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Civil Procedure Cases EN BANC [G.R. No. 129742.

September 16, 1998]


TERESITA G. FABIAN petitioner, vs. HON. ANIANO A. DESIERTO, in his capacity as ombudsman; HON. JESUS F. GUERRERO, in his capacity as Deputy Ombudsman for Luzon; and NESTOR V. AGUSTIN respondents. DECISION REGALADO, J: Petitioner has appealed to us by certiorari under Rule 45 of the Rules of Court from the "Joint Order" issued by public respondents on June 18, 1997 in OMB-Adm. Case No. 0-95-0411 which granted the motion for reconsideration of and absolved private respondents from administrative charges for inter alia grave misconduct committed by him as then Assistant Regional Director, Region IV-A, Department of Public Works and Highways (DPWH). I It appears from the statement and counter-statement of facts of the parties that petitioner Teresita G. Fabian was the major stockholder and president of PROMAT Construction Development Corporation (PROMAT) which was engaged in the construction business. Private respondents Nestor V. Agustin was the incumbent District Engineering District (FMED) when he allegedly committed the offenses for which he was administratively charged in the Office in the office of the Ombudsman. Promat participated in the bidding for government construction project including those under the FMED, and private respondent, reportedly taking advantage of his official position, inveigled petitioner into an amorous relationship. Their affair lasted for some time, in the course of which private respondents gifted PROMAT with public works contracts and interceded for it in problems concerning the same in his office. Later, misunderstanding and unpleasant incidents developed between the parties and when petitioner tried to terminate their relationship, private respondent refused and resisted her attempts to do so to the extent of employing acts of harassment, intimidation and threats. She eventually filed the aforementioned administrative case against him in a letter-complaint dated July 24, 1995. The said complaint sought the dismissal of private respondent for violation of Section 19, Republic Act No. 6770 (Ombudsman Act of 1989) and Section 36 of Presidential Decree No. 807 (Civil Service Decree), with an ancillary prayer for his preventive suspension. For purposes of this case, the charges referred to may be subsumed under the category of oppression, misconduct, and disgraceful or immoral conduct. On January 31, 1996, Graft Investigator Eduardo R. Benitez issued a resolution finding private respondents guilty of grave misconduct and ordering his dismissal from the service with forfeiture of all benefits under the law. His resolution bore the approval of Director Napoleon Baldrias and Assistant Ombudsman Abelardo Aportadera of their office. Herein respondent Ombudsman, in an Order dated February 26, 1996, approved the aforesaid resolution with modifications, by finding private respondent guilty of misconduct and meting out the penalty of suspension without pay for one year. After private respondent moved for reconsideration, respondent Ombudsman

discovered that the former's new counsel had been his "classmate and close associate" hence he inhibited himself. The case was transferred to respondent Deputy Ombudsman Jesus F. Guerrero who, in the now challenged Joint Order of June 18, 1997, set aside the February 26, 1997 Order of respondent Ombudsman and exonerated private respondents from the administrative charges. II In the present appeal, petitioner argues that Section 27 of Republic Act No. 6770 (Ombudsman Act of 1989)i[1] pertinently provides that In all administrative diciplinary cases, orders, directives or decisions of the Office of the Ombudsman may be appealed to the Supreme Court by filing a petition for certiorari within ten (10) days from receipt of the written notice of the order, directive or decision or denial of the motion for reconsideration in accordance with Rule 45 of the Rules of Court. (Emphasis supplied) However, she points out that under Section 7, Rule III of Administrative Order No. 07 (Rules of Procedure of the office of the Ombudsman),ii[2] when a respondent is absolved of the charges in an administrative proceeding decision of the ombudsman is final and unappealable. She accordingly submits that the office of the ombudsman has no authority under the law to restrict, in the manner provided in its aforesaid Rules, the right of appeal allowed by Republic Act No. 6770, nor to limit the power of review of this Court. Because of the aforecited provision in those Rules of Procedure, she claims that she found it "necessary to take an alternative recourse under Rule 65 of the Rules of Court, because of the doubt it creates on the availability of appeals under Rule 45 of the Rules of Court. Respondents filed their respective comments and rejoined that the Office of the Ombudsman is empowered by the Constitution and the law to promulgate its own rules of procedure. Section 13(8), Article XI of the 1987 Constitution provides, among others, that the Office of the Ombudsman can "(p)romulgate its rules of procedure and exercise such other powers or perform such functions or duties as may be provided by law." Republic Act No. 6770 duly implements the Constitutional mandate with these relevant provisions: Sec. 14. Restrictions. - x x x No court shall hear any appeal or application for remedy against the decision or findings of the Ombudsman except the Supreme Court on pure question on law. xxx Sec. 18. Rules of Procedure. - (1) The Office of the Ombudsman shall promulgate its own rules of procedure for the effective exercise or performance of its powers, functions, and duties. xxx Sec. 23. Formal Investigation. - (1) Administrative investigations by the Office of the Ombudsman shall be in accordance with its rules of procedure and consistent with the due process. x x x xxx Sec. 27. Effectivity and Finality of Decisions. - All provisionary orders at the Office of the Ombudsman are immediately effective and executory. A motion for reconsideration of any order, directive or decision of the Office of the Ombudsman must be filed within five (5) days after receipt of written notice shall be entertained only on any of the following grounds:

xxx Findings of fact by the Office of the Ombudsman when supported by substantial evidence are conclusive. Any order, directive or decision imposing the penalty of public censure or reprimand, suspension of not more than one month salary shall be final and unappealable. In all administrative disciplinary cases, orders, directives or decisions of the Office of the Ombudsman may be appealed to the Supreme Court by filing a petition for certiorari within ten (10) days from receipt of the written notice of the order, directive or decision or denial of the motion for reconsideration in accordance with Rule 45 of the Rules of Court. The above rules may be amended or modified by the Office of the Ombudsman as the interest of justice may require. Respondents consequently contend that, on the foregoing constitutional and statutory authority, petitioner cannot assail the validity of the rules of procedure formulated by the Office of the Ombudsman governing the conduct of proceeding before it, including those with respect to the availabity or non-avalability of appeal in administrative cases. Such as Section 7, Rule III of Administrative Order No.07. Respondents also question the propriety of petitioner's proposition that, although she definitely prefaced her petition by categorizing the same as "an appeal by certiorari under Rule 45 of the Rules of Court," she makes the aforequoted ambivalent statement which in effect asks that, should the remedy under Rule 45 be unavailable, her petition be treated in the alternative as an original action for certiorari under Rule 65. The parties thereafter engage in a discussion of the differences between a petition for review on certiorari under Rule 45 and a special civil action of certiorari under Rule 65. Ultimately, they also attempt to review and rationalize the decision of this Court applying Section 27 of Republic Act No. 6770 vis--vis Section 7, Rule III of Administrative Order No. 07. As correctly pointed out by public respondents, Ocampo IV vs. Ombudsman, et al.iii[3] and Young vs. Office of the Ombudsman, et al.iv[4] were original actions for certiorari under Rule 65. Yabut vs. Office of the Ombudsman, et al.v[5] was commenced by a petition for review on certiorari under Rule 45. Then came Cruz, Jr. vs. People, et al.,vi[6] Olivas vs. Office of the Ombudsman, et al., vii[7] Olivarez vs. Sandiganbayan, et al.,viii[8] and Jao, et al. vs. Vasquez,ix[9] which were for certiorari, prohibition and/or mandamus under Rule 65. Alba vs. Nitorreda, et al.x[10] was initiated by a pleading unlikely denominated as an "Appeal/Petition for Certiorari and/or Prohibition," with a prayer for ancillary remedies, and ultimately followed by Constantino vs. Hon. Ombudsman Aniano Desierto, et al.xi[11] which was a special civil action for certiorari. Considering, however the view that this Court now takes of the case at bar and the issues therein which will shortly be explained, it refrains from preemptively resolving the controverted points raised by the parties on the nature and propriety of application of the writ of certiorari when used as a mode of appeal or as the basis of a special original action, and whether or not they may be resorted to concurrently or alternatively, obvious though the answers thereto appear to be. Besides, some seemingly obiter statements in Yabuts and Alba could bear reexamination and clarification. Hence, we will merely observe and lay down the rule at this juncture that Section 27 of Republic Act No. 6770 is involved only whenever an appeal by certiorari under Rule 45 is taken from a decision in an administrative diciplinary action. It cannot be taken into account where an original action for certiorari under Rule 65 is resorted to as a remedy for judicial review, such as from an incident in a criminal action. III After respondents' separate comments had been filed, the Court was intrigued by the fact, which does appear to have been seriously considered before, that the administrative liability of a public official could fall under the

jurisdiction of both the Civil Service Commission and the Office of the Ombudsman. Thus, the offenses imputed to herein private respondent were based on both Section 19 of Republic Act. No. 6770 and Section 36 of Presidential Decree No. 807. Yet, pursuant to the amendment of section 9, Batas Pambansa Blg. 129 by Republic Act No. 7902, all adjudications by Civil Service Commission in administrative disciplinary cases were made appealable to the Court of Appeals effective March 18, 1995, while those of the Office of the Ombudsman are appealable to this Court. It could thus be possible that in the same administrative case involving two respondents, the proceedings against one could eventually have been elevated to the Court of Appeals, while the other may have found its way to the Ombudsman from which it is sought to be brought to this Court. Yet systematic and efficient case management would dictate the consolidation of those cases in the Court of Appeals, both for expediency and to avoid possible conflicting decisions. Then there is the consideration that Section 30, Article VI of the 1987 Constitution provides that "(n)o law shall be passed increasing the appellate indiction of the Supreme Court as provided in this Constitution without its advice and consent," and that Republic Act No. 6770, with its challenged Section 27, took effect on November 17, 1989, obviously in spite of that constitutional grounds must be raised by a party to the case, neither of whom did so in this case, but that is not an inflexible rule, as we shall explain. Since the constitution is intended fort the observance of the judiciary and other departments of the government and the judges are sworn to support its provisions, the courts are not at liberty to overlook or disregard its commands or countenance evasions thereof. When it is clear that a statute trangresses the authority vested in a legislative body, it is the duty of the courts to declare that the constitution, and not the statute, governs in a case before them for judgement.xii[12] Thus, while courts will not ordinarily pass upon constitutional questions which are not raised in the pleadings,xiii[13] the rule has been recognized to admit of certain exceptions. It does not preclude a court from inquiring into its own jurisdiction or compel it to enter a judgement that it lacks jurisdiction to enter. If a statute on which a court's jurisdiction in a proceeding depends is unconstitutional, the court has no jurisdiction in the proceeding, and since it may determine whether or not it has jurisdiction, it necessarily follows that it may inquire into the constitutionality of the statute.xiv[14] Constitutional question, not raised in the regular and orderly procedure in the trial are ordinarily rejected unless the jurisdiction of the court below or that of the appellate court is involved in which case it may be raised at any time or on the court's own motion.xv[15] The Court ex mero motu may take cognizance of lack of jurisdiction at any point in the case where the fact is developed.xvi[16] The court has a clearly recognized right to determine its own jurisdiction in any proceeding.xvii[17] The foregoing authorities notwithstanding, the Court believed that the parties hereto should be further heard on this constitutional question. Correspondingly, the following resolution was issued on May 14, 1998, the material parts stating as follows: The Court observes that the present petition, from the very allegations thereof, is "an appeal by certiorari under Rule 45 of the Rules of Court from the 'Joint Order (Re: Motion for Reconsideration)' issued in OMB-Adm. Case No. 0-95-0411, entitled 'Teresita G. Fabian vs. Engr. Nestor V. Agustin, Asst. Regional Director, Region IV-A, EDSA, Quezon City,' which absolved the latter from the administrative charges for grave misconduct, among other." It is further averred therein that the present appeal to this Court is allowed under Section 27 of the Ombudsman Act of 1987 (R.A. No. 6770) and, pursuant thereto, the Office of the Ombudsman issued its Rules of Procedure, Section 7 whereof is assailed by petitioner in this proceeding. It will be recalled that R.A. No. 6770 was enacted on November 17, 1989, with Section 27 thereof pertinently providing that all administrative diciplinary

cases, orders, directives or decisions of the Office of the Ombudsman may be appealed to this Court in accordance with Rule 45 of the Rules of Court. The Court notes, however, that neither the petition nor the two comments thereon took into account or discussed the validity of the aforestated Section 27 of R.A. No. 8770 in light of the provisions of Section 30, Article VI of the 1987 Constitution that "(n)o law shall be passed increasing the appellate jurisdiction of the Supreme Court as provided in this Constitution without its advise and consent." The Court also invites the attention of the parties to its relevant ruling in First Lepanto Ceramics, Inc. vs. The Court of Appeals , et al. (G.R. No. 110571, October 7, 1994, 237 SCRA 519) and the provisions of its former Circular No. 1-95,as now substantially reproduced in Rule 43 of the 1997 revision of the Rules of Civil Procedure. In view of the fact that the appellate jurisdiction of the Court is invoked and involved and in this case, and the foregoing legal consideration appear to impugn the constitutionality and validity of the grant of said appellate jurisdiction to it, the Court deems it necessary that the parties be heard thereon and the issue be first resolved before conducting further proceedings in this appellate review. ACCORDINGLY, the Court Resolved to require the parties to Submit their position and arguments on the matter subject of this resolution by filing their corresponding pleadings within ten (10) days from notice hereof. IV The records do not show that the Office of the Solicitor General has complied with such requirement, hence the Court dispenses with any submission it should have presented. On the other hand, petitioner espouses the theory that the provision in Section 27 of Republic Act No. 6770 which authorizes an appeal by certiorari to this Court of the aforementioned adjudications of the Ombudsman is not violative of Section 30, Article VI of the Constitution. She claims that what is proscribed is the passage of law "increasing" the appellate jurisdiction of this Court "as provided in this Constitution," and such appellate jurisdiction includes "all cases in which only an error or question of law is involved." Since Section 5(2)(e), Article VIII of the Constitution authorizes this Court to review, revise, reverse, modify, or affirm on appeal or certiorari the aforesaid final judgement or orders "as the law or the Rules of Court may provide," said Section 27 does not increase this Court may provide," said section 27 does not increase this Court's appellate jurisdiction since, by providing that the mode of appeal shall be by petition for certiorari under Rule 45, then what may be raised therein are only questions of law of which this Court already has of which this Court already has jurisdiction. We are not impressed by this discourse. It overlooks the fact that by jurisprudential developments over the years, this Court has allowed appeals by certiorari under Rule 45 in a substantial number of cases and instances even if questions of fact are directly involved and have to be resolved by the appellate court.xviii[18] Also, the very provision cited by petitioner specifies that the appellate jurisdiction of this Court contemplated therein is to be exercised over "final judgements and orders of lower courts," that is, the courts composing the integrated judicial system. It does not include the quasi-judicial bodies or agencies, hence whenever the legislature intends that the decisions or resolutions of the quasi-judicial agency shall be reviewable by the Supreme Court or the Court of Appeals, a specific provision to that effect is included in the law creating that quasi-judicial agency and, for that matter, any special statutory court. No such provision on appellate procedure is required for the regular courts of the integrated judicial system because they are what are referred to and already provided for in Section 5, Article VIII of the Constitution. Apropos to the foregoing, and as correctly observed by private respondent, the revised Rules of Civil Procedurexix[19] preclude appeals from quasi-judicial agencies to the Supreme Court via a petition for review on certiorari under Rule 45. In the 1997 Rules of Civil Procedure, Section 1 Rule 45, on "Appeal by Certiorari to the Supreme Court," explicitly states:

SECTION 1 . Filing of petition with Supreme Court. - A person desiring to appeal by certiorari from a judgement or final order or Resolution of the Court of Appeals, the Sandiganbayan, the Regional Trial Court or other court whenever authorized by law, may file with the Supreme Court a verified petition for review on certiorari. The petition shall raise only question of law which must be distinctly set forth. (Italics ours). This differs from the former Rule 45 of the 1964 Rules of Court which made mention only of the Court of Appeals, and had to be adopted in statutes creating and providing for appeals from certain administrative or quasi-judicial agencies, whenever the purpose was to restrict the scope of the appeal to questions of law. That intended limitation on appellate review, as we have just discussed, was not fully subserved by recourse to the former Rule 45 but, then, at that time there was no uniform rule on appeals from quasi-judicial agencies. Under the present Rule 45, appeals may be brought through a petition for review on certiorari but only from judgments and final orders of the courts enumerated in Section 1 thereof. Appeals from judgments and final orders of quasi-judicial agenciesxx[20] are now required to be brought to the Court of Appeals on a verified petition for review, under the requirements and conditions in Rule 43 which was precisely formulated and adopted to provide for a uniform rule of appellate procedure for quasi-judicial agencies .xxi[21] It is suggested, however, that the provisions of Rule 43 should apply only to "ordinary" quasi-judicial agencies, but not to the Office of the Ombudsman which is a "high constitutional body." We see no reason for this distinction for, if hierarchical rank should be a criterion, that proposition thereby disregards the fact that Rule 43 even includes the Office of the President and the Civil Service Commission, although the latter is even an independent constitutional commission, unlike the Office of the Ombudsman which is a constitutionallymandated but statutorily created body. Regarding the misgiving that the review of the decision of the Office of the Ombudsman by the Court of Appeals would cover questions of law, of fact or of both, we do not perceive that as an objectionable feature. After all, factual controversies are usually involved in administrative disciplinary actions, just like those coming from the Civil Service, Commission, and the Court of Appeals as a trier of fact is better prepared than this Court to resolve the same. On the other hand, we cannot have this situation covered by Rule 45 since it now applies only to appeals from the regular courts. Neither can we place it under Rule 65 since the review therein is limited to jurisdictional questions.* The submission that because this Court has taken cognizance of cases involving Section 27 of Republic Act No. 6770, that fact may be viewed as "acquiescence" or "acceptance" by it of the appellate jurisdiction contemplated in said Section 27, is unfortunately too tenuous. The jurisdiction of a court is not of acquiescence as a matter of fact but an issue of conferment as a matter of law. Besides, we have already discussed the cases referred to, including the inaccuracies of some statements therein, and we have pointed out the instances when Rule 45 is involved, hence covered by Section 27 of Republic Act No. 6770 now under discussion, and when that provision would not apply if it is a judicial review under Rule 65. Private respondent invokes the rule that courts generally avoid having to decide a constitutional question, especially when the case can be decided on other grounds. As a general proposition that is correct. Here, however, there is an actual case susceptible of judicial determination. Also, the constitutional question, at the instance of this Court, was raised by the proper parties, although there was even no need for that because the Court can rule on the matter sua sponte when its appellate jurisdiction is involved. The constitutional question was timely raised, although it could even be raised any time likewise by reason of the jurisdictional issue

confronting the Court. Finally, the resolution of the constitutional issue here is obviously necessary for the resolution of the present case. xxii[22] It is, however, suggested that this case could also be decided on other grounds, short of passing upon; the constitutional question. We appreciate the ratiocination of private respondent but regret that we must reject the same. That private respondent could be absolved of the charge because the decision exonerating him is final and unappealable assumes that Section 7, Rule III of Administrative Order No. 07 is valid, but that is precisely one of the issues here. The prevailing rule that the Court should not interfere with the discretion of the Ombudsman in prosecuting or dismissing a complaint is not applicable in this administrative case, as earlier explained. That two decisions rendered by this Court supposedly imply the validity of the aforementioned Section 7 of Rule III is precisely under review here because of some statements therein somewhat at odds with settled rules and the decisions of this Court on the same issues, hence to invoke the same would be to beg the question. V Taking all the foregoing circumstances in their true legal roles and effects, therefore, Section 27 of Republic Act No. 6770 cannot validly authorize an appeal to this Court from decisions of the Office of the Ombudsman in administrative disciplinary cases. It consequently violates the proscription in Section 30, Article VI of the Constitution against a law which increases the Appellate jurisdiction of this Court. No countervailing argument has been cogently presented to justify such disregard of the constitutional prohibition which, as correctly explained in First Leparto Ceramics, Inc. vs. The Court of Appeals, el al. xxiii[23] was intended to give this Court a measure of control over cases placed under its appellate Jurisdiction. Otherwise, the indiscriminate enactment of legislation enlarging its appellate jurisdiction would unnecessarily burden the Court xxiv[24] We perforce have to likewise reject the supposed inconsistency of the ruling in First Lepant o Ceramics and some statements in Yabut and Alba, not only because of the difference in the factual settings, but also because those isolated cryptic statements in Yabut and Alba should best be clarified in the adjudication on the merits of this case. By way of anticipation, that will have to be undertaken by the proper court of competent jurisdiction. Furthermore in addition to our preceding discussion on whether Section 27 of Republic Act No. 6770 expanded the jurisdiction of this Court without its advice and consent, private respondent's position paper correctly yields the legislative background of Republic Act No. 6770. On September 26, 1989, the Conference Committee Report on S.B. No. 453 and H.B. No. 13646, setting forth the new version of what would later be Republic Act No. 6770, was approved on second reading by the House of Representatives.xxv[25] The Senate was informed of the approval of the final version of the Act on October 2, 1989 xxvi[26] and the same was thereafter enacted into law by President Aquino on November 17, 1989. Submitted with said position paper is an excerpt showing that the Senate, in the deliberations on the procedure for appeal from the Office of the Ombudsman to this Court, was aware of the provisions of Section 30, Article III of the Constitution. It also reveals that Senator Edgardo Angara, as a co-author and the principal sponsor of S.B. No. 543 admitted that the said provision will expand this Court's jurisdiction, and that the Committee on Justice and Human Rights had not consulted this Court on the matter, thus: INTERPELLATION OF SENATOR SHAHANI xxx Thereafter, with reference to Section 22(4) which provides that the decisions of the Office of the Ombudsman may be appealed to the Supreme Court, in reply to Senator Shahani's query whether the Supreme Court would agree to such provision in the light of Section 30, Article VI of the Constitution which requires its advice and concurrence in laws increasing its appellate jurisdiction, Senator Angara informed that the Committee has not

yet consulted the Supreme Court regarding the matter. He agreed that the provision will expand the Supreme Court's jurisdiction by allowing appeals through petitions for review, adding that they should be appeals on certiorari.xxvii[27] There is no showing that even up to its enactment, Republic Act No. 6770 was ever referred to this Court for its advice and consent .xxviii[28] VI As a consequence of our ratiocination that Section 27 of Republic Act No. 6770 should be struck down as unconstitutional, and in line with the regulatory philosophy adopted in appeals from quasi-judicial agencies in the 1997 Revised Rules of Civil Procedure, appeals from decisions of the Office of the Ombudsman in administrative disciplinary cases should be taken to the Court of Appeals under the provisions of Rule 43. There is an intimation in the pleadings, however, that said Section 27 refers to appellate jurisdiction which, being substantive in nature, cannot be disregarded by this Court under its rule-making power, especially if it results in a diminution, increase or modification of substantive rights. Obviously, however, where the law is procedural in essence and purpose, the foregoing consideration would not pose a proscriptive issue against the exercise of the rule-making power of this Court. This brings to fore the question of whether Section 27 of Republic Act No. 6770 is substantive or procedural. It will be noted that no definitive line can be drawn between those rules or statutes which are procedural, hence within the scope of this Court's rule-making power, and those which are substantive. In fact, a particular rule may be procedural in one context and substantive in another.xxix[29] It is admitted that what is procedural and what is substantive is frequently a question of great difficulty.xxx[30] It is not, however, an insurmountable problem if a rational and pragmatic approach is taken within the context of our own procedural and jurisdictional system. In determining whether a rule prescribed by the Supreme Court, for the practice and procedure of the lower courts, abridges, enlarges, or modifies any substantive right, the test is whether the rule really regulates procedure, that is, the judicial process for enforcing rights and duties recognized by substantive law and for justly administering remedy and redress for a disregard or infraction of them.xxxi[31] If the rule takes away a vested right, it is not procedural. If the rule creates a right such as the right to appeal, it may be classified as a substantive matter; but if it operates as a means o implementing an existing right then the rule deals merely with procedure.xxxii[32] In the situation under consideration, a transfer by the Supreme Court, in the exercise of its rule-making power, of pending cases involving a review of decisions of the Office of the Ombudsman in administrative disciplinary actions to the Court of Appeals which shall now be vested with exclusive appellate jurisdiction thereover, relates to procedure only.xxxiii[33] This is so because it is not the right to appeal of an aggrieved party which is affected by the law. That right has been preserved. Only the procedure by which the appeal is to be made or decided has been changed. The rationale for this is that litigant has a vested right in a particular remedy, which may be changed by substitution without impairing vested rights, hence he can have none in rules of procedure which relate to the remedy.xxxiv[34] Furthermore, it cannot be said that transfer of appellate jurisdiction to the Court of Appeals in this case is an act of creating a new right of appeal because such power of the Supreme Court to transfer appeals to subordinate appellate courts is purely a procedural and not a substantive power. Neither can we consider such transfer as impairing a vested right because the parties have still a remedy and still a competent tribunal to administer that remedy.xxxv[35] Thus, it has been generally held that rules or statutes involving a transfer of cases from one court to another, are procedural and remedial merely and that, as such, they are applicable to actions pending at the time the statute went into effectxxxvi[36] or, in the case at bar, when its invalidity was declared. Accordingly, even from the

standpoint of jurisdiction ex hypothesi the validity of the transfer of appeals in said cases to the Court of Appeals can be sustained. WHEREFORE, Section 27 of Republic Act No. 6770 (Ombudsman Act of 1989), together with Section 7, Rule III of Administrative Order No. 07 (Rules of Procedure of the Office of the Ombudsman), and any other provision of law or issuance implementing the aforesaid Act and insofar as they provide for appeals in administrative disciplinary cases from the Office of the Ombudsman to the Supreme Court, are hereby declared INVALID and of no further force and effect. The instant petition is hereby referred and transferred to the Court of Appeals for final disposition, with said petition to be considered by the Court of Appeals pro hac vice as a petition for review under Rule 43, without prejudice to its requiring the parties to submit such amended or supplemental pleadings and additional documents or records as it may deem necessary and proper. SO ORDERED. Narvasa, C.J., Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza, Panganiban, Martinez, Quisumbing, and Purisima JJ., concur.

EN BANC

[G.R. No. 132601. January 19, 1999]


LEO ECHEGARAY, petitioner, vs. SECRETARY OF JUSTICE, ET AL., respondents. RESOLUTION PUNO, J.: For resolution are public respondents' Urgent Motion for Reconsideration of the Resolution of this Court dated January 4, 1999 temporarily restraining the execution of petitioner and Supplemental Motion to Urgent Motion for Reconsideration. It is the submission of public respondents that: "(1) The Decision in this case having become final and executory, its execution enters the exclusive ambit of authority of the executive authority. The issuance of the TRO may be construed as trenching on that sphere of executive authority; (2) The issuance of the temporary restraining order x x x creates dangerous precedent as there will never be an end to litigation because there is always a possibility that Congress may repeal a law. (3) Congress had earlier deliberated extensively on the death penalty bill. To be certain, whatever question may now be raised on the Death Penalty Law before the present Congress within the 6-month period given by this Honorable Court had in all probability been fully debated upon x x x.

(4) Under the time honored maxim lex futuro, judex praeterito, the law looks forward while the judge looks at the past, x x x the Honorable Court in issuing the TRO has transcended its power of judicial review. (5) At this moment, certain circumstances/supervening events transpired to the effect that the repeal or modification of the law imposing death penalty has become nil, to wit: a. The public pronouncement of President Estrada that he will veto any law imposing the death penalty involving heinous crimes.

b. The resolution of Congressman Golez, et al., that they are against the repeal of the law; c. The fact that Senator Roco's resolution to repeal the law only bears his signature and that of Senator Pimentel."

In their Supplemental Motion to Urgent Motion for Reconsideration, public respondents attached a copy of House Resolution No. 629 introduced by Congressman Golez entitled "Resolution expressing the sense of the House of Representative to reject any move to review Republic Act No. 7659 which provided for the reimposition of death penalty, notifying the Senate, the Judiciary and the Executive Department of the position of the House of Representatives on this matter, and urging the President to exhaust all means under the law to immediately implement the death penalty law." The Resolution was concurred in by one hundred thirteen (113) congressmen. In their Consolidated Comment, petitioner contends: (1) the stay order x x x is within the scope of judicial power and duty and does not trench on executive powers nor on congressional prerogatives; (2) the exercise by this Court of its power to stay execution was reasonable; (3) the Court did not lose jurisdiction to address incidental matters involved or arising from the petition; (4) public respondents are estopped from challenging the Court's jurisdiction; and (5) there is no certainty that the law on capital punishment will not be repealed or modified until Congress convenes and considers all the various resolutions and bills filed before it. Prefatorily, the Court likes to emphasize that the instant motions concern matters that are not incidents in G.R. No. 117472, where the death penalty was imposed on petitioner on automatic review of his conviction by this Court. The instant motions were filed in this case, G.R. No. 132601, where the constitutionality of R.A. No. 8177 (Lethal Injection Law) and its implementing rules and regulations was assailed by petitioner. For this reason, the Court in its Resolution of January 4, 1999 merely noted the Motion to Set Aside of Rodessa "Baby" R. Echegaray dated January 7, 1999 and Entry of Appearance of her counsel dated January 5, 1999. Clearly, she has no legal standing to intervene in the case at bar, let alone the fact that the interest of the State is properly represented by the Solicitor General. We shall now resolve the basic issues raised by the public respondents. I First. We do not agree with the sweeping submission of the public respondents that this Court lost its jurisdiction over the case at bar and hence can no longer restrain the execution of the petitioner. Obviously, public respondents are invoking the rule that final judgments can no longer be altered in accord with the principle that "it is just as important that there should be a place to end as there should be a place to begin litigation."ii[1] To start with, the Court is not changing even a comma of its final Decision. It is appropriate to examine with precision the metes and bounds of the Decision of this Court that became final. These metes and bounds are clearly spelled out in the Entry of Judgment in this case, viz: "ENTRY OF JUDGMENT

This is to certify that on October 12, 1998 a decision rendered in the above-entitled case was filed in this Office, the dispositive part of which reads as follows: `WHEREFORE, the petition is DENIED insofar as petitioner seeks to declare the assailed statute (Republic Act No. 8177) as unconstitutional; but GRANTED insofar as Sections 17 and 19 of the Rules and Regulations to Implement Republic Act No. 8177 are concerned, which are hereby declared INVALID because (a) Section 17 contravenes Article 83 of the Revised Penal Code, as amended by Section 25 of Republic Act No. 7659; and (b) Section 19 fails to provide for review and approval of the Lethal Injection Manual by the Secretary of Justice, and unjustifiably makes the manual confidential, hence unavailable to interested parties including the accused/convict and counsel. Respondents are hereby enjoined from enforcing and implementing Republic Act No. 8177 until the aforesaid Sections 17 and 19 of the Rules and Regulations to Implement Republic Act No. 8177 are appropriately amended, revised and/or corrected in accordance with this Decision. SO ORDERED.' and that the same has, on November 6, 1998 become final and executory and is hereby recorded in the Book of Entries of Judgment. Manila, Philippines. The records will show that before the Entry of Judgment, the Secretary of Justice, the Honorable Serafin Cuevas, filed with this Court on October 21, 1998 a Compliance where he submitted the Amended Rules and Regulations implementing R.A. No. 8177 in compliance with our Decision. On October 28, 1998, Secretary Cuevas submitted a Manifestation informing the Court that he has caused the publication of the said Amended Rules and Regulations as required by the Administrative Code. It is crystalline that the Decision of this Court that became final and unalterable mandated: (1) that R.A. No. 8177 is not unconstitutional; (2) that sections 17 and 19 of the Rules and Regulations to Implement R.A. No. 8177 are invalid, and (3) R.A. No. 8177 cannot be enforced and implemented until sections 17 and 19 of the Rules and Regulations to Implement R.A. No. 8177 are amended. It is also daylight clear that this Decision was not altered a whit by this Court. Contrary to the submission of the Solicitor General, the rule on finality of judgment cannot divest this Court of its jurisdiction to execute and enforce the same judgment. Retired Justice Camilo Quiason synthesized the well established jurisprudence on this issue as follows:ii[2] xxx "the finality of a judgment does not mean that the Court has lost all its powers nor the case . By the finality of the judgment, what the court loses is its jurisdiction to amend, modify or alter the same. Even after the judgment has become final the court retains its jurisdiction to execute and enforce it.ii[3] There is a difference
between the jurisdiction of the court to execute its judgment and its jurisdiction to amend, modify or alter the same. The former continues even after the judgment has become final for the purpose of enforcement of judgment; the latter terminates when the judgment becomes final.ii[4] x x x For after the judgment has become final facts and circumstances may transpire which can render the execution unjust or impossible.ii[5]

In truth, the argument of the Solicitor General has long been rejected by this Court. As aptly pointed out by the petitioner, as early as 1915, this Court has unequivocably ruled in the case of Director of Prisons v. Judge of First Instance,ii[6] viz: "This Supreme Court has repeatedly declared in various decisions, which constitute jurisprudence on the subject, that in criminal cases, after the sentence has been pronounced and the period for reopening the same has elapsed, the court cannot change or alter its judgment, as its jurisdiction has terminated . . . When in cases of appeal or review the cause has been returned thereto for execution, in the event that the judgment has been

affirmed, it performs a ministerial duty in issuing the proper order. But it does not follow from this cessation of functions on the part of the court with reference to the ending of the cause that the judicial authority terminates by having then passed completely to the Executive. The particulars of the execution itself, which are certainly not always included in the judgment and writ of execution, in any event are absolutely under the control of the judicial authority, while the executive has no power over the person of the convict except to provide for carrying out of the penalty and to pardon. Getting down to the solution of the question in the case at bar, which is that of execution of a capital sentence, it must be accepted as a hypothesis that postponement of the date can be requested. There can be no dispute on this point. It is a well-known principle that notwithstanding the order of execution and the executory nature thereof on the date set or at the proper time, the date therefor can be postponed, even in sentences of death. Under the common law this postponement can be ordered in three ways: (1) By command of the King; (2) by discretion (arbitrio) of the court; and (3) by mandate of the law. It is sufficient to state this principle of the common law to render impossible that assertion in absolute terms that after the convict has once been placed in jail the trial court can not reopen the case to investigate the facts that show the need for postponement. If one of the ways is by direction of the court, it is acknowledged that even after the date of the execution has been fixed, and notwithstanding the general rule that after the (court) has performed its ministerial duty of ordering the execution . . . and its part is ended, if however a circumstance arises that ought to delay the execution, and there is an imperative duty to investigate the emergency and to order a postponement. Then the question arises as to whom the application for postponing the execution ought to be addressed while the circumstances is under investigation and as to who has jurisdiction to make the investigation." The power to control the execution of its decision is an essential aspect of jurisdiction. It cannot be the subject of substantial subtraction for our Constitutionii[7] vests the entirety of judicial power in one Supreme Court and in such lower courts as may be estabished by law. To be sure, the most important part of a litigation, whether civil or criminal, is the process of execution of decisions where supervening events may change the circumstance of the parties and compel courts to intervene and adjust the rights of the litigants to prevent unfairness. It is because of these unforseen, supervening contingencies that courts have been conceded the inherent and necessary power of control of its processes and orders to make them conformable to law and justice.ii[8] For this purpose, Section 6 of Rule 135 provides that "when by law jurisdiction is conferred on a court or judicial officer, all auxiliary writs, processes and other means necessary to carry it into effect may be employed by such court or officer and if the procedure to be followed in the exercise of such jurisdiction is not specifically pointed out by law or by these rules, any suitable process or mode of proceeding may be adopted which appears conformable to the spirit of said law or rules." It bears repeating that what the Court restrained temporarily is the execution of its own Decision to give it reasonble time to check its fairness in light of supervening events in Congress as alleged by petitioner. The Court, contrary to popular misimpression, did not restrain the effectivity of a law enacted by Congress. The more disquieting dimension of the submission of the public respondents that this Court has no jurisdiction to restrain the execution of petitioner is that it can diminish the independence of the judiciary. Since the implant of republicanism in our soil, our courts have been conceded the jurisdiction to enforce their final decisions. In accord with this unquestioned jurisdiction, this Court promulgated rules concerning pleading, practice and procedure which, among others, spelled out the rules on execution of judgments. These rules are all predicated on the assumption that courts have the inherent, necessary and incidental power to control and supervise the process of execution of their decisions. Rule 39 governs execution, satisfaction and effects of judgments in civil cases. Rule 120 governs judgments in criminal cases. It should be stressed that the power to promulgate rules of pleading, practice and procedure was granted by our Constitutions to this Court to enhance its independence, for in the words of Justice Isagani Cruz "without independence and integrity, courts will lose that popular trust so essential to the maintenance of their vigor as champions of justice."ii[9] Hence, our Constitutions continuously vested this power to this Court for it enhances

its independence. Under the 1935 Constitution, the power of this Court to promulgate rules concerning pleading, practice and procedure was granted but it appeared to be co-existent with legislative power for it was subject to the power of Congress to repeal, alter or supplement. Thus, its Section 13, Article VIII provides: "Sec. 13. The Supreme Court shall have the power to promulgate rules concerning pleading, practice and procedure in all courts, and the admission to the practice of law. Said rules shall be uniform for all courts of the same grade and shall not diminish, increase, or modify substantive rights. The existing laws on pleading, practice and procedure are hereby repealed as statutes, and are declared Rules of Court, subject to the power of the Supreme Court to alter and modify the same. The Congress shall have the power to repeal, alter or supplement the rules concerning pleading, practice and procedure, and the admission to the practice of law in the Philippines." The said power of Congress, however, is not as absolute as it may appear on its surface. In In re Cunananii[10] Congress in the exercise of its power to amend rules of the Supreme Court regarding admission to the practice of law, enacted the Bar Flunkers Act of 1953ii[11] which considered as a passing grade, the average of 70% in the bar examinations after July 4, 1946 up to August 1951 and 71% in the 1952 bar examinations. This Court struck down the law as unconstitutional. In his ponencia, Mr. Justice Diokno held that "x x x the disputed law is not a legislation; it is a judgment - a judgment promulgated by this Court during the aforecited years affecting the bar candidates concerned; and although this Court certainly can revoke these judgments even now, for justifiable reasons, it is no less certain that only this Court, and not the legislative nor executive department, that may do so. Any attempt on the part of these departments would be a clear usurpation of its function, as is the case with the law in question."ii[12] The venerable jurist further ruled: "It is obvious, therefore, that the ultimate power to grant license for the practice of law belongs exclusively to this Court, and the law passed by Congress on the matter is of permissive character, or as other authorities say, merely to fix the minimum conditions for the license." By its ruling, this Court qualified the absolutist tone of the power of Congress to "repeal, alter or supplement the rules concerning pleading, practice and procedure, and the admission to the practice of law in the Philippines. The ruling of this Court in In re Cunanan was not changed by the 1973 Constitution. For the 1973 Constitution reiterated the power of this Court "to promulgate rules concerning pleading, practice and procedure in all courts, x x x which, however, may be repealed, altered or supplemented by the Batasang Pambansa x x x." More completely, Section 5(2)5 of its Article X provided: xxx xxx xxx

"Sec. 5. The Supreme Court shall have the following powers. xxx xxx xxx

(5) Promulgate rules concerning pleading, practice, and procedure in all courts, the admission to the practice of law, and the integration of the Bar, which, however, may be repealed, altered, or supplemented by the Batasang Pambansa. Such rules shall provide a simplified and inexpensive procedure for the speedy disposition of cases, shall be uniform for all courts of the same grade, and shall not diminish, increase, or modify substantive rights." Well worth noting is that the 1973 Constitution further strengthened the independence of the judiciary by giving to it the additional power to promulgate rules governing the integration of the Bar.ii[13] The 1987 Constitution molded an even stronger and more independent judiciary. enhanced the rule making power of this Court. Its Section 5(5), Article VIII provides: Among others, it

xxx

xxx

xxx

"Section 5. The Supreme Court shall have the following powers: xxx xxx xxx

(5) Promulgate rules concerning the protection and enforcement of constitutional rights , pleading, practice and procedure in all courts, the admission to the practice of law, the Integrated Bar, and legal assistance to the underprivileged. Such rules shall provide a simplified and inexpensive procedure for the speedy disposition of cases, shall be uniform for all courts of the same grade, and shall not diminish, increase, or modify substantive rights. Rules of procedure of special courts and quasi-judicial bodies shall remain effective unless disapproved by the Supreme Court." The rule making power of this Court was expanded. This Court for the first time was given the power to promulgate rules concerning the protection and enforcement of constitutional rights. The Court was also granted for the first time the power to disapprove rules of procedure of special courts and quasi-judicial bodies. But most importantly, the 1987 Constitution took away the power of Congress to repeal, alter, or supplement rules concerning pleading, practice and procedure. In fine, the power to promulgate rules of pleading, practice and procedure is no longer shared by this Court with Congress, more so with the Executive. If the manifest intent of the 1987 Constitution is to strengthen the independence of the judiciary, it is inutile to urge, as public respondents do, that this Court has no jurisdiction to control the process of execution of its decisions, a power conceded to it and which it has exercised since time immemorial. To be sure, it is too late in the day for public respondents to assail the jurisdiction of this Court to control and supervise the implementation of its decision in the case at bar. As aforestated, our Decision became final and executory on November 6, 1998. The records reveal that after November 6, 1998, or on December 8, 1998, no less than the Secretary of Justice recognized the jurisdiction of this Court by filing a Manifestation and Urgent Motion to compel the trial judge, the Honorable Thelma A. Ponferrada, RTC, Br. 104, Quezon City to provide him "x x x a certified true copy of the Warrant of Execution dated November 17, 1998 bearing the designated execution day of death convict Leo Echegaray and allow (him) to reveal or announce the contents thereof, particularly the execution date fixed by such trial court to the public when requested." The relevant portions of the Manifestation and Urgent Motion filed by the Secretary of Justice beseeching this Court "to provide the appropriate relief" state: xxx xxx xxx

5. Instead of filing a comment on Judge Ponferrada's Manifestation however, herein respondent is submitting the instant Manifestation and Motion (a) to stress, inter alia, that the non-disclosure of the date of execution deprives herein respondent of vital information necessary for the exercise of his statutory powers, as well as renders nugatory the constitutional guarantee that recognizes the people's right to information of public concern, and (b) to ask this Honorable Court to provide the appropriate relief. 6. The non-disclosure of the date of execution deprives herein respondent of vital information necessary for the exercise of his power of supervision and control over the Bureau of Corrections pursuant to Section 39, Chapter 8, Book IV of the Administrative Code of 1987, in relation to Title III, Book IV of such Administrative Code, insofar as the enforcement of Republic Act No. 8177 and the Amended Rules and Regulations to Implement Republic Act No. 8177 is concerned and for the discharge of the mandate of seeing to it that laws and rules relative to the execution of sentence are faithfully observed. 7. On the other hand, the willful omission to reveal the information about the precise day of execution limits the exercise by the President of executive clemency powers pursuant to Section 19, Article VII

(Executive Department) of the 1987 Philippine Constitution and Article 81 of the Revised Penal Code, as amended, which provides that the death sentence shall be carried out `without prejudice to the exercise by the President of his executive clemency powers at all times." (Underscoring supplied) For instance, the President cannot grant reprieve, i.e., postpone the execution of a sentence to a day certain (People v. Vera, 65 Phil. 56, 110 [1937]) in the absence of a precise date to reckon with. The exercise of such clemency power, at this time, might even work to the prejudice of the convict and defeat the purpose of the Constitution and the applicable statute as when the date of execution set by the President would be earlier than that designated by the court. 8. Moreover, the deliberate non-disclosure of information about the date of execution to herein respondent and the public violates Section 7, Article III (Bill of Rights) and Section 28, Article II (Declaration of Principles and State Policies) of the 1987 Philippine Constitution which read: SEC. 7. The right of the people to information on matters of public concern shall be recognized. Access to official records, and to documents and papers pertaining to official acts, transactions, or decisions, as well as to government research data used as basis for policy development, shall be afforded the citizen, subject to such limitations as may be provided by law. SEC. 28. Subject to reasonable conditions prescribed by law, the State adopts and implements a policy of full public disclosure of all its transactions involving public interest. 9. The `right to information' provision is self-executing. It supplies 'the rules by means of which the right to information may be enjoyed (Cooley, A Treatise on the Constitutional Limitations, 167 [1972]) by guaranteeing the right and mandating the duty to afford access to sources of information. Hence, the fundamental right therein recognized may be asserted by the people upon the ratification of the Constitution without need for any ancillary act of the Legislature (Id., at p. 165) What may be provided for by the Legislature are reasonable conditions and limitations upon the access to be afforded which must, of necessity, be consistent with the declared State policy of full public disclosure of all transactions involving public interest (Constitution, Art. II, Sec. 28). However, it cannot be overemphasized that whatever limitation may be prescribed by the Legislature, the right and the duty under Art. III, Sec. 7 have become operative and enforceable by virtue of the adoption of the New Charter." (Decision of the Supreme Court En Banc in Legaspi v. Civil Service Commission, 150 SCRA 530, 534-535 [1987]." The same motion to compel Judge Ponferrada to reveal the date of execution of petitioner Echegaray was filed by his counsel, Atty. Theodore Te, on December 7, 1998. He invoked his client's right to due process and the public's right to information. The Solicitor General, as counsel for public respondents, did not oppose petitioner's motion on the ground that this Court has no more jurisdiction over the process of execution of Echegaray. This Court granted the relief prayed for by the Secretary of Justice and by the counsel of the petitioner in its Resolution of December 15, 1998. There was not a whimper of protest from the public respondents and they are now estopped from contending that this Court has lost its jurisdiction to grant said relief. The jurisdiction of this Court does not depend on the convenience of litigants. II Second. We likewise reject the public respondents' contention that the "decision in this case having become final and executory, its execution enters the exclusive ambit of authority of the executive department x x x. By granting the TRO, the Honorable Court has in effect granted reprieve which is an executive function."ii[14] Public respondents cite as their authority for this proposition, Section 19, Article VII of the Constitution which reads: "Except in cases of impeachment, or as otherwise provided in this Constitution, the President may grant reprieves, commutations, and pardons, and remit fines and forfeitures after conviction by final judgment. He

shall also have the power to grant amnesty with the concurrence of a majority of all the members of the Congress." The text and tone of this provision will not yield to the interpretation suggested by the public respondents. The provision is simply the source of power of the President to grant reprieves, commutations, and pardons and remit fines and forfeitures after conviction by final judgment. It also provides the authority for the President to grant amnesty with the concurrence of a majority of all the members of the Congress. The provision, however, cannot be interpreted as denying the power of courts to control the enforcement of their decisions after their finality. In truth, an accused who has been convicted by final judgment still possesses collateral rights and these rights can be claimed in the appropriate courts. For instance, a death convict who becomes insane after his final conviction cannot be executed while in a state of insanity.ii[15] As observed by Antieau, "today, it is generally assumed that due process of law will prevent the government from executing the death sentence upon a person who is insane at the time of execution."ii[16] The suspension of such a death sentence is undisputably an exercise of judicial power. It is not a usurpation of the presidential power of reprieve though its effect is the same -- the temporary suspension of the execution of the death convict. In the same vein, it cannot be denied that Congress can at any time amend R.A. No. 7659 by reducing the penalty of death to life imprisonment. The effect of such an amendment is like that of commutation of sentence. But by no stretch of the imagination can the exercise by Congress of its plenary power to amend laws be considered as a violation of the power of the President to commute final sentences of conviction. The powers of the Executive, the Legislative and the Judiciary to save the life of a death convict do not exclude each other for the simple reason that there is no higher right than the right to life. Indeed, in various States in the United States, laws have even been enacted expressly granting courts the power to suspend execution of convicts and their constitutionality has been upheld over arguments that they infringe upon the power of the President to grant reprieves. For the public respondents therefore to contend that only the Executive can protect the right to life of an accused after his final conviction is to violate the principle of co-equal and coordinate powers of the three branches of our government. III Third. The Court's resolution temporarily restraining the execution of petitioner must be put in its proper perspective as it has been grievously distorted especially by those who make a living by vilifying courts. Petitioner filed his Very Urgent Motion for Issuance of TRO on December 28, 1998 at about 11:30 p.m. He invoked several grounds, viz: (1) that his execution has been set on January 4, the first working day of 1999; (b) that members of Congress had either sought for his executive clemency and/or review or repeal of the law authorizing capital punishment; (b.1) that Senator Aquilino Pimentel's resolution asking that clemency be granted to the petitioner and that capital punishment be reviewed has been concurred by thirteen (13) other senators; (b.2) Senate President Marcelo Fernan and Senator Miriam S. Defensor have publicly declared they would seek a review of the death penalty law; (b.3) Senator Raul Roco has also sought the repeal of capital punishment, and (b.4) Congressman Salacrib Baterina, Jr., and thirty five (35) other congressmen are demanding review of the same law. When the Very Urgent Motion was filed, the Court was already in its traditional recess and would only resume session on January 18, 1999. Even then, Chief Justice Hilario Davide, Jr. called the Court to a Special Session on January 4, 1999ii[17] at 10. a.m. to deliberate on petitioner's Very Urgent Motion. The Court hardly had five (5) hours to resolve petitioner's motion as he was due to be executed at 3 p.m. Thus, the Court had the difficult problem of resolving whether petitioner's allegations about the moves in Congress to repeal or amend the Death Penalty Law are mere speculations or not. To the Court's majority, there were good reasons why the Court should not immediately dismiss petitioner's allegations as mere speculations and surmises. They noted that petitioner's allegations were made in a pleading under oath and were widely publicized in the print and broadcast media. It was also of judicial notice that the 11th Congress is a new Congress and has no less than one hundred thirty (130) new members whose views on capital punishment are still unexpressed . The

present Congress is therefore different from the Congress that enacted the Death Penalty Law (R.A. No. 7659) and the Lethal Injection Law (R.A. No. 8177). In contrast, the Court's minority felt that petitioner's allegations lacked clear factual bases. There was hardly a time to verify petitioner's allegations as his execution was set at 3 p.m. And verification from Congress was impossible as Congress was not in session. Given these constraints, the Court's majority did not rush to judgment but took an extremely cautious stance by temporarily restraining the execution of petitioner. The suspension was temporary - - - "until June 15, 1999, coeval with the constitutional duration of the present regular session of Congress, unless it sooner becomes certain that no repeal or modification of the law is going to be made." The extreme caution taken by the Court was compelled, among others, by the fear that any error of the Court in not stopping the execution of the petitioner will preclude any further relief for all rights stop at the graveyard. As life was at stake, the Court refused to constitutionalize haste and the hysteria of some partisans. The Court's majority felt it needed the certainty that the legislature will not change the circumstance of petitioner as alleged by his counsel. It was believed that law and equitable considerations demand no less before allowing the State to take the life of one its citizens. The temporary restraining order of this Court has produced its desired result, i.e., the crystallization of the issue whether Congress is disposed to review capital punishment. The public respondents, thru the Solicitor General, cite posterior events that negate beyond doubt the possibility that Congress will repeal or amend the death penalty law. He names these supervening events as follows: xxx "a. The public pronouncement of President Estrada that he will veto any law repealing the death penalty involving heinous crimes. b. The resolution of Congressman Golez, et al., that they are against the repeal of the law;

c. The fact that Senator Roco's resolution to repeal the law only bears his signature and that of Senator Pimentel."ii[18] In their Supplemental Motion to Urgent Motion for Reconsideration, the Solicitor General cited House Resolution No. 629 introduced by Congressman Golez entitled "Resolution expressing the sense of the House of Representatives to reject any move to review R.A. No. 7659 which provided for the reimposition of death penalty, notifying the Senate, the Judiciary and the Executive Department of the position of the House of Representatives on this matter and urging the President to exhaust all means under the law to immediately implement the death penalty law." The Golez resolution was signed by 113 congressmen as of January 11, 1999. In a marathon session yesterday that extended up to 3 o'clock in the morning, the House of Representatives with minor amendments formally adopted the Golez resolution by an overwhelming vote. House Resolution No. 25 expressed the sentiment that the House "x x x does not desire at this time to review Republic Act 7659." In addition, the President has stated that he will not request Congress to ratify the Second Protocol in view of the prevalence of heinous crimes in the country. In light of these developments, the Court's TRO should now be lifted as it has served its legal and humanitarian purpose. A last note. In 1922, the famous Clarence Darrow predicted that "x x x the question of capital punishment has been the subject of endless discussion and will probably never be settled so long as men believe in punishment."ii[19] In our clime and time when heinous crimes continue to be unchecked, the debate on the legal and moral predicates of capital punishment has been regrettably blurred by emotionalism because of the unfaltering faith of the pro and anti-death partisans on the right and righteousness of their postulates. To be sure, any debate, even if it is no more than an exchange of epithets is healthy in a democracy. But when the debate deteriorates to discord due to the overuse of words that wound, when anger threatens to turn the majority rule to tyranny, it is the especial duty of this Court to assure that the guarantees of the Bill

of Rights to the minority fully hold. As Justice Brennan reminds us "x x x it is the very purpose of the Constitution - - - and particularly the Bill of Rights - - - to declare certain values transcendent, beyond the reach of temporary political majorities."ii[20] Man has yet to invent a better hatchery of justice than the courts. It is a hatchery where justice will bloom only when we can prevent the roots of reason to be blown away by the winds of rage. The flame of the rule of law cannot be ignited by rage, especially the rage of the mob which is the mother of unfairness. The business of courts in rendering justice is to be fair and they can pass their litmus test only when they can be fair to him who is momentarily the most hated by society.ii[21] IN VIEW WHEREOF, the Court grants the public respondents' Urgent Motion for Reconsideration and Supplemental Motion to Urgent Motion for Reconsideration and lifts the Temporary Restraining Order issued in its Resolution of January 4, 1999. The Court also orders respondent trial court judge (Hon. Thelma A. Ponferrada, Regional Trial Court, Quezon City, Branch 104) to set anew the date for execution of the convict/petitioner in accordance with applicable provisions of law and the Rules of Court, without further delay. SO ORDERED. EN BANC

G.R. No. 141524 DOMINGO NEYPES, LUZ FAUSTINO, ROGELIO FAUSTINO,LOLITO VICTORIANO, JACOB OBANIA AND DOMINGO Present :CABACUNGAN, Petitioners, DAVIDE, JR., C.J. PUNO, PANGANIBAN,QUISUMBING,YNARES-SANTIAGO,SANDOVAL-GUTIERREZ,CARPIO, - v e r s u s - AUSTRIA-MARTINEZ,CORONA,CARPIO MORALES,CALLEJO, SR.,AZCUNA,TINGA,CHICO-NAZARIO andGARCIA, JJ.
HON. COURT OF APPEALS, HEIRS OF BERNARDO DEL MUNDO, namely: FE, CORAZON, JOSEFA,SALVADOR and CARMEN, all surnamed DEL MUNDO, LAND BANK OF THE PHILIPPINES AND HON. ANTONIO N. ROSALES, Presiding Judge, Branch 43, Regional Trial Court, Roxas, Oriental Mindoro, Respondents.

Promulgated : September 14, 2005

x-----------------------------------------x DECISION

CORONA, J.:
Petitioners Domingo Neypes, Luz Faustino, Rogelio Faustino, Lolito Victoriano, Jacob Obania and Domingo Cabacungan filed an action for annulment of judgment and titles of land and/or reconveyance and/or reversion with preliminary injunction before the Regional Trial Court, Branch 43, of Roxas, Oriental Mindoro, against the Bureau of Forest Development, Bureau of Lands, Land Bank of the Philippines and the heirs of Bernardo del Mundo, namely, Fe, Corazon, Josefa, Salvador and Carmen. In the course of the proceedings, the parties (both petitioners and respondents) filed various motions with the trial court. Among these were: (1) the motion filed by petitioners to declare the respondent heirs, the Bureau of Lands and the Bureau of Forest Development in default and (2) the motions to dismiss filed by the respondent heirs and the Land Bank of the Philippines, respectively.

In an order dated May 16, 1997, the trial court, presided by public respondent Judge Antonio N. Rosales, resolved the foregoing motions as follows: (1) the petitioners motion to declare respondents Bureau of Lands and Bureau of Forest Development in default was granted for their failure to file an answer, but denied as against the respondent heirs of del Mundo because the substituted service of summons on them was improper; (2) the Land Banks motion to dismiss for lack of cause of action was denied because there were hypothetical admissions and matters that could be determined only after trial, and (3) the motion to dismiss filed by respondent heirs of del Mundo, based on prescription, was also denied because there were factual matters that could be determined only after trial.[1]
The respondent heirs filed a motion for reconsideration of the order denying their motion to dismiss on the ground that the trial court could very well resolve the issue of prescription from the bare allegations of the complaint itself without waiting for the trial proper. In an order[2] dated February 12, 1998, the trial court dismissed petitioners complaint on the ground that the action had already prescribed. Petitioners allegedly received a copy of the order of dismissal on March 3, 1998 and, on the 15th day thereafter or on March 18, 1998, filed a motion for reconsideration. On July 1, 1998, the trial court issued another order dismissing the motion for reconsideration[3] which petitioners received on July 22, 1998. Five days later, on July 27, 1998, petitioners filed a notice of appeal[4] and paid the appeal fees on August 3, 1998.

On August 4, 1998, the court a quo denied the notice of appeal, holding that it was filed eight days late.[5] This was received by petitioners on July 31, 1998. Petitioners filed a motion for reconsideration but this too was denied in an order dated September 3, 1998.[6] Via a petition for certiorari and mandamus under Rule 65 of the 1997 Rules of Civil Procedure, petitioners assailed the dismissal of the notice of appeal before the Court of Appeals.

In the appellate court, petitioners claimed that they had seasonably filed their notice of appeal. They argued that the 15-day reglementary period to appeal started to run only on July 22, 1998 since this was the day they received the final order of the trial court denying their motion for reconsideration. When they filed their notice of appeal on July 27, 1998, only five days had elapsed and they were well within the reglementary period for appeal.[7] On September 16, 1999, the Court of Appeals (CA) dismissed the petition. It ruled that the 15-day period to appeal should have been reckoned from March 3, 1998 or the day they received the February 12, 1998 order dismissing their complaint. According to the appellate court, the order was the final order appealable under the Rules. It held further: Perforce the petitioners tardy appeal was correctly dismissed for the (P)erfection of an appeal within the reglementary period and in the manner prescribed by law is jurisdictional and non-compliance with such legal requirement is fatal and effectively renders the judgment final and executory.[8] Petitioners filed a motion for reconsideration of the aforementioned decision. This was denied by the Court of Appeals on January 6, 2000. In this present petition for review under Rule 45 of the Rules, petitioners ascribe the following errors allegedly committed by the appellate court:

I THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING THE PETITIONERS PETITION FOR CERTIORARI AND MANDAMUS AND IN AFFIRMING THE ORDER OF THE HON. JUDGE ANTONIO N. ROSALES WHICH DISMISSED THE PETITIONERS APPEAL IN CIVIL CASE NO. C-36 OF THE REGIONAL TRIAL COURT, BRANCH 43, ROXAS, ORIENTAL MINDORO, EVEN AFTER THE PETITIONERS HAD PAID THE APPEAL DOCKET FEES. II THE HONORABLE COURT OF APPEALS LIKEWISE ERRED IN RULING AND AFFIRMING THE DECISION OR ORDER OF THE RESPONDENT HON. ANTONIO M. ROSALES THAT PETITIONERS APPEAL WAS FILED OUT OF TIME WHEN PETITIONERS RECEIVED THE LAST OR FINAL ORDER OF THE COURT ON JULY 22, 1998 AND FILED THEIR NOTICE OF APPEAL ON JULY 27, 1998 AND PAID THE APPEAL DOCKET FEE ON AUGUST 3, 1998. III THE HONORABLE COURT OF APPEALS FURTHER ERRED IN RULING THAT THE WORDS FINAL ORDER IN SECTION 3, RULE 41, OF THE 1997 RULES OF CIVIL PROCEDURE WILL REFER TO THE [FIRST] ORDER OF RESPONDENT JUDGE HON. ANTONIO M. MORALES DATED FEBRUARY 12, 1998 INSTEAD OF THE LAST AND FINAL ORDER DATED JULY 1, 1998 COPY OF WHICH WAS RECEIVED BY PETITIONERS THROUGH COUNSEL ON JULY 22, 1998.

IV. THE HONORABLE COURT OF APPEALS FINALLY ERRED IN FINDING THAT THE DECISION IN THE CASE OF DENSO, INC. V. IAC, 148 SCRA 280, IS APPLICABLE IN THE INSTANT CASE THEREBY IGNORING THE PECULIAR FACTS AND CIRCUMSTANCES OF THIS CASE AND THE FACT THAT THE SAID DECISION WAS RENDERED PRIOR TO THE ENACTMENT OF THE 1997 RULES OF CIVIL PROCEDURE.[9] The foregoing issues essentially revolve around the period within which petitioners should have filed their notice of appeal. First and foremost, the right to appeal is neither a natural right nor a part of due process. It is merely a statutory privilege and may be exercised only in the manner and in accordance with the provisions of law. Thus, one who seeks to avail of the right to appeal must comply with the requirements of the Rules. Failure to do so often leads to the loss of the right to appeal.[10] The period to appeal is fixed by both statute and procedural rules. BP 129,[11] as amended, provides: Sec. 39. Appeals. The period for appeal from final orders, resolutions, awards, judgments, or decisions of any court in all these cases shall be fifteen (15) days counted from the notice of the final order, resolution, award, judgment, or decision appealed from. Provided, however, that in habeas corpus cases, the period for appeal shall be (48) forty-eight hours from the notice of judgment appealed from. x x x Rule 41, Section 3 of the 1997 Rules of Civil Procedure states: SEC. 3. Period of ordinary appeal. The appeal shall be taken within fifteen (15) days from the notice of the judgment or final order appealed from. Where a record on appeal is required, the appellant shall file a notice of appeal and a record on appeal within thirty (30) days from the notice of judgment or final order.

The period to appeal shall be interrupted by a timely motion for new trial or reconsideration. No motion for extension of time to file a motion for new trial or reconsideration shall be allowed. (emphasis supplied)

Based on the foregoing, an appeal should be taken within 15 days from the notice of judgment or final order appealed from. A final judgment or order is one that finally disposes of a case, leaving nothing more for the court to do with respect to it. It is an adjudication on the merits which, considering the evidence presented at the trial, declares categorically what the rights and obligations of the parties are; or it may be an order or judgment that dismisses an action.[12]

As already mentioned, petitioners argue that the order of July 1, 1998 denying their motion for reconsideration should be construed as the final order, not the February 12, 1998 order which dismissed their complaint. Since they received their copy of the denial of their motion for reconsideration only on July 22, 1998, the 15-day reglementary period to appeal had not yet lapsed when they filed their notice of appeal on July 27, 1998. What therefore should be deemed as the final order, receipt of which triggers the start of the 15 -day complaint or the July 1, 1998 order dismissing the MR? In the recent case of Quelnan v. VHF Philippines, Inc.,[13] the trial court declared petitioner Quelnan nonsuited and accordingly dismissed his complaint. Upon receipt of the order of dismissal, he filed an omnibus motion to set it aside. When the omnibus motion was filed, 12 days of the 15-day period to appeal the order had lapsed. He later on received another order, this time dismissing his omnibus motion. He then filed his notice of appeal. But this was likewise dismissed for having been filed out of time. The court a quo ruled that petitioner should have appealed within 15 days after the dismissal of his complaint since this was the final order that was appealable under the Rules. We reversed the trial court and declared that it was the denial of the motion for reconsideration of an order of dismissal of a complaint which constituted the final order as it was what ended the issues raised there. This pronouncement was reiterated in the more recent case of Apuyan v. Haldeman et al.[14] where we again considered the order denying petitioner Apuyans motion for reconsideration as the final order which finally disposed of the issues involved in the case. Based on the aforementioned cases, we sustain petitioners view that the order dated July 1, 1998 denying their motion for reconsideration was the final order contemplated in the Rules. We now come to the next question: if July 1, 1998 was the start of the 15-day reglementary period to appeal, did petitioners in fact file their notice of appeal on time? Under Rule 41, Section 3, petitioners had 15 days from notice of judgment or final order to appeal the decision of the trial court. On the 15th day of the original appeal period (March 18, 1998), petitioners did not file a notice of appeal but instead opted to file a motion for reconsideration. According to the trial court, the MR only interrupted the running of the 15-day appeal period.[15] It ruled that petitioners, having filed their MR on the last day of the 15-day reglementary period to appeal, had only one (1) day left to file the notice of appeal upon receipt of the notice of denial of their MR. Petitioners, however, argue that they were entitled under the Rules to a fresh period of 15 days from receipt of the final order or the order dismissing their motion for reconsideration. In Quelnan and Apuyan, both petitioners filed a motion for reconsideration of the decision of the trial court. We ruled there that they only had the remaining time of the 15-day appeal period to file the notice of appeal. We consistently applied this rule in similar cases,[16] premised on the long-settled doctrine that the perfection of an appeal in the manner and within the period permitted by law is not only mandatory but also jurisdictional.[17] The rule is also founded on deep-seated considerations of public policy and sound practice that, at risk of occasional error, the judgments and awards of courts must become final at some definite time fixed by law.[18] Prior to the passage of BP 129, Rule 41, Section 3 of the 1964 Revised Rules of Court read: Sec. 3. How appeal is taken. Appeal maybe taken by serving upon the adverse party and filing with the trial court within thirty (30) days from notice of order or judgment, a notice of appeal, an appeal bond, and a record on appeal. The time during which a motion to set aside the judgment or order or for new trial has been pending shall be deducted, unless such motion fails to satisfy the requirements of Rule 37.

But where such motion has been filed during office hours of the last day of the period herein provided, the appeal must be perfected within the day following that in which the party appealing received notice of the denial of said motion.[19] (emphasis supplied) According to the foregoing provision, the appeal period previously consisted of 30 days. BP 129, however, reduced this appeal period to 15 days. In the deliberations of the Committee on Judicial Reorganization[20] that drafted BP 129, the raison d etre behind the amendment was to shorten the period of appeal[21] and enhance the efficiency and dispensation of justice. We have since required strict observance of this reglementary period of appeal. Seldom have we condoned late filing of notices of appeal,[22] and only in very exceptional instances to better serve the ends of justice. In National Waterworks and Sewerage Authority and Authority v. Municipality of Libmanan,[23] however, we declared that appeal is an essential part of our judicial system and the rules of procedure should not be applied rigidly. This Court has on occasion advised the lower courts to be cautious about not depriving a party of the right to appeal and that every party litigant should be afforded the amplest opportunity for the proper and just disposition of his cause, free from the constraint of technicalities. In de la Rosa v. Court of Appeals,[24] we stated that, as a rule, periods which require litigants to do certain acts must be followed unless, under exceptional circumstances, a delay in the filing of an appeal may be excused on grounds of substantial justice. There, we condoned the delay incurred by the appealing party due to strong considerations of fairness and justice. In setting aside technical infirmities and thereby giving due course to tardy appeals, we have not been oblivious to or unmindful of the extraordinary situations that merit liberal application of the Rules. In those situations where technicalities were dispensed with, our decisions were not meant to undermine the force and effectivity of the periods set by law. But we hasten to add that in those rare cases where procedural rules were not stringently applied, there always existed a clear need to prevent the commission of a grave injustice. Our judicial system and the courts have always tried to maintain a healthy balance between the strict enforcement of procedural laws and the guarantee that every litigant be given the full opportunity for the just and proper disposition of his cause.[25] The Supreme Court may promulgate procedural rules in all courts.[26] It has the sole prerogative to amend, repeal or even establish new rules for a more simplified and inexpensive process, and the speedy disposition of cases. In the rules governing appeals to it and to the Court of Appeals, particularly Rules 42,[27] 43[28] and 45,[29] the Court allows extensions of time, based on justifiable and compelling reasons, for parties to file their appeals. These extensions may consist of 15 days or more. To standardize the appeal periods provided in the Rules and to afford litigants fair opportunity to appeal their cases, the Court deems it practical to allow a fresh period of 15 days within which to file the notice of appeal in the Regional Trial Court, counted from receipt of the order dismissing a motion for a new trial or motion for reconsideration. [30] Henceforth, this fresh period rule shall also apply to Rule 40 governing appeals from the Municipal Trial Courts to the Regional Trial Courts; Rule 42 on petitions for review from the Regional Trial Courts to the Court of Appeals; Rule 43 on appeals from quasi-judicial agencies[31] to the Court of Appeals and Rule 45 governing appeals by certiorari to the Supreme Court.[32] The new rule aims to regiment or make the appeal period uniform, to be counted from receipt of the order denying the motion for new trial, motion for reconsideration (whether full or partial) or any final order or resolution. We thus hold that petitioners seasonably filed their notice of appeal within the fresh period of 15 days, counted from July 22, 1998 (the date of receipt of notice denying their motion for reconsideration). This

pronouncement is not inconsistent with Rule 41, Section 3 of the Rules which states that the appeal shall be taken within 15 days from notice of judgment or final order appealed from. The use of the disjunctive word or signifies disassociation and independence of one thing from another. It should, as a rule, be construed in the sense in which it ordinarily implies.[33] Hence, the use of or in the above provision supposes that the notice of appeal may be filed within 15 days from the notice of judgment or within 15 days from notice of the final order, which we already determined to refer to the July 1, 1998 order denying the motion for a new trial or reconsideration. Neither does this new rule run counter to the spirit of Section 39 of BP 129 which shortened the appeal period from 30 days to 15 days to hasten the disposition of cases. The original period of appeal (in this case March 318, 1998) remains and the requirement for strict compliance still applies. The fresh period of 15 days becomes significant only when a party opts to file a motion for new trial or motion for reconsideration. In this manner, the trial court which rendered the assailed decision is given another opportunity to review the case and, in the process, minimize and/or rectify any error of judgment. While we aim to resolve cases with dispatch and to have judgments of courts become final at some definite time, we likewise aspire to deliver justice fairly. In this case, the new period of 15 days eradicates the confusion as to when the 15-day appeal period should be counted from receipt of notice of judgment (March 3, 1998) or from receipt of notice of final order appealed from (July 22, 1998). To recapitulate, a party litigant may either file his notice of appeal within 15 days from receipt of the Regional Trial Courts decision or file it within 15 days from receipt of the order (the final order) denying his motion for new trial or motion for reconsideration. Obviously, the new 15-day period may be availed of only if either motion is filed; otherwise, the decision becomes final and executory after the lapse of the original appeal period provided in Rule 41, Section 3. Petitioners here filed their notice of appeal on July 27, 1998 or five days from receipt of the order denying their motion for reconsideration on July 22, 1998. Hence, the notice of appeal was well within the fresh appeal period of 15 days, as already discussed.[34] We deem it unnecessary to discuss the applicability of Denso (Philippines), Inc. v. IAC[35] since the Court of Appeals never even referred to it in its assailed decision. WHEREFORE, the petition is hereby GRANTED and the assailed decision of the Court of Appeals REVERSED and SET ASIDE. Accordingly, let the records of this case be remanded to the Court of Appeals for further proceedings. No costs. SO ORDERED.

FIRST DIVISION

COMMISSIONER OF INTERNAL REVENUE, Petitioner, - versus-

MIRANTii[1] PAGBILAO CORPORATION (formerly SOUTHERN ENERGY QUEZON, I G.R. No. 159593 Present: PANGANIBAN, C.J.Chairperson, YNARES-SANTIAGO,AUSTRIA MARTINEZ, CALLEJO, SR., and CHICO-NAZARIO, JJ. Promulgated:October12, 2006 NC.), Respondent. x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x DECISION CHICO-NAZARIO, J.: Before this Court is a Petition for Reviewii[2] under Rule 45 of the 1997 Rules of Civil Procedure assailing the Decision,ii[3] dated 30 July 2003, of the Court of Appeals in CA-G.R. SP No. 60783, which affirmed in toto the Decision,ii[4] dated 11 July 2000, of the Court of Tax Appeals (CTA) in CTA Case No. 5658. The CTA partially granted the claim of herein respondent Mirant Pagbilao Corporation (MPC) for the refund of the input Value Added Tax (VAT) on its

purchase of capital goods and services for the period 1 April 1996 to 31 December 1996, and ordered herein petitioner Commissioner of the Bureau of Internal Revenue (BIR) to issue a tax credit certificate in the amount of P28,744,626.95. There is no dispute as to the following facts that gave rise to the claim for refund of MPC, as found by the CTAii[5]
[MPC] is a domestic corporation duly organized and existing under and by virtue of the laws of the Philippines with principal office address in Pagbilao Grande Island, Pagbilao, Quezon. It is licensed by the Securities and Exchange Commission to principally engage in the business of power generation and subsequent sale thereof (Exh. A). It is registered with the Bureau of Internal Revenue as a VAT registered entity with Certificate of Registration bearing RDO Control No. 96-600-002498, dated January 26, 1996. For the period April 1, 1996 to December 31, 1996, [MPC] seasonably filed its Quarterly VAT Returns reflecting an (sic) accumulated input taxes in the amount of P39,330,500.85 (Exhs. B, C, and D). These input taxes were allegedly paid by [MPC] to the suppliers of capital goods and services for the construction and development of the power generating plant and other related facilities in Pagbilao, Quezon (TSN, November 16, 1998, p. 11). Pursuant to the procedures prescribed under Revenue Regulations No. 7-95, as amended, [MPC] filed on June 30, 1998, an application for tax credit or refund of the aforementioned unutilized VAT paid on capital goods (Exhibit E). Without waiting for an answer from the [BIR Commissioner], [MPC] filed the instant petition for review on July 10, 1998, in order to toll the running of the two-year prescriptive period for claiming a refund under the law. In answer to the Petition, [the BIR Commissioner] advanced as special and affirmative defenses that *MPC+s claim for refund is still pending investigation and consideration before the office of *the BIR Commissioner] accordingly, the filing of the present petition is premature; well-settled is the doctrine that provisions in tax refund and credit are construed strictly against the taxpayer as they are in the nature of a tax exemption; in an action for refund or tax credit, the taxpayer has the burden to show that the taxes paid were erroneously or illegally paid and failure to sustain the said burden is fatal to the action for refund; it is incumbent upon [MPC] to show that the claim for tax credit has been filed within the prescriptive period under the Tax Code; and the taxes allegedly paid by [MPC] are presumed to have been collected and received in accordance with law and revenue regulations.*+ On July 14, 1998, while the case was pending trial, Revenue Officer, Rosemarie M. Vitto, was assigned by Revenue District Officer, Ma. Nimfa Penalosa-Asensi, of Revenue District No. 60 to investigate *MPC+s application for tax credit or refund of input taxes (Exhs. 1 and 1-a). As a result, a memorandum report, dated August 27, 1998, was submitted recommending a favorable action but in a reduced amount of P49,616.40 representing unapplied input taxes on capital goods. (Exhs. 2, 2-a, 3, and 3-a).

[MPC], due to the voluminous nature of evidence to be presented, availed of the services of an independent Certified Public Accountant pursuant to CTA Circular No. 1-95, as amended. As a consequence, Mr. Ruben R. Rubio, Partner of SGV & Company, was commissioned to verify the accuracy of *MPC+s summary of input taxes (TSN, October 15, 1998, pp. 3-5). A report, dated March 8, 1999, was presented stating the audit procedures performed and the finding that out of the total claimed input taxes of P39,330,500.85, only the sum of P28,745,502.40 was properly supported by valid invoices and/or official receipts (Exh. G; see also TSN, March 3, 1999, p. 12).

The CTA ruled in favor of MPC, and declared that MPC had overwhelmingly proved, through the VAT invoices and official receipts it had presented, that its purchases of goods and services were necessary in the construction of power plant facilities which it used in its business of power generation and sale. The tax court, however, reduced the amount of refund to which MPC was entitled, in accordance with the following computation
Total amount of the claim for refund Less: Disallowances a. Per independent auditor b. Per CTAs examination P39,330,500.85 P10,584,998.45 875.45

10,585,873.90 P28,744,626.95ii[6]

Thus, the dispositive portion of the CTA Decision,ii[7] dated 11 July 2000, reads WHEREFORE, in view of the foregoing, *MPC+s claim for refund is hereby partially GRANTED. [The BIR Commissioner] is ORDERED to ISSUE A TAX CREDIT CERTIFICATE in the amount of P28,744,626.95 representing input taxes paid on capital goods for the period April 1, 1996 to December 31, 1996.

The CTA subsequently denied the BIR Commissioners Motion for Reconsideration in a Resolution,ii[8] dated 31 August 2001. Aggrieved, the BIR Commissioner filed with the Court of Appeals a Petition for Reviewii[9] of the foregoing Decision, dated 11 July 2000, and Resolution, dated 31 August 2001, of the CTA. Notably, the BIR Commissioner identified and discussed as groundsii[10] for its Petition arguments that were totally new and were never raised before the CTA, to wit

1. RESPONDENT BEING AN ELECTRIC UTILITY, IT IS SUBJECT TO FRANCHISE TAX UNDER THEN SECTION 117 (NOW SECTION 119) OF THE TAX CODE AND NOT TO VALUE ADDED TAX (VAT). 2. SINCE RESPONDENT IS EXEMPT FROM VAT, IT IS NOT ENTITLED TO THE REFUND OF INPUT VAT PURSUANT TO SECTION 4.103-1 OF REVENUE REGULATIONS NO. 7-95.

The Court of Appeals found no merit in the BIR Commissioners Petition, and in its Decision, dated 30 July 2003, it pronounced that: (1) The BIR Commissioner cannot validly change his theory of the case on appeal; (2) The MPC is not a public utility within the contemplation of law; (3) The sale by MPC of its generated power to the National Power Corporation (NAPOCOR) is subject to VAT at zero percent rate; and (4) The MPC, as a VAT-registered taxpayer, may apply for tax credit. Accordingly, the decretal portion of the said Decisionii[11] reads as follows
WHEREFORE, premises considered, the Petition is DISMISSED for lack of merit and the assailed 11 July 2000 Decision of respondent Court in CTA Case No. 5658 is hereby AFFIRMED in toto. No costs.

Refusing to give up his cause, the BIR Commissioner filed the present Petition before this Court on the ground that the Court of Appeals committed reversible error in affirming the Decision of the CTA holding respondent entitled to the refund of the amount of P28,744,626.95, allegedly representing input VAT on capital goods and services for the period 1 April 1996 to 31 December 1996. He argues that (1) The observance of procedural rules may be relaxed considering that technicalities are not ends in themselves but exist to protect and promote the substantive rights of the parties; and (2) A tax refund is in the nature of a tax exemption which must be construed strictly against the taxpayer. He reiterates his position before the Court of Appeals that MPC, as a public utility, is exempt from VAT, subject instead to franchise tax and, thus, not entitled to a refund of input VAT on its purchase of capital goods and services. This Court finds no merit in the Petition at bar

The general rule is that a party cannot change his theory of the case on appeal. To recall, the BIR Commissioner raised in its Answerii[12] before the CTA the following special and affirmative defenses
3. *MPC+s claim for refund is still pending investigation and consideration before the office of *the BIR Commissioner]. Accordingly, the present petition is premature; 4. Well-settled is the doctrine that provisions in tax refund and credit are construed strictly against the taxpayer as they are in the nature of a tax exemption; 5. In an action for refund or tax credit, the taxpayer has the burden to show that the taxes paid were erroneously or illegally paid and failure to sustain the said burden is fatal to the action for refund; 6. It is incumbent upon [MPC] to show that the claim for tax credit has been filed within the prescriptive period under the tax code; 7. The taxes allegedly paid by [MPC] are presumed to have been collected and received in accordance with law and revenue regulations.

These appear to be general and standard arguments used by the BIR to oppose any claim by a taxpayer for refund. The Answer did not posit any allegation or contention that would defeat the particular claim for refund of MPC. Trial proper ensued before the CTA, during which the MPC presented evidence of its entitlement to the refund and in negation of the afore-cited defenses of the BIR Commissioner. It was only after the CTA promulgated its Decision on 11 July 2000, which was favorable to MPC and adverse to the BIR Commissioner, that the latter filed his Petition for Review before the Court of Appeals on 4 October 2000, averring, for the very first time, that MPC was a public utility, subject to franchise tax and not VAT; and since it was not paying VAT, it could not claim the refund of input VAT on its purchase of capital goods and services.

There is a palpable shift in the BIR Commissioners defense against the claim for refund of MPC and an evident change of theory. Before the CTA, the BIR Commissioner admitted that the MPC is a VAT-registered taxpayer, but charged it with the burden of proving its entitlement to refund. However, before the Court of

Appeals, the BIR Commissioner, in effect denied that the MPC is subject to VAT, making an affirmative allegation that it is a public utility liable, instead, for franchise tax. Irrefragably, the BIR Commissioner raised for the first time on appeal questions of both fact and law not taken up before the tax court, an actuality which the BIR Commissioner himself does not deny, but he argues that he should be allowed to do so as an exception to the technical rules of procedure and in the interest of substantial justice.

It is already well-settled in this jurisdiction that a party may not change his theory of the case on appeal.ii[13] Such a rule has been expressly adopted in Rule 44, Section 15 of the 1997 Rules of Civil Procedure, which provides SEC. 15. Questions that may be raised on appeal. Whether or not the appellant has filed a motion for new trial in the court below, he may include in his assignment of errors any question of law or fact that has been raised in the court below and which is within the issues framed by the parties.

Thus, in Carantes v. Court of Appeals,ii[14] this Court emphasized that


The settled rule is that defenses not pleaded in the answer may not be raised for the first time on appeal. A party cannot, on appeal, change fundamentally the nature of the issue in the case. When a party deliberately adopts a certain theory and the case is decided upon that theory in the court below, he will not be permitted to change the same on appeal, because to permit him to do so would be unfair to the adverse party.

In the more recent case of Mon v. Court of Appeals,ii[15] this Court again pronounced that, in this jurisdiction, the settled rule is that a party cannot change his theory of the case or his cause of action on appeal. It affirms that courts of justice have no jurisdiction or power to decide a question not in issue. Thus, a judgment that goes beyond the issues and purports to adjudicate something on which the court did not hear the parties, is not only irregular but also extrajudicial and invalid. The rule rests on the fundamental tenets of fair play.
The BIR Commissioner pleads with this Court not to apply the foregoing rule to the instant case, for a rule on technicality should not defeat substantive justice. The BIR Commissioner apparently forgets that there are specific reasons why technical or procedural rules are imposed upon the courts, and that compliance with these rules, should still be the general course of action. Hence, this Court has expounded that Procedural rules, we must stress, should be treated with utmost respect and due regard since they are designed to facilitate the adjudication of cases to remedy the worsening problem of delay in the resolution of rival claims and in the administration of justice. The requirement is in pursuance to the bill of rights inscribed in the Constitution which guarantees that all persons shall have a right to the speedy disposition of their cases before all judicial, quasi-judicial and administrative bodies. The adjudicatory bodies and the parties to a case are thus enjoined to abide strictly by the rules. While it is true that a litigation is not a game of technicalities, it is equally true that every case must be prosecuted in accordance with the prescribed procedure to ensure an orderly and speedy administration of justice. There have been some instances wherein

this Court allowed a relaxation in the application of the rules, but this flexibility was never intended to forge a bastion for erring litigants to violate the rules with impunity. A liberal
interpretation and application of the rules of procedure can be resorted to only in proper cases and under justifiable causes and circumstances.ii[16]

The courts have the power to relax or suspend technical or procedural rules or to except a case from their operation when compelling reasons so warrant or when the purpose of justice requires it. What constitutes good and sufficient cause that would merit suspension of the rules is discretionary upon the courts.ii[17]

In his Petition and Memorandum before this Court, the BIR Commissioner made no attempt to provide reasonable explanation for his failure to raise before the CTA the issue of MPC being a public utility subject to franchise tax rather than VAT. The BIR Commissioner argues, in a singular paragraph in his Petition,ii[18] subsequently reproduced in his Memorandum,ii[19] that the Court of Appeals should have taken cognizance of the said issue, although it was raised for the first time on appeal, entirely on the basis of this Courts ruling in Sy v. Court of Appeals.ii[20] He contends that

The submission fails to take into account that although this Honorable Court has repeatedly ruled that litigants cannot raise an issue for the first time on appeal, as this would contravene the basic rules of justice and fair play, the observance of procedural rules may be relaxed, noting that technicalities are not ends in themselves but exist to protect and promote the substantive rights of the litigants (Sy v. Court of Appeals, 330 SCRA 570 [2000]).

This Court is unconvinced. There is no sufficient cause to warrant the relaxation of technical or procedural rules in the instant case. The general rules of procedure still apply and the BIR Commissioner cannot be allowed to raise an issue for the first time on appeal.

It should be emphasized that the BIR Commissioner is invoking a suspension of the general rules of procedure or an exception thereto, thus, it is incumbent upon him to present sufficient cause or justifiable circumstance that would qualify his case for such a suspension or exception. That this Court had previously allowed in another case such suspension of or exception to technical or procedural rules does not necessarily mean that the same shall also be allowed in the present case. The BIR Commissioner has the burden of persuading this Court that the same causes or circumstances that justified the suspension of or exception to the technical or procedural rules in the other case are also present in the case at bar.

The Sy case, on which the BIR Commissioner fully anchored his claim for suspension of or exception to the technical or procedural rules, is not even on all fours with his case. It involves a petition for declaration of nullity of marriage instituted by the therein petitioner Filipina Sy before the Regional Trial Court (RTC) on the basis of the alleged psychological incapacity of her husband, Fernando Sy. Her petition was denied by the RTC because it found that Fernandos acts did not constitute psychological incapacity, a finding later affirmed by the Court of Appeals. In an appeal by certiorari before this Court, Filipina raised the issue that her marriage to Fernando was void from the very beginning for lack of a marriage license at the time of the ceremony. This Court took cognizance of the said issue, reversed the RTC and the Court of Appeals, and ruled in favor of Filipina. Its ratiocination on the matter is reproduced in full below

Petitioner, for the first time, raises the issue of the marriage being void for lack of a valid marriage license at the time of its celebration. It appears that, according to her, the date of the actual celebration of their marriage and the date of issuance of their marriage certificate and marriage license are different and incongruous. Although we have repeatedly ruled that litigants cannot raise an issue for the first time on appeal, as this would contravene the basic rules of fair play and justice, in a number of instances, we have relaxed observance of procedural rules, noting that technicalities are not ends in themselves but exist to protect and promote substantive rights of litigants. We said that certain rules ought not to be applied with severity and rigidity if by so doing, the very reason for their existence would be defeated. Hence, when substantial justice plainly requires, exempting a particular case from the operation of technicalities should not be subject to cavil. In our view, the case at bar requires that we address the issue of the validity of the marriage between Filipina and Fernando which petitioner claims is void from the beginning for lack of a marriage license, in order to arrive at a just resolution of a deeply seated and violent conflict between the parties. Note, however, that here the pertinent facts are not disputed; and what is required now is a declaration of their effects according to existing law.ii[21] [Emphasis supplied.]

In the instant case, the conflict between the MPC and the BIR Commissioner could be hardly described as deeply seated and violent, it remaining on a professional level. Moreover, this Court pointed out in the Sy case that the pertinent facts, i.e., the dates of actual celebration of the marriage, issuance of the marriage certificate, and issuance of the marriage license, were undisputed. The same cannot be said in the case at bar. That MPC is a public utility is not an undisputed fact; on the contrary, the determination thereof gives rise to

a multitude of other questions of fact and law. It is a mere deduction on the part of the BIR Commissioner that since the MPC is engaged in the generation of power, it is a public utility. The MPC contests this arguing that it is not a public utility because it sells its generated power to NAPOCOR exclusively, and not to the general public. It asserts that it is subject to VAT and that its sale of generated electricity to NAPOCOR is subject to zero-rated VAT. Substantial justice, in such a case, requires not the allowance of issues raised for the first time on appeal, but that the issue of whether MPC is a public utility, and the correlated issue of whether MPC is subject to VAT or franchise tax, be raised and threshed out in the first opportunity before the CTA so that either party would have fully presented its evidence and legal arguments in support of its position and to contravene or rebut those of the opposing party. In Atlas Consolidated Mining & Development Corp. v. Commissioner of Internal Revenue,ii[22] this Court held that it was too late for the BIR Commissioner to raise an issue of fact of payment for the first time in his memorandum in the CTA and in his appeal to this Court. If raised earlier, the matter ought to have been seriously delved into by the CTA. On this ground, this Court was of the opinion that under all the attendant circumstances of the case, substantial justice would be served if the BIR Commissioner be held as precluded from attempting to raise the issue at this stage. Failure to assert a question within a reasonable time warrants a presumption that the party entitled to assert it either has abandoned or declined to assert it. Therefore, the Court of Appeals correctly refused to consider the issues raised by the BIR Commissioner for the first time on appeal. Its discussion on whether the MPC is a public utility and whether it is subject to VAT or franchise tax is nothing more than obiter dictum. It is best not at all to discuss these issues for they do not simply involve questions of law, but also closely-related questions of factii[23] which neither the Court of Appeals nor this Court could presume or garner from the evidence on record.

II
Input VAT on capital goods and services may be the subject of a claim for refund.
The MPC bases its claim for refund of its input VAT on Section 106(b) of the Tax Code of 1986, as amended by Republic Act No. 7716,ii[24] which provides Sec. 106. Refunds or tax credits of creditable input tax. xxxx (b) Capital goods. - A VAT-registered person may apply for the issuance of a tax credit certificate or refund of input taxes paid on capital goods imported or locally purchased, to the extent that such input taxes have not been applied against output taxes. The application may be made only within two (2) years, after the close of the taxable quarter when the importation or purchase was made. Capital goods or properties, as defined in Revenue Regulations No. 7-95, the implementing rules on VAT, are goods and properties with estimated useful life greater than one year and which are treated as depreciable assets under Section 29(f), used directly or indirectly in the production or sale of taxable goods or services.ii[25] Contrary to the argument of the BIR Commissioner, input VAT on capital goods is among those expressly recognized as creditable input tax by Section 104(a) of the Tax Code of 1986, as amended by Rep. Act No. 7716,ii[26] to wit

Sec. 104. Tax Credits. - (a) Creditable input tax. - Any input tax evidenced by a VAT invoice or official receipt issued in accordance with Section 108 hereof on the following transactions shall be creditable against the output tax: (1) (A) Purchase or importation of goods: For sale; or

(B) For conversion into or intended to form part of a finished product for sale including packing materials; or (C) (D) For use as supplies in the course of business; or For use as materials supplied in the sale of service; or

(E) For use in trade or business for which deduction for depreciation or amortization is allowed under this Code, except automobiles, aircraft and yachts. [Emphasis supplied.]

Thus, goods and properties used by the taxpayer in its VAT-taxable business, subject to depreciation or amortization in accordance with the Tax Code, are considered capital goods. Input VAT on the purchase of such capital goods is creditable against the taxpayers output VAT. The taxpayer is further given the option, under Section 106(b) of the Tax Code of 1986, as amended by Republic Act No. 7716, to claim refund of the input VAT on its capital goods, but only to the extent that the said input VAT has not been applied to its output VAT. This Court, likewise, will not give credence to the B IR Commissioners contention that the claim for refund of input VAT on capital goods by the MPC should be denied for the latters failure to comply with the requirements for the refund of input VAT credits on zero-rated sales provided in Section 16 of Revenue Regulations No. 5-87, as amended by Revenue Regulations No. 3-88. The BIR Commissioner is apparently confused. MPC is claiming refund of the input VAT it has paid on the purchase of capital goods, it is not claiming refund of its input VAT credits attributable to its zero-rated sales. These are two different input VAT credits, arising from distinct transactions, although both may be the subject of claims for refund by the taxpayer.ii[27] Indeed, the very same regulation invoked by the BIR Commissioner, Revenue Regulations No. 5-87, as amended, distinguishes between these two refundable input VAT credits and discusses them in two separate paragraphs: Section 16(a) on zero-rated sales of goods and services, and Section 16(b) on capital goods. It is also worth noting that Revenue Regulations No. 7-95, issued on 9 December 1995, which Still, Revenue

consolidated all VAT regulations, already superseded Revenue Regulations No. 5-87.

Regulations No. 7-95 maintains the distinction between these two input VAT credits, discussing the zero-rated sales of goods or properties or services in Section 4.106-1(a), and capital goods in Section 4.106-1(b). Hence, the present claim for refund of input VAT on capital goods filed by MPC need not comply with the requirements for refund of input VAT attributable to zero-rated sales.

III
There is no reason for this Court to disturb the findings of fact of the CTA, as affirmed by the Court of Appeals.

While it is true, as the BIR Commissioner alleges, that the MPC has the burden of proving that it is entitled to the refund it is claiming for, both the CTA and Court of Appeals had ruled that the MPC presented substantial evidence to support its claim for refund of its input VAT on capital goods and services in the amount of P28,744,626.95. The CTA found that MPC is registered as a VAT-taxpayer, as evidenced by its Certificate of Registration, issued by the BIR Revenue District Office (RDO) No. 60, on 26 January 1996. The BIR Commissioner does not contest this fact, and does not offer any explanation as to why the BIR RDO had approved the registration of MPC as a VAT-taxpayer when, as the BIR Commissioner is now asserting, the MPC is not subject to VAT but to franchise tax. The MPC had been filing its VAT Quarterly Returns, including those for the period covered by its claim for refund, 1 April 1996 to 31 December 1996, reporting and reflecting therein the input VAT it had paid on its purchase of capital goods and services. These capital goods and services were necessary in the construction of the power plant facilities used by MPC in electric power generation. The VAT invoices and receipts submitted by MPC, in support of its claim for refund, had been examined and evaluated by an independent auditor, as well as by the CTA itself. Thus, from the original amount of P39,330,500.85 claimed by MPC for refund, the independent auditor, SGV & Co., found only the sum of P28,745,502.40 sufficiently supported by valid invoices and/or official receipts. Following its own examination and evaluation of the evidence submitted, the CTA further reduced the amount refundable to P28,744,626.95 after disallowing the input VAT on the purchase of xerox and office supplies which cannot be capitalized and not necessary in the construction of power plant facilities.ii[28] It is worth noting that the foregoing findings by the CTA were affirmed in totality by the Court of Appeals. Likewise, this Court finds no reason to disturb the foregoing findings of the tax court. Another well-settled principle in this jurisdiction is that this Court is bound by the findings of fact of the CTA. Only errors of law, and not rulings on the weight of evidence, are reviewable by this Court. Findings of fact of the CTA are not to be disturbed unless clearly shown to be unsupported by substantial evidence.ii[29] Quite the reverse, the claim of MPC for refund of input VAT on its purchase of capital goods and services in the present case is found to be supported by substantial evidence, not just by the CTA, but also by the Court of Appeals. The BIR Commissioner failed to convince this Court otherwise.
IV The

BIR should seriously study and consider each and every application for claim for

refund pending before it.

As a final point, this Court would like to call the attention of the BIR Commissioner, as well as the responsible BIR officers, to seriously study and consider each and every application for claim for refund filed before their office. It is very obvious to this Court that the Answer filed by the BIR Commissioner before the Court of Appeals, which it essentially reproduced as its Memorandum before the same court, presented general and pro forma arguments. The BIR Commissioner only raised belatedly before the Court of Appeals the issues of whether MPC is a public utility and whether it is subject to franchise tax and not VAT. Even then, his Petition for Review before the appellate court, numbering only six pages, with only one page devoted to a discussion of the merits of his Petition, left much to be desired and would hardly persuade any court. Since he represents the interest of the government in tax cases, the BIR Commissioner should exert more effort and exercise more diligence in preparing his pleadings before any court; he should not wait to do so only upon appeal of his case to the higher court. This Court may not always be inclined to allow him to remedy his past laxity. IN VIEW OF THE FOREGOING, the instant Petition is hereby DENIED. The Decision, dated 30 July 2003, of the Court of Appeals in CA-G.R. SP No. 60783, which affirmed in toto the Decision, dated 11 July 2000, of the CTA in CTA Case No. 5658, is hereby AFFIRMED. The BIR Commissioner is hereby ORDERED to issue in favor of MPC a tax credit certificate in the amount of P28,744,626.95 representing input VAT paid on capital goods and services for the period of 1 April 1996 to 31 December 1996. No pronouncement as to costs.

SO ORDERED.

THIRD DIVISION

GLICERIA Petitioner, - versus EMERITA ZARATAN,


Respondent. G.R. No. 167471

SARMIENTO,

Present: YNARES-SANTIAGO, Chairperson, J.

AUSTRIA-MARTINEZ, CALLEJO, SR., and CHICO-NAZARIO, JJ. Promulgated: February 5, 2007

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x DECISION CHICO-NAZARIO, J.:


This petition for Review on Certiorari under Rule 45 of the Rules of Court seeks to nullify the Court of Appeals Decisionii[1] in CA-G.R. SP No. 79001 entitled, Emerita Zaratan v. Hon. Ramon A. Cruz, as Presiding Judge of RTC, Quezon City, Branch 223, and Gliceria Sarmiento, dated 17 August 2004, which reversed and set side the Orders dated 19 June 2003 and 31 July 2003 of the Regional Trial Court (RTC) of Quezon City in Civil Case No. Q-03-49437, dismissing respondents appeal for failure to file the memorandum within the period provided for by law.

On 2 September 2002, petitioner Gliceria Sarmiento filed an ejectment caseii[2] against respondent Emerita Zaratan, in the Metropolitan Trial Court (MeTC) of Quezon City, Branch 36, docketed as Civil Case No. 29109. On 31 March 2003, the MeTC rendered a decision in favor of petitioner, the dispositive portion of which reads: WHEREFORE, the Court finds that plaintiff has sufficiently established her causes against the defendant and hereby order the defendant and all persons claiming rights under her: 1. to pay plaintiff the monthly rentals of P3,500.00 for the said premises from August 1, 2002 until defendant vacates the premises;

2.

to pay plaintiff the sum of P20,000.00 plus P1,500.00 per appearance of counsel in court, as and for attorneys fees; and to pay the cost of suit.ii[3]

Respondent filed her notice of appeal.ii[4] Thereafter, the case was raffled to the RTC of Quezon City, Branch 223, docketed as Civil Case No. Q-03-49437. In the Notice of Appealed Case,ii[5] the RTC directed respondent to submit her memorandum in accordance with the provisions of Section 7(b) of Rule 40 of the Rules of Court and petitioner to file a reply memorandum within 15 days from receipt. Respondents counsel having received the notice on 19 May 2003, he had until 3 June 2003 within which to file the requisite memorandum. But on 3 June 2003, he filed a Motion for Extension of Time of five days due to his failure to finish the draft of the said Memorandum. He cited as reasons for the delay of filing his illness for one week, lack of staff to do the work due to storm and flood compounded by the grounding of the computers because the wirings got wet.ii[6] But the motion remained un acted. On 9 June 2003, respondent filed her Memorandum. On 19 June 2003, the RTC dismissed the appeal as follows:
Record shows that defendant-appellant received the Notice of Appealed Case, through counsel, on May 19, 2003 (Registry Return Receipt dated May 12, 2003, Record, back of p. 298). Thus, under Section 7(b), Rule 40 of the 1997 Rules of Civil Procedure, she had fifteen (15) days or until June 3, 2003 within which to submit a memorandum on appeal. As further appears on record, however, the required Memorandum was filed by defendant-appellant only on June 9, 2003 (Record, p. 623), or six (6) days beyond the expiration of the aforesaid fifteen day period. It should be stressed that while the rules should be liberally construed, the provisions on reglemenatry periods are strictly applied as they are deemed indispensable to the prevention of needless delays and necessary to the orderly and speedy discharge of judicial business (Legaspi-Santos vs. Court of Appeals, G.R. No. 60577, October 11, 1983) and strict compliance therewith is mandatory and imperative (FJR Garments Industries vs. Court of Appeals, G.R. No. L-49329, June 29, 1984). The same is true with respect to the rules on the manner and periods for perfecting appeals (Gutierrez vs. Court of Appeals, L-25972, November 26, 1968). Premises considered, the instant appeal is hereby DISMISSED. This renders academic defendant-appellants application for a writ of preliminary injunction.ii[7]

On the basis of the above-quoted Order, petitioner filed a Motion for Immediate Execution,ii[8] while respondent moved for the Reconsideration.ii[9] Both motions were denied by the RTC on 31 July 2003. The Order in part reads:
In the main, defendant-appellants Motion for Reconsideration is premised on the argument that she filed a timely Motion for Extension of Time To File Memorandum, dated and filed on June 3, 2003, but that her motion was not acted upon by this Court. She adds that her appeal memorandum was filed well within the period sought by her in her Motion for Extension of Time to File Memorandum so that her appeal should not have been dismissed. The argument is without merit. This Court did not take cognizance of defendant-appellants Motion for Extension of Time to File Memorandum, and rightly so, because it did not contain a notice of hearing as required by Sections 4 and 5, Rule 15 of the Rules of Court, an omission for which it could offer no explanation. As declared in the case of Gozon, et al. v. court of Appeals (G.R. No. 105781, June 17, 1993); xxx It is well-entrenched in this jurisdiction that a motion does not meet the requirements of Sections 4 and 5 of Rule 15 of the Rules of Court is considered a worthless piece of paper which the clerk has no right to receive, and the court has no authority to act upon.

xxx Moreover, parties and counsel should not assume that courts are bound to grant the time they pray for. A motion that is not acted upon in due time is deemed denied (Orosa vs. Court of Appeals, 261 SCRA 376 [1996]). Thus, defendant-appellants appeal was properly dismissed on account of her failure to file an appeal memorandum within the fifteen (15) day period provided under Section 7(b), Rule 40 of the 1997 Rules of Civil Procedure. With regard to the Motion for Immediate Execution, dated June 23, 2003, filed by plaintiff appellee, the rule is explicit that the execution of a judgment in an ejectment case, must be sought with the inferior court which rendered the same. The appellate court which affirms a decision brought before it on appeal cannot decree its execution in the guise of an execution of the affirming decision. The only exception is when said appellate court grants an execution pending appeal, which is not the case herein (City of Manila vs. Court of Appeals, 204 SCRA 362; Sy vs. Romero, 214 SCRA 187).ii[10]

Petitioner moved for reconsideration of the said Order, while respondent sought clarification on whether the 31 July 2003 Order dismissing the appeal was anchored on Section (b), Rule 40 or Section 7(c) of the same Rule.

On 27 August 2003, the RTC reconsidered its previous Order by granting petitioners motion for Immediate Execution, but denied respondents Motion for Clarification, in this wise:
Section 21, Rule 70 of the Rules of Court provides that the judgment of the Regional Trial Court against the defendant shall be immediately executory, without prejudice to a further appeal that may be taken therefrom. Pursuant to this Rule and taking into account the arguments of the plaintiff in her Urgent Motion for Reconsideration, the Court is inclined to grant the same. As further correctly argued by the plaintiff, through counsel, during the hearing on her motion on August 15, 2003, the cases of City of Manila v. Court of Appeals (204 SCRA 362) and Sy vs. Romero (214 SCRA 187) cited in the July 31, 2003 Order refer to ejectment cases which has (sic) been decided with finality and hence, inapplicable to this case where a further appeal is still available to the defendant. It should likewise be noted that while the Supreme Court ruled in these cases that execution of a judgment in an ejectment case must be sought with the inferior court which rendered the same, it likewise provided that for an exception to this rule, that is, in cases where the appellate court grants an execution pending appeal, as the case herein. With regard to defendants Motion for Clarification, contained in her Opposition, the Court notes that the issues raised therein have already been squarely dealt with in the July 31, 2003 Order. The same must, therefore, be denied.ii[11]

Aggrieved, respondent filed a Petition for Certiorari in the Court of Appeals, which was granted in a decision dated 17 August 2004. The appellate court nullified and set aside the 19 June 2003 and 31 July 2003 Orders of the RTC and ordered the reinstatement of respondents appeal. Consequently, respondents appeal memorandum was admitted and the case remanded to the RTC for further proceedings.ii[12] Petitioner filed a motion for reconsiderationii[13] on 13 September 2004, followed by a Motion for Inhibitionii[14] of the members of the Eighth Division of the Court of Appeals on 20 September 2004. Both motions were denied for lack of merit on 10 March 2005.ii[15] Hence, this appeal by petitioner posing the following issues,ii[16] thus: 1. 2. Whether respondents petition for certiorari should have been dismissed in the first place; Whether the trial court committed grave abuse of discretion in denying respondents motion for extension; Whether it is Section 19 of Rule 7 that applies, and not Section 21; and Whether the Court of Appeals Justices should have inhibited themselves from further proceeding with the subject case.

3.
4.

Stated otherwise, the main issue for resolution is whether the Court of Appeals committed a reversible error of law in granting the Writ of Certiorari. In granting the petition, the Court of Appeals ruled that the RTC erred in dismissing respondents appeal for failure to file the required Memorandum within the period provided by law and in granting petitioners Motion for Immediate Execution of the MeTC decision. Before resolving the substantive issues raised by petitioner, the Court will first address the procedural infirmities ascribed by petitioner. Petitioner assails the correctness and propriety of the remedy resorted to by respondent by filing a Petition for Certiorari in the Court of Appeals. According to petitioner, certiorari is not appropriate and unavailing as the proper remedy is an appeal. It must be noted that respondents appeal in the RTC was dismissed for failure to file t he required memorandum within the period allowed by law, as the Motion for Extension of Time to file Memorandum was not acted upon for failure to attach a notice of hearing. From the said dismissal, respondent filed a Petition for Certiorari in the Court of Appeals. Respondent correctly filed said petition pursuant to Section 41 of the Rules of Court, which provides: Section 1. Subject of appeal. An appeal may be taken from a judgment or final order that completely disposes of the case, or of a particular matter therein when declared by these Rules to be appealable. No appeal may be taken: xxxx (d) An order disallowing or dismissing an appeal;
xxxx

In all the above instances where the judgment or final order is not appealable, the aggrieved party may file an appropriate civil action under Rule 65. (Underscoring supplied.) Petitioner also contends that the Petition for Certiorari filed in the Court of Appeals should be dismissed as the certification of non-forum shopping was defective. The verification in part reads: I, EMERITA ZARATAN, of legal age, after having been duly sworn to, according to law, depose and say: That I, Emerita Zaratan is one of the respondent (sic) in the above entitled case, hereby declare, that I have caused the preparation and filing of the foregoing Comment

on the Petition; that I have read all the allegations therein, which are true and correct to the best of my own knowledge. That as respondent, I further certify that I have not commenced any other action or proceeding involving the same issues in the foregoing Petition in the Court of Appeals, the Supreme Court, or different Divisions thereof, respectively, or any tribunal, or agency; and should it be known that a similar action or proceeding has been filed or is pending in any of the abovementioned Courts or different Divisions thereof, the petitioner shall notify the Honorable Court to which this certification is filed, within five (5) days from such notice. (Underscoring ours.) Petitioner avers that respondent by stating in the above-quoted certification that she was the respondent, while in truth she was the petitioner and by stating that respondent caused the preparation of the comment on the petition, instead of the petition itself, indicate that respondent did not understand what she was signing. The defect of the verification all renders the petition in the Court of Appeals without legal effect and constitutes ground for its dismissal. The contention is baseless The purpose of requiring a verification is to secure an assurance that the allegations of the petition have been made in good faith, or are true and correct, not merely speculative. This requirement is simply a condition affecting the form of pleadings and non-compliance therewith does not necessarily render it fatally defective.ii[17] Perusal of the verification in question shows there was sufficient compliance with the

requirements of the Rules and the alleged defects are not so material as to justify the dismissal of the petition in the Court of Appeals. The defects are mere typographical errors. There appears to be no intention to

circumvent the need for proper verification and certification, which are intended to assure the truthfulness and correctness of the allegations in the petition and to discourage forum shopping.ii[18] Now, the substantial issues Corollary to the dismissal of the appeal by the RTC is the question of whether the lack of notice of hearing in the Motion for Extension of Time to file Memorandum on Appeal is fatal, such that the filing of the motion is a worthless piece of paper. Petitioner avers that, because of the failure of respondent to include a Notice of Hearing in her Motion for Extension of Time to file Memorandum on Appeal in the RTC, the latters motion is a worthless piece of paper with no legal effect.

It is not disputed that respondent perfected her appeal on 4 April 2003 with the filing of her Notice of Appeal and payment of the required docket fees. However, before the expiration of time to file the

Memorandum, she filed a Motion for Extension of Time seeking an additional period of five days within which to file her Memorandum, which motion lacked the Notice of Hearing required by Section 4, Rule 15 of the 1997 Rules of Court which provides:
SEC. 4. Hearing of Motion. - Except for motions which the court may act upon without prejudicing the rights of the adverse party, every written motion shall be set for hearing by the applicant. Every written motion required to be heard and the notice of the hearing thereof shall be served in such a manner as to ensure its receipt by the other party at least three (3) days before the date of hearing, unless the court for good cause sets the hearing on shorter notice.

As may be gleaned above and as held time and again, the notice requirement in a motion is mandatory. As a rule, a motion without a Notice of Hearing is considered pro forma and does not affect the reglementary period for the appeal or the filing of the requisite pleading.ii[19] As a general rule, notice of motion is required where a party has a right to resist the relief sought by the motion and principles of natural justice demand that his right be not affected without an opportunity to be heard.ii[20] The three-day notice required by law is intended not for the benefit of the movant but to avoid surprises upon the adverse party and to give the latter time to study and meet the arguments of the motion.ii[21] Principles of natural justice demand that the right of a party should not be affected without giving it an opportunity to be heard.ii[22] The test is the presence of the opportunity to be heard, as well as to have time to study the motion and meaningfully oppose or controvert the grounds upon which it is based.ii[23] Considering the

circumstances of the present case, we believe that procedural due process was substantially complied with. There are, indeed, reasons which would warrant the suspension of the Rules: (a) the existence of special or compelling circumstances, b) the merits of the case, (c) a cause not entirely attributable to the fault or negligence of the party favored by the suspension of rules, (d) a lack of any showing that the review sought is merely frivolous and dilatory, and (e) the other party will not be unjustly prejudiced thereby.ii[24] Elements or circumstances (c), (d) and (e) exist in the present case. The suspension of the Rules is warranted in this case. The motion in question does not affect the substantive rights of petitioner as it merely seeks to extend the period to file Memorandum. The required

extension was due to respondents counsels illness, lack of staff to do the work due to storm and flood, compounded by the grounding of the computers. There is no claim likewise that said motion was interposed to delay the appeal.ii[25] As it appears, respondent sought extension prior to the expiration of the time to do so and the memorandum was subsequently filed within the requested extended period. Under the

circumstances, substantial justice requires that we go into the merits of the case to resolve the issue of who is entitled to the possession of the land in question. Further, it has been held that a motion for extension of time x x x is not a litigated motion where notice to the adverse party is necessary to afford the latter an opportunity to resist the application, but an ex parte motion made to the court in behalf of one or the other of the parties to the action, in the absence and usually without the knowledge of the other party or parties. As a general rule, notice of motion is required where a party has a right to resist the relief sought by the motion and principles of natural justice demand that his rights be not affected without an opportunity to be heard. It has been said that ex parte motions are frequently permissible in procedural matters, and also in situations and under circumstances of emergency; and an exception to a rule requiring notice is sometimes made where notice or the resulting delay might tend to defeat the objective of the motion.ii[26] It is well to remember that this Court, in not a few cases, has consistently held that cases shall be determined on the merits, after full opportunity to all parties for ventilation of their causes and defense, rather than on technicality or some procedural imperfections. In so doing, the ends of justice would be better served.ii[27] Furthermore, this Court emphasized its policy that technical rules should accede to the demands of substantial justice because there is no vested right in technicalities. Litigations, should, as much as possible, be decided on their merits and not on technicality. Dismissal of appeals purely on technical grounds is frowned upon, and the rules of procedure ought not to be applied in a very rigid, technical sense, for they are adopted to help secure, not override, substantial justice, and thereby defeat their very aims. As has been the constant rulings of this Court, every party-litigant should be afforded the amplest opportunity for the proper and just disposition of his cause, free from constraints of technicalities.ii[28] Indeed, rules of procedure are mere tools designed to expedite the resolution of cases and other matters pending in court. A strict and rigid application of the rules that would result in technicalities that tend to frustrate rather than promote justice must be avoided.ii[29] The visible emerging trend is to afford every party-litigant the amplest opportunity for the proper and just determination of his cause, free from constraints and technicalities.

Parenthetically, it must be noted also that when the appeal was dismissed on 19 June 2003, the memorandum was already filed in court on 9 June 2003. On the issue of immediate execution of judgment. The applicable provision is Section 19, Rule 70 of the Rules of Court, which reads: SEC. 19. Immediate Execution of judgment; how to stay the same.- If judgment is rendered against the defendant, execution shall issue immediately upon motion, unless an appeal has been perfected and the defendant to stay execution files a sufficient supersedeas bond, approved by the Municipal Trial Court and executed in favor of the plaintiff to pay the rents, damages, and costs accruing down to the time of the judgment appealed from, and unless, during the pendency of the appeal, he deposits with the appellate court the amount of rent due from time to time under the contract, if any, as determined by the judgment of the Municipal Trial Court. x x x. To stay the immediate execution of judgment in ejectment proceedings, Section 19 requires that the defendant-appellant must (a) perfect his appeal, (b) file a supersedeas bond, and (c) periodically deposit the rentals falling due during the pendency of the appeal. As correctly observed by the Court of Appeals, execution pending appeal was premature as

respondent had already filed a supersedeas bond and the monthly rental for the current month of the premises in question.ii[30 The invocation of petitioner of the provisions of Section 21, Rule 70 of the Rules of Court, which runs: Sec. 21. Immediate execution on appeal to Court of Appeals or Supreme Court.- The judgment of the Regional Trial Court against the defendant shall be immediately executory, without prejudice to a further appeal that may be taken therefrom. to justify the issuance of the writ of execution pending appeal in this case is misplaced. A closer examination of the above-quoted provision reveals that said provision applies to decision of the RTC rendered in its appellate jurisdiction, affirming the decision of the MeTC. In the case at bar, the RTC order was an order dismissing respondents appeal based on technicality. It did not resolve substantive matters delving on the merits of the parties claim in the ejectment case. Thus, the case brought to the Court

of Appeals was the dismissal of the appeal for failure to file the required memorandum within the period provided by law, and not on the merits of the ejectment case. Lastly, petitioner posited the view that the Court of Appeals justices should have inhibited themselves because of bias and partiality for deciding the case within eight months and for being very selective in discussing the issues. We reject the proposition.

Inhibition must be for just and valid causes. The mere imputation of bias and partiality is not enough ground for judges to inhibit, especially when the charge is without basis. This Court has to be shown acts or conduct clearly indicative of arbitrariness or prejudice before it can brand them with the stigma of bias and partiality.ii[31] This Court has invariably held that for bias and prejudice to be considered valid reasons for the voluntary inhibition of judges, mere suspicion is not enough. Bare allegations of their partiality will not suffice in the absence of clear and convincing evidence to overcome the presumption that the judge will undertake his noble role to dispense justice according to law and evidence and without fear and favor.ii[32] There is no factual support to petitioners charge of bias and partiality. A perusal of the records of the case fails to reveal that any bias or prejudice motivated the Court of Appeals in granting respondents petition. Neither did this Court find any questionable or suspicious circumstances leading to the issuance of the questioned decision, as suggested by petitioner. The fact alone that the Court of Appeals decided the case within eight months does not in any way indicate bias and partiality against petitioner. It is within the constitutional mandate to decide the case within 12 months.ii[33] As to petitioners allegation that the Court of Appeals was selective in choosing what issues to resolve, it bears to stress again that a judges appreciation or misappreciation of the sufficiency of evidence x x x adduced by the parties, x x x, without proof of malice on the part

of respondent judge, is not sufficient to show bias and partiality.ii[34] We also emphasized that repeated rulings against a litigant, no matter how erroneously, vigorously and consistently expressed, do not amount to bias and prejudice which can be bases for the disqualification of a judge.ii[35] IN ALL, petitioner utterly failed to show that the appellate court erred in issuing the assailed decision. jurisprudence. WHEREFORE, the instant petition is hereby DENIED for lack of merit. The Decision dated 17 August 2004 and the Resolution dated 10 March 2005 of the Court of Appeals in CAG.R. SP No. 79001 are hereby AFFIRMED. No costs. SO ORDERED. On the contrary, it acted prudently in accordance with law and

SECOND DIVISION

CHARLES CU-UNJIENG,Petitioner, - versus -

G.R. No. 139596

Promulgated: HON. COURT OF APPEALS and UNI0N BANK OF THE PHILIPPINES, Respondents.

January 24, 2006

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DECISION GARCIA, J.:

By this petition for review on certiorari, petitioner Charles Cu-Unjieng seeks the reversal of the following issuances of the Court of Appeals (CA) in CA-G.R. CV No. 8177-B-UDK, entitled Charles Cu-Unjieng, plaintiff-appellant vs. Union Bank of the Philippines, et al., defendants-appellees, to wit
1. Resolution[1] dated May 10,1999, dismissing, for non-payment of docket and other lawful fees, petitioners appeal from an earlier decision of the Regional Trial Court at Malolos, Bulacan which dismissed his complaint for specific performance and damages against respondent Union Bank of the Philippines and others; and 2. Resolution[2] dated July 30, 1999 which denied petitioners Motion for Reconsideration and ordered expunged the appeal brief thereto attached.

The facts: Respondent Union Bank of the Philippines (UBP) is the owner of a parcel of agricultural land with an area of 218,769 square meters situated in Barangay Sta. Maria, San Miguel, Bulacan and registered in its name under Transfer Certificate of Title (TCT) No. TC-1062 of the Registry of Deeds of Bulacan. Sometime in January 1994, UBP caused the posting on the bulletin boards of its branch offices of a three-page list of acquired realty assets available for sale to interested parties. aforementioned parcel of land, offered to be sold for P2,200,000.00. Petitioner, through a letter[3] dated April 11, 1994 and addressed to Joselito P. Valera, manager of UBPs Acquired Assets Department, offered to buy the subject property for a lesser amount of P2,078,305.50, payable as follows: 50% as down payment with the balance to be paid in equal monthly installments over a period of two (2) years. Petitioner explained that his offer for an amount lesser than UBPs asking price was on account of five (5) tenants occupying the subject land who were allegedly demanding P500,000.00 to voluntarily vacate the same. As proof of his interest to buy the property, petitioner tendered PCIB Check No. 565827 for P103,915.27, purportedly representing 10% of the 50% down payment as earnest money or deposit. UBP acknowledged receipt thereof by way of Union Bank Receipt No. 495081 dated April 11, 1994. On August 30, 1994, petitioner wrote a follow-up letter to UBP inquiring on the status of his offer to buy the subject premises.[4] Included in said list was the

Via a reply-letter dated August 31, 1994, the manager of UBPs Acquired Assets Department advised petitioner that his offer to purchase is yet to be acted upon because the bank was still awaiting the opinion of its legal division regarding the sale of CARPable agricultural assets acquired by the bank.[5]

As it turned out, UBP rejected petitioners offer as shown by the fact that in another letter [6] dated December 19, 1994, the bank informed petitioner that his offer could not be favorably acted upon on account of

the legal divisions opinion that sales of lands covered by the Comprehensive Agrarian Reform Law without prior Department of Agrarian Reform (DAR) approval are considered null and void. Accordingly, UBP advised petitioner to pick up the refund of his P103,915.27 earnest money at the banks disbursing unit.

Unable to accept UBPs rejection of his offer, petitioner, through counsel, made a formal demand[7] for the bank to comply with its obligation to transfer and deliver the title of the subject property to him by executing the proper deed of conveyance, under the terms and conditions set forth in his April 11, 1994 offer.

Responding thereto, UBP, thru its counsel, Atty. Luzano, in a letter[8] dated July 19, 1995, reiterated the banks rejection of petitioners offer as the land being carpable could only be disposed of by the bank either thru Voluntary Offer to Sell (VOS) or compulsory acquisition, the procedure of which is outlined in Sec. 16 of Republic Act (RA) No. 6657.
It was against the foregoing backdrop of events that, on February 6, 1997, in the Regional Trial Court (RTC) at Malolos, Bulacan, petitioner filed his complaint[9] in this case for Specific Performance and Damages against UBP, impleading as co-defendant in the suit the Register of Deeds of Bulacan. Docketed as Civil Case No. 80M-97 and raffled to Branch 9 of the court, the complaint principally sought UBPs compliance with an alleged perfected contract of sale between it and petitioner relative to the parcel of land in question. More specifically, the complaint prays for a judgment ordering UBP to: a) accept payments from the plaintiff [petitioner] for the sale of the Property in accordance with the terms and conditions of the letter dated 11 April 1994; b) execute a Deed of Absolute Sale over the Property covered by TCT No. TC 1062 of the Registry of Deeds of the Province of Bulacan upon the plaintiffs full payment of the amount of Two Million Seventy Eight Thousand Three Hundred Five & 50/100 (P2,078,305.50), failing in which, the deputy sheriff should be ordered to execute such deed and the Registry of Deeds to cancel the title of the Bank and issue a new one in favor of the plaintiff; c) pay plaintiff the sum of Five Hundred Thousand Pesos (P500,000.00) as moral damages;

d) e) f)

pay plaintiff the sum of Five Hundred Thousand Pesos (P500,000.00) as exemplary damages; pay plaintiff the sum of Four Hundred Thousand Pesos (P400,000.00) as attorneys fees; and pay the costs of the suit.

Other reliefs, just and equitable under the premises, are likewise respectfully prayed for. After due proceedings, the trial court, in a decision dated September 1, 1998,[10] upon a finding that no perfected contract of sale transpired between the parties, dismissed petitioners complaint for lack of sufficient cause of action, thus:

WHEREFORE, on the basis of the evidence adduced and the laws/jurisprudence applicable thereon, judgment is hereby rendered DISMISSING the complaint in the above entitled case for want of sufficient cause of action as well as the defendants counterclaim for damages and attorneys fees for lack of proof to warrant the same. However, defendant Union Bank of the Philippines is ordered to reimburse plaintiff Charles Cu-Unjieng the amount of P103,915.27 representing the face value of PCIBank Check No. 565827 tendered by the latter to the former as purported earnest money, with interest thereon at the prevailing rates of interest periodically bestowed by UBP to its savings depositors from April 11, 1994, through the succeeding years, and until the full amount thereof shall have been delivered to the plaintiff. No pronouncement as to costs. SO ORDERED. With his motion for reconsideration having been denied, petitioner filed with the trial court a Notice of Appeal[11] therein making known that he is taking an appeal from the adverse decision to the CA. Acting thereon, the trial court issued an Order[12] directing the elevation of the records of the case to the CA, whereat petitioners appeal was docketed as CA-G.R. CV No. 8177-B-UDK. As things would have it, in the herein first assailed Resolution dated May 10, 1999, the CA dismissed petitioners appeal for nonpayment of the required docket and other lawful appeal fees, to wit: For failure of the appellant [petitioner] to pay the docket and other lawful fees (Sec. 4, Rule 41, 1997 Rules of Civil Procedure), the Court Resolved to DISMISS the appeal pursuant to Sec. 1(c), Rule 50 of the same Rule. SO ORDERED.[13]

Petitioner filed a Motion for Reconsideration, attaching thereto his appellants brief. However, in a subsequent Resolution dated July 30, 1999,[14] the appellate court denied the motion and even expunged from the record the appellants brief thereto attached: Acting on the motion of the plaintiff-appellant [petitioner] for a reconsideration of the Resolution of May 10, 1999, which dismissed the appeal for the reason stated therein, and considering the opposition interposed thereto by defendant-appellee [respondent] Union Bank of the Philippines and it appearing that the filing of the notice of appeal of November 5, 1988, was not accompanied by the full and correct payment of the corresponding appellate court docket and other lawful fees, and for such tardiness of more than four (4) months, the Court resolved to DENY the motion for reconsideration and the attached brief thereto ordered EXPUNGED. In Pedrosa vs. Hill, 257 SCRA 373, the Supreme Court, citing Rodillas vs. Commission on Elections (245 SCRA 702 aptly said:

xxx the mere filing of the notice of appeal was not enough. It should be accompanied by the payment of the correct amount of appeal fee. In other words, the payment of the full amount of the docket fee is an indispensable step for the perfection of an appeal. In both original and appellate cases, the court acquires jurisdiction over the case only upon the payment of the prescribed docket fees. Well-rooted is the principle that perfection of an appeal within the statutory or reglementary period is not only mandatory but also jurisdictional and failure to do so renders the questioned decision final and executory, and deprives the appellate court or body of jurisdiction to alter the final judgment much less to entertain the appeal. This requirement of an appeal fee is by no means a mere technicality of law or procedure. It is an essential requirement without which the decision appealed from would become final and executory, as if no appeal was filed at all. SO ORDERED. Undaunted, petitioner is now with us via the present recourse seeking a relaxation of procedural rules and ultimately the reversal and setting aside of the assailed twin resolutions of the appellate court.
Petitioner would have the Court view his failure to pay the appeal docket fees on time as a non-fatal lapse, or a non-jurisdictional defect which the CA should have ignored in order to attain substantial justice. Further, petitioner passes the blame to the RTC clerk of court who allegedly made the erroneous computation of docket fees We are not persuaded.

Doctrinally entrenched is the pronouncement that the right to appeal is merely statutory and a party seeking to avail of that right must comply with the statute or rules.[15] Rule 41, Section 4, of the 1997 Rules of Civil Procedure provides: SEC. 4. Appellate court docket and other lawful fees. Within the period for taking an appeal, the appellant shall pay to the clerk of the court which rendered the judgment or final order appealed from, the full amount of the appellate court docket and other lawful fees. Proof of payment of said fees shall be transmitted to the appellate court together with the original record or the record on appeal. Well-settled is the rule that payment of the docket and other legal fees within the prescribed period is both mandatory and jurisdictional,[16] noncompliance with which is fatal to an appeal. For, to stress, appeal is not a matter of right, but a mere statutory privilege.m [17] An ordinary appeal from a decision or final order of the RTC to the CA must be made within fifteen (15) days from notice.[18] And within this period, the full amount of the appellate court docket and other lawful fees must be paid to the clerk of the court which rendered the judgment or final order appealed from.

Time and again, this Court has consistently held that full payment of docket fees within the prescribed period is mandatory for the perfection of an appeal. Without such payment, the appeal is not perfected and the appellate court does not acquire jurisdiction to entertain the appeal, thereby rendering the decision sought to be appealed final and executory.[19]

For sure, nonpayment of the appellate court docket and other lawful fees within the reglementary period as provided under Section 4, Rule 41, supra, is a ground for the dismissal of an appeal under Section 1(c) of Rule 50, to wit:

SECTION 1. Grounds for dismissal of appeal.- An appeal may be dismissed by the Court of Appeals, on its own motion or on that of the appellee, on the following grounds:

xxx

xxx

xxx

c. Failure of the appellant to pay the docket and other lawful fees as provided in section 4 of Rule 41; xxx This Court has invariably sustained the CAs dismissal on technical grounds under the aforequoted provision unless considerations of equity and substantial justice present cogent reasons to hold otherwise. True, the rules may be relaxed but only for persuasive and weighty reasons, to relieve a litigant of an injustice commensurate with his failure to comply with the prescribed procedure.[20] So it is that in La Salette College

vs. Victor Pilotin,[21] we held:


Notwithstanding the mandatory nature of the requirement of payment of appellate docket fees, we also recognize that its strict application is qualified by the following: first, failure to pay those fees within the reglementary period allows only discretionary, not automatic, dismissal; second, such power should be used by the court in conjunction with its exercise of sound discretion in accordance with the tenets of justice and fair play, as well as with a great deal of circumspection in consideration of all attendant circumstances Then, too, in Mactan Cebu International Airport Authority (MCIAA) vs. Mangubat,[22] we held that late payment of docket fees may be admitted when the party showed willingness to abide by the Rules by immediately paying the required fees. Mactan, however, cannot be a source of comfort for herein petitioner. For there, the appellate docket fees were paid six (6) days after the timely filing of the notice of appeal. Unlike in Mactan, payment of the appellate docket fees in this case was effected by petitioner only after four (4) months following the expiration of the reglementary period to take an appeal.

With the reality obtaining in this case that payment of the appellate docket fees was belatedly made four (4) months after the lapse of the period for appeal, it appears clear to us that the CA did not acquire jurisdiction over petitioners appeal except to order its dismissal,[23] as it rightfully did. Thus, the September 1, 1998 decision of the RTC has passed to the realm of finality and became executory by operation of law.

We must emphasize that invocation of substantial justice is not a magical incantation that will automatically compel this Court to suspend procedural rules. Rules of procedure are not to be belittled or dismissed simply because their non-observance may have resulted in prejudice to a partys substantive rights. Like all rules, they are required to be followed. So it must be here. WHEREFORE, petition is DENIED and the assailed resolutions dated May 10,1999 and July 30, 1999 of the Court of Appeals AFFIRMED. Costs against petitioner.

SO ORDERED.

Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 170488 December 10, 2012

CMTC INTERNATIONAL MARKETING CORPORATION, Petitioner, vs. BHAGIS INTERNATIONAL TRADING CORPORATION, Respondents. DECISION PERALTA, J.: Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing the Resolutions dated August 19, 20051 and November 15, 20052 of the Former Special Twelfth Division of the Court of Appeals in CA-G.R. CV No. 84742. The facts of the case follow.

Petitioner instituted a Complaint for Unfair Competition and/or Copyright Infringement and Claim for Damages with Prayer for Temporary Restraining Order and Writ of Preliminary Injunction against respondent before the Regional Trial Court of Makati (trial court).3 On February 14, 2005, the trial court rendered a Decision4 dismissing the complaint filed by petitioner. The fallo of said Decision reads: WHEREFORE, premises considered, the Complaint for Unfair Competition and/or Copyright Infringement and Claim for Damages is hereby DISMISSED without pronouncement as to cost. SO ORDERED.5 After receiving a copy of the trial courts Decision, petitioner seasonably filed a Notice of Appeal before the Court of Appeals (appellate court) on March 4, 2005.6 Thereafter, the appellate court issued a Notice to File the Appellants Brief on May 20, 2005, which was received by the law office representing petitioner on May 30, 2005, stating as follows: Pursuant to Rule 44, Sec. 7 of the 1997 Rules of Civil Procedure you are hereby required to file with this Court within forty-five (45) days from receipt of this notice, SEVEN (7) legibly typewritten, mimeographed or printed copies of the Appellants Brief with legible copies of the assailed decision of the Trial Court and proof of service of two copies upon the appellee/s.7 However, despite said notice, petitioner failed to file its appellants brief timely. Hence, on August 19, 2005, the appellate court issued a Resolution dismissing the appeal filed by petitioner. The full text of said Resolution reads: Considering the report of the Judicial Records Division dated 17 August 2005 stating that no appellants brief has been filed as per docket book entry, the Court RESOLVES to consider the appeal as having been ABANDONED and consequently DISMISS the same pursuant to Sec. 1(e), Rule 50 of the 1997 Rules of Civil Procedure, as amended.8 Upon receipt of the order of dismissal, petitioner filed its Motion for Reconsideration with Motion to Admit Appellants Brief,9 which was filed forty-two (42) days late from the date of its expiration on July 15, 2005. On November 15, 2005, the appellate court denied petitioners Motion for Reconsideration with Motion to Admit Appellants Brief. It ruled that one of the grounds by which the Court of Appeals may, on its own motion or that of the appellee, dismiss the appeal is the failure on the part of the appellant to serve and file the required number of copies of his brief within the time prescribed by the Rules of Court, viz.: For this Court to admit the appellants brief after such wanton disregard of the Rules would put a strain on the orderly administration of justice. As held in the case of St. Louis University vs. Cordero, 434 SCRA 575, 587, citing Don Lino Gutierres & Sons, Inc. v. Court of Appeals, 61 SCRA 87: "It is necessary to impress upon litigants and their lawyers the necessity of strict compliance with the periods for performing certain acts incident to the appeal and the transgressions thereof, as a rule, would not be tolerated; otherwise, those periods could be evaded by subterfuges and manufactured excuses and would ultimately become inutile.

WHEREFORE, the foregoing premises considered, the Motion for Reconsideration with Motion to Admit Appellants Brief is perforce DENIED. SO ORDERED.10 Accordingly, petitioner filed a petition for review on certiorari before this Court questioning the August 19, 2005 and November 15, 2005 Resolutions of the appellate court. Thus, petitioner presents the following grounds to support its petition: A. THE COURT OF APPEALS GRIEVOUSLY COMMITTED A REVERSIBLE ERROR WHEN IT SACRIFICED SUBSTANTIVE JUSTICE IN FAVOR OF PROCEDURAL TECHNICALITIES WITH ITS DISMISSAL OF PETITIONERS APPEAL FOR FAILURE TO FILE THE APPELLANTS BRIEF ON TIME WITHOUT CONSIDERING AT ALL WHETHER OR NOT PETITIONERS APPEAL DESERVED FULL CONSIDERATION ON THE MERITS. B. IN THE INTEREST OF SUBSTANTIVE JUSTICE, PETITIONERS APPEAL SHOULD BE REINSTATED CONSIDERING THAT THE ERRORS OF THE TRIAL COURT IN RENDERING ITS APPEALED DECISION ARE EVIDENT ON THE FACE OF THE SAID DECISION AND MORE SO AFTER AN EXAMINATION OF THE EVIDENCE ON RECORD. 1. The trial courts ruling that petitioner should have established actual confusion in the minds of buyers is contrary to jurisprudence. 2. The trial court did not state the facts upon which it based its conclusion that petitioners trademark is strikingly different and distinct from that of defendants. 3. Respondent labeled its products in a manner confusingly similar to that of petitioners. 4. The trial court erred in finding that respondent did not pass off its products as that of petitioners.11 Simply, the issue to be resolved is the propriety of the dismissal of petitioners appeal for its failure to file the appellants brief within the reglementary period. Petitioner asserts that the appellate court erred in dismissing its appeal, since dismissal of appeals on purely technical grounds is frowned upon and the rules of procedure ought not to be applied in a very technical sense, for they are adopted to help secure substantial justice. For its part, respondent maintains that the appellate court did not err in dismissing petitioners appeal for its failure to file the required appellants brief within the reglementary period. It stresses that in the absence of persuasive reason to deviate therefrom, rules of procedure must be faithfully followed for the prevention of needless delays and for the orderly and expeditious dispatch of judicial business. We find merit in the instant petition. Time and again, this Court has emphasized that procedural rules should be treated with utmost respect and due regard, since they are designed to facilitate the adjudication of cases to remedy the worsening problem of delay

in the resolution of rival claims and in the administration of justice. From time to time, however, we have recognized exceptions to the Rules, but only for the most compelling reasons where stubborn obedience to the Rules would defeat rather than serve the ends of justice.12 In Obut v. Court of Appeals,13 this Court reiterated that it "cannot look with favor on a course of action which would place the administration of justice in a straightjacket, for then the result would be a poor kind of justice if there would be justice at all. Verily, judicial orders are issued to be obeyed, nonetheless a non-compliance is to be dealt with as the circumstances attending the case may warrant. What should guide judicial action is the principle that a party-litigant if to be given the fullest opportunity to establish the merits of his complaint of defense rather than for him to lose life, liberty, honor or property on technicalities." The same principle was highlighted in Philippine National Bank and Development Bank of the Philippines v. Philippine Milling Company, Incorporated, et al.[14 where the Court ruled that even if an appellant failed to file a motion for extension of time to file his brief on or before the expiration of the reglementary period, the Court of Appeals does not necessarily lose jurisdiction to hear and decide the appealed case, and that the Court of Appeals has discretion to dismiss or not to dismiss appellants appeal, which discretion must be a sound one to be exercised in accordance with the tenets of justice and fair play having in mind the circumstances obtaining in each case. Ergo, where strong considerations of substantive justice are manifest in the petition, the strict application of the rules of procedure may be relaxed, in the exercise of its equity jurisdiction.15 Thus, a rigid application of the rules of procedure will not be entertained if it will obstruct rather than serve the broader interests of justice in the light of the prevailing circumstances in the case under consideration. In the instant case, it is apparent that there is a strong desire to file an appellants brief on petitioners part. When petitioner filed its motion attaching therewith its appellants brief, there was a clear intention on the part of petitioner not to abandon his appeal. As a matter of fact, were it not for its counsels act of inadvertently misplacing the Notice to File Brief in another file, petitioner could have seasonably filed its appellants brief as its counsel had already prepared the same even way before the receipt of the Notice to File Brief. It bears stressing at this point then that the rule, which states that the mistakes of counsel binds the client, may not be strictly followed where observance of it would result in outright deprivation of the clients liberty or property, or where the interest of justice so requires. In rendering justice, procedural infirmities take a backseat against substantive rights of litigants. Corollarily, if the strict application of the rules would tend to frustrate rather than promote justice, this Court is not without power to exercise its judicial discretion in relaxing the rules of procedure.16] Also, it must be stressed that petitioner had no participatory negligence in the dismissal of its appeal. 1wphi1 Hence, the ensuing dismissal of its appeal was completely attributable to the gross negligence of its counsel. For said reason, the Court is not averse to suspending its own rules in the pursuit of justice. Where reckless or gross negligence of counsel deprives the client of due process of law, or when the interests of justice so require, relief is accorded to the client who suffered by reason of the lawyers gross or palpable mistake or negligence.17 All told, petitioner should be afforded the amplest opportunity for the proper and just determination of his cause, free from the constraints of technicalities. Nevertheless, considering that this Court is not a trier of facts, the appropriate action to take is to remand the case to the appellate court for further proceedings, for it to thoroughly examine the factual and legal issues that still need to be threshed out.

WHEREFORE, premises considered, the instant petition is hereby GRANTED, insofar as this case is REMANDED to the Court of Appeals for further proceedings, subject to the payment of the corresponding docket fees within fifteen (15) days from notice of this Decision. Let the records and the CA rollo of this case be transmitted accordingly. SO ORDERED.

THIRD DIVISION
MINDANAO SAVINGS ANDD LOAN ASSOCIATION, INC., Petitioner, - versus VICENTA VDA. DE FLORES, and HEIRS OF FLORENCIO FLORES, SR., namely, EDNA FLORES EISEIDEL, BELINDA FLORES, FLORENCIO T. FLORES, JR., ROBERTO T. FLORES, SYLVIA FLORES SICAT and LORNA FLORES FERNANDEZ, Respondents. PANGANIBAN, J., Chairman SANDOVAL-GUTIERREZ, CORONA, CARPIO MORALES, and GARCIA, JJ. Promulgated: _September 7, 2005 G.R. No. 142022

Present:

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DECISION GARCIA, J.:

Under consideration is this petition for review on certiorari under Rule 45 of the Rules of Court to nullify and set aside the twin resolutions dated October 27, 1999[1] and February 15, 2002[2] of the Court of Appeals which respectively dismissed petitioners appeal from an earlier decision of the Regional Trial Court at Malaybalay, Bukidnon for failure to file its appellants brief on time, and denied petitioners motion for reconsideration of the dismissal resolution. Records reveal the essential following facts: During his lifetime, or more specifically on December 9, 1982, Florencio Flores, Sr., husband of respondent Vicenta Vda. De Flores and predecessor-in-interest of the other respondents, entered into a Joint Venture Agreement with DS Homes, Inc. (DSHI) for the development and commercial utilization of the Flores spouses two (2) adjoining lots located at the center of the town of Malaybalay, Bukidnon. Pursuant to the Joint Venture Agreement, Flores, Sr., as capitalist partner, secured a loan of P1.5M from petitioner Mindanao Savings and Loan Association, Inc. (MSLAI) using as collaterals therefor the two (2) aforementioned lots. Under the same agreement, DSHI, as industrial partner, shall have the full and complete authority to pursue the development project and the management thereof thereafter. In time, out of the loan secured by Flores, Sr. from petitioner, a commercial building known as the Flores Building was constructed on the lots in question. Business operations of the joint venture commenced in August, 1984. A portion of the first floor of the building was leased by DSHI to petitioner which used the space as office of its branch at Malaybalay, Bukidnon, while the
rest of the same floor were occupied by a fastfood establishment, a drugstore and a grocery. The second floor of the building was used as a function room and the third floor as lodging inn.

In 1986, the joint venture suffered severe business reversals on account of which DSHI discontinued the management of the Flores Building, prompting respondents to take over its operations. Meanwhile, on August 31, 1990, petitioner MSLAI, then operating under the name Davao Savings and Loan Association, was placed by the Monetary Board of the Central Bank under receivership of the Philippine Deposit Insurance Corporation (PDIC) which was later designated by the Monetary Board as liquidator of the already insolvent MSLAI. On November 10, 1992, respondents received from PDIC a demand letter for the payment of an outstanding obligation in the staggering amount of P23,756,477.61 as of October 31, 1992. Unable to believe that the original loan of P1.5M obtained by their predecessor could have reached that much, respondents then filed with the Regional Trial Court at Bukidnon a complaint for Accounting and Liquidation of Joint Venture, Annulment of Loan & Mortgages and Damages thereat docketed as Civil Case No. 2138. Impleaded as defendants in the case were, among others, DSHI, petitioner MSLAI and one Francisco D. Villamor and other officers of DSHI.

Albeit not a party to the Joint Venture Agreement, petitioner MSLAI was impleaded as a partydefendant, it being respondents allegation that petitioner and DSHI were practically one and the same, as in fact defendant Francisco Villamor was the general manager of both corporate entities and that although the two (DSHI and MSLAI) are separate and distinct corporations, they acted as one in the implementation and execution of the Joint Venture Agreement under the effective direction and control of Francisco Villamor who was the moving force in the manipulations of the loans and dissipation of the funds of the joint venture. In its answer, petitioner maintained that it is a separate and distinct corporation from DSHI, adding that respondents have no cause of action against it as it is never a party to the Joint Venture Agreement between DSHI and respondents predecessor-in-interest. In a decision dated January 26, 1998,[3] the trial court, upon a finding that [T]he sum total of the foregoing evidence abundantly demonstrates further the unity of the corporate defendants and how they manipulated the loan and the funds of the joint venture, about which petitioner MSLAI failed to refute plaintiffs extensive evidence making out a strong case of piercing the veil of corpora te fiction against it and DHSI, rendered judgment for the respondents, thus: WHEREFORE, judgment is hereby entered:
1. Declaring that the accounting and/or liquidation of the Joint Venture Agreement entered into by the late Dr. Florencio Flores, Sr., and the Davao Homes, Inc., dated December 9, 1982, to be already deemed made and terminated. Accordingly, no party or parties shall receive any award of income/share. 2. to plaintiffs. 3. All income generated by the Flores building beginning 1986 shall henceforth exclusively belong

Annulling and declaring null and void the said Joint Venture Agreement.

4. Declaring the Flores building which was built under the Joint Venture agreement, aforementioned, in the exclusive ownership of plaintiffs, free from all aliens and encumbrances. 5. Annulling and declaring VOID the contract of loan, together with the corresponding promissory notes (marked Exhibit 1 to 1 -10), and the real mortgage (marked Exhibits J to J-3) executed by Dr. Florencio Flores and Vicenta Flores, as principal borrower, in favor of defendant Bank (Mindanao Savings and Loan Association) as creditor. 6. No party is entitled to any award of damages including costs.

SO ORDERED.

On February 4, 1998, petitioner MSLAI filed with the trial court a Notice of Appeal by reason of which the records of the case were elevated to the Court of Appeals.

On February 29, 1999, the appellate court issued a notice to the parties requiring them to file their respective briefs within 45 days from receipt thereof.

On June 21, 1999, the office of the Chief Legal Counsel of the PDIC, as counsel for petitioner MSLAI, entered its appearance in the appellate court and filed a motion for a 45-day extension of time to file appellants brief.

In its Resolution of August 11, 1999, the appellate court favorably acted on petitioners motion and accordingly granted petitioner forty-five (45) days from June 21 or until August 5, 1999, within which to file its appellants brief.

Come August 5, 1999, but no appellants brief was filed by petitioner. Instead, on August 25, 1999, or way beyond the period given by the appellate court, petitioner filed a Motion to Admit, therein praying that the appellants brief thereto attached be admitted. In its challenged Resolution dated October 27, 1999, the appellate court denied admission of the proffered Appellants Brief for being filed twenty (20) days late, and consequently dismissed petitioners appeal.

Its motion for reconsideration having been denied by the appellate court in its subsequent Resolution of February 15, 2000, petitioner is now with us via the instant recourse on the following assigned errors, which perplexingly, are actually an assault against the decision of the trial court and not the challenged resolutions of the Court of Appeals. We quote the assigned errors:

THE LOWER COURT ERRED IN ANNULLING AND DECLARING VOID THE CONTRACT OF LOAN AND THE REAL ESTATE MORTGAGES EXECUTED BY SPOUSES DR. FLORENCIO FLORES AND VICENTA FLORES.

THE LOWER COURT ERRED IN PIERCING THE VEIL OF CORPORATE FICTION OF MSLAI AND DSHI. THE LOWER COURT ERRED IN ANNULLING THE JOINT VENTURE AGREEMENT AND DECLARING RESPONDENTS AS THE EXCLUSIVE OWNER OF THE FLORES BUILDING FREE FROM ALL LIENS AND ENCUMBRANCES.[4] At the outset, let it be made clear that in petitions for review on certiorari under Rule 45 of the Rules of Court, the errors which are reviewable by this Court are only those committed by the Court of Appeals and not directly those of the trial court. It is thus unfortunate that the Office of the Chief Legal Counsel of the PDIC, as petitioners counsel in this case, is evidently unaware of how appellate proceedings before this Court go. As we see it, the sole question before us is the propriety of the appellate courts resolution dismissing petitioners appeal on account of petitioners failure to file its appellants brief on time, and not the desired relaxation of procedural rules regarding reglementary periods. We must emphasize that review is not a matter of right. Accordingly, there should be strict adherence to Rule 45 of the Rules of Court, Section 6 of which delineates the grounds for the allowance of review to avoid delays in the enforcement of final judgments and orders of lower courts, to wit: SEC. 6. Review discretionary. - A review is not a matter of right, but of sound judicial discretion, and will be granted only when there are special and important reasons therefor. The following, while neither controlling nor fully measuring the courts discretion, indicate the character of the reasons which will be considered: (a) When the court a quo has decided a question of substance, not theretofore determined by the Supreme Court, or has decided it in a way probably not in accord with law or with the applicable decisions of the Supreme Court; or (b) When the court a quo has so far departed from the accepted and usual course of judicial proceedings, or so far sanctioned such departure by a lower court, as to call for an exercise of the power of supervision.

Petitioner attempts to justify its tardiness by claiming that its handling counsel who resigned from PDIC on July 30, 1999 failed to turn over the subject case to another lawyer for re-assignment. This excuse is not only flimsy but utterly lame.

It bears emphasizing that petitioner is represented by no less than the Office of the Chief Legal Counsel of the PDIC which has, at its helm and command, a battery of lawyers. As pointed out by respondents, on July 7, 1999, the handling counsel tendered his resignation from PDIC effective on July 30, 1999.[5] Petitioner, therefore, had 29 days from July 7, 1999, or until August 5, 1999, the last day for filing the subject brief. During those 29 days, petitioner had the luxury of time to file its appellants brief, or, at the very least, ask for another extension from the appellate court. It did not. Petitioner ought to be reminded that procedural rules are not to be belittled or dismissed simply because their non-observance may have resulted in prejudice to the parties substantive rights. Like all rules, they are required to be followed except only for the most persuasive of reasons as when transcendental matters of life, liberty or state security are involved. True, litigation is not a game of technicalities. It is equally true, however, that every case must be presented in accordance with the prescribed procedure to ensure an orderly and speedy administration of justice.[6] Doubtless, and judging from the very nature of petitioners assigned errors, the instant petition was resorted to as a substitute for the lost remedy of appeal. This cannot be allowed, more so when, as here, such loss is occasioned by petitioners own neglect. WHEREFORE, the instant petition is DENIED. Costs against petitioner. SO ORDERED.

THIRD DIVISION

ERLINDA PILAPIL and HEIRS OF DONATA ORTIZ BRIONES, namely: ESTELA, ERIBERTO AND VIRGILIO SANTOS, ANA SANTOS CULTURA, ELVIRA SANTOS INOCENTES, ERNESTO MENDOZA, RIZALINA SANTOS, ADOLFO MENDOZA and PACITA MENDOZA,

G.R. No. 150175 Present: YNARES-SANTIAGO, J., Chairperson,

Petitioners - versusHEIRS OF MAXIMINO R. BRIONES, namely: SILVERIO S. BRIONES, PETRA BRIONES, BONIFACIO CABAHUG, JR., ANITA TRASMONTE, CIRILITA FORTUNA, CRESENCIA BRIONES, FUGURACION MEDALLE and MERCEDES LAGBAS, Respondents.

AUSTRIA-MARTINEZ,* CALLEJO, SR., and CHICO-NAZARIO, JJ. Promulgated: February 5, 2007

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x RESOLUTION CHICO-NAZARIO, J. On 10 March 2006, this Court promulgated its Decisionii[1] in the above-entitled case, ruling in favor of the petitioners. The dispositive portionii[2] reads as follows:
IN VIEW OF THE FOREGOING, the assailed Decision of the Court of Appeals in CAGR CV No. 55194, dated 31 August 2001, affirming the Decision of the Cebu City RTC in Civil Case No. CEB-5794, dated 28 September 1986, is hereby REVERSED and SET ASIDE; and the Complaint for partition, annulment, and recovery of possession filed by the heirs of Maximino in Civil Case No. CEB-5794 is hereby DISMISSED.

On 10 May 2006, a Motion for Reconsiderationii[3] of the foregoing Decision was filed by Atty. Celso C. Reales of the Reales Law Office on behalf of the respondents, heirs of Maximino R. Briones. On 19 May 2006, petitioners Erlinda Pilapil and the other co-heirs of Donata Ortiz Vda. de Briones, through counsel, filed an Opposition to Respondents Motion for Reconsideration,ii[4] to which the respondents filed a Rejoinderii[5] on 23 May 2006. Thereafter, Atty. Amador F. Brioso, Jr. of the Canto Brioso Arnedo Law Office entered his appearance as collaborating counsel for the respondents.ii[6] Atty. Brioso then filed on 11 June 2006 and 16 June 2006, respectively, a Replyii[7] and Supplemental Replyii[8] to the petitioners Opposition to respondents Motion for Reconsideration. Finally, petitioners filed a Rejoinderii[9] to the respondents Reply and Supplemental Reply on 5 July 2006. The facts of the case, as recounted in the Decision,ii[10] are as follows
Petitioners are the heirs of the late Donata Ortiz-Briones (Donata), consisting of her surviving sister, Rizalina Ortiz-Aguila (Rizalina); Rizalinas daughter, Erlinda Pilapil (Erlinda); and the other nephews and nieces of Donata, in representation of her two other sisters who had also passed away. Respondents, on the other hand, are the heirs of the late Maximino Briones (Maximino), composed of his nephews and nieces, and grandnephews and grandnieces, in representation of the deceased siblings of Maximino. xxxx Maximino was married to Donata but their union did not produce any children. When Maximino died on 1 May 1952, Donata instituted intestate proceedings to settle her husbands estate with the Cebu City Court of First Instance (CFI), 14th Judicial District, designated as Special Proceedings No. 928-R. On 8 July 1952, the CFI issued Letters of Administration appointing Donata as the administratrix of Maximinos estate. She submitted an Inventory of Maximinos properties, which included, among other things, the following parcels of land x x x.

xxxx

The CFI would subsequently issue an Order, dated 2 October 1952, awarding ownership of the aforementioned real properties to Donata. On 27 June 1960, Donata had the said CFI Order recorded in the Primary Entry Book of the Register of Deeds, and by virtue thereof, received new TCTs, covering the said properties, now in her name.

Donata died on 1 November 1977. Erlinda, one of Donatas nieces, instituted with the RTC a petition for the administration of the intestate estate of Donata. Erlinda and her husband, Gregorio, were appointed by the RTC as administrators of Donatas intestate estate. Controversy arose among Donatas heirs when Erlinda claimed exclusive ownership of three parcels of land, covered by TCTs No. 21542, 21545, and 58684, based on two Deeds of Donation, both dated 15 September 1977, allegedly executed in her favor by her aunt Donata. The other heirs of Donata opposed Erlindas claim. This Court, however, was no longer informed of the subsequent development in the intestate proceedings of the estate of Donata; and as far as this Petition is concerned, all the heirs of Donata, including Erlinda, appear to be on the same side.

On 21 January 1985, Silverio Briones (Silverio), a nephew of Maximino, filed a Petition with the RTC for Letters of Administration for the intestate estate of Maximino, which was initially granted by the RTC. The RTC also issued an Order, dated 5 December 1985, allowing Silverio to collect rentals from Maximinos properties. But then, Gregorio filed with the RTC a Motion to Set Aside the Order, dated 5 December 1985, claiming that the said properties were already under his and his wifes administration as part of the intestate estate of Donata. Silverios Letters of Administration for the intestate estate of Maximino was subsequently set aside by the RTC. On 3 March 1987, the heirs of Maximino filed a Complaint with the RTC against the heirs of Donata for the partition, annulment, and recovery of possession of real property, docketed as Civil Case No. CEB-5794. They later filed an Amended Complaint, on 11 December 1992. They alleged that Donata, as administratrix of the estate of Maximino, through fraud and misrepresentation, in breach of trust, and without the knowledge of the other heirs, succeeded in registering in her name the real properties belonging to the intestate estate of Maximino.

xxxx

After trial in due course, the RTC rendered its Decision, dated 8 April 1986, in favor of the heirs of Maximino x x x.

xxxx x x x[T]he RTC declared that the heirs of Maximino were entitled to of the real properties covered by TCTs No. 21542, 21543, 21544, 21545, 21546, and 58684. It also ordered Erlinda to reconvey to the heirs of Maximino the said properties and to render an accounting of the fruits thereof. The heirs of Donata appealed the RTC Decision, dated 8 April 1986, to the Court of Appeals. The Court of Appeals, in its Decision, promulgated on 31 August 2001, affirmed the RTC Decision, x x x. xxxx Unsatisfied with the afore-quoted Decision of the Court of Appeals, the heirs of Donata filed the present Petition, x x x.
In its Decision, dated 10 March 2006, this Court found the Petition meritorious and, reversing the Decisions of the Court of Appeals and the Regional Trial Court (RTC), dismissed the Complaint for partition, annulment, and recovery of possession of real property filed by the heirs of Maximino in Civil Case No. CEB-5794. This Court summed up its findings,ii[11] thus

In summary, the heirs of Maximino failed to prove by clear and convincing evidence that Donata managed, through fraud, to have the real properties, belonging to the intestate estate of Maximino, registered in her name. In the absence of fraud, no implied trust was established between Donata and the heirs of Maximino under Article 1456 of the New Civil Code. Donata was able to register the real properties in her name, not through fraud or mistake, but pursuant to an Order, dated 2 October 1952, issued by the CFI in Special Proceedings No. 928-R. The CFI Order, presumed to be fairly and regularly issued, declared Donata as the sole, absolute, and exclusive heir of Maximino; hence, making Donata the singular owner of the entire estate of Maximino, including the real properties, and not merely a co-owner with the other heirs of her deceased husband. There being no basis for the Complaint of the heirs of Maximino in Civil Case No. CEB-5794, the same should have been dismissed.

Respondents move for the reconsideration of the Decision of this Court raising still the arguments that Donata committed fraud in securing the Court of First Instance Order, dated 2 October 1952, which declared her as the

sole heir of her deceased husband Maximino and authorized her to have Maximinos properties registered exclusively in her name; that respondents right to succession to the disputed properties was transmitted or vested from the moment of Maximinos death and which they could no longer be deprived of; that Donata merely possessed and held the properties in trust for her co-heirs/owners; and that, by virtue of this Courts ruling in Quion v. Claridadii[12] and Sevilla, et al. v. De Los Angeles,ii[13] respondents action to recover title to and possession of their shares in Maximinos estate, held in trust for their benefit by Donata, and eventually, by petitioners as the latters successors-in-interest, is imprescriptible. Respondents also advance a fresh

contention that the CFI Order, dated 2 October 1952, being based on the fraudulent misrepresentation of Donata that she was Maximinos sole heir, was a void order, which produced no legal effect. Lastly, respondents asseverate that, by relying on certain procedural presumptions in its Decision, dated 10 March 2006, this Court has sacrificed their substantive right to succession, thus, making justice subservient to the dictates of mere procedural fiats.ii[14]

While this Court is persuaded to reexamine and clarify some points in its previous Decision in this case, it does not find any new evidence or argument that would adequately justify a change in its previous position. On the finding of fraud
As this Court declared in its Decision, the existence of any trust relations between petitioners and respondents shall be examined in the light of Article 1456 of the New Civil Code, which provides that, * i]f property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property come s. Hence, the foremost question to be answered is still whether an implied trust under Article 1456 of the New Civil Code had been sufficiently established in the present case.

In the Decision, this Court ruled in the negative, since there was insufficient evidence to establish that Donata committed fraud. It should be remembered that Donata was able to secure certificates of title to the disputed properties by virtue of the CFI Order in Special Proceedings No. 928-R (the proceedings she instituted to settle Maximinos intestate estate), which declared her as Maximinos sole heir. In the absence of proof to the contrary, the Court accorded to Special Proceedings No. 928-R the presumptions of regularity and validity.

Reproduced below are the relevant portionsii[15] of the Decision

At the onset, it should be emphasized that Donata was able to secure the TCTs covering the real properties belonging to the estate of Maximino by virtue of a CFI Order, dated 2 October 1952. It is undisputed that the said CFI Order was issued by the CFI in Special Proceedings No. 928-R, instituted by Donata herself, to settle the intestate estate of Maximino. The petitioners, heirs of Donata, were unable to present a copy of the CFI Order, but this is not surprising considering that it was issued 35 years prior to the filing by the heirs of Maximino of their Complaint in Civil Case No. CEB-5794 on 3 March 1987. The existence of such CFI Order, nonetheless, cannot be denied. It was recorded in the Primary Entry Book of the Register of Deeds on 27 June 1960, at 1:10 p.m., as Entry No. 1714. It was annotated on the TCTs covering the real properties as having declared Donata the sole, absolute, and exclusive heir of Maximino. The nonpresentation of the actual CFI Order was not fatal to the cause of the heirs of Donata considering that its authenticity and contents were never questioned. The allegation of fraud by the heirs of Maximino did not pertain to the CFI Order, but to the manner or procedure by which it was issued in favor of Donata. Moreover, the non-presentation of the CFI Order, contrary to the declaration by the RTC, does not amount to a willful suppression of evidence that would give rise to the presumption that it would be adverse to the heirs of Donata if produced. x x x.

xxxx

The CFI Order, dated 2 October 1952, issued in Special Proceedings No. 928-R, effectively settled the intestate estate of Maximino by declaring Donata as the sole, absolute, and exclusive heir of her deceased husband. The issuance by the CFI of the said Order, as well as its conduct of the entire Special Proceedings No. 928-R, enjoy the presumption of validity pursuant to the Section 3(m) and (n) of Rule 131 of the Revised Rules of Court, reproduced below
SEC. 3. Disputable presumptions. The following presumptions are satisfactory if uncontradicted, but may be contradicted and overcome by other evidence: xxxx

(m)

That official duty has been regularly performed;

(n) That a court, or judge acting as such, whether in the Philippines or elsewhere, was acting in the lawful exercise of jurisdiction.

By reason of the foregoing provisions, this Court must presume, in the absence of any clear and convincing proof to the contrary, that the CFI in Special Proceedings No. 928-R had jurisdiction of the subject matter and the parties, and to have rendered a judgment valid in every respect; and it could not give credence to the following statements made by the Court of Appeals in its Decision. xxx There was totally no evidentiary basis for the foregoing pronouncements. First of all, the Petition filed by Donata for Letters of Administration in Special Proceedings No. 928-R before the CFI was not even referred to nor presented during the course of the trial of Civil Case No. CEB-5794 before the RTC. How then could the Court of Appeals make a finding that Donata willfully excluded from the said Petition the names, ages, and residences of the other heirs of Maximino? Second, there was also no evidence showing that the CFI actually failed to send notices of Special Proceedings No. 928-R to the heirs of Maximino or that it did not require presentation of proof of service of such notices. It should be remembered that there stands a presumption that the CFI Judge had regularly performed his duties in Special Proceedings No. 928-R, which included sending out of notices and requiring the presentation of proof of service of such notices; and, the heirs of Maximino did not propound sufficient evidence to debunk such presumption. They only made a general denial of knowledge of Special Proceedings No. 928-R, at least until 1985. There was no testimony or document presented in which the heirs of Maximino categorically denied receipt of notice from the CFI of the pendency of Special Proceedings No. 928-R. The only evidence on record in reference to the absence of notice of such proceedings was the testimony of Aurelia Briones (Aurelia), one of the heirs of Maximino, x x x. xxxx Aurelias testimony deserves scant credit considering that she was not testifying on matters within her personal knowledge. The phrase I dont think is a clear indication that she is merely voicing out her opinion on how she believed her uncles and aunts would have acted had they received notice of Special Proceedings No. 928-R.

It is worth noting that, in its foregoing ratiocination, the Court was proceeding from an evaluation of the evidence on record, which did not include an actual copy of the CFI Order in Special Proceedings No. 928-R. Respondents only submitted a certified true copy thereof on 15 June 2006, annexed to their Supplemental Reply to petitioners opposition to their motion for reconsideration of this Courts Decision. Respondents did not offer any explanation as to why they belatedly produced a copy of the said Order, but merely claimed to have been fortunate enough to obtain a copy thereof from the Register of Deeds of Cebu.ii[16]
Respondents should be taken to task for springing new evidence so late into the proceedings of this case. Parties should present all their available evidence at the courts below so as to give the opposing party the opportunity to scrutinize and challenge such evidence during the course of the trial. However, given that the existence of the CFI Order in Special Proceedings No. 928-R was never in issue and was, in fact, admitted by the petitioners; that the copy submitted is a certified true copy of the said Order; and that the said Order may provide new information vital to a just resolution of the present case, this Court is compelled to consider the same as part of the evidence on record.

The CFI Orderii[17] in question reads in full as


ORDER
This is with reference to the Motion of the Administratrix, dated January 5, 1960, that she be declared the sole heir of her deceased husband, Maximino Suico Briones, the latter having died without any legitimate ascendant nor descendant, nor any legitimate brother or sister, nephews or nieces.

At the hearing of this incident today, nobody appeared to resist the motion, and based on the uncontradicted testimony of Donata G. Ortiz that she was the nearest surviving relative of the deceased Maximino Suico Briones at the time of the latters death, and pursuant to the pertinent provisions of the new Civil Code of the Philippines, the Court hereby declares the aforesaid Donata G. Ortiz the sole, absolute and exclusive heir of the estate of the deceased Maximino Suico Briones, and she is hereby entitled to inherit all the residue of this estate after paying all the obligations thereof, which properties are those contained in the Inventory, dated October 2, 1952.

Cebu City, January 15, 1960.

From the contents of the afore-quoted Order, this Court is able to deduce that the CFI Order was in fact issued on 15 January 1960 and not 2 October 1952, as earlier stated in the Decision. It was the inventory of properties, submitted by Donata as administratrix of Maximinos intestate estate, which was dated 2 October 1952.ii[18] Other than such observation, this Court finds nothing in the CFI Order which could change its original position in the Decision under consideration.

While it is true that since the CFI was not informed that Maximino still had surviving siblings and so the court was not able to order that these siblings be given personal notices of the intestate proceedings, it should be borne in mind that the settlement of estate, whether testate or intestate, is a proceeding in rem,ii[19] and that the publication in the newspapers of the filing of the application and of the date set for the hearing of the same, in the manner prescribed by law, is a notice to the whole world of the existence of the proceedings and of the hearing on the date and time indicated in the publication. The publication requirement of the notice in newspapers is precisely for the purpose of informing all interested parties in the estate of the deceased of the existence of the settlement proceedings, most especially those who were not named as heirs or creditors in the petition, regardless of whether such omission was voluntarily or involuntarily made.

This Court cannot stress enough that the CFI Order was the result of the intestate proceedings instituted by Donata before the trial court. As this Court pointed out in its earlier Decision, the manner by which the CFI judge conducted the proceedings enjoys the presumption of regularity, and encompassed in such presumption is the order of publication of the notice of the intestate proceedings. A review of the records fails to show any allegation or concrete proof that the CFI also failed to order the publication in newspapers of the notice of the intestate proceedings and to require proof from Donata of compliance therewith. Neither can this Court find any reason or explanation as to why Maximinos siblings could have missed the published notice of the intestate proceedings of their brother.

In relying on the presumptions of the regular performance of official duty and lawful exercise of jurisdiction by the CFI in rendering the questioned Order, dated 15 January 1960, this Court is not, as counsel for respondents allege, sacrificing the substantive right of respondents to their share in the inheritance in favor

of mere procedural fiats. There is a rationale for the establishment of rules of procedure, as amply explained by this Court in De Dios v. Court of Appealsii[20]

Procedural rules are designed to insure the orderly and expeditious administration of justice by providing for a practical system by which the parties to a litigation may be accorded a full and fair opportunity to present their respective positions and refute each other's submissions under the prescribed requirements, conditions and limitations. Adjective law is not the counterfoil of substantive law. In fact, there is a symbiotic relationship between them. By complying faithfully with the Rules of Court, the bench and the bar are better able to discuss, analyze and understand substantive rights and duties and consequently to more effectively protect and enforce them. The other alternative is judicial anarchy.

Thus, compliance with the procedural rules is the general rule, and abandonment thereof should only be done in the most exceptional circumstances. The presumptions relied upon by this Court in the instant case are disputable presumptions, which are satisfactory, unless contradicted or overcome by evidence. This Court finds that the evidence presented by respondents failed to overcome the given presumptions.

Although Donata may have alleged before the CFI that she was her husbands sole heir, it was not established that she did so knowingly, maliciously and in bad faith, so as for this Court to conclude that she indeed committed fraud. This Court again brings to the fore the delay by which respondents filed the present case, when the principal actors involved, particularly, Donata and Maximinos siblings, have already passed away and their lips forever sealed as to what truly transpired between them. On the other hand, Special Proceedings No. 928-R took place when all these principal actors were still alive and each would have been capable to act to protect his or her own right to Maximinos estate. Letters of Administration of Maximinos estate were issued in favor of Donata as early as 8 July 1952, and the CFI Order in question was issued only on 15 January 1960. The intestate proceedings for the settlement of Maximinos estate were thus pending for almost eight years, and it is the burden of the respondents to establish that their parents or grandparents, Maximinos surviving siblings, had absolutely no knowledge of the said proceedings all these years. As established in Ramos v. Ramos,ii[21] the degree of proof to establish fraud in a case where the principal actors to the transaction have already passed away is proof beyond reasonable doubt, to wit

"x x x But length of time necessarily obscures all human evidence; and as it thus removes from the parties all the immediate means to verify the nature of the original transactions, it operates by way of presumption, in favor of innocence, and against imputation of fraud. It would be unreasonable, after a great length of time, to require exact proof of all the minute circumstances of any transaction, or to expect a satisfactory explanation of every difficulty, real or apparent, with which it may be encumbered. The most that can fairly be expected, in such cases, if the parties are living, from the frailty of memory, and human infirmity, is, that the material facts can be given with certainty to a common intent; and, if the parties are dead, and the cases rest in confidence, and in parol agreements, the most that we can hope is to arrive at probable conjectures, and to substitute general presumptions of law, for exact knowledge. Fraud, or breach of trust, ought not lightly to be imputed to the living; for, the legal presumption is the other way; as to the dead, who are not here to answer for themselves, it would be the height of injustice and cruelty, to disturb their ashes, and violate the sanctity of the grave, unless the evidence of fraud be clear, beyond a reasonable doubt (Prevost vs. Gratz, 6 Wheat. [U.S.], 481, 498).

Moreover, even if Donatas allegation that she was Maximinos sole heir does constitute fraud, it is insufficient to justify abandonment of the CFI Order, dated 15 January 1960, ii[ 2 2 ] considering the nature of intestate proceedings as being in rem and the disputable presumptions of the regular performance of official duty and lawful exercise of jurisdiction by the CFI in rendering the questioned Order, dated 15 January 1960, in Special Proceedings No. 928-R.

On prescription of the right to recover based on implied trust

Assuming, for the sake of argument, that Donatas misrepresentation constitutes fraud that would impose upon her the implied trust provided in Article 1456 of the Civil Code, this Court still cannot sustain respondents contention that their right to recover their shares in Maximinos estate is imprescriptible. It is already settled in jurisprudence that an implied trust, as opposed to an express trust, is subject to prescription and laches.

The case of Ramos v. Ramosii[23] already provides an elucidating discourse on the matter, to wit

"Trusts are either express or implied. Express trusts are created by the intention of the trustor or of the parties. Implied trusts come into being by operation of law" (Art. 1441, Civil Code). "No express trusts concerning an immovable or any interest therein may be proven by oral evidence. An implied trust may be proven by oral evidence" (Ibid; Arts. 1443 and 1457).

"No particular words are required for the creation of an express trust, it being sufficient that a trust is clearly intended" (Ibid; Art. 1444; Tuason de Perez vs. Caluag, 96 Phil. 981; Julio vs. Dalandan, L-19012, October 30, 1967, 21 SCRA 543, 546). "Express trusts are those which are created by the direct and positive acts of the parties, by some writing or deed, or will, or by words either expressly or impliedly evincing an intention to create a trust" (89 C.J. S. 122).

"Implied trusts are those which, without being expressed, are deducible from the nature of the transaction as matters of intent, or which are superinduced on the transaction by operation of law as matters of equity, independently of the particular intention of the parties" (89 C.J.S. 724). They are ordinarily subdivided into resulting and constructive trusts (89 C.J.S. 722).

"A resulting trust is broadly defined as a trust which is raised or created by the act or construction of law, but in its more restricted sense it is a trust raised by implication of law and presumed always to have been contemplated by the parties, the intention as to which is to be found in the nature of their transaction, but not expressed in the deed or instrument of conveyance" (89 C.J.S. 725). Examples of resulting trusts are found in Article 1448 to 1455 of the Civil Code. See Padilla vs. Court of Appeals, L-31569, September 28, 1973, 53 SCRA 168, 179).

On the other hand, a constructive trust is a trust "raised by construction of law, or arising by operation of law." In a more restricted sense and as contradistinguished from a resulting trust, a constructive trust is "a trust not created by any words, either expressly or impliedly evincing a direct intention to create a trust, but by the construction of equity in order to satisfy the demands of justice. It does not arise by agreement or intention but by operation of law." (89 C.J.S. 726727). "If a person obtains legal title to property by fraud or concealment, courts of equity will impress upon the title a so-called constructive trust in favor of the defrauded party." A constructive trust is not a trust in the technical sense (Gayondato vs. Treasurer of the P.I., 49 Phil. 244; See Art. 1456, Civil Code).

There is a rule that a trustee cannot acquire by prescription the ownership of property entrusted to him (Palma vs. Cristobal, 77 Phil. 712), or that an action to compel a trustee to

convey property registered in his name in trust for the benefit of the cestui qui trust does not prescribe (Manalang vs. Canlas, 94 Phil. 776; Cristobal vs. Gomez, 50 Phil. 810), or that the defense of prescription cannot be set up in an action to recover property held by a person in trust for the benefit of another (Sevilla vs. De los Angeles, 97 Phil. 875), or that property held in trust can be recovered by the beneficiary regardless of the lapse of time ( Marabilles vs. Quito, 100 Phil. 64; Bancairen vs. Diones, 98 Phil. 122, 126; Juan vs. Zuiga, 62 O.G. 1351; 4 SCRA 1221; Jacinto vs. Jacinto, L-17957, May 31, 1962. See Tamayo vs. Callejo, 147 Phil. 31, 37).

That rule applies squarely to express trusts. The basis of the rule is that the possession of a trustee is not adverse. Not being adverse, he does not acquire by prescription the property held in trust. Thus, Section 38 of Act 190 provides that the law of prescription does not apply "in the case of a continuing and subsisting trust" (Diaz vs. Gorricho and Aguado, 103 Phil. 261, 266; Laguna vs. Levantino, 71 Phil. 566; Sumira vs. Vistan, 74 Phil. 138; Golfeo vs. Court of Appeals, 63 O.G. 4895, 12 SCRA 199; Caladiao vs. Santos, 63 O.G. 1956, 10 SCRA 691).

The rule of imprescriptibility of the action to recover property held in trust may possibly apply to resulting trusts as long as the trustee has not repudiated the trust (Heirs of Candelaria vs. Romero, 109 Phil. 500, 502-3; Martinez vs. Grao, 42 Phil. 35; Buencamino vs. Matias, 63 O. G. 11033, 16 SCRA 849).

The rule of imprescriptibility was misapplied to constructive trusts (Geronimo and Isidoro vs. Nava and Aquino, 105 Phil. 145, 153. Compare with Cuison vs. Fernandez and Bengzon, 105 Phil. 135, 139; De Pasion vs. De Pasion, 112 Phil. 403, 407).

Acquisitive prescription may bar the action of the beneficiary against the trustee in an express trust for the recovery of the property held in trust where (a) the trustee has performed unequivocal acts of repudiation amounting to an ouster of the cestui qui trust; (b) such positive acts of repudiation have been made known to the cestui qui trust and (c) the evidence thereon is clear and conclusive (Laguna vs. Levantino, supra; Salinas vs. Tuason, 55 Phil. 729. Compare with the rule regarding co-owners found in the last paragraph of Article 494, Civil Code; Casaas vs. Rosello, 50 Phil. 97; Gerona vs. De Guzman, L-19060, May 29, 1964, 11 SCRA 153, 157). With respect to constructive trusts, the rule is different. The prescriptibility of an action for reconveyance based on constructive trust is now settled (Alzona vs. Capunitan, L10228, February 28, 1962, 4 SCRA 450; Gerona vs. De Guzman, supra; Claridad vs. Henares, 97 Phil. 973; Gonzales vs. Jimenez, L-19073, January 30, 1965, 13 SCRA 80; Boaga vs. Soler, 112 Phil. 651; J. M. Tuason & Co., vs. Magdangal, L-15539, January 30, 1962, 4 SCRA 84). Prescription may supervene in an implied trust (Bueno vs. Reyes, L-22587, April 28, 1969, 27

SCRA 1179; Fabian vs. Fabian, L-20449, January 29, 1968; Jacinto vs. Jacinto, L-17957, May 31, 1962, 5 SCRA 371). And whether the trust is resulting or constructive, its enforcement may be barred by laches (90 C.J.S. 887-889; 54 Am Jur. 449-450; Diaz vs. Gorricho and Aguado, supra; Compare with Mejia vs. Gampona, 100 Phil. 277). [Emphases supplied.] A present reading of the Quionii[24] and Sevillaii[25] cases, invoked by respondents, must be made in conjunction with and guided accordingly by the principles established in the afore-quoted case. Thus, while respondents right to inheritance was transferred or vested upon them at the time of Maximinos death, their enforcement of said right by appropriate legal action may be barred by the prescription of the action. Prescription of the action for reconveyance of the disputed properties based on implied trust is governed by Article 1144 of the New Civil Code, which reads ART. 1144. The following actions must be brought within ten years from the time the right of action accrues: (1) Upon a written contract; (2) Upon an obligation created by law;

(3) Upon a judgment.

Since an implied trust is an obligation created by law (specifically, in this case, by Article 1456 of the New Civil Code), then respondents had 10 years within which to bring an action for reconveyance of their shares in Maximinos properties. The next question now is when should the ten-year prescriptive period be reckoned from. The general rule is that an action for reconveyance of real property based on implied trust prescribes ten years from registration and/or issuance of the title to the property,ii[26] not only because registration under the Torrens system is a constructive notice of title,ii[27] but also because by registering the disputed properties exclusively in her name, Donata had already unequivocally repudiated any other claim to the same.

By virtue of the CFI Order, dated 15 January 1960, in Special Proceedings No. 928-R, Donata was able to register and secure certificates of title over the disputed properties in her name on 27 June 1960. The respondents filed with the RTC their Complaint for partition, annulment, and recovery of possession of the disputed real properties, docketed as Civil Case No. CEB-5794, only on 3 March 1987, almost 27 years after the registration of the said properties in the name of Donata. Therefore, respondents action for recovery of possession of the disputed properties had clearly prescribed. Moreover, even though respondents Complaint before the RTC in Civil Case No. CEB 5794 also prays for partition of the disputed properties, it does not make their action to enforce their right to the said properties imprescriptible. While as a general rule, the action for partition among co-owners does not prescribe so long as the co-ownership is expressly or impliedly recognized, as provided for in Article 494, of the New Civil Code, it bears to emphasize that Donata had never recognized respondents as co-owners or co-heirs, either expressly or impliedly.ii[28] Her assertion before the CFI in Special Proceedings No. 928-R that she was Maximinos sole heir necessarily excludes recognition of some other co-owner or coheir to the inherited properties; Consequently, the rule on non-prescription of action for partition of property owned in common does not apply to the case at bar. On laches as bar to recovery Other than prescription of action, respondents right to recover possession of the disputed properties, based on implied trust, is also barred by laches. The defense of laches, which is a question of inequity in permitting a claim to be enforced, applies independently of prescription, which is a question of time. Prescription is statutory; laches is equitable.ii[29] Laches is defined as the failure to assert a right for an unreasonable and unexplained length of time, warranting a presumption that the party entitled to assert it has either

abandoned or declined to assert it. This equitable defense is based upon grounds of public policy, which requires the discouragement of stale claims for the peace of society.ii[30] This Court has already thoroughly discussed in its Decision the basis for barring respondents action for recovery of the disputed properties because of laches. This Court pointed out thereinii[31] that
In further support of their contention of fraud by Donata, the heirs of Maximino even emphasized that Donata lived along the same street as some of the siblings of Maximino and, yet, she failed to inform them of the CFI Order, dated [15 January 1960], in Special Proceedings No. 928-R, and the issuance in her name of new TCTs covering the real properties which belonged to the estate of Maximino. This Court, however, appreciates such information differently. It actually works against the heirs of Maximino. Since they only lived nearby, Maximinos siblings had ample opportunity to inquire or discuss with Donata the status of the estate of their deceased brother. Some of the real properties, which belonged to the estate of Maximino, were also located within the same area as their residences in Cebu City, and Maximinos siblings could have regularly observed the actions and behavior of Donata with regard to the said real properties. It is uncontested that from the time of Maximinos death on 1 May 1952, Donata had possession of the real properties. She managed the real properties and even collected rental fees on some of them until her own death on 1 November 1977. After Donatas death, Erlinda took possession of the real properties, and continued to manage the same and collect the rental fees thereon. Donata and, subsequently, Erlinda, were so obviously

exercising rights of ownership over the real properties, in exclusion of all others, which

must have already put the heirs of Maximino on guard if they truly believed that they still had rights thereto.

The heirs of Maximino knew he died on 1 May 1952. They even attended his wake. They did not offer any explanation as to why they had waited 33 years from Maximinos death before one of them, Silverio, filed a Petition for Letters of Administration for the intestate estate of Maximino on 21 January 1985. After learning that the intestate estate of Maximino was already settled in Special Proceedings No. 928-R, they waited another two years, before instituting, on 3 March 1987, Civil Case No. CEB-5794, the Complaint for partition, annulment and recovery of the real property belonging to the estate of Maximino. x x x
Considering the circumstances in the afore-quoted paragraphs, as well as respondents conduct before this Court, particularly the belated submission of evidence and argument of new issues, respondents are consistently displaying a penchant for delayed action, without any proffered reason or justification for such delay. It is well established that the law serves those who are vigilant and diligent and not those who sleep when the law requires them to act. The law does not encourage laches, indifference, negligence or ignorance. On the contrary, for a party to deserve the considerations of the courts, he must show that he is not guilty of any of the aforesaid failings.ii[32]

On void judgment or order Respondents presented only in their Reply and Supplemental Reply to the petitioners Opposition to their Motion for Reconsideration the argument that the CFI Order, dated 15 January 1960, in Special Proceedings No. 928-R is void and, thus, it cannot have any legal effect. Consequently, the registration of the disputed properties in the name of Donata pursuant to such Order was likewise void. This Court is unconvinced.

In the jurisprudence referred to by the respondents,ii[33] an order or judgment is considered void when rendered by the court without or in excess of its jurisdiction or in violation of a mandatory duty, circumstances which are not present in the case at bar.

Distinction must be made between a void judgment and a voidable one, thus

"* * * A voidable judgment is one which, though not a mere nullity, is liable to be made void when a person who has a right to proceed in the matter takes the proper steps to have its invalidity declared. It always contains some defect which may become fatal. It carries within it the means of its own overthrow. But unless and until it is duly annulled, it is attended with all the ordinary consequences of a legal judgment. The party against whom it is given may escape its effect as a bar or an obligation, but only by a proper application to have it vacated or reversed. Until that is done, it will be efficacious as a claim, an estoppel, or a source of title. If no proceedings are ever taken against it, it will continue throughout its life to all intents a valid sentence. If emanating from a court of general jurisdiction, it will be sustained by the ordinary presumptions of regularity, and it is not open to impeachment in any collateral action. * * *"

But it is otherwise when the judgment is void. "A void judgment is in legal effect no judgment. By it no rights are divested. From it no rights can be obtained. Being worthless in itself, all proceedings founded upon it are equally worthless. It neither binds nor bars any one. All acts performed under it and all claims flowing out of it are void. The parties attempting to enforce it may be responsible as trespassers. The purchaser at a sale by virtue of its authority finds himself without title and without redress." (Freeman on Judgments, sec. 117, citing Campbell vs. McCahan, 41 Ill., 45; Roberts vs. Stowers, 7 Bush, 295, Huls vs. Buntin, 47 Ill., 396; Sherrell vs. Goodrum, 3 Humph., 418; Andrews vs. State, 2 Sneed, 549; Hollingsworth vs. Bagley, 35 Tex., 345; Morton vs. Root, 2 Dill., 312; Commercial Bank of Manchester vs. Martin, 9 Smedes & M., 613; Hargis vs. Morse, 7 Kan., 259. See also Cornell vs. Barnes, 7 Hill, 35; Dawson and Another vs. Wells, 3 Ind., 399; Meyer vs. Mintonye, 106 Ill., 414; Olson vs. Nunnally, 47 Kan., 391; White vs. Foote L. & M. Co., 29 W. Va., 385.)

It is not always easy to draw the line of demarcation between a void judgment and a voidable one, but all authorities agree that jurisdiction over the subject-matter is essential to the validity of a judgment and that want of such jurisdiction renders it void and a mere nullity. In the eye of the law it is non-existent. (Fisher vs. Harnden, 1 Paine, 55; Towns vs. Springer, 9 Ga., 130; Mobley vs. Mobley, 9 Ga., 247; Beverly and McBride vs. Burke, 9 Ga., 440; Central Bank of Georgia vs. Gibson, 11 Ga., 453; Johnson vs. Johnson, 30 Ill., 215; St. Louis and Sandoval Coal and Mining Co. vs. Sandoval Coal and Mining Co., 111 Ill., 32; Swiggart vs. Harber, 4 Scam., 364; Miller vs. Snyder, 6 Ind., 1; Seely vs. Reid, 3 Greene [Iowa], 374.)ii[34]

The fraud and misrepresentation fostered by Donata on the CFI in Special Proceedings No. 928-R did not deprive the trial court of jurisdiction over the subject-matter of the case, namely, the intestate estate of Maximino. Donatas fraud and misrepresentation may have rendered the CFI Order, dated 15 January 1960, voidable, but not void on its face. Hence, the said Order, which already became final and executory, can only be set aside by direct action to annul and enjoin its enforcement.ii[35] It cannot be the subject of a collateral attack as is being done in this case. Note that respondents Complaint before the RTC in Civil Case No. CEB-5794 was one for partition, annulment, and recovery of possession of the disputed properties. The annulment sought in the Complaint was not that of the CFI Order, dated 15 January 1960, but of the certificates of title over the properties issued in Donatas name. So until and unless respondents bring a direct action to nullify the CFI Order, dated 15 January 1960, in Special Proceedings No. 928-R, and attain a favorable judgment therein, the assailed Order remains valid and binding. Nonetheless, this Court also points out that an action to annul an order or judgment based on fraud must be brought within four years from the discovery of the fraud.ii[36] If it is conceded that the respondents came to know of Donatas fraudulent acts only in 1985, during the course of the RTC proceedings which they instituted for the settlement of Maximinos estate, then their right to file an action to annul the CFI Order, dated 15 January 1960, in Special Proceedings No. 928-R (earlier instituted by Donata for the settlement of Maximinos estate), has likewise prescribed by present time.

In view of the foregoing, the Motion for Reconsideration is DENIED. SO ORDERED.

EN BANC [G.R. No. 142675. July 22, 2005] VICENTE AGOTE Y MATOL, petitioner, vs. HON. MANUEL F. LORENZO, Presiding Judge, RTC, Branch 43, Manila and PEOPLE OF THE PHILIPPINES, respondents. DECISION GARCIA, J.: In this appeal by way of a petition for review on certiorari under Rule 45 of the Rules of Court, petitioner Vicente Agote y Matol seeks to annul and set aside the following resolutions of the Court of Appeals in CAG.R. SP No. 2991-UDK, to wit: 1. Resolution dated September 14, 1999,[1] dismissing the Petition for Certiorari with Prayer for the Issuance of a Temporary Restraining Order filed by the petitioner against the Honorable Manuel F. Lorenzo, Presiding Judge, Regional Trial Court, Manila, Branch 43 for refusing to retroactively apply in his favor Republic Act No. 8294[2]; and, 2. Resolution dated February 8, 2000,[3] denying petitioners motion for reconsideration. As culled from the pleadings on record, the following are the undisputed factual antecedents: Petitioner Vicente Agote y Matol was earlier charged before the sala of respondent judge with Illegal Possession of Firearms under Presidential Decree No. 1866[4] and violation of COMELEC Resolution No. 2826[5] (Gun Ban), docketed as Criminal Cases No. 96-149820 and 96-149821, respectively, allegedly committed, as follows: CRIMINAL CASE NO. 96-149820 That on or about April 27, 1996 in the City of Manila, Philippines, the said accused did then and there willfully, unlawfully, knowingly have in possession and under his custody and control, One (1) .38 cal. Rev. without serial no. with four (4) live bullets. Without first having secured from the proper authorities the necessary license therefor. CONTRARY TO LAW. CRIMINAL CASE NO. 96-149821 That on or about April 27, 1996, in the City of Manila, Philippines, the said accused did then and there, willfully, unlawfully and knowingly have in his possession and under his custody and control one (1) .38 cal. Rev. without serial number, with four (4) live ammunition/bullets in the chamber, by then and there carrying the

same along V. Mapa Ext. Sta. Mesa, this City, which is a public place on the aforesaid date which is covered by an election period, without first securing the written authority from the COMELEC, as provided for by the COMELEC Resolution No. 2828, in relation to RA No. 7166 (Gun Ban). CONTRARY TO LAW. On arraignment, petitioner pleaded Not Guilty to both charges. Thereafter, the two (2) cases were tried jointly. Eventually, in a decision dated May 18, 1999, the trial court rendered a judgment of conviction in both cases, separately sentencing petitioner to an indeterminate penalty of ten (10) years and one (1) day of prision mayor, as minimum, to eighteen (18) years eight (8) months and one (1) day of reclusion temporal, as maximum, in accordance with PD. No. 1866 in Crim. Case No. 96-149820 (illegal possession of firearm), and to a prison term of one (1) year in Crim. Case No. 96-149821 (violation of the COMELEC Resolution on gun ban). Meanwhile, on June 6, 1997, Republic Act No. 8294[6] was approved into law. Pointing out, among others, that the penalty for illegal possession of firearms under P.D. No. 1866 has already been reduced by the subsequent enactment of Rep. Act No. 8294, hence, the latter law, being favorable to him, should be the one applied in determining his penalty for illegal possession of firearms, petitioner moved for a reconsideration of the May 18, 1999 decision of the trial court. In its order dated July 15, 1999,[7] however, the trial court denied petitioners motion, saying: While the law (R.A. 8294) is indeed favorable to the accused and therefore should be made retroactive we are also guided by Art. 4 of the Civil Code which states that laws shall have no retroactive effect, unless the contrary is provided. Republic Act 8294 did not so provide that it shall have a retroactive effect. The Supreme Court likewise in the case of Padilla vs. CA declared: The trial court and the respondent court are bound to apply the governing law at the time of the appellants commission of the offense for it is a rule that laws are repealed only by subsequent ones. Indeed, it is the duty of judicial officers to respect and apply the law as it stands. Therefrom, petitioner went to the Court of Appeals on a petition for certiorari with prayer for a temporary restraining order, thereat docketed as CA-G.R. SP No. 2991-UDK. In the herein assailed resolution dated September 14, 1999,[8] the appellate court dismissed petitioners recourse on two (2) grounds, to wit: (a) the remedy of certiorari availed of by petitioner is improper since he should have appealed from the July 15, 1999 order of the trial court; and (b) lack of jurisdiction, as the issue involved is a pure question of law cognizable by the Supreme Court. With his motion for reconsideration having been denied by the appellate court in its subsequent resolution of February 8, 2000,[9] petitioner is now with us, submitting for resolution the following issues: (1) whether the Court of Appeals erred in dismissing his petition for certiorari; and (2) whether the courts below erred in not giving Rep. Act No. 8294 a retroactive application. The petition is partly meritorious. At the outset, it must be stressed that petitioner never put in issue the factual findings of the trial court. What he questions is said courts legal conclusion that Rep. Act No. 8294 cannot be retroactively applied to him. Unquestionably, the issue raised is one purely of law. As we have said in Macawiwili Gold Mining and Development Co., Inc. v. Court of Appeals:[10]

For a question to be one of law, the same must not involve an examination of the probative value of the evidence presented by the litigants or any one of them. And the distinction is well-known: there is a question of law in a given case when the doubt or difference arises as to what the law is on a certain state of facts; there is a question of fact when the doubt or difference arises as to the truth or the falsehood of the facts alleged. Considering that judgments of regional trial courts in the exercise of their original jurisdiction are to be elevated to the Court of Appeals in cases when appellant raises questions of fact or mixed questions of fact and law, while appeals from judgments of the [same courts] in the exercise of their original jurisdiction must be brought directly to the Supreme Court in cases where the appellant raises only questions of law [11], petitioner should have appealed the trial courts ruling to this Court by wa y of a petition for review on certiorari in accordance with Rule 45 of the 1997 Rules of Civil Procedure, as amended,[12] pursuant to Rule 41, Section 2 (c) of the same Rules, viz: SEC. 2. Modes of appeal. (a) xxx xxx xxx (b) xxx xxx xxx (c) Appeal by certiorari. In all cases where only questions of law are raised or involved, the appeal shall be to the Supreme Court by petition for review on certiorari in accordance with Rule 45. By reason, then, of the availability to petitioner of the remedy of a petition for review under Rule 45, his right to resort to a petition for certiorari under Rule 65 was effectively foreclosed, precisely because one of the requirements for the availment of the latter remedy is that there should be no appeal, or any plain, speedy and adequate remedy in the ordinary course of law ,[13] the remedies of appeal and certiorari being mutually exclusive and not alternative or successive.[14] As correctly observed by the Court of Appeals, what petitioner should have done was to take an appeal from the trial courts order of July 15, 1999 which denied his motion for reconsideration of the May 18, 1999 judgment of conviction. Petitioners case is worse compounded by the fact that even his period for appeal had already prescribed when he filed with the Court of Appeals his certiorari petition in CA-G.R. SP No. 2991-UDK. The Rollo of said case reveals that petitioner received his copy of the trial courts order denying his motion for reconsideration on July 20, 1999. As the same Rollo shows, it was only on August 23, 1999, or after more than fifteen (15) days when petitioner filed his wrong remedy of certiorari with the appellate court. Be that as it may, the Court feels that it must squarely address the issue raised in this case regarding the retroactivity of Rep. Act No. 8294, what with the reality that the provisions thereof are undoubtedly favorable to petitioner. For this purpose, then, we shall exercise our prerogative to set aside technicalities in the Rules and hold the bull by its horns, so to speak. After all, the power of this Court to suspend its own rules whenever the interest of justice requires is not without legal authority or precedent. In Solicitor General, et. al. vs. The Metropolitan Manila Authority,[15] we held: Unquestionably, the Court has the power to suspend procedural rules in the exercise of its inherent power, as expressly recognized in the Constitution, to promulgate rules concerning pleading, practice and procedure in all courts. In proper cases, procedural rules may be relaxed or suspended in the interest of substantial justice, which otherwise may be miscarried because of a rigid and formalistic adherence to such rules. xxx xxx xxx xxx

We have made similar rulings in other cases, thus: Be it remembered that rules of procedure are but mere tools designed to facilitate the attainment of justice. Their strict and rigid application, which would result in technicalities that tend to frustrate rather than promote substantial justice, must always be avoided. xxx Time and again, this Court has suspended its own rules and excepted a particular case from their operation whenever the higher interests of justice so require. We shall now proceed to determine whether the provisions of Rep. Act No. 8294 amending P.D. No. 1866 can be retroactively applied to this case. Here, the two (2) crimes for which petitioner was convicted by the trial court, i.e., (1) illegal possession of firearms under P.D. No. 1866 and (2) violation of COMELEC Resolution No. 2826 on gun ban, were both committed by the petitioner on April 27, 1996. For the crime of illegal possession of firearms in Crim. Case No. 96-149820, he was sentenced to suffer a prison term ranging from ten (10) years and one (1) day of prision mayor, as minimum, to (18) eighteen years, eight (8) months and one (1) day of reclusion temporal, as maximum, in accordance with P.D. No. 1866, Section 1 of which reads: SECTION 1. Unlawful Manufacture, Sale, Acquisition, Disposition or Possession of Firearms or Ammunition or Instruments Used or Intended to be Used in the Manufacture of Firearms of Ammunition. The penalty of reclusion temporal in its maximum period to reclusion perpetua shall be imposed upon any person who shall unlawfully manufacture, deal in, acquire, dispose, or possess any firearm, part of firearm, ammunition or machinery, tool or instrument used or intended to be used in the manufacture of any firearm or ammunition. (Emphasis supplied) When Rep. Act No. 8294 took effect on July 6, 1997,[16] the penalty for illegal possession of firearms was lowered, depending on the class of firearm possessed, viz: SECTION 1. follows: Section 1 of Presidential Decree No. 1866, as amended, is hereby further amended to read as

SECTION 1. Unlawful Manufacture, Sale, Acquisition, Disposition or Possession of Firearms or Ammunition or Instruments Used or Intended to be Used in the Manufacture of Firearms or Ammunition. The penalty of prision correccional in its maximum period and a fine of not less than Fifteen thousand pesos (P15,000) shall be imposed upon any person who shall unlawfully manufacture, deal in, acquire, dispose, or possess any low powered firearm, such as rimfire handgun, .380 or .32 and other firearm of similar firepower, part of firearm, ammunition, or machinery, tool or instrument used or intended to be used in the manufacture of any firearm or ammunition: Provided, That no other crime was committed. The penalty of prision mayor in its minimum period and a fine of Thirty thousand pesos (P30,000) shall be imposed if the firearm is classified as high powered firearm which includes those with bores bigger in diameter than .38 caliber and 9 millimeter such as caliber .40, .41, .44, .45 and also lesser calibered firearms but considered powerful such as caliber .357 and caliber .22 center-fire magnum and other firearms with firing capability of full automatic and by burst of two or three: Provided, however, That no other crime was committed by the person arrested. (Emphasis supplied) Based on the foregoing, petitioner contends that the reduced penalty under Rep. Act No. 8294 should be the one imposed on him. Significantly, in its Manifestation In Lieu of Comment,[17] the Office of the Solicitor General agrees with the petitioner, positing further that the statement made by this Court in People vs. Jayson[18] to the effect that the provisions for a lighter penalty under Rep. Act No. 8294 does not apply if another crime has been committed, should not be applied to this case because the proviso in Section 1 of said law that no other crime was committed must refer only to those crimes committed with the use of an unlicensed firearm

and not when the other crime is not related to the use thereof or where the law violated merely criminalizes the possession of the same, like in the case of election gun ban, as here. As early as August 1997, the month after Rep. Act No. 8294 took effect,[19] this Court has pronounced in Gonzales vs. Court of Appeals[20] that said law must be given retroactive effect in favor of those accused under P.D. No. 1866. Since then, this Court had consistently adhered to the Gonzales ruling.[21] For sure, in People vs. Valdez,[22] where the accused was charged with the complex crime of multiple murder with double frustrated murder and illegal possession of firearms and ammunitions under two separate informations, this Court even took a bolder stance by applying Rep. Act No. 8294 retroactively so that the accused therein may not be convicted of the separate crime of illegal possession of firearms, but refused to apply the same retroactively so as to aggravate the crime of murder. The Valdez ruling had been applied in a host of subsequent cases.[23] Yet, in other cases,[24] although the Court had given Rep. Act No. 8294 retroactive effect so as to prevent the conviction of an accused of the separate crime of illegal possession of firearm when the said unlicensed firearm was used to commit the crime of murder or homicide, the Court did not appreciate this use of such unlicensed firearm as an aggravating circumstance as provided therein, when the use of an unlicensed firearm was not specifically alleged in the information, as required by the Rules on Criminal Procedure. In the light of the existing rulings and jurisprudence on the matter, the present case takes center stage presenting, this time, another twist, so to speak. Petitioner, who was charged of illegal possession of firearms was also charged of another offense: Violation of COMELEC Resolution No. 2826 (Gun Ban), but the unlicensed firearm was not used or discharged in this case. The question then which appears to be of first impression, is whether or not the unlicensed firearm should be actually used and discharged in the course of committing the other crime in order that Sec. 1, Rep. Act No. 8294 will apply so that no separate crime of illegal possession of firearms may be charged. Let us take a look at the jurisprudence once again. In Cupcupin vs. People,[25] the accused was charged and convicted for two (2) separate crimes of illegal possession of firearms, and illegal possession of prohibited drugs. In the more recent case of People vs. Almeida,[26] however, although the accused was acquitted of the separate charge of illegal possession of firearm for lack of evidence, the Court nevertheless made the following clear pronouncement: Furthermore, in any event, the Court has ruled in previous cases that in view of the enactment of Republic Act No. 8294, there can be no separate offense of illegal possession of firearms and ammunition if there is another crime committed such as, in this case, that of illegal possession of dangerous drugs. (Emphasis supplied) In Almeida, it should be noted that the unlicensed firearm was merely found lying around, together with the prohibited drugs, and therefore, was not being used in the commission of an offense. Given this Courts aforequoted pronouncement in Almeida, can the accused in the present case still be separately convicted of two (2) offenses of illegal possession of firearms and violation of gun ban, more so because as in Almeida, the unlicensed firearm was not actually used or discharged in committing the other offense? In People vs. Walpan M. Ladjaalam,[27] this Court, interpreting the subject proviso in Section 1 of Rep. Act No. 8294, applied the basic principles in criminal law, and categorically held:

xxx A simple reading thereof shows that if an unlicensed firearm is used in the commission of any crime, there can be no separate offense of simple illegal possession of firearms. Hence, if the other crime is murder or homicide, illegal possession of firearms becomes merely an aggravating circumstance, not a separate offense. Since direct assault with multiple attempted homicide was committed in this case, appellant can no longer be held liable for illegal possession of firearms. Moreover, penal laws are construed liberally in favor of the accused. In this case, the plain meaning of RA 8294s simple language is most favorable to herein appellant. Verily, no other interpretation is justified, for the language of the new law demonstrates the legislative intent to favor the accused. Accordingly, appellant cannot be convicted of two separate offenses of illegal possession of firearms and direct assault with attempted homicide. xxx xxx xxx xxx

xxx The law is clear: the accused can be convicted of simple illegal possession of firearms, provided that no other crime was committed by the person arrested. If the intention of the law in the second paragraph were to refer only to homicide and murder, it should have expressly said so, as it did in the third paragraph. Verily, where the law does not distinguish, neither should we.(Emphasis supplied). The aforementioned ruling was reiterated and applied in the subsequent cases of People vs. Garcia,[28] where the judgment of conviction of the accused-appellants for illegal possession of firearms was set aside there being another crime kidnapping for ransom which they were perpetrating at the same time; People vs. Bernal,[29] where the Court retroactively applied Rep. Act No. 8294 in accused-appellants favor because it would mean his acquittal from the separate offense of illegal possession of firearms; and People vs. Bustamante,[30] where, in refusing to convict the accused-appellant of the separate offense of illegal possession of firearms, the Court declared that insofar as it is favorable to the appellant, the provisions of Rep. Act No. 8294 should be applied liberally and retroactively in that appellant must be acquitted of the charge of illegal possession of firearms. Guided by the foregoing, the Court cannot but set aside petitioners conviction in Criminal Case No. 96 -149820 for illegal possession of firearm since another crime was committed at the same time, i.e., violation of COMELEC Resolution No. 2826 or the Gun Ban. Admittedly, this ruling is not without misgivings considering that it would mean petitioners acquittal of the more serious offense of illegal possession of firearms which carries a much heavier penalty than violation of the COMELEC gun-ban resolution. However, as we have rationalized in Ladjaalam:[31] xxx Indeed, the accused may evade conviction for illegal possession of firearms by using such weapons in committing an even lighter offense, like alarm and scandal or slight physical injuries, both of which are punishable by arresto menor. This consequence, however, necessarily arises from the language of RA 8294, whose wisdom is not subject to the Courts review. Any perception that the result reached here appears unwise should be addressed to Congress. Indeed, the Court has no discretion to give statutes a new meaning detached from the manifest intendment and language of the legislature. Our task is constitutionally confined only to applying the law and jurisprudence to the proven facts, and we have done so in this case. The solemn power and duty of the Court to interpret and apply the law does not include the power to correct by reading into the law what is not written therein. While we understand respondent Peoples contention that the use of the firearm seemed to have been the main consideration during the deliberations of the subject provision of Rep. Act No. 8294, the fact remains that the word use never found its way into the final version of the bill which eventually became Rep. Act No. 8294. The Courts hands are now tied and it cannot supply the perceived deficiency in the final version without contravening the most basic principles in the interpretation of penal laws which had always leaned in favor of the accused. Under our system of government where powers are

allocated to the three (3) great branches, only the Legislature can remedy such deficiency, if any, by proper amendment of Sec. 1 of Rep. Act No. 8294. As written, Sec. 1, Rep. Act No. 8294 restrains the Court from convicting petitioner of the separate crime of illegal possession of firearm despite the fact that, as in Almeida, the unlicensed firearm was not actually used. For sure, there is, in this case, closer relation between possession of unlicensed firearm and violation of the COMELEC gun-ban than the illegal possession of unlicensed firearm to the crime of illegal possession of prohibited drugs in Almeida. WHEREFORE, Criminal Case No. 96-149820 for illegal possession of firearms is hereby DISMISSED while the judgment of conviction in Criminal Case No. 96-149821 for violation of COMELEC Resolution No. 2826 in relation to Rep. Act No. 7166 (Gun Ban), is AFFIRMED. Since petitioner has already served more than the penalty imposed upon him by the trial court in Criminal Case No. 96-149821, his immediate release from custody is hereby ORDERED unless detained for some other lawful cause. SO ORDERED. EN BANC [G.R. No. 142675. July 22, 2005] VICENTE AGOTE Y MATOL, petitioner, vs. HON. MANUEL F. LORENZO, Presiding Judge, RTC, Branch 43, Manila and PEOPLE OF THE PHILIPPINES, respondents. DECISION GARCIA, J.: In this appeal by way of a petition for review on certiorari under Rule 45 of the Rules of Court, petitioner Vicente Agote y Matol seeks to annul and set aside the following resolutions of the Court of Appeals in CAG.R. SP No. 2991-UDK, to wit: 1. Resolution dated September 14, 1999,[1] dismissing the Petition for Certiorari with Prayer for the Issuance of a Temporary Restraining Order filed by the petitioner against the Honorable Manuel F. Lorenzo, Presiding Judge, Regional Trial Court, Manila, Branch 43 for refusing to retroactively apply in his favor Republic Act No. 8294[2]; and, 2. Resolution dated February 8, 2000,[3] denying petitioners motion for reconsideration. As culled from the pleadings on record, the following are the undisputed factual antecedents: Petitioner Vicente Agote y Matol was earlier charged before the sala of respondent judge with Illegal Possession of Firearms under Presidential Decree No. 1866[4] and violation of COMELEC Resolution No. 2826[5] (Gun Ban), docketed as Criminal Cases No. 96-149820 and 96-149821, respectively, allegedly committed, as follows: CRIMINAL CASE NO. 96-149820

That on or about April 27, 1996 in the City of Manila, Philippines, the said accused did then and there willfully, unlawfully, knowingly have in possession and under his custody and control, One (1) .38 cal. Rev. without serial no. with four (4) live bullets. Without first having secured from the proper authorities the necessary license therefor. CONTRARY TO LAW. CRIMINAL CASE NO. 96-149821 That on or about April 27, 1996, in the City of Manila, Philippines, the said accused did then and there, willfully, unlawfully and knowingly have in his possession and under his custody and control one (1) .38 cal. Rev. without serial number, with four (4) live ammunition/bullets in the chamber, by then and there carrying the same along V. Mapa Ext. Sta. Mesa, this City, which is a public place on the aforesaid date which is covered by an election period, without first securing the written authority from the COMELEC, as provided for by the COMELEC Resolution No. 2828, in relation to RA No. 7166 (Gun Ban). CONTRARY TO LAW. On arraignment, petitioner pleaded Not Guilty to both charges. Thereafter, the two (2) cases were tried jointly. Eventually, in a decision dated May 18, 1999, the trial court rendered a judgment of conviction in both cases, separately sentencing petitioner to an indeterminate penalty of ten (10) years and one (1) day of prision mayor, as minimum, to eighteen (18) years eight (8) months and one (1) day of reclusion temporal, as maximum, in accordance with PD. No. 1866 in Crim. Case No. 96-149820 (illegal possession of firearm), and to a prison term of one (1) year in Crim. Case No. 96-149821 (violation of the COMELEC Resolution on gun ban). Meanwhile, on June 6, 1997, Republic Act No. 8294[6] was approved into law. Pointing out, among others, that the penalty for illegal possession of firearms under P.D. No. 1866 has already been reduced by the subsequent enactment of Rep. Act No. 8294, hence, the latter law, being favorable to him, should be the one applied in determining his penalty for illegal possession of firearms, petitioner moved for a reconsideration of the May 18, 1999 decision of the trial court. In its order dated July 15, 1999,[7] however, the trial court denied petitioners motion, saying: While the law (R.A. 8294) is indeed favorable to the accused and therefore should be made retroactive we are also guided by Art. 4 of the Civil Code which states that laws shall have no retroactive effect, unless the contrary is provided. Republic Act 8294 did not so provide that it shall have a retroactive effect. The Supreme Court likewise in the case of Padilla vs. CA declared: The trial court and the respondent court are bound to apply the governing law at the time of the appellants commission of the offense for it is a rule that laws are repealed only by subsequent ones. Indeed, it is the duty of judicial officers to respect and apply the law as it stands. Therefrom, petitioner went to the Court of Appeals on a petition for certiorari with prayer for a temporary restraining order, thereat docketed as CA-G.R. SP No. 2991-UDK. In the herein assailed resolution dated September 14, 1999,[8] the appellate court dismissed petitioners recourse on two (2) grounds, to wit: (a) the remedy of certiorari availed of by petitioner is improper since he should have appealed from the July 15, 1999 order of the trial court; and (b) lack of jurisdiction, as the issue involved is a pure question of law cognizable by the Supreme Court.

With his motion for reconsideration having been denied by the appellate court in its subsequent resolution of February 8, 2000,[9] petitioner is now with us, submitting for resolution the following issues: (1) whether the Court of Appeals erred in dismissing his petition for certiorari; and (2) whether the courts below erred in not giving Rep. Act No. 8294 a retroactive application. The petition is partly meritorious. At the outset, it must be stressed that petitioner never put in issue the factual findings of the trial court. What he questions is said courts legal conclusion that Rep. Act No. 8294 cannot be retroactively applied to him. Unquestionably, the issue raised is one purely of law. As we have said in Macawiwili Gold Mining and Development Co., Inc. v. Court of Appeals:[10] For a question to be one of law, the same must not involve an examination of the probative value of the evidence presented by the litigants or any one of them. And the distinction is well-known: there is a question of law in a given case when the doubt or difference arises as to what the law is on a certain state of facts; there is a question of fact when the doubt or difference arises as to the truth or the falsehood of the facts alleged. Considering that judgments of regional trial courts in the exercise of their original jurisdiction are to be elevated to the Court of Appeals in cases when appellant raises questions of fact or mixed questions of fact and law, while appeals from judgments of the [same courts] in the exercise of their original jurisdiction must be brought directly to the Supreme Court in cases where the appellant raises only questions of law [11], petitioner should have appealed the trial courts ruling to this Court by way of a petition for review on certiorari in accordance with Rule 45 of the 1997 Rules of Civil Procedure, as amended,[12] pursuant to Rule 41, Section 2 (c) of the same Rules, viz: SEC. 2. Modes of appeal. (a) xxx xxx xxx (b) xxx xxx xxx (c) Appeal by certiorari. In all cases where only questions of law are raised or involved, the appeal shall be to the Supreme Court by petition for review on certiorari in accordance with Rule 45. By reason, then, of the availability to petitioner of the remedy of a petition for review under Rule 45, his right to resort to a petition for certiorari under Rule 65 was effectively foreclosed, precisely because one of the requirements for the availment of the latter remedy is that there should be no appeal, or any plain, speedy and adequate remedy in the ordinary course of law ,[13] the remedies of appeal and certiorari being mutually exclusive and not alternative or successive.[14] As correctly observed by the Court of Appeals, what petitioner should have done was to take an appeal from the trial courts order of July 15, 1999 which denied his motion for reconsideration of the May 18, 1999 judgment of conviction. Petitioners case is worse compounded by the fact that even his period for appeal had already prescribed when he filed with the Court of Appeals his certiorari petition in CA-G.R. SP No. 2991-UDK. The Rollo of said case reveals that petitioner received his copy of the trial courts order denying his motion for reconsideration on July 20, 1999. As the same Rollo shows, it was only on August 23, 1999, or after more than fifteen (15) days when petitioner filed his wrong remedy of certiorari with the appellate court.

Be that as it may, the Court feels that it must squarely address the issue raised in this case regarding the retroactivity of Rep. Act No. 8294, what with the reality that the provisions thereof are undoubtedly favorable to petitioner. For this purpose, then, we shall exercise our prerogative to set aside technicalities in the Rules and hold the bull by its horns, so to speak. After all, the power of this Court to suspend its own rules whenever the interest of justice requires is not without legal authority or precedent. In Solicitor General, et. al. vs. The Metropolitan Manila Authority,[15] we held: Unquestionably, the Court has the power to suspend procedural rules in the exercise of its inherent power, as expressly recognized in the Constitution, to promulgate rules concerning pleading, practice and procedure in all courts. In proper cases, procedural rules may be relaxed or suspended in the interest of substantial justice, which otherwise may be miscarried because of a rigid and formalistic adherence to such rules. xxx xxx xxx xxx

We have made similar rulings in other cases, thus: Be it remembered that rules of procedure are but mere tools designed to facilitate the attainment of justice. Their strict and rigid application, which would result in technicalities that tend to frustrate rather than promote substantial justice, must always be avoided. xxx Time and again, this Court has suspended its own rules and excepted a particular case from their operation whenever the higher interests of justice so require. We shall now proceed to determine whether the provisions of Rep. Act No. 8294 amending P.D. No. 1866 can be retroactively applied to this case. Here, the two (2) crimes for which petitioner was convicted by the trial court, i.e., (1) illegal possession of firearms under P.D. No. 1866 and (2) violation of COMELEC Resolution No. 2826 on gun ban, were both committed by the petitioner on April 27, 1996. For the crime of illegal possession of firearms in Crim. Case No. 96-149820, he was sentenced to suffer a prison term ranging from ten (10) years and one (1) day of prision mayor, as minimum, to (18) eighteen years, eight (8) months and one (1) day of reclusion temporal, as maximum, in accordance with P.D. No. 1866, Section 1 of which reads: SECTION 1. Unlawful Manufacture, Sale, Acquisition, Disposition or Possession of Firearms or Ammunition or Instruments Used or Intended to be Used in the Manufacture of Firearms of Ammunition. The penalty of reclusion temporal in its maximum period to reclusion perpetua shall be imposed upon any person who shall unlawfully manufacture, deal in, acquire, dispose, or possess any firearm, part of firearm, ammunition or machinery, tool or instrument used or intended to be used in the manufacture of any firearm or ammunition. (Emphasis supplied) When Rep. Act No. 8294 took effect on July 6, 1997,[16] the penalty for illegal possession of firearms was lowered, depending on the class of firearm possessed, viz: SECTION 1. follows: Section 1 of Presidential Decree No. 1866, as amended, is hereby further amended to read as

SECTION 1. Unlawful Manufacture, Sale, Acquisition, Disposition or Possession of Firearms or Ammunition or Instruments Used or Intended to be Used in the Manufacture of Firearms or Ammunition. The penalty of prision correccional in its maximum period and a fine of not less than Fifteen thousand pesos (P15,000) shall be imposed upon any person who shall unlawfully manufacture, deal in, acquire, dispose, or possess any low powered firearm, such as rimfire handgun, .380 or .32 and other firearm of similar firepower, part of firearm, ammunition, or machinery, tool or instrument used or intended to be used in the manufacture of any firearm or ammunition: Provided, That no other crime was committed.

The penalty of prision mayor in its minimum period and a fine of Thirty thousand pesos (P30,000) shall be imposed if the firearm is classified as high powered firearm which includes those with bores bigger in diameter than .38 caliber and 9 millimeter such as caliber .40, .41, .44, .45 and also lesser calibered firearms but considered powerful such as caliber .357 and caliber .22 center-fire magnum and other firearms with firing capability of full automatic and by burst of two or three: Provided, however, That no other crime was committed by the person arrested. (Emphasis supplied) Based on the foregoing, petitioner contends that the reduced penalty under Rep. Act No. 8294 should be the one imposed on him. Significantly, in its Manifestation In Lieu of Comment,[17] the Office of the Solicitor General agrees with the petitioner, positing further that the statement made by this Court in People vs. Jayson[18] to the effect that the provisions for a lighter penalty under Rep. Act No. 8294 does not apply if another crime has been committed, should not be applied to this case because the proviso in Section 1 of said law that no other crime was committed must refer only to those crimes committed with the use of an unlicensed firearm and not when the other crime is not related to the use thereof or where the law violated merely criminalizes the possession of the same, like in the case of election gun ban, as here. As early as August 1997, the month after Rep. Act No. 8294 took effect,[19] this Court has pronounced in Gonzales vs. Court of Appeals[20] that said law must be given retroactive effect in favor of those accused under P.D. No. 1866. Since then, this Court had consistently adhered to the Gonzales ruling.[21] For sure, in People vs. Valdez,[22] where the accused was charged with the complex crime of multiple murder with double frustrated murder and illegal possession of firearms and ammunitions under two separate informations, this Court even took a bolder stance by applying Rep. Act No. 8294 retroactively so that the accused therein may not be convicted of the separate crime of illegal possession of firearms, but refused to apply the same retroactively so as to aggravate the crime of murder. The Valdez ruling had been applied in a host of subsequent cases.[23] Yet, in other cases,[24] although the Court had given Rep. Act No. 8294 retroactive effect so as to prevent the conviction of an accused of the separate crime of illegal possession of firearm when the said unlicensed firearm was used to commit the crime of murder or homicide, the Court did not appreciate this use of such unlicensed firearm as an aggravating circumstance as provided therein, when the use of an unlicensed firearm was not specifically alleged in the information, as required by the Rules on Criminal Procedure. In the light of the existing rulings and jurisprudence on the matter, the present case takes center stage presenting, this time, another twist, so to speak. Petitioner, who was charged of illegal possession of firearms was also charged of another offense: Violation of COMELEC Resolution No. 2826 (Gun Ban), but the unlicensed firearm was not used or discharged in this case. The question then which appears to be of first impression, is whether or not the unlicensed firearm should be actually used and discharged in the course of committing the other crime in order that Sec. 1, Rep. Act No. 8294 will apply so that no separate crime of illegal possession of firearms may be charged. Let us take a look at the jurisprudence once again. In Cupcupin vs. People,[25] the accused was charged and convicted for two (2) separate crimes of illegal possession of firearms, and illegal possession of prohibited drugs. In the more recent case of People vs. Almeida,[26] however, although the accused was acquitted of the separate charge of illegal possession of firearm for lack of evidence, the Court nevertheless made the following clear pronouncement: Furthermore, in any event, the Court has ruled in previous cases that in view of the enactment of Republic Act No. 8294, there can be no separate offense of illegal possession of firearms and ammunition if there is another crime committed such as, in this case, that of illegal possession of dangerous drugs. (Emphasis supplied)

In Almeida, it should be noted that the unlicensed firearm was merely found lying around, together with the prohibited drugs, and therefore, was not being used in the commission of an offense. Given this Courts aforequoted pronouncement in Almeida, can the accused in the present case still be separately convicted of two (2) offenses of illegal possession of firearms and violation of gun ban, more so because as in Almeida, the unlicensed firearm was not actually used or discharged in committing the other offense? In People vs. Walpan M. Ladjaalam,[27] this Court, interpreting the subject proviso in Section 1 of Rep. Act No. 8294, applied the basic principles in criminal law, and categorically held: xxx A simple reading thereof shows that if an unlicensed firearm is used in the commission of any crime, there can be no separate offense of simple illegal possession of firearms. Hence, if the other crime is murder or homicide, illegal possession of firearms becomes merely an aggravating circumstance, not a separate offense. Since direct assault with multiple attempted homicide was committed in this case, appellant can no longer be held liable for illegal possession of firearms. Moreover, penal laws are construed liberally in favor of the accused. In this case, the plain meaning of RA 8294s simple language is most favorable to herein appellant. Verily, no other interpretation is justified, for the language of the new law demonstrates the legislative intent to favor the accused. Accordingly, appellant cannot be convicted of two separate offenses of illegal possession of firearms and direct assault with attempted homicide. xxx xxx xxx xxx

xxx The law is clear: the accused can be convicted of simple illegal possession of firearms, provided that no other crime was committed by the person arrested. If the intention of the law in the second paragraph were to refer only to homicide and murder, it should have expressly said so, as it did in the third paragraph. Verily, where the law does not distinguish, neither should we.(Emphasis supplied). The aforementioned ruling was reiterated and applied in the subsequent cases of People vs. Garcia,[28] where the judgment of conviction of the accused-appellants for illegal possession of firearms was set aside there being another crime kidnapping for ransom which they were perpetrating at the same time; People vs. Bernal,[29] where the Court retroactively applied Rep. Act No. 8294 in accused-appellants favor because it would mean his acquittal from the separate offense of illegal possession of firearms; and People vs. Bustamante,[30] where, in refusing to convict the accused-appellant of the separate offense of illegal possession of firearms, the Court declared that insofar as it is favorable to the appellant, the provisions of Rep. Act No. 8294 should be applied liberally and retroactively in that appellant must be acquitted of the charge of illegal possession of firearms. Guided by the foregoing, the Court cannot but set aside petitioners conviction in Criminal Case No. 96-149820 for illegal possession of firearm since another crime was committed at the same time, i.e., violation of COMELEC Resolution No. 2826 or the Gun Ban. Admittedly, this ruling is not without misgivings considering that it would mean petitioners acquittal of the more serious offense of illegal possession of firearms which carries a much heavier penalty than violation of the COMELEC gun-ban resolution. However, as we have rationalized in Ladjaalam:[31] xxx Indeed, the accused may evade conviction for illegal possession of firearms by using such weapons in committing an even lighter offense, like alarm and scandal or slight physical injuries, both of which are punishable by arresto menor. This consequence, however, necessarily arises from the language of RA 8294, whose wisdom is not subject to the Courts review. Any perception that the result reached here appears unwise

should be addressed to Congress. Indeed, the Court has no discretion to give statutes a new meaning detached from the manifest intendment and language of the legislature. Our task is constitutionally confined only to applying the law and jurisprudence to the proven facts, and we have done so in this case. The solemn power and duty of the Court to interpret and apply the law does not include the power to correct by reading into the law what is not written therein. While we understand respondent Peoples contention that the use of the firearm seemed to have been the main consideration during the deliberations of the subject provision of Rep. Act No. 8294, the fact remains that the word use never found its way into the final version of the bill which eventually became Rep. Act No. 8294. The Courts hands are now tied and it cannot supply the perceived deficiency in the final version without contravening the most basic principles in the interpretation of penal laws which had always leaned in favor of the accused. Under our system of government where powers are allocated to the three (3) great branches, only the Legislature can remedy such deficiency, if any, by proper amendment of Sec. 1 of Rep. Act No. 8294. As written, Sec. 1, Rep. Act No. 8294 restrains the Court from convicting petitioner of the separate crime of illegal possession of firearm despite the fact that, as in Almeida, the unlicensed firearm was not actually used. For sure, there is, in this case, closer relation between possession of unlicensed firearm and violation of the COMELEC gun-ban than the illegal possession of unlicensed firearm to the crime of illegal possession of prohibited drugs in Almeida. WHEREFORE, Criminal Case No. 96-149820 for illegal possession of firearms is hereby DISMISSED while the judgment of conviction in Criminal Case No. 96-149821 for violation of COMELEC Resolution No. 2826 in relation to Rep. Act No. 7166 (Gun Ban), is AFFIRMED. Since petitioner has already served more than the penalty imposed upon him by the trial court in Criminal Case No. 96-149821, his immediate release from custody is hereby ORDERED unless detained for some other lawful cause. SO ORDERED.

FIRST DIVISIO
AURORA B. GO, Petitioner,

G.R. No. 168240 Present:

- versus -

ELMER SUNBANUN, GEORGIE S. TAN, DORIS SUNBANUN and RICHARD SUNBANUN,

CORONA, C.J., Chairperson, VELASCO, JR., LEONARDO-DE CASTRO, DEL CASTILLO, and PEREZ, JJ. Promulgated:

Respondents.

February 9, 2011

x-------------------------------------------------------------------x

DECISION
DEL CASTILLO, J.:
When a procedural rule is amended for the benefit of litigants for the furtherance of the administration of justice, it shall be retroactively applied to likewise favor actions then pending, as equity delights in equality For non-compliance with the formal requirements of a petition, the Court of Appeals (CA) dismissed the certiorari petition filed by herein petitioner Aurora Go (Aurora), prompting her to file before us this petition for review on certiorari. Aurora now calls for liberality in the application of the procedural rules in the hope that she would eventually be given a chance to be heard by the CA after the trial court denied her prayer for an extension of time to file a notice of appeal. Factual Antecedents In November 2000, respondents filed a suit for damages against Aurora, her husband Yiu Wai Sang (Sang), and Yiu-Go Employment Agency (hereinafter collectively referred to as defendants), docketed as Civil Case No. CEB-25778, before the Regional Trial Court (RTC) of Cebu, Branch 58.ii[1] The respondents claimed that the spouses occupied the ground floor portion of their house in 68-F General Junquera Street, Cebu City under a one-year lease contract and had used the premises as the business office of Yiu-Go Employment Agency. This allegedly increased the risk of loss by fire, and thus a breach of warranty in the fire insurance policies that the respondents made which described the property as residential type.ii[2] Only Aurora filed her Answer with Affirmative Defenses and Counter-Claim.ii[3] In her answer, Aurora averred that they already left the premises sometime in 2001and that during the entirety of their stay, they used the leased floor as a private residence and as a lodging house. She denied that their employment agency held office there. She also pointed out that the lease contract was terminated when the one-year term expired in July 1996, and that she was not privy to the contracts of insurance since she was not informed of the contracts existence. To her, whether the house was used as a business office or as a lodging house was immaterial as there was no increased risk of fire either way. Aurora demanded actual damages as she claimed that she works in Hong Kong on a no-work-no-pay basis and the suit would result in spending airfare and lost earnings.

After the respondents concluded their presentation of evidence, Aurora moved on October 28, 2002 that her testimony be taken by deposition upon written interrogatories, as she was unsure as to when she could come home to the Philippines considering that her work schedule as a court interpreter in Hong Kong is erratic. She averred that arrangements have already been made with the Philippine consulate in Hong Kong to take her deposition.ii[4] Over the objection of the respondents, the RTC granted Auroras motion on November 21, 2002.ii[5] However, Auroras deposition was taken only on January 28, 2004ii[6] after her follow-up letter dated November 7, 2003 to the Philippine consulate.ii[7] Before this deposition was taken, the RTC in its December 1, 2003 Orderii[8] already deemed the defendants to have waived their right to present their evidence and considered the case submitted for resolution since more than a year had elapsed from the date the RTC granted Auroras motion to have her testimony be taken by deposition. Again, only Aurora moved for reconsiderationii[9] and prayed that the December 1, 2003 Order be recalled and instead admit the deposition. She attributed the delay of her deposition-taking to the consulates fault, as she was passed from one officer to another or no officer was available. On January 26, 2004, the RTC rendered judgmentii[10] finding only Aurora liable and ordering her to pay moral damages, attorneys fees, litigation expenses and costs.ii[11] The trial court disregarded her two-page transcript of deposition when it received the same on March 5, 2004.ii[12] Auroras former counsel of record, Atty. Jude Henritz R. Ycong (Atty. Ycong), belatedly discovered about this adverse judgment when he received from respondents counsel a Motion to Direct Issuance of Entry of Judgment and Writ of Executionii[13] on March 16, 2004. It turned out that although he had already previously informed the court of his new office address, the court mistakenly sent the January 26, 2004 Decision to his former office address.ii[14] He raised this in his opposition to the motion filed by the respondents.ii[15] Finding this point meritorious, the court denied respondents motion, ruling that the judgment against Aurora has not yet attained finality as the 15-day period to appeal, counted from March 16, 2004, has not yet lapsed.ii[16] Aurora filed her Motion for Reconsiderationii[17] on March 31, 2004, the last day to file her appeal. The court in its April 27, 2004 Orderii[18] denied said motion. Atty. Ycong received the notice of denial on May 6, 2004, thus giving his client a day left to file her appeal. Explaining that Aurora has been busy campaigning for the local elections as she was running for the position of town

mayor in Calubian, Leyteii[19] and that he and his client have yet to discuss the pros and cons of appealing the case, Atty. Ycong sought for the relaxation of the procedural rules by filing an extension of 15 days to file Auroras notice of appeal.ii[20] Atty. Ycong thereafter filed the Notice of Appeal on May 11, 2004. Ruling of the Regional Trial Court In its May 12, 2004 Order, the RTC denied the notice of appeal, viz: While there are rulings of the Supreme Court declaring that the period to appeal is not extendible, there are also instances when it allowed appeals to be perfected despite their filing out of time. x x x In the instant case, the delay is due to defendant-Gos running for an elective post. Such is no excuse. In other words, contrary to the belief of this court that Aurora Go had been and is out of the country, she in fact is in the Philippines. Consequently, she could have the time to confer with her counsels in order to prepare for her appeal. Accordingly, the Motion for Extension of Time to File Notice of Appeal is DENIED for lack of merit and the Notice of Appeal is hereby declared filed out of time. SO ORDERED.ii[21] Aurora sought for reconsideration but it was denied by the RTC on June 10, 2004.ii[22] Ruling of the Court of Appeals Filing her petition for certiorari with the CA by way of registered mail on August 13, 2004,ii[23] Aurora claimed that the RTC gravely abused its discretion in refusing to relax the period for filing the notice of appeal. She contended that her situation is enough reason to grant her prayer. She averred that she could not just leave the campaign trail just to discuss matters with her lawyer about her case as she was busy in Leyte at the homestretch of the campaign period. However, the CA on December 8, 2004, dismissed the petition (docketed as CA-G.R. SP No. 85897) for being procedurally flawed, viz: 1) The Verification/Certification of Non-Forum Shopping is signed by only one petitioner without a Special Power of Attorney/Secretarys Certificate authorizing her to represent the two (2) other petitioners;

2) The Affidavit of Service shows that respondents were personally served copies of the petition but lacks explanation why service of the petition with this Court was not done personally (Section 11, Rule 13 of the Revised Rules of Court); 3) Counsel for petitioners failed to indicate his PTR and IBP numbers; 4) Certified true [sic] copies of the assailed decision dated January 26, 2004 attached to the petition is a mere photocopy of a certified true copy; 5) The following copies of pleadings and other relevant documents referred to in the petition which would support the allegations therein are not attached: a) Complaint; and, b) Answer.ii[24] Invoking the liberal construction of procedural rules, petitioner Aurora asked for reconsiderationii[25] with the following justifications: 1) A certification/verification of one of a number of principal parties is sufficient compliance. Although her

certiorari petition named her, her spouse, and Yiu-Go Employment Agency, as petitioners, her co-defendants were not held liable in the lower court. It is only she who is interested in filing the certiorari petition for her to be able to appeal, hence her lone signature. 2) Anent the lack of explanation of why personal service to the CA was not resorted to, Aurora averred that

it was redundant to explain why registered mail was used considering the distance between Cebu, where she is based, and the CA in Manila. 3) The professional tax receipt (PTR) and Integrated Bar of the Philippines (IBP) receipt numbers were

inadvertently overlooked. However, the defect was cured when Atty. Ycong included the numbers when he subsequently filed on October 14, 2004 his Notice of Change of Addressii[26] with the CA. 4) Questioned in the certiorari are the May 12 and June 10, 2004 Orders that denied Auroras prayer for an

extension of time to file her notice of appeal. Requiring her to additionally append to the CA petition the certified true copies of the January 26, 2004 RTC Decision (i.e., the decision on the merits of the case), the complaint, and the answer was not necessary as these documents are not relevant and material to the issue to be resolved. Finding Auroras reasoning unacceptable, the CA insisted on a strict observance of the rules in its April 8, 2005 Resolution:

As to the first ground, petitioners merely disagree with the deficiency which occasioned the outright dismissal of their petition without even curing the said defect. Suffice it to say here that the petition itself contains more than one petitioner. No less than the Supreme Court pronounced in Loquias vs. Office of the Ombudsman that where there are two or more plaintiffs or petitioners, a complaint or petition signed by only [sic] of the parties is defective unless he/she is authorized by his co-parties. x x x xxxx The reason why petitioners petition was dismissed based on the second defect was because the said petition lacks explanation why service of the petition with this Court was not done personally, not much for having filed the same by registered mail. In other words, the dismissal was not due to the fact that the petition was filed by registered mail, but because of the failure to explain why the personal service was not resorted to. Then again, petitioners did not even bother to cure such defect. Anent the third ground, counsel for petitioners posits that his failure to indicate in the petition for certiorari his PTR and IBP numbers was cured by his succeeding Notice of Change Address filed with this Court. However, a closer of [sic] examination of the same reveals that the same was only filed on October 14, 2004 or some two (2) months after the petition for certiorari was filed on August 13, 2004. If it was really the intention of counsel for petitioners to cure such defect, he could have done it immediately after filing the petition. Had it not been due to the filing of the notice of change of address, We doubt if petitioners would have cured such defect. Considering the foregoing, We deem it unnecessary to discuss the other grounds raised by petitioners. x x x xii[27]

The Parties Respective Arguments

Believing that her case should not have been dismissed for procedural defects, Aurora assails the December 8, 2004 and April 8, 2005 Resolutions of the CA, reiterating to this Court that she deserves to be accorded the chance to prove to the CA that the RTC had unfairly denied her motion for extension of time to file her notice of appeal. On the other hand, respondents defend the stance of the CA, insisting that perfection of an appeal is jurisdictional and mandatory; and that the circumstances do not justify granting Aurora leniency in the application of the procedural

rules. Moreover, ever since she filed her motion for reconsideration on the RTCs January 26, 2004 Decision, she had in the interim sufficient time to think about the next legal action to take before the trial court issued its order of denial on April 27, 2004.

Issue

The sole question to resolve is whether the formal deficiencies in the petition before the CA may be relaxed in the interest of justice.

Our Ruling

The signatures/authorizations of Sang and Yiu-Go Employment Agency in the verification and certification on non-forum shopping are not necessary.

In filing a certiorari petition, one aggrieved by a courts judgment, order or resolution must verify his/her petition and must also attach a sworn certification of non-forum shopping.ii[28] In dismissing Auroras petition, the CA cited as one of its grounds the lack of signatures or authorizations of Sang and Yiu-Go Employment Agency in the verification and certification of non-forum shopping. Such signatures, however, may be dispensed with as these parties are not involved in the petition. Although the caption in Auroras petition before the CA erroneously included Sang and Yiu-Go Employment Agency as petitioners, its contents reveal that it is solely Aurora who is the person aggrieved, as she is the one who assailed before the CA the RTCs Order that denied her notice of appeal and, hence, she should be the one who should sign the petition. Notably, Aurora is the only one held liable by the trial court for damages and thus is the one interested in filing an appeal and in elevating the case to the CA. Moreover, only Aurora filed her answer before the RTC while Sang and Yiu-Go Employment Agency did not file any.

Non-submission of certified true copy of the January 26, 2004 Decision and copies of the Complaint and Answer not fatal.

Another ground cited by the CA was the non-submission of the certified true copy of the January 26, 2004 Decision as well as the failure to attach copies of the complaint and answer in Auroras petition.

The second paragraph of Section 1 of Rule 65 requires the submission of a certified true copy of the judgment, order or resolution subject of the petition as well as the submission of copies of all pleadings and documents relevant to the petition. The initial determination of what pleadings, documents or order are relevant and pertinent to the petition rests on the petitioner. [Should the CA opine that additional documents must be submitted together with the petition, it may] (a) dismiss the petition under the last paragraph of [Section 3,] Rule 46 of the Rules of Court; (b) order the petitioner to submit the required additional pleadings, documents, or order within a specific period of time; or (c) order the petitioner to file an amended petition appending thereto the required pleadings, documents or order within a fixed period.ii[29] We emphasize that not all pleadings and parts of case records are required to be attached, but only those which are material and pertinent that they may provide the basis for a determination of a prima facie case for abuse of discretion.ii[30]

Thus, we agree with the petitioner that the CA required pleadings immaterial to the issue presented before it. The questioned subject of certiorari does not touch upon the substantive merits of the suit for damages against Aurora but actually involves the refusal of the trial court to entertain her notice of appeal due to late filing. The complaint and answer are not indispensable at all in the resolution of this issue, the contents of which are already summarized in the January 26, 2004 Decision attached to the petition. Furthermore, since Auroras petition assails the May 12 and June 10, 2004 Orders of the RTC, it is the certified true copies of these orders that are required to be attached to the petition. On the other hand, photocopy of the January 26, 2004 Decision will suffice, as this document is material and pertinent to the petition.

Failure to indicate PTR and IBP Official Receipt Numbers not fatal.

The failure of petitioners former counsel, Atty. Ycong, to indicate in the petition before the CA his PTR and IBP numbers for the year 2004 was obviously an oversight. A perusal of the records of the case would show that counsel had duly paid the required dues for that year and that his PTR and IBP receipt numbers are indicated in the pleadings he had filed with the RTC.ii[31] Although he omitted to indicate the numbers on Auroras CA petition, the same numbers were nevertheless stated on his Notice of Change of Address, around two months before the appellate court issued the questioned December 8, 2004 Resolution.

Rules on perfecting appeals must be strictly complied with; liberal application available only under exceptional circumstances.

Whenever practicable, personal service and personal filing of pleadings are always the preferred modes of service. Under Section 11, Rule 13 of the Rules of Court, should one deviate from the general rule, it is mandatory for him/her to submit a written explanation why the pleading was not personally filed/served. Otherwise, the court has the discretion to consider the paper as not filed. Petitioner should be aware that a court, in reasonably exercising discretionary power to dismiss a petition that violated the rule on written explanation for resorting to modes other than personal service, also has to take into account another factor, i.e., the prima facie merit of the pleading sought to be expunged for violation of Section 11.ii[32] For this reason, we do not find any grave abuse on the part of the CA in exercising its discretion to dismiss Auroras petition.

Indeed, judicial notice may be taken that personal service is impracticable considering the distance between Cebu and Manila, and that Musa v. Amorii[33] supports Auroras argument that a written explanation why service was not done personally might have been superfluous considering the evident distance between the appellate court and the place where the petition was posted. It must be emphasized, however, that provisions with respect to the rules on the manner and periods for perfecting appeals are strictly applied and are only relaxed in very exceptional circumstances on equitable considerations.ii[34] In the case at bar, the reason behind the filing of an extension of time to file her notice of appeal was not per se, a compelling and a highly exceptional one. Just as it is the lawyers duty to safeguard her clients interest, it is the responsibility of the client to make herself available to her counsel and open the lines of communication, even during the busy election period, for their discussions of legal options. She is obliged to be vigilant in fighting for her cause and in

protecting her rights. It is Aurora's duty, as a client, to be in touch with [her] counsel so as to be constantly posted about the case. [She] is mandated to inquire from [her] counsel about the status and progress of the case from time to time and cannot expect that all [she] has to do is sit back, relax and await the outcome of the case.ii[35] Additionally, motions for extension are not granted as a matter of right but in the sound discretion of the court, and lawyers should never presume that their motions for extension or postponement will be granted or that they will be granted the length of time they pray for.ii[36]

In spite of petitioners error, the fresh period rule amendment as held in Neypes v. Court of Appeals will be applied to her benefit

Aurora had almost lost her statutory privilege to appeal, but in view of our ruling on Neypes v. Court of Appeals,ii[37] we shall grant Auroras petition.

In Neypes we held that a litigant is given another fresh period of 15 days to perfect an appeal after receipt of the order of denial of his/her motion for reconsideration/new trial before the RTC. We said:

To standardize the appeal periods provided in the Rules and to afford litigants fair opportunity to appeal their cases, the Court deems it practical to allow a fresh period of 15 days within which to file the notice of appeal in the Regional Trial Court, counted from receipt of the order dismissing a motion for a new trial or motion for reconsideration.

Henceforth, this "fresh period rule" shall also apply to Rule 40 governing appeals from the Municipal Trial Courts to the Regional Trial Courts; Rule 42 on petitions for review from the Regional Trial Courts to the Court of Appeals; Rule 43 on appeals from quasi-judicial agencies to the Court of Appeals and Rule 45 governing appeals by certiorari to the Supreme Court. The new rule aims to regiment or make the appeal period uniform, to be counted from receipt of the order denying the motion for new trial, motion for reconsideration (whether full or partial) or any final order or resolution.ii[38] (Emphasis supplied.)

[P]rocedural laws may be given retroactive effect to actions pending and undetermined at the time of their passage, there being no vested rights in the rules of procedure.ii[39] Neypes, which we rendered in September 2005, has been applied retroactively to a number of casesii[40] wherein the original period to appeal had already lapsed subsequent to the denial of the motion for reconsideration. Auroras situation is no exception, and thus she is entitled to benefit from the amendment of the procedural rules.

The denial of Auroras Motion for Reconsideration of the trial courts January 26, 2004 decision was received by her former counsel on May 6, 2004. Sans her motion for extension to file a notice of appeal, with the fresh period rule under Neypes, she still has until May 21, 2004 to file her notice of appeal and thus, had timely filed her notice of appeal on May 11, 2004.

WHEREFORE, the petition is GRANTED. The challenged Resolutions of the Court of Appeals in CA-G.R. SP No. 85897 dated December 8, 2004 and April 8, 2005 are REVERSED and SET ASIDE; the Orders of the Regional Trial Court of Cebu, Branch 58, dated May 12 and June 10, 2004 that denied Aurora Gos notice of appeal are likewise REVERSED and SET ASIDE. The Regional Trial Court of Cebu, Branch 58 is hereby DIRECTED to give due course to petitioners Notice of Appeal dated May 11, 2004. SO ORDERED.

HIRD DIVISION

HEIRS OF EDUARDO SIMON, Petitioners,

G.R. No. 157547

Present:

BRION, Acting Chairperson,** BERSAMIN, -versus ABAD,*** VILLARAMA, JR., and SERENO, JJ.

Promulgated: ELVIN* CHAN AND THE COURT OF APPEALS, Respondent. February 23, 2011

x-----------------------------------------------------------------------------------------x

DECISION

BERSAMIN, J.:

There is no independent civil action to recover the civil liability arising from the issuance of an unfunded check prohibited and punished under Batas Pambansa Bilang 22 (BP 22).

Antecedents

On July 11, 1997, the Office of the City Prosecutor of Manila filed in the Metropolitan Trial Court of Manila (MeTC) an information charging the late Eduardo Simon (Simon) with a violation of BP 22, docketed as Criminal Case No. 275381 entitled People v. Eduardo Simon. The accusatory portion reads:

That sometime in December 1996 in the City of Manila, Philippines, the said accused, did then and there willfully, unlawfully and feloniously make or draw and issue to Elvin Chan to apply on account or for value Landbank Check No. 0007280 dated December 26, 1996 payable to cash in the amount of P336,000.00 said accused well knowing that at the time of issue she/he/they did not have sufficient funds in or credit with the drawee bank for payment of such check in full upon its presentment, which check when presented for payment within ninety (90) days from the date thereof was subsequently dishonored by the drawee bank for Account Closed and despite receipt of notice of such dishonor, said accused failed to pay said Elvin Chan the amount of the check or to make arrangement for full payment of the same within five (5) banking days after receiving said notice. CONTRARY TO LAW. ii[1]

More than three years later, or on August 3, 2000, respondent Elvin Chan commenced in the MeTC in Pasay City a civil action for the collection of the principal amount of P336,000.00, coupled with an application for a writ of preliminary attachment (docketed as Civil Case No. 915-00).ii[2] He alleged in his complaint the following:

xxx 2. Sometime in December 1996 defendant employing fraud, deceit, and misrepresentation encashed a check dated December 26, 1996 in the amount of P336,000.00 to the plaintiff assuring the latter that the check is duly funded and that he had an existing account with the Land Bank of the Philippines, xerox copy of the said check is hereto attached as Annex A; 3. However, when said check was presented for payment the same was dishonored on the ground that the account of the defendant with the Land Bank of the Philippines has been closed

contrary to his representation that he has an existing account with the said bank and that the said check was duly funded and will be honored when presented for payment; 4. Demands had been made to the defendant for him to make good the payment of the value of the check, xerox copy of the letter of demand is hereto attached as Annex B, but despite such demand defendant refused and continues to refuse to comply with plaintiffs valid demand; 5. Due to the unlawful failure of the defendant to comply with the plaintiffs valid demands, plaintiff has been compelled to retain the services of counsel for which he agreed to pay as reasonable attorneys fees the amount of P50,000.00 plus additional amount of P2,000.00 per appearance. ALLEGATION IN SUPPORT OF PRAYER FOR PRELIMINARY ATTACHMENT 6. The defendant as previously alleged has been guilty of fraud in contracting the obligation upon which this action is brought and that there is no sufficient security for the claims sought in this action which fraud consist in the misrepresentation by the defendant that he has an existing account and sufficient funds to cover the check when in fact his account was already closed at the time he issued a check; 7. That the plaintiff has a sufficient cause of action and this action is one which falls under Section 1, sub-paragraph (d), Rule 57 of the Revised Rules of Court of the Philippines and the amount due the plaintiff is as much as the sum for which the plaintiff seeks the writ of preliminary attachment; 8. That the plaintiff is willing and able to post a bond conditioned upon the payment of damages should it be finally found out that the plaintiff is not entitled to the issuance of a writ of preliminary attachment.ii[3]

On August 9, 2000, the MeTC in Pasay City issued a writ of preliminary attachment, which was implemented on August 17, 2000 through the sheriff attaching a Nissan vehicle of Simon.ii[4]

On August 17, 2000, Simon filed an urgent motion to dismiss with application to charge plaintiffs attachment bond for damages,ii[5] pertinently averring:

xxx

On the ground of litis pendentia, that is, as a consequence of the pendency of another action between the instant parties for the same cause before the Metropolitan Trial Court of Manila, Branch X (10) entitled People of the Philippines vs. Eduardo Simon, docketed thereat as Criminal Case No. 275381-CR, the instant action is dismissable under Section 1, (e), Rule 16, 1997 Rules of Civil Procedure, xxx xxx While the instant case is civil in nature and character as contradistinguished from the said Criminal Case No. 915-00 in the Metropolitan Trial Court of Manila, Branch X (10), the basis of the instant civil action is the herein plaintiffs criminal complaint against defendant arising from a charge of violation of Batas Pambansa Blg. 22 as a consequence of the alleged dishonor in plaintiffs hands upon presentment for payment with drawee bank a Land Bank Check No. 0007280 dated December 26, 1996 in the amount of P336,000- drawn allegedly issued to plaintiff by defendant who is the accused in said case, a photocopy of the Criminal information filed by the Assistant City Prosecutor of Manila on June 11, 1997 hereto attached and made integral part hereof as Annex 1. It is our understanding of the law and the rules, that, when a criminal action is instituted, the civil action for recovery of civil liability arising from the offense charged is impliedly instituted with the criminal action, unless the offended party expressly waives the civil action or reserves his right to institute it separately xxx.

On August 29, 2000, Chan opposed Simons urgent motion to dismiss with application to charge plaintiffs attachment bond for damages, stating:

1. The sole ground upon which defendant seeks to dismiss plaintiffs complaint is the alleged pendency of another action between the same parties for the same cause, contending among others that the pendency of Criminal Case No. 275381-CR entitled People of the Philippines vs. Eduardo Simon renders this case dismissable; 2. The defendant further contends that under Section 1, Rule 111 of the Revised Rules of Court, the filing of the criminal action, the civil action for recovery of civil liability arising from the offense charged is impliedly instituted with the criminal action which the plaintiff does not contest; however, it is the submission of the plaintiff that an implied reservation of the right to file a civil action has already been made, first, by the fact that the information for violation of B.P. 22 in Criminal Case No. 2753841 does not at all make any allegation of damages suffered by the plaintiff nor is there any claim for recovery of damages; on top of this the plaintiff as private complainant in the criminal case, during the presentation of the prosecution evidence was not represented at all by a private prosecutor such that no evidence has been adduced by the prosecution on the criminal case to prove damages; all of these we respectfully submit demonstrate an effective implied reservation of the right of the plaintiff to file a separate civil action for damages; 3. The defendant relies on Section 3 sub-paragraph (a) Rule 111 of the Revised Rules of Court which mandates that after a criminal action has been commenced the civil action cannot be

instituted until final judgment has been rendered in the criminal action; however, the defendant overlooks and conveniently failed to consider that under Section 2, Rule 111 which provides as follows: In the cases provided for in Articles 31, 32, 33, 34 and 2177 of the Civil Code of the Philippines, an independent civil action entirely separate and distinct from the criminal action, may be brought by the injured party during the pendency of criminal case provided the right is reserved as required in the preceding section. Such civil action shall proceed independently of the criminal prosecution, and shall require only a preponderance of evidence. In as much as the case is one that falls under Art. 33 of the Civil Code of the Philippines as it is based on fraud, this action therefore may be prosecuted independently of the criminal action; 4. In fact we would even venture to state that even without any reservation at all of the right to file a separate civil action still the plaintiff is authorized to file this instant case because the plaintiff seeks to enforce an obligation which the defendant owes to the plaintiff by virtue of the negotiable instruments law. The plaintiff in this case sued the defendant to enforce his liability as drawer in favor of the plaintiff as payee of the check. Assuming the allegation of the defendant of the alleged circumstances relative to the issuance of the check, still when he delivered the check payable to bearer to that certain Pedro Domingo, as it was payable to cash, the same may be negotiated by delivery by who ever was the bearer of the check and such negotiation was valid and effective against the drawer; 5. Indeed, assuming as true the allegations of the defendant regarding the circumstances relative to the issuance of the check it would be entirely impossible for the plaintiff to have been aware that such check was intended only for a definite person and was not negotiable considering that the said check was payable to bearer and was not even crossed; 6. We contend that what cannot be prosecuted separate and apart from the criminal case without a reservation is a civil action arising from the criminal offense charged. However, in this instant case since the liability of the defendant are imposed and the rights of the plaintiff are created by the negotiable instruments law, even without any reservation at all this instant action may still be prosecuted; 7. Having this shown, the merits of plaintiffs complaint the application for damages against the bond is totally without any legal support and perforce should be dismissed outright.ii[6]

On October 23, 2000, the MeTC in Pasay City granted Simons urgent motion to dismiss with application to charge plaintiffs attachment bond for damages ,ii[7] dismissing the complaint of Chan because:

xxx After study of the arguments of the parties, the court resolves to GRANT the Motion to Dismiss and the application to charge plaintiffs bond for damages. For litis pendentia to be a ground for the dismissal of an action, the following requisites must concur: (a) identity of parties or at least such as to represent the same interest in both actions; (b) identity of rights asserted and relief prayed for, the relief being founded on the same acts; and (c) the identity in the two (2) cases should be such that the judgment, which may be rendered in one would, regardless of which party is successful, amount to res judicata in the other. xxx A close perusal of the herein complaint denominated as Sum of Money and the criminal case for violation of BP Blg. 22 would readily show that the parties are not only identical but also the cause of action being asserted, which is the recovery of the value of Landbank Check No. 0007280 in the amount of P336,000.00. In both civil and criminal cases, the rights asserted and relief prayed for, the reliefs being founded on the same facts, are identical. Plaintiffs claim that there is an effective implied waiver of his right to pursue this civil case owing to the fact that there was no allegation of damages in BP Blg. 22 case and that there was no private prosecutor during the presentation of prosecution evidence is unmeritorious. It is basic that when a complaint or criminal Information is filed, even without any allegation of damages and the intention to prove and claim them, the offended party has the right to prove and claim for them, unless a waiver or reservation is made or unless in the meantime, the offended party has instituted a separate civil action. xxx The over-all import of the said provision conveys that the waiver which includes indemnity under the Revised Penal Code, and damages arising under Articles 32, 33, and 34 of the Civil Code must be both clear and express. And this must be logically so as the primordial objective of the Rule is to prevent the offended party from recovering damages twice for the same act or omission of the accused. Indeed, the evidence discloses that the plaintiff did not waive or made a reservation as to his right to pursue the civil branch of the criminal case for violation of BP Blg. 22 against the defendant herein. To the considered view of this court, the filing of the instant complaint for sum of money is indeed legally barred. The right to institute a separate civil action shall be made before the prosecution starts to present its evidence and under circumstances affording the offended party a reasonable opportunity to make such reservation. xxx Even assuming the correctness of the plaintiffs submission that the herein case for sum of money is one based on fraud and hence falling under Article 33 of the Civil Code, still prior reservation is required by the Rules, to wit: In the cases provided for in Articles 31, 32, 33, 34 and 2177 of the Civil Code of the Philippines, an independent civil action entirely separate and distinct from the criminal action, may be brought by the injured party during the pendency of criminal case provided the right is reserved as required in the preceding section. Such civil action shall proceed independently of the criminal prosecution, and shall require only a preponderance of evidence. xxx WHEREFORE, premises considered, the court resolves to:

1. Dismiss the instant complaint on the ground of litis pendentia; 2. Dissolve/Lift the Writ of Attachment issued by this court on August 14, 2000;

3. Charge the plaintiffs bond the amount of P336,000.00 in favor of the defendant for the damages sustained by the latter by virtue of the implementation of the writ of attachment;

4.

Direct the Branch Sheriff of this Court to RESTORE with utmost dispatch to the defendants physical possession the vehicle seized from him on August 16, 2000; and

5.

Direct the plaintiff to pay the defendant the sum of P5,000.00 by way of attorneys fees.

SO ORDERED.

Chans motion for reconsideration was denied on December 20, 2000,ii[8] viz:

Considering that the plaintiffs arguments appear to be a mere repetition of his previous submissions, and which submissions this court have already passed upon; and taking into account the inapplicability of the ratio decidendi in the Tactaquin vs. Palileo case which the plaintiff cited as clearly in that case, the plaintiff therein expressly made a reservation to file a separate civil action, the Motion for Reconsideration is DENIED for lack of merit. SO ORDERED.

On July 31, 2001, the Regional Trial Court (RTC) in Pasay City upheld the dismissal of Chans complaint, disposing:ii[9]

WHEREFORE, finding no error in the appealed decision, the same is hereby AFFIRMED in toto.

SO ORDERED.

On September 26, 2001, Chan appealed to the Court of Appeals (CA) by petition for review,ii[10] challenging the propriety of the dismissal of his complaint on the ground of litis pendentia.

In his comment, ii[11] Simon countered that Chan was guilty of bad faith and malice in prosecuting his alleged civil claim twice in a manner that caused him (Simon) utter embarrassment and emotional sufferings; and that the dismissal of the civil case because of the valid ground of litis pendentia based on Section 1 (e), Rule 16 of the 1997 Rules of Civil Procedure was warranted.

On June 25, 2002, the CA promulgated its assailed decision,ii[12] overturning the RTC, viz:

xxx As a general rule, an offense causes two (2) classes of injuries. The first is the social injury produced by the criminal act which is sought to be repaired through the imposition of the corresponding penalty, and the second is the personal injury caused to the victim of the crime which injury is sought to be compensated through indemnity which is also civil in nature. Thus, every person criminally liable for a felony is also civilly liable. The offended party may prove the civil liability of an accused arising from the commission of the offense in the criminal case since the civil action is either deemed instituted with the criminal action or is separately instituted. Rule 111, Section 1 of the Revised Rules of Criminal Procedure, which became effective on December 1, 2000, provides that: (a) When a criminal action is instituted, the civil action for the recovery of civil liability arising from the offense charged shall be deemed instituted with the

criminal action unless the offended party waives the civil action, reserves the right to institute it separately or institute the civil action prior to the criminal action. Rule 111, Section 2 further states: After the criminal action has been commenced, the separate civil action arising therefrom cannot be instituted until final judgment has been entered in the criminal action.

However, with respect to civil actions for recovery of civil liability under Articles 32, 33, 34 and 2176 of the Civil Code arising from the same act or omission, the rule has been changed. In DMPI Employees Credit Association vs. Velez, the Supreme Court pronounced that only the civil liability arising from the offense charged is deemed instituted with the criminal action unless the offended party waives the civil action, reserves his right to institute it separately, or institutes the civil action prior to the criminal action. Speaking through Justice Pardo, the Supreme Court held: There is no more need for a reservation of the right to file the independent civil action under Articles 32, 33, 34 and 2176 of the Civil Code of the Philippines. The reservation and waiver referred to refers only to the civil action for the recovery of the civil liability arising from the offense charged. This does not include recovery of civil liability under Articles 32, 33, 34, and 2176 of the Civil Code of the Philippines arising from the same act or omission which may be prosecuted separately without a reservation. Rule 111, Section 3 reads: Sec. 3. When civil action may proceed independently. In the cases provided in Articles 32, 33, 34, and 2176 of the Civil Code of the Philippines, the independent civil action may be brought by the offended party. It shall proceed independently of the criminal action and shall require only a preponderance of evidence. In no case, however, may the offended party recover damages twice for the same act or omission charged in the criminal action. The changes in the Revised Rules on Criminal Procedure pertaining to independent civil actions which became effective on December 1, 2000 are applicable to this case. Procedural laws may be given retroactive effect to actions pending and undetermined at the time of their passage. There are no vested rights in the rules of procedure. xxx Thus, Civil Case No. CV-94-124, an independent civil action for damages on account of the fraud committed against respondent Villegas under Article 33 of the Civil Code, may proceed independently even if there was no reservation as to its filing.

It must be pointed that the abovecited case is similar with the instant suit. The complaint was also brought on allegation of fraud under Article 33 of the Civil Code and committed by the respondent in the issuance of the check which later bounced. It was filed before the trial court, despite the pendency of the criminal case for violation of BP 22 against the respondent. While it may be true that the changes in the Revised Rules on Criminal Procedure pertaining to independent civil action became effective on December 1, 2000, the same may be given retroactive application and may be made to apply to the case at bench, since procedural rules may be given retroactive application. There are no vested rights in the rules of procedure.

In view of the ruling on the first assigned error, it is therefore an error to adjudge damages in favor of the petitioner. WHEREFORE, the petition is hereby GRANTED. The Decision dated July 13, 2001 rendered by the Regional Trial Court of Pasay City, Branch 108 affirming the dismissal of the complaint filed by petitioner is hereby REVERSED and SET ASIDE. The case is hereby REMANDED to the trial court for further proceedings. SO ORDERED.

On March 14, 2003, the CA denied Simons motion for reconsideration.ii[13]

Hence, this appeal, in which the petitioners submit that the CA erroneously premised its decision on the assessment that the civil case was an independent civil action under Articles 32, 33, 34, and 2176 of the Civil Code; that the CAs reliance on the ruling in DMPI Employees Credit Cooperative Inc. v. Velezii[14] stretched the meaning and intent of the ruling, and was contrary to Sections 1 and 2 of Rule 111 of the Rules of Criminal Procedure; that this case was a simple collection suit for a sum of money, precluding the application of Section 3 of Rule 111 of the Rules of Criminal Procedure.ii[15]

In his comment,ii[16] Chan counters that the petition for review should be denied because the petitioners used the wrong mode of appeal; that his cause of action, being based on fraud,

was an independent civil action; and that the appearance of a private prosecutor in the criminal case did not preclude the filing of his separate civil action.

Issue

The lone issue is whether or not Chans civil action to recover the amount of the unfunded check (Civil Case No. 915-00) was an independent civil action.

Ruling

The petition is meritorious.

A Applicable Law and Jurisprudence on the Propriety of filing a separate civil action based on BP 22

The Supreme Court has settled the issue of whether or not a violation of BP 22 can give rise to civil liability in Banal v. Judge Tadeo, Jr.,ii[17] holding:

xxx Article 20 of the New Civil Code provides: Every person who, contrary to law, wilfully or negligently causes damage to another, shall indemnify the latter for the same. Regardless, therefore, of whether or not a special law so provides, indemnification of the offended party may be had on account of the damage, loss or injury directly suffered as a consequence of the wrongful act of another. The indemnity which a person is sentenced to pay forms an integral part of the penalty imposed by law for the commission of a crime (Quemel v. Court of Appeals, 22 SCRA 44, citing Bagtas v. Director of Prisons, 84 Phil 692). Every crime gives rise to a penal or criminal action for the punishment of the guilty party, and also to civil action for the restitution of the thing, repair of the damage, and indemnification for the losses (United States v. Bernardo, 19 Phil 265). xxx Civil liability to the offended party cannot thus be denied. The payee of the check is entitled to receive the payment of money for which the worthless check was issued. Having been caused the damage, she is entitled to recompense. Surely, it could not have been the intendment of the framers of Batas Pambansa Blg. 22 to leave the offended private party defrauded and empty-handed by excluding the civil liability of the offender, giving her only the remedy, which in many cases results in a Pyrrhic victory, of having to file a separate civil suit. To do so may leave the offended party unable to recover even the face value of the check due her, thereby unjustly enriching the errant drawer at the expense of the payee. The protection which the law seeks to provide would, therefore, be brought to naught. xxx

However, there is no independent civil action to recover the value of a bouncing check issued in contravention of BP 22. This is clear from Rule 111 of the Rules of Court, effective December 1, 2000, which relevantly provides:

Section 1. Institution of criminal and civil actions. - (a) When a criminal action is instituted, the civil action for the recovery of civil liability arising from the offense charged shall be deemed instituted with the criminal action unless the offended party waives the civil action, reserves the right to institute it separately or institutes the civil action prior to the criminal action.

The reservation of the right to institute separately the civil action shall be made before the prosecution starts presenting its evidence and under circumstances affording the offended party a reasonable opportunity to make such reservation. When the offended party seeks to enforce civil liability against the accused by way of moral, nominal, temperate, or exemplary damages without specifying the amount thereof in the complaint or information, the filing fees therefor shall constitute a first lien on the judgment awarding such damages. Where the amount of damages, other than actual, is specified in the complaint or information, the corresponding filing fees shall be paid by the offended party upon the filing thereof in court. Except as otherwise provided in these Rules, no filing fees shall be required for actual damages. No counterclaim, cross-claim or third-party complaint may be filed by the accused in the criminal case, but any cause of action which could have been the subject thereof may be litigated in a separate civil action. (1a) (b) The criminal action for violation of Batas Pambansa Blg. 22 shall be deemed to include the corresponding civil action. No reservation to file such civil action separately shall be allowed.ii[18] Upon filing of the aforesaid joint criminal and civil actions, the offended party shall pay in full the filing fees based on the amount of the check involved, which shall be considered as the actual damages claimed. Where the complaint or information also seeks to recover liquidated, moral, nominal, temperate or exemplary damages, the offended party shall pay the filing fees based on the amounts alleged therein. If the amounts are not so alleged but any of these damages are subsequently awarded by the court, the filing fees based on the amount awarded shall constitute a first lien on the judgment. Where the civil action has been filed separately and trial thereof has not yet commenced, it may be consolidated with the criminal action upon application with the court trying the latter case. If the application is granted, the trial of both actions shall proceed in accordance with section 2 of the Rule governing consolidation of the civil and criminal actions. Section 3. When civil action may proceed independently. In the cases provided in Articles 32, 33, 34 and 2176 of the Civil Code of the Philippines, the independent civil action may be brought by the offended party. It shall proceed independently of the criminal action and shall require only a preponderance of evidence. In no case, however, may the offended party recover damages twice for the same act or omission charged in the criminal action.

The aforequoted provisions of the Rules of Court, even if not yet in effect when Chan commenced Civil Case No. 915-00 on August 3, 2000, are nonetheless applicable. It is axiomatic that the retroactive application of procedural laws does not violate any right of a

person who may feel adversely affected, nor is it constitutionally objectionable. The reason is simply that, as a general rule, no vested right may attach to, or arise from, procedural laws.ii[19] Any new rules may validly be made to apply to cases pending at the time of their promulgation, considering that no party to an action has a vested right in the rules of procedure, ii[20] except that in criminal cases, the changes do not retroactively apply if they permit or require a lesser quantum of evidence to convict than what is required at the time of the commission of the offenses, because such retroactivity would be unconstitutional for being ex post facto under the Constitution.ii[21] Moreover, the application of the rule would not be precluded by the violation of any assumed vested right, because the new rule was adopted from Supreme Court Circular 57-97 that took effect on November 1, 1997.

Supreme Court Circular 57-97 states:

Any provision of law or Rules of Court to the contrary notwithstanding, the following rules and guidelines shall henceforth be observed in the filing and prosecution of all criminal cases under Batas Pambansa Blg. 22 which penalizes the making or drawing and issuance of a check without funds or credit: 1. The criminal action for violation of Batas Pambansa Blg. 22 shall be deemed to necessarily include the corresponding civil action, and no reservation to file such civil action separately shall be allowed or recognized.ii[22] 2. Upon the filing of the aforesaid joint criminal and civil actions, the offended party shall pay in full the filing fees based upon the amount of the check involved which shall be considered as the actual damages claimed, in accordance with the schedule of fees in Section 7 (a) and Section 8 (a), Rule 141 of the Rules of Court as last amended by Administrative Circular No. 1194 effective August 1, 1994. Where the offended party further seeks to enforce against the accused civil liability by way of liquidated, moral, nominal, temperate or exemplary damages, he shall pay the corresponding filing fees therefor based on the amounts thereof as alleged either in the complaint or information. If not so alleged but any of these damages are subsequently awarded by the court, the amount of such fees shall constitute a first lien on the judgment. 3. Where the civil action has heretofore been filed separately and trial thereof has not yet commenced, it may be consolidated with the criminal action upon application with the court trying the latter case. If the application is granted, the trial of both actions shall proceed in

accordance with the pertinent procedure outlined in Section 2 (a) of Rule 111 governing the proceedings in the actions as thus consolidated. 4. This Circular shall be published in two (2) newspapers of general circulation and shall take effect on November 1, 1997.

The reasons for issuing Circular 57-97 were amply explained in Hyatt Industrial Manufacturing Corporation v. Asia Dynamic Electrix Corporation,ii[23] thus:

xxx We agree with the ruling of the Court of Appeals that upon filing of the criminal cases for violation of B.P. 22, the civil action for the recovery of the amount of the checks was also impliedly instituted under Section 1(b) of Rule 111 of the 2000 Rules on Criminal Procedure. Under the present revised Rules, the criminal action for violation of B.P. 22 shall be deemed to include the corresponding civil action. The reservation to file a separate civil action is no longer needed. The Rules provide: Section 1. Institution of criminal and civil actions. (a) xxx

(b) The criminal action for violation of Batas Pambansa Blg. 22 shall be deemed to include the corresponding civil action. No reservation to file such civil action separately shall be allowed. Upon filing of the aforesaid joint criminal and civil actions, the offended party shall pay in full the filing fees based on the amount of the check involved, which shall be considered as the actual damages claimed. Where the complaint or information also seeks to recover liquidated, moral, nominal, temperate or exemplary damages, the offended party shall pay additional filing fees based on the amounts alleged therein. If the amounts are not so alleged but any of these damages are subsequently awarded by the court, the filing fees based on the amount awarded shall constitute a first lien on the judgment. Where the civil action has been filed separately and trial thereof has not yet commenced, it may be consolidated with the criminal action upon application with the court trying the latter case. If the application is granted, the trial of both actions shall

proceed in accordance with section 2 of this Rule governing consolidation of the civil and criminal actions. The foregoing rule was adopted from Circular No. 57-97 of this Court. It specifically states that the criminal action for violation of B.P. 22 shall be deemed to include the corresponding civil action. It also requires the complainant to pay in full the filing fees based on the amount of the check involved. Generally, no filing fees are required for criminal cases, but because of the inclusion of the civil action in complaints for violation of B.P. 22, the Rules require the payment of docket fees upon the filing of the complaint. This rule was enacted to help declog court dockets which are filled with B.P. 22 cases as creditors actually use the courts as collectors. Because ordinarily no filing fee is charged in criminal cases for actual damages, the payee uses the intimidating effect of a criminal charge to collect his credit gratis and sometimes, upon being paid, the trial court is not even informed thereof. The inclusion of the civil action in the criminal case is expected to significantly lower the number of cases filed before the courts for collection based on dishonored checks. It is also expected to expedite the disposition of these cases. Instead of instituting two separate cases, one for criminal and another for civil, only a single suit shall be filed and tried. It should be stressed that the policy laid down by the Rules is to discourage the separate filing of the civil action. The Rules even prohibit the reservation of a separate civil action, which means that one can no longer file a separate civil case after the criminal complaint is filed in court. The only instance when separate proceedings are allowed is when the civil action is filed ahead of the criminal case. Even then, the Rules encourage the consolidation of the civil and criminal cases. We have previously observed that a separate civil action for the purpose of recovering the amount of the dishonored checks would only prove to be costly, burdensome and time-consuming for both parties and would further delay the final disposition of the case. This multiplicity of suits must be avoided. Where petitioners rights may be fully adjudicated in the proceedings before the trial court, resort to a separate action to recover civil liability is clearly unwarranted. In view of this special rule governing actions for violation of B.P. 22, Article 31 of the Civil Code cited by the trial court will not apply to the case at bar.ii[24]

The CAs reliance on DMPI Employees Credit Association v. Velezii[25] to give due course to the civil action of Chan independently and separately of Criminal Case No. 275381 was unwarranted. DMPI Employees, which involved a prosecution for estafa, is not on all fours with this case, which is a prosecution for a violation of BP 22. Although the Court has ruled that the issuance of a bouncing check may result in two separate and distinct crimes of estafa and violation of BP 22,ii[26] the procedures for the recovery of the civil liabilities arising from these two distinct crimes are different and non-interchangeable. In prosecutions of estafa, the offended party may opt to reserve his right to file a separate civil action, or may institute an independent action based on fraud pursuant to Article 33 of the Civil Code,ii[27] as DMPI Employees has allowed. In prosecutions of violations of BP 22, however, the Court has adopted

a policy to prohibit the reservation or institution of a separate civil action to claim the civil liability arising from the issuance of the bouncing check upon the reasons delineated in Hyatt Industrial Manufacturing Corporation, supra.

To repeat, Chans separate civil action to recover the amount of the check involved in the prosecution for the violation of BP 22 could not be independently maintained under both Supreme Court Circular 57-97 and the aforequoted provisions of Rule 111 of the Rules of Court, notwithstanding the allegations of fraud and deceit.

B Aptness of the dismissal of the civil action on the ground of litis pendentia

Did the pendency of the civil action in the MeTC in Manila (as the civil aspect in Criminal Case No. 275381) bar the filing of Civil Case No. 915-00 in the MeTC in Pasay City on the ground of litis pendentia?

For litis pendentia to be successfully invoked as a bar to an action, the concurrence of the following requisites is necessary, namely: (a) there must be identity of parties or at least such as represent the same interest in both actions; (b) there must be identity of rights asserted and reliefs prayed for, the reliefs being founded on the same facts; and, (c) the identity in the two cases should be such that the judgment that may be rendered in one would, regardless of which party is successful, amount to res judicata in respect of the other. Absent the first two requisites, the possibility of the existence of the third becomes nil.ii[28]

A perusal of Civil Case No. 01-0033 and Criminal Case No. 275381 ineluctably shows that all the elements of litis pendentia are attendant. First of all, the parties in the civil action involved in Criminal Case No. 275381 and in Civil Case No. 915-00, that is, Chan and Simon, are the same. Secondly, the information in Criminal Case No. 275381 and the complaint in Civil Case No. 915-00 both alleged that Simon had issued Landbank Check No. 0007280 worth P336,000.00 payable to cash, thereby indicating that the rights asserted and the reliefs prayed for, as well as the facts upon which the reliefs sought were founded, were identical in all respects. And, thirdly, any judgment rendered in one case would necessarily bar the other by res judicata; otherwise, Chan would be recovering twice upon the same claim.

It is clear, therefore, that the MeTC in Pasay City properly dismissed Civil Case No. 91500 on the ground of litis pendentia through its decision dated October 23, 2000; and that the RTC in Pasay City did not err in affirming the MeTC.

WHEREFORE, we grant the petition for review on certiorari, and, accordingly, we reverse and set aside the decision promulgated by the Court of Appeals on June 25, 2002. We reinstate the decision rendered on October 23, 2000 by the Metropolitan Trial Court, Branch 45, in Pasay City.

Costs of suit to be paid by the respondent.

SO ORDERED.

EN BANC [A.M. No. RTJ-02-1693. August 21, 2002] OSCAR M. POSO, complainant, vs. JUDGE JOSE H. MIJARES, RTC-Br. 21, Laoang, Northern Samar and FLOR SERIO, OIC Clerk of Court, Office of the Clerk of Court, respondents. DECISION PER CURIAM: THIS IS NOT THE FIRST TIME that respondent Judge Jose H. Mijares, RTC-Br. 21, Laoang, Northern Samar, is hailed to Court to defend his integrity and competence. Previously, for dismissing a petition for mandamus even long after a final and executory judgment thereon had been rendered based on a compromise agreement executed by the parties, and his open admission of negligence and lack of care in attending to incidents brought before him for adjudication, this Court found him guilty of gross ignorance of the law. We meted him a fine of P5,000.00 with stern warning that repetition of the same or similar infractions complained of would be dealt with more severely.ii[1] Obviously, by then, particularly after our stern warning intended to be taken seriously and committed to both heart and memory, he should have been more solicitous in his task to steer clear of blunders, especially their repetitions, and to satisfy claims in a manner which, although late in coming, he could have rightfully and lawfully done. Unfortunately, except for the inclusion of respondent Flor Serio, OIC Clerk of Court, RTC, Northern Samar, the instant complaint for administrative sanctions against Judge Mijares for allegedly railroading the criminal case against a self-confessed killer and admitting him to probation, which unduly obviated the accuseds otherwise definite date with prison, reflects the same incompetence earlier established on his part. Worse, the complaint demonstrates his apparent incorrigibility as exhibited by documents on record showing res ipsa loquitur, a sinister pattern of bad faith to favor the accused therein with a mere slap on the wrist and to foist fraud upon this Court. While the rules excuse honest errors of discretion as acceptable professional hazards, a defense ardently raised by respondent Judge, the series of his unbelievable mistakes in the application of basic legal principles on probation and criminal penalties together with his clear attempt at deception ought to be exposed, and punished, despite his pretensions of uprightness and sincerity. The instant administrative case stemmed from the proceedings in Crim. Case No. 2477 for murder, People v. Virgilio de Guia, where the victim, a certain Lito M. Galupo, was a relative of complainant Oscar M. Poso. On 6 February 1995 the criminal case was raffled to RTC-Br. 21, Laoang, Northern Samar,ii[2] presided over by respondent Judge Jose H. Mijares in an acting capacity by detail from his regular station at RTC-Br. 26, San Juan, Southern Leyte.ii[3] On 16 October 1995 the accused was arraigned and pleaded not guilty to the charge. Accordingly, the case was set for pre-trial and trial on 10 November 1995 but the proceedings were reset to 27 November 1995.ii[4] On 27 November 1995, in the course of the pre-trial conference in Crim. Case No. 2477,ii[5] the accused withdrew his plea of not guiltyii[6] and pleaded guilty to the lesser offense of homicide.ii[7] This was done with the open consent of handling Public Prosecutor Napoleon C. Lagrimas and the private offended parties therein including complainant Oscar Poso.ii[8] Parenthetically, it is surprising for respondent Judge to testify that even before he assumed over RTC-Br. 21 in an acting capacity in 1994, the Information in Crim. Case No. 2477 had already been amended to homicide by crudely crossing out the original caption of murder and writing the amended charge by hand when the same Information was filed only in 1995 and other relevant proceedings therein took place not later than the same year.ii[9] On the same day and occasion of the pre-trial conference and without receiving evidence of aggravating or mitigating circumstances, respondent Judge promulgated the judgment or Sentence, finding the accused guilty of homicide.ii[10] Curiously, Judge Mijares made allowance

for three (3) mitigating circumstances, i.e., plea of guilty, voluntary surrender and intoxication, and accordingly sentenced the accused to four (4) years, two (2) months and one (1) day of prision correccional as minimum to eight (8) years and one (1) day of prision mayor as maximum and ordered him to indemnify the heirs of the victim at P40,000.00.ii[11] Subsequent events in Crim. Case No. 2477 however complicated the otherwise uneventful conviction of the accused. To begin with, there was dispute as to whether the accused truly moved for reconsideration of the penalty imposed on him by respondent Judge Mijares. Complainant averred that respondent Judge had acted upon an unsigned motion which the accused did not even file with RTC-Br. 21. To prove his point he offered a two (2)-page unsigned document entitled Motion for Reconsideration bearing no date of receipt by RTC-Br. 21.ii[12] On the other hand, respondent Judge presented a different motion for reconsideration which was stamped received by RTC-Br. 21 with due notice to Public Prosecutor Napoleon C. Lagrimas together with the Branch Clerk of Court,ii[13] as well as the trial courts notice of hearing of the motion duly addressed to and received by the Public Prosecutor and the Public Attorneys Office. ii[14] Judge Mijares further asserted that the motion was actually heard on 28 December 1995 with both the prosecution and the defense in attendance. There is however no question that the prayer in the motion for reconsideration, whether the copy held by complainant Poso or respondent Judges record on file, was invariably for the reduction of the penalty from four (4) years, two (2) months and one (1) day of prision correccional as minimum to eight (8) years and one (1) day of prision mayor as maximum, to only two (2) years, four (4) months and one (1) day of prision correccional as minimum to six (6) years and one (1) day of prision mayor as maximum, and not to any penalty below this. Judge Mijares granted the motion for reconsideration in a Resolution dated 10 January 1996. Unfortunately however two (2) versions of the same Resolution, one being the alleged draft version, and the other, a final copy thereof, although both were penned by respondent Judge, surfaced and found circulation but each imposing different maximum terms of the indeterminate sentence. Complainant submitted a copy of the Resolution, Exh. D, reducing the penalty from four (4) years, two (2) months and one (1) day of prision correccional as minimum to eight (8) years and one (1) day of prision mayor as maximum, to two (2) years, four (4) months and one (1) day of prision correccional as minimum to six (6) years and one (1) day of prision mayor as maximum. In contrast, the Resolution dated 10 January 1996 proffered by respondent Judge, Exh. 6, for no apparent reason, deviated from the motion for reconsideration, oddly pegged both the minimum and the maximum ranges of the indeterminate sentence at prision correccional in violation of the Indeterminate Sentence Law, and ludicrously decreased the penalty to only two (2) years four (4) months and one (1) day of prision correccional as minimum to six (6) years of prision correccional as maximum. It is at once apparent from the two (2) resolutions that respondent Judge erased the words and one (1) day of prision mayor in the dispositive portion of complainants copy thereofii[15] and replaced them with of prision correccional as appearing in Judge Mijares version of Resolution dated 10 January 1996.ii[16] Respondent Judge admitted that complainants copy was actually only a draft of his Resolution dated 10 January 1996 which in its final form was allegedly the document in the judges custody.ii[17] On 11 January 1996, taking his cue from the reduced penalty in Crim. Case No. 2477 and on the very day that the accused filed his application for probation and release on recognizance, even before respondent Judge could act upon the application for probation, he ordered the provisional discharge of the accused from detention upon the recognizance of OIC Clerk of Court Flor Serio without hearing the prosecution or giving any opportunity for the private complainants to object.ii[18] It was only the next day, or on 12 January 1996, that Judge Mijares ordered the Probation Officer to initiate and conclude the necessary case study and investigation on the application for probation. On 3 July 1996, upon the favorable recommendation of the Probation Officer, respondent Judge placed the accused on probation without objection from Public Prosecutor Napoleon C. Lagrimas in a hearing called for this purpose.ii[19]

On 1 February 2001 the Office of the Ombudsman referred to this Court the Complaint-Affidavit of Oscar M. Poso concerning the turn of events in Crim. Case No. 2477 and charging respondent Judge Mijares with Knowingly Rendering an Unjust Judgment, Issuing Unjust Interlocutory Orders, Concealment of Documents and Commission of Acts punishable under Sec. 3, pars. (e) and (f) of RA 3019, as amended, otherwise known as the Anti-Graft and Corrupt Practices Act, and respondent OIC Clerk of Court Flor Serio with conspiracy to commit the foregoing acts and concealment of documents. Specifically, complainant alleged that respondent judge unjustly and to the prejudice of the People of the Philippines and the private complainants committed the following acts in the course of the criminal case: (a) convicted the accused of homicide, after he had pleaded guilty to this lesser offense, when the charge was for murder of which he should have been convicted; (b) acted favorably on 10 January 1996 on an unsigned Motion for Reconsideration filed by the accused for the reduction of the prison term imposed on him, i.e., from four (4) years, two (2) months and one (1) day of prision correccional as minimum to eight (8) years and one (1) day of prision mayor as maximum, to two (2) years, four (4) months and one (1) day of prision correccional as minimum to six (6) years and one (1) day of prision mayor as maximum, without notice to the handling Public Prosecutor Napoleon C. Lagrimas; (c) unjustly released the accused on 11 January 1996 on the recognizance of OIC Clerk of Court, respondent Flor Serio, without notice and hearing; (d) gave due course to the application of the accused for probation in his Order of 12 January 1996 without hearing and in violation of Sec. 9 of the Probation Law which provides that the benefits of the law do not extend to those sentenced to serve a maximum term of imprisonment of more than six (6) years; and, (e) barred the issuance of certified copies of relevant documents in Crim. Case No. 2477 requested by complainant for purposes of his appeal, in conspiracy with the OIC Clerk of Court Flor Serio. Complainant contended that respondent Judge violated Sec. 3, pars. (e) and (f), RA 3019, punishing the acts of causing any undue injury to any party including the government or giving any private party any unwarranted benefits, advantage or preference as well as neglecting or refusing, after due request and without sufficient justification, to act within a reasonable time on any matter pending for the purpose of discriminating against any interested party. With respect to respondent Flor Serio, complainant alleged that the latter unjustly refused, in violation of Sec. 3, par. (f), RA 3019, to furnish him with certified copies of the following documents relative to Crim. Case No. 2477 which were requested for purposes of perfecting an appeal, to wit: (a) Information; (b) Pre-Trial Conference Order; (c) Sentence promulgated on 27 November 1995 finding the accused guilty of homicide after he pleaded guilty to this lesser offense; (d) Resolution dated 10 January 1996 acting on accuseds Motion for Reconsideration praying for reduction of his penalty; and, (e) Order dated 12 January 1996 acting upon the application for probation despite the absence of notice and hearing and the appropriate penalty exceeding six (6) years. On 11 April 2001 respondent Judge filed his Comment denying the charges against him, particularly, that he granted probation to one clearly disqualified under the Probation Law. As proof thereof, respondent attached to his Comment the allegedly genuine copy of the accuseds Motion for Reconsideration dated 12 December 1995ii[20] and the supposedly authentic copy of his Resolution dated 10 January 1996ii[21] wherein he reduced the penalty imposed upon the accused from four (4) years, two (2) months and one (1) day of prision correccional as minimum to eight (8) years and one (1) day of prision mayor as maximum, to only two (2) years, four (4) months and one (1) day of prision correccional as minimum to six (6) years of prision correccional as maximum. He disclaimed the due execution of complainants copy of Resolution dated 10 January 1996, and refuted the allegation of complainant that the penalty he imposed upon the accused was six (6) years and one (1) day of prision mayor as maximum which would have otherwise disqualified the accused from probation. Respondent Judge also averred that the prosecution and the defense were duly notified of the hearing of the motion for reconsideration and were actually present thereat before he issued the assailed resolution. In a Letter-Comment dated 6 April 2001 respondent Flor Serio denied that she had refused to issue certified copies of the documents requested by complainant Poso for the sole reason that as the OIC Clerk of Court of the

RTC of Northern Samar she had no custody of the requested documents which were allegedly still in the possession of the Clerk of Court for Branch 21 where Crim. Case No. 2477 was pending. In a Reply-Affidavit dated 23 May 2001 complainant branded as falsified respondent Judges copy of Resolution dated 10 January 1996; prayed that Judge Mijares be preventively suspended pending resolution of this case to prevent further falsification of the records in Crim. Case No. 2477; and, insisted that respondent Judge acted upon the Motion for Reconsideration filed by the accused without notice to handling Prosecutor Lagrimas, a fact allegedly admitted by the prosecutor himself in his Counter-Affidavitii[22] filed with the Office of the Ombudsman, and that the records in Crim. Case No. 2477 were in the custody of OIC Clerk of Court Flor Serio at the time the request for certified true copies thereof was made. On 22 August 2001, confronted with two (2) conflicting versions of the pivotal Resolution dated 10 January 1996, and the apparent mishandling of Crim. Case No. 2477, we referred the instant case to Associate Justice Edgardo P. Cruz of the Court of Appeals for an exhaustive investigation, report and recommendation. On 25 October 2001 Justice Cruz summoned the complainant and his adversaries, Judge Mijares and OIC Clerk of Court Serio, for pre-trial conference. Evidence for the parties was received in several hearings held for this purpose.ii[23] Thereafter complainant Poso and respondent Judge submitted their respective Memoranda while respondent Serio opted to file a Manifestation adopting in toto the arguments and evidence of her corespondent. On 14 May 2002 Justice Cruz submitted to this Court his Report and Recommendation of even date. His report called attention to the reprehensible actuations of respondent Judge when he reduced the penalty to ridiculous terms so as to qualify the accused for probation; hastily ordered the discharge of the accused from jail on recognizance without the benefit of notice and hearing afforded the prosecution and the aggrieved parties, and even before he could order the Probation Officer to conduct the requisite post-sentence investigation on the accused in violation of the Probation Law; illegally admitted the accused to probation despite the appropriate maximum penalty for homicide exceeding six (6) years which he should have been sentenced to serve; and, ignorantly awarded civil indemnity of P40,000.00 to the heirs of the victim of homicide when the amount should have been P50,000.00. Justice Cruz found him guilty of violating Sec. 3, par. (e), of RA 3019 or, at the very least, gross ignorance of the law to the prejudice of the prosecution and the private offended parties in Crim. Case No. 2477. He however recommended the dismissal of the charges for Knowingly Rendering an Unjust Judgment and Issuing Unjust Interlocutory Orders since the questioned judgment and orders had not been found in appropriate proceedings to be unjust or unfair. Also recommended for dismissal was the count for Concealment of Documents on the ground that there was no factual basis for tasking Judge Mijares with custody of the requested documents. For the same reason, the investigating Justice recommended the dismissal of the complaint as against OIC Clerk of Court Flor Serio. The appropriate penalty for the culpable acts of respondent Judge, according to Justice Cruz, was suspension from office for four (4) months without pay with warning that repetition of the same or similar offenses would be penalized more severely. We find the investigation and report of Justice Cruz to be well-taken, but the penalty he recommends appears to be disproportionate to the gravity of the offenses. As has been painstakingly observed, respondent Judge Mijares had been sternly warned in Dadap-Malinao v. Mijaresii[24] that repetition of his mistakes, more so aggravations thereof, would be dealt with more severely. Apparently the warning did not work and hence we see no reason in employing it again for purposes of this disciplinary case. Clearly, public interest in an adept and honest judiciary dictates that notice of future harsher penalties should not be followed by another forewarning of the same kind, ad infinitum, but by discipline through appropriate penalties. This understanding should leave no doubt that, unless completely absolved of the charges, respondent Judge faces a grimmer sentence than the four (4) -month suspension and warning recommended by Justice Cruz.

First. We are not convinced that the two (2) copies of the 10 January 1996 Resolution penned by respondent Judge consist of the draft and the final versions thereof. The fact that complainant received a signed copy of the Resolution, Exh. D, in the ordinary course of court proceedings only shows that Exh. D was the official and final determination of the motion for reduction of penalty sought by the accused in Crim. Case No. 2477. Quite obviously, in offering Exh. 6 as the supposedly final version of the Resolution dated 10 January 1996; respondent Judge is vainly attempting to justify the subsequent erroneous grant of probation to the same accused since the penalty imposed under Exh. D absolutely disqualifies him from probation. Exhibit 6 is clearly an afterthought meant by Judge Mijares to deceive this Court into excusing him from his patently flawed decision to allow probation and to practice fraud in the fair and accurate disposition of the instant administrative case. His lack of candor and outright dishonesty are not without recorded precedent. In his previous administrative case, Dadap-Malinao v. Mijares,ii[25] he already tried to mislead this Court into believing that his assailed order therein actually dismissed a mere motion and not the main petition itself, which would have been irregular, by passing the blame upon his hapless typist for supposedly keying in the word petition instead of motion, and by issuing another order two (2) years later still claiming that he did not dismiss the petition in question. Significantly, in our review of the record, we eventually found out that the object of his order was indeed to dismiss the petition and not the supposedly insignificant motion, and that his alleged honest error was in reality a cover up to escape the disciplinary consequences of his foiled attempt to dismiss the petition in flagrant violation of established precedents. Second. Even if we are to believe as true the allegation of respondent Judge that Exh. D was merely a draft of Exh. 6 and proceed from this theory, his degenerate professional character would nonetheless be unmistakable. For, whether by design or out of sheer negligence, his inefficiency allowed the circulation of a mere draft of his 10 January 1996 Resolution in Crim. Case No. 2477, as he would himself admit, which pegged the maximum term of the indefinite sentence to more than six (6) years, when it was his intention to lower further the penalty imposed therein as he in fact did in the allegedly official copy of the 10 January 1996 Resolution. The ineptitude and incompetence of Judge Mijares and his sloven management of court records are, to say the least, deplorable. As shown by complainant Posos possession of Exh. D, the premature publication of a distinct version of the Resolution has no doubt compromised the sanctity and confidentiality of the judgment process to the detriment of every effort to promote trust and confidence in the decisions of judges. Verily, an unrestricted glance into undeveloped and tentative opinions of a judge, as he weighs the arguments of concerned parties, dangerously opens avenues to pressure him to rule one way or the other and, falsely or not, invites cynical attention to his shifts of opinions while judgment is being purposely perfected as ostensible badges of partiality and impropriety. Consequently, while a judge may have just stated an exploratory ruling in the case, it becomes difficult for him to backtrack and change his opinion in the final decision without losing his credibility and never recovering it in the eyes of a distrustful litigant and the wary public. As did happen in the instant case, the divergent penalties in the draft and final 10 January 1996 Resolutions caused complainant Poso to believe that he and his relatives, who were the private offended parties in Crim. Case No. 2477, got the raw end of the deal. Their suspicion was bolstered no end by the grant of probation to the accused, an exercise of judicial discretion emanating precisely from the questioned Resolution. The error of respondent Judge, more accurately his misconduct, veritably flaunted Rule 3.07 of the Code of Judicial Conduct prohibiting judges from making public comments on any pending or impending case when he allowed the public, i.e., complainant Poso, access to a draft version of his 10 January 1996 Resolution. Unfortunately his flip-flopping dispositions ruined every opportunity to appear credible and to project an image of probity. As administrators of courts, judges should adopt a fail-safe system of confidential records management which is ever ready to fend off unhampered scavenging of a judges ideas and assessments from the glare and gore of

publicity and pressure by interested parties.ii[26] Not least of all this mechanism is essential to protect the independence of decision-making by those tasked to exercise judicial power. In the present case, the indiscriminate availability of even a draft resolution indicates no less than gross inexcusable negligence on the part of respondent Judge and a violation of Rule 3.08 of the Code of Judicial Conduct directing judges to perform administrative responsibilities diligently and to maintain professional competence assiduously in court management. Third. But contrary to the allegations of complainant Poso, respondent Judge Mijares did not err when he convicted the accused in Crim. Case No. 2477 of homicide and not of the original charge of murder. The conviction was the result of plea bargaining whereby the accused pleaded guilty to the lesser offense of homicide with the admitted consent of both handling Public Prosecutor Napoleon C. Lagrimas and the private offended parties including herein complainant. There was also no error in respondent Judges action to disregard in the computation of the imposable penalty the aggravating circumstances of treachery and evident premeditation alleged in the Information in Crim. Case No. 2477. Simply because the accused pleaded guilty does not necessarily imply his wholesale admission of the presence of aggravating circumstances. This is especially true in the instant case where the plea of guilty to the lesser offense of homicide was preceded by a plea of not guilty to murder, thus indicating the intention of the accused to deny the existence of evident premeditation and treachery. ii[27] At any rate, as we have held in People v. Latupan,ii[28] qualifying and aggravating circumstances, which are taken into consideration for the purpose of increasing the degree of penalty to be imposed, must be proved with equal certainty as the commission of the act charged and cannot be considered as being integrated with the plea of guilty. Fourth. In his Sentence, despite the correct initial assessment made by respondent Judge, he however egregiously credited the accused with three (3) mitigating circumstances, i.e., plea of guilty, voluntary surrender and intoxication, without receiving evidence to warrant the action. ii[29] While respondent Judge could have plausibly appreciated the plea of guilty of the accused as a mitigating circumstance, since the guilty plea was entered and the sentence immediately promulgated without any prosecution evidence having been offered, ii[30] we cannot say this of his treatment of the other mitigating circumstances which violates basic legal principles. It is elementary that voluntary surrender and intoxication cannot be admitted without evidence of factual requisites.ii[31] For voluntary surrender to be appreciated, effort must be made to present evidence showing the interest of the accused to surrender unconditionally to the authorities either because he acknowledges his guilt or because he wishes to save them the trouble and expenses necessarily incurred in his search and capture.ii[32] In intoxication, it is necessary that the accused present proof of having taken a quantity of alcoholic beverage prior to the commission of the crime sufficient to produce the effect of obfuscating reason. ii[33] At the same time, he must prove that he is not a habitual drinker and that he did not take the alcoholic drink purposely to reinforce his resolve to commit the crime.ii[34] We need not belabor jurisprudence to accommodate respondent Judges argument which in effect posits that not every judicial error bespeaks ignorance of the law and that, if committed in good faith, does not warrant administrative sanctions. So we have ruled and acted consistently, for to decide otherwise would be nothing short of harassing judges to take the fantastic and impossible oath of rendering infallible judgments. However, in the present case, the rule shielding honest errors of opinion from punishment does not apply. Admittedly judges cannot be held to account for erroneous judgments rendered in good faith but this defense has been all too frequently cited to the point of staleness. In truth, good faith in situations of fallible discretion inheres only within the parameters of tolerable judgment and does not apply where the issues are so simple and the applicable legal principle evident and basic as to be beyond permissible margins of error. ii[35]

In the case at bar, Judge Mijares was faced with the plain task of comprehending mitigating circumstances, a topic in freshman criminal law. For a judge of respondent Judges stature and experience of twenty-three (23) years of service in the judiciary, to still err thereon must quite obviously be ignorance of the law or even a subterfuge for an unworthy and corrupt purpose. While it may be true that the handling public prosecutor did not object to his appreciation of the mitigating circumstances, respondent Judge was no less excused from his judicial duty to observe the law he was bound to know and sworn to uphold. A judge owes it to himself and his office to know by heart basic legal principles and to harness his legal know-how correctly and justly. Anything less than that, as respondent Judge exhibited in Crim. Case No. 2477, is constitutive of the serious charge of gross ignorance of the law, perhaps, grave misconduct. Fifth. While we do not give credence to complainants accusation that Judge Mijares acted upon an unsigned motion for reconsideration and that he granted the same without notice and hearing to the prosecution, for the documents on record indubitably prove otherwise, we find several glaring irregularities in the rendition of the 10 January 1996 Resolution. To begin with, there was confusion as to which version of the Resolution, Exh. 6 or Exh. D, was authentic, a matter made worse not only by the publics improvident access to a draft version of the Resolution, if respondents account were true, but also the deception foisted upon this Court in the form of the devious Exh. 6. Equally lamentable and incriminating is the penalty appearing in the allegedly official and final copy of the 10 January 1996 Resolution granting the motion for reduction of penalty in Crim. Case No. 2477. The Resolution speaks for its own monstrosity: two (2) years, four (4) months and one (1) day of prision correccional as minimum to six (6) years of prision correccional as maximum. Evidently, this penalty upon which the accused applied for and was granted probation is contrary to the mandate of the Indeterminate Sentence Law. If only to illustrate the rudimentary character of this principle and its obvious misapplication, we quote from a freshman criminal law textbookIf the offense is punished by the Revised Penal Code, the court shall sentence the accused to an indeterminate penalty the maximum term of which shall be that which, in view of the attending circumstances, could be properly imposed under the rules of the Revised Penal Code, and the minimum term of which shall be within the range of the penalty next lower to that prescribed by the Code for the offense (Sec. 1, Act No. 4103 as amended by Act No. 4225). The court cannot put the minimum penalty in the same period and the same degree as the maximum penalty, because the minimum penalty shall be within the range of the penalty next lower to that prescribed by the Code for the offense (underscoring supplied).ii[36] Moreover, the penalty fixed by respondent Judge does not conform to the sentence which the accused sought in his motion for reduction of penalty from four (4) years, two (2) months and one (1) day of prision correccional as minimum to eight (8) years and one (1) day of prision mayor as maximum, to two (2) years, four (4) months and one (1) day of prision correccional as minimum to six (6) years and one (1) day of prision mayor as maximum, and not to a prison term below this as was ordered by respondent Judge. While a judge as a rule is not barred from granting relief other than or even more beneficial than the relief prayed for, the disposition must be consistent with law and equity. This certainly is not the situation here. In violating the Indeterminate Sentence Law to grant a relief more favorable to the accused than what the accused himself asked for and ostensibly in preparation for other legal maneuvers, i.e., probation to assure his unfettered pass from detention, respondent Judge indubitably acted with grave abuse of discretion and caused undue injury to complainant Poso and the other private offended parties. The grievous exercise of discretion by respondent judge constitutes desecration of his sacred oath to do impartial justice to every one and an infringement of Sec. 3, par. (e), RA 3019 or the Anti-Graft and Corrupt Practices Act, penalizing the criminal act of causing any undue injury to any party including the government or giving any private party any unwarranted benefits, advantage or preference. His manifest partiality in granting the precipitate discharge of the accused from jail is notoriously remarkable. No doubt the elements of the

offense are present in the instant case: (1) the respondent is a public officer or a private person charged in conspiracy with the former; (2) the public officer committed the prohibited acts in the performance of his official duties or in relation to his or her public positions; (3) he caused undue injury to any party, whether the government or a private party; and, (4) the public officer acted with manifest partiality, evident bad faith, or gross inexcusable negligence.ii[37] Sixth. On 11 January 1996, with undue and irresponsible haste, respondent Judge allowed the accused in Crim. Case No. 2477 the privilege of temporary liberty under the recognizance of respondent Flor Serio even before he could act on the application for probation and without the benefit of notice and hearing for both the prosecution and the private complainants. His unwarranted eagerness to free the accused from jail is even more manifest from the fact that the application for probation was filed also on the same day that he directed the release of the accused on recognizance. Under the Probation Law, i.e., P.D. 968 as amended by P.D. 1990, respondent Judge could have authorized the temporary liberty of the accused only while [p]ending submission of the investigation report and the resolution of the petition.ii[38] This was evidently contravened for it was only on 12 January 1996 that Judge Mijares instructed the Probation Officer to initiate and conduct the necessary case study and investigation on the application for probation. It must be stressed that the statutory sequence of actions, i.e., order to conduct case study prior to action on application for release on recognizance, was prescribed precisely to underscore the interim character of the provisional liberty envisioned under the Probation Law. Stated differently, the temporary liberty of an applicant for probation is effective no longer than the period for awaiting the submission of the investigation report and the resolution of the petition, which the law mandates as no more than sixty (60) days to finish the case study and report and a maximum of fifteen (15) days from receipt of the report for the trial judge to resolve the application for probation.ii[39] By allowing the temporary liberty of the accused even before the order to submit the case study and report, respondent Judge unceremoniously extended the pro tem discharge of the accused to the detriment of the prosecution and the private complainants. Furthermore, it is apparent that respondent Judge ordered the release of the accused even before he could assess that the latter was not a disqualified offender under Sec. 9 of the Probation Law, i.e., sentenced to serve a maximum term of imprisonment of more than six years, which he could have otherwise done had he ordered the release only after he had instructed the accomplishment of the case study. Putting the discharge of the accused on hold would have allowed Judge Mijares more time to pass upon the request for provisional liberty. In addition, the unsolicited fervor to release the accused significantly deprived the prosecution and the private complainants of their right to due process. Contrary to the argument of respondent Judge, the prosecution along with the private complainants has every right to be heard on the application of the accused for temporary liberty upon recognizance. To stress, probation is a mere privilege and discretionary upon the court, to be exercised primarily for justice and public interest and merely incidentally for the benefit of the accused. ii[40] Certainly, if respondent Judges discretion is to be exercised soundly, as he should have done, he had no better witnesses to hear than the prosecution and the private complainants who, having definitely greater stakes than others in the untimely liberty of the accused, could have disproved the propriety of his provisional discharge of the accused for being disadvantageous to society. More than anything else, respondent-Judge has shown either utter disregard for or total ignorance of the basic provisions of the Probation Law. It need not be underscored that one of his basic obligations is to understand the law fully and uphold it conscientiously. When the law is sufficiently basic, a judge owes it to his office to know and simply apply it for anything less is constitutive of gross ignorance of the law and manifest partiality punishable under Sec. 3, par. (e), RA 3019.ii[41] Seventh. Respondent Judge abused the mandate of his office when he granted probation to the accused in Crim. Case No. 2477. Obviously, the accused was a disqualified offender under Sec. 9 of the Probation Law, since under the undisputed facts of the case the imposable maximum term of imprisonment upon him is more than six

(6) years.ii[42] The penalty for homicide, the crime to which the accused confessed guilt, is reclusion temporal.ii[43] Even if respondent Judge were correct in appreciating three (3) mitigating circumstances, i.e., plea of guilty, voluntary surrender and intoxication, the imposable maximum prison term would nonetheless be prision mayor which carries a period of incarceration ranging from six (6) years and one (1) day to twelve (12) years.ii[44] There is no merit in respondent Judges view, citing Del Rosario v. Roseroii[45] and BP 76 amending the Probation Law,ii[46] that a conviction for six (6) years and one (1) day of prision mayor did not have the effect of disqualifying the accused from probation. Due diligence should have elicited the indispensable information that Del Rosario had been superceded and that BP 76 had been modified in relevant parts. In Amandy v. People,ii[47] wherein the accused was sentenced to six (6) years and one (1) day, we held that PD 1990 had amended BP 76 so as to disqualify offenders sentenced to more than six (6) years as maximum term of imprisonment.ii[48] Clearly, as the facts demonstrate, respondent Judge wrongly granted probation to an ineligible applicant in a manner embarrassing to his vocation as judge of a court of justice. Eighth. We agree with the findings of the Investigating Justice that no evidence adequately proves the charge that OIC Clerk of Court Flor Serio conspired with respondent Judge to cause any undue injury to complainant and the other private offended parties in Crim. Case No. 2477 or to give the accused therein the unwarranted benefit of probation, it being clear from the evidence that only Judge Mijares perpetrated the act. Neither did they refuse to issue certified true copies of relevant documents in Crim. Case No. 2477 since it was established that the custody of the requested documents was not with respondents so that they could not have refused the request. Something more had to be presented than complainants loose statements. However, we do not agree with the other conclusion in the report that the offense of Knowingly Rendering an Unjust Judgment or Issuing Unjust Interlocutory Orders has not been established since, according to Justice Cruz, the basic fact of injustice must still be determined a priori by a competent court in an appropriate proceeding, thus implying that the present administrative case is not suited for this purpose. We stress that the instant proceeding is itself an appropriate process to assail the injustice caused by respondent Judges orders and to penalize him for it. In De Vera v. Pelayoii[49] we said that a decision or order may be pronounced unjust in the same administrative proceeding where a judge is taken to task for promulgating an allegedly unjust judgment or order. Particularly, to prove the transgression in the administrative proceeding, it must be established that the respondent rendered judgment or decision without basis in law and/or evidence and in a manner actuated by hatred, envy, revenge, greed or some other similar motive.ii[50] Stated otherwise, if in rendering judgment the judge fully knew or could not but have known that the same is unjust in the sense aforesaid then he must have acted maliciously. Bad faith in the sense of a dishonest purpose, not the error, bad judgment or negligence per se, is the cause for liability as well as the ground for penalty. It is crystal clear that the assailed orders of respondent Judge are contrary to law and are motivated by premeditated efforts to cause injustice. To recall, by his own admission, he lowered the penalty imposed upon the accused in Crim. Case No. 2477 to absurd limits and later authorized his pass from jail, first provisionally then permanently, to the prejudice of the prosecution and the private offended parties. Downgrading the penalty to a range lower than the prison term prescribed by law enabled the accused to elude incarceration and apply for probation as he in fact did. In so deciding, respondent Judge trifled with express provisions of our penal laws. Not only did he display gross ignorance of the law, he also capriciously tinkered with established legal precepts. The protestations of respondent Judge that the error committed can only be an honest error of judgment precluding administrative sanction are errant and insipid. In the first place, he ought to have known that his authority to fix penalties in accordance with his actual findings is circumscribed by law. More than that, a visible thread of partiality for the accused runs through the entire proceedings, particularly during the last stages. Truly, the severity of the divergence between his hurried, although calculated, actions and the indubitable principles as well as precedents governing criminal penalties suggests no other conclusion than that

he deliberately wanted to set the accused free regardless of the dictates of conscience and the imperatives of law. Res ipsa loquitur. The questioned actuations of respondent Judge and the attendant circumstances brook no explanation consistent with good faith or lack of malice and must be counted as constitutive of serious misconduct. On the face of the assailed orders, there was an inexplicable series of grave errors bereft of any redeeming feature and signifying an unjust decision. Indeed, when the inefficiency springs from failure to consider so basic and elemental a rule, law or principle in the discharge of duties, the judge is either insufferably incompetent and undeserving of the position and title he holds, or is too vicious that the oversight or omission was deliberately done in bad faith and in grave abuse of judicial authority. This is the case here. Moreover, the absence of credible explanation from respondent Judge to disprove or otherwise mitigate the strong inference of malicious design unfortunately exacerbates the situation. When asked to explain, he was unable to give any rational justification for his actions even as his explanations, off-tangent as they were, only reinforced the depths of the injustice he had created. It is therefore our finding that he perpetrated the offense of Knowingly Issuing Unjust Orders. Ninth. It will not do, however, to dispose of the controversy by simply declaring the administrative culpability of respondent Judge upon a matter literally dealing with life and death. To maintain the status quo in Crim. Case No. 2477 would surely leave hanging or in suspended animation the underlying issue of justice not only in the instant proceeding but in the criminal action as well. Clearly, we cannot stop short of annulling the tainted proceedings in Crim. Case No. 2477 and in the process enshrine an appearance of doing justice only by halves. Marred by what is obviously a miscarriage of judicial ethics, the proceedings beginning with the issuance of the controversial 10 January 1996 Resolution are patently void and therefore produce no legal effects whatsoever. From the lowering of the penalty to qualify the accused for probation, the authorization for temporary liberty on recognizance, and finally the grant of probation, the orders of respondent Judge arising from these proceedings do not compel respectability and finality to constitute res judicata or even double jeopardy. A judgment rendered with grave abuse of discretion or without due process does not exist in legal contemplation and cannot be considered to have attained finality for the simple reason that a void judgment has no legality from its inception.ii[51] It may be attacked directly or collaterally and set aside as in the instant case. To be sure, it has been said that probation is not a sentence but is in effect a suspended sentence or an interlocutory judgment,ii[52] for which reason, it cannot be argued that courts are barred from correcting manifest injustice in the improvident and corrupt grant of probation. At any rate, and without tinge of doubt, bare technical adherence to the letter of the law and jurisprudence should not excuse our obligation in settings attended by unusual circumstances to rectify evident iniquity. We recognize the general rule that this Court does not review a trial courts decision in an administrative proceeding since its main concern therein is to determine the ethical responsibilities of judicial conduct. ii[53] Nonetheless, in the instant case, it is our considered opinion that the salutary principle is not controlling. Under clear considerations before us, the situation calls for the exercise of our equity jurisdiction to the end that we render complete justice to all affected parties. As we have said, Equity as the complement of legal jurisdiction seeks to reach and do complete justice where courts, of law, through the inflexibility of their rules and want of power to adapt their judgments to the special circumstances of cases, are incompetent so to do. Equity regards the spirit of and not the letter, the intent and not the form, the substance rather than the circumstance, as it is variously expressed by different courts.ii[54] Indeed, a court of equity which has taken jurisdiction and cognizance of a cause for any purpose will ordinarily retain jurisdiction for all purposes and award relief so as to accomplish full justice between the party litigants, prevent future litigation and make performance of the courts decree perfectly safe to those who may be compelled to obey it.ii[55]

In this regard, we instruct RTC-Br. 21, Laoang, Northern Samar, in Crim. Case No. 2477 to call the case once again taking stock of our pronouncements in the instant case. The trial court shall order the arrest of accused Virgilio de Guia to restore the status quo ante prior to his release on recognizance. It shall forthwith hear the accused and the prosecution solely for the purpose of establishing the mitigating or aggravating circumstances, as the case may be. The trial court shall then promulgate judgment paying particular attention to the proper application of the Indeterminate Sentence Law and the plea of guilty of the accused to homicide. From thereon, let justice take its proper course. Faith in the administration of justice exists only if every party-litigant is assured that the occupants of the bench are rich in moral fiber and strong in their grasp of legal principles. Unfortunately, respondent Judge failed to exhibit these qualities in both his discharge of sworn duties and his manner of defending himself before this Court in the instant proceedings. The brazen flaunting of our disciplining authority through the fraudulent imposition of the doctored 10 January 1996 Resolution along with the persistent and deliberate heedlessness of key precedents and elementary legal precepts is palpable from his actions. Having been judge for twenty-three (23) years, he should have appreciated by now that no position in government service exacts greater demand on honesty and integrity upon the individual than a seat in the judiciary. He should have taken this lesson to heart if not for the fact of his status as judge then for the consideration that a previous administrative case had once been decided against him. WHEREFORE, the Court finds respondent JUDGE JOSE H. MIJARES, detailed to RTC-Br. 21, Laoang, Northern Samar, with permanent station at RTC-Br. 26, San Juan, Southern Leyte, guilty Gross Dishonesty for foisting upon this Court a fraudulent copy of his 10 January 1996 Resolution, or otherwise, of Gross Inexcusable Negligence for allowing a draft of his 10 January 1996 Resolution to circulate freely and unhampered, in violation of the rule of strict confidentiality, and of Gross Ignorance of the Law, Knowingly Issuing Unjust Orders and Commission of Acts punishable under Sec. 3, par. (e) of RA 3019, otherwise known as the Anti-Graft and Corrupt Practices Act, as amended, as a result of his actions in Crim. Case No. 2477 entitled, People v. Virgilio de Guia for lowering the penalty upon the accused to absurd limits in order that the latter may avail of, as he was indeed granted, temporary liberty on recognizance and thereafter probation. Consequently, JUDGE JOSE H. MIJARES is ordered DISMISSED from the service effective immediately with prejudice to re-employment in any branch or instrumentality of the government including government-owned or controlled corporations, with forfeiture of all his retirement benefits, except the value of his earned leave credits which he shall be paid in full. He is further ordered to IMMEDIATELY CEASE AND DESIST from discharging the functions of the office from which he is removed. Moreover, RTC-Br. 21, Laoang, Northern Samar, in connection with Crim. Case No. 2477, is directed to ORDER THE ARREST of accused Virgilio de Guia in order to restore the status quo ante prior to his release on recognizance. Forthwith the trial court shall CALL A HEARING for the sole purpose of affording the accused and the prosecution an opportunity to present evidence proving mitigating or aggravating circumstances as the case may be. The trial court shall then RE-PROMULGATE JUDGMENT in Crim. Case No. 2477 paying particular attention to the proper application of the Indeterminate Sentence Law and the plea of guilty of the accused to homicide. The Administrative Complaint against respondent Judge for concealment of documents, and against respondent Flor Serio, OIC Clerk of Court, RTC, Northern Samar, for concealment of documents and conspiracy to commit the foregoing acts is DISMISSED for lack of merit. SO ORDERED. THIRD DIVISION [G.R. No. 154895. November 18, 2004]

JOSIE GO TAMIO, petitioner, vs. ENCARNACION TICSON, respondent. DECISION PANGANIBAN, J.: In general, a lessee is not allowed to challenge the title of the lessor. Indeed, it is immaterial whether the lessor had any title at all to the property at the time the lease was commenced. However, due to the peculiar circumstances in the present case, the Court makes an exception to this rule. Otherwise, it would sanction unjust enrichment in favor of the respondent and cause unjust poverty to the petitioner. The Case The instant Petition for Review on Certiorari[1] seeks to set aside the February 28, 2002 Decision[2] and the April 30, 2002 Resolution[3] of the Court of Appeals (CA) in CA-GR SP No. 62908. The dispositive portion of the challenged Decision reads: WHEREFORE, the instant petition is hereby DENIED DUE COURSE and DISMISSED. The Decision, dated March 24, 1999, is hereby AFFIRMED.[4] The assailed Resolution denied reconsideration of the foregoing disposition. The March 24, 1999 Decision[5] of the Regional Trial Court (RTC)[6] of Manila, upheld by the CA, disposed as follows: WHEREFORE, the appealed judgment is hereby affirmed with modification, to wit: 1) Ordering [petitioner] to pay [respondent] the amount of P86,000 as payment for rental arrearages covering the period September, 1996 to June, 1997 and from July, 1997 to December, 1997 at a monthly rate of P5,000 and P6,000 respectively. [Petitioners] counterclaim is hereby dismissed for lack of merit.[7]

2)

On the other hand, the Decision[8] of the Metropolitan Trial Court (MTC)[9] of Manila (Branch 5), which was affirmed with modification by the RTC, dismissed respondents complaint for unlawful detainer against the petitioner. The Facts The CA summarized the facts in this manner: The Roman Catholic Archbishop of Manila (RCAM) is the owner of an apartment unit originally leased to Mr. Fernando Lopez Lim. After the demise of Mr. Fernando Lim, [his] children became the occupants thereof. One of [them, Valentine Lim] requested respondent Encarnacion Ticson, for financial assistance [in order] to purchase the apartment unit from RCAM. In exchange, Valentine Lim executed a waiver in favor of respondent. On June 15, 1996, respondent executed a contract of lease [in favor of petitioner], on the basis of the waiver from Valentine Lim respecting the apartment unit, for a period of three (3) months. After signing the contract and paying the rentals, [petitioner] discovered that the apartment was actually owned by RCAM.

Meanwhile, after the expiration of the three (3) month lease, respondent demanded petitioner to v acate the premises for the use of the formers family members. Petitioner failed to comply, giving rise to the instant case for unlawful detainer. After trial, the Metropolitan Trial Court (MTC) found respondent guilty of concealment [amounting to] fraud when she misrepresented that she was the owner or authorized lessor of the apartment. Consequently, the contract did not produce any legal effect, much less, rights or obligations. Thus, the MTC ordered the dismissal of the complaint for unlawful detainer. Unsatisfied therewith, respondent appealed the dismissal with the Regional Trial Court (RTC). After review thereof, the RTC found that the concealment did not amount to fraud, but [was merely due] to respondents honest belief that she became or will eventually become the owner of the property by reason of the said waiver. Moreover, the RTC found that if [petitioner] has indeed questioned the [respondents] title, she should have communicated with RCAM immediately since she came to know of RCAMs ownership over the subject property early on. On the basis thereof, the RTC ordered petitioner to pay respondent P86,000.00 as rental arrearages from September 1996 to June 1997 and from July 1997 to December 1997 at a monthly rate of P5,000.00 and P6,000.00 respectively, and dismissed petitioners counterclaim for lack of merit.[10] Meanwhile, on March 3, 1998, petitioner entered into a Contract of Lease[11] over the same property with RCAM for a term of one year, commencing from January 1, 1998 to December 31, 1998. In that Contract, petitioner assumed to pay the rent corresponding to her use and occupation of the property prior to its execution; that is, from June 1, 1996 to December 31, 1997. Ruling of the Court of Appeals The CA agreed with the RTC that the misrepresentation of respondent as the owner or lessor of the property did not amount to fraud, but was merely an error under Article 1343 of the Civil Code. The appellate court added that she must have acquired legal possession over the apartment unit as an assignee thereof, considering the waiver/assignment executed in her favor by the previous lessees. The appellate court added that petitioner herself had been negligent in not immediately communicating with the owner of the property -- the Roman Catholic Archbishop of Manila (RCAM) -- regarding her discovery, thereby implying her acknowledgment of respondents right to sublease the property. Consequently, while holding that, as found by the lower court, RCAM and petitioner entered into a new Contract of Lease that rendered the instant case moot and academic, the C A ordered petitioner to pay rental arrearages to respondent for the period September 1996 to December 1997. Hence, this Petition.[12] Issue The lone issue presented for our consideration is as follows: Whether or not petitioner should be held liable to pay respondent the amount of P86,000.00 representing the alleged rental arrearages from September 1996 to December 1997.[13] The Courts Ruling

The Petition has merit. Lone Issue: Entitlement to Rental Arrearages Petitioner contends that she is not bound by her lease agreement with respondent, because the latter never acquired legal possession of the property. The assignment/waiver of rights executed by Valentine Lim was null and void, as the lease of her father (Fernando) with RCAM had long been terminated for nonpayment of rentals. With the invalidity of the assignment, respondent acquired no rights that she could transmit. Assuming arguendo that Valentines lease was still subsisting, petitioner argues that the consent of RCAM should have been obtained. Petitioner further avers that under her Contract with RCAM, she undertook to pay rentals corresponding to the holdover period. Hence, she would in effect be paying the rental twice, if she were still to pay respondent. The latter would be unjustly enriched at petitioners expense, which should not be allowed by the Court. The assignment of a lease by the lessee involves a transfer of rights and obligations pertaining to the contract; hence, the consent of the lessor is necessary.[14] Article 1649 of the Civil Code is explicit: Art. 1649. The lessee cannot assign the lease without the consent of the lessor, unless there is a stipulation to the contrary. The objective of the law in prohibiting the assignment of the lease without the lessors consent is to protect the owner or lessor of the leased property.[15] In the case of cession or assignment of lease rights on real property, there is a novation by the substitution of the person of one of the parties -- the lessee.[16] The personality of the lessee, who dissociates from the lease, disappears; only two persons remain in the juridical relation -- the lessor and the assignee who is converted into the new lessee.[17] In the instant case, RCAM never assented to the assignment of the lease. This is apparent from the December 11, 1997 letter[18] of its counsel, Atty. Socrates R. Rivera, stating that Fernando Lim was no longer its tenant for his failure to pay the rentals as of August 1988. As a rule, this letter may not necessarily result in the cessation of Mr. Fernandos right to possess the leased premises. Under the law, mere nonpayment of rentals without the lessors demand to pay and vacate is not sufficient to oust the lessee from the leased pre mises.[19] The letter, however, demonstrates the lessors lack of consent to the assignment. There is no evidence to show that RCAM subsequently agreed to the substitution of the original lessee by respondent. In fact, the only lessee it ever recognized was Fernando Lim. In the same letter, it was stated that neither [petitioner] nor [respondent] have the right to [possess] said apartment considering that it [was] Mr. Fernando Lopez Lim whom our client RCAM ha[d] contractual relationship; unfortunately said tenant [has ceased] to be such. Neither does respondent appear to have paid monthly rents to RCAM to apprise it sufficiently of her occupation of the subject premises. Hence, it cannot be charged with knowledge of, much less implied consent to, this fact. As against RCAM, which has not consented to the assignment, respondent-assignee obtains no rights to the leased premises. Consequently, the sublease between her and petitioner is not binding on it. With the abandonment of the lease by the original lessee through his unauthorized assignment, the right to the possession of the apartment reverted to the owner. Being the owner, RCAM enjoys the prerogative to enter into a new lease contract over the property with anyone it chooses.[20] Unfortunately for respondent, it chose to grant to petitioner leasehold rights to the subject premises by virtue of the Contract entered into on March 3, 1998. It

was agreed thereunder that petitioner would pay RCAM reasonable compensation for the entire period of her occupancy of the property. To allow respondent to receive from petitioner rental arrearages for the period September 1996 to December 1997, notwithstanding the latters agreement with the owner to pay rent for her occupancy of the property, would constitute unjust enrichment at the expense of petitioner. Under Article 22 of the Civil Code, there is unjust enrichment when (1) a person is unjustly benefited, and (2) such benefit is derived at the expense of or with damages to another.[21] Prior to the March 3, 1998 Contract, petitioner and respondent were technically strangers to the property; both were unlawfully withholding its possession from the owner. Petitioner cannot therefore be faulted in assuming to pay a reasonable value for her occupancy of the property as a sign of good faith. On the other hand, nonpayment of rentals of respondent to RCAM -- notwithstanding her receipt from petitioner of the rental covering the term of the sublease contract -- is indicative of bad faith. Having assumed to pay the rentals to RCAM, petitioner should no longer be required to pay rental arrearages to respondent. To do so would be to sanction unjust enrichment in favor of respondent and to cause unjust poverty to the petitioner. A double burden would be imposed upon the latter, because she would be paying twice for her use of the same premises for the same period of time. We are not unmindful of the standing rule that a lessee is estopped or prevented from disputing the title of the landlord in an action for recovery of possession of the leased premises.[22] In Geminiano v. Court of Appeals,[23] we stated: x x x. The private respondents, as lessees who had undisturbed possession for the entire term under the lease, are then estopped to deny their landlords title, or to assert a better title not only in themselves, but also in some third person while they remain in possession of the leased premises and until they surrender possession to the landlord. This estoppel applies even though the lessor had no title at the time the relation of lessor and lessee was created, and may be asserted not only by the original lessor, but also by those who succeed to his title.[24] Indeed, the relation of lessor and lessee does not depend on the formers title but on the agreement between the parties, followed by the possession of the premises by the lessee under such agreement.[25] As long as the latter remains in undisturbed possession, it is immaterial whether the lessor has a valid title -- or any title at all -- at the time the relationship was entered into.[26] Between the present parties, the lease -- which was actually a sublease -- was effective. And respondent had a colorable right to lease the premises by virtue of the assignment even if, as against the owner, both the assignment and the sublease were ineffectual. However, considering the peculiar circumstances availing in the present case, equity demands that such rule be relaxed. As discussed earlier, it would be grossly unjust if, after having paid the owner prior rentals for June 1996 to December 1997, petitioner would still be required to pay again the same rental arrearages to respondent for the latters retention of the property after the termination of sublease contract. Note that the sublease had already expired, and that the arrearages refer to a subsequent period not covered by the said sublease. It is worth reminding everyone of our pronouncement in Air Manila v. CIR:[27] Equity as the complement of legal jurisdiction seeks to reach and to complete justice where courts of law, through the inflexibility of their rules and want of power to adapt their judgments to the special circumstances of cases, are incompetent to do so. Equity regards the spirit and not the letter, the intent and not the form, the substance rather than the circumstance, as it is variously expressed by different courts.

WHEREFORE, the Petition is GRANTED and the assailed Decision and Resolution SET ASIDE. The dispositive portion of the August 14, 1998 Decision of the Metropolitan Trial Court of Manila is hereby REINSTATED. No costs. SO ORDERED.

FIRST DIVISION

CHAMBER OF REAL ESTATE AND BUILDERS ASSOCIATIONS, INC. (CREBA), Petitioner,

G.R. No. 183409

Present:

CORONA, C.J., Chairperson, - versus VELASCO, JR., LEONARDO DE-CASTRO, DEL CASTILLO, and THE SECRETARY OF AGRARIAN REFORM, Respondent. PEREZ, JJ.

Promulgated: June 18, 2010 x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

PEREZ, J.:

This case is a Petition for Certiorari and Prohibition (with application for temporary restraining order and/or writ of preliminary injunction) under Rule 65 of the 1997 Revised Rules of Civil Procedure, filed by herein petitioner Chamber of Real Estate and Builders Associations, Inc. (CREBA) seeking to nullify and prohibit the enforcement of Department of Agrarian Reform (DAR) Administrative Order (AO) No. 01-02, as amended by DAR AO No. 0507,ii[1] and DAR Memorandum No. 88,ii[2] for having been issued by the Secretary of Agrarian Reform with grave abuse of discretion amounting to lack or excess of jurisdiction as some provisions of the aforesaid administrative issuances are illegal and unconstitutional.

Petitioner CREBA, a private non-stock, non-profit corporation duly organized and existing under the laws of the Republic of the Philippines, is the umbrella organization of some 3,500 private corporations, partnerships, single proprietorships and individuals directly or indirectly involved in land and housing development, building and infrastructure construction, materials production and supply, and services in the various related fields of engineering, architecture, community planning and development financing. The Secretary of Agrarian Reform is named respondent as he is the duly appointive head of the DAR whose administrative issuances are the subject of this petition.

The Antecedent Facts

The Secretary of Agrarian Reform issued, on 29 October 1997, DAR AO No. 07-97,ii[3] entitled Omnibus Rules and Procedures Governing Conversion of Agricultural Lands to NonAgricultural Uses, which consolidated all existing implementing guidelines related to land use conversion. The aforesaid rules embraced all private agricultural lands regardless of tenurial arrangement and commodity produced, and all untitled agricultural lands and agricultural lands reclassified by Local Government Units (LGUs) into non-agricultural uses after 15 June 1988.

Subsequently, on 30 March 1999, the Secretary of Agrarian Reform issued DAR AO No. 01-99,ii[4] entitled Revised Rules and Regulations on the Conversion of Agricultural Lands to Non-agricultural Uses, amending and updating the previous rules on land use conversion. Its coverage includes the following agricultural lands, to wit: (1) those to be converted to residential, commercial, industrial, institutional and other non-agricultural purposes; (2) those to be devoted to another type of agricultural activity such as livestock, poultry, and fishpond the effect of which is to exempt the land from the Comprehensive Agrarian Reform Program (CARP) coverage; (3) those to be converted to non-agricultural use other than that previously authorized; and (4) those reclassified to residential, commercial, industrial, or other nonagricultural uses on or after the effectivity of Republic Act No. 6657ii[5] on 15 June 1988 pursuant to Section 20ii[6] of Republic Act No. 7160ii[7] and other pertinent laws and regulations, and are to be converted to such uses.

On 28 February 2002, the Secretary of Agrarian Reform issued another Administrative Order, i.e., DAR AO No. 01-02, entitled 2002 Comprehensive Rules on Land Use Conversion, which further amended DAR AO No. 07-97 and DAR AO No. 01-99, and repealed all issuances inconsistent therewith. The aforesaid DAR AO No. 01-02 covers all applications for conversion from agricultural to non-agricultural uses or to another agricultural use.

Thereafter, on 2 August 2007, the Secretary of Agrarian Reform amended certain provisionsii[8] of DAR AO No. 01-02 by formulating DAR AO No. 05-07, particularly addressing land conversion in time of exigencies and calamities.

To address the unabated conversion of prime agricultural lands for real estate development, the Secretary of Agrarian Reform further issued Memorandum No. 88 on 15 April 2008, which temporarily suspended the processing and approval of all land use conversion applications.

By reason thereof, petitioner claims that there is an actual slow down of housing projects, which, in turn, aggravated the housing shortage, unemployment and illegal squatting problems to the substantial prejudice not only of the petitioner and its members but more so of the whole nation.

Hence, this petition.

The Issues

In its Memorandum, petitioner posits the following issues:

I.

WHETHER THE DAR SECRETARY HAS JURISDICTION OVER LANDS THAT HAVE BEEN RECLASSIFIED AS RESIDENTIAL, COMMERCIAL, INDUSTRIAL, OR FOR OTHER NON-AGRICULTURAL USES.

II.

WHETHER THE DAR SECRETARY ACTED IN EXCESS OF HIS JURISDICTION AND GRAVELY ABUSED HIS DISCRETION BY ISSUING AND ENFORCING [DAR AO NO. 01-02, AS AMENDED] WHICH SEEK TO REGULATE RECLASSIFIED LANDS.

III.

WHETHER [DAR AO NO. 01-02, AS AMENDED] VIOLATE[S] THE LOCAL AUTONOMY OF LOCAL GOVERNMENT UNITS.

IV.

WHETHER [DAR AO NO. 01-02, AS AMENDED] VIOLATE[S] THE DUE PROCESS AND EQUAL PROTECTION CLAUSE[S] OF THE CONSTITUTION.

V.

WHETHER MEMORANDUM NO. 88 IS A VALID EXERCISE OF POLICE POWER.ii[9]

The subject of the submission that the DAR Secretary gravely abused his discretion is AO No. 01-02, as amended, which states:

Section 3. Applicability of Rules. These guidelines shall apply to all applications for conversion, from agricultural to non-agricultural uses or to another agricultural use, such as: xxxx 3.4 Conversion of agricultural lands or areas that have been reclassified by the LGU or by way of a Presidential Proclamation, to residential, commercial, industrial, or other nonagricultural uses on or after the effectivity of RA 6657 on 15 June 1988, x x x. [Emphasis supplied].

Petitioner holds that under Republic Act No. 6657 and Republic Act No. 8435,ii[10] the term agricultural lands refers to lands devoted to o r suitable for the cultivation of the soil, planting of crops, growing of fruit trees, raising of livestock, poultry or fish, including the harvesting of such farm products, and other farm activities and practices performed by a farmer in conjunction with such farming operations done by a person whether natural or juridical, and not classified by the law as mineral, forest, residential, commercial or industrial land. When the Secretary of Agrarian Reform, however, issued DAR AO No. 01-02, as amended, he included in the definition of agricultural lands lands not reclassified as residential, commercial, industrial or other non-agricultural uses before 15 June 1988. In effect, lands

reclassified from agricultural to residential, commercial, industrial, or other non-agricultural uses after 15 June 1988 are considered to be agricultural lands for purposes of conversion, redistribution, or otherwise. In so doing, petitioner avows that the Secretary of Agrarian

Reform acted without jurisdiction as he has no authority to expand or enlarge the legal

signification of the term agricultural lands through DAR AO No. 01-02.

Being a mere

administrative issuance, it must conform to the statute it seeks to implement, i.e., Republic Act No. 6657, or to the Constitution, otherwise, its validity or constitutionality may be questioned.

In the same breath, petitioner contends that DAR AO No. 01-02, as amended, was made in violation of Section 65ii[11] of Republic Act No. 6657 because it covers all applications for conversion from agricultural to non-agricultural uses or to other agricultural uses, such as the conversion of agricultural lands or areas that have been reclassified by the LGUs or by way of Presidential Proclamations, to residential, commercial, industrial or other non-agricultural uses on or after 15 June 1988. According to petitioner, there is nothing in Section 65 of Republic Act No. 6657 or in any other provision of law that confers to the DAR the jurisdiction or authority to require that non-awarded lands or reclassified lands be submitted to its conversion authority. Thus, in issuing and enforcing DAR AO No. 01-02, as amended, the Secretary of Agrarian Reform acted with grave abuse of discretion amounting to lack or excess of jurisdiction.

Petitioner further asseverates that Section 2.19,ii[12] Article I of DAR AO No. 01-02, as amended, making reclassification of agricultural lands subject to the requirements and procedure for land use conversion, violates Section 20 of Republic Act No. 7160, because it was not provided therein that reclassification by LGUs shall be subject to conversion procedures or requirements, or that the DARs approval or clearance must be secured to effect reclassification. The said Section 2.19 of DAR AO No. 01-02, as amended, also contravenes the constitutional mandate on local autonomy under Section 25,ii[13] Article II and Section 2,ii[14] Article X of the 1987 Philippine Constitution.

Petitioner similarly avers that the promulgation and enforcement of DAR AO No. 01-02, as amended, constitute deprivation of liberty and property without due process of law. There is deprivation of liberty and property without due process of law because under DAR AO No. 0102, as amended, lands that are not within DARs jurisdiction are unjus tly, arbitrarily and oppressively prohibited or restricted from legitimate use on pain of administrative and criminal penalties. More so, there is discrimination and violation of the equal protection clause of the Constitution because the aforesaid administrative order is patently biased in favor of the peasantry at the expense of all other sectors of society.

As its final argument, petitioner avows that DAR Memorandum No. 88 is not a valid exercise of police power for it is the prerogative of the legislature and that it is unconstitutional because it suspended the land use conversion without any basis.

The Courts Ruling

This petition must be dismissed.

Primarily, although this Court, the Court of Appeals and the Regional Trial Courts have concurrent jurisdiction to issue writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus and injunction, such concurrence does not give the petitioner unrestricted freedom of choice of court forum.ii[15] In Heirs of Bertuldo Hinog v. Melicor,ii[16] citing People v. Cuaresma,ii[17] this Court made the following pronouncements:

This Court's original jurisdiction to issue writs of certiorari is not exclusive. It is shared by this Court with Regional Trial Courts and with the Court of Appeals. This concurrence of jurisdiction is not, however, to be taken as according to parties seeking any of the writs an absolute, unrestrained freedom of choice of the court to which application therefor will be directed. There is after all a hierarchy of courts. That hierarchy is determinative of the venue of appeals, and also serves as a general determinant of the appropriate forum for petitions for the extraordinary writs. A becoming regard for that judicial hierarchy most certainly indicates that petitions for the issuance of extraordinary writs against first level (inferior) courts should be filed with the Regional Trial Court, and those against the latter, with the Court of Appeals. A direct invocation of the Supreme Courts original jurisdiction to issue these writs should be allowed only when there are special and important reasons therefor, clearly and specifically set out in the petition. This is [an] established policy. It is a policy necessary to prevent inordinate demands upon the Courts time and attention which are better devoted to those matters within its exclusive jurisdiction, and to prevent further over-crowding of the Courts docket.ii[18] (Emphasis supplied.)

The rationale for this rule is two-fold: (a) it would be an imposition upon the precious time of this Court; and (b) it would cause an inevitable and resultant delay, intended or otherwise, in the adjudication of cases, which in some instances had to be remanded or referred to the lower court as the proper forum under the rules of procedure, or as better equipped to resolve the issues because this Court is not a trier of facts.ii[19]

This Court thus reaffirms the judicial policy that it will not entertain direct resort to it unless the redress desired cannot be obtained in the appropriate courts, and exceptional and compelling circumstances, such as cases of national interest and of serious implications, justify the availment of the extraordinary remedy of writ of certiorari, calling for the exercise of its primary jurisdiction.ii[20]

Exceptional and compelling circumstances were held present in the following cases: (a) Chavez v. Romulo,ii[21] on citizens right to bear arms; (b) Government of [the] United States of America v. Hon. Purganan,ii[22] on bail in extradition proceedings; (c) Commission on Elections v. Judge Quijano-Padilla,ii[23] on government contract involving modernization and

computerization of voters registration list; (d) Buklod ng Kawaning EIIB v. Hon. Sec. Zamora,ii[24] on status and existence of a public office; and (e) Hon. Fortich v. Hon. Corona,ii[25] on the so-called Win-Win Resolution of the Office of the President which modified the approval of the conversion to agro-industrial area.ii[26]

In the case at bench, petitioner failed to specifically and sufficiently set forth special and important reasons to justify direct recourse to this Court and why this Court should give due course to this petition in the first instance, hereby failing to fulfill the conditions set forth in Heirs of Bertuldo Hinog v. Melicor.ii[27] The present petition should have been initially filed in the Court of Appeals in strict observance of the doctrine on the hierarchy of courts. Failure to do so is sufficient cause for the dismissal of this petition.

Moreover, although the instant petition is styled as a Petition for Certiorari, in essence, it seeks the declaration by this Court of the unconstitutionality or illegality of the questioned DAR AO No. 01-02, as amended, and Memorandum No. 88. It, thus, partakes of the nature of a Petition for Declaratory Relief over which this Court has only appellate, not original, jurisdiction.ii[28] Section 5, Article VIII of the 1987 Philippine Constitution provides:

Sec. 5. The Supreme Court shall have the following powers:

(1)

Exercise original jurisdiction over cases affecting ambassadors, other public ministers and consuls, and over petitions for certiorari, prohibition, mandamus, quo warranto, and habeas corpus. Review, revise, reverse, modify, or affirm on appeal or certiorari as the law or the Rules of Court may provide, final judgments and orders of lower courts in:

(2)

(a)

All cases in which the constitutionality or validity of any treaty, international or executive agreement, law, presidential decree, proclamation, order, instruction, ordinance, or regulation is in question. (Emphasis supplied.)

With that, this Petition must necessarily fail because this Court does not have original jurisdiction over a Petition for Declaratory Relief even if only questions of law are involved.

Even if the petitioner has properly observed the doctrine of judicial hierarchy, this Petition is still dismissible.

The special civil action for certiorari is intended for the correction of errors of jurisdiction only or grave abuse of discretion amounting to lack or excess of jurisdiction. Its principal office is only to keep the inferior court within the parameters of its jurisdiction or to prevent it from committing such a grave abuse of discretion amounting to lack or excess of jurisdiction.ii[29]

The essential requisites for a Petition for Certiorari under Rule 65 are: (1) the writ is directed against a tribunal, a board, or an officer exercising judicial or quasi-judicial functions; (2) such tribunal, board, or officer has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction; and (3) there is no appeal or any plain, speedy, and adequate remedy in the ordinary course of law.ii[30]

Excess of jurisdiction as distinguished from absence of jurisdiction means that an act, though within the general power of a tribunal, board or officer, is not authorized and invalid

with respect to the particular proceeding, because the conditions which alone authorize the exercise of the general power in respect of it are wanting.ii[31] Without jurisdiction means lack or want of legal power, right or authority to hear and determine a cause or causes, considered either in general or with reference to a particular matter. It means lack of power to exercise authority.ii[32] Grave abuse of discretion implies such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction or, in other words, where the power is exercised in an arbitrary manner by reason of passion, prejudice, or personal hostility, and it must be so patent or gross as to amount to an evasion of a positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law.ii[33]

In the case before this Court, the petitioner fails to meet the above-mentioned requisites for the proper invocation of a Petition for Certiorari under Rule 65. The Secretary of Agrarian Reform in issuing the assailed DAR AO No. 01-02, as amended, as well as Memorandum No. 88 did so in accordance with his mandate to implement the land use conversion provisions of Republic Act No. 6657. In the process, he neither acted in any judicial or quasi-judicial capacity nor assumed unto himself any performance of judicial or quasi-judicial prerogative. A Petition for Certiorari is a special civil action that may be invoked only against a tribunal, board, or officer exercising judicial functions. Section 1, Rule 65 of the 1997 Revised Rules of Civil Procedure is explicit on this matter, viz.:

SECTION 1. Petition for certiorari. When any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment must be rendered annulling or modifying the proceedings of such tribunal, board or officer.

A tribunal, board, or officer is said to be exercising judicial function where it has the power to determine what the law is and what the legal rights of the parties are, and then undertakes to determine these questions and adjudicate upon the rights of the parties. Quasijudicial function, on the other hand, is a term which applies to the actions, discretion, etc., of public administrative officers or bodies x x x required to investigate facts or ascertain the existence of facts, hold hearings, and draw conclusions from them as a basis for their official action and to exercise discretion of a judicial nature.ii[34]

Before a tribunal, board, or officer may exercise judicial or quasi-judicial acts, it is necessary that there be a law that gives rise to some specific rights of persons or property under which adverse claims to such rights are made, and the controversy ensuing therefrom is brought before a tribunal, board, or officer clothed with power and authority to determine the law and adjudicate the respective rights of the contending parties.ii[35]

The Secretary of Agrarian Reform does not fall within the ambit of a tribunal, board, or officer exercising judicial or quasi-judicial functions. The issuance and enforcement by the Secretary of Agrarian Reform of the questioned DAR AO No. 01-02, as amended, and Memorandum No. 88 were done in the exercise of his quasi-legislative and administrative functions and not of judicial or quasi-judicial functions. In issuing the aforesaid administrative issuances, the Secretary of Agrarian Reform never made any adjudication of rights of the parties. As such, it can never be said that the Secretary of Agrarian Reform had acted with grave abuse of discretion amounting to lack or excess of jurisdiction in issuing and enforcing DAR AO No. 01-02, as amended, and Memorandum No. 88 for he never exercised any judicial or quasi-judicial functions but merely his quasi-legislative and administrative functions.

Furthermore, as this Court has previously discussed, the instant petition in essence seeks the declaration by this Court of the unconstitutionality or illegality of the questioned DAR AO No. 01-02, as amended, and Memorandum No. 88. Thus, the adequate and proper remedy for the petitioner therefor is to file a Petition for Declaratory Relief, which this Court has only appellate and not original jurisdiction. It is beyond the province of certiorari to declare the aforesaid administrative issuances unconstitutional and illegal because certiorari is confined only to the determination of the existence of grave abuse of discretion amounting to lack or excess of jurisdiction. Petitioner cannot simply allege grave abuse of discretion amounting to lack or excess of jurisdiction and then invoke certiorari to declare the aforesaid administrative issuances unconstitutional and illegal. Emphasis must be given to the fact that the writ of certiorari dealt with in Rule 65 of the 1997 Revised Rules of Civil Procedure is a prerogative writ, never demandable as a matter of right, never issued except in the exercise of judicial discretion.ii[36]

At any rate, even if the Court will set aside procedural infirmities, the instant petition should still be dismissed.

Executive Order No. 129-Aii[37] vested upon the DAR the responsibility of implementing the CARP. Pursuant to the said mandate and to ensure the successful

implementation of the CARP, Section 5(c) of the said executive order authorized the DAR to establish and promulgate operational policies, rules and regulations and priorities for agrarian reform implementation. Section 4(k) thereof authorized the DAR to approve or disapprove the conversion, restructuring or readjustment of agricultural lands into nonagricultural uses. Similarly, Section 5(l) of the same executive order has given the DAR the exclusive authority to approve or disapprove conversion of agricultural lands for residential, commercial, industrial, and other land uses as may be provided for by law. Section 7 of the aforesaid executive order clearly provides that the authority and responsibility

for the exercise of the mandate of the [DAR] and the discharge of its powers and functions shall be vested in the Secretary of Agrarian Reform x x x.

Under DAR AO No. 01-02, as amended, lands not reclassified as residential, commercial, industrial or other non-agricultural uses before 15 June 1988 have been included in the definition of agricultural lands. In so doing, the Secretary of Agrarian Reform merely acted within the scope of his authority stated in the aforesaid sections of Executive Order No. 129-A, which is to promulgate rules and regulations for agrarian reform implementation and that includes the authority to define agricultural lands for purposes of land use conversion. Further, the definition of agricultural lands under DAR AO No. 01-02, as amended, merely refers to the category of agricultural lands that may be the subject for conversion to nonagricultural uses and is not in any way confined to agricultural lands in the context of land redistribution as provided for under Republic Act No. 6657.

More so, Department of Justice Opinion No. 44, Series of 1990, which Opinion has been recognized in many cases decided by this Court, clarified that after the effectivity of Republic Act No. 6657 on 15 June 1988 the DAR has been given the authority to approve land conversion.ii[38] Concomitant to such authority, therefore, is the authority to include in the definition of agricultural lands lands not reclassified as residential, commercial, industrial or other non-agricultural uses before 15 June 1988 for purposes of land use conversion.

In the same vein, the authority of the Secretary of Agrarian Reform to include lands not reclassified as residential, commercial, industrial or other non-agricultural uses before 15 June 1988 in the definition of agricultural lands finds basis in jurisprudence. In Ros v. Department of Agrarian Reform,ii[39] this Court has enunciated that after the passage of Republic Act No. 6657, agricultural lands, though reclassified, have to go through the process of conversion,

jurisdiction over which is vested in the DAR. However, agricultural lands, which are already reclassified before the effectivity of Republic Act No. 6657 which is 15 June 1988, are exempted from conversion.ii[40] It bears stressing that the said date of effectivity of Republic Act No. 6657 served as the cut-off period for automatic reclassifications or rezoning of agricultural lands that no longer require any DAR conversion clearance or authority.ii[41] It necessarily follows that any reclassification made thereafter can be the subject of DARs conversion authority. Having recognized the DARs conversion authority over lands

reclassified after 15 June 1988, it can no longer be argued that the Secretary of Agrarian Reform was wrongfully given the authority and power to include lands not reclassified as residential, commercial, industrial or other non-agricultural uses before 15 June 1988 in the definition of agricultural lands. Such inclusion does not unduly expand or enlarge the definition of agricultural lands; instead, it made clear what are the lands that can be the subject of DARs conversion authority, thus, serving the very purpose of the land use conversion provisions of Republic Act No. 6657.

The argument of the petitioner that DAR AO No. 01-02, as amended, was made in violation of Section 65 of Republic Act No. 6657, as it covers even those non-awarded lands and reclassified lands by the LGUs or by way of Presidential Proclamations on or after 15 June 1988 is specious. As explained in Department of Justice Opinion No. 44, series of 1990, it is true that the DARs express power over land use conversion provided for under Section 65 of Republic Act No. 6657 is limited to cases in which agricultural lands already awarded have, after five years, ceased to be economically feasible and sound for agricultural purposes, or the locality has become urbanized and the land will have a greater economic value for residential, commercial or industrial purposes. To suggest, however, that these are the only instances that the DAR can require conversion clearances would open a loophole in Republic Act No. 6657 which every landowner may use to evade compliance with the agrarian reform program. It should logically follow, therefore, from the said departments express duty and function to execute and enforce the said statute that any reclassification of a private land as a residential,

commercial or industrial property, on or after the effectivity of Republic Act No. 6657 on 15 June 1988 should first be cleared by the DAR.ii[42]

This Court held in Alarcon v. Court of Appealsii[43] that reclassification of lands does not suffice. Conversion and reclassification differ from each other. Conversion is the act of changing the current use of a piece of agricultural land into some other use as approved by the DAR while reclassification is the act of specifying how agricultural lands shall be utilized for non-agricultural uses such as residential, industrial, and commercial, as embodied in the land use plan, subject to the requirements and procedures for land use conversion. In view thereof, a mere reclassification of an agricultural land does not automatically allow a landowner to change its use. He has to undergo the process of conversion before he is permitted to use the

agricultural land for other purposes.ii[44]

It is clear from the aforesaid distinction between reclassification and conversion that agricultural lands though reclassified to residential, commercial, industrial or other nonagricultural uses must still undergo the process of conversion before they can be used for the purpose to which they are intended.

Nevertheless, emphasis must be given to the fact that DARs conversion authority can only be exercised after the effectivity of Republic Act No. 6657 on 15 June 1988.ii[45] The said date served as the cut-off period for automatic reclassification or rezoning of agricultural lands that no longer require any DAR conversion clearance or authority.ii[46] Thereafter, reclassification of agricultural lands is already subject to DARs conversion authority. Reclassification alone will not suffice to use the agricultural lands for other purposes. Conversion is needed to change the current use of reclassified agricultural lands.

It is of no moment whether the reclassification of agricultural lands to residential, commercial, industrial or other non-agricultural uses was done by the LGUs or by way of Presidential Proclamations because either way they must still undergo conversion process. It bears stressing that the act of reclassifying agricultural lands to non-agricultural uses simply specifies how agricultural lands shall be utilized for non-agricultural uses and does not automatically convert agricultural lands to non-agricultural uses or for other purposes. As explained in DAR Memorandum Circular No. 7, Series of 1994, cited in the 2009 case of Roxas & Company, Inc. v. DAMBA-NFSW and the Department of Agrarian Reform,ii[47] reclassification of lands denotes their allocation into some specific use and providing for the manner of their utilization and disposition or the act of specifying how agricultural lands shall be utilized for non-agricultural uses such as residential, industrial, or commercial, as embodied in the land use plan. For reclassified agricultural lands, therefore, to be used for the purpose to which they are intended there is still a need to change the current use thereof through the process of conversion. The authority to do so is vested in the DAR, which is mandated to preserve and maintain agricultural lands with increased productivity. Thus, notwithstanding the reclassification of agricultural lands to non-agricultural uses, they must still undergo conversion before they can be used for other purposes.

Even reclassification of agricultural lands by way of Presidential Proclamations to nonagricultural uses, such as school sites, needs conversion clearance from the DAR. We reiterate that reclassification is different from conversion. Reclassification alone will not suffice and does not automatically allow the landowner to change its use. It must still undergo conversion process before the landowner can use such agricultural lands for such purpose.ii[48] Reclassification of agricultural lands is one thing, conversion is another. Agricultural lands that are reclassified to non-agricultural uses do not ipso facto allow the landowner thereof to use the same for such purpose. Stated differently, despite having reclassified into school sites, the

landowner of such reclassified agricultural lands must apply for conversion before the DAR in order to use the same for the said purpose.

Any reclassification, therefore, of agricultural lands to residential, commercial, industrial or other non-agricultural uses either by the LGUs or by way of Presidential Proclamations enacted on or after 15 June 1988 must undergo the process of conversion, despite having undergone reclassification, before agricultural lands may be used for other purposes.

It is different, however, when through Presidential Proclamations public agricultural lands have been reserved in whole or in part for public use or purpose, i.e., public school, etc., because in such a case, conversion is no longer necessary. As held in Republic v.

Estonilo,ii[49] only a positive act of the President is needed to segregate or reserve a piece of land of the public domain for a public purpose. As such, reservation of public agricultural lands for public use or purpose in effect converted the same to such use without undergoing any conversion process and that they must be actually, directly and exclusively used for such public purpose for which they have been reserved, otherwise, they will be segregated from the reservations and transferred to the DAR for distribution to qualified beneficiaries under the CARP.ii[50] More so, public agricultural lands already reserved for public use or purpose no longer form part of the alienable and disposable lands of the public domain suitable for agriculture.ii[51] Hence, they are outside the coverage of the CARP and it logically follows that they are also beyond the conversion authority of the DAR.

Clearly from the foregoing, the Secretary of Agrarian Reform did not act without jurisdiction or in excess of jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction in (1) including lands not reclassified as residential, commercial, industrial or other non-agricultural uses before 15 June 1988 in the definition of agricultural

lands under DAR AO No. 01-02, as amended, and; (2) issuing and enforcing DAR AO No. 0102, as amended, subjecting to DARs jurisdiction for convers ion lands which had already been reclassified as residential, commercial, industrial or for other non-agricultural uses on or after 15 June 1988.

Similarly, DAR AO No. 01-02, as amended, providing that the reclassification of agricultural lands by LGUs shall be subject to the requirements of land use conversion procedure or that DARs approval or clearance must be secured to effect reclassification, did not violate the autonomy of the LGUs.

Section 20 of Republic Act No. 7160 states that:

SECTION 20. Reclassification of Lands. (a) A city or municipality may, through an ordinance passed by the sanggunian after conducting public hearings for the purpose, authorize the reclassification of agricultural lands and provide for the manner of their utilization or disposition in the following cases: (1) when the land ceases to be economically feasible and sound for agricultural purposes as determined by the Department of Agriculture or (2) where the land shall have substantially greater economic value for residential, commercial, or industrial purposes, as determined by the sanggunian concerned: Provided, That such reclassification shall be limited to the following percentage of the total agricultural land area at the time of the passage of the ordinance: xxxx (3) For fourth to sixth class municipalities, five percent (5%): Provided, further, That agricultural lands distributed to agrarian reform beneficiaries pursuant to Republic Act Numbered Sixty-six hundred fifty-seven (R.A. No. 6657), otherwise known as The Comprehensive Agrarian Reform Law, shall not be affected by the said reclassification and the conversion of such lands into other purposes shall be governed by Section 65 of said Act. xxxx (e) Nothing in this Section shall be construed as repealing, amending, or modifying in any manner the provisions of R.A. No. 6657.

The aforequoted provisions of law show that the power of the LGUs to reclassify agricultural lands is not absolute. The authority of the DAR to approve conversion of

agricultural lands covered by Republic Act No. 6657 to non-agricultural uses has been validly recognized by said Section 20 of Republic Act No. 7160 by explicitly providing therein that, nothing in this section shall be construed as repealing or modifying in any manner the provisions of Republic Act No. 6657.

DAR AO No. 01-02, as amended, does not also violate the due process clause, as well as the equal protection clause of the Constitution. In providing administrative and criminal

penalties in the said administrative order, the Secretary of Agrarian Reform simply implements the provisions of Sections 73 and 74 of Republic Act No. 6657, thus:

Sec. 73. Prohibited Acts and Omissions. The following are prohibited: xxxx
(c) The conversion by any landowner of his agricultural land into any non-agricultural use with intent to avoid the application of this Act to his landholdings and to disposes his tenant farmers of the land tilled by them; xxxx (f) The sale, transfer or conveyance by a beneficiary of the right to use or any other usufructuary right over the land he acquired by virtue of being a beneficiary, in order to circumvent the provisions of this Act. xxxx Sec. 74. Penalties. Any person who knowingly or willfully violates the provisions of this Act shall be punished by imprisonment of not less than one (1) month to not more than three (3) years or a fine of not less than one thousand pesos (P1,000.00) and not more than fifteen thousand pesos (P15,000.00), or both, at the discretion of the court.

If the offender is a corporation or association, the officer responsible therefor shall be criminally liable.

And Section 11 of Republic Act No. 8435, which specifically provides:

Sec. 11. Penalty for Agricultural Inactivity and Premature Conversion. x x x. Any person found guilty of premature or illegal conversion shall be penalized with imprisonment of two (2) to six (6) years, or a fine equivalent to one hundred percent (100%) of the government's investment cost, or both, at the discretion of the court, and an accessory penalty of forfeiture of the land and any improvement thereon. In addition, the DAR may impose the following penalties, after determining, in an administrative proceedings, that violation of this law has been committed: a. Consolation or withdrawal of the authorization for land use conversion; and b. Blacklisting, or automatic disapproval of pending and subsequent conversion applications that they may file with the DAR.

Contrary to petitioners assertions, the administrative and criminal penalties provided for under DAR AO No. 01-02, as amended, are imposed upon the illegal or premature conversion of lands within DARs jurisdiction, i.e., lands not reclassified as residential, commercial, industrial or for other non-agricultural uses before 15 June 1998.

The petitioners argument that DAR Memorandum No. 88 is unconstitutional, as it suspends the land use conversion without any basis, stands on hollow ground.

It bears emphasis that said Memorandum No. 88 was issued upon the instruction of the President in order to address the unabated conversion of prime agricultural lands for real estate

development because of the worsening rice shortage in the country at that time. Such measure was made in order to ensure that there are enough agricultural lands in which rice cultivation and production may be carried into. The issuance of said Memorandum No. 88 was made pursuant to the general welfare of the public, thus, it cannot be argued that it was made without any basis.

WHEREFORE, premises considered, the instant Petition for Certiorari is DISMISSED. Costs against petitioner.

SO ORDERED.