into another agreement whereunder Tan given one (1) year within
which to redeem or repurchase the property.
FIRST DIVISION
G.R. No. 136368 January 16, 2002
JAIME TAN, JR., as Judicial Administrator of the Intestate Estate of
Jaime C. Tan, petitioner,
vs.
HON. COURT OF APPEALS (Ninth Special Div.) and JOSE A.
MAGDANGAL and ESTRELLA MAGDANGAL, respondents.
PUNO, J.:
This is a petition for review of the Decision of the Court of Appeals dated July
15, 19981 and its Resolution dated November 9, 19982 denying petitioner's
motion for reconsideration in CA-G.R. SP-41738.
The facts are as stated in the impugned Decision, viz:
"Involved in this case is a parcel of land, designated as Lot No. 645-C,
with an area of 34,829 square meters, more or less, situated in
Bunawan, Davao City. The lot was once covered by TCT No. T-72067
of the Registry of Deeds of Davao City in the name of the late Jaime C.
Tan (Tan, for short) married to Praxedes V. Tan.
From the petition, the motion to dismiss petition, their respective
annexes and other pleadings, we gather the following factual
antecedents:
On January 22, 1981, Tan, for a consideration of P59,200.00, executed
a deed of absolute sale over the property in question in favor of
spouses Jose Magdangal and Estrella Magdangal. Simultaneous
with the execution of this deed, the same contracting parties entered
Albeit given several opportunities and/or extensions to exercise the
option, Tan failed to redeem the property until his death on January 4,
1988.
On May 2, 1988, Tan's heirs filed before the Regional Trial Court at
Davao City a suit against the Magdangals for reformation of
instrument. Docketed as CIVIL CASE NO. 19049-88, the complaint
alleged that, while Tan and the Magdangals denominated their
agreement as deed of absolute sale, their real intention was to
conclude an equitable mortgage.
Barely hours after the complaint was stamped 'received,' the
Magdangals were able to have Tan's title over the lot in question
canceled and to secure in their names TCT No. T-134470. This
development prompted the heirs of Tan, who were to be later
substituted by Jaime V. Tan, Jr. (Tan, Jr.) as plaintiff, to file a
supplemental complaint.
The intervening legal tussles are not essential to this narration. What is
material is that on June 4, 1991, Branch 11 of the Regional Trial Court
of Davao City rendered judgment finding for Tan, Jr., as plaintiff
therein. The dispositive portion of the decision reads:.
'WHEREFORE, judgment is rendered:
1. The Deed of Absolute Sale (Exhibits B, B-1) is, in
accordance with the true intention of the parties, hereby
declared and reformed an equitable mortgage;
2. The plaintiff is ordered to pay the defendants within 120
days after the finality of this decisionP59,200 plus interest
at the rate of 12% per annum from May 2, 1988, the date the
complaint was filed, until paid;
3. In order to avoid multiplicity of suits and to fully give effect to
the true intention of the parties, upon the payment of the
aforesaid amount, TCT No. T-134470 in the name of
defendants Jose Magdangal and Estrella Magdangal (Exh. 13)
and shall be deemed canceled and null and void and TCT No.
 T-72067 in the name of Jaime C. Tan and Praxedes Valles Tan
(Exh. A) be reinstated).
No pronouncement as to costs.
SO ORDERED. (Annex 'B', Petition; Emphasis added).'
From the above, the Magdangals appealed to this Court in CA-G.R. CV
No. 33657.
In a decision promulgated on September 28, 1995, this Court, thru its
then Special Third Division, affirmed in toto the appealed decision of
the lower court. Copy of this affirmatory judgment was each received
by the Magdangals and Tan, Jr. on October 5, 1995.
On March 13, 1996, the Clerk of this Court entered in the Book of
Entries of Judgment the Decision in CA-G.R. CV No. 33657 and issued
the corresponding Entry of Judgment which, on its face, stated that the
said Decision 'has on October 21, 1995 become final and executory'
(Annex 'L', Petition; Emphasis added).
On March 21, 1996, the Magdangals filed in the lower court a MOTION
FOR CONSOLIDATION AND WRIT OF POSSESSION, therein
alleging that they did not appeal from the aforesaid decision of this
Court, adding '[T]hat the appealed judgment of the Court of Appeals
has become final and executory 15 days from October 5, 1995 or up to
October 20, 1995, which the 120 days redemption period commences.
And noting that the redemption period has expired without Tan, Jr.
exercising his option, the Magdangals thus prayed that the title 'in the
name of Jaime C. Tan and Praxedes Tan be consolidated and
confirmed in the name of the (Magdangals) x x x and pending such
issuance, a writ of possession be ordered issued (Annex "C",
Petition).
1âwphi1.nêt
In opposition to this motion (Annex 'F', Petition), Tan, Jr. alleged,
among other things, that until an entry of judgment has been issued by
the Court of Appeals and copy thereof furnished the parties, the
appealed decision of the court a quo in this case cannot be considered
final and executory. Pressing the point, Tan, Jr., citing Cueto vs.
Collantes, infra., would then assert that the period of redemption on his
part commenced to run from receipt of entry of judgment in CA-G.R.
CV No. 33657.
Meanwhile, Tan, Jr. via a motion for execution dated March 27, 1996,
which he filed directly with this court, prayed this court to direct the
court a quo to issue the corresponding writ of execution in Civil Case
No. 19049-88. In a related move, Tan, Jr. filed on April 16, 1996, a
MANIFESTATION AND MOTION therein advising the court a quo of
his intention to redeem the property in question and of the fact that, on
such date, he has deposited with its clerk of court the repurchase price,
plus interest, as required by its original decision. By way of relief, Tan,
Jr. prayed that the Magdangals be ordered to claim the amount thus
deposited and the Register of Deeds of Davao City, to reinstate the title
of Jaime Tan and Praxedes Tan.
Jointly acting on the aforementioned MOTON FOR CONSOLIDATION
AND WRIT OF POSSESION of the Magdangals (Annex 'C', Petition),
MANIFESTATION AND MOTION of Tan, Jr. (Annex 'I', Petition), the
court a quo presided by the respondent judge, came out with the first
challenged order of June 10, 1996 (Annex 'N', Petition) dispositively
reading, as follows:
'WHEREFORE, x x x the Motion for Consolidation and a Writ of
Possession is hereby DENIED for lack of merit.
The deposit of the amount of P116,032.00 made by plaintiff
with the Office of Court x x x on April 17, 1996 is hereby
considered full payment of the redemption price and the Clerk
of Court is hereby ordered to deliver said amount to herein
defendants.
The Register of Deeds of Davao City x x x is hereby directed to
cancel TCT No. T-134470 in the name of Jose Magdangal and
Estrella Magdangal and, thereafter, to reinstate TCT No. 72067
in the name of Jaime C. Tan and Praxedes Valles Tan and to
submit her compliance thereto within ten (10) days from receipt
of this Order.
SO ORDERED.'
Explaining her action, the respondent judge wrote in the same order:
'Following the ruling of the Supreme Court in Cueto vs.
Collantes, et al., 97 Phil. 325, the 120 days period for plaintiff to
pay the amount of P59,200.00 plus interest x x x should be
 reckoned from the date of Entry of Judgment x x x which was
March 13, 1996. The plaintiff made a deposit on April 17, 1996
well within the 120-day period mandated by the decision of this
Court.'
In due time, the Magdangals moved for a reconsideration. However, in
her next assailed order of July 24, 1996 (Annex 'R', Petition), the
respondent judge denied the motion for being proforma and fatally
defective."3
Petitioner assails the aforequoted Decision as follows:
"I. Petitioner's right to due process was violated when the Court of
Appeals rendered a judgment on the merits of private respondents'
petition without granting to petitioner the opportunity to controvert the
same.
II. Appeal not certiorari was the appropriate remedy of private
respondents as there was no grave abuse of discretion as to amount to
lack of or excess of jurisdiction on the part of the trial judge. Neither is
delay in resolving the main case a ground for giving due course to the
petition.
III. Cueto vs. Collantes, 97 Phil. 325, was disregarded by the Court of
Appeals in resolving the petition of private respondents. It is still good
case law and was in effect made a part of section 2 of Rule 68 of the
1997 Rules of Civil Procedure on Foreclosure of Mortgage.
IV. The St. Dominic vs. Intermediate Appellate Court, 138 SCRA 242
case is not applicable to the case at bar; on the other hand the ruling
in Gutierrez Hermanos vs. de La Riva, 46 Phil. 827, applies.
V. Equity considerations justify giving due course to this
petition."4 (emphasis ours)
We will immediately resolve the key issue of what rule should govern the
finality of judgment favorably obtained in the trial court by the petitioner.
The operative facts show that in its Decision of June 4, 1991, the trial court
held that: (1) the contract between the parties is not an absolute sale but an
equitable mortgage; and (2) petitioner Tan should pay to the respondents
Magdangal "within 120 days after the finality of this decision P59,200.00 plus
interest at the rate of 12% per annum from May 2, 1988, the date the complaint
was filed, until paid."5
On September 28, 1995 in CA-G.R. CV No. 33657, the Special Third Division
of the Court of Appeals affirmed the decision of the trial court in toto. Both
parties received the decision of the appellate court on October 5, 1995. On
March 13, 1996, the clerk of court of the appellate court entered in the Book of
Entries of Judgement the decision in CA-G.R. CV No. 33657 and issued the
corresponding Entry of Judgment which, on its face, stated that the said
decision "has on October 21, 1995 become final and executory."6
The respondents Magdangal filed in the trial court a Motion for Consolidation
and Writ of Possession.7 They alleged that the 120-day period of redemption of
the petitioner has expired. They reckoned that the said period began 15 days
after October 5, 1995, the date when the finality of the judgment of the trial
court as affirmed by the appellate court commenced to run.
On the other hand, petitioner filed on March 27, 1996 a motion for execution in
the appellate court praying that it "direct the court a quo to issue the
corresponding writ of execution in Civil Case No. 19049-88."8 On April 17,
1996, petitioner deposited with the clerk of court the repurchase price of the lot
plus interest as ordered by the decision.
On June 10, 1996, the trial court allowed the petitioner to redeem the lot in
question. It ruled that the 120-day redemption period should be reckoned from
the date of Entry of Judgment in the appellate court or from March 13,
1996.9 The redemption price was deposited on April 17, 1996. As aforestated,
the Court of Appeals set aside the ruling of the trial court.
From 1991-1996, the years relevant to the case at bar, the rule that governs
finality of judgment is Rule 51 of the Revised Rules of Court. Its sections 10
and 11 provide:
"SEC. 10. Entry of judgments and final resolutions. - If no appeal or
motion for new trial or reconsideration is filed within the time provided
in these Rules, the judgment or final resolution shall forthwith be
entered by the clerk in the book of entries of judgments. The date when
the judgment or final resolution becomes executory shall be deemed
as the date of its entry. The record shall contain the dispositive part of
the judgment or final resolution and shall be signed by the clerk, with a
 certificate that such judgment or final resolution has become final and
executory. (2a, R36)
SEC. 11. Execution of judgment. - Except where the judgment or final
order or resolution, or a portion thereof, is ordered to be immediately
executory, the motion for its execution may only be filed in the proper
court after its entry.
In original actions in the Court of Appeals, its writ of execution shall be
accompanied by a certified true copy of the entry of judgment or final
resolution and addressed to any appropriate officer for its enforcement.
In appealed cases, where the motion for execution pending appeal is
filed in the Court of Appeals at a time that it is in possession of the
original record or the record on appeal, the resolution granting such
motion shall be transmitted to the lower court from which the case
originated, together with a certified true copy of the judgment or final
order to be executed, with a directive for such court of origin to issue
the proper writ for its enforcement."
This rule has been interpreted by this Court in Cueto vs. Collantes as
follows:10
"The only error assigned by appellants refer to the finding of the lower
court that plaintiff can still exercise his right of redemption
notwithstanding the expiration of the 90-day period fixed in the original
decision and, therefore, defendants should execute the deed of
reconveyance required in said decision. Appellants contend that, the
final judgment of the Court of Appeals having been entered on July 8,
On April 18, 1994, this Court issued Circular No. 24-94, viz:
1953, the 90-day period for the exercise of the right of redemption has
long expired, it appearing that plaintiff deposited the redemption money
with the clerk of court only on October 17, 1953, or, after the expiration
of 101 days. Appellee brands this computation as erroneous, or one
not in accordance with the procedure prescribed by the rules of court.
Appellee's contention should be sustained. The original decision
provides that appellee may exercise his right of redemption within the
period of 90 days from the date the judgment has become final. It
should be noted that appellee had appealed from this decision. This
decision was affirmed by the court of appeals and final judgment was
entered on July 8, 1953. Does this mean that the judgment became
final on that date?
Let us make a little digression for purposes of clarification. Once a
decision is rendered by the Court of Appeals a party may appeal
therefrom by certiorari by filing with the Supreme Court a petition within
10 days from the date of entry of such decision (Section 1, Rule 46).
The entry of judgment is made after it has become final, i.e., upon the
expiration of 15 days after notice thereof to the parties (Section 8, Rule
53, as modified by a resolution of the Supreme Court dated October 1,
1945). But, as Chief Justice Moran has said, 'such finality *** is subject
to the aggrieved party's right of filing a petition for certiorari under this
section,' which means that 'the Court of Appeals shall remand the case
to the lower court for the execution of its judgment, only after the
expiration of ten (10) days from the date of such judgment, if no
petition for certiorari is filed within that period.' (1 Moran, Comments on
the Rules of Court, 1952 ed., p. 950) It would therefore appear that
the date of entry of judgment of the Court of Appeals is suspended
when a petition for review is filed to await the final entry of the
resolution or decision of the Supreme Court.
Since in the present case appellee has filed a petition for review within
the reglementary period, which was dismissed by resolution of July 6,
1953, and for lack of a motion for reconsideration the entry of final
judgment was made on August 7, 1953, it follows that the 90-day
period within which appellee may exercise his right of redemption
should be counted from said date, August 7, 1953. And appellee
having exercised such right on October 17, 1953 by depositing the
redemption money with the clerk of court, it is likewise clear that the
motion be filed for the exercise of such right is well taken and is within
the purview of the decision of the lower court."11
"TO: COURT OF APPEALS, SANDIGANBAYAN, COURT OF
TAX APPEALS, REGIONAL TRIAL COURTS,
METROPOLITAN TRIAL COURTS, MUNICIPAL TRIAL
COURTS, MUNICIPAL CIRCUIT TRIAL COURTS, AND ALL
MEMBERS OF THE INTEGRATED BAR OF THE
PHILIPPINES
SUBJECT: RESOLUTION OF THE COURT EN
BANC APPROVING AND PROMULGATING THE REVISED
PROVISION ON EXECUTION OF JUDGMENTS.
 SPECIFICALLY IN APPEALED CASES, AND AMENDING
SECTION 1, RULE 39 OF THE RULES OF COURT
It appears that in a number of instances, the execution of judgments in
appealed cases cannot be promptly enforced because of undue
administrative delay in the remand of the records to the court of origin,
aggravated at times by misplacement or misdelivery of said records.
The Supreme Court Committee on the Revision of the Rules of Court
has drafted proposals including a provision which can remedy the
procedural impasse created by said contingencies.
Accordingly, pending approval by the Court of the revised rules on Civil
Procedure, and to provide a solution to the aforestated problems, the
Court Resolved to approve and promulgate the following section
thereof on execution of judgments, amending Section 1, Rule 39 of the
Rules of Court:
Section 1. Execution upon judgments or final orders. - Execution shall
issue as a matter of right, on motion, upon a judgment or order that
disposes of the action or proceeding upon expiration of the period to
appeal therefrom if no appeal has been duly perfected.
If the appeal has been duly perfected and finally resolved, such
execution may forthwith be applied for in the lower court from which the
action originated, on motion of the judgment obligee, submitting
therewith certified true copies of the judgment or judgments or the final
order or orders sought to be enforced and of the entry thereof, with
notice to the adverse party.
The appellate court may, on motion in the same case, when the
interest of justice so requires, direct the court of origin to issue the writ
of execution.
This resolution shall be published in two (2) newspapers of general
circulation and shall take effect on June 1, 1994.
April 18, 1994.
"(Sgd.) ANDRES R. NARVASA
Chief Justice"
The Circular took effect on June 1, 1994.
The 1997 Revised Rules of Civil Procedure, however, amended the rule on
finality of judgment by providing in section 1, Rule 39 as follows:
"Section 1. Execution upon judgments or final orders. - Execution shall
issue as a matter of right, on motion, upon a judgment or order that
disposes of the action or proceeding upon the expiration of the period
to appeal therefrom if no appeal has been duly perfected. (1a)
If the appeal has been duly perfected and finally resolved, the
execution may forthwith be applied for in the court of origin, on motion
of the judgment obligee, submitting therewith certified true copies of
the judgment or judgments or final order or orders sought to be
enforced and of the entry thereof, with notice to the adverse party.
The appellate court may, on motion in the same case, when the
interest of justice so requires, direct the court of origin to issue the writ
of execution."
The rationale of the new rule is explained by retired Justice F.D. Regalado as
follows:12
"1. The term 'final order' is used in two senses depending on whether it
is used on the issue of appealability or on the issue of binding effect.
For purposes of appeal, an order is "final" if it disposes of the action, as
distinguished from an interlocutory order which leaves something to be
done in the trial court with respect to the merits of the case (De la Cruz,
et al. vs. Paras, et al., L-41053, Feb. 27, 1976). For purposes of
binding effect or whether it can be subject of execution, an order is
'final' or executory after the lapse of the reglementary period to appeal
and no appeal has been perfected (see Perez, et al. vs. Zulueta, L-
10374, Sept. 30, 1959; cf. Denso [Phil.], Inc. vs. IAC, et al., G.R. No.
75000, Feb. 27, 1987; Montilla vs. CA, et al., L-47968, May 9, 1988).
2. On the aspect of appealability, these revised Rules use the adjective
'final' with respect to orders and resolutions, since to terminate a case
the trial courts issue orders while the appellate courts and most of the
quasi-judicial agencies issue resolutions. Judgment are not so qualified
since the use of the so-called interlocutory judgments is not favored in
this jurisdiction, while the categorization of an order or a resolution for
purposes of denoting that it is appealable is to distinguish them from
interlocutory orders or resolutions. However, by force of extended
usage the phrase 'final and executory judgment' is sometimes used
and tolerated, although the use of 'executory' alone would suffice.
These observations also apply to the several and separate judgments
contemplated in Rule 36, or partial judgments which totally dispose of a
particular claim or severable part of the case, subject to the power of
the court to suspend or defer action on an appeal from or further
proceedings in such special judgment, or as provided by Rule 35 on
the matter of partial summary judgments which are not considered as
appealable (see Sec. 4, Rule 35 and the explanation therein).
The second paragraph of this section is an innovation in response to
complaints over the delay caused by the former procedure in obtaining
a writ of execution of a judgment, which has already been affirmed on
appeal, with notice to the parties. As things then stood, after the entry
of judgment in the appellate court, the prevailing party had to wait for
the records of the case to be remanded to the court of origin when and
where he could then move for the issuance of a writ of execution. The
intervening time could sometimes be substantial, especially if the
court a quo is in a remote province, and could also be availed of by the
losing party to delay or thwart actual execution.
On these considerations, the Supreme Court issued Circular No. 24-
94, dated April 18, 1994, approving and promulgating in advance this
amended Section 1 of Rule 39 and declaring the same effective as of
June 1, 1994.
Under the present procedure, the prevailing party can secure certified
true copies of the judgment or final order of the appellate court and the
entry thereof, and submit the same to the court of origin with and to
justify his motion for a writ of execution, without waiting for its receipt of
the records from the appellate court. That motion must be with notice
to the adverse party, with a hearing when the circumstances so
require, to enable him to file any objection thereto or bring to the
attention of said court matters which may have transpired during the
pendency of the appeal and which may have a bearing on the
execution sought to enforce the judgment.
The third paragraph of this section, likewise a new provision, is due to
the experience of the appellate courts wherein the trial court, for
reasons of its own or other unjustifiable circumstances, unduly delays
or unreasonably refuses to act on the motion for execution or issue the
writ therefor. On motion in the same case while the records are still
with the appellate court, or even after the same have been remanded
to the lower court, the appellate court can direct the issuance of the
writ of execution since such act is merely in the enforcement of its
judgment and which it has the power to require."
It is evident that if we apply the old rule on finality of judgment, petitioner
redeemed the subject property within the 120-day period of redemption
reckoned from the appellate court's entry of judgment. The appellate court,
however, did not apply the old rule but the 1997 Revised Rules of Civil
Procedure. In fine, it applied the new rule retroactively and we hold that given
the facts of the case at bar this is an error.
There is no dispute that rules of procedure can be given retroactive effect. This
general rule, however, has well-delineated exceptions. We quote author
Agpalo:13
"9.17. Procedural laws.
Procedural laws are adjective laws which prescribe rules and forms of
procedure of enforcing rights or obtaining redress for their invasion;
they refer to rules of procedure by which courts applying laws of all
kinds can properly administer justice. They include rules of pleadings,
practice and evidence. As applied to criminal law, they provide or
regulate the steps by which one who commits a crime is to be
punished.
The general rule that statutes are prospective and not retroactive does
not ordinarily apply to procedural laws. It has been held that "a
retroactive law, in a legal sense, is one which takes away or impairs
vested rights acquired under laws, or creates a new obligation and
imposes a new duty, or attaches a new disability, in respect of
transactions or considerations already past. Hence, remedial statutes
or statutes relating to remedies or modes of procedure, which do not
create new or take away vested rights, but only operate in furtherance
of the remedy or confirmation of rights already existing, do not come
within the legal conception of a retroactive law, or the general rule
against the retroactive operation of statutes." The general rule against
giving statutes retroactive operation whose effect is to impair the
obligations of contract or to disturb vested rights does not prevent the
application of statutes to proceedings pending at the time of their
enactment where they neither create new nor take away vested rights.
A new statute which deals with procedure only is presumptively
applicable to all actions - those which have accrued or are pending.
Statutes regulating the procedure of the courts will be construed as
applicable to actions pending and undetermined at the time of their
passage. Procedural laws are retroactive in that sense and to that
extent. The fact that procedural statutes may somehow affect the
litigants' rights may not preclude their retroactive application to pending
actions. The retroactive application of procedural laws is not violative of
any right of a person who may feel that he is adversely affected. Nor is
the retroactive application of procedural statutes constitutionally
objectionable. The reason is that as a general rule no vested right may
attach to, nor arise from, procedural laws. It has been held that "a
person has no vested right in any particular remedy, and a litigant
cannot insist on the application to the trial of his case, whether civil or
criminal, of any other than the existing rules of procedure."
Thus, the provision of Batas Bilang 129 in Section 39 thereof
prescribing that "no record on appeal shall be required to take an
appeal" is procedural in nature and should therefore be applied
retroactively to pending actions. Hence, the question as to whether an
appeal from an adverse judgment should be dismissed for failure of
appellant to file a record on appeal within thirty days as required under
the old rules, which question is pending resolution at the time Batas
Bilang 129 took effect, became academic upon the effectivity of said
law because the law no longer requires the filing of a record on appeal
and its retroactive application removed the legal obstacle to giving due
course to the appeal. A statute which transfers the jurisdiction to try
certain cases from a court to a quasi-judicial tribunal is a remedial
statute that is applicable to claims that accrued before its enactment
but formulated and filed after it took effect, for it does not create new
nor take away vested rights. The court that has jurisdiction over a claim
at the time it accrued cannot validly try the claim where at the time the
claim is formulated and filed the jurisdiction to try it has been
transferred by law to a quasi-judicial tribunal, for even actions pending
in one court may be validly taken away and transferred to another and
no litigant can acquire a vested right to be heard by one particular
court.
9.18. Exceptions to the rule.
The rule that procedural laws are applicable to pending actions or
proceedings admits certain exceptions. The rule does not apply where
the statute itself expressly or by necessary implication provides that
pending actions are excepted from its operation, or where to apply it to
pending proceedings would impair vested rights. Under appropriate
circumstances, courts may deny the retroactive application of
procedural laws in the event that to do so would not be feasible or
would work injustice. Nor may procedural laws be applied retroactively
to pending actions if to do so would involve intricate problems of due
process or impair the independence of the courts."
We hold that section 1, Rule 39 of the 1997 Revised Rules of Procedure
should not be given retroactive effect in this case as it would result in great
injustice to the petitioner. Undoubtedly, petitioner has the right to redeem the
subject lot and this right is a substantive right. Petitioner followed the
procedural rule then existing as well as the decisions of this Court governing
the reckoning date of the period of redemption when he redeemed the subject
lot. Unfortunately for petitioner, the rule was changed by the 1997 Revised
Rules of Procedure which if applied retroactively would result in his losing the
right to redeem the subject lot. It is difficult to reconcile the retroactive
application of this procedural rule with the rule of fairness. Petitioner cannot be
penalized with the loss of the subject lot when he faithfully followed the laws
and the rule on the period of redemption when he made the redemption. The
subject lot may only be 34,829 square meters but as petitioner claims, "it is the
only property left behind by their father, a private law practitioner who was
felled by an assassin's bullet."14
Petitioner fought to recover this lot from 1988. To lose it because of a change
of procedure on the date of reckoning of the period of redemption is inequitous.
The manner of exercising the right cannot be changed and the change applied
retroactively if to do so will defeat the right of redemption of the petitioner
which is already vested.
IN VIEW WHEREOF, the decision of the Court of Appeals dated July 15, 1998
and its Resolution dated November 9, 1998 in CA-G.R. SP-41738 are annulled
and set aside. The Orders dated June 10, 1996 and July 24, 1996 of the RTC
of Davao City, 11th Judicial Region, Branch 11, in Civil Case No. 19049-88 are
reinstated. No costs.
SO ORDERED.
Davide, Jr., C.J., Kapunan, Pardo, and Ynares-Santiago, JJ., concur
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 191388 March 9, 2011
ASIA UNITED BANK, CHRISTINE T. CHAN, and FLORANTE C. DEL
MUNDO, Petitioners,
vs.
GOODLAND COMPANY, INC., Respondent.
DECISION
DEL CASTILLO, J.:
The costly consequence of forum shopping should remind the parties to ever
be mindful against abusing court processes.
Before the Court is a Petition for Review1 under Rule 45 of the Rules of Court
assailing the Decision2 dated June 5, 2009 of the Court of Appeals (CA) in CA-
G.R. CV No. 90114, as well as its Resolution3 dated February 17, 2010, which
denied a reconsideration of the assailed Decision. The dispositive portion of
the appellate court’s Decision reads:
WHEREFORE, the appeal is GRANTED and the appealed Order dated March
15, 2007 is REVERSED and SET ASIDE. In lieu thereof, another is entered
ordering the DENIAL of appellee bank’s motion to dismiss and directing the
REINSTATEMENT of appellant’s complaint as well as the REMAND of the
case to the trial court for further proceedings.
SO ORDERED.4
Factual Antecedents
Respondent Goodland Company, Inc. (Goodland) executed a Third Party Real
Estate Mortgage (REM) over two parcels of land located in the Municipality of
Sta. Rosa, Laguna and covered by Transfer Certificates of Title (TCT) Nos.
3216725 and 3216736 in favor of petitioner Asia United Bank (AUB). The
mortgage secured the obligation amounting to ₱250 million of Radiomarine
Network, Inc. (RMNI), doing business as Smartnet Philippines, to AUB. The
REM was duly registered on March 8, 2001 in the Registry of Deeds of
Calamba, Laguna.7
Goodland then filed a Complaint8 docketed as Civil Case No. B-6242 before
Branch 25 of the Regional Trial Court (RTC) of Biñan, Laguna for the
annulment of the REM on the ground that the same was falsified and done in
contravention of the parties’ verbal agreement (Annulment Case).
While the Annulment Case was pending, RMNI defaulted in the payment of its
obligation to AUB, prompting the latter to exercise its right under the REM to
extrajudicially foreclose the mortgage. It filed its Application for Extrajudicial
Foreclosure of Real Estate Mortgage under Act No. 3135, as amended with
the Office of the Executive Judge of the RTC of Biñan, Laguna on October 19,
2006.9 The mortgaged properties were sold in public auction to AUB as the
highest bidder. It was issued a Certificate of Sale, which was registered with
the Registry of Deeds of Calamba on November 23, 2006.
Before AUB could consolidate its title, Goodland filed on November 28, 2006
another Complaint10 docketed as Civil Case No. B-7110 before Branch 25 of
the RTC of Biñan, Laguna, against AUB and its officers, petitioners Christine
Chan and Florante del Mundo. This Complaint sought to annul the foreclosure
sale and to enjoin the consolidation of title in favor of AUB (Injunction Case).
Goodland asserted the alleged falsified nature of the REM as basis for its
prayer for injunction.
A few days later, AUB consolidated its ownership over the foreclosed
properties and obtained new titles, TCT Nos. T-65703111 and 657032,12in its
name from the Registry of Deeds of Calamba.
Petitioners then filed on December 11, 2006 a Motion to Dismiss with
Opposition to a Temporary Restraining Order in the Injunction Case.13 They
brought to the trial court’s attention Goodland’s forum shopping given the
pendency of the Annulment Case. They argued that the two cases both rely on
the alleged falsification of the real estate mortgage as basis for the reliefs
sought.
Ruling of the Regional Trial Court (Injunction Case)
On March 15, 2007, the trial court acted favorably on petitioners’ motion and
dismissed the Injunction Case with prejudice on the grounds of forum shopping
and litis pendentia.14 The trial court explained that the Injunction Case and the
Annulment Case are both founded on the same transactions, same essential
facts and circumstances, and raise substantially the same issues. The addition
of the application for a writ of preliminary injunction does not vary the similarity
between the two cases. The trial court further noted that Goodland could have
prayed for injunctive relief as ancillary remedy in the Annulment Case. Finally,
the trial court stated that any judgment in the Annulment Case regarding the
validity of the REM would constitute res judicata on the Injunction Case.
Ruling of the Court of Appeals15 (Injunction Case)
Goodland appealed16 the same to the CA.
Meanwhile, AUB filed an Ex-Parte Application for Writ of Possession on
December 18, 2006, which was granted on March 15, 2007. The writ was
issued on March 26, 2007 and AUB obtained possession of the foreclosed
properties on April 2, 2007.
On June 5, 2009, the CA promulgated its assailed Decision, which ruled in
favor of Goodland and ordered the reinstatement of the Injunction Case in the
trial court.17
The CA rejected petitioners’ contention that Goodland’s appeal raised pure
questions of law,18 which are within the jurisdiction of the Supreme Court under
Rule 45.19 Instead, it found Goodland’s Rule 41 appeal to be proper because it
involved both questions of fact and of law. The CA held that a question of fact
existed because petitioners themselves questioned in their Brief the veracity of
Goodland’s Certification of Non-Forum Shopping.20
The CA conceded that Goodland’s Brief failed to comply with the formal
requirements, which are all grounds for the dismissal of the appeal,21 e.g.,
failure of the appellant to serve and file the required number of copies of its
brief on all appellees and absence of page references to the record. However,
it relaxed the rules so as to completely resolve the rights and obligations of the
parties. The CA, however, warned Goodland that its future lapses will be dealt
with more severely.22
The CA further ruled against petitioners’ argument that the delivery of the
foreclosed properties to AUB’s possession has rendered Goodland’s appeal
moot. It explained that the Injunction Appeal involving the annulment of
extrajudicial foreclosure sale can proceed independently of petitioners’
application for a writ of possession.23
The CA then concluded that Goodland was not guilty of forum shopping when
it initiated the Annulment and Injunction Cases. The CA held that the reliefs
sought in the two cases were different. The Annulment Case sought the
nullification of the real estate mortgage, while the Injunction Case sought the
nullification of the foreclosure proceedings as well as to enjoin the
consolidation of title in favor of petitioners.24 The CA further held that aside
from the difference in reliefs sought, the two cases were independent of each
other because the facts or evidence that supported their respective causes of
action were different. The acts which gave rise to the Injunction Case (i.e., the
extrajudicial foreclosure proceedings) occurred long after the filing of the
Annulment Case.25
The appellate court also held that any decision in either case will not constitute
res judicata on the other. It explained that the validity of the real estate
mortgage has no "automatic bearing" on the validity of the extrajudicial
foreclosure proceedings.26
Moreover, according to the CA, the fact that Goodland stated in its Certification
of Non-Forum Shopping in the Injunction Case that the Annulment Case was
pending belied the existence of forum shopping.27
Petitioners filed a Motion for Reconsideration28 on July 2, 2009, which was
denied in the assailed Resolution of February 17, 2010.29
Hence, the instant petition.
Ruling in G.R. No. 190231 (Annulment Case)
Contemporaneously with the proceedings of the Injunction Case, the earlier
Annulment Case (Civil Case No. B-6242) was also dismissed by the trial court
on the ground of forum shopping on August 16, 2007.30
Goodland filed an appeal31 of the dismissal to the CA, which appeal was
granted. The CA ordered on August 11, 2009 the reinstatement of the
Annulment Case in the trial court.32
AUB then filed with this Court a Petition for Review,33 docketed as G.R. No.
190231 and entitled Asia United Bank and Abraham Co v. Goodland
Company, Inc.
On December 8, 2010, the Court’s First Division reversed the CA ruling and
resolved the appeal in AUB’s favor.34The sole issue resolved by the Court was
whether Goodland committed willful and deliberate forum shopping by filing
Civil Case Nos. B-6242 (Annulment Case) and B-7110 (Injunction Case). The lavvphil
Court ruled that Goodland committed forum shopping because both cases
asserted non-consent to the mortgage as the only basis for seeking the
nullification of the REM, as well as the injunction of the foreclosure. When
Goodland did not notify the trial court of the subsequent filing of the injunction
complaint, Goodland revealed its "furtive intent to conceal the filing of Civil
Case No. B-7110 for the purpose of securing a favorable judgment." Thus, the
Court concluded that the trial court was correct in dismissing the annulment
case with prejudice. The dispositive portion of the said Resolution reads as
follows:
WHEREFORE, the petition is hereby GRANTED. The August 11, 2009
decision and November 10, 2009 resolution of the Court of Appeals in CA-GR
CV No. 9126[9] are REVERSED and SET ASIDE. The August 16, 2007 and
December 5, 2007 orders of the Regional Trial Court of Biñan, Laguna, Branch
25 in Civil Case No. B-6242 are REINSTATED.35
Goodland filed a Motion for Reconsideration36 but the same was denied with
finality in the Court’s Resolution dated January 19, 2011.
Issue37
The parties present several issues for the Court’s resolution. Most of these
address the procedural infirmities that attended Goodland’s appeal to the CA,
making such appeal improper and dismissible. The crux of the case, however,
lies in the issue of whether the successive filing of the Annulment and
Injunction Cases constitute forum shopping.
Petitioners’ Arguments
Petitioners maintain that Goodland is guilty of forum shopping because it
sought in the Annulment Case to annul the REM on the ground that it was
falsified and unlawfully filled-out; while in the Injunction Case, Goodland
wanted to nullify the foreclosure sale arising from the same REM on the
ground that the REM was falsified and unlawfully filled-out. Clearly, Goodland’s
complaints rise and fall on the issue of whether the REM is valid. This requires
the presentation of the same evidence in the Annulment and Injunction
Cases.38
Goodland’s Arguments
Goodland counters that it did not commit forum shopping because the causes
of action for the Injunction and Annulment Cases are different. The Annulment
Case is for the annulment of REM; while the Injunction Case is for the
annulment of the extrajudicial foreclosure sale. Goodland argues that any
judgment in the Annulment Case, regardless of which party is successful,
would not amount to res judicata in the Injunction Case.39
Our Ruling
We grant the petition.
There is forum shopping "when a party repetitively avails of several judicial
remedies in different courts, simultaneously or successively, all substantially
founded on the same transactions and the same essential facts and
circumstances, and all raising substantially the same issues either pending in
or already resolved adversely by some other court."40 The different ways by
which forum shopping may be committed were explained in Chua v.
Metropolitan Bank & Trust Company:41
Forum shopping can be committed in three ways: (1) filing multiple cases
based on the same cause of action and with the same prayer, the previous
case not having been resolved yet (where the ground for dismissal is litis
pendentia); (2) filing multiple cases based on the same cause of action and the
same prayer, the previous case having been finally resolved (where the ground
for dismissal is res judicata); and (3) filing multiple cases based on the same
cause of action, but with different prayers (splitting causes of action, where the
ground for dismissal is also either litis pendentia or res judicata).
Common in these types of forum shopping is the identity of the cause of action
in the different cases filed. Cause of action is defined as "the act or omission
by which a party violates the right of another."42
The cause of action in the earlier Annulment Case is the alleged nullity of the
REM (due to its allegedly falsified or spurious nature) which is allegedly
violative of Goodland’s right to the mortgaged property. It serves as the basis
for the prayer for the nullification of the REM. The Injunction Case involves the
same cause of action, inasmuch as it also invokes the nullity of the REM as the
basis for the prayer for the nullification of the extrajudicial foreclosure and for
injunction against consolidation of title. While the main relief sought in the
Annulment Case (nullification of the REM) is ostensibly different from the main
relief sought in the Injunction Case (nullification of the extrajudicial foreclosure finality therein. This ruling is conclusive on the petitioners and Goodland
and injunction against consolidation of title), the cause of action which serves considering that they are substantially the same parties in that earlier case.
as the basis for the said reliefs remains the same — the alleged nullity of the
REM. Thus, what is involved here is the third way of committing forum Given our ruling above that the Injunction Case ought to be dismissed for
shopping, i.e., filing multiple cases based on the same cause of action, but with forum shopping, there is no need to rule further on the procedural infirmities
different prayers. As previously held by the Court, there is still forum shopping raised by petitioners against Goodland’s appeal.
even if the reliefs prayed for in the two cases are different, so long as both
cases raise substantially the same issues.43 WHEREFORE, premises considered, the Petition is GRANTED. The June 5,
2009 Decision of the Court of Appeals and its February 17, 2010 Resolution in
There can be no determination of the validity of the extrajudicial foreclosure CA-G.R. CV No. 90114 are hereby REVERSED and SET ASIDE. The March
and the propriety of injunction in the Injunction Case without necessarily ruling 15, 2007 Order of Branch 25 of the Regional Trial Court of Biñan, Laguna
on the validity of the REM, which is already the subject of the Annulment Case. DISMISSING Civil Case No. B-7110 is hereby REINSTATED and AFFIRMED.
The identity of the causes of action in the two cases entails that the validity of
the mortgage will be ruled upon in both, and creates a possibility that the two SO ORDERED.
rulings will conflict with each other. This is precisely what is sought to be
avoided by the rule against forum shopping.
MARIANO C. DEL CASTILLO
Associate Justice
The substantial identity of the two cases remains even if the parties should add
different grounds or legal theories for the nullity of the REM or should alter the
WE CONCUR:
designation or form of the action. The well-entrenched rule is that "a party
cannot, by varying the form of action, or adopting a different method of
presenting his case, escape the operation of the principle that one and the
same cause of action shall not be twice litigated."44

The CA ruled that the two cases are different because the events that gave
rise to them are different. The CA rationalized that the Annulment Case was
brought about by the execution of a falsified document, while the Injunction
Case arose from AUB’s foreclosure based on a falsified document. The
distinction is illusory. The cause of action for both cases is the alleged nullity of
the REM due to its falsified or spurious nature. It is this nullity of the REM
which Goodland sought to establish in the Annulment Case. It is also this
nullity of the REM which Goodland asserted in the Injunction Case as basis for
seeking to nullify the foreclosure and enjoin the consolidation of title. Clearly,
the trial court cannot decide the Injunction Case without ruling on the validity of
the mortgage, which issue is already within the jurisdiction of the trial court in
the Annulment Case.

The recent development in Asia United Bank v. Goodland Company,

Inc.,45 which involved substantially the same parties and the same issue is
another reason for Goodland’s loss in the instant case. The issue that
Goodland committed deliberate forum shopping when it successively filed the
Annulment and Injunction Cases against AUB and its officers was decided with
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 201601 March 12, 2014
MARYLOU CABRERA, Petitioner,
vs.
FELIX NG, Respondent.
DECISION
REYES, J.:
Before this Court is a petition for review on certiorari1 under Rule 45 of the
Rules of Court seeking to annul and set aside the Decision2 dated October 21,
2009 and the Resolution3 dated March 26, 2012 of the Court of Appeals (CA)
in CA-G.R. SP No. 03392. The CA denied the petition for certiorari filed by
Marylou Cabrera (petitioner), which assailed the Order4 dated December 19,
2007 of the Regional Trial Court (RTC) of Mandaue City, Branch 56, in Civil
Case No. MAN-4773.
The Facts
On February 14, 2004, Felix Ng (respondent) filed a complaint for sum of
money with the RTC against the petitioner and her husband Marionilo Cabrera
(spouses Cabrera), alleging that the latter issued to him the following: (1)
Metrobank Check No. 0244694 dated June 30, 2002 for the amount of Thirty-
One Thousand Pesos (₱31,000.00); (2) Metrobank Check No. 0244674 dated
August 9, 2002 for the amount of Thirty-Eight Thousand Seventy-Four Pesos
and Seventy-Six Centavos (₱38,074.76); and (3) Metrobank Check No.
0244745 dated August 15, 2005 for Two Million Five Hundred Thousand
Pesos (₱2,500,000.00). That when presented for payment, the said checks
were all dishonored as the accounts from which they had been drawn were
already closed.
The spouses Cabrera admitted that they issued Metrobank Check No.
0244694 and Metrobank Check No. 0244674 to the respondent and that the
same were dishonored when presented for payment. However, they claimed
that they paid the respondent the amount represented by the said checks
through the latter’s son Richard Ng. Further, they deny having issued
Metrobank Check No. 0244745 to the respondent, alleging that the said check
was forcibly taken from them by Richard Ng.
On August 7, 2007, the RTC rendered a Decision,5 which ordered the spouses
Cabrera to pay the respondent the following: (1) Two Million Five Hundred
Sixty-Nine Thousand Seventy-Four Pesos (₱2,569,074.00) plus legal interest
from inception of the obligation until fully paid; (2) moral damages in the
amount of Fifty Thousand Pesos (₱50,000.00); (3) attorney’s fees of Twenty
Thousand Pesos (₱20,000.00); and (4) litigation expenses in the amount of
Ten Thousand Pesos (₱10,000.00).
On August 8, 2007, the spouses Cabrera received a copy of the RTC Decision
dated August 7, 2007. On August 14, 2007, the spouses Cabrera filed with the
RTC a motion for reconsideration,6 which they set for hearing on August 17,
2007. On even date, the spouses Cabrera sent a copy of their motion for
reconsideration to the respondent thru registered mail; it was actually received
by the respondent on August 21, 2007.
The said motion for reconsideration, however, was not heard on August 17,
2007 as the new acting presiding judge of the said court had just assumed
office. On August 28, 2007, the RTC issued a notice,7 which set the said
motion for reconsideration for hearing on September 25, 2007.
On September 20, 2007, the respondent filed an opposition8 to the motion for
reconsideration filed by the spouses Cabrera. The respondent alleged that the
said motion for reconsideration is a mere scrap of paper since it violated the
three-day notice requirement. The respondent pointed out that the spouses
Cabrera sent to him a copy of their motion for reconsideration, which was set
for hearing on August 17, 2007, via registered mail on August 14, 2007; that he
actually received a copy thereof only on August 21, 2007 – four days after the
scheduled hearing thereon.
It appears that the scheduled hearing of the spouses Cabrera’s motion for
reconsideration on September 25, 2007 did not push through. Consequently,
on September 26, 2007, the RTC issued another notice,9 which set the said
motion for reconsideration for hearing on October 26, 2007.
On October 26, 2007, the RTC issued an Order,10 which directed the parties to
file their additional pleadings, after which the motion for reconsideration filed by
the spouses Cabrera would be deemed submitted for resolution.
On December 19, 2007, the RTC issued an Order11 which denied the motion
for reconsideration filed by the spouses Cabrera. The RTC pointed out that the
spouses Cabrera violated Section 4, Rule 15 of the Rules of Court, which
mandates that every motion required to be heard should be served by the
movant in such a manner as to ensure its receipt by the other party at least
three days before the date of hearing. Thus:
After a meticulous scrutiny of the records of this case, the court opines that the
motion was filed beyond the reglementary three (3)[-]day period.
As the records bear out, the instant motion was mailed to the plaintiff’s counsel
on August 14[, 2007] and was set for hearing on August 17, 2007. However,
the copy of said motion had reached plaintiff’s side and a copy of which was
received by plaintiff’s counsel only on August 17, 2007[,] four (4) days late after
it was supposed to be heard. Hence, a clear blatant violations [sic] of the rule
on notice and hearing.12
The RTC further opined that a motion, which fails to comply with the three-day
notice requirement is a mere scrap of paper; it is not entitled to judicial
cognizance and would not toll the running of the reglementary period for filing
the requisite pleadings. Accordingly, the RTC held, its Decision dated August
7, 2007 had already become final for failure of the spouses Cabrera to comply
with the three-day notice requirement.
The petitioner then filed a petition for certiorari13 with the CA, alleging that the
RTC gravely abused its discretion in denying her motion for reconsideration.
The petitioner pointed out that the RTC did not actually conduct a hearing on
her motion for reconsideration on August 17, 2007;
that her motion for reconsideration was actually heard on October 26, 2007,
after the respondent had already filed his opposition thereto. Thus, the
petitioner claimed, the issue of her failure to comply with the three-day notice
requirement had already been rendered moot. In any case, the petitioner
asserted, the RTC should have resolved her motion for reconsideration on its
merits rather than simply denying it on mere technicality.
On October 21, 2009, the CA, by way of the assailed Decision,14 denied the
petition for certiorari filed by the petitioner. The CA opined that the RTC did not
abuse its discretion in denying the motion for reconsideration filed by the
spouses Cabrera since it merely applied the three-day notice requirement
under Section 4, Rule 15 of the Rules of Court. Thus:
It appears that petitioner’s Motion for Reconsideration was set for hearing on
17 August 2007. A copy thereof was mailed to private respondent on 14
August 2007, and private respondent actually received his copy only on 21
August 2007 or four (4) days after the set date of hearing; and thus, depriving
him of the opportunity to oppose the motion. Respondent court, therefore,
correctly held that such motion violated the three (3)-day notice rule; the
essence of due process. Respondent court had applied said rule to the given
situation, and of no doubt, mere adherence to the rules cannot be considered
grave abuse of discretion on the part of the respondent court. x x x.15(Citation
omitted)
The petitioner sought a reconsideration of the Decision dated October 21,
2009 but it was denied by the CA in its Resolution16 dated March 26, 2012.
Hence, the instant petition.
The Issue
The sole issue to be resolved by the Court is whether the CA erred in affirming
the RTC Order dated December 19, 2007, which denied the motion for
reconsideration filed by the spouses Cabrera.
The Court’s Ruling
The petition is meritorious.
Sections 4 and 5, Rule 15 of the Rules of Court provide that:
Sec. 4. Hearing of motion. – Except for motions which the court may act upon
without prejudicing the rights of the adverse party, every written motion shall
be set for hearing by the applicant.
Every written motion required to be heard and the notice of the hearing thereof
shall be served in such a manner as to ensure its receipt by the other party at
least three (3) days before the date of hearing, unless the court for good cause
sets the hearing on shorter notice.
Sec. 5. Notice of hearing. – The notice of hearing shall be addressed to all
parties concerned, and shall specify the time and date of the hearing which
must not be later than ten (10) days after the filing of the motion. (Emphasis
ours)
The general rule is that the three-day notice requirement in motions under
Sections 4 and 5 of the Rules of Court is mandatory. It is an integral
component of procedural due process.17 "The purpose of the three-day notice
requirement, which was established not for the benefit of the movant but rather
for the adverse party, is to avoid surprises upon the latter and to grant it
sufficient time to study the motion and to enable it to meet the arguments
interposed therein."18
"A motion that does not comply with the requirements of Sections 4 and 5 of
Rule 15 of the Rules of Court is a worthless piece of paper which the clerk of
court has no right to receive and which the court has no authority to act
upon."19 "Being a fatal defect, in cases of motions to reconsider a decision, the
running of the period to appeal is not tolled by their filing or pendency."20
Nevertheless, the three-day notice requirement is not a hard and fast rule.
When the adverse party had been afforded the opportunity to be heard, and
has been indeed heard through the pleadings filed in opposition to the motion,
the purpose behind the three-day notice requirement is deemed realized. In
such case, the requirements of procedural due process are substantially
complied with. Thus, in Preysler, Jr. v. Manila Southcoast Development
Corporation,21 the Court ruled that:
The three-day notice rule is not absolute. A liberal construction of the
procedural rules is proper where the lapse in the literal observance of a rule of
procedure has not prejudiced the adverse party and has not deprived the court
of its authority. Indeed, Section 6, Rule 1 of the Rules of Court provides that
the Rules should be liberally construed in order to promote their objective of
securing a just, speedy and inexpensive disposition of every action and
proceeding. Rules of procedure are tools designed to facilitate the attainment
of justice, and courts must avoid their strict and rigid application which would
result in technicalities that tend to frustrate rather than promote substantial
justice.
In Somera Vda. De Navarro v. Navarro, the Court held that there was
substantial compliance of the rule on notice of motions even if the first notice
was irregular because no prejudice was caused the adverse party since the
motion was not considered and resolved until after several postponements of
which the parties were duly notified.
Likewise, in Jehan Shipping Corporation v. National Food Authority, the Court
held that despite the lack of notice of hearing in a Motion for Reconsideration,
there was substantial compliance with the requirements of due process where
the adverse party actually had the opportunity to be heard and had filed
pleadings in opposition to the motion. The Court held:
This Court has indeed held time and again, that under Sections 4 and 5 of
Rule 15 of the Rules of Court, mandatory is the requirement in a motion, which
is rendered defective by failure to comply with the requirement. As a rule, a
motion without a notice of hearing is considered pro forma and does not affect
the reglementary period for the appeal or the filing of the requisite pleading.
As an integral component of the procedural due process, the three-day notice
required by the Rules is not intended for the benefit of the movant. Rather, the
requirement is for the purpose of avoiding surprises that may be sprung upon
the adverse party, who must be given time to study and meet the arguments in
the motion before a resolution of the court. Principles of natural justice
1âwphi 1
demand that the right of a party should not be affected without giving it an
opportunity to be heard.
The test is the presence of opportunity to be heard, as well as to have time to
study the motion and meaningfully oppose or controvert the grounds upon
which it is based. x x x22
(Emphasis supplied and citations omitted)
It is undisputed that the hearing on the motion for reconsideration filed by the
spouses Cabrera was reset by the RTC twice with due notice to the parties; it
was only on October 26, 2007 that the motion was actually heard by the RTC.
At that time, more than two months had passed since the respondent received
a copy of the said motion for reconsideration on August 21, 2007. The
respondent was thus given sufficient time to study the motion and to enable
him to meet the arguments interposed therein. Indeed, the respondent was
able to file his opposition thereto on September 20, 2007.
Notwithstanding that the respondent received a copy of the said motion for
reconsideration four days after the date set by the spouses Cabrera for the
hearing thereof, his right to due process was not impinged as he was afforded
the chance to argue his position. Thus, the R TC erred in denying the spouses
Cabrera's motion for reconsideration based merely on their failure to comply
with the three-day notice requirement.
WHEREFORE, in consideration of the foregoing disquisitions, the instant
petition is GRANTED. The Decision dated October 21, 2009 and the
Resolution dated March 26, 2012 of the Court of Appeals in CA-G.R. SP No.
03392, are hereby REVERSED and SET ASIDE. The case is hereby
REMANDED to the Regional Trial Court of Mandaue City, Branch 56, to
resolve the Motion for Reconsideration filed by the spouses Cabrera on the
merits within five (5) days from the finality of this Decision.
SO ORDERED.
BIENVENIDO L. REYES
Associate Justice
WE CONCUR:
SECOND DIVISION
G.R. No. 141116 February 17, 2003
DAMASO SEBASTIAN and TOMASA CARDENAS, petitioners,
vs.
HON. HORACIO R. MORALES, Secretary of the Department of Agrarian
Reform, LEONILA SARENAS1 , JOSEPHINE SARENAS-DAYRIT,
EVANGELINE SARENAS, ESTRELITA SARENAS TAN, CECILIO MARCOS
SARENAS, MANUEL DEL SARENAS, DAISY RITA SARENAS, and JOY
SARENAS, respondents.
DECISION
QUISUMBING, J.:
On appeal by certiorari is the decision2 of the Court of Appeals dated March 9,
1999 in CA-G.R. SP No. 51288, which dismissed petitioners’ special civil
action for certiorari and prohibition on the ground that petitioners pursued the
wrong mode of appeal. Equally assailed is the resolution3 of the appellate court
dated December 10, 1999, which denied petitioners’ motion for
reconsideration.
The facts, as gleaned from the record, are as follows:
Private respondents Leonila Sarenas, Josephine Sarenas-Dayrit, Evangeline
Sarenas, Estrellita Sarenas Tan, Cecilio Marcos Sarenas, Manuel Gil Sarenas,
Daisy Rita Sarenas, and Joy Sarenas are the heirs of the late Guillermo
Sarenas, who died intestate on June 27, 1986. During his lifetime, Guillermo
owned the following agricultural landholdings, all located in Samon and
Mayapyap Sur, Cabanatuan City:
1. Agricultural lot with an area of 1.6947 hectares covered by TCT No.
NT-8607 and tenanted by Juanito Gonzales;
2. Agricultural lot with an area of 3.1663 hectares covered by TCT No.
NT-8608, with petitioner Damaso Sebastian as the tenant; and
3. Agricultural lot with an area of 2.2723 hectares registered under TCT
No. NT-8609, with Perfecto Mana as the tenant.
In addition to the foregoing properties, Guillermo was also the registered owner
of a parcel of agricultural land located at San Ricardo, Talavera, Nueva Ecija,
with a total area of 4.9993 hectares, under TCT No. NT-143564. This property
was, in turn, tenanted by Manuel Valentin and Wenceslao Peneyra.
The tenants tilling the farm lots covered by TCT Nos. NT-8607, 8608, and
8609 had already been issued emancipation patents pursuant to P.D. No. 27.4
On July 14, 1993, private respondents filed an application with the Department
of Agrarian Reform (DAR) Regional Office in San Fernando, Pampanga,
docketed as No. A-0303-1219-96, for retention of over five hectares of the late
Guillermo’s landholdings. Among the lots which private respondents sought to
retain under Section 6 of the Comprehensive Agrarian Reform Law (R.A. No.
6657)5 were those covered by TCT Nos. NT-8608 and 8609.
On June 6, 1997, the DAR Regional Office in San Fernando, Pampanga
granted private respondents’ application, thus:
WHEREFORE, premises considered, an ORDER is hereby issued:
 1. GRANTING the Application for Retention of not more than five (5)
hectares of the Heirs of the late Guillermo Sarenas on their agricultural
landholdings covered by TCT Nos. NT-TCT-8608 and TCT-8609
situated at Samon and Mayapyap Sur, Cabanatuan City, and which
area must be compact and contiguous and least prejudicial to the
entire landholdings and majority of the farmers therein;
2. DIRECTING the Heirs of the late Guillermo Sarenas o[r] their duly
authorized representative to coordinate with the MARO concerned for
the segregation of their retained area at their own expense and to
submit a copy of the segregation plan within thirty (30) days from
approval thereof;
3. MAINTAINING the tenants in the retained areas as lessees thereof
pursuant to RA 3844 as amended; and
4. ACQUIRING the other agricultural landholdings in excess of the
retained area, and to distribute the same to identified qualified farmer-
beneficiaries pursuant to RA 6657.
SO ORDERED.6
On June 16, 1997, petitioner Sebastian moved for reconsideration of the
foregoing order before the DAR Regional Director, Region III, which docketed
the case as A.R. Case No. LSD 1083-97. The DAR Regional Director found
that the order dated June 6, 1997 in Docket No. A-0303-1219-96 was contrary
to law for violating Section 6 of RA No. 66577 and its Implementing Rules and
Regulations. He then issued a new order dated October 23, 1997, which
instead allowed private respondents to retain a parcel of land with an area of
4.9993 hectares, covered by TCT No. 143564, located at San Ricardo,
Talavera, Nueva Ecija.
Private respondents then appealed the order of October 23, 1997 to the DAR
Secretary.
On June 18, 1998, the Secretary of Agrarian Reform set aside the order dated
October 23, 1997, and in lieu thereof issued a new one the decretal portion of
which reads:
WHEREFORE, premises considered, the 23 October 1997 Order of RD
Herrera is hereby SET ASIDE and a new one issued:
1. GRANTING the heirs of Guillermo Sarenas the right to retain 2.8032
has. of the landholding covered by TCT No. 8608 located at
Cabanatuan City;
2. AFFIRMING the validity of the coverage of the landholdings covered
by TCT Nos. 8607, 8609 and 143564 located at Cabanatuan City and
Talavera, Nueva Ecija respectively;
3. MAINTAINING the tenants affected in the retained area as
leaseholders thereof pursuant to RA 3844;
4. DIRECTING the MARO/PARO to determine the qualification status
of the FB whose respective tillage is embraced under TCT No. 8608,
subject of the pending controversy with the DARAB; and
5. DIRECTING the Heirs of the late Guillermo Sarenas or their duly
authorized representative to coordinate with the MARO concerned for
the segregation of their retained area at their own expense and to
submit a copy of the segregation plan within 30 days from approval
thereof.
SO ORDERED.8
Petitioner Sebastian then filed a motion for reconsideration, but this motion
was denied by the DAR Secretary in an order dated January 26, 1999, the
dispositive portion of which states:
WHEREFORE, premises considered, Order is hereby issued DENYING the
instant Motion for Reconsideration for utter lack of merit. Accordingly, as far as
this Office is concerned, this case is considered closed. Further, all persons,
other than the recognized tenant-farmers, are hereby ordered to cease and
desist from further entering and undertaking any activity on the subject
landholdings.
SO ORDERED.9
The Secretary also found that petitioners appeared to have waived their rights
over the tenanted land in favor of Clemente Bobares and Luzviminda
Domingo-Villaroman, and had allowed cultivation of the landholding by a
certain Ricardo Dela Paz. He ruled that it was "unlawful/illegal to allow other
persons than the tenant-farmers themselves to work on the land except if they
are only working as an aide of the latter otherwise, landowners shall have the
recourse against the tenant-farmers."10
Consequently, on February 22, 1999, petitioners filed a special civil action for
certiorari and prohibition, with prayer for writ of preliminary mandatory
injunction with the Court of Appeals, docketed as CA-G.R. SP No. 51288.
On March 9, 1999, the Court of Appeals, without going into the merits of the
case, dismissed CA-G.R. SP No. 51288 after finding that "petitioners pursued
the wrong mode of appeal."11 It found that the orders of the DAR Secretary
sought to be reviewed were final orders for they finally disposed of the agrarian
case and left nothing more to be decided on the merits. Hence, the proper
remedy available to petitioners was a petition for review pursuant to Rule 43,
Section 1 of the 1997 Rules of Civil Procedure,12 and not a special civil action
for certiorari under Rule 65. The Court of Appeals also ruled that petitioners
failed to attach a certified true copy or duplicate original of the assailed order of
June 18, 1998 as required by Rule 46, Section 3,13 and hence, it had no
alternative but to dismiss the action pursuant to said Section 3.
Petitioners then timely moved for reconsideration, but the appellate court in its
resolution of December 10, 1999 denied their motion.
Hence, the instant case anchored on the following sole assigned error:
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR (A) IN NOT
TREATING THE PETITION FILED BY PETITIONERS AS A PETITION FOR
REVIEW; AND (B) IN NOT RESOLVING THE CASE ON THE MERITS.14
Petitioners submit that the sole issue before us is whether or not the dismissal
by the Court of Appeals of the petition in CA-G.R. SP No. 51288 is valid and
proper.
Petitioners admit that there was error in the remedy resorted to before the
Court of Appeals. They insist, however, that a perusal of their initiatory
pleading in CA-G.R. SP No. 51288 would show that said pleading contained all
the features and contents for a petition for review under Rule 43, Section 6 of
the 1997 Rules of Civil Procedure.15Hence, the court a quo should have treated
their special civil action for certiorari and prohibition under Rule 65 as a petition
for review under Rule 43, since dismissals based on technicalities are frowned
upon. Petitioners contend that procedural rules are but a means to an end and
should be liberally construed to effect substantial justice.
Private respondents, on the other hand, claim that the Court of Appeals did not
commit any reversible error in dismissing the petition in CA-G.R. SP No.
51288, for it simply applied the express and categorical mandate of this Court
that a petition shall be dismissed if the wrong remedy is availed of. Private
respondents argue that while it is true that the Rules of Court should be
liberally construed, it is also equally true that the Rules cannot be ignored,
since strict observance thereof is indispensable to the orderly and speedy
discharge of judicial business.
Under Rule 1, Section 6 of the 1997 Rules of Civil Procedure,16 liberal
construction of the rules is the controlling principle to effect substantial
justice. Thus, litigations should, as much as possible, be decided on their
1a\^/phi 1.net
merits and not on technicalities. This does not mean, however, that procedural
rules are to be ignored or disdained at will to suit the convenience of a party.
Procedural law has its own rationale in the orderly administration of justice,
namely, to ensure the effective enforcement of substantive rights by providing
for a system that obviates arbitrariness, caprice, despotism, or whimsicality in
the settlement of disputes. Hence, it is a mistake to suppose that substantive
law and procedural law are contradictory to each other, or as often suggested,
that enforcement of procedural rules should never be permitted if it would
result in prejudice to the substantive rights of the litigants.
Litigation is not a game of technicalities, but every case must be prosecuted in
accordance with the prescribed procedure so that issues may be properly
presented and justly resolved. Hence, rules of procedure must be faithfully
followed except only when for persuasive reasons, they may be relaxed to
relieve a litigant of an injustice not commensurate with his failure to comply
with the prescribed procedure. Concomitant to a liberal application of the rules
of procedure should be an effort on the part of the party invoking liberality to
explain his failure to abide by the rules.17
In the instant case, petitioners failed to show any compelling reason for not
resorting to the proper remedy. Instead, we find from our perusal of their
pleadings before the appellate court that they stoutly and persistently insisted
that the extraordinary remedy of certiorari was their correct remedy. First, in
instituting CA-G.R. SP No. 51288, petitioners categorically invoked the
jurisdiction of the Court of Appeals to have the questioned orders of the DAR
Secretary declared null and void for having "been issued and promulgated with
grave abuse of discretion . . . a mounting to lack of jurisdiction."18 Note that it is
precisely the office of an action for certiorari under Rule 65 to correct errors of
jurisdiction. Second, after the appellate court dismissed their petition on the
ground that the proper remedy was a petition for review, petitioners continued
to insist in their motion for reconsideration that under Section 54 of R.A. No.
6657,19 a petition for certiorari is both adequate and proper in CA-G.R. SP No.
51288. It was only as an afterthought that they asked the appellate court to
treat their special civil action for certiorari as a petition for review, after a
belated and grudging admission that their reliance on Section 54 of R.A. No.
6657 was an honest mistake or excusable error.
We agree with the appellate court that petitioners’ reliance on Section 54 of
R.A. No. 6657 "is not merely a mistake in the designation of the mode of
appeal, but clearly an erroneous appeal from the assailed Orders."20 For in
relying solely on Section 54, petitioners patently ignored or conveniently
overlooked Section 60 of R.A. No. 6657, the pertinent portion of which
provides that:
An appeal from the decision of the Court of Appeals, or from any order, ruling
or decision of the DAR, as the case may be, shall be by a petition for review
with the Supreme Court, within a non-extendible period of fifteen (15) days
from receipt of a copy of said decision. (Emphasis supplied.) 1aw phi 1.nét
Section 60 of R.A. No. 6657 should be read in relation to R.A. No. 7902
expanding the appellate jurisdiction of the Court of Appeals to include:
Exclusive appellate jurisdiction over all final judgments, decisions, resolutions,
orders or awards of Regional Trial Courts and quasi-judicial agencies,
instrumentalities, boards or commissions…except those falling within the
appellate jurisdiction of the Supreme Court in accordance with the Constitution,
the Labor Code of the Philippines under Presidential Decree No. 442, as
amended, the provisions of this Act, and of subparagraph (1) of the third
paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the
Judiciary Act of 1948.21
With the enactment of R.A. No. 7902, this Court issued Circular 1-95 dated
May 16, 1995 governing appeals from all quasi-judicial bodies to the Court of
Appeals by petition for review, regardless of the nature of the question raised.
Said circular was incorporated in Rule 43 of the 1997 Rules of Civil Procedure.
Section 61 of R.A. No. 665722 clearly mandates that judicial review of DAR
orders or decisions are governed by the Rules of Court. The Rules direct that
1a\^/phi1.net
it is Rule 43 that governs the procedure for judicial review of decisions, orders,
or resolutions of the DAR Secretary. By pursuing a special civil action for
certiorari under Rule 65 rather than the mandatory petition for review under
Rule 43, petitioners opted for the wrong mode of appeal. Pursuant to the fourth
paragraph of Supreme Court Circular No. 2-90,23 "an appeal taken to the
Supreme Court or the Court of Appeals by the wrong or inappropriate mode
shall be dismissed." Therefore, we hold that the Court of Appeals committed
no reversible error in dismissing CA-G.R. SP No. 51288 for failure of
petitioners to pursue the proper mode of appeal.
But should the appellate court have treated the petition for the extraordinary
writs of certiorari and prohibition in CA-G.R. SP No. 51288 as a petition for
review as petitioners insist?
That a petition for certiorari under Rule 65 should pro forma satisfy the
requirements for the contents of a petition for review under Rule 43 does not
necessarily mean that one is the same as the other. Or that one may be
treated as the other, for that matter. A petition for review is a mode of appeal,
while a special civil action for certiorari is an extraordinary process for the
correction of errors of jurisdiction. It is basic remedial law that the two remedies
are distinct, mutually exclusive,24 and antithetical. The extraordinary remedy of
certiorari is proper if the tribunal, board, or officer exercising judicial or quasi-
judicial functions acted without or in grave abuse of discretion amounting to
lack or excess of jurisdiction and there is no appeal or any plain, speedy, and
adequate remedy in law.25 A petition for review, on the other hand, seeks to
correct errors of judgment committed by the court, tribunal, or officer. In the
instant case, petitioners failed to show any grave abuse of discretion
amounting to want of jurisdiction on the part of the DAR Secretary. When a
court, tribunal, or officer has jurisdiction over the person and the subject matter
of the dispute, the decision on all other questions arising in the case is an
exercise of that jurisdiction. Consequently, all errors committed in the exercise
of said jurisdiction are merely errors of judgment. Under prevailing procedural
rules and jurisprudence, errors of judgment are not proper subjects of a special
civil action for certiorari.26 For if every error committed by the trial court or quasi-
judicial agency were to be the proper subject of review by certiorari, then trial
would never end and the dockets of appellate courts would be clogged beyond
measure. Hence, no error may be attributed to the appellate court in refusing
to grant petitioners’ request that their petition for certiorari under Rule 65 be
treated as a petition for review under Rule 43.
As a final salvo, petitioners urge us to review the factual findings of the DAR
Secretary. Settled is the rule that factual questions are not the proper subject
of an appeal by certiorari, as a petition for review under Rule 45 is limited only
to questions of law.27 Moreover, it is doctrine that the "errors" which may be
reviewed by this Court in a petition for certiorari are those of the Court of
Appeals,28 and not directly those of the trial court or the quasi-judicial agency,
tribunal, or officer which rendered the decision in the first instance. Finally, it is
settled that factual findings of administrative agencies are generally accorded
respect and even finality by this Court, if such findings are supported by
substantial evidence,29 a situation that obtains in this case. The factual findings
of the Secretary of Agrarian Reform who, by reason of his official position, has
acquired expertise in specific matters within his jurisdiction, deserve full
respect and, without justifiable reason, ought not to be altered, modified or
reversed.
WHEREFORE, the instant petition is DENIED. The assailed decision of the
Court of Appeals in CA-G.R. SP No. 51288 dated March 4, 1999, as well as
the resolution of the appellate court dated December 10, 1999, is AFFIRMED.
No pronouncement as to costs.
SO ORDERED.
Bellosillo, (Chairman), Mendoza, Austria-Martinez, and Callejo, Sr., JJ.,
concur.
FIRST DIVISION
[G.R. NO. 144568 : July 3, 2007]
GUILLERMA S. SABLAS, joined by her husband,
PASCUAL LUMANAS, Petitioners, v.ESTERLITA S.
SABLAS and RODULFO S. SABLAS, Respondents.
DECISION
CORONA, J.:
This case traces its roots to a complaint for judicial
partition, inventory and accounting filed by
respondents Esterlita S. Sablas and Rodulfo S. Sablas
against petitioner spouses Pascual Lumanas and
Guillerma S. Sablas in the Regional Trial Court of
Baybay, Leyte, Branch 141 on October 1, 1999.2
Petitioner spouses were served with summons and a
copy of the complaint on October 6, 1999. On
October 21, 1999, they filed a motion for extension
of time requesting an additional period of 15 days, or
until November 5, 1999, to file their answer.
However, they were able to file it only on November
8, 1999. While the trial court observed that the
answer was filed out of time, it admitted the pleading
because no motion to declare petitioner spouses in
default was filed.3
The following day, November 9, 1999, respondents
filed a motion to declare petitioner spouses in
default.4 It was denied by the trial court in an order
dated December 6, 1999.5 Respondents moved for
reconsideration but it was also denied.6 Thereafter,
they challenged the December 6, 1999 order in the
Court of Appeals in a petition for certiorari 7 alleging
that the admission of the answer by the trial court
was contrary to the rules of procedure and
constituted grave abuse of discretion amounting to
lack of jurisdiction.
In a decision dated July 17, 2000,8 the appellate
court ruled that the trial court committed grave
abuse of discretion because, pursuant to Section 3,
Rule 9 of the Rules of Court, the trial court had no
recourse but to declare petitioner spouses in default
when they failed to file their answer on or before
November 5, 1999. Thus, the Court of Appeals
granted the petition, vacated the December 6, 1999
order and remanded the case to the trial court for
reception of plaintiffs' evidence.
Aggrieved, petitioner spouses (defendants in the trial
court) now assail the July 17, 2000 decision of the
Court of Appeals in this Petition for Review
on Certiorari .9
Petitioner spouses contend that the Court of Appeals
decision was not in accord with the rules of procedure
as it misconstrued Section 3, Rule 9 of the Rules of
Court and was in contravention of jurisprudence.
We agree.
Where There Is No Motion, There
Can Be No Declaration of Default
The elements of a valid declaration of default are:
1. the court has validly acquired jurisdiction over the
person of the defending party either by service of
summons or voluntary appearance;10
2. the defending party failed to file the answer within
the time allowed therefor and
3. a motion to declare the defending party in default
has been filed by the claiming party with notice to
the defending party.
An order of default can be made only upon motion of
the claiming party.11 It can be properly issued
against the defending party who failed to file the
answer within the prescribed period only if the
claiming party files a motion to that effect with notice
to the defending party.
In this connection, Section 3, Rule 9 of the Rules of
Court provides:
SEC. 3. Default: Declaration of. - If the defending
party fails to answer within the time allowed therefor,
the court shall, upon motion of the claiming
party with notice to the defending party, and proof
of such failure, declare the defending party in default.
x x x. (emphasis supplied)
Three requirements must be complied with before the
court can declare the defending party in default: (1)
the claiming party must file a motion asking the court
to declare the defending party in default; (2) the
defending party must be notified of the motion to
declare him in default and (3) the claiming party
must prove that the defending party has failed to
answer within the period provided by the Rules of
Court.12
The rule on default requires the filing of a motion and
notice of such motion to the defending party. It is not
enough that the defendant fails to answer the
complaint within the reglementary period.13 The trial
court cannot motu proprio declare a defendant in
default14 as the rules leave it up to the claiming party
to protect his or its interests. The trial court should
not under any circumstances act as counsel of the
claiming party.
Where There Is No Declaration of Default,
Answer May be Admitted Even If Filed Out Of
Time
It is within the sound discretion of the trial court to
permit the defendant to file his answer and to be
heard on the merits even after the reglementary
period for filing the answer expires.15 The Rules of
Court provides for discretion on the part of the trial
court not only to extend the time for filing an answer
but also to allow an answer to be filed after the
reglementary period.16
Thus, the appellate court erred when it ruled that the
trial court had no recourse but to declare petitioner
spouses in default when they failed to file their
answer on or before November 5, 1999.
The rule is that the defendant's answer should be
admitted where it is filed before a declaration of
default and no prejudice is caused to the
plaintiff.17 Where the answer is filed beyond the
reglementary period but before the defendant is
declared in default and there is no showing that
defendant intends to delay the case, the answer
should be admitted.18 chanrobles vi rt ual law li bra ry
Therefore, the trial court correctly admitted the
answer of petitioner spouses even if it was filed out
of time because, at the time of its filing, they were
not yet declared in default nor was a motion to
declare them in default ever filed. Neither was there
a showing that petitioner spouses intended to delay
the case.
Where Answer Has Been Filed, There can Be No
Declaration of Default Anymore
Since the trial court already admitted the answer, it
was correct in denying the subsequent motion of
respondents to declare petitioner spouses in default.
In Cathay Pacific Airways, Ltd. v. Hon. Romillo,
Jr.,19 the Court ruled that it was error to declare the
defending party in default after the answer was filed.
The Court was in fact even more emphatic in Indiana
Aerospace University v. Commission on Higher
Education:20 it was grave abuse of discretion to
declare a defending party in default despite the
latter's filing of an answer.
The policy of the law is to have every litigant's case
tried on the merits as much as possible. Hence,
judgments by default are frowned upon.21 A case is
best decided when all contending parties are able to
ventilate their respective claims, present their
arguments and adduce evidence in support thereof.
The parties are thus given the chance to be heard
fully and the demands of due process are subserved.
Moreover, it is only amidst such an atmosphere that
accurate factual findings and correct legal conclusions Respondent Evangeline C. Cobarrubias is an associate professor of the
petitioner’s College of Human Sciences. She is an active member of the Union
can be reached by the courts. of Faculty and Employees of Saint Louis University (UFESLU).

Accordingly, the petition is hereby GRANTED. The The 2001-20065 and 2006-20116 Collective Bargaining Agreements (CBAs)
July 17, 2000 decision of the Court of Appeals in CA- between SLU and UFESLU contain the following common provision on forced
leave:
G.R. SP No. 57397 is REVERSED and SET
ASIDE and the December 6, 1999 order of the Section 7.7. For teaching employees in college who fail the yearly evaluation,
Regional Trial Court of Baybay, Leyte, Branch 14 the following provisions shall apply:
is REINSTATED. The case is REMANDED to the trial (a) Teaching employees who are retained for three (3) cumulative years in five
court for further proceedings. (5) years shall be on forced leave for one (1) regular semester during which
period all benefits due them shall be suspended.7
SO ORDERED.
SLU placed Cobarrubias on forced leave for the first semester of School Year
Republic of the Philippines (SY) 2007-2008 when she failed the evaluation for SY 2002-2003, SY 2005-
SUPREME COURT 2006, and SY 2006-2007, with the rating of 85, 77, and 72.9 points,
Manila respectively, below the required rating of 87 points.

THIRD DIVISION To reverse the imposed forced leave, Cobarrubias sought recourse from the
CBA’s grievance machinery. Despite the conferences held, the parties still
failed to settle their dispute, prompting Cobarrubias to file a case for illegal
G.R. No. 187104 August 3, 2010 forced leave or illegal suspension with the National Conciliation and Mediation
Board of the Department of Labor and Employment, Cordillera Administrative
SAINT LOUIS UNIVERSITY, INC., Petitioner, Region, Baguio City. When circulation and mediation again failed, the parties
vs. submitted the issues between them for voluntary arbitration before Voluntary
EVANGELINE C. COBARRUBIAS, Respondent. Arbitrator (VA) Daniel T. Fariñas.

DECISION Cobarrubias argued that the CA already resolved the forced leave issue in a
prior case between the parties, CA-G.R. SP No. 90596,8 ruling that the forced
BRION, J.: leave for teachers who fail their evaluation for three (3) times within a five-year
period should be coterminous with the CBA in force during the same five-year
We resolve the present petition for review on certiorari1 filed by petitioner Saint period.9
Louis University, Inc. (SLU), to challenge the decision2 and the resolution3 of
the Court of Appeals (CA) in CA-G.R. SP No. 101708.4 SLU, for its part, countered that the CA decision in CA-G.R. SP No. 90596
cannot be considered in deciding the present case since it is presently on
The Factual Background appeal with this Court (G.R. No. 176717)10 and, thus, is not yet final. It argued
that the forced leave provision applies irrespective of which CBA is applicable,
The facts of the case, gathered from the records, are briefly summarized provided the employee fails her evaluation three (3) times in five (5) years.11
below.
The Voluntary Arbitrator Decision
On October 26, 2007, VA Daniel T. Fariñas dismissed the case.12 He found
that the CA decision in CA-G.R. SP No. 90596 is not yet final because of the
pending appeal with this Court. He noted that the CBA clearly authorized SLU
to place its teaching employees on forced leave when they fail in the
evaluation for three (3) years within a five-year period, without a distinction on
whether the three years fall within one or two CBA periods. Cobarrubias
received the VA’s decision on November 20, 2007.13
On December 5, 2007, Cobarrubias filed with the CA a petition for review
under Rule 43 of the Rules of Court, but failed to pay the required filing fees
and to attach to the petition copies of the material portions of the record.14
Thus, on January 14, 2008, the CA dismissed the petition outright for
Cobarrubias’ procedural lapses.15Cobarrubias received the CA resolution,
dismissing her petition, on January 31, 2008.16
On February 15, 2008, Cobarrubias filed her motion for reconsideration,
arguing that the ground cited is technical. She, nonetheless, attached to her
motion copies of the material portions of the record and the postal money
orders for ₱4,230.00. She maintained that the ends of justice and fair play are
better served if the case is decided on its merits.17
On July 30, 2008, the CA reinstated the petition. It found that Cobarrubias
substantially complied with the rules by paying the appeal fee in full and
attaching the proper documents in her motion for reconsideration.18
SLU insisted that the VA decision had already attained finality for Cobarrubias’
failure to pay the docket fees on time.
The CA Decision
The CA brushed aside SLU’s insistence on the finality of the VA decision and
annulled it, declaring that the "three (3) cumulative years in five (5) years"
phrase in Section 7.7(a) of the 2006-2011 CBA means within the five-year
effectivity of the CBA. Thus, the CA ordered SLU to pay all the benefits due
Cobarrubias for the first semester of SY 2007-2008, when she was placed on
forced leave.19
When the CA denied20 the motion for reconsideration that followed,21 SLU filed
the present petition for review on certiorari.22
The Petition
SLU argues that the CA should not have reinstated the appeal since
Cobarrubias failed to pay the docket fees within the prescribed period, and
rendered the VA decision final and executory. Even if Cobarrubias’ procedural
lapse is disregarded, SLU submits that Section 7.7(a) of the 2006-2011 CBA
should apply irrespective of the five-year effectivity of each CBA.23
The Case for Cobarrubias
Cobarrubias insists that the CA settled the appeal fee issue, in its July 30,
2008 resolution, when it found that she had substantially complied with the
rules by subsequently paying the docket fees in full. She submits that the CA’s
interpretation of Section 7.7(a) of the 2006-2011 CBA is more in accord with
law and jurisprudence.24
The Issues
The core issues boil down to whether the CA erred in reinstating Cobarrubias’
petition despite her failure to pay the appeal fee within the reglementary
period, and in reversing the VA decision. To state the obvious, the appeal fee
is a threshold issue that renders all other issues unnecessary if SLU’s position
on this issue is correct.
The Court’s Ruling
We find the petition meritorious.
Payment of Appellate Court Docket Fees
Appeal is not a natural right but a mere statutory privilege, thus, appeal must
be made strictly in accordance with the provision set by law.25 Rule 43 of the
Rules of Court provides that appeals from the judgment of the VA shall be
taken to the CA, by filing a petition for review within fifteen (15) days from the
receipt of the notice of judgment.26Furthermore, upon the filing of the petition,
the petitioner shall pay to the CA clerk of court the docketing and other lawful
fees;27 non-compliance with the procedural requirements shall be a sufficient
ground for the petition’s dismissal.28 Thus, payment in full of docket fees within
the prescribed period is not only mandatory, but also jurisdictional.29 It is an
essential requirement, without which, the decision appealed from would
become final and executory as if no appeal has been filed.30
As early as the 1932 case of Lazaro v. Endencia and Andres,31 we stressed
that the payment of the full amount of the docket fee is an indispensable step
for the perfection of an appeal. In Lee v. Republic,32 we decided that even
though half of the appellate court docket fee was deposited, no appeal was
deemed perfected where the other half was tendered after the period within
which payment should have been made. In Aranas v. Endona,33 we reiterated
that the appeal is not perfected if only a part of the docket fee is deposited
within the reglementary period and the remainder is tendered after the
expiration of the period.
The rulings in these cases have been consistently reiterated in subsequent
cases: Guevarra v. Court of Appeals,34Pedrosa v. Spouses Hill,35 Gegare v.
Court of Appeals,36 Lazaro v. Court of Appeals,37 Sps. Manalili v. Sps. de
Leon,38 La Salette College v. Pilotin,39 Saint Louis University v. Spouses
Cordero,40 M.A. Santander Construction, Inc. v. Villanueva,41 Far Corporation
v. Magdaluyo,42 Meatmasters Int’l. Corp. v. Lelis Integrated Dev’t.
Corp.,43Tamayo v. Tamayo, Jr.,44 Enriquez v. Enriquez,45 KLT Fruits, Inc. v.
WSR Fruits, Inc.,46 Tan v. Link,47 Ilusorio v. Ilusorio-Yap,48 and most recently in
Tabigue v. International Copra Export Corporation (INTERCO),49 and
continues to be the controlling doctrine.
In the present case, Cobarrubias filed her petition for review on December 5,
2007, fifteen (15) days from receipt of the VA decision on November 20, 2007,
but paid her docket fees in full only after seventy-two (72) days, when she filed
her motion for reconsideration on February 15, 2008 and attached the postal
money orders for ₱4,230.00. Undeniably, the docket fees were paid late, and
without payment of the full docket fees, Cobarrubias’ appeal was not perfected
within the reglementary period.
Exceptions to the Rule on Payment of Appellate Court Docket Fees not
applicable
Procedural rules do not exist for the convenience of the litigants; the rules were
established primarily to provide order to and enhance the efficiency of our
judicial system.50 While procedural rules are liberally construed, the provisions
on reglementary periods are strictly applied, indispensable as they are to the
prevention of needless delays, and are necessary to the orderly and speedy
discharge of judicial business.51
Viewed in this light, procedural rules are not to be belittled or dismissed simply
because their non-observance may have prejudiced a party's substantive
rights; like all rules, they are required to be followed. However, there are
recognized exceptions to their strict observance, such as: (1) most persuasive
and weighty reasons; (2) to relieve a litigant from an injustice not
commensurate with his failure to comply with the prescribed procedure; (3)
good faith of the defaulting party by immediately paying within a reasonable
time from the time of the default; (4) the existence of special or compelling
circumstances; (5) the merits of the case; (6) a cause not entirely attributable
to the fault or negligence of the party favored by the suspension of the rules;
(7) a lack of any showing that the review sought is merely frivolous and
dilatory; (8) the other party will not be unjustly prejudiced thereby; (9) fraud,
accident, mistake or excusable negligence without the appellant's fault; (10)
peculiar, legal and equitable circumstances attendant to each case; (11) in the
name of substantial justice and fair play; (12) importance of the issues
involved; and (13) exercise of sound discretion by the judge, guided by all the
attendant circumstances.52 Thus, there should be an effort, on the part of the
party invoking liberality, to advance a reasonable or meritorious explanation for
his/her failure to comply with the rules.
1avv phi1
In Cobarrubias' case, no such explanation has been advanced. Other than
insisting that the ends of justice and fair play are better served if the case is
decided on its merits, Cobarrubias offered no excuse for her failure to pay the
docket fees in full when she filed her petition for review. To us, Cobarrubias’
omission is fatal to her cause.
We, thus, find that the CA erred in reinstating Cobarrubias’ petition for review
despite the nonpayment of the requisite docket fees within the reglementary
period. The VA decision had lapsed to finality when the docket fees were paid;
hence, the CA had no jurisdiction to entertain the appeal except to order its
dismissal.
WHEREFORE, the present petition is GRANTED. The assailed decision and
resolution of the Court of Appeals in CA-G.R. SP No. 101708 are
hereby DECLARED VOID and are consequently SET ASIDE. The decision of
the voluntary arbitrator, that the voided Court of Appeals decision and
resolution nullified, stands. No pronouncement as to costs.
SO ORDERED.
 Republic of the Philippines SLI alleged that it is the absolute owner of a 7,516-squaremeter parcel of land
SUPREME COURT situated in Brgy. Poblacion, Bulan, Sorsogon covered by Original Certificate of
Manila Title (OCT) No. P-28928. However, petitioners and their co-defendants who
had been informally occupying a portion of the said property refused to vacate
SECOND DIVISION the same despite demand. Hence, SLI sought that they be ordered to
immediately vacate the premises, turn over the same to SLI, and pay
G.R. No.177425 June 18, 2014 compensatory damages, attorney’s fees and cost of suit.

ALONZO GIPA, IMELDA MARO LLANO, JUANITO LUDOVICE, VIRGILIO In their Answer with Counterclaim,9 petitioners and their co-defendants
GOJIT, DEMAR BIT ANGCOR, FELIPE MONTALBAN AND DAISY M. asserted that they did not heed SLI’s demand to vacate as they believed that
PLACER,1 Petitioners, they have the right to stay on the said property. They relied on their occupation
vs. thereof and that of their predecessors-in-interest which, according to them,
SOUTHERN LUZON INSTITUTE as represented by its Vice-President For dates back to as early as 1950. Impugning SLI’s claims, petitioners and their
Operations and Corporate Secretary, RUBEN G. ASUNCION, Respondent. co-defendants averred that SLI had not even for a single moment taken
possession of the subject property and was merely able to procure a title over
the same thru fraud, bad faith and misrepresentation. By way of counterclaim,
DECISION
they prayed that they be declared the lawful possessors of the property; that
OCT No. P-28928 be declared null and void; and, that SLI be ordered to pay
DEL CASTILLO, J.: them moral damages and litigation expenses.

Suffice it to say that "[ c ]oncomitant to the liberal interpretation of the rules of Ruling of the Regional Trial Court
procedure should be an effort on the part of the party invoking liberality to
adequately explain his failure to abide by the rules."2 Those who seek
Finding SLI to have proven its ownership of the property by preponderance of
exemption from the application of the rule have the burden of proving the
evidence, the RTC rendered a Decision10 in its favor on January 5, 2005. The
existence of exceptionally meritorious reasons warranting such
said court gave weight to SLI’s documentary evidence showing the grant of its
departure.3 Assailed in this Petition for Review on Certiorari is the December
Miscellaneous Sales Application (MSA) over the subject property which
20, 2006 Resolution4 of the Court of Appeals (CA) in CA-G.R. CV No. 85215
became the basis for the issuance of title under its name, and the testimony of
which dismissed for non-perfection herein petitioners' appeal from the January
the Supervising Draftsman of the National Housing Authority (NHA) who
5, 2005 Decision' of the Regional Trial Court (RTC), Branch 65, Sorsogon City
categorically stated that the houses occupied by petitioners and their co-
in Civil Case No. 547-37. Likewise questioned is the CA Resolution6 dated
defendants were within the property of SLI per NHA’s survey. It rejected, on
March 30, 2007 which denied the Motion for Reconsideration thereto.
the other hand, petitioners and their co-defendants’ claim of title to the
property. For one, the fact that SLI had an existing MSA over the property as
Factual Antecedents far back as 1969 could not have been unknown to them. This is because
several of the petitioners and their codefendants filed Revocable Permit
On February 26, 1996, respondent Southern Luzon Institute (SLI), an Applications over the same property which were denied on March 4, 1964,
educational institution in Bulan, Sorsogon, filed a Complaint7 for Recovery of precisely because the areas applied for were already included in SLI’s MSA.
Ownership and Possession with Damages against petitioners Alonzo Gipa, For another, the documentary evidence submitted by them consisted mostly of
Imelda Marollano, Juanito Ludovice, Demar Bitangcor, Virgilio Gojit, Felipe tax declarations and other documents which were self-serving and could not
Montalban and four others namely, Arturo Rogacion, Virgilio Gracela, be considered as conclusive evidence of ownership. Hence, the RTC ruled:
Rosemarie Alvarez and Rosita Montalban (Rosita). During trial, defendant
Rosita executed a Special Power of Attorney8 in favor of her sister Daisy M. WHEREFORE, premises considered, judgment is hereby rendered –
Placer (Placer) authorizing the latter to represent her in the case and to sign
any and all papers in relation thereto.
 a) Declaring plaintiff-SLI as absolute owner of that portion of Lot 4705
containing an area of SEVEN THOUSAND FIVE HUNDRED SIXTEEN
(7,516) SQUARE METERS covered by "Katibayan ng Orihinal na
Titulo Blg. P-28928".
b) Ordering herein defendants to vacate and relinquish the portions of
lot 4705 belonging to the SLI that they are presently occupying illegally
and to demolish the residential houses existing thereon at their own
expense.
c) To pay attorney’s fee in the amount of Php10,000.00 jointly.
d) And to pay the costs.
SO ORDERED.11
Petitioners and their co-defendants filed a Notice of Appeal12 which was
granted by the RTC in its Order13 of January 27, 2005.
Ruling of the Court of Appeals
The CA, however, dismissed the appeal in its Resolution14 of August 26, 2005
since it was not shown that the appellate court docket fees and other lawful
fees were paid.15 Petitioners and their co-defendants promptly filed a Motion for
Reconsideration16 to which they attached a Certification17 from the RTC that
they paid the appeal fee in the amount of₱3,000.00 under Official Receipt No.
18091130 dated January 25, 2005. In view of this, the CA granted the said
motion and consequently reinstated the appeal through a Resolution18 dated
November 2, 2005.
Subsequently, however, the CA further required petitioners and their
codefendants, through a Minute Resolution19dated March 1, 2006,to remit
within ten days from notice the amount of ₱30.00 for legal research fund,
which apparently was not included in the ₱3,000.00 appeal fee previously paid
by them. Copy of the said resolution was received on March 13,2006 by
petitioners’ counsel, Atty. Jose G. Gojar of the Public Attorney’s Office.20
Despite the lapse of nine months from their counsel’s receipt of the said
resolution, petitioners and their co-defendants, however, failed to comply with
the CA’s directive. Hence, the said court dismissed the appeal through its
Resolution21 of December 20, 2006in this wise:
Jurisprudence is replete that the nonpayment of the docket and other lawful
fees within the reglementary period as provided under Section 4 of Rule 41 of
the Revised Rules of [C]ourt is a ground for the dismissal of an appeal, as
provided for under Section 1(c)[,] Rule 50 of the same Rule. We quote:
SECTION 1. Grounds for dismissal of appeal. – An appeal may be dismissed
by the Court of Appeals, on its own motion or on that of the appellee, on the
following grounds:
xxx xxx xxx
c. Failure of the appellant to pay the docket and other lawful fees as provided
in Section 4 of Rule 41; x x x
xxxx
In the instant case, appellants were given sufficient time to complete the
payment of the appeal fees. Unfortunately, appellants still failed to comply with
the said directive [despite the fact] that the amount of ₱30.00 involved is very
little. Hence, appellants failed to perfect their appeal for failure to fully pay the
appeal fees. They are deemed to have lost interest over the instant appeal. x x
xx
WHEREFORE, premises considered, the instant Appeal is hereby
DISMISSED.
SO ORDERED.22
Petitioners and their co-defendants filed a Motion for
Reconsideration23 invoking the principle of liberality in the application of
technical rules considering that they have paid the substantial amount of
₱3,000.00 for docket and other legal fees and fell short only by the meager
amount of ₱30.00. Ascompliance, they attached to the said motion a postal
money order in the sum of ₱30.00 payable to the Clerk of Court of the CA.24
The CA, however, was not swayed, hence, the denial of the Motion for
Reconsideration in its Resolution25 of March 30, 2007.
Issue
Petitioners and Placer now file this Petition for Review on Certiorari raising the
lone issue of:
WHETHER THE COURT OF APPEALS GRAVELY ERRED IN DISMISSING
THE APPEAL FILED BY THE PETITIONERS FOR FAILURE TO REMIT THE
MEAGERAMOUNT OF THIRTY PESOS (₱30.00) AFTER HAVING
ADVANCED A SUBSTANTIAL PORTION OF THE DOCKET FEES.26
It must, however, be noted at the outset that the caption of the present Petition
includes Placer as one of the petitioners. In fact, the other petitioners even
authorized her to sign the verification and certification of non-forum shopping in
their behalf.27 A review of the records, however, shows that she was not one of
the defendants before the RTC. Her only participation therein was that she
represented her sister Rosita as one of the defendants by virtue of a Special
Power of Attorney which the latter executed in her favor.28 Notably in the
present Petition, Placer appears to have been impleaded in her personal
capacity and not as Rosita’s representative. This cannot be done. It bears
emphasizing that an appeal on certiorari, as in this case, is a continuation of
the original suit.29 Hence, the parties in the original suit must also be the parties
in such an appeal.30 Placer, therefore, not being a party in the complaint before
the RTC has no personality to continue the same on appeal and cannot be
considered as a petitioner. At the most, her only role in this Petition was to sign
the verification and certification of non-forum shopping for and in behalf of
petitioners.
The Parties’ Arguments
Initially, petitioners invoke the liberal application of technical rules31 and
contend that the fact that only the amount of ₱30.00 was not paid justifies
relaxation of the same. Later in their Reply,32 however, petitioners concede that
the payment of docket fees is not a mere technicality. Nevertheless, they point
out that while full payment of docket fees is indispensable in the perfection of
an appeal, the same admits of exceptions.33 Their case falls under one of the
exceptions, that is, in the name of substantial justice and fair play. According to
petitioners, the dismissal of their appeal for failure to pay ₱30.00 runs counter
to substantial justice and fair play as the same would deprive them of their right
to justice and render ineffective the amount of ₱3,000.00, which despite being
indigents, they undertook to pay. To support their case, petitioners cited
Andrea Camposagrado v. Pablo Camposagrado34 and Spouses Gutierrez v.
Spouses Valiente35 wherein the Court excused the insufficient payment of
docket fees. Moreover, petitioners raise in the said Reply, albeit for the first
1âwphi 1
time, the argument that while Republic Act (RA) No. 940636 was still in existent
at the time their appeal was filed before the CA, Section 637 thereof which
exempts PAO clients like themselves from the payment of docket and other
fees should be given retroactive application.
For its part, SLI argues that since petitioners’ appeal was not perfected due to
insufficient payment of docket and other legal fees, the January 5, 2005
Decision of the RTC had already become final and executory. Further, the CA
correctly dismissed petitioners’ appeal because aside from the fact that
petitioners failed to comply with the CA’s directive to pay the lacking amount of
₱30.00 for a period of more than nine months from their counsel’s receipt of
notice, no plausible explanation was tendered by them for such failure.
Our Ruling
The Petition fails.
Payment of the full amount of appellate
court docket and lawful fees is
mandatory and jurisdictional;
Relaxation of the rule on payment of
appeal fee is unwarranted in this case.
Section 4, Rule 41 of the Rules of Court provides:
Sec. 4. Appellate court docket and other lawful fees. – Within the period for
taking an appeal, the appellant shall pay to the clerk of court which rendered
the judgment or final order appealed from, the full amount of the appellate
court docket and other lawful fees. Proof of payment of said fees shall be
transmitted to the appellate court together with the original record or the record
on appeal. (Emphases supplied)
In Gonzales v. Pe,38 the Court’s explanation anent the requirement of full
payment of docket and other lawful fees under the above-quoted provision was
iterated, viz:
In Far Corporation v. Magdaluyo, as with other subsequent cases of the same
ruling, the Court explained that the procedural requirement under Section 4 of
Rule 41 is not merely directory, as the payment of the docket and other legal
fees within the prescribed period is both mandatory and jurisdictional. It bears
stressing that an appeal is not a right, but a mere statutory privilege. An
ordinary appeal from a decision or final order of the RTC to the CA must be
made within 15 days from notice. And within this period, the full amount of the
appellate court docket and other lawful fees must be paid to the clerk of the
court which rendered the judgment or final order appealed from. The
requirement of paying the full amount of the appellate docket fees within the
prescribed period is not a mere technicality of law or procedure. The payment
of docket fees within the prescribed period is mandatory for the perfection of
an appeal. Without such payment, the appeal is not perfected. The appellate
court does not acquire jurisdiction over the subject matter of the action and the
Decision sought to be appealed from becomes final and executory. Further,
under Section 1 (c), Rule 50, an appeal may be dismissed by the CA, on its
own motion or on that of the appellee, on the ground of the non-payment of the
docket and other lawful fees within the reglementary period as provided under
Section 4 of Rule 41. The payment of the full amount of the docket fee is an
indispensable step for the perfection of an appeal. In both original and
appellate cases, the court acquires jurisdiction over the case only upon the
payment of the prescribed docket fees.39
Here, petitioners concede that payment of the full amount of docket fees within
the prescribed period is not a mere technicality of law or procedure but a
jurisdictional requirement. Nevertheless, they want this Court to relax the
application of the rule on the payment of the appeal fee in the name of
substantial justice and equity.
The Court is not persuaded.
The liberality which petitioners pray for has already been granted to them by
the CA at the outset. It may be recalled that while petitioners paid a substantial
part of the docket fees, they still failed to pay the full amount thereof since their
payment was short of ₱30.00.Based on the premise that the questioned
Decision of the RTC has already become final and executory due to non-
perfection, the CA could have dismissed the appeal outright. But owing to the
fact that only the meager amount of ₱30.00 was lacking and considering that
the CA may opt not to proceed with the case until the docket fees are paid,40 it
still required petitioners, even if it was already beyond the reglementary period,
to complete their payment of the appeal fee within 10 days from notice.
Clearly, the CA acted conformably with the pronouncement made in
Camposagrado, a case cited by petitioners, that "[a] party’s failure to pay the
appellate docket fee within the reglementary period confers only a
discretionary and not a mandatory power to dismiss the proposed appeal.
Such discretionary power should be used in the exercise of the court’s sound
judgment in accordance with the tenets of justice and fair play with great deal
of circumspection, considering all attendant circumstances and must be
exercised wisely and prudently, never capriciously, with a view to substantial
justice."41
The CA’s leniency over petitioners’ cause did not end there. Although they
were given only 10 days to remit the ₱30.00 deficiency, the said court allowed
an even longer period of nine months to lapse, apparently in the hope that
petitioners’ compliance would be on its way. But as no payment was remitted,
it was constrained to finally dismiss the appeal for non-perfection. Surprisingly,
petitioners were again heard of when they filed a Motion for Reconsideration to
which they attached a postal money order of ₱30.00. Nevertheless, they did
not offer any plausible explanation either as to why they, at the start, failed to
pay the correct docket fees or why they failed to comply with the CA’s directive
for them to remit the ₱30.00-deficiency. Instead, they focused on begging the
CA for leniency, arguing that the meager amount of the deficiency involved
justifies relaxation of the rules. What is worse is that even if the CA already
took note of the lack of such explanation in its Resolution denying petitioners’
motion for reconsideration, petitioners, up to now, have not attempted to tender
one in this Petition and instead continue to capitalize on substantial justice, fair
play and equity to secure a reversal of the dismissal of their appeal. The Court
cannot, therefore, help but conclude that there is really no plausible reason
behind the said omission.
Suffice it to say that "[c]oncomitant to the liberal interpretation of the rules of
procedure should be an effort on the part of the party invoking liberality to
adequately explain his failure to abide by the rules."42 Those who seek
exemption from the application of the rule have the burden of proving the
existence of exceptionally meritorious reason warranting such
departure.43 Petitioners’ failure to advance any explanation as to why they
failed to pay the correct docket fees or to complete payment of the same within
the period allowed by the CA is thus fatal to their cause. Hence, a departure
from the rule on the payment of the appeal fee is unwarranted. Neither do the
cases cited by petitioners help because they are not in point. Unlike in this
case, the CA in Camposagrado no longer required the petitioners therein to
complete the payment of the appeal fee by remitting the ₱5.00 deficiency but
just dismissed the appeal outright. Moreover, a justifiable reason for the
insufficient payment was tendered by petitioners in the said case, i.e., that they
relied on the assessment made by the collection officer of the court and
honestly believed that the amount collected from them was that which is
mandated by the Rules. 1âwphi1
The same thing goes true with Gutierrez. In fact, the pronouncement made in
Sun Insurance Office, Ltd. v. Asuncion,44 as cited in Gutierrez, even militates
against petitioners. It was reiterated therein that the rule that "a court acquires MARIANO C. DEL CASTILLO
jurisdiction over any case only upon payment of the prescribed docket fees Associate Justice
does not apply where the party does not deliberately intend to defraud the
court in payment of docket fees, and manifests its willingness to abide by the WE CONCUR:
rules by paying additional docket fees when required by the court."45 As may be
recalled, petitioners in this case did not immediately remit the deficient amount
of ₱30.00 when required by the CA and only did so after the lapse of more
than nine months when their appeal was already dismissed.

The Court need not belabor the issue

of the retroactive application of Section 6
of RA 9406.

"The purpose of a reply is to deny or allege facts in denial of new matters

alleged by way of defense in the answer,"46 or in this case, in the comment to
the petition. "It is not the office or function of a reply to set up or introduce a
new [issue] or to amend or amplify the [Petition]."47 The issue of whether
Section 6 of RA 9406 should be given retroactive application in order to
exempt petitioners from payment of docket fees was therefore improperly
introduced in petitioners’ Reply. Moreover, "[t]he rule in pleadings and practice
is that no new issue in a case can be raised in a pleading which by due
diligence could have been raised in previous pleadings."48 Here, petitioners at
the outset could have very well raised the said issue in the Petition since at the
time of its filing on June 7, 2007, RA 9406 was already in effect.49 However,
they failed to do so. Besides, for this Court to take cognizance of the same is
to offend the basic rules of fair play, justice and due process since SLI had no
chance to propound its argument in connection thereto. This is because even if
it wanted to, SLI could not anymore do so in its Memorandum as no new
issues or arguments may be raised in the said pleading, it being only the
summation of the parties’ previous pleadings.50 For these reasons, the Court
sees no need to belabor the issue of the retroactive application of Section 6 of
RA 9406.

All told, the Court finds the CA’s dismissal of the appeal interposed by
petitioners in order.

WHEREFORE, the Petition for Review on Certiorari is DENIED. The assailed

Resolutions dated December 20, 2006 and March 30, 2007 of the Court of
Appeals in CA-G.R. CV No. 85215 are AFFIRMED.

SO ORDERED.
 Rm. 14, J.S. Building
Lacson-Galo Sts., Bacolod City
IBP O.R. No. 731938 11/24/08
PTR NO. 0223568 1/5/09
ROLL NO. 20865
MCLENO. 001597010 (Emphasis supplied)

EN BANC There appears to have been conflicts between Wilson Uy and the other heirs of Jose
Uy.11 In the course of the proceedings, Wilson Uy prayed that a subpoena ad
A.C. NO. 10525, September 01, 2015 testificandum be issued to Magdalena Uy as she was alleged to have been the
treasurer of several businesses owned by Jose Uy.12 In its Order13dated April 20,
2010, the Regional Trial Court granted Wilson Uy's Motion that a Subpoena ad
INTESTATE ESTATE OF JOSE UY, HEREIN REPRESENTED BY ITS
Testificandum be issued to Magdalena Uy.
ADMINISTRATOR WILSON UY, Complainant, v. ATTY. PACIFICO M. MAGHARI
III, Respondent.
Thereafter, Magdalena Uy, through Maghari, her counsel, filed a Motion to Quash
Subpoena ad Testificandum with Alternative Motion to Cite the Appearance of Johnny
RESOLUTION K.H. Uy.14 In signing this Motion, Maghari indicated the following details:

LEONEN, J.: PACIFICO M. MAGHARI, III

Counsel for Magdalena Uy
590 Ylac St., Villamonte
This resolves a Complaint1 for disbarment directly filed before this court by
Bacolod City
complainant Wilson Uy, the designated administrator of the estate of Jose Uy. This
IBP O.R. No. 731938 11/24/08 B.C.
Complaint charges respondent Atty. Pacifico M. Maghari, III (Maghari) with engaging
PTR NO. 0223568 1/5/09 B.C.
in deceitful conduct and violating the Lawyer's Oath. Specifically, Maghari is charged
ROLL NO. 20865
with the use of information that is false and/or appropriated from other lawyers in
MCLECompl. 0015970 1/14/0915 (Emphasis supplied)
signing certain pleadings.2

On February 18, 1997, Lilia Hofileña (Hofileña) filed a Petition before the Bacolod On November 9, 2010, Wilson Uy filed his Opposition to Magdalena Uy's Motion to
City Regional Trial Court praying that she be designated administratrix of the estate Quash.16
of her common-law partner, the deceased Jose Uy. This was docketed as Spec. Proc.
No. 97-241.3 Magdalena Uy, through Maghari, filed her Reply17 to Wilson Uy's Opposition. This
Reply was dated December 8, 2010. In signing this Reply, Maghari indicated the
Hofileña was initially designated administratrix.4 However, a Motion for following details:
Reconsideration of the Order designating Hofileña as administratix was filed by
Wilson Uy, one of Jose Uy's children, on behalf of Jose Uy's spouse and other PACIFICO M. MAGHARI, III
children.5 In its Order6 dated June 9, 1998, the Regional Trial Court designated Counsel for Magdalena Uy
Wilson Uy as administrator of Jose Uy's estate. 590 Ylac St., Villamonte
Bacolod City
Subsequently, Hofileña's claims in the settlement of Jose Uy's estate were IBP O.R. No. 766304 11/27/09 B.C.
granted.7 Hence, she filed a Motion for Execution8 dated September 14, 2007. PTR NO. 3793872 1/4/10 B.C.
ROLL NO. 20865
In Spec. Proc No. 97-241 and in other proceedings arising from the conflicting claims MCLE Compl. 0015970 1/14/0918 (Emphasis supplied)
to Jose Uy's estate, Hofileña was represented by her counsel, Atty. Mariano L. Natu-
El (Atty. Natu-el). In a pleading filed in the course of these proceedings (i.e., in the
Comment dated May 27, 2009 filed before the Court of Appeals9), Atty. Natu-El The Regional Trial Court subsequently denied Magdalena Uy's Motion to
indicated the following details: Quash.19 Thereafter, Maghari filed for Magdalena Uy a Motion for
Reconsideration20 dated July 15, 2011. In signing this Motion, Maghari indicated the
following details:
MARIANO L. NATU-EL
Counsel for Private-Respondent
PACIFICO M. MAGHARI, III For resolution are the issues of whether respondent Atty. Pacifico M. Maghari, III
Counsel for Magdalena Uy engaged in unethical conduct and of what proper penalty may be meted on him.
590 Ylac St., Villamonte
Bacolod City I
IBP O.R. No. 815530 1/4/11 B.C.
PTR NO. 4190929 1/4/11 B.C. Respondent does not deny the existence of the errant entries indicated by
ROLL NO. 20865 complainant. However, he insists that he did not incur disciplinary liability. He claims
MCLE Compl. IH-0000762 1/14/0921(Emphasis supplied) that these entries were mere overlooked errors:

As the Motion for Reconsideration was denied,22 Maghari filed for Magdalena Uy a For true indeed that after the draft of a particular motion or pleading had been
Motion to Recall Subpoena ad Testificandum23 dated March 8, 2012. In signing this printed and ready for signature, all what [sic] he did after cursorily going over it was
Motion, Maghari indicated the following details: to affix his signature thereon, specifically, atop his printed name, without giving any
special or particular attention to details as the "IBP, PTR, and MCLE Numbers",
PACIFICO M. MAGHARI, III considering that these are matters of record and are easily verifiable, thus he gains
Counsel for Magdalena Uy nothing by "the usurpation of professional details of another lawyer" and has no
590 Ylac St., Villamonte sinister motive or ill-purpose in so doing[.]32
Bacolod City
IBP O.R. No. 848630 12/27/11 B.C. He attempts to diminish the significance of the dubious entries and instead ascribes
PTR NO. 4631737 1/2/12 B.C. ill motive to complainant. He faults complainant for "nitpicking"33 and calls him a
ROLL NO. 44869 "sore loser"34 and a "disgruntled litigant"35 who is merely "making a mountain out of
MCLE Compl. III-0000762 1/14/0924 (Emphasis supplied) a molehill"36 and is predisposed to "fault-finding."

At this point, Wilson Uy's counsel noticed that based on the details indicated in the He adds that "for the satisfaction of complainant,"37 he has provided what are
March 8, 2012 Motion, Maghari appeared to have only recently passed the bar supposedly his correct professional details:
examinations. This prompted Wilson Uy to check the records of Spec. Proc No. 97-
241. Upon doing so, he learned that since 2010, Maghari had been changing the 2009
professional details indicated in the pleadings he has signed and has been copying
the professional details of Atty. Natu-El.25
cralawred
IBP OR No. 765868 - Dec. 22, 2008 - Bacolod City
PTR No. 3408746 - Jan. 5, 2009 -Bacolod City
Wilson Uy then filed a Motion26 to declare Magdalena Uy in indirect contempt (as by MCLE Compl. II-0012507 - Jan. 14, 2009 and
then she had still not complied with the Subpoena ad Testificandum) and to require III-0000762-Jan. 14, 2009
Maghari to explain why he had been usurping the professional details of another
lawyer. 2010

In its Order27 dated February 16, 2012, the Regional Trial Court declined from citing IBP OR No. 766304 - Dec. 9, 2009 - Bacolod City
Magdalena Uy in contempt as no verified petition asking that she be so cited had PTR No. 3793872 - Jan. 4, 2010 -Bacolod City
been filed.28 MCLE Compl. II-0012507 - Jan. 14, 2009 and
III-0000762 - Jan. 14, 2009
On July 31, 2014, Wilson Uy filed before this court the present Complaint for
disbarment.29 Pointing to Maghari's act of repeatedly a changing and using another 2011
lawyer's professional details, Wilson Uy asserts that Maghari violated the Lawyer's
Oath and acted in a deceitful manner. IBP OR No. 815530 -Jan. 4, 2011 -Bacolod City
PTRNo. 4190929 - Jan. 4, 2011 - Bacolod City
In the Resolution30 dated November 12, 2014, this court directed Maghari to file his MCLE Compl. III-0000762 - Jan. 14, 2009
Comment on Wilson Uy's Complaint.
2012
This court, through the Office of the Bar Confidant, received Maghari's Comment31 on
March 2, 2015. IBP OR No. 848630-Dec. 27, 2011 - Bacolod City
PTR No. 4631737 - Jan. 2, 2012 -Bacolod City
MCLE Compl. III-0000762 - Jan. 14, 200938 ChanRoblesVi rt ualawlib ra ry
II
Respondent's avowals, protestations, and ad hominem attacks on complainant fail to
impress.
The duplicitous entries speak for themselves. The errors are manifest and
respondent admits their existence. This court would perhaps be well counseled to
absolve respondent of liability or let him get away with a proverbial slap on the wrist
if all that was involved were a typographical error, or otherwise, an error or a
handful of errors made in an isolated instance or a few isolated instances. So too, if
the error pertained to only ' one of the several pieces of information that lawyers are
required to indicate when signing pleadings.
None of these can be said of this case. Respondent did not merely commit errors in
good faith. The truth is far from it. First, respondent violated clear legal
requirements, and indicated patently false information. Second, the way he did so
demonstrates that he did so knowingly. Third, he did so repeatedly. Before our eyes
is a pattern of deceit. Fourth, the information he used was shown to have been
appropriated from another lawyer. Not only was he deceitful; he was also larcenous.
Fifth, his act not only of usurping another lawyer's details but also of his repeatedly
changing information from one pleading to another demonstrates the intent to mock
and ridicule courts and legal processes. Respondent toyed with the standards of
legal practice.
Rule 138, Section 27 of the Rules of Court provides for deceit as a ground for
disbarment. The Lawyer's Oath entails commitment to, among others, obeying laws
and legal orders, doing no falsehood, conducting one's self as a lawyer to the best of
one's capacity, and acting with fidelity to both court and client:
I, do solemnly swear that I will maintain allegiance to the Republic of the Philippines,
I will support the Constitution and obey the laws as well as the legal orders of the
duly constituted authorities therein; I will do no falsehood, nor consent to the doing
of any in court; I will not wittingly or willingly promote or sue any groundless, false
or unlawful suit, or give aid nor consent to the same; I will delay no man for money
or malice, and will conduct myself as a lawyer according to the best of my knowledge
and discretion, with all good fidelity as well to the courts as to my clients; and I
impose upon myself these voluntary obligations without any mental reservation or
purpose of evasion. So help me God.
No amount of feigned ignorance and ad hominem attacks on complainant can negate
the gravity of respondent's actions. His insolent and mocking violation of statutory
and regulatory requirements is a violation of his duties to society and to courts. His
swiping of another lawyer's information is a violation of his duties to the legal
profession. The unnecessary risks that he foiled on his client as a possible result of
deficiently signed pleadings violate his duties to his client. Thus, respondent did not
only act in a deceitful manner and violate the solemn oath he took to be admitted
into the legal profession; he also violated every single chapter of the Code of
Professional Responsibility.
It is as clear as the entries themselves that respondent acted in a manner that is
woefully unworthy of an officer of the court. He was not even a good citizen. As
respondent has fallen short of the ethical standards apropos to members of the legal
profession, we find it proper to suspend respondent from the practice of law for two
(2) years.
III
The requirement of a counsel's signature in pleadings, the significance of this
requirement, and the consequences of non-compliance are spelled out in Rule 7,
Section 3 of the Rules of Court:
Section 3. Signature and address. — Every pleading must be signed by the party or
counsel representing him, stating in either case his address which should not be a
post office box.
The signature of counsel constitutes a certificate by him that he has read the
pleading; that to the best of his knowledge, information, and belief there is good
ground to support it; and that it is not interposed for delay.
An unsigned pleading produces no legal effect. However, the court may, in its
discretion, allow such deficiency to be remedied if it shall appear that the same was
due to mere inadvertence and not intended for delay. Counsel who deliberately files
an unsigned pleading, or signs a pleading in violation of this Rule, or alleges
scandalous or indecent matter therein, or fails promptly report to the court a change
of his address, shall be subject to appropriate disciplinary action. (Emphasis
supplied)
A counsel's signature on a pleading is neither an empty formality nor even a mere
means for identification. Through his or her signature, a party's counsel makes a
positive declaration. In certifying through his or her signature that he or she has
read the pleading, that there is ground to support it, and that it is not interposed for
delay, a lawyer asserts his or her competence, credibility, and ethics. Signing a
pleading is such a solemn component of legal practice that this court has taken
occasion to decry the delegation of this task to non-lawyers as a violation of the
Code of Professional Responsibility:
The signature of counsel constitutes an assurance by him that he has read the
pleading; that, to the best of his knowledge, information and belief, there is a good
ground to support it; and that it is not interposed for delay. Under the Rules of
Court, it is counsel alone, by affixing his signature, who can certify to these matters.
The preparation and signing of a pleading constitute legal work involving practice of
law which is reserved exclusively for the members of the legal profession. Counsel
may delegate the signing of a pleading to another lawyer but cannot do so in favor of
one who is not. The Code of Professional Responsibility provides: c hanRoble svirtual Lawli bra ry
Rule 9.01 — A lawyer shall not delegate to any unqualified person the performance
of any task which by law may only be performed by a member of the Bar in good
standing.ChanRoblesVi rt ualawlib ra ry
Moreover, a signature by agents of a lawyer amounts to signing by unqualified
persons, something the law strongly proscribes.39 (Citations omitted)
A counsel's signature is such an integral part of a pleading that failure to comply with
this requirement reduces a pleading to a mere scrap of paper totally bereft of legal
effect. Thus, faithful compliance with this requirement is not only a matter of
satisfying a duty to a court but is as much a matter of fidelity to one's client. A
deficiency in this respect can be fatal to a client's cause.
Apart from the signature itself, additional information is required to be indicated as
part of a counsel's signature:
(1)Per Rule 7, Section 3 of the Rules of Court, a counsel's
address must be stated;
(2)In Bar Matter No. 1132,40 this court required all lawyers
to indicate their Roll of Attorneys number;
(3)In Bar Matter No. 287,41 this court required the inclusion
of the "number and date of their official receipt indicating
payment of their annual membership dues to the
Integrated Bar of the Philippines for the current year"; in
lieu of this, a lawyer may indicate his or her lifetime
membership number;
(4)In accordance with Section 139 of the Local Government
Code,42 a lawyer must indicate his professional tax
receipt number;
(5)Bar Matter No. 192243 required the inclusion of a
counsel's Mandatory Continuing Legal Education
Certificate of Compliance or Certificate of Exemption;
and
(6)This court's Resolution in A.M. No. 07-6-5-SC44 required
the inclusion of a counsel's contact details.
As with the signature itself, these requirements are not vain formalities.
The inclusion of a counsel's Roll of Attorneys number, professional tax receipt
number, and Integrated Bar of the Philippines (IBP) receipt (or lifetime membership)
number is intended to preserve and protect the integrity of legal practice. They seek
to ensure that only those who have satisfied the requisites for legal practice are able
to engage in it. With the Roll of Attorneys number, parties can readily verify if a
person purporting to be a lawyer has, in fact, been admitted to the Philippine
bar.45 With the professional tax receipt number, they can verify if the same person is
qualified to engage in a profession in the place where he or she principally discharges
his or her functions. With the IBP receipt number, they can ascertain if the same
person remains in good standing as a lawyer. These pieces of information, in the
words of Galicto v. Aquino III, "protect the public from bogus lawyers."46 Paying
professional taxes (and the receipt that proves this payment) is likewise compliance
with a revenue mechanism that has been statutorily devolved to local government
units.
The inclusion of information regarding compliance with (or exemption from)
Mandatory Continuing Legal Education (MCLE) seeks to ensure that legal practice is
reserved only for those who have complied with the recognized mechanism for
"keep[ing] abreast with law and jurisprudence, maintaining] the ethics of the
profession[,] and enhancing] the standards of the practice of law."47
Lastly, the inclusion of a counsel's address and contact details is designed to
facilitate the dispensation of justice. These pieces of information aid in the service of
court processes, enhance compliance with the requisites of due process, and
facilitate better representation of a client's cause. In Juane v. Garcia,48this court took
occasion to expound on the significance of putting on record a counsel's address:
The time has come, we believe, for this Court to remind the members of the Bar that
it is their inescapable duty to make of record their correct address in all cases in
which they are counsel for a suitor. For, instances there have been in the past when,
because of failure to inform the court of the change of address, litigations were
delayed. And this, not to speak of inconvenience caused the other parties and the
court. Worse still, litigants have lost their cases in court because of such negligence
on the part of their counsel. It is painful enough for a litigant to surfer a setback in a
legal battle. It is doubly painful if defeat is occasioned by his attorney's failure to
receive notice because the latter has changed the place of his law office without
giving the proper notice therefor. It is only when some such situation comes about
that the negligent lawyer comes to realize the grave responsibility that he has
incurred both to his client and to the cause of justice. It is then that the lawyer is
reminded that in his oath of office he solemnly declared that he "will conduct"
himself "as a lawyer according to the best of his knowledge and discretion." Too late.
Experience indeed is a good teacher. To a lawyer, though, it could prove very
expensive.49
These requirements are not mere frivolities. They are not mere markings on a piece
of paper. To willfully disregard them is, thus, to willfully disregard mechanisms put in
place to facilitate integrity, competence, and credibility in legal practice; it is to
betray apathy for the ideals of the legal profession and demonstrates how one is
wanting of the standards for admission to and continuing inclusion in the bar. Worse,
to not only willfully disregard them but to feign compliance only, in truth, to make a
mockery of them reveals a dire, wretched, and utter lack of respect for the
profession that one brandishes.
IV
 was supposedly his correct IBP official receipt number and professional tax receipt
We underscore several facts. These demonstrate that respondent acted in manifest number. However, he still used Atty. Natu-el's Roll of Attorneys number:
bad faith, thereby exhibiting a pattern of insubordination, dishonesty, deceit, and
intent to make a mockery of courts and legal processes. PACIFICO M. MAGHARI, III
Counsel for Magdalena Uy
In signing the Motion to Quash Subpoena ad Testificandum with Altenative Motion to 590 Ylac St., Villamonte
Cite the Appearance of Johnny K.H. Uy, respondent appropriated four of the five Bacolod City
details (i.e., IBP official receipt number, professional tax receipt number, Roll of IBP O.R. No. 815530 1/4/11 B.C.
Attorneys number, and MCLE compliance number) that Atty. Natu-el indicated in the PTR NO. 4190929 1/4/11 B.C.
Comment dated May 27, 2009, which the latter signed and filed before the Court of ROLL NO. 20865
Appeals. Atty. Natu-el's details are reproduced as follows: MCLE Compl. III-0000762 1/14/09 53
(Emphasis supplied)

MARIANO L. NATU-EL
It was only in signing the Motion to Recall Subpoena ad Testificandum54 dated March
Counsel for Private-Respondent
8, 2012, that all the professional details that respondent indicated are supposedly his
Rm. 14, J.S. Building
own:
Lacson-Galo Sts., Bacolod City
IBP O.R. No. 731938 11/24/08
PTR NO. 0223568 1/5/09 PACIFICO M. MAGHARI, III
ROLL NO. 20865 Counsel for Magdalena Uy
MCLENO. 001597050 [Emphasis supplied] 590 Ylac St., Villamonte
Bacolod City
ChanRo bles Vi rtualaw lib rary

IBP O.R. No. 848630 12/27/11 B.C.

The details that respondent indicated are reproduced as follows: PTR NO. 4631737 1/2/12 B. C.
ROLL NO. 44869
PACIFICO M. MAGHARI, III MCLE Compl. 111-0000762 1/14/09 (Emphasis supplied)
Counsel for Magdalena Uy
590 Ylac St., Villamonte
Respondent acted deliberately. It is impossible that the erroneous details he
Bacolod City
indicated on his pleadings are products of mere inadvertence.
IBPO.R. No. 731938 11/24/08 B.C.
PTR NO. 0223568 1/5/09 B.C.
To begin with, details were copied from a pleading submitted by another lawyer.
ROLL NO. 20865
These details somehow found their way into respondent's own pleadings. Certainly,
MCLE Compl. 00159701/14/0951 (Emphasis supplied)
these details could not have written themselves, let alone transfer themselves from a
pleading prepared by one lawyer to those prepared by another. Someone must have
In signing the Reply dated December 8, 2010, respondent used what was supposedly actually performed the act of copying and transferring; that is, someone must
his correct IBP official receipt number and professional tax receipt number: have intended to copy and transfer them. Moreover, the person responsible for this
could have only been respondent or someone acting under his instructions; the
PACIFICO M. MAGHARI, III pleadings on which they were transferred are, after all, respondent's pleadings.
Counsel for Magdalena Uy
590 Ylac St., Villamonte Second, these details were not merely copied, they were modified. "B.C." was added
Bacolod City to the IBP official receipt and professional tax receipt numbers copied from Atty.
IBP O.R. No. 766304 11/27/09 B.C. Natu-el. The facts of modification and addition show active human intervention to
PTR NO. 3793872 1/4/10 B.C. make something more out of markings that could otherwise have simply been
ROLL NO. 20865 reproduced.
MCLE Compl. 00159701/14/0952 (Emphasis supplied)
Third, in subsequent pleadings, some details copied from Atty. Natu-el were
discarded while some were retained. The December 8, 2010 Reply still bore Atty.
The same pleading, however, still bore Atty. Natu-el's Roll of Attorneys number and Natu-el's Roll of Attorneys number and MCLE compliance number, but no longer his
MCLE compliance number, which respondent previously appropriated for himself. IBP official receipt number and professional tax receipt number. The July 15, 2011
Motion for Reconsideration only bore Atty. Natu-el's MCLE compliance number.
In signing the Motion for Reconsideration dated July 15, 2011, respondent used what This gradual act of segregating information—discarding some while retaining others,
and retaining less over time—reveals that the author of these markings must have
engaged in a willful exercise that filtered those that were to be discarded from those
that were to be retained.
Respondent is rightly considered the author of these acts. Any claim that the error
was committed by a secretary is inconsequential. As this court has stated
in Gutierrez v. Zulueta:55
The explanation given by the respondent lawyer to the effect that the failure is
attributable to the negligence of his secretary is devoid of merit. A responsible
lawyer is expected to supervise the work in his office with respect to all the pleadings
to be filed in court and he should not delegate this responsibility, lock, stock and
barrel, to his office secretary. If it were otherwise, irresponsible members of the
legal profession can avoid appropriate disciplinary action by simply disavowing
liability and attributing the problem to the fault or negligence of the office secretary.
Such situation will not be countenanced by this Court.56
V grave consequence of non-compliance notwithstanding, respondent (by his own
In the first place, it is doubtful that respondent has complied with the requirements
of paying his dues to the Integrated Bar of the Philippines, paying his annual
professional tax, and completing the necessary units for Mandatory Continuing Legal
Education in the periods concerned. To put it plainly, there would be no need for him
to use incorrect information if he had complied with all pertinent regulations.
In his Comment, respondent provided what are supposedly his correct professional
details. We emphasize, however, that he failed to attach to his Comment copies of
the pertinent official receipts, certifications, and other supporting documents. All that
he relies on is a self-serving recital of numbers and dates. None but respondent,
himself, was in a better position to produce the documents that could prove his
claims. His failure to do so is, at the very least, suspicious. It can very well mean
that they do not exist, or that he willfully desisted from producing them. The latter
would be more damaging to respondent, as it calls into operation the basic
presumption "[t]hat evidence willfully suppressed would be adverse if produced."57
Even assuming that the details provided by respondent in his Comment are correct,
it still remains that he (1) used a false IBP official receipt number, professional tax
receipt number, Roll of Attorneys number, and MCLE compliance number a total of
seven (7) times; and (2) used another lawyer's details seven (7) times.
In failing to accurately state his professional details, respondent already committed
punishable violations. An isolated inaccuracy, regardless of the concerned lawyer's
lack of bad faith, already merits a penalty of relative severity. In Bumactao v.
Fano,58 respondent Atty. Restito F. Fano was suspended from the practice of law for
the singular violation of indicating wrong MCLE compliance details:
Here, it is established that respondent Atty. Restito F. Fano falsely indicated "MCLE
Compliance No. III-0018308". . . . . The admitted falsity notwithstanding,
respondent endeavors to douse his culpability by shifting the blame to the MCLE
providers - PLM and IBP Quezon City Chapter — and insisting that he acted in good
faith. He likewise attributes the indication of "MCLE Compliance No. III-0018308" to
his secretary / liaison, an "honest mistake . . . because of the pressure of his many
duties."
We are not impressed.
Bar Matter No. 1922, dated June 3, 2008, requires "practicing members of the bar to
indicate in all pleadings filed before the courts or quasi-judicial bodies, the number
and date of issue of their MCLE Certificate of Compliance or Certificate of Exemption,
as may be applicable. . . ." It further provides that "[f]ailure to disclose the required
information would cause the dismissal of the case and the expunction of the
pleadings from the records."
At the very least, respondent was negligent in failing to monitor his own MCLE
compliance. This is a sort of negligence that is hardly excusable. As a member of the
legal profession, respondent ought to have known that non-compliance would have
resulted in the rendering inutile of any pleading he may file before any tribunal. The
account) admits to having complacently relied on the statements of MCLE providers.
His negligence, therefore risked harm not only upon himself - he being now
burdened with the present complaint as a direct consequence - but worse, upon his
clients, the reliefs they seek through their pleadings being possibly rendered
inoperative.59
This court has never shied away from disciplining lawyers who have willfully engaged
in acts of deceit and falsehood.
In Flores v. Chua,60 respondent Atty. Enrique S. Chua was disbarred on this court's
finding of "a habit, attitude, and mindset not only to abuse one's legal knowledge or
training, but also to deliberately defy or ignore known virtues and values which the
legal profession demands from its members."61 Atty. Enrique S. Chua was found to
have notarized a document that he knew to have been falsified so as to make it
appear that a person had personally appeared before him; this was part of a bigger
design to defraud another.
In Nunga v. Viray,62 respondent Atty. Venancio Viray was suspended from the
practice of law for three (3) years after having been found to have notarized a
document despite the lapse of his commission as a notary public.
In Benguet Electric Cooperative v. Flores,63 respondent Atty. Ernesto B. Flores was
suspended from the practice of law for two (2) years after being found to have
falsely stated that he did not pursue an appeal so as to absolve himself of the charge
of forum shopping when, in fact, he had perfected an appeal.
Here, respondent violated Bar Matter No. 287, Section 139(e) of the Local
Government Code, Bar Matter No. 1132, and Bar Matter No. 1922, a total of seven
(7) times. The sheer multiplicity of instances belies any claim that we are only
dealing with isolated errors. Regardless whether isolated or manifold, these
inaccuracies alone already warrant disciplinary sanctions. However, as shall be
discussed, respondent also acted with dishonest, deceitful, and even larcenous
intent.
Respondent is not only accountable for inaccuracies. This case is far from being a
matter of clerical errors. He willfully used false information. In so doing, he misled
courts, litigants—his own client included— professional colleagues, and all others
who may have relied on the records and documents on which these false details
appear.
Respondent's act of filing pleadings that he fully knew to contain false information is
a mockery of courts, chief of which is this court, considering that this court is the
author of all but one of the regulations that respondent violated. It is this court that
requires respondent to indicate his Roll of Attorneys number, IBP official receipt
number, and MCLE compliance number.
Having also violated a requirement spelled out in the Local Government Code,
respondent similarly made a mockery of an act of the legislature.
Respondent's profligacy does not stop here. He also appropriated for himself another
lawyer's professional details in seven (7) separate instances.
In seven distinct instances, respondent is accountable for three constituent acts of
larceny, taking, use, and profiting.
Seven times, respondent took for himself professional details that belonged to
another. In these seven instances, he used the same swiped details in his own
pleadings. So too, in these seven instances he personally benefited. In these
instances, respondent succeeded in making it appear that he filed valid pleadings
and avoided the fatal consequences of a deficiently signed pleading. He was able to
pursue reliefs in court and carry on litigation that could have been terminated as
soon as his deficient pleadings were recognized.
All these instances of falsity, dishonesty, and professional larceny are similarly acts
of deceit. In using false information taken from another, respondent misled courts,
parties, and colleagues into believing that he was faithfully, truthfully, and decently
discharging his functions.
Respondent's acts reek of malicious intent to deceive courts. He was not only
insubordinate and disobedient of regulations; he was also dishonest, deceitful and
duplicitous. Worse, he was mocking and contemptuous.
VI
The totality of respondent's actions demonstrates a degree of gravity that warrants
suspension from the practice of law for an extended period.
This case involves anything but trivial non-compliance. It is much graver. The
confluence of: (1) respondent's many violations; (2) the sheer multiplicity of rules
violated; (3) the frequency—nay, pattern—of falsity and deceit; and (4) his manifest
intent to bring courts, legal processes, and professional standards to disrepute brings
to light a degree of depravity that proves respondent worthy of being sanctioned.
Having flagrantly disobeyed, deceived, and ridiculed courts, respondent rightly
stands to be at the receiving end of disciplinary action.
Respondent's circumstances are well within the grounds for disciplining lawyers as
specified by Rule 138, Section 27 of the Rules of Court. His deception is well
demonstrated. He ran afoul of every single word, save perhaps his name, in the
Lawyer's Oath. Then again, it was his own signature, his own name, that respondent
Pacifico M. Maghari, III had disgraced.
Respondent's acts also demonstrate a violation of every single chapter of the Code of
Professional Responsibility.
Canon 1 of the Code of Professional Responsibility pronounces a lawyer's foremost
duty "to uphold the constitution, obey the laws of the land V and promote respect
for law and legal processes" Rule 1.01 of the same Code requires lawyers to "not
engage in unlawful, dishonest, immoral or deceitful conduct."
Per Canon 10 of the Code of Professional Responsibility, "[a] lawyer owes candor,
fairness and good faith to the court" Rule 10.01 requires lawyers to "not do any
falsehood . . . or allow the court to be misled by any artifice." Rule 10.03 imposes
upon lawyers the duty of faithfully "observ[ing] the rules of procedure [and] not
misusing] them to defeat the ends of justice." Canon 11 exhorts lawyers to "observe
and maintain the respect due to the courts."
Respondent did not merely violate a statute and the many issuances of this court as
regards the information that members of the bar must indicate when they sign
pleadings. He did so in a manner that betrays intent to make a mockery of courts,
legal processes, and professional standards. By his actions, respondent ridiculed and
toyed with the requirements imposed by statute and by this court. He trampled upon
professional standards established not only by this court, in its capacity as overseer
of the legal profession, but by the Republic itself, through a duly enacted statute. In
so doing, he violated his duty to society and to the courts.
Canon 8 of the Code of Professional Responsibility requires a lawyer to "conduct
himself with courtesy, fairness and candor toward his professional colleagues."
In appropriating information pertaining to his opposing counsel, respondent did not
only fail to observe common courtesy. He encroached upon matters that, ultimately,
are personal to another. This encroachment is, therefore, not only an act of trickery;
it is also act of larceny. In so doing, he violated his duty to the legal profession.
Canon 17 of the Code of Professional Responsibility imposes upon a lawyer "fidelity
to the cause of his client," while Canon 18 requires a lawyer to "serve his client with
competence and diligence."
In using false information in his pleadings, respondent unnecessarily put his own
client at risk. Deficiencies in how pleadings are signed can be fatal to a party's cause
as unsigned pleadings produce no legal effect. In so doing, respondent violated his
duty to his clients.
It is tempting to think that the only thing respondent did was to deviate from
required formalities. Respondent was, himself, quite dismissive, stating that he did
nothing more than "cursorily [go] over . . . without giving any ... attention to details
. . . that. . . are matters of record and are easily verifiable."64 It is equally tempting
to think it would be excessive of this court to engage in an overly rigid, pedantic
emphasis on formalistic niceties.

However, we have demonstrated that what can otherwise be dismissed as empty

formalities are, in fact, necessary solemnities. They are not ends in themselves but
crucial means to enhance the integrity, competence and credibility of the legal SECOND DIVISION
profession. They are vital to the dispensation of justice. The significance of these
solemnities, along with the legal profession's "high standard of legal proficiency, . . .
morality, honesty, integrity[,] and fair dealing[,]"65 put in contrast with how G.R. No. 149576 August 8, 2006
respondent has fallen dismally and disturbingly short of the high standards that his
profession demands, demonstrates the propriety of momentarily suspending
REPUBLIC OF THE PHILIPPINES, represented by the Land Registration
respondent from engaging in legal practice.
Authority, Petitioner,
It is unsettling that respondent engaged in the mockery and ridicule that he did of vs.
the very same badges—his place in the Roll of Attorneys, his membership in the KENRICK DEVELOPMENT CORPORATION, Respondent.
Integrated Bar, his recognition as a practicing professional, his continuing training
and competence—that are emblematic of his being a lawyer. Seeing as how he
DECISION
manifested such contempt for these badges, we find that there is every reason for
preventing him, at least temporarily, from engaging in the profession these badges
signify. CORONA, J.:
WHEREFORE, respondent Atty. Pacifico M. Maghari, III, having clearly violated his
Lawyer's Oath and the Canons of the Code of Professional Responsibility through his
The Republic of the Philippines assails the May 31, 2001 decision 1 and
unlawful, dishonest, and deceitful conduct, is SUSPENDED from the practice of law August 20, 2001 resolution of the Court of Appeals in CA-G.R. SP No. 52948
for two (2) years, effective upon receipt of a copy of this Resolution. in this petition for review under Rule 45 of the Rules of Court.

Let copies of this Resolution be served on the Office of the Bar Confidant, the
Integrated Bar of the Philippines, and all courts in the country for their information
and guidance. Let a copy of this Resolution be attached to respondent Atty. Pacifico
M. Maghari, III's personal record as attorney.
SO ORDERED. chanroblesvi rtua llawli bra ry
Sereno, C.J., Carpio, Leonardo-De Castro, Brion, Peralta, Bersamin, Del Castillo,
Villarama, Jr., Perez, Mendoza, Perlas-Bernabe, and Jardeleza, JJ., concur.
Velasco, Jr., J., no part. I inhibit due to relation to a party.
Reyes, J., on leave.
This case stemmed from the construction by respondent Kenrick Development
Corporation of a concrete perimeter fence around some parcels of land located
behind the Civil Aviation Training Center of the Air Transportation Office (ATO)
in 1996. As a result, the ATO was dispossessed of some 30,228 square
meters of prime land. Respondent justified its action with a claim of ownership
over the property. It presented Transfer Certificate of Title (TCT) Nos. 135604,
135605 and 135606 issued in its name and which allegedly originated from
TCT No. 17508 registered in the name of one Alfonso Concepcion.
ATO verified the authenticity of respondent’s titles with the Land Registration
Authority (LRA). On May 17, 1996, Atty. Jose Loriega, head of the Land Title
Verification Task Force of the LRA, submitted his report. The Registrar of
Deeds of Pasay City had no record of TCT No. 17508 and its ascendant title,
TCT No. 5450. The land allegedly covered by respondent’s titles was also
found to be within Villamor Air Base (headquarters of the Philippine Air Force)
in Pasay City.
By virtue of the report, the Office of the Solicitor General (OSG), on September
3, 1996, filed a complaint for revocation, annulment and cancellation of
certificates of title in behalf of the Republic of the Philippines (as represented
by the LRA) against respondent and Alfonso Concepcion. It was raffled to
Branch 114 of the Regional Trial Court of Pasay City where it was docketed as
Civil Case No. 96-1144.
On December 5, 1996, respondent filed its answer which was purportedly
signed by Atty. Onofre Garlitos, Jr. as counsel for respondent.
Since Alfonso Concepcion could not be located and served with summons, the
trial court ordered the issuance of an alias summons by publication against him
on February 19, 1997.
The case was thereafter punctuated by various incidents relative to modes of
discovery, pre-trial, postponements or continuances, motions to dismiss,
motions to declare defendants in default and other procedural matters.
During the pendency of the case, the Senate Blue Ribbon Committee and
Committee on Justice and Human Rights conducted a hearing in aid of
legislation on the matter of land registration and titling. In particular, the
legislative investigation looked into the issuance of fake titles and focused on
how respondent was able to acquire TCT Nos. 135604, 135605 and 135606.
During the congressional hearing held on November 26, 1998, one of those
summoned was Atty. Garlitos, respondent’s former counsel. He testified that
he prepared respondent’s answer and transmitted an unsigned draft to
respondent’s president, Mr. Victor Ong. The signature appearing above his
name was not his. He authorized no one to sign in his behalf either. And he did
not know who finally signed it.
With Atty. Garlitos’ revelation, the Republic promptly filed an urgent motion on
December 3, 1998 to declare respondent in default, 2 predicated on its failure
to file a valid answer. The Republic argued that, since the person who signed
the answer was neither authorized by Atty. Garlitos nor even known to him, the
answer was effectively an unsigned pleading. Pursuant to Section 3, Rule 7 of
the Rules of Court, 3 it was a mere scrap of paper and produced no legal
effect.
On February 19, 1999, the trial court issued a resolution granting the
Republic’s motion. 4 It found respondent’s answer to be sham and false and
intended to defeat the purpose of the rules. The trial court ordered the answer
stricken from the records, declared respondent in default and allowed the
Republic to present its evidence ex parte.
The Republic presented its evidence ex parte, after which it rested its case and
formally offered its evidence.
Meanwhile, respondent sought reconsideration of the February 19, 1999
resolution but the trial court denied it.
Aggrieved, respondent elevated the matter to the Court of Appeals via a
petition for certiorari 5 seeking to set aside the February 19, 1999 resolution of
the trial court. Respondent contended that the trial court erred in declaring it in
default for failure to file a valid and timely answer.
On May 31, 2001, the Court of Appeals rendered the assailed decision. It
found Atty. Garlitos’ statements in the legislative hearing to be unreliable since
they were not subjected to cross-examination. The appellate court also
scrutinized Atty. Garlitos’ acts after the filing of the answer 6 and concluded
that he assented to the signing of the answer by somebody in his stead. This
supposedly cured whatever defect the answer may have had. Hence, the
appellate court granted respondent’s petition for certiorari. It directed the lifting
of the order of default against respondent and ordered the trial court to
proceed to trial with dispatch. The Republic moved for reconsideration but it
was denied. Thus, this petition.
Did the Court of Appeals err in reversing the trial court’s order which declared
respondent in default for its failure to file a valid answer? Yes, it did.
A party may, by his words or conduct, voluntarily adopt or ratify another’s
statement. 7 Where it appears that a party clearly and unambiguously assented
to or adopted the statements of another, evidence of those statements is
admissible against him. 8 This is the essence of the principle of adoptive
admission.
An adoptive admission is a party’s reaction to a statement or action by another
person when it is reasonable to treat the party’s reaction as an admission of
something stated or implied by the other person. 9 By adoptive admission, a
third person’s statement becomes the admission of the party embracing or
espousing it. Adoptive admission may occur when a party:
(a) expressly agrees to or concurs in an oral statement made by another; 10
(b) hears a statement and later on essentially repeats it; 11
(c) utters an acceptance or builds upon the assertion of another; 12
(d) replies by way of rebuttal to some specific points raised by another but
ignores further points which he or she has heard the other make 13 or
(e) reads and signs a written statement made by another. 14
Here, respondent accepted the pronouncements of Atty. Garlitos and built its
case on them. At no instance did it ever deny or contradict its former counsel’s
statements. It went to great lengths to explain Atty. Garlitos’ testimony as well
as its implications, as follows:
1. While Atty. Garlitos denied signing the answer, the fact was that the answer
was signed. Hence, the pleading could not be considered invalid for being an
unsigned pleading. The fact that the person who signed it was neither known
to Atty. Garlitos nor specifically authorized by him was immaterial. The
important thing was that the answer bore a signature.
2. While the Rules of Court requires that a pleading must be signed by the
party or his counsel, it does not prohibit a counsel from giving a general
authority for any person to sign the answer for him which was what Atty.
Garlitos did. The person who actually signed the pleading was of no moment
as long as counsel knew that it would be signed by another. This was similar to
addressing an authorization letter "to whom it may concern" such that any
person could act on it even if he or she was not known beforehand.
3. Atty. Garlitos testified that he prepared the answer; he never disowned its
contents and he resumed acting as counsel for respondent subsequent to its
filing. These circumstances show that Atty. Garlitos conformed to or ratified the
signing of the answer by another.
Respondent repeated these statements of Atty. Garlitos in its motion for
reconsideration of the trial court’s February 19, 1999 resolution. And again in
the petition it filed in the Court of Appeals as well as in the comment 15 and
memorandum it submitted to this Court.
Evidently, respondent completely adopted Atty. Garlitos’ statements as its own.
Respondent’s adoptive admission constituted a judicial admission which was
conclusive on it.
Contrary to respondent’s position, a signed pleading is one that is signed either
by the party himself or his counsel. Section 3, Rule 7 is clear on this matter. It
requires that a pleading must be signed by the party or counsel representing
him.
Therefore, only the signature of either the party himself or his counsel operates
to validly convert a pleading from one that is unsigned to one that is signed.
Counsel’s authority and duty to sign a pleading are personal to him. He may
not delegate it to just any person.
The signature of counsel constitutes an assurance by him that he has read the
pleading; that, to the best of his knowledge, information and belief, there is a
good ground to support it; and that it is not interposed for delay. 16Under the
Rules of Court, it is counsel alone, by affixing his signature, who can certify to
these matters.
The preparation and signing of a pleading constitute legal work involving
practice of law which is reserved exclusively for the members of the legal
profession. Counsel may delegate the signing of a pleading to another
lawyer 17 but cannot do so
in favor of one who is not. The Code of Professional Responsibility provides:
Rule 9.01 ― A lawyer shall not delegate to any unqualified person the
performance of any task which by law may only be performed by a member of
the Bar in good standing.
Moreover, a signature by agents of a lawyer amounts to signing by unqualified
persons, 18 something the law strongly proscribes.
Therefore, the blanket authority respondent claims Atty. Garlitos entrusted to
just anyone was void. Any act taken pursuant to that authority was likewise
void. There was no way it could have been cured or ratified by Atty. Garlitos’
subsequent acts.
Moreover, the transcript of the November 26, 1998 Senate hearing shows that
Atty. Garlitos consented to the signing of the answer by another "as long as it
conformed to his draft." We give no value whatsoever to such self-serving
statement.
No doubt, Atty. Garlitos could not have validly given blanket authority for just
anyone to sign the answer. The trial court correctly ruled that respondent’s
answer was invalid and of no legal effect as it was an unsigned pleading.
Respondent was properly declared in default and the Republic was rightly
allowed to present evidence ex parte.
Respondent insists on the liberal application of the rules. It maintains that even
if it were true that its answer was supposedly an unsigned pleading, the defect
was a mere technicality that could be set aside.
of the Regional Trial Court of Pasay City, Branch 114 declaring respondent in
default is hereby REINSTATED.
Let a copy of this decision be furnished the Commission on Bar Discipline of
the Integrated Bar of the Philippines for the commencement of disbarment
proceedings against Atty. Onofre Garlitos, Jr. for his possible unprofessional
conduct not befitting his position as an officer of the court.
SO ORDERED.

Procedural requirements which have often been disparagingly labeled as mere RENATO C. CORONA
technicalities have their own valid raison d’ etre in the orderly administration of Associate Justice
justice. To summarily brush them aside may result in arbitrariness and
injustice. 19 WE CONCUR:

The Court’s pronouncement in Garbo v. Court of Appeals 20 is relevant:

Procedural rules are [tools] designed to facilitate the adjudication of cases.

Courts and litigants alike are thus [enjoined] to abide strictly by the rules. And
while the Court, in some instances, allows a relaxation in the application of the
rules, this, we stress, was never intended to forge a bastion for erring litigants
to violate the rules with impunity. The liberality in the interpretation and Republic of the Philippines
application of the rules applies only in proper cases and under justifiable SUPREME COURT
causes and circumstances. While it is true that litigation is not a game of Manila
technicalities, it is equally true that every case must be prosecuted in
accordance with the prescribed procedure to insure an orderly and speedy B.M. No. 1922 June 3, 2008
administration of justice.
RE. NUMBER AND DATE OF MCLE CERTIFICATE OF
Like all rules, procedural rules should be followed except only when, for the COMPLETION/EXEMPTION REQUIRED IN ALL PLEADINGS/MOTIONS.
most persuasive of reasons, they may be relaxed to relieve a litigant of an
injustice not commensurate with the degree of his thoughtlessness in not
Sirs/Mesdames:
complying with the prescribed procedure. 21 In this case, respondent failed to
show any persuasive reason why it should be exempted from strictly abiding
by the rules. Quoted hereunder, for your information is a resolution of the Court En Banc
dated June 3, 2008
As a final note, the Court cannot close its eyes to the acts committed by Atty.
Garlitos in violation of the ethics of the legal profession. Thus, he should be "Bar Matter No. 1922. – Re: Recommendation of the Mandatory Continuing
made to account for his possible misconduct. Legal Education (MCLE) Board to Indicate in All Pleadings Filed with the
Courts the Counsel’s MCLE Certificate of Compliance or Certificate of
Exemption. – The Court Resolved to NOTE the Letter, dated May 2, 2008, of
WHEREFORE, the petition is hereby GRANTED. The May 31, 2001 decision
and August 20, 2001 resolution of the Court of Appeals in CA-G.R. SP No. Associate Justice Antonio Eduardo B. Nachura, Chairperson, Committee on
52948 are REVERSED and SET ASIDE and the February 19, 1999 resolution
Legal Education and Bar Matters, informing the Court of the diminishing
interest of the members of the Bar in the MCLE requirement program.
The Court further Resolved, upon the recommendation of the Committee on
Legal Education and Bar Matters, to REQUIRE practicing members of the bar
to INDICATE in all pleadings filed before the courts or quasi-judicial bodies,
the number and date of issue of their MCLE Certificate of Compliance or
Certificate of Exemption, as may be applicable, for the immediately preceding
compliance period. Failure to disclose the required information would
cause the dismissal of the case and the expunction of the pleadings from
the records.
The New Rule shall take effect sixty (60) days after its publication in a
newspaper of general circulation." Caprio-Morales Velasco, Jr., Nachura, JJ.,
on official leave. (adv216a)
Very truly yours,
MA. LUISA D. VILLARAMA(sgd)
Clerk of Court
SECOND DIVISION
G.R. No. 204325, April 18, 2016
LYNMAN BACOLOR, JEFFREY R. GALURA, HELEN B. TORRES, FRITZIE C.
VELLEGAS, RAYMOND CANLAS AND ZHEILA C. TORRES,*Petitioners, v. VL
MAKABALI MEMORIAL HOSPITAL, INC., ALEJANDRO S. MAKABALI, MELCHOR
CATAMBING AND DAX M. TIDULA, Respondents.
DECISION
DEL CASTILLO, J.:
Rules of procedure must be used to achieve speedy and efficient administration of
justice and not derail it. When strict application of the rules on verification and non-
forum shopping will result in patent denial of substantial justice, these rules may be
construed liberally. After all, the ends of justice are better served when cases are
determined on the merits, not on mere technicality.1
This Petition for Review on Certiorari assails the Resolution2 dated July 12, 2012 of
the Court of Appeals (CA) in CA-G.R. SP No. 125333. The CA dismissed the Petition
for Certiorari filed therewith because of the purported defective
Verification/Certificate of Non-Forum Shopping with Undertaking appended to the
Petition; and of petitioners' violation of Section 3, Rule 46 of the Rules of Court. Also
challenged is, the CA Resolution3 dated October 22, 2012 which denied the Motion
for Reconsideration for lack of merit.
Factual Antecedents
The case stemmed from an amended Complaint4 for illegal dismissal and money
claims filed by Drs. Lynman Bacolor (Dr. Bacolor), Jeffrey R. Galura (Dr. Galura),
Helen B. Torres (Dr. Helen), Fritzie C. Villegas (Dr. Villegas), Raymond Canlas (Dr.
Canlas), Zheila C. Torres (Dr. Zheila) and Dax Tidula (Dr. Tidula) against VL Makabali
Hospital Inc. (the Hospital), Alejandro S. Makabali, its owner and President, and
Melchor Catambing (Catambing), its Emergency Room (ER) Manager.5
Allegedly, the Hospital engaged Drs. Bacolor, Galura, Villegas and Canlas as resident
physicians assigned in its ER for one year, commencing October 2000 until October
2001. It engaged Drs. Helen and Zheila, also as ER resident physicians, starting
March 2001 until March 2002, and January 2002 until January 2003, respectively.
Despite the expiration of their contracts, the Hospital continued to employ Drs.
Bacolor, Galura, Villegas, Canlas, Helen and Zheila (petitioners).6
Petitioners stated that on May 3, 2006, Catambing and one Dr. Lopez instructed
them to resign, and re-apply to the Hospital as resident physicians under a one-year
fixed term contract. They further alleged that Catambing and Dr. Lopez later directed
them to sign a. waiver and offered them "gratitude" pay of P27,000.00 but they
refused to resign; and because of their refusal, respondents demoted them as
assistant physicians in the Operating-Room (OR) of the Hospital.7
Additionally, petitioners insisted that to compel them to resign, respondents issued
notices to explain to Drs. Bacolor, Galura, Helen, Villegas and Canlas. In particular,
Drs. Bacolor, Galura and Helen were charged with dishonesty for allegedly directing
patients to secure laboratory examinations outside the Hospital; while Drs. Villegas
and Canlas were charged with violation of timekeeping procedure and habitual
violation of rules and regulations.8
Consequently, petitioners filed a case for constructive illegal dismissal against
respondents. They argued that despite their complaint, respondents still conducted
an administrative investigation against them.9On June 30, 2006, Drs. Bacolor and
Galura received notices of termination from the Hospital.10
Petitioners contended that they were constructively dismissed when respondents
demoted them as assistant physicians in the OR of the Hospital.11 They stated that
such demotion was neither necessary nor temporary, and was arbitrarily done to
force them to resign. They further averred that Drs. Bacolor and Galura were actually
illegally dismissed after they were given respective notices of termination.12
On the other hand, Dr. Tidula stated that the Hospital engaged him as resident
physician for a year commencing on January 1, 2001 to December 31, 2001; the
Hospital renewed his contract for the year 2002 to 2003; and after his contract
expired, the Hospital continued to engage his services.13
Dr. Tidula likewise alleged that in 2005, several resident physicians in the Hospital
resigned. As a result, the remaining resident physicians were made to fill in their
duties. Allegedly, it was agreed upon that when a resident doctor was absent, a
reliever would take his place; and the reliever's fee would be charged against the
salary of the absent doctor. Dr. Tidula claimed that the reliever shall punch in the
time card of the absent doctor for t recording, accounting and expediency
purposes.14
Furthermore, Dr. Tidula asserted that in February 2006, Dr. Amelita Lising (Dr.
Lising), who was a resident physician, went on leave. He averred that being the
acting Chief Resident, he implemented the agreement regarding the designation of
reliever. He stated that the relievers of Dr. Lising were made to punch in and out her
time card to prove that they had taken her place; and they received salary from that
intended for Dr. Lising.15
Dr. Tidula narrated that on May 3, 2006, he and his fellow residents were directed to
resign with the promise that they would be re-engaged under a fixed term of one
year. He averred that Catambing and Dr. Lopez also instructed him and the other
resident physicians to tender their resignation and sign a waiver in favor of the
Hospital. He alleged that they were also offered P27,000.00 as financial assistance;
however, he and the other resident physicians refused to resign.16
Additionally, Dr. Tidula alleged that on May 16, 2006, he was ordered to report
exclusively at the OR of the Hospital as assistant physician; and this demotion was a
result of his refusal to resign. Consequently, he filed a complaint for constructive
dismissal against the Hospital.17
Later, Catambing gave Dr. Tidula a Notice18 of dismissal for violation of timekeeping
procedure. Dr. Tidula stated that he inquired from Catambing why he was not given
any notice to explain. Purportedly, Catambing informed him that a notice to explain
was sent through a private courier. Upon verification, Dr. Tidula discovered that the
notice was delivered to a person unknown to him. He informed the Hospital about
the matter but the Hospital insisted that he was given the opportunity to explain and
was invited to an investigation, as such, the sanction against him remains.19
Dr. Tidula argued that he was illegally dismissed since he did not receive a notice to
explain; and he did not violate any of the company rules.20
For their part, respondents asserted that Drs. Tidula, Bacolor and Galura were validly
dismissed. In particular, they alleged that Dr. Tidula violated timekeeping procedure
of the Hospital when he punched in Dr. Lising's time card on February 2, 6, 10 and
12, 2006.21 On the other hand Drs. Bacolor and Galura were found guilty of referring
patients to other clinics for laboratory examination in February 2006.22
Moreover, respondents claimed that the Hospital did not dismiss Drs. Helen, Villegas
and Canlas; thus, they should be dropped from the complaint. They added that Dr.
Zheila was never cited for any infraction but she abandoned her work as she had
been absent since July 2006.23
Ruling of the Labor Arbiter
On July 23, 2010, the LA rendered a Decision24 finding respondents guilty of illegally
dismissing petitioners and Dr. Tidula, as well as ordering respondents to pay them
backwages from the time of their dismissal until finality of the Decision, and
separation pay. The LA also ordered the Hospital to pay petitioners and Dr. Tidula
moral damages of P100,000.00 each and exemplary damages of P100,000.00 each,
and attorney's fees.
The Hospital appealed to the National Labor Relations Commission (NLRC).25 cralawred
Ruling of the National Labor Relations Commission
On November 11, 2011, the NLRC reversed and set aside the LA Decision and
dismissed the complaints.26 It held that there was no showing that petitioners and
Dr. Tidula were demoted, and that such demotion amounted to constructive
dismissal. It ruled that "it would be difficult to discern the differences between the
duties of a resident and assistant physician, as both indubitably perform doctor's
duties."27 Also, the NLRC decreed that Dr. Zheila did not even sign the verification
and certificate of non-forum shopping in this case.
Moreover, the NLRC gave credence to respondents' position that Drs. Bacolor and
Galura were validly dismissed because they repeatedly referred patients to another
clinic for laboratory examinations. It ruled that such was an act of deceit because the
Hospital offered the same services.
On April 18, 2012, the NLRC denied petitioners and Dr. Tidula's motion for
reconsideration.28
Aggrieved, petitioners filed a Petition for Certiorari with the CA ascribing grave abuse
of discretion on the part of the NLRC in giving due course to the appeal despite its
alleged lack of appeal bond; and in reversing the LA Decision.
The Petition was accompanied by three separate Verifications/Certificates of Non-
Forum Shopping signed by Drs. Galura, Bacolor and Helen.29 Atty. Carlos Raphael N.
Francisco executed and signed a Verification/Certificate of Non-Forum Shopping with
Undertaking in behalf of Drs. Villegas, Canlas and Zheila.30
Ruling of the Court of Appeals
On July 12, 2012, the CA issued the assailed Resolution, the pertinent portions of
which read:
chanRoble svirtual Lawlib ra ry
The Petition for Certiorari contains the following infirmities, hence is DISMISSED:
3 THE COURT OF APPEALS HAS DECIDED A QUESTION
1. The Verification/Certification of Non-Forum Shopping With Undertaking attached OF SUBSTANCE IN A WAY NOT PROBABLY IN ACCORD
to the Petition is executed by Atty. Carlos Raphael N. Francisco, allegedly [sic]
counsel of record of petitioners Fritzie C. Villegas, Raymond Canlas and Zeila C. WITH LAW OR WITH THE APPLICABLE DECISIONS OF
Torres, not by the three petitioners themselves, in violation of Rule 7, Section 5 of THE-HONORABLE COURT WHEN THE COURT OF
the Rules of Court, and the ruling in Far Eastern Shipping Company v. Court of
Appeals et al.
APPEALS. DISMISSED THE PETITION FOR CERTIORARI
OF THE PETITIONERS DESPITE THE FACT THAT THE
2. The Petition does not indicate in its title that Dax Tidula is a party respondent, ONLY KNOWN ADDRESS OF RESPONDENT TIDULA
although in the portion entitled 'Parties' he is so named, and does not indicate the
address of Dax Tidula, all in violation of Rule 46, Section 3 of the Rules of Court, in WAS INCLUDED IN THE PETITION FOR CERTIORARI
relation to Rule 65 of the same Rules. AND THAT RESPONDENT TIDULA, THROUGH HIS
SO ORDERED.31
COUNSEL, WAS SERVED WITH A COPY OF SUCH
PETITION FOR CERTIORARI;
ChanRoblesVi rtua lawlib rary

On October 22, 2012, the CA denied petitioners' Motion for Reconsideration.32

Aggrieved, petitioners filed this Petition raising the following assignment of errors:
4 THE COURT OF APPEALS SANCTIONED A DEPARTURE
chanRoble svirtual Lawlib ra ry

1 THE COURT OF APPEALS HAS DECIDED A QUESTION
OF SUBSTANCE IN A WAY NOT PROBABLY IN ACCORD
WITH LAW OR WITH THE APPLICABLE DECISIONS OF
THE HONORABLE COURT WHEN THE COURT OF
APPEALS DISMISSED THE PETITION FOR CERTIORARI
OF THE PETITIONERS DESPITE THE FACT THAT
SEVERAL OF THE PETITIONERS HAD VALIDLY
EXECUTED VERIFICATIONS AND CERTIFICATES OF
NON-FORUM SHOPPING WHICH WERE ATTACHED TO
SAID PETITION FOR CERTIORARI;
5 THE COURT OF APPEALS SANCTIONED A DEPARTURE
2 THE COURT OF APPEALS HAS DECIDED A QUESTION
OF SUBSTANCE IN A WAY NOT PROBABLY IN ACCORD
WITH LAW OR WITH THE APPLICABLE DECISIONS OF
THE HONORABLE COURT WHEN THE COURT OF
APPEALS DISMISSED THE PETITION FOR CERTIORARI
OF THE PETITIONERS DESPITE THE FACT THAT THE
PETITIONERS HAD SUBSTANTIALLY COMPLIED WITH
THE RULES ON THE EXECUTION OF A VERIFICATION
AND CERTIFICATE OF NON-FORUM SHOPPING;
6 THE COURT OF APPEALS SANCTIONED A DEPARTURE
BY THE NLRC IN NLRC CASE NO[.] RAB. III-06-10180-
06 FROM THE ACCEPTED OR USUAL COURSE OF
JUDICIAL PROCEEDINGS AS THE COURT OF APPEALS
ALLOWED THE NLRC TO VIRTUALLY EXTEND THE
PERIOD OF THE RESPONDENT HOSPITAL TO FILE AN
APPEAL FOR ALMOST FOUR MONTHS FROM THE
EXPIRATION OF THE PERIOD TO FILE SUCH APPEAL;
BY THE NLRC IN NLRC CASE NO[.] RAB. 111-06-
10180-06 FROM THE ACCEPTED OR USUAL COURSE
OF JUDICIAL PROCEEDINGS AS THE COURT OF
APPEALS ALLOWED THE NLRC TO GIVE DUE COURSE
TO AN APPEAL THAT WAS CLEARLY FILED OUT OF
TIME AND TO MODIFY THE DECISION OF THE LABOR
ARBITER THAT WAS ALREADY FINAL AND EXECUTORY;
and
BY THE NLRC IN NLRC CASE NO[.] RAB. III-06-10180-

06 FROM THE ACCEPTED OR USUAL COURSE OF
JUDICIAL PROCEEDINGS AS THE COURT OF APPEALS
TOLERATED THE GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION
COMMITTED BY THE NLRC IN REVERSING IN TOTO
THE DECISION OF THE LABOR ARBITER DESPITE THE
FACT THAT SUCH REVERSAL IS NOT SUPPORTED BY
ANY EVIDENCE ON RECORD AND BY THE APPLICABLE
LAWS.33
Petitioners argue that the verifications executed by three of the six petitioners and
the verification executed by their counsel constituted full compliance with the
required verification. They contended that the three petitioners who made their
verification are real parties-in-interest, and their counsel who also verified the
Petition had been in possession of authentic and relevant records of the case.
Also, petitioners posit that the failure of Drs. Villegas, Canlas and Zheila to execute a
certificate of non-forum shopping should not have caused the dismissal of the
Petition for Certorari. They insist that under justifiable circumstances, the signature
of one of the petitioners in the certificate against forum shopping substantially
complies with the rules. They further point out that all of them share a common
interest and invoke a common cause of action under the same set of facts.
Moreover, petitioners submit that they complied with Section 3, Rule 46 of the Rules
of Court. They contend that they included Dr. Tidula in the Petition for Certiorari as
respondent because he remains interested in the reversal of the NLRC Decision and
Resolution. They add that from the inception of the case, all pleadings had been
coursed through Dr. Tidula's counsel; and they are unaware of the address of Dr.
Tidula as he never indicated it in his position paper. Hence, they maintain that it is
fair that in the present proceeding, any pleading intended for Dr. Tidula be sent to
his counsel.
In addition, petitioners state that the non-inclusion of Dr. Tidula is not a fatal defect
but a mere typographical error which does not prejudice the rights of any party.
Finally, petitioners fault the CA in not finding that the NLRC committed grave abuse
of discretion in giving due course to the Hospital's appeal despite its failure to post
appeal bond within the period to perfect an appeal. They also maintain that the NLRC
committed grave abuse of discretion in holding that they were not illegally dismissed
by respondents.
The Hospital, on the other hand, asserts that the CA correctly dismissed the Petition
because it was filed by a counsel who had no authority from petitioners; and that the
Certificate against Forum Shopping attached thereto was fatally defective. It also
declares that the Petition for Certiorari improperly impleaded Dr. Tidula as
respondent. Lastly, it contends that petitioners are not entitled to money claims.
Our Ruling
The Petition is meritorious.
In Altres v. Empleo,34 the Court summarized the basic tenets involving non-
compliance with the requirements on, or filing of defective verification and certificate
against forum shopping, to wit:
chanRoble svirtual Lawlib ra ry
1) A distinction must be made between non-compliance with the requirement on or
submission of defective verification, and non-compliance with the requirement on or
submission of defective certification against forum shopping.
2) As to verification, non-compliance therewith or a defect therein does not
necessarily render the pleading fatally defective. The court may order its submission
or correction or act on the pleading if the attending circumstances are such that
strict compliance with the Rule may be dispensed with in order that the ends of
justice may be served thereby.
3) Verification is deemed substantially complied with when one who has ample
knowledge to swear to the truth of the allegations in the complaint or petition signs
the verification, and when matters alleged in the petition have been made in good
faith or are true and correct.
4) As to certification against forum shopping, non-compliance therewith or a defect
therein, unlike in verification, is generally not curable by its subsequent submission
or correction thereof, unless there is a need to relax the Rule on the ground of
"substantial compliance" or presence of "special circumstances or compelling
reasons".
5) The certification against forum shopping must be signed by all the plaintiffs or
petitioners in a case; otherwise, those who did not sign will be dropped as parties to
the case. Under reasonable or justifiable circumstances, however, as when all the
plaintiffs or petitioners share a common interest and invoke a common cause of
action or defense, the signature of only one of them in the certification against forum
shopping substantially complies with the Rule.
6) Finally, the certification against forum shopping must be executed by the party-
pleader, not by his counsel. If, however, for reasonable or justifiable reasons, the
party-pleader is unable to sign, he must execute a Special Power of Attorney
designating his counsel of record to sign on his behalf.
The CA dismissed the Petition for Certiorari on the ground that the
Verification/Certificate of Non-Forum Shopping executed by petitioners' counsel on
behalf of Drs. Villegas, Canlas and Zheila violated Section 5, Rule 7 of the Rules of
Court.35
As properly pointed out by the CA, the Verification/Certificate of Non-Forum
Shopping with Undertaking executed by petitioners' counsel is not valid. As stated
in Altres, a certificate against forum shopping must be signed by the party and in
case his counsel signs the same on his behalf, the counsel must be armed with a
special power of attorney. Since petitioners' counsel is not shown to have been
authorized by Drs. Villegas, Canlas and Zheila to sign a certificate of non-forum
shopping on their behalf, the execution of said certificate by counsel violates the
foregoing rules.
Nonetheless, the CA failed to consider the concept of "substantial compliance" to the
requirements of verification and certificate of non-forum shopping, as it has been
shown that three of the six petitioners executed their own verification and certificate
against forum shopping.
The verification of a pleading is a formal and not a jurisdictional requirement. It is
intended to assure that the allegations in a pleading are true and correct. As such,
the court may order the correction of unverified pleadings, or it may act on them and
waive strict compliance with the rules.36
The verification requirement is deemed substantially complied with when a person
who has sufficient knowledge to swear to the truth of the allegations in the complaint
or petition signs the verification; and matters alleged therein have been made in
good faith or are true and correct. Thus, there is substantial compliance if at least
one of the petitioners makes a proper verification.37
In Ateneo de Naga University v. Manalo,38 the signature of one of three petitioners
therein was considered substantial compliance with the verification requirement. The
Court held that Fr. Tabora, the petitioner who signed the verification, has sufficient
knowledge to swear to the truth of the allegations in the petition filed with the CA;
and his signature was ample assurance that the allegations have been made in good
faith or are true and correct.
In SKM Art Craft Corporation v. Bauca,39 the Court held that the verification and
certificate against forum shopping signed by nine out of 23 respondents substantially
complied with the verification requirement since they have common interest and
cause of action. The Court likewise stated that the apparent merit of the petition and
the conflicting findings, of the LA and the NLRC also justified the decision of the CA
to resolve the case on the merits.
In this case, three out of six petitioners signed three separate verifications appended
to the Petition for Certiorari. Their signatures are sufficient assurance that the
allegations in the Petition were made in good faith, or are true and correct. Thus,
there is substantial compliance with the verification requirement.
On the other hand, as a rule, the certificate against forum shopping must be signed
by all plaintiffs or petitioners; otherwise, those who did not sign will be dropped as
parties to the case. Under reasonable or justifiable situations, such as when the
plaintiffs or petitioners share a common interest and invoke a common cause of
action or defense, the signature of one of them in the certificate against forum
shopping is considered substantial compliance with the rules.40 cra lawred
In Abaria v. National Labor Relations Commission,41 47 out of 88 petitioners signed
the certificate against forum shopping. The Court ruled that the petitioning
employees shared a common interest and cause of action when they filed the case
for illegal dismissal. The Court decreed ,that when petitioners therein appealed to the
CA, they pursued the case as a collective body, invoking one argument in support of
their cause of action, which is, the illegal dismissal purportedly committed by their
employer when union members resorted to strike due to the employer's refusal to
bargain with officers of the local chapter.
Furthermore, in Torres v. Specialized Packaging Development Corp.,42 the Court
allowed the relaxation of the rules on submission. of certificate against forum
shopping. One of the compelling grounds for the allowance of said certificate therein
where only two of 25 petitioners signed the same was the "apparent merits of the
substantive aspects of the case." It noted that the varying views of the LA and the
NLRC give ample basis for the necessity of a review on the merits and the outright
dismissal of the petition was prejudicial to the substantive rights.
Here, three of six petitioners signed the certificate of non-forum shopping. At the
least, the CA could have ordered that those who did not sign it be dropped as
parties, but not the outright dismissal of the Petition.
The Court, nevertheless, holds that there are justifiable reasons for the relaxation of
the rules on the filing of a certificate of non-forum shopping and that the certificate
against forum shopping signed by three out of six petitioners suffices.
Specifically, petitioners' cause of action revolves on the same issue, that is,
respondents illegally dismissed them under similar circumstances. They were all
resident physicians who were purportedly 1) re-employed by the Hospital even after
the expiration of their respective one year contracts; 2) forced to resign and offered
to be re-engaged as fixed term employees but declined; 3) demoted; 4) accused of
violations of the Hospital rules and regulations; and, 5) dismissed.
Moreover, substantial justice dictates that the Petition for Certiorari be given due
course and be resolved on the merits. This is especially so since the findings of the
LA are contrary to those of the NLRC,43particularly on the issues of whether
respondents illegally dismissed petitioners and of whether they were afforded due
process of law.
The requirement of strict compliance with the rules on filing of certificate against
forum shopping highlights the mandatory character of the submission of such
certificate. However, this mandatory requirement allows substantial compliance
provided that there are justifiable circumstances for the relaxation of the rules.44
Furthermore, the CA dismissed the Petition for Certiorari because it did not indicate
in its title that Dr. Tidula is a party respondent and the Petition did not state Dr.
Tidula's actual address. The CA held that these omissions violate Section 3,45 Rule 46
of the Rules of Court, in relation to Rule 65 thereof.
We do not agree.
Since Dr. Tidula was included as one of the respondents in the body of the Petition,
then the CA could have clarified with petitioners the non-inclusion of Dr. Tidula in the
title and could have ordered the title rectified.
Likewise, the Court finds that the failure to state the address of Dr. Tidula is
insufficient to cause the dismissal of the Petition. The lack of address of Dr. Tidula is (CTA) in C.T.A. Case No. 5581 on the ground of defective verification and
not a fatal defect as he had been represented by his counsel in the case. The certification against forum shopping.
indication that the party "could be served with process care of his counsel was
substantial compliance with the Rules." And, when a party has appeared through
counsel, service is to be made upon the counsel, unless the court expressly orders The Facts
that it be made upon the party.46
Petitioner, a corporation duly organized and existing under Philippine laws, is a
In view of the foregoing, a remand of the case to the CA for proper disposition on the
duly licensed retailer of medicine and other pharmaceutical products. It
merits is deemed proper.
operates two drugstores, one in Tuguegarao, Cagayan, and the other in
c han robles law

WHEREFORE, the Petition is GRANTED. The July 42, 2012 and October 22, 2012 Roxas, Isabela, under the name and style of "Mercury Drug."
Resolutions of the Court of Appeals in CA-G.R. SP No. 125333
are REVERSED and SET ASIDE. The case is REMANDED to the Court of Appeals for Petitioner alleged that in 1995, it granted 20% sales discounts to qualified
appropriate disposition.
senior citizens on purchases of medicine pursuant to Republic Act No. (RA)
SO ORDERED. cralawlawlibra ry
74323 and its implementing rules and regulations.

Carpio, (Chairperson), Brion, Mendoza, and Leonen, JJ., concur. chanroble svi rtual lawlib rary

In compliance with Revenue Regulation No. (RR) 2-94, petitioner treated the
20% sales discounts granted to qualified senior citizens in 1995 as deductions
Endnotes: from the gross sales in order to arrive at the net sales, instead of treating them
as tax credit as provided by Section 4 of RA 7432.
Republic of the Philippines
SUPREME COURT On December 27, 1996, however, petitioner filed with the Bureau of Internal
Manila Revenue (BIR) a claim for tax refund/tax credit of the full amount of the 20%
sales discount it granted to senior citizens for the year 1995, allegedly totaling
SECOND DIVISION to PhP 123,083 in accordance with Sec. 4 of RA 7432.

G.R. No. 151413 February 13, 2008 The BIR’s inaction on petitioner’s claim for refund/tax credit compelled
petitioner to file on March 18, 1998 a petition for review before the CTA
CAGAYAN VALLEY DRUG CORPORATION, petitioner, docketed as C.T.A. Case No. 5581 in order to forestall the two-year
vs. prescriptive period provided under Sec. 2304 of the 1977 Tax Code, as
COMMISSIONER OF INTERNAL REVENUE, respondent. amended. Thereafter, on March 31, 2000, petitioner amended its petition for
review.
DECISION
The Ruling of the Court of Tax Appeals
VELASCO, JR., J.:
On April 26, 2000, the CTA rendered a Decision dismissing the petition for
The Case review for lack of merit.5

This petition for review under Rule 45 of the Rules of Court seeks the recall of
the August 31, 2000 Resolution1 of the Court of Appeals (CA) in CA-G.R. SP
No. 59778, which dismissed petitioner Cagayan Valley Drug Corporation’s
petition for review of the April 26, 2000 Decision2 of the Court of Tax Appeals
The CTA sustained petitioner’s contention that pursuant to Sec. 4 of RA 7432,
the 20% sales discounts petitioner extended to qualified senior citizens in 1995
should be treated as tax credit and not as deductions from the gross sales as
erroneously interpreted in RR 2-94. The CTA reiterated its consistent holdings
that RR 2-94 is an invalid administrative interpretation of the law it purports to
implement as it contravenes and does not conform to the standards RA 7432
prescribes.
Notwithstanding petitioner’s entitlement to a tax credit from the 20% sales
discounts it extended to qualified senior citizens in 1995, the CTA nonetheless
dismissed petitioner’s action for refund or tax credit on account of petitioner’s
net loss in 1995. First, the CTA rejected the refund as it is clear that RA 7432
only grants the 20% sales discounts extended to qualified senior citizens as
tax credit and not as tax refund. Second, in rejecting the tax credit, the CTA
reasoned that while petitioner may be qualified for a tax credit, it cannot be so
extended to petitioner on account of its net loss in 1995.
The CTA ratiocinated that on matters of tax credit claim, the government
applies the amount determined to be reimbursable after proper verification
against any sum that may be due and collectible from the taxpayer. However, if
no tax has been paid or if no amount is due and collectible from the taxpayer,
then a tax credit is unavailing. Moreover, it held that before allowing recovery
for claims for a refund or tax credit, it must first be established that there was
an actual collection and receipt by the government of the tax sought to be
recovered. In the instant case, the CTA found that petitioner did not pay any
tax by virtue of its net loss position in 1995.
Petitioner’s Motion for Reconsideration was likewise denied through the
appellate tax court’s June 30, 2000 Resolution.6
The Ruling of the Court of Appeals
Aggrieved, petitioner elevated the matter before the CA, docketed as CA-G.R.
SP No. 59778. On August 31, 2000, the CA issued the assailed
Resolution7 dismissing the petition on procedural grounds. The CA held that
the person who signed the verification and certification of absence of forum
shopping, a certain Jacinto J. Concepcion, President of petitioner, failed to
adduce proof that he was duly authorized by the board of directors to do so.
As far as the CA was concerned, the main issue was whether or not the
verification and certification of non-forum shopping signed by the President of
petitioner is sufficient compliance with Secs. 4 and 5, Rule 7 of the 1997 Rules
of Civil Procedure.
The verification and certification in question reads:
I, JACINTO J. CONCEPCION, of legal age with office address at
2nd Floor, Mercury Drug Corporation, No. 7 Mercury Ave, Bagumbayan,
Quezon City, under oath, hereby state that:
1. I am the President of Cagayan Valley Drug Corporation, Petitioner in
the above-entitled case and am duly authorized to sign this Verification
and Certification of Absence of Forum Shopping by the Board of
Director.
xxxx
The CA found no sufficient proof to show that Concepcion was duly authorized
by the Board of Directors of petitioner. The appellate court anchored its
disposition on our ruling in Premium Marble Resources, Inc. v. Court of
Appeals (Premium), that "[i]n the absence of an authority from the Board of
Directors, no person, not even the officers of the corporation, can validly bind
the corporation."8
Hence, we have this petition.
The Issues
Petitioner raises two issues: first, whether petitioner’s president can sign the
subject verification and certification sans the approval of its Board of Directors.
And second, whether the CTA committed reversible error in denying and
dismissing petitioner’s action for refund or tax credit in C.T.A. Case No. 5581.
The Court’s Ruling
The petition is meritorious.
Premium not applicable
As regards the first issue, we find the CA to have erroneously relied
on Premium. In said case, the issue tackled was not on whether the president
of Premium Marble Resources, Inc. was authorized to sign the verification and
certification against forum shopping, but rather on which of the two sets of
officers, both claiming to be the legal board of directors of Premium, have the
authority to file the suit for and in behalf of the company. The factual
antecedents and issues in Premium are not on all fours with the instant case
and is, therefore, not applicable.
With respect to an individual litigant, there is no question that litigants must
sign the sworn verification and certification unless they execute a power of
attorney authorizing another person to sign it. With respect to a juridical
person, Sec. 4, Rule 7 on verification and Sec. 5, Rule 7 on certification
against forum shopping are silent as to who the authorized signatory should
be. Said rules do not indicate if the submission of a board resolution
authorizing the officer or representative is necessary.
Corporate powers exercised through board of directors
It must be borne in mind that Sec. 23, in relation to Sec. 25 of the Corporation
Code, clearly enunciates that all corporate powers are exercised, all business
conducted, and all properties controlled by the board of directors. A
corporation has a separate and distinct personality from its directors and
officers and can only exercise its corporate powers through the board of
directors. Thus, it is clear that an individual corporate officer cannot solely
exercise any corporate power pertaining to the corporation without authority
from the board of directors. This has been our constant holding in cases
instituted by a corporation.
In a slew of cases, however, we have recognized the authority of some
corporate officers to sign the verification and certification against forum
shopping. In Mactan-Cebu International Airport Authority v. CA, we recognized
the authority of a general manager or acting general manager to sign the
verification and certificate against forum shopping;9 in Pfizer v. Galan, we
upheld the validity of a verification signed by an "employment specialist" who
had not even presented any proof of her authority to represent the
company;10 in Novelty Philippines, Inc., v. CA, we ruled that a personnel officer
who signed the petition but did not attach the authority from the company is
authorized to sign the verification and non-forum shopping certificate;11 and
in Lepanto Consolidated Mining Company v. WMC Resources International
Pty. Ltd. (Lepanto), we ruled that the Chairperson of the Board and President
of the Company can sign the verification and certificate against non-forum
shopping even without the submission of the board’s authorization.12
In sum, we have held that the following officials or employees of the company
can sign the verification and certification without need of a board resolution: (1)
the Chairperson of the Board of Directors, (2) the President of a corporation,
(3) the General Manager or Acting General Manager, (4) Personnel Officer,
and (5) an Employment Specialist in a labor case.
While the above cases do not provide a complete listing of authorized
signatories to the verification and certification required by the rules, the
determination of the sufficiency of the authority was done on a case to case
basis. The rationale applied in the foregoing cases is to justify the authority of
corporate officers or representatives of the corporation to sign the verification
or certificate against forum shopping, being "in a position to verify the
truthfulness and correctness of the allegations in the petition."13
Authority from board of directors required
In Philippine Airlines v. Flight Attendants and Stewards Association of the
Philippines, we ruled that only individuals vested with authority by a valid board
resolution may sign the certificate of non-forum shopping on behalf of a
corporation. The action can be dismissed if the certification was submitted
unaccompanied by proof of the signatory’s authority.14 We believe that
appending the board resolution to the complaint or petition is the better
procedure to obviate any question on the authority of the signatory to the
verification and certification. The required submission of the board resolution is
grounded on the basic precept that corporate powers are exercised by the
board of directors,15 and not solely by an officer of the corporation. Hence, the
power to sue and be sued in any court or quasi-judicial tribunal is necessarily
lodged with the said board.
There is substantial compliance with Rule 7, Secs. 4 and 5
In the case at bar, we so hold that petitioner substantially complied with Secs.
4 and 5, Rule 7 of the 1997 Revised Rules on Civil Procedure. First, the
requisite board resolution has been submitted albeit belatedly by
petitioner. Second, we apply our ruling in Lepanto with the rationale that the
President of petitioner is in a position to verify the truthfulness and correctness
of the allegations in the petition. Third, the President of petitioner has signed
the complaint before the CTA at the inception of this judicial claim for refund or
tax credit.
Consequently, the petition in CA-G.R. SP No. 59778 ought to be reinstated.
However, in view of the enactment of RA 9282 which made the decisions of
the CTA appealable to this Court, we will directly resolve the second issue
which is a purely legal one.
Petitioner entitled to tax credit
The pith of the dispute between petitioner and respondent is whether petitioner
is entitled to a tax refund or tax credit of 20% sales discount granted to senior
citizens under RA 7432 or whether the discount should be treated as a
deduction from gross income.
This issue is not new, as the Court has resolved several cases involving the
very same issue. In Commissioner of Internal Revenue v. Central Luzon Drug
Corporation (Central Luzon),16 we held that private drug companies are entitled
to a tax credit for the 20% sales discounts they granted to qualified senior
citizens under RA 7432 and nullified Secs. 2.i and 4 of RR 2-94. In Bicolandia
Drug Corporation (formerly Elmas Drug Corporation) v. Commissioner of
Internal Revenue,17 we ruled that petitioner therein is entitled to a tax credit of
the "cost" or the full 20% sales discounts it granted pursuant to RA 7432. In the
related case of Commissioner of Internal Revenue v. Bicolandia Drug
Corporation,18 we likewise ruled that respondent drug company was entitled to
a tax credit, and we struck down RR 2-94 to be null and void for failing to
conform with the law it sought to implement.
A perusal of the April 26, 2000 CTA Decision shows that the appellate tax
court correctly ruled that the 20% sales discounts petitioner granted to qualified
senior citizens should be deducted from petitioner’s income tax due and not
from petitioner’s gross sales as erroneously provided in RR 2-94. However, the
CTA erred in denying the tax credit to petitioner on the ground that petitioner
had suffered net loss in 1995, and ruling that the tax credit is unavailing.
Net loss in a taxable year does not preclude grant of tax credit
It is true that petitioner did not pay any tax in 1995 since it suffered a net loss
for that taxable year. This fact, however, without more, does not preclude
petitioner from availing of its statutory right to a tax credit for the 20% sales
discounts it granted to qualified senior citizens. The law then applicable on this
point is clear and without any qualification. Sec. 4 (a) of RA 7432 pertinently
provides:
Sec. 4. Privileges for the Senior citizens.––The senior citizens shall be
entitled to the following:
a) the grant of twenty percent (20%) discount from all establishments
relative to utilization of transportation services, hotels and similar
lodging establishments, restaurants and recreation centers and
purchase of medicines anywhere in the country: Provided, That private
establishments may claim the cost as tax credit. (Emphasis ours.)
The fact that petitioner suffered a net loss in 1995 will not make the tax credit
due to petitioner unavailable. This is the core issue resolved in Central Luzon,
where we ruled that the net loss for a taxable year does not bar the grant of the
tax credit to a taxpayer pursuant to RA 7432 and that prior tax payments are
not required for such grant. We explained:
Although this tax credit benefit is available, it need not be used by
losing ventures, since there is no tax liability that calls for its
application. Neither can it be reduced to nil by the quick yet callow
stroke of an administrative pen, simply because no reduction of taxes
can instantly be effected. By its nature, the tax creditmay still be
deducted from a future, not a present, tax liability, without which it does
not have any use. x x x
xxxx
While a tax liability is essential to the availment or use of any tax credit,
prior tax payments are not. On the contrary, for the existence or
grant solely of such credit, neither a tax liability nor a prior tax payment
is needed. The Tax Code is in fact replete with provisions granting or
allowing tax credits, even though no taxes have been previously paid.19
It is thus clear that petitioner is entitled to a tax credit for the full 20% sales
discounts it extended to qualified senior citizens for taxable year 1995.
Considering that the CTA has not disallowed the PhP 123,083 sales discounts
petitioner claimed before the BIR and CTA, we are constrained to grant them
as tax credit in favor of petitioner.
Consequently, petitioner’s appeal before the CA in CA-G.R. SP No. 59778
must be granted, and, necessarily, the April 26, 2000 CTA Decision in C.T.A.
Case No. 5581 reversed and set aside.
WHEREFORE, the petition is GRANTED. The August 31, 2000 CA Resolution
in CA-G.R. SP No. 59778 is ANNULLED AND SET ASIDE. The April 26, 2000
CTA Decision in C.T.A. Case No. 5581 dismissing petitioner’s claim for tax
credit is accordingly REVERSED AND SET ASIDE. The Commissioner of
Internal Revenue is ORDERED to issue a Tax Credit Certificate in the name of
petitioner in the amount of PhP 123,083. No costs.
SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 162924 February 4, 2010
MID-PASIG LAND DEVELOPMENT CORPORATION, Petitioner,
vs.
MARIO TABLANTE, doing business under the name and style ECRM
ENTERPRISES; ROCKLAND CONSTRUCTION COMPANY; LAURIE
LITAM; and MC HOME DEPOT, INC., Respondents.
DECISION
NACHURA, J.:
Assailed in the instant petition are the two (2) Resolutions of the Court of
1
Appeals (CA) dated November 20, 2003 and March 22, 2004, dismissing the
petition for certiorari before it on technical grounds and denying the motion for
reconsideration thereof, respectively.
The background facts are as follows:
Petitioner is the registered owner of a piece of land situated in Pasig City,
bounded by Meralco Avenue, Ortigas Avenue, Doña Julia Vargas Avenue, and
Valle Verde Subdivision. On December 6, 1999, petitioner, represented by its
Chairman and President, Ronaldo Salonga, and ECRM Enterprises,
represented by its proprietor, Mario P. Tablante, executed an agreement
whereby the former would lease to the latter an area, approximately one (1)
hectare, of the aforesaid land, for a period of three (3) months, to be used as
the staging area for the Home and Garden Exhibition Fair. On March 6, 2000,
the date of the expiration of the Lease Agreement, Tablante assigned all his
rights and interests under the said agreement to respondents Laurie M. Litam
and/or Rockland Construction Company, Inc. (Rockland) under a Deed of
Assignment of the same date. Petitioner eventually learned that respondent
Tablante had executed a Contract of Lease with respondent MC Home Depot,
Inc. on November 26, 1999 over the same parcel of land. Thereafter,
respondent MC Home Depot, Inc. constructed improvements on the land and
subdivided the area into fifty-nine (59) commercial stalls, which it leased to
various entities. Upon the expiration of the lease on March 6, 2000, petitioner
demanded that respondents vacate the land. A final demand was made in a
letter dated December 20, 2000.2
In order to forestall ejectment from the premises, respondent Rockland filed a
case for Specific Performance with the Regional Trial Court (RTC), Branch
266, Pasig City, on January 11, 2001, compelling petitioner to execute a new
lease contract for another three (3) years, commencing in July 2000. This was
docketed as Civil Case No. 68213. Petitioner moved to dismiss the complaint
on the ground that it was anticipatory in nature.
Consequently, on August 22, 2001, petitioner filed Civil Case No. 8788 for
unlawful detainer against herein respondents, raffled to the Municipal Trial
Court (MTC), Pasig City, Branch 70. Simultaneously, petitioner filed a
supplemental motion to dismiss Civil Case No. 68213, on the ground of litis
pendentia. Petitioner’s motion to dismiss was denied. The denial was
questioned and eventually elevated to the Supreme Court.3
Meantime, on April 29, 2002, the MTC rendered judgment in the unlawful
detainer (ejectment) case. In the main, the trial court ruled that the issue did
not involve material or physical possession, but rather, whether or not ECRM
had the right to exercise an option to renew its lease contract. The MTC stated
that, considering that this issue was incapable of pecuniary estimation,
jurisdiction over the case was vested in the RTC. The trial court, therefore,
disposed, as follows:
WHEREFORE, judgment is hereby rendered DISMISSING the complaint for
lack of merit. In the meantime, the plaintiff is hereby ordered to pay the
defendants attorney’s fees and expenses of litigation in the amount of
TWENTY THOUSAND PESOS (₱20,000.00).4
On appeal, the RTC, Pasig City, Branch 160, affirmed in toto. In its decision
dated July 10, 2003, the RTC ruled that:
Relative to the issue raised by the appellant that the lower court erred in
finding it had no jurisdiction over the subject matter of this case as the question
of whether or not ECRM under the provisions of the lease agreement (pars. 3
and 13) has the right to exercise an option to renew its lease contract is one
incapable of pecuniary estimation and therefore jurisdiction is vested in the
Regional Trial Court. Republic Act No. 7691 grants Metropolitan Trial Courts
the exclusive jurisdiction over cases of forcible entry and unlawful detainer.
Since it has been sufficiently established under the facts obtaining that the
contract of lease has been renewed before the expiration of the lease period,
and the appellant has consented to the renewal and assignment of the lease, it
necessarily follows that the issue on whether the lower court erred in finding
that it did not have jurisdiction over the subject matter raised by the appellant,
deserves scant consideration and this court need not delve into it anymore.5
A petition for certiorari was consequently filed with the CA.
In the assailed resolution dated November 20, 2003, the CA resolved to
dismiss the petition on the following grounds:
1) The verification and certification against non-forum shopping was
signed by a certain Antonio A. Merelos as General Manager of the
petitioner-corporation without attaching therewith a Corporate
Secretary’s certificate or board resolution that he is authorized to sign
for and on behalf of the petitioner; and
2) Lack of pertinent and necessary documents which are material
portions of the record as required by Section 2, Rule 42 of the Rules of
Civil Procedure.6
The motion for reconsideration was denied;7 hence, the instant petition
assigning the following errors:
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN
HOLDING THAT THE VERIFICATION AND CERTIFICATION AGAINST
FORUM-SHOPPING IN THE PETITION FAILED TO ATTACH THE BOARD
RESOLUTION SHOWING THE AUTHORITY OF THE AFFIANT.
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN
HOLDING THAT THE PETITION LACKED THE PERTINENT AND
NECESSARY DOCUMENTS REQUIRED BY THE RULES.
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN
DISMISSING THE PETITION THUS EFFECTIVELY UPHOLDING THE
DECISION OF THE REGIONAL TRIAL COURT, TO WIT: (a) THAT THE
LEASE AGREEMENT WAS UNILATERALLY RENEWED AND THAT
PETITIONER IS ESTOPPED FROM DENYING SUCH UNILATERAL
RENEWAL; (b) THAT RESPONDENTS TABLANTE/ECRM, ROCKLAND AND
MC HOME DEPOT COULD VALIDLY OCCUPY THE PROPERTY IN THE
ABSENCE OF ANY VALID LEASE AGREEMENT CONSENTED TO BY
PETITIONER; (c) PETITIONER [IS] LIABLE FOR ATTORNEY’S FEES AND
COSTS OF SUIT.8
The petition is granted.
In Cagayan Valley Drug Corporation v. Commissioner of Internal
Revenue,9 the Court had occasion to explain that:
It must be borne in mind that Sec. 23, in relation to Sec. 25 of the Corporation
Code, clearly enunciates that all corporate powers are exercised, all business
conducted, and all properties controlled by the board of directors. A
corporation has a separate and distinct personality from its directors and
officers and can only exercise its corporate powers through the board of
directors. Thus, it is clear that an individual corporate officer cannot solely
exercise any corporate power pertaining to the corporation without authority
from the board of directors. This has been our constant holding in cases
instituted by a corporation.
In a slew of cases, however, we have recognized the authority of some
corporate officers to sign the verification and certification against forum
shopping. In Mactan-Cebu International Airport Authority v. CA, we recognized
the authority of a general manager or acting general manager to sign the
verification and certificate against forum shopping; x x x.
In sum, we have held that the following officials or employees of the company
can sign the verification and certification without need of a board resolution: (1)
the Chairperson of the Board of Directors, (2) the President of a corporation,
(3) the General Manager or Acting General Manager, (4) Personnel Officer,
and (5) an Employment Specialist in a labor case. 1avvphi1
While the above cases do not provide a complete listing of authorized
signatories to the verification and certification required by the rules, the
determination of the sufficiency of the authority was done on a case to case
basis. The rationale applied in the foregoing cases is to justify the authority of
corporate officers or representatives of the corporation to sign the verification
or certificate against forum shopping, being "in a position to verify the
truthfulness and correctness of the allegations in the petition."10
From the foregoing, it is thus clear that the failure to attach the Secretary’s
Certificate, attesting to General Manager Antonio Merelos’s authority to sign
the Verification and Certification of Non-Forum Shopping, should not be
considered fatal to the filing of the petition. Nonetheless, the requisite board
resolution was subsequently submitted to the CA, together with the pertinent
documents.11 Considering that petitioner substantially complied with the rules,
the dismissal of the petition was, therefore, unwarranted. Time and again, we
have emphasized that dismissal of an appeal on a purely technical ground is
frowned upon especially if it will result in unfairness. The rules of procedure
ought not to be applied in a very rigid, technical sense for they have been
adopted to help secure, not override, substantial justice. For this reason, courts
must proceed with caution so as not to deprive a party of statutory appeal;
rather, they must ensure that all litigants are granted the amplest opportunity
for the proper and just ventilation of their causes, free from the constraint of
technicalities.12
After a finding that the CA erred in dismissing the petition before it, a remand
of the case is in order. However, a perusal of the records reveals that this is no
longer necessary in light of relevant developments obtaining in the case at bar.
Petitioner, in its Memorandum dated October 28, 2005, alleged that
respondents’ possessory claims had lapsed and, therefore, had become moot
and academic. Respondent Rockland prayed that a three-year lease period be
granted to it in order that it would be able to plan its activities more efficiently.
Since the claimed "lease contract" had already expired as of July or August
2003, there appears no reason why respondents should continue to have any
claim to further possession of the property.13
Respondent Rockland also stated in its Memorandum dated March 16, 2006
that it was no longer in possession of the subject property considering that:
50. In a Resolution dated 17 September 2004, in the case of "Rockland
Construction Company, Inc. vs. Mid-Pasig Land Development Corporation, et
al.," docketed as SCA No. 2673, and the Omnibus Order dated 12 November
2004, affirming the aforesaid Resolution, Branch 67 Pasig City Regional Trial
Court Presiding Judge Mariano M. Singzon awarded possession (albeit
erroneously) of subject property to Pasig Printing Corporation, an intervenor in
the SCA case.
has long been expired in 2003."15Furthermore, respondent MC Home Depot,
Inc. asserts that it is in rightful possession of the land on the strength of a
Memorandum of Agreement dated November 22, 2004 between the latter and
Pasig Printing Corporation. By petitioner’s admission that while it remains the
registered owner of the land, possession of the same had been adjudicated in
favor of Pasig Printing Corporation, another entity without any contractual
relationship with petitioner, on the strength of an Order from the RTC of Pasig
City. Considering that Pasig Printing Corporation has the jus possessionis over
the subject property, it granted the MC Home Depot, Inc. actual occupation
and possession of the subject property for a period of four (4) years, renewable
for another four (4) years upon mutual agreement of the parties.16
WHEREFORE, the petition is GRANTED. The assailed Resolutions of the
Court of Appeals are REVERSED and SET ASIDE. However, in view of the
developments which have rendered the issue of the right of possession over
the subject property moot and academic, the main case is hereby considered
CLOSED AND TERMINATED.
No pronouncement as to costs.
SO ORDERED.
ANTONIO EDUARDO B. NACHURA
Associate Justice
WE CONCUR:

51. At present, petitioner does not have a cause of action against herein
respondent Rockland. Respondent is not unlawfully withholding possession of
the property in question as in fact respondent is not in possession of the
subject property. The issue of possession in this ejectment case has therefore
been rendered moot and academic.14

This allegation was confirmed by respondent MC Home Depot, Inc. in its

Comment/Memorandum dated May 22, 2007 submitted to the Court. It stated
therein that "the passage of time has rendered the issue of possession moot
and academic with respect to respondent Rockland, as the three-year period
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 173946 June 19, 2013
BOSTON EQUITY RESOURCES, INC., Petitioner,
vs.
COURT OF APPEALS AND LOLITA G. TOLEDO, Respondents.
DECISION
PEREZ, J.:
Before the Court is a Petition for Review on Certiorari seeking to reverse and
set aside: (1) the Decision,1 dated 28 February 2006 and (2) the
Resolution,2 dated 1 August 2006 of the Court of Appeals in CA-G.R. SP No.
88586. The challenged decision granted herein respondent's petition for
certiorari upon a finding that the trial court committed grave abuse of discretion
in denying respondent's motion to dismiss the complaint against her.3 Based
on this finding, the Court of Appeals reversed and set aside the Orders, dated
8 November 20044 and 22 December 2004,5respectively, of the Regional Trial
Court (RTC) of Manila, Branch 24.
The Facts
On 24 December 1997, petitioner filed a complaint for sum of money with a
prayer for the issuance of a writ of preliminary attachment against the spouses
Manuel and Lolita Toledo.6 Herein respondent filed an Answer dated 19 March
1998 but on 7 May 1998, she filed a Motion for Leave to Admit Amended
Answer7 in which she alleged, among others, that her husband and co-
defendant, Manuel Toledo (Manuel), is already dead.8 The death certificate9 of
Manuel states "13 July 1995" as the date of death. As a result, petitioner filed a
motion, dated 5 August 1999, to require respondent to disclose the heirs of
Manuel.10 In compliance with the verbal order of the court during the 11
October 1999 hearing of the case, respondent submitted the required names
and addresses of the heirs.11 Petitioner then filed a Motion for
Substitution,12 dated 18 January 2000, praying that Manuel be substituted by
his children as party-defendants. It appears that this motion was granted by the
trial court in an Order dated 9 October 2000.13
Pre-trial thereafter ensued and on 18 July 2001, the trial court issued its pre-
trial order containing, among others, the dates of hearing of the case.14
The trial of the case then proceeded. Herein petitioner, as plaintiff, presented
its evidence and its exhibits were thereafter admitted.
On 26 May 2004, the reception of evidence for herein respondent was
cancelled upon agreement of the parties. On 24 September 2004, counsel for
herein respondent was given a period of fifteen days within which to file a
demurrer to evidence.15 However, on 7 October 2004, respondent instead filed
a motion to dismiss the complaint, citing the following as grounds: (1) that the
complaint failed to implead an indispensable party or a real party in interest;
hence, the case must be dismissed for failure to state a cause of action; (2)
that the trial court did not acquire jurisdiction over the person of Manuel
pursuant to Section 5, Rule 86 of the Revised Rules of Court; (3) that the trial
court erred in ordering the substitution of the deceased Manuel by his heirs;
and (4) that the court must also dismiss the case against Lolita Toledo in
accordance with Section 6, Rule 86 of the Rules of Court.16
The trial court, in an Order dated 8 November 2004, denied the motion to
dismiss for having been filed out of time, citing Section 1, Rule 16 of the 1997
Rules of Court which states that: "Within the time for but before filing the
answer to the complaint or pleading asserting a claim, a motion to dismiss may
be made x x x."17 Respondent’s motion for reconsideration of the order of
denial was likewise denied on the ground that "defendants’ attack on the
jurisdiction of this Court is now barred by estoppel by laches" since respondent
failed to raise the issue despite several chances to do so.18
Aggrieved, respondent filed a petition for certiorari with the Court of Appeals
alleging that the trial court seriously erred and gravely abused its discretion in
denying her motion to dismiss despite discovery, during the trial of the case, of
evidence that would constitute a ground for dismissal of the case.19
The Court of Appeals granted the petition based on the following grounds:
It is elementary that courts acquire jurisdiction over the person of the
defendant x x x only when the latter voluntarily appeared or submitted to the
court or by coercive process issued by the court to him, x x x. In this case, it is
undisputed that when petitioner Boston filed the complaint on December 24,
1997, defendant Manuel S. Toledo was already dead, x x x. Such being the
case, the court a quo could not have acquired jurisdiction over the person of
defendant Manuel S. Toledo.
x x x the court a quo’s denial of respondent’s motion to dismiss was based on
its finding that respondent’s attack on the jurisdiction of the court was already
barred by laches as respondent failed to raise the said ground in its [sic]
amended answer and during the pre-trial, despite her active participation in the
proceedings.
However, x x x it is well-settled that issue on jurisdiction may be raised at any
stage of the proceeding, even for the first time on appeal. By timely raising the
issue on jurisdiction in her motion to dismiss x x x respondent is not estopped
from raising the question on jurisdiction.
Moreover, when issue on jurisdiction was raised by respondent, the court a
quo had not yet decided the case, hence, there is no basis for the court a quo
to invoke estoppel to justify its denial of the motion for reconsideration;
It should be stressed that when the complaint was filed, defendant Manuel S.
Toledo was already dead. The complaint should have impleaded the estate of
Manuel S. Toledo as defendant, not only the wife, considering that the estate
of Manuel S. Toledo is an indispensable party, which stands to be benefited or
be injured in the outcome of the case. x x x
xxxx
Respondent’s motion to dismiss the complaint should have been granted by
public respondent judge as the same was in order. Considering that the
obligation of Manuel S. Toledo is solidary with another debtor, x x x, the claim
x x x should be filed against the estate of Manuel S. Toledo, in conformity with
the provision of Section 6, Rule 86 of the Rules of Court, x x x.20
The Court of Appeals denied petitioner’s motion for reconsideration. Hence,
this petition.
The Issues
Petitioner claims that the Court of Appeals erred in not holding that:
1. Respondent is already estopped from questioning the trial court’s
jurisdiction;
2. Petitioner never failed to implead an indispensable party as the
estate of Manuel is not an indispensable party;
3. The inclusion of Manuel as party-defendant is a mere misjoinder of
party not warranting the dismissal of the case before the lower court;
and
4. Since the estate of Manuel is not an indispensable party, it is not
necessary that petitioner file its claim against the estate of Manuel.
In essence, what is at issue here is the correctness of the trial court’s orders
denying respondent’s motion to dismiss.
The Ruling of the Court
We find merit in the petition.
Motion to dismiss filed out of time
To begin with, the Court of Appeals erred in granting the writ of certiorari in
favor of respondent. Well settled is the rule that the special civil action for
certiorari is not the proper remedy to assail the denial by the trial court of a
motion to dismiss. The order of the trial court denying a motion to dismiss is
merely interlocutory, as it neither terminates nor finally disposes of a case and
still leaves something to be done by the court before a case is finally decided
on the merits.21 Therefore, "the proper remedy in such a case is to appeal after
a decision has been rendered."22
As the Supreme Court held in Indiana Aerospace University v. Comm. on
Higher Education:23
A writ of certiorari is not intended to correct every controversial interlocutory
ruling; it is resorted only to correct a grave abuse of discretion or a whimsical
exercise of judgment equivalent to lack of jurisdiction. Its function is limited to
keeping an inferior court within its jurisdiction and to relieve persons from
arbitrary acts – acts which courts or judges have no power or authority in law
to perform. It is not designed to correct erroneous findings and conclusions
made by the courts. (Emphasis supplied)
Even assuming that certiorari is the proper remedy, the trial court did not
commit grave abuse of discretion in denying respondent’s motion to dismiss. It,
in fact, acted correctly when it issued the questioned orders as respondent’s
motion to dismiss was filed SIX YEARS AND FIVE MONTHS AFTER SHE
FILED HER AMENDED ANSWER. This circumstance alone already warranted
the outright dismissal of the motion for having been filed in clear contravention
of the express mandate of Section 1, Rule 16, of the Revised Rules of Court.
Under this provision, a motion to dismiss shall be filed within the time for but
before the filing of an answer to the complaint or pleading asserting a claim.24
More importantly, respondent’s motion to dismiss was filed after petitioner has
completed the presentation of its evidence in the trial court, giving credence to
petitioner’s and the trial court’s conclusion that the filing of the motion to
dismiss was a mere ploy on the part of respondent to delay the prompt
resolution of the case against her.
Also worth mentioning is the fact that respondent’s motion to dismiss under
consideration herein is not the first motion to dismiss she filed in the trial court.
It appears that she had filed an earlier motion to dismiss26 on the sole ground
of the unenforceability of petitioner’s claim under the Statute of Frauds, which
motion was denied by the trial court. More telling is the following narration of
the trial court in its Order denying respondent’s motion for reconsideration of
the denial of her motion to dismiss:
As can be gleaned from the records, with the admission of plaintiff’s exhibits,
reception of defendants’ evidence was set on March 31, and April 23, 2004 x x
x . On motion of the defendants, the hearing on March 31, 2004 was cancelled.
On April 14, 2004, defendants sought the issuance of subpoena ad
testificandum and duces tecum to one Gina M. Madulid, to appear and testify
for the defendants on April 23, 2004. Reception of defendants’ evidence was
again deferred to May 26, June 2 and June 30, 2004, x x x.
On May 13, 2004, defendants sought again the issuance of a subpoena duces
tecum and ad testificandum to the said Gina Madulid. On May 26, 2004,
reception of defendants [sic] evidence was cancelled upon the agreement of
the parties. On July 28, 2004, in the absence of defendants’ witness, hearing
was reset to September 24 and October 8, 2004 x x x.
On September 24, 2004, counsel for defendants was given a period of fifteen
(15) days to file a demurrer to evidence. On October 7, 2004, defendants filed
instead a Motion to Dismiss x x x.27
Respondent’s act of filing multiple motions, such as the first and earlier motion
to dismiss and then the motion to dismiss at issue here, as well as several
motions for postponement, lends credibility to the position taken by petitioner,
which is shared by the trial court, that respondent is
deliberately impeding the early disposition of this case. The filing of the second
motion to dismiss was, therefore, "not only improper but also dilatory."28 Thus,
the trial court, "far from deviating or straying off course from established
jurisprudence on the matter, x x x had in fact faithfully observed the law and
legal precedents in this case."29 The Court of Appeals, therefore, erred not only
in entertaining respondent’s petition for certiorari, it likewise erred in ruling that
the trial court committed grave abuse of discretion when it denied respondent’s
motion to dismiss.
On whether or not respondent is estopped from
questioning the jurisdiction of the trial court
At the outset, it must be here stated that, as the succeeding discussions will
demonstrate, jurisdiction over the person of Manuel should not be an issue in
this case. A protracted discourse on jurisdiction is, nevertheless, demanded by
the fact that jurisdiction has been raised as an issue from the lower court, to
the Court of Appeals and, finally, before this Court. For the sake of clarity, and
in order to finally settle the controversy and fully dispose of all the issues in this
case, it was deemed imperative to resolve the issue of jurisdiction.
1. Aspects of Jurisdiction
Petitioner calls attention to the fact that respondent’s motion to dismiss
questioning the trial court’s jurisdiction was filed more than six years after her
amended answer was filed. According to petitioner, respondent had several
opportunities, at various stages of the proceedings, to assail the trial court’s
jurisdiction but never did so for six straight years. Citing the doctrine laid down
in the case of Tijam, et al. v. Sibonghanoy, et al.30 petitioner claimed that
respondent’s failure to raise the question of jurisdiction at an earlier stage bars
her from later questioning it, especially since she actively participated in the
proceedings conducted by the trial court.
Petitioner’s argument is misplaced, in that, it failed to consider that the concept
of jurisdiction has several aspects, namely: (1) jurisdiction over the subject
matter; (2) jurisdiction over the parties; (3) jurisdiction over the issues of the
case; and (4) in cases involving property, jurisdiction over the res or the thing
which is the subject of the litigation.31
The aspect of jurisdiction which may be barred from being assailed as a result
of estoppel by laches is jurisdiction over the subject matter. Thus, in Tijam, the
case relied upon by petitioner, the issue involved was the authority of the then
Court of First Instance to hear a case for the collection of a sum of money in
the amount of ₱1,908.00 which amount was, at that time, within the exclusive
original jurisdiction of the municipal courts.
In subsequent cases citing the ruling of the Court in Tijam, what was likewise
at issue was the jurisdiction of the trial court over the subject matter of the
case. Accordingly, in Spouses Gonzaga v. Court of Appeals,32 the issue for
consideration was the authority of the regional trial court to hear and decide an
action for reformation of contract and damages involving a subdivision lot, it
being argued therein that jurisdiction is vested in the Housing and Land Use
Regulatory Board pursuant to PD 957 (The Subdivision and Condominium
Buyers Protective Decree). In Lee v. Presiding Judge, MTC, Legaspi
City,33 petitioners argued that the respondent municipal trial court had no
jurisdiction over the complaint for ejectment because the issue of ownership
was raised in the pleadings. Finally, in People v. Casuga,34 accused-appellant
claimed that the crime of grave slander, of which she was charged, falls within
the concurrent jurisdiction of municipal courts or city courts and the then courts
of first instance, and that the judgment of the court of first instance, to which
she had appealed the municipal court's conviction, should be deemed null and
void for want of jurisdiction as her appeal should have been filed with the Court
of Appeals or the Supreme Court.
In all of these cases, the Supreme Court barred the attack on the jurisdiction of
the respective courts concerned over the subject matter of the case based on
estoppel by laches, declaring that parties cannot be allowed to belatedly adopt
an inconsistent posture by attacking the jurisdiction of a court to which they
submitted their cause voluntarily.35
Here, what respondent was questioning in her motion to dismiss before the
trial court was that court’s jurisdiction over the person of defendant Manuel.
Thus, the principle of estoppel by laches finds no application in this case.
Instead, the principles relating to jurisdiction over the person of the parties are
pertinent herein.
The Rules of Court provide:
RULE 9
EFFECT OF FAILURE TO PLEAD
Section 1. Defenses and objections not pleaded. – Defenses and objections
not pleaded either in a motion to dismiss or in the answer are deemed waived.
However, when it appears from the pleadings or the evidence on record that
the court has no jurisdiction over the subject matter, that there is another
action pending between the same parties for the same cause, or that the
action is barred by a prior judgment or by statute of limitations, the court shall
dismiss the claim.
RULE 15
MOTIONS
Sec. 8. Omnibus motion. – Subject to the provisions of Section 1 of Rule 9, a
motion attacking a pleading, order, judgment, or proceeding shall include all
objections then available, and all objections not so included shall be deemed
waived.
Based on the foregoing provisions, the "objection on jurisdictional grounds
which is not waived even if not alleged in a motion to dismiss or the answer is
lack of jurisdiction over the subject matter. x x x Lack of jurisdiction over the
subject matter can always be raised anytime, even for the first time on appeal,
since jurisdictional issues cannot be waived x x x subject, however, to the
principle of estoppel by laches."36
Since the defense of lack of jurisdiction over the person of a party to a case is
not one of those defenses which are not deemed waived under Section 1 of
Rule 9, such defense must be invoked when an answer or a motion to dismiss
is filed in order to prevent a waiver of the defense.37 If the objection is not
raised either in a motion to dismiss or in the answer, the objection to the
jurisdiction over the person of the plaintiff or the defendant is deemed waived
by virtue of the first sentence of the above-quoted Section 1 of Rule 9 of the
Rules of Court.38
The Court of Appeals, therefore, erred when it made a sweeping
pronouncement in its questioned decision, stating that "issue on jurisdiction
may be raised at any stage of the proceeding, even for the first time on appeal"
and that, therefore, respondent timely raised the issue in her motion to dismiss
and is, consequently, not estopped from raising the question of jurisdiction. As
the question of jurisdiction involved here is that over the person of the
defendant Manuel, the same is deemed waived if not raised in the answer or a
motion to dismiss. In any case, respondent cannot claim the defense since
"lack of jurisdiction over the person, being subject to waiver, is a personal
defense which can only be asserted by the party who can thereby waive it by
silence."39
2. Jurisdiction over the person of a defendant is acquired through a valid
service of summons; trial court did not acquire jurisdiction over the person of
Manuel Toledo
In the first place, jurisdiction over the person of Manuel was never acquired by
the trial court. A defendant is informed of a case against him when he receives
summons. "Summons is a writ by which the defendant is notified of the action
brought against him. Service of such writ is the means by which the court
acquires jurisdiction over his person."40
In the case at bar, the trial court did not acquire jurisdiction over the person of
Manuel since there was no valid service of summons upon him, precisely
because he was already dead even before the complaint against him and his
wife was filed in the trial court. The issues presented in this case are similar to
those in the case of Sarsaba v. Vda. de Te.41
In Sarsaba, the NLRC rendered a decision declaring that Patricio Sereno was
illegally dismissed from employment and ordering the payment of his monetary
claims. To satisfy the claim, a truck in the possession of Sereno’s employer
was levied upon by a sheriff of the NLRC, accompanied by Sereno and his
lawyer, Rogelio Sarsaba, the petitioner in that case. A complaint for recovery
of motor vehicle and damages, with prayer for the delivery of the truck
pendente lite was eventually filed against Sarsaba, Sereno, the NLRC sheriff
and the NLRC by the registered owner of the truck. After his motion to dismiss
was denied by the trial court, petitioner Sarsaba filed his answer. Later on,
however, he filed an omnibus motion to dismiss citing, as one of the grounds,
lack of jurisdiction over one of the principal defendants, in view of the fact that
Sereno was already dead when the complaint for recovery of possession was
filed.
Although the factual milieu of the present case is not exactly similar to that of
Sarsaba, one of the issues submitted for resolution in both cases is similar:
whether or not a case, where one of the named defendants was already dead
at the time of its filing, should be dismissed so that the claim may be pursued
instead in the proceedings for the settlement of the estate of the deceased
defendant. The petitioner in the Sarsaba Case claimed, as did respondent
herein, that since one of the defendants died before summons was served on
him, the trial court should have dismissed the complaint against all the
defendants and the claim should be filed against the estate of the deceased
defendant. The petitioner in Sarsaba, therefore, prayed that the complaint be
dismissed, not only against Sereno, but as to all the defendants, considering
that the RTC did not acquire jurisdiction over the person of Sereno.42 This is
exactly the same prayer made by respondent herein in her motion to dismiss.
The Court, in the Sarsaba Case, resolved the issue in this wise:
x x x We cannot countenance petitioner’s argument that the complaint against
the other defendants should have been dismissed, considering that the RTC
never acquired jurisdiction over the person of Sereno. The court’s failure to
acquire jurisdiction over one’s person is a defense which is personal to the
person claiming it. Obviously, it is now impossible for Sereno to invoke the
same in view of his death. Neither can petitioner invoke such ground, on behalf
of Sereno, so as to reap the benefit of having the case dismissed against all of
the defendants. Failure to serve summons on Sereno’s person will not be a
cause for the dismissal of the complaint against the other defendants,
considering that they have been served with copies of the summons and
complaints and have long submitted their respective responsive pleadings. In
fact, the other defendants in the complaint were given the chance to raise all
possible defenses and objections personal to them in their respective motions
to dismiss and their subsequent answers.43 (Emphasis supplied.)
Hence, the Supreme Court affirmed the dismissal by the trial court of the
complaint against Sereno only.
Based on the foregoing pronouncements, there is no basis for dismissing the
complaint against respondent herein. Thus, as already emphasized above, the
trial court correctly denied her motion to dismiss.
On whether or not the estate of Manuel
Toledo is an indispensable party
Rule 3, Section 7 of the 1997 Rules of Court states:
SEC. 7. Compulsory joinder of indispensable parties. – Parties-in-interest
without whom no final determination can be had of an action shall be joined
either as plaintiffs or defendants.
An indispensable party is one who has such an interest in the controversy or
subject matter of a case that a final adjudication cannot be made in his or her
absence, without injuring or affecting that interest. He or she is a party who has
not only an interest in the subject matter of the controversy, but "an interest of
such nature that a final decree cannot be made without affecting that interest
or leaving the controversy in such a condition that its final determination may
be wholly inconsistent with equity and good conscience. It has also been
considered that an indispensable party is a person in whose absence there
cannot be a determination between the parties already before the court which
is effective, complete or equitable." Further, an indispensable party is one who
must be included in an action before it may properly proceed.44
On the other hand, a "person is not an indispensable party if his interest in the
controversy or subject matter is separable from the interest of the other parties,
so that it will not necessarily be directly or injuriously affected by a decree
which does complete justice between them. Also, a person is not an
indispensable party if his presence would merely permit complete relief
between him or her and those already parties to the action, or if he or she has
no interest in the subject matter of the action." It is not a sufficient reason to
declare a person to be an indispensable party simply because his or her
presence will avoid multiple litigations.45
Applying the foregoing pronouncements to the case at bar, it is clear that the
estate of Manuel is not an indispensable party to the collection case, for the
simple reason that the obligation of Manuel and his wife, respondent herein, is
solidary.
The contract between petitioner, on the one hand and respondent and
respondent’s husband, on the other, states:
FOR VALUE RECEIVED, I/We jointly and severally46 (in solemn) promise to
pay BOSTON EQUITY RESOURCES, INC. x x x the sum of PESOS: [ONE
MILLION FOUR HUNDRED (₱1,400,000.00)] x x x.47
The provisions and stipulations of the contract were then followed by the
respective signatures of respondent as "MAKER" and her husband as "CO-
MAKER."48 Thus, pursuant to Article 1216 of the Civil Code, petitioner may
collect the entire amount of the obligation from respondent only. The
aforementioned provision states: "The creditor may proceed against any one of
the solidary debtors or some or all of them simultaneously. The demand made
against one of them shall not be an obstacle to those which may subsequently
be directed against the others, so long as the debt has not been fully
collected."
In other words, the collection case can proceed and the demands of petitioner
can be satisfied by respondent only, even without impleading the estate of
Manuel. Consequently, the estate of Manuel is not an indispensable party to
petitioner’s complaint for sum of money.
However, the Court of Appeals, agreeing with the contention of respondent,
held that the claim of petitioner should have been filed against the estate of
Manuel in accordance with Sections 5 and 6 of Rule 86 of the Rules of Court.
The aforementioned provisions provide:
SEC. 5. Claims which must be filed under the notice. If not filed, barred;
exceptions. All claims for money against the decedent, arising from contract,
express or implied, whether the same be due, not due, or contingent, all claims
for funeral expenses and judgment for money against the decedent, must be
filed within the time limited in the notice; otherwise, they are barred forever,
except that they may be set forth as counterclaims in any action that the
executor or administrator may bring against the claimants. x x x.
SEC. 6. Solidary obligation of decedent. Where the obligation of the decedent
is solidary with another debtor, the claim shall be filed against the decedent as
if he were the only debtor, without prejudice to the right of the estate to recover
contribution from the other debtor. x x x.
The Court of Appeals erred in its interpretation of the above-quoted provisions.
In construing Section 6, Rule 87 of the old Rules of Court, the precursor of
Section 6, Rule 86 of the Revised Rules of Court, which latter provision has
been retained in the present Rules of Court without any revisions, the Supreme
Court, in the case of Manila Surety & Fidelity Co., Inc. v. Villarama, et.
al.,49 held:50
Construing Section 698 of the Code of Civil Procedure from whence [Section
6, Rule 87] was taken, this Court held that where two persons are bound in
solidum for the same debt and one of them dies, the whole indebtedness can
be proved against the estate of the latter, the decedent’s liability being
absolute and primary; x x x. It is evident from the foregoing that Section 6 of
Rule 87 provides the procedure should the creditor desire to go against the
deceased debtor, but there is certainly nothing in the said provision making
compliance with such procedure a condition precedent before an ordinary
action against the surviving solidary debtors, should the creditor choose to
demand payment from the latter, could be entertained to the extent that failure
to observe the same would deprive the court jurisdiction to take cognizance of
the action against the surviving debtors. Upon the other hand, the Civil Code
expressly allows the creditor to proceed against any one of the solidary
debtors or some or all of them simultaneously. There is, therefore, nothing
improper in the creditor’s filing of an action against the surviving solidary
debtors alone, instead of instituting a proceeding for the settlement of the
estate of the deceased debtor wherein his claim could be filed.
The foregoing ruling was reiterated and expounded in the later case of
Philippine National Bank v. Asuncion51where the Supreme Court pronounced:
A cursory perusal of Section 6, Rule 86 of the Revised Rules of Court reveals
that nothing therein prevents a creditor from proceeding against the surviving
solidary debtors. Said provision merely sets up the procedure in enforcing
collection in case a creditor chooses to pursue his claim against the estate of
the deceased solidary debtor. The rule has been set forth that a creditor (in a
solidary obligation) has the option whether to file or not to file a claim against
the estate of the solidary debtor. x x x
xxxx
It is crystal clear that Article 1216 of the New Civil Code is the applicable
provision in this matter. Said provision gives the creditor the right to "proceed
against anyone of the solidary debtors or some or all of them simultaneously."
The choice is undoubtedly left to the solidary creditor to determine against
whom he will enforce collection. In case of the death of one of the solidary
debtors, he (the creditor) may, if he so chooses, proceed against the surviving
solidary debtors without necessity of filing a claim in the estate of the deceased
debtors. It is not mandatory for him to have the case dismissed as against the
surviving debtors and file its claim against the estate of the deceased solidary
debtor, x x x. For to require the creditor to proceed against the estate, making
it a condition precedent for any collection action against the surviving debtors
to prosper, would deprive him of his substantive rightsprovided by Article 1216
of the New Civil Code. (Emphasis supplied.)
As correctly argued by petitioner, if Section 6, Rule 86 of the Revised Rules of
Court were applied literally, Article 1216 of the New Civil Code would, in effect,
be repealed since under the Rules of Court, petitioner has no choice but to
proceed against the estate of [the deceased debtor] only. Obviously, this
provision diminishes the [creditor’s] right under the New Civil Code to proceed
against any one, some or all of the solidary debtors. Such a construction is not
sanctioned by principle, which is too well settled to require citation, that a
substantive law cannot be amended by a procedural rule. Otherwise stated,
Section 6, Rule 86 of the Revised Rules of Court cannot be made to prevail
over Article 1216 of the New Civil Code, the former being merely procedural,
while the latter, substantive.
Based on the foregoing, the estate of Manuel is not an indispensable party and
the case can proceed as against respondent only. That petitioner opted to
collect from respondent and not from the estate of Manuel is evidenced by its
opposition to respondent’s motion to dismiss asserting that the case, as
against her, should be dismissed so that petitioner can proceed against the
estate of Manuel.
On whether or not the inclusion of Manuel as
party defendant is a misjoinder of party
Section 11 of Rule 3 of the Rules of Court states that "neither misjoinder nor
non-joinder of parties is ground for dismissal of an action. Parties may be
dropped or added by order of the court on motion of any party or on its own
initiative at any stage of the action and on such terms as are just. Any claim
against a misjoined party may be severed and proceeded with separately."
Based on the last sentence of the afore-quoted provision of law, a misjoined
party must have the capacity to sue or be sued in the event that the claim by or
against the misjoined party is pursued in a separate case. In this case,
therefore, the inclusion of Manuel in the complaint cannot be considered a
misjoinder, as in fact, the action would have proceeded against him had he
been alive at the time the collection case was filed by petitioner. This being the
case, the remedy provided by Section 11 of Rule 3 does not obtain here. The
name of Manuel as party-defendant cannot simply be dropped from the case.
Instead, the procedure taken by the Court in Sarsaba v. Vda. de Te,52whose
facts, as mentioned earlier, resemble those of this case, should be followed
herein. There, the Supreme Court agreed with the trial court when it resolved
the issue of jurisdiction over the person of the deceased Sereno in this wise:
As correctly pointed by defendants, the Honorable Court has not acquired
jurisdiction over the person of Patricio Sereno since there was indeed no valid
service of summons insofar as Patricio Sereno is concerned. Patricio Sereno
died before the summons, together with a copy of the complaint and its
annexes, could be served upon him.
However, the failure to effect service of summons unto Patricio Sereno, one of
the defendants herein, does not render the action DISMISSIBLE, considering
that the three (3) other defendants, x x x, were validly served with summons
and the case with respect to the answering defendants may still proceed
independently. Be it recalled that the three (3) answering defendants have
previously filed a Motion to Dismiss the Complaint which was denied by the
Court.
Hence, only the case against Patricio Sereno will be DISMISSED and the
same may be filed as a claim against the estate of Patricio Sereno, but the
case with respect to the three (3) other accused [sic] will proceed. (Emphasis
supplied.)53
As a result, the case, as against Manuel, must be dismissed.
In addition, the dismissal of the case against Manuel is further warranted by
Section 1 of Rule 3 of the Rules of Court, which states that: only natural or
juridical persons, or entities authorized by law may be parties in a civil action."
Applying this provision of law, the Court, in the case of Ventura v.
Militante,54 held:
Parties may be either plaintiffs or defendants. x x x. In order to maintain an
action in a court of justice, the plaintiff must have an actual legal existence,
that is, he, she or it must be a person in law and possessed of a legal entity as
either a natural or an artificial person, and no suit can be lawfully prosecuted
save in the name of such a person.
The rule is no different as regards party defendants. It is incumbent upon a
plaintiff, when he institutes a judicial proceeding, to name the proper party
defendant to his cause of action. In a suit or proceeding in personam of an
adversary character, the court can acquire no jurisdiction for the purpose of
trial or judgment until a party defendant who actually or legally exists and is
legally capable of being sued, is brought before it. It has even been held that
the question of the legal personality of a party defendant is a question of
substance going to the jurisdiction of the court and not one of procedure.
The original complaint of petitioner named the "estate of Carlos Ngo as
represented by surviving spouse Ms. Sulpicia Ventura" as the
defendant. Petitioner moved to dismiss the same on the ground that the
1âw phi 1
defendant as named in the complaint had no legal personality. We agree.
x x x. Considering that capacity to be sued is a correlative of the capacity to
sue, to the same extent, a decedent does not have the capacity to be sued and
may not be named a party defendant in a court action. (Emphases supplied.)
Indeed, where the defendant is neither a natural nor a juridical person or an
entity authorized by law, the complaint may be dismissed on the ground that
the pleading asserting the claim states no cause of action or for failure to state
a cause of action pursuant to Section 1(g) of Rule 16 of the Rules of Court,
because a complaint cannot possibly state a cause of action against one who
cannot be a party to a civil action.55
Since the proper course of action against the wrongful inclusion of Manuel as
party-defendant is the dismissal of the case as against him, thus did the trial
court err when it ordered the substitution of Manuel by his heirs. Substitution is
proper only where the party to be substituted died during the pendency of the
case, as expressly provided for by Section 16, Rule 3 of the Rules of Court,
which states:
Death of party;duty of counsel. – Whenever a party to a pending action dies,
and the claim is not thereby extinguished, it shall be the duty of his counsel to
inform the court within thirty (30) days after such death of the fact thereof, and
to give the name and address of his legal representative or representatives. x x
x
The heirs of the deceased may be allowed to be substituted for the deceased,
without requiring the appointment of an executor or administrator x x x.
The court shall forthwith order said legal representative or representatives to
appear and be substituted within a period of thirty (30) days from notice.
(Emphasis supplied.)
Here, since Manuel was already dead at the time of the filing of the complaint,
the court never acquired jurisdiction over his person and, in effect, there was
no party to be substituted.
WHEREFORE, the petition is GRANTED. The Decision dated 28 February
2006 and the Resolution dated 1 August 2006 of the Court of Appeals in CA-
G.R. SP No. 88586 are REVERSED and SET ASIDE. The Orders of the
Regional Trial Court dated 8 November 2004 and 22 December 2004,
respectively, in Civil Case No. 97-86672, are REINSTATED. The Regional
Trial Court, Branch 24, Manila is hereby DIRECTED to proceed with the trial of
Civil Case No. 97-86672 against respondent Lolita G. Toledo only, in
accordance with the above pronouncements of the Court, and to decide the
case with dispatch.
SO ORDERED.
JOSE PORTUGAL PEREZ Crispin reported the incident to the Talavera Police Station and respondent
Associate Justice Standard Insurance Co., Inc. (Standard), insurer of the jeepney. The total cost
of the repair was P21,415.00, but respondent Standard paid only P8,000.00.
WE CONCUR: Martina Gicale shouldered the balance of P13,415.00.

Thereafter, Standard and Martina, respondents, demanded reimbursement

from petitioners Pantranco and its driver Alexander Buncan, but they refused.
This prompted respondents to file with the Regional Trial Court (RTC), Branch
94, Manila, a complaint for sum of money.

In their answer, both petitioners specifically denied the allegations in the

complaint and averred that it is the Metropolitan Trial Court, not the RTC,
which has jurisdiction over the case.

THIRD DIVISION On June 5, 1992, the trial court rendered a Decision3 in favor of respondents
Standard and Martina, thus:
G.R. No. 140746 March 16, 2005
"WHEREFORE, and in view of the foregoing considerations, judgment
PANTRANCO NORTH EXPRESS, INC., and ALEXANDER is hereby rendered in favor of the plaintiffs, Standard Insurance
BUNCAN, Petitioner, Company and Martina Gicale, and against defendants Pantranco Bus
vs. Company and Alexander Buncan, ordering the latter to pay as follows:
STANDARD INSURANCE COMPANY, INC., and MARTINA
GICALE, Respondents. (1) to pay plaintiff Standard Insurance the amount of P8,000.00 with
interest due thereon from November 27, 1984 until fully paid;
DECISION
(2) to pay plaintiff Martina Gicale the amount of P13,415.00 with
SANDOVAL-GUTIERREZ, J.: interest due thereon from October 22, 1984 until fully paid;

Before us is a petition for review on certiorari assailing the Decision1 dated July (3) to pay the sum of P10,000.00 for attorney’s fees;
23 1999 and Resolution2 dated November 4, 1999 of the Court of Appeals in
CA-G.R. CV No. 38453, entitled "Standard Insurance Company, Inc., and (4) to pay the expenses of litigation and the cost of suit.
Martina Gicale vs. PANTRANCO North Express, Inc., and Alexander Buncan."
SO ORDERED."
In the afternoon of October 28, 1984, Crispin Gicale was driving the passenger
jeepney owned by his mother Martina Gicale, respondent herein. It was then
On appeal, the Court of Appeals, in a Decision4 dated July 23, 1999, affirmed
raining. While driving north bound along the National Highway in Talavera,
the trial court’s ruling, holding that:
Nueva Ecija, a passenger bus, owned by Pantranco North Express, Inc.,
petitioner, driven by Alexander Buncan, also a petitioner, was trailing behind.
When the two vehicles were negotiating a curve along the highway, the "The appellants argue that appellee Gicale’s claim of P13,415.00 and
passenger bus overtook the jeepney. In so doing, the passenger bus hit the left appellee insurance company’s claim of P8,000.00 individually fell
rear side of the jeepney and sped away. under the exclusive original jurisdiction of the municipal trial court. This
is not correct because under the Totality Rule provided for under Sec.
19, Batas Pambansa Bilang 129, it is the sum of the two claims that
determines the jurisdictional amount.
xxx
In the case at bench, the total of the two claims is definitely more
than P20,000.00 which at the time of the incident in question was the
jurisdictional amount of the Regional Trial Court.
Appellants contend that there was a misjoinder of parties. Assuming
that there was, under the Rules of Court (Sec. 11, Rule 7) as well as
under the Rules of Civil Procedure (ditto), the same does not affect the
jurisdiction of the court nor is it a ground to dismiss the complaint.
xxx
It does not need perspicacity in logic to see that appellees Gicale’s and
insurance company’s individual claims against appellees (sic) arose
from the same vehicular accident on October 28, 1984 involving
appellant Pantranco’s bus and appellee Gicale’s jeepney. That being
the case, there was a question of fact common to all the parties:
Whose fault or negligence caused the damage to the jeepney?
Appellants submit that they were denied their day in court because the
case was deemed submitted for decision "without even declaring
defendants in default or to have waived the presentation of evidence."
This is incorrect. Of course, the court did not declare defendants in
default because that is done only when the defendant fails to tender an
answer within the reglementary period. When the lower court ordered
that the case is deemed submitted for decision that meant that the
defendants were deemed to have waived their right to present
evidence. If they failed to adduce their evidence, they should blame
nobody but themselves. They failed to be present during the scheduled
hearing for the reception of their evidence despite notice and without
any motion or explanation. They did not even file any motion for
reconsideration of the order considering the case submitted for
decision.
Finally, contrary to the assertion of the defendant-appellants, the
evidence preponderantly established their liability for quasi-delict under
Article 2176 of the Civil Code."
Petitioners filed a motion for reconsideration but was denied by the Appellate
Court in a Resolution dated November 4, 1999.
Hence, this petition for review on certiorari raising the following assignments of
error:
"I
WHETHER OR NOT THE TRIAL COURT HAS JURISDICTION OVER
THE SUBJECT OF THE ACTION CONSIDERING THAT
RESPONDENTS’ RESPECTIVE CAUSE OF ACTION AGAINST
PETITIONERS DID NOT ARISE OUT OF THE SAME TRANSACTION
NOR ARE THERE QUESTIONS OF LAW AND FACTS COMMON TO
BOTH PETITIONERS AND RESPONDENTS.
II
WHETHER OR NOT PETITIONERS ARE LIABLE TO
RESPONDENTS CONSIDERING THAT BASED ON THE EVIDENCE
ADDUCED AND LAW APPLICABLE IN THE CASE AT BAR,
RESPONDENTS HAVE NOT SHOWN ANY RIGHT TO THE RELIEF
PRAYED FOR.
III
WHETHER OR NOT PETITIONERS WERE DEPRIVED OF THEIR
RIGHT TO DUE PROCESS."
For their part, respondents contend that their individual claims arose out of the
same vehicular accident and involve a common question of fact and law.
Hence, the RTC has jurisdiction over the case.
I
Petitioners insist that the trial court has no jurisdiction over the case since the
cause of action of each respondent did not arise from the same transaction
and that there are no common questions of law and fact common to both
parties. Section 6, Rule 3 of the Revised Rules of Court,5 provides:
"Sec. 6. 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."
Permissive joinder of parties requires that: (a) the right to relief arises out of
the same transaction or series of transactions; (b) there is a question of law or
fact common to all the plaintiffs or defendants; and (c) such joinder is not
otherwise proscribed by the provisions of the Rules on jurisdiction and venue.6
In this case, there is a single transaction common to all, that is, Pantranco’s
bus hitting the rear side of the jeepney. There is also a common question of
fact, that is, whether petitioners are negligent. There being a single transaction
common to both respondents, consequently, they have the same cause of
action against petitioners.
To determine identity of cause of action, it must be ascertained whether the
same evidence which is necessary to sustain the second cause of action
would have been sufficient to authorize a recovery in the first.7 Here, had
respondents filed separate suits against petitioners, the same evidence would
have been presented to sustain the same cause of action. Thus, the filing by
both respondents of the complaint with the court below is in order. Such joinder
of parties avoids multiplicity of suit and ensures the convenient, speedy and
orderly administration of justice.
Corollarily, Section 5(d), Rule 2 of the same Rules provides:
"Sec. 5. Joinder of causes of action. – A party may in one pleading
assert, in the alternative or otherwise, as many causes of action as he
may have against an opposing party, subject to the following
conditions:
xxx
(d) Where the claims in all the causes of action are principally for
recovery of money the aggregate amount claimed shall be the test of
jurisdiction."
The above provision presupposes that the different causes of action which are
joined accrue in favor of the same plaintiff/s and against the same defendant/s
and that no misjoinder of parties is involved.8 The issue of whether
respondents’ claims shall be lumped together is determined by paragraph (d)
of the above provision. This paragraph embodies the "totality rule" as
exemplified by Section 33 (1) of B.P. Blg. 1299 which states, among others,
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."
As previously stated, respondents’ cause of action against petitioners arose
out of the same transaction. Thus, the amount of the demand shall be the
totality of the claims.
Respondent Standard’s claim is P8,000.00, while that of respondent Martina
Gicale is P13,415.00, or a total of P21,415.00. Section 19 of B.P. Blg. 129
provides that the RTC has "exclusive original jurisdiction over all other cases,
in which the demand, exclusive of interest and cost or the value of the property
in controversy, amounts to more than twenty thousand pesos (P20,000.00)."
Clearly, it is the RTC that has jurisdiction over the instant case. It bears
emphasis that when the complaint was filed, R.A. 7691 expanding the
jurisdiction of the Metropolitan, Municipal and Municipal Circuit Trial Courts
had not yet taken effect. It became effective on April 15, 1994.
II
The finding of the trial court, affirmed by the Appellate Court, that petitioners
are negligent and thus liable to respondents, is a factual finding which is
binding upon us, a rule well-established in our jurisprudence. It has been
repeatedly held that the trial court's factual findings, when affirmed by the
Appellate Court, are conclusive and binding upon this Court, if they are not
tainted with arbitrariness or oversight of some fact or circumstance of
significance and influence. Petitioners have not presented sufficient ground to
warrant a deviation from this rule.10
III
There is no merit in petitioners’ contention that they were denied due process.
Records show that during the hearing, petitioner Pantranco’s counsel filed two
motions for resetting of trial which were granted by the trial court.
Subsequently, said counsel filed a notice to withdraw. After respondents had
presented their evidence, the trial court, upon petitioners’ motion, reset the
hearing to another date. On this date, Pantranco failed to appear. Thus, the
trial court warned Pantranco that should it fail to appear during the next
hearing, the case will be submitted for resolution on the basis of the evidence
presented. Subsequently, Pantranco’s new counsel manifested that his client
is willing to settle the case amicably and moved for another postponement.
The trial court granted the motion. On the date of the hearing, the new counsel
manifested that Pantranco’s employees are on strike and moved for another
postponement. On the next hearing, said counsel still failed to appear. Hence,
the trial court considered the case submitted for decision.
We have consistently held that the essence of due process is simply an
opportunity to be heard, or an opportunity to explain one’s side or an
opportunity to seek for a reconsideration of the action or ruling complained of.11
Petitioner Pantranco filed an answer and participated during the trial and
presentation of respondents’ evidence. It was apprised of the notices of
hearing issued by the trial court. Indeed, it was afforded fair and reasonable
opportunity to explain its side of the controversy. Clearly, it was not denied of
its right to due process. What is frowned upon is the absolute lack of notice
and hearing which is not present here.
WHEREFORE, the petition is DENIED. The assailed Decision dated July 23
1999 and Resolution dated November 4, 1999 of the Court of Appeals in CA-
G.R. CV No. 38453 are hereby AFFIRMED. Costs against petitioners.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-21450 April 15, 1968
SERAFIN TIJAM, ET AL., plaintiffs-appellees,
vs.
MAGDALENO SIBONGHANOY alias GAVINO SIBONGHANOY and LUCIA
BAGUIO, defendants,
MANILA SURETY AND FIDELITY CO., INC. (CEBU BRANCH) bonding
company and defendant-appellant.
F. S. Urot and G. A. Uriate for plaintiffs-appellees.
Carlos J. Cuizon for defendants Gavino Sibonghanoy and Lucia Baguio.
Villaluz Law Office, Velasco Law Office, Pages and Soberano for defendant-
appellant Manila Surety and Fidelity Company, Inc.
DIZON, J.:
On July 19, 1948 — barely one month after the effectivity of Republic Act No.
296 known as the Judiciary Act of 1948 — the spouses Serafin Tijam and
Felicitas Tagalog commenced Civil Case No. R-660 in the Court of First
Instance of Cebu against the spouses Magdaleno Sibonghanoy and Lucia
Baguio to recover from them the sum of P1,908.00, with legal interest thereon
from the date of the filing of the complaint until the whole obligation is paid,
plus costs. As prayed for in the complaint, a writ of attachment was issued by
the court against defendants' properties, but the same was soon dissolved
upon the filing of a counter-bond by defendants and the Manila Surety and
Fidelity Co., Inc. hereinafter referred to as the Surety, on the 31st of the same
month.
After being duly served with summons the defendants filed their answer in
which, after making some admissions and denials of the material averments of
the complaint, they interposed a counterclaim. This counterclaim was
answered by the plaintiffs.
After trial upon the issues thus joined, the Court rendered judgment in favor of
the plaintiffs and, after the same had become final and executory, upon motion
of the latter, the Court issued a writ of execution against the defendants. The
writ having been returned unsatisfied, the plaintiffs moved for the issuance of a
writ of execution against the Surety's bond (Rec. on Appeal, pp. 46-49),
against which the Surety filed a written opposition (Id. pp. 49) upon two
grounds, namely, (1) Failure to prosecute and (2) Absence of a demand upon
the Surety for the payment of the amount due under the judgment. Upon these
grounds the Surety prayed the Court not only to deny the motion for execution
against its counter-bond but also the following affirmative relief : "to relieve the
herein bonding company of its liability, if any, under the bond in question" (Id.
p. 54) The Court denied this motion on the ground solely that no previous
demand had been made on the Surety for the satisfaction of the judgment.
Thereafter the necessary demand was made, and upon failure of the Surety to
satisfy the judgment, the plaintiffs filed a second motion for execution against
the counterbond. On the date set for the hearing thereon, the Court, upon
motion of the Surety's counsel, granted the latter a period of five days within
which to answer the motion. Upon its failure to file such answer, the Court
granted the motion for execution and the corresponding writ was issued.
Subsequently, the Surety moved to quash the writ on the ground that the same
was issued without the required summary hearing provided for in Section 17 of
Rule 59 of the Rules of Court. As the Court denied the motion, the Surety
appealed to the Court of Appeals from such order of denial and from the one
denying its motion for reconsideration (Id. p. 97). Its record on appeal was then
printed as required by the Rules, and in due time it filed its brief raising therein
no other question but the ones covered by the following assignment of errors:
I. That the Honorable Court a quo erred in issuing its order dated
November 2, 1957, by holding the incident as submitted for resolution,
without a summary hearing and compliance with the other mandatory
requirements provided for in Section 17, Rule 59 of the Rules of Court.
II. That the Honorable Court a quo erred in ordering the issuance of
execution against the herein bonding company-appellant.
III. That the Honorable Court a quo erred in denying the motion to
quash the writ of execution filed by the herein bonding company-
appellant as well as its subsequent motion for reconsideration, and/or
in not quashing or setting aside the writ of execution.
Not one of the assignment of errors — it is obvious — raises the question of
lack of jurisdiction, neither directly nor indirectly.
Although the appellees failed to file their brief, the Court of Appeals, on
December 11, 1962, decided the case affirming the orders appealed from.
On January 8, 1963 — five days after the Surety received notice of the
decision, it filed a motion asking for extension of time within which to file a
motion for reconsideration. The Court of Appeals granted the motion in its
resolution of January 10 of the same year. Two days later the Surety filed a
pleading entitled MOTION TO DISMISS, alleging substantially that appellees
action was filed in the Court of First Instance of Cebu on July 19, 1948 for the
recovery of the sum of P1,908.00 only; that a month before that date Republic
Act No. 296, otherwise known as the Judiciary Act of 1948, had already
become effective, Section 88 of which placed within the original exclusive
jurisdiction of inferior courts all civil actions where the value of the subject-
matter or the amount of the demand does not exceed P2,000.00, exclusive of
interest and costs; that the Court of First Instance therefore had no jurisdiction
to try and decide the case. Upon these premises the Surety's motion prayed
the Court of Appeals to set aside its decision and to dismiss the case. By
resolution of January 16, 1963 the Court of Appeals required the appellees to
answer the motion to dismiss, but they failed to do so. Whereupon, on May 20
of the same year, the Court resolved to set aside its decision and to certify the
case to Us. The pertinent portions of its resolution read as follows:
It would indeed appear from the record that the action at bar, which is a
suit for collection of money in the sum of exactly P1,908.00 exclusive
of interest, was originally instituted in the Court of First Instance of
Cebu on July 19, 1948. But about a month prior to the filing of the
complaint, more specifically on June 17, 1948, the Judiciary Act of
1948 took effect, depriving the Court of First Instance of original
jurisdiction over cases in which the demand, exclusive of interest, is
not more than P2,000.00. (Secs. 44[c] and 86[b], R.A. No. 296.)
We believe, therefore, that the point raised in appellant's motion is an
important one which merits serious consideration. As stated, the
complaint was filed on July 19, 1948. This case therefore has been
pending now for almost 15 years, and throughout the entire proceeding
appellant never raised the question of jurisdiction until after receipt of
this Court's adverse decision.
There are three cases decided by the Honorable Supreme Court which
may be worthy of consideration in connection with this case, namely:
Tyson Tan, et al. vs. Filipinas Compañia de Seguros, et al., G.R. No. L-
10096, March 23, 1956; Pindangan Agricultural Co., Inc. vs. Jose P.
Dans, etc., et al., G.R. No. L-14591, September 26, 1962; and Alfredo
Montelibano, et al. vs. Bacolod-Murcia Milling Co., Inc., G.R. No. L-
15092, September 29, 1962, wherein the Honorable Supreme Court
frowned upon the 'undesirable practice' of appellants submitting their
case for decision and then accepting the judgment, if favorable, but
attacking it for lack of jurisdiction when adverse.
Considering, however, that the Supreme Court has the "exclusive"
appellate jurisdiction over "all cases in which the jurisdiction of any
inferior court is in issue" (See. 1, Par. 3[3], Judiciary Act of 1948, as
amended), we have no choice but to certify, as we hereby do certify,
this case to the Supreme Court.
1äwphï1.ñët
 ACCORDINGLY, pursuant to Section 31 of the Judiciary Act of 1948
as amended, let the record of this case be forwarded to the Supreme
Court.
It is an undisputed fact that the action commenced by appellees in the Court of
First Instance of Cebu against the Sibonghanoy spouses was for the recovery
of the sum of P1,908.00 only — an amount within the original exclusive
jurisdiction of inferior courts in accordance with the provisions of the Judiciary
Act of 1948 which had taken effect about a month prior to the date when the
action was commenced. True also is the rule that jurisdiction over the subject
matter is conferred upon the courts exclusively by law, and as the lack of it
affects the very authority of the court to take cognizance of the case, the
objection may be raised at any stage of the proceedings. However, considering
the facts and circumstances of the present case — which shall forthwith be set
forth — We are of the opinion that the Surety is now barred by laches from
invoking this plea at this late hour for the purpose of annuling everything done
heretofore in the case with its active participation.
As already stated, the action was commenced in the Court of First Instance of
Cebu on July 19, 1948, that is, almostfifteen years before the Surety filed its
motion to dismiss on January 12, 1963 raising the question of lack of
jurisdiction for the first time.
It must be remembered that although the action, originally, was exclusively
against the Sibonghanoy spouses the Surety became a quasi-party therein
since July 31, 1948 when it filed a counter-bond for the dissolution of the writ of
attachment issued by the court of origin (Record on Appeal, pp. 15-19). Since
then, it acquired certain rights and assumed specific obligations in connection
with the pending case, in accordance with sections 12 and 17, Rule 57, Rules
of Court (Bautista vs. Joaquin, 46 Phil. 885; Kimpang & Co. vs. Javier, 65 Phil.
170).
Upon the filing of the first motion for execution against the counter-bond the
Surety not only filed a written opposition thereto praying for its denial but also
asked for an additional affirmative relief — that it be relieved of its liability
under the counter-bond upon the grounds relied upon in support of its
opposition — lack of jurisdiction of the court a quo not being one of them.
Then, at the hearing on the second motion for execution against the counter-
bond, the Surety appeared, through counsel, to ask for time within which to file
an answer or opposition thereto. This motion was granted, but instead of such
answer or opposition, the Surety filed the motion to dismiss mentioned
heretofore.
A party may be estopped or barred from raising a question in different ways
and for different reasons. Thus we speak of estoppel in pais, or estoppel by
deed or by record, and of estoppel by laches.
Laches, in a general sense is failure or neglect, for an unreasonable and
unexplained length of time, to do that which, by exercising due diligence, could
or should have been done earlier; it is negligence or omission to assert a right
within a reasonable time, warranting a presumption that the party entitled to
assert it either has abandoned it or declined to assert it.
The doctrine of laches or of "stale demands" is based upon grounds of public
policy which requires, for the peace of society, the discouragement of stale
claims and, unlike the statute of limitations, is not a mere question of time but
is principally a question of the inequity or unfairness of permitting a right or
claim to be enforced or asserted.
It has been held that a party can not invoke the jurisdiction of a court to sure
affirmative relief against his opponent and, after obtaining or failing to obtain
such relief, repudiate or question that same jurisdiction (Dean vs. Dean, 136
Or. 694, 86 A.L.R. 79). In the case just cited, by way of explaining the rule, it
was further said that the question whether the court had jurisdiction either of
the subject-matter of the action or of the parties was not important in such
cases because the party is barred from such conduct not because the
judgment or order of the court is valid and conclusive as an adjudication, but
for the reason that such a practice can not be tolerated — obviously for
reasons of public policy.
Furthermore, it has also been held that after voluntarily submitting a cause and
encountering an adverse decision on the merits, it is too late for the loser to
question the jurisdiction or power of the court (Pease vs. Rathbun-Jones etc.,
243 U.S. 273, 61 L. Ed. 715, 37 S. Ct. 283; St. Louis etc. vs. McBride, 141
U.S. 127, 35 L. Ed. 659). And in Littleton vs. Burgess, 16 Wyo. 58, the Court
said that it is not right for a party who has affirmed and invoked the jurisdiction
of a court in a particular matter to secure an affirmative relief, to afterwards
deny that same jurisdiction to escape a penalty.
Upon this same principle is what We said in the three cases mentioned in the
resolution of the Court of Appeals of May 20, 1963 (supra) — to the effect that
we frown upon the "undesirable practice" of a party submitting his case for
decision and then accepting the judgment, only if favorable, and attacking it for
lack of jurisdiction, when adverse — as well as in Pindañgan etc. vs. Dans, et
al., G.R. L-14591, September 26, 1962; Montelibano, et al., vs. Bacolod-
Murcia Milling Co., Inc., G.R. L-15092; Young Men Labor Union etc. vs. The
Court of Industrial Relation et al., G.R. L-20307, Feb. 26, 1965, and Mejia vs.
Lucas, 100 Phil. p. 277.
The facts of this case show that from the time the Surety became a quasi-party
on July 31, 1948, it could have raised the question of the lack of jurisdiction of
the Court of First Instance of Cebu to take cognizance of the present action by
reason of the sum of money involved which, according to the law then in force,
was within the original exclusive jurisdiction of inferior courts. It failed to do so.
Instead, at several stages of the proceedings in the court a quo as well as in
the Court of Appeals, it invoked the jurisdiction of said courts to obtain
affirmative relief and submitted its case for a final adjudication on the merits. It
was only after an adverse decision was rendered by the Court of Appeals that
it finally woke up to raise the question of jurisdiction. Were we to sanction such
conduct on its part, We would in effect be declaring as useless all the
proceedings had in the present case since it was commenced on July 19, 1948
and compel the judgment creditors to go up their Calvary once more. The
inequity and unfairness of this is not only patent but revolting.
Coming now to the merits of the appeal: after going over the entire record, We
have become persuaded that We can do nothing better than to quote in toto,
with approval, the decision rendered by the Court of Appeals on December 11,
1962 as follows:
In Civil Case No. R-660 of the Court of First Instance of Cebu, which
was a suit for collection of a sum of money, a writ of attachment was
issued against defendants' properties. The attachment, however, was
subsequently discharged under Section 12 of Rule 59 upon the filing
by defendants of a bond subscribed by Manila Surety & Fidelity Co.,
Inc.
After trial, judgment was rendered in favor of plaintiffs.
The writ of execution against defendants having been returned totally
unsatisfied, plaintiffs moved, under Section 17 of Rule 59, for issuance
of writ of execution against Manila Surety & Fidelity Co., Inc. to enforce
the obligation of the bond. But the motion was, upon the surety's
opposition, denied on the ground that there was "no showing that a
demand had been made, by the plaintiffs to the bonding company for
payment of the amount due under the judgment" (Record on Appeal, p.
60).
Hence, plaintiffs made the necessary demand upon the surety for
satisfaction of the judgment, and upon the latter's failure to pay the
amount due, plaintiffs again filed a motion dated October 31, 1957, for
issuance of writ of execution against the surety, with notice of hearing
on November 2, 1957. On October 31, 1957, the surety received copy
of said motion and notice of hearing.
It appears that when the motion was called on November 2, 1957, the
surety's counsel asked that he be given time within which to answer
the motion, and so an order was issued in open court, as follows: 1äw phï1.ñët
As prayed for, Atty. Jose P. Soberano, Jr., counsel for the
Manila Surety & Fidelity Co., Inc., Cebu Branch, is given until
Wednesday, November 6, 1957, to file his answer to the
motion for the issuance of a writ of execution dated October 30,
1957 of the plaintiffs, after which this incident shall be deemed
submitted for resolution.
SO ORDERED.
Given in open court, this 2nd day of November, 1957, at Cebu
City, Philippines.
(Sgd.) JOSE M. MENDOZA
Judge
(Record on Appeal, pp.
64-65, emphasis ours)
Since the surety's counsel failed to file any answer or objection within
the period given him, the court, on December 7, 1957, issued an order
granting plaintiffs' motion for execution against the surety; and on
December 12, 1957, the corresponding writ of execution was issued.
On December 24, 1957, the surety filed a motion to quash the writ of
execution on the ground that the same was "issued without the
requirements of Section 17, Rule 59 of the Rules of Court having been
complied with," more specifically, that the same was issued without the
required "summary hearing". This motion was denied by order of
February 10, 1958.
On February 25, 1958, the surety filed a motion for reconsideration of
the above-stated order of denial; which motion was likewise denied by
order of March 26, 1958.
From the above-stated orders of February 10, 1958 and March 26,
1958 — denying the surety's motion to quash the writ of execution and
motion for reconsideration, respectively — the surety has interposed
the appeal on hand.
The surety insists that the lower court should have granted its motion
to quash the writ of execution because the same was issued without
the summary hearing required by Section 17 of Rule 59, which reads;
"Sec. 17. When execution returned unsatisfied, recovery had
upon bond. — If the execution be returned unsatisfied in whole
or in part, the surety or sureties on any bond given pursuant to
the provisions of this role to secure the payment of the
judgment shall become finally charged on such bond, and
bound to pay to the plaintiff upon demand the amount due
under the judgment, which amount may be recovered from
such surety or sureties after notice and summary hearing in the
same action." (Emphasis ours)
Summary hearing is "not intended to be carried on in the formal
manner in which ordinary actions are prosecuted" (83 C.J.S. 792). It is,
rather, a procedure by which a question is resolved "with dispatch, with
the least possible delay, and in preference to ordinary legal and regular
judicial proceedings" (Ibid, p. 790). What is essential is that "the
defendant is notified or summoned to appear and is given an
opportunity to hear what is urged upon him, and to interpose a
defense, after which follows an adjudication of the rights of the parties"
(Ibid., pp. 793-794); and as to the extent and latitude of the hearing,
the same will naturally lie upon the discretion of the court, depending
upon the attending circumstances and the nature of the incident up for
consideration.
In the case at bar, the surety had been notified of the plaintiffs' motion
for execution and of the date when the same would be submitted for
consideration. In fact, the surety's counsel was present in court when
the motion was called, and it was upon his request that the court a
quo gave him a period of four days within which to file an answer. Yet
he allowed that period to lapse without filing an answer or objection.
The surety cannot now, therefore, complain that it was deprived of its
day in court.
It is argued that the surety's counsel did not file an answer to the
motion "for the simple reason that all its defenses can be set up during
the hearing of the motion even if the same are not reduced to writing"
(Appellant's brief, p. 4). There is obviously no merit in this pretense
because, as stated above, the record will show that when the motion
was called, what the surety's counsel did was to ask that he be allowed
and given time to file an answer. Moreover, it was stated in the order
given in open court upon request of the surety's counsel that after the
four-day period within which to file an answer, "the incident shall be
deemed submitted for resolution"; and counsel apparently agreed, as
the order was issued upon his instance and he interposed no objection
thereto.
It is also urged that although according to Section 17 of Rule 59, supra,
there is no need for a separate action, there must, however, be a
separate judgment against the surety in order to hold it liable on the
bond (Appellant's Brief, p. 15). Not so, in our opinion. A bond filed for
discharge of attachment is, per Section 12 of Rule 59, "to secure the
payment to the plaintiff of any judgment he may recover in the action,"
and stands "in place of the property so released". Hence, after the
judgment for the plaintiff has become executory and the execution is
"returned unsatisfied" (Sec. 17, Rule 59), as in this case, the liability of
the bond automatically attaches and, in failure of the surety to satisfy
the judgment against the defendant despite demand therefor, writ of
execution may issue against the surety to enforce the obligation of the
bond.
UPON ALL THE FOREGOING, the orders appealed from are hereby affirmed,
with costs against the appellant Manila Surety and Fidelity Company, Inc.
Reyes, Makalintal, Bengzon, J.P., Zaldivar, Sanchez, Castro, Angeles and
Fernando, JJ., concur
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 147406 July 14, 2008
VENANCIO FIGUEROA y CERVANTES,1 Petitioner,
vs.
PEOPLE OF THE PHILIPPINES, Respondent.
DECISION
NACHURA, J.:
When is a litigant estopped by laches from assailing the jurisdiction of a
tribunal? This is the paramount issue raised in this petition for review of the
February 28, 2001 Decision2 of the Court of Appeals (CA) in CA-G.R. CR No.
22697.
Pertinent are the following antecedent facts and proceedings:
On July 8, 1994, an information3 for reckless imprudence resulting in homicide
was filed against the petitioner before the Regional Trial Court (RTC) of
Bulacan, Branch 18.4 The case was docketed as Criminal Case No. 2235-M-
94.5 Trial on the merits ensued and on August 19, 1998, the trial court
convicted the petitioner as charged.6 In his appeal before the CA, the petitioner
questioned, among others, for the first time, the trial court’s jurisdiction.7
The appellate court, however, in the challenged decision, considered the
petitioner to have actively participated in the trial and to have belatedly
attacked the jurisdiction of the RTC; thus, he was already estopped by laches
from asserting the trial court’s lack of jurisdiction. Finding no other ground to
reverse the trial court’s decision, the CA affirmed the petitioner’s conviction but
modified the penalty imposed and the damages awarded.8
Dissatisfied, the petitioner filed the instant petition for review on certiorari
raising the following issues for our resolution:
a. Does the fact that the petitioner failed to raise the issue of
jurisdiction during the trial of this case, which was initiated and filed by
the public prosecutor before the wrong court, constitute laches in
relation to the doctrine laid down in Tijam v. Sibonghanoy,
notwithstanding the fact that said issue was immediately raised in
petitioner’s appeal to the Honorable Court of Appeals? Conversely,
does the active participation of the petitioner in the trial of his case,
which is initiated and filed not by him but by the public prosecutor,
amount to estoppel?
b. Does the admission of the petitioner that it is difficult
to immediately stop a bus while it is running at 40 kilometers per
hour for the purpose of avoiding a person who unexpectedly crossed
the road, constitute enough incriminating evidence to warrant his
conviction for the crime charged?
c. Is the Honorable Court of Appeals justified in considering the place
of accident as falling within Item 4 of Section 35 (b) of the Land
Transportation and Traffic Code, and subsequently ruling that the
speed limit thereto is only 20 kilometers per hour, when no evidence
whatsoever to that effect was ever presented by the prosecution during
the trial of this case?
d. Is the Honorable Court of Appeals justified in convicting the
petitioner for homicide through reckless imprudence (the legally correct
designation is "reckless imprudence resulting to homicide") with
violation of the Land Transportation and Traffic Code when the
prosecution did not prove this during the trial and, more importantly,
the information filed against the petitioner does not contain an
allegation to that effect?
e. Does the uncontroverted testimony of the defense witness Leonardo
Hernal that the victim unexpectedly crossed the road resulting in him
getting hit by the bus driven by the petitioner not enough evidence to
acquit him of the crime charged?9
Applied uniformly is the familiar rule that the jurisdiction of the court to hear
and decide a case is conferred by the law in force at the time of the institution
of the action, unless such statute provides for a retroactive application
thereof.10 In this case, at the time the criminal information for reckless
imprudence resulting in homicide with violation of the Automobile Law (now
Land Transportation and Traffic Code) was filed, Section 32(2) of Batas
Pambansa (B.P.) Blg. 12911 had already been amended by Republic Act No.
7691.12 The said provision thus reads:
Sec. 32. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and
Municipal Circuit Trial Courts in Criminal Cases.—Except in cases falling within
the exclusive original jurisdiction of Regional Trial Courts and the
Sandiganbayan, the Metropolitan Trial Courts, Municipal Trial Courts, and
Municipal Circuit Trial Courts shall exercise:
xxxx
(2) Exclusive original jurisdiction over all offenses punishable with
imprisonment not exceeding six (6) years irrespective of the amount of fine,
and regardless of other imposable accessory or other penalties, including the
civil liability arising from such offenses or predicated thereon, irrespective of
kind, nature, value or amount thereof: Provided, however, That in offenses
involving damage to property through criminal negligence, they shall have
exclusive original jurisdiction thereof.
As the imposable penalty for the crime charged herein is prision correccional in
its medium and maximum periods or imprisonment for 2 years, 4 months and 1
day to 6 years,13 jurisdiction to hear and try the same is conferred on the
Municipal Trial Courts (MTCs). Clearly, therefore, the RTC of Bulacan does not
have jurisdiction over Criminal Case No. 2235-M-94.
While both the appellate court and the Solicitor General acknowledge this fact,
they nevertheless are of the position that the principle of estoppel by laches
has already precluded the petitioner from questioning the jurisdiction of the
RTC—the trial went on for 4 years with the petitioner actively participating
therein and without him ever raising the jurisdictional infirmity. The petitioner,
for his part, counters that the lack of jurisdiction of a court over the subject
matter may be raised at any time even for the first time on appeal. As undue
delay is further absent herein, the principle of laches will not be applicable.
To settle once and for all this problem of jurisdiction vis-à-vis estoppel by
laches, which continuously confounds the bench and the bar, we shall analyze
the various Court decisions on the matter.
As early as 1901, this Court has declared that unless jurisdiction has been
conferred by some legislative act, no court or tribunal can act on a matter
submitted to it.14 We went on to state in U.S. v. De La Santa15 that:
It has been frequently held that a lack of jurisdiction over the subject-matter is
fatal, and subject to objection at any stage of the proceedings, either in the
court below or on appeal (Ency. of Pl. & Pr., vol. 12, p. 189, and large array of
cases there cited), and indeed, where the subject-matter is not within the
jurisdiction, the court may dismiss the proceeding ex mero motu. (4 Ill., 133;
190 Ind., 79; Chipman vs. Waterbury, 59 Conn., 496.)
Jurisdiction over the subject-matter in a judicial proceeding is conferred by the
sovereign authority which organizes the court; it is given only by law and in the
manner prescribed by law and an objection based on the lack of such
jurisdiction can not be waived by the parties. x x x16
Later, in People v. Casiano,17 the Court explained:
4. The operation of the principle of estoppel on the question of jurisdiction
seemingly depends upon whether the lower court actually had jurisdiction or
not. If it had no jurisdiction, but the case was tried and decided upon the theory
that it had jurisdiction, the parties are not barred, on appeal, from assailing
such jurisdiction, for the same "must exist as a matter of law, and may not be
conferred by consent of the parties or by estoppel" (5 C.J.S., 861-863).
However, if the lower court had jurisdiction, and the case was heard and
decided upon a given theory, such, for instance, as that the court had no
jurisdiction, the party who induced it to adopt such theory will not be permitted,
on appeal, to assume an inconsistent position—that the lower court had
jurisdiction. Here, the principle of estoppel applies. The rule that jurisdiction is
conferred by law, and does not depend upon the will of the parties, has no
bearing thereon. Thus, Corpus Juris Secundum says:
Where accused has secured a decision that the indictment is void, or has been
granted an instruction based on its defective character directing the jury to
acquit, he is estopped, when subsequently indicted, to assert that the former
indictment was valid. In such case, there may be a new prosecution whether
the indictment in the former prosecution was good or bad. Similarly, where,
after the jury was impaneled and sworn, the court on accused's motion
quashed the information on the erroneous assumption that the court had no
jurisdiction, accused cannot successfully plead former jeopardy to a new
information. x x x (22 C.J.S., sec. 252, pp. 388-389; italics ours.)
Where accused procured a prior conviction to be set aside on the ground that
the court was without jurisdiction, he is estopped subsequently to assert, in
support of a defense of previous jeopardy, that such court had jurisdiction." (22
C.J.S. p. 378.)18
But in Pindañgan Agricultural Co., Inc. v. Dans,19 the Court, in not sustaining
the plea of lack of jurisdiction by the plaintiff-appellee therein, made the
following observations:
It is surprising why it is only now, after the decision has been rendered, that the
plaintiff-appellee presents the question of this Court’s jurisdiction over the
case. Republic Act No. 2613 was enacted on August 1, 1959. This case was
argued on January 29, 1960. Notwithstanding this fact, the jurisdiction of this
Court was never impugned until the adverse decision of this Court was handed
down. The conduct of counsel leads us to believe that they must have always
been of the belief that notwithstanding said enactment of Republic Act 2613
this Court has jurisdiction of the case, such conduct being born out of a
conviction that the actual real value of the properties in question actually
exceeds the jurisdictional amount of this Court (over ₱200,000). Our minute
resolution in G.R. No. L-10096, Hyson Tan, et al. vs. Filipinas Compaña de
Seguros, et al., of March 23, 1956, a parallel case, is applicable to the conduct
of plaintiff-appellee in this case, thus:
x x x that an appellant who files his brief and submits his case to the Court of
Appeals for decision, without questioning the latter’s jurisdiction until decision
is rendered therein, should be considered as having voluntarily waived so
much of his claim as would exceed the jurisdiction of said Appellate Court; for
the reason that a contrary rule would encourage the undesirable practice of
appellants submitting their cases for decision to the Court of Appeals in
expectation of favorable judgment, but with intent of attacking its jurisdiction
should the decision be unfavorable: x x x20
Then came our ruling in Tijam v. Sibonghanoy21 that a party may be barred by
laches from invoking lack of jurisdiction at a late hour for the purpose of
annulling everything done in the case with the active participation of said party
invoking the plea. We expounded, thus:
A party may be estopped or barred from raising a question in different ways
and for different reasons. Thus, we speak of estoppel in pais, of estoppel by
deed or by record, and of estoppel by laches.
Laches, in a general sense, is failure or neglect, for an unreasonable and
unexplained length of time, to do that which, by exercising due diligence, could
or should have been done earlier; it is negligence or omission to assert a right
within a reasonable time, warranting a presumption that the party entitled to
assert it either has abandoned it or declined to assert it.
The doctrine of laches or of "stale demands" is based upon grounds of public
policy which requires, for the peace of society, the discouragement of stale
claims and, unlike the statute of limitations, is not a mere question of time but
is principally a question of the inequity or unfairness of permitting a right or
claim to be enforced or asserted.
It has been held that a party cannot invoke the jurisdiction of a court to secure
affirmative relief against his opponent and, after obtaining or failing to obtain
such relief, repudiate or question that same jurisdiction (Dean vs. Dean, 136
Or. 694, 86 A.L.R. 79). In the case just cited, by way of explaining the rule, it
was further said that the question whether the court had jurisdiction either of
the subject matter of the action or of the parties was not important in such
cases because the party is barred from such conduct not because the
judgment or order of the court is valid and conclusive as an adjudication, but
for the reason that such a practice cannot be tolerated—obviously for reasons
of public policy.
Furthermore, it has also been held that after voluntarily submitting a cause and
encountering an adverse decision on the merits, it is too late for the loser to
question the jurisdiction or power of the court (Pease vs. Rathbun-Jones etc.,
243 U.S. 273, 61 L. Ed. 715, 37 S.Ct. 283; St. Louis etc. vs. McBride, 141 U.S.
127, 35 L. Ed. 659). And in Littleton vs. Burgess, 16 Wyo. 58, the Court said
that it is not right for a party who has affirmed and invoked the jurisdiction of a
court in a particular matter to secure an affirmative relief, to afterwards deny
that same jurisdiction to escape a penalty.
Upon this same principle is what We said in the three cases mentioned in the
resolution of the Court of Appeals of May 20, 1963 (supra)—to the effect that
we frown upon the "undesirable practice" of a party submitting his case for
decision and then accepting the judgment, only if favorable, and attacking it for
lack of jurisdiction, when adverse—as well as in Pindañgan etc. vs. Dans et al.,
G.R. L-14591, September 26, 1962; Montelibano et al. vs. Bacolod-Murcia
Milling Co., Inc., G.R. L-15092; Young Men Labor Union etc. vs. The Court of
Industrial Relations et al., G.R. L-20307, Feb. 26, 1965, and Mejia vs. Lucas,
100 Phil. p. 277.
The facts of this case show that from the time the Surety became a quasi-party
on July 31, 1948, it could have raised the question of the lack of jurisdiction of
the Court of First Instance of Cebu to take cognizance of the present action by
reason of the sum of money involved which, according to the law then in force,
was within the original exclusive jurisdiction of inferior courts. It failed to do so.
Instead, at several stages of the proceedings in the court a quo, as well as in
the Court of Appeals, it invoked the jurisdiction of said courts to obtain
affirmative relief and submitted its case for a final adjudication on the merits. It
was only after an adverse decision was rendered by the Court of Appeals that
it finally woke up to raise the question of jurisdiction. Were we to sanction such
conduct on its part, We would in effect be declaring as useless all the
proceedings had in the present case since it was commenced on July 19, 1948
and compel the judgment creditors to go up their Calvary once more. The
inequity and unfairness of this is not only patent but revolting.22
For quite a time since we made this pronouncement in Sibonghanoy, courts
and tribunals, in resolving issues that involve the belated invocation of lack of
jurisdiction, have applied the principle of estoppel by laches. Thus, in Calimlim
v. Ramirez,23 we pointed out that Sibonghanoy was developing into a general
rule rather than the exception:
A rule that had been settled by unquestioned acceptance and upheld in
decisions so numerous to cite is that the jurisdiction of a court over the subject-
matter of the action is a matter of law and may not be conferred by consent or
agreement of the parties. The lack of jurisdiction of a court may be raised at
any stage of the proceedings, even on appeal. This doctrine has been qualified
by recent pronouncements which stemmed principally from the ruling in the
cited case of Sibonghanoy. It is to be regretted, however, that the holding in
said case had been applied to situations which were obviously not
contemplated therein. The exceptional circumstance involved in Sibonghanoy
which justified the departure from the accepted concept of non-waivability of
objection to jurisdiction has been ignored and, instead a blanket doctrine had
been repeatedly upheld that rendered the supposed ruling in Sibonghanoy not
as the exception, but rather the general rule, virtually overthrowing altogether
the time-honored principle that the issue of jurisdiction is not lost by waiver or
by estoppel.
In Sibonghanoy, the defense of lack of jurisdiction of the court that rendered
the questioned ruling was held to be barred by estoppel by laches. It was ruled
that the lack of jurisdiction having been raised for the first time in a motion to
dismiss filed almost fifteen (15) years after the questioned ruling had been
rendered, such a plea may no longer be raised for being barred by laches. As
defined in said case, laches is "failure or neglect, for an unreasonable and
unexplained length of time, to do that which, by exercising due diligence, could
or should have been done earlier; it is negligence or omission to assert a right
within a reasonable time, warranting a presumption that the party entitled to
assert has abandoned it or declined to assert it.24
In Calimlim, despite the fact that the one who benefited from the plea of lack of
jurisdiction was the one who invoked the court’s jurisdiction, and who later
obtained an adverse judgment therein, we refused to apply the ruling in
Sibonghanoy. The Court accorded supremacy to the time-honored principle
that the issue of jurisdiction is not lost by waiver or by estoppel.
Yet, in subsequent cases decided after Calimlim, which by sheer volume are
too plentiful to mention, the Sibonghanoy doctrine, as foretold in Calimlim,
became the rule rather than the exception. As such, in Soliven v. Fastforms
Philippines, Inc.,25 the Court ruled:
While it is true that jurisdiction may be raised at any time, "this rule
presupposes that estoppel has not supervened." In the instant case,
respondent actively participated in all stages of the proceedings before the trial
court and invoked its authority by asking for an affirmative relief. Clearly,
respondent is estopped from challenging the trial court’s jurisdiction, especially
when an adverse judgment has been rendered. In PNOC Shipping and
Transport Corporation vs. Court of Appeals, we held:
Moreover, we note that petitioner did not question at all the jurisdiction of the
lower court x x x in its answers to both the amended complaint and the second
amended complaint. It did so only in its motion for reconsideration of the
decision of the lower court after it had received an adverse decision. As this
Court held in Pantranco North Express, Inc. vs. Court of Appeals (G.R. No.
105180, July 5, 1993, 224 SCRA 477, 491), participation in all stages of the
case before the trial court, that included invoking its authority in asking for
affirmative relief, effectively barred petitioner by estoppel from challenging the
court’s jurisdiction. Notably, from the time it filed its answer to the second
amended complaint on April 16, 1985, petitioner did not question the lower
court’s jurisdiction. It was only on December 29, 1989 when it filed its motion
for reconsideration of the lower court’s decision that petitioner raised the
question of the lower court’s lack of jurisdiction. Petitioner thus foreclosed its
right to raise the issue of jurisdiction by its own inaction. (italics ours)
Similarly, in the subsequent case of Sta. Lucia Realty and Development, Inc.
vs. Cabrigas, we ruled:
In the case at bar, it was found by the trial court in its 30 September 1996
decision in LCR Case No. Q-60161(93) that private respondents (who filed the
petition for reconstitution of titles) failed to comply with both sections 12 and 13
of RA 26 and therefore, it had no jurisdiction over the subject matter of the
case. However, private respondents never questioned the trial court’s
jurisdiction over its petition for reconstitution throughout the duration of LCR
Case No. Q-60161(93). On the contrary, private respondents actively
participated in the reconstitution proceedings by filing pleadings and presenting
its evidence. They invoked the trial court’s jurisdiction in order to obtain
affirmative relief – the reconstitution of their titles. Private respondents have
thus foreclosed their right to raise the issue of jurisdiction by their own actions.
The Court has constantly upheld the doctrine that while jurisdiction may be
assailed at any stage, a litigant’s participation in all stages of the case before
the trial court, including the invocation of its authority in asking for affirmative
relief, bars such party from challenging the court’s jurisdiction (PNOC Shipping
and Transport Corporation vs. Court of Appeals, 297 SCRA 402 [1998]). A
party cannot invoke the jurisdiction of a court to secure affirmative relief
against his opponent and after obtaining or failing to obtain such relief,
repudiate or question that same jurisdiction (Asset Privatization Trust vs. Court
of Appeals, 300 SCRA 579 [1998]; Province of Bulacan vs. Court of Appeals,
299 SCRA 442 [1998]). The Court frowns upon the undesirable practice of a
party participating in the proceedings and submitting his case for decision and
then accepting judgment, only if favorable, and attacking it for lack of
jurisdiction, when adverse (Producers Bank of the Philippines vs. NLRC, 298
SCRA 517 [1998], citing Ilocos Sur Electric Cooperative, Inc. vs. NLRC, 241
SCRA 36 [1995]). (italics ours)26
Noteworthy, however, is that, in the 2005 case of Metromedia Times
Corporation v. Pastorin,27 where the issue of lack of jurisdiction was raised only
in the National Labor Relations Commission (NLRC) on appeal, we stated,
after examining the doctrines of jurisdiction vis-à-vis estoppel, that the ruling in
Sibonghanoy stands as an exception, rather than the general rule.
Metromedia, thus, was not estopped from assailing the jurisdiction of the labor
arbiter before the NLRC on appeal.28 1avvphi1
Later, in Francel Realty Corporation v. Sycip,29 the Court clarified that:
Petitioner argues that the CA’s affirmation of the trial court’s dismissal of its
case was erroneous, considering that a full-blown trial had already been
conducted. In effect, it contends that lack of jurisdiction could no longer be
used as a ground for dismissal after trial had ensued and ended.
The above argument is anchored on estoppel by laches, which has been used
quite successfully in a number of cases to thwart dismissals based on lack of
jurisdiction. Tijam v. Sibonghanoy, in which this doctrine was espoused, held
that a party may be barred from questioning a court’s jurisdiction after being
invoked to secure affirmative relief against its opponent. In fine, laches
prevents the issue of lack of jurisdiction from being raised for the first time on
appeal by a litigant whose purpose is to annul everything done in a trial in
which it has actively participated.
Laches is defined as the "failure or neglect for an unreasonable and
unexplained length of time, to do that which, by exercising due diligence, could
or should have been done earlier; it is negligence or omission to assert a right
within a reasonable time, warranting a presumption that the party entitled to
assert it either has abandoned it or declined to assert it."
The ruling in Sibonghanoy on the matter of jurisdiction is, however, the
exception rather than the rule. Estoppel by laches may be invoked to bar the
1avvphi1
issue of lack of jurisdiction only in cases in which the factual milieu is
analogous to that in the cited case. In such controversies, laches should be
clearly present; that is, lack of jurisdiction must have been raised so belatedly
as to warrant the presumption that the party entitled to assert it had abandoned
or declined to assert it. That Sibonghanoy applies only to exceptional
circumstances is clarified in Calimlim v. Ramirez, which we quote:
A rule that had been settled by unquestioned acceptance and upheld in
decisions so numerous to cite is that the jurisdiction of a court over the subject-
matter of the action is a matter of law and may not be conferred by consent or
agreement of the parties. The lack of jurisdiction of a court may be raised at
any stage of the proceedings, even on appeal. This doctrine has been qualified
by recent pronouncements which stemmed principally from the ruling in the
cited case of Sibonghanoy. It is to be regretted, however, that the holding in
said case had been applied to situations which were obviously not
contemplated therein. The exceptional circumstance involved in Sibonghanoy
which justified the departure from the accepted concept of non-waivability of
objection to jurisdiction has been ignored and, instead a blanket doctrine had
been repeatedly upheld that rendered the supposed ruling in Sibonghanoy not
as the exception, but rather the general rule, virtually overthrowing altogether
the time-honored principle that the issue of jurisdiction is not lost by waiver or
by estoppel.
Indeed, the general rule remains: a court’s lack of jurisdiction may be raised at
any stage of the proceedings, even on appeal. The reason is that jurisdiction is
conferred by law, and lack of it affects the very authority of the court to take
cognizance of and to render judgment on the action. Moreover, jurisdiction is
determined by the averments of the complaint, not by the defenses contained
in the answer.30
Also, in Mangaliag v. Catubig-Pastoral,31 even if the pleader of lack of
jurisdiction actively took part in the trial proceedings by presenting a witness to
seek exoneration, the Court, reiterating the doctrine in Calimlim, said:
Private respondent argues that the defense of lack of jurisdiction may be
waived by estoppel through active participation in the trial. Such, however, is
not the general rule but an exception, best characterized by the peculiar
circumstances in Tijam vs. Sibonghanoy. In Sibonghanoy, the party invoking
lack of jurisdiction did so only after fifteen years and at a stage when the
proceedings had already been elevated to the CA. Sibonghanoy is an
exceptional case because of the presence of laches, which was defined
therein as failure or neglect for an unreasonable and unexplained length of
time to do that which, by exercising due diligence, could or should have been
done earlier; it is the negligence or omission to assert a right within a
reasonable time, warranting a presumption that the party entitled to assert has
abandoned it or declined to assert it.32
And in the more recent Regalado v. Go,33 the Court again emphasized that
laches should be clearly present for the Sibonghanoy doctrine to be applicable,
thus:
Laches is defined as the "failure or neglect for an unreasonable and
unexplained length of time, to do that which, by exercising due diligence, could
or should have been done earlier, it is negligence or omission to assert a right
within a reasonable length of time, warranting a presumption that the party
entitled to assert it either has abandoned it or declined to assert it."
The ruling in People v. Regalario that was based on the landmark doctrine
enunciated in Tijam v. Sibonghanoy on the matter of jurisdiction by estoppel is
the exception rather than the rule. Estoppel by laches may be invoked to bar
the issue of lack of jurisdiction only in cases in which the factual milieu is
analogous to that in the cited case. In such controversies, laches should have
been clearly present; that is, lack of jurisdiction must have been raised so
belatedly as to warrant the presumption that the party entitled to assert it had
abandoned or declined to assert it.
In Sibonghanoy, the defense of lack of jurisdiction was raised for the first time
in a motion to dismiss filed by the Surety almost 15 years after the questioned
ruling had been rendered. At several stages of the proceedings, in the court a
quo as well as in the Court of Appeals, the Surety invoked the jurisdiction of
the said courts to obtain affirmative relief and submitted its case for final
adjudication on the merits. It was only when the adverse decision was
rendered by the Court of Appeals that it finally woke up to raise the question of
jurisdiction.
Clearly, the factual settings attendant in Sibonghanoy are not present in the
case at bar. Petitioner Atty. Regalado, after the receipt of the Court of Appeals
resolution finding her guilty of contempt, promptly filed a Motion for
Reconsideration assailing the said court’s jurisdiction based on procedural
infirmity in initiating the action. Her compliance with the appellate court’s
directive to show cause why she should not be cited for contempt and filing a
single piece of pleading to that effect could not be considered as an active
participation in the judicial proceedings so as to take the case within the milieu
of Sibonghanoy. Rather, it is the natural fear to disobey the mandate of the
court that could lead to dire consequences that impelled her to comply.34
The Court, thus, wavered on when to apply the exceptional circumstance in
Sibonghanoy and on when to apply the general rule enunciated as early as in
De La Santa and expounded at length in Calimlim. The general rule should,
however, be, as it has always been, that the issue of jurisdiction may be raised
at any stage of the proceedings, even on appeal, and is not lost by waiver or
by estoppel. Estoppel by laches, to bar a litigant from asserting the court’s
absence or lack of jurisdiction, only supervenes in exceptional cases similar to
the factual milieu of Tijam v. Sibonghanoy. Indeed, the fact that a person
attempts to invoke unauthorized jurisdiction of a court does not estop him from
thereafter challenging its jurisdiction over the subject matter, since such
jurisdiction must arise by law and not by mere consent of the parties. This is
especially true where the person seeking to invoke unauthorized jurisdiction of
the court does not thereby secure any advantage or the adverse party does
not suffer any harm.35
Applying the said doctrine to the instant case, the petitioner is in no way
estopped by laches in assailing the jurisdiction of the RTC, considering that he
raised the lack thereof in his appeal before the appellate court. At that time, no
considerable period had yet elapsed for laches to attach. True, delay alone,
though unreasonable, will not sustain the defense of "estoppel by laches"
unless it further appears that the party, knowing his rights, has not sought to
enforce them until the condition of the party pleading laches has in good faith
become so changed that he cannot be restored to his former state, if the rights
be then enforced, due to loss of evidence, change of title, intervention of
equities, and other causes.36 In applying the principle of estoppel by laches in
the exceptional case of Sibonghanoy, the Court therein considered the patent
and revolting inequity and unfairness of having the judgment creditors go up
their Calvary once more after more or less 15 years.37 The same, however, SO ORDERED.
does not obtain in the instant case.
ANTONIO EDUARDO B. NACHURA
We note at this point that estoppel, being in the nature of a forfeiture, is not Associate Justice
favored by law. It is to be applied rarely—only from necessity, and only in
extraordinary circumstances. The doctrine must be applied with great care and WE CONCUR:
the equity must be strong in its favor.38 When misapplied, the doctrine of
estoppel may be a most effective weapon for the accomplishment of LEONARDO A. QUISUMBING*
injustice.39 Moreover, a judgment rendered without jurisdiction over the subject Associate Justice
matter is void.40 Hence, the Revised Rules of Court provides for remedies in
attacking judgments rendered by courts or tribunals that have no jurisdiction
over the concerned cases. No laches will even attach when the judgment is CONSUELO YNARES- MA. ALICIA AUSTRIA-
null and void for want of jurisdiction.41 As we have stated in Heirs of Julian Dela SANTIAGO MARTINEZ
Cruz and Leonora Talaro v. Heirs of Alberto Cruz,42 Associate Justice Associate Justice

It is axiomatic that the jurisdiction of a tribunal, including a quasi-judicial officer RUBEN T. REYES
or government agency, over the nature and subject matter of a petition or Associate Justice
complaint is determined by the material allegations therein and the character of
the relief prayed for, irrespective of whether the petitioner or complainant is ATTESTATION
entitled to any or all such reliefs. Jurisdiction over the nature and subject
matter of an action is conferred by the Constitution and the law, and not by the I attest that the conclusions in the above decision were reached in consultation
consent or waiver of the parties where the court otherwise would have no before the case was assigned to the writer of the opinion of the Court’s
jurisdiction over the nature or subject matter of the action. Nor can it be Division.
acquired through, or waived by, any act or omission of the parties. Moreover,
estoppel does not apply to confer jurisdiction to a tribunal that has none over CONSUELO YNARES-SANTIAGO
the cause of action. x x x Associate Justice
Chairperson, Third Division
Indeed, the jurisdiction of the court or tribunal is not affected by the defenses
or theories set up by the defendant or respondent in his answer or motion to CERTIFICATION
dismiss. Jurisdiction should be determined by considering not only the status
or the relationship of the parties but also the nature of the issues or questions
Pursuant to Article VIII, Section 13 of the Constitution, and the Division
that is the subject of the controversy. x x x x The proceedings before a court or
Chairperson's Attestation, I certify that the conclusions in the above decision
tribunal without jurisdiction, including its decision, are null and void, hence,
were reached in consultation before the case was assigned to the writer of the
susceptible to direct and collateral attacks.43
opinion of the Court.
With the above considerations, we find it unnecessary to resolve the other
REYNATO S. PUNO
issues raised in the petition.
Chief Justice
WHEREFORE, premises considered, the petition for review on certiorari is
GRANTED. Criminal Case No. 2235-M-94 is hereby DISMISSED without
prejudice.

Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-34362 November 19, 1982
MODESTA CALIMLIM AND LAMBERTO MAGALI IN HIS CAPACITY AS
ADMINISTRATOR OF THE ESTATE OF DOMINGO MAGALI, petitioners,
vs.
HON. PEDRO A. RAMIREZ IN HIS CAPACITY AS PRESIDING JUDGE OF
THE COURT OF FIRST INSTANCE OF PANGASINAN, BRANCH I, and
FRANCISCO RAMOS, respondents.
Eugenio Ramos for petitioners.
Rogelio P. Closa for respondents.
VASQUEZ, J.:
The dismissal of Civil Case No. SCC-180 filed by the herein petitioners in the
respondent Court against the private respondent is sought to be annulled and
set aside by this Petition For Review On Certiorari.
The antecedent material facts are not disputed. Sometime in 1961, a judgment
for a sum of money was rendered in favor of Independent Mercantile
Corporation against a certain Manuel Magali by the Municipal Court of Manila
in Civil Case No. 85136. After said judgment became final, a writ of execution
was issued on July 31, 1961. The Notice of Levy made on September 21, 1961
on a parcel of land covered by Transfer Certificate of Title No. 9138 registered
in the name of "Domingo Magali, married to Modesta Calimlim", specified that
the said levy was only against "all rights, title, action, interest and participation
of the defendant Manuel Magali over the parcel of land described in this title. "
The Certificate of Sale executed by the Provincial Sheriff of Pangasinan on
October 17, 1961 in favor of Independent Mercantile Corporation also stated
that the sale referred only to the rights and interest of Manuel Magali over the
land described in TCT No. 9138. Manuel Magali is one of the several children
of Domingo Magali who had died in 1940 and herein petitioner Modesta
Calimlim.
However, when the Sheriff issued the final Deed of Sale on January 25, 1963,
it was erroneously stated therein that the sale was with respect to "the parcel
of land described in this title" (referring to TCT No. 9138) and not only over the
rights and interest of Manuel Magali in the same. The execution of the said
final Deed of Sale was annotated at the back of said title.
On February 23, 1967, Independent Mercantile Corporation filed a petition in
the respondent Court to compel Manuel Magali to surrender the owner's
duplicate of TCT No. 9138 in order that the same may be cancelled and a new
one issued in the name of the said corporation. Not being the registered owner
and the title not being in his possession, Manuel Magali failed to comply with
the order of the Court directing him to surrender the said title. On June 20,
1967, Independent Mercantile Corporation filed an ex-parte petition to declare
TCT No. 9138 as cancelled and to issue a new title in its name. The said
petition was granted by the respondent Court and in its Order dated July 13,
1967, it directed the issuance of a new certificate of title in the name of the
Independent Mercantile Corporation and the cancellation of TCT No. 9138. By
virtue of said Order, the Register of Deeds of Pangasinan issued a new title in
the name of the corporation, Identified as TCT No. 68568.
On November 21, 1967, petitioner Modesta Calimlim, surviving spouse of
Domingo Magali, upon learning that her husband's title over the parcel of land
had been cancelled, filed a petition with the respondent Court, sitting as a
cadastral court, praying for the cancellation of TCT No. 68568. An opposition
to the said petition was filed by Independent Mercantile Corporation. After the
parties submitted their respective Memoranda, the respondent Court issued an
Order dated June 3, 1968 dismissing the petition. (Rollo, pp. 31-38.)
The herein petitioners did not appeal the dismissal of the petition they filed in
LRC Record No. 39492 for the cancellation of TCT No. 68568. Instead, on
January 11, 1971, they filed the complaint in Civil Case No. SCC-180 praying
for the cancellation of the conveyances and sales that had been made with
respect to the property, covered by TCT No. 9138 previously registered in the
name of Domingo Magali, married to Modesta Calimlim. Named as defendant
in said civil case was herein private respondent Francisco Ramos who claimed
to have bought the property from Independent Mercantile Corporation on July
25, 1967. Private respondent Francisco Ramos, however, failed to obtain a title
over the property in his name in view of the existence of an adverse claim
annotated on the title thereof at the instance of the herein petitioners.
Private respondent Francisco Ramos filed a Motion To Dismiss Civil Case No.
SCC-180 on the ground that the same is barred by prior judgement or by
statute of limitations (Rollo. pp. 42-45). Resolving the said Motion, the
respondent Court, in its Order dated April 21, 1971, dismissed Civil Case No.
SCC- 180 on the ground of estoppel by prior judgment. (Ibid., pp, 10-13.) A
Motion For Reconsideration filed by the petitioners was denied by the
respondent Judge in his Order of September 2, 1971. (Ibid., pp. 13-15.) A
second Motion For Reconsideration was similarly denied in the Order dated
September 29, 197 1. (Rollo, pp. 16-17.) Hence, this Petition.
We find merit in this appeal.
It is error to consider the dismissal of the petition filed by the herein petitioner
in LRC Record No. 39492 for the cancellation of TCT No. 68568 as a bar by
prior judgment against the filing of Civil Case No. SCC-180. In order to avail of
the defense of res judicata, it must be shown, among others, that the judgment
in the prior action must have been rendered by a court with the proper
jurisdiction to take cognizance of the proceeding in which the prior judgment or
order was rendered. If there is lack of jurisdiction over the subject-matter of the
suit or of the parties, the judgment or order cannot operate as an adjudication
of the controversy. (2 Moran Comments on the Rules of Court, 1970 Edition, p.
364.) This essential element of the defense of bar by prior judgment or res
judicata does not exist in the case presently considered.
The petition filed by the herein petitioners in LRC Record No. 39492 was an
apparent invocation of the authority of the respondent Court sitting as a land
registration court, Although the said petition did not so state, that reliance was
apparently placed on Section 112 of the Land Registration Act. It has been
settled by consistent rulings of this Court that a court of first instance, acting as
a land registration court, is a court of limited and special jurisdiction. As such,
its proceedings are not adequate for the litigation of issues pertaining to an
ordinary civil action, such as, questions involving ownership or title to real
property. (Bareng vs. Shintoist Shrine and Japanese Charity Bureau, 83 SCRA
418; Manalo vs. Mariano, 69 SCRA 80; In re: Nicanor T Santos, 102 SCRA
747; Santos vs. Aquino, 101 SCRA 377.) In Hu chon Sunpongco vs. Heirs of
Nicolas Ronquillo, L- 27040, December 19, 1970, 36 SCRA 395, we have held
that:
Section 112 of Act 496 confers authority upon the land
registration court to order the cancellation, alteration or
amendment of a certificate of title but withdraws from the Court
the power to pass upon any question concerning ownership of
the registered property, or any incident where the issues
involved have become controversial.
It may hardly be questioned that the issues raised by the petitioners in their
petition to cancel TCT No. 68568 refer to the ownership or title over the
property covered thereby. The said petition presented before the respondent
Court in the exercise of its limited jurisdiction as a cadastral court, the question
of who should be considered the true and lawful owner of the parcel of land
embraced in said title. The petitioners alleged therein that they are the true
owners of the property, and that TCT No. 68568 which they sought to cancel
was issued as a result of the errors which were not of their own making. In
short, the petition raised a highly controversial matter which is beyond the
judicial competence of a cadastral court to pass upon or to adjudicate.
It may neither be claimed that the parties have mutually agreed to submit the
aforesaid issues for the determination by the court, it being a fact that herein
private respondent was not a party in the petition in LRC Record No. 39492.
Incidentally, although the said petition was filed by the herein petitioners on
November 21, 1967, the Opposition filed by Independent Mercantile
Corporation to the said petition made no mention of the alleged sale of the
property in question in favor of private respondent Francisco Ramos on July 5,
1967. This circumstance places in grave doubt the sincerity of said sale and
the claim that the private respondent was an innocent purchaser for value of
the property in question.
In the order of the respondent Judge dated September 29, 1971 denying the
second motion for reconsideration, he cited the case of Tijam vs. Sibonghanoy,
23 SCRA 29, to uphold the view that the petitioners are deemed estopped from
questioning the jurisdiction of the respondent Court in having taken cognizance
of the petition for cancellation of TCT No. 68568, they being the ones who
invoked the jurisdiction of the said Court to grant the affirmative relief prayed
for therein. We are of the opinion that the ruling laid down in Sibonghanoy may
not be applied herein. Neither its factual backdrop nor the philosophy of the
doctrine therein expounded fits the case at bar.
A rule that had been settled by unquestioned acceptance and upheld in
decisions so numerous to cite is that the jurisdiction of a court over the subject-
matter of the action is a matter of law and may not be conferred by consent or
agreement of the parties. The lack of jurisdiction of a court may be raised at
any stage of the proceedings, even on appeal. This doctrine has been qualified
by recent pronouncements which stemmed principally from the ruling in the
cited case of Sibonghanoy. It is to be regretted, however, that the holding in
said case had been applied to situations which were obviously not
contemplated therein. The exceptional circumstance involved
in Sibonghanoy which justified the departure from the accepted concept of
non-waivability of objection to jurisdiction has been ignored and, instead a
blanket doctrine had been repeatedly upheld that rendered the supposed ruling
in Sibonghanoy not as the exception, but rather the general rule, virtually
overthrowing altogether the time-honored principle that the issue of jurisdiction
is not lost by waiver or by estoppel.
In Sibonghanoy, the defense of lack of jurisdiction of the court that rendered
the questioned ruling was held to be barred by estoppel by laches. It was ruled
that the lack of jurisdiction having been raised for the first time in a motion to
dismiss filed almost fifteen (15) years after the questioned ruling had been
rendered, such a plea may no longer be raised for being barred by laches. As
defined in said case, laches is "failure or neglect, for an unreasonable and
unexplained length of time, to do that which, by exercising due diligence, could
or should have been done earlier; it is negligence or omission to assert a right
within a reasonable time, warranting a presumption that the party entitled to
assert has abandoned it or declined to assert it."
The petitioners in the instant case may not be faulted with laches. When they
learned that the title to the property owned by them had erroneously and
illegally been cancelled and registered in the name of another entity or person
who had no right to the same, they filed a petition to cancel the latter's title. It is
unfortunate that in pursuing said remedy, their counsel had to invoke the
authority of the respondent Court as a cadastral court, instead of its capacity
as a court of general jurisdiction. Their petition to cancel the title in the name of
Independent Mercantile Corporation was dismissed upon a finding by the
respondent Court that the same was "without merit." No explanation was given
for such dismissal nor why the petition lacked merit. There was no hearing,
and the petition was resolved solely on the basis of memoranda filed by the
parties which do not appear of record. It is even a possibility that such
dismissal was in view of the realization of the respondent Court that, sitting as
a cadastral court, it lacked the authority to entertain the petition involving as it
does a highly controversial issue. Upon such petition being dismissed, the
petitioners instituted Civil Case No. SCC-180 on January 1, 1971, or only two
and one-half years after the dismissal of their petition in LRC Record No.
39492. Hence, we see no unreasonable delay in the assertion by the
petitioners of their right to claim the property which rightfully belongs to them.
They can hardly be presumed to have abandoned or waived such right by
inaction within an unreasonable length of time or inexcusable negligence. In
short, their filing of Civil Case No. SCC-180 which in itself is an implied non-
acceptance of the validity of the proceedings had in LRC Record No. 39492
may not be deemed barred by estoppel by laches.
It is neither fair nor legal to bind a party by the result of a suit or proceeding
which was taken cognizance of in a court which lacks jurisdiction over the
same irrespective of the attendant circumstances. The equitable defense of
estoppel requires knowledge or consciousness of the facts upon which it is
based. The same thing is true with estoppel by conduct which may be asserted
only when it is shown, among others, that the representation must have been
made with knowledge of the facts and that the party to whom it was made is
ignorant of the truth of the matter. (De Castro vs. Gineta, 27 SCRA 623.) The
filing of an action or suit in a court that does not possess jurisdiction to
entertain the same may not be presumed to be deliberate and intended to
secure a ruling which could later be annulled if not favorable to the party who
filed such suit or proceeding. Instituting such an action is not a one-sided affair.
It can just as well be prejudicial to the one who filed the action or suit in the
event that he obtains a favorable judgment therein which could also be
attacked for having been rendered without jurisdiction. The determination of
the correct jurisdiction of a court is not a simple matter. It can raise highly
debatable issues of such importance that the highest tribunal of the land is
given the exclusive appellate jurisdiction to entertain the same. The point
simply is that when a party commits error in filing his suit or proceeding in a
court that lacks jurisdiction to take cognizance of the same, such act may not
at once be deemed sufficient basis of estoppel. It could have been the result of
an honest mistake, or of divergent interpretations of doubtful legal provisions. If
any fault is to be imputed to a party taking such course of action, part of the
blame should be placed on the court which shall entertain the suit, thereby
lulling the parties into believing that they pursued their remedies in the correct
forum. Under the rules, it is the duty of the court to dismiss an action
"whenever it appears that the court has no jurisdiction over the subject matter."
(Sec. 2, Rule 9, Rules of Court.) Should the court render a judgment without
jurisdiction, such judgment may be impeached or annulled for lack of
jurisdiction (Sec. 30, Rule 132, Ibid), within ten (10) years from the finality of
the same. (Art. 1144, par. 3, Civil Code.)
The inequity of barring the petitioners from vindicating their right over their
property in Civil Case No. SCC-180 is rendered more acute in the face of the
undisputed fact that the property in question admittedly belonged to the
petitioners, and that the title in the name of the private respondent was the
result of an error committed by the Provincial Sheriff in issuing the deed of sale
in the execution proceeding. The justness of the relief sought by herein
petitioners may not be ignored or rendered futile by reason of a doctrine which
is of highly doubtful applicability herein.
WHEREFORE, the Orders appealed from are hereby REVERSED and SET
ASIDE. The Motion To Dismiss filed by the private respondent in Civil Case
No. SCC-180 shall be deemed denied and the respondent Court is ordered to
conduct further proceedings in the case. With costs against the private
respondent.
SO ORDERED.
Teehankee (Chairman), Melencio-Herrera, Plana, Relova and Gutierrez, Jr.,
JJ., concur.
Republic of the Philippines
SUPREME COURT
SECOND DIVISION
G.R. No. 143951 October 25, 2005
Norma Mangaliag and Narciso Solano, Petitioners,
vs.
Hon. Edelwina Catubig-Pastoral, Judge of the Regional Trial Court, 1st
Judicial Region, San Carlos City, (Pangasinan), Branch 56 and Apolinario
Serquina, Jr., Respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
Before us is a petition for certiorari, with a prayer for the issuance of a
temporary restraining order, to set aside the Order dated April 17, 2000 of the
Regional Trial Court (RTC), Branch 56, San Carlos City in Civil Case No. SCC-
2240, which denied petitioners’ motion to dismiss; and the Order dated June
13, 2000, which denied petitioners’ motion for reconsideration.
The factual background of the case is as follows:
On May 10, 1999, private respondent Apolinario Serquina, Jr. filed before the
RTC a complaint for damages against petitioners Norma Mangaliag and
Narciso Solano. The complaint alleges that: on January 21, 1999, from 9:00 to
10:00 a.m., private respondent, together with Marco de Leon, Abner Mandapat
and Manuel de Guzman, was on board a tricycle driven by Jayson Laforte;
while in Pagal, San Carlos City, a dump truck owned by petitioner Mangaliag
and driven by her employee, petitioner Solano, coming from the opposite
direction, tried to overtake and bypass a tricycle in front of it and thereby
encroached the left lane and sideswiped the tricycle ridden by private
respondent; due to the gross negligence, carelessness and imprudence of
petitioner Solano in driving the truck, private respondent and his co-
passengers sustained serious injuries and permanent deformities; petitioner
Mangaliag failed to exercise due diligence required by law in the selection and
supervision of her employee; private respondent was hospitalized and spent
₱71,392.00 as medical expenses; private respondent sustained a permanent
facial deformity due to a fractured nose and suffers from severe depression as
a result thereof, for which he should be compensated in the amount of
₱500,000.00 by way of moral damages; as a further result of his
hospitalization, private respondent lost income of ₱25,000.00; private
respondent engaged the services of counsel on a contingent basis equal to
25% of the total award.1
On July 21, 1999, petitioners filed their answer with counterclaim denying that
private respondent has a cause of action against them. They attributed fault or
negligence in the vehicular accident on the tricycle driver, Jayson Laforte, who
was allegedly driving without license.2
Following pre-trial conference, trial on the merits ensued. When private
respondent rested his case, petitioner Solano testified in his defense.
Subsequently, on March 8, 2000, petitioners, assisted by a new counsel, filed
a motion to dismiss on the ground of lack of jurisdiction over the subject matter
of the claim, alleging that the Municipal Trial Court (MTC) has jurisdiction over
the case since the principal amount prayed for, in the amount of ₱71,392.00,
falls within its jurisdiction.3 Private respondent opposed petitioners’ motion to
dismiss.4 On March 24, 2000, petitioners filed a supplement in support of their
motion to dismiss.5
On April 17, 2000, the respondent RTC Judge, Edelwina Catubig-Pastoral,
issued the first assailed Order denying petitioners’ motion to dismiss,6 relying
upon the mandate of Administrative Circular No. 09-94, paragraph 2 of which
reads:
2. The exclusion of the term "damages of whatever kind in determining the
jurisdictional amount under Section 19 (8) and Section 33 (1) of B.P. Blg. 129,
as amended by R.A. No. 7691, applied to cases where the damages are
merely incidental to or a consequence of the main cause of action. However, in
cases where the claim for damages is the main cause of action, or one of the
causes of action, the amount of such claim shall be considered in determining
the jurisdiction of the court.
The respondent RTC Judge also cited the 1999 case of Ong vs. Court of
Appeals,7 where an action for damages due to a vehicular accident, with
prayer for actual damages of ₱10,000.00 and moral damages of
₱1,000,000.00, was tried in a RTC.
On May 19, 2000, petitioners filed a motion for reconsideration8 but it was
denied by the respondent RTC Judge in her second assailed Order, dated
June 13, 2000.9
Hence, the present petition for certiorari, with prayer for the issuance of a
temporary restraining order.10
On August 9, 2000, the Court resolved to issue the temporary restraining order
prayed for by petitioners. Consequently, the respondent RTC Judge desisted
from hearing further Civil Case No. SCC-2240.11
Petitioners propound this issue for consideration: In an action for recovery of
damages, does the amount of actual damages prayed for in the complaint
provide the sole test for determining the court’s jurisdiction, or is the total
amount of all the damages claimed, regardless of kind and nature, such as
moral, exemplary, nominal damages, and attorney’s fees, etc., to be computed
collectively with the actual damages to determine what court – whether the
MTC or the RTC – has jurisdiction over the action?
Petitioners maintain that the court’s jurisdiction should be based exclusively on
the amount of actual damages, excluding therefrom the amounts claimed as
moral, exemplary, nominal damages and attorney’s fee, etc. They submit that
the specification in Administrative Circular No. 09-94 that "in cases where the
claim for damages is the main cause of action. . . the amount of such claim
shall be considered in determining the jurisdiction of the court"signifies that the
court’s jurisdiction must be tested solely by the amount of that damage which
is principally and primarily demanded, and not the totality of all the damages
sought to be recovered.
Petitioners insist that private respondent’s claim for actual damages in the
amount of ₱71,392.00 is the principal and primary demand, the same being
the direct result of the alleged negligence of petitioners, while the moral
damages for ₱500,000.00 and attorney’s fee, being the consequent effects
thereof, may prosper only upon a prior finding by the court of the existence of
petitioners’ negligence that caused the actual damages. Considering that the
amount of actual damages claimed by private respondent in Civil Case No.
SCC-2240 does not exceed ₱200,000.00, which was then the jurisdictional
amount of the MTC, the jurisdiction over the case clearly pertains to the MTC,
and not to the RTC. Therefore, the RTC should have dismissed the case for
lack of jurisdiction. Petitioners cite as relevant the case of Movers-Baseco
Integrated Port Services, Inc. vs. Cyborg Leasing Corporation12 wherein the
Court, in disposing of the jurisdictional issue, limited its consideration only to
the actual or compensatory damages.
Furthermore, while admitting that the defense of lack of jurisdiction was only
raised during the trial, petitioners nevertheless contend that jurisdiction may be
raised anytime, even after judgment, but before it is barred by laches or
estoppel. They submit that they seasonably presented the objection to the
RTC’s lack of jurisdiction, i.e., during the trial stage where no decision had as
yet been rendered, must less one unfavorable to them.
At any rate, they argue that when the jurisdictional flaw is evident from the
record of the case, the court may, even without the urgings of the parties, take
judicial notice of such fact, and thereupon dismiss the case motu
proprio. Thus, even if lack of jurisdiction was not initially raised in a motion to
dismiss or in the answer, no waiver may be imputed to them.
Private respondent, on the other hand, submits that in an action for recovery of
damages arising from a tortious act, the claim of moral damages is not merely
an incidental or consequential claim but must be considered in the amount of
demand which will determine the court’s jurisdiction. He argues that the
position taken by petitioners is a misreading of paragraph 2 of Administrative
Circular No. 09-94. The clear and explicit language of said circular leaves no
room for doubt; hence, needs no interpretation.
He further submits that petitioners’ reliance on Movers-Baseco Integrated Port
Services, Inc. is misplaced since that case is for recovery of the value of
vehicle and unpaid rentals on the lease of the same. He contends that Section
18, paragraph 8 of Batas Pambansa Blg. 129, as amended by Republic Act
No. 7691, upon which petitioners anchor their stand, refers to all the demands
involving collection of sums of money based on obligations arising from
contract, express or implied, where the claim for damages is just incidental
thereto and it does not apply to actions for damages based on obligations
arising from quasi-delict where the claim for damages of whatever kind is the
main action.
Private respondent also contends that, being incapable of pecuniary
computation, the amount of moral damages that he may be awarded depends
on the sound discretion of the trial court, not restrained by the limitation of the
jurisdictional amount. Should the Court follow petitioners’ line of reasoning,
private respondent argues that it will result in an absurd situation where he can
only be awarded moral damages of not more than ₱200,000.00 although he
deserves more than this amount, taking into consideration his physical
suffering, as well as social and financial standing, simply because his claim for
actual damages does not exceed ₱200,000.00 which amount falls under the
jurisdiction of the MTC.
Lastly, he asserts that it is too late in the day for petitioners to question the
jurisdiction of the RTC since they are estopped from invoking this ground. He
contends that after actively taking part in the trial proceedings and presenting a
witness to seek exoneration, it would be unfair and legally improper for
petitioners to seek the dismissal of the case.
At the outset, it is necessary to stress that generally a direct recourse to this
Court is highly improper, for it violates the established policy of strict
observance of the judicial hierarchy of courts. Although this Court, the RTCs
and the Court of Appeals (CA) have concurrent jurisdiction to issue writs
of certiorari, prohibition, mandamus, quo warranto, habeas corpus and
injunction, such concurrence does not give the petitioner unrestricted freedom
of choice of court forum. This Court is a court of last resort, and must so
remain if it is to satisfactorily perform the functions assigned to it by the
Constitution and immemorial tradition.13
Thus, this Court, as a rule, will not entertain direct resort to it unless the
redress desired cannot be obtained in the appropriate courts, and exceptional
and compelling circumstances, such as cases of national interest and of
serious implications, justify the availment of the extraordinary remedy of writ
of certiorari, calling for the exercise of its primary jurisdiction.14 Such
exceptional and compelling circumstances were present in the following cases:
(a) Chavez vs. Romulo15 on the citizens’ right to bear arms; (b) Government of
the United States of America vs. Purganan16 on bail in extradition proceedings;
(c) Commission on Elections vs. Quijano-Padilla17 on a government contract on
the modernization and computerization of the voters’ registration list;
(d) Buklod ng Kawaning EIIB vs. Zamora[18] on the status and existence of a
public office; and (e) Fortich vs. Corona19 on the so-called "Win-Win
Resolution" of the Office of the President which modified the approval of the
conversion to agro-industrial area of a 144-hectare land.
Be that as it may, the judicial hierarchy of courts is not an iron-clad rule. It
generally applies to cases involving warring factual allegations. For this
reason, litigants are required to repair to the trial courts at the first instance to
determine the truth or falsity of these contending allegations on the basis of the
evidence of the parties. Cases which depend on disputed facts for decision
cannot be brought immediately before appellate courts as they are not triers of
facts.20 Therefore, a strict application of the rule of hierarchy of courts is not
necessary when the cases brought before the appellate courts do not involve
factual but legal questions.
In the present case, petitioners submit a pure question of law involving the
interpretation and application of paragraph 2 of Administrative Circular No. 09-
94. This legal question and in order to avoid further delay are compelling
enough reasons to allow petitioners’ invocation of this Court’s jurisdiction in the
first instance.
Before resolving this issue, the Court shall deal first on the question of
estoppel posed by private respondent. Private respondent argues that the
defense of lack of jurisdiction may be waived by estoppel through active
participation in the trial. Such, however, is not the general rule but an
exception, best characterized by the peculiar circumstances in Tijam vs.
Sibonghanoy.21 In Sibonghanoy, the party invoking lack of jurisdiction did so
only after fifteen years and at a stage when the proceedings had already been
elevated to the CA. Sibonghanoy is an exceptional case because of the
presence of laches, which was defined therein as failure or neglect for an
unreasonable and unexplained length of time to do that which, by exercising
due diligence, could or should have been done earlier; it is the negligence or
omission to assert a right within a reasonable time, warranting a presumption
that the party entitled to assert has abandoned it or declined to assert it.22
As enunciated in Calimlim vs. Ramirez,23 this Court held:
A rule that had been settled by unquestioned acceptance and upheld in
decisions so numerous to cite is that the jurisdiction of a court over the subject
matter of the action is a matter of law and may not be conferred by consent or
agreement of the parties. The lack of jurisdiction of a court may be raised at
any stage of the proceedings, even on appeal. This doctrine has been qualified
by recent pronouncements which stemmed principally from the ruling in the
cited case of Sibonghanoy. It is to be regretted, however, that the holding in
said case had been applied to situations which were obviously not
contemplated therein. The exceptional circumstances involved
in Sibonghanoy which justified the departure from the accepted concept of
non-waivability of objection to jurisdiction has been ignored and, instead a
blanket doctrine had been repeatedly upheld that rendered the supposed ruling
in Sibonghanoy not as the exception, but rather the general rule, virtually
overthrowing altogether the time honored principle that the issue of jurisdiction
is not lost by waiver or by estoppel.
...
It is neither fair nor legal to bind a party by the result of a suit or proceeding
which was taken cognizance of in a court which lacks jurisdiction over the
same irrespective of the attendant circumstances. The equitable defense of
estoppel requires knowledge or consciousness of the facts upon which it is
based. The same thing is true with estoppel by conduct which may be asserted
only when it is shown, among others, that the representation must have been
made with knowledge of the facts and that the party to whom it was made is
ignorant of the truth of the matter (De Castro vs. Gineta, 27 SCRA 623). The
filing of an action or suit in a court that does not possess jurisdiction to
entertain the same may not be presumed to be deliberate and intended to
secure a ruling which could later be annulled if not favorable to the party who
filed such suit or proceeding. Instituting such an action is not a one-sided affair.
It can just as well be prejudicial to the one who file the action or suit in the
event that he obtains a favorable judgment therein which could also be
attacked for having been rendered without jurisdiction. The determination of
the correct jurisdiction of a court is not a simple matter. It can raise highly
debatable issues of such importance that the highest tribunal of the land is
given the exclusive appellate jurisdiction to entertain the same. The point
simply is that when a party commits error in filing his suit or proceeding in a
court that lacks jurisdiction to take cognizance of the same, such act may not
at once be deemed sufficient basis of estoppel. It could have been the result of
an honest mistake or of divergent interpretations of doubtful legal provisions. If
any fault is to be imputed to a party taking such course of action, part of the
blame should be placed on the court which shall entertain the suit, thereby
lulling the parties into believing that they pursued their remedies in the correct
forum. Under the rules, it is the duty of the court to dismiss an action
"whenever it appears that court has no jurisdiction over the subject matter."
(Section 2, Rule 9, Rules of Court) Should the Court render a judgment without
jurisdiction, such judgment may be impeached or annulled for lack of
jurisdiction (Sec. 30, Rule 132, Ibid), within ten (10) years from the finality of
the same (Art. 1144, par. 3, Civil Code).24
In the present case, no judgment has yet been rendered by the RTC.25 As a
matter of fact, as soon as the petitioners discovered the alleged jurisdictional
defect, they did not fail or neglect to file the appropriate motion to dismiss.
Hence, finding the pivotal element of laches to be absent,
the Sibonghanoy doctrine does not control the present controversy. Instead,
the general rule that the question of jurisdiction of a court may be raised at any
stage of the proceedings must apply. Therefore, petitioners are not estopped
from questioning the jurisdiction of the RTC.
In any event, the petition for certiorari is bereft of merit.
Section 1 of Republic Act (R.A.) No. 7691, which took effect on April 15, 1994,
provides inter alia that where the amount of the demand in civil cases exceeds
₱100,000.00,26 exclusive of interest, damages of whatever kind, attorney’s
fees, litigation expenses, and costs, the exclusive jurisdiction thereof is lodged
with in the RTC. Under Section 3 of the same law, where the amount of the
demand in the complaint does not exceed ₱100,000.00, exclusive of interest,
damages of whatever kind, attorney’s fees, litigation expenses, and costs, the
exclusive jurisdiction over the same is vested in the Metropolitan Trial Court,
MTC and Municipal Circuit Trial Court. The jurisdictional amount was
increased to ₱200,000.00,27 effective March 20, 1999, pursuant to Section
528 of R.A. No. 7691 and Administrative Circular No. 21-99.
In Administrative Circular No. 09-94 dated March 14, 1994, the Court specified
the guidelines in the implementation of R.A. No. 7691. Paragraph 2 of the
Circular provides:
2. The exclusion of the term "damages of whatever kind in determining the
jurisdictional amount under Section 19 (8) and Section 33 (1) of B.P. Blg. 129,
as amended by R.A. No. 7691, applied to cases where the damages are
merely incidental to or a consequence of the main cause of action.
However, in cases where the claim for damages is the main cause of
action, or one of the causes of action, the amount of such claim shall be
considered in determining the jurisdiction of the court. (Emphasis
supplied)
The well-entrenched principle is that the jurisdiction of the court over the
subject matter of the action is determined by the material allegations of the
complaint and the law, irrespective of whether or not the plaintiff is entitled to
recover all or some of the claims or reliefs sought therein.29 In the present
case, the allegations in the complaint plainly show that private respondent
seeks to recover not only his medical expenses, lost income but also damages
for physical suffering and mental anguish due to permanent facial deformity
from injuries sustained in the vehicular accident. Viewed as an action for quasi-
delict, the present case falls squarely within the purview of Article 2219 In view of the foregoing, the Court is convinced that the respondent RTC
(2),30 which provides for the payment of moral damages in cases of quasi-delict Judge committed no grave abuse of discretion in issuing the assailed Orders
causing physical injuries. dated April 17, 2000 and June 13, 2000.

Private respondent’s claim for moral damages of ₱500,000.00 cannot be
considered as merely incidental to or a consequence of the claim for actual
damages. It is a separate and distinct cause of action or an independent
actionable tort. It springs from the right of a person to the physical integrity of
his or her body, and if that integrity is violated, damages are due and
assessable.31 Hence, the demand for moral damages must be considered as a
separate cause of action, independent of the claim for actual damages and
must be included in determining the jurisdictional amount, in clear consonance
with paragraph 2 of Administrative Circular No. 09-94.
WHEREFORE, the instant petition for certiorari is DISMISSED for lack of merit.
The temporary restraining order issued by this Court on August 9, 2000 is
LIFTED.
The Regional Trial Court, Branch 56, San Carlos City is DIRECTED to
continue with the trial proceedings in Civil Case No. SCC-2240 and resolve the
case with dispatch.
Costs against petitioners.

If the rule were otherwise, i.e., the court’s jurisdiction in a case of quasi-delict SO ORDERED.
causing physical injuries would only be based on the claim for actual damages
and the complaint is filed in the MTC, it can only award moral damages in an
Republic of the Philippines
amount within its jurisdictional limitations, a situation not intended by the
SUPREME COURT
framers of the law.
Manila
It must be remembered that moral damages, though incapable of pecuniary
THIRD DIVISION
estimation, are designed to compensate and alleviate in some way the
physical suffering, mental anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social humiliation, and similar injury G.R. No. 169700 July 30, 2009
unjustly caused a person.32 Moral damages are awarded to enable the injured
party to obtain means, diversions or amusements that will serve to alleviate the APOLONIA BANAYAD FRIANELA, Petitioner,
moral suffering he/she has undergone, by reason of the defendant’s culpable vs.
action. Its award is aimed at restoration, as much as possible, of the SERVILLANO BANAYAD, JR., Respondent.
spiritual status quo ante; thus, it must be proportionate to the suffering inflicted.
Since each case must be governed by its own peculiar circumstances, there is DECISION
no hard and fast rule in determining the proper amount.33
NACHURA, J.:
The petitioners’ reliance in the case of Movers-Baseco Integrated Port
Services, Inc. vs. Cyborg Leasing Corporation34 is misplaced. The claim for Before the court is a petition for review on certiorari under Rule 45 of the Rules
damages therein was based on a breach of a contract of lease, not a quasi- of Court assailing the June 17, 2005 Decision1 of the Court of Appeals (CA) in
delict causing physical injuries, as in this case. Besides, there was no claim CA-G.R. CV No. 53929, and the August 17, 2005 Resolution2 denying the
therein for moral damages. Furthermore, moral damages are generally not motion for partial reconsideration thereof.
recoverable in damage actions predicated on a breach of contract in view of
the provisions of Article 222035 of the Civil Code. Narrated in brief are the antecedent facts and proceedings, to wit:

Following the death of her uncle, the testator Moises F. Banayad, petitioner,
who was named as devisee in the will, filed before the Regional Trial Court
(RTC) of Pasay City, on June 3, 1991, Sp. Proc. No. 3664-P3 for the allowance
of the November 18, 1985 holographic will of the decedent. Petitioner alleged
that Moises died without issue and left to her the following properties, namely:
(1) a parcel of land situated in Pasay City and described in Transfer Certificate
of Title No. 9741; (2) images of Oracion del Huerto and Pieta including the
crown; and (3) all personal belongings.4
Respondent, a cousin of the petitioner, filed his opposition and counter-
petitioned for the allowance of two other holographic wills of the decedent, one
dated September 27, 1989 and another dated September 28, 1989.5
After trial on the merits, the RTC, on September 29, 1995, rendered its
Decision6 declaring the September 27, 1989 holographic will as having
revoked the November 18, 1985 will, allowing the former, and appointing
respondent as administrator of Moises’s estate.7
On appeal, the CA, in the assailed June 17, 2005 Decision,8 modified the
decision of the trial court and ruled that the September 27, 1989 holographic
will had only revoked the November 18, 1985 will insofar as the testamentary
disposition of Moises’s real property was concerned.9
With the denial of her motion for reconsideration in the further assailed August
17, 2005 Resolution,10 petitioner elevated the case before us via the instant
petition.11
The Court notes that the trial court focused all of its attention on the merits of
the case without first determining whether it could have validly exercised
jurisdiction to hear and decide Sp. Proc. No. 3664-P. On appeal, the appellate
court also overlooked the issue on the jurisdictional competence of the trial
court over the said case. This Court, after a meticulous review of the records,
finds that the RTC of Pasay City had no jurisdiction over the subject matter in
Sp. Proc. No. 3664-P.
The jurisdiction of the court to hear and decide a case is conferred by the law
in force at the time of the institution of the action unless such statute provides
for a retroactive application thereof.12 Jurisdiction is moreover determined by
the allegations or averments in the complaint or petition.13
In this case, at the time the petition for the allowance of Moises’s holographic
will was instituted, the then Sections 19 and 3314 of Batas Pambansa (B.P.)
Blg. 12915 were in force, thus—
SECTION 19. Jurisdiction in civil cases. — Regional Trial Courts shall exercise
exclusive original jurisdiction:
xxxx
(4) In all matters of probate, both testate and intestate, where the gross value
of the estate exceeds twenty thousand pesos (₱20,000.00);
xxxx
SECTION 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts
and Municipal Circuit Trial Courts in civil cases. — Metropolitan Trial Courts,
Municipal Trial Courts, and Municipal Circuit Trial Courts shall exercise:
(1) Exclusive original jurisdiction over civil actions and probate proceedings,
testate and intestate, including the grant of provisional remedies in proper
cases, where the demand does not exceed twenty thousand pesos exclusive
of interest and costs but inclusive of damages of whatever kind, the amount of
which must be specifically alleged: 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; and
xxxx
The applicable law, therefore, confers jurisdiction on the RTC or the MTCs
over probate proceedings depending on the gross value of the estate,16 which
value must be alleged in the complaint or petition to be filed. Significantly, in
1avv phi1
this case, the original petition docketed before the trial court contains only the
following averments:
xxxx
1. That Petitioner is of legal age, married, Filipino and residing at 2237
P. Burgos St., Pasay City who is named devisee in the Last Will and
Testament of MOISES BANAYAD, deceased who died in Pasay City
General Hospital on March 27, 1991 xerox copy of his death certificate
is herewith attached as Annex "A" to form integral part hereof;
 2. That the said Last Will and Testament is herewith (sic) attached as
Annex "B" and made an integral part of this Petition, the original
thereof will be presented to this Honorable Court at the time of probate;
3. That the decedent is an inhabitant of the Philippines and residing at
2237 P. Burgos St., Pasay City at the time of his death;
4. That the properties left by the decedent consist of real and personal
properties particularly described herein below, which decedent all
bequeathed to petitioner;
A. A parcel of land described under TCT No. 9741 xerox copy
of which is herewith (sic) attached as Annex "C".
B. Imahen ng Oracion del Huerto at Pieta, kasama and korona.
C. All personal belongings.
5. That the testator at the time of the execution of the said Will was of
sound and disposing mind.
WHEREFORE, it is most respectfully prayed of the Honorable Court that:
a. Upon proper notice and hearing, the above mentioned Will be
admitted to probate;
b. That letters testamentary or administration be issued to herein
petitioner without bond;
Petitioner prays for such other reliefs just and equitable in (sic) the premises.
x x x x17
Nowhere in the petition is there a statement of the gross value of Moises’s
estate. Thus, from a reading of the original petition filed, it cannot be
determined which court has original and exclusive jurisdiction over the
proceedings.18 The RTC therefore committed gross error when it had
perfunctorily assumed jurisdiction despite the fact that the initiatory pleading
filed before it did not call for the exercise of its jurisdiction. The RTC should
have, at the outset, dismissed the case for lack of jurisdiction. Be it noted that
the dismissal on the said ground may be ordered motu proprio by the
courts.19 Further, the CA, on appeal, should have dismissed the case on the
same ground. Settled is the doctrine that the issue of jurisdiction may be raised
by any of the parties or may be reckoned by the court, at any stage of the
proceedings, even on appeal, and is not lost by waiver or by estoppel.20
Despite the pendency of this case for around 18 years, the exception laid down
in Tijam v. Sibonghanoy21 and clarified recently in Figueroa v. People22 cannot
be applied. First, because, as a general rule, the principle of estoppel by
laches cannot lie against the government.23 No injustice to the parties or to any
third person will be wrought by the ruling that the trial court has no jurisdiction
over the instituted probate proceedings.
Second and most important, because in Tijam, the delayed invocation of lack
of jurisdiction has been made during the execution stage of a final and
executory ruling of a court. In Figueroa, the Court has emphasized that
estoppel by laches only supervenes in exceptional cases similar to the factual
milieu in Tijam. It is well to note the following factual setting of Tijam:
On July 19, 1948 — barely one month after the effectivity of Republic Act No.
296 known as the Judiciary Act of 1948 — the spouses Serafin Tijam and
Felicitas Tagalog commenced Civil Case No. R-660 in the Court of First
Instance of Cebu against the spouses Magdaleno Sibonghanoy and Lucia
Baguio to recover from them the sum of P1,908.00, with legal interest thereon
from the date of the filing of the complaint until the whole obligation is paid,
plus costs. As prayed for in the complaint, a writ of attachment was issued by
the court against defendants' properties, but the same was soon dissolved
upon the filing of a counter-bond by defendants and the Manila Surety and
Fidelity Co., Inc. hereinafter referred to as the Surety, on the 31st of the same
month.
After being duly served with summons the defendants filed their answer in
which, after making some admissions and denials of the material averments of
the complaint, they interposed a counterclaim. This counterclaim was
answered by the plaintiffs.1avvphi1
After trial upon the issues thus joined, the Court rendered judgment in favor of
the plaintiffs and, after the same had become final and executory, upon motion
of the latter, the Court issued a writ of execution against the defendants. The
writ having been returned unsatisfied, the plaintiffs moved for the issuance of a
writ of execution against the Surety's bond (Rec. on Appeal pp. 46-49), against
which the Surety filed a written opposition (Id. pp. 49) upon two grounds,
namely, (1) Failure to prosecute and (2) Absence of a demand upon the Surety
for the payment of the amount due under the judgment. Upon these grounds
the Surety prayed the Court not only to deny the motion for execution against
its counter-bond but also the following affirmative relief: "to relieve the herein
bonding company of its liability, if any, under the bond in question" (Id. p. 54)
The Court denied this motion on the ground solely that no previous demand
had been made on the Surety for the satisfaction of the judgment. Thereafter
the necessary demand was made, and upon failure of the Surety to satisfy the
judgment, the plaintiffs filed a second motion for execution against the counter-
bond. On the date set for the hearing thereon, the Court, upon motion of the
Surety's counsel, granted the latter a period of five days within which to answer
the motion. Upon its failure to file such answer, the Court granted the motion
for execution and the corresponding writ was issued.
Subsequently, the Surety moved to quash the writ on the ground that the same
was issued without the required summary hearing provided for in Section 17 of
Rule 59 of the Rules of Court. As the Court denied the motion, the Surety
appealed to the Court of Appeals from such order of denial and from the one
denying its motion for reconsideration (Id. p. 97). Its record on appeal was then
printed as required by the Rules, and in due time it filed its brief raising therein
no other question but the ones covered by the following assignment of errors:
"I. That the Honorable Court a quo erred in issuing its order dated
November 2, 1957, by holding the incident as submitted for resolution,
without a summary hearing and compliance with the other mandatory
requirements provided for in Section 17, Rule 59 of the Rules of Court.
"II. That the Honorable Court a quo erred in ordering the issuance of
execution against the herein bonding company-appellant.
"III. That the Honorable Court a quo erred in denying the motion to
quash the writ of execution filed by the herein bonding company-
appellant as well as its subsequent motion for reconsideration, and/or
in not quashing or setting aside the writ of execution."
Not one of the assignment of errors — it is obvious raises the question of lack
of jurisdiction, neither directly nor indirectly.
Although the appellees failed to file their brief, the Court of Appeals, on
December 11, 1962, decided the case affirming the orders appealed from.
On January 8, 1963 — five days after the Surety received notice of the
decision, it filed a motion asking for extension of time within which to file a
motion for reconsideration. The Court of Appeals granted the motion in its
resolution of January 10 of the same year. Two days later the Surety filed a
pleading entitled MOTION TO DISMISS, alleging substantially that appellees'
action was filed in the Court of First Instance of Cebu on July 19, 1948 for the
recovery of the sum of P1,908.00 only; that a month before that date Republic
Act No. 296, otherwise known as the Judiciary Act of 1948, had already
become effective, Section 88 of which placed within the original exclusive
jurisdiction of inferior courts all civil actions where the value of the subject-
matter or the amount of the demand does not exceed P2,000.00, exclusive of
interest and costs; that the Court of First Instance therefore had no jurisdiction
to try and decide the case. Upon these premises the Surety's motion prayed
the Court of Appeals to set aside its decision and to dismiss the case. By
resolution of January 16, 1963 the Court of Appeals required the appellees to
answer the motion to dismiss, but they failed to do so. Whereupon, on May 20
of the same year, the Court resolved to set aside its decision and to certify the
case to Us.
x x x x24
Clearly, then, in Tijam, the issue of lack of jurisdiction has only been raised
during the execution stage, specifically when the matter of the trial court’s
denial of the surety’s motion to quash the writ of execution has been brought to
the appellate court for review. Here, the trial court’s assumption of
unauthorized jurisdiction over the probate proceedings has been discovered by
the Court during the appeal stage of the main case, not during the execution
stage of a final and executory decision. Thus, the exceptional rule laid down in
Tijam cannot apply.
Since the RTC has no jurisdiction over the action, all the proceedings therein,
including the decision rendered, are null and void.25 With the above
disquisition, the Court finds it unnecessary to discuss and resolve the other
issues raised in the petition.
IN THE LIGHT OF THE FOREGOING, Sp. Proc. No. 3664-P before the
Regional Trial Court of Pasay City is DISMISSED for lack of jurisdiction.
SO ORDERED.
ANTONIO EDUARDO B. NACHURA
Associate Justice
WE CONCUR:

SECOND DIVISION
G.R. No. 131282 January 4, 2002
GABRIEL L. DUERO, petitioner,
vs.
HON.COURT OF APPEALS, and BERNARDO A. ERADEL, respondents.
QUISUMBING, J.:
This petition for certiorari assails the Decisionl dated September 17, 1997, of
the Court of Appeals in CA-G.R. No. SP No.. 2340- UDK, entitled Bernardo
Eradel vs. Non. Ermelino G. Andal, setting aside all proceedings in Civil Case
No.1075, Gabriel L. Duero vs. Bernardo Eradel, before the Branch 27 of the
Regional Trial Court of Tandag, Surigao del Sur .
The pertinent facts are as follow.
Sometime in 1988, according to petitioner, private respondent Bemardo
Eradel2 entered and occupied petitioner's land covered by Tax Declaration No.
A-16-13-302, located in Baras, San Miguel, Surigao del Sur. As shown in the
tax declaration, the land had an assessed value of P5,240. When petitioner
politely informed private respondent that the land was his and requested the
latter to vacate the land, private respondent refused, but instead threatened
him with bodily harm. Despite repeated demands, private respondent remained
steadfast in his refusal to leave the land.
On June 16, 1995, petitioner filed before the RTC a complaint for Recovery of
Possession and Ownership with Damages and Attorney's Fees against private
respondent and two others, namely, Apolinario and Inocencio Ruena.
Petitioner appended to the complaint the aforementioned tax declaration. The
counsel of the Ruenas asked for extension to file their Answer and was given
until July 18, 1995. Meanwhile, petitioner and the, Ruenas executed a
compromise agreement, which became the trial court's basis for a partial
judgment rendered on January 12, 1996. In this agreement, the Ruenas
through their counsel, Atty. Eusebio Avila, entered into a Compromise
Agreement with herein petitioner, Gabriel Duero. Inter alia, the agreement
stated that the Ruenas recognized and bound themselves to respect the
ownership and possession of Duero.3 Herein private respondent Eradel was not
a party to the agreement, and he was declared in default for failure to file his
answer to the complaint.4
Petitioner presented his evidence ex parte on February 13, 1996. On May 8,
1996, judgment was rendered in his favor, and private respondent was ordered
to peacefully vacate and turn over Lot No.1065 Cad. 537-D to petitioner; pay
petitioner P2,000 annual rental from 1988 up the time he vacates the land, and
P5,000 as attorney's fees and the cost of the suit.5 Private respondent received
a copy of the decision on May 25, 1996.
On June 10, 1996, private respondent filed a Motion for New Trial, alleging that
he has been occupying the land as a tenant of Artemio Laurente, Sr., since
1958. He explained that he turned over the complaint and summons to
Laurente in the honest belief that as landlord, the latter had a better right to the
land and was responsible to defend any adverse claim on it. However, the trial
court denied the motion for new trial.1âw phi 1.nêt
Meanwhile, RED Conflict Case No.1029, an administrative case between
petitioner and applicant-contestants Romeo, Artemio and Jury Laurente,
remained pending with the Office of the Regional Director of the Department of
Environment and Natural Resources in Davao City. Eventually, it was
forwarded to the DENR Regional Office in Prosperidad, Agusan del Sur .
On July 24, 1996, private respondent filed before the RTC a Petition for Relief
from Judgment, reiterating the same allegation in his Motion for New Trial. He
averred that unless there is a determination on who owned the land, he could
not be made to vacate the land. He also averred that the judgment of the trial
court was void inasmuch as the heirs of Artemio Laurente, Sr., who are
indispensable parties, were not impleaded.
On September 24, 1996, Josephine, Ana Soledad and Virginia, all surnamed
Laurente, grandchildren of Artemio who were claiming ownership of the land,
filed a Motion for Intervention. The RTC denied the motion.
On October 8, 1996, the trial court issued an order denying the Petition for
Relief from Judgment. In a Motion for Reconsideration of said order, private
respondent alleged that the RTC had no jurisdiction over the case, since the
value of the land was only P5,240 and therefore it was under the jurisdiction of
the municipal trial court. On November 22, 1996, the RTC denied the motion
for reconsideration.
On January 22, 1997, petitioner filed a Motion for Execution, which the RTC
granted on January 28. On February 18, 1997, Entry of Judgment was made of
record and a writ of execution was issued by the RTC on February 27,1997.
On March 12,1997, private respondent filed his petition for certiorari before the
Court of Appeals.
The Court of Appeals gave due course to the petition, maintaining that private
respondent is not estopped from assailing the jurisdiction 'of the RTC, Branch
27 in Tandag, Surigao del Sur, when private respondent filed with said court
his Motion for Reconsideration And/Or Annulment of Judgment. The Court of
Appeals decreed as follows:
IN THE LIGHT OF ALL THE FOREGOING, the Petition is GRANTED.
All proceedings in "Gabriel L. Duero vs. Bernardo Eradel, et. al. Civil
Case 1075" filed in the Court a quo, including its Decision, Annex
"E" of the petition, and its Orders and Writ of Execution and the turn
over of the property to the Private Respondent by the Sheriff of the
Court a quo, are declared null and void and hereby SET ASIDE, No
pronouncement as to costs.
SO ORDERED.6
Petitioner now comes before this Court, alleging that the Court of Appeals
acted with grave abuse of discretion amounting to lack or in excess of
jurisdiction when it held that:
I.
...THE LOWER COURT HAS NO JURISDICTION OVER THE
SUBJECT MA TTER OF THE CASE.
II
...PRIVATE RESPONDENT WAS NOT THEREBY ESTOPPED FROM
QUESTIONING THE JURISDICTION OF THE LOWER COURT EVEN
AFTER IT SUCCESSFULLY SOUGHT AFFIRMATIVE RELIEF
THEREFROM.
III
...THE FAlLURE OF PRIVATE RESPONDENT TO FILE HIS ANSWER
IS JUSTIFIED. 7
The main issue before us is whether the Court of Appeals gravely abused its
discretion when it held that the municipal trial court had jurisdiction, and that
private respondent was not estopped from assailing the jurisdiction of the RTC
after he had filed several motions before it. The secondary issue is whether the
Court of appeals erred in holding that private respondent's failure to file an
answer to the complaint was justified.
At the outset, however, we note that petitioner through counsel submitted to
this Court pleadings that contain inaccurate statements. Thus, on page 5 of his
petition,8 we find that to bolster the claim that the appellate court erred in
holding that the RTC had no jurisdiction, petitioner pointed to Annex E9 of his
petition which supposedly is the Certification issued by the Municipal Treasurer
of San Miguel, Surigao, specifically containing the notation, "Note: Subject for
General Revision Effective 1994." But it appears that Annex E of his petition is
not a Certification but a xerox copy of a Declaration of Real Property. Nowhere
does the document contain a notation, "Note: Subject for General Revision
Effective 1994." Petitioner also asked this Court to refer to Annex F,10 where he
said the zonal value of the disputed land was P1.40 per sq.m., thus placing the
computed value of the land at the time the complaint was filed before the RTC
at P57,113.98, hence beyond the jurisdiction of the municipal court and within
the jurisdiction of the regional trial court. However, we find that these annexes
are both merely xerox copies. They are obviously without evidentiary weight or
value.
Coming now to the principal issue, petitioner contends that respondent
appellate court acted with grave abuse of discretion. By "grave abuse of
discretion" is meant such capricious and whimsical exercise of judgment which
is equivalent to an excess or a lack of jurisdiction. The abuse of discretion
must be so patent and gross as to amount to an evasion of a positive duty or a
virtual refusal to perform a duty enjoined by law, or to act at all in
contemplation of law as where the power is exercised in an arbitrary and
despotic manner by reason of passion or hostility.11 But here we find that in its
decision holding that the municipal court has jurisdiction over the case and that
private respondent was not estopped from questioning the jurisdiction of the
RTC, respondent Court of Appeals discussed the facts on which its decision is
grounded as well as the law and jurisprudence on the matter.12 Its action was
neither whimsical nor capricious.
Was private respondent estopped from questioning the jurisdiction of the RTC?
In this case, we are in agreement with the Court of Appeals that he was not.
While participation in all stages of a case before the trial court, including
invocation of its authority in asking for affirmative relief, effectively bars a party
by estoppel from challenging the court's jurisdiction,13 we note that estoppel has
become an equitable defense that is both substantive and remedial and its
successful invocation can bar a right and not merely its equitable
enforcement.14 Hence, estoppel ought to be applied with caution. For estoppel
to apply, the action giving rise thereto must be unequivocal and intentional
because, if misapplied, estoppel may become a tool of injustice.15
In the present case, private respondent questions the jurisdiction of RTC in
Tandag, Surigao del Sur, on legal grounds. Recall that it was petitioner who
filed the complaint against private respondent and two other parties before the
said court,16 believing that the RTC had jurisdiction over his complaint. But by
then, Republic Act 769117amending BP 129 had become effective, such that
jurisdiction already belongs not to the RTC but to the MTC pursuant to said
amendment. Private respondent, an unschooled farmer, in the mistaken belief
that since he was merely a tenant of the late Artemio Laurente Sr., his
landlord, gave the summons to a Hipolito Laurente, one of the surviving heirs
of Artemio Sr., who did not do anything about the summons. For failure to
answer the complaint, private respondent was declared in default. He then filed
a Motion for New Trial in the same court and explained that he defaulted
because of his belief that the suit ought to be answered by his landlord. In that
motion he stated that he had by then the evidence to prove that he had a
better right than petitioner over the land because of his long, continuous and
uninterrupted possession as bona-fide tenant-lessee of the land.18 But his
motion was denied. He tried an alternative recourse. He filed before the RTC a
Motion for Relief from Judgment. Again, the same court denied his motion,
hence he moved for reconsideration of the denial. In his Motion for
Reconsideration, he raised for the first time the RTC's lack of jurisdiction. This
motion was again denied. Note that private respondent raised the issue of lack
of jurisdiction, not when the case was already on appeal, but when the case,
was still before the RTC that ruled him in default, denied his motion for new
trial as well as for relief from judgment, and denied likewise his two motions for
reconsideration. After the RTC still refused to reconsider the denial of private
respondent's motion for relief from judgment, it went on to issue the order for
entry of judgment and a writ of execution.
Under these circumstances, we could not fault the Court of Appeals in
overruling the RTC and in holding that private respondent was not estopped
from questioning the jurisdiction of the regional trial court. The fundamental
rule is that, the lack of jurisdiction of the court over an action cannot be waived
by the parties, or even cured by their silence, acquiescence or even by their
express consent.19 Further, a party may assail the jurisdiction of the court over
the action at any stage of the proceedings and even on appeal.20 The appellate
court did not err in saying that the RTC should have declared itself barren of
jurisdiction over the action. Even if private respondent actively participated in
the proceedings before said court, the doctrine of estoppel cannot still be
properly invoked against him because the question of lack of jurisdiction may
be raised at anytime and at any stage of the action.21Precedents tell us that as
a general rule, the jurisdiction of a court is not a question of acquiescence as a
matter of fact, but an issue of conferment as a matter of law.22 Also, neither
waiver nor estoppel shall apply to confer jurisdiction upon a court, barring
highly meritorious and exceptional circumstances.23 The Court of Appeals found
support for its ruling in our decision in Javier vs. Court of Appeals, thus:
x x x The point simply is that when a party commits error in filing his
suit or proceeding in a court that lacks jurisdiction to take cognizance
of the same, such act may not at once be deemed sufficient basis of
estoppel. It could have been the result of an honest mistake, or of
divergent interpretations of doubtful legal provisions. If any fault is to
be imputed to a party taking such course of action, part of the
blame should be placed on the court which shall entertain the
suit, thereby lulling the parties into believing that they pursued
their remedies in the correct forum. Under the rules, it is the duty of
the court to dismiss an action 'whenever it appears that the court has
no jurisdiction over the subject matter.' (Sec. 2, Rule 9, Rules of Court)
Should the Court render a judgment without jurisdiction, such judgment
may be impeached or annulled for lack of jurisdiction (Sec. 30, Rule
132, Ibid), within ten (10) years from the finality of the same. [Emphasis
ours.]24
Indeed, "...the trial court was duty-bound to take judicial notice of the
parameters of its jurisdiction and its failure to do so, makes its decision a
'lawless' thing."25
Since a decision of a court without jurisdiction is null and void, it could logically
never become final and executory, hence appeal therefrom by writ of error
would be out of the question. Resort by private respondent to a petition for
certiorari before the Court of Appeals was in order .
In holding that estoppel did not prevent private respondent from questioning
the RTC's jurisdiction, the appellate court reiterated the doctrine that estoppel
must be applied only in exceptional cases, as its misapplication could result in
a miscarriage of justice. Here, we find that petitioner, who claims ownership of
a parcel of land, filed his complaint before a court without appropriate
jurisdiction. Defendant, a farmer whose tenancy status is still pending before
the proper administrative agency concerned, could have moved for dismissal
of the case on jurisdictional grounds. But the farmer as defendant therein could
not be expected to know the nuances of jurisdiction and related issues. This
farmer, who is now the private respondent, ought not to be penalized when he
claims that he made an honest mistake when he initially submitted his motions
before the RTC, before he realized that the controversy was outside the RTC's
cognizance but within the jurisdiction of the municipal trial court. To hold him in
estoppel as the RTC did would amount to foreclosing his avenue to obtain a
proper resolution of his case. Furthermore, if the RTC's order were to be
sustained, he would be evicted from the land prematurely, while RED Conflict
Case No.1029 would remain unresolved. Such eviction on a technicality if
allowed could result in an injustice, if it is later found that he has a legal right to
till the land he now occupies as tenant-lessee. 1âwphi1.nêt
Having determined that there was no grave abuse of discretion by the
appellate court in ruling that private respondent was not estopped from
questioning the jurisdiction of the RTC, we need not tarry to consider in detail
the second issue. Suffice it to say that, given the circumstances in this case,
no error was committed on this score by respondent appellate court. Since the
RTC had no jurisdiction over the case, private respondent had justifiable
reason in law not to file an answer, aside from the fact that he believed the suit
was properly his landlord's concern.
WHEREFORE, the petition is DISMISSED. The assailed decision of the Court
of Appeals is AFFIRMED. The decision of the Regional Trial Court in Civil
Case No.1075 entitled Gabriel L. Duero vs. Bernardo Eradel, its Order that
private respondent turn over the disputed land to petitioner, and the Writ of
Execution it issued, are ANNULLED and SET ASIDE. Costs against petitioner
. 1. The Magaspi case was an action for recovery of ownership and possession
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 75919 May 7, 1987
MANCHESTER DEVELOPMENT CORPORATION, ET AL., petitioners,
vs.
COURT OF APPEALS, CITY LAND DEVELOPMENT CORPORATION,
STEPHEN ROXAS, ANDREW LUISON, GRACE LUISON and JOSE DE
MAISIP, respondents.
Tanjuatco, Oreta and Tanjuatco for petitioners.
Pecabar Law Offices for private respondents.
RESOLUTION
GANCAYCO, J.:
Acting on the motion for reconsideration of the resolution of the Second
Division of January 28,1987 and another motion to refer the case to and to be
heard in oral argument by the Court En Banc filed by petitioners, the motion to
refer the case to the Court en banc is granted but the motion to set the case for
oral argument is denied.
Petitioners in support of their contention that the filing fee must be assessed on
the basis of the amended complaint cite the case of Magaspi vs.
Ramolete. 1 They contend that the Court of Appeals erred in that the filing fee should be levied by
considering the amount of damages sought in the original complaint.
The environmental facts of said case differ from the present in that —
of a parcel of land with damages.2While the present case is an action for torts
and damages and specific performance with prayer for temporary restraining
order, etc.3
2. In the Magaspi case, the prayer in the complaint seeks not only the
annulment of title of the defendant to the property, the declaration of ownership
and delivery of possession thereof to plaintiffs but also asks for the payment of
actual moral, exemplary damages and attorney's fees arising therefrom in the
amounts specified therein. 4However, in the present case, the prayer is for the
issuance of a writ of preliminary prohibitory injunction during the pendency of
the action against the defendants' announced forfeiture of the sum of P3
Million paid by the plaintiffs for the property in question, to attach such property
of defendants that maybe sufficient to satisfy any judgment that maybe
rendered, and after hearing, to order defendants to execute a contract of
purchase and sale of the subject property and annul defendants' illegal
forfeiture of the money of plaintiff, ordering defendants jointly and severally to
pay plaintiff actual, compensatory and exemplary damages as well as 25% of
said amounts as maybe proved during the trial as attorney's fees and declaring
the tender of payment of the purchase price of plaintiff valid and producing the
effect of payment and to make the injunction permanent. The amount of
damages sought is not specified in the prayer although the body of the
complaint alleges the total amount of over P78 Million as damages suffered by
plaintiff.5
3. Upon the filing of the complaint there was an honest difference of opinion as
to the nature of the action in the Magaspi case. The complaint was considered
as primarily an action for recovery of ownership and possession of a parcel of
land. The damages stated were treated as merely to the main cause of action.
Thus, the docket fee of only P60.00 and P10.00 for the sheriff's fee were
paid. 6
In the present case there can be no such honest difference of opinion. As
maybe gleaned from the allegations of the complaint as well as the designation
thereof, it is both an action for damages and specific performance. The docket
fee paid upon filing of complaint in the amount only of P410.00 by considering
the action to be merely one for specific performance where the amount
involved is not capable of pecuniary estimation is obviously erroneous.
Although the total amount of damages sought is not stated in the prayer of the
complaint yet it is spelled out in the body of the complaint totalling in the
amount of P78,750,000.00 which should be the basis of assessment of the
filing fee.
4. When this under-re assessment of the filing fee in this case was brought to
the attention of this Court together with similar other cases an investigation
was immediately ordered by the Court. Meanwhile plaintiff through another
counsel with leave of court filed an amended complaint on September 12,
1985 for the inclusion of Philips Wire and Cable Corporation as co-plaintiff and
by emanating any mention of the amount of damages in the body of the
complaint. The prayer in the original complaint was maintained. After this Court
issued an order on October 15, 1985 ordering the re- assessment of the
docket fee in the present case and other cases that were investigated, on
November 12, 1985 the trial court directed plaintiffs to rectify the amended
complaint by stating the amounts which they are asking for. It was only then
that plaintiffs specified the amount of damages in the body of the complaint in
the reduced amount of P10,000,000.00. 7 Still no amount of damages were
specified in the prayer. Said amended complaint was admitted.
On the other hand, in the Magaspi case, the trial court ordered the plaintiffs to
pay the amount of P3,104.00 as filing fee covering the damages alleged in the
original complaint as it did not consider the damages to be merely an or
incidental to the action for recovery of ownership and possession of real
property. 8 An amended complaint was filed by plaintiff with leave of court to
include the government of the Republic as defendant and reducing the amount
of damages, and attorney's fees prayed for to P100,000.00. Said amended
complaint was also admitted. 9
In the Magaspi case, the action was considered not only one for recovery of
ownership but also for damages, so that the filing fee for the damages should
be the basis of assessment. Although the payment of the docketing fee of
P60.00 was found to be insufficient, nevertheless, it was held that since the
payment was the result of an "honest difference of opinion as to the correct
amount to be paid as docket fee" the court "had acquired jurisdiction over the
case and the proceedings thereafter had were proper and regular." 10 Hence, as
the amended complaint superseded the original complaint, the allegations of damages in the amended
complaint should be the basis of the computation of the filing fee. 11
In the present case no such honest difference of opinion was possible as the allegations of the complaint, the
designation and the prayer show clearly that it is an action for damages and specific performance. The
docketing fee should be assessed by considering the amount of damages as alleged in the original complaint.
As reiterated in the Magaspi case the rule is well-settled "that a case is
deemed filed only upon payment of the docket fee regardless of the actual
date of filing in court . 12 Thus, in the present case the trial court did not acquire jurisdiction over the
case by the payment of only P410.00 as docket fee. Neither can the amendment of the complaint thereby vest
jurisdiction upon the Court. 13 For an legal purposes there is no such original complaint that was duly filed
which could be amended. Consequently, the order admitting the amended complaint and all subsequent
proceedings and actions taken by the trial court are null and void.
The Court of Appeals therefore, aptly ruled in the present case that the basis of
assessment of the docket fee should be the amount of damages sought in the
original complaint and not in the amended complaint.
The Court cannot close this case without making the observation that it frowns
at the practice of counsel who filed the original complaint in this case of
omitting any specification of the amount of damages in the prayer although the
amount of over P78 million is alleged in the body of the complaint. This is
clearly intended for no other purpose than to evade the payment of the correct
filing fees if not to mislead the docket clerk in the assessment of the filing fee.
This fraudulent practice was compounded when, even as this Court had taken
cognizance of the anomaly and ordered an investigation, petitioner through
another counsel filed an amended complaint, deleting all mention of the
amount of damages being asked for in the body of the complaint. It was only
when in obedience to the order of this Court of October 18, 1985, the trial court
directed that the amount of damages be specified in the amended complaint,
that petitioners' counsel wrote the damages sought in the much reduced
amount of P10,000,000.00 in the body of the complaint but not in the prayer
thereof. The design to avoid payment of the required docket fee is obvious.
The Court serves warning that it will take drastic action upon a repetition of this
unethical practice.
To put a stop to this irregularity, henceforth all complaints, petitions, answers
and other similar pleadings should specify the amount of damages being
prayed for not only in the body of the pleading but also in the prayer, and said
damages shall be considered in the assessment of the filing fees in any case.
Any pleading that fails to comply with this requirement shall not bib accepted
nor admitted, or shall otherwise be expunged from the record.
The Court acquires jurisdiction over any case only upon the payment of the
prescribed docket fee. An amendment of the complaint or similar pleading will
not thereby vest jurisdiction in the Court, much less the payment of the docket
fee based on the amounts sought in the amended pleading. The ruling in the
Magaspi case 14 in so far as it is inconsistent with this pronouncement is overturned and reversed.
WHEREFORE, the motion for reconsideration is denied for lack of merit.
SO ORDERED.
Teehankee, C.J., Yap, Fernan, Narvasa, Melencio-Herrera, Gutierrez, Jr.,
Cruz, Paras, Feliciano, Bidin, Sarmiento and Cortes, JJ., concur.
Paras, J., took no part.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. Nos. 79937-38 February 13, 1989
SUN INSURANCE OFFICE, LTD., (SIOL), E.B. PHILIPPS and D.J.
WARBY, petitioners,
vs.
HON. MAXIMIANO C. ASUNCION, Presiding Judge, Branch 104, Regional
Trial Court, Quezon City and MANUEL CHUA UY PO TIONG, respondents.
Romulo, Mabanta, Buenaventura, Sayoc & De los Angeles Law Offices for
petitioners. Tanjuatco, Oreta, Tanjuatco, Berenguer & Sanvicente Law Offices
for private respondent.
GANCAYCO, J.:
Again the Court is asked to resolve the issue of whether or not a court acquires
jurisdiction over a case when the correct and proper docket fee has not been
paid.
On February 28, 1984, petitioner Sun Insurance Office, Ltd. (SIOL for brevity)
filed a complaint with the Regional Trial Court of Makati, Metro Manila for the
consignation of a premium refund on a fire insurance policy with a prayer for
the judicial declaration of its nullity against private respondent Manuel Uy Po
Tiong. Private respondent as declared in default for failure to file the required
answer within the reglementary period.
On the other hand, on March 28, 1984, private respondent filed a complaint in
the Regional Trial Court of Quezon City for the refund of premiums and the
issuance of a writ of preliminary attachment which was docketed as Civil Case
No. Q-41177, initially against petitioner SIOL, and thereafter including E.B.
Philipps and D.J. Warby as additional defendants. The complaint sought,
among others, the payment of actual, compensatory, moral, exemplary and
liquidated damages, attorney's fees, expenses of litigation and costs of the
suit. Although the prayer in the complaint did not quantify the amount of
damages sought said amount may be inferred from the body of the complaint
to be about Fifty Million Pesos (P50,000,000.00).
Only the amount of P210.00 was paid by private respondent as docket fee
which prompted petitioners' counsel to raise his objection. Said objection was
disregarded by respondent Judge Jose P. Castro who was then presiding over
said case. Upon the order of this Court, the records of said case together with
twenty-two other cases assigned to different branches of the Regional Trial
Court of Quezon City which were under investigation for under-assessment of
docket fees were transmitted to this Court. The Court thereafter returned the
said records to the trial court with the directive that they be re-raffled to the
other judges in Quezon City, to the exclusion of Judge Castro. Civil Case No.
Q-41177 was re-raffled to Branch 104, a sala which was then vacant.
On October 15, 1985, the Court en banc issued a Resolution in Administrative
Case No. 85-10-8752-RTC directing the judges in said cases to reassess the
docket fees and that in case of deficiency, to order its payment. The Resolution
also requires all clerks of court to issue certificates of re-assessment of docket
fees. All litigants were likewise required to specify in their pleadings the
amount sought to be recovered in their complaints.
On December 16, 1985, Judge Antonio P. Solano, to whose sala Civil Case
No. Q-41177 was temporarily assigned, issuedan order to the Clerk of Court
instructing him to issue a certificate of assessment of the docket fee paid by
private respondent and, in case of deficiency, to include the same in said
certificate.
On January 7, 1984, to forestall a default, a cautionary answer was filed by
petitioners. On August 30,1984, an amended complaint was filed by private
respondent including the two additional defendants aforestated.
Judge Maximiano C. Asuncion, to whom Civil Case No. Q41177 was thereafter
assigned, after his assumption into office on January 16, 1986, issued a
Supplemental Order requiring the parties in the case to comment on the Clerk
of Court's letter-report signifying her difficulty in complying with the Resolution
of this Court of October 15, 1985 since the pleadings filed by private
respondent did not indicate the exact amount sought to be recovered. On
January 23, 1986, private respondent filed a "Compliance" and a "Re-
Amended Complaint" stating therein a claim of "not less than Pl0,000,000. 00
as actual compensatory damages" in the prayer. In the body of the said
second amended complaint however, private respondent alleges actual and
compensatory damages and attorney's fees in the total amount of about
P44,601,623.70.
On January 24, 1986, Judge Asuncion issued another Order admitting the
second amended complaint and stating therein that the same constituted
proper compliance with the Resolution of this Court and that a copy thereof
should be furnished the Clerk of Court for the reassessment of the docket fees.
The reassessment by the Clerk of Court based on private respondent's claim
of "not less than P10,000,000.00 as actual and compensatory damages"
amounted to P39,786.00 as docket fee. This was subsequently paid by private
respondent.
Petitioners then filed a petition for certiorari with the Court of Appeals
questioning the said order of Judie Asuncion dated January 24, 1986.
On April 24, 1986, private respondent filed a supplemental complaint alleging
an additional claim of P20,000,000.00 as d.qmages so the total claim amounts
to about P64,601,623.70. On October 16, 1986, or some seven months after
filing the supplemental complaint, the private respondent paid the additional
docket fee of P80,396.00.1
On August 13, 1987, the Court of Appeals rendered a decision ruling, among
others, as follows:
WHEREFORE, judgment is hereby rendered:
1. Denying due course to the petition in CA-G.R. SP No. 1,
09715 insofar as it seeks annulment of the order
(a) denying petitioners' motion to dismiss the complaint, as
amended, and
(b) granting the writ of preliminary attachment, but giving due
course to the portion thereof questioning the reassessment of
the docketing fee, and requiring the Honorable respondent
Court to reassess the docketing fee to be paid by private
respondent on the basis of the amount of P25,401,707.00. 2
Hence, the instant petition.
During the pendency of this petition and in conformity with the said judgment of
respondent court, private respondent paid the additional docket fee of
P62,432.90 on April 28, 1988. 3
The main thrust of the petition is that the Court of Appeals erred in not finding
that the lower court did not acquire jurisdiction over Civil Case No. Q-41177 on
the ground of nonpayment of the correct and proper docket fee. Petitioners
allege that while it may be true that private respondent had paid the amount of
P182,824.90 as docket fee as herein-above related, and considering that the
total amount sought to be recovered in the amended and supplemental
complaint is P64,601,623.70 the docket fee that should be paid by private
respondent is P257,810.49, more or less. Not having paid the same,
petitioners contend that the complaint should be dismissed and all incidents
arising therefrom should be annulled. In support of their theory, petitioners cite
the latest ruling of the Court in Manchester Development Corporation vs.
CA, 4 as follows:
The Court acquires jurisdiction over any case only upon the
payment of the prescribed docket fee. An amendment of the
complaint or similar pleading will not thereby vest jurisdiction in
the Court, much less the payment of the docket fee based on
the amounts sought in the amended pleading. The ruling in the
Magaspi Case in so far as it is inconsistent with this
pronouncement is overturned and reversed.
On the other hand, private respondent claims that the ruling
in Manchester cannot apply retroactively to Civil Case No. Q41177 for at the
time said civil case was filed in court there was no such Manchester ruling as
yet. Further, private respondent avers that what is applicable is the ruling of
this Court in Magaspi v. Ramolete, 5 wherein this Court held that the trial court
acquired jurisdiction over the case even if the docket fee paid was insufficient.
The contention that Manchester cannot apply retroactively to this case is
untenable. Statutes regulating the procedure of the courts will be construed as
applicable to actions pending and undetermined at the time of their passage.
Procedural laws are retrospective in that sense and to that extent. 6
In Lazaro vs. Endencia and Andres, 7 this Court held that the payment of the
full amount of the docket fee is an indispensable step for the perfection of an
appeal. In a forcible entry and detainer case before the justice of the peace
court of Manaoag, Pangasinan, after notice of a judgment dismissing the case,
the plaintiff filed a notice of appeal with said court but he deposited only P8.00
for the docket fee, instead of P16.00 as required, within the reglementary
period of appeal of five (5) days after receiving notice of judgment. Plaintiff
deposited the additional P8.00 to complete the amount of the docket fee only
fourteen (14) days later. On the basis of these facts, this court held that the
Court of First Instance did notacquire jurisdiction to hear and determine the
appeal as the appeal was not thereby perfected.
In Lee vs. Republic, 8 the petitioner filed a verified declaration of intention to
become a Filipino citizen by sending it through registered mail to the Office of
the Solicitor General in 1953 but the required filing fee was paid only in 1956,
barely 5V2 months prior to the filing of the petition for citizenship. This Court
ruled that the declaration was not filed in accordance with the legal
requirement that such declaration should be filed at least one year before the
filing of the petition for citizenship. Citing Lazaro, this Court concluded that the
filing of petitioner's declaration of intention on October 23, 1953 produced no
legal effect until the required filing fee was paid on May 23, 1956.
In Malimit vs. Degamo, 9 the same principles enunciated in Lazaro and Lee
were applied. It was an original petition for quo warranto contesting the right to
office of proclaimed candidates which was mailed, addressed to the clerk of
the Court of First Instance, within the one-week period after the proclamation
as provided therefor by law.10However, the required docket fees were paid only
after the expiration of said period. Consequently, this Court held that the date
of such payment must be deemed to be the real date of filing of aforesaid
petition and not the date when it was mailed.
Again, in Garica vs, Vasquez, 11 this Court reiterated the rule that the docket
fee must be paid before a court will act on a petition or complaint. However, we
also held that said rule is not applicable when petitioner seeks the probate of
several wills of the same decedent as he is not required to file a separate
action for each will but instead he may have other wills probated in the same
special proceeding then pending before the same court.
Then in Magaspi, 12 this Court reiterated the ruling in Malimit and Lee that a
case is deemed filed only upon payment of the docket fee regardless of the
actual date of its filing in court. Said case involved a complaint for recovery of
ownership and possession of a parcel of land with damages filed in the Court
of First Instance of Cebu. Upon the payment of P60.00 for the docket fee and
P10.00 for the sheriffs fee, the complaint was docketed as Civil Case No. R-
11882. The prayer of the complaint sought that the Transfer Certificate of Title
issued in the name of the defendant be declared as null and void. It was also
prayed that plaintiff be declared as owner thereof to whom the proper title
should be issued, and that defendant be made to pay monthly rentals of
P3,500.00 from June 2, 1948 up to the time the property is delivered to
plaintiff, P500,000.00 as moral damages, attorney's fees in the amount of
P250,000.00, the costs of the action and exemplary damages in the amount of
P500,000.00.
The defendant then filed a motion to compel the plaintiff to pay the correct
amount of the docket fee to which an opposition was filed by the plaintiff
alleging that the action was for the recovery of a parcel of land so the docket
fee must be based on its assessed value and that the amount of P60.00 was
the correct docketing fee. The trial court ordered the plaintiff to pay P3,104.00
as filing fee.
The plaintiff then filed a motion to admit the amended complaint to include the
Republic as the defendant. In the prayer of the amended complaint the
exemplary damages earlier sought was eliminated. The amended prayer
merely sought moral damages as the court may determine, attorney's fees of
P100,000.00 and the costs of the action. The defendant filed an opposition to
the amended complaint. The opposition notwithstanding, the amended
complaint was admitted by the trial court. The trial court reiterated its order for
the payment of the additional docket fee which plaintiff assailed and then
challenged before this Court. Plaintiff alleged that he paid the total docket fee
in the amount of P60.00 and that if he has to pay the additional fee it must be
based on the amended complaint.
The question posed, therefore, was whether or not the plaintiff may be
considered to have filed the case even if the docketing fee paid was not
sufficient. In Magaspi, We reiterated the rule that the case was deemed filed
only upon the payment of the correct amount for the docket fee regardless of
the actual date of the filing of the complaint; that there was an honest
difference of opinion as to the correct amount to be paid as docket fee in that
as the action appears to be one for the recovery of property the docket fee of
P60.00 was correct; and that as the action is also one, for damages, We
upheld the assessment of the additional docket fee based on the damages
alleged in the amended complaint as against the assessment of the trial court
which was based on the damages alleged in the original complaint.
However, as aforecited, this Court
overturned Magaspi in Manchester. Manchester involves an action for torts
and damages and specific performance with a prayer for the issuance of a
temporary restraining order, etc. The prayer in said case is for the issuance of
a writ of preliminary prohibitory injunction during the pendency of the action
against the defendants' announced forfeiture of the sum of P3 Million paid by
the plaintiffs for the property in question, the attachment of such property of
defendants that may be sufficient to satisfy any judgment that may be
rendered, and, after hearing, the issuance of an order requiring defendants to
execute a contract of purchase and sale of the subject property and annul
defendants' illegal forfeiture of the money of plaintiff. It was also prayed that
the defendants be made to pay the plaintiff jointly and severally, actual,
compensatory and exemplary damages as well as 25% of said amounts as
may be proved during the trial for attorney's fees. The plaintiff also asked the
trial court to declare the tender of payment of the purchase price of plaintiff
valid and sufficient for purposes of payment, and to make the injunction
permanent. The amount of damages sought is not specified in the prayer
although the body of the complaint alleges the total amount of over P78 Millon
allegedly suffered by plaintiff.
Upon the filing of the complaint, the plaintiff paid the amount of only P410.00
for the docket fee based on the nature of the action for specific performance
where the amount involved is not capable of pecuniary estimation. However, it
was obvious from the allegations of the complaint as well as its designation
that the action was one for damages and specific performance. Thus, this court
held the plaintiff must be assessed the correct docket fee computed against
the amount of damages of about P78 Million, although the same was not
spelled out in the prayer of the complaint.
Meanwhile, plaintiff through another counsel, with leave of court, filed an
amended complaint on September 12, 1985 by the inclusion of another co-
plaintiff and eliminating any mention of the amount of damages in the body of
the complaint. The prayer in the original complaint was maintained.
On October 15, 1985, this Court ordered the re-assessment of the docket fee
in the said case and other cases that were investigated. On November 12,
1985, the trial court directed the plaintiff to rectify the amended complaint by
stating the amounts which they were asking for. This plaintiff did as instructed.
In the body of the complaint the amount of damages alleged was reduced to
P10,000,000.00 but still no amount of damages was specified in the prayer.
Said amended complaint was admitted.
Applying the principle in Magaspi that "the case is deemed filed only upon
payment of the docket fee regardless of the actual date of filing in court," this
Court held that the trial court did not acquire jurisdiction over the case by
payment of only P410.00 for the docket fee. Neither can the amendment of the
complaint thereby vest jurisdiction upon the Court. For all legal purposes there
was no such original complaint duly filed which could be amended.
Consequently, the order admitting the amended complaint and all subsequent
proceedings and actions taken by the trial court were declared null and void.13
The present case, as above discussed, is among the several cases of under-
assessment of docket fee which were investigated by this Court together
with Manchester. The facts and circumstances of this case are similar
to Manchester. In the body of the original complaint, the total amount of
damages sought amounted to about P50 Million. In the prayer, the amount of
damages asked for was not stated. The action was for the refund of the
premium and the issuance of the writ of preliminary attachment with damages.
The amount of only P210.00 was paid for the docket fee. On January 23, 1986,
private respondent filed an amended complaint wherein in the prayer it is
asked that he be awarded no less than P10,000,000.00 as actual and
exemplary damages but in the body of the complaint the amount of his
pecuniary claim is approximately P44,601,623.70. Said amended complaint
was admitted and the private respondent was reassessed the additional docket
fee of P39,786.00 based on his prayer of not less than P10,000,000.00 in
damages, which he paid.
On April 24, 1986, private respondent filed a supplemental complaint alleging
an additional claim of P20,000,000.00 in damages so that his total claim is
approximately P64,601,620.70. On October 16, 1986, private respondent paid
an additional docket fee of P80,396.00. After the promulgation of the decision
of the respondent court on August 31, 1987 wherein private respondent was
ordered to be reassessed for additional docket fee, and during the pendency of
this petition, and after the promulgation of Manchester, on April 28, 1988,
private respondent paid an additional docket fee of P62,132.92. Although
private respondent appears to have paid a total amount of P182,824.90 for the
docket fee considering the total amount of his claim in the amended and
supplemental complaint amounting to about P64,601,620.70, petitioner insists
that private respondent must pay a docket fee of P257,810.49.
The principle in Manchester could very well be applied in the present case.
The pattern and the intent to defraud the government of the docket fee due it is
obvious not only in the filing of the original complaint but also in the filing of the
second amended complaint.
However, in Manchester, petitioner did not pay any additional docket fee until]
the case was decided by this Court on May 7, 1987. Thus, in Manchester, due
to the fraud committed on the government, this Court held that the court a
quo did not acquire jurisdiction over the case and that the amended complaint
could not have been admitted inasmuch as the original complaint was null and
void.
In the present case, a more liberal interpretation of the rules is called for
considering that, unlike Manchester, private respondent demonstrated his
willingness to abide by the rules by paying the additional docket fees as
required. The promulgation of the decision in Manchester must have had that
sobering influence on private respondent who thus paid the additional docket
fee as ordered by the respondent court. It triggered his change of stance by
manifesting his willingness to pay such additional docket fee as may be
ordered.
Nevertheless, petitioners contend that the docket fee that was paid is still
insufficient considering the total amount of the claim. This is a matter which the
clerk of court of the lower court and/or his duly authorized docket clerk or clerk
in-charge should determine and, thereafter, if any amount is found due, he
must require the private respondent to pay the same.
Thus, the Court rules as follows:
1. It is not simply the filing of the complaint or appropriate initiatory pleading,
but the payment of the prescribed docket fee, that vests a trial court with
jurisdiction over the subject matter or nature of the action. Where the filing of
the initiatory pleading is not accompanied by payment of the docket fee, the
court may allow payment of the fee within a reasonable time but in no case
beyond the applicable prescriptive or reglementary period.
2. The same rule applies to permissive counterclaims, third party claims and
similar pleadings, which shall not be considered filed until and unless the filing
fee prescribed therefor is paid. The court may also allow payment of said fee
within a reasonable time but also in no case beyond its applicable prescriptive
or reglementary period.
3. Where the trial court acquires jurisdiction over a claim by the filing of the
appropriate pleading and payment of the prescribed filing fee but,
subsequently, the judgment awards a claim not specified in the pleading, or if
specified the same has been left for determination by the court, the additional
filing fee therefor shall constitute a lien on the judgment. It shall be the
responsibility of the Clerk of Court or his duly authorized deputy to enforce said
lien and assess and collect the additional fee.
WHEREFORE, the petition is DISMISSED for lack of merit. The Clerk of Court
of the court a quo is hereby instructed to reassess and determine the
additional filing fee that should be paid by private respondent considering the
total amount of the claim sought in the original complaint and the supplemental
complaint as may be gleaned from the allegations and the prayer thereof and
to require private respondent to pay the deficiency, if any, without
pronouncement as to costs.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 171532 August 7, 2007
UNITED OVERSEAS BANK (formerly WESTMONT BANK), Petitioner,
vs.
HON. JUDGE REYNALDO ROS, Presiding Judge of the Regional Trial
Court of Manila, Branch 33, and ROSEMOOR MINING AND
DEVELOPMENT CORPORATION, Respondents.
DECISION
CHICO-NAZARIO, J.:
Before this Court is a Petition for Review on Certiorari under Rule 45 of the
Revised Rules of Court, filed by petitioner United Overseas Bank, seeking the
reversal and the setting aside of the Decision1 dated 19 April 2005, and the
Resolution2 dated 13 February 2006 of the Court of Appeals in CA-G.R. SP
No. 82626. The appellate court, in its assailed Decision and Resolution
affirmed the Order of the Regional Trial Court (RTC) of Manila, Branch 33,
denying the Motion to Dismiss Civil Case No. 98-90089 filed by petitioner on
the ground of estoppel.
Petitioner is a banking institution duly authorized as such under Philippine
laws.3
Private respondent Rosemoor Mining and Development Corporation, on the
other hand, is a domestic corporation likewise duly authorized by the Philippine
laws to engage in mining operation.4
On 5 August 1998, private respondent filed an action for damages, accounting,
release of the balance of the loan and machinery and annulment of foreclosure
sale against petitioner before the RTC of Manila, Branch 33. The case was
docketed as Civil Case No. 98-90089.5
In its Complaint,6 private respondent alleged that it obtained a loan from
petitioner in the amount of ₱80,000,000.00 in order to raise the needed capital
for the importation of machineries necessary for its operation. The said loan
was secured by two Real Estate Mortgage Contracts over several parcels of
land situated in the Provinces of Bulacan and Nueva Ecija.
The arrangement agreed to by the parties was for the petitioner to handle on
behalf of the private respondent the amount of ₱50,000,000.00 while the loan
balance of ₱30,000,000.00 will be released by petitioner to private respondent
as a revolving credit line. Petitioner, however, allegedly mishandled the
proceeds of the loan causing serious financial injury to private respondent.
On 10 August 1998, petitioner filed an Urgent Motion to Dismiss7 the private
respondent’s complaint on the ground of improper venue since the said
complaint included the prayer for the nullification of the foreclosure of real
estate mortgage, a real action which must be lodged before the RTC of the
place where the property or one of the properties is situated. Consequently,
the private respondent amended its Complaint, this time praying for
Accounting, Release of the Balance of the Loan and Damages.
In resolving petitioner’s Urgent Motion to Dismiss, the RTC of Manila issued an
Omnibus Resolution8 on 24 January 2000 denying the same for lack of merit.
Petitioner timely interposed a Motion for Reconsideration9 but it was also
denied by the lower court in an Order10 dated 29 May 2000.
On 11 November 1999, private respondent filed a Second Amended
Complaint, dropping Lourdes Pascual as plaintiff and impleaded the officers of
the petitioners namely, Florido Casuela, Rolando Castro, Avelina de la Cruz
and Proserfina Cruz, as defendants.
Subsequently, petitioner filed its Answer with Counterclaim.11 After the pre-trial
was conducted, trial on the merits ensued.
On 11 March 2002, private respondent filed another action for Injunction with
Damages before the RTC of Malolos, Bulacan docketed as Civil Case No. 275-
M-2002.12
The filing of the above mentioned case prompted the petitioner to file a second
Motion to Dismiss13 Civil Case No. 98-90089, before the RTC of Manila on the
ground of forum shopping. In an Order14 dated 23 October 2002, the Manila
RTC denied the second Motion to Dismiss for lack or merit. The subsequent
Motion for Reconsideration15filed by the petitioner was also denied for the
arguments raised therein were merely a rehash of the issues already raised
and considered by the lower court.16
On 29 September 2003, a third Motion to Dismiss Civil Case No. 98-90089
was filed by the petitioner with the Manila RTC this time raising the issue of
jurisdiction. In its latest Motion to Dismiss, petitioner claimed that private
respondent failed to specify the amount of damages, either in the body or the
prayer of its Second Amended Complaint, in order to evade the payment of the
docket fees. As a result, the Manila RTC cannot acquire jurisdiction over the
main action, which should be dismissed.
On 16 October 2003, the Manila RTC denied petitioner’s third Motion to
Dismiss Civil Case No. 98-90089 on the ground that petitioner was already
estopped to raise the issue. Having participated in several stages of the
proceedings, and having invoked the authority of the court by seeking an
affirmative relief therefrom through the filing of the Answer with Counterclaim,
petitioner was now barred from assailing the authority of the Court to hear and
decide the case.17 The dispositive portion of the Order of the Manila RTC dated
16 October 2003 thus reads:
WHEREFORE, the motion to dismiss is DENIED on the ground of estoppel.
Similarly ill-fated was petitioner’s motion for reconsideration of the foregoing
Order which was denied by the RTC in another Order dated 5 January 2004.18
Aggrieved, petitioner filed a Petition for Certiorari19 before the Court of
Appeals, alleging that the Manila RTC acted with grave abuse of discretion
amounting to lack or excess of jurisdiction in issuing the Orders dated 16
October 2003 and 5 January 2004.
In a Decision20 promulgated on 19 April 2005, the Court of Appeals affirmed
the Manila RTC Orders dated 16 October 2003 and 5 January 2004 and
upheld the latter’s finding that petitioner was now barred from questioning the
jurisdiction of the lower court after it had participated in several stages of the
proceedings therein including the presentation of its witness. In addition, the
appellate court declared that an interlocutory order, such as an Order denying
the Motion to Dismiss, cannot be the subject of the extraordinary remedy of
certiorari, save on well-recognized exceptions, which were wanting in the
instant case.
The Court of Appeals likewise denied petitioner’s Motion for Reconsideration,
since the arguments raised therein were mere reiterations of those already
considered and passed upon by the appellate court.21
Undaunted, petitioner filed this instant Petition for Review on Certiorari22 before
this Court, alleging that the Decision and Resolution of the Court of Appeals
denying its Petition for Certiorari are contrary to law.
For the resolution of this Court then are the following issues:
I. WHETHER OR NOT THE COURT OF APPEALS ERRED IN
DENYING THE PETITION FOR CERTIORARI FILED BY THE
PETITIONER.
II. WHETHER OR NOT THE PETITIONER IS BARRED BY LACHES
FROM QUESTIONING THE RTC’s JURISDICTION.
III. WHETHER OR NOT THE FAILURE OF THE PRIVATE
RESPONDENT TO PAY THE DOCKET FEES WARRANTS THE
DISMISSAL OF THE INSTANT CASE.
Petitioner asserts that the appellate court committed an error of law in
dismissing its petition for certiorari and affirming the Orders dated 16 October
2003 and 5 January 2004 of the RTC. It argues that the private respondent’s
attempted subterfuge, i.e., failing to state the amount of damages being
claimed and to pay the corresponding docket fees, warrant the penalty of
dismissal of its case.
At the outset, attention must be called to Section 1, Rule 41 of the 1997
Revised Rules of Civil Procedure, to wit:
SECTION 1. Subject of appeal. - An appeal may be taken from a judgment or
final order that completely disposes of the case, or of a particular matter
therein when declared by these Rules to be appealable.
No appeal may be taken from:
(a) An order denying a motion for new trial or reconsideration;
(b) An order denying a petition for relief or any similar motion seeking
relief from judgment;
(c) An interlocutory order;
(d) An order disallowing or dismissing an appeal;
(e) An order denying a motion to set aside a judgment by consent,
confession or compromise on the ground of fraud, mistake or duress,
or any other ground vitiating consent;
(f) An order of execution;
(g) A judgment or final order for or against one or more of several
parties or in separate claims, counterclaims, crossclaims and third-
party complaints, while the main case is pending, unless the court
allows an appeal therefrom; and
(h) An order dismissing an action without prejudice;
In all the above instances where the judgment or final order is not appealable,
the aggrieved party may file an appropriate special civil action under Rule 65.
(Emphasis provided.)
Based on the foregoing, it is clear that no appeal, under Rule 45 of the Revised
Rules of Court, may be taken from an interlocutory order. In case of denial of
an interlocutory order, the immediate remedy available to the aggrieved party
is to file an appropriate Special Civil Action for Certiorari under Rule 65 of the
Revised Rules of Court.
The word interlocutory refers to something intervening between the
commencement and the end of the suit which decides some point or matter but
is not a final decision of the whole controversy.23 This Court had the occasion
to distinguish a final order or resolution from an interlocutory one in the case of
Investments, Inc. v. Court of Appeals, thus:
x x x A "final" judgment or order is one that finally disposes of a case, leaving
nothing more to be done by the Court in respect thereto, e.g., an adjudication
on the merits which, on the basis of the evidence presented on the trial,
declares categorically what the rights and obligations of the parties are and
which party is in the right; or a judgment or order that dismisses an action on
the ground, for instance, of res judicata or prescription. Once rendered, the
task of the Court is ended, as far as deciding the controversy or determining
the rights and liabilities of the litigants is concerned. Nothing more remains to
be done by the Court except to await the parties’ next move (which among
others, may consist of the filing of a motion for new trial or reconsideration, or
the taking of an appeal) and ultimately, of course, to cause the execution of the
judgment once it becomes "final" or, to use the established and more
distinctive term, "final and executory."
xxxx
Conversely, an order that does not finally dispose of the case, and does not
end the Court’s task of adjudicating the parties’ contentions and determining
their rights and liabilities as regards each other, but obviously indicates that
other things remain to be done by the Court, is "interlocutory" e.g., an order
denying motion to dismiss under Rule 16 of the Rules, or granting of motion on
extension of time to file a pleading, or authorizing amendment thereof, or
granting or denying applications for postponement, or production or inspection
of documents or things, etc. Unlike a "final" judgment or order, which is
appealable, as above pointed out, an "interlocutory" order may not be
questioned on appeal except only as part of an appeal that may eventually be
taken from the final judgment rendered in the case.24
Since an Order denying a Motion to Dismiss does not finally dispose of the
case, and in effect, allows the case to proceed until the final adjudication
thereof by the court, then such order is merely interlocutory in nature.
In affirming the interlocutory nature of an order denying a motion to dismiss,
the Court thus categorically declares in Españo v. Court of Appeals25 :
We find occasion here to state the rule, once more, that an order denying a
motion to dismiss is merely interlocutory and therefore not appealable, nor can
it be subject of a petition for review on certiorari. Such order may only be
reviewed in the ordinary course of law by an appeal from the judgment after
trial. The ordinary procedure to be followed in that event is to file an answer, go
to trial, and if the decision is adverse, reiterate the issue on appeal from the
final judgment.
Indubitably, the Order of the RTC dated 16 October 2003 is merely an
interlocutory order which cannot be made the subject of appeal or certiorari.
This rule is founded on considerations of orderly procedure, to forestall useless
appeals and avoid undue inconvenience to the appealing party by having to
assail orders as they are promulgated by the court, when all such orders may
be contested in a single appeal.26 To allow appeals from interlocutory orders
would result in the "sorry spectacle" of a case being a subject of a counter-
productive ping-pong to and from the trial court, as often as the trial court is
perceived to have made an error in any of its interlocutory resolutions.27
In Sitchon v. Sheriff of Occidental Negros,28 this Court reiterated the rationale
for this rule:
The reason of the law in permitting appeal only from a final order or judgment,
and not from interlocutory or incidental one, is to avoid multiplicity of appeals in
a single action, which must necessarily suspend the hearing and decision on
the merits of the case during the pendency of the appeal. If such appeal were
allowed the trial on the merits of the case should necessarily be delayed for a
considerable length of time, and compel the adverse party to incur
unnecessary expenses; for one of the parties may interpose as many appeals
as incidental questions may be raised by him and interlocutory orders rendered
or issued by the lower court.
However, the aggrieved party is not without remedy under the law after his
Motion to Dismiss the case was denied by the lower court. As stated above,
the aggrieved party may wait for the court a quo to render a judgment or
decision and reiterate such interlocutory order as an error of the court on
appeal.29
In underscoring this remedy, we further ruled in Espaňo v. Court of Appeals30 :
We find the occasion here to state the rule, once more, that an order denying a
motion to dismiss is merely interlocutory and therefore not appealable, nor can
it be the subject of a petition for review on certiorari. Such order may only be
reviewed in the ordinary course of law by an appeal from the judgment after
the trial. The ordinary procedure to be followed in that event is to file an
answer, go to trial, and if the decision is adverse, reiterate the issue on appeal
from the final judgment.
In J.L. Bernardo Construction v. Court of Appeals,31 this Court also prescribed
an alternative remedy to be taken from an order denying a motion to dismiss:
As a general rule, an interlocutory order is not appealable until after the
rendition of the judgment on the merits for a contrary rule would delay the
administration of justice and unduly burden the courts. However, we have ruled
that certiorari is an appropriate remedy to assail an interlocutory order (1)
when the tribunal issued such order without or in excess of jurisdiction or with
grave abuse jurisdiction and (2) when the assailed interlocutory order is
patently erroneous and the remedy of appeal would not afford adequate and
expeditious relief.
Since the aggrieved party did not wait for the final determination of Civil Case
No. 98-90089 from which he could appeal, but opted to assail the Manila RTC
Order dated 16 October 2003 through a Petition for Certiorari before the Court
of Appeals, it is imperative upon this Court to determine whether the
prerequisites prescribed in the J.L. Bernardo Construction for initiating an
original action for certiorari are attendant in the case at bar. This Court must
thus address the issue of whether the Manila RTC in issuing its 16 October
2003 Order gravely abused its discretion.
The Manila RTC grounded its Order dated 16 October 2003, denying
petitioner’s Motion to Dismiss on estoppel, rationating in this wise:
This Court would have agreed with the [petitioner] had this question been
raised earlier. The Court notes that this motion was filed at the time when the
[petitioner] [was] supposed to cross-examine the [private respondent’s] witness
Dra. Lourdes S. Pascual, whose testimony was taken only after five (5) years
since the case was filed on August 5, 1998. Indeed, the said [petitioner] [is]
already in estoppel to question the jurisdiction of this Court.
In the case of Maersk Tabacalera Shipping Agency vs. Court of Appeals, 187
SCRA 646, the Supreme Court ruled:
"Unlike Manchester, however, were the jurisdictional issue arising from
insufficiency of the docket fee paid was seasonably raised in the answer of the
defendant in the trial court, in this case, the issue is being raised for the first
time. Petitioner submitted to the jurisdiction of the trial court without question. It
filed a counterclaim seeking affirmative reliefs, and actively took part in the
trial. A party who voluntarily participates in the trial cannot later on raise the
issue of the Court’s lack of jurisdiction. (Tan Boon Bee and Co. vs. Judge
Jarencio, 163 SCRA 205).
In the case at bar, the said [petitioner] filed their counter-claim seeking
affirmative relief and then filed a motion to dismiss without raising the issue of
non-payment of docket fees. And when plaintiff’s witness Dra. Lourdes S.
Pascual was presented on direct examination the said [petitioner] did not
object and participated in the proceedings. It is only when the said witness was
to be cross examined that the issue of non-payment of docket fees was raised.
Clearly, the said [petitioner] [is] in estoppel to question the jurisdiction of the
Court.32
After carefully examining the aforequoted Order in light of the prevailing
circumstances surrounding its issuance, we find nothing which would support
petitioner’s contention that the lower court abused its discretion in denying
petitioner’s Motion to Dismiss or that the assailed Order was patently
erroneous. To the contrary, the Manila RTC Order dated 16 October 2003 was
sufficiently supported by the evidence on record and jurisprudence.
In its Order, the lower court even recognized the validity of petitioner’s claim of
lack of jurisdiction had it timely raised the issue. It bears to stress that the non-
payment of the docket fees by private respondent and the supposed lack of
jurisdiction of the Manila RTC over Civil Case No. 98-90089 was raised by the
petitioner only five years after institution of the instant case and after one of the
private respondent’s witnesses was directly examined in open court. Not only
that, the petitioner even implored the court a quo’s jurisdiction by filing an
Answer with Counterclaim praying that the amount of ₱12,643,478.46 as
deficiency claim of the credit granted to private respondent and the sum
₱6,411,786.19 as full payment of one of the Letters of Credit, be awarded in its
favor. Petitioner likewise prayed for the award of exemplary damages in the
amount of ₱1,000,000.00, attorney’s fees and cost of the suit.
It should also be underscored that the petitioner interposed a second Motion to
Dismiss after the private respondent filed its Second Amended Complaint but
never questioned therein private respondent’s non-payment of docket fees and
the Manila RTC’s lack of jurisdiction over the case by reason thereof.
The petitioner would like to sway this Court that the ripe time to raise the issue
of lack of jurisdiction of the Manila RTC arose only after the testimony of one of
the private respondent’s witnesses when it became evident that the private
respondent failed to make good its promise that it would eventually specify the
amount of damages it was claiming.
This Court, however, is not persuaded. It is incumbent upon the petitioner to
file a Motion to Dismiss at the earliest opportune time to raise the issue of the
court’s lack of jurisdiction, more so, that this issue is susceptible to laches.
Petitioner’s failure to seasonably raise the question of jurisdiction leads us to
the inevitable conclusion that it is now barred by laches to assail the Manila
RTC’s jurisdiction over the case. As defined in the landmark case of Tijam v.
Sibonghanoy33 :
Laches, in general sense, is failure or neglect, for an unreasonable and
unexplained length of time, to do that which, by exercising due diligence, could
or should have been done earlier; it is negligence or omission to assert a right
within a reasonable length of time, warranting a presumption that the party
entitled to assert it either has abandoned it or declined to assert it.
It has been held that a party cannot invoke the jurisdiction of a court to secure
affirmative relief against his opponent and, after obtaining or failing to obtain
such relief, repudiate or question that same jurisdiction. By way of explaining
the rule, it was further said that the question of whether or not the court had
jurisdiction either over the subject matter of the action or the parties is not
important in such cases because the party is barred from such conduct, not
because the judgment or the order of the court is valid and conclusive as an
adjudication, but for the reason that such a practice cannot be tolerated by
reason of public policy.34
The doctrine of laches or of "stale demands" is based upon grounds of public
policy which requires, for the peace of society, the discouragement of stale
claims and, unlike the statute of limitation, is not merely a question of time but
is principally a question of the inequity or unfairness of permitting a right or
claim to be enforced or asserted.35
There is no absolute rule as to what constitutes laches or staleness of
demand; each case is to be determined according to its particular
circumstances. Ultimately, however, the question of laches is addressed to the
sound discretion of the court and, since it is an equitable doctrine, its
application is controlled by equitable consideration. 36
Since the Manila RTC ruled that the petitioner is now estopped by laches from
questioning its jurisdiction and considering that its Order denying petitioner’s
Motion to Dismiss is not tainted with grave abuse of discretion but wholly
substantiated by the evidence on the record, this Court would no longer disturb
said order.
Of significant application in the case at bar is our ruling in the case of
Pantranco North Express, Inc. v. Court of Appeals37 :
[P]articipating in all stages of the case before the trial court and even invoking
the trial court’s authority in order to ask for affirmative relief, the petitioner is
effectively barred by estoppel from challenging the court’s jurisdiction.
Even granting arguendo that petitioner is not barred from questioning the
jurisdiction of the Manila RTC by estoppel, this petition will still fail on the
merits. Petitioner’s own construction of the doctrine laid down in the cases of
Manchester Development Corporation v. Court of Appeals,38 and Sun
Insurance Office, Ltd., (SIOL) v. Asuncion39is skewed.
It must be stressed that the application of the doctrines enunciated by this
Court in the cases of Manchester and Sun Insurance must be guided by the
prevailing circumstance attendant to each and the respective strict and liberal
construction of the rules on the payment of docket fees prescribed therein
must not be sought to evade penalty of one’s fraudulent act or to attribute
fraud, in the absence of any.
In Manchester, we ruled that the court acquires jurisdiction over any case only
upon payment of the prescribed docket fee. An amendment of the complaint or
similar pleading will not thereby vest jurisdiction in the court, much less the
payment of the docket fee based on the amount sought in the amended
pleading. The strict set of guidelines provided in Manchester was prompted by
the fraudulent intent of the counsel in said case to avoid payment of the
required docket fee.40
Faced with an entirely different set of circumstances in Sun Insurance, we
modified our ruling in Manchester and decreed that where the initiatory
pleading is not accompanied by the payment of the docket fee, the court may
allow payment of the fee within reasonable period of time, but in no case
beyond the applicable prescriptive or reglementary period. The aforesaid ruling
was made on the justification that, unlike in Manchester, the private
respondent in Sun Insurance demonstrated his willingness to abide by the
rules by paying the additional docket fees required.41
The petitioner posits that this Court’s pronouncement in Sun Insurance is not
applicable to the private respondent, since it employed fraudulent schemes in
order to deprive the court of the docket fees due. It highlights the private
respondent’s act of omitting the amount of damages in its Second Amended
Complaint and emboldens such act in order to make it appear that the present
case is of the same circumstance as that of Manchester.
Again, we do not agree. This Court wonders how the petitioner could possibly
arrive at the conclusion that the private respondent was moved by fraudulent
intent in omitting the amount of damages claimed in its Second Amended
Complaint, thus placing itself on the same footing as the complainant in
Manchester, when it is clear that the factual milieu of the instant case is far
from that of Manchester.
First, the complainant in Manchester paid the docket fee only in the amount of
₱410.00, notwithstanding its claim for damages in the amount of
₱78,750,000.00, while in the present case, the private respondent paid
₱42,000.00 as docket fees upon filing of the original complaint.
Second, complainant’s counsel in Manchester claimed, in the body of the
complaint, damages in the amount of ₱78,750.00 but omitted the same in its
prayer in order to evade the payment of docket fees. Such fraud-defining
circumstance is absent in the instant petition.
Finally, when the court took cognizance of the issue of non-payment of docket
fees in Manchester, the complainant therein filed an amended complaint, this
time omitting all mention of the amount of damages being claimed in the body
of the complaint; and when directed by the court to specify the amount of
damages in such amended complaint, it reduced the same from
₱78,750,000.00 to ₱10,000,000.00, obviously to avoid payment of the required
docket fee. Again, this patent fraudulent scheme is wanting in the case at bar.
This Court is not inclined to adopt the petitioner’s piecemeal construction of our
rulings in Manchester and Sun Insurance. Its attempt to strip the said landmark
cases of one or two lines and use them to bolster its arguments and clothe its
position with jurisprudential blessing must be struck down by this Court. 1avv ph!l
All told, the rule is clear and simple. In case where the party does not
deliberately intend to defraud the court in payment of docket fees, and
manifests its willingness to abide by the rules by paying additional docket fees
when required by the court, the liberal doctrine enunciated in Sun Insurance
and not the strict regulations set in Manchester will apply.
In the case at bar, it was not shown that the private respondent, in failing to
state the exact amount of damages it was claiming in its Second Amended
Complaint intended to defraud the court of the docket fees due. In the first
place, upon filing of the original Complaint, the private respondent paid docket
fees in the amount of ₱42,000.00. Clearly, the circumstances attendant in
Manchester, that prompted this Court to dismiss the case then before it, are
wanting herein. Thus, in PNOC Shipping and Transport Corporation v. Court of
Appeals,42 we ruled:
With respect to petitioner’s contention that the lower court did not acquire
jurisdiction over the amended complaint increasing the amount of damages
claimed to ₱600,000.00, we agree with the Court of Appeals that the lower
court acquired jurisdiction over the case when private respondent paid the
docket fee corresponding to its claim in its original complaint. Its failure to fee
the docket fee corresponding to its increased claim for damages under the
amended complaint should not be considered as having curtailed the lower
court’s jurisdiction. Pursuant to the ruling in Sun Insurance Office, Ltd., (SIOL)
v. Asuncion, the unpaid docket fee should be considered as a lien on the
judgment even though private respondent specified the amount of
₱600,000.00 as its claim for damages in its amended complaint.
Based on the foregoing, it is but proper therefore, that this case should not be
dismissed but be allowed to continue until judgment, and the private
respondent’s unpaid docket fee should be considered as a lien on any
monetary judgment in its favor.
WHEREFORE, IN VIEW OF THE FOREGOING, the instant Petition
is DENIED. The Decision dated 19 April 2005, and the Resolution dated 13
February 2006, rendered by the Court of Appeals in CA-G.R. SP No. 82626,
are hereby AFFIRMED.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 179878 December 24, 2008
NEGROS ORIENTAL PLANTERS ASSOCIATION, INC. (NOPA), petitioner,
vs.
HON. PRESIDING JUDGE OF RTC-NEGROS OCCIDENTAL, BRANCH 52,
BACOLOD CITY, and ANICETO MANOJO CAMPOS, respondents.
DECISION
CHICO-NAZARIO, J.:
What’s sauce for the goose is sauce for the gander.
This is a Petition for Review on Certiorari seeking the reversal of the
Resolutions1 of the Court of Appeals dated 23 May 2007 and 16 August 2007,
respectively, in CA-G.R. SP No. 02651 outrightly dismissing the Petition
for Certiorari filed by petitioner Negros Oriental Planters Association, Inc.
(NOPA) against private respondent Aniceto Manojo Campos (Campos).
On 17 March 1999, Campos filed a Complaint for Breach of Contract with
Damages, docketed as Civil Case No. 99-10773, against NOPA before the
Regional Trial Court (RTC) of Negros Occidental, Bacolod City. According to
the Complaint, Campos and NOPA entered into two separate contracts
denominated as Molasses Sales Agreement. Campos allegedly paid the
consideration of the Molasses Sales Agreement in full, but was only able to
receive a partial delivery of the molasses because of a disagreement as to the
quality of the products being delivered.
On 17 August 2005, more than six years after NOPA filed its Answer, NOPA
filed a Motion to Dismiss on the ground of an alleged failure of Campos to file
the correct filing fee. According to NOPA, Campos deliberately concealed in
his Complaint the exact amount of actual damages by opting to estimate the
value of the unwithdrawn molasses in order to escape the payment of the
proper docket fees.
On 30 June 2006, the RTC issued an Order denying the Motion to Dismiss.
NOPA received this Order on 17 July 2006.
On 1 August 2006, NOPA filed a Motion for Reconsideration of the 30 June
2006 Order. On 5 January 2007, the RTC issued an Order denying NOPA’s
Motion for Reconsideration.
On 2 April 2007, NOPA filed a Petition for Certiorari before the Court of
Appeals assailing the Orders of the RTC dated 30 June 2006 and 5 January
2007.
On 23 May 2007, the Court of Appeals issued the first assailed Resolution
dismissing the Petition for Certiorari on the following grounds:
1. Failure of the Petitioner to state in its Verification that the allegations
in the petition are "based on authentic records", in violation of Section
4, Rule 7, of the 1997 Rules of Civil Procedure, as amended by A.M.
No. 00-2-10-SC (May 1, 2000), which provides:
" – x x x - A pleading is verified by an affidavit that the affiant
has read the pleading and that the allegations therein are true
and correct of his personal knowledge or based on authentic
records.
A pleading required to be verified which contains a verification
based on "information and belief," or lacks a proper
verification, shall be treated as an unsigned pleading."
2. Failure of the petitioner to append to the petition relevant pleadings
and documents, which would aid in the resolution of the instant
petition, in violation of Section 1, Rule 65 of the Rules of Court, such
as:
a. Ex-parte Motion to Set the Case for Pre-Trial dated July 27,
1999;
b. Notice of Pre-Trial;
c. Motion for Leave to File Third Party Complaint;
d. Orders dated July 31, 2000, March 20 2001, November 17,
2004, and May 17, 2005, respectively;
e. Motion to Suspend the Proceedings dated August 10, 2003;
f. Motion to Dismiss for Failure to Prosecute; and
g. Motion for Reconsideration to the Order dated May 12, 2005.
Section 1, Rule 65 of the Rules of Court, provides:
"When any tribunal, board or officer exercising judicial or quasi-
judicial functions has acted without or in excess of its or his
jurisdiction, or with grave abuse of discretion amounting to lack
or excess of jurisdiction, and there is no appeal, or any plain,
speedy, and adequate remedy in the ordinary course of law, a
person aggrieved thereby may file a verified petition in the
proper court, alleging the facts with certainty and praying that
judgment be rendered annulling or modifying the proceedings
of such tribunal, board or officer, and granting such incidental
reliefs as law and justice may require.
The petition shall be accompanied by a certified true copy of
the judgment, order or resolution subject thereof, copies of all
pleadings and documents relevant and pertinent thereto,
and a sworn certification of non-forum shopping as provided in
the paragraph of section 3, Rule 46."
3. Failure of petitioner’s counsel to indicate in the petition his current
IBP Official Receipt Number, in violation of Bar Matter No. 1132 and/or
A.M. No. 287, which reads as follows:
"The Court resolved, upon recommendation of the Office of the
Bar Confidant, to GRANT the request of the Board of
Governors of the Integrated Bar of the Philippines and the
Sanguniang Panlalawigan of Ilocos Norte to require all lawyers
to indicate their Roll of Attorneys Number in all papers or
pleadings submitted to the various judicial or quasi-judicial
bodies in addition to the requirement of indicating the current
Professional Tax Receipt (PTR) and the IBP Official Receipt or
Lifetime Member Number."2
On 22 June 2007, NOPA filed a Motion for Reconsideration of the above
Resolution, attaching thereto an Amended Petition for Certiorari in compliance
with the requirements of the Court of Appeals deemed to have been violated
by NOPA. The Court of Appeals denied the said Motion in the second assailed
Resolution dated 16 August 2007.
Hence, this Petition for Review on Certiorari, where NOPA raises the following
issue and arguments:
ISSUE
WHETHER OR NOT THE PUBLIC RESPONDENT CA COMMITTED
REVERSIBLE ERROR WHEN IT RULED THAT THERE WAS NO
SUBSTANTIAL COMPLIANCE WITH THE PROCEDURAL
REQUIREMENTS WHEN PETITIONER FAILED TO ALLEGE IN ITS
 VERIFICATION THAT THE ALLEGATIONS THEREIN ARE TRUE
AND CORRECT OF HIS PERSONAL KNOWLEDGE OR BASED ON
AUTHENTIC RECORDS AND FAILURE TO ATTACH THE
NECESSARY DOCUMENTS ON ITS PLEADINGS AS REQUIRED BY
SECTION 1, RULE 65 OF THE 1997 RULES OF CIVIL
PROCEDURE.3
ARGUMENTS
1. The requirement that a pleading be verified is merely formal and not
jurisdictional. The court may give due course to an unverified pleading
where the material facts alleged are a matter of record and the
questions raised are mainly of law such as in a petition for certiorari.4
2. Petitioner had attached to its Petition for Certiorari clearly legible and
duplicate original or a certified true copy of the judgment or final order
or resolution of the court a quo and the requisite number of plain
copies thereof and such material portions of the record as would
support the petition.5
3. Substantial compliance of the rules, which was further supplied by
the petitioner’s subsequent full compliance demonstrates its good faith
to abide by the procedural requirements.6
4. The resolution of the important jurisdictional issue raised by the
petitioner before the PUBLIC RESPONDENT CA would justify a
relaxation of the rules.7
The original Verification in the original Petition for Certiorari filed by NOPA
states as follows:
1. That I am the President and Chairman of the Board of Directors of
Negros Oriental Planters’ Association, Inc. (NOPA), the petitioner in
this case, a domestic corporation duly organized under Philippine
Laws, with principal place of business at Central Bais, Bais City,
Philippines; that I am duly authorized by the Board of NOPA
(Secretary’s Certificate attached as Annex "A") to cause the
preparation of the foregoing petition; and that I hereby affirm and
confirm that all the allegations contained herein are true and correct to
my own knowledge and belief;8
NOPA claims that this Court has in several cases allowed pleadings with a
Verification that contains the allegation "to the best of my knowledge" and the
allegation "are true and correct," without the words "of his own knowledge,"
citing Decano v. Edu,9 and Quimpo v. De la Victoria.10 NOPA claims that the
allegations in these cases constitute substantial compliance with the Rules of
Court, and should likewise apply to the case at bar.
NOPA is mistaken. NOPA cited cases promulgated before 1 May 2000, when
Section 4 of Rule 7 was amended by A.M. No. 00-2-10. Before the
amendment, said Section 4 stated:
SEC. 4. Verification.–Except when otherwise specifically required by
law or rule, pleadings need not be under oath, verified or accompanied
by affidavit.
A pleading is verified by an affidavit that the affiant has read the
pleading and that the allegations therein are true and correct of his
knowledge and belief.
As amended, said Section 4 now states:
SEC. 4. Verification.–Except when otherwise specifically required by
law or rule, pleadings need not be under oath, verified or accompanied
by affidavit.
A pleading is verified by an affidavit that the affiant has read the
pleading and that the allegations therein are true and correct of his
personal knowledge or based on authentic records.
Clearly, the amendment was introduced in order to make the verification
requirement stricter, such that the party cannot now merely state under oath
that he believes the statements made in the pleading. He cannot even merely
state under oath that he has knowledge that such statements are true and
correct. His knowledge must be specifically alleged under oath to be
either personal knowledge or at least based on authentic records.
Unlike, however, the requirement for a Certification against Forum Shopping in
Section 5, wherein failure to comply with the requirements is not curable by
amendment of the complaint or other initiatory pleading,11 Section 4 of Rule 7,
as amended, states that the effect of the failure to properly verify a pleading is
that the pleading shall be treated as unsigned:
 A pleading required to be verified which contains a
verification based on "information and belief," or upon "knowledge,
information and belief," or lacks a proper verification, shall be
treated as an unsigned pleading.
Unsigned pleadings are discussed in the immediately preceding section of
Rule 7:
SEC. 3. Signature and address. – x x x.
xxxx
An unsigned pleading produces no legal effect. However, the court
may, in its discretion, allow such deficiency to be remedied if it shall
appear that the same was due to mere inadvertence and not intended
for delay. Counsel who deliberately files an unsigned pleading, or signs
a pleading in violation of this Rule, or alleges scandalous or indecent
matter therein, or fails to promptly report to the court a change of his
address, shall be subject to appropriate disciplinary action. (5a)
A pleading, therefore, wherein the Verification is merely based on the party’s
knowledge and belief produces no legal effect, subject to the discretion of
the court to allow the deficiency to be remedied. In the case at bar, the
Court of Appeals, in the exercise of this discretion, refused to allow the
deficiency in the Verification to be remedied, by denying NOPA’s Motion for
Reconsideration with attached Amended Petition for Certiorari.
May an appellate court reverse the exercise of discretion by a lower court? The
old case of Lino Luna v. Arcenas12states that it can, but only in exceptional
cases when there is grave abuse of this discretion or adverse effect on the
substantial rights of a litigant:
Discretionary power is generally exercised by trial judges in
furtherance of the convenience of the courts and the litigants, the
expedition of business, and in the decision of interlocutory matters on
conflicting facts where one tribunal could not easily prescribe to
another the appropriate rule of procedure.
The general rule, therefore, and indeed one of the fundamental
principles of appellate procedure is that decisions of a trial court
which "lie in discretion" will not be reviewed on appeal, whether
the case be civil or criminal at law or in equity.
We have seen that where such rulings have to do with minor matters,
not affecting the substantial rights of the parties, the prohibition of
review in appellate proceedings is made absolute by the express terms
of the statute; but it would be a monstrous travesty on justice to
declare that where the exercise of discretionary power by an
inferior court affects adversely the substantial legal rights of a
litigant, it is not subject to review on appeal in any case wherein a
clear and affirmative showing is made of an abuse of discretion,
or of a total lack of its exercise, or of conduct amounting to an
abuse of discretion, such as its improper exercise under a
misapprehension of the law applicable to the facts upon which the
ruling is based.
In its very nature, the discretionary control conferred upon the trial
judge over the proceedings had before him implies the absence of any
hard-and-fast rule by which it is to be exercised, and in accordance
with which it may be reviewed. But the discretion conferred upon
the courts is not a willful, arbitrary, capricious and uncontrolled
discretion. It is a sound, judicial discretion which should always
be exercised with due regard to the rights of the parties and the
demands of equity and justice. As was said in the case of The Styria
vs. Morgan (186 U. S., 1, 9): "The establishment of a clearly defined
rule of action would be the end of discretion, and yet discretion should
not be a word for arbitrary will or inconsiderate action." So in the case
of Goodwin vs. Prime (92 Me., 355), it was said that "discretion implies
that in the absence of positive law or fixed rule the judge is to decide
by his view of expediency or by the demands of equity and justice."
There being no "positive law or fixed rule" to guide the judge in the
court below in such cases, there is no "positive law or fixed rule" to
guide a court of appeal in reviewing his action in the premises, and
such courts will not therefore attempt to control the exercise of
discretion by the court below unless it plainly appears that there was
"inconsiderate action" or the exercise of mere "arbitrary will," or in other
words that his action in the premises amounted to "an abuse of
discretion." But the right of an appellate court to review judicial acts
which lie in the discretion of inferior courts may properly be invoked
upon a showing of a strong and clear case of abuse of power to the
prejudice of the appellant, or that the ruling objected to rested on an
erroneous principle of law not vested in discretion.13
The case at bar demonstrates a situation in which there is no effect on the
substantial rights of a litigant. NOPA’s Petition for Certiorari is seeking the
reversal of the Orders of the RTC denying NOPA’s Motion to Dismiss on the
ground of failure to pay the proper docket fees. The alleged deficiency in the
payment of docket fees by Campos, if there is any, would not inure to the
benefit of NOPA.
There is therefore no substantive right that will be prejudiced by the Court of
Appeals’ exercise of discretion in the case at bar. While the payment of docket
fees is jurisdictional, it is nevertheless unmistakably also a technicality.
Ironically, in seeking the leniency of this Court on the basis of substantial
justice, NOPA is ultimately praying for a Writ of Certiorari enjoining the action
for breach of contract from being decided on the merits. What’s sauce for the
goose is sauce for the gander. A party cannot expect its opponent to comply
with the technical rules of procedure while, at the same time, hoping for the
relaxation of the technicalities in its favor.
There was therefore no grave abuse of discretion on the part of the Court of
Appeals warranting this Court’s reversal of the exercise of discretion by the
former. However, even if we decide to brush aside the lapses in technicalities
on the part of NOPA in its Petition for Certiorari, we nevertheless find that such
Petition would still fail.
NOPA seeks in its Petition for Certiorari for the application of this Court’s ruling
in Manchester Development Corporation v. Court of Appeals,14 wherein we
ruled that the court acquires jurisdiction over any case only upon payment of
the prescribed docket fee. An amendment of the complaint or similar pleading
will not thereby vest jurisdiction in the court, much less the payment of the
docket fee based on the amount sought in the amended pleading.
In denying15 NOPA’s Motion to Dismiss, the RTC cited Sun Insurance Office,
Ltd. (SIOL) v. Asuncion,16 wherein we modified our ruling in Manchester and
decreed that where the initiatory pleading is not accompanied by the payment
of the docket fee, the court may allow payment of the fee within a reasonable
period of time, but in no case beyond the applicable prescriptive or
reglementary period. The aforesaid ruling was made on the justification that,
unlike in Manchester, the private respondent in Sun Insurance Office, Ltd.
(SIOL) demonstrated his willingness to abide by the rules by paying the
additional docket fees required. NOPA claims that Sun is not applicable to the
case at bar, since Campos deliberately concealed his claim for damages in the
prayer.
In United Overseas Bank (formerly Westmont Bank) v. Ros,17 we discussed
how Manchester was not applicable to said case in view of the lack of
deliberate intent to defraud manifested in the latter:
This Court wonders how the petitioner could possibly arrive at the
conclusion that the private respondent was moved by fraudulent intent
in omitting the amount of damages claimed in its Second Amended
Complaint, thus placing itself on the same footing as the complainant
in Manchester, when it is clear that the factual milieu of the instant
case is far from that of Manchester.
First, the complainant in Manchester paid the docket fee only in
the amount of P410.00, notwithstanding its claim for damages in
the amount of P78,750,000.00, while in the present case, the
private respondent paid P42,000.00 as docket fees upon filing of
the original complaint.
Second, complainant's counsel in Manchester claimed, in the body of
the complaint, damages in the amount of P78,750.00 but omitted the
same in its prayer in order to evade the payment of docket fees. Such
fraud-defining circumstance is absent in the instant petition.
Finally, when the court took cognizance of the issue of non-
payment of docket fees in Manchester, the complainant therein
filed an amended complaint, this time omitting all mention of the
amount of damages being claimed in the body of the complaint;
and when directed by the court to specify the amount of damages
in such amended complaint, it reduced the same
from P78,750,000.00 to P10,000,000.00, obviously to avoid
payment of the required docket fee. Again, this patent fraudulent
scheme is wanting in the case at bar.
This Court is not inclined to adopt the petitioner's piecemeal
construction of our rulings in Manchester andSun Insurance. Its
attempt to strip the said landmark cases of one or two lines and use
them to bolster its arguments and clothe its position with jurisprudential
blessing must be struck down by this Court.
All told, the rule is clear and simple. In case where the party does not
deliberately intend to defraud the court in payment of docket fees,
and manifests its willingness to abide by the rules by paying
additional docket fees when required by the court, the liberal
 doctrine enunciated in Sun Insuranceand not the strict
regulations set in Manchester will apply.
In the case at bar, Campos filed an amount of P54,898.50 as docket fee,
based on the amounts of P10,000,000.00 representing the value of
unwithdrawn molasses, P100,00.00 as storage fee, P200,00.00 as moral
damages, P100,000.00 as exemplary damages and P500,000.00 as attorney’s
fees. The total amount considered in computing the docket fee
was P10,900,000.00. NOPA alleges that Campos deliberately omitted a claim
for unrealized profit of P100,000.00 and an excess amount of storage fee in
the amount of P502,875.98 in its prayer and, hence, the amount that should
have been considered in the payment of docket fees is P11,502,875.98. The
amount allegedly deliberately omitted was therefore only P602,875.98 out
of P11,502,875.98, or merely 5.2% of said alleged total. Campos’s pleadings
furthermore evince his willingness to abide by the rules by paying the
additional docket fees when required by the Court.
Since the circumstances of this case clearly show that there was no deliberate
intent to defraud the Court in the payment of docket fees, the case
of Sun should be applied, and the Motion to Dismiss by NOPA should be
denied.
WHEREFORE, the Resolutions of the Court of Appeals dated 23 May 2007
and 16 August 2007, respectively, in CA-G.R. SP No. 02651, outrightly
dismissing the Petition for Certiorari filed by petitioner Negros Oriental Planters
Association, Inc. against private respondent Aniceto Manojo Campos,
are AFFIRMED. No costs.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 96724 March 22, 1991
HONESTO GENERAL, petitioner,
vs.
HON. GRADUACION REYES CLARAVALL, Judge, Regional Trial Court at
Pasig, Br. 71, BENNETH THELMO and the PEOPLE OF THE
PHILIPPINES, respondents.
Quisumbing, Torres & Evangelista for petitioner.
Raymundo A. Armovit for private respondent.
RESOLUTION
NARVASA, J.:
Benneth Thelmo filed with the Office of the Public Prosecutor of Rizal a
sworn complaint accusing Honesto General and another person of
libel, and alleged that by reason of the offense he (Thelmo) had
suffered actual, moral and exemplary damages in the total sum of
P100 million. The information for libel subsequently filed with the RTC
at Pasig, after preliminary investigation, did not however contain any
allegation respecting the damages due the offended party. At the trial,
the defense raised the issue of non-payment of the docket fees
corresponding to the claim of damages contained in Thelmo's sworn
complaint before the fiscal, as a bar to Thelmo's pursuing his civil
action therefor. The trial Court overruled the objection, by Order dated
March 28, 1990. It also denied the defendants' motion for
reconsideration and motion for suspension of proceedings, by another
Order dated May 17, 1990.
General and his co-accused are now before this Court applying for a
writ of certiorari to annul the aforesaid Orders of the Trial Court on the
theory that they had been rendered with grave abuse of discretion. The
issue he poses is whether or not, in view of this Court's decision in
three (3) cases —
1) Manchester vs. C.A., 149 SCRA 562 (1987),1
2) Sun Insurance Office, Ltd. vs. Asuncion, 170 SCRA 274 (1989),2 and
3) Tacay vs. RTC, 180 SCRA 433 (1989),3
the rule should now be that the filing fees for the civil action for
the recovery of civil liability arising from the offense should first
be paid in order that said civil action may be deemed to have
 been impliedly instituted with the criminal and prosecuted in
due course.
Manchester laid down the doctrine the specific amounts of claims of
damages must be alleged both in the body and the prayer of the
complaint, and the filing fees corresponding thereto paid at the time of
the filing of the complaint; that if these requisites were not fulfilled,
jurisdiction could not be acquired by the trial court; and that
amendment of the complaint could not "thereby vest jurisdiction upon
the Court." Sun Insurance and Tacay affirmed the validity of the basic
principle but reduced its stringency somewhat by providing that only
those claims as to which the amounts were not specified would be
refused acceptance or expunged and that, in any case, the defect was
not necessarily fatal of irremediable as the plaintiff could on motion be
granted a reasonable time within which to amend his complaint and
pay the requisite filing fees, unless in the meantime the period of
limitation of the right of action was completed.
Now, at the time of the promulgation of the Manchester decision in
1987, Section 1, Rule 111 of the Rules of Court, as amended in
1985,4 read as follows:5
Sec. 1. Institution of criminal and civil actions. — When a
criminal action is instituted, the civil action for the recovery of
civil liability arising from the offense charged is impliedly
instituted with the criminal action, unless the offended party
expressly waives the civil action or reserves his right to institute
it separately. However, after the criminal action has been
commenced, the civil action cannot be instituted until final
judgment has been rendered in the criminal action.
When the offended party seeks to enforce civil liability against
the accused by way of actual, moral, nominal, temperate or
exemplary damages, the filing fees for such civil action as
provided in these Rules shall first be paid to the Clerk of Court
of the court where the criminal case is filed. In all other cases,
the filing fees corresponding to the civil liability awarded by the
court shall constitute a first lien on the judgment award and no
payment by execution or otherwise may be made to the
offended party without his first paying the amount of such filing
fees to the Clerk of Court. (1a)
The rules set forth in the first paragraph are substantial reproductions
of the corresponding sections of Rule 111 of the Rules of 1964. The
second paragraph is new. It was incorporated in the 1985 Rules on
Criminal Procedure in light of this Court's Resolution of September 13,
1984 in Adm. Matter No. 83-6-389-0,6 requiring increased court filing
fees effective October 1, 1984, which resolution pertinently provides
that:
. . . When the offended party seeks to enforce civil liability
against the accused by way of actual, moral, nominal,
temperate or exemplary damages, the filing fees for such civil
action as provided in the Rules of Court and approved by the
Court shall first be paid to the Clerk of the court where the
criminal action is filed. . . .
The purpose of the Resolution, according to the late Chief Justice
Claudio Teehankee,7 was to discourage the "gimmick of libel
complainants of using the fiscal's office to include in the criminal
information their claim for astronomical damages in multiple millions of
pesos without paying any filing fees." This was the same consideration
that underlay the Manchester ruling: the fraudulent practice,
manifested by counsel in said ". . . of omitting any specification of the
amount of damages in the prayer although the amount of over P78
million is alleged in the body of the complaint, . . . (an omission which
was) clearly intended for no other purpose than to evade the payment
of the correct filing fees if not to mislead the docket clerk in the
assessment of the filing fee."8
This Court however adopted further amendments to the 1985 Rules on
Criminal Procedure, with effect on October 1, 1988.9 Among the provisions
revised was Section 1, Rule 111. As thus amended, it now reads as follows:10
Sec. 1. Institution of criminal and civil actions. — When a criminal
action is instituted, the civil action for the recovery of civil liability is
impliedly with the criminal action, unless the offended party waives the
civil action, reserves his right to institute it separately, or institutes the
civil action prior to the criminal action.
Such civil action includes recovery of indemnity under the Revised
Penal Code, and damages under Articles 32, 33, 34 and 2176 of the
Civil Code of the Philippines arising from the same act or omission of
the accused.
 A waiver of any of the civil action extinguishes the others. The
institution of, or the reservation of the right to file, any of said civil
actions separately waives the others.
The reservation of the right to institute the separate civil actions shall
be made before the prosecution starts to present its evidence and
under circumstances affording the offended party a reasonable
opportunity to make such reservation.
In no case may the offended party recover damages twice for the same
act or omission of the accused.
When the offended party seeks to enforce civil liability against the
accused by way of moral, nominal, temperate or exemplary damages,
the filing fees for such civil action as provided in these Rules shall
constitute a first lien on the judgment except in an award for actual
damages.
In cases wherein the amount of damages, other than actual, is alleged
in the complaint or information, the corresponding filing fees shall be
paid by the offended party upon the filing thereof in court for trial. (1a)
The amendments were deliberated on and adopted by this Court after
the Manchester doctrine had been enunciated. Yet observe that the last two
(2) paragraphs prescribe a rule different from that in Manchester, and in the
1985 Rules on Criminal Procedure. Under the 1985 Rules, the filing fees for
the civil action impliedly instituted with the criminal had to be paid first to the
Clerk of the court where the criminal action was commenced, without regard to
whether the claim for such damages was set out in the information or not.
Under the 1988 Rules, however, it is only when "the amount of damages, other
than actual, is alleged in the complaint or information (that) the corresponding
filing fees shall be paid by the offended party upon the filing thereof in court for
trial." In any other case—i.e., when the amount of damages other than actual
is NOT alleged in the complaint or information—the filing fees for the civil
action "to enforce civil liability against the accused by way of moral, nominal,
temperate or exemplary damages . . . shall (merely) constitute a first lien on
the judgment except in an award for actual damages."
information—has thus been made manifest by the language of the amendatory
provisions.
In any event, the Court now makes that intent plainer, and in the interests of
clarity and certainty, categorically declares for the guidance of all concerned
that when a civil action is deemed impliedly instituted with the criminal in
accordance with Section 1, Rule 111 of the Rules of Court—because the
offended party has NOT waived the civil action, or reserved the right to institute
it separately, or instituted the civil action prior to the criminal action—the rule is
as follows:
1) when "the amount of damages, other than actual, is alleged in the complaint
or information" filed in court, then "the corresponding filing fees shall be paid
by the offended party upon the filing thereof in court for trial;"
2) in any other case, however—i.e., when the amount of damages is not so
alleged in the complaint or information filed in court, the corresponding filing
fees need not be paid and shall simply "constitute a first lien on the judgment,
except in an award for actual damages.
WHEREFORE, there being no error in the challenged Orders of the
respondent Court dated March 28, 1990 and May 17, 1990, these appearing
on the contrary to be in accord with the law and the facts, the Court Resolved
to DISMISS the petition, with costs against the petitioner.
Fernan, C.J., Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano,
Gancayco, Padilla, Bidin, Sarmiento, Griño-Aquino, Medialdea, Regalado and
Davide, Jr., JJ., concur.

This Court's plain intent—to make the Manchester doctrine, requiring payment
of filing fees at the time of the commencement of an action applicable to
impliedly instituted civil actions under Section 1, Rule 111 only when "the
amount of damages, other than actual, is alleged in the complaint or
 Republic of the Philippines Island and throughout Western Visayas, including Roxas City and
SUPREME COURT Capiz Province, conspiring, confederating together and mutually
Manila helping each other, did then and there, willfully, unlawfully and
feloniously, and with malicious intent of impeaching the integrity,
THIRD DIVISION credibility, honor, and reputation of DELIA MANUEL, and with further
malicious intent (to expose) DELIA MANUEL to public hatred,
contempt, disrespect and ridicule, prepare, write, arrange, and publish,
or cause to be prepared written arranged and published in the regular
issue of the said Panay News for the period September 20-22, 1991,
G.R. No. 115683 July 26, 1996
as Article in the front page and/or headline entitled "LOCAL SHABU
PEDDLER NOW A MILLIONARE" the text of which is quoted
DELIA MANUEL, petitioner, hereunder:
vs.
JUDGE DAVID ALFECHE, JR., in his capacity as then Presiding Judge of
LOCAL SHABU PEDDLER NOW A MILLIONAIRE
RTC, Region Six, Branch 15, Roxas City, FELIPE CELINO, DANNY
FAJARDO and LEMUEL FERNANDEZ, respondents.
BY: FELIPE V. CELINO
RESOLUTION
ROXAS CITY — A middle-aged woman here has joined
the ranks of millionaires after several years of selling
shabu in the island of Panay.
PANGANIBAN, J.:p
Named by Narcom agents as "Delia" this woman is the
In criminal prosecutions, the civil action is deemed impliedly instituted unless the complainant waives it, or
alleged "shabu Queen" in Western Visayas and has
reserves the right to institute it separately or files it prior to the criminal. Where the trial court renders a been (raking) in millions of pesos since she has started
judgment finding the accused guilty of libel, but motu proprio dismisses complainant's claims for, inter peddling shabu, marijuana and other prohibited drugs
alia, moral and exemplary damages on the ground of the complainant's failure to pay the filing fees therefor,
may the complainant raise the matter via petition for review on certiorari directly before this Court, while the in this part of the country.
judgment of conviction is on appeal before the Court of Appeals? This is the main question brought before this
court in this petition to set aside a portion of the Decision1 of the respondent judge dated April 21, 1994 in the
Criminal Case No. 3539 as well as the Order2 of the same court dated May 27, 1994 denying the motion for According to reliable sources, Delia has been
reconsideration. transporting about 750 grams of shabu weekly from
Manila to Panay. A gram of this poor man's Cocaine
The Facts has a street value of P1,00 more or less.

On January 9, 1992, the City Prosecutor of the City of Roxas filed with the What makes her business prosper almost unscathed
Regional Trial Court, 6th Judicial region, Branch 15, Roxas City an and very productive is the protection by her top ranking
Information3 for libel worded as follows: military officer in Manila, they said.

That on or about the period September 20-22, 1991, in the City of At present, the (sources) said, the shabu Queen is
Roxas, Philippines, and within the jurisdiction of this Honorable Court, residing near one of the private schools in this City. She
the said accused, FELIPE CELINO, being the writer/author; DANNY has three brand new cars. Her house's outside walls
FAJARDO, Editor-in-Chief; LEMUEL T. FERNANDEZ, Associate are made of bamboo but it is fully airconditioned and
Editor; and JOHN PAUL TIA, Assistant Editor of a regional newspaper complete with luxurious household appliances, PN
known as "Panay News" which has considerable circulation in Panay sources added.
 In Iloilo, Delia is known as "Madam-Ex". She doesn't
deal with small time users. "She specializes in deals
with scions of rich businessmen and even politicians."
The Narcom has allegedly been monitoring the
activities of the shabu queen but has not nailed her
down yet because of lack of cooperation from the
public.
which newspaper issues containing the abovequoted article were sent
and circulated to, or caused to be sent or circulated to, and actually
read by subscribers and other readers, especially those in the City of
Roxas and Province of Capiz.
That said accused intended to convey, as in fact (have) actually
conveyed in said article, false imputations and malicious insinuations
against the said DELIA MANUEL, that is, that said Delia Manuel is the
alleged "SHABU QUEEN" in Western Visayas and has been raking in
millions of pesos since she started peddling shabu, marijuana and
other prohibited drugs in this part of the country, with no good intention
or justifiable motives, thereby (unjustly) and unlawfully besmirching the
good name, character, and reputation of said Delia Manuel as a private
person and as a businesswoman.
That as a direct consequence of the publication of the said article, said
Delia Manuel suffered actual, moral and exemplary damages in the
amount of TEN MILLION PESOS (10,000,000.00). (emphasis
supplied)
After trial, the respondent judge rendered the assailed Decision finding three of
the accused guilty and acquitting a fourth. However, "(t)he civil indemnity by
way of moral damages (was) dismissed for lack of jurisdiction" on the ground
that petitioner did not pay the filing fees therefor. In the words of the
respondent court:
. . . , close scrutiny of the record disclose that while the offended party
seeks to enforce civil liability against the accused by way of moral
damages in the amount of P10,000,000.00 which is alleged in the
information, there was no payment of the filing of the information on
January 9, 1992. For failing in this requisite, the court did not acquire
jurisdiction on the civil indemnity thus claimed. Hence, the claim for
recovery of moral damages by the offended party is dismissed.
The respondent court cited General vs. Claravall4 in support of its action.
Reconsideration having been denied, petitioner sought to overturn the above
dismissal via the instant petition for review on certiorari under Rule 45.
The Issues
Petitioner argues that "under the new Rules on Criminal Procedure . . . the
filing fees, when moral, nominal, temperate or exemplary damages are claimed
in the criminal case, shall constitute a first lien in the judgment, and thus need
not be paid upon the filing of the information, (and therefore) the filing fees
herein was (sic) not assessed by the Clerk of Court, nor paid by herein
petitioner at the time of the filing of the information." Petitioner further insists
that "it is only when the amount of damages other than actual, has been
specified in the information that thefiling fees is (sic) required to be paid upon
the filing of the information, . . . and that since in (this) case the amount of
damages stated in the information partakes firstly of actual damages and is not
entirely other than actual, then this case does not fall under the last par. of sec.
1 Rule III" of the 1988 Rules on Criminal Procedure.
In their comment and subsequently in their memorandum, private respondents
counter that the present petition is erroneously filed. As the question Decision
is a final judgment, the appropriate remedy would have been ordinary appeal,
not appeal by certiorari. They also argue that "(t)he present petition is pre-
mature because the questioned decision is pending appeal with the Honorable
Court of Appeals. . . . (I)f the questioned decision to be reversed ahead by the
Court of Appeals . . . (there) would then be no more basis for the present
petition." the accused — herein private respondents — had gone to the Court
of Appeals seeking a reversal of the judgment of conviction.
The Court's Ruling
The petition is devoid of merit.
While petitioner may be correct in asserting that a direct petition may, under
appropriate circumstances, be taken to this Court from the final judgment of
the Regional Trial Court on pure questions of law in the form and manner
provided for in the Revised Rules of Court,5 nevertheless, in view of the factual
environment of this case, particularly that private respondents herein had
already taken an appeal to the Court of Appeals to question the trial court's
judgment of conviction, the proper remedy for petitioner is simply ordinary
appeal to the said tribunal.
This is so because the award of moral and exemplary damages by the trial
court is inextricably linked to and necessarily dependent upon the factual
finding of basis therefor, viz., the existence of the crime libel. Inasmuch as the
very same Decision herein assailed is already pending review by the Court of
Appeals, there is a distinct possibility that the said court may, if the facts and
the law warrant, reverse the trial court and acquit the accused. In such event,
the appellate court's action would lead to absurdity and confusion in the
ultimate disposition of the case. Obviously, this possibility must be avoided at
all cost. This is (at least partly) the raison d'etre for the rule against forum-
shopping.6 Clearly, then, petitioner ought to have brought her challenge in the
Court of Appeals.
In connection with the foregoing discussion, we note the petitioner's vehement
insistence that Art. 33 of the Civil Code allows an independent civil action for
damages in cases of defamation, fraud, and physical injuries to be instituted
separately and independently from the criminal. She then concludes that the
civil aspect of the case is not dependent on the criminal, but rather, may
proceed, independently thereof, and that therefore, the review of the civil
aspect by this Court may take place simultaneously with and separately from
the review of the criminal aspect by the Court of Appeals.
Such reasoning is misplaced. Sec. 1 of Rule 111 provides that the civil action
for recovery of civil liability is impliedly instituted with the criminal action unless
the offended party waives the civil action, reserves his right to institute it
separately, or institutes the civil action prior to the criminal action. In the
present case, the civil action had been actually (not just impliedly)
instituted with the criminal prosecution, as shown by the fact that petitioner
took an active part in the prosecution of the criminal case. As admitted in the
petition, "the private prosecutor, counsel for . . . the petitioner herein" was
allowed "upon prior authority under the supervision of the City Prosecutor, to
handle the prosecution, by presenting all the prosecution's evidence" and even
filing the Prosecution's Memorandum. Obviously then, there can no longer be
any independent civil action to speak of, as the civil aspect had previously
been included in the criminal. And the petitioner, by attempting to have
recourse to this Court with the criminal aspect still pending with the Court of
Appeals, was effectively trying to split a single cause of action. This we cannot
allow.
Petitioner also posits the non-necessity of paying the filing and docket fees by
reason of the non-specification of the amounts of moral and exemplary
damages being claimed by her, purportedly on the authority of this Court's
ruling in General vs. Claravall (supra). For the sake of clarity, we quote from
General.:
This Court's plain intent — to make the Manchester doctrine, requiring
payment of filing fees at the time of the commencement of an action
applicable to impliedly instituted civil actions under Section 1, Rule 111
only when "the amount of damages, other than actual, is alleged in the
complaint or information" — has thus been made manifest by the
language of the amendatory provisions (adopted by this Court with
effect on October 1, 1988).
In any event, the Court now makes that intent plainer, and in the
interests of clarity and certainty, categorically declares for the guidance
of all concerned that when a civil action is deemed impliedly instituted
with the criminal in accordance with Section 1, Rule 111 of the Rules of
Court — because the offended party has NOT waived the civil action,
or reserved the right to institute it separately, or instituted the civil
action prior to the criminal action — the rule is as follows:
1) when the "amount of damages, other than actual, is alleged in the
complaint or information" filed in court, then "the corresponding filing
fees shall be paid by the offended party upon the filing thereof in court
for trial;"
2) in any other case, however — i.e., when the amount of damages is
not so alleged in the complaint or information filed in court, the
corresponding filing fees need not be paid and shall simply "constitute
a first lien on the judgment, except in an award for actual damages."
We hold that said General ruling, especially the last subparagraph above-
quoted, was actually intended to apply to a situation wherein either (i) the
judgment awards a claim not specified in the pleading, or (ii) the complainant
expressly claims moral, exemplary, temperate and/or nominal damages but
has not specified ANY amount at all, leaving the quantification thereof entirely
to the trial court's discretion,7 and NOT to a situation where the litigant specifies
some amounts or parameters for the awards being sought, even though the
different types of damages sought be not separately or individually quantified.
Were we to hold otherwise, the result would be to permit litigants to continue
availing of one more loophole in the rule on payment of filing fees, and would
not serve to attain the purpose of the revised Sec. 1 of Rule 111, which is "to
discourage the "gimmick of libel complainants of using the fiscal's office to
include the criminal information their claim for astronomical damages in
multiple millions of pesos without paying any filing fees."8
WHEREFORE, for utter lack of merit, the instant petition is DISMISSED.
Republic of the Philippines
SUPREME COURT
SECOND DIVISION
G.R. No. 157783 September 23, 2005
NILO PALOMA, Petitioners,
vs.
DANILO MORA, HILARIO FESTEJO, MAXIMA SALVINO, BRYN
BONGBONG and VALENTINO SEVILLA,Respondent.
DECISION
CHICO-NAZARIO, J.:
In this petition for review on certiorari, petitioner NILO PALOMA is in quest of
the reversal of the Decision1 and the Resolution,2 dated 15 November 2002
and 01 April 2003, respectively, of the Court of Appeals in CA-G.R. SP No.
42553, affirming in toto the Orders dated 12 March 1996 and 28 June 1996 of
the Regional Trial Court (RTC), Branch 17, Palompon, Leyte, in Civil Case No.
PN-0016, dismissing his complaint for mandamus for being prematurely filed.
The undisputed facts, as summarized by the Court of Appeals and as
unraveled from the records, follow:
Petitioner Nilo Paloma was appointed General Manager of the Palompon,
Leyte Water District by its Board of Directors in 1993. His services were
subsequently terminated by virtue of Resolution No. 8-953 dated 29 December
1995, which was passed by respondents as Chairman and members of the
Board of the Palompon, Leyte Water District, namely: Danilo Mora, Hilario
Festejo, Bryn Bongbong and Maxima Salvino, respectively. The Board, in the
same Resolution, designated respondent Valentino Sevilla as Officer-in-
Charge.4
Pained by his termination, petitioner filed a petition for mandamus5 with prayer
for preliminary injunction with damages before the RTC on 11 January 1996 to
contest his dismissal with the prayer to be restored to the position of General
Manager.6
Petitioner obdurately argued in his petition that the passage of Resolution No.
8-95 resulting in his dismissal was a "capricious and arbitrary act on the part of
the Board of Directors, constituting a travesty of justice and a fatal denial of his
constitutional right to due process for the grounds relied upon therein to
terminate him were never made a subject of a complaint nor was he notified
and made to explain the acts he was said to be guilty of." "Fundamental is the
rule and also provided for in the Civil Service Rules and Regulations that no
officer or employee in the Civil Service shall be suspended, separated or
dismissed except for cause and after due process," so stressed petitioner.7
On 25 January 1996, respondents filed a Motion to Dismiss the petition for lack
of jurisdiction and want of cause of action.8
On 12 March 1996, the trial court issued the assailed order dismissing the
petition, with the fallo:
WHEREFORE, all foregoing considered, the complaint thus filed for
mandamus with a Prayer for a Writ for Preliminary Injunction with Damages is
hereby DISMISSED for being a premature cause of action. Without
pronouncement as to costs.9
Petitioner’s motion for reconsideration likewise failed to sway the trial court by
Order dated 28 June 1996.10
Meanwhile, petitioner filed a Complaint on 29 March 1996 with the Civil
Service Commission (CSC) against same respondents herein, for alleged
Violation of Civil Service Law and Rules and for Illegal Dismissal.11
On 06 November 1996, the CSC issued its decision12 exonerating respondents
from the charge of violating the Civil Service Law when they voted for the
termination of petitioner’s services as General Manager of the Palompon,
Leyte Water District. Thus, the CSC dismissed13 the complaint filed by
petitioner before it, to wit:
In view of the foregoing, the instant complaint of Mr. Nilo Paloma former
General Manager of Palompon Water District against Messrs. Danilo Mora,
Hilario Festejo, Bryn Bongbong and Ms. Maxima Salvino for Violation of Civil
Service Law and Rules and Illegal Dismissal is hereby DISMISSED, for lack of
prima facie case.14
In its Decision15 dated 15 November 2002, the Court of Appeals yielded to the
decision of the trial court and dismissed the appeal filed by petitioner, viz:
WHEREFORE, the instant petition is hereby DISMISSED for lack of merit.
Accordingly, the assailed Orders of the Regional Trial Court dated 12 March
1996 and 28 June 1996 in Civil Case No. PN-0016, are AFFIRMED in toto.16
Equally unavailing was petitioner’s motion for reconsideration, which was
denied by the Court of Appeals on 01 April 2003.
Affronted by the ruling, petitioner elevated the matter to us via the instant
petition, contending that:
the court of appeals gravely erred in affirming the decision of the regional trial
court of palompon, leyte, branch 17.17
The central inquiry raised in this petition is whether or not the Court of Appeals
committed any reversible error in its challenged decision. Concretely, we are
tasked to resolve: (1) whether or not mandamus will lie to compel the Board of
Directors of the Palompon, Leyte Water District to reinstate the General
Manager thereof, and (2) whether or not the CSC has primary jurisdiction over
the case for illegal dismissal of petitioner.
Petitioner, in his brief, is emphatic that the Court of Appeals overlooked the
fact that mandamus may lie to compel the performance of a discretionary duty
in case of non-observance of due process. He enthuses that the Court of
Appeals overlooked the fact that as an aggrieved party, he need not exhaust
administrative remedies and may resort to court action for relief as due
process was clearly violated.18
Espousing a contrary view, respondents posit that petitioner breached the rule
against forum shopping as he filed another complaint for illegal dismissal
against them with the CSC after obtaining an unfavorable ruling in his Petition
for Mandamus filed before the RTC.19 Not only is petitioner guilty of forum
shopping; he, too, is guilty of submitting a false certificate against forum
shopping as the certification he appended with the present petition omitted the
fact that he had previously filed a similar case with the CSC, so respondents
say.20 Respondents theorize, as well, that the instant case has already been
rendered moot by the dissolution of the Palompon, Leyte Water District and its
subsequent absorption by the municipal government of Palompon effective 1
June 1999.21 Finally, it is respondents’ resolute stance that it was fitting for the
Court of Appeals to affirm the trial court’s ruling dismissing the petition filed by
petitioner inasmuch as Section 23 of Presidential Decree (P.D.) No. 128
indeed clearly states that the General Manager shall serve at the pleasure of
the Board.22
We are not won over by petitioner’s avowals. The petition ought to be denied.
Section 3, Rule 65 of the Rules of Court provides-
Sec. 3. Petition for mandamus. – When any tribunal, corporation, board, officer
or person unlawfully neglects the performance of an act which the law
specifically enjoins as a duty resulting from an office, trust, or station, or
unlawfully excludes another from the use and enjoyment of a right or office to
which such other is entitled, and there is no other plain, speedy and adequate
remedy in the ordinary course of law, the person aggrieved thereby may file a
verified petition in the proper court, alleging the facts with certainty and praying
that judgment be rendered commanding the respondent, immediately or at
some other time to be specified by the court, to do the act required to be done
to protect the rights of the petitioner and to pay the damages sustained by the
petitioner by reason of the wrongful acts of the respondent.
Mandamus lies to compel the performance, when refused, of a ministerial duty,
but not to compel the performance of a discretionary duty.23 Mandamus will not
issue to control or review the exercise of discretion of a public officer where the
law imposes upon said public officer the right and duty to exercise his
judgment in reference to any matter in which he is required to act. It is his
judgment that is to be exercised and not that of the court.24
In the case at bar, P.D. No. 198,25 otherwise known as THE PROVINCIAL
WATER UTILITIES ACT OF 1973, which was promulgated on 25 May 1973,
categorically provides that the general manager shall serve at the pleasure of
the board of directors, viz:
Section 23. Additional Officers. - At the first meeting of the board, or as soon
thereafter as practicable, the board shall appoint, by a majority vote, a general
manager, an auditor, and an attorney, and shall define their duties and fix their
compensation. Said officers shall serve at the pleasure of the board.
Section 23 of P.D. No. 198 was later amended by P.D. No. 768 on 15 August
1975 to read:
SEC. 23. The General Manager. - At the first meeting of the board, or as soon
thereafter as practicable, the board shall appoint, by a majority vote, a general
manager and shall define his duties and fix his compensation. Said officer shall
serve at the pleasure of the board. (Emphasis supplied)
Mandamus does not lie to compel the Board of Directors of the Palompon,
Leyte Water District to reinstate petitioner because the Board has the
discretionary power to remove him under Section 23 of P.D. No. 198, as
amended by P.D. No. 768.
The case of Mita Pardo de Tavera v. Philippine Tuberculosis
Society, Inc.26 delineated the nature of an appointment held "at the pleasure of
the appointing power" in this wise:
An appointment held at the pleasure of the appointing power is in essence
temporary in nature. It is co-extensive with the desire of the Board of Directors.
Hence, when the Board opts to replace the incumbent, technically there is no
removal but only an expiration of term and in an expiration of term, there is no
need of prior notice, due hearing or sufficient grounds before the incumbent
can be separated from office. The protection afforded by Section 7.04 of the
Code of By-Laws on Removal Of Officers and Employees, therefore, cannot be
claimed by petitioner.27(Emphasis supplied)
In fine, the appointment of petitioner and his consequent termination are
clearly within the wide arena of discretion which the legislature has bestowed
the appointing power, which in this case is the Board of Directors of the
Palompon, Leyte Water District. Here, considering that the petitioner is at
loggerheads with the Board, the former’s services obviously ceased to be
"pleasurable" to the latter. The Board of Directors of a Water District may
abridge the term of the General Manager thereof the moment the latter’s
services cease to be convivial to the former. Put another way, he is at the
mercy of the appointing powers since his appointment can be terminated at
any time for any cause and following Orcullo there is no need of prior notice or
due hearing before the incumbent can be separated from office. Hence,
petitioner is treading on shaky grounds with his intransigent posture that he
was removed sans cause and due process.
Yes, as a general rule, no officer or employee of the civil service shall be
removed or suspended except for cause provided by law as provided in
Section 2(3), Article IX-B of the 1987 Constitution. As exception to this, P.D.
No. 198, which we held in Feliciano v. Commission On Audit 28 to be the
special enabling charter of Local Water Districts, categorically provides that the
General Manager shall serve "at the pleasure of the board."
Correlatively, the nature of appointment of General Managers of Water
Districts under Section 23 of P.D. No. 198 falls under Section 14 of the
Omnibus Rules Implementing Book V of Executive Order No. 292, otherwise
known as the Administrative Code of 1987, which provides:
Sec. 14. An appointment may also be co-terminous which shall be issued to a
person whose entrance and continuity in the service is based on the trust and
confidence of the appointing authority or that which is subject to his pleasure,
or co-existent with his tenure, or limited by the duration of project or subject to
the availability of funds.
The co-terminous status may thus be classified as follows:
(1) Co-terminous with the project - when the appointment is co-existent with
the duration of a particular project for which purpose employment was made or
subject to the availability of funds for the same;
(2) Co-terminous with the appointing authority - when appointment is co-
existent with the tenure of the appointing authority or at his pleasure;
(3) Co-terminous with the incumbent - when the appointment is co-existent
with the appointee, in that after the resignation, separation or termination of the
services of the incumbent the position shall be deemed automatically
abolished; and
(4) Co-terminous with a specific period - appointment is for a specific period
and upon expiration thereof, the position is deemed abolished; . . .
(Underscoring supplied.)
The Court has previously sustained the validity of dismissal of civil servants
who serve at the pleasure of the appointing power and whose appointments
are covered by Section 14 of the Omnibus Rules Implementing Book V of
Executive Order No. 292 as cited above. Thus, in Orcullo, Jr. v. Civil Service
Commission,29 petitioner was hired as Project Manager IV by the Coordinating
Council of the Philippine Assistance Program-BOT Center. In upholding the
termination of his employment prior to the expiration of his contract, we held
that petitioner serves at the pleasure of the appointing authority. This Court
ruled in Orcullo –
A perusal of petitioner’s employment contract will reveal that his employment
with CCPAP is qualified by the phrase "unless terminated sooner." Thus, while
such employment is co-terminous with the PAPS project, petitioner
nevertheless serves at the pleasure of the appointing authority as this is
clearly stipulated in his employment contract. We agree with the appellate
court’s interpretation of the phrase "unless terminated sooner" to mean "that
his contractual job as Project Manager IV from March 11, 1996 to January 30,
2000 could end anytime before January 30, 2000 if terminated by the other
contracting party-employer CCPAP. (Emphasis supplied)
Neither is it the Court’s business to intrude into the Congressional sphere on
the matter of the wisdom of Section 23 of P.D. No. 198. One of the firmly
entrenched principles in constitutional law is that the courts do not involve
themselves with nor delve into the policy or wisdom of a statute. That is the
exclusive concern of the legislative branch of the government. When the
validity of a statute is challenged on constitutional grounds, the sole function of
the court is to determine whether it transcends constitutional limitations or the
limits of legislative power. No such transgression has been shown in this
case.30
Moreover, laws change depending on the evolving needs of society. In a
related development, President Gloria Macapagal-Arroyo inked into law
Republic Act No. 9286, which amended Section 23 of P.D. No. 198 providing
that thereafter, the General Manager of Water Districts shall not be removed
from office, except for cause and after due process. Rep. Act No. 9286 reads:
Republic Act No. 9286
AN ACT FURTHER AMENDING PRESIDENTIAL DECREE NO. 198,
OTHERWISE KNOWN AS "THE PROVINCIAL WATER UTILITIES ACT OF
1973", AS AMENDED
Approved: April 2, 2004
...
Sec. 2. Section 23 of Presidential Decree No. 198, as amended, is hereby
amended to read as follows:
Sec. 23. The General Manager. – At the first meeting of the Board, or as soon
thereafter as practicable, the Board shall appoint, by a majority vote, a general
manager and shall define his duties and fix his compensation. Said officer shall
not be removed from office, except for cause and after due process.
(Emphasis supplied.)
...
Sec. 5. Effectivity Clause. – This Act shall take effect upon its approval.31
Unfortunately for petitioner, Rep. Act No. 9286 is silent as to the retroactivity of
the law to pending cases and must, therefore, be taken to be of prospective
application. The general rule is that in an amendatory act, every case of doubt
must be resolved against its retroactive effect.32 Since the retroactive
application of a law usually divests rights that have already become
vested,33 the rule in statutory construction is that all statutes are to be
construed as having only a prospective operation unless the purpose and
intention of the legislature to give them a retrospective effect
is expressly declared or is necessarily implied from the language used.34
First, there is nothing in Rep. Act No. 9286 which provides that it should
retroact to the date of effectivity of P.D. No. 198, the original law. Next, neither
is it necessarily implied from Rep. Act No. 9286 that it or any of its provisions
should apply retroactively. Third, Rep. Act No. 9286 is a substantive
amendment of P.D. No. 198 inasmuch as it has changed the grounds for
termination of the General Manager of Water Districts who, under the then
Section 23 of P.D. No. 198, "shall serve at the pleasure of the Board." Under
the new law, however, said General Manager shall not be removed from office,
except for cause and after due process. To apply Rep. Act No. 9286
retroactively to pending cases, such as the case at bar, will rob the
respondents as members of the Board of the Palompon, Leyte Water District of
the right vested to them by P.D. No. 198 to terminate petitioner at their
pleasure or discretion. Stated otherwise, the new law can not be applied to
make respondents accountable for actions which were valid under the law
prevailing at the time the questioned act was committed.
Prescinding from the foregoing premises, at the time petitioner was terminated
by the Board of Directors, the prevailing law was Section 23 of P.D. No. 198
prior to its amendment by Rep. Act No. 9286.
Petitioner, next, heaves censure on the Court of Appeals for subscribing to the
trial court’s view that the petition for mandamus was prematurely filed. We
recall in Tanjay Water District v. Gabaton35 that water districts are government
instrumentalities and that their employees belong to the civil service. Thus,
"[t]he hiring and firing of employees of government-owned or controlled
corporations are governed by the Civil Service Law and Civil Service Rules 2003, respectively, of the Court of Appeals in CA-G.R. SP No. 42553, are
and Regulations." Tanjay was clear-cut on this matter: hereby AFFIRMED. Costs against petitioner.

. . . Inasmuch as PD No. 198, as amended, is the original charter of the SO ORDERED.

petitioner, Tanjay Water District, and respondent Tarlac Water District and all
water districts in the country, they come under the coverage of the civil service
law, rules and regulations. (Emphasis supplied)

Underlying the rulings of the trial and appellate courts in the case at bar is the
doctrine of primary jurisdiction; i.e.,courts cannot and will not resolve a
controversy involving a question which is within the jurisdiction of an
administrative tribunal, especially where the question demands the exercise of
sound administrative discretion requiring the special knowledge, experience
and services of the administrative tribunal to determine technical and intricate
matters of fact.36 In Villaflor v. Court of Appeals,37 we revisited the import of the
doctrine of primary jurisdiction, to wit:

In recent years, it has been the jurisprudential trend to apply this doctrine to
cases involving matters that demand the special competence of administrative
agencies even if the question involved is also judicial in character. . .

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. In Machete vs. Court of Appeals, the Court upheld the primary
jurisdiction of the Department of Agrarian Reform Adjudicatory Board (DARAB)
in an agrarian dispute over the payment of back rentals under a leasehold
contract. In Concerned Officials of the Metropolitan Waterworks and Sewerage
System vs. Vasquez [240 SCRA 502], the Court recognized that the MWSS
was in the best position to evaluate and to decide which bid for a waterworks
project was compatible with its development plan. (Emphasis supplied)

In a surfeit of cases, this Court has held that quasi-judicial bodies like the CSC
are better-equipped in handling cases involving the employment status of
employees as those in the Civil Service since it is within the field of their
expertise.38 This is consistent with the powers and functions of the CSC, being
the central personnel agency of the Government, to carry into effect the
provisions of the Civil Service Law and other pertinent laws,39 including, in this
case, P.D. No. 198.

WHEREFORE, the present petition is hereby DENIED. Accordingly, the

Decision and the Resolution dated 15 November 2002 and 01 April
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 95694 October 9, 1997
VICENTE VILLAFLOR, substituted by his heirs, petitioner,
vs.
COURT OF APPEALS and NASIPIT LUMBER CO., INC., respondents.
PANGANIBAN, J.:
In this rather factually complicated case, the Court reiterates the binding force
and effect of findings of specialized administrative agencies as well as those of
trial courts when affirmed by the Court of Appeals; rejects petitioner's theory of
simulation of contracts; and passes upon the qualifications of private
respondent corporation to acquire disposable public agricultural lands prior to
the effectivity of the 1973 Constitution.
The Case
Before us is a petition for review on certiorari seeking the reversal of the
Decision1 of the Court of Appeals, dated September 27, 1990, in CA. G.R CV
No. 09062, affirming the dismissal by the trial court of Petitioner Vicente
Villaflor's complaint against Private Respondent Nasipit Lumber Co., Inc. The
disposition of both the trial and the appellate courts are quoted in the
statement of facts below.
The Facts
The facts of this case, as narrated in detail by Respondent Court of Appeals,
are as follows:2
The evidence, testimonial and documentary, presented during the trial
show that on January 16, 1940, Cirilo Piencenaves, in a Deed of
Absolute Sale (exh. A), sold to [petitioner], a parcel of agricultural land
containing an area of 50 hectares,3 more or less, and particularly
described and bounded as follows:
A certain parcel of agricultural land planted to abaca
with visible concrete monuments marking the
boundaries and bounded on the NORTH by Public
Land now Private Deeds on the East by Serafin
Villaflor, on the SOUTH by Public Land; and on the
West by land claimed by H. Patete, containing an area
of 60 hectares more or less, now under Tax Dec. 29451
in the (sic) of said Vicente Villaflor, the whole parcel of
which this particular parcel is only a part, is assessed at
P22,550.00 under the above said Tax Dec. Number.
This deed states:
That the above described land was sold to the said
VICENTE VILLAFLOR, . . . on June 22, 1937, but no
formal document was then executed, and since then
until the present time, the said Vicente Villaflor has
been in possession and occupation of (the same); (and)
That the above described property was before the sale,
of my exclusive property having inherited from my long
dead parents and my ownership to it and that of my
[sic] lasted for more than fifty (50) years, possessing
and occupying same peacefully, publicly and
continuously without interruption for that length of time.
Also on January 16, 1940, Claudio Otero, in a Deed of Absolute Sale
(exh. C) sold to Villaflor a parcel of agricultural land, containing an area
of 24 hectares, more or less, and particularly described and bounded
as follows:
A certain land planted to corn with visible concrete
measurements marking the boundaries and bounded
on the North by Public Land and Tungao Creek; on the
East by Agusan River; on the South by Serafin Villaflor
and Cirilo Piencenaves; and on the West by land of
Fermin Bacobo containing an area of 24 hectares more
or less, under Tax Declaration No. 29451 in the name
 already of Vicente Villaflor, the whole parcel of which
this particular land is only a part, is assessed at
P22,550.00 under the above said Tax Declaration No.
29451.
This deed states:
That the above described land was sold to the said
VICENTE VILLAFLOR, . . . on June 22, 1937, but no
sound document was then executed, however since
then and until the present time, the said Vicente Villaflor
has been in open and continuous possession and
occupation of said land; (and)
That the above described land was before the sale, my
own exclusive property, being inherited from my
deceased parents, and my ownership to it and that of
my predecessors lasted more than fifty (50) years,
possessing and occupying the same, peacefully, openly
and interruption for that length of time.
Likewise on January 16, 1940, Hermogenes Patete, in a Deed of
Absolute Sale (exh. D), sold to Villaflor, a parcel of agricultural land,
containing an area of 20 hectares, more or less, and particularly
described and bounded as follows:
A certain parcel of agricultural land planted to abaca
and corn with visible concrete monuments marking the
boundaries and bounded on the North by Public Land
area-private Road; on the East by land claimed by
Cirilo Piencenaves; on the South by Public Land
containing an area of 20 hectares more or less, now
under Tax Declaration No. 29451 in the name of
Vicente Villaflor the whole parcel of which this particular
parcel, is assessed at P22,550.00 for purposes of
taxation under the above said Tax Declaration No.
29451.
This deed states:
. . . (O)n June 22, 1937 but the formal document was
then executed, and since then until the present time,
the said VICENTE VILLAFLOR has been in continuous
and open possession and occupation of the same;
(and)
That the above described property was before the sale,
my own and exclusive property, being inherited from
my deceased parents and my ownership to it and that
of my predecessors lasted more than fifty (50) years,
possessing and occupying same, peacefully, openly
and continuously without interruption for that length of
time.
On February 15, 1940, Fermin Bocobo, in a Deed of Absolute Sale
(exh. B), sold to Villaflor, a parcel of agricultural land, containing an
area of 18 hectares, more or less, and particularly described and
bounded as follows:
A certain parcel of agricultural land planted with abaca
with visible part marking the corners and bounded on
the North by the corners and bounded on the North by
Public Land; on the East by Cirilo Piencenaves; on the
South by Hermogenes Patete and West by Public
Land, containing an area of 18 hectares more or less
now under Tax Declaration No. 29451 in the name of
Vicente Villaflor. The whole parcel of which this
particular parcel is only a part is assessed as
P22,550.00 for purposes of taxation under the above
said Tax Declaration Number (Deed of Absolute Sale
executed by Fermin Bocobo date Feb. 15, 1940). This
document was annotated in Registry of Deeds on
February 16, 1940).
This deed states:
That the above described property was before the sale
of my own exclusive property, being inherited from my
deceased parents, and my ownership to it and that of
my predecessors lasted more than fifty (50) years,
possessing and occupying the same peacefully, openly
and continuously without interruption for that length of
time.
On November 8, 1946, Villaflor, in a Lease Agreement (exh.
Q),4 leased to Nasipit Lumber Co., Inc. a parcel of land, containing an
area of two (2) hectares, together with all the improvements existing
thereon, for a period of five (5) years from June 1, 1946 at a rental of
P200.00 per annum "to cover the annual rental of house and building
sites for thirty three (33) houses or buildings." This agreement also
provides:5
3. During the term of this lease, the Lessee is
authorized and empowered to build and construct
additional houses in addition to the 33 houses or
buildings mentioned in the next preceding paragraph,
provided however, that for every additional house or
building constructed the Lessee shall pay unto the
Lessor an amount of fifty centavos (¢50) per month for
every house or building. The Lessee is empowered and
authorized by the Lessor to sublot (sic) the premises
hereby leased or assign the same or any portion of the
land hereby leased to any person, firm and corporation;
(and)
4. The Lessee is hereby authorized to make any
construction and/or improvement on the premises
hereby leased as he may deem necessary and proper
thereon, provided however, that any and all such
improvements shall become the property of the Lessor
upon the termination of this lease without obligation on
the part of the latter to reimburse the Lessee for
expenses incurred in the construction of the same.
Villaflor claimed having discovered that after the execution of the lease
agreement, that Nasipit Lumber "in bad faith . . . surreptitiously
grabbed and occupied a big portion of plaintiff's property . . ."; that after
a confrontation with the corporate's (sic) field manager, the latter, in a
letter dated December 3, 1973 (exh. R),6stated recalling having "made
some sort of agreement for the occupancy (of the property at Acacia,
San Mateo), but I no longer recall the details and I had forgotten
whether or not we did occupy your land. But if, as you say, we did
occupy it, then (he is ) sure that the company is obligated to pay the
rental."
On July 7, 1948, in an "Agreement to Sell" (exh. 2), Villaflor conveyed
to Nasipit Lumber, two (2) parcels of land . . . described as follows:7
PARCEL ONE
Bounded on the North by Public Land and Tungao
Creek; on the East by Agusan River and Serafin
Villaflor; on the South by Public Land, on the West by
Public Land. Improvements thereon consist of abaca,
fruit trees, coconuts and thirty houses of mixed
materials belonging to the Nasipit Lumber Company.
Divided into Lot Nos. 5412, 5413, 5488, 5490, 5491,
5492, 5850, 5849, 5860, 5855, 5851, 5854, 5855,
5859, 5858, 5857, 5853, and 5852. Boundaries of this
parcel of land are marked by concrete monuments of
the Bureau of Lands. Containing an area of 112,000
hectares. Assessed at P17,160.00 according to Tax
Declaration No. V-315 dated April 14, 1946.
PARCEL TWO
Bounded on the North by Pagudasan Creek; on the
East by Agusan River; on the South by Tungao Creek;
on the West by Public Land. Containing an area of
48,000 hectares more or less. Divided into Lot Nos.
5411, 5410, 5409, and 5399. Improvements 100
coconut trees, productive, and 300 cacao trees.
Boundaries of said land are marked by concrete
monuments of the Bureau pf (sic) Lands. Assessed
value — P6,290.00 according to Tax No. 317, April 14,
1946.
This Agreement to Sell provides:
3. That beginning today, the Party of the Second Part
shall continue to occupy the property not anymore in
concept of lessee but as prospective owners, it being
the sense of the parties hereto that the Party of the
Second Part shall not in any manner be under any
obligation to make any compensation to the Party of the
First Part, for the use, and occupation of the property
herein before described in such concept of prospective
owner, and it likewise being the sense of the parties
hereto to terminate as they do hereby terminate,
effective on the date of this present instrument, the
Contract of Lease, otherwise known as Doc. No. 420,
Page No. 36, Book No. II, Series of 1946 of Notary
Public Gabriel R. Banaag, of the Province of Agusan.
4. That the Party of the Second Part has bound as it
does hereby bind itself, its executors and
administrators, to pay unto the party of the First Part
the sum of Five Thousand Pesos (P5,000.00),
Philippine Currency, upon presentation by the latter to
the former of satisfactory evidence that:
(a) The Bureau of Lands will not have
any objection to the obtainment by the
Party of the First Part of a Certificate of
Torrens Title in his favor, either thru
ordinary land registration proceedings
or thru administrative means procedure.
(b) That there is no other private
claimant to the properties hereinbefore
described.
5. That the Party of the First Part has bound as he does
hereby bind to undertake immediately after the
execution of these presents to secure and obtain, or
cause to be secured and obtained, a Certificate of
Torrens Title in his favor over the properties described
on Page (One) hereof, and after obtainment of such
Certificate of Torrens Title, the said Party of the First
Part shall execute a (D)eed of Absolute Sale unto and
in favor of the Party of the Second Part, its executors,
administrators and assigns, it being the sense of the
parties that the Party of the Second Part upon delivery
to it of such deed of absolute sale, shall pay unto the
Party of the First Part in cash, the sum of Twelve
Thousand (P12,000.00) Pesos in Philippine Currency,
provided, however, that the Party of the First Part, shall
be reimbursed by the Party of the Second Part with one
half of the expenses incurred by the Party of the First
Part for survey and attorney's fees; and other incidental
expenses not exceeding P300.00.
On December 2, 1948, Villaflor filed Sales Application No.
V-8078 (exh. 1) with the Bureau of Lands, Manila, "to purchase under
the provisions of Chapter V, XI or IX of Commonwealth Act. No. 141
(The Public Lands Act), as amended, the tract of public lands . . . and
described as follows: "North by Public Land; East by Agusan River and
Serafin Villaflor; South by Public Land and West by public land (Lot
Nos. 5379, 5489, 5412, 5490, 5491, 5492, 5849, 5850, 5851, 5413,
5488, 5489, 5852, 5853, 5854, 5855, 5856, 5857, 5858, 5859 and
5860 . . . containing an area of 140 hectares . . . ." Paragraph 6 of the
Application, states: "I understand that this application conveys no right
to occupy the land prior to its approval, and I recognized (sic) that the
land covered by the same is of public domain and any and all rights
may have with respect thereto by virtue of continuous occupation and
cultivation are hereby relinquished to the Government."9 (exh. 1-D)
On December 7, 1948, Villaflor and Nasipit Lumber executed an
"Agreement" (exh 3).10 This contract provides:
1. That the First Party is the possessor since 1930 of
two (2) parcels of land situated in sitio Tungao, Barrio
of San Mateo, Municipality of Butuan, Province of
Agusan;
2. That the first parcel of land abovementioned and
described in Plan PLS-97 filed in the office of the
Bureau of Lands is made up of Lots Nos. 5412, 5413,
5488, 5490, 5491, 5492, 5849, 5850, 5851, 5852,
5853, 5854, 5855, 5856, 5857, 5858, 5859 and 5860
and the second parcel of land is made of Lots Nos.
5399, 5409, 5410 and 5411;
3. That on July 7, 1948, a contract of Agreement to Sell
was executed between the contracting parties herein,
covering the said two parcels of land, copy of said
Agreement to Sell is hereto attached marked as Annex
"A" and made an integral part of this document. The
parties hereto agree that the said Agreement to Sell be
maintained in full force and effect with all its terms and
conditions of this present agreement and in no way be
considered as modified.
4. That paragraph 4 of the Contract of Agreement to
Sell, marked as annex, "A" stipulates as follows:
Par. 4. That the Party of the Second
Part has bound as it does hereby bind
itself, its executors and administrators,
to pay unto the Party of the First Part of
the sum of FIVE THOUSAND PESOS
(P5,000.00) Philippine Currency, upon
presentation by the latter to the former
of satisfactory evidence that:
a) The Bureau of Lands will have any
objection to the obtainment by Party of
the First Part of a favor, either thru
ordinary land registration proceedings
or thru administrative means and
procedure.
b) That there is no other private
claimant to the properties hereinabove
described.
5. That the First Party has on December 2, 1948,
submitted to the Bureau of Lands, a Sales Application
for the twenty-two (22) lots comprising the two
abovementioned parcels of land, the said Sales
Application was registered in the said Bureau under No.
V-807;
6. That in reply to the request made by the First Party
to the Bureau of Lands, in connection with the Sales
Application No. V-807, the latter informed the former
that action on his request will be expedited, as per letter
of the Chief, Public Land Division, dated December 2,
1948, copy of which is hereto attached marked as
annex "B" and made an integral part of this agreement:
7. That for and in consideration of the premises above
stated and the amount of TWENTY FOUR THOUSAND
(P24,000.00) PESOS that the Second Party shall pay
to the First Party, by these presents, the First Party
hereby sells, transfers and conveys unto the Second
Party, its successors and assigns, his right, interest and
participation under, an(d) by virtue of the Sales
Application No. V-807, which he has or may have in the
lots mentioned in said Sales Application No. V-807;
8. That the amount of TWENTY FOUR THOUSAND
(P24,000.00) PESOS, shall be paid by the Second
Party to the First Party, as follows:
a) The amount of SEVEN THOUSAND
(P7,000.00) PESOS, has already been
paid by the Second Party to the First
Party upon the execution of the
Agreement to Sell, on July 7, 1948;
b) The amount of FIVE THOUSAND
(P5,000.00) PESOS shall be paid upon
the signing of this present agreement;
and
c) The balance of TWELVE
THOUSAND (P12,000.00) shall be paid
upon the execution by the First Party of
the Absolute Deed of Sale of the two
parcels of land in question in favor of
the Second Party, and upon delivery to
the Second Party of the Certificate of
Ownership of the said two parcels of
land.
9. It is specially understood that the mortgage
constituted by the First Party in favor of the Second
Party, as stated in the said contract of Agreement to
Sell dated July 7, 1948, shall cover not only the amount
of SEVEN THOUSAND (P7,000.00) PESOS as
specified in said document, but shall also cover the
amount of FIVE THOUSAND (P5,000.00) PESOS to be
 paid as stipulated in paragraph 8, sub-paragraph (b) of
this present agreement, if the First Party should fail to
comply with the obligations as provided for in
paragraphs 2, 4, and 5 of the Agreement to Sell;
10. It is further agreed that the First Party obligates
himself to sign, execute and deliver to and in favor of
the Second Party, its successors and assigns, at
anytime upon demand by the Second Party such other
instruments as may be necessary in order to give full
effect to this present agreement;
In the Report dated December 31, 1949 by the public land inspector,
District Land Office, Bureau of Lands, in Butuan, the report contains an
Indorsement of the aforesaid District Land Officer recommending
rejection of the Sales Application of Villaflor for having leased the
property to another even before he had acquired transmissible rights
thereto.
In a letter of Villaflor dated January 23, 1950, addressed to the Bureau
of Lands, he informed the Bureau Director that he was already
occupying the property when the Bureau's Agusan River Valley
Subdivision Project was inaugurated, that the property was formerly
claimed as private properties (sic), and that therefore, the property was
segregated or excluded from disposition because of the claim of
private ownership. In a letter of Nasipit Lumber dated February 22,
1950 (exh. X)11 addressed to the Director of Lands, the corporation
informed the Bureau that it recognized Villaflor as the real owner,
claimant and occupant of the land; that since June 1946, Villaflor
leased two (2) hectares inside the land to the company; that it has no
other interest on the land; and that the Sales Application of Villaflor
should be given favorable consideration.
xxx xxx xxx
On July 24, 1950, the scheduled date of auction of the property
covered by the Sales Application, Nasipit Lumber offered the highest
bid of P41.00 per hectare, but since an applicant under CA 141, is
allowed to equal the bid of the highest bidder, Villaflor tendered an
equal bid; deposited the equivalent of 10% of the bid price and then
paid the assessment in full.
xxx xxx xxx
On August 16, 1950, Villaflor executed a document, denominated as a
"Deed of Relinquishment of Rights" (exh. N),12 pertinent portion of
which reads:
5. That in view of my present business in Manila, and
my change in residence from Butuan, Agusan to the
City of Manila, I cannot, therefore, develope (sic) or
cultivate the land applied for as projected before;
6. That the Nasipit Lumber Company, Inc., a
corporation duly organized . . . is very much interested
in acquiring the land covered by the aforecited
application . . . ;
7. That I believe the said company is qualified to
acquire public land, and has the means to develop (sic)
the above-mentioned land;
xxx xxx xxx
WHEREFORE, and in consideration of the amount of
FIVE THOUSAND PESOS (P5,000.00) to be
reimbursed to me by the aforementioned Nasipit
Lumber Company, Inc., after its receipt of the order of
award, the said amount representing part of the
purchase price of the land aforesaid, the value of the
improvements I introduced thereon, and the expenses
incurred in the publication of the Notice of Sale, I, the
applicant, Vicente J. Villaflor, hereby voluntarily
renounce and relinquish whatever rights to, and
interests I have in the land covered by my above-
mentioned application in favor of the Nasipit Lumber
Company, Inc.
Also on August 16, 1950, Nasipit Lumber filed a Sales Application over
the two (2) parcels of land, covering an area of 140 hectares, more or
less. This application was also numbered V-807 (exh. Y).
On August 17, 1950 the Director of Lands issued an "Order of
Award"13 in favor of Nasipit Lumber Company, Inc., pertinent portion of
which reads:
4. That at the auction sale of the land held on July 24,
1950 the highest bid received was that of Nasipit
Lumber Company, Inc. which offered P41.00 per
hectare or P5,740.00 for the whole tract, which bid was
equaled by applicant Vicente J. Villaflor, who deposited
the amount of P574.00 under Official Receipt No. B-
1373826 dated July 24, 1950 which is equivalent to
10% of the bid. Subsequently, the said . . . Villaflor paid
the amount of P5,160.00 in full payment of the
purchase price of the above-mentioned land and for
some reasons stated in an instrument of relinquishment
dated August 16, 1950, he (Vicente J. Villaflor)
relinquished his rights to and interest in the said land in
favor of the Nasipit Lumber Company, Inc. who filed the
corresponding application therefore.
In view of the foregoing, and it appearing that the
proceedings had . . . were in accordance with law and
in [sic] existing regulations, the land covered thereby is
hereby awarded to Nasipit Lumber Company, Inc. at
P41.00 per hectare or P5,740.00 for the whole tract.
This application should be entered in the record of this
Office as Sales Entry No. V-407.
It is Villaflor's claim that he only learned of the Order of Award on
January 16, 1974, or after his arrival to the Philippines, coming from
Indonesia, where he stayed for more than ten (10) years; that he went
to Butuan City in the latter part of 1973 upon the call of his brother
Serafin Villaflor, who was then sick and learned that Nasipit Lumber
(had) failed and refused to pay the agreed rentals, although his brother
was able to collect during the early years; and that Serafin died three
days after his (Vicente's) arrival, and so no accounting of the rentals
could be made; that on November 27, 1973, Villaflor wrote a letter to
Mr. G.E.C. Mears of Nasipit Lumber, reminding him of their verbal
agreement in 1955 . . . that Mr. Mears in a Reply dated December 3,
1973, appears to have referred the matter to Mr. Noriega, the
corporate general manager, but the new set of corporate officers
refused to recognize (Villaflor's) claim, for Mr. Florencio Tamesis, the
general manager of Nasipit Lumber, in a letter dated February 19,
1974, denied Villaflor's itemized claim dated January 5, 1974 (exh. V)
to be without valid and legal basis. In the 5th January, 1974 letter,
Villaflor claimed the total amount of P427,000.00 . . . .
In a formal protest dated January 31, 197414 which Villaflor filed with
the Bureau of Lands, he protested the Sales Application of Nasipit
Lumber, claiming that the company has not paid him P5,000.00 as
provided in the Deed of Relinquishment of Rights dated August 16,
1950.
xxx xxx xxx
. . . (T)hat in a Decision dated August 8, 1977 (exh. 8), the Director of
Lands found that the payment of the amount of P5,000.00 in the Deed .
. . and the consideration in the Agreement to Sell were duly proven,
and ordered the dismissal of Villaflor's protest and gave due course to
the Sales Application of Nasipit Lumber. Pertinent portion of the
Decision penned by Director of Lands, Ramon Casanova, in the Matter
of SP No. V-807 (C-V-407) . . . reads:
xxx xxx xxx
During the proceedings, Villaflor presented another
claim entirely different from his previous claim — this
time, for recovery of rentals in arrears arising from a
supposed contract of lease by Villaflor as lessor in favor
of Nasipit as lessee, and indemnity for damages
supposedly caused improvements on his other property
. . . in the staggering amount of Seventeen Million
(P17,000,000.00) Pesos. Earlier, he had also
demanded from NASIPIT . . . (P427,000.00) . . . also as
indemnity for damages to improvements supposedly
caused by NASIPIT on his other real property as well
as for reimbursement of realty taxes allegedly paid by
him thereon.
xxx xxx xxx
It would seem that . . . Villaflor has sought to inject so
many collaterals, if not extraneous claims, into this
case. It is the considered opinion of this Office that any
claim not within the sphere or scope of its adjudicatory
authority as an administrative as well as quasi-judicial
body or any issue which seeks to delve into the merits
of incidents clearly outside of the administrative
competence of this Office to decide may not be
entertained.
There is no merit in the contention of Villaflor that owing
to Nasipit's failure to pay the amount of . . . (P5,000.00)
. . . (assuming that Nasipit had failed) the deed of
relinquishment became null and void for lack of
consideration. . . . .
xxx xxx xxx
. . . The records clearly show, however, that since the
execution of the deed of relinquishment . . . Villaflor has
always considered and recognized NASIPIT as having
the juridical personality to acquire public lands for
agricultural purposes. . . . .
xxx xxx xxx
Even this Office had not failed to recognize the juridical
personality of NASIPIT to apply for the purchase of
public lands . . . when it awarded to it the land so
relinquished by Villaflor (Order of Award dated August
17, 1950) and accepted its application therefor. At any
rate, the question whether an applicant is qualified to
apply for the acquisition of public lands is a matter
between the applicant and this Office to decide and
which a third party like Villaflor has no personality to
question beyond merely calling the attention of this
Office thereto.
xxx xxx xxx
Villaflor offered no evidence to support his claim of non-
payment beyond his own self-serving assertions and
expressions that he had not been paid said amount. As
protestant in this case, he has the affirmative of the
issue. He is obliged to prove his allegations, otherwise
his action will fail. For, it is a well settled principle (')
that if plaintiff upon whom rests the burden of proving
his cause of action fails to show in a satisfactory
manner the facts upon which he bases his claim, the
defendant is under no obligation to prove his
exceptions or special defenses (Belen vs. Belen, 13
Phil. 202; Mendoza vs. Fulgencio, 8 Phil. 243).
xxx xxx xxx
Consequently, Villaflor's claim that he had not been
paid must perforce fail.
On the other hand, there are strong and compelling
reasons to presume that Villaflor had already been paid
the amount of Five Thousand (P5,000.00) Pesos.
First, . . . What is surprising, however, is not so much
his claims consisting of gigantic amounts as his having
forgotten to adduce evidence to prove his claim of non-
payment of the Five Thousand (P5,000.00) Pesos
during the investigation proceedings when he had all
the time and opportunity to do so. . . . The fact that he
did not adduce or even attempt to adduce evidence in
support thereof shows either that he had no evidence to
offer . . . that NASIPIT had already paid him in fact.
What is worse is that Villaflor did not even bother to
command payment, orally or in writing, of the Five
Thousand (P5,000.00) Pesos which was supposed to
be due him since August 17, 1950, the date when the
order of award was issued to Nasipit, and when his
cause of action to recover payment had accrued. The
fact that he only made a command (sic) for payment on
January 31, 1974, when he filed his protest or twenty-
four (24) years later is immediately nugatory of his
claim for non-payment.
But Villaflor maintains that he had no knowledge or
notice that the order of award had already been issued
to NASIPIT as he had gone to Indonesia and he had
been absent from the Philippines during all those
twenty-four (24) years. This of course taxes credulity. . .
..
Second, it should be understood that the condition that
NASIPIT should reimburse Villaflor the amount of Five
Thousand (P5,000.00) Pesos upon its receipt of the
order of award was fulfilled as said award was issued to
NASIPIT on August 17, 1950. The said deed of
relinquishment was prepared and notarized in Manila
with Villaflor and NASIPIT signing the instrument also in
Manilaon August 16, 1950 (p. 77, (sic)). The following
day or barely a day after that, or on August 17, 1950,
the order of award was issued by this Office to
NASIPIT also in Manila. Now, considering that Villaflor
is presumed to be more assiduous in following up with
the Bureau of Lands the expeditious issuance of the
order of award as the payment of the Five Thousand
(P5,000.00) Pesos (consideration) would depend on
the issuance of said order to award NASIPIT, would it
not be reasonable to believe that Villaflor was at hand
when the award was issued to NASIPIT an August 17,
1950, or barely a day which (sic) he executed the deed
of relinquishment on August 16, 1950, in Manila? . . . .
Third, on the other hand, NASIPIT has in his
possession a sort of "order" upon itself — (the deed of
relinquishment wherein he (sic) obligated itself to
reimburse or pay Villaflor the . . . consideration of the
relinquishment upon its receipt of the order of award)
for the payment of the aforesaid amount the moment
the order of award is issued to it. It is reasonable to
presume that NASIPIT has paid the Five Thousand
(P5,000.00) Pesos to Villaflor.
A person in possession of an order on
himself for the payment of money, or
the delivery of anything, has paid the
money or delivered the thing
accordingly. (Section 5(k) B-131
Revised Rules of Court.
It should be noted that NASIPIT did not produce direct
evidence as proof of its payment of the Five Thousand
(P5,000.00) Pesos to Villaflor. Nasipit's explanation on
this point is found satisfactory.
. . . (I)t was virtually impossible for
NASIPIT, after the lapse of the
intervening 24 years, to be able to cope
up with all the records necessary to
show that the consideration for the deed
of relinquishment had been fully paid.
To expect NASIPIT to keep intact all
records pertinent to the transaction for
the whole quarter of a century would be
to require what even the law does not.
Indeed, even the applicable law itself
(Sec. 337, National Internal Revenue
Code) requires that all records of
corporations be preserved for only a
maximum of five years.
NASIPIT may well have added that at any rate while
"there are transactions where the proper evidence is
impossible or extremely difficult to produce after the
lapse of time . . . the law creates presumptions of
regularity in favor of such transactions (20 Am. Jur.
232) so that when the basic fact is established in an
action the existence of the presumed fact must be
assumed by force of law. (Rule 13, Uniform Rules of
Evidence; 9 Wigmore, Sec. 2491).
Anent Villaflor's claim that the 140-hectare land
relinquished and awarded to NASIPIT is his private
property, little (need) be said. . . . . The tracks of land
referred to therein are not identical to the lands
awarded to NASIPIT. Even in the assumption that the
lands mentioned in the deeds of transfer are the same
as the 140-hectare area awarded to NASIPIT, their
purchase by Villaflor (or) the latter's occupation of the
same did not change the character of the land from that
of public land to a private property. The provision of the
law is specific that public lands can only be acquired in
the manner provided for therein and not otherwise
(Sec. 11, C.A. No. 141, as amended). The records
show that Villaflor had applied for the purchase of the
lands in question with this Office (Sales Application No.
V-807) on December 2, 1948. . . . . There is a condition
in the sales application signed by Villaflor to the effect
that he recognizes that the land covered by the same is
of public domain and any and all rights he may have
with respect thereto by virtue of continuous occupation
and cultivation are relinquished to the Government
(paragraph 6, Sales Application No. V-807 . . .) of which
Villaflor is very much aware. It also appears that
Villaflor had paid for the publication fees appurtenant to
the sale of the land. He participated in the public
auction where he was declared the successful bidder.
He had fully paid the purchase prive (sic) thereof (sic).
It would be a (sic) height of absurdity for Villaflor to be
buying that which is owned by him if his claim of private
ownership thereof is to be believed. The most that can
be said is that his possession was merely that of a
sales applicant to when it had not been awarded
because he relinquished his interest therein in favor of
NASIPIT who (sic) filed a sales application therefor.
xxx xxx xxx
. . . During the investigation proceedings, Villaflor
presented as his Exhibit "(sic)" (which NASIPIT
adopted as its own exhibit and had it marked in
evidence as Exhibit "1") a duly notarized "agreement to
Sell" dated July 7, 1948, by virtue of which Villaflor
undertook to sell to Nasipit the tracts of land mentioned
therein, for a consideration of Twenty-Four Thousand
(P24,000.00) Pesos. Said tracts of land have been
verified to be identical to the parcels of land formerly
applied for by Villaflor and which the latter had
relinquished in favor of NASIPIT under a deed of
relinquishment executed by him on August 16, 1950. In
another document executed on December 7, 1948 . . .
Villaflor as "FIRST PARTY" and NASIPIT as "SECOND
PARTY" confirmed the "Agreement to Sell" of July 7,
1948, which was maintained "in full force and effect
with all its terms and conditions . . ." (Exh. "38-A"); and
that "for and in consideration of . . . TWENTY FOUR
THOUSAND (P24,000.00) PESOS that the Second
Party shall pay to the First Party . . . the First Party
hereby sells, transfers and conveys unto the Second
Party . . . his right interest and participation under and
by virtue of the Sales Application No. V-807" and, in its
paragraph 8, it made stipulations as to when part of the
said consideration . . . was paid and when the balance
was to be paid, to wit:
a) the amount of SEVEN THOUSAND .
. . PESOS has already been paid by the
Second Party to the First Party upon the
execution of the Agreement to Sell, on
July 17, 1948;
b) the amount of FIVE THOUSAND . . .
PESOS shall be paid upon the signing
of this present agreement; and
c) the amount of TWELVE THOUSAND
. . . PESOS, shall be paid upon the
execution by the First Party of the
Absolute Sale of the Two parcels of
land in question in favor of the Second
Party of the Certificate of Ownership of
the said two parcels of land. (Exh. 38-
B). (Emphasis ours)
It is thus clear from this subsequent document marked
Exhibit "38 ANALCO" that of the consideration of the
"Agreement to Sell" dated July 7, 1948, involving the
140-hectare area relinquished by Villaflor in favor of
NASIPIT, in the amount of Twenty-Four Thousand
(P24,000.00) Pesos:
(1) the amount of Seven Thousand (P7,000.00)
Pesos was already paid upon the execution of the
"Agreement to Sell" on July 7, 1948, receipt of which
incidentally was admitted by Villaflor in the document of
December 7, 1948;
(2) the amount of Five Thousand (P5,000.00)
Pesos was paid when said document was signed by
Vicente J. Villaflor as the First Party and Nasipit thru its
President, as the Second Party, on December 7, 1948;
and
(3) the balance of Twelve Thousand (P12,000.00)
Pesos to be paid upon the execution by the First Party
of the Absolute Deed of Sale of the two parcels of land
in favor of the Second Party, and upon delivery to the
Second Party of the Certificate of Ownership of the said
two parcels of land.
Villaflor contends that NASIPIT could not have paid
Villaflor the balance of Twelve Thousand (P12,000.00)
Pesos . . . consideration in the Agreement to Sell will
only be paid to applicant-assignor (referring to Villaflor)
upon obtaining a Torrens Title in his favor over the 140-
hectare of land applied for and upon execution by him
of a Deed of Absolute Sale in favor of Nasipit Lumber
Company, Inc. . . . . Inasmuch as applicant-assignor
was not able to obtain a Torrens Title over the land in
question he could not execute an absolute Deed of (sic)
Nasipit Lumber Co., Inc. Hence, the Agreement to Sell
was not carried out and no Twelve Thousand
(P12,000.00) Pesos was overpaid either to the
applicant-assignor, much less to Howard J. Nell
Company. (See MEMORANDUM FOR THE
APPLICANT-ASSIGNOR, dated January 5, 1977). . . .
. . . Villaflor did not adduce evidence in support of his
claim that he had not been paid the . . . (P12,000.00) . .
. consideration of the Agreement to Sell dated July 7,
1948 (Exh. "38 NALCO") beyond his mere
uncorroborated assertions. On the other hand, there is
strong evidence to show that said Twelve Thousand
(P12,000.00) Pesos had been paid by (private
respondent) to Edward J. Nell Company by virtue of the
Deed of Assignment of Credit executed by Villaflor
(Exh. "41 NALCO") for the credit of the latter.
Atty. Gabriel Banaag, resident counsel of NASIPIT who
is in a position to know the facts, testified for NASIPIT.
He described that it was he who notarized the
"Agreement to Sell" (Exh. "F"); that he knew about the
execution of the document of December 7, 1948 (Exh.
"38") confirming the said "Agreement to Sell" having
been previously consulted thereon by Jose Fernandez,
who signed said document on behalf of NASIPIT . . .
that subsequently, in January 1949, Villaflor executed a
Deed of Assignment of credit in favor of Edward J. Nell
Company (Exh. "41 NALCO") whereby Villaflor ceded
to the latter his receivable for NASIPIT corresponding
to the remaining balance in the amount of Twelve
Thousand . . . Pesos of the total consideration . . .
stipulated in both the "Agreement to Sell" (Exh. "F") and
the document dated December 7, 1948 (Exh. "39");
. . . . He further testified that the said assignment of
credit was communicated to (private respondent) under
cover letter dated January 24, 1949 (Exh. "41-A") and
not long thereafter, by virtue of the said assignment of
credit, (private respondent) paid the balance of Twelve
Thousand . . . due to Villaflor to Edward J. Nell
Company . . . . Atty. Banaag's aforesaid testimony
stand unrebutted; hence, must be given full weight and
credit. . . . Villaflor and his counsel were present when
Atty. Banaag's foregoing testimony was Villaflor did not
demur, nor did he rebut the same, despite having been
accorded full opportunity to do so.
xxx xxx xxx
Having found that both the Five Thousand . . .
consideration of the deed of Relinquishment . . . and
that the remaining balance of
. . . (P12,000.00) to complete the Twenty-Four
Thousand (P24,000.00) Pesos consideration of both
the Agreement to Sell dated July 7, 1948, and the
document, dated December 7, 1948, executed by the
former in favor of the latter, have been paid Villaflor the
issue on prescription and laches becomes academic
and needs no further discussion.
But more than all the questions thus far raised and
resolved is the question whether a sales patent can be
issued to NASIPIT for the 140-hectare area awarded to
it in the light of Section 11, Article XIV of the new
Constitution which provides in its pertinent portion to
wit:
. . . No private corporation or
association may hold alienable land of
the public domain except by lease not
to exceed one thousand hectares in
area . . . .
The Secretary of Justice had previous occasion to rule
on this point in his opinion No. 140, s. 1974. Said the
Honorable Justice Secretary:
On the second question, (referring to
the questions when may a public land
be considered to have been acquired by
purchase before the effectivity of the
new Constitution posed by the Director
of Lands in his query on the effect on
pending applications for the issuance of
sales patent in the light of Section 11,
Art. XIV of the New Constitution
aforecited), you refer to this Office's
Opinion No. 64 series of 1973 in which I
stated:
On the other hand, with respect to sales
applications ready for issuance of sales
patent, it is my opinion that where the
applicant had, before the Constitution
took effect, fully complied with all this
obligations under the Public Land Act in
order to entitle him to a Sales patent,
there would be no legal or equitable
justification for refusing to issue or
release the sales patent.
With respect to the point as to when the Sales applicant
has complied with all the terms and conditions which
would entitle him to a sales patent, the herein above
Secretary of Justice went on:
That as to when the applicant has
complied with all the terms and
conditions which would entitle him to a
patent is a questioned (sic) fact which
your office would be in the best position
to determine. However, relating this to
the procedure for the processing of
applications mentioned above, I think
that as the applicant has fulfilled the
construction/cultivation requirements
and has fully paid the purchase price,
he should be deemed to have acquired
by purchase the particular tract of land
and (sic) the area (sic) in the provision
in question of the new constitution
would not apply.
From the decision of the Director of Lands, Villaflor filed a Motion for
Reconsideration which was considered as an Appeal M.N.R. Case
4341, to the Ministry of Natural Resources.
On June 6, 1979, the Minister of Natural Resources rendered a
Decision (exh. 9), 15 dismissing the appeal and affirming the decision of
the Director of Lands, pertinent portions of which reads:
After a careful study of the records and the arguments
of the parties, we believe that the appeal is not well
taken.
Firstly, the area in dispute is not the private property of
appellant.
The evidence adduced by appellant to establish his
claim of ownership over the subject area consists of
deeds of absolute sale executed in his favor on January
16, and February 15, 1940, by four (4) different
persons, namely, Cirilo Piencenaves, Fermin Balobo,
Claudio Otero and Hermogenes Patete.
However, an examination of the technical descriptions
of the tracts of land subject of the deeds of sale will
disclose that said parcels are not identical to, and do
not tally with, the area in controversy.
It is a basic assumption of our policy
that lands of whatever classification
belong to the state. Unless alienated in
accordance with law, it retains its rights
over the same as dominus, (Santiago
vs. de los Santos, L-20241, November
22, 1974, 61 SCRA 152).
For, it is well-settled that no public land
can be acquired by private persons
without any grant, express or implied
from the government. It is indispensable
then that there be showing of title from
the state or any other mode of
acquisition recognized by law. (Lee
Hong Hok, et al. vs. David, et al., L-
30389, December 27, 1972, 48 SCRA
379.)
It is well-settled that all lands remain part of the public
domain unless severed therefrom by state grant or
unless alienated in accordance with law.
We, therefore, believe that the aforesaid deeds of sale
do not constitute clear and convincing evidence to
establish that the contested area is of private
ownership. Hence, the property must be held to be
public domain.
"There being no evidence whatever that
the property in question was ever
acquired by the applicants or their
ancestors either by composition title
from the Spanish Government or by
possessory information title or by any
other means for the acquisition of public
lands, the property must be held to be
public domain." (Lee Hong Hok, et al.,
vs. David , et al., L-30389 December
27, 1972, 48 SCRA 378-379 citing Heirs
of Datu Pendatun vs. Director of Lands;
see also Director of Lands vs. Reyes, L-
27594, November 28, 1975, 68 SCRA
177).
Be that as it may, appellant, by filing a sales application
over the controverted land, acknowledged
unequivocably [sic] that the same is not his private
property.
"As such sales applicant, appellant
manifestly acknowledged that he does
not own the land and that the same is a
public land under the administration of
the Bureau of Lands, to which the
application was submitted, . . . All of its
acts prior thereof, including its real
estate tax declarations, characterized
its possessions of the land as that of a
"sales applicant" and consequently, as
one who expects to buy it, but has not
as yet done so, and is not, therefore, its
owner." (Palawan Agricultural and
Industrial Co., Inc. vs. Director of Lands,
L-25914, March 21, 1972, 44 SCRA 20,
21).
Secondly, appellant's alleged failure to pay the
consideration stipulated in the deed of relinquishment
neither converts said deed into one without a cause or
consideration nor ipso facto rescinds the same.
Appellant, though, has the right to demand payment
with legal interest for the delay or to demand rescission.
xxx xxx xxx
However, appellant's cause of action, either for specific b.
performance or rescission of contract, with damages, cultivatio
lies within the jurisdiction of civil courts, not with n
administrative bodies. requirem
ents of
xxx xxx xxx law were
complied
Lastly, appellee has acquired a vested right to the with as
subject area and, therefore, is deemed not affected by shown
the new constitutional provision that no private by
corporation may hold alienable land of the public investiga
domain except by lease. tion
reports
submitte
xxx xxx xxx
d prior to
January
Implementing the aforesaid Opinion No. 64 of the 17,
Secretary of Justice, the then Secretary of Agriculture 1973;
and Natural Resources issued a memorandum, dated
February 18, 1974, which pertinently reads as follows:
c. land
was
In the implementation of the foregoing surveyed
opinion, sales application of private and
individuals covering areas in excess of survey
24 hectares and those of corporations, returns
associations, or partnership which fall already
under any of the following categories submitte
shall be given due course and issued d to the
patents, to wit: Director
of Lands
1. Sales application for for
fishponds and for verificati
agricultural purposes on and
(SFA, SA and IGPSA) approval;
wherein prior to January and
17, 1973;
d.
a. the purchase
land d price
covered was fully
thereby paid.
was
awarded;
 From the records, it is evident that the aforestated
requisites have been complied with by appellee long
before January 17, 1973, the effectivity of the New
Constitution. To restate, the disputed area was
awarded to appellee on August 17, 1950, the purchase
price was fully paid on July 26, 1951, the cultivation
requirements were complied with as per investigation
report dated December 31, 1949, and the land was
surveyed under Pls-97.
On July 6, 1978, petitioner filed a complaint16 in the trial court for "Declaration
of Nullity of Contract (Deed of Relinquishment of Rights), Recovery of
Possession (of two parcels of land subject of the contract), and Damages" at
about the same time that he appealed the decision of the Minister of Natural
Resources to the Office of the President.
On January 28, 1983, petitioner died. The trial court ordered his widow,
Lourdes D. Villaflor, to be substituted as petitioner. After trial in due course, the
then Court of First Instance of Agusan del Norte and Butuan City, Branch
III,17 dismissed the complaint on the grounds that: (1) petitioner admitted the
due execution and genuineness of the contract and was estopped from proving
its nullity, (2) the verbal lease agreements were unenforceable under Article
1403 (2) (e) of the Civil Code, and (3) his causes of action were barred by
extinctive prescription and/or laches. It ruled that there was prescription and/or
laches because the alleged verbal lease ended in 1966, but the action was
filed only on January 6, 1978. The six-year period within which to file an action
on an oral contract per Article 1145 (1) of the Civil Code expired in 1972. The
decretal portion18 of the trial court's decision reads:
WHEREFORE, the foregoing premises duly considered, judgment is
hereby rendered in favor of the defendant and against the plaintiff.
Consequently, this case is hereby ordered DISMISSED. The defendant
is hereby declared the lawful actual physical possessor-occupant and
having a better right of possession over the two (2) parcels of land in
litigation described in par. 1.2 of the complaint as Parcel I and Parcel II,
containing a total area of One Hundred Sixty (160) hectares, and was
then the subject of the Sales Application No. V-807 of the plaintiff
(Exhibits 1, 1-A, 1-B, pp. 421 to 421-A, Record), and now of the Sales
Application No. 807, Entry No. V-407 of the defendant Nasipit Lumber
Company (Exhibit Y, pp. 357-358, Record). The Agreements to Sell
Real Rights, Exhibits 2 to 2-C, 3 to 3-B, and the Deed of
Relinquishment of Rights, Exhibits N to N-1, over the two parcels of
land in litigation are hereby declared binding between the plaintiff and
the defendant, their successors and assigns.
Double the costs against the plaintiff.
The heirs of petitioner appealed to Respondent Court of Appeals19 which,
however, rendered judgment against petitioner via the assailed Decision dated
September 27, 1990 finding petitioner's prayers — (1) for the declaration of
nullity of the deed of relinquishment, (2) for the eviction of private respondent
from the property and (3) for the declaration of petitioner's heirs as owners —
to be without basis. The decretal portion20 of the assailed 49-page, single-
spaced Decision curtly reads:
WHEREFORE, the Decision appealed from, is hereby AFFIRMED,
with costs against plaintiff-appellants.
Not satisfied, petitioner's heirs filed the instant 57-page petition for review
dated December 7, 1990. In a Resolution dated June 23, 1991, the Court
denied this petition "for being late." On reconsideration — upon plea of counsel
that petitioners were "poor" and that a full decision on the merits should be
rendered — the Court reinstated the petition and required comment from
private respondent. Eventually, the petition was granted due course and the
parties thus filed their respective memoranda.
The Issues
Petitioner, through his heirs, attributes the following errors to the Court of
Appeals:
I. Are the findings of the Court of Appeals conclusive and binding upon
the Supreme Court?
II. Are the findings of the Court of Appeals fortified by the similar
findings made by the Director of Lands and the Minister of Natural
Resources (as well as by the Office of the President)?
III. Was there "forum shopping?".
IV. Are the findings of facts of the Court of Appeals and the trial court
supported by the evidence and the law?
 V. Are the findings of the Court of Appeals supported by the very terms
of the contracts which were under consideration by the said court?
VI. Did the Court of Appeals, in construing the subject contracts,
consider the contemporaneous and subsequent act of the parties
pursuant to article 1371 of the Civil Code?
VII. Did the Court of Appeals consider the fact and the unrefuted claim
of Villaflor that he never knew of the award in favor of Nasipit?
VIII. Did the Court of Appeals correctly apply the rules on evidence in
its findings that Villaflor was paid the P5,000.00 consideration because
Villaflor did not adduce any proof that he was not paid?
IX. Is the Court of Appeals' conclusion that the contract is not simulated
or fictitious simply because it is genuine and duly executed by the
parties, supported by logic or the law?
X. May the prestations in a contract agreeing to transfer certain rights
constitute estoppel when this very contract is the subject of an action
for annulment on the ground that it is fictitious?
XI. Is the Court of Appeals' conclusion that the lease agreement
between Villaflor is verbal and therefore, unenforceable supported by
the evidence and the law?
After a review of the various submissions of the parties, particularly those of
petitioner, this Court believes and holds that the issues can be condensed into
three as follows:
(1) Did the Court of Appeals err in adopting or relying on the factual
findings of the Bureau of Lands, especially those affirmed by the
Minister (now Secretary) of Natural Resources and the trial court?
(2) Did the Court of Appeals err in upholding the validity of the
contracts to sell and the deed of relinquishment? Otherwise stated, did
the Court of Appeals err in finding the deed of relinquishment of rights
and the contracts to sell valid, and not simulated or fictitious?
(3) Is the private respondent qualified to acquire title over the disputed
property?
The Court's Ruling
The petition is bereft of merit. It basically questions the sufficiency of the
evidence relied upon by the Court of Appeals, alleging that public respondent's
factual findings were based on speculations, surmises and conjectures.
Petitioner insists that a review of those findings is in order because they were
allegedly (1) rooted, not on specific evidence, but on conclusions and
inferences of the Director of Lands which were, in turn, based on
misapprehension of the applicable law on simulated contracts; (2) arrived at
whimsically — totally ignoring the substantial and admitted fact that petitioner
was not notified of the award in favor of private respondent; and (3) grounded
on errors and misapprehensions, particularly those relating to the identity of
the disputed area.
First Issue: Primary Jurisdiction of the Director of Lands and
Finality of Factual Findings of the Court of Appeals
Underlying the rulings of the trial and appellate courts is the doctrine of primary
jurisdiction; i.e., courts cannot and will not resolve a controversy involving a
question which is within the jurisdiction of an administrative tribunal, especially
where the question demands the exercise of sound administrative discretion
requiring the special knowledge, experience and services of the administrative
tribunal to determine technical and intricate matters of fact.21
In recent years, it has been the jurisprudential trend to apply this doctrine to
cases involving matters that demand the special competence of administrative
agencies even if the question involved is also judicial in character. It applies
"where a claim is originally cognizable in the courts, and comes into play
whenever enforcement of the claim requires the resolution of issues which,
under a regulatory scheme, have been placed within the special competence
of an administrative body; in such case, the judicial process is suspended
pending referral of such issues to the administrative body for its view."22
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.23 In Machete vs. Court of Appeals, the Court upheld the primary
jurisdiction of the Department of Agrarian Reform Adjudicatory Board (DARAB)
in an agrarian dispute over the payment of back rentals under a leasehold
contract.24 In Concerned Officials of the Metropolitan Waterworks and
Sewerage System vs. Vasquez,25the Court recognized that the MWSS was in
the best position to evaluate and to decide which bid for a waterworks project
was compatible with its development plan.
The rationale underlying the doctrine of primary jurisdiction finds application in
this case, since the questions on the identity of the land in dispute and the
factual qualification of private respondent as an awardee of a sales application
require a technical determination by the Bureau of Lands as the administrative
agency with the expertise to determine such matters. Because these issues
preclude prior judicial determination, it behooves the courts to stand aside
even when they apparently have statutory power to proceed, in recognition of
the primary jurisdiction of the administrative agency.26
One thrust of the multiplication of administrative agencies is that the
interpretation of contracts and the determination of private rights
thereunder is no longer a uniquely judicial function, exercisable only by
our regular courts.27
Petitioner initiated his action with a protest before the Bureau of Lands and
followed it through in the Ministry of Natural Resources and thereafter in the
Office of the President. Consistent with the doctrine of primary jurisdiction, the
trial and the appellate courts had reason to rely on the findings of these
specialized administrative bodies.
The primary jurisdiction of the director of lands and the minister of natural
resources over the issues regarding the identity of the disputed land and the
qualification of an awardee of a sales patent is established by Sections 3 and 4
of Commonwealth Act No. 141, also known as the Public Land Act:
Sec. 3. The Secretary of Agriculture and Commerce (now Secretary of
Natural Resources) shall be the executive officer charged with carrying
out the provisions of this Act through the Director of Lands, who shall
act under his immediate control.
Sec. 4. Subject to said control, the Director of Lands shall have direct
executive control of the survey, classification, lease, sale or any other
form of concession or disposition and management of the lands of the
public domain, and his decision as to questions of fact shall be
conclusive when approved by the Secretary of Agriculture and
Commerce.
Thus, the Director of Lands, in his decision, said:28
. . . It is merely whether or not Villaflor has been paid the Five
Thousand (P5,000.00) Pesos stipulated consideration of the deed of
relinquishment made by him without touching on the nature of the deed
of relinquishment. The administration and disposition of public lands is
primarily vested in the Director of Lands and ultimately with the
Secretary of Agriculture and Natural Resources (now Secretary of
Natural Resources), and to this end —
Our Supreme Court has recognized that the Director of
Lands is a quasi-judicial officer who passes on issues
of mixed facts and law (Ortua vs. Bingson Encarnacion,
59 Phil 440). Sections 3 and 4 of the Public Land Law
thus mean that the Secretary of Agriculture and Natural
Resources shall be the final arbiter on questions of fact
in public land conflicts (Heirs of Varela vs. Aquino, 71
Phil 69; Julian vs. Apostol, 52 Phil 442).
The ruling of this Office in its order dated September 10, 1975, is worth
reiterating, thus:
. . . it is our opinion that in the exercise of his power of
executive control, administrative disposition and
allegation of public land, the Director of Lands should
entertain the protest of Villaflor and conduct formal
investigation . . . to determine the following points: (a)
whether or not the Nasipit Lumber Company, Inc. paid
or reimbursed to Villaflor the consideration of the rights
in the amount of P5,000.00 and what evidence the
company has to prove payment, the relinquishment of
rights being part of the administrative process in the
disposition of the land in question . . . .
. . . . Besides, the authority of the
Director of Lands to pass upon and
determine questions considered
inherent in or essential to the efficient
exercise of his powers like the incident
at issue, i.e. , whether Villaflor had been
paid or not, is conceded bylaw.
Reliance by the trial and the appellate courts on the factual findings of the
Director of Lands and the Minister of Natural Resources is not misplaced. By
reason of the special knowledge and expertise of said administrative agencies
over matters falling under their jurisdiction, they are in a better position to pass
judgment thereon; thus, their findings of fact in that regard are generally
accorded great respect, if not finality,29 by the courts.30 The findings of fact of an
administrative agency must be respected as long as they are supported by
substantial evidence, even if such evidence might not be overwhelming or
even preponderant. It is not the task of an appellate court to weigh once more
the evidence submitted before the administrative body and to substitute its own
judgment for that of the administrative agency in respect of sufficiency of
evidence.31
However, the rule that factual findings of an administrative agency are
accorded respect and even finality by courts admits of exceptions. This is true
also in assessing factual findings of lower courts.32 It is incumbent on the
petitioner to show that the resolution of the factual issues by the administrative
agency and/or by the trial court falls under any of the exceptions. Otherwise,
this Court will not disturb such findings.33
We mention and quote extensively from the rulings of the Bureau of Lands and
the Minister of Natural Resources because the points, questions and issues
raised by petitioner before the trial court, the appellate court and now before
this Court are basically the same as those brought up before the aforesaid
specialized administrative agencies. As held by the Court of
Appeals:34
We find that the contentious points raised by appellant in this action,
are substantially the same matters he raised in BL Claim No. 873 (N).
In both actions, he claimed private ownership over the land in question,
assailed the validity and effectiveness of the Deed of Relinquishment
of Rights he executed in August 16, 1950, that he had not been paid
the P5,000.00 consideration, the value of the improvements he
introduced on the land and other expenses incurred by him.
In this instance, both the principle of primary jurisdiction of administrative
agencies and the doctrine of finality of factual findings of the trial courts,
particularly when affirmed by the Court of Appeals as in this case, militate
against petitioner's cause. Indeed, petitioner has not given us sufficient reason
to deviate from them.
Land in Dispute Is Public Land
Petitioner argues that even if the technical description in the deeds of sale and
those in the sales application were not identical, the area in dispute remains
his private property. He alleges that the deeds did not contain any technical
description, as they were executed prior to the survey conducted by the
Bureau of Lands; thus, the properties sold were merely described by reference
to natural boundaries. His private ownership thereof was also allegedly
attested to by private respondent's former field manager in the latter's February
22, 1950 letter, which contained an admission that the land leased by private
respondent was covered by the sales application.
This contention is specious. The lack of technical description did not prove that
the finding of the Director of Lands lacked substantial evidence. Here, the
issue is not so much whether the subject land is identical with the property
purchased by petitioner. The issue, rather, is whether the land covered by the
sales application is private or public land. In his sales application, petitioner
expressly admitted that said property was public land. This is formidable
evidence as it amounts to an admission against interest.
In the exercise of his primary jurisdiction over the issue, Director of Lands
Casanova ruled that the land was public:35
. . . Even (o)n the assumption that the lands mentioned in the deeds of
transfer are the same as the 140-hectare area awarded to Nasipit, their
purchase by Villaflor (or) the latter's occupation of the same did not
change the character of the land from that of public land to a private
property. The provision of the law is specific that public lands can only
be acquired in the manner provided for therein and not otherwise (Sec.
11, C.A. No. 141, as amended). The records show that Villaflor had
applied for the purchase of lands in question with this Office (Sales
Application No. V-807) on December 2, 1948. . . . There is a condition
in the sales application . . . to the effect that he recognizes that the land
covered by the same is of public domain and any and all rights he may
have with respect thereto by virtue of continuous occupation and
cultivation are relinquished to the Government (paragraph 6, Sales
Application No. V-807 of Vicente J. Villaflor, p. 21, carpeta) of which
Villaflor is very much aware. It also appears that Villaflor had paid for
the publication fees appurtenant to the sale of the land. He participated
in the public auction where he was declared the successful bidder. He
had fully paid the purchase prive (sic) thereor (sic). It would be a (sic)
height of absurdity for Villaflor to be buying that which is owned by him
if his claim of private ownership thereof is to be
believed. . . . .
This finding was affirmed by the Minister of Natural Resources:36
Firstly, the area in dispute is not the private property of appellant
(herein petitioner).
The evidence adduced by (petitioner) to establish his claim of
ownership over the subject area consists of deeds of absolute sale
executed in his favor . . . .
However, an examination of the technical descriptions of the tracts of
land subject of the deeds of sale will disclose that said parcels are not
identical to, and do not tally with, the area in controversy.
It is a basic assumption of our policy that lands of
whatever classification belong to the state. Unless
alienated in accordance with law, it retains its rights
over the same as dominus. (Santiago vs. de los
Santos, L-20241, November 22, 1974, 61 SCRA 152).
For it is well-settled that no public land can be acquired
by private persons without any grant, express or
implied from the government. It is indispensable then
that there be showing of title from the state or any other
mode of acquisition recognized by law. (Lee Hong Hok,
et al. vs. David, et al., L-30389, December 27, 1972, 48
SCRA 379).
xxx xxx xxx
We, therefore, believe that the aforesaid deeds of sale do not
constitute clear and convincing evidence to establish that the contested
area is of private ownership. Hence, the property must be held to be
public domain.
There being no evidence whatever that the property in
question was ever acquired by the applicants or their
ancestors either by composition title from the Spanish
Government or by possessory information title or by
any other means for the acquisition of public lands, the
property must be held to be public domain.
Be that as it may, [petitioner], by filing a sales application over the
controverted land, acknowledged unequivocably [sic] that the same is
not his private property.
As such sales applicant manifestly acknowledged that
he does not own the land and that the same is a public
land under the administration of the Bureau of Lands, to
which the application was submitted, . . . All of its acts
prior thereof, including its real estate tax declarations,
characterized its possessions of the land as that of a
"sales applicant". And consequently, as one who
expects to buy it, has not as yet done so, and is not,
therefore, its owner." (Palawan Agricultural and
Industrial Co., Inc. vs. Director of Lands, L-25914,
March 21, 1972, 44 SCRA 15).
Clearly, this issue falls under the primary jurisdiction of the Director of Lands
because its resolution requires "survey, classification, . . . disposition and
management of the lands of the public domain." It follows that his rulings
deserve great respect. As petitioner failed to show that this factual finding of
the Director of Lands was unsupported by substantial evidence, it assumes
finality. Thus, both the trial and the appellate courts correctly relied on such
finding.37 We can do no less.
Second Issue: No Simulation of Contracts Proven
Petitioner insists that contrary to Article 137138 of the Civil Code, Respondent
Court erroneously ignored the contemporaneous and subsequent acts of the
parties; hence, it failed to ascertain their true intentions. However, the rule on
the interpretation of contracts that was alluded to by petitioner is used in
affirming, not negating, their validity. Thus, Article 1373,39 which is a conjunct of
Article 1371, provides that, if the instrument is susceptible of two or more
interpretations, the interpretation which will make it valid and effectual should
be adopted. In this light, it is not difficult to understand that the legal basis
urged by petitioner does not support his allegation that the contracts to sell and
the deed of relinquishment are simulated and fictitious. Properly understood,
such rules on interpretation even negate petitioner's thesis.
But let us indulge the petitioner awhile and determine whether the cited
contemporaneous and subsequent acts of the parties support his allegation of
simulation. Petitioner asserts that the relinquishment of rights and the
agreements to sell were simulated because, first, the language and terms of
said contracts negated private respondent's acquisition of ownership of the
land in issue; and second, contemporaneous and subsequent communications
between him and private respondent allegedly showed that the latter admitted
that petitioner owned and occupied the two parcels; i.e., that private
respondent was not applying for said parcels but was interested only in the two
hectares it had leased, and that private respondent supported petitioner's
application for a patent.
Petitioner explains that the Agreement to Sell dated December 7, 1948 did not
and could not transfer ownership because paragraph 8 (c) thereof stipulates
that the "balance of twelve thousand pesos (12,000.00) shall be paid upon the
execution by the First Party [petitioner] of the Absolute Deed of Sale of the two
parcels of land in question in favor of the Second Party, and upon delivery to
the Second Party [private respondent] of the Certificate of Ownership of the
said two parcels of land." The mortgage provisions in paragraphs 6 and 7 of
the agreement state that the P7,000.00 and P5,000.00 were "earnest money
or a loan with antichresis by the free occupancy and use given to Nasipit of the
140 hectares of land not anymore as a lessee." If the agreement to sell
transferred ownership to Nasipit, then why was it necessary to require
petitioner, in a second agreement, to mortgage his property in the event of
nonfulfillment of the prestations in the first agreement?
True, the agreement to sell did not absolutely transfer ownership of the land to
private respondent. This fact, however, does not show that the agreement was
simulated. Petitioner's delivery of the Certificate of Ownership and execution of
the deed of absolute sale were suspensive conditions, which gave rise to a
corresponding obligation on the part of the private respondent, i.e., the
payment of the last installment of the consideration mentioned in the
December 7, 1948 Agreement. Such conditions did not affect the perfection of
the contract or prove simulation. Neither did the mortgage.
Simulation occurs when an apparent contract is a declaration of a fictitious will,
deliberately made by agreement of the parties, in order to produce, for the
purpose of deception, the appearance of a juridical act which does not exist or
is different from that which was really executed.40 Such an intention is not
apparent in the agreements. The intent to sell, on the other hand, is as clear as
daylight.
Petitioner alleges further that the deed of relinquishment of right did not give
full effect to the two agreements to sell, because the preliminary clauses of the
deed allegedly served only to give private respondent an interest in the
property as a future owner thereof and to enable respondent to follow up
petitioner's sales application.
We disagree. Such an intention is not indicated in the deed. On the contrary, a
real and factual sale is evident in paragraph 6 thereof, which states: "That the
Nasipit Lumber Co., Inc., . . . is very much interested in acquiring the land
covered by the aforecited application to be used for purposes of mechanized,
farming" and the penultimate paragraph stating: ". . . VICENTE J. VILLAFLOR,
hereby voluntarily renounce and relinquish whatever rights to, and interests I
have in the land covered by my above-mentioned application in favor of the
Nasipit Lumber Co., Inc."
We also hold that no simulation is shown either in the letter, dated December
3, 1973, of the former field manager of private respondent, George Mear. A
pertinent portion of the letter reads:
(a)s regards your property at Acacia, San Mateo, I recall that we made
some sort of agreement for the occupancy, but I no longer recall the
details and I had forgotten whether or not we actually did occupy your
land. But if, as you say, we did occupy it, then I am sure that the
Company is obligated to pay a rental.
The letter did not contain any express admission that private respondent was
still leasing the land from petitioner as of that date. According to Mear, he
could no longer recall the details of his agreement with petitioner. This cannot
be read as evidence of the simulation of either the deed of relinquishment or
the agreements to sell. It is evidence merely of an honest lack of recollection.
Petitioner also alleges that he continued to pay realty taxes on the land even
after the execution of said contracts. This is immaterial because payment of
realty taxes does not necessarily prove ownership, much less simulation of
said contracts.41
Nonpayment of the Consideration
Did Not Prove Simulation
Petitioner insists that nonpayment of the consideration in the contracts proves
their simulation. We disagree. Nonpayment, at most, gives him only the right to
sue for collection. Generally, in a contract of sale, payment of the price is a
resolutory condition and the remedy of the seller is to exact fulfillment or, in
case of a substantial breach, to rescind the contract under Article 1191 of the
Civil Code.42 However, failure to pay is not even a breach, but merely an event
which prevents the vendor's obligation to convey title from acquiring binding
force.43
Petitioner also argues that Respondent Court violated evidentiary rules in
upholding the ruling of the Director of Lands that petitioner did not present
evidence to show private respondent's failure to pay him. We disagree. Prior to
the amendment of the rules on evidence on March 14, 1989, Section 1, Rule
131, states that each party must prove his or her own affirmative
allegations.44 Thus, the burden of proof in any cause rested upon the party
who, as determined by the pleadings or the nature of the case, asserts the
affirmative of an issue and remains there until the termination of the
action.45 Although nonpayment is a negative fact which need not be proved, the
party seeking payment is still required to prove the existence of the debt and
the fact that it is already due.46
Petitioner showed the existence of the obligation with the presentation of the
contracts, but did not present any evidence that he demanded payment from
private respondent. The demand letters dated January 2 and 5, 1974 (Exhs.
"J" and "U"), adduced in evidence by petitioner, were for the payment of back
rentals, damages to improvements and reimbursement of acquisition costs and
realty taxes, not payment arising from the contract to sell.
Thus, we cannot fault Respondent Court for adopting the finding of the Director
of Lands that petitioner "offered no evidence to support his claim of
nonpayment beyond his own self-serving assertions," as he did not even
demand "payment, orally or in writing, of the five thousand (P5,000.00) pesos
which was supposed to be due him since August 17, 1950, the date when the
order of award was issued to Nasipit, and when his cause of action to recover
payment had accrued." Nonpayment of the consideration in the contracts to
sell or the deed of relinquishment was raised for the first time in the protest
filed with the Bureau of Lands on January 31, 1974. But this protest letter was
not the demand letter required by law.
Petitioner alleges that the assignment of credit and the letter of the former field
manager of private respondent are contemporaneous and subsequent acts
revealing the nonpayment of the consideration. He maintains that the
P12,000.00 credit assigned pertains to the P5,000.00 and P7,000.00 initial
payments in the December 7, 1948 Agreement, because the balance of
P12,000.00 was not yet "due and accruing." This is consistent, he argues, with
the representation that private respondent was not interested in filing a sales
application over the land in issue and that Nasipit was instead supporting
petitioner's application thereto in Mear's letter to the Director of Lands dated
February 22, 1950 (Exh. "X")47
This argument is too strained to be acceptable. The assignment of credit did
not establish the nondelivery of these initial payments of the total
consideration. First, the assignment of credit happened on January 19, 1949,
or a month after the signing of the December 7, 1948 Agreement and almost
six months after the July 7, 1948 Agreement to Sell. Second, it does not
overcome the recitation in the Agreement of December 7, 1948: ". . . a) The
amount of SEVEN THOUSAND (P7,000.00) PESOS has already been paid by
the Second Party to the First Party upon the execution of the Agreement to
Sell, on July 7, 1948; b) The amount of FIVE THOUSAND (P5,000.00) PESOS
shall be paid upon the signing of this present agreement; . . . . "
Aside from these facts, the Director of Lands found evidence of greater weight
showing that payment was actually made:48
. . . (T)here is strong evidence to show that said . . . (P12,000.00) had
been paid by NASIPIT to Edward J. Nell Company by virtue of the
Deed of Assignment of Credit executed by Villaflor (Exh. "41 NALCO")
for the credit of the latter.
Atty. Gabriel Banaag, resident counsel of NASIPIT . . . declared that it
was he who notarized the "Agreement to Sell" (Exh. "F"); . . . that
subsequently, in January 1949, Villaflor executed a Deed of
Assignment of credit in favor of Edward J. Nell Company (Exh. "41
NALCO") whereby Villaflor ceded to the latter his receivable for
NASIPIT corresponding to the remaining balance in the amount of . . .
(P12,000.00) . . . of the total consideration . . . . ; He further testified
that the said assignment . . . was communicated to NASIPIT under
cover letter dated January 24, 1949 (Exh. "41-A") and not long
thereafter, by virtue of the said assignment of credit, NASIPIT paid the
balance . . . to Edward J. Nell Company (p. 58, ibid). Atty. Banaag's
aforesaid testimony stand unrebutted; hence, must be given full weight
and credit.
xxx xxx xxx
The Director of Lands also found that there had been payment of the
consideration in the relinquishment of rights:49
On the other hand, there are strong and compelling reasons to
presume that Villaflor had already been paid the amount of Five
Thousand (P5,000.00) Pesos.
First, . . . What is surprising, however, is not so much his claims
consisting of gigantic amounts as his having forgotten to adduce
evidence to prove his claim of non-payment of the Five Thousand
(P5,000.00) Pesos during the investigation proceedings when he had
all the time and opportunity to do so. . . . . The fact that he did not
adduce or even attempt to adduce evidence in support thereof shows
either that he had no evidence to offer of that NASIPIT had already
paid him in fact. What is worse is that Villaflor did not even bother to
command payment, orally or in writing, of the Five Thousand
(P5,000.00) Pesos which was supposed to be due him since August
17, 1950, the date when the order of award was issued to Nasipit, and
when his cause of action to recover payment had accrued. The fact
that he only made a command for payment on January 31, 1974, when
he filed his protest or twenty-four (24) years later is immediately
nugatory of his claim for non-payment.
But Villaflor maintains that he had no knowledge or notice that the
order of award had already been issued to NASIPIT as he had gone to
Indonesia and he had been absent from the Philippines during all those
twenty-four (24) years. This of course taxes credulity. . . .
. . . It is more in keeping with the ordinary course of
things that he should have acquired information as to
what was transpiring in his affairs in Manila . . . .
Second, it should be understood that the condition that NASIPIT
should reimburse Villaflor the amount of Five Thousand (P5,000.00)
Pesos upon its receipt of the order of award was fulfilled as said award
was issued to NASIPIT on August 17, 1950. The said deed of
relinquishment was prepared and notarized in Manila with Villaflor and
NASIPIT signing the instrument also in Manila. Now, considering that
Villaflor is presumed to be more assiduous in following up with the
Bureau of Lands the expeditious issuance of the order of award as the
(consideration) would depend on the issuance of said order to award
NASIPIT, would it not be reasonable to believe that Villaflor was at
hand when the award was issued to NASIPIT on August 17, 1950, or
barely a day which he executed the deed of relinquishment on August
16, 1950, in Manila? . . . .
Third, on the other hand, NASIPIT has in his possession a sort of
"order" upon itself — (the deed of relinquishment wherein he(sic)
obligated itself to reimburse or pay Villaflor the . . . consideration of the
relinquishment upon its receipt of the order of award) for the payment
of the aforesaid amount the moment the order of award is issued to it.
It is reasonable to presume that NASIPIT has paid the (consideration)
to Villaflor.
xxx xxx xxx
. . . (I)t was virtually impossible for NASIPIT, after the lapse of the
intervening 24 years, to be able to cope up with all the records
necessary to show that the consideration for the deed of
relinquishment had been fully paid. To expect NASIPIT to keep intact
all records pertinent to the transaction for the whole quarter of a
century would be to require what even the law does not. Indeed, even
the applicable law itself (Sec. 337, National Internal Revenue Code)
requires that all records of corporations be preserved for only a
maximum of five years.
NASIPIT may well have added that at any rate while there are
transactions where the proper evidence is impossible or extremely
difficult to produce after the lapse of time . . . the law creates
presumptions of regularity in favor of such transactions (20 Am. Jur.
232) so that when the basic fact is established in an action the
existence of the presumed fact must be assumed by force of law. (Rule
13, Uniform Rules of Evidence; 9 Wigmore, Sec. 2491).
The Court also notes that Mear's letter of February 22, 1950 was sent six
months prior to the execution of the deed of relinquishment of right. At the time
of its writing, private respondent had not perfected its ownership of the land to
be able to qualify as a sales applicant. Besides, although he was a party to the
July 7, 1948 Agreement to Sell, Mear was not a signatory to the Deed of
Relinquishment or to the December 7, 1948 Agreement to Sell. Thus, he
cannot be expected to know the existence of and the amendments to the later
contracts. These circumstances explain the mistaken representations, not
misrepresentations, in said letter.
Lack of Notice of the Award
Petitioner insists that private respondent suppressed evidence, pointing to his
not having been notified of the Order of Award dated August 17, 1950.50 At the
bottom of page 2 of the order, petitioner was not listed as one of the parties
who were to be furnished a copy by Director of Lands Jose P. Dans. Petitioner
also posits that Public Land Inspector Sulpicio A. Taeza irregularly received
the copies for both private respondent and the city treasurer of Butuan City.
The lack of notice for petitioner can be easily explained. Plainly, petitioner was
not entitled to said notice of award from the Director of Lands, because by
then, he had already relinquished his rights to the disputed land in favor of
private respondent. In the heading of the order, he was referred to as sales
applicant-assignor. In paragraph number 4, the order stated that, on August
16, 1950, he relinquished his rights to the land subject of the award to private
respondent. From such date, the sales application was considered to be a
matter between the Bureau of Lands and private respondent only. Considering
these facts, the failure to give petitioner a copy of the notice of the award
cannot be considered as suppression of evidence.51 Furthermore, this order
was in fact available to petitioner and had been referred to by him since
January 31, 1974 when he filed his protest with the Bureau of Lands.52
Third Issue: Private Respondent Qualified
for an Award of Public Land
Petitioner asserts that private respondent was legally disqualified from
acquiring the parcels of land in question because it was not authorized by its
charter to acquire disposable public agricultural lands under Sections 121, 122
and 123 of the Public Land Act, prior to its amendment by P.D. No. 763. We
disagree. The requirements for a sales application under the Public Land Act
are: (1) the possession of the qualifications required by said Act (under Section
29) and (2) the lack of the disqualifications mentioned therein (under Sections
121, 122, and 123). However, the transfer of ownership via the two
agreements dated July 7 and December 7, 1948 and the relinquishment of
rights, being private contracts, were binding only between petitioner and
private respondent. The Public Land Act finds no relevance because the
disputed land was covered by said Act only after the issuance of the order of
award in favor of private respondent. Thus, the possession of any
disqualification by private respondent under said Act is immaterial to the
private contracts between the parties thereto. (We are not, however,
suggesting a departure from the rule that laws are deemed written in
contracts.) Consideration of said provisions of the Act will further show their
inapplicability to these contracts. Section 121 of the Act pertains to acquisitions
of public land by a corporation from a grantee, but petitioner never became a
grantee of the disputed land. On the other hand, private respondent itself was
the direct grantee. Sections 122 and 123 disqualify corporations, which are not
authorized by their charter, from acquiring public land; the records do not show
that private respondent was not so authorized under its charter.
Also, the determination by the Director of Lands and the Minister of Natural
Resources of the qualification of private respondent to become an awardee or
grantee under the Act is persuasive on Respondent Court. In Espinosa
vs. Makalintal,53 the Court ruled that, by law, the powers of the Secretary of
Agriculture and Natural Resources regarding the disposition of public lands —
including the approval, rejection, and reinstatement of applications — are of
executive and administrative nature. (Such powers, however, do not include
the judicial power to decide controversies arising from disagreements in civil or
contractual relations between the litigants.) Consequently, the determination of
whether private respondent is qualified to become an awardee of public land
under C.A. 141 by sales application is included therein.
All told, the only disqualification that can be imputed to private respondent is
the prohibition in the 1973 Constitution against the holding of alienable lands of
the public domain by corporations.54 However, this Court earlier settled the
matter, ruling that said constitutional prohibition had no retroactive effect and
could not prevail over a vested right to the land. In Ayog vs. Cusi, Jr.,55 this
Court declared:
We hold that the said constitutional prohibition has no retroactive
application to the sales application of Biñan Development Co., Inc.
because it had already acquired a vested right to the land applied for at
the time the 1973 Constitution took effect.
That vested right has to be respected. It could not be abrogated by the
new Constitution. Section 2, Article XIII of the 1935 Constitution allows
private corporations to purchase public agricultural lands not exceeding
one thousand and twenty-four hectares. Petitioner's prohibition action
is barred by the doctrine of vested rights in constitutional law.
"A right is vested when the right to enjoyment has become the property
of some particular person or persons as a present interest." (16 C.J.S.
1173). It is "the privilege to enjoy property legally vested, to enforce
contracts, and enjoy the rights of property conferred by existing law"
(12 C.J. 955, Note 46, No. 6) or "some right or interest in property
which has become fixed and established and is no longer open to
doubt or controversy" (Downs vs. Blount, 170 Fed. 15, 20, cited in
Balboa vs. Farrales, 51 Phil. 498, 502).
The due process clause prohibits the annihilation of vested rights. "A
state may not impair vested rights by legislative enactment, by the
enactment or by the subsequent repeal of a municipal ordinance, or by
a change in the constitution of the State, except in a legitimate exercise
of the police power" (16 C.J.S. 1177-78).
It has been observed that, generally, the term "vested right" expresses
the concept of present fixed interest, which in right reason and natural
justice should be protected against arbitrary State action, or an innately
just an imperative right which an enlightened free society, sensitive to
inherent and irrefragable individual rights, cannot deny (16 C.J.S.
1174, Note 71, No. 5, citing Pennsylvania Greyhound Lines, Inc. vs.
Rosenthal, 192 Atl. 2nd 587).
Secretary of Justice Abad Santos in his 1973 opinion ruled that where
the applicant, before the Constitution took effect, had fully complied
with all his obligations under the Public Land Act in order to entitle him
to a sales patent, there would seem to be no legal or equitable
justification for refusing to issue or release the sales patent (p.
254, Rollo).
In Opinion No. 140, series of 1974, he held that as soon as the
applicant had fulfilled the construction or cultivation requirements and
has fully paid the purchase price, he should be deemed to have
acquired by purchase the particular tract of land and to him the area
limitation in the new Constitution would not apply.
In Opinion No. 185, series of 1976, Secretary Abad Santos held that
where the cultivation requirements were fulfilled before the new
Constitution took effect but the full payment of the price was completed
after January 17, 1973, the applicant was, nevertheless, entitled to a
sales patent (p. 256, Rollo).
Such a contemporaneous construction of the constitutional prohibition
by a high executive official carries great weight and should be
accorded much respect. It is a correct interpretation of section 11 of
Article XIV.
In the instant case, it is incontestable that prior to the effectivity of the
1973 Constitution the right of the corporation to purchase the land in
question had become fixed and established and was no longer open to
doubt or controversy.
Its compliance with the requirements of the Public Land Law for the
issuance of a patent had the effect of segregating the said land from
the public domain. The corporation's right to obtain a patent for that
land is protected by law. It cannot be deprived of that right without due
process (Director of Lands vs. CA, 123 Phil. 919).
The Minister of Natural Resources ruled, and we agree, that private
respondent was similarly qualified to become an awardee of the disputed land
because its rights to it vested prior to the effectivity of the 1973 Constitution:56
Lastly, appellee has acquired a vested right to the subject area and,
therefore, is deemed not affected by the new constitutional provision
that no private corporation may hold alienable land of the public
domain except by lease.
It may be recalled that the Secretary of Justice in his Opinion No. 64,
series of 1973, had declared, to wit:
On the other hand, with respect to sales application
ready for issuance of sales patent, it is my opinion that
where the applicant had, before, the constitution took
effect, fully complied with all his obligations under the
Public Land act in order to entitle him to sales patent,
there would seem to be not legal or equitable
justification for refusing to issue or release the sales
patent.
Implementing the aforesaid Opinion No. 64 . . . , the then Secretary of
Agriculture and Natural Resources issued a memorandum, dated
February 18, 1974, which pertinently reads as follows:
In the implementation of the foregoing opinion, sales
application of private individuals covering areas in
excess of 24 hectares and those of corporations,
associations, or partnership which fall under any of the
following categories shall be given due course and
issued patents, to wit:
Sales application for fishponds and for
agricultural purposes (SFA, SA and
IGPSA) wherein prior to January 17,
1973,
 a. the land covered Even this Office had not failed to recognize the juridical personality of
thereby was awarded; Nasipit to apply for the purchase of public lands . . . when it awarded to
it the land so relinquished by Villaflor (Order of Award dated August 17,
b. cultivation 1950) and accepted its application therefor. At any rate, the question
requirements of law whether an applicant is qualified to apply for the acquisition of public
were complied with as lands is a matter between the applicant and this Office to decide and
shown by investigation which a third party like Villaflor has no personality to question beyond
reports submitted prior merely calling the attention of this Office thereto.
to January 17, 1973;
Needless to say, we also agree that the November 8, 1946 Lease Agreement
c. land was surveyed between petitioner and private respondent had been terminated by the
and survey returns agreements to sell and the relinquishment of rights. By the time the verbal
already submitted to the leases were allegedly made in 1951 and 1955,58 the disputed land had already
Director of Lands for been acquired and awarded to private respondent. In any event, petitioner's
verification and cause of action on these alleged lease agreements prescribed long before he
approval; and filed Civil Case No. 2072-III, as correctly found by the trial and appellate
courts.59 Thus, it is no longer important, in this case, to pass upon the issue of
d. purchase price was whether or not amendments to a lease contract can be proven by parol
fully paid. evidence. The same holds true as regards the issue of forum-shopping.

From the records, it is evident that the aforestated requisites have
been complied with by appellee long before January 17, 1973, the
effectivity of the New Constitution. To restate, the disputed area was
awarded to appellee on August 17, 1950, the purchase price was fully
paid on July 26, 1951, the cultivation requirements were complied with
as per investigation report dated December 31, 1949, and the land was
surveyed under Pls-97.
All in all, petitioner has not provided us sufficient reason to disturb the cogent
findings of the Director of Lands, the Minister of Natural Resources, the trial
court and the Court of Appeals.
WHEREFORE, the petition is hereby DISMISSED.
SO ORDERED.

The same finding was earlier made by the Director of Lands:57

It is further contended by Villaflor that Nasipit has no juridical

personality to apply for the purchase of public lands for agricultural
purposes. The records clearly show, however, that since the execution
of the deed of relinquishment of August 16, 1950, in favor of Nasipit,
Villaflor has always considered and recognized Nasipit as having the
juridical personality to acquire public lands for agricultural purposes. In
the deed of relinquishment . . . , it is stated:

6. That the Nasipit Lumber Co., Inc., a corporation duly

organized in accordance with the laws of the
Philippines, . . . .
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 183926 March 29, 2010
GENEROSA ALMEDA LATORRE, Petitioner,
vs.
LUIS ESTEBAN LATORRE, Respondent.
RESOLUTION
NACHURA, J.:
Before this Court is a Petition for Review on Certiorari1 under Rule 45, in
relation to Rule 41, of the Rules of Civil Procedure, assailing the decision2 of
the Regional Trial Court (RTC) of Muntinlupa City, Branch 256, dated April 29,
2008.
The facts of the case are as follows:
In October 2000, petitioner Generosa Almeda Latorre (petitioner) filed before
the RTC of Muntinlupa City a Complaint3 for Collection and Declaration of
Nullity of Deed of Absolute Sale with application for Injunction against her own
son, herein respondent Luis Esteban Latorre (respondent), and one Ifzal Ali
(Ifzal).
Petitioner averred that, on September 28, 1999, respondent and Ifzal entered
into a Contract of Lease4 over a 1,244-square meter real property, situated at
No. 1366 Caballero St., Dasmariñas Village, Makati City (subject property).
Under the said contract, respondent, as lessor, declared that he was the
absolute and registered owner of the subject property. Petitioner alleged that
respondent's declaration therein was erroneous because she and respondent
were co-owners of the subject property in equal shares.
Petitioner narrated that, on March 14, 1989, she and respondent executed
their respective Deeds of Donation, conveying the subject property in favor of
The Porfirio D. Latorre Memorial & Fr. Luis Esteban Latorre Foundation, Inc.
(the Foundation). Thus, Transfer Certificate of Title (TCT) No. 1619635 was
issued in the name of the Foundation. Subsequently, on September 2, 1994,
petitioner and respondent executed separate Deeds of Revocation of Donation
and Reconveyance of the subject property, consented to by the Foundation,
through the issuance of appropriate corporate resolutions. However, the Deeds
of Revocation were not registered; hence, the subject property remained in the
name of the Foundation. Petitioner insisted, however, that respondent was fully
aware that the subject property was owned in common by both of them. To
protect her rights as co-owner, petitioner formally demanded from Ifzal the
payment of her share of the rentals, which the latter, however, refused to heed.
Moreover, petitioner averred that, on or about August 16, 2000, she discovered
that respondent caused the annotation of an adverse claim on the TCT of the
subject property, claiming full ownership over the same by virtue of a Deed of
Absolute Sale6 dated March 21, 2000, allegedly executed by petitioner in favor
of respondent. Petitioner claimed that the deed was a falsified document; that
her signature thereon was forged by respondent; and that she never received
₱21 Million or any other amount as consideration for her share of the subject
property. Thus, petitioner prayed that Ifzal be enjoined from paying the rentals
to respondent, and the latter from receiving said rentals; that both Ifzal and
respondent be ordered to pay petitioner her share of the rentals; and that
respondent be enjoined from asserting full ownership over the subject property
and from committing any other act in derogation of petitioner's interests
therein. Petitioner also prayed for the payment of moral and exemplary
damages, litigation expenses, and costs of the suit.
Respondent immediately filed a Motion to Dismiss7 on the sole ground that the
venue of the case was improperly laid. He stressed that while the complaint
was denominated as one for Collection and Declaration of Nullity of Deed of
Absolute Sale with application for Injunction, in truth the case was a real action
affecting title to and interest over the subject property. Respondent insisted
that all of petitioner's claims were anchored on her claim of ownership over
one-half (½) portion of the subject property. Since the subject property is
located in Makati City, respondent argued that petitioner should have filed the
case before the RTC of Makati City and not of Muntinlupa City.
Ifzal also filed his motion to dismiss on the ground of want of jurisdiction,
asserting that he was immune from suit because he was an officer of the Asian
Development Bank, an international organization.
The RTC issued a Temporary Restraining Order dated November 6, 2000,
restraining Ifzal from paying his rentals to respondent and enjoining the latter
from receiving from the former the aforesaid rentals. The RTC also directed
both Ifzal and respondent to pay petitioner her share of the rentals, with the
corresponding order against respondent not to commit any act in derogation of
petitioner's interest over the subject property.
In its Order dated January 2, 2001, the RTC denied respondent's motion to
dismiss. The RTC ruled that the nature of an action whether real or personal
was determined by the allegations in the complaint, irrespective of whether or
not the plaintiff was entitled to recover upon the claims asserted - a matter
resolved only after, and as a result of, a trial. Thus, trial on the merits ensued.
Undaunted, respondent filed an Answer Ad Cautelam8 dated March 19, 2001,
insisting, among others, that the case was a real action and that the venue was
improperly laid.9 Respondent narrated that he was a former Opus Dei priest
but he left the congregation in 1987 after he was maltreated by his Spanish
superiors. Respondent alleged that petitioner lived with him and his family from
1988 to 2000, and that he provided for petitioner's needs. Respondent also
alleged that, for almost 20 years, the Opus Dei divested the Latorre family of
several real properties. Thus, in order to spare the subject property from the
Opus Dei, both petitioner and respondent agreed to donate it to the
Foundation. In 1994, when respondent got married and sired a son, both
petitioner and respondent decided to revoke the said donation. The Foundation
consented to the revocation. However, due to lack of funds, the title was never
transferred but remained in the name of the Foundation.
Respondent asseverated that he and his wife took good care of petitioner and
that they provided for her needs, spending a substantial amount of money for
these needs; that because of this, and the fact that the rentals paid for the use
of the subject property went to petitioner, both parties agreed that petitioner
would convey her share over the subject property to respondent; and that, on
March 21, 2000, petitioner executed a Deed of Absolute Sale in favor of
respondent.
Respondent further alleged that sometime in March to May 2000, the
relationship of the parties, as mother and son, deteriorated. Petitioner left
respondent's house because he and his wife allegedly ignored, disrespected,
and insulted her.10 Respondent claimed, however, that petitioner left because
she detested his act of firing their driver.11It was then that this case was filed
against him by petitioner.
In the meantime, in its Order dated May 15, 2003, the RTC dismissed
petitioner's claim against Ifzal because the dispute was clearly between
petitioner and respondent.
On April 29, 2008, the RTC ruled in favor of respondent, disposing of the case
in this wise:
While the case herein filed by the plaintiff involves recovery of possession of a
real property situated at 1366 Caballero St., Dasmariñas Village, Makati City,
the same should have been filed and tried in the Regional Trial Court of Makati
City who, undoubtedly, has jurisdiction to hear the matter as aforementioned
the same being clearly a real action.
WHEREFORE, in view of the foregoing, the above-entitled case is hereby
DISMISSED for want of jurisdiction, all in pursuance to the above-cited
jurisprudence and Rule 4 of the Rules of Court.
SO ORDERED.12
Aggrieved, petitioner filed her Motion for Reconsideration,13 which the RTC
denied in its Order14 dated July 24, 2008 for lack of merit.
Hence, this Petition, claiming that the RTC erred in treating the venue as
jurisdiction and in treating petitioner's complaint as a real action.
While the instant case was pending resolution before this Court, petitioner
passed away on November 14, 2009. Thus, petitioner's counsel prayed that,
pending the appointment of a representative of petitioner's estate, notices of
the proceedings herein be sent to petitioner’s other son, Father Roberto A.
Latorre.15
As early as the filing of the complaint, this case had been marred by numerous
procedural infractions committed by petitioner, by respondent, and even by the
RTC, all of which cannot be disregarded by this Court.
First. Petitioner filed her complaint with the RTC of Muntinlupa City instead of
the RTC of Makati City, the latter being the proper venue in this case.
Sections 1 and 2, Rule 4 of the 1997 Rules of Civil Procedure provide an
answer to the issue of venue.16 Actions affecting title to or possession of real
property or an interest therein (real actions) shall be commenced and tried in
the proper court that has territorial jurisdiction over the area where the real
property is situated. On the other hand, all other actions (personal actions)
shall be commenced and tried in the proper courts where the plaintiff or any of
the principal plaintiffs resides or where the defendant or any of the principal
defendants resides.17 The action in the RTC, other than for Collection, was for
the Declaration of Nullity of the Deed of Absolute Sale involving the subject
property, which is located at No. 1366 Caballero St., Dasmariñas Village,
Makati City. The venue for such action is unquestionably the proper court of
Makati City, where the real property or part thereof lies, not the RTC of
Muntinlupa City.18
In this jurisdiction, we adhere to the principle that the nature of an action is
determined by the allegations in the Complaint itself, rather than by its title or
heading.19 It is also a settled rule that what determines the venue of a case is
the primary objective for the filing of the case.20 In her Complaint, petitioner
sought the nullification of the Deed of Absolute Sale on the strength of two
basic claims that (1) she did not execute the deed in favor of respondent; and
(2) thus, she still owned one half (½) of the subject property. Indubitably,
petitioner's complaint is a real action involving the recovery of the subject
property on the basis of her co-ownership thereof.
Second. The RTC also committed a procedural blunder when it denied
respondent's motion to dismiss on the ground of improper venue.
The RTC insisted that trial on the merits be conducted even when it was
awfully glaring that the venue was improperly laid, as pointed out by
respondent in his motion to dismiss. After trial, the RTC eventually dismissed
the case on the ground of lack of jurisdiction, even as it invoked, as
justification, the rules and jurisprudence on venue. Despite the conduct of trial,
the RTC failed to adjudicate this case on the merits.
Third. Respondent also did not do very well, procedurally. When the RTC
denied his Motion to Dismiss, respondent could have filed a petition for
certiorari and/or prohibition inasmuch as the denial of the motion was done
without jurisdiction or in excess of jurisdiction or with grave abuse of discretion
amounting to lack of jurisdiction.21 However, despite this lapse, it is clear that
respondent did not waive his objections to the fact of improper venue, contrary
to petitioner's assertion. Notably, after his motion to dismiss was denied,
respondent filed a Motion for Reconsideration to contest such denial. Even in
his Answer Ad Cautelam, respondent stood his ground that the case ought to
be dismissed on the basis of improper venue.
Finally, petitioner came directly to this Court on a Petition for Review on
Certiorari under Rule 45, in relation to Rule 41, of the Rules of Civil Procedure
on alleged pure questions of law. In Murillo v. Consul,22 we laid down a
doctrine that was later adopted by the 1997 Revised Rules of Civil Procedure.
In that case, this Court had the occasion to clarify the three (3) modes of
appeal from decisions of the RTC, namely: (1) ordinary appeal or appeal by
writ of error, where judgment was rendered in a civil or criminal action by the
RTC in the exercise of its original jurisdiction; (2) petition for review, where
judgment was rendered by the RTC in the exercise of its appellate jurisdiction;
and (3) petition for review to the Supreme Court.
The first mode of appeal, governed by Rule 41, is brought to the Court of
Appeals (CA) on questions of fact or mixed questions of fact and law. The
second mode of appeal, covered by Rule 42, is brought to the CA on questions
of fact, of law, or mixed questions of fact and law. The third mode of appeal,
provided in Rule 45, is filed with the Supreme Court only on questions of law. 1avv phi 1
A question of law arises when there is doubt as to what the law is on a certain
state of facts, while there is a question of fact when the doubt arises as to the
truth or falsity of the alleged facts.23 Our ruling in Velayo-Fong v. Velayo24 is
instructive:
A question of law arises when there is doubt as to what the law is on a certain
state of facts, while there is a question of fact when the doubt arises as to the
truth or falsity of the alleged facts. For a question to be one of law, the same
must not involve an examination of the probative value of the evidence
presented by the litigants or any of them. The resolution of the issue must rest
solely on what the law provides on the given set of circumstances. Once it is
clear that the issue invites a review of the evidence presented, the question
posed is one of fact. Thus, the test of whether a question is one of law or of
fact is not the appellation given to such question by the party raising the same;
rather, it is whether the appellate court can determine the issue raised without
reviewing or evaluating the evidence, in which case, it is a question of law;
otherwise it is a question of fact.25
In her Reply to respondent’s Comment,26 petitioner prayed that this Court
decide the case on the merits. To do so, however, would require the
examination by this Court of the probative value of the evidence presented,
taking into account the fact that the RTC failed to adjudicate this controversy
on the merits. This, unfortunately, we cannot do. It thus becomes exceedingly
clear that the filing of the case directly with this Court ran afoul of the doctrine
of hierarchy of courts. Pursuant to this doctrine, direct resort from the lower
courts to the Supreme Court will not be entertained unless the appropriate
remedy sought cannot be obtained in the lower tribunals. This Court is a court
of last resort, and must so remain if it is to satisfactorily perform the functions Rosario (Rosario) Saraza (Spouses Saraza) (petitioners). The respondent
assigned to it by the Constitution and by immemorial tradition.27 alleged in his complaint that on September 1, 1999, he and Fernando
executed an Agreement5 that provided for the latter’s sale of his 100-square
Accordingly, we find no merit in the instant petition. Neither do we find any meter share in a lot situated in Bangkal, Makati City, which at that time was still
reversible error in the trial court’s dismissal of the case ostensibly for want of registered in the name of one Emilia Serafico and covered by Transfer
jurisdiction, although the trial court obviously meant to dismiss the case on the Certificate of Title (TCT) No. 40376 (later covered by TCT No. 220530), for a
ground of improper venue. total consideration of ₱3,200,000.00. The amount of ₱1,200,000.00 was paid
upon the Agreement’s execution, while the balance of ₱2,000,000.00 was to
WHEREFORE, the instant Petition is DENIED. No costs. be paid on installments to the Philippine National Bank (PNB), to cover a loan
of Spouses Saraza, Fernando’s parents, with the bank. A final deed of sale
conveying the property was to be executed by Fernando upon full payment of
SO ORDERED.
the PNB loan.6
Republic of the Philippines
It was also agreed upon that should the parties fail for any reason to transfer
SUPREME COURT
the subject property to the respondent’s name, Rosario and Fernando’s 136-sq
Manila
m property covered by TCT No. 156126 and encumbered to PNB to secure the
loan that was to be paid by the respondent shall be considered a collateral in
FIRST DIVISION favor of the respondent.7 Spouses Saraza signified their conformity to the
Agreement. The respondent was also allowed to take immediate possession of
G.R. No. 198718 November 27, 2013 the property covered by TCT No. 156126 through a contract of lease8. The
petitioners likewise furnished PNB with an Authority9, allowing the respondent
SPOUSES TEODORO and ROSARIO SARAZA and FERNANDO to pay their obligations to the PNB, to negotiate for a loan restructuring, to
SARAZA, Petitioners, receive the owner’s duplicate copy of TCT No. 156126 upon full payment of
vs. the loan secured by its mortgage, and to perform such other acts as may be
WILLIAM FRANCISCO, Respondent. necessary in connection with the settlement of the loan.10

DECISION
REYES, J.:
This is a petition for review on Certiorari1 under Rule 45 of the Rules of Court,
which assails the Decision2 dated June 28, 2011 and Resolution3 dated
September 30, 2011 of the Court of Appeals (CA) in CA-G.R. CV No. 93961.
The assailed decision and resolution of the CA affirmed the Decision4 dated
June 5, 2009 of the Regional Trial Court (RTC) of Imus, Cavite, Branch 20, in
Civil Case No. 0319-04, an action for specific performance/sum of money and
damages.
When the remaining balance of the PNB loan reached ₱226,582.13, the
respondent asked for the petitioners’ issuance of a Special Power of Attorney
(SPA) that would authorize him to receive from PNB the owner’s duplicate
copy of TCT No. 156126 upon full payment of the loan. The petitioners denied
the request. Upon inquiry from PNB, the respondent found out that the
petitioners had instead executed an Amended Authority, which provided that
the owner’s copy of TCT No. 156126 should be returned to the mortgagors
upon full payment of the loan.11 Spouses Saraza also caused the eviction of the
respondent from the property covered by TCT No. 156126.12 These prompted
the respondent to institute the civil case for specific performance, sum of
money and damages with the RTC of Imus, Cavite on December 7, 2004.13

The Facts
The case stems from an amended complaint filed by William Francisco
(respondent) against Fernando Saraza (Fernando) and Spouses Teodoro and
The petitioners admitted the existence of the Agreement and the Authority
which was addressed to PNB. They, nonetheless, opposed the respondent’s
complaint on the ground that the amount of ₱1,200,000.00 which was
supposed to be paid by the respondent upon the Agreement’s execution
remained unpaid. The respondent allegedly took advantage of the trust that 3. to PAY all taxes imposable by law for the transfer of the title in the
was reposed upon him by the petitioners, who nonetheless did not formally name of [respondent], pursuant to the parties’ AGREEMENT dated 1
demand payment from him but merely waited for him to pay the amount.14 September 1999;

The Ruling of the RTC 4. to PAY [respondent] William Francisco the following:

On June 5, 2009, the RTC rendered a Decision in favor of the respondent. The 4.1 One Hundred Thousand Pesos (Php 100,000.00) as and by
RTC considered the contents of the Agreement executed by the parties, taking way of damages;
into account that it was a notarized document. It held:
4.2 One Hundred Seventy-Seven Thousand Pesos (Php
In another case, the High Court held that: "The recitals in a public instrument 177,000.00) as and by way of attorney’s fees; and
executed with all the legal formalities are evidence against the parties thereto
and their successors in interest, and a high degree of proof is necessary to 4.3 the costs of suit.
overcome the presumption that such recitals are true." (Naval, et. al., v
Enriquez, 3 Phil 669).15 (Italics supplied) SO ORDERED.16

The RTC held that contrary to the petitioners’ claim, the respondent’s full Dissatisfied, Fernando questioned the RTC Decision before the CA. In addition
payment of the ₱3,200,000.00 consideration provided in the Agreement was to the defenses which he raised during the proceedings before the RTC, he
supported by: (1) the petitioners’ acknowledgment in the Agreement that they argued that the RTC of Imus lacked jurisdiction over the case as it involved an
received the amount of ₱1,200,000.00 upon its execution; and (2) the adjudication of ownership of a property situated in Makati City.17
Certification from PNB that the full amount of Spouses Saraza’s loan with the
bank had been fully paid.
The Ruling of the CA
The RTC, however, declared that only Fernando should be held liable for the
The CA affirmed the RTC rulings via the Decision dated June 28, 2011. The
respondent’s claims, since the main action was for specific performance,
CA rejected the petitioners’ allegation that the amount of ₱1,200,000.00
specifically to compel him to execute a Deed of Absolute Sale over the subject
remained unpaid by the respondent, citing the stipulation in their Agreement
property already covered by TCT No. 220530 under Fernando’s name. Hence,
which provided that the said amount was paid upon the contract’s execution.
the decretal portion of the RTC Decision reads:
On the issue of jurisdiction, the CA cited Fernando’s failure to seasonably file
WHEREFORE, premises considered, judgment is hereby rendered ordering
before the lower court a motion to dismiss stating that the action should have
[petitioner] Fernando M. Saraza as follows, viz:
been filed in Makati City. More importantly, the Court explained that the case
was a personal action since it did not involve a claim of ownership of the
1. to EXECUTE a Deed of Absolute Sale covering the 100-square subject property, but only sought Fernando’s execution of a deed of sale in the
meter parcel of land located in Barangay Bangkal, City of Makati and respondent’s favor. Thus, the venue for the action was the residence of the
covered by Transfer Certificate of Title No. 220530 of the Registry of plaintiff or the defendant, at the plaintiff’s option.18
Deeds of Makati in favor of [respondent] William Francisco pursuant to
their Agreement dated 01 September 1999;
Petitioner Fernando’s Motion for Reconsideration19 was denied by the CA in the
Resolution dated September 30, 2011.20 Hence, this petition for review on
2. to DELIVER to [respondent] William Francisco the Owner’s Copy of certiorari.
Transfer Certificate of Title No. 220530 covering the 100-square meter
parcel of land located in Barangay Bangkal, City of Makati which is
The Issue
subject of the Deed of Absolute Sale; and
The main issue for the Court’s resolution is: Whether or not the petitioners are
bound to comply with their obligations to the respondent as embodied in their
Agreement dated September 1, 1999.
This Court’s Ruling
The respondent’s satisfaction of his
obligation under the Agreement
It is imperative to look into the respondent’s compliance with his covenants
under the subject Agreement in order to ascertain whether or not he can
compel the petitioners to satisfy their respective undertakings.
At the outset, the Court underscores the limited scope of a petition for review
on certiorari under Rule 45 of the Rules of Court. Section 1 of Rule 45 provides
that the petition shall raise only questions of law, which must be distinctly set
forth. Questions of fact are not entertained, for the Court is not duty-bound to
analyze again and weigh the evidence introduced in and already considered by
the tribunals below.21 When supported by substantial evidence, the findings of
fact of the CA are conclusive and binding on the parties and are not reviewable
by the Court, save in some recognized exceptions such as: (1) when the
conclusion is a finding grounded entirely on speculation, surmises and
conjectures; (2) when the inference made is manifestly mistaken, absurd or
impossible; (3) where there is a grave abuse of discretion; (4) when the
judgment is based on a misapprehension of facts; (5) when the findings of fact
are conflicting; (6) when the CA, in making its findings, went beyond the issues
of the case and the same is contrary to the admissions of both appellant and
appellee; (7) when the findings are contrary to those of the trial court; (8) when
the findings of fact are conclusions without citation of specific evidence on
which they are based; (9) when the facts set forth in the petition as well as in
the petitioners’ main and reply briefs are not disputed by the respondents; and
(10) when the findings of fact of the CA are premised on the supposed
absence of evidence and contradicted by the evidence on record.22
The respondent’s obligation under the Agreement pertains to the payment of
the ₱3,200,000.00 consideration for Fernando’s corresponding duty of
executing a Deed of Sale over the property formerly covered by TCT No.
40376. To dispute the respondent’s claim that he has satisfied said obligation,
the petitioners now raise factual issues which the Court however emphasizes
are not for the Court to reassess. For one, the issue of whether or not the
respondent’s obligation to pay has already been satisfied is a factual question.
We consider the fact that both the RTC and the CA have determined that there
has been a full payment by the respondent of his ₱3,200,000.00 obligation
under the Agreement. Upon review, the Court finds no reason to deviate from
this finding of the courts, especially as it is supported by substantial evidence.
To begin with, the petitioners do not deny the authenticity and their execution
of the subject Agreement, a matter that is also sufficiently established by the
fact that the document was acknowledged before a notary public. As both the
RTC and CA correctly held, such Agreement sufficiently proves the fact of the
respondent’s payment to the petitioners of the agreed initial payment of
₱1,200,000.00, as it states:
That, for and in consideration of the agreed purchase price of THREE
MILLION TWO HUNDRED THOUSAND PESOS ([P]3,200,000.00), Philippine
currency, of which the sum of ONE MILLION TWO HUNDRED THOUSAND
PESOS ([P]1,200,000.00), has been paid by the buyer upon execution of this
instrument x x x.23 (Emphasis ours)
Given this categorical statement, the petitioners’ denial that they have received
the amount necessitated concrete and substantial proof. A perusal of the case
records shows that the petitioners failed in this regard. Even their
unsubstantiated claim that the document’s notarization was irregularly made
cannot prevail over the presumption that the notary public’s duty has been
regularly performed.24 The CA also correctly held that the parol evidence rule
applies to this case. Unsubstantiated testimony, offered as proof of verbal
agreements which tend to vary the terms of the written agreement, is
inadmissible under the rule.25
In addition to the foregoing, the petitioners’ plain denial of the respondent’s
claim of full payment is self-serving, belied by their admission that they had not
at anytime demanded from the respondent the payment of ₱1,200,000.00. The
petitioners are presumed under the law to have taken ordinary care of their
concerns;26 thus, they would have exerted efforts to demand payment of the
amount due them if in fact, no payment had been made. Moreover, given this
presumption, the petitioners were supposed to be wary of the import of affixing
their signature on the Agreement, and would not have voluntarily signed the
subject Agreement if they did not intend to give full effect thereto.
The petitioners also raise in their Supplemental Petition27 some defenses which
were not introduced during the proceedings before the lower courts. These
pertain to the alleged failure of Spouses Saraza to fully understand the
contents of the Agreement as these were written in English, and their claim
that the Agreement was a contract of adhesion for having been prepared solely
by the respondent. Basic is the rule, however, that no issue may be raised on
appeal unless it has been brought before the lower tribunals for
consideration.28 To consider such issues and arguments that are belatedly
raised by a party would be tantamount to a blatant disregard of the basic
principles of fair play, justice and due process.29 In any case, the new defenses
that are raised by the petitioners deserve scant consideration. There is no
claim that the cited language limitation equally applied to the respondent, the
principal party in the Agreement. Contrary to the petitioners’ stance, the
Agreement also does not appear to be a contract where the petitioners had no
opportunity to question its terms, negotiate or decline its execution. The bare
allegations of the petitioners fail to suffice.
Based on available evidence, it is then clear that the respondent had fully
satisfied his obligation under the subject Agreement given the stipulation in the
document on his initial payment of ₱1,200,000.00, and considering PNB’s
Certification30 that the ₱2,000,000.00 loan of Spouses Saraza with the bank
had been fully settled on April 22, 2005. Fernando, being equally bound by the
terms of the document, was correctly ordered by the RTC and the CA to duly
comply with his own obligation under the contract, particularly the obligation to
execute a deed of sale over his 100-sq m property in Bangkal, Makati City. The
respondent’s satisfaction of his obligation under the Agreement also rendered
unmeritorious the petitioners’ counterclaim for damages.
Venue of an Action for Specific
Performance
As to the issue of venue, the petitioners’ argument that the action should have
been instituted with the RTC of Makati City, and not the RTC of Imus, Cavite,
is misplaced. Although the end result of the respondent’s claim was the
transfer of the subject property to his name, the suit was still essentially for
specific performance, a personal action, because it sought Fernando’s
execution of a deed of absolute sale based on a contract which he had
previously made.
Our ruling in Cabutihan v. Landcenter Construction & Development
Corporation31 is instructive. In the said case, a complaint for specific
performance that involved property situated in Parañaque City was instituted
before the RTC of Pasig City. When the case’s venue was raised as an issue,
the Court sided with therein petitioner who argued that "the fact that ‘she
ultimately sought the conveyance of real property’ not located in the territorial
jurisdiction of the RTC of Pasig is x x x an anticipated consequence and
beyond the cause for which the action [for specific performance with damages]
was instituted."32 The Court explained:
[I]n La Tondeña Distillers, Inc. v. Ponferrada, private respondents filed an
action for specific performance with damages before the RTC of Bacolod City.
The defendants allegedly reneged on their contract to sell to them a parcel of
land located in Bago City – a piece of property which the latter sold to
petitioner while the case was pending before the said RTC. Private respondent
did not claim ownership but, by annotating a notice of lis pendens on the title,
recognized defendants’ ownership thereof. This Court ruled that the venue had
properly been laid in the RTC of Bacolod, even if the property was situated in
Bago.
In Siasoco v. Court of Appeals, private respondent filed a case for specific
performance with damages before the RTC of Quezon City. It alleged that after
it accepted the offer of petitioners, they sold to a third person several parcels of
land located in Montalban, Rizal. The Supreme Court sustained the trial court’s
order allowing an amendment of the original Complaint for specific
performance with damages. Contrary to petitioners’ position that the RTC of
Quezon City had no jurisdiction over the case, as the subject lots were located
in Montalban, Rizal, the said RTC had jurisdiction over the original Complaint.
The Court reiterated the rule that a case for specific performance with
damages is a personal action which may be filed in a court where any of the
parties reside.33(Citations omitted and emphasis supplied)
The Court compared these two cases with the case of National Steel
Corporation v. Court of Appeals34 where the Court held that an action that
seeks the execution of a deed of sale over a parcel of land is for recovery of
real property, and not for specific performance, because the primary objective
is to regain ownership and possession of the property.35 It was explained that
the prayer in National Steel was not in any way connected to a contract that
was previously executed by the party against whom the complaint was filed,
unlike in Cabutihan where the parties had earlier executed an Undertaking for
the property’s transfer, correctly giving rise to a cause of action either for
specific performance or for rescission, as in this case.
Section 2, Rule 4 of the Rules of Court then governs the venue for the
respondent’s action. It provides that personal actions "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, or in the case of a non-
resident defendant where he may be found, at the election of the plaintiff."
Considering the respondent’s statement in his complaint that he resides in
Imus, Cavite,36 the filing of his case with the RTC of Imus was proper.
Award of Damages
The Court, however, modifies the lower courts’ award of damages in favor of
the respondent. In the assailed decision, the CA affirmed the RTC’s award of
1âwphi1
the following amounts: (1) ₱100,000.00 as damages; (2) ₱177,000.00 as
attorney’s fees; and (3) costs of suit.
Upon review, the Court finds no justification for the order to pay damages in
the amount Pl00,000.00. Both the RTC and the CA failed to indicate the
award's classification and the factual and legal bases therefor, save for a
general statement by the R TC that it was deemed a "reasonable amount of
damages arising from the failure of the [petitioners] to fulfill [their] obligation
under their Agreement."37
The claim in the complaint was for moral and compensatory damages, yet the
RTC failed to indicate whether the Pl00,000.00 was for the moral damages for
the "undue anxiety, mental anguish and wounded feelings"38, or compensatory
damages for the "actual business losses due to disruption of his business"39 as
alleged by the respondent in his Amended Complaint. More importantly, there
is no showing that such allegations were sufficiently substantiated by the
respondent, rendering the deletion of the award warranted.
WHEREFORE, the Decision dated June 28, 2011 and Resolution dated
September 30, 2011 of the Court of Appeals in CA-G.R. CV No. 93961 are
AFFIRMED with MODIFICATION in that the award of Pl00,000.00 as damages
in favor of respondent William Francisco is deleted.
SO ORDERED.
FIRST DIVISION
G.R. No. 146089. December 13, 2001
VIRGINIA GOCHAN, LOUISE GOCHAN, LAPU-
LAPU REAL ESTATE CORPORATION, FELIX
GOCHAN AND SONS REALTY CORPORATION,
MACTAN REALTY DEVELOPMENT
CORPORATION, petitioners, vs. MERCEDES
GOCHAN, ALFREDO GOCHAN, ANGELINA
GOCHAN-HERNAEZ, MA. MERCED GOCHAN
GOROSPE, CRISPO GOCHAN, JR., and MARLON
GOCHAN, Respondents.
DECISION
YNARES-SANTIAGO, J.:
This is a petition for review seeking to set aside the
decision of the Court of Appeals dated September 10,
1999 in CA-G.R. SP No. 49084, 1 as well as its
Resolution 2 dated November 22, 2000, denying the
Motion for Reconsideration.
Respondents were stockholders of the Felix Gochan
and Sons Realty Corporation and the Mactan Realty
Development Corporation. Sometime in 1996,
respondents offered to sell their shares in the two
corporations to the individual petitioners, the heirs of
the late Ambassador Esteban Gochan, for and in
consideration of the sum of P200,000,000.00.
Petitioners accepted and paid the said amount to
respondents. Accordingly, respondents issued to
petitioners the necessary Receipts. 3In addition,
respondents executed their respective Release,
Waiver and Quitclaim, 4 wherein they undertook that
they would not initiate any suit, action or complaint
against petitioners for whatever reason or purpose.
In turn, respondents, through Crispo Gochan, Jr.,
required individual petitioners to execute a
promissory note, 5 undertaking not to divulge the
actual consideration they paid for the shares of stock.
For this purpose, Crispo Gochan, Jr. drafted a
document entitled promissory note in his own
handwriting and had the same signed by Felix
Gochan, III, Louise Gochan and Esteban Gochan, Jr.
Unbeknown to petitioners, Crispo Gochan, Jr.
inserted in the promissory note a phrase that says,
Said amount is in partial consideration of the sale. 6
cräläwvirtual ibrä ry
On April 3, 1998, respondents filed a complaint
against petitioners for specific performance and
damages with the Regional Trial Court of Cebu City,
Branch 11, docketed as Civil Case No. CEB-21854.
Respondents alleged that sometime in November
1996, petitioner Louise Gochan, on behalf of all the
petitioners, offered to buy their shares of stock,
consisting of 254 shares in the Felix Gochan and
Sons Realty Corporation and 1,624 shares of stock in
the Mactan Realty Development Corporation; and
that they executed a Provisional Memorandum of
Agreement, wherein they enumerated the following
as consideration for the sale:
1. Pesos: Two Hundred Million Pesos (P200M)
2. Two (2) hectares more or less of the fishpond in
Gochan compound, Mabolo, Lot 4F-2-B
3. Lot 2, Block 9 with an area of 999 square meters
in Gochan Compound, Mabolo, Cebu
4. Three Thousand (3,000) square meters of Villas
Magallanes in Mactan, Cebu
5. Lot 423 New Gem Building with an area of 605
square meters. 7 cräläwvirtual ibrä ry
Accordingly, respondents claimed that they are
entitled to the conveyance of the aforementioned
properties, in addition to the amount of
P200,000,000.00, which they acknowledge to have
received from petitioners. Further, respondents
prayed for moral damages of P15,000,000.00,
exemplary damages of P2,000,000.00, attorneys fees
of P14,000,000.00, and litigation expenses of
P2,000,000.00.
Petitioners filed their answer, raising the following
affirmative defenses: (a) lack of jurisdiction by the
trial court for non-payment of the correct docket
fees; (b) unenforceability of the obligation to convey
real properties due to lack of a written memorandum
thereof, pursuant to the Statute of Frauds; (c)
extinguishment of the obligation by payment; (d)
waiver, abandonment and renunciation by
respondent of all their claims against petitioners; and
(e) non-joinder of indispensable parties.
On August 7, 1998, petitioners filed with the trial
court a motion for a preliminary hearing on the
affirmative defenses. In an Order dated August 11,
1998, the trial court denied the motion, ruling as
follows:
As the grant of said motion lies in the discretion of
the court under Section 6 of Rule 16 of the 1997
Rules of Civil Procedure, this Court in the exercise of
its discretion, hereby denies the said motion because
the matters sought to be preliminarily heard do not
appear to be tenable. For one, the statute of frauds
does not apply in this case because the contract
which is the subject matter of this case is already an
executed contract. The statute of frauds applies only
to executory contracts. According to Dr. Arturo M.
Tolentino, a leading authority in civil law, since the
statute of frauds was enacted for the purpose of
preventing frauds, it should not be made the
instrument to further them. Thus, where one party
has performed his obligation under a contract, equity
would agree that all evidence should be admitted to
prove the alleged agreement (PNB vs. Philippine
Vegetable Oil Company, 49 Phil. 897). For another,
the contention of the defendants that the claims of
the plaintiffs are already extinguished by full
payment thereof does not appear to be indubitable
because the plaintiffs denied under oath the due
execution and genuineness of the receipts which are
attached as Annexes 1-A, 1-B and 1-C of defendants
answer. This issue therefore has to be determined on
the basis of preponderance of evidence to be
adduced by both parties. Then, still for another, the
contention that the complaint is defective because it
allegedly has failed to implead indispensable parties
appears to be wanting in merit because the parties to
the memorandum of agreement adverted to in the
complaint are all parties in this case. Then the matter
of payment of docketing and filing fees is not a fatal
issue in this case because the record shows that the
plaintiffs had paid at least P165,000.00 plus in the
form of filing and docketing fees. Finally, regarding
exerting earnest efforts toward a compromise by the
plaintiffs, the defendants cannot say that there is an
absence of an allegation to this effect in the
complaint because paragraph 11 of the complaint
precisely states that before filing this case, earnest
efforts toward a compromise have been made.
Petitioners motion for reconsideration of the above
Order was denied by the trial court on September 11,
1998.
Petitioners thus filed a petition for certiorari with the
Court of Appeals, docketed as CA-G.R. SP No. 49084.
On September 10, 1999, the Court of Appeals
rendered the appealed decision dismissing the
petition on the ground that respondent court did not
commit grave abuse of discretion, tantamount to lack
or in excess of jurisdiction in denying the motion to
hear the affirmative defenses. 8 cräläwvirtuali brä ry
Again, petitioners filed a motion for reconsideration,
but the same was denied by the Court of Appeals in
its assailed Resolution of November 22, 2000. 9 cräläwvirt ualib rä ry
Petitioners, thus, brought the present petition for
review anchored on the following grounds:
I.
THE COURT OF APPEALS COMMITTED GRAVE AND
PALPABLE ERROR IN FINDING THAT THE CORRECT
DOCKET FEES HAVE BEEN PAID.
II.
THE COURT OF APPEALS COMMITTED SERIOUS
ERROR IN RULING THAT THE PMOA WAS A
PARTIALLY EXECUTED CONTRACT AND HENCE NOT
COVERED BY THE STATUTE OF FRAUDS.
III.
THE COURT OF APPEALS COMMITTED GRAVE ERROR
IN DECIDING THAT THE CLAIMS OF PRIVATE
RESPONDENTS HAVE NOT BEEN EXTINGUISHED BY
PAYMENT OR FULL SETTLEMENT DESPITE THE
PRESENCE OF RECEIPTS SIGNED BY THE PRIVATE
RESPONDENTS SHOWING THE CONTRARY.
IV.
THE COURT OF APPEALS COMMITTED GRAVE ERROR
IN RESOLVING THAT FELIX GOCHAN III AND
ESTEBAN GOCHAN, JR. ARE NOT INDISPENSABLE
PARTIES AND THEREFORE NEED NOT BE IMPLEADED
AS PARTIES.10 cräläwvirt uali brä ry
Respondents filed their Comment, 11 arguing, in fine,
that petitioners are guilty of forum-shopping when
they filed two petitions for certiorari with the Court of
Appeals; and that the Court of Appeals did not err in
dismissing the petition for certiorari.
The instant petition has merit.
The rule is well-settled that the court acquires
jurisdiction over any case only upon the payment of
the prescribed docket fees. In the case of Sun
Insurance Office, Ltd. (SIOL) v. Asuncion, 12 this
Court held that it is not simply the filing of the
complaint or appropriate initiatory pleading, but the
payment of the prescribed docket fee that vests a
trial court with jurisdiction over the subject matter or
nature of the action.
Respondents maintain that they paid the correct
docket fees in the amount of P165,000.00 when they
filed the complaint with the trial court. Petitioners, on
the other hand, contend that the complaint is in the
nature of a real action which affects title to real
properties; hence, respondents should have alleged
therein the value of the real properties which shall be
the basis for the assessment of the correct docket
fees.
The Court of Appeals found that the complaint was
one for specific performance and incapable of
pecuniary estimation. We do not agree.
It is necessary to determine the true nature of the
complaint in order to resolve the issue of whether or
not respondents paid the correct amount of docket
fees therefor. In this jurisdiction, the dictum adhered
to is that the nature of an action is determined by the
allegations in the body of the pleading or complaint
itself, rather than by its title or heading. 13 The
caption of the complaint below was denominated as
one for specific performance and damages. The relief
sought, however, is the conveyance or transfer of
real property, or ultimately, the execution of deeds of
conveyance in their favor of the real properties
enumerated in the provisional memorandum of
agreement. Under these circumstances, the case
below was actually a real action, affecting as it does
title to or possession of real property.
In the case of Hernandez v. Rural Bank of
Lucena, 14 this Court held that a real action is one
where the plaintiff seeks the recovery of real
property or, as indicated in section 2(a) of Rule 4
(now Section 1, Rule 4 of the 1997 Rules of Civil
Procedure), a real action is an action affecting title to
or recovery of possession of real property.
It has also been held that where a complaint is
entitled as one for specific performance but
nonetheless prays for the issuance of a deed of sale
for a parcel of land, its primary objective and nature
is one to recover the parcel of land itself and, thus, is
deemed a real action. In such a case, the action must
be filed in the proper court where the property is
located:
In this Court, the appellant insists that her action is
one for specific performance, and, therefore,
personal and transitory in nature.
This very issue was considered and decided by this
Court in the case of Manuel B. Ruiz vs. J.M. Tuason &
Co., Inc. et al., L-18692, promulgated 31 January
1963. There the Court, by unanimous vote of all the
Justices, held as follows:
This contention has no merit. Although appellants
complaint is entitled to be one for specific
performance, yet the fact that he asked that a deed
of sale of a parcel of land situated in Quezon City be
issued in his favor and that a transfer certificate of
title covering said parcel of land be issued to him
shows that the primary objective and nature of the
action is to recover the parcel of land itself because
to execute in favor of appellant the conveyance
requested there is need to make a finding that he is
the owner of the land which in the last analysis
resolves itself into an issue of ownership. Hence, the
action must be commenced in the province where the
property is situated pursuant to Section 3, Rule 5, of
the Rules of Court, which provides that actions
affecting title to or recovery of possession of real
property shall be commenced and tried in the
province where the property or any part thereof
lies.15
cräläwvirtual ibrä ry
In the case at bar, therefore, the complaint filed with
the trial court was in the nature of a real action,
although ostensibly denominated as one for specific
performance. Consequently, the basis for
determining the correct docket fees shall be the
assessed value of the property, or the estimated
value thereof as alleged by the claimant. Rule 141,
Section 7, of the Rules of Court, as amended by A.M.
No. 00-2-01-SC, provides:
Section 7. Clerks of Regional Trial Courts. - x x x
(b) xxx
In a real action, the assessed value of the property,
or if there is none, the estimated value thereof shall
be alleged by the claimant and shall be the basis in
computing the fees.
We are not unmindful of our pronouncement in the
case of Sun Insurance, 16 to the effect that in case
the filing of the initiatory pleading is not accompanied
by payment of the docket fee, the court may allow
payment of the fee within a reasonable time but in no
case beyond the applicable prescriptive period.
However, the liberal interpretation of the rules
relating to the payment of docket fees as applied in
the case of Sun Insurance cannot apply to the instant
case as respondents have never demonstrated any
willingness to abide by the rules and to pay the
correct docket fees. Instead, respondents have
stubbornly insisted that the case they filed was one
for specific performance and damages and that they
actually paid the correct docket fees therefor at the
time of the filing of the complaint. Thus, it was stated
in the case of Sun Insurance: 17 cräläwvirt ualib rä ry
The principle in Manchester could very well be
applied in the present case. The pattern and the
intent to defraud the government of the docket fee
due it is obvious not only in the filing of the original
complaint but also in the filing of the second
amended complaint.
However, in Manchester, petitioner did not pay any
additional docket fee until the case was decided by
this Court on May 7, 1987. Thus, in Manchester, due
to the fraud committed on the government, this
Court held that the court a quo did not acquire
jurisdiction over the case and that the amended
complaint could not have been admitted inasmuch as
the original complaint was null and void.
In the present case, a more liberal interpretation of
the rules is called for considering that,
unlike Manchester, private respondent demonstrated
his willingness to abide by the rules by paying the
additional docket fees as required. The promulgation
of the decision in Manchester must have had that
sobering influence on private respondent who thus
paid the additional docket fee as ordered by the
respondent court. It triggered his change of stance
by manifesting his willingness to pay such additional
docket fee as may be ordered.
Respondents accuse petitioners of forum-shopping
when they filed two petitions before the Court of
Appeals. Petitioners, on the other hand, contend that
there was no forum-shopping as there was no
identity of issues or identity of reliefs sought in the
two petitions.
We agree with petitioners that they are not guilty of
forum-shopping. The deplorable practice of forum-
shopping is resorted to by litigants who, for the
purpose of obtaining the same relief, resort to two
different fora to increase his or her chances of
obtaining a favorable judgment in either one. In the
case of Golangco v. Court of Appeals, 18 we laid down
the following test to determine whether there is
forum-shopping:
Ultimately, what is truly important to consider in
determining whether forum-shopping exists or not is
the vexation caused the courts and the parties-
litigant by a person who asks different courts and/or
administrative agencies to rule on the same or
related causes and/or grant the same or substantially
the same reliefs, in the process creating the
possibility of conflicting decisions being rendered by
the different fora upon the same issues.
In sum, two different orders were questioned, two
distinct causes of action and issues were raised, and
two objectives were sought; thus, forum shopping
cannot be said to exist in the case at bar.
Likewise, we do not find that there is forum-shopping
in the case at bar. The first petition, docketed as CA-
G.R. SP. No. 49084, which is now the subject of the
instant petition, involved the propriety of the
affirmative defenses relied upon by petitioners in Civil
Case No. CEB-21854. The second petition, docketed
as CA-G.R. SP No. 54985, raised the issue of whether
or not public respondent Judge Dicdican was guilty of
manifest partiality warranting his inhibition from
further hearing Civil Case No. CEB-21854.
More importantly, the two petitions did not seek the
same relief from the Court of Appeals. In CA-G.R. SP.
No. 49084, petitioners prayed, among others, for the
annulment of the orders of the trial court denying
their motion for preliminary hearing on the
affirmative defenses in Civil Case No. CEB-21854. No
such reliefs are involved in the second petition,
where petitioners merely prayed for the issuance of
an order enjoining public respondent Judge Dicdican
from further trying the case and to assign a new
judge in his stead.
True, the trial court has the discretion to conduct a
preliminary hearing on affirmative defenses. In the
case at bar, however, the trial court committed a
grave abuse of its discretion when it denied the
motion for preliminary hearing. As we have discussed
above, some of these defenses, which petitioners
invoked as grounds for the dismissal of the action,
appeared to be indubitable, contrary to the
pronouncement of the trial court. Indeed, the abuse
of discretion it committed amounted to an evasion of
positive duty or virtual refusal to perform a duty
enjoined by law, or to act at all in contemplation of
law, 19 which would have warranted the extraordinary
writ of certiorari. Hence, the Court of Appeals erred
when it dismissed the petition for certiorari filed by
petitioners.
WHEREFORE , in view of the foregoing, the instant
petition is GRANTED. This case is REMANDED to the
Regional Trial Court of Cebu City, Branch 11, which is
directed to forthwith conduct the preliminary hearing
on the affirmative defenses in Civil Case No. CEB-
21854.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 175796 July 22, 2015
BPI FAMILY SAVINGS BANK INC., Petitioner,
vs.
SPOUSES BENEDICTO & TERESITA YUJUICO, Respondents,
DECISION
BERSAMIN, J.:
An action to recover the deficiency after extrajudicial foreclosure of a real
property mortgage is a personal action because it does not affect title to or
possession of real property, or any interest therein.
The Case
This appeal is taken by the petitioner to overturn the decision promulgated on
March 31, 2006,1 whereby the Court of Appeals (CA) set aside the orders
issued by the Regional Trial Court, Branch 60, in Makati City (Makati RTC) on
October 17, 2003 2 and February 1, 2005 3 dismissing
their action against the respondents to recover the deficiency after the
extrajudicial foreclosure of their mortgage (Civil Case No.03-450) on the
ground of improper venue.
Antecedents
On August 22, 1996, the City of Manila filed a complaint against the
respondents for the expropriation of five parcels of land located in Tondo,
Manila and registered in the name of respondent Teresita Yujuico. Two of the
parcels of land, covered by Transfer Certificate of Title (TCT) No. 261331 and
TCT No. 261332, were previously mortgaged to Citytrust Banking Corporation,
the petitioner's predecessor-in-interest, under a First Real Estate Mortgage
Contract.4On June 30, 2000, the Regional Trial Court in Manila (Manila RTC)
rendered its judgment declaring the five parcels of land expropriated for public
use. The judgment became final and executory on January 28, 2001 and was
entered in the book of entries of judgment on March 23, 2001.5 The petitioner
subsequently filed a Motion to Intervene in Execution with Partial Opposition to
Defendant's Request to Release, but the RTC denied the motion for having
been "filed out of time." Hence, the petitioner decided to extrajudicially
foreclose the mortgage constituted on the two parcels of land subject of the
respondents' loan. After holding the public auction, the sheriff awarded the two
lots to the petitioner as the highest bidder at ₱10, 000, 000.00. 6
Claiming a deficiency amounting to Pl8, 522155.42, the pet1t1oner sued the
respondents to recover such deficiency in the Makati RTC (Civil Case No. 03-
450). The respondents moved to dismiss the complaint on several grounds,
1âwphi1
namely: that the suit was barred by res judicata; that the complaint stated no
cause of action; and that the plaintiffs claim had been waived, abandoned, or
extinguished. 7
In its order issued on October 17, 2003, the Makati RTC denied the
respondents' motion to dismiss, ruling that there was no res judicata; that the
complaint stated a sufficient cause of action to recover the deficiency; and that
there was nothing to support the claim that the obligation had been abandoned
or extinguished apart from the respondents' contention that the properties had
been subjected to expropriation by the City of Manila.8
On November 4, 2003, the respondents moved for reconsideration, reiterating
their grounds earlier made in their motion to dismiss. 9
In turn, the petitioner adopted its comment/opposition to the motion to
dismiss. 10
The respondents then filed their reply, 11 in which they raised for the first time
their objection on the ground of improper venue. They contended that the
action for the recovery of the deficiency, being a supplementary action of the
extrajudicial foreclosure proceedings, was a real action that should have been
brought in the Manila RTC because Manila was the place where the properties
were located.12
On February 1, 2005, the Makati RTC denied the respondents' motion for
reconsideration for its lack of merit; and held on the issue of improper venue
that:
It would be improper for this Court to dismiss the plaintiffs complaint on the
ground of improper venue, assuming that the venue is indeed improperly laid,
since the said ground was not raised in the defendant's Motion to Dismiss. On
this point, it was held in the case of Malig, et al. vs. Bush, L 22761, May 31,
1969 that "an action cannot be dismissed on a ground not alleged in the
motion therefore even if said ground, e.g., prescription, is provided in Rule
16. 13
Decision of the CA
Not satisfied, the respondents assailed the orders dated October 1 7, 2003 and
February 1, 2005 by petition for certiorari.14 They submitted for consideration by
the CA the following issues, namely:
x x x (WHETHER OR NOT) RESPONDENT TRIAL COURT COMMITTED
GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF
JURISDICTION WHEN IT ISSUED ITS ASSAILED ORDERS CONSIDERING
THAT:
A THE COMPLAINT A QUO IS BARRED BY RES JUDICATA.
B. THE COMPLAINT STATED NO CAUSE OF ACTION.
C. PRIVATE RESPONDENT'S CLAIM HAS BEEN WAIVED,
ABANDONED OR OTHERWISE EXTINGUISHED.
D. VENUE WAS IMPROPERLY LAID. 15
On March 31, 2006, the CA granted the petition for certiorari of the
respondents on the basis of the fourth issue, opining:
xxxx
Thus, a suit for recovery of the deficiency after the foreclosure of a mortgage is
in the nature of a mortgage action because its purpose is precisely to enforce
the mortgage contract; it is upon a written contract and upon an obligation of
the mortgage-debtor to pay the deficiency which is created by law. As such,
the venue of an action for recovery of deficiency must necessarily be the same
venue as that of the extrajudicial foreclosure of mortgage.
xxxx
In this regard, We take note that the parcels of land subject of the mortgage
contract are located in Tondo, Manila, under Transfer Certificates of Title Nos.
216331 and 216332. On the other hand, the extrajudicial foreclosure of the real
estate mortgage took place at the R TC of Manila on January 28, 2003. Thus,
the suit for judgment on the deficiency filed by respondent BPI against
petitioners Yujuico, being an action emanating from the foreclosure of the real
estate mortgage contract between them, must necessarily be filed also at the
RTC of Manila, not at the RTC of Makati.
x x x x 16
The CA denied the respondents' Motion for Partial Reconsideration and the
petitioner's Partial Motion for Reconsideration on December 7, 2006.17
Issues
Hence, this appeal by the petitioner, to assail the CA's dismissal of Civil Case
No. 03-450 on the ground of improper venue upon the following
grounds,18 namely:
 I.
WHETHER OR NOT THE HONORA.BLE COURT OF APPEALS' DENIAL OF
THE PETITIONER'S PARTIAL MOTION FOR RECONSIDERATION ON THE
GROUND OF IMPROPER VENUE AS A RESULT DISMISSED THE
COMPLAINT FOR SUM OF MONEY IS CONTRARY TO LAW.
II.
WHETHER OR NOT THE HONORABLE COURT OF APPEALS['] ACT OF
APPRECIATING THE ADDITIONAL GROUND OF IMPROPER VENUE,
ONLY RAISED IN THE MOTION FOR RECONSIDERATION FILED IN THE
LOWER COURT AFTER IT DENIED RESPONDENTS' MOTION TO DISMISS,
IS CONTRARY TO LAW AND JURISPRUDENCE.19
Ruling of the Court
We grant the petition for review on certiorari.
It is basic that the venue of an action depends on whether it is a real or a
personal action. The determinants of whether an action is of a real or a
personal nature have been fixed by the Rules of Court and relevant
jurisprudence. According to Section 1, Rule 4 of the Rules of Court, a real
action is one that affects title to or possession of real property, or an interest
therein. Thus, an action for partition or condemnation of, or foreclosure of
mortgage on, real property is a real action. 20 The real action is to be
commenced and tried in the proper court having jurisdiction over the area
wherein the real property involved, or a portion thereof, is situated, which
explains why the action is also referred to as a local action. In contrast, the
Rules of Court declares all other actions as personal actions. 21 such actions
may include those brought for the recovery of personal property, or for the
enforcement of some contract or recovery of damages for its breach, or for the
recovery of damages for the commission of an injury to the person or
property.22 The venue of a personal action is the place where the plaintiff or any
of the principal plaintiffs resides, or where the defendant or any of the principal
defendants resides, or in the case of a non-resident defendant where he may
be found, at the election of the plaintiff, 23 for which reason the action is
considered a transitory one.
Based on the distinctions between real and personal actions, an action to
recover the deficiency after the extrajudicial foreclosure of the real property
mortgage is a personal action, for it does not affect title to or possession of real
property, or any interest therein.
It is true that the Court has said in Caltex Philippines, Inc. v. Intermediate
Appellate Court 24 that "a suit for the recovery of the deficiency after the
foreclosure of a mortgage is in the nature of a mortgage action because its
purpose is precisely to enforce the mortgage contract." However, the CA erred
in holding, upon the authority of Caltex Philippines, Inc., that the venue of Civil
Case No. 03 450 must necessarily be Manila, the same venue as that of the
extrajudicial foreclosure of mortgage. An examination of Caltex Philippines,
Inc. reveals that the Court was thereby only interpreting the prescriptive period
within which to bring the suit for the recovery of the deficiency after the
foreclosure of the mortgage, and was not at all ruling therein on the venue of
such suit or on the nature of such suit being either a real or a personal action.
Given the foregoing, the petitioner correctly brought Civil Case No.03-450 in
the Makati RTC because Makati was the place where the main office of the
petitioner was located.
1avv phi1
Moreover, the Makati RTC observed, and the observation is correct in our
view, that it would be improper to dismiss Civil Case No. 03-450 on the ground
of improper venue, assuming that the venue had been improperly laid,
considering that the respondents had not raised such ground in their Motion to
Dismiss. As earlier indicated, they came to raise the objection of improper
venue for the first time only in their reply to the petitioner's comment on their
Motion for Reconsideration. They did so belatedly.
We underscore that in civil proceedings, venue is procedural, not jurisdictional,
and may be waived by the defendant if not seasonably raised either in a
motion to dismiss or in the answer.25 Section 1, Rule 9 of the Rules of Court
thus expressly stipulates that defenses and objections not pleaded either in a
motion to dismiss or in the answer are deemed waived. As it relates to the
place of trial, indeed, venue is meant to provide convenience to the parties,
rather than to restrict their access to the courts.26 In other words, unless the
defendant seasonably objects, any action may be tried by a court despite its
being the improper venue.
WHEREFORE, we GRANT the petition for review on certiorari; REVERSE and
SET ASIDE the decision promulgated by the Court of Appeals on March 31,
2006; REINSTATE the orders dated October 17, 2003 and February 1, 2005
of the Regional Trial Court, Branch 60, in Makati City; and ORDER the
respondents to pay the costs of suit.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 204444 January 14, 2015
VIRGILIO C. BRIONES, Petitioner,
vs.
COURT OF APPEALS and CASH ASIA CREDIT
CORPORATION, Respondents.
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for certiorari1 are the Decision2 dated March 5, 2012
and the Resolution3 dated October 4, 2012 of the Court of Appeals (CA) in CA-
G.R. SP No. 117474, which annulled the Orders dated September 20,
20104 and October 22, 20105 of the Regional Trial Court of Manila, Branch 173
(RTC) in Civil Case No. 10-124040, denying private respondent Cash Asia
Credit Corporation's (Cash Asia) motion to dismiss on the ground of improper
venue.
The Facts
The instant case arose from a Complaint6 dated August 2, 2010 filed by Virgilio
C. Briones (Briones) for Nullity of Mortgage Contract, Promissory Note, Loan
Agreement, Foreclosure of Mortgage, Cancellation of Transfer Certificate of
Title (TCT) No. 290846, and Damages against Cash Asia before the RTC.7 In
his complaint, Briones alleged that he is the owner of a property covered by
TCT No. 160689 (subject property), and that, on July 15, 2010, his sister
informed him that his property had been foreclosed and a writ of possession
had already been issued in favor of Cash Asia.8 Upon investigation, Briones
discovered that: (a) on December 6, 2007, he purportedly executed a
promissory note,9 loan agreement,10 and deed of real estate
mortgage11 covering the subject property (subject contracts) in favor of Cash
Asia in order to obtain a loan in the amount of ₱3,500,000.00 from the
latter;12 and (b) since the said loan was left unpaid, Cash Asia proceeded to
foreclose his property.13 In this relation, Briones claimed that he never
contracted any loans from Cash Asia as he has been living and working in
Vietnam since October 31, 2007. He further claimed that he only went back to
the Philippines on December 28, 2007 until January 3, 2008 to spend the
holidays with his family, and that during his brief stay in the Philippines, nobody
informed him of any loan agreement entered into with Cash Asia. Essentially,
Briones assailed the validity of the foregoing contracts claiming his signature to
be forged.14
For its part, Cash Asia filed a Motion to Dismiss15 dated August 25, 2010,
praying for the outright dismissal of Briones’s complaint on the ground of
improper venue.16 In this regard, Cash Asia pointed out the venue stipulation in
the subject contracts stating that "all legal actions arising out of this notice in
connection with the Real Estate Mortgage subject hereof shall only be brought
in or submitted tothe jurisdiction of the proper court of Makati City."17In view
thereof, it contended that all actions arising out of the subject contracts may
only be exclusively brought in the courts of Makati City, and as such, Briones’s
complaint should be dismissed for having been filed in the City of Manila.18
In response, Briones filed an opposition,19 asserting, inter alia, that he should
not be covered by the venue stipulation in the subject contracts as he was
never a party therein. He also reiterated that his signatures on the said
contracts were forgeries.20
The RTC Ruling
In an Order21 dated September 20, 2010, the RTC denied Cash Asia’s motion
to dismiss for lack of merit. In denying the motion, the RTC opined that the
parties must be afforded the right to be heard in view of the substance of
Briones’s cause of action against Cash Asia as stated in the complaint.22
Cash Asia moved for reconsideration23 which was, however, denied in an
Order24 dated October 22, 2010. Aggrieved, it filed a petition for
certiorari25 before the CA.
The CA Ruling
In a Decision26 dated March 5, 2012, the CA annulled the RTC Orders, and
accordingly, dismissed Briones’s complaint without prejudice to the filing of the
same before the proper court in Makati City.27 It held that the RTC gravely
abused its discretion in denying Cash Asia’s motion to dismiss, considering
that the subject contracts clearly provide that actions arising therefrom should
be exclusively filed before the courts of Makati City only.28 As such, the CA
concluded that Briones’s complaint should have been dismissed outright on
the ground of improper venue,29this, notwithstanding Briones’s claim of forgery.
Dissatisfied, Briones moved for reconsideration,30 which was, however, denied
in a Resolution31 dated October 4, 2012, hence, this petition.
The Issue Before the Court
The primordial issue for the Court’s resolution is whether or not the CA gravely
abused its discretion in ordering the outright dismissal of Briones’s complaint
on the ground of improper venue.
The Court’s Ruling
The petition is meritorious.
At the outset, the Court stresses that "[t]o justify the grant of the extraordinary
remedy of certiorari, [the petitioner] must satisfactorily show that the court or
quasi-judicial authority gravely abused the discretion conferred upon it. Grave
abuse of discretion connotes judgment exercised in a capricious and whimsical
manner that is tantamount to lack of jurisdiction. To be considered ‘grave,’
discretion must be exercised in a despotic manner by reason of passion or
personal hostility, and must be so patent and gross as to amount to an evasion
of positive duty or to a virtual refusal to perform the duty enjoined by or to act
at all in contemplation of law."32 Guided by the foregoing considerations, the
Court finds that the CA gravely abused its discretion in ordering the outright
dismissal of Briones’s complaint against Cash Asia, without prejudice to its re-
filing before the proper court in Makati City.
Rule 4 of the Rules of Court governs the rules on venue of civil actions, to wit:
Rule 4
VENUE OF ACTIONS
SECTION 1. Venue of real actions. — Actions affecting title to or possession of
real property, or interest therein, shall be commenced and tried in the proper
court which has jurisdiction over the area wherein the real property involved, or
a portion thereof, is situated.
Forcible entry and detainer actions shall be commenced and tried in the
municipal trial court of the municipality or city wherein the real property
involved, or a portion thereof, is situated.
SEC. 2. Venue of personal actions. — All other actions 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, or in the case of a
non-resident defendant where he may be found, at the election of the plaintiff.
SEC. 3. Venue of actions against nonresidents. — If any of the defendants
does not resideand is not found in the Philippines, and the action affects the
personal status of the plaintiff, or any property of said defendant located in the
Philippines,the action may be commenced and tried in the court of the place
where the plaintiff resides, or where the property or any portion thereof is
situated or found.
SEC. 4. When Rule not applicable. — This Rule shall not apply –
(a) In those cases where a specific rule or law provides otherwise; or
(b) Where the parties have validly agreed in writing before the filing of
the action on the exclusive venue thereof.
Based therefrom, the general rule is that the venue of real actions is the court
which has jurisdiction over the area wherein the real property involved, or a
portion thereof, is situated; while the venue of personal actions is the court
which has jurisdiction where the plaintiff or the defendant resides, at the
election of the plaintiff. As an exception, jurisprudence in Legaspi v. Rep. of the
Phils.33 instructs that the parties, thru a written instrument, may either introduce
another venue where actions arising from such instrument may be filed, or
restrict the filing of said actions in a certain exclusive venue, viz.:
The parties, however, are not precluded from agreeing in writing on an
exclusive venue, as qualified by Section 4 of the same rule. Written stipulations
as to venue may be restrictive in the sense that the suit may be filed only in the
place agreed upon, or merely permissive in that the parties may file their
suitnot only in the place agreed upon but also in the places fixed by law. As in
any other agreement, what is essential is the ascertainment of the intention of Trial Court of Manila, Branch 173 in Civil Case No. 10-124040 are
the parties respecting the matter. REINSTATED.

As regards restrictive stipulations on venue, jurisprudence instructs that it must SO ORDERED.

be shown thatsuch stipulation is exclusive. In the absence of qualifying or
1âw phi1

restrictive words, such as "exclusively," "waiving for this purpose any other
venue," "shall only" preceding the designation of venue, "to the exclusion of
the other courts," or words of similar import, the stipulation should be deemed
as merely an agreement on an additional forum,not as limiting venue to the
specified place.34 (Emphases and underscoring supplied)

In this relation, case law likewise provides that in cases where the complaint
assails only the terms, conditions, and/or coverage of a written instrument and
not its validity, the exclusive venue stipulation contained therein shall still be
binding on the parties, and thus, the complaint may be properly dismissed on
the ground of improper venue.35 Conversely, therefore, a complaint directly
assailing the validity of the written instrument itself should not be bound by the
exclusive venue stipulation contained therein and should be filed in
accordance with the general rules on venue. To be sure, it would be inherently
consistent for a complaint of this nature to recognize the exclusive venue
stipulation when it, in fact, precisely assails the validity of the instrument in
which such stipulation is contained.

In this case, the venue stipulation found in the subject contracts is indeed
restrictive in nature, considering that it effectively limits the venue of the
actions arising therefrom to the courts of Makati City. However, it must be
emphasized that Briones' s complaint directly assails the validity of the subject
contracts, claiming forgery in their execution. Given this circumstance, Briones
cannot be expected to comply with the aforesaid venue stipulation, as his
compliance therewith would mean an implicit recognition of their validity.
Hence, pursuant to the general rules on venue, Briones properly filed his
complaint before a court in the City of Manila where the subject property is
located.

In conclusion, the CA patently erred and hence committed grave abuse of

discretion in dismissing Briones's complaint on the ground of improper venue.

WHEREFORE, the petition is GRANTED. Accordingly, the Decision dated

March 5, 2012 and the Resolution dated October 4, 2012 of the Court of
Appeals in CA-G.R. SP No. 117474 are hereby ANNULLED and SET ASIDE.
The Orders dated September 20, 2010 and October 22, 2010 of the Regional
G.R. No. 151037 June 23, 2005
SAN MIGUEL CORPORATION, petitioner,
vs.
TROY FRANCIS L. MONASTERIO, respondent.
RESOLUTION
QUISUMBING, J.:
This appeal by certiorari seeks to reverse and set aside the D E C I S I O
N1 dated July 16, 2001, and the Resolution2 dated November 27, 2001, of the
Court of Appeals in CA-G.R. SP No. 52622. The Court of Appeals dismissed
the special civil action for certiorari filed by San Miguel Corporation
(SMC)3 assailing the Orders4 of the Regional Trial Court of Naga City, Branch
20, which denied its Motion to Dismiss on the ground of improper venue and
the subsequent Motion for Reconsideration in Civil Case No. RTC’98-4150.
The facts are as follows:
On August 1, 1993, petitioner SMC entered into an Exclusive Warehouse
Agreement5 (hereafter EWA for brevity) with SMB Warehousing Services
(SMB), represented by its manager, respondent Troy Francis L. Monasterio.
SMB undertook to provide land, physical structures, equipment and personnel
for storage, warehousing and related services such as, but not limited to,
segregation of empty bottles, stock handling, and receiving SMC products for
its route operations at Sorsogon, Sorsogon and Daet, Camarines Norte.
The agreement likewise contained a stipulation on venue of actions, to wit:
26. GENERAL PROVISIONS
...
b. Should it be necessary that an action be brought in court to enforce the
terms of this Agreement or the duties or rights of the parties herein, it is agreed
that the proper court should be in the courts of Makati or Pasig, Metro
Manila, to the exclusion of the other courts at the option of the
COMPANY.6[Underscoring supplied.]
...
On November 3, 1998, respondent Monasterio, a resident of Naga City, filed a
complaint docketed as Civil Case No. RTC’98-4150 for collection of sum of
money against petitioner before the Regional Trial Court of Naga City, Branch
20.
In his Complaint,7 Monasterio claimed ₱900,600 for unpaid cashiering fees.
He alleged that from September 1993 to September 1997 and May 1995 to
November 1997, aside from rendering service as warehouseman, he was
given the additional task of cashiering in SMC’s Sorsogon and Camarines
Norte sales offices for which he was promised a separate fee. He claims that
of approximately 290 million pesos in cash and checks of the sales office and
the risks of pilferage, theft, robbery and hold-up, he had assumed what
amounted to approximately 35 million pesos per annum for Sorsogon,
Sorsogon, and 60 million pesos for Daet, Camarines Norte. He also said that
he hired personnel for the job. Respondent added that it was only on
December 1, 1997, that petitioner SMC started paying him ₱11,400 per month
for his cashiering services.
Monasterio demanded ₱82,959.32 for warehousing fees, ₱11,400 for
cashiering fees for the month of September, 1998, as well as exemplary
damages, and attorney’s fees in the amount of ₱500,000 and ₱300,000,
respectively.8
On November 19, 1998, SMC filed a Motion to Dismiss9 on the ground of
improper venue. SMC contended that respondent’s money claim for alleged
unpaid cashiering services arose from respondent’s function as warehouse
contractor thus the EWA should be followed and thus, the exclusive venue of
courts of Makati or Pasig, Metro Manila is the proper venue as provided under
paragraph 26(b) of the Exclusive Warehouse Agreement. SMC cites in its favor
Section 4(b) in relation to Section 2 of Rule 410 of the Rules of Court allowing
agreement of parties on exclusive venue of actions.
Respondent filed an Opposition11 contending that the cashiering service he
rendered for the petitioner was separate and distinct from the services under
the EWA. Hence, the provision on venue in the EWA was not applicable to
said services. Hence, respondent insists that in accordance with Section 2 of
Rule 4 of the Rules of Court the venue should be in Naga City, his place of
residence.
On February 22, 1999, the Regional Trial Court, of Naga City, Branch 20
issued an Order12 denying petitioner’s motion to dismiss. The court held that
the services agreed upon in said contract is limited to warehousing services
and the claim of plaintiff in his suit pertains to the cashiering services rendered
to the defendant, a relationship which was not documented, and is certainly a
contract separate and independent from the exclusive warehousing
agreements.13
SMC’s subsequent Motion for Reconsideration was likewise denied.14 While
the motion was pending, the respondent filed an Amended
Complaint15 deleting his claim for unpaid warehousing and cashiering fees but
increasing the exemplary damages from ₱500,000 to ₱1,500,000.16
Petitioner elevated the controversy to the Court of Appeals by way of a special
civil action for certiorari with a prayer for the issuance of a Temporary
Restraining Order and/or Writ of Preliminary Injunction, imputing grave abuse
of discretion on the RTC Naga City for denying its motion to dismiss and
subsequent motion for reconsideration.
On June 11, 1999, during the pendency of the certiorari petition SMC filed
before the trial court an answer ex abundanti cautela17 with a compulsory
counterclaim for moral and exemplary damages and attorney’s fees. SMC
averred lack of cause of action, payment, waiver, abandonment and
extinguishment.
In its decision dated July 16, 2001, the Court of Appeals found respondent’s
claim for cashiering services inseparable from his claim for warehousing
services, thus, the venue stipulated in the EWA is the proper venue. However,
the Court of Appeals noted that prior to the filing of SMC’s petition, respondent
Monasterio filed an amended complaint to which SMC filed an answer. Thus,
the Court of Appeals dismissed San Miguel’s petition for certiorari, stating that
the case was already moot and academic.
Petitioner filed a motion for reconsideration which was denied by the Court of
Appeals. Hence, this petition wherein petitioner raises the following as
issues:18
1. Whether or not this Honorable Court may review the finding of the
Court of Appeals that the Complaint and Amended Complaint were
filed in the wrong venue.
2. Assuming arguendo that this Honorable Court may review the
finding of the Court of Appeals that the Complaint and Amended
Complaint were filed in the wrong venue, whether or not such finding
should be reversed.
3. Whether or not the Court of Appeals gravely erred in ruling that
SMC’s Petition For Certiorari has become moot and academic in view
of the filing of Monasterio’s Amended Complaint and SMC’s Answer
(Ex Abundanti Cautela).19
In our view, two issues only require resolution: (1) Did the RTC of Naga City
err in denying the motion to dismiss filed by SMC alleging improper venue? (2)
Did the CA gravely err in ruling that SMC’s petition for certiorari has become
moot?
On disputes relating to the enforcement of the rights and duties of the
contracting parties, the venue stipulation in the EWA should be construed as
mandatory. Nothing therein being contrary to law, morals, good custom or
public policy, this provision is binding upon the parties.20 The EWA stipulation
on venue is clear and unequivocal, thus it ought to be respected.
However, we note that the cause of action in the complaint filed by the
respondent before the RTC of Naga was not based on the EWA, but concern
services not enumerated in the EWA. Records show also that previously,
respondent received a separate consideration of ₱11,400 for the cashiering
service he rendered to SMC. Moreover, in the amended complaint, the
respondent’s cause of action was specifically limited to the collection of the
sum owing to him for his cashiering service in favor of SMC. He already
omitted petitioner’s non-payment of warehousing fees. As previously ruled,
allegations in the complaint determines the cause of action or the nature of the
case.21Thus, given the circumstances of this case now before us, we are
constrained to hold that it would be erroneous to rule, as the CA did, that the
collection suit of the respondent did not pertain solely to the unpaid cashiering
services but pertain likewise to the warehousing services.22
Exclusive venue stipulation embodied in a contract restricts or confines parties
thereto when the suit relates to breach of the said contract. But where the
exclusivity clause does not make it necessarily all encompassing, such that
even those not related to the enforcement of the contract should be subject to
the exclusive venue, the stipulation designating exclusive venues should be
strictly confined to the specific undertaking or agreement. Otherwise, the basic
principles of freedom to contract might work to the great disadvantage of a
weak party-suitor who ought to be allowed free access to courts of justice.
Restrictive stipulations are in derogation of the general policy of making it more
convenient for the parties to institute actions arising from or in relation to their
agreements.23 Thus, the restriction should be strictly construed as relating
solely to the agreement for which the exclusive venue stipulation is embodied.
Expanding the scope of such limitation on a contracting party will create
unwarranted restrictions which the parties might find unintended or worse,
arbitrary and oppressive.
Moreover, since convenience is the raison d’etre of the rules on
venue,24 venue stipulation should be deemed merely permissive, and that
interpretation should be adopted which most serves the parties’
convenience.25Contrawise, the rules mandated by the Rules of Court should
govern.26 Accordingly, since the present case for the collection of sum of
money filed by herein respondent is a personal action,27 we find no compelling
reason why it could not be instituted in the RTC of Naga City, the place where
plaintiff resides.
Having settled the issue on venue, we need not belabor the issue of whether
SMC’s petition has become moot.
WHEREFORE, it is hereby ruled that no reversible error was committed by the
Regional Trial Court of Naga City, Branch 20, in denying petitioner’s motion to
dismiss. Said RTC is the proper venue of the amended complaint for a sum of
money filed by respondent against petitioner San Miguel Corporation, in
connection with his cashiering services. The case is hereby REMANDED to
the RTC of Naga City, Branch 20, for further proceedings on respondent’s
amended complaint, without further delay.
Costs against petitioner.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
A.M. No. 99-10-05-0 December 14, 1999
(Amended by A.M. 99-10-05-0, August 7, 2001)
PROCEDURE IN EXTRA-JUDICIAL FORECLOSURE OF MORTGAGE
In line with the responsibility of an Executive Judge under Administrative Order
No. 6, dated June 30, 1975, for the management of courts within his
administrative area, included in which is the task of supervising directly the
work of the Clerk of Court, who is also the Ex Officio Sheriff, and his staff, and
the issuance of commissions to notaries public and enforcement of their duties
under the law, the following procedures are hereby prescribed in extrajudicial
foreclosure of mortgages:
1. All applications for extra-judicial foreclosure of mortgage whether
under the direction of the sheriff or a notary public, pursuant to Act
3135, as amended by Act 4118, and Act 1508, as amended, shall be
filed with the Executive Judge, through the Clerk of Court who is also
the Ex-Officio Sheriff.
2. Upon receipt of an application for extra-judicial foreclosure of
mortgage, it shall be the duty of the Clerk of Court to:
a) receive and docket said application and to stamp thereon
the corresponding file number, date and time of filing;
b) collect the filing fees therefor and issue the corresponding
official receipt;
c) examine, in case of real estate mortgage foreclosure,
whether the applicant has complied with all the requirements
before the public auction is conducted under the direction of
the sheriff or a notary public, pursuant to Sec. 4 of Act 3135, as
amended;
d) sign and issue the certificate of sale, subject to the approval
of the Executive Judge, or in his absence, the Vice-Executive
Judge; and
e) after the certificate of sale has been issued to the highest
bidder, keep the complete records, while awaiting any
redemption within a period of one (1) year from date of
registration of the certificate of sale with the Register of Deeds
concerned, after which the records shall be archived.
Where the application concerns the extrajudicial foreclosure of
mortgages of real estates and/or chattels in different locations covering
one indebtedness, only one filing fee corresponding to such
indebtedness shall be collected. The collecting Clerk of Court shall,
apart from the official receipt of the fees, issue a certificate of payment
 indicating the amount of indebtedness, the filing fees collected, the
mortgages sought to be foreclosed, the real estates and/or chattels
mortgaged and their respective locations, which certificate shall serve
the purpose of having the application docketed with the Clerks of Court
of the places where other properties are located and of allowing the
extrajudicial foreclosures to proceed thereat.
3. The notices of auction sale in extrajudicial foreclosure for publication
by the sheriff or by a notary public shall be published in a newspaper of
general circulation pursuant to Section 1, Presidential Decree No.
1709, dated January 26, 1977, and non-compliance therewith shall
constitute a violation of Section 6 thereof.
4. The Executive Judge shall, with the assistance of the Clerk of Court,
raffle application for extrajudicial foreclosure of mortgage under the
direction of the sheriff among all sheriffs, including those assigned to
the Office of the Clerk of Court and Sheriffs IV assigned in the
branches.
5. No auction sale shall be held unless there are at least two (2)
participating bidders, otherwise the sale shall be postponed to another
date. If on the new date set for the sale there shall not be at least two
bidders, the sale shall then proceed. The names of the bidders shall be
reported by the sheriff or the notary public who conducted the sale to
the Clerk of Court before the issuance of the certificate of sale.
This Resolution amends or modifies accordingly Administrative Order No. 3
issued by then Chief Justice Enrique M. Fernando on 19 October 1984 and
Administrative Circular No. 3-98 issued by the Chief Justice Andres R.
Narvasa on 5 February 1998.
The Court Administrator may issue the necessary guidelines for the effective
enforcement of this Resolution.
The Clerk of Court shall cause the publication of this Resolution in a
newspaper of general circulation not later than 27 December 1999 and furnish
copies thereof to the Integrated Bar of the Philippines.
This Resolution shall take effect on the fifteenth day of January year 2000.
Enacted this 14th day of December 1999 in the City of Manila.
Davide, Jr., C.J., Bellosillo, Mendoza, Quisumbing, Melo, Vitug, Panganiban,
Purisima, Puno, Kapunan, Pardo, Buena, Ynares-Santiago, Gonzaga-Reyes
and De Leon, Jr., JJ.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 192877 March 23, 2011
SPOUSES HERMES P. OCHOA and ARACELI D. OCHOA, Petitioners,
vs.
CHINA BANKING CORPORATION, Respondent.
RESOLUTION
NACHURA, J.:
For resolution is petitioners’ motion for reconsideration1 of our January 17,
2011 Resolution2 denying their petition for review on certiorari3 for failing to
sufficiently show any reversible error in the assailed judgment4 of the Court of
Appeals (CA).
Petitioners insist that it was error for the CA to rule that the stipulated exclusive
venue of Makati City is binding only on petitioners’ complaint for Annulment of
Foreclosure, Sale, and Damages filed before the Regional Trial Court of
Parañaque City, but not on respondent bank’s Petition for Extrajudicial
Foreclosure of Mortgage, which was filed with the same court.
We disagree.
The extrajudicial foreclosure sale of a real estate mortgage is governed by Act
No. 3135, as amended by Act No. 4118, otherwise known as "An Act to
Regulate the Sale of Property Under Special Powers Inserted In or Annexed to
Real-Estate Mortgages." Sections 1 and 2 thereof clearly state:
Section 1. When a sale is made under a special power inserted in or attached
to any real-estate mortgage hereafter made as security for the payment of
money or the fulfillment of any other obligation, the provisions of the following
sections shall govern as to the manner in which the sale and redemption shall
be effected, whether or not provision for the same is made in the power.
Sec. 2. Said sale cannot be made legally outside of the province in which the
property sold is situated; and in case the place within said province in which
the sale is to be made is the subject of stipulation, such sale shall be made in
said place or in the municipal building of the municipality in which the property
or part thereof is situated.5
The case at bar involves petitioners’ mortgaged real property located in
Parañaque City over which respondent bank was granted a special power to
foreclose extra-judicially. Thus, by express provision of Section 2, the sale can
only be made in Parañaque City.
The exclusive venue of Makati City, as stipulated by the parties6 and
sanctioned by Section 4, Rule 4 of the Rules of Court,7 cannot be made to
apply to the Petition for Extrajudicial Foreclosure filed by respondent bank
because the provisions of Rule 4 pertain to venue of actions, which an
extrajudicial foreclosure is not.
Pertinent are the following disquisitions in Supena v. De la Rosa:8
Section 1, Rule 2 [of the Rules of Court] defines an action in this wise:
"Action means an ordinary suit in a court of justice, by which one party
prosecutes another for the enforcement or protection of a right, or the
prevention or redress of a wrong."
Hagans v. Wislizenus does not depart from this definition when it states that
"[A]n action is a formal demand of one's legal rights in a court of justice in the
manner prescribed by the court or by the law. x x x." It is clear that the
determinative or operative fact which converts a claim into an "action or suit" is
the filing of the same with a "court of justice." Filed elsewhere, as with some
other body or office not a court of justice, the claim may not be categorized
under either term. Unlike an action, an extrajudicial foreclosure of real estate
mortgage is initiated by filing a petition not with any court of justice but with the
office of the sheriff of the province where the sale is to be made. By no stretch
1avv phi 1
of the imagination can the office of the sheriff come under the category of a
court of justice. And as aptly observed by the complainant, if ever the
executive judge comes into the picture, it is only because he exercises
administrative supervision over the sheriff. But this administrative supervision,
however, does not change the fact that extrajudicial foreclosures are not
judicial proceedings, actions or suits.9
These pronouncements were confirmed on August 7, 2001 through A.M. No.
99-10-05-0, entitled "Procedure in Extra-Judicial Foreclosure of Mortgage," the
significant portions of which provide:
In line with the responsibility of an Executive Judge under Administrative Order
No. 6, date[d] June 30, 1975, for the management of courts within his
administrative area, included in which is the task of supervising directly the
work of the Clerk of Court, who is also the Ex-Office Sheriff, and his staff, and
the issuance of commissions to notaries public and enforcement of their duties
under the law, the following procedures are hereby prescribed in extra-judicial
foreclosure of mortgages:
1. All applications for extrajudicial foreclosure of mortgage whether under the
direction of the sheriff or a notary public, pursuant to Act 3135, as amended by
Act 4118, and Act 1508, as amended, shall be filed with the Executive Judge,
through the Clerk of Court who is also the Ex-Officio Sheriff.
Verily then, with respect to the venue of extrajudicial foreclosure sales, Act No.
3135, as amended, applies, it being a special law dealing particularly with
extrajudicial foreclosure sales of real estate mortgages, and not the general
provisions of the Rules of Court on Venue of Actions.
Consequently, the stipulated exclusive venue of Makati City is relevant only to
actions arising from or related to the mortgage, such as petitioners’ complaint
for Annulment of Foreclosure, Sale, and Damages.
The other arguments raised in the motion are a mere reiteration of those
already raised in the petition for review. As declared in this Court’s Resolution
on January 17, 2011, the same failed to show any sufficient ground to warrant
the exercise of our appellate jurisdiction.
WHEREFORE, premises considered, the motion for reconsideration is hereby
DENIED.
SO ORDERED.