JURISDICTION

REGULAR COURTS

Republic of the Philippines SUPREME COURT Manila SECOND DIVISION

G.R. No. L-36098 January 21, 1983 ORTIGAS & COMPANY, LIMITED PARTNERSHIP, petitioner, vs. JUDGE JOSE B. HERRERA, respondent. RESOLUTION

The action involved in this case is one for specific performance and not for a sum of money and wherefore incapable of pecuniary estimation because what private respondent seeks is the performance of petitioner's obligation under a written contract to make a refund but under certain specific conditions still to be proven or established. In a case for the recovery of a sum of money, as the collection of a debt, the claim is considered capable of pecuniary estimation (Lapitan vs. Scandia Inc., 24 SCRA 479) because the obligation to pay the debt is not conditioned upon any specific fact or matter. But when a party to a contract has agreed to refund to the other party a sum of money upon compliance by the latter of certain conditions and only upon compliance therewith may what is legally due him under the written contract be demanded, the action is one not capable of pecuniary estimation. The payment of a sum of money is only incidental which can only be ordered after a determination of certain acts the performance of which being the more basic issue to be inquired into. Although private respondent's complaint in the court a quo is designated as one for a sum of money and damages, an analysis of all the factual allegations of the complaint patently shows that what private respondent seeks is the performance of petitioner's obligation under the written contract to make the refund of the rate of P10.00 per square meter or in the total amount of P4,820.00, but only after proof of having himself fulfilled the conditions that will give rise to petitioner's obligation, a matter clearly incapable of pecuniary estimation. In view of the foregoing, the Court RESOLVED to reverse the order appealed from and the complaint filed with the City Court of Manila, Branch II, docketed as Civil Case No. 211673 is hereby ordered dismissed for lack of jurisdiction. Republic of the Philippines SUPREME COURT Manila FIRST DIVISION

PER CURIAM: G.R. No. L-36098 (Ortigas & Company, Limited Partnership vs. Judge Jose B. Herrera, City Court of Manila, Branch II, and Emiliano Samson). On August 14, 1969, petitioner and private respondent entered into an agreement thereby for and in consideration of P55,430.00, the former agreed to sell to the latter a parcel of land with a special condition that should private respondent as purchaser complete the construction including the painting of his residential house on said lot within two (2) years from August 14, 1969, petitioner, as owner, has agreed to refund to private respondent the amount of P10.00 per square meter. When the aforesaid special condition was fulfilled, private respondent, on May 17, 1971 accordingly notified in writing the petitioner of the same and requested for his refund amounting to P4,820.00. Upon failure of petitioner to pay his obligation, private respondent on May 6, 1972 filed a complaint for sum of money and damages with the City Court of Manila, Branch II, against petitioner docketed as Civil Case No. 211673. A motion to dismiss was filed by petitioner on grounds of lack of jurisdiction, failure of the complaint to state a cause of action and improper avenue. City Court Judge Jose B. Herrera in his order dated June 27, 1972 held in abeyance the resolution on the motion until after the trial of the case on the merits. A reconsideration of the said order having been denied, petitioner on October 12, 1972 filed with the Court of First Instance of Manila Branch XXVII, a special civil action for certiorari and prohibition with preliminary injunction docketed as Civil Case No. 88510. A motion to dismiss was filed by private respondent, and on November 17, 1972, the petition was dismissed on the ground that the claim of private respondent in his complaint, being less than P10,000.00, is within the exclusive jurisdiction of the city court. Petitioner thus filed the present petition and argues among others that: (a) as determined from the allegations of the complaint, the action is for specific performance of contract; and (b) actions in which the subject of litigation is not capable of pecuniary estimation such as complaints for specific performance of contract are exclusively cognizable by the Court of First Instance. Hence, the decisive question to be resolved in this present petition is whether or not the City Court of Manila, Branch II, has jurisdiction over the complaint.

G.R. Nos. 102193-97 May 10, 1994 MS. EMILY YU FAJARDO, SPOUSES SALVADOR and ENGRACIA GIANAN, RENE and BEVERLY RODELAS, SPOUSES JULIAN and TERESITA CUIZON, MS. TERESITA RIVERA and RICARDO VILLANUEVA, petitioners, vs. HON. ODILON I. BAUTISTA, in his capacity as the Presiding Judge of the Regional Trial Court, Branch 37, Calamba, Laguna, SPOUSES ISABELO and PURITA JAREO, RUBEN HABACON, and CESAR S. REYES, in his capacity as the Register of Deeds, Calamba, Laguna, respondents. Encanto, Mabugat & Associates for petitioners. Narciso M. Habacon for respondents Ruben Habacon and Cesar S. Reyes.

DAVIDE, JR., J.: This is a special civil action for certiorari which seeks to annul the 4 September 1991 Order of the respondent Judge dismissing the complaints of the petitioners for lack of jurisdiction, and the 20 September 1991 Order denying the petitioners' motion for reconsideration. The respondent Judge had ruled that jurisdiction over the cases pertained to the Housing and Land Use Regulatory Board (HLRB) and not the Regional Trial Court. The petitioners asseverate that the RTC has jurisdiction over the cases. The pleadings of the parties disclose the following facts:

Private respondents Isabelo Jareo and Purita Jareo (hereinafter JAREOS) are the owners and developers of a subdivision known as the Calamba Central Compound. On various dates, they as SELLERS, and the petitioners as BUYERS signed separate contracts, each designated as a CONTRACT TO SELL, under which, for the considerations therein stated, they bound themselves to sell to the petitioners the lots subject thereof, and after the latter shall have paid the purchase price and interest, to execute in favor of the petitioners the corresponding deeds of transfer of title, free from any lien or encumbrance except those expressly provided for in the Contract to Sell. The Contracts to Sell are herein described: Petitioners-Buyers Lot subject execution of contract to sell contract to sell Date of of

C, and were assigned to Branch 37 of the Regional Trial Court of Calamba. On 9 August 1991, HABACON filed a motion to dismiss the complaints on the ground that the plaintiffs (petitioners herein) have no legal capacity to sue because they were not parties to 16 the "BILIHAN." In its Order of 12 August 1991, the trial court, through the respondent Judge, directed the plaintiffs to show cause why their complaints should not be dismissed for lack of jurisdiction pursuant to P.D. No. 957 (Subdivision and Condominium Buyers' Protective Decree), as amended by P.D. No. 1344, and the doctrine laid down by this Court in Solid Homes, Inc. vs. 18 Payawal. In their compliance with the show cause order, the petitioners maintained that it is the trial court, and not the HLRB, which has jurisdiction over the complaint. They contend that Solid Homes, Inc. vs. Payawal is inapplicable because in their cases: (1) the title of the developers, the JAREOS, had already passed to a third person, HABACON; (2) their action is for the annulment of the title of a third person; (3) HABACON is not a developer; and (4) Section 19(1) of B.P. Blg. 129 vests upon the Regional Trial Court the jurisdiction to hear and decide all civil actions which involve title to or possession of any real property or any interest therein, except actions for unlawful detainer and forcible entry. In its Order of 4 September 1991, the trial court dismissed the aforesaid civil cases for lack of jurisdiction. It held: The Court does not agree with the plaintiffs. PD No. 957 as amended by P.D. No. 1344 gives the National Housing Authority now the Human Settlement 21 Regulatory Commission (HSRC) inclusive [sic] jurisdiction to hear and, decide cases of "unsound real estate business practices" (Sec. 1(a), P.D. 1344). This authority is broad enough to include all kinds of real estate transactions involving subdivision lot or condominium, wherein either the subdivision lot or condominium buyer, project owner, developer, dealer, broker or salesman is involved. The petitioners filed a motion for the reconsideration of the order, but the trial court denied this in its Order of 20 September 22 1991. It ruled that while HABACON may not be the developer, the JAREOS are, and by selling the same lots to HABACON after they were previously sold to different parties, the JAREOS may have committed an "unsound business practice." Moreover, it ruled that Section 19(2) of B.P. Blg. 129, being a general law, should yield to P.D. No. 957, as amended by P.D. No. 1344, which is a special law. On 24 December 1991, the petitioners filed the instant special civil action for certiorari to annul the 4 September 1991 and 20 September 1991 Orders of the trial court on the ground that the judge acted with grave abuse of discretion amounting to lack of jurisdiction in dismissing their complaints and that they have no other plain, speedy, and adequate remedy in the ordinary course of law. The petitioners maintain that the trial court has jurisdiction over their complaints. In the Resolution of 18 November 1991, we required the respondents to comment on the petition. Private respondent HABACON filed his comment and opposition on 27 August 24 1992 while public respondent Cesar S. Reyes filed his 25 comment on 24 August 1993. Both respondents rely on our pronouncement in Solid Homes, Inc. vs. Payawal and echo the ruling of the trial court in the questioned orders. The copy of the resolution sent to the JAREOS was returned unserved and in the Resolution of 21 July 1993, we considered it as served on 26 them. As required, the petitioners filed a reply to the 27 comment. On 8 November 1993, we resolved to give due course to the petition and required the parties to submit their memoranda, which the petitioners complied with on 29
23 20 19 17

15

1) Spouses Julian a) Lot No. 9, Block and Teresita No. 3, covered by 1 Cuizon TCT No. T-66231 25 January 1979 b) Lot No. 2 3 No. 1. 24 April 1979 11, Block

2) Teresita Rivera Lot No. 12, BLock 5 4 December 1985 and Ricardo No. 3, covered by Villanueva TCT No. 7-62229 3) Spouses Rene and Lot No. 14, Block 17 5 December 1985 Beverly Rodelas No. 3, covered by TCT No. T-66231 4) Spouses Salvador Lot No. 9, Block 17 March 6 1988 and Engracia No. 2, covered by Gianan TCT No. T-66273 On the other hand, private respondent Fernando Realty and Development Corporation (hereinafter FERNANDO) as SELLER, and petitioner Emily Yu Fajardo as BUYER signed on 7 22 February 1985 a CONTRACT TO SELL under which for the considerations therein stated, FERNANDO agreed to sell to Fajardo Lot No. 10, Block No. 3, also located at the Calamba 8 Central Compound Subdivision, and upon full payment of the agreed price and interest thereon, to execute a deed of absolute sale in favor of Fajardo. It appears, however, that on 18 October 1986, the JAREOS sold the aforesaid lots subject of the different contracts to sell to private respondent Ruben Habacon (hereinafter HABACON) under separate documents denominated as "Kasulatan ng 9 Bilihan." On 18 February 1991, HABACON caused the cancellation of the certificates of title covering the said lots and 10 the issuance of new ones in his name. When the petitioners learned of these, they filed on 21 June 1991 separate complaints with the court a quo for annulment of the sales in favor of HABACON and of the new certificates of title issued to him, for reinstatement of the certificates of title cancelled by those issued to HABACON, and for accounting and damages. They prayed in their complaints for a judgment (a) declaring the "Kasulatan na Bilihan" executed in favor of HABACON as an equitable mortgage; (b) annulling the new certificates of title issued to HABACON and reinstating those previously cancelled by the new certificates of title; (c) ordering HABACON and the JAREOS to determine the unpaid balance of the purchase price under the Contracts to Sell, to accept payments thereof, and to execute the deeds of absolute sale in favor of the petitioners; and (e) ordering the defendants to pay actual and exemplary damages and attorney's fees specified therein, as well as the costs. The complaints were docketed as Civil Cases Nos. 1683-9111 12 13 14 C, 1684-91-C, 1685-91-C, 1686-91-C, and 1688-91-

December 1993 29 1994.

28

and the private respondents, on 28 March

The core issue in this case is whether the trial court gravely abused its discretion in dismissing, for lack of jurisdiction, the complaints filed by the petitioners. Before resolving this issue, a procedural matter must first be considered. Generally, an order of dismissal, whether right or wrong, is a final order, and hence a proper subject of appeal, 30 not certiorari. The remedies of appeal and certiorari are mutually exclusive and not alternative or 31 successive. Accordingly, although the special civil action of certiorari is not proper when an ordinary appeal is available, it may be granted where it is shown that the appeal would be inadequate, slow, insufficient, and will not promptly relieve a party from the injurious effects of the order complained of, or where appeal is inadequate and 32 ineffectual. Nevertheless, certiorari cannot be a substitute for 33 the lost or lapsed remedy of appeal, where such loss is occasioned by the petitioner's own neglect or error in the choice 34 of remedies. The petitioners admit that they received a copy of the trial court's order dismissing their complaints on 4 October 35 1991. The instant petition was filed on 24 October 1991 or beyond the 15-day period to appeal from the order. The petitioners have not even attempted to explain why they were unable to appeal from the challenged order within the reglementary period. This civil action then was resorted to as a substitute for the lost or lapsed remedy of appeal, and since none of the exceptions to the rigid rule barring substitution of remedies was alleged to exist in this petition, or even indicated by the pleadings, this petition must be dismissed. Even if we were to accept this petition in the broader interest of justice, it must still fail for the trial court correctly ruled that it has no jurisdiction over the subject matter in Civil Cases Nos. 168391-C, 1684-91-C, 1685-91-C, 1686- 91-C, and 1688-91-C. Jurisdiction thereon was originally vested in the National Housing Authority (NHA) under P.D. No. 957, as amended by P.D. No. 1344. Under E.O. No. 648 of 7 February 1981, this jurisdiction was transferred to the Human Settlements Regulatory Commission (HSRC) which, pursuant to E.O. No. 90 of 17 December 1986, was renamed as the Housing and Land Use Regulatory Board. We agree with the trial court that the complaints do involve unsound real estate business practices on the part of the owners and developers of the subdivision who entered into Contracts to Sell with the petitioners. By virtue of Section 1 of P.D. No. 1344 and our decision in Solid Homes, Inc. vs. Payawal, the NHA, now HLRB, has the exclusive jurisdiction to hear and decide the matter. In addition to involving unsound real estate business practices, the complaints also involve specific performance of the contractual and statutory obligations of the owners or developers of the subdivision. The claims for annulment of the "Kasulatan ng Bilihan" in favor of HABACON and the certificates of title issued to him and for damages are merely incidental. Section 1 of P.D. No. 1344, promulgated on 2 April 1978, provides as follows: Sec. 1. In the exercise of its functions to regulate the real estate trade and business and in addition to its powers provided for in Presidential Decree No. 957, the National Housing Authority shall have exclusive jurisdiction to hear and decide cases of the following nature: A. Unsound real estate business practices; B. Claims involving refund and any other claims filed by subdivision lot or condominium unit buyer against the project owner, developer, dealer, broker or salesman; and

C. Cases involving specific performance of contractual and statutory obligations filed by buyers of subdivision lots or condominium units against the owner, developer, dealer, broker or salesman. (Italics supplied) Conformably with this section, we had earlier upheld the jurisdiction of the NHA to determine the rights of the parties under a contract to sell a subdivision lot in Antipolo Reality 36 Corp. vs. National Housing Authority and struck down the exercise of jurisdiction by the Regional Trial Court over a case instituted by a lot buyer for delivery of title against the subdivision owner in Solid Homes, Inc. vs. Payawal. We also sustained the jurisdiction of the HLRB over complaints for (a) the refund of reservation fees for the purchase of a subdivision 37 lot, (b) specific performance filed by a lot buyer against the 38 seller of a subdivision lot, (c) annulment of the mortgage constituted by the project owner without the buyer's consent, the mortgage foreclosure sale, and the condominium certificate of title issued to the highest bidder at the said foreclosure 39 sale, and (d) collection of the balance of the unpaid purchase price of a subdivision lot filed by the developer of a subdivision against the lot 40 buyer. In CT Torres Enterprises, Inc. vs. Hibionada, we further declared that incidental claims for damages may be resolved by the HLRB. Thus: It is clear from Section 1(c) of the above quoted PD No. 1344 that the complaint for specific performance with damages filed by Diongon with the Regional Trial Court of Negros Occidental comes under the jurisdiction of the Housing and Land Use Regulatory Board. Diongon is a buyer of a subdivision lot seeking specific performance of the seller's obligation to deliver to him the corresponding certificate of title. The argument that only courts of justice can adjudicate claims resoluble under the provisions of the Civil Code is out of step with the fast-changing times. There are hundreds of administrative bodies now performing this function by virtue of a valid authorization from the legislature. This quasi-judicial function, as it is called, is exercised by them as an incident of the principal power entrusted to them of regulating certain activities falling under their particular expertise. In the Solid Homes case for example the Court affirmed the competence of the Housing and Land use Regulatory Board to award damages although this is an essentially judicial power exercisable ordinarily only by the courts of justice. This departure from the traditional allocation of governmental powers is justified by expediency, or the need of the government to respond swiftly and competently to the pressing problems of the modern world. Accordingly, the trial court committed no grave abuse of discretion in dismissing the complaints of the petitioners. WHEREFORE, the due course Resolution of 8 November 1993 is RECALLED and, for lack of merit, the instant petition is DISMISSED with costs against the petitioners. SO ORDERED. Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. L-65021 November 21, 1991
41

BENGUET CORPORATION, petitioner, vs. HON OSCAR L. LEVISTE, in his capacity as Presiding Judge of the Regional Trial Court (National Capital Judicial Region, Branch XCVII, Quezon City) and HELEN DIZONREYES, respondents. Sycip Salazar Feliciano & Hernandez for petitioner. Laurel Law offices for private respondent.

should the validity of the Operations Agreement be upheld, defendants therein be ordered to observe and comply with the sharing of profits stipulated in the Agreement of January 21, 1967. She further prayed for the award of attorney's fees and expenses of litigation as may be proved during the trial. On August 12, 1980, Benguet filed a Motion to Dismiss on the following grounds: 1) the court is without jurisdiction over the subject matter and nature of the action; 2) the action is barred by prior judgment and laches; 3) the action to declare invalid the Deed of Ratification has prescribed; and 4) the venue of the action was improperly laid. Dizon Mines filed its own motion to dismiss. After private respondent has filed her consolidated opposition to the motions to dismiss and Benguet, its reply to said consolidated opposition, the trial court issued an Order dated March 26, 1982, denying the motions to dismiss for lack merit. 7 Its motion for reconsideration having been likewise denied in an Order dated June 20, 1983, 8 petitioner Benguet is now before this Court, reiterating the four (4) grounds stated in its motion to dismiss. Invoking Section 7 (c) of Presidential Decree No. 1281 and the ruling in Twin Peaks Mining Association vs. Navarro and Philex Mining Corp., 9 petitioner contends that the RTC has no jurisdiction over Civil Case No. 30171 as jurisdiction over actions to cancel mining contracts is vested exclusively in the Bureau of Mines and Geo-Sciences. It likewise adverts to the decision of the Secretary of Natural Resources dated March 17, 1976 on the private respondent's opposition to the registration of the subject Operations Agreement. It claims that that decision had become final upon private respondent's failure to appeal to the Office of the President, constitutes res judicata to the question of the validity of the Operations Agreement. Besides, by failing to take seasonable action, private respondent is guilty of laches in that she has led petitioner Benguet to believe that she was amenable to the decision of the Secretary of Natural Resources and to incur huge expenses in connection with the development of the mining claims. Moreover, petitioner maintains that the action to annul the Deed of Ratification upon which private respondent thinks the validity of the Operations Agreement necessarily depends, should have been brought within four (4) years from its execution on December 12, 1974. Thus, the complaint filed on June 20, 1980 came too late. Lastly, petitioner theorizes that since the action to annul the mining contract necessarily involves the recovery of possession of the mining claims which are located in Zambales, venue of the action should have been laid in Zambales. Private respondent in her Comment, later adopted as her Memorandum, 10 confined her discussion to the issues of jurisdiction and venue, because in her opinion, the other grounds involve questions of facts entailing the presentation of evidence, which is premature and improper in a petition for certiorari. 11 While admitting that the contract sought to be annulled is a mining contract, private respondent nonetheless opines that the action for its annulment does not fall under the jurisdiction of the Bureau of Mines. The reason given is that Section 7 (c) of P.D. 1281 contemplates a mining contract, valid and binding in all respects, but either the claimowner or operator refuses to comply with its terms and conditions. In the case at bar, the contract is null and void because of the mental incapacity of the late Celestino Dizon to execute the Deed of Ratification on the validity of which the validity of the Operations Agreement is in turn dependent. Thus, the principal issue in this case is not whether or not the claimowner or operator refuses to comply with the contract's terms and conditions, but rather the mental capacity of the attorney-in-fact to execute a prior agreement upon which the Operations Agreement is based. It is

FERNAN, C.J.:p At issue in this petition for certiorari and prohibition with preliminary injunction is the jurisdiction of the regional trial court (RTC) to take cognizance of an action for annulment of operations agreement entered into by and between two mining companies. The action under consideration was commenced by private respondent Helen Dizon-Reyes against herein petitioner Benguet Corporation and Dizon Copper-Silver Mines, Inc. 1 on June 20, 1980 before the Regional Trial Court of Quezon City. In her complaint, docketed as Civil Case No. Q-30171, private respondent alleged that she is the claimowner of 11 mining claims all located in the province of Zambales. On January 15, 1967, she executed a Special Power of Attorney constituting her father, Celestino M. Dizon, as her attorney-in-fact with full powers to "transfer, assign and dispose of her 11 mining claims." 2 Soon thereafter on January 21, 1967, Celestino M. Dizon, acting as such attorney-in-fact for private respondent and other claimowners, entered into an Agreement, 3 with Dizon Mine whereby the latter was granted the right to explore, develop, exploit and operate the 57 mining claims owned by the claimowners including the 11 claims of private respondent. Seven (7) years later, on December 17, 1974, private respondent and the other claimowners executed a Deed of Ratification of Assignment, 4 confirming the assignment, transfer and conveyance unto Dizon Mines and its assigns and successors of the rights to possess, occupy, explore, develop and operate all the aforesaid mining claims. On March 1, 1975, or almost three (3) months after the Deed of Ratification was executed, private respondent revoked Special Power of Attorney of January 15, 1967, stating that "while there is no question that I still have complete and full trust and confidence in the judgment and wisdom of my father, it is not my wish to add any more to his already many a mounting problems." 5 Notice of the revocation was served on Dizon Mines on March 20, 1975 and on Benguet on August 26, 1975. However, in spite of said notice, on September 6, 1975, Dizon Mines and Benguet entered into an Operations Agreement 6 whereby the former transferred to the latter the possession of the 57 mining claims for the purpose of exploring, developing and operating them for production and marketing of marketable products under the terms and conditions specified therein. Claiming that the Operations Agreement lacked legal basis by reason of the revocation of Celestino Dizon's special power of attorney; the obligation imposed by the Agreement of January 21, 1967 on Dizon Mines to itself operate the mines after raising the capital needed therefor, without authority to engage another corporation for this purpose; and the inefficacy of the Deed of Ratification arising from the physiological incapacity of Celestino Dizon to give his consent thereto, private respondent prayed that the Operations Agreement be declared null and void and inoperative insofar as it covers her eleven (11) lode mining claims. In the alternative, private respondent prayed that

claimed that the Bureau of Mines and Geo-Sciences is not equipped to determine the question of mental capacity. Anent the issue of venue, private respondent contends that the case does not affect title to or possession of real property, and therefore, is not a real action but an action in personam, for which venue is laid in the residence of the plaintiff. We grant the petition. Presidential Decree No. 1281 which took effect on January 16,1978 vests the Bureau of Mines with jurisdictional supervision and control over all holders of mining claims or applicants for and/or grantees of mining licenses, permits, leases and/or operators thereof, including mining service contracts and service contractors insofar as their mining activities are concerned. 12 To effectively discharge its task as the Government's arm in the administration and disposition of mineral resources, Section 7 of P.D. No. 1281 confers upon the Bureau quasi-judicial powers as follows: Sec. 7. In addition to its regulatory and adjudicative functions over companies, partnerships or persons engaged in mining exploration, development and exploitation, the Bureau of Mines shall have original and exclusive jurisdiction to hear and decide case involving: xxx xxx xxx (c) cancellation and/or enforcement of mining contracts due to the refusal of the claimowner/operator to abide by the terms and conditions thereof. Analyzing the objectives of P.D. 1281, particularly said Section 7 thereof, the Court in Twin Peaks Mining Association, 13 the case relied upon by petitioner, noted that the trend is to make the adjudication of mining cases a purely administrative matter. This observation was reiterated in the more recent case of Atlas Consolidated Mining & Development Corp. vs. Court of Appeals. 14 In the case at bar, it is not disputed that the subject agreement is a mining contract and private respondent, in seeking a judicial declaration of its nullity, does not wish to abide by its terms and conditions. These elements alone bring the action within the ambit of Section 7 of P.D. 1281. Whatever the basis for the refusal to abide by the contract's terms and conditions, the basic issue remains one of its cancellation, which is precisely what P.D. No. 1281 places within the exclusive original jurisdiction for the Bureau. The reason underlying such refusal is indeed an irrelevant matter insofar as jurisdictional competence is concerned, for to make jurisdiction dependent thereon would not only be "ratifying two judicial bodies exercising jurisdiction over an essentially the same subject mattera situation analogous to split jurisdiction which is obnoxious to the orderly administration of justice" 15 but also clearly ignoring the object of P.D. 1281 to make the adjudication of mining cases a purely administrative matter. And if, perchance the law did intend to split jurisdiction, it could have done so by providing exceptions to par. (c), Section 7 of P.D. No. 1281. Not having done so, there can be no justification for restricting or limiting the Bureau's jurisdiction over "actions for cancellation and/or enforcement of mining contracts due to the refusal of the claimowner/operator to abide by the terms and conditions thereof." In the light of our ruling that the jurisdiction over private respondent's action to annul the Operations Agreement pertains to the Bureau of Mines and Geo-Sciences rather than the regional trial court, the question of venue becomes immaterial. Considering further that the other issues raised by petitioner, namely res judicata, laches and prescription are factual matters

which are not only improper in a petition for certiorari but which, more importantly, petitioner failed to substantiate, no ruling on these issues need be made. WHEREFORE, the instant petition is GRANTED. The assailed orders of March 26, 1982 and June 20, 1983 are set aside and Civil Case No. Q-30171 of the Regional Trial Court of Quezon City, Branch XCVII, is ordered DISMISSED. This decision is immediately executory. Costs against private respondent. SO ORDERED. Republic of the Philippines SUPREME COURT Manila FIRST DIVISION

G.R. No. 109093 November 20, 1995 LOPE MACHETE, NICASIO JUMAWID, SANTIAGO JUMAWID, JOHN JUMAWID, PEDRO GAMAYA, RENATO DELGADO, FERNANDO OMBAHIN, MATIAS ROLEDA, PASIANO BARO, IGNACIO BARO, MAMERTO PLARAS and JUSTINIANO VILLALON, petitioners, vs. COURT OF APPEALS and CELESTINO VILLALON, respondents.

BELLOSILLO, J.: Are Regional Trial Courts' vested with jurisdiction over cases for collection of back rentals from leasehold tenants? On 21 July 1989 private respondent Celestino Villalon filed a complaint for collection of back rentals and damages before the Regional Trial Court of Tagbilaran City against petitioners Lope Machete, Nicasio Jumawid, Santiago Jumawid, John Jumawid, Pedro Gamaya, Renato Delgado, Fernando Ombahin, Matias Roleda, Pasiano Baro, Ignacio Baro, Mamerto Plaras and Justiniano Villalon. The complaint alleged that the parties entered into a leasehold agreement with respect to private respondent's landholdings at Poblacion Norte, Carmen, Bohol, under which petitioners were to pay private respondent a certain amount or percentage of their harvests. However, despite repeated demands and with no valid reason, petitioners failed to pay their respective rentals. Private respondent thus prayed that petitioners be ordered to pay him back rentals and damages. Petitioners moved to dismiss the complaint on the ground of lack of jurisdiction of the trial court over the subject matter. They contended that the case arose out of or was connected with agrarian relations, hence, the subject matter of the complaint fell squarely within the jurisdiction of the Department of Agrarian Reform (DAR) in the exercise of its quasi-judicial powers under Sec. 1, pars. (a) and (b), Rule II of the Revised Rules of the Department of Agrarian Reform Adjudication Board (DARAB). On 22 August 1989 the trial court granted the motion to 1 dismiss, and on 28 September 1989 denied the motion for 2 reconsideration. Private respondent sought annulment of both orders before respondent Court of Appeals which on 21 May 1992 rendered judgment reversing the trial court and directing it to assume 3 jurisdiction over the case on the basis of its finding that . . . The CARL (RA 6657) and other pertinent laws on agrarian reform cannot be seen to encompass a case of simple collection of back

rentals by virtue of an agreement, as the one at bar, where there is no agrarian dispute to speak of (since the allegation of failure to pay the agreed rentals was never controverted in the motion to dismiss) nor the issue raised on application, implementation, enforcement or 4 interpretation of these laws. On 18 January 1993 the appellate court rejected the motion for 5 reconsideration. Petitioners maintain that the alleged cause of action of private respondent arose from an agrarian relation and that respondent appellate court failed to consider that the agreement involved is an agricultural leasehold contract, hence, the dispute is agrarian in nature. The laws governing its execution and the rights and obligations of the parties thereto are necessarily R.A. 6 7 3844, R.A. 6657 and other pertinent agrarian laws. Considering that the application, implementation, enforcement or interpretation of said laws are matters which have been vested in the DAR, this case is outside the jurisdiction of the trial court. The petition is impressed with merit. Section 17 of E.O. 8 229 vested the DAR with quasi-judicial powers to determine and adjudicate agrarian reform matters as well as exclusive original jurisdiction over all matters involving implementation of agrarian reform except those falling under the exclusive original jurisdiction of the Department of Agriculture and the Department of Environment and Natural Resources in accordance with law. Executive Order 129-A, while in the process of reorganizing and strengthening the DAR, created the DARAB to assume the powers and functions with respect to the adjudication of 9 agrarian reform cases. Section 1, pars. (a) and (b), Rule II of the Revised Rules of the DARAB explicitly provides Sec. 1. Primary, Original and Appellate Jurisdiction. The Agrarian Reform Adjudication Board shall have primary jurisdiction, both original and appellate, to determine and adjudicate all agrarian disputes, cases, controversies, and matters or incidents involving the implementation of the Comprehensive Agrarian Reform Program under Republic Act No. 6657, Executive Orders Nos. 229, 228 and 129-A, Republic Act No. 3844 as amended by Republic Act No. 6389, Presidential Decree No. 27 and other agrarian laws and their implementing rules and regulations. Specifically, such jurisdiction shall extend over but not be limited to the following: (a) Cases involving the rights and obligations of persons engaged in the cultivation and use of agricultural land covered by the Comprehensive Agrarian Reform Program (CARP) and other agrarian laws, (b) Cases involving the valuation of land, and determination and payment of just compensation, fixing and collection of lease rentals, disturbance compensation, amortization payments, and similar disputes concerning the functions of the Land Bank . . . In Quismundo v. Court of Appeals, this Court interpreted the effect of Sec. 17 of E.O. 229 on P.D. 946, which amended R.A. 3844, the agrarian law then in force The above quoted provision (Sec. 17) should be 11 deemed to have repealed Sec. 12 (a) and (b) of Presidential Decree No. 946 which invested the then courts of agrarian relations with original exclusive jurisdiction over cases and questions involving rights granted and obligations imposed by presidential issuances promulgated in relation to the agrarian reform program. Formerly, under Presidential Decree No. 946, amending Chapter IX of Republic Act No. 3844, the courts of agrarian relations had original and exclusive
10

jurisdiction over "cases involving the rights and obligations of persons in the cultivation and use of agricultural land except those cognizable by the National Labor Relations Commission" and "questions involving rights granted and obligations imposed by laws, Presidential Decrees, Orders, Instructions, Rules and Regulations issued and promulgated in relation to the agrarian reform program," except those matters involving the administrative implementation of the transfer of land to the tenant-farmer under Presidential Decree No. 27 and amendments thereto which shall be exclusively cognizable by the Secretary of Agrarian 12 Reform. In 1980, upon the passage of Batas Pambansa Blg. 129, otherwise known as the Judiciary Reorganization Act, the courts of agrarian relations were integrated into the regional trial courts and the jurisdiction of the former 13 was vested in the latter courts. However, with the enactment of Executive Order No. 229, which took effect on August 29, 1987, fifteen (15) days after its release for publication in the Official 14 Gazette, the regional trial courts were divested of their general jurisdiction to try agrarian reform matters. The said jurisdiction is now vested in the Department of Agrarian Reform. On 15 June 1988 R.A. 6657 was passed containing provisions which evince and support the intention of the legislature to vest in the DAR exclusive jurisdiction over all agrarian reform 15 matters. Section 50 thereof substantially reiterates Sec. 17 of E.O. 229 thus Sec. 50. Quasi-Judicial Powers of the DAR. The DAR is hereby vested with primary jurisdiction to determine and adjudicate agrarian reform matters and shall have exclusive original jurisdiction over all matters involving the implementation of agrarian reform, except those falling under the exclusive jurisdiction of the Department of Agriculture (DA) and the Department of Environment and Natural Resources (DENR) . . . Section 3, par. (d), thereof defines the term "agrarian dispute" as referring to any controversy relating to tenurial arrangements, whether leasehold, tenancy, stewardship or otherwise, over lands devoted to agriculture, including disputes concerning farm workers' associations or representation of persons in negotiating, fixing, maintaining, changing or seeking to arrange terms or conditions of such tenurial arrangements. However it may be mentioned in passing that the Regional Trial Courts have not been completely divested of jurisdiction over agrarian reform matters. Section 56 of R.A. 6657 confers "special jurisdiction" on "Special Agrarian Courts," which are Regional Trial Courts designated by this Court at least one (1) branch within each province to act as such. These Regional Trial Courts designated as Special Agrarian Courts have, according to Sec. 57 of the same law, original and exclusive jurisdiction over: (a) all petitions for the determination of just compensation to landowners, and (b) the prosecution of 16 all criminal offenses under the Act. Consequently, there exists an agrarian dispute in the case at bench which is exclusively cognizable by the DARAB. The failure of petitioners to pay back rentals pursuant to the leasehold contract with private respondent is an issue which is clearly beyond the legal competence of the trial court to resolve. The doctrine of primary jurisdiction does not warrant a court to arrogate unto itself the authority to resolve a controversy the

jurisdiction over which is initially lodged with an administrative 17 body of special competence. Thus, respondent appellate court erred in directing the trial court to assume jurisdiction over this case. At any rate, the present legal battle is "not altogether lost" on the part of private respondent because as this Court was quite emphatic 18 in Quismundo v. Court of Appeals, the resolution by the DAR is to the best advantage of the parties since it is in a better position to resolve agrarian disputes, being the administrative agency presumably possessing the necessary expertise on the matter. Further, the proceedings therein are summary in nature and the department is not bound by the technical rules of procedure and evidence, to the end that agrarian reform disputes and other issues will be adjudicated in a just, 19 expeditious and inexpensive proceeding. WHEREFORE, the decision of respondent Court of Appeals as well as its resolution denying reconsideration is REVERSED and SET ASIDE. The orders of the Regional Trial Court of Tagbilaran City dated 22 August and 28 September 1989 are REINSTATED. Consequently, let the records of this case be immediately transmitted to the appropriate Department of Agrarian Reform Adjudication Board (DARAB) for proper adjudication in accordance with the ruling in Vda. de Tangub v. Court of Appeals 20 and reiterated in Quismundo v. Court of 21 Appeals, as well as pertinent agrarian laws. SO ORDERED. Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 77372 April 29, 1988 LUPO L. LUPANGCO, RAYMOND S. MANGKAL, NORMAN A. MESINA, ALEXANDER R. REGUYAL, JOCELYN P. CATAPANG, ENRICO V. REGALADO, JEROME O. ARCEGA, ERNESTOC. BLAS, JR., ELPEDIO M. ALMAZAN, KARL CAESAR R. RIMANDO, petitioner, vs. COURT OF APPEALS and PROFESSIONAL REGULATION COMMISSION, respondent. Balgos & Perez Law Offices for petitioners. The Solicitor General for respondents.

accountancy. The resolution embodied the following pertinent provisions: No examinee shall attend any review class, briefing, conference or the like conducted by, or shall receive any hand-out, review material, or any tip from any school, college or university, or any review center or the like or any reviewer, lecturer, instructor official or employee of any of the aforementioned or similars institutions during the three days immediately proceeding every examination day including examination day. Any examinee violating this instruction shall be subject to the sanctions prescribed by Sec. 8, Art. III of the 1 Rules and Regulations of the Commission. On October 16, 1986, herein petitioners, all reviewees preparing to take the licensure examinations in accountancy schedule on October 25 and November 2 of the same year, filed on their own behalf of all others similarly situated like them, with the Regional Trial Court of Manila, Branch XXXII, a complaint for injuction with a prayer with the issuance of a writ of a preliminary injunction against respondent PRC to restrain the latter from enforcing the above-mentioned resolution and to declare the same unconstitution. Respondent PRC filed a motion to dismiss on October 21, 1987 on the ground that the lower court had no jurisdiction to review and to enjoin the enforcement of its resolution. In an Order of October 21, 1987, the lower court declared that it had jurisdiction to try the case and enjoined the respondent commission from enforcing and giving effect to Resolution No. 105 which it found to be unconstitutional. Not satisfied therewith, respondent PRC, on November 10, 1986, filed with the Court of Appeals a petition for the nullification of the above Order of the lower court. Said petiton was granted in the Decision of the Court of Appeals promulagated on January 13, 1987, to wit: WHEREFORE, finding the petition meritorious the same is hereby GRANTED and the other dated October 21, 1986 issued by respondent court is declared null and void. The respondent court is further directed to dismiss with prejudice Civil Case No. 86-37950 for want of jurisdiction over the subject matter thereof. No cost in this instance. SO ORDERED. Hence, this petition.
2

GANCAYCO, J.: Is the Regional Trial Court of the same category as the Professional Regulation Commission so that it cannot pass upon the validity of the administrative acts of the latter? Can this Commission lawfully prohibit the examiness from attending review classes, receiving handout materials, tips, or the like three (3) days before the date of the examination? Theses are the issues presented to the court by this petition for certiorari to review the decision of the Court of Appeals promulagated on January 13, 1987, in CA-G.R. SP No. 10598, * declaring null and void the other dated Ocober 21, 1986 issued by the Regional Trial Court of Manila, Branch 32 in Civil Case No. 8637950 entitled " Lupo L. Lupangco, et al. vs. Professional Regulation Commission." The records shows the following undisputed facts: On or about October 6, 1986, herein respondent Professional Regulation Commission (PRC) issued Resolution No. 105 as parts of its "Additional Instructions to Examiness," to all those applying for admission to take the licensure examinations in

The Court of Appeals, in deciding that the Regional Trial Court of Manila had no jurisdiction to entertain the case and to enjoin the enforcement of the Resolution No. 105, stated as its basis its conclusion that the Professional Regulation Commission and the Regional Trial Court are co-equal bodies. Thus it held That the petitioner Professional Regulatory Commission is at least a co-equal body with the Regional Trial Court is beyond question, and co-equal bodies have no power to control each other or interfere with each other's 3 acts. To strenghten its position, the Court of Appeals relied heavily 4 on National Electrification Administration vs. Mendoza, which 5 cites Pineda vs. Lantin and Philippine Pacific Fishing, Inc. vs. 6 Luna, where this Court held that a Court of First Instance cannot interfere with the orders of the Securities and Exchange Commission, the two being co-equal bodies. After a close scrutiny of the facts and the record of this case, We rule in favor of the petitioner.

The cases cited by respondent court are not in point. It is glaringly apparent that the reason why this Court ruled that the Court of First Instance could not interfere with the orders of the Securities and Exchange Commission was that this was so provided for by the law. In Pineda vs. Lantin, We explained that whenever a party is aggrieved by or disagree with an order or ruling of the Securities and Exchange Commission, he cannot seek relief from courts of general jurisdiction since under the Rules of Court and Commonwealth Act No. 83, as amended by Republic Act No. 635, creating and setting forth the powers and functions of the old Securities and Exchange Commission, his remedy is to go the Supreme Court on a petition for review. Likewise, in Philippine Pacific Fishing Co., Inc. vs. Luna, it was stressed that if an order of the Securities and Exchange Commission is erroneous, the appropriate remedy take is first, within the Commission itself, then, to the Supreme Court as mandated in Presidential Decree No. 902-A, the law creating the new Securities and Exchange Commission. Nowhere in the said cases was it held that a Court of First Instance has no jurisdiction over all other government agencies. On the contrary, the ruling was specifically limited to the Securities and Exchange Commission. The respondent court erred when it place the Securities and Exchange Commission and the Professional Regulation Commsision in the same category. As alraedy mentioned, with respect to the Securities and Exchange Commission, the laws cited explicitly provide with the procedure that need be taken when one is aggrieved by its order or ruling. Upon the other hand, there is no law providing for the next course of action for a party who wants to question a ruling or order of the Professional Regulation Commission. Unlike Commonwealth Act No. 83 and Presidential Decree No. 902-A, there is no provision in Presidential Decree No. 223, creating the Professional Regulation Commission, that orders or resolutions of the Commission are appealable either to the Court of Appeals or to theSupreme Court. Consequently, Civil Case No. 86-37950, which was filed in order to enjoin the enforcement of a resolution of the respondent Professional Regulation Commission alleged to be unconstitutional, should fall within the general jurisdiction of the Court of First Instance, now the 7 Regional Trial Court. What is clear from Presidential Decree No. 223 is that the Professional Regulation Commission is attached to the Office of 8 the President for general direction and coordination. Well settled in our jurisprudence is the view that even acts of the Office of the President may be reviewed by the Court of First Instance (now the Regional Trial Court). In Medalla vs. 9 Sayo, this rule was thoroughly propounded on, to wit: In so far as jurisdiction of the Court below to review by certiorari decisions and/or resolutions of the Civil Service Commission and of the residential Executive Asssistant is concerned, there should be no question but that the power of judicial review should be upheld. The following rulings buttress this conclusion: The objection to a judicial review of a Presidential act arises from a failure to recognize the most important principle in our system of government, i.e., the separation of powers into three co-equal departments, the executives, the legislative and the judicial, each supreme within its own assigned powers and duties. When a presidential act is challenged before the courts of justice, it is not to be implied therefrom that the Executive is being made subject and subordinate to the courts. The legality of his acts are under judicial review, not because the Executive is inferior to the courts, but because the law is above the Chief Executive himself, and the courts seek only to interpret, apply or implement it (the law). A judicial review of the President's decision on a case of an employee decided by the Civil Service Board of Appeals should be viewed in

this light and the bringing of the case to the Courts should be governed by the same principles as govern the jucucial review of all administrative acts of all administrative 10 officers. Republic vs. Presiding Judge, CFI of Lanao del Norte, Br. 11 II, is another case in point. Here, "the Executive Office"' of the Department of Education and Culture issued Memorandum Order No. 93 under the authority of then Secretary of Education Juan Manuel. As in this case, a complaint for injunction was filed with the Court of First Instance of Lanao del Norte because, allegedly, the enforcement of the circular would impair some contracts already entered into by public school teachers. It was the contention of petitioner therein that "the Court of First Instance is not empowered to amend, reverse and modify what is otherwise the clear and explicit provision of the memorandum circular issued by the Executive Office which has the force and effect of law." In resolving the issue, We held: ... We definitely state that respondent Court lawfully acquired jurisdiction in Civil Case No. II-240 (8) because the plaintiff therein asked the lower court for relief, in the form of injunction, in defense of a legal right (freedom to enter into contracts) . . . . . Hence there is a clear infringement of private respondent's constitutional right to enter into agreements not contrary to law, which might run the risk of being violated by the threatened implementation of Executive Office Memorandum Circular No. 93, dated February 5, 1968, which prohibits, with certain exceptions, cashiers and disbursing officers from honoring special powers of attorney executed by the payee employees. The respondent Court is not only right but duty bound to take cognizance of cases of this nature wherein a constitutional and statutory right is allegedly infringed by the administrative action of a government office. Courts of first Instance have original jurisdiction over all civil actions in which the subject of the litigation is not capable of pecuniary estimation 12 (Sec. 44, Republic Act 296, as amended) . (Emphasis supplied.) In San Miguel Corporation vs. Avelino, We ruled that a judge of the Court of First Instance has the authority to decide on the validity of a city tax ordinance even after its validity had been contested before the Secretary of Justice and an opinion thereon had been rendered. In view of the foregoing, We find no cogent reason why Resolution No. 105, issued by the respondent Professional Regulation Commission, should be exempted from the general jurisdiction of the Regional Trial Court. Respondent PRC, on the other hand, contends that under Section 9, paragraph 3 of B.P. Blg. 129, it is the Court of Appeals which has jurisdiction over the case. The said law provides: SEC. 9. Jurisdiction. The Intermediate Appellate Court shall exercise: xxx xxx xxx (3) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders, or awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commissions, except those falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the provisions of this Act, and of subparagraph (1) of the third paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948. The contention is devoid of merit.
13

In order to invoke the exclusive appellate jurisdiction of the Court of Appeals as provided for in Section 9, paragraph 3 of B.P. Blg. 129, there has to be a final order or ruling which resulted from proceedings wherein the administrative body involved exercised its quasi-judicial functions. In Black's Law Dictionary, quasi-judicial is defined as a term applied to the action, discretion, etc., of public administrative officers or bodies required to investigate facts, or ascertain the existence of facts, hold hearings, and draw conclusions from them, as a basis for their official action, and to exercise discretion of a judicial nature. To expound thereon, quasi-judicial adjudication would mean a determination of rights, privileges and duties resulting in 14 a decision or order which applies to a specific situation . This does not cover rules and regulations of general applicability issued by the administrative body to implement its purely administrative policies and functions like Resolution No. 105 which was adopted by the respondent PRC as a measure to preserve the integrity of licensure examinations. The above rule was adhered to in Filipinas Engineering and 15 Machine Shop vs. Ferrer. In this case, the issue presented was whether or not the Court of First Instance had jurisdiction over a case involving an order of the Commission on Elections awarding a contract to a private party which originated from an invitation to bid. The said issue came about because under the laws then in force, final awards, judgments, decisions or orders of the Commission on Elections fall within the exclusive jurisdiction of the Supreme Court by way of certiorari. Hence, it has been consistently held that "it is the Supreme Court, not the Court of First Instance, which has exclusive jurisdiction to review on certiorari final decisions, orders, or rulings of the Commission on Elections relative to the conduct of elections 16 and the enforcement of election laws." As to whether or not the Court of First Instance had jurisdiction in saidcase, We said: We are however, far from convinced that an order of the COMELEC awarding a contract to a private party, as a result of its choice among various proposals submitted in response to its invitation to bid comes within the purview of a "final order" which is exclusively and directly appealable to this court on certiorari. What is contemplated by the term "final orders, rulings and decisions, of the COMELEC reviewable by certiorari by the Supreme Court as provided by law are those rendered in actions or proceedings before the COMELEC and taken cognizance of by the said body in the exercise of its adjudicatory or quasi-judicial powers. (Emphasis supplied.) xxx xxx xxx We agree with petitioner's contention that the order of the Commission granting the award to a bidder is not an order rendered in a legal controversy before it wherein the parties filed their respective pleadings and presented evidence after which the questioned order was issued; and that this order of the commission was issued pursuant to its authority to enter into contracts in relation to election purposes. In short, the COMELEC resolution awarding the contract in favor of Acme was not issued pursuant to its quasi-judicial functions but merely as an incident of its inherent administrative functions over the conduct of elections, and hence, the said resolution may not be deemed as a "final order reviewable by certiorari by the Supreme Court. Being non-judicial in character, no contempt order may be imposed by the COMELEC from said order, and no direct and exclusive appeal by certiorari to this Tribunal lie from such order. Any question arising from said order may be well taken in an ordinary civil action 17 before the trial courts. (Emphasis supplied.) One other case that should be mentioned in this regard is Salud 18 vs. Central Bank of the Philippines. Here, petitioner Central

Bank, like respondent in this case, argued that under Section 9, paragraph 3 of B.P. Blg. 129, orders of the Monetary Board are appealable only to the Intermediate Appellate Court. Thus: The Central Bank and its Liquidator also postulate, for the very first time, that the Monetary Board is among the "quasi-judicial ... boards" whose judgments are within the exclusive appellate jurisdiction of the IAC; hence, it is only said Court, "to the exclusion of the Regional Trial Courts," that may review the Monetary 19 Board's resolutions. Anent the posture of the Central Bank, We made the following pronouncement: The contention is utterly devoid of merit. The IAC has no appellate jurisdiction over resolution or orders of the Monetary Board. No law prescribes any mode of appeal 20 from the Monetary Board to the IAC. In view of the foregoing, We hold that the Regional Trial Court has jurisdiction to entertain Civil Case No. 86-37950 and enjoin the respondent PRC from enforcing its resolution. Although We have finally settled the issue of jurisdiction, We find it imperative to decide once and for all the validity of Resolution No. 105 so as to provide the much awaited relief to those who are and will be affected by it. Of course, We realize that the questioned resolution was adopted for a commendable purpose which is "to preserve the integrity and purity of the licensure examinations." However, its good aim cannot be a cloak to conceal its constitutional infirmities. On its face, it can be readily seen that it is unreasonable in that an examinee cannot even attend any review class, briefing, conference or the like, or receive any hand-out, review material, or any tip from any school, collge or university, or any review center or the like or any reviewer, lecturer, instructor, official or employee of any of the 21 aforementioned or similar institutions . ... The unreasonableness is more obvious in that one who is caught committing the prohibited acts even without any ill motives will be barred from taking future examinations conducted by the respondent PRC. Furthermore, it is inconceivable how the Commission can manage to have a watchful eye on each and every examinee during the three days before the examination period. It is an aixiom in administrative law that administrative authorities should not act arbitrarily and capriciously in the issuance of rules and regulations. To be valid, such rules and regulations must be reasonable and fairly adapted to the end in view. If shown to bear no reasonable relation to the purposes for which they are authorized to be issued, then they must be 22 held to be invalid. Resolution No. 105 is not only unreasonable and arbitrary, it also infringes on the examinees' right to liberty guaranteed by the Constitution. Respondent PRC has no authority to dictate on the reviewees as to how they should prepare themselves for the licensure examinations. They cannot be restrained from taking all the lawful steps needed to assure the fulfillment of their ambition to become public accountants. They have every right to make use of their faculties in attaining success in their endeavors. They should be allowed to enjoy their freedom to acquire useful knowledge that will promote their personal growth. As defined in a decision of the United States Supreme Court: The term "liberty" means more than mere freedom from physical restraint or the bounds of a prison. It means freedom to go where one may choose and to act in such a manner not inconsistent with the equal rights of others, as his judgment may dictate for the promotion of his happiness, to pursue such callings and vocations as

may be most suitable to develop his capacities, and giv 23 to them their highest enjoyment. Another evident objection to Resolution No. 105 is that it violates the academic freedom of the schools concerned. Respondent PRC cannot interfere with the conduct of review that review schools and centers believe would best enable their enrolees to meet the standards required before becoming a full fledged public accountant. Unless the means or methods of instruction are clearly found to be inefficient, impractical, or riddled with corruption, review schools and centers may not be stopped from helping out their students. At this juncture, We call attention to Our pronouncement in Garcia vs. The Faculty 24 Admission Committee, Loyola School of Theology, regarding academic freedom to wit: ... It would follow then that the school or college itself is possessed of such a right. It decides for itself its aims and objectives and how best to attain them. It is free from outside coercion or interference save possibly when the overriding public welfare calls for some restraint. It has a wide sphere of autonomy certainly extending to the choice of students. This constitutional provision is not to be construed in a niggardly manner or in a grudging fashion. Needless to say, the enforcement of Resolution No. 105 is not a guarantee that the alleged leakages in the licensure examinations will be eradicated or at least minimized. Making the examinees suffer by depriving them of legitimate means of review or preparation on those last three precious days-when they should be refreshing themselves with all that they have learned in the review classes and preparing their mental and psychological make-up for the examination day itself-would be like uprooting the tree to get ride of a rotten branch. What is needed to be done by the respondent is to find out the source of such leakages and stop it right there. If corrupt officials or personnel should be terminated from their loss, then so be it. Fixers or swindlers should be flushed out. Strict guidelines to be observed by examiners should be set up and if violations are committed, then licenses should be suspended or revoked. These are all within the powers of the respondent commission as provided for in Presidential Decree No. 223. But by all means the right and freedom of the examinees to avail of all legitimate means to prepare for the examinations should not be curtailed. In the light of the above, We hereby REVERSE and SET ASIDE, the decision of the Court of Appeals in CA-G.R. SP No. 10591 and another judgment is hereby rendered declaring Resolution No. 105 null and void and of no force and effect for being unconstitutional. This decision is immediately executory. No costs. SO ORDERED. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION

NARVASA, C.J.: The appeal on certiorari at bar treats of the jurisdiction of the Regional Trial Court over the controversy between petitioner and respondent in light of Sections 3 (par. 2 [a]) and 7 of Executive Order No. 172 and "Section 2, Rule VIII of the Rules and Regulations Governing the Establishment, Construction, Operation, Remodelling, and/or Refurbishing of Petroleum Products Retail Outlets," promulgated by the Oil Industry 2 Commission on 1 September 1972 (68 O.G. 7347 ), adopted 3 by the BEU in its Memorandum Circular No. 78-04-06, Series 4 of 1978 . . ." The provision reads as follows: Sec. 2. All disputes between any operator/dealer and an oil company regarding dealership agreement except those arising out of their relationship as debtor and creditor shall be under the jurisdiction of the Oil Industry Commission. A party seeking relief from or enforcement of any provision of a dealer agreement, except those as hereinabove provided, may do so by filing with the Commission a petition defined in the Rules of Practice and Procedure governing hearings before the Commission. The hearing shall be conducted as provided in said Rules. The "operator/dealer" involved is the petitioner, Nonito J. Bernardo, and the "oil company," the respondent Caltex (Philippines), Inc. (hereafter referred to simply as Caltex). Bernardo Operates two (2) Caltex gasoline stations. On December 3, 1990, Bernardo placed with the Caltex Pandacan Terminal an order for 10,000 liters of diesel fuel. He made full payment therefor in the sum of P57,937.50 on the same day, the payment being evidenced by an official receipt. 5 On December 4, 1990, he placed with the same terminal another order, this time for 10,000 liters of premium gasoline for which he also made full payment in the amount of P84,193.50 on December 5, 1990, the payment being 6 evidenced by an official receipt issued on said day. Bernardo sent his tanker to the Pandacan Terminal as early as 11:20 o'clock in the morning of December 5, 1990, to take 7 delivery of the petroleum products thus purchased. But despite waiting until 6 P.M. on that day, the tanker's driver failed to take delivery, because Caltex's computer system had allegedly malfunctioned and broken down as early as 3:45 A.M. and remained out of order up to 12:10 P.M. on that day, December 8 5. It appears that on that same day, December 5, 1990, the Energy Regulatory Board announced an increase in the prices of petroleum products effective at 6 o'clock in the evening of that day. According to Caltex, "(a)t exactly 6:00 in the evening of December 5, 1990, . . . (it) had to cut-off the delivery or hauling by dealers of products in order to make the necessary adjustments in its computers as a result of the price increase . . . (and after that time) all orders, even for those pre-paid and delivered ex-plant, were invoiced at the new rates . . . in 9 accordance with the Purchase and Sale Agreement . . . ." Demands subsequently made by Bernardo for delivery of the 10 petroleum products paid for by him, were refused by Caltex unless Bernardo paid the difference between the old and new 11 prices. Caltex claimed, in justification of its refusal, that when Bernardo demanded "delivery of his orders, the prices had already increased due to the ERB order on December 5, 1990," and Bernardo was bound to pay the increased price in accordance with Section 3 of his "Purchase and Sale Agreement" with Caltex providing as follows: 3) PRICES: Prices to be paid by BUYER ex SELLER's storage point shall be at SELLER's official wholesale selling price ex storage point at Pandacan Terminal in effect on date of delivery.
1

G.R. No. 101345 December 1, 1992 NONITO J. BERNARDO, petitioner, vs. CALTEX (PHILIPPINES), INC., respondent. Edito A. Rodriguez for petitioner. Siguion Reyna, Montecillo and Ongsiako for private respondent.

On January 8, 1991, Bernardo filed a complaint in the Regional Trial Court at Quezon City praying that Caltex be ordered to deliver the petroleum products in question and to pay compensatory, exemplary and nominal damages, loss of earnings and profits expected "from the sale of the undelivered 12 petroleum products," and attorney's fees. Caltex moved to dismiss under date of January 23, 1991, the ground that (a) venue was improperly laid it being provided in the parties' Purchase and Sale Agreement that in case "of any judicial proceedings to enforce any or all of the terms or conditions of . . . (said) Agreement, BUYER shall submit itself to the jurisdiction of the Court of the City of Manila or to SELLER's 14 places of transactions at SELLER'S option;" and (b) the plaintiff had no cause of action against it Caltex having "cutoff the delivery or hauling by dealers of products in order to make the necessary adjustment in its computers as a result of the price increase" (set by ERB on December 5, 1990), and accordingly invoiced "all orders, even for those pre-paid and delivered ex-plant, . . . at the new rates," as was allegedly its right under Paragraph (3) of the Purchase and Sale Agreement, supra, reiterated in a Circular dated August 1, 1990 sent to all its dealers and customers pertinently reading as follows: 1. All orders that have (been) invoiced and paid for before the effectively of a wholesale Selling Price increase but are not yet delivered to or picked-up by the customers as of the effectivity of the price increase shall be cancelled and a new invoice shall be prepared using the new price/s. By Order dated January 30, 1991, the Trial Court denied Caltex's motion to dismiss and issued a preliminary mandatory injunction requiring immediate delivery by Caltex of the petroleum products in question upon Bernardo's posting of a 15 bond in the sum of P50,000.00. To invalidate that order, Caltex forthwith instituted in this Court a special civil action of certiorari; but by this Court's Resolution of February 6, 1991, the case was referred to the Court of Appeals where it was docketed as CA-G.R. SP No. 24091. The action resulted in a judgment rendered by said Court of Appeals on March 16, 16 1991, disposing as follows: WHEREFORE, the petition is hereby given due course, the order of respondent judge dated January 30, 1991, is hereby set aside insofar as it granted the application for a writ of preliminary injunction. However, the order is upheld insofar as it denied petitioner's motion to dismiss. The temporary restraining order issued by this Court is hereby made permanent. This judgment became final and executory. Caltex thereafter 17 filed its answer to the complaint. The answer re-stated the position it had already expressed at one time or another, and set up a compulsory counterclaim. It also asserted the "special and affirmative defense" that it was the Energy Regulatory Board, not the Trial Court which had jurisdiction of the subject matter of the case since it involved "a dispute between an oil company and its dealer, particularly as to the price by which petroleum products are to be sold." Caltex then moved "to Set its Affirmative Defenses for Preliminary Hearing." Bernardo opposed the motion. He also filed a motion for summary judgment. Both motions were denied by the Trial Court, in an order dated July 1, 1991. Caltex moved for reconsideration. The Court required the parties to submit memoranda. On August 14, 1991, the Trial Court promulgated an Order dismissing Bernardo's suit for lack of jurisdiction. The Court cited the judgment of the Court of Appeals in CA-G.R. SP No. 24091, supra, holding inter alia that "there is still an unsettled dispute as regards the pricing of the . . . (petroleum) products" in question, as well as this Court's own holding in G.R. No. 95203-05 (Maceda v. ERB and companion cases, prom. Dec. 18, 1990) to the effect that it "is not the suitable forum for debate" regarding the wisdom of policy or the
13

logic behind increases in oil prices, in relation to the powers of the Energy Regulatory Board (a) "to fix and regulate the prices 18 of petroleum products," and of (b) supervision and 19 jurisdiction . . . over all persons, corporations, firms or entities engaged in the business of importing, exporting, reexporting, shipping, transporting, processing or refining of indigenous and imported crude oil or other petroleum products, storing, marketing, distributing, or selling, both at wholesale and retail, and other crude or refined petroleum products, and shall regulate and supervise the operations and activities of said persons and entities. . . . Upon these undisputed facts, Bernardo submits for resolution the question, "which body has the original jurisdiction over the instant case, the Energy, Regulatory Board or . . . (the) Court a quo." The situation in this case is similar to that in Mobil Oil Philippines, Inc. v. Court of Appeals, which this Court decided 20 on December 29, 1989. In said case, the facts where as follows: On February 15, 1974 a Friday while there was still this oil crisis, plaintiff (Fernando A. Pedrosa) placed with defendant (Mobil Oil) a pre-paid order for 8,000 liters of premium gasoline and 2,000 liters of regular gasoline paying therefor a PBTC Cashier's Check in the amount of P4,610.00 . . . on the basis of the following computations: 8,000 liters MP at P0.85 P 2,000 liters MR at P0.53 Delivery Freight Cargo 40.00 Total P 4,610.00 The above computation is contained in a product order form, Exh. 3, which was prepared and filled up by defendant's order clerk when plaintiff placed his order on Feb. 15, 1974, as in fact the handwritings thereon are those of the said order clerk. It is stated in Exh. 6 that the order was taken at "2:20" (Exh. 3-A) and "12/15" and the delivery due date is Today. (p. 645) . . . (I)t appears from the record that there was an increase in the price of gasoline on February 18, 1974. Plaintiff was charged the cost of the gasoline under the increased rates, or in the total sum of P7,490.00 including delivery and freight charges. It was defendant's contention that since the gasoline was actually delivered on March 5, 1974, the then prevailing increased rates should be made to apply and not the price prevailing on February 14, 1974 the date when the order was made and paid by plaintiff with a cashier's check. (p. 655) Upon these facts, the Court ruled that since plaintiff Pedrosa's "prepaid order was prepared on the same date by . . . (Mobil Oil's) credit man and after being thus approved by . . . (Mobil Oil's) credit man, . . . (Pedrosa) paid for the price therein indicated by tendering a Prudential Bank Cashier's Check #19972. Because of this, . . . Mobil became duty bound to deliver the gasoline to private respondent on February 15, 1974 and the price paid for by . . . (Pedrosa) was that price then prevailing which was the amount indicated in . . . (Pedrosa's) cashier's check . . . . By actually delivering the gasoline on March 6, 1974, petitioner committed a contractual breach and 21 incurred in delay that should make it liable for damages." The Court further held that the "prepaid order form was a perfected contract of sale the moment it was approved and accepted by Mobil through its proper representative on the same day and paid for by . . . Pedrosa likewise on the same day . . . . On the 3,510.00 1,060.00

part of Pedrosa it can even be said that the contract was consummated as far as he was concerned since he executed 22 his part of the contract by his prepayment of the order." It thus appears to the Court that as in that case, a contract of sale of petroleum products was here perfected between Caltex and its "operator/dealer," Bernardo; that in virtue of the payment admittedly made by Bernardo, Caltex became a "debtor" to him in the sense that it was obligated to make delivery to Bernardo's of the petroleum products ordered by him; and that the only issue is the manner by which Caltex shall perform its commitment in Bernardo's favor, or more precisely, what quantity of petroleum products it is bound to deliver to Bernardo: that corresponding to (or at the rate of) the price at the time of the payment effected by Bernardo or the higher price fixed by the Energy Regulatory Board on December 5, 1990; and that the controversy between them cannot be characterized as a dispute within the original jurisdiction of the Energy Regulatory Board, which as already stated, extends to "(a)ll disputes between any operator/dealer and an oil company regarding dealership agreement except those arising out of their relationship as debtor and creditor . . . ." It is rather one cognizable by the Regional Trial Court, as a dispute indeed "arising out of their relationship as debtor and creditor." As the facts make clearly apparent, there is no "unsettled dispute as regards the pricing of the . . . (petroleum) products," as the Regional Trial Court opines in its challenged Order of August 14, 1991. On the contrary, the parties are in agreement about the prices of the petroleum products in question which became effective on December 5, 1990 at 6 o'clock P.M., and those prevailing prior thereto. Their disagreement is as regards which of the two sets of prices shall apply to the transactions subject of Bernardo's complaint. Neither do the parties impugn the validity or the propriety or wisdom of the specific exercise by the Energy Regulatory Board of its power "to fix and regulate the prices of petroleum products," or its power of supervision over the operations and activities, generally, of persons and entities dealing in oil and petroleum products, as said Regional Trial Court posits in its order of August 14, 1991. What the controversy is all about, to repeat, is simply the prices at which the petroleum products shall be deemed to have been purchased from Caltex by Bernardo in December, 1990. This is obviously a civil law question, one determinable according to the provisions of the Civil Code and hence, beyond the cognizance of the Energy Regulatory Board of the Oil Industry Commission. WHEREFORE, the petition is GRANTED, the Order of the Regional Trial Court rendered on August 14, 1991 in Civil Case No. Q-91-7630 is ANNULLED AND SET ASIDE, and said Court is DIRECTED to forthwith resume the proceedings in the case in accordance with the Rules of Court and to dispose of the case in due course. Costs against respondent. SO ORDERED.

G.R. No. 75919 May 7, 1987 MANCHESTER DEVELOPMENT CORPORATION, ET AL., petitioners, vs. COURT OF APPEALS, CITY LAND DEVELOPMENT CORPORATION, STEPHEN ROXAS, ANDREW LUISON, GRACE LUISON and JOSE DE MAISIP, respondents. Tanjuatco, Oreta and Tanjuatco for petitioners. Pecabar Law Offices for private respondents. RESOLUTION

GANCAYCO, J.: Acting on the motion for reconsideration of the resolution of the Second Division of January 28,1987 and another motion to refer the case to and to be heard in oral argument by the Court En Banc filed by petitioners, the motion to refer the case to the Court en banc is granted but the motion to set the case for oral argument is denied. Petitioners in support of their contention that the filing fee must be assessed on the basis of the amended complaint cite the case of Magaspi vs. Ramolete. 1 They contend that the Court of Appeals erred in that the filing fee should be levied by considering the amount of damages sought in the original complaint. The environmental facts of said case differ from the present in that 1. The Magaspi case was an action for recovery of ownership 2 and possession of a parcel of land with damages. While the present case is an action for torts and damages and specific 3 performance with prayer for temporary restraining order, etc. 2. In the Magaspi case, the prayer in the complaint seeks not only the annulment of title of the defendant to the property, the declaration of ownership and delivery of possession thereof to plaintiffs but also asks for the payment of actual moral, exemplary damages and attorney's fees arising therefrom in the 4 amounts specified therein. However, in the present case, the prayer is for the issuance of a writ of preliminary prohibitory injunction during the pendency of the action against the defendants' announced forfeiture of the sum of P3 Million paid by the plaintiffs for the property in question, to attach such property of defendants that maybe sufficient to satisfy any judgment that maybe rendered, and after hearing, to order defendants to execute a contract of purchase and sale of the subject property and annul defendants' illegal forfeiture of the money of plaintiff, ordering defendants jointly and severally to pay plaintiff actual, compensatory and exemplary damages as well as 25% of said amounts as maybe proved during the trial as attorney's fees and declaring the tender of payment of the purchase price of plaintiff valid and producing the effect of payment and to make the injunction permanent. The amount of damages sought is not specified in the prayer although the body of the complaint alleges the total amount of over P78 5 Million as damages suffered by plaintiff. 3. Upon the filing of the complaint there was an honest difference of opinion as to the nature of the action in the Magaspi case. The complaint was considered as primarily an action for recovery of ownership and possession of a parcel of land. The damages stated were treated as merely to the main cause of action. Thus, the docket fee of only P60.00 and 6 P10.00 for the sheriff's fee were paid. In the present case there can be no such honest difference of opinion. As maybe gleaned from the allegations of the

MTC
Republic of the Philippines SUPREME COURT Manila EN BANC

complaint as well as the designation thereof, it is both an action for damages and specific performance. The docket fee paid upon filing of complaint in the amount only of P410.00 by considering the action to be merely one for specific performance where the amount involved is not capable of pecuniary estimation is obviously erroneous. Although the total amount of damages sought is not stated in the prayer of the complaint yet it is spelled out in the body of the complaint totalling in the amount of P78,750,000.00 which should be the basis of assessment of the filing fee. 4. When this under-re assessment of the filing fee in this case was brought to the attention of this Court together with similar other cases an investigation was immediately ordered by the Court. Meanwhile plaintiff through another counsel with leave of court filed an amended complaint on September 12, 1985 for the inclusion of Philips Wire and Cable Corporation as coplaintiff and by emanating any mention of the amount of damages in the body of the complaint. The prayer in the original complaint was maintained. After this Court issued an order on October 15, 1985 ordering the re- assessment of the docket fee in the present case and other cases that were investigated, on November 12, 1985 the trial court directed plaintiffs to rectify the amended complaint by stating the amounts which they are asking for. It was only then that plaintiffs specified the amount of damages in the body of the complaint in the reduced amount of 7 P10,000,000.00. Still no amount of damages were specified in the prayer. Said amended complaint was admitted. On the other hand, in the Magaspi case, the trial court ordered the plaintiffs to pay the amount of P3,104.00 as filing fee covering the damages alleged in the original complaint as it did not consider the damages to be merely an or incidental to the action for recovery of ownership and possession of real 8 property. An amended complaint was filed by plaintiff with leave of court to include the government of the Republic as defendant and reducing the amount of damages, and attorney's fees prayed for to P100,000.00. Said amended complaint was 9 also admitted. In the Magaspi case, the action was considered not only one for recovery of ownership but also for damages, so that the filing fee for the damages should be the basis of assessment. Although the payment of the docketing fee of P60.00 was found to be insufficient, nevertheless, it was held that since the payment was the result of an "honest difference of opinion as to the correct amount to be paid as docket fee" the court "had acquired jurisdiction over the case and the proceedings thereafter had were proper and regular." 10 Hence, as the amended complaint superseded the original complaint, the allegations of damages in the amended complaint should be the basis of the computation of the filing fee. 11 In the present case no such honest difference of opinion was possible as the allegations of the complaint, the designation and the prayer show clearly that it is an action for damages and specific performance. The docketing fee should be assessed by considering the amount of damages as alleged in the original complaint. As reiterated in the Magaspi case the rule is well-settled "that a case is deemed filed only upon payment of the docket fee regardless of the actual date of filing in court . 12 Thus, in the present case the trial court did not acquire jurisdiction over the case by the payment of only P410.00 as docket fee. Neither can the amendment of the complaint thereby vest jurisdiction upon the Court. 13 For an legal purposes there is no such original complaint that was duly filed which could be amended. Consequently, the order admitting the amended complaint and all subsequent proceedings and actions taken by the trial court are null and void. The Court of Appeals therefore, aptly ruled in the present case that the basis of assessment of the docket fee should be the amount of damages sought in the original complaint and not in the amended complaint.

The Court cannot close this case without making the observation that it frowns at the practice of counsel who filed the original complaint in this case of omitting any specification of the amount of damages in the prayer although the amount of over P78 million is alleged in the body of the complaint. This is clearly intended for no other purpose than to evade the payment of the correct filing fees if not to mislead the docket clerk in the assessment of the filing fee. This fraudulent practice was compounded when, even as this Court had taken cognizance of the anomaly and ordered an investigation, petitioner through another counsel filed an amended complaint, deleting all mention of the amount of damages being asked for in the body of the complaint. It was only when in obedience to the order of this Court of October 18, 1985, the trial court directed that the amount of damages be specified in the amended complaint, that petitioners' counsel wrote the damages sought in the much reduced amount of P10,000,000.00 in the body of the complaint but not in the prayer thereof. The design to avoid payment of the required docket fee is obvious. The Court serves warning that it will take drastic action upon a repetition of this unethical practice. To put a stop to this irregularity, henceforth all complaints, petitions, answers and other similar pleadings should specify the amount of damages being prayed for not only in the body of the pleading but also in the prayer, and said damages shall be considered in the assessment of the filing fees in any case. Any pleading that fails to comply with this requirement shall not bib accepted nor admitted, or shall otherwise be expunged from the record. The Court acquires jurisdiction over any case only upon the payment of the prescribed docket fee. An amendment of the complaint or similar pleading will not thereby vest jurisdiction in the Court, much less the payment of the docket fee based on the amounts sought in the amended pleading. The ruling in the Magaspi case 14 in so far as it is inconsistent with this pronouncement is overturned and reversed. WHEREFORE, the motion for reconsideration is denied for lack of merit. SO ORDERED. Republic of the Philippines SUPREME COURT Manila EN BANC G.R. Nos. 79937-38 February 13, 1989 SUN INSURANCE OFFICE, LTD., (SIOL), E.B. PHILIPPS and D.J. WARBY, petitioners, vs. HON. MAXIMIANO C. ASUNCION, Presiding Judge, Branch 104, Regional Trial Court, Quezon City and MANUEL CHUA UY PO TIONG, respondents. Romulo, Mabanta, Buenaventura, Sayoc & De los Angeles Law Offices for petitioners. Tanjuatco, Oreta, Tanjuatco, Berenguer & Sanvicente Law Offices for private respondent.

GANCAYCO, J.: Again the Court is asked to resolve the issue of whether or not a court acquires jurisdiction over a case when the correct and proper docket fee has not been paid. On February 28, 1984, petitioner Sun Insurance Office, Ltd. (SIOL for brevity) filed a complaint with the Regional Trial Court

of Makati, Metro Manila for the consignation of a premium refund on a fire insurance policy with a prayer for the judicial declaration of its nullity against private respondent Manuel Uy Po Tiong. Private respondent as declared in default for failure to file the required answer within the reglementary period. On the other hand, on March 28, 1984, private respondent filed a complaint in the Regional Trial Court of Quezon City for the refund of premiums and the issuance of a writ of preliminary attachment which was docketed as Civil Case No. Q-41177, initially against petitioner SIOL, and thereafter including E.B. Philipps and D.J. Warby as additional defendants. The complaint sought, among others, the payment of actual, compensatory, moral, exemplary and liquidated damages, attorney's fees, expenses of litigation and costs of the suit. Although the prayer in the complaint did not quantify the amount of damages sought said amount may be inferred from the body of the complaint to be about Fifty Million Pesos (P50,000,000.00). Only the amount of P210.00 was paid by private respondent as docket fee which prompted petitioners' counsel to raise his objection. Said objection was disregarded by respondent Judge Jose P. Castro who was then presiding over said case. Upon the order of this Court, the records of said case together with twenty-two other cases assigned to different branches of the Regional Trial Court of Quezon City which were under investigation for under-assessment of docket fees were transmitted to this Court. The Court thereafter returned the said records to the trial court with the directive that they be re-raffled to the other judges in Quezon City, to the exclusion of Judge Castro. Civil Case No. Q-41177 was re-raffled to Branch 104, a sala which was then vacant. On October 15, 1985, the Court en banc issued a Resolution in Administrative Case No. 85-10-8752-RTC directing the judges in said cases to reassess the docket fees and that in case of deficiency, to order its payment. The Resolution also requires all clerks of court to issue certificates of re-assessment of docket fees. All litigants were likewise required to specify in their pleadings the amount sought to be recovered in their complaints. On December 16, 1985, Judge Antonio P. Solano, to whose sala Civil Case No. Q-41177 was temporarily assigned, issuedan order to the Clerk of Court instructing him to issue a certificate of assessment of the docket fee paid by private respondent and, in case of deficiency, to include the same in said certificate. On January 7, 1984, to forestall a default, a cautionary answer was filed by petitioners. On August 30,1984, an amended complaint was filed by private respondent including the two additional defendants aforestated. Judge Maximiano C. Asuncion, to whom Civil Case No. Q41177 was thereafter assigned, after his assumption into office on January 16, 1986, issued a Supplemental Order requiring the parties in the case to comment on the Clerk of Court's letterreport signifying her difficulty in complying with the Resolution of this Court of October 15, 1985 since the pleadings filed by private respondent did not indicate the exact amount sought to be recovered. On January 23, 1986, private respondent filed a "Compliance" and a "Re-Amended Complaint" stating therein a claim of "not less than Pl0,000,000. 00 as actual compensatory damages" in the prayer. In the body of the said second amended complaint however, private respondent alleges actual and compensatory damages and attorney's fees in the total amount of about P44,601,623.70. On January 24, 1986, Judge Asuncion issued another Order admitting the second amended complaint and stating therein that the same constituted proper compliance with the Resolution of this Court and that a copy thereof should be furnished the Clerk of Court for the reassessment of the docket fees. The reassessment by the Clerk of Court based on private

respondent's claim of "not less than P10,000,000.00 as actual and compensatory damages" amounted to P39,786.00 as docket fee. This was subsequently paid by private respondent. Petitioners then filed a petition for certiorari with the Court of Appeals questioning the said order of Judie Asuncion dated January 24, 1986. On April 24, 1986, private respondent filed a supplemental complaint alleging an additional claim of P20,000,000.00 as d.qmages so the total claim amounts to about P64,601,623.70. On October 16, 1986, or some seven months after filing the supplemental complaint, the private respondent paid the 1 additional docket fee of P80,396.00. On August 13, 1987, the Court of Appeals rendered a decision ruling, among others, as follows: WHEREFORE, judgment is hereby rendered: 1. Denying due course to the petition in CAG.R. SP No. 1, 09715 insofar as it seeks annulment of the order (a) denying petitioners' motion to dismiss the complaint, as amended, and (b) granting the writ of preliminary attachment, but giving due course to the portion thereof questioning the reassessment of the docketing fee, and requiring the Honorable respondent Court to reassess the docketing fee to be paid by private respondent on the basis of the 2 amount of P25,401,707.00. Hence, the instant petition. During the pendency of this petition and in conformity with the said judgment of respondent court, private respondent paid the 3 additional docket fee of P62,432.90 on April 28, 1988. The main thrust of the petition is that the Court of Appeals erred in not finding that the lower court did not acquire jurisdiction over Civil Case No. Q-41177 on the ground of nonpayment of the correct and proper docket fee. Petitioners allege that while it may be true that private respondent had paid the amount of P182,824.90 as docket fee as herein-above related, and considering that the total amount sought to be recovered in the amended and supplemental complaint is P64,601,623.70 the docket fee that should be paid by private respondent is P257,810.49, more or less. Not having paid the same, petitioners contend that the complaint should be dismissed and all incidents arising therefrom should be annulled. In support of their theory, petitioners cite the latest ruling of the Court 4 in Manchester Development Corporation vs. CA, as follows: The Court acquires jurisdiction over any case only upon the payment of the prescribed docket fee. An amendment of the complaint or similar pleading will not thereby vest jurisdiction in the Court, much less the payment of the docket fee based on the amounts sought in the amended pleading. The ruling in the Magaspi Case in so far as it is inconsistent with this pronouncement is overturned and reversed. On the other hand, private respondent claims that the ruling in Manchester cannot apply retroactively to Civil Case No. Q41177 for at the time said civil case was filed in court there was no such Manchester ruling as yet. Further, private respondent avers that what is applicable is the ruling of 5 this Court in Magaspi v. Ramolete, wherein this Court held that the trial court acquired jurisdiction over the case even if the docket fee paid was insufficient.

The contention that Manchester cannot apply retroactively to this case is untenable. Statutes regulating the procedure of the courts will be construed as applicable to actions pending and undetermined at the time of their passage. Procedural laws are 6 retrospective in that sense and to that extent. In Lazaro vs. Endencia and Andres, this Court held that the payment of the full amount of the docket fee is an indispensable step for the perfection of an appeal. In a forcible entry and detainer case before the justice of the peace court of Manaoag, Pangasinan, after notice of a judgment dismissing the case, the plaintiff filed a notice of appeal with said court but he deposited only P8.00 for the docket fee, instead of P16.00 as required, within the reglementary period of appeal of five (5) days after receiving notice of judgment. Plaintiff deposited the additional P8.00 to complete the amount of the docket fee only fourteen (14) days later. On the basis of these facts, this court held that the Court of First Instance did notacquire jurisdiction to hear and determine the appeal as the appeal was not thereby perfected. In Lee vs. Republic, the petitioner filed a verified declaration of intention to become a Filipino citizen by sending it through registered mail to the Office of the Solicitor General in 1953 but the required filing fee was paid only in 1956, barely 5V2 months prior to the filing of the petition for citizenship. This Court ruled that the declaration was not filed in accordance with the legal requirement that such declaration should be filed at least one year before the filing of the petition for citizenship. Citing Lazaro, this Court concluded that the filing of petitioner's declaration of intention on October 23, 1953 produced no legal effect until the required filing fee was paid on May 23, 1956. In Malimit vs. Degamo, the same principles enunciated in Lazaro and Lee were applied. It was an original petition for quo warranto contesting the right to office of proclaimed candidates which was mailed, addressed to the clerk of the Court of First Instance, within the one-week period after the proclamation as 10 provided therefor by law. However, the required docket fees were paid only after the expiration of said period. Consequently, this Court held that the date of such payment must be deemed to be the real date of filing of aforesaid petition and not the date when it was mailed. Again, in Garica vs, Vasquez, this Court reiterated the rule that the docket fee must be paid before a court will act on a petition or complaint. However, we also held that said rule is not applicable when petitioner seeks the probate of several wills of the same decedent as he is not required to file a separate action for each will but instead he may have other wills probated in the same special proceeding then pending before the same court. Then in Magaspi, this Court reiterated the ruling in Malimit and Lee that a case is deemed filed only upon payment of the docket fee regardless of the actual date of its filing in court. Said case involved a complaint for recovery of ownership and possession of a parcel of land with damages filed in the Court of First Instance of Cebu. Upon the payment of P60.00 for the docket fee and P10.00 for the sheriffs fee, the complaint was docketed as Civil Case No. R-11882. The prayer of the complaint sought that the Transfer Certificate of Title issued in the name of the defendant be declared as null and void. It was also prayed that plaintiff be declared as owner thereof to whom the proper title should be issued, and that defendant be made to pay monthly rentals of P3,500.00 from June 2, 1948 up to the time the property is delivered to plaintiff, P500,000.00 as moral damages, attorney's fees in the amount of P250,000.00, the costs of the action and exemplary damages in the amount of P500,000.00. The defendant then filed a motion to compel the plaintiff to pay the correct amount of the docket fee to which an opposition was filed by the plaintiff alleging that the action was for the recovery of a parcel of land so the docket fee must be based on its assessed value and that the amount of P60.00 was the correct
12 11 9 8 7

docketing fee. The trial court ordered the plaintiff to pay P3,104.00 as filing fee. The plaintiff then filed a motion to admit the amended complaint to include the Republic as the defendant. In the prayer of the amended complaint the exemplary damages earlier sought was eliminated. The amended prayer merely sought moral damages as the court may determine, attorney's fees of P100,000.00 and the costs of the action. The defendant filed an opposition to the amended complaint. The opposition notwithstanding, the amended complaint was admitted by the trial court. The trial court reiterated its order for the payment of the additional docket fee which plaintiff assailed and then challenged before this Court. Plaintiff alleged that he paid the total docket fee in the amount of P60.00 and that if he has to pay the additional fee it must be based on the amended complaint. The question posed, therefore, was whether or not the plaintiff may be considered to have filed the case even if the docketing fee paid was not sufficient. In Magaspi, We reiterated the rule that the case was deemed filed only upon the payment of the correct amount for the docket fee regardless of the actual date of the filing of the complaint; that there was an honest difference of opinion as to the correct amount to be paid as docket fee in that as the action appears to be one for the recovery of property the docket fee of P60.00 was correct; and that as the action is also one, for damages, We upheld the assessment of the additional docket fee based on the damages alleged in the amended complaint as against the assessment of the trial court which was based on the damages alleged in the original complaint. However, as aforecited, this Court overturned Magaspi in Manchester. Manchester involves an action for torts and damages and specific performance with a prayer for the issuance of a temporary restraining order, etc. The prayer in said case is for the issuance of a writ of preliminary prohibitory injunction during the pendency of the action against the defendants' announced forfeiture of the sum of P3 Million paid by the plaintiffs for the property in question, the attachment of such property of defendants that may be sufficient to satisfy any judgment that may be rendered, and, after hearing, the issuance of an order requiring defendants to execute a contract of purchase and sale of the subject property and annul defendants' illegal forfeiture of the money of plaintiff. It was also prayed that the defendants be made to pay the plaintiff jointly and severally, actual, compensatory and exemplary damages as well as 25% of said amounts as may be proved during the trial for attorney's fees. The plaintiff also asked the trial court to declare the tender of payment of the purchase price of plaintiff valid and sufficient for purposes of payment, and to make the injunction permanent. The amount of damages sought is not specified in the prayer although the body of the complaint alleges the total amount of over P78 Millon allegedly suffered by plaintiff. Upon the filing of the complaint, the plaintiff paid the amount of only P410.00 for the docket fee based on the nature of the action for specific performance where the amount involved is not capable of pecuniary estimation. However, it was obvious from the allegations of the complaint as well as its designation that the action was one for damages and specific performance. Thus, this court held the plaintiff must be assessed the correct docket fee computed against the amount of damages of about P78 Million, although the same was not spelled out in the prayer of the complaint. Meanwhile, plaintiff through another counsel, with leave of court, filed an amended complaint on September 12, 1985 by the inclusion of another co-plaintiff and eliminating any mention of the amount of damages in the body of the complaint. The prayer in the original complaint was maintained. On October 15, 1985, this Court ordered the re-assessment of the docket fee in the said case and other cases that were investigated. On November 12, 1985, the trial court directed the

plaintiff to rectify the amended complaint by stating the amounts which they were asking for. This plaintiff did as instructed. In the body of the complaint the amount of damages alleged was reduced to P10,000,000.00 but still no amount of damages was specified in the prayer. Said amended complaint was admitted. Applying the principle in Magaspi that "the case is deemed filed only upon payment of the docket fee regardless of the actual date of filing in court," this Court held that the trial court did not acquire jurisdiction over the case by payment of only P410.00 for the docket fee. Neither can the amendment of the complaint thereby vest jurisdiction upon the Court. For all legal purposes there was no such original complaint duly filed which could be amended. Consequently, the order admitting the amended complaint and all subsequent proceedings and actions taken by 13 the trial court were declared null and void. The present case, as above discussed, is among the several cases of under-assessment of docket fee which were investigated by this Court together with Manchester. The facts and circumstances of this case are similar to Manchester. In the body of the original complaint, the total amount of damages sought amounted to about P50 Million. In the prayer, the amount of damages asked for was not stated. The action was for the refund of the premium and the issuance of the writ of preliminary attachment with damages. The amount of only P210.00 was paid for the docket fee. On January 23, 1986, private respondent filed an amended complaint wherein in the prayer it is asked that he be awarded no less than P10,000,000.00 as actual and exemplary damages but in the body of the complaint the amount of his pecuniary claim is approximately P44,601,623.70. Said amended complaint was admitted and the private respondent was reassessed the additional docket fee of P39,786.00 based on his prayer of not less than P10,000,000.00 in damages, which he paid. On April 24, 1986, private respondent filed a supplemental complaint alleging an additional claim of P20,000,000.00 in damages so that his total claim is approximately P64,601,620.70. On October 16, 1986, private respondent paid an additional docket fee of P80,396.00. After the promulgation of the decision of the respondent court on August 31, 1987 wherein private respondent was ordered to be reassessed for additional docket fee, and during the pendency of this petition, and after the promulgation of Manchester, on April 28, 1988, private respondent paid an additional docket fee of P62,132.92. Although private respondent appears to have paid a total amount of P182,824.90 for the docket fee considering the total amount of his claim in the amended and supplemental complaint amounting to about P64,601,620.70, petitioner insists that private respondent must pay a docket fee of P257,810.49. The principle in Manchester could very well be applied in the present case. The pattern and the intent to defraud the government of the docket fee due it is obvious not only in the filing of the original complaint but also in the filing of the second amended complaint. However, in Manchester, petitioner did not pay any additional docket fee until] the case was decided by this Court on May 7, 1987. Thus, in Manchester, due to the fraud committed on the government, this Court held that the court a quo did not acquire jurisdiction over the case and that the amended complaint could not have been admitted inasmuch as the original complaint was null and void. In the present case, a more liberal interpretation of the rules is called for considering that, unlike Manchester, private respondent demonstrated his willingness to abide by the rules by paying the additional docket fees as required. The promulgation of the decision in Manchester must have had that sobering influence on private respondent who thus paid the additional docket fee as ordered by the respondent court. It triggered his change of stance by manifesting his willingness to pay such additional docket fee as may be ordered.

Nevertheless, petitioners contend that the docket fee that was paid is still insufficient considering the total amount of the claim. This is a matter which the clerk of court of the lower court and/or his duly authorized docket clerk or clerk in-charge should determine and, thereafter, if any amount is found due, he must require the private respondent to pay the same. Thus, the Court rules as follows: 1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the prescribed docket fee, that vests a trial court with jurisdiction over the subject matter or nature of the action. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or reglementary period. 2. The same rule applies to permissive counterclaims, third party claims and similar pleadings, which shall not be considered filed until and unless the filing fee prescribed therefor is paid. The court may also allow payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or reglementary period. 3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the pleading, or if specified the same has been left for determination by the court, the additional filing fee therefor shall constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court or his duly authorized deputy to enforce said lien and assess and collect the additional fee. WHEREFORE, the petition is DISMISSED for lack of merit. The Clerk of Court of the court a quo is hereby instructed to reassess and determine the additional filing fee that should be paid by private respondent considering the total amount of the claim sought in the original complaint and the supplemental complaint as may be gleaned from the allegations and the prayer thereof and to require private respondent to pay the deficiency, if any, without pronouncement as to costs. SO ORDERED. Republic of the Philippines SUPREME COURT Manila EN BANC G.R. Nos. 88075-77 December 20, 1989 MAXIMO TACAY, PONCIANO PANES and ANTONIA NOEL, petitioners, vs. REGIONAL TRIAL COURT OF TAGUM Davao del Norte, Branches 1 and 2, Presided by Hon. Marcial Fernandez and Hon. Jesus Matas, respectively, PATSITA GAMUTAN, Clerk of Court, and GODOFREDO PINEDA, respondents. Eduardo C. De Vera for petitioners. RESOLUTION

NARVASA, J.: In the Regional Trial Court at Tagum, Davao del Norte, three (3) actions for recovery of possession (acciones publicianas ) were separately instituted by Godofredo Pineda against three (3) defendants, docketed as follows:
2 1

1) vs. Antonia Noel Civil Case No. 2209 2) vs. Ponciano Panes Civil Case No. 2210 3) vs. Maximo Tacay Civil Case No. 2211. Civil Cases Numbered 2209 and 2211 were raffled to Branch I of the Trial Court, presided over by Judge Marcial Hernandez. Civil No. 2210 was assigned to Branch 2, presided over by Judge Jesus Matas. The complaints all alleged the same essential facts (1) Pineda was the owner of a parcel of land measuring 790 square meters, his ownership being evidenced by TCT No. T-46560; (2) the previous owner had allowed the defendants to occupy portions of the land by mere tolerance; (3) having himself need to use the property, Pineda had made demands on the defendants to vacate the property and pay reasonable rentals therefor, but these demands had been refused; and (4) the last demand had been made more than a year prior to the commencement of suit. The complaints prayed for the same reliefs, to wit: 1) that plaintiff be declared owner of the areas occupied by the defendants; 2) that defendants and their "privies and allies" be ordered to vacate and deliver the portions of the land usurped by them; 3) that each defendant be ordered to pay: 1 ) P 2,000 as monthly rents from February, 1987; 2 ) Actual damages, as proven; 3 ) Moral and nominal damages as the Honorable Court may fix ; 4) P30,000.00, "as attorney's fees, and representation fees of P5,000.00 per day of 4 appearance;" and 4) that he (Pineda) be granted such "further relief and remedies ... just and equitable in the premises. The prayer of each complaint contained a handwritten notation (evidently made by plaintiff's counsel) reading, "P5,000.00 as and for," immediately above the typewritten words, "Actual damages, as proven," the intention apparently being to make the entire phrase read, " P5,000.00 as and for actual damages 5 as proven. Motions to dismiss were filed in behalf of each of the 6 defendants by common counsel . Every motion alleged that the Trial Court had not acquired jurisdiction of the case . . . for the reason that the ... complaint violates the mandatory and clear provision of Circular No. 7 of the ... Supreme Court dated March 24,1988, by failing to specify all the amounts of damages which plaintiff is claiming from defendant;" and . . . for ... failure (of the complaint) to even allege the basic requirement as to the assessed value of the subject lot in dispute. Judge Matas denied the motion to dismiss filed in Civil Case No. 2210 but ordered the expunction of the "allegations in
3

paragraph 11 of the ... complaint regarding moral as well as 7 nominal damages . On motion of defendant Panes, Judge Matas later ordered the striking out, too, of the "handwritten amount of 'P5,000. 00 as and for.' including the typewritten words 'actual damages as proven' ... in sub-paragraph b of 8 paragraph 4 in the conclusion and prayer of the complaint ..." The motions to dismiss submitted in Civil Cases Numbered 2211 and 2209 were also denied in separate orders 9 promulgated by Judge Marcial Fernandez. His Order in Case No. 2209 dated March 15, 1989 (a) declared that since the "action at bar is for Reivindicatoria, Damages and Attorney's fees ... (d)efinitely this Court has the exclusive jurisdiction," (b) that the claims for actual, moral and nominal damages "are only one aspect of the cause of action," and (c) because of absence of specification of the amounts claimed as moral, nominal and actual damages, they should be "expunged from the records." Ascribing grave abuse of discretion to both Judges Matas and Fernandez in the rendition of the Orders above described, the defendants in all three (3) actions have filed with this Court a "Joint Petition" for certiorari, prohibition and mandamus, with prayer for temporary restraining order and/or writ of preliminary prohibitory injunction," praying essentially that said orders be annulled and respondent judges directed to dismiss all the complaints "without prejudice to private respondent Pineda's refiling a similar complaint that complies with Circular No. 7." The joint petition (a) re-asserted the proposition that because the complaints had failed to state the amounts being claimed as actual, moral and nominal damages, the Trial Courts a quo had not acquired jurisdiction over the three (3) actions in questionindeed, the respondent Clerk of Court should not have accepted the complaints which initiated said suits, and (b) it was not proper merely to expunge the claims for damages and allow "the so-called cause of action for "reivindicatoria" remain for 10 trial" by itself. The joint petition should be, as it is hereby, dismissed. It should be dismissed for failure to comply with this Court's Circular No. 1-88 (effective January 1, 1989). The copies of the 11 challenged Orders thereto attached were not certified by the proper Clerk of Court or his duly authorized representative. Certification was made by the petitioners' counsel, which is not allowed. The petition should be dismissed, too, for another equally important reason. It fails to demonstrate any grave abuse of discretion on the part of the respondent Judges in rendering the Orders complained of or, for that matter, the existence of any proper cause for the issuance of the writ of mandamus. On the contrary, the orders appear to have correctly applied the law to the admitted facts. It is true that the complaints do not state the amounts being claimed as actual, moral and nominal damages. It is also true, however, that the actions are not basically for the recovery of sums of money. They are principally for recovery of possession of real property, in the nature of an accion publiciana. Determinative of the court's jurisdiction in this type of actions is the nature thereof, not the amount of the damages allegedly arising from or connected with the issue of title or possession, and regardless of the value of the property. Quite obviously, an action for recovery of possession of real property (such as an 12 accion plenaria de possesion) or the title thereof, or for partition or condemnation of, or the foreclosure of a mortgage 13 on, said real property - in other words, a real action-may be commenced and prosecuted without an accompanying claim for actual, moral, nominal or exemplary damages; and such an action would fall within the exclusive, original jurisdiction of the Regional Trial Court. Batas Pambansa Bilang 129 provides that Regional Trial Courts shall exercise exclusive original jurisdiction inter alia over "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, Municipal Trial Courts, and Municipal Circuit Trial 14 Courts." The rule applies regardless of the value of the real property involved, whether it be worth more than P20,000.00 or not, infra. The rule also applies even where the complaint involving realty also prays for an award of damages; the amount of those damages would be immaterial to the question of the Court's jurisdiction. The rule is unlike that in other cases e.g., actions simply for recovery of money or of personal 15 16 property, or actions in admiralty and maritime jurisdiction in 17 which the amount claimed, or the value of the personal property, is determinative of jurisdiction; i.e., the value of the personal property or the amount claimed should exceed twenty thousand pesos (P20,000.00) in order to be cognizable by the Regional Trial Court. Circular No. 7 of this Court, dated March 24, 1988, cannot thus be invoked, as the petitioner does, as authority for the dismissal of the actions at bar. That circular, avowedly inspired by the doctrine laid down in Manchester Development Corporation v. Court of appeals, 149 SCRA 562 (May 7, 1987), has but limited application to said actions, as shall presently be discussed. Moreover, the rules therein laid down have since been clarified and amplified by the Court's subsequent decision in Sun Insurance Office, Ltd. (SIOL) v. Asuncion, et al. , G.R. Nos. 79937-38, February 13, 1989. Circular No. 7 was aimed at the practice of certain parties who omit from the prayer of their complaints "any specification of the amount of damages," the omission being "clearly intended for no other purposes than to evade the payment of the correct filing fees if not to mislead the docket clerk, in the assessment of the filing fee." The following rules were therefore set down: 1. All complaints, petitions, answers, and similar pleadings should specify the amount of damages being prayed for not only in the body of the pleading but also in the prayer, and said damages shall be considered in the assessment of the filing fees in any case. 2. Any pleading that fails to comply with this requirement shall not be accepted nor admitted, or shall otherwise be expunged from the record. 3. The Court acquires jurisdiction over any case only upon the payment of the prescribed docket fee. An amendment of the complaint or similar pleading will not thereby vest jurisdiction in the Court, much less the payment of the docket fee based on the amount sought in the amended pleading. The clarificatory and additional rules laid down in Sun Insurance Office, Ltd. v. Asuncion, supra, read as follows: 1. It is not simply the filing of the complaint or appropriate initiatory pleading, but (also) the payment of the prescribed docket fee that vests a trial court with jurisdiction over the subject-matter or nature of the action. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or reglementary period. 2. The same rule applies to permissive counterclaims, thirdparty claims and similar pleadings, which shall not be considered filed until and unless the filing fee prescribed therefor is paid. The court may also allow payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or reglementary period. 3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the pleading, or if specified, the same has been left for determination by the court, the additional filing fee therefor shall constitute a lien on the judgment. It shall be the

responsibility of the Clerk of Court or his duly authorized deputy to enforce said lien and assess and collect the additional fee. As will be noted, the requirement in Circular No. 7 that complaints, petitions, answers, and similar pleadings should specify the amount of damages being prayed for not only in the body of the pleading but also in the prayer, has not been altered. What has been revised is the rule that subsequent "amendment of the complaint or similar pleading will not thereby vest jurisdiction in the Court, much less the payment of the docket fee based on the amount sought in the amended pleading," the trial court now being authorized to allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or reglementary period. Moreover, a new rule has been added, governing awards of claims not specified in the pleading - i.e., damages arising after the filing of the complaint or similar pleading-as to which the additional filing fee therefor shall constitute a lien on the judgment. Now, under the Rules of Court, docket or filing fees are assessed on the basis of the "sum claimed," on the one hand, or the "value of the property in litigation or the value of the 18 estate," on the other. There are, in other words, as already above intimated, actions or proceedings involving real property, in which the value of the property is immaterial to the court's jurisdiction, account thereof being taken merely for assessment of the legal fees; and there are actions or proceedings, involving personal property or the recovery of money and/or damages, in which the value of the property or the amount of the demand is decisive of the trial court's competence (aside 19 from being the basis for fixing the corresponding docket fees). Where the action is purely for the recovery of money or damages, the docket fees are assessed on the basis of the aggregate amount claimed, exclusive only of interests and costs. In this case, the complaint or similar pleading should, according to Circular No. 7 of this Court, "specify the amount of damages being prayed for not only in the body of the pleading but also in the prayer, and said damages shall be considered in the assessment of the filing fees in any case." Two situations may arise. One is where the complaint or similar pleading sets out a claim purely for money or damages and there is no precise statement of the amounts being claimed. In this event the rule is that the pleading will "not be accepted nor admitted, or shall otherwise be expunged from the record." In other words, the complaint or pleading may be dismissed, or the claims as to which the amounts are unspecified may be expunged, although as aforestated the Court may, on motion, permit amendment of the complaint and payment of the fees provided the claim has not in the meantime become timebarred. The other is where the pleading does specify the amount of every claim, but the fees paid are insufficient; and here again, the rule now is that the court may allow a reasonable time for the payment of the prescribed fees, or the balance thereof, and upon such payment, the defect is cured and the court may properly take cognizance of the action, unless in the meantime prescription has set in and consequently barred the right of action. Where the action involves real property and a related claim for damages as well, the legal fees shall be assessed on the basis of both (a) the value of the property and (b) the total amount of related damages sought. The Court acquires jurisdiction over the action if the filing of the initiatory pleading is accompanied by the payment of the requisite fees, or, if the fees are not paid at the time of the filing of the pleading, as of the time of full payment of the fees within such reasonable time as the court may grant, unless, of course, prescription has set in the meantime. But where-as in the case at bar-the fees prescribed for an action involving real property have been paid, but the amounts of certain of the related damages (actual, moral and nominal) being demanded are unspecified, the action may not be dismissed. The Court undeniably has jurisdiction over the action involving the real property, acquiring it upon the filing of the complaint or similar pleading and payment of the prescribed fee. And it is not divested of that authority by the circumstance

that it may not have acquired jurisdiction over the accompanying claims for damages because of lack of specification thereof. What should be done is simply to expunge those claims for damages as to which no amounts are stated, which is what the respondent Courts did, or allow, on motion, a reasonable time for the amendment of the complaints so as to allege the precise amount of each item of damages and accept payment of the requisite fees therefor within the relevant prescriptive period. WHEREFORE, the petition pronouncement as to costs. is DISMISSED, without

separate memorandum (Rollo, p. 45) for defendant Petrophil Corporation. On July 11, 1985, the Regional Trial Court *** issued an order denying the motion to dismiss but ordering private respondent to pay the additional docket fee in the amount of P945,636.90 computed at P4.00 per P1,000.00 in excess of the first P150,000.00 based on the amount of P236,572,350.00 which private respondent explicitly averred in his testimony of November 13, 1984 as the amount he seeks to recover (Rollo, p. 54). On July 31, 1985, private respondent filed a motion for reconsideration of the order of the trial court requiring him to pay an additional docket fee (Rollo, p. 54) which was opposed by petitioners (Rollo, p. 66) and Petrophil Corporation (Rollo, p. 59). Acting on the motion, on October 30,1985 the trial court issued an order allowing private respondent to pay the required additional docket fee after the prosecution of the case, to be deducted from whatever judgment in damages shall be awarded by the Court (Rollo, p. 70). The motions for reconsideration filed by petitioners (Rollo, p. 77) and Petrophil Corporation (Reno, p. 86) were denied by the trial court in its order of November 18,1985 (Rollo, p. 92). On November 14, 1986, petitioners elevated the case to respondent Court of Appeals through a special civil action for certiorari, under the provisions of Rule 65 of the Rules of Court, to annul and set aside the orders dated October 30,1985 and November 18, 1985 of the Regional Trial Court of Olongapo City, Branch LXXII, with prayer for a restraining order/ preliminary injunction (Rollo, p. 93). Respondent Court dismissed the petition for lack of merit in its decision promulgated on September 4, 1986 (Rollo, p. 168). The motion for reconsideration of the decision, filed by petitioners (Rollo, p. 171) was denied by respondent court in its resolution dated September 26, 1986 (Rollo, p. 320). Instant petition was filed with the Court on November 6, 1986 (Rollo, p. 11). The Second Division of this Court resolved to issue the temporary restraining order prayed for in a resolution dated November 17,1986 (Rollo, p. 180), which was issued on November 18,1986, restraining the Judge of the Regional Trial Court of Olongapo City, Branch LXXI her agents, representatives, and/or any person or persons, acting upon her orders or in her stead, from further proceeding with its Civil Case No. 45- 0-83, entitled "Adrian dela Paz v. Filipinas Shell Petroleum Corporation, et al." (Rollo, p. 181). On December 2, 1986, private respondent filed a letter with the Court addressed to Deputy Court Administrator Ranjo, praying for the lifting of the temporary restraining order issued by the Court on November 18,1986 (Reno, p. 198.) Private respondent filed his comment on the petition on December 15, 1986 (Rollo, p. 187); petitioners filed their reply to comment on January 2, 1987 (Rollo, p. 194). In accordance with the Resolution of the Court, dated January 7, 1987 (Rollo, p. 197) private respondent filed his rejoinder on February 12, 1987 (Rollo, p. 236). Petitioners filed on March 2, 1987 their comment on private respondents letter of December 2, 1986 (Rollo, p. 258) in accordance with the Resolution of the Court of March 4, 1987 (Rollo, p. 234). On March 30, 1987, the Court resolved: (a) to give due course to the petition; and (b) to dispense with the memoranda of the parties. In the same resolution the Court considered the case submitted for deliberation (Rollo, p. 261). Meantime, on February 9, 1987 Judge Esther Nobles Bans inhibited herself voluntarily from further hearing the case due to an alleged verified letter- complaint of private respondent to the Chief Justice for her disqualification/inhibition (Rollo, p. 366) and the case was re-raffled to Branch LXXIII of the Regional

Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 76119 April 10, 1989 PILIPINAS SHELL PETROLEUM CORPORATION, CALTEX (PHILIPPINES) INC., AND MOBIL OIL PHILIPPINES, INC., petitioners vs. THE COURT OF APPEALS, HON. ESTHER NOBLES BANS, Presiding Judge, Branch LXXI, Zambales and Olongapo City, and ADRIAN S. DELA PAZ, respondents. Siguion Reyna, Montecillo & Ongsiako for petitioners.

PARAS, J.: This is a petition for certiorari under Section 1, Rule 65 of the Rules of Court, with preliminary injunction, seeking the annulment or set aside of the decision ** of respondent Court of Appeals promulgated on September 4, 1986 dismissing petitioners' petition for certiorari; and its resolution of September 26, 1985 denying petitioners' motion for reconsideration of the aforementioned decision. The facts of the case are as follows: Private respondent Adrian dela Paz is a holder of Letters Patent No. 14132 issued by the Patent Office on February 27, 1981 for his alleged invention, Coco-diesel fuel for diesel engines and its manufacture. On March 7, 1983 private respondent filed a complaint with the Regional Trial Court of Olongapo City, Branch LXII, for infringement of patent with prayer for payment of reasonable compensation and for damages herein petitioners Pilipinas Shell Petroleum Corporation, Caltex (Phil.), Mobil Oil Philippines, Inc., and Petrophil Corporation (Rollo, p. 31). There was no mention in the complaint of the amount of damages being claimed but private respondent alleged, among others, that the conservative estimate of the combined gross sales of defendants (petitioners herein and Petrophil Corporation) of plaintiffs (private respondents herein) invention is P934,213,780.00 annually computed at the rate of 20 million barrels (volume) being yearly sold by the marketing arms of defendants at the price of P2.938 per liter (Rollo, p. 35). In the hearing of November 13, 1984 private respondent estimated the yearly royalty due him from defendants (petitioners herein and Petrophil Corporation) to be P236,572,350.00 (Rono, p. 39). During the hearing of February 19,1985, petitioners discovered that private respondent paid only as filing fee the amount of P252.00 based on his claim for attomey's fees in the amount of P200,000.00. Petitioners orally moved for the dismissal of the complaint for failure of private respondent to pay the correct filing fee (Rollo, p. 14). The parties filed their respective memoranda (Rollo, p. 50) with the Solicitor General filing a

Trail Court of Olongapo City, presided over by Judge Alicia L. Santos (Rollo, p. 365). The given issues of the petition are as follows: I. Whether or not the trial court can defer the payment of the filing fee till after judgment although the plaintiff (herein private respondent) who is not a pauper-litigant, could state the amount of damages claimed when he filed his complaint; and II. Whether or not Section 5, paragraph A, Rule 141 of the Rules of Court is applicable to the case at bar. The main issue in this case is whether or not a party can file a complaint without specifying the amount of damages he is claiming and as a result defer the payment of the proper fees until after trial on the merits, in accordance with the appraisal of the Court. Under paragraph B No. 11 of the Interim Rules of Court, . . . If any demand is for damages in a civil action, the amount thereof must be specifically alleged. In the case at bar, private respondent deliberately omitted stating any amount of damages (except attorney's fees), although the same could have been estimated at the filing of the complaint since he already knew the figures of the alleged sales of the petitioner oil companies including the Petrophil, lending credence to petitioners' claim that such omission is deliberate for the purpose of avoiding the payment of the correct fees (Rollo, p. 19). As correctly ruled by the Court of Appeals, the Rule applicable to this case is Section 5(a) of Rule 141 of the Rules of Court. Concededly, that particular Section 5(a) envisions two kinds of claims, such as: (1) those which are immediately ascertainable which fall under the first paragraph thereof and (2) those which could not be immediately ascertained as to the exact amount and which fall under the third paragraph of the same section. The first paragraph of said section specifies the amount to be paid corresponding to the sum claimed, exclusive of interest, of the value of the property in litigation, or the value of the estate. Under this paragraph, obviously fall claims capable of exact pecuniary estimation. On the other hand, the third paragraph covers claims where the exact amount has to be finally determined by the Court. The third paragraph of the same section provides: In case the value of the property or estate or the sum claimed is less or more in accordance with the appraisal of the court, the difference of fee shall be refunded or paid as the case may be. (Emphasis supplied) It will be observed that the above provision clearly contemplates an initial payment of the filing fees corresponding to the estimated amount of the claim subject to adjustment as to what later may be proved. Conversely, nowhere can a justification be found to convert such payment to something akin to a contingent fee which would depend on the result of the case. Under the circumstances, the Court would stand to lose the filing fees should the party be later adjudged to be not entitled to any claim at all. Filing fees are intended to take care of court expenses in the handling of cases in terms of cost of supplies, use of equipments, salaries and fringe benefits of personnel, etc., computed as to man hours used in handling of each case. The payment of said fees therefore, cannot be made dependent on the result of the action taken, without entailing tremendous losses to the government and to the judiciary in particular.

In the case at bar, only the amount of P252.00 based on the claim of attorney's fees was paid but such is but a part of his enormous claim for royalties/reasonable compensation, which was not estimated and the corresponding filing fees were left unpaid. At issue in the trial court, was respondent judge's Order dated July 11, 1985 order private respondent to pay the additional docket fee in the amount of P945,636.90, but upon motion, the Court reconsidered its Order and allowed the plaintiff (private respondent herein) to pay the same after the prosecution of the instant case to be deducted from whatever judgment in damages shall be awarded by the Court. Relative thereto, there is merit in petitioners' claim that the third paragraph of Rule 141, Section 5(a) clearly contemplates a situation where an amount is alleged or claimed in the complaint but is less or more than what is later proved. If what is proved is less than what was claimed, then a refund will be made; if more, additional fees will be exacted. Otherwise stated, what is subject to adjustment is the difference in the fee and not the whole amount. Such interpretation would give meaning to the provisions of subject Rule and would implement instead of defeat its objectives. Corollary thereto, the third paragraph of Section 16, Rule 141 which states that: The legal fees shall be a lien on the monetary or property judgment rendered in favor of the pauperlitigant. cannot be applied to the case at bar because said provision specifically refers to pauper-litigants, and nowhere in the records was it shown that private respondent is litigating as a pauper and therefore exempted from the payment of court fees. Neither is the provision under Section 1 of Rule 111 applicable. The second paragraph of Section 1 of Rule 111 which provides for the institution of criminal and civil actions, reads: Where the offended party seeks to enforce civil liability against the accused by way of actual, moral, nominal, temperate or exemplary damages, the filing fees for such civil action as provided in these Rules shall first be paid to the Clerk of Court where the criminal case is filed. In all other cases, the filing fees corresponding to the civil liability awarded by the Court shall constitute a first lien on the judgment award and no payment by execution or otherwise may be made to the offended party without his first paying the amount of such filing fees to the Clerk of Court. The instant case is not a criminal action with the civil action for the recovery of civil liability impliedly instituted with it. On the contrary it is a purely civil action for the recovery of a sum of money in the form of reasonable compensation or royalty payments and/or damages. Finally, in a similar case, although the trial court was held to have acquired jurisdiction over the case despite the payment of insufficient fees, the Court ruled that the proceedings in the Civil Case may be resumed, after an of the lawful fees shall have been paid. Magaspi v. Ramolete, 115 SCRA 205 [19821). The Magaspi ruling was overturned in Manchester Development Corporation v. Court of Appeals, 149 SCRA 562 (1987) which held that non-payment of the correct docket fee was jurisdictional. Subsequently however, the Manchester doctrine was relaxed in San Insurance Office Ltd. v. Hon. Maximiano Asuncion (G.R. Nos. 79937-38), promulgated February 13,1989, where the

Court en banc, thru Mr. Justice Emilio Gancayco, laid down the following rules: 1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the prescribed docket fee, that vests a trial court with jurisdiction over the subject-matter or nature of the action. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or reglementary period. 2. The same rule applies to permissive counterclaims, third-party claims and similar pleadings, which shall not be considered filed until, and unless the filing fee prescribed therefor is paid. The court may also allow payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or reglementary period. 3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the pleading, or if specified the same has been left for determination by the court, the additional filing fee therefor shall constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court or his duly authorized deputy to enforce said hen and assess and collect the additional fee. Private respondent's right of free access to the courts is not denied by the correct application of the provisions of Rule 141, Section 5(a) in the instant case, because he has a remedy under the same Rule, where he can apply for the privilege to litigate his case as pauper if he is so entitled. PREMISES CONSIDERED, (1) the decision of the Court of Appeals is REVERSED and SET ASIDE; (2) the order of respondent Judge dated July 11, 1985 is REINSTATED; (3) the case is REMANDED to the trial court; (4) the proceedings in Civil Case No. 45-0-88 are ordered RESUMED upon payment of all lawful fees (as assessed by the Clerk of Court of said Court) by private respondent or upon exemption from payment thereof upon proper application to litigate as pauper; and (5) the temporary restraining order issued by the Court on November 18,1986 will be deemed LIFTED should Order No. 4 be complied with. SO ORDERED.

Ephraim J. Serquina for and his own behalf as respondent.

SARMIENTO, J.: On August 26, 1987, the private respondent, Ephraim Serquina, petitioned the respondent court for the probate of the last will and testament of Carmelita Farlin. His petition was docketed as Sp. Proc. No. 127-87 of the respondent court, entitled "In Re Testate Estate of Carmelita S. Farlin, Ephraim J. Serquina, Petitioner." He also petitioned the court in his capacity as counsel for the heirs, the herein petitioners, and as executor under the will. The petition was not opposed and hence, on November 17, 1987, the respondent court issued a "certificate of 1 allowance," the dispositive part of which reads as follows: WHEREFORE, upon the foregoing, the Court hereby renders certification that subject will and testament is accordingly allowed in accordance with Sec. 13 of Rule 76 of the Rules of Court. SO ORDERED.
2

On March 14, 1988, Atty. Ephraim Serquina filed a "motion for 3 attorney's fees" against the petitioners, alleging that the heirs had agreed to pay, as and for his legal services rendered, the sum of P68,000.00. Thereafter summonses were served upon the heirs "as if it were 4 a complaint against said heirs" directing them to answer the motion. Thereafter, the heirs filed their answer and denied the claim for P68,000.00 alleging that the sum agreed upon was only P7,000.00, a sum they had allegedly already paid. After pre-trial, the respondent court rendered judgment and disposed as follows: In the light of the foregoing, considering the extent of the legal services rendered to the clients, the value of the properties gained by the clients out of said services, the petition for attorney's fees is granted. Judgment is hereby rendered directing the respondent heirs to pay their lawyer the sum of P65,000.00 as true and reasonable attorney's fees which shall be a lien on the subject properties. Cost against the respondent. SO ORDERED.
5

SUPREME COURT
Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 86250 February 26, 1990 ALBERTO F. LACSON, EDITHA F. LACSON, ROMEO F. LACSON and ZENA F. VELASCO, petitioners, vs. HON. LUIS R. REYES, in his capacity as presiding judge of Branch 22 of the Regional Trial Court of Cavite, Branch 22, and/or Multiple Sala, Imus, Cavite, and EPHRAIM J. SERQUINA, respondents. Victor H. Volfango for petitioners.

On October 21, 1988, eleven days after the heirs received a 6 copy of the decision, the latter filed a notice of appeal. On November 7, 1988, the respondent court issued an order 7 directing the heirs to amend their notice of appeal. On October 27, 1988, the respondent court issued an order "noting" the notice on appeal "appellants [the heirs] having failed to correct or complete the same within the reglementary 8 period to effect an appeal." On November 24, 1988, the respondent court issued yet another order denying the notice of appeal for failure of the 9 heirs to file a record on appeal. Thereafter, Atty. Serquina moved for execution. On December 5, 1988, the respondent court issued an order 10 granting execution.

The petitioners submit that the decision, dated October 26, 1988, and the orders, dated October 27, 1988, November 24, 1988, and December 5, 1988, respectively, are nun and void for the following reasons: (1) the respondent court never acquired jurisdiction over the "motion for attorney's fees" for failure on the part of the movant, Ephraim Serquina, to pay docket fees; (2) the respondent court gravely abused its discretion in denying the heirs' notice of appeal for their failure to file a record on appeal; and (3) the respondent court also gravely abused its discretion in awarding attorney's fees contrary to the provisions of Section 7, of Rule 85, of the Rules of Court. Atty. Serquina now defends the challenged acts of the respondent court: (1) his motion was a mere incident to the main proceedings; (2) the respondent court rightly denied the notice of appeal in question for failure of the heirs to submit a record on appeal; and (3) in collecting attorney's fees, he was not acting as executor of Carmelita Farlin's last will and testament because no letters testamentary had in fact been issued. We take these up seriatim. I. Anent docket fees, it has been held that the court acquires jurisdiction over any case only upon payment of the prescribed docket fee. Although the rule has since been tempered, that is, there must be a clear showing that the party had intended to evade payment and to cheat the courts, it does not excuse him from paying docket fees as soon as it becomes apparent that docket fees are indeed payable. In the case at bar, the "motion for attorney's fees" was clearly in the nature of an action commenced by a lawyer against his clients for attorney's fees. The very decision of the court states: This case is an out-growth from Sp. Proc. No. 127-87 of same Court which was long decided (sic). It resulted from the filing of a petition for attorney's fees by the lawyer of the petitioner's heirs in the case against the latter. Upon the filing of the petition for attorney's fees, the heir- respondents (sic) were accordingly summoned to answer the petition as if it were a complaint against said heirs who retained the petitioner as their lawyer in the 13 said case. In that event, the parties should have known, the respondent court in particular, that docket fees should have been priorly paid before the court could lawfully act on the case, and decide it. It may be true that the claim for attorney's fees was but an incident in the main case, still, it is not an escape valve from the payment of docket fees because as in all actions, whether separate or as an offshoot of a pending proceeding, the payment of docket fees is mandatory. Assuming, therefore, ex gratia argumenti, that Atty. Serquina's demand for attorney's fees in the sum of P68,000.00 is valid, he, Atty. Serquina, should have paid the fees in question before the respondent court could validly try his "motion". II. With respect to the second issue, it has been held that in appeals arising from an incident in a special proceeding, a record on appeal is necessary, otherwise, the appeal faces a 14 dismissal. It has likewise been held, however, that in the interest of justice, an appeal, brought without a record on
12 11

appeal, may be reinstated under exceptional circumstances. Thus: xxx xxx xxx It is noted, however, that the question presented in this case is one of first impression; that the petitioner acted in honest, if mistaken, interpretation of the applicable law; that the probate court itself believed that the record on appeal was unnecessary; and that the private respondent herself apparently thought so, too, for she did not move to dismiss the appeal and instead impliedly recognized its validity by filing the appellee's brief. In view of these circumstances, and in the interest of justice, the Court feels that the petitioner should be given an opportunity to comply with the abovediscussed rules by submitting the required record on appeal as a condition for the revival of the appeal. The issue raised in his appeal may then be fully discussed and, in the light of the briefs already filed by the parties, 15 resolved on the merits by the respondent court. In the instant case, the Court notes the apparent impression by the parties at the outset, that a record on appeal was unnecessary, as evidenced by: (1) the very holding of the respondent court that "[i]t is now easy to appeal as there is no more need for a record on appeal . . . [b]y merely filing a notice of appeal, the appellant can already institute his appeal . . . 16 ;" (2) in its order to amend notice of appeal, it did not require the appellants to submit a record on appeal; and (3) Atty. Serquina interposed no objection to the appeal on that ground. In any event, since we are annulling the decision appealed from, the matter is a dead issue. III. As we have indicated, we are granting certiorari and are annulling the decision appealed from, but there seems to be no reason why we can not dispose of the heirs' appeal in a single proceeding. It is pointed out that an attorney who is concurrently an executor of a will is barred from recovering attorney's fees from the estate. The Rule is specifically as follows: SEC. 7. What expenses and fees allowed executor or administrator. Not to charge for services as attorney. Compensation provided by will controls unless renounced. An executor or administrator shall be allowed the necessary expenses in the care, management and settlement of the estate, and for his services, four pesos per day for the time actually and necessarily employed, or a commission upon the value of so much of the estate as comes into his possession and is finally disposed of by him in the payment of debts, expenses, legacies, or distributive shares, or by delivery to heirs or devisees, of two per centum of the first five thousand pesos of such value, one per centum of so much of such value as exceeds five thousand pesos and does not exceed thirty thousand pesos, one-half per centum of so much of such value as exceeds thirty thousand pesos and does not exceed one hundred thousand pesos, and one-quarter per centum of so much of such value as exceeds one hundred thousand pesos. But in any special case, where the estate is large, and the settlement has been attended with great difficulty, and has required a high degree of capacity on the part of the executor or administrator, a greater sum may be allowed. If objection to the fees allowed be taken, the allowance may be reexamined on appeal.

If there are two or more executors or administrators, the compensation shall be apportioned among them by the court according to the services actually rendered by them respectively. When the executor or administrator is an attorney, he shall not charge against the estate any professional fees for legal services rendered by him. When the deceased by will makes some other provision for the compensation of his executor, that provision shall be a full satisfaction for his services unless by a written instrument filed in the court he renounces all 17 claim to the compensation provided by the will. The rule is therefore clear that an administrator or executor may be allowed fees for the necessary expenses he has incurred as such, but he may not recover attorney's fees from the estate. His compensation is fixed by the rule but such a compensation is in the nature of executor's or administrator's commissions, 18 and never as attorney's fees. In one case, we held that "a greater sum [other than that established by the rule] may be allowed 'in any special case, where the estate is large, and the settlement has been attended with great difficulty, and has required a high degree of capacity on the part of the executor or 19 administrator.'" It is also left to the sound discretion of the 20 court. With respect to attorney's fees, the rule, as we have seen, disallows them. Accordingly, to the extent that the trial court set aside the sum of P65,000.00 as and for Mr. Serquina's attorney's fees, to operate as a "lien on the subject 21 properties," the trial judge must be said to have gravely abused its discretion (apart from the fact that it never acquired jurisdiction, in the first place, to act on said Mr. Serquina's "motion for attorney's fees"). The next question is quite obvious: Who shoulders attorney's fees? We have held that a lawyer of an administrator or executor may not charge the estate for his fees, but rather, his 22 client. Mutatis mutandis, where the administrator is himself the counsel for the heirs, it is the latter who must pay therefor. In that connection, attorney's fees are in the nature of actual 23 damages, which must be duly proved. They are also subject to certain standards, to wit: (1) they must be reasonable, that is to say, they must have a bearing on the importance of the subject matter in controversy; (2) the extent of the services 24 rendered; and (3) the professional standing of the lawyer. In all cases, they must be addressed in a full-blown trial and not 25 on the bare word of the parties. And always, they are subject to the moderating hand of the courts. The records show that Atty. Ephraim Serquina, as counsel for the heirs, performed the following: xxx xxx xxx 5. That after the order of allowance for probate of the will, the undersigned counsel assisted the heirs to transfer immediately the above-mentioned real estate in their respective names, from (sic) the payment of estate taxes in the Bureau of Internal Revenue to the issuance by the Registry of Deeds of the titles, in order for the heirs to sell the foregoing real estate of 10,683 sq. cm (which was also the subject of sale prior to the death of the testator) to settle testator's obligations and day-today subsistence being (sic) that the heirs, except Zena F. Velasco, are not employed neither doing any 26 business; The Court is not persuaded from the facts above that Atty. Serquina is entitled to the sum claimed by him (P68,000.00) or that awarded by the lower court (P65,000.00). The Court observes that these are acts performed routinely since they form part of what any lawyer worth his salt is expected to do. The will was furthermore not contested. They are not, so Justice Pedro Tuason wrote, "a case [where] the administrator was

able to stop what appeared to be an improvident disbursement of a substantial amount without having to employ outside legal 27 help at an additional expense to the estate," to entitle him to a bigger compensation. He did not exactly achieve anything out of the ordinary. The records also reveal that Atty. Serquina has already been 28 paid the sum of P6,000.00. It is our considered opinion that he should be entitled to P15,000.00 for his efforts on a quantum meruit basis. Hence, we hold the heirs liable for P9,000.00 more. WHEREFORE, premises considered, judgment is hereby rendered: (1) GRANTING the petition and making the temporary restraining order issued on January 16, 1989 PERMANENT; and (2) ORDERING the petitioners to PAY the private respondent, Atty. Ephraim Serquina, attorney's fees in the sum of P9,000.00. The said fees shall not be recovered from the estate of Carmelita Farlin. No costs. SO ORDERED. Republic of the Philippines SUPREME COURT Manila FIRST DIVISION

G.R. No. 120575 December 16, 1998 DR. OLIVIA S. PASCUAL, in her capacity as special administratrix of the estate of the late DON ANDRES PASCUAL and as executrix of the testate estate of the late DOA ADELA S. PASCUAL, petitioner, vs. COURT OF APPEALS; JUDGE MANUEL S. PADOLINA, Regional Trial Court of Pasig, Branch 162; DEPUTY SHERIFF CARLOS G. MAOG; and ATTY. JESUS I. SANTOS, respondents.

PANGANIBAN, J.: The extraordinary action to annul a final judgment is restricted to the grounds provided by law, in order to prevent it from being used by a losing party to make a complete farce of a duly promulgated decision that has long become final and executory. The Case Before us is a Petition for Review on Certiorari challenging the 1 June 7, 1995 Decision of the Court of Appeals in CA-GR SPNo. 34487, denying the Petition for Annulment of Judgment. 2 The dispositive portion of the assailed Decision reads: WHEREFORE, and upon all the foregoing considerations, the petition is hereby DISMISSED, with costs against the petitioner. The Facts Don Andres Pascual died intestate on October 12, 1973 and was survived by (1) his widow, Doa Adela Soldevilla Pascual; (2) the children of his full blood brother. Wenceslao Pascual Sr. Esperanza C. Pascual-Bautista, Manuel C. Pascual, Jose C. Pascual, Susana C. Pascual-Guerrero, Erlinda C. Pascual and Wenceslao C. Pascual Jr.; (3) the children of his half blood brother Pedro Pascual Avelino Pascual, Isosceles Pascual, Leida Pascual-Martinez, Virginia Pascual-Ner, Nona Pascual-

Fernando, Octavio Pascual and Geranaia Pascual-Dubert; (4) the intestate estate of his full blood brother Eleuterio T. Pascual represented by Mamerta P. Fugoso, Abraham S. Sarmiento III, Dominga M. Pascual, Regina Sarmiento-Macaibay, Dominga P. San Diego, Nelia P. Marquez, Silvestre M. Pascual and Eleuterio M. Pascual; and (4) the acknowledged natural children of his full blood brother Eligio Pascual Hermes S. Pascual and Olivia S. Pascual (herein petitioner). On December 11, 1973, Doa Adela (the surviving spouse) filed with the then Court of First Instance (CFI) of Pasig, Rizal, a petition for letters of administration over the estate of her 3 husband. After due notice and hearing, the CFI appointed her 4 special administratrix. To assist her with said proceedings, Doa Adela hired, on February 24, 1974, Atty. Jesus I. Santos, herein private respondent, as her counsel for a fee equivalent to fifteen (15) percent of the gross estate of the decedent. When Batas Pambansa Blg. 129 took effect, the petition was reassigned to the Regional Trial Court (RTC) of Pasig, Branch 162, presided by Judge Manual Padolina. On November 4, 1985, the heirs of the decedent moved for the approval of their Compromise Agreement, stipulating that three fourths (3/4) of the estate would go to Doa Adela and one fourth (1/4) to the other heirs. The intestate court approved said Agreement on December 10, 1985. On August 18, 1987, while the settlement was still pending, Doa Adela died, leaving a will which named the petitioner as the sole universal heir. The latter filed at the Regional Trial Court of Malabon, Branch 72, a petition for the probate of said will. On September 30, 1987, the RTC of Pasig denied the motion to reiterate hereditary rights, which was filed by petitioner and her brother. The Court reasoned that, as illegitimate children of the brother of the decedent, they were barred from acquiring any hereditary right to her intestate estate under Article 992 of the 5 Civil Code. On December 17, 1987, it ordered that the private respondent's lien in the hereditary share of Doa Adela be entered into the records. Six years after Doa Adela's death, on January 19, 1994, to be exact, Judge Padolina rendered a Decision which disposed as 6 follows: WHEREFORE, in view of the foregoing, let the manner of partition of the estate of Don Andres Pascual be as follows: One-fourth (1/4) of the properties, personal and real, to the heirs of Don Andres Pascual in accordance with the provisions of the Compromise Agreement of October 16, 1985. Three-fourths (3/4) of the properties personal and real to the estate of Doa Adela Soldevilla Pascual. In accordance with the Compromise Agreement of October 16, 1985. To this end, let the Register of Deeds of the provinces or cities where all real properties of the estate [lie], cancel the certificates of title in the name of Don Andres Pascual (married to Doa Adela S. Pascual), and issue new Certificates of Title in the manner of partition above-mentioned indicating therein the portions they are entitled to. With respect to the shares of stock in Liberty Insurance Corporation and San Francisco Del Monte Bank, and the proceeds of the sale of the real properties of the estate and all monies and other personal properties of the estate, the same being capable of physical distribution. [l]et [them] be distributed in accordance with the portions so delineated.

This Court awards the attorney's fees of Atty. Jesus Santos equivalent to 15% of the 3/4 share of the estate of Doa Adela S. Pascual. Finally, it is hereby decreed that any and all properties of the estate of Don Andres Pascual, whether real or personal, which may have not been included in the inventory of properties aforelisted in this decision, for any reason whatsoever, and which may later on be uncovered or found in the future, shall likewise be apportioned and distributed, as follows: 1. One-fourth (1/4) of the properties, personal and real, to the heirs of Don Andres Pascual in accordance with the provisions of the Compromise Agreement of October 16, 1985; and 2. Three-fourths (3/4) of the properties, personal and real, to the estate of Doa Adela Soldevilla Pascual, in accordance with the Compromise Agreement of October 16, 1985. All the parties are reminded to strictly comply with the above conditions. After said Decision had become final and executory, the private respondent filed on March 25, 1994 a Motion for the Issuance of a Writ of Execution insofar as the payment of his attorney's fees was concerned. Despite opposition from the petitioner, the motion was granted in the April 19, 1994 Order of the intestate court, directing "the issuance of a writ of execution in the partial amount of P2,000,000.00 in favor of movant[,] Atty. Jose I. Santos to be implemented against the 3/4 share of Doa Adela S. Pascual, upon payment by the movant of the prescribed 7 docket fees for the said partial amount." The following day, April 20, 1994, Branch Clerk of Court Arturo 8 V. Camacho issued a Writ of Execution; and Sheriff Carlos G. Maog, a Notice of Garnishment to the San Francisco Del Monte Rural Bank (SFDM Avenue, Quezon City), garnishing deposits and shares of stocks belonging to the estate of Doa Adela 9 sufficient to cover the amount of P2 million. Two days later, petitioner moved for the reconsideration and the 10 quashal of the Writ of Execution, which the RTC of Pasig 11 denied in its Order of June 29, 1994. Private respondent countered with two motions to order petitioner to comply with the writ of garnishment and to compel her to appear and explain her failure to comply with the writ. Feeling aggrieved, petitioner filed with the Court of Appeals (CA) a petition for annulment of the award of attorney's fees in the January 19, 1994 Decision of the trial court the Order of April 19, 1994, granting a Writ of Execution; the Writ of Execution dated April 20, 1994; and the Order of June 29, 1994, denying petitioner's motion for reconsideration. As stated earlier, the appellate court dismissed the petition, ruling that the intestate court had jurisdiction to make the questioned award and that petitioner had been accorded due process. It noted that the private respondent had filed his claim as early as the first quarter of 1974; and that, in its order of December 17, 1987, the trial court had entered the attorney's lien into the records. It upheld the jurisdiction of the intestate court on the ground that, although not incurred by the deceased during his lifetime, the monetary claim was related to the ordinary acts of administration of the estate. The CA similarly declared that the petitioner had been accorded due process. It noted that, despite knowledge of the claim, she did not oppose or hint at any resistance to the payment of said claim. She also chose not to move for reconsideration or to file an appeal after the award had been made. Indubitably, the award became final and executory. Hence, this petition. On October 21, 1997, after the case was submitted for resolution by the original parties, Crisanto S. Cornejo and the other heirs of Doa Adela filed an Omnibus
12

Motion, which in sum, alleged that Judge Padolina conspired with petitioner and private respondent to place the entire Pascual estate under their control. Allegedly, Judge Padolina, in his Order of October 7, 1988, negated Cornejo and Jose Pascual's letter of administration by directing them "to refrain [from] initiating any move to dispossess or eject Olivia S. Pascual from her residence; to refrain from advertising any property of the estate for sale without prior motion duly filed therefor with due notice to all parties and prior approval of the Court; not to interfere in the management of the bank and to deposit immediately in a reputable bank in the name of the estate rentals due the estate until after the said motion shall have been resolved by the Court." They claim that, without any hearing or notice to them, the judge approved and awarded the attorney's fees of private respondent, who was purportedly his classmate andcompadre. Finally, petitioner replaced Cornejo as judicial administrator on March 6, 1989 five months after the latter had served as such. Furthermore, they allege that, in the settlement of Doa Adela's estate, private respondent filed a similar collection case before the Regional Trial Court of Malabon, Branch 73 which was, however, dismissed for violating the rules against forum shopping. Private respondent allegedly filed another collection case before the Regional Trial Court of Makati, Branch 66, wherein petitioner, in her Answer, alleged that she had paid him approximately P8 million from the time his services were engaged, aside from some unreported "commissions" from tenants, squatters and other businesses included in the Pascual estate. Consequently, petitioners-in-intervention pray for (1) the inhibition and/or disqualification of Judge Padolina from hearing Sp. Proc. No. 7554 or, alternatively, another raffle of the case to any other RTC branch in Pasig or Manila; (2) the consolidation of Sp. Proc. No. 7554 (Intestate Estate of Andres Pascual) with Sp. Proc No. 136-MN (Testate Estate of Adela Pascual) or both with Sp. Proc. No. 88948, filed before the RTC of Manila, Branch 40, presided by Judge Felipe R. Pacquing (Intestate Estate of Toribia Tolentino Soldevilla, mother of Doa Adela Pascual); (3) the investigation of the authenticity, preparation and legal compliance of Doa Adela Pascual's Last Will and Testament dated December 27, 1978, more specifically, the private respondent's participation in designating petitioner as Doa Adela's sole universal heir; (4) the setting aside of the Decisions rendered by respondent judge in Sp. Proc. No. 7554 dated January 19, 1994, and by Judge Benjamin del MundoAquino in Sp. Proc. No. 136-MN; and (5) the reopening of both cases and their remand to the court a quo. In their separate Comments, both petitioner and private respondent oppose the grant of this Omnibus Motion for being untimely and improper. The Issues In her Memorandum, petitioner alleges that the reversal of the assailed Decision is called for, in view of the following 14 "compelling reasons": a. The portion of the decision dated January 19, 1994 awarding attorney's fees is void from the beginning because it was made after . . . [the] trial court had lost its jurisdiction over the attorney's client by reason of her death[;] b. The questioned portion of the decision of . . . [the] trial court is void because it deprived the heirs of Doa Adela due process of law[:] c. The questioned portion of the decision of respondent trial court is void from the beginning because the body of the decision does not state the facts and the law upon which the award is based[;]
13

d. Petitioner has not lost her right to question the conclusion of respondent trial court on the amount of attorney's fees[;] and e. The writ of execution was wrongfully issued. The Court believes that the resolution of this case hinges on the following issues: (1) Did the trial court have jurisdiction to make the questioned award of attorney's fees? (2) Were the heirs of Doa Adela, who were represented by petitioner, deprived of due process? (3) Were there factual and legal bases for the award of attorney's fees? Additionally, the Court will dispose of Crisanto S. Cornejo's "Omnibus Motion." The Court's Ruling The Petition is devoid of merit. Likewise, the Omnibus Motion is unmeritorious. The failure to perfect an appeal in the manner and within the period fixed by law renders the decision final and executory. Consequently, no court can exercise appellate jurisdiction to 15 review such decision. Upon the other hand, the extraordinary action to annul a final judgment is limited to the grounds provided by law and cannot be used as a stratagem to reopen the entire controversy and thereby make a complete farce of a duly promulgate decision that has long become final 16 and executory. Accordingly, this review shall consider only matters pertaining to the jurisprudential grounds for the 17 annulment of a final judgment: . . . Annulment of judgment may . . . be based on the ground that [either] a judgment is void for want of jurisdiction or the judgment was obtained by extrinsic 16 fraud. . . . . Petitioner does not allege extrinsic fraud, but bases her petition only on alleged lack of jurisdiction and due process. First Issue: Jurisdiction over the Person of the Defendant Petitioner insistently argues that the January 19, 1994 RTC Decision, insofar as it awarded attorney's fees, was void from the beginning because the intestate court had lost jurisdiction over the person of Doa Adela (the attorney's client) due to her death. The argument is untenable. The basic flaw in the argument is the misapplication of the rules on the extinction of a civil 19 action in special proceeding. The death of Doa Adela did not ipso facto extinguish the monetary claim of private respondent or require him to refile his claim with the court hearing the settlement of her testate estate. Had her filed the claim against Doa Adela personally, the rule would have applied. However, he did so against the estate of Don Andres. Thus, where an appointed administrator dies, the applicable rule is Section 2, Rule 82 of the Rules of Court, which requires the appointment of a new administrator, viz.: Sec. 2. Court may remove or accept resignation of executor or administrator. Proceedings upon death, resignation or removal . . . When an executor or administrator dies, resigns, or is removed, the remaining executor or administrator may administer the trust alone, unless the court grants letter to someone to act with him. If there is no remaining executor or administrator, administration may be granted to any suitable person. The rule does not have the effect of divesting the instance court of jurisdiction. Its jurisdiction subsists because the proper party in this case is the estate of Don Andres, which is distinct and

separate from that of Doa Adela who merely served as the former's administratrix. Doa Adela was merely a 20 representative party. and the claim was an item of the administrative expenses of Don Andres' estate. It is well-settled that a monetary claim against the person administering an estate, in relation to his or her acts of administration, in its ordinary course, can be filed at the court where a special 21 proceeding for the settlement of the estate is pending. Hence, in spite of the death of the appointed administratrix, it was the duty of the intestate court to determine whether the private respondent's claim was allowable as administrative expense if it was obtained in reference to the management of the estate; the performance of legal services which the administratrix herself could not perform; the prosecution or defense of actions or suits on behalf of or against the estate; or the discovery, recovery or preservation of properties of the 22 estate. In other words, the intestate court has a mandate to resolve whether the said claim is a "necessary expense in the 23 care, management and settlement of the estate." For the same reason, the fact that the private respondent's lien was recorded four months after the administratrix had died is of no moment. Payment of Separate Docket Fees Is Not Necessary While not exactly a ground for annulment, the Court has held that it is the payment of the prescribed docket fee that vests a trial court with jurisdiction over the subject matter or nature of 24 the actin. Petitioner avers that the intestate court had no jurisdiction to award the disputed attorney's fees before private 25 respondent paid docket fees, as required in Lacson v. Reyes. The argument is untenable. The Court required in Lacson the payment of a separate docket fee, since the lawyer's "motion for attorney's fee" was in the "nature of an action commenced by a lawyer against his client." In contrast, the private respondent filed a claim for his attorney's fees against the estate of Don Andres. The difference in the modes of action taken Lacson inapplicable to the case at bar. In addition, where the judgment awards a claim not specified in the pleadings, or if specified, its amount was left for the court's determination, the additional filing fees shall constitute a lien on 26 the judgment. In its Order dated April 19, 1994, the intestate court required the payment of the docket fee for the claim. In fact, the private respondent paid the prescribed docket and additional filing fees. Second Issue: Heirs of Doa Adela Were Not Deprived of Due Process Asserting that she and the other heirs of the deceased administratrix were denied due process of law, petitioner disputes the following finding of the 27 CA: We can neither view with favor the petitioner's contention that the award was made without giving the heirs of Doa Adela due process of law. It must be remembered that long before the . . . Judge's questioned Decision was rendered, the petitioner was named special administratrix of the 3/4 share of Doa Adela in the estate of Don Andres . . . . As such special administratrix, the petitioner should have been aware of all her duties and responsibilities, one of which was to protect the estate from any disbursements based on claims not chargeable to the estate. She should have known that notice to her of the attorney's lien would have

amounted to notice to the heirs of Doa Adela as well. According to her, want to due process prevented the heirs from contesting the claim and submitting evidence to show that partial payments had been previously given to private respondent. The Court is not convinced. If admitted by the administrator or 28 executor, a claim according to Rule 86 of Section 11 may be allowed by the court without any hearing. Respondent court found that the claim was indeed admitted and uncontested, as shown below: . . . From the date of her appointment as special administratrix of the estate of Doa Adela on September 28, 1989 up to and beyond the time the challenged Decision became final and executory, there was nary a pip from the petitioner as such administratrix in opposition satisfaction of the subject attorney's lien. To repeat what the respondent Judge said in his aforementioned Order, "there has been no opposition nor any hint of discord or resistance from the special administratrix or any other party as to this fact." As if this were not enough, in a tacit acknowledgment of the validity of the subject contract of attorney's fees and acceptance of the enforcement thereof, the petitioner had been giving partial payments to the private respondent on the said contract. Then, after becoming aware of the rendition of the respondent Judge's Decision wherein the questioned award of attorney's fees was decreed, which was as good a time as any to assail its propriety, the petitioners maintained her silence and chose not to file any motion for the reconsideration of the Decision or appeal therefrom. Due to the petitioner's own fault and negligence, the Decision became final and executory. The petitioner must therefore bear the consequences of the maxim "[E]quity aids the vigilant, not those who 29 slumber on their right." Besides, the petitioner had ample time to contest the claim. From her appointment as special administratrix until January 19, 1994 when the RTC Decision was rendered, she had all the time to oppose the claim. This was the proper time to raise any objection. When she received said Decision on February 8, 1994, again she had the chance to question the claim in a motion for reconsideration or an appeal, and yet she opted not to take advantage of these remedies. Such facts conclusively prove that petitioner was not deprived of due process, the essence of which is the right to be 30 heard. Where a person is not heard because he or she has chosen not to give his or her side of the case, such right is not 31 violated. If one who has a right to speak chooses to be silent, one cannot later complain of being unduly silenced. Third Issue: Factual and Legal Bases of the Award of Attorney's Fees Petitioner alleges that the award of attorney's fees contained in the fallo is void ab initio, as the intestate court failed to state the factual or legal bases therefor in the body of the Decision, in 32 violation of Article VIII, Section 14 of the Constitution. The Court disagrees. The legal and factual bases of the award were stated in the body of the January 19, 1994 RTC Decision. In recounting the "significant events leading to [the] eventual 33 culmination" of the case, the trial court revealed the importance of the services of private respondent who represented the estate, argued for the intestate court's approval

of the Compromise Agreement, and rendered legal advice on the final distribution of the properties of the estate. One must also consider that, unlike in the cases cited by 34 petitioner, the awards of attorney's fees herein is not in the concept of damages based on Article 2208 of the Civil Code which, as an exception to the general rule not to impose a penalty on the right to litigate, is but a compensation for services rendered. Thus, the legal proceedings that took place and the agreement between attorneys and client were more than sufficient proof of the legality of the award. These factual and legal bases, unlike in cases where attorney's fees are granted in the concept of damages, are not unknown to the parties in the case at bar. Reasonable Attorney's Fees Petitioner avers that she has not lost her right to question the amount of attorney's fees awarded to the private respondent, insisting that it was unreasonable, as "it countenance[d] exploitation for speculative profit on account of the estate's enormous value." The Court disagrees. Although attorney's fees are always 35 subject to judicial control, delving into its reasonableness involves going into its merits, an action that is procedurally impermissible at this late time and in these proceedings. Be it remembered that petitioner filed not an appeal, but a Petition to Annul a Final Judgment. In any event, the Court finds no evidence to show that the stipulated amount of attorney's fees was illegal immoral; or in contravention of law, good morals, good customs, public order or public policy. It is therefore 36 enforceable as the law between the parties. The reasonableness of the stipulated attorney's fees finds support in Law Firm of Raymundo A. Armovit v. Court of 37 Appeals, which upheld the payment of "twenty percent of all recoveries" as attorney's fees in a foreclosure case, in which counsel succeeded in preventing the foreclosure of his client's property and in obtaining for the latter P2.7 million in unpaid rentals. In the present case, petitioner's averment that the fees in question are not proportionate to the services rendered by private respondent fails to consider the numerous properties involved and the private respondent's labor for thirteen years, during which time he became responsible for the estate of Don Andres. In fact, the established standards in fixing attorney's 38 fees calls for the upholding of the award. Additional Issue: Intervention Not Allowed Clearly understood, the Omnibus Motion is really a disguised motion for intervention. Rule 19 of the 1997 Rules of Civil Procedure, which was already in effect when the Omnibus Motion was filed on October 21, 1997, provides the guidelines for intervention: Sec. 1. Who may intervene. A person who has a legal interest in the matter in litigation, or in the success of either of the parties, or an interest against both, or is so situated as to be adversely affected by a distribution or other disposition of property in the custody of the court or of an officer thereof may, with leave of court, be allowed to intervene in the action. The court shall consider whether or not the intervention will unduly delay or prejudice the adjudication of the rights of the original parties, and whether or not the intervenor's rights may be fully protected in a separate proceeding. (2[a]. [b]a. R12) Cornejo and his co-movants claim that their inheritance is being dissipated; thus, they seek permission to intervene in this case. Obviously, however, they filed the motion beyond the
39

prescribed period. Section 2 of the aforecited Rule allows intervention at "any time before rendition of judgment by the trial court." This motion was filed only after the parties had submitted their memoranda and many years after both the RTC and the CA had rendered their decisions. Further, the motion lacks substance. Any misconduct or violation of judicial responsibility allegedly committed by Judge Padolina is not a proper subject of intervention. The reason is simple: he is merely a nominal party in an action for annulment of a final judgment. That private respondent filed Civil Case No. 95-102-MN to collect his attorney's fees does not affect the validity or finality of the January 19, 1994 Decision or the award of attorney's fees in the settlement of the estate of the husband of Doa Adela. In fact, it was dismissed for violation of the rule against forum shopping. As the reopening of the probate of the latter's will not relevant to the annulment of said award, the consolidation of the cases mentioned was similarly improper. Inexistent is the connection between the settlement of both decedents' estate and that of Toribia Tolentino Soldevilla's. It is very clear that the motion for intervention has absolutely no merit. WHEREFORE, the Petition and the Omnibus Motion are hereby DENIED, and the assailed Decision is AFFIRMED. Costs against petitioner. Republic of the Philippines SUPREME COURT Manila FIRST DIVISION

G.R. No. 126749 August 21, 1997 ERIBERTO M. SUSON, petitioner, vs. HON. COURT OF APPEALS and DAVID S. ODILAO, JR., respondents.

PADILLA, J.: The issue in this case is whether or not a party litigant, whose complaint has been dismissed by a Regional Trial Court due to improper venue, can seek an authorization from the Supreme Court thru the Deputy Court Administrator to re-file his complaint in the court of proper venue without payment of the prescribed docket fee. This is a petition for review on certiorari under Rule 45 of the 1 Rules of Court to review the decision of the Court of Appeals in CA-G.R. SP No. 37311 which dismissed petitioner's petition for certiorari assailing the order of the Regional Trial Court (Branch 6) Cebu City which denied his motion to dismiss for lack of merit. The facts are not in dispute. On 15 November 1993, private respondent Odilao filed a P5.15 million civil suit for damages against petitioner Suson before the Regional Trial Court of San Juan (Branch 26), Southern Leyte. Private respondent claimed that petitioner made false and groundless accusations of graft and corruption against him before the Office of the Ombudsman, and thereafter caused their publication in a Cebu-based local daily under the headline "ODILAO SUED FOR GRAFT." According to private respondent, Suson's machinations had cast dishonor, discredit and contempt upon his person which besmirched his reputation and caused him to suffer moral shock and social humiliation.

Private respondent paid the sum of P25,600.00 in docket fees to the Regional Trial Court (Branch 26) of Southern Leyte covered by Official Receipts Nos. 1937304 in the amount of P15,450.00 and 1030112 in the amount of P10,150.00, both 2 dated 15 November 1993. On 17 December 1993, petitioner Suson filed a motion to dismiss the complaint of private respondent Odilao on the ground of improper venue, alleging therein that Odilao resides in Talisay, Cebu and not in Himonganan, Southern Leyte. Finding merit in petitioner's arguments in his motion to dismiss, the lower court (RTC Southern Leyte) granted petitioner's 3 aforesaid motion on 24 May 1994. Thereafter, private respondent went to the Regional Trial Court of Cebu City to re-file the same complaint (except the statement of his actual residence) that was dismissed by the Regional Trial Court (Branch 26) of Southern Leyte. Private respondent avers that upon showing the official receipts as proof of payment of the docket fees in the Regional Trial Court of Southern Leyte (Branch 26) to the Clerk of Court of the Regional Trial Court of Cebu City (Branch 6), the latter advised his counsel to file a formal request with this Court, thru the Court Administrator, for an "authority" to apply the payment for docket fees previously made to the Regional Trial Court (Branch 26), Southern Leyte to the docket fees to be paid to the Regional Trial Court Cebu City (Branch 6). On 20 June 1994, private respondent, thru counsel, wrote a letter addressed to the SC Court Administrator, requesting for an authorization to consider the filing fees previously paid to the Regional Trial Court (Branch 26) of San Juan, Southern Leyte as payment for the filing fees to be paid in the Regional Trial Court of Cebu City (Branch 6) where the case 4 was to be re-filed. On 12 July 1994, Supreme Court Deputy Court Administrator Bernardo P. Abesamis sent the following reply to private respondent's counsel:

On 16 September 1994, the RTC of Cebu City (Branch 6), presided over by Judge Loreto D. de la Victoria, issued an order denying petitioner's motion to dismiss. The court held that: . . . When said plaintiff re(-)filed the same case with this Court, he asked permission from the Supreme Court, through the Court Administrator, for authority to apply the filing fees paid by him (plaintiff) in the Regional Trial Court of San Juan, Southern Leyte, for the filing fees in the instant case. Said request was granted by the Court Administrator. The validity of the authority given by the Deputy Administrator regarding the application of the filing fees in this case can not be questioned before this forum. Indeed the Court finds it to be in keeping with justice and equity and the spirit of liberality in construing the Rules. In fact there is no prohibition in that direction. It should be stated here that P25,000.00 filing fee paid by the plaintiff in the Regional Trial Court of San Juan, Southern Leyte, is no picayune amount for one to do away with, and sense of fairness demands that plaintiff be allowed to apply the same in the filing of this 6 case (emphasis supplied). As mentioned earlier, petitioner elevated Judge de la Victoria's order for review on certiorari to the Court of Appeals which agreed with the trial court's dispositions. The Court of Appeals ratiocinated that: To require respondent Suson to pay anew the docket fee of P25,600 in its totality that he has already paid when he filed the case that was earlier dismissed on the ground of improper venue, for him to re-file the same case in the proper court is to unduly exact from him a premium on his constitutional right to free access to the courts for redress of a wrong (Section 11, Article III, 1987 Constitutional; See Tan v. Court of Appeals, 131 SCRA 397, 404). The real issue here is not whether the Deputy Court Administrator is empowered to allow the filing of a case in court without paying the required docket fee. It is whether respondent Odilao may re-file in another Court the case that was dismissed on the ground of improper venue without having to pay again the docket fee of P25,600 that he has paid in the earlier case. Said issue is resolved in 7 the affirmative in favor of respondent Odilao. In his present petition, petitioner contends that "to relieve Odilao from paying the docket fee in the Cebu Court by just presenting the receipts issued by the Leyte Court would be tantamount to a withdrawal of the docket fee paid to the Leyte Court." In legal contemplation, the Leyte Court had acquired jurisdiction over Civil Case No. P-417 upon the payment of the prescribed docket fee(s) and its order dismissing the case due to improper venue was a final disposition of the case pursuant to the exercise of said jurisdiction. Petitioner further contends that the case later filed in the Regional Trial Court of Cebu City (Branch 6) by private respondent is "a distinct and separate case from that of the V Leyte court as it has a new docket number (CEB-16336) although the allegations therein are entirely the same as Civil Case No. P-417 filed in the RTC of Southern Leyte (Branch 26)." In his comment, private respondent Odilao contends that "it is incorrect for petitioner to insist that Odilao failed to pay the required filing fees." He (Odilao) was not granted an "exemption" from the payment of filing fees by Deputy Court Administrator Abesamis but merely an authority to apply the filing fees he paid in Civil Case No. P-417 filed in RTC Southern Leyte (Branch 26) as "payment for filing fees of the same case" re-filed in the RTC of Cebu (Branch 6). In Pilipinas Shell Petroleum Corp. v. CA, we had occasion to rule that:
8

12 July 1994 Atty. Fidel C. Gonzales Gonzales Law Office 154 V. Urgello St. Cebu City Dear Atty. Gonzales: In connection with your letter of 20 June 1994 relative to Civil Case No. R-417, please be informed that you can re(-)file the case at RTC Cebu City and present the official receipt corresponding to the filing fees paid at RTC, Branch 26 San Juan, Southern Leyte.

Thereafter, private respondent presented the letter-reply of Deputy Court Administrator Abesamis to the clerk of court of the RTC (Branch 6) of Cebu City upon re-filing his complaint. On the basis of the aforesaid letter-reply, the clerk of court docketed private respondent's complaint as Civil Case CEB16336 without requiring private respondent to pay anew the prescribed docket fees. On 13 September 1994, petitioner filed a motion to dismiss Civil Case No. 16336 on grounds of lack of jurisdiction and lack of cause of action. Petitioner argued that private respondent "did not pay (even) a single centavo of the P25,000.00 filing fee; hence, the court (RTC of Cebu City, Branch 6) did not acquire jurisdiction over the case."

Filing fees are intended to take care of court expenses in the handling of cases in terms of cost of supplies, use of equipment, salaries and fringe benefits of personnel, etc. computed as to man hours used in handling each case. The payment of said fees therefore cannot be made dependent on the result of the action taken without entailing tremendous losses to the government and to the judiciary in particular. In the cases of Lee v. Republic (10 SCRA 65), Nalimit v. Degamo (12 SCRA 450) and Mogaspi v. Ramolete (115 SCRA 193), we ruled that a case is deemed filed only upon payment of the docket fee regardless of the actual date of filing of the case in court. In 1987, in Manchester Development Corporation v. CA (149 SCRA 564) we further refined the principle, as we ruled, that "a court acquires jurisdiction over any case only upon the payment of the prescribed docket fee", and in order to curb the unethical practice of misleading the docket clerk in the assessment of the correct filing fee, we laid down the rule that "henceforth all complaints, petitions, answers and other similar pleadings should specify the amount of damages being prayed for not only in the body of the pleading but also in the prayer, and said damages shall be considered in the assessment of the filing fees in any case." Two (2) years later, Sun Insurance Office Ltd. v. Hon. Maximiano 9 Asuncion affirmed the basic principle laid down in Manchester but "reduced its stringency somewhat by providing that only those claims as to which the amounts were not specified would be refused acceptance or expunged and that, in any case, the defect was not necessarily fatal or irremediable as the plaintiff could, on motion, be granted a reasonable time within which to amend his complaint and pay the requisite filing fees, unless in the meantime, the period of 10 limitation of the right of action was completed." In that case, the Court en banc laid down the following rules: 1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the prescribed docket fee, that vests a trial court with jurisdiction over the subject-matter or nature of the action. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or reglementary period. 2. The same rule applies to permissive counterclaims, third-party claims and similar pleadings, which shall not be considered filed until and unless the filing fee prescribed therefor is paid. The court may also allow payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or reglementary period. 3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the pleading, or if specified the same has been left for determination by the court, the additional filing fee therefor shall constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court or his duly authorized deputy to enforce said lien and assess and collect the additional fee. It should be stressed, however, that the aforementioned cases all involved under-assessment of the docket fees and from the Court's pronouncements in Sun Insurance, it can be argued that while payment of the prescribed docket fee is a jurisdictional requirement, its non-payment does not automatically cause the dismissal of the case if the non-payment is not beyond the applicable prescriptive or reglementary period. In the case at bar, in the strict sense, private respondent's complaint cannot be deemed to have been "re-filed" in the RTC of Cebu City (Branch 6) because it was not originally filed in the

same court but in the RTC of Southern Leyte (Branch 26). Thus, when private respondent's complaint was docketed as Civil Case No. CEB-16336 by the clerk of court of the RTC Cebu City (Branch 6), it became an entirely separate case from Civil Case No. P-417 that was dismissed by the RTC of Leyte due to improper venue. As far as Civil Case No. P-417 is concerned, while undoubtedly the order of dismissal is not an adjudication on the merits of the case, the order, nevertheless, is a final order. This means that when private respondent did not appeal therefrom, the order became final and executory for all legal intents and purposes. From a procedural point of view, therefore, to "re-file" the case before the same court would be an obvious faux pas. As a remedial measure, the plaintiff whose complaint was dismissed due to improper venue can still file another complaint, but this time in the court of proper venue. Note, however, that the dismissal of the complaint filed in the court of improper venue did not stop the running of the prescriptive period within which to file his complaint in the court of proper venue. Theoretically, the plaintiff may decide to file a complaint containing substantially the same allegations and prayer as the previously dismissed complaint, or he may decide to amend the same and pray for a different relief. In this case, the principle remains unchanged, that is, the court (of proper venue) will only acquire jurisdiction over the case only upon the payment of the prescribed docket fee thereon. Article III, Sec. 11 of the 1987 Constitution states that "Free access to the courts and quasi-judicial bodies and adequate legal assistance shall not be denied to any person by reason of poverty." It is for this reason that under Rule 141, Sec. 16 of the Rules of Court, pauper-litigants are exempted from the payment of court fees, which includes the filing fee in instituting a complaint. Nonetheless, the rule provides that the legal fees shall be a lien on the monetary or property judgment rendered in favor of the pauper-litigant. Private respondent, therefore, has as much "free access" to the courts to seek redress of a wrong because there is no law or rule that prevents him from going to court to file his complaint. But, the rule provides that he must pay the prescribed docket fee because he is neither a pauper-litigant nor a person expressly exempt by the Rules of Court from payment thereof. Consequently, the Deputy Court Administrator committed an error when he stated in his letter reply to private respondent's counsel that he can "re-file the complaint in the RTC Cebu City (Branch 6) and present the official receipt corresponding to the filing fees paid in the RTC Branch 26, San Jose, Southern Leyte." There is no way for the OCA letter to be misinterpreted by Odilao's counsel because the tenor of the letter of Odilao to the OCA dated 20 June 1994 clearly stressed that he was requesting for an authorization (from the OCA) to apply the filing fees he paid in Civil Case No. P-417 to cover the filing fees in a case he intends to file with the RTC of Cebu City (Branch 6). In fact, both the Regional Trial Court of Cebu City (Branch 6) and the Court of Appeals held the opinion that this procedural remedy can be obtained from the Office of the Deputy Court Administrator. As early as 26 February 1991, the Court en banc had issued a 11 resolution containing guidelines on the duties and functions of the Office of the Court Administrator. As a general rule, the Court acts through the Court Administrator in the exercise of its administrative functions. The resolution clearly classified the work attended to by the OCA, either on its responsibility or with the approval of the Court en banc, into the following categories: 1. Judicial discipline of judges and personnel. 2. Administrative interventions in case of management of lower courts, including designation of Executive Judges and detail of judges to other courts. 3. Preparation of draft circulars.

4. Public assistance and information. 5. Personnel administration and 6. Liaison with the Executive and Legislative Departments. From the foregoing enumeration, it is clear that the OCA has neither the power nor the authority to exempt any party not otherwise exempt under the law or under the Rules of Court in the payment of the prescribed docket fees. The principles laid down by this Court in Manchester and in Sun Insurance were formulated en banc, no less than the Constitution mandates that no doctrine or principle laid down by the court in a decision en banc may be modified or reversed except by the court sitting en banc. To now exempt or otherwise authorize private respondent Odilao not to pay the prescribed filing fees would not only be in derogation of this principle but also of the general rule in pleadings, practice and procedure that the mistake of counsel binds his client. In fine, the Court will not allow the office of the Court Administrator to be unduly burdened in futuro with similar letterrequests from litigants for an exemption in the payment of the prescribed docket fees or in private respondent's language, for an authorization to apply the docket fees paid in a dismissed case to cover the docket fees once the case is re-filed in the court of proper venue. In other words, the Court Administrator cannot grant any relief or remedial measure which is beyond his powers and functions. It may be noteworthy to mention here that even in the Supreme Court, there are numerous instances when a litigant has had to re-file a petition previously dismissed by the Court due to a technicality (violation of a pertinent Circular), and in these instances, the litigant is required to pay the prescribed docket fee and not apply to the re-filed case the docket fees paid in the earlier dismissed case. Coming back to the case at bar, and pursuant to the rules laid down by this Court in Sun Insurance, we hold that under the peculiar circumstances of this case private respondent did not really intend to evade the payment of the prescribed docket fee. His counsel simply strayed away from the rules to explore the possibility of an extra legal remedy. Since his case has already been docketed as Civil Case no 16336 in the RTC Branch 6 Cebu City, the procedural remedy of paying the prescribed docket fees is still available to him provided, of course, that the applicable prescriptive or reglementary period has not yet set in. WHEREFORE, premises considered, the decision of the Court of Appeals is hereby SET ASIDE. The Regional Trial Court (Branch 6) Cebu City is hereby ordered to require private respondent to pay the prescribed docket fees in Civil Case No. 16336 as a condition precedent for further hearing the case, after ascertaining at the earliest date practicable from the records that private respondent's complaint has not been barred by prescription at the time it was filed in said court. SO ORDERED. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION

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

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.

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, L26816, 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, L12707, 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 in Bautista 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 SECOND DIVISION

MENDOZA, J.: This is a petition for review on certiorari of the decision, dated September 11, 1995, of the Court of Appeals, which dismissed the special civil action for certiorari filed by petitioner National Steel Corporation (NSC) to set aside the order, dated April 6, 1994, of the Regional Trial Court, Branch LVII, City of Makati. In the said order, the trial court denied the motion of petitioner NSC to dismiss the complaint for recovery of personal property which private respondent Jose P. Jacinto had filed. The facts are as follows: Private respondent Jacinto was the former owner of record of 100 shares of stock of the Manila Golf and Country Club (MGCC) now owned by and registered in the name of petitioner 2 NSC. On February 9, 1990, he filed a complaint against the NSC, alleging that 4. In or about 1970, for valuable considerations, Manila Golf and Country Club, Inc. (MGCCI) issued its Stock Certificate No. 1361 to plaintiff representing 100 shares of MGCCI. 5. From about 1972 up to the early part of February 1986, plaintiff was abroad and could not return to the Philippines for reasons beyond his control. 6. When plaintiff returned to the philippines in 1986, he discovered that Stock Certificate No. 1361 had been cancelled and a replacement Stock Certiftcate had been issued in the name of NSC. 7 The cancellation and transfer of plaintiffs Stock Certificate No. 1361 is void for the reasons that: there was no meeting of minds, there was no specific contract between plaintiff and NSC or any party covering the alleged transfer nor was there any consideration for the same. 8. Despite repeated demands upon NSC to return and re-transfer plaintiff's 100 shares in MGCCI formerly covered by said Stock Certificate No. 1361, NSC failed and refused and still fails and refuses to comply with the same. 9. MGCCI's act in cancelling plaintiffs stock certificate No. 1361 and issuing a replacement certificate in the name of NSC is without basis and illegal considering that there was no valid document evidencing the assignment, sale or transfer by plaintiff to NSC of MGCCI stock certificate No. 1361. 10. In consequence of NSC and MGCCI's illegal act in causing the cancellation and transfer of plaintiff's Stock Certificate No. 1361 unto NSC's name: 10.1. Plaintiff suffered mental anguish for which an award of moral damages of P1 Million is proper; 10.2. Plaintiff was constrained to litigate and secure the services of counsel for a fee of P100,000.00 and for which NSC and MGCCI should be held liable. Based on the foregoing allegations, Jacinto prayed: PRAYER WHEREFOREI it is respectfully prayed that judgment be rendered:
1

G.R. No. 123215 February 2, 1999 NATIONAL STEEL CORPORATION, petitioner, vs. COURT OF APPEALS, HON, ARSENIO J. MAGPALE, and JOSE MA. P. JACINTO, respondents.

1. Ordering NSC to execute a deed of assignment retransferring unto plaintiff the MGCCI certificate issued to the former in replacement of Stock Certificate No. 1361 and to surrender said Deed of Assignment, together with the MGCCI certificate issued to NSC (in replacement of Stock Certificate No. 1361) for cancellation thereof and to order MGCCI to cancel said stock certificate and issue a new one in the name of Jose Ma. P. Jacinto: 2. If for any reason whatsoever NSC fails or refuses to execute the deed of assignment and surrender NSC's replacement stock certificate, MGCCI be ordered to: 2.1 Cancel in its stock and transfer book the stock certificate issued to NSC issued in replacement of certificate No. 1361; 2.2 Issue a new stock certificate in the name of NSC or the stock certificate that might have been issued in replacement thereof; 2.3 Declare as lost and of no force and effect the MGCCI stock certificate now outstanding and registered in the name of NSC. 3. Ordering NSC and MGCCI to pay plaintiff, jointly and severally: 3.1 P1 Million as moral damages ; and 3.2 P100.000.00 as attorney's fees. Other reliefs are also prayed for.
3

6. The failure of plaintiff to pay the correct filing fees on February 13, 1990 meant that this court did not acquire jurisdiction over plaintiffs action. Under the ruling of Sun Insurance, and as explained below, the plaintiff cannot now pay the deficiency in the filing fees because it is already "beyond the applicable prescriptive or reglementary period." The trial court denied petitioner's motion in an order, dated April 6, 1994. Hence, the latter brought a special civil action for certiorari in the Court of Appeals, but its petition was dismissed on September 11, 1995. The principal relief, or prayer in private respondent's complaint is specific, for the "NSC to execute a deed of assignment re-transferring unto plaintiff the MGCCI certificate . . . in replacement of stock certificate No. 1861 . . . . There is no allegation in the complaint of any quantified amount and/or of the actual value of the stock certificate in question. There is also no separate cause of action and/or prayer in the face of the complaint that private respondent, even in the alternative, prayed that if the principal relief is unavailing, that defendants be ordered to pay him the actual or equivalent value of the stock certificate, hence there is even no reason or basis to move for a more definite statement or for a bill of particulars of any matter which is not averred in the complaint with sufficient definiteness or particularity to enable petitioner to properly prepare for a more responsive pleading or to prepare for trial. xxx xxx xxx

Petitioner NSC sought the dismissal of the complaint on the ground of prescription, but its motion was denied by the trial court in an order, dated November 9, 1990. Petitioner NSC brought a special civil action for certiorari in the Court of Appeals, but again its petition was dismissed by the appellate court on August 30, 1991. Its attempt to secure review in this Court failed as its petition was dismissed in a resolution, dated March 18, 1992. Petitioner NSC then filed its answer, after which trial was held. It 4 thereafter filed a motion to dismiss the complaint against it on the ground of lack of jurisdiction. It alleged: Plaintiff paid docket and other fees totalling P4,040.00. The certification of Clerk of Court Ma. Corazon Cecelia P. Cuba is attached as Annex A. 2 Under Sec. 7(a) of Rule 141, as amended by the Resolution of the Supreme Court En Banc dated September 4, 1990, the docket fees "for filing an action . . . . is P600 for the first P150,000.00 and P5.00 for each P1,000.00 in excess of P150,000.00. 3. The actual value of the MGCCI share certificate as of February, 1990, when the complaint was filed, was P5,511,000.00. A certification issued by the MGCCI attesting to the fair market value of a MGCCI share is attached as Annex B. 4. This means that the correct docket fee for the filing of plaintiff's complaint is approximately P26,805.00 and not P4,040.00 which is the amount plaintiff actually paid. xxx xxx xxx

Perspicaciously, what should guide the office of the Clerk of Court, Regional Trial Court, Makati, Metro Manila, in assessing the, correct docket fees for the filing of the complaint in Civil Case No. 90-4051, when it was filed on February 13, 1990, is what is alleged and prayed for in the complaint. It would be uncalled for and baseless for the clerk of court to consider at that point in time the supposed "actual value of the MGCCI share certificate as of February, 1990, . . . (in the amount of) P5,511000.00", and then and there assess an additional docket fee of P22,765.00 (P26,805.00 minus P4,040.00), precisely because the said sum of "P5,511,000.00" is not alleged in the body of the complaint, and which is not also sought to be recovered in the action. There can be no divergence of opinion from the allegations, designation and the reliefs prayed for, as clearly and definitely spelled out in the face of the complaint, that private respondent's principal relief is for petitioner NSC "to execute a deed of assignment retransferring unto plaintiff the MGCCI certificate issued to the former in replacement of stock certificate No. 1861 . . . . And there also appears to be no hint of any intention on the part of private respondent to mislead the clerk of court in assessing the correct fees, or to evade the payment of the correct fees. Hence, this petition raising the following assignment of errors: Assignment of Errors THE RESPONDENT COURT OF APPEALS ERRED IN CHARACTERIZING THE NATURE OF PRIVATE RESPONDENT'S ACTION AS ONE FOR SPECIFIC PERFORMANCE AND NOT ONE FOR RECOVERY OF PROPERTY.

THE RESPONDENT COURT OF APPEALS ERRED IN REFUSING TO TAKE COGNIZANCE OF THE TACAY [v. Regional Trial Court, 180 SCRA 433 (1989)] AND BPI CREDIT [v. Court of Appeals, 204 SCRA 601 (1991)] RULINGS. THE RESPONDENT COURT OF APPEALS ERRED IN NOT FINDING THAT THE LOWER COURT FAILED TO ACQUIRE JURISDICTION OVER PRIVATE RESPONDENT'S COMPLAINT DUE TO NONPAYMENT OF THE REQUIRED FILING FEES. Petitioner NSC correctly argues that the action in this case is for the recovery of property rather than for specific performance and, hence, the docket fee should be based on the value of the property sought to be recovered. It is similar to an action in which petitioner seeks the execution of a deed of sale of a parcel of land in his favor. Such action has been held to be for the recovery of the real property and nor for specific performance since his primary objective is to regain the ownership and possession of the parcel of land. In Ruiz v. J.M. 5 Tuason & Co., Inc., it was held: Appellant contends that the present action is transitory because it is one for specific performance and its object is to compel J. M. Tuason & Co., Inc, to execute a final deed of sale of the property in question in favor of appellant founded upon compliance with the compromise agreement wherein said company recognized the sale made by Florencio Deudor of said property in favor of Jose Dinglasan who, in the same agreement, was recognized by the company as a purchaser who had already made partial payment of the purchased price of the land. This contention has no merit. Although appellant's complaint is entitled to be one for specific performance, yet the fact that he asked that a deed of sale of a parcel of land situated in Quezon City be issued in his favor and that a transfer certiticate of title covering said land be issued to him shows that the primary objective and nature of the action is to recover the parcel of land itself because to execute in favor of appellant the conveyance requested there is need to make a finding that he is the owner of the land which in the last analysis resolves itself into an issue of ownership. Similarly, if as in this case, plaintiff herein private respondent Jacinto, seeks the execution in his favor of a deed of assignment of shares of stock, it follows that the action is for recovery of personal property, the main purpose of which is to regain the ownership and possession of the said shares of stock. Accordingly, as petetioner NSC contends private respondent Jacinto should pay docket fees based on the value of the shares of stock and the amount of damages he seeks to recover. Under Rule 141, 7(a) of the Rules of Court as it stood at the time of the filing of the complaint against petitioner, docket fees for ordinary civil actions should be based on the total sum claimed, exclusive of interest, or the stated value of 6 the property in litigation. Thus, the docket fees should be computed on the basis on the value of the property and the amount of related damages claimed, exclusive of interest. As 7 we held in Tacay v. Regional Trial Court, where the action involves real property and a related claim for damages as well, the legal fees shall be assessed on the basis of both (a) the value of the property and (b) the total amount of related damages sought. The Court acquires jurisdiction over the action if the filing of the initiatory pleading is accompanied by the payment of the requisite fees, or, if the fees are not paid at the time of the filing of the pleading, as of the time of full payment of the fees within such reasonable time as the court may grant, unless, of course, prescription has set in the meantime.

It does not follow, however, that the trial court should have dismissed the complaint for failure of private respondent to pay the correct amount of docket fees. Although the payment of the proper docket fees is a jurisdictional requirement, the trial court may allow the plaintif in an action to pay the same within a reasonable time before the expiration of the applicable 8 prescriptive or reglementary period. If the plaintiff fails to comply with this requirement, the defendant should timely raise the issue of jurisdiction or else he would be considered in estoppel. In the latter case, the balance between the appropriate docket fees and the amount actually paid by the plaintiff will be considered a lien on any award he may obtain in his favor. Thus, in Pantranco North Express, Inc. v. Court of 9 Appeals, we held: The petitioner raised the issue regarding jurisdiction for the first time in its Brief filed with the public respondent in CA-G.R. CV No. 26220 on 2 February 1991. After vigorously participating in all stages of the case before the trial court's authority authority in order to ask for affirmative relief, the petitioner is effectively barred by estoppel from challenging the trial court's jurisdiction. Although the issue of jurisdiction may be raised at any stage of the proceedings as the same is conferred by law, it is nonetheless settled that a party may be barred from raising it on ground of laches or estoppel. The deficiency in the payment of the docket fees must, however, be considered a lien on the judgment which must be remitted to the clerk of court of the court a quo upon the execution of the judgment. In the case at bar, petitioner NSC filed in 1990 a motion to dismiss but did not raise this point. Instead it based his motion on prescription. Upon the denial by the trial court of its motion to dismiss, it filed an answer, submitted its pre-trial brief, and participated in the proceedings before the trial court. It was only in 1993 more than three years after filing its motion to dismiss that petitioner NSC again filed a motion to dismiss the action on the ground of lack of jurisdiction. Clearly, petitioner is estopped from raising this issue. Indeed, while the lack of jurisdiction of a court may be raised at any stage of an action, nevertheless, the party raising such question may be estopped if he has actively taken part in the very proceedings which he questions and he only objects to the court's jurisdiction because the judgment or the order subsequently 10 rendered is adversed to him. WHEREFORE, the decision of the Court of Appeals, dated September 11, 1995, is AFFIRMED. The deficiency in the payment of the docket fees shall be a lien on any judgment may be rendered in favor of private respondent Jose P. Jacinto. SO ORDERED. Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-25547 November 27, 1967

JUAN M. SERRANO and SILVER LINERS, INC., plaintiffsappellants, vs. MUOZ (HI) MOTORS INC., DM TRANSIT CORPORATION, BENITO MACROHON, as Sheriff of Quezon City, and ENRIQUE MEDINA, as Public Service Commissioner, defendants-appellees. Ramon C. Fernandez for plaintiff-appellant. Barin, Tanay and Medina for defendants Muoz (Hi) Motors, Inc. and DM Transit Corporation.

CASTRO, J.: The fundamental issue in this appeal is whether the Court of First Instance of Quezon City has jurisdiction over civil case 8835 before it. Disavowing jurisdiction, the court, in two separate orders on July 19 and September 21, 1965, dismissed the complaint against all the defendants. (Enrique Medina of the Public Service Commission, Muoz (Hi) Motors, Inc., DM Transit Corporation, and Benito Macrohon as Sheriff of Quezon City), with costs against the plaintiffs Juan M. Serrano and the Silver Liners, Inc. According to the allegations of the complaint, Juan M. Serrano was granted by the Public Service Commission (PSC) in case 83104 a certificate of public convenience to operate in Manila 1 and Quezon City eight auto-trucks for passengers and freight. On August 22, 1963 Serrano mortgaged this certificate to Muoz (Hi) Motors, Inc. (hereinafter referred to as the MHMI), as additional collateral to secure an indebtedness on account of the purchase of four buses. The parties to this chattel mortgage thereafter applied to the PSC for approval thereof. At the instance of the MHMI, the sheriff of Quezon City foreclosed the 2 chattel mortgage of October 24, 1961 and that of August 22, 1963, and, on October 31, 1964. executed a certificate of sale in favor of the MHMI as the highest bidder. On January 7, 1965 the MHMI sold some units and certificates of public convenience, among them, the certificate granted to Serrano in PSC case 83104, to the DM Transit Corporation (hereinafter referred to as the DMTC). Acting on the petition filed jointly by the MHMI and the DMTC on January 22, 1965, the PSC, thru Commissioner Medina, in an order issued March 4, 1965, provisionally approved the said sale, and authorized the DMTC to operate "under the provisional authority here granted." Serrano moved to have this order set aside. On March 26, 1965 Serrano sold to the Silver Liners, Inc. (hereinafter referred to as the SLI) the line he was authorized to operate by virtue of the certificate of public convenience issued in PSC case 83104, and authorized the latter to file with the PSC the corresponding application for approval of the said sale. On April 5, 1965 Commissioner Medina issued an order in the following tenor: [t]he certificate of sale clearly mentions the units operated, by the judgment-debtor but does not mention that the franchise or certificates of public convenience for the operation of said units are also included in the sale. In view, however, of the manifestation of counsel for DM Transit and Muoz (Hi) Motors, Inc., to the effect that the certificate of public convenience was included in the notice of sale and that it was the intention of the Sheriff (who is now present in open Court), to sell also the franchise, the Commission believes that in fairness to all, the hearing of this case should be postponed until JUNE 15, 1965, at 9.00 a.m., to give all the parties sufficient and ample opportunity to present their evidence, pro and con, in support of their respective allegations, and for the Sheriff, if necessary, to make the corrections if any error has been committed. At the instance of the MHMI the sheriff of Quezon City "once more announced the foreclosure of the chattel mortgages dated October 24, 1961 and August 22, 1963," and the sale of, among others, "the certificate of public convenience issued in PSC Case No. 83104," to be held on June 14, 1965. In view of this development, Serrano and the SLI on June 9, 1965, filed the present complaint the pertinent and important portions of which read: 6. That the plaintiff, Juan M. Serrano, and the defendant, Muoz (HI) Motors, Inc., filed the corresponding application for the approval of the chattel mortgage of said certificate with the Public Service

Commission. However, before the Public Service Commission could decide the application, the plaintiff, Juan, M. Serrano, filed a motion withdrawing the same on the ground that the mortgagee, Defendant Muoz (HI) Motors, Inc., had violated their agreement. Until now the Public Service Commission has not acted on the application for approval of the chattel mortgage of the certificate of public convenience. Neither has it acted on the motion of Juan M. Serrano to withdraw the application. xxx xxx xxx

11. That the issuance of the provisional approval, Exhibit "C", presupposes the existence of a sale and transfer of the certificate of public convenience issued in Case No. 83104 by the Sheriff of Quezon City to Muoz (HI) Motors, Inc., which is not a fact. Hence the defendant, Enrique Medina, is liable for damages for the issuance of the provisional approval, Exhibit "C", under Art. 32 of the Civil Code of the Philippines because the plaintiff, Juan M. Serrano, was deprived of his property without due process of law. xxx xxx xxx

14. That the announced sale on June 14, 1965 is at once illegal and violative of the rights of the plaintiffs. Unless immediately restrained by this Honorable Court with the issuance ex parte of a writ of preliminary injunction, the plaintiff will suffer great and irreparable injury in addition to what they, especially Juan M. Serrano, have already suffered by reason of the acts above complained of. 15. That as a consequence of the issuance of the provisional approval, Exhibit "C", on March 4, 1965 the plaintiffs have been unable to operate the eight (8) units attached to the certificate of public convenience issued in Case No. 83104 and the plaintiff, Juan M. Serrano, has been unable to substitute four (4) of said units as shown by the order of the Public Service Commission in Case No. 65-2654, a certified copy of which being attached as Exhibit "F". xxx xxx xxx

WHEREFORE, it is respectfully prayed that judgment be rendered in favor of the plaintiffs and against the defendants by restraining permanently the defendant, Sheriff of Quezon City and his deputies from again foreclosing the chattel mortgages of October 24, 1561 and August 22, 1963 and selling at public auction the chattels mortgaged, especially the certificate of public convenience issued in Case No. 83104, and ordering the defendants, to pay jointly and severally, the plaintiffs the following: (a) Actual damages in the amount of P50,390.00 as of June 8, 1965 and daily thereafter at the rate of P560.00; (b) Moral damages to Juan M. Serrano in the amount of P10,000.00; (c) Exemplary damages in such amount as may be fixed by the Honorable Court; (d) Attorney's fees in the amount of P10,000.00; and the costs. It is further prayed that there be issued ex parte immediately a writ of preliminary injunction restraining the defendant, Sheriff of Quezon City and his deputies, from proceeding with the announced sale

on June 14, 1965 of the chattels enumerated in Exhibit "E". Acting on the complaint and on an urgent motion subsequently filed by the plaintiffs for the issuance of an ex partewrit of preliminary injunction, the court directed the parties to maintain the status quo upon the filing by the plaintiffs of a P5,000 bond, and set the motion for hearing on June 26, 1965. The defendants opposed the motion. Commissioner Medina, on June 22, 1965, moved for the dismissal of the complaint against him on three grounds: that the CFI has no jurisdiction over not only the subject matter of the action but as well his person as Public Service Commissioner; that the complaint states no cause of action against him; and that "Article 32 of the Civil Code is not applicable to judicial orders." The rest of the defendants, on the following day, June 23, filed their answer, in which they alleged, among other things, that the certificate of public convenience issued in PSC case 83104 is included in the chattel mortgage of August 22, 1963; that the PSC had in fact approved the said mortgage; that the said certificate was actually included in the foreclosure sale conducted by the sheriff of Quezon City, although the latter, through inadvertence, failed to mention it in the certificate of sale of October 31, 1964; and that the MHMI has requested the sheriff "to conduct another foreclosure sale in order to supplement and correct the first one." They further alleged that the complaint states no cause of action, and that the plaintiffs are in estoppel and guilty of laches. They accordingly prayed that the complaint be dismissed as against them, and that the sheriff of Quezon City be ordered to proceed with the foreclosure sale. The plaintiffs, on July 8, 1965, opposed the motion to dismiss filed by Commissioner Medina. By its order of July 19, 1965 the CFI dismissed the complaint as against Commissioner Medina. The plaintiffs moved to have this order set aside or clarified, because it did not specify any ground for the dismissal. Per its order of August 23, 1965 the CFI held in abeyance consideration of the plaintiffs' prayer for preliminary injunction, to afford the plaintiffs opportunity to file a motion for reconsideration of the order of July 19, and to give the rest of the defendants equal opportunity to file motions to dismiss, "so that the court can make a clear cut ruling on the question of jurisdiction over the instant case." On August 24, 1965 the MHMI and the DMTC moved to dismiss the complaint on the ground that the court has no jurisdiction over the subject- matter of the action. The plaintiffs thereafter filed their opposition. On September 21, 1965 the CFI dismissed the complaint for lack of jurisdiction over the subject-matter thereof; on the following October 16, it denied the plaintiffs' motion to set aside the order. Hence the present recourse. In Perez Cardenas vs. Camus, we held that jurisdiction over the subject-matter is determined by the allegations of the complaint, irrespective of whether or not the plaintiff is entitled to recover upon all or some of the claims asserted therein a matter that can be resolved only after and as a result of the trial. Nor may the jurisdiction of the court be made to depend upon the defenses set up in the answer or upon the motion to dismiss, for, were we to be governed by such rule, the question of jurisdiction would depend almost entirely upon the defendant. As can be gleaned from the portions of the complaint hereinbefore quoted, namely, paragraph 11 in relation to paragraph 15, and paragraph 6 in relation to paragraph 14, three distinct issues present themselves for resolution. 1. Paragraphs 11 and 15 squarely assail the PSC order of March 4, 1965. According to the appellants, this order
3

"presupposes the existence of a sale and transfer of the certificate of public convenience issued in Case No. 83104 by the Sheriff of Quezon City to Muoz (Hi) Motors, Inc., which is not a fact", because the said certificate of public convenience was not mentioned in the sheriff's certificate of sale of October 31, 1964; the PSC order approving provisionally the sale by the MHMI in favor of the DMTC, of, among others, the said certificate, and authorizing the latter to operate the line covered thereby, thus deprived Serrano of his property "without due process of law", and prevented the appellants from operating the eight units attached to the said certificate and Serrano from substituting four of the said units. In sum, therefore, paragraphs 11 and 15 assail the PSC order on March 4, 1965 as erroneous because the MHMI could not have legally transferred the certificate of public convenience in question to the DMTC for the reason that the sheriff's certificate of sale of October 31, 1964 did not include the said certificate of public convenience among the properties sold to the MHMI in the foreclosure sale. It is our view that the resolution of this aspect of the case falls within the exclusive province of the PSC. Under section 20(g) of the Public Service Law, the PSC is the body invested with the power and authority to approve a sale or transfer of a certificate of public convenience. And we 5 emphasized in Garcia vs. Bonifacio, et al., that [i]f as appellant represents, the certificate sold to him was later illegally transferred to Pea, who now holds the commission's approval and certificate, there is no better place than the commission itself to thresh out the respective rights of the parties , bearing in mind that said Commission is the only entity empowered to withdraw the certificate from Pena and to transfer it to herein plaintiff or grant him a new certificate. We have indeed sustained the power and authority of the PSC (a) to approve provisionally the transfer of a certificate of public convenience where the conditions laid down by section 20(g) 6 are satisfied, and (b) to grant provisional authority to a vendee to operate a franchise pending determination of the legality of 7 the sale. Entirely apart from the above considerations, we note from the order of March 4, 1965 that Serrano has filed an "urgent motion to set (it) aside". Orderly procedure demands that the PSC pass upon this phase of the controversy; from an adverse resolution 8 thereon, the appellants may yet appeal to this Court. [t]he commission having jurisdiction to determine whether a corporation has the right to do or not to do a thing for which the commission's approval is sought, orderly procedure requires that the commission pass upon that phase of the controversy before the court adjudge it. The obvious reason for this is stated in St. Clair Borough v. Tomaqua & Pottsville Elec. Ry. Co., 259 Pa. 462, 103 A. 287, 289, 5 A.L.R. 20: "Otherwise different phases of the same case might be pending before the commission and the courts at one time, 9 which would cause endless confusion." The order of the PSC did not deprive Serrano of his 10 property "without due process of law". The order is provisional in nature, "may be modified or revoked by the Commission at 11 any time", is "subject to whatever action that may be taken on the basic application" for the sale and transfer filed by the MHMI in favor of the DMTC, and is "valid only during the pendency of said application" but not beyond SIX (6) MONTHS from the date hereon (March 4, 1965)," which period, by the way, has already expired. Neither were the appellants deprived of their day in court. For, the PSC, in its order of April 5, 1965, clearly stated that "in fairness to all" and "to give all the parties sufficient and ample opportunity to present their evidence, pro and con, in
4

support of their respective allegations", "the hearing of this case should be postponed until June 15, 1965, at 9:00 a.m." 2. The CFI likewise did not err in dismissing the complaint, even if it prayed for damages against Commissioner Medina, for failure to state a sufficient cause of action. Article 32 of the Civil Code, relied upon by the appellants in support of their claim for damages, provides in its last paragraph that the responsibility for damages "herein set forth is not demandable from a judge unless his act or omission constitutes a violation of the Penal Code or other penal statute." We do not now decide as we believe we are not called upon to do so whether article 32 of the Civil Code may be utilized as the legal basis of an action for damages against a PSC commissioner. But assuming that the said provision of law does authorize recovery of damages from a member of the PSC in proper cases, the dismissal must yet be sustained. Nowhere does the complaint allege that, in issuing the order of March 4, 1965, Commissioner Medina did so in violation of the Revised Penal Code or any other penal statute. It does not charge him with knowingly rendering an 12 unjust judgment, or rendering an unjust judgment by reason of 13 inexcusable negligence or ignorance, or knowingly rendering 14 an unjust interlocutory order or decree, or transgressing any other penal law. 3. Finally, the CFI did not err in dismissing the complaint against the rest of the defendants. The complaint does not state a cause of action against them. Paragraph 6 thereof alleges that Serrano filed a motion with the PSC withdrawing the application filed by him and the MHMI for approval of the chattel mortgage over the certificate of public convenience in question, "on the ground that the mortgagee, Defendant Muoz (HI) Motors, Inc., had violated their agreement", and, on that basis, paragraph 14 asserts that "the announced sale on June 14, 1965 is at once illegal and violative of the rights of the plaintiffs", and that if the sheriff of Quezon City be not immediately restrained from proceeding with the intended foreclosure and sale of the said certificate, they "will suffer great and irreparable injury". These averments are altogether too imprecise and therefore cannot be dignified as constituting a legally sufficient statement of the "ultimate facts" required in the formulation of a cause of action; they are at best mere conclusions of law which, obviously, 15 cannot take the place of "ultimate facts." ACCORDINGLY, the orders of July 19 and September 21, 1965, dismissing the complaint, are affirmed, at plaintiffsappellants' cost. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION

de Villa vs. Judge Job B. Madayag, etc. and Roberto Z. Lorayes," dismissing the petition for certiorari filed therein. The factual backdrop of this case, as found by the Court of Appeals, is as follows: On October 5, 1987, petitioner Cecilio S. de Villa was charged before the Regional Trial Court of the National Capital Judicial Region (Makati, Branch 145) with violation of Batas Pambansa Bilang 22, allegedly committed as follows: That on or about the 3rd day of April 1987, in the municipality of Makati, Metro Manila, Philippines and within the jurisdiction of this Honorable Court, the above-named accused, did, then and there willfully, unlawfully and feloniously make or draw and issue to ROBERTO Z. LORAYEZ, to apply on account or for value a Depositors Trust Company Check No. 3371 antedated March 31, 1987, payable to herein complainant in the total amount of U.S. $2,500.00 equivalent to P50,000.00, said accused well knowing that at the time of issue he had no sufficient funds in or credit with drawee bank for payment of such check in full upon its presentment which check when presented to the drawee bank within ninety (90) days from the date thereof was subsequently dishonored for the reason "INSUFFICIENT FUNDS" and despite receipt of notice of such dishonor said accused failed to pay said ROBERTO Z. LORAYEZ the amount of P50,000.00 of said check or to make arrangement for full payment of the same within five (5) banking days after receiving said notice. After arraignment and after private respondent had testified on direct examination, petitioner moved to dismiss the Information on the following grounds: (a) Respondent court has no jurisdiction over the offense charged; and (b) That no offense was committed since the check involved was payable in dollars, hence, the obligation created is null and void pursuant to Republic Act No. 529 (An Act to Assure Uniform Value of Philippine Coin and Currency). On July 19, 1988, respondent court issued its first questioned orders stating: Accused's motion to dismiss dated July 5, 1988, is denied for lack of merit. Under the Bouncing Checks Law (B.P. Blg. 22), foreign checks, provided they are either drawn and issued in the Philippines though payable outside thereof, or made payable and dishonored in the Philippines though drawn and issued outside thereof, are within the coverage of said law. The law likewise applied to checks drawn against current accounts in foreign currency. Petitioner moved for reconsideration but his motion was subsequently denied by respondent court in its order dated September 6, 1988, and which reads: Accused's motion for reconsideration, dated August 9, 1988, which was opposed by the prosecution, is denied for lack of merit. The Bouncing Checks Law is applicable to checks drawn against current accounts in foreign currency (Proceedings of the Batasang Pambansa, February 7, 1979, p. 1376, cited in Makati RTC Judge (now Manila City Fiscal) Jesus F. Guerrero's The Ramifications of the Law on Bouncing Checks, p. 5). (Rollo, Annex "A", Decision, pp. 20-22).

G.R. No. 87416 April 8, 1991 CECILIO S. DE VILLA, petitioner, vs. THE HONORABLE COURT OF APPEALS, PEOPLE OF THE PHILIPPINES, HONORABLE JOB B. MADAYAG, and ROBERTO Z. LORAYES, respondents. San Jose Enriquez, Lacas Santos & Borje for petitioner. Eduardo R. Robles for private respondent.

PARAS, J.:p This petition for review on certiorari seeks to reverse and set aside the decision * of the Court of Appeals promulgated on February 1, 1989 in CA-G.R. SP No. 16071 entitled "Cecilio S.

A petition for certiorari seeking to declare the nullity of the aforequoted orders dated July 19, 1988 and September 6, 1988 was filed by the petitioner in the Court of Appeals wherein he contended: (a) That since the questioned check was drawn against the dollar account of petitioner with a foreign bank, respondent court has no jurisdiction over the same or with accounts outside the territorial jurisdiction of the Philippines and that Batas Pambansa Bilang 22 could have not contemplated extending its coverage over dollar accounts; (b) That assuming that the subject check was issued in connection with a private transaction between petitioner and private respondent, the payment could not be legally paid in dollars as it would violate Republic Act No. 529; and (c) That the obligation arising from the issuance of the questioned check is null and void and is not enforceable with the Philippines either in a civil or criminal suit. Upon such premises, petitioner concludes that the dishonor of the questioned check cannot be said to have violated the provisions of Batas Pambansa Bilang 22. (Rollo, Annex "A", Decision, p. 22). On February 1, 1989, the Court of Appeals rendered a decision, the decretal portion of which reads: WHEREFORE, the petition is hereby dismissed. Costs against petitioner. SO ORDERED. (Rollo, Annex "A", Decision, p. 5) A motion for reconsideration of the said decision was filed by the petitioner on February 7, 1989 (Rollo, Petition, p. 6) but the same was denied by the Court of Appeals in its resolution dated March 3, 1989 (Rollo, Annex "B", p. 26). Hence, this petition. In its resolution dated November 13, 1989, the Second Division of this Court gave due course to the petition and required the parties to submit simultaneously their respective memoranda (Rollo, Resolution, p. 81). The sole issue in this case is whether or not the Regional Trial Court of Makati has jurisdiction over the case in question. The petition is without merit. Jurisdiction is the power with which courts are invested for administering justice, that is, for hearing and deciding cases (Velunta vs. Philippine Constabulary, 157 SCRA 147 [1988]). Jurisdiction in general, is either over the nature of the action, over the subject matter, over the person of the defendant, or over the issues framed in the pleadings (Balais vs. Balais, 159 SCRA 37 [1988]). Jurisdiction over the subject matter is determined by the statute in force at the time of commencement of the action (De la Cruz vs. Moya, 160 SCRA 538 [1988]). The trial court's jurisdiction over the case, subject of this review, can not be questioned. Sections 10 and 15(a), Rule 110 of the Rules of Court specifically provide that: Sec. 10. Place of the commission of the offense. The complaint or information is sufficient if it can be understood therefrom that the offense was committed

or some of the essential ingredients thereof occured at some place within the jurisdiction of the court, unless the particular place wherein it was committed constitutes an essential element of the offense or is necessary for identifying the offense charged. Sec. 15. Place where action is to be instituted. (a) Subject to existing laws, in all criminal prosecutions the action shall be instituted and tried in the court of the municipality or territory where the offense was committed or any of the essential ingredients thereof took place. In the case of People vs. Hon. Manzanilla (156 SCRA 279 [1987] cited in the case of Lim vs. Rodrigo, 167 SCRA 487 [1988]), the Supreme Court ruled "that jurisdiction or venue is determined by the allegations in the information." The information under consideration specifically alleged that the offense was committed in Makati, Metro Manila and therefore, the same is controlling and sufficient to vest jurisdiction upon the Regional Trial Court of Makati. The Court acquires jurisdiction over the case and over the person of the accused upon the filing of a complaint or information in court which initiates a criminal action (Republic vs. Sunga, 162 SCRA 191 [1988]). Moreover, it has been held in the case of Que v. People of the Philippines (154 SCRA 160 [1987] cited in the case of People vs. Grospe, 157 SCRA 154 [1988]) that "the determinative factor (in determining venue) is the place of the issuance of the check." On the matter of venue for violation of Batas Pambansa Bilang 22, the Ministry of Justice, citing the case of People vs. Yabut (76 SCRA 624 [1977], laid down the following guidelines in Memorandum Circular No. 4 dated December 15, 1981, the pertinent portion of which reads: (1) Venue of the offense lies at the place where the check was executed and delivered; (2) the place where the check was written, signed or dated does not necessarily fix the place where it was executed, as what is of decisive importance is the delivery thereof which is the final act essential to its consummation as an obligation; . . . (Res. No. 377, s. 1980, Filtex Mfg. Corp. vs. Manuel Chua, October 28, 1980)." (See The Law on Bouncing Checks Analyzed by Judge Jesus F. Guerrero, Philippine Law Gazette, Vol. 7. Nos. 11 & 12, October-December, 1983, p. 14). It is undisputed that the check in question was executed and delivered by the petitioner to herein private respondent at Makati, Metro Manila. However, petitioner argues that the check in question was drawn against the dollar account of petitioner with a foreign bank, and is therefore, not covered by the Bouncing Checks Law (B.P. Blg. 22). But it will be noted that the law does not distinguish the currency involved in the case. As the trial court correctly ruled in its order dated July 5, 1988: Under the Bouncing Checks Law (B.P. Blg. 22), foreign checks, provided they are either drawn and issued in the Philippines though payable outside thereof . . . are within the coverage of said law. It is a cardinal principle in statutory construction that where the law does not distinguish courts should not distinguish. Parenthetically, the rule is that where the law does not make any exception, courts may not except something unless compelling reasons exist to justify it (Phil. British Assurance Co., Inc. vs. IAC, 150 SCRA 520 [1987]).

More importantly, it is well established that courts may avail themselves of the actual proceedings of the legislative body to assist in determining the construction of a statute of doubtful meaning (Palanca vs. City of Manila, 41 Phil. 125 [1920]). Thus, where there is doubts as to what a provision of a statute means, the meaning put to the provision during the legislative deliberation or discussion on the bill may be adopted (Arenas vs. City of San Carlos, 82 SCRA 318 [1978]). The records of the Batasan, Vol. III, unmistakably show that the intention of the lawmakers is to apply the law to whatever currency may be the subject thereof. The discussion on the floor of the then Batasang Pambansa fully sustains this view, as follows: xxx xxx xxx THE SPEAKER. The Gentleman from Basilan is recognized. MR. TUPAY. Parliamentary inquiry, Mr. Speaker. THE SPEAKER. The Gentleman may proceed. MR. TUPAY. Mr. Speaker, it has been mentioned by one of the Gentlemen who interpellated that any check may be involved, like U.S. dollar checks, etc. We are talking about checks in our country. There are U.S. dollar checks, checks, in our currency, and many others. THE SPEAKER. The Sponsor may answer that inquiry. MR. MENDOZA. The bill refers to any check, Mr. Speaker, and this check may be a check in whatever currency. This would not even be limited to U.S. dollar checks. The check may be in French francs or Japanese yen or deutschunorhs. (sic.) If drawn, then this bill will apply. MR TUPAY. So it include U.S. dollar checks. MR. MENDOZA. Yes, Mr. Speaker. xxx xxx xxx (p. 1376, Records of the Batasan, Volume III; Emphasis supplied). PREMISES CONSIDERED, the petition is DISMISSED for lack of merit.

CARPIO, J.: The Case Before the Court is a petition for review on certiorari assailing 2 3 the Orders dated 8 September 2006 and 13 February 2007 of the Regional Trial Court (RTC) of Tacloban City, Branch 34, in Civil Case No. 2001-10-161. The Facts Juanita Padilla (Juanita), the mother of petitioners, owned a piece of land located in San Roque, Tanauan, Leyte. After Juanitas death on 23 March 1989, petitioners, as legal heirs of Juanita, sought to have the land partitioned. Petitioners sent word to their eldest brother Ricardo Bahia (Ricardo) regarding their plans for the partition of the land. In a letter dated 5 June 1998 written by Ricardo addressed to them, petitioners were surprised to find out that Ricardo had declared the land for himself, prejudicing their rights as co-heirs. It was then discovered that Juanita had allegedly executed a notarized 4 Affidavit of Transfer of Real Property (Affidavit) in favor of Ricardo on 4 June 1966 making him the sole owner of the land. The records do not show that the land was registered under the Torrens system. On 26 October 2001, petitioners filed an action with the RTC of Tacloban City, Branch 34, for recovery of ownership, possession, partition and damages. Petitioners sought to declare void the sale of the land by Ricardos daughters, Josephine Bahia and Virginia Bahia-Abas, to respondent Dominador Magdua (Dominador). The sale was made during the lifetime of Ricardo. Petitioners alleged that Ricardo, through misrepresentation, had the land transferred in his name without the consent and knowledge of his co-heirs. Petitioners also stated that prior to 1966, Ricardo had a house constructed on the land. However, when Ricardo and his wife Zosima separated, Ricardo left for Inasuyan, Kawayan, Biliran and the house was leased to third parties. Petitioners further alleged that the signature of Juanita in the Affidavit is highly questionable because on 15 May 1978 Juanita executed a written instrument stating that she would be leaving behind to her children the land which she had inherited from her parents. Dominador filed a motion to dismiss on the ground of lack of jurisdiction since the assessed value of the land was within the jurisdiction of the Municipal Trial Court of Tanauan, Leyte. In an Order dated 20 February 2006, the RTC dismissed the case for lack of jurisdiction. The RTC explained that the assessed value of the land in the amount of P590.00 was less than the amount cognizable by the RTC to acquire jurisdiction 6 over the case. Petitioners filed a motion for reconsideration. Petitioners argued that the action was not merely for recovery of ownership and possession, partition and damages but also for annulment of deed of sale. Since actions to annul contracts are actions beyond pecuniary estimation, the case was well within the jurisdiction of the RTC. Dominador filed another motion to dismiss on the ground of prescription. In an Order dated 8 September 2006, the RTC reconsidered its previous stand and took cognizance of the case. Nonetheless, the RTC denied the motion for reconsideration and dismissed the case on the ground of prescription pursuant to Section 1, Rule 9 of the Rules of Court. The RTC ruled that the case was filed only in 2001 or more than 30 years since the Affidavit was executed in 1966. The RTC explained that while the right of an
5 1

Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 176858 September 15, 2010

HEIRS OF JUANITA PADILLA, represented by CLAUDIO PADILLA, Petitioners, vs. DOMINADOR MAGDUA, Respondent. DECISION

heir to his inheritance is imprescriptible, yet when one of the coheirs appropriates the property as his own to the exclusion of all other heirs, then prescription can set in. The RTC added that since prescription had set in to question the transfer of the land under the Affidavit, it would seem logical that no action could also be taken against the deed of sale executed by Ricardos daughters in favor of Dominador. The dispositive portion of the order states: WHEREFORE, premises considered, the order of the Court is reconsidered in so far as the pronouncement of the Court that it has no jurisdiction over the nature of the action. The dismissal of the action, however, is maintained not by reason of lack of jurisdiction but by reason of prescription. SO ORDERED.
7

Appeals are beyond the issues of the case; and (11) such 8 findings are contrary to the admissions of both parties. We find that the conclusion of the RTC in dismissing the case on the ground of prescription based solely on the Affidavit executed by Juanita in favor of Ricardo, the alleged seller of the property from whom Dominador asserts his ownership, is speculative. Thus, a review of the case is necessary. Here, the RTC granted the motion to dismiss filed by Dominador based on Section 1, Rule 9 of the Rules of Court which states: Section 1. Defenses and objections not pleaded. Defenses and objections not pleaded either in a motion to dismiss or in the answer are deemed waived. However, when it appears from the pleadings or the evidence on record that the court has no jurisdiction over the subject matter, that there is another action pending between the same parties for the same cause, or that the action is barred by a prior judgment or by statute of limitations, the court shall dismiss the case. (Emphasis supplied) The RTC explained that prescription had already set in since the Affidavit was executed on 31 May 1966 and petitioners filed the present case only on 26 October 2001, a lapse of more than 30 years. No action could be taken against the deed of sale made in favor of Dominador without assailing the Affidavit, and the action to question the Affidavit had already prescribed. After a perusal of the records, we find that the RTC incorrectly relied on the Affidavit alone in order to dismiss the case without considering petitioners evidence. The facts show that the land was sold to Dominador by Ricardos daughters, namely Josephine Bahia and Virginia Bahia-Abas, during the lifetime of Ricardo. However, the alleged deed of sale was not presented as evidence and neither was it shown that Ricardos daughters had any authority from Ricardo to dispose of the land. No cogent evidence was ever presented that Ricardo gave his consent to, acquiesced in, or ratified the sale made by his daughters to Dominador. In its 8 September 2006 Order, the RTC hastily concluded that Ricardos daughters had legal personality to sell the property: On the allegation of the plaintiffs (petitioners) that Josephine Bahia and Virginia Bahia-Abas had no legal personality or right to [sell] the subject property is of no moment in this case. It should be Ricardo Bahia who has a cause of action against [his] daughters and not the herein plaintiffs. After all, Ricardo Bahia might have already consented to or ratified the alleged 9 deed of sale. Also, aside from the Affidavit, Dominador did not present any proof to show that Ricardos possession of the land had been open, continuous and exclusive for more than 30 years in order 10 to establish extraordinary acquisitive prescription. Dominador merely assumed that Ricardo had been in possession of the land for 30 years based on the Affidavit submitted to the RTC. The petitioners, on the other hand, in their pleading filed with the RTC for recovery of ownership, possession, partition and damages, alleged that Ricardo left the land after he separated from his wife sometime after 1966 and moved to another place. The records do not mention, however, whether Ricardo had any intention to go back to the land or whether Ricardos family ever lived there. Further, Dominador failed to show that Ricardo had the land declared in his name for taxation purposes from 1966 after the Affidavit was executed until 2001 when the case was filed. Although a tax declaration does not prove ownership, it is evidence of claim to possession of the land. Moreover, Ricardo and petitioners are co-heirs or co-owners of the land. Co-heirs or co-owners cannot acquire by acquisitive prescription the share of the other co-heirs or co-owners absent

Petitioners filed another motion for reconsideration which the RTC denied in an Order dated 13 February 2007 since petitioners raised no new issue. Hence, this petition. The Issue The main issue is whether the present action is already barred by prescription. The Courts Ruling Petitioners submit that the RTC erred in dismissing the complaint on the ground of prescription. Petitioners insist that the Affidavit executed in 1966 does not conform with the requirement of sufficient repudiation of co-ownership by Ricardo against his co-heirs in accordance with Article 494 of the Civil Code. Petitioners assert that the Affidavit became part of public records only because it was kept by the Provincial Assessors office for real property tax declaration purposes. However, such cannot be contemplated by law as a record or registration affecting real properties. Petitioners insist that the Affidavit is not an act of appropriation sufficient to be deemed as constructive notice to an adverse claim of ownership absent a clear showing that petitioners, as co-heirs, were notified or had knowledge of the Affidavit issued by their mother in Ricardos favor. Respondent Dominador, on the other hand, maintains that Juanita, during her lifetime, never renounced her signature on the Affidavit or interposed objections to Ricardos possession of the land, which was open, absolute and in the concept of an owner. Dominador contends that the alleged written instrument dated 15 May 1978 executed by Juanita years before she died was only made known lately and conveys the possibility of being fabricated. Dominador adds that the alleged highly questionable signature of Juanita on the Affidavit was only made an issue after 35 years from the date of the transfer in 1966 until the filing of the case in 2001. As a buyer in good faith, Dominador invokes the defense of acquisitive prescription against petitioners. At the outset, only questions of law may be raised in a petition for review on certiorari under Rule 45 of the Rules of Court. The factual findings of the lower courts are final and conclusive and may not be reviewed on appeal except under any of the following circumstances: (1) the conclusion is grounded on speculations, surmises or conjectures; (2) the inference is manifestly mistaken, absurd or impossible; (3) there is grave abuse of discretion; (4) the judgment is based on a misapprehension of facts; (5) the findings of fact are conflicting; (6) there is no citation of specific evidence on which the factual findings are based; (7) the finding of absence of facts is contradicted by the presence of evidence on record; (8) the findings of the Court of Appeals are contrary to those of the trial court; (9) the Court of Appeals manifestly overlooked certain relevant and undisputed facts that, if properly considered, would justify a different conclusion; (10) the findings of the Court of

a clear repudiation of the co-ownership, as expressed in Article 494 of the Civil Code which states: Art. 494. x x x No prescription shall run in favor of a co-owner or co-heir against his co-owners or co-heirs as long as he expressly or impliedly recognizes the co-ownership. Since possession of co-owners is like that of a trustee, in order that a co-owners possession may be deemed adverse to the cestui que trust or other co-owners, the following requisites must concur: (1) that he has performed unequivocal acts of repudiation amounting to an ouster of the cestui que trust or other co-owners, (2) that such positive acts of repudiation have been made known to the cestui que trust or other co-owners, and (3) that the evidence thereon must be clear and 11 convincing. In the present case, all three requisites have been met. After Juanitas death in 1989, petitioners sought for the partition of their mothers land. The heirs, including Ricardo, were notified about the plan. Ricardo, through a letter dated 5 June 1998, notified petitioners, as his co-heirs, that he adjudicated the land solely for himself. Accordingly, Ricardos interest in the land had now become adverse to the claim of his co-heirs after repudiating their claim of entitlement to the land. In Generosa v. 12 Prangan-Valera, we held that in order that title may prescribe in favor of one of the co-owners, it must be clearly shown that he had repudiated the claims of the others, and that they were apprised of his claim of adverse and exclusive ownership, before the prescriptive period begins to run. However, in the present case, the prescriptive period began to run only from 5 June 1998, the date petitioners received notice of Ricardos repudiation of their claims to the land. Since petitioners filed an action for recovery of ownership and possession, partition and damages with the RTC on 26 October 2001, only a mere three years had lapsed. This three-year period falls short of the 10-year or 30-year acquisitive prescription period required by law in order to be entitled to claim legal ownership over the land. Thus, Dominador cannot invoke acquisitive prescription. Further, Dominadors argument that prescription began to commence in 1966, after the Affidavit was executed, is erroneous. Dominador merely relied on the Affidavit submitted to the RTC that Ricardo had been in possession of the land for more than 30 years. Dominador did not submit any other corroborative evidence to establish Ricardos alleged possession since 1966. In Heirs of Maningding v. Court of 13 Appeals, we held that the evidence relative to the possession, as a fact, upon which the alleged prescription is based, must be clear, complete and conclusive in order to establish the prescription. Here, Dominador failed to present any other competent evidence to prove the alleged extraordinary acquisitive prescription of Ricardo over the land. Since the property is an unregistered land, Dominador bought the land at his own risk, being aware as buyer that no title had been issued over the land. As a consequence, Dominador is not afforded protection unless he can manifestly prove his legal entitlement to his claim. With regard to the issue of the jurisdiction of the RTC, we hold that the RTC did not err in taking cognizance of the case. Under Section 1 of Republic Act No. 7691 (RA 14 7691), amending Batas Pambansa Blg. 129, the RTC shall exercise exclusive jurisdiction on the following actions: Section 1. Section 19 of Batas Pambansa Blg. 129, otherwise known as the "Judiciary Reorganization Act of 1980", is hereby amended to read as follows: "Sec. 19. Jurisdiction in civil cases. Regional Trial Courts shall exercise exclusive original jurisdiction.

"(1) In all civil actions in which the subject of the litigation is incapable of pecuniary estimation; "(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 On the other hand, Section 3 of RA 7691 expanded the jurisdiction of the Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts over all civil actions which involve title to or possession of real property, or any interest, outside Metro Manila where the assessed value does not exceed Twenty thousand pesos (P20,000.00). The provision states: Section 3. Section 33 of the same law is hereby amended to read as follows: "Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in Civil Cases. Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Trial Circuit Trial Courts shall exercise: xxx "(3) Exclusive original jurisdiction in all civil actions which involve title to, or possession of, real property, or any interest therein where 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, attorneys fees, litigation expenses and costs: Provided, That in cases of land not declared for taxation purposes, the value of such property shall be determined by the assessed value of the adjacent lots." In the present case, the records show that the assessed value of the land was P590.00 according to the Declaration of Property as of 23 March 2000 filed with the RTC. Based on the value alone, being way belowP20,000.00, the MTC has jurisdiction over the case. However, petitioners argued that the action was not merely for recovery of ownership and possession, partition and damages but also for annulment of deed of sale. Since annulment of contracts are actions incapable of pecuniary estimation, the RTC has jurisdiction over 15 the case. 1avvphi1 Petitioners are correct. In Singson v. Isabela Sawmill, that:
16

we held

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, where the money claim is purely incidental to, or a consequence of, the principal relief sought, 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 by courts of first instance (now Regional Trial Courts). When petitioners filed the action with the RTC they sought to recover ownership and possession of the land by questioning (1) the due execution and authenticity of the Affidavit executed by Juanita in favor of Ricardo which caused Ricardo to be the

sole owner of the land to the exclusion of petitioners who also claim to be legal heirs and entitled to the land, and (2) the validity of the deed of sale executed between Ricardos daughters and Dominador. Since the principal action sought here is something other than the recovery of a sum of money, the action is incapable of pecuniary estimation and thus cognizable by the RTC. Well-entrenched is the rule that jurisdiction over the subject matter of a case is conferred by law and is determined by the allegations in the complaint and the character of the relief sought, irrespective of whether the party 17 is entitled to all or some of the claims asserted. In sum, we find that the Affidavit, as the principal evidence relied upon by the RTC to dismiss the case on the ground of prescription, insufficiently established Dominadors rightful claim of ownership to the land. Thus, we direct the RTC to try the case on the merits to determine who among the parties are legally entitled to the land. WHEREFORE, we GRANT the petition. We REVERSE AND SET ASIDE the Orders dated 8 September 2006 and 13 February 2007 of the Regional Trial Court of Tacloban City, Branch 34 in Civil Case No. 2001-10-161. SO ORDERED. Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 168746 November 5, 2009

By June 29, 1998, through Promissory Note (PN) Nos. BD-985 6 7 8 084, BD-98-086, BD-98-093 and BD-98-097, EBC partially released the total amount of P10,400,000.00 from the said 9 credit line of P53,000,000.00. On March 12, 2001, EBC demanded YKS to pay its outstanding obligations, but the latter failed to heed the demand. On May 23, 2001, EBC filed before the Office of the Clerk of Court, of the Regional Trial Court (RTC) of Tacloban City, an extrajudicial petition for the sale of the mortgaged properties in order to satisfy the mortgage indebtedness in the amount of P10,400,000.00, exclusive of interests, penalties, and other 10 charges, docketed as EJF No. 1399. On May 31, 2001, Sheriff Leonardo G. Aguilar, issued a Notice 11 of Extra-Judicial Sale, setting the auction sale of the subject properties in the morning of June 29, 2001. The PCIB Account On August 13, 1997, YKS obtained a dollar denominated loan from PCIB in the amount of US$2,500,000.00, evidenced by PN 12 No. 095/97-344. However, while the loan was booked as a dollar denomination loan, it was actually converted to peso and was released to YKS in peso at the prevailing currency exchange rate of P26.00 to a dollar, more or less, or in the 13 amount of P65,000,000.00, more or less. The credit line/loan accommodation with PCIB was secured by real estate mortgages over the properties of YKS in Tacloban City covered by TCT Nos. T-22457, T-22458, T-22459, T22266, T-23066, T-23145, T-26055, T-26056, T-22697, T14 42170, and T-16659. In one of the promissory notes executed 15 by YKS, PN No. 366-00756-98, dated December 24, 1998, it appeared that the total obligation of YKS was P140,967,120.36. It also stated therein that the purpose of the loan was for "working capital" and that it would mature six years after date or on December 17, 2004. On the same day, December 24, 1998, PCIB credited the amount of P103,240,277.90 to YKS account as proceeds of the 16 loan under "PN No. 756/98." At the same time, PCIB debited the amount of $2,633,680.55 from YKS account as payment of the loan principal and interest for the converted dollar 17 denominated loan under PN No. 095/97-344. On January 23, 2001, PCIB sent YKS a letter demanding the latter to pay its total obligation, which the former pegged at P162,295,233.54, exclusive of interest, penalty, and other charges. PCIB also warned YKS that its failure to heed the demand would result in the filing of appropriate actions against it, including the foreclosure of the mortgaged properties. In a letter received b y PCIBs counsel on May 8, 2001, YKS protested the principal amount of the loan and reiterated its previous request for a breakdown of the amount, but PCIB ignored the request. On May 23, 2001, petitioner filed a Petition for Sale before the Office of the Executive Judge, RTC, Tacloban City, praying that the mortgaged properties be sold thru extrajudicial foreclosure proceedings to the highest bidder, in the manner and form prescribed by law. On May 25, 2001, Sheriff Luis G. Copuaco issued a Sheriffs 21 Notice of Extrajudicial Foreclosure Sale setting the public auction of the mortgaged properties in the morning of June 29, 2001 at the RTC, Branch 7, Bulwagan ng Katarungan, Tacloban City. Thus, on June 19, 2001, as a result of the filing of the two 22 petitions for sale, YKS filed before the RTC a Complaint for Declaratory Relief, Annulment or Declaration of Nullity of Foreclosure, Application for Foreclosure, Notice of Foreclosure
20 19 18

EQUITABLE PCI BANK, INC., Petitioner, vs. HON. SALVADOR Y. APURILLO in his capacity as Presiding Judge, Regional Trial Court of Tacloban City, Branch 8, and YKS REALTY DEVELOPMENT, INC., Respondents. DECISION PERALTA, J.: This is a petition for review on certiorari, under Rule 45 of the Rules of Court, seeking to annul and set aside the 1 Decision dated June 27, 2005, of the Court of Appeals (CA) in CA-G.R. SP No. 85484, dismissing the petition. The factual and procedural antecedents are as follows: YKS Realty Development, Inc. was a client of Philippine Commercial International Bank (PCIB) and Equitable Banking Corporation (EBC), the predecessors of herein petitioner Equitable PCI Bank, Inc. In their commercial transactions, PCIB and EBC granted YKS a series of loans and credit facilities secured by real estate mortgages. The EBC Account Through its transactions with EBC, YKS was granted a series of credit lines by the former. The entire line was secured by a Real Estate Mortgage on two properties covered by Transfer Certificates of Title (TCT) Nos. T-22461 and T-22460 owned by YKS situated in Tacloban City. The credit line was initially in the 2 amount ofP4,000,000.00, but as a result of several amendments to the real estate mortgage, the initial loan consideration of P4,000,000.00 ballooned 3 to P53,000,000.00. YKS also alleged that EBC made its officers sign a blank surety agreement making it appear that the said corporate officers made themselves liable to the extent 4 ofP85,000,000.00.

Sale, Documents, Interest, Etc., Release of Mortgages, Injunction, and Damages, later docketed as Civil Case No. 2001-06-93. YKS alleged therein, among other things, that the two petitions for sale are defective, since they do not specify the correct amount of the claims. The petitions also include amounts that were not covered by the real estate mortgages, among which are the quantified penalties which were not mentioned in the mortgages. YKS added that the promissory notes should not be allowed to be the bases for the enforcement of payment through extrajudicial foreclosure since their validity are sill in question. YKS pointed out that the EBC credit line that was extended to it was for the amount of P53,000,000.00, however, in its petition for sale, the availments for the said credit line was only P10,400,000.00. Accordingly, the entire property cannot be foreclosed to satisfy the indebtedness of onlyP10,400,000.00. YKS also insisted that PN No. 366-00756-98, which was the basis of PCIBs petition for sale is null and void and lacks consideration, or at the very least, is erroneously bloated. In addition, the said promissory note has not yet matured at the time the petition for sale was filed, considering that it would mature only on December 17, 2004; thus, the debt is not yet due and demandable. YKS claimed that its corporate officers were induced to sign blank surety agreements which were later on filled in by petitioner to reflect erroneous loan amounts. Moreover, the amounts appearing in the promissory notes are different from the one claimed by petitioner in its petition for sale. To buttress its application for temporary restraining order and writ of preliminary injunction, YKS posited that the continuance of the questioned acts of petitioner despite its claim that there were no valid obligations and no valid basis for extrajudicial foreclosure proceedings is a clear and wanton violation of its rights and would effectively render any favorable judgment of the court ineffectual if the same were not granted pending determination of the main action. Ultimately, YKS prayed, among other things, that judgment be rendered declaring the two petitions for sale and notices of extrajudicial sale void; declaring the promissory notes that were used as basis for the petition void and without valid consideration; ordering the release of the subject properties from their respective real estate mortgages; declaring that there is no legal default with respect to PN No. 366-00756-98 because the said promissory note was to mature only on December 17, 2004; declaring the banks act of making the properties liable beyond the individual assigned loan values void; directing the bank to specify the extent of its claims against each of the properties using the assigned value; ordering the bank to make an accounting, summary and computation of its actual releases and the payments made by it for the purpose of determining the true and correct principal amount and the total of whatever obligations it may have with the bank; and that a temporary restraining order and subsequently a preliminary injunction be issued enjoining EBC and PCIB from committing or proceeding pendente lite with the posting of notices of sale, conduct foreclosure sales, execute certificate of sales and its subsequent registration with the register of deeds, execution of deeds of final sale, and disturbing the status quo ante litem. On June 25, 2001, the RTC heard YKS application for temporary restraining order. After hearing the respective arguments of the parties and weighing the pros and cons in issuing the same, the RTC issued a temporary restraining order 23 on June 27, 2001. In the meantime, the hearing for the application of the writ of preliminary injunction was set for July 13, 2001. On the said hearing date, the parties jointly manifested that they will just be submitting position papers together with the other necessary documents to abbreviate the proceedings.

On December 3, 2001, after the parties have submitted their 24 respective pleadings, the RTC issued a Resolution granting YKS application for a writ of preliminary injunction, the dispositive portion of which reads: WHEREFORE, premises considered, plaintiff[s] prayer for the issuance of a Writ of Preliminary Injunction is hereby given Due Course and Granted and the defendants, their agents, representatives or any persons or entities acting in their behalf are hereby directed to maintain the status quo ante litem and to cease and desist from posting or publishing any notice of sale with respect to properties subject of this case, conducting any foreclosure sale, executing any Certificate of Sale, registering the same with the Register of Deeds, executing any Deed of Final Sale and/or other consolidation document, paying any capital gains, documentary and other transfer taxes or any other act that shall disturb the status quo ante litem until further order of this Court. This Writ of Preliminary Injunction shall become effective and operative upon posting by the plaintiff of the necessary bond in the sum of P3,000,000.00. SO ORDERED.
25

In granting the writ, the RTC ratiocinated that it was not equitable and just for petitioner to foreclose and sell the two properties that were mortgaged to EBC for its credit line availments of only P10,400,000.00 out of theP53,000,000.00. As for the PCIB loan, the RTC opined that the same was not yet due and demandable since it was stipulated on Promissory Note No. 366-00756-98 that the obligation will be satisfied via a one time payment, single payment, on December 17, 2004. Petitioner filed a motion for reconsideration, but it was denied in 26 the Resolution dated May 20, 2004. In denying the motion, the RTC noted that there are certain ambiguities in the PCIB promissory note that need to be resolved. In addition, the discrepancies between the promissory note, the credit memo, and the demand letter are too substantial for the RTC to ignore. Aggrieved, petitioner sought recourse before the CA via a petition for certiorari under Rule 65 of the Rules of Court, 27 docketed as CA-G.R. SP No. 85484, wherein it prayed for the nullification of the resolutions of the RTC granting the writ of preliminary injunction and denying its motion for reconsideration. Petitioner claimed that the RTC committed grave abuse of discretion amounting to lack or excess of jurisdiction when it granted the writ of preliminary injunction despite the absence of a clear and convincing right on the part of YKS and despite the 28 absence of any showing of grave and irreparable injury. On June 27, 2005, the CA rendered a Decision denying the petition for lack of merit and ordered the RTC to proceed with the trial of the main case on its merits. The decretal portion of the Decision reads: WHEREFORE, premises considered, the petition for certiorari is DENIED for lack of merit. The court a quo is ordered to proceed with the trial on the merits of the main case. In the meantime, the preliminary injunction issued shall remain in force until the merits of the main case are resolved. SO ORDERED.
30 29

Hence, the petition assigning the following errors: I. The honorable court of appeals committed a serious and reversible error when it upheld the finding of the trial court that private respondent is entitled to the writ of preliminary 31 injunction. II.

the honorable court of appeals erred in holding that private respondent has a right to be protected by the injuNctive writ by 32 reason of the dispute in the amount of the principal obligation. Petitioner argues that since YKS is a delinquent debtor, it had all the right to foreclose the mortgaged properties. Petitioner contends that it had a choice between two remedies, i.e., foreclose the mortgage or to file an ordinary suit for collection. Since it opted to foreclose the mortgage, it was improper on the part of the RTC to enjoin such legitimate exercise of its option in order to satisfy the obligations owing to it. In light of the undisputed fact that YKS defaulted in paying its obligation, the bank was justified in foreclosing the property and such valid act cannot be enjoined by the RTC. Petitioner insists that YKS right to enjoin the foreclosure of the mortgages is not clear and convincing, as it will not be deprived of its absolute ownership over the mortgaged property since it may exercise its right of redemption within one year after its sale. Petitioner adds that YKS failed to show that it would suffer grave and irreparable injury if the foreclosure sale was not enjoined. Moreover, petitioner maintains that YKS has no right to be protected by the injunctive writ based on the discrepancies in the amount of the principal obligation. On its part, YKS contends that there was no grave abuse of discretion on the part of the CA in issuing the injunctive writ. The CA correctly affirmed the RTC because it saw that there was a need to maintain the status quo ante while the case is being tried and heard to prevent one party from unilaterally adjudicating the case in its favor without trial on the merits and to prevent the case and whatever decision thereon to be rendered moot and academic. YKS also maintains that the sampling of evidence adduced during the hearing and determination by the trial court of the propriety of issuing a writ of preliminary injunction would show that the issuance thereof was proper and was not attended by grave abuse of discretion. The petition is bereft of merit. The only issue that needs to be determined in the case at bar is whether or not the RTC acted with grave abuse of discretion in issuing the writ of preliminary injunction enjoining the foreclosure and public auction of YKS property during the proceedings and pending determination of the main cause of action for annulment of foreclosure in Civil Case No. 2001-0693. Section 3, Rule 58 of the Rules of Court provides that: SEC. 3. Grounds for issuance of preliminary injunctions. A preliminary injunction may be granted when it is established: (a) That the applicant is entitled to the relief demanded, and the whole or part of such relief consists in restraining the commission or continuance of the act or acts complained of, or in requiring the performance of an act or acts, either for a limited period or perpetually; (b) That the commission, continuance or nonperformance of the act or acts complained of during the litigation would probably work injustice to the applicant; or (c) That a party, court, agency or a person is doing, threatening, or is attempting to do, or is procuring or suffering to be done, some act or acts probably in violation of the rights of the applicant respecting the subject of the action or proceeding, and tending to render the judgment ineffectual. As such, a writ of preliminary injunction may be issued only upon clear showing of an actual existing right to be protected during the pendency of the principal action. The twin requirements of a valid injunction are the existence of a right

and its actual or threatened violations. Thus, to be entitled to an injunctive writ, the right to be protected and the violation against 33 that right must be shown. Moreover, the rule is well entrenched that the issuance of the writ of preliminary injunction as an ancillary or preventive remedy to secure the right of a party in a pending case rests upon the sound discretion of the 34 trial court. However, if the court commits grave abuse of its discretion in the issuance of the writ of preliminary injunction, such that the act amounts to excess or lack of jurisdiction, the same may be nullified through a writ of certiorari or 35 prohibition. Such grave abuse of discretion in the issuance of writs of preliminary injunction implies a capricious and whimsical exercise of judgment that is equivalent to lack of jurisdiction or whether the power is exercised in an arbitrary or despotic manner by reason of passion, prejudice or personal aversion amounting to an evasion of positive duty or to a virtual refusal to perform the duty enjoined, or to act at all in contemplation of law. For the extraordinary writ of certiorari to lie, there must be a capricious, arbitrary and whimsical exercise 36 of power. A Petition for Certiorari, under Rule 65 of the Rules of Court, is intended for the correction of errors of jurisdiction only or grave abuse of discretion amounting to lack or excess of jurisdiction. Its principal office is only to keep the inferior court within the parameters of its jurisdiction or to prevent it from committing such a grave abuse of discretion amounting to lack or excess of 37 jurisdiction. It may issue only when the following requirements are alleged in the petition and established: (1) the writ is directed against a tribunal, a board or any officer exercising judicial or quasi-judicial functions; (2) such tribunal, board or officer has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction; and (3) there is no appeal or any plain, speedy and 38 adequate remedy in the ordinary course of law. Excess of jurisdiction as distinguished from absence of jurisdiction means that an act, though within the general power of a tribunal, board or officer is not authorized, and invalid with respect to the particular proceeding, because the conditions which alone authorize the exercise of the general power in respect of it are wanting. Without jurisdiction means lack or want of legal power, right or authority to hear and determine a cause or causes, considered either in general or with reference to a particular 39 matter. It means lack of power to exercise authority. In the case at bar, this Court agrees with the conclusion of the CA that the RTC committed no grave abuse of discretion in granting YKS plea for injunctive relief. In the exercise of its discretion, the trial court found all the requisites for the issuance of an injunctive writ to be attendant. First, it was well established that YKS had a clear and unmistakable right over the mortgaged properties. Evidently, as owner of the subject properties that stand to be foreclosed, YKS is entitled to the possession and protection thereof when the threat to its foreclosure was apparent even before the respective rights of the parties are determined and the issues threshed out in the main action before the RTC are resolved.1avvphi1 Second, there clearly exists an urgent and paramount necessity to prevent serious injury on the part of YKS. As aptly concluded by the RTC in the Resolution denying petitioners motion for reconsideration: With regards to the first, it will be recalled that in 1997, plaintiff was granted a credit line of Php53,000,000.00. This line was secured by a Real Estate Mortgage on two properties owned by the plaintiff located in Tacloban City covered by TCT Nos. 22460 and 22461. Out of this credit line, plaintiff availed of Php10,400,000.00. The question that came to the mind of the Court is that, it is not righteous, just and equitable for the defendant to foreclose and sell the two properties for the availment of Php10,400,000.00 out of this line for Php53,000,000.00. Defendant contends otherwise and cited two Articles of the Civil Code, to wit:

Article 2089 of the Civil Code is hereunder quoted: xxxx Article 2126 of the Civil Code is likewise hereunder quoted: xxxx With regards to Article 2089, the case at bench does not fall within the ambit of said Article. The same covers a situation wherein the mortgage debt or credit has passed on to several heirs and not all the heirs/debtors have paid the entire mortgage debt or vice-versa. The same is not true in the case at bench. Neither the debt [n]or credit has been passed on to anyone. To go along with the stand of the defendant would, therefore, undoubtedly and inevitably result in unjust enrichment, which the Court cant allow. As regards Article 2126, this Court noted that there has been no transfer of possession of the mortgaged property. The mortgaged properties are, in fact, still in the possession of the plaintiff and this Article cannot [be] construed on such a manner as to cause what the law does not allow. As regards the second issue/point, this Court took a long hard look at the subject Promissory Note and what is in there, typewritten into the space indicating maturity is 12.17.2004. This Court likewise noted in the Disclosure Statement under the heading Mode of Payment, it is stated that "Single Payment on: 12.17.2004.["] It is, therefore, clear and there can be no mistake about the maturity date as well as the mode of payment. xxxx This Court also noted the variance in the amounts being demanded by the defendant from the plaintiff. The Promissory Note speaks of the sum of Php140,967,120.36. Its Credit Memo speaks of Php103,240,277.90. That is a discrepancy of Php37,726,842.36. The Demand Letter speaks of Php162,295,233.54. It shall mean a discrepancy of Php59,054,955.64. These discrepancies are too substantial for this Court to ignore. It is, therefore, clear that only after a trial on the merits can the true amount be determined and the foreclosure proceedings will have to wait until the presentation of the evidence on the 40 merits. To be sure, to allow the foreclosure proceedings to continue even before determination of the issues that were brought to the RTC would place YKS in an oppressively unjust situation where it would be tied up in litigation for the recovery of its properties should the RTC later conclude that YKS is entitled to the reliefs prayed for in the main action. A writ of preliminary injunction is generally based solely on initial and incomplete evidence. The evidence submitted during the hearing on an application for a writ of preliminary injunction is not conclusive or complete for only a "sampling" is needed to give the trial court an idea of the justification for the preliminary injunction pending the decision of the case on the merits. As such, the findings of fact and opinion of a court when issuing the writ of preliminary injunction are interlocutory in nature and made even before the trial on the merits is commenced or terminated. There are vital facts that have yet to be presented during the trial which may not be obtained or presented during the hearing on the application for the injunctive writ. The trial court needs to conduct substantial proceedings in order to put 41 the main controversy to rest. The sole object of a preliminary injunction is to maintain the status quo until the merits can be heard. A preliminary injunction is an order granted at any stage of an action prior to judgment of final order, requiring a party, court, agency, or person to refrain from a particular act or acts. It is a preservative

remedy to ensure the protection of a partys substantive rights or interests pending the final judgment on the principal action. A plea for an injunctive writ lies upon the existence of a claimed emergency or extraordinary situation which should be avoided for, otherwise, the outcome of a litigation would be useless as 42 far as the party applying for the writ is concerned. This Court finds no cogent reason to deviate from the factual findings and conclusion of law of the trial court and the appellate court. Evidently, there exists in the case at bar a pressing necessity for the issuance of an injunctive writ. After a careful scrutiny of the attendant circumstances, We find no reason for reversing the assailed decision of the CA and questioned resolutions of the RTC granting injunctive relief to YKS. WHEREFORE, premises considered, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. SP No. 85484, dated June 27, 2005, is AFFIRMED. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 165973 June 29, 2005

LACSON HERMANAS, INC., herein represented by its President MR. ODILON L. LACSON, Petitioner, vs. HEIRS OF CENON IGNACIO, herein represented by their atty-in-fact, AMALIA IGNACIO, REGIONAL TRIAL COURT, BRANCH 48, CITY OF SAN FERNANDO, presided by the HON. JUDGE SERAFIN B. DAVID,Respondents. DECISION YNARES-SANTIAGO, J.: Assailed in this petition for certiorari under Rule 65 of the Revised Rules of Civil Procedure are the September 9, 1 2 2004 and October 15 2004 Orders of the Regional Trial Court 3 of San Fernando City, Branch 48, which denied petitioners motion to dismiss and motion for reconsideration, respectively. The undisputed facts show that on April 29, 2004, private 4 respondents filed a complaint for recovery of real property against petitioner Lacson Hermanas, Inc. They alleged that their predecessor-in-interest, Cenon Ignacio (Cenon), purchased from petitioner a 1,000 square meter portion of a parcel of land covered by Transfer Certificate of Title (TCT) No. 261974-R for P50,000.00 which was fully paid on September 24, 1989. Cenon thereafter took possession of the subject area and fenced the boundaries thereof for the construction of Seventh Day Adventist Chapel. On January 11, 1996, however, Cenon died. Sometime in 2002, private respondents demanded the delivery of the lots title and the segregation of the portion sold to Cenon but was informed by petitioner that the same lot has been sold to Rowena T. Coleman. Hence, the instant case to compel petitioner to execute the necessary deed of sale and to deliver the owners duplicate copy of title.

Petitioner filed a motion to dismiss contending, among others, that the case is cognizable by the Housing and Land Use Regulatory Board (HLURB) and not the trial court because it is sued as a subdivision developer and the property involved is a subdivision lot. The trial court denied the motion to dismiss holding that it has jurisdiction over the subject matter. It added that petitioners allegation that the lot involved is a subdivision lot is not a 6 ground to deprive the court of its jurisdiction. Petitioners 7 motion for reconsideration was denied. Hence, the instant petition. The petition lacks merit. At the outset, the instant petition for certiorari should have been filed with the Court of Appeals and not with this Court pursuant to the doctrine of hierarchy of courts. Disregard of this rule warrants the outright dismissal of the petition. While the Courts original jurisdiction to issue a writ of certiorari is concurrent with the Regional Trial Courts and the Court of Appeals in certain cases, we emphasized in Liga ng mga Barangay National v. 8 Atienza, Jr., that such concurrence does not allow an unrestricted freedom of choice of court forum, thus This concurrence of jurisdiction is not, however, to be taken as according to parties seeking any of the writs an absolute, unrestrained freedom of choice of the court to which application therefore will be directed. There is after all a hierarchy of courts. That hierarchy is determinative of the venue of appeals, and also serves as a general determinant of the appropriate forum for petitions for the extraordinary writs. A becoming regard of that judicial hierarchy most certainly indicates that petitions for the issuance of extraordinary writs against first level ("inferior") courts should be filed with the Regional Trial Court, and those against the latter, with the Court of Appeals. A direct invocation of the Supreme Courts original jurisdiction to issue these writs should be allowed only when there are special and important reasons therefor, clearly and specifically set out in the petition. It is a policy necessary to prevent inordinate demands upon the Courts time and attention which are better devoted to those matters within its exclusive jurisdiction, and to prevent further 9 over-crowding of the Courts docket. In the present case, petitioner adduced no special and important reason why direct recourse to this Court should be allowed. Thus, we reaffirm the judicial policy that this Court will not entertain a direct invocation of its jurisdiction unless the redress desired cannot be obtained in the appropriate courts, and exceptional and compelling circumstances justify the resort to the extraordinary remedy of writ of certiorari. Although the invocation of this Courts jurisdiction is available to petitioner on the ground that this case raises a pure question of 10 law, specifically, the issue of jurisdiction, the proper recourse is not a petition for certiorari under Rule 65 but an appeal via a petition for review on certiorari in accordance with Rule 45 of 11 the Revised Rules of Civil Procedure, which should have been filed within 15 days from notice of the denial of its motion for 12 reconsideration on October 22, 2004. Even if we treat the instant petition as an appeal under Rule 45, the same will not prosper having been filed only on November 30, 2004, way beyond the 15 day reglementary period. Then too, even if we gloss over these procedural infirmities, the instant petition must fail for lack of merit. Section 1 of PD 1344 vests the National Housing Authority (now HLURB) with exclusive jurisdiction to hear and decide the following cases: (a) unsound real estate business practice; (b) claims involving refund and any other claims filed by subdivision lot or condominium unit buyer against the project owner, developer, dealer, broker, or salesman ; and (c) cases involving specific performance of contractual and statutory obligations filed by buyers of subdivision lot or
13

condominium unit against the owner, developer, dealer, broker or salesman. It is a settled rule that jurisdiction over the subject matter is determined by the allegations in the complaint and is not affected by the pleas or the theories set up by the defendant in an answer or a motion to dismiss. Otherwise, jurisdiction would become dependent upon the whims of the defendant. Here, the allegations in private respondents complaint clearly vest jurisdiction in the trial court. Nothing therein shows that the questioned property is a subdivision lot and sold by petitioner as a subdivision developer. It simply referred to petitioner as a corporation and the seller of a lot described as "portion of a parcel of land, particularly a 1,000 sq. m. area thereof 14 covered by Transfer Certificate of Title No. 261974-R " Mere assertion by petitioner that it is a subdivision developer and the land involved is a subdivision lot, will not automatically strip the trial court of its jurisdiction and authorize the HLURB to take cognizance of the complaint. Indeed, it does not always follow that each sale made by petitioner is undertaken in its capacity as a subdivision developer, in the same manner that sales made in such capacity are not at all times intended for subdivision development. In Javellana v. Presiding Judge, RTC, Branch 30, Manila , the Court sustained the denial of a motion to dismiss, holding that jurisdiction lies with the regular courts and not with the HLURB because the averments in the complaint reveal that the transaction involved an installment sale of a lot and not a sale of a subdivision lot. It further held that even the allegation a subdivision lot in a subdivision project, is not sufficient to vest jurisdiction with the HLURB, thus A reading of the complaint does not show that the subject lot was a subdivision lot which would fall under the jurisdiction of the HLURB. The complaint clearly described the subject lot as Lot No. 44, Plan 15 with an area of 139.4 sq. meters situated in the District of Sampaloc covered by Transfer Certificate of Title No. 131305 of the Registry of Deeds of Manila. We note that such description was used when referring to the subject lot. What appears from the complaint was the fact that the subject lot was sold to petitioners in an ordinary sale of a lot on installment basis; that petitioners allegedly defaulted in the payment of their monthly installments for which reason respondent seeks to recover possession thereof. Thus, the trial court has jurisdiction over the case. [T]he use of the phrase "regular subdivision project" does not automatically make the instant case fall under the jurisdiction of the HLURB. In Sps. Kakilala vs. Faraon, notwithstanding the allegations of petitioners in their complaint that the subject lot is "a subdivision lot" in a "subdivision project," we held that such allegations were not sufficient to vest the HLURB of jurisdiction over the case, thus: Jurisdiction is determined by the averments of the complaint and not by the defense contained in the answer. Hence, the jurisdictional issue involved here shall be determined on the basis of the allegations of petitioners complaint before the HLURB. Petitioners simply alleged therein that the subject lot is "a subdivision lot" in "a subdivision project." Under Section 2(d) and (e) of PD 957, "subdivision project" and "subdivision lot" are defined as follows: d) Subdivision project "Subdivision project" shall mean a tract or a parcel of land registered under Act No. 496 which is partitioned primarily for residential purposes into individual lots with or without improvements thereon, and offered to the public for sale, in cash or in installment terms. It shall include all residential, commercial, industrial and recreational areas as well as open spaces and other community and public areas in the project.
15

e) Subdivision lot. "Subdivision lot" shall mean any of the lots, whether residential, commercial, industrial, or recreational, in a subdivision project. There is no allegation in the complaint that the lot purchased by petitioners is part of a tract of land partitioned primarily for residential purposes into individual lots and offered to the public for sale. There is likewise no allegation that the tract of land includes recreational areas and open spaces. Nor does the "Contract to Sell", which forms part of the complaint, describe the subject property as a subdivision lot. What the contract strongly suggests is that the property is simply a lot offered by respondents, as vendors, to the petitioners, as vendees, for sale on installment. As can be clearly gleaned from the same contract, respondents are not acting as subdivision owners, developers, brokers or salesmen, nor are they engaged in the real estate business. What is plain is that the parties are acting only as ordinary sellers and buyers of a specific lot, a portion of a big tract of land co-owned by the heirs of Mariano Faraon. Neither are there undertakings specified in the contract that respondents shall develop the land, like providing for the subdivision concrete roads and sidewalks, street lights, curbs and gutters, underground drainage system, independent water system, landscaping, developed park, and 24-hour security guard service. Even the rights and obligations of the sellers and buyers of a subdivision lot are not provided in the agreement. All these provisions are usually contained in a standard contract 16 involving a sale of a subdivision lot. In the instant case, the parties never mentioned if the contract was embodied in a written instrument which may shed light on the nature of their transaction. At any rate, the allegations in private respondents complaint which determine the tribunal that may lawfully take cognizance of the case, clearly show that jurisdiction in the present controversy is lodged with the trial court and not with the HLURB. WHEREFORE, the petition is DENIED. The September 9, 2004 and October 15, 2004 Orders of the Regional Trial Court of San Fernando City, Branch 48, which denied petitioners motion to dismiss and motion for reconsideration, respectively, are AFFIRMED. SO ORDERED. Republic of the Philippines SUPREME COURT SECOND DIVISION G.R. No. 140954. April 12, 2005 HEIRS OF BERTULDO HINOG: Bertuldo Hinog II, Bertuldo Hinog III, Bertuldo Hinog, Jr., Jocelyn Hinog, Bertoldo Hinog IV, Bertoldo Hinog V, Edgardo Hinog, Milagros H. Pabatao, Lilian H. King, Victoria H. Engracia, Terisita C. Hinog, Paz H. Besana, Roberto C. Hinog, Vicente C. Hinog, Roel C. Hinog, Marilyn C. Hinog, Bebot C. Hinog, lordes C. Hinog, Pablo Chiong, Arlene Lanasang (All respresented by Bertuldo Hinog III), Petitioners, vs. HON. ACHILLES MELICOR, in his capacity as Presiding Judge, RTC, Branch 4, 7th Judicial Region, Tagbiliran City, Bohol, and CUSTODIO BALANE, RUFO BALANE, HONORIO BALANE, and TOMAS BALANE,Respondents. DECISION AUSTRIA-MARTINEZ, J.: Before us is a petition for certiorari and prohibition under Rule 65 of the Rules of Court which assails the Orders dated March 22, 1999, August 13, 1999 and October 15, 1999 of the Regional Trial Court, Branch 4, of Tagbilaran City, Bohol in Civil Case No. 4923.
1

The factual background of the case is as follows: On May 21, 1991, private respondents Custodio, Rufo, Tomas and Honorio, all surnamed Balane, filed a complaint for "Recovery of Ownership and Possession, Removal of Construction and Damages" against Bertuldo Hinog (Bertuldo for brevity). They alleged that: they own a 1,399- square meter parcel of land situated in Malayo Norte, Cortes, Bohol, designated as Lot No. 1714; sometime in March 1980, they allowed Bertuldo to use a portion of the said property for a period of ten years and construct thereon a small house of light materials at a nominal annual rental of P100.00 only, considering the close relations of the parties; after the expiration of the ten-year period, they demanded the return of the occupied portion and removal of the house constructed thereon but Bertuldo refused and instead claimed ownership of the entire property. Accordingly, private respondents sought to oust Bertuldo from the premises of the subject property and restore upon themselves the ownership and possession thereof, as well as the payment of moral and exemplary damages, attorneys fees 2 and litigation expenses "in amounts justified by the evidence." On July 2, 1991, Bertuldo filed his Answer. ownership of the disputed property by virtue of Absolute Sale dated July 2, 1980, executed by Pahac with the knowledge and conformity 3 respondents. He alleged a Deed of one Tomas of private

After the pre-trial, trial on the merits ensued. On November 18, 1997, private respondents rested their case. Thereupon, Bertuldo started his direct examination. However, on June 24, 1998, Bertuldo died without completing his evidence. On August 4, 1998, Atty. Sulpicio A. Tinampay withdrew as counsel for Bertuldo as his services were terminated by petitioner Bertuldo Hinog III. Atty. Veronico G. Petalcorin then 4 entered his appearance as new counsel for Bertuldo. On September 22, 1998, Atty. Petalcorin filed a motion to expunge the complaint from the record and nullify all court proceedings on the ground that private respondents failed to specify in the complaint the amount of damages claimed so as to pay the correct docket fees; and that under Manchester 5 Development Corporation vs. Court of Appeals, non-payment 6 of the correct docket fee is jurisdictional. In an amended motion, filed on October 2, 1998, Atty. Petalcorin further alleged that the private respondents failed to pay the correct docket fee since the main subject matter of the case cannot be estimated as it is for recovery of ownership, 7 possession and removal of construction. Private respondents opposed the motion to expunge on the following grounds: (a) said motion was filed more than seven years from the institution of the case; (b) Atty. Petalcorin has not complied with Section 16, Rule 3 of the Rules of Court which provides that the death of the original defendant requires a substitution of parties before a lawyer can have legal personality to represent a litigant and the motion to expunge does not mention of any specific party whom he is representing; (c) collectible fees due the court can be charged as lien on the judgment; and (d) considering the lapse of time, the motion is 8 merely a dilatory scheme employed by petitioners. In their Rejoinder, petitioners manifested that the lapse of time does not vest the court with jurisdiction over the case due to failure to pay the correct docket fees. As to the contention that deficiency in payment of docket fees can be made as a lien on the judgment, petitioners argued that the payment of filing fees 9 cannot be made dependent on the result of the action taken. On January 21, 1999, the trial court, while ordering the complaint to be expunged from the records and the nullification

of all court proceedings taken for failure to pay the correct docket fees, nonetheless, held: The Court can acquire jurisdiction over this case only upon the payment of the exact prescribed docket/filing fees for the main cause of action, plus additional docket fee for the amount of damages being prayed for in the complaint, which amount should be specified so that the same can be considered in assessing the amount of the filing fees. Upon the complete payment of such fees, the Court may take appropriate action in the light of the ruling in the case of Manchester Development 10 Corporation vs. Court of Appeals, supra. Accordingly, on January 28, 1999, upon payment of deficiency docket fee, private respondents filed a manifestation with prayer 11 to reinstate the case. Petitioners opposed the 12 reinstatement but on March 22, 1999, the trial court issued the 13 first assailed Order reinstating the case. On May 24, 1999, petitioners, upon prior leave of court, filed their supplemental pleading, appending therein a Deed of Sale 15 dated November 15, 1982. Following the submission of 16 private respondents opposition thereto, the trial court, in its Order dated July 7, 1999, denied the supplemental pleading on the ground that the Deed of Absolute Sale is a new matter which was never mentioned in the original answer dated July 2, 1991, prepared by Bertuldos original counsel and which Bertuldo verified; and that such new document is deemed 17 waived in the light of Section 1, Rule 9 of the Rules of Court. The trial court also noted that no formal substitution of the parties was made because of the failure of defendants counsel to give the names and addresses of the legal representatives of Bertuldo, so much so that the supposed heirs of Bertuldo are 18 not specified in any pleading in the case. On July 14, 1999, petitioners manifested that the trial court having expunged the complaint and nullified all court proceedings, there is no valid case and the complaint should not be admitted for failure to pay the correct docket fees; that there should be no case to be reinstated and no case to 19 proceed as there is no complaint filed. After the submission of private respondents opposition and 21 petitioners rejoinder, the trial court issued the second assailed Order on August 13, 1999, essentially denying petitioners manifestation/rejoinder. The trial court held that the issues raised in such manifestation/rejoinder are practically the same as those raised in the amended motion to expunge which had already been passed upon in the Order dated January 21, 1999. Moreover, the trial court observed that the Order dated March 22, 1999 which reinstated the case was not objected to by petitioners within the reglementary period or even thereafter via a motion for reconsideration despite receipt thereof on 22 March 26, 1999. On August 25, 1999, petitioners filed a motion for 23 reconsideration but the same was denied by the trial court in its third assailed Order dated October 15, 1999. The trial court held that the Manchester rule was relaxed in Sun Insurance 24 Office, Ltd. vs. Asuncion. Noting that there has been no substitution of parties following the death of Bertuldo, the trial court directed Atty. Petalcorin to comply with the provisions of Section 16, Rule 3 of the Rules of Court. The trial court also reiterated that the Order dated March 22, 1999 reinstating the case was not assailed by petitioners within the reglementary 25 period, despite receipt thereof on March 26, 1999. On November 19, 1999, Atty. Petalcorin complied with the directive of the trial court to submit the names and addresses of 26 the heirs of Bertuldo. On November 24, 1999, petitioners filed before us the present 27 petition for certiorari and prohibition. They allege that the public respondent committed grave abuse of discretion in allowing the case to be reinstated after private respondents paid the docket fee deficiency since the trial court had earlier
20 14

expunged the complaint from the record and nullified all proceedings of the case and such ruling was not contested by the private respondents. Moreover, they argue that the public respondent committed grave abuse of discretion in allowing the case to be filed and denying the manifestation with motion to dismiss, despite the defect in the complaint which prayed for damages without specifying the amounts, in violation of SC Circular No. 7, dated March 24, 1988. In their Comment, private respondents aver that no grave abuse of discretion was committed by the trial court in reinstating the complaint upon the payment of deficiency docket fees because petitioners did not object thereto within the reglementary period. Besides, Atty. Petalcorin possessed no legal personality to appear as counsel for the heirs of Bertuldo until he complies 28 with Section 16, Rule 3 of the Rules of Court. At the outset, we note the procedural error committed by petitioners in directly filing the instant petition before this Court for it violates the established policy of strict observance of the judicial hierarchy of courts. Although the Supreme Court, Court of Appeals and the Regional Trial Courts have concurrent jurisdiction to issue writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus and injunction, such concurrence does not give the 29 petitioner unrestricted freedom of choice of court forum. As we 30 stated in People vs. Cuaresma: This Court's original jurisdiction to issue writs of certiorari is not exclusive. It is shared by this Court with Regional Trial Courts and with the Court of Appeals. This concurrence of jurisdiction is not, however, to be taken as according to parties seeking any of the writs an absolute, unrestrained freedom of choice of the court to which application therefor will be directed. There is after all a hierarchy of courts. That hierarchy is determinative of the venue of appeals, and also serves as a general determinant of the appropriate forum for petitions for the extraordinary writs. A becoming regard for that judicial hierarchy most certainly indicates that petitions for the issuance of extraordinary writs against first level ("inferior") courts should be filed with the Regional Trial Court, and those against the latter, with the Court of Appeals. A direct invocation of the Supreme Courts original jurisdiction to issue these writs should be allowed only when there are special and important reasons therefor, clearly and specifically set out in the petition. This is [an] established policy. It is a policy necessary to prevent inordinate demands upon the Courts time and attention which are better devoted to those matters within its exclusive jurisdiction, and to prevent further 31 over-crowding of the Courts docket. The rationale for this rule is two-fold: (a) it would be an imposition upon the precious time of this Court; and (b) it would cause an inevitable and resultant delay, intended or otherwise, in the adjudication of cases, which in some instances had to be remanded or referred to the lower court as the proper forum under the rules of procedure, or as better equipped to resolve 32 the issues because this Court is not a trier of facts. Thus, this Court will not entertain direct resort to it unless the redress desired cannot be obtained in the appropriate courts, and exceptional and compelling circumstances, 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. Exceptional and compelling circumstances were held present in the 33 following cases: (a)Chavez vs. Romulo on citizens right to bear arms; (b) Government of the United States of America vs. 34 Purganan on bail in extradition proceedings; (c) Commission 35 on Elections vs. Quijano-Padilla on government contract involving modernization and computerization of voters 36 registration list; (d) Buklod ng Kawaning EIIB vs. Zamora on status and existence of a public office; and (e) Fortich vs. 37 Corona on the so-called "Win-Win Resolution" of the Office of the President which modified the approval of the conversion to agro-industrial area.

In this case, no special and important reason or exceptional and compelling circumstance analogous to any of the above cases has been adduced by the petitioners so as to justify direct recourse to this Court. The present petition should have been initially filed in the Court of Appeals in strict observance of the doctrine on the hierarchy of courts. Failure to do so is sufficient cause for the dismissal of the petition at bar. In any event, even if the Court disregards such procedural flaw, the petitioners contentions on the substantive aspect of the case fail to invite judgment in their favor. The unavailability of the writ of certiorari and prohibition in this case is borne out of the fact that petitioners principally assail the Order dated March 22, 1999 which they never sought reconsideration of, in due time, despite receipt thereof on March 26, 1999. Instead, petitioners went through the motion of filing a supplemental pleading and only when the latter was denied, or after more than three months have passed, did they raise the issue that the complaint should not have been reinstated in the first place because the trial court had no jurisdiction to do so, having already ruled that the complaint shall be expunged. After recognizing the jurisdiction of the trial court by seeking affirmative relief in their motion to serve supplemental pleading upon private respondents, petitioners are effectively barred by 38 estoppel from challenging the trial courts jurisdiction. If a party invokes the jurisdiction of a court, he cannot thereafter 39 challenge the courts jurisdiction in the same case. To rule otherwise would amount to speculating on the fortune of 40 litigation, which is against the policy of the Court. Nevertheless, there is a need to correct the erroneous impression of the trial court as well as the private respondents that petitioners are barred from assailing the Order dated March 22, 1999 which reinstated the case because it was not objected to within the reglementary period or even thereafter via a motion for reconsideration despite receipt thereof on March 26, 1999. It must be clarified that the said order is but a resolution on an incidental matter which does not touch on the merits of the case 41 or put an end to the proceedings. It is an interlocutory order since there leaves something else to be done by the trial court 42 with respect to the merits of the case. As such, it is not subject to a reglementary period. Reglementary period refers to the period set by the rules for appeal or further review of a final judgment or order, i.e., one that ends the litigation in the trial court. Moreover, the remedy against an interlocutory order is generally not to resort forthwith to certiorari, but to continue with the case in due course and, when an unfavorable verdict is handed down, to take an appeal in the manner authorized by 43 law. Only when the court issued such order without or in excess of jurisdiction or with grave abuse of discretion and when the assailed interlocutory order is patently erroneous and the remedy of appeal would not afford adequate and expeditious relief will certiorari be considered an appropriate 44 remedy to assail an interlocutory order. Such special circumstances are absolutely wanting in the present case. Time and again, the Court has held that the Manchester rule has been modified in Sun Insurance Office, Ltd. (SIOL) vs. 45 Asuncion which defined the following guidelines involving the payment of docket fees: 1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the prescribed docket fee, that vests a trial court with jurisdiction over the subjectmatter or nature of the action. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may allow payment of the fees within a reasonable time but in no case beyond the applicable prescriptive or reglementary period.

2. The same rule applies to permissive counterclaims, thirdparty claims and similar pleadings, which shall not be considered filed until and unless the filing fee prescribed therefor is paid. The court may also allow payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or reglementary period. 3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the pleading, or if specified the same has been left for determination by the court, the additional filing fee therefor shall constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court or his duly authorized deputy to enforce said lien and assess and collect the additional fee. Plainly, while the payment of the prescribed docket fee is a jurisdictional requirement, even its non-payment at the time of filing does not automatically cause the dismissal of the case, as long as the fee is paid within the applicable prescriptive or reglementary period, more so when the party involved demonstrates a willingness to abide by the rules prescribing 46 such payment. Thus, when insufficient filing fees were initially paid by the plaintiffs and there was no intention to defraud the 47 government, the Manchester rule does not apply. Under the peculiar circumstances of this case, the reinstatement of the complaint was just and proper considering that the cause of action of private respondents, being a real 48 action, prescribes in thirty years, and private respondents did not really intend to evade the payment of the prescribed docket fee but simply contend that they could not be faulted for inadequate assessment because the clerk of court made no 49 notice of demand or reassessment. They were in good faith and simply relied on the assessment of the clerk of court. Furthermore, the fact that private respondents prayed for payment of damages "in amounts justified by the evidence" does not call for the dismissal of the complaint for violation of SC Circular No. 7, dated March 24, 1988 which required that all complaints must specify the amount of damages sought not only in the body of the pleadings but also in the prayer in order to be accepted and admitted for filing. Sun Insurance effectively modified SC Circular No. 7 by providing that filing fees for damages and awards that cannot be estimated constitute liens 50 on the awards finally granted by the trial court. Thus, while the docket fees were based only on the real property valuation, the trial court acquired jurisdiction over the action, and judgment awards which were left for determination by the court or as may be proven during trial would still be subject to additional filing fees which shall constitute a lien on the judgment. It would then be the responsibility of the Clerk of Court of the trial court or his duly authorized deputy to enforce 51 said lien and assess and collect the additional fees. It is worth noting that when Bertuldo filed his Answer on July 2, 1991, he did not raise the issue of lack of jurisdiction for nonpayment of correct docket fees. Instead, he based his defense on a claim of ownership and participated in the proceedings before the trial court. It was only in September 22, 1998 or more than seven years after filing the answer, and under the auspices of a new counsel, that the issue of jurisdiction was raised for the first time in the motion to expunge by Bertuldos heirs. After Bertuldo vigorously participated in all stages of the case before the trial court and even invoked the trial courts authority in order to ask for affirmative relief, petitioners, considering that they merely stepped into the shoes of their predecessor, are effectively barred by estoppel from challenging the trial courts jurisdiction. Although the issue of jurisdiction may be raised at any stage of the proceedings as the same is conferred by law, it is nonetheless settled that a party may be barred from raising it 52 on ground of laches or estoppel.

Moreover, no formal substitution of the parties was effected within thirty days from date of death of Bertuldo, as required by 53 Section 16, Rule 3 of the Rules of Court. Needless to stress, the purpose behind the rule on substitution is the protection of the right of every party to due process. It is to ensure that the deceased party would continue to be properly represented in the suit through the duly appointed legal representative of his 54 estate. Non-compliance with the rule on substitution would render the proceedings and judgment of the trial court infirm because the court acquires no jurisdiction over the persons of the legal representatives or of the heirs on whom the trial and 55 the judgment would be binding. Thus, proper substitution of heirs must be effected for the trial court to acquire jurisdiction over their persons and to obviate any future claim by any heir that he was not apprised of the litigation against Bertuldo or that he did not authorize Atty. Petalcorin to represent him. The list of names and addresses of the heirs was submitted sixteen months after the death of Bertuldo and only when the trial court directed Atty. Petalcorin to comply with the provisions of Section 16, Rule 3 of the Rules of Court. Strictly speaking therefore, before said compliance, Atty. Petalcorin had no standing in the court a quowhen he filed his pleadings. Be that as it may, the matter has been duly corrected by the Order of the trial court dated October 15, 1999. To be sure, certiorari under Rule 65 is a remedy narrow in scope and inflexible in character. It is not a general utility tool in 57 the legal workshop. It offers only a limited form of review. Its principal function is to keep an inferior tribunal within its 58 jurisdiction. It can be invoked only for an error of jurisdiction, that is, one where the act complained of was issued by the court, officer or a quasi-judicial body without or in excess of jurisdiction, or with grave abuse of discretion which is 59 tantamount to lack or in excess of jurisdiction, not to be used 60 for any other purpose, such as to cure errors in proceedings 61 or to correct erroneous conclusions of law or fact. A contrary rule would lead to confusion, and seriously hamper the administration of justice. Petitioners utterly failed to show that the trial court gravely abused its discretion in issuing the assailed resolutions. On the contrary, it acted prudently, in accordance with law and jurisprudence. WHEREFORE, the instant petition for certiorari is DISMISSED for lack of merit. No costs. SO ORDERED. Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 168380 February 8, 2007
56

G.R. No. 170602

February 8, 2007

MANUEL V. BAVIERA, Petitioner, vs. STANDARD CHARTERED BANK, BRYAN K. SANDERSON, THE RIGHT HONORABLE LORD STEWARTBY, EVAN MERVYN DAVIES, MICHAEL BERNARD DENOMA, CHRISTOPHER AVEDIS KELJIK, RICHARD HENRY MEDDINGS, KAI NARGOLWALA, PETER ALEXANDER SANDS, RONNIE CHI CHUNG CHAN, SIR CK CHOW, BARRY CLARE, HO KWON PING, RUDOLPH HAROLD PETER ARKHAM, DAVID GEORGE MOIR, HIGH EDWARD NORTON, SIR RALPH HARRY ROBINS, ANTHONY WILLIAM PAUL STENHAM (Standard Chartered Bank Chairman, Deputy Chairman, and Members of the Board), SHERAZAM MAZARI (Group Regional Head for Consumer Banking), PAUL SIMON MORRIS, AJAY KANWAL, SRIDHAR RAMAN, MARIVEL GONZALES, CHONA REYES, ELLEN VICTOR, RAMONA H. BERNAD, DOMINGO CARBONELL, JR., and ZENAIDA IGLESIAS (Standard Chartered Bank-Philippines Branch Heads/Officers), Respondents. DECISION SANDOVAL-GUTIERREZ, J.: Before us are two consolidated Petitions for Review on Certiorari assailing the Decisions of the Court of Appeals in CA1 2 G.R. SP No. 87328 and in CA-G.R. SP No. 85078. The common factual antecedents of these cases as shown by the records are: Manuel Baviera, petitioner in these cases, was the former head of the HR Service Delivery and Industrial Relations of Standard Chartered Bank-Philippines (SCB), one of herein respondents. SCB is a foreign banking corporation duly licensed to engage in banking, trust, and other fiduciary business in the Philippines. Pursuant to Resolution No. 1142 dated December 3, 1992 of the Monetary Board of the Bangko Sentral ng Pilipinas (BSP), the conduct of SCBs business in this jurisdiction is subject to the following conditions: 1. At the end of a one-year period from the date the SCB starts its trust functions, at least 25% of its trust accounts must be for the account of non-residents of the Philippines and that actual foreign exchange had been remitted into the Philippines to fund such accounts or that the establishment of such accounts had reduced the indebtedness of residents (individuals or corporations or government agencies) of the Philippines to non-residents. At the end of the second year, the above ratio shall be 50%, which ratio must be observed continuously thereafter; 2. The trust operations of SCB shall be subject to all existing laws, rules and regulations applicable to trust services, particularly the creation of a Trust Committee; and 3. The bank shall inform the appropriate supervising and examining department of the BSP at the start of its operations. Apparently, SCB did not comply with the above conditions. Instead, as early as 1996, it acted as a stock broker, soliciting from local residents foreign securities called "GLOBAL THIRD PARTY MUTUAL FUNDS" (GTPMF), denominated in US dollars. These securities were not registered with the Securities and Exchange Commission (SEC). These were then remitted outwardly to SCB-Hong Kong and SCB-Singapore. SCBs counsel, Romulo Mabanta Buenaventura Sayoc and Delos Angeles Law Office, advised the bank to proceed with the selling of the foreign securities although unregistered with the

MANUEL V. BAVIERA, Petitioner, vs. ESPERANZA PAGLINAWAN, in her capacity as Department of Justice State Prosecutor; LEAH C. TANODRAARMAMENTO, In her capacity as Assistant Chief State Prosecutor and Chairwoman of Task Force on Business Scam; JOVENCITO R. ZUNO, in his capacity as Department of Justice Chief State Prosecutor; STANDARD CHARTERED BANK, PAUL SIMON MORRIS, AJAY KANWAL, SRIDHAR RAMAN, MARIVEL GONZALES, CHONA REYES, MARIA ELLEN VICTOR, and ZENAIDA IGLESIAS, Respondents. x-----------------------------x

SEC, under the guise of a "custodianship agreement;" and 3 should it be questioned, it shall invoke Section 72 of the 4 General Banking Act (Republic Act No.337). In sum, SCB was able to sell GTPMF securities worth around P6 billion to some 645 investors. However, SCBs operations did not remain unchallenged. On July 18, 1997, the Investment Capital Association of the Philippines (ICAP) filed with the SEC a complaint alleging that 5 SCB violated the Revised Securities Act, particularly the provision prohibiting the selling of securities without prior registration with the SEC; and that its actions are potentially damaging to the local mutual fund industry. In its answer, SCB denied offering and selling securities, contending that it has been performing a "purely informational function" without solicitations for any of its investment outlets abroad; that it has a trust license and the services it renders under the "Custodianship Agreement" for offshore investments 6 are authorized by Section 72 of the General Banking Act; that its clients were the ones who took the initiative to invest in securities; and it has been acting merely as an agent or "passive order taker" for them. On September 2, 1997, the SEC issued a Cease and Desist Order against SCB, holding that its services violated Sections 7 8 4(a) and 19 of the Revised Securities Act. Meantime, the SEC indorsed ICAPs complaint and its supporting documents to the BSP. On October 31, 1997, the SEC informed the Secretary of Finance that it withdrew GTPMF securities from the market and that it will not sell the same without the necessary clearances from the regulatory authorities. Meanwhile, on August 17, 1998, the BSP directed SCB not to include investments in global mutual funds issued abroad in its trust investments portfolio without prior registration with the SEC. On August 31, 1998, SCB sent a letter to the BSP confirming that it will withdraw third-party fund products which could be directly purchased by investors. However, notwithstanding its commitment and the BSP directive, SCB continued to offer and sell GTPMF securities in this country. This prompted petitioner to enter into an Investment Trust Agreement with SCB wherein he purchased US$8,000.00 worth of securities upon the banks promise of 40% return on his investment and a guarantee that his money is safe. After six (6) months, however, petitioner learned that the value of his investment went down to US$7,000.00. He tried to withdraw his investment but was persuaded by Antonette de los Reyes of SCB to hold on to it for another six (6) months in view of the possibility that the market would pick up. Meanwhile, on November 27, 2000, the BSP found that SCB failed to comply with its directive of August 17, 1998. Consequently, it was fined in the amount of P30,000.00. The trend in the securities market, however, was bearish and the worth of petitioners investment went down further to only US$3,000.00. On October 26, 2001, petitioner learned from Marivel Gonzales, head of the SCB Legal and Compliance Department, that the latter had been prohibited by the BSP to sell GPTMF securities. Petitioner then filed with the BSP a letter-complaint demanding compensation for his lost investment. But SCB denied his demand on the ground that his investment is "regular." On July 15, 2003, petitioner filed with the Department of Justice (DOJ), represented herein by its prosecutors, public respondents, a complaint charging the above-named officers

and members of the SCB Board of Directors and other SCB officials, private respondents, with syndicated estafa, docketed as I.S. No. 2003-1059. For their part, private respondents filed the following as countercharges against petitioner: (1) blackmail and extortion, docketed as I.S. No. 2003-1059-A; and blackmail and perjury, docketed as I.S. No. 2003-1278. On September 29, 2003, petitioner also filed a complaint for perjury against private respondents Paul Simon Morris and Marivel Gonzales, docketed as I.S. No. 2003-1278-A. On December 4, 2003, the SEC issued a Cease and Desist Order against SCB restraining it from further offering, soliciting, or otherwise selling its securities to the public until these have been registered with the SEC. Subsequently, the SEC and SCB reached an amicable settlement.1awphi1.net On January 20, 2004, the SEC lifted its Cease and Desist Order and approved the P7 million settlement offered by SCB. Thereupon, SCB made a commitment not to offer or sell securities without prior compliance with the requirements of the SEC. On February 7, 2004, petitioner filed with the DOJ a complaint 9 for violation of Section 8.1 of the Securities Regulation Code against private respondents, docketed as I.S. No. 2004-229. On February 23, 2004, the DOJ rendered its Joint 10 Resolution dismissing petitioners complaint for syndicated estafa in I.S. No. 2003-1059; private respondents complaint for blackmail and extortion in I.S. No. 2003-1059-A; private respondents complaint for blackmail and perjury in I.S. No. 2003-1278; and petitioners complaint for perjury against private respondents Morris and Gonzales in I.S. No. 2003-1278-A. Meanwhile, in a Resolution dated April 4, 2004, the DOJ dismissed petitioners complaint in I.S. No. 2004-229 (violation of Securities Regulation Code), holding that it should have been filed with the SEC. Petitioners motions to dismiss his complaints were denied by the DOJ. Thus, he filed with the Court of Appeals a petition for certiorari, docketed as CA-G.R. SP No. 85078. He alleged that the DOJ acted with grave abuse of discretion amounting to lack or excess of jurisdiction in dismissing his complaint for syndicated estafa. He also filed with the Court of Appeals a separate petition for certiorari assailing the DOJ Resolution dismissing I.S. No. 2004-229 for violation of the Securities Regulation Code. This petition was docketed as CA-G.R. SP No. 87328. Petitioner claimed that the DOJ acted with grave abuse of discretion tantamount to lack or excess of jurisdiction in holding that the complaint should have been filed with the SEC. On January 7, 2005, the Court of Appeals promulgated its Decision dismissing the petition.1avvphi1.net It sustained the ruling of the DOJ that the case should have been filed initially with the SEC. Petitioner filed a motion for reconsideration but it was denied in a Resolution dated May 27, 2005. Meanwhile, on February 21, 2005, the Court of Appeals rendered its Decision in CA-G.R. SP No. 85078 (involving petitioners charges and respondents counter charges) dismissing the petition on the ground that the purpose of a petition for certiorari is not to evaluate and weigh the parties evidence but to determine whether the assailed Resolution of the DOJ was issued with grave abuse of discretion tantamount to lack of jurisdiction. Again, petitioner moved for a
11

reconsideration but it was denied in a Resolution of November 22, 2005. Hence, the instant petitions for review on certiorari. For our resolution is the fundamental issue of whether the Court of Appeals erred in concluding that the DOJ did not commit grave abuse of discretion in dismissing petitioners complaint in I.S. 2004-229 for violation of Securities Regulation Code and his complaint in I.S. No. 2003-1059 for syndicated estafa. G.R. No 168380 Re: I.S. No. 2004-229 For violation of the Securities Regulation Code Section 53.1 of the Securities Regulation Code provides: SEC. 53. Investigations, Injunctions and Prosecution of Offenses. 53. 1. The Commission may, in its discretion, make such investigation as it deems necessary to determine whether any person has violated or is about to violate any provision of this Code, any rule, regulation or order thereunder, or any rule of an Exchange, registered securities association, clearing agency, other self-regulatory organization, and may require or permit any person to file with it a statement in writing, under oath or otherwise, as the Commission shall determine, as to all facts and circumstances concerning the matter to be investigated. The Commission may publish information concerning any such violations and to investigate any fact, condition, practice or matter which it may deem necessary or proper to aid in the enforcement of the provisions of this Code, in the prescribing of rules and regulations thereunder, or in securing information to serve as a basis for recommending further legislation concerning the matters to which this Code relates: Provided, however, That any person requested or subpoenaed to produce documents or testify in any investigation shall simultaneously be notified in writing of the purpose of such investigation: Provided, further, That all criminal complaints for violations of this Code and the implementing rules and regulations enforced or administered by the Commission shall be referred to the Department of Justice for preliminary investigation and prosecution before the proper court: Provided, furthermore, That in instances where the law allows independent civil or criminal proceedings of violations arising from the act, the Commission shall take appropriate action to implement the same: Provided, finally; That the investigation, prosecution, and trial of such cases shall be given priority. The Court of Appeals held that under the above provision, a criminal complaint for violation of any law or rule administered by the SEC must first be filed with the latter. If the Commission finds that there is probable cause, then it should refer the case to the DOJ. Since petitioner failed to comply with the foregoing procedural requirement, the DOJ did not gravely abuse its discretion in dismissing his complaint in I.S. No. 2004-229. A criminal charge for violation of the Securities Regulation Code is a specialized dispute. Hence, it must first be referred to an administrative agency of special competence, i.e., the SEC. Under the doctrine of primary jurisdiction, courts will not determine a controversy involving a question within the jurisdiction of the administrative tribunal, where the question demands the exercise of sound administrative discretion requiring the specialized knowledge and expertise of said administrative tribunal to determine technical and intricate 12 matters of fact. The Securities Regulation Code is a special law. Its enforcement is particularly vested in the SEC. Hence, all complaints for any violation of the Code and its implementing rules and regulations should be filed with the SEC. Where the complaint is criminal in nature, the SEC shall indorse the complaint to the DOJ for preliminary investigation and prosecution as provided in Section 53.1 earlier quoted.

We thus agree with the Court of Appeals that petitioner committed a fatal procedural lapse when he filed his criminal complaint directly with the DOJ. Verily, no grave abuse of discretion can be ascribed to the DOJ in dismissing petitioners complaint. G.R. No. 170602 Re: I.S. No. 2003-1059 for Syndicated Estafa Section 5, Rule 110 of the 2000 Rules of Criminal Procedure, as amended, provides that all criminal actions, commenced by either a complaint or an information, shall be prosecuted under the direction and control of a public prosecutor. This mandate is founded on the theory that a crime is a breach of the security and peace of the people at large, an outrage against the very sovereignty of the State. It follows that a representative of the State shall direct and control the prosecution of the 13 offense. This representative of the State is the public prosecutor, whom this Court described in the old case 14 of Suarez v. Platon, as: [T]he representative not of an ordinary party to a controversy, but of a sovereignty whose obligation to govern impartially is as compelling as its obligation to govern at all; and whose interest, therefore, in a criminal prosecution is not that it shall win a case, but that justice shall be done. As such, he is in a peculiar and very definite sense a servant of the law, the twofold aim of which is that guilt shall not escape or innocence suffers. Concomitant with his authority and power to control the prosecution of criminal offenses, the public prosecutor is vested with the discretionary power to determine whether a prima 15 facie case exists or not. This is done through a preliminary investigation designed to secure the respondent from hasty, malicious and oppressive prosecution. A preliminary investigation is essentially an inquiry to determine whether (a) a crime has been committed; and (b) whether there is probable 16 cause that the accused is guilty thereof. In Pontejos v. Office 17 of the Ombudsman, probable cause is defined as such facts and circumstances that would engender a well-founded belief that a crime has been committed and that the respondent is probably guilty thereof and should be held for trial. It is the public prosecutor who determines during the preliminary investigation whether probable cause exists. Thus, the decision whether or not to dismiss the criminal complaint against the accused depends on the sound discretion of the prosecutor. Given this latitude and authority granted by law to the investigating prosecutor, the rule in this jurisdiction is that courts will not interfere with the conduct of preliminary investigations or reinvestigations or in the determination of what constitutes sufficient probable cause for the filing of 18 the corresponding information against an offender. Courts are not empowered to substitute their own judgment for that of 19 the executive branch. Differently stated, as the matter of whether to prosecute or not is purely discretionary on his part, courts cannot compel a public prosecutor to file the corresponding information, upon a complaint, where he finds the evidence before him insufficient to warrant the filing of an action in court. In sum, the prosecutors findings on the existence of probable cause are not subject to review by the courts, unless these are patently shown to have been 20 made with grave abuse of discretion. Grave abuse of discretion is such capricious and whimsical exercise of judgment on the part of the public officer concerned which is equivalent to an excess or lack of jurisdiction. The abuse of discretion must be as patent and gross as to amount to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law, as where the power is exercised in an arbitrary and despotic 21 manner by reason of passion or hostility.

In determining whether the DOJ committed grave abuse of discretion, it is expedient to know if the findings of factof herein public prosecutors were reached in an arbitrary or despotic manner. The Court of Appeals held that petitioners evidence is insufficient to establish probable cause for syndicated estafa. There is no showing from the record that private respondents herein did induce petitioner by false representations to invest in the GTPMF securities. Nor did they act as a syndicate to misappropriate his money for their own benefit. Rather, they invested it in accordance with his written instructions. That he lost his investment is not their fault since it was highly speculative. Records show that public respondents examined petitioners evidence with care, well aware of their duty to prevent material damage to his constitutional right to liberty and fair play. In Suarez previously cited, this Court made it clear that a public prosecutors duty is two-fold. On one hand, he is bound by his oath of office to prosecute persons where the complainants evidence is ample and sufficient to show prima facie guilt of a crime. Yet, on the other hand, he is likewise duty-bound to protect innocent persons from groundless, false, or malicious 22 prosecution. Hence, we hold that the Court of Appeals was correct in dismissing the petition for review against private respondents and in concluding that the DOJ did not act with grave abuse of discretion tantamount to lack or excess of jurisdiction. On petitioners complaint for violation of the Securities Regulation Code, suffice it to state that, as aptly declared by the Court of Appeals, he should have filed it with the SEC, not the DOJ. Again, there is no indication here that in dismissing petitioners complaint, the DOJ acted capriciously or arbitrarily. WHEREFORE, we DENY the petitions and AFFIRM the assailed Decisions of the Court of Appeals in CA-G.R. SP No. 87328 and in CA-G.R. SP No. 85078. Costs against petitioner. SO ORDERED. Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 150664 September 3, 2009

On May 12, 1993, petitioner amended his complaint to implead 3 respondent Johnson Mercader. On August 3, 1993, respondent Mercader filed his answer with 4 counterclaim. Respondent spouses Kersaw were declared in 5 default as they did not file an answer despite service of 6 summons by publication. On May 15, 1994, petitioner filed his second amended 7 complaint which the court granted. On March 30, 1994, respondent spouses Samaco filed their answer with 8 counterclaim, while respondent Mercader filed his on May 30, 9 1994. On December 12, 1995, the RTC dismissed petitioners complaint for lack of merit. Petitioner was likewise ordered to pay P70,000 to respondent spouses Samaco and respondent 11 12 Mercader by way of attorneys fees, litigation expenses and 13 moral damages. Not satisfied, petitioner appealed to the Court of Appeals 14 15 (CA). On October 27, 1999, the CA affirmed the RTC in toto. Petitioner then filed in the Supreme Court a motion for extension of time to file a petition for review on certiorari. His 16 motion was denied in a minute resolution because of 17 procedural lapses on his part. Petitioners motion for 18 reconsideration met the same fate. Consequently, the CA and the Supreme Court entered judgment on their rulings. Thus, the RTC decision dismissing petitioners complaint and holding him personally liable for P70,000 to respondent spouses Samaco and respondent Mercader became final and executory. On July 12, 2001, respondent Mercader filed a motion for 21 22 execution of the RTC decision. Petitioner opposed the motion, contending that he should not be made personally liable for the amount awarded by the RTC. The RTC judgment should be considered as a claim against the estate of Tereso Fernandez. Thus, the writ of execution should be referred to the court where the estate of Tereso Fernandez was being settled.1avvphi1 On August 30, 2001, the RTC granted respondent Mercaders 23 motion for execution. According to the RTC, there was no impediment to the execution of its decision because it had already become final and executory. Moreover, considering that the decision sought to be executed "(did) not involve money 24 claims," the writ of execution could not be directed against the estate of Tereso Fernandez. Petitioners motion for reconsideration
25 19 20 10

went unheeded.

26

VICENTE DACANAY, in his capacity as administrator of the Testate Estate of TERESO D. FERNANDEZ,Petitioner, vs. HON. RAPHAEL YRASTORZA, SR., in his official capacity as Presiding Judge, Regional Trial Court of Cebu, Branch 14, LUISSA ANNABELLA TORRANO SAMACO, assisted by her husband RAUL SAMACO, ROBERTA I. KERSAW, assisted by her husband BRYAN KERSAW and JOHNSON MERCADER,Respondents. RESOLUTION CORONA, J.: On July 14, 1992, petitioner Vicente Dacanay, as administrator of the testate estate of Tereso D. Fernandez, filed in the Regional Trial Court (RTC) of Cebu City a case for recovery of real property against respondent spouses Luissa and Raul 1 Samaco and Roberta and Bryan Kersaw. On December 22, 1992, respondent spouses Samaco filed their answer with 2 counterclaim.

Refusing to give up, petitioner filed this petition for certiorari in this Court. He reiterates his position that he should not be made personally liable to pay the P70,000 awarded by the RTC in favor of respondent spouses Samaco and respondent Mercader. At the outset, we note that petitioner filed his petition for certiorari directly in this Court. This is a violation of the doctrine of hierarchy of courts. He should have filed his petition in the 28 CA before seeking relief from this Court. Thus, this petition can be dismissed outright for being procedurally infirm. Moreover, the petition lacks merit. The RTC decision sought to be executed has long attained finality. Hence, petitioner can no longer question it. Once a judgment attains finality, it becomes immutable and unalterable. A final and executory judgment may no longer be modified in any respect, even if the modification is meant to correct what is perceived to be an erroneous conclusion of fact or law and regardless of whether the modification is attempted

27

to be made by the court rendering it or by the highest court of 29 the land. This is the doctrine of finality of judgment. It is grounded on fundamental considerations of public policy and sound practice that, at the risk of occasional errors, the judgments or orders of courts must become final at some 30 definite time fixed by law. Otherwise, there will be no end to litigations, thus negating the main role of courts of justice to assist in the enforcement of the rule of law and the maintenance of peace and order by settling justiciable 31 controversies with finality. The book of entries of judgment of the CA states that its decision in CA-G.R. CV No. 52731 on October 27, 1999 (which affirmed the RTC decision dismissing petitioners complaint and awarding P70,000 to respondent spouses Samaco and 32 respondent Mercader) became final on June 22, 2000. On the other hand, the book of entries of judgment of the Supreme Court states that its resolution in G.R. No. 143713 on August 9, 2000 (which denied petitioners motion for extension of time to file petition for review on certiorari) became final on February 33 14, 2001. Thus, respondent Mercader properly moved for the execution of the RTC decision on July 12, 2001. For the same reason, there was no legal impediment to the RTCs issuance of a writ of execution of its final and executory decision on August 30, 2001. WHEREFORE, the petition is hereby DISMISSED. Costs against petitioner. SO ORDERED.

Metamphetamine Hydrochloride (shabu), a regulated drug. CONTRARY TO LAW.

4

The case was docketed as Criminal Case No. 96-8443 and raffled to Branch 116 of the said court. Upon his arraignment, the petitioner entered a plea of not 5 guilty. Subsequently, on 30 April 1996, the petitioner filed a 6 Motion to Dismiss on the ground that the RTC had no jurisdiction to try the case considering that pursuant to Section 7 20 of R.A. No. 7659 as construed in People v. Simon, the penalty imposable for the offense charged should not exceed prision correccional or six (6) years and under R.A. No. 7691 it is the Metropolitan Trial Court which has jurisdiction over the case. In its Order of 9 May 1996, the RTC denied the motion. It held: It is true that under the aforementioned provision, cases punishable with penalties of not more than six (6) years are within the exclusive jurisdiction of the Metropolitan Trial Courts. However, the exceptions are "cases falling within the exclusive original jurisdiction of the Regional Trial Court. . ." Under Section 39 of Republic Act No. 6425, the Dangerous Drugs Act of 1972, the Court of First Instance now the Regional Trial Court and the Juvenile and Domestic Relations Court, which no longer exist, "shall have concurrent original jurisdiction over all cases involving offenses punishable under this Act." It is therefore clear that this case, which is a violation of Republic Act No. 6425, although punishable by a penalty of less than six (6) years, falls within the jurisdiction of the Regional Trial Court. His motion for the reconsideration of the order having been 10 denied, the petitioner filed with respondent Court of Appeals a petition for certiorari under Rule 65 of the Rules of 11 Court. The case was docketed as CA-G.R. SP No. 40670. In its Comment in CA-G.R. SP No. 40670, the Office of the Solicitor General (OSG) agreed with the petitioner that the RTC had no jurisdiction to try the criminal case. It, however, asserted that the Court of Appeals had no jurisdiction over the special civil action for certiorari, as the same involved only the question of jurisdiction of an inferior court, hence, cognizable by the Supreme Court alone pursuant to Section 9 of Batas Pambansa Bilang 129, in connection with Section 5(2)(c), Article VIII of the 1987 Constitution and Section 17 of Republic Act No. 5440. The OSG then recommended that the case be elevated to the Supreme Court for disposition, or that the Court of Appeals grant the petition and set aside the challenged order of the RTC should it rule that it had jurisdiction over petition. In its Resolution of 8 August 1996, the Court of Appeals dismissed the petition for certiorari for lack of jurisdiction over the action. Explaining its ruling, it declared: In his Comment to the petition, the Solicitor General, inter alia, contended that this Court has no jurisdiction over the petition for it properly falls within the exclusive jurisdiction of the Supreme Court. We fully agree. Section 5, Article VIII of the Constitution provides: Sec. 5. The Supreme Court shall have the following powers; . . . (2) Review, revise, reverse, modify, or affirm on appeal or certiorari as the law or the Rules of Court may provide, final judgments and orders of lower courts in: . . .
13 12 9 8

Republic of the Philippines SUPREME COURT Manila EN BANC

G.R. No. 126623 December 12, 1997 ERNESTO MORALES y DELA CRUZ, petitioner, vs. COURT OF APPEALS, HON. ALFREDO J. GUSTILO, as Presiding Judge of RTC, Pasay City, Branch 116 and PEOPLE OF THE PHILIPPINES, respondents.

DAVIDE, JR., J.: The key issue in this case is whether, in light of R.A. No. 1 2 7659 as interpreted in People v. Simon, and R.A. No. 3 7691, Regional Trial Courts have jurisdiction over violations of R.A. No. 6425, otherwise known as the Dangerous Drugs Act of 1972, as amended, when the imposable penalty is not more than six (6) years. The petitioner was charged with the violation of Section 15 in relation to Section 20 of R.A. No. 6425, as amended by R.A. No. 7659, in an information filed before the Regional Trial Court (RTC) of Pasay City on 13 March 1996. The accusatory portion of the said information reads as follows: That on or about the 11th day of March 1996, in Pasay, Metro Manila, Philippines, and within the jurisdiction of this Honorable Court, the above- named accused, Ernesto Morales y De la Cruz, without authority of law, did then and there wilfully, unlawfully and feloniously sell and deliver to another 0.4587 grams of

(c) All cases in which the jurisdiction of any lower court is in issue. . . . Section 17 of R.A. 5446 otherwise known as the Judiciary Act of 1948 says that the Supreme Court has exclusive jurisdiction to review, revise, reverse, modify or affirm on certiorari final judgments and decrees of inferior courts in all cases in which the jurisdiction of any inferior court is on issue. It is hereby stressed that the issue in the petition at bench is purely a question of jurisdiction which is resolvable on the basis of the records. After the denial on 13 September 1996 of his motion for 15 reconsideration, the petitioner came to this Court via this petition for review wider Rule 45 of the Rules of Court raising the following issues: I. WHETHER OR NOT THE COURT OF APPEALS HAS JURISDICTION TO ENTERTAIN A PETITION FOR CERTIORARI UNDER RULE 65 OF THE RULES OF COURT WHERE THE ISSUE IS THE JURISDICTION OF RESPONDENT RTC JUDGE TO TRY THE ALLEGED VIOLATION OF R.A. 6425; AND. II. WHETHER OR NOT RESPONDENT RTC JUDGE/COURT HAS JURISDICTION TO TRY ALLEGED VIOLATION OF SECTION 15, IN RELATION TO SECTION 20, ART. III OF R.A. 6425, AS AMENDED, INVOLVING ONLY 0.4587 GRAMS OF SHABU. As to the first, the petitioner insists that respondent Court of Appeals has concurrent original jurisdiction with this Court over petitions for certiorari under Rule 65 of the Rules of Court involving decisions or orders of Regional Trial Courts pursuant 16 17 to Section 9(1) of B.P. Blg. 129 in relation to Section 5(1) of Article VIII of the Constitution. He cites De Jesus v. Court of 18 Appeals wherein this Court held that the original jurisdiction of the Court of Appeals under Section 9 of B.P. Blg. 129 is concurrent with that of the Supreme Court, and with that of Regional Trial Courts for writs enforceable within their respective regions. The petitioner further maintains that Section 5(2)(c) of Article VIII of the Constitution and Section 17 of the Judiciary Act of 1948, as amended by R.A. No. 5440, relied upon by the Court Appeals are not applicable inasmuch as they relate to the appellate jurisdictionof this Court and not to an original action under Rule 65 of the Rules of Court. As regards the second issue, the petitioner asserts that the RTC below has no jurisdiction over the offense charged considering that only 0.4587 grams of methamphetamine hydrochloride (shabu) is involved. In light of Section 20 of R.A. 19 20 No. 7659, as interpreted in People v. Simon and further 21 22 explained in People v. Santos and Ordoez v. Vinarao, the imposable penalty therefor would not exceed prision correccional, whose maximum period is six (6) years. Hence, under R.A. No. 7691 exclusive original jurisdiction therein is vested in Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts. In its Comment on the petition, the OSG submits that all violations of R.A. No. 6425, as further amended by R.A. No. 7659, which are punishable by imprisonment not exceeding six years now fall under the jurisdiction of the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts. Since on the basis of the quantity of the regulated drug involved in this case the penalty imposable does not exceed prision correccional, it is the Metropolitan Trial Court of Pasay City which has jurisdiction over the case. It disagreed with the opinion of the RTC that violations of R.A. No. 6425, as amended, still fall within the jurisdiction of the RTC because the latter's jurisdiction thereon mandated by Section 39 of R.A. No. 6425 has been preserved by the exception provided for in the opening sentence of Section 32 of B.P. Blg. 129, as amended by Section 2 of R.A. No. 7691. It submits that Section 39 of R.A.
14

No. 6425 was repealed by Section 6 of R.A. No. 7691, which provides: Sec. 6. All laws, decrees, and orders inconsistent with the provisions of this Act shall be considered amended or modified accordingly. In support of its submission, it cites this Court's 23 resolution in Gulhoran v. Escao, Jr. The OSG further contends that respondent Court of Appeals was correct in dismissing the petition for certiorari for lack of jurisdiction in view of Section 9(3) of B.P. Blg. 129; Sec. 5(2)(c) of Article VIII of the Constitution; and Section 17 of the Judiciary Act of 1948, as amended by R.A. No. 5440. Nevertheless, it prays that this petition "be given due course and that Criminal Case No. 96-8443 be remanded to the proper metropolitan trial court for further proceedings." We resolved to give due course to this petition. The Court of Appeals erred in holding that it had no jurisdiction over petitioner's special civil action for certiorariunder Rule 65 of the Rules of Court. Under Section 9(1) of B.P. Blg. 129, the Court of Appeals has concurrent original jurisdiction with the Supreme Court pursuant to Section 5(1) of Article VIII of the Constitution and Section 17(1) of the Judiciary Act of 1948, and with the Regional Trial Court pursuant to Section 21(7) of B.P. Blg. 129 to issue writs of certiorari, mandamus, prohibition, habeas corpus, and quo 24 warranto. These are original actions, not modes of appeals. Since what the petitioner filed in CA-G.R. SP No. 40670 was a special civil action for certiorari under Rule 65, the original jurisdiction of the Court of Appeals thereon is beyond doubt. This error of the Court of Appeals was due to its misapplication of Section 5(2)(c) of Article VIII of the Constitution and of that portion of Section 17 of the Judiciary Act of 1948 vesting upon the Supreme Court exclusive jurisdiction to review, revise, reverse, modify, or affirm on certiorari as the law or rules of court may provide, final judgments and decrees of inferior courts in all cases in which the jurisdiction of any inferior court is in issue. It forgot that this constitutional and statutory provisions pertain to the appellate not original jurisdiction of the Supreme Court, as correctly maintained by the petitioner. An appellate jurisdiction refers to a process which is but a continuation of the original suit, not a commencement of a new action, such as that of a special civil action for certiorari. The general rule is that a denial of a motion to dismiss or to quash in criminal cases is interlocutory and cannot be the subject of an appeal or of a special civil action for certiorari. Nevertheless, this Court has allowed a special civil action for certiorari where a lower court has acted without or in excess of jurisdiction or with grave abuse of discretion in denying a motion to dismiss or 25 to quash. The petitioner believed that the RTC below did so; hence, the special civil action for certiorari before the Court of Appeals appeared to be the proper remedy. The next most logical step then is for us to simply set aside the challenged resolutions and to direct the Court of Appeals to resolve on the merits the petition in CA-G.R. SP No. 40670. But, that would further delay the case. Considering the special importance of the lone legal issue raised, which can be resolved on the basis of the pleadings heretofore filed, and the fact that this Court has concurrent jurisdiction over petitioner's special action in CA-G.R. SP No. 40670, we deem it more practical and in the greater interest of justice not to remand the case to the Court of Appeals but, instead, to take direct cognizance thereof 26 and resolve it once and for all. We now address the second issue.

Applying by analogy the ruling in People v. Simon, People v. De 28 29 30 Lara, People v. Santos, and Ordoez v. Vinarao, the imposable penalty in this case which involves 0.4587grams of shabu should not exceed prision correccional. We say by analogy because these cases involved marijuana, not methamphetamine hydrochloride (shabu). In Section 20 of R.A. No. 6425, as amended by Section 17 of R.A. No. 7659, the maximum quantities of marijuana and methamphetamine hydrochloride for purposes of imposing the maximum penalties are not the same. For the latter, if the quantity involved is 200 grams or more, the penalty of reclusion perpetua to death and a fine ranging from P500,000 to P10 million shall be imposed. Accordingly, if the quantity involved is below 200 grams, the imposable penalties should be as follows: a) reclusion temporal if the quantity involved is from 134 to 199 grams; b) prision mayor if the quantity involved is from 66 to 133 grams; c) prision correccional if the quantity involved is 65 grams or below. Clearly, the penalty which may be imposed for the offense charged in Criminal Case No. 96-8443 would at most be only prision correccional whose duration is from six (6) months and one (1) day to six (6) years. Does it follow then that, as the petitioner insists, the RTC has no jurisdiction thereon in view of the amendment of Section 32 of B.P. Blg. 129 by R.A. No. 7691, which vested upon Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts' 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? This section 32 as thus amended now 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 Court and of the Sandiganbayan, the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts shall exercise: (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 offender 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. The exception in the opening sentence is of special significance which we cannot disregard. By virtue thereof, the exclusive original jurisdiction of the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts in criminal cases does not cover those cases which by provision of law fall within the exclusive original jurisdiction of Regional Trial Courts and of the Sandiganbayan regardless of the prescribed penalty. Otherwise put, even if such cases are punishable by imprisonment not exceeding six years ( i.e., prision correccional, arresto mayor, or arresto menor), jurisdiction, thereon is retained by the Regional Trial Courts or the Sandiganbayan, as the case may be. The aforementioned exception refers not only to Section 20 of B.P. Blg. 129 providing for the jurisdiction of Regional Trial 31 Courts in criminal cases, but also to other laws which specifically lodge in Regional Trial Courts exclusive jurisdiction over specific criminal cases, e.g., (a) Article 360 of the Revised

27

Penal Code, as amended by R.A. Nos. 1289 and 4363 on written defamation or libel; (b) Decree on intellectual Property (P.D. No. 49, as amended), which vests upon Courts of First Instance exclusive jurisdiction over the cases therein mentioned regardless of the imposable penalty; and (c) more appropriately for the case at bar, Section 39 of R.A. No. 6425, as amended by P.D. No. 44, which vests on Courts of First Instance, Circuit Criminal Courts, and the Juvenile and Domestic Relations Courts concurrent exclusive original jurisdiction over all cases involving violations of said Act. Jurisdiction is, of course, conferred by the Constitution or by Congress. Outside the cases enumerated in Section 5(2) of Article VIII of the Constitution, Congress has the plenary power to define, prescribe and apportion the jurisdiction of various 32 courts. Accordingly, Congress may, by law, provide that a certain class of cases should be exclusively heard and determined by one court. Such would be a special law and must be construed as an exception to the general law on jurisdiction of courts, namely, the Judiciary Act of 1948 as amended, or the Judiciary Reorganization Act of 1980. In short, the special law prevails over the general law. R.A. No. 7691 can by no means be considered another special law on jurisdiction but merely an amendatory law intended to amend specific sections of the Judiciary Reorganization Act of 1980. Hence, it does not have the effect of repealing or modifying Article 360 of the Revised Penal Code; Section 57 of the Decree on Intellectual Property; and Section 39 of R.A. No. 6425, as amended by P.D. No. 44. In a manner of speaking, R.A. No. 7691 was absorbed by the mother law, the Judiciary Reorganization Act of 1980. That Congress indeed did not intend to repeal these special laws vesting exclusive jurisdiction in the Regional Trial Courts over certain cases is clearly evident from the exception provided for in the opening sentence of Section 32 of B.P. Blg. 129, as amended by R.A. No. 7691. These special laws are not, therefore, covered by the repealing clause (Section 6) of R.A. No. 7691. Neither can it be successfully argued that Section 39 of R.A. No. 6425, as amended by P.D. No. 44, is no longer operative because Section 44 of B.P. Blg. 129 abolished the Courts of First Instance, Circuit Criminal Courts, and Juvenile and Domestic Relations Courts. While, indeed, Section 44 provides that these courts were to be "deemed automatically abolished" upon the declaration by the President that the reorganization provided in B.P. Blg. 129 had been completed, this Court should not lose sight of the fact that the Regional Trial Courts merely replaced the Courts of First Instance as clearly borne out by the last two sentences of Section 44, to wit: Upon such declaration, the said courts shall be deemed automatically abolished and the incumbents thereof shall cease to hold office. The cases pending in the old Courts shall be transferred to the appropriate Courts constituted pursuant to this Act, together with the pertinent functions, records, equipment, property and necessary personnel. In short, there was a change in name only from Courts of First Instance to Regional Trial Courts. The Interim Rules and Guidelines Relative to the Implementation of B.P. Blg. 129 promulgated by this Court on 11 January 1983 also provides that the reference to the courts of first instance in the Rules of Court shall be deemed changed to the regional trial courts. Consequently, it is not accurate to state that the "abolition" of the Courts of First Instance carried with it the abolition of their exclusive original jurisdiction in drug cases vested by Section 39 of R.A. No. 6425, as amended by P. D. No. 44. If that were so, then so must it be with respect to Article 360 of the Revised

Penal Code and Section 57 of the Decree on Intellectual Property. On the contrary, in the resolution of 19 June 1996 33 in Caro v.Court of Appeals and in the resolution of 26 34 February 1997 in Villalon v. Baldado, this Court expressly ruled that Regional Trial Courts have the exclusive original jurisdiction over libel cases pursuant to Article 360 of the Revised Penal Code. In Administrative Order No. 104-96 this Court mandates that: LIBEL CASES SHALL BE TRIED BY THE REGIONAL TRIAL COURTS HAVING JURISDICTION OVER THEM TO THE EXCLUSION OF THE METROPOLITAN TRIAL COURTS, MUNICIPAL TRIAL COURTS IN CITIES, MUNICIPAL TRIAL COURTS AND MUNICIPAL CIRCUIT TRIAL COURT. It likewise provides that jurisdiction over cases involving violations of intellectual property rights are "confined exclusively to the Regional Trial Courts." The same Administrative Order recognizes that violations of RA. No. 6426, as amended, regardless of the quantity involved, are to be tried and decided by the Regional Trial Courts therein designated as special courts. As to the latter, this Court in its Resolution of 15 April 1997 in A.M. No. 96-11-42135 RTC, resolved as follows: . . . to AMEND Administrative Order No. 10496, dated October 21, 1996, with respect only to the violation of the Dangerous Drugs Act of 1972, as amended, if the imposable penalty is reclusion perpetua to death. Thus, if the imposable penalty is below reclusion perpetua the drug related cases will be raffled among the regular courts as ordinary criminal cases. Thereafter, in Circular No. 31-97 dated 15 May 1997, the Court Administrator directed Judges of "special courts for Kidnapping, Robbery, Carnapping, Dangerous Drugs and other Heinous Crimes" to comply with the aforesaid amendment to Administrative Order No. 104-96. To avoid any further confusion or misunderstanding, we hereby declare that the term "regular courts" found in the above amendment refers exclusively to the Regional Trial Courts and was not intended to include Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts. In view of the foregoing, the Court hereby abandons the 36 resolution in Gulhoran v. Escao where, through the Second Division, we ruled, in effect, that Section 39 of R.A. No. 6425, as amended, was repealed by virtue of the repealing clause of R.A. No. 7691. The RTC then did not commit any error in denying petitioner's motion to dismiss Civil Case No. 96-8443. WHEREFORE, the petition is GRANTED, but only insofar as the issue of jurisdiction of respondent Court of Appeals in CAG.R. SP No. 40670 is concerned. The Resolutions of 8 August and 13 September 1996 of the Court of Appeals are SET ASIDE, while the challenged orders in Criminal Case No. 968443 of the Regional Trial Court of Pasay City, Branch 116, are AFFIRMED. The trial court is hereby DIRECTED to proceed with the trial of Criminal Case No. 96-8443 with all reasonable dispatch. No pronouncements as to costs. SO ORDERED. G.R. No. 166833

Republic of the Philippines SUPREME COURT Manila THIRD DIVISION November 30, 2006

FELIXBERTO CUBERO, NERISSA C. NATIVIDAD, JUDY U. LIM, MANUEL R. LAHOZ, SOTERO DIOLA and BELLE CORPORATION, Petitioners, vs. LAGUNA WEST MULTI-PURPOSE COOPERATIVE, INC., and ATTY. ABRAHAM BERMUDEZ, in his capacity as Registrar of Deeds, Tanauan City, Batangas Respondents. DECISION CARPIO MORALES, J.: The present petition raises the issue of jurisdiction over the subject matter. Individual petitioners Felixberto Cubero, Nerrisa C. Natividad, Judy U. Lim, Manuel R. Lahoz and Sotero Diola are the registered owners of various parcels of land covered by twelve 2 (12) Transfer Certificates of Title (TCTs). The properties cover a total land area of about 78,178 square meters located in Barangay Suplang, Tanauan, Batangas. In August 2003, each of the individual petitioners entered into a Joint Venture Development Agreement with co-petitioner Belle Corporation to develop the properties as part of an agricultural farm lot subdivision project known as "Plantation Hills at Tagaytay Greenlands Phase I" (the Project) for eventual sale to 3 the public. With the development of the Project in full swing in mid-2004, respondent Laguna West Multi-Purpose Cooperative, Inc. 4 (Laguna West Cooperative) filed 9 ex-parte petitions with the Regional Trial Court (RTC) of Tanauan City, for inscription of an adverse claim, the annotation of which the Registrar of Deeds allegedly failed to carry over to the TCTs of individual 5 petitioners under the Property Registration Decree . In its petitions before the RTC, respondent Laguna West Cooperative claimed that as early as April 1996 it entered into separate Joint Venture Agreements (JVAs) with the herein individual petitioners predecessors-in-interest Zacarias P. 6 Narvaez, Filizardo N. Contreras, Eladio Contreras, Anacleto P. Narvaez, Victor P. Ortilla, Rafael Maranan, Felipe Maranan, Elino B. Mangubat, Joaquin N. Olaes and Salvador 7 Alberto; and that it registered the JVAs in August 2000 on the previous owners titles by way of an Adverse Claim under Entry No. 199352 and/or 168016. Laguna West Cooperative added that the petitions were filed to rectify the omission or error and to protect its vested, subsisting and valid rights under the JVAs. Accompanying the petitions were Notices of Lis 8 Pendens addressed to the Register of Deeds, Tanauan, 9 Batangas. Getting wind of the petitions filed by Laguna West Cooperative, 10 petitioners also filed a Complaint with the RTC of Tanauan, for "Annulment of Joint Venture Agreements with prayer for the issuance of a TRO and/or writs of Preliminary Injunction and Preliminary Mandatory Injunction and for Damages" against herein respondents Laguna West Cooperative and Atty. 11 Abraham Bermudez in the latters capacity as Registrar of Deeds of Tanauan.
1

In their Complaint, petitioners asserted that the April 1996 JVAs between Laguna West Cooperative and individual petitioners predecessors-in-interest are void ab initio since they were executed within the 10-year prohibitory period under Republic Act No. 6657 (Comprehensive Agrarian Reform Law of 12 1988), the titles covering the properties having emanated from emancipation patents granted in November 1988 pursuant to Presidential Decree No. 27. Petitioners alleged too in their complaint that the JVAs fall under management contracts prohibited under Republic Act No. 6657. Invoking Article 1409 of the Civil Code, petitioners urged the RTC to declare the JVAs inexistent and void for being contrary to law and public policy. By Order of September 15, 2004, the RTC dismissed petitioners complaint, finding . . . that [as] the JVAs cover or involve land grants under the Presidential Decree No. 27 and allied agrarian reform laws, the Department of Agrarian Reform, through its adjudication board (DARAB), has primary jurisdiction to determine the validity or 14 invalidity thereof. For lack of merit, the RTC denied petitioners motion for reconsideration, hence, the present petition for review on certiorari which raises a pure question of law. The petition fails. It is axiomatic that what determines the nature of an action, as well as which court has jurisdiction over it, are the allegations in 15 the complaint and the character of the relief sought. In the determination of jurisdiction, the status or relationship of the parties, as well as the nature of the question that is the subject 16 of their controversy, is also considered. The Department of Agrarian Reform (DAR) is vested with primary jurisdiction to determine and adjudicate agrarian reform matters, with exclusive original jurisdiction over all matters involving the implementation of agrarian reform except those falling under the exclusive jurisdiction of the Department of Agriculture and the Department of Environment and Natural 17 Resources. Original jurisdiction means jurisdiction to take cognizance of a cause at its inception, try it and pass judgment upon the law and facts, while exclusive jurisdiction precludes the idea of co-existence and refers to jurisdiction possessed to 18 the exclusion of others. The DARAB has been created to assume the adjudicative 19 powers and functions of the DAR. Thus, the DARAB has been vested with jurisdiction to try and decide all agrarian disputes, cases, controversies, and matters or incidents involving the implementation of the Comprehensive Agrarian 20 Reform Program (CARP). Its jurisdiction encompasses cases involving the "rights and obligations of persons, whether natural or juridical, engaged in the management, cultivation and use of all agricultural lands" covered by Republic Act No. 6657 and 21 other agrarian laws. The RTC amplified its dismissal of petitioners complaint in this wise: There is no question that the instant case does not involve agrarian dispute and that the parties have no tenurial relationship. The Court dismissed the complaint not because the subject of the questioned JVAs is an agricultural land as erroneously assumed by the plaintiffs. The complaint was dismissed because it involves controversy or issue in the implementation of R.A. 6657 that is whether or not the agricultural land beneficiaries has reneged its (sic) obligation by entering in the joint venture agreements and whether the terms thereof are violative of Sections 27 and 73 of the said Act
13

including the restrictions annotated on the emancipation patents 22 certificates[.] (Underscoring supplied) The finding of the RTC that petitioners complaint does not involve an agrarian dispute is a narrow and restrictive view of the nature of an agrarian dispute. In the recent case of Islanders CARP-Farmers Beneficiaries Multi-Purpose Cooperative Development, Inc. v. Lapanday Agricultural and 23 Development Corp., this Court elucidated on the scope of an agrarian dispute, viz: The Department of Agrarian Reform Adjudication Board (DARAB) has jurisdiction to determine and adjudicate all agrarian disputes involving the implementation of the Comprehensive Agrarian Reform Law (CARL). Included in the definition of agrarian disputes are those arising from other tenurial arrangements beyond the traditional landowner-tenant or lessor-lessee relationship. Expressly, these arrangements are recognized by Republic Act No. 6657 as essential parts of agrarian reform. Thus, the DARAB has jurisdiction over disputes arising from the instant Joint Production Agreement 24 entered into by the present parties. (Emphasis and underscoring supplied). In that case, the petitioner filed with the RTC a complaint for declaration of nullity of a Joint Production Agreement.1wphi1 Upon motion, the case was dismissed for lack of jurisdiction. The Court of Appeals affirmed the dismissal. The petitioner elevated the matter to this Court, contending that there being no tenancy or leasehold relationship between the parties, the case does not constitute an agrarian dispute cognizable by the DARAB. In denying the petition in Islanders, this Court held that while the relationship between the parties was not one of tenancy or agricultural leasehold, the controversy nonetheless fell within the sphere of agrarian disputes, citing, among other 25 authorities, Department of Agrarian Reform v. Cuenca, which held: All controversies on the implementation of the Comprehensive Agrarian Reform Program (CARP) fall under the jurisdiction of the Department of Agrarian Reform (DAR), even though they raise questions that are also legal or constitutional in nature. All doubts should be resolved in favor of the DAR, since the law has granted it special and original authority to hear and 26 adjudicate agrarian matters. The JVAs subject of the petition for annulment of petitioners precisely involve the development and utilization of the subject agricultural lands. As successors-in-interest of the beneficiaries of the agricultural lands, individual petitioners seek to nullify the JVAs. Since the controversy involves the rights and obligations of persons engaged in the management, cultivation and use of an agricultural land covered by CARP, the case falls squarely 27 within the jurisdictional ambit of the DAR. It bears emphasis that a resolution of the instant case principally entails a determination of the alleged commission of 28 prohibited acts under Sections 27 and 73 of Republic Act No. 6645. In cases where allegations of violation or circumvention of land reform laws have been raised, this Court has declined to address them, it stating that petitioners must first plead their 29 case with the DARAB. There is no reason why this Court should now hold otherwise. WHEREFORE, the petition is hereby DENIED. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 154112 September 23, 2004

Land Bank of the Philippines for Annulment of Notice of Coverage and Declaration of Unconstitutionality of E.O. No. 405, Series of 1990, With Preliminary Injunction and Restraining Order. The case was docketed as Civil Case No. 713. "In his complaint, Cuenca alleged, inter alia, that the implementation of CARP in his landholding is no longer with authority of law considering that, if at all, the implementation should have commenced and should have been completed between June 1988 to June 1992, as provided in the Comprehensive Agrarian Reform Law (CARL); that the placing of the subject landholding under CARP is without the imprimatur of the Presidential Agrarian Reform Council (PARC) and the Provincial Agrarian Reform Coordinating Committee (PARCOM) as required by R.A. 7905; that Executive Order No. 405 dated 14 June 1990 amends, modifies and/or repeals CARL and, therefore, it is unconstitutional considering that on 14 June 1990, then President Corazon Aquino no longer had law-making powers; that the NOTICE OF COVERAGE is a gross violation of PD 399 dated 28 February 1974. "Private respondent Cuenca prayed that the Notice of Coverage be declared null and void ab initio and Executive Order No. 405 dated 14 June 1990 be declared unconstitutional. "On 05 October 1999, MARO Noe Fortunado filed a motion to dismiss the complaint on the ground that the court a quo has no jurisdiction over the nature and subject matter of the action, pursuant to R.A. 6657. "On 12 January 2000, the respondent Judge issued a Temporary Restraining Order directing MARO and LBP to cease and desist from implementing the Notice of Coverage. In the same order, the respondent Judge set the hearing on the application for the issuance of a writ of preliminary injunction on January 17 and 18, 2000. "On 14 January 2000, MARO Fortunado filed a Motion for Reconsideration of the order granting the TRO contending inter alia that the DAR, through the MARO, in the course of implementing the Notice of Coverage under CARP cannot be enjoined through a Temporary Restraining Order in the light of Sections 55 and 68 of R.A. 6657. "In an order dated 16 February 2000, the respondent Judge denied MARO Noe Fortunados motion to dismiss and issued a Writ of Preliminary Injunction directing Fortunado and all persons acting in his behalf to cease and desist from implementing the Notice of Coverage, and the LBP from proceeding with the determination of the value of the subject land. "The Department of Agrarian Reform (DAR) [thereafter filed before the CA] a petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure, assailing the writ of preliminary injunction issued by respondent Judge on the ground of grave abuse of discretion amounting to lack of jurisdiction. "It is the submission of the petitioner that the assailed order is in direct defiance of Republic Act 6657, particularly Section 55 and 68 thereof, which read: SECTION 55. NO RESTRAINING ORDERS OR PRELIMINARY INJUNCTIONS No court in the Philippines shall have jurisdiction to issue any restraining order or writ of preliminary injunction against the PARC or any of its duly authorized or designated agencies in any case, dispute or controversy arising from, necessary to, or in connection with the application,

DEPARTMENT OF AGRARIAN REFORM, petitioner, vs. ROBERTO J. CUENCA and Hon. ALFONSO B. COMBONG JR., in His Capacity as the Presiding Judge of the Regional Trial Court, Branch 63, La Carlota City, respondents. DECISION PANGANIBAN, J.: All controversies on the implementation of the Comprehensive Agrarian Reform Program (CARP) fall under the jurisdiction of the Department of Agrarian Reform (DAR), even though they raise questions that are also legal or constitutional in nature. All doubts should be resolved in favor of the DAR, since the law has granted it special and original authority to hear and adjudicate agrarian matters. The Case Before us is a Petition for Review under Rule 45 of the Rules 2 of Court, assailing the March 15, 2002 Decision and the June 3 18, 2002 Resolution of the Court of Appeals in CA-GR SP No. 58536. In the challenged Decision, the CA disposed as follows: "As previously stated, the principal issue raised in the court below involves a pure question of law. Thus, it being clear that the court a quo has jurisdiction over the nature and subject matter of the case below, it did not commit grave abuse of discretion when it issued the assailed order denying petitioners motion to dismiss and granting private respondents application for the issuance of a writ of preliminary injunction. "WHEREFORE, premises considered, the petition is 4 denied due course and is accordingly DISMISSED." The assailed Resolution, on the other hand, denied petitioners Motion for Reconsideration. The Facts The CA narrated the facts as follows: "Private respondent Roberto J. Cuenca is the registered owner of a parcel of land designated as Lot No. 816-A and covered by TCT No. 1084, containing an area of 81.6117 hectares, situated in Brgy. Haguimit, La Carlota City and devoted principally to the planting of sugar cane. "On 21 September 1999, Noe Fortunado, Municipal Agrarian Reform Officer (MARO) of La Carlota City issued and sent a NOTICE OF COVERAGE to private respondent Cuenca placing the above-described landholding under the compulsory coverage of R.A. 6657, otherwise known as the Comprehensive Agrarian Reform Program (CARP). The NOTICE OF COVERAGE also stated that the Land Bank of the Philippines (LBP) will determine the value of the subject land pursuant to Executive Order No. 405 dated 14 June 1990. "On 29 September 1999, private respondent Cuenca filed with the Regional Trial Court, Branch 63, La Carlota City, a complaint against Noe Fortunado and
1

implementation, or enforcement or interpretation of this Act and other pertinent laws on agrarian reform. SECTION 68 IMMUNITY OF GOVERNMENT AGENCIES FROM COURTS INTERFERENCE No injunction, Restraining Order, prohibition or mandamus shall be issued by the lower court against the Department of Agrarian Reform (DAR), the Department of Agriculture (DA), the Department of Environment and Natural Resources (DENR), and the Department of Justice (DOJ) in the implementation of their program. "Petitioner contends that by virtue of the above provisions, all lower courts, such as the court presided over by respondent Judge, are barred if not prohibited by law to issue orders of injunctions against the Department of Agrarian Reform in the full implementation of the Notice of Coverage which is the initial step of acquiring lands under R.A. 6657. "Petitioner also contends that the nature and subject matter of the case below is purely agrarian in character over which the court a quo has no jurisdiction and that therefore, it had no authority to issue the assailed 5 injunction order." Ruling of the Court of Appeals Stressing that the issue was not simply the improper issuance of the Notice of Coverage, but was mainly the constitutionality of Executive Order No. 405, the CA ruled that the Regional Trial Court (RTC) had jurisdiction over the case. Consonant with that authority, the court a quo also had the power to issue writs and processes to enforce or protect the rights of the parties. The appellate court likewise held that petitioners reliance on Sections 55 and 68 of RA 6657 had been misplaced, because the case was not about a purely agrarian matter. It opined that the prohibition in certain statutes against such writs pertained only to injunctions against administrative acts, to controversies involving facts, or to the exercise of discretion in technical cases. But on issues involving pure questions of law, courts were not prevented from exercising their power to restrain or prohibit administrative acts. Hence, this Petition.
6

In its bare essentials, petitioners argument is that private respondent, in his Complaint for Annulment of the Notice of Coverage, is asking for the exclusion of his landholding from the coverage of the Comprehensive Agrarian Reform Program (CARP). According to the DAR, the issue involves the implementation of agrarian reform, a matter over which the DAR has original and exclusive jurisdiction, pursuant to Section 50 of the Comprehensive Agrarian Reform Law (RA 6657). On the other hand, private respondent maintains that his Complaint assails mainly the constitutionality of EO 405. He contends that since the Complaint raises a purely legal issue, it thus falls within the jurisdiction of the RTC. We do not agree. Conflicts involving jurisdiction over agrarian disputes are as tortuous as the history of Philippine agrarian reform laws. The changing jurisdictional landscape is matched only by the tumultuous struggle for, and resistance to, the breaking up and distribution of large landholdings. Two Basic Rules Two basic rules have guided this Court in determining jurisdiction in these cases. First, jurisdiction is conferred by 8 law. And second, the nature of the action and the issue of jurisdiction are shaped by the material averments of the 9 complaint and the character of the relief sought. The defenses resorted to in the answer or motion to dismiss are disregarded; otherwise, the question of jurisdiction would depend entirely 10 upon the whim of the defendant. Grant of Jurisdiction Ever since agrarian reform legislations began, litigants have invariably sought the aid of the courts. Courts of Agrarian 11 Relations (CARs) were organized under RA 1267 "[f]or the enforcement of all laws and regulations governing the relation of capital and labor on all agricultural lands under any system of cultivation." The jurisdiction of these courts was spelled out in Section 7 of the said law as follows: "Sec. 7. Jurisdiction of the Court. - The Court shall have original and exclusive jurisdiction over the entire Philippines, to consider, investigate, decide, and settle all questions, matters, controversies or disputes involving all those relationships established by law which determine the varying rights of persons in the cultivation and use of agricultural land where one of the parties works the land, and shall have concurrent jurisdiction with the Court of First Instance over employer and farm employee or labor under Republic Act Numbered six hundred two and over landlord and tenant involving violations of the Usury Law (Act No. 2655, as amended) and of inflicting the penalties provided therefor." All the powers and prerogatives inherent in or belonging to the 12 then Courts of First Instance (now the RTCs) were granted to the CARs. The latter were further vested by the Agricultural Land Reform Code (RA 3844) with original and exclusive jurisdiction over the following matters: "(1) All cases or actions involving matters, controversies, disputes, or money claims arising from agrarian relations: x x x "(2) All cases or actions involving violations of Chapters I and II of this Code and Republic Act Number eight hundred and nine; and "(3) Expropriations to be instituted by the Land 13 Authority: x x x."

Issues In its Memorandum, petitioner raises the following issues: "1. The Honorable Court of Appeals committed serious error by not taking into cognizance that the issues raised in the complaint filed by the private respondent, which seeks to exclude his land from the coverage of the CARP, is an agrarian reform matter and within the jurisdiction of the DAR, not with the trial court. "2. The Honorable Court of Appeals, with due respect, gravely abused its discretion by sustaining the writ of injunction issued by the trial court, which is a violation 7 of Sections 55 and 68 of Republic Act No. 6657." The Courts Ruling The Petition has merit. First Issue: Jurisdiction

Presidential Decree (PD) No. 946 thereafter reorganized the CARs, streamlined their operations, and expanded their jurisdiction as follows: "Sec. 12. Jurisdiction over Subject Matter. - The Courts of Agrarian Relations shall have original and exclusive jurisdiction over: a) Cases involving the rights and obligations of persons in the cultivation and use of agricultural land except those cognizable by the National Labor Relations Commission; x x x ; b) Questions involving rights granted and obligations imposed by laws, Presidential Decrees, Orders, Instructions, Rules and Regulations issued and promulgated in relation to the agrarian reform program; Provided, however, That matters involving the administrative implementation of the transfer of the land to the tenant-farmer under Presidential Decree No. 27 and amendatory and related decrees, orders, instructions, rules and regulations, shall be exclusively cognizable by the Secretary of Agrarian Reform, namely: (1) classification landholdings; (2) x x x; (3) parcellary mapping; (4) x x x; xxx xxx xxx and identification of

In Quismundo v. CA, this provision was deemed to have repealed Section 12 (a) and (b) of Presidential Decree No. 946, which vested the then Courts of Agrarian Relations with "original exclusive jurisdiction over cases and questions involving rights granted and obligations imposed by presidential issuances promulgated in relation to the agrarian reform program." Under Section 4 of Executive Order No. 129-A, the DAR was also made "responsible for implementing the Comprehensive Agrarian Reform Program." In accordance with Section 5 of the same EO, it possessed the following powers and functions: "(b) Implement all agrarian laws, and for this purpose, punish for contempt and issue subpoena, subpoena duces tecum, writs of execution of its decisions, and other legal processes to ensure successful and expeditious program implementation; the decisions of the Department may in proper cases, be appealed to the Regional Trial Courts but shall be immediately executory notwithstanding such appeal; xxx xxx xxx

18

"(h) Provide free legal services to agrarian reform beneficiaries and resolve agrarian conflicts and landtenure related problems as may be provided for by law; xxx xxx xxx

"(l) Have exclusive authority to approve or disapprove conversion of agricultural lands for residential, commercial, industrial, and other land uses as may be provided x x x." The above grant of jurisdiction to the DAR covers these areas: (a) adjudication of all matters implementation of agrarian reform; involving

m) Cases involving expropriation of all kinds of land in furtherance of the agrarian reform program; xxx xxx xxx

p) Ejectment proceedings instituted by the Department of Agrarian Reform and the Land Bank involving lands under their administration and disposition, except urban properties belonging to the Land Bank; q) Cases involving violations of the penal provisions of Republic Act Numbered eleven hundred and ninetynine, as amended, Republic Act Numbered thirty eight hundred and forty-four, as amended, Presidential Decrees and laws relating to agrarian reform; Provided, however, That violations of the said penal provisions committed by any Judge shall be tried by the courts of general jurisdiction; and r) Violations of Presidential Decrees Nos. 815 and 816. The CARs were abolished, however, pursuant to Section 44 of 15 Batas Pambansa Blg. 129 (approved August 14, 1981), which had fully been implemented on February 14, 1983. Jurisdiction over cases theretofore given to the CARs was vested in the 16 RTCs. Then came Executive Order No. 229. Under Section 17 thereof, the DAR shall exercise "quasi-judicial powers to determine and adjudicate agrarian reform matters, and shall have exclusive jurisdiction over all matters involving implementation of agrarian reform, except those falling under the exclusive original jurisdiction of the DENR and the Department of Agriculture [DA]." The DAR shall also have the "powers to punish for contempt and to issue subpoena, subpoena duces tecum and writs to enforce its orders or decisions."
17 14

(b) resolution of agrarian conflicts and land tenure related problems; and (c) approval or disapproval of the conversion, restructuring or readjustment of agricultural lands into residential, commercial, industrial, and other non-agricultural uses. The foregoing provision was as broad as those "theretofore vested in the Regional Trial Court by Presidential Decree No. 19 946," as the Court ruled in Vda. de Tangub v. CA, which we quote: "x x x. The intention evidently was to transfer original jurisdiction to the Department of Agrarian Reform, a proposition stressed by the rules formulated and promulgated by the Department for the implementation of the executive orders just quoted. The rules included the creation of the Agrarian Reform Adjudication Board designed to exercise the adjudicatory functions of the Department, and the allocation to it of x x x [O]riginal and exclusive j urisdiction over the subject matter vested upon it by law, and all cases, disputes, controversies and matters or incidents involving the implementation of the Comprehensive Agrarian Reform Program under Executive Order No. 229, Executive Order No. 129-A, Republic Act No. 3844, as amended by Republic Act No. 6289, Presidential Decree No. 27 and other agrarian laws and their implementing rules and regulations.

"The implementing rules also declare that (s)pecifically, such jurisdiction shall extend over but not be limited to x x x (that theretofore vested in the Regional Trial Courts, i.e.) (c)ases involving the rights and obligations of persons engaged in the cultivation and use of agricultural land covered by the Comprehensive Agrarian Reform Program (CARP) and other agrarian 20 laws x x x." In the same case, the Court also held that the jurisdictional competence of the DAR had further been clarified by RA 6657 thus: "x x x. The Act [RA 6657] makes references to and explicitly recognizes the effectivity and applicability of Presidential Decree No. 229. More particularly, the Act echoes the provisions of Section 17 of Presidential Decree No. 229, supra, investing the Department of Agrarian Reform with original jurisdiction, generally, over all cases involving agrarian laws, although, as shall shortly be pointed out, it restores to the Regional Trial Court, limited jurisdiction over two groups of cases. Section 50 reads as follows: SEC. 50. Quasi-Judicial Powers of the DAR. The DAR is hereby vested with primary jurisdiction to determine and adjudicate agrarian reform matters and shall have exclusive original jurisdiction over all matters involving the implementation of agrarian reform, except those falling under the exclusive jurisdiction of the Department of Agriculture [DA] and the Department of Environment and Natural Resources [DENR]. xxx xxx xxx

unconstitutionality of EO 405 -- but to the annulment of the DARs Notice of Coverage. Clearly, the main thrust of the allegations is the propriety of the Notice of Coverage, as may be gleaned from the following averments, among others: "6. This implementation of CARP in the landholding of the [respondent] is contrary to law and, therefore, violates [respondents] constitutional right not to be deprived of his property without due process of law. The coverage of [respondents] landholding under CARP is NO longer with authority of law. If at all, the implementation of CARP in the landholding of [respondent] should have commenced and [been] completed between June 1988 to June 1992 as provided for in CARL, to wit: x x x; "7. Moreover, the placing of [respondents] landholding under CARP as of 21 September 1999 is without the imprimatur of the Presidential Agrarian Reform Council (PARC) and the Provincial Agrarian Reform Coordinating Committee (PARCOM) as mandated and required by law pursuant to R.A. 7905 x x x; xxx xxx xxx

"9. Under the provisions of CARL, it is the PARC and/or the DAR, and not x x x Land Bank, which is authorized to preliminarily determine the value of the lands as compensation therefor, thus x x x; xxx xxx xxx

It shall have the power to summon witnesses, administer oaths, take testimony, require submission of reports, compel the production of books and documents and answers to interrogatories and issue subpoena and subpoena duces tecum and to enforce its writs through sheriffs or other duly deputized officers. It shall likewise have the power to punish direct and indirect contempt in the same manner and subject to the same penalties as provided in the 21 Rules of Court." Nonetheless, we have held that the RTCs have not been completely divested of jurisdiction over agrarian reform matters. Section 56 of RA 6657 confers special jurisdiction on "Special Agrarian Courts," which are actually RTCs designated as such 22 by the Supreme Court. Under Section 57 of the same law, these Special Agrarian Courts have original and exclusive jurisdiction over the following matters: "1) all petitions for the determination compensation to land-owners, and of just

"12. That the aforementioned NOTICE OF COVERAGE with intendment and purpose of acquiring [respondents] aforementioned land is a gross violation of law (PD 399 dated 28 February 1974 which is still effective up to now) inasmuch as [respondents] land is traversed by and a road frontage as admitted by the DARs technician and defendant FORTUNADO (MARO) x x x;" "13. That as reflected in said Pre-Ocular Inspection Report, copy of which is hereto attached as annex D forming part hereof, [respondents] land is above eighteen percent (18%) slope and therefore, automatically exempted and excluded from the 25 operation of Rep. Act 6657, x x x. (Italics supplied) In contrast, the 14-page Complaint touches on the alleged unconstitutionality of EO 405 by merely making these two allegations: "10. Executive Order No. 405 dated 14 June 1990 (issued by the then President Corazon Aquino) is unconstitutional for it plainly amends, modifies and/or repeals CARL. On 14 June 1990, then President Corazon Aquino had no longer law-making powers as the Philippine Congress was by then already organized, existing and operational pursuant to the 1987 Constitution. A copy of the said Executive Order is hereto attached as Annex B forming part hereof. "11. Our constitutional system of separation of powers renders the said Executive Order No. 405 unconstitutional and all valuations made, and to be made, by the defendant Land Bank pursuant thereto are null and void and without force and effect. Indispensably and ineludibly, all related rules, regulations, orders and other issuances issued or promulgated pursuant to said Executive Order No. 405 are also null and void ab initio and without force and 26 effect." We stress that the main subject matter raised by private respondent before the trial court was not the issue of

"2) the prosecution of all criminal offenses under x x x [the] Act." The above delineation of jurisdiction remains in place to this 23 date. Administrative Circular No. 29-2002 of this Court stresses the distinction between the quasi-judicial powers of the DAR under Sections 50 and 55 of RA 6657 and the jurisdiction of the Special Agrarian Courts referred to by Sections 56 and 57 of the same law. Allegations of the Complaint A careful perusal of respondents Complaint shows that the principal averments and reliefs prayed for refer -- not to the "pure question of law" spawned by the alleged
24

compensation (the subject matter of EO 405 ). Note that no amount had yet been determined nor proposed by the DAR. Hence, there was no occasion to invoke the courts function of 28 determining just compensation. To be sure, the issuance of the Notice of Coverage constitutes the first necessary step towards the acquisition of private land under the CARP. Plainly then, the propriety of the Notice relates to the implementation of the CARP, which is under the quasijudicial jurisdiction of the DAR. Thus, the DAR could not be ousted from its authority by the simple expediency of appending an allegedly constitutional or legal dimension to an issue that is clearly agrarian. In view of the foregoing, there is no need to address the other points pleaded by respondent in relation to the jurisdictional issue. We need only to point that in case of doubt, the jurisprudential trend is for courts to refrain from resolving a controversy involving matters that demand the special competence of administrative agencies, "even if the question[s] 30 involved [are] also judicial in character," as in this case. Second Issue: Preliminary Injunction Having declared the RTCs to be without jurisdiction over the instant case, it follows that the RTC of La Carlota City (Branch 63) was devoid of authority to issue the assailed Writ of Preliminary Injunction. That Writ must perforce be stricken down as a nullity. Such nullity is particularly true in the light of the express prohibitory provisions of the CARP and this Courts Administrative Circular Nos. 29-2002 and 38-2002. These Circulars enjoin all trial judges to strictly observe Section 68 of RA 6657, which reads: "Section 68. Immunity of Government Agencies from Undue Interference. No injunction, restraining order, prohibition or mandamus shall be issued by the lower courts against the Department of Agrarian Reform (DAR), the Department of Agriculture (DA), the Department of Environment and Natural Resources (DENR) and the Department of Justice (DOJ) in their implementation of the program." WHEREFORE, the Petition is hereby GRANTED, and the challenged Decision and Resolution REVERSED AND SET ASIDE. Accordingly, the February 16, 2000 Order of the Regional Trial Court of La Carlota City (Branch 63) is ANNULLED and a new one entered, DISMISSING the Complaint in Civil Case 713. The Writ of Preliminary Injunction issued therein is also expressly VOIDED. No costs. SO ORDERED.
29

27

GARCIA, J.: Assailed and sought to be set aside in this petition for review on certiorari under Rule 45 of the Rules of Court are the following issuances of the Court of Appeals in CA-G.R. CV No. 24946, to wit: 1. Decision dated February 28, 2002 , affirming an earlier decision of the Regional Trial Court at Manila in an action for sum of money thereat commenced by the herein respondent against petitioner and Creative Texwood Corporation; and 2. Resolution dated August 23, 2002, denying petitioners motion for reconsideration. The factual milieu: On January 11, 1978, respondent China Banking Corporation (Chinabank), represented by its senior vicepresident Gilbert Dee, and Creative Texwood Corporation (CREATIVE), represented by its president, herein petitioner Simeon M. Valdez, executed a Credit Agreement whereunder Chinabank agreed to grant CREATIVE a credit facility in the amount of US$1,000,000.00 to finance the latters importation of raw materials, spare parts and supplies for its manufacturing projects. Simultaneously with the execution of the aforementioned Credit Agreement, and in order to assure payment of the credit facility thereunder granted, CREATIVE, again represented by petitioner as its President, executed in favor of Chinabank a Promissory Note for the same amount, undertaking to pay said amount one year thenceforth or until January 11, 1979. On the same date - January 11, 1978 CREATIVE, as principal and petitioner, as surety, further executed in favor of Chinabank a Surety Agreement whereunder petitioner Valdez bound himself unto Chinabank the prompt payment on maturity date of the aforesaid promissory note. The next day, January 12, 1978, pursuant to said credit agreement, Chinabank drew and issued a check for US$1,000,000.00 with CREATIVE as payee. Subsequently, CREATIVE indorsed the check back to Chinabank for payment, which the latter did. On December 15, 1986, following the failure of both CREATIVE and petitioner to comply with their obligations despite repeated demands, Chinabank filed against both a complaint for a sum of money before the Regional Trial Court at Manila, thereat docketed as Civil Case No. 86-38740 which was raffled to Branch 35 thereof. In his separate answer, petitioner, after the usual denial of the material allegations of the complaint, interposed the defense that the subject Credit Agreement is fictitious and simulated; that he signed said agreement andPromissory Note in his official capacity as president of CREATIVE and not in his personal capacity; and that the Surety Agreement attached to the complaint is not the one executed and signed by him because what he signed was a pro-forma document with blank spaces still unfilled. On July 31, 1987, the trial court dismissed the complaint for failure of plaintiff Chinabank to prosecute for an unreasonable length of time. However, upon Chinabanks motion for reconsideration, the trial court reinstated the complaint, and, on Chinabanks further motion, declared defendant CREATIVE as in default and allowed Chinabank to adduce ex parte its evidence against the former. Pre-trial was thereafter set between plaintiff Chinabank and defendant-petitioner. On May 20, 1988, the trial court, upon Chinabanks motion, declared petitioner as in default for his and his counsels failure to appear at the scheduled pre-trial. However, upon petitioners
1

COURT OF APPEALS
Republic of the Philippines SUPREME COURT THIRD DIVISION G.R. No. 155009. April 12, 2005 SIMEON M. VALDEZ, Petitioners, vs. CHINA BANKING CORPORATION, Respondents. DECISION

motion, the trial court set aside its default order and set the case anew for pre-trial. With no amicable settlement having been reached by the parties, trial ensued. Eventually, in a decision dated November 20, 1989, the trial court rendered judgment for plaintiff Chinabank and against defendants CREATIVE and petitioner, thus: WHEREFORE, judgment is rendered: (1) ordering defendants Creative Texwood Corporation and Simeon M. Valdez, jointly and severally, to pay to the plaintiff the principal amount of P18,069,674.38, the interest thereon at the rate of per annum computed from December 15, 1986, the date the complaint was filed, until full payment of the principal obligation, another 1 % per month computed also from the same date until full payment of the principal obligation, as penalty, and the amount of P3,613,934.00 for attorneys fees; and (2) ordering defendant Creative Texwood Corporation to pay the plaintiff the amount equivalent to 3% per annum also computed from December 15, 1986, on the amount of the drawdown, as arrangement fee. SO ORDERED. (Petition, Annex "F"; Rollo, pp. 66-69) In its decision, the trial court, finding no reason to doubt the authenticity and due execution of the surety agreement, held that petitioners liability to Chinabank arose from his execution of the same agreement where he warranted unto Chinabank the prompt payment at maturity date of the promissory note. The trial court also debunked petitioners protestation i n his memorandum that his liability under the same surety agreement 2 was extinguished pursuant to Article 2079 of the Civil Code when Chinabank granted CREATIVE an extension of time for the payment of the loan. Partly says the trial court in its decision: We do not agree. Defendant Valdez admits in his memorandum that after his co-defendant corporation failed to pay its loan on due date, a demand letter dated July 16, 1979 was sent by the plaintiff to defendant corporation to pay its overdue obligation. This first demand letter was followed by two more demand letters dated November 26, 1979 and May 20, 1981, respectively, both addressed to the said defendant corporation. The mere fact that plaintiff neglected to sue immediately and initiated this court action only on December 15, 1986, does not relieve and discharge defendant Valdez from his liability under the Surety Agreement, because such delay in filing the action does not necessarily imply any change in the efficacy of the contract or liability of the principal debtor. (See Bank of P.I. vs. Albadejo, 53 Phil. 141; Paras, Civil Code, Vol. V, 1982 Ed., pp. 806 & 810)." (Rollo, p. 68) From the aforementioned decision of the trial court, both Chinabank and petitioner went to the Court of Appeals in CAG.R. CV No. 24946. For failure of Chinabank to file its brief within the reglementary period, the appellate court declared its appeal abandoned and accordingly dismissed the same. Chinabanks motion for reconsideration proved unavailing From the appellate courts dismissal of its appeal, Chinabank went to this Court in G.R. No. 97066 via a petition for review on certiorari under Rule 45 of the Rules of Court. In a Resolution 3 dated March 4, 1991, this Court dismissed Chinabanks petition. Attempt at a reconsideration similarly proved futile, as 4 in fact an Entry of Judgment was rendered declaring the dismissal of Chinabanks petition final and executory. Meanwhile, with petitioner Valdez having filed his Brief on time, the Court of Appeals proceeded to resolve his appeal.

And, in a decision dated February 28, 2002, the appellate court dismissed petitioners appeal and affirmed the appealed decision of the trial court, thus: WHEREFORE, premises considered, the instant appeal is hereby DISMISSED for lack of merit the appealed decision of the Regional Trial Court, Branch 35, Manila, is AFFIRMED. SO ORDERED. His motion for reconsideration having been denied by the same 6 court in its Resolution of August 23, 2003, petitioner Simeon Valdez is now with us via the present recourse, it being his submissions that: "I. THE COURT OF APPEALS ERRED IN ACTING ON PETITIONERS APPEAL THEN ALREADY MOOT AND ACADEMIC DUE TO THE DISMISSAL OF THE BANKS APPEAL AND THE ADOPTION OF THE 1997 RULES OF CIVIL PROCEDURE. II. THE COURT OF APPEALS ERRED IN RENDERING THE QUESTIONED DECISION AND RESOLUTION WHICH ARE ALREADY UNENFORCEABLE BY EXECUTION DUE TO PRESCRIPTION. III. THE COURT OF APPEALS ERRED IN SETTING ASIDE PETITIONERS FAILURE TO ASSIGN LACK OF CONSIDERATION AS AN ERROR CONSIDERING THE RESULTING UNJUST ENRICHMENT. IV. THERE WAS AN ERROR IN MAKING PETITIONER LIABLE AS THERE WAS NO SHOWING THAT THE BANK GOT HIS CONSENT IN THE EXTENSION OF THE ONE-YEAR LOAN PERIOD. V. THE QUESTIONED DECISION AND RESOLUTION OF THE COURT OF APPEALS ARE AGAINST THE RULE OF FINALITY OF JUDGMENT AND PUBLIC POLICY". We DENY. It is petitioners thesis that the decision of the trial court which he and respondent Chinabank appealed to the Court of Appeals in CA G.R. CV No. 24946 was vacated when Chinabanks similar appeal therefrom was dismissed with finality. Petitioners argument lacks legal moorings. Under Section 9 (3) of Batas Pambansa Blg. 129, as amended, the Court of Appeals has exclusive appellate jurisdiction over final judgments or decisions of regional trial courts. Here, there is no issue at all that petitioner had perfected his appeal from the decision of the trial court. The well-settled rule is that jurisdiction, once acquired, continues until the case is finally 7 terminated. Since petitioner invoked the authority of the Court of Appeals when he filed his appellants brief in that court, that same court can resolve petitioners appeal regardless of the dismissal of that of his adversarys. Petitioner claims failure on the part of respondent Chinabank to establish that the credit agreement between it and CREATIVE is supported by a consideration. According to petitioner, a credit line was created under the said Credit Agreement which "fixed

the loan limit that may be availed of by [Creative] to cover a series of transactions encountered in importation of its raw materials, spare parts and supplies", while Chinabanks complaint before the trial court did not contain any "allegation on any drawdown from the subject credit line by [Creative]". Upon this premise, petitioner argues that Chinabank is practically with no cause of action at all. To petitioner, Chinabank has to present evidence of importation by CREATIVE, like shipping documents, which is necessary to establish drawdowns on the US$1,000,000.00 credit facility. Unfortunately, so petitioner adds, respondent Chinabank did not present any such document. We are not persuaded. As aptly noted by the appellate court, it is already too late in the day for petitioner to raise an issue on the alleged deficiency of allegations in Chinabanks complaint to bolster his theory of lack of alleged consideration for the parties credit agreement. Under Rule 9, Section 1, of the Rules of Court, defenses which were not raised in the answer are deemed waived. Petitioner never pleaded in his answer the defense he presently invokes, namely, the alleged lack of consideration for the subject credit agreement. His newly minted defense of lack of consideration must therefore be struck down, the time for interposing the same having been already passe. In any event, absence of consideration is the least persuasive argument petitioner could proffer, if at all he could, colliding as it does with the very allegations in his answer, particularly paragraphs 9 and 14 thereof, to wit: "9. That while answering defendant did affix his signature to Annex `C [surety agreement] as co-obligor, he did so merely to accommodate his co-defendant corporation who actually received the proceeds thereof and if ever the codefendant corporation has been unable to pay its obligation to the plaintiff the same was due to the acts and/or omissions of co-defendant corporation". "14. Defendants have already made a substantial payment on the said account but which plaintiff in bad faith did not properly applied and credited to defendants account." (Emphasis supplied). With his foregoing admissions, we are simply at a loss to understand how petitioner could now turn his back from his answer and insist on his preposterous claim of lack of consideration. Petitioner additionally posits that "there was no showing as to when the principal got a drawdown or drawdowns for US$875,468.72", and that "[T]he US$1,000,000.00 was definitely not the loan under litigation, but there must have been another drawdown or other drawdowns. The drawdown or drawdowns cannot be presumed to have been made within the period guaranteed by the petitioner". To petitioners mind, the inconsistency between the amount demanded by Chinabank in its complaint, which is US$875,468.72, and the amount of the promissory note, which is for US$1,000,000.00, is an indication that Chinabank had granted CREATIVE an extension of the loan. Prescinding therefrom, petitioner insists that he could not be liable to Chinabank because he did not consent to the extension for the repayment of the original loan of US$1,000,000.00. Petitioners argument cannot hold water. As it is, petitioner is attempting to create a new issue of fact at this late stage of the proceedings. A perusal of his answer fails to yield any indication of his intent to craft an issue based on the inconsistency between the amount appearing in the promissory note and that demanded by Chinabank. To allow petitioner to pursue such a defense would undermine basic considerations of due process. Points of law, theories, issues

and arguments not brought to the attention of the trial court will not be and ought not to be considered by a reviewing court, as these cannot be raised for the first time on appeal. It would be unfair to the adverse party who would have no opportunity to present further evidence material to the new theory not 8 ventilated before the trial court. The Court is the neutral administrator of justice, not the corrector of unsound business judgments. Having freely assumed the obligations of a surety, petitioner cannot now evade those obligations by raising factual issues not proper in this Court. Under Rule 45 of the Rules of Court, this Courts main preoccupation is to resolve questions of law not issues of facts. WHEREFORE, the petition is DENIED, and the assailed decision and resolution of the Court of Appeals AFFIRMED. Costs against petitioner. SO ORDERED. Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 182426 February 13, 2009

ZENAIDA POLANCO, CARLOS DE JESUS, AVELINO DE JESUS, BABY DE JESUS, LUZ DE JESUS, and DEMETRIO SANTOS, Petitioners, vs. CARMEN CRUZ, represented by her attorney-in-fact, VIRGILIO CRUZ, Respondent. DECISION YNARES-SANTIAGO, J.: This Petition for Review on Certiorari assails the August 28, 2 2007 Decision of the Court of Appeals in CA-G.R. CV No. 3 75079, setting aside the Order of Branch 17 of the Regional Trial Court of Malolos in Civil Case No. 542-M-2000, which 4 dismissed respondents Complaint for failure to prosecute. Also 5 assailed is the March 28, 2008 Resolution denying petitioners 6 Motion for Reconsideration. The facts are as follows: Respondent Carmen Cruz, through her attorney-in-fact, Virgilio 7 Cruz, filed a complaint for damages against petitioners for allegedly destroying her palay crops. While admitting that petitioners own the agricultural land she tilled, respondent claimed she was a lawful tenant thereof and had been in actual possession when petitioners maliciously filled so with soil and palay husk on July 1 and 2, 2000. Respondent prayed that petitioners be held liable for actual damages, moral damages, exemplary damages, litigation expenses and attorneys fees, and costs of the suit. Petitioners filed a Motion to Dismiss, which was denied by the 9 trial court in an Order dated December 4, 2000. It held that it has jurisdiction over the case because the allegations in the Complaint made a claim for damages, and not an agrarian dispute which should be referred to the Department of Agrarian Reform Adjudication Board (DARAB); and that the Complaint was properly filed because the Certification of Non-forum Shopping was signed by respondents attorney-in-fact. Petitioners simultaneously filed an Answer to the complaint 11 and a Motion for Reconsideration of the December 4, 2000 Order. However, the court a quo denied the motion for lack of 12 merit in an Order dated September 10, 2001. On January 9,
10 8 1

2002, the trial court issued an Order to respondents failure to prosecute.

14

13

dismissing the case due

herself as a tenant of petitioners and mentioned that there was 19 an unlawful detainer case involving the parcel of land which is also involved in the instant civil case for damages. There is forum-shopping when as a result of an adverse decision in one forum, or in anticipation thereof, a party seeks a favorable opinion in another forum through means other than appeal or certiorari. Forum-shopping exists when two or more actions involve the same transactions, essential facts, and circumstances; and raise identical causes of action, subject matter, and issues. Still another test of forum-shopping is when the elements of litis pendencia are present or where a final judgment in one case will amount to res judicata in another whether in the two or more pending cases, there is an identity of (a) parties (or at least such parties as represent the same interests in both actions), (b) rights or causes of action, and (c) 20 reliefs sought. Although there is an identity of some of the parties in the instant case for damages and the unlawful detainer case, there is, however, no identity of reliefs prayed for. The former is for recovery of damages allegedly caused by petitioners acts on respondents palay crops; while the latter case involved possessory and tenancy rights of respondent. As such, respondent did not violate the rule on forum-shopping. Section 1, Rule 18 of the 1997 Rules of Civil Procedure imposes upon the plaintiff the duty to promptly move ex parte to have the case set for pre-trial after the last pleading has been 21 served and filed. Moreover, Section 3, Rule 17 provides that failure on the part of the plaintiff to comply with said duty without any justifiable cause may result to the dismissal of the complaint for failure to prosecute his action for an unreasonable length of time or failure to comply with the rules of procedure.1avvphi1 It must be stressed that even if the plaintiff fails to promptly move for pre-trial without any justifiable cause for such delay, the extreme sanction of dismissal of the complaint might not be warranted if no substantial prejudice would be caused to the defendant, and there are special and compelling reasons which 22 would make the strict application of the rule clearly unjustified. In the instant case, the Court of Appeals correctly held that the dismissal of respondents complaint is too severe a sanction for her failure to file a motion to set the case for pre-trial. It must be pointed out that respondent prosecuted her action with utmost diligence and with reasonable dispatch since filing the complaint she filed an opposition to petitioners motion to dismiss the complaint; a comment to petitioners motion for reconsideration of the December 4, 2000 Order of the trial court; and an Answer to Counterclaim of petitioners. When the trial court issued an order dismissing the case, respondent filed without delay a motion for reconsideration; and upon its denial, 23 she immediately filed a Notice of Appeal. Moreover, contrary to petitioners claim that respondent was silent for one year since she filed her Answer to Counterclaim until the trial courts 24 dismissal order, records show that between said period, both parties and the trial court were threshing out petitioners motion for reconsideration of the December 4, 2000 Order. While "heavy pressures of work" was not considered a persuasive reason to justify the failure to set the case for pre25 trial in Olave v. Mistas, however, unlike the respondents in the said case, herein respondent never failed to comply with the Rules of Court or any order of the trial court at any other time. Failing to file a motion to set the case for pre-trial was her first and only technical lapse during the entire proceedings. Neither has she manifested an evident pattern or a scheme to delay the disposition of the case nor a wanton failure to observe the mandatory requirement of the rules. Accordingly, the ends of justice and fairness would best be served if the parties are given the full opportunity to litigate their claims and the real issues involved in the case are threshed out in a full-blown trial. Besides, petitioners would not be prejudiced should the case

With the denial of her Motion for 15 Reconsideration, respondent interposed an appeal to the Court of Appeals which rendered the assailed Decision dated August 28, 2007, the dispositive portion of which states: WHEREFORE, the appeal is hereby GRANTED. Accordingly, the Order, dated January 9, 2002, of the RTC [Branch 17, Malolos] is hereby REVERSED and SET ASIDE. Plaintiffappellants Complaint is hereby REINSTATED and the case is hereby REMANDED to the RTC [Branch 17, Malolos] for further proceedings. SO ORDERED.
16

The Court of Appeals ruled that the trial court erred in finding that the parties failed to take necessary action regarding the case because the records plainly show that petitioners filed an Answer to the complaint, while respondent filed an Opposition to the Motion for Reconsideration with Manifestation Re: 17 Answer of Defendants. With regard to the order of the trial court dismissing the complaint on the ground of failure to prosecute, the appellate court held that the previous acts of respondent do not manifest lack of interest to prosecute the case; that since filing the Complaint, respondent filed an Opposition to petitioners Motion to Dismiss, an Answer to petitioners counterclaim, and a Comment to petitioners Motion for Reconsideration; that respondent did not ignore petitioners Motion to Dismiss nor did she repeatedly fail to appear before the court; that no substantial prejudice would be caused to petitioners and that strict application of the rule on dismissal is unjustified considering the absence of pattern or scheme to delay the disposition of the case on the part of respondent; and that justice would be better served if the case is remanded to the trial court for further proceedings and final disposition. On March 28, 2008, the Court of Appeals denied petitioners Motion for Reconsideration; hence, this petition based on the following ground: WHETHER OR NOT THE DECISION OF THE HONORABLE COURT OF APPEALS IN C.A.-G.R. CV No. 75079, NULLIFYING AND/OR REVERSING AND/OR SETTING ASIDE THE ORDERS DATED JANUARY 9, 2002 AND MAY 8, 2002 ISSUED BY THE RTC-BULACAN IN CIVIL CASE No. 542-M00, IS CONTRARY TO LAW AND PREVAILING JURISPRUDENCE. Petitioners allege that respondent failed to comply with the mandate of the 1997 Rules of Civil Procedure to promptly move for the setting of the case for pre-trial; that "heavy pressures of work" does not justify the failure to move for the setting of the case for pre-trial; that the allegations in the Complaint which pertain to respondents status as a tenant of Elena C. De Jesus amount to forum shopping that would extremely prejudice them. Petitioners thus pray for the nullification of the Decision and Resolution of the Court of Appeals and the affirmation of the dismissal of the Complaint by the trial court. The petition lacks merit. The Court of Appeals correctly noted that petitioners raised the matter of respondents alleged forum shopping for the first time only in their Motion for Reconsideration. Issues not previously 18 ventilated cannot be raised for the first time on appeal, much less when first raised in the motion for reconsideration of a decision of the appellate court. At any rate, this Court does not find respondents alleg ations in her complaint in Civil Case No. 542-M-00 to be constitutive of the elements of forum-shopping. Respondent merely described

proceed as they are not stripped of any affirmative defenses nor deprived of due process of law. This is not to say that adherence to the Rules could be dispensed with. However, exigencies and situations might 26 occasionally demand flexibility in their application. Indeed, on several occasions, the Court relaxed the rigid application of the rules of procedure to afford the parties opportunity to fully ventilate the merits of their cases. This is in line with the timehonored principle that cases should be decided only after giving all parties the chance to argue their causes and defenses. Technicality and procedural imperfection should thus not serve 27 as basis of decisions. Finally, A.M. No. 03-1-09-SC or the new Guidelines To Be Observed By Trial Court Judges And Clerks Of Court In The Conduct Of Pre-Trial And Use Of Deposition-Discovery Measures, which took effect on August 16, 2004, aims to abbreviate court proceedings, ensure prompt disposition of cases and decongest court dockets, and to further implement the pre-trial guidelines laid down in Administrative Circular No. 28 3-99 dated January 15, 1999. A.M. No. 03-1-09-SC states 29 that: "Within five (5) days from date of filing of the reply, the plaintiff must promptly move ex parte that the case be set for 30 pre-trial conference. If the plaintiff fails to file said motion within the given period, the Branch COC shall issue a notice of pre-trial." As such, the clerk of court of Branch 17 of the Regional Trial Court of Malolos should issue a notice of pre-trial to the parties and set the case for pre-trial. WHEREFORE, the Petition for Review on Certiorari is DENIED. The August 28, 2007 Decision of the Court of Appeals in CAG.R. CV No. 75079, setting aside the Order of Branch 17 of the Regional Trial Court of Malolos dismissing Civil Case No. 542M-2000 for respondents failure to prosecute, and its March 28, 2008 Resolution denying petitioners Motion for Reconsideration are AFFIRMED. The clerk of court of Branch 17 of the Regional Trial Court of Malolos is DIRECTED to issue a notice of pre-trial to the parties. SO ORDERED. Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. Nos. 89095 & 89555 November 6, 1989 SIXTO P. CRISOSTOMO, petitioner, vs. SECURITIES AND EXCHANGE COMMISSION, SPOUSES SHOJI YAMADA and MICHIYO YAMADA and SPOUSES TOMOTADA ENATSU and EDITA ENATSU, respondents. Salma Pir T. Rasul, Rosalinda L. Santos and A.E. Dacanay for petitioner. Gonzales, Batiller Law Offices for respondents. Quisumbing, Torres and Evangelista for Spouses Tomotada and Edita Enatsu. Lino M. Patajo for Spouses Shoji and Michiyo Yamada.

July 21, 1989 (Annexes M and 0, pp. 83-86, Rollo) directing the corporate secretary of the United Doctors Medical Center, Inc. (hereafter "UDMC") to call a special meeting of the stockholders to elect the officers and directors in the implementation of the SEC's aforementioned en banc resolution of February 14, 1989, which the Court of Appeals affirmed in its decision dated June 8, 1989 in CA-G.R. SP No. 17435, entitled "Sixto Crisostomo, petitioner vs. Securities and Exchange Commission, Spouses Dr. Shoji Yamada and Michiyo Yamada, and Spouses Dr. Tomotada Enatsu and Edita Enatsu, respondents." On August 1, 1989, the Court of Appeals denied Crisostomo's motion for reconsideration of its decision. On August 24, 1989, he filed a petition for review of said decision in this Court (G.R. No. 89555) which was originally assigned to the Third Division, but was later consolidated with G.R. No. 89095. At first blush, the petitions sound like a patriotic defense of the Constitution, but, at bottom they are only an artful scheme to defraud a group of foreign investors who had been persuaded by the officers of UDMC to invest P57 million to save the corporation (its assets as well as those of the Crisostomo's) from imminent foreclosure by the Development Bank of the Philippines (DBP) to which UDMC was indebted in the sum of P55 million. It is the kind of operation that sullies our collective image as a people and sets back our government's heroic efforts to attract foreign investments to our country. The antecedent facts, culled from the decision of the Court of Appeals, are as follows: Sixto Crisostomo, Felipe Crisostomo (deceased), Veronica Palanca, Juanito Crisostomo, Carlos Crisostomo, Ricardo Alfonso, Regino Crisostomo and Ernesto Crisostomo (known as the Crisostomo group) were the original stockholders of the United Doctors Medical Center (UDMC) which was organized in 1968 with an authorized capital stock of P1,000,000 (later increased to P15,000,000 in 1972). They owned approximately 40% of UDMC's outstanding capital stock, while the 60% majority belonged to the members of the United Medical Staff Association (UMSA), numbering approximately 150 doctors and medical personnel of UDMC. Despite their minority status, the Crisostomo group has managed UDMC from its inception, with Juanito Crisostomo as president, Ricardo Alfonso, Sr. as chairman of the board, Carlos Crisostomo as corporate secretary and Sixto Crisostomo as director and legal counsel. In 1988, UDMC defaulted in paying its loan obligation of approximately P55 million to the DBP. In the last quarter of 1987, UDMC's assets (principally its hospital) and those of the Crisostomos which had been given as collateral to the DBP, faced foreclosure by the Asset Privatization' rust (APT), which had taken over UDMC's loan obligation to the DBP. To stave off the threatened foreclosure, UDMC, through its principal officers, Ricardo Alfonso and Juanito Crisostomo, persuaded the Yamadas and Enatsu (Shoji Yamada and Tomotada Enatsu are Japanese doctors) to invest fresh capital in UDMC. The wife of Tomotada Enatsu, Edita Enatsu, is a Filipina. They invested approximately P57 million in UDMC. The investment was effected by means of: (1) a Stock Purchase Agreement; and (2) an Amended Memorandum of Agreement whereby the group subscribed to 82.09% of the outstanding shares of UDMC. Both transactions were duly authorized by the board of directors and stockholders of UDMC. They were submitted to, scrutinized by, and, finally, approved by

GRIO-AQUINO, J.: In his petition for certiorari, the petitioner seeks to annul and set aside the en banc resolution dated February 14, 1989 of the Securities and Exchange Commission in SEC EB Case No. 191 and the concurring opinions thereto (Annexes F, G, and H, pp. 39-62, Rollo), as well as its orders dated June 27, 1989 and
1

the Board of Investments, the Central Bank of the Philippines, and the Securities and Exchange Commission. The elaborate governmental approval process was done openly and with full knowledge of all concerned, including Sixto Crisostomo, the corporate legal counsel. Upon the completion of the governmental approval process, shares of stock, duly signed by UDMC's authorized officers, were issued to the Yamadas and Enatsus. This capital infusion not only saved the assets of the UDMC (especially the hospital) from foreclosure but also freed the Crisostomos from their individual and solidary liabilities as sureties for the DBP loan. As it had been agreed in the Amended Memorandum of Agreement between UDMC and the Japanese group that upon the latter's acquisition of the controlling interest in UDMC, the corporation would be reorganized, a special stockholders' meeting and board of directors' meeting were scheduled to be held on August 20, 1988. However, on the eve of the meetings, i.e., on August 19, 1988, Sixto Crisostomo, supposedly acting for himself, filed SEC Case No. 3420 against Juanito Crisostomo, Ricardo Alfonso, Shoji Yamada, Michiyo Yamada, Tomotada Enatsu and Edita Enatsu, praying, among other things, (1) to stop the holding of the stockholder's and board of directors' meetings; (2) to disqualify the Japanese investors from holding a controlling interest in UDMC and from being elected directors or officers of UDMC; and (3) to annul the Memorandum of Agreement and Stock Purchase Agreement because they allegedly did not express the true agreement of the parties (pp. 194-203, Rollo). Two weeks later, on September 2, 1988, Crisostomo filed Civil Case No. 88-1823 in the Regional Trial Court of Makati, Metro Manila, where he also sought a preliminary injunction and the Identical reliefs prayed for by him in SEC Case No. 3420 (pp. 317-335, Rollo). It was dismissed by the trial court for lack of jurisdiction and is pending appeal in the Court of Appeals where it is docketed as CA-G.R. No. 20285-CV. On September 13, 1988, the hearing officer, Antonio Esteves, granted the application for a writ of preliminary injunction enjoining the respondents ... from holding the special meeting of the stockholders and of the Board of Directors of United Doctors Medical Center, [Inc.] (UDMC) scheduled on August 20, 1988 or any subsequent meetings; from adopting resolutions to elect new directors and appoint new officers; from approving resolutions directly or indirectly affecting the operations, organizational structure, and financial condition of the corporation, ... and from disbursing funds of the said corporation except those ordinary day-to-day expenses pending the final termination of this case. (p. 30, Rollo.) The private respondents' motion for reconsideration of this order was denied by the hearing officer on November 16, 1988. In the same order, he created a management committee to administer UDMC (pp. 3235, Rollo). The respondents appealed by certiorari to the SEC en banc. On February 14,1989, Commissioner Jose C. Laureta, with whom Commissioners Rosario N. Lopez and Gonzalo T. Santos separately concurred, set aside the preliminary injunction issued by Esteves and the

management committee which he dispositive part of the decision reads:

created.

The

Wherefore, premises considered, the instant petition for certiorari is GRANTED and the Commission en banc ORDERS: 1. That the questioned orders of the hearing officer in SEC Case No. 3420 of September 13, 1988 and November 16, 1988, be immediately vacated; 2. That a special stockholders' meeting of UDMC be held for the purpose of allowing the stockholders of record of the corporation to elect a new board of directors, which special meeting is hereby directed to be scheduled within 10 days from receipt of a copy of this resolution by the incumbent corporate secretary or acting corporate secretary of UDMC, and to this end, that such officer be, as he hereby is, directed: (a) to issue a call for such special meeting and serve notice thereof on all stockholders of record of the corporation, in accordance with section 6 of article VII of UDMC's by-laws; and (b) to submit to the Commission, through the Commission Secretary, a written report of his compliance with this particular order of the Commission, not later than 5 days prior to the scheduled date of the proposed UDMC special stockholders' meeting; 3. That upon the election of a new board of directors of UDMC, that such board be, as it hereby is, enjoined to meet as promptly as possible for the purpose of electing a new set of officers of the corporation in order to ensure its proper management; 4. That the hearing officer be, as he hereby is, directed to continue with the proceedings of SEC Case No. 3420, and to do so with all deliberate speed, for the purpose of resolving the alleged violation of certain rights of Sixto Crisostomo, as a stockholder of UDMC particularly, his right to inspect the corporate books and records of UDMC, his preemptive right to subscribe to the P60 million increase in the authorized capital of UDMC, and his appraisal rights; and 5. That the board of directors and officers of UDMC be, as they hereby are, ordered to submit to the Commission, through the Chairman, a written report as to its plans as regards its nursing school, such report to be submitted at least one month prior to the commencement of the school year 1989-1990. SO ORDERED. (pp. 49-50, Rollo.) Sixto Crisostomo sought a review of the SEC's en banc resolution in the Court of Appeals (CA-G.R. SP No. 17435). On June 8, 1989, the Court of Appeals dismissed his petition and lifted the temporary restraining order that it had issued against the SEC's resolution (Annex K, pp. 65-81, Rollo). Petitioner filed a motion for reconsideration (pp. 418-434, Rollo). The Court of Appeals required the private respondents to comment but it denied the petitioner's motion to reinstate the writ of preliminary injunction (Annex L, p. 82, Rollo), On motion of the private respondents (Annex K, p. 413, Rollo), the SEC en banc issued an order on June 27, 1989 directing

the secretary of UDMC to call a special stockholders' meeting to elect a new board of directors and officers of the corporation (Annex F). Petitioner asked the SEC to recall that order on account of his pending motion for reconsideration in the Court of Appeals. The motion was opposed by the private respondents. On July 21, 1989, the SEC denied petitioner's motion (p. 86, Rollo). Whereupon, he filed this petition for certiorari and prohibition with a prayer for preliminary injunction alleging that the SEC en banc abused its discretion: 1. in setting aside Esteves' orders 2. in allowing the Japanese group to have control of UDMC for it will result in culpable violation of Section 7, Article XII of the 1987 Constitution which provides that no private lands shall be transferred or conveyed except to individuals or corporations qualified to acquire or hold land of the public domain, meaning corporations at least sixty per centum of whose capital is owned by Filipino citizens (Sec. 2, Article XII, 1987 Constitution); and 3. in allowing the Japanese investors to own more than 40% of the capital stock of UDMC (which operates a nursing and midwifery school) in violation of Section 4 (2) Article XIV of the 1987 Constitution which provides that educational institutions ... shall be owned solely by citizens of the Philippines or corporations or associations at least sixty per centum of the capital of which is owned by such citizens. The public and private respondents, in their comments on the petition, asked that the petition be dismissed and that the petitioner be cited for contempt for forum-shopping. We find no merit in the petition. The first allegation that the SEC en banc erred in reversing the orders of the hearing officer, Esteves, is the same ground raised by the petitioner in CA-G.R. No. SP 17435. The issue is frivolous for the authority of the SEC en banc to review, revise, reverse, or affirm orders of its hearing officers is too elementary to warrant any debate. Equally unmeritorious are the second and third grounds of the petition that the P57 million investment of the Japanese group in UDMC violates the constitutional provisions restricting the transfer or conveyance of private lands (Art. XIII, Sec. 7, 1987 Constitution) and the ownership of educational institutions (Art. XVI, Sec. 14[a], 1987 Constitution), to citizens of the Philippines or corporations at least 60% of the capital of which is owned by Filipino citizens. While 82% of UDMC's capital stock is indeed subscribed by the Japanese group, only 30% (equivalent to 171,721 shares or P17,172.00) is owned by the Japanese citizens, namely, the Yamada spouses and Tomotada Enatsu. 52% is owned by Edita Enatsu, who is a Filipino. Accordingly, in its application for approval/registration of the foreign equity investments of these investors, UDMC declared that 70% of its capital stock is owned by Filipino citizens, including Edita Enatsu. That application was approved by the Central Bank on August 3, 1988 (p. 249, Rollo,). The investments in UDMC of Doctors Yamada and Enatsu do not violate the Constitutional prohibition against foreigners practising a profession in the Philippines (Section 14, Article XII, 1987 Constitution) for they do not practice their profession (medicine) in the Philippines, neither have they applied for a license to do so. They only own shares of stock in a corporation that operates a hospital. No law limits the sale of hospital shares of stock to doctors only. The ownership of such shares does not amount to engaging (illegally,) in the practice of medicine, or, nursing. If it were otherwise, the petitioner's stockholding in UDMC would also be illegal. The SEC's orders dated June 27, 1989 and July 21, 1989 (directing the secretary of UDMC to call a stockholders'

meeting, etc.) are not premature, despite the petitioner's then pending motion for reconsideration of the decision of the Court of Appeals. The lifting by the Court of Appeals of its writ of preliminary injunction in CA-G.R. SP No. 17435 cleared the way for the implementation by the SEC's en banc resolution in SEC EB Case No. 191. The SEC need not wait for the Court of Appeals to resolve the petitioner's motion for reconsideration for a judgment decreeing the dissolution of a preliminary injunction is immediately executory. It "shall not be stayed after its rendition and before an appeal is taken or during the pendency of an appeal." (Sec. 4, Rule 39, Rules of Court; Marcelo Steel Corp. vs. Court of Appeals, 54 SCRA 89 [1973]; Aguilar vs. Tan, 31 SCRA 205 [1970]; Sitia Teco vs. Ventura, 1 Phil. 497 [1902]; Watson & Co., Ltd. vs. M. Enriquez, I Phil. 480 [1902]). We now address the public and private respondents' separate motions to dismiss the petition and to cite Crisostomo and his counsel for contempt of court for forum-shopping. The records show that Crisostomo had two actions pending in the Court of Appeals (CA-G.R. No. SP 17435 and CA-G.R. No. 20285 CV) when he filed the petition for certiorari (G.R. No. 89095) in this Court on July 27, 1989. The case docketed as CA-G.R. No. 20285-CV, is his appeal from the decision of the Regional Trial Court of Makati, dismissing his complaint for annulment of the Memorandum of Agreement and the Stock Purchase Agreement between UDMC and the Japanese investors. CAG.R. No. SP 17435 is his petition for certiorari to review the SEC's en banc resolution upholding those transactions and ordering the holding of a stockholders meeting to elect the directors of the UDMC, and of a board of directors meeting to elect the officers. Notwithstanding the pendency of those two cases in the Court of Appeals, Crisostomo filed this petition for certiorari 1 and prohibition on July 27, 1989 where he raises the same issues that he raised in the Court of Appeals. The prayer of his petition in CA-G.R. No. SP 17435 reads thus: 3) After hearing on the merits, judgment be rendered: a) Annulling and setting aside the questioned rulings of the 2 respondent COMMISSION for having been issued with grave abuse of discretion tantamount to lack or excess of jurisdiction; and b) Making permanent the preliminary injunction issued in this case against the respondents. (p. 241, Rollo.) In his petition for certiorari (G.R. No. 89095), he also prays that 1. Upon the filing of this petition, a temporary restraining order issue enjoining respondents, their representatives or agents from implementing or executing the SEC opinions (Annexes "F", "G" and "H") and its June 27 and July 21,1989 orders (Annexes "M" and "O") until further orders from the Honorable Court. xxx xxx xxx 3. After notice, this petition be given due course and a writ of preliminary injunction be issued for the same purpose and effect upon such terms and conditions the Honorable Court may impose; and thereafter, judgment be rendered granting the writ prayed for and annulling and setting aside the said opinions rendered by the SEC in their stead, affirming the orders of the Hearing Officer (Annexes "A" and "B"). (pp. 27-28, Rollo.)

Additionally, in his petition for review (G.R. No. 89555) he prays this Court to giant "all the reliefs" prayed for by him in CA-G.R. SP No. 17435. Here is a clear case of forum-shopping. There is forum-shopping whenever as a result of an adverse opinion in one forum, a party seeks a favorable opinion (other than by appeal or certiorari) in another. The principle applies not only with respect to suits filed in the courts but also in connection with litigations commenced in the courts while an administrative proceeding is pending, as in this case, in order to defeat administrative processes and in anticipation of an unfavorable administrative ruling and a favorable court ruling. This is specially so, as in this case, where the court in which the second suit was brought, has no jurisdiction. (Villanueva vs. Adre, G.R. No. 8063, April 27, 1989.) (p. 303, Rollo) Forum-shopping is prohibited by the Interim Rules of Court for it trifles with the courts and abuses their processes (E. Razon, Inc. vs. Phil. Port Authority, 101 SCRA 450). Section 17 of the Interim Rules of Courts provides: 17. Petitions for writs of certiorari, etc., No petition for certiorari, mandamus, prohibition, habeas corpus or quo warranto may be filed in the Intermediate Appellate Court if another similar petition has been filed or is still pending in the Supreme Court. Nor may such petition be filed in the Supreme Court if a similar petition has been filed or is still pending in the Intermediate Appellate Court, unless it be to review the action taken by the Intermediate Appellate Court on the petition filed with it. A violation of this rule shall constitute contempt of court and shall be a cause for the summary dismissal of both petitions, without prejudice to the taking of appropriate action against the counsel or party concerned. (Interim Rules of Court.) Forum-shopping makes the petitioner subject to disciplinary action and renders his petitions in this Court and in the Court of Appeals dismissible (E. Razon, Inc. vs. Philippine Port Authority, et al., G.R. No. 75197, Resolution dated July 31, 1986; Buan vs. Lopez, Jr., 145 SCRA 34, 38-39; Collado vs. Hernando, L-43886, May 30, 1988). For this reason, if not for their lack of merit, the petitions should be, as they are hereby, dismissed. WHEREFORE, these petitions are dismissed for lack of merit. The temporary restraining order which this Court issued on August 7, 1989 in G.R. No. 89095 is hereby lifted. The Court of Appeals is ordered to immediately dismiss CA-G.R. CV No. 20285. The petitioner and his counsel are censured for engaging in forum-shopping. The petitioner is further ordered to pay double costs in this instance. SO ORDERED.

On 12 December 1996, petitioner Willy Tan was found guilty of bigamy by the Regional Trial Court, Branch 75, of San Mateo, Rizal. He was sentenced to suffer a prison term of prision correccional in its medium period ranging from two (2) years, four (4) months, and one (1) day, to four (4) years and two (2) months. On 23 December 1996, petitioner applied for probation. On 8 January 1997, the application was granted by the trial court but the release order was withheld in view of the filing by the prosecution, on 21 January 1997, of a motion for modification of the penalty. The prosecution pointed out that the penalty for bigamy under Article 349 of the Revised Penal Code was prision mayor and the impassable penalty, absent any mitigating nor aggravating circumstance, should be the medium period of prision mayor, or from eight (8) years and one (1) day to ten (10) years. Thus, the prosecution argued, petitioner was not eligible for probation. The trial court denied the motion of the prosecution for having been filed out of time since the decision sought to be modified had already attained finality. Indeed, petitioner had meanwhile applied for probation. Upon motion of the prosecution, however, the trial court reconsidered its order and rendered an amended decision, promulgated on 10 July 1998, concluding thusly: "WHEREFORE, premises considered, judgment is hereby rendered finding accused Willy Tan GUILTY beyond reasonable doubt of the crime of Bigamy and applying the Indeterminate Sentence Law, is hereby sentenced to suffer a minimum prison term of prision [correccional] TWO (2) YEARS, FOUR (4) MONTHS AND ONE (1) DAY to a maximum prison term of EIGHT 1 (8) YEARS AND ONE (1) DAY." On 13 July 1998, petitioner filed a notice of appeal with the trial court and elevated the case to the Court of Appeals, contending that "THE LOWER COURT ERRED IN AMENDING THE FIRST DECISION INCREASING THE PENALTY AFTER THE SAME HAD ALREADY BECOME FINAL 2 AND EXECUTORY." The Court of Appeals, in a decision, dated 18 August 2000, dismissed petitioner's appeal on the ground that petitioner raised a pure question of law. Citing Article VIII, Section 5(2)(e), of the Constitution, the appellate court explained that jurisdiction over the case was vested exclusively in the Supreme Court and that, in accordance with Rule 122, Section 3(e), of the Rules of Criminal Procedure, the appeal should have been brought up by way of a petition for review on certiorari with this Court and not by merely filing a notice of appeal before the trial court. Petitioner filed a motion for reconsideration which, on 18 May 2001, was denied by the appellate court. The petition for review on certiorari before this Court raised the following issues: "I. THE COURT OF APPEALS GRAVELY ERRED IN APPLYING SECTION 2, RULE 50 ON DISMISSAL OF IMPROPER APPEAL TO THE COURT OF APPEALS AS THE SAID SECTION REFERS TO AN APPEAL UNDER RULE 41 IN ORDINARY CIVIL ACTION BUT NOT TO AN APPEAL IN CRIMINAL CASES WHICH IS GOVERNED BY RULE 122 OF THE REVISED RULES ON CRIMINAL PROCEDURE. "II. THE COURT OF APPEALS ERRED IN HOLDING THAT THE SUPREME COURT HAS EXCLUSIVE APPELLATE JURISDICTION ON PURE QUESTIONS OF LAW. "III. THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT BECAUSE THE APPEAL RAISED PURE QUESTIONS OF LAW, IT IS WITHOUT JURISDICTION TO RESOLVE THE ISSUE RAISED IN THE APPEAL.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. 148194 April 12, 2002

WILLY TAN y CHUA, petitioner, vs. PEOPLE OF THE PHILIPPINES, respondents. VITUG, J.:

"IV. THE COURT OF APPEALS GRAVELY ERRED IN DISMISSING THE APPEAL OUTRIGHT INSTEAD OF DECLARING THE AMENDED DECISION VOID FOR UTTER WANT OF JURISDICTION.1wphi1.nt "V. THE COURT OF APPEALS ERRED IN HOLDING THAT RULE 65 IS THE PROPER REMEDY TO RAISE THE ISSUE OF JURISDICTION AND IF SO IN NOT TREATING THE APPEAL AS A SPECIAL CIVIL 3 ACTION FOR CERTIORARI." In all criminal prosecutions, the accused shall have the right to 4 appeal in the manner prescribed by law. While this right is statutory, once it is granted by law, however, its suppression would be a violation of due process, itself a right guaranteed 5 by the Constitution. Section 3(a), Rule 122 of the Rules of Criminal Procedure states: "Section 3. How appeal is taken. (a) The appeal to the Regional Trial Court, or to the Court of Appeals in cases decided by the Regional Trial Court in the exercise of its original jurisdiction, shall be taken by filing a notice of appeal with the court which rendered the judgment or final order appealed from and by serving a copy thereof upon the adverse party. (Emphasis supplied). The above rule is plain and unambiguous the remedy of ordinary appeal by notice of appeal, although not necessarily preclusive of other remedies provided for by the rules, is open and available to petitioner. The notice of appeal was timely filed by petitioner on 13 July 1998, three days after the questioned decision was 6 promulgated. It was a remedy that the law allowed him to avail himself of, and it threw the whole case effectively open for review on both questions of law and of fact whether or not raised by the parties. Neither the Constitution nor the Rules of Criminal Procedure exclusively vests in the Supreme Court the power to hear cases 7 on appeal in which only an error of law is involved. Indeed, the Court of Appeals, under Rule 42 and 44 of the Rules of Civil Procedure, is authorized to determine "errors of fact, of law, or 8 both." These rules are expressly adopted to apply to appeals in 9 criminal cases, and they do not thereby divest the Supreme Court of itsultimate jurisdiction over such questions. Anent the argument that petitioner should have filed a petition for certiorari under Rule 65, it might be pointed out that this remedy can only be resorted to when there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of 10 law. Appeal, being a remedy still available to petitioner, a petition for certiorari would have been premature. In fine, petitioner had taken an appropriate legal step in filing a notice of appeal with the trial court. Ordinarily, the Court should have the case remanded to the Court of Appeals for further proceedings. The clear impingement upon petitioner's basic 11 right against double jeopardy, however, should here warrant the exercise of the prerogative by this Court to relax the stringent application of the rules on the matter. When the trial court increased the penalty on petitioner for his crime of bigamy after it had already pronounced judgment and on which basis he then, in fact, applied for probation, the previous verdict could only be deemed to have lapsed into finality. Section 7, Rule 120, of the Rules on Criminal Procedure that states "Sec. 7. Modification of judgment. A judgment of conviction may, upon motion of the accused, be modified or set aside before it becomes final or before appeal is perfected. Except where the death

penalty is imposed, a judgment becomes final after the lapse of the period for perfecting an appeal, or when the sentence has been partially or totally satisfied or served, or when the accused has waived in writing his right to appeal, or has applied for probation"implements a substantive provision of the Probation Law which enunciates that the mere filing of an application for probation forecloses the right to appeal. "SEC. 4. Grant of Probation. Subject to the provisions of this Decree, the trial court may, after it shall have convicted and sentenced a defendant, and upon application by said defendant within the period for perfecting an appeal, suspend the execution of the sentence and place the defendant on probation for such period and upon such terms and conditions as it may deem best: Provided, That no application for probation shall be entertained or granted if the defendant has perfected the appeal from the judgment or conviction. "Probation may be granted whether the sentence imposes a term of imprisonment or a fine only. An application for probation shall be filed with the trial court. The filing of the application shall be deemed a waiver of the right to appeal. "An order granting or denying probation shall not be appealable. (As amended by PD 1257, and by PD 12 1990, Oct. 5, 1985.)" Such a waiver amounts to a voluntary compliance with the decision and writes finis to the jurisdiction of the trial court over 13 the judgment. There is no principle better settled, or of more universal application, than that no court can reverse or annul, 14 reconsider or amend, its own final decree or judgment. Any attempt by the court to thereafter alter, amend or modify the same, except in respect to correct clerical errors, would be unwarranted. WHEREFORE, the petition is given due course. The assailed amendatory judgment of the trial court is SET ASIDEand its decision of 12 December 1996 is REINSTATED. No costs. SO ORDERED.

DISSENTING OPINION MENDOZA, J.: The reasons for my disagreement with the majority will be spelled out in detail, but in brief they are as follows: (1) The case before the Court of Appeals did not involve an error of judgment but an alleged error of jurisdiction and, therefore, appeal was not the appropriate remedy to bring the matter to that court. (2) Even assuming the case involved an error of judgment and therefore appeal was the appropriate remedy open to petitioner, the appeal should have been brought before this Court and not the Court of Appeals, and it should not be by mere notice of appeal but by a petition for review. (3) The correct remedy is certiorari. (4) Even equity will not excuse petitioner's failure to observe the rules for seeking a review, and this Court is not justified in deciding the issue which petitioner should have first brought before the Court of Appeals. There is no dispute as to the following facts. Petitioner Willy Tan and Mildred Gococo-Tan were married on January 14, 1979. On November 28, 1981, while their marriage was subsisting, petitioner contracted marriage with Estela G. Infante. On the complaint of Mildred Gococo-Tan, petitioner and

Estela G. Infante were charged with bigamy. The case was filed before the Regional Trial Court, Branch 75, San Mateo, Rizal, which, on December 12, 1996, found petitioner Willy Tan guilty of bigamy and sentenced him "to suffer a prison term of prision correccional in its medium period ranging from two (2) years, four (4) months and one (1) day to four (4) years and two (2) months." The case against Estela g. Infante, who was at large, was ordered archived without prejudice to its revival upon her arrest. On the basis of the penalty imposed on him, petitioner applied for probation on December 23, 1996. His application was granted by the trial court in its order of January 8, 1997, but release of the order was withheld in view of the filing on January 21, 1997 by the prosecution of a motion for modification of the penalty. The prosecution pointed out that the penalty for bigamy prescribed under Art. 349 of the Revised Penal Code is prision mayor and that the maximum imposable penalty, in the absence of any mitigating or aggravating circumstances, is the medium period of prision mayor, which is from eight (8) years and one (1) day to ten (10) years. Petitioner was thus not eligible for probation, it was argued. On August 5, 1997, the trial court denied the prosecution's motion for having been filed out of time, the decision sought to be modified having become final when petitioner applied for probation. However, upon motion of the prosecution, the trial court reconsidered its order and, on April 14, 1998, amended the dispositive portion of its decision as follows: WHEREFORE, premises considered, judgment is hereby rendered finding accused Willy tan GUILTY beyond reasonable doubt of the crime of Bigamy and applying the Indeterminate Sentence Law, is hereby sentenced to suffer a minimum prison term of prision [correccional] of TWO (2) YEARS, FOUR (4) MONTHS AND ONE (1) DAY to a maximum prison term of EIGHT 1 (8) YEARS AND ONE (1) DAY. The decision, as thus amended, was promulgated on July 10, 1998. Petitioner appealed to the Court of Appeals by filing a notice of appeal with the trial court on July 13, 1998. Petitioner contended that THE LOWER COURT ERRED IN AMENDING THE FIRST DECISION INCREASING THE PENALTY AFTER THE SAME HAD ALREADY BECOME FINAL 2 AND EXECUTORY. In its decision, dated August 18, 2000, now the subject of this 3 review, the Court of Appeals dismissed for lack of jurisdiction petitioner's appeal on the ground that it raised a pure question of law. Petitioner filed a motion for reconsideration, but his motion was denied by the Court of Appeals in its resolution of May 18, 2001. In dismissing petitioner's appeal from the amended decision of the Regional Trial Court, the Court of Appeals held that the appeal raised only a question of law; that, pursuant to Art. VIII, 5(2)(e) of the Constitution, appellate jurisdiction over the case was vested exclusively in the Supreme Court; and that, in accordance with Rule 122, 3(e) of the Rules of Criminal Procedure, the appeal should be brought by filing with this Court a petition for review on certiorari, not by filing a notice of appeal in the trial court. This is a petition for review on certiorari of the decision of the Court of Appeals. Rule 122, 3 of the Rules of Criminal Procedure provides: How appeal taken.

(a) The appeal to the Regional Trial Court, or to the Court of Appeals in cases decided by the Regional Trial Court in the exercise of its original jurisdiction, shall be taken by filing a notice of appeal with the court which rendered the judgment or final order appealed from and by serving a copy thereof upon the adverse party. (b) The appeal to the Court of Appeals in cases decided by the Regional Trial Court in the exercise of its appellate jurisdiction shall be by petition for review under Rule 42. (c) The appeal to the Supreme Court in cases where the penalty imposed by the Regional Trial Court isreclusion perpetua or life imprisonment, or where a lesser penalty is imposed but for offenses committed on the same occasion or which arose out of the same occurrence that gave rise to the more serious offense for which the penalty of death, reclusion perpetua, or life imprisonment is imposed, shall be by filing a notice of appeal in accordance with paragraph (a) of this section. (d) No notice of appeal is necessary in cases where the death penalty is imposed by the Regional Trial Court. The same shall be automatically reviewed by the Supreme Court as provided in section 10 of this Rule. (e) Except as provided in the last paragraph of section 13, Rule 124, all other appeals to the Supreme Court shall be by petition for review on certiorari under Rule 45. The majority holds that petitioner's appeal to the Court of Appeals by mere notice is justified under Rule 122, 3(a) as above quoted. Petitioner argues that Rule 44, 15 in fact allows assignments of errors to be made concerning questions of law or fact in appeals to the Court of Appeals. The Court thus sustains the following contention of petitioner: . . . Rule 122 governing appeals in criminal cases does not direct as it does in ordinary appeals in civil cases under Rule 41 which provides that in all cases where only questions of law are raised or involved, the appeal shall be to the Supreme Court by petition for review on certiorari in accordance with Rule 45. Under Rule 122(a), the appeal to the Regional Trial Court, or to the Court of Appeals in criminal cases decided by the Regional Trial Court in the exercise of its original jurisdiction, shall be taken by filing a notice of appeal with the court which rendered the judgment or final order appealed from and by serving a copy thereof upon the adverse party unfettered by any restriction on the questions that may be raised on appeal[.] Section 3(d) Rule 122 of the 1985 Rules on Criminal Procedure transposed to par. (e) cited in the footnote by the Court of [A]ppeals decision merely provides that "All other appeals to the Supreme Court shall be by petition for certiorari." As worded in the present rule "Except as provided in the last paragraph of section 13, Rule 124, all other appeals to the Supreme Court shall be by petition for review on certiorari under Rule 45." It did not direct as it does in Rule 41 that criminal cases on pure questions of law shall the Supreme Court. What the rule directs is an appeal is to be made to the Supreme appeal shall be by petition for review. appeal in only be to that when Court the

Rule 41 cannot likewise to applied by analogy in appeals in criminal cases since Rule 41 is not among the rules that was expressly adopted to apply to appeals in criminal cases. Under Section 18 of Rule 124:

SEC. 18. Application of certain rules in civil procedure to criminal cases. The provisions of Rules 42, 44 to 46 and 48 to 56 relating to procedure in the Court of Appeals and in the Supreme Court in original and appealed civil cases shall be applied to criminal cases insofar as they are applicable and not inconsistent with the provisions of this Rule. The exclusion of Rule 41 which refers to appeals in civil cases from Rule 122 which refers to appeals in criminal cases clearly indicates that the modes of appeal in ordinary civil actions is not applicable in criminal cases. On the other hand, Section 18 of the Rule 122 expressly provides that Rule 44 on procedure in the Court of Appeals in ordinary appealed cases shall be applied in criminal cases. As will hereafter be shown[,] Rule 44, like Rules 42 and 43 alternatively allows assignment of errors on questions of fact or of law, meaning a[n] assignment of error only on pure questions of law are allowable in appeals to the Court of Appeals. Section 18 clearly connotes that when the rules allow the application of a particular rule in a particular situation, it does so expressly. Note that Rule 47 on Annulment of Judgments was also excluded. I respectfully disagree with the majority ruling for the following reasons: First. Appeal is not the appropriate remedy because it is not an error of judgment, but an error of jurisdiction allegedly committed by the trial court, which petitioner was raising in the Court of Appeals. The question whether the trial court could correct an error in computing the penalty after its decision had become final was not passed upon by the trial court in deciding the criminal case before it but was determined by it only as an incident of the case. Indeed, the issue in that case was whether petitioner Willy Tan y Chua was guilty of bigamy as the trial court found. If petitioner did not agree with his conviction, an appeal by mere notice to that effect would have been perfectly correct under Rule 122, 3(a).1wphi1.nt But the decision of the trial court on this question has never been disputed by petitioner. No error of judgment had been imputed to the trial court. Rather, what petitioner questioned was the power of the trial court to amend its decision to correct a mistake it had made in fixing the maximum term of the sentence, after the decision had become final. This is a question of jurisdiction. There is therefore no basis for applying Rule 122, 3(a) of the Rules of Criminal Procedure. While a question of jurisdiction may be raised on appeal, in the context of this case, this was not possible because the majority's premise is precisely that the trial court had lost jurisdiction over the case as its decision had become final while at the same time saying that appeal was petitioner's appropriate remedy. Nor can it be argued that petitioner could not have appealed until the trial court modified its judgment because petitioner was not questioning the original decision but only the decision as modified. Amendments retroact to the date of the original judgment. At any rate, this only shows the absurdity of allowing appeal when the reason of the majority is that the decision of the trial court could no longer be modified because it had become final. This brings me to my second point. Second. Even assuming that appeal was the appropriate remedy, because it was a question of law that petitioner wanted to raise, the appeal should have been to this Court, not the Court of Appeals, and it should have been by petition for review on certiorari, not by mere notice of appeal. Art. VIII, 5(2)(e) of the Constitution provides that the Supreme Court shall have appellate jurisdiction over "all cases in which only an error or question of law is involved." This jurisdiction of the Supreme Court is exclusive by reason of 17, par. 4(4) of the Judiciary Act of 1948, which provides:

SEC. 17. Jurisdiction of the Supreme Court. - . . . . The Supreme Court shall further have exclusive jurisdiction to review, revised, reverse, modify or affirm oncertiorari as the law or rules of court may provide, final judgments and decrees of inferior courts as herein provided, in . (4) All other cases in which only errors or questions of law are involved: Provided, however, That if, in addition to constitutional, tax or jurisdictional questions, the cases mentioned in the three next preceding paragraphs also involve questions of fact or mixed questions of fact and law, the aggrieved party shall appeal to the Court of Appeals; and the final judgment or decision of the latter may be reviewed, revised, reversed, modified or affirmed by the Supreme Court on writ of certiorari; . . . . (Emphasis added) Art. VIII, 5(2)(e) of the Constitution provides that the appeal shall be "by certiorari as the law or the rules of court may provide." Accordingly, Rule 122, 3(d) states that "all other appeals to the Supreme Court [in criminal cases other than those involving the imposition of reclusion perpetua or life imprisonment or death] shall be by a petition for review on certiorari under Rule 45." As petitioner simply filed a mere notice of appeal with the trial court, his appeal was correctly dismissed by the Court of Appeals. The majority contends that the Court of Appeals has appellate jurisdiction over cases in which the only question is a question of law that may be brought by mere notice of appeal filed with the trial court because of Rule 42, 2 and Rule 44, 15 of the 1997 Rules of Civil Procedure, which are made applicable to 4 criminal cases by Rule 124, 18 of the Rules of Criminal Procedure. These Rules state: Rule 42, 2. Form and contents. The petition shall be filed in seven (7) legible copies, with the original copy intended for the court being indicated as such by the petitioner, and shall (a) state the full names of the parties to the case, without impleading the lower courts or judges thereof either as petitioners or respondents; (b) indicate the specific material dates showing that it was filed on time; (c) set forth concisely a statement of the matters involved, the issues raised, the specification of errors of fact or law, or both, allegedly committed by the Regional Trial Court, and the reasons or arguments relied upon for the allowance of the appeal; (d) be accompanied by clearly legible duplicate originals or true copies of the judgments or final orders of both lower courts, certified correct by the clerk of court of the Regional Trial Court, the requisite number of plain copies thereof and of the pleadings and other material portions of the record as would support the allegations of the petition. . . . (Emphasis added) Rule 44, 15. Questions that may be raised on appeal. Whether or not the appellant has filed a motion for new trial in the court below, he may include in his assignment of errors any question of law or fact that has been raised in the court below and which is within the issues framed by the parties. (Emphasis added) Mixed questions of fact and law may be raised in the Court of Appeals but not pure questions of law. This is clear from 17, par. 4(4) of the Judiciary Act of 1948 as quoted above. The exclusive jurisdiction of this Court over appeals in which only errors or questions of law are involved is affirmed in B.P. Blg. 129, 9 defining the jurisdiction of the Court of Appeals. This provision reads in part:

SEC. 9. Jurisdiction. The Court of Appeals shall exercise: .... (3) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders, or awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commissions, including the Securities and Exchange Commission, the Social Security Commission, the Employees Compensation Commission and the Civil Service Commission, except those falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the Labor Code of the Philippines under PD No. 442, as amended, the provisions of this Act, and of subparagraph (1) of the third paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948. . . . (Emphasis added) The phrase "errors of fact or law or both" found in Rule 42, 2 and the phrase "any question of law or fact" in Rule 44, 15 must, therefore, be understood to mean "question of fact or mixed questions of fact and law" when referring to cases falling within the appellate jurisdiction of the Court of Appeals. The reason for this is simple. Rule 42, 2 and Rule 44, 15 are procedural rules, and it is conventional learning that procedural rules cannot amend or change substantive laws, such as the Constitution, the Judiciary Act of 1948 (R.A. No. 296), and the Judiciary Reorganization Act of 1980 (B.P. Blg. 129). As petitioner's appeal did not involve either a question of fact or a mixed question of fact and law, but solely a question of law, resort to the Court of Appeals by mere notice of appeal was erroneous, and therefore the appeal was correctly dismissed. Under no circumstance can the appeal be taken to the Court of Appeals without violating the Judiciary Act of 1948 and B.P. Blg. 129. Third. Petitioner's remedy was to file a petition for certiorari under Rule 65, 1 for, as already shown, the question raised is not an error of law but an alleged error of jurisdiction. Such petition should be filed in the Court of Appeals pursuant to B.P. Blg. 129, 9 by means of special civil action of certiorari. Such petition should have been brought within 60 days from notice to petitioner of the ruling of the trial court, which is now long over.1wphi1.nt Nonetheless, the majority argues that this Court should relax the rules and decide directly the question raised by petitioner in the Court of Appeals, namely, whether the trial court could correct the penalty imposed on petitioner after its decision had become final. It is contended that this is necessary because a constitutional right of petitioner has been violated, i.e., the right of petitioner not to be placed in double jeopardy. Rules governing jurisdiction and the procedure for appeals as discussed above are not mere technicalities. They are part and parcel of the system of doing justice. It is justice according to law which we administer. As the majority notes, Rule 115, 1(i) gives every accused the right to appeal from a judgment of conviction. The same Rule provides, however, that the exercise of the right to appeal must be "in the manner prescribed by law." Nor is it tenable to invoke "demands of substantial justice" in this case as ground for setting aside the rules. Justice is due the State and the complainant in the criminal case as much as it is due petitioner. Again and again, the majority harps on the fact that the decision of the trial court had already become final and therefore it could no longer be modified even if that was to correct a plain error in computing the penalty. We are told that petitioner has the right not to be placed in double jeopardy of punishment for the same offense. This is not however the issue before this Court. The issue here is whether the Court of

Appeals erred in dismissing petitioner's appeal (1) because appeals in cases in which the only error assigned is a question of law are exclusively cognizable by this Court and petitioner should have filed a petition for review on certiorari, not a mere notice of appeal given to the trial court and (2) because petitioner's remedy was really a special civil action of certiorari under Rule 65. It is I think misplaced sentimentality to argue on the constitutional right of petitioner when he had his remedies to seek vindication of this right but lost them by default by failing to avail himself of those remedies in the law. What about the right of the State and of complainant to have the correct penalty imposed on petitioner who does not question his conviction? After all, the mistake in the imposition of the penalty was that of the trial court, not that of the State and the complainant. The demands of justice would seem to indicate that petitioner be not allowed to invoke the finality of the erroneous sentence in order to escape his just deserts. After all, what the trial court did in this case was to correct an error it had made in fixing the maximum term of the sentence on petitioner. Petitioner, who does not question his liability for bigamy, can claim no vested right in the erroneous sentence. To summarize them, petitioner had remedies available to him for the correction of an error allegedly committed by the trial court. But he lost those remedies by default. We cannot set aside the rules just so he will be able to raise the questions which he sought to raise in the Court of Appeals. We must abide by our rules. This is the essence of the Rule of Law. I vote therefore to affirm the decision of the Court of Appeals.

Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 139368 November 21, 2002]

ROBIN M. CANO, petitioner, vs. THE CHIEF, PHILIPPINE NATIONAL POLICE, EDGAR C. GALVANTE, as Police Director for Personnel and Records Management, PNP, and the DEPARTMENT OF INTERIOR AND LOCAL GOVERNMENT, respondents. RESOLUTION QUISUMBING, J.: This petition for review on certiorari assails (a) the order dated May 17, 1999 of the Regional Trial Court of Quezon City, Branch 224, in Civil Case No. Q-98-36370, dismissing the complaint filed on December 21, 1998 by petitioner against respondents for payment of back salaries and allowances amounting to P301,018; and (b) the order of said court denying on July 15, 1999, his motion for reconsideration. The factual background of the instant petition, as culled from the records of the case, is as follows: For the alleged bungled investigation of the Eileen Sarmenta and Allan Gomez rape-slay, a complaint for grave misconduct was filed with the National Police Commission under the Department of Interior and Local Government against petitioner, then Police Chief Inspector of the Calauan Police Station. The Chief of the Philippine National Police (PNP) found petitioner
1

guilty and ordered his summary dismissal from the service, in a 2 decision dated July 12, 1995. Petitioner appealed his dismissal to the National Appellate Board of the National Police Commission (NAPOLCOM). On May 15, 1997, the NAPOLCOM reversed the decision of the PNP Chief: WHEREFORE, premises considered, we find respondent appellant, Chief Inspector ROBIN M. CANO administratively culpable for Simple Misconduct and hereby orders (sic) his suspension for a period of three (3) months. Considering, however, that said respondent had been under suspension since August 7, 1995, pursuant to Special Order No. 1690 dated August 8, 1995, the penalty imposed is considered deemed served. Respondent-Appellant is strongly warned to be more prudent and responsible in the exercise of his duties as a 3 member of the PNP. The NAPOLCOM decision having been allowed by both parties to become final and executory, petitioner was restored to full duty status effective May 15, 1997. He also received all benefits and emoluments pertaining to his post pursuant to PNP Special Order No. 1341. With the modification of his penalty to three (3) months suspension, petitioner filed a claim for payment of back salaries and other allowances corresponding to the period he was allegedly unjustly discharged from service until he was restored to full duty status, or from August 7, 1995 to May 15, 1997. However, this claim, computed by the PNP Regional Police Comptrollership and Finance Division to be Three Hundred One Thousand Eighteen Pesos (P301,018.00), was denied by respondent Police Director Edgar C. Galvante of the PNP Directorate for Personnel and Records Management (DPRM) on the strength of a Memorandum/Opinion from the PNP Legal Service. Petitioner forthwith asked for a reconsideration of the denial but the same was rejected. On account of said denial, petitioner filed on December 23, 4 1998 a complaint before the Regional Trial Court of Quezon City for the recovery of his back salaries and other allowances for the said period. The court a quo dismissed the complaint in an order dated May 17, 1999. Said the trial court: The Court is prone to agree with the stand and position of the defendants that plaintiff's claim should not be granted because plaintiff has not shown any clear and legal right which would entitle him to back salaries, allowances and other benefits and besides, plaintiff has failed to exhaust administrative remedies no[t] discounting the fact that his claim against defendants is actually a suit against the state. xxx This complaint is actually a suit against the government because the ultimate liability for payment of back salaries, etc. will fall on the government. This being so, this case should be dismissed because the government cannot be sued without its consent. Accordingly, therefore, the Court has to dismiss this case without costs against the plaintiff. IT IS SO ORDERED.
5

penalty of dismissal to mere suspension for three months. But secondarily, it should be asked whether petitioner failed to exhaust the administrative remedies available to him so as to render the filing of the complaint with the trial court premature? At the outset, we note that the principal issue raised before us is a mixed question of fact and law. There is a question of fact when doubt or difference arises as to the truth or falsehood of 7 the alleged facts, and there is a question of law where the doubt or difference arises as to what the law is on a certain 8 state of facts. Here, petitioner seeks to recover back salaries and allowances allegedly due him from August 7, 1995, when he was unjustly discharged from the service, to May 15, 1997, when he was restored to full duty status. The determination of petitioner's entitlement to said back salaries and allowances is a mixed question as it involves the determination of his duty status for the period of his claim and the resolution of whether the petitioner was acquitted by the NAPOLCOM Appellate Board in its decision finding him liable only for simple misconduct, not gross misconduct. Under Section 1 of Rule 45 of the Rules of Court, an appeal by certiorari to this Court should raise only questions of law which must be distinctly set forth in the petition. It is elementary that a review is not a matter of right, but of sound judicial discretion, and will be granted only when there are special and important 9 reasons therefor. As the error raised herein includes one of fact and law, and not a proper subject for a petition for review on certiorari, we are constrained to decline exercise of our equity jurisdiction in this case. At any rate, petitioner also failed without justifiable cause to observe due regard for the hierarchy of courts. Even on this reason alone, we are constrained to deny the petition. The policy of this Court respecting the hierarchy of courts and, consequently, prohibiting the filing of a petition in this Court in view of the concurrent jurisdiction with the lower courts has been consistently observed in the absence of any compelling 10 reason for departing from such policy. Pursuant to Section 2, 11 Rule 41 of the Rules of Court, petitioner should have taken his appeal to the Court of Appeals. Having ruled for the denial of the petition, we need not tarry on the other issues that may have been raised in the petition. WHEREFORE, the instant petition is DENIED. The order of the Regional Trial Court, Branch 224, Quezon City, in Civil Case No. Q-98-36370 is AFFIRMED. No pronouncement as to costs. SO ORDERED. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 165679 October 5, 2009

On May 31, 1999, petitioner moved for the reconsideration of the trial court's decision, but his motion was denied in an order dated July 15, 1999. Accordingly, petitioner filed the instant appeal via petition for review on certiorari, raising only one issue: Whether or not the petitioner is entitled to his claim for back salaries and allowances under the terms of the decision of the 6 NAPOLCOM Appellate Board. Mainly involved in this controversy is petitioner's entitlement to back salaries and other allowances upon the reduction of his

ENGR. APOLINARIO DUEAS, Petitioner, vs. ALICE GUCE-AFRICA, Respondent. DECISION DEL CASTILLO, J.: Time and again, we have held that in a petition for review on certiorari filed under Rule 45 of the Rules of Court, we cannot review or pass upon factual matters, save under exceptional circumstances, none of which obtains in the present case. Petitioner endeavors in vain to convince us that the trial court and the Court of Appeals erred in finding him negligent in the construction of respondents house and holding him liable for breach of contract.

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court seeking to reverse and set aside the April 29, 2 2004 Decision of the Court Appeals in CA-G.R. CV No. 70757, 3 which affirmed the December 21, 2000 Decision of the Regional Trial Court, Branch 157, Pasig City, in an action for 4 breach of contract with damages filed by respondent against petitioner. THE FACTS For respondent and her family, April 18, 1998 was supposed to be a special occasion and a time for family reunion. It was the wedding date of her sister Sally Guce, and respondents other siblings from the United States of America, as well as her mother, were expected to return to the country. The wedding ceremony was set to be held at the familys ancestral house at San Vicente, Banay-banay, Lipa City, where respondents relatives planned to stay while in the Philippines. Respondent found the occasion an opportune time to renovate their ancestral house. Thus, in January 1998 she entered into a 5 Construction Contract with petitioner for the demolition of the ancestral house and the construction of a new four-bedroom residential house. The parties agreed that respondent would pay P500,000.00 to the petitioner, who obliged himself to furnish all the necessary materials and labor for the completion of the project. Petitioner likewise undertook to finish all interior portions of the house on or before March 31, 1998, or more than two weeks before Sallys wedding. On April 18, 1998, however, the house remained unfinished. The wedding ceremony was thus held at the Club Victorina and respondents relatives were forced to stay in a hotel. Her mother lived with her children, transferring from one place to another. On July 27, 1998, respondent filed a Complaint for breach of contract and damages against petitioner before the Regional Trial Court of Pasig City. She alleged, among others, that petitioner started the project without securing the necessary permit from the City Engineers Office of Lipa City. Respondent likewise alleged that, all in all, she gave petitioner P550,000.00 (which is P50,000.00 more than the contract price). However, and despite knowledge that the construction of the house was intended for the forthcoming marriage of respondents sister, petitioner unjustly and fraudulently abandoned the project leaving it substantially unfinished and incomplete. Several demands were made, but petitioner obstinately refused to make good his contractual obligations. Worse, petitioners workmanship on the incomplete residential house was substandard. Respondent prayed for the return of the P50,000.00 overpayment. She also prayed for an award of P100,000.00 for the purpose of repairing what had been poorly constructed and at least P200,000.00 to complete the project. In his Answer with Counterclaim, petitioner asserted that it was respondent who undertook to secure the necessary government 8 permits. With regard to the alleged overpayment, petitioner claimed that the amount ofP50,000.00 was in payment for the additional works which respondent requested while the construction was still on going. In fact, the estimated cost for the additional works amounted to P133,960.00, over and above theP500,000.00 contract price. Petitioner likewise alleged that the delay in the construction of the house was due to circumstances beyond his control, namely: heavy rains, observance of Holy Week, and celebration of barangay fiesta. Ultimately, he was not able to complete the project because on May 27, 1998, respondent went to his house and told him to stop the work. He maintained that he cannot be held liable for the amounts claimed by the respondent in her complaint considering that he had faithfully complied with the
7 6

terms and conditions of the Construction Contract. On February 19, 1999, pre-trial conference was conducted. Thereafter, trial ensued. Respondent testified on the material points alleged in her complaint. She also presented the testimony of her brother Romeo Guce, who declared on the witness stand that petitioner confided to him that he had to stop the construction because he could no longer pay his workers. He also testified that petitioner asked for additional amount of about P20,000.00 to finish the house. He relayed this to the respondent who refused to release any additional amount because of petitioners unsatisfactory and substandard work. But later on, respondent acceded and gave petitioner P20,000.00. To establish the status of the project and determine the amount necessary for the repair and completion of the house, respondent presented Romeo Dela Cruz, a licensed realtor and a graduate of an engineering course at the Technological Institute of the Philippines. Dela Cruz testified that he conducted an ocular inspection on the construction site in November 1998 and found that only about 60% of the project had been accomplished. Some parts of the project, according to the witness, were even poorly done. He likewise testified that in order to repair the poorly constructed portion of the house, respondent would need to spend about P100,000.00 and anotherP200,000.00 to complete it. Petitioner also took the witness stand and testified on matters relative to the defenses he raised in his answer. On December 21, 2000, the RTC rendered a Decision in favor of the respondent and against the petitioner. The RTC gave more credence to respondents version of the facts, finding thatClearly, Dueas [herein petitioner] failed to tender performance in accordance with the terms and conditions of the construction contract he executed with Africa [herein respondent]. He failed to construct a four-bedroom residential house suitable and ready for occupancy on a stipulated date. Dueas was fully aware that Africa needed the new house for a long scheduled family event precisely a completion date was included and specified in the transaction. Despite knowledge and receipt of payment from Africa, Dueas failed to deliver what was incumbent upon him under the undertaking. He unjustifiably incurred delay in the construction of the new building and wrongfully deprived Africa and her family of the use and enjoyment of the subject property. Bad weather, observance of the Holy Week and barangay fiesta are insufficient excuses. As a building contractor Dueas should have provided for such contingencies. Mere inconvenience or unexpected impediments will not relieve a party of his obligation. Granting that he was not yet fully paid for the additional work by Africa, provisions or arrangements should have been made to ensure completion of the project within the agreed period. Moreover, Dueas negligently abandoned the unfinished structure shortly after a confrontation with Africa and family. Rain water sipped[sic] into the house because Dueas failed to secure the roofing and wall flushing. The house remained [un]habitable because fixtures and devises were yet to be installed. Dueas failed to exercise the required diligence as a contractor and is guilty of negligence and delay. He must be made responsible for the foreseen effect of the exposure of the new structure to the elements. Significantly, the poor construction performance manifested in the structure after Dueas in bad faith abandoned it. Indeed, the newly constructed edifice needs significant repairs if only to 10 make it habitable for its occupants. Consequently, the fallo of the RTC decision reads:
9

WHEREFORE, judgment is hereby rendered in favor of plaintiff Alice G. Africa and against defendant Apolinario Dueas who is hereby directed to pay plaintiff: - P100,000.00 for the necessary repair of the structure; - 200,000.00 for the completion of the construction; - 50,000.00 as and for attorneys fees; - and costs of suit. Plaintiffs claim for moral, nominal and exemplary damages are hereby denied for lack of sufficient basis. SO ORDERED.
11

Petitioner endeavors to convince us to determine, yet again, the weight, credence, and probative value of the evidence presented. This cannot be done in this petition for review on certiorari under Rule 45 of the Rules of Court where only questions of law may be raised by the parties and passed upon 17 by us. In Fong v. Velayo, we defined a question of law as distinguished from a question of fact, viz: A question of law arises when there is doubt as to what the law is on a certain state of facts, while there is a question of fact when the doubt arises as to the truth or falsity of the alleged facts. For a question to be one of law, the same must not involve an examination of the probative value of the evidence presented by the litigants or any of them. The resolution of the issue must rest solely on what the law provides on the given set of circumstances. Once it is clear that the issue invites a review of the evidence presented, the questioned posed is one of fact. Thus, the test of whether a question is one of law or of fact is not the appellation given to such question by the party raising the same; rather, it is whether the appellate court can determine the issue raised without reviewing or evaluating the evidence, in which case, it is a question of law; otherwise, it is a question of fact. It has already been held that the determination of the existence of a breach of contract is a factual matter not usually reviewable 18 in a petition filed under Rule 45. We will not review, much less reverse, the factual findings of the Court of Appeals especially where, as in this case, such findings coincide with those of the 19 trial court, since we are not a trier of facts. The established rule is that the factual findings of the Court of Appeals affirming those of the RTC are conclusive and binding on us. We are not wont to review them, save under exceptional circumstances as: (1) when the inference made is manifestly mistaken, absurd or impossible; (2) when there is grave abuse of discretion; (3) when the findings are grounded entirely on speculations, surmises or conjectures; (4) when the judgment of the Court of Appeals is based on misapprehension of facts; (5) when the Court of Appeals, in making its findings, went beyond the issues of the case and the same is contrary to the admissions of both appellant and appellee; (6) when the findings of fact are conclusions without citation of specific evidence on which they are based; (7) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties and which, if properly considered, would justify a different conclusion; and (8) when the findings of fact of the Court of Appeals are premised on the absence of evidence and are contradicted by the 20 evidence on record. Except with respect to the first ground advanced by the petitioner which will be discussed later, none of the above exceptions obtain in this case. Hence, we find no cogent reason to disturb the findings of the RTC and affirmed by the Court of Appeals that petitioner was negligent in the construction of respondents house and thus liable for breach of contract. Respondent not entitled to actual damages for want of evidentiary proof Petitioner further argues that the appellate court erred in affirming the RTCs award of actual damages for want of evidentiary foundation. He maintains that actual damages must be proved with reasonable degree of certainty. In the case at bench, petitioner argues that the trial and the appellate courts awarded the amounts of P100,000.00 and P200,000.00 as actual damages based merely on the testimonies of respondent and her witness. We agree. Article 2199 of the Civil Code provides that "one is entitled to an adequate compensation only for such pecuniary loss suffered by him as he has duly proved." In Ong v. Court of 21 Appeals, we held that "(a)ctual damages are such compensation or damages for an injury that will put the injured party in the position in which he had been before he was injured. They pertain to such injuries or losses that are actually sustained and susceptible of measurement." To be recoverable,

Both parties were unsatisfied. They thus brought the matter to the Court of Appeals assailing the Decision of the RTC. The appellate court, however, found no cogent reason to depart from the trial courts conclusion. Thus, on April 29, 2004, it 12 rendered the herein assailed Decision affirming with modification the RTCs ruling, viz: WHEREFORE, in view of the foregoing, the Decision of the Regional Trial Court of Pasig City, Branch 157, dated 21 December 2000, is hereby AFFIRMED WITH MODIFICATION that the award of attorneys fees is hereby DELETED. SO ORDERED.
13

ISSUES Feeling aggrieved but still undeterred, petitioner interposes the present recourse anchored on the following grounds: I. THE COSTS OF ACTUAL DAMAGES AWARDED ARE BASED 14 ON MERE SPECULATIONS AND CONJECTURES. II. THE RULINGS THAT DUEAS ABANDONED THE WORK AND INCURRED DELAY ARE CONTRARY TO THE 15 EVIDENCE. III. THE DAMAGES CAUSED BY RAIN WATER WERE NOT DUE 16 TO APOLINARIO DUEAS FAULT OR NEGLIGENCE. OUR RULING For purposes of clarity, we shall tackle simultaneously the second and third arguments raised by the petitioner. Instant petition not available to determine whether petitioner violated the contract or abandoned the construction of the house Petitioner contends that he neither abandoned the project nor violated the contract. He maintains that continuous rains caused the delay in the construction of the house and that he was not able to finish the project because respondent ordered him to stop the work. In fact, there was no reason for him to stop the project because he still had available workers and materials at that time, as well as collectibles from the respondent. Petitioner likewise contends that the Court of Appeals erred in upholding the trial courts finding that he was guilty of negligence. The contentions lack merit.

actual damages must not only be capable of proof, but must actually be proved with reasonable degree of certainty. We cannot simply rely on speculation, conjecture or guesswork in determining the amount of damages. Thus, it was held that before actual damages can be awarded, there must be competent proof of the actual amount of loss, and credence can 22 be given only to claims which are duly supported by receipts. Here, as correctly pointed out by petitioner, respondent did not present documentary proof to support the claimed necessary expenses for the repair and completion of the house. In awarding the amounts of P100,000.00 andP200,000.00, the RTC and the Court of Appeals merely relied on the testimonies of the respondent and her witness. Thus: As to the award of P100,000.00 as cost of repair and P200,000.00 as the amount necessary to complete the house, the Court finds the same to be in the nature of actual damages. It is settled that actual damages must be supported by best evidence available x x x. In the case at bar, the Court finds that the testimony of the plaintiff-appellant in this regard is supported by the testimony of Romeo dela Cruz, a realtor, who inspected the structure after it remained unfinished. Said testimonies are sufficient to establish the claim. x x x Respondent entitled to temperate damages in lieu of actual damages Nonetheless, in the absence of competent proof on the amount of actual damages suffered, a party is entitled to temperate damages. Articles 2216, 2224 and 2225 of the Civil Code provide: Art. 2216. No proof of pecuniary loss is necessary in order that moral, nominal, temperate, liquidated or exemplary damages may be adjudicated. The assessment of such damages, except liquidated ones, is left to the discretion of the court, according to the circumstances of each case. Art. 2224. Temperate or moderate damages, which are more than nominal but less than compensatory damages, may be recovered when the court finds that some pecuniary loss has been suffered but its amount can not, from the nature of the case, be proved with certainty. Art. 2225. Temperate damages must be reasonable under the circumstances. Temperate or moderate damages may be recovered when some pecuniary loss has been suffered but its amount cannot, 23 from the nature of the case, be proved with certainty. The amount thereof is usually left to the discretion of the courts but the same should be reasonable, bearing in mind that temperate damages should be more than nominal but less than 24 compensatory. There is no doubt that respondent sustained damages due to the breach committed by the petitioner. The transfer of the venue of the wedding, the repair of the substandard work, and the completion of the house necessarily entailed expenses. However, as earlier discussed, respondent failed to present competent proof of the exact amount of such pecuniary loss. To our mind, and in view of the circumstances obtaining in this case, an award of temperate damages equivalent to 20% of the original contract price of P500,000.00, or P100,000.00 (which, incidentally, is equivalent to 1/3 of the total amount claimed as actual damages), is just and reasonable. WHEREFORE, the instant petition is PARTIALLY GRANTED. The Decision of the Court of Appeals dated April 29, 2004 in CA-G.R. CV No. 70757 is AFFIRMED with modification that the award of actual damages is deleted and, in lieu thereof, petitioner is ordered to pay respondent temperate damages in the amount of P100,000.00.

SO ORDERED.

Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. L-63557 October 28, 1983 LINGNER & FISHER GMBH, petitioner, vs. INTERMEDIATE APPELLATE COURT, HON. RICARDO L. PRONOVE JR. and PHILIPPINE CHEMICAL LABORATORIES, INC., respondents. Romulo, Mabanta, Buenaventura & Sayoc & De los Reyes Law Office for petitioner. Bueno, Bilog and Villa Law Office for respondent. RESOLUTION

MELENCIO-HERRERA, J.: The factual background of this case may be stated as follows: DEUTCHE MILCHWERKE DR. A. SAUER (DMW for brevity) was a firm in West Germany manufacturing PRODUCTS (probably chemicals) under the trademarks FISSAN, etc. Private respondent Philippine Chemical Laboratories, Inc. (PHILCHEM, for brevity) is a local company which apparently also manufactures and sells chemicals. On February 28, 1963, DMW and PHILCHEM executed a socalled Agency AGREEMENT the basic provision of which was that PHILCHEM would be the exclusive importer of the PRODUCTS into the Philippines. The benefit to PHILCHEM would be the profits realized from re-sale in this country of imported PRODUCTS. Other relevant provisions, generally stated, were that: (a) The term of the AGREEMENT was five years renewable automatically for five years each time unless one party gives due notice of termination to the other. (b) PHILCHEM could manufacture the PRODUCTS locally with raw materials from sources other than LINGNER, but in such case DMW will have to be paid 5% of 80% of PHILCHEM's wholesale prices. (c) After termination of the AGREEMENT, PHILCHEM will be entitled, for five years, to 10% royalty on sales of PRODUCTS in the Philippines (hereinafter to be referred to as the ROYALTY CLAUSE). (d) "All legal settlements within the compass of this AGREEMENT shall fall under the jurisdiction of Philippine courts." It appears that, subsequently, the DMW interests were acquired by LINGNER & FISHER GMBH LINGNER for brevity). On other hand, LINGNER was a subsidiary of BEECHAM GROUP LTD. which, through BEECHAM PRODUCTS INTERNATIONAL (BEECHAM, for brevity), had opened an office in this country at Unit A, Padilla Building, Emerald Avenue, Pasig, Metro Manila, under the supervision or managership of one named TANNER. LINGNER and BEECHAM can be deemed to constitute a single personality.

Subsequent reference to LINGNER will include reference to DMW and BEECHAM. The AGREEMENT was automatically renewed once, or up to February 28, 1973, and finally terminated on August 31, 1977. The events relative to the termination were as follows: Before February 28, 1973, the parties agreed to extend the AGREEMENT up to February 28, 1975. If it is not terminated by prior notice six months before February 28, 1975, as it was not, it would be extended for a further two years up to February 28, 1977. By letter dated February 25, 1977, through the law firm of Ozaeta Romulo, De Leon, Mabanta, Buenaventura, Sayoc and De los Angeles (the Law Firm, for brevity) PHILCHEM was advised that LINGNER was interested in continuing business relationship with PHILCHEM and will be interested in negotiating a new contract and that, prior to the signing of a new contract, LINGNER was proposing that the old contract be extended by mutual agreement for a period of six (6) calendar months beginning March 1, 1977 to expire automatically on August 31, 1977 if no contract is entered into. The proposal was accepted by PHILCHEM, and no new contract having been signed by August 31, 1977, the AGREEMENT terminated on that date, On July 20, 1979, PHILCHEM presented a claim to LINGNER for P1,055,000.00 under the ROYALTY CLAUSE. The claim was discussed between PHILCHEM and TANNER of BEECHAM with the intervention of the Law Firm. No settlement having been arrived at, PHILCHEM, on August 6, 1980, filed a complaint against BEECHAM alone in Civil Case No. 38086 of the then Court of First Instance of Rizal. The summons issued could not be served on BEECHAM, the Sheriff having reported that BEECHAM was neither a company registered in the Philippines, nor resident at the given address of Unit A, Padilla Building, Emerald Avenue, Pasig, Metro Manila. PHILCHEM then filed an amended complaint, this time making LINGNER and BEECHAM as the defendants, and pleading that summons could be served on the Law Firm as an agent of the defendants. The Law Firm submitted a special appearance in the case on behalf of LINGNER, and, also on behalf of LINGNER, moved for dismissal on the grounds (a) that LINGNER was not a foreign corporation doing business in the Philippines and hence could not be sued locally, and, (b) that LINGNER could not be served with summons through the Law Firm. It will thus be noted that two issues were being raised. The first was whether or not LINGNER was doing business in the Philippines; and the second was whether or not LINGNER could be validly summoned through the Law Firm as its agent. The Trial Court denied the Motion to Dismiss, assuming that LINGNER could be sued in this jurisdiction, and holding that LINGNER can be served with summons through the Law Firm. LINGNER went on certiorari to the Intermediate Appellate Court where it reiterated the plea that summons could not be validly served on it through the Law Firm; and it also requested that a hearing be held, conformably to the provisions of Section 9(3) of Batas Pambansa Blg. 129, on the question of whether or not LINGNER was doing business in this country. The Appellate Court held that summons served through the Law Firm was valid on the strength of Johnlo Trading Co. vs. Flores (88 Phil. 741 [1951]); and it further ruled that receiving evidence on whether or not LINGNER was doing business in the Philippines could not be justified under the cited Batas Pambansa Blg. 129. Considering the Comment, Reply, Rejoinder and Surrejoinder submitted by the parties, we resolved to give due course, without requiring the submittal of memoranda. The Appellate Court acted correctly in denying the request for an evidentiary hearing. Evidence necessary in regards to

factual issues raised in cases falling within the Appellate Court's original and appellate jurisdiction contemplates "incidental" facts which were not touched upon, or fully heard by the trial or respondent Court. The law could not have intended that the Appellate Court would hold an original and full trial of a main factual issue in a case, which properly pertains to Trial Courts. It is our view that evidence as to whether LINGNER was doing business in the Philippines, even before the Trial Court, is no longer necessary in view of the fact that PHILCHEM and LINGNER were contractees in the AGREEMENT and the claim of PHILCHEM is based on the ROYALTY CLAUSE of that AGREEMENT. Whether LINGNER is or is not doing business in the Philippines will not matter because the parties had expressly stipulated in the AGREEMENT that all controversies based on the AGREEMENT "shall fall under the jurisdiction of Philippine courts". In other words, there was a covenant on venue to the effect that LINGNER can be sued by PHILCHEM before Philippine Courts in regards to a controversy related to the AGREEMENT. A case should not be dismissed simply because an original summons was wrongfully served. It should be difficult to conceive, for example, that when a defendant personally appears before a Court complaining that he had not been validly summoned, that the case filed against him should be dismissed. An alias summons can be actually served on said defendant. For the expeditious determination of this controversy, therefore, in view of the insufficiency of evidence that LINGNER is doing business in the Philippines, which is a sine qua 1 non requirement under the provision of Section 14, Rule 14 of the Rules before service of process can be effected upon a foreign corporation and jurisdiction over the same may be acquired, it is best that alias summons on LINGNER be issued, 2 in this case under the provisions of Section 17, Rule 14, in relation to Rule 4 of the Rules of Court, which recognizes the principle that venue can be agreed upon by the parties. If a local plaintiff and a foreign corporation have agreed on Philippine venue, summons by publication can be made on the foreign corporation under the principle of liberal construction of the rules to promote just determination of actions. ACCORDINGLY, the judgment under review of the Intermediate Appellate Court (Third Special Cases Division) is hereby upheld insofar as it sustained the Orders, dated August 24, 1981 and December 18, 1981, of the then Court of First Instance of Rizal, Branch XI, Pasig, denying petitioner's Motion to Dismiss and the subsequent Motion for Reconsideration, albeit on grounds different from those relied upon by the Intermediate Appellate Court. The now Regional Trial Court, to which the case below has been assigned, is hereby directed to allow private respondent Philippine Chemical Laboratories, Inc., to apply for the issuance of alias summons on petitioner Lingner and Fischer GMBH by publication under the provisions of Section 17, Rule 14 in relation to Rule 4 of the Rules of Court, and after issues have been joined, to proceed to trial and judgment accordingly. No pronouncement as to costs. SO ORDERED.

REGIONAL TRIAL COURT

Republic of the Philippines SUPREME COURT Manila

SECOND DIVISION

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:

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

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, L26816, 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, L12707, 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

action to annul a document or declare it null and void, hence, one incapable of pecuniary estimation falling within the jurisdiction of the Regional Trial Court. Private respondents did not oppose the motion for reconsideration. On February 13, 1995, the respondent judge issued another 10 Order denying the motion for reconsideration. Hence, this petition wherein the sole issue raised is whether or not the Regional Trial Court has jurisdiction to entertain Civil Case No. MAN-2275. We find merit in the petition. Petitioners maintain the view that the complaint filed before the Regional Trial Court is for the annulment of a document denominated as "DECLARATION OF HEIRS AND DEED OF CONFIRMATION OF PREVIOUS ORAL PARTITION," which is clearly one incapable of pecuniary estimation, thus, cognizable by the Regional Trial Court. Private respondents, on the other hand, insists that the action is one for re-partition and since the assessed value of the property as stated in the complaint is P5,000.00, then, the case falls within the jurisdiction of the Municipal Circuit Trial Court of Liloan, Compostela, Cebu. For better appreciation of the facts, the pertinent portions of the complaint are reproduced hereunder: xxx xxx xxx

G.R. No. 119347 March 17, 1999 EULALIA RUSSELL, PUPERTO TAUTHO, FRANCISCO TAUTHO, SUSANA T. REALES, APITACIO TAUTHO, DANILO TAUTHO, JUDITHA PROS, GREGORIO TAUTHO, DEODITA T. JUDILLA, AGRIPINO TAUTHO, FELIX TAUTHO, WILLIAM TAUTHO, AND MARILYN PERALES, petitioners, vs. HONORABLE AUGUSTINE A. VESTlL, ADRIANO TAGALOG, MARCELO TAUTHO, JUANITA MENDOZA, DOMINGO BANTILAN, RAUL BATALUNA AND ARTEMIO CABATINGAN, respondent.

KAPUNAN, J.: Before us is a Petition for Certiorari to set aside the Order dated January 12, 1995 issued by respondent Judge Augustine A. Vestil of the Regional Trial Court of Mandaue City, Branch 56, dismissing the complaint filed by petitioners on ground of lack of jurisdiction, as well as his Order dated February 13, 1995 denying petitioners' Motion for Reconsideration of the order of dismissal. The facts of the case are as follows: On September 28, 1994, petitioners filed a complaint against private respondents, denominated "DECLARATION OF NULLITY AND PARTITION," with the Regional Trial Court of Mandaue City, Branch 56, docketed as Civil Case No. MAN2275. The complaint, in substance, alleged that petitioners are co-owners of that parcel of land, Lot 6149 situated in Liloan, Cebu and containing an area of 56,977.40 square meters, more or less. The land was previously owned by the spouses Casimero Tautho and Cesaria Tautho. Upon the death of said spouses, the property was inherited by their legal heirs, herein petitioners and private respondents. Since then, the lot had remained undivided until petitioners discovered a public document denominated "DECLARATION OF HEIRS AND DEED OF CONFIRMATION OF A PREVIOUS ORAL AGREEMENT OF PARTITION," executed on June 6, 1990. By virtue of this deed, private respondents divided the property among themselves to the exclusion of petitioners who are also entitled to the said lot as heirs of the late spouses Casimero Tautho and Cesaria Tautho. Petitioners claimed that the document was false and perjurious as the private respondents were not the only heirs and that no oral partition of the property whatsoever had been made between the heirs. The complaint prayed that the document be declared null and void and an 1 order be issued to partition the land among all the heirs. On November 24, 1994, private respondents filed a Motion to 2 Dismiss the complaint on the ground of lack of jurisdiction over the nature of the case as the total assessed value of the subject 3 land is P5,000.00 which under section 33 (3) of Batas 4 Pambansa Blg. 129, as amended by R.A. No. 7691, falls within the exclusive jurisdiction of the Municipal Circuit Trial 5 Curt of Liloan, Compostela. Petitioners filed an Opposition to the Motion to Dismiss saying that the Regional Trial Court has jurisdiction over the case since the action is one which is incapable of pecuniary estimation within the contemplation of Section 19(1) of B.P. 129, as 7 amended. On January 12, 1995, the respondent judge issued an Order 8 granting the Motion to Dismiss. A Motion for Reconsideration of said order was filed by petitioners on January 30, 1995 alleging that the same is contrary to law because their action is not one for recovery of title to or possession of the land but an
6

3. That the plaintiffs and the defendants are the legal heirs of spouses Casimero Tautho and Cesaria N. Tautho who died long time ago; 4. That in life the spouses became the owners in fee simple of a certain parcel of land, which is more particularly described as follows: A parcel of land containing 56,97740 square meters, more or less, located at Cotcot, Liloan, Cebu. designated as Lot 6149 per Technical Description and Certification issued by the Office of the Land Management copy of which are hereto attached as Annexes "A" and "A-1" and are made part hereof: total assessed value is P5,000.00; 5. That the passed to the children of the spouses (who are all deceased except for defendant Marcelo Tautho), namely: Zacarias, Epifania, Vicenta, Felecisimo, Maria, Lorencia and Marcelo, and which in turn passed to the plaintiffs and defendants upon their death they being their descendants and legal heirs; 6. That the subject parcel of land has for year been undivided by and among the legal heirs of said previous owners; 7. That, very recently, plaintiffs discovered a public document, which is a declaration of heirs and deed of confirmation of a previous oral agreement of partition, affecting the land executed by and among the defendants whereby defendants divided the property among themselves to the exclusion of plaintiffs who are entitled thereto; attached hereto as Annex "B" and is made part hereof is xerox copy of said document; 8. That the instrument (Annex "B") is false and perjurious and is a complete nullity because the defendants are not the only heirs of Casimero Tautho; plaintiffs are also heirs and descendants of said

deceased; moreover, there has been no oral partition of the property; 9. That pursuant to said document (Annex "B"), defendants had procured tax declarations of the land for their supposed "shares" to the great damage and prejudice of plaintiffs; 10. That the property in controversy should be divided into seven (7) equal parts since Casimero Tautho and Cesaria N. Tautho had seven children; 11. That the parties had failed to settle the controversy amicably at the barangay level; attached hereto as Annex "C" is Certification to file Action; 12. That by reason of the foregoing unjust and illegal act of defendants, plaintiffs were forced to bring instant action and contract the services of the undersigned counsel with whom they bind themselves to pay P30,000.00 as attorney's fees. WHEREFORE, it is most respectfully prayed of this Honorable Court to declare null and void the document (Annex "B") of declaration of heirs and confirmation and to order the partition of the land into seven (7) equal parts; each part shall respectively go to the seven (7) children of Casimero Tautho and considering six (6) of them died already the same shall go to their children or descendants, and to order the defendants to pay plaintiffs attorney's fees in the amount of P30,000.00. Plaintiffs further pray for such other reliefs and 11 remedies just and equitable under the premises. We agree with petitioners. The complaint filed before the Regional Trial Court is doubtless one incapable of pecuniary estimation and therefore within the jurisdiction of said court. In Singsong vs. Isabela Sawmill, that:
12

jurisdiction under Sec. 19(2). However, the subject matter of the complaint in this case is annulment of a document denominated as "DECLARATION OF HEIRS AND DEED OF CONFIRMATION OF PREVIOUS ORAL PARTITION." The main purpose of petitioners in filing the complaint is to declare null and void the document in which private respondents declared themselves as the only heirs of the late spouses Casimero Tautho and Cesaria Tautho and divided his property among themselves to the exclusion of petitioners who also claim to be legal heirs and entitled to the property. While the complaint also prays for the partition of the property, this is just incidental to the main action, which is the declaration of nullity of the document above-described. It is axiomatic that jurisdiction over the subject matter of a case is conferred by law and is determined by the allegations in the complaint and the character of the relief sought, irrespective of whether the plaintiff is entitled to all or some of the claims asserted 19 therein. WHEREFORE, premises considered, the petition is hereby GRANTED. The Order dismissing Civil Case No. MAN-2275, as well as the Order denying the motion for reconsideration of said Order, is SET ASIDE. The Regional Trial Court, Branch 56, Mandaue City is ORDERED to proceed with dispatch in resolving Civil Case No. MAN-2275. No costs. SO ORDERED.

18

we had the occasion to rule

[I]n 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 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, where the money claim is purely incidental to, or a consequence of, the principal relief sought, this Court has considered such where the subject of the litigation may not be estimated in terms of money, and are cognizable exclusively by courts of first instance (now Regional 13 Trial Courts). Examples of actions incapable of pecuniary estimation are those for specific performance, support, or foreclosure of 14 mortgage or annulment of judgment; also actions questioning 15 the validity of a mortgage, annulling a deed of sale or 16 conveyance and to recover the price paid and for rescession, 17 which is a counterpart of specific performance. While actions under Sec. 33(3) of B.P. 129 are also incapable of pecuniary estimation, the law specifically mandates that they are cognizable by the MTC, METC, or MCTC where the assessed value of the real property involved does exceed P20,000.00 in Metro Manila, or P50,000.00, if located elsewhere. If the value exceeds P20,000.00 or P50,000.00 as the case may be, it is the Regional Trial Courts which have