SECOND DIVISION

[G.R. No. 131282. January 4, 2002]

GABRIEL L. DUERO, petitioner, vs. HON. COURT OF APPEALS, and BERNARDO A.

ERADEL, respondents.

DECISION
QUISUMBING, J.:

This petition for certiorari assails the Decision[1] dated September 17, 1997, of
the Court of Appeals in CA-G.R. No. SP No. 2340- UDK, entitled Bernardo Eradel
vs. Hon. Ermelino G. Andal, setting aside all proceedings in Civil Case No.
1075, Gabriel L. Duero vs. Bernardo Eradel, before the Branch 27 of the Regional
Trial Court of Tandag, Surigao del Sur.
The pertinent facts are as follows:
Sometime in 1988, according to petitioner, private respondent Bernardo
Eradel[2] entered and occupied petitioners land covered by Tax Declaration No.
A-16-13-302, located in Baras, San Miguel, Surigao del Sur. As shown in the tax
declaration, the land had an assessed value of P5,240. When petitioner politely
informed private respondent that the land was his and requested the latter to
vacate the land, private respondent refused, but instead threatened him with
bodily harm. Despite repeated demands, private respondent remained
steadfast in his refusal to leave the land.
On June 16, 1995, petitioner filed before the RTC a complaint for Recovery of
Possession and Ownership with Damages and Attorneys Fees against private
respondent and two others, namely, Apolinario and Inocencio Ruena. Petitioner
appended to the complaint the aforementioned tax declaration. The counsel
of the Ruenas asked for extension to file their Answer and was given until July 18,
1995. Meanwhile, petitioner and the Ruenas executed a compromise
agreement, which became the trial courts basis for a partial judgment rendered
on January 12, 1996. In this agreement, the Ruenas through their counsel, Atty.
Eusebio Avila, entered into a Compromise Agreement with herein petitioner,
Gabriel Duero. Inter alia, the agreement stated that the Ruenas recognized and
bound themselves to respect the ownership and possession of Duero.[3] Herein
private respondent Eradel was not a party to the agreement, and he was
declared in default for failure to file his answer to the complaint.[4]
 Petitioner presented his evidence ex parte on February 13, 1996. On May 8,
1996, judgment was rendered in his favor, and private respondent was ordered
to peacefully vacate and turn over Lot No. 1065 Cad. 537-D to petitioner; pay
petitioner P2,000 annual rental from 1988 up the time he vacates the land,
and P5,000 as attorneys fees and the cost of the suit.[5] Private respondent
received a copy of the decision on May 25, 1996.
On June 10, 1996, private respondent filed a Motion for New Trial, alleging
that he has been occupying the land as a tenant of Artemio Laurente, Sr., since
1958. He explained that he turned over the complaint and summons to Laurente
in the honest belief that as landlord, the latter had a better right to the land and
was responsible to defend any adverse claim on it. However, the trial court
denied the motion for new trial.
Meanwhile, RED Conflict Case No. 1029, an administrative case between
petitioner and applicant-contestants Romeo, Artemio and Jury Laurente,
remained pending with the Office of the Regional Director of the Department of
Environment and Natural Resources in Davao City. Eventually, it was forwarded
to the DENR Regional Office in Prosperidad, Agusan del Sur.
On July 24, 1996, private respondent filed before the RTC a Petition for Relief
from Judgment, reiterating the same allegation in his Motion for New Trial. He
averred that unless there is a determination on who owned the land, he could
not be made to vacate the land. He also averred that the judgment of the trial
court was void inasmuch as the heirs of Artemio Laurente, Sr., who are
indispensable parties, were not impleaded.
On September 24, 1996, Josephine, Ana Soledad and Virginia, all surnamed
Laurente, grandchildren of Artemio who were claiming ownership of the land,
filed a Motion for Intervention. The RTC denied the motion.
On October 8, 1996, the trial court issued an order denying the Petition for
Relief from Judgment. In a Motion for Reconsideration of said order, private
respondent alleged that the RTC had no jurisdiction over the case, since the
value of the land was only P5,240 and therefore it was under the jurisdiction of
the municipal trial court. On November 22, 1996, the RTC denied the motion for
reconsideration.
On January 22, 1997, petitioner filed a Motion for Execution, which the RTC
granted on January 28. On February 18, 1997, Entry of Judgment was made of
record and a writ of execution was issued by the RTC on February 27, 1997. On
March 12, 1997, private respondent filed his petition for certiorari before the
Court of Appeals.
The Court of Appeals gave due course to the petition, maintaining that
private respondent is not estopped from assailing the jurisdiction of the RTC,
Branch 27 in Tandag, Surigao del Sur, when private respondent filed with said
court his Motion for Reconsideration And/Or Annulment of Judgment. The Court
of Appeals decreed as follows:

IN THE LIGHT OF ALL THE FOREGOING, the Petition is GRANTED. All proceedings in
Gabriel L. Duero vs. Bernardo Eradel, et. al. Civil Case 1075 filed in the Court a
quo, including its Decision, Annex E of the petition, and its Orders and Writ of
Execution and the turn over of the property to the Private Respondent by the
Sheriff of the Court a quo, are declared null and void and hereby SET ASIDE, No
pronouncement as to costs.

SO ORDERED.[6]

Petitioner now comes before this Court, alleging that the Court of Appeals
acted with grave abuse of discretion amounting to lack or in excess of
jurisdiction when it held that:
I.

THE LOWER COURT HAS NO JURISDICTION OVER THE SUBJECT MATTER OF THE
CASE.

II

PRIVATE RESPONDENT WAS NOT THEREBY ESTOPPED FROM QUESTIONING THE

JURISDICTION OF THE LOWER COURT EVEN AFTER IT SUCCESSFULLY SOUGHT
AFFIRMATIVE RELIEF THEREFROM.

III

THE FAILURE OF PRIVATE RESPONDENT TO FILE HIS ANSWER IS JUSTIFIED.[7]

The main issue before us is whether the Court of Appeals gravely abused its
discretion when it held that the municipal trial court had jurisdiction, and that
private respondent was not estopped from assailing the jurisdiction of the RTC
after he had filed several motions before it. The secondary issue is whether the
Court of Appeals erred in holding that private respondents failure to file an
answer to the complaint was justified.
At the outset, however, we note that petitioner through counsel submitted
to this Court pleadings that contain inaccurate statements. Thus, on page 5 of
his petition,[8] we find that to bolster the claim that the appellate court erred in
holding that the RTC had no jurisdiction, petitioner pointed to Annex E [9] of his
petition which supposedly is the Certification issued by the Municipal Treasurer of
San Miguel, Surigao, specifically containing the notation, Note: Subject for
General Revision Effective 1994. But it appears that Annex E of his petition is not
a Certification but a xerox copy of a Declaration of Real Property. Nowhere
does the document contain a notation, Note: Subject for General Revision
Effective 1994. Petitioner also asked this Court to refer to Annex F,[10] where he
said the zonal value of the disputed land was P1.40 per sq.m., thus placing the
computed value of the land at the time the complaint was filed before the RTC
at P57,113.98, hence beyond the jurisdiction of the municipal court and within
the jurisdiction of the regional trial court. However, we find that these annexes
are both merely xerox copies. They are obviously without evidentiary weight or
value.
Coming now to the principal issue, petitioner contends that respondent
appellate court acted with grave abuse of discretion. By grave abuse of
discretion is meant such capricious and whimsical exercise of judgment which is
equivalent to an excess or a lack of jurisdiction. The abuse of discretion must be
so patent and gross as to amount to an evasion of a positive duty or a virtual
refusal to perform a duty enjoined by law, or to act at all in contemplation of
law as where the power is exercised in an arbitrary and despotic manner by
reason of passion or hostility.[11] But here we find that in its decision holding that
the municipal court has jurisdiction over the case and that private respondent
was not estopped from questioning the jurisdiction of the RTC, respondent Court
of Appeals discussed the facts on which its decision is grounded as well as the
law and jurisprudence on the matter.[12] Its action was neither whimsical nor
capricious.
Was private respondent estopped from questioning the jurisdiction of the
RTC? In this case, we are in agreement with the Court of Appeals that he was
not. While participation in all stages of a case before the trial court, including
invocation of its authority in asking for affirmative relief, effectively bars a party
by estoppel from challenging the courts jurisdiction,[13] we note that estoppel
has become an equitable defense that is both substantive and remedial and its
successful invocation can bar a right and not merely its equitable
enforcement.[14] Hence, estoppel ought to be applied with caution. For
estoppel to apply, the action giving rise thereto must be unequivocal and
intentional because, if misapplied, estoppel may become a tool of injustice.[15]
In the present case, private respondent questions the jurisdiction of RTC in
Tandag, Surigao del Sur, on legal grounds. Recall that it was petitioner who filed
the complaint against private respondent and two other parties before the said
court,[16] believing that the RTC had jurisdiction over his complaint. But by then,
Republic Act 7691[17] amending BP 129 had become effective, such that
jurisdiction already belongs not to the RTC but to the MTC pursuant to said
amendment. Private respondent, an unschooled farmer, in the mistaken belief
that since he was merely a tenant of the late Artemio Laurente Sr., his landlord,
gave the summons to a Hipolito Laurente, one of the surviving heirs of Artemio
Sr., who did not do anything about the summons. For failure to answer the
complaint, private respondent was declared in default. He then filed a Motion
for New Trial in the same court and explained that he defaulted because of his
belief that the suit ought to be answered by his landlord. In that motion he
stated that he had by then the evidence to prove that he had a better right
than petitioner over the land because of his long, continuous and uninterrupted
possession as bona-fide tenant-lessee of the land.[18] But his motion was
denied. He tried an alternative recourse. He filed before the RTC a Motion for
Relief from Judgment. Again, the same court denied his motion, hence he
moved for reconsideration of the denial. In his Motion for Reconsideration, he
raised for the first time the RTCs lack of jurisdiction. This motion was again
denied. Note that private respondent raised the issue of lack of jurisdiction, not
when the case was already on appeal, but when the case was still before the
RTC that ruled him in default, denied his motion for new trial as well as for relief
from judgment, and denied likewise his two motions for reconsideration. After
the RTC still refused to reconsider the denial of private respondents motion for
relief from judgment, it went on to issue the order for entry of judgment and a
writ of execution.
Under these circumstances, we could not fault the Court of Appeals in
overruling the RTC and in holding that private respondent was not estopped
from questioning the jurisdiction of the regional trial court. The fundamental rule
is that, the lack of jurisdiction of the court over an action cannot be waived by
the parties, or even cured by their silence, acquiescence or even by their
express consent.[19] Further, a party may assail the jurisdiction of the court over
the action at any stage of the proceedings and even on appeal.[20] The
appellate court did not err in saying that the RTC should have declared itself
barren of jurisdiction over the action. Even if private respondent actively
participated in the proceedings before said court, the doctrine of estoppel
cannot still be properly invoked against him because the question of lack of
jurisdiction may be raised at anytime and at any stage of the
action.[21] Precedents tell us that as a general rule, the jurisdiction of a court is
not a question of acquiescence as a matter of fact, but an issue of conferment
as a matter of law.[22] Also, neither waiver nor estoppel shall apply to confer
jurisdiction upon a court, barring highly meritorious and exceptional
circumstances.[23] The Court of Appeals found support for its ruling in our decision
in Javier vs. Court of Appeals, thus:

x x x The point simply is that when a party commits error in filing his suit or
proceeding in a court that lacks jurisdiction to take cognizance of the same,
such act may not at once be deemed sufficient basis of estoppel. It could have
been the result of an honest mistake, or of divergent interpretations of doubtful
legal provisions. If any fault is to be imputed to a party taking such course of
action, part of the blame should be placed on the court which shall entertain the
suit, thereby lulling the parties into believing that they pursued their remedies in
the correct forum. Under the rules, it is the duty of the court to dismiss an action
whenever it appears that the court has no jurisdiction over the subject matter.
(Sec. 2, Rule 9, Rules of Court) Should the Court render a judgment without
jurisdiction, such judgment may be impeached or annulled for lack of
jurisdiction (Sec. 30, Rule 132, Ibid), within ten (10) years from the finality of the
same. [Emphasis ours.][24]

Indeed, the trial court was duty-bound to take judicial notice of the parameters
of its jurisdiction and its failure to do so, makes its decision a lawless thing.[25]
Since a decision of a court without jurisdiction is null and void, it could
logically never become final and executory, hence appeal therefrom by writ of
error would be out of the question. Resort by private respondent to a petition for
certiorari before the Court of Appeals was in order.
In holding that estoppel did not prevent private respondent from
questioning the RTCs jurisdiction, the appellate court reiterated the doctrine that
estoppel must be applied only in exceptional cases, as its misapplication could
result in a miscarriage of justice. Here, we find that petitioner, who claims
ownership of a parcel of land, filed his complaint before a court without
appropriate jurisdiction. Defendant, a farmer whose tenancy status is still
pending before the proper administrative agency concerned, could have
moved for dismissal of the case on jurisdictional grounds. But the farmer as
defendant therein could not be expected to know the nuances of jurisdiction
and related issues. This farmer, who is now the private respondent, ought not to
be penalized when he claims that he made an honest mistake when he initially
submitted his motions before the RTC, before he realized that the controversy
was outside the RTCs cognizance but within the jurisdiction of the municipal trial
court. To hold him in estoppel as the RTC did would amount to foreclosing his
avenue to obtain a proper resolution of his case. Furthermore, if the RTCs order
were to be sustained, he would be evicted from the land prematurely, while
RED Conflict Case No. 1029 would remain unresolved. Such eviction on a
technicality if allowed could result in an injustice, if it is later found that he has a
legal right to till the land he now occupies as tenant-lessee.
Having determined that there was no grave abuse of discretion by the
appellate court in ruling that private respondent was not estopped from
questioning the jurisdiction of the RTC, we need not tarry to consider in detail the
second issue. Suffice it to say that, given the circumstances in this case, no error
was committed on this score by respondent appellate court. Since the RTC had
no jurisdiction over the case, private respondent had justifiable reason in law not
to file an answer, aside from the fact that he believed the suit was properly his
landlords concern.
WHEREFORE, the petition is DISMISSED. The assailed decision of the Court of
Appeals is AFFIRMED. The decision of the Regional Trial Court in Civil Case No.
1075 entitled Gabriel L. Duero vs. Bernardo Eradel, its Order that private
respondent turn over the disputed land to petitioner, and the Writ of Execution it
issued, are ANNULLED and SET ASIDE. Costs against petitioner.
SO ORDERED.
Bellosillo, (Chairman), Mendoza, and De Leon, Jr., JJ., concur.
Buena, J., on official leave.

SECOND DIVISION

[G.R. No. 129638. December 8, 2003]

ANTONIO T. DONATO, petitioner, vs. COURT OF APPEALS, FILOMENO ARCEPE,

TIMOTEO BARCELONA, IGNACIO BENDOL, THELMA P. BULICANO,
ROSALINDA CAPARAS, ROSITA DE COSTO, FELIZA DE GUZMAN, LETICIA DE
LOS REYES, ROGELIO GADDI, PAULINO GAJARDO, GERONIMO IMPERIAL,
HOMER IMPERIAL, ELVIRA LESLIE, CEFERINO LUGANA, HECTOR PIMENTEL,
NIMFA PIMENTEL, AURELIO G. ROCERO, ILUMINADA TARA, JUANITO
VALLESPIN, AND NARCISO YABUT, respondents.

DECISION
AUSTRIA-MARTINEZ, J.:

Before us is a petition for review on certiorari filed on July 17, 1997 which
should be a petition for certiorari under Rule 65 of the Rules of Court. It assails the
Resolutions[1] dated March 21, 1997and June 23, 1997 issued by the Court of
Appeals in CA-G.R. SP No. 41394.[2]
The factual background of the case is as follows:
Petitioner Antonio T. Donato is the registered owner of a real property
located at Ciriaco Tuason Street, San Andres, Manila, covered by Transfer
Certificate of Title No. 131793 issued by the Register of Deeds of the City
of Manila on November 24, 1978. On June 7, 1994, petitioner filed a complaint
before the Metropolitan Trial Court (Branch 26) of Manila (MeTC) for forcible
entry and unlawful detainer against 43 named defendants and all unknown
occupants of the subject property.[3]
 Petitioner alleges that: private respondents had oral contracts of lease that
expired at the end of each month but were impliedly renewed under the same
terms by mere acquiescence or tolerance; sometime in 1992, they stopped
paying rent; on April 7, 1994, petitioner sent them a written demand to vacate;
the non-compliance with said demand letter constrained him to file the
ejectment case against them.[4]
Of the 43 named defendants, only 20 (private respondents,[5] for brevity)
filed a consolidated Answer dated June 29, 1994 wherein they denied non-
payment of rentals. They contend that they cannot be evicted because the
Urban Land Reform Law guarantees security of tenure and priority right to
purchase the subject property; and that there was a negotiation for the
purchase of the lots occupied by them but when the negotiation reached a
passive stage, they decided to continue payment of rentals and tendered
payment to petitioners counsel and thereafter initiated a petition for
consignation of the rentals in Civil Case No. 144049 while they await the
outcome of the negotiation to purchase.
Following trial under the Rule on Summary Procedure, the MeTC rendered
judgment on September 19, 1994 against the 23 non-answering defendants,
ordering them to vacate the premises occupied by each of them, and to pay
jointly and severally P10,000.00 per month from the date they last paid their rent
until the date they actually vacate, plus interest thereon at the legal rate
allowed by law, as well as P10,000.00 as attorneys fees and the costs of the
suit. As to the 20 private respondents, the MeTC issued a separate
judgment[6] on the same day sustaining their rights under the Land Reform Law,
declaring petitioners cause of action as not duly warranted by the facts and
circumstances of the case and dismissing the case without prejudice.
Not satisfied with the judgment dismissing the complaint as against the
private respondents, petitioner appealed to the Regional Trial Court (Branch 47)
of Manila (RTC).[7] In a Decision[8] dated July 5, 1996, the RTC sustained the
decision of the MeTC.
Undaunted, petitioner filed a petition for review with the Court of Appeals
(CA for brevity), docketed as CA-G.R. SP No. 41394. In a Resolution dated March
21, 1997, the CA dismissed the petition on two grounds: (a) the certification of
non-forum shopping was signed by petitioners counsel and not by petitioner
himself, in violation of Revised Circular No. 28-91;[9] and, (b) the only annex to
the petition is a certified copy of the questioned decision but copies of the
pleadings and other material portions of the record as would support the
allegations of the petition are not annexed, contrary to Section 3, paragraph b,
Rule 6 of the Revised Internal Rules of the Court of Appeals (RIRCA).[10]
On April 17, 1997, petitioner filed a Motion for Reconsideration,[11] attaching
thereto a photocopy of the certification of non-forum shopping duly signed by
petitioner himself[12] and the relevant records of the MeTC and the RTC.[13] Five
days later, or on April 22, 1997, petitioner filed a Supplement[14] to his motion for
reconsideration submitting the duly authenticated original of the certification of
non-forum shopping signed by petitioner.[15]
In a Resolution[16] dated June 23, 1997 the CA denied petitioners motion for
reconsideration and its supplement, ruling that petitioners subsequent
compliance did not cure the defect in the instant petition.[17]
Hence, the present petition anchored on the following grounds:
I.

RESPONDENT COURT OF APPEALS GRAVELY ERRED IN DISMISSING THE PETITION

BASED ON HYPER-TECHNICAL GROUNDS BECAUSE:

A. PETITIONER HAS SUBSTANTIALLY COMPLIED WITH SUPREME COURT

CIRCULAR NO. 28-91. MORE, PETITIONER SUBSEQUENTLY SUBMITTED
DURING THE PENDENCY OF THE PROCEEDINGS A DULY
AUTHENTICATED CERTIFICATE OF NON-FORUM SHOPPING WHICH
HE HIMSELF SIGNED AND EXECUTED IN THE UNITED STATES.

B. PETITIONER HAS SUBSTANTIALLY COMPLIED WITH SECTION 3, RULE 6 OF

THE REVISED INTERNAL RULES OF THE COURT OF APPEALS. MORE,
PETITIONER SUBSEQUENTLY SUBMITTED DURING THE PENDENCY OF
THE PROCEEDINGS COPIES OF THE RELEVANT DOCUMENTS IN THE
CASES BELOW.

C. PETITIONER HAS A MERITORIOUS APPEAL, AND HE STANDS TO LOSE

SUBSTANTIAL PROPERTY IF THE APPEAL IS NOT GIVEN DUE
COURSE. THE RULES OF PROCEDURE MUST BE LIBERALLY
CONSTRUED TO DO SUBSTANTIAL JUSTICE.

II.

RESPONDENT COURT OF APPEALS GRAVELY ERRED IN NOT RULING THAT ALL THE
ELEMENTS OF UNLAWFUL DETAINER ARE PRESENT IN THE CASE AT BAR.

III.

RESPONDENT COURT OF APPEALS ERRED IN NOT RULING THAT THE RTC MANILA,
BRANCH 47, COMMITTED REVERSIBLE ERROR IN AFFIRMING THE FINDING OF MTC
MANILA, BRANCH 26, THAT PRIVATE RESPONDENTS CANNOT BE EJECTED FROM
THE SUBJECT PROPERTY WITHOUT VIOLATING THEIR SECURITY OF TENURE EVEN IF
THE TERM OF THE LEASE IS MONTH-TO-MONTH WHICH EXPIRES AT THE END OF
EACH MONTH. IN THIS REGARD,

A. RESPONDENT COURT OF APPEALS SHOULD HAVE RULED THAT THE

RTC MANILA COMMITTED REVERSIBLE ERROR IN NOT RULING THAT
TENANTS UNDER P.D. 1517 MAY BE EVICTED FOR NON-PAYMENT OF
RENT, TERMINATION OF LEASE OR OTHER GROUNDS FOR
EJECTMENT.

B. RESPONDENT COURT OF APPEALS SHOULD HAVE RULED THAT THE

RTC MANILA COMMITTED REVERSIBLE ERROR IN NOT RULING THAT
THE ALLEGED PRIORITY RIGHT TO BUY THE LOT THEY OCCUPY DOES
NOT APPLY WHERE THE LANDOWNER DOES NOT INTEND TO SELL THE
SUBJECT PROPERTY, AS IN THE CASE AT BAR.

C. RESPONDENT COURT OF APPEALS SHOULD HAVE RULED THAT THE

RTC MANILA COMMITTED REVERSIBLE ERROR IN RULING THAT THE
SUBJECT PROPERTY IS LOCATED WITHIN A ZONAL IMPROVEMENT
AREA OR APD.

D. RESPONDENT COURT OF APPEALS SHOULD HAVE RULED THAT THE

RTC MANILA COMMITTED REVERSIBLE ERROR IN NOT RULING THAT
PRIVATE RESPONDENTS NON-COMPLIANCE WITH THE CONDITIONS
UNDER THE LAW RESULT IN THE WAIVER OF PROTECTION AGAINST
EVICTION.

E. RESPONDENT COURT OF APPEALS SHOULD HAVE RULED THAT THE

RTC MANILA COMMITTED REVERSIBLE ERROR IN NOT RULING THAT
PRIVATE RESPONDENTS CANNOT BE ENTITLED TO PROTECTION
UNDER P.D. 2016 SINCE THE GOVERNMENT HAS NO INTENTION OF
ACQUIRING THE SUBJECT PROPERTY.

F. RESPONDENT COURT OF APPEALS SHOULD HAVE RULED THAT THE

RTC MANILA COMMITTED REVERSIBLE ERROR IN FINDING THAT
THERE IS AN ON-GOING NEGOTIATION FOR THE SALE OF THE
SUBJECT PROPERTY AND THAT IT RENDERS THE EVICTION OF PRIVATE
RESPONDENTS PREMATURE.

G. RESPONDENT COURT OF APPEALS SHOULD HAVE RULED THAT THE

RTC MANILA COMMITTED REVERSIBLE ERROR IN NOT RULING THAT
THE ALLEGED CASE FOR CONSIGNATION DOES NOT BAR THE
EVICTION OF PRIVATE RESPONDENTS.

IV.
RESPONDENT COURT OF APPEALS GRAVELY ERRED IN NOT FINDING THAT
RESPONDENTS SHOULD PAY PETITIONER A REASONABLE COMPENSATION FOR
THEIR USE AND OCCUPANCY OF THE SUBJECT PROPERTY IN THE AMOUNT OF AT
LEAST P10,000.00 PER MONTH FROM THE DATE THEY LAST PAID RENT UNTIL THE TIME
THEY ACTUALLY VACATE THE SAME, WITH LEGAL INTEREST AT THE MAXIMUM RATE
ALLOWED BY LAW UNTIL PAID.

V.

RESPONDENT COURT OF APPEALS GRAVELY ERRED IN NOT FINDING THAT

RESPONDENTS SHOULD PAY PETITIONER ATTORNEYS FEES AND EXPENSES OF
LITIGATION OF AT LEAST P20,000.00, PLUS COSTS.[18]

Petitioner submits that a relaxation of the rigid rules of technical procedure is

called for in view of the attendant circumstances showing that the objectives of
the rule on certification of non-forum shopping and the rule requiring material
portions of the record be attached to the petition have not been glaringly
violated and, more importantly, the petition is meritorious.
The proper recourse of an aggrieved party from a decision of the CA is a
petition for review on certiorari under Rule 45 of the Rules of Court. However, if
the error, subject of the recourse, is one of jurisdiction, or the act complained of
was perpetrated by a court with grave abuse of discretion amounting to lack or
excess of jurisdiction, the proper remedy available to the aggrieved party is a
petition for certiorari under Rule 65 of the said Rules. As enunciated by the Court
in Fortich vs. Corona:[19]

Anent the first issue, in order to determine whether the recourse of petitioners is
proper or not, it is necessary to draw a line between an error of judgment and
an error of jurisdiction. An error of judgment is one which the court may
commit in the exercise of its jurisdiction, and which error is reviewable only by an
appeal. On the other hand, an error of jurisdiction is one where the act
complained of was issued by the court, officer or a quasi-judicial
body without or in excess of jurisdiction, or with grave abuse of discretion which
is tantamount to lack or in excess of jurisdiction. This error is correctible only by
the extraordinary writ of certiorari.[20](Emphasis supplied).

Inasmuch as the present petition principally assails the dismissal of the petition
on ground of procedural flaws involving the jurisdiction of the court a quo to
entertain the petition, it falls within the ambit of a special civil action
for certiorari under Rule 65 of the Rules of Court.
At the time the instant petition for certiorari was filed, i.e., on July 17, 1997,
the prevailing rule is the newly promulgated 1997 Rules of Civil
Procedure. However, considering that the CA Resolution being assailed was
rendered on March 21, 1997, the applicable rule is the three-
month reglementary period, established by jurisprudence.[21] Petitioner received
notice of the assailed CA Resolution dismissing his petition for review on April 4,
1997. He filed his motion reconsideration on April 17, 1997, using up only thirteen
days of the 90-day period. Petitioner received the CA Resolution denying his
motion on July 3, 1997 and fourteen days later, or on July 17, 1997, he filed a
motion for 30-day extension of time to file a petition for review which was
granted by us; and petitioner duly filed his petition on August 15, 1997, which is
well-within the period of extension granted to him.
We now go to the merits of the case.
We find the instant petition partly meritorious.
The requirement regarding the need for a certification of non-forum
shopping in cases filed before the CA and the corresponding sanction for non-
compliance thereto are found in the then prevailing Revised Circular No. 28-
91.[22] It provides that the petitioner himself must make the certification against
forum shopping and a violation thereof shall be a cause for the summary
dismissal of the multiple petition or complaint. The rationale for the rule of
personal execution of the certification by the petitioner himself is that it is only
the petitioner who has actual knowledge of whether or not he has initiated
similar actions or proceedings in other courts or tribunals; even counsel of record
may be unaware of such fact.[23] The Court has ruled that with respect to the
contents of the certification, the rule on substantial compliance may be availed
of. This is so because the requirement of strict compliance with the rule
regarding the certification of non-forum shopping simply underscores its
mandatory nature in that the certification cannot be altogether dispensed with
or its requirements completely disregarded, but it does not thereby interdict
substantial compliance with its provisions under justifiable circumstances.[24]
The petition for review filed before the CA contains a certification against
forum shopping but said certification was signed by petitioners counsel. In
submitting the certification of non-forum shopping duly signed by himself in his
motion for reconsideration,[25] petitioner has aptly drawn the Courts attention to
the physical impossibility of filing the petition for review within the 15-day
reglementary period to appeal considering that he is a resident of 1125 South
Jefferson Street, Roanoke, Virginia, U.S.A. were he to personally accomplish and
sign the certification.
We fully agree with petitioner that it was physically impossible for the petition
to have been prepared and sent to the petitioner in the United States, for him to
travel from Virginia, U.S.A. to the nearest Philippine Consulate in Washington,
D.C., U.S.A., in order to sign the certification before the Philippine Consul, and for
him to send back the petition to the Philippines within the 15-
day reglementary period. Thus, we find that petitioner has adequately
explained his failure to personally sign the certification which justifies relaxation
of the rule.
We have stressed that the rules on forum shopping, which were precisely
designed to promote and facilitate the orderly administration of justice, should
not be interpreted with such absolute literalness as to subvert its own ultimate
and legitimate objective[26] which is simply to prohibit and penalize the evils of
forum-shopping.[27] The subsequent filing of the certification duly signed by the
petitioner himself should thus be deemed substantial compliance, pro hac vice.
In like manner, the failure of the petitioner to comply with Section 3,
paragraph b, Rule 6 of the RIRCA, that is, to append to his petition copies of the
pleadings and other material portions of the records as would support the
petition, does not justify the outright dismissal of the petition. It must be
emphasized that the RIRCA gives the appellate court a certain leeway to
require parties to submit additional documents as may be necessary in the
interest of substantial justice. Under Section 3, paragraph d of Rule 3 of the
RIRCA,[28] the CA may require the parties to complete the annexes as the court
deems necessary, and if the petition is given due course, the CA may require
the elevation of a complete record of the case as provided for under Section
3(d)(5) of Rule 6 of the RIRCA.[29]At any rate, petitioner attached copies of the
pleadings and other material portions of the records below with his motion for
reconsideration.[30] In Jaro vs. Court of Appeals,[31] the Court reiterated the
doctrine laid down in Cusi-Hernandez vs. Diaz[32] and Piglas-Kamao vs. National
Labor Relations Commission[33] that subsequent submission of the missing
documents with the motion for reconsideration amounts to substantial
compliance which calls for the relaxation of the rules of procedure. We find no
cogent reason to depart from this doctrine.
Truly, in dismissing the petition for review, the CA had committed grave
abuse of discretion amounting to lack of jurisdiction in putting a premium on
technicalities at the expense of a just resolution of the case.
Needless to stress, "a litigation is not a game of technicalities." [34] When
technicality deserts its function of being an aid to justice, the Court is justified in
exempting from its operations a particular case.[35] Technical rules of procedure
should be used to promote, not frustrate justice. While the swift unclogging of
court dockets is a laudable objective, granting substantial justice is an even
more urgent ideal.[36]
The Courts pronouncement in Republic vs. Court of Appeals[37] is worth
echoing: cases should be determined on the merits, after full opportunity to all
parties for ventilation of their causes and defenses, rather than on technicality or
some procedural imperfections. In that way, the ends of justice would be better
served.[38] Thus, what should guide judicial action is that a party litigant is given
the fullest opportunity to establish the merits of his action or defense rather than
for him to lose life, honor or property on mere technicalities.[39] This guideline is
especially true when the petitioner has satisfactorily explained the lapse and
fulfilled the requirements in his motion for reconsideration,[40] as in this case.
In addition, petitioner prays that we decide the present petition on the
merits without need of remanding the case to the CA. He insists that all the
elements of unlawful detainer are present in the case. He further argues that the
alleged priority right to buy the lot they occupy does not apply where the
landowner does not intend to sell the subject property, as in the case; that
respondents cannot be entitled to protection under P.D. No. 2016 since the
government has no intention of acquiring the subject property, nor is the subject
property located within a zonal improvement area; and, that assuming that
there is a negotiation for the sale of the subject property or a pending case for
consignation of rentals, these do not bar the eviction of respondents.
We are not persuaded. We shall refrain from ruling on the foregoing issues in
the present petition for certiorari. The issues involved are factual issues which
inevitably require the weighing of evidence. These are matters that are beyond
the province of this Court in a special civil action for certiorari. These issues are
best addressed to the CA in the petition for review filed before it. As an
appellate court, it is empowered to require parties to submit additional
documents, as it may find necessary, or to receive evidence, to promote the
ends of justice, pursuant to the last paragraph of Section 9, B.P. Blg. 129,
otherwise known as The Judiciary Reorganization Act of 1980, to wit:

The Intermediate Appellate Court shall have the power to try cases and
conduct hearings, receive evidence and perform any and all acts necessary to
resolve factual issues raised in cases falling within its original and appellate
jurisdiction, including the power to grant and conduct new trials or further
proceedings.

WHEREFORE, the petition is PARTLY GRANTED. The Resolutions dated March

21, 1997 and June 23, 1997 of the Court of Appeals in CA-G.R. SP No. 41394 are
REVERSED and SET ASIDE.The case is REMANDED to the Court of Appeals for
further proceedings in CA-G.R. No. 41394, entitled, Antonio T. Donato vs. Hon.
Judge of the Regional Trial Court of Manila, Branch 47, FilomenoArcepe, et al.
SO ORDERED.
THIRD DIVISION

[G.R. No. 144025. December 27, 2002]

SPS. RENE GONZAGA and LERIO GONZAGA, petitioners, vs. HON. COURT OF
APPEALS, Second Division, Manila, HON. QUIRICO G. DEFENSOR, Judge,
RTC, Branch 36, Sixth Judicial Region, Iloilo City, and LUCKY HOMES, INC.,
represented by WILSON JESENA, JR., as Manager, respondents.

DECISION
CORONA, J.:

Before this Court is a petition for review on certiorari seeking the reversal of
the decision[1] of the Court of Appeals dated December 29, 1999 and its
resolution dated June 1, 2000 in CA-G.R. SP No. 54587.
The records disclose that, sometime in 1970, petitioner-spouses purchased a
parcel of land from private respondent Lucky Homes, Inc., situated in Iloilo and
containing an area of 240 square meters. Said lot was specifically denominated
as Lot No. 19 under Transfer Certificate of Title (TCT) No. 28254 and was
mortgaged to the Social Security System (SSS) as security for their housing
loan. Petitioners then started the construction of their house, not on Lot No. 19
but on Lot No. 18, as private respondent mistakenly identified Lot No. 18 as Lot
No. 19. Upon realizing its error, private respondent, through its general manager,
informed petitioners of such mistake but the latter offered to buy Lot No. 18 in
order to widen their premises. Thus, petitioners continued with the construction
of their house. However, petitioners defaulted in the payment of their housing
loan from SSS. Consequently, Lot No. 19 was foreclosed by SSS and petitioners
certificate of title was cancelled and a new one was issued in the name of
SSS. After Lot No. 19 was foreclosed, petitioners offered to swap Lot Nos. 18 and
19 and demanded from private respondent that their contract of sale be
reformed and another deed of sale be executed with respect to Lot No. 18,
considering that their house was built therein. However, private respondent
refused. This prompted petitioners to file, on June 13, 1996, an action for
reformation of contract and damages with the Regional Trial Court of Iloilo City,
Branch 36, which was docketed as Civil Case No. 17115.
On January 15, 1998, the trial court[2] rendered its decision dismissing the
complaint for lack of merit and ordering herein petitioners to pay private
respondent the amount of P10,000 as moral damages and another P10,000 as
attorneys fees. The pertinent conclusion of the trial court reads as follows:

Aware of such fact, the plaintiff nonetheless continued to stay in the premises of
Lot 18 on the proposal that he would also buy the same. Plaintiff however failed
to buy Lot 18 and likewise defaulted in the payment of his loan with the SSS
involving Lot 19. Consequently Lot 19 was foreclosed and sold at public
auction. Thereafter TCT No. T-29950 was cancelled and in lieu thereof TCT No. T-
86612 (Exh. 9) was issued in favor of SSS. This being the situation obtaining, the
reformation of instruments, even if allowed, or the swapping of Lot 18 and Lot 19
as earlier proposed by the plaintiff, is no longer feasible considering that plaintiff
is no longer the owner of Lot 19, otherwise, defendant will be losing Lot 18
without any substitute therefore (sic). Upon the other hand, plaintiff will be
unjustly enriching himself having in its favor both Lot 19 which was earlier
mortgaged by him and subsequently foreclosed by SSS, as well as Lot 18 where
his house is presently standing.

The logic and common sense of the situation lean heavily in favor of the
defendant. It is evident that what plaintiff had bought from the defendant is Lot
19 covered by TCT No. 28254 which parcel of land has been properly indicated
in the instruments and not Lot 18 as claimed by the plaintiff. The contracts being
clear and unmistakable, they reflect the true intention of the parties, besides the
plaintiff failed to assail the contracts on mutual mistake, hence the same need
no longer be reformed.[3]

On June 22, 1998, a writ of execution was issued by the trial court. Thus, on
September 17, 1998, petitioners filed an urgent motion to recall writ of execution,
alleging that the court a quo had no jurisdiction to try the case as it was vested
in the Housing and Land Use Regulatory Board (HLURB) pursuant to PD 957 (The
Subdivision and Condominium Buyers Protective Decree). Conformably,
petitioners filed a new complaint against private respondent with the
HLURB. Likewise, on June 30, 1999, petitioner-spouses filed before the Court of
Appeals a petition for annulment of judgment, premised on the ground that the
trial court had no jurisdiction to try and decide Civil Case No. 17115.
In a decision rendered on December 29, 1999, the Court of Appeals denied
the petition for annulment of judgment, relying mainly on the jurisprudential
doctrine of estoppel as laid down in the case of Tijam vs. Sibonghanoy.[4]
Their subsequent motion for reconsideration having been denied, petitioners
filed this instant petition, contending that the Court of Appeals erred in
dismissing the petition by applying the principle of estoppel, even if the Regional
Trial Court, Branch 36 of Iloilo City had no jurisdiction to decide Civil Case No.
17115.
At the outset, it should be stressed that petitioners are seeking from us the
annulment of a trial court judgment based on lack of jurisdiction. Because it is
not an appeal, the correctness of the judgment is not in issue here. Accordingly,
there is no need to delve into the propriety of the decision rendered by the trial
court.
Petitioners claim that the recent decisions of this Court have already
abandoned the doctrine laid down in Tijam vs. Sibonghanoy.[5] We do not
agree. In countless decisions, this Court has consistently held that, while an order
or decision rendered without jurisdiction is a total nullity and may be assailed at
any stage, active participation in the proceedings in the court which rendered
the order or decision will bar such party from attacking its jurisdiction. As we held
in the leading case of Tijam vs. Sibonghanoy:[6]

A party may be estopped or barred from raising a question in different ways

and for different reasons. Thus we speak of estoppel in pais, or estoppel by deed
or by record, and of estoppel by laches.

xxx

It has been held that a party cannot invoke the jurisdiction of a court to secure
affirmative relief against his opponent and, after obtaining or failing to obtain
such relief, repudiate, or question that same jurisdiction x x x x [T]he question
whether the court had jurisdiction either of the subject matter of the action or of
the parties was not important in such cases because the party is barred from
such conduct not because the judgment or order of the court is valid and
conclusive as an adjudication, but for the reason that such a practice can not
be tolerated obviously for reasons of public policy.

Tijam has been reiterated in many succeeding cases. Thus, in Orosa vs. Court
of Appeals;[7] Ang Ping vs. Court of Appeals;[8] Salva vs. Court of
Appeals;[9] National Steel Corporation vs. Court of Appeals;[10] Province of
Bulacan vs. Court of Appeals;[11] PNOC Shipping and Transport Corporation vs.
Court of Appeals,[12] this Court affirmed the rule that a partys active
participation in all stages of the case before the trial court, which includes
invoking the courts authority to grant affirmative relief, effectively estops such
party from later challenging that same courts jurisdiction.
In the case at bar, it was petitioners themselves who invoked the jurisdiction
of the court a quo by instituting an action for reformation of contract against
private respondents. It appears that, in the proceedings before the trial court,
petitioners vigorously asserted their cause from start to finish. Not even once did
petitioners ever raise the issue of the courts jurisdiction during the entire
proceedings which lasted for two years. It was only after the trial court rendered
its decision and issued a writ of execution against them in 1998 did petitioners
first raise the issue of jurisdiction ─ and it was only because said decision was
unfavorable to them. Petitioners thus effectively waived their right to question
the courts jurisdiction over the case they themselves filed.
Petitioners should bear the consequence of their act. They cannot be
allowed to profit from their omission to the damage and prejudice of the private
respondent. This Court frowns upon the undesirable practice of a party
submitting his case for decision and then accepting the judgment but only if
favorable, and attacking it for lack of jurisdiction if not.[13]
 Public policy dictates that this Court must strongly condemn any double-
dealing by parties who are disposed to trifle with the courts by deliberately
taking inconsistent positions, in utter disregard of the elementary principles of
justice and good faith.[14] There is no denying that, in this case, petitioners never
raised the issue of jurisdiction throughout the entire proceedings in the trial
court.Instead, they voluntarily and willingly submitted themselves to the
jurisdiction of said court. It is now too late in the day for them to repudiate the
jurisdiction they were invoking all along.
WHEREFORE, the petition for review is hereby DENIED.
SO ORDERED.
SECOND DIVISION

[G.R. No. 124644. February 5, 2004]

ARNEL ESCOBAL, petitioner, vs. HON. FRANCIS GARCHITORENA, Presiding Justice

of the Sandiganbayan, Atty. Luisabel Alfonso-Cortez, Executive Clerk of
Court IV of the Sandiganbayan, Hon. David C. Naval, Presiding Judge of
the Regional Trial Court of Naga City, Branch 21, Luz N.
Nueca, respondents.

DECISION
CALLEJO, SR., J.:

This is a petition for certiorari with a prayer for the issuance of a temporary
restraining order and preliminary injunction filed by Arnel Escobal seeking the
nullification of the remand by the Presiding Justice of the Sandiganbayan of the
records of Criminal Case No. 90-3184 to the Regional Trial Court (RTC) of Naga
City, Branch 21.
The petition at bench arose from the following milieu:
The petitioner is a graduate of the Philippine Military Academy, a member of
the Armed Forces of the Philippines and the Philippine Constabulary, as well as
the Intelligence Group of the Philippine National Police. On March 16, 1990, the
petitioner was conducting surveillance operations on drug trafficking at the Sa
Harong Caf Bar and Restaurant located along Barlin St., Naga City. He
somehow got involved in a shooting incident, resulting in the death of one
Rodney Rafael N. Nueca. On February 6, 1991, an amended Information was
filed with the RTC of Naga City, Branch 21, docketed as Criminal Case No. 90-
3184 charging the petitioner and a certain Natividad Bombita, Jr. alias Jun
Bombita with murder. The accusatory portion of the amended Information
reads:

That on or about March 16, 1990, in the City of Naga, Philippines, and within the
jurisdiction of this Honorable Court by virtue of the Presidential Waiver, dated
June 1, 1990, with intent to kill, conspiring and confederating together and
mutually helping each other, did, then and there, willfully, unlawfully and
feloniously attack, assault and maul one Rodney Nueca and accused 2Lt Arnel
Escobal armed with a caliber .45 service pistol shoot said Rodney Nueca
thereby inflicting upon him serious, mortal and fatal wounds which caused his
death, and as a consequence thereof, complainant LUZ N. NUECA, mother of
the deceased victim, suffered actual and compensatory damages in the
amount of THREE HUNDRED SIXTY-SEVEN THOUSAND ONE HUNDRED SEVEN &
95/100 (P367,107.95) PESOS, Philippine Currency, and moral and exemplary
damages in the amount of ONE HUNDRED THIRTY-FIVE THOUSAND (P135,000.00)
PESOS, Philippine Currency.[1]

On March 19, 1991, the RTC issued an Order preventively suspending the
petitioner from the service under Presidential Decree No. 971, as amended by
P.D. No. 1847. When apprised of the said order, the General Headquarters of the
PNP issued on October 6, 1992 Special Order No. 91, preventively suspending
the petitioner from the service until the case was terminated.[2]
The petitioner was arrested by virtue of a warrant issued by the RTC, while
accused Bombita remained at large. The petitioner posted bail and was
granted temporary liberty.
When arraigned on April 9, 1991,[3] the petitioner, assisted by counsel,
pleaded not guilty to the offense charged. Thereafter, on December 23, 1991,
the petitioner filed a Motion to Quash[4] the Information alleging that as
mandated by Commonwealth Act No. 408,[5] in relation to Section 1,
Presidential Decree No. 1822 and Section 95 of R.A. No. 6975, the court martial,
not the RTC, had jurisdiction over criminal cases involving PNP members and
officers.
Pending the resolution of the motion, the petitioner on June 25, 1993
requested the Chief of the PNP for his reinstatement. He alleged that under R.A.
No. 6975, his suspension should last for only 90 days, and, having served the
same, he should now be reinstated. On September 23, 1993,[6] the PNP Region V
Headquarters wrote Judge David C. Naval requesting information on whether
he issued an order lifting the petitioners suspension. The RTC did not reply. Thus,
on February 22, 1994, the petitioner filed a motion in the RTC for the lifting of the
order of suspension. He alleged that he had served the 90-day preventive
suspension and pleaded for compassionate justice. The RTC denied the motion
on March 9, 1994.[7] Trial thereafter proceeded, and the prosecution rested its
case. The petitioner commenced the presentation of his evidence. On July 20,
1994, he filed a Motion to Dismiss[8] the case. Citing Republic of the Philippines v.
Asuncion, et al.,[9] he argued that since he committed the crime in the
performance of his duties, the Sandiganbayan had exclusive jurisdiction over
the case.
On October 28, 1994, the RTC issued an Order[10] denying the motion to
dismiss. It, however, ordered the conduct of a preliminary hearing to determine
whether or not the crime charged was committed by the petitioner in relation to
his office as a member of the PNP.
In the preliminary hearing, the prosecution manifested that it was no longer
presenting any evidence in connection with the petitioners motion. It reasoned
that it had already rested its case, and that its evidence showed that the
petitioner did not commit the offense charged in connection with the
performance of his duties as a member of the Philippine Constabulary.
According to the prosecution, they were able to show the following facts: (a)
the petitioner was not wearing his uniform during the incident; (b) the offense
was committed just after midnight; (c) the petitioner was drunk when the crime
was committed; (d) the petitioner was in the company of civilians; and, (e) the
offense was committed in a beerhouse called Sa Harong Caf Bar and
Restaurant.[11]
For his part, the petitioner testified that at about 10:00 p.m. on March 15,
1990, he was at the Sa Harong Caf Bar and Restaurant at Barlin St., Naga City, to
conduct surveillance on alleged drug trafficking, pursuant to Mission Order No.
03-04 issued by Police Superintendent Rufo R. Pulido. The petitioner adduced in
evidence the sworn statements of Benjamin Cario and Roberto Fajardo who
corroborated his testimony that he was on a surveillance mission on the
aforestated date.[12]
On July 31, 1995, the trial court issued an Order declaring that the petitioner
committed the crime charged while not in the performance of his official
function. The trial court added that upon the enactment of R.A. No. 7975,[13] the
issue had become moot and academic. The amendatory law transferred the
jurisdiction over the offense charged from the Sandiganbayan to the RTC since
the petitioner did not have a salary grade of 27 as provided for in or by Section
4(a)(1), (3) thereof. The trial court nevertheless ordered the prosecution to
amend the Information pursuant to the ruling in Republic v. Asuncion[14] and R.A.
No. 7975. The amendment consisted in the inclusion therein of an allegation that
the offense charged was not committed by the petitioner in the performance of
his duties/functions, nor in relation to his office.
The petitioner filed a motion for the reconsideration[15] of the said order,
reiterating that based on his testimony and those of Benjamin Cario and
Roberto Fajardo, the offense charged was committed by him in relation to his
official functions. He asserted that the trial court failed to consider the
exceptions to the prohibition. He asserted that R.A. No. 7975, which was
enacted on March 30, 1995, could not be applied retroactively.[16]
The petitioner further alleged that Luz Nacario Nueca, the mother of the
victim, through counsel, categorically and unequivocably admitted in her
complaint filed with the Peoples Law Enforcement Board (PLEB) that he was on
an official mission when the crime was committed.
On November 24, 1995, the RTC made a volte face and issued an Order
reversing and setting aside its July 31, 1995 Order. It declared that based on the
petitioners evidence, he was on official mission when the shooting occurred. It
concluded that the prosecution failed to adduce controverting evidence
thereto. It likewise considered Luz Nacario Nuecas admission in her complaint
before the PLEB that the petitioner was on official mission when the shooting
happened.
The RTC ordered the public prosecutor to file a Re-Amended Information
and to allege that the offense charged was committed by the petitioner in the
performance of his duties/functions or in relation to his office; and, conformably
to R.A. No. 7975, to thereafter transmit the same, as well as the complete
records with the stenographic notes, to the Sandiganbayan, to wit:

WHEREFORE, the Order dated July 31, 1995 is hereby SET ASIDE and
RECONSIDERED, and it is hereby declared that after preliminary hearing, this
Court has found that the offense charged in the Information herein was
committed by the accused in his relation to his function and duty as member of
the then Philippine Constabulary.

Conformably with R.A. No. 7975 and the ruling of the Supreme Court in Republic
v. Asuncion, et al., G.R. No. 180208, March 11, 1994:

(1) The City Prosecutor is hereby ordered to file a Re-Amended

Information alleging that the offense charged was
committed by the Accused in the performance of his
duties/functions or in relation to his office, within fifteen (15)
days from receipt hereof;

(2) After the filing of the Re-Amended Information, the complete

records of this case, together with the transcripts of the
stenographic notes taken during the entire proceedings
herein, are hereby ordered transmitted immediately to the
Honorable Sandiganbayan, through its Clerk of Court, Manila,
for appropriate proceedings.[17]
 On January 8, 1996, the Presiding Justice of the Sandiganbayan ordered the
Executive Clerk of Court IV, Atty. Luisabel Alfonso-Cortez, to return the records of
Criminal Case No. 90-3184 to the court of origin, RTC of Naga City, Branch 21. It
reasoned that under P.D. No. 1606, as amended by R.A. No. 7975,[18] the RTC
retained jurisdiction over the case, considering that the petitioner had a salary
grade of 23. Furthermore, the prosecution had already rested its case and the
petitioner had commenced presenting his evidence in the RTC; following the
rule on continuity of jurisdiction, the latter court should continue with the case
and render judgment therein after trial.
Upon the remand of the records, the RTC set the case for trial on May 3,
1996, for the petitioner to continue presenting his evidence. Instead of adducing
his evidence, the petitioner filed a petition for certiorari, assailing the Order of
the Presiding Justice of the Sandiganbayan remanding the records of the case
to the RTC.
The threshold issue for resolution is whether or not the Presiding Justice of the
Sandiganbayan committed a grave abuse of his discretion amounting to excess
or lack of jurisdiction in ordering the remand of the case to the RTC.
The petitioner contends that when the amended information was filed with
the RTC on February 6, 1991, P.D. No. 1606 was still in effect. Under Section 4(a)
of the decree, the Sandiganbayan had exclusive jurisdiction over the case
against him as he was charged with homicide with the imposable penalty
of reclusion temporal, and the crime was committed while in the performance
of his duties. He further asserts that although P.D. No. 1606, as amended by P.D.
No. 1861 and by R.A. No. 7975 provides that crimes committed by members and
officers of the PNP with a salary grade below 27 committed in relation to office
are within the exclusive jurisdiction of the proper RTC, the amendment thus
introduced by R.A. No. 7975 should not be applied retroactively. This is so, the
petitioner asserts, because under Section 7 of R.A. No. 7975, only those cases
where trial has not begun in the Sandiganbayan upon the effectivity of the law
should be referred to the proper trial court.
The private complainant agrees with the contention of the petitioner. In
contrast, the Office of the Special Prosecutor contends that the Presiding Justice
of the Sandiganbayan acted in accordance with law when he ordered the
remand of the case to the RTC. It asserts that R.A. No. 7975 should be applied
retroactively. Although the Sandiganbayan had jurisdiction over the crime
committed by the petitioner when the amended information was filed with the
RTC, by the time it resolved petitioners motion to dismiss on July 31, 1995, R.A. No.
7975 had already taken effect. Thus, the law should be given retroactive effect.

The Ruling of the Court

 The respondent Presiding Justice acted in accordance with law and the
rulings of this Court when he ordered the remand of the case to the RTC, the
court of origin.
The jurisdiction of the court over criminal cases is determined by the
allegations in the Information or the Complaint and the statute in effect at the
time of the commencement of the action, unless such statute provides for a
retroactive application thereof. The jurisdictional requirements must be alleged
in the Information.[19] Such jurisdiction of the court acquired at the inception of
the case continues until the case is terminated.[20]
Under Section 4(a) of P.D. No. 1606 as amended by P.D. No. 1861, the
Sandiganbayan had exclusive jurisdiction in all cases involving the following:

(1) Violations of Republic Act No. 3019, as amended, otherwise known as the
Anti-Graft and Corrupt Practices Act, Republic Act No. 1379, and Chapter II,
Section 2, Title VII of the Revised Penal Code;

(2) Other offenses or felonies committed by public officers and employees in

relation to their office, including those employed in government-owned or
controlled corporations, whether simple or complexed with other crimes, where
the penalty prescribed by law is higher than prision correccional or
imprisonment for six (6) years, or a fine of P6,000.00 .[21]

However, for the Sandiganbayan to have exclusive jurisdiction under the

said law over crimes committed by public officers in relation to their office, it is
essential that the facts showing the intimate relation between the office of the
offender and the discharge of official duties must be alleged in the
Information. It is not enough to merely allege in the Information that the crime
charged was committed by the offender in relation to his office because that
would be a conclusion of law.[22] The amended Information filed with the RTC
against the petitioner does not contain any allegation showing the intimate
relation between his office and the discharge of his duties. Hence, the RTC had
jurisdiction over the offense charged when on November 24, 1995, it ordered
the re-amendment of the Information to include therein an allegation that the
petitioner committed the crime in relation to office. The trial court erred when it
ordered the elevation of the records to the Sandiganbayan. It bears stressing
that R.A. No. 7975 amending P.D. No. 1606 was already in effect and under
Section 2 of the law:

In cases where none of the principal accused are occupying positions

corresponding to salary grade 27 or higher, as prescribed in the said Republic
Act No. 6758, or PNP officers occupying the rank of superintendent or higher, or
their equivalent, exclusive jurisdiction thereof shall be vested in the proper
Regional Trial Court, Metropolitan Trial Court, Municipal Trial Court, and
Municipal Circuit Trial Court, as the case may be, pursuant to their respective
jurisdiction as provided in Batas Pambansa Blg. 129.

Under the law, even if the offender committed the crime charged in relation
to his office but occupies a position corresponding to a salary grade below 27,
the proper Regional Trial Court or Municipal Trial Court, as the case may be, shall
have exclusive jurisdiction over the case. In this case, the petitioner was a Police
Senior Inspector, with salary grade 23. He was charged with homicide
punishable by reclusion temporal. Hence, the RTC had exclusive jurisdiction over
the crime charged conformably to Sections 20 and 32 of Batas Pambansa Blg.
129, as amended by Section 2 of R.A. No. 7691.
The petitioners contention that R.A. No. 7975 should not be applied
retroactively has no legal basis. It bears stressing that R.A. No. 7975 is a
substantive procedural law which may be applied retroactively.[23]
IN LIGHT OF ALL THE FOREGOING, the petition is DISMISSED. No
pronouncement as to costs.
SO ORDERED.

THIRD DIVISION

G.R. No. 191894 July 15, 2015

DANILO A. DUNCANO, Petitioner,

vs.
HON. SANDIGANBAYAN (2nd DIVISION), and HON. OFFICE OF THE SPECIAL
PROSECUTOR, Respondents.

DECISION

PERALTA, J.:

This petition for certiorari under Rule 65 of the Rules of Court (Rules) with prayer
for issuance of preliminary injunction and/or temporary restraining order seeks to
reverse and set aside the August 18, 2009 Resolution1 and February 8, 2010
Order2 of respondent Sandiganbayan Second Division in Criminal Case No. SB-
09-CRM-0080, which denied petitioner's Motion to Dismiss on the ground of la9k
of jurisdiction.

The facts are plain and undisputed.

Petitioner Danilo A. Duncano is, at the time material to the case, the Regional
Director of the Bureau of Internal Revenue (BIR) with Salary Grade 26 as
classified under Republic Act (R.A.) No. 6758.3 On March 24, 2009,4 the Office of
the Special Prosecutor (OSP), Office of the Ombudsman, filed a criminal case
against him for violation of Section 8, in relation to Section 11 of R.A. No.
6713,5 allegedly committed as follows:

That on or about April 15, 2003, or sometime prior or subsequent thereto, in

Quezon City, Philippines, and within the jurisdiction of this Honorable Court,
accused DANILODUNCANO y ACIDO, a high ranking public officer, being the
Regional Director of Revenue Region No. 7, of the Bureau of Internal Revenue,
Quezon City, and as such is under an obligation to accomplish and submit
declarations under oath of his assets, liabilities and net worth and financial and
business interests, did then and there, wilfully, unlawfully and criminally fail to
disclose in his Sworn Statement of Assets and Liabilities and Networth (SALN) for
the year 2002, his financial and business interests/connection in Documail
Provides Corporation and Don Plus Trading of which he and his family are the
registered owners thereof, and the 1993 Nissan Patrol motor vehicle registered in
the name of his son VINCENT LOUIS P. DUNCANO which are part of his assets, to
the damage and prejudice of public interest.

CONTRARY TO LAW.6

Prior to his arraignment, petitioner filed a Motion to Dismiss With Prayer to Defer
the Issuance of Warrant of Arrest7before respondent Sandiganbayan Second
Division. As the OSP alleged, he admitted that he is a Regional Director with
Salary Grade 26. Citing Inding v. Sandiganbayan8 and Serana v.
Sandiganbayan, et al.,9 he asserted that under Presidential Decree (P.D.) No.
1606, as amended by Section 4 (A) (1) of R.A No. 8249,10 the Sandiganbayan
has no jurisdiction to try and hear the case because he is an official of the
executive branch occupying the position of a Regional Director but with a
compensation that is classified as below Salary Grade 27.

In its Opposition,11 the OSP argued that a reading of Section 4 (A) (1) (a) to (g)
of the subject law would clearly show that the qualification as to Salary Grade
27 and higher applies only to officials of the executive branch other than the
Regional Director and those specifically enumerated. This is so since the term
"Regional Director" and "higher" are separated by the conjunction "and," which
signifies that these two positions are different, apart and distinct, words but are
conjoined together "relating one to the other" to give effect to the purpose of
the law. The fact that the position of Regional Director was specifically
mentioned without indication as to its salary grade signifies the lawmakers’
intention that officials occupying such position, regardless of salary grade, fall
within the original and exclusive jurisdiction of the Sandiganbayan. This issue, it is
claimed, was already resolved in Inding. Finally, the OSP contended that the
filing of the motion to dismiss is premature considering that the Sandiganbayan
has yet to acquire jurisdiction over the person of the accused.

Still not to be outdone, petitioner invoked the applicability of Cuyco v.

Sandiganbayan12 and Organo v. Sandiganbayan13 in his rejoinder.

On August 18, 2009, the Sandiganbayan Second Division promulgated its

Resolution, disposing: WHEREFORE, in the light of the foregoing, the Court hereby
DENIES the instant Motion to Dismiss for being devoid of merit. Let a Warrant of
Arrest be therefore issued against the accused.

SO ORDERED.14

The respondent court ruled that the position of Regional Director is one of those
exceptions where the Sandiganbayan has jurisdiction even if such position is not
Salary Grade 27. It was opined that Section 4 (A) (1) of R.A No. 8249
unequivocally provides that respondent court has jurisdiction over officials of the
executive branch of the government occupying the position of regional director
and higher, otherwise classified as Salary Grade 27 and higher, of R.A. No. 6758,
including those officials who are expressly enumerated in subparagraphs (a) to
(g). In support of the ruling, this Court’s pronouncements in Indingand Binay v.
Sandiganbayan15 were cited.

Petitioner filed a Motion for Reconsideration, but it was denied;16 Hence, this
petition.

Instead of issuing a temporary restraining order or writ of preliminary injunction,

the Court required respondents to file a comment on the petition without
necessarily giving due course thereto.17 Upon compliance of the OSP, a
Rejoinder (supposedly a Reply) was filed by petitioner.

At the heart of the controversy is the determination of whether, according to

P.D. No. 1606, as amended by Section 4 (A) (1) of R.A No. 8249, only Regional
Directors with Salary Grade of 27 and higher, as classified under R.A. No. 6758,
fall within the exclusive jurisdiction of the Sandiganbayan. Arguing that he is not
included among the public officials specifically enumerated in Section 4 (A) (1)
(a) to (g) of the law and heavily relying as well on Cuyco, petitioner insists that
respondent court lacks jurisdiction over him, who is merely a Regional Director
with Salary Grade 26. On the contrary, the OSP maintains that a Regional
Director, irrespective of salary grade, falls within the exclusive original jurisdiction
of the Sandiganbayan. We find merit in the petition.
The creation of the Sandiganbayan was mandated by Section 5, Article XIII of
the 1973 Constitution.18 By virtue of the powers vested in him by the Constitution
and pursuant to Proclamation No. 1081, dated September 21, 1972, former
President Ferdinand E. Marcos issued P.D. No. 1486.19 The decree was later
amended by P.D. No. 1606,20Section 20 of Batas Pambansa Blg. 129,21 P.D. No.
1860,22 and P.D. No. 1861.23

With the advent of the 1987 Constitution, the special court was retained as
provided for in Section 4, Article XI thereof.24 Aside from Executive Order Nos.
1425 and 14-a,26 and R.A. 7080,27 which expanded the jurisdiction of the
Sandiganbayan, P.D. No. 1606 was further modified by R.A. No. 7975,28 R.A. No.
8249,29 and just this year, R.A. No. 10660.30

For the purpose of this case, the relevant provision is Section 4 of R.A. No. 8249,
which states: SEC. 4. Section 4 of the same decree is hereby further amended to
read as follows:

"SEC. 4. Jurisdiction.– The Sandiganbayan shall exercise exclusive original

jurisdiction in all cases involving:

"A. Violations of Republic Act No. 3019, as amended, otherwise known as the
Anti-Graft and Corrupt Practices Act, Republic Act No. 1379, and Chapter II,
Section 2, Title VII, Book II of the Revised Penal Code, where one or more of the
accused are officials occupying the following positions in the government,
whether in a permanent, acting or interim capacity, at the time of the
commission of the offense:

"(1) Officials of the executive branch occupying the positions of regional

director and higher, otherwise classified as Grade ‘27’ and higher, of the
Compensation and Position Classification Act of 1989 (Republic Act No. 6758),
specifically including:

"(a) Provincial governors, vice-governors, members of the sangguniang

panlalawigan, and provincial treasurers, assessors, engineers, and other
provincial department heads;

"(b) City mayor, vice-mayors, members of the sangguniang panlungsod,

city treasurers, assessors, engineers, and other city department heads;

"(c) Officials of the diplomatic service occupying the position of consul

and higher;

"(d) Philippine army and air force colonels, naval captains, and all officers
of higher rank;
 "(e) Officers of the Philippine National Police while occupying the position
of provincial director and those holding the rank of senior superintendent
or higher;

"(f) City and provincial prosecutors and their assistants, and officials and
prosecutors in the Office of the Ombudsman and special prosecutor;

"(g) Presidents, directors or trustees, or managers of government-owned or

controlled corporations, state universities or educational institutions or
foundations.

"(2) Members of Congress and officials thereof classified as Grade ‘27’

and up under the Compensation and Position Classification Act of 1989;

"(3) Members of the judiciary without prejudice to the provisions of the

Constitution;

"(4) Chairmen and members of Constitutional Commission, without

prejudice to the provisions of the Constitution; and

"(5) All other national and local officials classified as Grade ‘27’ and
higher under the Compensation and Position Classification Act of 1989.

"B. Other offenses or felonies whether simple or complexed with other crimes
committed by the public officials and employees mentioned in subsection a of
this section in relation to their office.

"C. Civil and criminal cases filed pursuant to and in connection with Executive
Order Nos. 1, 2, 14 and 14-A, issued in 1986.

x x x"

Based on the afore-quoted, those that fall within the original jurisdiction of the
Sandiganbayan are: (1) officials of the executive branch with Salary Grade 27 or
higher, and (2) officials specifically enumerated in Section 4 (A) (1) (a) to (g),
regardless of their salary grades.31 While the first part of Section 4 (A) covers only
officials of the executive branch with Salary Grade 27 and higher, its second
part specifically includes other executive officials whose positions may not be of
Salary Grade 27 and higher but who are by express provision of law placed
under the jurisdiction of the Sandiganbayan.32

That the phrase "otherwise classified as Grade ‘27’ and higher" qualifies "regional
director and higher" is apparent from the Sponsorship Speech of Senator Raul S.
Roco on Senate Bill Nos. 1353and 844, which eventually became R.A. Nos. 7975
and 8249, respectively:

As proposed by the Committee, the Sandiganbayan shall exercise original

jurisdiction over the cases assigned to it only in instances where one or more of
the principal accused are officials occupying the positions of regional director
and higher or are otherwise classified as Grade 27 and higher by the
Compensation and Position Classification Act of 1989, whether in a permanent,
acting or interim capacity at the time of the commission of the offense. The
jurisdiction, therefore, refers to a certain grade upwards, which shall remain with
the Sandiganbayan.33 (Emphasis supplied)

To speed up trial in the Sandiganbayan, Republic Act No. 7975 was enacted for
that Court to concentrate on the "larger fish" and leave the "small fry" to the
lower courts. This law became effective on May 6, 1995 and it provided a two-
pronged solution to the clogging of the dockets of that court, to wit:

It divested the Sandiganbayan of jurisdiction over public officials whose salary

grades were at Grade "26" or lower, devolving thereby these cases to the lower
courts, and retaining the jurisdiction of the Sandiganbayan only over public
officials whose salary grades were at Grade "27" or higher and over other
specific public officials holding important positions in government regardless of
salary grade; x x x34 (Emphasis supplied)

The legislative intent is to allow the Sandiganbayan to devote its time and
expertise to big-time cases involving the so-called "big fishes" in the government
rather than those accused who are of limited means who stand trial for "petty
crimes," the so-called "small fry," which, in turn, helps the court decongest its
dockets.35

Yet, those that are classified as Salary Grade 26 and below may still fall within
the jurisdiction of the Sandiganbayan, provided that they hold the positions
enumerated by the law.36 In this category, it is the position held, not the salary
grade, which determines the jurisdiction of the Sandiganbayan.37 The specific
inclusion constitutes an exception to the general qualification relating to
"officials of the executive branch occupying the positions of regional director
and higher, otherwise classified as Grade ‘27’ and higher, of the Compensation
and Position Classification Act of 1989."38 As ruled in Inding:

Following this disquisition, the paragraph of Section 4 which provides that if the
accused is occupying a position lower than SG 27, the proper trial court has
jurisdiction, can only be properly interpreted as applying to those cases where
the principal accused is occupying a position lower than SG 27 and not among
those specifically included in the enumeration in Section 4 a. (1) (a) to (g).
Stated otherwise, except for those officials specifically included in Section 4 a.
(1) (a) to (g), regardless of their salary grades, over whom the Sandiganbayan
has jurisdiction, all other public officials below SG 27 shall be under the
jurisdiction of the proper trial courts "where none of the principal accused are
occupying positions corresponding to SG 27 or higher." By this construction, the
entire Section 4 is given effect. The cardinal rule, after all, in statutory
construction is that the particular words, clauses and phrases should not be
studied as detached and isolated expressions, but the whole and every part of
the statute must be considered in fixing the meaning of any of its parts and in
order to produce a harmonious whole. And courts should adopt a construction
that will give effect to every part of a statute, if at all possible. Ut magis valeat
quam pereat or that construction is to be sought which gives effect to the
whole of the statute – its every word.39

Thus, to cite a few, We have held that a member of the Sangguniang

Panlungsod,40 a department manager of the Philippine Health Insurance
Corporation (Philhealth),41 a student regent of the University of the
Philippines,42 and a Head of the Legal Department and Chief of the
Documentation with corresponding ranks of Vice-Presidents and Assistant Vice-
President of the Armed Forces of the Philippines Retirement and Separation
Benefits System (AFP-RSBS)43 fall within the jurisdiction of the Sandiganbayan.

Petitioner is not an executive official with Salary Grade 27 or higher. Neither does
he hold any position particularly enumerated in Section 4 (A) (1) (a) to (g). As he
correctly argues, his case is, in fact, on all fours with Cuyco.1avvphi1Therein, the
accused was the Regional Director of the Land Transportation Office, Region IX,
Zamboanga City, but at the time of the commission of the crime in 1992, his
position was classified as Director II with Salary Grade 26.44It was opined:
Petitioner contends that at the time of the commission of the offense in 1992, he
was occupying the position of Director II, Salary Grade 26, hence, jurisdiction
over the cases falls with the Regional Trial Court.

We sustain petitioner's contention.

The Sandiganbayan has no jurisdiction over violations of Section 3(a) and (e),
Republic Act No. 3019, as amended, unless committed by public officials and
employees occupying positions of regional director and higher with Salary
Grade "27" or higher, under the Compensation and Position Classification Act of
1989 (Republic Act No. 6758) in relation to their office.

In ruling in favor of its jurisdiction, even though petitioner admittedly occupied

the position of Director II with Salary Grade "26" under the Compensation and
Position Classification Act of 1989 (Republic Act No. 6758), the Sandiganbayan
incurred in serious error of jurisdiction, and acted with grave abuse of discretion
amounting to lack of jurisdiction in suspending petitioner from office, entitling
petitioner to the reliefs prayed for.45

In the same way, a certification issued by the OIC – Assistant Chief, Personnel
Division of the BIR shows that, although petitioner is a Regional Director of the
BIR, his position is classified as Director II with Salary Grade 26.46

There is no merit in the OSP’s allegation that the petition was prematurely filed
on the ground that respondent court has not yet acquired jurisdiction over the
person of petitioner. Records disclose that when a warrant of arrest was issued
by respondent court, petitioner voluntarily surrendered and posted a cash bond
on September 17, 2009.Also, he was arraigned on April 14, 2010,prior to the filing
of the petition on April 30, 2010.

WHEREFORE, the foregoing considered, the instant petition for certiorari is

GRANTED. The August 18, 2009 Resolution and February 8, 2010 Order of the
Sandiganbayan Second Division, which denied petitioner's Motion to Dismiss on
the ground of lack of jurisdiction, are REVERSED AND SET ASIDE.

SO ORDERED.

EN BANC

[G.R. No. 155001. January 21, 2004]

DEMOSTHENES P. AGAN, JR., JOSEPH B. CATAHAN, JOSE MARI B. REUNILLA,

MANUEL ANTONIO B. BOE, MAMERTO S. CLARA, REUEL E. DIMALANTA,
MORY V. DOMALAON, CONRADO G. DIMAANO, LOLITA R. HIZON,
REMEDIOS P. ADOLFO, BIENVENIDO C. HILARIO, MIASCOR WORKERS
UNION-NATIONAL LABOR UNION (MWU-NLU), and PHILIPPINE AIRLINES
EMPLOYEES ASSOCIATION (PALEA), petitioners, vs. PHILIPPINE
INTERNATIONAL AIR TERMINALS CO., INC., MANILA INTERNATIONAL
AIRPORT AUTHORITY, DEPARTMENT OF TRANSPORTATION AND
COMMUNICATIONS and SECRETARY LEANDRO M. MENDOZA, in his
capacity as Head of the Department of Transportation and
Communications, respondents,
MIASCOR GROUNDHANDLING CORPORATION, DNATA-WINGS AVIATION SYSTEMS
CORPORATION, MACROASIA-EUREST SERVICES, INC., MACROASIA-MENZIES
AIRPORT SERVICES CORPORATION, MIASCOR CATERING SERVICES
 CORPORATION, MIASCOR AIRCRAFT MAINTENANCE CORPORATION, and
MIASCOR LOGISTICS CORPORATION, Petitioners-in-Intervention,
FLORESTE ALCONIS, GINA ALNAS, REY AMPOLOQUIO, ROSEMARIE ANG, EUGENE
ARADA, NENETTE BARREIRO, NOEL BARTOLOME, ALDRIN BASTADOR, ROLETTE
DIVINE BERNARDO, MINETTE BRAVO, KAREN BRECILLA, NIDA CAILAO, ERWIN
CALAR, MARIFEL CONSTANTINO, JANETTE CORDERO, ARNOLD FELICITAS,
MARISSA GAYAGOY, ALEX GENERILLO, ELIZABETH GRAY, ZOILO HERICO,
JACQUELINE IGNACIO, THELMA INFANTE, JOEL JUMAO-AS, MARIETTA
LINCHOCO, ROLLY LORICO, FRANCIS AUGUSTO MACATOL, MICHAEL
MALIGAT, DENNIS MANALO, RAUL MANGALIMAN, JOEL MANLANGIT,
CHARLIE MENDOZA, HAZNAH MENDOZA, NICHOLS MORALES, ALLEN OLAO,
CESAR ORTAL, MICHAEL ORTEGA, WAYNE PLAZA, JOSELITO REYES,
ROLANDO REYES, AILEEN SAPINA, RAMIL TAMAYO, PHILLIPS TAN, ANDREW
UY, WILLIAM VELASCO, EMILIO VELEZ, NOEMI YUPANO, MARY JANE ONG,
RICHARD RAMIREZ, CHERYLE MARIE ALFONSO, LYNDON BAUTISTA, MANUEL
CABOCAN AND NEDY LAZO, Respondents-in-Intervention,
NAGKAISANG MARALITA NG TAONG ASSOCIATION, INC., Respondents-in-
Intervention,

[G.R. No. 155547. January 21, 2003]

SALACNIB F. BATERINA, CLAVEL A. MARTINEZ and CONSTANTINO G.

JARAULA, petitioners, vs. PHILIPPINE INTERNATIONAL AIR TERMINALS CO.,
INC., MANILA INTERNATIONAL AIRPORT AUTHORITY, DEPARTMENT OF
TRANSPORTATION AND COMMUNICATIONS, DEPARTMENT OF PUBLIC
WORKS AND HIGHWAYS, SECRETARY LEANDRO M. MENDOZA, in his
capacity as Head of the Department of Transportation and
Communications, and SECRETARY SIMEON A. DATUMANONG, in his
capacity as Head of the Department of Public Works and Highways,
respondents, JACINTO V. PARAS, RAFAEL P. NANTES, EDUARDO C. ZIALCITA,
WILLY BUYSON VILLARAMA, PROSPERO C. NOGRALES, PROSPERO A.
PICHAY, JR., HARLIN CAST ABAYON, and BENASING O.
MACARANBON, Respondents-Intervenors,
FLORESTE ALCONIS, GINA ALNAS, REY AMPOLOQUIO, ROSEMARIE ANG, EUGENE
ARADA, NENETTE BARREIRO, NOEL BARTOLOME, ALDRIN BASTADOR, ROLETTE
DIVINE BERNARDO, MINETTE BRAVO, KAREN BRECILLA, NIDA CAILAO, ERWIN
CALAR, MARIFEL CONSTANTINO, JANETTE CORDERO, ARNOLD FELICITAS,
MARISSA GAYAGOY, ALEX GENERILLO, ELIZABETH GRAY, ZOILO HERICO,
JACQUELINE IGNACIO, THELMA INFANTE, JOEL JUMAO-AS, MARIETTA
 LINCHOCO, ROLLY LORICO, FRANCIS AUGUSTO MACATOL, MICHAEL
MALIGAT, DENNIS MANALO, RAUL MANGALIMAN, JOEL MANLANGIT,
CHARLIE MENDOZA, HAZNAH MENDOZA, NICHOLS MORALES, ALLEN OLAO,
CESAR ORTAL, MICHAEL ORTEGA, WAYNE PLAZA, JOSELITO REYES,
ROLANDO REYES, AILEEN SAPINA, RAMIL TAMAYO, PHILLIPS TAN, ANDREW
UY, WILLIAM VELASCO, EMILIO VELEZ, NOEMI YUPANO, MARY JANE ONG,
RICHARD RAMIREZ, CHERYLE MARIE ALFONSO, LYNDON BAUTISTA, MANUEL
CABOCAN AND NEDY LAZO, Respondents-in-Intervention,
NAGKAISANG MARALITA NG TAONG ASSOCIATION, INC., Respondents-in-
Intervention,

[G.R. No. 155661. January 21, 2003]

CEFERINO C. LOPEZ, RAMON M. SALES, ALFREDO B. VALENCIA, MA. TERESA V.

GAERLAN, LEONARDO DE LA ROSA, DINA C. DE LEON, VIRGIE CATAMIN,
RONALD SCHLOBOM, ANGELITO SANTOS, MA. LUISA M. PALCON and
SAMAHANG MANGGAGAWA SA PALIPARAN NG PILIPINAS
(SMPP), petitioners, vs. PHILIPPINE INTERNATIONAL AIR TERMINALS CO.,
INC., MANILA INTERNATIONAL AIRPORT AUTHORITY, DEPARTMENT
OF TRANSPORTATION AND COMMUNICATIONS, SECRETARY LEANDRO M.
MENDOZA, in his capacity as Head of the Department of Transportation
and Communications, respondents,
FLORESTE ALCONIS, GINA ALNAS, REY AMPOLOQUIO, ROSEMARIE ANG, EUGENE
ARADA, NENETTE BARREIRO, NOEL BARTOLOME, ALDRIN BASTADOR, ROLETTE
DIVINE BERNARDO, MINETTE BRAVO, KAREN BRECILLA, NIDA CAILAO, ERWIN
CALAR, MARIFEL CONSTANTINO, JANETTE CORDERO, ARNOLD FELICITAS,
MARISSA GAYAGOY, ALEX GENERILLO, ELIZABETH GRAY, ZOILO HERICO,
JACQUELINE IGNACIO, THELMA INFANTE, JOEL JUMAO-AS, MARIETTA
LINCHOCO, ROLLY LORICO, FRANCIS AUGUSTO MACATOL, MICHAEL
MALIGAT, DENNIS MANALO, RAUL MANGALIMAN, JOEL MANLANGIT,
CHARLIE MENDOZA, HAZNAH MENDOZA, NICHOLS MORALES, ALLEN OLAO,
CESAR ORTAL, MICHAEL ORTEGA, WAYNE PLAZA, JOSELITO REYES,
ROLANDO REYES, AILEEN SAPINA, RAMIL TAMAYO, PHILLIPS TAN, ANDREW
UY, WILLIAM VELASCO, EMILIO VELEZ, NOEMI YUPANO, MARY JANE ONG,
RICHARD RAMIREZ, CHERYLE MARIE ALFONSO, LYNDON BAUTISTA, MANUEL
CABOCAN AND NEDY LAZO, Respondents-in-Intervention,
NAGKAISANG MARALITA NG TAONG ASSOCIATION, INC., Respondents-in-
Intervention.
 RESOLUTION
Puno, J.:

Before this Court are the separate Motions for Reconsideration filed by
respondent Philippine International Air Terminals Co., Inc. (PIATCO), respondents-
intervenors Jacinto V. Paras, Rafael P. Nantes, Eduardo C. Zialcita, Willie Buyson
Villarama, Prospero C. Nograles, Prospero A. Pichay, Jr., Harlin Cast Abayon and
Benasing O. Macaranbon, all members of the House of Representatives
(Respondent Congressmen),[1] respondents-intervenors who are employees of
PIATCO and other workers of the Ninoy Aquino International Airport International
Passenger Terminal III (NAIA IPT III) (PIATCO Employees)[2] and respondents-
intervenors Nagkaisang Maralita ng Taong Association, Inc., (NMTAI)[3] of the
Decision of this Court dated May 5, 2003 declaring the contracts for the NAIA IPT
III project null and void.
Briefly, the proceedings. On October 5, 1994, Asias Emerging Dragon Corp.
(AEDC) submitted an unsolicited proposal to the Philippine Government through
the Department of Transportation and Communication (DOTC) and Manila
International Airport Authority (MIAA) for the construction and development of
the NAIA IPT III under a build-operate-and-transfer arrangement pursuant to R.A.
No. 6957, as amended by R.A. No. 7718 (BOT Law).[4] In accordance with the
BOT Law and its Implementing Rules and Regulations (Implementing Rules), the
DOTC/MIAA invited the public for submission of competitive and comparative
proposals to the unsolicited proposal of AEDC. On September 20, 1996 a
consortium composed of the Peoples Air Cargo and Warehousing Co., Inc.
(Paircargo), Phil. Air and Grounds Services, Inc. (PAGS) and Security Bank Corp.
(Security Bank) (collectively, Paircargo Consortium), submitted their competitive
proposal to the Prequalification Bids and Awards Committee (PBAC).
After finding that the Paircargo Consortium submitted a bid superior to the
unsolicited proposal of AEDC and after failure by AEDC to match the said bid,
the DOTC issued the notice of award for the NAIA IPT III project to the Paircargo
Consortium, which later organized into herein respondent PIATCO. Hence, on
July 12, 1997, the Government, through then DOTC Secretary Arturo T. Enrile, and
PIATCO, through its President, Henry T. Go, signed the Concession Agreement for
the Build-Operate-and-Transfer Arrangement of the Ninoy Aquino International
Airport Passenger Terminal III (1997 Concession Agreement). On November 26,
1998, the 1997 Concession Agreement was superseded by the Amended and
Restated Concession Agreement (ARCA) containing certain revisions and
modifications from the original contract. A series of supplemental agreements
was also entered into by the Government and PIATCO. The First Supplement was
signed on August 27, 1999, the Second Supplement on September 4, 2000, and
the Third Supplement on June 22, 2001 (collectively, Supplements) (the 1997
Concession Agreement, ARCA and the Supplements collectively referred to as
the PIATCO Contracts).
On September 17, 2002, various petitions were filed before this Court to annul
the 1997 Concession Agreement, the ARCA and the Supplements and to prohibit
the public respondents DOTC and MIAA from implementing them.
In a decision dated May 5, 2003, this Court granted the said petitions and
declared the 1997 Concession Agreement, the ARCA and the Supplements null
and void.
Respondent PIATCO, respondent-Congressmen and respondents-intervenors
now seek the reversal of the May 5, 2003 decision and pray that the petitions be
dismissed. In the alternative, PIATCO prays that the Court should not strike down
the entire 1997 Concession Agreement, the ARCA and its supplements in light of
their separability clause. Respondent-Congressmen and NMTAI also pray that in
the alternative, the cases at bar should be referred to arbitration pursuant to the
provisions of the ARCA. PIATCO-Employees pray that the petitions be dismissed
and remanded to the trial courts for trial on the merits or in the alternative that
the 1997 Concession Agreement, the ARCA and the Supplements be declared
valid and binding.
I

Procedural Matters

a. Lack of Jurisdiction

Private respondents and respondents-intervenors reiterate a number of

procedural issues which they insist deprived this Court of jurisdiction to hear and
decide the instant cases on its merits.They continue to claim that the cases at
bar raise factual questions which this Court is ill-equipped to resolve, hence, they
must be remanded to the trial court for reception of evidence. Further, they
allege that although designated as petitions for certiorari and prohibition, the
cases at bar are actually actions for nullity of contracts over which the trial
courts have exclusive jurisdiction. Even assuming that the cases at bar are
special civil actions for certiorari and prohibition, they contend that the principle
of hierarchy of courts precludes this Court from taking primary jurisdiction over
them.
We are not persuaded.
There is a question of fact when doubt or difference arises as to the truth or
falsity of the facts alleged.[5] Even a cursory reading of the cases at bar will show
that the Court decided them by interpreting and applying the Constitution, the
BOT Law, its Implementing Rules and other relevant legal principles on the basis
of clearly undisputed facts. All the operative facts were settled, hence, there is
no need for a trial type determination of their truth or falsity by a trial court.
We reject the unyielding insistence of PIATCO Employees that the following
factual issues are critical and beyond the capability of this Court to resolve, viz:
(a) whether the National Economic Development Authority- Investment
Coordinating Committee (NEDA-ICC) approved the Supplements; (b) whether
the First Supplement created ten (10) new financial obligations on the part of
the government; and (c) whether the 1997 Concession Agreement departed
from the draft Concession Agreement contained in the Bid Documents.[6]
The factual issue of whether the NEDA-ICC approved the Supplements is
hardly relevant. It is clear in our Decision that the PIATCO contracts were
invalidated on other and more substantial grounds. It did not rely on the
presence or absence of NEDA-ICC approval of the Supplements. On the other
hand, the last two issues do not involve disputed facts. Rather, they involve
contractual provisions which are clear and categorical and need only to be
interpreted. The interpretation of contracts and the determination of whether
their provisions violate our laws or contravene any public policy is a legal issue
which this Court may properly pass upon.
Respondents corollary contention that this Court violated the hierarchy of
courts when it entertained the cases at bar must also fail. The rule on hierarchy
of courts in cases falling within the concurrent jurisdiction of the trial courts and
appellate courts generally applies to cases involving warring factual
allegations. For this reason, litigants are required to repair to the trial courts at
the first instance to determine the truth or falsity of these contending allegations
on the basis of the evidence of the parties. Cases which depend on disputed
facts for decision cannot be brought immediately before appellate courts as
they are not triers of facts.
It goes without saying that when cases brought before the appellate courts
do not involve factual but legal questions, a strict application of the rule of
hierarchy of courts is not necessary. As the cases at bar merely concern the
construction of the Constitution, the interpretation of the BOT Law and its
Implementing Rules and Regulations on undisputed contractual provisions and
government actions, and as the cases concern public interest, this Court
resolved to take primary jurisdiction over them. This choice of action follows the
consistent stance of this Court to settle any controversy with a high public
interest component in a single proceeding and to leave no root or branch that
could bear the seeds of future litigation. The suggested remand of the cases at
bar to the trial court will stray away from this policy.[7]
b. Legal Standing

Respondent PIATCO stands pat with its argument that petitioners lack legal
personality to file the cases at bar as they are not real parties in interest who are
bound principally or subsidiarily to the PIATCO Contracts. Further, respondent
PIATCO contends that petitioners failed to show any legally demandable or
enforceable right to justify their standing to file the cases at bar.
These arguments are not difficult to deflect. The determination of whether a
person may institute an action or become a party to a suit brings to fore the
concepts of real party in interest, capacity to sue and standing to sue. To the
legally discerning, these three concepts are different although commonly
directed towards ensuring that only certain parties can maintain an action.[8] As
defined in the Rules of Court, a real party in interest is the party who stands to be
benefited or injured by the judgment in the suit or the party entitled to the avails
of the suit.[9] Capacity to sue deals with a situation where a person who may
have a cause of action is disqualified from bringing a suit under applicable law
or is incompetent to bring a suit or is under some legal disability that would
prevent him from maintaining an action unless represented by a guardian ad
litem. Legal standing is relevant in the realm of public law. In certain instances,
courts have allowed private parties to institute actions challenging the validity of
governmental action for violation of private rights or constitutional
principles.[10] In these cases, courts apply the doctrine of legal standing by
determining whether the party has a direct and personal interest in the
controversy and whether such party has sustained or is in imminent danger of
sustaining an injury as a result of the act complained of, a standard which is
distinct from the concept of real party in interest.[11] Measured by this yardstick,
the application of the doctrine on legal standing necessarily involves a
preliminary consideration of the merits of the case and is not purely a
procedural issue.[12]
Considering the nature of the controversy and the issues raised in the cases
at bar, this Court affirms its ruling that the petitioners have the requisite legal
standing. The petitioners in G.R. Nos. 155001 and 155661 are employees of
service providers operating at the existing international airports and employees
of MIAA while petitioners-intervenors are service providers with existing contracts
with MIAA and they will all sustain direct injury upon the implementation of the
PIATCO Contracts. The 1997 Concession Agreement and the ARCA both
provide that upon the commencement of operations at the NAIA IPT III, NAIA
Passenger Terminals I and II will cease to be used as international passenger
terminals.[13] Further, the ARCA provides:

(d) For the purpose of an orderly transition, MIAA shall not renew any expired
concession agreement relative to any service or operation currently being
undertaken at the Ninoy Aquino International Airport Passenger Terminal I, or
extend any concession agreement which may expire subsequent hereto,
except to the extent that the continuation of the existing services and
operations shall lapse on or before the In-Service Date.[14]

Beyond iota of doubt, the implementation of the PIATCO Contracts, which

the petitioners and petitioners-intervenors denounce as unconstitutional and
illegal, would deprive them of their sources of livelihood. Under settled
jurisprudence, one's employment, profession, trade, or calling is a property right
and is protected from wrongful interference.[15] It is also self evident that the
petitioning service providers stand in imminent danger of losing legitimate
business investments in the event the PIATCO Contracts are upheld.
Over and above all these, constitutional and other legal issues with far-
reaching economic and social implications are embedded in the cases at bar,
hence, this Court liberally granted legal standing to the petitioning members of
the House of Representatives. First, at stake is the build-operate-andtransfer
contract of the countrys premier international airport with a projected capacity
of 10 million passengers a year. Second, the huge amount of investment to
complete the project is estimated to be P13,000,000,000.00. Third, the primary
issues posed in the cases at bar demand a discussion and interpretation of the
Constitution, the BOT Law and its implementing rules which have not been
passed upon by this Court in previous cases. They can chart the future inflow of
investment under the BOT Law.
Before writing finis to the issue of legal standing, the Court notes the bid of
new parties to participate in the cases at bar as respondents-intervenors,
namely, (1) the PIATCO Employees and (2) NMTAI (collectively, the New
Respondents-Intervenors). After the Courts Decision, the New Respondents-
Intervenors filed separate Motions for Reconsideration-In-Intervention alleging
prejudice and direct injury. PIATCO employees claim that they have a direct
and personal interest [in the controversy]... since they stand to lose their jobs
should the governments contract with PIATCO be declared null and
void.[16] NMTAI, on the other hand, represents itself as a corporation composed
of responsible tax-paying Filipino citizens with the objective of protecting and
sustaining the rights of its members to civil liberties, decent livelihood,
opportunities for social advancement, and to a good, conscientious and honest
government.[17]
The Rules of Court govern the time of filing a Motion to Intervene. Section 2,
Rule 19 provides that a Motion to Intervene should be filed before rendition of
judgment.... The New Respondents-Intervenors filed their separate motions after
a decision has been promulgated in the present cases. They have not offered
any worthy explanation to justify their late intervention. Consequently, their
Motions for Reconsideration-In-Intervention are denied for the rules cannot be
relaxed to await litigants who sleep on their rights. In any event, a sideglance at
these late motions will show that they hoist no novel arguments.

c. Failure to Implead an Indispensable Party

PIATCO next contends that petitioners should have impleaded the Republic
of the Philippines as an indispensable party. It alleges that petitioners sued the
DOTC, MIAA and the DPWH in their own capacities or as implementors of the
PIATCO Contracts and not as a contract party or as representatives of the
Government of the Republic of the Philippines. It then leapfrogs to the
conclusion that the absence of an indispensable party renders ineffectual all
the proceedings subsequent to the filing of the complaint including the
judgment.[18]
PIATCOs allegations are inaccurate. The petitions clearly bear out that
public respondents DOTC and MIAA were impleaded as parties to the PIATCO
Contracts and not merely as their implementors. The separate petitions filed by
the MIAA employees[19] and members of the House of
Representatives [20] alleged that public respondents are impleaded herein
because they either executed the PIATCO Contracts or are undertaking acts
which are related to the PIATCO Contracts. They are interested and
indispensable parties to this Petition.[21] Thus, public respondents DOTC and MIAA
were impleaded as parties to the case for having executed the contracts.
More importantly, it is also too late in the day for PIATCO to raise this issue. If
PIATCO seriously views the non-inclusion of the Republic of the Philippines as an
indispensable party as fatal to the petitions at bar, it should have raised the issue
at the onset of the proceedings as a ground to dismiss. PIATCO cannot litigate
issues on a piecemeal basis, otherwise, litigations shall be like a shore that knows
no end. In any event, the Solicitor General, the legal counsel of the Republic,
appeared in the cases at bar in representation of the interest of the
government.
II

Pre-qualification of PIATCO

The Implementing Rules provide for the unyielding standards the PBAC
should apply to determine the financial capability of a bidder for pre-
qualification purposes: (i) proof of the ability of the project proponent and/or
the consortium to provide a minimum amount of equity to the project and (ii) a
letter testimonial from reputable banks attesting that the project proponent
and/or members of the consortium are banking with them, that they are in good
financial standing, and that they have adequate resources.[22] The evident intent
of these standards is to protect the integrity and insure the viability of the project
by seeing to it that the proponent has the financial capability to carry it out. As
a further measure to achieve this intent, it maintains a certain debt-to-equity
ratio for the project.
At the pre-qualification stage, it is most important for a bidder to show that it
has the financial capacity to undertake the project by proving that it can fulfill
the requirement on minimum amount of equity. For this purpose, the Bid
Documents require in no uncertain terms:

The minimum amount of equity to which the proponents financial capability will
be based shall be thirty percent (30%) of the project cost instead of the twenty
percent (20%) specified in Section 3.6.4 of the Bid Documents. This is to correlate
with the required debt-to-equity ratio of 70:30 in Section 2.01a of the draft
concession agreement. The debt portion of the project financing should not
exceed 70% of the actual project cost.[23]

In relation thereto, section 2.01 (a) of the ARCA provides:

Section 2.01 Project Scope.
The scope of the project shall include:

(a) Financing the project at an actual Project cost of not less than Three
Hundred Fifty Million United States Dollars (US$350,000,000.00) while
maintaining a debt-to-equity ratio of 70:30, provided that if the actual
Project costs should exceed the aforesaid amount, Concessionaire shall
ensure that the debt-to-equity ratio is maintained;[24]

Under the debt-to-equity restriction, a bidder may only seek financing of the
NAIA IPT III Project up to 70% of the project cost. Thirty percent (30%) of the cost
must come in the form of equity or investment by the bidder itself. It cannot be
overly emphasized that the rules require a minimum amount of equity to ensure
that a bidder is not merely an operator or implementor of the project but an
investor with a substantial interest in its success. The minimum equity
requirement also guarantees the Philippine government and the general public,
who are the ultimate beneficiaries of the project, that a bidder will not be
indifferent to the completion of the project. The discontinuance of the project
will irreparably damage public interest more than private interest.
In the cases at bar, after applying the investment ceilings provided under
the General Banking Act and considering the maximum amounts that each
member of the consortium may validly invest in the project, it is daylight clear
that the Paircargo Consortium, at the time of pre-qualification, had a net worth
equivalent to only 6.08% of the total estimated project cost.[25] By any reckoning,
a showing by a bidder that at the time of pre-qualification its maximum funds
available for investment amount to only 6.08% of the project cost is insufficient to
satisfy the requirement prescribed by the Implementing Rules that the project
proponent must have the ability to provide at least 30% of the total estimated
project cost. In peso and centavo terms, at the time of pre-qualification, the
Paircargo Consortium had maximum funds available for investment to the NAIA
IPT III Project only in the amount of P558,384,871.55, when it had to show that it
had the ability to provide at least P2,755,095,000.00. The huge disparity cannot
be dismissed as of de minimis importance considering the high public interest at
stake in the project.
PIATCO nimbly tries to sidestep its failure by alleging that it submitted not
only audited financial statements but also testimonial letters from reputable
banks attesting to the good financial standing of the Paircargo Consortium. It
contends that in adjudging whether the Paircargo Consortium is a pre-qualified
bidder, the PBAC should have considered not only its financial statements but
other factors showing its financial capability.
Anent this argument, the guidelines provided in the Bid Documents are
instructive:

3.3.4 FINANCING AND FINANCIAL PREQUALIFICATIONS REQUIREMENTS

Minimum Amount of Equity

Each member of the proponent entity is to provide evidence of networth in cash

and assets representing the proportionate share in the proponent entity. Audited
financial statements for the past five (5) years as a company for each member
are to be provided.

Project Loan Financing

Testimonial letters from reputable banks attesting that each of the members of
the ownership entity are banking with them, in good financial standing and
having adequate resources are to be provided.[26]

It is beyond refutation that Paircargo Consortium failed to prove its ability to

provide the amount of at least P2,755,095,000.00, or 30% of the estimated project
cost. Its submission of testimonial letters attesting to its good financial standing
will not cure this failure. At best, the said letters merely establish its credit
worthiness or its ability to obtain loans to finance the project. They do not,
however, prove compliance with the aforesaid requirement of minimum
amount of equity in relation to the prescribed debt-to-equity ratio. This equity
cannot be satisfied through possible loans.
 In sum, we again hold that given the glaring gap between the net worth of
Paircargo and PAGS combined with the amount of maximum funds that
Security Bank may invest by equity in a non-allied undertaking, Paircargo
Consortium, at the time of pre-qualification, failed to show that it had the ability
to provide 30% of the project cost and necessarily, its financial capability for the
project cannot pass muster.
III

1997 Concession Agreement

Again, we brightline the principle that in public bidding, bids are submitted
in accord with the prescribed terms, conditions and parameters laid down by
government and pursuant to the requirements of the project bidded upon. In
light of these parameters, bidders formulate competing proposals which are
evaluated to determine the bid most favorable to the government. Once the
contract based on the bid most favorable to the government is awarded, all
that is left to be done by the parties is to execute the necessary agreements
and implement them. There can be no substantial or material change to the
parameters of the project, including the essential terms and conditions of the
contract bidded upon, after the contract award. If there were changes and the
contracts end up unfavorable to government, the public bidding becomes a
mockery and the modified contracts must be struck down.
Respondents insist that there were no substantial or material amendments in
the 1997 Concession Agreement as to the technical aspects of the project, i.e.,
engineering design, technical soundness, operational and maintenance
methods and procedures of the project or the technical proposal of
PIATCO. Further, they maintain that there was no modification of the financial
features of the project, i.e., minimum project cost, debt-to-equity ratio, the
operations and maintenance budget, the schedule and amount of annual
guaranteed payments, or the financial proposal of PIATCO. A discussion of
some of these changes to determine whether they altered the terms and
conditions upon which the bids were made is again in order.

a. Modification on Fees and

Charges to be collected by PIATCO

PIATCO clings to the contention that the removal of the groundhandling

fees, airline office rentals and porterage fees from the category of fees subject
to MIAA regulation in the 1997 Concession Agreement does not constitute a
substantial amendment as these fees are not really public utility fees. In other
words, PIATCO justifies the re-classification under the 1997 Concession
Agreement on the ground that these fees are non-public utility revenues.
We disagree. The removal of groundhandling fees, airline office rentals and
porterage fees from the category of Public Utility Revenues under the draft
Concession Agreement and its re-classification to Non-Public Utility Revenues
under the 1997 Concession Agreement is significant and has far reaching
consequence. The 1997 Concession Agreement provides that with respect to
Non-Public Utility Revenues, which include groundhandling fees, airline office
rentals and porterage fees,[27] [PIATCO] may make any adjustments it deems
appropriate without need for the consent of GRP or any government
agency.[28] In contrast, the draft Concession Agreement specifies these fees as
part of Public Utility Revenues and can be adjusted only once every two
years and in accordance with the Parametric Formula and the adjustments shall
be made effective only after the written express approval of the MIAA.[29] The
Bid Documents themselves clearly provide:

4.2.3 Mechanism for Adjustment of Fees and Charges

4.2.3.1 Periodic Adjustment in Fees and Charges

Adjustments in the fees and charges enumerated

hereunder, whether or not falling within the purview of public utility
revenues, shall be allowed only once every two years in accordance
with the parametric formula attached hereto as Annex 4.2f. Provided
that the adjustments shall be made effective only after the written
express approval of MIAA. Provided, further, that MIAAs approval,
shall be contingent only on conformity of the adjustments to the said
parametric formula.

The fees and charges to be regulated in the above manner shall

consist of the following:

....

c) groundhandling fees;

d) rentals on airline offices;

....

(f) porterage fees;

. . . .[30]
 The plain purpose in re-classifying groundhandling fees, airline office rentals
and porterage fees as non-public utility fees is to remove them from regulation
by the MIAA. In excluding these fees from government regulation, the danger to
public interest cannot be downplayed.
We are not impressed by the effort of PIATCO to depress this prejudice to
public interest by its contention that in the 1997 Concession Agreement
governing Non-Public Utility Revenues, it is provided that [PIATCO] shall at all
times be judicious in fixing fees and charges constituting Non-Public Utility
Revenues in order to ensure that End Users are not unreasonably deprived of
services.[31] PIATCO then peddles the proposition that the said provision confers
upon MIAA full regulatory powers to ensure that PIATCO is charging non-public
utility revenues at judicious rates.[32] To the trained eye, the argument will not fly
for it is obviously non sequitur. Fairly read, it is PIATCO that wields the power to
determine the judiciousness of the said fees and charges. In the draft
Concession Agreement the power was expressly lodged with the MIAA and any
adjustment can only be done once every two years. The changes are not
insignificant specks as interpreted by PIATCO.
PIATCO further argues that there is no substantial change in the 1997
Concession Agreement with respect to fees and charges PIATCO is allowed to
impose which are not covered by Administrative Order No. 1, Series of 1993[33] as
the relevant provision of the 1997 Concession Agreement is practically identical
with the draft Concession Agreement.[34]
We are not persuaded. Under the draft Concession Agreement, PIATCO
may impose fees and charges other than those fees and charges previously
imposed or collected at the Ninoy Aquino International Airport Passenger
Terminal I, subject to the written approval of MIAA.[35] Further, the draft
Concession Agreement provides that MIAA reserves the right to regulate these
new fees and charges if in its judgment the users of the airport shall be deprived
of a free option for the services they cover.[36] In contrast, under the 1997
Concession Agreement, the MIAA merely retained the right to approve any
imposition of new fees and charges which were not previously collected at the
Ninoy Aquino International Airport Passenger Terminal I. The agreement did not
contain an equivalent provision allowing MIAA to reserve the right to regulate
the adjustments of these new fees and charges.[37] PIATCO justifies the
amendment by arguing that MIAA can establish terms before approval of new
fees and charges, inclusive of the mode for their adjustment.
PIATCOs stance is again a strained one. There would have been no need for
an amendment if there were no change in the power to regulate on the part of
MIAA. The deletion of MIAAs reservation of its right to regulate the price
adjustments of new fees and charges can have no other purpose but to dilute
the extent of MIAAs regulation in the collection of these fees. Again, the
amendment diminished the authority of MIAA to protect the public interest in
case of abuse by PIATCO.

b. Assumption by the
Government of the liabilities
of PIATCO in the event of the latters
default

PIATCO posits the thesis that the new provisions in the 1997 Concession
Agreement in case of default by PIATCO on its loans were merely meant to
prescribe and limit the rights of PIATCOs creditors with regard to the NAIA
Terminal III. PIATCO alleges that Section 4.04 of the 1997 Concession Agreement
simply provides that PIATCOs creditors have no right to foreclose the NAIA
Terminal III.
We cannot concur. The pertinent provisions of the 1997 Concession
Agreement state:

Section 4.04 Assignment.

....

(b) In the event Concessionaire should default in the payment of an Attendant

Liability, and the default has resulted in the acceleration of the payment due
date of the Attendant Liability prior to its stated date of maturity, the Unpaid
Creditors and Concessionaire shall immediately inform GRP in writing of such
default. GRP shall, within one hundred eighty (180) Days from receipt of the joint
written notice of the Unpaid Creditors and Concessionaire, either (i) take over
the Development Facility and assume the Attendant Liabilities, or (ii) allow the
Unpaid Creditors, if qualified, to be substituted as concessionaire and operator
of the Development Facility in accordance with the terms and conditions
hereof, or designate a qualified operator acceptable to GRP to operate the
Development Facility, likewise under the terms and conditions of this Agreement;
Provided that if at the end of the 180-day period GRP shall not have served the
Unpaid Creditors and Concessionaire written notice of its choice, GRP shall be
deemed to have elected to take over the Development Facility with the
concomitant assumption of Attendant Liabilities.

(c) If GRP should, by written notice, allow the Unpaid Creditors to be substituted
as concessionaire, the latter shall form and organize a concession company
qualified to take over the operation of the Development Facility. If the
concession company should elect to designate an operator for the
Development Facility, the concession company shall in good faith identify and
designate a qualified operator acceptable to GRP within one hundred eighty
(180) days from receipt of GRPs written notice. If the concession company,
acting in good faith and with due diligence, is unable to designate a qualified
operator within the aforesaid period, then GRP shall at the end of the 180-day
period take over the Development Facility and assume Attendant Liabilities.

A plain reading of the above provision shows that it spells out in limpid
language the obligation of government in case of default by PIATCO on its
loans. There can be no blinking from the fact that in case of PIATCOs default,
the government will assume PIATCOs Attendant Liabilities as defined in the 1997
Concession Agreement.[38] This obligation is not found in the draft Concession
Agreement and the change runs roughshod to the spirit and policy of the BOT
Law which was crafted precisely to prevent government from incurring financial
risk.
In any event, PIATCO pleads that the entire agreement should not be struck
down as the 1997 Concession Agreement contains a separability clause.
The plea is bereft of merit. The contracts at bar which made a mockery of
the bidding process cannot be upheld and must be annulled in their entirety for
violating law and public policy. As demonstrated, the contracts were
substantially amended after their award to the successful bidder on terms more
beneficial to PIATCO and prejudicial to public interest. If this flawed process
would be allowed, public bidding will cease to be competitive and worse,
government would not be favored with the best bid. Bidders will no longer bid
on the basis of the prescribed terms and conditions in the bid documents but will
formulate their bid in anticipation of the execution of a future contract
containing new and better terms and conditions that were not previously
available at the time of the bidding. Such a public bidding will not inure to the
public good. The resulting contracts cannot be given half a life but must be
struck down as totally lawless.
IV.

Direct Government Guarantee

The respondents further contend that the PIATCO Contracts do not contain
direct government guarantee provisions. They assert that section 4.04 of the
ARCA, which superseded sections 4.04(b) and (c), Article IV of the 1997
Concession Agreement, is but a clarification and explanation[39] of the securities
allowed in the bid documents. They allege that these provisions merely provide
for compensation to PIATCO[40] in case of a government buy-out or takeover of
NAIA IPT III. The respondents, particularly respondent PIATCO, also maintain that
the guarantee contained in the contracts, if any, is an indirect guarantee
allowed under the BOT Law, as amended.[41]
We do not agree. Section 4.04(c), Article IV[42] of the ARCA should be read in
conjunction with section 1.06, Article I,[43] in the same manner that sections
4.04(b) and (c), Article IV of the 1997 Concession Agreement should be related
to Article 1.06 of the same contract. Section 1.06, Article I of the ARCA and its
counterpart provision in the 1997 Concession Agreement define in no uncertain
terms the meaning of attendant liabilities. They tell us of the amounts that the
Government has to pay in the event respondent PIATCO defaults in its loan
payments to its Senior Lenders and no qualified transferee or nominee is chosen
by the Senior Lenders or is willing to take over from respondent PIATCO.
A reasonable reading of all these relevant provisions would reveal that the
ARCA made the Government liable to pay all amounts ... from time to
time owed or which may become owing by Concessionaire [PIATCO] to Senior
Lenders or any other persons or entities who have provided, loaned, or
advanced funds or provided financial facilities to Concessionaire [PIATCO] for
the Project [NAIA Terminal 3].[44] These amounts include without limitation, all
principal, interest, associated fees, charges, reimbursements, and other related
expenses... whether payable at maturity, by acceleration or otherwise.[45] They
further include amounts owed by respondent PIATCO to its professional
consultants and advisers, suppliers, contractors and sub-contractors as well as
fees, charges and expenses of any agents or trustees of the Senior Lenders or
any other persons or entities who have provided loans or financial facilities to
respondent PIATCO in relation to NAIA IPT III.[46] The counterpart provision in the
1997 Concession Agreement specifying the attendant liabilities that the
Government would be obligated to pay should PIATCO default in its loan
obligations is equally onerous to the Government as those contained in the
ARCA. According to the 1997 Concession Agreement, in the event the
Government is forced to prematurely take over NAIA IPT III as a result of
respondent PIATCOs default in the payment of its loan obligations to its Senior
Lenders, it would be liable to pay the following amounts as attendant liabilities:

Section 1.06. Attendant Liabilities

Attendant Liabilities refer to all amounts recorded and from time to time
outstanding in the books of the Concessionaire as owing to Unpaid
Creditors who have provided, loaned or advanced funds actually used for the
Project, including all interests, penalties, associated fees, charges, surcharges,
indemnities, reimbursements and other related expenses, and further including
amounts owed by Concessionaire to its suppliers, contractors and sub-
contractors.[47]
 These provisions reject respondents contention that what the Government is
obligated to pay, in the event that respondent PIATCO defaults in the payment
of its loans, is merely termination payment or just compensation for its takeover
of NAIA IPT III. It is clear from said section 1.06 that what the Government would
pay is the sum total of all the debts, including all interest, fees and charges, that
respondent PIATCO incurred in pursuance of the NAIA IPT III Project. This reading
is consistent with section 4.04 of the ARCA itself which states that the
Government shall make a termination payment to Concessionaire [PIATCO]
equal to the Appraised Value (as hereinafter defined) of the Development
Facility [NAIA Terminal III] or the sum of the Attendant Liabilities, if greater. For
sure, respondent PIATCO will not receive any amount less than sufficient to cover
its debts, regardless of whether or not the value of NAIA IPT III, at the time of its
turn over to the Government, may actually be less than the amount of PIATCOs
debts. The scheme is a form of direct government guarantee for it is undeniable
that it leaves the government no option but to pay the attendant liabilities in the
event that the Senior Lenders are unable or unwilling to appoint a qualified
nominee or transferee as a result of PIATCOs default in the payment of its Senior
Loans. As we stressed in our Decision, this Court cannot depart from the legal
maxim that those that cannot be done directly cannot be done indirectly.
This is not to hold, however, that indirect government guarantee is not
allowed under the BOT Law, as amended. The intention to permit indirect
government guarantee is evident from the Senate deliberations on the
amendments to the BOT Law. The idea is to allow for reasonable government
undertakings, such as to authorize the project proponent to undertake related
ventures within the project area, in order to encourage private sector
participation in development projects.[48] An example cited by then Senator
Gloria Macapagal-Arroyo, one of the sponsors of R.A. No. 7718, is the
Mandaluyong public market which was built under the Build-and-Transfer (BT)
scheme wherein instead of the government paying for the transfer, the project
proponent was allowed to operate the upper floors of the structure as a
commercial mall in order to recoup their investments.[49] It was repeatedly
stressed in the deliberations that in allowing indirect government guarantee, the
law seeks to encourage both the government and the private sector to
formulate reasonable and innovative government undertakings in pursuance of
BOT projects. In no way, however, can the government be made liable for the
debts of the project proponent as this would be tantamount to a direct
government guarantee which is prohibited by the law. Such liability would
defeat the very purpose of the BOT Law which is to encourage the use of
private sector resources in the construction, maintenance and/or operation of
development projects with no, or at least minimal, capital outlay on the part of
the government.
The respondents again urge that should this Court affirm its ruling that the
PIATCO Contracts contain direct government guarantee provisions, the whole
contract should not be nullified. They rely on the separability clause in the
PIATCO Contracts.
We are not persuaded.
The BOT Law and its implementing rules provide that there are three (3)
essential requisites for an unsolicited proposal to be accepted: (1) the project
involves a new concept in technology and/or is not part of the list of priority
projects, (2) no direct government guarantee, subsidy or equity is required, and
(3) the government agency or local government unit has invited by publication
other interested parties to a public bidding and conducted the same.[50] The
failure to fulfill any of the requisites will result in the denial of the
proposal. Indeed, it is further provided that a direct government guarantee,
subsidy or equity provision will necessarily disqualify a proposal from being
treated and accepted as an unsolicited proposal.[51] In fine, the mere inclusion
of a direct government guarantee in an unsolicited proposal is fatal to the
proposal. There is more reason to invalidate a contract if a direct government
guarantee provision is inserted later in the contract via a backdoor
amendment. Such an amendment constitutes a crass circumvention of the BOT
Law and renders the entire contract void.
Respondent PIATCO likewise claims that in view of the fact that other BOT
contracts such as the JANCOM contract, the Manila Water contract and the
MRT contract had been considered valid, the PIATCO contracts should be held
valid as well.[52] There is no parity in the cited cases. For instance, a reading
of Metropolitan Manila Development Authority v. JANCOM Environmental
Corporation[53] will show that its issue is different from the issues in the cases at
bar. In the JANCOM case, the main issue is whether there is a perfected
contract between JANCOM and the Government. The resolution of the issue
hinged on the following: (1) whether the conditions precedent to the perfection
of the contract were complied with; (2) whether there is a valid notice of award;
and (3) whether the signature of the Secretary of the Department of
Environment and Natural Resources is sufficient to bind the Government. These
issue and sub-issues are clearly distinguishable and different. For one, the issue of
direct government guarantee was not considered by this Court when it held the
JANCOM contract valid, yet, it is a key reason for invalidating the PIATCO
Contracts. It is a basic principle in law that cases with dissimilar facts cannot
have similar disposition.
This Court, however, is not unmindful of the reality that the structures
comprising the NAIA IPT III facility are almost complete and that funds have
been spent by PIATCO in their construction. For the government to take over the
said facility, it has to compensate respondent PIATCO as builder of the said
structures. The compensation must be just and in accordance with law and
equity for the government can not unjustly enrich itself at the expense of PIATCO
and its investors.
 II.

Temporary takeover of business affected with

public interest in times of national emergency

Section 17, Article XII of the 1987 Constitution grants the State in times of
national emergency the right to temporarily take over the operation of any
business affected with public interest. This right is an exercise of police power
which is one of the inherent powers of the State.
Police power has been defined as the "state authority to enact legislation
that may interfere with personal liberty or property in order to promote the
general welfare."[54] It consists of two essential elements. First, it is an imposition of
restraint upon liberty or property. Second, the power is exercised for the benefit
of the common good. Its definition in elastic terms underscores its all-
encompassing and comprehensive embrace.[55] It is and still is the most
essential, insistent, and illimitable[56] of the States powers. It is familiar knowledge
that unlike the power of eminent domain, police power is exercised without
provision for just compensation for its paramount consideration is public
welfare.[57]
It is also settled that public interest on the occasion of a national emergency
is the primary consideration when the government decides to temporarily take
over or direct the operation of a public utility or a business affected with public
interest. The nature and extent of the emergency is the measure of the duration
of the takeover as well as the terms thereof. It is the State that prescribes such
reasonable terms which will guide the implementation of the temporary
takeover as dictated by the exigencies of the time. As we ruled in our Decision,
this power of the State can not be negated by any party nor should its exercise
be a source of obligation for the State.
Section 5.10(c), Article V of the ARCA provides that respondent PIATCO shall
be entitled to reasonable compensation for the duration of the temporary
takeover by GRP, which compensation shall take into account the reasonable
cost for the use of the Terminal and/or Terminal Complex.[58] It clearly obligates
the government in the exercise of its police power to compensate respondent
PIATCO and this obligation is offensive to the Constitution. Police power can not
be diminished, let alone defeated by any contract for its paramount
consideration is public welfare and interest.[59]
Again, respondent PIATCOs reliance on the case of Heirs of Suguitan v. City
of Mandaluyong[60] to justify its claim for reasonable compensation for the
Governments temporary takeover of NAIA IPT III in times of national emergency
is erroneous. What was involved in Heirs of Suguitan is the exercise of the states
power of eminent domain and not of police power, hence, just compensation
was awarded. The cases at bar will not involve the exercise of the power of
eminent domain.
III.

Monopoly

Section 19, Article XII of the 1987 Constitution mandates that the State
prohibit or regulate monopolies when public interest so requires. Monopolies are
not per se prohibited. Given its susceptibility to abuse, however, the State has
the bounden duty to regulate monopolies to protect public interest. Such
regulation may be called for, especially in sensitive areas such as the operation
of the countrys premier international airport, considering the public interest at
stake.
By virtue of the PIATCO contracts, NAIA IPT III would be the only international
passenger airport operating in the Island of Luzon, with the exception of those
already operating in Subic Bay Freeport Special Economic Zone (SBFSEZ), Clark
Special Economic Zone (CSEZ) and in Laoag City. Undeniably, the contracts
would create a monopoly in the operation of an international commercial
passenger airport at the NAIA in favor of PIATCO.
The grant to respondent PIATCO of the exclusive right to operate NAIA IPT III
should not exempt it from regulation by the government. The government has
the right, indeed the duty, to protect the interest of the public. Part of this duty is
to assure that respondent PIATCOs exercise of its right does not violate the legal
rights of third parties. We reiterate our ruling that while the service providers
presently operating at NAIA Terminals I and II do not have the right to demand
for the renewal or extension of their contracts to continue their services in NAIA
IPT III, those who have subsisting contracts beyond the In-Service Date of NAIA
IPT III can not be arbitrarily or unreasonably treated.
Finally, the Respondent Congressmen assert that at least two (2) committee
reports by the House of Representatives found the PIATCO contracts valid and
contend that this Court, by taking cognizance of the cases at bar, reviewed an
action of a co-equal body.[61] They insist that the Court must respect the findings
of the said committees of the House of Representatives.[62] With due respect, we
cannot subscribe to their submission. There is a fundamental difference between
a case in court and an investigation of a congressional committee. The purpose
of a judicial proceeding is to settle the dispute in controversy by adjudicating
the legal rights and obligations of the parties to the case. On the other hand, a
congressional investigation is conducted in aid of legislation.[63] Its aim is to assist
and recommend to the legislature a possible action that the body may take
with regard to a particular issue, specifically as to whether or not to enact a new
law or amend an existing one. Consequently, this Court cannot treat the findings
in a congressional committee report as binding because the facts elicited in
congressional hearings are not subject to the rigors of the Rules of Court on
admissibility of evidence. The Court in assuming jurisdiction over the petitions at
bar simply performed its constitutional duty as the arbiter of legal disputes
properly brought before it, especially in this instance when public interest
requires nothing less.
WHEREFORE, the motions for reconsideration filed by the respondent PIATCO,
respondent Congressmen and the respondents-in-intervention are DENIED with
finality.
SO ORDERED.

EN BANC

[G.R. No. 154599. January 21, 2004]

THE LIGA NG MGA BARANGAY NATIONAL, petitioner, vs. THE CITY MAYOR OF
MANILA, HON. JOSE ATIENZA, JR., and THE CITY COUNCIL OF
MANILA, respondents.

DECISION
DAVIDE, JR., C.J.:

This petition for certiorari under Rule 65 of the Rules of Court seeks the
nullification of Manila City Ordinance No. 8039, Series of 2002,[1] and respondent
City Mayors Executive Order No. 011, Series of 2002,[2] dated 15 August 2002 , for
being patently contrary to law.
The antecedents are as follows:
Petitioner Liga ng mga Barangay National (Liga for brevity) is the national
organization of all the barangays in the Philippines, which pursuant to Section
492 of Republic Act No. 7160, otherwise known as The Local Government Code
of 1991, constitutes the duly elected presidents of highly-urbanized cities,
provincial chapters, the metropolitan Manila Chapter, and metropolitan
political subdivision chapters.
 Section 493 of that law provides that [t]he liga at the municipal, city,
provincial, metropolitan political subdivision, and national levels directly elect a
president, a vice-president, and five (5) members of the board of directors. All
other matters not provided for in the law affecting the internal organization of
the leagues of local government units shall be governed by their respective
constitution and by-laws, which must always conform to the provisions of the
Constitution and existing laws.[3]
On 16 March 2000, the Liga adopted and ratified its own Constitution and
By-laws to govern its internal organization.[4] Section 1, third paragraph, Article XI
of said Constitution and By-Laws states:

All other election matters not covered in this Article shall be governed by the
Liga Election Code or such other rules as may be promulgated by the National
Liga Executive Board in conformity with the provisions of existing laws.

By virtue of the above-cited provision, the Liga adopted and ratified its own
Election Code.[5] Section 1.2, Article I of the Liga Election Code states:

1.2 Liga ng mga Barangay Provincial, Metropolitan, HUC/ICC Chapters. There

shall be nationwide synchronized elections for the provincial, metropolitan, and
HUC/ICC chapters to be held on the third Monday of the month immediately
after the month when the synchronized elections in paragraph 1.1 above was
held. The incumbent Liga chapter president concerned duly assisted by the
proper government agency, office or department, e.g.
Provincial/City/NCR/Regional Director, shall convene all the duly elected
Component City/Municipal Chapter Presidents and all the current elected
Punong Barangays (for HUC/ICC) of the respective chapters in any public place
within its area of jurisdiction for the purpose of reorganizing and electing the
officers and directors of the provincial, metropolitan or HUC/ICC Liga
chapters. Said president duly assisted by the government officer
aforementioned, shall notify, in writing, all the above concerned at least fifteen
(15) days before the scheduled election meeting on the exact date, time,
place and requirements of the said meeting.

The Liga thereafter came out with its Calendar of Activities and Guidelines in
the Implementation of the Liga Election Code of 2002,[6] setting on 21 October
2002 the synchronized elections for highly urbanized city chapters, such as the
Liga Chapter of Manila, together with independent component city, provincial,
and metropolitan chapters.
On 28 June 2002, respondent City Council of Manila enacted Ordinance No.
8039, Series of 2002, providing, among other things, for the election of
representatives of the District Chapters in the City Chapter of Manila and setting
the elections for both chapters thirty days after the barangay elections. Section
3 (A) and (B) of the assailed ordinance read:

SEC. 3. Representation Chapters. Every Barangay shall be represented in the

said Liga Chapters by the Punong Barangayor, in his absence or incapacity, by
the kagawad duly elected for the purpose among its members.

A. District Chapter

All elected Barangay Chairman in each District shall elect from among
themselves the President, Vice-President and five (5) members of the Board.

B. City Chapter

The District Chapter representatives shall automatically become members of the

Board and they shall elect from among themselves a President, Vice-President,
Secretary, Treasurer, Auditor and create other positions as it may deem
necessary for the management of the chapter.

The assailed ordinance was later transmitted to respondent City Mayor Jose
L. Atienza, Jr., for his signature and approval.
On 16 July 2002, upon being informed that the ordinance had been
forwarded to the Office of the City Mayor, still unnumbered and yet to be
officially released, the Liga sent respondent Mayor of Manila a letter requesting
him that said ordinance be vetoed considering that it encroached upon, or
even assumed, the functions of the Liga through legislation, a function which
was clearly beyond the ambit of the powers of the City Council.[7]
Respondent Mayor, however, signed and approved the assailed city
ordinance and issued on 15 August 2002 Executive Order No. 011, Series of 2002,
to implement the ordinance.
Hence, on 27 August 2002, the Liga filed the instant petition raising the
following issues:
I

WHETHER OR NOT THE RESPONDENT CITY COUNCIL OF MANILA COMMITTED

GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF OR IN EXCESS OF
JURISDICTION, WHEN IT ENACTED CITY ORDINANCE NO. 8039 S. 2002 PURPOSELY
TO GOVERN THE ELECTIONS OF THE MANILA CHAPTER OF THE LIGA NG MGA
BARANGAYS AND WHICH PROVIDES A DIFFERENT MANNER OF ELECTING ITS
OFFICERS, DESPITE THE FACT THAT SAID CHAPTERS ELECTIONS, AND THE ELECTIONS
OF ALL OTHER CHAPTERS OF THE LIGA NG MGA BARANGAYS FOR THAT MATTER,
ARE BY LAW MANDATED TO BE GOVERNED BY THE LIGA CONSTITUTION AND BY-
LAWS AND THE LIGA ELECTION CODE.

II

WHETHER OR NOT THE RESPONDENT CITY MAYOR OF MANILA COMMITTED GRAVE

ABUSE OF DISCRETION AMOUNTING TO LACK OF OR IN EXCESS OF JURISDICTION
WHEN HE ISSUED EXECUTIVE ORDER NO. 011 TO IMPLEMENT THE QUESTIONED CITY
ORDINANCE NO. 8039 S. 2002.

In support of its petition, the Liga argues that City Ordinance No. 8039, Series
of 2002, and Executive Order No. 011, Series of 2002, contradict the Liga Election
Code and are therefore invalid. There exists neither rhyme nor reason, not to
mention the absence of legal basis, for the Manila City Council to encroach
upon, or even assume, the functions of the Liga by prescribing, through
legislation, the manner of conducting the Liga elections other than what has
been provided for by the Liga Constitution and By-laws and the Liga Election
Code. Accordingly, the subject ordinance is an ultra vires act of the
respondents and, as such, should be declared null and void.
As for its prayer for the issuance of a temporary restraining order, the
petitioner cites as reason therefor the fact that under Section 5 of the assailed
city ordinance, the Manila District Chapter elections would be held thirty days
after the regular barangay elections. Hence, it argued that the issuance of a
temporary restraining order and/or preliminary injunction would be imperative to
prevent the implementation of the ordinance and executive order.
On 12 September 2002, Barangay Chairman Arnel Pea, in his capacity as a
member of the Liga ng mga Barangay in the City Chapter of Manila, filed a
Complaint in Intervention with Urgent Motion for the Issuance of Temporary
Restraining Order and/or Preliminary Injunction.[8] He supports the position of the
Liga and prays for the declaration of the questioned ordinance and executive
order, as well as the elections of the Liga ng mga Barangay pursuant thereto, to
be null and void. The assailed ordinance prescribing for an indirect manner of
election amended, in effect, the provisions of the Local Government Code of
1991, which provides for the election of the Liga officers at large. It also violated
and curtailed the rights of the petitioner and intervenor, as well as the other 896
Barangay Chairmen in the City of Manila, to vote and be voted upon in a direct
election.
On 25 October 2002, the Office of the Solicitor General (OSG) filed a
Manifestation in lieu of Comment.[9] It supports the petition of the Liga, arguing
that the assailed city ordinance and executive order are clearly inconsistent
with the express public policy enunciated in R.A. No. 7160. Local political
subdivisions are able to legislate only by virtue of a valid delegation of legislative
power from the national legislature. They are mere agents vested with what is
called the power of subordinate legislation. Thus, the enactments in question,
which are local in origin, cannot prevail against the decree, which has the force
and effect of law.
On the issue of non-observance by the petitioners of the hierarchy-of-courts
rule, the OSG posits that technical rules of procedure should be relaxed in the
instant petition. While Batas Pambansa Blg. 129, as amended, grants original
jurisdiction over cases of this nature to the Regional Trial Court (RTC), the
exigency of the present petition, however, calls for the relaxation of this
rule. Section 496 (should be Section 491) of the Local Government Code of 1991
primarily intended that the Liga ng mga Barangay determine the representation
of the Liga in the sanggunians for the immediate ventilation, articulation, and
crystallization of issues affecting barangay government administration. Thus, the
immediate resolution of this petition is a must.
On the other hand, the respondents defend the validity of the assailed
ordinance and executive order and pray for the dismissal of the present petition
on the following grounds: (1) certiorari under Rule 65 of the Rules of Court is
unavailing; (2) the petition should not be entertained by this Court in view of the
pendency before the Regional Trial Court of Manila of two actions or petitions
questioning the subject ordinance and executive order; (3) the petitioner is
guilty of forum shopping; and (4) the act sought to be enjoined is fait accompli.
The respondents maintain that certiorari is an extraordinary remedy
available to one aggrieved by the decision of a tribunal, officer, or board
exercising judicial or quasi-judicial functions. The City Council and City Mayor of
Manila are not the board and officer contemplated in Rule 65 of the Rules of
Court because both do not exercise judicial functions. The enactment of the
subject ordinance and issuance of the questioned executive order are
legislative and executive functions, respectively, and thus, do not fall within the
ambit of judicial functions. They are both within the prerogatives, powers, and
authority of the City Council and City Mayor of Manila,
respectively. Furthermore, the petition failed to show with certainty that the
respondents acted without or in excess of jurisdiction or with grave abuse of
discretion.
The respondents also asseverate that the petitioner cannot claim that it has
no other recourse in addressing its grievance other than this petition
for certiorari. As a matter of fact, there are two cases pending before Branches
33 and 51 of the RTC of Manila (one is for mandamus; the other, for declaratory
relief) and three in the Court of Appeals (one is for prohibition; the two other
cases, for quo warranto), which are all akin to the present petition in the sense
that the relief being sought therein is the declaration of the invalidity of the
subject ordinance. Clearly, the petitioner may ask the RTC or the Court of
Appeals the relief being prayed for before this Court. Moreover, the petitioner
failed to prove discernible compelling reasons attending the present petition
that would warrant cognizance of the present petition by this Court.
Besides, according to the respondents, the petitioner has transgressed the
proscription against forum-shopping in filing the instant suit. Although the parties
in the other pending cases and in this petition are different individuals or entities,
they represent the same interest.
With regard to petitioner's prayer for temporary restraining order and/ or
preliminary injunction in its petition, the respondents maintain that the same had
become moot and academic in view of the elections of officers of the City Liga
ng mga Barangay on 15 September 2002 and their subsequent assumption to
their respective offices.[10] Since the acts to be enjoined are now fait accompli,
this petition for certiorari with an application for provisional remedies must
necessarily fail. Thus, where the records show that during the pendency of the
case certain events or circumstances had taken place that render the case
moot and academic, the petition for certiorari must be dismissed.
After due deliberation on the pleadings filed, we resolve to dismiss this
petition for certiorari.
First, the respondents neither acted in any judicial or quasi-judicial capacity
nor arrogated unto themselves any judicial or quasi-judicial prerogatives. A
petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure is a
special civil action that may be invoked only against a tribunal, board, or officer
exercising judicial or quasi-judicial functions.
Section 1, Rule 65 of the 1997 Rules of Civil Procedure provides:

SECTION 1. Petition for certiorari. When any tribunal, board or officer exercising
judicial or quasi-judicial functions has acted without or in excess of its or his
jurisdiction, or with grave abuse of discretion amounting to lack or excess of
jurisdiction, and there is no appeal, or any plain, speedy, and adequate remedy
in the ordinary course of law, a person aggrieved thereby may file a verified
petition in the proper court, alleging the facts with certainty and praying that
judgment be rendered annulling or modifying the proceedings of such tribunal,
board or officer, and granting such incidental reliefs as law and justice may
require.

Elsewise stated, for a writ of certiorari to issue, the following requisites must
concur: (1) it must be directed against a tribunal, board, or officer exercising
judicial or quasi-judicial functions; (2) the tribunal, board, or officer must have
acted without or in excess of jurisdiction or with grave abuse of discretion
amounting lack or excess of jurisdiction; and (3) there is no appeal or any plain,
speedy, and adequate remedy in the ordinary course of law.
 A respondent is said to be exercising judicial function where he has the
power to determine what the law is and what the legal rights of the parties are,
and then undertakes to determine these questions and adjudicate upon the
rights of the parties.[11]
Quasi-judicial function, on the other hand, is a term which applies to the
actions, discretion, etc., of public administrative officers or bodies required to
investigate facts or ascertain the existence of facts, hold hearings, and draw
conclusions from them as a basis for their official action and to exercise
discretion of a judicial nature.[12]
Before a tribunal, board, or officer may exercise judicial or quasi-judicial
acts, it is necessary that there be a law that gives rise to some specific rights of
persons or property under which adverse claims to such rights are made, and
the controversy ensuing therefrom is brought before a tribunal, board, or officer
clothed with power and authority to determine the law and adjudicate the
respective rights of the contending parties.[13]
The respondents do not fall within the ambit of tribunal, board, or officer
exercising judicial or quasi-judicial functions. As correctly pointed out by the
respondents, the enactment by the City Council of Manila of the assailed
ordinance and the issuance by respondent Mayor of the questioned executive
order were done in the exercise of legislative and executive functions,
respectively, and not of judicial or quasi-judicial functions. On this score
alone, certiorari will not lie.
Second, although the instant petition is styled as a petition for certiorari, in
essence, it seeks the declaration by this Court of the unconstitutionality or
illegality of the questioned ordinance and executive order. It, thus, partakes of
the nature of a petition for declaratory relief over which this Court has only
appellate, not original, jurisdiction.[14] Section 5, Article VIII of the Constitution
provides:

Sec. 5. The Supreme Court shall have the following powers:

(1) Exercise original jurisdiction over cases affecting ambassadors, other

public ministers and consuls, and over petitions for certiorari,
prohibition, mandamus, quo warranto, and habeas corpus.

(2) Review, revise, reverse, modify, or affirm on appeal or certiorari as the

law or the Rules of Court may provide, final judgments and orders of
lower courts in:

(a) All cases in which the constitutionality or validity of any treaty,

international or executive agreement, law, presidential decree,
 proclamation, order, instruction, ordinance, or regulation is in
question. (Italics supplied).

As such, this petition must necessary fail, as this Court does not have original
jurisdiction over a petition for declaratory relief even if only questions of law are
involved.[15]
Third, even granting arguendo that the present petition is ripe for the
extraordinary writ of certiorari, there is here a clear disregard of the hierarchy of
courts. No special and important reason or exceptional and compelling
circumstance has been adduced by the petitioner or the intervenor why direct
recourse to this Court should be allowed.
We have held that this Courts original jurisdiction to issue a writ
of certiorari (as well as of prohibition, mandamus, quo warranto, habeas
corpus and injunction) is not exclusive, but is concurrent with the Regional Trial
Courts and the Court of Appeals in certain cases. As aptly stated in People v.
Cuaresma:[16]

This concurrence of jurisdiction is not, however, to be taken as according to

parties seeking any of the writs an absolute, unrestrained freedom of choice of
the court to which application therefor0 will be directed. There is after all a
hierarchy of courts. That hierarchy is determinative of the venue of appeals, and
also serves as a general determinant of the appropriate forum for petitions for
the extraordinary writs. A becoming regard of that judicial hierarchy most
certainly indicates that petitions for the issuance of extraordinary writs against
first level (inferior) courts should be filed with the Regional Trial Court, and those
against the latter, with the Court of Appeals. A direct invocation of the Supreme
Courts original jurisdiction to issue these writs should be allowed only when there
are special and important reasons therefor, clearly and specifically set out in the
petition. This is [an] established policy. It is a policy necessary to prevent
inordinate demands upon the Courts time and attention which are better
devoted to those matters within its exclusive jurisdiction, and to prevent further
over-crowding of the Courts docket.

As we have said in Santiago v. Vasquez,[17] the propensity of litigants and

lawyers to disregard the hierarchy of courts in our judicial system by seeking
relief directly from this Court must be put to a halt for two reasons: (1) it would be
an imposition upon the precious time of this Court; and (2) it would cause an
inevitable and resultant delay, intended or otherwise, in the adjudication of
cases, which in some instances had to be remanded or referred to the lower
court as the proper forum under the rules of procedure, or as better equipped
to resolve the issues because this Court is not a trier of facts.
 Thus, we shall reaffirm the judicial policy that this Court will not entertain
direct resort to it unless the redress desired cannot be obtained in the
appropriate courts, and exceptional and compelling circumstances justify the
availment of the extraordinary remedy of writ of certiorari, calling for the
exercise of its primary jurisdiction.[18]
Petitioners reliance on Pimentel v. Aguirre[19] is misplaced because the non-
observance of the hierarchy-of-courts rule was not an issue therein. Besides,
what was sought to be nullified in the petition for certiorari and prohibition
therein was an act of the President of the Philippines, which would have greatly
affected all local government units. We reiterated therein that when an act of
the legislative department is seriously alleged to have infringed the Constitution,
settling the controversy becomes the duty of this Court. The same is true when
what is seriously alleged to be unconstitutional is an act of the President, who in
our constitutional scheme is coequal with Congress.
We hesitate to rule that the petitioner and the intervenor are guilty of forum-
shopping. Forum-shopping exists where the elements of litis pendentia are
present or when a final judgment in one case will amount to res judicata in the
other. For litis pendentia to exist, the following requisites must be present: (1)
identity of parties, or at least such parties as are representing the same interests
in both actions; (2) identity of rights asserted and reliefs prayed for, the reliefs
being founded on the same facts; and (3) identity with respect to the two
preceding particulars in the two cases, such that any judgment that may be
rendered in the pending case, regardless of which party is successful, would
amount to res judicata in the other case.[20]
In the instant petition, and as admitted by the respondents, the parties in this
case and in the alleged other pending cases are different individuals or entities;
thus, forum-shopping cannot be said to exist. Moreover, even assuming that
those five petitions are indeed pending before the RTC of Manila and the Court
of Appeals, we can only guess the causes of action and issues raised before
those courts, considering that the respondents failed to furnish this Court with
copies of the said petitions.
WHEREFORE, the petition is DISMISSED.
SO ORDERED.
THIRD DIVISION

[G.R. No. 139791. December 12, 2003]

MANILA BANKERS LIFE INSURANCE CORPORATION, petitioner, vs. EDDY NG KOK
WEI, respondent.

DECISION
SANDOVAL-GUTIERREZ, J.:

Before us is a petition for review on certiorari assailing the

Decision dated March 26, 1999 and Resolution dated August 5, 1999 of the
[1] [2]

Court of Appeals in CA-G.R. CV No. 40504, entitled Eddy Ng Kok Wei vs. Manila
Bankers Life Insurance Corporation.
The factual antecedents as borne by the records are:
Eddy Ng Kok Wei, respondent, is a Singaporean businessman who ventured
into investing in the Philippines. On November 29, 1988, respondent, in a Letter of
Intent addressed to Manila Bankers Life Insurance Corporation, petitioner,
expressed his intention to purchase a condominium unit at Valle Verde Terraces.
Subsequently or on December 5, 1988, respondent paid petitioner a
reservation fee of P50,000.00 for the purchase of a 46-square meter
condominium unit (Unit 703) valued at P860,922.00. On January 16, 1989,
respondent paid 90% of the purchase price in the sum of P729,830.00.
Consequently, petitioner, through its President, Mr. Antonio G. Puyat,
executed a Contract to Sell in favor of the respondent. The contract expressly
states that the subject condominium unit shall substantially be completed and
delivered to the respondent within fifteen (15) months from February 8, 1989 or
on May 8, 1990, and that (S)hould there be no substantial completion and
fail(ure) to deliver the unit on the date specified, a penalty of 1% of the total
amount paid (by respondent) shall be charged against (petitioner).
Considering that the stipulated 15-month period was at hand, respondent
returned to the Philippines sometime in April, 1990.
In a letter dated April 5, 1990, petitioner, through its Senior Assistant Vice-
President, Mr. Mario G. Zavalla, informed respondent of the substantial
completion of his condominium unit, however, due to various uncontrollable
forces (such as coup d etat attempts, typhoon and steel and cement shortage),
the final turnover is reset to May 31, 1990.
Meanwhile, on July 5, 1990, upon receipt of petitioners notice of delivery
dated May 31, 1990, respondent again flew back to Manila. He found the unit
still uninhabitable for lack of water and electric facilities.
Once more, petitioner issued another notice to move-in addressed to its
building administrator advising the latter that respondent is scheduled to move
in on August 22, 1990.
 On October 5, 1990, respondent returned to the Philippines only to find that
his condominium unit was still unlivable. Exasperated, he was constrained to
send petitioner a letter dated November 21, 1990 demanding payment for the
damages he sustained. But petitioner ignored such demand, prompting
respondent to file with the Regional Trial Court, Branch 150, Makati City, a
complaint against the former for specific performance and damages, docketed
as Civil Case No. 90-3440.
Meanwhile, during the pendency of the case, respondent finally accepted
the condominium unit and on April 12, 1991, occupied the same. Thus,
respondents cause of action has been limited to his claim for damages.
On December 18, 1992, the trial court rendered a Decision[3] finding the
petitioner liable for payment of damages due to the delay in the performance
of its obligation to the respondent. The dispositive portion reads:

WHEREFORE, judgment is hereby rendered in favor of plaintiff and against

defendant, ordering Manila Bankers Life Insurance Corporation to pay plaintiff
Eddy Ng Kok Wei the following:

1. One percent (1%) of the total amount plaintiff paid defendant;

2. P100,000.00 as moral damages;

3. P50,000.00 as exemplary damages;

4. P25,000.00 by way of attorneys fees; and

Cost of suit.

SO ORDERED.

On appeal, the Court of Appeals, in a Decision dated March 26, 1999,

affirmed in toto the trial courts award of damages in favor of the respondent.
Unsatisfied, petitioner filed a motion for reconsideration but was denied by
the Appellate Court in a Resolution dated August 5, 1999.
Hence, this petition for review on certiorari. Petitioner contends that the trial
court has no jurisdiction over the instant case; and that the Court of Appeals
erred in affirming the trial courts finding that petitioner incurred unreasonable
delay in the delivery of the condominium unit to respondent.
On petitioners contention that the trial court has no jurisdiction over the
instant case, Section 1 (c) of Presidential Decree No. 1344, as amended,
provides:
SECTION 1. In the exercise of its functions to regulate the real estate trade and
business and in addition to its powers provided for in Presidential Decree No.
957, the National Housing Authority [now Housing and Land Use Regulatory
Board (HLURB)][4] shall have exclusive jurisdiction to hear and decide cases of
the following nature:

xxx

C. Cases involving specific performance of contractual and statutory

obligations filed by buyers of subdivision lots or condominium units against the
owner, developer, dealer, broker or salesman.

x x x.

Pursuant to the above provisions, it is the HLURB which has jurisdiction over
the instant case. We have consistently held that complaints for specific
performance with damages by a lot or condominium unit buyer against the
owner or developer falls under the exclusive jurisdiction of the HLURB.[5]
While it may be true that the trial court is without jurisdiction over the case,
petitioners active participation in the proceedings estopped it from assailing
such lack of it. We have held that it is an undesirable practice of a party
participating in the proceedings and submitting its case for decision and then
accepting the judgment, only if favorable, and attacking it for lack of
jurisdiction, when adverse.[6]
Here, petitioner failed to raise the question of jurisdiction before the trial
court and the Appellate Court. In effect, petitioner confirmed and ratified the
trial courts jurisdiction over this case.Certainly, it is now in estoppel and can no
longer question the trial courts jurisdiction.
On petitioners claim that it did not incur delay, suffice it to say that this is a
factual issue. Time and again, we have ruled that the factual findings of the trial
court are given weight when supported by substantial evidence and carries
more weight when affirmed by the Court of Appeals.[7] Whether or not petitioner
incurred delay and thus, liable to pay damages as a result thereof, are indeed
factual questions.
The jurisdiction of this Court in a petition for review on certiorari under Rule 45
of the 1997 Rules of Civil Procedure, as amended, is limited to reviewing only
errors of law, not of fact, unless the factual findings being assailed are not
supported by evidence on record or the impugned judgment is based on a
misapprehension of facts.[8] These exceptions are not present here.
 WHEREFORE, the petition is DENIED. The assailed Decision dated March 26,
1999 and Resolution dated August 5, 1999 of the Court of Appeals are
hereby AFFIRMED IN TOTO.
Costs against the petitioner.
SO ORDERED.

FIRST DIVISION

[A.M. No. MTJ-01-1370. April 25, 2003]

OFFICE OF THE COURT ADMINISTRATOR, complainant, vs. JUDGE AGUSTIN T.

SARDIDO, Municipal Trial Court of Koronadal, South Cotabato, respondent.

DECISION
CARPIO, J.:

The Case

This is an administrative case against respondent Judge Agustin T. Sardido

(Judge Sardido) formerly presiding judge of the Municipal Trial Court of
Koronadal, South Cotabato, for gross ignorance of the law. Judge Sardido
issued an Order dated 20 October 1998 excluding Judge Braulio Hurtado, Jr.
(Judge Hurtado) of the Regional Trial Court of Kabacan, North Cotabato as one
of the accused in an Amended Information.[1] Judge Sardido ruled that
Supreme Court Circular No. 3-89 requires that Judge Hurtado be dropped from
the Amended Information and his case be forwarded to the Court.

The Facts

Private complainant Teresita Aguirre Magbanua accused Oscar Pagunsan

and Danilo Ong of the crime of Falsification by Private Individual and Use of
Falsified Document.[2] The Amended Information included Judge Hurtado. The
case, docketed as Criminal Case No. 14071, was raffled to Judge Sardido, then
presiding judge of the Municipal Trial Court of Koronadal, South Cotabato (MTC-
Koronadal).
In a Deed of Absolute Sale dated 8 August 1993, private complainant
Magbanua and six other vendors allegedly sold two parcels of land, covered by
TCT Nos. 47873 and 33633 and located at the commercial district of Koronadal,
to Davao Realty Development Corporation, represented by accused Ong, with
co-accused Pagunsan, as broker. Judge Hurtado, who at that time was the
Clerk of Court of RTC-Koronadal and ex-officio notary public, notarized the
Deed of Absolute Sale.
However, private complainant Magbanua denies signing the Deed of
Absolute Sale dated 8 August 1993 which states that the consideration for the
sale was only P600,000.00. Private complainant asserts that what she and the
other vendors signed was a Deed of Absolute Sale dated 6 August 1996 for a
consideration of P16,000,000.00. Under the terms of the sale, the vendee agreed
to pay for the capital gains tax. The consideration in the 8 August 1993 Deed of
Absolute Sale was apparently undervalued. Subsequently, the Bureau of Internal
Revenue assessed the vendors a deficiency capital gains tax of P1,023,375.00.
Judge Hurtado filed a motion praying that the criminal complaint against
him be forwarded to the Supreme Court. Judge Hurtado claimed that Circular
No. 3-89 dated 6 February 1989 requires all cases involving justices and judges of
the lower courts, whether or not such complaints deal with acts apparently
unrelated to the discharge of their official functions, such as acts of immorality,
estafa, crimes against persons and property, etc. to be forwarded to the
Supreme Court. Judge Hurtado asserted that since the case against him is one
involving a judge of a lower court, the same should be forwarded to the
Supreme Court pursuant to Circular No. 3-89.
The Provincial Prosecutor opposed Judge Hurtados motion, arguing that the
case against Judge Hurtado is not within the scope of Circular No. 3-89 since it is
not an IBP-initiated case. Moreover, the offense charged was committed in 1993
when Judge Hurtado was still a clerk of court and ex-officio notary public.
On 20 October 1998, Judge Sardido issued an Order, the pertinent portions
of which read:

The issue to be resolved in the instant case is, whether the case of Judge
Hurtado, who is charged for acts committed prior to his appointment as an RTC
Judge, falls within the purview of the afore-said Circular No. 3-89.

It is the humble submission of the Court that the case of Judge Hurtado, an RTC
Judge of the Regional Trial Court of Kabacan, North Cotabato, falls within the
meaning and intent of the said circular.
For reasons being, firstly, the said circular provides that all cases involving justices
and judges of lower courts shall be forwarded to the Supreme Court for
appropriate action, whether or not such complaints deal with acts apparently
unrelated to the discharge of their official functions, and regardless of the
nature of the crime, without any qualification whether the crime was committed
before or during his tenure of office. Under the law on Legal Hermeneutics, if the
law does not qualify we must not qualify. Secondly, it would sound, to the mind
of the Court, awkward for a first level court to be trying an incumbent judge of a
second level court.

For reasons afore-stated, this Court can not and shall not try this case as against
Judge Hurtado, unless the Honorable Supreme Court would order otherwise.

Wherefore, the foregoing premises duly considered, the name of Judge Braulio
L. Hurtado, Jr. is ordered excluded from the amended information and the case
against him is ordered forwarded to the Honorable Supreme Court, pursuant to
the afore-said Circular No. 3-89 of the Supreme Court, dated February 9, 1989.

Accordingly, Maxima S. Borja (Borja), Stenographer I and Acting Clerk of

Court II of the MTC-Koronadal, South Cotabato, wrote a letter dated 21 July
1999 forwarding the criminal case against Judge Hurtado to the Court
Administrator for appropriate action.
Then Court Administrator Alfredo L. Benipayo issued a Memorandum dated
25 October 2000 pointing out that Circular No. 3-89 refers only to administrative
complaints filed with the IBP against justices and judges of lower courts. The
Circular does not apply to criminal cases filed before trial courts against such
justices and judges.
Thus, in the Resolution of 6 December 2000, the Court directed that the letter
of Acting Clerk of Court Borja be returned to the MTC-Koronadal together with
the records of the criminal case. The Court directed Judge Sardido to explain in
writing why he should not be held liable for gross ignorance of the law for
excluding Judge Hurtado from the Amended Information and for transmitting
the records of Judge Hurtados case to the Court.
In his Explanation dated 26 January 2001, Judge Sardido reasoned out that
he excluded Judge Hurtado because Circular No. 3-89 directs the IBP to forward
to the Supreme Court for appropriate action all cases involving justices and
judges of lower courts x x x. Judge Sardido claims that the Circular likewise
applies to courts in cases involving justices or judges of the lower courts,
especially so in this case where Judge Hurtado was charged with falsification of
public document as a notary public while he was still the Clerk of Court of the
Regional Trial Court of the 11th Judicial Region in Koronadal, South Cotabato.
 In the Resolution of 28 March 2001, the Court referred this case to the Office
of the Court Administrator (OCA) for evaluation, report and
recommendation. On 10 July 2001, the OCA submitted a Memorandum
recommending that this case be re-docketed as a regular administrative
matter.
Judge Sardido filed his Manifestation dated 20 September 2001 stating that
he is submitting the case for decision based on the pleadings and records
already filed. Judge Sardido insisted that he did what he had done in all honesty
and good faith.

OCAs Findings and Conclusions

The OCA found that Judge Sardido erred in excluding Judge Hurtado as
one of the accused in the Amended Information in Criminal Case No. 14071. The
OCA held that Circular No. 3-89, which is Judge Sardidos basis in issuing the
Order of 20 October 1998, refers to administrative complaints filed with the IBP
against justices and judges of lower courts. The Circular does not apply to
criminal cases filed against justices and judges of lower courts. The OCA
recommended that a fine of P5,000.00 be imposed on Judge Sardido for gross
ignorance of the law.

The Courts Ruling

The Court issued Circular No. 3-89 in response to a letter dated 19 December
1988 by then IBP President Leon M. Garcia, seeking clarification of the Courts En
Banc Resolution of 29 November 1998 in RE: Letter of then Acting Presiding
Justice Rodolfo A. Nocon[3] and Associate Justices Reynato Puno[4] and Alfredo
Marigomen[5] of the Court of Appeals.
A certain Atty. Eduardo R. Balaoing had filed a complaint against Court of
Appeals Justices Nocon, Puno and Marigomen relating to a petition filed before
their division. In its En Banc Resolution of 29 November 1988, the Court required
the IBP to refer to the Supreme Court for appropriate action the
complaint[6] filed by Atty. Balaoing with the IBP Commission on Bar Discipline. The
Court stated that the power to discipline justices and judges of the lower courts
is within the Courts exclusive power and authority as provided in Section 11,
Article VII of the 1987 Constitution.[7] The Court Administrator publicized the En
Banc Resolution of 29 November 1988 by issuing Circular No. 17 dated 20
December 1988.
 The Court issued Circular No. 3-89 on 6 February 1989 clarifying the En Banc
Resolution of 29 November 1988. Circular No. 3-89 provides in part as follows:

(1) The IBP (Board of Governors and Commission on Bar Discipline) shall forward
to the Supreme Court for appropriate action all cases involving justices and
judges of lower courts, whether or not such complaints deal with acts
apparently unrelated to the discharge of their official functions, such as acts of
immorality, estafa, crimes against persons and property, etc. x x x. (Emphasis
supplied)

Circular No. 3-89 clarified the second paragraph, Section 1 of Rule 139-B of
the Rules of Court which states that:

The IBP Board of Governors may, motu proprio or upon referral by the Supreme
Court or by a Chapter Board of Officers, or at the instance of any person, initiate
and prosecute proper charges against erring attorneys including those in the
government service. (Emphasis supplied).

As clarified, the phrase attorneys x x x in the government service in Section 1 of

Rule 139-B does not include justices of appellate courts and judges of lower
courts who are not subject to the disciplining authority of the IBP. All
administrative cases against justices of appellate courts and judges of lower
courts fall exclusively within the jurisdiction of the Supreme Court.
However, Rule 139-B refers to Disbarment and Discipline of Attorneys which is
administrative and not criminal in nature. The cases referred to in Circular No. 3-
89 are administrative cases for disbarment, suspension or discipline of attorneys,
including justices of appellate courts and judges of the lower courts. The Court
has vested the IBP with the power to initiate and prosecute administrative cases
against erring lawyers.[8] However, under Circular No. 3-89, the Court has
directed the IBP to refer to the Supreme Court for appropriate action all
administrative cases filed with IBP against justices of appellate courts and judges
of the lower courts. As mandated by the Constitution, the Court exercises the
exclusive power to discipline administratively justices of appellate courts and
judges of lower courts.
Circular No. 3-89 does not refer to criminal cases against erring justices of
appellate courts or judges of lower courts. Trial courts retain jurisdiction over the
criminal aspect of offenses committed by justices of appellate courts [9] and
judges of lower courts. This is clear from the Circular directing the IBP, and not
the trial courts, to refer all administrative cases filed against justices of appellate
courts and judges of lower courts to the Supreme Court. The case filed against
Judge Hurtado is not an administrative case filed with the IBP. It is a criminal
case filed with the trial court under its jurisdiction as prescribed by law.
 The acts or omissions of a judge may well constitute at the same time both a
criminal act and an administrative offense. Whether the criminal case against
Judge Hurtado relates to an act committed before or after he became a judge
is of no moment. Neither is it material that an MTC judge will be trying an RTC
judge in the criminal case. A criminal case against an attorney or judge is
distinct and separate from an administrative case against him. The dismissal of
the criminal case does not warrant the dismissal of an administrative case arising
from the same set of facts. The quantum of evidence that is required in the latter
is only preponderance of evidence, and not proof beyond reasonable doubt
which is required in criminal cases.[10] As held in Gatchalian Promotions Talents
Pool, Inc. v. Naldoza:[11]

Administrative cases against lawyers belong to a class of their own. They are
distinct from and they may proceed independently of civil and criminal cases.

The burden of proof for these types of cases differ. In a criminal case, proof
beyond reasonable doubt is necessary; in an administrative case for disbarment
or suspension, clearly preponderant evidence is all that is required. Thus, a
criminal prosecution will not constitute a prejudicial question even if the same
facts and circumstances are attendant in the administrative proceedings.

It should be emphasized that a finding of guilt in the criminal case will not
necessarily result in a finding of liability in the administrative case. Conversely,
respondents acquittal does not necessarily exculpate him administratively. In the
same vein, the trial courts finding of civil liability against the respondent will not
inexorably lead to a similar finding in the administrative action before this
Court. Neither will a favorable disposition in the civil action absolve the
administrative liability of the lawyer. The basic premise is that criminal and civil
cases are altogether different from administrative matters, such that the
disposition in the first two will not inevitably govern the third and vice versa. For
this reason, it would be well to remember the Courts ruling in In re Almacen,
which we quote:

x x x Disciplinary proceedings against lawyers are sui generis. Neither purely civil
nor purely criminal, they do not involve a trial of an action or a suit, but are
rather investigations by the Court into the conduct of one of its officers. Not
being intended to inflict punishment, [they are] in no sense a criminal
prosecution. Accordingly, there is neither a plaintiff nor a prosecutor
therein. [They] may be initiated by the Court motu proprio.Public interest is [their]
primary objective, and the real question for determination is whether or not the
attorney is still a fit person to be allowed the privileges as such. Hence, in the
exercise of its disciplinary powers, the Court merely calls upon a member of the
Bar to account for his actuations as an officer of the Court with the end in view
of preserving the purity of the legal profession and the proper and honest
administration of justice by purging the profession of members who by their
misconduct have prove[n] themselves no longer worthy to be entrusted with the
duties and responsibilities pertaining to the office of an attorney. x x x

A judge is called upon to exhibit more than just a cursory acquaintance with
statutes and procedural rules. He must be conversant with basic legal principles
and well-settled doctrines. He should strive for excellence and seek the truth
with passion.[12] Judge Sardido failed in this regard. He erred in excluding Judge
Hurtado as one of the accused in the Amended Information and in forwarding
the criminal case against Judge Hurtado to the Court.
One last point. This administrative case against Judge Sardido started before
the amendment[13] of Rule 140 classifying gross ignorance of the law a serious
offense punishable by a fine of more than P20,000.00 but not
exceeding P40,000.00. The amendment cannot apply retroactively to Judge
Sardidos case. However, the fine of P5,000.00 recommended by the OCA is too
light a penalty considering that this is not the first offense of Judge Sardido.
In RE: Hold Departure Order Issued by Judge Agustin T. Sardido,[14] the Court
reprimanded Judge Sardido for issuing a hold-departure order contrary to
Circular No. 39-97. In Cabilao v. Judge Sardido,[15] the Court fined Judge
Sardido P5,000.00 for gross ignorance of the law, grave abuse of discretion and
gross misconduct. The Court gave a stern warning to Judge Sardido that a
commission of the same or similar act would be dealt with more
severely. In Almeron v. Judge Sardido,[16] the Court imposed on Judge Sardido a
stiffer fine of P10,000.00 for gross ignorance of the law. He was again sternly
warned that the commission of the same or similar act in the future would be
dealt with more severely including, if warranted, his dismissal from the service.
In a more recent administrative case, Torcende v. Judge Sardido,[17] the
Court found Judge Sardido again guilty of gross ignorance of the law and of
gross misconduct. This time the Court dismissed Judge Sardido from the service
with forfeiture of his retirement benefits, except accrued leave credits. The
dismissal was with prejudice to reemployment in any branch of the government
or any of its agencies or instrumentalities, including government-owned and
controlled corporations.
The records of the OCA further disclose that Judge Sardido has other similar
administrative complaints[18] still pending against him. Such an unflattering
service record erodes the peoples faith and confidence in the judiciary. It is the
duty of every member of the bench to avoid any impression of impropriety to
protect the image and integrity of the judiciary.[19] The Court may still impose a
fine on Judge Sardido in the instant case despite his dismissal from the service.
 WHEREFORE, respondent Judge Agustin T. Sardido is FINED Ten Thousand
Pesos (P10,000.00) for gross ignorance of the law. The fine may be deducted
from his accrued leave credits.
SO ORDERED.

THIRD DIVISION

[G.R. No. 151149. September 7, 2004]

GEORGE KATON, petitioner, vs. MANUEL PALANCA JR., LORENZO AGUSTIN, JESUS
GAPILANGO and JUAN FRESNILLO, respondents.

DECISION
PANGANIBAN, J.:

Where prescription, lack of jurisdiction or failure to state a cause of action

clearly appear from the complaint filed with the trial court, the action may be
dismissed motu proprio by the Court of Appeals, even if the case has been
elevated for review on different grounds. Verily, the dismissal of such cases
appropriately ends useless litigations.

The Case

Before us is a Petition for Review[1] under Rule 45 of the Rules of Court,

assailing the December 8, 2000 Decision[2] and the November 20, 2001
Resolution[3] of the Court of Appeals in CA-GR SP No. 57496. The assailed
Decision disposed as follows:

Assuming that petitioner is correct in saying that he has the exclusive right in
applying for the patent over the land in question, it appears that his action is
already barred by laches because he slept on his alleged right for almost 23
years from the time the original certificate of title has been issued to respondent
Manuel Palanca, Jr., or after 35 years from the time the land was certified as
agricultural land. In addition, the proper party in the annulment of patents or
titles acquired through fraud is the State; thus, the petitioners action is deemed
misplaced as he really does not have any right to assert or protect. What he had
during the time he requested for the re-classification of the land was the
privilege of applying for the patent over the same upon the lands conversion
from forest to agricultural.

WHEREFORE, the petition is hereby DISMISSED. No pronouncement as to cost.[4]

The assailed Resolution, on the other hand, denied the Motion for
Reconsideration filed by petitioner. It affirmed the RTCs dismissal of his Complaint
in Civil Case No. 3231, not on the grounds relied upon by the trial court, but
because of prescription and lack of jurisdiction.

The Antecedent Facts

The CA narrates the antecedent facts as follows:

On August 2, 1963, herein [P]etitioner [George Katon] filed a request with the
District Office of the Bureau of Forestry in Puerto Princesa, Palawan, for the re-
classification of a piece of real property known as Sombrero Island, located in
Tagpait, Aborlan, Palawan, which consists of approximately 18 hectares. Said
property is within Timberland Block of LC Project No. 10-C of Aborlan, Palawan,
per BF Map LC No. 1582.

Thereafter, the Bureau of Forestry District Office, Puerto Princesa, Palawan,

ordered the inspection, investigation and survey of the land subject of the
petitioners request for eventual conversion or re-classification from forest to
agricultural land, and thereafter for George Katon to apply for a homestead
patent.

Gabriel Mandocdoc (now retired Land Classification Investigator) undertook the

investigation, inspection and survey of the area in the presence of the
petitioner, his brother Rodolfo Katon (deceased) and his cousin, [R]espondent
Manuel Palanca, Jr. During said survey, there were no actual occupants on the
island but there were some coconut trees claimed to have been planted by
petitioner and [R]espondent Manuel Palanca, Jr. (alleged overseer of petitioner)
who went to the island from time to time to undertake development work, like
planting of additional coconut trees.

The application for conversion of the whole Sombrero Island was favorably
endorsed by the Forestry District Office of Puerto Princesa to its main office
in Manila for appropriate action. The names of Felicisimo Corpuz, Clemente
Magdayao and Jesus Gapilango and Juan Fresnillo were included in the
endorsement as co-applicants of the petitioner.
In a letter dated September 23, 1965, then Asst. Director of Forestry R.J.L. Utleg
informed the Director of Lands, Manila, that since the subject land was no
longer needed for forest purposes, the same is therefore certified and released
as agricultural land for disposition under the Public Land Act.

Petitioner contends that the whole area known as Sombrero Island had been
classified from forest land to agricultural land and certified available for
disposition upon his request and at his instance. However, Mr. Lucio Valera, then
[l]and investigator of the District Land Office, Puerto Princesa, Palawan,
favorably endorsed the request of [R]espondents Manuel Palanca Jr. and
Lorenzo Agustin, for authority to survey on November 15, 1965. On November 22,
a second endorsement was issued by Palawan District Officer Diomedes De
Guzman with specific instruction to survey vacant portions of Sombrero Island for
the respondents consisting of five (5) hectares each. On December 10, 1965,
Survey Authority No. R III-342-65 was issued authorizing Deputy Public Land
Surveyor Eduardo Salvador to survey ten (10) hectares of Sombrero Island for the
respondents.On December 23, 1990, [R]espondent Lorenzo Agustin filed a
homestead patent application for a portion of the subject island consisting of
an area of 4.3 hectares.

Records show that on November 8, 1996, [R]espondent Juan Fresnillo filed a

homestead patent application for a portion of the island comprising 8.5
hectares. Records also reveal that [R]espondent Jesus Gapilango filed a
homestead application on June 8, 1972. Respondent Manuel Palanca, Jr. was
issued Homestead Patent No. 145927 and OCT No. G-7089 on March 3,
1977[5] with an area of 6.84 hectares of Sombrero Island.

Petitioner assails the validity of the homestead patents and original certificates
of title covering certain portions of Sombrero Island issued in favor of
respondents on the ground that the same were obtained through
fraud.Petitioner prays for the reconveyance of the whole island in his favor.

On the other hand, [R]espondent Manuel Palanca, Jr. claims that he himself
requested for the reclassification of the island in dispute and that on or about
the time of such request, [R]espondents Fresnillo, Palanca and Gapilango
already occupied their respective areas and introduced numerous
improvements. In addition, Palanca said that petitioner never filed any
homestead application for the island. Respondents deny that Gabriel
Mandocdoc undertook the inspection and survey of the island.

According to Mandocdoc, the island was uninhabited but the respondents insist
that they already had their respective occupancy and improvements on the
island. Palanca denies that he is a mere overseer of the petitioner because he
said he was acting for himself in developing his own area and not as anybodys
caretaker.

Respondents aver that they are all bona fide and lawful possessors of their
respective portions and have declared said portions for taxation purposes and
that they have been faithfully paying taxes thereon for twenty years.

Respondents contend that the petitioner has no legal capacity to sue insofar as
the island is concerned because an action for reconveyance can only be
brought by the owner and not a mere homestead applicant and that petitioner
is guilty of estoppel by laches for his failure to assert his right over the land for an
unreasonable and unexplained period of time.

In the instant case, petitioner seeks to nullify the homestead patents and original
certificates of title issued in favor of the respondents covering certain portions of
the Sombrero Island as well as the reconveyance of the whole island in his
favor. The petitioner claims that he has the exclusive right to file an application
for homestead patent over the whole island since it was he who requested for its
conversion from forest land to agricultural land.[6]

Respondents filed their Answer with Special and/or Affirmative Defenses and
Counterclaim in due time. On June 30, 1999, they also filed a Motion to Dismiss
on the ground of the alleged defiance by petitioner of the trial courts Order to
amend his Complaint so he could thus effect a substitution by the legal heirs of
the deceased, Respondent Gapilango. The Motion to Dismiss was granted by
the RTC in its Order dated July 29, 1999.
Petitioners Motion for Reconsideration of the July 29, 1999 Order was denied
by the trial court in its Resolution dated December 17, 1999, for being a third and
prohibited motion. In his Petition for Certiorari before the CA, petitioner charged
the trial court with grave abuse of discretion on the ground that the denied
Motion was his first and only Motion for Reconsideration of the aforesaid Order.

Ruling of the Court of Appeals

Instead of limiting itself to the allegation of grave abuse of discretion, the CA

ruled on the merits. It held that while petitioner had caused the reclassification
of Sombrero Island from forest to agricultural land, he never applied for a
homestead patent under the Public Land Act. Hence, he never acquired title to
that land.
The CA added that the annulment and cancellation of a homestead patent
and the reversion of the property to the State were matters between the latter
and the homestead grantee. Unless and until the government takes steps to
annul the grant, the homesteaders right thereto stands.
Finally, granting arguendo that petitioner had the exclusive right to apply for
a patent to the land in question, he was already barred by laches for having
slept on his right for almost 23 years from the time Respondent Palancas title had
been issued.
In the Assailed Resolution, the CA acknowledged that it had erred when it
ruled on the merits of the case. It agreed with petitioner that the trial court had
acted without jurisdiction in perfunctorily dismissing his September 10, 1999
Motion for Reconsideration, on the erroneous ground that it was a third and
prohibited motion when it was actually only his first motion.
Nonetheless, the Complaint was dismissed motu proprio by the challenged
Resolution of the CA Special Division of five members with two justices dissenting
pursuant to its residual prerogative under Section 1 of Rule 9 of the Rules of
Court.
From the allegations of the Complaint, the appellate court opined that
petitioner clearly had no standing to seek reconveyance of the disputed land,
because he neither held title to it nor even applied for a homestead patent. It
reiterated that only the State could sue for cancellation of the title issued upon
a homestead patent, and for reversion of the land to the public domain.
Finally, it ruled that prescription had already barred the action for
reconveyance. First, petitioners action was brought 24 years after the issuance
of Palancas homestead patent. Under the Public Land Act, such action should
have been taken within ten years from the issuance of the homestead
certificate of title. Second, it appears from the submission (Annex F of the
Complaint) of petitioner himself that Respondents Fresnillo and Palanca had
been occupying six hectares of the island since 1965, or 33 years before he took
legal steps to assert his right to the property. His action was filed beyond the 30-
year prescriptive period under Articles 1141 and 1137 of the Civil Code.
Hence, this Petition.[7]

Issues

In his Memorandum, petitioner raises the following issues:

1. Is the Court of Appeals correct in resolving the Petition for Certiorari based on
an issue not raised (the merits of the case) in the Petition?
2. Is the Court of Appeals correct in invoking its alleged residual prerogative
under Section 1, Rule 9 of the 1997 Rules of Civil Procedure in resolving the
Petition on an issue not raised in the Petition?[8]

The Courts Ruling

The Petition has no merit.

First Issue:
Propriety of Ruling on the Merits

This is not the first time that petitioner has taken issue with the propriety of the
CAs ruling on the merits. He raised it with the appellate court when he moved
for reconsideration of its December 8, 2000 Decision. The CA even corrected
itself in its November 20, 2001 Resolution, as follows:

Upon another review of the case, the Court concedes that it may indeed have
lost its way and been waylaid by the variety, complexity and seeming
importance of the interests and issues involved in the case below, the apparent
reluctance of the judges, five in all, to hear the case, and the volume of the
conflicting, often confusing, submissions bearing on incidental matters. We stand
corrected.[9]

That explanation should have been enough to settle the issue. The CAs
Resolution on this point has rendered petitioners issue moot. Hence, there is no
need to discuss it further. Suffice it to say that the appellate court indeed acted
ultra jurisdictio in ruling on the merits of the case when the only issue that could
have been, and was in fact, raised was the alleged grave abuse of discretion
committed by the trial court in denying petitioners Motion for
Reconsideration. Settled is the doctrine that the sole office of a writ of certiorari
is the correction of errors of jurisdiction. Such writ does not include a review of
the evidence,[10] more so when no determination of the merits has yet been
made by the trial court, as in this case.
Second Issue:
Dismissal for Prescription
and Lack of Jurisdiction

Petitioner next submits that the CA erroneously invoked its residual

prerogatives under Section 1 of Rule 9 of the Rules of Court when it motu
proprio dismissed the Petition for lack of jurisdiction and prescription. According
to him, residual prerogative refers to the power that the trial court, in the
exercise of its original jurisdiction, may still validly exercise even after perfection
of an appeal. It follows that such powers are not possessed by an appellate
court.
Petitioner has confused what the CA adverted to as its residual prerogatives
under Section 1 of Rule 9 of the Rules of Court with the residual jurisdiction of trial
courts over cases appealed to the CA.
Under Section 1 of Rule 9 of the Rules of Court, defenses and objections not
pleaded either in a motion to dismiss or in the answer are deemed waived,
except when (1) lack of jurisdiction over the subject matter, (2) litis pendentia,
(3) res judicata and (4) prescription are evident from the pleadings or the
evidence on record. In the four excepted instances, the court shall motu
proprio dismiss the claim or action. In Gumabon v. Larin[11] we explained thus:

x x x [T]he motu proprio dismissal of a case was traditionally limited to instances

when the court clearly had no jurisdiction over the subject matter and when the
plaintiff did not appear during trial, failed to prosecute his action for an
unreasonable length of time or neglected to comply with the rules or with any
order of the court. Outside of these instances, any motu proprio dismissal would
amount to a violation of the right of the plaintiff to be heard. Except for
qualifying and expanding Section 2, Rule 9, and Section 3, Rule 17, of the
Revised Rules of Court, the amendatory 1997 Rules of Civil Procedure brought
about no radical change. Under the new rules, a court may motu proprio dismiss
a claim when it appears from the pleadings or evidence on record that it has no
jurisdiction over the subject matter; when there is another cause of action
pending between the same parties for the same cause, or where the action is
barred by a prior judgment or by statute of limitations. x x x.[12] (Italics supplied)

On the other hand, residual jurisdiction is embodied in Section 9 of Rule 41 of

the Rules of Court, as follows:

SEC. 9. Perfection of appeal; effect thereof. A partys appeal by notice of

appeal is deemed perfected as to him upon the filing of the notice of appeal in
due time.

A partys appeal by record on appeal is deemed perfected as to him with

respect to the subject matter thereof upon the approval of the record on
appeal filed in due time.

In appeals by notice of appeal, the court loses jurisdiction over the case upon
the perfection of the appeals filed in due time and the expiration of the time to
appeal of the other parties.
In appeals by record on appeal, the court loses jurisdiction only over the subject
matter thereof upon the approval of the records on appeal filed in due time
and the expiration of the time to appeal of the other parties.

In either case, prior to the transmittal of the original record or the record on
appeal, the court may issue orders for the protection and preservation of the
rights of the parties which do not involve any matter litigated by the appeal,
approve compromises, permit appeals of indigent litigants, order execution
pending appeal in accordance with Section 2 of Rule 39, and allow withdrawal
of the appeal. (Italics supplied)

The residual jurisdiction of trial courts is available at a stage in which the

court is normally deemed to have lost jurisdiction over the case or the subject
matter involved in the appeal. This stage is reached upon the perfection of the
appeals by the parties or upon the approval of the records on appeal, but prior
to the transmittal of the original records or the records on appeal.[13] In either
instance, the trial court still retains its so-called residual jurisdiction to issue
protective orders, approve compromises, permit appeals of indigent litigants,
order execution pending appeal, and allow the withdrawal of the appeal.
The CAs motu proprio dismissal of petitioners Complaint could not have
been based, therefore, on residual jurisdiction under Rule 41. Undeniably, such
order of dismissal was not one for the protection and preservation of the rights of
the parties, pending the disposition of the case on appeal. What the CA
referred to as residual prerogatives were the general residual powers of the
courts to dismiss an action motu proprio upon the grounds mentioned in Section
1 of Rule 9 of the Rules of Court and under authority of Section 2 of Rule 1 [14] of
the same rules.
To be sure, the CA had the excepted instances in mind when it dismissed the
Complaint motu proprio on more fundamental grounds directly bearing on the
lower courts lack of jurisdiction[15] and for prescription of the action. Indeed,
when a court has no jurisdiction over the subject matter, the only power it has is
to dismiss the action.[16]
Jurisdiction over the subject matter is conferred by law and is determined by
the allegations in the complaint and the character of the relief sought.[17] In his
Complaint for Nullification of Applications for Homestead and Original
Certificate of Title No. G-7089 and for Reconveyance of Title,[18] petitioner
averred:

2. That on November 10, 1965, without the knowledge of [petitioner,

Respondent] Manuel Palanca Jr., [petitioners] cousin, in connivance with his co-
[respondent], Lorenzo Agustin, x x x fraudulently and in bad faith:
2.1. x x x made the request for authority to survey as a pre-requisite to the filing
of an application for homestead patent in his name and that of his Co-
[Respondent] Agustin, [despite being] fully aware that [Petitioner] KATON had
previously applied or requested for re-classification and certification of the same
land from forest land to agricultural land which request was favorably acted
upon and approved as mentioned earlier; a clear case of intrinsic fraud and
misrepresentation;

xxxxxxxxx

2.3. In stating in his application for homestead patent that he was applying for
the VACANT PORTION of Sombrero Island where there was none, the same
constituted another clear case of fraud and misrepresentation;

3. That the issuance of Homestead Patent No. 145927 and OCT No. G-7089 in the
name of [Respondent] Manuel Palanca Jr. and the filing of Homestead Patent
Applications in the names of [respondents], Lorenzo Agustin, Jesus Gapilango
and Juan Fresnillo[,] having been done fraudulently and in bad faith, are ipso
facto null and void and of no effect whatsoever.[19]

xxxxxxxxx

x x x. By a wrongful act or a willful omission and intending the effects with natural
necessity arise knowing from such act or omission, [Respondent Palanca] on
account of his blood relation, first degree cousins, trust, interdependence and
intimacy is guilty of intrinsic fraud [sic]. x x x.[20]

Thereupon, petitioner prayed, among others, for a judgment (1) nullifying the
homestead patent applications of Respondents Agustin, Fresnillo and
Gapilango as well as Homestead Patent No. 145927 and OCT No. G-7089 in the
name of Respondent Palanca; and (2) ordering the director of the Land
Management Bureau to reconvey the Sombrero Island to petitioner.[21]
The question is, did the Complaint sufficiently allege an action for
declaration of nullity of the free patent and certificate of title or, alternatively,
for reconveyance? Or did it plead merely for reversion?
The Complaint did not sufficiently make a case for any of such actions, over
which the trial court could have exercised jurisdiction.
In an action for nullification of title or declaration of its nullity, the
complaint must contain the following allegations: 1) that the contested land
was privately owned by the plaintiff prior to the issuance of the assailed
certificate of title to the defendant; and 2) that the defendant
perpetuated a fraud or committed a mistake in obtaining a document of
title over the parcel of land claimed by the plaintiff. [22] In these cases, the
nullity arises not from fraud or deceit, but from the fact that the director
of the Land Management Bureau had no jurisdiction to bestow title;
hence, the issued patent or certificate of title was void ab initio.[23]
In an alternative action for reconveyance, the certificate of title is also
respected as incontrovertible, but the transfer of the property or title thereto is
sought to be nullified on the ground that it was wrongfully or erroneously
registered in the defendants name.[24] As with an annulment of title, a complaint
must allege two facts that, if admitted, would entitle the plaintiff to recover title
to the disputed land: (1) that the plaintiff was the owner of the land, and (2) that
the defendant illegally dispossessed the plaintiff of the property.[25] Therefore,
the defendant who acquired the property through mistake or fraud is bound to
hold and reconvey to the plaintiff the property or the title thereto.[26]
In the present case, nowhere in the Complaint did petitioner allege that he
had previously held title to the land in question. On the contrary, he
acknowledged that the disputed island was public land,[27] that it had never
been privately titled in his name, and that he had not applied for a homestead
under the provisions of the Public Land Act.[28] This Court has held that a
complaint by a private party who alleges that a homestead patent was
obtained by fraudulent means, and who consequently prays for its annulment,
does not state a cause of action; hence, such complaint must be dismissed. [29]
Neither can petitioners case be one for reversion. Section 101 of the Public
Land Act categorically declares that only the solicitor general or the officer in his
stead may institute such an action.[30]A private person may not bring an action
for reversion or any other action that would have the effect of canceling a free
patent and its derivative title, with the result that the land thereby covered
would again form part of the public domain.[31]
Thus, when the plaintiff admits in the complaint that the disputed land will
revert to the public domain even if the title is canceled or amended, the action
is for reversion; and the proper party who may bring action is the government, to
which the property will revert.[32] A mere homestead applicant, not being the
real party in interest, has no cause of action in a suit for reconveyance.[33] As it is,
vested rights over the land applied for under a homestead may be validly
claimed only by the applicant, after approval by the director of the Land
Management Bureau of the formers final proof of homestead patent. [34]
Consequently, the dismissal of the Complaint is proper not only because of
lack of jurisdiction, but also because of the utter absence of a cause of
action,[35] a defense raised by respondents in their Answer.[36] Section 2 of Rule 3
of the Rules of Court[37] ordains that every action must be prosecuted or
defended in the name of the real party in interest, who stands to be benefited
or injured by the judgment in the suit. Indeed, one who has no right or interest to
protect has no cause of action by which to invoke, as a party-plaintiff, the
jurisdiction of the court.[38]
Finally, assuming that petitioner is the proper party to bring the action for
annulment of title or its reconveyance, the case should still be dismissed for
being time-barred.[39] It is not disputed that a homestead patent and an Original
Certificate of Title was issued to Palanca on February 21, 1977,[40] while the
Complaint was filed only on October 6, 1998. Clearly, the suit was brought way
past ten years from the date of the issuance of the Certificate, the prescriptive
period for reconveyance of fraudulently registered real property.[41]
It must likewise be stressed that Palancas title -- which attained the status of
indefeasibility one year from the issuance of the patent and the Certificate of
Title in February 1977 -- is no longer open to review on the ground of actual
fraud. Ybanez v. Intermediate Appellate Court[42] ruled that a certificate of title,
issued under an administrative proceeding pursuant to a homestead patent, is
as indefeasible as one issued under a judicial registration proceeding one year
from its issuance; provided, however, that the land covered by it is disposable
public land, as in this case.
In Aldovino v. Alunan,[43] the Court has held that when the plaintiffs own
complaint shows clearly that the action has prescribed, such action may be
dismissed even if the defense of prescription has not been invoked by the
defendant. In Gicano v. Gegato,[44] we also explained thus:

"x x x [T]rial courts have authority and discretion to dismiss an action on the
ground of prescription when the parties' pleadings or other facts on record show
it to be indeed time-barred; (Francisco v. Robles, Feb. 15, 1954; Sison v.
McQuaid, 50 O.G. 97; Bambao v. Lednicky, Jan. 28, 1961; Cordova v. Cordova,
Jan. 14, 1958; Convets, Inc. v. NDC, Feb. 28, 1958; 32 SCRA 529; Sinaon v.
Sorongan, 136 SCRA 408); and it may do so on the basis of a motion to dismiss
(Sec. 1,f, Rule 16, Rules of Court), or an answer which sets up such ground as an
affirmative defense (Sec. 5, Rule 16), or even if the ground is alleged after
judgment on the merits, as in a motion for reconsideration (Ferrer v. Ericta, 84
SCRA 705); or even if the defense has not been asserted at all, as where no
statement thereof is found in the pleadings (Garcia v. Mathis, 100 SCRA 250; PNB
v. Pacific Commission House, 27 SCRA 766; Chua Lamco v. Dioso, et al., 97 Phil.
821); or where a defendant has been declared in default (PNB v. Perez, 16 SCRA
270). What is essential only, to repeat, is that the facts demonstrating the lapse
of the prescriptive period be otherwise sufficiently and satisfactorily apparent on
the record; either in the averments of the plaintiff's complaint, or otherwise
established by the evidence."[45](Italics supplied)
 Clearly then, the CA did not err in dismissing the present case. After all, if and
when they are able to do so, courts must endeavor to settle entire controversies
before them to prevent future litigations.[46]
WHEREFORE, the Petition is hereby DENIED, and the assailed
Resolution AFFIRMED. The dismissal of the Complaint in Civil Case No. 3231
is SUSTAINED on the grounds of lack of jurisdiction, failure to state a cause of
action and prescription. Costs against petitioner.
SO ORDERED.

THIRD DIVISION

G.R. No. 147406 July 14, 2008

VENANCIO FIGUEROA y CERVANTES,1 Petitioner,

vs.
PEOPLE OF THE PHILIPPINES, Respondent.

DECISION

NACHURA, J.:

When is a litigant estopped by laches from assailing the jurisdiction of a tribunal?

This is the paramount issue raised in this petition for review of the February 28,
2001 Decision2 of the Court of Appeals (CA) in CA-G.R. CR No. 22697.

Pertinent are the following antecedent facts and proceedings:

On July 8, 1994, an information3 for reckless imprudence resulting in homicide

was filed against the petitioner before the Regional Trial Court (RTC) of Bulacan,
Branch 18.4 The case was docketed as Criminal Case No. 2235-M-94.5 Trial on the
merits ensued and on August 19, 1998, the trial court convicted the petitioner as
charged.6 In his appeal before the CA, the petitioner questioned, among others,
for the first time, the trial court’s jurisdiction.7

The appellate court, however, in the challenged decision, considered the

petitioner to have actively participated in the trial and to have belatedly
attacked the jurisdiction of the RTC; thus, he was already estopped by laches
from asserting the trial court’s lack of jurisdiction. Finding no other ground to
reverse the trial court’s decision, the CA affirmed the petitioner’s conviction but
modified the penalty imposed and the damages awarded.8
Dissatisfied, the petitioner filed the instant petition for review on certiorari raising
the following issues for our resolution:

a. Does the fact that the petitioner failed to raise the issue of jurisdiction
during the trial of this case, which was initiated and filed by the public
prosecutor before the wrong court, constitute laches in relation to the
doctrine laid down in Tijam v. Sibonghanoy, notwithstanding the fact that
said issue was immediately raised in petitioner’s appeal to the Honorable
Court of Appeals? Conversely, does the active participation of the
petitioner in the trial of his case, which is initiated and filed not by him but
by the public prosecutor, amount to estoppel?

b. Does the admission of the petitioner that it is difficult

to immediately stop a bus while it is running at 40 kilometers per hour for
the purpose of avoiding a person who unexpectedly crossed the road,
constitute enough incriminating evidence to warrant his conviction for the
crime charged?

c. Is the Honorable Court of Appeals justified in considering the place of

accident as falling within Item 4 of Section 35 (b) of the Land
Transportation and Traffic Code, and subsequently ruling that the speed
limit thereto is only 20 kilometers per hour, when no evidence whatsoever
to that effect was ever presented by the prosecution during the trial of this
case?

d. Is the Honorable Court of Appeals justified in convicting the petitioner

for homicide through reckless imprudence (the legally correct designation
is "reckless imprudence resulting to homicide") with violation of the Land
Transportation and Traffic Code when the prosecution did not prove this
during the trial and, more importantly, the information filed against the
petitioner does not contain an allegation to that effect?

e. Does the uncontroverted testimony of the defense witness Leonardo

Hernal that the victim unexpectedly crossed the road resulting in him
getting hit by the bus driven by the petitioner not enough evidence to
acquit him of the crime charged?9

Applied uniformly is the familiar rule that the jurisdiction of the court to hear and
decide a case is conferred by the law in force at the time of the institution of the
action, unless such statute provides for a retroactive application thereof.10 In this
case, at the time the criminal information for reckless imprudence resulting in
homicide with violation of the Automobile Law (now Land Transportation and
Traffic Code) was filed, Section 32(2) of Batas Pambansa (B.P.) Blg. 12911 had
already been amended by Republic Act No. 7691.12 The said provision thus
reads:

Sec. 32. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and
Municipal Circuit Trial Courts in Criminal Cases.—Except in cases falling within the
exclusive original jurisdiction of Regional Trial Courts and the Sandiganbayan,
the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial
Courts shall exercise:

xxxx

(2) Exclusive original jurisdiction over all offenses punishable with imprisonment
not exceeding six (6) years irrespective of the amount of fine, and regardless of
other imposable accessory or other penalties, including the civil liability arising
from such offenses or predicated thereon, irrespective of kind, nature, value or
amount thereof: Provided, however, That in offenses involving damage to
property through criminal negligence, they shall have exclusive original
jurisdiction thereof.

As the imposable penalty for the crime charged herein is prision correccional in
its medium and maximum periods or imprisonment for 2 years, 4 months and 1
day to 6 years,13 jurisdiction to hear and try the same is conferred on the
Municipal Trial Courts (MTCs). Clearly, therefore, the RTC of Bulacan does not
have jurisdiction over Criminal Case No. 2235-M-94.

While both the appellate court and the Solicitor General acknowledge this fact,
they nevertheless are of the position that the principle of estoppel by laches has
already precluded the petitioner from questioning the jurisdiction of the RTC—
the trial went on for 4 years with the petitioner actively participating therein and
without him ever raising the jurisdictional infirmity. The petitioner, for his part,
counters that the lack of jurisdiction of a court over the subject matter may be
raised at any time even for the first time on appeal. As undue delay is further
absent herein, the principle of laches will not be applicable.

To settle once and for all this problem of jurisdiction vis-à-vis estoppel by laches,
which continuously confounds the bench and the bar, we shall analyze the
various Court decisions on the matter.

As early as 1901, this Court has declared that unless jurisdiction has been
conferred by some legislative act, no court or tribunal can act on a matter
submitted to it.14 We went on to state in U.S. v. De La Santa15 that:

It has been frequently held that a lack of jurisdiction over the subject-matter is
fatal, and subject to objection at any stage of the proceedings, either in the
court below or on appeal (Ency. of Pl. & Pr., vol. 12, p. 189, and large array of
cases there cited), and indeed, where the subject-matter is not within the
jurisdiction, the court may dismiss the proceeding ex mero motu. (4 Ill., 133; 190
Ind., 79; Chipman vs. Waterbury, 59 Conn., 496.)

Jurisdiction over the subject-matter in a judicial proceeding is conferred by the

sovereign authority which organizes the court; it is given only by law and in the
manner prescribed by law and an objection based on the lack of such
jurisdiction can not be waived by the parties. x x x16

Later, in People v. Casiano,17 the Court explained:

4. The operation of the principle of estoppel on the question of jurisdiction

seemingly depends upon whether the lower court actually had jurisdiction or
not. If it had no jurisdiction, but the case was tried and decided upon the theory
that it had jurisdiction, the parties are not barred, on appeal, from assailing such
jurisdiction, for the same "must exist as a matter of law, and may not be
conferred by consent of the parties or by estoppel" (5 C.J.S., 861-863). However,
if the lower court had jurisdiction, and the case was heard and decided upon a
given theory, such, for instance, as that the court had no jurisdiction, the party
who induced it to adopt such theory will not be permitted, on appeal, to
assume an inconsistent position—that the lower court had jurisdiction. Here, the
principle of estoppel applies. The rule that jurisdiction is conferred by law, and
does not depend upon the will of the parties, has no bearing thereon. Thus,
Corpus Juris Secundum says:

Where accused has secured a decision that the indictment is void, or has been
granted an instruction based on its defective character directing the jury to
acquit, he is estopped, when subsequently indicted, to assert that the former
indictment was valid. In such case, there may be a new prosecution whether
the indictment in the former prosecution was good or bad. Similarly, where, after
the jury was impaneled and sworn, the court on accused's motion quashed the
information on the erroneous assumption that the court had no jurisdiction,
accused cannot successfully plead former jeopardy to a new information. x x x
(22 C.J.S., sec. 252, pp. 388-389; italics ours.)

Where accused procured a prior conviction to be set aside on the ground that
the court was without jurisdiction, he is estopped subsequently to assert, in
support of a defense of previous jeopardy, that such court had jurisdiction." (22
C.J.S. p. 378.)18

But in Pindañgan Agricultural Co., Inc. v. Dans,19 the Court, in not sustaining the
plea of lack of jurisdiction by the plaintiff-appellee therein, made the following
observations:
It is surprising why it is only now, after the decision has been rendered, that the
plaintiff-appellee presents the question of this Court’s jurisdiction over the case.
Republic Act No. 2613 was enacted on August 1, 1959. This case was argued on
January 29, 1960. Notwithstanding this fact, the jurisdiction of this Court was
never impugned until the adverse decision of this Court was handed down. The
conduct of counsel leads us to believe that they must have always been of the
belief that notwithstanding said enactment of Republic Act 2613 this Court has
jurisdiction of the case, such conduct being born out of a conviction that the
actual real value of the properties in question actually exceeds the jurisdictional
amount of this Court (over ₱200,000). Our minute resolution in G.R. No. L-10096,
Hyson Tan, et al. vs. Filipinas Compaña de Seguros, et al., of March 23, 1956, a
parallel case, is applicable to the conduct of plaintiff-appellee in this case, thus:

x x x that an appellant who files his brief and submits his case to the Court of
Appeals for decision, without questioning the latter’s jurisdiction until decision is
rendered therein, should be considered as having voluntarily waived so much of
his claim as would exceed the jurisdiction of said Appellate Court; for the reason
that a contrary rule would encourage the undesirable practice of appellants
submitting their cases for decision to the Court of Appeals in expectation of
favorable judgment, but with intent of attacking its jurisdiction should the
decision be unfavorable: x x x20

Then came our ruling in Tijam v. Sibonghanoy21 that a party may be barred by
laches from invoking lack of jurisdiction at a late hour for the purpose of
annulling everything done in the case with the active participation of said party
invoking the plea. We expounded, thus:

A party may be estopped or barred from raising a question in different ways

and for different reasons. Thus, we speak of estoppel in pais, of estoppel by
deed or by record, and of estoppel by laches.

Laches, in a general sense, is failure or neglect, for an unreasonable and

unexplained length of time, to do that which, by exercising due diligence, could
or should have been done earlier; it is negligence or omission to assert a right
within a reasonable time, warranting a presumption that the party entitled to
assert it either has abandoned it or declined to assert it.

The doctrine of laches or of "stale demands" is based upon grounds of public

policy which requires, for the peace of society, the discouragement of stale
claims and, unlike the statute of limitations, is not a mere question of time but is
principally a question of the inequity or unfairness of permitting a right or claim
to be enforced or asserted.
It has been held that a party cannot invoke the jurisdiction of a court to secure
affirmative relief against his opponent and, after obtaining or failing to obtain
such relief, repudiate or question that same jurisdiction (Dean vs. Dean, 136 Or.
694, 86 A.L.R. 79). In the case just cited, by way of explaining the rule, it was
further said that the question whether the court had jurisdiction either of the
subject matter of the action or of the parties was not important in such cases
because the party is barred from such conduct not because the judgment or
order of the court is valid and conclusive as an adjudication, but for the reason
that such a practice cannot be tolerated—obviously for reasons of public
policy.

Furthermore, it has also been held that after voluntarily submitting a cause and
encountering an adverse decision on the merits, it is too late for the loser to
question the jurisdiction or power of the court (Pease vs. Rathbun-Jones etc., 243
U.S. 273, 61 L. Ed. 715, 37 S.Ct. 283; St. Louis etc. vs. McBride, 141 U.S. 127, 35 L. Ed.
659). And in Littleton vs. Burgess, 16 Wyo. 58, the Court said that it is not right for a
party who has affirmed and invoked the jurisdiction of a court in a particular
matter to secure an affirmative relief, to afterwards deny that same jurisdiction
to escape a penalty.

Upon this same principle is what We said in the three cases mentioned in the
resolution of the Court of Appeals of May 20, 1963 (supra)—to the effect that we
frown upon the "undesirable practice" of a party submitting his case for decision
and then accepting the judgment, only if favorable, and attacking it for lack of
jurisdiction, when adverse—as well as in Pindañgan etc. vs. Dans et al., G.R. L-
14591, September 26, 1962; Montelibano et al. vs. Bacolod-Murcia Milling Co.,
Inc., G.R. L-15092; Young Men Labor Union etc. vs. The Court of Industrial
Relations et al., G.R. L-20307, Feb. 26, 1965, and Mejia vs. Lucas, 100 Phil. p. 277.

The facts of this case show that from the time the Surety became a quasi-party
on July 31, 1948, it could have raised the question of the lack of jurisdiction of
the Court of First Instance of Cebu to take cognizance of the present action by
reason of the sum of money involved which, according to the law then in force,
was within the original exclusive jurisdiction of inferior courts. It failed to do so.
Instead, at several stages of the proceedings in the court a quo, as well as in the
Court of Appeals, it invoked the jurisdiction of said courts to obtain affirmative
relief and submitted its case for a final adjudication on the merits. It was only
after an adverse decision was rendered by the Court of Appeals that it finally
woke up to raise the question of jurisdiction. Were we to sanction such conduct
on its part, We would in effect be declaring as useless all the proceedings had in
the present case since it was commenced on July 19, 1948 and compel the
judgment creditors to go up their Calvary once more. The inequity and
unfairness of this is not only patent but revolting.22
For quite a time since we made this pronouncement in Sibonghanoy, courts and
tribunals, in resolving issues that involve the belated invocation of lack of
jurisdiction, have applied the principle of estoppel by laches. Thus, in Calimlim v.
Ramirez,23 we pointed out that Sibonghanoy was developing into a general rule
rather than the exception:

A rule that had been settled by unquestioned acceptance and upheld in

decisions so numerous to cite is that the jurisdiction of a court over the subject-
matter of the action is a matter of law and may not be conferred by consent or
agreement of the parties. The lack of jurisdiction of a court may be raised at any
stage of the proceedings, even on appeal. This doctrine has been qualified by
recent pronouncements which stemmed principally from the ruling in the cited
case of Sibonghanoy. It is to be regretted, however, that the holding in said
case had been applied to situations which were obviously not contemplated
therein. The exceptional circumstance involved in Sibonghanoy which justified
the departure from the accepted concept of non-waivability of objection to
jurisdiction has been ignored and, instead a blanket doctrine had been
repeatedly upheld that rendered the supposed ruling in Sibonghanoy not as the
exception, but rather the general rule, virtually overthrowing altogether the
time-honored principle that the issue of jurisdiction is not lost by waiver or by
estoppel.

In Sibonghanoy, the defense of lack of jurisdiction of the court that rendered the
questioned ruling was held to be barred by estoppel by laches. It was ruled that
the lack of jurisdiction having been raised for the first time in a motion to dismiss
filed almost fifteen (15) years after the questioned ruling had been rendered,
such a plea may no longer be raised for being barred by laches. As defined in
said case, laches is "failure or neglect, for an unreasonable and unexplained
length of time, to do that which, by exercising due diligence, could or should
have been done earlier; it is negligence or omission to assert a right within a
reasonable time, warranting a presumption that the party entitled to assert has
abandoned it or declined to assert it.24

In Calimlim, despite the fact that the one who benefited from the plea of lack of
jurisdiction was the one who invoked the court’s jurisdiction, and who later
obtained an adverse judgment therein, we refused to apply the ruling in
Sibonghanoy. The Court accorded supremacy to the time-honored principle
that the issue of jurisdiction is not lost by waiver or by estoppel.

Yet, in subsequent cases decided after Calimlim, which by sheer volume are too
plentiful to mention, the Sibonghanoy doctrine, as foretold in Calimlim, became
the rule rather than the exception. As such, in Soliven v. Fastforms Philippines,
Inc.,25 the Court ruled:
While it is true that jurisdiction may be raised at any time, "this rule presupposes
that estoppel has not supervened." In the instant case, respondent actively
participated in all stages of the proceedings before the trial court and invoked
its authority by asking for an affirmative relief. Clearly, respondent is estopped
from challenging the trial court’s jurisdiction, especially when an adverse
judgment has been rendered. In PNOC Shipping and Transport Corporation vs.
Court of Appeals, we held:

Moreover, we note that petitioner did not question at all the jurisdiction of the
lower court x x x in its answers to both the amended complaint and the second
amended complaint. It did so only in its motion for reconsideration of the
decision of the lower court after it had received an adverse decision. As this
Court held in Pantranco North Express, Inc. vs. Court of Appeals (G.R. No.
105180, July 5, 1993, 224 SCRA 477, 491), participation in all stages of the case
before the trial court, that included invoking its authority in asking for affirmative
relief, effectively barred petitioner by estoppel from challenging the court’s
jurisdiction. Notably, from the time it filed its answer to the second amended
complaint on April 16, 1985, petitioner did not question the lower court’s
jurisdiction. It was only on December 29, 1989 when it filed its motion for
reconsideration of the lower court’s decision that petitioner raised the question
of the lower court’s lack of jurisdiction. Petitioner thus foreclosed its right to raise
the issue of jurisdiction by its own inaction. (italics ours)

Similarly, in the subsequent case of Sta. Lucia Realty and Development, Inc. vs.
Cabrigas, we ruled:

In the case at bar, it was found by the trial court in its 30 September 1996
decision in LCR Case No. Q-60161(93) that private respondents (who filed the
petition for reconstitution of titles) failed to comply with both sections 12 and 13
of RA 26 and therefore, it had no jurisdiction over the subject matter of the case.
However, private respondents never questioned the trial court’s jurisdiction over
its petition for reconstitution throughout the duration of LCR Case No. Q-
60161(93). On the contrary, private respondents actively participated in the
reconstitution proceedings by filing pleadings and presenting its evidence. They
invoked the trial court’s jurisdiction in order to obtain affirmative relief – the
reconstitution of their titles. Private respondents have thus foreclosed their right
to raise the issue of jurisdiction by their own actions.

The Court has constantly upheld the doctrine that while jurisdiction may be
assailed at any stage, a litigant’s participation in all stages of the case before
the trial court, including the invocation of its authority in asking for affirmative
relief, bars such party from challenging the court’s jurisdiction (PNOC Shipping
and Transport Corporation vs. Court of Appeals, 297 SCRA 402 [1998]). A party
cannot invoke the jurisdiction of a court to secure affirmative relief against his
opponent and after obtaining or failing to obtain such relief, repudiate or
question that same jurisdiction (Asset Privatization Trust vs. Court of Appeals, 300
SCRA 579 [1998]; Province of Bulacan vs. Court of Appeals, 299 SCRA 442
[1998]). The Court frowns upon the undesirable practice of a party participating
in the proceedings and submitting his case for decision and then accepting
judgment, only if favorable, and attacking it for lack of jurisdiction, when
adverse (Producers Bank of the Philippines vs. NLRC, 298 SCRA 517 [1998], citing
Ilocos Sur Electric Cooperative, Inc. vs. NLRC, 241 SCRA 36 [1995]). (italics ours)26

Noteworthy, however, is that, in the 2005 case of Metromedia Times Corporation

v. Pastorin,27 where the issue of lack of jurisdiction was raised only in the National
Labor Relations Commission (NLRC) on appeal, we stated, after examining the
doctrines of jurisdiction vis-à-vis estoppel, that the ruling in Sibonghanoy stands
as an exception, rather than the general rule. Metromedia, thus, was not
estopped from assailing the jurisdiction of the labor arbiter before the NLRC on
appeal.281avvphi1

Later, in Francel Realty Corporation v. Sycip,29 the Court clarified that:

Petitioner argues that the CA’s affirmation of the trial court’s dismissal of its case
was erroneous, considering that a full-blown trial had already been conducted.
In effect, it contends that lack of jurisdiction could no longer be used as a
ground for dismissal after trial had ensued and ended.

The above argument is anchored on estoppel by laches, which has been used
quite successfully in a number of cases to thwart dismissals based on lack of
jurisdiction. Tijam v. Sibonghanoy, in which this doctrine was espoused, held that
a party may be barred from questioning a court’s jurisdiction after being
invoked to secure affirmative relief against its opponent. In fine, laches prevents
the issue of lack of jurisdiction from being raised for the first time on appeal by a
litigant whose purpose is to annul everything done in a trial in which it has
actively participated.

Laches is defined as the "failure or neglect for an unreasonable and

unexplained length of time, to do that which, by exercising due diligence, could
or should have been done earlier; it is negligence or omission to assert a right
within a reasonable time, warranting a presumption that the party entitled to
assert it either has abandoned it or declined to assert it."

The ruling in Sibonghanoy on the matter of jurisdiction is, however, the exception
rather than the rule.1avvphi1 Estoppel by laches may be invoked to bar the
issue of lack of jurisdiction only in cases in which the factual milieu is analogous
to that in the cited case. In such controversies, laches should be clearly present;
that is, lack of jurisdiction must have been raised so belatedly as to warrant the
presumption that the party entitled to assert it had abandoned or declined to
assert it. That Sibonghanoy applies only to exceptional circumstances is clarified
in Calimlim v. Ramirez, which we quote:

A rule that had been settled by unquestioned acceptance and upheld in

decisions so numerous to cite is that the jurisdiction of a court over the subject-
matter of the action is a matter of law and may not be conferred by consent or
agreement of the parties. The lack of jurisdiction of a court may be raised at any
stage of the proceedings, even on appeal. This doctrine has been qualified by
recent pronouncements which stemmed principally from the ruling in the cited
case of Sibonghanoy. It is to be regretted, however, that the holding in said
case had been applied to situations which were obviously not contemplated
therein. The exceptional circumstance involved in Sibonghanoy which justified
the departure from the accepted concept of non-waivability of objection to
jurisdiction has been ignored and, instead a blanket doctrine had been
repeatedly upheld that rendered the supposed ruling in Sibonghanoy not as the
exception, but rather the general rule, virtually overthrowing altogether the
time-honored principle that the issue of jurisdiction is not lost by waiver or by
estoppel.

Indeed, the general rule remains: a court’s lack of jurisdiction may be raised at
any stage of the proceedings, even on appeal. The reason is that jurisdiction is
conferred by law, and lack of it affects the very authority of the court to take
cognizance of and to render judgment on the action. Moreover, jurisdiction is
determined by the averments of the complaint, not by the defenses contained
in the answer.30

Also, in Mangaliag v. Catubig-Pastoral,31 even if the pleader of lack of

jurisdiction actively took part in the trial proceedings by presenting a witness to
seek exoneration, the Court, reiterating the doctrine in Calimlim, said:

Private respondent argues that the defense of lack of jurisdiction may be

waived by estoppel through active participation in the trial. Such, however, is
not the general rule but an exception, best characterized by the peculiar
circumstances in Tijam vs. Sibonghanoy. In Sibonghanoy, the party invoking lack
of jurisdiction did so only after fifteen years and at a stage when the
proceedings had already been elevated to the CA. Sibonghanoy is an
exceptional case because of the presence of laches, which was defined
therein as failure or neglect for an unreasonable and unexplained length of time
to do that which, by exercising due diligence, could or should have been done
earlier; it is the negligence or omission to assert a right within a reasonable time,
warranting a presumption that the party entitled to assert has abandoned it or
declined to assert it.32
And in the more recent Regalado v. Go,33 the Court again emphasized that
laches should be clearly present for the Sibonghanoy doctrine to be applicable,
thus:

Laches is defined as the "failure or neglect for an unreasonable and

unexplained length of time, to do that which, by exercising due diligence, could
or should have been done earlier, it is negligence or omission to assert a right
within a reasonable length of time, warranting a presumption that the party
entitled to assert it either has abandoned it or declined to assert it."

The ruling in People v. Regalario that was based on the landmark doctrine
enunciated in Tijam v. Sibonghanoy on the matter of jurisdiction by estoppel is
the exception rather than the rule. Estoppel by laches may be invoked to bar
the issue of lack of jurisdiction only in cases in which the factual milieu is
analogous to that in the cited case. In such controversies, laches should have
been clearly present; that is, lack of jurisdiction must have been raised so
belatedly as to warrant the presumption that the party entitled to assert it had
abandoned or declined to assert it.

In Sibonghanoy, the defense of lack of jurisdiction was raised for the first time in
a motion to dismiss filed by the Surety almost 15 years after the questioned ruling
had been rendered. At several stages of the proceedings, in the court a quo as
well as in the Court of Appeals, the Surety invoked the jurisdiction of the said
courts to obtain affirmative relief and submitted its case for final adjudication on
the merits. It was only when the adverse decision was rendered by the Court of
Appeals that it finally woke up to raise the question of jurisdiction.

Clearly, the factual settings attendant in Sibonghanoy are not present in the
case at bar. Petitioner Atty. Regalado, after the receipt of the Court of Appeals
resolution finding her guilty of contempt, promptly filed a Motion for
Reconsideration assailing the said court’s jurisdiction based on procedural
infirmity in initiating the action. Her compliance with the appellate court’s
directive to show cause why she should not be cited for contempt and filing a
single piece of pleading to that effect could not be considered as an active
participation in the judicial proceedings so as to take the case within the milieu
of Sibonghanoy. Rather, it is the natural fear to disobey the mandate of the
court that could lead to dire consequences that impelled her to comply.34

The Court, thus, wavered on when to apply the exceptional circumstance in

Sibonghanoy and on when to apply the general rule enunciated as early as in
De La Santa and expounded at length in Calimlim. The general rule should,
however, be, as it has always been, that the issue of jurisdiction may be raised at
any stage of the proceedings, even on appeal, and is not lost by waiver or by
estoppel. Estoppel by laches, to bar a litigant from asserting the court’s absence
or lack of jurisdiction, only supervenes in exceptional cases similar to the factual
milieu of Tijam v. Sibonghanoy. Indeed, the fact that a person attempts to
invoke unauthorized jurisdiction of a court does not estop him from thereafter
challenging its jurisdiction over the subject matter, since such jurisdiction must
arise by law and not by mere consent of the parties. This is especially true where
the person seeking to invoke unauthorized jurisdiction of the court does not
thereby secure any advantage or the adverse party does not suffer any harm.35

Applying the said doctrine to the instant case, the petitioner is in no way
estopped by laches in assailing the jurisdiction of the RTC, considering that he
raised the lack thereof in his appeal before the appellate court. At that time, no
considerable period had yet elapsed for laches to attach. True, delay alone,
though unreasonable, will not sustain the defense of "estoppel by laches" unless
it further appears that the party, knowing his rights, has not sought to enforce
them until the condition of the party pleading laches has in good faith become
so changed that he cannot be restored to his former state, if the rights be then
enforced, due to loss of evidence, change of title, intervention of equities, and
other causes.36 In applying the principle of estoppel by laches in the exceptional
case of Sibonghanoy, the Court therein considered the patent and revolting
inequity and unfairness of having the judgment creditors go up their Calvary
once more after more or less 15 years.37 The same, however, does not obtain in
the instant case.

We note at this point that estoppel, being in the nature of a forfeiture, is not
favored by law. It is to be applied rarely—only from necessity, and only in
extraordinary circumstances. The doctrine must be applied with great care and
the equity must be strong in its favor.38 When misapplied, the doctrine of
estoppel may be a most effective weapon for the accomplishment of
injustice.39 Moreover, a judgment rendered without jurisdiction over the subject
matter is void.40 Hence, the Revised Rules of Court provides for remedies in
attacking judgments rendered by courts or tribunals that have no jurisdiction
over the concerned cases. No laches will even attach when the judgment is null
and void for want of jurisdiction.41 As we have stated in Heirs of Julian Dela Cruz
and Leonora Talaro v. Heirs of Alberto Cruz,42

It is axiomatic that the jurisdiction of a tribunal, including a quasi-judicial officer

or government agency, over the nature and subject matter of a petition or
complaint is determined by the material allegations therein and the character
of the relief prayed for, irrespective of whether the petitioner or complainant is
entitled to any or all such reliefs. Jurisdiction over the nature and subject matter
of an action is conferred by the Constitution and the law, and not by the
consent or waiver of the parties where the court otherwise would have no
jurisdiction over the nature or subject matter of the action. Nor can it be
acquired through, or waived by, any act or omission of the parties. Moreover,
estoppel does not apply to confer jurisdiction to a tribunal that has none over
the cause of action. x x x

Indeed, the jurisdiction of the court or tribunal is not affected by the defenses or
theories set up by the defendant or respondent in his answer or motion to
dismiss. Jurisdiction should be determined by considering not only the status or
the relationship of the parties but also the nature of the issues or questions that is
the subject of the controversy. x x x x The proceedings before a court or tribunal
without jurisdiction, including its decision, are null and void, hence, susceptible
to direct and collateral attacks.43

With the above considerations, we find it unnecessary to resolve the other issues
raised in the petition.

WHEREFORE, premises considered, the petition for review on certiorari is

GRANTED. Criminal Case No. 2235-M-94 is hereby DISMISSED without prejudice.

SO ORDERED.

THIRD DIVISION

G.R. No. 162059 January 22, 2008

HANNAH EUNICE D. SERANA, petitioner,

vs.
SANDIGANBAYAN and PEOPLE OF THE PHILIPPINES, respondents.

DECISION

REYES, R.T., J.:

CAN the Sandiganbayan try a government scholaran** accused, along with her
brother, of swindling government funds?

MAAARI bang litisin ng Sandiganbayan ang isang iskolar ng bayan, at ang

kanyang kapatid, na kapwa pinararatangan ng estafa ng pera ng bayan?

The jurisdictional question is posed in this petition for certiorari assailing the
Resolutions1 of the Sandiganbayan, Fifth Division, denying petitioner’s motion to
quash the information and her motion for reconsideration.

The Antecedents
Petitioner Hannah Eunice D. Serana was a senior student of the University of the
Philippines-Cebu. A student of a state university is known as a government
scholar. She was appointed by then President Joseph Estrada on December 21,
1999 as a student regent of UP, to serve a one-year term starting January 1, 2000
and ending on December 31, 2000.

In the early part of 2000, petitioner discussed with President Estrada the
renovation of Vinzons Hall Annex in UP Diliman.2 On September 4, 2000,
petitioner, with her siblings and relatives, registered with the Securities and
Exchange Commission the Office of the Student Regent Foundation, Inc.
(OSRFI).3

One of the projects of the OSRFI was the renovation of the Vinzons Hall
Annex.4 President Estrada gave Fifteen Million Pesos (P15,000,000.00) to the OSRFI
as financial assistance for the proposed renovation. The source of the funds,
according to the information, was the Office of the President.

The renovation of Vinzons Hall Annex failed to materialize.5 The succeeding

student regent, Kristine Clare Bugayong, and Christine Jill De Guzman, Secretary
General of the KASAMA sa U.P., a system-wide alliance of student councils
within the state university, consequently filed a complaint for Malversation of
Public Funds and Property with the Office of the Ombudsman.6

On July 3, 2003, the Ombudsman, after due investigation, found probable cause
to indict petitioner and her brother Jade Ian D. Serana for estafa, docketed as
Criminal Case No. 27819 of the Sandiganbayan.7 The Information reads:

The undersigned Special Prosecution Officer III, Office of the Special

Prosecutor, hereby accuses HANNAH EUNICE D. SERANA and JADE IAN D.
SERANA of the crime of Estafa, defined and penalized under Paragraph
2(a), Article 315 of the Revised Penal Code, as amended committed as
follows:

That on October, 24, 2000, or sometime prior or subsequent thereto, in

Quezon City, Metro Manila, Philippines, and within the jurisdiction of this
Honorable Court, above-named accused, HANNAH EUNICE D. SERANA, a
high-ranking public officer, being then the Student Regent of the
University of the Philippines, Diliman, Quezon City, while in the
performance of her official functions, committing the offense in relation to
her office and taking advantage of her position, with intent to
gain, conspiring with her brother, JADE IAN D. SERANA, a private
individual, did then and there wilfully, unlawfully and feloniously defraud
the government by falsely and fraudulently representing to former
President Joseph Ejercito Estrada that the renovation of the Vinzons Hall of
 the University of the Philippines will be renovated and renamed as
"President Joseph Ejercito Estrada Student Hall," and for which purpose
accused HANNAH EUNICE D. SERANA requested the amount of FIFTEEN
MILLION PESOS (P15,000,000.00), Philippine Currency, from the Office of
the President, and the latter relying and believing on said false pretenses
and misrepresentation gave and delivered to said accused Land Bank
Check No. 91353 dated October 24, 2000 in the amount of FIFTEEN
MILLION PESOS (P15,000,000.00), which check was subsequently encashed
by accused Jade Ian D. Serana on October 25, 2000 and
misappropriated for their personal use and benefit, and despite repeated
demands made upon the accused for them to return aforesaid amount,
the said accused failed and refused to do so to the damage and
prejudice of the government in the aforesaid amount.

CONTRARY TO LAW. (Underscoring supplied)

Petitioner moved to quash the information. She claimed that the

Sandiganbayan does not have any jurisdiction over the offense charged or over
her person, in her capacity as UP student regent.

Petitioner claimed that Republic Act (R.A.) No. 3019, as amended by R.A. No.
8249, enumerates the crimes or offenses over which the Sandiganbayan has
jurisdiction.8 It has no jurisdiction over the crime of estafa.9 It only has jurisdiction
over crimes covered by Title VII, Chapter II, Section 2 (Crimes Committed by
Public Officers), Book II of the Revised Penal Code (RPC). Estafa falling under
Title X, Chapter VI (Crimes Against Property), Book II of the RPC is not within the
Sandiganbayan’s jurisdiction.

She also argued that it was President Estrada, not the government, that was
duped. Even assuming that she received the P15,000,000.00, that amount came
from Estrada, not from the coffers of the government.10

Petitioner likewise posited that the Sandiganbayan had no jurisdiction over her
person. As a student regent, she was not a public officer since she merely
represented her peers, in contrast to the other regents who held their positions in
an ex officio capacity. She addsed that she was a simple student and did not
receive any salary as a student regent.

She further contended that she had no power or authority to receive monies or
funds. Such power was vested with the Board of Regents (BOR) as a whole.
Since it was not alleged in the information that it was among her functions or
duties to receive funds, or that the crime was committed in connection with her
official functions, the same is beyond the jurisdiction of the Sandiganbayan
citing the case of Soller v. Sandiganbayan.11
The Ombudsman opposed the motion.12 It disputed petitioner’s interpretation of
the law. Section 4(b) of Presidential Decree (P.D.) No. 1606 clearly contains
the catch -all phrase "in relation to office," thus, the Sandiganbayan has
jurisdiction over the charges against petitioner. In the same breath, the
prosecution countered that the source of the money is a matter of defense. It
should be threshed out during a full-blown trial.13

According to the Ombudsman, petitioner, despite her protestations, iwas a

public officer. As a member of the BOR, she hads the general powers of
administration and exerciseds the corporate powers of UP. Based on Mechem’s
definition of a public office, petitioner’s stance that she was not compensated,
hence, not a public officer, is erroneous. Compensation is not an essential part
of public office. Parenthetically, compensation has been interpreted to include
allowances. By this definition, petitioner was compensated.14

Sandiganbayan Disposition

In a Resolution dated November 14, 2003, the Sandiganbayan denied

petitioner’s motion for lack of merit.15 It ratiocinated:

The focal point in controversy is the jurisdiction of the Sandiganbayan over

this case.

It is extremely erroneous to hold that only criminal offenses covered by

Chapter II, Section 2, Title VII, Book II of the Revised Penal Code are within
the jurisdiction of this Court. As correctly pointed out by the prosecution,
Section 4(b) of R.A. 8249 provides that the Sandiganbayan also has
jurisdiction over other offenses committed by public officials and
employees in relation to their office. From this provision, there is no single
doubt that this Court has jurisdiction over the offense of estafa committed
by a public official in relation to his office.

Accused-movant’s claim that being merely a member in representation

of the student body, she was never a public officer since she never
received any compensation nor does she fall under Salary Grade 27, is of
no moment, in view of the express provision of Section 4 of Republic Act
No. 8249 which provides:

Sec. 4. Jurisdiction – The Sandiganbayan shall exercise exclusive original

jurisdiction in all cases involving:

(A) x x x
(1) Officials of the executive branch occupying the positions of regional
director and higher, otherwise classified as Grade "27" and higher, of the
Compensation and Position Classification Act of 1989 (Republic Act No.
6758), specifically including:

xxxx

(g) Presidents, directors or trustees, or managers of government-owned or

controlled corporations, state universities or educational institutions or
foundations. (Italics supplied)

It is very clear from the aforequoted provision that the Sandiganbayan

has original exclusive jurisdiction over all offenses involving the officials
enumerated in subsection (g), irrespective of their salary grades, because
the primordial consideration in the inclusion of these officials is the nature
of their responsibilities and functions.

Is accused-movant included in the contemplated provision of law?

A meticulous review of the existing Charter of the University of the

Philippines reveals that the Board of Regents, to which accused-movant
belongs, exclusively exercises the general powers of administration and
corporate powers in the university, such as: 1) To receive and appropriate
to the ends specified by law such sums as may be provided by law for the
support of the university; 2) To prescribe rules for its own government and
to enact for the government of the university such general ordinances
and regulations, not contrary to law, as are consistent with the purposes of
the university; and 3) To appoint, on recommendation of the President of
the University, professors, instructors, lecturers and other employees of the
University; to fix their compensation, hours of service, and such other
duties and conditions as it may deem proper; to grant to them in its
discretion leave of absence under such regulations as it may promulgate,
any other provisions of law to the contrary notwithstanding, and to
remove them for cause after an investigation and hearing shall have
been had.

It is well-established in corporation law that the corporation can act only

through its board of directors, or board of trustees in the case of non-stock
corporations. The board of directors or trustees, therefore, is the governing
body of the corporation.

It is unmistakably evident that the Board of Regents of the University of the

Philippines is performing functions similar to those of the Board of Trustees
of a non-stock corporation. This draws to fore the conclusion that being a
 member of such board, accused-movant undoubtedly falls within the
category of public officials upon whom this Court is vested with original
exclusive jurisdiction, regardless of the fact that she does not occupy a
position classified as Salary Grade 27 or higher under the Compensation
and Position Classification Act of 1989.

Finally, this court finds that accused-movant’s contention that the same
of P15 Million was received from former President Estrada and not from the
coffers of the government, is a matter a defense that should be properly
ventilated during the trial on the merits of this case.16

On November 19, 2003, petitioner filed a motion for reconsideration.17 The

motion was denied with finality in a Resolution dated February 4, 2004.18

Issue

Petitioner is now before this Court, contending that "THE RESPONDENT COURT
COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK AND/OR
EXCESS OF JURISDICTION IN NOT QUASHING THE INFORMATION AND DISMISING
THE CASE NOTWITHSTANDING THAT IS HAS NO JURISDICTION OVER THE OFFENSE
CHARGED IN THE INFORMATION."19

In her discussion, she reiterates her four-fold argument below, namely: (a) the
Sandiganbayan has no jurisdiction over estafa; (b) petitioner is not a public
officer with Salary Grade 27 and she paid her tuition fees; (c) the offense
charged was not committed in relation to her office; (d) the funds in question
personally came from President Estrada, not from the government.

Our Ruling

The petition cannot be granted.

Preliminarily, the denial of a motion to

quash is not correctible by certiorari.

We would ordinarily dismiss this petition for certiorari outright on procedural

grounds. Well-established is the rule that when a motion to quash in a criminal
case is denied, the remedy is not a petition for certiorari, but for petitioners to go
to trial, without prejudice to reiterating the special defenses invoked in their
motion to quash.20 Remedial measures as regards interlocutory orders, such as a
motion to quash, are frowned upon and often dismissed.21 The evident reason
for this rule is to avoid multiplicity of appeals in a single action.22
In Newsweek, Inc. v. Intermediate Appellate Court,23 the Court clearly explained
and illustrated the rule and the exceptions, thus:

As a general rule, an order denying a motion to dismiss is merely

interlocutory and cannot be subject of appeal until final judgment or
order is rendered. (Sec. 2 of Rule 41). The ordinary procedure to be
followed in such a case is to file an answer, go to trial and if the decision is
adverse, reiterate the issue on appeal from the final judgment. The same
rule applies to an order denying a motion to quash, except that instead of
filing an answer a plea is entered and no appeal lies from a judgment of
acquittal.

This general rule is subject to certain exceptions. If the court, in denying

the motion to dismiss or motion to quash, acts without or in excess of
jurisdiction or with grave abuse of discretion, then certiorari or prohibition
lies. The reason is that it would be unfair to require the defendant or
accused to undergo the ordeal and expense of a trial if the court has no
jurisdiction over the subject matter or offense, or is not the court of proper
venue, or if the denial of the motion to dismiss or motion to quash is made
with grave abuse of discretion or a whimsical and capricious exercise of
judgment. In such cases, the ordinary remedy of appeal cannot be plain
and adequate. The following are a few examples of the exceptions to the
general rule.

In De Jesus v. Garcia (19 SCRA 554), upon the denial of a motion to dismiss
based on lack of jurisdiction over the subject matter, this Court granted
the petition for certiorari and prohibition against the City Court of Manila
and directed the respondent court to dismiss the case.

In Lopez v. City Judge (18 SCRA 616), upon the denial of a motion to
quash based on lack of jurisdiction over the offense, this Court granted
the petition for prohibition and enjoined the respondent court from further
proceeding in the case.

In Enriquez v. Macadaeg (84 Phil. 674), upon the denial of a motion to

dismiss based on improper venue, this Court granted the petition for
prohibition and enjoined the respondent judge from taking cognizance of
the case except to dismiss the same.

In Manalo v. Mariano (69 SCRA 80), upon the denial of a motion to dismiss
based on bar by prior judgment, this Court granted the petition
for certiorari and directed the respondent judge to dismiss the case.
 In Yuviengco v. Dacuycuy (105 SCRA 668), upon the denial of a motion to
dismiss based on the Statute of Frauds, this Court granted the petition
for certiorari and dismissed the amended complaint.

In Tacas v. Cariaso (72 SCRA 527), this Court granted the petition
for certiorari after the motion to quash based on double jeopardy was
denied by respondent judge and ordered him to desist from further action
in the criminal case except to dismiss the same.

In People v. Ramos (83 SCRA 11), the order denying the motion to quash
based on prescription was set aside on certiorari and the criminal case
was dismissed by this Court.24

We do not find the Sandiganbayan to have committed a grave abuse of

discretion.

The jurisdiction of the Sandiganbayan is

set by P.D. No. 1606, as amended, not by
R.A. No. 3019, as amended.

We first address petitioner’s contention that the jurisdiction of the

Sandiganbayan is determined by Section 4 of R.A. No. 3019 (The Anti-Graft and
Corrupt Practices Act, as amended). We note that petitioner refers to Section 4
of the said law yet quotes Section 4 of P.D. No. 1606, as amended, in her motion
to quash before the Sandiganbayan.25She repeats the reference in the instant
petition for certiorari26 and in her memorandum of authorities.27

We cannot bring ourselves to write this off as a mere clerical or typographical

error. It bears stressing that petitioner repeated this claim twice despite
corrections made by the Sandiganbayan.28

Her claim has no basis in law. It is P.D. No. 1606, as amended, rather than R.A.
No. 3019, as amended, that determines the jurisdiction of the Sandiganbayan. A
brief legislative history of the statute creating the Sandiganbayan is in order. The
Sandiganbayan was created by P.D. No. 1486, promulgated by then President
Ferdinand E. Marcos on June 11, 1978. It was promulgated to attain the highest
norms of official conduct required of public officers and employees, based on
the concept that public officers and employees shall serve with the highest
degree of responsibility, integrity, loyalty and efficiency and shall remain at all
times accountable to the people.29

P.D. No. 1486 was, in turn, amended by P.D. No. 1606 which was promulgated
on December 10, 1978. P.D. No. 1606 expanded the jurisdiction of the
Sandiganbayan.30
P.D. No. 1606 was later amended by P.D. No. 1861 on March 23, 1983, further
altering the Sandiganbayan jurisdiction. R.A. No. 7975 approved on March 30,
1995 made succeeding amendments to P.D. No. 1606, which was again
amended on February 5, 1997 by R.A. No. 8249. Section 4 of R.A. No. 8249 further
modified the jurisdiction of the Sandiganbayan. As it now stands, the
Sandiganbayan has jurisdiction over the following:

Sec. 4. Jurisdiction. - The Sandiganbayan shall exercise exclusive original

jurisdiction in all cases involving:

A. Violations of Republic Act No. 3019, as amended, other known as the

Anti-Graft and Corrupt Practices Act, Republic Act No. 1379, and Chapter
II, Section 2, Title VII, Book II of the Revised Penal Code, where one or more
of the accused are officials occupying the following positions in the
government, whether in a permanent, acting or interim capacity, at the
time of the commission of the offense:

(1) Officials of the executive branch occupying the positions of regional

director and higher, otherwise classified as Grade "27" and higher, of the
Compensation and Position Classification Act of 989 (Republic Act No.
6758), specifically including:

" (a) Provincial governors, vice-governors, members of the sangguniang

panlalawigan, and provincial treasurers, assessors, engineers, and other
city department heads;

" (b) City mayor, vice-mayors, members of the sangguniang panlungsod,

city treasurers, assessors, engineers, and other city department heads;

"(c ) Officials of the diplomatic service occupying the position of consul

and higher;

" (d) Philippine army and air force colonels, naval captains, and all officers
of higher rank;

" (e) Officers of the Philippine National Police while occupying the position
of provincial director and those holding the rank of senior superintended
or higher;

" (f) City and provincial prosecutors and their assistants, and officials and
prosecutors in the Office of the Ombudsman and special prosecutor;
" (g) Presidents, directors or trustees, or managers of government-owned
or controlled corporations, state universities or educational institutions or
foundations.

" (2) Members of Congress and officials thereof classified as Grade "27'"
and up under the Compensation and Position Classification Act of 1989;

" (3) Members of the judiciary without prejudice to the provisions of the
Constitution;

" (4) Chairmen and members of Constitutional Commission, without

prejudice to the provisions of the Constitution; and

" (5) All other national and local officials classified as Grade "27'" and
higher under the Compensation and Position Classification Act of 1989.

B. Other offenses of felonies whether simple or complexed with other

crimes committed by the public officials and employees mentioned in
subsection a of this section in relation to their office.

C. Civil and criminal cases filed pursuant to and in connection with

Executive Order Nos. 1, 2, 14 and 14-A, issued in 1986.

" In cases where none of the accused are occupying positions

corresponding to Salary Grade "27'" or higher, as prescribed in the said
Republic Act No. 6758, or military and PNP officer mentioned above,
exclusive original jurisdiction thereof shall be vested in the proper regional
court, metropolitan trial court, municipal trial court, and municipal circuit
trial court, as the case may be, pursuant to their respective jurisdictions as
provided in Batas Pambansa Blg. 129, as amended.

" The Sandiganbayan shall exercise exclusive appellate jurisdiction over

final judgments, resolutions or order of regional trial courts whether in the
exercise of their own original jurisdiction or of their appellate jurisdiction as
herein provided.

" The Sandiganbayan shall have exclusive original jurisdiction over

petitions for the issuance of the writs of mandamus, prohibition, certiorari,
habeas corpus, injunctions, and other ancillary writs and processes in aid
of its appellate jurisdiction and over petitions of similar nature, including
quo warranto, arising or that may arise in cases filed or which may be filed
under Executive Order Nos. 1, 2, 14 and 14-A, issued in 1986: Provided,
That the jurisdiction over these petitions shall not be exclusive of the
Supreme Court.
 " The procedure prescribed in Batas Pambansa Blg. 129, as well as the
implementing rules that the Supreme Court has promulgated and may
thereafter promulgate, relative to appeals/petitions for review to the
Court of Appeals, shall apply to appeals and petitions for review filed with
the Sandiganbayan. In all cases elevated to the Sandiganbayan and
from the Sandiganbayan to the Supreme Court, the Office of the
Ombudsman, through its special prosecutor, shall represent the People of
the Philippines, except in cases filed pursuant to Executive Order Nos. 1, 2,
14 and 14-A, issued in 1986.

" In case private individuals are charged as co-principals, accomplices or

accessories with the public officers or employees, including those
employed in government-owned or controlled corporations, they shall be
tried jointly with said public officers and employees in the proper courts
which shall exercise exclusive jurisdiction over them.

" Any provisions of law or Rules of Court to the contrary notwithstanding,

the criminal action and the corresponding civil action for the recovery of
civil liability shall, at all times, be simultaneously instituted with, and jointly
determined in, the same proceeding by the Sandiganbayan or the
appropriate courts, the filing of the criminal action being deemed to
necessarily carry with it the filing of the civil action, and no right to reserve
the filing such civil action separately from the criminal action shall be
recognized: Provided, however, That where the civil action had
heretofore been filed separately but judgment therein has not yet been
rendered, and the criminal case is hereafter filed with the Sandiganbayan
or the appropriate court, said civil action shall be transferred to the
Sandiganbayan or the appropriate court, as the case may be, for
consolidation and joint determination with the criminal action, otherwise
the separate civil action shall be deemed abandoned."

Upon the other hand, R.A. No. 3019 is a penal statute approved on August 17,
1960. The said law represses certain acts of public officers and private persons
alike which constitute graft or corrupt practices or which may lead
thereto.31 Pursuant to Section 10 of R.A. No. 3019, all prosecutions for violation of
the said law should be filed with the Sandiganbayan.32

R.A. No. 3019 does not contain an enumeration of the cases over which the
Sandiganbayan has jurisdiction. In fact, Section 4 of R.A. No. 3019 erroneously
cited by petitioner, deals not with the jurisdiction of the Sandiganbayan but with
prohibition on private individuals. We quote:

Section 4. Prohibition on private individuals. – (a) It shall be unlawful for

any person having family or close personal relation with any public official
 to capitalize or exploit or take advantage of such family or close personal
relation by directly or indirectly requesting or receiving any present, gift or
material or pecuniary advantage from any other person having some
business, transaction, application, request or contract with the
government, in which such public official has to intervene. Family relation
shall include the spouse or relatives by consanguinity or affinity in the third
civil degree. The word "close personal relation" shall include close personal
friendship, social and fraternal connections, and professional employment
all giving rise to intimacy which assures free access to such public officer.

(b) It shall be unlawful for any person knowingly to induce or cause any
public official to commit any of the offenses defined in Section 3 hereof.

In fine, the two statutes differ in that P.D. No. 1606, as amended, defines the
jurisdiction of the Sandiganbayan while R.A. No. 3019, as amended, defines
graft and corrupt practices and provides for their penalties.

Sandiganbayan has jurisdiction over

the offense of estafa.

Relying on Section 4 of P.D. No. 1606, petitioner contends that estafa is not
among those crimes cognizable by the Sandiganbayan. We note that in
hoisting this argument, petitioner isolated the first paragraph of Section 4 of P.D.
No. 1606, without regard to the succeeding paragraphs of the said provision.

The rule is well-established in this jurisdiction that statutes should receive a

sensible construction so as to avoid an unjust or an absurd
conclusion.33 Interpretatio talis in ambiguis semper fienda est, ut evitetur
inconveniens et absurdum. Where there is ambiguity, such interpretation as will
avoid inconvenience and absurdity is to be adopted. Kung saan mayroong
kalabuan, ang pagpapaliwanag ay hindi dapat maging mahirap at katawa-
tawa.

Every section, provision or clause of the statute must be expounded by

reference to each other in order to arrive at the effect contemplated by the
legislature.34 The intention of the legislator must be ascertained from the whole
text of the law and every part of the act is to be taken into view.35 In other
words, petitioner’s interpretation lies in direct opposition to the rule that a statute
must be interpreted as a whole under the principle that the best interpreter of a
statute is the statute itself.36 Optima statuti interpretatrix est ipsum statutum. Ang
isang batas ay marapat na bigyan ng kahulugan sa kanyang kabuuan sa ilalim
ng prinsipyo na ang pinakamainam na interpretasyon ay ang mismong batas.

Section 4(B) of P.D. No. 1606 reads:

 B. Other offenses or felonies whether simple or complexed with other
crimes committed by the public officials and employees mentioned in
subsection a of this section in relation to their office.

Evidently, the Sandiganbayan has jurisdiction over other felonies committed by

public officials in relation to their office. We see no plausible or sensible reason to
exclude estafa as one of the offenses included in Section 4(bB) of P.D. No. 1606.
Plainly, estafa is one of those other felonies. The jurisdiction is simply subject to
the twin requirements that (a) the offense is committed by public officials and
employees mentioned in Section 4(A) of P.D. No. 1606, as amended, and that
(b) the offense is committed in relation to their office.

In Perlas, Jr. v. People,37 the Court had occasion to explain that the
Sandiganbayan has jurisdiction over an indictment for estafa versus a director of
the National Parks Development Committee, a government instrumentality. The
Court held then:

The National Parks Development Committee was created originally as an

Executive Committee on January 14, 1963, for the development of the
Quezon Memorial, Luneta and other national parks (Executive Order No.
30). It was later designated as the National Parks Development
Committee (NPDC) on February 7, 1974 (E.O. No. 69). On January 9, 1966,
Mrs. Imelda R. Marcos and Teodoro F. Valencia were designated
Chairman and Vice-Chairman respectively (E.O. No. 3). Despite an
attempt to transfer it to the Bureau of Forest Development, Department of
Natural Resources, on December 1, 1975 (Letter of Implementation No. 39,
issued pursuant to PD No. 830, dated November 27, 1975), the NPDC has
remained under the Office of the President (E.O. No. 709, dated July 27,
1981).

Since 1977 to 1981, the annual appropriations decrees listed NPDC as a

regular government agency under the Office of the President and
allotments for its maintenance and operating expenses were issued direct
to NPDC (Exh. 10-A, Perlas, Item Nos. 2, 3).

The Sandiganbayan’s jurisdiction over estafa was reiterated with greater

firmness in Bondoc v. Sandiganbayan.38Pertinent parts of the Court’s ruling in
Bondoc read:

Furthermore, it is not legally possible to transfer Bondoc’s cases to the

Regional Trial Court, for the simple reason that the latter would not have
jurisdiction over the offenses. As already above intimated, the inability of
the Sandiganbayan to hold a joint trial of Bondoc’s cases and those of
the government employees separately charged for the same crimes, has
 not altered the nature of the offenses charged, as estafa thru falsification
punishable by penalties higher than prision correccional or imprisonment
of six years, or a fine of P6,000.00, committed by government employees
in conspiracy with private persons, including Bondoc. These crimes are
within the exclusive, original jurisdiction of the Sandiganbayan. They simply
cannot be taken cognizance of by the regular courts, apart from the fact
that even if the cases could be so transferred, a joint trial would
nonetheless not be possible.

Petitioner UP student regent

is a public officer.

Petitioner also contends that she is not a public officer. She does not receive
any salary or remuneration as a UP student regent. This is not the first or likely the
last time that We will be called upon to define a public officer. In Khan, Jr. v.
Office of the Ombudsman, We ruled that it is difficult to pin down the definition
of a public officer.39 The 1987 Constitution does not define who are public
officers. Rather, the varied definitions and concepts are found in different
statutes and jurisprudence.

In Aparri v. Court of Appeals,40 the Court held that:

A public office is the right, authority, and duty created and conferred by
law, by which for a given period, either fixed by law or enduring at the
pleasure of the creating power, an individual is invested with some portion
of the sovereign functions of the government, to be exercise by him for
the benefit of the public ([Mechem Public Offices and Officers,] Sec. 1).
The right to hold a public office under our political system is therefore not
a natural right. It exists, when it exists at all only because and by virtue of
some law expressly or impliedly creating and conferring it (Mechem Ibid.,
Sec. 64). There is no such thing as a vested interest or an estate in an
office, or even an absolute right to hold office. Excepting constitutional
offices which provide for special immunity as regards salary and tenure,
no one can be said to have any vested right in an office or its salary (42
Am. Jur. 881).

In Laurel v. Desierto,41 the Court adopted the definition of Mechem of a public

office:

"A public office is the right, authority and duty, created and conferred by
law, by which, for a given period, either fixed by law or enduring at the
pleasure of the creating power, an individual is invested with some portion
of the sovereign functions of the government, to be exercised by him for
the benefit of the public. The individual so invested is a public officer."42
Petitioner claims that she is not a public officer with Salary Grade 27; she is, in
fact, a regular tuition fee-paying student. This is likewise bereft of merit. It is not
only the salary grade that determines the jurisdiction of the Sandiganbayan. The
Sandiganbayan also has jurisdiction over other officers enumerated in P.D. No.
1606. In Geduspan v. People,43 We held that while the first part of Section 4(A)
covers only officials with Salary Grade 27 and higher, its second part specifically
includes other executive officials whose positions may not be of Salary Grade 27
and higher but who are by express provision of law placed under the jurisdiction
of the said court. Petitioner falls under the jurisdiction of the Sandiganbayan as
she is placed there by express provision of law.44

Section 4(A)(1)(g) of P.D. No. 1606 explictly vested the Sandiganbayan with
jurisdiction over Presidents, directors or trustees, or managers of government-
owned or controlled corporations, state universities or educational institutions or
foundations. Petitioner falls under this category. As the Sandiganbayan pointed
out, the BOR performs functions similar to those of a board of trustees of a non-
stock corporation.45 By express mandate of law, petitioner is, indeed, a public
officer as contemplated by P.D. No. 1606.

Moreover, it is well established that compensation is not an essential element of

public office.46 At most, it is merely incidental to the public office.47

Delegation of sovereign functions is essential in the public office. An investment

in an individual of some portion of the sovereign functions of the government, to
be exercised by him for the benefit of the public makes one a public officer.48

The administration of the UP is a sovereign function in line with Article XIV of the
Constitution. UP performs a legitimate governmental function by providing
advanced instruction in literature, philosophy, the sciences, and arts, and giving
professional and technical training.49 Moreover, UP is maintained by the
Government and it declares no dividends and is not a corporation created for
profit.50

The offense charged was committed

in relation to public office, according
to the Information.

Petitioner likewise argues that even assuming that she is a public officer, the
Sandiganbayan would still not have jurisdiction over the offense because it was
not committed in relation to her office.

According to petitioner, she had no power or authority to act without the

approval of the BOR. She adds there was no Board Resolution issued by the BOR
authorizing her to contract with then President Estrada; and that her acts were
not ratified by the governing body of the state university. Resultantly, her act
was done in a private capacity and not in relation to public office.

It is axiomatic that jurisdiction is determined by the averments in the

information.51 More than that, jurisdiction is not affected by the pleas or the
theories set up by defendant or respondent in an answer, a motion to dismiss, or
a motion to quash.52 Otherwise, jurisdiction would become dependent almost
entirely upon the whims of defendant or respondent.53

In the case at bench, the information alleged, in no uncertain terms that

petitioner, being then a student regent of U.P., "while in the performance of her
official functions, committing the offense in relation to her office and taking
advantage of her position, with intent to gain, conspiring with her brother, JADE
IAN D. SERANA, a private individual, did then and there wilfully, unlawfully and
feloniously defraud the government x x x." (Underscoring supplied)

Clearly, there was no grave abuse of discretion on the part of the

Sandiganbayan when it did not quash the information based on this ground.

Source of funds is a defense that should

be raised during trial on the merits.

It is contended anew that the amount came from President Estrada’s private
funds and not from the government coffers. Petitioner insists the charge has no
leg to stand on.

We cannot agree. The information alleges that the funds came from the Office
of the President and not its then occupant, President Joseph Ejercito Estrada.
Under the information, it is averred that "petitioner requested the amount of
Fifteen Million Pesos (P15,000,000.00), Philippine Currency, from the Office of the
President, and the latter relying and believing on said false pretenses and
misrepresentation gave and delivered to said accused Land Bank Check No.
91353 dated October 24, 2000 in the amount of Fifteen Million Pesos
(P15,000,000.00)."

Again, the Court sustains the Sandiganbayan observation that the source of
the P15,000,000 is a matter of defense that should be ventilated during the trial
on the merits of the instant case.54

A lawyer owes candor, fairness

and honesty to the Court.

As a parting note, petitioner’s counsel, Renato G. dela Cruz, misrepresented his

reference to Section 4 of P.D. No. 1606 as a quotation from Section 4 of R.A. No.
3019. A review of his motion to quash, the instant petition for certiorari and his
memorandum, unveils the misquotation. We urge petitioner’s counsel to observe
Canon 10 of the Code of Professional Responsibility, specifically Rule 10.02 of the
Rules stating that "a lawyer shall not misquote or misrepresent."

The Court stressed the importance of this rule in Pangan v. Ramos,55 where Atty
Dionisio D. Ramos used the name Pedro D.D. Ramos in connection with a
criminal case. The Court ruled that Atty. Ramos resorted to deception by using a
name different from that with which he was authorized. We severely
reprimanded Atty. Ramos and warned that a repetition may warrant suspension
or disbarment.56

We admonish petitioner’s counsel to be more careful and accurate in his

citation. A lawyer’s conduct before the court should be characterized by
candor and fairness.57 The administration of justice would gravely suffer if lawyers
do not act with complete candor and honesty before the courts.58

WHEREFORE, the petition is DENIED for lack of merit.

SO ORDERED.

THIRD DIVISION

G.R. No. 198755 June 5, 2013

ALBERTO PAT-OG, SR., Petitioner,

vs.
CIVIL SERVICE COMMISSION, Respondent.

DECISION

MENDOZA, J.:

Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules
of Court, which seeks to set aside the April 6, 2011 Decision1 of the Court of
Appeals (CA) in CA-G.R. SP No. 101700, affirming the April 11, 2007 Decision2 of
the Civil Service Commission (CSC), which ordered the dismissal of petitioner
Alberto Pat-og, Sr. (Pat-og) from the service for grave misconduct.

The Facts
On September 13, 2003, Robert Bang-on (Bang-on), then a 14-year old second
year high school student of the Antadao National High School in Sagada,
Mountain Province, tiled an affidavit-complaint against Pat-og, a third year high
school teacher of the same school, before the Civil Service Commission-
Cordillera Administrative Region (CSC-CAR).

Bang-on alleged that on the morning of August 26, 2003, he attended his class
at the basketball court of the school, where Pat-og and his third year students
were also holding a separate class; that he and some of his classmates joined
Pat-og’s third year students who were practicing basketball shots; that Pat-og
later instructed them to form two lines; that thinking that three lines were to be
formed, he stayed in between the two lines; that Pat-og then held his right arm
and punched his stomach without warning for failing to follow instructions; and
that as a result, he suffered stomach pain for several days and was confined in a
hospital from September 10-12, 2003, as evidenced by a medico-legal
certificate, which stated that he sustained a contusion hematoma in the
hypogastric area.

Regarding the same incident, Bang-on filed a criminal case against Pat-og for
the crime of Less Serious Physical Injury with the Regional Trial Court (RTC) of
Bontoc, Mountain Province.

Taking cognizance of the administrative case, the CSC-CAR directed Pat-og to

file his counter-affidavit. He denied the charges hurled against him and claimed
that when he was conducting his Music, Arts, Physical Education and Health
(MAPEH) class, composed of third year students, he instructed the girls to play
volleyball and the boys to play basketball; that he later directed the boys to
form two lines; that after the boys failed to follow his repeated instructions, he
scolded them in a loud voice and wrested the ball from them; that while
approaching them, he noticed that there were male students who were not
members of his class who had joined the shooting practice; that one of those
male students was Bang-on, who was supposed to be having his own MAPEH
class under another teacher; that he then glared at them, continued scolding
them and dismissed the class for their failure to follow instructions; and that he
offered the sworn statement of other students to prove that he did not box
Bang-on.

On June 1, 2004, the CSC-CAR found the existence of a prima faciecase for
misconduct and formally charged Pat-og.

While the proceedings of the administrative case were ongoing, the RTC
rendered its judgment in the criminal case and found Pat-og guilty of the
offense of slight physical injury. He was meted the penalty of imprisonment from
eleven (11) to twenty (20) days. Following his application for probation, the
decision became final and executory and judgment was entered.

Meanwhile, in the administrative case, a pre-hearing conference was

conducted after repeated postponement by Pat-og. With the approval of the
CSC-CAR, the prosecution submitted its position paper in lieu of a formal
presentation of evidence and formally offered its evidence, which included the
decision in the criminal case. It offered the affidavits of Raymund Atuban, a
classmate of Bang-on; and James Domanog, a third year high school student,
who both witnessed Pat-og hit Bang-on in the stomach.

For his defense, Pat-og offered the testimonies of his witnesses - Emiliano
Dontongan (Dontongan), a teacher in another school, who alleged that he was
a member of the Municipal Council for the Protection of Children, and that, in
such capacity, he investigated the incident and came to the conclusion that it
did not happen at all; and Ernest Kimmot, who testified that he was in the
basketball court at the time but did not see such incident. Pat-og also
presented the affidavits of thirteen other witnesses to prove that he did not
punch Bang-on.

Ruling of the CSC-CAR

In its Decision,3 dated September 19, 2006, the CSC-CAR found Pat-og guilty
and disposed as follows:

WHEREFORE, all premises told, respondent Alberto Pat-og, Sr., Teacher Antadao
National High School, is hereby found guilty of Simple Misconduct.

Under the Uniform Rules on Administrative Cases in the Civil Service, the
imposable penalty on the first offense of Simple Misconduct is suspension of one
(1) month and one (1) day to six (6) months.

Due to seriousness of the resulting injury to the fragile body of the minor victim,
the CSC-CAR hereby imposed upon respondent the maximum penalty
attached to the offense which is six months suspension without pay.

The CSC-CAR gave greater weight to the version posited by the prosecution,
finding that a blow was indeed inflicted by Pat-og on Bang-on. It found that Pat-
og had a motive for doing so - his students’ failure to follow his repeated
instructions which angered him. Nevertheless, the CSCCAR ruled that a motive
was not necessary to establish guilt if the perpetrator of the offense was
positively identified. The positive identification of Pat-og was duly proven by the
corroborative testimonies of the prosecution witnesses, who were found to be
credible and disinterested. The testimony of defense witness, Dontongan, was
not given credence considering that the students he interviewed for his
investigation claimed that Pat-og was not even angry at the time of the
incident, contrary to the latter’s own admission.

The CSC-CAR held that the actions of Pat-og clearly transgressed the proper
norms of conduct required of a public official, and the gravity of the offense
was further magnified by the seriousness of the injury of Bang-on which required
a healing period of more than ten (10) days. It pointed out that, being his
teacher, Pat-og’s substitute parental authority did not give him license to
physically chastise a misbehaving student. The CSC-CAR added that the fact
that Pat-og applied for probation in the criminal case, instead of filing an
appeal, further convinced it of his guilt.

The CSC-CAR believed that the act committed by Pat-og was sufficient to find
him guilty of Grave Misconduct. It, however, found the corresponding penalty of
dismissal from the service too harsh under the circumstances. Thus, it adjudged
petitioner guilty of Simple Misconduct and imposed the maximum penalty of
suspension for six (6) months.

On December 11, 2006, the motion for reconsideration filed by Pat-og was
denied for lack of merit.4

The Ruling of the CSC

In its Resolution,5 dated April 11, 2007, the CSC dismissed Pat-og’s appeal and
affirmed with modification the decision of the CSC-CAR as follows:

WHEREFORE, foregoing premises considered, the instant appeal is hereby

DISMISSED. The decision of the CSC-CAR is affirmed with the modification that
Alberto Pat-og, Sr., is adjudged guilty of grave misconduct, for which he is
meted out the penalty of dismissal from the service with all its accessory
penalties of cancellation of eligibilities, perpetual disqualification from
reemployment in the government service, and forfeiture of retirement benefits.6

After evaluating the records, the CSC sustained the CSC-CAR’s conclusion that
there existed substantial evidence to sustain the finding that Pat-og did punch
Bang-on in the stomach. It gave greater weight to the positive statements of
Bang-on and his witnesses over the bare denial of Patog. It also highlighted the
fact that Pat-og failed to adduce evidence of any ill motive on the part of
Bang-on in filing the administrative case against him. It likewise gave credence
to the medico-legal certificate showing that Bang-on suffered a hematoma
contusion in his hypogastric area.
The CSC ruled that the affidavits of Bang-on’s witnesses were not bereft of
evidentiary value even if Pat-og was not afforded a chance to cross-examine
the witnesses of Bang-on. It is of no moment because the cross- examination of
witnesses is not an indispensable requirement of administrative due process.

The CSC noted that Pat-og did not question but, instead, fully acquiesced in his
conviction in the criminal case for slight physical injury, which was based on the
same set of facts and circumstances, and involved the same parties and issues.
It, thus, considered his prior criminal conviction as evidence against him in the
administrative case.

Finding that his act of punching his student displayed a flagrant and wanton
disregard of the dignity of a person, reminiscent of corporal punishment that
had since been outlawed for being harsh, unjust, and cruel, the CSC upgraded
Pat-og’s offense from Simple Misconduct to Grave Misconduct and ordered his
dismissal from the service.

Pat-og filed a motion for reconsideration, questioning for the first time the
jurisdiction of CSC over the case. He contended that administrative charges
against a public school teacher should have been initially heard by a
committee to be constituted pursuant to the Magna Carta for Public School
Teachers.

On November 5, 2007, the CSC denied his motion for reconsideration.7 It ruled
that Pat-og was estopped from challenging its jurisdiction considering that he
actively participated in the administrative proceedings against him, raising the
issue of jurisdiction only after his appeal was dismissed by the CSC.

Ruling of the Court of Appeals

In its assailed April 6, 2011 Decision,8 the CA affirmed the resolutions of the CSC.
It agreed that Pat-og was estopped from questioning the jurisdiction of the CSC
as the records clearly showed that he actively participated in the proceedings.
It was of the view that Pat-og was not denied due process when he failed to
cross-examine Bang-on and his witnesses because he was given the opportunity
to be heard and present his evidence before the CSC-CAR and the CSC.

The CA also held that the CSC committed no error in taking into account the
conviction of Pat-og in the criminal case. It stated that his conviction was not
the sole basis of the CSC for his dismissal from the service because there was
substantial evidence proving that Pat-og had indeed hit Bang-on.

In its assailed Resolution,9 dated September 13, 2011, the CA denied the motion
for reconsideration filed by Pat-og.
Hence, the present petition with the following

Assignment of Errors

WHETHER OR NOT RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE

OF DISCRETION WHEN IT AFFIRMED THE SUPREME PENALTY OF DISMISSAL FROM
SERVICE WITH FORFEITURE OF RETIREMENT BENEFITS AGAINST THE PETITIONER
WITHOUT CONSIDERING PETITIONER’S LONG YEARS OF GOVERNMENT SERVICE?

WHETHER OR NOT RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE

OF DISCRETION WHEN IT RULED THAT PETITIONER IS ESTOPPED FROM QUESTIONING
THE JURISDICTION OF THE CIVIL SERVICE COMMISSION TO HEAR AND DECIDE THE
ADMINISTRATIVE CASE AGAINST HIM?

WHETHER OR NOT RESPONDENT COURT OF APPEALS SERIOUSLY ERRED AND

COMMITTED GRAVE ABUSE OF DISCRETION IN DISMISSING THE APPEAL DESPITE
LACK OF SUBSTANTIAL EVIDENCE?

On Jurisdiction

Pat-og contends that Section 9 of Republic Act (R.A.) No. 4670, otherwise known
as the Magna Carta for Public School Teachers, provides that administrative
charges against a public school teacher shall be heard initially by a committee
constituted under said section. As no committee was ever formed, the petitioner
posits that he was denied due process and that the CSC did not have the
jurisdiction to hear and decide his administrative case. He further argues that
notwithstanding the fact that the issue of jurisdiction was raised for the first time
on appeal, the rule remains that estoppel does not confer jurisdiction on a
tribunal that has no jurisdiction over the cause of action or subject matter of the
case.

The Court cannot sustain his position.

The petitioner’s argument that the administrative case against him can only
proceed under R.A. No. 4670 is misplaced.

In Puse v. Santos-Puse,10 it was held that the CSC, the Department of Education
(DepEd) and the Board of Professional Teachers-Professional Regulatory
Commission (PRC) have concurrent jurisdiction over administrative cases against
public school teachers.

Under Article IX-B of the 1987 Constitution, the CSC is the body charged with the
establishment and administration of a career civil service which embraces all
branches and agencies of the government.11 Executive Order (E.O.) No. 292
(the Administrative Code of 1987)12 and Presidential Decree (P.D.) No. 807 (the
Civil Service Decree of the Philippines)13 expressly provide that the CSC has the
power to hear and decide administrative disciplinary cases instituted with it or
brought to it on appeal. Thus, the CSC, as the central personnel agency of the
government, has the inherent power to supervise and discipline all members of
the civil service, including public school teachers.

Indeed, under Section 9 of R.A. No. 4670, the jurisdiction over administrative
cases of public school teachers is lodged with the investigating committee
constituted therein.14 Also, under Section 23 of R.A. No. 7836 (the Philippine
Teachers Professionalization Act of 1994), the Board of Professional Teachers is
given the power, after due notice and hearing, to suspend or revoke the
certificate of registration of a professional teacher for causes enumerated
therein.15

Concurrent jurisdiction is that which is possessed over the same parties or subject
matter at the same time by two or more separate tribunals. When the law
bestows upon a government body the jurisdiction to hear and decide cases
involving specific matters, it is to be presumed that such jurisdiction is exclusive
unless it be proved that another body is likewise vested with the same
jurisdiction, in which case, both bodies have concurrent jurisdiction over the
matter.16

Where concurrent jurisdiction exists in several tribunals, the body that first takes
cognizance of the complaint shall exercise jurisdiction to the exclusion of the
others. In this case, it was CSC which first acquired jurisdiction over the case
because the complaint was filed before it. Thus, it had the authority to proceed
and decide the case to the exclusion of the DepEd and the Board of
Professional Teachers.17

In CSC v. Alfonso,18 it was held that special laws, such as R.A. No. 4670, do not
divest the CSC of its inherent power to supervise and discipline all members of
the civil service, including public school teachers. Pat-og, as a public school
teacher, is first and foremost, a civil servant accountable to the people and
answerable to the CSC for complaints lodged against him as a public servant.
To hold that R.A. No. 4670 divests the CSC of its power to discipline public school
teachers would negate the very purpose for which the CSC was established
and would impliedly amend the Constitution itself.

To further drive home the point, it was ruled in CSC v. Macud19 that R.A. No.
4670, in imposing a separate set of procedural requirements in connection with
administrative proceedings against public school teachers, should be construed
to refer only to the specific procedure to be followed in administrative
investigations conducted by the DepEd. By no means, then, did R.A. No. 4670
confer an exclusive disciplinary authority over public school teachers on the
DepEd.

At any rate, granting that the CSC was without jurisdiction, the petitioner is
indeed estopped from raising the issue. Although the rule states that a
jurisdictional question may be raised at any time, such rule admits of the
exception where, as in this case, estoppel has supervened.20 Here, instead of
opposing the CSC’s exercise of jurisdiction, the petitioner invoked the same by
actively participating in the proceedings before the CSC-CAR and by even filing
his appeal before the CSC itself; only raising the issue of jurisdiction later in his
motion for reconsideration after the CSC denied his appeal. This Court has time
and again frowned upon the undesirable practice of a party submitting his case
for decision and then accepting the judgment only if favorable, but attacking it
for lack of jurisdiction when adverse.21

On Administrative Due Process

On due process, Pat-og asserts that the affidavits of the complainant and his
witnesses are of questionable veracity having been subscribed in Bontoc, which
is nearly 30 kilometers from the residences of the parties. Furthermore, he
claimed that considering that the said affiants never testified, he was never
afforded the opportunity to cross-examine them. Therefore, their affidavits were
mere hearsay and insufficient to prove his guilt.

The petitioner does not persuade.

The essence of due process is simply to be heard, or as applied to administrative

proceedings, a fair and reasonable opportunity to explain one’s side, or an
opportunity to seek a reconsideration of the action or ruling complained
of.22 Administrative due process cannot be fully equated with due process in its
strict judicial sense. In administrative proceedings, a formal or trial-type hearing is
not always necessary23 and technical rules of procedure are not strictly applied.
Hence, the right to cross-examine is not an indispensable aspect of
administrative due process.24 The petitioner cannot, therefore, argue that the
affidavit of Bang-on and his witnesses are hearsay and insufficient to prove his
guilt.

At any rate, having actively participated in the proceedings before the CSC-
CAR, the CSC, and the CA, the petitioner was apparently afforded every
opportunity to explain his side and seek reconsideration of the ruling against
him.1âwphi1

As to the issue of the veracity of the affidavits, such is a question of fact which
cannot now be raised before the Court under Rule 45 of the Rules of Court. The
CSC-CAR, the CSC and the CA did not, therefore, err in giving credence to the
affidavits of the complainants and his witnesses, and in consequently ruling that
there was substantial evidence to support the finding of misconduct on the part
of the petitioner.

On the Penalty

Assuming that he did box Bang-on, Pat-og argues that there is no substantial
evidence to prove that he did so with a clear intent to violate the law or in
flagrant disregard of the established rule, as required for a finding of grave
misconduct. He insists that he was not motivated by bad faith or ill will because
he acted in the belief that, as a teacher, he was exercising authority over Bang-
on in loco parentis, and was, accordingly, within his rights to discipline his
student. Citing his 33 years in the government service without any adverse
record against him and the fact that he is at the edge of retirement, being
already 62 years old, the petitioner prays that, in the name of substantial and
compassionate justice, the CSC-CAR’s finding of simple misconduct and the
concomitant penalty of suspension should be upheld, instead of dismissal.

The Court agrees in part.

Misconduct means intentional wrongdoing or deliberate violation of a rule of

law or standard of behavior. To constitute an administrative offense, misconduct
should relate to or be connected with the performance of the official functions
and duties of a public officer. In grave misconduct, as distinguished from simple
misconduct, the elements of corruption, clear intent to violate the law or
t1agrant disregard of an established rule must be manifest.25

Teachers are duly licensed professionals who must not only be competent in the
practice of their noble profession, but must also possess dignity and a reputation
with high moral values. They must strictly adhere to, observe, and practice the
set of ethical and moral principles, standards, and values laid down in the Code
of Ethics of Professional Teachers, which apply to all teachers in schools in the
Philippines, whether public or private, as provided in the preamble of the said
Code.26 Section 8 of Article VIII of the same Code expressly provides that "a
teacher shall not inflict corporal punishment on offending learners."

Clearly then, petitioner cannot argue that in punching Bang-on, he was

exercising his right as a teacher in loco parentis to discipline his student. It is
beyond cavil that the petitioner, as a public school teacher, deliberately
violated his Code of Ethics. Such violation is a flagrant disregard for the
established rule contained in the said Code tantamount to grave misconduct.
Under Section 52(A)(2) of Rule IV of the Uniform Rules on Administrative Cases in
the Civil Service, the penalty for grave misconduct is dismissal from the service,
which carries with it the cancellation of eligibility, forfeiture of retirement benefits
and perpetual disqualification from reemployment in the government
service.27 This penalty must, however, be tempered with compassion as there
was sut1icient provocation on the part of Bang-on. Considering further the
mitigating circumstances that the petitioner has been in the government service
for 33 years, that this is his first offense and that he is at the cusp of retirement,
the Court finds the penalty of suspension for six months as appropriate under the
circumstances.

WHEREFORE, the Court PARTIALLY GRANTS the petition and MODIFIES the April 6,
2011 Decision of the Court of Appeals in CA-G.R. SP No. 101700. Accordingly,
Alberto Pat-og, Sr. is found GUlLTY of Grave Misconduct, but the penalty is
reduced from dismissal from the service to SUSPENSION for SIX MONTHS.

SO ORDERED.

SECOND DIVISION

G.R. No. 173946 June 19, 2013

BOSTON EQUITY RESOURCES, INC., Petitioner,

vs.
COURT OF APPEALS AND LOLITA G. TOLEDO, Respondents.

DECISION

PEREZ, J.:

Before the Court is a Petition for Review on Certiorari seeking to reverse and set
aside: (1) the Decision,1 dated 28 February 2006 and (2) the Resolution,2 dated 1
August 2006 of the Court of Appeals in CA-G.R. SP No. 88586. The challenged
decision granted herein respondent's petition for certiorari upon a finding that
the trial court committed grave abuse of discretion in denying respondent's
motion to dismiss the complaint against her.3 Based on this finding, the Court of
Appeals reversed and set aside the Orders, dated 8 November 20044 and 22
December 2004,5respectively, of the Regional Trial Court (RTC) of Manila, Branch
24.

The Facts
On 24 December 1997, petitioner filed a complaint for sum of money with a
prayer for the issuance of a writ of preliminary attachment against the spouses
Manuel and Lolita Toledo.6 Herein respondent filed an Answer dated 19 March
1998 but on 7 May 1998, she filed a Motion for Leave to Admit Amended
Answer7 in which she alleged, among others, that her husband and co-
defendant, Manuel Toledo (Manuel), is already dead.8 The death certificate9 of
Manuel states "13 July 1995" as the date of death. As a result, petitioner filed a
motion, dated 5 August 1999, to require respondent to disclose the heirs of
Manuel.10 In compliance with the verbal order of the court during the 11
October 1999 hearing of the case, respondent submitted the required names
and addresses of the heirs.11 Petitioner then filed a Motion for
Substitution,12 dated 18 January 2000, praying that Manuel be substituted by his
children as party-defendants. It appears that this motion was granted by the trial
court in an Order dated 9 October 2000.13

Pre-trial thereafter ensued and on 18 July 2001, the trial court issued its pre-trial
order containing, among others, the dates of hearing of the case.14

The trial of the case then proceeded. Herein petitioner, as plaintiff, presented its
evidence and its exhibits were thereafter admitted.

On 26 May 2004, the reception of evidence for herein respondent was

cancelled upon agreement of the parties. On 24 September 2004, counsel for
herein respondent was given a period of fifteen days within which to file a
demurrer to evidence.15 However, on 7 October 2004, respondent instead filed
a motion to dismiss the complaint, citing the following as grounds: (1) that the
complaint failed to implead an indispensable party or a real party in interest;
hence, the case must be dismissed for failure to state a cause of action; (2) that
the trial court did not acquire jurisdiction over the person of Manuel pursuant to
Section 5, Rule 86 of the Revised Rules of Court; (3) that the trial court erred in
ordering the substitution of the deceased Manuel by his heirs; and (4) that the
court must also dismiss the case against Lolita Toledo in accordance with
Section 6, Rule 86 of the Rules of Court.16

The trial court, in an Order dated 8 November 2004, denied the motion to dismiss
for having been filed out of time, citing Section 1, Rule 16 of the 1997 Rules of
Court which states that: "Within the time for but before filing the answer to the
complaint or pleading asserting a claim, a motion to dismiss may be made x x
x."17 Respondent’s motion for reconsideration of the order of denial was likewise
denied on the ground that "defendants’ attack on the jurisdiction of this Court is
now barred by estoppel by laches" since respondent failed to raise the issue
despite several chances to do so.18
Aggrieved, respondent filed a petition for certiorari with the Court of Appeals
alleging that the trial court seriously erred and gravely abused its discretion in
denying her motion to dismiss despite discovery, during the trial of the case, of
evidence that would constitute a ground for dismissal of the case.19

The Court of Appeals granted the petition based on the following grounds:

It is elementary that courts acquire jurisdiction over the person of the defendant
x x x only when the latter voluntarily appeared or submitted to the court or by
coercive process issued by the court to him, x x x. In this case, it is undisputed
that when petitioner Boston filed the complaint on December 24, 1997,
defendant Manuel S. Toledo was already dead, x x x. Such being the case, the
court a quo could not have acquired jurisdiction over the person of defendant
Manuel S. Toledo.

x x x the court a quo’s denial of respondent’s motion to dismiss was based on its
finding that respondent’s attack on the jurisdiction of the court was already
barred by laches as respondent failed to raise the said ground in its [sic]
amended answer and during the pre-trial, despite her active participation in the
proceedings.

However, x x x it is well-settled that issue on jurisdiction may be raised at any

stage of the proceeding, even for the first time on appeal. By timely raising the
issue on jurisdiction in her motion to dismiss x x x respondent is not estopped from
raising the question on jurisdiction.

Moreover, when issue on jurisdiction was raised by respondent, the court a quo
had not yet decided the case, hence, there is no basis for the court a quo to
invoke estoppel to justify its denial of the motion for reconsideration;

It should be stressed that when the complaint was filed, defendant Manuel S.
Toledo was already dead. The complaint should have impleaded the estate of
Manuel S. Toledo as defendant, not only the wife, considering that the estate of
Manuel S. Toledo is an indispensable party, which stands to be benefited or be
injured in the outcome of the case. x x x

xxxx

Respondent’s motion to dismiss the complaint should have been granted by

public respondent judge as the same was in order. Considering that the
obligation of Manuel S. Toledo is solidary with another debtor, x x x, the claim x x
x should be filed against the estate of Manuel S. Toledo, in conformity with the
provision of Section 6, Rule 86 of the Rules of Court, x x x.20
The Court of Appeals denied petitioner’s motion for reconsideration. Hence, this
petition.

The Issues

Petitioner claims that the Court of Appeals erred in not holding that:

1. Respondent is already estopped from questioning the trial court’s

jurisdiction;

2. Petitioner never failed to implead an indispensable party as the estate

of Manuel is not an indispensable party;

3. The inclusion of Manuel as party-defendant is a mere misjoinder of party

not warranting the dismissal of the case before the lower court; and

4. Since the estate of Manuel is not an indispensable party, it is not

necessary that petitioner file its claim against the estate of Manuel.

In essence, what is at issue here is the correctness of the trial court’s orders
denying respondent’s motion to dismiss.

The Ruling of the Court

We find merit in the petition.

Motion to dismiss filed out of time

To begin with, the Court of Appeals erred in granting the writ of certiorari in favor
of respondent. Well settled is the rule that the special civil action for certiorari is
not the proper remedy to assail the denial by the trial court of a motion to
dismiss. The order of the trial court denying a motion to dismiss is merely
interlocutory, as it neither terminates nor finally disposes of a case and still leaves
something to be done by the court before a case is finally decided on the
merits.21 Therefore, "the proper remedy in such a case is to appeal after a
decision has been rendered."22

As the Supreme Court held in Indiana Aerospace University v. Comm. on Higher

Education:23

A writ of certiorari is not intended to correct every controversial interlocutory

ruling; it is resorted only to correct a grave abuse of discretion or a whimsical
exercise of judgment equivalent to lack of jurisdiction. Its function is limited to
keeping an inferior court within its jurisdiction and to relieve persons from
arbitrary acts – acts which courts or judges have no power or authority in law to
perform. It is not designed to correct erroneous findings and conclusions made
by the courts. (Emphasis supplied)

Even assuming that certiorari is the proper remedy, the trial court did not commit
grave abuse of discretion in denying respondent’s motion to dismiss. It, in fact,
acted correctly when it issued the questioned orders as respondent’s motion to
dismiss was filed SIX YEARS AND FIVE MONTHS AFTER SHE FILED HER AMENDED
ANSWER. This circumstance alone already warranted the outright dismissal of the
motion for having been filed in clear contravention of the express mandate of
Section 1, Rule 16, of the Revised Rules of Court. Under this provision, a motion to
dismiss shall be filed within the time for but before the filing of an answer to the
complaint or pleading asserting a claim.24

More importantly, respondent’s motion to dismiss was filed after petitioner has
completed the presentation of its evidence in the trial court, giving credence to
petitioner’s and the trial court’s conclusion that the filing of the motion to dismiss
was a mere ploy on the part of respondent to delay the prompt resolution of the
case against her.

Also worth mentioning is the fact that respondent’s motion to dismiss under
consideration herein is not the first motion to dismiss she filed in the trial court. It
appears that she had filed an earlier motion to dismiss26 on the sole ground of
the unenforceability of petitioner’s claim under the Statute of Frauds, which
motion was denied by the trial court. More telling is the following narration of the
trial court in its Order denying respondent’s motion for reconsideration of the
denial of her motion to dismiss:

As can be gleaned from the records, with the admission of plaintiff’s exhibits,
reception of defendants’ evidence was set on March 31, and April 23, 2004 x x x
. On motion of the defendants, the hearing on March 31, 2004 was cancelled.

On April 14, 2004, defendants sought the issuance of subpoena ad

testificandum and duces tecum to one Gina M. Madulid, to appear and testify
for the defendants on April 23, 2004. Reception of defendants’ evidence was
again deferred to May 26, June 2 and June 30, 2004, x x x.

On May 13, 2004, defendants sought again the issuance of a subpoena duces
tecum and ad testificandum to the said Gina Madulid. On May 26, 2004,
reception of defendants [sic] evidence was cancelled upon the agreement of
the parties. On July 28, 2004, in the absence of defendants’ witness, hearing was
reset to September 24 and October 8, 2004 x x x.
On September 24, 2004, counsel for defendants was given a period of fifteen
(15) days to file a demurrer to evidence. On October 7, 2004, defendants filed
instead a Motion to Dismiss x x x.27

Respondent’s act of filing multiple motions, such as the first and earlier motion to
dismiss and then the motion to dismiss at issue here, as well as several motions for
postponement, lends credibility to the position taken by petitioner, which is
shared by the trial court, that respondent is

deliberately impeding the early disposition of this case. The filing of the second
motion to dismiss was, therefore, "not only improper but also dilatory."28 Thus, the
trial court, "far from deviating or straying off course from established
jurisprudence on the matter, x x x had in fact faithfully observed the law and
legal precedents in this case."29 The Court of Appeals, therefore, erred not only
in entertaining respondent’s petition for certiorari, it likewise erred in ruling that
the trial court committed grave abuse of discretion when it denied respondent’s
motion to dismiss.

On whether or not respondent is estopped from

questioning the jurisdiction of the trial court

At the outset, it must be here stated that, as the succeeding discussions will
demonstrate, jurisdiction over the person of Manuel should not be an issue in this
case. A protracted discourse on jurisdiction is, nevertheless, demanded by the
fact that jurisdiction has been raised as an issue from the lower court, to the
Court of Appeals and, finally, before this Court. For the sake of clarity, and in
order to finally settle the controversy and fully dispose of all the issues in this
case, it was deemed imperative to resolve the issue of jurisdiction.

1. Aspects of Jurisdiction

Petitioner calls attention to the fact that respondent’s motion to dismiss

questioning the trial court’s jurisdiction was filed more than six years after her
amended answer was filed. According to petitioner, respondent had several
opportunities, at various stages of the proceedings, to assail the trial court’s
jurisdiction but never did so for six straight years. Citing the doctrine laid down in
the case of Tijam, et al. v. Sibonghanoy, et al.30 petitioner claimed that
respondent’s failure to raise the question of jurisdiction at an earlier stage bars
her from later questioning it, especially since she actively participated in the
proceedings conducted by the trial court.

Petitioner’s argument is misplaced, in that, it failed to consider that the concept

of jurisdiction has several aspects, namely: (1) jurisdiction over the subject
matter; (2) jurisdiction over the parties; (3) jurisdiction over the issues of the case;
and (4) in cases involving property, jurisdiction over the res or the thing which is
the subject of the litigation.31

The aspect of jurisdiction which may be barred from being assailed as a result of
estoppel by laches is jurisdiction over the subject matter. Thus, in Tijam, the case
relied upon by petitioner, the issue involved was the authority of the then Court
of First Instance to hear a case for the collection of a sum of money in the
amount of ₱1,908.00 which amount was, at that time, within the exclusive
original jurisdiction of the municipal courts.

In subsequent cases citing the ruling of the Court in Tijam, what was likewise at
issue was the jurisdiction of the trial court over the subject matter of the case.
Accordingly, in Spouses Gonzaga v. Court of Appeals,32 the issue for
consideration was the authority of the regional trial court to hear and decide an
action for reformation of contract and damages involving a subdivision lot, it
being argued therein that jurisdiction is vested in the Housing and Land Use
Regulatory Board pursuant to PD 957 (The Subdivision and Condominium Buyers
Protective Decree). In Lee v. Presiding Judge, MTC, Legaspi City,33 petitioners
argued that the respondent municipal trial court had no jurisdiction over the
complaint for ejectment because the issue of ownership was raised in the
pleadings. Finally, in People v. Casuga,34 accused-appellant claimed that the
crime of grave slander, of which she was charged, falls within the concurrent
jurisdiction of municipal courts or city courts and the then courts of first instance,
and that the judgment of the court of first instance, to which she had appealed
the municipal court's conviction, should be deemed null and void for want of
jurisdiction as her appeal should have been filed with the Court of Appeals or
the Supreme Court.

In all of these cases, the Supreme Court barred the attack on the jurisdiction of
the respective courts concerned over the subject matter of the case based on
estoppel by laches, declaring that parties cannot be allowed to belatedly
adopt an inconsistent posture by attacking the jurisdiction of a court to which
they submitted their cause voluntarily.35

Here, what respondent was questioning in her motion to dismiss before the trial
court was that court’s jurisdiction over the person of defendant Manuel. Thus,
the principle of estoppel by laches finds no application in this case. Instead, the
principles relating to jurisdiction over the person of the parties are pertinent
herein.

The Rules of Court provide:

RULE 9
EFFECT OF FAILURE TO PLEAD
Section 1. Defenses and objections not pleaded. – Defenses and objections not
pleaded either in a motion to dismiss or in the answer are deemed waived.
However, when it appears from the pleadings or the evidence on record that
the court has no jurisdiction over the subject matter, that there is another action
pending between the same parties for the same cause, or that the action is
barred by a prior judgment or by statute of limitations, the court shall dismiss the
claim.

RULE 15
MOTIONS

Sec. 8. Omnibus motion. – Subject to the provisions of Section 1 of Rule 9, a

motion attacking a pleading, order, judgment, or proceeding shall include all
objections then available, and all objections not so included shall be deemed
waived.

Based on the foregoing provisions, the "objection on jurisdictional grounds which

is not waived even if not alleged in a motion to dismiss or the answer is lack of
jurisdiction over the subject matter. x x x Lack of jurisdiction over the subject
matter can always be raised anytime, even for the first time on appeal, since
jurisdictional issues cannot be waived x x x subject, however, to the principle of
estoppel by laches."36

Since the defense of lack of jurisdiction over the person of a party to a case is
not one of those defenses which are not deemed waived under Section 1 of
Rule 9, such defense must be invoked when an answer or a motion to dismiss is
filed in order to prevent a waiver of the defense.37 If the objection is not raised
either in a motion to dismiss or in the answer, the objection to the jurisdiction
over the person of the plaintiff or the defendant is deemed waived by virtue of
the first sentence of the above-quoted Section 1 of Rule 9 of the Rules of
Court.38

The Court of Appeals, therefore, erred when it made a sweeping

pronouncement in its questioned decision, stating that "issue on jurisdiction may
be raised at any stage of the proceeding, even for the first time on appeal" and
that, therefore, respondent timely raised the issue in her motion to dismiss and is,
consequently, not estopped from raising the question of jurisdiction. As the
question of jurisdiction involved here is that over the person of the defendant
Manuel, the same is deemed waived if not raised in the answer or a motion to
dismiss. In any case, respondent cannot claim the defense since "lack of
jurisdiction over the person, being subject to waiver, is a personal defense which
can only be asserted by the party who can thereby waive it by silence."39
2. Jurisdiction over the person of a defendant is acquired through a valid service
of summons; trial court did not acquire jurisdiction over the person of Manuel
Toledo

In the first place, jurisdiction over the person of Manuel was never acquired by
the trial court. A defendant is informed of a case against him when he receives
summons. "Summons is a writ by which the defendant is notified of the action
brought against him. Service of such writ is the means by which the court
acquires jurisdiction over his person."40

In the case at bar, the trial court did not acquire jurisdiction over the person of
Manuel since there was no valid service of summons upon him, precisely
because he was already dead even before the complaint against him and his
wife was filed in the trial court. The issues presented in this case are similar to
those in the case of Sarsaba v. Vda. de Te.41

In Sarsaba, the NLRC rendered a decision declaring that Patricio Sereno was
illegally dismissed from employment and ordering the payment of his monetary
claims. To satisfy the claim, a truck in the possession of Sereno’s employer was
levied upon by a sheriff of the NLRC, accompanied by Sereno and his lawyer,
Rogelio Sarsaba, the petitioner in that case. A complaint for recovery of motor
vehicle and damages, with prayer for the delivery of the truck pendente lite was
eventually filed against Sarsaba, Sereno, the NLRC sheriff and the NLRC by the
registered owner of the truck. After his motion to dismiss was denied by the trial
court, petitioner Sarsaba filed his answer. Later on, however, he filed an omnibus
motion to dismiss citing, as one of the grounds, lack of jurisdiction over one of
the principal defendants, in view of the fact that Sereno was already dead
when the complaint for recovery of possession was filed.

Although the factual milieu of the present case is not exactly similar to that of
Sarsaba, one of the issues submitted for resolution in both cases is similar:
whether or not a case, where one of the named defendants was already dead
at the time of its filing, should be dismissed so that the claim may be pursued
instead in the proceedings for the settlement of the estate of the deceased
defendant. The petitioner in the Sarsaba Case claimed, as did respondent
herein, that since one of the defendants died before summons was served on
him, the trial court should have dismissed the complaint against all the
defendants and the claim should be filed against the estate of the deceased
defendant. The petitioner in Sarsaba, therefore, prayed that the complaint be
dismissed, not only against Sereno, but as to all the defendants, considering that
the RTC did not acquire jurisdiction over the person of Sereno.42 This is exactly
the same prayer made by respondent herein in her motion to dismiss.

The Court, in the Sarsaba Case, resolved the issue in this wise:
x x x We cannot countenance petitioner’s argument that the complaint against
the other defendants should have been dismissed, considering that the RTC
never acquired jurisdiction over the person of Sereno. The court’s failure to
acquire jurisdiction over one’s person is a defense which is personal to the
person claiming it. Obviously, it is now impossible for Sereno to invoke the same
in view of his death. Neither can petitioner invoke such ground, on behalf of
Sereno, so as to reap the benefit of having the case dismissed against all of the
defendants. Failure to serve summons on Sereno’s person will not be a cause for
the dismissal of the complaint against the other defendants, considering that
they have been served with copies of the summons and complaints and have
long submitted their respective responsive pleadings. In fact, the other
defendants in the complaint were given the chance to raise all possible
defenses and objections personal to them in their respective motions to dismiss
and their subsequent answers.43 (Emphasis supplied.)

Hence, the Supreme Court affirmed the dismissal by the trial court of the
complaint against Sereno only.

Based on the foregoing pronouncements, there is no basis for dismissing the

complaint against respondent herein. Thus, as already emphasized above, the
trial court correctly denied her motion to dismiss.

On whether or not the estate of Manuel

Toledo is an indispensable party

Rule 3, Section 7 of the 1997 Rules of Court states:

SEC. 7. Compulsory joinder of indispensable parties. – Parties-in-interest without

whom no final determination can be had of an action shall be joined either as
plaintiffs or defendants.

An indispensable party is one who has such an interest in the controversy or

subject matter of a case that a final adjudication cannot be made in his or her
absence, without injuring or affecting that interest. He or she is a party who has
not only an interest in the subject matter of the controversy, but "an interest of
such nature that a final decree cannot be made without affecting that interest
or leaving the controversy in such a condition that its final determination may be
wholly inconsistent with equity and good conscience. It has also been
considered that an indispensable party is a person in whose absence there
cannot be a determination between the parties already before the court which
is effective, complete or equitable." Further, an indispensable party is one who
must be included in an action before it may properly proceed.44
On the other hand, a "person is not an indispensable party if his interest in the
controversy or subject matter is separable from the interest of the other parties,
so that it will not necessarily be directly or injuriously affected by a decree which
does complete justice between them. Also, a person is not an indispensable
party if his presence would merely permit complete relief between him or her
and those already parties to the action, or if he or she has no interest in the
subject matter of the action." It is not a sufficient reason to declare a person to
be an indispensable party simply because his or her presence will avoid multiple
litigations.45

Applying the foregoing pronouncements to the case at bar, it is clear that the
estate of Manuel is not an indispensable party to the collection case, for the
simple reason that the obligation of Manuel and his wife, respondent herein, is
solidary.

The contract between petitioner, on the one hand and respondent and
respondent’s husband, on the other, states:

FOR VALUE RECEIVED, I/We jointly and severally46 (in solemn) promise to pay
BOSTON EQUITY RESOURCES, INC. x x x the sum of PESOS: [ONE MILLION FOUR
HUNDRED (₱1,400,000.00)] x x x.47

The provisions and stipulations of the contract were then followed by the
respective signatures of respondent as "MAKER" and her husband as "CO-
MAKER."48 Thus, pursuant to Article 1216 of the Civil Code, petitioner may collect
the entire amount of the obligation from respondent only. The aforementioned
provision states: "The creditor may proceed against any one of the solidary
debtors or some or all of them simultaneously. The demand made against one
of them shall not be an obstacle to those which may subsequently be directed
against the others, so long as the debt has not been fully collected."

In other words, the collection case can proceed and the demands of petitioner
can be satisfied by respondent only, even without impleading the estate of
Manuel. Consequently, the estate of Manuel is not an indispensable party to
petitioner’s complaint for sum of money.

However, the Court of Appeals, agreeing with the contention of respondent,

held that the claim of petitioner should have been filed against the estate of
Manuel in accordance with Sections 5 and 6 of Rule 86 of the Rules of Court. The
aforementioned provisions provide:

SEC. 5. Claims which must be filed under the notice. If not filed, barred;
exceptions. All claims for money against the decedent, arising from contract,
express or implied, whether the same be due, not due, or contingent, all claims
for funeral expenses and judgment for money against the decedent, must be
filed within the time limited in the notice; otherwise, they are barred forever,
except that they may be set forth as counterclaims in any action that the
executor or administrator may bring against the claimants. x x x.

SEC. 6. Solidary obligation of decedent. Where the obligation of the decedent is

solidary with another debtor, the claim shall be filed against the decedent as if
he were the only debtor, without prejudice to the right of the estate to recover
contribution from the other debtor. x x x.

The Court of Appeals erred in its interpretation of the above-quoted provisions.

In construing Section 6, Rule 87 of the old Rules of Court, the precursor of Section
6, Rule 86 of the Revised Rules of Court, which latter provision has been retained
in the present Rules of Court without any revisions, the Supreme Court, in the
case of Manila Surety & Fidelity Co., Inc. v. Villarama, et. al.,49 held:50

Construing Section 698 of the Code of Civil Procedure from whence [Section 6,
Rule 87] was taken, this Court held that where two persons are bound in solidum
for the same debt and one of them dies, the whole indebtedness can be
proved against the estate of the latter, the decedent’s liability being absolute
and primary; x x x. It is evident from the foregoing that Section 6 of Rule 87
provides the procedure should the creditor desire to go against the deceased
debtor, but there is certainly nothing in the said provision making compliance
with such procedure a condition precedent before an ordinary action against
the surviving solidary debtors, should the creditor choose to demand payment
from the latter, could be entertained to the extent that failure to observe the
same would deprive the court jurisdiction to take cognizance of the action
against the surviving debtors. Upon the other hand, the Civil Code expressly
allows the creditor to proceed against any one of the solidary debtors or some
or all of them simultaneously. There is, therefore, nothing improper in the
creditor’s filing of an action against the surviving solidary debtors alone, instead
of instituting a proceeding for the settlement of the estate of the deceased
debtor wherein his claim could be filed.

The foregoing ruling was reiterated and expounded in the later case of
Philippine National Bank v. Asuncion51where the Supreme Court pronounced:

A cursory perusal of Section 6, Rule 86 of the Revised Rules of Court reveals that
nothing therein prevents a creditor from proceeding against the surviving
solidary debtors. Said provision merely sets up the procedure in enforcing
collection in case a creditor chooses to pursue his claim against the estate of
the deceased solidary debtor. The rule has been set forth that a creditor (in a
solidary obligation) has the option whether to file or not to file a claim against
the estate of the solidary debtor. x x x

xxxx

It is crystal clear that Article 1216 of the New Civil Code is the applicable
provision in this matter. Said provision gives the creditor the right to "proceed
against anyone of the solidary debtors or some or all of them simultaneously."
The choice is undoubtedly left to the solidary creditor to determine against
whom he will enforce collection. In case of the death of one of the solidary
debtors, he (the creditor) may, if he so chooses, proceed against the surviving
solidary debtors without necessity of filing a claim in the estate of the deceased
debtors. It is not mandatory for him to have the case dismissed as against the
surviving debtors and file its claim against the estate of the deceased solidary
debtor, x x x. For to require the creditor to proceed against the estate, making it
a condition precedent for any collection action against the surviving debtors to
prosper, would deprive him of his substantive rightsprovided by Article 1216 of
the New Civil Code. (Emphasis supplied.)

As correctly argued by petitioner, if Section 6, Rule 86 of the Revised Rules of

Court were applied literally, Article 1216 of the New Civil Code would, in effect,
be repealed since under the Rules of Court, petitioner has no choice but to
proceed against the estate of [the deceased debtor] only. Obviously, this
provision diminishes the [creditor’s] right under the New Civil Code to proceed
against any one, some or all of the solidary debtors. Such a construction is not
sanctioned by principle, which is too well settled to require citation, that a
substantive law cannot be amended by a procedural rule. Otherwise stated,
Section 6, Rule 86 of the Revised Rules of Court cannot be made to prevail over
Article 1216 of the New Civil Code, the former being merely procedural, while
the latter, substantive.

Based on the foregoing, the estate of Manuel is not an indispensable party and
the case can proceed as against respondent only. That petitioner opted to
collect from respondent and not from the estate of Manuel is evidenced by its
opposition to respondent’s motion to dismiss asserting that the case, as against
her, should be dismissed so that petitioner can proceed against the estate of
Manuel.

On whether or not the inclusion of Manuel as

party defendant is a misjoinder of party

Section 11 of Rule 3 of the Rules of Court states that "neither misjoinder nor non-
joinder of parties is ground for dismissal of an action. Parties may be dropped or
added by order of the court on motion of any party or on its own initiative at
any stage of the action and on such terms as are just. Any claim against a
misjoined party may be severed and proceeded with separately."

Based on the last sentence of the afore-quoted provision of law, a misjoined

party must have the capacity to sue or be sued in the event that the claim by or
against the misjoined party is pursued in a separate case. In this case, therefore,
the inclusion of Manuel in the complaint cannot be considered a misjoinder, as
in fact, the action would have proceeded against him had he been alive at the
time the collection case was filed by petitioner. This being the case, the remedy
provided by Section 11 of Rule 3 does not obtain here. The name of Manuel as
party-defendant cannot simply be dropped from the case. Instead, the
procedure taken by the Court in Sarsaba v. Vda. de Te,52whose facts, as
mentioned earlier, resemble those of this case, should be followed herein. There,
the Supreme Court agreed with the trial court when it resolved the issue of
jurisdiction over the person of the deceased Sereno in this wise:

As correctly pointed by defendants, the Honorable Court has not acquired

jurisdiction over the person of Patricio Sereno since there was indeed no valid
service of summons insofar as Patricio Sereno is concerned. Patricio Sereno died
before the summons, together with a copy of the complaint and its annexes,
could be served upon him.

However, the failure to effect service of summons unto Patricio Sereno, one of
the defendants herein, does not render the action DISMISSIBLE, considering that
the three (3) other defendants, x x x, were validly served with summons and the
case with respect to the answering defendants may still proceed
independently. Be it recalled that the three (3) answering defendants have
previously filed a Motion to Dismiss the Complaint which was denied by the
Court.

Hence, only the case against Patricio Sereno will be DISMISSED and the same
may be filed as a claim against the estate of Patricio Sereno, but the case with
respect to the three (3) other accused [sic] will proceed. (Emphasis supplied.)53

As a result, the case, as against Manuel, must be dismissed.

In addition, the dismissal of the case against Manuel is further warranted by

Section 1 of Rule 3 of the Rules of Court, which states that: only natural or
juridical persons, or entities authorized by law may be parties in a civil action."
Applying this provision of law, the Court, in the case of Ventura v.
Militante,54 held:

Parties may be either plaintiffs or defendants. x x x. In order to maintain an

action in a court of justice, the plaintiff must have an actual legal existence, that
is, he, she or it must be a person in law and possessed of a legal entity as either a
natural or an artificial person, and no suit can be lawfully prosecuted save in the
name of such a person.

The rule is no different as regards party defendants. It is incumbent upon a

plaintiff, when he institutes a judicial proceeding, to name the proper party
defendant to his cause of action. In a suit or proceeding in personam of an
adversary character, the court can acquire no jurisdiction for the purpose of trial
or judgment until a party defendant who actually or legally exists and is legally
capable of being sued, is brought before it. It has even been held that the
question of the legal personality of a party defendant is a question of substance
going to the jurisdiction of the court and not one of procedure.

The original complaint of petitioner named the "estate of Carlos Ngo as

represented by surviving spouse Ms. Sulpicia Ventura" as the
defendant.1âwphi1 Petitioner moved to dismiss the same on the ground that
the defendant as named in the complaint had no legal personality. We agree.

x x x. Considering that capacity to be sued is a correlative of the capacity to

sue, to the same extent, a decedent does not have the capacity to be sued
and may not be named a party defendant in a court action. (Emphases
supplied.)

Indeed, where the defendant is neither a natural nor a juridical person or an

entity authorized by law, the complaint may be dismissed on the ground that
the pleading asserting the claim states no cause of action or for failure to state
a cause of action pursuant to Section 1(g) of Rule 16 of the Rules of Court,
because a complaint cannot possibly state a cause of action against one who
cannot be a party to a civil action.55

Since the proper course of action against the wrongful inclusion of Manuel as
party-defendant is the dismissal of the case as against him, thus did the trial
court err when it ordered the substitution of Manuel by his heirs. Substitution is
proper only where the party to be substituted died during the pendency of the
case, as expressly provided for by Section 16, Rule 3 of the Rules of Court, which
states:

Death of party;duty of counsel. – Whenever a party to a pending action dies,

and the claim is not thereby extinguished, it shall be the duty of his counsel to
inform the court within thirty (30) days after such death of the fact thereof, and
to give the name and address of his legal representative or representatives. x x x

The heirs of the deceased may be allowed to be substituted for the deceased,
without requiring the appointment of an executor or administrator x x x.
The court shall forthwith order said legal representative or representatives to
appear and be substituted within a period of thirty (30) days from notice.
(Emphasis supplied.)

Here, since Manuel was already dead at the time of the filing of the complaint,
the court never acquired jurisdiction over his person and, in effect, there was no
party to be substituted.

WHEREFORE, the petition is GRANTED. The Decision dated 28 February 2006 and
the Resolution dated 1 August 2006 of the Court of Appeals in CA-G.R. SP No.
88586 are REVERSED and SET ASIDE. The Orders of the Regional Trial Court dated
8 November 2004 and 22 December 2004, respectively, in Civil Case No. 97-
86672, are REINSTATED. The Regional Trial Court, Branch 24, Manila is hereby
DIRECTED to proceed with the trial of Civil Case No. 97-86672 against
respondent Lolita G. Toledo only, in accordance with the above
pronouncements of the Court, and to decide the case with dispatch.

SO ORDERED.

EN BANC

G.R. No. 168539 March 25, 2014

PEOPLE OF THE PHILIPPINES, Petitioner,

vs.
HENRY T. GO, Respondent.

DECISION

PERALTA, J.:

Before the Court is a petition for review on certiorari assailing the Resolution1 of
the Third Division2 of the Sandiganbayan (SB) dated June 2, 2005 which quashed
the Information filed against herein respondent for alleged violation of Section 3
(g) of Republic Act No. 3019 (R.A. 3019), otherwise known as the Anti-Graft and
Corrupt Practices Act.

The Information filed against respondent is an offshoot of this Court's Decision3 in

Agan, Jr. v. Philippine International Air Terminals Co., Inc. which nullified the
various contracts awarded by the Government, through the Department of
Transportation and Communications (DOTC), to Philippine Air Terminals, Co., Inc.
(PIATCO) for the construction, operation and maintenance of the Ninoy Aquino
International Airport International Passenger Terminal III (NAIA IPT III). Subsequent
to the above Decision, a certain Ma. Cecilia L. Pesayco filed a complaint with
the Office of the Ombudsman against several individuals for alleged violation of
R.A. 3019. Among those charged was herein respondent, who was then the
Chairman and President of PIATCO, for having supposedly conspired with then
DOTC Secretary Arturo Enrile (Secretary Enrile) in entering into a contract which
is grossly and manifestly disadvantageous to the government.

On September 16, 2004, the Office of the Deputy Ombudsman for Luzon found
probable cause to indict, among others, herein respondent for violation of
Section 3(g) of R.A. 3019. While there was likewise a finding of probable cause
against Secretary Enrile, he was no longer indicted because he died prior to the
issuance of the resolution finding probable cause.

Thus, in an Information dated January 13, 2005, respondent was charged before
the SB as follows:

On or about July 12, 1997, or sometime prior or subsequent thereto, in Pasay

City, Metro Manila, Philippines and within the jurisdiction of this Honorable Court,
the late ARTURO ENRILE, then Secretary of the Department of Transportation and
Communications (DOTC), committing the offense in relation to his office and
taking advantage of the same, in conspiracy with accused, HENRY T. GO,
Chairman and President of the Philippine International Air Terminals, Co., Inc.
(PIATCO), did then and there, willfully, unlawfully and criminally enter into a
Concession Agreement, after the project for the construction of the Ninoy
Aquino International Airport International Passenger Terminal III (NAIA IPT III) was
awarded to Paircargo Consortium/PIATCO, which Concession Agreement
substantially amended the draft Concession Agreement covering the
construction of the NAIA IPT III under Republic Act 6957, as amended by
Republic Act 7718 (BOT law), specifically the provision on Public Utility Revenues,
as well as the assumption by the government of the liabilities of PIATCO in the
event of the latter's default under Article IV, Section 4.04 (b) and (c) in relation to
Article 1.06 of the Concession Agreement, which terms are more beneficial to
PIATCO while manifestly and grossly disadvantageous to the government of the
Republic of the Philippines.4

The case was docketed as Criminal Case No. 28090.

On March 10, 2005, the SB issued an Order, to wit:

The prosecution is given a period of ten (10) days from today within which to
show cause why this case should not be dismissed for lack of jurisdiction over the
person of the accused considering that the accused is a private person and the
public official Arturo Enrile, his alleged co-conspirator, is already deceased, and
not an accused in this case.5
The prosecution complied with the above Order contending that the SB has
already acquired jurisdiction over the person of respondent by reason of his
voluntary appearance, when he filed a motion for consolidation and when he
posted bail. The prosecution also argued that the SB has exclusive jurisdiction
over respondent's case, even if he is a private person, because he was alleged
to have conspired with a public officer.6

On April 28, 2005, respondent filed a Motion to Quash7 the Information filed
against him on the ground that the operative facts adduced therein do not
constitute an offense under Section 3(g) of R.A. 3019. Respondent, citing the
show cause order of the SB, also contended that, independently of the
deceased Secretary Enrile, the public officer with whom he was alleged to have
conspired, respondent, who is not a public officer nor was capacitated by any
official authority as a government agent, may not be prosecuted for violation of
Section 3(g) of R.A. 3019.

The prosecution filed its Opposition.8

On June 2, 2005, the SB issued its assailed Resolution, pertinent portions of which
read thus:

Acting on the Motion to Quash filed by accused Henry T. Go dated April 22,
2005, and it appearing that Henry T. Go, the lone accused in this case is a
private person and his alleged co-conspirator-public official was already
deceased long before this case was filed in court, for lack of jurisdiction over the
person of the accused, the Court grants the Motion to Quash and the
Information filed in this case is hereby ordered quashed and dismissed.9

Hence, the instant petition raising the following issues, to wit:

WHETHER OR NOT THE COURT A QUO GRAVELY ERRED AND DECIDED A

QUESTION OF SUBSTANCE IN A MANNER NOT IN ACCORD WITH LAW OR
APPLICABLE JURISPRUDENCE IN GRANTING THE DEMURRER TO EVIDENCE AND IN
DISMISSING CRIMINAL CASE NO. 28090 ON THE GROUND THAT IT HAS NO
JURISDICTION OVER THE PERSON OF RESPONDENT GO.

II

WHETHER OR NOT THE COURT A QUO GRAVELY ERRED AND DECIDED A

QUESTION OF SUBSTANCE IN A MANNER NOT IN ACCORD WITH LAW OR
APPLICABLE JURISPRUDENCE, IN RULING THAT IT HAS NO JURISDICTION OVER THE
PERSON OF RESPONDENT GO DESPITE THE IRREFUTABLE FACT THAT HE HAS
ALREADY POSTED BAIL FOR HIS PROVISIONAL LIBERTY

III

WHETHER OR NOT THE COURT A QUO GRAVELY ERRED WHEN, IN COMPLETE

DISREGARD OF THE EQUAL PROTECTION CLAUSE OF THE CONSTITUTION, IT
QUASHED THE INFORMATION AND DISMISSED CRIMINAL CASE NO. 2809010

The Court finds the petition meritorious.

Section 3 (g) of R.A. 3019 provides:

Sec. 3. Corrupt practices of public officers. – In addition to acts or omissions of

public officers already penalized by existing law, the following shall constitute
corrupt practices of any public officer and are hereby declared to be unlawful:

xxxx

(g) Entering, on behalf of the Government, into any contract or transaction

manifestly and grossly disadvantageous to the same, whether or not the public
officer profited or will profit thereby.

The elements of the above provision are:

(1) that the accused is a public officer;

(2) that he entered into a contract or transaction on behalf of the

government; and

(3) that such contract or transaction is grossly and manifestly

disadvantageous to the government.11

At the outset, it bears to reiterate the settled rule that private persons, when
acting in conspiracy with public officers, may be indicted and, if found guilty,
held liable for the pertinent offenses under Section 3 of R.A. 3019, in consonance
with the avowed policy of the anti-graft law to repress certain acts of public
officers and private persons alike constituting graft or corrupt practices act or
which may lead thereto.12 This is the controlling doctrine as enunciated by this
Court in previous cases, among which is a case involving herein private
respondent.13

The only question that needs to be settled in the present petition is whether
herein respondent, a private person, may be indicted for conspiracy in violating
Section 3(g) of R.A. 3019 even if the public officer, with whom he was alleged to
have conspired, has died prior to the filing of the Information.

Respondent contends that by reason of the death of Secretary Enrile, there is no

public officer who was charged in the Information and, as such, prosecution
against respondent may not prosper.

The Court is not persuaded.

It is true that by reason of Secretary Enrile's death, there is no longer any public
officer with whom respondent can be charged for violation of R.A. 3019. It does
not mean, however, that the allegation of conspiracy between them can no
longer be proved or that their alleged conspiracy is already expunged. The only
thing extinguished by the death of Secretary Enrile is his criminal liability. His
death did not extinguish the crime nor did it remove the basis of the charge of
conspiracy between him and private respondent. Stated differently, the death
of Secretary Enrile does not mean that there was no public officer who allegedly
violated Section 3 (g) of R.A. 3019. In fact, the Office of the Deputy Ombudsman
for Luzon found probable cause to indict Secretary Enrile for infringement of
Sections 3 (e) and (g) of R.A. 3019.14 Were it not for his death, he should have
been charged.

The requirement before a private person may be indicted for violation of

Section 3(g) of R.A. 3019, among others, is that such private person must be
alleged to have acted in conspiracy with a public officer. The law, however,
does not require that such person must, in all instances, be indicted together
with the public officer. If circumstances exist where the public officer may no
longer be charged in court, as in the present case where the public officer has
already died, the private person may be indicted alone.

Indeed, it is not necessary to join all alleged co-conspirators in an indictment for

conspiracy.15 If two or more persons enter into a conspiracy, any act done by
any of them pursuant to the agreement is, in contemplation of law, the act of
each of them and they are jointly responsible therefor.16 This means that
everything said, written or done by any of the conspirators in execution or
furtherance of the common purpose is deemed to have been said, done, or
written by each of them and it makes no difference whether the actual actor is
alive or dead, sane or insane at the time of trial.17 The death of one of two or
more conspirators does not prevent the conviction of the survivor or
survivors.18 Thus, this Court held that:

x x x [a] conspiracy is in its nature a joint offense. One person cannot conspire
alone. The crime depends upon the joint act or intent of two or more persons.
Yet, it does not follow that one person cannot be convicted of conspiracy. So
long as the acquittal or death of a co-conspirator does not remove the bases of
a charge for conspiracy, one defendant may be found guilty of the offense.19

The Court agrees with petitioner's contention that, as alleged in the Information
filed against respondent, which is deemed hypothetically admitted in the latter's
Motion to Quash, he (respondent) conspired with Secretary Enrile in violating
Section 3 (g) of R.A. 3019 and that in conspiracy, the act of one is the act of all.
Hence, the criminal liability incurred by a co-conspirator is also incurred by the
other co-conspirators.

Moreover, the Court agrees with petitioner that the avowed policy of the State
and the legislative intent to repress "acts of public officers and private persons
alike, which constitute graft or corrupt practices,"20 would be frustrated if the
death of a public officer would bar the prosecution of a private person who
conspired with such public officer in violating the Anti-Graft Law.

In this regard, this Court's disquisition in the early case of People v. Peralta21 as to
the nature of and the principles governing conspiracy, as construed under
Philippine jurisdiction, is instructive, to wit:

x x x A conspiracy exists when two or more persons come to an agreement

concerning the commission of a felony and decide to commit it. Generally,
conspiracy is not a crime except when the law specifically provides a penalty
therefor as in treason, rebellion and sedition. The crime of conspiracy known to
the common law is not an indictable offense in the Philippines. An agreement to
commit a crime is a reprehensible act from the view-point of morality, but as
long as the conspirators do not perform overt acts in furtherance of their
malevolent design, the sovereignty of the State is not outraged and the
tranquility of the public remains undisturbed.

However, when in resolute execution of a common scheme, a felony is

committed by two or more malefactors, the existence of a conspiracy assumes
pivotal importance in the determination of the liability of the perpetrators. In
stressing the significance of conspiracy in criminal law, this Court in U.S. vs.
Infante and Barreto opined that

While it is true that the penalties cannot be imposed for the mere act of
conspiring to commit a crime unless the statute specifically prescribes a penalty
therefor, nevertheless the existence of a conspiracy to commit a crime is in
many cases a fact of vital importance, when considered together with the other
evidence of record, in establishing the existence, of the consummated crime
and its commission by the conspirators.
Once an express or implied conspiracy is proved, all of the conspirators are
liable as co-principals regardless of the extent and character of their respective
active participation in the commission of the crime or crimes perpetrated in
furtherance of the conspiracy because in contemplation of law the act of one is
the act of all. The foregoing rule is anchored on the sound principle that "when
two or more persons unite to accomplish a criminal object, whether through the
physical volition of one, or all, proceeding severally or collectively, each
individual whose evil will actively contributes to the wrong-doing is in law
responsible for the whole, the same as though performed by himself alone."
Although it is axiomatic that no one is liable for acts other than his own, "when
two or more persons agree or conspire to commit a crime, each is responsible
for all the acts of the others, done in furtherance of the agreement or
conspiracy." The imposition of collective liability upon the conspirators is clearly
explained in one case where this Court held that x x x it is impossible to graduate
the separate liability of each (conspirator) without taking into consideration the
close and inseparable relation of each of them with the criminal act, for the
commission of which they all acted by common agreement x x x. The crime
must therefore in view of the solidarity of the act and intent which existed
between the x x x accused, be regarded as the act of the band or party
created by them, and they are all equally responsible x x x

Verily, the moment it is established that the malefactors conspired and

confederated in the commission of the felony proved, collective liability of the
accused conspirators attaches by reason of the conspiracy, and the court shall
not speculate nor even investigate as to the actual degree of participation of
each of the perpetrators present at the scene of the crime. Of course, as to any
conspirator who was remote from the situs of aggression, he could be drawn
within the enveloping ambit of the conspiracy if it be proved that through his
moral ascendancy over the rest of the conspirators the latter were moved or
impelled to carry out the conspiracy.

In fine, the convergence of the wills of the conspirators in the scheming and
execution of the crime amply justifies the imputation to all of them the act of
any one of them. It is in this light that conspiracy is generally viewed not as a
separate indictable offense, but a rule for collectivizing criminal liability.

xxxx

x x x A time-honored rule in the corpus of our jurisprudence is that once

conspiracy is proved, all of the conspirators who acted in furtherance of the
common design are liable as co-principals. This rule of collective criminal liability
emanates from the ensnaring nature of conspiracy. The concerted action of the
conspirators in consummating their common purpose is a patent display of their
evil partnership, and for the consequences of such criminal enterprise they must
be held solidarily liable.22

This is not to say, however, that private respondent should be found guilty of
conspiring with Secretary Enrile. It is settled that the absence or presence of
conspiracy is factual in nature and involves evidentiary matters.23 Hence, the
allegation of conspiracy against respondent is better left ventilated before the
trial court during trial, where respondent can adduce evidence to prove or
disprove its presence.

Respondent claims in his Manifestation and Motion24 as well as in his Urgent

Motion to Resolve25 that in a different case, he was likewise indicted before the
SB for conspiracy with the late Secretary Enrile in violating the same Section 3 (g)
of R.A. 3019 by allegedly entering into another agreement (Side Agreement)
which is separate from the Concession Agreement subject of the present case.
The case was docketed as Criminal Case No. 28091. Here, the SB, through a
Resolution, granted respondent's motion to quash the Information on the ground
that the SB has no jurisdiction over the person of respondent. The prosecution
questioned the said SB Resolution before this Court via a petition for review on
certiorari. The petition was docketed as G.R. No. 168919. In a minute resolution
dated August 31, 2005, this Court denied the petition finding no reversible error
on the part of the SB. This Resolution became final and executory on January 11,
2006. Respondent now argues that this Court's resolution in G.R. No. 168919
should be applied in the instant case.

The Court does not agree. Respondent should be reminded that prior to this
Court's ruling in G.R. No. 168919, he already posted bail for his provisional liberty.
In fact, he even filed a Motion for Consolidation26 in Criminal Case No. 28091.
The Court agrees with petitioner's contention that private respondent's act of
posting bail and filing his Motion for Consolidation vests the SB with jurisdiction
over his person. The rule is well settled that the act of an accused in posting bail
or in filing motions seeking affirmative relief is tantamount to submission of his
person to the jurisdiction of the court.27

Thus, it has been held that:

When a defendant in a criminal case is brought before a competent court by

virtue of a warrant of arrest or otherwise, in order to avoid the submission of his
body to the jurisdiction of the court he must raise the question of the court’s
jurisdiction over his person at the very earliest opportunity. If he gives bail,
demurs to the complaint or files any dilatory plea or pleads to the merits, he
thereby gives the court jurisdiction over his person. (State ex rel. John Brown vs.
Fitzgerald, 51 Minn., 534)
 xxxx

As ruled in La Naval Drug vs. CA [236 SCRA 78, 86]:

"[L]ack of jurisdiction over the person of the defendant may be waived either
expressly or impliedly. When a defendant voluntarily appears, he is deemed to
have submitted himself to the jurisdiction of the court. If he so wishes not to
waive this defense, he must do so seasonably by motion for the purpose of
objecting to the jurisdiction of the court; otherwise, he shall be deemed to have
submitted himself to that jurisdiction."

Moreover, "[w]here the appearance is by motion for the purpose of objecting to

the jurisdiction of the court over the person, it must be for the sole and separate
purpose of objecting to said jurisdiction. If the appearance is for any other
purpose, the defendant is deemed to have submitted himself to the jurisdiction
of the court. Such an appearance gives the court jurisdiction over the person."

Verily, petitioner’s participation in the proceedings before the Sandiganbayan

was not confined to his opposition to the issuance of a warrant of arrest but also
covered other matters which called for respondent court’s exercise of its
jurisdiction. Petitioner may not be heard now to deny said court’s jurisdiction
over him. x x x.28

In the instant case, respondent did not make any special appearance to
question the jurisdiction of the SB over his person prior to his posting of bail and
filing his Motion for Consolidation. In fact, his Motion to Quash the Information in
Criminal Case No. 28090 only came after the SB issued an Order requiring the
prosecution to show cause why the case should not be dismissed for lack of
jurisdiction over his person.

As a recapitulation, it would not be amiss to point out that the instant case
involves a contract entered into by public officers representing the government.
More importantly, the SB is a special criminal court which has exclusive original
jurisdiction in all cases involving violations of R.A. 3019 committed by certain
public officers, as enumerated in P.D. 1606 as amended by R.A. 8249. This
includes private individuals who are charged as co-principals, accomplices or
accessories with the said public officers. In the instant case, respondent is being
charged for violation of Section 3(g) of R.A. 3019, in conspiracy with then
Secretary Enrile. Ideally, under the law, both respondent and Secretary Enrile
should have been charged before and tried jointly by the Sandiganbayan.
However, by reason of the death of the latter, this can no longer be done.
Nonetheless, for reasons already discussed, it does not follow that the SB is
already divested of its jurisdiction over the person of and the case involving
herein respondent. To rule otherwise would mean that the power of a court to
decide a case would no longer be based on the law defining its jurisdiction but
on other factors, such as the death of one of the alleged offenders.

Lastly, the issues raised in the present petition involve matters which are mere
incidents in the main case and the main case has already been pending for
over nine (9) years. Thus, a referral of the case to the Regional Trial Court would
further delay the resolution of the main case and it would, by no means,
promote respondent's right to a speedy trial and a speedy disposition of his
case.

WHEREFORE, the petition is GRANTED. The Resolution of the Sandiganbayan

dated June 2, 2005, granting respondent's Motion to Quash, is hereby REVERSED
and SET ASIDE. The Sandiganbayan is forthwith DIRECTED to proceed with
deliberate dispatch in the disposition of Criminal Case No. 28090.

SO ORDERED.

EN BANC

G.R. No. 175723 February 4, 2014

THE CITY OF MANILA, represented by MAYOR JOSE L. ATIENZA, JR., and MS.
LIBERTY M. TOLEDO, in her capacity as the City Treasurer of Manila, Petitioners,
vs.
HON. CARIDAD H. GRECIA-CUERDO, in her capacity as Presiding Judge of the
Regional Trial Court, Branch 112, Pasay City; SM MART, INC.; SM PRIME
HOLDINGS, INC.; STAR APPLIANCES CENTER; SUPERVALUE, INC.; ACE HARDWARE
PHILIPPINES, INC.; WATSON PERSONAL CARE STORES, PHILS., INC.; JOLLIMART
PHILS., CORP.; SURPLUS MARKETING CORPORATION and SIGNATURE
LINES, Respondents.

DECISION

PERALTA, J.:

Before the Court is a special civil action for certiorari under Rule 65 of the Rules
of Court seeking to reverse and set aside the Resolutions1 dated April 6, 2006
and November 29, 2006 of the Court of Appeals (CA) in CA-G.R. SP No. 87948.

The antecedents of the case, as summarized by the CA, are as follows:

The record shows that petitioner City of Manila, through its treasurer, petitioner
Liberty Toledo, assessed taxes for the taxable period from January to December
2002 against private respondents SM Mart, Inc., SM Prime Holdings, Inc., Star
Appliances Center, Supervalue, Inc., Ace Hardware Philippines, Inc., Watsons
Personal Care Stores Phils., Inc., Jollimart Philippines Corp., Surplus Marketing
Corp. and Signature Lines. In addition to the taxes purportedly due from private
respondents pursuant to Section 14, 15, 16, 17 of the Revised Revenue Code of
Manila (RRCM), said assessment covered the local business taxes petitioners
were authorized to collect under Section 21 of the same Code. Because
payment of the taxes assessed was a precondition for the issuance of their
business permits, private respondents were constrained to pay the
₱19,316,458.77 assessment under protest.

On January 24, 2004, private respondents filed [with the Regional Trial Court of
Pasay City] the complaint denominated as one for "Refund or Recovery of
Illegally and/or Erroneously-Collected Local Business Tax, Prohibition with Prayer
to Issue TRO and Writ of Preliminary Injunction"

which was docketed as Civil Case No. 04-0019-CFM before public respondent's
sala [at Branch 112]. In the amended complaint they filed on February 16, 2004,
private respondents alleged that, in relation to Section 21 thereof, Sections 14,
15, 16, 17, 18, 19 and 20 of the RRCM were violative of the limitations and
guidelines under Section 143 (h) of Republic Act. No. 7160 [Local Government
Code] on double taxation. They further averred that petitioner city's Ordinance
No. 8011 which amended pertinent portions of the RRCM had already been
declared to be illegal and unconstitutional by the Department of Justice.2

In its Order3 dated July 9, 2004, the RTC granted private respondents' application
for a writ of preliminary injunction.

Petitioners filed a Motion for Reconsideration4 but the RTC denied it in its
Order5 dated October 15, 2004.

Petitioners then filed a special civil action for certiorari with the CA assailing the
July 9, 2004 and October 15, 2004 Orders of the RTC.6

In its Resolution promulgated on April 6, 2006, the CA dismissed petitioners'

petition for certiorari holding that it has no jurisdiction over the said petition. The
CA ruled that since appellate jurisdiction over private respondents' complaint for
tax refund, which was filed with the RTC, is vested in the Court of Tax Appeals
(CTA), pursuant to its expanded jurisdiction under Republic Act No. 9282 (RA
9282), it follows that a petition for certiorari seeking nullification of an
interlocutory order issued in the said case should, likewise, be filed with the CTA.

Petitioners filed a Motion for Reconsideration,7 but the CA denied it in its

Resolution dated November 29, 2006.
Hence, the present petition raising the following issues:

I- Whether or not the Honorable Court of Appeals gravely erred in

dismissing the case for lack of jurisdiction.

II- Whether or not the Honorable Regional Trial Court gravely abuse[d] its
discretion amounting to lack or excess of jurisdiction in enjoining by issuing
a Writ of Injunction the petitioners, their agents and/or authorized
representatives from implementing Section 21 of the Revised Revenue
Code of Manila, as amended, against private respondents.

III- Whether or not the Honorable Regional Trial Court gravely abuse[d] its
discretion amounting to lack or excess of jurisdiction in issuing the Writ of
Injunction despite failure of private respondents to make a written claim
for tax credit or refund with the City Treasurer of Manila.

IV- Whether or not the Honorable Regional Trial Court gravely abuse[d] its
discretion amounting to lack or excess of jurisdiction considering that
under Section 21 of the Manila Revenue Code, as amended, they are
mere collecting agents of the City Government.

V- Whether or not the Honorable Regional Trial Court gravely abuse[d] its
discretion amounting to lack or excess of jurisdiction in issuing the Writ of
Injunction because petitioner City of Manila and its constituents would
result to greater damage and prejudice thereof. (sic)8

Without first resolving the above issues, this Court finds that the instant petition
should be denied for being moot and academic.

Upon perusal of the original records of the instant case, this Court discovered
that a Decision9 in the main case had already been rendered by the RTC on
August 13, 2007, the dispositive portion of which reads as follows:

WHEREFORE, in view of the foregoing, this Court hereby renders JUDGMENT in

favor of the plaintiff and against the defendant to grant a tax refund or credit
for taxes paid pursuant to Section 21 of the Revenue Code of the City of Manila
as amended for the year 2002 in the following amounts:

To plaintiff SM Mart, Inc. - P 11,462,525.02

To plaintiff SM Prime Holdings, Inc. - 3,118,104.63
To plaintiff Star Appliances Center - 2,152,316.54
 To plaintiff Supervalue, Inc. - 1,362,750.34
To plaintiff Ace Hardware Phils., Inc. - 419,689.04
To plaintiff Watsons Personal Care Health - 231,453.62
Stores Phils., Inc.
To plaintiff Jollimart Phils., Corp. - 140,908.54
To plaintiff Surplus Marketing Corp. - 220,204.70
To plaintiff Signature Mktg. Corp. - 94,906.34
TOTAL: - P 19,316,458.77

Defendants are further enjoined from collecting taxes under Section 21,
Revenue Code of Manila from herein plaintiff.

SO ORDERED.10

The parties did not inform the Court but based on the records, the above
Decision had already become final and executory per the Certificate of
Finality11 issued by the same trial court on October 20, 2008. In fact, a Writ of
Execution12 was issued by the RTC on November 25, 2009. In view of the
foregoing, it clearly appears that the issues raised in the present petition, which
merely involve the incident on the preliminary injunction issued by the RTC, have
already become moot and academic considering that the trial court, in its
decision on the merits in the main case, has already ruled in favor of
respondents and that the same decision is now final and executory. Well
entrenched is the rule that where the issues have become moot and academic,
there is no justiciable controversy, thereby rendering the resolution of the same
of no practical use or value.13

In any case, the Court finds it necessary to resolve the issue on jurisdiction raised
by petitioners owing to its significance and for future guidance of both bench
and bar. It is a settled principle that courts will decide a question otherwise moot
and academic if it is capable of repetition, yet evading review.14

However, before proceeding, to resolve the question on jurisdiction, the Court

deems it proper to likewise address a procedural error which petitioners
committed.

Petitioners availed of the wrong remedy when they filed the instant special civil
action for certiorari under Rule 65 of the Rules of Court in assailing the
Resolutions of the CA which dismissed their petition filed with the said court and
their motion for reconsideration of such dismissal. There is no dispute that the
assailed Resolutions of the CA are in the nature of a final order as they disposed
of the petition completely. It is settled that in cases where an assailed judgment
or order is considered final, the remedy of the aggrieved party is appeal. Hence,
in the instant case, petitioner should have filed a petition for review on certiorari
under Rule 45, which is a continuation of the appellate process over the original
case.15

Petitioners should be reminded of the equally-settled rule that a special civil

action for certiorari under Rule 65 is an original or independent action based on
grave abuse of discretion amounting to lack or excess of jurisdiction and it will lie
only if there is no appeal or any other plain, speedy, and adequate remedy in
the ordinary course of law.16 As such, it cannot be a substitute for a lost
appeal.17

Nonetheless, in accordance with the liberal spirit pervading the Rules of Court
and in the interest of substantial justice, this Court has, before, treated a petition
for certiorari as a petition for review on certiorari, particularly (1) if the petition for
certiorari was filed within the reglementary period within which to file a petition
for review on certiorari; (2) when errors of judgment are averred; and (3) when
there is sufficient reason to justify the relaxation of the rules.18 Considering that
the present petition was filed within the 15-day reglementary period for filing a
petition for review on certiorari under Rule 45, that an error of judgment is
averred, and because of the significance of the issue on jurisdiction, the Court
deems it proper and justified to relax the rules and, thus, treat the instant petition
for certiorari as a petition for review on certiorari.

Having disposed of the procedural aspect, we now turn to the central issue in
this case. The basic question posed before this Court is whether or not the CTA
has jurisdiction over a special civil action for certiorari assailing an interlocutory
order issued by the RTC in a local tax case.

This Court rules in the affirmative.

On June 16, 1954, Congress enacted Republic Act No. 1125 (RA 1125) creating
the CTA and giving to the said court jurisdiction over the following:

(1) Decisions of the Collector of Internal Revenue in cases involving

disputed assessments, refunds of internal revenue taxes, fees or other
charges, penalties imposed in relation thereto, or other matters arising
under the National Internal Revenue Code or other law or part of law
administered by the Bureau of Internal Revenue;
 (2) Decisions of the Commissioner of Customs in cases involving liability for
customs duties, fees or other money charges; seizure, detention or release
of property affected fines, forfeitures or other penalties imposed in relation
thereto; or other matters arising under the Customs Law or other law or
part of law administered by the Bureau of Customs; and

(3) Decisions of provincial or City Boards of Assessment Appeals in cases

involving the assessment and taxation of real property or other matters
arising under the Assessment Law, including rules and regulations relative
thereto.

On March 30, 2004, the Legislature passed into law Republic Act No. 9282 (RA
9282) amending RA 1125 by expanding the jurisdiction of the CTA, enlarging its
membership and elevating its rank to the level of a collegiate court with special
jurisdiction. Pertinent portions of the amendatory act provides thus:

Sec. 7. Jurisdiction. - The CTA shall exercise:

a. Exclusive appellate jurisdiction to review by appeal, as herein provided:

1. Decisions of the Commissioner of Internal Revenue in cases

involving disputed assessments, refunds of internal revenue taxes,
fees or other charges, penalties in relation thereto, or other matters
arising under the National Internal Revenue or other laws
administered by the Bureau of Internal Revenue;

2. Inaction by the Commissioner of Internal Revenue in cases

involving disputed assessments, refunds of internal revenue taxes,
fees or other charges, penalties in relations thereto, or other matters
arising under the National Internal Revenue Code or other laws
administered by the Bureau of Internal Revenue, where the
National Internal Revenue Code provides a specific period of
action, in which case the inaction shall be deemed a denial;

3. Decisions, orders or resolutions of the Regional Trial Courts in local

tax cases originally decided or resolved by them in the exercise of
their original or appellate jurisdiction;

4. Decisions of the Commissioner of Customs in cases involving

liability for customs duties, fees or other money charges, seizure,
detention or release of property affected, fines, forfeitures or other
penalties in relation thereto, or other matters arising under the
Customs Law or other laws administered by the Bureau of Customs;
 5. Decisions of the Central Board of Assessment Appeals in the
exercise of its appellate jurisdiction over cases involving the
assessment and taxation of real property originally decided by the
provincial or city board of assessment appeals;

6. Decisions of the Secretary of Finance on customs cases elevated

to him automatically for review from decisions of the Commissioner
of Customs which are adverse to the Government under Section
2315 of the Tariff and Customs Code;

7. Decisions of the Secretary of Trade and Industry, in the case of

nonagricultural product, commodity or article, and the Secretary of
Agriculture in the case of agricultural product, commodity or article,
involving dumping and countervailing duties under Section 301 and
302, respectively, of the Tariff and Customs Code, and safeguard
measures under Republic Act No. 8800, where either party may
appeal the decision to impose or not to impose said duties.

b. Jurisdiction over cases involving criminal offenses as herein provided:

1. Exclusive original jurisdiction over all criminal offenses arising from

violations of the National Internal Revenue Code or Tariff and
Customs Code and other laws administered by the Bureau of
Internal Revenue or the Bureau of Customs: Provided, however, That
offenses or felonies mentioned in this paragraph where the principal
amount of taxes and fees, exclusive of charges and penalties,
claimed is less than One million pesos (₱1,000,000.00) or where there
is no specified amount claimed shall be tried by the regular Courts
and the jurisdiction of the CTA shall be appellate. Any provision of
law or the Rules of Court to the contrary notwithstanding, the
criminal action and the corresponding civil action for the recovery
of civil liability for taxes and penalties shall at all times be
simultaneously instituted with, and jointly determined in the same
proceeding by the CTA, the filing of the criminal action being
deemed to necessarily carry with it the filing of the civil action, and
no right to reserve the filing of such civil action separately from the
criminal action will be recognized.

2. Exclusive appellate jurisdiction in criminal offenses:

a. Over appeals from the judgments, resolutions or orders of the Regional Trial
Courts in tax cases originally decided by them, in their respected territorial
jurisdiction.
b. Over petitions for review of the judgments, resolutions or orders of the
Regional Trial Courts in the exercise of their appellate jurisdiction over tax cases
originally decided by the Metropolitan Trial Courts, Municipal Trial Courts and
Municipal Circuit Trial Courts in their respective jurisdiction.

c. Jurisdiction over tax collection cases as herein provided:

1. Exclusive original jurisdiction in tax collection cases involving final

and executory assessments for taxes, fees, charges and penalties:
Provides, however, that collection cases where the principal
amount of taxes and fees, exclusive of charges and penalties,
claimed is less than One million pesos (₱1,000,000.00) shall be tried
by the proper Municipal Trial Court, Metropolitan Trial Court and
Regional Trial Court.

2. Exclusive appellate jurisdiction in tax collection cases:

a. Over appeals from the judgments, resolutions or orders of the Regional Trial
Courts in tax collection cases originally decided by them, in their respective
territorial jurisdiction.

b. Over petitions for review of the judgments, resolutions or orders of the

Regional Trial Courts in the Exercise of their appellate jurisdiction over tax
collection cases originally decided by the Metropolitan Trial Courts, Municipal
Trial Courts and Municipal Circuit Trial Courts, in their respective jurisdiction.19

A perusal of the above provisions would show that, while it is clearly stated that
the CTA has exclusive appellate jurisdiction over decisions, orders or resolutions
of the RTCs in local tax cases originally decided or resolved by them in the
exercise of their original or appellate jurisdiction, there is no categorical
statement under RA 1125 as well as the amendatory RA 9282, which provides
that th e CTA has jurisdiction over petitions for certiorari assailing interlocutory
orders issued by the RTC in local tax cases filed before it.

The prevailing doctrine is that the authority to issue writs of certiorari involves the
exercise of original jurisdiction which must be expressly conferred by the
Constitution or by law and cannot be implied from the mere existence of
appellate jurisdiction.20 Thus, in the cases of Pimentel v. COMELEC,21 Garcia v.
De Jesus,22 Veloria v. COMELEC,23Department of Agrarian Reform Adjudication
Board v. Lubrica,24 and Garcia v. Sandiganbayan,25 this Court has ruled against
the jurisdiction of courts or tribunals over petitions for certiorari on the ground
that there is no law which expressly gives these tribunals such power.26 It must be
observed, however, that with the exception of Garcia v.
Sandiganbayan,27 these rulings pertain not to regular courts but to tribunals
exercising quasi-judicial powers. With respect to the Sandiganbayan, Republic
Act No. 824928 now provides that the special criminal court has exclusive original
jurisdiction over petitions for the issuance of the writs of mandamus, prohibition,
certiorari, habeas corpus, injunctions, and other ancillary writs and processes in
aid of its appellate jurisdiction.

In the same manner, Section 5 (1), Article VIII of the 1987 Constitution grants
power to the Supreme Court, in the exercise of its original jurisdiction, to issue
writs of certiorari, prohibition and mandamus. With respect to the Court of
Appeals, Section 9 (1) of Batas Pambansa Blg. 129 (BP 129) gives the appellate
court, also in the exercise of its original jurisdiction, the power to issue, among
others, a writ of certiorari,whether or not in aid of its appellate jurisdiction. As to
Regional Trial Courts, the power to issue a writ of certiorari, in the exercise of their
original jurisdiction, is provided under Section 21 of BP 129.

The foregoing notwithstanding, while there is no express grant of such power,

with respect to the CTA, Section 1, Article VIII of the 1987 Constitution provides,
nonetheless, that judicial power shall be vested in one Supreme Court and in
such lower courts as may be established by law and that judicial power includes
the duty of the courts of justice to settle actual controversies involving rights
which are legally demandable and enforceable, and to determine whether or
not there has been a grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or instrumentality of the Government.

On the strength of the above constitutional provisions, it can be fairly interpreted

that the power of the CTA includes that of determining whether or not there has
been grave abuse of discretion amounting to lack or excess of jurisdiction on
the part of the RTC in issuing an interlocutory order in cases falling within the
exclusive appellate jurisdiction of the tax court. It, thus, follows that the CTA, by
constitutional mandate, is vested with jurisdiction to issue writs of certiorari in
these cases.

Indeed, in order for any appellate court to effectively exercise its appellate
jurisdiction, it must have the authority to issue, among others, a writ of certiorari.
In transferring exclusive jurisdiction over appealed tax cases to the CTA, it can
reasonably be assumed that the law intended to transfer also such power as is
deemed necessary, if not indispensable, in aid of such appellate jurisdiction.
There is no perceivable reason why the transfer should only be considered as
partial, not total.

Consistent with the above pronouncement, this Court has held as early as the
case of J.M. Tuason & Co., Inc. v. Jaramillo, et al.29 that "if a case may be
appealed to a particular court or judicial tribunal or body, then said court or
judicial tribunal or body has jurisdiction to issue the extraordinary writ of
certiorari, in aid of its appellate jurisdiction."30 This principle was affirmed in De
Jesus v. Court of Appeals,31 where the Court stated that "a court may issue a writ
of certiorari in aid of its appellate jurisdiction if said court has jurisdiction to
review, by appeal or writ of error, the final orders or decisions of the lower
court."32 The rulings in J.M. Tuason and De Jesus were reiterated in the more
recent cases of Galang, Jr. v. Geronimo33 and Bulilis v. Nuez.34

Furthermore, Section 6, Rule 135 of the present Rules of Court provides that when
by law, jurisdiction is conferred on a court or judicial officer, all auxiliary writs,
processes and other means necessary to carry it into effect may be employed
by such court or officer.

If this Court were to sustain petitioners' contention that jurisdiction over their
certiorari petition lies with the CA, this Court would be confirming the exercise by
two judicial bodies, the CA and the CTA, of jurisdiction over basically the same
subject matter – precisely the split-jurisdiction situation which is anathema to the
orderly administration of justice.35 The Court cannot accept that such was the
legislative motive, especially considering that the law expressly confers on the
CTA, the tribunal with the specialized competence over tax and tariff matters,
the role of judicial review over local tax cases without mention of any other
court that may exercise such power. Thus, the Court agrees with the ruling of the
CA that since appellate jurisdiction over private respondents' complaint for tax
refund is vested in the CTA, it follows that a petition for certiorari seeking
nullification of an interlocutory order issued in the said case should, likewise, be
filed with the same court. To rule otherwise would lead to an absurd situation
where one court decides an appeal in the main case while another court rules
on an incident in the very same case.

Stated differently, it would be somewhat incongruent with the pronounced

judicial abhorrence to split jurisdiction to conclude that the intention of the law
is to divide the authority over a local tax case filed with the RTC by giving to the
CA or this Court jurisdiction to issue a writ of certiorari against interlocutory orders
of the RTC but giving to the CTA the jurisdiction over the appeal from the
decision of the trial court in the same case. It is more in consonance with logic
and legal soundness to conclude that the grant of appellate jurisdiction to the
CTA over tax cases filed in and decided by the RTC carries with it the power to
issue a writ of certiorari when necessary in aid of such appellate jurisdiction. The
supervisory power or jurisdiction of the CTA to issue a writ of certiorari in aid of its
appellate jurisdiction should co-exist with, and be a complement to, its
appellate jurisdiction to review, by appeal, the final orders and decisions of the
RTC, in order to have complete supervision over the acts of the latter.36

A grant of appellate jurisdiction implies that there is included in it the power

necessary to exercise it effectively, to make all orders that will preserve the
subject of the action, and to give effect to the final determination of the
appeal. It carries with it the power to protect that jurisdiction and to make the
decisions of the court thereunder effective. The court, in aid of its appellate
jurisdiction, has authority to control all auxiliary and incidental matters necessary
to the efficient and proper exercise of that jurisdiction.1âwphi1 For this purpose,
it may, when necessary, prohibit or restrain the performance of any act which
might interfere with the proper exercise of its rightful jurisdiction in cases pending
before it.37

Lastly, it would not be amiss to point out that a court which is endowed with a
particular jurisdiction should have powers which are necessary to enable it to
act effectively within such jurisdiction. These should be regarded as powers
which are inherent in its jurisdiction and the court must possess them in order to
enforce its rules of practice and to suppress any abuses of its process and to
defeat any attempted thwarting of such process.

In this regard, Section 1 of RA 9282 states that the CTA shall be of the same level
as the CA and shall possess all the inherent powers of a court of justice.

Indeed, courts possess certain inherent powers which may be said to be implied
from a general grant of jurisdiction, in addition to those expressly conferred on
them. These inherent powers are such powers as are necessary for the ordinary
and efficient exercise of jurisdiction; or are essential to the existence, dignity and
functions of the courts, as well as to the due administration of justice; or are
directly appropriate, convenient and suitable to the execution of their granted
powers; and include the power to maintain the court's jurisdiction and render it
effective in behalf of the litigants.38

Thus, this Court has held that "while a court may be expressly granted the
incidental powers necessary to effectuate its jurisdiction, a grant of jurisdiction,
in the absence of prohibitive legislation, implies the necessary and usual
incidental powers essential to effectuate it, and, subject to existing laws and
constitutional provisions, every regularly constituted court has power to do all
things that are reasonably necessary for the administration of justice within the
scope of its jurisdiction and for the enforcement of its judgments and
mandates."39 Hence, demands, matters or questions ancillary or incidental to, or
growing out of, the main action, and coming within the above principles, may
be taken cognizance of by the court and determined, since such jurisdiction is in
aid of its authority over the principal matter, even though the court may thus be
called on to consider and decide matters which, as original causes of action,
would not be within its cognizance.40

Based on the foregoing disquisitions, it can be reasonably concluded that the

authority of the CTA to take cognizance of petitions for certiorari questioning
interlocutory orders issued by the RTC in a local tax case is included in the
powers granted by the Constitution as well as inherent in the exercise of its
appellate jurisdiction.

Finally, it would bear to point out that this Court is not abandoning the rule that,
insofar as quasi-judicial tribunals are concerned, the authority to issue writs of
certiorari must still be expressly conferred by the Constitution or by law and
cannot be implied from the mere existence of their appellate jurisdiction. This
doctrine remains as it applies only to quasi-judicial bodies.

WHEREFORE, the petition is DENIED.

SO ORDERED.

SECOND DIVISION

G.R. No. 184203 November 26, 2014

CITY OF LAPU-LAPU, Petitioner,

vs.
PHILIPPINE ECONOMIC ZONE AUTHORITY, Respondent.

x-----------------------x

G.R. No. 187583

PROVINCE OF BATAAN, represented by GOVERNOR ENRIQUE T. GARCIA, JR., and

EMERLINDA S. TALENTO, in her capacity as Provincial Treasurer of
Bataan, Petitioners,
vs.
PHILIPPINE ECONOMIC ZONE AUTHORITY, Respondent.

DECISION

LEONEN, J.:

The Philippine Economic Zone Authority is exempt from payment of real property
taxes.

These are consolidated1 petitions for review on certiorari the City of Lapu-Lapu
and the Province of Bataan separately filed against the Philippine Economic
Zone Authority (PEZA).
In G.R. No. 184203, the City of Lapu-Lapu (the City) assails the Court of Appeals’
decision2 dated January 11, 2008 and resolution3 dated August 6, 2008,
dismissing the City’s appeal for being the wrong mode of appeal. The City
appealed the Regional Trial Court,Branch 111, Pasay City’s decision finding the
PEZA exempt from payment of real property taxes.

In G.R. No. 187583, the Province of Bataan (the Province) assails the Court of
Appeals’ decision4 dated August 27, 2008 and resolution5 dated April 16, 2009,
granting the PEZA’s petition for certiorari. The Court of Appeals ruled that the
Regional Trial Court, Branch 115, Pasay City gravely abused its discretion in
finding the PEZA liable for real property taxes to the Province of Bataan.

Facts common to the consolidated petitions

In the exercise of his legislative powers,6 President Ferdinand E. Marcos issued

Presidential Decree No. 66 in 1972, declaring as government policy the
establishment of export processing zones in strategic locations in the Philippines.
Presidential Decree No. 66 aimed "to encourage and promote foreign
commerce as a means of making the Philippines a center of international trade,
of strengthening our export trade and foreign exchange position, of hastening
industrialization,of reducing domestic unemployment, and of accelerating the
development of the country."7

To carry out this policy, the Export Processing Zone Authority (EPZA) was created
to operate, administer, and manage the export processing zones established in
the Port of Mariveles, Bataan8 and such other export processing zones that may
be created by virtue of the decree.9

The decree declared the EPZA non-profit in character10 with all its revenues
devoted to its development, improvement, and maintenance.11 To maintain this
non-profit character, the EPZA was declared exempt from all taxes that may be
due to the Republic of the Philippines, its provinces, cities, municipalities, and
other government agencies and instrumentalities.12 Specifically, Section 21 of
Presidential Decree No. 66 declared the EPZA exempt from payment of real
property taxes:

Section 21. Non-profit Character of the Authority; Exemption from Taxes. The
Authority shall be non-profit and shall devote and use all its returns from its
capital investment, as well as excess revenues from its operations, for the
development, improvement and maintenance and other related expenditures
of the Authority to pay its indebtedness and obligations and in furtherance and
effective implementation of the policy enunciated in Section 1 of this Decree. In
consonance therewith, the Authority is hereby declared exempt:
 ....

(b) From all income taxes, franchise taxes, realty taxes and all other kinds of
taxes and licenses to be paid to the National Government, its provinces, cities,
municipalities and other government agenciesand instrumentalities[.]

In 1979, President Marcos issued Proclamation No. 1811, establishing the Mactan
Export Processing Zone. Certain parcels of land of the public domain located in
the City of Lapu-Lapuin Mactan, Cebu were reserved to serve as site of the
Mactan Export Processing Zone.

In 1995, the PEZA was created by virtue of Republic Act No. 7916 or "the Special
Economic Zone Act of 1995"13 to operate, administer, manage, and develop
economic zones in the country.14 The PEZA was granted the power to register,
regulate, and supervise the enterprises located in the economic zones.15 By
virtue of the law, the export processing zone in Mariveles, Bataan became the
Bataan Economic Zone16 and the Mactan Export Processing Zone the Mactan
Economic Zone.17

As for the EPZA, the law required it to "evolve into the PEZA in accordance with
the guidelines and regulations set forth in an executive order issued for [the]
purpose."18

On October 30, 1995, President Fidel V. Ramos issued Executive Order No. 282,
directing the PEZA to assume and exercise all of the EPZA’s powers, functions,
and responsibilities "as provided in Presidential Decree No. 66, as amended,
insofar as they are not inconsistent with the powers, functions, and responsibilities
of the PEZA, as mandated under [the Special Economic Zone Act of 1995]."19 All
of EPZA’s properties, equipment, and assets, among others, were ordered
transferred to the PEZA.20

Facts of G.R. No. 184203

In the letter21 dated March 25, 1998, the City of Lapu-Lapu, through the Office of
the Treasurer, demanded from the PEZA 32,912,350.08 in real property taxes for
the period from 1992 to 1998 on the PEZA’s properties located in the Mactan
Economic Zone.

The City reiterated its demand in the letter22 dated May 21, 1998. It cited
Sections 193 and 234 of the Local Government Code of 1991 that withdrew the
real property tax exemptions previously granted to or presently enjoyed by all
persons. The City pointed out that no provision in the Special Economic Zone
Act of 1995 specifically exempted the PEZA from payment of real property
taxes, unlike Section 21 of Presidential Decree No. 66 that explicitly provided for
EPZA’s exemption. Since no legal provision explicitly exempted the PEZA from
payment of real property taxes, the City argued that it can tax the PEZA.

The City made subsequent demands23 on the PEZA. In its last reminder24 dated
May 13, 2002, the City assessed the PEZA 86,843,503.48 as real property taxes for
the period from 1992 to 2002.

On September 11, 2002, the PEZAfiled a petition for declaratory Relief25 with the
Regional Trial Court of Pasay City, praying that the trial court declare it exempt
from payment ofreal property taxes. The case was raffled to Branch 111.

The City answered26 the petition, maintaining that the PEZA is liable for real
property taxes. To support its argument, the City cited a legal opinion dated
September 6, 1999 issued by the Department of Justice,27 which stated that the
PEZA is not exempt from payment of real property taxes. The Department of
Justice based its opinion on Sections 193 and 234 of the Local Government
Code that withdrew the tax exemptions, including real property tax exemptions,
previously granted to all persons.

A reply28 was filed by the PEZA to which the City filed a rejoinder.29

Pursuant to Rule 63, Section 3 of Rules of Court,30 the Office of the Solicitor
General filed a comment31 on the PEZA’s petition for declaratory relief. It agreed
that the PEZA is exempt from payment of real property taxes, citing Sections 24
and 51 of the Special Economic Zone Act of 1995.

The trial court agreed with the Solicitor General. Section 24 of the Special
Economic Zone Act of 1995 provides:

SEC. 24. Exemption from National and Local Taxes. – Except for real property
taxes on land owned by developers, no taxes, local and national, shall be
imposed on business establishments operating within the ECOZONE. In lieu
thereof, five percent (5%) of the gross income earned by all business enterprises
within the ECOZONE shall be paid and remitted as follows:

a. Three percent (3%) to the National Government;

b. Two percent (2%) which shall be directly remitted by the business

establishments to the treasurer’s office of the municipality or city where
the enterprise is located.

Section 51 of the law, on the other hand, provides:

SEC. 51. Ipso-Facto Clause. – All privileges, benefits, advantages or exemptions
granted to special economic zones under Republic Act No. 7227, shall ipso-
facto be accorded to special economic zones already created or to be
created under this Act. The free port status shall not be vested upon new special
economic zones.

Based on Section 51, the trial court held that all privileges, benefits, advantages,
or exemptions granted tospecial economic zones created under the Bases
Conversion and Development Act of 1992 apply to special economic zones
created under the Special Economic ZoneAct of 1995.

Since these benefits include exemption from payment of national or local taxes,
these benefits apply to special economic zones owned by the PEZA.

According to the trial court, the PEZA remained tax-exempt regardless of

Section 24 of the Special Economic Zone Act of 1995. It ruled that Section 24,
which taxes real property owned by developers of economic zones, only applies
to private developers of economic zones, not to public developers like the PEZA.
The PEZA, therefore, is not liable for real property taxes on the land it owns.

Characterizing the PEZA as an agency of the National Government, the trial

court ruled that the City had no authority to tax the PEZA under Sections 133(o)
and 234(a) of the Local Government Code of 1991.

In the resolution32 dated June 14, 2006, the trial court granted the PEZA’s petition
for declaratory relief and declared it exempt from payment of real property
taxes.

The City filed a motion for reconsideration,33 which the trial court denied in its
resolution34 dated September 26, 2006.

The City then appealed35 to the Court of Appeals.

The Court of Appeals noted the following issues the City raised in its appellant’s
brief: (1) whether the trial court had jurisdiction over the PEZA’s petition for
declaratory relief; (2) whether the PEZA is a government agency performing
governmental functions; and (3) whether the PEZA is exempt from payment of
real property taxes.

The issues presented by the City, according to the Court of Appeals, are pure
questions of law which should have been raised in a petition for review on
certiorari directly filed before this court. Since the City availed itself of the wrong
mode of appeal, the Court of Appeals dismissed the City’s appeal in the
decision36 dated January 11, 2008.
The City filed a motion for extension of time to file a motion for
reconsideration,37 which the Court of Appeals denied in the resolution38 dated
April 11, 2008.

Despite the denial of its motion for extension, the City filed a motion for
reconsideration.39 In the resolution40 dated August 6, 2008, the Court of Appeals
denied that motion.

In its petition for review on certiorari with this court,41 the City argues that the
Court of Appeals "hid under the skirts of technical rules"42 in resolving its appeal.
The City maintains that its appeal involved mixed questions of fact and law.
According to the City, whether the PEZA performed governmental functions
"cannot completely be addressed by law but [by] the factual and actual
activities [the PEZA is] carrying out."43

Even assuming that the petition involves pure questions of law, the City
contends that the subject matter of the case "is of extreme importance with [far-
reaching] consequence that [its magnitude] would surely shape and determine
the course ofour nation’s future."44 The Court of Appeals, the City argues, should
have resolved the case on the merits.

The City insists that the trial court had no jurisdiction to hear the PEZA’s petition
for declaratory relief. According to the City, the case involves real property
located in the City of Lapu-Lapu. The petition for declaratory relief should have
been filed before the Regional Trial Court of the City of Lapu-Lapu.45

Moreover, the Province of Bataan, the City of Baguio, and the Province of
Cavite allegedly demanded real property taxes from the PEZA. The City argues
that the PEZA should have likewise impleaded these local government units as
respondents in its petition for declaratory relief. For its failure to do so, the PEZA
violated Rule 63, Section 2 of the Rules of Court, and the trial court should have
dismissed the petition.46

This court ordered the PEZA to comment on the City’s petition for review on
certiorari.47

At the outset of its comment, the PEZA argues that the Court of Appeals’
decision dated January 11, 2008 had become final and executory. After the
Court of Appeals had denied the City’s appeal, the City filed a motion for
extension of time to file a motion for reconsideration. Arguing that the time to file
a motion for reconsideration is not extendible, the PEZA filed its motion for
reconsideration out of time. The Cityhas no more right to appeal to this court.48
The PEZA maintains that the City availed itself of the wrong mode of appeal
before the Court of Appeals. Since the City raised pure questions of law in its
appeal, the PEZA argues that the proper remedy is a petition for review on
certiorari with this court, not an ordinary appeal before the appellate court. The
Court of Appeals, therefore, correctly dismissed outright the City’s appeal under
Rule 50, Section 2 of the Rules of Court.49

On the merits, the PEZA argues that it is an agency and instrumentality of the
National Government. It is therefore exempt from payment of real property
taxes under Sections 133(o) and 234(a) of the Local Government Code.50 It
adds that the tax privileges under Sections 24 and 51 of the Special Economic
Zone Act of 1995 applied to it.51

Considering that the site of the Mactan Economic Zoneis a reserved land under
Proclamation No. 1811, the PEZA claims that the properties sought to be taxed
are lands of public dominion exempt from real property taxes.52

As to the jurisdiction issue, the PEZA counters that the Regional Trial Court of
Pasay had jurisdiction to hear its petition for declaratory relief under Rule 63,
Section 1 of the Rules of Court.[53]] It also argued that it need not implead the
Province of Bataan, the City of Baguio, and the Province of Cavite as
respondents considering that their demands came after the PEZA had already
filed the petition in court.54

Facts of G.R. No. 187583

After the City of Lapu-Lapu had demanded payment of real property taxes
from the PEZA, the Province of Bataan followed suit. In its letter55 dated May 29,
2003, the Province, through the Office of the Provincial Treasurer, informed the
PEZA that it would be sending a real property tax billing to the PEZA. Arguing
that the PEZA is a developer of economic zones, the Province claimed that the
PEZA is liable for real property taxes under Section 24 of the Special Economic
Zone Act of 1995.

In its reply letter56 dated June 18, 2003, the PEZA requested the Province to
suspend the service of the real property tax billing. It cited its petition for
declaratory relief against the City of Lapu-Lapu pending before the Regional
Trial Court, Branch 111, Pasay City as basis.

The Province argued that serving a real property tax billing on the PEZA "would
not in any way affect [its] petition for declaratory relief before [the Regional Trial
Court] of Pasay City."57 Thus, in its letter58 dated June 27, 2003, the Province
notified the PEZAof its real property tax liabilities for June 1, 1995 to December
31, 2002 totalling ₱110,549,032.55.
After having been served a tax billing, the PEZA again requested the Province to
suspend collecting its alleged real property tax liabilities until the Regional Trial
Court of Pasay Cityresolves its petition for declaratory relief.59

The Province ignored the PEZA’s request. On January 20, 2004, the Province
served on the PEZA a statement of unpaid real property tax for the period from
June 1995 to December 2004.60

The PEZA again requested the Province to suspend collecting its alleged real
property taxes.61 The Province denied the request in its letter62 dated January 29,
2004, then servedon the PEZA a warrant of levy63 covering the PEZA’s real
properties located in Mariveles, Bataan.

The PEZA’s subsequent requests64 for suspension of collection were all denied by
the Province.65 The Province then served on the PEZA a notice of delinquency in
the payment of real property taxes66 and a notice of sale of real property for
unpaid real property tax.67 The Province finally sent the PEZA a notice of public
auction of the latter’s properties in Mariveles, Bataan.68

On June 14, 2004, the PEZA filed a petition for injunction69 with prayer for
issuance of a temporary restraining order and/or writ of preliminary injunction
before the Regional Trial Court of Pasay City, arguing that it is exempt from
payment ofreal property taxes. It added that the notice of sale issued by the
Province was void because it was not published in a newspaper ofgeneral
circulation asrequired by Section 260 of the Local Government Code.70

The case was raffled to Branch 115.

In its order71 dated June 18, 2004, the trial court issued a temporary restraining
order against the Province. After the PEZA had filed a ₱100,000.00 bond,72 the
trial court issued a writ of preliminary injunction,73 enjoining the Province from
selling the PEZA’s real properties at public auction.

On March 3, 2006, the PEZA and Province both manifested that each would file
a memorandum after which the case would be deemed submitted for decision.
The parties then filed their respective memoranda.74

In the order75 dated January 31, 2007, the trial court denied the PEZA’s petition
for injunction. The trial court ruled that the PEZA is not exempt from payment of
real property taxes. According to the trial court, Sections 193 and 234 of the
Local Government Code had withdrawn the real property tax exemptions
previously granted to all persons, whether natural or juridical.76 As to the tax
exemptions under Section 51 of the Special Economic Zone Act of 1995, the trial
court ruled that the provision only applies to businesses operating within the
economic zones, not to the PEZA.77

The PEZA filed before the Court of Appeals a petition for certiorari78 with prayer
for issuance of a temporary restraining order.

The Court of Appeals issued a temporary restraining order, enjoining the

Province and its Provincial Treasurer from selling PEZA's properties at public
auction scheduled on October 17, 2007.79 It also ordered the Province to
comment on the PEZA’s petition.

In its comment,80 the Province alleged that it received a copy of the temporary
restraining order only on October 18, 2007 when it had already sold the PEZA’s
properties at public auction. Arguing that the act sought to be enjoined was
already fait accompli, the Province prayed for the dismissal of the petition for
certiorari.

The PEZA then filed a supplemental petition for certiorari, prohibition, and
mandamus81 against the Province, arguing that the Provincial Treasurer of
Bataan acted with grave abuse of discretion in issuing the notice of
delinquency and notice of sale. It maintained that it is exempt from payment of
real property taxes because it is a government instrumentality. It added that its
lands are property of public dominion which cannot be sold at public auction.

The PEZA also filed a motion82 for issuance of an order affirming the temporary
restraining order and a writ of preliminary injunction to enjoin the Province from
consolidating title over the PEZA’s properties.

In its resolution83 dated January 16, 2008,the Court of Appeals admitted the
supplemental petition for certiorari, prohibition, and mandamus. It required the
Province to comment on the supplemental petition and to file a memorandum
on the PEZA’s prayer for issuance of temporary restraining order.

The Province commented84 on the PEZA’s supplemental petition, to which the

PEZA replied.85

The Province then filed a motion86 for leave to admit attached rejoinder with
motion to dismiss. In the rejoinder with motion to dismiss,87 the Province argued
for the first time that the Court of Appeals had no jurisdiction over the subject
matter of the action.

According to the Province, the PEZA erred in filing a petition for certiorari.
Arguing that the PEZA sought to reverse a Regional Trial Court decision in a local
tax case, the Province claimed that the court with appellate jurisdiction over the
action is the Court of Tax Appeals. The PEZA then prayed that the Court of
Appeals dismiss the petition for certiorari for lack of jurisdiction over the subject
matter of the action.

The Court of Appeals held that the issue before it was whether the trial court
judge gravely abused his discretion in dismissing the PEZA’s petition for
prohibition. This issue, according to the Court of Appeals, is properly addressed
in a petition for certiorari over which it has jurisdiction to resolve. It, therefore,
maintained jurisdiction to resolve the PEZA’s petition for certiorari.88

Although it admitted that appeal, not certiorari, was the PEZA’s proper remedy
to reverse the trial court’s decision,89the Court of Appeals proceeded to decide
the petition for certiorari in "the broader interest of justice."90

The Court of Appeals ruled that the trial court judge gravely abused his
discretion in dismissing the PEZA’s petition for prohibition. It held that Section 21
of Presidential Decree No. 66 and Section 51 of the Special Economic Zone Act
of 1995 granted the PEZA exemption from payment of real property
taxes.91 Based on the criteria set in Manila International Airport Authority v. Court
of Appeals,92 the Court of Appeals found that the PEZA is an instrumentality of
the national government. No taxes, therefore, could be levied on it by local
government units.93

In the decision94 dated August 27, 2008, the Court of Appeals granted the
PEZA’s petition for certiorari. It set aside the trial court’s decision and nullified all
the Province’s proceedings with respect to the collection of real property taxes
from the PEZA.

The Province filed a motion for reconsideration,95 which the Court of Appeals
denied in the resolution96 dated April 16, 2009 for lack of merit.

In its petition for review on certiorari with this court,97 the Province of Bataan
insists that the Court of Appeals had no jurisdiction to take cognizance of the
PEZA’s petition for certiorari. The Province maintains that the Court of Tax
Appeals had jurisdiction to hear the PEZA’s petition since it involved a local tax
case decided by a Regional Trial Court.98

The Province reiterates that the PEZA is not exempt from payment of real
property taxes. The Province points out that the EPZA, the PEZA’s predecessor,
had to be categorically exempted from payment of real property taxes. The
EPZA, therefore, was not inherently exempt from payment of real property taxes
and so is the PEZA. Since Congress omitted from the Special Economic Zone Act
of 1995 a provision specifically exempting the PEZA from payment of real
property taxes, the Province argues that the PEZA is a taxable entity. It cited the
rule in statutory construction that provisions omitted in revised statutes are
deemed repealed.99

With respect to Sections 24 and 51 of the Special Economic Zone Act of 1995
granting tax exemptions and benefits, the Province argues that these provisions
only apply to business establishments operating within special economic
zones,100 not to the PEZA.

This court ordered the PEZA tocomment on the Province’s petition for review on
certiorari.101 In its comment,102 the PEZA argues that the Court of Appeals had
jurisdiction to hear its petition for certiorari since the issue was whether the trial
court committed grave abuse of discretion in denying its petition for injunction.
The PEZA maintains thatit is exempt from payment of real property taxes under
Section 21 of Presidential Decree No. 66 and Section 51 of the Special Economic
Zone Act of 1995.

The Province filed its reply,103 reiterating its arguments in its petition for review on
certiorari. On the PEZA’s motion,104 this court consolidated the petitions filed by
the City of Lapu-Lapu and the Province of Bataan.105

The issues for our resolution are the following:

I. Whether the Court of Appeals erred in dismissing the City of Lapu-Lapu’s

appeal for raising pure questions of law;

II. Whether the Regional Trial Court, Branch 111, Pasay City had jurisdiction
to hear, try, and decide the City of Lapu-Lapu’s petition for declaratory
relief;

III. Whether the petition for injunction filed before the Regional Trial Court,
Branch 115, Pasay City, is a local tax case appealable to the Court of Tax
Appeals; and

IV. Whether the PEZA is exempt from payment of real property taxes.

We deny the consolidated petitions.

I.

The Court of Appeals did not err in

dismissing the City of Lapu-Lapu’s
appeal for raising pure questions of law
Under the Rules of Court, there are three modes of appeal from Regional Trial
Court decisions. The first mode is through an ordinary appeal before the Court of
Appeals where the decision assailed was rendered in the exercise of the
Regional Trial Court’s original jurisdiction. Ordinary appeals are governed by Rule
41, Sections 3 to 13 of the Rules of Court. In ordinary appeals, questions of fact or
mixed questions of fact and law may be raised.106

The second mode is through a petition for review before the Court of Appeals
where the decision assailed was rendered by the Regional Trial Court in the
exercise of its appellate jurisdiction. Rule 42 of the Rules of Court governs
petitions for review before the Court of Appeals. In petitions for review under
Rule 42, questions of fact, of law, or mixed questions of fact and law may be
raised.107

The third mode is through an appealby certiorari before this court under Rule 45
where only questions of law shall be raised.108

A question of fact exists when there is doubt as to the truth or falsity of the
alleged facts.109 On the other hand, there is a question of law if the appeal
raises doubt as to the applicable law on a certain set of facts.110

Under Rule 50, Section 2, an improper appeal before the Court of Appeals is
dismissed outright and shall not be referred to the proper court:

SEC. 2. Dismissal of improper appeal to the Court of Appeals. – An appeal under

Rule 41 taken from the Regional Trial Court to the Court of Appeals raising only
questions of law shall be dismissed, issues purely of law not being reviewable by
said court. Similarly, an appeal by notice of appeal instead of by petition for
review from the appellate judgment of a Regional Trial Court shall be dismissed.

An appeal erroneously taken to the Court of Appeals shall not be transferred to

the appropriate court but shall be dismissed outright.

Rule 50, Section 2 repealed Rule 50, Section 3 of the 1964 Rules of Court, which
provided that improper appeals to the Court of Appeals shall not be dismissed
but shall be certified to the proper court for resolution:

Sec. 3. Where appealed case erroneously, brought. — Where the appealed

case has been erroneously brought to the Court of Appeals, it shall not dismiss
the appeal, but shall certify the case to the proper court, with a specific and
clear statement of the grounds therefor.

With respect to appeals by certiorari directly filed before this court but which
raise questions of fact, paragraph 4(b) of Circular No. 2-90 dated March 9, 1990
states that this court "retains the option, in the exercise of its sound discretion
and considering the attendant circumstances, either itself to take cognizance
of and decide such issues or to refer them to the Court of Appeals for
determination." In Indoyon, Jr. v. Court of Appeals,111 we said that this court
"cannot tolerate ignorance of the law on appeals."112 It is not this court’s task to
determine for litigants their proper remedies under the Rules.113

We agree that the City availed itself of the wrong mode of appeal before the
Court of Appeals. The City raised pure questions of law in its appeal. The issue of
whether the Regional Trial Court of Pasay had jurisdiction over the PEZA’s
petition for declaratory relief is a question of law, jurisdiction being a matter of
law.114 The issue of whether the PEZA is a government instrumentality exempt
from payment of real property taxes is likewise a question of law since this
question is resolved by examining the provisions of the PEZA’s charter as well as
other laws relating to the PEZA.115

The Court of Appeals, therefore, did not err in dismissing the City’s appeal
pursuant to Rule 50, Section 2 of the Rules of Court.

Nevertheless, considering the important questions involved in this case, we take

cognizance of the City’s petition for review on certiorari in the interest of justice.

In Municipality of Pateros v. The Honorable Court of Appeals,116 the Municipality

of Pateros filed an appeal under Rule 42 before the Court of Appeals, which the
Court of Appeals denied outright for raising pure questions of law. This court
agreed that the Municipality of Pateros "committed a procedural
infraction"117 and should have directly filed a petition for review on certiorari
before this court. Nevertheless, "in the interest of justice and in order to write
finisto [the] controversy,"118 this court "opt[ed] to relax the rules"119 and
proceeded to decide the case. This court said:

While it is true that rules of procedure are intended to promote rather than
frustrate the ends of justice, and while the swift unclogging of the dockets of the
courts is a laudable objective, it nevertheless must not be met at the expense of
substantial justice.

The Court has allowed some meritorious cases to proceed despite inherent
procedural defects and lapses. Thisis in keeping with the principle that rules of
procedure are mere tools designed to facilitate the attainment of justice, and
that strict and rigid application ofrules which should result in technicalities that
tend to frustrate rather than promote substantial justice must always be
avoided. It is a far better and more prudent cause of action for the court to
excuse a technical lapse and afford the parties a review of the case to attain
the ends of justice, rather than dispose of the case on technicality and cause
grave injustice to the parties, giving a false impression of speedy disposal of
cases while actually resulting in more delay, if not a miscarriage of justice.120

Similar to Municipality of Pateros, we opt to relax the rules in this case. The PEZA
operates or otherwise administers special economic zones all over the country.
Resolving the substantive issue of whether the PEZA is taxable for real property
taxes will clarify the taxing powers of all local government units where special
economic zones are operated. This case, therefore, should be decided on the
merits.

II.

The Regional Trial Court of Pasay had no

jurisdiction to hear, try, and decide the
PEZA’s petition for declaratory relief
against the City of Lapu-Lapu

Rule 63 of the Rules of Court governs actions for declaratory relief. Section 1 of
Rule 63 provides:

SECTION 1. Who may file petition. – Any person interested under a deed, will,
contract or other written instrument, or whose rights are affected by a statute,
executive order or regulation, ordinance, or any other governmental regulation
may, before breach or violation, thereof, bring an action in the appropriate
Regional Trial Court to determine any question of construction or validity arising,
and for a declaration of his rights or duties, thereunder.

An action for reformation of an instrument, to quiet title to real property or

remove clouds therefrom, or to consolidate ownership under Article 1607 of the
Civil Code, may be brought under this Rule.

The court with jurisdiction over petitions for declaratory relief is the Regional Trial
Court, the subject matter of litigation in an action for declaratory relief being
incapable of pecuniary estimation.121 Section 19 of the Judiciary Reorganization
Act of 1980 provides:

SEC. 19. Jurisdiction in Civil Cases. – Regional Trial Courts shall exercise exclusive
original jurisdiction:

(1) In all civil actions in which the subject of litigation is incapable of pecuniary
estimation[.]

Consistent with the law, the Rules state that a petition for declaratory relief is
filed "in the appropriate Regional Trial Court."122
A special civil action for declaratory relief is filed for a judicial determination of
any question of construction or validity arising from, and for a declaration of
rights and duties, under any of the following subject matters: a deed, will,
contract or other written instrument, statute, executive order or regulation,
ordinance, orany other governmental regulation.123 However, a declaratory
judgment may issue only if there has been "no breach of the documents in
question."124 If the contract or statute subject matter of the action has already
been breached, the appropriate ordinary civil action must be filed.125 If
adequate relief is available through another form of action or proceeding, the
other action must be preferred over an action for declaratory relief.126

In Ollada v. Central Bank of the Philippines,127 the Central Bank issued CB-IED
Form No. 5 requiring certified public accountants to submit an accreditation
under oath before they were allowed to certify financial statements submitted
to the bank. Among those financial statements the Central Bank disallowed
were those certified by accountant Felipe B. Ollada.128 Claiming that the
requirement "restrained the legitimate pursuit of one’s trade,"129

Ollada filed a petition for declaratory relief against the Central Bank.

This court ordered the dismissal of Ollada’s petition "without prejudice to [his]
seeking relief in another appropriate action."130 According to this court, Ollada’s
right had already been violated when the Central Bank refused to accept the
financial statements he prepared. Since there was already a breach, a petition
for declaratory relief was not proper. Ollada must pursue the "appropriate
ordinary civil action or proceeding."131 This court explained:

Petitioner commenced this action as, and clearly intended it to be one for
Declaratory Relief under the provisions of Rule 66 of the Rules of Court. On the
question of when a special civil action of this nature would prosper, we have
already held that the complaint for declaratory relief will not prosper if filed after
a contract, statute or right has been breached or violated. In the present case
such is precisely the situation arising from the facts alleged in the petition for
declaratory relief. As vigorously claimed by petitioner himself, respondent had
already invaded or violated his right and caused him injury — all these giving
him a complete cause of action enforceable in an appropriate ordinary civil
action or proceeding. The dismissal of the action was, therefore, proper in the
lightof our ruling in De Borja vs. Villadolid, 47 O.G. (5) p. 2315, and Samson vs.
Andal, G.R. No. L-3439, July 31, 1951, where we held that an action for
declaratory relief should be filed before there has been a breach of a contract,
statutes or right, and that it is sufficient tobar such action, that there had been a
breach — which would constitute actionable violation. The rule is that an action
for Declaratory Relief is proper only if adequate relief is not available through
the means of other existing forms of action or proceeding (1 C.J.S. 1027-1028).132
It is also required that the parties to the action for declaratory relief be those
whose rights or interests are affected by the contract or statute in
question.133 "There must be an actual justiciable controversy or the ‘ripening
seeds’ of one"134 between the parties. The issue between the parties "must be
ripe for judicial determination."135 An action for declaratory relief based on
theoreticalor hypothetical questions cannot be filed for our courts are not
advisory courts.136

In Republic v. Roque,137 this court dismissed respondents’ petition for declaratory

relief for lack of justiciable controversy. According to this court, "[the
respondents’] fear of prospective prosecution [under the Human Security Act]
was solely based on remarks of certain government officials which were
addressed to the general public."138

In Velarde v. Social Justice Society,139 this court refused to resolve the issue of
"whether or not [a religious leader’s endorsement] of a candidate for elective
office or in urging or requiring the members of his flock to vote for a specific
candidate is violative [of the separation clause]."140 According to the court,
there was no justiciable controversy and ordered the dismissal of the Social
Justice Society’s petition for declaratory relief. This court explained: Indeed, SJS
merely speculated or anticipated without factual moorings that, as religious
leaders, the petitioner and his co-respondents below had endorsed or
threatened to endorse a candidate or candidates for elective offices; and that
such actual or threatened endorsement "will enable [them] to elect men to
public office who [would] in turn be forever beholden to their leaders, enabling
them to control the government"[;] and "pos[ing] a clear and present danger
ofserious erosion of the people’s faith in the electoral process[;] and reinforc[ing]
their belief that religious leaders determine the ultimate result of elections,"
which would then be violative of the separation clause.

Such premise is highly speculative and merely theoretical, to say the least.
Clearly, it does not suffice to constitute a justiciable controversy. The Petition
does not even allege any indication or manifest intent on the part of any of the
respondents below to champion an electoral candidate, or to urge their so-
called flock to vote for, or not to vote for, a particular candidate. It is a time-
honored rule that sheer speculation does not give rise to an actionable right.

Obviously, there is no factual allegation that SJS’ rights are being subjected to
any threatened, imminent and inevitable violation that should be prevented by
the declaratory relief sought. The judicial power and duty of the courts to settle
actual controversies involving rights that are legally demandable and
enforceable cannot be exercised when there is no actual or threatened
violation of a legal right.
All that the 5-page SJS Petition prayed for was "that the question raised in
paragraph 9 hereof be resolved." In other words, it merely sought an opinion of
the trial court on whether the speculated acts of religious leaders endorsing
elective candidates for political offices violated the constitutional principle on
the separation of church and state. SJS did not ask for a declaration of its rights
and duties; neither did it pray for the stoppage of any threatened violation of its
declared rights. Courts, however, are proscribed from rendering an advisory
opinion.141 In sum, a petition for declaratory relief must satisfy six requisites:

[F]irst, the subject matter of the controversy must be a deed, will, contract or
other written instrument, statute, executive order or regulation, or ordinance;
second, the terms of said documents and the validity thereof are doubtful and
require judicial construction; third, there must have been no breach of the
documents in question; fourth, there must be an actual justiciable controversy or
the "ripening seeds" of one between persons whose interests are adverse; fifth,
the issue must be ripe for judicial determination; and sixth, adequate relief is not
available through other means or other forms of action or
proceeding.142 (Emphases omitted)

We rule that the PEZA erred in availing itself of a petition for declaratory relief
against the City. The City had already issued demand letters and real property
tax assessment against the PEZA, in violation of the PEZA’s alleged tax-exempt
status under its charter. The Special Economic Zone Act of 1995, the subject
matter of PEZA’s petition for declaratory relief, had already been breached. The
trial court, therefore, had no jurisdiction over the petition for declaratory relief.
There are several aspects of jurisdiction.143 Jurisdiction over the subject matter is
"the power to hear and determine cases of the general class to which the
proceedings in question belong."144 It is conferred by law, which may either be
the Constitution or a statute.145 Jurisdiction over the subject matter means "the
nature of the cause of action and the relief sought."146 Thus, the cause of action
and character of the relief sought as alleged in the complaint are examinedto
determine whether a court had jurisdiction over the subject matter.147 Any
decision rendered by a court without jurisdiction over the subjectmatter of the
action is void.148

Another aspect of jurisdiction is jurisdiction over the person. It is "the power of [a]
court to render a personal judgment or to subject the parties in a particular
action to the judgment and other rulings rendered in the action."149A court
automatically acquires jurisdiction over the person of the plaintiff upon the filing
of the initiatory pleading.150With respect to the defendant, voluntary
appearance in court or a valid service of summons vests the court with
jurisdiction over the defendant’s person.151 Jurisdiction over the person of the
defendant is indispensable in actions in personamor those actions based on a
party’s personal liability.152 The proceedings in an action in personamare void if
the court had no jurisdiction over the person of the defendant.153

Jurisdiction over the resor the thing under litigation is acquired either "by the
seizure of the property under legal process, whereby it is brought into actual
custody of the law; or asa result of the institution of legal proceedings, in which
the power of the court is recognized and made effective."154 Jurisdiction over
the res is necessary in actions in remor those actions "directed against the thing
or property or status of a person and seek judgments with respect thereto as
against the whole world."155 The proceedings in an action in rem are void if the
court had no jurisdiction over the thing under litigation.156

In the present case, the Regional Trial Court had no jurisdiction over the subject
matter of the action, specifically, over the remedy sought. As this court
explained in Malana v. Tappa:157

. . . an action for declaratory relief presupposes that there has been no actual
breach of the instruments involved or of rights arising thereunder. Since the
purpose of an action for declaratory relief is to secure an authoritative
statement of the rights and obligations of the parties under a statute, deed, or
contract for their guidance in the enforcement thereof, or compliance
therewith, and not to settle issues arising from an alleged breach thereof, it may
be entertained only before the breach or violation of the statute, deed, or
contract to which it refers. A petition for declaratory relief gives a practical
remedy for ending controversies that have not reached the state where
another relief is immediately available; and supplies the need for a form of
action that will set controversies at rest before they lead to a repudiation of
obligations, an invasion of rights, and a commission of wrongs.

Where the law or contract has already been contravened prior to the filing of
an action for declaratory relief, the courts can no longer assume jurisdiction over
the action. In other words, a court has no more jurisdiction over an action for
declaratory relief if its subject has already been infringed or transgressed before
the institution of the action.158 (Emphasis supplied)

The trial court should have dismissed the PEZA’s petition for declaratory relief for
lack of jurisdiction.

Once an assessment has already been issued by the assessor, the proper
remedy of a taxpayer depends on whether the assessment was erroneous or
illegal.

An erroneous assessment "presupposes that the taxpayer is subject to the tax

but is disputing the correctness of the amount assessed."159 With an erroneous
assessment, the taxpayer claims that the local assessor erred in determining any
of the items for computing the real property tax, i.e., the value of the real
property or the portion thereof subject to tax and the proper assessment levels.
In case of an erroneous assessment, the taxpayer must exhaust the
administrative remedies provided under the Local Government Code before
resorting to judicial action.

The taxpayer must first pay the realproperty tax under protest. Section 252 of the
Local Government Code provides:

SECTION 252. Payment Under Protest. -(a) No protest shall be entertained unless
the taxpayer first paysthe tax. There shall be annotated on the tax receipts the
words "paid under protest". The protest in writing must be filed within thirty (30)
days from payment of the tax to the provincial, city treasurer or municipal
treasurer, in the case of a municipality within Metropolitan Manila Area, who
shall decide the protest within sixty (60) days from receipt.

(b) The tax or a portion thereof paidunder protest, shall be held in trust by
the treasurer concerned.

(c) In the event that the protest is finally decided in favor of the taxpayer,
the amount or portion of the tax protested shall be refunded to the
protestant, or applied as tax credit against his existing or future tax liability.

(d) In the event that the protest is denied or upon the lapse of the sixty
day period prescribed in subparagraph (a), the taxpayer may avail of the
remedies as provided for in Chapter 3, Title II, Book II of this Code.

Should the taxpayer find the action on the protest unsatisfactory, the taxpayer
may appeal with the Local Board of Assessment Appeals within 60 days from
receipt of the decision on the protest:

SECTION 226. Local Board of Assessment Appeals. - Any owner or person having
legal interest in the property who is not satisfied with the action of the provincial,
city or municipal assessor in the assessment of his property may, within sixty (60)
days from the date of receipt of the written notice of assessment, appeal to the
Board of Assessment Appeals of the provincial or city by filing a petition under
oath in the form prescribed for the purpose, together with copies of the tax
declarations and such affidavits or documents submitted in support of the
appeal.

Payment under protest and appeal to the Local Board of Assessment Appeals
are "successive administrative remedies to a taxpayer who questions the
correctness of an assessment."160 The Local Board Assessment Appeals shall not
entertain an appeal "without the action of the local assessor"161 on the protest.

If the taxpayer is still unsatisfied after appealing with the Local Board of
Assessment Appeals, the taxpayer may appeal with the Central Board of
Assessment Appeals within 30 days from receipt of the Local Board’s decision:

SECTION 229. Action by the Local Board of Assessment Appeals. - (a) The Board
shall decide the appeal within one hundred twenty (120) days from the date of
receipt of such appeal. The Board, after hearing, shall render its decision based
on substantial evidence or such relevant evidence on record as a reasonable
mind might accept as adequate to support the conclusion. (b) In the exercise
ofits appellate jurisdiction, the Board shall have the power to summon witnesses,
administer oaths, conduct ocular inspection, take depositions, and issue
subpoena and subpoena duces tecum. The proceedings of the Board shall be
conducted solely for the purpose of ascertaining the facts without necessarily
adhering to technical rules applicable in judicial proceedings.

(c) The secretary of the Board shall furnish the owner of the property or the
person having legal interest therein and the provincial or city assessor with a
copy of the decision of the Board. In case the provincial or city assessor concurs
in the revision or the assessment, it shall be his duty to notify the owner of the
property or the person having legal interest therein of such factusing the form
prescribed for the purpose. The owner of the property or the person having legal
interest therein or the assessor who is not satisfied with the decision of the Board,
may, within thirty (30) days after receipt of the decision of said Board, appeal to
the Central Board of Assessment Appeals, as herein provided. The decision of
the Central Board shall be final and executory. (Emphasis supplied)

On the other hand, an assessment is illegal if it was made without authority

under the law.162 In case of an illegal assessment, the taxpayer may directly
resort to judicial action without paying under protest the assessed tax and filing
an appeal with the Local and Central Board of Assessment Appeals.

In Ty v. Trampe,163 the Municipal Assessor of Pasig sent Alejandro B. Ty a notice of

assessment with respect to Ty’s real properties in Pasig. Without resorting to the
administrative remedies under the Local Government Code, Ty filed before the
Regional Trial Court a petition, praying that the trial court nullify the notice of
assessment. In assessing the real property taxes due, the Municipal Assessor used
a schedule of market values solely prepared by him. This, Ty argued, was void for
being contrary to the Local Government Code requiring that the schedule of
market values be jointly prepared by the provincial, city, and municipal
assessors of the municipalities within the Metropolitan Manila Area.
This court ruled that the assessmentwas illegal for having been issued without
authority of the Municipal Assessor. Reconciling provisions of the Real Property
Tax Code and the Local Government Code, this court held that the schedule of
market valuesmust be jointly prepared by the provincial, city, and municipal
assessors of the municipalities within the Metropolitan Manila Area.

As to the issue of exhaustion of administrative remedies, this court held that Ty

did not err in directly resorting to judicial action. According to this court,
payment under protest is required only "where there is a question as to the
reasonableness of the amount assessed."164 As to appeals before the Local and
Central Board of Assessment Appeals, they are "fruitful only where questions of
fact are involved."165

Ty raised the issue of the legality of the notice of assessment, an issue that did
not go into the reasonableness of the amount assessed. Neither did the issue
involve a question of fact. Ty raised a question of law and, therefore, need not
resort to the administrative remedies provided under the Local Government
Code.

In the present case, the PEZA did not avail itself of any of the remedies against a
notice of assessment. A petition for declaratory relief is not the proper remedy
once a notice of assessment was already issued.

Instead of a petition for declaratory relief, the PEZA should have directly resorted
to a judicial action. The PEZA should have filed a complaint for injunction, the
"appropriate ordinary civil action"166 to enjoin the City from enforcing its demand
and collecting the assessed taxes from the PEZA. After all, a declaratory
judgment as to the PEZA’s tax-exempt status is useless unless the City isenjoined
from enforcing its demand.

Injunction "is a judicial writ, process or proceeding whereby a party is ordered to

do or refrain from doing a certain act."167 "It may be the main action or merely a
provisional remedy for and as incident in the main action."168 The essential
requisites of a writ of injunction are: "(1) there must be a right in esseor the
existence of a right to be protected; and (2) the act against which the
injunction is directed to constitute a violation of such right."169

We note, however, that the City confused the concepts of jurisdiction and
venue in contending that the Regional Trial Court of Pasay had no jurisdiction
because the real properties involved in this case are located in the City of Lapu-
Lapu.

On the one hand, jurisdiction is "the power to hear and determine cases of the
general class to which the proceedings in question belong."170 Jurisdiction is a
matter of substantive law.171 Thus, an action may be filed only with the court or
tribunal where the Constitution or a statute says it can be brought.172 Objections
to jurisdiction cannot be waived and may be brought at any stage of the
proceedings, even on appeal.173 When a case is filed with a court which has no
jurisdiction over the action, the court shall motu propriodismiss the case.174

On the other hand, venue is "the place of trial or geographical location in which
an action or proceeding should be brought." 175 In civil cases, venue is a matter
of procedural law.176 A party’s objections to venue must be brought at the
earliest opportunity either in a motion to dismiss or in the answer; otherwise the
objection shall be deemed waived.177 When the venue of a civil action is
improperly laid, the court cannot motu propriodismiss the case.178

The venue of an action depends on whether the action is a real or personal

action. Should the action affect title to or possession of real property, or interest
therein, it is a real action. The action should be filed in the proper court which
has jurisdiction over the area wherein the real property involved, or a portion
thereof, is situated.179 If the action is a personal action, the action shall be filed
with the proper court where the plaintiff or any of the principal plaintiffs resides,
or where the defendant or any of the principal defendants resides, or in the
case of a non-resident defendant where he may be found, at the election of
the plaintiff.180

The City was objecting to the venue of the action, not to the jurisdiction of the
Regional Trial Court of Pasay. In essence, the City was contending that the
PEZA’s petition is a real action as it affects title to or possession of real property,
and, therefore, the PEZA should have filed the petition with the Regional Trial
Court of Lapu-Lapu City where the real properties are located. However,
whatever objections the City has against the venue of the PEZA’s action for
declaratory relief are already deemed waived. Objections to venue must be
raised at the earliest possible opportunity.181 The City did not file a motion to
dismiss the petition on the ground that the venue was improperly laid. Neither
did the City raise this objection in its answer.

In any event, the law sought to be judicially interpreted in this case had already
been breached. The Regional Trial Court of Pasay, therefore, had no jurisdiction
over the PEZA’s petition for declaratory relief against the City.

III.

The Court of Appeals had no jurisdiction

over the PEZA’s petition for certiorari
against the Province of Bataan
Appeal is the remedy "to obtain a reversal or modification of a judgment on the
merits."182 A judgment on the merits is one which "determines the rights and
liabilities of the parties based on the disclosed facts, irrespective of the formal,
technical or dilatory objections."183 It is not even necessary that the case
proceeded to trial.184 So long as the "judgment is general"185 and "the parties
had a full legal opportunity to be heard on their respective claims and
contentions,"186 the judgment is on the merits.

On the other hand, certiorari is a special civil action filed to annul or modify a
proceeding of a tribunal, board, or officer exercising judicial or quasi-judicial
functions.187 Certiorari, which in Latin means "to be more fully informed,"188was
originally a remedy in the common law. This court discussed the history of the
remedy of certiorari in Spouses Delos Santos v. Metropolitan Bank and Trust
Company:189

In the common law, from which the remedy of certiorari evolved, the writ of
certiorari was issued out of Chancery, or the King’s Bench, commanding agents
or officers of the inferior courts to return the record of a cause pending before
them, so as to give the party more sure and speedy justice, for the writ would
enable the superior court to determine froman inspection of the record whether
the inferior court’s judgment was rendered without authority. The errors were of
such a nature that, if allowed to stand, they would result in a substantial injury to
the petitioner to whom no other remedy was available. If the inferior court
acted without authority, the record was then revised and corrected in matters
of law. The writ of certiorari was limited to cases in which the inferior court was
said to be exceeding its jurisdiction or was not proceeding according to
essential requirements of law and would lie only to review judicial or quasi-
judicial acts.190

In our jurisdiction, the term "certiorari" is used in two ways. An appeal before this
court raising pure questions of law is commenced by filing a petition for
reviewon certiorari under Rule 45 of the Rules of Court. An appeal by certiorari,
which continues the proceedings commenced before the lower courts,191 is filed
to reverse or modify judgments or final orders.192 Under the Rules, an appeal by
certiorarimust be filed within 15 days from notice of the judgment or final order,
or of the denial of the appellant’s motion for new trial or reconsideration.193

A petition for certiorari under Rule 65, on the other hand, is an independent and
original action filed to set aside proceedings conducted without or in excess of
jurisdiction or with grave abuse of discretion amounting to lack or excess of
jurisdiction.194 Under the Rules, a petition for certiorari may only be filed if there is
no appeal or any plain, speedy, or adequate remedy in the ordinary course of
law.195 The petition must be filed within 60 days from notice of the judgment,
order, or resolution.196
Because of the longer period to file a petition for certiorari, some litigants
attempt to file petitions for certiorari as substitutes for lost appeals by certiorari.
However, Rule 65 is clear that a petition for certiorari will not prosper if appeal is
available. Appealis the proper remedy even if the error, or one of the errors,
raised is grave abuse of discretion on the part of the court rendering
judgment.197 If appeal is available, a petition for certiorari cannot be filed.

In this case, the trial court’s decision dated January 31, 2007 is a judgment on
the merits. Based on the facts disclosed by the parties, the trial court declared
the PEZA liable to the Province of Bataan for real property taxes. The PEZA’s
proper remedy against the trial court’s decision, therefore, is appeal.

Since the PEZA filed a petition for certiorari against the trial court’s decision, it
availed itself of the wrong remedy. As the Province of Bataan contended, the
trial court’s decision dated January 31, 2007 "is only an error of judgment
appealable to the higher level court and may not be corrected by filing a
petition for certiorari."198 That the trial court judge allegedly committed grave
abuse of discretion does not make the petition for certiorari the correct remedy.
The PEZA should haveraised this ground in an appeal filed within 15 days from
notice of the assailed resolution.

This court, "in the liberal spirit pervading the Rules of Court and in the interest of
substantial justice,"199 has treated petitions for certiorari as an appeal: "(1) if the
petition for certiorari was filed within the reglementary period within which to file
a petition for review on certiorari; (2) when errors of judgment are averred; and
(3) when there is sufficient reason to justify the relaxation of the
rules."200 Considering that "the nature of an action is determined by the
allegationsof the complaint or the petition and the character of the relief
sought,"201 a petition which "actually avers errors of judgment rather than errors
than that of jurisdiction"202 may be considered a petition for review.

However, suspending the application of the Rules has its disadvantages.

Relaxing procedural rules may reduce the "effective enforcement of substantive
rights,"203 leading to "arbitrariness, caprice, despotism, or whimsicality in the
settlement of disputes."204 Therefore, for this court to suspend the application of
the Rules, the accomplishment of substantial justice must outweigh the
importance of predictability of court procedures.

The PEZA’s petition for certiorari may be treated as an appeal. First, the petition
for certiorari was filed withinthe 15-day reglementary period for filing an appeal.
The PEZA filed its petition for certiorari before the Court of Appeals on October
15, 2007,205 which was 12 days from October 3, 2007206 when the PEZA had
notice of the trial court’s order denying the motion for reconsideration.
Second, the petition for certiorari raised errors of judgment. The PEZA argued
that the trial court erred in ruling that it is not exempt from payment of real
property taxes given Section 21 of Presidential Decree No. 66 and Sections 11
and 51 of the Special Economic Zone Act of 1995.207

Third, there is sufficient reason to relax the rules given the importance of the
substantive issue presented in this case.

However, the PEZA’s petition for certiorari was filed before the wrong court. The
PEZA should have filed its petition before the Court of Tax Appeals.

The Court of Tax Appeals has the exclusive appellate jurisdiction over local tax
cases decided by Regional Trial Courts. Section 7, paragraph (a)(3) of Republic
Act No. 1125, as amended by Republic Act No. 9282, provides:

Sec. 7. Jurisdiction. – The [Court of Tax Appeals] shall exercise:

a. Exclusive appellate jurisdiction to review by appeal, as herein provided:

....

3. Decisions, orders or resolutions of the Regional Trial Courts in local tax

cases originally decided or resolved by them in the exercise of their
original or appellate jurisdiction[.]

The local tax cases referred to in Section 7, paragraph (a)(3) of Republic Act No.
1125, as amended, include cases involving real property taxes. Real property
taxation is governed by Book II of the Local Government Code on "Local
Taxation and Fiscal Matters." Real property taxes are collected by the Local
Treasurer,208 not by the Bureau of Internal Revenue in charge of collecting
national internal revenue taxes, fees, and charges.209

Section 7, paragraph (a)(5) of Republic Act No. 1125, as amended by Republic

Act No. 9282, separately provides for the exclusive appellate jurisdiction of the
Court of Tax Appeals over decisions of the Central Board of Assessment Appeals
involving the assessment or collection of real property taxes:

Sec. 7. Jurisdiction. – The [Court of Tax Appeals] shall exercise:

a. Exclusive appellate jurisdiction to review by appeal, as herein provided:

....
5. Decisions of the Central Board of Assessment Appeals in the exercise of its
appellate jurisdiction over cases involving the assessment and taxation of real
property originally decided by the provincial or city board of assessment
appeals[.]

This separate provision, nevertheless, does not bar the Court of Tax Appeals from
taking cognizance of trial court decisions involving the collection of real
property tax cases. Sections 256210 and 266211 of the Local Government Code
expressly allow localgovernment units to file "in any court of competent
jurisdiction" civil actions to collect basic real property taxes. Should the trial court
rule against them, local government units cannot be barred from appealing
before the Court of Tax Appeals – the "highly specialized body specifically
created for the purpose of reviewing tax cases."212

We have also ruled that the Court of Tax Appeals, not the Court of Appeals, has
the exclusive original jurisdiction over petitions for certiorari assailing interlocutory
orders issued by Regional Trial Courts in a local tax case. We explained in The
City of Manila v. Hon. Grecia-Cuerdo213 that while the Court of Tax Appeals has
no express grant of power to issue writs of certiorari under Republic Act No.
1125,214 as amended, the tax court’s judicial power as defined in the
Constitution215 includes the power to determine "whether or not there has been
grave abuse of discretion amounting to lack or excess of jurisdiction on the part
of the [Regional Trial Court] in issuing an interlocutory order of jurisdiction in
cases falling within the exclusive appellate jurisdiction of the tax court."216 We
further elaborated:

Indeed, in order for any appellate court to effectively exercise its appellate
jurisdiction, it must have the authority to issue, among others, a writ of certiorari.
In transferring exclusive jurisdiction over appealed tax cases to the CTA, it can
reasonably be assumed that the law intended to transfer also such power as is
deemed necessary, if not indispensable, in aid of such appellate jurisdiction.
There is no perceivable reason why the transfer should only be considered as
partial, not total.

....

If this Court were to sustain petitioners' contention that jurisdiction over their
certiorari petition lies with the CA, this Court would be confirming the exercise by
two judicial bodies, the CA and the CTA, of jurisdiction over basically the same
subject matter – precisely the split-jurisdiction situation which is anathema to the
orderly administration of justice.The Court cannot accept that such was the
legislative motive, especially considering that the law expressly confers on the
CTA, the tribunal with the specialized competence over tax and tariff matters,
the role of judicial review over local tax cases without mention of any other
court that may exercise such power. Thus, the Court agrees with the ruling of the
CA that since appellate jurisdiction over private respondents' complaint for tax
refund is vested in the CTA, it follows that a petition for certiorari seeking
nullification of an interlocutory order issued in the said case should, likewise, be
filed with the same court. To rule otherwise would lead to an absurd situation
where one court decides an appeal in the main case while another court rules
on an incident in the very same case.

Stated differently, it would be somewhat incongruent with the pronounced

judicial abhorrence to split jurisdiction to conclude that the intention of the law
is to divide the authority over a local tax case filed with the RTC by giving to the
CA or this Court jurisdiction to issue a writ of certiorari against interlocutory orders
of the RTC but giving to the CTA the jurisdiction over the appeal from the
decision of the trial court in the same case. It is more in consonance with logic
and legal soundness to conclude that the grant of appellate jurisdiction to the
CTA over tax cases filed in and decided by the RTC carries withit the power to
issue a writ of certiorari when necessary in aid of such appellate jurisdiction. The
supervisory power or jurisdiction of the CTA to issue a writ of certiorari in aid of its
appellate jurisdiction should co-exist with, and be a complement to, its
appellate jurisdiction to review, by appeal, the final orders and decisionsof the
RTC, in order to have complete supervision over the acts of the
latter.217 (Citations omitted)

In this case, the petition for injunction filed before the Regional Trial Court of
Pasay was a local tax case originally decided by the trial court in its original
jurisdiction. Since the PEZA assailed a judgment, not an interlocutory order, of
the Regional Trial Court, the PEZA’s proper remedy was an appeal to the Court
of Tax Appeals.

Considering that the appellate jurisdiction of the Court of Tax Appeals is to the
exclusion of all other courts, the Court of Appeals had no jurisdiction to take
cognizance of the PEZA’s petition. The Court of Appeals acted without
jurisdiction in rendering the decision in CA-G.R. SP No. 100984. Its decision in CA-
G.R. SP No. 100984 is void.218

The filing of appeal in the wrong court does not toll the period to appeal.
Consequently, the decision of the Regional Trial Court, Branch 115, Pasay City,
became final and executory after the lapse of the 15th day from the PEZA’s
receipt of the trial court’s decision.219 The denial of the petition for injunction
became final and executory.

IV.
 The remedy of a taxpayer depends on the
stage in which the local government unit
is enforcing its authority to impose real
property taxes

The proper remedy of a taxpayer depends on the stage in which the local
government unit is enforcing its authority to collect real property taxes. For the
guidance of the members of the bench and the bar, we reiterate the
taxpayer’s remedies against the erroneous or illegal assessment of real property
taxes.

Exhaustion of administrative remedies under the Local Government Code is

necessary in cases of erroneous assessments where the correctness of the
amount assessed is assailed. The taxpayer must first pay the tax then file a
protest with the Local Treasurer within 30 days from date of payment of tax.220 If
protest is denied or upon the lapse of the 60-day period to decide the protest,
the taxpayer may appeal to the Local Board of Assessment Appeals within 60
days from the denial of the protest or the lapse of the 60-day period to decide
the protest.221 The Local Board of Assessment Appeals has 120 days to decide
the appeal.222

If the taxpayer is unsatisfied withthe Local Board’s decision, the taxpayer may
appeal before the Central Board of Assessment Appeals within 30 days from
receipt of the Local Board’s decision.223

The decision of the Central Board of Assessment Appeals is appealable before

the Court of Tax Appeals En Banc.224 The appeal before the Court of Tax
Appeals shall be filed following the procedure under Rule 43 of the Rules of
Court.225

The Court of Tax Appeals’ decision may then be appealed before this court
through a petition for review on certiorari under Rule 45 of the Rules of Court
raising pure questions of law.226

In case of an illegal assessment where the assessment was issued without

authority, exhaustion of administrative remedies is not necessary and the
taxpayer may directly resort to judicial action.227 The taxpayer shall file a
complaint for injunction before the Regional Trial Court228 to enjoin the local
government unit from collecting real property taxes.

The party unsatisfied with the decision of the Regional Trial Court shall file an
appeal, not a petition for certiorari, before the Court of Tax Appeals, the
complaint being a local tax case decided by the Regional Trial Court.229 The
appeal shall be filed within fifteen (15) days from notice of the trial court’s
decision.

The Court of Tax Appeals’ decision may then be appealed before this court
through a petition for review on certiorari under Rule 45 of the Rules of Court
raising pure questions of law.230

In case the local government unit has issued a notice of delinquency, the
taxpayer may file a complaint for injunction to enjoin the impending sale of the
real property at public auction. In case the local government unit has already
sold the property at public auction, the taxpayer must first deposit with the court
the amount for which the real property was sold, together with interest of 2% per
month from the date ofsale to the time of the institution of action. The taxpayer
may then file a complaint to assail the validity of the public auction.231 The
decisions of the Regional Trial Court in these cases shall be appealable before
the Court of Tax Appeals,232 and the latter’s decisions appealable before this
court through a petition for review on certiorari under Rule 45 of the Rules of
Court.233

V.

The PEZA is exempt from payment of

real property taxes

The jurisdictional errors in this case render these consolidated petitions moot. We
do not review void decisions rendered without jurisdiction.

However, the PEZA alleged that several local government units, including the
City of Baguio and the Province of Cavite, have issued their respective real
property tax assessments against the PEZA. Other local government units will
likely follow suit, and either the PEZA or the local government units taxing the
PEZA may file their respective actions against each other.

In the interest of judicial economy234 and avoidance of conflicting decisions

involving the same issues,235 we resolve the substantive issue of whether the PEZA
is exempt from payment of real property taxes.

Real property taxes are annual taxes levied on real property such as lands,
buildings, machinery, and other improvements not otherwise specifically
exempted under the Local Government Code.236 Real property taxes are ad
valorem, with the amount charged based on a fixed proportion of the value of
the property.237 Under the law, provinces, cities, and municipalities within the
Metropolitan Manila Area have the power to levy real property taxes within their
respective territories.238
The general rule is that real properties are subject to real property taxes. This is
true especially since the Local Government Code has withdrawn exemptions
from real property taxes of all persons, whether natural or juridical:

SEC. 234. Exemptions from Real Property Tax. – The following are exempted from
payment of real property tax:

(a) Real property owned by the Republic of the Philippines or any of its
political subdivisions except when the beneficial use thereof has been
granted, for consideration or otherwise, to a taxable person;

(b) Charitable institutions, churches, parsonages or convents appurtenant

thereto, mosques, nonprofit or religious cemeteries and all lands, buildings,
and improvements actually, directly, and exclusively used for religious,
charitable or educational purposes;

(c) All machineries and equipment that are actually, directly and
exclusively used by local water districts and government-owned or –
controlled corporations engaged in the supply and distribution of water
and/or generation and transmission of electric power;

(d) All real property owned by duly registered cooperatives as provided

under R.A. No. 6938; and

(e) Machinery and equipment usedfor pollution control and

environmental protection.

Except as provided herein, any exemption from payment of real property taxes
previously granted to, or presently enjoyed by, all persons, whether natural or
juridical, including government-owned or -controlled corporations are hereby
withdrawn upon the effectivity of this Code. (Emphasis supplied)

The person liable for real property taxes is the "taxable person who had actual or
beneficial use and possession [of the real property for the taxable period,]
whether or not [the person owned the property for the period he or she is being
taxed]."239

The exceptions to the rule are provided in the Local Government Code. Under
Section 133(o), local government units have no power to levy taxes of any kind
on the national government, its agencies and instrumentalities and local
government units:
SEC. 133. Common Limitations on the Taxing Powers of Local Government Units.
– Unless otherwise provided herein, the exercise of taxing powers of provinces,
cities, municipalities, and barangays shall not extend to the levy of the following:

....

(o) Taxes, fees or charges of any kind on the National Government, its agencies
and instrumentalities and local government units.

Specifically on real property taxes, Section 234 enumerates the persons and real
property exempt from real property taxes:

SEC. 234. Exemptions from Real Property Tax. – The following are exempted from
payment of real property tax:

(a) Real property owned by the Republic of the Philippines or any of its
political subdivisions except when the beneficial use thereof has been
granted, for consideration or otherwise, to a taxable person;

(b) Charitable institutions, churches, parsonages or convents appurtenant

thereto, mosques, nonprofitor religious cemeteries and all lands, buildings,
and improvements actually, directly, and exclusively used for religious,
charitable or educational purposes;

(c) All machineries and equipment that are actually, directly and
exclusively used by local water districts and government-owned or –
controlled corporations engaged in the supply and distribution of water
and/or generation and transmission of electric power;

(d) All real property owned by duly registered cooperatives as provided

under R.A. No. 6938; and

(e) Machinery and equipment used for pollution control and

environmental protection.

Except as provided herein, any exemption from payment of real property tax
previously granted to, or presently enjoyed by, all persons, whether natural or
juridical, including all government-owned or -controlled corporations are hereby
withdrawn upon the effectivity of this Code. (Emphasis supplied)

For persons granted tax exemptions or incentives before the effectivity of the
Local Government Code, Section 193 withdrew these tax exemption privileges.
These persons consist of both natural and juridical persons, including
government-owned or controlled corporations:
SEC. 193. Withdrawal of Tax Exemption Privileges. – Unless otherwise provided in
this code, tax exemptions or incentives granted to or presently enjoyed by all
persons, whether natural or juridical, including government-owned or controlled
corporations, except local water districts, cooperatives duly registered under
R.A. 6938, non stock and non profit hospitals and educational institutions, are
hereby withdrawn upon effectivity of this Code.

As discussed, Section 234 withdrew all tax privileges with respect to real property
taxes. Nevertheless, local government units may grant tax exemptions under
such terms and conditions asthey may deem necessary:

SEC. 192. Authority to Grant Tax Exemption Privileges. – Local government units
may, through ordinances duly approved, grant tax exemptions, incentives or
reliefs under such terms and conditions as they may deem necessary.

In Mactan Cebu International Airport Authority v. Hon. Marcos,240 this court

classified the exemptions from real property taxes into ownership, character,
and usage exemptions. Ownership exemptions are exemptions based on the
ownership of the real property. The exemptions of real property owned by the
Republic of the Philippines, provinces, cities, municipalities, barangays, and
registered cooperatives fall under this classification.241 Character exemptions
are exemptions based on the character of the real property. Thus, no real
property taxes may be levied on charitable institutions, houses and temples of
prayer like churches, parsonages, or convents appurtenant thereto, mosques,
and non profitor religious cemeteries.242

Usage exemptions are exemptions based on the use of the real property. Thus,
no real property taxes may be levied on real property such as: (1) lands and
buildings actually, directly, and exclusively used for religious, charitable or
educational purpose; (2) machineries and equipment actually, directly and
exclusively used by local water districts or by government-owned or controlled
corporations engaged in the supply and distribution of water and/or generation
and transmission of electric power; and (3) machinery and equipment used for
pollution control and environmental protection.243

Persons may likewise be exempt from payment of real properties if their charters,
which were enacted or reenacted after the effectivity of the Local Government
Code, exempt them payment of real property taxes.244

V.

(A) The PEZA is an instrumentality of the national government

An instrumentality is "any agency of the National Government, not integrated
within the department framework, vested with special functions or jurisdiction by
law, endowed with some if not all corporate powers, administering special
funds, and enjoying operational autonomy, usually through a charter."245

Examples of instrumentalities of the national government are the Manila

International Airport Authority,246 the Philippine Fisheries Development
Authority,247 the Government Service Insurance System,248 and the Philippine
Reclamation Authority.249 These entities are not integrated within the
department framework but are nevertheless vested with special functions to
carry out a declared policy of the national government.

Similarly, the PEZA is an instrumentality of the national government. It is not

integrated within the department framework but is an agency attached to the
Department of Trade and Industry.250 Book IV, Chapter 7, Section 38(3)(a) of the
Administrative Code of 1987 defines "attachment": SEC. 38. Definition of
Administrative Relationship.– Unless otherwise expressly stated in the Code or in
other laws defining the special relationships of particular agencies,
administrative relationships shall be categorized and defined as follows:

....

(3) Attachment.– (a) This refers to the lateral relationship between the
department or its equivalent and the attached agency or corporation for
purposes of policy and program coordination. The coordination may be
accomplished by having the department represented in the governing board of
the attached agency or corporation, either as chairman or as a member, with
or without voting rights, if this is permitted by the charter; having the attached
corporation or agency comply with a system of periodic reporting which shall
reflect the progress of the programs and projects; and having the department
or its equivalent provide general policies through its representative in the board,
which shall serve as the framework for the internal policies of the attached
corporation or agency[.]

Attachment, which enjoys "a larger measure of independence"251 compared

with other administrative relationships such as supervision and control, is further
explained in Beja, Sr. v. Court of Appeals:252

An attached agency has a larger measure of independence from the

Department to which it is attached than one which is under departmental
supervision and control or administrative supervision. This is borne out by the
"lateral relationship" between the Department and the attached agency. The
attachment is merely for "policy and program coordination." With respect to
administrative matters, the independence of an attached agency from
Departmental control and supervision is further reinforced by the fact that even
an agency under a Department’s administrative supervision is free from
Departmental interference with respect to appointments and other personnel
actions "in accordance with the decentralization of personnel functions" under
the Administrative Code of 1987. Moreover, the Administrative Code explicitly
provides that Chapter 8 of Book IV on supervision and control shall not apply to
chartered institutions attached to a Department.253

With the PEZA as an attached agency to the Department of Trade and Industry,
the 13-person PEZA Board is chaired by the Department Secretary.254 Among the
powers and functions of the PEZA is its ability to coordinate with the Department
of Trade and Industry for policy and program formulation and
implementation.255 In strategizing and prioritizing the development of special
economic zones, the PEZA coordinates with the Department of Trade and
Industry.256

The PEZA also administers its own funds and operates autonomously, with the
PEZA Board formulating and approving the PEZA’s annual
budget.257 Appointments and other personnel actions in the PEZA are also free
from departmental interference, with the PEZA Board having the exclusive and
final authority to promote, transfer, assign and reassign officers of the PEZA.258

As an instrumentality of the national government, the PEZA is vested with special

functions or jurisdiction by law. Congress created the PEZA to operate,
administer, manage and develop special economic zones in the
Philippines.259 Special economic zones are areas with highly developed or which
have the potential to be developed into agro-industrial, industrial
tourist/recreational, commercial, banking, investment and financial
centers.260 By operating, administering, managing, and developing special
economic zones which attract investments and promote use of domestic labor,
the PEZA carries out the following policy of the Government: SECTION 2.
Declaration of Policy. — It is the declared policy of the government to translate
into practical realities the following State policies and mandates in the 1987
Constitution, namely:

(a) "The State recognizes the indispensable role of the private sector,
encourages private enterprise, and provides incentives to needed
investments." (Sec. 20, Art. II)

(b) "The State shall promote the preferential use of Filipino labor, domestic
materials and locally produced goods, and adopt measures that help
make them competitive." (Sec. 12, Art. XII) In pursuance of these policies,
the government shall actively encourage, promote, induce and
accelerate a sound and balanced industrial, economic and social
 development of the country in order to provide jobs to the people
especially those in the rural areas, increase their productivity and their
individual and family income, and thereby improve the level and quality
of their living condition through the establishment, among others, of
special economic zones in suitable and strategic locations in the country
and through measures that shall effectively attract legitimate and
productive foreign investments.261

Being an instrumentality of the national government, the PEZA cannot be taxed

by local government units.

Although a body corporate vested with some corporate powers,262 the PEZA is
not a government-owned or controlled corporation taxable for real property
taxes.

Section 2(13) of the Introductory Provisions of the Administrative Code of 1987

defines the term "government-owned or controlled corporation":

SEC. 2. General Terms Defined. – Unless the specific words of the text, or the
context as a whole, or a particular statute, shall require a different meaning:

....

(13) Government-owned or controlled corporation refers to any agency

organized as a stock or non-stock corporation, vested with functions relating to
public needs whether governmental or proprietary in nature, and owned by the
Government directly or through its instrumentalities either wholly, or, where
applicable as in the case of stock corporations, to the extent of at least fifty-one
(51) per cent of its capital stock: Provided, That government owned or
controlled corporations may be further categorized by the Department of the
Budget, the Civil Service Commission, and the Commission on Audit for purposes
of the exercise and discharge of their respective powers, functions and
responsibilities with respect to such corporations.

Government entities are created by law, specifically, by the Constitution or by

statute. In the case of government-owned or controlled corporations, they are
incorporated by virtue of special charters263 to participate in the market for
special reasons which may be related to dysfunctions or inefficiencies of the
market structure. This is to adjust reality as against the concept of full
competition where all market players are price takers. Thus, under the
Constitution, government-owned or controlled corporations are created in the
interest of the common good and should satisfy the test of economic
viability.264 Article XII, Section 16 of the Constitution provides:
Section 16. The Congress shall not, except by general law, provide for the
formation, organization, or regulation of private corporations. Government-
owned or controlled corporations may be created or established by special
charters in the interest of the common good and subject to the test of
economic viability.

Economic viability is "the capacity to function efficiently in business."265 To be

economically viable, the entity "should not go into activities which the private
sector can do better."266

To be considered a government-owned or controlled corporation, the entity

must have been organized as a stock or non-stock corporation.267

Government instrumentalities, on the other hand, are also created by law but
partake of sovereign functions. When a government entity performs sovereign
functions, it need not meet the test of economic viability. In Manila International
Airport Authority v. Court of Appeals,268 this court explained:

In contrast, government instrumentalities vested with corporate powers and

performing governmental orpublic functions need not meet the test of
economic viability. These instrumentalities perform essential public services for
the common good, services that every modern State must provide its citizens.
These instrumentalities need not be economically viable since the government
may even subsidize their entire operations. These instrumentalities are not the
"government-owned or controlled corporations" referred to in Section 16, Article
XII of the 1987 Constitution.

Thus, the Constitution imposes no limitation when the legislature creates

government instrumentalities vested with corporate powers but performing
essential governmental or public functions. Congress has plenary authority to
create government instrumentalities vested with corporate powers provided
these instrumentalities perform essential government functions or public services.
However, when the legislature creates through special charters corporations
that perform economic or commercial activities, such entities — known as
"government-owned or controlled corporations" — must meetthe test of
economic viability because they compete in the market place.

....

Commissioner Blas F. Ople, proponent of the test of economic viability,

explained to the Constitutional Commission the purpose of this test, as follows:

MR. OPLE: Madam President, the reason for this concern is really that when the
government creates a corporation, there is a sense in which this corporation
becomes exempt from the test of economic performance. We know what
happened in the past. If a government corporation loses, then it makes its claim
upon the taxpayers' money through new equity infusions from the government
and what is always invoked is the common good. That is the reason why this
year, out of a budget of ₱115 billion for the entire government, about ₱28 billion
of this will go into equity infusions to support a few government financial
institutions. And this is all taxpayers' money which could have been relocated to
agrarian reform, to social services like health and education, to augment the
salaries of grossly underpaid public employees. And yet this is all going down the
drain.

Therefore, when we insert the phrase "ECONOMIC VIABILITY" together with the
"common good," this becomes a restraint on future enthusiasts for state
capitalism to excuse themselves from the responsibility of meeting the market
test so that they become viable. And so, Madam President, I reiterate, for the
committee's consideration and I am glad that I am joined in this proposal by
Commissioner Foz, the insertion of the standard of "ECONOMIC VIABILITY OR THE
ECONOMIC TEST," together with the common good.

....

Clearly, the test of economic viability does not apply to government entities
vested with corporate powers and performing essential public services. The
State is obligated to render essential public services regardless of the economic
viability of providing such service. The noneconomic viability of rendering such
essential public service does not excuse the State from withholding such
essential services from the public.269 (Emphases and citations omitted)

The law created the PEZA’s charter. Under the Special Economic Zone Act of
1995, the PEZA was established primarily to perform the governmental function
of operating,administering, managing, and developing special economic zones
to attract investments and provide opportunities for preferential use of Filipino
labor.

Under its charter, the PEZA was created a body corporate endowed with some
corporate powers. However, it was not organized as a stock270 or non-
stock271 corporation. Nothing in the PEZA’s charter provides that the PEZA’s
capital is divided into shares.272 The PEZA also has no members 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 necessary to
augment [the PEZA’s] capital outlay shall be included in the General
Appropriations Act to be treated as an equity of the national government."273

The PEZA, therefore, need not be economically viable. It is not a government-

owned or controlled corporation liable for real property taxes.

V. (B)

The PEZA assumed the non-profit character, including the tax exempt status, of
the EPZA

The PEZA’s predecessor, the EPZA, was declared non-profit in character with all
its revenues devoted for its development, improvement, and maintenance.
Consistent with this non-profit character, the EPZA was explicitly declared
exempt from real property taxes under its charter. Section 21 of Presidential
Decree No. 66 provides:

Section 21. Non-profit Character of the Authority; Exemption from Taxes. The
Authority shall be non-profit and shall devote and use all its returns from its
capital investment, as well as excess revenues from its operations, for the
development, improvement and maintenance and other related expenditures
of the Authority to pay its indebtedness and obligations and in furtherance and
effective implementation of the policy enunciated in Section 1 of this Decree. In
consonance therewith, the Authority is hereby declared exempt:

....

(b) From all income taxes, franchise taxes, realty taxes and all other kinds of
taxes and licenses to be paid to the National Government, its provinces, cities,
municipalities and other government agencies and instrumentalities[.]

The Special Economic Zone Act of 1995, on the other hand, does not specifically
exempt the PEZA from payment of real property taxes.

Nevertheless, we rule that the PEZA is exempt from real property taxes by virtue
of its charter. A provision in the Special Economic Zone Act of 1995 explicitly
exempting the PEZA is unnecessary. The PEZA assumed the real property
exemption of the EPZA under Presidential Decree No. 66.

Section 11 of the Special Economic Zone Act of 1995 mandated the EPZA "to
evolve into the PEZA in accordance with the guidelines and regulations set forth
in an executive order issued for this purpose." President Ramos then issued
Executive Order No. 282 in 1995, ordering the PEZA to assume the EPZA’s powers,
functions, and responsibilities under Presidential Decree No. 66 not inconsistent
with the Special Economic Zone Act of 1995:

SECTION 1. Assumption of EPZA’s Powers and Functions by PEZA. All the powers,
functions and responsibilities of EPZA as provided under its Charter, Presidential
Decree No. 66, as amended, insofar as they are not inconsistent with the
powers,functions and responsibilities of the PEZA, as mandated under Republic
Act No. 7916, shall hereafter be assumed and exercised by the PEZA.
Henceforth, the EPZA shall be referred to as the PEZA.

The following sections of the Special Economic Zone Act of 1995 provide for the
PEZA’s powers,functions, and responsibilities:

SEC. 5. Establishment of ECOZONES. – To ensure the viability and geographical

dispersal of ECOZONES through a system of prioritization, the following areas are
initially identified as ECOZONES, subject to the criteria specified in Section 6:

....

The metes and bounds of each ECOZONE are to be delineated and more
particularly described in a proclamation to be issued by the President of the
Philippines, upon the recommendation of the Philippine Economic Zone
Authority (PEZA), which shall be established under this Act, in coordination with
the municipal and / or city council, National Land Use Coordinating Committee
and / or the Regional Land Use Committee.

SEC. 6. Criteria for the Establishment of Other ECOZONES. – In addition to the

ECOZONES identified in Section 5 of this Act, other areas may be established as
ECOZONES in a proclamation to be issued by the President of the Philippines
subject to the evaluation and recommendation of the PEZA, based on a
detailed feasibility and engineering study which must conform to the following
criteria:

(a) The proposed area must be identified as a regional growth center in

the Medium-Term Philippine Development Plan or by the Regional
Development Council;

(b) The existence of required infrastructure in the proposed ECOZONE,

such as roads, railways, telephones, ports, airports, etc., and the suitability
and capacity of the proposed site to absorb such improvements;

(c) The availability of water source and electric power supply for use of
the ECOZONE;
 (d) The extent of vacant lands available for industrial and commercial
development and future expansion of the ECOZONE as well as of lands
adjacent to the ECOZONE available for development of residential areas
for the ECOZONE workers;

(e) The availability of skilled, semi-skilled and non-skilled trainable labor

force in and around the ECOZONE;

(f) The area must have a significant incremental advantage over the
existing economic zones and its potential profitability can be established;

(g) The area must be strategically located; and

(h) The area must be situated where controls can easily be established to
curtail smuggling activities.

Other areas which do not meet the foregoing criteria may be established as
ECOZONES: Provided, That the said area shall be developed only through local
government and/or private sector initiative under any of the schemes allowed in
Republic Act No. 6957 (the build-operate-transfer law), and without any
financial exposure on the part of the national government: Provided, further,
That the area can be easily secured to curtail smuggling activities: Provided,
finally, That after five (5) years the area must have attained a substantial degree
of development, the indicators of which shall be formulated by the PEZA.

SEC. 7. ECOZONE to be a Decentralized Agro-Industrial, Industrial, Commercial /

Trading, Tourist, Investment and Financial Community. - Within the framework of
the Constitution, the interest of national sovereignty and territorial integrity of the
Republic, ECOZONE shall be developed, as much as possible, into a
decentralized, self-reliant and self-sustaining industrial, commercial/trading,
agro-industrial, tourist, banking, financial and investment center with minimum
government intervention. Each ECOZONE shall be provided with transportation,
telecommunications, and other facilities needed to generate linkage with
industries and employment opportunitiesfor its own inhabitants and those of
nearby towns and cities.

The ECOZONE shall administer itself on economic, financial, industrial, tourism

development and such other matters within the exclusive competence of the
national government.

The ECOZONE may establish mutually beneficial economic relations with other
entities within the country, or, subject to the administrative guidance of the
Department of Foreign Affairs and/or the Department of Trade and Industry,
with foreign entities or enterprises.
Foreign citizens and companies owned by non-Filipinos in whatever proportion
may set up enterprises in the ECOZONE, either by themselves or in joint venture
with Filipinos in any sector of industry, international trade and commerce within
the ECOZONE. Their assets, profits and other legitimate interests shall be
protected: Provided, That the ECOZONE through the PEZA may require a
minimum investment for any ECOZONE enterprises in freely convertible
currencies: Provided, further, That the new investment shall fall under the
priorities, thrusts and limits provided for in the Act.

SEC. 8. ECOZONE to be Operated and Managed as Separate Customs Territory.

– The ECOZONE shall be managed and operated by the PEZA as separate
customs territory.

The PEZA is hereby vested with the authority to issue certificate of origin for
products manufactured or processed in each ECOZONE in accordance with the
prevailing rules or origin, and the pertinent regulations of the Department of
Trade and Industry and/or the Department of Finance.

SEC. 9. Defense and Security. – The defense of the ECOZONE and the security of
its perimeter fence shall be the responsibility of the national government in
coordination with the PEZA. Military forces sent by the national government for
the purpose of defense shall not interfere in the internal affairs of any of the
ECOZONE and expenditure for these military forces shall be borne by the
national government. The PEZA may provide and establish the ECOZONES’
internal security and firefighting forces.

SEC. 10. Immigration. – Any investor within the ECOZONE whose initial investment
shall not be less than One Hundred Fifty Thousand Dollars ($150,000.00), his/her
spouse and dependent children under twenty-one (21) years of age shall be
granted permanent resident status within the ECOZONE. They shall have
freedom of ingress and egress to and from the ECOZONE without any need of
special authorization from the Bureau of Immigration.

The PEZA shall issue working visas renewable every two (2) years to foreign
executives and other aliens, processing highly-technical skills which no Filipino
within the ECOZONE possesses, as certified by the Department of Labor and
Employment. The names of aliens granted permanent resident status and
working visas by the PEZA shall be reported to the Bureau of Immigration within
thirty (30) days after issuance thereof.

SEC. 13. General Powers and Functions of the Authority. – The PEZA shall have
the following powers and functions:
 (a) To operate, administer, manage and develop the ECOZONE
according to the principles and provisions set forth in this Act;

(b) To register, regulate and supervise the enterprises in the ECOZONE in

an efficient and decentralized manner;

(c) To coordinate with local government units and exercise general

supervision over the development, plans, activities and operations of the
ECOZONES, industrial estates, export processing zones, free trade zones,
and the like;

(d) In coordination with local government units concerned and

appropriate agencies, to construct,acquire, own, lease, operate and
maintain on its own or through contract, franchise, license, bulk purchase
from the private sector and build-operate-transfer scheme or joint
venture, adequate facilities and infrastructure, such as light and power
systems, water supply and distribution systems, telecommunication and
transportation, buildings, structures, warehouses, roads, bridges, ports and
other facilities for the operation and development of the ECOZONE;

(e) To create, operate and/or contractto operate such agencies and

functional units or offices of the authority as it may deem necessary;

(f) To adopt, alter and use a corporate seal; make contracts, lease, own
or otherwise dispose of personal or real property; sue and be sued; and
otherwise carry out its duties and functions as provided for in this Act;

(g) To coordinate the formulation and preparation of the development

plans of the different entities mentioned above;

(h) To coordinate with the National Economic Development Authority

(NEDA), the Department of Trade and Industry (DTI), the Department of
Science and Technology (DOST), and the local government units and
appropriate government agencies for policy and program formulation
and implementation; and

(i) To monitor and evaluate the development and requirements of entities

in subsection (a) and recommend to the local government units or other
appropriate authorities the location, incentives, basic services, utilities and
infrastructure required or to be made available for said entities.

SEC. 17. Investigation and Inquiries. – Upon a written formal complaint made
under oath, which on its face provides reasonable basis to believe that some
anomaly or irregularity might have been committed, the PEZA or the
administrator of the ECOZONE concerned, shall have the power to inquire into
the conduct of firms or employees of the ECOZONE and to conduct
investigations, and for that purpose may subpoena witnesses, administer oaths,
and compel the production of books, papers, and other evidences: Provided,
That to arrive at the truth, the investigator(s) may grant immunity from
prosecution to any person whose testimony or whose possessions of documents
or other evidence is necessary or convenient to determine the truth in any
investigation conducted by him or under the authority of the PEZA or the
administrator of the ECOZONE concerned.

SEC. 21. Development Strategy of the ECOZONE. - The strategy and priority of
development of each ECOZONE established pursuant to this Act shall be
formulated by the PEZA, in coordination with the Department of Trade and
Industry and the National Economic and Development Authority; Provided, That
such development strategy is consistent with the priorities of the national
government as outlined in the medium-term Philippine development plan. It
shall be the policy of the government and the PEZA to encourage and provide
Incentives and facilitate private sector participation in the construction and
operation of public utilities and infrastructure in the ECOZONE, using any of the
schemes allowed in Republic Act No. 6957 (the build-operate-transfer law).

SEC. 22. Survey of Resources. The PEZA shall, in coordination with appropriate
authorities and neighboring cities and municipalities, immediately conduct a
survey of the physical, natural assets and potentialities of the ECOZONE areas
under its jurisdiction.

SEC. 26. Domestic Sales. – Goods manufactured by an ECOZONE enterprise shall

be made available for immediate retail sales in the domestic market, subject to
payment of corresponding taxes on the raw materials and other regulations that
may be adopted by the Board of the PEZA. However, in order to protect the
domestic industry, there shall be a negative list of Industries that willbe drawn up
by the PEZA. Enterprises engaged in the industries included in the negative list
shall not be allowed to sell their products locally. Said negative list shall be
regularly updated by the PEZA.

The PEZA, in coordination with the Department of Trade and Industry and the
Bureau of Customs, shall jointly issue the necessary implementing rules and
guidelines for the effective Implementation of this section.

SEC. 29. Eminent Domain. – The areas comprising an ECOZONE may be

expanded or reduced when necessary. For this purpose, the government shall
have the power to acquire, either by purchase, negotiation or condemnation
proceedings, any private lands within or adjacent to the ECOZONE for:
 a. Consolidation of lands for zone development purposes;

b. Acquisition of right of way to the ECOZONE; and

c. The protection of watershed areas and natural assets valuable to the

prosperity of the ECOZONE.

If in the establishment of a publicly-owned ECOZONE, any person or group of

persons who has been occupying a parcel of land within the Zone has to be
evicted, the PEZA shall provide the person or group of persons concerned with
proper disturbance compensation: Provided, however, That in the case of
displaced agrarian reform beneficiaries, they shall be entitled to the benefits
under the Comprehensive Agrarian Reform Law, including but not limited to
Section 36 of Republic Act No. 3844, in addition to a homelot in the relocation
site and preferential employment in the project being undertaken.

SEC. 32. Shipping and Shipping Register. – Private shipping and related business
including private container terminals may operate freely in the ECOZONE,
subject only to such minimum reasonable regulations of local application which
the PEZA may prescribe.

The PEZA shall, in coordination with the Department of Transportation and

Communications, maintain a shipping register for each ECOZONE as a business
register of convenience for ocean-going vessels and issue related certification.

Ships of all sizes, descriptions and nationalities shall enjoy access to the ports of
the ECOZONE, subject only to such reasonable requirement as may be
prescribed by the PEZA In coordination with the appropriate agencies of the
national government.

SEC. 33. Protection of Environment. - The PEZA, in coordination with the

appropriate agencies, shall take concrete and appropriate steps and enact the
proper measure for the protection of the local environment.

SEC. 34. Termination of Business. - Investors In the ECOZONE who desire to

terminate business or operations shall comply with such requirements and
procedures which the PEZA shall set, particularly those relating to the clearing of
debts. The assets of the closed enterprise can be transferred and the funds con
be remitted out of the ECOZONE subject to the rules, guidelines and procedures
prescribed jointly by the Bangko Sentral ng Pilipinas, the Department of Finance
and the PEZA.
SEC. 35. Registration of Business Enterprises. - Business enterprises within a
designated ECOZONE shall register with the PEZA to avail of all incentives and
benefits provided for in this Act.

SEC. 36. One Stop Shop Center. - The PEZA shall establish a one stop shop center
for the purpose of facilitating the registration of new enterprises in the ECOZONE.
Thus, all appropriate government agencies that are Involved In registering,
licensing or issuing permits to investors shall assign their representatives to the
ECOZONE to attend to Investor’s requirements.

SEC. 39. Master Employment Contracts. - The PEZA, in coordination with the
Department of Tabor and Employment, shall prescribe a master employment
contract for all ECOZONE enterprise staff members and workers, the terms of
which provide salaries and benefits not less than those provided under this Act,
the Philippine Labor Code, as amended, and other relevant issuances of the
national government.

SEC. 41. Migrant Worker. - The PEZA, in coordination with the Department of
Labor and Employment, shall promulgate appropriate measures and programs
leading to the expansion of the services of the ECOZONE to help the local
governments of nearby areas meet the needs of the migrant workers.

SEC. 42. Incentive Scheme. - An additional deduction equivalent to one- half

(1/2) of the value of training expenses incurred in developing skilled or unskilled
labor or for managerial or other management development programs incurred
by enterprises in the ECOZONE can be deducted from the national
government's share of three percent (3%) as provided In Section 24.

The PEZA, the Department of Labor and Employment, and the Department of
Finance shall jointly make a review of the incentive scheme provided In this
section every two (2) years or when circumstances so warrant.

SEC. 43. Relationship with the Regional Development Council. - The PEZA shall
determine the development goals for the ECOZONE within the framework of
national development plans, policies and goals, and the administrator shall,
upon approval by the PEZA Board, submit the ECOZONE plans, programs and
projects to the regional development council for inclusion in and as inputs to the
overall regional development plan.

SEC. 44. Relationship with the Local Government Units. - Except as herein
provided, the local government units comprising the ECOZONE shall retain their
basic autonomy and identity. The cities shall be governed by their respective
charters and the municipalities shall operate and function In accordance with
Republic Act No. 7160, otherwise known as the Local Government Code of
1991.

SEC. 45. Relationship of PEZA to Privately-Owned Industrial Estates. – Privately-

owned industrial estates shall retain their autonomy and independence and
shall be monitored by the PEZA for the implementation of incentives.

SEC. 46. Transfer of Resources. - The relevant functions of the Board of

Investments over industrial estates and agri-export processing estates shall be
transferred to the PEZA. The resources of government owned Industrial estates
and similar bodies except the Bases Conversion Development Authority and
those areas identified under Republic Act No. 7227, are hereby transferred to
the PEZA as the holding agency. They are hereby detached from their mother
agencies and attached to the PEZA for policy, program and operational
supervision.

The Boards of the affected government-owned industrial estates shall be

phased out and only the management level and an appropriate number of
personnel shall be retained.

Government personnel whose services are not retained by the PEZA or any
government office within the ECOZONE shall be entitled to separation pay and
such retirement and other benefits theyare entitled to under the laws then in
force at the time of their separation: Provided, That in no case shall the
separation pay be less than one and one-fourth (1 1/4) month of every year of
service.

The non-profit character of the EPZA under Presidential Decree No. 66 is not
inconsistent with any of the powers, functions, and responsibilities of the PEZA.
The EPZA’s non-profit character, including the EPZA’s exemption from real
property taxes, must be deemed assumed by the PEZA.

In addition, the Local Government Code exempting instrumentalities of the

national government from real property taxes was already in force274 when the
PEZA’s charter was enacted in 1995. It would have been redundant to provide
for the PEZA’s exemption in its charter considering that the PEZA is already
exempt by virtue of Section 133(o) of the Local Government Code.

As for the EPZA, Commonwealth Act No. 470 or the Assessment Law was in force
when the EPZA’s charter was enacted. Unlike the Local Government Code,
Commonwealth Act No. 470 does not contain a provision specifically exempting
instrumentalities of the national government from payment of real property
taxes.275 It was necessary to put an exempting provision in the EPZA’s charter.
Contrary to the PEZA’s claim, however, Section 24 of the Special Economic Zone
Act of 1995 is not a basis for the PEZA’s exemption. Section 24 of the Special
Economic Zone Act of 1995 provides:

Sec. 24. Exemption from National and Local Taxes. — Except for real property
taxes on land owned by developers, no taxes, local and national, shall be
imposed on business establishments operating within the ECOZONE. In lieu
thereof, five percent (5%) of the gross income earned by all business enterprises
within the ECOZONEshall be paid and remitted as follows:

(a) Three percent (3%) to the National Government;

(b) Two percent (2%) which shall be directly remitted by the business
establishments to the treasurer's office of the municipality or city where
the enterprise is located. (Emphasis supplied)

Tax exemptions provided under Section 24 apply only to business establishments

operating within economic zones. Considering that the PEZA is not a business
establishment but an instrumentality performing governmental functions, Section
24 is inapplicable to the PEZA. Also, contrary to the PEZA’s claim, developers
ofeconomic zones, whether public or private developers, are liable for real
property taxes on lands they own. Section 24 does not distinguish between a
public and private developer. Thus, courts cannot distinguish.276 Unless the
public developer is exempt under the Local Government Code or under its
charter enacted after the Local Government Code’s effectivity, the public
developer must pay real property taxes on their land.

At any rate, the PEZA cannot be taxed for real property taxes even if it acts as a
developer or operator of special economic zones. The PEZA is an instrumentality
of the national government exempt from payment of real property taxes under
Section 133(o) of the Local Government Code. As this court said in Manila
International Airport Authority, "there must be express language in the law
empowering local governments to tax national government instrumentalities.
Any doubt whether such power exists is resolved against local governments."277

V. (C)

Real properties under the PEZA’s title are owned by the Republic of the
Philippines

Under Section 234(a) of the LocalGovernment Code, real properties owned by

the Republic of the Philippines are exempt from real property taxes:
SEC. 234. Exemptions from Real Property Tax. – The following are exempted from
payment of real property tax:

(a) Real property owned by the Republic of the Philippines or any of its political
subdivisions except when the beneficial use thereof has been granted, for
consideration or otherwise, to a taxable person[.]

Properties owned by the state are either property of public dominion or

patrimonial property. Article 420 of the Civil Code of the Philippines enumerates
property of public dominion:

Art. 420. The following things are property of public dominion:

(1) Those intended for public use, such as roads, canals, rivers, torrents,
ports and bridges constructed by the State, banks, shores, roadsteads,
and others of similar character;

(2) Those which belong to the State, without belonging for public use, and
are intended for some public service or for the development of the
national wealth.

Properties of public dominion are outside the commerce of man. These

properties are exempt from "levy, encumbrance or disposition through public or
private sale."278 As this court explained in Manila International Airport Authority:

Properties of public dominion, being for public use, are not subject to levy,
encumbrance or disposition through public or private sale. Any encumbrance,
levy on execution or auction sale of any property of public dominion is void for
being contrary to public policy. Essential public services will stop if properties of
public dominion are subject to encumbrances, foreclosures and auction
sale[.]279

On the other hand, all other properties of the state that are not intended for
public use or are not intended for some public service or for the development of
the national wealth are patrimonial properties. Article 421 of the Civil Code of
the Philippines provides:

Art. 421. All other property of the State, which is not of the character stated in
the preceding article, is patrimonial property.

Patrimonial properties are also properties of the state, but the state may dispose
of its patrimonial property similar to private persons disposing of their property.
Patrimonial properties are within the commerce of man and are susceptible to
prescription, unless otherwise provided.280
In this case, the properties sought to be taxed are located in publicly owned
economic zones. These economic zones are property of public dominion. The
City seeks to tax properties located within the Mactan Economic Zone,281 the
site of which was reserved by President Marcos under Proclamation No. 1811,
Series of 1979. Reserved lands are lands of the public domain set aside for
settlement or public use, and for specific public purposes by virtue of a
presidential proclamation.282 Reserved lands are inalienable and outside the
commerce of man,283 and remain property of the Republic until withdrawn from
publicuse either by law or presidential proclamation.284 Since no law or
presidential proclamation has been issued withdrawing the site of the Mactan
Economic Zone from public use, the property remains reserved land.

As for the Bataan Economic Zone, the law consistently characterized the
property as a port. Under Republic Act No. 5490, Congress declared Mariveles,
Bataan "a principal port of entry"285 to serve as site of a foreign trade zone where
foreign and domestic merchandise may be brought in without being subject to
customs and internal revenue laws and regulations of the Philippines.286

Section 4 of Republic Act No. 5490 provided that the foreign trade zone in
Mariveles, Bataan "shall at all times remain to be owned by the Government":

SEC. 4. Powers and Duties.– The Foreign Trade Zone Authority shall have the
following powers and duties:

a. To fix and delimit the site of the Zone which at all times remain to be owned
by the Government, and which shall have a contiguous and adequate area
with well defined and policed boundaries, with adequate enclosures to
segregate the Zone from the customs territory for protection of revenues,
together with suitable provisions for ingress and egress of persons, conveyance,
vessels and merchandise sufficient for the purpose of this Act[.] (Emphasis
supplied)

The port in Mariveles, Bataan then became the Bataan Economic Zone under
the Special Economic Zone Act of 1995.287 Republic Act No. 9728 then
converted the Bataan Economic Zone into the Freeport Area of Bataan.288

A port of entry, where imported goods are unloaded then introduced in the
market for public consumption, is considered property for public use. Thus,
Article 420 of the Civil Code classifies a port as property of public dominion. The
Freeport Area of Bataan, where the government allows tax and duty-free
importation of goods,289 is considered property of public dominion. The Freeport
Area of Bataan is owned by the state and cannot be taxed under Section
234(a) of the Local Government Code.
Properties of public dominion, even if titled in the name of an instrumentality as
in this case, remain owned by the Republic of the Philippines. If property
registered in the name of an instrumentality is conveyed to another person,the
property is considered conveyed on behalf of the Republic of the Philippines.
Book I, Chapter 12, Section 48 of the Administrative Code of 1987 provides:

SEC. 48. Official Authorized to Convey Real Property. – Whenever real property
of the government is authorized by law to be conveyed, the deed of
conveyance shall be executed in behalf of the government by the following:

....

(2) For property belonging to the Republic of the Philippines, but titled in the
name of any political subdivision orof any corporate agency or instrumentality,
by the executive head of the agency or instrumentality. (Emphasis supplied)

In Manila International Airport Authority, this court explained:

[The exemption under Section 234(a) of the Local Government Code] should be
read in relation with Section 133(o) of the same Code, which prohibits local
governments from imposing "[t]axes, fess or charges of any kind on the National
Government, its agencies and instrumentalitiesx x x." The real properties owned
by the Republic are titled either in the name of the Republic itself or in the name
of agencies or instrumentalities of the National Government.The Administrative
Code allows real property owned by the Republic to be titled in the name of
agencies or instrumentalities of the national government. Such real properties
remained owned by the Republic of the Philippines and continue to be exempt
from real estate tax.

The Republic may grant the beneficialuse of its real property to an agency or
instrumentality of the national government. This happens when title of the real
property is transferred to an agency or instrumentality even as the Republic
remains the owner of the real property. Such arrangement does not result in the
loss of the tax exemption/ Section 234(a) of the Local Government Code states
that real property owned by the Republic loses its tax exemption only if the
"beneficial use thereof has been granted, for consideration or otherwise, to a
taxable person." . . .290 (Emphasis in the original; italics supplied)

Even the PEZA’s lands and buildings whose beneficial use have been granted to
other persons may not be taxed with real property taxes. The PEZA may only
lease its lands and buildings to PEZA-registered economic zone enterprises and
entities.291 These PEZA-registered enterprises and entities, which operate within
economic zones, are not subject to real property taxes. Under Section 24 of the
Special Economic Zone Act of 1995, no taxes, whether local or national, shall be
imposed on all business establishments operating within the economic zones:
SEC. 24. Exemption from National and Local Taxes. – Except for real property on
land owned by developers, no taxes, local and national, shall be imposed on
business establishments operating within the ECOZONE. In lieu thereof, five
percent (5%) of the gross income earned by all business enterprises within the
ECOZONE shall be paid and remitted as follows:

a. Three percent (3%) to the National Government;

b. Two percent (2%) which shall be directly remitted by the business

establishments to the treasurer’s office of the municipality or city where the
enterprise is located.292 (Emphasis supplied)

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 establishments
operating withinthe Mactan Economic Zone:

SEC. 24. Exemption from National and Local Taxes. – Except for real property on
land owned by developers, no taxes, local and national, shall be imposed on
business establishments operating within the ECOZONE. In lieu thereof, five
percent (5%) of the gross income earned by all business enterprises within the
ECOZONE shall be paid and remitted as follows:

a. Three percent (3%) to the National Government;

b. Two percent (2%) which shall be directly remitted by the business

establishments to the treasurer’s office of the municipality or city where
the enterprise is located.293 (Emphasis supplied)

For its part, the Province of Bataan collects a fifth of the 5% final tax on gross
income paid by all business establishments operating within the Freeport Area of
Bataan:

Section 6. Imposition of a Tax Rate of Five Percent (5%) on Gross Income Earned.
- No taxes, local and national, shall be imposed on business establishments
operating withinthe FAB. In lieu thereof, said business establishments shall pay a
five percent (5%) final tax on their gross income earned in the following
percentages:

(a) One per centum (1%) to the National Government;

(b) One per centum (1%) to the Province of Bataan;

 (c) One per centum (1%) to the treasurer's office of the Municipality of
Mariveles; and

(d) Two per centum (2%) to the Authority of the Freeport of Area of
Bataan.294 (Emphasis supplied)

Petitioners, therefore, are not deprived of revenues from the operations of

economic zones within their respective territorial jurisdictions.

The national government ensured that loeal government units comprising

economic zones shall retain their basic autonomy and identity.295

All told, the PEZA is an instrumentality of the national

government.1âwphi1 Furthermore, the lands owned by the PEZA are real
properties owned by the Republic of the Philippines. The City of Lapu-Lapu and
the Province of Bataan cannot collect real property taxes from the PEZA.

WHEREFORE, the consolidated petitions are DENIED.

SO ORDERED.

FIRST DIVISION

G.R. No. 176508 January 12, 2015

SAINT MARY CRUSADE TO ALLEVIATE POVERTY OF BRETHREN FOUNDATION,

INC., Petitioner,
vs.
HON. TEODORO T. RIEL, ACTING PRESIDING JUDGE, REGIONAL TRIAL COURT,
NATIONAL CAPITAL JUDICIAL REGION, BRANCH 85, QUEZON CITY, Respondent.

x-----------------------x

UNIVERSITY OF THE PHILIPPINES, Intervenor.

DECISION

BERSAMIN, J.:

A petition for the judicial reconstitution of a Torrens title must strictly comply with
the requirements prescribed in Republic Act No. 26;1 otherwise, the petition
should be dismissed.
This case is a direct resort to the Court by petition for certiorari and mandamus.
The petitioner applied for the judicial reconstitution of Original Certificate of Title
(OCT) No. 1609 of the Register of Deeds of Quezon City, and for the issuance of
a new OCT in place thereof, docketed as L.R.C. Case No. Q-18987 (04), but
respondent Acting Presiding Judge of Branch 85 of the Regional Trial Court (RTC)
in Quezon City dismissed the petition for reconstitution through the assailed
order dated September 12, 2006. The petitioner alleges that the respondent
Judge thereby committed grave abuse of discretion and unlawful neglect of
performance of an act specifically enjoined upon him. Equally assailed is the
ensuing denial of its motion for reconsideration through the order dated
February 5, 2007.

The antecedents follow.

On October 28, 2004, the petitioner claimed in its petition for reconstitution that
the original copy of OCT No. 1609 had been burnt and lost in the fire that gutted
the Quezon City Register of Deeds in the late 80’s. Initially, respondent Judge
gave due course to the petition, but after the preliminary hearing, he dismissed
the petition for reconstitution through the first assailed order of September 12,
2006,2 to wit:

With the receipt of Report dated July 14, 2006 from Land Registration Authority
(LRA) recommending that the petition be dismissed, and considering the
Opposition filed by the Republic of the Philippines and University of the
Philippines, the above-entitled petition is hereby ordered DISMISSED.

On October 11, 2006, the petitioner moved for reconsideration of the

dismissal,3 attaching the following documents to support its petition for
reconstitution, namely: (1) the copy of the original application for registration
dated January 27, 1955; (2) the notice of initial hearing dated June 23, 1955; (3)
the letter of transmittal to the Court of First Instance in Quezon City; (4) the copy
of the Spanish Testimonial Title No. 3261054 dated March 25, 1977 in the name of
Eladio Tiburcio; (5) the copy of Tax Assessment No. 14238; and (6) the approved
Plan SWD-37457.

On February 5, 2007, the RTC denied the motion for reconsideration for lack of
any cogent or justifiable ground to reconsider.4

Hence, on February 22, 2007, the petitioner came directly to the Court alleging
that respondent Judge had "unfairly abused his discretion and unlawfully
neglected the performance of an act which is specifically enjoined upon him as
a duly [sic] under Rule 7, Section 8, of the Revised Rules of Court;"5 that "in finally
dismissing the herein subject Petition for Reconsideration, respondent Honorable
Acting Presiding Judge has acted without and in excess of his authority and with
grave abuse of discretion to the further damage and prejudice of the herein
petitioner;"6 and that it had no other remedy in the course of law except
through the present petition for certiorari and mandamus.

Issues

The Court directed respondent Judge and the Office of the Solicitor General
(OSG) to comment on the petition for certiorari and mandamus. Respondent
Judge submitted his comment on May 23, 2007,7 and the OSG its comment on
July 19, 2007.8 On November 13, 2007, the University of the Philippines (UP)
sought leave to intervene, attaching to its motion the intended
comment/opposition-in-intervention.9 The motion for the UP’s intervention was
granted on November 28, 2007.10 In turn, the petitioner presented its
consolidated reply on February 8, 2008.11 The parties, except respondent Judge,
then filed their memoranda in compliance with the Court’s directive.

Respondent Judge justified the dismissal of the petition for reconstitution by

citing the opposition by the OSG and the UP, as well as the recommendation of
the Land Registration Authority (LRA). He pointed out that the petitioner did not
present its purported Torrens title to be reconstituted; that the petitioner’s claim
was doubtful given the magnitude of 4,304,623 square meters as the land area
involved;12 and that the UP’s ownership of the portion of land covered by
petitioner’s claim had long been settled by the Court in a long line of cases.13

The OSG and the UP argued that by directly coming to the Court by petition for
certiorari and mandamus, the petitioner had availed itself of the wrong
remedies to substitute for its lostappeal; that the correct recourse for the
petitioner was an appeal considering that the two assailed orders already finally
disposed of the case; that the petitioner intended its petition for certiorari and
mandamus to reverse the final orders;14 that the petitioner further failed to
observe the doctrine of hierarchy of courts, despite the Court of Appeals (CA)
having concurrent jurisdiction with the Court over special civil actions under Rule
65;15 that the RTC would have gravely erred had it proceeded on the petition
for reconstitution despite the petitioner not having notified the adjoining owners
of the land or other parties with interest over the land;16 that the petitioner had
no factual and legal bases for reconstitution due to its failure to prove the
existence and validity of the certificate of title sought to be reconstituted, in
addition to the ownership of the land covered by the petition for reconstitution
being already settled in a long line of cases; that the petitioner’s claim over the
land was derived from the Deed of Assignment executed by one Marcelino
Tiburcio – the same person whose claim had long been settled and disposed of
in Tiburcio v. People’s Homesite and Housing Corporation and University of the
Philippines (106 Phil. 477), which vested title in the UP, and in Cañero v. University
of the Philippines (437 SCRA 630); and that the Deed of Transfer and
Conveyance dated November 26, 1925 executed by Tiburcio in favor of St.
Mary Village Association, Inc. was not a basis for the judicial reconstitution of title
accepted under Section 2 of Republic Act No. 26.

In its memorandum, the petitioner indicates that the RTC gravely abused its
discretion amounting to lackor excess of its jurisdiction in dismissing its petition for
reconstitution on the basis of the recommendation of the LRA and the
opposition of the Republic and the UPdespite having initially given due course
to the petition for reconstitution. It urges that the dismissal should be overturned
because it was not given a chance to comment on the recommendation of the
LRA, or to controvert the oppositions filed.17 It contends that the LRA report did
not substantiate the allegation of dismissal of the application for registration of
Marcelino Tiburcio on October 17, 1955, in addition to the veracity of the report
being questionable by virtue of its not having been under oath.18

Ruling

The petition for certiorari and mandamus, being devoid of procedural and
substantive merit, is dismissed.

Firstly, certiorari, being an extraordinary remedy, is granted only under the

conditions defined by the Rules of Court. The conditions are that: (1) the
respondent tribunal, board or officer exercising judicial or quasi judicial functions
has acted without or inexcess of its or his jurisdiction, or with grave abuse of
discretion amounting to lack or excess of jurisdiction; and (2) there is no appeal,
or any plain, speedy, and adequate remedy in the ordinary course of
law.19Without jurisdiction means that the court acted with absolute lack of
authority; there is excess of jurisdiction when the court transcends its power or
acts without any statutory authority; grave abuse of discretionimplies such
capricious and whimsical exercise of judgment as to be equivalent to lack or
excess of jurisdiction; in other words, power is exercised in an arbitrary or
despotic manner by reason of passion, prejudice, or personal hostility; and such
exercise isso patent or so gross as to amount to an evasion of a positive duty or
to a virtual refusal either to perform the duty enjoined or to act at all in
contemplation of law.20

The petition for certiorari and mandamus did not show how respondent Judge
could have been guilty of lacking or exceeding his jurisdiction, or could have
gravely abused his discretion amounting to lack or excess of jurisdiction. Under
Section 1221 of Republic Act No. 26, the law on the judicial reconstitution of a
Torrens title, the Regional Trial Court (as the successor of the Court of First
Instance) had the original and exclusive jurisdiction to act on the petition for
judicial reconstitution of title. Hence, the RTC neither lacked nor exceeded its
authority in acting on and dismissing the petition. Nor did respondent Judge
gravely abuse his discretion amounting to lack or excess of jurisdiction
considering that the petition for reconstitution involved land already registered
in the name of the UP, as confirmed by the LRA. Instead, it would have been
contrary to law had respondent Judge dealt with and granted the petition for
judicial reconstitution of title of the petitioner.

Secondly, the petitioner did not present the duplicate or certified copy of OCT
No. 1609. Thereby, it disobeyed Section 2 and Section 3 of Republic Act No. 26,
the provisions that expressly listed the acceptable bases for judicial
reconstitution of an existing Torrens title, to wit: Sec. 2. Original certificates of
titleshall be reconstituted from such of the sources hereunder enumerated
asmay be available, in the following order:

(a) The owner's duplicate of the certificate of title;

(b) The co-owner's, mortgagee's,or lessee's duplicate of the certificate of

title;

(c) A certified copy of the certificate of title, previously issued by the

register of deeds or by a legal custodian thereof;

(d) An authenticated copy of the decree of registration or patent, as the

case may be, pursuant to which the original certificate of title was issued;

(e) A document, on file in the registry of deeds, by which the property, the
description of which is given in said document, is mortgaged, leased or
encumbered, or an authenticated copy of said document showing that
its original had been registered; and

(f) Any other document which, in the judgment of the court, is sufficient
and proper basis for reconstituting the lost or destroyed certificate of title.

Sec. 3. Transfer certificates of title shall be reconstituted from such of the sources
hereunder enumerated asmay be available, in the following order:

(a) The owner's duplicate of the certificate of title;

(b) The co-owner's, mortgagee's,or lessee's duplicate of the certificate of

title;

(c) A certified copy of the certificate of title, previously issued by the

register of deeds or by a legal custodian thereof;
 (d) The deed of transfer or other document, on file in the registry of deeds,
containing the description of the property, or an authenticated copy
thereof, showing that its original had been registered, and pursuant to
which the lost or destroyed transfer certificate of title was issued;

(e) A document, on file in the registry of deeds, by which the property, the
description of which is given in said document, is mortgaged, leased or
encumbered, or an authenticated copy of said document showing that
its original had been registered; and

(f) Any other document which, in the judgment of the court, is sufficient
and proper basis for reconstituting the lost or destroyed certificate of title.

Thirdly, with the questioned orders of the RTC having finally disposed of the
application for judicial reconstitution, nothing more was left for the RTC to do in
the case. As of then, therefore, the correct recourse for the petitioner was to
appeal to the Court of Appeals by notice of appeal within 15 days from notice
of the denial of its motion for reconsideration. By allowing the period of appeal
toelapse without taking action, it squandered its right to appeal. Its present
resort to certiorari is impermissible, for an extraordinary remedy like certiorari
cannot be a substitute for a lost appeal. That the extraordinary remedy of
certiorari is not an alternative to an available remedy inthe ordinary course of
law is clear from Section 1 of Rule 65, which requires that there must be no
appeal, or any plain, speedy, and adequate remedy in the ordinary course of
law. Indeed, no error of judgment by a court will be corrected by certiorari,
which corrects only jurisdictional errors.22

Fourthly, the filing of the instant special civil action directly in this Court is in
disregard of the doctrine of hierarchy of courts. Although the Court has
concurrent jurisdiction with the Court of Appeals in issuing the writ of certiorari,
direct resort is allowed only when there are special, extraordinary or compelling
reasons that justify the same. The Court enforces the observance of the
hierarchy of courts in order to free itself from unnecessary, frivolous and
impertinent cases and thus afford time for it to deal with the more fundamental
and more essential tasks that the Constitution has assigned to it.23 There being
no special, important or compelling reason, the petitioner thereby violated the
observance of the hierarchy of courts, warranting the dismissal of the petition for
certiorari.

Finally, the land covered by the petition for judicial reconstitution related to the
same area that formed the UP campus.1âwphi1 The UP’s registered ownership
of the land comprising its campus has long been settled under the law.
Accordingly, the dismissal of the petition for judicial reconstitution by respondent
Judge only safeguarded the UP’s registered ownership. In so doing, respondent
Judge actually heeded the clear warnings to the lower courts and the Law
Profession in general against mounting or abetting any attack against such
ownership. One such warning was that in Cañero v. University of the
Philippines,24 as follows:

We strongly admonish courts and unscrupulous lawyers to stop entertaining

spurious cases seeking further to assail respondent UP’s title. These cases open
the dissolute avenues of graft to unscrupulous land-grabbers who prey like
vultures upon the campus of respondent UP. By such actions, they wittingly or
unwittingly aid the hucksters who want to earn a quick buck by misleading the
gullible to buy the Philippine counterpart of the proverbial London Bridge. It is
well past time for courts and lawyers to cease wasting their time and resources
on these worthless causes and take judicial notice of the fact that respondent
UP’s title had already been validated countless times by this Court. Any ruling
deviating from such doctrine is to be viewed as a deliberate intent to sabotage
the rule of law and will no longer be countenanced.25

WHEREFORE, the Court DISMISSES the petition for certiorari and mandamus for
lack of merit; and ORDERS the petitioner to pay the costs of suit.

SO ORDERED.

THIRD DIVISION

G.R. No. 192463, July 13, 2015

OMAIRA LOMONDOT AND SARIPA LOMONDOT, Petitioners, v. HON. RASAD G.

BALINDONG, PRESIDING JUDGE, SHARI'A DISTRICT COURT, 4TH SHARI'A JUDICIAL
DISTRICT, MARAWI CITY, LANAO DEL SUR AND AMBOG PANGANDAMUN AND
SIMBANATAO DIACA, Respondents.

DECISION

PERALTA, J.:

Before us is a petition for certiorari with prayer for the issuance of a writ of
demolition seeking to annul the Order1 dated November 9, 2009 of the Shari'a
District Court (SDC), Fourth Shari'a Judicial District, Marawi City, issued in Civil
Case No. 055-91, denying petitioners' motion for the issuance of a writ of
demolition, and the Orders2 dated January 5, 2010 and February 10, 2010
denying petitioners' first and second motions for reconsideration, respectively.

The antecedent facts are as follows:LawlibraryofCRAlaw

On August 16, 1991, petitioners Omaira and Saripa Lomondot filed with the SDC,
Marawi City, a complaint for recovery of possession and damages with prayer
for mandatory injunction and temporary restraining order against respondents
Ambog Pangandamun (Pangandamun) and Simbanatao Diaca (Diaca).
Petitioners claimed that they are the owners by succession of a parcel of land
located at Bangon, Marawi City, consisting an area of about 800 sq. meters;
that respondent Pangandamun illegally entered and encroached 100 sq. meter
of their land, while respondent Diaca occupied 200 sq. meters, as indicated in
Exhibits �A� and �K� submitted as evidence. Respondents filed their Answer
arguing that they are the owners of the land alleged to be illegally occupied.
Trial thereafter ensued.

On January 31, 2005, the SDC rendered a Decision,3 the dispositive portion of
which reads:LawlibraryofCRAlaw

ChanRoblesVirtualawlibrary

WHEREFORE, judgment is rendered as follows:LawlibraryofCRAlaw

1. DECLARING plaintiffs owners of the 800 square meter land borrowed and
turned over by BPI and described in the complaint and Exhibits �A� and �K�;

2. ORDERING defendants to VACATE the portions or areas they illegally

encroached as indicated in Exhibits �A� and �K� and to REMOVE whatever
improvements thereat introduced;

3. ORDERING defendants to jointly and severally pay plaintiffs (a) P50,000.00 as

moral damages; (b) P30,000.00 as exemplary damages; (C) P50,000.00 as
attorney's fees and the costs of the suit.

SO ORDERED 4

Respondents filed an appeal5 with us and petitioners were required to file their
Comment thereto. In a Resolution6 dated March 28, 2007, we dismissed the
petition for failure of respondents to sufficiently show that a grave abuse of
discretion was committed by the SDC as the decision was in accord with the
facts and the applicable law and jurisprudence. Respondents' motion for
reconsideration was denied with finality on September 17, 2007.7 The SDC
Decision dated January 31, 2005 became final and executory on October 31,
2007 and an entry of judgment8 was subsequently made.

Petitioners filed a motion9 for issuance of a writ of execution with prayer for a writ
of demolition.
On February 7, 2008, the SDC granted the motion10 for a writ of execution and
the writ was issued with the following fallo:LawlibraryofCRAlaw

ChanRoblesVirtualawlibrary
NOW THEREFORE, you are hereby commanded to cause the execution of the
aforesaid judgment. If defendants do not vacate the premises and remove the
improvements, you must secure a special order of the court to destroy, demolish
or remove the improvements on the property. The total amount awarded to
and demanded by the prevailing party is P150,000.00 (damages, attorney's fees
and the cost) which defendants must satisfy, pursuant to Section 8 (d) and (e),
Rule 39, Rules of Court. 11

The Sheriff then sent a demand letter12 to respondents for their compliance.

On February 3, 2009, petitioners filed a Motion13 for the Issuance of a Writ of

Demolition to implement the SDC Decision dated January 31, 2005. The motion
was set for hearing.

On March 4, 2009, the SDC issued an Order14 reading as

follows:LawlibraryofCRAlaw

ChanRoblesVirtualawlibrary
The plaintiffs, the prevailing party, filed a Motion for Writ of Demolition and the
motion was set for hearing on February 16, 2009. On this date, the plaintiffs,
without counsel, appeared. The defendants failed to appear. Thus, the court
issued an order submitting the motion for resolution.

Resolution of the motion for issuance of a Writ of Demolition should be held in

abeyance. First, defendant Ambog Pangandamun has filed on February 6, 2009
an Urgent Manifestation praying deferment of the hearing on the motion for writ
of execution. Second, Atty. Dimnatang T. Saro filed on February 13, 2009 a
Notice of Appearance with Motion to Postpone the hearing set on February 16,
2009 to study the records of the case as the records are not yet in his possession.
Third, the recent periodic report dated January 26, 2009 of the Sheriff shows
Sultan Alioden of Kabasaran is negotiating the parties whereby the defendant
Ambog Pangandamun will be made to pay the five (5)-meter land of the
plaintiffs encroached by him and that what remains to be ironed out is the fixing
of the amount.

WHEREFORE, the resolution on the Motion for Writ of Demolition is HELD IN

ABEYANCE. The Sheriff is DIRECTED to exert efforts to bring the parties back to the
negotiating table seeing to it that Sultan Alioden of Kabasaran is involved in the
negotiation. Atty. Saro is REQUIRED to file his comment on the motion for writ of
execution within fifteen (15) days from notice to guide the court in resolving the
incident in the event the negotiation fails.

SO ORDERED.15

On May 5, 2009, the SDC issued another Order16 which held in abeyance the
resolution of the motion for issuance of a writ of demolition and granted an
ocular inspection or actual measurement of petitioners' 800-sq.-meter land.

The SDC issued another Order17 dated May 14, 2009, which stated, among
others, that:LawlibraryofCRAlaw

ChanRoblesVirtualawlibrary
While the decision has become final and executory and a Writ of Execution has
been issued, there are instances when a Writ of Execution cannot be enforced
as when there is a supervening event that prevents the Sheriff to execute a Writ
of Execution.

The defendants claimed they have not encroached as they have already
complied with the Writ of Execution and their buildings are not within the area
claimed by the plaintiffs. This to the Court is the supervening event, thus the
order granting the request of Atty. Jimmy Saro, counsel for the defendants, to
conduct a survey to determine whether there is encroachment or not. Thus, the
Order dated May 5, 2009.

Wherefore, Engr. Hakim Laut Balt is hereby commissioned to conduct a survey of

the 800 square meters claimed by the plaintiffs. Said Eng. Balt is given a period
of one (1) month from notice within which to conduct the survey in the
presence of the parties.18

On November 9, 2009, the SDC issued the assailed Order19 denying petitioners'
motion for demolition. The Order reads in full:LawlibraryofCRAlaw

ChanRoblesVirtualawlibrary
It was on February 3, 2009 that the plaintiffs filed a Motion for Issuance of a Writ
of Demolition. The defendants filed their comment thereto on March 24, 2009.
They prayed that an ocular inspection and/or actual measurement of the 800
square meter land of the plaintiffs be made which the court granted, in the
greater interest of justice, considering that defendants claimed to have
complied with the writ of execution, hence there is no more encroachment of
plaintiffs� land.

The intercession of concerned leaders to effect amicable settlement and the

order to conduct a survey justified the holding in abeyance of the resolution of
the pending incident, motion for writ of demolition.

After attempts for settlement failed and after the commissioned Geodetic
Engineer to conduct the needed survey asked for relief, plaintiffs asked anew for
a writ of demolition. Defendants opposed the grant of the motion, alleging
compliance with the writ of execution, and prayed for appointment of another
Geodetic Engineer to conduct a survey and actual measurement of plaintiffs'
800 square meter land.

At this point in time, the court cannot issue a special order to destroy, demolish
or remove defendants' houses, considering their claim that they no longer
encroach any portion of plaintiffs� land.

Gleaned from Engineer Hakim Laut Balt's Narrative Report, he could have
conducted the required survey had not the plaintiffs dictated him where to start
the survey.

WHERFORE, the motion for issuance of a writ of demolition is DENIED. A survey is

still the best way to find out if indeed defendants' houses are within plaintiffs' 800
square meter land. Parties are, therefore, directed to choose and submit to the
court their preferred Geodetic Engineer to conduct the survey within ten (10)
days from notice. 20

Petitioners filed their motion for reconsideration which the SDC denied in an
Order21 dated January 5, 2010 saying that the motion failed to state the
timeliness of the filing of said motion and failed to comply with the requirements
of notice of hearing. Petitioners' second motion for reconsideration was also
denied in an Order22 dated February 10, 2010. The SDC directed the parties to
choose and submit their preferred Geodetic Engineer to conduct the survey
within 15 days from notice.

Undaunted, petitioners filed with the CA-Cagayan de Oro City a petition

for certiorari assailing the Orders issued by the SDC on November 9, 2009,
January 5, 2010 and February 10, 2010.

In a Resolution23 dated April 27, 2010, the CA dismissed the petition for lack of
jurisdiction, saying, among others, that:LawlibraryofCRAlaw

ChanRoblesVirtualawlibrary
xxxx

In pursuing the creation of Shari'a Appellate Court, the Supreme Court En Banc
even approved A.M. No. 99-4-06, otherwise known as Resolution Authorizing
the Organization of the Shari'a Appellate Court.
However, the Shari'a Appellate Court has not yet been organized until the
present. We, on our part, therefore, cannot take cognizance of the instant case
because it emanates from the Shari'a Courts, which is not among those courts,
bodies or tribunals enumerated under Chapter 1, Section 9 of [Batas] Pambansa
Bilang 129, as amended over which We can exercise appellate jurisdiction. Thus,
the instant Petition should be filed directly with the Supreme Court.24

Petitioners filed the instant petition for certiorari assailing the SDC Orders,
invoking the following grounds:LawlibraryofCRAlaw

ChanRoblesVirtualawlibrary
RESPONDENT JUDGE, HONORABLE RASAD G. BALINDONG, COMMITTED GRAVE
ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION OR IN EXCESS OF
JURISDICTION IN DENYING THE MOTION FOR ISSUANCE OF THE WRIT OF
DEMOLITION AFTER THE WRIT OF EXECUTION ISSUED BY THE COURT COULD NOT BE
IMPLEMENTED AND INSTEAD DIRECT THE CONDUCT OF THE SURVEY.

RESPONDENT JUDGE HAD COMMITTED GRAVE ABUSE OF DISCRETION IN MAKING

IT APPEAR THAT HE WAS IN COURT AT HIS SALA IN MARAWI CITY LAST JANUARY 28,
2010 WHEN THE PARTIES WERE PRESENT AND HE WAS NOT THERE. 25

Preliminarily, we would deal with a procedural matter. Petitioners, after receipt

of the SDC Order denying their second motion for reconsideration of the Order
denying their motion for the issuance of a writ of demolition, filed a petition
for certiorari with the CA. The CA dismissed the petition for lack of jurisdiction in a
Resolution dated April 27, 2010 saying that, under RA 9054, it is the Shari�a
Appellate Court (SAC) which shall exercise jurisdiction over petition for certiorari;
that, however, since SAC has not yet been organized, it cannot take
cognizance of the case as it emanates from the Shari�a Courts, which is not
among those courts, bodies or tribunals enumerated under Chapter 1, Section 9
of Batas Pambansa Bilang 129, as amended, over which it can exercise
appellate jurisdiction.

Under Republic Act No. 9054, An Act to Strengthen and Expand the Organic Act
for the Autonomous Region in Muslim Mindanao, amending for the purpose
Republic Act No. 6734, entitled, "An Act Providing for the Autonomous Region in
Muslim Mindanao, as amended", the Shari'a Appellate Court shall exercise
appellate jurisdiction over petitions for certiorari of decisions of the Shari'a District
Courts. In Villagracia v. Fifth (5th) Shari�a District Court,26 we
said:LawlibraryofCRAlaw

ChanRoblesVirtualawlibrary
x x x We call for the organization of the court system created under Republic
Act No. 9054 to effectively enforce the Muslim legal system in our country. After
all, the Muslim legal system � a legal system complete with its own civil, criminal,
commercial, political, international, and religious laws � is part of the law of the
land, and Shari�a courts are part of the Philippine judicial system.

The Shari�a Appellate Court created under Republic Act No. 9054 shall exercise
appellate jurisdiction over all cases tried in the Shari�a District Courts. It shall
also exercise original jurisdiction over petitions for certiorari, prohibition,
mandamus, habeas corpus, and other auxiliary writs and processes in aid of its
appellate jurisdiction.The decisions of the Shari�a Appellate Court shall be final
and executory, without prejudice to the original and appellate jurisdiction of this
court.27

and

In Tomawis v. Hon. Balindong,28 we stated that:LawlibraryofCRAlaw

ChanRoblesVirtualawlibrary
x x x [t]he Shari�a Appellate Court has yet to be organized with the
appointment of a Presiding Justice and two Associate Justices. Until such time
that the Shari�a Appellate Court shall have been organized, however, appeals
or petitions from final orders or decisions of the SDC filed with the CA shall be
referred to a Special Division to be organized in any of the CA stations
preferably composed of Muslim CA Justices.29

Notably, Tomawis case was decided on March 5, 2010, while the CA decision
was rendered on April 27, 2010. The CA's reason for dismissing the petition, i.e.,
the decision came from SDC which the CA has no appellate jurisdiction is
erroneous for failure to follow the Tomawis ruling. However, we need not remand
the case, as we have, on several occasions,30 passed upon and resolved
petitions and cases emanating from Shari�a courts.

Petitioners contend that their land was specific and shown by the areas drawn
in Exhibits �A� and �K� and by oral and documentary evidence on record
showing that respondents have occupied portions of their land, i.e., respondent
Pangandamun's house encroached a 100 sq. meter portion, while respondent
Diaca occupied 200 sq. meters; and that the SDC had rendered a decision
ordering respondents to vacate the portions or areas they had illegally
encroached as indicated in Exhibits �A� and �K� and to remove whatever
improvements thereat introduced. Such decision had already attained finality
and a corresponding entry of judgment had been made and a writ of
execution was issued. Petitioners' claim that the SDC's order for a conduct of a
survey to determine whether respondents' land are within petitioners' 800-sq.-
meter land would, in effect, be amending a final and executory decision.

Only respondent Pangandamun filed his Comment, arguing that petitioners'

motion for the issuance of a writ of demolition has no factual and legal basis
because his houses are clearly outside the 800-sq.-meter land of petitioners; that
his house had been constructed in 1964 within full view of the petitioners but
none of them ever questioned the same.

We find for the petitioners.

The SDC Decision dated January 31, 2005 ordered respondents to vacate the
portions or areas they had illegally encroached as indicated in Exhibits "A" and
"K" and to remove whatever improvements thereat introduced. Thus, petitioners
had established that they are recovering possession of 100 sq. meters of their
land which was occupied by respondent Pangandamun's house as indicated in
Exhibit "K-1", and 200 sq. meter portion being occupied by Diaca as indicated in
Exhibit "K-2". Such decision had become final and executory after we affirmed
the same and an entry of judgment was made. Such decision can no longer be
modified or amended. In Dacanay v. Yrastorza, Sr.,31 we explained the concept
of a final and executory judgment, thus:LawlibraryofCRAlaw

ChanRoblesVirtualawlibrary
Once a judgment attains finality, it becomes immutable and unalterable. A final
and executory judgment may no longer be modified in any respect, even if the
modification is meant to correct what is perceived to be an erroneous
conclusion of fact or law and regardless of whether the modification is
attempted to be made by the court rendering it or by the highest court of the
land. This is the doctrine of finality of judgment. It is grounded on fundamental
considerations of public policy and sound practice that, at the risk of occasional
errors, the judgments or orders of courts must become final at some definite time
fixed by law. Otherwise, there will be no end to litigations, thus negating the
main role of courts of justice to assist in the enforcement of the rule of law and
the maintenance of peace and order by settling justiciable controversies with
finality.32

However, the SDC later found that while the decision has become final and
executory and a writ of execution has been issued, there are instances when a
writ of execution cannot be enforced as when there is a supervening event that
prevents the sheriff to execute the writ of execution. It found that respondents'
claim that their buildings are not within the area claimed by petitioners is a
supervening event and ordered a survey of the land, hence, denied the motion
for a writ of demolition.

We do not agree.
It is settled that there are recognized exceptions to the execution as a matter of
right of a final and immutable judgment, and one of which is a supervening
event.

In Abrigo v. Flores,33 we said:LawlibraryofCRAlaw

ChanRoblesVirtualawlibrary
We deem it highly relevant to point out that a supervening event is an
exception to the execution as a matter of right of a final and immutable
judgment rule, only if it directly affects the matter already litigated and settled,
or substantially changes the rights or relations of the parties therein as to render
the execution unjust, impossible or inequitable. A supervening event consists of
facts that transpire after the judgment became final and executory, or of new
circumstances that develop after the judgment attained finality, including
matters that the parties were not aware of prior to or during the trial because
such matters were not yet in existence at that time. In that event, the interested
party may properly seek the stay of execution or the quashal of the writ of
execution, or he may move the court to modify or alter the judgment in order to
harmonize it with justice and the supervening event. The party who alleges a
supervening event to stay the execution should necessarily establish the facts by
competent evidence; otherwise, it would become all too easy to frustrate the
conclusive effects of a final and immutable judgment.34

In this case, the matter of whether respondents' houses intruded petitioners' land
is the issue in the recovery of possession complaint filed by petitioners in the SDC
which was already ruled upon, thus cannot be considered a supervening event
that would stay the execution of a final and immutable judgment. To allow a
survey as ordered by the SDC to determine whether respondents' houses are
within petitioners' land is tantamount to modifying a decision which had already
attained finality.

We find that the SDC committed grave abuse of discretion when it denied
petitioners' motion for the issuance a writ of demolition. The issuance of a special
order of demolition would certainly be the necessary and logical consequence
of the execution of the final and immutable decision.35 Section 10(d) of Rule 39,
Rules of Court provides:LawlibraryofCRAlaw

ChanRoblesVirtualawlibrary
Section 10. Execution of judgments for specific act. �

xxxx

(d) Removal of improvements on property subject of execution.- when the

property subject of the execution contains improvements constructed or
planted by the judgment obligor or his agent, the officer shall not destroy,
demolish or remove said improvements except upon special order of the court,
issued upon motion of the judgment obligee after due hearing and after the
former has failed to remove the same within a reasonable time fixed by the
court.

Notably, this case was decided in 2005 and its execution has already been
delayed for years now. It is almost trite to say that execution is the fruit and end
of the suit and is the life of law.36 A judgment, if left unexecuted, would be
nothing but an empty victory for the prevailing party.37redarclaw

WHEREFORE, the petition is GRANTED. The Orders dated November 9, 2009,

January 5, 2010 and February 10, 2010, of the Shari'a District Court, Fourth Shari'a
Judicial District, Marawi City are hereby CANCELLED and SET ASIDE. The Shari'a
District Court is hereby ORDERED to ISSUE a writ of demolition to enforce its
Decision dated January 31, 2005 in Civil Case No. 055-91.

Let a copy of this Decision be furnished the Presiding Justice of the Court of
Appeals for whatever action he may undertake in light of our pronouncement in
the Tomawis v. Hon. Balindong case quoted earlier on the creation of a Special
Division to handle appeals or petitions from trial orders or decisions of the
Shari�a District Court.

SO ORDERED.cralawlawlibrary

THIRD DIVISION

G.R. No. 193340, January 11, 2017

THE MUNICIPALITY OF TANGKAL, PROVINCE OF LANAO DEL

NORTE, Petitioner, v. HON. RASAD B. BALINDONG, IN HIS CAPACITY AS PRESIDING
JUDGE, SHARI'A DISTRICT COURT, 4THJUDICIAL DISTRICT, MARAWI CITY, AND HEIRS
OF THE LATE MACALABO ALOMPO, REPRESENTED BY SULTAN DIMNANG
B.ALOMPO, Respondents.

DECISION

JARDELEZA, J.:

The Code of Muslim Personal Laws of the Philippines1 (Code of Muslim Personal
Laws) vests concurrent jurisdiction upon Shari'a district courts over personal and
real actions wherein the parties involved are Muslims, except those for forcible
entry and unlawful detainer. The question presented is whether the Shari'a
District Court of Marawi City has jurisdiction in an action for recovery of
possession filed by Muslim individuals against a municipality whose mayor is a
Muslim. The respondent judge held that it has. We reverse.

The private respondents, heirs of the late Macalabo Alompo, filed a

Complaint2 with the Shari'a District Court of Marawi City (Shari'a District Court)
against the petitioner, Municipality of Tangkal, for recovery of possession and
ownership of a parcel of land with an area of approximately 25 hectares
located at Barangay Banisilon, Tangkal, Lanao del Norte. They alleged that
Macalabo was the owner of the land, and that in 1962, he entered into an
agreement with the Municipality of Tangkal allowing the latter to "borrow" the
land to pave the way for the construction of the municipal hall and a health
center building. The agreement allegedly imposed a condition upon the
Municipality of Tangkal to pay the value of the land within 35 years, or until 1997;
otherwise, ownership of the land would revert to Macalabo. Private respondents
claimed that the Municipality of Tangkal neither paid the value of the land
within the agreed period nor returned the land to its owner. Thus, they prayed
that the land be returned to them as successors-in-interest of Macalabo.

The Municipality of Tangkal filed an Urgent Motion to Dismiss3 on the ground of

improper venue and lack of jurisdiction. It argued that since it has no religious
affiliation and represents no cultural or ethnic tribe, it cannot be considered as a
Muslim under the Code of Muslim Personal Laws. Moreover, since the complaint
for recovery of land is a real action, it should have been filed in the appropriate
Regional Trial Court of Lanao del Norte.

In its Order4 dated March 9, 2010, the Shari'a District Court denied the
Municipality of Tangkal's motion to dismiss. It held that since the mayor of
Tangkal, Abdulazis A.M. Batingolo, is a Muslim, the case "is an action involving
Muslims, hence, the court has original jurisdiction concurrently with that of
regular/civil courts." It added that venue was properly laid because the Shari'a
District Court has territorial jurisdiction over the provinces of Lanao del Sur and
Lanao del Norte, in addition to the cities of Marawi and Iligan. Moreover, the
filing of a motion to dismiss is a disallowed pleading under the Special Rules of
Procedure in Shari'a Courts.5

The Municipality of Tangkal moved for reconsideration, which was denied by the
Shari'a District Court. The Shari'a District Court also ordered the Municipality of
Tangkal to file its answer within 10 days.6 The Municipality of Tangkal timely filed
its answer7 and raised as an affirmative defense the court's lack of jurisdiction.
Within the 60-day reglementary period, the Municipality of Tangkal elevated the
case to us via petition for certiorari, prohibition, and mandamus with prayer for a
temporary restraining order8 (TRO). It reiterated its arguments in its earlier motion
to dismiss and answer that the Shari'a District Court has no jurisdiction since one
party is a municipality which has no religious affiliation.

In their Comment,9 private respondents argue that under the Special Rules of
Procedure in Shari'a Courts, a petition for certiorari, mandamus, or prohibition
against any interlocutory order issued by the district court is a prohibited
pleading. Likewise, the Municpality of Tangkal's motion to dismiss is disallowed by
the rules. They also echo the reasoning of the Shari'a District Court that since
both the plaintiffs below and the mayor of defendant municipality are Muslims,
the Shari'a District Court has jurisdiction over the case.

In the meantime, we issued a TRO10 against the Shari'a District Court and its
presiding judge, Rasad Balindong, from holding any further proceedings in the
case below.

II

In its petition, the Municipality of Tangkal acknowledges that generally,

neither certiorari nor prohibition is an available remedy to assail a court's
interlocutory order denying a motion to dismiss. But it cites one of the exceptions
to the rule, i.e., when the denial is without or in excess of jurisdiction to justify its
remedial action.11 In rebuttal, private respondents rely on the Special Rules of
Procedure in Shari'a Courts which expressly identifies a motion to dismiss and a
petition for certiorari, mandamus, or prohibition against any interlocutory order
issued by the court as prohibited pleadings.12

Although the Special Rules of Procedure in Shari'a Courts prohibits the filing of a
motion to dismiss, this procedural rule may be relaxed when the ground relied
on is lack of jurisdiction which is patent on the face of the complaint. As we held
in Rulona-Al Awadhi v. Astih:13
Instead of invoking a procedural technicality, the respondent court should have
recognized its lack .of jurisdiction over the parties and promptly dismissed the
action, for, without jurisdiction, all its proceedings would be, as they were, a
futile and invalid exercise. A summary rule prohibiting the filing of a motion to
dismiss should not be a bar to the dismissal of the action for lack of jurisdiction
when the jurisdictional infirmity is patent on the face of the complaint itself, in
view of the fundamental procedural doctrine that the jurisdiction of a court may
be challenged at anytime and at any stage of the
action.14ChanRoblesVirtualawlibrary
Indeed, when it is apparent from the pleadings that the court has no jurisdiction
over the subject matter, it is duty-bound to dismiss the case regardless of
whether the defendant filed a motion to dismiss.15 Thus, in Villagracia v. Fifth
Shari'a District Court,16 we held that once it became apparent that the Shari'a
court has no jurisdiction over the subject matter because the defendant is not a
Muslim, the court should have motu proprio dismissed the case.17

An order denying a motion to dismiss is an interlocutory order which neither

terminates nor finally disposes of a case as it leaves something to be done by
the court before the case is finally decided on the merits. Thus, as a general rule,
the denial of a motion to dismiss cannot be questioned in a special civil action
for certiorari which is a remedy designed to correct errors of jurisdiction and not
errors of judgment.18 As exceptions, however, the defendant may avail of a
petition for certiorari if the ground raised in the motion to dismiss is lack of
jurisdiction over the person of the defendant or over the subject matter,19 or
when the denial of the motion to dismiss ts tainted with grave abuse of
discretion.20

The reason why lack of jurisdiction as a ground for dismissal is treated differently
from others is because of the basic principle that jurisdiction is conferred by law,
and lack of it affects the very authority of the court to take cognizance of and
to render judgment on the action21 to the extent that all proceedings before a
court without jurisdiction are void.22 We grant certiorari on this basis. As will be
shown below, the Shari'a District Court's lack of jurisdiction over the subject
matter is patent on the face of the complaint, and therefore, should have been
dismissed outright.

III

The matters over which Shari'a district courts have Jurisdiction are enumerated
in the Code of Muslim Personal Laws, specifically in Article 143.23 Consistent with
the purpose of the law to provide for an effective administration and
enforcement of Muslim personal laws among Muslims,24 it has a catchall
provision granting Shari'a district courts original jurisdiction over personal and
real actions except those for forcible entry and unlawful
detainer.25cralawred The Shari'a district courts' jurisdiction over these matters is
concurrent with regular civil courts, i.e., municipal trial courts and regional trial
courts.26 There is, however, a limit to the general jurisdiction of Shari'a district
courts over matters ordinarily cognizable by regular courts: such jurisdiction may
only be invoked if both parties are Muslims. If one party is not a Muslim, the
action must be filed before the regular courts.27
The complaint below, which is a real action28 involving title to and possession of
the land situated at Barangay Banisilon, Tangkal, was filed by private
respondents before the Shari'a District Court pursuant to the general jurisdiction
conferred by Article 143(2)(b). In determining whether the Shari'a District Court
has jurisdiction over the case, the threshold question is whether both parties are
Muslims. There is no disagreement that private respondents, as plaintiffs below,
are Muslims. The only dispute is whether the requirement is satisfied because the
mayor of the defendant municipality is also a Muslim.

When Article 143(2)(b) qualifies the conferment of jurisdiction to actions "wherein

the parties involved are Muslims," the word "parties" necessarily refers to the real
parties in interest. Section 2 of Rule 3 of the Rules of Court defines real parties in
interest as those who stand to be benefited or injured by the judgment in the
suit, or are entitled to the avails of the suit. In this case, the parties who will be
directly benefited or injured are the private respondents, as real party plaintiffs,
and the Municipality of Tangkal, as the real party defendant. In their complaint,
private respondents claim that their predecessor-in-interest, Macalabo, entered
into an agreement with the Municipality of Tangkal for the use of the land. Their
cause of action is based on the Municipality of Tangkal's alleged failure and
refusal to return the land or pay for its reasonable value in accordance with the
agreement. Accordingly, they pray for the return of the land or the payment of
reasonable rentals thereon. Thus, a judgment in favor of private respondents,
either allowing them to recover possession or entitling them to rentals, would
undoubtedly be beneficial to them; correlatively, it would be prejudicial to the
Municipality of Tangkal which would either be deprived possession of the land
on which its municipal hall currently stands or be required to allocate funds for
payment of rent. Conversely, a judgment in favor of the Municipality of Tangkal
would effectively quiet its title over the land and defeat the claims of private
respondents.

It is clear from the title and the averments in the complaint that Mayor Batingolo
was impleaded only in a representative capacity, as chief executive of the
local government of Tangkal. When an action is defended by a representative,
that representative is not-and neither does he become-a real party in interest.
The person represented is deemed the real party in interest;29 the representative
remains to be a third party to the action.30 That Mayor Batingolo is a Muslim is
therefore irrelevant for purposes of complying with the jurisdictional requirement
under Article 143(2)(b) that both parties be Muslims. To satisfy the requirement, it
is the real party defendant, the Municipality of Tangkal, who must be a Muslim.
Such a proposition, however, is a legal impossibility.

The Code of Muslim Personal Laws defines a "Muslim" as "a person who testifies to
the oneness of God and the Prophethood of Muhammad and professes
Islam."31 Although the definition does not explicitly distinguish between natural
and juridical persons, it nonetheless connotes the exercise of religion, which is a
fundamental personal right.32 The ability to testify to the "oneness of God and
the Prophethood of Muhammad" and to profess Islam is, by its nature, restricted
to natural persons. In contrast, juridical persons are artificial beings with "no
consciences, no beliefs, no feelings, no thoughts, no desires."33 They are
considered persons only by virtue of legal fiction. The Municipality of Tangkal falls
under this category. Under the Local Government Code, a municipality is a
body politic and corporate that exercises powers as a political subdivision of the
national government and as a corporate entity representing the inhabitants of
its territory.34

Furthermore, as a government instrumentality, the Municipality of Tangkal can

only act for secular purposes and in ways that have primarily secular effects35-
consistent with the non-establishment clause.36 Hence, even if it is assumed that
juridical persons are capable of practicing religion, the Municipality of Tangkal is
constitutionally proscribed from adopting, much less exercising, any religion,
including Islam.

The Shari'a District Court appears to have understood the foregoing principles,
as it conceded that the Municipality of Tangkal "is neither a Muslim nor a
Christian."37 Yet it still proceeded to attribute the religious affiliation of the mayor
to the municipality. This is manifest error on the part of the Shari'a District Court. It
is an elementary principle that a municipality has a personality that is separate
and distinct from its mayor, vice-mayor, sanggunian, and other officers
composing it.38 And under no circumstances can this corporate veil be pierced
on purely religious considerations-as the Shari'a District Court has done-without
running afoul the inviolability of the separation of Church and State enshrined in
the Constitution.39

In view of the foregoing, the Shari'a District Court had no jurisdiction under the
law to decide private respondents' complaint because not all of the parties
involved in the action are Muslims. Since it was clear from the complaint that the
real party defendant was the Municipality of Tangkal, the Shari'a District Court
should have simply applied the basic doctrine of separate juridical personality
and motu proprio dismissed the case.

WHEREFORE, the petition is GRANTED. The assailed orders of the Shari'a District
Court of Marawi City in Civil Case No. 201-09 are REVERSED and SET ASIDE.
Accordingly, Civil Case No. 201-09 is DISMISSED.

SO ORDERED.
 SECOND DIVISION

January 25, 2016

G.R. No. 198172

REGULUS DEVELOPMENT, INC., Petitioner,

vs.
ANTONIO DELA CRUZ, Respondent.

DECISION

BRION, J.:

Before us is a petition for review on certiorari filed by petitioner Regulus

Development, Inc. (petitioner) to challenge the November 23, 2010
Decision1 and August 10, 2011 resolution2 of the Court of Appeals (CA) in CA-
G.R. SP No. 105290. CA Associate Justice Juan Q. Enriquez, Jr. penned the
rulings, concurred in by Associate Justices Ramon M. Bato, Jr. and Fiorito S.
Macalino.

ANTECEDENT FACTS

The petitioner is the owner of an apartment (San Juan Apartments) located at

San Juan Street, Pasay City. Antonio dela Cruz (respondent) leased two units
(Unit 2002-A and Unit 2002-B) of the San Juan Apartments in 1993 and 1994. The
contract of lease for each of the two units similarly provides a lease period of
one (1) month, subject to automatic renewals, unless terminated by the
petitioner upon written notice.

The petitioner sent the respondent a letter to terminate the lease of the two
subject units. Due to the respondent’s refusal to vacate the units, the petitioner
filed a complaint3 for ejectment before the Metropolitan Trial Court (MTC) of
Pasay City, Manila, on May 1, 2001.

The MTC resolved the case in the petitioner’s favor and ordered the respondent
to vacate the premises, and pay the rentals due until the respondent actually
complies.4

The respondent appealed to the Regional Trial Court (RTC). Pending appeal, the
respondent consigned the monthly rentals to the RTC due to the petitioner’s
refusal to receive the rentals.
The RTC affirmed5 the decision of the MTC in toto and denied the motion for
reconsideration filed by the respondent.

CA-G.R. SP No. 69504: Dismissal of Ejectment Case

In a Petition for Review filed by the respondent, the CA reversed the lower
courts’ decisions and dismissed the ejectment case.6 On March 19, 2003,
the dismissal of the case became final and executory.7

Orders dated July 25, 2003 and November 28, 2003 for payment of rentals due
under lease contracts

The petitioner filed a motion (to withdraw funds deposited by the defendant-
appellant as lessee)8 praying for the withdrawal of the rentals consigned by the
respondent with the RTC.

In an order dated July 25, 2003,9 the RTC granted the petitioner’s motion. The
RTC explained that the effect of the complaint’s dismissal would mean that
there was no complaint filed at all. The petitioner, however, is entitled to the
amount of rentals for the use and occupation of the subject units, as provided in
the executed contracts of lease and on the basis of justice and equity.

The court denied the respondent’s motion for reconsideration 10 in an order

dated November 28, 2003.11

On the petitioner’s motion, the RTC issued a writ of execution on December 18,
2003, to cause the enforcement of its order dated July 25, 2003.12

CA-G.R. SP No. 81277: Affirmed RTC Orders

The respondent filed a petition for certiorari under Rule 65 before the CA to
assail the RTC Orders dated July 25, 2003 and November 28, 2003 (RTC orders),
which granted the petitioner’s motion to withdraw funds.

The CA dismissed13 the petition and held that the assailed RTC Orders were
issued pursuant to its equity jurisdiction, in accordance with Section 5, Rule
39,14 and Rules 515 and 616 of Rule 135 of the Rules of Court. The respondent’s
motion for reconsideration was similarly denied.

G.R. SP No. 171429: Affirmed CA Ruling on RTC Orders

The respondent filed a petition for review on certiorari before this Court to assail
the decision of the CA in CA-G.R. SP No. 81277. In a resolution dated June 7,
2006,17 we denied the petition for insufficiency in form and for failure to show
any reversible error committed by the CA.

Our resolution became final and executory and an entry of judgment18 was
issued.

Execution of RTC Orders

The petitioner returned to the RTC and moved for the issuance of a writ of
execution to allow it to proceed against the supersedeas bond the respondent
posted, representing rentals for the leased properties from May 2001 to October
2001, and to withdraw the lease payments deposited by respondent from
November 2001 until August 2003.19 The RTC granted the motion.20

The RTC issued an Alias Writ of Execution21 dated April 26, 2007, allowing the
withdrawal of the rental deposits and the value of the supersedeas bond.

The petitioner claimed that the withdrawn deposits, supersedeas bond, and
payments directly made by the respondent to the petitioner, were insufficient to
cover rentals due for the period of May 2001 to May 2004. Hence, the petitioner
filed a manifestation and motion22 dated October 23, 2007, praying that the RTC
levy upon the respondent’s property covered by Transfer Certificate of Title (TCT)
No. 136829 to satisfy the judgment credit.

The RTC granted the petitioner’s motion in an order dated June 30, 2008.23 The
respondent filed a motion for reconsideration which was denied by the RTC in
an order dated August 26, 2008.24

CA-G.R. SP No. 105290: Assailed the levy of the respondent’s property

On October 3, 2008, the respondent filed with the CA a Petition for

Certiorari25 with application for issuance of a temporary restraining order. The
petition sought to nullify and set aside the orders of the RTC directing the levy of
the respondent’s real property. The CA dismissed the petition. Thereafter, the
respondent filed a motion for reconsideration26 dated November 3, 2008.

Pursuant to the order dated June 30, 2008, a public auction for the respondent’s
property covered by TCT No. 136829 was held on November 4, 2008,27 where the
petitioner was declared highest bidder. Subsequently, the Certificate of Sale28 in
favor of the petitioner was registered.

Meanwhile, on January 7, 2010, the respondent redeemed the property with the
RTC Clerk of Court, paying the equivalent of the petitioner’s bid price with legal
interest. The petitioner filed a motion to release funds29 for the release of the
redemption price paid. The RTC granted30 the motion.

On February 12, 2010, the respondent filed a manifestation and motion31 before
the CA to withdraw the petition for the reason that the redemption of the
property and release of the price paid rendered the petition moot and
academic.

Thereafter, the petitioner received the CA decision dated November 23, 2010,
which reversed and set aside the orders of the RTC directing the levy of the
respondent’s property. The CA held that while the approval of the petitioner’s
motion to withdraw the consigned rentals and the posted supersedeas bond
was within the RTC’s jurisdiction, the RTC had no jurisdiction to levy on the
respondent’s real property.

The CA explained that the approval of the levy on the respondent’s real
property could not be considered as a case pending appeal, because the
decision of the MTC had already become final and executory. As such, the
matter of execution of the judgment lies with the MTC where the complaint for
ejectment was originally filed and presented.

The CA ordered the RTC to remand the case to the MTC for execution. The
petitioner filed its motion for reconsideration which was denied32 by the CA.

THE PETITION

The petitioner filed the present petition for review on certiorari to challenge the
CA ruling in CA-G.R. SP No. 105290 which held that the RTC had no jurisdiction to
levy on the respondent’s real property.

The petitioner argues: first, that the RTC’s release of the consigned rentals and
levy were ordered in the exercise of its equity jurisdiction; second, that the
respondent’s petition in CA-G.R. SP No. 105290 was already moot and
academic with the conduct of the auction sale and redemption of the
respondent’s real property; third, that the petition in CAG. R. SP No. 105290
should have been dismissed outright for lack of signature under oath on the
Verification and Certification against Forum Shopping.

The respondent duly filed its comment33 and refuted the petitioner’s arguments.
On the first argument, respondent merely reiterated the CA’s conclusion that
the RTC had no jurisdiction to order the levy on respondent’s real property as it
no longer falls under the allowed execution pending appeal. On
the second argument, the respondent contended that the levy on execution
and sale at public auction were null and void, hence the CA decision is not
moot and academic. On the third argument, the respondent simply argued that
it was too late to raise the alleged formal defect as an issue.

THE ISSUE

The petitioner poses the core issue of whether the RTC had jurisdiction to levy on
the respondent’s real property.

OUR RULING

We grant the petition.

Procedural issue: Lack of notarial seal on the Verification and Certification

against Forum Shopping is not fatal to the petition.

The petitioner alleged that the assailed CA petition should have been dismissed
since the notary public failed to affix his seal on the attached Verification and
Certification against Forum Shopping.

We cannot uphold the petitioner’s argument.

The lack of notarial seal in the notarial certificate34 is a defect in a document

that is required to be executed under oath.

Nevertheless, a defect in the verification does not necessarily render the

pleading fatally defective. The court may order its submission or correction, or
act on the pleading if the attending circumstances are such that strict
compliance with the Rule may be dispensed with in order that the ends of
justice may be served.35

Noncompliance or a defect in a certification against forum shopping, unlike in

the case of a verification, is generally not curable by its subsequent submission
or correction, unless the covering Rule is relaxed on the ground of "substantial
compliance" or based on the presence of "special circumstances or compelling
reasons."36 Although the submission of a certificate against forum shopping is
deemed obligatory, it is not however jurisdictional.37

In the present case, the Verification and Certification against Forum Shopping
were in fact submitted. An examination of these documents shows that the
notary public’s signature and stamp were duly affixed. Except for the notarial
seal, all the requirements for the verification and certification documents were
complied with.
The rule is that courts should not be unduly strict on procedural lapses that do
not really impair the proper administration of justice. The higher objective of
procedural rules is to ensure that the substantive rights of the parties are
protected. Litigations should, as much as possible, be decided on the merits and
not on technicalities. Every party-litigant must be afforded ample opportunity for
the proper and just determination of his case, free from the unacceptable plea
of technicalities.38

The CA correctly refused to dismiss and instead gave due course to the petition
as it substantially complied with the requirements on the Verification and
Certification against Forum Shopping.

An issue on jurisdiction prevents the petition from becoming "moot and

academic."

The petitioner claims that the assailed CA petition should have been dismissed
because the subsequent redemption of the property by the respondent and the
release of the price paid to the petitioner rendered the case moot and
academic.

A case or issue is considered moot and academic when it ceases to present a

justiciable controversy because of supervening events, rendering the
adjudication of the case or the resolution of the issue without any practical use
or value.39 Courts generally decline jurisdiction over such case or dismiss it on the
ground of mootness except when, among others, the case is capable of
repetition yet evades judicial review.40

The CA found that there is an issue on whether the RTC had jurisdiction to issue
the orders directing the levy of the respondent’s property. The issue on
jurisdiction is a justiciable controversy that prevented the assailed CA petition
from becoming moot and academic.

It is well-settled in jurisprudence that jurisdiction is vested by law and cannot be

conferred or waived by the parties. "Even on appeal and even if the reviewing
parties did not raise the issue of jurisdiction, the reviewing court is not precluded
from ruling that the lower court had no jurisdiction over the case."41

Even assuming that the case has been rendered moot due to the respondent’s
redemption of the property, the CA may still entertain the jurisdictional issue
since it poses a situation capable of repetition yet evading judicial review.

Under this perspective, the CA correctly exercised its jurisdiction over the
petition.
Equity jurisdiction versus appellate jurisdiction of the RTC

The appellate jurisdiction of courts is conferred by law. The appellate court

acquires jurisdiction over the subject matter and parties when an appeal is
perfected.42

On the other hand, equity jurisdiction aims to provide complete justice in cases
where a court of law is unable to adapt its judgments to the special
circumstances of a case because of a resulting legal inflexibility when the law is
applied to a given situation. The purpose of the exercise of equity jurisdiction,
among others, is to prevent unjust enrichment and to ensure restitution.43

The RTC orders which allowed the withdrawal of the deposited funds for the use
and occupation of the subject units were issued pursuant to the RTC’s equity
jurisdiction, as the CA held in the petition docketed as CA-G.R. SP No. 81277.

The RTC’s equity jurisdiction is separate and distinct from its appellate jurisdiction
on the ejectment case. The RTC could not have issued its orders in the exercise
of its appellate jurisdiction since there was nothing more to execute on the
dismissed ejectment case. As the RTC orders explained, the dismissal of the
ejectment case effectively and completely blotted out and cancelled the
complaint. Hence, the RTC orders were clearly issued in the exercise of the RTC’s
equity jurisdiction, not on the basis of its appellate jurisdiction.

This Court takes judicial notice44 that the validity of the RTC Orders has been
upheld in a separate petition before this Court, under G.R. SP No. 171429
entitled Antonio Dela Cruz v. Regulus Development, Inc.

The levy of real property was ordered by the RTC in the exercise of its equity
jurisdiction.

The levy of the respondent’s property was made pursuant to the RTC orders
issued in the exercise of its equity jurisdiction, independent of the ejectment
case originally filed with the MTC.

An examination of the RTC order dated June 30, 2008, directing the levy of the
respondent’s real property shows that it was based on the RTC order dated July
25, 2003. The levy of the respondent’s property was issued to satisfy the amounts
due under the lease contracts, and not as a result of the decision in the
ejectment case.

The CA erred when it concluded that the RTC exercised its appellate jurisdiction
in the ejectment case when it directed the levy of the respondent’s property.
Furthermore, the order to levy on the respondent’s real property was consistent
with the first writ of execution issued by the RTC on December 18, 2003, to
implement the RTC orders. The writ of execution states that:

xxx In case of [sic] sufficient personal property of the defendant cannot be

found whereof to satisfy the amount of the said judgment, you are directed to
levy [on] the real property of said defendant and to sell the same or so much
thereof in the manner provided by law for the satisfaction of the said
judgment and to make return of your proceedings together with this Writ within
sixty (60) days from receipt hereof. (emphasis supplied)

The subsequent order of the RTC to levy on the respondent’s property was
merely a reiteration and an enforcement of the original writ of execution
issued.1âwphi1

Since the order of levy is clearly rooted on the RTC Orders, the only question that
needs to be resolved is which court has jurisdiction to order the execution of the
RTC orders.

The RTC, as the court of origin, has jurisdiction to order the levy of the
respondent's real property.

Execution shall be applied for in the court of origin, in accordance with Section
1,45 Rule 39 of the Rules of Court.

The court of origin with respect to the assailed RTC orders is the court which
issued these orders. The RTC is the court with jurisdiction to order the execution of
the issued RTC orders.

Hence, the petitioner correctly moved for the issuance of the writ of execution
and levy of the respondent's real property before the RTC as the court of origin.

WHEREFORE, we hereby GRANT the petition for review on certiorari. The decision
dated November 23, 2010, and the resolution dated August 10, 2011, of the
Court of Appeals in CA-G.R. SP No. 105290 are hereby REVERSED and SET
ASIDE. The orders dated June 30, 2008, and August 26, 2008, of Branch 108 of the
Regional Trial Court of Pasay City, are hereby REINSTATED. Costs against
respondent Antonio dela Cruz.

SO ORDERED.