G.R. No. 164517 June 30, 2008 BF CORPORATION, petitioner, vs. MANILA INTERNATIONAL AIRPORT AUTHORITY, respondent.

DECISION VELASCO, JR., J.: In this petition for review under Rule 45, petitioner BF Corporation (BF) assails the Decision of the Court of Appeals (CA) that disallowed BF to re-implead the Manila International Airport Authority (MIAA) as a party-defendant in Civil Case No. 66060 entitled BF Corporation v. Tokyu Construction Co., Ltd., Mitsubishi Corporation, A.M. Oreta & Co., Inc., and Manila International Airport Authority. Mitsubishi Corporation (Mitsubishi), Tokyu Construction Co., Ltd. (Tokyu), A.M. Oreta & Co., Inc. (Oreta), and BF formed themselves into the MTOB Consortium (Consortium) to participate in the bidding for the construction of the Ninoy Aquino International Airport Terminal II (NAIA II) Project. MIAA awarded the contract to the Consortium, recognizing that the Consortium was a distinct and separate entity from the four member corporations. Unfortunately, the four members had serious business differences, including the division of the contract price, forcing BF to file on January 10, 1997, with the Regional Trial Court (RTC) in Pasig City, an action for Specific Performance, Rescission, and Damages with application for a Temporary Restraining Order (TRO), docketed as Civil Case No. 66060. BF alleged in its complaint that Tokyu and Mitsubishi invited BF to form a consortium for the NAIA II Project and after the members of the Consortium reached an agreement couched in general terms, for the purpose of prequalification bidding, Tokyu allegedly refused to execute a final consortium agreement; unreasonably demanded that BF reduce its asking prices for its assigned work; engaged the services of other subcontractors to do BFs portion of the project; and refused to remit to BF its 20% share of the down payment, thereby easing out BF in the project in breach of the Consortium agreement. BF prayed that Tokyu be enjoined from further (1) receiving any payment from MIAA for illegally executing BFs portion of the work in the project; (2) engaging the services of other subcontractors to do BFs portion of the project; (3) acting as lead partner of the Consortium; and (4) compelling BF to reduce its prices. BF also prayed that MIAA be enjoined from directly paying Tokyu the collectible compensation vis--vis Tokyus illegal execution of BFs portion in the project.1 The RTC served a TRO on Tokyu, the lead partner of the Consortium. During the hearing on the preliminary injunction, MIAA stressed its position that it should not be dragged into the dispute since it was a consortium internal matter. Thereafter, in an amended complaint, BF dropped MIAA as a party-defendant.

When the RTC issued the Order dated January 21, 1997 extending the TRO, Tokyu filed with the CA a Petition for Certiorari and Prohibition with prayer for a writ of preliminary injunction docketed as CA-G.R. SP No. 43133. Tokyu contended that the order violated (1) Presidential Decree No. 1818 prohibiting any court in the Philippines from issuing any restraining order, preliminary injunction, or preliminary mandatory injunction on any case, dispute, or controversy involving an infrastructure project; and (2) Supreme Court Circular No. 68-94 disallowing issuance of TROs in cases involving government infrastructure projects to obviate complaints against indiscriminate issuance of TROs. On May 15, 1997, the CA dismissed the petition and ordered the trial court to continue hearing the main case. With respect to MIAAs right to intervene, the CA stressed that MIAA was no longer a party-defendant since it had been dropped from the complaint by BF and, therefore, no relief may be had from MIAA. The CA explained that MIAA had nothing to do with whatever BF alleges were violations of the Consortium agreement by Tokyu because these were intraconsortium matters.2 The CA also said it was convinced that "MIAA had no actual, direct and immediate interest" in CA-G.R. SP No. 43133. The CA denied the motion for reconsideration and the RTC proceeded with the case subsequently issuing the Order dated July 8, 1997, which ordered Tokyu to: (1) retrieve its deposit in Japan and make it available in the Philippines for the prompt execution of the project; (2) remit to BF its 20% share in the down payment and its share in the subsequent payments made by MIAA; and (3) allow BF to execute its portion of the work in the project by terminating the services of the subcontractors.3 Tokyu filed before the CA a Petition for Certiorari with urgent prayer for a TRO and preliminary injunction docketed as CA-G.R. SP No. 44729. On October 20, 1997, the Special Seventh Division of the CA granted Tokyus petition and annulled the RTCs Order dated July 8, 1997. On November 26, 1999, when the project was nearing completion, BF filed a second amended complaint. In it, BF pleaded causes of action against Tokyu, Mitsubushi, and Oreta which have all submitted themselves to the jurisdiction of the court, and also MIAA who had possession of money to be paid to Tokyu. BF claimed it was entitled to a proportionate share of the money based on the Consortium agreement. Thus, BF asked that MIAA be re-impleaded as a partydefendant so it could obtain complete relief.4 In an Order dated May 24, 2001, the RTC directed that MIAA be re-impleaded as a partydefendant in Civil Case No. 66060. It said that BFs earlier move to drop MIAA as a party defendant should not preclude it from re-impleading MIAA which still has the obligation to pay the remainder of the contract price. The dispositive portion of the order reads:

WHEREFORE, the order of this Court dated February 23, 2001 is hereby reconsidered insofar as it ordered the dismissal of this case as against MIAA which is hereby restored and re-impleaded as a party defendant. SO ORDERED. The motion for reconsideration was denied in an Order dated September 13, 2001.5 MIAA appealed to the CA alleging grave abuse of discretion on the part of the RTC when it ordered MIAA to be re-impleaded as a party-defendant. The petition was docketed as CA-G.R. SP No. 67765. In a Decision dated January 9, 2004,6 the CA granted MIAAs petition and annulled and set aside the May 24, 2001 and September 13, 2001 Orders in Civil Case No. 66060. The CA said that the RTC committed grave abuse of discretion amounting to lack or excess of jurisdiction when it issued the orders. According to the CA, MIAAs refusal to be a part of the internal squabble among members of the Consortium was not an "act or omission" that gave BF a cause of action. MIAA had not in any way violated any right of BF. The CA commented that an interference by MIAA in the Consortium quarrel could even expose MIAA to a suit by the other members of the Consortium. The CA stressed that MIAA had in fact earlier recognized the Consortium as a distinct and separate personality from its members. As far as MIAA was concerned, the CA concluded that BF was a stranger to the contract between MIAA and the Consortium, and if BFs interest was its right to a portion of the contract price, its proper recourse was to first secure an assignment of its proportionate rights from the Consortium. The CA also pointed out that BF was estopped from treating MIAA as a necessary party, because when it dropped MIAA as a party in its amended complaint without stating why it did, BF implicitly admitted that MIAA was not a necessary party. The CA also ruled that res judicata had set in when the CA denied a reconsideration of the Decision in CA-G.R. SP No. 43133 and said decision was not appealed. Recall that in the said decision, the CA Fourteenth Division stressed that MIAA was no longer a party-defendant since it had been dropped by BF and, therefore, no relief may be had from MIAA; that the case was not a matter in rem but can only give rise to a judgment in personam; that the CA was convinced MIAA had no actual, direct, and immediate interest in the dispute since the dispute was intra-corporate; and that MIAA had nothing to do with BFs complaint against Tokyu.7 The CA added that since the issue with respect to MIAA was not appealed, the said decision had become final and another case on the same issue had been barred by res judicata. The CA also noted that when MIAA was allowed to intervene in the aforementioned case, the RTC had acquired jurisdiction over MIAA; thus, there was identity of parties between CA-G.R. SP No. 43133 and CA-G.R. SP No. 67765. According to the CA, although the subject matter of CA-

G.R. SP No. 43133 was the propriety of the grant of the TRO enjoining Tokyu from receiving any amount from MIAA and the subject matter in CA-G.R. SP No. 67765 was the propriety in including MIAA as a party-defendant in Civil Case No. 66060, both cases involved the issue of whether or not MIAA was a proper party-defendant in Civil Case No. 66060. Thus, the CA concluded that the elements of res judicata were present. The motion for reconsideration was denied by the CA; hence, BF filed this petition raising the following as issues: I. THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT BF HAS NO CAUSE OF ACTION AGAINST MIAA AS, IN FACT, BFS SECOND AMENDED COMPLAINT STATES A CAUSE OF ACTION AGAINST MIAA. II. THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT BF IS ESTOPPED FROM IMPLEADING MIAA IN THE CASE.

III. THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT BF IS BARRED UNDER THE DOCTRINE OF RES JUDICATA FROM IMPLEADING MIAA IN THE MAIN CASE. The appellate court had correctly granted the petition of MIAA. In this petition before us, BF would have us believe that it dropped MIAA as a party-defendant in its first amended complaint because its cause of action against MIAA was not yet ripe.8 It said that it re-impleaded MIAA in the second amended complaint because of the impending release of the final payment and the retention money to Tokyu. And if the project were completed and full payment were given to the Consortium, BF could no longer get its supposed share in the payments. The ultimate facts, as alleged by BF, that are the bases of its cause of action against MIAA, are found on items 2.18 to 2.21 of BFs second amended complaint, as follows : 2.18 To protect its rights and interests, BF, through counsel, wrote MIAA calling its attention to the contract violations committed by TOKYU in bad faith, and requesting its intervention to see an early end to the dispute. More specifically, BF requested MIAA to:

1. Persuade TOKYU to remit to us our rightful 20% share in the downpayment of the Project; 2. Enjoin TOKYUs unauthorized and illegally hired subcontractors from executing BFs portion of the NAIA II project; 3. Directly remit to us our 20% share in the subsequent payments to be made under the construction contract; and 4. Should TOKYU stubbornly refuse to heed any of the above, expel TOKYU from the consortium and let BF, MITSUBISHI and ORETA take over the entire project. xxxx 2.19 Later, BF, through counsel, wrote TOKYU revoking [its] authority as lead partner to represent BF in dealing with MIAA in connection with the execution of the Project x x x. 2.20 Despite the revocation made by BF and its request for MIAA to resolve the dispute, TOKYU continued to act as the lead partner and has in fact taken its role to the extreme by hiring other subcontractors to do BFs portion of the work. On the other hand, MIAA has opted to take a nonchalant hands-off policy, choosing to ignore TOKYUs bullying tactics and iniquitous actions by even awarding the latter with prompt payments of the contract price. Worse, in coddling and protecting TOKYU despite its illegal acts, MIAA has allowed this foreign country to unduly profit from this centerpiece project and stash away the Philippine money it has collected in commercial banks in Japan. 2.21 Further, as a result of MIAAs inaction, the Project is now complete with TOKYU ready and raring to collect the remainder of the contract price from MIAA, including the 10% retention money being held by MIAA and now ready to be released after the Project had been completed.9 (Emphasis supplied.) On the bases of these allegations, we can hardly rule that BF has a cause of action against MIAA. Section 2, Rule 2 of the Rules of Court defines "cause of action" as an act or omission by which one party violates a right of another. It has three elements: (1) a right existing in favor of the plaintiff, (2) a duty on the part of the defendant to respect the right of the plaintiff, and (3) a breach of the defendants duty.10 A close reading of the aforecited portions of the second amended complaint discloses that the rights of BF that have allegedly been violated are those contained in the Consortium agreement. A scrutiny of the agreement, however, would readily show that there is nothing in it that would constitute acts or omissions of MIAA that violate BFs rights. Even if BF wrote

MIAA and called the latters attention to the contract violations of Tokyu and asked MI AA to persuade Tokyu to remit to BF its 20% share in the down payment; enjoin Tokyu from illegally hiring subcontractors to do BFs part of the project; and expel Tokyu from the Consortium, these facts are insufficient to constitute the bases of BFs cause of action against MIAA. The test of sufficiency of the facts alleged in the complaint as constituting a cause of action is whether or not admitting the facts alleged; the court could render a valid verdict in accordance with the prayer of the complaint.11 Even if we assume that the facts alleged were true, we still cannot grant any of BFs prayers against MIAA as we would have no basis to do so in fact and in law. The best evidence to show whether or not BF has a cause of action against MIAA is the contract/agreement itself. The Agreement12 awarding the NAIA II Project to the Consortium was between MIAA and the Consortium, as contractor, represented by the Consortiums project manager. BF was not a party to the Agreement. From the very start, MIAA had categorically said it recognized the Consortium as a distinct and separate entity. The Agreement laid down all the rights and obligations of MIAA to the Consortium and viceversa, and as aptly pointed out by MIAA, payment to BF was not among them. The Agreement does not say that MIAA shall withhold payment in the event that a dispute arises amongst the members of the Consortium. Neither does the contract require MIAA to mediate in any intraconsortium dispute that may arise within the Consortium. The primary obligation of MIAA is found in Article III of the Agreement which stipulates that "MIAA agrees to pay the CONTRACTOR the Contract Price x x x in the manner prescribed by the Contract." Note that the CONTRACTOR refers to the Consortium not to the individual members of the Consortium. BF by itself is not a party to the Agreement. If MIAA is prevented from making payments to the Consortium, MIAA will be considered in breach of the Agreement. Verily, a preliminary prohibitory injunction, enjoining MIAA from releasing to Tokyu the remainder of the contract price owing to the Consortium or any amount for that matter, including the 10% retention fee now ready for release after the project had been completed, cannot be validly issued. If BF wants its share in what was yet due to the Consortium, BFs recourse is against the Consortium. It can present to MIAA an assignment of its alleged rights from the Consortium. Impleading MIAA is not the remedy to enable BF to collect its share in the NAIA II Project of the Consortium. In short, MIAA cannot be ordered to be a collecting agent for BF. To sum up, none of the elements required in Sec. 2, Rule 2 of the Rules of Court that constitute a cause of action are present in this case. BF cannot ask MIAA to persuade Tokyu to remit to BF its 20% share in the down payment; cannot enjoin Tokyu from hiring subcontractors to do BFs part of the project; and cannot expel Tokyu from the Consortium. MIAA is a stranger to the Consortium agreement among Tokyu, Mitsubishi, Oreta, and BF. Under both the Consortium agreement and the Agreement between MIAA and the Consortium, MIAA has no obligation to

have the terms of the Consortium agreement enforced, MIAA not being privy to it. Lastly, BF even admits that the Consortium agreement does not embody any specific agreement between the parties as the agreement amongst them was couched in general terms. In fact, the only clear agreement among the members was that Tokyu is the appointed lead partner. As to the issue of estoppel, we agree with the CA that BF is now estopped from re-impleading MIAA. While the Rules allow amendments to pleadings by leave of court, in our view, in this case, it would be an affront to the judicial process to first include a party as defendant, then voluntarily drop the party off from the complaint, only to ask that it be re-impleaded. When BF dropped MIAA as defendant in its first amended complaint, it had performed an affirmative act upon which MIAA based its subsequent actions, e.g. payments to Tokyu, on the faith that there was no cause of action against it, and so on. BF cannot now deny that it led MIAA to believe BF had no cause of action against it only to make a complete turn-about and renege on the effects of dropping MIAA as a party-defendant months after, to the prejudice of MIAA. MIAA had all reasons to rely on the CAs decision that it was no longer a party to the suit. Under the doctrine of estoppel, an admission or representation is conclusive on the person making it and cannot be denied or disproved as against the person relying on it.13 A person, who by deed or conduct has induced another to act in a particular manner, is barred from adopting an inconsistent position, attitude, or course of conduct that thereby causes loss or injury to another.14 Finally, we tackle the issue of res judicata. Did the decision in CA-G.R. SP No. 43133 constitute a bar to CA-G.R. SP No. 67765? For res judicata to exist, the following elements must be present: (1) the judgment must be final; (2) the court that rendered judgment must have jurisdiction over the parties and the subject matter; (3) it must be a judgment on the merits; and (4) there must be between the first and second actions identity of parties, subject matter, and cause of action. There is no dispute on the presence of the first three elements enumerated above. However, the same cannot be said regarding the last element. As BF has correctly pointed out, CA-G.R. SP No. 43133 was filed by Tokyu against the trial judge and BF, while CA-G.R. SP No. 67765 was filed by MIAA in which Tokyu is not even a party. It is also apparent that the subject matter in CA-G.R. SP No. 43133 was the propriety of the TRO granted by the RTC, and the subject matter in CA-G.R. SP No. 67765 is the propriety of including MIAA as a party-defendant in Civil Case No. 66060. While it may be true that both cases touched on MIAA as a partydefendant, we are unable to say that the subject matters of CA-G.R. SP No. 43133 and CA-G.R. SP No. 67765 are identical. As to the cause of action, CA-G.R. SP No. 43133 is the off-shoot of the alleged abuse of discretion of the trial judge in issuing the TRO, while CA-G.R. SP No. 67765 is the result of the alleged grave abuse of discretion of the trial court judge in allowing MIAA to be re-impleaded as a party-defendant. Lacking the identity of parties, subject matter, and cause of action, the doctrine of res judicata is inapplicable. This, however, should not detract from the fact that the CA was correct in granting the petition.

WHEREFORE, we DENY this petition and AFFIRM the CAs Decision dated January 9, 2004 and Resolution dated July 13, 2004 in CA-G.R. SP No. 67765. SO ORDERED.

BF CORPORATION, PETITIONER, VS. MANILA INTERNATIONAL AIRPORT AUTHORITY, RESPONDENT. 579 Phil. 162, June 30, 2008 DECISION VELASCO JR., J.: In this petition for review under Rule 45, petitioner BF Corporation (BF) assails the Decision of the Court of Appeals (CA) that disallowed BF to re-implead the Manila International Airport Authority (MIAA) as a party-defendant in Civil Case No. 66060 entitled BF Corporation v. Tokyu Construction Co., Ltd., Mitsubishi Corporation, A.M. Oreta & Co., Inc., and Manila International Airport Authority. Mitsubishi Corporation (Mitsubishi), Tokyu Construction Co., Ltd. (Tokyu), A.M. Oreta & Co., Inc. (Oreta), and BF formed themselves into the MTOB Consortium (Consortium) to participate in the bidding for the construction of the Ninoy Aquino International Airport Terminal II (NAIA II) Project. MIAA awarded the contract to the Consortium, recognizing that the Consortium was a distinct and separate entity from the four member corporations. Unfortunately, the four members had serious business differences, including the division of the contract price, forcing BF to file on January 10, 1997, with the Regional Trial Court (RTC) in Pasig City, an action for Specific Performance, Rescission, and Damages with application for a Temporary Restraining Order (TRO), docketed as Civil Case No. 66060. BF alleged in its complaint that Tokyu and Mitsubishi invited BF to form a consortium for the NAIA II Project and after the members of the Consortium reached an agreement couched in general terms, for the purpose of prequalification bidding, Tokyu allegedly refused to execute a final consortium agreement; unreasonably demanded that BF reduce its asking prices for its assigned work; engaged the services of other subcontractors to do BF's portion of the project; and refused to remit to BF its 20% share of the down payment, thereby easing out BF in the project in breach of the Consortium agreement. BF prayed that Tokyu be enjoined from further (1) receiving any payment from MIAA for illegally executing BF's portion of the work in the project; (2) engaging the services of other subcontractors to do BF's portion of the project; (3) acting as lead partner of the Consortium; and (4) compelling BF to reduce its prices. BF also prayed that MIAA be

enjoined from directly paying Tokyu the collectible compensation vis--vis Tokyu's illegal execution of BF's portion in the project.[1] The RTC served a TRO on Tokyu, the lead partner of the Consortium. During the hearing on the preliminary injunction, MIAA stressed its position that it should not be dragged into the dispute since it was a consortium internal matter. Thereafter, in an amended complaint, BF dropped MIAA as a party-defendant. When the RTC issued the Order dated January 21, 1997 extending the TRO, Tokyu filed with the CA a Petition for Certiorari and Prohibition with prayer for a writ of preliminary injunction docketed as CA-G.R. SP No. 43133. Tokyu contended that the order violated (1) Presidential Decree No. 1818 prohibiting any court in the Philippines from issuing any restraining order, preliminary injunction, or preliminary mandatory injunction on any case, dispute, or controversy involving an infrastructure project; and (2) Supreme Court Circular No. 68-94 disallowing issuance of TROs in cases involving government infrastructure projects to obviate complaints against indiscriminate issuance of TROs. On May 15, 1997, the CA dismissed the petition and ordered the trial court to continue hearing the main case. With respect to MIAA's right to intervene, the CA stressed that MIAA was no longer a party-defendant since it had been dropped from the complaint by BF and, therefore, no relief may be had from MIAA. The CA explained that MIAA had nothing to do with whatever BF alleges were violations of the Consortium agreement by Tokyu because these were intraconsortium matters.[2] The CA also said it was convinced that "MIAA had no actual, direct and immediate interest" in CA-G.R. SP No. 43133. The CA denied the motion for reconsideration and the RTC proceeded with the case subsequently issuing the Order dated July 8, 1997, which ordered Tokyu to: (1) retrieve its deposit in Japan and make it available in the Philippines for the prompt execution of the project; (2) remit to BF its 20% share in the down payment and its share in the subsequent payments made by MIAA; and (3) allow BF to execute its portion of the work in the project by terminating the services of the subcontractors.[3] Tokyu filed before the CA a Petition for Certiorari with urgent prayer for a TRO and preliminary injunction docketed as CA-G.R. SP No. 44729. On October 20, 1997, the Special Seventh Division of the CA granted Tokyu's petition and annulled the RTC's Order dated July 8, 1997. On November 26, 1999, when the project was nearing completion, BF filed a second amended complaint. In it, BF pleaded causes of action against Tokyu, Mitsubushi, and Oreta which have all submitted themselves to the jurisdiction of the court, and also MIAA who had possession of money to be paid to Tokyu. BF claimed it was entitled to a proportionate share of the money

based on the Consortium agreement. Thus, BF asked that MIAA be re-impleaded as a partydefendant so it could obtain complete relief.[4] In an Order dated May 24, 2001, the RTC directed that MIAA be re-impleaded as a partydefendant in Civil Case No. 66060. It said that BF's earlier move to drop MIAA as a partydefendant should not preclude it from re-impleading MIAA which still has the obligation to pay the remainder of the contract price. The dispositive portion of the order reads:

WHEREFORE, the order of this Court dated February 23, 2001 is hereby reconsidered insofar as it ordered the dismissal of this case as against MIAA which is hereby restored and reimpleaded as a party defendant. SO ORDERED. The motion for reconsideration was denied in an Order dated September 13, 2001.[5] MIAA appealed to the CA alleging grave abuse of discretion on the part of the RTC when it ordered MIAA to be re-impleaded as a party-defendant. The petition was docketed as CA-G.R. SP No. 67765. In a Decision dated January 9, 2004,[6] the CA granted MIAA's petition and annulled and set aside the May 24, 2001 and September 13, 2001 Orders in Civil Case No. 66060. The CA said that the RTC committed grave abuse of discretion amounting to lack or excess of jurisdiction when it issued the orders. According to the CA, MIAA's refusal to be a part of the internal squabble among members of the Consortium was not an "act or omission" that gave BF a cause of action. MIAA had not in any way violated any right of BF. The CA commented that an interference by MIAA in the Consortium quarrel could even expose MIAA to a suit by the other members of the Consortium. The CA stressed that MIAA had in fact earlier recognized the Consortium as a distinct and separate personality from its members. As far as MIAA was concerned, the CA concluded that BF was a stranger to the contract between MIAA and the Consortium, and if BF's interest was its right to a portion of the contract price, its proper recourse was to first secure an assignment of its proportionate rights from the Consortium. The CA also pointed out that BF was estopped from treating MIAA as a necessary party, because when it dropped MIAA as a party in its amended complaint without stating why it did, BF implicitly admitted that MIAA was not a necessary party. The CA also ruled that res judicata had set in when the CA denied a reconsideration of the Decision in CA-G.R. SP No. 43133 and said decision was not appealed. Recall that in the said decision, the CA Fourteenth Division stressed that MIAA was no longer a party-defendant since

it had been dropped by BF and, therefore, no relief may be had from MIAA; that the case was not a matter in rem but can only give rise to a judgment in personam; that the CA was convinced MIAA had no actual, direct, and immediate interest in the dispute since the dispute was intra-corporate; and that MIAA had nothing to do with BF's complaint against Tokyu.[7] The CA added that since the issue with respect to MIAA was not appealed, the said decision had become final and another case on the same issue had been barred by res judicata. The CA also noted that when MIAA was allowed to intervene in the aforementioned case, the RTC had acquired jurisdiction over MIAA; thus, there was identity of parties between CA-G.R. SP No. 43133 and CA-G.R. SP No. 67765. According to the CA, although the subject matter of CAG.R. SP No. 43133 was the propriety of the grant of the TRO enjoining Tokyu from receiving any amount from MIAA and the subject matter in CA-G.R. SP No. 67765 was the propriety in including MIAA as a party-defendant in Civil Case No. 66060, both cases involved the issue of whether or not MIAA was a proper party-defendant in Civil Case No. 66060. Thus, the CA concluded that the elements of res judicata were present. The motion for reconsideration was denied by the CA; hence, BF filed this petition raising the following as issues: I. THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT BF HAS NO CAUSE OF ACTION AGAINST MIAA AS, IN FACT, BF'S SECOND AMENDED COMPLAINT STATES A CAUSE OF ACTION AGAINST MIAA. II. THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT BF IS ESTOPPED FROM IMPLEADING MIAA IN THE CASE. III. THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT BF IS BARRED UNDER THE DOCTRINE OF RES JUDICATA FROM IMPLEADING MIAA IN THE MAIN CASE. The appellate court had correctly granted the petition of MIAA. In this petition before us, BF would have us believe that it dropped MIAA as a party-defendant in its first amended complaint because its cause of action against MIAA was not yet ripe.[8] It said that it re-impleaded MIAA in the second amended complaint because of the impending release of the final payment and the retention money to Tokyu. And if the project were

completed and full payment were given to the Consortium, BF could no longer get its supposed share in the payments. The ultimate facts, as alleged by BF, that are the bases of its cause of action against MIAA, are found on items 2.18 to 2.21 of BF's second amended complaint, as follows : 2.18 To protect its rights and interests, BF, through counsel, wrote MIAA calling its attention to the contract violations committed by TOKYU in bad faith, and requesting its intervention to see an early end to the dispute. More specifically, BF requested MIAA to: 1. Persuade TOKYU to remit to us our rightful 20% share in the downpayment of the Project; 2. Enjoin TOKYU's unauthorized and illegally hired subcontractors from executing BF's portion of the NAIA II project; 3. Directly remit to us our 20% share in the subsequent payments to be made under the construction contract; and 4. Should TOKYU stubbornly refuse to heed any of the above, expel TOKYU from the consortium and let BF, MITSUBISHI and ORETA take over the entire project.

2.19 Later, BF, through counsel, wrote TOKYU revoking [its] authority as lead partner to represent BF in dealing with MIAA in connection with the execution of the Project x x x. 2.20 Despite the revocation made by BF and its request for MIAA to resolve the dispute, TOKYU continued to act as the lead partner and has in fact taken its role to the extreme by hiring other subcontractors to do BF's portion of the work. On the other hand, MIAA has opted to take a nonchalant hands-off policy, choosing to ignore TOKYU's bullying tactics and iniquitous actions by even awarding the latter with prompt payments of the contract price. Worse, in coddling and protecting TOKYU despite its illegal acts, MIAA has allowed this foreign country to unduly profit from this centerpiece project and stash away the Philippine money it has collected in commercial banks in Japan. 2.21 Further, as a result of MIAA's inaction, the Project is now complete with TOKYU ready and raring to collect the remainder of the contract price from MIAA, including the 10% retention money being held by MIAA and now ready to be released after the Project had been completed.[9] (Emphasis supplied.)

On the bases of these allegations, we can hardly rule that BF has a cause of action against MIAA. Section 2, Rule 2 of the Rules of Court defines "cause of action" as an act or omission by which one party violates a right of another. It has three elements: (1) a right existing in favor of the plaintiff, (2) a duty on the part of the defendant to respect the right of the plaintiff, and (3) a breach of the defendant's duty.[10] A close reading of the aforecited portions of the second amended complaint discloses that the rights of BF that have allegedly been violated are those contained in the Consortium agreement. A scrutiny of the agreement, however, would readily show that there is nothing in it that would constitute acts or omissions of MIAA that violate BF's rights. Even if BF wrote MIAA and called the latter's attention to the contract violations of Tokyu and asked MIAA to persuade Tokyu to remit to BF its 20% share in the down payment; enjoin Tokyu from illegally hiring subcontractors to do BF's part of the project; and expel Tokyu from the Consortium, these facts are insufficient to constitute the bases of BF's cause of action against MIAA. The test of sufficiency of the facts alleged in the complaint as constituting a cause of action is whether or not admitting the facts alleged; the court could render a valid verdict in accordance with the prayer of the complaint.[11] Even if we assume that the facts alleged were true, we still cannot grant any of BF's prayers against MIAA as we would have no basis to do so in fact and in law. The best evidence to show whether or not BF has a cause of action against MIAA is the contract/agreement itself. The Agreement[12] awarding the NAIA II Project to the Consortium was between MIAA and the Consortium, as contractor, represented by the Consortium's project manager. BF was not a party to the Agreement. From the very start, MIAA had categorically said it recognized the Consortium as a distinct and separate entity. The Agreement laid down all the rights and obligations of MIAA to the Consortium and viceversa, and as aptly pointed out by MIAA, payment to BF was not among them. The Agreement does not say that MIAA shall withhold payment in the event that a dispute arises amongst the members of the Consortium. Neither does the contract require MIAA to mediate in any intraconsortium dispute that may arise within the Consortium. The primary obligation of MIAA is found in Article III of the Agreement which stipulates that "MIAA agrees to pay the CONTRACTOR the Contract Price x x x in the manner prescribed by the Contract." Note that the CONTRACTOR refers to the Consortium not to the individual members of the Consortium. BF by itself is not a party to the Agreement. If MIAA is prevented from making payments to the Consortium, MIAA will be considered in breach of the Agreement. Verily, a preliminary prohibitory injunction, enjoining MIAA from releasing to Tokyu the remainder of the contract price owing to the Consortium or any amount for that matter, including the 10% retention fee now ready for release after the project had been completed, cannot be validly issued. If BF

wants its share in what was yet due to the Consortium, BF's recourse is against the Consortium. It can present to MIAA an assignment of its alleged rights from the Consortium. Impleading MIAA is not the remedy to enable BF to collect its share in the NAIA II Project of the Consortium. In short, MIAA cannot be ordered to be a collecting agent for BF. To sum up, none of the elements required in Sec. 2, Rule 2 of the Rules of Court that constitute a cause of action are present in this case. BF cannot ask MIAA to persuade Tokyu to remit to BF its 20% share in the down payment; cannot enjoin Tokyu from hiring subcontractors to do BF's part of the project; and cannot expel Tokyu from the Consortium. MIAA is a stranger to the Consortium agreement among Tokyu, Mitsubishi, Oreta, and BF. Under both the Consortium agreement and the Agreement between MIAA and the Consortium, MIAA has no obligation to have the terms of the Consortium agreement enforced, MIAA not being privy to it. Lastly, BF even admits that the Consortium agreement does not embody any specific agreement between the parties as the agreement amongst them was couched in general terms. In fact, the only clear agreement among the members was that Tokyu is the appointed lead partner. As to the issue of estoppel, we agree with the CA that BF is now estopped from re-impleading MIAA. While the Rules allow amendments to pleadings by leave of court, in our view, in this case, it would be an affront to the judicial process to first include a party as defendant, then voluntarily drop the party off from the complaint, only to ask that it be re-impleaded. When BF dropped MIAA as defendant in its first amended complaint, it had performed an affirmative act upon which MIAA based its subsequent actions, e.g. payments to Tokyu, on the faith that there was no cause of action against it, and so on. BF cannot now deny that it led MIAA to believe BF had no cause of action against it only to make a complete turn-about and renege on the effects of dropping MIAA as a party-defendant months after, to the prejudice of MIAA. MIAA had all reasons to rely on the CA's decision that it was no longer a party to the suit. Under the doctrine of estoppel, an admission or representation is conclusive on the person making it and cannot be denied or disproved as against the person relying on it.[13] A person, who by deed or conduct has induced another to act in a particular manner, is barred from adopting an inconsistent position, attitude, or course of conduct that thereby causes loss or injury to another.[14] Finally, we tackle the issue of res judicata. Did the decision in CA-G.R. SP No. 43133 constitute a bar to CA-G.R. SP No. 67765? For res judicata to exist, the following elements must be present: (1) the judgment must be final; (2) the court that rendered judgment must have jurisdiction over the parties and the subject matter; (3) it must be a judgment on the merits; and (4) there must be between the first and second actions identity of parties, subject matter, and cause of action. There is no dispute on the presence of the first three elements enumerated above. However, the same cannot be said regarding the last element. As BF has correctly pointed out,

CA-G.R. SP No. 43133 was filed by Tokyu against the trial judge and BF, while CA-G.R. SP No. 67765 was filed by MIAA in which Tokyu is not even a party. It is also apparent that the subject matter in CA-G.R. SP No. 43133 was the propriety of the TRO granted by the RTC, and the subject matter in CA-G.R. SP No. 67765 is the propriety of including MIAA as a party-defendant in Civil Case No. 66060. While it may be true that both cases touched on MIAA as a partydefendant, we are unable to say that the subject matters of CA-G.R. SP No. 43133 and CA-G.R. SP No. 67765 are identical. As to the cause of action, CA-G.R. SP No. 43133 is the off-shoot of the alleged abuse of discretion of the trial judge in issuing the TRO, while CA-G.R. SP No. 67765 is the result of the alleged grave abuse of discretion of the trial court judge in allowing MIAA to be re-impleaded as a party-defendant. Lacking the identity of parties, subject matter, and cause of action, the doctrine of res judicata is inapplicable. This, however, should not detract from the fact that the CA was correct in granting the petition. WHEREFORE, we DENY this petition and AFFIRM the CA's Decision dated January 9, 2004 and Resolution dated July 13, 2004 in CA-G.R. SP No. 67765. SO ORDERED.

EL ORO ENGRAVER CORPORATION, Petitioner, vs. COURT OF APPEALS and EVERETT CONSTRUCTION SUPPLY, INC., Respondents. DECISION CARPIO, J.: The Case Before the Court is a petition for review[1] assailing the 29 February 1996 Decision[2] and 13 June 1996 Resolution[3] of the Court of Appeals in CA-G.R. CV No. 44782. The Antecedent Facts Everett Construction Supply, Inc. (respondent) is engaged in the sale of construction supplies. El Oro Engraver Corporation (petitioner) is one of its customers. Whenever respondent sold merchandise to its customers, it would prepare a Sales Invoice for the transaction in quadruplicate copies. An employee of respondent would bring the original and duplicate copies of the Sales Invoice to the customer for signature upon receipt of the merchandise. Respondent would either append the original copy of the Sales Invoice to the Statement of Account or return it to the customer upon payment of the merchandise.

During the period from August to December 1980 and from January to March 1981, respondent delivered merchandise to petitioner in the total amount of P681,316.70. The transactions were covered by separate Sales Invoices. Petitioner failed to pay its obligations. On 20 February 1981, respondent sent petitioner Statements of Account which indicated the price for each purchase and the totality of petitioners liability as of that date. Respondent appended to the Statements of Account the original copies of the Sales Invoices for the period from 4 August 1980 to 15 January 1981. Respondent retained the original Sales Invoices which were not yet due when it sent the Statements of Account on 20 February 1981. Petitioner neither responded to the Statements of Account nor made any payment to respondent. On 12 March 1985, respondent sent petitioner a demand letter for the payment of P681,316.70. Petitioner ignored the demand letter. On 25 March 1985, respondent filed an action for Collection of Sum of Money with Damages against petitioner. The Ruling of the Trial Court In a Decision[4] dated 30 September 1993, the Regional Trial Court of Kalookan City, Branch 127 (trial court) ruled, as follows: WHEREFORE, judgment is rendered in favor of the plaintiff and against the defendant: Ordering the defendant to pay a total amount of P37,055.20 plus 12% [interest per annum] as of the filing of the complaint; Ordering the payment of P3,016.00 as litigation expenses; Ordering defendant to pay attorneys fees in the amount of P10,000.00; and Dismissing the counterclaim. SO ORDERED.[5] The trial court ruled that respondent has the burden of showing that a valid debt exists. The trial court did not accept respondents argument that the original of some Sales Invoices were already with petitioner. The trial court ruled that if the Sales Invoices were already with petitioner, it gives rise to the presumption that the debt had been paid. The trial court concluded that petitioner did not receive the goods and such goods might have been delivered to somebody else. Respondent appealed from the trial courts Decision. The Ruling of the Court of Appeals

In its 29 February 1996 Decision, the Court of Appeals affirmed with modification the trial courts Decision. The Court of Appeals ruled that while the copies of the Sales Invoice s which were not considered by the trial court did not bear the signatures of petitioners representatives, the merchandise were sold and delivered to petitioner. The Court of Appeals noted that petitioner never objected to nor denied the Statements of Account it received from respondent for more than four years. Petitioner also failed to respond to respondents demand letter. The Court of Appeals ruled that petitioners silence for more than four years is an admission of its liability to respondent under the Sales Invoices and the Statements of Account. The dispositive portion of the Court of Appeals Decision reads: IN THE LIGHT OF ALL THE FOREGOING, the Decision appealed from is hereby AFFIRMED with the modification that the Appellee is hereby ordered to pay to the Appellant the principal amount of P681,316.70 with interests thereon at the rate of 12% per annum, from February 20, 1981 until the said amount is paid in full, and the amount of P20,000.00 as and by way of attorneys fees. Without pronouncement as to costs. SO ORDERED.[6] Petitioner filed a motion for reconsideration. In its 13 June 1996 Resolution, the Court of Appeals denied the motion for lack of merit. Hence, the petition before this Court. The Issue The sole issue in this case is whether the Court of Appeals committed a reversible error in modifying the trial courts Decision and in increasing petitioners liability to respondent. The Ruling of this Court The petition has no merit. As a general rule, factual findings of the Court of Appeals are binding on this Court. This rule is subject to exceptions, such as when the factual findings of the Court of Appeals and the trial court are contradictory.[7] In this case, the trial court only considered the original copies of the Sales Invoices presented by respondent. The trial court did not consider the Sales Invoices which did not have the signature of petitioners representative. The trial court concluded that the merchandise must have been delivered to someone else instead of to petitioner.

We have reviewed the records of the case and we are more convinced with the factual findings of the Court of Appeals. Rosita P. Lee (Lee), respondents Treasurer, explained that it is the company practice to prepare four copies of Sales Invoices. Respon dents delivery personnel would bring two copies of the Sales Invoices at the time of the delivery the original and a duplicate copy. Both copies were supposed to be signed by petitioners representative. Respondents delivery personnel would leave the duplicate copy with petitioner and retain the original copy of the Sales Invoice. Whenever respondent made a collection, it would prepare a Statement of Account and it would send the Statement of Account, together with the original copies of the Sales Invoices, to petitioner.[8] Considering this practice, it is impossible for respondent to present the original or duplicate copies of the Sales Invoices which bore the signatures of petitioners representative because they are both in petitioners possession. The Sales Invoices accepted by the trial court, which bore the signatures of petitioners representatives, were retained by respondent and not delivered to petitioner because they were not yet due at the time the Statement of Account was prepared. The Court also notes that the Sales Invoices state: PAYMENT NOT VALID WITHOUT OUR OFFICIAL RECEIPT.[9] The Sales Invoices are not evidence of payment. They are only evidence of the receipt of the goods. The best evidence to prove payment of the goods is the official receipt. Petitioner failed to present any official receipt to prove that it had already paid the goods to respondent. We agree with the Court of Appeals observation that petitioner did not object to the entries in the Statements of Account. Petitioner did not do anything despite the clear reminder in the Statements of Account which states: IMPORTANT: If this statement does not agree with your record, please notify us at once.[10] Petitioner remained silent for four years from the time it received the Statements of Account until the filing of the case against it. Petitioner did not even bother to respond to the demand letter sent by respondent. Petitioners silence is uncharacteristic of persons who have just been asked to pay an obligation to which they are not liable.[11] In one case,[12] the petitioner received a statement of account from the respondent without protest, and the petitioner did not controvert the respondents demand letter. The Court applied estoppel in pais where one, by his acts, representations or admissions, or by his own silence when he ought to speak out, intentionally or through culpable negligence, induces another to believe certain facts to exist and such other rightfully relies and acts on such belief, so that he will be prejudiced if the former is permitted to deny the existence of such facts.[13] We agree with the Court of Appeals that petitioners silence for four years is tantamount to admission of the entries in the Statements of Account sent by respondent.

The Court of Appeals did not even have to rely on estoppel. Petitioner received the Statements of Account as well as the Sales Invoices as evidenced by the handwritten statement of petitioners representative, Alicia Alcaraz,[14] who wrote the words recd original on t he Statements of Account.[15] Lee testified: Atty. Meris: Do you have a proof that the originals of the said invoices are already in the hands of the defendant? Witness: Yes, we have given them the statements of accounts which together with the originals as shown by the signature of their employee Alicia Alcaras. xxxx Atty. Meris: (to witness) How do you know that this is the signature of Miss Alcaras? Witness: Because I am very familiar with her signature as I have been receiving communications with her frequently during the time that we are having business transaction with the defendant.[16] Petitioner failed to rebut that it received the Statements of Accounts and the Sales Invoices attached to them. In sum, respondent proved during the trial that it delivered the goods, and that it had not received payment for the goods so delivered. In its Answer With Counterclaim,[17] petitioner alleged that all its purchases from respondent had already been fully paid and satisfied. Petitioner alleged: and by way of SPECIAL and AFFIRMATIVE DEFENSES, defendant avers: That there is no cause of action; That the claim is unenforceable under the statute of fraud; That the claim or demand had been paid, waived and/or otherwise extinguished; That in the alternative, granting arguendo that the defendant received some of the said construction materials, the same are defective and not suitable for the purpose of which they

have been purchased and/or some of these materials were not received by the defendant corporation. Consequently, it should not be obliged to pay for the same[.] x x x x[18] During the trial, petitioner did not show which of the materials covered by the Sales Invoices had been paid, waived or extinguished, which materials were defective, and which materials were not received. Petitioner only insisted that it had no obligation to respondent. Thus, petitioner failed to prove that it did not receive the goods, or that it already paid respondent for the goods delivered. WHEREFORE, we AFFIRM the 29 February 1996 Decision and 13 June 1996 Resolution of the Court of Appeals in CA-G.R. CV No. 44782. Costs against petitioner. SO ORDERED.

ROCKLAND CONSTRUCTION COMPANY, INC., Petitioner, vs. MID-PASIG LAND DEVELOPMENT CORPORATION, Respondent.

DECISION QUISUMBING, J.: This petition for review seeks the reversal of the Decision[1] and Resolution[2] dated February 27, 2004 and July 21, 2004, respectively, of the Court of Appeals in CA-G.R. CV No. 76370. The appellate court had reversed and set aside the Decision[3] dated September 2, 2002 of the Regional Trial Court (RTC), Branch 67 of Pasig City, in Civil Case No. 68350; dismissed petitioners complaint; and held that there was no perfected contract of lease between the parties. The antecedents facts, culled from the records, are as follows: Rockland Construction Company, Inc. (Rockland), in a letter[4] dated March 1, 2000, offered to lease from Mid-Pasig Land Development Corporation (Mid-Pasig) the latters 3.1-hectare

property in Pasig City. This property is covered by Transfer Certificate of Title Nos. 469702 and 337158 under the control of the Presidential Commission on Good Government (PCGG). Upon instruction of Mid-Pasig to address the offer to the PCGG, Rockland wrote the PCGG on April 15, 2000. The letter,[5] addressed to PCGG Chairman Magdangal Elma, included Rocklands proposed terms and conditions for the lease. This letter was also received by Mid-Pasig on April 18, 2000, but Mid-Pasig made no response. Again, in another letter[6] dated June 8, 2000 addressed to the Chairman of Mid-Pasig, Mr. Ronaldo Salonga, Rockland sent a Metropolitan Bank and Trust Company Check No. 2930050168[7] for P1 million as a sign of its good faith and readiness to enter into the lease agreement under the certain terms and conditions stipulated in the letter. Mid-Pasig received this letter on July 28, 2000. In a subsequent follow-up letter[8] dated February 2, 2001, Rockland then said that it presumed that Mid-Pasig had accepted its offer because the P1 million check it issued had been credited to Mid-Pasigs account on December 5, 2000.[9] Mid-Pasig, however, denied it accepted Rocklands offer and claimed that no check was attached to the said letter. It also vehemently denied receiving the P1 million check, much less depositing it in its account. In its letter[10] dated February 6, 2001, Mid-Pasig replied to Rockland that it was only upon receipt of the latters February 2 letter that the former came to know where the check came from and what it was for. Nevertheless, it categorically informed Rockland that it could not entertain the latters lease application. Mid-Pasig reiterated its refusal of Rocklands offer in a letter[11] dated February 13, 2001. Rockland then filed an action for specific performance docketed as Civil Case No. 68350 in the RTC, Branch 67 of Pasig City. Rockland sought to compel Mid-Pasig to execute in Rocklands favor, a contract of lease over a 3.1-hectare portion[12] of Mid-Pasigs property in Pasig City. On September 2, 2002, the trial court rendered a decision, the dispositive portion of which reads in part: WHEREFORE, judgment is rendered, as follows: Declaring that the plaintiff and the defendant have duly agreed upon a valid and enforceable lease agreement of subject portions of [defendants] pro perties designated in Exh. A as areas A, B and C, comprising an area of 5,000 square meters, 11,000 square meters and 15,000 square meters, or a total of 31,000 square meters;

Holding that the principal terms and conditions of the aforesaid lease agreement are as stated in plaintiffs June 8, 2000 letter (Exh. D), to wit: xxxx Ordering the defendant to execute a written lease contract in favor of the plaintiff containing the principal terms and conditions mentioned in the next-preceding paragraph, within sixty (60) days from finality of this judgment, and likewise ordering the plaintiff to pay rent to the defendant as specified in said terms and conditions; Ordering the defendant to keep and maintain the plaintiff in the peaceful possession and enjoyment of the leased premises during the term of said contract; Ordering the defendant to pay plaintiff [attorneys] fees in the sum of One Million Pesos (P1,000,000.00), plus P2,000.00 for every appearance made by counsel in court; The temporary restraining order dated April 2, 2001 is hereby made PERMANENT; Dismissing defendants counterclaim. With costs against the defendant. SO ORDERED.[13] On appeal, the Court of Appeals reversed and set aside the trial courts decision on the following grounds: (1) there was no meeting of the minds as to the offer and acceptance between the parties; (2) there was no implied acceptance of the P1 million check as Mid-Pasig was not aware of its source at the time Mid-Pasig discovered the existence of the P1 million in its account; and (3) Rocklands subsequent acts and/or omissions contradicted its claim that there was already a contract of lease, as it neither took possession of the property, nor did it pay for the corresponding monthly rentals. Accordingly, the Court of Appeals dismissed Rocklands complaint, as well as Mid-Pasigs counterclaim. Rockland sought reconsideration, but it was denied.

Petitioner Rockland now comes before us raising a complex issue: . . . WHETHER OR NOT RESPONDENTS ACT OF DEPOSITING INTO ITS CORPORATE BANK ACCOUNT PETITIONERS P1 MILLION CHECK AND COLLECTING THE PROCEEDS THEREOF: (A) PRODUCES THE LEGAL EFFECT OF AN ACCEPTANCE OF PETITIONERS OFFER AND CONSIDERED AS CONSENT TO THE PAYMENT FOR WHICH IT WAS INTENDED; AND/OR [(B)] CONSTITUTES IN

LEGAL CONTEMPLATION ESTOPPEL IN PAIS, SUFFICIENT TO APPRECIATE RESPONDENTS CONSENT TO THE LEASE.[14] Simply stated, the issue may be rephrased into two questions: Was there a perfected contract of lease? Had estoppel in pais set in? Rockland contends that the contract of lease had been perfected and that Mid-Pasig is in estoppel in pais because it impliedly accepted its offer when the P1 million check was credited to Mid-Pasigs account. Mid-Pasig counters that it never accepted Rocklands offer. It avers it immediately rejected Rocklands offer upon learning of the mysterious deposit of the P1 million check in its account. Since the re-stated issues are intertwined, we shall discuss them jointly. A contract has three distinct stages: preparation, perfection, and consummation. Preparation or negotiation begins when the prospective contracting parties manifest their interest in the contract and ends at the moment of their agreement. Perfection or birth of the contract occurs when they agree upon the essential elements thereof. Consummation, the last stage, occurs when the parties fulfill or perform the terms agreed upon in the contract, culminating in the extinguishment thereof.[15] Negotiation is formally initiated by an offer. Accordingly, an offer that is not accepted, either expressly or impliedly,[16] precludes the existence of consent, which is one of the essential elements[17] of a contract. Consent, under Article 1319 of the Civil Code, is manifested by the meeting of the offer and acceptance upon the thing which are to constitute a contract. To produce a contract, the offer must be certain and the acceptance absolute.[18] A close review of the events in this case, in the light of the pa rties evidence, shows that there was no perfected contract of lease between the parties. Mid-Pasig was not aware that Rockland deposited the P1 million check in its account. It only learned of Rocklands check when it received Rocklands February 2, 2001 letter. Mid-Pasig, upon investigation, also learned that the check was deposited at the Philippine National Bank (PNB) San Juan Branch, instead of PNB Ortigas Branch where Mid-Pasig maintains its account. Immediately, Mid-Pasig wrote Rockland on February 6, 2001 rejecting the offer, and proposed that Rockland apply the P1 million to its other existing lease instead. These circumstances clearly show that there was no concurrence of Rocklands offer and Mid-Pasigs acceptance. Mid-Pasig is also not in estoppel in pais. The doctrine of estoppel is based on the grounds of public policy, fair dealing, good faith and justice, and its purpose is to forbid one to speak against his own act, representations, or commitments to the injury of one to whom they were

directed and who reasonably relied thereon.[19] Since estoppel is based on equity and justice, it is essential that before a person can be barred from asserting a fact contrary to his act or conduct, it must be shown that such act or conduct has been intended and would unjustly cause harm to those who are misled if the principle were not applied against him.[20] From the start, Mid-Pasig never falsely represented its intention that could lead Rockland to believe that Mid-Pasig had accepted Rocklands offer. Mid-Pasig consistently rejected Rocklands offer. Further, Rockland never secured the approval of Mid -Pasigs Board of Directors and the PCGG to lease the subject property to Rockland. As noted by the Court of Appeals, if indeed Rockland believed that Mid-Pasig impliedly accepted the offer, then it should have taken possession of the property and paid the monthly rentals. But it did not. For estoppel to apply, the action giving rise thereto must be unequivocal and intentional because, if misapplied, estoppel may become a tool of injustice.[21] WHEREFORE, the instant petition is DENIED. The Decision and Resolution dated February 27, 2004 and July 21, 2004, respectively, of the Court of Appeals in CA-G.R. CV No. 76370 are AFFIRMED. Costs against the petitioner. SO ORDERED.

G.R. Nos. 139594-95

February 26, 2008

BORROMEO BROS. ESTATE, INC., petitioner, vs. EDGAR JOHN A. GARCIA, respondent. DECISION PUNO, C.J.: Before us is a petition for review on certiorari which seeks the reversal of the Consolidated Decision1 and Resolution2 of the Court of Appeals in CA-G.R. Sp. Nos. 47049 and 48512 which affirmed the Orders3 of the Regional Trial Court (RTC) to annotate an easement of road right of way on the title of petitioner Borromeo Bros. Estate, Inc. in favor of respondent Edgar John A. Garcia. On August 17, 1938, Patricia Ruedas Vda. De Andrada (Patricia) executed, for valuable consideration, a document granting a road right of way to spouses Gil Garcia and Teresa Escao de Garcia (Garcia couple) over Lot No. 6-H-2 described in Transfer Certificate of Title (TCT) No. 20923:

I, PATRICIA RUEDAS VDA. DE ANDRADA (Filipina, of legal age, widow and with residence and postal address at No. 28 Fructuoso Ramos St., City of Cebu, Philippines), for and in consideration of the sum of TEN PESOS (10.00) to be paid in hand by the spouses GIL GARCIA and TERESA ESCAO DE GARCIA (Filipinos, both of legal ages (sic) and residing at Fructuoso Ramos St. (interior), City of Cebu, Philippines), do hereby grant unto said spouses Gil Garcia and Teresa Escao de Garcia a right of way over lot number SIX-HTWO (6-H-2), described in the Transfer Certificate of Title numbered TWENTY THOUSAND NINE HUNDRED TWENTY FIVE (20925) in the office of the Register of Deeds for the province of Cebu.4 On September 28, 1938, Patricia sold the property to petitioner. The Deed of Sale contained a provision that "the purchase of Lot No. 6-H-2 was subject to the right of way granted by me (Patricia Ruedas Vda. de Andrada) to the spouses Gil Garcia and Teresa Escao de Garcia." On April 17, 1952, the Garcia couple went to the Court of First Instance (CFI) of Cebu and moved for the annotation of the August 17, 1938 document executed by Patricia on TCT No. RT3972. On June 28, 1952, the CFI of Cebu, through Judge Ignacio Debuque, ordered: No opposition having been filed to the motion of the spouses Gil Garcia and Teresa Escao, through Atty. Vicente Faelnar, dated April 17, 1952, it appearing that the Borromeo Bros. Estate, Inc. [herein petitioner], through Atty. Filiberto Leonardo, received a copy of the notice of hearing of said motion on June 24, 1952, the Register of Deeds for the City and Province of Cebu is hereby ordered to annotate on Transfer Certificate of Title No. RT-3972 the contents of the documents ratified on August 18, 1938 in said motion. SO ORDERED. Petitioner retained ownership over Lot No. 6-H-2 whereas the estate of the late Garcia couple (Garcia Estate) was inherited by Vicente E. Garcia and Jose E. Garcia from whom respondent acquired his title in 1996. Sometime after acquiring the Garcia Estate, respondent came across the 1952 documents that granted to the deceased Garcia couple a road right of way through petitioner's Lot No. 6-H-2. Thus, on May 19, 1997, respondent filed, before the RTC of Cebu, a cadastral court, a petition captioned "Engineer Edgar John A. Garcia v. The Register of Deeds of Cebu City, G.I.R.O. Rec. No. 5988, Lot No. 6-H-2." The petition, in which only the Register of Deeds was impleaded, prayed that: WHEREFORE, premises considered, this Honorable Court is most respectfully prayed to issue an Order directing the Register of Deeds for the City of Cebu to inscribe and

annotate in the TCT No. RT-3972 a road right of way indicated in the motion dated April 17, 1997 x x x x after payment of the corresponding registration fees prescribed by law. The cadastral court issued on June 6, 1997 an Order requiring the Register of Deeds "to inform this [c]ourt regarding the status of the aforementioned title, whether it has already been cancelled or not, the encumbrances/annotations therein, and in whose name it is now." 5 In its Comment/Manifestation, the Register of Deeds informed the cadastral court that Lot No. 6-H-2 covered by TCT No. RT-3972 is registered under herein petitioner's name and that it "appears to be clean and devoid of any encumbrance/annotations."6 On July 23, 1997, the cadastral court issued an Order granting the petition of respondent, 7 thus: Since the Borromeo Bros. Estate did not oppose the previous petition for annotation of road right of way contained in the order of Judge Ignacio Debuque, this [c]ourt hereby grants the petition filed by Engr. Edgar John A. Garcia, the registered owner of TCT No. 142344 covering Lot 6-H-1 and directs the Register of Deeds of Cebu City to annotate on TCT No. RT-3972 the contents of the document ratified on August 18, 1938 recited in paragraph 4 of the instant petition after payment of the corresponding registration fees prescribed by law. Furnish the Borromeo Bros. Estate with a copy of this order as well as Atty. Loreto M. Durano, counsel for the petitioner. On July 25, 1997, petitioner received a copy of the Order of July 23, 1997. Petitioner entered its special appearance and filed a "Motion for Reconsideration and Recall" and expressed "caution" that it was not necessarily submitting itself to the jurisdiction of the cadastral court. Petitioner contended that the Order of the Court dated July 23, 1997 violated its fundamental right to substantive and procedural due process, that the petition of respondent was for specific performance of a private agreement cognizable only by an ordinary court and not a cadastral court, and that the petition of respondent was a procedural shortcut to enforce a stale order citing Rule 39, Section 6 of the Rules of Court, the statute of limitations and prescription.8 On December 15, 1997, after both parties had submitted their respective arguments on the issues raised, the cadastral court denied petitioner's motion for reconsideration. The court held that firstly, there was no violation of substantial or procedural due process as the court furnished petitioner its Order of July 23, 1997, it heard petitioner's motion for reconsideration in open court, and allowed both parties to submit their respective memoranda including documentary exhibits prior to its ruling on the motion. Secondly, the promulgation of Presidential Decree No. 1529 or The Property Registration Decree of 1979 eliminated the distinction between the general jurisdiction of the RTC and its limited jurisdiction when acting as a Land Registration Court. Finally, the court ruled that the allegation of enforcement of a stale order contrary to Rule 39, Section 6 of the Rules of Court, the statute of limitations and prescription, was misplaced as the invoked rule applied only to civil actions and not to special

proceedings such as a land registration case where neither laches nor the statute of limitations applies.9 Aggrieved, petitioner filed on December 29, 1997 a petition for certiorari before the Court of Appeals, docketed as CA-G.R. Sp. No. 47049. It alleged grave abuse of discretion on the part of the cadastral court for the issuance of its Orders dated July 23, 1997 and December 15, 1997. Meanwhile, respondent filed with the cadastral court a motion for execution of its July 23, 1997 Order,10 which was opposed by petitioner11 and denied by the cadastral court on April 6, 1998,12 thus: Should this [c]ourt enforce the questioned order now, any ruling by the Court of Appeals in the petition for certiorari if it is in favor of petitioner BBEI would create a situation wherein the ruling of a higher [c]ourt can no longer be implemented because the lower [c]ourt had chosen to enforce its order without waiting for the outcome of the petition for certiorari. This [c]ourt does not want to preempt the ruling of the Court of Appeals and therefore, this [c]ourt on the basis of the ruling of the Supreme Court aforementioned13 and in the higher interest of justice will not enforce at this time the order dated July 23, 1997. Respondent's April 29, 1998 motion for reconsideration14 was denied. Thus, respondent filed before the Court of Appeals a petition for mandamus and certiorari, docketed as CA-G.R. Sp. No. 48512. On November 18, 1998, the Court of Appeals consolidated the cases 15 and rendered its Consolidated Decision of June 21, 1999 dismissing the petition in CA-G.R. Sp. No. 47049 of herein petitioner and granting the petition in CA-G.R. Sp. No. 48512 of herein respondent.16 The Court of Appeals held that the evidence on record shows the existence of an easement of right of way in favor of respondent. But in dismissing the petition in CA-G.R. Sp. No. 47049, it anchored its decision on the fact that petitioner filed a special action for certiorari in which the appellate court is limited only to correcting errors of jurisdiction or grave abuse of discretion. On the other hand, in granting the petition in CA-G.R. Sp. No. 48512, the Court of Appeals emphasized that since no restraining order or writ of injunction was issued in the other petition, the period on the finality of the Order of the cadastral court was never interrupted; and that the filing of a petition for certiorari does not prevent the decision from attaining finality as it is an independent action which does not interrupt the course of the principal action or the running of the reglementary period involved in the proceedings. On July 9, 1999, petitioner filed its motion for reconsideration but the appellate court denied it in its Resolution of August 9, 1999.17 Hence, this petition for review on certiorari under Rule 45 of the Rules of Court for the annulment and setting aside of the June 21, 1999 Consolidated Decision as well as the August 9, 1999 Resolution of the Court of Appeals.

Petitioner alleged these errors: (1) the appellate court erred in dismissing CA-G.R. Sp. No. 47049 and not reversing the July 23, 1997 Order of the cadastral court despite (a) the nullity of the Order for the denial of petitioner's substantive and procedural right to due process and (b) the commission of abuse of discretion and action without or in excess of jurisdiction of the cadastral court when it revived a stale order, and (2) it likewise erred in granting the petition in CA-G.R. Sp. No. 48512. We find against petitioner. At the outset, the Court emphasizes that the proper subjects of this Rule 45 Petition are the Consolidated Decision and Resolution of the Court of Appeals and not the Orders of the cadastral court. The appellate court was correct in striking down the petition of petitioner in CA-G.R. Sp. No. 47049 on procedural grounds. Indeed, the filing of a special civil action for certiorari before the Court of Appeals limits the determination of the appellate court to whether there was an error of jurisdiction or grave abuse of discretion on the part of the cadastral court. A special civil action for certiorari is an independent action, raising the question of jurisdiction where the tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction. The Court of Appeals found neither error of jurisdiction nor grave abuse of discretion, and dismissed the petition by stating that "[t]o Us and to say the most, aforementioned arguments are indeed typical only of either an error of procedure or an error of judgment." This Court agrees. Moreover, even assuming that the appellate court may correctly resolve error of procedure or error of judgment in the instant case, there was none committed by the cadastral court. The cadastral court did not deny petitioner of its right to due process of the law. The essence of due process is found in the reasonable opportunity to be heard and submit any evidence in support of one's defense. What the law proscribes is the lack of opportunity to be heard. 18 As long as a party is given the opportunity to defend his interests in due course, he would have no reason to complain, for it is this opportunity to be heard that makes up the essence of due process.19 The records reveal that the cadastral court furnished petitioner its Order of July 23, 1997, which reiterated its previous order of April 17, 1952 through former Judge Ignacio Debuque. More importantly, the cadastral court heard petitioner's motion for reconsideration in open court wherein both parties presented their respective arguments to defend their rights and the court likewise allowed the parties to file their respective memoranda prior to ruling on the motion for reconsideration. To quote in part the court in its December 15, 1997 Order, viz: x x x x On August 8, 1997, the date set by Atty. Mercado for the hearing of his motion, the lawyers of both parties appeared including Atty. Amadeo D. Seno, Jr. and the court

allowed the parties to argue on the merits of their respective contentions and later on directed the lawyers to put their additional arguments in writing together with additional documentary evidence and to cite the law, authorities and decisions of the Supreme Court in their respective contentions. BBEI (petitioner herein) filed its memorandum with annexes and documentary exhibits. x x x oppositor BBEI filed its reply. Indeed, deprivation of the right to due process cannot be successfully invoked where a party was given the chance to be heard on his Motion for Reconsideration 20 as what happened in the instant case. Moreover, the July 23, 1997 and December 15, 1997 Orders of the cadastral court were based on established facts on the existence of the grant of an easement of road right of way in favor of respondent, viz: (1) an Agreement, for a valuable consideration, dated August 15, 1936 executed by Patricia that granted a road right of way over Lot No. 6-H-2 and Lot No. 7 to the Garcia couple; (2) an Agreement, for a valuable consideration, dated August 17, 1938 executed by Patricia that granted a road right of way over Lot 6-H-2 to the Garcia couple; (3) Deed of Sale dated September 28, 1938 executed by Patricia in favor of Borromeo Bros. Estate, Inc. that contained a provision: "x x x the purchase of Lot No. 6-H-2 was subject to the right of way granted by me (Patricia Ruedas Vda. de Andrada) to the spouses Gil Garcia and Teresa Escano de Garcia"; (4) the Official Receipt issued by the Register of Deeds of Cebu, Commonwealth of the Philippines No. B 2582295, dated August 18, 1938, upon registration shows the annotation on the title of the Agreement on the road right of way over Lot No. 6-H-2 in favor of the Garcia couple; and (5) the May 2, 1953 Letter of the Borromeo Bros. Estate, Inc., through Flora D. Borromeo, to Mr. Gil Garcia expressly and categorically recognizing or confirming the establishment of a road right of way over Lot No. 6-H-2 and Lot No. 7 in favor of the Garcia couple. Clearly, whether the July 23, 1997 Order of the cadastral court is a revival of the June 28, 1952 Order of another cadastral court is immaterial as the latter was not the sole basis for the granting of the petition for annotation of the road right of way. It merely bolstered the petition of respondent to annotate the road right of way in his favor. In fine, the records of the instant case show that (1) there was substantial evidence to support the annotation of the easement of right of way on the title of petitioner in favor of respondent and (2) the requirements of due process were sufficiently met. No abuse of discretion was committed by the cadastral court. Consequently, the Court of Appeals is justified in dismissing the petition in CA-G.R. Sp. No. 47049. Likewise, there being no more obstacles in the immediate execution of the Order requiring the annotation of the easement of road right of way on the title of the property of petitioner in favor of respondent, the Court affirms the Court of Appeals in granting the petition in CA-G.R. Sp. No. 48512.

IN VIEW WHEREOF, the petition is DENIED. The Consolidated Decision and Resolution of the Court of Appeals dated June 21, 1999 and August 9, 1999, respectively, in CA-G.R. Sp. No. 47049 and CA-G.R. Sp. No. 48512 are AFFIRMED. SO ORDERED.

570 Phil. 141, February 26, 2008 BORROMEO BROS. ESTATE, INC., Petitioner, vs. EDGAR JOHN A. GARCIA, Respondent. DECISION PUNO, CJ.: Before us is a petition for review on certiorari which seeks the reversal of the Consolidated Decision[1] and Resolution[2] of the Court of Appeals in CA-G.R. Sp. Nos. 47049 and 48512 which affirmed the Orders[3] of the Regional Trial Court (RTC) to annotate an easement of road right of way on the title of petitioner Borromeo Bros. Estate, Inc. in favor of respondent Edgar John A. Garcia. On August 17, 1938, Patricia Ruedas Vda. De Andrada (Patricia) executed, for valuable consideration, a document granting a road right of way to spouses Gil Garcia and Teresa Escao de Garcia (Garcia couple) over Lot No. 6-H-2 described in Transfer Certificate of Title (TCT) No. 20923: I, PATRICIA RUEDAS VDA. DE ANDRADA (Filipina, of legal age, widow and with residence and postal address at No. 28 Fructuoso Ramos St., City of Cebu, Philippines), for and in consideration of the sum of TEN PESOS (10.00) to be paid in hand by the spouses GIL GARCIA and TERESA ESCAO DE GARCIA (Filipinos, both of legal ages (sic) and residing at Fructuoso Ramos St. (interior), City of Cebu, Philippines), do hereby grant unto said spouses Gil Garcia and Teresa Escao de Garcia a right of way over lot number SIX-H-TWO (6-H-2), described in the Transfer Certificate of Title numbered TWENTY THOUSAND NINE HUNDRED TWENTY FIVE (20925) in the office of the Register of Deeds for the province of Cebu. [4] On September 28, 1938, Patricia sold the property to petitioner. The Deed of Sale contained a provision that the purchase of Lot No. 6-H-2 was subject to the right of way granted by me (Patricia Ruedas Vda. de Andrada) to the spouses Gil Garcia and Teresa Escao de Garcia. On April 17, 1952, the Garcia couple went to the Court of First Instance (CFI) of Cebu and moved for the annotation of the August 17, 1938 document executed by Patricia on TCT No. RT3972. On June 28, 1952, the CFI of Cebu, through Judge Ignacio Debuque, ordered:

No opposition having been filed to the motion of the spouses Gil Garcia and Teresa Escao, through Atty. Vicente Faelnar, dated April 17, 1952, it appearing that the Borromeo Bros. Estate, Inc. [herein petitioner], through Atty. Filiberto Leonardo, received a copy of the notice of hearing of said motion on June 24, 1952, the Register of Deeds for the City and Province of Cebu is hereby ordered to annotate on Transfer Certificate of Title No. RT-3972 the contents of the documents ratified on August 18, 1938 in said motion. SO ORDERED. Petitioner retained ownership over Lot No. 6-H-2 whereas the estate of the late Garcia couple (Garcia Estate) was inherited by Vicente E. Garcia and Jose E. Garcia from whom respondent acquired his title in 1996. Sometime after acquiring the Garcia Estate, respondent came across the 1952 documents that granted to the deceased Garcia couple a road right of way through petitioners Lot No. 6-H-2. Thus, on May 19, 1997, respondent filed, before the RTC of Cebu, a cadastral court, a petition captioned Engineer Edgar John A. Garcia v. The Register of Deeds of Cebu City G.I. R.O. Rec. No. 5988, Lot No. 6-H-2. The petition, in which only the Register of Deeds was impleaded, prayed that: WHEREFORE, premises considered, this Honorable Court is most respectfully prayed to issue an Order directing the Register of Deeds for the City of Cebu to inscribe and annotate in the TCT No. RT-3972 a road right of way indicated in the motion dated April 17, 1997 x x x x after payment of the corresponding registration fees prescribed by law. The cadastral court issued on June 6, 1997 an Order requiring the Register of Deeds to inform this [c]ourt regarding the status of the aforementioned title, whether it has already been cancelled or not, the encumbrances/annotations therein, and in whose name it is now. [5] In its Comment/Manifestation, the Register of Deeds informed the cadastral court that Lot No. 6-H-2 covered by TCT No. RT-3972 is registered under herein petitioners name and that it appears to be clean and devoid of any encumbrance/annotations. [6] On July 23, 1997, the cadastral court issued an Order granting the petition of respondent,[7] thus: Since the Borromeo Bros. Estate did not oppose the previous petition for annotation of road right of way contained in the order of Judge Ignacio Debuque, this [c]ourt hereby grants the petition filed by Engr. Edgar John A. Garcia, the registered owner of TCT No. 142344 covering Lot 6-H-1 and directs the Register of Deeds of Cebu City to annotate on TCT No. RT-3972 the contents of the document ratified on August 18, 1938 recited in paragraph 4 of the instant petition after payment of the corresponding registration fees prescribed by law. Furnish the Borromeo Bros. Estate with a copy of this order as well as Atty. Loreto M. Durano, counsel for the petitioner. On July 25, 1997, petitioner received a copy of the Order of July 23, 1997. Petitioner entered its special appearance and filed a Motion for Reconsideration and Recall and expressed caution that it was not necessarily submitting itself to the jurisdiction of the cadastral court.

Petitioner contended that the Order of the Court dated July 23, 1997 violated its fundamental right to substantive and procedural due process, that the petition of respondent was for specific performance of a private agreement cognizable only by an ordinary court and not a cadastral court, and that the petition of respondent was a procedural shortcut to enforce a stale order citing Rule 39, Section 6 of the Rules of Court, the statute of limitations and prescription.[8] On December 15, 1997, after both parties had submitted their respective arguments on the issues raised, the cadastral court denied petitioners motion for reconsideration. The court held that firstly, there was no violation of substantial or procedural due process as the court furnished petitioner its Order of July 23, 1997, it heard petitioners motion for reconsideration in open court, and allowed both parties to submit their respective memoranda including documentary exhibits prior to its ruling on the motion. Secondly, the promulgation of Presidential Decree No. 1529 or The Property Registration Decree of 1979 eliminated the distinction between the general jurisdiction of the RTC and its limited jurisdiction when acting as a Land Registration Court. Finally, the court ruled that the allegation of enforcement of a stale order contrary to Rule 39, Section 6 of the Rules of Court, the statute of limitations and prescription, was misplaced as the invoked rule applied only to civil actions and not to special proceedings such as a land registration case where neither laches nor the statute of limitations applies.[9] Aggrieved, petitioner filed on December 29, 1997 a petition for certiorari before the Court of Appeals, docketed as CA-G.R. Sp. No. 47049. It alleged grave abuse of discretion on the part of the cadastral court for the issuance of its Orders dated July 23, 1997 and December 15, 1997. Meanwhile, respondent filed with the cadastral court a motion for execution of its July 23, 1997 Order,[10] which was opposed by petitioner[11] and denied by the cadastral court on April 6, 1998,[12] thus: Should this [c]ourt enforce the questioned order now, any ruling by the Court of Appeals in the petition for certiorari if it is in favor of petitioner BBEI would create a situation wherein the ruling of a higher [c]ourt can no longer be implemented because the lower [c]ourt had chosen to enforce its order without waiting for the outcome of the petition for certiorari. This [c]ourt does not want to preempt the ruling of the Court of Appeals and therefore, this [c]ourt on the basis of the ruling of the Supreme Court aforementioned[13] and in the higher interest of justice will not enforce at this time the order dated July 23, 1997. Respondents April 29, 1998 motion for reconsideration[14] was denied. Thus, respondent filed before the Court of Appeals a petition for mandamus and certiorari, docketed as CA-G.R. Sp. No. 48512. On November 18, 1998, the Court of Appeals consolidated the cases[15] and rendered its Consolidated Decision of June 21, 1999 dismissing the petition in CA-G.R. Sp. No. 47049 of herein petitioner and granting the petition in CA-G.R. Sp. No. 48512 of herein respondent.[16] The Court of Appeals held that the evidence on record shows the existence of an easement of

right of way in favor of respondent. But in dismissing the petition in CA-G.R. Sp. No. 47049, it anchored its decision on the fact that petitioner filed a special action for certiorari in which the appellate court is limited only to correcting errors of jurisdiction or grave abuse of discretion. On the other hand, in granting the petition in CA-G.R. Sp. No. 48512, the Court of Appeals emphasized that since no restraining order or writ of injunction was issued in the other petition, the period on the finality of the Order of the cadastral court was never interrupted; and that the filing of a petition for certiorari does not prevent the decision from attaining finality as it is an independent action which does not interrupt the course of the principal action or the running of the reglementary period involved in the proceedings. On July 9, 1999, petitioner filed its motion for reconsideration but the appellate court denied it in its Resolution of August 9, 1999.[17] Hence, this petition for review on certiorari under Rule 45 of the Rules of Court for the annulment and setting aside of the June 21, 1999 Consolidated Decision as well as the August 9, 1999 Resolution of the Court of Appeals. Petitioner alleged these errors: (1) the appellate court erred in dismissing CA-G.R. Sp. No. 47049 and not reversing the July 23, 1997 Order of the cadastral court despite (a) the nullity of the Order for the denial of petitioners substantive and procedural right to due process and (b) the commission of abuse of discretion and action without or in excess of jurisdiction of the cadastral court when it revived a stale order, and (2) it likewise erred in granting the petition in CA-G.R. Sp. No. 48512. We find against petitioner. At the outset, the Court emphasizes that the proper subjects of this Rule 45 Petition are the Consolidated Decision and Resolution of the Court of Appeals and not the Orders of the cadastral court. The appellate court was correct in striking down the petition of petitioner in CA-G.R. Sp. No. 47049 on procedural grounds. Indeed, the filing of a special civil action for certiorari before the Court of Appeals limits the determination of the appellate court to whether there was an error of jurisdiction or grave abuse of discretion on the part of the cadastral court. A special civil action for certiorari is an independent action, raising the question of jurisdiction where the tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction. The Court of Appeals found neither error of jurisdiction nor grave abuse of discretion, and dismissed the petition by stating that [t]o Us and to say the most, aforementioned arguments are indeed typical only of either an error of procedure or an error of judgment. This Court agrees. Moreover, even assuming that the appellate court may correctly resolve error of procedure or error of judgment in the instant case, there was none committed by the cadastral court.

The cadastral court did not deny petitioner of its right to due process of the law. The essence of due process is found in the reasonable opportunity to be heard and submit any evidence in support of ones defense. What the law proscribes is the lack of opportunity to be heard.[18] As long as a party is given the opportunity to defend his interests in due course, he would have no reason to complain, for it is this opportunity to be heard that makes up the essence of due process.[19] The records reveal that the cadastral court furnished petitioner its Order of July 23, 1997, which reiterated its previous order of April 17, 1952 through former Judge Ignacio Debuque. More importantly, the cadastral court heard petitioners motion for reconsideration in open court wherein both parties presented their respective arguments to defend their rights and the court likewise allowed the parties to file their respective memoranda prior to ruling on the motion for reconsideration. To quote in part the court in its December 15, 1997 Order, viz: x x x x On August 8, 1997, the date set by Atty. Mercado for the hearing of his motion, the lawyers of both parties appeared including Atty. Amadeo D. Seno, Jr. and the court allowed the parties to argue on the merits of their respective contentions and later on directed the lawyers to put their additional arguments in writing together with additional documentary evidence and to cite the law, authorities and decisions of the Supreme Court in their respective contentions. BBEI (petitioner herein) filed its memorandum with annexes and documentary exhibits. x x x oppositor BBEI filed its reply. Indeed, deprivation of the right to due process cannot be successfully invoked where a party was given the chance to be heard on his Motion for Reconsideration[20] as what happened in the instant case. Moreover, the July 23, 1997 and December 15, 1997 Orders of the cadastral court were based on established facts on the existence of the grant of an easement of road right of way in favor of respondent, viz: (1) an Agreement, for a valuable consideration, dated August 15, 1936 executed by Patricia that granted a road right of way over Lot No. 6-H-2 and Lot No. 7 to the Garcia couple; (2) an Agreement, for a valuable consideration, dated August 17, 1938 executed by Patricia that granted a road right of way over Lot 6-H-2 to the Garcia couple; (3) Deed of Sale dated September 28, 1938 executed by Patricia in favor of Borromeo Bros. Estate, Inc. that contained a provision: x x x the purchase of Lot No. 6-H-2 was subject to the right of way granted by me (Patricia Ruedas Vda. de Andrada) to the spouses Gil Garcia and Teresa Escano de Garcia; (4) the Official Receipt issued by the Register of Deeds of Cebu, Commonwealth of the Philippines No. B 2582295, dated August 18, 1938, upon registration shows the annotation on the title of the Agreement on the road right of way over Lot No. 6-H-2 in favor of the Garcia couple; and (5) the May 2, 1953 Letter of the Borromeo Bros. Estate, Inc., through Flora D. Borromeo, to Mr. Gil Garcia expressly and categorically recognizing or confirming the establishment of a road right of way over Lot No. 6-H-2 and Lot No. 7 in favor of the Garcia couple. Clearly, whether the July 23, 1997 Order of the cadastral court is a revival of the June 28, 1952 Order of another cadastral court is immaterial as the latter was not the sole basis for the granting of the petition for annotation of the road right of way. It merely bolstered the petition

of respondent to annotate the road right of way in his favor. In fine, the records of the instant case show that (1) there was substantial evidence to support the annotation of the easement of right of way on the title of petitioner in favor of respondent and (2) the requirements of due process were sufficiently met. No abuse of discretion was committed by the cadastral court. Consequently, the Court of Appeals is justified in dismissing the petition in CA-G.R. Sp. No. 47049. Likewise, there being no more obstacles in the immediate execution of the Order requiring the annotation of the easement of road right of way on the title of the property of petitioner in favor of respondent, the Court affirms the Court of Appeals in granting the petition in CA-G.R. Sp. No. 48512. IN VIEW WHEREOF, the petition is DENIED. The Consolidated Decision and Resolution of the Court of Appeals dated June 21, 1999 and August 9, 1999, respectively, in CA-G.R. Sp. No. 47049 and CA-G.R. Sp. No. 48512 are AFFIRMED. SO ORDERED.

572 Phil. 190, March 14, 2008 HEIRS OF CESAR MARASIGAN NAMELY: LUZ REGINA, CESAR JR., BENITO, SANTIAGO, RENATO, JOSE, GERALDO, ORLANDO, PETER, PAUL, MAURICIO, ROMMEL, MICHAEL, GABRIEL, AND MARIA LUZ, ALL SURNAMED MARASIGAN, PETITIONERS, VS. APOLONIO, LILIA, OCTAVIO, JR., HORACIO, BENITO JR., AND MARISSA, ALL SURNAMED MARASIGAN, AND THE COURT OF APPEALS, RESPONDENTS. DECISION CHICO-NAZARIO, J.: This is a Petition for Review under Rule 45 of the Revised Rules of Court, with petitioners praying for the reversal of the Decision[1] of the Court of Appeals dated 31 July 2002 and its Resolution[2] dated 13 November 2002 denying the Petition for Certiorari and Prohibition, with prayer for the issuance of a writ of preliminary injunction and restraining order, in CA- G.R. SP No. 67529. Petitioners are asking this Court to (a) give due course to their petition; and (b) reverse and set aside, and thus, declare null and void the Decision of the Court of Appeals in CA-G.R. SP No. 67529. However, petitioners are asking for the following reliefs in their Memorandum: (a) the dismissal of the complaint for partition of the estate of the late Alicia Marasigan, docketed as Special Civil Action No. P-77-97, filed before the Regional Trial Court

(RTC) of Pili, Camarines Sur; (b) annulment or rescission of the public auction sale of petitioners' 1/7th undivided share in the estate of Alicia Marasigan, and direct Apolonio Marasigan to restore the same to petitioners; or (c) in the alternative, allowance of the physical partition of the entire 496 hectares of Hacienda Sta. Rita. Central to the instant Petition is the estate of Alicia Marasigan (Alicia). Alicia was survived by her siblings: Cesar, Apolonio, Lilia, and Benito; Marissa, a sister-in-law; and the children of her brothers who predeceased her: Francisco, Horacio, and Octavio. She died intestate and without issue on 21 January 1995. On 17 December 1997, a Complaint for Judicial Partition of the Estate of Alicia Marasigan was filed before the RTC by several of her heirs and private respondents herein, namely, Apolonio, Lilia, Octavio, Jr., Horacio, Benito, Jr., and Marissa, against Cesar, docketed as Special Civil Action No. P-77-97. According to private respondents, Alicia owned in common with her siblings 13 parcels of land called Hacienda Sta. Rita in Pili and Minalabac, Camarines Sur, with an aggregate area of 4,960,963 square meters or 496 hectares, and more particularly described as follows: ORIGINAL CERTIFICATE OF TITLE NO. 626

"A parcel of land denominated as Lot 516-B of the Subdivision Survey Plan Csd-05-001020, situated at Sagurong, Pili, Camarines Sur, bounded on the NE., by PNR; on the SE., by Bgy. Road; on the SW., by Lot 2870; and on the NW., by Lot 512, containing an area of EIGHT THOUSAND SEVEN HUNDRED TWELVE (8,712) SQUARE METERS, more or less, declared under A.R.P. No. 014 166 and assessed at P12, 860.00."

ORIGINAL CERTIFICATE OF TITLE NO. 627

"A parcel of land denominated as Lot 4237, Cad-291, Pili Cadastre, Plan Cen-05-000006, situated at Saguron, Pili, Camarines Sur, bounded on the N., by Irr. ditch beyond Lot 445; on the E., by Lots 517 and 518; on the S., by Creek, Lot 468, 467; and on the W., by Lot 2948 and Mun. of Minalabac, containing an area of EIGHT HUNDRED SIXTY ONE THOUSAND ONE HUNDRED SIXTY THREE (861,163) SQUARE METERS, more or less, declared under A.R.P. No. 016 268 and assessed at P539,020.00."

ORIGINAL CERTIFICATE OF TITLE NO. 628

"A parcel of land denominated as Lot 2870 Cad. 291, Pili Cadastre Plan Swo-05000607, situated at Sagurong, Pili, Camarines Sur, bounded on the N., by Binasagan River; on the E., by Lots 512 and 516; on the S., by Barangay Road; and on the W., by Lot 469, containing an area of THIRTEEN THOUSAND FOUR HUNDRED SIXTY TWO (13,462) SQUARE METERS, mote or less, declared under A.R.P. No. 014 130 and assessed at P15,180.00."

ORIGINAL CERTIFICATE OF TITLE NO. 629

"A parcel of land denominated as Lot 517-B of the Subdivision Survey Plan Csd-05-001020, situated at Sagurong, Pili, Camarines Sur, bounded on the NE., by PNR; on the SE., by Lot 519; on the SW., by Lots 2025 and 2942; and on the NW., by Brgy. Road, containing an area of THIRTEEN THOUSAND SEVEN HUNDRED SIXTY FIVE (13,765) SQUARE METERS, more or less, declared under A.R.P. No. 014 167 and assessed at P20,310.00."

ORIGINAL CERTIFICATE OF TITLE NO. 652

"A parcel of land denominated as Lot 4207-B of the subdivision survey Plan Csd-05-011349-D, situated at Sagurong (San Jose), Pili, Camarines Sur, bounded on the NE., by Lot 4207-C, Lot 6157; on the SE., by Irr. ditch, Lot 2942; and on the NW., by Lot 4298 (3051-B), containing an area of FIFTY FOUR (54) SQUARE METERS, mote or less, declared under A.R.P. No. 014 384 and assessed at P40.00."

ORIGINAL CERTIFICATE OF TITLE NO. 653

"A parcel of land denominated as Lot 4207-A of the subdivision survey Plan Csd-05-011349-D, situated at Sagurong (San Jose), Pili, Camarines Sur, bounded on the NE., by Lot 4205 (I0T 443-A Csd-05-001019); on the SE., and SW., by Irr. ditch (Lot 2942); on the W., by Lot 4207-C Lot 6157; and on the NW., by Lot 4208 (Lot 3051-B, Csd-05-001019), containing an area of TWENTY SEVEN THOUSAND THREE HUNDRED THIRTY SEVEN (27,33) SQUARE METERS, more or less, declared under A.R.P. No. 014 383 and assessed at P20,150.00."

A.R.P. NO. 014 385

"A parcel of land denominated as Lot 4207-C Lot 6157 of the subdivision survey Plan Csd-05001019, situated at Sagurong (San Jose), Pili, Camarines Sur, bounded on the NE., by Lot 4207-A Lot 6155; on the SE., by Lot 4207-A Lot 6155; on the SW., by Lot 4207-B Lot 6156 and Irr, ditch; and on the NW., by Lot 4208 (3051-B), containing an area of THREE HUNDRED SIXTY ONE (361) SQUARE METERS, more or less, declared under A.R.P. No. 014 385 and assessed at P270.00."

ORIGINAL CERTIFICATE OF TITLE NO. 654

"A parcel of land denominated as Lot 443-A of the subdivision survey Plan Csd-05-001019, situated at Sagurong (San Jose), Pili, Camarines Sur, bounded on the NE., by Lots 474, 4019, 4018, 4027, creek; on the SE., by Hrs. of Benito Marasigan; and on the NW., by Lot 443-B, Ireneo Llorin; containing an area of TWO HUNDRED FORTY FOUR THOUSAND EIGHT HUNDRED FIFTY EIGHT (244,858) SQUARE METERS, more or less, declared under A.R.P. No. 014 382 and assessed at P195,400.00."

ORIGINAL CERTIFICATE OF TITLE NO. 655

"A parcel of land denominated as Lot 2942-A of the subdivision survey Plan Csd-05-010854-D, situated at Sagurong (San Jose/San Agustin), Pili, Camarines Sur, bounded on the N., by Creek; on the NE., by Lot 3049; on the SE., by Creek; and on the W., by Lots 3184, 3183, 2942-13, 3183, 3060 and 3177; containing an area of FOUR HUNDRED SIXTY SIX THOUSAND SIX HUNDRED TWENTY TWO (466,622) SQUARE METERS, more or less, declared under A.R.P. No. 014 386 and assessed at P287,160.00."

ORIGINAL CERTIFICATE OF TITLE NO. 656

"A parcel of land denominated as Lot 2 Plan Cen-05-000007, situated at San Jose, Pili, Camarines Sur, bounded on the N., by Lots 509 and 508, Binasagan River; on the E., by Lots 523, 521 and 520; on the S., by Lot 522; and on the W., by Phil. Nat'l. Railways; containing an area of ONE HUNDRED FIVE THOUSAND TWO HUNDRED TWELVE (105,212) SQUARE METERS, more or less, declared under A.R.P. No. 016 939 and assessed at P524,220.00."

ORIGINAL CERTIFICATE OF TITLE NO. 657

"A parcel of land denominated as Lot 1, Plan Cen-05-000007, situated at San Jose, Pili, Camarines Sur, bounded on the N., by Lots 525, 526, 527; on the E., by Lots 528-A, 529, 530, 531, 532 and Nat'l. Road; on the S., by Lots 533 and 522 pt.; and on the W., by Lots 521, 523; containing an area of FIFTY SIX THOUSAND SIX HUNDRED FIFTY TWO (56,652) SQUARE METERS, more or less, declared under A.R.P. No. 016 993 and assessed at P292,090.00"

TRANSFER CERTIFICATE OF TITLE NO. 16841

"A parcel of land denominated as Lots 1 and 2, Plan II-10759, situated at Manapao, Minalabac, Camarines Sur, bounded on the N., by Lots 3061, 3059, 4119, 3178, 3185, 3186, 3187, 3188, Borabodan Creek, 4350, 4401; and on the W., by Lots 4380, 3030, 3057. 3286, 3053, 3056; containing an area of TWO MILLION NINE HUNDRED TWENTY TWO THOUSAND FIFTY NINE (2,922,059) SQUARE METERS, more or less, declared under A.R.P. No. 014 0372 and assessed at P888,200.00."

TRANSFER CERTIFICATE OF TITLE NO. 16842

"A parcel of land denominated as Lot 443-A of Plan Psu-62335, situated at Manapao, Minalaban, Camarines Sur (San Jose, Pili, Cam. Sur); bounded on the NE., by Shannon Richmond and Eugenio Dato; on the E., by Eugenio Dato; on the S., by Eugenio Dato and Creek; and on the SW and NW., by Shannon Richmond; containing an area of TWO HUNDRED FORTY THOUSAND SEVEN HUNDRED SIX (240,706) SQUARE METERS, more or less, declared under A.R.P. No. 014 245 and assessed at P146,830.00."[3] Alicia left behind her 2/21 shares in the afore-described 13 parcels of land. In answer to the private respondents' Complaint, Cesar enumerated Alicia's several other properties and assets which he also wanted included in the action for partition, to wit: 1. 1/8 share in the parcel of land covered by TCT No. 10947 located at Poblacion, San Juan, Batangas, containing an area of 4,827 square meters, more or less;

2. 1/8 share in the parcel of land with improvements thereon (cockpit arena) located in Poblacion, San Juan, Batangas covered by TCT No. 0-3255; 3. A parcel of commercial land under property Index No. 024-21-001-25-005 situated in Poblacion, San Juan Batangas containing an area of 540 square meters, more or less; 4. A parcel of land situated in Yabo, Sipocot, Camarines Sur containing an area of 2,000 hectares and covered by Tax Declaration No. 7546; 5. A parcel of land located at Brgy. Yabo, Sipocot, Camarines Sur with an area of 21,000 square meters, more or less, covered by Tax Declaration No. 6622; 6. A parcel of land located at Brgy. Yabo, Sipocot, Camarines Sur with an area of 2,6750 hectares under Tax Declaration No. 5352; 7. A parcel of land located at Barrio Yabo, Sipocot, Camarines Sur with an area of 2,3750 hectares and covered by Tax Declaration No. 3653, and 8. Shares of Stock in Bolbok Rural Bank, Inc., a family owned rural bank consisting of 3,230 shares at P100.00 per share.[4] Cesar's request for inclusion was contested by private respondents on the ground that the properties he enumerated had already been previously partitioned and distributed to the appropriate parties.[5] On 4 February 2000, the RTC decided in favor of private respondents and issued an Order of Partition of the Estate of Alicia Marasigan, decreeing that: As regards to [sic] the real properties located in Hacienda Sta. Rita in the municipalities of Pili and Minilabac, Camarines Sur as described in par. 3 of the complaint, the actual area representing the 2/21 pro-indiviso share having been determined consisting of 422,422.65 sq. meters, more or less (Exhibit 0-2) therefore, the share of each heir of the late Alicia Marasigan is 1/7 or equivalent to 67,496.09 square meters each (Exh. 0-3). Wherefore, in view of the foregoing, decision is hereby rendered. 1. Ordering the partition of the estate of Alicia Marasigan in Hacienda Sta. Rita located in the municipalities of Pili and Minalabac, Camarines Sur consisting of 422,422.65 sq. meters among her surviving brothers and sisters namely: APOLONIO, LILIA, BENITO and CESAR, all surnamed MARASIGAN who will inherit per capita and her nephews and nieces who are the children of deceased brothers - the children of Francisco Marasigan and children of Horacio Marasigan who will inherit per stirpes and Octavio Marasigan, Jr., who will inherit by right of representation of his deceased father, Octavio Marasigan, Sr.

2. Declaring the partition of the San Juan, Batangas properties made by the heirs of Alicia Marasigan as contained in the minutes of the Board Meeting of the Rural Bank of Bolbok valid and binding among them. 3. Ordering the partition of the real properties located in San Juan, Batangas as shown and reflected in Exhibits 1 to 10 inclusive presented by defendant, in the same sharing and proportion as provided in paragraph one above-cited in this dispositive portion. 4. No pronouncement as to costs.[6] As the parties could not agree on how they shall physically partition among themselves Alicia's estate, private respondents filed a Motion to Appoint Commissioners[7] following the procedure outlined in Sections 4, 5, 6 and 7 of Rule 69 of the Rules of Court, citing, among other bases for their motion: That unfortunately, the parties could not agree to make the partition among themselves which should have been submitted for the confirmation of the Honorable Court more so because no physical division could be had on the 2/21 pro-indiviso shares of the decedent [Alicia] due to different locations, contours and conditions; The RTC granted the Motion and appointed Myrna V. Badiong, Assistant Provincial Assessor of Camarines Sur, as Chairman of the Board of Commissioners.[8] Private respondents nominated Sandie B. Dacara as the second commissioner. Cesar failed to nominate a third commissioner despite due notice. Upon lapse of the period given, only two commissioners were appointed. On 26 October 2000, the two Commissioners conducted an ocular inspection of Hacienda Sta. Rita, together with the Local Assessment Operations Officer IV of the Provincial Assessor's Office, the Barangay Agrarian Reform Committee (BARC) Chairman, and the Marasigans' caretaker. However, Cesar contended that he did not receive any notice from the Commissioners to attend the ocular inspection and he was, thus, not present on said occasion. The Commissioners' Report[9] was released on 17 November 2000 stating the following findings and recommendations: The undersigned Commissioners admit the 472,472.65 (47.2472.65) square meters representing the 2/21 pro-indiviso share of the deceased Alicia Marasigan and the 1/7 share of each of the heirs of Alicia N. Marasigan equivalent to 67,496.09 square meters or 6.7496.09 hectares determined by Geodetic Engineer Roberto R. Revilla in his Compliance with the Order of the Honorable Court dated November 18, 1998. Considering that the physical division of the 2/21 pro-indiviso share of the decedent, Alicia Marasigan cannot be done because of the different locations and conditions of the properties,

undersigned Commissioners hereby recommend that the heirs may assign their 1/7 share to one of the parties willing to buy the same (Sec. 5, Rule 69 of the Rules of Court) provided he pays to the heir[s] willing to assign his/her 1/7 share such amounts the Commissioners have recommended and duly approved by the Honorable Court. In consideration of such findings and after a careful and thorough deliberations by the undersigned on the subject matter, considering the subject properties' classification and actual predominant use, desirability and demand and together with the benefits that may be derived therefrom by the landowners, we have decided to recommend as it is hereby recommended that the price of the 1/7 share of each of the heir[s] is P700,000.00 per hectare, thus: P700,000.00 x 6.7496.09 hectares = P4,724,726.30 or in words:

FOUR MILLION SEVEN HUNDRED TWENTY FOUR THOUSAND SEVEN HUNDRED TWENTY SIX AND 30/100 PESOS FOR THE 1/7 SHARE (6.7496.09 HECTARES) OF EACH OF THE HEIRS.[10] Cesar opposed the foregoing findings and prayed for the disapproval of the Commissioners' Report. In his Comment/Opposition to the Commissioners' Report, he maintained that: He does not expect that he would be forced, to buy his co-owner's share or to sell his share instead. Had he known that it would be the recourse he would have appealed the judgment [with petitioners referring to the RTC Order of Partition]. But the findings of facts in the Decision as well [as] dispositive do not show that any valid grounds for exception to partition is even present in the instant case.[11] Cesar alleged that the estate is not indivisible just because of the different locations and conditions of the parcels of land constituting the same. Section 5, Rule 69 of the Rules of Court can only be availed of if the partition or division of the real properties involved would be prejudicial to the interest of any of the parties. He asserted that despite the segregation of his share, the remaining parcels of land would still be serviceable for the planting of rice, corn, and sugarcane, thus evidencing that no prejudice would be caused to the interests of his co-heirs. Countering Cesar's arguments, private respondents contended that physical division is impossible because Alicia's estate is equivalent to 2/21 shares in Hacienda Sta. Rita, which is composed of 13 parcels under different titles and tax declarations, situated in different barangays and municipalities, and covers an area of 496 hectares. After a serious consideration of the matters raised by the parties, the RTC issued an Order dated 22 June 2001 approving in toto the recommendations embodied in the Commissioners'

Report, particularly, the recommendation that the property be assigned to one of the heirs at P700,000.00 per hectare or a total amount of P4,724,726.00,[12] after finding the same to be in accordance with the Rules of Court and the New Civil Code. Pertinent portions of the Order are reproduced below: WHEREFORE, in view of all the foregoing, the Commissioners Report dated November 17, 2000 is hereby approved in toto, more specifically its recommendation to assign the property to any one of the heirs interested at the price of P700,000.00 per hectare or in the total amount of P4,724,726.00 per share. Regarding the properties of deceased Alicia Marasigan located at San Juan, Batangas, the herein Commissioners, Mrs. Myrna V. Badiong and Engr. Sandie B. Dacara are hereby directed to proceed with utmost dispatch to San Juan, Batangas and inspect said properties (Exhibits 1 to 10 inclusive) and thereafter to submit a Supplemental Report as to its partition or other disposition with notice to all parties and their counsels all at the expense of the estate, within a period of thirty (30) days from receipt hereof. Dissatisfied, Cesar filed a Motion for Reconsideration,[13] which was denied by the RTC for lack of merit.[14] In the meantime, Cesar died on 25 October 2001. He was substituted by his heirs and herein petitioners, namely, Luz Regina, Cesar, Jr., Benito, Santiago, Renato, Jose, Geraldo, Orlando, Peter, Paul, Mauricio, Rommel, Michael, Gabriel, and Maria Luz, all surnamed Marasigan. Upon the denial by the RTC of Cesar's Motion for Reconsideration, petitioners elevated their case to the Court of Appeals via a Petition for Certiorari and Prohibition under Rule 65 of the Rules of Court, docketed as Special Civil Action No. 67529.[15] They claimed that the RTC judge acted with grave abuse of discretion amounting to lack or excess of jurisdiction in approving the Commissioners' Report although the facts would clearly indicate the following: (a) The procedure taken by the Commissioners violated the procedure for partition provided in Section 4, Rule 69 of the 1997 Rules of Procedure because there was no notice sent to them for the viewing and examination of the properties of the estate; neither were they heard as to their preference in the portion of the estate, thus depriving them of due process; (b) The ground used by the Commissioners resulting in their recommendation to assign the property is not one of those grounds provided under the Rules (c) Article 492 of the New Civil Code is inapplicable

(d) Assignment of the real properties to one of the parties will not end the co-ownership. Moreover, petitioners accused the RTC of committing grave abuse of discretion in solely relying on the testimony of Apolonio to the effect that physical division is impractical because, while other portions of the land are suitable for agriculture, the others are not, citing the different contours of the land and unavailability of water supply in some parts. The Court of Appeals dismissed petitioners' Petition for Certiorari and Prohibition in a Decision[16] promulgated on 31 July 2002, and ruled that the RTC acted within its authority in issuing the Order of 22 June 2001. The Court of Appeals found that petitioners failed to discharge the burden of proving that the proceedings before the Board of Commissioners were unfair and prejudicial. It likewise found that the petitioners were not denied due process considering that they were afforded the opportunity to be heard during the hearing for approval of the Commissioners' Report on 18 January 2001. According to the appellate court, whether or not the physical division of the estate will cause prejudice to the interests of the parties is an issue addressed to the discretion of the Commissioners. It further held that it would be absurd to believe that the prejudice referred to in Section 5, Rule 69 of the Rules of Court does not embrace physical impossibility and impracticality. It concurred in the finding of the RTC that: It is not difficult to believe that a physical partition/division of the 2/21 pro-indiviso shares of the decedent Alicia Marasigan contained in and spread throughout thirteen (13) parcels of the Hacienda Sta. Rita with a total area of 946 (sic) hectares would be quite impossible if totally impractical. The said parcels are of different measurements in terms of areas and shapes located in different barrages of the Municipalities of Pili and Minalabac, Camarines Sur. [17] The Court of Appeals also noted that whether or not the RTC correctly applied Section 5, Rule 69 of the Rules of Court and Article 492 of the New Civil Code, would involve an error of judgment, which cannot be reviewed on certiorari. Finally, the Court of Appeals found unmeritorious petitioners' argument that the assignment of the estate to one of the parties does not end the co-ownership, considering that it questions the 4 February 2000 [18] Decision of the RTC which had already become final and executory. Petitioners filed a Motion for Reconsideration[19] of the foregoing Decision but the same was denied by the Court of Appeals in a Resolution dated 13 November 2002. Still aggrieved, petitioners filed on 31 December 2002 this Petition for Review under Rule 45 of the Revised Rules of Court, docketed as G.R. No. 156078.

Pending resolution of the instant Petition by this Court, the RTC granted private respondents' Urgent Motion for Execution on 26 December 2002. The RTC ordered the sale of petitioners' 1/7 pro-indiviso share in Alicia's estate upon the urgent motion of private respondents dated 27 September 2002 for the partial execution of the judgment of the Court approving the Commissioners' report pending certiorari.[20] Petitioners' share in Alicia's estate was sold in a public auction on 26 February 2003.[21] Based on the Commissioners' Report on the Auction Sale, there were two bidders, Apolonio Marasigan and Amado Lazaro. Apolonio, with a bid of P701,000.00 per hectare, won over Amado Lazaro, whose bid was P700,000.00 per hectare. Petitioners' 1/7 share as Cesar's heirs in Alicia's estate was sold in the public auction for P3,777,689.00. This amount is lower than the P4,724,726.30 price of the 1/7 share in Alicia's estate as earlier determined by the Commissioners due allegedly to the acquisition by the Department of Agrarian Reform (DAR) of a portion of Hacienda Sta. Rita located in Minilabac, Camarines Sur which was placed under Republic Act No. 6657, or the Comprehensive Agrarian Reform Law, with 100.00 hectares thereof compulsorily acquired. On 24 March 2003, petitioners filed with the RTC a Motion to Declare Failure of Bidding and to Annul Public Auction Sale. On 5 May 2003, however, the RTC released an Omnibus Order[22] ruling, among other things, that the objection of petitioners as to the difference of the value of their 1/7 share as determined by the Commissioners vis--vis the winning bid was no longer an issue since Apolonio Marasigan indicated his willingness to pay for the deficiency. Following the public auction and sale of their 1/7 share in the property,[23] petitioners filed a Notice of Appeal[24] with the RTC on 26 May 2003 indicating that they were appealing the 5 May 2003 Omnibus Order of the RTC[25] to the Court of Appeals. Thereafter, or on 9 June 2003, petitioners filed a Record on Appeal[26] pursuant to Section 3, Rule 41 of the Rules of Court, praying that it be approved and transmitted to the Court of Appeals. [27] On 2 July 2003, the RTC issued an Order denying due course to petitioners' Notice of Appeal on the ground that the proper remedy is not appeal, but certiorari. Petitioners then filed on 27 August 2003 another Petition before the Court of Appeals for Certiorari and Mandamus,[28] docketed as CA-G.R. SP No. 78912, praying that the RTC be directed to approve their Notice of Appeal and Record on Appeal, and to forward the same to the appellate court.

In a Resolution[29] dated 10 October 2003, the Court of Appeals dismissed CA-G.R. SP No. 78912 outright on the ground that the verification and certificate of non-forum shopping of the petition was signed by only Cesar Marasigan, Jr., without any accompanying document to prove his authority to sign on behalf of the other petitioners. Petitioners filed a Motion for Reconsideration but it was denied by the Court of Appeals in a Resolution[30] dated 12 July 2004.[31] Cesar G. Marasigan, Jr., in a Petition for Certiorari filed with this Court on 4 September 2004 and docketed as G.R. No. 164970, prayed for the reversal and setting aside of the Court of Appeals Resolution dated 10 October 2003 dismissing CA-G.R. SP No. 78912, and Resolution dated 12 July 2004 denying the Motion for Reconsideration thereof. This Court, however, issued a Resolution on 13 October 2004 denying the petition for failure of the petitioner to show that the Court of Appeals committed a reversible error. The same has become final and executory. Going back to the Petition at bar, petitioners raise before this Court the following assignment of errors: I. THE COURT A QUO HAS DECIDED A QUESTION OF SUBSTANCE NOT THEREFORE DETERMINED BY THE SUPREME COURT IN FINDING THAT THERE IS NO NEED FOR DUE NOTICE TO THE PARTIES TO ATTEND THE VIEWING AND EXAMINATION OF THE REAL ESTATE SUBJECT OF PARTITION WHEN THE COMMISSIONERS HAVE DECIDED NOT TO PARTITION THE PROPERTY AND SUCH NOTICE UNDER SECTION 4 OF RULE 69 IS INDISPENSABLE ONLY WHEN THEIR DECISION IS TO PARTITION. THE DECISION OF THE COURT OF APPEALS IS NOT IN ACCORDANCE WITH LAW PARTICULARLY WITH ARTICLES 494 AND 495 OF THE NEW CIVIL CODE AND SECTIONS 5 RULE 69 OF THE RULES. THAT THE FINDINGS OF THE COURT OF APPEALS OF PHYSICAL IMPOSSIBILITY AND IMPRACTICALITY IF EMBRACED IN `PREJUDICE' REFERRED IN SECTION 5, RULE 69 OF THE RULES SHALL MAKE SAID RULE VIOLATIVE OF THE CONSTITUTIONAL LIMITATIONS ON THE RULE MAKING POWER OF THE SUPREME COURT THAT ITS RULES SHALL NOT INCREASE, DECREASE OR MODIFY SUBSTANTIVE RIGHTS.[32]

II.

III.

In their Memorandum, however, petitioners submitted for resolution the following issues. I. RESPONDENTS HAVE NO CAUSE OF ACTION FOR PARTITION BECAUSE THE SUBJECT MATTER OF THE CASE CONSISTS OF UNDIVIDED SHARES WHICH CANNOT BE PARTITIONED.

II.

THE REGIONAL TRIAL COURT HAS NO JURISDICTION TO PARTITION UNDIVIDED OR UNIDENTIFIED LAND AND HAS NOT ACQUIRED JURISDICTION OVER 496 HECTARES OF UNDIVIDED LAND WHICH SHOULD BE THE PROPER SUBJECT OF PARTITION. THE JUDGMENT OF PARTITION AND ALL SUBSEQUENT PROCEEDINGS ARE NULL AND VOID AB INITIO, INCLUDING THE PUBLIC AUCTION SALE OF PETITIONERS' SHARES WHICH HAD NOT RENDERED THIS PETITION MOOT. EVEN ASSUMING ARGUENDO THAT LACK OF CAUSE OF ACTION AND LACK OF JURISDICTION, AS DISCUSSED, CAN BE IGNORED, THE PROCEEDINGS BELOW ARE TAINTED WITH SERIOUS IRREGULARITIES THAT CALL FOR THE EXERCISE OF THE SUPERVISORY POWERS OF THIS HONORABLE COURT. CERTIORARI AS A SPECIAL CIVIL ACTION UNDER RULE 65 AND APPEAL BY CERTIORARI UNDER RULE 45, BOTH OF THE 1997 RULES OF CIVIL PROCEDURE, WERE EMPLOYED AS PROPER REMEDIES IN THIS CASE.[33]

III.

IV.

V.

This Court significantly notes that the first three issues,[34] alleging lack of jurisdiction and cause of action, are raised by petitioners for the first time in their Memorandum. No amount of interpretation or argumentation can place them within the scope of the assignment of errors they raised in their Petition. The parties were duly informed by the Court in its Resolution dated 17 September 2003 that no new issues may be raised by a party in his/its Memorandum and the issues raised in his/its pleadings but not included in the Memorandum shall be deemed waived or abandoned. The raising of additional issues in a memorandum before the Supreme Court is irregular, because said memorandum is supposed to be in support merely of the position taken by the party concerned in his petition, and the raising of new issues amounts to the filing of a petition beyond the reglementary period.[35] The purpose of this rule is to provide all parties to a case a fair opportunity to be heard. No new points of law, theories, issues or arguments may be raised by a party in the Memorandum for the reason that to permit these would be offensive to the basic rules of fair play, justice and due process.[36] Petitioners failed to heed the Court's prohibition on the raising of new issues in the Memorandum. Moreover, Section 1 of Rule 9 of the Rules of Court provides that: 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 not jurisdiction over the subject matter, that there is another action pending between the same parties for the same cause, or that the

action is barred by a prior judgment or by statute of limitations, the court shall dismiss the claim. First, it bears to point out that Cesar, petitioners' predecessor, did not file any motion to dismiss, and his answer before the RTC did not bear the defenses/objections of lack of jurisdiction or cause of action on these grounds; consequently, these must be considered waived. The exception that the court may still dismiss a case for lack of jurisdiction over the subject matter, although the same is not pleaded, but is apparent in the pleadings or evidence on record, does not find application to the present Petition. Second, petitioners' arguments [37] on the lack of jurisdiction of the RTC over the case more appropriately pertain to venue, rather than jurisdiction over the subject matter, and are, moreover, not apparent from the pleadings and evidence on record. Third, the property subject of partition is only the 47.2 hectare proindiviso area representing the estate of Alicia. It does not include the entire 496 hectares of land comprising Hacienda Sta. Rita. Even petitioners' argument that non-payment of appropriate docket fees by private respondents deprived the RTC of jurisdiction to partition the entire Hacienda Sta. Rita [38] deserves scant consideration. In National Steel Corporation v. Court of Appeals,[39] the Court ruled: x x x 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 rendered is adverse to him. Irrefragably, petitioners raised the issues of jurisdiction for lack of payment of appropriate docket fees and lack of cause of action belatedly in their Memorandum before this Court. Cesar and petitioners were noticeably mum about these in the proceedings before. In fact, Cesar actively participated in the proceedings conducted before the RTC by seeking affirmative reliefs therefrom, such as the inclusion of more properties in the partition. Hence, petitioners are already estopped from assailing the jurisdiction of the RTC on this ground. It is conceded that this Court adheres to the policy that "where the court itself clearly has no jurisdiction over the subject matter or the nature of the action, the invocation of this defense may de done at any time."[40] While it is the general rule that neither waiver nor estoppel shall apply to confer jurisdiction upon a court, the Court may rule otherwise under meritorious and exceptional circumstances. One such exception is Tijam v. Sibonghanoy,[41] which finds application in this case. This Court held in Tijam that "after voluntarily submitting a cause and encountering an adverse decision on the merits, it is too late for the loser to question the

jurisdiction or power of the court." This Court further notes that while petitioners filed their last pleading in this case, their Memorandum, on 26 December 2003, they failed to mention therein that the Court of Appeals had already dismissed CA-G.R. SP No. 78912.[42] To recall, CA-G.R. No. 78912 is a Petition for Certiorari and Mandamus involving the RTC Order dated 2 July 2003, which denied petitioners' Notice of Appeal. Petitioners intended to appeal the RTC Omnibus Order dated 5 May 2003 sustaining the public auction and sale of petitioners' share in Alicia's estate. Petitioners' failure to provide this Court with information on the developments in CA-G.R. SP No. 78912 is not only in violation of the rules on non-forum shopping, but is also grossly misleading, because they are raising in their Memorandum in the present case the same issues concerning the public auction and sale of their share in Alicia's estate. The purpose of the rule against forum shopping is to promote and facilitate the orderly administration of justice. Forum shopping "occurs when a party attempts to have his action tried in a particular court or jurisdiction where he feels he will receive the most favorable judgment or verdict." In our jurisdiction, it has taken the form of filing multiple petitions or complaints involving the same issues before two or more tribunals or agencies in the hope that one or the other court would make a favorable disposition. There is also forum shopping when, because of an adverse decision in one forum, a party seeks a favorable opinion (other than by appeal or certiorari) in another. The rationale against forum shopping is that a party should not be allowed to pursue simultaneous remedies in two different fora. Filing multiple petitions or complaints constitutes abuse of court processes, which tends to degrade the administration of justice, wreaks havoc upon orderly judicial procedure, and adds to the congestion of the heavily burdened dockets of the courts. Thus, the rule proscribing forum shopping seeks to promote candor and transparency among lawyers and their clients in the pursuit of their cases before the courts to promote the orderly administration of justice, prevent undue inconvenience upon the other party, and save the precious time of the courts. It also aims to prevent the embarrassing situation of two or more courts or agencies rendering conflicting resolutions or decisions upon the same issue.[43] Petitioners have indeed managed to muddle the issues in the instant case by raising issues for the first time in their Memorandum, as well as including issues that were already pending before another tribunal and have eventually been decided with finality, for which reason petitioners are herein admonished by this Court. The Court, nonetheless, manages to strip the issues in this Petition down to the singular issue of whether or not the Court of Appeals erred in affirming in toto the RTC Order adopting the Commissioners' recommendation on the manner of partition of the estate of Alicia Marasigan.

After an exhaustive study of the merits of the case and the pleadings submitted by the parties, this Court is convinced that the Court of Appeals did not err in affirming the Order of the RTC which approved the Commissioners' recommendations as to the manner of implementing the Order of Partition of Alicia's estate. There is no reason to reverse the Court of Appeal's dismissal of petitioners' Petition for Certiorari and Prohibition and ruling that the RTC acted well-within its jurisdiction in issuing the assailed Order. Nowhere is it shown that the RTC committed such patent, gross and prejudicial errors of law or fact, or a capricious disregard of settled law and jurisprudence, as to amount to a grave abuse of discretion or lack of jurisdiction on its part, in adopting and confirming the recommendations submitted by the Commissioners, and which would have warranted the issuance of a writ of certiorari. This petition originated from an original action for partition. It is governed by Rule 69 of the Rules of Court, and can be availed of under the following circumstances: Section 1. Complaint in action for partition of real estate. A person having the right to compel the partition of real estate may do so as provided in this Rule, setting forth in his complaint the nature and extent of his title and an adequate description of the real estate of which partition is demanded and joining as defendants all other persons interested in the property. In this jurisdiction, an action for partition is comprised of two phases: first, the trial court, after determining that a co-ownership in fact exists and that partition is proper, issues an order for partition; and, second, the trial court promulgates a decision confirming the sketch and subdivision of the properties submitted by the parties (if the parties reach an agreement) or by the appointed commissioners (if the parties fail to agree), as the case may be. [44] The delineations of these two phases have already been thoroughly discussed by this Court in several cases where it explained: The first phase of a partition and/or accounting suit is taken up with the determination of whether or not a co-ownership in fact exists, (i.e., not otherwise legally proscribed) and may be made by voluntary agreement of all the parties interested in the property. This phase may end with a declaration that plaintiff is not entitled to have a partition either because a co-ownership does not exist, or partition is legally prohibited. It may end, upon the other hand, with an adjudgment that a co-ownership does in truth exist, partition is proper in the premises and an accounting of rents and profits received by the defendant from the real estate in question is in order. In the latter case, the parties may, if they are able to agree, make partition among themselves by proper instruments of conveyance, and the court shall confirm the partition so agreed upon. In either case - i.e., either the action is dismissed or partition and/or accounting is

decreed - the order is a final one, and may be appealed by any party aggrieved thereby. The second phase commences when it appears that "the parties are unable to agree upon the partition" directed by the court. In that event, partition shall be done for the parties by the court with the assistance of not more than three (3) commissioners. This second stage may well also deal with the rendition of the accounting itself and its approval by the court after the parties have been accorded opportunity to be heard thereon, and an award for the recovery by the party or parties thereto entitled of their just share in the rents and profits of the real estate in question. Such an order is, to be sure, final and appealable.[45] Trouble arose in the instant petition in the second phase. Petitioners postulate that the Court of Appeals erred in holding that notice to the heirs regarding the examination and viewing of the estate is no longer necessary given the circumstances. They aver that, in effect, the Court of Appeals was saying that such notice is only necessary when the Commissioners actually distribute the properties, but is not mandatory when the Commissioners recommend the assignment of the properties to any of the heirs. Petitioners contend that this is prejudicial to their right to due process since they are deprived of the opportunity to be heard on the valuation of their share in the estate. Petitioners' opposition is anchored on Section 4 of Rule 69 of the Rules of Court, which reads: Section 4. Oath and duties of commissioners. Before making such partition, the commissioners shall take and subscribe an oath that they will faithfully perform their duties as commissioners, which oath shall be filed in court with the other proceedings in the case. In making the partition, the commissioners shall view and examine the real estate, after due notice to the parties to attend at such view and examination, and shall hear the parties as to their preference in the portion of the property to be set apart to them and the comparative value thereof, and shall set apart the same to the parties in lots or parcels as will be most advantageous and equitable, having due regard to the improvements, situation and quality of the different parts thereof. Petitioners insist that the above provision is explicit and does not allow any qualification, contending that it does not require that the lack of notice must first be proven to have caused prejudice to the interest of a party before the latter may object to the Commissioners' viewing and examination of the real properties on the basis thereof. They maintain that they were prejudiced by the mere lack of notice. We, on the other hand, find that the scales of justice have remained equal throughout the

proceedings before the RTC and the Commissioners. This Court, in the performance of its constitutionally mandated duty to settle actual controversies involving rights which are legally demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government, is duty-bound to ensure that due process is afforded to all the parties to a case. As the Court of Appeals declared, due process is not a mantra, the mere invocation of which shall warrant a reversal of a decision. Well-settled is the rule that the essence of due process is the opportunity to be heard. In Legarda v. Court of Appeals,[46] the Court held that as long as parties to a case were given the opportunity to defend their interest in due course, they cannot be said to have been denied due process of the law. Neither do the records show any indicia that the preference of petitioners for the physical subdivision of the property was not taken into consideration by the Commissioners. Petitioners' persistent assertion that their rights were prejudiced by the lack of notice is not enough. Black's Law Dictionary defines the word prejudice as damage or detriment to one's legal rights or claims. Prejudice means injury or damage.[47] No competent proof was adduced by petitioners to prove their allegation. Mere allegations cannot be the basis of a finding of prejudice. He who alleges a fact has the burden of proving it and a mere allegation is not evidence.[48] It should not be forgotten that the purpose of the rules of procedure is to secure for the parties a just, speedy and inexpensive determination of every action or proceeding. [49] The ultimate purpose of the rules of procedure is to attain, not defeat, substantial justice. [50] Records reveal that the parties were given sufficient opportunity to raise their concerns. From the time the action for partition was filed by private respondents, all the parties, including the late Cesar, petitioners' predecessor, were given a fair opportunity to be heard. Since the parties were unable to agree on how the properties shall be divided, Commissioners were appointed by the Court pursuant to Section 3 of Rule 69 of the Rules of Court. Section 3. Commissioners to make partition when parties fail to agree. - If the parties are unable to agree upon the partition, the court shall appoint not more than three (3) competent and disinterested persons as commissioners to make the partition, commanding them to set off to the plaintiff and to each party in interest such part and proportion of the property as the court shall direct.

While the lack of notice to Cesar of the viewing and examination by the Commissioners of the real properties comprising Alicia's estate is a procedural infirmity, it did not violate any of his substantive rights nor did it deprive him of due process. It is a matter of record, and petitioners cannot deny, that Cesar was able to file his Comment/Opposition to the Commissioners' Report. And after the RTC adopted and confirmed the Commissioners' recommendations in its Order dated 22 June 2001, Cesar was able to file a Motion for Reconsideration of the said Order. He had sufficient opportunity to present before the RTC whatever objections or oppositions he may have had to the Commissioners' Report, including the valuation of his share in Alicia's estate. Petitioners also allege that the ruling of the Court of Appeals -- that physical impossibility and impracticality are embraced by the word "prejudice," referred to in Section 5 of Rule 69 of the Rules of Court -- violates the constitutional limitation on the rule-making power of the Supreme Court, according to which, the Rules of Court shall not increase, decrease or modify substantive rights. According to petitioners, Section 5 of Rule 69 of the Rules of Court, which provides: Section 5. Assignment or sale of real estate by commissioners. - When it is made to appear to the commissioners that the real estate, or a portion thereof, cannot be divided without prejudice to the interests of the parties, the court may order it assigned to one of the parties willing to take the same, provided he pays to the other parties such amounts as the commissioners deem equitable, unless one of the interested parties asks that the property be sold instead of being so assigned, in which case the court shall order the commissioners to sell the real estate at public sale under such conditions and within such time as the court may determine. should be read in conjunction with Articles 494 and 495 of the New Civil which provide for the following substantive rights: Article 494. No co-owner shall be obliged to remain in the co-ownership. Each co-owner may demand at any time the partition of the thing owned in common, insofar as his share is concerned. Nevertheless, an agreement to keep the thing undivided for a certain period of time, not exceeding ten years, shall be valid. This term may be extended by a new agreement. A donor or testator may prohibit partition for a period which shall not exceed twenty years.

Neither shall there be any partition when it is prohibited by law. No prescription shall run in favor of a co-owner or co-heir against his co-owners or co-heirs so long as he expressly or impliedly recognizes the co-ownership. Article 495. Notwithstanding the provisions of the preceding article, the co-owners cannot demand a physical division of the thing owned in common, when to do so would render unserviceable for the use for which it is intended. But the co-ownership may be terminated in accordance with Article 498. Article 498 of the New Civil Code, referred to by Article 495 of the same Code, states: Article 498. Whenever the thing is essentially indivisible and the co-owners cannot agree that it be allotted to one of them who shall indemnify the others, it shall be sold and its proceeds distributed. Evidently, the afore-quoted Civil Code provisions and the Rules of Court must be interpreted so as to give effect to the very purpose thereof, which is to put to an end to co-ownership in a manner most beneficial and fair to all the co-owners. As to whether a particular property may be divided without prejudice to the interests of the parties is a question of fact. To answer it, the court must take into consideration the type, condition, location, and use of the subject property. In appropriate cases such as the one at bar, the court may delegate the determination of the same to the Commissioners. The Commissioners found, after a viewing and examination of Alicia's estate, that the same cannot be divided without causing prejudice to the interests of the parties. This finding is further supported by the testimony of Apolonio Marasigan that the estate cannot be divided into smaller portions, since only certain portions of the land are suitable to agriculture, while others are not, due to the contours of the land and unavailability of water supply. The impracticality of physically dividing Alicia's estate becomes more apparent, considering that Hacienda Sta. Rita is composed of parcels and snippets of land located in two different municipalities, Pili and Minalabac, Camarines Sur. The actual area representing Alicia's 2/21 pro-indiviso shares in Hacienda Sta. Rita is 422,422.65 square meters, more or less. Each of Alicia's heirs is entitled to 1/7 share in her estate equivalent to 67,496.09 square meters or roughly seven hectares.[51] Cesar and his heirs are entitled only to his 1/7 share in the yet unidentified, unsegregated 2/21 pro-indiviso shares of Alicia in each of the 13 parcels of land that comprises Hacienda Sta. Rita. Dividing the parcels of land even further, each portion

allotted to Alicia's heirs, with a significantly reduced land area and widely scattered in two municipalities, would irrefragably diminish the value and use of each portion, as compared to keeping the entire estate intact. The correctness of the finding of the RTC and the Commissioners that dividing Alicia's estate would be prejudicial to the parties cannot be passed upon by the Court of Appeals in a petition for certiorari. Factual questions are not within the province of a petition for certiorari. There is a question of fact when the doubt arises as to the truth or falsity of the alleged facts. As to whether the court a quo decided the question wrongly is immaterial in a petition for certiorari. It is a legal presumption that findings of fact of a trial court carry great weight and are entitled to respect on appeal, absent any strong and cogent reason to the contrary, since it is in a better position to decide the question of credibility of witnesses.[52] The writ of certiorari issues for the correction of errors of jurisdiction only or grave abuse of discretion amounting to lack or excess of jurisdiction. The writ of certiorari cannot be legally used for any other purpose.[53] At most, the petition pertains to an error of judgment, and not of jurisdiction, for clearly under Section 5 of Rule 69, the question of whether a party's interest shall be prejudiced by the division of the real property is left to the determination and discretion of the Commissioners. Hence, it is totally unnecessary for this Court to address the issue raised by petitioners concerning the alleged unconstitutionality of Section 5, Rule 69 of the Rules of Court for having been issued beyond the constitutional limitation on the rule-making power of this Court. Basic is the principle that a constitutional issue may only be passed upon if essential to the decision of a case or controversy.[54] A purported constitutional issue raised by petitioners may only be resolved if essential to the decision of a case and controversy. Even if all the requisites for judicial review are present, this Court will not entertain a constitutional question unless it is the very lis mota[55] of the case or if the case can be disposed of on some other grounds, such as the application of a statute or general law. The present problem of partition by co-heirs/co-owners can be resolved without elevating their case to one of constitutionality. In the absence of evidence to the contrary, this Court can only presume that the proceedings in Special Civil Action No. P-77-97 before the RTC, including the recommendation made by the Commissioners, were fairly and regularly conducted, meaning that both the RTC and the appointed Commissioners had carefully reviewed, studied, and weighed the claims of all the parties. Petitioners' argument that the assignment of the property will not terminate the co-ownership

is specious, considering that partition, in general, is the separation, division, and ASSIGNMENT of a thing held in common by those to whom it may belong.[56] Inasmuch as the parties continued to manifest their desire to terminate their co-ownership, but the co-heirs/co-owners could not agree on which properties would be allotted to each of them, this Court finds that the Court of Appeals was correct in ruling that the RTC did not act with grave abuse of discretion amounting to lack or excess of jurisdiction when it approved the Commissioners' recommendation that the co-heirs/co-owners assign their shares to one of them in exchange for proper compensation. This Court has consistently held that one of the purposes for which courts are organized is to put an end to controversy in the determination of the respective rights of the contending parties. With the full knowledge that courts are not infallible, the litigants submit their respective claims for judgment, and they have a right at some time or another to have final judgment on which they can rely over a final disposition of the issue or issues submitted, and to know that there is an end to the litigation;[57] otherwise, there would be no end to legal processes.[58] Finally, petitioners raise before this Court the issue that the public auction sale of their shares is null and void; at the same time they allege deficiency in the bid price for their 1/7 share in Alicia's estate vis--vis the valuation of the same by the Commissioners. [59] This Court is already barred from ruling on the validity of the public auction sale. This Court's ruling dated 13 October 2004 in G.R. No. 164970 denying their petition for certiorari lays to rest petitioners' questioning of the Court of Appeals' Resolution dismissing their appeal therein of the issue of the validity of the public sale of their share in Alicia's estate. Such decision or order can no longer be disturbed or reopened no matter how erroneous it may have been.[60] Indeed, while it is understandable for petitioners to protect their rights to their portions of the estate, the correlative rights of the other co-owners/co-heirs must also be taken into consideration to balance the scales of justice. And, by finding the course of action, within the boundaries of law and jurisprudence, that is most beneficial and equitable for all of the parties, the courts' duty has been satisfactorily fulfilled. Thus, contrary to petitioners' averments, this Court finds that the Court of Appeals did not err in ruling that the RTC did not commit grave abuse of discretion amounting to lack or excess of jurisdiction in adopting and confirming the recommendations of the Commissioners. WHEREFORE, premises considered, the Petition for Review on Certiorari is hereby DENIED for

lack of merit, and the assailed Decision dated 31 July 2002 of the Court of Appeals in docket no. CA-G.R. SP No. 67529 is hereby AFFIRMED. Costs against petitioners. SO ORDERED.

G.R. No. 182248

December 18, 2008

EQUITABLE PCI BANKING CORPORATION,1 GEORGE L. GO, PATRICK D. GO, GENEVIEVE W.J. GO, FERDINAND MARTIN G. ROMUALDEZ, OSCAR P. LOPEZ-DEE, RENE J. BUENAVENTURA, GLORIA L. TAN-CLIMACO, ROGELIO S. CHUA, FEDERICO C. PASCUAL, LEOPOLDO S. VEROY, WILFRIDO V. VERGARA, EDILBERTO V. JAVIER, ANTHONY F. CONWAY, ROMULAD U. DY TANG, WALTER C. WESSMER, and ANTONIO N. COTOCO, petitioners, vs. RCBC CAPITAL CORPORATION, respondent. DECISION VELASCO, JR., J.: The Case This Petition for Review on Certiorari under Rule 45 seeks the reversal of the January 8, 2008 2 and March 17, 20083 Orders of the Regional Trial Court (RTC), Branch 148 in Makati City in SP Proc. Case No. 6046, entitled In the Matter of ICC Arbitration Ref. No. 13290/MS/JB/JEM Between RCBC Capital Corporation, (Claimant), and Equitable PCI Banking Corporation, Inc. et al., (Respondents). The assailed January 8, 2008 Order confirmed the Partial Award dated September 27, 20074 rendered by the International Chamber of Commerce-International Court of Arbitration (ICC-ICA) in Case No. 13290/MS/JB/JEM, entitled RCBC Capital Corporation (Philippines) v. Equitable PCI Bank, Inc. & Others (Philippines). The March 17, 2008 Order denied petitioners motion for reconsideration of the January 8, 2008 Order. The Facts On May 24, 2000, petitioners Equitable PCI Bank, Inc. (EPCIB) and the individual shareholders of Bankard, Inc., as sellers, and respondent RCBC Capital Corporation (RCBC), as buyer, executed a Share Purchase Agreement5 (SPA) for the purchase of petitioners interests in Bankard, representing 226,460,000 shares, for the price of PhP 1,786,769,400. To expedite the purchase, RCBC agreed to dispense with the conduct of a due diligence audit on the financial status of Bankard. Under the SPA, RCBC undertakes, on the date of contract execution, to deposit, as downpayment, 20% of the purchase price, or PhP 357,353,880, in an escrow account. The

escrowed amount, the SPA stated, should be released to petitioners on an agreed-upon release date and the balance of the purchase price shall be delivered to the share buyers upon the fulfillment of certain conditions agreed upon, in the form of a managers check. The other relevant provisions of the SPA are: Section 5. Sellers Representations and Warranties The SELLERS jointly and severally represent and warrant to the BUYER that: xxxx The Financial Condition of Bankard g. The audited financial statements of Bankard for the three (3) fiscal years ended December 31, 1997, 1998 and 1999, and the unaudited financial statements for the first quarter ended 31 March 2000, are fair and accurate, and complete in all material respects, and have been prepared in accordance with generally accepted accounting principles consistently followed throughout the period indicated and: i) the balance sheet of Bankard as of 31 December 1999, as prepared and certified by SGV & Co. ("SGV"), and the unaudited balance sheet for the first quarter ended 31 March 2000, present a fair and accurate statement as of those dates, of Bankards financial condition and of all its assets and liabilities, and is complete in all material respects; and ii) the statements of Bankards profit and loss accounts for the fiscal years 1996 to 1999, as prepared and certified by SGV, and the unaudited profit and loss accounts for the first quarter ended 31 March 2000, fairly and accurately present the results of the operations of Bankard for the periods indicated, and are complete in all material respects. h. Except as disclosed in the Disclosures, and except to the extent set forth or reserved in the audited financial statements of Bankard as of 31 December 1999 and its unaudited financial statements as of 31 March 2000, Bankard, as of such dates and up to 31 May 2000, had and shall have no liabilities, omissions or mistakes in its records which will have material adverse effect on the net worth or financial condition of Bankard to the extent of more than One Hundred Million Pesos (P100,000,000.00) in the aggregate. In the event such material adverse effect on the net worth or financial condition of Bankard exceeds One Hundred Million Pesos (P100,000,000.00), the Purchase Price shall be reduced in accordance with the following formula: Reduction in Purchase Price = X multiplied by 226,460,000

where Amount by which negative adjustment exceeds P100 Million -------------------------------------------(1.925) 338,000,000

X=

xxxx Section 7. Remedies for Breach of Warranties a. If any of the representations and warranties of any or all of the SELLERS or the BUYER (the "Defaulting Party") contained in Sections 5 and 6 shall be found to be untrue when made and/or as of the Closing Date, the other party, i.e., the BUYER if the Defaulting Party is any or all of the SELLERS and the SELLERS if the Defaulting Party is the BUYER (hereinafter referred to as the "Non-Defaulting Party") shall have the right to require the Defaulting Party, at the latters expense, to cure such breach, and/or seek damages, by providing notice or presenting a claim to the Defaulting Party, reasonably specifying therein the particulars of the breach. The foregoing remedies shall be available to the Non-Defaulting Party only if the demand therefor is presented in writing to the Defaulting Party within three (3) years from the Closing Date except that the remedy for a breach of the SELLERS representation and warrant in Section 5 (h) shall be available only if the demand therefor is presented to the Defaulting Party in writing together with schedules and to substantiate such demand, within six (6) months from the Closing Date.6 On June 2, 2000, RCBC deposited the stipulated downpayment amount in an escrow account after which it was given full management and operational control of Bankard. June 2, 2000 is also considered by the parties as the Closing Date referred to in the SPA. Thereafter, the parties executed an Amendment to Share Purchase Agreement (ASPA) dated September 19, 2000.7 Its paragraph 2(e) provided that: 2. Notwithstanding any provisions to the contrary in the Share Purchase Agreement and/or any agreement, instrument or document entered into or executed by the Parties in relation thereto (the "Related Agreements"), the Parties hereby agree that: xxxx e) Notwithstanding the provisions of Sec. 7 of the Share Purchase Agreement to the contrary, the remedy for a breach of the SELLERS representation and warranty in Section 5(h) of the Share Purchase Agreement shall be available if the demand therefor is presented to the SELLERS in writing together with schedules and data to substantiate such demand, on or before 31 December 2000. (Emphasis added.)

Sometime in September 2000, RCBC had Bankards accounts audited, creating for the purpose an audit team led by a certain Rubio, the Vice-President for Finance of RCBC at the time. Rubios conclusion was that the warranty, as contained in Section 5(h) of the SPA (simply Sec. 5[h] hereinafter), was correct. On December 28, 2000, RCBC paid the balance of the contract price. The corresponding deeds of sale for the shares in question were executed in January 2001. Thereafter, in a letter of May 5, 2003, RCBC informed petitioners of its having overpaid the purchase price of the subject shares, claiming that there was an overstatement of valuation of accounts amounting to PhP 478 million, resulting in the overpayment of over PhP 616 million. Thus, RCBC claimed that petitioners violated their warranty, as sellers, embodied in Sec. 5(g) of the SPA (Sec. 5[g] hereinafter). Following unsuccessful attempts at settlement, RCBC, in accordance with Sec. 10 of the SPA, filed a Request for Arbitration dated May 12, 20048 with the ICC-ICA. In the request, RCBC charged Bankard with deviating from, contravening and not following generally accepted accounting principles and practices in maintaining their books. Due to these improper accounting practices, RCBC alleged that both the audited and unaudited financial statements of Bankard prior to the stock purchase were far from fair and accurate and, hence, violated the representations and warranties of petitioners in the SPA. Per RCBC, its overpayment amounted to PhP 556 million. It thus prayed for the rescission of the SPA, restitution of the purchase price, payment of actual damages in the amount of PhP 573,132,110, legal interest on the purchase price until actual restitution, moral damages, and litigation and attorneys fees. As alternative to rescission and restitution, RCBC prayed for damages in the amount of at least PhP 809,796,092 plus legal interest. To the Request for Arbitration, petitioners filed an Answer dated July 28, 2004,9 denying RCBCs inculpatory averments and setting up the following affirmative allegations: the period for filing of the asserted claim had already lapsed by force of Sec. 7 of the SPA; RCBC is not entitled to rescission having had ample opportunity and reasonable time to file a claim against petitioners; RCBC is not entitled to its alternative prayer of damages, being guilty of laches and failing to set out the details of the breach as required under Sec. 7. Arbitration in the ICC-ICA proceeded after the formation of the arbitration tribunal consisting of retired Justice Santiago M. Kapunan, nominated by petitioners; Neil Kaplan, RCBCs nominee; and Sir Ian Barker, appointed by the ICC-ICA. After drawn out proceedings with each party alleging deviation and non-compliance by the other with arbitration rules, the tribunal, with Justice Kapunan dissenting, rendered a Partial Award dated September 27, 2007,10 the dispositive portion of which states: 15 AWARD AND DIRECTIONS

15.1 The Tribunal makes the following declarations by way of Partial Award: (a) The Claimants claim is not time-barred under the provisions of this SPA. (b) The Claimant is not estopped by its conduct or the equitable doctrine of laches from pursuing its claim. (c) As detailed in the Partial Award, the Claimant has established the following breaches by the Respondents of clause 5(g) of the SPA: i) the assets, revenue and net worth of Bankard were overstated by reason of its policy on and recognition of Late Payment Fees; ii) reported receivables were higher than their realizable values by reason of the bucketing method, thus overstating Bankards assets; and iii) the relevant Bankard statements were inadequate and misleading in that their disclosures caused readers to be misinformed about Bankards accounting policies on revenue and receivables. (d) Subject to proof of loss the Claimant is entitled to damages for the foregoing breaches. (e) The Claimant is not entitled to rescission of the SPA. (f) All other issues, including any issue relating to costs, will be dealt with in a further or final award. 15.2 A further Procedural Order will be necessary subsequent to the delivery of this Partial Award to deal with the determination of quantum and in particular, whether there should be an Expert appointed by the Tribunal under Article 20(4) of the ICC Rules to assist the Tribunal in this regard. 15.3 This Award is delivered by a majority of the Tribunal (Sir Ian Barker and Mr. Kaplan). Justice Kapunan is unable to agree with the majoritys conclusion on the claim of estoppel brought by the respondents. On the matter of prescription, the tribunal held that RCBCs claim is not time -barred, the claim properly falling under the contemplation of Sec. 5(g) and not Sec. 5(h). As such, the tribunal concluded, RCBCs claim was filed within the three (3)-year period under Sec. 5(g) and that the six (6)-month period under Sec. 5(h) did not apply.

The tribunal also exonerated RCBC from laches, the latter having sought relief within the three (3)-year period prescribed in the SPA. On the matter of estoppel sugge sted in petitioners answer, the tribunal stated in par. 10.27 of the Partial Award the following: 10.27 Clearly, there has to be both an admission or representation by (in this case) the Claimant [RCBC], plus reliance upon it by (in this case) the Respondents [herein petitioners]. The Tribunal cannot find as proved any admission/representation that the Claimant was abandoning a 5(g) claim, any reliance by the Respondents on an admission, and any detriment to the Respondents such as would entitle them to have the Claimant deprived of the benefit of clause 5(g). These aspects of the claim for estoppels are rejected.11 Notably, the tribunal considered the rescission of the SPA and ASPA as impracticable and "totally out of the question."12 In his Dissenting Opinion13 which he submitted to and which was received on September 24, 2007 by the ICC-ICA, Justice Kapunan stated the observation that RCBCs claim is time -barred, falling as such claim did under Sec. 5(h), which prescribes a comparatively shorter prescriptive period, not 5(g) as held by the majority of the tribunal, to wit: Claimant admits that the Claim is for recovery of P431 million on account of alleged "overvaluation of the net worth of Bankard," allegedly for "improper accounting practices" resulting in "its book value per share as of 31 December 1999 [being] overstated." Claimants witness, Dean Echanis asserts that "the inadequate provisioning for Bankards doubtful accounts result[ed] in an overstatement of its Decem ber 31, 1999 total assets and net worth of by [sic] least P418.2 million." In addition, Claimants demand letter addressed to the Respondents alleged that "we overpaid for the Shares to the extent of the impact of the said overstatement on the Book Value per share". These circumstances establish beyond dispute that the Claim is based on the alleged overstatement of the 1999 net worth of Bankard, which the parties relied on in setting the purchase price of the shares. Moreover, it is clear that there was an overstatement because of "improper accounting practices" which led Claimant to overpay for the shares. Ultimately, the Claim is one for recovery of overpayment in the purchase price of the shares. x x x As to the issue of estoppel, Justice Kapunan stated: Moreover, Mr. Rubios findings merely corroborated the disclosures made in the Information Memorandum that Claimant received from the Respondents prior to the

execution of the SPA. In this connection, I note that Bankards policy on provisioning and setting of allowances using the Bucketed Method and income recognition from AR/Principal, AR/Interest and AR/LPFs were disclosed in the Information Memorandum. Thus, these alleged improper accounting practices were known to the Claimant even prior to the execution of the SPA. Thus, when Claimant paid the balance of the purchase price, it did so with full knowledge of these accounting practices of Bankard that it now assails. By paying the balance of the purchase price without taking exception or objecting to the accounting practices disclosed through Mr. Rubio s review and the Information Memorandum, Claimant is deemed to have accepted such practices as correctly reporting the 1999 net worth. x x x xxxx As last point, I note that my colleagues invoke a principle that for estoppels to apply there must be positive indication that the right to sue was waived. I am of the view that there is no such principle under Philippine law. What is applicable is the holding in Knecht and in Coca- Cola that prior knowledge of an unfavorable fact is binding on the party who has such knowledge; "when the purchaser proceeds to make investigations by himself, and the vendor does nothing to prevent such investigation from being as complete as the former might wish, the purchaser cannot later allege that the vendor made false representations to him" (Cf. Songco v. Sellner, 37 Phil 254 citations omitted). Applied to this case, the Claimant cannot seek relief on the basis that when it paid the purchase price in December 2000, it was unaware that the accounting practices that went into the reporting of the 1999 net worth as amounting to P1,387,275,847 were not in conformity with GAAP [generally accepted accounting principles]. (Emphasis added.) On October 26, 2007, RCBC filed with the RTC a Motion to Confirm Partial Award. On the same day, petitioners countered with a Motion to Vacate the Partial Award. On November 9, 2007, petitioners again filed a Motion to Suspend and Inhibit Barker and Kaplan. On January 8, 2008, the RTC issued the first assailed order confirming the Partial Award and denying the adverted separate motions to vacate and to suspend and inhibit. From this order, petitioners sought reconsideration, but their motion was denied by the RTC in the equally assailed second order of March 17, 2008. From the assailed orders, petitioners came directly to this Court through this petition for review. The Issues

This petition seeks the review, reversal and setting aside of the orders Annexes A and B and, in lieu of them, it seeks judgment vacating the arbitrators liability award, Annex C, on these grounds: (a) The trial court acted contrary to law and judicial authority in refusing to vacate the arbitral award, notwithstanding it was rendered in plain disregard of the parties contract and applicable Philippine law, under which the claim in arbitration was indubitably time-barred. (b) The trial court acted contrary to law and judicial authority in refusing to vacate and in confirming the arbitral award, notwithstanding that the arbitrators had plainly and admittedly failed to accord petitioners due process by denying them a hearing on the basic factual matter upon which their liability is predicated. (c) The trial court committed grave error in confirming the arbitrators award, whic h held petitioners-sellers liable for an alleged improper recording of accounts, allegedly affecting the value of the shares they sold, notwithstanding that the respondent-buyer knew before contracting that the accounts were kept in the manner complained of, and in fact ratified and adopted the questioned accounting practice and policies. 14 The Courts Ruling The petition must be denied. On Procedural Misstep of Direct Appeal to This Court As earlier recited, the ICC-ICAs Partial Award dated September 27, 2007 was confirmed by the RTC in its first assailed order of January 8, 2008. Thereafter, the RTC, by order of March 17, 2008, denied petitioners motion for reconsideration. Therefrom, petitioners came directly to this Court on a petition for review under Rule 45 of the Rules of Court. This is a procedural miscue for petitioners who erroneously bypassed the Court of Appeals (CA) in pursuit of its appeal. While this procedural gaffe has not been raised by RCBC, still we would be remiss in not pointing out the proper mode of appeal from a decision of the RTC confirming, vacating, setting aside, modifying, or correcting an arbitral award. Rule 45 is not the remedy available to petitioners as the proper mode of appeal assailing the decision of the RTC confirming as arbitral award is an appeal before the CA pursuant to Sec. 46 of Republic Act No. (RA) 9285, otherwise known as the Alternative Dispute Resolution Act of 2004, or completely, An Act to Institutionalize the Use of an Alternative Dispute Resolution System in the Philippines and to Establish the Office for Alternative Dispute Resolution, and for other Purposes, promulgated on April 2, 2004 and became effective on April 28, 2004 after its publication on April 13, 2004.

In Korea Technologies Co., Ltd v. Lerma, we explained, inter alia, that the RTC decision of an assailed arbitral award is appealable to the CA and may further be appealed to this Court, thus: Sec. 46 of RA 9285 provides for an appeal before the CA as the remedy of an aggrieved party in cases where the RTC sets aside, rejects, vacates, modifies, or corrects an arbitral award, thus: SEC. 46. Appeal from Court Decision or Arbitral Awards.A decision of the Regional Trial Court confirming, vacating, setting aside, modifying or correcting an arbitral award may be appealed to the Court of Appeals in accordance with the rules and procedure to be promulgated by the Supreme Court. The losing party who appeals from the judgment of the court confirming an arbitral award shall be required by the appellate court to post a counterbond executed in favor of the prevailing party equal to the amount of the award in accordance with the rules to be promulgated by the Supreme Court. Thereafter, the CA decision may further be appealed or reviewed before this Court through a petition for review under Rule 45 of the Rules of Court.15 It is clear from the factual antecedents that RA 9285 applies to the instant case. This law was already effective at the time the arbitral proceedings were commenced by RCBC through a request for arbitration filed before the ICC-ICA on May 12, 2004. Besides, the assailed confirmation order of the RTC was issued on March 17, 2008. Thus, petitioners clearly took the wrong mode of appeal and the instant petition can be outright rejected and dismissed. Even if we entertain the petition, the outcome will be the same. The Court Will Not Overturn Unless It Was Made in Manifest Disregard of the Law an Arbitral Award

In Asset Privatization Trust v. Court of Appeals,16 the Court passed on similar issues as the ones tendered in the instant petition. In that case, the arbitration committee issued an arbitral award which the trial court, upon due proceedings, confirmed despite the opposition of the losing party. Motions for reconsideration by the losing party were denied. An appeal interposed by the losing party to the CA was denied due course. On appeal to this Court, we established the parameters by which an arbitral award may be set aside, to wit: As a rule, the award of an arbitrator cannot be set aside for mere errors of judgment either as to the law or as to the facts. Courts are without power to amend or overrule merely because of disagreement with matters of law or facts determined by the arbitrators. They will not review the findings of law and fact contained in an award, and will not undertake to substitute their judgment for that of the arbitrators, since any other rule would make an award the commencement, not the end, of litigation.

Errors of law and fact, or an erroneous decision of matters submitted to the judgment of the arbitrators, are insufficient to invalidate an award fairly and honestly made. Judicial review of an arbitration is, thus, more limited than judicial review of a trial. Nonetheless, the arbitrators awards is not absolute and without exceptions. The arbitrators cannot resolve issues beyond the scope of the submission agreement. The parties to such an agreement are bound by the arbitrators award only to the extent and in the manner prescribed by the contract and only if the award is rendered in conformity thereto. Thus, Sections 24 and 25 of the Arbitration Law provide grounds for vacating, rescinding or modifying an arbitration award. Where the conditions described in Articles 2038, 2039 and 2040 of the Civil Code applicable to compromises and arbitration are attendant, the arbitration award may also be annulled. xxxx Finally, it should be stressed that while a court is precluded from overturning an award for errors in determination of factual issues, nevertheless, if an examination of the record reveals no support whatever for the arbitrators determinations, their award must be vacated. In the same manner, an award must be vacated if it was made in "manifest disregard of the law."17 (Emphasis supplied.) Following Asset Privatization Trust, errors in law and fact would not generally justify the reversal of an arbitral award. A party asking for the vacation of an arbitral award must show that any of the grounds for vacating, rescinding, or modifying an award are present or that the arbitral award was made in manifest disregard of the law. Otherwise, the Court is duty-bound to uphold an arbitral award. The instant petition dwells on the alleged manifest disregard of the law by the ICC-ICA. The US case of Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Jaros18 expounded on the phrase "manifest disregard of the law" in the following wise: This court has emphasized that manifest disregard of the law is a very narrow standard of review. Anaconda Co. v. District Lodge No. 27, 693 F.2d 35 (6th Cir.1982). A mere error in interpretation or application of the law is insufficient. Anaconda, 693 F.2d at 37-38. Rather, the decision must fly in the face of clearly established legal precedent. When faced with questions of law, an arbitration panel does not act in manifest disregard of the law unless (1) the applicable legal principle is clearly defined and not subject to reasonable debate; and (2) the arbitrators refused to heed that legal principle. Thus, to justify the vacation of an arbitral award on account of "manifest disregard of the law," the arbiters findings must clearly and unequivocally violate an established legal precedent. Anything less would not suffice.

In the present case, petitioners, in a bid to establish that the arbitral award was issued in manifest disregard of the law, allege that the Partial Award violated the principles of prescription, due process, and estoppel. A review of petitioners arguments would, however, show that their arguments are bereft of merit. Thus, the Partial Award dated September 27, 2007 cannot be vacated. RCBCs Claim Is Not Time-Barred Petitioners argue that RCBCs claim under Sec. 5(g) is based on overvaluation of Bankards revenues, assets, and net worth, hence, for price reduction falling under Sec. 5(h), in which case it was belatedly filed, for RCBC presented the claim to petitioners on May 5, 2003, when the period for presenting it under Sec. 5(h) expired on December 31, 2000. As a counterpoint, RCBC asserts that its claim clearly comes under Sec. 5(g) in relation to Sec. 7 which thus gave it three (3) years from the closing date of June 2, 2000, or until June 1, 2003, within which to make its claim. RCBC contends having acted within the required period, having presented its claimdemand on May 5, 2003. To make clear the issue at hand, we highlight the pertinent portions of Secs. 5(g), 5(h), and 7 bearing on what petitioners warranted relative to the financial condition of Bankard and the remedies available to RCBC in case of breach of warranty: g. The audited financial statements of Bankard for the three (3) fiscal years ended December 31, 1997, 1998 and 1999, and the unaudited financial statements for the first quarter ended 31 March 2000, are fair and accurate, and complete in all material respects, and have been prepared in accordance with generally accepted accounting principles consistently followed throughout the period indicated and: i) the balance sheet of Bankard as of 31 December 1999, as prepared and certified by SGV & Co. ("SGV"), and the unaudited balance sheet for the first quarter ended 31 March 2000, present a fair and accurate statement as of those dates, of Bankards financial condition and of all its assets and liabilities, and is complete in all material respects; and ii) the statements of Bankards profit and loss accounts for the fiscal years 1996 to 1999, as prepared and certified by SGV, and the unaudited profit and loss accounts for the first quarter ended 31 March 2000, fairly and accurately present the results of the operations of Bankard for the periods indicated, and are complete in all material respects. h. Except as disclosed in the Disclosures, and except to the extent set forth or reserved in the audited financial statements of Bankard as of 31 December 1999 and its unaudited financial statements for the first quarter ended 31 March 2000, Bankard, as of such dates and up to 31 May 2000, had and shall have no liabilities, omissions or mistakes in its records which will have a material adverse effect on the net worth or

financial condition of Bankard to the extent of more than One Hundred Million Pesos (P 100,000,000.00) in the aggregate. In the event such material adverse effect on the net worth or financial condition of Bankard exceeds One Hundred Million Pesos (P 100,000,000.00), the Purchase Price shall be reduced in accordance with the following formula: xxxx Section 7. Remedies for Breach of Warranties If any of the representations and warranties of any or all of the SELLERS or the BUYER (the "Defaulting Party") contained in Sections 5 and 6 shall be found to be untrue when made and/or as of the Closing Date, the other party, i.e., the BUYER if the Defaulting is any of the SELLERS and the SELLERS if the Defaulting Party is the BUYER (hereinafter referred to as the "Non-Defaulting Party") shall have the right to require the Defaulting Party, at the latters expense, to cure such breach, and/or seek damages, by providing notice or presenting a claim to the Defaulting Party, reasonably specifying therein the particulars of the breach. The foregoing remedies shall be available to the NonDefaulting Party only if the demand therefor is presented in writing to the Defaulting Party within three (3) years from the Closing Date, except that the remedy for a breach of the SELLERS representation and warranty in Section 5 (h) shall be available only if the demand therefor is presented to the Defaulting Party in writing together with schedules and data to substantiate such demand, within six (6) months from the Closing Date. (Emphasis supplied.) Before we address the issue put forward by petitioners, there is a necessity to determine the nature and application of the reliefs provided under Sec. 5(g) and Sec. 5(h) in conjunction with Sec. 7, thus: (1) The relief under Sec. 5(h) is specifically for price reduction as said section explicitly states that the "Purchase Price shall be reduced in accordance with the following formula x x x." In addition, Sec. 7 gives the aggrieved party the right to ask damages based on the stipulation that the non-defaulting party "shall have the right to require the Defaulting Party, at the latters expense, to cure such breach and/or seek damages." On the other hand, the remedy under Sec. 5(g) in conjunction with Sec. 7 can include specific performance, damages, and other reliefs excluding price reduction. (2) Sec. 5(g) warranty covers the audited financial statements (AFS) for the three (3) years ending December 31, 1997 to 1999 and the unaudited financial statements (UFS) for the first quarter ending March 31, 2000. On the other hand, the Sec. 5(h) warranty refers only to the AFS for the year ending December 31, 1999 and the UFS up to May 31, 2000. It is undenied that Sec. 5(h) refers to price reduction as it covers "only the most up-to-date audited and unaudited financial statements upon which the price must have been based."19

(3) Under Sec. 5(h), the responsibility of petitioners for its warranty shall exclude the disclosures and reservations made in AFS of Bankard as of December 31, 1999 and its UFS up to May 31, 2000. No such exclusions were made under Sec. 5(g) with respect to the warranty of petitioners in the AFS and UFS of Bankard. (4) Sec. 5(h) gives relief only if there is material adverse effect in the net worth in excess of PhP 100 million and it provides a formula for price reduction.20 On the other hand, Sec. 5(g) can be the basis for remedies like specific performance, damages, and other reliefs, except price reduction, even if the overvaluation is less or above PhP 100 million and there is no formula for computation of damages. (5) Under Sec. 7, the aggrieved party shall present its written demand to the defaulting party within three (3) years from closing date. Under Sec. 5(h), the written demand shall be presented within six (6) months from closing date. In accordance with par. 2(c) of the ASPA, the deadline to file the demand under Sec. 5(h) was extended to December 31, 2000. From the above determination, it becomes clear that the aggrieved party is entitled to two (2) separate alternative remedies under Secs. 5 and 7 of the SPA, thus: 1. A claim for price reduction under Sec. 5(h) and/or damages based on the breach of warranty by Bankard on the absence of liabilities, omissions and mistakes on the financial statements as of 31 December 1999 and the UFS as of 31 May 2000, provided that the material adverse effect on the net worth exceeds PhP 100M and the written demand is presented within six (6) months from closing date (extended to 31 December 2000); and 2. An action to cure the breach like specific performance and/or damages under Sec. 5(g) based on Bankards breach of warranty involving its AFS for the three (3) fiscal years ending 31 December 1997, 1998, and 1999 and the UFS for the first quarter ending 31 March 2000 provided that the written demand shall be presented within three (3) years from closing date. Has RCBC the option to choose between Sec. 5(g) or Sec. 5(h)? The answer is yes. Sec. 5 and Sec. 7 are clear that it is discretionary on the aggrieved parties to avail themselves of any remedy mentioned above. They may choose one and dispense with the other. Of course, the relief for price reduction under Sec. 5(h) will have to conform to the prerequisites and time frame of six (6) months; otherwise, it is waived. Preliminarily, petitioners basic posture that RCBCs claim is for the recovery of overpayment is specious. The records show that in its Request for Arbitration dated May 12, 2004, RCBC prayed for the rescission of the SPA, restitution of the whole purchase price, and damages not for reduction of price or for the return of any overpayment. Even in its May 5, 2000 letter,21 RCBC did not ask for the recovery of any overpayment or reduction of price, merely stating in it that

the accounts of Bankard, as reflected in its AFS for 1999, were overstated which, necessarily, resulted in an overpayment situation. RCBC was emphatic and unequivocal that petitioners violated their warranty covered by Sec. 5(g) of the SPA. It is thus evident that RCBC did not avail itself of the option under Sec. 5(h), i.e., for price reduction or the return of any overpayment arising from the overvaluation of Bankards financial condition. Clearly, RCBC invoked Sec. 5(g) to claim damages from petitioners which is one of the alternative reliefs granted under Sec. 7 in addition to rescission and restitution of purchase price. Petitioners do not deny that RCBC formally filed its claim under Sec. 5(g) which is anchored on the material overstatement or overvaluation of Bankards revenues, assets, and net wort h and, hence, the overstatement of the purchase price. They, however, assert that such claim for overpayment is actually a claim under Sec. 5(h) of the SPA for price reduction which it forfeited after December 31, 2000. We cannot sustain petitioners position. It cannot be disputed that an overstatement or overvaluation of Bankards financial condition as of closing date translates into a misrepresentation not only of the accuracy and truthfulness of the financial statements under Sec. 5(g), but also as to Bankards actual net worth mentioned in Sec. 5(h). Overvaluation presupposes mistakes in the entries in the financial statements and amounts to a breach of petitioners representations and warranties under Sec. 5. Consequently, such error in the financial statements would impact on the figure representing the net worth of Bankard as of closing date. An overvaluation means that the financial condition of Bankard as of closing date, i.e., June 2, 2000, is overstated, a situation that will definitely result in a breach of EPCIBs representations and warranties. A scrutiny of Sec. 5(g) and Sec. 5(h) in relation to Sec. 7 of the SPA would indicate the following remedies available to RCBC should it be discovered, as of closing date, that there is overvaluation which will constitute breach of the warranty clause under either Sec. 5(g) or (h), to wit: (1) An overvaluation of Bankards actual financial condition as of closing date taints the veracity and accuracy of the AFS for 1997, 1998, and 1999 and the UFS for the first quarter of 2000 and is an actionable breach of petitioners warranties under Sec. 5(g). (2) An overvaluation of Bankards financial condition as of May 31, 2000, encompassing the warranted financial condition as of December 31, 1999 through the AFS for 1999 and as of March 31, 2000 through the UFS for the first quarter of 2000, is a breach of petitioners representations and warranties under Sec. 5(h). Thus, RCBC has two distinct alternative remedies in case of an overvaluation of Bankards financial condition. It may invoke Sec. 5(h) when the conditions of the threshold aggregate

overvaluation and the claim made within the six-month time-bar are present. In the alternative, it may invoke Sec. 5(g) when it finds that a claim for "curing the breach" and/or damages will be more advantageous to its interests provided it is filed within three (3) years from closing date. Since it has two remedies, RCBC may opt to exercise either one. Of course, the exercise of either one will preclude the other. Moreover, the language employed in Sec. 5(g) and Sec. 5(h) is clear and bereft of any ambiguity. The SPAs stipulations reveal that the non -use or waiver of Sec. 5(h) does not preclude RCBC from availing itself of the second relief under Sec. 5(g). Article 1370 of the Civil Code is explicit that "if terms of a contract are clear and leave no doubt upon the intention of the contracting parties the literal meaning of its stipulations shall control." Since the terms of a contract have the force of law between the parties,22 then the parties must respect and strictly conform to it. Lastly, it is a long held cardinal rule that when the terms of an agreement are reduced to writing, it is deemed to contain all the terms agreed upon and no evidence of such terms can be admitted other than the contents of the agreement itself. 23 Since the SPA is unambiguous, and petitioners failed to adduce evidence to the contrary, then they are legally bound to comply with it. Petitioners agreed ultimately to the stipulation that: Each of the representations and warranties of the SELLERS is deemed to be a separate representation and warranty, and the BUYER has placed complete reliance thereon in agreeing to the Purchase Price and in entering into this Agreement. The representations and warranties of the SELLERS shall be correct as of the date of this Agreement and as of the Closing Date with the same force and effect as though such representations and warranties had been made as of the Closing Date.24 (Emphasis supplied.) The Court sustains the finding in the Partial Award that Sec. 5(g) of the SPA is a free standing warranty and not constricted by Sec. 5(h) of the said agreement. Upon the foregoing premises and in the light of the undisputed facts on record, RC BCs claim for rescission of the SPA and damages due to overvaluation of Bankards accounts was properly for a breach of the warranty under Sec. 5(g) and was not time-barred. To repeat, RCBC presented its written claim on May 5, 2003, or a little less than a month before closing date, well within the three (3)-year prescriptive period provided under Sec. 7 for the exercise of the right provided under Sec. 5(g). Petitioners bemoan the fact that "the arbitrators liability award (a) disregarded the 6 -month contractual limitation for RCBCs overprice claim, and [b] substituted in its place the 3 -year limitation under the contract for other claims,"25 adopting in that regard the interpretation of the SPA made by arbitral tribunal member, retired Justice Kapunan, in his Dissenting Opinion, in which he asserted:

Ultimately, the Claim is one for recovery of overpayment in the purchase price of the shares. And it is in this context, that I respectfully submit that Section 5(h) and not Section 5(g), applies to the present controversy.26 xxxx True, without Section 5(h), the Claim for price recovery would fall under Section 5(g). The recovery of the pecuniary loss of the Claimant in the form of the excess price paid would be in the nature of a claim for actual damages by way of compensation. In that situation, all the accounts in the 1999 financial statements would be the subject of the warranty in Section 5(g). However, since the parties explicitly included Section 5(h) in their SPA, which assures the Claimant that there were no "omissions or mistakes in the records" that would misstate the 1999 net worth account, I am left with no other conclusion but that the accuracy of the net worth was the subject of the warranty in Section 5(h), while the accuracy or correctness of the other accounts that did not bear on, or affect Bankards net worth, were guaranteed by Section 5(g). xxxx This manner of reconciling the two provisions is consistent with the principle in Rule 130, Section 12 of the Rules of Court that "when a general and a particular provision are inconsistent, the latter is paramount to the former [so] a particular intent will control a general one that is inconsistent with it." This is also consistent with existing doctrines on statutory construction, the application of which is illustrated in the case of Commissioner of Customs vs. Court of Tax Appeals, GR No. L-41861, dated March 23, 1987 x x x. xxxx The Claim is for recovery of the excess price by way of actual damages .27 x x x (Emphasis supplied.) Justice Kapunan noted that without Sec. 5(h), RCBCs claim would fall under Sec. 5(g), impliedly admitting that both provisions could very well cover RCBCs claim, except that Sec. 5(h) excludes the situation contemplated in it from the general terms of Sec. 5(g). Such view is incorrect. While it is true that Sec. 5(h), as couched, is a warranty on the accuracy of the Bankards net worth while Sec. 5(g), as also couched, is a warranty on the veracity, accuracy, and completeness of the AFS in all material respects as prepared in accordance with generally accepted accounting principles consistently followed throughout the period audited, yet both

warranties boil down to the same thing and stem from the same accounts as summarized in the AFS. Since the net worth is the balance of Bankards assets less its liabilities, it necessarily includes all the accounts under the AFS. In short, there are no accounts in the AFS that do not bear on the net worth of Bankard. Moreover, as earlier elucidated, any overvaluation of Bankards net worth is necessarily a misrepresentation of the veracity, accuracy, and completeness of the AFS and also a breach of the warranty under Sec. 5(g). Thus, the subject of the warranty in Sec. 5(h) is also covered by the warranty in Sec. 5(g), and Sec. 5(h) cannot exclude such breach from the ambit of Sec. 5(g). There is no need to rely on Sec. 12, Rule 130 of the Rules of Court for both Sec. 5(g) and Sec. 5(h) as alternative remedies are of equal footing and one need not categorize one section as a general provision and the other a particular provision. More importantly, a scrutiny of the four corners of the SPA does not explicitly reveal any stipulation nor even impliedly that the parties intended to limit the scope of the warranty in Sec. 5(g) or gave priority to Sec. 5(h) over Sec. 5(g). The arbitral tribunal did not find any legal basis in the SPA that Sec. 5(h) "somehow cuts down" the scope of Sec. 5(g), thus: 9.10 In the opinion of the Tribunal, there is nothing in the wording used in the SPA to give priority to one warranty over the other. There is nothing in the wording used to indicate that the parties intended to limit the scope of the warranty in 5(g) . If it be contended that, on a true construction of the two warranties, 5(h) somehow cuts down the scope of 5(g), the Tribunal can find no justification for such conclusion on the wording used. Furthermore, the Tribunal is of the view that very clear words would be needed to cut down the scope of the 5(g) warranty.28 The Court upholds the conclusion of the tribunal and rules that the claim of RCBC under Sec. 5(g) is not time-barred. Petitioners Were Not Denied Due Process Petitioners impute on RCBC the act of creating summaries of the accounts of Bankard which "in turn were used by its experts to conclude that Bankard improperly recorded its receivables and committed material deviations from GAAP requirements."29 Later, petitioners would assert that "the arbitrators partial award admitted and used the Summaries as evidence, and held on the basis of the information contained in them that petitioners were in breach of their warranty in GAAP compliance." To petitioners, the ICC-ICAs use of such summaries but without presenting the source documents violates their right to due process. Pressing the point, petitioners had moved, but to no avail, for the exclusion of the said summaries. Petitioners allege that they had reserved the right to cross-examine the witnesses of RCBC who testified on the summaries, pending the resolution of their motion to exclude. But, according to them, they were effectively denied the

right to cross-examine RCBCs witnesses when the ICC-ICA admitted the summaries of RCBC as evidence. Petitioners position is bereft of merit. Anent the use but non-presentation of the source documents as the jumping board for a claim of denial of due process, petitioners cite Compania Maritima v. Allied Free Workers Union.30 It may be stated, however, that such case is not on all fours with the instant case and, therefore, cannot be applied here considering that it does not involve an administrative body exercising quasi-judicial function but rather the regular court. In a catena of cases, we have ruled that "[t]he essence of due process is the opportunity to be heard. What the law prohibits is not the absence of previous notice but the absolute absence thereof and the lack of opportunity to be heard."31 We also explained in Lastimoso v. Asayo that "[d]ue process in an administrative context does not require trial type proceedings similar to those in courts of justice. Where an opportunity to be heard either through oral arguments or through pleadings is accorded, there is no denial of procedural due process."32 Were petitioners afforded the opportunity to refute the summaries and pieces of evidence submitted by RCBC which became the bases of the experts opinion? The answer is in the affirmative. We recall the events that culminated in the issuance of the challenged Partial Award, thus: On May 17, 2004, the ICC-ICA received the Request for Arbitration dated May 12, 2004 from RCBC seeking rescission of the SPA and restitution of all the amounts paid by RCBC to petitioners, with actual and moral damages, interest, and costs of suit. On August 8, 2004, petitioners filed an Answer to the Request for Arbitration dated July 28, 2004, setting up a counterclaim for USD 300,000 for actual and exemplary damages. RCBC filed its Reply33 dated August 31, 2004 to petitioners Answer to the Request for Arbitration. On October 4, 2004, the parties entered into the Terms of Reference. 34 At the same time, the chairperson of the arbitral tribunal issued a provisional timetable35 for the arbitration. On October 25, 2004, as previously agreed upon in the meeting on October 4, 2004, petitioners filed a Motion to Dismiss36 while RCBC filed a "Claimants Position Paper (Re: [Petitioners] Assertion that RCBC CAPITAL CORPORATIONs Present Claim Is Time Barred)."37

Then, the tribunal issued Procedural Order No. 1 dated January 12, 2005, 38 denying the motion to dismiss and setting the initial hearing of the case on April 11, 2005. In a letter dated February 9, 2005,39 petitioners requested that the tribunal direct RCBC to produce certain documents. At the same time, petitioners sought the postponement of the hearing on April 11, 2005 to March 21, 2005, in light of their own request. On February 11, 2005, petitioners received RCBCs brief of evidence and supporting documentation in accordance with the provisional timetable.40 In the brief of evidence, RCBC provided summaries of the accounts of Bankard, which petitioners now question. Later, in a letter dated February 14, 2005,41 petitioners complained to the tribunal with regard to their lack of access to RCBCs external auditor. Petitioners sought an audit by an accounting firm of the records of Bankard with respect to the claims of RCBC. By virtue of such requests, petitioners also sought a rescheduling of the provisional timetable, despite their earlier assurance to the tribunal that if they received the documents that they requested on February 9, 2005 on or before February 21, 2005, they would abide by the provisional timetable. Thereafter, the tribunal issued Procedural Order No. 2 dated February 18, 2005,42 in which it allowed the discovery and inspection of the documents requested by petitioners that were also scheduled on February 18, 2005. The request for an audit of Bankards accounts was denied without prejudice to the conduct of such audit during the course of the hearings. Consequently, the tribunal amended the provisional timetable, extending the deadline for petitioners to file their brief of evidence and documents to March 21, 2005. The date of the initial hearing, however, remained on April 11, 2005. On February 18, 2005, petitioners were furnished the documents that they requested RCBC. 43 The parties also agreed to meet again on February 23, 2005 to provide petitioners with a "walkthrough" of Bankards Statistical Analysis System and to provide petitioners with a soft copy of all of Bankards cardholders.44 During the February 23, 2005 meeting, EPCIBs counsels/representatives were accompanied to the Bankards Credit-MIS Group. There, Bankards representative, Amor Lazaro, described and explained to petitioners representatives the steps involved in procuring and translating raw data on customer transactions. Lazaro explained that Bankard captures cardholder information and transactions through encoding or electronic data capture. Thereafter, such data are transmitted to its main credit card administration system. Such raw data are then sent to Bankards Information Technology Group. Using a proprietary software called SAS, the raw d ata is then converted into SAS files which may be viewed, handled, and converted into Excel files for reporting purposes. During the walk-through, petitioners representatives asked questions which were answered in detail by Lazaro. At the same time, another Bankard representative, Felix L. Sincoegue, accompanied two auditors/representatives of petitioners to examine the journal vouchers and supporting

documents of Bankard consisting of several boxes. The auditors randomly sifted through the boxes which they had earlier requested to be inspected. In addition, petitioners were furnished with an electronic copy of the details of all cardholders, including relevant data for aging of receivables for the years 2000 to 2003, as well as data containing details of written-off accounts from 1999 to March 2000 contained in compact discs.45 On March 4, 2005, petitioners sent a letter46 to the tribunal requesting for a postponement of the April 11, 2005 hearing of the case. Petitioners claim that they could not confirm the summaries prepared by RCBC, considering that RCBC allegedly did not cooperate in providing data that would facilitate their verification. Petitioners specifically mentioned the following data: (1) list of names of cardholders whose accounts are sources of data gathered or calculated in the summaries; (2) references to the basic cardholder documents from which such data were collected; and (3) access to the underlying cardholder documents at a time and under conditions mutually convenient to the parties. As regards the compact discs of information provided to petitioners, it is claimed that such information could not be accessed as the software necessary for the handling of the data could not be made immediately available to them. In Procedural Order No. 3 dated March 11 2005,47 the initial hearing was moved to June 13 to 16, 2005, considering that petitioners failed to pay the advance on costs of the tribunal. On March 23, 2005, RCBC paid the balance of the advance on costs.48 On April 22, 2005, petitioners sent the tribunal a letter,49 requesting for the postponement of the hearing scheduled on June 13 to 16, 2005 on the ground that they could not submit their witness statements due to the volume of data that they acquired from RCBC. In a letter dated April 25, 2005,50 petitioners demanded from RCBC that they be allowed to examine the journal vouchers earlier made available to them during the February 23, 2005 meeting. This demand was answered by RCBC in a letter dated April 26, 2005,51 stating that such demand was being denied by virtue of Procedural Order No. 2, in which it was ruled that further requests for discovery would not be made except with leave of the chairperson of the tribunal. In Procedural Order No. 4,52 the tribunal granted petitioners request for the postponement of the hearing on June 13, 2005 and rescheduled it to November 21, 2005 in light of the pending motions filed by EPCIB with the RTC in Makati City. On July 29, 2005, the parties held a meeting wherein it was agreed that petitioners would be provided with hard and soft copies of the inventory of the journal vouchers earlier presented to its representatives, while making the journal vouchers available to petitioners for two weeks for examination and photocopying.53

On September 2, 2005, petitioners applied for the postponement of the November 21, 2005 hearing due to the following: (1) petitioners had earlier filed a motion dated August 11, 2005 with the RTC, in which the issue of whether the non-Filipino members of the tribunal were illegally practicing law in the Philippines by hearing their case, which was still pending; and (2) the gathering and processing of the data and documents made available by RCBC would require 26 weeks.54 Such application was denied by the tribunal in Procedural Order No. 5 dated September 16, 2005.55 On October 21, 2005, the tribunal issued Procedural Order No. 6, 56 postponing the November 21, 2005 hearing by virtue of an order issued by the RTC in Makati City directing the tribunal to reset the hearing for April 21 and 24, 2006. Thereafter, in a letter dated January 18, 2006,57 petitioners wrote the tribunal requesting that RCBC be directed to: (1) provide petitioners with information identifying the journal vouchers and other supporting documents that RCBC used to arrive at the figures set out in the summaries and other relevant information necessary to enable them to reconstruct and/or otherwise understand the figures or amounts in each summary; and (2) submit to petitioners the requested pieces of information as soon as these are or have become available, or in any case not later than five days. In response to such letter, RCBC addressed a letter dated January 31, 2006 58 to the tribunal claiming that the pieces of information that petitioners requested are already known to petitioners considering that RCBC merely maintained the systems that they inherited when it bought Bankard from petitioners. RCBC added that the documents that EPCIB originally transmitted to it when RCBC bought Bankard were all being made available to petitioners; thus, any missing supporting documents from these files were never transmitted to them in the first place. Later, petitioners sent to the tribunal a letter dated February 10, 2006,59 asking that it direct RCBC to provide petitioners with the supporting documents that RCBC mentioned in its letter dated January 31, 2006. Petitioners wrote that should RCBC fail to present such documents, RCBCs summaries should be excluded from the records. In a letter dated March 10, 2006,60 petitioners requested that they be given an additional period of at least 47 days within which to submit their evidence-in-chief with the corresponding request for the cancellation of the hearing on April 24, 2006. Petitioners submit that should such request be denied, RCBCs summaries should be excluded from the records. On April 6, 2006, petitioners filed their arbitration briefs and witness statements. By way of reply, on April 17, 2006, RCBC submitted Volumes IV and V of its exhibits and Volume II of its evidence-in-chief.61 On April 18, 2006, petitioners requested the tribunal that they be allowed to file rejoinder briefs, or otherwise exclude RCBCs reply brief and witness statements.62 In this request,

petitioners also requested that the hearing set for April 24, 2006 be moved. These requests were denied. Consequently, on April 24 to 27, 2006, the arbitral tribunal conducted hearings on the case. 63 On December 4, 2006, petitioners submitted rejoinder affidavits, raising new issues for the first time, to which RCBC submitted Volume III of its evidence-in-chief by way of a reply. On January 16, 2007, both parties simultaneously submitted their memoranda. On January 26, 2007, both parties simultaneously filed their reply to the others memorandum.64 Thus, on September 27, 2007, the Partial Award was rendered by the Tribunal. Later, petitioners moved to vacate the said award before the RTC. Such motion was denied by the trial court in the first assailed order dated January 8, 2008. Petitioners then moved for a reconsideration of such order, but their motion was also denied in the second assailed order dated March 17, 2008. The foregoing events unequivocally demonstrate ample opportunity for petitioners to verify and examine RCBCs summaries, accounting records, and reports. The pleadings reveal that RCBC granted petitioners requests for production of documents and accounting records. More so, they had more than three (3) years to prepare for their defense after RCBCs submission of its brief of evidence. Finally, it must be emphasized that petitioners had the opportunity to appeal the Partial Award to the RTC, which they in fact did. Later, petitioners even moved for the reconsideration of the denial of their appeal. Having been able to appeal and move for a reconsideration of the assailed rulings, petitioners cannot claim a denial of due process. 65 Petitioners right to due process was not breached. As regards petitioners claim that its right to due process was violated when they were allegedly denied the right to cross-examine RCBCs witnesses, their claim is also bereft of merit. Sec. 15 of RA 876 or the Arbitration Law provides that: Section 15. Hearing by arbitrators. Arbitrators may, at the commencement of the hearing, ask both parties for brief statements of the issues in controversy and/or an agreed statement of facts. Thereafter the parties may offer such evidence as they desire, and shall produce such additional evidence as the arbitrators shall require or deem necessary to an understanding and determination of the dispute. The arbitrators shall be the sole judge of the relevancy and materiality of the evidence offered or produced, and shall not be bound to conform to the Rules of Court pertaining to evidence. Arbitrators shall receive as exhibits in evidence any document which the parties may wish to submit and the exhibits shall be properly identified at the time of submission. All exhibits shall remain in the custody of the Clerk of Court during the

course of the arbitration and shall be returned to the parties at the time the award is made. The arbitrators may make an ocular inspection of any matter or premises which are in dispute, but such inspection shall be made only in the presence of all parties to the arbitration, unless any party who shall have received notice thereof fails to appear, in which event such inspection shall be made in the absence of such party. (Emphasis supplied.) The well-settled rule is that administrative agencies exercising quasi-judicial powers shall not be fettered by the rigid technicalities of procedure, albeit they are, at all times required, to adhere to the basic concepts of fair play. The Court wrote in CMP Federal Security Agency, Inc. v. NLRC: While administrative tribunals exercising quasi-judicial powers, like the NLRC and Labor Arbiters, are free from the rigidity of certain procedural requirements, they are nonetheless bound by law and practice to observe the fundamental and essential requirements of due process. The standard of due process that must be met in administrative tribunals allows a certain degree of latitude as long as fairness is not ignored. Hence, it is not legally objectionable, for being violative of due process, for the Labor Arbiter to resolve a case based solely on the position papers, affidavits or documentary evidence submitted by the parties. The affidavits of witnesses in such case may take the place of their direct testimony.66 Of the same tenor is our holding in Quiambao v. Court of Appeals: In resolving administrative cases, conduct of full-blown trial is not indispensable to dispense justice to the parties. The requirement of notice and hearing does not connote full adversarial proceedings. Submission of position papers may be sufficient for as long as the parties thereto are given the opportunity to be heard. In administrative proceedings, the essence of due process is simply an opportunity to be heard, or an opportunity to explain ones side or opportunity to seek a recons ideration of the action or ruling complained of. This constitutional mandate is deemed satisfied if a person is granted an opportunity to seek reconsideration of an action or a ruling . It does not require trial-type proceedings similar to those in the courts of justice. Where opportunity to be heard either through oral arguments or through pleadings is accorded, there is no denial of procedural due process.67 (Emphasis supplied.) Citing Vertudes v. Buenaflor, petitioners also cry denial of due process when they were allegedly denied the right to cross-examine the witnesses presented by RCBC. It is true that in Vertudes, we stated: "The right of a party to confront and cross-examine opposing witnesses in a judicial litigation, be it criminal or civil in nature, or in proceedings before administrative tribunals with quasi-judicial powers, is a fundamental right which is part of due process."68 It is, however, equally true that:

[T]he right is a personal one which may be waived expressly or impliedly by conduct amounting to a renunciation of the right of cross-examination. Thus, where a party has had the opportunity to cross-examine a witness but failed to avail himself of it, he necessarily forfeits the right to cross-examine and the testimony given on direct examination of the witness will be received or allowed to remain in the record.69 (Emphasis supplied.) We also held in one case: However, the right has always been understood as requiring not necessarily an actual cross-examination but merely an opportunity to exercise the right to cross-examine if desired. What is proscribed by statutory norm and jurisprudential precept is the absence of the opportunity to cross-examine. The right is a personal one and may be waived expressly or impliedly. There is an implied waiver when the party was given the opportunity to confront and cross-examine an opposing witness but failed to take advantage of it for reasons attributable to himself alone. If by his actuations, the accused lost his opportunity to cross-examine wholly or in part the witnesses against him, his right to cross-examine is impliedly waived.70 (Emphasis supplied.) And later in Velez v. De Vera, the Court En Banc expounded on the above rulings, adding that in administrative proceedings, cross-examination is not indispensable, thus: Due process of law in administrative cases is not identical with "judicial process" for a trial in court is not always essential to due process. While a day in court is a matter of right in judicial proceedings, it is otherwise in administrative proceedings since they rest upon different principles. The due process clause guarantees no particular form of procedure and its requirements are not technical. Thus, in certain proceedings of administrative character, the right to a notice or hearing [is] not essential to due process of law. The constitutional requirement of due process is met by a fair hearing before a regularly established administrative agency or tribunal. It is not essential that hearings be had before the making of a determination if thereafter, there is available trial and tribunal before which all objections and defenses to the making of such determination may be raised and considered. One adequate hearing is all that due process requires. What is required for "hearing" may differ as the functions of the administrative bodies differ. The right to cross-examine is not an indispensable aspect of due process.71 x x x (Emphasis supplied.) Clearly, the right to cross-examine a witness, although a fundamental right of a party, may be waived. Petitioners themselves admit having had the opportunity to cross-examine RCBCs witnesses during the hearings before the tribunal, but declined to do so by reserving such right at a later time. Having had the opportunity to cross-examine RCBCs witnesses, petitioners were not denied their right to due process.

RCBC Is Not Estopped from Questioning the Financial Condition of Bankard On estoppel, petitioners contend that RCBC already knew the recording of the Bankard accounts before it paid the balance of the purchase price and could no longer challenge the financial statements of Bankard. RCBC, they claim, had full control of the operations of Bankard since June 2, 2000 and RCBCs audit team reviewed the accounts in September 2000. Thus, RCBC is now precluded from denying the fairness and accuracy of said accounts since it did not seek price reduction under Sec. 5(h). Lastly, they asseverate that RCBC continued with Bankards accounting policies and practices and found them to conform to the generally accepted accounting principles, contrary to RCBCs allegations. It also bears stating that in his dissent, retired Justice Kapunan, an arbitral tribunal member, argued that Bankards accounting practices were disclosed in the information memorandum provided to RCBC; hence, RCBC was supposed to know such accounting practices and to have accepted their propriety even before the execution of the SPA. He then argued that when it paid the purchase price on December 29, 2000, RCBC could no longer claim that the accounting practices that went into the reporting of the 1999 AFS of Bankard were not in accord with generally accepted accounting principles. He pointed out that RCBC was bound by the audit conducted by a certain Rubio prior to the full payment of the purchase price of Bankard. Anchored on these statements by Justice Kapunan, petitioners conclude that RCBC is estopped from claiming that the former violated their warranties under the SPA. Petitioners contention is not meritorious. Art. 1431 of the Civil Code, on the subject of estoppel, provides: "Through estoppel an admission or representation is rendered conclusive upon the person making it, and cannot be denied or disproved as against the person relying thereon." The doctrine of estoppel is based upon the grounds of public policy, fair dealing, good faith, and justice; and its purpose is to forbid one to speak against ones own acts, representations, or commitments to the injury of one to whom they were directed and who reasonably relied on them.72 We explained the principle of estoppel in Philippine Savings Bank v. Chowking Food Corporation: x x x The equitable doctrine of estoppel was explained by this Court in Caltex (Philippines), Inc. v. Court of Appeals: Under the doctrine of estoppel, an admission or representation is rendered conclusive upon the person making it, and cannot be denied or disproved as against the person relying thereon. A party may not go back on his own acts and representations to the prejudice of the other party who relied upon them. In the

law of evidence, whenever a party has, by his own declaration, act, or omission, intentionally and deliberately led another to believe a particular thing true, to act upon such belief, he cannot, in any litigation arising out of such declaration, act, or omission, be permitted to falsify it. The principle received further elaboration in Maneclang v. Baun: In estoppel by pais, as related to the party sought to be estopped, it is necessary that there be a concurrence of the following requisites: (a) conduct amounting to false representation or concealment of material facts or at least calculated to convey the impression that the facts are otherwise than, and inconsistent with, those which the party subsequently attempts to assert; (b) intent, or at least expectation that this conduct shall be acted upon, or at least influenced by the other party; and (c) knowledge, actual or constructive of the actual facts. Estoppel may vary somewhat in definition, but all authorities agree that a party invoking the doctrine must have been misled to ones prejudice . That is the final and, in reality, most important of the elements of equitable estoppel. It is this element that is lacking here.73 (Emphasis supplied.) The elements of estoppel pertaining to the party estopped are: (1) conduct which amounts to a false representation or concealment of material facts, or, at least, which calculated to convey the impression that the facts are otherwise than, and inconsistent with, those which the party subsequently attempts to assert; (2) intention, or at least expectation, that such conduct shall be acted upon by the other party; and (3) knowledge, actual or constructive, of the actual facts.74 In the case at bar, the first element of estoppel in relation to the party sought to be estopped is not present. Petitioners claim that RCBC misrepresented itself when RCBC made it appear that they considered petitioners to have sufficiently complied with its warranties under Sec. 5(g) and 5(h), in relation to Sec. 7 of the SPA. Petitioners position is that "RCBC was aware of the manner in which the Bankard accounts were recorded, well before it consummated the SPA by taking delivery of the shares and paying the outstanding 80% balance of the contract price." 75 Petitioners, therefore, theorize that in this case, the first element of estoppel in relation to the party sought to be estopped is that RCBC made a false representation that it considered Bankards accounts to be in order and, thus, RCBC abandoned any claim under Sec. 5(g) and 5(h) by its inaction. Such contention is incorrect. It must be emphasized that it was only after a second audit that RCBC presented its claim to petitioners for violation of Sec. 5(g), within the three (3)-year period prescribed. In other words,

RCBC, prior to such second audit, did not have full and thorough knowledge of the correctness of Bankards accounts, in relation to Sec. 5(g). RCBC, therefore, cou ld not have misrepresented itself considering that it was still in the process of verifying the warranties covered under Sec. 5(g). Considering that there must be a concurrence of the elements of estoppel for it to arise, on this ground alone such claim is already negated. As will be shown, however, all the other elements of estoppel are likewise absent in the case at bar. As to the second element, in order to establish estoppel, RCBC must have intended that petitioners would act upon its actions. This element is also missing. RCBC by its actions did not mislead petitioners into believing that it waived any claim for violation of a warranty. The periods under Sec. 5(g) and 5(h) were still available to RCBC. The element that petitioners relied on the acts and conduct of RCBC is absent. The Court finds that there was no reliance on the part of petitioners on the acts of RCBC that would lead them to believe that the RCBC will forego the filing of a claim under Sec. 5(g). The allegation that RCBC knew that the Bankard accounts did not comply with generally accepted accounting principles before payment and, hence, it cannot question the financial statements of Bankard is meritless. Precisely, the SPA explicitly provides that claims for violation of the warranties under Sec. 5(g) can still be filed within three (3) years from the closing date. Petitioners contention that RCBC had full control of Bankard operations after payment of the price and that an audit undertaken by the Rubio team did not find anything wrong with the accounts could not have plausibly misled petitioners into believing that RCBC will waive its right to file a claim under Sec. 5(g). After all, the period to file a claim under Sec. 5(g) is three (3) years under Sec. 7, much longer than the six (6)-month period under Sec. 5(h). Petitioners are fully aware that the warranties under Sec. 5(g) (1997 up to March 2000) are of a wider scope than that of Sec. 5(h) (AFS of 1999 and UFS up to May 31, 2000), necessitating a longer audit period than the six (6)month period under Sec. 5(h). The third element of estoppel in relation to the party sought to be estopped is also absent considering that, as stated, RCBC was still in the process of verifying the correctness of Bankards accounts prior to presenting its claim of overvaluation to petitioners. RCBC, therefore, had no sufficient knowledge of the correctness of Bankards accounts. On another issue, RCBC could not have immediately changed the Bankard accounting practices until it had conducted a more extensive and thorough audit of Bankards voluminous records and transactions to uncover any irregularities. That would be the only logical explanation why Bankards alleged irregular practices were maintained for more than two (2) years from closing date. The fact that RCBC continued with the audit of Bankards AFS and records after the termination of the Rubio audit can only send the clear message to petitioners that RCBC is still entertaining the possibility of filing a claim under Sec. 5(g). It cannot then be said that petitioners reliance on RCBCs acts after full payment of the price could have misled them into believing that no more claim will be presented by RCBC. The Arbitral Tribunal explained in detail why estoppel is not present in the case at bar, thus:

10.18 The audit exercise conducted by Mr. Legaspi and Mr. Rubio was clearly not one comprehensive enough to have discovered the problems later unearthed by Dr. Laya and Dean Ledesma. x x x 10.19 Although the powers of the TC [Transition Committee] may have been widely expressed in the view of Mr. Rogelio Chua, then in charge of Bankard x x x the TC conducted meetings only to get updated on the status and progress of Bankards operations. Commercially, one would expect that an unpaid vendor expecting to receive 80% of a large purchase price would not be receptive to a purchaser making vast policy changes in the operation of the business until the purchaser has paid up its money. It is more likely that, until the settlement date, there was a practice of maintaining the status quo at Bankard. 10.20 But neither the Claimant nor the TC did anything, in the Tribunals view, which would have given the Respondents the impression that they were being relieved over the next three years of susceptibility to a claim under clause 5(g). Maybe the TC could have been more proactive in commissioning further or more in-depth audits but it was not. It did not have to be. It is commercially unlikely that it have been done so, with the necessary degree of attention to detail, within the relatively short time between the appointment of the TC and the ultimate settlement date of the purchase a period of some three months. An interim arrangement was obviously sensible to enable the Claimant and its staff to become familiar with the practices and procedures of Bankard. 10.21 The core consideration weighing with the Tribunal in assessing these claims for estoppel is that the SPA allowed two types of claim; one within six months under 5(h) and one within three years under 5(g). The Tribunal has already held the present claim is not barred by clause 5(h). It must therefore have been within the reasonable contemplation of the parties that a 5(g) claim could surface within the three-year period and that it could be somewhat differently assessed than the claim under 5(h). The Tribunal cannot find estoppel by conduct either from the formation of the TC or from the limited auditing exercise done by Mr. Rubio and Mr. Legaspi. The onus proving estoppel is on the Respondents and it has not been discharged. 10.22 If the parties had wished the avenues of relief for misrepresentation afforded to the Claimant to have been restricted to a claim under Clause 5(h), then they could have said so. The special audit may have provided an answer to any claim based on clause 5(h) but it cannot do so in respect of a claim based on Clause 5(g). Clause 5(g) imposed a positive obligation on the Respondents from which they cannot be excused, simply by reason of either the formation and conduct of the TC or of the limited audit. 10.23 The three-year limitation period obviously contemplated that it could take some time to ascertain whether there had been a breach of the GAAP standards, etc. Such was the case. A six-month limitation period under Clause 5(h), in contrast, presaged a somewhat less stringent enquiry of the kind carried out by Mr. Rubio and Mr. Legaspi.

10.24 Clause 2(3) of the Amendment to the SPA strengthens the conclusion that the parties were concerned only with a 5(h) claim during the TCs reign. The focus of the audit however intense it was conducted by Mr. Rubio and Mr. Legaspi, was on establishing possible liability under that section and thus as a possible reduction in the price to be paid on settlement. 10.25 The fact that the purchase price was paid over in full without any deduction in terms of clause 5(h) is not a bar to the Claimant bringing a claim under 5(g) within the three-year period. The fact that payment was made can be, as the Tribunal has held, a barrier to a claim for rescission and restitution ad inegrum. A claim for estoppel needs a finding of representation by words of conduct or a shared presumption that a right would not be relied upon. The party relying on estoppel has to show reliance to its detriment or that, otherwise, it would be unconscionable to resile from the provision. 10.26 Article 1431 of the Civil Code states: "Through estoppel an admission or representation is rendered conclusive upon the person making it, and cannot be denied or disproved as against the person relying thereon." 10.27 Clearly, there has to both an admission or representation by (in this case) the Claimant, plus reliance upon it by (in this case) the Respondents. The Tribunal cannot find as proved any admission/representation that the Claimant was abandoning a 5(g) claim, any reliance by Respondents on an admission, and any detriment to the Respondents such as would entitle them to have the Claimant deprived of the benefit of clause 5(g). These aspects of the claim of estoppel are rejected. xxxx 10.42 The Tribunal is not the appropriate forum for deciding whether there have been any regulatory or ethical infractions by Bankard and/or the Claimant in setting the buy back price. It has no bearing on whether the Claimant must be considered as having waived its right to claim against the Respondents. 10.43 In the Tribunals view, neither any infraction by Bankard in failing to advise the Central Bank of the experts findings, nor a failure to put a tag on the accounts nor to have said something to the shareholders in the buy-back exercise operates as a "technical knock-out" of Claimants claim. 10.44 The Tribunal notes that the conciliation process mandated by the SPA took most of 2003 and this may explain a part of the delay in commencing arbitral proceedings. 10.45 Whatever the status of Mr. Rubios and Mr. Legaspis enquiries in late 2000, the Claimant was quite entitled to commission subsequent reports from Dr. Laya and Dr.

Echanis and, on the basis of those reports, make a timeous claim under clause 5(g) of the SPA. 10.46 In the Tribunals view, therefore, there is no merit in Respondents various submissions that the Claimant is debarred from prosecuting its claims on the grounds of estoppel. There is just no proof of the necessary representation to the Respondent, nor any detriment to the Respondent proved. The grounds of delay and laches are not substantiated. In summary, the tribunal properly ruled that petitioners failed to prove that the formation of the Transition Committee and the conduct of the audit by Rubio and Legaspi were admissions or representations by RCBC that it would not pursue a claim under Sec. 5(g) and that petitioners relied on such representation to their detriment. We agree with the findings of the tribunal that estoppel is not present in the situation at bar. Additionally, petitioners claim that in Knecht v. Court of Appeals76 and Coca-Cola Bottlers Philippines, Inc. v. Court of Appeals (Coca-Cola),77 this Court ruled that the absence of the element of reliance by a party on the representation of another does not negate the principle of estoppel. Those cases are, however, not on all fours with and cannot be applied to this case. In Knecht, the buyer had the opportunity of knowing the conditions of the land he was buying early on in the transaction, but proceeded with the sale anyway. According to the Court, the buyer was estopped from claiming that the vendor made a false representation as to the condition of the land. This is not true in the instant case. RCBC did not conduct a due diligence audit in relation to Sec.5(g) prior to the sale due to petitioners express representations and warranties. The examination conducted by RCBC, through Rubio, after the execution of the SPA on June 2, 2000, was confined to finding any breach under Sec. 5(h) for a possible reduction of the purchase price prior to the payment of its balance on December 31, 2000. Further, the parties clearly agreed under Sec. 7 of the SPA to a three (3)-year period from closing date within which to present a claim for damages for violation of the warranties under the SPA. Hence, Knecht is not a precedent to the case at bar. So is Coca-Cola. As lessee, Coca-Cola Bottlers was well aware of the nature and situation of the land relative to its intended use prior to the signing of the contract. Its subsequent assertion that the land was not suited for the purpose it was leased was, therefore, cast aside for being unmeritorious. Such circumstance does not obtain in the instant case. There was no prior due diligence audit conducted by RCBC, it having relied, as earlier stated, on the warranties of petitioners with regard to the financial condition of Bankard under Sec. 5(g). As such, Sec. 5(g) guaranteed RCBC that it could file a claim for damages for any mistakes in the AFS and UFS of Bankard. Clearly, Coca-Cola also cannot be applied to the instant case. It becomes evident from all of the foregoing findings that the ICC-ICA is not guilty of any manifest disregard of the law on estoppel. As shown above, the findings of the ICC-ICA in the

Partial Award are well-supported in law and grounded on facts. The Partial Award must be upheld. We close this disposition with the observation that a member of the three-person arbitration panel was selected by petitioners, while another was respondents choice. The respective interests of the parties, therefore, are very much safeguarded in the arbitration proceedings. Any suggestion, therefore, on the partiality of the arbitration tribunal has to be dismissed. WHEREFORE, the instant petition is hereby DENIED. The assailed January 8, 2008 and March 17, 2008 Orders of the RTC, Branch 148 in Makati City are hereby AFFIRMED. SO ORDERED.