Republic of the Philippines SUPREME COURT SECOND DIVISION 1) 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 P71,392.00 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 P500,000.00 by way of moral damages; as a further result of his hospitalization, private respondent lost income of P25,000.00; 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 P71,392.00, 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 P10,000.00 and moral damages of P1,000,000.00, 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 courts jurisdiction, or is the total amount of all the damages claimed, regardless of kind and nature, such as moral, exemplary, nominal damages, and attorneys 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 courts jurisdiction should be based exclusively on the amount of actual damages, excluding therefrom the amounts claimed as moral, exemplary, nominal damages and attorneys 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 courts 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 respondents claim for actual damages in the amount of P71,392.00 is the principal and primary demand, the same being the direct result of the alleged negligence of petitioners, while the moral damages for P500,000.00 and attorneys 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 exceedP200,000.00, 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 RTCs 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 courts 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 P200,000.00 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 P200,000.00 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 Courts 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 inSibonghanoy 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 P100,000.00,26 exclusive of interest, damages of whatever kind, attorneys 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 P100,000.00, exclusive of interest, damages of whatever kind, attorneys 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 P200,000.00,27 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 (2),30 which provides for the payment of moral damages in cases of quasi-delict causing physical injuries. Private respondents claim for moral damages of P500,000.00 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. If the rule were otherwise, i.e., the courts jurisdiction in a case of quasi-delict 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 amount within its jurisdictional limitations, a situation not intended by the framers of the law. It must be remembered that moral damages, though incapable of pecuniary 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 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 moral suffering he/she has undergone, by reason of the defendants culpable action. Its award is aimed at restoration, as much as possible, of the 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 no hard and fast rule in determining the proper amount.33 The petitioners reliance in the case of Movers-Baseco Integrated Port Services, Inc. vs. Cyborg Leasing Corporation34 is misplaced. The claim for damages therein was based on a breach of a contract of lease, not a quasi-delict causing physical injuries, as in this case. Besides, there was no claim therein for moral damages. Furthermore, moral damages are generally not recoverable in damage actions predicated on a breach of contract in view of the provisions of Article 222035 of the Civil Code. In view of the foregoing, the Court is convinced that the respondent RTC Judge committed no grave abuse of discretion in issuing the assailed Orders dated April 17, 2000 and June 13, 2000. 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. SO ORDERED. 3) G.R. No. 104796 March 6, 1998

SPOUSES ROSALINA S. DE LEON and ALEJANDRO L. DE LEON, petitioners, vs. THE COURT OF APPEALS, GLICERIO MA. ELAYDA II, FEDERICO ELAYDA and DANILO ELAYDA,respondents.

MENDOZA, J.: The question for decision is whether in assessing the docket fees to be paid for the filing of an action for annulment or rescission of a contract of sale, the value of the real property, subject matter of the contract, should be used as basis, or whether the action should be considered as one which is not capable of pecuniary estimation and therefore the fee charged should be a flat rate of P400.00 as provided in Rule 141, 7(b)(1) of the Rules of Court. The trial court held the fees should be based on the value of the property, but the Court of Appeals reversed and held that the flat rate should be charged. Hence this petition for review on certiorari. The facts are as follows: On August 8, 1991, private respondents filed in the Regional Trial Court of Quezon City a complaint for annulment or rescission of a contract of sale of two (2) parcels of land against petitioners, praying for the following reliefs: 1. Ordering the nullification or rescission of the Contract of Conditional Sale (Supplementary Agreement) for having violated the rights of plaintiffs (private respondents) guaranteed to them under Article 886 of the Civil Code and/or violation of the terms and conditions of the said contract. 2. Declaring void ab initio the Deed of Absolute Sale for being absolutely simulated; and

3. Ordering defendants (petitioners) to pay plaintiffs (private respondents) attorney's fees in the amount of P100,000.00.
Other reliefs and remedies as are just and equitable in the premises are also prayed for. 1

Upon the filing of the complaint, the clerk of court required private respondents to pay docket and legal fees in the total amount of P610.00, broken down as follows: P450.00 Docket fee for the Judicial Development Fund under Official Receipt No. 1877773 150.00 Docket fee for the General Fund under Official Receipt No. 6834215
10.00 for the Legal Research Fund under Official Receipt No. 6834450. 2

On September 26, 1991, petitioners moved for the dismissal of the complaint on the ground that the trial court did not acquire jurisdiction over the case by reason of private respondents' nonpayment of the correct amount of docket fees. Petitioners contended that in addition to the fees already paid based on the claim for P100,000.00 for attorney's fees, private respondents should have paid docket fees in the amount of P21,640.00, based on the alleged value of the two (2) parcels of land subject matter of the contract of sale sought to be annulled. 3 On September 30, 1991, private respondents filed opposition to the motion to dismiss, arguing that outright dismissal of their complaint was not warranted on the basis of the alleged nonpayment of the correct amount of docket fees, considering that the amount paid by them was that assessed by the clerk of court. 4 On October 9, 1991, petitioners filed a reply to which private respondents filed, on October 17, 1991, a rejoinder. On October 21, 1991, the trial court 5 denied petitioners' motion to dismiss but required private respondents to pay the amount of docket fees based on the estimated value of the parcels of land in litigation as stated in the complaint. Private respondents filed a motion for reconsideration but their motion was denied by the trial court. They therefore, brought the matter to the Court of Appeals which, on February 26, 1992, rendered a decision 6annulling the orders of the trial court. The appellate court held that an action for rescission or annulment of contract is not susceptible of pecuniary estimation and, therefore, the docket fees should not be based on the value of the real property, subject matter of the contract sought to be

annulled or rescinded. Petitioners moved for reconsideration, but their motion was denied in a resolution dated March 25, 1992 of the appellate court. Hence, the petition for review on certiorari. Rule 141 of the Rules of Court provides: Sec. 7. Clerks of Regional Trial Courts. (a) For filing an action or a permissive counter-claim or money claim against an estate not based on judgment, or for filing with leave of court a third-party, fourth-party, etc. complaint, or a complaint in intervention, and for all clerical services in the same, if the total-sum claimed, exclusive of interest, or the stated value of the property in litigation, is: 1. Not more than P20,000.00 P120.00 2. More than P20,000.00 but less than P40,000.00 150.00 3. P40,000.00 or more but less than P60,000.00 200.00 4. P60,000.00 or more but less than P80,000.00 250.00 5. P80,000.00 or more but less than P100,000.00 400.00 6. P100,000.00 or more but less than P150,000.00 600.00 7. For each P1,000.00 in excess of P150,000.00 5.00 (b) For filing: 1. Actions where the value of the subject matter cannot be estimated P400.00 2. Special civil actions except judicial foreclosure of mortgage which shall be governed by paragraph (a) above 400.00 3. All other actions not involving property 400.00

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. (emphasis added) Petitioners argue that an action for annulment or rescission of a contract of sale of real property is a real action and, therefore, the amount of the docket fees to be paid by private respondent should be based either on the assessed value of the property, subject matter of the action, or its estimated value as alleged in the complaint, pursuant to the last paragraph of 7(b) of Rule 141, as amended by the Resolution of the Court dated September 12, 1990. Since private respondents alleged that the land, in which they claimed an interest as heirs, had been sold for P4,378,000.00 to petitioners, this amount should be considered the estimated value of the land for the purpose of determining the docket fees. On the other hand, private respondents counter that an action for annulment or rescission of a contract of sale of real property is incapable of pecuniary estimation and, so, the docket fees should be the fixed amount of P400.00 in Rule 141, 7(b)(1). In support of their argument, they cite the cases of Lapitan v. Scandia, Inc. 7 and Bautista v.Lim. 8 In Lapitan this Court, in an opinion by Justice J.B.L. Reyes, held: A review of the jurisprudence of this Court indicates that in determining whether an action is one the subject matter of which is not capable of pecuniary estimation, this Court has adopted the criterion of first ascertaining the nature of the principal action or remedy sought. If it is primarily for the recovery of a sum of money, the claim is considered capable of pecuniary estimation, and whether jurisdiction is in the municipal courts or in the courts of first instance would depend on the amount of the claim. However, where the basic issue is something other than the right to recover a sum of money, or where the money claim is purely incidental to, or a consequence of, the principal relief sought, like in suits to have the defendant perform his part of the contract (specific performance) and in actions for support, or for annulment of a judgment or to foreclose a mortgage, this Court has considered such actions as cases where the subject of the litigation may not be estimated in terms of money, and are cognizable exclusively by courts of first instance. The rationale of the rule is plainly that the second class cases, besides the determination of damages, demand an inquiry into other factors which the law has deemed to be more within the competence of courts of first instance, which were the lowest courts of record at the time that the first organic laws of the Judiciary were enacted allocating jurisdiction (Act 136 of the Philippine Commission of June 11, 1901). Actions for specific performance of contracts have been expressly pronounced to be exclusively cognizable by courts of first instance: De Jesus vs. Judge Garcia, L-26816, February 28, 1967; Manufacturer's Distributors, Inc. vs. Yu Siu Liong, L-21285, April 29, 1966. And no cogent reason appears, and none is here advanced by the parties, why an action for rescission (or resolution) should be differently treated, a "rescission" being counterpart, so to speak, of "specific performance". In both cases, the court would certainly have to undertake an investigation into facts that would justify one act or the other. No award for damages may be had in an action for rescission without first conducting an inquiry into

matters which would justify the setting aside of a contract, in the same manner that courts of first instance would have to make findings of fact and law in actions not capable of pecuniary estimation expressly held to be so by this Court, arising from issues like those raised in Arroz v. Alojado, et al., L-22153, March 31, 1967 (legality or illegality of the conveyance sought for and the determination of the validity of the money deposit made); De Ursua v.Pelayo, L-13285, April 18, 1950 (validity of a judgment); Bunayog v. Tunas, L-12707, December 23, 1959 (validity of mortgage); Baito v. Sarmiento, L-13105, August 25, 1960 (the relations of the parties, the right to support created by the relation, etc., in actions for support); De Rivera, et al. v. Halili, L-15159, September 30, 1963 (the validity or nullity of documents upon which claims are predicated). Issues of the same nature may be raised by a party against whom an action for rescission has been brought, or by the plaintiff himself. It is, therefore, difficult to see why a prayer for damages in an action for rescission should be taken as the basis for concluding such action as one capable of pecuniary estimation a prayer which must be included in the main action if plaintiff is to be compensated for what he may have suffered as a result of the breach committed by defendant, and not later on precluded from recovering damages by the rule against splitting a cause of action and discouraging multiplicity of suits. Conformably with this discussion of actions "where the value of the case cannot be estimated," the Court inBautista v. Lim, held that an action for rescission of contract is one which cannot be estimated and therefore the docket fee for its filing should be the flat amount of P200.00 as then fixed in the former Rule 141, 141, 5(10). Said this Court: We hold that Judge Dalisay did not err in considering Civil Case No. V-144 as basically one for rescission or annulment of contract which is not susceptible of pecuniary estimation (1 Moran's Comments on the Rules of Court, 1970 Ed, p. 55; Lapitan vs. Scandia, Inc., L-24668, July 31, 1968, 24 SCRA 479, 781-483). Consequently, the fee for docketing it is P200, an amount already paid by plaintiff, now respondent Matilda Lim. (She should pay also the two pesos legal research fund fee, if she has not paid it, as required in Section 4 of Republic Act No. 3870, the charter of the U.P. Law Center). Thus, although eventually the result may be the recovery of land, it is the nature of the action as one for rescission of contract which is controlling. The Court of Appeals correctly applied these cases to the present one. As it said: We would like to add the observations that since the action of petitioners [private respondents] against private respondents [petitioners] is solely for annulment or rescission which is not susceptible of pecuniary estimation, the action should not be confused and equated with the "value of the property" subject of the transaction; that by the very nature of the case, the allegations, and specific prayer in the complaint, sans any prayer for recovery of money and/or value of the transaction, or for actual or compensatory damages, the assessment and collection of the legal fees should not be intertwined with the merits of the case and/or what may be its end result; and that to sustain private respondents'

[petitioners'] position on what the respondent court may decide after all, then the assessment should be deferred and finally assessed only after the court had finally decided the case, which cannot be done because the rules require that filing fees should be based on what is alleged and prayed for in the face of the complaint and paid upon the filing of the complaint. WHEREFORE, the decision of the Court of Appeals is AFFIRMED. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila FIRST DIVISION 4) G.R. No. 158121 December 12, 2007

HEIRS OF VALERIANO S. CONCHA, SR. NAMELY: TERESITA CONCHA-PARAN, VALERIANO P. CONCHA, JR., RAMON P. CONCHA, EDUARDO P. CONCHA, REPRESENTED BY HIS LEGAL GUARDIAN, REYNALDO P. CONCHA, ALBERTO P. CONCHA, BERNARDO P. CONCHA and GLORIA, petitioners, vs. SPOUSES GREGORIO J. LUMOCSO1 and BIENVENIDA GUYA, CRISTITA J. LUMOCSO VDA. DE DAAN, AND SPOUSES JACINTO J. LUMOCSO and BALBINA T. LUMOCSO,2 respondents. DECISION PUNO, C.J.: On appeal by certiorari under Rule 45 of the Rules of Court are the decision3 and resolution4 of the Court of Appeals (CA) in CA-G.R. SP No. 59499, annulling the resolutions5 and order6 of the Regional Trial Court (RTC) of Dipolog City, Branch 9, in Civil Case Nos. 5188, 5433 and 5434 which denied the separate motions to dismiss and Joint Motion for Reconsideration filed by the respondents. The relevant facts are undisputed.

Petitioners, heirs of spouses Dorotea and Valeriano Concha, Sr., claim to be the rightful owners of Lot No. 6195 (Civil Case No. 5188), a onehectare portion of Lot No. 6196-A (Civil Case No. 5433), and a one-hectare portion of Lot Nos. 6196-B and 7529-A (Civil Case No. 5434), all situated in Cogon, Dipolog City, under Section 48(b) of Commonwealth Act No. 141 (C.A. No. 141), otherwise known as the Public Land Act. Respondent siblings Gregorio Lumocso (Civil Case No. 5188), Cristita Lumocso Vda. de Daan (Civil Case No. 5433) and Jacinto Lumocso (Civil Case No. 5434), are the patent holders and registered owners of the subject lots. The records show that on August 6, 1997, Valeriano Sr.7 and his children, petitioners Valeriano Jr., Ramon, Eduardo, Alberto, Bernardo, Teresita, Reynaldo, and Gloria, all surnamed Concha, filed a complaint for Reconveyance and/or Annulment of Title with Damages against "Spouses Gregorio Lomocso and Bienvenida Guya." They sought to annul Free Patent No. (IX-8)985 and the corresponding Original Certificate of Title (OCT) No. P-22556 issued in the name of "Gregorio Lumocso" covering Lot No. 6195. The case was raffled to the RTC of Dipolog City, Branch 9, and docketed as Civil Case No. 5188. In their Amended Complaint, petitioners prayed that judgment be rendered: 1. Declaring Free Patent No. (IX-8)985 and Original Certificate of Title No. 22556 issued to defendants as null and void ab initio; 2. Declaring Lot No. 6195 or 1.19122-hectare as private property of the plaintiffs under Sec. 48(b) of CA No. 141 otherwise known as the Public Land Act as amended by RA 1942; 3. Ordering the defendant Lomocsos to reconvey the properties (sic) in question Lot No. 6195 or the 1.19122 hectares in favor of the plaintiffs within 30 days from the finality of the decision in this case and if they refuse, ordering the Clerk of Court of this Honorable Court to execute the deed of reconveyance with like force and effect as if executed by the defendant[s] themselves; 4. Ordering defendant Lomocsos to pay P60,000.00 for the 21 forest trees illegally cut; P50,000.00 for moral damages; P20,000.00 for Attorneys fees; P20,000.00 for litigation expenses; and to pay the cost of the proceedings; 5. Declaring the confiscated three (sic) flitches kept in the area of the plaintiffs at Dampalan San Jose, Dipolog with a total volume of 2000 board feet a[s] property of the plaintiff [they] being cut, collected and taken from the land possessed, preserved, and owned by the plaintiffs; 6. The plaintiffs further pray for such other reliefs and remedies which this Honorable Court may deem just and equitable in the premises.8 On September 3, 1999, two separate complaints for Reconveyance with Damages were filed by petitioners,9 this time against "Cristita Lomocso Vda. de Daan" for a one-hectare portion of Lot No. 6196-A and "Spouses Jacinto Lomocso and Balbina T. Lomocso" for a one-hectare portion of Lot Nos. 6196-B and 7529-A. The two complaints were also raffled to Branch 9 of the RTC of Dipolog City and docketed as Civil Case Nos. 5433 and 5434, respectively. In Civil Case No. 5433, petitioners prayed that judgment be rendered: 1. Declaring [a] portion of Lot 6196-A titled under OCT (P23527) 4888 equivalent to one hectare located at the western portion of Lot 4888 as private property of the plaintiffs under Sec. 48(B) CA 141 otherwise known as Public Land OCT (sic) as amended by RA No. 1942;

2. Ordering the defendant to reconvey the equivalent of one (1) hectare forested portion of her property in question in favor of the plaintiffs within 30 days from the finality of the decision in this case segregating one hectare from OCT (P23527) 4888, located at its Western portion and if she refuse (sic), ordering the Clerk of Court of this Honorable Court to execute the deed of reconveyance with like force and effect, as if executed by the defenda[n]t herself; 3. Ordering defendant to pay P30,000.00 for the 22 forest trees illegally cut; P20,000.00 for moral damages; P20,000.00 for Attorney's fees; P20,000.00 for litigation expenses; and to pay the cost of the proceedings.10 In Civil Case No. 5434, petitioners prayed that judgment be rendered: 1. Declaring [a] portion of Lot 7529-A under OCT (P-23207) 12870 and Lot 6196-B OCT (P-20845) 4889 equivalent to one hectare located as (sic) the western portion of said lots as private property of the plaintiffs under Sec. 48(b) of [C.A. No.] 141 otherwise know[n] as the [P]ublic [L]and [A]ct as amended by RA 1942; 2. Ordering the defendants to reconvey the equivalent of one (1) hectare forested portion of their properties in question in favor of the plaintiffs within 30 days from the finality of the decision in this case segregating one hectare from OCT (P-23207) 12870 and OCT (T20845)-4889 all of defendants, located at its Western portion and if they refuse, ordering the Clerk of Court of this Honorable Court to execute the deed of reconveyance with like force and effect as if executed by the defendants themselves[;] 3. Ordering defendants to pay P20,000.00 for the six (6) forest trees illegally cut; P20,000.00 for moral damages; P20,000.00 for Attorney's fees; P20,000.00 for litigation expenses; and to pay the cost of the proceedings.11 The three complaints12 commonly alleged: a) that on May 21, 1958, petitioners' parents (spouses Valeriano Sr. and Dorotea Concha) acquired by homestead a 24-hectare parcel of land situated in Cogon, Dipolog City; b) that since 1931, spouses Concha "painstakingly preserved" the forest in the 24-hectare land, including the excess four (4) hectares "untitled forest land" located at its eastern portion; c) that they possessed this excess 4 hectares of land (which consisted of Lot No. 6195, one-hectare portion of Lot No. 6196-A and one-hectare portion of Lot Nos. 6196-B and 7529-A) "continuously, publicly, notoriously, adversely, peacefully, in good faith and in concept of the (sic) owner since 1931;" d) that they continued possession and occupation of the 4-hectare land after the death of Dorotea Concha on December 23, 1992 and Valeriano Sr. on May 12, 1999; e) that the Concha spouses "have preserved the forest trees standing in [the subject lots] to the exclusion of the defendants (respondents) or other persons from 1931" up to November 12, 1996 (for Civil Case No. 5188) or January 1997 (for Civil Case Nos. 5433 and 5434) when respondents, "by force, intimidation, [and] stealth forcibly entered the premises, illegally cut, collected, [and] disposed" of 21 trees (for Civil Case No. 5188), 22 trees (for Civil Case No. 5433) or 6 trees (for Civil Case No. 5434); f) that "the land is private land or that even assuming it was part of the public domain, plaintiffs had already acquired imperfect title thereto" under Sec. 48(b) of C.A. No. 141, as amended by Republic Act (R.A.) No. 1942; g) that respondents allegedly cut into flitches the trees felled in Lot No. 6195 (Civil Case No. 5188) while the logs taken from the subject lots in Civil Case Nos. 5433 and 5434 were sold to a timber dealer in Katipunan, Zamboanga del Norte; h) that respondents "surreptitiously" filed free patent applications over the lots despite their full knowledge that petitioners owned the lots; i) that the geodetic engineers who conducted the original survey over the lots never informed them of the survey to give them an opportunity to oppose respondents' applications; j) that respondents' free patents and the corresponding OCTs were issued "on account of fraud, deceit, bad faith and misrepresentation"; and k) that the lots in question have not been transferred to an innocent purchaser.

On separate occasions, respondents moved for the dismissal of the respective cases against them on the same grounds of: (a) lack of jurisdiction of the RTC over the subject matters of the complaints; (b) failure to state causes of action for reconveyance; (c) prescription; and (d) waiver, abandonment, laches and estoppel.13 On the issue of jurisdiction, respondents contended that the RTC has no jurisdiction over the complaints pursuant to Section 19(2) of Batas Pambansa Blg. (B.P.) 129, as amended by R.A. No. 7691, as in each case, the assessed values of the subject lots are less than P20,000.00. Petitioners opposed,14 contending that the instant cases involve actions the subject matters of which are incapable of pecuniary estimation which, under Section 19(1) of B.P. 129, as amended by R.A. 7691, fall within the exclusive original jurisdiction of the RTCs. They also contended that they have two main causes of action: for reconveyance and for recovery of the value of the trees felled by respondents. Hence, the totality of the claims must be considered which, if computed, allegedly falls within the exclusive original jurisdiction of the RTC. The trial court denied the respective motions to dismiss of respondents.15 The respondents filed a Joint Motion for Reconsideration,16 to no avail.17 Dissatisfied, respondents jointly filed a Petition for Certiorari, Prohibition and Preliminary Injunction with Prayer for Issuance of Restraining Order Ex Parte18 with the CA, docketed as CA-G.R. SP No. 59499. In its Decision,19 the CA reversed the resolutions and order of the trial court. It held that even assuming that the complaints state a cause of action, the same have been barred by the statute of limitations. The CA ruled that an action for reconveyance based on fraud prescribes in ten (10) years, hence, the instant complaints must be dismissed as they involve titles issued for at least twenty-two (22) years prior to the filing of the complaints. The CA found it unnecessary to resolve the other issues. Hence, this appeal in which petitioners raise the following issues, viz: FIRST - WHETHER OR NOT RESPONDENT COURT OF APPEALS (FORMER FIRST DIVISION) ERRED IN REVERSING THE ORDER OF THE COURT A QUO DENYING THE MOTION FOR DISMISSAL, CONSIDERING THE DISMISSAL OF A PARTY COMPLAINT IS PREMATURE AND TRIAL ON THE MERITS SHOULD BE CONDUCTED TO THRESH OUT EVIDENTIARY MATTERS. SECOND - WHETHER OR NOT THE RESPONDENT COURT OF APPEALS (FORMER FIRST DIVISION) ERRED IN DISMISSING THE PETITIONERS' COMPLAINTS ON [THE] GROUND OF PRESCRIPTION. THIRD - WHETHER OR NOT THE RESPONDENT COURT OF APPEALS (FORMER FIRST DIVISION) ERRED IN CONCLUDING THAT THERE IS NO DOCUMENTARY EVIDENCE ON RECORD TO SHOW THAT PETITIONERS OWN THE SUBJECT FOREST PORTION OF THE PROPERTIES ERRONEOUSLY INCLUDED IN THE TITLES OF PRIVATE RESPONDENTS. FOURTH - WHETHER OR NOT THE PETITION OF HEREIN PRIVATE RESPONDENTS FILED WITH THE RESPONDENT COURT OF APPEALS (FORMER FIRST DIVISION) SHOULD HAVE BEEN DISMISSED OUTRIGHTLY FOR PRIVATE RESPONDENTS' THEREIN FAILURE TO COMPLY WITH THE MANDATORY REQUIREMENT OF SECTION 1 RULE 65 OF THE RULES OF COURT TO SUBMIT CERTIFIED TRUE COPIES OF THE ASSAILED ORDERS OF THE TRIAL COURT WHICH RENDERED THEIR PETITION (CA G.R. 59499) DEFICIENT IN FORM AND SUBSTANCE CITING THE CASE OF CATUIRA VS. COURT OF APPEALS (172 SCRA 136).20

In their memorandum,21 respondents reiterated their arguments in the courts below that: a) the complaints of the petitioners in the trial court do not state causes of action for reconveyance; b) assuming the complaints state causes of action for reconveyance, the same have already been barred by prescription; c) the RTC does not have jurisdiction over the subject matter of the instant cases; d) the claims for reconveyance in the complaints are barred by waiver, abandonment, or otherwise extinguished by laches and estoppel; and e) there is no special reason warranting a review by this Court. Since the issue of jurisdiction is determinative of the resolution of the instant case yet the CA skirted the question, we resolved to require the parties to submit their respective Supplemental Memoranda on the issue of jurisdiction.22 In their Supplemental Memorandum,23 petitioners contend that the nature of their complaints, as denominated therein and as borne by their allegations, are suits for reconveyance, or annulment or cancellation of OCTs and damages. The cases allegedly involve more than just the issue of title and possession since the nullity of the OCTs issued to respondents and the reconveyance of the subject properties were also raised as issues. Thus, the RTC has jurisdiction under Section 19(1) of B.P. 129, which provides that the RTC has jurisdiction "[i]n all civil actions in which the subject of the litigation is incapable of pecuniary estimation." Petitioners cited: a) Raymundo v. CA24 which set the criteria for determining whether an action is one not capable of pecuniary estimation; b)Swan v. CA25 where it was held that an action for annulment of title is under the jurisdiction of the RTC; c)Santos v. CA26 where it was similarly held that an action for annulment of title, reversion and damages was within the jurisdiction of the RTC; and d) Commodities Storage and ICE Plant Corporation v. CA27 where it was held that "[w]here the action affects title to the property, it should be filed in the RTC where the property is located." Petitioners also contend that while it may be argued that the assessed values of the subject properties are within the original jurisdiction of the municipal trial court (MTC), they have included in their prayers "any interest included therein" consisting of 49 felled natural grown trees illegally cut by respondents. Combining the assessed values of the properties as shown by their respective tax declarations and the estimated value of the trees cut, the total amount prayed by petitioners exceeds twenty thousand pesos (P20,000.00). Hence, they contend that the RTC has jurisdiction under Section 19(2) of B.P. 129. Jurisdiction over the subject matter is the power to hear and determine cases of the general class to which the proceedings in question belong.28 It is conferred by law and an objection based on this ground cannot be waived by the parties.29 To determine whether a court has jurisdiction over the subject matter of a case, it is important to determine the nature of the cause of action and of the relief sought.30 The trial court correctly held that the instant cases involve actions for reconveyance.31 An action for reconveyance respects the decree of registration as incontrovertible but seeks the transfer of property, which has been wrongfully or erroneously registered in other persons' names, to its rightful and legal owners, or to those who claim to have a better right.32 There is no special ground for an action for reconveyance. It is enough that the aggrieved party has a legal claim on the property superior to that of the registered owner33 and that the property has not yet passed to the hands of an innocent purchaser for value.34 The reliefs sought by the petitioners in the instant cases typify an action for reconveyance. The following are also the common allegations in the three complaints that are sufficient to constitute causes of action for reconveyance, viz: (a) That plaintiff Valeriano S. Concha, Sr. together with his spouse Dorotea Concha have painstakingly preserve[d] the forest standing in the area [of their 24-hectare homestead] including the four hectares untitled forest land located at the eastern portion of the forest from 1931 when they were newly married, the date they acquired this property by occupation or possession;35

(b) That spouses Valeriano S. Concha Sr. and Dorotea P. Concha have preserved the forest trees standing in [these parcels] of land to the exclusion of the defendants Lomocsos or other persons from 1931 up to November 12, 1996 [for Civil Case No. 5188] and January 1997 [for Civil Case Nos. 5433 and 5434] when defendants[,] by force, intimidation, [and] stealth[,] forcibly entered the premises, illegal[ly] cut, collected, disposed a total of [twenty-one (21) trees for Civil Case No. 5188, twenty-two (22) trees for Civil Case No. 5433 and six (6) trees for Civil Case No. 5434] of various sizes;36 (c) That this claim is an assertion that the land is private land or that even assuming it was part of the public domain, plaintiff had already acquired imperfect title thereto under Sec. 48(b) of [C.A.] No. 141[,] otherwise known as the Public Land Act[,] as amended by [R.A.] No. [7691];37 (d) That [respondents and their predecessors-in-interest knew when they] surreptitiously filed38 [their respective patent applications and were issued their respective] free patents and original certificates of title [that the subject lots belonged to the petitioners];39 (e) [That respondents' free patents and the corresponding original certificates of titles were issued] on account of fraud, deceit, bad faith and misrepresentation;40 and (f) The land in question has not been transferred to an innocent purchaser.41 These cases may also be considered as actions to remove cloud on one's title as they are intended to procure the cancellation of an instrument constituting a claim on petitioners' alleged title which was used to injure or vex them in the enjoyment of their alleged title.42 Being in the nature of actions for reconveyance or actions to remove cloud on one's title, the applicable law to determine which court has jurisdiction is Section 19(2) of B.P. 129, as amended by R.A. No. 7691, viz: Section 19. Jurisdiction in Civil Cases.-- Regional Trial Courts shall exercise exclusive original jurisdiction: x x x (2) In all civil actions which involve the title to, or possession of, real property, or any interest therein, where the assessed value of the property involved exceeds Twenty thousand pesos (P20,000.00) or for civil actions in Metro Manila, where such value exceeds Fifty thousand pesos (P50,000.00) except actions for forcible entry into and unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts; x x x. In the cases at bar, it is undisputed that the subject lots are situated in Cogon, Dipolog City and their assessed values are less than P20,000.00, to wit: Civil Case No. Lot No. Assessed Value

5188 5433 5434

6195 6196-A 6196-B 7529-A

P1,030.00 4,500.00 4,340.00 1,880.00.43

Hence, the MTC clearly has jurisdiction over the instant cases. Petitioners' contention that this case is one that is incapable of pecuniary estimation under the exclusive original jurisdiction of the RTC pursuant to Section 19(1) of B.P. 129 is erroneous. In a number of cases, we have held that actions for reconveyance44 of or for cancellation of title45 to or to quiet title46 over real property are actions that fall under the classification of cases that involve "title to, or possession of, real property, or any interest therein." The original text of Section 19(2) of B.P. 129 as well as its forerunner, Section 44(b) of R.A. 296,47 as amended, gave the RTCs (formerly courts of first instance) exclusive original jurisdiction "[i]n all civil actions which involve the title to, or possession of, real property, or any interest therein, except actions for forcible entry into and unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon Metropolitan Trial Courts, [MTCs], and Municipal Circuit Trial Courts (conferred upon the city and municipal courts under R.A. 296, as amended)." Thus, under the old law, there was no substantial effect on jurisdiction whether a case is one, the subject matter of which was incapable of pecuniary estimation, under Section 19(1) of B.P. 129 or one involving title to property under Section 19(2). The distinction between the two classes became crucial with the amendment introduced by R.A. No. 769148 in 1994 which expanded the exclusive original jurisdiction of the first level courts to include "all civil actions which involve title to, or possession of, real property, or any interest thereinwhere the assessed value of the property or interest therein does not exceed Twenty thousand pesos (P20,000.00) or, in civil actions in Metro Manila, where such assessed value does not exceed Fifty thousand pesos (P50,000.00) exclusive of interest, damages of whatever kind, attorney's fees, litigation expenses and costs." Thus, under the present law, original jurisdiction over cases the subject matter of which involves "title to, possession of, real property or any interest therein" under Section 19(2) of B.P. 129 is divided between the first and second level courts, with the assessed value of the real property involved as the benchmark. This amendment was introduced to "unclog the overloaded dockets of the RTCs which would result in the speedier administration of justice."49 The cases of Raymundo v. CA50 and Commodities Storage and ICE Plant Corporation v. CA,51 relied upon by the petitioners, are inapplicable to the cases at bar. Raymundo involved a complaint for mandatory injunction, not one for reconveyance or annulment of title. The bone of contention was whether the case was incapable of pecuniary estimation considering petitioner's contention that the pecuniary claim of the complaint was only attorney's fees of P10,000, hence, the MTC had jurisdiction. The Court defined the criterion for determining whether an action is one that is incapable of pecuniary estimation and held that the issue of whether petitioner violated the provisions of the Master Deed and Declaration of Restriction of the Corporation is one that is incapable of pecuniary estimation. The claim for attorney's fees was merely incidental to the principal action, hence, said amount was not determinative of the court's jurisdiction. Nor can Commodities Storage and ICE Plant

Corporation provide any comfort to petitioners for the issue resolved by the Court in said case was venue and not jurisdiction. The action therein was for damages, accounting and fixing of redemption period which was filed on October 28, 1994, before the passage of R.A. No. 7691. In resolving the issue of venue, the Court held that "[w]here the action affects title to property, it should be instituted in the [RTC] where the property is situated. The Sta. Maria Ice Plant & Cold Storage is located in Sta. Maria, Bulacan. The venue in Civil Case No. 94-727076 was therefore improperly laid." Worse, the cases of Swan v. CA52 and Santos v. CA53 cited by the petitioners, contradict their own position that the nature of the instant cases falls under Section 19(1) of B.P. 129. The complaints in Swan and Santos were filed prior to the enactment of R.A. No. 7691. In Swan, the Court held that the action being one for annulment of title, the RTC had original jurisdiction under Section 19(2) of B.P. 129. In Santos, the Court similarly held that the complaint for cancellation of title, reversion and damages is also one that involves title to and possession of real property under Section 19(2) of B.P. 129. Thus, while the Court held that the RTC had jurisdiction, the Court classified actions for "annulment of title" and "cancellation of title, reversion and damages" as civil actions that involve "title to, or possession of, real property, or any interest therein" under Section 19(2) of B.P. 129. Petitioners' contention that the value of the trees cut in the subject properties constitutes "any interest therein (in the subject properties)" that should be computed in addition to the respective assessed values of the subject properties is unavailing. Section 19(2) of B.P. 129, as amended by R.A. No. 7691, is clear that the RTC shall exercise jurisdiction "in all civil actions which involve the title to, or possession of, real property, or any interest therein, where the assessed value of the property involved exceeds Twenty thousand pesos (P20,000.00) or for civil actions in Metro Manila, where such value exceeds Fifty thousand pesos (P50,000.00)." It is true that the recovery of the value of the trees cut from the subject properties may be included in the term "any interest therein." However, the law is emphatic that in determining which court has jurisdiction, it is only the assessed value of the realty involved that should be computed.54 In this case, there is no dispute that the assessed values of the subject properties as shown by their tax declarations are less than P20,000.00. Clearly, jurisdiction over the instant cases belongs not to the RTC but to the MTC. IN VIEW WHEREOF, the decision of the Court of Appeals is hereby AFFIRMED that the RTC of Dipolog City, Branch 9, has no jurisdiction in Civil Case Nos. 5188, 5433 and 5434. SO ORDERED. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION 5) G.R. No. 156848 October 11, 2007

PIONEER INTERNATIONAL, LTD., petitioner, vs. HON. TEOFILO GUADIZ, JR., in his capacity as Presiding Judge of Regional Trial Court, Branch 147, Makati City, and ANTONIO D. TODARO, respondents. DECISION CARPIO, J.: The Case This is a petition for review on certiorari1 of the Decision2 dated 27 September 2001 and of the Resolution3 dated 14 January 2003 of the Court of Appeals (appellate court) in CA-G.R. SP No. 54062. The Decision affirmed the Orders4 dated 4 January 19995 and 3 June 19996 of Branch 147 of the Regional Trial Court of Makati City (trial court) in Civil Case No. 98-124. The trial court denied the motion to dismiss filed by Pioneer International, Ltd. (PIL)7 in its special appearance. The Facts On 16 January 1998, Antonio D. Todaro (Todaro) filed a complaint for sum of money and damages with preliminary attachment against PIL, Pioneer Concrete Philippines, Inc. (PCPI), Pioneer Philippines Holdings, Inc. (PPHI), John G. McDonald (McDonald), and Philip J. Klepzig (Klepzig). PIL and its co-defendants were served copies of the summons and of the complaint at PPHI and PCPIs office in Alabang, Muntinlupa, through Cecille L. De Leon (De Leon), who was Klepzigs Executive Assistant. Todaro alleged that PIL is a corporation duly organized under Australian laws, while PCPI and PPHI are corporations duly organized under Philippine laws. PIL is engaged in the ready-mix and concrete aggregates business and has established a presence worldwide. PIL established PPHI as the holding company of the stocks of its operating company in the Philippines, PCPI. McDonald is the Chief Executive Officer of PILs Hong Kong office while Klepzig is the President and Managing Director of PPHI and PCPI. For his part, Todaro further alleged that he was the managing director of Betonval Readyconcrete, Inc. (Betonval) from June 1975 up to his resignation in February 1996. Before Todaro filed his complaint, there were several meetings and exchanges of letters between Todaro and the officers of Pioneer Concrete (Hong Kong) Limited, Pioneer Concrete Group HK, PPHI, and PIL. According to Todaro, PIL contacted him in May 1996 and asked if he could join it in establishing a pre-mixed concrete plant and in overseeing its operations in the Philippines. Todaro confirmed his availability and expressed interest in joining PIL. Todaro met with several of PILs representatives and even gave PIL the names of three of his subordinates in Betonval whom he would like to join him in PIL. Todaro attached nine letters, marked as Annexes "A" to "I," to his complaint. Annex "A"8 shows that on 15 July 1996, Todaro, under the letterhead of Ital Tech Distributors, Inc., sent a letter to Max Lindsay (Lindsay) of Pioneer Concrete (Hong Kong) Limited. Todaro wrote that "[m]y aim is to

run again a ready-mix concrete company in the Philippines and not to be a part-time consultant. Otherwise, I could have charged your company with a much higher fee." Annex "B"9 shows that on 4 September 1996, Lindsay, under the letterhead of Pioneer Concrete (Hong Kong) Limited, responded by fax to Todaros faxed letter to McDonald and proposed that Todaro "join Pioneer on a retainer basis for 2 to 3 months on the understanding that [Todaro] would become a permanent employee if as we expect, our entry proceeds." The faxed letter to McDonald referred to by Lindsay is not found in the rollo and was not attached to Todaros complaint. Annex "C"10 shows that on the same date as that of Annex "B," Todaro, under the letterhead of Ital Tech Distributors, Inc., faxed another letter to Lindsay of Pioneer Concrete (Hong Kong) Limited. Todaro asked for a formal letter addressed to him about the proposed retainer. Todaro requested that the letter contain a statement on his remuneration package and on his permanent employment "with PIONEER once it has established itself on a permanent basis in the Philippines." Annex "D"11 shows that Todaro, under the letterhead of Ital Tech Distributors, Inc., sent a letter to McDonald of PIL. Todaro confirmed the following to McDonald: 1. That I am accepting the proposal of PIONEER INTL. as a consultant for three (3) months, starting October 1, 1996, with a retainer fee of U.S. $15,000.00 per month; 2. That after three (3) months consultancy, I should be employed by PIONEER INTL., on a permanent basis, as its Managing Director or CEO in the Philippines. Remuneration package will be mutually agreed upon by PIONEER and the undersigned; 3. That Gino Martinel and the Sales Manager Jun Ong, will be hired as well, on a permanent basis, by PIONEER as soon as the company is established. Salary, likewise, will be accepted by both PIONEER and the respective parties. Annex "E"12 is a faxed letter dated 18 November 1996 of McDonald, under the letterhead of Pioneer Concrete Group HK, to Todaro of Ital Tech Distributors, Inc. The first three paragraphs of McDonalds letter read: Further to our recent meeting in Hong Kong, I am now able to confirm my offer to engage you as a consultant to Pioneer International Ltd. Should Pioneer proceed with an investment in the Philippines, then Pioneer would offer you a position to manage the premixed concrete operations. Pioneer will probably be in a position to make a decision on proceeding with an investment by mid January 97. The basis for your consultancy would be: Monthly fee USD 15,000 per month billed on monthly basis and payable 15 days from billing date. Additional pre-approved expenses to be reimbursed.

 Driver and secretarial support-basis for reimbursement of this to be agreed. Arrangement to commence from 1st November 96, reflecting your contributions so far and to continue until Pioneer makes a decision. Annex "F"13 shows Todaros faxed reply, under the letterhead of Ital Tech Distributors, Inc., to McDonald of Pioneer Concrete Group HK dated 19 November 1996. Todaro confirmed McDonalds package concerning the consultancy and reiterated his desire to be the manager of Pioneers Philippine business venture. Annex "G"14 shows Todaros faxed reply, under the letterhead of Ital Tech Distributors, Inc., to McDonald of PIL dated 8 April 1997. Todaro informed McDonald that he was willing to extend assistance to the Pioneer representative from Queensland. The tenor of the letter revealed that Todaro had not yet occupied his expected position. Annex "H"15 shows Klepzigs letter, under the letterhead of PPHI, to Todaro dated 18 September 1997. Klepzigs message reads: It has not proven possible for this company to meet with your expectations regarding the conditions of your providing Pioneer with consultancy services. This, and your refusal to consider my terms of offer of permanent employment, leave me no alternative but to withdraw these offers of employment with this company. As you provided services under your previous agreement with our Pioneer Hong Kong office during the month of August, I will see that they pay you at the previous rates until the end of August. They have authorized me on behalf of Pioneer International Ltd. to formally advise you that the agreement will cease from August 31st as per our previous discussions. Annex "I"16 shows the letter dated 20 October 1997 of K.M. Folwell (Folwell), PILs Executive General Manager of Australia and Asia, to Todaro. Folwell confirmed the contents of Klepzigs 18 September 1997 letter. Folwells message reads: Thank you for your letter to Dr. Schubert dated 29th September 1997 regarding the alleged breach of contract with you. Dr. Schubert has asked me to investigate this matter. I have discussed and examined the material regarding your association with Pioneer over the period from mid 1996 through to September 1997. Clearly your consultancy services to Pioneer Hong Kong are well documented and have been appropriately rewarded. However, in regard to your request and expectation to be given permanent employment with Pioneer Philippines Holdings, Inc. I am informed that negotiations to reach agreement on appropriate terms and conditions have not been successful. The employment conditions you specified in your letter to John McDonald dated 11th September are well beyond our expectations.

Mr. Todaro, I regret that we do not wish to pursue our association with you any further. Mr. Klepzig was authorized to terminate this association and the letter he sent to you dated 18th September has my support. Thank you for your involvement with Pioneer. I wish you all the best for the future. (Emphasis added) PIL filed, by special appearance, a motion to dismiss Todaros complaint. PILs co-defendants, PCPI, PPHI, and Klepzig, filed a separate motion to dismiss.17 PIL asserted that the trial court has no jurisdiction over PIL because PIL is a foreign corporation not doing business in the Philippines. PIL also questioned the service of summons on it. Assuming arguendo that Klepzig is PILs agent in the Philippines, it was not Klepzig but De Leon who received the summons for PIL. PIL further stated that the National Labor Relations Commission (NLRC), and not the trial court, has jurisdiction over the subject matter of the action. It claimed that assuming that the trial court has jurisdiction over the subject matter of the action, the complaint should be dismissed on the ground of forum non-conveniens. Finally, PIL maintained that the complaint does not state a cause of action because there was no perfected contract, and no personal judgment could be rendered by the trial court against PIL because PIL is a foreign corporation not doing business in the Philippines and there was improper service of summons on PIL. Todaro filed a Consolidated Opposition dated 26 August 1998 to refute PILs assertions. PIL filed, still by special appearance, a Reply on 2 October 1998. The Ruling of the Trial Court On 4 January 1999, the trial court issued an order18 which ruled in favor of Todaro. The trial court denied the motions to dismiss filed by PIL, PCPI, PPHI, and Klepzig. The trial court stated that the merits of a motion to dismiss a complaint for lack of cause of action are tested on the strength of the allegation of facts in the complaint. The trial court found that the allegations in the complaint sufficiently establish a cause of action. The trial court declared that Todaros cause of action is based on an alleged breach of a contractual obligation and an alleged violation of Articles 19 and 21 of the Civil Code. Therefore, the cause of action does not lie within the jurisdiction of the NLRC but with the trial court. The trial court also asserted its jurisdiction over PIL, holding that PIL did business in the Philippines when it entered into a contract with Todaro. Although PIL questions the service of summons on Klepzig, whom PIL claims is not its agent, the trial court ruled that PIL failed to adduce evidence to prove its contention. Finally, on the issue of forum non-conveniens, the trial court found that it is more convenient to hear and decide the case in the Philippines because Todaro resides in the Philippines and the contract allegedly breached involves employment in the Philippines. PIL filed an urgent omnibus motion for the reconsideration of the trial courts 4 January 1999 order and for the deferment of filing its answer. PCPI, PPHI, and Klepzig likewise filed an urgent omnibus motion. Todaro filed a consolidated opposition, to which PIL, PCPI, PPHI, and Klepzig filed a joint reply. The trial court issued an order19on 3 June 1999 denying the motions of PIL, PCPI, PPHI, and Klepzig. The trial court gave PIL, PCPI, PPHI, and Klepzig 15 days within which to file their respective answers. PIL did not file an answer before the trial court and instead filed a petition for certiorari before the appellate court.

The Ruling of the Appellate Court The appellate court denied PILs petition and affirmed the trial courts ruling in toto. The dispositive portion of the appellate courts decision reads: WHEREFORE, premises considered, the present petition for certiorari is hereby DENIED DUE COURSE and accordingly DISMISSED. The assailed Orders dated January 4, 1999 and June 3, 1999 of the Regional Trial Court of Makati City, Branch 147, in Civil Case No, 98124 are hereby AFFIRMED in toto. SO ORDERED.20 On 14 January 2003, the appellate court dismissed21 PILs motion for reconsideration for lack of merit. The appellate court stated that PILs motion raised no new substantial or weighty arguments that could impel the appellate court from departing or overturning its previous decision. PIL then filed a petition for review on certiorari before this Court. The Issues PIL raised the following issues before this Court: A. [The trial court] did not and cannot acquire jurisdiction over the person of [PIL] considering that: A.1. [PIL] is a foreign corporation "not doing business" in the Philippines. A.2. Moreover, the complaint does not contain appropriate allegations of ultimate facts showing that [PIL] is doing or transacting business in the Philippines. A.3. Assuming arguendo that jurisdiction may be acquired over the person of [PIL], [the trial court] still failed to acquire jurisdiction since summons was improperly served on [PIL]. B. [Todaro] does not have a cause of action and the complaint fails to state a cause of action. Jurisprudence is settled in that in resolving a motion to dismiss, a court can consider all the pleadings filed in the case, including annexes, motions and all evidence on record. C. [The trial court] did not and cannot acquire jurisdiction over the subject matter of the complaint since the allegations contained therein indubitably show that [Todaro] bases his claims on an alleged breach of an employment contract. Thus, exclusive jurisdiction is vested with the [NLRC]. D. Pursuant to the principle of forum non-conveniens, [the trial court] committed grave abuse of discretion when it took cognizance of the case.22

The Ruling of the Court The petition has partial merit. We affirm with modification the rulings of the trial and appellate courts. Apart from the issue on service of summons, the rulings of the trial and appellate courts on the issues raised by PIL are correct. Cause of Action Section 2, Rule 2 of the 1997 Rules of Civil Procedure states that a cause of action is the act or omission by which a party violates a right of another. The general rule is that the allegations in a complaint are sufficient to constitute a cause of action against the defendants if, admitting the facts alleged, the court can render a valid judgment upon the same in accordance with the prayer therein. A cause of action exists if the following elements are present, namely: (1) a right in favor of the plaintiff by whatever means and under whatever law it arises or is created; (2) an obligation on the part of the named defendant to respect or not to violate such right; and (3) an act or omission on the part of such defendant violative of the right of the plaintiff or constituting a breach of the obligation of the defendant to the plaintiff for which the latter may maintain an action for recovery of damages.23 In the present case, the summary of Todaros allegations states that PIL, PCPI, PPHI, McDonald, and Klepzig did not fulfill their contractual obligation to employ Todaro on a permanent basis in PILs Philippine office. Todaros allegations are thus sufficient to establish a cause of action. We quote with approval the trial courts ruling on this matter: On the issue of lack of cause of action It is well-settled that the merits of a motion to dismiss a complaint for lack of cause of action is tested on the strength of the allegations of fact contained in the complaint and no other (De Jesus, et al. vs. Belarmino, et al., 95 Phil. 366 [1954]). This Court finds that the allegations of the complaint, specifically paragraphs 13-33 thereof, paragraphs 30-33 alleging as follows: "30. All of the acts set forth in the foregoing have been done with the knowledge, consent and/or approval of the defendants who acted in concert and/or in conspiracy with one another. 31. Under the circumstances, there is a valid contract entered into between [Todaro] and the Pioneer Group, whereby, among others, the Pioneer Group would employ [Todaro], on a permanent basis, to manage and operate the ready-mix concrete operations, if the Pioneer Group decides to invest in the Philippines. 32. The Pioneer Group has decided to invest in the Philippines. The refusal of the defendants to comply with the Pioneer Groups undertaking to employ [Todaro] to manage their Philippine ready-mix operations, on a permanent basis, is a direct breach of an obligation under a valid and perfected contract. 33. Alternatively, assuming without conceding, that there was no contractual obligation on the part of the Pioneer Group to employ [Todaro] on a permanent basis, in their Philippine operations, the Pioneer Group and the other defendants did not act with justice,

give [Todaro] his due and observe honesty and good faith and/or they have willfully caused injury to [Todaro] in a manner that is contrary to morals, good customs, and public policy, as mandated under Arts. 19 and 21 of the New Civil Code." sufficiently establish a cause of action for breach of contract and/or violation of Articles 19 and 21 of the New Civil Code. Whether or not these allegations are true is immaterial for the court cannot inquire into the truth thereof, the test being whether, given the allegations of fact in the complaint, a valid judgment could be rendered in accordance with the prayer in the complaint.24 It should be emphasized that the presence of a cause of action rests on the sufficiency, and not on the veracity, of the allegations in the complaint. The veracity of the allegations will have to be examined during the trial on the merits. In resolving a motion to dismiss based on lack of cause of action, the trial court is limited to the four corners of the complaint and its annexes. It is not yet necessary for the trial court to examine the truthfulness of the allegations in the complaint. Such examination is proper during the trial on the merits. Forum Non-Conveniens The doctrine of forum non-conveniens requires an examination of the truthfulness of the allegations in the complaint. Section 1, Rule 16 of the 1997 Rules of Civil Procedure does not mention forum non-conveniens as a ground for filing a motion to dismiss. The propriety of dismissing a case based on forum non-conveniens requires a factual determination; hence, it is more properly considered a matter of defense. While it is within the discretion of the trial court to abstain from assuming jurisdiction on this ground, the trial court should do so only after vital facts are established to determine whether special circumstances require the courts desistance.25 Jurisdiction over PIL PIL questions the trial courts exercise of jurisdiction over it on two levels. First, that PIL is a foreign corporation not doing business in the Philippines and because of this, the service of summons on PIL did not follow the mandated procedure. Second, that Todaros claims are based on an alleged breach of an employment contract so Todaro should have filed his complaint before the NLRC and not before the trial court. Transacting Business in the Philippines and Service of Summons The first level has two sub-issues: PILs transaction of business in the Philippines and the service of summons on PIL. Section 12, Rule 14 of the 1997 Rules of Civil Procedure provides the manner by which summons may be served upon a foreign juridical entity which has transacted business in the Philippines. Thus: Service upon foreign private juridical entity. When the defendant is a foreign juridical entity which has transacted business in the Philippines, service may be made on its resident agent designated in accordance with law for that purpose, or, if there be no such agent, on the government official designated by law to that effect, or any of its officers or agents within the Philippines.

As to the first sub-issue, PIL insists that its sole act of "transacting" or "doing business" in the Philippines consisted of its investment in PPHI. Under Philippine law, PILs mere investment in PPHI does not constitute "doing business." However, we affirm the lower courts ruling and declare that, based on the allegations in Todaros complaint, PIL was doing business in the Philippines when it negotiated Todaros employment with PPHI. Section 3(d) of Republic Act No. 7042, Foreign Investments Act of 1991, states: The phrase "doing business" shall include soliciting orders, service contracts, opening offices, whether called "liaison" offices or branches; appointing representatives or distributors domiciled in the Philippines or who in any calendar year stay in the country for a period or periods totaling one hundred eighty [180] days or more; participating in the management, supervision or control of any domestic business, firm, entity or corporation in the Philippines; and any other act or acts that imply a continuity of commercial dealings or arrangements and contemplate to that extent the performance of acts or works, or the exercise of some of the functions normally incident to, and in progressive prosecution of commercial gain or of the purpose and object of the business organization:Provided, however, That the phrase "doing business" shall not be deemed to include mere investment as a shareholder by a foreign entity in domestic corporations duly registered to do business, and/or the exercise of rights as such investor; nor having a nominee director or officer to represent its interests in such corporation; nor appointing a representative or distributor domiciled in the Philippines which transacts business in its own name and for its own account; (Emphases added) PILs alleged acts in actively negotiating to employ Todaro to run its pre-mixed concrete operations in the Philippines, which acts are hypothetically admitted in PILs motion to dismiss, are not mere acts of a passive investor in a domestic corporation. Such are managerial and operational acts in directing and establishing commercial operations in the Philippines. The annexes that Todaro attached to his complaint give us an idea on the extent of PILs involvement in the negotiations regarding Todaros employment. In Annex "E," McDonald of Pioneer Concrete Group HK confirmed his offer to engage Todaro as a consultant of PIL. In Annex "F," Todaro accepted the consultancy. In Annex "H," Klepzig of PPHI stated that PIL authorized him to tell Todaro about the cessation of his consultancy. Finally, in Annex "I," Folwell of PIL wrote to Todaro to confirm that "Pioneer" no longer wishes to be associated with Todaro and that Klepzig is authorized to terminate this association. Folwell further referred to a Dr. Schubert and to Pioneer Hong Kong. These confirmations and references tell us that, in this instance, the various officers and companies under the Pioneer brand name do not work independently of each other. It cannot be denied that PIL had knowledge of and even authorized the nonimplementation of Todaros alleged permanent employment. In fact, in the letters to Todaro, the word "Pioneer" was used to refer not just to PIL alone but also to all corporations negotiating with Todaro under the Pioneer name. As further proof of the interconnection of the various Pioneer corporations with regard to their negotiations with Todaro, McDonald of Pioneer Concrete Group HK confirmed Todaros engagement as consultant of PIL (Annex "E") while Folwell of PIL stated that Todaro rendered consultancy services to Pioneer HK (Annex "I"). In this sense, the various Pioneer corporations were not acting as separate corporations. The behavior of the various Pioneer corporations shoots down their defense that the corporations have separate and distinct personalities, managements, and operations. The various Pioneer corporations were all working in concert to negotiate an employment contract between Todaro and PPHI, a domestic corporation. Finally, the phrase "doing business in the Philippines" in the former version of Section 12, Rule 14 now reads "has transacted business in the Philippines." The scope is thus broader in that it is enough for the application of the Rule that the foreign private juridical entity "has transacted business in the Philippines."26

As to the second sub-issue, the purpose of summons is not only to acquire jurisdiction over the person of the defendant, but also to give notice to the defendant that an action has been commenced against it and to afford it an opportunity to be heard on the claim made against it. The requirements of the rule on summons must be strictly followed; otherwise, the trial court will not acquire jurisdiction over the defendant. When summons is to be served on a natural person, service of summons should be made in person on the defendant.27 Substituted service is resorted to only upon the concurrence of two requisites: (1) when the defendant cannot be served personally within a reasonable time and (2) when there is impossibility of prompt service as shown by the statement in the proof of service in the efforts made to find the defendant personally and that such efforts failed.28 The statutory requirements of substituted service must be followed strictly, faithfully, and fully, and any substituted service other than by the statute is considered ineffective. Substituted service is in derogation of the usual method of service. It is a method extraordinary in character and may be used only as prescribed and in the circumstances authorized by the statute.29 The need for strict compliance with the requirements of the rule on summons is also exemplified in the exclusive enumeration of the agents of a domestic private juridical entity who are authorized to receive summons. At present, Section 11 of Rule 14 provides that when the defendant is a domestic private juridical entity, service may be made on the "president, managing partner, general manager, corporate secretary, treasurer, or in-house counsel." The previous version of Section 11 allowed for the service of summons on the "president, manager, secretary, cashier, agent, or any of its directors." The present Section 11 qualified "manager" to "general manager" and "secretary" to "corporate secretary." The present Section 11 also removed "cashier, agent, or any of its directors" from the exclusive enumeration. When summons is served on a foreign juridical entity, there are three prescribed ways: (1) service on its resident agent designated in accordance with law for that purpose, (2) service on the government official designated by law to receive summons if the corporation does not have a resident agent, and (3) service on any of the corporations officers or agents within the Philippines.30 In the present case, service of summons on PIL failed to follow any of the prescribed processes. PIL had no resident agent in the Philippines. Summons was not served on the Securities and Exchange Commission (SEC), the designated government agency,31 since PIL is not registered with the SEC. Summons for PIL was served on De Leon, Klepzigs Executive Assistant. Klepzig is PILs "agent within the Philippines" because PIL authorized Klepzig to notify Todaro of the cessation of his consultancy (Annexes "H" and "I").32 The authority given by PIL to Klepzig to notify Todaro implies that Klepzig was likewise authorized to receive Todaros response to PILs notice. Todaro responded to PILs notice by filing a complaint before the trial court. However, summons was not served personally on Klepzig as agent of PIL. Instead, summons was served on De Leon, Klepzigs Executive Assistant. In this instance, De Leon was not PILs agent but a mere employee of Klepzig. In effect, the sheriff33 resorted to substituted service. For symmetry, we apply the rule on substituted service of summons on a natural person and we find that no reason was given to justify the service of PILs summons on De Leon. Thus, we rule that PIL transacted business in the Philippines and Klepzig was its agent within the Philippines. However, there was improper service of summons on PIL since summons was not served personally on Klepzig.

NLRC Jurisdiction As to the second level, Todaro prays for payment of damages due him because of PILs non-implementation of Todaros alleged employment agreement with PPHI. The appellate court stated its ruling on this matter, thus: It could not be denied that there was no existing contract yet to speak of between PIONEER INTL. and [Todaro]. Since there was an absence of an employment contract between the two parties, this Court is of the opinion and so holds that no employer-employee relationship actually exists. Record reveals that all that was agreed upon by [Todaro] and the Pioneer Concrete, acting in behalf of PIONEER INTL., was the confirmation of the offer to engage the services of the former as consultant of PIONEER INTL. (Rollo, p. 132). The failure on the part of PIONEER INTL. to abide by the said agreement, which was duly confirmed by PIONEER INTL., brought about a breach of an obligation on a valid and perfected agreement. There being no employer-employee relationship established between [PIL] and [Todaro], it could be said that the instant case falls within the jurisdiction of the regular courts of justice as the money claim of [Todaro] did not arise out of or in connection with [an] employer-employee relationship.34 Todaros employment in the Philippines would not be with PIL but with PPHI as stated in the 20 October 1997 letter of Folwell. Assuming the existence of the employment agreement, the employer-employee relationship would be between PPHI and Todaro, not between PIL and Todaro. PILs liability for the non-implementation of the alleged employment agreement is a civil dispute properly belonging to the regular courts. Todaros causes of action as stated in his complaint are, in addition to breach of contract, based on "violation of Articles 19 and 21 of the New Civil Code" for the "clear and evident bad faith and malice"35 on the part of defendants. The NLRCs jurisdiction is limited to those enumerated under Article 217 of the Labor Code.36 WHEREFORE, the petition is PARTIALLY GRANTED. The Decision dated 27 September 2001 and the Resolution dated 14 January 2003 of the appellate court are AFFIRMED with the MODIFICATION that there was improper service of summons on Pioneer International, Ltd. The case is remanded to the trial court for proper service of summons and trial. No costs. SO ORDERED. 6) G.R. No. 155785 April 13, 2007

SIMPLICIO GALICIA, for himself, and as Attorney-in-Fact of ROSALIA G. TORRE, PAQUITO GALICIA, NELLIE GALICIA, LETICIA G. MAESTRO and CLARO GALICIA, Petitioners, vs. LOURDES MANLIQUEZ vda. de MINDO and LILIA RICO MINANO, Respondents. DECISION AUSTRIA-MARTINEZ, J.:

Before the Court is a Petition for Review on Certiorari seeking to annul and set aside the Decision1 of the Court of Appeals (CA) dated January 14, 2002 in CA-G.R. SP No. 58834 and its Resolution2 of October 21, 2002 denying petitioners Motion for Reconsideration. The present case originated from a complaint filed with the Regional Trial Court (RTC) of Odiongan, Romblon by herein petitioners, in their capacity as heirs of Juan Galicia (Juan), against Milagros Rico-Glori (Milagros) and her tenants Dominador Musca and Alfonso Fallar, Jr. for Recovery of Possession and Ownership, Annulment of Title, Documents and Other Papers. The case is docketed as Civil Case No. OD-306. In their Complaint, petitioners contended that their predecessor, Juan, was the true and lawful owner of a parcel of land situated in Concepcion Sur, Sta. Maria, Romblon known as Lot No. 139 and containing an area of 5.5329 hectares, the same having been declared in his name under various tax declarations the latest of which being Tax Declaration No. 0037, Series of 1994; after years of possession of the said land, Juan was driven away from the property through force by the heirs of a certain Ines Ramirez (Ines), one of whom is defendant Milagros; because of poverty and lack of knowledge, Juan was not able to assert his right to the said property but he informed his children that they own the above-described parcel of land; and the continuous possession of the property by Milagros and her co-defendants, tenants has further deprived herein petitioners of their right over the same. Defendants denied the allegations of petitioners in their complaint asserting that Juan was not the owner and never took possession of the disputed lot. They also contended that the subject property was part of a larger parcel of land which was acquired by Ines, Milagross predecessorin-interest in 1947 from a certain Juan Galicha who is a different person from Juan Galicia. During the scheduled pre-trial conference on May 21, 1997, none of the defendants appeared. They filed a motion for postponement of the pretrial conference but it was belatedly received by the trial court. As a consequence, defendants were declared in default. Herein petitioners, as plaintiffs, were then allowed to present evidence ex parte. On December 2, 1997, the RTC rendered judgment with the following dispositive portion: WHEREFORE, premises considered, and by preponderance of evidence, judgment is hereby rendered in favor of the plaintiffs and against the defendants: 1. Declaring plaintiffs as the true and absolute owner of the property subject of the case and particularly described in paragraph II of the complaint; 2. Affirming and confirming the validity and legality of plaintiffs ownership over the property; 3. Ordering defendants to vacate the land adverted to in paragraph II of the complaint; 4. For the defendants to respect plaintiffs' peaceful possession and ownership of the land aforesaid; and 5. To pay the costs.

SO ORDERED.3 On December 15, 1997, the RTC received a Motion for Leave of Court to Intervene with an attached Answer-in-Intervention filed by the compulsory heirs of Ines, among whom are herein respondents, who are also co-heirs of defendant Milagros. The intervenors contended that the subject parcel of land forms part of the estate of Ines which is yet to be partitioned among them; an intestate proceeding is presently pending in the RTC of Odiongan, Romblon, Branch 81; the outcome of Civil Case No. OD-306, one way or the other, would adversely affect their interest; their rights would be better protected in the said civil case; and their intervention would not unduly delay, or in any way prejudice the rights of the original parties. In its Order of December 23, 1997, the RTC denied the said motion to intervene on the ground that it has already rendered judgment and under Section 2, Rule 19 of the Rules of Court, the motion to intervene should have been filed before rendition of judgment by the trial court. Meanwhile, the defendants in Civil Case No. OD-306 filed an appeal with the CA. Their Notice of Appeal was filed on February 27, 1998. On June 23, 1999, the CA issued a Resolution dismissing the appeal for failure of the defendants-appellants to file their brief within the extended period granted by the appellate court. On August 13, 1999, the abovementioned CA Resolution became final and executory. Subsequently, the trial court issued a writ of execution dated March 3, 2000. On May 23, 2000, herein respondents filed a petition for annulment of judgment with the CA anchored on grounds of lack of jurisdiction over their persons and property and on extrinsic fraud. On January 14, 2002, the CA promulgated the presently assailed Decision with the following dispositive portion: WHEREFORE, the present petition is hereby GRANTED. The Decision dated December 2, 1997 and Writ of Execution dated March 3, 2000 of Branch 82 of the Regional Trial Court of Odiongan, Romblon are hereby ANNULLED and SET ASIDE. SO ORDERED.4 Herein petitioners filed a Motion for Reconsideration but it was denied by the CA in its Resolution5 dated October 21, 2002. Hence, the instant petition for review based on the following assignment of errors: 1. THAT THE COURT OF APPEALS COMMITTED SERIOUS ERROR OF LAW IN ANNULLING AND SETTING ASIDE THE DECISION DATED 2 DECEMBER 1997 AND WRIT OF EXECUTION DATED 3 MARCH 2000 OF BRANCH 82 OF THE REGIONAL TRIAL COURT OF ODIONGAN, ROMBLON FOR LACK OF JURISDICTION OVER THE PERSONS OF PETITIONERS (NOW RESPONDENTS IN THE ABOVE-ENTITLED CASE), A DECISION NOT IN ACCORD WITH LAW OR WITH THE APPLICABLE DECISIONS OF THE SUPREME COURT.

2. THAT THE COURT OF APPEALS COMMITTED SERIOUS ERROR OF LAW IN NOT DISMISSING THE PETITION FOR ANNULMENT OF JUDGMENT ON THE GROUND OF ESTOPPEL ON THE PART OF THE PETITIONERS IN CA-G.R. SP. NO. 58834.6 As to their first assigned error, petitioners invoke the principle that jurisdiction over the person is acquired by the voluntary appearance of a party in court and his submission to its authority. Applying this rule in the present case, petitioners argue that by filing their Motion for Leave to Intervene in the RTC, herein respondents voluntarily submitted themselves to the authority of the trial court, hence placing themselves under its jurisdiction; that by filing the said Motion, they recognized the authority of the court to hear and decide not only their Motion but the case itself; and that by acting on their Motion, the court actually exercised jurisdiction over the persons of petitioners. With respect to their second assigned error, petitioners contend that by respondents voluntary submission to the jurisdiction of the trial court they are already estopped in denying the authority of the court which they invoked when they filed their Motion. Petitioners also contend that respondents had several opportunities to raise the issue of the courts lack of jurisdiction over their persons but they remained silent and did not pursue the remedies available to them for an unreasonable length of time; hence, they are now barred by laches from questioning the courts jurisdiction. On the other hand, respondents counter that the CA did not err in setting aside the trial court's decision on the ground that defendants, as indispensable parties, were not joined in the complaint. Respondents argue that the CA correctly held that when an indispensable party is not before the court then the action should be dismissed because the absence of such indispensable party renders all subsequent actions of the court null and void for want of authority to act not only as against him but even as against those present. Respondents also aver that even assuming that herein petitioners were the true owners of the subject land, they have lost such ownership by extinctive prescription because respondents and their predecessors had been in uninterrupted adverse possession of the subject lot for more than 40 years. As such, they had become the owners thereof by acquisitive prescription. The petition lacks merit but the CA Decision will have to be modified in the interest of substantial justice and for the orderly administration of justice, as will be shown forthwith. It is true that the allowance and disallowance of a motion to intervene is addressed to the sound discretion of the court hearing the case.7 However, jurisprudence is replete with cases wherein the Court ruled that a motion to intervene may be entertained or allowed even if filed after judgment was rendered by the trial court, especially in cases where the intervenors are indispensable parties.8 In Pinlac v. Court of Appeals, this Court held: The rule on intervention, like all other rules of procedure, is intended to make the powers of the Court fully and completely available for justice. It is aimed to facilitate a comprehensive adjudication of rival claims overriding technicalities on the timeliness of the filing thereof. Indeed, in exceptional cases, the Court has allowed intervention notwithstanding the rendition of judgment by the trial court.9 Since it is not disputed that herein respondents are compulsory heirs of Ines who stand to be affected by the judgment of the trial court, the latter should have granted their Motion to Intervene and should have admitted their Answer-in-Intervention.

Section 7, Rule 3 of the Rules of Court, defines indispensable parties as parties-in-interest without whom there can be no final determination of an action. As such, they must be joined either as plaintiffs or as defendants. The general rule with reference to the making of parties in a civil action requires the joinder of all necessary parties where possible and the joinder of all indispensable parties under any and all conditions, their presence being a sine qua non for the exercise of judicial power.10 It is precisely when an indispensable party is not before the court that the action should be dismissed.11 The absence of an indispensable party renders all subsequent actions of the court null and void for want of authority to act, not only as to the absent parties but even as to those present.12 The evident aim and intent of the Rules regarding the joinder of indispensable and necessary parties is a complete determination of all possible issues, not only between the parties themselves but also as regards to other persons who may be affected by the judgment.13 A valid judgment cannot even be rendered where there is want of indispensable parties.141^wphi1.net As to the question of whether the trial court acquired jurisdiction over the persons of herein respondents, the Court has held that the filing of motions seeking affirmative relief, such as, to admit answer, for additional time to file answer, for reconsideration of a default judgment, and to lift order of default with motion for reconsideration, are considered voluntary submission to the jurisdiction of the court.15 Hence, in the present case, when respondents filed their Motion for Leave to Intervene, attaching thereto their Answer-in-Intervention, they have effectively submitted themselves to the jurisdiction of the court and the court, in turn, acquired jurisdiction over their persons. But this circumstance did not cure the fatal defect of non-inclusion of respondents as indispensable parties in the complaint filed by petitioner. It must be emphasized that respondents were not able to participate during the pre-trial much less present evidence in support of their claims. In other words, the court acquired jurisdiction over the persons of herein respondents only when they filed their Motion for Leave to Intervene with the RTC. Prior to that, they were strangers to Civil Case No. OD-306. It is basic that no man shall be affected by any proceeding to which he is a stranger, and strangers to a case are not bound by judgment rendered by the court.16 In the present case, respondents and their co-heirs are adversely affected by the judgment rendered by the trial court considering their ostensible ownership of the property. It will be the height of inequity to declare herein petitioners as owners of the disputed lot without giving respondents the opportunity to present any evidence in support of their claim that the subject property still forms part of the estate of their deceased predecessor and is the subject of a pending action for partition among the compulsory heirs. Much more, it is tantamount to a violation of the constitutional guarantee that no person shall be deprived of property without due process of law.171vvphi1.nt This Court held in Metropolitan Bank and Trust Company v. Alejo that: A void judgment for want of jurisdiction is no judgment at all. It cannot be the source of any right nor the creator of any obligation. All acts performed pursuant to it and all claims emanating from it have no legal effect. Hence, it can never become final and any writ of execution based on it is void: x x x it may be said to be a lawless thing which can be treated as an outlaw and slain at sight, or ignored wherever and whenever it exhibits its head.18 In the absence of herein respondents and their co-heirs who are indispensable parties, the trial court had in the first place no authority to act on the case. Thus, the judgment of the trial court was null and void due to lack of jurisdiction over indispensable parties.19 The CA correctly annulled the RTC Decision and writ of execution.

As to the timeliness of the petition for annulment of judgment filed with the CA, Section 3, Rule 47 of the Rules of Court provides that a petition for annulment of judgment based on extrinsic fraud must be filed within four years from its discovery; and if based on lack of jurisdiction, before it is barred by laches or estoppel. The principle of laches or "stale demands" ordains that 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, or the negligence or omission to assert a right within a reasonable time, warrants a presumption that the party entitled to assert it either has abandoned it or declined to assert it.20 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.21 The question of laches is addressed to the sound discretion of the court and, being an equitable doctrine, its application is controlled by equitable considerations.22 It cannot be used to defeat justice or perpetrate fraud and injustice.23 It is the better rule that courts, under the principle of equity, will not be guided or bound strictly by the statute of limitations or the doctrine of laches when to do so, manifest wrong or injustice would result.24 In the present case, the CA found no evidence to show when respondents acquired knowledge of the complaint that petitioners filed with the RTC. Moreover, the Court finds that herein respondents' right to due process is the overriding consideration in allowing them to intervene in Civil Case No. OD-306. Petitioners also fault herein respondents for their failure to avail of other remedies before filing a petition for annulment of judgment with the CA. Petitioners cited the remedies enumerated by the RTC in its Order of December 23, 1997. However, the Court notes that the remedies enumerated therein refer to those available to a party who has been declared in default. In the present case, herein respondents could not have been declared in default, and thus could not have availed of these remedies, because they never became parties to Civil Case No. OD-306. The settled rule is that a judgment rendered or final order issued by the RTC without jurisdiction is null and void and may be assailed any time either collaterally or in a direct action or by resisting such judgment or final order in any action or proceeding whenever it is invoked, unless barred by laches.25 Indeed, jurisprudence upholds the soundness of an independent action to declare as null and void a judgment rendered without jurisdiction as in this case.26 As a result of and in consonance with the foregoing discussions, the complaint filed by herein petitioners with the trial court should have been dismissed at the outset, in the absence of indispensable parties. Inevitably, the following questions come to mind: what happens to the original defendants who were declared as in default and judgment by default was rendered against them? What happens to the final and executory dismissal of the appeal of the defaulted defendants by the CA? It is an accepted rule of procedure for this Court to strive to settle the entire controversy in a single proceeding, leaving no root or branch to bear the seeds of future litigation.27 In concurrence therewith, the Court makes the following observations:

To dismiss the complaint of herein petitioners for non-inclusion of herein respondents as indispensable parties, the former would have no other recourse but to file anew a complaint against the latter and the original defendants. This would not be in keeping with the Court's policy of promoting a just and inexpensive disposition of a case. It is best that the complaint remains which is deemed amended by the admission of the Answer-in-Intervention of the indispensable parties. The trial courts declaration of the defendants as in default in Civil Case No. OD-306 for their failure to attend the pre-trial conference and the consequent final and executory judgment by default, are altogether void and of no effect considering that the RTC acted without jurisdiction from the very beginning because of non-inclusion of indispensable parties. The Court reiterates the ruling in Metropolitan Bank and Trust Company that void judgment for want of jurisdiction is no judgment at all; it cannot be the source of any right nor the creator of any obligation.28 Parties are reverted back to the stage where all the defendants have filed their respective Answers. WHEREFORE, the petition is DENIED. The assailed Decision and Resolution of the Court of Appeals areAFFIRMED with MODIFICATION to the effect that the Regional Trial Court of Odiongan, Romblon, Branch 82 is ordered to GRANT the Motion for Leave to Intervene of respondents and their other co-heirs, ADMIT their Answer-in-Intervention, MAINTAIN the Answer of original defendants, and from there to PROCEED with Civil Case No. OD-306 in accordance with the Rules of Court. Costs against petitioners. SO ORDERED. 7) G.R. No. 140945 May 16, 2005

NATIONAL HOUSING AUTHORITY, petitioner, vs. JOSE EVANGELISTA, respondent. DECISION AUSTRIA-MARTINEZ, J.: A person who was not impleaded in the complaint cannot be bound by the decision rendered therein, for no man shall be affected by a proceeding in which he is a stranger.1 This refers to the petition for review on certiorari filed by the National Housing Authority assailing the decision2 of the Court of Appeals (CA) in CAG.R. SP No. 51646, granting respondents petition for annulment of judgment. The dispositive portion of the decision reads:

WHEREFORE, the petition is granted. The assailed part of paragraph No. 3 of the dispositive portion of the decision dated November 29, 1995 of the Regional Trial Court, Br. CIII, Quezon City in Civil Case No. Q-91-10071 is hereby declared void, non-binding and inapplicable in so far as petitioners TCT No. 122944 is concerned. Let a copy hereof be furnished the Register of Deeds of Quezon City for the proper annotation. No pronouncement as to costs. SO ORDERED.3 Petitioner now comes before the Court with the following assignment of errors allegedly committed by the CA: I THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE DECISION OF THE LOWER COURT IS NOT BINDING ON HEREIN RESPONDENT JOSE EVANGELISTA BECAUSE THE LOWER COURT DID NOT ACQUIRE JURISDICTION OVER HIS PERSON. II THE HONORABLE COURT LIKEWISE ERRED IN ANNULLING THE DECISION OF THE LOWER COURT ON THE GROUND OF LACK OF DUE PROCESS OF LAW BECAUSE RESPONDENT JOSE EVANGELISTA WAS NOT IMPLEADED AS A PARTY DEFENDANT IN PETITIONERS ACTION FOR RECOVERY OF TITLE.4 The assailed decision of the CA originated from a civil case filed by petitioner before the Regional Trial Court of Quezon City (Branch CIII) for recovery of real property, docketed as Civil Case No. Q-91-10071.5 Said case involves a real property measuring 915.50 square meters and located in V. Luna Road, Quezon City, originally awarded in 1968 by the Peoples Homesite and Housing Corporation (petitioners predecessor) to a certain Adela Salindon. After the death of Salindon, her heirs executed an extra-judicial settlement where the property was transferred to Arsenio Florendo, Jr., Milagros Florendo, Beatriz Florendo and Eloisa Florendo-Kulphongpatana. However, in a decision in G.R. No. L-60544, entitled "Arsenio Florendo, Jr., et al. vs. Hon. Perpetuo D. Coloma, Presiding Judge of Branch VII, City Court of Quezon City, et al.," rendered by the Court on May 19, 1984, the award in favor of Salindon was nullified and set aside for having been issued in excess of jurisdiction and with grave abuse of discretion, and petitioner was declared the owner of the property. Despite said decision, the property was auctioned off by the Quezon City Treasurers Office on April 23, 1986, for unpaid real property taxes by the Florendos. The highest bidder was Luisito Sarte. Because the Register of Deeds refused to register the final deed of sale issued by the City Treasurer, Sarte filed a petition for issuance of title and confirmation of sale, which was granted by the Regional Trial Court of Quezon City (Branch 84). Consequently, the Register of Deeds issued Transfer Certificate of Title (TCT) No. 28182 in the name of Sarte, who divided the property into Lot 1-A, measuring 570.50 square meters and covered by TCT No. 108070, and Lot 1-B, measuring 345 square meters and covered by TCT No. 108071.6

It was in 1991 that petitioner filed Civil Case No. Q-91-10071 with Sarte, the City Treasurer of Quezon City and the Quezon City Register of Deeds, as defendants. While the case was pending, Sarte executed in favor of respondent Jose Evangelista, a Deed of Assignment dated December 2, 1994, covering Lot 1-A.7 TCT No. 108070 was cancelled and TCT No. 122944 was issued in the name of respondent on December 21, 1994. Subsequently, the Register of Deeds annotated on TCT No. 122944 an Affidavit of Adverse Claim of petitioner, to wit: Entry No. 7159/T-No. 122944: AFFIDAVIT OF ADVERSE CLAIM Executed under oath by Manuel V. Fernandez (in behalf of NHA), adverse claimant, claiming among others that NHA has the right of the ownership of the property being the subject of controversy in Civil Case No. Q-91-10071, entitled "National Housing Authority vs. Luisito Sarte, et al.," now pending before RTC, Br. 103, Q.C., Doc. No. 76, page 16, Bk. I, s. of 1995 of Not. Pub. of Q.C. Belsie Cailipan Sy. Date of the instrument May 4, 1995 Date of the inscription May 4, 1995.8 and Notice of Lis Pendens, to wit: Entry No. 1367/T-No. 122944: NOTICE OF LIS PENDENS By virtue of a notice of lis pendens presented and filed by Oscar I. Garcia & Virgilio C. Abejo, notice is hereby given that a case has been pending RTC, Q.C. in Civil Case No. Q-95-23940 entitled "National Housing Authority, plaintiff, -vs.-Luistio Sarte, Jose Evangelista, Northern Star Agri-Business Corporation, BPI Agricultural Development Bank & the Register of Deeds of Quezon City, defendants," plaintiff praying for Annulment of the Deed of Assignment, Deed of Absolute Sale, Real Estate Mortgage, Cancellation of TCT Nos. 122944 and 126639 & damages. Date of the Instrument May 24, 1995 Date of the Inscription - May 31, 19959 On May 1, 1995, petitioner filed a motion for leave to file supplemental complaint in Civil Case No. Q-91-10071, seeking to include respondent Evangelista, Northern Star Agri-Business Corporation and BPI Agricultural Development Bank as defendants. The proposed additional defendants were the subsequent purchasers of Lots 1-A and 1-B.10 The trial court, however, denied the motion in its Order dated May 17, 1995.11 Thus, petitioner, on May 31, 1995, filed before the Regional Trial Court of Quezon City (Branch 82) a complaint for Annulment of Deed of Assignment, Deed of Absolute Sale, Real Estate Mortgage, Cancellation of TCT Nos. 122944 and 126639, and Damages, against Sarte, respondent Evangelista, Northern Star Agri-Business Corporation, BPI Agricultural Development Bank and the Register of Deeds of Quezon City, docketed as Civil Case No. Q-95-23940.12 But the trial court dismissed without prejudice said case on October 23, 1995, on the ground of the pendency of Civil Case No. Q-91-10071.13

In a decision dated November 29, 1995, the trial court, in Civil Case No. Q-91-10071, rendered its decision in favor of petitioner, with the following dispositive portion: ACCORDINGLY, judgment is hereby rendered in favor of the plaintiff National Housing Authority as follows: 1. The auction sale conducted by the Quezon City Treasurer in 1986 of the parcel of land consisting of 915.50 sq. m. subject of this case previously covered by TCT No. 138007 of the Register of Deeds of Quezon City issued in the name of Adela Salindon and wherein defendant Luisito Sarte was the auction buyer and TCT No. 239729 in the name of Arsenio Florendo, Milagros Florendo, Beatriz Florendo and Eloisa F. Kulphongpatana is hereby declared null and void ab initio; 2. TCT No. 28182 subsequently issued in the name of defendant Luisito Sarte by the Quezon City Registry of Deeds is hereby declared null and void ab initio and the herein defendant Quezon City Register of Deeds is hereby ordered to cancel said TCT 28182 in the name of Luisito Sarte; 3. Any transfers, assignment, sale or mortgage of whatever nature of the parcel of land subject of this case made by defendant Luisito Sarte or his/her agents or assigns before or during the pendency of the instant case are hereby declared null and void, together with any transfer certificates of title issued in connection with the aforesaid transactions by the Register of Deeds of Quezon City who is likewise ordered to cancel or cause the cancellation of such TCTs; 4. The defendant Register of Deeds of Quezon City is hereby ordered to issue a new transfer certificate of title over the entire parcel of land (915.50 sq. m.) subject of this case in favor of the National Housing Authority by way of satisfying the Supreme Court in G.R. No. 50544 promulgated on May 1984; 5. The NHA is hereby required and authorized to put in place on the property at bar a notice, readable, bold, and stable, sufficiently signifying the essence of this courts decision so that no person may err as to the real ownership of the instant parcel of land and to fence the same to prevent entry of squatters or other illegal intruders. The court further renders judgment as follows: 1. No pronouncement as to attorneys fees, costs and other damages as fundamentally the main responsible character here are the public officers sued in their official capacity. 2. The complaint-in-intervention by Teresita Vasquez is held premature in view of the disposition herein made in favor of NHA which can only fully act with regard to the claim of said intervenor after this decision becomes final. Moreover, insofar as and to the extent in which intervenor Vasquez has joined the NHA in the case at bench, her assertions and prayers have already been adjudged in this decision in favor of the plaintiff National Housing Authority. SO ORDERED.14 (Emphasis supplied)

Respondent then filed with the CA a petition for annulment of the trial courts judgment, particularly paragraph 3 of the dispositive portion, referring to the nullity of any transfer, assignment, sale or mortgage made by Sarte. In his petition, respondent alleged extrinsic fraud as ground. According to respondent, since he was not a party to Civil Case No. Q-91-10071, he was prevented from ventilating his cause, right or interest over the property, and the judgment was not binding on him, as the trial court did not acquire jurisdiction over his person.15 The CA granted the petition and declared null and void paragraph 3 of the dispositive portion of the trial courts decision insofar as petitioners title to the property is concerned.16 The CA found that respondent was not a party to Civil Case No. Q-91-10071 and the trial court did not acquire any jurisdiction over his person. The CA also ruled that the judgment violated respondents right against deprivation of the property without due process of law.17 Its motion for reconsideration having been denied by the CA, petitioner took the present recourse. Petitioner insists that it should not be faulted for the trial courts denial of its motion to include respondent as defendant in Civil Case No. Q-9110071. Petitioner also claims that the auction sale of the property by the City Treasurer of Quezon City is void ab initio because it was never supposed to be included in the auction sale as petitioner, which has been declared by the Court in G.R. No. L-60544 as the owner of the property, is exempt from payment of taxes. Hence, Sarte cannot claim any right over the same and respondent, having bought it from Sarte, does not acquire any better right thereto. Petitioner also alleges that respondent is not a buyer in good faith because the latter was aware of the pending litigation involving the property.18 The sole issue in this case is whether or not the CA erred in annulling paragraph 3 of the trial courts decision on grounds of lack of jurisdiction and lack of due process of law. Annulment of judgment is a recourse equitable in character, allowed only in exceptional cases as where there is no available or other adequate remedy.19 Jurisprudence and Section 2, Rule 47 of the Rules of Court lay down the grounds upon which an action for annulment of judgment may be brought, i.e., (1) extrinsic fraud, and (2) lack of jurisdiction or denial of due process.20 Lack of jurisdiction refers to either lack of jurisdiction over the person of the defending party or over the subject matter of the claim, and in either case, the judgment or final order and resolution are void.21 A trial court acquires jurisdiction over the person of the defendant either by his voluntary appearance in court and his submission to its authority or by service of summons.22 In this case, it is undisputed that respondent was never made a party to Civil Case No. Q-91-10071. It is basic that no man shall be affected by any proceeding to which he is a stranger, and strangers to a case are not bound by judgment rendered by the court.23 Yet, the assailed paragraph 3 of the trial courts decision decreed that "(A)ny transfers, assignment, sale or mortgage of whatever nature of the parcel of land subject of this case made by defendant Luisito Sarte or his/her agents or assigns before or during the pendency of the instant case are hereby declared null and void, together with any transfer certificates of title issued in connection with the aforesaid transactions by the Register of Deeds of Quezon City who is likewise ordered to cancel or cause the cancellation of such TCTs." Respondent is adversely affected by such judgment, as he was the subsequent purchaser of the subject property from Sarte, and title was already transferred to him. It will be the height of inequity to allow respondents title to be nullified without being given the opportunity to present any evidence in support of his ostensible ownership of the property.

Much more, it is tantamount to a violation of the constitutional guarantee that no person shall be deprived of property without due process of law.24 Clearly, the trial courts judgment is void insofar as paragraph 3 of its dispositive portion is concerned. Petitioner argues that it should not bear the consequence of the trial courts denial of its motion to include respondent as defendant in Civil Case No. Q-91-10071. True, it was not petitioners fault that respondent was not made a party to the case. But likewise, it was not respondents fault that he was not given the opportunity to present his side of the story. Whatever prompted the trial court to deny petitioners motion to include respondent as defendant is not for the Court to reason why. Petitioner could have brought the trial courts denial to the CA oncertiorari but it did not. Instead, it filed Civil Case No. Q-95-23940 for Annulment of Deed of Assignment, Deed of Absolute Sale, Real Estate Mortgage, Cancellation of TCT Nos. 122944 and 126639, and Damages, against herein respondent Sarte and others. Unfortunately for petitioner, this was dismissed by the Regional Trial Court of Quezon City (Branch 82) on the ground of litis pendentia. Be that as it may, the undeniable fact remains -- respondent is not a party to Civil Case No. Q-91-10071, and paragraph 3, or any portion of the trial courts judgment for that matter, cannot be binding on him. Petitioner also claims that respondent is not a buyer in good faith, citing as badge of knowledge, respondents alleged awareness of the pending lawsuit over the property. Petitioner claims that respondent had admitted that before TCT No. 122944 was issued to the latter, the notice of lis pendens was already annotated at the back of the title. Respondent, however, denied having made such admission.25 There is merit to respondents denial. Based on petitioners claim, one would assume that the notice of lis pendens was annotated on the title preceding TCT No. 122944, which is TCT No. 108070 in the name of Sarte. However, there is nothing in TCT No. 108070 which shows any annotation of a notice of lis pendens or adverse claim. The last entries on TCT No. 108070 were Entry No. 4172 made on May 24, 1994, canceling Entry No. 674, which is an annotation of a mortgage,26 and a registration of the Deed of Assignment between Sarte and respondent, which was made on December 21, 1994.27It was already after respondent acquired the property and after TCT No. 122944 was issued in his name that petitioners adverse claim (Entry No. 7159) and a notice of lis pendens (Entry No. 1367) were annotated.28 It should also be pointed out that the notice of lis pendens annotated on the back of respondents title refers to Civil Case No. Q-95-23940, and not Civil Case No. Q-91-10071. It was in petitioners Affidavit of Adverse Claim that Civil Case No. Q-91-10071 was indicated. To repeat, as records show, at the time the notice of lis pendens and adverse claim was annotated, the Deed of Assignment has already been entered into by respondent and Sarte, and TCT No. 122944 was already issued in respondents name on December 21, 1994. Petitioner filed Civil Case No. Q-91-10071 way back in 1991. TCT Nos. 108070 and 108071 were issued in Sartes name on May 13, 1994;29 TCT No. 122944 was issued in respondents name on December 21, 1994.30 Petitioner had enough opportunity to have its adverse claim and a notice of lis pendens annotated on Sartes title before the latter assigned the property to Evangelista, but it did not do so. The adverse claim was annotated only on May 4, 1995 and the notice of lis pendens, on May 31, 1995.31 While a notice of lis pendens "serves as a warning to a prospective purchaser or incumbrancer that the particular property is in litigation; and that he should keep his hands off the same, unless he intends to gamble on the results of the litigation," such constructive notice operates as such from the date of the registration of the notice of lis pendens,32 which in this case, was, at the earliest, on May 4, 1995. This was long after title to the property was transferred to respondent.

Note also must be made that respondent was not furnished by petitioner of a copy of its motion for leave to file supplemental complaint.33 Thus, it cannot be said that respondent knew of the existence of Civil Case No. Q-91-10071. Moreover, the filing of Civil Case No. Q-95-23940 against respondent and other defendants was made only on May 31, 1995, and at that point, TCT No. 122944 was already issued in respondents name. Lest it be misunderstood, the Court is not declaring that respondent is a purchaser of the property in good faith. This is an issue that cannot be dealt with by the Court in this forum, as the only issue in this case is whether or not the CA erred in annulling paragraph 3 of the trial courts decision on grounds of lack of jurisdiction and lack of due process of law. Whether or not respondent is a purchaser in good faith is an issue which is a different matter altogether that must be threshed out in a full-blown trial for that purpose in an appropriate case and in the proper forum. Also, CA-G.R. CV No. 52466, which is the appeal from the trial courts decision in Civil Case No. Q-91-10071, is pending before the CA, and it would be premature and unwarranted for the Court to render any resolution that would unnecessarily interfere with the appellate proceedings. Insofar as this petition is concerned, what the Court declares is that the notice of lis pendens cannot serve as constructive notice to respondent for having been annotated after the transfer of the property to him and that he is entitled to have paragraph 3 of the trial courts decision annulled. WHEREFORE, the petition for review on certiorari is DENIED for lack of merit and the assailed Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 51646 are hereby AFFIRMED. Costs against petitioner. SO ORDERED. 8) G.R. No. 162788. July 28, 2005 Spouses JULITA DE LA CRUZ and FELIPE DE LA CRUZ, Petitioners, vs. PEDRO JOAQUIN, Respondents. DECISION PANGANIBAN, J.: The Rules require the legal representatives of a dead litigant to be substituted as parties to a litigation. This requirement is necessitated by due process. Thus, when the rights of the legal representatives of a decedent are actually recognized and protected, noncompliance or belated formal compliance with the Rules cannot affect the validity of the promulgated decision. After all, due process had thereby been satisfied. The Case

Before us is a Petition for Review1 under Rule 45 of the Rules of Court, assailing the August 26, 2003 Decision2and the March 9, 2004 Resolution3 of the Court of Appeals (CA) in CA-GR CV No. 34702. The challenged Decision disposed as follows: "WHEREFORE, the foregoing considered, the appeal is DISMISSED and the assailed decision accordingly AFFIRMED in toto. No costs."4 On the other hand, the trial courts affirmed Decision disposed as follows: "WHEREFORE, judgment is hereby rendered: "a) declaring the Deed of Absolute Sale (Exh. D) and Kasunduan (Exhibit B), to be a sale with right of repurchase; "b) ordering the plaintiff to pay the defendants the sum of P9,000.00 by way of repurchasing the land in question; "c) ordering the defendants to execute a deed of reconveyance of said land in favor of the plaintiff after the latter has paid them the amount of P9,000.00 to repurchase the land in question; "d) ordering the defendants to yield possession of the subject land to the plaintiff after the latter has paid them the amount of P9,000.00 to repurchase the property from them; and "e) ordering the defendants to pay the plaintiff the amount of P10,000.00 as actual and compensatory damages; the amount of P5,000[.00] as exemplary damages; the amount of P5,000.00 as expenses of litigation and the amount of P5,000.00 by way of attorneys fees."5 The Facts The case originated from a Complaint for the recovery of possession and ownership, the cancellation of title, and damages, filed by Pedro Joaquin against petitioners in the Regional Trial Court of Baloc, Sto. Domingo, Nueva Ecija.6 Respondent alleged that he had obtained a loan from them in the amount of P9,000 on June 29, 1974, payable after five (5) years; that is, on June 29, 1979. To secure the payment of the obligation, he supposedly executed a Deed of Sale in favor of petitioners. The Deed was for a parcel of land in Pinagpanaan, Talavera, Nueva Ecija, covered by TCT No. T-111802. The parties also executed another document entitled "Kasunduan." 7 Respondent claimed that the Kasunduan showed the Deed of Sale to be actually an equitable mortgage.8Spouses De la Cruz contended that this document was merely an accommodation to allow the repurchase of the property until June 29, 1979, a right that he failed to exercise.9 On April 23, 1990, the RTC issued a Decision in his favor. The trial court declared that the parties had entered into a sale with a right of repurchase.10 It further held that respondent had made a valid tender of payment on two separate occasions to exercise his right of repurchase.11 Accordingly, petitioners were required to reconvey the property upon his payment.12

Ruling of the Court of Appeals Sustaining the trial court, the CA noted that petitioners had given respondent the right to repurchase the property within five (5) years from the date of the sale or until June 29, 1979. Accordingly, the parties executed theKasunduan to express the terms and conditions of their actual agreement.13 The appellate court also found no reason to overturn the finding that respondent had validly exercised his right to repurchase the land.14 In the March 9, 2004 Resolution, the CA denied reconsideration and ordered a substitution by legal representatives, in view of respondents death on December 24, 1988.15 Hence, this Petition.16 The Issues Petitioners assign the following errors for our consideration: "I. Public Respondent Twelfth Division of the Honorable Court of Appeals seriously erred in dismissing the appeal and affirming in toto the Decision of the trial court in Civil Case No. SD-838; "II. Public Respondent Twelfth Division of the Honorable Court of Appeals likewise erred in denying [petitioners] Motion for Reconsideration given the facts and the law therein presented."17 Succinctly, the issues are whether the trial court lost jurisdiction over the case upon the death of Pedro Joaquin, and whether respondent was guilty of forum shopping.18 The Courts Ruling The Petition has no merit. First Issue: Jurisdiction Petitioners assert that the RTCs Decision was invalid for lack of jurisdiction.19 They claim that respondent died during the pendency of the case. There being no substitution by the heirs, the trial court allegedly lacked jurisdiction over the litigation.20 Rule on Substitution

When a party to a pending action dies and the claim is not extinguished,21 the Rules of Court require a substitution of the deceased. The procedure is specifically governed by Section 16 of Rule 3, which reads thus: "Section 16. Death of a 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. Failure of counsel to comply with this duty shall be a ground for disciplinary action. "The heirs of the deceased may be allowed to be substituted for the deceased, without requiring the appointment of an executor or administrator and the court may appoint a guardian ad litem for the minor heirs. "The court shall forthwith order said legal representative or representatives to appear and be substituted within a period of thirty (30) days from notice. "If no legal representative is named by the counsel for the deceased party, or if the one so named shall fail to appear within the specified period, the court may order the opposing party, within a specified time, to procure the appointment of an executor or administrator for the estate of the deceased, and the latter shall immediately appear for and on behalf of the deceased. The court charges in procuring such appointment, if defrayed by the opposing party, may be recovered as costs." The rule on the substitution of parties was crafted to protect every partys right to due process.22 The estate of the deceased party will continue to be properly represented in the suit through the duly appointed legal representative.23 Moreover, no adjudication can be made against the successor of the deceased if the fundamental right to a day in court is denied.24 The Court has nullified not only trial proceedings conducted without the appearance of the legal representatives of the deceased, but also the resulting judgments.25 In those instances, the courts acquired no jurisdiction over the persons of the legal representatives or the heirs upon whom no judgment was binding.26 This general rule notwithstanding, a formal substitution by heirs is not necessary when they themselves voluntarily appear, participate in the case, and present evidence in defense of the deceased.27 These actions negate any claim that the right to due process was violated. The Court is not unaware of Chittick v. Court of Appeals,28 in which the failure of the heirs to substitute for the original plaintiff upon her death led to the nullification of the trial courts Decision. The latter had sought to recover support in arrears and her share in the conjugal partnership. The children who allegedly substituted for her refused to continue the case against their father and vehemently objected to their inclusion as parties.29Moreover, because he died during the pendency of the case, they were bound to substitute for the defendant also. The substitution effectively merged the persons of the plaintiff and the defendant and thus extinguished the obligation being sued upon.30 Clearly, the present case is not similar, much less identical, to the factual milieu of Chittick.

Strictly speaking, the rule on the substitution by heirs is not a matter of jurisdiction, but a requirement of due process. Thus, when due process is not violated, as when the right of the representative or heir is recognized and protected, noncompliance or belated formal compliance with the Rules cannot affect the validity of a promulgated decision.31 Mere failure to substitute for a deceased plaintiff is not a sufficient ground to nullify a trial courts decision. The alleging party must prove that there was an undeniable violation of due process. Substitution in the Instant Case The records of the present case contain a "Motion for Substitution of Party Plaintiff" dated February 15, 2002, filed before the CA. The prayer states as follows: "WHEREFORE, it is respectfully prayed that the Heirs of the deceased plaintiff-appellee as represented by his daughter Lourdes dela Cruz be substituted as party-plaintiff for the said Pedro Joaquin. "It is further prayed that henceforth the undersigned counsel32 for the heirs of Pedro Joaquin be furnished with copies of notices, orders, resolutions and other pleadings at its address below." Evidently, the heirs of Pedro Joaquin voluntary appeared and participated in the case. We stress that the appellate court had ordered33 his legal representatives to appear and substitute for him. The substitution even on appeal had been ordered correctly. In all proceedings, the legal representatives must appear to protect the interests of the deceased.34 After the rendition of judgment, further proceedings may be held, such as a motion for reconsideration or a new trial, an appeal, or an execution.35 Considering the foregoing circumstances, the Motion for Substitution may be deemed to have been granted; and the heirs, to have substituted for the deceased, Pedro Joaquin. There being no violation of due process, the issue of substitution cannot be upheld as a ground to nullify the trial courts Decision. Second Issue: Forum Shopping Petitioners also claim that respondents were guilty of forum shopping, a fact that should have compelled the trial court to dismiss the Complaint.36 They claim that prior to the commencement of the present suit on July 7, 1981, respondent had filed a civil case against petitioners on June 25, 1979. Docketed as Civil Case No. SD-742 for the recovery of possession and for damages, it was allegedly dismissed by the Court of First Instance of Nueva Ecija for lack of interest to prosecute. Forum Shopping Defined

Forum shopping is the institution of two or more actions or proceedings involving the same parties for the same cause of action, either simultaneously or successively, on the supposition that one or the other court would make a favorable disposition.37 Forum shopping may be resorted to by a party against whom an adverse judgment or order has been issued in one forum, in an attempt to seek a favorable opinion in another, other than by an appeal or a special civil action for certiorari.38 Forum shopping trifles with the courts, abuses their processes, degrades the administration of justice, and congests court dockets.39 Willful and deliberate violation of the rule against it is a ground for the summary dismissal of the case; it may also constitute direct contempt of court.40 The test for determining the existence of forum shopping is whether the elements of litis pendentia are present, or whether a final judgment in one case amounts to res judicata in another.41 We note, however, petitioners claim that the subject matter of the present case has already been litigated and decided. Therefore, the applicable doctrine is res judicata.42 Applicability of Res Judicata Under res judicata, a final judgment or decree on the merits by a court of competent jurisdiction is conclusive of the rights of the parties or their privies, in all later suits and on all points and matters determined in the previous suit.43 The term literally means a "matter adjudged, judicially acted upon, or settled by judgment."44 The principle bars a subsequent suit involving the same parties, subject matter, and cause of action. Public policy requires that controversies must be settled with finality at a given point in time. The elements of res judicata are as follows: (1) the former judgment or order must be final; (2) it must have been rendered on the merits of the controversy; (3) the court that rendered it must have had jurisdiction over the subject matter and the parties; and (4) there must have been -between the first and the second actions -- an identity of parties, subject matter and cause of action.45 Failure to Support Allegation The onus of proving allegations rests upon the party raising them.46 As to the matter of forum shopping and res judicata, petitioners have failed to provide this Court with relevant and clear specifications that would show the presence of an identity of parties, subject matter, and cause of action between the present and the earlier suits. They have also failed to show whether the other case was decided on the merits. Instead, they have made only bare assertions involving its existence without reference to its facts. In other words, they have alleged conclusions of law without stating any factual or legal basis. Mere mention of other civil cases without showing the identity of rights asserted and reliefs sought is not enough basis to claim that respondent is guilty of forum shopping, or thatres judicata exists.47 WHEREFORE, the Petition is DENIED and the assailed Decision and Resolution are AFFIRMED. Costs against petitioners. SO ORDERED. 9) G.R. Nos. 146653-54 February 20, 2006

WESTMONT PHARMACEUTICALS, INC., UNITED LABORATORIES, INC., and/or JOSE YAO CAMPOS, CARLOS EJERCITO, ERNESTO SALAZAR, ELIEZER SALAZAR, JOSE SOLIDUM, JR., Petitioners, vs. RICARDO C. SAMANIEGO, Respondent. x---------------x G.R. Nos. 147407-08 February 20, 2006

RICARDO C. SAMANIEGO, Petitioner, vs. WESTMONT PHARMACEUTICALS, INC. and UNITED LABORATORIES, INC., Respondents. DECISION SANDOVAL-GUTIERREZ, J.: Before us are consolidated petitions for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, filed by both contending parties assailing the Decision1 dated January 8, 2001 and the Resolution2 dated March 9, 2001 rendered by the Court of Appeals in CA-G.R. SP No. 60400. The factual antecedents as borne by the records are: On May 5, 1998, Ricardo C. Samaniego filed with the Office of the Labor Arbiter, Regional Arbitration Branch (RAB) No. II, Tuguegarao City, Cagayan, a complaint for illegal dismissal and damages against Westmont Pharmaceuticals, Inc. (Westmont) and United Laboratories, Inc. (Unilab), herein respondents. Also impleaded as respondents are Unilabs officers, Jose Yao Campos, Carlos Ejercito, Ernesto Salazar, Eliezer Salazar, and Jose Solidum, Jr. The complaint alleges that Unilab initially hired Samaniego as Professional Service Representative of its marketing arm, Westmont. Later, Unilab promoted him as Senior Business Development Associate and assigned him in Isabela as Acting District Manager of Westmont and Chairman of Unilab Special Projects. In August 1995, he was transferred to Metro Manila pending investigation of his subordinate and physicians of Region II involved in a sales discount and Rx trade-off controversy. He was then placed under "floating status" and assigned to perform duties not connected with his position, like fetching at the airport physicians coming from the provinces; making deposits in banks; fetching field men and doing messengerial works. His transfer to Metro Manila resulted in the diminution of his salary as his per diem was reduced from P13,194.00 to P2,299.00 only.

On June 26, 1998, Westmont and Unilab filed a motion to dismiss Samaniegos complaint on the ground of improper venue and lack of cause of action. They argued that the complaint should have been filed with the National Labor Relations Commission (NLRC) in Manila, not with the Office of the Labor Arbiter in Tuguegarao City, Cagayan; and that the action should only be against Westmont, Samaniegos employer. Samaniego filed an Opposition to the motion to which Westmont and Unilab filed a Reply. On August 13, 1998, the Labor Arbiter denied the motion to dismiss, citing Section 1, Rule IV of the NLRC New Rules of Procedure. This provision allows the Labor Arbiter to order a change of venue in meritorious cases. The Labor Arbiter then set the case for preliminary conference during which Westmont and Unilab expressly reserved their right to contest the order denying their motion to dismiss. On September 3, 1998, Westmont and Unilab filed with the NLRC an Urgent Petition to Change or Transfer Venue. On the same date, they filed with the Office of the Labor Arbiter in Cagayan a Motion to Suspend Proceedings in view of the pendency of their petition for change or transfer of venue in the NLRC. On September 8, 1998, the Labor Arbiter issued an Order directing the parties to submit their respective position papers and supporting documents within twenty (20) days from notice, after which the case shall be deemed submitted for decision. On September 22, 1998, the NLRC, acting on the petition to change venue, directed the Labor Arbiter to forward to the NLRC the records of the case. The Labor Arbiter retained the complete duplicate original copies of the records and set the case for hearing. Westmont and Unilab repeatedly filed motions for cancellation of the scheduled dates of hearing on the ground that their petition for change of venue has remained unresolved. They did not file their position papers nor did they attend the hearing. Thus, the Labor Arbiter considered the case submitted for Decision based on the records and the evidence submitted by Samaniego. On December 16, 1998, the Labor Arbiter rendered a Decision finding that Samaniego was "illegally and unjustly dismissed constructively" and ordering his reinstatement to his former position without loss of seniority rights and privileges; and payment of his full backwages from the date of his dismissal from the service up to the date of his actual reinstatement, as well as per diem differential, profit share, and actual, moral and exemplary damages, plus 10% attorneys fees. On January 21, 1999, Westmont and Unilab interposed an appeal to the NLRC. In its Resolution dated August 31, 1999, the NLRC dismissed the petition for change of venue, holding that when the cause of action arose, Samaniegos workplace was in Isabela over which the Labor Arbiter in Cagayan has jurisdiction; and that the Labor Arbiters Decision is not appealable. In the same Resolution, the NLRC declared the Labor Arbiters Decision null and void, finding that:

x x x the Executive Labor Arbiter below only allowed the transmittal of the official records of the instant case to the Commission. Throwing caution into the wind, he retained complete duplicate original copies of the same, conducted further proceedings and rendered his now contested Decision despite the pendency of the appeal-treated Urgent Petition for Change of Venue. As a consequence, respondents-appellants were deprived of their opportunity to be heard and defend themselves on the issues raised in the instant case. They were therefore denied of their right to due process of law in violation of Section 1, Article III of the Constitution which provides: "No person shall be deprived of his....property without due process of law." The dispositive portion of the NLRC Resolution reads: WHEREFORE, premises considered, the main Appeal and Motion to Quash are hereby PARTIALLY GRANTED and the appeal-treated Petition for Change of Venue DISMISSED for lack of jurisdiction and/or merit. Accordingly, the Decision appealed from is declared NULL and VOID and the Order appealed from SUSTAINED insofar as the denial of the Motion to Dismiss is concerned. The entire records of the instant case are DIRECTED to be immediately remanded to the Executive Labor Arbiter of origin for immediate conduct of further proceeding. The respondentsappellants are DIRECTED to pay complainant-appellee the amount of Two Hundred Thirty Thousand Seven Hundred Twenty Pesos and Thirty Centavos (P230,720.30) representing his salary from January 1, 1999 to August 31, 1999, the date of issuance of this Resolution less any salary collected by him by way of execution pending appeal. SO ORDERED. The parties separately filed their motions for reconsideration but were both denied by the NLRC in its Resolution dated June 27, 2000. On January 8, 2001, the Court of Appeals, acting on the parties petitions for certiorari, rendered its Decision setting aside the NLRC Resolutions and affirming with modification the Labor Arbiters Decision in the sense that the award of moral damages was reduced from P5,000,000.00 to P500,000.00; and the exemplary damages from P1,000,000.00 toP300,000.00, thus: xxx While this Court concurs with the ruling of the Executive Labor Arbiter that there was constructive dismissal committed against Ricardo Samaniego, this Court finds the award on moral and exemplary damages unconscionable. xxx WHEREFORE, the NLRCs resolutions dated August 31, 1999 and June 27, 2000 are hereby SET ASIDE. The decision of the Executive Labor Arbiter dated December 16, 1998 is REINSTATED and AFFIRMED in all respect except with the following modification: the moral and exemplary damages are reduced to P500,000.00 and P300,000.00, respectively. SO ORDERED.

Hence, these consolidated petitions for review on certiorari filed by the opposing parties. In their petition, Westmont and Unilab allege that the Court of Appeals erred in denying their motion to dismiss by reason of improper venue and in sustaining the Labor Arbiters Decision declaring that Samaniego was constructively dismissed; and that they were denied due process. For his part, Samaniego maintains that the Court of Appeals did not err in its ruling. However, he claims that the Appellate Court should not have reduced the Labor Arbiters award for moral and exemplary damages. The petition to change or transfer venue filed by Westmont and Unilab with the NLRC is not the proper remedy to assail the Labor Arbiters Order denying their motion to dismiss. Such Order is merely interlocutory, hence, not appealable. Section 3, Rule V of the Rules of Procedure of the NLRC, as amended, provides: SECTION 3. Motion to Dismiss. On or before the date set for the conference, the respondent may file a motion to dismiss. Any motion to dismiss on the ground of lack of jurisdiction, improper venue, or that the cause of action is barred by prior judgment, prescription or forum shopping, shall be immediately resolved by the Labor Arbiter by a written order. An order denying the motion to dismiss or suspending its resolution until the final determination of the case is not appealable. In Indiana Aerospace University v. Commission on Higher Education,3 we held: An order denying a motion to dismiss is interlocutory, and so the proper remedy in such a case is to appeal after a decision has been rendered. Assuming that the petition to change or transfer venue is the proper remedy, still we find that the Court of Appeals did not err in sustaining the Labor Arbiters Order denying the motion to dismiss. Section 1(a), Rule IV of the NLRC Rules of Procedure, as amended, provides:1avvphil.net SECTION 1. Venue. (a) All cases which Labor Arbiters have authority to hear and decide may be filed in the Regional Arbitration Branch having jurisdiction over the workplace of the complainant/petitioner. For purposes of venue, workplace shall be understood as the place or locality where the employee is regularly assigned when the cause of action arose. It shall include the place where the employee is supposed to report back after a temporary detail, assignment or travel. In the case of field employees, as well as ambulant or itinerant workers, their workplace is where they are regularly assigned, or where they are supposed to regularly receive their salaries/wages or work instructions from and report the results of their assignment to, their employers. In Sulpicio Lines, Inc. v. NLRC,4 we held:

The question of venue essentially relates to the trial and touches more upon the convenience of the parties, rather than upon the substance and merits of the case. Our permissive rules underlying provisions on venue are intended to assure convenience for the plaintiff and his witnesses and to promote the ends of justice. This axiom all the more finds applicability in cases involving labor and management because of the principle, paramount in our jurisdiction, that the State shall afford full protection to labor. xxx This provision is obviously permissive, for the said section uses the word "may," allowing a different venue when the interests of substantial justice demand a different one. In any case, as stated earlier, the Constitutional protection accorded to labor is a paramount and compelling factor, provided the venue chosen is not altogether oppressive to the employer. Here, it is undisputed that Samaniegos regular place of assignment was in Isabela when he was transferred to Metro Manila or when the cause of action arose. Clearly, the Appellate Court was correct in affirming the Labor Arbiters finding that the proper venue is in the RAB No. II at Tuguegarao City, Cagayan. On the contention of Westmont and Unilab that they were denied due process, well settled is the rule that the essence of due process is simply an opportunity to be heardor, as applied to administrative proceedings, an opportunity to explain ones side or an opportunity to seek a reconsideration of the action or ruling complained of. The requirement of due process in labor cases before a Labor Arbiter is satisfied when the parties are given the opportunity to submit their position papers to which they are supposed to attach all the supporting documents or documentary evidence that would prove their respective claims, in the event the Labor Arbiter determines that no formal hearing would be conducted or that such hearing was not necessary.5 As shown by the records, the Labor Arbiter gave Westmont and Unilab, not only once, but thrice, the opportunity to submit their position papers and supporting affidavits and documents. But they were obstinate. Clearly, they were not denied their right to due process. The ultimate issue for our resolution is whether the Court of Appeals erred in holding that Samaniego was constructively dismissed by Westmont and Unilab. To recapitulate, Samaniego claims that upon his reassignment and/or transfer to Metro Manila, he was placed on "floating status" and directed to perform functions not related to his position. For their part, Westmont and Unilab explain that his transfer is based on a sound business judgment, a management prerogative. In constructive dismissal, the employer has the burden of proving that the transfer of an employee is for just and valid grounds, such as genuine business necessity. The employer must be able to show that the transfer is not unreasonable, inconvenient, or prejudicial to the employee. It must not involve a demotion in rank or a diminution of salary and other benefits. If the employer cannot overcome this burden of proof, the employees transfer shall be tantamount to unlawful constructive dismissal.6

Westmont and Unilab failed to discharge this burden. Samaniego was unceremoniously transferred from Isabela to Metro Manila. We hold that such transfer is economically and emotionally burdensome on his part. He was constrained to maintain two residences one for himself in Metro Manila, and the other for his family in Tuguegarao City, Cagayan. Worse, immediately after his transfer to Metro Manila, he was placed "on floating status" and was demoted in rank, performing functions no longer supervisory in nature. There may also be constructive dismissal if an act of clear insensibility or disdain by an employer becomes so unbearable on the part of the employee that it could foreclose any choice by him except to forego his continued employment.7 This was what happened to Samaniego. Thus, he is entitled to reinstatement without loss of seniority rights, full backwages, inclusive of allowances, and other benefits or their monetary equivalent, computed from the time his compensation was withheld from him up to the time of his actual reinstatement.8 However, the circumstances obtaining in this case do not warrant the reinstatement of Samaniego. Antagonism caused a severe strain in the relationship between him and his employer. A more equitable disposition would be an award of separation pay equivalent to at least one month pay, or one month pay for every year of service, whichever is higher (with a fraction of at least six [6 months being considered as one [1 whole year),9 in addition to his full backwages, allowances and other benefits.10 Records show that Samaniego was employed from October 1982 to May 27, 1998,11 or for sixteen (16) years and seven (7) months, with a monthly salary of P25,000.00. Hence, he is entitled to a separation pay of P425,000.00. WHEREFORE, the assailed Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 60400 and CA-G.R. SP No. 60478 are AFFIRMED, with MODIFICATION in the sense that Westmont and Unilab are ordered to pay Samaniego his separation pay equivalent to P425,000.00, plus his full backwages, and other privileges and benefits, or their monetary equivalent, from the time of his dismissal up to his supposed actual reinstatement. The award for moral and exemplary damages is deleted. Costs against Westmont and Unilab. SO ORDERED. 11) G.R. No. 159507 April 19, 2006

ANICETO G. SALUDO, JR., Petitioner, vs. AMERICAN EXPRESS INTERNATIONAL, INC., and/or IAN T. FISH and DOMINIC MASCRINAS, Respondents. DECISION CALLEJO, SR., J.:

Before the Court is the Petition for Review on Certiorari filed by Aniceto G. Saludo, Jr. seeking to reverse and set aside the Decision1 dated May 22, 2003 of the Court of Appeals in CA-G.R. SP No. 69553. The assailed decision directed the Regional Trial Court (RTC) of Maasin City, Southern Leyte, Branch 25 thereof, to vacate and set aside its Orders dated September 10, 2001 and January 2, 2002 in Civil Case No. R-3172, and enjoined the presiding judge2 thereof from conducting further proceedings in said case, except to dismiss the complaint filed therewith on ground of improper venue. The petition also seeks to reverse and set aside the appellate court's Resolution dated August 14, 2003 denying the motion for reconsideration of the assailed decision. The factual and procedural antecedents are as follows: Aniceto G. Saludo, Jr. filed a complaint for damages against the American Express International, Inc. (AMEX) and/or its officers Ian T. Fish, VicePresident and Country Manager, and Dominic Mascrinas, Head of Operations, with the RTC of Maasin City, Southern Leyte. The case was raffled to Branch 25 of the said court. The complaint alleged, inter alia, that plaintiff (herein petitioner Saludo) "is a Filipino citizen, of legal age, and a member of the House of Representatives and a resident of Ichon, Macrohon, Southern Leyte, Philippines." On the other hand, defendant (herein respondent AMEX, Inc.) "is a corporation doing business in the Philippines and engaged in providing credit and other credit facilities and allied services with office address at 4th floor, ACE Building, Rada Street, Legaspi Village, Makati City." The other defendants (herein respondents Fish and Mascrinas) are officers of respondent AMEX, and may be served with summons and other court processes at their office address. The complaint's cause of action stemmed from the alleged wrongful dishonor of petitioner Saludo's AMEX credit card and the supplementary card issued to his daughter. The first dishonor happened when petitioner Saludo's daughter used her supplementary credit card to pay her purchases in the United States some time in April 2000. The second dishonor occurred when petitioner Saludo used his principal credit card to pay his account at the Hotel Okawa in Tokyo, Japan while he was there with other delegates from the Philippines to attend the Congressional Recognition in honor of Mr. Hiroshi Tanaka. The dishonor of these AMEX credit cards were allegedly unjustified as they resulted from respondents' unilateral act of suspending petitioner Saludo's account for his failure to pay its balance covering the period of March 2000. Petitioner Saludo denied having received the corresponding statement of account. Further, he was allegedly wrongfully charged for late payment in June 2000. Subsequently, his credit card and its supplementary cards were canceled by respondents on July 20, 2000. Petitioner Saludo claimed that he suffered great inconvenience, wounded feelings, mental anguish, embarrassment, humiliation and besmirched political and professional standing as a result of respondents' acts which were committed in gross and evident bad faith, and in wanton, reckless and oppressive manner. He thus prayed that respondents be adjudged to pay him, jointly and severally, actual, moral and exemplary damages, and attorney's fees. In their answer, respondents specifically denied the allegations in the complaint. Further, they raised the affirmative defenses of lack of cause of action and improper venue. On the latter, respondents averred that the complaint should be dismissed on the ground that venue was improperly laid because none of the parties was a resident of Leyte. They alleged that respondents were not residents of Southern Leyte. Moreover, notwithstanding the claim in his complaint, petitioner Saludo was not allegedly a resident thereof as evidenced by the fact that his community tax

certificate, which was presented when he executed the complaint's verification and certification of non-forum shopping, was issued at Pasay City. To buttress their contention, respondents pointed out that petitioner Saludo's complaint was prepared in Pasay City and signed by a lawyer of the said city. Respondents prayed for the dismissal of the complaint a quo. Thereafter, respondents filed an Opposition to Ex-Parte Motion (to Set Case for Pre-Trial) and Motion for Preliminary Hearing (on Affirmative Defense of Improper Venue) to which petitioner Saludo filed his Comments and/or Objections to the Affirmative Defense of Improper Venue. He asserted that any allegation refuting his residency in Southern Leyte was baseless and unfounded considering that he was the congressman of the lone district thereof at the time of the filing of his complaint. He urged the court a quo to take judicial notice of this particular fact. As a member of Congress, he possessed all the qualifications prescribed by the Constitution including that of being a resident of his district. He was also a member of the Integrated Bar of the Philippines-Southern Leyte Chapter, and has been such ever since his admission to the Bar. His community tax certificate was issued at Pasay City only because he has an office thereat and the office messenger obtained the same in the said city. In any event, the community tax certificate is not determinative of one's residence. In the Order dated September 10, 2001, the court a quo denied the affirmative defenses interposed by respondents. It found the allegations of the complaint sufficient to constitute a cause of action against respondents. The court a quo likewise denied respondents' affirmative defense that venue was improperly laid. It reasoned, thus: x x x [T]he fact alone that the plaintiff at the time he filed the complaint was and still is, the incumbent Congressman of the Lone District of Southern Leyte with residence at Ichon, Macrohon, Southern Leyte, is enough to dispell any and all doubts about his actual residence. As a highranking government official of the province, his residence there can be taken judicial notice of. As such his personal, actual and physical habitation or his actual residence or place of abode can never be in some other place but in Ichon, Macrohon, Southern Leyte. It is correctly stated by the plaintiff, citing the case of Core v. Core, 100 Phil. 321 that, "residence, for purposes of fixing venue of an action, is synonymous with domicile. This is defined as the permanent home, the place to which, whenever absent for business or pleasure, one intends to return, and depends on the facts and circumstances, in the sense that they disclose intent. A person can have but one domicile at a time. A man can have but one domicile for one and the same purpose at any time, but he may have numerous places of residence. Venue could be at place of his residence. (Masa v. Mison, 200 SCRA 715 [1991])3 Respondents sought the reconsideration thereof but the court a quo denied the same in the Order dated January 2, 2002. They then filed with the appellate court a petition for certiorari and prohibition alleging grave abuse of discretion on the part of the presiding judge of the court a quo in issuing the September 10, 2001 and January 2, 2002 Orders. Upon respondents' posting of a bond, the appellate court issued on March 14, 2002 a temporary restraining order which enjoined the presiding judge of the court a quo from conducting further proceedings in Civil Case No. R-3172. On May 22, 2003, the appellate court rendered the assailed decision granting respondents' petition for certiorari as it found that venue was improperly laid. It directed the court a quo to vacate and set aside its Orders dated September 10, 2001 and January 2, 2002, and enjoined the presiding judge thereof from further proceeding in the case, except to dismiss the complaint. The appellate court explained that the action filed by petitioner Saludo against respondents is governed by Section 2, Rule 4 of the Rules of Court. The said rule on venue of personal actions basically provides that personal actions may be commenced and tried where plaintiff or any of the principal plaintiffs resides, or where defendant or any of the principal defendants resides, at the election of plaintiff.

Venue was improperly laid in the court a quo, according to the appellate court, because not one of the parties was a resident of Southern Leyte. Specifically, it declared that petitioner Saludo was not a resident thereof. The appellate court pronounced that, for purposes of venue, the residence of a person is his personal, actual or physical habitation, or his actual residence or place of abode, which may not necessarily be his legal residence or domicile provided he resides therein with continuity and consistency.4 The appellate court quoted the following discussion in Koh v. Court of Appeals5 where the Court distinguished the terms "residence" and "domicile" in this wise: x x x [T]he term domicile is not exactly synonymous in legal contemplation with the term residence, for it is [an] established principle in Conflict of Laws that domicile refers to the relatively more permanent abode of a person while residence applies to a temporary stay of a person in a given place. In fact, this distinction is very well emphasized in those cases where the Domiciliary Theory must necessarily supplant the Nationality Theory in cases involving stateless persons. xxxx "There is a difference between domicile and residence. Residence is used to indicate a place of abode, whether permanent or temporary; domicile denotes a fixed permanent residence to which when absent, one has the intention of returning. A man may have a residence in one place and a domicile in another. Residence is not domicile, but domicile is residence coupled with intention to remain for an unlimited time. A man can have but one domicile for one and the same purpose at any time, but he may have numerous places of residence. His place of residence generally is his place of domicile, but is not by any means, necessarily so since no length of residence without intention of remaining will constitute domicile."6 (Italicized for emphasis) In holding that petitioner Saludo is not a resident of Maasin City, Southern Leyte, the appellate court referred to his community tax certificate, as indicated in his complaint's verification and certification of non-forum shopping, which was issued at Pasay City. Similarly, it referred to the same community tax certificate, as indicated in his complaint for deportation filed against respondents Fish and Mascrinas. Under Republic Act No. 7160,7 the community tax certificate shall be paid in the place of residence of the individual, or in the place where the principal office of the juridical entity is located.8 It also pointed out that petitioner Saludo's law office, which was also representing him in the present case, is in Pasay City. The foregoing circumstances were considered by the appellate court as judicial admissions of petitioner Saludo which are conclusive upon him and no longer required proof. The appellate court chided the court a quo for stating that as incumbent congressman of the lone district of Southern Leyte, judicial notice could be taken of the fact of petitioner Saludo's residence thereat. No evidence had yet been adduced that petitioner Saludo was then the congressman of Southern Leyte and actual resident of Ichon, Macrohon of the said province. The appellate court held that, based on his complaint, petitioner Saludo was actually residing in Pasay City. It faulted him for filing his complaint with the court a quo when the said venue is inconvenient to the parties to the case. It opined that under the rules, the possible choices of venue are Pasay City or Makati City, or any place in the National Capital Judicial Region, at the option of petitioner Saludo.

It stressed that while the choice of venue is given to plaintiff, said choice is not left to his caprice and cannot deprive a defendant of the rights conferred upon him by the Rules of Court.9 Further, fundamental in the law governing venue of actions that the situs for bringing real and personal civil actions is fixed by the rules to attain the greatest possible convenience to the party litigants by taking into consideration the maximum accessibility to them - i.e., to both plaintiff and defendant, not only to one or the other - of the courts of justice.10 The appellate court concluded that the court a quo should have given due course to respondents' affirmative defense of improper venue in order to avoid any suspicion that petitioner Saludo's motive in filing his complaint with the court a quo was only to vex and unduly inconvenience respondents or even to wield influence in the outcome of the case, petitioner Saludo being a powerful and influential figure in the said province. The latter circumstance could be regarded as a "specie of forum shopping" akin to that in Investors Finance Corp. v. Ebarle11 where the Court mentioned that the filing of the civil action before the court in Pagadian City "was a specie of forum shopping" considering that plaintiff therein was an influential person in the locality. The decretal portion of the assailed Decision dated May 22, 2003 of the appellate court reads: UPON THE VIEW WE TAKE OF THIS CASE, THUS, the challenged orders must be, as they hereby are, VACATED and SET ASIDE and the respondent judge, or any one acting in his place or stead, is instructed and enjoined to desist from further proceeding in the case, except to dismiss it. The temporary restraining order earlier issued is hereby converted into a writ of preliminary injunction, upon the posting this time by petitioners [herein respondents], within five (5) days from receipt of this decision, of a bond in the amount of Five Million Pesos (P5,000,000.00), to answer for all damages that private respondent [herein petitioner] may sustain by reason of the issuance of such injunction should the Court finally decide that petitioners are not entitled thereto. Private respondent, if he so minded, may refile his case for damages before the Regional Trial Court of Makati City or Pasay City, or any of the Regional Trial Courts of the National Capital Judicial Region. Without costs. SO ORDERED.12 Petitioner Saludo sought the reconsideration of the said decision but the appellate court, in the Resolution dated August 14, 2003, denied his motion for reconsideration. Hence, he filed the instant petition for review with the Court alleging that: The Court of Appeals, (Special Fourth Division), in promulgating the afore-mentioned Decision and Resolution, has decided a question of substance in a way probably not in accord with law or with applicable decisions of this Honorable Court. (a) the Court of Appeals erred in not taking judicial notice of the undisputed fact that herein petitioner is the incumbent congressman of the lone district of Southern Leyte and as such, he is a residence (sic) of said district; (b) the Court of Appeals erred in dismissing the complaint on the basis of improper venue due to the alleged judicial admission of herein petitioner; (c) the Court of Appeals in dismissing the complaint ignored applicable decisions of this Honorable Court; and1avvphil.net

(d) the Court of Appeals erred in deciding that herein petitioner violated the rules on venue, and even speculated that herein petitioner's motive in filing the complaint in Maasin City was only to vex the respondents.13 In gist, the sole substantive issue for the Court's resolution is whether the appellate court committed reversible error in holding that venue was improperly laid in the court a quo in Civil Case No. R-3172 because not one of the parties, including petitioner Saludo, as plaintiff therein, was a resident of Southern Leyte at the time of filing of the complaint. The petition is meritorious. Petitioner Saludo's complaint for damages against respondents before the court a quo is a personal action. As such, it is governed by Section 2, Rule 4 of the Rules of Courts which reads: 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. The choice of venue for personal actions cognizable by the RTC is given to plaintiff but not to plaintiff's caprice because the matter is regulated by the Rules of Court.14 The rule on venue, like other procedural rules, is designed to insure a just and orderly administration of justice, or the impartial and evenhanded determination of every action and proceeding.15 The option of plaintiff in personal actions cognizable by the RTC is either the place where defendant resides or may be found, or the place where plaintiff resides. If plaintiff opts for the latter, he is limited to that place.16 Following this rule, petitioner Saludo, as plaintiff, had opted to file his complaint with the court a quo which is in Maasin City, Southern Leyte. He alleged in his complaint that he was a member of the House of Representatives and a resident of Ichon, Macrohon, Southern Leyte to comply with the residency requirement of the rule. However, the appellate court, adopting respondents' theory, made the finding that petitioner Saludo was not a resident of Southern Leyte at the time of the filing of his complaint. It hinged the said finding mainly on the fact that petitioner Saludo's community tax certificate, indicated in his complaint's verification and certification of non-forum shopping, was issued at Pasay City. That his law office is in Pasay City was also taken by the appellate court as negating petitioner Saludo's claim of residence in Southern Leyte. The appellate court committed reversible error in finding that petitioner Saludo was not a resident of Southern Leyte at the time of the filing of his complaint, and consequently holding that venue was improperly laid in the court a quo. In Dangwa Transportation Co., Inc. v. Sarmiento,17 the Court had the occasion to explain at length the meaning of the term "resides" for purposes of venue, thus: In Koh v. Court of Appeals, we explained that the term "resides" as employed in the rule on venue on personal actions filed with the courts of first instance means the place of abode, whether permanent or temporary, of the plaintiff or the defendant, as distinguished from "domicile" which denotes a fixed permanent residence to which, when absent, one has the intention of returning.

"It is fundamental in the law governing venue of actions (Rule 4 of the Rules of Court) that the situs for bringing real and personal civil actions are fixed by the rules to attain the greatest convenience possible to the parties-litigants by taking into consideration the maximum accessibility to them of the courts of justice. It is, likewise, undeniable that the term domicile is not exactly synonymous in legal contemplation with the term residence, for it is an established principle in Conflict of Laws that domicile refers to the relatively more permanent abode of a person while residence applies to a temporary stay of a person in a given place. In fact, this distinction is very well emphasized in those cases where the Domiciliary Theory must necessarily supplant the Nationality Theory in cases involving stateless persons. "This Court held in the case of Uytengsu v. Republic, 50 O.G. 4781, October, 1954, reversing its previous stand in Larena v. Ferrer, 61 Phil. 36, and Nuval v. Guray, 52 Phil. 645, that 'There is a difference between domicile and residence. Residence is used to indicate a place of abode, whether permanent or temporary; domicile denotes a fixed permanent residence to which when absent, one has the intention of returning. A man may have a residence in one place and a domicile in another. Residence is not domicile, but domicile is residence coupled with the intention to remain for an unlimited time. A man can have but one domicile for one and the same purpose at any time, but he may have numerous places of residence. His place of residence generally is his place of domicile, but is not by any means, necessarily so since no length of residence without intention of remaining will constitute domicile.' (Italicized for emphasis) "We note that the law on venue in Courts of First Instance (Section 2, of Rule 4, Rules of Court) in referring to the parties utilizes the words 'resides or may be found,' and not 'is domiciled,' thus: 'Sec. 2(b) Personal actions - All other actions may be commenced and tried where the defendant or any of the defendants resides or may be found, or where the plaintiff or any of the plaintiffs resides, at the election of the plaintiff.' (Italicized for emphasis) "Applying the foregoing observation to the present case, We are fully convinced that private respondent Coloma's protestations of domicile in San Nicolas, Ilocos Norte, based on his manifested intention to return there after the retirement of his wife from government service to justify his bringing of an action for damages against petitioner in the C.F.I. of Ilocos Norte, is entirely of no moment since what is of paramount importance is where he actually resided or where he may be found at the time he brought the action, to comply substantially with the requirements of Sec. 2(b) of Rule 4, Rules of Court, on venue of personal actions." (Koh v. Court of Appeals, supra, pp. 304-305.) The same construction of the word "resides" as used in Section 1, Rule 73, of the Revised Rules of Court, was enunciated in Fule v. Court of Appeals, et al. (G.R. No. L-40502) and Fule v. Hon. Ernani C. Pao, et al. (G.R. No. L-42670), decided on November 29, 1976. Thus, this Court, in the aforecited cases, stated: "2. But, the far-ranging question is this: What does the term 'resides' mean? Does it refer to the actual residence or domicile of the decedent at the time of his death? We lay down the doctrinal rule that the term 'resides' connotes ex vi termini 'actual residence' as distinguished from 'legal residence or domicile.' This term 'resides,' like the terms 'residing' and 'residence' is elastic and should be interpreted in the light of the object or purposes of the statute or rule in which it is employed. In the application of venue statutes and rules - Section 1, Rule 73 of the Revised Rules of Court is of such nature - residence rather than domicile is the significant factor. Even where the statute uses the word 'domicile' still it is construed as meaning residence and not domicile in the technical sense. Some cases make a distinction between the terms 'residence' and 'domicile' but as

generally used in statutes fixing venue, the terms are synonymous, and convey the same meaning as the term 'inhabitant.' In other words, 'resides' should be viewed or understood in its popular sense, meaning, the personal, actual or physical habitation of a person, actual residence or place of abode. It signifies physical presence in a place and actual stay thereat. In this popular sense, the term means merely residence, that is, personal residence, not legal residence or domicile. Residence simply requires bodily presence as an inhabitant in a given place, while domicile requires bodily presence in that place and also an intention to make it one's domicile. No particular length of time of residence is required though; however, the residence must be more than temporary."18 There is no dispute that petitioner Saludo was the congressman or the representative of the lone district of Southern Leyte at the time of filing of his complaint with the court a quo. Even the appellate court admits this fact as it states that "it may be conceded that private respondent ever so often travels to Maasin City, Southern Leyte, because he is its representative in the lower house."19 As a member of the House of Representatives, petitioner Saludo was correctly deemed by the court a quo as possessing the requirements for the said position,20 including that he was then a resident of the district which he was representing, i.e., Southern Leyte. Significantly, for purposes of election law, the term "residence" is synonymous with "domicile," thus: x x x [T]he Court held that "domicile" and "residence" are synonymous. The term "residence," as used in the election law, imports not only an intention to reside in a fixed place but also personal presence in that place, coupled with conduct indicative of such intention. "Domicile" denotes a fixed permanent residence to which when absent for business or pleasure, or for like reasons, one intends to return. x x x21 It can be readily gleaned that the definition of "residence" for purposes of election law is more stringent in that it is equated with the term "domicile." Hence, for the said purpose, the term "residence" imports "not only an intention to reside in a fixed place but also personal presence in that place, coupled with conduct indicative of such intention."22 When parsed, therefore, the term "residence" requires two elements: (1) intention to reside in the particular place; and (2) personal or physical presence in that place, coupled with conduct indicative of such intention. As the Court elucidated, "the place where a party actually or constructively has a permanent home, where he, no matter where he may be found at any given time, eventually intends to return and remain, i.e., his domicile, is that to which the Constitution refers when it speaks of residence for the purposes of election law."23 On the other hand, for purposes of venue, the less technical definition of "residence" is adopted. Thus, it is understood to mean as "the personal, actual or physical habitation of a person, actual residence or place of abode. It signifies physical presence in a place and actual stay thereat. In this popular sense, the term means merely residence, that is, personal residence, not legal residence or domicile. Residence simply requires bodily presence as an inhabitant in a given place, while domicile requires bodily presence in that place and also an intention to make it one's domicile."24 Since petitioner Saludo, as congressman or the lone representative of the district of Southern Leyte, had his residence (or domicile) therein as the term is construed in relation to election laws, necessarily, he is also deemed to have had his residence therein for purposes of venue for filing personal actions. Put in another manner, Southern Leyte, as the domicile of petitioner Saludo, was also his residence, as the term is understood in its popular sense. This is because "residence is not domicile, but domicile is residence coupled with the intention to remain for an unlimited time."

Reliance by the appellate court on Koh v. Court of Appeals25 is misplaced. Contrary to its holding,26 the facts of the present case are not similar to the facts therein. In Koh, the complaint was filed with the Court of First Instance in San Nicolas, Ilocos Norte by plaintiff who admitted that he was a resident of Kamias, Quezon City. Save for the fact that he grew up in San Nicolas, Ilocos Norte and that he manifested the intent to return there after retirement, plaintiff therein had not established that he was actually a resident therein at the time of the filing of his complaint. Neither did he establish that he had his domicile therein because although he manifested the intent to go back there after retirement, the element of personal presence in that place was lacking. To reiterate, domicile or residence, as the terms are taken as synonyms, imports "not only an intention to reside in a fixed place but also personal presence in that place, coupled with conduct indicative of such intention."27 In contrast, petitioner Saludo was the congressman or representative of Southern Leyte at the time of filing of his complaint with the court a quo. Absent any evidence to the contrary, he is deemed to possess the qualifications for the said position, including that he was a resident therein. And following the definition of the term "residence" for purposes of election law, petitioner Saludo not only had the intention to reside in Southern Leyte, but he also had personal presence therein, coupled with conduct indicative of such intention. The latter element, or his bodily presence as an inhabitant in Southern Leyte, was sufficient for petitioner Saludo to be considered a resident therein for purposes of venue. The following ratiocination of the court a quo is apt: Residence in civil law is a material fact, referring to the physical presence of a person in a place. A person can have two or more residences, such as a country residence and a city residence. (Quetulio v. Ruiz, S.C. Off. Gaz. 156, Commentaries and Jurisprudence in Civil Law, Vol. 1, page 211, Tolentino). Residence is acquired by living in a place; on the other hand, domicile can exist without actually living in the place. The important thing for domicile is that, once residence has been established in one place, there be an intention to stay there permanently, even if residence is also established in some other place. Thus, if a person lives with his family habitually in Quezon City, he would have his domicile in Quezon City. If he also has a house for vacation purposes in the City of Baguio, and another house in connection with his business in the City of Manila, he would have residence in all three places (Tolentino, Commentaries and Jurisprudence on Civil Law, Vol. 1, Page 212, 1990 Edition) so that one[']s legal residence or domicile can also be his actual, personal or physical residence or habitation or place of abode if he stays there with intention to stay there permanently. In the instant case, since plaintiff has a house in Makati City for the purpose of exercising his profession or doing business and also a house in Ichon, Macrohon, Southern Leyte, for doing business and/or for election or political purposes where he also lives or stays physically, personally and actually then he can have residences in these two places. Because it would then be preposterous to acknowledge and recognize plaintiff Aniceto G. Saludo, Jr. as congressman of Southern Leyte without also recognizing him as actually, personally and physically residing thereat, when such residence is required by law.28 The fact then that petitioner Saludo's community tax certificate was issued at Pasay City is of no moment because granting arguendo that he could be considered a resident therein, the same does not preclude his having a residence in Southern Leyte for purposes of venue. A man can have but one domicile for one and the same purpose at any time, but he may have numerous places of residence.29 That petitioner Saludo was the congressman or representative of the lone district of Southern Leyte at the time of the filing of his complaint was admitted as a fact by the court a quo. In this connection, it consequently held that, as such, petitioner Saludo's residence in Southern Leyte, the

district he was the representing, could be taken judicial notice of. The court a quo cannot be faulted for doing so because courts are allowed "to take judicial notice of matters which are of public knowledge, or are capable of unquestionable demonstration, or ought to be known to judges because of their judicial functions." 30 Courts are likewise bound to take judicial notice, without the introduction of evidence, of the law in force in the Philippines, 31 including its Constitution. The concept of "facts of common knowledge" in the context of judicial notice has been explained as those facts that are "so commonly known in the community as to make it unprofitable to require proof, and so certainly known to as to make it indisputable among reasonable men." 32 Moreover, "though usually facts of 'common knowledge' will be generally known throughout the country, it is sufficient as a basis for judicial notice that they be known in the local community where the trial court sits." 33 Certainly, the fact of petitioner Saludo being the duly elected representative of Southern Leyte at the time could be properly taken judicial notice of by the court a quo, the same being a matter of common knowledge in the community where it sits. Further, petitioner Saludo's residence in Southern Leyte could likewise be properly taken judicial notice of by the court a quo. It is bound to know that, under the Constitution, one of the qualifications of a congressman or representative to the House of Representatives is having a residence in the district in which he shall be elected. In fine, petitioner Saludo's act of filing his complaint with the court a quo cannot be characterized as a "specie of forum-shopping" or capricious on his part because, under the rules, as plaintiff, he is precisely given this option. Finally, respondents' claim that the instant petition for review was not properly verified by petitioner Saludo deserves scant consideration. Section 4, Rule 7 of the Rules of Court reads: 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. A pleading required to be verified which contains a verification based on "information and belief," or upon "knowledge, information and belief," or lacks proper verification, shall be treated as an unsigned pleading. Petitioner Saludo's verification and certification of non-forum shopping states that he has "read the contents thereof [referring to the petition] and the same are true and correct of my own personal knowledge and belief and on the basis of the records at hand." The same clearly constitutes substantial compliance with the above requirements of the Rules of Court.

WHEREFORE, premises considered, the petition is GRANTED. The Decision dated May 22, 2003 and Resolution dated August 14, 2003 of the Court of Appeals in CA-G.R. SP No. 69553 are REVERSED and SET ASIDE. The Orders dated September 10, 2001 and January 2, 2002 of the Regional Trial Court of Maasin City, Southern Leyte, Branch 25 thereof, in Civil Case No. R-3172 are REINSTATED. SO ORDERED. G.R. No. 155173 12) G.R. No. 139018 November 23, 2004

April 11, 2005

ESTHERLITA CRUZ-AGANA, Petitioner, vs. HON. JUDGE AURORA SANTIAGO-LAGMAN (In her capacity as Presiding Judge of Regional Trial Court, Branch 77, Malolos, Bulacan) and B. SERRANO ENTERPRISES, INC., Respondents. DECISION CARPIO, J.: The Case This petition for certiorari1 seeks to reverse the Order of the Regional Trial Court, Branch 77, Malolos, Bulacan ("trial court"), dated 4 June 1999, recalling its previous Order dated 25 May 1999 dismissing B. Serrano Enterprises, Inc.'s ("respondent") counterclaim upon a motion to dismiss filed by petitioner Estherlita Cruz-Agana ("petitioner"). Antecedent Facts On 18 March 1996, petitioner filed a Complaint for annulment of title with prayer for preliminary mandatory injunction against respondent. Petitioner claims that as the sole heir of one Teodorico Cruz, she is the sole owner of a lot covered by Transfer Certificate of Title No. T-3907. Petitioner further claims that the lot was fraudulently sold to Eugenio Lopez, Jr. who later on transferred the lot to respondent. The case was raffled to the Regional Trial Court, Branch 77, Malolos, Bulacan presided by Judge Aurora Santiago-Lagman and docketed as Civil Case No. 210-M-96. Respondent seasonably filed its Answer with compulsory counterclaim. Petitioner moved to dismiss respondent's counterclaim for lack of a certificate of non-forum shopping.

In an Order dated 11 March 1999, the trial court denied petitioner's motion to dismiss respondent's counterclaim. The trial court reasoned that respondent's counterclaim is compulsory and therefore excluded from the coverage of Section 5, Rule 7 of the Rules of Court. Petitioner moved that the trial court reconsider its Order invoking the mandatory nature of a certificate of nonforum shopping under Supreme Court Administrative Circular No. 04-94.2 On 25 May 1999, the trial court reversed its 11 March 1999 Order and dismissed respondent's counterclaim for lack of a certificate of non-forum shopping. Respondent seasonably filed a motion for reconsideration arguing that Administrative Circular No. 04-94 does not apply to compulsory counterclaims following the ruling in Santo Tomas University Hospital v. Surla.3 On 4 June 1999, the trial court again reversed itself and recalled its Order dismissing respondent's counterclaim. Petitioner now comes before this Court through Rule 65 of the 1997 Rules of Civil Procedure. The Trial Court's Ruling The trial court found that respondent's counterclaim is compulsory in nature. The trial court ruled that the filing of a compulsory counterclaim does not require a certificate of non-forum shopping. On the effect of Santo Tomason Administrative Circular No. 04-94, the trial court explained: It is settled rule that it is one of the inherent powers of the court to amend and control its processes and orders so as to make them conformable to law and justice. This power includes the right to reverse itself, specially when in its honest opinion, it has committed an error or mistake in judgment, and that to adhere to its decision will cause injustice to a party litigant. The Issue Petitioner raises the following issue: WHETHER THE TRIAL COURT COMMITTED GRAVE ABUSE OF DISCRETION IN REFUSING TO DISMISS RESPONDENT'S COUNTERCLAIM. The Ruling of the Court The petition lacks merit.

The issue presented is not novel. This Court has squarely settled this issue in Santo Tomas University Hospital v. Surla.3 Writing for the Court, Justice Jose C. Vitug began his ponencia thus: Can a compulsory counterclaim pleaded in an Answer be dismissed on the ground of a failure to accompany it with a certificate of non-forum shopping? This question is the core issue presented for resolution in the instant petition. Santo Tomas clarified the scope of Administrative Circular No. 04-94 with respect to counterclaims. The Court pointed out that this circular is intended primarily to cover "an initiatory pleading or an incipient application of a party asserting a claim for relief." The distinction between a compulsory and a permissive counterclaim is vital in the application of the circular. The Court explained: It should not be too difficult, the foregoing rationale of the circular aptly taken, to sustain the view that the circular in question has not, in fact, been contemplated to include a kind of claim which, by its very nature as being auxiliary to the proceedings in the suit and as deriving its substantive and jurisdictional support therefrom, can only be appropriately pleaded in the answer and not remain outstanding for independent resolution except by the court where the main case pends. Prescinding from the foregoing, the proviso in the second paragraph of Section 5, Rule 8 of the 1997 Rules of Civil Procedure, i.e., that the violation of the anti-forum shopping rule "shall not be curable by mere amendment xxx but shall be cause for the dismissal of the case without prejudice," being predicated on the applicability of the need for a certification against forum-shopping, obviously does not include a claim which cannot be independently set up. The Court reiterated this ruling in Ponciano v. Judge Parentela, Jr.4 Administrative Circular No. 04-94 does not apply to compulsory counterclaims. The circular applies to initiatory and similar pleadings. A compulsory counterclaim set up in the answer is not an "initiatory" or similar pleading. The initiatory pleading is the plaintiff's complaint. A respondent has no choice but to raise a compulsory counterclaim the moment the plaintiff files the complaint. Otherwise, respondent waives the compulsory counterclaim.5 In short, the compulsory counterclaim is a reaction or response, mandatory upon pain of waiver, to an initiatory pleading which is the complaint. Petitioner argues, however, that the Court's rulings in Santo Tomas and Ponciano are "contrary to the mandate of Administrative Circular No. 04-94" and other procedural laws.6 Petitioner is mistaken.

The Constitution expressly bestows on this Court the power to promulgate rules concerning the pleading, practice and procedure in all courts.7 Procedural matters are within the sole jurisdiction of this Court to prescribe. Administrative Circular No. 04-94 is an issuance of this Court. It covers a matter of procedure. Administrative Circular No. 04-94 is not an enactment of the Legislature. This Court has the exclusive jurisdiction to interpret, amend or revise the rules it promulgates, as long as the rules do not diminish, increase, or modify substantive rights. This is precisely the purpose of Santo Tomas as far as Administrative Circular No. 04-94 is concerned. Petitioner's counsel fails or simply refuses to accept the distinction between a permissive counterclaim and a compulsory counterclaim. This distinction was the basis for the ruling in Santo Tomas and Ponciano. The sole issue for resolution in the present case is whether respondent's counterclaim is compulsory or permissive. If it is a permissive counterclaim, the lack of a certificate of non-forum shopping is fatal. If it is a compulsory counterclaim, the lack of a certificate of non-forum shopping is immaterial. A compulsory counterclaim is any claim for money or other relief, which a defending party may have against an opposing party, which at the time of suit arises out of, or is necessarily connected with, the same transaction or occurrence that is the subject matter of plaintiff's complaint.8 It is compulsory in the sense that it is within the jurisdiction of the court, does not require for its adjudication the presence of third parties over whom the court cannot acquire jurisdiction, and will be barred in the future if not set up in the answer to the complaint in the same case. Any other counterclaim is permissive. Respondent's counterclaim as set up in its answer states: 3. That because of the unwarranted, baseless, and unjustified acts of the plaintiff, herein defendant has suffered and continue to suffer actual damages in the sum of at least P400,000,000.00 which the law, equity, and justice require that to be paid by the plaintiff and further to reimburse the attorney's fees ofP2,000,000.00;9 It is clear that the counterclaim set up by respondent arises from the filing of plaintiff's complaint. The counterclaim is so intertwined with the main case that it is incapable of proceeding independently. The counterclaim will require a re-litigation of the same evidence if the counterclaim is allowed to proceed in a separate action. Even petitioner recognizes that respondent's counterclaim is compulsory.10 A compulsory counterclaim does not require a certificate of non-forum shopping because a compulsory counterclaim is not an initiatory pleading. WHEREFORE, the instant petition is DENIED for lack of merit. We AFFIRM the Order of the Regional Trial Court, Branch 77, Malolos Bulacan, dated 4 June 1999 recalling the Order dated 25 May 1999 which dismissed the compulsory counterclaim of respondent B. Serrano Enterprises, Inc.

SO ORDERED. Davide, Jr., C.J., (Chairman), Quisumbing, Ynares-Santiago, and Azcuna, JJ., concur.

Footnotes
1

Under Rule 65 of the Rules of Court. Paragraphs 1 and 2 of Supreme Court Administrative Circular No. 04-94 provide: 1. The plaintiff, petitioner, applicant or principal party seeking relief in the complaint, petition, application or other initiatory pleading shall certify under oath in such original pleading, or in a sworn certification annexed thereto and simultaneously filed therewith, to the truth of the following facts and undertakings: (a) he has not theretofore commenced any other action or proceeding involving the same issues in the Supreme Court, the Court of Appeals, or any other tribunal or agency; (b) to the best of his knowledge, no such action or proceedings is pending in the Supreme Court, the Court of Appeals, or any other tribunal or agency; (c) if there is any such action or proceeding which is either pending or may have been terminated, he must state the status thereof; and (d) if he should thereafter learn that a similar action or proceeding has been filed or is pending before the Supreme Court, the Court of Appeals or any other tribunal or agency, he undertakes to report that fact within five (5) days therefrom to the court or agency wherein the original pleading and sworn certification contemplated herein have been filed. The complaint and other initiatory pleadings referred to and subject of this Circular are the original civil complaint, counterclaim, cross-claim, third (fourth, etc.) party complaint, or complaint-in-intervention, petition, or application wherein a party asserts his claim for relief. 2. Any violation of this Circular shall be a cause for the dismissal of the complaint, petition, application or other initiatory pleading, upon motion and after hearing. However, any clearly willful and deliberate forum shopping by any party and his counsel through the filing of multiple complaints or other initiatory pleadings to obtain favorable action shall be a ground for summary dismissal thereof and shall constitute direct contempt of court. Furthermore, the submission of a false certification or non-compliance with the undertakings therein, as provided

in Paragraph 1 hereof, shall constitute indirect contempt of court, without prejudice to disciplinary proceedings against the counsel and the filing of a criminal action against the guilty party.

13) LAFARGE CEMENT PHILIPPINES, INC., (formerly Lafarge Philippines, Inc.), LUZON CONTINENTAL LAND CORPORATION, CONTINENTAL OPERATING CORPORATION and PHILIP ROSEBERG, petitioners, vs. CONTINENTAL CEMENT CORPORATION, GREGORY T. LIM and ANTHONY A. MARIANO, respondents.

DECISION

PANGANIBAN, J.: May defendants in civil cases implead in their counterclaims persons who were not parties to the original complaints? This is the main question to be answered in this controversy. The Case Before us is a Petition for Review1 under Rule 45 of the Rules of Court, seeking to nullify the May 22, 20022 and the September 3, 2002 Orders3 of the Regional Trial Court (RTC) of Quezon City (Branch 80) in Civil Case No. Q-00-41103. The decretal portion of the first assailed Order reads: "WHEREFORE, in the light of the foregoing as earlier stated, the plaintiff's motion to dismiss claims is granted. Accordingly, the defendants' claims against Mr. Lim and Mr. Mariano captioned as their counterclaims are dismissed."4 The second challenged Order denied petitioners' Motion for Reconsideration. The Facts Briefly, the origins of the present controversy can be traced to the Letter of Intent (LOI) executed by both parties on August 11, 1998, whereby Petitioner Lafarge Cement Philippines, Inc. (Lafarge) -- on behalf of its affiliates and other qualified entities, including Petitioner Luzon Continental Land Corporation (LCLC) -- agreed to purchase the cement business of Respondent Continental Cement Corporation (CCC). On October 21, 1998, both parties entered into a Sale and Purchase Agreement (SPA). At the time of the foregoing transactions, petitioners were well aware that

CCC had a case pending with the Supreme Court. The case was docketed as GR No. 119712, entitled Asset Privatization Trust (APT) v. Court of Appeals and Continental Cement Corporation. In anticipation of the liability that the High Tribunal might adjudge against CCC, the parties, under Clause 2 (c) of the SPA, allegedly agreed to retain from the purchase price a portion of the contract price in the amount of P117,020,846.84 -- the equivalent of US$2,799,140. This amount was to be deposited in an interest-bearing account in the First National City Bank of New York (Citibank) for payment to APT, the petitioner in GR No. 119712. However, petitioners allegedly refused to apply the sum to the payment to APT, despite the subsequent finality of the Decision in GR No. 119712 in favor of the latter and the repeated instructions of Respondent CCC. Fearful that nonpayment to APT would result in the foreclosure, not just of its properties covered by the SPA with Lafarge but of several other properties as well, CCC filed before the Regional Trial Court of Quezon City on June 20, 2000, a "Complaint with Application for Preliminary Attachment" against petitioners. Docketed as Civil Case No. Q-00-41103, the Complaint prayed, among others, that petitioners be directed to pay the "APT Retained Amount" referred to in Clause 2 (c) of the SPA. Petitioners moved to dismiss the Complaint on the ground that it violated the prohibition on forum-shopping. Respondent CCC had allegedly made the same claim it was raising in Civil Case No. Q-00-41103 in another action, which involved the same parties and which was filed earlier before the International Chamber of Commerce. After the trial court denied the Motion to Dismiss in its November 14, 2000 Order, petitioners elevated the matter before the Court of Appeals in CA-GR SP No. 68688. In the meantime, to avoid being in default and without prejudice to the outcome of their appeal, petitioners filed their Answer and Compulsory Counterclaims ad Cautelam before the trial court in Civil Case No. Q-00-41103. In their Answer, they denied the allegations in the Complaint. They prayed -- by way of compulsory counterclaims against Respondent CCC, its majority stockholder and president Gregory T. Lim, and its corporate secretary Anthony A. Mariano -- for the sums of (a) P2,700,000 each as actual damages, (b) P100,000,000 each as exemplary damages, (c) P100,000,000 each as moral damages, and (d) P5,000,000 each as attorney's fees plus costs of suit. Petitioners alleged that CCC, through Lim and Mariano, had filed the "baseless" Complaint in Civil Case No. Q-00-41103 and procured the Writ of Attachment in bad faith. Relying on this Court's pronouncement in Sapugay v. CA,5 petitioners prayed that both Lim and Mariano be held "jointly and solidarily" liable with Respondent CCC. On behalf of Lim and Mariano who had yet to file any responsive pleading, CCC moved to dismiss petitioners' compulsory counterclaims on grounds that essentially constituted the very issues for resolution in the instant Petition. Ruling of the Trial Court On May 22, 2002, the Regional Trial Court of Quezon City (Branch 80) dismissed petitioners' counterclaims for several reasons, among which were the following: a) the counterclaims against Respondents Lim and Mariano were not compulsory; b) the ruling in Sapugay was not applicable; and c) petitioners' Answer with Counterclaims violated procedural rules on the proper joinder of causes of action.6

Acting on the Motion for Reconsideration filed by petitioners, the trial court -- in an Amended Order dated September 3, 20027 -- admitted some errors in its May 22, 2002 Order, particularly in its pronouncement that their counterclaim had been pleaded against Lim and Mariano only. However, the RTC clarified that it was dismissing the counterclaim insofar as it impleaded Respondents Lim and Mariano, even if it included CCC. Hence this Petition.8 Issues In their Memorandum, petitioners raise the following issues for our consideration: "[a] Whether or not the RTC gravely erred in refusing to rule that Respondent CCC has no personality to move to dismiss petitioners' compulsory counterclaims on Respondents Lim and Mariano's behalf. "[b] Whether or not the RTC gravely erred in ruling that (i) petitioners' counterclaims against Respondents Lim and Mariano are not compulsory; (ii) Sapugay v. Court of Appeals is inapplicable here; and (iii) petitioners violated the rule on joinder of causes of action."9 For clarity and coherence, the Court will resolve the foregoing in reverse order. The Court's Ruling The Petition is meritorious. First Issue: Counterclaims and Joinder of Causes of Action. Petitioners' Counterclaims Compulsory Counterclaims are defined in Section 6 of Rule 6 of the Rules of Civil Procedure as "any claim which a defending party may have against an opposing party." They are generally allowed in order to avoid a multiplicity of suits and to facilitate the disposition of the whole controversy in a single action, such that the defendant's demand may be adjudged by a counterclaim rather than by an independent suit. The only limitations to this principle are (1) that the court should have jurisdiction over the subject matter of the counterclaim, and (2) that it could acquire jurisdiction over third parties whose presence is essential for its adjudication.10 A counterclaim may either be permissive or compulsory. It is permissive "if it does not arise out of or is not necessarily connected with the subject matter of the opposing party's claim."11 A permissive counterclaim is essentially an independent claim that may be filed separately in another case.

A counterclaim is compulsory when its object "arises out of or is necessarily connected with the transaction or occurrence constituting the subject matter of the opposing party's claim and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction."12 Unlike permissive counterclaims, compulsory counterclaims should be set up in the same action; otherwise, they would be barred forever. NAMARCO v. Federation of United Namarco Distributors13 laid down the following criteria to determine whether a counterclaim is compulsory or permissive: 1) Are issues of fact and law raised by the claim and by the counterclaim largely the same? 2) Would res judicata bar a subsequent suit on defendant's claim, absent the compulsory counterclaim rule? 3) Will substantially the same evidence support or refute plaintiff's claim as well as defendant's counterclaim? 4) Is there any logical relation between the claim and the counterclaim? A positive answer to all four questions would indicate that the counterclaim is compulsory. Adopted in Quintanilla v. CA14 and reiterated in Alday v. FGU Insurance Corporation,15 the "compelling test of compulsoriness" characterizes a counterclaim as compulsory if there should exist a "logical relationship" between the main claim and the counterclaim. There exists such a relationship when conducting separate trials of the respective claims of the parties would entail substantial duplication of time and effort by the parties and the court; when the multiple claims involve the same factual and legal issues; or when the claims are offshoots of the same basic controversy between the parties. We shall now examine the nature of petitioners' counterclaims against respondents with the use of the foregoing parameters. Petitioners base their counterclaim on the following allegations: "Gregory T. Lim and Anthony A. Mariano were the persons responsible for making the bad faith decisions for, and causing plaintiff to file this baseless suit and to procure an unwarranted writ of attachment, notwithstanding their knowledge that plaintiff has no right to bring it or to secure the writ. In taking such bad faith actions, Gregory T. Lim was motivated by his personal interests as one of the owners of plaintiff while Anthony A. Mariano was motivated by his sense of personal loyalty to Gregory T. Lim, for which reason he disregarded the fact that plaintiff is without any valid cause. "Consequently, both Gregory T. Lim and Anthony A. Mariano are the plaintiff's co-joint tortfeasors in the commission of the acts complained of in this answer and in the compulsory counterclaims pleaded below. As such they should be held jointly and solidarily liable as plaintiff's co-defendants to those compulsory counterclaims pursuant to the Supreme Court's decision in Sapugay v. Mobil. xxx xxx xxx

"The plaintiff's, Gregory T. Lim and Anthony A. Mariano's bad faith filing of this baseless case has compelled the defendants to engage the services of counsel for a fee and to incur costs of litigation, in amounts to be proved at trial, but in no case less than P5 million for each of them and for which plaintiff Gregory T. Lim and Anthony A. Mariano should be held jointly and solidarily liable.

"The plaintiff's, Gregory T. Lim's and Anthony A. Mariano's actions have damaged the reputations of the defendants and they should be held jointly and solidarily liable to them for moral damages of P100 million each. "In order to serve as an example for the public good and to deter similar baseless, bad faith litigation, the plaintiff, Gregory T. Lim and Anthony A. Mariano should be held jointly and solidarily liable to the defendants for exemplary damages of P100 million each." 16 The above allegations show that petitioners' counterclaims for damages were the result of respondents' (Lim and Mariano) act of filing the Complaint and securing the Writ of Attachment in bad faith. Tiu Po v. Bautista17 involved the issue of whether the counterclaim that sought moral, actual and exemplary damages and attorney's fees against respondents on account of their "malicious and unfounded" complaint was compulsory. In that case, we held as follows: "Petitioners' counterclaim for damages fulfills the necessary requisites of a compulsory counterclaim. They are damages claimed to have been suffered by petitioners as a consequence of the action filed against them. They have to be pleaded in the same action; otherwise, petitioners would be precluded by the judgment from invoking the same in an independent action. The pronouncement in Papa vs. Banaag (17 SCRA 1081) (1966) is in point: "Compensatory, moral and exemplary damages, allegedly suffered by the creditor in consequence of the debtor's action, are also compulsory counterclaim barred by the dismissal of the debtor's action. They cannot be claimed in a subsequent action by the creditor against the debtor." "Aside from the fact that petitioners' counterclaim for damages cannot be the subject of an independent action, it is the same evidence that sustains petitioners' counterclaim that will refute private respondent's own claim for damages. This is an additional factor that characterizes petitioners' counterclaim as compulsory."18 Moreover, using the "compelling test of compulsoriness," we find that, clearly, the recovery of petitioners' counterclaims is contingent upon the case filed by respondents; thus, conducting separate trials thereon will result in a substantial duplication of the time and effort of the court and the parties. Since the counterclaim for damages is compulsory, it must be set up in the same action; otherwise, it would be barred forever. If it is filed concurrently with the main action but in a different proceeding, it would be abated on the ground of litis pendentia; if filed subsequently, it would meet the same fate on the ground of res judicata.19 Sapugay v. Court of Appeals Applicable to the Case at Bar Sapugay v. Court of Appeals finds application in the present case. In Sapugay, Respondent Mobil Philippines filed before the trial court of Pasig an action for replevin against Spouses Marino and Lina Joel Sapugay. The Complaint arose from the supposed failure of the couple to keep their end of their Dealership Agreement. In their Answer with Counterclaim, petitioners alleged that after incurring expenses in anticipation of the Dealership

Agreement, they requested the plaintiff to allow them to get gas, but that it had refused. It claimed that they still had to post a surety bond which, initially fixed at P200,000, was later raised to P700,000. The spouses exerted all efforts to secure a bond, but the bonding companies required a copy of the Dealership Agreement, which respondent continued to withhold from them. Later, petitioners discovered that respondent and its manager, Ricardo P. Cardenas, had intended all along to award the dealership to Island Air Product Corporation. In their Answer, petitioners impleaded in the counterclaim Mobil Philippines and its manager -- Ricardo P. Cardenas -- as defendants. They prayed that judgment be rendered, holding both jointly and severally liable for pre-operation expenses, rental, storage, guarding fees, and unrealized profit including damages. After both Mobil and Cardenas failed to respond to their Answer to the Counterclaim, petitioners filed a "Motion to Declare Plaintiff and its Manager Ricardo P. Cardenas in Default on Defendant's Counterclaim." Among the issues raised in Sapugay was whether Cardenas, who was not a party to the original action, might nevertheless be impleaded in the counterclaim. We disposed of this issue as follows: "A counterclaim is defined as any claim for money or other relief which a defending party may have against an opposing party. However, the general rule that a defendant cannot by a counterclaim bring into the action any claim against persons other than the plaintiff admits of an exception under Section 14, Rule 6 which provides that 'when the presence of parties other than those to the original action is required for the granting of complete relief in the determination of a counterclaim or cross-claim, the court shall order them to be brought in as defendants, if jurisdiction over them can be obtained.' The inclusion, therefore, of Cardenas in petitioners' counterclaim is sanctioned by the rules."20 The prerogative of bringing in new parties to the action at any stage before judgment is intended to accord complete relief to all of them in a single action and to avert a duplicity and even a multiplicity of suits thereby. In insisting on the inapplicability of Sapugay, respondents argue that new parties cannot be included in a counterclaim, except when no complete relief can be had. They add that "[i]n the present case, Messrs. Lim and Mariano are not necessary for petitioners to obtain complete relief from Respondent CCC as plaintiff in the lower court. This is because Respondent CCC as a corporation with a separate [legal personality] has the juridical capacity to indemnify petitioners even without Messrs. Lim and Mariano."21 We disagree. The inclusion of a corporate officer or stockholder -- Cardenas in Sapugay or Lim and Mariano in the instant case -- is not premised on the assumption that the plaintiff corporation does not have the financial ability to answer for damages, such that it has to share its liability with individual defendants. Rather, such inclusion is based on the allegations of fraud and bad faith on the part of the corporate officer or stockholder. These allegations may warrant the piercing of the veil of corporate fiction, so that the said individual may not seek refuge therein, but may be held individually and personally liable for his or her actions.

In Tramat Mercantile v. Court of Appeals,22 the Court held that generally, it should only be the corporation that could properly be held liable. However, circumstances may warrant the inclusion of the personal liability of a corporate director, trustee, or officer, if the said individual is found guilty of bad faith or gross negligence in directing corporate affairs. Remo Jr. v. IAC23 has stressed that while a corporation is an entity separate and distinct from its stockholders, the corporate fiction may be disregarded if "used to defeat public convenience, justify a wrong, protect fraud, or defend crime." In these instances, "the law will regard the corporation as an association of persons, or in case of two corporations, will merge them into one." Thus, there is no debate on whether, in alleging bad faith on the part of Lim and Mariano the counterclaims had in effect made them "indispensable parties" thereto; based on the alleged facts, both are clearly parties in interest to the counterclaim.24 Respondents further assert that "Messrs. Lim and Mariano cannot be held personally liable [because their assailed acts] are within the powers granted to them by the proper board resolutions; therefore, it is not a personal decision but rather that of the corporation as represented by its board of directors."25 The foregoing assertion, however, is a matter of defense that should be threshed out during the trial; whether or not "fraud" is extant under the circumstances is an issue that must be established by convincing evidence.26 Suability and liability are two distinct matters. While the Court does rule that the counterclaims against Respondent CCC's president and manager may be properly filed, the determination of whether both can in fact be held jointly and severally liable with respondent corporation is entirely another issue that should be ruled upon by the trial court. However, while a compulsory counterclaim may implead persons not parties to the original complaint, the general rule -- a defendant in a compulsory counterclaim need not file any responsive pleading, as it is deemed to have adopted the allegations in the complaint as its answer -does not apply. The filing of a responsive pleading is deemed a voluntary submission to the jurisdiction of the court; a new party impleaded by the plaintiff in a compulsory counterclaim cannot be considered to have automatically and unknowingly submitted to the jurisdiction of the court. A contrary ruling would result in mischievous consequences whereby a party may be indiscriminately impleaded as a defendant in a compulsory counterclaim; and judgment rendered against it without its knowledge, much less participation in the proceedings, in blatant disregard of rudimentary due process requirements. The correct procedure in instances such as this is for the trial court, per Section 12 of Rule 6 of the Rules of Court, to "order [such impleaded parties] to be brought in as defendants, if jurisdiction over them can be obtained," by directing that summons be served on them. In this manner, they can be properly appraised of and answer the charges against them. Only upon service of summons can the trial court obtain jurisdiction over them. In Sapugay, Cardenas was furnished a copy of the Answer with Counterclaim, but he did not file any responsive pleading to the counterclaim leveled against him. Nevertheless, the Court gave due consideration to certain factual circumstances, particularly the trial court's treatment of the Complaint as the Answer of Cardenas to the compulsory counterclaim and of his seeming acquiescence thereto, as evidenced by his failure to make any objection despite his active participation in the proceedings. It was held thus: "It is noteworthy that Cardenas did not file a motion to dismiss the counterclaim against him on the ground of lack of jurisdiction. While it is a settled rule that the issue of jurisdiction may be raised even for the first time on appeal, this does not obtain in the instant case. Although

it was only Mobil which filed an opposition to the motion to declare in default, the fact that the trial court denied said motion, both as to Mobil and Cardenas on the ground that Mobil's complaint should be considered as the answer to petitioners' compulsory counterclaim, leads us to the inescapable conclusion that the trial court treated the opposition as having been filed in behalf of both Mobil and Cardenas and that the latter had adopted as his answer the allegations raised in the complaint of Mobil. Obviously, it was this ratiocination which led the trial court to deny the motion to declare Mobil and Cardenas in default. Furthermore, Cardenas was not unaware of said incidents and the proceedings therein as he testified and was present during trial, not to speak of the fact that as manager of Mobil he would necessarily be interested in the case and could readily have access to the records and the pleadings filed therein. "By adopting as his answer the allegations in the complaint which seeks affirmative relief, Cardenas is deemed to have recognized the jurisdiction of the trial court over his person and submitted thereto. He may not now be heard to repudiate or question that jurisdiction."27 Such factual circumstances are unavailing in the instant case. The records do not show that Respondents Lim and Mariano are either aware of the counterclaims filed against them, or that they have actively participated in the proceedings involving them. Further, in dismissing the counterclaims against the individual respondents, the court a quo -- unlike in Sapugay -- cannot be said to have treated Respondent CCC's Motion to Dismiss as having been filed on their behalf. Rules on Permissive Joinder of Causes of Action or Parties Not Applicable Respondent CCC contends that petitioners' counterclaims violated the rule on joinder of causes of action. It argues that while the original Complaint was a suit for specific performance based on a contract, the counterclaim for damages was based on the tortuous acts of respondents.28 In its Motion to Dismiss, CCC cites Section 5 of Rule 2 and Section 6 of Rule 3 of the Rules of Civil Procedure, which we quote: "Section 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: (a) The party joining the causes of action shall comply with the rules on joinder of parties; x x x" Section 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." The foregoing procedural rules are founded on practicality and convenience. They are meant to discourage duplicity and multiplicity of suits. This objective is negated by insisting -- as the court a quo has done -- that the compulsory counterclaim for damages be dismissed, only to have it possibly re-filed in a separate proceeding. More important, as we have stated earlier, Respondents Lim and Mariano are real parties in interest to the compulsory counterclaim; it is imperative that they be joined therein. Section 7 of Rule 3 provides:

"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." Moreover, in joining Lim and Mariano in the compulsory counterclaim, petitioners are being consistent with the solidary nature of the liability alleged therein. Second Issue: CCC's Personality to Move to Dismiss the Compulsory Counterclaims Characterizing their counterclaim for damages against Respondents CCC, Lim and Mariano as "joint and solidary," petitioners prayed: "WHEREFORE, it is respectfully prayed that after trial judgment be rendered: "1. Dismissing the complaint in its entirety; "2. Ordering the plaintiff, Gregory T. Lim and Anthony A. Mariano jointly and solidarily to pay defendant actual damages in the sum of at least P2,700,000.00; "3. Ordering the plaintiff, Gregory T. Lim and Anthony A, Mariano jointly and solidarily to pay the defendants LPI, LCLC, COC and Roseberg: "a. Exemplary damages of P100 million each; "b. Moral damages of P100 million each; and "c. Attorney's fees and costs of suit of at least P5 million each. Other reliefs just and equitable are likewise prayed for."29 Obligations may be classified as either joint or solidary. "Joint" or "jointly" or "conjoint" means mancum or mancomunada or pro rata obligation; on the other hand, "solidary obligations" may be used interchangeably with "joint and several" or "several." Thus, petitioners' usage of the term "joint and solidary" is confusing and ambiguous. The ambiguity in petitioners' counterclaims notwithstanding, respondents' liability, if proven, is solidary. This characterization finds basis in Article 1207 of the Civil Code, which provides that obligations are generally considered joint, except when otherwise expressly stated or when the law or

the nature of the obligation requires solidarity. However, obligations arising from tort are, by their nature, always solidary. We have assiduously maintained this legal principle as early as 1912 in Worcester v. Ocampo,30 in which we held: "x x x The difficulty in the contention of the appellants is that they fail to recognize that the basis of the present action is tort. They fail to recognize the universal doctrine that each joint tort feasor is not only individually liable for the tort in which he participates, but is also jointly liable with his tort feasors. x x x "It may be stated as a general rule that joint tort feasors are all the persons who command, instigate, promote, encourage, advise, countenance, cooperate in, aid or abet the commission of a tort, or who approve of it after it is done, if done for their benefit. They are each liable as principals, to the same extent and in the same manner as if they had performed the wrongful act themselves. x x x "Joint tort feasors are jointly and severally liable for the tort which they commit. The persons injured may sue all of them or any number less than all. Each is liable for the whole damages caused by all, and all together are jointly liable for the whole damage. It is no defense for one sued alone, that the others who participated in the wrongful act are not joined with him as defendants; nor is it any excuse for him that his participation in the tort was insignificant as compared to that of the others. x x x "Joint tort feasors are not liable pro rata. The damages can not be apportioned among them, except among themselves. They cannot insist upon an apportionment, for the purpose of each paying an aliquot part. They are jointly and severally liable for the whole amount. x x x "A payment in full for the damage done, by one of the joint tort feasors, of course satisfies any claim which might exist against the others. There can be but satisfaction. The release of one of the joint tort feasors by agreement generally operates to discharge all. x x x "Of course the court during trial may find that some of the alleged tort feasors are liable and that others are not liable. The courts may release some for lack of evidence while condemning others of the alleged tort feasors. And this is true even though they are charged jointly and severally." In a "joint" obligation, each obligor answers only for a part of the whole liability; in a "solidary" or "joint and several" obligation, the relationship between the active and the passive subjects is so close that each of them must comply with or demand the fulfillment of the whole obligation.31 The fact that the liability sought against the CCC is for specific performance and tort, while that sought against the individual respondents is based solely on tort does not negate the solidary nature of their liability for tortuous acts alleged in the counterclaims. Article 1211 of the Civil Code is explicit on this point: "Solidarity may exist although the creditors and the debtors may not be bound in the same manner and by the same periods and conditions." The solidary character of respondents' alleged liability is precisely why credence cannot be given to petitioners' assertion. According to such assertion, Respondent CCC cannot move to dismiss the counterclaims on grounds that pertain solely to its individual co-debtors.32 In cases filed

by the creditor, a solidary debtor may invoke defenses arising from the nature of the obligation, from circumstances personal to it, or even from those personal to its co-debtors. Article 1222 of the Civil Code provides: "A solidary debtor may, in actions filed by the creditor, avail itself of all defenses which are derived from the nature of the obligation and of those which are personal to him, or pertain to his own share. With respect to those which personally belong to the others, he may avail himself thereof only as regards that part of the debt for which the latter are responsible." (Emphasis supplied). The act of Respondent CCC as a solidary debtor -- that of filing a motion to dismiss the counterclaim on grounds that pertain only to its individual co-debtors -- is therefore allowed. However, a perusal of its Motion to Dismiss the counterclaims shows that Respondent CCC filed it on behalf of Co-respondents Lim and Mariano; it did not pray that the counterclaim against it be dismissed. Be that as it may, Respondent CCC cannot be declared in default. Jurisprudence teaches that if the issues raised in the compulsory counterclaim are so intertwined with the allegations in the complaint, such issues are deemed automatically joined.33 Counterclaims that are only for damages and attorney's fees and that arise from the filing of the complaint shall be considered as special defenses and need not be answered.34 CCC's Motion to Dismiss the Counterclaim on Behalf of Respondents Lim and Mariano Not Allowed While Respondent CCC can move to dismiss the counterclaims against it by raising grounds that pertain to individual defendants Lim and Mariano, it cannot file the same Motion on their behalf for the simple reason that it lacks the requisite authority to do so. A corporation has a legal personality entirely separate and distinct from that of its officers and cannot act for and on their behalf, without being so authorized. Thus, unless expressly adopted by Lim and Mariano, the Motion to Dismiss the compulsory counterclaim filed by Respondent CCC has no force and effect as to them. In summary, we make the following pronouncements: 1. The counterclaims against Respondents CCC, Gregory T. Lim and Anthony A. Mariano are compulsory. 2. The counterclaims may properly implead Respondents Gregory T. Lim and Anthony A. Mariano, even if both were not parties in the original Complaint. 3. Respondent CCC or any of the three solidary debtors (CCC, Lim or Mariano) may include, in a Motion to Dismiss, defenses available to their co-defendants; nevertheless, the same Motion cannot be deemed to have been filed on behalf of the said co-defendants. 4. Summons must be served on Respondents Lim and Mariano before the trial court can obtain jurisdiction over them.

WHEREFORE, the Petition is GRANTED and the assailed Orders REVERSED. The court of origin is hereby ORDERED to take cognizance of the counterclaims pleaded in petitioners' Answer with Compulsory Counterclaims and to cause the service of summons on Respondents Gregory T. Lim and Anthony A. Mariano. No costs. SO ORDERED. Republic of the Philippines SUPREME COURT Manila THIRD DIVISION 14) 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 courts 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 courts lack of jurisdiction. Finding no other ground to reverse the trial courts decision, the CA affirmed the petitioners 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 petitioners 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 RTCthe 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--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 positionthat 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 Pindagan 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 Courts 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 P200,000). Our minute resolution in G.R. No. L-10096, Hyson Tan, et al. vs. Filipinas Compaa 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 latters 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 toleratedobviously 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 adverseas well as in Pindagan 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 courts jurisdiction, and who later obtained an adverse judgment therein, we refused to apply the ruling in Sibonghanoy. The Court accorded supremacy to the timehonored 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 courts 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 courts jurisdiction. Notably, from the time it filed its answer to the second amended complaint on April 16, 1985, petitioner did not question the lower courts jurisdiction. It was only on December 29, 1989 when it filed its motion for reconsideration of the lower courts decision that petitioner raised the question of the lower courts 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 courts 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 courts 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 litigants 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 courts 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--vis estoppel, that the ruling in Sibonghanoy stands as an exception, rather than the general rule. Metromedia, thus, was not estopped from assailing the jurisdiction of the labor arbiter before the NLRC on appeal.281avvphi1 Later, in Francel Realty Corporation v. Sycip,29 the Court clarified that: Petitioner argues that the CAs affirmation of the trial courts 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 courts jurisdiction after being invoked to secure affirmative relief against its opponent. In fine, laches prevents the issue of lack of jurisdiction from being raised for the first time on appeal by a litigant whose purpose is to annul everything done in a trial in which it has actively participated. Laches is defined as the "failure or neglect for an unreasonable and unexplained length of time, to do that which, by exercising due diligence, could or should have been done earlier; it is negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it." The ruling in Sibonghanoy on the matter of jurisdiction is, however, the exception rather than the rule.1avvphi1 Estoppel by laches may be invoked to bar the issue of lack of jurisdiction only in cases in which the factual milieu is analogous to that in the cited case. In such controversies, laches should be clearly present; that is, lack of jurisdiction must have been raised so belatedly as to warrant the presumption that the party entitled to assert it had abandoned or declined to assert it. That Sibonghanoy applies only to exceptional circumstances is clarified in Calimlim v. Ramirez, which we quote: A rule that had been settled by unquestioned acceptance and upheld in decisions so numerous to cite is that the jurisdiction of a court over the subject-matter of the action is a matter of law and may not be conferred by consent or agreement of the parties. The lack of jurisdiction of a court may be raised at any stage of the proceedings, even on appeal. This doctrine has been qualified by recent pronouncements which stemmed principally from the ruling in the cited case of Sibonghanoy. It is to be regretted, however, that the holding in said case had been applied to situations which were obviously not contemplated therein. The exceptional circumstance involved in Sibonghanoy which justified the departure from the accepted concept of non-waivability of objection to jurisdiction has been ignored and, instead a blanket doctrine had been repeatedly upheld that rendered the supposed ruling in Sibonghanoy not as the exception, but rather the general rule, virtually overthrowing altogether the time-honored principle that the issue of jurisdiction is not lost by waiver or by estoppel. Indeed, the general rule remains: a courts 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 courts jurisdiction based on procedural infirmity in initiating the action. Her compliance with the appellate courts 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 courts absence or lack of jurisdiction, only supervenes in exceptional cases similar to the factual milieu of Tijam v.

Sibonghanoy. Indeed, the fact that a person attempts to invoke unauthorized jurisdiction of a court does not estop him from thereafter challenging its jurisdiction over the subject matter, since such jurisdiction must arise by law and not by mere consent of the parties. This is especially true where the person seeking to invoke unauthorized jurisdiction of the court does not thereby secure any advantage or the adverse party does not suffer any harm.35 Applying the said doctrine to the instant case, the petitioner is in no way estopped by laches in assailing the jurisdiction of the RTC, considering that he raised the lack thereof in his appeal before the appellate court. At that time, no considerable period had yet elapsed for laches to attach. True, delay alone, though unreasonable, will not sustain the defense of "estoppel by laches" unless it further appears that the party, knowing his rights, has not sought to enforce them until the condition of the party pleading laches has in good faith become so changed that he cannot be restored to his former state, if the rights be then enforced, due to loss of evidence, change of title, intervention of equities, and other causes.36 In applying the principle of estoppel by laches in the exceptional case of Sibonghanoy, the Court therein considered the patent and revolting inequity and unfairness of having the judgment creditors go up their Calvary once more after more or less 15 years.37 The same, however, does not obtain in the instant case. We note at this point that estoppel, being in the nature of a forfeiture, is not favored by law. It is to be applied rarelyonly from necessity, and only in extraordinary circumstances. The doctrine must be applied with great care and the equity must be strong in its favor.38 When misapplied, the doctrine of estoppel may be a most effective weapon for the accomplishment of injustice.39 Moreover, a judgment rendered without jurisdiction over the subject matter is void.40 Hence, the Revised Rules of Court provides for remedies in attacking judgments rendered by courts or tribunals that have no jurisdiction over the concerned cases. No laches will even attach when the judgment is null and void for want of jurisdiction.41 As we have stated in Heirs of Julian Dela Cruz and Leonora Talaro v. Heirs of Alberto Cruz,42 It is axiomatic that the jurisdiction of a tribunal, including a quasi-judicial officer or government agency, over the nature and subject matter of a petition or complaint is determined by the material allegations therein and the character of the relief prayed for, irrespective of whether the petitioner or complainant is entitled to any or all such reliefs. Jurisdiction over the nature and subject matter of an action is conferred by the Constitution and the law, and not by the consent or waiver of the parties where the court otherwise would have no jurisdiction over the nature or subject matter of the action. Nor can it be acquired through, or waived by, any act or omission of the parties. Moreover, estoppel does not apply to confer jurisdiction to a tribunal that has none over the cause of action. x x x Indeed, the jurisdiction of the court or tribunal is not affected by the defenses or theories set up by the defendant or respondent in his answer or motion to dismiss. Jurisdiction should be determined by considering not only the status or the relationship of the parties but also the nature of the issues or questions that is the subject of the controversy. x x x x The proceedings before a court or tribunal without jurisdiction, including its decision, are null and void, hence, susceptible to direct and collateral attacks.43 With the above considerations, we find it unnecessary to resolve the other issues raised in the petition. WHEREFORE, premises considered, the petition for review on certiorari is GRANTED. Criminal Case No. 2235-M-94 is hereby DISMISSED without prejudice. SO ORDERED.