proceedings and actively wish to have another judge hear the case, proceed to the
participate therein. hearing proper in an informal manner and terminate and
4.2. Conduct settlement discussions in strict decide it within the same day.
confidentiality. Try to explain to the parties why an 5. Decision and execution
amicable settlement will be mutually beneficial. 5.1. Whether based on an amicable settlement or on the
4.3. The drafting of a comprise agreement should be part merits, judgment must be issued on the same date of the
of the hearing conducted by the judge. This will ensure hearing, except when there is a motion by any party
that an agreement will be forged within the day of the under Section 22 to have another judge hear the case.
hearing to pave the way for its approval by way of the
! 54!
5.2. Upon issuance of the decision, have copies served 9. The Clerks of Court should ensure that the full names and
on all parties present to avoid mailing them. addresses of the parties are indicated in the Statement of Claim,
5.3. A decision under the Rule is immediately final and as well as alternative contact information (such as telephone
executor. It must be recorded in the Book of Judgments numbers), when possible.
on the same date it is rendered. 10. The Monthly Docket Inventory Report should reflect the date
5.4. There is no appeal and, hence, no period to appeal when a case is decided or disposed of vis-à-vis the date of filing
to wait for. so that the timeless of court action may be assessed. The date
5.5. On the same day the decision is rendered, the when summons was issued and the date of hearing should also
winning party may move for its execution. be indicated. Finally, the execution and satisfaction of judgments
B. Guidelines for Executive Judges, Clerks of Courts (COCs) in multi rendered under the Rule should also be part of the Monthly
1
sala stations and in single sala stations and Branch Clerks of Court Report to determine the Rule's efficacy.
(BCCs) 11. The rule on inhibition in regular cases shall apply to Small Claims
1. The Clerks of Court and the Branch Clerks of Court (even non- Courts.
lawyers) may administer the oath to litigants for the forms to be 12. An additional fee of P500.00 should be assessed any litigant for
used under the Rule. No fee shall be collected for this purpose. the 10th small claim filed, and for every 5th additional case
2. The Clerks of Court should not accept mere photocopies of thereafter. The fee is justified by the service availed of which
documentary annexes submitted by the parties but should requires extra time and effort on the part of the courts. The
monitor strict compliance with Sections 5 and 11 of the Rule. volume of cases filed evidences the capacity of the litigant to pay
3. The Clerks of Court should have a separate docket for Small the fees.
Claims Cases with independent numbering. Should a case, 13. On the same day of filing/raffling of the Statement of Claim, the
originally docketed as a Small Claim, be ordered re-docketed, Clerk of Court shall transmit the record of the case to the branch
i.e., it is governed by the Rule on Summary Procedure or regular assigned. The Branch Clerk of Court (BCOC) shall forthwith
procedure, this should be recorded in the appropriate docket and inform the plaintiff of the date of hearing of the case.
a new number given to the case. However, the case should not 14. Upon receipt of a newly filed/raffled small claim, in case the
be re-raffled but should immediately be sent back to the original Presiding Judge is on leave, the BCOC shall immediately refer
court after re-docketing. the case to the Pairing Judge for appropriate action in
4. The Clerks of Court should only ask for 2 copies of the pleadings accordance with existing Rules.
and all their annexes: 1 for the court and 1 for the defendant. If 15. Sheriffs and Process Servers shall serve the summons and
there is more than 1 defendant, that is the only time the OCC notice of hearing within 5 days from issuance, unless the
may require additional copies, 1 for each additional defendant. distance justifies a longer period, but in no case shall service be
5. The Clerks of Court can only certify photocopies of documents if effected beyond 30 days from date of issuance. Within 5 days
the originals are presented to them by the party who does not from such service, the Officer's Return shall be filed with the
want to leave the same with the court. In that instance, the COC court with a copy furnished to the plaintiff at the given address/es
can certify that the document is a faithful reproduction of the of record.
original exhibited by the party. No fee shall be charged for this and
certification. (d) Nationwide implementation/roll-out of the Rule on Procedure for Small
6. If, despite advice to the contrary, a litigant insists on the filing of a Claims Cases, as amended, to all first level courts, except the Shari'a
vase as a Small Claim, the COC should reiterate the previous Circuit Court, effective thirty (30) days from date hereof.
advice given in a respectful manner and then docket the case. Let this resolution be published in a newspaper of general circulation."
7. Even despite insistence, COCs should not accept a Statement of (adv102)
Claim signed by a lawyer unless the lawyer himself is the plaintiff, G.R. No. 184203 November 26, 2014
not even if he signs it as an attorney-in-fact of the named plaintiff. CITY OF LAPU-LAPU, Petitioner,
8. Requests for advances for transportation expenses from the vs.
Sheriff's Trust Fund should be acted upon within 24 hours from PHILIPPINE ECONOMIC ZONE AUTHORITY, Respondent.
receipt of the approved Statement of Estimated Expenses. x-----------------------x
! 55!
G.R. No. 187583 Section 21. Non-profit Character of the Authority; Exemption from Taxes.
PROVINCE OF BATAAN, represented by GOVERNOR ENRIQUE T. The Authority shall be non-profit and shall devote and use all its returns
GARCIA, JR., and EMERLINDA S. TALENTO, in her capacity as from its capital investment, as well as excess revenues from its
Provincial Treasurer of Bataan, Petitioners, operations, for the development, improvement and maintenance and
vs. other related expenditures of the Authority to pay its indebtedness and
PHILIPPINE ECONOMIC ZONE AUTHORITY, Respondent. obligations and in furtherance and effective implementation of the policy
DECISION enunciated in Section 1 of this Decree. In consonance therewith, the
LEONEN, J.: Authority is hereby declared exempt:
The Philippine Economic Zone Authority is exempt from payment of real ....
property taxes. (b) From all income taxes, franchise taxes, realty taxes and all other kinds
1
These are consolidated petitions for review on certiorari the City of Lapu- of taxes and licenses to be paid to the National Government, its
Lapu and the Province of Bataan separately filed against the Philippine provinces, cities, municipalities and other government agenciesand
Economic Zone Authority (PEZA). instrumentalities[.]
In G.R. No. 184203, the City of Lapu-Lapu (the City) assails the Court of In 1979, President Marcos issued Proclamation No. 1811, establishing
2 3
Appeals’ decision dated January 11, 2008 and resolution dated August the Mactan Export Processing Zone. Certain parcels of land of the public
6, 2008, dismissing the City’s appeal for being the wrong mode of appeal. domain located in the City of Lapu-Lapuin Mactan, Cebu were reserved
The City appealed the Regional Trial Court,Branch 111, Pasay City’s to serve as site of the Mactan Export Processing Zone.
decision finding the PEZA exempt from payment of real property taxes. In 1995, the PEZA was created by virtue of Republic Act No. 7916 or "the
13
In G.R. No. 187583, the Province of Bataan (the Province) assails the Special Economic Zone Act of 1995" to operate, administer, manage,
4 5 14
Court of Appeals’ decision dated August 27, 2008 and resolution dated and develop economic zones in the country. The PEZA was granted the
April 16, 2009, granting the PEZA’s petition for certiorari. The Court of power to register, regulate, and supervise the enterprises located in the
15
Appeals ruled that the Regional Trial Court, Branch 115, Pasay City economic zones. By virtue of the law, the export processing zone in
16
gravely abused its discretion in finding the PEZA liable for real property Mariveles, Bataan became the Bataan Economic Zone and the Mactan
17
taxes to the Province of Bataan. Export Processing Zone the Mactan Economic Zone.
Facts common to the consolidated petitions As for the EPZA, the law required it to "evolve into the PEZA in
6
In the exercise of his legislative powers, President Ferdinand E. Marcos accordance with the guidelines and regulations set forth in an executive
18
issued Presidential Decree No. 66 in 1972, declaring as government order issued for [the] purpose."
policy the establishment of export processing zones in strategic locations On October 30, 1995, President Fidel V. Ramos issued Executive Order
in the Philippines. Presidential Decree No. 66 aimed "to encourage and No. 282, directing the PEZA to assume and exercise all of the EPZA’s
promote foreign commerce as a means of making the Philippines a powers, functions, and responsibilities "as provided in Presidential
center of international trade, of strengthening our export trade and foreign Decree No. 66, as amended, insofar as they are not inconsistent with the
exchange position, of hastening industrialization,of reducing domestic powers, functions, and responsibilities of the PEZA, as mandated under
7 19
unemployment, and of accelerating the development of the country." [the Special Economic Zone Act of 1995]." All of EPZA’s properties,
To carry out this policy, the Export Processing Zone Authority (EPZA) equipment, and assets, among others, were ordered transferred to the
20
was created to operate, administer, and manage the export processing PEZA.
8
zones established in the Port of Mariveles, Bataan and such other export Facts of G.R. No. 184203
9 21
processing zones that may be created by virtue of the decree. In the letter dated March 25, 1998, the City of Lapu-Lapu, through the
10
The decree declared the EPZA non-profit in character with all its Office of the Treasurer, demanded from the PEZA 32,912,350.08 in real
revenues devoted to its development, improvement, and property taxes for the period from 1992 to 1998 on the PEZA’s properties
11
maintenance. To maintain this non-profit character, the EPZA was located in the Mactan Economic Zone.
22
declared exempt from all taxes that may be due to the Republic of the The City reiterated its demand in the letter dated May 21, 1998. It cited
Philippines, its provinces, cities, municipalities, and other government Sections 193 and 234 of the Local Government Code of 1991 that
12
agencies and instrumentalities. Specifically, Section 21 of Presidential withdrew the real property tax exemptions previously granted to or
Decree No. 66 declared the EPZA exempt from payment of real property presently enjoyed by all persons. The City pointed out that no provision in
taxes: the Special Economic Zone Act of 1995 specifically exempted the PEZA
! 56!
from payment of real property taxes, unlike Section 21 of Presidential special economic zones created under the Special Economic ZoneAct of
Decree No. 66 that explicitly provided for EPZA’s exemption. Since no 1995.
legal provision explicitly exempted the PEZA from payment of real Since these benefits include exemption from payment of national or local
property taxes, the City argued that it can tax the PEZA. taxes, these benefits apply to special economic zones owned by the
23
The City made subsequent demands on the PEZA. In its last PEZA.
24
reminder dated May 13, 2002, the City assessed the PEZA According to the trial court, the PEZA remained tax-exempt regardless of
86,843,503.48 as real property taxes for the period from 1992 to 2002. Section 24 of the Special Economic Zone Act of 1995. It ruled that
On September 11, 2002, the PEZAfiled a petition for declaratory Section 24, which taxes real property owned by developers of economic
25
Relief with the Regional Trial Court of Pasay City, praying that the trial zones, only applies to private developers of economic zones, not to public
court declare it exempt from payment ofreal property taxes. The case was developers like the PEZA. The PEZA, therefore, is not liable for real
raffled to Branch 111. property taxes on the land it owns.
26
The City answered the petition, maintaining that the PEZA is liable for Characterizing the PEZA as an agency of the National Government, the
real property taxes. To support its argument, the City cited a legal opinion trial court ruled that the City had no authority to tax the PEZA under
27
dated September 6, 1999 issued by the Department of Justice, which Sections 133(o) and 234(a) of the Local Government Code of 1991.
32
stated that the PEZA is not exempt from payment of real property taxes. In the resolution dated June 14, 2006, the trial court granted the PEZA’s
The Department of Justice based its opinion on Sections 193 and 234 of petition for declaratory relief and declared it exempt from payment of real
the Local Government Code that withdrew the tax exemptions, including property taxes.
33
real property tax exemptions, previously granted to all persons. The City filed a motion for reconsideration, which the trial court denied
28 29 34
A reply was filed by the PEZA to which the City filed a rejoinder. in its resolution dated September 26, 2006.
30 35
Pursuant to Rule 63, Section 3 of Rules of Court, the Office of the The City then appealed to the Court of Appeals.
31
Solicitor General filed a comment on the PEZA’s petition for declaratory The Court of Appeals noted the following issues the City raised in its
relief. It agreed that the PEZA is exempt from payment of real property appellant’s brief: (1) whether the trial court had jurisdiction over the
taxes, citing Sections 24 and 51 of the Special Economic Zone Act of PEZA’s petition for declaratory relief; (2) whether the PEZA is a
1995. government agency performing governmental functions; and (3) whether
The trial court agreed with the Solicitor General. Section 24 of the Special the PEZA is exempt from payment of real property taxes.
Economic Zone Act of 1995 provides: The issues presented by the City, according to the Court of Appeals, are
SEC. 24. Exemption from National and Local Taxes. – Except for real pure questions of law which should have been raised in a petition for
property taxes on land owned by developers, no taxes, local and national, review on certiorari directly filed before this court. Since the City availed
shall be imposed on business establishments operating within the itself of the wrong mode of appeal, the Court of Appeals dismissed the
36
ECOZONE. In lieu thereof, five percent (5%) of the gross income earned City’s appeal in the decision dated January 11, 2008.
by all business enterprises within the ECOZONE shall be paid and The City filed a motion for extension of time to file a motion for
37
remitted as follows: reconsideration, which the Court of Appeals denied in the
38
a. Three percent (3%) to the National Government; resolution dated April 11, 2008.
b. Two percent (2%) which shall be directly remitted by the Despite the denial of its motion for extension, the City filed a motion for
39 40
business establishments to the treasurer’s office of the reconsideration. In the resolution dated August 6, 2008, the Court of
municipality or city where the enterprise is located. Appeals denied that motion.
41
Section 51 of the law, on the other hand, provides: In its petition for review on certiorari with this court, the City argues that
42
SEC. 51. Ipso-Facto Clause. – All privileges, benefits, advantages or the Court of Appeals "hid under the skirts of technical rules" in resolving
exemptions granted to special economic zones under Republic Act No. its appeal. The City maintains that its appeal involved mixed questions of
7227, shall ipso-facto be accorded to special economic zones already fact and law. According to the City, whether the PEZA performed
created or to be created under this Act. The free port status shall not be governmental functions "cannot completely be addressed by law but [by]
43
vested upon new special economic zones. the factual and actual activities [the PEZA is] carrying out."
Based on Section 51, the trial court held that all privileges, benefits, Even assuming that the petition involves pure questions of law, the City
advantages, or exemptions granted tospecial economic zones created contends that the subject matter of the case "is of extreme importance
under the Bases Conversion and Development Act of 1992 apply to with [far-reaching] consequence that [its magnitude] would surely shape
! 57!
44
and determine the course ofour nation’s future." The Court of Appeals, After the City of Lapu-Lapu had demanded payment of real property
the City argues, should have resolved the case on the merits. taxes from the PEZA, the Province of Bataan followed suit. In its
55
The City insists that the trial court had no jurisdiction to hear the PEZA’s letter dated May 29, 2003, the Province, through the Office of the
petition for declaratory relief. According to the City, the case involves real Provincial Treasurer, informed the PEZA that it would be sending a real
property located in the City of Lapu-Lapu. The petition for declaratory property tax billing to the PEZA. Arguing that the PEZA is a developer of
relief should have been filed before the Regional Trial Court of the City of economic zones, the Province claimed that the PEZA is liable for real
45
Lapu-Lapu. property taxes under Section 24 of the Special Economic Zone Act of
Moreover, the Province of Bataan, the City of Baguio, and the Province of 1995.
56
Cavite allegedly demanded real property taxes from the PEZA. The City In its reply letter dated June 18, 2003, the PEZA requested the Province
argues that the PEZA should have likewise impleaded these local to suspend the service of the real property tax billing. It cited its petition
government units as respondents in its petition for declaratory relief. For for declaratory relief against the City of Lapu-Lapu pending before the
its failure to do so, the PEZA violated Rule 63, Section 2 of the Rules of Regional Trial Court, Branch 111, Pasay City as basis.
46
Court, and the trial court should have dismissed the petition. The Province argued that serving a real property tax billing on the PEZA
This court ordered the PEZA to comment on the City’s petition for review "would not in any way affect [its] petition for declaratory relief before [the
47 57 58
on certiorari. Regional Trial Court] of Pasay City." Thus, in its letter dated June 27,
At the outset of its comment, the PEZA argues that the Court of Appeals’ 2003, the Province notified the PEZAof its real property tax liabilities for
decision dated January 11, 2008 had become final and executory. After June 1, 1995 to December 31, 2002 totalling ₱110,549,032.55.
the Court of Appeals had denied the City’s appeal, the City filed a motion After having been served a tax billing, the PEZA again requested the
for extension of time to file a motion for reconsideration. Arguing that the Province to suspend collecting its alleged real property tax liabilities until
time to file a motion for reconsideration is not extendible, the PEZA filed the Regional Trial Court of Pasay Cityresolves its petition for declaratory
59
its motion for reconsideration out of time. The Cityhas no more right to relief.
48
appeal to this court. The Province ignored the PEZA’s request. On January 20, 2004, the
The PEZA maintains that the City availed itself of the wrong mode of Province served on the PEZA a statement of unpaid real property tax for
60
appeal before the Court of Appeals. Since the City raised pure questions the period from June 1995 to December 2004.
of law in its appeal, the PEZA argues that the proper remedy is a petition The PEZA again requested the Province to suspend collecting its alleged
61 62
for review on certiorari with this court, not an ordinary appeal before the real property taxes. The Province denied the request in its letter dated
63
appellate court. The Court of Appeals, therefore, correctly dismissed January 29, 2004, then servedon the PEZA a warrant of levy covering
outright the City’s appeal under Rule 50, Section 2 of the Rules of the PEZA’s real properties located in Mariveles, Bataan.
49 64
Court. The PEZA’s subsequent requests for suspension of collection were all
65
On the merits, the PEZA argues that it is an agency and instrumentality of denied by the Province. The Province then served on the PEZA a notice
66
the National Government. It is therefore exempt from payment of real of delinquency in the payment of real property taxes and a notice of sale
67
property taxes under Sections 133(o) and 234(a) of the Local of real property for unpaid real property tax. The Province finally sent
50
Government Code. It adds that the tax privileges under Sections 24 and the PEZA a notice of public auction of the latter’s properties in Mariveles,
51 68
51 of the Special Economic Zone Act of 1995 applied to it. Bataan.
69
Considering that the site of the Mactan Economic Zoneis a reserved land On June 14, 2004, the PEZA filed a petition for injunction with prayer for
under Proclamation No. 1811, the PEZA claims that the properties sought issuance of a temporary restraining order and/or writ of preliminary
to be taxed are lands of public dominion exempt from real property injunction before the Regional Trial Court of Pasay City, arguing that it is
52
taxes. exempt from payment ofreal property taxes. It added that the notice of
As to the jurisdiction issue, the PEZA counters that the Regional Trial sale issued by the Province was void because it was not published in a
Court of Pasay had jurisdiction to hear its petition for declaratory relief newspaper ofgeneral circulation asrequired by Section 260 of the Local
70
under Rule 63, Section 1 of the Rules of Court.[53]] It also argued that it Government Code.
need not implead the Province of Bataan, the City of Baguio, and the The case was raffled to Branch 115.
71
Province of Cavite as respondents considering that their demands came In its order dated June 18, 2004, the trial court issued a temporary
54
after the PEZA had already filed the petition in court. restraining order against the Province. After the PEZA had filed a
72
Facts of G.R. No. 187583 ₱100,000.00 bond, the trial court issued a writ of preliminary
! 58!
73
injunction, enjoining the Province from selling the PEZA’s real Province argued for the first time that the Court of Appeals had no
properties at public auction. jurisdiction over the subject matter of the action.
On March 3, 2006, the PEZA and Province both manifested that each According to the Province, the PEZA erred in filing a petition for certiorari.
would file a memorandum after which the case would be deemed Arguing that the PEZA sought to reverse a Regional Trial Court decision
submitted for decision. The parties then filed their respective in a local tax case, the Province claimed that the court with appellate
74
memoranda. jurisdiction over the action is the Court of Tax Appeals. The PEZA then
75
In the order dated January 31, 2007, the trial court denied the PEZA’s prayed that the Court of Appeals dismiss the petition for certiorari for lack
petition for injunction. The trial court ruled that the PEZA is not exempt of jurisdiction over the subject matter of the action.
from payment of real property taxes. According to the trial court, Sections The Court of Appeals held that the issue before it was whether the trial
193 and 234 of the Local Government Code had withdrawn the real court judge gravely abused his discretion in dismissing the PEZA’s
property tax exemptions previously granted to all persons, whether petition for prohibition. This issue, according to the Court of Appeals, is
76
natural or juridical. As to the tax exemptions under Section 51 of the properly addressed in a petition for certiorari over which it has jurisdiction
Special Economic Zone Act of 1995, the trial court ruled that the provision to resolve. It, therefore, maintained jurisdiction to resolve the PEZA’s
88
only applies to businesses operating within the economic zones, not to petition for certiorari.
77
the PEZA. Although it admitted that appeal, not certiorari, was the PEZA’s proper
78 89
The PEZA filed before the Court of Appeals a petition for certiorari with remedy to reverse the trial court’s decision, the Court of Appeals
prayer for issuance of a temporary restraining order. proceeded to decide the petition for certiorari in "the broader interest of
90
The Court of Appeals issued a temporary restraining order, enjoining the justice."
Province and its Provincial Treasurer from selling PEZA's properties at The Court of Appeals ruled that the trial court judge gravely abused his
79
public auction scheduled on October 17, 2007. It also ordered the discretion in dismissing the PEZA’s petition for prohibition. It held that
Province to comment on the PEZA’s petition. Section 21 of Presidential Decree No. 66 and Section 51 of the Special
80
In its comment, the Province alleged that it received a copy of the Economic Zone Act of 1995 granted the PEZA exemption from payment
91
temporary restraining order only on October 18, 2007 when it had already of real property taxes. Based on the criteria set in Manila International
92
sold the PEZA’s properties at public auction. Arguing that the act sought Airport Authority v. Court of Appeals, the Court of Appeals found that
to be enjoined was already fait accompli, the Province prayed for the the PEZA is an instrumentality of the national government. No taxes,
93
dismissal of the petition for certiorari. therefore, could be levied on it by local government units.
94
The PEZA then filed a supplemental petition for certiorari, prohibition, and In the decision dated August 27, 2008, the Court of Appeals granted the
81
mandamus against the Province, arguing that the Provincial Treasurer PEZA’s petition for certiorari. It set aside the trial court’s decision and
of Bataan acted with grave abuse of discretion in issuing the notice of nullified all the Province’s proceedings with respect to the collection of
delinquency and notice of sale. It maintained that it is exempt from real property taxes from the PEZA.
95
payment of real property taxes because it is a government The Province filed a motion for reconsideration, which the Court of
96
instrumentality. It added that its lands are property of public dominion Appeals denied in the resolution dated April 16, 2009 for lack of merit.
97
which cannot be sold at public auction. In its petition for review on certiorari with this court, the Province of
82
The PEZA also filed a motion for issuance of an order affirming the Bataan insists that the Court of Appeals had no jurisdiction to take
temporary restraining order and a writ of preliminary injunction to enjoin cognizance of the PEZA’s petition for certiorari. The Province maintains
the Province from consolidating title over the PEZA’s properties. that the Court of Tax Appeals had jurisdiction to hear the PEZA’s petition
83 98
In its resolution dated January 16, 2008,the Court of Appeals admitted since it involved a local tax case decided by a Regional Trial Court.
the supplemental petition for certiorari, prohibition, and mandamus. It The Province reiterates that the PEZA is not exempt from payment of real
required the Province to comment on the supplemental petition and to file property taxes. The Province points out that the EPZA, the PEZA’s
a memorandum on the PEZA’s prayer for issuance of temporary predecessor, had to be categorically exempted from payment of real
restraining order. property taxes. The EPZA, therefore, was not inherently exempt from
84
The Province commented on the PEZA’s supplemental petition, to payment of real property taxes and so is the PEZA. Since Congress
85
which the PEZA replied. omitted from the Special Economic Zone Act of 1995 a provision
86
The Province then filed a motion for leave to admit attached rejoinder specifically exempting the PEZA from payment of real property taxes, the
87
with motion to dismiss. In the rejoinder with motion to dismiss, the Province argues that the PEZA is a taxable entity. It cited the rule in
! 59!
statutory construction that provisions omitted in revised statutes are The third mode is through an appealby certiorari before this court under
99 108
deemed repealed. Rule 45 where only questions of law shall be raised.
With respect to Sections 24 and 51 of the Special Economic Zone Act of A question of fact exists when there is doubt as to the truth or falsity of
109
1995 granting tax exemptions and benefits, the Province argues that the alleged facts. On the other hand, there is a question of law if the
110
these provisions only apply to business establishments operating within appeal raises doubt as to the applicable law on a certain set of facts.
100
special economic zones, not to the PEZA. Under Rule 50, Section 2, an improper appeal before the Court of
This court ordered the PEZA tocomment on the Province’s petition for Appeals is dismissed outright and shall not be referred to the proper
101 102
review on certiorari. In its comment, the PEZA argues that the Court court:
of Appeals had jurisdiction to hear its petition for certiorari since the issue SEC. 2. Dismissal of improper appeal to the Court of Appeals. – An
was whether the trial court committed grave abuse of discretion in appeal under Rule 41 taken from the Regional Trial Court to the Court of
denying its petition for injunction. The PEZA maintains thatit is exempt Appeals raising only questions of law shall be dismissed, issues purely of
from payment of real property taxes under Section 21 of Presidential law not being reviewable by said court. Similarly, an appeal by notice of
Decree No. 66 and Section 51 of the Special Economic Zone Act of 1995. appeal instead of by petition for review from the appellate judgment of a
103
The Province filed its reply, reiterating its arguments in its petition for Regional Trial Court shall be dismissed.
104
review on certiorari. On the PEZA’s motion, this court consolidated the An appeal erroneously taken to the Court of Appeals shall not be
105
petitions filed by the City of Lapu-Lapu and the Province of Bataan. transferred to the appropriate court but shall be dismissed outright.
The issues for our resolution are the following: Rule 50, Section 2 repealed Rule 50, Section 3 of the 1964 Rules of
I. Whether the Court of Appeals erred in dismissing the City of Court, which provided that improper appeals to the Court of Appeals shall
Lapu-Lapu’s appeal for raising pure questions of law; not be dismissed but shall be certified to the proper court for resolution:
II. Whether the Regional Trial Court, Branch 111, Pasay City had Sec. 3. Where appealed case erroneously, brought. — Where the
jurisdiction to hear, try, and decide the City of Lapu-Lapu’s appealed case has been erroneously brought to the Court of Appeals, it
petition for declaratory relief; shall not dismiss the appeal, but shall certify the case to the proper court,
III. Whether the petition for injunction filed before the Regional with a specific and clear statement of the grounds therefor.
Trial Court, Branch 115, Pasay City, is a local tax case With respect to appeals by certiorari directly filed before this court but
appealable to the Court of Tax Appeals; and which raise questions of fact, paragraph 4(b) of Circular No. 2-90 dated
IV. Whether the PEZA is exempt from payment of real property March 9, 1990 states that this court "retains the option, in the exercise of
taxes. its sound discretion and considering the attendant circumstances, either
We deny the consolidated petitions. itself to take cognizance of and decide such issues or to refer them to the
I. Court of Appeals for determination." In Indoyon, Jr. v. Court of
111
The Court of Appeals did not err in Appeals, we said that this court "cannot tolerate ignorance of the law
112
dismissing the City of Lapu-Lapu’s on appeals." It is not this court’s task to determine for litigants their
113
appeal for raising pure questions of law proper remedies under the Rules.
Under the Rules of Court, there are three modes of appeal from Regional We agree that the City availed itself of the wrong mode of appeal before
Trial Court decisions. The first mode is through an ordinary appeal before the Court of Appeals. The City raised pure questions of law in its appeal.
the Court of Appeals where the decision assailed was rendered in the The issue of whether the Regional Trial Court of Pasay had jurisdiction
exercise of the Regional Trial Court’s original jurisdiction. Ordinary over the PEZA’s petition for declaratory relief is a question of law,
114
appeals are governed by Rule 41, Sections 3 to 13 of the Rules of Court. jurisdiction being a matter of law. The issue of whether the PEZA is a
In ordinary appeals, questions of fact or mixed questions of fact and law government instrumentality exempt from payment of real property taxes is
106
may be raised. likewise a question of law since this question is resolved by examining
The second mode is through a petition for review before the Court of the provisions of the PEZA’s charter as well as other laws relating to the
115
Appeals where the decision assailed was rendered by the Regional Trial PEZA.
Court in the exercise of its appellate jurisdiction. Rule 42 of the Rules of The Court of Appeals, therefore, did not err in dismissing the City’s
Court governs petitions for review before the Court of Appeals. In appeal pursuant to Rule 50, Section 2 of the Rules of Court.
petitions for review under Rule 42, questions of fact, of law, or mixed
107
questions of fact and law may be raised.
! 60!
Nevertheless, considering the important questions involved in this case, question of construction or validity arising, and for a declaration of his
we take cognizance of the City’s petition for review on certiorari in the rights or duties, thereunder.
interest of justice. An action for reformation of an instrument, to quiet title to real property or
116
In Municipality of Pateros v. The Honorable Court of Appeals, the remove clouds therefrom, or to consolidate ownership under Article 1607
Municipality of Pateros filed an appeal under Rule 42 before the Court of of the Civil Code, may be brought under this Rule.
Appeals, which the Court of Appeals denied outright for raising pure The court with jurisdiction over petitions for declaratory relief is the
questions of law. This court agreed that the Municipality of Pateros Regional Trial Court, the subject matter of litigation in an action for
117 121
"committed a procedural infraction" and should have directly filed a declaratory relief being incapable of pecuniary estimation. Section 19
petition for review on certiorari before this court. Nevertheless, "in the of the Judiciary Reorganization Act of 1980 provides:
118
interest of justice and in order to write finisto [the] controversy," this SEC. 19. Jurisdiction in Civil Cases. – Regional Trial Courts shall
119
court "opt[ed] to relax the rules" and proceeded to decide the case. exercise exclusive original jurisdiction:
This court said: (1) In all civil actions in which the subject of litigation is incapable of
While it is true that rules of procedure are intended to promote rather than pecuniary estimation[.]
frustrate the ends of justice, and while the swift unclogging of the dockets Consistent with the law, the Rules state that a petition for declaratory
122
of the courts is a laudable objective, it nevertheless must not be met at relief is filed "in the appropriate Regional Trial Court."
the expense of substantial justice. A special civil action for declaratory relief is filed for a judicial
The Court has allowed some meritorious cases to proceed despite determination of any question of construction or validity arising from, and
inherent procedural defects and lapses. Thisis in keeping with the for a declaration of rights and duties, under any of the following subject
principle that rules of procedure are mere tools designed to facilitate the matters: a deed, will, contract or other written instrument, statute,
attainment of justice, and that strict and rigid application ofrules which executive order or regulation, ordinance, orany other governmental
123
should result in technicalities that tend to frustrate rather than promote regulation. However, a declaratory judgment may issue only if there
124
substantial justice must always be avoided. It is a far better and more has been "no breach of the documents in question." If the contract or
prudent cause of action for the court to excuse a technical lapse and statute subject matter of the action has already been breached, the
125
afford the parties a review of the case to attain the ends of justice, rather appropriate ordinary civil action must be filed. If adequate relief is
than dispose of the case on technicality and cause grave injustice to the available through another form of action or proceeding, the other action
126
parties, giving a false impression of speedy disposal of cases while must be preferred over an action for declaratory relief.
120 127
actually resulting in more delay, if not a miscarriage of justice. In Ollada v. Central Bank of the Philippines, the Central Bank issued
Similar to Municipality of Pateros, we opt to relax the rules in this case. CB-IED Form No. 5 requiring certified public accountants to submit an
The PEZA operates or otherwise administers special economic zones all accreditation under oath before they were allowed to certify financial
over the country. Resolving the substantive issue of whether the PEZA is statements submitted to the bank. Among those financial statements the
taxable for real property taxes will clarify the taxing powers of all local Central Bank disallowed were those certified by accountant Felipe B.
128
government units where special economic zones are operated. This case, Ollada. Claiming that the requirement "restrained the legitimate pursuit
129
therefore, should be decided on the merits. of one’s trade,"
II. Ollada filed a petition for declaratory relief against the Central Bank.
The Regional Trial Court of Pasay had no This court ordered the dismissal of Ollada’s petition "without prejudice to
130
jurisdiction to hear, try, and decide the [his] seeking relief in another appropriate action." According to this
PEZA’s petition for declaratory relief court, Ollada’s right had already been violated when the Central Bank
against the City of Lapu-Lapu refused to accept the financial statements he prepared. Since there was
Rule 63 of the Rules of Court governs actions for declaratory relief. already a breach, a petition for declaratory relief was not proper. Ollada
131
Section 1 of Rule 63 provides: must pursue the "appropriate ordinary civil action or proceeding." This
SECTION 1. Who may file petition. – Any person interested under a court explained:
deed, will, contract or other written instrument, or whose rights are Petitioner commenced this action as, and clearly intended it to be one for
affected by a statute, executive order or regulation, ordinance, or any Declaratory Relief under the provisions of Rule 66 of the Rules of Court.
other governmental regulation may, before breach or violation, thereof, On the question of when a special civil action of this nature would
bring an action in the appropriate Regional Trial Court to determine any prosper, we have already held that the complaint for declaratory relief will
! 61!
not prosper if filed after a contract, statute or right has been breached or Such premise is highly speculative and merely theoretical, to say the
violated. In the present case such is precisely the situation arising from least. Clearly, it does not suffice to constitute a justiciable controversy.
the facts alleged in the petition for declaratory relief. As vigorously The Petition does not even allege any indication or manifest intent on the
claimed by petitioner himself, respondent had already invaded or violated part of any of the respondents below to champion an electoral candidate,
his right and caused him injury — all these giving him a complete cause or to urge their so-called flock to vote for, or not to vote for, a particular
of action enforceable in an appropriate ordinary civil action or proceeding. candidate. It is a time-honored rule that sheer speculation does not give
The dismissal of the action was, therefore, proper in the lightof our ruling rise to an actionable right.
in De Borja vs. Villadolid, 47 O.G. (5) p. 2315, and Samson vs. Andal, Obviously, there is no factual allegation that SJS’ rights are being
G.R. No. L-3439, July 31, 1951, where we held that an action for subjected to any threatened, imminent and inevitable violation that should
declaratory relief should be filed before there has been a breach of a be prevented by the declaratory relief sought. The judicial power and duty
contract, statutes or right, and that it is sufficient tobar such action, that of the courts to settle actual controversies involving rights that are legally
there had been a breach — which would constitute actionable violation. demandable and enforceable cannot be exercised when there is no
The rule is that an action for Declaratory Relief is proper only if adequate actual or threatened violation of a legal right.
relief is not available through the means of other existing forms of action All that the 5-page SJS Petition prayed for was "that the question raised
132
or proceeding (1 C.J.S. 1027-1028). in paragraph 9 hereof be resolved." In other words, it merely sought an
It is also required that the parties to the action for declaratory relief be opinion of the trial court on whether the speculated acts of religious
those whose rights or interests are affected by the contract or statute in leaders endorsing elective candidates for political offices violated the
133
question. "There must be an actual justiciable controversy or the constitutional principle on the separation of church and state. SJS did not
134
‘ripening seeds’ of one" between the parties. The issue between the ask for a declaration of its rights and duties; neither did it pray for the
135
parties "must be ripe for judicial determination." An action for stoppage of any threatened violation of its declared rights. Courts,
141
declaratory relief based on theoreticalor hypothetical questions cannot be however, are proscribed from rendering an advisory opinion. In sum, a
136
filed for our courts are not advisory courts. petition for declaratory relief must satisfy six requisites:
137
In Republic v. Roque, this court dismissed respondents’ petition for [F]irst, the subject matter of the controversy must be a deed, will, contract
declaratory relief for lack of justiciable controversy. According to this or other written instrument, statute, executive order or regulation, or
court, "[the respondents’] fear of prospective prosecution [under the ordinance; second, the terms of said documents and the validity thereof
Human Security Act] was solely based on remarks of certain government are doubtful and require judicial construction; third, there must have been
138
officials which were addressed to the general public." no breach of the documents in question; fourth, there must be an actual
139
In Velarde v. Social Justice Society, this court refused to resolve the justiciable controversy or the "ripening seeds" of one between persons
issue of "whether or not [a religious leader’s endorsement] of a candidate whose interests are adverse; fifth, the issue must be ripe for judicial
for elective office or in urging or requiring the members of his flock to vote determination; and sixth, adequate relief is not available through other
142
for a specific candidate is violative [of the separation means or other forms of action or proceeding. (Emphases omitted)
140
clause]." According to the court, there was no justiciable controversy We rule that the PEZA erred in availing itself of a petition for declaratory
and ordered the dismissal of the Social Justice Society’s petition for relief against the City. The City had already issued demand letters and
declaratory relief. This court explained: Indeed, SJS merely speculated or real property tax assessment against the PEZA, in violation of the PEZA’s
anticipated without factual moorings that, as religious leaders, the alleged tax-exempt status under its charter. The Special Economic Zone
petitioner and his co-respondents below had endorsed or threatened to Act of 1995, the subject matter of PEZA’s petition for declaratory relief,
endorse a candidate or candidates for elective offices; and that such had already been breached. The trial court, therefore, had no jurisdiction
actual or threatened endorsement "will enable [them] to elect men to over the petition for declaratory relief. There are several aspects of
143
public office who [would] in turn be forever beholden to their leaders, jurisdiction. Jurisdiction over the subject matter is "the power to hear
enabling them to control the government"[;] and "pos[ing] a clear and and determine cases of the general class to which the proceedings in
144
present danger ofserious erosion of the people’s faith in the electoral question belong." It is conferred by law, which may either be the
145
process[;] and reinforc[ing] their belief that religious leaders determine the Constitution or a statute. Jurisdiction over the subject matter means
146
ultimate result of elections," which would then be violative of the "the nature of the cause of action and the relief sought." Thus, the
separation clause. cause of action and character of the relief sought as alleged in the
complaint are examinedto determine whether a court had jurisdiction over
! 62!
147
the subject matter. Any decision rendered by a court without The trial court should have dismissed the PEZA’s petition for declaratory
148
jurisdiction over the subjectmatter of the action is void. relief for lack of jurisdiction.
Another aspect of jurisdiction is jurisdiction over the person. It is "the Once an assessment has already been issued by the assessor, the
power of [a] court to render a personal judgment or to subject the parties proper remedy of a taxpayer depends on whether the assessment was
in a particular action to the judgment and other rulings rendered in the erroneous or illegal.
149
action." A court automatically acquires jurisdiction over the person of An erroneous assessment "presupposes that the taxpayer is subject to
150 159
the plaintiff upon the filing of the initiatory pleading. With respect to the the tax but is disputing the correctness of the amount assessed." With
defendant, voluntary appearance in court or a valid service of summons an erroneous assessment, the taxpayer claims that the local assessor
vests the court with jurisdiction over the defendant’s erred in determining any of the items for computing the real property tax,
151
person. Jurisdiction over the person of the defendant is indispensable i.e., the value of the real property or the portion thereof subject to tax and
in actions in personamor those actions based on a party’s personal the proper assessment levels. In case of an erroneous assessment, the
152
liability. The proceedings in an action in personamare void if the court taxpayer must exhaust the administrative remedies provided under the
153
had no jurisdiction over the person of the defendant. Local Government Code before resorting to judicial action.
Jurisdiction over the resor the thing under litigation is acquired either "by The taxpayer must first pay the realproperty tax under protest. Section
the seizure of the property under legal process, whereby it is brought into 252 of the Local Government Code provides:
actual custody of the law; or asa result of the institution of legal SECTION 252. Payment Under Protest. -(a) No protest shall be
proceedings, in which the power of the court is recognized and made entertained unless the taxpayer first paysthe tax. There shall be
154
effective." Jurisdiction over the res is necessary in actions in remor annotated on the tax receipts the words "paid under protest". The protest
those actions "directed against the thing or property or status of a person in writing must be filed within thirty (30) days from payment of the tax to
and seek judgments with respect thereto as against the whole the provincial, city treasurer or municipal treasurer, in the case of a
155
world." The proceedings in an action in rem are void if the court had no municipality within Metropolitan Manila Area, who shall decide the protest
156
jurisdiction over the thing under litigation. within sixty (60) days from receipt.
In the present case, the Regional Trial Court had no jurisdiction over the (b) The tax or a portion thereof paidunder protest, shall be held in
subject matter of the action, specifically, over the remedy sought. As this trust by the treasurer concerned.
157
court explained in Malana v. Tappa: (c) In the event that the protest is finally decided in favor of the
. . . an action for declaratory relief presupposes that there has been no taxpayer, the amount or portion of the tax protested shall be
actual breach of the instruments involved or of rights arising thereunder. refunded to the protestant, or applied as tax credit against his
Since the purpose of an action for declaratory relief is to secure an existing or future tax liability.
authoritative statement of the rights and obligations of the parties under a (d) In the event that the protest is denied or upon the lapse of the
statute, deed, or contract for their guidance in the enforcement thereof, or sixty day period prescribed in subparagraph (a), the taxpayer
compliance therewith, and not to settle issues arising from an alleged may avail of the remedies as provided for in Chapter 3, Title II,
breach thereof, it may be entertained only before the breach or violation Book II of this Code.
of the statute, deed, or contract to which it refers. A petition for Should the taxpayer find the action on the protest unsatisfactory, the
declaratory relief gives a practical remedy for ending controversies that taxpayer may appeal with the Local Board of Assessment Appeals within
have not reached the state where another relief is immediately available; 60 days from receipt of the decision on the protest:
and supplies the need for a form of action that will set controversies at SECTION 226. Local Board of Assessment Appeals. - Any owner or
rest before they lead to a repudiation of obligations, an invasion of rights, person having legal interest in the property who is not satisfied with the
and a commission of wrongs. action of the provincial, city or municipal assessor in the assessment of
Where the law or contract has already been contravened prior to the filing his property may, within sixty (60) days from the date of receipt of the
of an action for declaratory relief, the courts can no longer assume written notice of assessment, appeal to the Board of Assessment Appeals
jurisdiction over the action. In other words, a court has no more of the provincial or city by filing a petition under oath in the form
jurisdiction over an action for declaratory relief if its subject has already prescribed for the purpose, together with copies of the tax declarations
been infringed or transgressed before the institution of the and such affidavits or documents submitted in support of the appeal.
158
action. (Emphasis supplied) Payment under protest and appeal to the Local Board of Assessment
Appeals are "successive administrative remedies to a taxpayer who
! 63!
160
questions the correctness of an assessment." The Local Board This court ruled that the assessmentwas illegal for having been issued
Assessment Appeals shall not entertain an appeal "without the action of without authority of the Municipal Assessor. Reconciling provisions of the
161
the local assessor" on the protest. Real Property Tax Code and the Local Government Code, this court held
If the taxpayer is still unsatisfied after appealing with the Local Board of that the schedule of market valuesmust be jointly prepared by the
Assessment Appeals, the taxpayer may appeal with the Central Board of provincial, city, and municipal assessors of the municipalities within the
Assessment Appeals within 30 days from receipt of the Local Board’s Metropolitan Manila Area.
decision: As to the issue of exhaustion of administrative remedies, this court held
SECTION 229. Action by the Local Board of Assessment Appeals. - (a) that Ty did not err in directly resorting to judicial action. According to this
The Board shall decide the appeal within one hundred twenty (120) days court, payment under protest is required only "where there is a question
164
from the date of receipt of such appeal. The Board, after hearing, shall as to the reasonableness of the amount assessed." As to appeals
render its decision based on substantial evidence or such relevant before the Local and Central Board of Assessment Appeals, they are
165
evidence on record as a reasonable mind might accept as adequate to "fruitful only where questions of fact are involved."
support the conclusion. (b) In the exercise ofits appellate jurisdiction, the Ty raised the issue of the legality of the notice of assessment, an issue
Board shall have the power to summon witnesses, administer oaths, that did not go into the reasonableness of the amount assessed. Neither
conduct ocular inspection, take depositions, and issue subpoena and did the issue involve a question of fact. Ty raised a question of law and,
subpoena duces tecum. The proceedings of the Board shall be therefore, need not resort to the administrative remedies provided under
conducted solely for the purpose of ascertaining the facts without the Local Government Code.
necessarily adhering to technical rules applicable in judicial proceedings. In the present case, the PEZA did not avail itself of any of the remedies
(c) The secretary of the Board shall furnish the owner of the property or against a notice of assessment. A petition for declaratory relief is not the
the person having legal interest therein and the provincial or city assessor proper remedy once a notice of assessment was already issued.
with a copy of the decision of the Board. In case the provincial or city Instead of a petition for declaratory relief, the PEZA should have directly
assessor concurs in the revision or the assessment, it shall be his duty to resorted to a judicial action. The PEZA should have filed a complaint for
166
notify the owner of the property or the person having legal interest therein injunction, the "appropriate ordinary civil action" to enjoin the City from
of such factusing the form prescribed for the purpose. The owner of the enforcing its demand and collecting the assessed taxes from the PEZA.
property or the person having legal interest therein or the assessor who is After all, a declaratory judgment as to the PEZA’s tax-exempt status is
not satisfied with the decision of the Board, may, within thirty (30) days useless unless the City isenjoined from enforcing its demand.
after receipt of the decision of said Board, appeal to the Central Board of Injunction "is a judicial writ, process or proceeding whereby a party is
167
Assessment Appeals, as herein provided. The decision of the Central ordered to do or refrain from doing a certain act." "It may be the main
Board shall be final and executory. (Emphasis supplied) action or merely a provisional remedy for and as incident in the main
168
On the other hand, an assessment is illegal if it was made without action." The essential requisites of a writ of injunction are: "(1) there
162
authority under the law. In case of an illegal assessment, the taxpayer must be a right in esseor the existence of a right to be protected; and (2)
may directly resort to judicial action without paying under protest the the act against which the injunction is directed to constitute a violation of
169
assessed tax and filing an appeal with the Local and Central Board of such right."
Assessment Appeals. We note, however, that the City confused the concepts of jurisdiction and
163
In Ty v. Trampe, the Municipal Assessor of Pasig sent Alejandro B. Ty venue in contending that the Regional Trial Court of Pasay had no
a notice of assessment with respect to Ty’s real properties in Pasig. jurisdiction because the real properties involved in this case are located in
Without resorting to the administrative remedies under the Local the City of Lapu-Lapu.
Government Code, Ty filed before the Regional Trial Court a petition, On the one hand, jurisdiction is "the power to hear and determine cases
praying that the trial court nullify the notice of assessment. In assessing of the general class to which the proceedings in question
170 171
the real property taxes due, the Municipal Assessor used a schedule of belong." Jurisdiction is a matter of substantive law. Thus, an action
market values solely prepared by him. This, Ty argued, was void for may be filed only with the court or tribunal where the Constitution or a
172
being contrary to the Local Government Code requiring that the schedule statute says it can be brought. Objections to jurisdiction cannot be
of market values be jointly prepared by the provincial, city, and municipal waived and may be brought at any stage of the proceedings, even on
173
assessors of the municipalities within the Metropolitan Manila Area. appeal. When a case is filed with a court which has no jurisdiction over
174
the action, the court shall motu propriodismiss the case.
! 64!
188
On the other hand, venue is "the place of trial or geographical location in fully informed," was originally a remedy in the common law. This court
which an action or proceeding should be brought." 175 In civil cases, discussed the history of the remedy of certiorari in Spouses Delos Santos
176 189
venue is a matter of procedural law. A party’s objections to venue must v. Metropolitan Bank and Trust Company:
be brought at the earliest opportunity either in a motion to dismiss or in In the common law, from which the remedy of certiorari evolved, the writ
177
the answer; otherwise the objection shall be deemed waived. When the of certiorari was issued out of Chancery, or the King’s Bench,
venue of a civil action is improperly laid, the court cannot motu commanding agents or officers of the inferior courts to return the record
178
propriodismiss the case. of a cause pending before them, so as to give the party more sure and
The venue of an action depends on whether the action is a real or speedy justice, for the writ would enable the superior court to determine
personal action. Should the action affect title to or possession of real froman inspection of the record whether the inferior court’s judgment was
property, or interest therein, it is a real action. The action should be filed rendered without authority. The errors were of such a nature that, if
in the proper court which has jurisdiction over the area wherein the real allowed to stand, they would result in a substantial injury to the petitioner
179
property involved, or a portion thereof, is situated. If the action is a to whom no other remedy was available. If the inferior court acted without
personal action, the action shall be filed with the proper court where the authority, the record was then revised and corrected in matters of law.
plaintiff or any of the principal plaintiffs resides, or where the defendant or The writ of certiorari was limited to cases in which the inferior court was
any of the principal defendants resides, or in the case of a non-resident said to be exceeding its jurisdiction or was not proceeding according to
180
defendant where he may be found, at the election of the plaintiff. essential requirements of law and would lie only to review judicial or
190
The City was objecting to the venue of the action, not to the jurisdiction of quasi-judicial acts.
the Regional Trial Court of Pasay. In essence, the City was contending In our jurisdiction, the term "certiorari" is used in two ways. An appeal
that the PEZA’s petition is a real action as it affects title to or possession before this court raising pure questions of law is commenced by filing a
of real property, and, therefore, the PEZA should have filed the petition petition for reviewon certiorari under Rule 45 of the Rules of Court. An
with the Regional Trial Court of Lapu-Lapu City where the real properties appeal by certiorari, which continues the proceedings commenced before
191
are located. However, whatever objections the City has against the venue the lower courts, is filed to reverse or modify judgments or final
192
of the PEZA’s action for declaratory relief are already deemed waived. orders. Under the Rules, an appeal by certiorarimust be filed within 15
Objections to venue must be raised at the earliest possible days from notice of the judgment or final order, or of the denial of the
181 193
opportunity. The City did not file a motion to dismiss the petition on the appellant’s motion for new trial or reconsideration.
ground that the venue was improperly laid. Neither did the City raise this A petition for certiorari under Rule 65, on the other hand, is an
objection in its answer. independent and original action filed to set aside proceedings conducted
In any event, the law sought to be judicially interpreted in this case had without or in excess of jurisdiction or with grave abuse of discretion
194
already been breached. The Regional Trial Court of Pasay, therefore, had amounting to lack or excess of jurisdiction. Under the Rules, a petition
no jurisdiction over the PEZA’s petition for declaratory relief against the for certiorari may only be filed if there is no appeal or any plain, speedy,
195
City. or adequate remedy in the ordinary course of law. The petition must be
196
III. filed within 60 days from notice of the judgment, order, or resolution.
The Court of Appeals had no jurisdiction Because of the longer period to file a petition for certiorari, some litigants
over the PEZA’s petition for certiorari attempt to file petitions for certiorari as substitutes for lost appeals by
against the Province of Bataan certiorari. However, Rule 65 is clear that a petition for certiorari will not
Appeal is the remedy "to obtain a reversal or modification of a judgment prosper if appeal is available. Appealis the proper remedy even if the
182
on the merits." A judgment on the merits is one which "determines the error, or one of the errors, raised is grave abuse of discretion on the part
197
rights and liabilities of the parties based on the disclosed facts, of the court rendering judgment. If appeal is available, a petition for
183
irrespective of the formal, technical or dilatory objections." It is not even certiorari cannot be filed.
184
necessary that the case proceeded to trial. So long as the "judgment is In this case, the trial court’s decision dated January 31, 2007 is a
185
general" and "the parties had a full legal opportunity to be heard on judgment on the merits. Based on the facts disclosed by the parties, the
186
their respective claims and contentions," the judgment is on the merits. trial court declared the PEZA liable to the Province of Bataan for real
On the other hand, certiorari is a special civil action filed to annul or property taxes. The PEZA’s proper remedy against the trial court’s
modify a proceeding of a tribunal, board, or officer exercising judicial or decision, therefore, is appeal.
187
quasi-judicial functions. Certiorari, which in Latin means "to be more
! 65!
Since the PEZA filed a petition for certiorari against the trial court’s Sec. 7. Jurisdiction. – The [Court of Tax Appeals] shall exercise:
decision, it availed itself of the wrong remedy. As the Province of Bataan a. Exclusive appellate jurisdiction to review by appeal, as herein
contended, the trial court’s decision dated January 31, 2007 "is only an provided:
error of judgment appealable to the higher level court and may not be ....
198
corrected by filing a petition for certiorari." That the trial court judge 3. Decisions, orders or resolutions of the Regional Trial Courts in
allegedly committed grave abuse of discretion does not make the petition local tax cases originally decided or resolved by them in the
for certiorari the correct remedy. The PEZA should haveraised this exercise of their original or appellate jurisdiction[.]
ground in an appeal filed within 15 days from notice of the assailed The local tax cases referred to in Section 7, paragraph (a)(3) of Republic
resolution. Act No. 1125, as amended, include cases involving real property taxes.
This court, "in the liberal spirit pervading the Rules of Court and in the Real property taxation is governed by Book II of the Local Government
199
interest of substantial justice," has treated petitions for certiorari as an Code on "Local Taxation and Fiscal Matters." Real property taxes are
208
appeal: "(1) if the petition for certiorari was filed within the reglementary collected by the Local Treasurer, not by the Bureau of Internal
period within which to file a petition for review on certiorari; (2) when Revenue in charge of collecting national internal revenue taxes, fees, and
209
errors of judgment are averred; and (3) when there is sufficient reason to charges.
200
justify the relaxation of the rules." Considering that "the nature of an Section 7, paragraph (a)(5) of Republic Act No. 1125, as amended by
action is determined by the allegationsof the complaint or the petition and Republic Act No. 9282, separately provides for the exclusive appellate
201
the character of the relief sought," a petition which "actually avers jurisdiction of the Court of Tax Appeals over decisions of the Central
202
errors of judgment rather than errors than that of jurisdiction" may be Board of Assessment Appeals involving the assessment or collection of
considered a petition for review. real property taxes:
However, suspending the application of the Rules has its disadvantages. Sec. 7. Jurisdiction. – The [Court of Tax Appeals] shall exercise:
Relaxing procedural rules may reduce the "effective enforcement of a. Exclusive appellate jurisdiction to review by appeal, as herein provided:
203
substantive rights," leading to "arbitrariness, caprice, despotism, or ....
204
whimsicality in the settlement of disputes." Therefore, for this court to 5. Decisions of the Central Board of Assessment Appeals in the exercise
suspend the application of the Rules, the accomplishment of substantial of its appellate jurisdiction over cases involving the assessment and
justice must outweigh the importance of predictability of court procedures. taxation of real property originally decided by the provincial or city board
The PEZA’s petition for certiorari may be treated as an appeal. First, the of assessment appeals[.]
petition for certiorari was filed withinthe 15-day reglementary period for This separate provision, nevertheless, does not bar the Court of Tax
filing an appeal. The PEZA filed its petition for certiorari before the Court Appeals from taking cognizance of trial court decisions involving the
205 210 211
of Appeals on October 15, 2007, which was 12 days from October 3, collection of real property tax cases. Sections 256 and 266 of the
206
2007 when the PEZA had notice of the trial court’s order denying the Local Government Code expressly allow localgovernment units to file "in
motion for reconsideration. any court of competent jurisdiction" civil actions to collect basic real
Second, the petition for certiorari raised errors of judgment. The PEZA property taxes. Should the trial court rule against them, local government
argued that the trial court erred in ruling that it is not exempt from units cannot be barred from appealing before the Court of Tax Appeals –
payment of real property taxes given Section 21 of Presidential Decree the "highly specialized body specifically created for the purpose of
212
No. 66 and Sections 11 and 51 of the Special Economic Zone Act of reviewing tax cases."
207
1995. We have also ruled that the Court of Tax Appeals, not the Court of
Third, there is sufficient reason to relax the rules given the importance of Appeals, has the exclusive original jurisdiction over petitions for certiorari
the substantive issue presented in this case. assailing interlocutory orders issued by Regional Trial Courts in a local
However, the PEZA’s petition for certiorari was filed before the wrong tax case. We explained in The City of Manila v. Hon. Grecia-
213
court. The PEZA should have filed its petition before the Court of Tax Cuerdo that while the Court of Tax Appeals has no express grant of
214
Appeals. power to issue writs of certiorari under Republic Act No. 1125, as
The Court of Tax Appeals has the exclusive appellate jurisdiction over amended, the tax court’s judicial power as defined in the
215
local tax cases decided by Regional Trial Courts. Section 7, paragraph Constitution includes the power to determine "whether or not there has
(a)(3) of Republic Act No. 1125, as amended by Republic Act No. 9282, been grave abuse of discretion amounting to lack or excess of jurisdiction
provides: on the part of the [Regional Trial Court] in issuing an interlocutory order of
! 66!
jurisdiction in cases falling within the exclusive appellate jurisdiction of the interlocutory order, of the Regional Trial Court, the PEZA’s proper remedy
216
tax court." We further elaborated: was an appeal to the Court of Tax Appeals.
Indeed, in order for any appellate court to effectively exercise its appellate Considering that the appellate jurisdiction of the Court of Tax Appeals is
jurisdiction, it must have the authority to issue, among others, a writ of to the exclusion of all other courts, the Court of Appeals had no
certiorari. In transferring exclusive jurisdiction over appealed tax cases to jurisdiction to take cognizance of the PEZA’s petition. The Court of
the CTA, it can reasonably be assumed that the law intended to transfer Appeals acted without jurisdiction in rendering the decision in CA-G.R.
218
also such power as is deemed necessary, if not indispensable, in aid of SP No. 100984. Its decision in CA-G.R. SP No. 100984 is void.
such appellate jurisdiction. There is no perceivable reason why the The filing of appeal in the wrong court does not toll the period to appeal.
transfer should only be considered as partial, not total. Consequently, the decision of the Regional Trial Court, Branch 115,
.... Pasay City, became final and executory after the lapse of the 15th day
219
If this Court were to sustain petitioners' contention that jurisdiction over from the PEZA’s receipt of the trial court’s decision. The denial of the
their certiorari petition lies with the CA, this Court would be confirming the petition for injunction became final and executory.
exercise by two judicial bodies, the CA and the CTA, of jurisdiction over IV.
basically the same subject matter – precisely the split-jurisdiction situation The remedy of a taxpayer depends on the
which is anathema to the orderly administration of justice.The Court stage in which the local government unit
cannot accept that such was the legislative motive, especially considering is enforcing its authority to impose real
that the law expressly confers on the CTA, the tribunal with the property taxes
specialized competence over tax and tariff matters, the role of judicial The proper remedy of a taxpayer depends on the stage in which the local
review over local tax cases without mention of any other court that may government unit is enforcing its authority to collect real property taxes.
exercise such power. Thus, the Court agrees with the ruling of the CA For the guidance of the members of the bench and the bar, we reiterate
that since appellate jurisdiction over private respondents' complaint for the taxpayer’s remedies against the erroneous or illegal assessment of
tax refund is vested in the CTA, it follows that a petition for certiorari real property taxes.
seeking nullification of an interlocutory order issued in the said case Exhaustion of administrative remedies under the Local Government Code
should, likewise, be filed with the same court. To rule otherwise would is necessary in cases of erroneous assessments where the correctness
lead to an absurd situation where one court decides an appeal in the of the amount assessed is assailed. The taxpayer must first pay the tax
main case while another court rules on an incident in the very same case. then file a protest with the Local Treasurer within 30 days from date of
220
Stated differently, it would be somewhat incongruent with the pronounced payment of tax. If protest is denied or upon the lapse of the 60-day
judicial abhorrence to split jurisdiction to conclude that the intention of the period to decide the protest, the taxpayer may appeal to the Local Board
law is to divide the authority over a local tax case filed with the RTC by of Assessment Appeals within 60 days from the denial of the protest or
221
giving to the CA or this Court jurisdiction to issue a writ of certiorari the lapse of the 60-day period to decide the protest. The Local Board
222
against interlocutory orders of the RTC but giving to the CTA the of Assessment Appeals has 120 days to decide the appeal.
jurisdiction over the appeal from the decision of the trial court in the same If the taxpayer is unsatisfied withthe Local Board’s decision, the taxpayer
case. It is more in consonance with logic and legal soundness to may appeal before the Central Board of Assessment Appeals within 30
223
conclude that the grant of appellate jurisdiction to the CTA over tax cases days from receipt of the Local Board’s decision.
filed in and decided by the RTC carries withit the power to issue a writ of The decision of the Central Board of Assessment Appeals is appealable
224
certiorari when necessary in aid of such appellate jurisdiction. The before the Court of Tax Appeals En Banc. The appeal before the Court
supervisory power or jurisdiction of the CTA to issue a writ of certiorari in of Tax Appeals shall be filed following the procedure under Rule 43 of the
225
aid of its appellate jurisdiction should co-exist with, and be a complement Rules of Court.
to, its appellate jurisdiction to review, by appeal, the final orders and The Court of Tax Appeals’ decision may then be appealed before this
decisionsof the RTC, in order to have complete supervision over the acts court through a petition for review on certiorari under Rule 45 of the Rules
217 226
of the latter. (Citations omitted) of Court raising pure questions of law.
In this case, the petition for injunction filed before the Regional Trial Court In case of an illegal assessment where the assessment was issued
of Pasay was a local tax case originally decided by the trial court in its without authority, exhaustion of administrative remedies is not necessary
227
original jurisdiction. Since the PEZA assailed a judgment, not an and the taxpayer may directly resort to judicial action. The taxpayer

! 67!
228
shall file a complaint for injunction before the Regional Trial Court to exemptions from real property taxes of all persons, whether natural or
enjoin the local government unit from collecting real property taxes. juridical:
The party unsatisfied with the decision of the Regional Trial Court shall SEC. 234. Exemptions from Real Property Tax. – The following are
file an appeal, not a petition for certiorari, before the Court of Tax exempted from payment of real property tax:
Appeals, the complaint being a local tax case decided by the Regional (a) Real property owned by the Republic of the Philippines or any
229
Trial Court. The appeal shall be filed within fifteen (15) days from of its political subdivisions except when the beneficial use thereof
notice of the trial court’s decision. has been granted, for consideration or otherwise, to a taxable
The Court of Tax Appeals’ decision may then be appealed before this person;
court through a petition for review on certiorari under Rule 45 of the Rules (b) Charitable institutions, churches, parsonages or convents
230
of Court raising pure questions of law. appurtenant thereto, mosques, nonprofit or religious cemeteries
In case the local government unit has issued a notice of delinquency, the and all lands, buildings, and improvements actually, directly, and
taxpayer may file a complaint for injunction to enjoin the impending sale exclusively used for religious, charitable or educational purposes;
of the real property at public auction. In case the local government unit (c) All machineries and equipment that are actually, directly and
has already sold the property at public auction, the taxpayer must first exclusively used by local water districts and government-owned
deposit with the court the amount for which the real property was sold, or – controlled corporations engaged in the supply and
together with interest of 2% per month from the date ofsale to the time of distribution of water and/or generation and transmission of
the institution of action. The taxpayer may then file a complaint to assail electric power;
231
the validity of the public auction. The decisions of the Regional Trial (d) All real property owned by duly registered cooperatives as
Court in these cases shall be appealable before the Court of Tax provided under R.A. No. 6938; and
232
Appeals, and the latter’s decisions appealable before this court through (e) Machinery and equipment usedfor pollution control and
233
a petition for review on certiorari under Rule 45 of the Rules of Court. environmental protection.
V. Except as provided herein, any exemption from payment of real property
The PEZA is exempt from payment of taxes previously granted to, or presently enjoyed by, all persons, whether
real property taxes natural or juridical, including government-owned or -controlled
The jurisdictional errors in this case render these consolidated petitions corporations are hereby withdrawn upon the effectivity of this Code.
moot. We do not review void decisions rendered without jurisdiction. (Emphasis supplied)
However, the PEZA alleged that several local government units, including The person liable for real property taxes is the "taxable person who had
the City of Baguio and the Province of Cavite, have issued their actual or beneficial use and possession [of the real property for the
respective real property tax assessments against the PEZA. Other local taxable period,] whether or not [the person owned the property for the
239
government units will likely follow suit, and either the PEZA or the local period he or she is being taxed]."
government units taxing the PEZA may file their respective actions The exceptions to the rule are provided in the Local Government Code.
against each other. Under Section 133(o), local government units have no power to levy
234
In the interest of judicial economy and avoidance of conflicting taxes of any kind on the national government, its agencies and
235
decisions involving the same issues, we resolve the substantive issue instrumentalities and local government units:
of whether the PEZA is exempt from payment of real property taxes. SEC. 133. Common Limitations on the Taxing Powers of Local
Real property taxes are annual taxes levied on real property such as Government Units. – Unless otherwise provided herein, the exercise of
lands, buildings, machinery, and other improvements not otherwise taxing powers of provinces, cities, municipalities, and barangays shall not
236
specifically exempted under the Local Government Code. Real extend to the levy of the following:
property taxes are ad valorem, with the amount charged based on a fixed ....
237
proportion of the value of the property. Under the law, provinces, cities, (o) Taxes, fees or charges of any kind on the National Government, its
and municipalities within the Metropolitan Manila Area have the power to agencies and instrumentalities and local government units.
238
levy real property taxes within their respective territories. Specifically on real property taxes, Section 234 enumerates the persons
The general rule is that real properties are subject to real property taxes. and real property exempt from real property taxes:
This is true especially since the Local Government Code has withdrawn SEC. 234. Exemptions from Real Property Tax. – The following are
exempted from payment of real property tax:
! 68!
(a) Real property owned by the Republic of the Philippines or any property owned by the Republic of the Philippines, provinces, cities,
of its political subdivisions except when the beneficial use thereof municipalities, barangays, and registered cooperatives fall under this
241
has been granted, for consideration or otherwise, to a taxable classification. Character exemptions are exemptions based on the
person; character of the real property. Thus, no real property taxes may be levied
(b) Charitable institutions, churches, parsonages or convents on charitable institutions, houses and temples of prayer like churches,
appurtenant thereto, mosques, nonprofitor religious cemeteries parsonages, or convents appurtenant thereto, mosques, and non profitor
242
and all lands, buildings, and improvements actually, directly, and religious cemeteries.
exclusively used for religious, charitable or educational purposes; Usage exemptions are exemptions based on the use of the real property.
(c) All machineries and equipment that are actually, directly and Thus, no real property taxes may be levied on real property such as: (1)
exclusively used by local water districts and government-owned lands and buildings actually, directly, and exclusively used for religious,
or – controlled corporations engaged in the supply and charitable or educational purpose; (2) machineries and equipment
distribution of water and/or generation and transmission of actually, directly and exclusively used by local water districts or by
electric power; government-owned or controlled corporations engaged in the supply and
(d) All real property owned by duly registered cooperatives as distribution of water and/or generation and transmission of electric power;
provided under R.A. No. 6938; and and (3) machinery and equipment used for pollution control and
243
(e) Machinery and equipment used for pollution control and environmental protection.
environmental protection. Persons may likewise be exempt from payment of real properties if their
Except as provided herein, any exemption from payment of real property charters, which were enacted or reenacted after the effectivity of the
244
tax previously granted to, or presently enjoyed by, all persons, whether Local Government Code, exempt them payment of real property taxes.
natural or juridical, including all government-owned or -controlled V.
corporations are hereby withdrawn upon the effectivity of this Code. (A) The PEZA is an instrumentality of the national government
(Emphasis supplied) An instrumentality is "any agency of the National Government, not
For persons granted tax exemptions or incentives before the effectivity of integrated within the department framework, vested with special functions
the Local Government Code, Section 193 withdrew these tax exemption or jurisdiction by law, endowed with some if not all corporate powers,
privileges. These persons consist of both natural and juridical persons, administering special funds, and enjoying operational autonomy, usually
245
including government-owned or controlled corporations: through a charter."
SEC. 193. Withdrawal of Tax Exemption Privileges. – Unless otherwise Examples of instrumentalities of the national government are the Manila
246
provided in this code, tax exemptions or incentives granted to or presently International Airport Authority, the Philippine Fisheries Development
247 248
enjoyed by all persons, whether natural or juridical, including government- Authority, the Government Service Insurance System, and the
249
owned or controlled corporations, except local water districts, Philippine Reclamation Authority. These entities are not integrated
cooperatives duly registered under R.A. 6938, non stock and non profit within the department framework but are nevertheless vested with special
hospitals and educational institutions, are hereby withdrawn upon functions to carry out a declared policy of the national government.
effectivity of this Code. Similarly, the PEZA is an instrumentality of the national government. It is
As discussed, Section 234 withdrew all tax privileges with respect to real not integrated within the department framework but is an agency attached
250
property taxes. Nevertheless, local government units may grant tax to the Department of Trade and Industry. Book IV, Chapter 7, Section
exemptions under such terms and conditions asthey may deem 38(3)(a) of the Administrative Code of 1987 defines "attachment": SEC.
necessary: 38. Definition of Administrative Relationship.– Unless otherwise expressly
SEC. 192. Authority to Grant Tax Exemption Privileges. – Local stated in the Code or in other laws defining the special relationships of
government units may, through ordinances duly approved, grant tax particular agencies, administrative relationships shall be categorized and
exemptions, incentives or reliefs under such terms and conditions as they defined as follows:
may deem necessary. ....
240
In Mactan Cebu International Airport Authority v. Hon. Marcos, this (3) Attachment.– (a) This refers to the lateral relationship between the
court classified the exemptions from real property taxes into ownership, department or its equivalent and the attached agency or corporation for
character, and usage exemptions. Ownership exemptions are exemptions purposes of policy and program coordination. The coordination may be
based on the ownership of the real property. The exemptions of real accomplished by having the department represented in the governing
! 69!
board of the attached agency or corporation, either as chairman or as a special economic zones which attract investments and promote use of
member, with or without voting rights, if this is permitted by the charter; domestic labor, the PEZA carries out the following policy of the
having the attached corporation or agency comply with a system of Government: SECTION 2. Declaration of Policy. — It is the declared
periodic reporting which shall reflect the progress of the programs and policy of the government to translate into practical realities the following
projects; and having the department or its equivalent provide general State policies and mandates in the 1987 Constitution, namely:
policies through its representative in the board, which shall serve as the (a) "The State recognizes the indispensable role of the private
framework for the internal policies of the attached corporation or agency[.] sector, encourages private enterprise, and provides incentives to
Attachment, which enjoys "a larger measure of needed investments." (Sec. 20, Art. II)
251
independence" compared with other administrative relationships such (b) "The State shall promote the preferential use of Filipino labor,
as supervision and control, is further explained in Beja, Sr. v. Court of domestic materials and locally produced goods, and adopt
252
Appeals: measures that help make them competitive." (Sec. 12, Art. XII) In
An attached agency has a larger measure of independence from the pursuance of these policies, the government shall actively
Department to which it is attached than one which is under departmental encourage, promote, induce and accelerate a sound and
supervision and control or administrative supervision. This is borne out by balanced industrial, economic and social development of the
the "lateral relationship" between the Department and the attached country in order to provide jobs to the people especially those in
agency. The attachment is merely for "policy and program coordination." the rural areas, increase their productivity and their individual and
With respect to administrative matters, the independence of an attached family income, and thereby improve the level and quality of their
agency from Departmental control and supervision is further reinforced by living condition through the establishment, among others, of
the fact that even an agency under a Department’s administrative special economic zones in suitable and strategic locations in the
supervision is free from Departmental interference with respect to country and through measures that shall effectively attract
261
appointments and other personnel actions "in accordance with the legitimate and productive foreign investments.
decentralization of personnel functions" under the Administrative Code of Being an instrumentality of the national government, the PEZA cannot be
1987. Moreover, the Administrative Code explicitly provides that Chapter taxed by local government units.
262
8 of Book IV on supervision and control shall not apply to chartered Although a body corporate vested with some corporate powers, the
253
institutions attached to a Department. PEZA is not a government-owned or controlled corporation taxable for
With the PEZA as an attached agency to the Department of Trade and real property taxes.
Industry, the 13-person PEZA Board is chaired by the Department Section 2(13) of the Introductory Provisions of the Administrative Code of
254
Secretary. Among the powers and functions of the PEZA is its ability to 1987 defines the term "government-owned or controlled corporation":
coordinate with the Department of Trade and Industry for policy and SEC. 2. General Terms Defined. – Unless the specific words of the text,
255
program formulation and implementation. In strategizing and prioritizing or the context as a whole, or a particular statute, shall require a different
the development of special economic zones, the PEZA coordinates with meaning:
256
the Department of Trade and Industry. ....
The PEZA also administers its own funds and operates autonomously, (13) Government-owned or controlled corporation refers to any agency
with the PEZA Board formulating and approving the PEZA’s annual organized as a stock or non-stock corporation, vested with functions
257
budget. Appointments and other personnel actions in the PEZA are relating to public needs whether governmental or proprietary in nature,
also free from departmental interference, with the PEZA Board having the and owned by the Government directly or through its instrumentalities
exclusive and final authority to promote, transfer, assign and reassign either wholly, or, where applicable as in the case of stock corporations, to
258
officers of the PEZA. the extent of at least fifty-one (51) per cent of its capital stock: Provided,
As an instrumentality of the national government, the PEZA is vested with That government owned or controlled corporations may be further
special functions or jurisdiction by law. Congress created the PEZA to categorized by the Department of the Budget, the Civil Service
operate, administer, manage and develop special economic zones in the Commission, and the Commission on Audit for purposes of the exercise
259
Philippines. Special economic zones are areas with highly developed and discharge of their respective powers, functions and responsibilities
or which have the potential to be developed into agro-industrial, industrial with respect to such corporations.
tourist/recreational, commercial, banking, investment and financial Government entities are created by law, specifically, by the Constitution
260
centers. By operating, administering, managing, and developing or by statute. In the case of government-owned or controlled
! 70!
263
corporations, they are incorporated by virtue of special charters to Commissioner Blas F. Ople, proponent of the test of economic viability,
participate in the market for special reasons which may be related to explained to the Constitutional Commission the purpose of this test, as
dysfunctions or inefficiencies of the market structure. This is to adjust follows:
reality as against the concept of full competition where all market players MR. OPLE: Madam President, the reason for this concern is really that
are price takers. Thus, under the Constitution, government-owned or when the government creates a corporation, there is a sense in which this
controlled corporations are created in the interest of the common good corporation becomes exempt from the test of economic performance. We
264
and should satisfy the test of economic viability. Article XII, Section 16 know what happened in the past. If a government corporation loses, then
of the Constitution provides: it makes its claim upon the taxpayers' money through new equity
Section 16. The Congress shall not, except by general law, provide for infusions from the government and what is always invoked is the common
the formation, organization, or regulation of private corporations. good. That is the reason why this year, out of a budget of ₱115 billion for
Government-owned or controlled corporations may be created or the entire government, about ₱28 billion of this will go into equity
established by special charters in the interest of the common good and infusions to support a few government financial institutions. And this is all
subject to the test of economic viability. taxpayers' money which could have been relocated to agrarian reform, to
Economic viability is "the capacity to function efficiently in social services like health and education, to augment the salaries of
265
business." To be economically viable, the entity "should not go into grossly underpaid public employees. And yet this is all going down the
266
activities which the private sector can do better." drain.
To be considered a government-owned or controlled corporation, the Therefore, when we insert the phrase "ECONOMIC VIABILITY" together
267
entity must have been organized as a stock or non-stock corporation. with the "common good," this becomes a restraint on future enthusiasts
Government instrumentalities, on the other hand, are also created by law for state capitalism to excuse themselves from the responsibility of
but partake of sovereign functions. When a government entity performs meeting the market test so that they become viable. And so, Madam
sovereign functions, it need not meet the test of economic viability. In President, I reiterate, for the committee's consideration and I am glad that
268
Manila International Airport Authority v. Court of Appeals, this court I am joined in this proposal by Commissioner Foz, the insertion of the
explained: standard of "ECONOMIC VIABILITY OR THE ECONOMIC TEST,"
In contrast, government instrumentalities vested with corporate powers together with the common good.
and performing governmental orpublic functions need not meet the test of ....
economic viability. These instrumentalities perform essential public Clearly, the test of economic viability does not apply to government
services for the common good, services that every modern State must entities vested with corporate powers and performing essential public
provide its citizens. These instrumentalities need not be economically services. The State is obligated to render essential public services
viable since the government may even subsidize their entire operations. regardless of the economic viability of providing such service. The
These instrumentalities are not the "government-owned or controlled noneconomic viability of rendering such essential public service does not
corporations" referred to in Section 16, Article XII of the 1987 excuse the State from withholding such essential services from the
269
Constitution. public. (Emphases and citations omitted)
Thus, the Constitution imposes no limitation when the legislature creates The law created the PEZA’s charter. Under the Special Economic Zone
government instrumentalities vested with corporate powers but Act of 1995, the PEZA was established primarily to perform the
performing essential governmental or public functions. Congress has governmental function of operating,administering, managing, and
plenary authority to create government instrumentalities vested with developing special economic zones to attract investments and provide
corporate powers provided these instrumentalities perform essential opportunities for preferential use of Filipino labor.
government functions or public services. However, when the legislature Under its charter, the PEZA was created a body corporate endowed with
270
creates through special charters corporations that perform economic or some corporate powers. However, it was not organized as a stock or
271
commercial activities, such entities — known as "government-owned or non-stock corporation. Nothing in the PEZA’s charter provides that the
272
controlled corporations" — must meetthe test of economic viability PEZA’s capital is divided into shares. The PEZA also has no members
because they compete in the market place. who shall share in the PEZA’s profits.
.... The PEZA does not compete with other economic zone authorities in the
country. The government may even subsidize the PEZA’s operations.
Under Section 47 of the Special Economic Zone Act of 1995, "any sum
! 71!
necessary to augment [the PEZA’s] capital outlay shall be included in the and exercised by the PEZA. Henceforth, the EPZA shall be referred to as
General Appropriations Act to be treated as an equity of the national the PEZA.
273
government." The following sections of the Special Economic Zone Act of 1995 provide
The PEZA, therefore, need not be economically viable. It is not a for the PEZA’s powers,functions, and responsibilities:
government-owned or controlled corporation liable for real property taxes. SEC. 5. Establishment of ECOZONES. – To ensure the viability and
V. (B) geographical dispersal of ECOZONES through a system of prioritization,
The PEZA assumed the non-profit character, including the tax exempt the following areas are initially identified as ECOZONES, subject to the
status, of the EPZA criteria specified in Section 6:
The PEZA’s predecessor, the EPZA, was declared non-profit in character ....
with all its revenues devoted for its development, improvement, and The metes and bounds of each ECOZONE are to be delineated and more
maintenance. Consistent with this non-profit character, the EPZA was particularly described in a proclamation to be issued by the President of
explicitly declared exempt from real property taxes under its charter. the Philippines, upon the recommendation of the Philippine Economic
Section 21 of Presidential Decree No. 66 provides: Zone Authority (PEZA), which shall be established under this Act, in
Section 21. Non-profit Character of the Authority; Exemption from Taxes. coordination with the municipal and / or city council, National Land Use
The Authority shall be non-profit and shall devote and use all its returns Coordinating Committee and / or the Regional Land Use Committee.
from its capital investment, as well as excess revenues from its SEC. 6. Criteria for the Establishment of Other ECOZONES. – In addition
operations, for the development, improvement and maintenance and to the ECOZONES identified in Section 5 of this Act, other areas may be
other related expenditures of the Authority to pay its indebtedness and established as ECOZONES in a proclamation to be issued by the
obligations and in furtherance and effective implementation of the policy President of the Philippines subject to the evaluation and
enunciated in Section 1 of this Decree. In consonance therewith, the recommendation of the PEZA, based on a detailed feasibility and
Authority is hereby declared exempt: engineering study which must conform to the following criteria:
.... (a) The proposed area must be identified as a regional growth
(b) From all income taxes, franchise taxes, realty taxes and all other kinds center in the Medium-Term Philippine Development Plan or by
of taxes and licenses to be paid to the National Government, its the Regional Development Council;
provinces, cities, municipalities and other government agencies and (b) The existence of required infrastructure in the proposed
instrumentalities[.] ECOZONE, such as roads, railways, telephones, ports, airports,
The Special Economic Zone Act of 1995, on the other hand, does not etc., and the suitability and capacity of the proposed site to
specifically exempt the PEZA from payment of real property taxes. absorb such improvements;
Nevertheless, we rule that the PEZA is exempt from real property taxes (c) The availability of water source and electric power supply for
by virtue of its charter. A provision in the Special Economic Zone Act of use of the ECOZONE;
1995 explicitly exempting the PEZA is unnecessary. The PEZA assumed (d) The extent of vacant lands available for industrial and
the real property exemption of the EPZA under Presidential Decree No. commercial development and future expansion of the ECOZONE
66. as well as of lands adjacent to the ECOZONE available for
Section 11 of the Special Economic Zone Act of 1995 mandated the development of residential areas for the ECOZONE workers;
EPZA "to evolve into the PEZA in accordance with the guidelines and (e) The availability of skilled, semi-skilled and non-skilled
regulations set forth in an executive order issued for this purpose." trainable labor force in and around the ECOZONE;
President Ramos then issued Executive Order No. 282 in 1995, ordering (f) The area must have a significant incremental advantage over
the PEZA to assume the EPZA’s powers, functions, and responsibilities the existing economic zones and its potential profitability can be
under Presidential Decree No. 66 not inconsistent with the Special established;
Economic Zone Act of 1995: (g) The area must be strategically located; and
SECTION 1. Assumption of EPZA’s Powers and Functions by PEZA. All (h) The area must be situated where controls can easily be
the powers, functions and responsibilities of EPZA as provided under its established to curtail smuggling activities.
Charter, Presidential Decree No. 66, as amended, insofar as they are not Other areas which do not meet the foregoing criteria may be established
inconsistent with the powers,functions and responsibilities of the PEZA, as ECOZONES: Provided, That the said area shall be developed only
as mandated under Republic Act No. 7916, shall hereafter be assumed through local government and/or private sector initiative under any of the
! 72!
schemes allowed in Republic Act No. 6957 (the build-operate-transfer internal affairs of any of the ECOZONE and expenditure for these military
law), and without any financial exposure on the part of the national forces shall be borne by the national government. The PEZA may provide
government: Provided, further, That the area can be easily secured to and establish the ECOZONES’ internal security and firefighting forces.
curtail smuggling activities: Provided, finally, That after five (5) years the SEC. 10. Immigration. – Any investor within the ECOZONE whose initial
area must have attained a substantial degree of development, the investment shall not be less than One Hundred Fifty Thousand Dollars
indicators of which shall be formulated by the PEZA. ($150,000.00), his/her spouse and dependent children under twenty-one
SEC. 7. ECOZONE to be a Decentralized Agro-Industrial, Industrial, (21) years of age shall be granted permanent resident status within the
Commercial / Trading, Tourist, Investment and Financial Community. - ECOZONE. They shall have freedom of ingress and egress to and from
Within the framework of the Constitution, the interest of national the ECOZONE without any need of special authorization from the Bureau
sovereignty and territorial integrity of the Republic, ECOZONE shall be of Immigration.
developed, as much as possible, into a decentralized, self-reliant and The PEZA shall issue working visas renewable every two (2) years to
self-sustaining industrial, commercial/trading, agro-industrial, tourist, foreign executives and other aliens, processing highly-technical skills
banking, financial and investment center with minimum government which no Filipino within the ECOZONE possesses, as certified by the
intervention. Each ECOZONE shall be provided with transportation, Department of Labor and Employment. The names of aliens granted
telecommunications, and other facilities needed to generate linkage with permanent resident status and working visas by the PEZA shall be
industries and employment opportunitiesfor its own inhabitants and those reported to the Bureau of Immigration within thirty (30) days after
of nearby towns and cities. issuance thereof.
The ECOZONE shall administer itself on economic, financial, industrial, SEC. 13. General Powers and Functions of the Authority. – The PEZA
tourism development and such other matters within the exclusive shall have the following powers and functions:
competence of the national government. (a) To operate, administer, manage and develop the ECOZONE
The ECOZONE may establish mutually beneficial economic relations with according to the principles and provisions set forth in this Act;
other entities within the country, or, subject to the administrative guidance (b) To register, regulate and supervise the enterprises in the
of the Department of Foreign Affairs and/or the Department of Trade and ECOZONE in an efficient and decentralized manner;
Industry, with foreign entities or enterprises. (c) To coordinate with local government units and exercise
Foreign citizens and companies owned by non-Filipinos in whatever general supervision over the development, plans, activities and
proportion may set up enterprises in the ECOZONE, either by themselves operations of the ECOZONES, industrial estates, export
or in joint venture with Filipinos in any sector of industry, international processing zones, free trade zones, and the like;
trade and commerce within the ECOZONE. Their assets, profits and (d) In coordination with local government units concerned and
other legitimate interests shall be protected: Provided, That the appropriate agencies, to construct,acquire, own, lease, operate
ECOZONE through the PEZA may require a minimum investment for any and maintain on its own or through contract, franchise, license,
ECOZONE enterprises in freely convertible currencies: Provided, further, bulk purchase from the private sector and build-operate-transfer
That the new investment shall fall under the priorities, thrusts and limits scheme or joint venture, adequate facilities and infrastructure,
provided for in the Act. such as light and power systems, water supply and distribution
SEC. 8. ECOZONE to be Operated and Managed as Separate Customs systems, telecommunication and transportation, buildings,
Territory. – The ECOZONE shall be managed and operated by the PEZA structures, warehouses, roads, bridges, ports and other facilities
as separate customs territory. for the operation and development of the ECOZONE;
The PEZA is hereby vested with the authority to issue certificate of origin (e) To create, operate and/or contractto operate such agencies
for products manufactured or processed in each ECOZONE in and functional units or offices of the authority as it may deem
accordance with the prevailing rules or origin, and the pertinent necessary;
regulations of the Department of Trade and Industry and/or the (f) To adopt, alter and use a corporate seal; make contracts,
Department of Finance. lease, own or otherwise dispose of personal or real property; sue
SEC. 9. Defense and Security. – The defense of the ECOZONE and the and be sued; and otherwise carry out its duties and functions as
security of its perimeter fence shall be the responsibility of the national provided for in this Act;
government in coordination with the PEZA. Military forces sent by the (g) To coordinate the formulation and preparation of the
national government for the purpose of defense shall not interfere in the development plans of the different entities mentioned above;
! 73!
(h) To coordinate with the National Economic Development to sell their products locally. Said negative list shall be regularly updated
Authority (NEDA), the Department of Trade and Industry (DTI), by the PEZA.
the Department of Science and Technology (DOST), and the The PEZA, in coordination with the Department of Trade and Industry and
local government units and appropriate government agencies for the Bureau of Customs, shall jointly issue the necessary implementing
policy and program formulation and implementation; and rules and guidelines for the effective Implementation of this section.
(i) To monitor and evaluate the development and requirements of SEC. 29. Eminent Domain. – The areas comprising an ECOZONE may
entities in subsection (a) and recommend to the local government be expanded or reduced when necessary. For this purpose, the
units or other appropriate authorities the location, incentives, government shall have the power to acquire, either by purchase,
basic services, utilities and infrastructure required or to be made negotiation or condemnation proceedings, any private lands within or
available for said entities. adjacent to the ECOZONE for:
SEC. 17. Investigation and Inquiries. – Upon a written formal complaint a. Consolidation of lands for zone development purposes;
made under oath, which on its face provides reasonable basis to believe b. Acquisition of right of way to the ECOZONE; and
that some anomaly or irregularity might have been committed, the PEZA c. The protection of watershed areas and natural assets valuable
or the administrator of the ECOZONE concerned, shall have the power to to the prosperity of the ECOZONE.
inquire into the conduct of firms or employees of the ECOZONE and to If in the establishment of a publicly-owned ECOZONE, any person or
conduct investigations, and for that purpose may subpoena witnesses, group of persons who has been occupying a parcel of land within the
administer oaths, and compel the production of books, papers, and other Zone has to be evicted, the PEZA shall provide the person or group of
evidences: Provided, That to arrive at the truth, the investigator(s) may persons concerned with proper disturbance compensation: Provided,
grant immunity from prosecution to any person whose testimony or however, That in the case of displaced agrarian reform beneficiaries, they
whose possessions of documents or other evidence is necessary or shall be entitled to the benefits under the Comprehensive Agrarian
convenient to determine the truth in any investigation conducted by him Reform Law, including but not limited to Section 36 of Republic Act No.
or under the authority of the PEZA or the administrator of the ECOZONE 3844, in addition to a homelot in the relocation site and preferential
concerned. employment in the project being undertaken.
SEC. 21. Development Strategy of the ECOZONE. - The strategy and SEC. 32. Shipping and Shipping Register. – Private shipping and related
priority of development of each ECOZONE established pursuant to this business including private container terminals may operate freely in the
Act shall be formulated by the PEZA, in coordination with the Department ECOZONE, subject only to such minimum reasonable regulations of local
of Trade and Industry and the National Economic and Development application which the PEZA may prescribe.
Authority; Provided, That such development strategy is consistent with The PEZA shall, in coordination with the Department of Transportation
the priorities of the national government as outlined in the medium-term and Communications, maintain a shipping register for each ECOZONE as
Philippine development plan. It shall be the policy of the government and a business register of convenience for ocean-going vessels and issue
the PEZA to encourage and provide Incentives and facilitate private related certification.
sector participation in the construction and operation of public utilities and Ships of all sizes, descriptions and nationalities shall enjoy access to the
infrastructure in the ECOZONE, using any of the schemes allowed in ports of the ECOZONE, subject only to such reasonable requirement as
Republic Act No. 6957 (the build-operate-transfer law). may be prescribed by the PEZA In coordination with the appropriate
SEC. 22. Survey of Resources. The PEZA shall, in coordination with agencies of the national government.
appropriate authorities and neighboring cities and municipalities, SEC. 33. Protection of Environment. - The PEZA, in coordination with the
immediately conduct a survey of the physical, natural assets and appropriate agencies, shall take concrete and appropriate steps and
potentialities of the ECOZONE areas under its jurisdiction. enact the proper measure for the protection of the local environment.
SEC. 26. Domestic Sales. – Goods manufactured by an ECOZONE SEC. 34. Termination of Business. - Investors In the ECOZONE who
enterprise shall be made available for immediate retail sales in the desire to terminate business or operations shall comply with such
domestic market, subject to payment of corresponding taxes on the raw requirements and procedures which the PEZA shall set, particularly those
materials and other regulations that may be adopted by the Board of the relating to the clearing of debts. The assets of the closed enterprise can
PEZA. However, in order to protect the domestic industry, there shall be a be transferred and the funds con be remitted out of the ECOZONE
negative list of Industries that willbe drawn up by the PEZA. Enterprises subject to the rules, guidelines and procedures prescribed jointly by the
engaged in the industries included in the negative list shall not be allowed Bangko Sentral ng Pilipinas, the Department of Finance and the PEZA.
! 74!
SEC. 35. Registration of Business Enterprises. - Business enterprises independence and shall be monitored by the PEZA for the
within a designated ECOZONE shall register with the PEZA to avail of all implementation of incentives.
incentives and benefits provided for in this Act. SEC. 46. Transfer of Resources. - The relevant functions of the Board of
SEC. 36. One Stop Shop Center. - The PEZA shall establish a one stop Investments over industrial estates and agri-export processing estates
shop center for the purpose of facilitating the registration of new shall be transferred to the PEZA. The resources of government owned
enterprises in the ECOZONE. Thus, all appropriate government agencies Industrial estates and similar bodies except the Bases Conversion
that are Involved In registering, licensing or issuing permits to investors Development Authority and those areas identified under Republic Act No.
shall assign their representatives to the ECOZONE to attend to Investor’s 7227, are hereby transferred to the PEZA as the holding agency. They
requirements. are hereby detached from their mother agencies and attached to the
SEC. 39. Master Employment Contracts. - The PEZA, in coordination with PEZA for policy, program and operational supervision.
the Department of Tabor and Employment, shall prescribe a master The Boards of the affected government-owned industrial estates shall be
employment contract for all ECOZONE enterprise staff members and phased out and only the management level and an appropriate number of
workers, the terms of which provide salaries and benefits not less than personnel shall be retained.
those provided under this Act, the Philippine Labor Code, as amended, Government personnel whose services are not retained by the PEZA or
and other relevant issuances of the national government. any government office within the ECOZONE shall be entitled to
SEC. 41. Migrant Worker. - The PEZA, in coordination with the separation pay and such retirement and other benefits theyare entitled to
Department of Labor and Employment, shall promulgate appropriate under the laws then in force at the time of their separation: Provided, That
measures and programs leading to the expansion of the services of the in no case shall the separation pay be less than one and one-fourth (1
ECOZONE to help the local governments of nearby areas meet the 1/4) month of every year of service.
needs of the migrant workers. The non-profit character of the EPZA under Presidential Decree No. 66 is
SEC. 42. Incentive Scheme. - An additional deduction equivalent to one- not inconsistent with any of the powers, functions, and responsibilities of
half (1/2) of the value of training expenses incurred in developing skilled the PEZA. The EPZA’s non-profit character, including the EPZA’s
or unskilled labor or for managerial or other management development exemption from real property taxes, must be deemed assumed by the
programs incurred by enterprises in the ECOZONE can be deducted from PEZA.
the national government's share of three percent (3%) as provided In In addition, the Local Government Code exempting instrumentalities of
Section 24. the national government from real property taxes was already in
274
The PEZA, the Department of Labor and Employment, and the force when the PEZA’s charter was enacted in 1995. It would have
Department of Finance shall jointly make a review of the incentive been redundant to provide for the PEZA’s exemption in its charter
scheme provided In this section every two (2) years or when considering that the PEZA is already exempt by virtue of Section 133(o)
circumstances so warrant. of the Local Government Code.
SEC. 43. Relationship with the Regional Development Council. - The As for the EPZA, Commonwealth Act No. 470 or the Assessment Law
PEZA shall determine the development goals for the ECOZONE within was in force when the EPZA’s charter was enacted. Unlike the Local
the framework of national development plans, policies and goals, and the Government Code, Commonwealth Act No. 470 does not contain a
administrator shall, upon approval by the PEZA Board, submit the provision specifically exempting instrumentalities of the national
275
ECOZONE plans, programs and projects to the regional development government from payment of real property taxes. It was necessary to
council for inclusion in and as inputs to the overall regional development put an exempting provision in the EPZA’s charter.
plan. Contrary to the PEZA’s claim, however, Section 24 of the Special
SEC. 44. Relationship with the Local Government Units. - Except as Economic Zone Act of 1995 is not a basis for the PEZA’s exemption.
herein provided, the local government units comprising the ECOZONE Section 24 of the Special Economic Zone Act of 1995 provides:
shall retain their basic autonomy and identity. The cities shall be Sec. 24. Exemption from National and Local Taxes. — Except for real
governed by their respective charters and the municipalities shall operate property taxes on land owned by developers, no taxes, local and national,
and function In accordance with Republic Act No. 7160, otherwise known shall be imposed on business establishments operating within the
as the Local Government Code of 1991. ECOZONE. In lieu thereof, five percent (5%) of the gross income earned
SEC. 45. Relationship of PEZA to Privately-Owned Industrial Estates. – by all business enterprises within the ECOZONEshall be paid and
Privately-owned industrial estates shall retain their autonomy and remitted as follows:
! 75!
(a) Three percent (3%) to the National Government; Properties of public dominion are outside the commerce of man. These
(b) Two percent (2%) which shall be directly remitted by the properties are exempt from "levy, encumbrance or disposition through
278
business establishments to the treasurer's office of the public or private sale." As this court explained in Manila International
municipality or city where the enterprise is located. (Emphasis Airport Authority:
supplied) Properties of public dominion, being for public use, are not subject to
Tax exemptions provided under Section 24 apply only to business levy, encumbrance or disposition through public or private sale. Any
establishments operating within economic zones. Considering that the encumbrance, levy on execution or auction sale of any property of public
PEZA is not a business establishment but an instrumentality performing dominion is void for being contrary to public policy. Essential public
governmental functions, Section 24 is inapplicable to the PEZA. Also, services will stop if properties of public dominion are subject to
279
contrary to the PEZA’s claim, developers ofeconomic zones, whether encumbrances, foreclosures and auction sale[.]
public or private developers, are liable for real property taxes on lands On the other hand, all other properties of the state that are not intended
they own. Section 24 does not distinguish between a public and private for public use or are not intended for some public service or for the
276
developer. Thus, courts cannot distinguish. Unless the public development of the national wealth are patrimonial properties. Article 421
developer is exempt under the Local Government Code or under its of the Civil Code of the Philippines provides:
charter enacted after the Local Government Code’s effectivity, the public Art. 421. All other property of the State, which is not of the character
developer must pay real property taxes on their land. stated in the preceding article, is patrimonial property.
At any rate, the PEZA cannot be taxed for real property taxes even if it Patrimonial properties are also properties of the state, but the state may
acts as a developer or operator of special economic zones. The PEZA is dispose of its patrimonial property similar to private persons disposing of
an instrumentality of the national government exempt from payment of their property. Patrimonial properties are within the commerce of man and
280
real property taxes under Section 133(o) of the Local Government Code. are susceptible to prescription, unless otherwise provided.
As this court said in Manila International Airport Authority, "there must be In this case, the properties sought to be taxed are located in publicly
express language in the law empowering local governments to tax owned economic zones. These economic zones are property of public
national government instrumentalities. Any doubt whether such power dominion. The City seeks to tax properties located within the Mactan
277 281
exists is resolved against local governments." Economic Zone, the site of which was reserved by President Marcos
V. (C) under Proclamation No. 1811, Series of 1979. Reserved lands are lands
Real properties under the PEZA’s title are owned by the Republic of the of the public domain set aside for settlement or public use, and for
Philippines specific public purposes by virtue of a presidential
282
Under Section 234(a) of the LocalGovernment Code, real properties proclamation. Reserved lands are inalienable and outside the
283
owned by the Republic of the Philippines are exempt from real property commerce of man, and remain property of the Republic until withdrawn
284
taxes: from publicuse either by law or presidential proclamation. Since no law
SEC. 234. Exemptions from Real Property Tax. – The following are or presidential proclamation has been issued withdrawing the site of the
exempted from payment of real property tax: Mactan Economic Zone from public use, the property remains reserved
(a) Real property owned by the Republic of the Philippines or any of its land.
political subdivisions except when the beneficial use thereof has been As for the Bataan Economic Zone, the law consistently characterized the
granted, for consideration or otherwise, to a taxable person[.] property as a port. Under Republic Act No. 5490, Congress declared
285
Properties owned by the state are either property of public dominion or Mariveles, Bataan "a principal port of entry" to serve as site of a foreign
patrimonial property. Article 420 of the Civil Code of the Philippines trade zone where foreign and domestic merchandise may be brought in
enumerates property of public dominion: without being subject to customs and internal revenue laws and
286
Art. 420. The following things are property of public dominion: regulations of the Philippines.
(1) Those intended for public use, such as roads, canals, rivers, Section 4 of Republic Act No. 5490 provided that the foreign trade zone in
torrents, ports and bridges constructed by the State, banks, Mariveles, Bataan "shall at all times remain to be owned by the
shores, roadsteads, and others of similar character; Government":
(2) Those which belong to the State, without belonging for public SEC. 4. Powers and Duties.– The Foreign Trade Zone Authority shall
use, and are intended for some public service or for the have the following powers and duties:
development of the national wealth.
! 76!
a. To fix and delimit the site of the Zone which at all times remain to be The Republic may grant the beneficialuse of its real property to an
owned by the Government, and which shall have a contiguous and agency or instrumentality of the national government. This happens when
adequate area with well defined and policed boundaries, with adequate title of the real property is transferred to an agency or instrumentality
enclosures to segregate the Zone from the customs territory for protection even as the Republic remains the owner of the real property. Such
of revenues, together with suitable provisions for ingress and egress of arrangement does not result in the loss of the tax exemption/ Section
persons, conveyance, vessels and merchandise sufficient for the purpose 234(a) of the Local Government Code states that real property owned by
of this Act[.] (Emphasis supplied) the Republic loses its tax exemption only if the "beneficial use thereof has
The port in Mariveles, Bataan then became the Bataan Economic Zone been granted, for consideration or otherwise, to a taxable person." . .
287 290
under the Special Economic Zone Act of 1995. Republic Act No. 9728 . (Emphasis in the original; italics supplied)
then converted the Bataan Economic Zone into the Freeport Area of Even the PEZA’s lands and buildings whose beneficial use have been
288
Bataan. granted to other persons may not be taxed with real property taxes. The
A port of entry, where imported goods are unloaded then introduced in PEZA may only lease its lands and buildings to PEZA-registered
291
the market for public consumption, is considered property for public use. economic zone enterprises and entities. These PEZA-registered
Thus, Article 420 of the Civil Code classifies a port as property of public enterprises and entities, which operate within economic zones, are not
dominion. The Freeport Area of Bataan, where the government allows tax subject to real property taxes. Under Section 24 of the Special Economic
289
and duty-free importation of goods, is considered property of public Zone Act of 1995, no taxes, whether local or national, shall be imposed
dominion. The Freeport Area of Bataan is owned by the state and cannot on all business establishments operating within the economic zones:
be taxed under Section 234(a) of the Local Government Code. SEC. 24. Exemption from National and Local Taxes. – Except for real
Properties of public dominion, even if titled in the name of an property on land owned by developers, no taxes, local and national, shall
instrumentality as in this case, remain owned by the Republic of the be imposed on business establishments operating within the ECOZONE.
Philippines. If property registered in the name of an instrumentality is In lieu thereof, five percent (5%) of the gross income earned by all
conveyed to another person,the property is considered conveyed on business enterprises within the ECOZONE shall be paid and remitted as
behalf of the Republic of the Philippines. Book I, Chapter 12, Section 48 follows:
of the Administrative Code of 1987 provides: a. Three percent (3%) to the National Government;
SEC. 48. Official Authorized to Convey Real Property. – Whenever real b. Two percent (2%) which shall be directly remitted by the business
property of the government is authorized by law to be conveyed, the deed establishments to the treasurer’s office of the municipality or city where
292
of conveyance shall be executed in behalf of the government by the the enterprise is located. (Emphasis supplied)
following: In lieu of revenues from real property taxes, the City of Lapu-Lapu
.... collects two-fifths of 5% final tax on gross income paid by all business
(2) For property belonging to the Republic of the Philippines, but titled in establishments operating withinthe Mactan Economic Zone:
the name of any political subdivision orof any corporate agency or SEC. 24. Exemption from National and Local Taxes. – Except for real
instrumentality, by the executive head of the agency or instrumentality. property on land owned by developers, no taxes, local and national, shall
(Emphasis supplied) be imposed on business establishments operating within the ECOZONE.
In Manila International Airport Authority, this court explained: In lieu thereof, five percent (5%) of the gross income earned by all
[The exemption under Section 234(a) of the Local Government Code] business enterprises within the ECOZONE shall be paid and remitted as
should be read in relation with Section 133(o) of the same Code, which follows:
prohibits local governments from imposing "[t]axes, fess or charges of a. Three percent (3%) to the National Government;
any kind on the National Government, its agencies and instrumentalitiesx b. Two percent (2%) which shall be directly remitted by the
x x." The real properties owned by the Republic are titled either in the business establishments to the treasurer’s office of the
293
name of the Republic itself or in the name of agencies or instrumentalities municipality or city where the enterprise is located. (Emphasis
of the National Government.The Administrative Code allows real property supplied)
owned by the Republic to be titled in the name of agencies or For its part, the Province of Bataan collects a fifth of the 5% final tax on
instrumentalities of the national government. Such real properties gross income paid by all business establishments operating within the
remained owned by the Republic of the Philippines and continue to be Freeport Area of Bataan:
exempt from real estate tax.
! 77!
Section 6. Imposition of a Tax Rate of Five Percent (5%) on Gross CELESTINO CALUMPAG, LORETO CAMACHO, VICTORIANO
Income Earned. - No taxes, local and national, shall be imposed on CANETE, DOMINADOR P. CANTILLO, FRUCTUSO P. CARBAJOSA,
business establishments operating withinthe FAB. In lieu thereof, said VICTORINO S. CARLOS, VICTOR CARLOS, GEORGE M. CASSION,
business establishments shall pay a five percent (5%) final tax on their JAIME S. CASTAÑARES, FLAVIANO C. CASTAÑARES, ELPIDIO
gross income earned in the following percentages: CATUBAY, NATHANIEL B. CAUSANG, BEOFIL B. CAUSING,
(a) One per centum (1%) to the National Government; ADRIANO R. CEJAS, CIRILO G. CERERA, SR., CRISTITUTO M.
(b) One per centum (1%) to the Province of Bataan; CEREZO, DANTE V. CONCHA, ALBERT CORNELIO, CESAR
(c) One per centum (1%) to the treasurer's office of the CORTES, NOEL Y. CORTEZ, SERNUE CREDO, CORNELIO A.
Municipality of Mariveles; and CRESENCIO, ALEX CRUZ, ROGER CRUZ, RANSAM CRUZ, CANUTO
(d) Two per centum (2%) to the Authority of the Freeport of Area M. DADULA, ROMEO L. DALDE, ZACARIAS DAMBAAN, ELISEO
294
of Bataan. (Emphasis supplied) DAPROZA, VIRGILIO P. DAWAL, TESIFREDO I. DE TOMAS,
Petitioners, therefore, are not deprived of revenues from the operations of GAMALLER P. DEANG, CARMELINO P. DEANG, DIOSDADO P.
economic zones within their respective territorial jurisdictions. DEANG, DOMINGO A. DEANG, FELIPE R. DEANG, JR., JULIETO S.
The national government ensured that loeal government units comprising DELA CRUZ, ELIEZER R. DELA TORRE, JEFFREY R. DELA TORRE,
295
economic zones shall retain their basic autonomy and identity. RAUL DEMONTEVERDE, FELIPE P. DENOLAN, RUBENCIO P.
All told, the PEZA is an instrumentality of the national DENOY, RODRIGO M. DERMIL, ROLANDO B. DIAZ, LORENZO
government.1âwphi1 Furthermore, the lands owned by the PEZA are real DIEGO, JOVENCIO DIEGO, SATURNINO DIEGO, GREGORIO DIONG,
properties owned by the Republic of the Philippines. The City of Lapu- AMADO R. DIZON, FE DIZON, VIRGILO M. DOMANTAY, LEO S.
Lapu and the Province of Bataan cannot collect real property taxes from DONATO, DOMINADOR L. DOSADO, NESTOR DUMALAG, FREDDIE
the PEZA. DURAN, SR., MARIO C. ECHIVERE, AQUILLO M. EMBRADORA,
WHEREFORE, the consolidated petitions are DENIED. MIGUEL EMNACE, RIO T. EMPAS, EFRAIM ENGLIS, ANICETO
SO ORDERED. ENOPIA, DIOCENE ENTECOSA, RUBENTITO D. ENTECOSA,
G.R. No. 125078 May 30, 2011 AVELINO C. ENTERO, FORTUNATA ENTRADA, ROGELIO P. EROY,
BERNABE L. NAVIDA, JOSE P. ABANGAN, JR., CEFERINO P. RODOLFO M. ESCAMILLA, SERGIO C. ESCANTILLA, LAZARO A.
ABARQUEZ, ORLANDITO A. ABISON, FELIPE ADAYA, ALBERTO R. ESPAÑOLA, EULOGIO M. ETURMA, PRIMO P. FERNANDEZ,
AFRICA, BENJAMIN M. ALBAO, FELIPE ALCANTARA, NUMERIANO EDILBERTO D. FERNANDO, GREGORIO S. FERNANDO, VICENTE P.
S. ALCARIA, FERNANDO C. ALEJADO, LEOPOLDO N. ALFONSO, FERRER, MARCELO T. FLOR, ANTONIO M. FLORES, REDENTOR T.
FLORO I. ALMODIEL, ANTONIO B. ALVARADO, ELEANOR FLOREZA, NORBERTO J. FUENTES, RICARDO C. GABUTAN,
AMOLATA, RODOLFO P. ANCORDA, TRIFINO F. ANDRADA, BERT PEDRO D.V. GALEOS, ARNULFO F. GALEOS, EDGARDO V.
B. ANOCHE, RAMON E. ANTECRISTO, ISAGANI D. ANTINO, GARCESA, BERNARDO P. GENTOBA, EDUARDO P. GENTOBA,
DOMINGO ANTOPINA, MANSUETO M. APARICIO, HERMINIGILDO VICTORIO B. GIDO, ROLANDO V. GIMENA, EARLWIN L. GINGOYO,
AQUINO, MARCELO S. AQUINO, JR., FELIPE P. ARANIA, ULYSES M. ERNESTO GOLEZ, JUANITO G. GONZAGA, ONOFRE GONZALES,
ARAS, ARSENIO ARCE, RUPERTO G. ARINZOL, MIGUEL G. AMADO J. GUMERE, LEONARDO M. GUSTO, ALEJANDRO G.
ARINZOL, EDGARADO P. ARONG, RODRIGO D.R. ASTRALABIO, HALILI, NOEL H. HERCEDA, EMILIO V. HERMONDO, CLAUDIO
RONNIE BACAYO, SOFRONIO BALINGIT, NELSON M. BALLENA, HIPOLITO, TORIBIO S ILLUSORIO, TEODURO G. IMPANG, JR., GIL
EMNIANO BALMONTE, MAXIMO M. BANGI, SALVADOR M. BANGI, A. JALBUNA, HERMIE L. JALICO, ARMANDO B. JAMERLAN,
HERMOGENES T. BARBECHO, ARSENIO B. BARBERO, DIOSDADO NARCISO JAPAY, LIBURO C. JAVINAS, ALEJANDO S. JIMENEZ,
BARREDO, VIRGILIO BASAS, ALEJANDRO G. BATULAN, DOMINGO FEDERICO T. JUCAR, NAPOLEON T. JUMALON, OSCAR JUNSAY,
A. BAUTISTA, VICTOR BAYANI, BENIGNO BESARES, RUFINO ANASTACIO D. LABANA, CARLOS C. LABAY, AVELINO L.
BETITO, GERARDO A. BONIAO, CARLO B. BUBUNGAN, FERNANDO LAFORTEZA, LOE LAGUMBAY, NORBETO D. LAMPERNIS,
B. BUENAVISTA, ALEJANDRINO H. BUENO, TOMAS P. BUENO, ROLANDO J. LAS PEÑAS, ISMAEL LASDOCE, RENOLO L.
LEONARDO M. BURDEOS, VICENTE P. BURGOS, MARCELINO J. LEBRILLA, CAMILO G. LEDRES, ANASTACIO LLANOS, ARMANDO
CABALUNA, DIOSDADO CABILING, EMETRIO C. CACHUELA, A. LLIDO, CARLITO LOPEZ, ARISTON LOS BAÑEZ, CONCISO L.
BRAULIO B. CADIVIDA, JR., SAMSON C. CAEL, DANIEL B. LOVITOS, ARQUILLANO M. LOZADA, RODOLFO C. LUMAKIN,
CAJURAO, REY A. CALISO, NORBERTO F. CALUMPAG, PRIMITIVO LUNTAO, JR., EMILIO S. MABASA, JR., JUANITO A.
! 78!
MACALISANG, TEOTIMO L. MADULIN, JOSEPH D. MAGALLON, JIMMY C. TORRIBIO, EDUARDO Y. TUCLAOD, JACINTO UDAL,
PEDRO P. MAGLASANG, MARIO G. MALAGAMBA, JAIME B. RICARDO M. URBANO, ERNESTO G. VAFLOR, FILOMENO E.
MAMARADLO, PANFILO A. MANADA, SR., RICARDO S. MANDANI, VALENZUELA, SALORIANO VELASCO, RODOLFO VIDAL, WALTER
CONCHITA MANDANI, ALBERTO T. MANGGA, ALEJANDRO A. VILLAFAÑE, DANTE VILLALVA, PERIGRINO P. VILLARAN, JESUS L.
MANSANES, RUFINO T. MANSANES, EUTIQUIO P. MANSANES, VILLARBA, ELEAZAR D. VILLARBA, JENNY T. VILLAVA, HENRY C.
ALCIO P. MARATAS, AGAPITO D. MARQUEZ, RICARDO R. VILLEGAS, DELFIN C. WALOG, RODOLFO YAMBAO, EDGAR A.
MASIGLAT, DENDERIA MATABANG, ARNELO N. MATILLANO, YARE, MANSUETO M. YBERA, EDUARDO G. YUMANG, HENRY R.
HERNANI C. MEJORADA, ROSITA MENDOZA, GREGORIO R. MESA, YUNGOT, ROMEO P. YUSON, ARSENIA ZABALA, FELIX N. ZABALA
RENATO N. MILLADO, ANTONIO L. MOCORRO, ALBERTO M. and GRACIANO ZAMORA, Petitioners,
MOLINA, JR., DOMINGO P. MONDIA, JUANITO P. MONDIA, vs.
RICARDO MONTAÑO, RAUL T. MONTEJO, ROGELIO MUNAR, HON. TEODORO A. DIZON, JR., Presiding Judge, Regional Trial
RODOLFO E. MUÑEZ, CRESENCIO NARCISO, PANFILO C. Court, Branch 37, General Santos City, SHELL OIL CO., DOW
NARCISO, BRICS P. NECOR, MOISES P. NICOLAS, NEMESIO G. CHEMICAL CO., OCCIDENTAL CHEMICAL CORP., STANDARD
NICOLAS, ALFREDO NOFIEL, FELIX T. NOVENA, MARCELO P. FRUIT CO., STANDARD FRUIT & STEAMSHIP CO., DOLE FOOD CO.,
OBTIAL, SR., TEODORO B. OCRETO, BIBIANO C. ODI, ALFREDO M. INC., DOLE FRESH FRUIT CO., DEL MONTE FRESH PRODUCE N.A.,
OPERIO, TEOTISTO B. OPON, IZRO M. ORACION, ALAN E. DEL MONTE TROPICAL FRUIT CO., CHIQUITA BRANDS
ORANAS, ELPEDIO T. OSIAS, ERNESTO M. PABIONA, NARCISO J. INTERNATIONAL, INC. and CHIQUITA BRANDS, INC., Respondents.
PADILLA, NELSON G. PADIOS, SR., FRNACISCO G. PAGUNTALAN, x - - - - - - - - - - - - - - - - - - - - - - -x
RENE B. PALENCIA, MICHAEL P. PALOMAR, VIRGILIO E. G.R. No. 125598
PANILAGAO, NOLITO C. PANULIN, ROMEO PARAGUAS, NESTOR THE DOW CHEMICAL COMPANY and OCCIDENTAL CHEMICAL
B. PASTERA, VICENTE Q. PEDAZO, EDGAR M. PEÑARANDA, CORPORATION, Petitioners,
ILUMINIDO B. PERACULLO, ANTONIO C. PEREZ, DOMINGO PEREZ, vs.
OSCAR C. PLEÑOS, ANTONIETO POLANCOS, SERAFIN G. PRIETO, BERNABE L. NAVIDA, JOSE P. ABANGAN, JR., CEFERINO P.
ZENAIDA PROVIDO, FERNANDO Y. PROVIDO, ERNESTO QUERO, ABARQUEZ, ORLANDITO A. ABISON, FELIPE ADAYA, ALBERTO R.
ELEAZAR QUIJARDO, WILLIAM U. QUINTOY, LAURO QUISTADIO, AFRICA, BENJAMIN M. ALBAO, FELIPE ALCANTARA, NUMERIANO
ROGELIO RABADON, MARCELINO M. RELIZAN, RAUL A. REYES, S. ALCARIA, FERNANDO C. ALEJADO, LEOPOLDO N. ALFONSO,
OCTAVIO F. REYES, EDDIE M. RINCOR, EMMANUEL RIVAS, FLORO I. ALMODIEL, ANTONIO B. ALVARADO, ELEANOR
RODULFO RIVAS, BIENVENIDO C. ROMANCA, JACINTO ROMOC, AMOLATA, RODOLFO P. ANCORDA, TRIFINO F. ANDRADA, BERT
ROMEO S. ROMUALDO, ALBERTO ROSARIO, ROMEO L. SABIDO, B. ANOCHE, RAMON E. ANTECRISTO, ISAGANI D. ANTINO,
SIMON SAGNIP, TIMOTEO SALIG, ROMAN G. SALIGONAN, DOMINGO ANTOPINA, MANSUETO M. APARICIO, HERMINIGILDO
VICTORINO SALOMON, GENEROSO J. SALONGKONG, RODOLFO AQUINO, MARCELO S. AQUINO, JR., FELIPE P. ARANIA, ULYSES M.
E. SALVANI, JIMMY A. SAMELIN, EDUARDO A. SAMELIN, ANDRES ARAS, ARSENIO ARCE, RUPERTO G. ARINZOL, MIGUEL G.
A. SAMELIN, GEORGE SAMELIN, ROMEO A. SARAOSOS, ARINZOL, EDGARADO P. ARONG, RODRIGO D.R. ASTRALABIO,
RUDIGELIO S. SARMIENTO, CIRILO SAYAANG, JARLO SAYSON, RONNIE BACAYO, SOFRONIO BALINGIT, NELSON M. BALLENA,
LEONCIO SERDONCILLO, RODOLFO C. SERRANO, NESTOR G. EMNIANO BALMONTE, MAXIMO M. BANGI, SALVADOR M. BANGI,
SEVILLA, SIMEON F. SIMBA, CATALINO S. SIMTIM, SERAFIN T. HERMOGENES T. BARBECHO, ARSENIO B. BARBERO, DIOSDADO
SINSUANGCO, EDUARDO A. SOLA, VICTORINO M. SOLOMON, BARREDO, VIRGILIO BASAS, ALEJANDRO G. BATULAN, DOMINGO
JAIME B. SUFICIENCIA, LYNDON SUMAJIT, ALFREDO P. SUMAJIT, A. BAUTISTA, VICTOR BAYANI, BENIGNO BESARES, RUFINO
ALFREDO L. SUMAJIT, PEDRO A. SUMARAGO, ERNESTO SUMILE, BETITO, GERARDO A. BONIAO, CARLO B. BUBUNGAN, FERNANDO
NESTOR S. SUMOG-OY, MANUEL T. SUPAS, WILFREDO A. B. BUENAVISTA, ALEJANDRINO H. BUENO, TOMAS P. BUENO,
TABAQUE, CONSTANCIO L. TACULAD, EUFROCINO A. TAGOTO, LEONARDO M. BURDEOS, VICENTE P. BURGOS, MARCELINO J.
JR., SERAPIO TAHITIT, PANTALEON T. TAMASE, ERNESTO TARRE, CABALUNA, DIOSDADO CABILING, EMETRIO C. CACHUELA,
MAGNO E. TATOY, AVELINO TAYAPAD, SAMUEL S. TERRADO, BRAULIO B. CADIVIDA, JR., SAMSON C. CAEL, DANIEL B.
APOLINARIO B. TICO, ORLANDO TINACO, ALBERT G. TINAY, CAJURAO, REY A. CALISO, NORBERTO F. CALUMPAG,
ANTONIO TOLEDO, ANTONIO M. TORREGOSA, ISABELO TORRES, CELESTINO CALUMPAG, LORETO CAMACHO, VICTORIANO
! 79!
CANETE, DOMINADOR P. CANTILLO, FRUCTUSO P. CARBAJOSA, PEDRO P. MAGLASANG, MARIO G. MALAGAMBA, JAIME B.
VICTORINO S. CARLOS, VICTOR CARLOS, GEORGE M. CASSION, MAMARADLO, PANFILO A. MANADA, SR., RICARDO S. MANDANI,
JAIME S. CASTAÑARES, FLAVIANO C. CASTAÑARES, ELPIDIO CONCHITA MANDANI, ALBERTO T. MANGGA, ALEJANDRO A.
CATUBAY, NATHANIEL B. CAUSANG, BEOFIL B. CAUSING, MANSANES, RUFINO T. MANSANES, EUTIQUIO P. MANSANES,
ADRIANO R. CEJAS, CIRILO G. CERERA, SR., CRISTITUTO M. ALCIO P. MARATAS, AGAPITO D. MARQUEZ, RICARDO R.
CEREZO, DANTE V. CONCHA, ALBERT CORNELIO, CESAR MASIGLAT, DENDERIA MATABANG, ARNELO N. MATILLANO,
CORTES, NOEL Y. CORTEZ, SERNUE CREDO, CORNELIO A. HERNANI C. MEJORADA, ROSITA MENDOZA, GREGORIO R. MESA,
CRESENCIO, ALEX CRUZ, ROGER CRUZ, RANSAM CRUZ, CANUTO RENATO N. MILLADO, ANTONIO L. MOCORRO, ALBERTO M.
M. DADULA, ROMEO L. DALDE, ZACARIAS DAMBAAN, ELISEO MOLINA, JR., DOMINGO P. MONDIA, JUANITO P. MONDIA,
DAPROZA, VIRGILIO P. DAWAL, TESIFREDO I. DE TOMAS, RICARDO MONTAÑO, RAUL T. MONTEJO, ROGELIO MUNAR,
GAMALLER P. DEANG, CARMELINO P. DEANG, DIOSDADO P. RODOLFO E. MUÑEZ, CRESENCIO NARCISO, PANFILO C.
DEANG, DOMINGO A. DEANG, FELIPE R. DEANG, JR., JULIETO S. NARCISO, BRICS P. NECOR, MOISES P. NICOLAS, NEMESIO G.
DELA CRUZ, ELIEZER R. DELA TORRE, JEFFREY R. DELA TORRE, NICOLAS, ALFREDO NOFIEL, FELIX T. NOVENA, MARCELO P.
RAUL DEMONTEVERDE, FELIPE P. DENOLAN, RUBENCIO P. OBTIAL, SR., TEODORO B. OCRETO, BIBIANO C. ODI, ALFREDO M.
DENOY, RODRIGO M. DERMIL, ROLANDO B. DIAZ, LORENZO OPERIO, TEOTISTO B. OPON, IZRO M. ORACION, ALAN E.
DIEGO, JOVENCIO DIEGO, SATURNINO DIEGO, GREGORIO DIONG, ORANAS, ELPEDIO T. OSIAS, ERNESTO M. PABIONA, NARCISO J.
AMADO R. DIZON, FE DIZON, VIRGILO M. DOMANTAY, LEO S. PADILLA, NELSON G. PADIOS, SR., FRANCISCO G. PAGUNTALAN,
DONATO, DOMINADOR L. DOSADO, NESTOR DUMALAG, FREDDIE RENE B. PALENCIA, MICHAEL P. PALOMAR, VIRGILIO E.
DURAN, SR., MARIO C. ECHIVERE, AQUILLO M. EMBRADORA, PANILAGAO, NOLITO C. PANULIN, ROMEO PARAGUAS, NESTOR
MIGUEL EMNACE, RIO T. EMPAS, EFRAIM ENGLIS, ANICETO B. PASTERA, VICENTE Q. PEDAZO, EDGAR M. PEÑARANDA,
ENOPIA, DIOCENE ENTECOSA, RUBENTITO D. ENTECOSA, ILUMINIDO B. PERACULLO, ANTONIO C. PEREZ, DOMINGO PEREZ,
AVELINO C. ENTERO, FORTUNATA ENTRADA, ROGELIO P. EROY, OSCAR C. PLEÑOS, ANTONIETO POLANCOS, SERAFIN G. PRIETO,
RODOLFO M. ESCAMILLA, SERGIO C. ESCANTILLA, LAZARO A. ZENAIDA PROVIDO, FERNANDO Y. PROVIDO, ERNESTO QUERO,
ESPAÑOLA, EULOGIO M. ETURMA, PRIMO P. FERNANDEZ, ELEAZAR QUIJARDO, WILLIAM U. QUINTOY, LAURO QUISTADIO,
EDILBERTO D. FERNANDO, GREGORIO S. FERNANDO, VICENTE P. ROGELIO RABADON, MARCELINO M. RELIZAN, RAUL A. REYES,
FERRER, MARCELO T. FLOR, ANTONIO M. FLORES, REDENTOR T. OCTAVIO F. REYES, EDDIE M. RINCOR, EMMANUEL RIVAS,
FLOREZA, NORBERTO J. FUENTES, RICARDO C. GABUTAN, RODULFO RIVAS, BIENVENIDO C. ROMANCA, JACINTO ROMOC,
PEDRO D.V. GALEOS, ARNULFO F. GALEOS, EDGARDO V. ROMEO S. ROMUALDO, ALBERTO ROSARIO, ROMEO L. SABIDO,
GARCESA, BERNARDO P. GENTOBA, EDUARDO P. GENTOBA, SIMON SAGNIP, TIMOTEO SALIG, ROMAN B. SALIGONAN,
VICTORIO B. GIDO, ROLANDO V. GIMENA, EARLWIN L. GINGOYO, VICTORINO SALOMON, GENEROSO M. SALONGKONG, RODOLFO
ERNESTO GOLEZ, JUANITO G. GONZAGA, ONOFRE GONZALES, E. SALVANI, JIMMY A. SAMELIN, EDUARDO A. SAMELIN, ANDRES
AMADO J. GUMERE, LEONARDO M. GUSTO, ALEJANDRO G. A. SAMELIN, GEORGE SAMELIN, ROMEO A. SARAOSOS,
HALILI, NOEL H. HERCEDA, EMILIO V. HERMONDO, CLAUDIO RUDIGELIO S. SARMIENTO, CIRILO SAYAANG, JARLO SAYSON,
HIPOLITO, TORIBIO S ILLUSORIO, TEODURO G. IMPANG, JR., GIL LEONCIO SERDONCILLO, RODOLFO C. SERRANO, NESTOR G.
A. JALBUNA, HERMIE L. JALICO, ARMANDO B. JAMERLAN, SEVILLA, SIMEON F. SIMBA, CATALINO S. SIMTIM, SERAFIN T.
NARCISO JAPAY, LIBURO C. JAVINAS, ALEJANDO S. JIMENEZ, SINSUANGCO, EDUARDO A. SOLA, VICTORINO M. SOLOMON,
FEDERICO T. JUCAR, NAPOLEON T. JUMALON, OSCAR JUNSAY, JAIME B. SUFICIENCIA, LYNDON SUMAJIT, ALFREDO P. SUMAJIT,
ANASTACIO D. LABANA, CARLOS C. LABAY, AVELINO L. ALFREDO L. SUMAJIT, PEDRO A. SUMARAGO, ERNESTO SUMILE,
LAFORTEZA, LOE LAGUMBAY, NORBETO D. LAMPERNIS, NESTOR S. SUMOG-OY, MANUEL T. SUPAS, WILFREDO A.
ROLANDO J. LAS PEÑAS, ISMAEL LASDOCE, RENOLO L. TABAQUE, CONSTANCIO L. TACULAD, EUFROCINO A. TAGOTO,
LEBRILLA, CAMILO G. LEDRES, ANASTACIO LLANOS, ARMANDO JR., SERAPIO TAHITIT, PANTALEON T. TAMASE, ERNESTO TARRE,
A. LLIDO, CARLITO LOPEZ, ARISTON LOS BAÑEZ, CONCISO L. MAGNO E. TATOY, AVELINO TAYAPAD, SAMUEL S. TERRADO,
LOVITOS, ARQUILLANO M. LOZADA, RODOLFO C. LUMAKIN, APOLINARIO B. TICO, ORLANDO TINACO, ALBERT G. TINAY,
PRIMITIVO LUNTAO, JR., EMILIO S. MABASA, JR., JUANITO A. ANTONIO TOLEDO, ANTONIO M. TORREGOSA, ISABELO TORRES,
MACALISANG, TEOTIMO L. MADULIN, JOSEPH D. MAGALLON, JIMMY C. TORRIBIO, EDUARDO Y. TUCLAOD, JACINTO UDAL,
! 80!
RICARDO M. URBANO, ERNESTO G. VAFLOR, FILOMENO E. MONTAJES, CESAR B. MONTERO, CLEMENTE NAKANO, RODRIGO
VALENZUELA, SALORIANO VELASCO, RODOLFO VIDAL, WALTER H. NALAS, EMELIANO C. NAPITAN, JUANITO B. NARON, JR., LUCIO
VILLAFAÑE, DANTE VILLALVA, PERIGRINO P. VILLARAN, JESUS L. NASAKA, TEOFILO NUNEZ, JORGE M. OLORVIDA, CANULO P.
VILLARBA, ELEAZAR D. VILLARBA, JENNY T. VILLAVA, HENRY C. OLOY, DOROTEO S. OMBRETE, TEOFILIO OMOSURA, MIGUEL
VILLEGAS, DELFIN C. WALOG, RODOLFO YAMBAO, EDGAR A. ORALO, SUSANTO C. OTANA, JR., CHARLIE P. PADICA, ALFREDO
YARE, MANSUETO M. YBERA, EDUARDO G. YUMANG, HENRY R. P. PALASPAS, CATALINO C. PANA, ERNESTO M. PASCUAL,
YUNGOT, ROMEO P. YUSON, ARSENIA ZABALA, FELIX N. ZABALA, BIENVENIDO PAYAG, RESURRECCION PENOS, PEDRO PILAGO,
and GRACIANO ZAMORA, Respondents. ROMEO PRESBITERO, OMEO L. PRIEGO, ELADIO QUIBOL, JESUS
x - - - - - - - - - - - - - - - - - - - - - - -x D. QUIBOL, MAGNO QUIZON, DIONISIO RAMOS, MAMERTO
G.R. No. 126654 RANISES, NESTOR B. REBUYA, RODRIGO REQUILMEN, ISIDRO
CORNELIO ABELLA, JR., IRENEO AGABATU, PRUDENCIO RETANAL, CARLITO ROBLE, GLICERIO V. ROSETE, TINOY G.
ALDEPOLIA, ARTEMIO ALEMAN, FIDEL ALLERA, DOMINGO SABINO, MELCHOR SALIGUMBA, SILVERIO SILANGAN, ROBERTO
ALONZO, CORNELIO AMORA, FELIPE G. AMORA, LEOPOLDO SIVA, PACITA SUYMAN, CANILO TAJON, AVELINO TATAPOD,
AMORADO, MARCELINO ANDIMAT, JORGE ANDOY, MARGARITO ROMEO TAYCO, RENATO TAYCO, CONRADO TECSON, AGAPITO
R. ANGELIA, GREGOTIO APRIANO, ALFREDO A. ARARAO, TECSON, ROMAN. E. TEJERO, ALFREDO TILANDOCA, CARLOS B.
BONIFACIO L. ARTIGAS, JERSON ASUAL, SERAFIN AZUCENA, TIMA, HERMONEGES TIRADOR, JOSELITO TIRO, PASTOR T.
FELIX M. BADOY, JULIAN J. BAHALLA, REYNALDO BAHAYA, TUNGKO, LEANDRO B. TURCAL, VICENTE URQUIZA, VICENTE
ANTONIO L. BALDAGO, CESAR N. BALTAZAR, DOMINADO A. VILLA, ANTONIO P. VILLARAIZ, LEOPOLDO VILLAVITO and
BARING, ANTIPAS A. BATINGAL, MARCIANO NATINGAL, MARINO SAMUEL M. VILLEGAS, Petitioners,
BIBANCO, LEANDRO BILIRAN, MARGARITO BLANCO, CATALINO vs.
BONGO, MELCHOR BRIGOLE, ELISEO BRINA, ROBERTO BRINA, THE HON. ROMEO D. MARASIGAN, Presiding Judge of Regional
LUIS BUGHAO, EDUARDO L. BURGUINZO, CELSO M. BUSIA, Trial Court, Branch 16, Davao City, SHELL OIL CO., DOW CHEMICAL
RPDITO CABAGTE, RICARADO C. CABALLES, CARLITO A. CO., OCCIDENTAL CHEMICAL CORP., STANDARD FRUIT CO.,
CAINDOC, CANDIDO CALO, JR., PEDRITO CAMPAS, FERNANDO R. STANDARD FRUIT & STEAMSHIP CO., DOLE FOOD CO., INC., DOLE
CAPAROSO, DANILO CARILLO, BONIFACIO M. CATCHA, FRANKLIN FRESH FRUIT CO., DEL MONTE FRESH PRODUCE N.A., DEL
CLARAS, JOSE F. COLLAMAT, BERNARDO M. COMPENDIO, MONTE TROPICAL FRUIT CO., CHIQUITA BRANDS
CORNELIO COSTILLAS, ENERIO R. DAGAME, FELIMON DEBUMA, INTERNATIONAL, INC. and CHIQUITA BRANDS, INC., Respondents.
JR., RICADO C. DEIPARIME, GREGORIO S. DE LA PENA, JOSE G. x - - - - - - - - - - - - - - - - - - - - - - -x
DELUAO, JR., ELPEDIO A. DIAZ, QUINTINO DISIPULO, JR., CESAR G.R. No. 127856
G. DONAYRE, JOSE DULABAY, JAIRO DUQUIZA, ANTONIO DEL MONTE FRESH PRODUCE N.A. and DEL MONTE TROPICAL
ENGBINO, ALFREDO ESPINOSA, ALONZO FAILOG, JAIME FRUIT CO., Petitioners,
FEROLINO, RODOLFO L. GABITO, PEDRO G. GEMENTIZA, vs.
RICARDO A. GEROLAGA, RODULFO G. GEROY, ROGELIO THE REGIONAL TRIAL COURT OF DAVAO CITY, BRANCHES 16
GONZAGA, ROLANDO GONZALES, MODESTO M. GODELOSAO, AND 13, CORNELIO ABELLA, JR., IRENEO AGABATU, PRUDENCIO
HECTOR GUMBAN, CAMILO HINAG, LECERIO IGBALIC, SILVERIO ALDEPOLIA, ARTEMIO ALEMAN, FIDEL ALLERA, DOMINGO
E. IGCALINOS, ALFREDO INTOD, OLEGARIO IYUMA, DOMINGO B. ALONZO, CORNELIO AMORA, FELIPE G. AMORA, LEOPOLDO
JAGMOC, JR., EDUARDO JARGUE, ROLANDO A. LABASON, AMORADO, MARCELINO ANDIMAT, JORGE ANDOY, MARGARITO
ROLANDO LACNO, VIRGILIO A. LADURA, CONSTANCIO M. R. ANGELIA, GREGOTIO APRIANO, ALFREDO A. ARARAO,
LAGURA, FRANCISCO LAMBAN, ENRIQUE LAQUERO, LUCIO B. BONIFACIO L. ARTIGAS, JERSON ASUAL, SERAFIN AZUCENA,
LASACA, SISINO LAURDEN, VIVENCIO LAWANGON, ANECITO FELIX M. BADOY, JULIAN J. BAHALLA, REYNALDO BAHAYA,
LAYAN, FERNANDO P. LAYAO, MARDENIO LAYAO, NEMENCIO C. ANTONIO L. BALDAGO, CESAR N. BALTAZAR, DOMINADO A.
LINAO, PEDRO LOCION, ENERIO LOOD, DIOSDADO MADATE, BARING, ANTIPAS A. BATINGAL, MARCIANO NATINGAL, MARINO
RAMON MAGDOSA, NILO MAGLINTE, MARINO G. MALINAO, BIBANCO, LEANDRO BILIRAN, MARGARITO BLANCO, CATALINO
CARLITO MANACAP, AURELIO A. MARO, CRISOSTOMO R. BONGO, MELCHOR BRIGOLE, ELISEO BRINA, ROBERTO BRINA,
MIJARES, CESAR MONAPCO, SILVANO MONCANO, EMILIO LUIS BUGHAO, EDUARDO L. BURGUINZO, CELSO M. BUSIA,
! 81!
RPDITO CABAGTE, RICARADO C. CABALLES, CARLITO A. CHIQUITA BRANDS, INC., and CHIQUITA BRANDS
CAINDOC, CANDIDO CALO, JR., PEDRITO CAMPAS, FERNANDO R. INTERNATIONAL, INC., Petitioners,
CAPAROSO, DANILO CARILLO, BONIFACIO M. CATCHA, FRANKLIN vs.
CLARAS, JOSE F. COLLAMAT, BERNARDO M. COMPENDIO, HON. ANITA ALFELOR-ALAGABAN, in her capacity as Presiding
CORNELIO COSTILLAS, ENERIO R. DAGAME, FELIMON DEBUMA, Judge of the Regional Trial Court, Davao City, Branch 13,
JR., RICADO C. DEIPARIME, GREGORIO S. DE LA PENA, JOSE G. CORNELIO ABELLA, JR., IRENEO AGABATU, PRUDENCIO
DELUAO, JR., ELPEDIO A. DIAZ, QUINTINO DISIPULO, JR., CESAR ALDEPOLIA, ARTEMIO ALEMAN, FIDEL ALLERA, DOMINGO
G. DONAYRE, JOSE DULABAY, JAIRO DUQUIZA, ANTONIO ALONZO, CORNELIO AMORA, FELIPE G. AMORA, LEOPOLDO
ENGBINO, ALFREDO ESPINOSA, ALONZO FAILOG, JAIME AMORADO, MARCELINO ANDIMAT, JORGE ANDOY, MARGARITO
FEROLINO, RODOLFO L. GABITO, PEDRO G. GEMENTIZA, R. ANGELIA, GREGOTIO APRIANO, ALFREDO A. ARARAO,
RICARDO A. GEROLAGA, RODULFO G. GEROY, ROGELIO BONIFACIO L. ARTIGAS, JERSON ASUAL, SERAFIN AZUCENA,
GONZAGA, ROLANDO GONZALES, MODESTO M. GODELOSAO, FELIX M. BADOY, JULIAN J. BAHALLA, REYNALDO BAHAYA,
HECTOR GUMBAN, CAMILO HINAG, LECERIO IGBALIC, SILVERIO ANTONIO L. BALDAGO, CESAR N. BALTAZAR, DOMINADO A.
E. IGCALINOS, ALFREDO INTOD, OLEGARIO IYUMA, DOMINGO B. BARING, ANTIPAS A. BATINGAL, MARCIANO NATINGAL, MARINO
JAGMOC, JR., EDUARDO JARGUE, ROLANDO A. LABASON, BIBANCO, LEANDRO BILIRAN, MARGARITO BLANCO, CATALINO
ROLANDO LACNO, VIRGILIO A. LADURA, CONSTANCIO M. BONGO, MELCHOR BRIGOLE, ELISEO BRINA, ROBERTO BRINA,
LAGURA, FRANCISCO LAMBAN, ENRIQUE LAQUERO, LUCIO B. LUIS BUGHAO, EDUARDO L. BURGUINZO, CELSO M. BUSIA,
LASACA, SISINO LAURDEN, VIVENCIO LAWANGON, ANECITO RPDITO CABAGTE, RICARADO C. CABALLES, CARLITO A.
LAYAN, FERNANDO P. LAYAO, MARDENIO LAYAO, NEMENCIO C. CAINDOC, CANDIDO CALO, JR., PEDRITO CAMPAS, FERNANDO R.
LINAO, PEDRO LOCION, ENERIO LOOD, DIOSDADO MADATE, CAPAROSO, DANILO CARILLO, BONIFACIO M. CATCHA, FRANKLIN
RAMON MAGDOSA, NILO MAGLINTE, MARINO G. MALINAO, CLARAS, JOSE F. COLLAMAT, BERNARDO M. COMPENDIO,
CARLITO MANACAP, AURELIO A. MARO, CRISOSTOMO R. CORNELIO COSTILLAS, ENERIO R. DAGAME, FELIMON DEBUMA,
MIJARES, CESAR MONAPCO, SILVANO MONCANO, EMILIO JR., RICADO C. DEIPARIME, GREGORIO S. DE LA PENA, JOSE G.
MONTAJES, CESAR B. MONTERO, CLEMENTE NAKANO, RODRIGO DELUAO, JR., ELPEDIO A. DIAZ, QUINTINO DISIPULO, JR., CESAR
H. NALAS, EMELIANO C. NAPITAN, JUANITO B. NARON, JR., LUCIO G. DONAYRE, JOSE DULABAY, JAIRO DUQUIZA, ANTONIO
NASAKA, TEOFILO NUNEZ, JORGE M. OLORVIDA, CANULO P. ENGBINO, ALFREDO ESPINOSA, ALONZO FAILOG, JAIME
OLOY, DOROTEO S. OMBRETE, TEOFILIO OMOSURA, MIGUEL FEROLINO, RODOLFO L. GABITO, PEDRO G. GEMENTIZA,
ORALO, SUSANTO C. OTANA, JR., CHARLIE P. PADICA, ALFREDO RICARDO A. GEROLAGA, RODULFO G. GEROY, ROGELIO
P. PALASPAS, CATALINO C. PANA, ERNESTO M. PASCUAL, GONZAGA, ROLANDO GONZALES, MODESTO M. GODELOSAO,
BIENVENIDO PAYAG, RESURRECCION PENOS, PEDRO PILAGO, HECTOR GUMBAN, CAMILO HINAG, LECERIO IGBALIC, SILVERIO
ROMEO PRESBITERO, OMEO L. PRIEGO, ELADIO QUIBOL, JESUS E. IGCALINOS, ALFREDO INTOD, OLEGARIO IYUMA, DOMINGO B.
D. QUIBOL, MAGNO QUIZON, DIONISIO RAMOS, MAMERTO JAGMOC, JR., EDUARDO JARGUE, ROLANDO A. LABASON,
RANISES, NESTOR B. REBUYA, RODRIGO REQUILMEN, ISIDRO ROLANDO LACNO, VIRGILIO A. LADURA, CONSTANCIO M.
RETANAL, CARLITO ROBLE, GLICERIO V. ROSETE, TINOY G. LAGURA, FRANCISCO LAMBAN, ENRIQUE LAQUERO, LUCIO B.
SABINO, MELCHOR SALIGUMBA, SILVERIO SILANGAN, ROBERTO LASACA, SISINO LAURDEN, VIVENCIO LAWANGON, ANECITO
SIVA, PACITA SUYMAN, CANILO TAJON, AVELINO TATAPOD, LAYAN, FERNANDO P. LAYAO, MARDENIO LAYAO, NEMENCIO C.
ROMEO TAYCO, RENATO TAYCO, CONRADO TECSON, AGAPITO LINAO, PEDRO LOCION, ENERIO LOOD, DIOSDADO MADATE,
TECSON, ROMAN. E. TEJERO, ALFREDO TILANDOCA, CARLOS B. RAMON MAGDOSA, NILO MAGLINTE, MARINO G. MALINAO,
TIMA, HERMONEGES TIRADOR, JOSELITO TIRO, PASTOR T. CARLITO MANACAP, AURELIO A. MARO, CRISOSTOMO R.
TUNGKO, LEANDRO B. TURCAL, VICENTE URQUIZA, VICENTE MIJARES, CESAR MONAPCO, SILVANO MONCANO, EMILIO
VILLA, ANTONIO P. VILLARAIZ, LEOPOLDO VILLAVITO and MONTAJES, CESAR B. MONTERO, CLEMENTE NAKANO, RODRIGO
SAMUEL M. VILLEGAS, Respondents. H. NALAS, EMELIANO C. NAPITAN, JUANITO B. NARON, JR., LUCIO
x - - - - - - - - - - - - - - - - - - - - - - -x NASAKA, TEOFILO NUNEZ, JORGE M. OLORVIDA, CANULO P.
G.R. No. 128398 OLOY, DOROTEO S. OMBRETE, TEOFILIO OMOSURA, MIGUEL
ORALO, SUSANTO C. OTANA, JR., CHARLIE P. PADICA, ALFREDO
! 82!
P. PALASPAS, CATALINO C. PANA, ERNESTO M. PASCUAL, the Philippines were "Jorge Colindres Carcamo, et al. v. Shell Oil Co., et
BIENVENIDO PAYAG, RESURRECCION PENOS, PEDRO PILAGO, al.," which was docketed as Civil Action No. H-94-1359, and "Juan
ROMEO PRESBITERO, OMEO L. PRIEGO, ELADIO QUIBOL, JESUS Ramon Valdez, et al. v. Shell Oil Co., et al.," which was docketed as Civil
D. QUIBOL, MAGNO QUIZON, DIONISIO RAMOS, MAMERTO Action No. H-95-1356. The defendants in the consolidated cases prayed
RANISES, NESTOR B. REBUYA, RODRIGO REQUILMEN, ISIDRO for the dismissal of all the actions under the doctrine of forum non
RETANAL, CARLITO ROBLE, GLICERIO V. ROSETE, TINOY G. conveniens.
SABINO, MELCHOR SALIGUMBA, SILVERIO SILANGAN, ROBERTO In a Memorandum and Order dated July 11, 1995, the Federal District
SIVA, PACITA SUYMAN, CANILO TAJON, AVELINO TATAPOD, Court conditionally granted the defendants’ motion to dismiss. Pertinently,
ROMEO TAYCO, RENATO TAYCO, CONRADO TECSON, AGAPITO the court ordered that:
TECSON, ROMAN. E. TEJERO, ALFREDO TILANDOCA, CARLOS B. Delgado, Jorge Carcamo, Valdez and Isae Carcamo will be dismissed 90
TIMA, HERMONEGES TIRADOR, JOSELITO TIRO, PASTOR T. days after the entry of this Memorandum and Order provided that
TUNGKO, LEANDRO B. TURCAL, VICENTE URQUIZA, VICENTE defendants and third- and fourth-party defendants have:
VILLA, ANTONIO P. VILLARAIZ, LEOPOLDO VILLAVITO and (1) participated in expedited discovery in the United States xxx;
SAMUEL M. VILLEGAS, Respondents. (2) either waived or accepted service of process and waived any
DECISION other jurisdictional defense within 40 days after the entry of this
LEONARDO-DE CASTRO, J.: Memorandum and Order in any action commenced by a plaintiff
Before the Court are consolidated Petitions for Review on Certiorari in these actions in his home country or the country in which his
under Rule 45 of the Rules of Court, which arose out of two civil cases injury occurred. Any plaintiff desiring to bring such an action will
that were filed in different courts but whose factual background and do so within 30 days after the entry of this Memorandum and
issues are closely intertwined. Order;
1 2
The petitions in G.R. Nos. 125078 and 125598 both assail the (3) waived within 40 days after the entry of this Memorandum and
3
Order dated May 20, 1996 of the Regional Trial Court (RTC) of General Order any limitations-based defense that has matured since the
Santos City, Branch 37, in Civil Case No. 5617. The said Order decreed commencement of these actions in the courts of Texas;
the dismissal of the case in view of the perceived lack of jurisdiction of the (4) stipulated within 40 days after the entry of this Memorandum
RTC over the subject matter of the complaint. The petition in G.R. No. and Order that any discovery conducted during the pendency of
4
125598 also challenges the Orders dated June 4, 1996 and July 9, these actions may be used in any foreign proceeding to the same
5
1996, which held that the RTC of General Santos City no longer had extent as if it had been conducted in proceedings initiated there;
jurisdiction to proceed with Civil Case No. 5617. and
6 7
On the other hand, the petitions in G.R. Nos. 126654, 127856, and (5) submitted within 40 days after the entry of this Memorandum
8 9
128398 seek the reversal of the Order dated October 1, 1996 of the and Order an agreement binding them to satisfy any final
RTC of Davao City, Branch 16, in Civil Case No. 24,251-96, which also judgment rendered in favor of plaintiffs by a foreign court.
dismissed the case on the ground of lack of jurisdiction. xxxx
G.R. Nos. 125078, 125598, 126654, 127856, and 128398 were Notwithstanding the dismissals that may result from this Memorandum
10
consolidated in the Resolutions dated February 10, 1997, April 28, and Order, in the event that the highest court of any foreign country finally
11 12
1997 and March 10, 1999. affirms the dismissal for lack of jurisdiction of an action commenced by a
The factual antecedents of the petitions are as follows: plaintiff in these actions in his home country or the country in which he
Proceedings before the Texas Courts was injured, that plaintiff may return to this court and, upon proper
Beginning 1993, a number of personal injury suits were filed in different motion, the court will resume jurisdiction over the action as if the case
13
Texas state courts by citizens of twelve foreign countries, including the had never been dismissed for [forum non conveniens].
Philippines. The thousands of plaintiffs sought damages for injuries they Civil Case No. 5617 before the RTC of General Santos City and G.R.
allegedly sustained from their exposure to dibromochloropropane Nos. 125078 and 125598
(DBCP), a chemical used to kill nematodes (worms), while working on In accordance with the above Memorandum and Order, a total of 336
farms in 23 foreign countries. The cases were eventually transferred to, plaintiffs from General Santos City (the petitioners in G.R. No. 125078,
14
and consolidated in, the Federal District Court for the Southern District of hereinafter referred to as NAVIDA, et al.) filed a Joint Complaint in the
Texas, Houston Division. The cases therein that involved plaintiffs from RTC of General Santos City on August 10, 1995. The case was docketed
! 83!
as Civil Case No. 5617. Named as defendants therein were: Shell Oil Co. their distribution through sale or other disposition, resulting in their
(SHELL); Dow Chemical Co. (DOW); Occidental Chemical Corp. becoming part of the stream of commerce.
(OCCIDENTAL); Dole Food Co., Inc., Dole Fresh Fruit Co., Standard Accordingly, the subject matter stated in the complaint and which is
Fruit Co., Standard Fruit and Steamship Co. (hereinafter collectively uniquely particular to the present case, consisted of activity or course of
referred to as DOLE); Chiquita Brands, Inc. and Chiquita Brands conduct engaged in by foreign defendants outside Philippine territory,
International, Inc. (CHIQUITA); Del Monte Fresh Produce N.A. and Del hence, outside and beyond the jurisdiction of Philippine Courts, including
19
Monte Tropical Fruit Co. (hereinafter collectively referred to as DEL the present Regional Trial Court.
MONTE); Dead Sea Bromine Co., Ltd.; Ameribrom, Inc.; Bromine Second, the RTC of General Santos City declared that the tort alleged by
Compounds, Ltd.; and Amvac Chemical Corp. (The aforementioned Navida, et al., in their complaint is a tort category that is not recognized in
defendants are hereinafter collectively referred to as defendant Philippine laws. Said the trial court:
companies.) THE TORT ASSERTED IN THE PRESENT COMPLAINT AGAINST
Navida, et al., prayed for the payment of damages in view of the illnesses DEFENDANT FOREIGN COMPANIES IS NOT WITHIN THE SUBJECT
and injuries to the reproductive systems which they allegedly suffered MATTER JURISDICTION OF THE REGIONAL TRIAL COURT,
because of their exposure to DBCP. They claimed, among others, that BECAUSE IT IS NOT A TORT CATEGORY WITHIN THE PURVIEW OF
they were exposed to this chemical during the early 1970’s up to the early THE PHILIPPINE LAW
1980’s when they used the same in the banana plantations where they The specific tort asserted against defendant foreign companies in the
worked at; and/or when they resided within the agricultural area where present complaint is product liability tort. When the averments in the
such chemical was used. Navida, et al., claimed that their illnesses and present complaint are examined in terms of the particular categories of
injuries were due to the fault or negligence of each of the defendant tort recognized in the Philippine Civil Code, it becomes stark clear that
companies in that they produced, sold and/or otherwise put into the such averments describe and identify the category of specific tort known
stream of commerce DBCP-containing products. According to NAVIDA, as product liability tort. This is necessarily so, because it is
et al., they were allowed to be exposed to the said products, which the the product manufactured by defendant foreign companies, which is
defendant companies knew, or ought to have known, were highly asserted to be the proximate cause of the damages sustained by the
injurious to the former’s health and well-being. plaintiff workers, and the liability of the defendant foreign companies, is
Instead of answering the complaint, most of the defendant companies premised on being the manufacturer of the pesticides.
15
respectively filed their Motions for Bill of Particulars. During the It is clear, therefore, that the Regional Trial Court has jurisdiction over the
pendency of the motions, on March 13, 1996, NAVIDA, et al., filed an present case, if and only if the Civil Code of the Philippines, or a
16
Amended Joint Complaint, excluding Dead Sea Bromine Co., Ltd., suppletory special law prescribes a product liability tort, inclusive of and
Ameribrom, Inc., Bromine Compounds, Ltd. and Amvac Chemical Corp. comprehending the specific tort described in the complaint of the plaintiff
20
as party defendants. workers.
Again, the remaining defendant companies filed their various Motions for Third, the RTC of General Santos City adjudged that Navida, et al., were
17
Bill of Particulars. On May 15, 1996, DOW filed an Answer with coerced into submitting their case to the Philippine courts, viz:
18
Counterclaim. FILING OF CASES IN THE PHILIPPINES - COERCED AND
On May 20, 1996, without resolving the motions filed by the parties, the ANOMALOUS
RTC of General Santos City issued an Order dismissing the complaint. The Court views that the plaintiffs did not freely choose to file the instant
First, the trial court determined that it did not have jurisdiction to hear the action, but rather were coerced to do so, merely to comply with the U.S.
case, to wit: District Court’s Order dated July 11, 1995, and in order to keep open to
21
THE COMPLAINT FOR DAMAGES FILED WITH THE REGIONAL TRIAL the plaintiffs the opportunity to return to the U.S. District Court.
COURT SHOULD BE DISMISSED FOR LACK OF JURISDICTION Fourth, the trial court ascribed little significance to the voluntary
xxxx appearance of the defendant companies therein, thus:
The substance of the cause of action as stated in the complaint against THE DEFENDANTS’ SUBMISSION TO JURISDICTION IS
the defendant foreign companies cites activity on their part which took CONDITIONAL AS IT IS ILLUSORY
place abroad and had occurred outside and beyond the territorial domain Defendants have appointed their agents authorized to accept service of
of the Philippines. These acts of defendants cited in the complaint summons/processes in the Philippines pursuant to the agreement in the
included the manufacture of pesticides, their packaging in containers, U.S. court that defendants will voluntarily submit to the jurisdiction of this
! 84!
court. While it is true that this court acquires jurisdiction over persons of pendencia x x x; the subsequent case must be dismissed. Applying the
the defendants through their voluntary appearance, it appears that such foregoing [precept] to the case-at-bar, this court concludes that since the
voluntary appearance of the defendants in this case is conditional. Thus case between the parties in the U.S. is still pending, then this case is
23
in the "Defendants’ Amended Agreement Regarding Conditions of barred by the rule on "litis pendencia."
Dismissal for Forum Non Conveniens" (Annex to the Complaint) filed with In fine, the trial court held that:
the U.S. District Court, defendants declared that "(t)he authority of each It behooves this Court, then to dismiss this case. For to continue with
designated representative to accept service of process will become these proceedings, would be violative of the constitutional provision on
effective upon final dismissal of these actions by the Court". The decision the Bill of Rights guaranteeing speedy disposition of cases (Ref. Sec. 16,
of the U.S. District Court dismissing the case is not yet final and Article III, Constitution). The court has no other choice. To insist on
executory since both the plaintiffs and defendants appealed therefrom further proceedings with this case, as it is now presented, might accord
(par. 3(h), 3(i), Amended Complaint). Consequently, since the authority of this court a charming appearance. But the same insistence would actually
the agent of the defendants in the Philippines is conditioned on the final thwart the very ends of justice which it seeks to achieve.
adjudication of the case pending with the U.S. courts, the acquisition of This evaluation and action is made not on account of but rather with due
jurisdiction by this court over the persons of the defendants is also consideration to the fact that the dismissal of this case does not
conditional. x x x. necessarily deprive the parties – especially the plaintiffs – of their
The appointment of agents by the defendants, being subject to a possible remedies. The court is cognizant that the Federal Court may
suspensive condition, thus produces no legal effect and is ineffective at resume proceedings of that earlier case between the herein parties
22
the moment. involving the same acts or omissions as in this case.
Fifth, the RTC of General Santos City ruled that the act of NAVIDA, et al., WHEREFORE, in view of the foregoing considerations, this case is now
24
of filing the case in the Philippine courts violated the rules on forum considered DISMISSED.
shopping and litis pendencia. The trial court expounded: On June 4, 1996, the RTC of General Santos City likewise issued an
25
THE JURISDICTION FROWNS UPON AND PROHIBITS FORUM Order, dismissing DOW’s Answer with Counterclaim.
SHOPPING CHIQUITA, DEL MONTE and SHELL each filed a motion for
26
This court frowns upon the fact that the parties herein are both vigorously reconsideration of the RTC Order dated May 20, 1996, while DOW filed
27
pursuing their appeal of the decision of the U.S. District court dismissing a motion for reconsideration of the RTC Order dated June 4, 1996.
the case filed thereat. To allow the parties to litigate in this court when Subsequently, DOW and OCCIDENTAL also filed a Joint Motion for
28
they are actively pursuing the same cases in another forum, violates the Reconsideration of the RTC Order dated May 20, 1996.
29
rule on ‘forum shopping’ so abhorred in this jurisdiction. x x x. In an Order dated July 9, 1996, the RTC of General Santos City
xxxx declared that it had already lost its jurisdiction over the case as it took into
THE FILING OF THE CASE IN U.S. DIVESTED THIS COURT OF ITS consideration the Manifestation of the counsel of NAVIDA, et al., which
OWN JURISDICTION stated that the latter had already filed a petition for review on certiorari
Moreover, the filing of the case in the U.S. courts divested this court of its before this Court.
30
own jurisdiction. This court takes note that the U.S. District Court did not CHIQUITA and SHELL filed their motions for reconsideration of the
decline jurisdiction over the cause of action. The case was dismissed on above order.
the ground of forum non conveniens, which is really a matter of venue. By On July 11, 1996, NAVIDA, et al., filed a Petition for Review on Certiorari
taking cognizance of the case, the U.S. District Court has, in essence, in order to assail the RTC Order dated May 20, 1996, which was
concurrent jurisdiction with this court over the subject matter of this case. docketed as G.R. No. 125078.
31
It is settled that initial acquisition of jurisdiction divests another of its own The RTC of General Santos City then issued an Order dated August 14,
jurisdiction. x x x. 1996, which merely noted the incidents still pending in Civil Case No.
xxxx 5617 and reiterated that it no longer had any jurisdiction over the case.
THIS CASE IS BARRED BY THE RULE OF "LITIS PENDENCIA" On August 30, 1996, DOW and OCCIDENTAL filed their Petition for
32
Furthermore, the case filed in the U.S. court involves the same parties, Review on Certiorari, challenging the orders of the RTC of General
same rights and interests, as in this case. There exists litis pendencia Santos City dated May 20, 1996, June 4, 1996 and July 9, 1996. Their
since there are two cases involving the same parties and interests. The petition was docketed as G.R. No. 125598.
court would like to emphasize that in accordance with the rule on litis
! 85!
In their petition, DOW and OCCIDENTAL aver that the RTC of General Fruits Co., all foreign corporations with Philippine Representatives, the
Santos City erred in ruling that it has no jurisdiction over the subject Court, as correctly pointed out by one of the defendants, is convinced that
matter of the case as well as the persons of the defendant companies. plaintiffs "would have this Honorable Court dismiss the case to pave the
33
In a Resolution dated October 7, 1996, this Court resolved to way for their getting an affirmance by the Supreme Court" (#10 of
consolidate G.R. No. 125598 with G.R. No. 125078. Defendants’ Del Monte Fresh Produce, N.A. and Del Monte Tropical Fruit
34
CHIQUITA filed a Petition for Review on Certiorari, which sought the Co., Reply to Opposition dated July 22, 1996). Consider these:
reversal of the RTC Orders dated May 20, 1996, July 9, 1996 and August 1) In the original Joint Complaint, plaintiffs state that: defendants have no
14, 1996. The petition was docketed as G.R. No. 126018. In a properties in the Philippines; they have no agents as well (par. 18);
35
Resolution dated November 13, 1996, the Court dismissed the plaintiffs are suing the defendants for tortuous acts committed by these
aforesaid petition for failure of CHIQUITA to show that the RTC foreign corporations on their respective countries, as plaintiffs, after
committed grave abuse of discretion. CHIQUITA filed a Motion for having elected to sue in the place of defendants’ residence, are now
36 37
Reconsideration, but the same was denied through a Resolution dated compelled by a decision of a Texas District Court to file cases under torts
January 27, 1997. in this jurisdiction for causes of actions which occurred abroad (par. 19); a
Civil Case No. 24,251-96 before the RTC of Davao City and G.R. Nos. petition was filed by same plaintiffs against same defendants in the
126654, 127856, and 128398 Courts of Texas, USA, plaintiffs seeking for payment of damages based
Another joint complaint for damages against SHELL, DOW, on negligence, strict liability, conspiracy and international tort theories
OCCIDENTAL, DOLE, DEL MONTE, and CHIQUITA was filed before (par. 27); upon defendants’ Motion to Dismiss on Forum non
Branch 16 of the RTC of Davao City by 155 plaintiffs from Davao City. [conveniens], said petition was provisionally dismissed on condition that
This case was docketed as Civil Case No. 24,251-96. These plaintiffs these cases be filed in the Philippines or before 11 August 1995
(the petitioners in G.R. No. 126654, hereinafter referred to as ABELLA, et (Philippine date; Should the Philippine Courts refuse or deny jurisdiction,
38
al.) amended their Joint-Complaint on May 21, 1996. the U. S. Courts will reassume jurisdiction.)
Similar to the complaint of NAVIDA, et al., ABELLA, et al., alleged that, as 11. In the Amended Joint Complaint, plaintiffs aver that: on 11 July 1995,
workers in the banana plantation and/or as residents near the said the Federal District Court issued a Memorandum and Order conditionally
plantation, they were made to use and/or were exposed to nematocides, dismissing several of the consolidated actions including those filed by the
which contained the chemical DBCP. According to ABELLA, et al., such Filipino complainants. One of the conditions imposed was for the plaintiffs
exposure resulted in "serious and permanent injuries to their health, to file actions in their home countries or the countries in which they were
including, but not limited to, sterility and severe injuries to their injured x x x. Notwithstanding, the Memorandum and [O]rder further
39
reproductive capacities." ABELLA, et al., claimed that the defendant provided that should the highest court of any foreign country affirm the
companies manufactured, produced, sold, distributed, used, and/or made dismissal for lack of jurisdictions over these actions filed by the plaintiffs
available in commerce, DBCP without warning the users of its hazardous in their home countries [or] the countries where they were injured, the
effects on health, and without providing instructions on its proper use and said plaintiffs may return to that court and, upon proper motion, the Court
application, which the defendant companies knew or ought to have will resume jurisdiction as if the case had never been dismissed for forum
known, had they exercised ordinary care and prudence. non conveniens.
Except for DOW, the other defendant companies filed their respective The Court however is constrained to dismiss the case at bar not solely on
motions for bill of particulars to which ABELLA, et al., filed their the basis of the above but because it shares the opinion of legal experts
opposition. DOW and DEL MONTE filed their respective Answers dated given in the interview made by the Inquirer in its Special report "Pesticide
May 17, 1996 and June 24, 1996. Cause Mass Sterility," to wit:
The RTC of Davao City, however, junked Civil Case No. 24,251-96 in its 1. Former Justice Secretary Demetrio Demetria in a May 1995
Order dated October 1, 1996, which, in its entirety, reads: opinion said: The Philippines should be an inconvenient forum to
Upon a thorough review of the Complaint and Amended Complaint For: file this kind of damage suit against foreign companies since the
Damages filed by the plaintiffs against the defendants Shell Oil Company, causes of action alleged in the petition do not exist under
DOW Chemicals Company, Occidental Chemical Corporation, Standard Philippine laws. There has been no decided case in Philippine
Fruit Company, Standard Fruit and Steamship, DOLE Food Company, Jurisprudence awarding to those adversely affected by DBCP.
DOLE Fresh Fruit Company, Chiquita Brands, Inc., Chiquita Brands This means there is no available evidence which will prove and
International, Del Monte Fresh Produce, N.A. and Del Monte Tropical disprove the relation between sterility and DBCP.
! 86!
43
2. Retired Supreme Court Justice Abraham Sarmiento opined Initially, this Court in its Resolution dated July 28, 1997, dismissed the
that while a class suit is allowed in the Philippines the device has petition filed by CHIQUITA for submitting a defective certificate against
been employed strictly. Mass sterility will not qualify as a class forum shopping. CHIQUITA, however, filed a motion for reconsideration,
44
suit injury within the contemplation of Philippine statute. which was granted by this Court in the Resolution dated October 8,
3. Retired High Court Justice Rodolfo Nocom stated that there is 1997.
simply an absence of doctrine here that permits these causes to On March 7, 1997, DEL MONTE also filed its petition for review on
be heard. No product liability ever filed or tried here. certiorari before this Court assailing the above-mentioned orders of the
40
Case ordered dismissed. RTC of Davao City. Its petition was docketed as G.R. No. 127856.
Docketed as G.R. No. 126654, the petition for review, filed on November DEL MONTE claims that the RTC of Davao City has jurisdiction over Civil
12, 1996 by ABELLA, et al., assails before this Court the above-quoted Case No. 24,251-96, as defined under the law and that the said court
order of the RTC of Davao City. already obtained jurisdiction over its person by its voluntary appearance
ABELLA, et al., claim that the RTC of Davao City erred in dismissing Civil and the filing of a motion for bill of particulars and, later, an answer to the
Case No. 24,251-96 on the ground of lack of jurisdiction. complaint. According to DEL MONTE, the RTC of Davao City, therefore,
According to ABELLA, et al., the RTC of Davao City has jurisdiction over acted beyond its authority when it dismissed the case motu proprio or
the subject matter of the case since Articles 2176 and 2187 of the Civil without any motion to dismiss from any of the parties to the case.
Code are broad enough to cover the acts complained of and to support In the Resolutions dated February 10, 1997, April 28, 1997, and March
their claims for damages. 10, 1999, this Court consolidated G.R. Nos. 125078, 125598, 126654,
ABELLA, et al., further aver that the dismissal of the case, based on the 127856, and 128398.
opinions of legal luminaries reported in a newspaper, by the RTC of The Consolidated Motion to Drop DOW, OCCIDENTAL, and SHELL as
Davao City is bereft of basis. According to them, their cause of action is Party-Respondents filed by NAVIDA, et al. and ABELLA, et al.
based on quasi-delict under Article 2176 of the Civil Code. They also On September 26, 1997, NAVIDA, et al., and ABELLA, et al., filed before
45
maintain that the absence of jurisprudence regarding the award of this Court a Consolidated Motion (to Drop Party-Respondents). The
damages in favor of those adversely affected by the DBCP does not plaintiff claimants alleged that they had amicably settled their cases with
preclude them from presenting evidence to prove their allegations that DOW, OCCIDENTAL, and SHELL sometime in July 1997. This
their exposure to DBCP caused their sterility and/or infertility. settlement agreement was evidenced by facsimiles of the "Compromise
SHELL, DOW, and CHIQUITA each filed their respective motions for Settlement, Indemnity, and Hold Harmless Agreement," which were
reconsideration of the Order dated October 1, 1996 of the RTC of Davao attached to the said motion. Pursuant to said agreement, the plaintiff
City. DEL MONTE also filed its motion for reconsideration, which claimants sought to withdraw their petitions as against DOW,
contained an additional motion for the inhibition of the presiding judge. OCCIDENTAL, and SHELL.
41
The presiding judge of Branch 16 then issued an Order dated DOLE, DEL MONTE and CHIQUITA, however, opposed the motion, as
December 2, 1996, voluntarily inhibiting himself from trying the case. well as the settlement entered into between the plaintiff claimants and
Thus, the case was re-raffled to Branch 13 of the RTC of Davao City. DOW, OCCIDENTAL, and SHELL.
42
In an Order dated December 16, 1996, the RTC of Davao City affirmed The Memoranda of the Parties
the Order dated October 1, 1996, and denied the respective motions for Considering the allegations, issues, and arguments adduced by the
46
reconsideration filed by defendant companies. parties, this Court, in a Resolution dated June 22, 1998, required all the
Thereafter, CHIQUITA filed a Petition for Review dated March 5, 1997, parties to submit their respective memoranda.
47
questioning the Orders dated October 1, 1996 and December 16, 1996 of CHIQUITA filed its Memorandum on August 28, 1998; SHELL asked to
the RTC of Davao City. This case was docketed as G.R. No. 128398. be excused from the filing of a memorandum alleging that it had already
48
In its petition, CHIQUITA argues that the RTC of Davao City erred in executed a compromise agreement with the plaintiff claimants. DOLE
49
dismissing the case motu proprio as it acquired jurisdiction over the filed its Memorandum on October 12, 1998 while DEL MONTE filed on
50
subject matter of the case as well as over the persons of the defendant October 13, 1998. NAVIDA, et al., and ABELLA, et al., filed their
51
companies which voluntarily appeared before it. CHIQUITA also claims Consolidated Memorandum on February 3, 1999; and DOW and
52
that the RTC of Davao City cannot dismiss the case simply on the basis OCCIDENTAL jointly filed a Memorandum on December 23, 1999.
of opinions of alleged legal experts appearing in a newspaper article. The Motion to Withdraw Petition for Review in G.R. No. 125598

! 87!
On July 13, 2004, DOW and OCCIDENTAL filed a Motion to Withdraw c. Assumption of jurisdiction by the U.S. District Court
53
Petition for Review in G.R. No. 125598, explaining that the said petition over petitioner[s’] claims did not divest Philippine [c]ourts
"is already moot and academic and no longer presents a justiciable of jurisdiction over the same.
controversy" since they have already entered into an amicable settlement d. The Compromise Agreement and the subsequent
with NAVIDA, et al. DOW and OCCIDENTAL added that they have fully Consolidated Motion to Drop Party Respondents Dow,
complied with their obligations set forth in the 1997 Compromise Occidental and Shell does not unjustifiably prejudice
58
Agreements. remaining respondents Dole, Del Monte and Chiquita.
54
DOLE filed its Manifestation dated September 6, 2004, interposing no DISCUSSION
objection to the withdrawal of the petition, and further stating that they On the issue of jurisdiction
maintain their position that DOW and OCCIDENTAL, as well as other Essentially, the crux of the controversy in the petitions at bar is whether
settling defendant companies, should be retained as defendants for the RTC of General Santos City and the RTC of Davao City erred in
purposes of prosecuting the cross-claims of DOLE, in the event that the dismissing Civil Case Nos. 5617 and 24,251-96, respectively, for lack of
complaint below is reinstated. jurisdiction.
NAVIDA, et al., also filed their Comment dated September 14, Remarkably, none of the parties to this case claims that the courts a quo
55
2004, stating that they agree with the view of DOW and OCCIDENTAL are bereft of jurisdiction to determine and resolve the above-stated cases.
that the petition in G.R. No. 125598 has become moot and academic All parties contend that the RTC of General Santos City and the RTC of
because Civil Case No. 5617 had already been amicably settled by the Davao City have jurisdiction over the action for damages, specifically for
parties in 1997. approximately ₱2.7 million for each of the plaintiff claimants.
On September 27, 2004, DEL MONTE filed its Comment on Motion to NAVIDA, et al., and ABELLA, et al., argue that the allegedly tortious acts
Withdraw Petition for Review Filed by Petitioners in G.R. No. and/or omissions of defendant companies occurred within Philippine
56
125598, stating that it has no objections to the withdrawal of the petition territory. Specifically, the use of and exposure to DBCP that was
filed by DOW and OCCIDENTAL in G.R. No. 125598. manufactured, distributed or otherwise put into the stream of commerce
57
In a Resolution dated October 11, 2004, this Court granted, among by defendant companies happened in the Philippines. Said fact allegedly
others, the motion to withdraw petition for review filed by DOW and constitutes reasonable basis for our courts to assume jurisdiction over the
OCCIDENTAL. case. Furthermore, NAVIDA, et al., and ABELLA, et al., assert that the
THE ISSUES provisions of Chapter 2 of the Preliminary Title of the Civil Code, as well
In their Consolidated Memorandum, NAVIDA, et al., and ABELLA, et al., as Article 2176 thereof, are broad enough to cover their claim for
presented the following issues for our consideration: damages. Thus, NAVIDA, et al., and ABELLA, et al., pray that the
IN REFUTATION respective rulings of the RTC of General Santos City and the RTC of
I. THE COURT DISMISSED THE CASE DUE TO LACK OF Davao City in Civil Case Nos. 5617 and 24,251-96 be reversed and that
JURISDICTION. the said cases be remanded to the courts a quo for further proceedings.
a) The court did not simply dismiss the case because it DOLE similarly maintains that the acts attributed to defendant companies
was filed in bad faith with petitioners intending to have constitute a quasi-delict, which falls under Article 2176 of the Civil Code.
the same dismissed and returned to the Texas court. In addition, DOLE states that if there were no actionable wrongs
b) The court dismissed the case because it was committed under Philippine law, the courts a quo should have dismissed
convinced that it did not have jurisdiction. the civil cases on the ground that the Amended Joint-Complaints of
IN SUPPORT OF THE PETITION NAVIDA, et al., and ABELLA, et al., stated no cause of action against the
II. THE TRIAL COURT HAS JURISDICTION OVER THE SUBJECT defendant companies. DOLE also argues that if indeed there is no
MATTER OF THE CASE. positive law defining the alleged acts of defendant companies as
a. The acts complained of occurred within Philippine actionable wrong, Article 9 of the Civil Code dictates that a judge may not
territory. refuse to render a decision on the ground of insufficiency of the law. The
b. Art. 2176 of the Civil Code of the Philippines is broad court may still resolve the case, applying the customs of the place and, in
enough to cover the acts complained of. the absence thereof, the general principles of law. DOLE posits that the
Philippines is the situs of the tortious acts allegedly committed by
defendant companies as NAVIDA, et al., and ABELLA, et al., point to
! 88!
their alleged exposure to DBCP which occurred in the Philippines, as the value of the property in controversy exceeds One hundred thousand
cause of the sterility and other reproductive system problems that they pesos (₱100,000.00) or, in such other cases in Metro Manila, where the
allegedly suffered. Finally, DOLE adds that the RTC of Davao City demand, exclusive of the abovementioned items exceeds Two hundred
60
gravely erred in relying upon newspaper reports in dismissing Civil Case thousand pesos (₱200,000.00).
No. 24,251-96 given that newspaper articles are hearsay and without any Corollary thereto, Supreme Court Administrative Circular No. 09-94,
evidentiary value. Likewise, the alleged legal opinions cited in the states:
newspaper reports were taken judicial notice of, without any notice to the 2. The exclusion of the term "damages of whatever kind" in determining
parties. DOLE, however, opines that the dismissal of Civil Case Nos. the jurisdictional amount under Section 19 (8) and Section 33 (1) of B.P.
5617 and 24,251-96 was proper, given that plaintiff claimants merely Blg. 129, as amended by R.A. No. 7691, applies to cases where the
prosecuted the cases with the sole intent of securing a dismissal of the damages are merely incidental to or a consequence of the main cause of
actions for the purpose of convincing the U.S. Federal District Court to re- action. However, in cases where the claim for damages is the main cause
assume jurisdiction over the cases. of action, or one of the causes of action, the amount of such claim shall
In a similar vein, CHIQUITA argues that the courts a quo had jurisdiction be considered in determining the jurisdiction of the court.
over the subject matter of the cases filed before them. The Amended Here, NAVIDA, et al., and ABELLA, et al., sought in their similarly-worded
Joint-Complaints sought approximately ₱2.7 million in damages for each Amended Joint-Complaints filed before the courts a quo, the following
plaintiff claimant, which amount falls within the jurisdiction of the RTC. prayer:
CHIQUITA avers that the pertinent matter is the place of the alleged PRAYER
exposure to DBCP, not the place of manufacture, packaging, distribution, WHEREFORE, premises considered, it is most respectfully prayed that
sale, etc., of the said chemical. This is in consonance with the lex loci after hearing, judgment be rendered in favor of the plaintiffs ordering the
delicti commisi theory in determining the situs of a tort, which states that defendants:
the law of the place where the alleged wrong was committed will govern a) TO PAY EACH PLAINTIFF moral damages in the amount of
the action. CHIQUITA and the other defendant companies also submitted One Million Five Hundred Thousand Pesos (₱1,500,00.00);
themselves to the jurisdiction of the RTC by making voluntary b) TO PAY EACH PLAINTIFF nominal damages in the amount of
appearances and seeking for affirmative reliefs during the course of the Four Hundred Thousand Pesos (₱400,000.00) each;
proceedings. None of the defendant companies ever objected to the c) TO PAY EACH PLAINTIFF exemplary damages in the amount
exercise of jurisdiction by the courts a quo over their persons. CHIQUITA, of Six Hundred Thousand Pesos (₱600,000.00);
thus, prays for the remand of Civil Case Nos. 5617 and 24,251-96 to the d) TO PAY EACH PLAINTIFF attorneys fees of Two Hundred
RTC of General Santos City and the RTC of Davao City, respectively. Thousand Pesos (₱200,000.00); and
61
The RTC of General Santos City and the RTC of Davao City have e) TO PAY THE COSTS of the suit.
jurisdiction over Civil Case Nos. 5617 and 24,251-96, respectively From the foregoing, it is clear that the claim for damages is the main
The rule is settled that jurisdiction over the subject matter of a case is cause of action and that the total amount sought in the complaints is
conferred by law and is determined by the allegations in the complaint approximately ₱2.7 million for each of the plaintiff claimants. The RTCs
and the character of the relief sought, irrespective of whether the plaintiffs unmistakably have jurisdiction over the cases filed in General Santos City
59
are entitled to all or some of the claims asserted therein. Once vested and Davao City, as both claims by NAVIDA, et al., and ABELLA, et al.,
by law, on a particular court or body, the jurisdiction over the subject fall within the purview of the definition of the jurisdiction of the RTC under
matter or nature of the action cannot be dislodged by anybody other than Batas Pambansa Blg. 129.
by the legislature through the enactment of a law. Moreover, the allegations in both Amended Joint-Complaints narrate that:
At the time of the filing of the complaints, the jurisdiction of the RTC in THE CAUSES OF ACTION
civil cases under Batas Pambansa Blg. 129, as amended by Republic Act 4. The Defendants manufactured, sold, distributed, used, AND/OR MADE
No. 7691, was: AVAILABLE IN COMMERCE nematocides containing the chemical
SEC. 19. Jurisdiction in civil cases. – Regional Trial Courts shall exercise dibromochloropropane, commonly known as DBCP. THE CHEMICAL
exclusive original jurisdiction: WAS USED AGAINST the parasite known as the nematode, which
xxxx plagued banana plantations, INCLUDING THOSE in the Philippines. AS
(8) In all other cases in which the demand, exclusive of interest, damages IT TURNED OUT, DBCP not only destroyed nematodes. IT ALSO
of whatever kind, attorney’s fees, litigation expenses, and costs or the
! 89!
CAUSED ILL-EFFECTS ON THE HEALTH OF PERSONS EXPOSED TO 8. The illnesses and injuries of each plaintiff are also due to the FAULT or
IT AFFECTING the human reproductive system as well. negligence of defendants Standard Fruit Company, Dole Fresh Fruit
5. The plaintiffs were exposed to DBCP in the 1970s up to the early Company, Dole Food Company, Inc., Chiquita Brands, Inc. and Chiquita
1980s WHILE (a) they used this product in the banana plantations Brands International, Inc. in that they failed to exercise reasonable care to
WHERE they were employed, and/or (b) they resided within the prevent each plaintiff’s harmful exposure to DBCP-containing products
agricultural area WHERE IT WAS USED. As a result of such exposure, which defendants knew or should have known were hazardous to each
the plaintiffs suffered serious and permanent injuries TO THEIR HEALTH, plaintiff in that they, AMONG OTHERS:
including, but not limited to, STERILITY and severe injuries to their a. Failed to adequately supervise and instruct Plaintiffs in
reproductive capacities. the safe and proper application of DBCP-containing
6. THE DEFENDANTS WERE AT FAULT OR WERE NEGLIGENT IN products;
THAT THEY MANUFACTURED, produced, sold, and/or USED DBCP b. Failed to implement proper methods and techniques of
and/or otherwise, PUT THE SAME into the stream of commerce, application of said products, or to cause such to be
WITHOUT INFORMING THE USERS OF ITS HAZARDOUS EFFECTS implemented;
ON HEALTH AND/OR WITHOUT INSTRUCTIONS ON ITS PROPER c. Failed to warn Plaintiffs of the hazards of exposure to
USE AND APPLICATION. THEY allowed Plaintiffs to be exposed to, said products or to cause them to be so warned;
DBCP-containing materials which THEY knew, or in the exercise of d. Failed to test said products for adverse health effects,
ordinary care and prudence ought to have known, were highly harmful or to cause said products to be tested;
and injurious to the Plaintiffs’ health and well-being. e. Concealed from Plaintiffs information concerning the
7. The Defendants WHO MANUFACTURED, PRODUCED, SOLD, observed effects of said products on Plaintiffs;
DISTRIBUTED, MADE AVAILABLE OR PUT DBCP INTO THE STREAM f. Failed to monitor the health of plaintiffs exposed to said
OF COMMERCE were negligent OR AT FAULT in that they, AMONG products;
OTHERS: g. Failed to place adequate labels on containers of said
a. Failed to adequately warn Plaintiffs of the dangerous products to warn them of the damages of said products;
characteristics of DBCP, or to cause their subsidiaries or and
affiliates to so warn plaintiffs; h. Failed to use substitute nematocides for said products
62
b. Failed to provide plaintiffs with information as to what or to cause such substitutes to [be] used. (Emphasis
should be reasonably safe and sufficient clothing and supplied and words in brackets ours.)
proper protective equipment and appliances, if any, to Quite evidently, the allegations in the Amended Joint-Complaints of
protect plaintiffs from the harmful effects of exposure to NAVIDA, et al., and ABELLA, et al., attribute to defendant companies
DBCP, or to cause their subsidiaries or affiliates to do so; certain acts and/or omissions which led to their exposure to nematocides
c. Failed to place adequate warnings, in a language containing the chemical DBCP. According to NAVIDA, et al., and
understandable to the worker, on containers of DBCP- ABELLA, et al., such exposure to the said chemical caused ill effects,
containing materials to warn of the dangers to health of injuries and illnesses, specifically to their reproductive system.
coming into contact with DBCP, or to cause their Thus, these allegations in the complaints constitute the cause of action of
subsidiaries or affiliates to do so; plaintiff claimants – a quasi-delict, which under the Civil Code is defined
d. Failed to take reasonable precaution or to exercise as an act, or omission which causes damage to another, there being fault
reasonable care to publish, adopt and enforce a safety or negligence. To be precise, Article 2176 of the Civil Code provides:
plan and a safe method of handling and applying DBCP, Article 2176. Whoever by act or omission causes damage to another,
or to cause their subsidiaries or affiliates to do so; there being fault or negligence, is obliged to pay for the damage done.
e. Failed to test DBCP prior to releasing these products Such fault or negligence, if there is no pre-existing contractual relation
for sale, or to cause their subsidiaries or affiliates to do between the parties, is called a quasi-delict and is governed by the
so; and provisions of this Chapter.
f. Failed to reveal the results of tests conducted on DBCP As specifically enumerated in the amended complaints, NAVIDA, et al.,
to each plaintiff, governmental agencies and the public, and ABELLA, et al., point to the acts and/or omissions of the defendant
or to cause their subsidiaries or affiliate to do so. companies in manufacturing, producing, selling, using, and/or otherwise
! 90!
putting into the stream of commerce, nematocides which contain DBCP, First, plaintiff claimants are all residents of the Philippines, either in
"without informing the users of its hazardous effects on health and/or General Santos City or in Davao City. Second, the specific areas where
63
without instructions on its proper use and application." they were allegedly exposed to the chemical DBCP are within the
64
Verily, in Citibank, N.A. v. Court of Appeals, this Court has always territorial jurisdiction of the courts a quo wherein NAVIDA, et al., and
reminded that jurisdiction of the court over the subject matter of the action ABELLA, et al., initially filed their claims for damages. Third, the
is determined by the allegations of the complaint, irrespective of whether testimonial and documentary evidence from important witnesses, such as
or not the plaintiffs are entitled to recover upon all or some of the claims doctors, co-workers, family members and other members of the
asserted therein. The jurisdiction of the court cannot be made to depend community, would be easier to gather in the Philippines. Considering the
upon the defenses set up in the answer or upon the motion to dismiss, for great number of plaintiff claimants involved in this case, it is not far-
otherwise, the question of jurisdiction would almost entirely depend upon fetched to assume that voluminous records are involved in the
the defendants. What determines the jurisdiction of the court is the nature presentation of evidence to support the claim of plaintiff claimants. Thus,
of the action pleaded as appearing from the allegations in the complaint. these additional factors, coupled with the fact that the alleged cause of
The averments therein and the character of the relief sought are the ones action of NAVIDA, et al., and ABELLA, et al., against the defendant
to be consulted. companies for damages occurred in the Philippines, demonstrate that,
Clearly then, the acts and/or omissions attributed to the defendant apart from the RTC of General Santos City and the RTC of Davao City
companies constitute a quasi-delict which is the basis for the claim for having jurisdiction over the subject matter in the instant civil cases, they
67
damages filed by NAVIDA, et al., and ABELLA, et al., with individual are, indeed, the convenient fora for trying these cases.
claims of approximately ₱2.7 million for each plaintiff claimant, which The RTC of General Santos City and the RTC of Davao City validly
obviously falls within the purview of the civil action jurisdiction of the acquired jurisdiction over the persons of all the defendant companies
RTCs. It is well to stress again that none of the parties claims that the courts a
Moreover, the injuries and illnesses, which NAVIDA, et al., and ABELLA, quo lack jurisdiction over the cases filed before them. All parties are one
et al., allegedly suffered resulted from their exposure to DBCP while they in asserting that the RTC of General Santos City and the RTC of Davao
were employed in the banana plantations located in the Philippines or City have validly acquired jurisdiction over the persons of the defendant
while they were residing within the agricultural areas also located in the companies in the action below. All parties voluntarily, unconditionally and
Philippines. The factual allegations in the Amended Joint-Complaints all knowingly appeared and submitted themselves to the jurisdiction of the
point to their cause of action, which undeniably occurred in the courts a quo.
Philippines. The RTC of General Santos City and the RTC of Davao City Rule 14, Section 20 of the 1997 Rules of Civil Procedure provides that
obviously have reasonable basis to assume jurisdiction over the cases. "[t]he defendant’s voluntary appearance in the action shall be equivalent
It is, therefore, error on the part of the courts a quo when they dismissed to service of summons." In this connection, all the defendant companies
the cases on the ground of lack of jurisdiction on the mistaken designated and authorized representatives to receive summons and to
assumption that the cause of action narrated by NAVIDA, et al., and represent them in the proceedings before the courts a quo. All the
ABELLA, et al., took place abroad and had occurred outside and beyond defendant companies submitted themselves to the jurisdiction of the
the territorial boundaries of the Philippines, i.e., "the manufacture of the courts a quo by making several voluntary appearances, by praying for
pesticides, their packaging in containers, their distribution through sale or various affirmative reliefs, and by actively participating during the course
other disposition, resulting in their becoming part of the stream of of the proceedings below.
65
commerce," and, hence, outside the jurisdiction of the RTCs. In line herewith, this Court, in Meat Packing Corporation of the Philippines
68
Certainly, the cases below are not criminal cases where territoriality, or v. Sandiganbayan, held that jurisdiction over the person of the
the situs of the act complained of, would be determinative of jurisdiction defendant in civil cases is acquired either by his voluntary appearance in
and venue for trial of cases. In personal civil actions, such as claims for court and his submission to its authority or by service of summons.
payment of damages, the Rules of Court allow the action to be Furthermore, the active participation of a party in the proceedings is
commenced and tried in the appropriate court, where any of the plaintiffs tantamount to an invocation of the court’s jurisdiction and a willingness to
or defendants resides, or in the case of a non-resident defendant, where abide by the resolution of the case, and will bar said party from later on
66 69
he may be found, at the election of the plaintiff. impugning the court or body’s jurisdiction.
In a very real sense, most of the evidence required to prove the claims of Thus, the RTC of General Santos City and the RTC of Davao City have
NAVIDA, et al., and ABELLA, et al., are available only in the Philippines. validly acquired jurisdiction over the persons of the defendant companies,
! 91!
as well as over the subject matter of the instant case. What is more, this plaintiff claimants and DOW, OCCIDENTAL, and SHELL were executed.
jurisdiction, which has been acquired and has been vested on the courts NAVIDA, et al., and ABELLA, et al., therefore, assert that the cross-
a quo, continues until the termination of the proceedings. claims are already barred.
It may also be pertinently stressed that "jurisdiction" is different from the In their Memoranda, CHIQUITA and DOLE are opposing the above
"exercise of jurisdiction." Jurisdiction refers to the authority to decide a motion of NAVIDA, et al., and ABELLA, et al., since the latter’s Amended
case, not the orders or the decision rendered therein. Accordingly, where Complaints cited several instances of tortious conduct that were allegedly
a court has jurisdiction over the persons of the defendants and the committed jointly and severally by the defendant companies. This solidary
subject matter, as in the case of the courts a quo, the decision on all obligation on the part of all the defendants allegedly gives any co-
questions arising therefrom is but an exercise of such jurisdiction. Any defendant the statutory right to proceed against the other co-defendants
error that the court may commit in the exercise of its jurisdiction is merely for the payment of their respective shares. Should the subject motion of
an error of judgment, which does not affect its authority to decide the NAVIDA, et al., and ABELLA, et al., be granted, and the Court
70
case, much less divest the court of the jurisdiction over the case. subsequently orders the remand of the action to the trial court for
Plaintiffs’ purported bad faith in filing the subject civil cases in Philippine continuance, CHIQUITA and DOLE would allegedly be deprived of their
courts right to prosecute their cross-claims against their other co-defendants.
Anent the insinuation by DOLE that the plaintiff claimants filed their cases Moreover, a third party complaint or a separate trial, according to
in bad faith merely to procure a dismissal of the same and to allow them CHIQUITA, would only unduly delay and complicate the proceedings.
to return to the forum of their choice, this Court finds such argument CHIQUITA and DOLE similarly insist that the motion of NAVIDA, et al.,
much too speculative to deserve any merit. and ABELLA, et al., to drop DOW, SHELL and OCCIDENTAL as
It must be remembered that this Court does not rule on allegations that respondents in G.R. Nos. 125078 and 126654, as well as in Civil Case
are unsupported by evidence on record. This Court does not rule on Nos. 5617 and 24,251-96, be denied.
allegations which are manifestly conjectural, as these may not exist at all. Incidentally, on April 2, 2007, after the parties have submitted their
This Court deals with facts, not fancies; on realities, not appearances. respective memoranda, DEL MONTE filed a Manifestation and
73
When this Court acts on appearances instead of realities, justice and law Motion before the Court, stating that similar settlement agreements
71
will be short-lived. This is especially true with respect to allegations of were allegedly executed by the plaintiff claimants with DEL MONTE and
bad faith, in line with the basic rule that good faith is always presumed CHIQUITA sometime in 1999. Purportedly included in the agreements
72
and bad faith must be proved. were Civil Case Nos. 5617 and 24,251-96. Attached to the said
In sum, considering the fact that the RTC of General Santos City and the manifestation were copies of the Compromise Settlement, Indemnity, and
RTC of Davao City have jurisdiction over the subject matter of the Hold Harmless Agreement between DEL MONTE and the settling
74
amended complaints filed by NAVIDA, et al., and ABELLA, et al., and that plaintiffs, as well as the Release in Full executed by the latter. DEL
the courts a quo have also acquired jurisdiction over the persons of all the MONTE specified therein that there were "only four (4) plaintiffs in Civil
75
defendant companies, it therefore, behooves this Court to order the Case No. 5617 who are claiming against the Del Monte parties" and
remand of Civil Case Nos. 5617 and 24,251-96 to the RTC of General that the latter have executed amicable settlements which completely
Santos City and the RTC of Davao City, respectively. satisfied any claims against DEL MONTE. In accordance with the alleged
On the issue of the dropping of DOW, OCCIDENTAL and SHELL as compromise agreements with the four plaintiffs in Civil Case No. 5617,
respondents in view of their amicable settlement with NAVIDA, et al., and DEL MONTE sought the dismissal of the Amended Joint-Complaint in the
ABELLA, et al. said civil case. Furthermore, in view of the above settlement agreements
NAVIDA, et al., and ABELLA, et al., are further praying that DOW, with ABELLA, et al., in Civil Case No. 24,251-96, DEL MONTE stated that
OCCIDENTAL and SHELL be dropped as respondents in G.R. Nos. it no longer wished to pursue its petition in G.R. No. 127856 and
125078 and 126654, as well as in Civil Case Nos. 5617 and 24,251-96. accordingly prayed that it be allowed to withdraw the same.
The non-settling defendants allegedly manifested that they intended to Having adjudged that Civil Case Nos. 5617 and 24,251-96 should be
file their cross-claims against their co-defendants who entered into remanded to the RTC of General Santos City and the RTC of Davao City,
compromise agreements. NAVIDA, et al., and ABELLA, et al., argue that respectively, the Court deems that the Consolidated Motions (to Drop
the non-settling defendants did not aver any cross-claim in their answers Party-Respondents) filed by NAVIDA, et al., and ABELLA, et al., should
to the complaint and that they subsequently sought to amend their likewise be referred to the said trial courts for appropriate disposition.
answers to plead their cross-claims only after the settlement between the
! 92!
Under Article 2028 of the Civil Code, "[a] compromise is a contract entire obligation, and each of the creditors is entitled to demand the
81
whereby the parties, by making reciprocal concessions, avoid a litigation satisfaction of the whole obligation from any or all of the debtors.
or put an end to one already commenced." Like any other contract, an In solidary obligations, the paying debtor’s right of reimbursement is
extrajudicial compromise agreement is not excepted from rules and provided for under Article 1217 of the Civil Code, to wit:
principles of a contract. It is a consensual contract, perfected by mere Art. 1217. Payment made by one of the solidary debtors extinguishes the
consent, the latter being manifested by the meeting of the offer and the obligation. If two or more solidary debtors offer to pay, the creditor may
acceptance upon the thing and the cause which are to constitute the choose which offer to accept.
76 77
contract. Judicial approval is not required for its perfection. A He who made the payment may claim from his co-debtors only the share
compromise has upon the parties the effect and authority of res which corresponds to each, with the interest for the payment already
78
judicata and this holds true even if the agreement has not been made. If the payment is made before the debt is due, no interest for the
79
judicially approved. In addition, as a binding contract, a compromise intervening period may be demanded.
80
agreement determines the rights and obligations of only the parties to it. When one of the solidary debtors cannot, because of his insolvency,
In light of the foregoing legal precepts, the RTC of General Santos City reimburse his share to the debtor paying the obligation, such share shall
and the RTC of Davao City should first receive in evidence and examine be borne by all his co-debtors, in proportion to the debt of each.1avvphil
all of the alleged compromise settlements involved in the cases at bar to The above right of reimbursement of a paying debtor, and the
determine the propriety of dropping any party as a defendant therefrom. corresponding liability of the co-debtors to reimburse, will only arise,
The Court notes that the Consolidated Motions (to Drop Party- however, if a solidary debtor who is made to answer for an obligation
Respondents) that was filed by NAVIDA, et al., and ABELLA, et al., only actually delivers payment to the creditor. As succinctly held in Lapanday
82
pertained to DOW, OCCIDENTAL and SHELL in view of the latter Agricultural Development Corporation v. Court of Appeals, "[p]ayment,
companies’ alleged compromise agreements with the plaintiff claimants. which means not only the delivery of money but also the performance, in
However, in subsequent developments, DEL MONTE and CHIQUITA any other manner, of the obligation, is the operative fact which will entitle
supposedly reached their own amicable settlements with the plaintiff either of the solidary debtors to seek reimbursement for the share which
83
claimants, but DEL MONTE qualified that it entered into a settlement corresponds to each of the [other] debtors."
agreement with only four of the plaintiff claimants in Civil Case No. 5617. In the cases at bar, there is no right of reimbursement to speak of as yet.
These four plaintiff claimants were allegedly the only ones who were A trial on the merits must necessarily be conducted first in order to
asserting claims against DEL MONTE. However, the said allegation of establish whether or not defendant companies are liable for the claims for
DEL MONTE was simply stipulated in their Compromise Settlement, damages filed by the plaintiff claimants, which would necessarily give rise
Indemnity, and Hold Harmless Agreement and its truth could not be to an obligation to pay on the part of the defendants.
verified with certainty based on the records elevated to this Court. At the point in time where the proceedings below were prematurely
Significantly, the 336 plaintiff claimants in Civil Case No. 5617 jointly filed halted, no cross-claims have been interposed by any defendant against
a complaint without individually specifying their claims against DEL another defendant. If and when such a cross-claim is made by a non-
MONTE or any of the other defendant companies. Furthermore, not one settling defendant against a settling defendant, it is within the discretion of
plaintiff claimant filed a motion for the removal of either DEL MONTE or the trial court to determine the propriety of allowing such a cross-claim
CHIQUITA as defendants in Civil Case Nos. 5617 and 24,251-96. and if the settling defendant must remain a party to the case purely in
There is, thus, a primary need to establish who the specific parties to the relation to the cross claim.
alleged compromise agreements are, as well as their corresponding In Armed Forces of the Philippines Mutual Benefit Association, Inc. v.
84
rights and obligations therein. For this purpose, the courts a quo may Court of Appeals, the Court had the occasion to state that "where there
require the presentation of additional evidence from the parties. are, along with the parties to the compromise, other persons involved in
Thereafter, on the basis of the records of the cases at bar and the the litigation who have not taken part in concluding the compromise
additional evidence submitted by the parties, if any, the trial courts can agreement but are adversely affected or feel prejudiced thereby, should
then determine who among the defendants may be dropped from the said not be precluded from invoking in the same proceedings an adequate
85
cases. relief therefor."
86
It is true that, under Article 2194 of the Civil Code, the responsibility of Relevantly, in Philippine International Surety Co., Inc. v. Gonzales, the
two or more persons who are liable for the same quasi-delict is solidary. Court upheld the ruling of the trial court that, in a joint and solidary
A solidary obligation is one in which each of the debtors is liable for the
! 93!
7
obligation, the paying debtor may file a third-party complaint and/or a In 1998, petitioner filed a Complaint for reconveyance of real property
cross-claim to enforce his right to seek contribution from his co-debtors. with declaration of nullity of original certificate of title (OCT) against
Hence, the right of the remaining defendant(s) to seek reimbursement in respondents Elizabeth Monzon (Monzon), William Geston and the
the above situation, if proper, is not affected by the compromise Registry of Deeds of La Trinidad, Benguet. The Complaint was filed
agreements allegedly entered into by NAVIDA, et al., and ABELLA, et al., before the Municipal Trial Court (MTC) of La Trinidad, Benguet.
with some of the defendant companies. After trial, the MTC found respondent Monzon guilty of fraud in obtaining
8
WHEREFORE, the Court hereby GRANTS the petitions for review on an OCT over petitioner’s property. It ordered her to reconvey the said
9
certiorari in G.R. Nos. 125078, 126654, and 128398. We REVERSE and property to petitioner, and to pay damages and costs of suit.
SET ASIDE the Order dated May 20, 1996 of the Regional Trial Court of Respondents appealed to the Regional Trial Court (RTC) of La Trinidad,
General Santos City, Branch 37, in Civil Case No. 5617, and the Order Benguet.
dated October 1, 1996 of the Regional Trial Court of Davao City, Branch After going over the MTC records and the parties’ respective memoranda,
16, and its subsequent Order dated December 16, 1996 denying the RTC of La Trinidad, Benguet, Branch 10, through Acting Presiding
reconsideration in Civil Case No. 24,251-96, and REMAND the records of Judge Fernando P. Cabato (Judge Cabato), issued its October 22, 2003
10
this case to the respective Regional Trial Courts of origin for further and Order, declaring the MTC without jurisdiction over petitioner’s cause of
appropriate proceedings in line with the ruling herein that said courts action. It further held that it will take cognizance of the case pursuant to
have jurisdiction over the subject matter of the amended complaints in Section 8, Rule 40 of the Rules of Court, which reads:
Civil Case Nos. 5617 and 24,251-96. SECTION 8. Appeal from orders dismissing case without trial; lack of
The Court likewise GRANTS the motion filed by Del Monte to withdraw its jurisdiction. – x x x
petition in G.R. No. 127856. In view of the previous grant of the motion to If the case was tried on the merits by the lower court without jurisdiction
withdraw the petition in G.R. No. 125598, both G.R. Nos. 127856 and over the subject matter, the Regional Trial Court on appeal shall not
125598 are considered CLOSED AND TERMINATED. dismiss the case if it has original jurisdiction thereof, but shall decide the
No pronouncement as to costs. case in accordance with the preceding section, without prejudice to the
SO ORDERED. admission of amended pleadings and additional evidence in the interest
G.R. No. 174908 June 17, 2013 of justice. Both parties acknowledged receipt of the October 22, 2003
11
DARMA MASLAG, Petitioner, Order, but neither presented additional evidence before the new judge,
12
vs. Edgardo B. Diaz De Rivera, Jr. (Judge Diaz De Rivera).
13
ELIZABETH MONZON, WILLIAM GESTON, and REGISTRY OF On May 4, 2004, Judge Diaz De Rivera issued a Resolution reversing
DEEDS OF BENGUET, Respondents. the MTC Decision. The fallo reads as follows:
DECISION WHEREFORE, the Judgment appealed from the Municipal Trial Court of
DEL CASTILLO, J.: La Trinidad, Benguet is set aside. [Petitioner] is ordered to turn over the
"It is incumbent upon x x x appellants to utilize the correct mode of appeal possession of the 4,415 square meter land she presently occupies to
of the decisions of trial courts to the appellate courts. In the mistaken [Monzon]. This case is remanded to the court a quo for further
1 proceedings to determine whether [Maslag] is entitled to the remedies
choice of their remedy, they can blame no one but themselves."
2 afforded by law to a builder in good faith for the improvements she
This is a Petition for Review on Certiorari of the May 31, 2006
3 constructed thereon.
Resolution of the Court of Appeals (CA) in CA-G.R. CV No. 83365,
which dismissed petitioner Darma Maslag's (petitioner) ordinary appeal to No pronouncement as to damages and costs.
14
it for being an improper remedy. The Resolution disposed of the case as SO ORDERED.
15
follows: Petitioner filed a Notice of Appeal from the RTC’s May 4, 2004
WHEREFORE, the Motion to Dismiss is GRANTED, and the Appeal is Resolution.
hereby DISMISSED. Petitioner assailed the RTC’s May 4, 2004 Resolution for reversing the
4 16
SO ORDERED. MTC’s factual findings and prayed that the MTC Decision be adopted.
The Petition also assails the CA’s September 22, 2006 Her prayer before the CA reads:
5 6
Resolution denying petitioner’s Motion for Reconsideration. WHEREFORE, premises considered, it is most respectfully prayed that
Factual Antecedents the decision of the Regional Trial Court, Branch 10 of La Trinidad,
Benguet, appealed from be reversed in toto and that the Honorable Court
! 94!
adopt the decision of the Municipal Trial Court. Further reliefs just and AVAILED OF BY THE PETITIONER – A PETITION FOR
17
equitable under the premises are prayed for. REVIEWUNDER RULE 42 OR AN ORDINARY APPEAL UNDER RULE
24
Respondents moved to dismiss petitioner’s ordinary appeal for being the 41.
improper remedy. They asserted that the proper mode of appeal is a Our Ruling
Petition for Review under Rule 42 because the RTC rendered its May 4, In its October 22, 2003 Order, the RTC declared that the MTC has no
18
2004 Resolution in its appellate jurisdiction. jurisdiction over the subject matter of the case based on the supposition
Ruling of the Court of Appeals that the same is incapable of pecuniary estimation. Thus, following
The CA dismissed petitioner’s appeal. It observed that the RTC’s May 4, Section 8, Rule 40 of the Rules of Court, it took cognizance of the case
2004 Resolution (the subject matter of the appeal before the CA) set and directed the parties to adduce further evidence if they so desire. The
aside an MTC Judgment; hence, the proper remedy is a Petition for parties bowed to this ruling of the RTC and, eventually, submitted the
19
Review under Rule 42, and not an ordinary appeal. case for its decision after they had submitted their respective
20
Petitioner sought reconsideration. She argued, for the first time, that the memoranda.
RTC rendered its May 4, 2004 Resolution in its original jurisdiction. She We cannot, however, gloss over this jurisdictional faux pas of the RTC.
cited the earlier October 22, 2003 Order of the RTC declaring the MTC Since it involves a question of jurisdiction, we may motu proprio review
25
without jurisdiction over the case. and pass upon the same even at this late stage of the proceedings.
26
The CA denied petitioner’s Motion for Reconsideration in its September In her Complaint for reconveyance of real property with declaration of
21
22, 2006 Resolution: nullity of OCT, petitioner claimed that she and her father had been in
A perusal of the May 4, 2004 Resolution of the RTC, which is the subject open, continuous, notorious and exclusive possession of the disputed
matter of the appeal, clearly reveals that it took cognizance of the MTC property since the 1940’s. She averred:
case in the exercise of its appellate jurisdiction. Consequently, as We 7. Sometime in the year 1987, Elizabeth Monzon, the owner of
have previously enunciated, the proper remedy, is a petition for review the adjacent parcel of land being occupied by plaintiff [Maslag],
under Rule 42 and not an ordinary appeal under Rule 41. informed the plaintiff that the respective parcels of land being
WHEREFORE, premises considered, the instant Motion for claimed by them can now be titled. A suggestion was, thereafter
Reconsideration is DENIED. The May 31, 2006 Resolution of this Court is made, that those who were interested to have their lands titled,
hereby AFFIRMED in toto. will contribute to a common fund for the surveying and
22
SO ORDERED. subsequent titling of the land;
Hence this Petition wherein petitioner prays that the CA be ordered to 8. Since plaintiff had, for so long, yearned for a title to the land
23
take cognizance of her appeal. she occupies, she contributed to the amount being requested by
Issues Elizabeth Monzon;
Petitioner set forth the following issues in her Petition: 9. A subdivision survey was made and in the survey, the
WHETHER X X X THE COURT OF APPEALS WAS CORRECT IN respective areas of the plaintiff and the defendants were defined
DISMISSING THE APPEAL FILED BY THE PETITIONER, and delimited – all for purposes of titling. x x x
CONSIDERING THAT THE REGIONAL TRIAL COURT, BRANCH 10 OF 10. But alas, despite the assurance of subdivided titles, when the
LA TRINIDAD, BENGUET HELD THAT THE ORIGINAL COMPLAINT AS title was finally issued by the Registry of Deeds, the same was
FILED BEFORE THE MUNICIPAL TRIAL COURT OF LA TRINIDAD, only in the name of Elizabeth Monzon and WILLIAM GESTON.
BENGUET WAS DECIDED BY THE LATTER WITHOUT ANY The name of Darma Maslag was fraudulently, deliberately and in
JURISDICTION AND, IN ORDERING THAT THE CASE SHALL BE bad faith omitted. Thus, the title to the property, to the extent of
DECIDED PURSUANT TO THE PROVISION OF SECTION 8 OF RULE 18,295 square meters, was titled solely in the name of
40 OF THE RULES OF COURT, IT DECIDED THE CASE NOT ON ITS ELIZABETH MONZON.
APPELLATE JURISDICTION BUT ON ITS ORIGINAL JURISDICTION As a relief, petitioner prayed that Monzon be ordered to reconvey the
WHAT WILL BE THE EFFECT OF THE DECISION OF THE REGIONAL portion of the property which she claimed was fraudulently included in
TRIAL COURT, BRANCH 10 OF LA TRINIDAD, BENGUET, WHEN IT Monzon’s title. Her primary relief was to recover ownership of real
DECIDED A CASE APPEALED BEFORE IT UNDER THE PROVISION property. Indubitably, petitioner’s complaint involves title to real property.
OF SECTION 8, RULE 40 OF THE RULES OF COURT OF THE An action "involving title to real property," on the other hand, was defined
PHILIPPINES, AS TO THE COURSE OF REMEDY THAT MAY BE as an action where "the plaintiff’s cause of action is based on a claim that
! 95!
she owns such property or that she has the legal rights to have exclusive SECTION 2. Dismissal of improper appeal to the Court of Appeals. – An
27
control, possession, enjoyment, or disposition of the same." appeal under Rule 41 taken from the Regional Trial Court to the Court of
Under the present state of the law, in cases involving title to real property, Appeals raising only questions of law shall be dismissed, issues purely of
original and exclusive jurisdiction belongs to either the RTC or the MTC, law not being reviewable by said court. Similarly, an appeal by notice of
28
depending on the assessed value of the subject property. Pertinent appeal instead of by petition for review from the appellate judgment of a
29
provisions of Batas Pambansa Blg. (BP) 129, as amended by Republic Regional Trial Court shall be dismissed.
30
Act (RA) No. 7691, provides: An appeal erroneously taken to the Court of Appeals shall not be
Sec. 19. Jurisdiction in civil cases. – Regional Trial Courts shall exercise transferred to the appropriate court but shall be dismissed
exclusive original jurisdiction: outright.1âwphi1 (Emphasis supplied)
(1) In all civil actions in which the subject of the litigation is There are two modes of appealing an RTC decision or resolution on
34
incapable of pecuniary estimation; issues of fact and law. The first mode is an ordinary appeal under Rule
(2) In all civil actions which involve the title to, or possession of, 41 in cases where the RTC exercised its original jurisdiction. It is done by
real property, or any interest therein, where the assessed value filing a Notice of Appeal with the RTC. The second mode is a petition for
of the property involved exceeds Twenty thousand pesos review under Rule 42 in cases where the RTC exercised its appellate
(₱20,000.00) or for civil actions in Metro Manila, where x x x the jurisdiction over MTC decisions. It is done by filing a Petition for Review
assessed value of the property exceeds Fifty thousand pesos with the CA. Simply put, the distinction between these two modes of
([P]50,000.00) except actions for forcible entry into and unlawful appeal lies in the type of jurisdiction exercised by the RTC in the Order or
detainer of lands or buildings, original jurisdiction over which is Decision being appealed.
conferred upon Metropolitan Trial Courts, Municipal Trial Courts, As discussed above, the MTC has original and exclusive jurisdiction over
and Municipal Circuit Trial Courts; the subject matter of the case; hence, there is no other way the RTC
xxxx could have taken cognizance of the case and review the court a quo’s
SEC. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts Judgment except in the exercise of its appellate jurisdiction. Besides, the
and Municipal Circuit Trial Courts in Civil Cases. — Metropolitan Trial new RTC Judge who penned the May 4, 2004 Resolution, Judge Diaz de
Courts, Municipal Trial Courts and Municipal Circuit Trial Courts shall Rivera, actually treated the case as an appeal despite the October 22,
exercise: 2003 Order. He started his Resolution by stating, "This is an appeal from
xxxx the Judgment rendered by the Municipal Trial Court (MTC) of La Trinidad
35
(3) Exclusive original jurisdiction in all civil actions which involve title to, or Benguet" and then proceeded to discuss the merits of the "appeal." In
possession of, real property, or any interest therein where the assessed the dispositive portion of said Resolution, he reversed the MTC’s findings
value of the property or interest therein does not exceed Twenty and conclusions and remanded residual issues for trial with the MTC.
thousand pesos (₱20,000.00) or, in civil actions in Metro Manila, where Thus, in fact and in law, the RTC Resolution was a continuation of the
such assessed value does not exceed Fifty thousand pesos (₱50,000.00) proceedings that originated from the MTC. It was a judgment issued by
x x x. the RTC in the exercise of its appellate jurisdiction. With regard to the
In the case at bench, annexed to the Complaint is a Declaration of Real RTC’s earlier October 22, 2003 Order, the same should be disregarded
31
Property dated November 12, 1991, which was later marked as for it produces no effect (other than to confuse the parties whether the
32
petitioner’s Exhibit "A", showing that the disputed property has an RTC was invested with original or appellate jurisdiction). It cannot be
33
assessed value of ₱12,400 only. Such assessed value of the property is overemphasized that jurisdiction over the subject matter is conferred only
well within the jurisdiction of the MTC. In fine, the RTC, thru Judge by law and it is "not within the courts, let alone the parties, to themselves
37
Cabato, erred in applying Section 19(1) of BP 129 in determining which determine or conveniently set aside." Neither would the active
court has jurisdiction over the case and in pronouncing that the MTC is participation of the parties nor estoppel operate to confer original and
divested of original and exclusive jurisdiction. exclusive jurisdiction where the court or tribunal only wields appellate
38
This brings to fore the next issue of whether the CA was correct in jurisdiction over the case. Thus, the CA is correct in holding that the
dismissing petitioner’s appeal. proper mode of appeal should have been a Petition for Review under
Section 2, Rule 50 of the Rules of Court provides for the dismissal of an Rule 42 of the Rules of Court, and not an ordinary appeal under Rule 41.
improper appeal: Seeing the futility of arguing against what the RTC actually did, petitioner
resorts to arguing for what the RTC should have done. She maintains that
! 96!
the RTC should have issued its May 4, 2004 Resolution in its original the disposition in any manner except in the ordinary course of business
jurisdiction because it had earlier ruled that the MTC had no jurisdiction and payment outside of legitimate business expenses during the
over the cause of action. pendency of the proceedings, and suspending all actions, claims and
3
Petitioner’s argument lacks merit. To reiterate, only statutes can confer proceedings against EYCO until further orders from the SEC. On
jurisdiction. Court issuances cannot seize or appropriate jurisdiction. It December 18, 1998, the hearing panel approved the proposed
has been repeatedly held that "any judgment, order or resolution issued rehabilitation plan prepared by EYCO despite the recommendation of the
39
without jurisdiction is void and cannot be given any effect." By parity of management committee for the adoption of the rehabilitation plan
reasoning, an order issued by a court declaring that it has original and prepared and submitted by the steering committee of the Consortium of
4
exclusive jurisdiction over the subject matter of the case when under the Creditor Banks which appealed the order to the Commission. On
law it has none cannot likewise be given effect. It amounts to usurpation September 14, 1999, the SEC rendered its decision disapproving the
of jurisdiction which cannot be countenanced. Since BP 129 already petition for suspension of payments, terminating EYCO’s proposed
apportioned the jurisdiction of the MTC and the RTC in cases involving rehabilitation plan and ordering the dissolution and liquidation of the
title to property, neither the courts nor the petitioner could alter or petitioning corporation. The case was remanded to the hearing panel for
5
disregard the same. Besides, in determining the proper mode of appeal liquidation proceedings. On appeal by EYCO, (CA-G.R. SP No. 55208)
from an RTC Decision or Resolution, the determinative factor is the type the CA upheld the SEC ruling. EYCO then filed a petition for certiorari
of jurisdiction actually exercised by the RTC in rendering its Decision or before this Court, docketed as G.R. No. 145977,which case was
Resolution. Was it rendered by the RTC in the exercise of its original eventually dismissed under Resolution dated May 3, 2005 upon joint
6
jurisdiction, or in the exercise of its appellate jurisdiction? In short, we manifestation and motion to dismiss filed by the parties. Said resolution
7
look at what type of jurisdiction was actually exercised by the RTC. We had become final and executory on June 16, 2005.
do not look into what type of jurisdiction the RTC should have exercised. Sometime in November 2000 while the case was still pending with the
This is but logical. Inquiring into what the RTC should have done in CA, petitioner Bank of the Philippine Islands (BPI), filed with the Office of
disposing of the case is a question which already involves the merits of the Clerk of Court, Regional Trial Court of Valenzuela City, a petition for
the appeal, but we obviously cannot go into that where the mode of extra-judicial foreclosure of real properties mortgaged to it by Eyco
appeal was improper to begin with. Properties, Inc. and Blue Star Mahogany, Inc. Public auction of the
8
WHEREFORE, premises considered, the Petition for Review is DENIED mortgaged properties was scheduled on December 19, 2000.
for lack of merit. The assailed May 31, 2006 and September 22, 2006 Claiming that the foreclosure proceedings initiated by petitioner was
Resolutions of the Court of Appeals in CA-G.R. CV No. 83365 are illegal, respondent Eduardo Hong, an unsecured creditor of Nikon
AFFIRMED. Industrial Corporation, one of the companies of EYCO, filed an action for
SO ORDERED. injunction and damages against the petitioner in the same court (RTC of
G.R. No. 161771 February 15, 2012 Valenzuela City). On its principal cause of action, the complaint alleged
BANK OF THE PHILIPPINE ISLANDS, as successor-in-interest of Far that:
East Bank and Trust Company,Petitioner, 18. The ex-officio sheriff has no authority to sell the mortgaged
vs. properties. Upon his appointment as liquidator, Edgardo Tarriela
EDUARDO HONG, doing business under the name and style was empowered by the SEC to receive and preserve all assets,
"SUPER LINE PRINTING PRESS" and the COURT OF and cause their valuation (SEC Rules on Corporate Recovery,
APPEALS, Respondents. Rule VI, Section 6-4). Therefore, the SEC retains jurisdiction over
DECISION the mortgaged properties of EYCO Properties, Inc. To allow the
VILLARAMA, JR., J.: ex-officio sheriff to take possession of the mortgaged properties
This petition for review on certiorari under Rule 45 assails the and sell the same in a foreclosure sale would be in derogation of
1 2
Decision dated September 27, 2002 and Resolution dated January 12, said jurisdiction.
2004 of the Court of Appeals (CA) in CA-G.R. SP No. 64166. 19. All the assets of the EYCO Group should thus be surrendered
On September 16, 1997, the EYCO Group of Companies ("EYCO") filed for collation to the liquidator and all claims against the EYCO
a petition for suspension of payments and rehabilitation before the Group should be filed with the liquidator in the liquidation
Securities and Exchange Commission (SEC), docketed as SEC Case No. proceedings with the SEC. The SEC, at which the liquidation is
09-97-5764. A stay order was issued on September 19, 1997 enjoining pending, has jurisdiction over the mortgaged properties to the
! 97!
exclusion of any other court. Consequently, the ex-officio sheriff Jurisdiction is defined as the power and authority of a court to hear and
14
has absolutely no jurisdiction to issue the notice of sheriff’s sale decide a case. A court’s jurisdiction over the subject matter of the action
15
and to sell the mortgaged properties on 19 December 2000. is conferred only by the Constitution or by statute. The nature of an
20. Moreover, the sale of the mortgaged properties on 19 action and the subject matter thereof, as well as which court or agency of
December 2000 would give undue preference to defendant the government has jurisdiction over the same, are determined by the
FEBTC to the detriment of other creditors, particularly plaintiff. material allegations of the complaint in relation to the law involved and
This was specifically proscribed by the Supreme Court stating in the character of the reliefs prayed for, whether or not the
16
the case of Bank of the Philippine Islands v. Court of Appeals that complainant/plaintiff is entitled to any or all of such reliefs. And
whenever a distressed corporation asks SEC for rehabilitation jurisdiction being a matter of substantive law, the established rule is that
and suspension of payments, preferred creditors may no longer the statute in force at the time of the commencement of the action
17
assert such preference, but shall stand on equal footing with determines the jurisdiction of the court.
other creditors. Consequently, foreclosure should be disallowed Perusal of the complaint reveals that respondent does not ask the trial
so as not to prejudice other creditors or cause discrimination court to rule on its interest or claim -- as an unsecured creditor of two
9
among them. (Emphasis supplied.) companies under EYCO -- against the latter’s properties mortgaged to
After hearing, the trial court issued a temporary restraining order (TRO). petitioner. The complaint principally seeks to enjoin the foreclosure
10
Petitioner filed a motion to dismiss arguing that by plaintiff’s own proceedings initiated by petitioner over those properties on the ground
allegations in the complaint, jurisdiction over the reliefs prayed for that such properties are held in trust and placed under the jurisdiction of
belongs to the SEC, and that plaintiff is actually resorting to forum the appointed Liquidator in SEC Case No. 09-97-5764. Thus, Civil Case
shopping since he has filed a claim with the SEC and the designated No. 349-V-00 is one for injunction with prayer for damages.
Liquidator in the ongoing liquidation of the EYCO Group of Companies. In An action for injunction is a suit which has for its purpose the enjoinment
11
his Opposition, plaintiff (respondent) asserted that the RTC has of the defendant, perpetually or for a particular time, from the commission
jurisdiction on the issue of propriety and validity of the foreclosure by or continuance of a specific act, or his compulsion to continue
petitioner, in accordance with Section 1, Rule 4 of the 1997 Rules of Civil performance of a particular act. It has an independent existence, and is
Procedure, as amended, the suit being in the nature of a real action. distinct from the ancillary remedy of preliminary injunction which cannot
On January 17, 2001, the trial court denied the motion to exist except only as a part or an incident of an independent action or
12
dismiss. Petitioner’s motion for reconsideration was likewise proceeding. In an action for injunction, the auxiliary remedy of preliminary
13 18
denied. Petitioner challenged the validity of the trial court’s ruling before injunction, prohibitory or mandatory, may issue.
the CA via a petition for certiorari under Rule 65. As a rule, actions for injunction and damages lie within the jurisdiction of
The CA affirmed the trial court’s denial of petitioner’s motion to dismiss. It the RTC pursuant to Section 19 of Batas Pambansa Blg. 129, otherwise
held that questions relating to the validity or legality of the foreclosure known as the "Judiciary Reorganization Act of 1980," as amended by
proceedings, including an action to enjoin the same, must necessarily be Republic Act (R.A.) No. 7691.
cognizable by the RTC, notwithstanding that the SEC likewise possesses Sec. 19. Jurisdiction in civil cases. — Regional Trial Courts shall exercise
the power to issue injunction in all cases in which it has jurisdiction as exclusive original jurisdiction:
provided in Sec. 6 (a) of Presidential Decree (P.D.) No. 902-A. Further, (1) In all civil actions in which the subject of the litigations is incapable of
the CA stated that an action for foreclosure of mortgage and all incidents pecuniary estimation;
relative thereto including its validity or invalidity is within the jurisdiction of xxxx
the RTC and is not among those cases over which the SEC exercises (6) In all cases not within the exclusive jurisdiction of any court, tribunal,
exclusive and original jurisdiction under Sec. 5 of P.D. No. 902-A. person or body exercising x x x judicial or quasi-judicial functions;
Consequently, no grave abuse of discretion was committed by the trial xxxx
court in issuing the assailed orders. (8) In all other cases in which the demand, exclusive of interest, damages
With the CA’s denial of its motion for reconsideration, petitioner is now of whatever kind, attorney’s fees, litigation expenses, and costs or the
before this Court raising the sole issue of whether the RTC can take value of the property in controversy exceeds Three hundred thousand
cognizance of the injunction suit despite the pendency of SEC Case No. pesos (₱300,000.00) or, in such other cases in Metro Manila, where the
09-97-5764. demand exclusive of the above-mentioned items exceeds Four hundred
The petition has no merit. thousand pesos (₱400,000.00). (Italics supplied.)
! 98!
On the other hand, Sec. 6 (a) of P.D. No. 902-A empowered the SEC to over pending cases involving intra-corporate disputes submitted for final
"issue preliminary or permanent injunctions, whether prohibitory or resolution which should be resolved within one (1) year from the
mandatory, in all cases in which it has jurisdiction." Such cases in which enactment of this Code. The Commission shall retain jurisdiction over
the SEC exercises original and exclusive jurisdiction are the following: pending suspension of payments/rehabilitation cases filed as of 30
(a) Devices or schemes employed by or any acts, of the board of June 2000 until finally disposed. (Emphasis supplied.)
directors, business associates, its officers or partnership, Upon the effectivity of R.A. No. 8799, SEC Case No. 09-97-5764 was no
amounting to fraud and misrepresentation which may be longer pending.1âwphi1 The SEC finally disposed of said case when it
detrimental to the interest of the public and/or of the stockholder, rendered on September 14, 1999 the decision disapproving the petition
partners, members of associations or organizations registered for suspension of payments, terminating the proposed rehabilitation plan,
with the Commission; and ordering the dissolution and liquidation of the petitioning corporation.
(b) Controversies arising out of intra-corporate or partnership With the enactment of the new law, jurisdiction over the liquidation
relations, between and among stockholders, members or proceedings ordered in SEC Case No. 09-97-5764 was transferred to the
associates; between any or all of them and the corporation, RTC branch designated by the Supreme Court to exercise jurisdiction
partnership or association of which they are stockholders, over cases formerly cognizable by the SEC. As this Court held in
22
members or associates, respectively; and between such Consuelo Metal Corporation v. Planters Development Bank :
corporation, partnership or association and the state insofar as it The SEC assumed jurisdiction over CMC’s petition for suspension of
concerns their individual franchise or right to exist as such entity; payment and issued a suspension order on 2 April 1996 after it found
and CMC’s petition to be sufficient in form and substance. While CMC’s
(c) Controversies in the election or appointments of directors, petition was still pending with the SEC as of 30 June 2000, it was finally
trustees, officers or managers of such corporations, partnerships disposed of on 29 November 2000 when the SEC issued its Omnibus
19
or associations. Order directing the dissolution of CMC and the transfer of the liquidation
Previously, under the Rules of Procedure on Corporate Recovery, the proceedings before the appropriate trial court. The SEC finally disposed
SEC upon termination of cases involving petitions for suspension of of CMC’s petition for suspension of payment when it determined that
payments or rehabilitation may, motu proprio, or on motion by any CMC could no longer be successfully rehabilitated.
interested party, or on the basis of the findings and recommendation of However, the SEC’s jurisdiction does not extend to the liquidation of a
the Management Committee that the continuance in business of the corporation. While the SEC has jurisdiction to order the dissolution of a
debtor is no longer feasible or profitable, or no longer works to the best corporation, jurisdiction over the liquidation of the corporation now
interest of the stockholders, parties-litigants, creditors, or the general pertains to the appropriate regional trial courts. This is the reason why the
public, order the dissolution of the debtor and the liquidation of its SEC, in its 29 November 2000 Omnibus Order, directed that "the
20
remaining assets appointing a Liquidator for the purpose. The debtor’s proceedings on and implementation of the order of liquidation be
properties are then deemed to have been conveyed to the Liquidator in commenced at the Regional Trial Court to which this case shall be
trust for the benefit of creditors, stockholders and other persons in transferred." This is the correct procedure because the liquidation of a
interest. This notwithstanding, any lien or preference to any property shall corporation requires the settlement of claims for and against the
be recognized by the Liquidator in favor of the security or lienholder, to corporation, which clearly falls under the jurisdiction of the regular courts.
21
the extent allowed by law, in the implementation of the liquidation plan. The trial court is in the best position to convene all the creditors of the
However, R.A. No. 8799, which took effect on August 8, 2000, transferred corporation, ascertain their claims, and determine their
23
to the appropriate regional trial courts the SEC’s jurisdiction over those preferences. (Emphasis supplied.)
cases enumerated in Sec. 5 of P.D. No. 902-A. Section 5.2 of R.A. No. There is no showing in the records that SEC Case No. 09-97-5764 had
8799 provides: been transferred to the appropriate RTC designated as Special
SEC. 5.2 The Commission’s jurisdiction over all cases enumerated under Commercial Court at the time of the commencement of the injunction suit
Section 5 of Presidential Decree No. 902-A is hereby transferred to the on December 18, 2000. Given the urgency of the situation and the
Courts of general jurisdiction or the appropriate Regional Trial proximity of the scheduled public auction of the mortgaged properties as
Court: Provided, that the Supreme Court in the exercise of its authority per the Notice of Sheriff’s Sale, respondent was constrained to seek relief
may designate the Regional Trial Court branches that shall exercise from the same court having jurisdiction over the foreclosure proceedings
jurisdiction over these cases. The Commission shall retain jurisdiction – RTC of Valenzuela City. Respondent thus filed Civil Case No. 349-V-00
! 99!
in the RTC of Valenzuela City on December 18, 2000 questioning the from the Agreement. Respondent undertook to obtain from the Illinois
validity of and enjoining the extrajudicial foreclosure initiated by petitioner. court an order "relinquishing" jurisdiction to Philippine courts.
Pursuant to its original jurisdiction over suits for injunction and damages, In 2004, petitioner sued respondent in the Regional Trial Court of Makati
the RTC of Valenzuela City, Branch 75 properly took cognizance of the City, Branch 60 (trial court) to enforce the Agreement. Petitioner alleged
injunction case filed by the respondent. No reversible error was therefore that in violation of the Agreement, respondent exercised sole custody
committed by the CA when it ruled that the RTC of Valenzuela City, over Stephanie.
Branch 75 had jurisdiction to hear and decide respondent’s complaint for Respondent sought the dismissal of the complaint for, among others, lack
injunction and damages. of jurisdiction because of the Illinois court’s retention of jurisdiction to
Lastly, it may be mentioned that while the Consortium of Creditor Banks enforce the divorce decree.
had agreed to end their opposition to the liquidation proceedings upon The Ruling of the Trial Court
24
the execution of the Agreement dated February 10, 2003, on the basis In its Order dated 1 March 2005, the trial court sustained respondent’s
of which the parties moved for the dismissal of G.R. No. 145977, it is to motion and dismissed the case for lack of jurisdiction. The trial court held
be noted that petitioner is not a party to the said agreement. Thus, even that: (1) it is precluded from taking cognizance over the suit considering
assuming that the SEC retained jurisdiction over SEC Case No. 09-97- the Illinois court’s retention of jurisdiction to enforce its divorce decree,
5764, petitioner was not bound by the terms and conditions of the including its order awarding sole custody of Stephanie to respondent; (2)
Agreement relative to the foreclosure of those mortgaged properties the divorce decree is binding on petitioner following the "nationality rule"
5
belonging to EYCO and/or other accommodation mortgagors. prevailing in this jurisdiction; and (3) the Agreement is void for
6
WHEREFORE, the petition for review on certiorari is DENIED. The contravening Article 2035, paragraph 5 of the Civil Code prohibiting
7
Decision dated September 27, 2002 and Resolution dated January 12, compromise agreements on jurisdiction.
2004 of the Court of Appeals in CA-G.R. SP No. 64166 are AFFIRMED. Petitioner sought reconsideration, raising the new argument that the
With costs against the petitioner. divorce decree obtained by respondent is void. Thus, the divorce decree
SO ORDERED. is no bar to the trial court’s exercise of jurisdiction over the case.
G.R. No. 168785 February 5, 2010 In its Order dated 23 June 2005, the trial court denied reconsideration,
HERALD BLACK DACASIN, Petitioner, holding that unlike in the case of respondent, the divorce decree is
vs. binding on petitioner under the laws of his nationality.
SHARON DEL MUNDO DACASIN, Respondent. Hence, this petition.
DECISION Petitioner submits the following alternative theories for the validity of the
CARPIO, J.: Agreement to justify its enforcement by the trial court: (1) the Agreement
The Case novated the valid divorce decree, modifying the terms of child custody
1 2 8
For review is a dismissal of a suit to enforce a post-foreign divorce child from sole (maternal) to joint; or (2) the Agreement is independent of the
custody agreement for lack of jurisdiction. divorce decree obtained by respondent.
The Facts The Issue
Petitioner Herald Dacasin (petitioner), American, and respondent Sharon The question is whether the trial court has jurisdiction to take cognizance
Del Mundo Dacasin (respondent), Filipino, were married in Manila in April of petitioner’s suit and enforce the Agreement on the joint custody of the
1994. They have one daughter, Stephanie, born on 21 September 1995. parties’ child.
In June 1999, respondent sought and obtained from the Circuit Court, The Ruling of the Court
19th Judicial Circuit, Lake County, Illinois (Illinois court) a divorce decree The trial court has jurisdiction to entertain petitioner’s suit but not to
3
against petitioner. In its ruling, the Illinois court dissolved the marriage of enforce the Agreement which is void. However, factual and equity
petitioner and respondent, awarded to respondent sole custody of considerations militate against the dismissal of petitioner’s suit and call
Stephanie and retained jurisdiction over the case for enforcement for the remand of the case to settle the question of Stephanie’s custody.
purposes. Regional Trial Courts Vested With Jurisdiction
On 28 January 2002, petitioner and respondent executed in Manila a to Enforce Contracts
4
contract (Agreement ) for the joint custody of Stephanie. The parties Subject matter jurisdiction is conferred by law. At the time petitioner filed
chose Philippine courts as exclusive forum to adjudicate disputes arising his suit in the trial court, statutory law vests on Regional Trial Courts
exclusive original jurisdiction over civil actions incapable of pecuniary
! 100!
9
estimation. An action for specific performance, such as petitioner’s suit bracket (and for commonsensical reasons), the law decides for the
to enforce the Agreement on joint child custody, belongs to this species of separated or divorced parents how best to take care of the child and that
10
actions. Thus, jurisdiction-wise, petitioner went to the right court. is to give custody to the separated mother. Indeed, the separated parents
Indeed, the trial court’s refusal to entertain petitioner’s suit was grounded cannot contract away the provision in the Family Code on the maternal
not on its lack of power to do so but on its thinking that the Illinois court’s custody of children below seven years anymore than they can privately
divorce decree stripped it of jurisdiction. This conclusion is unfounded. agree that a mother who is unemployed, immoral, habitually drunk, drug
What the Illinois court retained was "jurisdiction x x x for the purpose of addict, insane or afflicted with a communicable disease will have sole
enforcing all and sundry the various provisions of [its] Judgment for custody of a child under seven as these are reasons deemed compelling
11
Dissolution." Petitioner’s suit seeks the enforcement not of the "various to preclude the application of the exclusive maternal custody regime
22
provisions" of the divorce decree but of the post-divorce Agreement on under the second paragraph of Article 213.
joint child custody. Thus, the action lies beyond the zone of the Illinois It will not do to argue that the second paragraph of Article 213 of the
court’s so-called "retained jurisdiction." Family Code applies only to judicial custodial agreements based on its
Petitioner’s Suit Lacks Cause of Action text that "No child under seven years of age shall be separated from the
The foregoing notwithstanding, the trial court cannot enforce the mother, unless the court finds compelling reasons to order otherwise." To
Agreement which is contrary to law. limit this provision’s enforceability to court sanctioned agreements while
In this jurisdiction, parties to a contract are free to stipulate the terms of placing private agreements beyond its reach is to sanction a double
agreement subject to the minimum ban on stipulations contrary to law, standard in custody regulation of children under seven years old of
12
morals, good customs, public order, or public policy. Otherwise, the separated parents. This effectively empowers separated parents, by the
contract is denied legal existence, deemed "inexistent and void from the simple expedient of avoiding the courts, to subvert a legislative policy
13
beginning." For lack of relevant stipulation in the Agreement, these and vesting to the separated mother sole custody of her children under seven
other ancillary Philippine substantive law serve as default parameters to years of age "to avoid a tragedy where a mother has seen her baby torn
14 23
test the validity of the Agreement’s joint child custody stipulations. away from her." This ignores the legislative basis that "[n]o man can
At the time the parties executed the Agreement on 28 January 2002, two sound the deep sorrows of a mother who is deprived of her child of tender
24
facts are undisputed: (1) Stephanie was under seven years old (having age."
been born on 21 September 1995); and (2) petitioner and respondent It could very well be that Article 213’s bias favoring one separated parent
were no longer married under the laws of the United States because of (mother) over the other (father) encourages paternal neglect, presumes
the divorce decree. The relevant Philippine law on child custody for incapacity for joint parental custody, robs the parents of custodial options,
15 25
spouses separated in fact or in law (under the second paragraph of or hijacks decision-making between the separated parents. However,
Article 213 of the Family Code) is also undisputed: "no child under seven these are objections which question the law’s wisdom not its validity or
16
years of age shall be separated from the mother x x x." (This statutory uniform enforceability. The forum to air and remedy these grievances is
17
awarding of sole parental custody to the mother is the legislature, not this Court. At any rate, the rule’s seeming harshness
18 19
mandatory, grounded on sound policy consideration, subject only to a or undesirability is tempered by ancillary agreements the separated
20
narrow exception not alleged to obtain here. ) Clearly then, the parents may wish to enter such as granting the father visitation and other
Agreement’s object to establish a post-divorce joint custody regime privileges. These arrangements are not inconsistent with the regime of
between respondent and petitioner over their child under seven years old sole maternal custody under the second paragraph of Article 213 which
contravenes Philippine law. merely grants to the mother final authority on the care and custody of the
The Agreement is not only void ab initio for being contrary to law, it has minor under seven years of age, in case of disagreements.1avvphi1
also been repudiated by the mother when she refused to allow joint Further, the imposed custodial regime under the second paragraph of
custody by the father. The Agreement would be valid if the spouses have Article 213 is limited in duration, lasting only until the child’s seventh year.
not divorced or separated because the law provides for joint parental From the eighth year until the child’s emancipation, the law gives the
21
authority when spouses live together. However, upon separation of the separated parents freedom, subject to the usual contractual limitations, to
spouses, the mother takes sole custody under the law if the child is below agree on custody regimes they see fit to adopt. Lastly, even supposing
seven years old and any agreement to the contrary is void. Thus, the law that petitioner and respondent are not barred from entering into the
suspends the joint custody regime for (1) children under seven of (2) Agreement for the joint custody of Stephanie, respondent repudiated the
separated or divorced spouses. Simply put, for a child within this age Agreement by asserting sole custody over Stephanie. Respondent’s act
! 101!
effectively brought the parties back to ambit of the default custodial The Facts of the Case and Nature of Proceeding
regime in the second paragraph of Article 213 of the Family Code vesting Justify Remand
on respondent sole custody of Stephanie. Instead of ordering the dismissal of petitioner’s suit, the logical end to its
Nor can petitioner rely on the divorce decree’s alleged invalidity - not lack of cause of action, we remand the case for the trial court to settle the
because the Illinois court lacked jurisdiction or that the divorce decree question of Stephanie’s custody. Stephanie is now nearly 15 years old,
violated Illinois law, but because the divorce was obtained by his Filipino thus removing the case outside of the ambit of the mandatory maternal
26
spouse - to support the Agreement’s enforceability. The argument that custody regime under Article 213 and bringing it within coverage of the
foreigners in this jurisdiction are not bound by foreign divorce decrees is default standard on child custody proceedings – the best interest of the
27 30
hardly novel. Van Dorn v. Romillo settled the matter by holding that an child. As the question of custody is already before the trial court and the
alien spouse of a Filipino is bound by a divorce decree obtained child’s parents, by executing the Agreement, initially showed inclination to
28
abroad. There, we dismissed the alien divorcee’s Philippine suit for share custody, it is in the interest of swift and efficient rendition of justice
accounting of alleged post-divorce conjugal property and rejected his to allow the parties to take advantage of the court’s jurisdiction, submit
submission that the foreign divorce (obtained by the Filipino spouse) is evidence on the custodial arrangement best serving Stephanie’s interest,
not valid in this jurisdiction in this wise: and let the trial court render judgment. This disposition is consistent with
There can be no question as to the validity of that Nevada divorce in any the settled doctrine that in child custody proceedings, equity may be
31
of the States of the United States. The decree is binding on private invoked to serve the child’s best interest.
respondent as an American citizen. For instance, private respondent WHEREFORE, we REVERSE the Orders dated 1 March 2005 and 23
cannot sue petitioner, as her husband, in any State of the Union. What he June 2005 of the Regional Trial Court of Makati City, Branch 60. The
is contending in this case is that the divorce is not valid and binding in this case is REMANDED for further proceedings consistent with this ruling.
jurisdiction, the same being contrary to local law and public policy. SO ORDERED.
It is true that owing to the nationality principle embodied in Article 15 of G.R. No. 163878 December 12, 2006
the Civil Code, only Philippine nationals are covered by the policy against FAR EAST BANK AND TRUST COMPANY, petitioner,
absolute divorces the same being considered contrary to our concept of vs.
public policy and morality. However, aliens may obtain divorces abroad, SHEMBERG MARKETING CORPORATION, MACKIE INDUSTRIES
which may be recognized in the Philippines, provided they are valid CORPORATION, BENSON INDUSTRIES, INC., KAMARO
according to their national law. In this case, the divorce in Nevada ENTERPRISES CORP., POLYSACCHARIDE CORP., PRIME CRAFTS,
released private respondent from the marriage from the standards of INC., CEBU UNITED POLYMER CORP., SHEMBERG NATURES
1
American law, under which divorce dissolves the marriage. CRAFT INC., MARY U. DACAY , HENRY U. DACAY, BENSON U.
xxxx DACAY, RAMON U. DACAY AND ERNESTO U. DACAY,
Thus, pursuant to his national law, private respondent is no longer the JR., respondents.
husband of petitioner. He would have no standing to sue in the case
below as petitioner’s husband entitled to exercise control over conjugal
assets. As he is bound by the Decision of his own country’s Court, which DECISION
validly exercised jurisdiction over him, and whose decision he does not
repudiate, he is estopped by his own representation before said Court
from asserting his right over the alleged conjugal property. (Emphasis SANDOVAL-GUTIERREZ, J.:
2
supplied) Before us is a petition for review on certiorari assailing the Decision
29 3
We reiterated Van Dorn in Pilapil v. Ibay-Somera to dismiss criminal and Resolution of the Court of Appeals dated February 16, 2004 and
complaints for adultery filed by the alien divorcee (who obtained the May 28, 2004 in CA-G.R. SP No. 67270.
foreign divorce decree) against his former Filipino spouse because he no Far East Bank & Trust Company (FEBTC), petitioner, is a domestic
longer qualified as "offended spouse" entitled to file the complaints under banking corporation organized and existing under Philippine laws. It is
Philippine procedural rules. Thus, it should be clear by now that a foreign now managed and operated by the Bank of the Philippine Islands with
divorce decree carries as much validity against the alien divorcee in this main office in Makati City.
jurisdiction as it does in the jurisdiction of the alien’s nationality, Shemberg Marketing Corporation, Mackie Industries Corporation, Benson
irrespective of who obtained the divorce. Industries Incorporated, Kamaro Enterprises Corporation, Polysaccharide
! 102!
Corporation, Prime Crafts Incorporated, Cebu United Polymer August 14, 1984 Shemberg Ernesto Dacay, Jr., P10,000,00
Corporation, Shemberg Natures Craft Inc., respondents herein, are all Marketing Benson Dacay, Ramon
duly registered domestic corporations based in Pakna-an, Mandaue City. Corporation Dacay, Mary Dacay,
The individual respondents, all surnamed Dacay, are directors and Ernesto Dacay, Sr., and
corporate officers of the said corporations. Henry U, Dacay
Respondents are the registered owners of several realties located in
Mandaue City described as follows: May 7, 1990 Shemberg Benson Dakay P3.976.000
Marketing Corp,
LOT NOS. AREA REGISTERED TRANSFER
(in square OWNER(S) CERTIFICATES
May 10, 1990
OF Shemberg Henry Dakay, Benson P1,565,000
meters) TITLE (TCT) NOS. Marketing Corp. & Dakay, Rosemary Tan
2209-A 6,384 Henry Dakay, Benson 14231 Mackie Industries Dakay, Ernesto Dakay, Jr.,
Dakay, Ernesto Dakay, Jr., Corp. and Ramon Dakay
Ramon Dakay
September 25, Mackie Industries Henry Dakay, Benson P1,927,500
2230 6,677 Mackie Industries Corp. (19073)-5795-
1991 Corp., Henry Dakay, Ernesto Dakay,
2231 5,563 Mackie Industries Corp. (T-21005)-6216 Dakay, Benson and Ramon Dakay,
2232 16,139 Mackie Industries Corp. (T-19451)-5929 Dakay, Ernesto
Dakay, Ramon
2207 8,847 Mackie Industries Corp. (T-19208)-5857 Dakay, and Mario
3 11,224 Shemberg Marketing Corp. 26079 Dakay
2266-A 3,112 Shemberg Marketing Corp. 19942 July 27, 1992 Mackie Industries Henry Dakay, Benson P227,313.0
7 1,322 Shemberg Marketing Corp. 26938 Corp. & Shemberg Dakay, Rosemary Tan
4 3,685 Shemberg Marketing Corp. 26080 Marketing Corp. Dakay, Ernesto Dakay,
Jr., Ramon Dakay, and
Prior to 1998, respondents entered into several credit transactions with
Mario Dakay
petitioner secured by several real estate mortgages, thus:
DATES OF MORTGAGORS SIGNATORIES AMOUNTS November 23,
Mackie Industries Henry Dakay, Benson P13,040,00
MORTGAGE 1995 Corp. & Shemberg Dakay, Ernesto Dakay, Jr.,
Marketing Corp, and Ramon Dakay
December 6, Mackie Industries Mary U. Dacay P3,000,000.00 Henry Dakay,
1977 Corp. Ramon Dakay, and
February 21, Mackie Industries Ernesto Dakay, Sr., and P500,000.00 Mario Dakay
1979 Corp. Mary U. Dakay In their respective mortgage contracts, duly annotated on respondents’
titles, the parties stipulated that upon failure or refusal of the mortgagor to
March 21, 1979 Mackie Industries Ernesto Dakay, Sr., and P1,000,000.00
pay the obligations when due, the entire principal, interest, penalties and
Corp. Mary U. Dacay other charges shall be immediately demandable and payable without
June 25, 1982 Mackie Industries Mary U. Dacay need of notice or demand; and the mortgagee shall have the absolute
P292,000.00
Corp. discretion to foreclose the mortgage extrajudicially pursuant to Act No.
3135, as amended.
October 27, Shemberg Mary U. Dacay P3,708,000.00
Pursuant to the parties’ agreements, petitioner released to respondents
1982 Marketing Corp. the principal amounts of the loans as evidenced by various promissory
notes, thus:
Note Nos. Dates Amounts Sig
TLC-2-060-970509 April 8, 1997 P4,700,000.00 Ma

! 103!
TLC-2-060-970518 July 31, 1997 P3,500,000.00 (REM), Chattel
Mary U. Dacay Mortgages (CM), Trust Receipts (TR), Surety Agreements
(JSS) and other bank forms and documents." Respondents complied
TLC-2-060-970115 September 8, 1997 P11,000,000.00 Mary
since theyU. trusted
Dacay petitioner. However, it tuned out that petitioner’s
TLC-2-060-970153 December 4, 1997 P5,000,000.00 employees filled the blanks with "false and inaccurate entries."
Mary U. Dacay
Respondents deny and dispute the genuineness and due execution of
TLC-2-060-970155 December 15, 1997 P10,000,000.00 Mary U. Dacay
the documents and pray for the following reliefs:
TLC-2-060-970156 December 15, 1997 P10,000,000.00 Mary1.U.Immediately
Dacay upon filing, to issue ex parte a 72-hour temporary
restraining order and thereafter upon summary hearing, to issue
TLC-2-060-970157 December 15, 1997 P5,000,000.00 Mary U. Dacay
a temporary restraining order for a maximum period of twenty
TLC-2-060-985002 January 12, 1998 P13,290,000.00 Mary(20)
U. Dacay
days restraining and enjoining defendants, their agents,
TLC-1-060-98512 February 6, 1998 P8,270,000.00 representatives
Mary U. Dacay or any other persons acting on their behalf from
doing or proceeding with the following:
TLC-2-060-98563 February 27, 1998 P9,342,899.00 Mary U. Dacay a) proceeding with the auction sale of the properties
TLC-2-060-985640 March 20, 1998 P6,632,500.00 Mary U. under Dacaythe REMs,
Henry U. Dacay b) execution of Certificate of Sale;
c) registering Certificate of Sale with the Registry of
TLC 2-060-986024 April 27, 1998 P19,450,000.00 Mary U. Dacay
Deeds;
TLC 2-060-986025 April 27, 1998 P13,968,990.00 Mary U. Dacay d) execution of the Deed of Final Sale and other
consolidation documents;
TLC 2-060-986026 April 27, 1998 P8,558,000.00 Mary U. Dacay
e) publication of Notices of Sale;
TLC 2-060-986029 April 28, 1998 P7,216,000.00 Mary U. Dacay f) posting of Notices of Sale;
TLC 2-060-986030 April 28, 1998 P37,600,000.00 Mary U. Dacay g) using the questioned documents, like the TRs, to seek
administrative, civil, or criminal remedies;
TLC 2-060-986031 April 28, 1998 P16,436,000.00 Mary U. Dacay h) disturbing the status quo prior to the litigation.
TLC 2-060-986032 April 28, 1998 P20,658,860.00 Mary2.U.After
Dacay due notice and hearing, a Preliminary Injunction be
issued upon posting of a bond enjoining defendant, its
TLC-2-060-986297 July 20, 1998 P13,691,490.00 Maryemployees,
U. Dacay agents, representatives, or any other persons acting
TLC-2-060-986298 July 20, 1998 P14,511,807.04 MaryonU.itsDacay
behalf from doing the above acts complained against;
3. After trial, it is prayed that judgment be rendered in favor of
TLC-2-060-986299 July 20, 1998 P74,109,900.00 Mary U. Dacay
plaintiffs and against defendant as follows:
TLC-2-060-986300 July 20, 1998 P98,094,243.30 Mary U. Dacay a) Declaring null and void the CLA, REMs, CMs, PNs,
TLC-2-060-970161 December 29, 1998 P5,239,000.00 Ernesto Dacay, JSS,Jr.TRs, and other related documents, the notices of
Mary U. Dacay sale, the entire foreclosure proceedings, including the
auction sale, the amount claimed by the bank to be the
However, respondents failed to pay the loans which matured on February outstanding account, the amount claimed by the bank to
14, 2001. Thus, petitioner sought to foreclose the mortgages be the principal, the interest unilaterally imposed by the
extrajudicially. bank, the penalties imposed by the bank and the PNs
On February 28, 2001, respondents filed with the Regional Trial Court, made basis for default and foreclosure;
4
Branch 56, Mandaue City, a Complaint for Declaratory Relief, Injunction, b) Declaring the CLA, REMs, CMs, PNs, JSS, TRs, and
Damages, Annulment of Promissory Notes, Documents, and Contracts other related documents as without consideration,
against petitioner, docketed as Civil Case No. MAN-4045. The complaint invalid, inoperative, ineffective, unenforceable, null and
alleges that prior to 1998, respondents obtained credit accommodations void and to cancel the same;
from petitioner. The latter required respondents’ representatives to sign c) To make the injunction permanent;
"standard pre-printed bank forms in fine print, such as Credit Line d) To order the bank to comply with its commitments,
Agreements (CLA), Promissory Notes (PN), Real Estate Mortgages assurances and representations to help in the
! 104!
6
rehabilitation of the Dacay Group and the restructuring of On March 27, 2001, the trial court issued an Order denying petitioner’s
its obligations, if any; motion to dismiss, thus:
e) To award to plaintiffs moral damages of P300,000.00, This resolves defendant’s Motion to Dismiss.
exemplary damages of P200,000.00, attorney’s fees Defendant in his motion insists that the case should be dismissed
of P200,000.00 plus P1,000.00 per billable hour, and on the following affirmative defenses: (a) venue is improperly laid;
litigation expenses of P300,000.00; (b) lack of jurisdiction considering the non-payment of docketing
f) Declaring that the defendant cannot validly do, perform fees; (c) non-joinder of indispensable parties and (d) lack of
or suffer to be done the acts complained of. jurisdiction or authority to enjoin foreclosure proceedings.
5
On March 9, 2001, the trial court issued an Order granting respondents’ VENUE
prayer for the issuance of a temporary restraining order (TRO), thus: Records show that the office address of plaintiffs is in Mandaue
In resolving the petition for the issuance of a TRO the court, City. In fact, defendant’s annexes to its answer (Annex "I" and
without going into the merits of the case has taken into "L") admit that plaintiffs’ business address and principal place of
consideration: business are at Pakna-an, Mandaue City. Likewise similarly
a) the fact that petitioners/plaintiffs are presently in the process of situated are the properties sought to be foreclosed. Apparently,
rehabilitating their business concerns and for which purpose, a foregoing considered, venue has been properly laid.
consortium of banks/creditors has been put into existence and JURISDICTION
that Far East Bank and Trust Company (FEBTC) even had It is to be noted that the question of jurisdiction has not been
initially approved and led such effort as indicated by the raised by defendant except with the cause of action regarding
participation of one of its Senior Vice Presidents Ricardo G. annulment of mortgages on defendant’s insistence that the tax
Lazatin; declaration attached is not the latest. Considering however that
b) the admission by respondent/defendant, in open court, that it annulment of mortgage is incapable of pecuniary estimation the
has already initiated foreclosure proceedings against court feels that jurisdiction is proper.
petitioners/plaintiffs and that it has in fact scheduled on March 30, What determines the nature of an action and the court
2001 the auction sale of petitioners’ properties subject matter of which has jurisdiction over it are the allegations made by
the foreclosure proceedings, as well as the consequent damage the plaintiff. Sandel v. Court of Appeals, 262 SCRA 101,
resultant thereto; A court’s jurisdiction cannot be made to depend upon
c) the purpose of a temporary restraining order (TRO) which is defenses set up in the answer or in a motion to dismiss
merely to suspend proceedings until there may be an opportunity but upon the allegations of the complaint. Sandel v. Court
to inquire whether any injunction should be granted. of Appeals, 262 SCRA 101,
WHEREFORE, foregoing premises considered and in the interest INDISPENSABLE PARTY
of substantial justice, the defendant is hereby ordered to cease Evidence has not been introduced, to the satisfaction of the court
and desist and/or its agents, representatives or any other person that indeed Far East Bank and Trust Company (FEBTC) no
acting in its behalf to immediately stop foreclosure proceedings of longer exists and BPI has taken over its assets and liabilities.
plaintiffs’ properties subject matter of the said foreclosure Besides, the commercial linkage was between FEBTC and
proceedings, including but not being limited to publication for Shemberg as records show.
foreclosure and subsequent auction sale of the said properties. AUTHORITY
SO ORDERED. It is an inherent power of the court concomitant to its very
Petitioner filed its Answer with Affirmative Defenses, Counterclaim, and existence to issue provisional remedies, like injunction, to protect
Vigorous Opposition to the Order directing the issuance of a TRO and/or the rights and interest of parties pending litigation.
preliminary mandatory injunction. Likewise, petitioner filed a Motion to Premises considered, the court feels and finds no basis to grant
Dismiss Based On Affirmative Defenses alleging that: (1) the venue is defendant’s motion. Accordingly, the Motion to Dismiss is, as it is
improperly laid; (2) the trial court did not acquire jurisdiction over the case hereby, DENIED.
for non-payment of proper docket fees; (3) there is non-joinder of SO ORDERED.
indispensable parties; and (4) the trial court has no jurisdiction to enjoin
the foreclosure proceedings.
! 105!
Likewise on the same day, March 27, 2001, the trial court issued another reconsideration of the Order granting respondents’ application for a
7
Order directing the issuance of a writ of preliminary injunction in favor of preliminary injunction.
respondents, thus: On February 16, 2004, the Court of Appeals promulgated its Decision
WHEREFORE, let a writ of injunction issue enjoining defendant, dismissing the petition for certiorari.
its employees, agents or representatives, and all those who may The appellate court held that as the trial court has jurisdiction over the
be acting in their behalf, from: case, its orders or decisions upon all questions therein, cannot be
(1) Taking further actions to foreclose the real estate and chattel corrected by the extraordinary writ of certiorari.
mortgage collaterals of plaintiffs; Petitioner filed a motion for reconsideration but it was denied by the Court
(2) To maintain the status quo during the pendency of the of Appeals in its Resolution of May 28, 2004.
proceedings and to refrain from performing the acts complained Hence, the instant petition raising the following issues: (a) whether the
of including but not being limited to the publication and notice of trial court has jurisdiction over Civil Case No. MAN-4045; and (b) whether
sale, conducting any foreclosure auction sale and other similar petitioner bank is entitled to the writs of certiorari, prohibition, and
acts which will violate the status quo. mandamus.
The Clerk of Court is hereby directed to issue the writ prayed for. On the first issue, petitioner contends that in real actions, the assessed
Plaintiffs are ordered to put a bond of One Million Pesos value of the property or if there is none, the estimated value thereof, must
(P1,000,000.00) be alleged in the complaint, and shall serve as the basis for computing
SO ORDERED. the fees. Nowhere in the complaint in Civil Case No. MAN-4045 did
Petitioner then filed with the trial court the following: (a) Motion to Resolve respondents allege the assessed values of their realties. Hence, there is
the Motion to Dismiss; (b) Motion to Dissolve Preliminary Mandatory no adequate basis for computing the proper filing fees. It necessarily
Injunction; (c) Motion for Reconsideration of the Order Dated March 27, follows that the fees paid are deficient. The trial court, therefore, did not
2001; and (d) Opposition to the Sufficiency of Bond. acquire jurisdiction over the case.
8
On August 16, 2001, the trial court issued the following Order: Respondents counter that a perusal of the complaint in Civil Case No.
For consideration by the court are the defendant’s (1) Motion for MAN-4045 shows that the suit primarily involves cancellation of
Reconsideration of the Denial of the Motion to Dismiss and (2) mortgages, an action incapable of pecuniary estimation. Consequently,
the Motion for Reconsideration of the Grant of Preliminary petitioner’s contention that there is a deficiency in the payment of docket
Mandatory Injunction. fees is without merit.
After a careful and exhaustive consideration of the arguments A court acquires jurisdiction over a case only upon the payment of the
9
adduced in Movant’s Motion for Reconsideration of the Denial of prescribed fees. The importance of filing fees cannot be gainsaid for
its Motion to Dismiss, the court finds that the arguments these are intended to take care of court expenses in the handling of
advanced for consideration had already been treated and passed cases in terms of costs of supplies, use of equipment, salaries and fringe
upon by this court. benefits of personnel, and others, computed as to man-hours used in the
10
The same finding also holds true with respect to defendant’s handling of each case. Hence, the non-payment or insufficient payment
Motion for Reconsideration of the Grant of Preliminary Mandatory of docket fees can entail tremendous losses to the government in general
Injunction. and to the judiciary in particular.
Accordingly, both motions are hereby DENIED. Is an action for cancellation of mortgage incapable of pecuniary
SO ORDERED. estimation?
Petitioner then filed with the Court of Appeals a petition for certiorari, Under Section 19 (1) of Batas Pambansa Blg. 180, as amended by
prohibition, and mandamus, docketed as CA-G.R. SP No. 67270, Republic Act No. 7691, Regional Trial Courts have sole, exclusive, and
contending that the trial court acted with grave abuse of discretion original jurisdiction to hear, try, and decide "all civil actions in which the
amounting to lack or excess of jurisdiction in issuing the following: (1) subject of the litigation is incapable of pecuniary estimation."
11
Order dated March 9, 2001 granting respondents’ prayer for a TRO; (2) In Singsong v. Isabela Sawmill, this Court laid the test for determining
Order dated March 27, 2001 ordering the issuance of a writ of preliminary whether the subject matter of an action is incapable of pecuniary
injunction; (3) Order also dated March 27, 2001 denying its motion to estimation, thus: Ascertain the nature of the principal action or remedy
dismiss; and (4) Order dated August 16, 2001 denying its motion for sought. If the action is primarily for recovery of a sum of money, the claim
reconsideration of the Order denying its motion to dismiss and motion for is considered capable of pecuniary estimation. Whether the trial court has
! 106!
jurisdiction would depend upon the amount of the claim. However, where hearings – two for the Dacay Group and two for the bank. Both
the basic issue is something other than the right to recover a sum of parties were even required to submit memoranda.
money, where the money claim is only incidental or a consequence Indeed, the records are bereft of any indication that the trial court
of the principal relief sought, the action is incapable of pecuniary committed grave abuse of discretion in issuing the challenged Orders.
estimation. Verily, the Court of Appeals correctly held that certiorari will not lie, the
Here, the primary reliefs prayed for by respondents in Civil Case No. sole office of the writ being to correct grave abuse of discretion. Where a
MAN-4045 is the cancellation of the real estate and chattel mortgages for court has jurisdiction over the person and the subject matter of the action,
12
want of consideration. In Bumayog v. Tumas, this Court ruled that as in the instant case, its decisions on all questions arising from the case
16
where the issue involves the validity of a mortgage, the action is one are but exercises of such jurisdiction. If its findings are not correct,
incapable of pecuniary estimation. In the more recent case of Russell v. these would at best be questions of law, not abuse of discretion
13 14 17
Vestil, this Court, citing Bumayog, held that an action questioning the correctible by the extraordinary remedy of certiorari.
validity of a mortgage is one incapable of pecuniary estimation. Petitioner WHEREFORE, this Court DENIES the petition. The assailed Decision
has not shown adequate reasons for this Court to and Resolution of the Court of Appeals in CA-G.R. SP No. 67270
revisit Bumayog and Russell. Hence, petitioner’s contention can not be are AFFIRMED. Costs against petitioner, now the Bank of the Philippine
sustained. Since respondents paid the docket fees, as computed by the Islands.
clerk of court, consequently, the trial court acquired jurisdiction over Civil SO ORDERED
Case No. MAN-4045. G.R. No. 173616 June 25, 2014
Concerning to the second issue, it should be noted that CA-G.R. SP No. AIR TRANSPORTATION OFFICE (ATO), Petitioner,
67270 is a petition for certiorari, prohibition, and mandamus alleging that vs.
the trial court acted with grave abuse of discretion amounting to lack or HON. COURT OF APPEALS (NINETEENTH DIVISION) and BERNIE G.
excess of jurisdiction in issuing the following Orders: (1) Order dated MIAQUE, Respondents.
March 9, 2001 granting respondents’ prayer for a TRO; (2) Order dated DECISION
March 27, 2001, directing the issuance of a writ of preliminary injunction; LEONARDO-DE CASTRO, J.:
(3) Order also dated March 27, 2001 denying petitioner’s motion to This petition for certiorari and prohibition of the Air Transportation Office
1
dismiss; and (4) Order dated August 16, 2001 denying petitioner’s motion (ATO) seeks the nullification of the Court of Appeals' Resolution dated
2
for reconsideration of the denial of the motion to dismiss and motion for March 29, 2006 and Resolution dated May 30, 2006 in CA-G.R. CEB-SP
reconsideration of the grant of preliminary injunction. No. 01603. The Resolution dated March 29, 2006 granted the application
This Court holds that the Court of Appeals did not commit grave abuse of for temporary restraining order (TRO) of Bernie G. Miaque, while the
discretion in issuing the questioned Orders. Resolution dated May 30, 2006 issued a writ of preliminary injunction
There is grave abuse of discretion where the acts complained of amount enjoining the implementation of the writ of execution issued by the
to an evasion of positive duty or a virtual refusal to perform a duty Regional Trial Court (RTC) of Iloilo despite Miaque's alleged continued
enjoined by law, or to act at all in contemplation of law, as where the failure and refusal to make current the supersedeas bond and to pay to
power is exercised in an arbitrary and despotic manner by reasons of the A TO the rental and concession privilege fees.
15
passion or personal hostility. It is such whimsical and capricious The proceedings on the main case of ejectment
exercise of judgment as is equivalent to lack of jurisdiction. MTCC of Iloilo City: Civil Case No. 01 (38)
The Court of Appeals found that the trial court acted in fair, reasonable, In May 2001, the ATO filed a complaint for unlawful detainer against
and expeditious manner, thus: Miaque in the Municipal Trial Court in Cities (MTCC) of Iloilo City, Branch
th
Thus, on the 6 of March 2001, His Honor held a hearing on the 3. It was docketed as Civil Case No. 01 (38). The ATO sought the
application for temporary restraining order. He conducted at least following, among others:
th th rd
three trial-type hearings on the 19 , 20 , and 23 of March 2001, (1) That Miaque be ordered to permanently vacate and peacefully
complete with direct examination, cross-examination, re-direct return to the ATO possession of:
examination, re-cross examination and marking and offer of (a) the 800-square meter Refreshment Parlor fronting the
exhibits vis-à-vis the application for the issuance of a writ of New Terminal Building-Iloilo Airport;
preliminary injunction. Four witnesses testified during the (b) the 310-square meter Restaurant/Gift Shop inside the
Iloilo Airport Terminal; and
! 107!