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[REPUBLIC ACT NO. 10660]

AN ACT STRENGTHENING FURTHER THE FUNCTIONAL AND STRUCTURAL ORGANIZATION OF

THE SANDIGANBAYAN, FURTHER AMENDING PRESIDENTIAL DECREE NO. 1606, AS
AMENDED, AND APPROPRIATING FUNDS THEREFOR

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

SECTION 1. Section 3 of Presidential Decree No. 1606, as amended, is hereby further amended to
read as follows:

“SEC. 3. Constitution of the Divisions; Quorum. – The Sandiganbayan shall sit in seven (7) divisions of
three (3) members each.

“Two (2) members shall constitute a quorum for sessions in divisions: Provided, That when the required
quorum for the particular division cannot be had due to the legal disqualification or temporary incapacity
of a member or a vacancy therein, the Presiding Justice may designate a member of another division
to be determined by strict rotation on the basis of the reverse order of precedence, to sit as a special
member of said division with all the rights and prerogatives of a regular member of said division in the
trial and determination of a case or cases assigned thereto.”

SEC. 2. Section 4 of the same decree, as amended, 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 mayors, 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 and 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 higher under the
Compensation and Position Classification Act of 1989;

“(3) Members of the judiciary without prejudice to the provisions of the Constitution;
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“(4) Chairmen and members of the Constitutional Commissions, 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.

“Provided, That the Regional Trial Court shall have exclusive original jurisdiction where the information:
(a) does not allege any damage to the government or any bribery; or (b) alleges damage to the
government or bribery arising from the same or closely related transactions or acts in an amount not
exceeding One million pesos (P1,000,000.00).

“Subject to the rules promulgated by the Supreme Court, the cases falling under the jurisdiction of the
Regional Trial Court under this section shall be tried in a judicial region other than where the official
holds office.

“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 officers mentioned above,
exclusive original 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 jurisdictions as provided in Batas Pambansa Blg. 129, as amended.

“The Sandiganbayan shall exercise exclusive appellate jurisdiction over final judgments, resolutions or
orders 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 hereafter 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 of 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.”
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SEC. 3. Section 5 of the same decree is hereby amended to read as follows:

“SEC. 5. Proceedings, How Conducted; Decision by Majority Vote. – All three (3) members of a division
shall deliberate on all matters submitted for judgment, decision, final order, or resolution.

“The concurrence of a majority of the members of a division shall be necessary to render a judgment,
decision, or final order, or to resolve interlocutory or incidental motions.”

SEC. 4. Funding and Appropriations. – The amount necessary to carry out the implementation of this
Act shall be charged against the current appropriations of the Sandiganbayan. Thereafter, such sums
as may be needed for its full implementation shall be included in the annual General Appropriations
Act.

SEC. 5. Transitory Provision. – This Act shall apply to all cases pending in the Sandiganbayan over
which trial has not begun: Provided, That: (a) Section 2, amending Section 4 of Presidential Decree
No. 1606, as amended, on “Jurisdiction”; and (b) Section 3, amending Section 5 of Presidential Decree
No. 1606, as amended, on “Proceedings, How Conducted; Decision by Majority Vote” shall apply to
cases arising from offenses committed after the effectivity of this Act.

SEC. 6. Separability Clause. – Should any provision of this Act or part hereof be declared
unconstitutional, the other provisions or parts not affected thereby shall remain valid and effective.

SEC. 7. Repealing Clause. – All laws, decrees, orders, and issuances, or portions thereof, which are
inconsistent with the provisions of this Act, are hereby repealed, amended or modified accordingly.

ORC V HERTZ PHIL

Unlike Pope Alexander VI[1] who, faced with the impasse between Spain and Portugal, deftly and
literally divided the exploration, or more appropriately, the riches of the New World by issuing the Inter
Caetera,[2] we are confronted with the difficult, albeit, all too familiar tale of another family imbroglio over
the estate of a decedent.[3]
This is a petition for review on certiorari under Rule 45 of the Rules of Court, assailing the Decision of
the Court of Appeals (CA) in CA-G.R. CV No. 74949,[4]reversing the decision of the Regional Trial Court
(RTC), Branch 78, Malolos, Bulacan, in Special Proceeding Case No. 117-M-95.[5]

Before anything else, we disentangle the facts.

On June 4, 1990, the decedent, Cristina Aguinaldo-Suntay (Cristina), married to Dr. Federico
Suntay (Federico), died intestate. In 1979, their only son, Emilio Aguinaldo Suntay (Emilio I),
predeceased both Cristina and Federico. At the time of her death, Cristina was survived by her
husband, Federico, and several grandchildren, including herein petitioner Emilio A.M. Suntay III (Emilio
III) and respondent Isabel Cojuangco-Suntay.

During his lifetime, Emilio I was married to Isabel Cojuangco, and they begot three children,
namely: herein respondent, Isabel; Margarita; and Emilio II, all surnamed Cojuangco-Suntay. Emilio Is
marriage to Isabel Cojuangco was subsequently annulled. Thereafter, Emilio I had two children out of
wedlock, Emilio III and Nenita Suntay Taedo (Nenita), by two different women, Concepcion Mendoza
and Isabel Santos, respectively.

Despite the illegitimate status of Emilio III, he was reared ever since he was a mere baby, nine
months old, by the spouses Federico and Cristina and was an acknowledged natural child of Emilio I.
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Nenita is an acknowledged natural child of Emilio I and was likewise brought up by the spouses
Federico and Cristina.

As previously adverted to, the marriage between Emilio I and Isabel was
annulled.[6] Consequently, respondent and her siblings Margarita and Emilio II, lived with their mother
on Balete Drive, Quezon City, separately from their father and paternal grandparents.

Parenthetically, after the death of Emilio I, Federico filed a petition for visitation rights over his
grandchildren: respondent Isabel, Margarita, and Emilio II. Although the Juvenile and Domestic
Relations Court in Quezon City granted the petition and allowed Federico one hour of visitation monthly,
initially reduced to thirty minutes, it was altogether stopped because of a manifestation filed by
respondent Isabel, articulating her sentiments on the unwanted visits of her grandparents.

Significantly, Federico, after the death of his spouse, Cristina, or on September 27, 1993,
adopted their illegitimate grandchildren, Emilio III and Nenita.[7]

On October 26, 1995, respondent filed a petition for the issuance of letters of administration in
her favor, containing the following allegations:

[A]t the time of [the decedents] death, [she] was a resident of the Municipality of Hagonoy,
Province of Bulacan; that the [decedent] left an estate of real and personal properties,
with a probable gross value of P29,000,000.00; that the names, ages and residences of
the surviving heirs of the [decedent] are: (1) Federico C. Suntay, 89 years old, surviving
spouse and a resident of x x x; (2) Isabel Cojuangco-Suntay, 36 years old, legitimate
granddaughter and a resident of x x x; (3) Margarita Cojuangco-Suntay, 39 years old,
legitimate granddaughter and a resident of x x x; and (4) Emilio Cojuangco-Suntay, 35
years old, legitimate grandson and a resident of x x x; and that as far as [respondent]
knew, the decedent left no debts or obligation at the time of her death. [8]

Disavowing the allegations in the petition of his grandchild, respondent Isabel, Federico filed his
opposition on December 21, 1995, alleging, among others, that:

[B]eing the surviving spouse of Cristina, he is capable of administering her estate and he
should be the one appointed as its administrator; that as part owner of the mass of
conjugal properties left by Cristina, he must be accorded legal preference in the
administration thereof; that Isabel and her family had been alienated from their
grandparents for more than thirty (30) years; that the enumeration of heirs in the petition
was incomplete as it did not mention the other children of his son[,] namely: Emilio III and
Nenita S. Taedo; that he is better situated to protect the integrity of the estate of Cristina
as even before the death of his wife[,] he was already the one who managed their conjugal
properties; that the probable value of the estate as stated in the petition was grossly
overstated (sic); and that Isabels allegation that some of the properties are in the hands
of usurpers is untrue.[9]

Meanwhile, after a failed attempt by the parties to settle the proceedings amicably, Federico filed
a Manifestation dated March 13, 1999, nominating his adopted son, Emilio III, as administrator of the
decedents estate on his behalf, in the event he would be adjudged as the one with a better right to the
letters of administration.

Subsequently, the trial court granted Emilio IIIs Motion for Leave to Intervene considering his
interest in the outcome of the case. Emilio III filed his Opposition-In-Intervention, which essentially
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echoed the allegations in his grandfathers opposition, alleging that Federico, or in his stead, Emilio III,
was better equipped than respondent to administer and manage the estate of the decedent, Cristina.
Additionally, Emilio III averred his own qualifications that: [he] is presently engaged in aquaculture and
banking; he was trained by the decedent to work in his early age by involving him in the activities of the
Emilio Aguinaldo Foundation which was established in 1979 in memory of her grandmothers father; the
significant work experiences outside the family group are included in his curriculum vitae; he was
employed by the oppositor [Federico] after his graduation in college with management degree at F.C.E.
Corporations and Hagonoy Rural Bank; x x x.[10]

In the course of the proceedings, on November 13, 2000, Federico died.

After the testimonies of both parties witnesses were heard and evidence on their respective
allegations were adduced, the trial court rendered a decision on November 9, 2001, appointing herein
petitioner, Emilio III, as administrator of decedent Cristinas intestate estate, to wit:

WHEREFORE, the petition of Isabel Cojuangco[-]Suntay is DENIED and the Opposition[-

]in[-]Intervention is GRANTED.

Accordingly, the Intervenor, Emilio A.M. Suntay, III is hereby appointed administrator of
the estate of the decedent Cristina Aguinaldo Suntay, who shall enter upon the execution
of his trust upon the filing of a bond in the amount of P200,000.00, conditioned as follows:

(1) To make and return within three (3) months, a true and complete
inventory;

(2) To administer the estate and to pay and discharge all debts, legatees,
and charge on the same, or dividends thereon;

(3) To render a true and just account within one (1) year, and at any other
time when required by the court, and

(4) To perform all orders of the Court.

Once the said bond is approved by the court, let Letters of Administration be issued in his
favor.

SO ORDERED.[11]
Aggrieved, respondent filed an appeal before the CA, which reversed and set aside the decision
of the RTC, revoked the Letters of Administration issued to Emilio III, and appointed respondent as
administratrix of the intestate estate of the decedent, Cristina, to wit:

WHEREFORE, in view of all the foregoing, the assailed decision dated November 9, 2001
of Branch 78, Regional Trial Court of Malolos, Bulacan in SPC No. 117-M-95
is REVERSED and SET ASIDE and the letters of administration issued by the said court
to Emilio A.M. Suntay III, if any, are consequently revoked. Petitioner Isabel Cojuangco[-
]Suntay is hereby appointed administratrix of the intestate estate of Cristina Aguinaldo
Suntay. Let letters of administration be issued in her favor upon her filing of a bond in the
amount of Two Hundred Thousand (P200,000.00) Pesos.

No pronouncement as to costs.

SO ORDERED.[12]

The motion for reconsideration of Emilio III having been denied, he appeals by certiorari to this Court,
raising the following issues:
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A. IN THE APPOINTMENT OF AN ADMINISTRATOR OF THE ESTATE UNDER

SECTION 6 OF RULE 78 OF THE RULES OF COURT, WHETHER ARTICLE 992 OF
THE CIVIL CODE APPLIES; and

B. UNDER THE UNDISPUTED FACTS WHERE HEREIN PETITIONER WAS REARED

BY THE DECEDENT AND HER SPOUSE SINCE INFANCY, WHETHER ARTICLE 992
OF THE NEW CIVIL CODE APPLIES SO AS TO BAR HIM FROM BEING APPOINTED
ADMINISTRATOR OF THE DECEDENTS ESTATE.[13]

In ruling against the petition of herein respondent, the RTC ratiocinated, thus:

Evidence objectively assessed and carefully evaluated, both testimonial and

documentary, the court opines that it is to the best interest of the estate of the decedent
and all claimants thereto, that the Intervenor, Emilio A.M. Suntay III, be appointed
administrator of the estate in the above-entitled special proceedings.

Based on the evidence and demeanor of the parties in court, [respondents immediate]
family and that of the decedent are apparently estranged. The root cause of which, is not
for this court to ascertain nor is this the right time and the proper forum to dwell upon.
What matters most at this time is the welfare of the estate of the decedent in the light of
such unfortunate and bitter estrangement.

The Court honestly believes that to appoint the petitioner would go against the wishes of
the decedent who raised [Emilio III] from infancy in her home in Baguio City as her own
child. Certainly, it would go against the wishes of the surviving spouse x x x who
nominated [Emilio III] for appointment as administrator.

As between [respondent] and the oppositor [Federico], the latter is accorded preference
as the surviving spouse under Sec 6(a), Rule 78, Rules of Court. On the basis of such
preference, he vigorously opposed the appointment of the petitioner and instead
nominated [Emilio III], his grandchild and adopted child. Such nomination, absent any
valid and justifiable reason, should not be imperiously set aside and insouciantly ignored,
even after the oppositor [Federico] has passed away, in order to give effect to the order
of preference mandated by law. Moreover, from the viewpoint of the estate, the
nomination of [Emilio III] appear[s] intrinsically meritorious. For the benefit of the estate
and its claimants, creditors, as well as heirs, the administrator should be one who is
prepared, academically and by experience, for the demands and responsibilities of the
position. While [respondent], a practicing physician, is not unqualified, it is clear to the
court that when it comes to management of real estate and the processing and payment
of debts, [Emilio III], a businessman with an established track record as a manager has a
decided edge and therefore, is in a position to better handle the preservation of the
estate.[14]

In marked contrast, the CA zeroed in on Emilio IIIs status as an illegitimate child of Emilio I and,
thus, barred from representing his deceased father in the estate of the latters legitimate mother, the
decedent. On the whole, the CA pronounced that Emilio III, who was merely nominated by Federico,
and which nomination hinged upon the latters appointment as administrator of the decedents estate,
cannot be appointed as the administrator of the decedents estate for the following reasons: [15]

1. The appointment of Emilio III was subject to a suspensive condition, i.e., Federicos
appointment as administrator of the estate, he being the surviving spouse of Cristina, the decedent.
The death of Federico before his appointment as administrator of Cristinas estate rendered his
nomination of Emilio III inoperative;
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2. As between the legitimate offspring (respondent) and illegitimate offspring (Emilio III) of
decedents son, Emilio I, respondent is preferred, being the next of kin referred to by Section 6, Rule 78
of the Rules of Court, and entitled to share in the distribution of Cristinas estate as an heir;
3. Jurisprudence has consistently held that Article 992[16] of the Civil Code bars the illegitimate
child from inheriting ab intestato from the legitimate children and relatives of his father or mother. Thus,
Emilio III, who is barred from inheriting from his grandmother, cannot be preferred over respondent in
the administration of the estate of their grandmother, the decedent; and

4. Contrary to the RTCs finding, respondent is as much competent as Emilio III to administer
and manage the subject estate for she possesses none of the disqualifications specified in Section
1,[17] Rule 78 of the Rules of Court.

The pivotal issue in this case turns on who, as between Emilio III and respondent, is better
qualified to act as administrator of the decedents estate.

We cannot subscribe to the appellate courts ruling excluding Emilio III in the administration of
the decedents undivided estate. Mistakenly, the CA glosses over several undisputed facts and
circumstances:

1. The underlying philosophy of our law on intestate succession is to give preference to the
wishes and presumed will of the decedent, absent a valid and effective will;

2. The basis for Article 992 of the Civil Code, referred to as the iron curtain bar rule, [18] is quite
the opposite scenario in the facts obtaining herein for the actual relationship between Federico and
Cristina, on one hand, and Emilio III, on the other, was akin to the normal relationship of legitimate
relatives;

3. Emilio III was reared from infancy by the decedent, Cristina, and her husband, Federico, who
both acknowledged him as their grandchild;

4. Federico claimed half of the properties included in the estate of the decedent, Cristina, as
forming part of their conjugal partnership of gains during the subsistence of their marriage;

5. Cristinas properties forming part of her estate are still commingled with that of her husband,
Federico, because her share in the conjugal partnership, albeit terminated upon her death, remains
undetermined and unliquidated; and

6. Emilio III is a legally adopted child of Federico, entitled to share in the distribution of the latters
estate as a direct heir, one degree from Federico, not simply representing his deceased illegitimate
father, Emilio I.

From the foregoing, it is patently clear that the CA erred in excluding Emilio III from the
administration of the decedents estate. As Federicos adopted son, Emilio IIIs interest in the estate of
Cristina is as much apparent to this Court as the interest therein of respondent, considering that the CA
even declared that under the law, [Federico], being the surviving spouse, would have the right of
succession over a portion of the exclusive property of the decedent, aside from his share in the
conjugal partnership. Thus, we are puzzled why the CA resorted to a strained legal reasoning Emilio
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IIIs nomination was subject to a suspensive condition and rendered inoperative by reason of Federicos
death wholly inapplicable to the case at bar.

Section 6, Rule 78 of the Rules of Court lists the order of preference in the appointment of an
administrator of an estate:

SEC. 6. When and to whom letters of administration granted. If no executor is named in

the will, or the executor or executors are incompetent, refuse the trust, or fail to give bond,
or a person dies intestate, administration shall be granted:

(a) To the surviving husband or wife, as the case may be, or next of kin, or both, in the
discretion of the court, or to such person as such surviving husband or wife, or next of
kin, requests to have appointed, if competent and willing to serve;

(b) If such surviving husband or wife, as the case may be, or next of kin, or the person
selected by them, be incompetent or unwilling, or if the husband or widow, or next of kin,
neglects for thirty (30) days after the death of the person to apply for administration or to
request that administration be granted to some other person, it may be granted to one or
more of the principal creditors, if competent and willing to serve;

(c) If there is no such creditor competent and willing to serve, it may be granted to such
other person as the court may select.

However, the order of preference is not absolute for it depends on the attendant facts and
circumstances of each case.[19] Jurisprudence has long held that the selection of an administrator lies
in the sound discretion of the trial court.[20] In the main, the attendant facts and circumstances of this
case necessitate, at the least, a joint administration by both respondent and Emilio III of their
grandmothers, Cristinas, estate.

In the case of Uy v. Court of Appeals,[21] we upheld the appointment by the trial court of a co-
administration between the decedents son and the decedents brother, who was likewise a creditor of
the decedents estate. In the same vein, we declared in Delgado Vda. de De la Rosa v. Heirs of
Marciana Rustia Vda. de Damian[22]that:

[i]n the appointment of an administrator, the principal consideration is the interest

in the estate of the one to be appointed. The order of preference does not rule out the
appointment of co-administrators, specially in cases where justice and equity demand
that opposing parties or factions be represented in the management of the estates, a
situation which obtains here.

Similarly, the subject estate in this case calls to the succession other putative heirs, including
another illegitimate grandchild of Cristina and Federico, Nenita Taedo, but who was likewise adopted
by Federico, and the two (2) siblings of respondent Isabel, Margarita and Emilio II. In all, considering
the conflicting claims of the putative heirs, and the unliquidated conjugal partnership of Cristina and
Federico which forms part of their respective estates, we are impelled to move in only one direction, i.e.,
joint administration of the subject estate.

One final note. Counsel for petitioner meticulously argues that Article 992 of the Civil Code, the
successional bar between the legitimate and illegitimate relatives of a decedent, does not apply in this
instance where facts indubitably demonstrate the contrary Emilio III, an illegitimate grandchild of the
decedent, was actually treated by the decedent and her husband as their own son, reared from infancy,
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educated and trained in their businesses, and eventually legally adopted by decedents husband, the
original oppositor to respondents petition for letters of administration.

We are not unmindful of the critiques of civilists of a conflict and a lacuna in the law concerning
the bone of contention that is Article 992 of the Civil Code, beginning with the eminent Justice J.B.L.
Reyes:

In the Spanish Civil Code of 1889 the right of representation was admitted only within the
legitimate family; so much so that Article 943 of that Code prescribed that an illegitimate
child can not inherit ab intestato from the legitimate children and relatives of his father
and mother. The Civil Code of the Philippines apparently adhered to this principle since
it reproduced Article 943 of the Spanish Code in its own Art. 992, but with fine
inconsistency, in subsequent articles (990, 995 and 998) our Code allows the hereditary
portion of the illegitimate child to pass to his own descendants, whether legitimate or
illegitimate. So that while Art. 992 prevents the illegitimate issue of a legitimate child from
representing him in the intestate succession of the grandparent, the illegitimates of an
illegitimate child can now do so. This difference being indefensible and unwarranted, in
the future revision of the Civil Code we shall have to make a choice and decide either that
the illegitimate issue enjoys in all cases the right of representation, in which case Art. 992
must be suppressed; or contrariwise maintain said article and modify Articles 995 and
998. The first solution would be more in accord with an enlightened attitude vis--
vis illegitimate children.[23]

Manresa explains the basis for the rules on intestate succession:

The law [of intestacy] is founded on the presumed will of the deceased Love, it is said,
first descends, then ascends, and, finally, spreads sideways. Thus, the law first calls the
descendants, then the ascendants, and finally the collaterals, always preferring those
closer in degree to those of remoter degrees, on the assumption that the deceased would
have done so had he manifested his last will Lastly, in default of anyone called to
succession or bound to the decedent by ties of blood or affection, it is in accordance with
his presumed will that his property be given to charitable or educational institutions, and
thus contribute to the welfare of humanity.[24]
Indeed, the factual antecedents of this case accurately reflect the basis of intestate
succession, i.e., love first descends, for the decedent, Cristina, did not distinguish between her
legitimate and illegitimate grandchildren. Neither did her husband, Federico, who, in fact, legally raised
the status of Emilio III from an illegitimate grandchild to that of a legitimate child. The peculiar
circumstances of this case, painstakingly pointed out by counsel for petitioner, overthrow the legal
presumption in Article 992 of the Civil Code that there exist animosity and antagonism between
legitimate and illegitimate descendants of a deceased.

Nonetheless, it must be pointed out that judicial restraint impels us to refrain from making a final
declaration of heirship and distributing the presumptive shares of the parties in the estates of Cristina
and Federico, considering that the question on who will administer the properties of the long deceased
couple has yet to be settled.

Our holding in Capistrano v. Nadurata[25] on the same issue remains good law:

[T]he declaration of heirs made by the lower court is premature, although the evidence
sufficiently shows who are entitled to succeed the deceased. The estate had hardly been
judicially opened, and the proceeding has not as yet reached the stage of distribution of
the estate which must come after the inheritance is liquidated.
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Section 1, Rule 90 of the Rules of Court does not depart from the foregoing admonition:

Sec. 1. When order for distribution of residue is made. x x x. If there is a controversy

before the court as to who are the lawful heirs of the deceased person or as to the
distributive shares to which each person is entitled under the law, the controversy shall
be heard and decided as in ordinary cases.

No distribution shall be allowed until the payment of the obligations above mentioned has
been made or provided for, unless the distributees, or any of them, give a bond, in a sum
to be fixed by the court, conditioned for the payment of said obligations within such time
as the court directs.

WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals in CA-G.R. CV No.
74949 is REVERSED and SET ASIDE. Letters of Administration over the estate of decedent Cristina
Aguinaldo-Suntay shall issue to both petitioner Emilio A.M. Suntay III and respondent Isabel
Cojuangco-Suntay upon payment by each of a bond to be set by the Regional Trial Court, Branch 78,
Malolos, Bulacan, in Special Proceeding Case No. 117-M-95. The Regional Trial Court, Branch 78,
Malolos, Bulacan is likewise directed to make a determination and to declare the heirs of decedent
Cristina Aguinaldo-Suntay according to the actual factual milieu as proven by the parties, and all other
persons with legal interest in the subject estate. It is further directed to settle the estate of decedent
Cristina Aguinaldo-Suntay with dispatch. No costs.

REMEDIOS ANTONIO V RD

Since March 21, 1978, petitioner Remedios Antonino (Antonino) had been leasing a residential property
located at Makati City and owned by private respondent Tan Tian Su (Su). Under the governing lease
contract, Antonino was accorded with the right of first refusal in the event Su would decide to sell the
subject property.[3]

On July 7, 2004, the parties executed a document denominated as Undertaking Agreement [4] where
Su agreed to sell to Antonino the subject property for P39,500,000.00. However, in view of a
disagreement as to who between them would shoulder the payment of the capital gains tax, the sale
did not proceed as intended.[5]

On July 9, 2004, Antonino filed a complaint against Su with the Regional Trial Court (RTC)
of Makati City, for the reimbursement of the cost of repairs on the subject property and payment of
damages. The complaint was raffled to Branch 149 and docketed as Civil Case No. 04-802.[6] Later
that same day, Antonino filed an amended complaint to enforce the Undertaking Agreement and
compel Su to sell to her the subject property.[7]

In an Order[8] dated December 8, 2004, the RTC dismissed Antoninos complaint on the grounds
of improper venue and non-payment of the appropriate docket fees. According to the RTC, Antoninos
complaint is one for specific performance, damages and sum of money, which are personal actions
that should have been filed in the court of the place where any of the parties resides. Antonino and Su
reside in Muntinlupa and Manila, respectively, thus Makati City is not the proper venue. Specifically:
 11

The instant case is an action for specific performance with damages, a personal
action, which may be commenced and tried where the plaintiff or any of the principal
plaintiffs resides, or where the defendant or any of the principal defendants resides
(Section 2, Rule 5 of the Rules of Court). Records show that plaintiff is a resident of 706
Acacia Avenue, Ayala Alabang Village, Muntinlupa City while defendant is a resident of
550 Sto. Cristo St., Binondo, Manila. Hence, the instant case should have been filed in
the place of residence of either the plaintiff or defendant, at the election of the
plaintiff. Contrary to the claim of plaintiff, the alleged written agreements presented by the
plaintiff in her Amended Complaint do not contain any stipulation as to the venue of
actions. x x x[9]

The RTC also ruled that it did not acquire jurisdiction over Antoninos complaint in view of her
failure to pay the correct amount of docket fees. Citing Manchester Development Corporation v. Court
of Appeals,[10] the RTC ruled that:

Anent the non-payment of filing fees on the Amended Complaint, plaintiff alleges
that no new assessment was made when the Amended Complaint was filed since there
[were] no additional damages prayed for. The Manchester decision has been recently
relaxed as to allow additional payment of the necessary fees if the Honorable Court so
orders an assessment thereof.

The Court is not persuaded.

The Amended Complaint, which the Court notes to have been filed at 4:00 oclock
in the afternoon or few hours after the initial complaint was filed, further prays that
judgment be rendered ordering defendant to sell his property located at 1623 Cypress,
Dasmarias Village, Makati City covered by TCT No. 426900 to plaintiff in accordance with
the terms and conditions stipulated in their agreement dated July 7, 2004 and ordering
defendant to desist from selling his property to any other party other than plaintiff., which
makes the instant case also an action for Specific Performance in addition to the claim
for Damages. However, the value of the described property was not stated in the prayer
and no docket fees were paid. Thus, following the ruling of the Supreme Court in the case
of Manchester Development Corporation vs. Court of Appeals, G.R. No. 75919, May 7,
1987, that the Court acquires jurisdiction over any case only upon the payment of the
prescribed docket fee, the instant case is hereby dismissed.[11]

On December 23, 2004, Su filed an Omnibus Motion,[12] praying for the cancellation of the notice
of lis pendens, which Antonino caused to be annotated on the title covering the subject property and
the issuance of a summary judgment on his counterclaims. Su, among others, alleged the propriety of
cancelling the notice of lis pendens in view of the dismissal of the complaint and Antoninos failure to
appeal therefrom.

On January 3, 2005, Antonino filed a Motion for Reconsideration,[13] claiming that her complaint
is a real action and the location of the subject property is determinative of its venue. Alternatively, she
submitted a certification issued by the Commission on Elections, stating that she is a resident
of Makati City. She then prayed for the reinstatement of her complaint and issuance of an order
directing the clerk of court to assess the proper docket fees. This was denied by the RTC in an
 12

Order[14] dated January 6, 2005, holding that there was non-compliance with Sections 4 and 5 of Rule
15 of the Rules of Court.

Antonino thus filed a Motion for Reconsideration[15] dated January 21, 2005, claiming that there
was due observance of the rules on motions. Antonino alleged that her motion for reconsideration from
the RTCs December 8, 2004 was set for hearing on January 7, 2005 and Su received a copy thereof
on January 6, 2005. Antonino pleaded for a liberal interpretation of the rules as Su was notified of her
motion before the hearing thereon and was not in any way prejudiced. She also reiterated her
arguments for the reinstatement of her complaint.

In a Joint Resolution[16] dated February 24, 2005, the RTC denied Sus Omnibus Motion and
Antoninos January 21, 2005 Motion for Reconsideration. The RTC refused to cancel the notice of lis
pendens, holding that:

It is quite clear that the dismissal of the Amended Complaint was anchored on two
grounds, e.g. (1) for improper venue and (2) for non-payment of docket fee. It is
elementary that when a complaint was dismissed based on these grounds[,] the court did
not resolve the case on the merits. Moreover, a court cannot acquire jurisdiction over the
subject matter of a case unless the docket fees are paid x x x. Thus, the cause of action
laid down in the complaint remains unresolved for proper re-filing before the proper
court. Furthermore, the Supreme Court said: The cancellation of such a precautionary
notice is therefore also a mere incident in the action, and may be ordered by the Court
having jurisdiction of it at any given time. x x x[17]

The RTC maintained its earlier ruling that Antoninos Motion for Reconsideration from the
December 8, 2004 Order is pro-forma and did not suspend the running of the period to file an
appeal. The RTC also reiterated that Antoninos complaint is a personal action such that the proper
venue therefore is either the City of Manila or Muntinlupa City.

On April 1, 2005, Antonino filed with the CA a petition for annulment of judgment. [18] Antonino
prayed for the nullification of the RTCs Order dated December 8, 2004 dismissing her complaint, Order
dated January 6, 2005 denying her motion for reconsideration and Joint Resolution dated February 24,
2005 denying her motion for reconsideration of the January 6, 2005 Order. According to Antonino, the
RTC committed grave abuse of discretion amounting to lack of jurisdiction when it ruled that her action
for the enforcement of the Undertaking Agreement is personal and when it deprived her of an
opportunity to pay the correct amount of docket fees. The RTCs grave abuse of discretion, Antonino
posited, was likewise exhibited by its strict application of the rules on motions and summary denial of
her motion for reconsideration.

In its Decision[19] dated May 26, 2008, the CA dismissed Antoninos petition. While the CA
recognized Antoninos faulty choice of remedy, it proceeded to resolve the issues she raised relative to
the dismissal of her complaint. Thus:
 13

It should be stressed that in this case, there is neither allegation in the petition, nor
sufficient proof adduced showing highly exceptional circumstance to justify the failure of
petitioner to avail of the remedies of appeal, petition for relief or other appropriate remedy
through no fault attributable to [her] before filing this petition for annulment of judgment. In
Manipor v. Ricafort, the Supreme Court held, thus:

If the petitioner failed to avail of such remedies without sufficient

justification, he cannot avail of an action for annulment because, otherwise,
he would benefit from his own inaction or negligence.

Notwithstanding the foregoing procedural infirmity, and in the interest of justice, we

shall look into the issues raised and decide the case on the merit.

A perusal of the allegations of the complaint unambiguously shows that petitioner

seeks to enforce the commitment of private respondent to sell his property in accordance
with the terms and conditions of their purported agreement dated July 7, 2004. By
implication, petitioner does not question the ownership of private respondent over the
property nor does she claim, by any color of title, right to possess the property or to its
recovery. The action is simply for the enforcement of a supposed contract, and thus,
unmistakably a personal action.

Guided by the above rule (Section 2 of the 1997 Rules of Court), petitioner should
have filed the case either in Muntinlupa City, where she resides, or in Manila, where
private respondent maintains his residence. Other than filing the complaint in any of these
places, petitioner proceeds with the risk of a possible dismissal of her case. Unfortunately
for petitioner, private respondent forthwith raised improper venue as an affirmative
defense and his stand was sustained by trial court, thus, resulting to the dismissal of the
case.

Further, it is important to note that in a petition for annulment of judgment based

on lack of jurisdiction, the petitioner must show not merely an abuse of jurisdictional
discretion but an absolute lack of jurisdiction. The concept of lack of jurisdiction as a
ground to annul a judgment does not embrace abuse of discretion. Petitioner, by claiming
grave abuse of discretion on the part of the trial court, actually concedes and presupposes
the jurisdiction of the court to take cognizance of the case. She only assails the manner
in which the trial court formulated its judgment in the exercise of its jurisdiction. It follows
that petitioner cannot use lack of jurisdiction as ground to annul the judgment by claiming
grave abuse of discretion. In this case where the court refused to exercise jurisdiction due
to improper venue, neither lack of jurisdiction nor grave abuse of discretion is available to
challenge the assailed order of dismissal of the trial court.[20] (Citations omitted)

Antonino filed a motion for reconsideration, which was denied by the CA in its Resolution dated
December 5, 2008. [21]
Issue

The sole issue for the resolution of this Court is the propriety of Antoninos use of the remedy of a
petition for annulment of judgment as against the final and executory orders of the RTC.

Our Ruling
 14

In Ramos v. Judge Combong, Jr.,[22] this Court expounded that the remedy of annulment of judgment
is only available under certain exceptional circumstances as this is adverse to the concept of
immutability of final judgments:

Annulment of judgment is a recourse equitable in character, allowed only in exceptional

cases as where there is no available or other adequate remedy. Rule 47 of the 1997
Rules of Civil Procedure, as amended, governs actions for annulment of judgments or
final orders and resolutions, and Section 2 thereof explicitly provides only two grounds for
annulment of judgment, i.e., extrinsic fraud and lack of jurisdiction. The underlying reason
is traceable to the notion that annulling final judgments goes against the grain of finality
of judgment. Litigation must end and terminate sometime and somewhere, and it is
essential to an effective administration of justice that once a judgment has become final,
the issue or cause involved therein should be laid to rest. The basic rule of finality of
judgment is grounded on the fundamental principle of public policy and sound practice
that at the risk of occasional error, the judgment of courts and the award of quasi-judicial
agencies must become final at some definite date fixed by law.[23] (Citations omitted)

In Barco v. Court of Appeals,[24] this Court emphasized that only void judgments, by reason of
extrinsic fraud or the courts lack of jurisdiction, are susceptible to being annulled.

The law sanctions the annulment of certain judgments which, though final, are
ultimately void. Annulment of judgment is an equitable principle not because it allows a
party-litigant another opportunity to reopen a judgment that has long lapsed into finality
but because it enables him to be discharged from the burden of being bound to a
judgment that is an absolute nullity to begin with.[25]

Apart from the requirement that the existence of extrinsic fraud or lack of jurisdiction should be
amply demonstrated, one who desires to avail this remedy must convince that the ordinary and other
appropriate remedies, such as an appeal, are no longer available for causes not attributable to him. This
is clearly provided under Section 1, Rule 47 of the Rules of Court.
Antoninos recourse to annulment of judgment is seriously flawed and the reasons are
patent. There is therefore no reason to disturb the questioned issuances of the RTC that are already
final and executory.

A petition for annulment of judgment cannot serve as a

substitute for the lost remedy of an appeal.

First, Antonino cannot pursue the annulment of the various issuances of the RTC, primary of
which is the Order dated December 8, 2004, in order to avoid the adverse consequences of their
becoming final and executory because of her neglect in utilizing the ordinary remedies
available. Antonino did not proffer any explanation for her failure to appeal the RTCs Order dated
December 8, 2004 and, thereafter, the Order dated January 6, 2005, denying her Motion for
Reconsideration dated January 3, 2005. Knowledge of rudimentary remedial rules immediately
indicates that an appeal was already available from the Order dated December 8, 2004, as this is a
final order as contemplated under Sections 2, 3 and 5 of Rule 41 of the Rules of Court, and there was
no legal compulsion for Antonino to move for reconsideration. Nonetheless, since there is no bar for
her to file a motion for reconsideration so as to give the RTC opportunity to reverse itself before
 15

elevating the matter for the appellate courts review, appeal is the prescribed remedy from the denial of
such motion and not another motion for reconsideration. While Section 1 of Rule 41 of the Rules of
Court includes an order denying a motion for new trial or reconsideration in the enumeration of
unappealable matters, this Court clarified in Quelnan v. VHF Philippines, Inc.[26] that such refers to a
motion for reconsideration of an interlocutory order and the denial of a motion for reconsideration of an
order of dismissal is a final order, therefore, appealable. Moreover, a second motion for reconsideration
from a final judgment or order is prohibited, hence, can never interrupt the period to perfect an appeal.

The RTC may have been overly strict in the observance of the three-day notice rule under
Section 4, Rule 15 of the Rules of Court contrary to liberal stance taken by this Court in cases when
the purpose of such rule can be achieved by giving the opposing party sufficient time to study and
controvert the motion.[27] Justice and equity would thus suggest that the fifteen-day period within which
Antonino can appeal should be counted from her receipt on January 7, 2005 [28] of the Order dated
January 6, 2005 denying her Motion for Reconsideration dated January 3, 2005. Unfortunately, even
liberality proved to be inadequate to neutralize the adverse consequences of Antoninos negligence as
she allowed such period to lapse without filing an appeal, erroneously believing that a second motion
for reconsideration is the proper remedy. While a second motion for reconsideration is not prohibited
insofar as interlocutory orders are concerned,[29] the Orders dated December 8, 2004 and January 6,
2005 are final orders.

In fact, even if the period to appeal would be counted from Antoninos receipt of the Order dated
February 24, 2005 denying her second motion for reconsideration, she interposed no appeal and filed
a petition for annulment of judgment on April 1, 2005 instead. This, for sure, constitutes a categorical
admission that the assailed issuances of the RTC had already become final and executory in view of
her omission to perfect an appeal within the mandated period. By no means can her petition for
annulment of judgment prosper as that would, in effect, sanction her blatant negligence or sheer
obliviousness to proper procedure.

Let it be stressed at the outset that before a party can avail of the reliefs provided
for by Rule 47, i.e., annulment of judgments, final orders, and resolutions, it is a
condition sine qua non that one must have failed to move for new trial in, or appeal from,
or file a petition for relief against said issuances or take other appropriate remedies
thereon, through no fault attributable to him. If he failed to avail of those cited remedies
without sufficient justification, he cannot resort to the action for annulment provided in
Rule 47, for otherwise he would benefit from his own inaction or negligence. [30] (Citation
omitted)

Grave abuse of discretion is not a ground to annul a final

and executory judgment.

Second, a petition for annulment of judgment can only be based on extrinsic fraud and lack of
jurisdiction and cannot prosper on the basis of grave abuse of discretion. By anchoring her petition on
the alleged grave abuse of discretion that attended the dismissal of her complaint and the denial of her
two (2) motions for reconsideration, Antonino, is, in effect, enlarging the concept of lack of
 16

jurisdiction. As this Court previously clarified in Republic of the Philippines v. G Holdings, Inc.,[31] lack
of jurisdiction as a ground for the annulment of judgments pertains to lack of jurisdiction over the person
of the defending party or over the subject matter of the claim. It does not contemplate grave abuse of
discretion considering that jurisdiction is different from the exercise thereof. As ruled in Tolentino v.
Judge Leviste:[32]

Jurisdiction is not the same as the exercise of jurisdiction. As distinguished from the
exercise of jurisdiction, jurisdiction is the authority to decide a cause, and not the decision
rendered therein. Where there is jurisdiction over the person and the subject matter, the
decision on all other questions arising in the case is but an exercise of the jurisdiction. And
the errors which the court may commit in the exercise of jurisdiction are merely errors of
judgment which are the proper subject of an appeal.[33] (Citation omitted)

In fact, the RTC did not gravely abuse its discretion or err in dismissing Antoninos complaint. The RTC
was correct in classifying Antoninos cause of action as personal and in holding that it was instituted in
the wrong venue. Personal action is one that is founded on privity of contracts between the parties; and
in which the plaintiff usually seeks the recovery of personal property, the enforcement of a contract, or
recovery of damages. Real action, on the other hand, is one anchored on the privity of real estate,
where the plaintiff seeks the recovery of ownership or possession of real property or interest in
it.[34] Antoninos following allegations in her amended complaint show that one of her causes of action
is one for the enforcement or consummation of a contract, hence, a personal action:

XII

On July 7, 2004, plaintiff and defendant executed a document entitled Undertaking

Agreement (copy of which is hereto attached as Annex H) wherein defendant agreed to
sell said property to plaintiff who has leased said property since March 21, 1978 up to
the present with the plaintiff paying a downpayment of $50,000.00 US dollars the
following day, July 8, 2004.

XIV

Defendant also refused to accept the $50,000.00 US Dollars and was about to tear up
the document they previously signed the day before when plaintiff prevented him from
doing so.
XV

Consequently, plaintiff discovered that defendant was already negotiating to sell

the said property to another Chinese national who incidentally is also one of plaintiffs
buyers.

Premises considered, in the interest of substantial justice, it is most respectfully prayed

that after due hearing that judgment be rendered:

1. Ordering defendant to sell his property located at

1623 Cypress, Dasmarias Village, Makati City covered by TCT No. 426900 to plaintiff in
accordance with the terms and conditions stipulated in their agreement dated July 7,
2004.
 17

Antoninos cause of action is premised on her claim that there has already been a perfected contract of
sale by virtue of their execution of the Undertaking Agreement and Su had refused to comply with his
obligations as seller. However, by claiming the existence of a perfected contract of sale, it does not
mean that Antonino acquired title to the subject property. She does not allege otherwise and tacitly
acknowledges Sus title to the subject property by asking for the consummation of the sale.

That there is a private document supposedly evidencing the alleged sale does not confer to
Antonino title to the subject property. Ownership is transferred when there is actual or constructive
delivery and the thing is considered delivered when it is placed in the control or possession of the buyer
or when the sale is made through a public instrument and the contrary does not appear or cannot be
clearly inferred.[36] In other words, Antoninos complaint is not in the nature of a real action as ownership
of the subject property is not at issue.

Moreover, that the object of the alleged sale is a real property does not make Antoninos complaint real
in nature in the absence of a contrary claim of title. After a contract of sale is perfected, the right of the
parties to reciprocally demand performance, thus consummation, arises the vendee may require the
vendor to compel the transfer the title to the object of the sale [37] and the vendor may require the
payment of the purchase price.[38] The action to cause the consummation of a sale does not involve an
adverse claim of ownership as the vendors title is recognized and the vendor is simply being asked to
perform an act, specifically, the transfer of such title by any of the recognized modes of delivery.

Considering that the filing of the complaint in a wrong venue sufficed for the dismissal thereof, it would
be superfluous to discuss if Antoninos non-payment of the correct docket fees likewise warranted it.

At any rate, even if the RTC erred in ordering the dismissal of her complaint, such had already
become final and executory and will not be disturbed as it had jurisdiction and it was not alleged, much
less, proved that there was extrinsic fraud. Moreover, annulment of the assailed orders of the RTC will
not issue if ordinary remedies, such as an appeal, were lost and were not availed of because of
Antoninos fault. Litigation should end and terminate sometime and somewhere. It is essential to an
effective and efficient administration of justice that, once a judgment has become final, the winning
party should not be deprived of the fruits of the verdict.[39]

WHEREFORE, premises considered, the petition is DENIED for lack of merit and the Decision
dated May 26, 2008 and Resolution dated December 5, 2008 of the Court of Appeals in CA-G.R. SP
No. 89145 are hereby AFFIRMED.

LASMIS VS DONG
This case involves a conflict of ownership and possession over an untitled parcel of land, denominated as Lot
No. 1, with an area of 80,736 square meters. The property is located along Km. 5 Asin Road, Baguio City and
is part of a larger parcel of land with an area of 186,090 square meters. While petitioners are the actual
 18

occupants of Lot No. 1, respondent is claiming ownership thereof and is seeking to recover its possession from
petitioners.

According to respondent Margarita Semon Dong-E (Margarita), her familys ownership and occupation of Lot
No. 1 can be traced as far back as 1922 to her late grandfather, Ap-ap.[5] Upon Ap-aps death, the property was
inherited by his children, who obtained a survey plan in 1964 of the 186,090-square meter property, which
included Lot No. 1.[6] On the same year, they declared the property for taxation purposes in the name of The
Heirs of Ap-ap.[7] The 1964 tax declaration bears a notation that reads: Reconstructed from an old Tax
Declaration No. 363 dated May 10, 1922 per true of same presented.[8]

The heirs of Ap-ap then executed, for a P500.00 consideration, a Deed of Quitclaim[9] on February 26, 1964 in
favor of their brother Gilbert Semon (Margaritas father).

Sometime between 1976 and 1978,[10] Gilbert Semon together with his wife Mary Lamsis, allowed his in-laws
Manolo Lamsis and Nancy Lamsis-Kitma, to stay on a portion of Lot No. 1 together with their respective
families.[11] They were allowed to erect their houses, introduce improvements, and plant trees thereon. When
Manolo Lamsis and Nancy Lamsis-Kitma died sometime in the 1980s, their children, petitioners Delfin Lamsis
(Delfin) and Agustin Kitma (Agustin), took possession of certain portions of Lot No. 1. Delfin possessed 4,000
square meters of Lot No. 1, while Agustin occupied 5,000 square meters thereof.[12] Nevertheless, the heirs of
Gilbert Semon tolerated the acts of their first cousins.

When Gilbert Semon died in 1983,[13] his children extrajudicially partitioned the property among themselves and
allotted Lot No. 1 thereof in favor of Margarita.[14] Since then, Margarita allegedly paid the realty tax over Lot No.
1[15] and occupied and improved the property together with her husband; while at the same time, tolerating her
first cousins occupation of portions of the same lot.

This state of affairs changed when petitioners Delfin and Agustin allegedly began expanding their occupation
on the subject property and selling portions thereof.[16] Delfin allegedly sold a 400-square meter portion of Lot
No. 1 to petitioner Maynard[17] Mondiguing (Maynard) while Agustin sold another portion to petitioner Jose
Valdez (Jose).[18]

With such developments, Margarita filed a complaint[19] for recovery of ownership, possession, reconveyance
and damages against all four occupants of Lot No. 1 before the Regional Trial Court (RTC) of Baguio City. The
case was docketed as Civil Case No. 4140-R and raffled to Branch 59. The complaint prayed for the annulment
of the sales to Maynard and Jose and for petitioners to vacate the portions of the property which exceed the
areas allowed to them by Margarita.[20] Margarita claimed that, as they are her first cousins, she is willing to
donate to Delfin and Agustin a portion of Lot No. 1, provided that she retains the power to choose such portion.[21]
Petitioners denied Margaritas claims of ownership and possession over Lot No. 1. According to Delfin and
Agustin, Lot No. 1 is a public land claimed by the heirs of Joaquin Smith (not parties to the case).[22] The Smiths
gave their permission for Delfin and Agustins parents to occupy the land sometime in 1969 or 1970. They also
presented their neighbors who testified that it was Delfin and Agustin as well as their respective parents who
occupied Lot No. 1, not Margarita and her parents.

Delfin and Agustin also assailed the muniments of ownership presented by Margarita as fabricated,
unauthenticated, and invalid. It was pointed out that the Deed of Quitclaim, allegedly executed by all of Ap-aps
children, failed to include two Rita Bocahan and Stewart Sito.[23] Margarita admitted during trial that Rita
 19

Bocahan and Stewart Sito were her uncle and aunt, but did not explain why they were excluded from the
quitclaim.

According to Maynard and Jose, Delfin and Agustin were the ones publicly and openly in possession of the
land and who introduced improvements thereon. They also corroborated Delfin and Agustins allegation that the
real owners of the property are the heirs of Joaquin Smith.[24]
In order to debunk petitioners claim that the Smiths owned the subject property, Margarita presented a certified
copy of a Resolution from the Land Management Office denying the Smiths application for recognition of the
subject property as part of their ancestral land.[25] The resolution explains that the application had to be denied
because the Smiths did not possess, occupy or utilize all or a portion of the property x x x. The actual occupants
(who were not named in the resolution) whose improvements are visible are not in any way related to the
applicant or his co-heirs.[26]

To bolster her claim of ownership and possession, Margarita introduced as evidence an unnumbered resolution
of the Community Special Task Force on Ancestral Lands (CSTFAL) of the Department of Environment and
Natural Resources (DENR), acting favorably on her and her siblings ancestral land claim over a portion of the
186,090-square meter property.[27] The said resolution states:

The land subject of the instant application is the ancestral land of the herein
applicants. Well-established is the fact that the land treated herein was first declared for taxation
purposes in 1922 under Tax Declaration No. 363 by the applicants grandfather Ap-Ap (one
name). Said application was reconstructed in 1965 after the original got lost during the
war. These tax declarations were issued and recorded in the Municipality of Tuba, Benguet,
considering that the land was then within the territorial jurisdiction of the said municipality. That
upon the death of declarant Ap-Ap his heirs x x x transferred the tax declaration in their name,
[which tax declaration is] now with the City assessors office of Baguio.

The land consisting of four (4) lots with a total area of ONE HUNDRED EIGHTY SIX
THOUSAND NINETY (186,090) SQUARE METERS, is covered by Psu-198317 duly approved
by the Director of Lands on October 4, 1963 in the name of Ap-Ap (one name). In 1964, the
same land was the subject of a petition filed by Gilbert Semon, as petitioner, before the Court of
First Instance of the City of Baguio in the reopening of Judicial Proceedings under Civil Case No.
1, GLRO Record No. 211 for the registration and the issuance of Certificate of Title of said
land. The land registration case was however overtaken by the decision of the Supreme Court
declaring such judicial proceedings null and void because the courts of law have no jurisdiction.

It has been sufficiently substantiated by the applicants that prior to and at the time of the
pendency of the land registration case and henceforth up to and including the present, the herein
applicants by themselves and through their predecessor-in-interest have been in exclusive,
continuous, and material possession and occupation of the said parcel of land mentioned above
under claim of ownership, devoting the same for residential and agricultural purposes. Found are
the residential houses of the applicants as well as those of their close relatives, while the other
areas planted to fruit trees, coffee and banana, and seasonal crops. Also noticeable therein are
permanent stone and earthen fences, terraces, clearings, including irrigation gadgets.

On the matter of the applicant[s] indiguinity [sic] and qualifications, there is no doubt that they are
members of the National Cultural Communities, particularly the Ibaloi tribe. They are the
legitimate grandchildren of Ap-Ap (one name) who lived along the Asin Road area. His legal
heirs are: Orani Ap-Ap, married to Calado Salda; Rita Ap-Ap, married to Jose Bacacan; Sucdad
Ap-Ap, married to Oragon Wakit; and Gilbert Semon, a former vice-mayor of Tuba, Benguet,
[who] adopted the common name of their father Semon, as it is the customary practice among
the early Ibalois. x x x

On the matter regarding the inheritance of the heirs of Ap-Ap, it is important to state [that] Gilbert
Semon consolidated ownership thereof and became the sole heir in 1964, by way of a Deed of
 20

Quitclaim executed by the heirs in his favor. As to the respective share of the applicants[] co-
heirs, the same was properly adjudicated in 1989 with the execution of an Extrajudicial
Settlement/ Partition of Estate with Waiver of Rights.

With regard to the overlapping issue, it is pertinent to state that application No. Bg-L-066 of
Thomas Smith has already been denied by us in our Resolution dated November 1997. As to
the other adverse claims therein by reason of previous conveyances in favor of third parties, the
same were likewise excluded resulting in the reduction of the area originally applied from ONE
HUNDRED EIGHTY SIX THOUSAND NINETY (186,090) SQUARE METERS, more or less to
ONE HUNDRED TEN THOUSAND THREE HUNDRED FORTY TWO (110,342) SQUARE
METERS, more or less. Considering the foregoing developments, we find no legal and
procedural obstacle in giving due course to the instant application.

Now therefore, we hereby [resolve] that the application for Recognition of Ancestral Land Claim
filed by the Heirs of Gilbert Semon, represented by Juanito Semon, be granted [and] a Certificate
of Ancestral Land Claim (CALC) be issued to the herein applicants by the Secretary, Department
of Environment and Natural Resources, Visayas Avenue, Diliman, Quezon City, through the
Regional Executive Director, DENR-CAR, Diego Silang Street, Baguio City. The area of the
claim stated herein above is however subject to the outcome of the final survey to be forthwith
executed.

Carried this 23rd day of June 1998.[28]

The resolution was not signed by two members of the CSTFAL on the ground that the signing of the
unnumbered resolution was overtaken by the enactment of the Republic Act (RA) No. 8371 or the Indigenous
Peoples Rights Act of 1997 (IPRA). The IPRA removed the authority of the DENR to issue ancestral land claim
certificates and transferred the same to the National Commission on Indigenous Peoples (NCIP).[29] The
Ancestral Land Application No. Bg-L-064 of the Heirs of Gilbert Semon was transferred to the NCIP, Cordillera
Administrative Region, La Trinidad, Benguet and re-docketed as Case No. 05-RHO-CAR-03.[30] The petitioners
filed their protest in the said case before the NCIP.The same has been submitted for resolution.

Ruling of the Regional Trial Court[31]

After summarizing the evidence presented by both parties, the trial court found that it preponderates in favor of
respondents long-time possession of and claim of ownership over the subject property.[32] The survey plan of
the subject property in the name of the Heirs of Ap-ap executed way back in 1962 and the tax declarations
thereafter issued to the respondent and her siblings all support her claim that her family and their predecessors-
in-interest have all been in possession of the property to the exclusion of others. The court likewise gave
credence to the documentary evidence of the transfer of the land from the Heirs of Ap-ap to respondents father
and, eventually to respondent herself. The series of transfers of the property were indications of the respondents
and her predecessors interest over the property. The court opined that while these pieces of documentary
evidence were not conclusive proof of actual possession, they lend credence to respondents claim because, in
the ordinary course of things, persons will not execute legal documents dealing with real property, unless they
believe, and have the basis to believe, that they have an interest in the property subject of the legal documents

In contrast, the trial court found nothing on record to substantiate the allegations of the petititioners that they and
their parents were the long-time possessors of the subject property. Their own statements belied their
assertions. Petitioner Maynard and Jose both admitted that they could not secure title for the property from the
Bureau of Lands because there were pending ancestral land claims over the property.[34] Petitioner Agustins
Townsite Sales Application over the property was held in abeyance because of respondents own claim, which
was eventually favorably considered by the CSTFAL.[35]
 21

The dispositive portion of the trial courts Decision reads:

WHEREFORE, premises considered, judgment is hereby rendered in favor of the [respondent]

and against the [petitioners]

(1) Declaring the transfer of a portion of Lot 1 of PSU 198317 made by the [petitioner]
Delfin Lamsis to Menard Mondiguing and Jose Valdez, Jr. null and void;

(2) Ordering the [petitioners] Delfin Lamsis, Agustin Kitma, Menard Mondiguing and Jose
Valdez, Jr., to vacate the area they are presently occupying that is within Lot 1 of PSU 198317
belonging to the [respondent] and to surrender possession thereof to the [respondent];

(3) To pay [respondent] attorneys fees in the amount of P10,000.00; and

(4) To pay the costs of suit.

SO ORDERED.[36]

It appears that no motion for reconsideration was filed before the trial court. Nevetheless, the trial court issued
an Order[37] allowing the petitioners Notice of Appeal.[38]

Ruling of the Court of Appeals[39]

The sole issue resolved by the appellate court was whether the trial court erred in ruling in favor of respondent
in light of the adduced evidence. Citing the rule on preponderance of evidence, the CA held that the respondent
was able to discharge her burden in proving her title and interest to the subject property. Her documentary
evidence were amply supported by the testimonial evidence of her witnesses.

In contrast, petitioners only made bare allegations in their testimonies that are insufficient to overcome
respondents documentary evidence.

Petitioners moved for a reconsideration[40] of the adverse decision but the same was denied.

Hence this petition, which was initially denied for failure to show that the CA committed any reversible
error.[41] Upon petitioners motion for reconsideration,[42] the petition was reinstated in the Courts January 15,
2007 Resolution.[43]

Petitioners arguments

Petitioners assign as error the CAs appreciation of the evidence already affirmed and considered by the trial
court. They maintain that the change in the presiding judges who heard and decided their case resulted in the
appreciation of what would otherwise be inadmissible evidence.[44] Petitioners ask that the Court exempt their
petition from the general rule that a trial judges assessment of the credibility of witnesses is accorded great
respect on appeal.
To support their claim that the trial and appellate courts erred in ruling in favor of respondent, they assailed the
various pieces of evidence offered by respondent. They maintain that the Deed of Quitclaim executed by the
Heirs of Ap-ap is spurious and lacks the parties and witnesses signatures. Moreover, it is a mere photocopy,
which was never authenticated by the notary public in court and no reasons were proferred regarding the
 22

existence, loss, and contents of the original copy.[45] Under the best evidence rule, the Deed of Quitclaim is
inadmissible in evidence and should have been disregarded by the court.

Respondent did not prove that she and her husband possessed the subject property since time
immemorial. Petitioners argue that respondent admitted possessing and cultivating only the land that lies
outside the subject property.[46]

Petitioners next assail the weight to be given to respondents muniments of ownership, such as the tax
declarations and the survey plan. They insist that these are not indubitable proofs of respondents ownership
over the subject property given that there are other claimants to the land (who are not parties to this case) who
also possess a survey plan over the subject property.[47]

Petitioners then assert their superior right to the property as the present possessors thereof. They cite pertinent
provisions of the New Civil Code which presume good faith possession on the part of the possessor and puts
the burden on the plaintiff in an action to recover to prove her superior title.[48]

Petitioners next assert that they have a right to the subject property by the operation of acquisitive
prescription. They posit that they have been in possession of a public land publicly, peacefully, exclusively and
in the concept of owners for more than 30 years. Respondents assertion that petitioners are merely possessors
by tolerance is unsubstantiated.[49]

Petitioners also maintain that the reivindicatory action should be dismissed for lack of jurisdiction in light of the
enactment of the IPRA, which gives original and exclusive jurisdiction over disputes involving ancestral lands
and domains to the NCIP.[50] They assert that the customary laws of the Ibaloi tribe of the Benguet Province
should be applied to their dispute as mandated by Section 65, Chapter IX of RA 8371, which states: When
disputes involve ICCs/IPs,[51] customary laws and practices shall be used to resolve the dispute.

In the alternative that jurisdiction over an accion reivindicatoria is held to be vested in the trial court, the
petitioners insist that the courts should dismiss the reivindicatory action on the ground of litis pendentia.[52] They
likewise argue that NCIP has primary jurisdiction over ancestral lands, hence, the courts should not interfere
when the dispute demands the exercise of sound administrative discretion requiring special knowledge,
experience and services of the administrative tribunal x x x In cases where the doctrine of primary jurisdiction is
clearly applicable, the court cannot arrogate unto itself the authority to resolve a controversy, the jurisdiction
over which is initially lodged with an administrative body of special competence.[53] The courts should stand
aside in order to prevent the possibility of creating conflicting decisions.[54]

Respondents arguments

Respondent opines that the appellate court did not commit any reversible error in affirming the trial courts
decision. The present petition is a mere dilatory tactic to frustrate the speedy administration of justice.[55]

Respondent also asserts that questions of fact are prohibited in a Rule 45 petition.[56] Thus, the appreciation
and consideration of the factual issues are no longer reviewable.[57]

The issue of lack of jurisdiction is raised for the first time in the petition before this Court. It was never raised
before the trial court or the CA. Thus, respondent insists that petitioners are now barred by laches from attacking
 23

the trial courts jurisdiction over the case. Citing Aragon v. Court of Appeals,[58] respondent argues that the
jurisdictional issue should have been raised at the appellate level at the very least so as to avail of the doctrine
that the ground lack of jurisdiction over the subject matter of the case may be raised at any stage of the
proceedings even on appeal.[59]

Respondent maintains that there is no room for the application of litis pendentia because the issues in the
application for ancestral land claim are different from the issue in a reivindicatory action. The issue before the
NCIP is whether the Government, as grantor, will recognize the ancestral land claim of respondent over a public
alienable land; while the issue in the reivindicatory case before the trial court is ownership, possession, and right
to recover the real property.[60]

Given that the elements of lis pendens are absent in case at bar, the allegation of forum-shopping is also bereft
of merit. Any judgment to be rendered by the NCIP will not amount to res judicata in the instant case.[61]

Issues

The petitioners present the following issues for our consideration:

1. Whether the appellate court disregarded material facts and circumstances in affirming the trial courts
decision;

2. Whether petitioners have acquired the subject property by prescription;

3. Whether the trial court has jurisdiction to decide the case in light of the effectivity of RA 8371 or the
Indigenous Peoples Rights Act of 1997 at the time that the complaint was instituted;

4. If the trial court retains jurisdiction, whether the ancestral land claim pending before the NCIP should
take precedence over the reivindicatory action.[62]

Our Ruling

Whether the appellate court disregarded material facts and

circumstances in affirming the trial courts decision

Both the trial and the appellate courts ruled that respondent has proven her claims of ownership and possession
with a preponderance of evidence. Petitioners now argue that the two courts erred in their appreciation of the
evidence. They ask the Court to review the evidence of both parties, despite the CAs finding that the trial court
committed no error in appreciating the evidence presented during trial. Hence, petitioners seek a review of
questions of fact, which is beyond the province of a Rule 45 petition. A question of fact exists if the uncertainty
centers on the truth or falsity of the alleged facts.[63] Such questions as whether certain items of evidence should
be accorded probative value or weight, or rejected as feeble or spurious, or whether the proofs on one side or
the other are clear and convincing and adequate to establish a proposition in issue, are without doubt questions
of fact.[64]

Since it raises essentially questions of fact, this assignment of error must be dismissed for it is settled
that only questions of law may be reviewed in an appeal by certiorari.[65] There is a question of law when there
is doubt as to what the law is on a certain state of facts. Questions of law can be resolved without having to re-
 24

examine the probative value of evidence presented, the truth or falsehood of facts being admitted.[66] The instant
case does not present a compelling reason to deviate from the foregoing rule, especially since both trial and
appellate courts agree that respondent had proven her claim of ownership as against petitioners claims. Their
factual findings, supported as they are by the evidence, should be accorded great respect.

In any case, even if petitioners arguments attacking the authenticity and admissibility of the Deed of Quitclaim
executed in favor of respondents father are well-taken, it will not suffice to defeat respondents claim over the
subject property. Even without the Deed of Quitclaim, respondents claims of prior possession and ownership
were adequately supported and corroborated by her other documentary and testimonial evidence. We agree
with the trial courts observation that, in the ordinary course of things, people will not go to great lengths to
execute legal documents and pay realty taxes over a real property, unless they have reason to believe that they
have an interest over the same.[67]

The fact that respondents documents traverse several decades, from the 1960s to the 1990s, is an indication
that she and her family never abandoned their right to the property and have continuously exercised rights of
ownership over the same.

Moreover, respondents version of how the petitioners came to occupy the property coincides with the same
timeline given by the petitioners themselves. The only difference is that petitioners maintain they came into
possession by tolerance of the Smith family, while respondent maintains that it was her parents who gave
permission to petitioners. Given the context under which the parties respective statements were made, the
Court is inclined to believe the respondents version, as both the trial and appellate courts have concluded, since
her version is corroborated by the documentary evidence.

Whether petitioners have acquired the subject property by

prescription

Assuming that the subject land may be acquired by prescription, we cannot accept petitioners claim of
acquisition by prescription. Petitioners admitted that they had occupied the property by tolerance of the owner
thereof. Having made this admission, they cannot claim that they have acquired the property by prescription
unless they can prove acts of repudiation. It is settled that possession, in order to ripen into ownership, must be
in the concept of an owner, public, peaceful and uninterrupted. Possession not in the concept of owner, such
as the one claimed by petitioners, cannot ripen into ownership by acquisitive prescription, unless the juridical
relation is first expressly repudiated and such repudiation has been communicated to the other party. Acts of
possessory character executed due to license or by mere tolerance of the owner are inadequate for purposes
of acquisitive prescription. Possession by tolerance is not adverse and such possessory acts, no matter how
long performed, do not start the running of the period of prescription.[68]

In the instant case, petitioners made no effort to allege much less prove any act of repudiation sufficient for the
reckoning of the acquisitive prescription. At most, we can find on record the sale by petitioners Delfin and
Agustin of parts of the property to petitioners Maynard and Jose; but the same was done only in 1998, shortly
before respondent filed a case against them. Hence, the 30-year period necessary for the operation of
acquisitve prescription had yet to be attained.

Whether the ancestral land claim pending before the National

Commission on Indigenous Peoples (NCIP) should take
precedence over the reivindicatory action
 25

The application for issuance of a Certificate of Ancestral Land Title pending before the NCIP is akin to a
registration proceeding. It also seeks an official recognition of ones claim to a particular land and is also in
rem. The titling of ancestral lands is for the purpose of officially establishing ones land as an ancestral
land.[69] Just like a registration proceeding, the titling of ancestral lands does not vest ownership[70] upon the
applicant but only recognizes ownership[71] that has already vested in the applicant by virtue of his and his
predecessor-in-interests possession of the property since time immemorial. As aptly explained in another case:

It bears stressing at this point that ownership should not be confused with a certificate of
title. Registering land under the Torrens system does not create or vest title because
registration is not a mode of acquiring ownership. A certificate of title is merely an evidence of
ownership or title over the particular property described therein. Corollarily, any question
involving the issue of ownership must be threshed out in a separate suit x x x The trial
court will then conduct a full-blown trial wherein the parties will present their respective evidence
on the issue of ownership of the subject properties to enable the court to resolve the said issue.
x x x[72] (Emphasis supplied)

Likewise apropos is the following explanation:

The fact that the [respondents] were able to secure [TCTs over the property] did not operate to
vest upon them ownership of the property. The Torrens system does not create or vest title. It
has never been recognized as a mode of acquiring ownership x x x If the [respondents] wished
to assert their ownership, they should have filed a judicial action for recovery of
possession and not merely to have the land registered under their respective names. x x x
Certificates of title do not establish ownership.[73] (Emphasis supplied)

A registration proceeding is not a conclusive adjudication of ownership. In fact, if it is later on found in

another case (where the issue of ownership is squarely adjudicated) that the registrant is not the owner of the
property, the real owner can file a reconveyance case and have the title transferred to his name.[74]

Given that a registration proceeding (such as the certification of ancestral lands) is not a conclusive adjudication
of ownership, it will not constitute litis pendentia on a reivindicatory case where the issue is ownership.[75] For
litis pendentia to be a ground for the dismissal of an action, the following requisites must concur: (a) identity of
parties, or at least such parties who represent the same interests in both actions; (b) identity of rights asserted
and relief prayed for, the relief being founded on the same facts; and (c) the identity with respect to the two
preceding particulars in the two cases is 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.[76] The third element is
missing, for any judgment in the certification case would not constitute res judicata or be conclusive on the
ownership issue involved in the reivindicatory case. Since there is no litis pendentia, there is no reason for the
reivindicatory case to be suspended or dismissed in favor of the certification case.

Moreover, since there is no litis pendentia, we cannot agree with petitioners contention that respondent
committed forum-shopping. Settled is the rule that forum shopping exists where the elements of litis
pendentia are present or where a final judgment in one case will amount to res judicata in the other.[77]

Whether the trial court has jurisdiction to decide the case in light of
the effectivity of RA 8371 or the Indigenous Peoples Rights Act of
1997 at the time that the complaint was instituted
 26

For the first time in the entire proceedings of this case, petitioners raise the trial courts alleged lack of jurisdiction
over the subject-matter in light of the effectivity[78] of the IPRA at the time that the complaint was filed in
1998. They maintain that, under the IPRA, it is the NCIP which has jurisdiction over land disputes involving
indigenous cultural communities and indigenous peoples.

As a rule, an objection over subject-matter jurisdiction may be raised at any time of the proceedings. This is
because jurisdiction cannot be waived by the parties or vested by the agreement of the parties. Jurisdiction is
vested by law, which prevails at the time of the filing of the complaint.

An exception to this rule has been carved by jurisprudence. In the seminal case of Tijam v. Sibonghanoy,[79] the
Court ruled that the existence of laches will prevent a party from raising the courts lack of jurisdiction. 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 the presumption that the party entitled to assert it either has abandoned or
declined to assert it.[80] Wisely, some cases[81] have cautioned against applying Tijam, except for the most
exceptional cases where the factual milieu is similar to Tijam.

In Tijam, the surety could have raised the issue of lack of jurisdiction in the trial court but failed to do so. Instead,
the surety participated in the proceedings and filed pleadings, other than a motion to dismiss for lack of
jurisdiction. When the case reached the appellate court, the surety again participated in the case and filed their
pleadings therein. It was only after receiving the appellate courts adverse decision that the surety awoke from
its slumber and filed a motion to dismiss, in lieu of a motion for reconsideration. The CA certified the matter to
this Court, which then ruled that the surety was already barred by laches from raising the jurisdiction issue.

In case at bar, the application of the Tijam doctrine is called for because the presence of laches cannot be
ignored. If the surety in Tijam was barred by laches for raising the issue of jurisdiction for the first time in the CA,
what more for petitioners in the instant case who raised the issue for the first time in their petition before this
Court.

At the time that the complaint was first filed in 1998, the IPRA was already in effect but the petitioners never
raised the same as a ground for dismissal; instead they filed a motion to dismiss on the ground that the value
of the property did not meet the jurisdictional value for the RTC. They obviously neglected to take the IPRA into
consideration.

When the amended complaint was filed in 1998, the petitioners no longer raised the issue of the trial courts lack
of jurisdiction. Instead, they proceeded to trial, all the time aware of the existence of the IPRA as evidenced by
the cross-examination[82] conducted by petitioners lawyer on the CSTFAL Chairman Guillermo Fianza. In the
cross-examination, it was revealed that the petitioners were aware that the DENR, through the CSTFAL, had
lost its jurisdiction over ancestral land claims by virtue of the enactment of the IPRA. They assailed the validity
of the CSTFAL resolution favoring respondent on the ground that the CSTFAL had been rendered functus
officio under the IPRA. Inexplicably, petitioners still did not question the trial courts jurisdiction.

When petitioners recoursed to the appellate court, they only raised as errors the trial courts appreciation of the
evidence and the conclusions that it derived therefrom. In their brief, they once again assailed the CSTFALs
resolution as having been rendered functus officio by the enactment of IPRA.[83] But nowhere did petitioners
assail the trial courts ruling for having been rendered without jurisdiction.
 27

It is only before this Court, eight years after the filing of the complaint, after the trial court had already conducted
a full-blown trial and rendered a decision on the merits, after the appellate court had made a thorough review
of the records, and after petitioners have twice encountered adverse decisions from the trial and the appellate
courts that petitioners now want to expunge all the efforts that have gone into the litigation and resolution of their
case and start all over again. This practice cannot be allowed.

Thus, even assuming arguendo that petitioners theory about the effect of IPRA is correct (a matter which
need not be decided here), they are already barred by laches from raising their jurisdictional objection under
the circumstances.

WHEREFORE, premises considered, the petition is denied for lack of merit. The March 30, 2006 Decision of
the Court of Appeals in CA-G.R. CV No. 78987 and its May 26, 2006 Resolution denying the motion for
reconsideration are AFFIRMED.

DE LEON V CA

In this petition for review, we are asked to set aside the amended decision of the Court of Appeals
dated November 8, 1990 in "Corazon Jalbuena de Leon v. Uldarico Inayan," (CA-G.R. CV No.
19777) 1 which reversed its original decision dated May 24, 1990. 2

The subject property in the case at bench involves two parcels of irrigated riceland covering an area
of 117,785 square meters located in Barangays Guintas and Bingke, Napnod, Leganes, Iloilo. Jesus
Jalbuena, the owner of the land, entered into a verbal lease contract in 1970 with Uldarico Inayan, for
one year renewable for the same period. Inayan, private respondent herein, bound himself to deliver
252 cavans of palay each year as rental to be paid during the first ten days of January. Private
respondent who was a godson of Jesus Jalbuena, was allowed to continue with the lease from year
to year.

Petitioner Corazon Jalbuena de Leon is the daughter of Jesus Jalbuena and the transferee of the
subject property.

Although private respondent cultivated the subject property through hired men, the cavans of palay
were paid annually until 1983 when Inayan ceased paying the agreed rental and instead, asserted
dominion over the land. When asked by the petitioner to vacate the land, he refused to do so,
prompting the latter to bring an action in court.

In March 1984, herein petitioner filed a complaint against private respondent before the Regional Trial
Court of Iloilo City for "Termination of Civil Law Lease; Recovery of Possession, Recovery of Unpaid
Rentals and Damages."

Private respondent, in his Answer, claimed that the land had been tenanted by his father since 1938
and that he has already been issued Certificates of Land Transfer (CLT) for the subject property.
These Certificates of Land Transfer were subsequently canceled by the then Ministry of Agrarian
Reform on November 22, 1983 upon a finding that said lands were owned by Jesus Jalbuena and
that the CLTs were erroneously issued. 3

On April 11, 1984, the lower court issued an order adopting the procedure in agrarian cases.

The dispositive portion of the trial court's decision dated February 26, 1988 in favor of petitioner De
Leon reads:

WHEREFORE, Premises considered, judgment is hereby rendered:

1. Declaring the lease contract between plaintiff and defendant as a civil law lease, and
that the same has already been terminated due to defendant's failure to pay his rentals
from 1983 up to the present;
 28

2. Ordering defendant Uldarico Inayan and his privies and successors-in-interest to

immediately vacate the land subject-matter of this complaint and to return possession
thereof to plaintiff;

3. Ordering defendant Uldarico Inayan to pay plaintiff Corazon Jalbuena de Leon, one
thousand two hundred sixty (1,260) cavans of palay representing unpaid rentals from
1983 up to 1987, or its money equivalent computed at the current market price of palay,
less whatever amount may have been deposited by defendant with the Court during the
pendency of this case, which deposit should be released in favor of plaintiff;

4. Ordering defendant Inayan to pay to plaintiff Jalbuena de Leon the sum of

P38,501.28 representing the unpaid irrigation fees, and all fees thereafter until
possession of the land has been transferred to the plaintiff;

5. Ordering defendant Inayan to pay to plaintiff Jalbuena de Leon the sum of P3,000.00
as attorney' s fees; P1,000.00 as litigation expenses, and P2,000.00 as moral damages,
plus costs; and

6. Dismissing defendant's counterclaim for lack of merit.4

On appeal to the Court of Appeals, private respondent raised the sole issue of jurisdiction and alleged
that the lower court, acting as Court of Agrarian Relations, had no jurisdiction over the action.

The respondent appellate court, on May 24, 1990, affirmed the trial court's decision, disposing as
follows:

WHEREFORE, premises considered, the decision appealed from should be, as it is

hereby AFFIRMED, with a MODIFICATION that the period within which appellant
should be ordered to pay the rentals in arrears now covers the years 1983 to 1990.
Costs against appellant.5

It held that while jurisdiction must exist as a matter of law, private respondent's attack on the
jurisdiction of the lower court must fail for he is guilty of estoppel. 6 Despite several opportunities to
question the jurisdiction of the lower court, he failed to do so. Moreover, it was he who insisted,
through his misrepresentations, that the case, involving, as it does, purely agrarian issues, should be
referred to the Ministry of Agrarian Reform. 7 Finally, the appellate court held that since regional trial
courts, by express provision of B.P. 129, Section 24, now have exclusive original jurisdiction over
agrarian cases, but still applying the special rules of agrarian procedure, it was no error for the court
below, even if acting as an agrarian court, to resolve a controversy involving a civil lease. 8

Private respondent's motion to reconsider the above decision was granted by the Court of Appeals on
November 8, 1990. Respondent court then set aside its earlier decision and dismissed the civil case
filed by petitioner below (Civil Case No. 15628) for want of jurisdiction. In its amended decision, the
appellate court held that petitioner's complaint below was anchored on acción interdictal, a summary
action for recovery of physical possession that should have been brought before the proper inferior
court. To make private respondent a deforciant so that the unlawful detainer suit may be properly
filed, it is necessary to allege when demand to pay rent and to vacate were made. The court found
that this requisite was not specifically met in petitioner's complaint below. Such failure on her part is
fatal to her cause since the one-year period within which a detainer suit may be instituted had not yet
elapsed when Civil Case No. 15628 was filed. Therefore, the court below was devoid of jurisdiction to
entertain the case. 9

Hence this petition for review.

It is petitioner's contention that the Court of Appeals erred in holding that the case below is an
unlawful detainer action. Since the parties did not confine themselves to issues pertaining solely to
possession but also to the nature of the lease contract, the case is not one of unlawful detainer but
one incapable of pecuniary estimation.
 29

Next, petitioner argues that the issue of lack of jurisdiction should not have been resolved in favor of
private respondent who had voluntarily submitted to the jurisdiction of the court a quo and raised the
issue only after an adverse decision was rendered against him.

Aside from emphasizing the correctness of respondent court's ruling that the case below was a mere
ejectment case, private respondent raises the issue of res judicata in his comment.

Private respondent Inayan claims that the issue in the instant petition, i.e. whether or not the trial
court, acting as an agrarian court, had jurisdiction over the unlawful detainer suit filed by petitioner,
had already been ruled upon by the Court of Appeals in CA G.R. SP No. 15700 entitled "Uldarico
Inayan v. Hon. Alonsagay and Corazon Jalbuena" and the petition for review of said decision had
already been denied by this Court in G.R. No. 89312. 10

The petition is impressed with merit.

The primary issue presented here revolves around the jurisdiction of the trial court, then acting as a
court of agrarian relations employing agrarian procedure, to try the suit filed by petitioner.

Jurisdiction of the court over the subject matter is conferred only by the Constitution or by law. 11 It is
determinable on the basis of allegations in the complaint. 12

An error in jurisdiction can be raised at any time and even for the first time on appeal. 13 Barring
highly meritorious and exceptional circumstances, 14 neither estoppel nor waiver may be raised as
defenses to such an error. 15

In order to determine whether the court below had jurisdiction, it is necessary to first ascertain the
nature of the complaint filed before it.

A study of the complaint instituted by petitioner in the lower court reveals that the case is, contrary to
the findings of the respondent appellate court, not one of unlawful detainer.

An unlawful detainer suit (acción interdictal) together with forcible entry are the two forms of an
ejectment suit that may be filed to recover possession of real property. Aside from the summary
action of ejectment, acción publicianaor the plenary action to recover the right of possession
and acción reivindicatoria or the action to recover ownership which includes recovery of possession,
make up the three kinds of actions to judicially recover possession. 16

Illegal detainer consists in withholding by a person from another of the possession of a land or
building to which the latter is entitled after the expiration or termination of the former's right to hold
possession by virtue of a contract, express or implied. 17 An ejectment suit is brought before the
proper inferior court to recover physical possession only or possession de facto and not
possession de jure, where dispossession has lasted for not more than one year. Forcible entry and
unlawful detainer are quieting processes and the one-year time bar to the suit is in pursuance of the
summary nature of the action. 18 The use of summary procedure in ejectment cases is intended to
provide an expeditious means of protecting actual possession or right to possession of the property.
They are not processes to determine the actual title to an estate. If at all, inferior courts are
empowered to rule on the question of ownership raised by the defendant in such suits, only to resolve
the issue of possession. 19 Its determination on the ownership issue is, however, not conclusive.

Acción publiciana is the plenary action to recover the right of possession when dispossession has
lasted for more than one year or when dispossession was effected by means other than those
mentioned in Rule 70. 20 Under
these circumstances, a plenary action 21 may be brought before the regional trial court.22

Acción reivindicatoria, which is an action to recover ownership, including the recovery of possession,
should also be filed in the regional trial court.

Petitioner's complaint was for "Termination of Civil Law Lease; Recovery of Possession; Recovery of
Unpaid Rentals and Damages" 23 After alleging the facts regarding the lease of the subject property,
including Inayan's refusal to pay rent and to vacate, petitioner prayed that the trial court declare the
 30

civil law lease (and not "tenancy or agricultural lease") terminated. Plaintiff likewise prayed that
defendant be ordered to vacate the premises, pay back rentals, unpaid irrigation fees, moral and
exemplary damages and litigation fees.

Clearly, the case involves more than just the issue of possession. It was necessary for the trial court
below to determine whether the lease was civil and not an agricultural or tenancy relationship and
whether its termination was in order. More specifically, the complaint emphasized, in paragraph 4:

That in entering into the contract, Jesus Jalbuena and defendant Uldarico Inayan
definitely agreed that the contract was to be CIVIL LAW LEASE NOT TENANCY OR
AGRICULTURAL LEASE, for a period of one (1) year renewable for the same period at
the option and agreement of the parties; 24

As correctly determined by the trial court, one of the issues in the case below was whether or not the
contract entered into by the plaintiff and defendant was a civil law lease or an agricultural lease. If the
former, the next issue was whether the lease contract between the parties had been terminated in
1983 for failure of defendant to pay his annual rental. 25

A detainer suit exclusively involves the issue of physical possession. The case below, however, did
not concern merely the issue of possession but as well, the nature of the lease contracted by
petitioner's predecessor-in-interest and private respondent. It likewise involved the propriety of
terminating the relationship contracted by said parties, as well as the demand upon defendant to
deliver the premises and pay unpaid rentals, damages and incidental fees.

Where the issues of the case extend beyond those commonly involved in unlawful detainer suits,
such as for instance, the respective rights of parties under various contractual arrangements and the
validity thereof, the case is converted from a mere detainer suit to one "incapable of pecuniary
estimation," thereby placing it under the exclusive original jurisdiction of the regional trial courts
(formerly the courts of first instance). 26

Not being merely a case of ejectment, the regional trial court possessed jurisdiction to try and resolve
the case.

Still on the question of jurisdiction, private respondent Inayan, as appellant before the respondent
court, claimed that the trial court, acting as a court of agrarian relations, did not have jurisdiction over
the complaint filed by petitioner because the latter did not concern itself with tenancy or agrarian
matters. The Court of Appeals, in its original decision, ruled that private respondent was guilty of
estoppel. Accordingly, he can not successfully raise the issue.

In the past, the principle of estoppel has been used by the courts to avoid a clear case of injustice. Its
use as a defense to a jurisdictional error is more of an exception rather than the rule. The
circumstances outlining estoppel must be unequivocal and intentional, for it is an exception to
standard legal norms and is generally applied only in highly exceptional and justifiable cases. 27

We find that the situation in the case at bench falls within the ambit of justifiable cases where
estoppel may be applied. The trial court's recourse to agrarian procedure was undoubtedly provoked
by private respondent Inayan's insistence on the existence of a tenancy relationship with petitioner.
Private respondent cannot now use these same misrepresentations to assert the court's lack of
jurisdiction. He cannot invoke the court's jurisdiction to secure affirmative relief against petitioner and,
after failing to obtain such relief, repudiate or question that same jurisdiction. 28

Participation in judicial proceedings where the court was devoid of jurisdiction is not normally
considered as estoppel because the jurisdiction of a court is mandated by law. Estoppel is likewise
not appreciated where a mistaken belief in the court's jurisdiction is maintained.

But private respondent's case is different for it does not involve an honest mistake. He is directly
responsible for the trial court's use of the special rules of agrarian procedure. His insistence brought
about the want of jurisdiction he conveniently asserted before the appellate court, and only after an
adverse decision was leveled against him. Private respondent cannot be allowed to seek refuge
 31

under the protective mantle of the law after he has abused and made a mockery of it. He is, therefore,
considered estopped from asserting the court's want of jurisdiction to try the case.

Moreover, the case was ostensibly one that involved agrarian matters, as alleged by private
respondent. Hence the trial court cannot be faulted for its use of agrarian procedure.

The respondent court also correctly held:

Finally, and more importantly, while it is true that when the trial court decreed that the
procedure outlined in P.D. 946 was to be observed at the trial of the case at bar, it, in
effect assumed its character as an agrarian court which is a court of limited jurisdiction,
and that since agrarian matters are solely cognizable by agrarian courts in the exercise
of their limited jurisdiction (Depositario vs. Herbas 121 SCRA 756) conversely, agrarian
courts have no jurisdiction in cases where there is no tenancy relation between the
parties (Dumlao vs. De Guzman, 1 SCRA 144). We believe, however, that the dictum
enunciated in the Dumlao case obtains only when, as before, the then C.F.I. and C.A.R.
are two separate and distinct entities. Consequently, the foregoing legal principle no
longer finds much relevance under the present system, said agrarian courts having
been integrated into the Regional Trial Courts which, by express mandate of Section 24
of B.P. 129, shall have exclusive original jurisdiction over agrarian cases although they
are ordained to continue applying the special rules of procedure provided for said
cases. This being the case, it is no error for the court below, acting as an agrarian court,
to resolve a controversy involving a civil lease since it is already a settled rule that
inasmuch as the RTC is a court of general jurisdiction, whether a particular matter
should be resolved by it in the exercise of its general jurisdiction, or in its limited
jurisdiction, or in its limited jurisdiction, is not a jurisdictional question but a procedural
question involving a mode of practice which, therefore, may be waived (Manalo vs.
Mariano, L-33850, Jan. 22, 1976; Santos vs. Banayo, L-31854, Sept. 9,
1982). 29(Emphasis ours.)

On the matter of res judicata raised by private respondent, we conclude that the same does not find
application in instant petition. The issues herein and in the petition in G.R. No. 89312 30 are not the
same. In the latter, the issue involved execution pending appeal granted by the trial court judge to
petitioner Jalbuena De Leon. The Court of Appeals 31 enjoined the respondent judge from enforcing
the execution pending appeal after having found no valid and compelling reason to justify said
execution. Then too, private respondent asserted, and the appellate court found, that an agrarian
court has no jurisdiction in a case where there exists no tenancy relation between the parties. The
court said:

In any event, the matter of jurisdiction of respondent court having been impugned and
said issue permeating and going as it does into the very competence of the trial court to
act on CAR Case No. 15628, it behooves us to tread softly and give the benefit of the
doubt to petitioner, for should execution pending appeal be allowed and the judgment is
later ordered vacated on the ground that the trial court had no jurisdiction to hear the
case, then it would be well-nigh impossible to restore petitioner to his former status. 32

From the foregoing quote, we find that the decision of the appellate court did not categorically rule on
the matter of jurisdiction but only made mention of it in passing and in ruling upon the real issue of the
correctness of execution pending appeal ordered by the respondent judge. The decision in CA-G.R.
SP No. 15700 became final after the petition for review of said decision was dismissed by the Court
for failure to pay the prescribed legal fees and to attach duplicate original or certified true copies of
the questioned decision. 33

In sum, we have concluded that the case filed by petitioner below, not being one of unlawful detainer,
the regional trial court had jurisdiction to hear and try the case.

Moreover, as shown in the foregoing paragraphs, private respondent is estopped from asserting the
lower court's lack of jurisdiction.
 32

WHEREFORE, the petition is GRANTED. The amended decision of the Court of Appeals dated
November 8, 1990 in CA G.R. CV No. 19777 ("Corazon Jalbuena de Leon v. Uldarico Inayan") is
SET ASIDE and the original decision dated May 24, 1990 is REINSTATED.

FIRST CORP VS CA
In 1991, the corporate officers of the petitioner corporation namely: Vicente C. Esmeralda, Edgardo C.
Cerbo, Nicolas E. Esposado, Rafael P. La Rosa and herein private respondent Abillar, convinced
private respondent Sacris to invest in their business as the petitioner corporation needed a fresh equity
infusion, particularly in its Rema Tip Top Division, to make viable its continuous operation. The
petitioner corporation made a promise of turning such equity into shareholding in the petitioner
corporation. While the conversion of such investment into shareholding was still pending, private
respondent Sacris and the petitioner corporation agreed to consider the same as a loan which shall
earn an interest of one percent per month. Accordingly, from the year 1991 up to 1994, private
respondent Sacris had already extended a P1.2 million loan to the Rema Tip Top Division of the
petitioner corporation.

In 1997, private respondent Sacris extended another P1 million loan to the petitioner
corporation. Thus, from 1991 up to 1997, the total loan extended by private respondent Sacris to the
petitioner corporation reached a total amount of P2.2 million. All loans were given by private respondent
Sacris to herein private respondent Abillar, as the latter was then the President and Chairman of the
Board of Directors of the petitioner corporation. The receipts for the said loans were issued by the
petitioner corporation in the name of private respondent Abillar. Petitioner corporation failed to convert
private respondent Sacriss investment/loan into equity or shareholding in the petitioner corporation. In
its place, petitioner corporation agreed to pay a monthly interest of 2.5% on the amount of the loan
extended to it by private respondent Sacris. Petitioner corporation likewise made partial payments
of P400,000.00 on the principal obligation and interest payment in the amounts of P33,750.27
and P23,250.00, thus, leaving an outstanding balance of P1.8 million.

In the meantime or on 27 February 1998, a Special Stockholders Meeting of the petitioner

corporation was held to elect the members of the Board of Directors and also to elect a new set of
officers. The stockholders of the petitioner corporation no longer re-elected private respondent Abillar
as President and member of the Board of Directors because they had already lost their confidence in
him for having been involved in various anomalies and irregularities during his tenure. Thereby, private
respondent Abillar was ousted from the petitioner corporation.

On 13 March 1998, private respondent Sacris, for a valuable consideration, executed a Deed of
Assignment[4] in favor of private respondent Abillar, assigning and transferring to private respondent
Abillar his remaining collectibles due from the petitioner corporation in the amount of P1.8 million. As
consideration for the execution of the aforesaid Deed of Assignment, private respondent Abillar shall
pay private respondent Sacris the outstanding balance of P1.8 million due from the petitioner
corporation on or before 30 July 1998.

On 10 April 1998, private respondent Abillar, by virtue of the Deed of Assignment, filed a
Complaint for Sum of Money with Prayer for a Writ of Preliminary Attachment and Damages before the
RTC of Pasig City against the petitioner corporation. The said case was docketed as Civil Case No.
66757. While the case was still pending, both private respondents agreed to rescind the Deed of
Assignment that they had executed on 13 March 1998 for failure of private respondent Abillar to comply
 33

with his undertaking to pay private respondent Sacris the amount of P1.8 million on or before 30 July
1998. Thus, on 27 August 1998, private respondents Sacris and Abillar executed a Deed of
Rescission[5] of the Deed of Assignment dated 13 March 1998. Consequently, private respondent
Sacris himself made a demand upon the petitioner corporation to pay its outstanding obligation of P1.8
million but the latter refused to do so.

Hence, before pre-trial of the aforesaid Civil Case No. 66757, private respondent Sacris filed a
Motion for Intervention attaching thereto his Complaint in Intervention. At first, the RTC of Pasig City
denied the said Motion for Intervention. Subsequently, however, the trial court admitted the Complaint
in Intervention filed by private respondent Sacris and dismissed the Complaint originally filed by private
respondent Abillar against the petitioner corporation. The admission of the Complaint in Intervention
prompted petitioner corporation to file a Petition for Certiorari and Prohibition before the Court of
Appeals, docketed as CA-G.R. SP No. 54322 entitled, First Corporation v. Hon. Jose R. Hernandez,
Presiding Judge of Branch 158 of the Regional Trial Court of Pasig City and Mr. Eduardo Sacris. In a
Decision[6] dated 31 May 2001, the Third Division of the Court of Appeals granted the Petition filed by
the petitioner corporation and issued a Writ of Certiorari, as a result of which, the Orders of the RTC of
Pasig City dated 27 April 1999 and 21 July 1999[7] in Civil Case No. 66757 were set aside. The
appellate court directed Judge Jose R. Hernandez[8] to dismiss the Complaint with prejudice and to
deny the Motion in Intervention without prejudice. The dispositive portion of the aforesaid Decision
reads:

WHEREFORE, finding merit in the [P]etition, the Court issues the writ of certiorari
and sets aside the Orders dated 27 April 1999 and 21 July 1999 in Civil Case No.
66757. The respondent judge is directed to dismiss the Complaint with prejudice and
deny the Motion in Intervention without prejudice. Resultantly, if they are so minded, the
[herein] petitioner First Corporation may institute an action in pursuit of its claims against
[herein private respondent] Cesar A. Abillar; and [herein private respondent] Eduardo
Sacris may sue the [petitioner] First Corporation on his claims embodied in his rejected
Complaint in Intervention.[9]

Based on the aforesaid Decision of the Court of Appeals, private respondent Sacris filed a
Complaint for Sum of Money with Damages before the RTC of Quezon City against the petitioner
corporation, docketed as Civil Case No. Q01-44599, to recover his alleged collectible amount of P1.8
million due from the petitioner corporation. Petitioner corporation filed its Answer denying the material
allegations stated in the Complaint. Petitioner corporation denied having liability to private
respondent Sacris, as it had no knowledge of or consent to the purported transactions or dealings that
private respondent Sacris may have had with private respondent Abillar. Subsequently, petitioner
corporation filed a Third-Party Complaint against private respondent Abillar alleging that the
investment/loan transactions of private respondent Sacris, the basis of his cause of action against the
petitioner corporation, were all entered into by private respondent Abillar without the knowledge,
consent, authority and/or approval of the petitioner corporation or of the latters Board of Directors. The
aforesaid transactions were not even ratified by the petitioner corporation or by its Board of
Directors. Private respondent Abillar filed his Answer to the said Third-Party Complaint raising therein
the same allegations found in the Complaint filed by private respondent Sacris. Pre-trial ensued
followed by the trial on the merits.

On 28 June 2004, the RTC of Quezon City rendered a Decision in Civil Case No. Q01-44599 in
favor of the private respondents. The decretal portion of which reads:
 34

WHEREFORE, premises considered, the court renders judgment in favor of

[herein private respondents] EDUARDO M. SACRIS and CESAR A. ABILLAR but against
[herein petitioner] FIRST CORPORATION, as follows:

1. Ordering [petitioner] corporation to pay the balance of P1,800,000.00 plus an

interest of twenty-four percent (24%) per annum computed from the time this action was
filed until fully paid;
2. Ordering [petitioner] corporation to pay [private respondent Abillar] P20,000.00
as and by way of attorneys fees;
3. Ordering [petitioner] corporation to pay [private respondent Sacris] P50,000.00 as and
by way of attorneys fees; and
4. Ordering [petitioner] corporation to pay the cost of suit.[10]

Feeling aggrieved, the petitioner corporation appealed the above-quoted Decision of the court a
quo to the appellate court where it was docketed as CA-G.R. CV No. 84660. On 29 November 2005,
the Court of Appeals rendered a Decision dismissing the appeal filed by the petitioner corporation
because it did not find any reversible error in the Decision of the RTC of Quezon City dated 28 June
2004. The petitioner corporation moved for the reconsideration of the said Decision but it was denied
by the Court of Appeals in its Resolution dated 14 February 2005 because the issues raised therein
had already been passed upon by the appellate court.

Hence, this Petition for Certiorari under Rule 65.

Petitioner corporation comes before this Court alleging grave abuse of discretion amounting to
lack or excess of jurisdiction on the part of the RTC of Quezon City in rendering its Decision dated 28
June 2004 in Civil Case No. Q01-44599, as affirmed by the Court of Appeals in its Decision and
Resolution dated 29 November 2005 and 14 February 2006, respectively, in CA-G.R. CV No.
84660. Thus, petitioner corporation now presents the following issues for this Courts resolution:

I. PUBLIC RESPONDENTS COMMITTED GRAVE ABUSE OF

DISCRETION AND ACTED WITHOUT AND/OR IN EXCESS OF THEIR
JURISDICTION IN HOLDING THAT PRIVATE RESPONDENT [SACRISS]
CLAIMS OF A PURPORTED LOAN ARE SUPPORTED BY PREPONDERANCE
OF EVIDENCE.

II. PUBLIC RESPONDENTS COMMITTED GRAVE ABUSE OF

DISCRETION AND ACTED CONTRARY TO LAW AND EVIDENCE IN
HOLDING THAT PETITIONER BENEFITED FROM THE PURPORTED LOAN
FROM PRIVATE RESPONDENT [SACRIS].

III. PUBLIC RESPONDENTS COMMITTED GRAVE ABUSE OF

DISCRETION AND/OR ACTED WITHOUT AND/OR IN EXCESS OF THEIR
JURISDICTION IN NOT FINDING THAT PRIVATE RESPONDENT ABILLAR
WAS NOT AUTHORIZED BY PETITIONER TO BORROW MONEY FROM
PRIVATE REPSONDENT SACRIS.

IV. PUBLIC RESPONDENTS COMMITTED GRAVE ABUSE OF

DISCRETION AND WITHOUT AND/OR IN EXCESS OF JURISDICTION IN NOT
AWARDING DAMAGES TO PETITIONER AND IN DISMISSING THE THIRD-
PARTY COMPLAINT FILED BY PETITIONER AGAINST [PRIVATE
RESPONDENT] CESAR ABILLAR.
 35

In the Memorandum[11] filed by the petitioner corporation, it avers that the RTC of Quezon City
and the appellate court erred in holding that private respondents claim of the existence of the purported
loans was supported by a preponderance of evidence, despite the fact that the pieces of documentary
evidence presented by the private respondents were tainted with irregularities. Thus, the RTC and the
appellate court committed grave abuse of discretion amounting to excess of their jurisdiction in giving
credence to these pieces of documentary evidence presented by the private respondents. The
aforesaid pieces of documentary evidence are the following: (1) the certifications and official receipts
to prove petitioner corporations indebtedness to private respondent Sacris; (2) Exhibits G-FF, inclusive,
consisting of check vouchers which allegedly proved petitioner corporations loans from private
respondent Sacris which was subject to 2.5% interest; (3) deposit slips and official receipts, supposedly
evidence of deposit payments made by private respondent Abillar to the petitioner corporation; (4)
Exhibit GG, to show that the amount of P150,000.00 given in the form of a loan was used by the
petitioner corporation in paying its employees 13 th month pay; and (5) Exhibit RR, which consists of a
handwritten note to prove petitioner corporations offer to settle amicably its account with private
respondent Sacris.

Petitioner corporation further argues that the conclusion made by the RTC of Quezon City and
the appellate court that it benefited from the loans obtained from private respondent Sacris had no basis
in fact and in law. More so, it was grave abuse of discretion on the part of the RTC of Quezon City and
the Court of Appeals to conclude that the alleged loans were reflected in its financial
statements. Petitioner corporation points out that its financial statements covering the period 1992-1997
revealed that only its financial statements for the years 1992 and 1993 reflected entries of loans
payable. The other financial statements following the year 1993 no longer had any entries of
outstanding loan due from the petitioner corporation. Thus, the RTC of Quezon City and the appellate
court had no basis for claiming that the alleged loans from private respondent Sacris were reflected in
its financial statements.

Also, petitioner corporation alleges that it was grave abuse of discretion for the RTC and the
appellate court to hold that private respondent Abillar was authorized by the petitioner corporation to
borrow money from private respondent Sacris, deliberately ignoring the provisions of the by-laws of
petitioner corporation which only authorized private respondent Abillar, as President, to act as its
signatory of negotiable instruments and contracts. The by-laws clearly authorized private respondent
Abillar to perform only the ministerial act of signing, and never gave private respondent Abillar a blanket
authority to bind the petitioner corporation in any kind of contract, regardless of its nature and its legal
consequences or effects on the petitioner corporation and its stockholders.

Lastly, petitioner corporation contends that the RTC and the Court of Appeals likewise acted
with grave abuse of discretion in not awarding damages in its favor and in dismissing its Third-Party
Complaint against private respondent Abillar.

On the other hand, private respondents argue that the grounds enumerated by the petitioner
corporation for the allowance of its Petition for Certiorari before this Court clearly call for the review of
the factual findings of the RTC of Quezon City. Private respondents further avow that the petitioner
corporation is simply using the remedy of certiorari provided for under Rule 65 of the Revised Rules of
Civil Procedure as a substitute for an ordinary appeal. They claim that certiorari under Rule 65 of the
aforesaid Rules cannot be used for the review of the findings of fact and evidence. Neither is it the
 36

proper remedy to cure errors in proceedings nor to correct erroneous conclusions of law or fact. Thus,
private respondents maintain that the petitioner corporation is merely using the remedy of certiorari as
a delaying tool to prevent the Decision of the RTC of Quezon City from immediately becoming final and
executory.

Likewise, private respondents aver that for failure of the petitioner corporation to allege in its
appeal before the Court of Appeals that the RTC of Quezon City committed grave abuse of discretion,
petitioner corporation cannot now make the said allegation in its Petition before this Court so as to
justify its availment of the remedy of certiorari to annul the Decision of the RTC of Quezon City dated
28 June 2004.

The Petition is unmeritorious.

Petitioner corporation evidently availed itself of the wrong mode of appeal. Although petitioner
corporation ascribes grave abuse of discretion amounting to lack or excess of jurisdiction on the part
of both the RTC of Quezon City and the appellate court in rendering their respective Decisions, a closer
look on the grounds relied upon by the petitioner corporation in its present Petition for Certiorari will
clearly reveal that the petitioner corporation seeks a review of the factual findings and evidence of the
instant case.

It is a well-entrenched rule that this Court is not a trier of facts. [12] This Court will not pass upon
the findings of fact of the trial court, especially if they have been affirmed on appeal by the appellate
court.[13] Unless the case falls under the recognized exceptions,[14] the rule should not be disturbed.

In the case at bar, the findings of the RTC of Quezon City as well as the appellate court are
properly supported by evidence on record. Both courts found that the alleged loans extended to the
petitioner corporation by private respondent Sacris were reflected in the petitioner corporations
financial statements, particularly in the years 1992-1993, were contrary to the claim of petitioner
corporation. The said financial statements of the petitioner corporation were not the sole bases used
by the RTC of Quezon City and by the appellate court in its findings of liability against the petitioner
corporation. The RTC of Quezon City also took into consideration the pieces of documentary
evidence[15] which likewise became the grounds for its findings that indeed, private respondent Sacris
had extended a loan to petitioner corporation, and that the same was given to private respondent
Abillar, and received by the petitioner corporation. Those pieces of documentary evidence very well
supported the claim of private respondent Sacris that the petitioner corporation received money from
him through its former President, private respondent Abillar.Thus, petitioner corporation cannot claim
that it never consented to the act of private respondent Abillar of entering into a loan/investment
transaction with private respondent Sacris, for there are documents that would prove that the money
was received by the petitioner corporation, and the latter acknowledged receipt of said money. The
same pieces of evidence likewise confirm the findings of the RTC of Quezon City that the petitioner
corporation benefited from the said transaction; therefore, it should be held liable for the same amount
of its unpaid obligation to private respondent Sacris. As the findings of the RTC of Quezon City and the
appellate court are supported by evidence, this Court finds no reason to deviate from the heretofore
cited rule.
It is a fundamental aphorism in law that a review of facts and evidence is not the province of the
extraordinary remedy of certiorari, which is extra ordinem - beyond the ambit of
 37

appeal.[16] In certiorari proceedings, judicial review does not go as far as to examine and assess the
evidence of the parties and to weigh the probative value thereof.[17] It does not include an inquiry as to
the correctness of the evaluation of evidence.[18] Any error committed in the evaluation of evidence is
merely an error of judgment that cannot be remedied by certiorari. An error of judgment is one which
the court may commit in the exercise of its jurisdiction. An error of jurisdiction is one where the act
complained of was issued by the court without or in excess of jurisdiction, or with grave abuse of
discretion, which is tantamount to lack or in excess of jurisdiction and which error is correctible only by
the extraordinary writ of certiorari. Certiorari will not be issued to cure errors of the trial court in its
appreciation of the evidence of the parties, or its conclusions anchored on the said findings and its
conclusions of law.[19] It is not for this Court to re-examine conflicting evidence, re-evaluate the
credibility of the witnesses or substitute the findings of fact of the court a quo.[20]

Since the issues raised by the petitioner corporation in its Petition for Certiorari are mainly
factual, as it would necessitate an examination and re-evaluation of the evidence on which the RTC of
Quezon City and the appellate court based their Decisions, the Petition should not be given due
course. Thus, the remedy of certiorari will not lie to annul or reverse the Decision of the RTC of Quezon
City dated 28 June 2004, as affirmed by the Court of Appeals in its Decision and Resolution dated 29
November 2005 and 14 February 2006, respectively.

Settled is the rule that the proper remedy from an adverse decision of the Court of Appeals is an
appeal under Rule 45 and not a Petition for Certiorari under Rule 65.[21] Hence, petitioner corporation
could have raised the Court of Appeals Decision dated 29 November 2005 and Resolution dated 14
February 2006, affirming the assailed Decision dated 28 June 2004 of the RTC of Quezon City, to this
Court via an ordinary appeal under Rule 45 of the 1997 Revised Rules of Civil Procedure. It should be
emphasized that the extraordinary remedy of certiorari will not lie when there are other remedies
available to the petitioner.[22] Therefore, in availing itself of the extraordinary remedy of certiorari, the
petitioner corporation resorted to a wrong mode of appeal.
While it is true that this Court, in accordance with the liberal spirit which pervades the Rules of
Court and in the interest of justice, may treat a Petition for Certiorari as having been filed under Rule
45, more so if the same was filed within the reglementary period for filing a Petition for
Review,[23] however, in the present case, this Court finds no compelling reason to justify a liberal
application of the rules, as this Court did in the case of Delsan Transport Lines, Inc. v. Court of
Appeals.[24] In the said case, this Court treated the Petition for Certiorari filed by the petitioner therein
as having been filed under Rule 45, because said Petition was filed within the 15-day reglementary
period for filing a Petition for Review on Certiorari. Petitioners counsel therein received the Court of
Appeals Resolution denying their Motion for Reconsideration on 26 October 1993 and filed the Petition
for Certiorari on 8 November 1993, which was within the 15-day reglementary period for filing a Petition
for Review on Certiorari. It cannot therefore be claimed that the Petition was used as a substitute for
appeal after that remedy had been lost through the fault of the petitioner. [25] Conversely, such was not
the situation in the present case.

In the instant case, petitioner corporation received on 23 February 2006 the Resolution of the
appellate court dated 14 February 2006 denying its Motion for Reconsideration. Upon receipt of the
said Resolution, the petitioner corporation had 15-days or until 10 March 2006 within which to file an
appeal by way of Petition for Review under Rule 45. Instead of doing so, they inexplicably allowed the
15-day period to lapse, and then on 6 April 2006 or on the 42nd day from receipt of the Resolution
denying their Motion for Reconsideration, they filed this Petition for Certiorari under Rule 65 alleging
 38

grave abuse of discretion on the part of both the RTC of Quezon City and the appellate court. Hence,
this case cannot be treated as an appeal under Rule 45, primarily because it was filed way beyond the
15-day reglementary period within which to file the Petition for Review. Petitioner corporation will not
be allowed to use the remedy of certiorari as a substitute for the lapsed or lost remedy of appeal.[26]

Finally, even if this case will be treated as having been filed under Rule 45, still it will be
dismissed for utter lack of merit because this case does not fall under the recognized
exceptions[27] wherein this Court is authorized to resolve factual issues.

WHEREFORE, premises considered, the instant Petition is hereby DISMISSED. With costs
against petitioner.

DE JOYA V MARQUEZ

This is a petition for certiorari and prohibition that seeks the Court to nullify and set aside the warrant
of arrest issued by respondent judge against petitioner in Criminal Case No. 03-219952 for violation
of Article 315, par. 2(a) of the Revised Penal Code in relation to Presidential Decree (P.D.) No. 1689.
Petitioner asserts that respondent judge erred in finding the existence of probable cause that justifies
the issuance of a warrant of arrest against him and his co-accused.

Section 6, Rule 112 of the Revised Rules of Criminal Procedure provides:

Sec. 6. When warrant of arrest may issue. – (a) By the Regional Trial Court. – Within ten (10)
days from the filing of the complaint or information, the judge shall personally evaluate the resolution
of the prosecutor and its supporting evidence. He may immediately dismiss the case if the evidence
on record clearly fails to establish probable cause. If he finds probable cause, he shall issue a
warrant of arrest, or a commitment order if the accused has already been arrested pursuant to
a warrant issued by the judge who conducted the preliminary investigation or when the
complaint or information was filed pursuant to section 7 of this Rule. In case of doubt on the
existence of probable cause, the judge may order the prosecutor to present additional evidence within
five (5) days from notice and the issuance must be resolved by the court within thirty (30) days from
the filing of the complaint or information.

x x x1

This Court finds from the records of Criminal Case No. 03-219952 the following documents to support
the motion of the prosecution for the issuance of a warrant of arrest:

1. The report of the National Bureau of Investigation to Chief State Prosecutor Jovencito R.
Zuño as regards their investigation on the complaint filed by private complainant Manuel Dy
Awiten against Mina Tan Hao @ Ma. Gracia Tan Hao and Victor Ngo y Tan for syndicated
estafa. The report shows that Hao induced Dy to invest more than a hundred million pesos in
State Resources Development Management Corporation, but when the latter’s investments fell
due, the checks issued by Hao in favor of Dy as payment for his investments were dishonored
for being drawn against insufficient funds or that the account was closed. 2

2. Affidavit-Complaint of private complainant Manuel Dy Awiten.3

3. Copies of the checks issued by private complainant in favor of State Resources

Corporation.4

4. Copies of the checks issued to private complainant representing the supposed return of his
investments in State Resources.5

5. Demand letter sent by private complainant to Ma. Gracia Tan Hao. 6

 39

6. Supplemental Affidavit of private complainant to include the incorporators and members of

the board of directors of State Resources Development Management Corporation as
participants in the conspiracy to commit the crime of syndicated estafa. Among those included
was petitioner Chester De Joya.7

7. Counter-Affidavits of Chester De Joya and the other accused, Ma. Gracia Hao and Danny S.
Hao.

Also included in the records are the resolution issued by State Prosecutor Benny Nicdao finding
probable cause to indict petitioner and his other co-accused for syndicated estafa,8 and a copy of the
Articles of Incorporation of State Resources Development Management Corporation naming
petitioner as incorporator and director of said corporation.

This Court finds that these documents sufficiently establish the existence of probable cause as
required under Section 6, Rule 112 of the Revised Rules of Criminal Procedure. Probable cause to
issue a warrant of arrest pertains to facts and circumstances which would lead a reasonably discreet
and prudent person to believe that an offense has been committed by the person sought to be
arrested. It bears remembering that "in determining probable cause, the average man weighs facts
and circumstances without resorting to the calibrations of our technical rules of evidence of which his
knowledge is nil. Rather, he relies on the calculus of common sense of which all reasonable men
have an abundance."9 Thus, the standard used for the issuance of a warrant of arrest is less stringent
than that used for establishing the guilt of the accused. As long as the evidence presented shows
a prima facie case against the accused, the trial court judge has sufficient ground to issue a warrant
of arrest against him.

The foregoing documents found in the records and examined by respondent judge tend to show that
therein private complainant was enticed to invest a large sum of money in State Resources
Development Management Corporation; that he issued several checks amounting
to P114,286,086.14 in favor of the corporation; that the corporation, in turn, issued several checks to
private complainant, purportedly representing the return of his investments; that said checks were
later dishonored for insufficient funds and closed account; that petitioner and his co-accused, being
incorporators and directors of the corporation, had knowledge of its activities and transactions. These
are all that need to be shown to establish probable cause for the purpose of issuing a warrant of
arrest. It need not be shown that the accused are indeed guilty of the crime charged. That matter
should be left to the trial. It should be emphasized that before issuing warrants of arrest, judges
merely determine personally the probability, not the certainty, of guilt of an accused. Hence, judges
do not conduct a de novo hearing to determine the existence of probable cause. They just personally
review the initial determination of the prosecutor finding a probable cause to see if it is supported by
substantial evidence.10 In case of doubt on the existence of probable cause, the Rules allow the judge
to order the prosecutor to present additional evidence. In the present case, it is notable that the
resolution issued by State Prosecutor Benny Nicdao thoroughly explains the bases for his findings
that there is probable cause to charge all the accused with violation of Article 315, par. 2(a) of the
Revised Penal Code in relation to P.D. No. 1689.

The general rule is that this Court does not review the factual findings of the trial court, which include
the determination of probable cause for the issuance of warrant of arrest. It is only in exceptional
cases where this Court sets aside the conclusions of the prosecutor and the trial judge on the
existence of probable cause, that is, when it is necessary to prevent the misuse of the strong arm of
the law or to protect the orderly administration of justice. The facts obtaining in this case do not
warrant the application of the exception.lavvph!l.ne+

In addition, it may not be amiss to note that petitioner is not entitled to seek relief from this Court nor
from the trial court as he continuously refuses to surrender and submit to the court’s jurisdiction.
Justice Florenz D. Regalado explains the requisites for the exercise of jurisdiction and how the court
acquires such jurisdiction, thus:

x x x Requisites for the exercise of jurisdiction and how the court acquires such jurisdiction:

a. Jurisdiction over the plaintiff or petitioner: This is acquired by the filing of the complaint,
petition or initiatory pleading before the court by the plaintiff or petitioner.
 40

b. Jurisdiction over the defendant or respondent: This is acquired by the voluntary

appearance or submission by the defendant or respondent to the court or by coercive
process issued by the court to him, generally by the service of summons.

c. Jurisdiction over the subject matter: This is conferred by law and, unlike jurisdiction over the
parties, cannot be conferred on the court by the voluntary act or agreement of the parties.

d. Jurisdiction over the issues of the case: This is determined and conferred by the pleadings
filed in the case by the parties, or by their agreement in a pre-trial order or stipulation, or, at
times by their implied consent as by the failure of a party to object to evidence on an issue not
covered by the pleadings, as provided in Sec. 5, Rule 10.

e. Jurisdiction over the res (or the property or thing which is the subject of the litigation). This is
acquired by the actual or constructive seizure by the court of the thing in question, thus placing
it in custodia legis, as in attachment or garnishment; or by provision of law which recognizes in
the court the power to deal with the property or subject matter within its territorial jurisdiction,
as in land registration proceedings or suits involving civil status or real property in the
Philippines of a non-resident defendant.

Justice Regalado continues to explain:

In two cases, the court acquires jurisdiction to try the case, even if it has not acquired jurisdiction over
the person of a nonresident defendant, as long as it has jurisdiction over the res, as when the action
involves the personal status of the plaintiff or property in the Philippines in which the defendant claims
an interest. In such cases, the service of summons by publication and notice to the defendant is
merely to comply with due process requirements. Under Sec. 133 of the Corporation Code, while a
foreign corporation doing business in the Philippines without a license cannot sue or intervene in any
action here, it may be sued or proceeded against before our courts or administrative tribunals. 11

Again, there is no exceptional reason in this case to allow petitioner to obtain relief from the courts
without submitting to its jurisdiction. On the contrary, his continued refusal to submit to the court’s
jurisdiction should give this Court more reason to uphold the action of the respondent judge. The
purpose of a warrant of arrest is to place the accused under the custody of the law to hold him for trial
of the charges against him. His evasive stance shows an intent to circumvent and frustrate the object
of this legal process. It should be remembered that he who invokes the court’s jurisdiction must first
submit to its jurisdiction.

WHEREFORE, the petition is DISMISSED.

AL ANG NETWORK V MONDEJAR

On March 23, 2011, petitioner filed a complaint5 for sum of money under the Rule of Procedure for
Small Claims Cases6 before the MTCC, seeking to collect from respondent the amount of ₱23,111.71
which represented her unpaid water bills for the period June 1, 2002 to September 30, 2005. 7

Petitioner claimed that it was duly authorized to supply water to and collect payment therefor from the
homeowners of Regent Pearl Subdivision, one of whom is respondent who owns and occupies Lot 8,
Block 3 of said subdivision. From June 1, 2002 until September 30, 2005, respondent and her family
consumed a total of 1,150 cubic meters (cu. m.) of water, which upon application of the agreed rate of
₱113.00 for every 10 cu. m. of water, plus an additional charge of ₱11.60 for every additional cu. m.
of water, amounted to ₱28,580.09.8 However, respondent only paid the amount of ₱5,468.38, thus,
leaving a balance of ₱23,111.71 which was left unpaid despite petitioner’s repeated demands. 9

In defense, respondent contended that since April 1998 up to February 2003, she religiously paid
petitioner the agreed monthly flat rate of ₱75.00 for her water consumption. Notwithstanding their
agreement that the same would be adjusted only upon prior notice to the homeowners, petitioner
unilaterally charged her unreasonable and excessive adjustments (at the average of 40 cu. m. of
water per month or 1.3 cu. m. of water a day) far above the average daily water consumption for a
household of only 3 persons. She also questioned the propriety and/or basis of the aforesaid
₱23,111.71 claim.10
 41

In the interim, petitioner disconnected respondent’s water line for not paying the adjusted water
charges since March 2003 up to August 2005.11

The MTCC Ruling

On June 10, 2011, the MTCC rendered a Decision12 holding that since petitioner was issued a
Certificate of Public Convenience (CPC)13 by the National Water Resources Board (NWRB) only on
August 7, 2003, then, it can only charge respondent the agreed flat rate of ₱75.00 per month prior
thereto or the sum of ₱1,050.00 for the period June 1, 2002 to August 7, 2003. Thus, given that
respondent had made total payments equivalent to ₱1,685.99 for the same period, she should be
considered to have fully paid petitioner.14

The MTCC disregarded petitioner’s reliance on the Housing and Land Use Regulatory Board’s
(HLURB) Decision15dated August 17, 2000 in HLURB Case No. REM C6-00-001 entitled Nollie B.
Apura, et al. v. Dona Carmen I Subdivision, et al., as source of its authority to impose new water
consumption rates for water consumed from June 1, 2002 to August 7, 2003 in the absence of proof
(a) that petitioner complied with the directive to inform the HLURB of the result of its consultation with
the concerned homeowners as regards the rates to be charged, and (b) that the HLURB approved of
the same.16

Moreover, the MTCC noted that petitioner failed to submit evidence showing (a) the exact date when
it actually began imposing the NWRB approved rates; and (b) that the parties had a formal agreement
containing the terms and conditions thereof, without which it cannot establish with certainty
respondent’s obligation.17 Accordingly, it ruled that the earlier agreed rate of ₱75.00 per month should
still be the basis for respondent’s water consumption charges for the period August 8, 2003 to
September 30, 2005.18 Based on petitioner’s computation, respondent had only paid ₱300.00 of her
₱1,500.00 obligation for said period. Thus, it ordered respondent to pay petitioner the balance
thereof, equivalent to ₱1,200.00 with legal interest at the rate of 6% per annum from date of receipt of
the extrajudicial demand on October 14, 2010 until fully paid. 19

Aggrieved, petitioner filed a petition for certiorari20 under Rule 65 of the Rules of Court before the
RTC, ascribing grave abuse of discretion on the part of the MTCC in finding that it (petitioner) failed to
establish with certainty respondent’s obligation, and in not ordering the latter to pay the full amount
sought to be collected.

The RTC Ruling

On November 23, 2011, the RTC issued a Decision21 dismissing the petition for certiorari, finding that
the said petition was only filed to circumvent the non-appealable nature of small claims cases as
provided under Section 2322of the Rule of Procedure on Small Claims Cases. To this end, the RTC
ruled that it cannot supplant the decision of the MTCC with another decision directing respondent to
pay petitioner a bigger sum than that which has been awarded.

Petitioner moved for reconsideration23 but was denied in an Order24 dated February 16, 2012, hence,
the instant petition.

The Issue Before the Court

The sole issue in this case is whether or not the RTC erred in dismissing petitioner’s recourse under
Rule 65 of the Rules of Court assailing the propriety of the MTCC Decision in the subject small claims
case.

The Court’s Ruling

The petition is meritorious.

Section 23 of the Rule of Procedure for Small Claims Cases states that:

SEC. 23. Decision. — After the hearing, the court shall render its decision on the same day, based on
the facts established by the evidence (Form 13-SCC). The decision shall immediately be entered by
 42

the Clerk of Court in the court docket for civil cases and a copy thereof forthwith served on the
parties.

The decision shall be final and unappealable.

Considering the final nature of a small claims case decision under the above-stated rule, the remedy
of appeal is not allowed, and the prevailing party may, thus, immediately move for its
execution.25 Nevertheless, the proscription on appeals in small claims cases, similar to other
proceedings where appeal is not an available remedy,26 does not preclude the aggrieved party from
filing a petition for certiorari under Rule 65 of the Rules of Court. This general rule has been
enunciated in the case of Okada v. Security Pacific Assurance Corporation, 27 wherein it was held
that:

In a long line of cases, the Court has consistently ruled that "the extraordinary writ of certiorari is
always available where there is no appeal or any other plain, speedy and adequate remedy in the
ordinary course of law." In Jaca v. Davao Lumber Co., the Court ruled:

x x x Although Section 1, Rule 65 of the Rules of Court provides that the special civil action of
certiorari may only be invoked when "there is no appeal, nor any plain, speedy and adequate remedy
in the course of law," this rule is not without exception. The availability of the ordinary course of
appeal does not constitute sufficient ground to prevent a party from making use of the extraordinary
remedy of certiorari where appeal is not an adequate remedy or equally beneficial, speedy and
sufficient. It is the inadequacy – not the mere absence – of all other legal remedies and the danger of
failure of justice without the writ that usually determines the propriety of certiorari.

This ruling was reiterated in Conti v. Court of Appeals:

Truly, an essential requisite for the availability of the extraordinary remedies under the Rules is an
absence of an appeal nor any "plain, speedy and adequate remedy" in the ordinary course of law,
one which has been so defined as a "remedy which (would) equally (be) beneficial, speedy and
sufficient not merely a remedy which at some time in the future will bring about a revival of the
judgment x x x complained of in the certiorari proceeding, but a remedy which will promptly relieve the
petitioner from the injurious effects of that judgment and the acts of the inferior court or tribunal"
concerned. x x x (Emphasis supplied)

In this relation, it may not be amiss to placate the RTC’s apprehension that respondent’s recourse
before it (was only filed to circumvent the non-appealable nature of [small claims cases], because it
asks [the court] to supplant the decision of the lower [c]ourt with another decision directing the private
respondent to pay the petitioner a bigger sum than what has been awarded." 28 Verily, a petition for
certiorari, unlike an appeal, is an original action29 designed to correct only errors of jurisdiction and
not of judgment. Owing to its nature, it is therefore incumbent upon petitioner to establish that
jurisdictional errors tainted the MTCC Decision. The RTC, in turn, could either grant or dismiss the
petition based on an evaluation of whether or not the MTCC gravely abused its discretion by
capriciously, whimsically, or arbitrarily disregarding evidence that is material to the controversy.30

In view of the foregoing, the Court thus finds that petitioner correctly availed of the remedy of
certiorari to assail the propriety of the MTCC Decision in the subject small claims case, contrary to the
RTC’s ruling.

Likewise, the Court finds that petitioner filed the said petition before the proper forum (i.e., the
RTC).1âwphi1 To be sure, the Court, the Court of Appeals and the Regional Trial Courts have
concurrent jurisdiction to issue a writ of certiorari.31Such concurrence of jurisdiction, however, does
not give a party unbridled freedom to choose the venue of his action lest he ran afoul of the doctrine
of hierarchy of courts. Instead, a becoming regard for judicial hierarchy dictates that petitions for the
issuance of writs of certiorari against first level courts should be filed with the Regional Trial Court,
and those against the latter, with the Court of Appeals, before resort may be had before the
Court.32 This procedure is also in consonance with Section 4, Rule 65 of the Rules of Court. 33

Hence, considering that small claims cases are exclusively within the jurisdiction of the Metropolitan
Trial Courts, Municipal Trial Courts in Cities, Municipal Trial Courts, and Municipal Circuit Trial
 43

Courts,34 certiorari petitions assailing its dispositions should be filed before their corresponding
Regional Trial Courts. This petitioner complied with when it instituted its petition for certiorari before
the RTC which, as previously mentioned, has jurisdiction over the same. In fine, the RTC erred in
dismissing the said petition on the ground that it was an improper remedy, and, as such, RTC Case
No. 11-13833 must be reinstated and remanded thereto for its proper disposition.

WHEREFORE, the petition is GRANTED. The Decision dated November 23, 2011 and Resolution
dated February 16, 2012 of the Regional Trial Court of Bacolod City, Branch 45 are REVERSED and
SET ASIDE. RTC Case No. 11-13833 is hereby REINSTATED and the court a quo is ordered to
resolve the same with dispatch.

JOSE VS ALFUERTO

The dispute involves a parcel of land registered in the name of Rodolfo Chua Sing under Transfer
Certificate of Title No. 52594,3 with an area of 1919 square meters, located in Barangay San Dionisio,
Parañaque City. Chua Sing purchased the land in 1991. On April 1, 1999, Chua Sing leased the
property to the petitioner. Their contract of lease was neither notarized nor registered with the
Parañaque City Registry of Deeds.4

The lease contract provided that:

That the term of this lease shall be FIVE (5) years and renewable for the same period upon mutual
agreement of the parties to commence upon the total eviction of any occupant or occupants. The
LESSOR hereby transfers all its rights and prerogative to evict said occupants in favor of the LESSEE
which shall be responsible for all expenses that may be incurred without reimbursement from the
LESSOR. It is understood however that the LESSOR is hereby waiving, in favor of the LESSEE any
and all damages that may be recovered from the occupants. 5(Underscore ours)

Significantly, the respondents already occupied the property even before the lease contract was
executed.

On April 28, 1999, soon after Chua Sing and the petitioner signed the lease contract, the petitioner
demanded in writing that the respondents vacate the property within 30 days and that they pay a
monthly rental of P1,000.00 until they fully vacate the property.6

The respondents refused to vacate and to pay rent. On October 20, 1999, the petitioner filed an
ejectment case against the respondents before Branch 77 of the Parañaque City MeTC, docketed as
Civil Case No. 11344.7

In this complaint, no mention was made of any proceedings before the barangay. Jose then brought
the dispute before the barangay for conciliation.8 The barangay issued a Certification to File Action on
March 1, 2000.9 Jose was then able to file an amended complaint, incorporating the proceedings
before the barangay before the summons and copies of the complaint were served upon the named
defendants.10

In the Amended Complaint11 dated March 17, 2000, the petitioner claimed that as lessee of the
subject property, he had the right to eject the respondents who unlawfully occupy the land. He alleged
that:

7. Defendants, having been fully aware of their unlawful occupancy of the subject lot, have defiantly
erected their houses thereat without benefit of any contract or law whatsoever, much less any
building permit as sanctioned by law, but by mere tolerance of its true, lawful and registered owner,
plaintiff’s lessor.12

The petitioner also stated that despite his written demand, the respondents failed to vacate the
property without legal justification. He prayed that the court order the respondents; (1) to vacate the
premises; (2) to pay him not less than P41,000.00 a month from May 30,1999 until they vacate the
premises; and (3) to pay him attorney’s fees of no less than P50,000.00, and the costs of suit.13
 44

In their Answer, the respondents likewise pointed out that they have been in possession of the land
long before Chua Sing acquired the property in 1991, and that the lease contract between the
petitioner and Chua Sing does not affect their right to possess the land. The respondents also
presented a Deed of Assignment,14 dated February 13, 2000, issued by David R. Dulfo in their favor.
They argued that the MeTC had no jurisdiction over the case as the issue deals with ownership of the
land, and sought the dismissal of the complaint for lack of cause of action and for lack of jurisdiction.
They also filed a counterclaim for actual and moral damages for the filing of a baseless and malicious
suit.

After the required position papers, affidavits and other pieces of evidence were submitted, the MeTC
resolved the case in the petitioner’s favor. In its decision 15 of January 27, 2003, the MeTC held that
the respondents had no right to possess the land and that their occupation was merely by the owner’s
tolerance. It further noted that the respondents could no longer raise the issue of ownership, as this
issue had already been settled: the respondents previously filed a case for the
annulment/cancellation of Chua Sing’s title before the RTC, Branch 260, of Parañaque City, which
ruled that the registered owner’s title was genuine and valid. Moreover, the MeTC held that it is not
divested of jurisdiction over the case because of the respondents’ assertion of ownership of the
property. On these premises, the MeTC ordered the respondents to vacate the premises and to
remove all structures introduced on the land; to each pay P500.00 per month from the date of filing of
this case until they vacate the premises; and to pay Jose, jointly and severally, the costs of suit and
P20,000.00 as attorney’s fees.

On appeal before the RTC, the respondents raised the issue, among others, that no legal basis exists
for the petitioner’s claim that their occupation was by tolerance, "where the possession of the
defendants was illegal at the inception as alleged in the complaint, there can be no tolerance." 16

The RTC affirmed the MeTC decision of January 27, 2003. It issued its decision 17 on October 8, 2003,
reiterating the MeTC’s ruling that a case for ejectment was proper. The petitioner, as lessee, had the
right to file the ejectment complaint; the respondents occupied the land by mere tolerance and their
possession became unlawful upon the petitioner’s demand to vacate on April 28, 1999. The RTC,
moreover, noted that the complaint for ejectment was filed on October 20, 1999, or within one year
after the unlawful deprivation took place. It cited Pangilinan, et al. v. Hon. Aguilar, etc., et al. 18 and Yu
v. Lara, et al.19 to support its ruling that a case for unlawful detainer was appropriate.

On March 14, 2005, the Court of Appeals reversed the RTC and MeTC decisions.20 It ruled that the
respondents’ possession of the land was not by the petitioner or his lessor’s tolerance. It defined
tolerance not merely as the silence or inaction of a lawful possessor when another occupies his land;
tolerance entailed permission from the owner by reason of familiarity or neighborliness. The
petitioner, however, alleged that the respondents unlawfully entered the property; thus, tolerance (or
authorized entry into the property) was not alleged and there could be no case for unlawful detainer.
The respondents’ allegation that they had been in possession of the land before the petitioner’s lessor
had acquired it in 1991 supports this finding. Having been in possession of the land for more than a
year, the respondents should not be evicted through an ejectment case.

The Court of Appeals emphasized that ejectment cases are summary proceedings where the only
issue to be resolved is who has a better right to the physical possession of a property. The
petitioner’s claim, on the other hand, is based on an accion publiciana: he asserts his right as a
possessor by virtue of a contract of lease he contracted after the respondents had occupied the land.
The dispositive part of the decision reads:

WHEREFORE, the instant petition is GRANTED. The decision dated October 8, 2003 of the RTC,
Branch 257, Parañaque City, in Civil Case No. 03-0127, is REVERSED and SET ASIDE and the
amended complaint for ejectment is DISMISSED.21

The petitioner filed a motion for reconsideration,22 which the Court of Appeals denied in its
resolution23 of August 22, 2005. In the present appeal, the petitioner raises before us the following
issues:

I
 45

WHETHER OR NOT THE COURT OF APPEALS ERRED IN HOLDING THAT THE CAUSE OF
ACTION OF THE SUBJECT COMPLAINT IS NOT FOR UNLAWFUL DETAINER BUT FOR
RECOVERY OF POSSESSION AND THEREFORE DISMISSIBLE

II

WHETHER OR NOT THE COURT OF APPEALS ERRED IN DECIDING THE CASE BASED ON
RESPONDENTS’ MATERIAL CHANGE OF THEORY WHICH IS COMPLETELY INCONSISTENT
WITH THEIR DEFENSES INVOKED BEFORE THE MUNICIPAL TRIAL COURT

III

WHETHER OR NOT THIS HONORABLE COURT MAY DECIDE THIS CASE ON THE MERITS TO
AVOID CIRCUITOUS PROCEDURE IN THE ADMINISTRATION OF JUSTICE.24

The Court’s Ruling

We find the petition unmeritorious.

Unlawful detainer is not the proper

remedy for the present case.

The key issue in this case is whether an action for unlawful detainer is the proper remedy.

Unlawful detainer is a summary action for the recovery of possession of real property. This action
may be filed by a lessor, vendor, vendee, or other person against whom the possession of any land
or building is unlawfully withheld after the expiration or termination of the right to hold possession by
virtue of any contract, express or implied. In unlawful detainer, the possession of the defendant was
originally legal, as his possession was permitted by the plaintiff on account of an express or implied
contract between them. However, the defendant’s possession became illegal when the plaintiff
demanded that the defendant vacate the subject property due to the expiration or termination of the
right to possess under the contract, and the defendant refused to heed such demand. A case for
unlawful detainer must be instituted one year from the unlawful withholding of possession. 25

The allegations in the complaint determine both the nature of the action and the jurisdiction of the
court. The complaint must specifically allege the facts constituting unlawful detainer. In the absence
of these allegations of facts, an action for unlawful detainer is not the proper remedy and the
municipal trial court or the MeTC does not have jurisdiction over the case. 26

In his amended complaint, the petitioner presents the following allegations in support of his unlawful
detainer complaint:

3. On April 1, 1999, plaintiff leased from lessor, Mr. Rudy Chuasing, that parcel of lot owned and
registered in the lessor’s name, covering the area occupied by the defendants.

xxxx

6. Plaintiff’s lessor had acquired the subject property as early as 1991 through sale, thereafter the
aforesaid Transfer Certificate of Title was subsequently registered under his name.

7. Defendants, having been fully aware of their unlawful occupancy of the subject lot, have defiantly
erected their houses thereat without benefit of any contract or law whatsoever, much less any
building permit as sanctioned by law, but by mere tolerance of its true, lawful and registered owner,
plaintiff’s lessor.

8. By reason of defendants’ continued unlawful occupancy of the subject premises, plaintiff referred
the matter to his lawyer who immediately sent a formal demand upon each of the defendants to
vacate the premises. Copies of the demand letter dated 28 April 1999 are xxx hereto attached as
annexes "C" to "QQ."
 46

9. Despite notice, however, defendants failed and refused and continues to fail and refuse to vacate
the premises without valid or legal justification.27 (emphasis ours)

The petitioner’s allegations in the amended complaint run counter to the requirements for unlawful
detainer. In an unlawful detainer action, the possession of the defendant was originally legal and his
possession was permitted by the owner through an express or implied contract.

In this case, paragraph 7 makes it clear that the respondents’ occupancy was unlawful from the start
and was bereft of contractual or legal basis. In an unlawful detainer case, the defendant’s possession
becomes illegal only upon the plaintiff’s demand for the defendant to vacate the property and the
defendant’s subsequent refusal. In the present case, paragraph 8 characterizes the defendant’s
occupancy as unlawful even before the formal demand letters were written by the petitioner’s
counsel. Under these allegations, the unlawful withholding of possession should not be based on the
date the demand letters were sent, as the alleged unlawful act had taken place at an earlier
unspecified date.

The petitioner nevertheless insists that he properly alleged that the respondents occupied the
premises by mere tolerance of the owner. No allegation in the complaint nor any supporting evidence
on record, however, shows when the respondents entered the property or who had granted them
permission to enter. Without these allegations and evidence, the bare claim regarding "tolerance"
cannot be upheld.

In Sarona, et al. v. Villegas, et al.,28 the Court cited Prof. Arturo M. Tolentino’s definition and
characterizes "tolerance" in the following manner:

Professor Arturo M. Tolentino states that acts merely tolerated are "those which by reason of
neighborliness or familiarity, the owner of property allows his neighbor or another person to do on the
property; they are generally those particular services or benefits which one’s property can give to
another without material injury or prejudice to the owner, who permits them out of friendship or
courtesy." He adds that: "they are acts of little disturbances which a person, in the interest of
neighborliness or friendly relations, permits others to do on his property, such as passing over the
land, tying a horse therein, or getting some water from a well." And, Tolentino continues, even though
"this is continued for a long time, no right will be acquired by prescription." Further expounding on the
concept, Tolentino writes: "There is tacit consent of the possessor to the acts which are merely
tolerated. Thus, not every case of knowledge and silence on the part of the possessor can be
considered mere tolerance. By virtue of tolerance that is considered as an authorization, permission
or license, acts of possession are realized or performed. The question reduces itself to the existence
or non-existence of the permission. [citations omitted; italics supplied]

The Court has consistently adopted this position: tolerance or permission must have been present at
the beginning of possession; if the possession was unlawful from the start, an action for unlawful
detainer would not be the proper remedy and should be dismissed. 29

It is not the first time that this Court adjudged contradictory statements in a complaint for unlawful
detainer as a basis for dismissal. In Unida v. Heirs of Urban,30 the claim that the defendant’s
possession was merely tolerated was contradicted by the complainant’s allegation that the entry to
the subject property was unlawful from the very beginning. The Court then ruled that the unlawful
detainer action should fail.

The contradictory statements in the complaint are further deemed suspicious when a complaint is
silent regarding the factual circumstances surrounding the alleged tolerance. In Ten Forty Realty
Corporation v. Cruz,31 the complaint simply stated that: "(1) defendant immediately occupied the
subject property after its sale to her, an action merely tolerated by the plaintiff; and (2) the
respondent’s allegedly illegal occupation of the premises was by mere tolerance." The Court
expressed its qualms over these averments of fact as they did not contain anything substantiating the
claim that the plaintiff tolerated or permitted the occupation of the property by the defendant:

These allegations contradict, rather than support, plaintiff’s theory that its cause of action is for
unlawful detainer. First, these arguments advance the view that defendant’s occupation of the
property was unlawful at its inception. Second, they counter the essential requirement in unlawful
 47

detainer cases that plaintiff’s supposed act of sufferance or tolerance must be present right from the
start of a possession that is later sought to be recovered.

As the bare allegation of plaintiff’s tolerance of defendant’s occupation of the premises has not been
proven, the possession should be deemed illegal from the beginning. Thus, the CA correctly ruled
that the ejectment case should have been for forcible entry — an action that had already prescribed,
however, when the Complaint was filed on May 12, 1999. The prescriptive period of one year for
forcible entry cases is reckoned from the date of defendant’s actual entry into the land, which in this
case was on April 24, 1998.32

Similarly, in Go, Jr. v. Court of Appeals,33 the Court considered the owner’s lack of knowledge of the
defendant’s entry of the land to be inconsistent with the allegation that there had been tolerance.

In Padre v. Malabanan,34 the Court not only required allegations regarding the grant of permission,
but proof as well. It noted that the plaintiffs alleged the existence of tolerance, but ordered the
dismissal of the unlawful detainer case because the evidence was "totally wanting as to when and
under what circumstances xxx the alleged tolerance came about." It stated that:

Judging from the respondent’s Answer, the petitioners were never at all in physical possession of the
premises from the time he started occupying it and continuously up to the present. For sure, the
petitioners merely derived their alleged prior physical possession only on the basis of their Transfer
Certificate of Title (TCT), arguing that the issuance of said title presupposes their having been in
possession of the property at one time or another.35

Thus, the complainants in unlawful detainer cases cannot simply anchor their claims on the validity of
the owner’s title. Possession de facto must also be proved.

As early as the 1960s, in Sarona, et al. v. Villegas, et al., 36 we already ruled that a complaint which
fails to positively aver any overt act on the plaintiff’s part indicative of permission to occupy the land,
or any showing of such fact during the trial is fatal for a case for unlawful detainer. As the Court then
explained, a case for unlawful detainer alleging tolerance must definitely establish its existence from
the start of possession; otherwise, a case for forcible entry can mask itself as an action for unlawful
detainer and permit it to be filed beyond the required one-year prescription period from the time of
forcible entry:

A close assessment of the law and the concept of the word "tolerance" confirms our view heretofore
expressed that such tolerance must be present right from the start of possession sought to be
recovered, to categorize a cause of action as one of unlawful detainer — not of forcible entry. Indeed,
to hold otherwise would espouse a dangerous doctrine. And for two reasons: First. Forcible entry into
the land is an open challenge to the right of the possessor. Violation of that right authorizes the
speedy redress — in the inferior court — provided for in the rules. If one year from the forcible entry is
allowed to lapse before suit is filed, then the remedy ceases to be speedy; and the possessor is
deemed to have waived his right to seek relief in the inferior court. Second. If a forcible entry action in
the inferior court is allowed after the lapse of a number of years, then the result may well be that no
action of forcible entry can really prescribe. No matter how long such defendant is in physical
possession, plaintiff will merely make a demand, bring suit in the inferior court — upon plea of
tolerance to prevent prescription to set in — and summarily throw him out of the land. Such a
conclusion is unreasonable. Especially if we bear in mind the postulates that proceedings of forcible
entry and unlawful detainer are summary in nature, and that the one year time-bar to the suit is but in
pursuance of the summary nature of the action.37 (italics supplied)

Given these rulings, it would be equally dangerous for us to deprive the respondents of possession
over a property that they have held for at least eight years before the case was filed in 1999, by
means of a summary proceeding, simply because the petitioner used the word "tolerance" without
sufficient allegations or evidence to support it.

There was no change in the

respondents’ theory during
the appeal that would amount
 48

to a deprivation of the petitioner’s

right to due process.

The petitioner alleges that the respondents had never questioned before the MeTC the fact that their
occupancy was by tolerance. The only issues the respondents allegedly raised were: (1) the title to
the property is spurious; (2) the petitioner’s predecessor is not the true owner of the property in
question; (3) the petitioner’s lease contract was not legally enforceable; (4) the petitioner was not the
real party-in-interest; (5) the petitioner’s predecessor never had prior physical possession of the
property; and (6) the respondents’ right of possession was based on the "Deed of Assignment of Real
Property" executed by Dulfo. The respondents raised the issue of tolerance merely on appeal before
the RTC. They argue that this constitutes a change of theory, which is disallowed on appeal. 38

It is a settled rule that a party cannot change his theory of the case or his cause of action on appeal.
Points of law, theories, issues and arguments not brought to the attention of the lower court will not
be considered by the reviewing court. The defenses not pleaded in the answer cannot, on appeal,
change fundamentally the nature of the issue in the case. To do so would be unfair to the adverse
party, who had no opportunity to present evidence in connection with the new theory; this would
offend the basic rules of due process and fair play.39

While this Court has frowned upon changes of theory on appeal, this rule is not applicable to the
present case. The Court of Appeals dismissed the action due the petitioner’s failure to allege and
prove the essential requirements of an unlawful detainer case. In Serdoncillo v. Spouses
Benolirao,40 we held that:

In this regard, to give the court jurisdiction to effect the ejectment of an occupant or deforciant on the
land, it is necessary that the complaint must sufficiently show such a statement of facts as to bring the
party clearly within the class of cases for which the statutes provide a remedy, without resort to parol
testimony, as these proceedings are summary in nature. In short, the jurisdictional facts must appear
on the face of the complaint. When the complaint fails to aver facts constitutive of forcible entry or
unlawful detainer, as where it does not state how entry was effected or how and when dispossession
started, the remedy should either be an accion publiciana or accion reivindicatoria. (emphasis ours;
italics supplied)

Regardless of the defenses raised by the respondents, the petitioner was required to properly allege
and prove when the respondents entered the property and that it was the petitioner or his
predecessors, not any other persons, who granted the respondents permission to enter and occupy
the property. Furthermore, it was not the respondents’ defense that proved fatal to the case but the
petitioner’s contradictory statements in his amended complaint which he even reiterated in his other
pleadings.41

Although the respondents did not use the word "tolerance" before the MeTC, they have always
questioned the existence of the petitioner’s tolerance. In their Answer to Amended Complaint, the
respondents negated the possibility of their possession of the property under the petitioner and his
lessor’s tolerance when the respondents alleged to have occupied the premises even before the
lessor acquired the property in 1991. They said as much in their Position Paper:

RODOLFO CHUA SING never had actual physical possession of his supposed property, as when he
became an owner of the 1,919 square meters property described in TCT No. 52594, the property had
already been occupied by herein DEFENDANTS since late 1970. Therefore, DEFENDANTS were
already occupants/possessors of the property from where they are being ejected by FIORELLO
JOSE, a supposed LESSEE of a property with a dubious title. The main thing to be proven in the
case at bar is prior possession and that the same was lost through force, intimidation, threat, strategy
and stealth, so that it behooves the court to restore possession regardless of title or even ownership
xxx. In the case at bar, neither RODOLFO CHUA SING nor herein PLAINTIFF ever had any actual
physical possession of the property where DEFENDANTS have already possessed for more than ten
(10) years in 1991 when RODOLFO CHUA SING got his fake title to the property. 42 (citation omitted)

In addition, whether or not it was credible, the respondent’s claim that their possession was based on
the Deed of Assignment executed by Dulfo, in behalf of the estate of Domingo de Ocampo, shows
 49

that they considered the petitioner and his lessor as strangers to any of their transactions on the
property, and could not have stayed there upon the latter’s permission.

We note that even after the issue of tolerance had been directly raised by the respondents before the
RTC, the petitioner still failed to address it before the RTC, the Court of Appeals, and the Supreme
Court.43 At best, he belatedly states for the first time in his Memorandum 44 before this Court that his
lessor had tolerated the respondents’ occupancy of the lot, without addressing the respondents’
allegation that they had occupied the lot in 1970, before the petitioner’s lessor became the owner of
the property in 1991, and without providing any other details. His pleadings continued to insist on the
existence of tolerance without providing the factual basis for this conclusion. Thus, we cannot declare
that the Court of Appeals had in anyway deprived the petitioner of due process or had unfairly treated
him when it resolved the case based on the issue of tolerance.

The Court cannot treat an ejectment

case as an accion publiciana or
accion reivindicatoria.

The petitioner argues that assuming this case should have been filed as an accion publiciana or
accion reivindicatoria, this Court should still resolve the case, as requiring him to properly refile the
case serves no other ends than to comply with technicalities.45

The Court cannot simply take the evidence presented before the MeTC in an ejectment case and
decide it as an accion publiciana or accion reivindicatoria. These cases are not interchangeable and
their differences constitute far more than mere technicalities.

In Regis, Jr. v. Court of Appeals,46 we ruled that an action for forcible entry cannot be treated as an
accion publiciana and summarized the reasons therefor. We find these same reasons also applicable
to an unlawful detainer case which bears the same relevant characteristics:

On the issue of whether or not an action for forcible entry can be treated as accion publiciana, we rule
in the negative. Forcible entry is distinct from accion publiciana. First, forcible entry should be filed
within one year from the unlawful dispossession of the real property, while accion publiciana is filed a
year after the unlawful dispossession of the real property. Second, forcible entry is concerned with the
issue of the right to the physical possession of the real property; in accion publiciana, what is subject
of litigation is the better right to possession over the real property. Third, an action for forcible entry is
filed in the municipal trial court and is a summary action, while accion publiciana is a plenary action in
the RTC. [italics supplied]

The cause of action in ejectment is different from that in an accion publiciana or accion reivindicatoria.
An ejectment suit is brought before the proper inferior court to recover physical possession only or
possession de facto, not possession de jure. Unlawful detainer and forcible entry cases are not
processes to determine actual title to property. Any ruling by the MeTC on the issue of ownership is
made only to resolve the issue of possession, and is therefore inconclusive. 47 Because they only
resolve issues of possession de facto, ejectment actions are summary in nature, while accion
publiciana (for the recovery of possession) and accion reivindicatoria (for the recovery of ownership)
are plenary actions.48 The purpose of allowing actions for forcible entry and unlawful detainer to be
decided in summary proceedings is to provide for a peaceful, speedy and expeditious means of
preventing an alleged illegal possessor of property from unjustly taking and continuing his possession
during the long period it would take to properly resolve the issue of possession de jure or ownership,
thereby ensuring the maintenance of peace and order in the community; otherwise, the party illegally
deprived of possession might take the law in his hands and seize the property by force and
violence.49 An ejectment case cannot be a substitute for a full-blown trial for the purpose of
determining rights of possession or ownership. Citing Mediran v. Villanueva, 50 the Court in Gonzaga
v. Court of Appeals51 describes in detail how these two remedies should be used:

In giving recognition to the action of forcible entry and detainer the purpose of the law is to protect the
person who in fact has actual possession; and in case of controverted right, it requires the parties to
preserve the status quo until one or the other of them sees fit to invoke the decision of a court of
competent jurisdiction upon the question of ownership. It is obviously just that the person who has
first acquired possession should remain in possession pending the decision; and the parties cannot
 50

be permitted meanwhile to engage in a petty warfare over the possession of the property which is the
subject of dispute. To permit this would be highly dangerous to individual security and disturbing to
social order.1âwphi1 Therefore, where a person supposes himself to be the owner of a piece of
property and desires to vindicate his ownership against the party actually in possession, it is
incumbent upon him to institute an action to this end in a court of competent jurisdiction; and he
cannot be permitted, by invading the property and excluding the actual possessor, to place upon the
latter the burden of instituting an action to try the property right. [italics supplied]

Thus, if we allow parties to file ejectment cases and later consider them as an accion publiciana or
accion reivindicatoria, we would encourage parties to simply file ejectment cases instead of plenary
actions. Courts would then decide in summary proceedings cases which the rules intend to be
resolved through full-blown trials. Because these "summary" proceedings will have to tackle
complicated issues requiring extensive proof, they would no longer be expeditious and would no
longer serve the purpose for which they were created. Indeed, we cannot see how the resulting
congestion of cases, the hastily and incorrectly decided cases, and the utter lack of system would
assist the courts in protecting and preserving property rights.

MIGUEL VS MONATEX
On February 1, 2001, respondent Jerry Montanez (Montanez) secured a loan of One Hundred Forty-
Three Thousand Eight Hundred Sixty-Four Pesos (P143,864.00), payable in one (1) year, or until
February 1, 2002, from the petitioner. The respondent gave as collateral therefor his house and lot
located at Block 39 Lot 39 Phase 3, Palmera Spring, Bagumbong, Caloocan City.

Due to the respondents failure to pay the loan, the petitioner filed a complaint against the
respondent before the Lupong Tagapamayapa of Barangay San Jose, Rodriguez, Rizal. The parties
entered into a Kasunduang Pag-aayos wherein the respondent agreed to pay his loan in installments
in the amount of Two Thousand Pesos (P2,000.00) per month, and in the event the house and lot given
as collateral is sold, the respondent would settle the balance of the loan in full. However, the respondent
still failed to pay, and on December 13, 2004, the Lupong Tagapamayapa issued a certification to file
action in court in favor of the petitioner.

On April 7, 2005, the petitioner filed before the Metropolitan Trial Court (MeTC) of Makati City,
Branch 66, a complaint for Collection of Sum of Money. In his Answer with Counterclaim, [3] the
respondent raised the defense of improper venue considering that the petitioner was a resident of
Bagumbong, Caloocan Citywhile he lived in San Mateo, Rizal.

After trial, on August 16, 2006, the MeTC rendered a Decision,[4] which disposes as follows:

WHEREFORE, premises considered[,] judgment is hereby rendered ordering

defendant Jerry D. Montanez to pay plaintiff the following:

1. The amount of [Php147,893.00] representing the obligation with legal

rate of interest from February 1, 2002 which was the date of the loan
maturity until the account is fully paid;

2. The amount of Php10,000.00 as and by way of attorneys fees; and the

costs.

SO ORDERED. [5]
 51

On appeal to the Regional Trial Court (RTC) of Makati City, Branch 146, the respondent raised
the same issues cited in his Answer. In its March 14, 2007 Decision, [6] the RTC affirmed the MeTC
Decision, disposing as follows:

WHEREFORE, finding no cogent reason to disturb the findings of the court a quo,
the appeal is hereby DISMISSED, and the DECISION appealed from is hereby
AFFIRMED in its entirety for being in accordance with law and evidence.

SO ORDERED.[7]

Dissatisfied, the respondent appealed to the CA raising two issues, namely, (1) whether or not
venue was improperly laid, and (2) whether or not the Kasunduang Pag-aayos effectively novated the
loan agreement. On September 17, 2009, the CA rendered the assailed Decision, disposing as follows:

WHEREFORE, premises considered, the petition is hereby GRANTED. The

appealed Decision dated March 14, 2007 of the Regional Trial Court (RTC) of Makati City,
Branch 146, is REVERSED and SET ASIDE. A new judgment is entered dismissing
respondents complaint for collection of sum of money, without prejudice to her right to file
the necessary action to enforce the Kasunduang Pag-aayos.

SO ORDERED.[8]

Anent the issue of whether or not there is novation of the loan

contract, the CA ruled in the negative. It ratiocinated as follows:

Judging from the terms of the Kasunduang Pag-aayos, it is clear that no novation
of the old obligation has taken place. Contrary to petitioners assertion, there was no
reduction of the term or period originally stipulated. The original period in the first
agreement is one (1) year to be counted from February 1, 2001, or until January 31, 2002.
When the complaint was filed before the barangay on February 2003, the period of the
original agreement had long expired without compliance on the part of petitioner. Hence,
there was nothing to reduce or extend. There was only a change in the terms of payment
which is not incompatible with the old agreement. In other words, the Kasunduang Pag-
aayosmerely supplemented the old agreement.[9]

The CA went on saying that since the parties entered into a Kasunduang Pag-aayos before
the Lupon ng Barangay, such settlement has the force and effect of a court judgment, which may be
enforced by execution within six (6) months from the date of settlement by the Lupon ng Barangay, or
by court action after the lapse of such time.[10] Considering that more than six (6) months had elapsed
from the date of settlement, the CA ruled that the remedy of the petitioner was to file an action for the
execution of the Kasunduang Pag-aayos in court and not for collection of sum of
money.[11] Consequently, the CA deemed it unnecessary to resolve the issue on venue. [12]

The petitioner now comes to this Court.

Issues

(1) Whether or not a complaint for sum of money is the proper remedy for the petitioner,
notwithstanding the Kasunduang Pag-aayos;[13] and
 52

(2) Whether or not the CA should have decided the case on the merits
rather than remand the case for the enforcement of the Kasunduang Pag-aayos.[14]

Our Ruling

Because the respondent failed to comply with the terms

of the Kasunduang Pag-aayos, said agreement is deemed
rescinded pursuant to Article 2041 of the New Civil Code
and the petitioner can insist on his original demand.
Perforce, the complaint for collection of sum of money is
the proper remedy.

The petitioner contends that the CA erred in ruling that she should have followed the procedure
for enforcement of the amicable settlement as provided in the Revised Katarungang Pambarangay
Law, instead of filing a collection case. The petitioner points out that the cause of action did not arise
from the Kasunduang Pag-aayos but on the respondents breach of the original loan agreement. [15]

This Court agrees with the petitioner.

It is true that an amicable settlement reached at the barangay conciliation proceedings, like
the Kasunduang Pag-aayos in this case, is binding between the contracting parties and, upon its
perfection, is immediately executory insofar as it is not contrary to law, good morals, good
customs, public order and public policy.[16] This is in accord with the broad precept of Article 2037 of
the Civil Code, viz:

A compromise has upon the parties the effect and authority of res judicata; but
there shall be no execution except in compliance with a judicial compromise.

Being a by-product of mutual concessions and good faith of the parties, an amicable settlement
has the force and effect of res judicata even if not judicially approved.[17] It transcends being a mere
contract binding only upon the parties thereto, and is akin to a judgment that is subject to execution in
accordance with the Rules.[18] Thus, under Section 417 of the Local Government Code,[19] such
amicable settlement or arbitration award may be enforced by execution by the Barangay Lupon within
six (6) months from the date of settlement, or by filing an action to enforce such settlement in the
appropriate city or municipal court, if beyond the six-month period.

Under the first remedy, the proceedings are covered by the Local Government Code and
the Katarungang Pambarangay Implementing Rules and Regulations. The Punong Barangay is called
upon during the hearing to determine solely the fact of non-compliance of the terms of the settlement
and to give the defaulting party another chance at voluntarily complying with his obligation under the
settlement. Under the second remedy, the proceedings are governed by the Rules of Court, as
amended. The cause of action is the amicable settlement itself, which, by operation of law, has the force
and effect of a final judgment.[20]

It must be emphasized, however, that enforcement by execution of the amicable settlement,

either under the first or the second remedy, is only applicable if the contracting parties have not
 53

repudiated such settlement within ten (10) days from the date thereof in accordance with Section 416
of the Local Government Code. If the amicable settlement is repudiated by one party, either expressly
or impliedly, the other party has two options, namely, to enforce the compromise in accordance with the
Local Government Code or Rules of Court as the case may be, or to consider it rescinded and insist
upon his original demand. This is in accord with Article 2041 of the Civil Code, which qualifies the broad
application of Article 2037, viz:

If one of the parties fails or refuses to abide by the compromise, the other party
may either enforce the compromise or regard it as rescinded and insist upon his original
demand.

In the case of Leonor v. Sycip,[21] the Supreme Court (SC) had the occasion to explain this
provision of law. It ruled that Article 2041 does not require an action for rescission, and the aggrieved
party, by the breach of compromise agreement, may just consider it already rescinded, to wit:

It is worthy of notice, in this connection, that, unlike Article 2039 of the same Code,
which speaks of "a cause of annulment or rescission of the compromise" and provides
that "the compromise may be annulled or rescinded" for the cause therein specified, thus
suggesting an action for annulment or rescission, said Article 2041 confers upon the party
concerned, not a "cause" for rescission, or the right to "demand" the rescission of a
compromise, but the authority, not only to "regard it as
rescinded", but, also, to "insist upon his original demand". The language of this Article
2041, particularly when contrasted with that of Article 2039, denotes that no action
for rescission is required in said Article 2041, and that the party aggrieved by the
breach of a compromise agreement may, if he chooses, bring the suit contemplated
or involved in his original demand, as if there had never been any compromise
agreement, without bringing an action for rescission thereof. He need not seek a
judicial declaration of rescission, for he may "regard" the compromise agreement
already "rescinded".[22] (emphasis supplied)

As so well stated in the case of Chavez v. Court of Appeals,[23] a party's non-compliance with
the amicable settlement paved the way for the application of Article 2041 under which the other party
may either enforce the compromise, following the procedure laid out in the Revised Katarungang
Pambarangay Law, or consider it as rescinded and insist upon his original demand. To quote:

In the case at bar, the Revised Katarungang Pambarangay Law provides for a two-
tiered mode of enforcement of an amicable settlement, to wit: (a) by execution by
the Punong Barangay which is quasi-judicial and summary in nature on mere motion of
the party entitled thereto; and (b) an action in regular form, which remedy is judicial.
However, the mode of enforcement does not rule out the right of rescission under Art.
2041 of the Civil Code. The availability of the right of rescission is apparent from the
wording of Sec. 417 itself which provides that the amicable settlement "may" be enforced
by execution by the lupon within six (6) months from its date or by action in the appropriate
city or municipal court, if beyond that period. The use of the word "may" clearly makes
the procedure provided in the Revised Katarungang Pambarangay Lawdirectory or
merely optional in nature.

Thus, although the "Kasunduan" executed by petitioner and respondent

before the Office of the Barangay Captain had the force and effect of a final
judgment of a court, petitioner's non-compliance paved the way for the application
of Art. 2041 under which respondent may either enforce the compromise, following
the procedure laid out in the Revised Katarungang Pambarangay Law, or regard it
as rescinded and insist upon his original demand. Respondent chose the latter
option when he instituted Civil Case No. 5139-V-97 for recovery of unrealized profits
 54

and reimbursement of advance rentals, moral and exemplary damages, and

attorney's fees. Respondent was not limited to claiming P150,000.00 because although
he agreed to the amount in the "Kasunduan," it is axiomatic that a compromise settlement
is not an admission of liability but merely a recognition that there is a dispute and an
impending litigation which the parties hope to prevent by making reciprocal concessions,
adjusting their respective positions in the hope of gaining balanced by the danger of
losing. Under the "Kasunduan," respondent was only required to execute a waiver of all
possible claims arising from the lease contract if petitioner fully complies with his
obligations thereunder. It is undisputed that herein petitioner did not. [24] (emphasis
supplied and citations omitted)

In the instant case, the respondent did not comply with the terms and conditions of
the Kasunduang Pag-aayos. Such non-compliance may be construed as repudiation because it
denotes that the respondent did not intend to be bound by the terms thereof, thereby negating the very
purpose for which it was executed. Perforce, the petitioner has the option either to enforce
the Kasunduang Pag-aayos, or to regard it as rescinded and insist upon his original demand, in
accordance with the provision of Article 2041 of the Civil Code. Having instituted an action for collection
of sum of money, the petitioner obviously chose to rescind the Kasunduang Pag-aayos. As such, it is
error on the part of the CA to rule that enforcement by execution of said agreement is the appropriate
remedy under the circumstances.

Considering that the Kasunduang Pag-aayos is deemed

rescinded by the non-compliance of the respondent of
the terms thereof, remanding the case to the trial court
for the enforcement of said agreement is clearly
unwarranted.

The petitioner avers that the CA erred in remanding the case to the
trial court for the enforcement of the Kasunduang Pag-aayos as it prolonged the process, thereby
putting off the case in an indefinite pendency.[25] Thus, the petitioner insists that she should be allowed
to ventilate her rights before this Court and not to repeat the same proceedings just to comply with the
enforcement of the Kasunduang Pag-aayos, in order to finally enforce her right to payment.[26]

The CA took off on the wrong premise that enforcement of the Kasunduang Pag-aayos is the
proper remedy, and therefore erred in its conclusion that the case should be remanded to the trial court.
The fact that the petitioner opted to rescind the Kasunduang Pag-aayos means that she is insisting
upon the undertaking of the respondent under the original loan contract. Thus, the CA should have
decided the case on the merits, as an appeal before it, and not prolong the determination of the issues
by remanding it to the trial court. Pertinently, evidence abounds that the respondent has failed to comply
with his loan obligation. In fact, the Kasunduang Pag-aayos is the well nigh incontrovertible proof of the
respondents indebtedness with the petitioner as it was executed precisely to give the respondent a
second chance to make good on his undertaking. And since the respondent still reneged in paying his
indebtedness, justice demands that he must be held answerable therefor.

WHEREFORE, the petition is GRANTED. The assailed decision of the Court of Appeals is SET
ASIDE and the Decision of the Regional Trial Court, Branch 146, Makati City, dated March 14, 2007
is REINSTATED.
SANCHEZ VS TUPAZ
 55

Herein petitioner and private respondent are both occupants of a public agricultural land Identified as
Lot 595, Cad-102 located at Budbud, Tibungco, Davao City. Petitioner claims that the area of 450
square meters, more or less, has been in her possession since 1947, long before private respondent
came in and occupied another portion of Lot 595. On the other hand, private respondent claims that
the area being claimed by petitioner is a part of his three-fourth (3/4) of a hectare parcel, the right to
which he acquired from its former possessor and owner of the improvements thereon. Sometime in
1966, out of charity and upon their agreement that petitioner will vacate the premises upon demand,
he granted petitioner's request to build her house inside the land occupied by him.

On September 18,1980, private respondent filed with the City Court of Davao an ejectment case
against petitioner. The case was docketed therein as Civil Case No.1710-D.

On March 26,1982, the City Court of Davao rendered a "Judgment by Compromise."

On January 25, 1985, petitioner filed with the Regional Trial Court of Davao a petition to annul the
aforesaid judgment of the City Court of Davao (Rollo, pp. 8-10). Said petition was docketed therein as
Civil Case No. 17383. In the same, petitioner alleged, among others, that she is an illiterate, that
sometime before March 26, 1982, her lawyer, Atty. Jose M. Madrazo came to her residence at
Budbud, Bunawan, Davao City, bringing a certain document which she signed by her thumbmark
after being told that she cannot be ejected anymore during her lifetime; that thereafter, her lawyer
came back to her residence and furnished her a copy of the said decision of the City Court of Davao;
that it is only on March 30, 1984 when she learned for the first time that what she had signed with her
thumbmark was a compromise agreement, wherein she recognized private respondent's prior
occupancy of the land in question, when she received an Order of Guillermo C. Ferraris, OIC
Regional Director of Lands, dropping her petition, together with the petitions of three others, based,
allegedly, on their withdrawal, of their claims over the disputed land; that she had never intended to
recognize the private respondent as having prior possession and occupancy of the land, the truth of
the matter being that she had been in possession of the area of 450 square meters, more or less,
since 1947, long before private respondent came in and occupied another portion of Lot 595; that in
sheer bad faith, private respondent caused the survey of the entire Lot No. 595 sometime in 1980,
which survey became null and void after the same was formally opposed by Eufemio Escovilla,
brother of private respondent, before Atty. Uldarico G. Aquino, then District Officer, Bureau of Lands,
Davao City; that on January 21, 1982, petitioner and the other occupants Eufemio Escovilla, Damaso
Escovilla and Emiliana Monleon, requested the Land District Officer to authorize Geodetic Engineer
Timoteo D. Cajipe of the same Office to execute a segregation survey; that the request was granted
and the District Land Officer, Atty. Bienvenido Sambrano, directed Engr. Timoteo D. Cajipe to survey
the land; that Engr. Cajipe was not able to conduct the segregation survey because private
respondent threatened bodily harm on and even death to the survey team, especially against the
petitioner and the other actual occupants; and that pursuant to the 1st Indorsement of the District
Land Officer dated January 21, 1982, Land Investigator Manuel Flores conducted an investigation of
the disputed area. (Rollo, pp. 8-10)

Private respondent, in a Motion to Dismiss dated May 7,1986 (Ibid., pp. 14-16), moved for the
dismissal of the complaint on the grounds that (1) the records of the case do not show that the same
has been referred to the barangay court for confrontation, conciliation or settlement of the parties
concerned as required under the provisions of Section 6 of PD 1508, and as ruled by the Supreme
Court in Spouses Maria Luisa P. Morata, et al. vs. Spouses Victor Go, et al., G.R. L-62339, October
27, 1983, 125 SCRA 444; and (2) the complaint does not state a cause of action.

On May 12, 1986, petitioner filed an Opposition to the Motion to Dismiss (Ibid., pp. 17-21) on the
grounds that (1) the motion to dismiss was filed beyond the period prescribed by the Rules of Court;
and (2) the petition states a cause of action.

On the same date, May 12,1986, private respondent filed his Answer (Ibid., pp, 22-24) and his Reply
to Opposition to Motion to Dismiss, Opposition to Prayer therein to Declare Defendant in Default, and
Manifestation, dated May 12, 1986 (Ibid., pp. 2526).

On May 26,1986, petitioner filed a Supplemental Opposition to Motion to Dismiss (Ibid., pp. 27-36).
 56

Respondent Judge in an order dated May 16, 1986 (Ibid., p. 37), granted the prayer of counsel for
private respondent to be allowed one (1) week to file a memorandum in support of his stand, which
was to be commented upon within like period by petitioner's counsel; after which, all the pending
incidents are to be deemed submitted for the resolution of the Court.

On May 29,1986, private respondent submitted his Memorandum (Ibid., pp. 29-36).

In an Order dated October 10, 1986 (Ibid., pp. 38-39), respondent Judge sustained private
respondent's Motion to Dismiss by dismissing the case for lack of cause of action or prematurity for
not having passed the Barangay Court.

Hence, the instant petition (Ibid., pp. 3-7).

The Second Division of this Court, in a Resolution dated January 7,1987 (Ibid., p. 41), required
respondent to comment. In compliance therewith, private respondent filed his Comment (Ibid., pp. 83-
91) on February 18,1987.

In the Resolution of March 9, 1987 (Ibid., pp. 93), petitioner was required to reply. The same was filed
(Ibid., pp. 94-96) on April 23,1987.

In the Resolution of June 3, 1987 (Ibid., p. 98), the petition was given due course and the parties
were required to submit their respective memoranda.

On July 23, 1977, private respondent filed a Manifestation (Ibid., p. 106) submitting his Comment of
February 5,1987 to the petition as his memorandum.

On August 25,1987, petitioner filed her Memorandum (Ibid., pp. 109-115).

Petitioner raised two (2) issues, to wit:

1. WHETHER OR NOT THE JUDGMENT BY COMPROMISE IS NULL AND VOID; AND

2. WHETHER OR NOT THE REGIONAL TRIAL COURT GRAVELY ERRED IN DISMISSING THE
PETITION FOR ANNULMENT OF JUDGMENT.

Petitioner contends that respondent Judge erred in dismissing petitioner's action for annulment of
judgment simply because said action did not pass the Barangay Court.

This contention is impressed with merit.

Presidential Decree No. 1508 requires that the parties who actually reside in the same city or
municipality should bring their controversy first to the Barangay Court for possible amicable
settlement before filing a complaint in court. This requirement is compulsory (as ruled in the cited
case of Morato vs. Go, 125 SCRA 444), [1983] and non-compliance of the same could affect the
sufficiency of the cause of action and make the complaint vulnerable to dismissal on the ground of
lack of cause of action or prematurity (Peregrina vs. Panis, 133 SCRA 75). [1984] It must be borne in
mind that the purpose of the conciliation process at the barangay level is to discourage indiscriminate
filing of cases in court in order to decongest the clogged dockets and in the process enhance the
quality of justice dispensed by courts (Morato, vs. Go, supra).

In the instant case, it will be noted that the ejectment case in the City Court of Davao, Civil Case No.
17-10-D, was filed on September 18, 1980, when Presidential Decree No. 1508 was already
enforced. However, the records do not show that there was an opposition to the filing of the said
ejectment case on the ground that the dispute had not been submitted to the Barangay Court for
possible amicable settlement under P.D. 1508. The only logical conclusion therefore is that either
such requirement had already been complied with or had been waived. Under either circumstance,
there appears to be no reason, much less a requirement that this case be subjected to the provisions
of P.D. 1508. In fact, the present controversy is an action for annulment of a compromise judgment
which as a general rule is immediately executory (De Guzman vs. Court of Appeals, 137 SCRA
730,[1985]), and accordingly, beyond the authority of the Barangay Court to change or modify.
 57

Normally, the instant case should be remanded to the lower court for further proceedings.
Nevertheless, a close examination of the records shows that such time-consuming procedure may be
dispensed with in resolving the issue at hand. Thus, this Court, in the case of Velasco, et al. vs.
Gayapa (G.R. No. 58651, promulgated on July 30,1987), ruled:

Since the main case is manifestly without merit, the order of the lower court dismissing
the appeal cannot be impugned. As held in Castro vs. Court of appeals (supra), "a
remand for further proceedings therefore, would only result in needless delays — a few
more yearn perhaps of a tortuous journey; through new proceedings in the trial court,
the intermediate appeal and another resort to this Court through a petition for review to
finally achieve the same result."

Petitioner's action for annulment of judgment is based on the ground of extrinsic fraud allegedly
committed by her own lawyer by telling her "that she cannot be elected any more during her lifetime"
from the land in dispute, but did not disclose to her that at the same time she would have to recognize
the prior possession of private respondent.

While there can be no question as to the right of any person adversely affected by a judgment to
maintain an action and to have the decision declared a nullity, such an action to annul a judgment
upon the ground of fraud, will not lie unless the fraud be extrinsic or collateral and committed by the
adverse party, not by one's own counsel. Said ruling was reiterated in a subsequent case where it
was stressed that the fraud mentioned in Rule 38 is the fraud committed by the adverse party (Velayo
vs. Shell Company of the Philippines, Ltd., et al., 105 Phil. 1114, [1959]).

In the instant case, petitioner, in her action for annulment of judgment, never made any allegation that
private respondent had anything to do with such actuation other lawyer. Such being the case, the
most that she has is an action against her own lawyer and not against the private respondent.

Moreover, miscalculation or misappreciation of the legal import of the compromise agreement, where
the party is assisted by counsel, win not provide basis for setting aside agreement on the ground of
mistake or error. A compromise, entered into and carried out in good faith, will not be discarded even
if there was a mistake of law or fact. (Periquet vs. Reyes, 21 SCRA 1503, [1967]).

PREMISES CONSIDERED, the instant petition is DISMISSED, without prejudice to petitioner's action
against her own lawyer.

FLORES VS MALLARE-PHILIPS

The Court rules that the application of the totality rule under Section 33(l) of Batas Pambansa Blg.
129 and Section 11 of the Interim Rules is subject to the requirements for the permissive joinder of
parties under Section 6 of Rule 3 which provides as follows:

Permissive joinder of parties.-All persons in whom or against whom any right to relief in
respect to or arising out of the same transaction or series of transactions is alleged to
exist, whether jointly, severally, or in the alternative, may, except as otherwise provided
in these rules, join as plaintiffs or be joined as defendants in one complaint, where any
question of law or fact common to all such plaintiffs or to all such defendants may arise
in the action; but the court may make such orders as may be just to prevent any plaintiff
or defendant from being embarrassed or put to expense in connection with any
proceedings in which he may have no interest.

Petitioner has appealed by certiorari from the order of Judge Heilia S. Mallare-Phillipps of the
Regional Trial Court of Baguio City and Benguet Province which dismissed his complaint for lack of
jurisdiction. Petitioner did not attach to his petition a copy of his complaint in the erroneous belief that
the entire original record of the case shall be transmitted to this Court pursuant to the second
paragraph of Section 39 of BP129. This provision applies only to ordinary appeals from the regional
trial court to the Court of Appeals (Section 20 of the Interim Rules). Appeals to this Court by petition
for review on certiorari are governed by Rule 45 of the Rules of Court (Section 25 of the Interim
Rules).
 58

However, the order appealed from states that the first cause of action alleged in the complaint was
against respondent Ignacio Binongcal for refusing to pay the amount of P11,643.00 representing cost
of truck tires which he purchased on credit from petitioner on various occasions from August to
October, 1981; and the second cause of action was against respondent Fernando Calion for allegedly
refusing to pay the amount of P10,212.00 representing cost of truck tires which he purchased on
credit from petitioner on several occasions from March, 1981 to January, 1982.

On December 15, 1983, counsel for respondent Binongcal filed a Motion to Dismiss on the ground of
lack of jurisdiction since the amount of the demand against said respondent was only P11,643.00,
and under Section 19(8) of BP129 the regional trial court shall exercise exclusive original jurisdiction
if the amount of the demand is more than twenty thousand pesos (P20,000.00). It was further averred
in said motion that although another person, Fernando Calion, was allegedly indebted to petitioner in
the amount of P10,212.00, his obligation was separate and distinct from that of the other respondent.
At the hearing of said Motion to Dismiss, counsel for respondent Calion joined in moving for the
dismissal of the complaint on the ground of lack of jurisdiction. Counsel for petitioner opposed the
Motion to Dismiss. As above stated, the trial court dismissed the complaint for lack of jurisdiction.

Petitioner maintains that the lower court has jurisdiction over the case following the "novel" totality
rule introduced in Section 33(l) of BP129 and Section 11 of the Interim Rules.

The pertinent portion of Section 33(l) of BP129 reads as follows:

... Provided,That where there are several claims or causes of action between the same
or different parties, embodied in the same complaint, the amount of the demand shall be
the totality of the claims in all the causes of action, irrespective of whether the causes of
action arose out of the same or different transactions. ...

Section 11 of the Interim Rules provides thus:

Application of the totality rule.-In actions where the jurisdiction of the court is dependent
on the amount involved, the test of jurisdiction shall be the aggregate sum of all the
money demands, exclusive only of interest and costs, irrespective of whether or not the
separate claims are owned by or due to different parties. If any demand is for damages
in a civil action, the amount thereof must be specifically alleged.

Petitioner compares the above-quoted provisions with the pertinent portion of the former rule under
Section 88 of the Judiciary Act of 1948 as amended which reads as follows:

... Where there are several claims or causes of action between the same parties
embodied in the same complaint, the amount of the demand shall be the totality of the
demand in all the causes of action, irrespective of whether the causes of action arose
out of the same or different transactions; but where the claims or causes of action joined
in a single complaint are separately owned by or due to different parties, each separate
claim shall furnish the jurisdictional test. ...

and argues that with the deletion of the proviso in the former rule, the totality rule was reduced to
clarity and brevity and the jurisdictional test is the totality of the claims in all, not in each, of the
causes of action, irrespective of whether the causes of action arose out of the same or different
transactions.

This argument is partly correct. There is no difference between the former and present rules in cases
where a plaintiff sues a defendant on two or more separate causes of action. In such cases, the
amount of the demand shall be the totality of the claims in all the causes of action irrespective of
whether the causes of action arose out of the same or different transactions. If the total demand
exceeds twenty thousand pesos, then the regional trial court has jurisdiction. Needless to state, if the
causes of action are separate and independent, their joinder in one complaint is permissive and not
mandatory, and any cause of action where the amount of the demand is twenty thousand pesos or
less may be the subject of a separate complaint filed with a metropolitan or municipal trial court.
 59

On the other hand, there is a difference between the former and present rules in cases where two or
more plaintiffs having separate causes of action against a defendant join in a single complaint. Under
the former rule, "where the claims or causes of action joined in a single complaint are separately
owned by or due to different parties, each separate claim shall furnish the jurisdictional test" (Section
88 of the Judiciary Act of 1948 as amended, supra). This was based on the ruling in the case of Vda.
de Rosario vs. Justice of the Peace, 99 Phil. 693. As worded, the former rule applied only to cases of
permissive joinder of parties plaintiff. However, it was also applicable to cases of permissive joinder of
parties defendant, as may be deduced from the ruling in the case of Brillo vs. Buklatan, thus:

Furthermore, the first cause of action is composed of separate claims against several
defendants of different amounts each of which is not more than P2,000 and falls under
the jurisdiction of the justice of the peace court under section 88 of Republic Act No,
296. The several claims do not seem to arise from the same transaction or series of
transactions and there seem to be no questions of law or of fact common to all the
defendants as may warrant their joinder under Rule 3, section 6. Therefore, if new
complaints are to be filed in the name of the real party in interest they should be filed in
the justice of the peace court. (87 Phil. 519, 520, reiterated in Gacula vs. Martinez, 88
Phil. 142, 146)

Under the present law, the totality rule is applied also to cases where two or more plaintiffs having
separate causes of action against a defendant join in a single complaint, as well as to cases where a
plaintiff has separate causes of action against two or more defendants joined in a single complaint.
However, the causes of action in favor of the two or more plaintiffs or against the two or more
defendants should arise out of the same transaction or series of transactions and there should be a
common question of law or fact, as provided in Section 6 of Rule 3.

The difference between the former and present rules in cases of permissive joinder of parties may be
illustrated by the two cases which were cited in the case of Vda. de Rosario vs. Justice of the Peace
(supra) as exceptions to the totality rule. In the case of Soriano y Cia vs. Jose (86 Phil. 523), where
twenty-nine dismissed employees joined in a complaint against the defendant to collect their
respective claims, each of which was within the jurisdiction of the municipal court although the total
exceeded the jurisdictional amount, this Court held that under the law then the municipal court had
jurisdiction. In said case, although the plaintiffs' demands were separate, distinct and independent of
one another, their joint suit was authorized under Section 6 of Rule 3 and each separate claim
furnished the jurisdictional test. In the case of International Colleges, Inc. vs. Argonza (90 Phil. 470),
where twenty-five dismissed teachers jointly sued the defendant for unpaid salaries, this Court also
held that the municipal court had jurisdiction because the amount of each claim was within, although
the total exceeded, its jurisdiction and it was a case of permissive joinder of parties plaintiff under
Section 6 of Rule 3.

Under the present law, the two cases above cited (assuming they do not fall under the Labor Code)
would be under the jurisdiction of the regional trial court. Similarly, in the abovecited cases of Brillo
vs. Buklatan and Gacula vs. Martinez (supra), if the separate claims against the several defendants
arose out of the same transaction or series of transactions and there is a common question of law or
fact, they would now be under the jurisdiction of the regional trial court.

In other words, in cases of permissive joinder of parties, whether as plaintiffs or as defendants, under
Section 6 of Rule 3, the total of all the claims shall now furnish the jurisdictional test. Needless to
state also, if instead of joining or being joined in one complaint separate actions are filed by or against
the parties, the amount demanded in each complaint shall furnish the jurisdictional test.

In the case at bar, the lower court correctly held that the jurisdictional test is subject to the rules on
joinder of parties pursuant to Section 5 of Rule 2 and Section 6 of Rule 3 of the Rules of Court and
that, after a careful scrutiny of the complaint, it appears that there is a misjoinder of parties for the
reason that the claims against respondents Binongcal and Calion are separate and distinct and
neither of which falls within its jurisdiction.

WHEREFORE, the order appealed from is affirmed, without pronouncement as to costs.

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