THIRD DIVISION

Aquino vs. Aure

CHICO-NAZARIO, J.:

Before this Court is a Petition for Review on Certiorari[if !supportFootnotes][2][endif] under Rule 45 of the
Revised Rules of Court filed by petitioner Librada M. Aquino (Aquino), seeking the reversal and the setting
aside of the Decision[if !supportFootnotes][3][endif] dated 17 October 2001 and the Resolution[if !supportFootnotes][4][endif]
dated 8 May 2002 of the Court of Appeals in CA-G.R. SP No. 63733. The appellate court, in its assailed
Decision and Resolution, reversed the Decision[if !supportFootnotes][5][endif] of the Regional Trial Court (RTC) of
Quezon City, Branch 88, affirming the Decision[if !supportFootnotes][6][endif] of the Metropolitan Trial Court (MeTC) of
Quezon City, Branch 32, which dismissed respondent Ernesto Aures (Aure) complaint for ejectment on the
ground, inter alia, of failure to comply with barangay conciliation proceedings.

The subject of the present controversy is a parcel of land situated in Roxas District, Quezon City,
with an area of 449 square meters and covered by Transfer Certificate of Title (TCT) No. 205447 registered
with the Registry of Deeds of Quezon City (subject property).[if !supportFootnotes][7][endif]

Aure and E.S. Aure Lending Investors, Inc. (Aure Lending) filed a Complaint for ejectment against
Aquino before the MeTC docketed as Civil Case No. 17450. In their Complaint, Aure and Aure Lending
alleged that they acquired the subject property from Aquino and her husband Manuel (spouses Aquino) by
virtue of a Deed of Sale[if !supportFootnotes][8][endif] executed on 4 June 1996. Aure claimed that after the spouses
Aquino received substantial consideration for the sale of the subject property, they refused to vacate the
same.[if !supportFootnotes][9][endif]

In her Answer,[if !supportFootnotes][10][endif] Aquino countered that the Complaint in Civil Case No. 17450
lacks cause of action for Aure and Aure Lending do not have any legal right over the subject
property. Aquino admitted that there was a sale but such was governed by the Memorandum of
Agreement[if !supportFootnotes][11][endif] (MOA) signed by Aure. As stated in the MOA, Aure shall secure a loan
from a bank or financial institution in his own name using the subject property as collateral and turn over
the proceeds thereof to the spouses Aquino. However, even after Aure successfully secured a loan, the
spouses Aquino did not receive the proceeds thereon or benefited therefrom.

On 20 April 1999, the MeTC rendered a Decision in Civil Case No. 17450 in favor of Aquino and
dismissed the Complaint for ejectment of Aure and Aure Lending for non-compliance with the barangay
conciliation process, among other grounds. The MeTC observed that Aure and Aquino are residents of the
same barangay but there is no showing that any attempt has been made to settle the case amicably at the
barangay level. The MeTC further observed that Aure Lending was improperly included as plaintiff in Civil
Case No. 17450 for it did not stand to be injured or benefited by the suit. Finally, the MeTC ruled that since
the question of ownership was put in issue, the action was converted from a mere detainer suit to one
incapable of pecuniary estimation which properly rests within the original exclusive jurisdiction of the
RTC. The dispositive portion of the MeTC Decision reads:

WHEREFORE, premises considered, let this case be, as it is, hereby ordered
DISMISSED. [Aquinos] counterclaim is likewise dismissed.[if !supportFootnotes][12][endif]

On appeal, the RTC affirmed the dismissal of the Complaint on the same ground that the dispute
was not brought before the Barangay Council for conciliation before it was filed in court. In a Decision
dated 14 December 2000, the RTC stressed that the barangay conciliation process is a conditio sine qua
non for the filing of an ejectment complaint involving residents of the same barangay, and failure to comply
therewith constitutes sufficient cause for the dismissal of the action. The RTC likewise validated the ruling
of the MeTC that the main issue involved in Civil Case No. 17450 is incapable of pecuniary estimation and
cognizable by the RTC. Hence, the RTC ruled:

WHEREFORE, finding no reversible error in the appealed judgment, it is

hereby affirmed in its entirety.[if !supportFootnotes][13][endif]

Aures Motion for Reconsideration was denied by the RTC in an Order[if !supportFootnotes][14][endif] dated 27
February 2001.

Undaunted, Aure appealed the adverse RTC Decision with the Court of Appeals arguing that the
lower court erred in dismissing his Complaint for lack of cause of action. Aure asserted that misjoinder of
parties was not a proper ground for dismissal of his Complaint and that the MeTC should have only ordered
the exclusion of Aure Lending as plaintiff without prejudice to the continuation of the proceedings in Civil
Case No. 17450 until the final determination thereof. Aure further asseverated that mere allegation of
ownership should not divest the MeTC of jurisdiction over the ejectment suit since jurisdiction over the
subject matter is conferred by law and should not depend on the defenses and objections raised by the
parties. Finally, Aure contended that the MeTC erred in dismissing his Complaint with prejudice on the
ground of non-compliance with barangay conciliation process. He was not given the opportunity to rectify
the procedural defect by going through the barangay mediation proceedings and, thereafter, refile the
Complaint.[if !supportFootnotes][15][endif]

On 17 October 2001, the Court of Appeals rendered a Decision, reversing the MeTC and RTC
Decisions and remanding the case to the MeTC for further proceedings and final determination of the
substantive rights of the parties. The appellate court declared that the failure of Aure to subject the matter
to barangay conciliation is not a jurisdictional flaw and it will not affect the sufficiency of Aures Complaint
since Aquino failed to seasonably raise such issue in her Answer. The Court of Appeals further ruled that
mere allegation of ownership does not deprive the MeTC of jurisdiction over the ejectment case for
jurisdiction over the subject matter is conferred by law and is determined by the allegations advanced by
the plaintiff in his complaint. Hence, mere assertion of ownership by the defendant in an ejectment case
will not oust the MeTC of its summary jurisdiction over the same. The decretal part of the Court of Appeals
Decision reads:

WHEREFORE, premises considered, the petition is hereby GRANTED - and

the decisions of the trial courts below REVERSED and SET ASIDE. Let the records be
remanded back to the court a quo for further proceedings for an eventual decision of
the substantive rights of the disputants.[if !supportFootnotes][16][endif]

In a Resolution dated 8 May 2002, the Court of Appeals denied the Motion for Reconsideration

interposed by Aquino for it was merely a rehash of the arguments set forth in her previous pleadings which
were already considered and passed upon by the appellate court in its assailed Decision.

Aquino is now before this Court via the Petition at bar raising the following issues:

I.

WHETHER OR NOT NON-COMPLIANCE WITH THE BARANGAY CONCILIATION

PROCEEDINGS IS A JURISDICTIONAL DEFECT THAT WARRANTS THE
DISMISSAL OF THE COMPLAINT.

II.
WHETHER OR NOT ALLEGATION OF OWNERSHIP OUSTS THE MeTC OF ITS JURISDICTION
OVER AN EJECTMENT CASE.

The barangay justice system was established primarily as a means of easing up the congestion
of cases in the judicial courts. This could be accomplished through a proceeding before the barangay
courts which, according to the conceptor of the system, the late Chief Justice Fred Ruiz Castro, is
essentially arbitration in character, and to make it truly effective, it should also be compulsory. With this
primary objective of the barangay justice system in mind, it would be wholly in keeping with the underlying
philosophy of Presidential Decree No. 1508, otherwise known as the Katarungang Pambarangay Law, and
the policy behind it would be better served if an out-of-court settlement of the case is reached voluntarily by
the parties.[if !supportFootnotes][17][endif]

The primordial objective of Presidential Decree No. 1508 is to reduce the number of court litigations
and prevent the deterioration of the quality of justice which has been brought by the indiscriminate filing of
cases in the courts.[if !supportFootnotes][18][endif] To ensure this objective, Section 6 of Presidential Decree No.
1508[if !supportFootnotes][19][endif] requires the parties to undergo a conciliation process before the Lupon Chairman
or the Pangkat ng Tagapagkasundo as a precondition to filing a complaint in court subject to certain
exceptions[if !supportFootnotes][20][endif] which are inapplicable to this case. The said section has been declared
compulsory in nature.[if !supportFootnotes][21][endif]

Presidential Decree No. 1508 is now incorporated in Republic Act No. 7160, otherwise known as
The Local Government Code, which took effect on 1 January 1992.

The pertinent provisions of the Local Government Code making conciliation a precondition to
filing of complaints in court, read:

SEC. 412. Conciliation.- (a) Pre-condition to filing of complaint in court. No

complaint, petition, action, or proceeding involving any matter within the authority of the

lupon shall be filed or instituted directly in court or any other government office for
adjudication, unless there has been a confrontation between the parties before the
lupon chairman or the pangkat, and that no conciliation or settlement has been reached
as certified by the lupon secretary or pangkat secretary as attested to by the lupon
chairman or pangkat chairman or unless the settlement has been repudiated by the
parties thereto.

(b) Where parties may go directly to court. The parties may go directly to court in the following
instances:

(1) Where the accused is under detention;

(2) Where a person has otherwise been deprived of personal liberty calling for
habeas corpus proceedings;

(3) Where actions are coupled with provisional remedies such as preliminary
injunction, attachment, delivery of personal property, and support pendente lite; and

(4) Where the action may otherwise be barred by the statute of limitations.

(c) Conciliation among members of indigenous cultural communities. The customs and traditions
of indigenous cultural communities shall be applied in settling disputes between members of the cultural
communities.

SEC. 408. Subject Matter for Amicable Settlement; Exception Therein. The
lupon of each barangay shall have authority to bring together the parties actually
residing in the same city or municipality for amicable settlement of all disputes except:

(a)

Where one party is the government or any subdivision or instrumentality

thereof;

(b) Where one party is a public officer or employee, and the dispute relates to
the performance of his official functions;

(c) Offenses punishable by imprisonment exceeding one (1) year or a fine

exceeding Five thousand pesos (P5,000.00);

(d) Offenses where there is no private offended party;

(e) Where the dispute involves real properties located in different cities or
municipalities unless the parties thereto agree to submit their differences to amicable
settlement by an appropriate lupon;

(f) Disputes involving parties who actually reside in barangays of different

cities or municipalities, except where such barangay units adjoin each other and the
parties thereto agree to submit their differences to amicable settlement by an
appropriate lupon;

(g) Such other classes of disputes which the President may determine in the
interest of justice or upon the recommendation of the Secretary of Justice.

There is no dispute herein that the present case was never referred to the Barangay Lupon for
conciliation before Aure and Aure Lending instituted Civil Case No. 17450. In fact, no allegation of such
barangay conciliation proceedings was made in Aure and Aure Lendings Complaint before the MeTC. The
only issue to be resolved is whether non-recourse to the barangay conciliation process is a jurisdictional
flaw that warrants the dismissal of the ejectment suit filed with the MeTC.

Aquino posits that failure to resort to barangay conciliation makes the action for ejectment
premature and, hence, dismissible. She likewise avers that this objection was timely raised during the pretrial and even subsequently in her Position Paper submitted to the MeTC.

We do not agree.

It is true that the precise technical effect of failure to comply with the requirement of Section 412
of the Local Government Code on barangay conciliation (previously contained in Section 5 of Presidential
Decree No. 1508) is much the same effect produced by non-exhaustion of administrative remedies -- the
complaint becomes afflicted with the vice of pre-maturity; and the controversy there alleged is not ripe for
judicial determination. The complaint becomes vulnerable to a motion to dismiss.[if
!supportFootnotes][22][endif]
Nevertheless, the conciliation process is not a jurisdictional requirement, so that
non-compliance therewith cannot affect the jurisdiction which the court has otherwise acquired
over the subject matter or over the person of the defendant.[if !supportFootnotes][23][endif]

As

enunciated
!supportFootnotes][24][endif]
:

in

the

landmark

case

of

Royales

v.

Intermediate

Appellate

Ordinarily, non-compliance with the condition precedent prescribed by P.D.

1508 could affect the sufficiency of the plaintiff's cause of action and make his
complaint vulnerable to dismissal on ground of lack of cause of action or prematurity;
but the same would not prevent a court of competent jurisdiction from exercising
its power of adjudication over the case before it, where the defendants, as in this

Court[if

case, failed to object to such exercise of jurisdiction in their answer and even
during the entire proceedings a quo.

While petitioners could have prevented the trial court from exercising
jurisdiction over the case by seasonably taking exception thereto, they instead invoked
the very same jurisdiction by filing an answer and seeking affirmative relief from it. What
is more, they participated in the trial of the case by cross-examining respondent Planas.
Upon this premise, petitioners cannot now be allowed belatedly to adopt an
inconsistent posture by attacking the jurisdiction of the court to which they had
submitted themselves voluntarily. x x x (Emphasis supplied.)

In the case at bar, we similarly find that Aquino cannot be allowed to attack the jurisdiction of the
MeTC over Civil Case No. 17450 after having submitted herself voluntarily thereto. We have scrupulously
examined Aquinos Answer before the MeTC in Civil Case No. 17450 and there is utter lack of any
objection on her part to any deficiency in the complaint which could oust the MeTC of its jurisdcition.

We thus quote with approval the disquisition of the Court of Appeals:

Moreover, the Court takes note that the defendant [Aquino] herself did not
raise in defense the aforesaid lack of conciliation proceedings in her answer, which
raises the exclusive affirmative defense of simulation. By this acquiescence, defendant
[Aquino] is deemed to have waived such objection. As held in a case of similar
circumstances, the failure of a defendant [Aquino] in an ejectment suit to specifically
allege the fact that there was no compliance with the barangay conciliation procedure
constitutes a waiver of that defense. x x x.[if !supportFootnotes][25][endif]

By Aquinos failure to seasonably object to the deficiency in the Complaint, she is deemed to
have already acquiesced or waived any defect attendant thereto. Consequently, Aquino cannot thereafter
move for the dismissal of the ejectment suit for Aure and Aure Lendings failure to resort to the barangay
conciliation process, since she is already precluded from doing so. The fact that Aquino raised such
objection during the pre-trial and in her Position Paper is of no moment, for the issue of non-recourse to
barangay mediation proceedings should be impleaded in her Answer.

As provided under Section 1, Rule 9 of the 1997 Rules of Civil Procedure:

Sec. 1. Defenses and objections not pleaded. Defenses and objections not pleaded either in a
motion to dismiss or in the answer are deemed waived. However, when it appears from the pleadings
or the evidence on record that the court has no jurisdiction over the subject matter, that there is another
action pending between the same parties for the same cause, or that the action is barred by a prior
judgment or by statute of limitations, the court shall dismiss the claim. (Emphasis supplied.)

While the aforequoted provision applies to a pleading (specifically, an Answer) or a motion to

dismiss, a similar or identical rule is provided for all other motions in Section 8 of Rule 15 of the same Rule
which states:

Sec. 8. Omnibus Motion. - Subject to the provisions of Section 1 of Rule 9, a motion attacking a
pleading, order, judgment, or proceeding shall include all objections then available, and all objections not
so included shall be deemed waived.

The spirit that surrounds the foregoing statutory norm is to require the party filing a pleading or
motion to raise all available exceptions for relief during the single opportunity so that single or multiple
objections may be avoided.[if !supportFootnotes][26][endif] It is clear and categorical in Section 1, Rule 9 of the
Revised Rules of Court that failure to raise defenses and objections in a motion to dismiss or in an answer
is deemed a waiver thereof; and basic is the rule in statutory construction that when the law is clear and
free from any doubt or ambiguity, there is no room for construction or interpretation.[if !supportFootnotes][27][endif] As
has been our consistent ruling, where the law speaks in clear and categorical language, there is no
occasion for interpretation; there is only room for application.[if !supportFootnotes][28][endif] Thus, although Aquinos
defense of non-compliance with Presidential Decree No. 1508 is meritorious, procedurally, such defense is
no longer available for failure to plead the same in the Answer as required by the omnibus motion rule.

Neither could the MeTC dismiss Civil Case No. 17450 motu proprio. The 1997 Rules of Civil
Procedure provide only three instances when the court may motu proprio dismiss the claim, and that is
when the pleadings or evidence on the record show that (1) the court has no jurisdiction over the subject
matter; (2)
there is another cause of action pending between the same parties for the same cause; or
(3) where the action is barred by a prior judgment or by a statute of limitations. Thus, it is clear that a court
may not motu proprio dismiss a case on the ground of failure to comply with the requirement for barangay
conciliation, this ground not being among those mentioned for the dismissal by the trial court of a case on
its own initiative.

Aquino further argues that the issue of possession in the instant case cannot be resolved by the
MeTC without first adjudicating the question of ownership, since the Deed of Sale vesting Aure with the
legal right over the subject property is simulated.

Again, we do not agree. Jurisdiction in ejectment cases is determined by the allegations pleaded
in the complaint. As long as these allegations demonstrate a cause of action either for forcible entry or for
unlawful detainer, the court acquires jurisdiction over the subject matter. This principle holds, even if the
facts proved during the trial do not support the cause of action thus alleged, in which instance the court -after acquiring jurisdiction -- may resolve to dismiss the action for insufficiency of evidence.

The necessary allegations in a Complaint for ejectment are set forth in Section 1, Rule 70 of the
Rules of Court, which reads:

SECTION 1. Who may institute proceedings, and when. Subject to the provisions of the next
succeeding section, a person deprived of the possession of any land or building by force, intimidation,

threat, strategy, or stealth, or a lessor, vendor, vendee, or other person against whom the possession of
any land or building is unlawfully withheld after the expiration or termination of the right to hold possession,
by virtue of any contract, express or implied, or the legal representatives or assigns of any such lessor,
vendor, vendee, or other person may at any time within one (1) year after such unlawful deprivation or
withholding of possession, bring an action in the proper Municipal Trial Court against the person or persons
unlawfully withholding or depriving of possession, or any person or persons claiming under them, for the
restitution of such possession, together with damages and costs.

In the case at bar, the Complaint filed by Aure and Aure Lending on 2 April 1997, alleged as follows:

2. [Aure and Aure Lending] became the owners of a house and lot located at
No. 37 Salazar Street corner Encarnacion Street, B.F. Homes, Quezon City by virtue of
a deed of absolute sale executed by [the spouses Aquino] in favor of [Aure and Aure
Lending] although registered in the name of x x x Ernesto S. Aure; title to the said
property had already been issued in the name of [Aure] as shown by a transfer
Certificate of Title , a copy of which is hereto attached and made an integral part hereof
as Annex A;

3. However, despite the sale thus transferring ownership of the subject premises to [Aure and Aure
Lending] as above-stated and consequently terminating [Aquinos] right of possession over the subject
property, [Aquino] together with her family, is continuously occupying the subject premises notwithstanding
several demands made by [Aure and Aure Lending] against [Aquino] and all persons claiming right under
her to vacate the subject premises and surrender possession thereof to [Aure and Aure Lending] causing
damage and prejudice to [Aure and Aure Lending] and making [Aquinos] occupancy together with those
actually occupying the subject premises claiming right under her, illegal.[if !supportFootnotes][29][endif]

It can be inferred from the foregoing that Aure, together with Aure Lending, sought the
possession of the subject property which was never surrendered by Aquino after the perfection of the Deed
of Sale, which gives rise to a cause of action for an ejectment suit cognizable by the MeTC. Aures
assertion of possession over the subject property is based on his ownership thereof as evidenced by TCT
No. 156802 bearing his name. That Aquino impugned the validity of Aures title over the subject property
and claimed that the Deed of Sale was simulated should not divest the MeTC of jurisdiction over the
ejectment case.[if !supportFootnotes][30][endif]

As extensively discussed by the eminent jurist Florenz D. Regalado in Refugia v. Court of Appeals[if
:

!supportFootnotes][31][endif]

As the law on forcible entry and unlawful detainer cases now stands, even where the defendant
raises the question of ownership in his pleadings and the question of possession cannot be resolved
without deciding the issue of ownership, the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal
Circuit Trial Courts nevertheless have the undoubted competence to resolve the issue of ownership albeit
only to determine the issue of possession.

x x x. The law, as revised, now provides instead that when the question of possession cannot
be resolved without deciding the issue of ownership, the issue of ownership shall be resolved only

to determine the issue of possession. On its face, the new Rule on Summary Procedure was extended
to include within the jurisdiction of the inferior courts ejectment cases which likewise involve the issue of
ownership. This does not mean, however, that blanket authority to adjudicate the issue of ownership in
ejectment suits has been thus conferred on the inferior courts.

At the outset, it must here be stressed that the resolution of this particular
issue concerns and applies only to forcible entry and unlawful detainer cases where the
issue of possession is intimately intertwined with the issue of ownership. It finds no
proper application where it is otherwise, that is, where ownership is not in issue, or
where the principal and main issue raised in the allegations of the complaint as well as
the relief prayed for make out not a case for ejectment but one for recovery of
ownership.

Apropos thereto, this Court ruled in Hilario v. Court of Appeals[if !supportFootnotes][32][endif]:

Thus, an adjudication made therein regarding the issue of ownership should

be regarded as merely provisional and, therefore, would not bar or prejudice an action
between the same parties involving title to the land. The foregoing doctrine is a
necessary consequence of the nature of forcible entry and unlawful detainer cases
where the only issue to be settled is the physical or material possession over the real
property, that is, possession de facto and not possession de jure.

In other words, inferior courts are now conditionally vested with adjudicatory power over the issue of
title or ownership raised by the parties in an ejectment suit. These courts shall resolve the question of
ownership raised as an incident in an ejectment case where a determination thereof is necessary for a
proper and complete adjudication of the issue of possession.[if !supportFootnotes][33][endif]

WHEREFORE, premises considered, the instant Petition is DENIED. The Court of Appeals Decision dated
17 October 2001 and its Resolution dated 8 May 2002 in CA-G.R. SP No. 63733 are hereby
AFFIRMED. Costs against the petitioner.

SO ORDERED.

FIRST DIVISION
G.R. No. 161657

October 4, 2007

REPUBLIC OF THE PHILIPPINES, Petitioner,

vs.

HON. VICENTE A. HIDALGO, in his capacity as Presiding Judge of the Regional Trial Court of
Manila, Branch 37, CARMELO V. CACHERO, in his capacity as Sheriff IV, Regional Trial Court of
Manila, and TARCILA LAPERAL MENDOZA, Respondents.
DECISION
GARCIA, J.:
Via this verified petition for certiorari and prohibition under Rule 65 of the Rules of Court, the Republic of
the Philippines ("Republic," for short), thru the Office of the Solicitor General (OSG), comes to this Court to
nullify and set aside the decision dated August 27, 2003 and other related issuances of the Regional Trial
Court (RTC) of Manila, Branch 37, in its Civil Case No. 99-94075. In directly invoking the Courts original
jurisdiction to issue the extraordinary writs of certiorari and prohibition, without challenge from any of the
respondents, the Republic gave as justification therefor the fact that the case involves an over TWO
BILLION PESO judgment against the State, allegedly rendered in blatant violation of the Constitution, law
and jurisprudence.
By any standard, the case indeed involves a colossal sum of money which, on the face of the assailed
decision, shall be the liability of the national government or, in fine, the taxpayers. This consideration,
juxtaposed with the constitutional and legal questions surrounding the controversy, presents special and
compelling reasons of public interests why direct recourse to the Court should be allowed, as an exception
to the policy on hierarchy of courts.
At the core of the litigation is a 4,924.60-square meter lot once covered by Transfer Certificate of Title
(TCT) No. 118527 of the Registry of Deeds of Manila in the name of the herein private respondent Tarcila
Laperal Mendoza (Mendoza), married to Perfecto Mendoza. The lot is situated at No. 1440 Arlegui St., San
Miguel, Manila, near the Malacaang Palace complex. On this lot, hereinafter referred to as the Arlegui
property, now stands the Presidential Guest House which was home to two (2) former Presidents of the
Republic and now appears to be used as office building of the Office of the President.1
The facts:
Sometime in June 1999, Mendoza filed a suit with the RTC of Manila for reconveyance and the
corresponding declaration of nullity of a deed of sale and title against the Republic, the Register of Deeds
of Manila and one Atty. Fidel Vivar. In her complaint, as later amended, docketed as Civil Case No. 9994075 and eventually raffled to Branch 35 of the court, Mendoza essentially alleged being the owner of the
disputed Arlegui property which the Republic forcibly dispossessed her of and over which the Register of
Deeds of Manila issued TCT No. 118911 in the name of the Republic.
Answering, the Republic set up, among other affirmative defenses, the States immunity from suit.
The intervening legal tussles are not essential to this narration. What is material is that in an Order of
March 17, 2000, the RTC of Manila, Branch 35, dismissed Mendozas complaint. The court would also
deny, in another order dated May 12, 2000, Mendozas omnibus motion for reconsideration. On a petition
for certiorari, however, the Court of Appeals (CA), in CA-G.R. SP No. 60749, reversed the trial courts
assailed orders and remanded the case to the court a quo for further proceedings.2 On appeal, this Court,
in G.R. No. 155231, sustained the CAs reversal action.3
From Branch 35 of the trial court whose then presiding judge inhibited himself from hearing the remanded
Civil Case No. 99-94075, the case was re-raffled to Branch 37 thereof, presided by the respondent judge.
On May 5, 2003, Mendoza filed a Motion for Leave of Court to file a Third Amended Complaint with a copy
of the intended third amended complaint thereto attached. In the May 16, 2003 setting to hear the motion,
the RTC, in open court and in the presence of the Republics counsel, admitted the third amended
complaint, ordered the Republic to file its answer thereto within five (5) days from May 16, 2003 and set a
date for pre-trial.
In her adverted third amended complaint for recovery and reconveyance of the Arlegui property, Mendoza
sought the declaration of nullity of a supposed deed of sale dated July 15, 1975 which provided the
instrumentation toward the issuance of TCT No. 118911 in the name of the Republic. And aside from the
cancellation of TCT No. 118911, Mendoza also asked for the reinstatement of her TCT No. 118527.4 In the

same third amended complaint, Mendoza averred that, since time immemorial, she and her predecessorsin-interest had been in peaceful and adverse possession of the property as well as of the owners duplicate
copy of TCT No. 118527. Such possession, she added, continued "until the first week of July 1975 when a
group of armed men representing themselves to be members of the Presidential Security Group [PSG] of
the then President Ferdinand E. Marcos, had forcibly entered [her] residence and ordered [her] to turn over
to them her Copy of TCT No. 118525 and compelled her and the members of her household to
vacate the same ; thus, out of fear for their lives, [she] handed her Owners Duplicate Certificate Copy of
TCT No. 118527 and had left and/or vacated the subject property." Mendoza further alleged the following:
1. Per verification, TCT No. 118527 had already been cancelled by virtue of a deed of sale in favor of the
Republic allegedly executed by her and her deceased husband on July 15, 1975 and acknowledged before
Fidel Vivar which deed was annotated at the back of TCT No. 118527 under PE: 2035/T-118911 dated July
28, 1975; and
2. That the aforementioned deed of sale is fictitious as she (Mendoza) and her husband have not executed
any deed of conveyance covering the disputed property in favor of the Republic, let alone appearing before
Fidel Vivar.
Inter alia, she prayed for the following:
4. Ordering the Republic to pay plaintiff [Mendoza] a reasonable compensation or rental for the use or
occupancy of the subject property in the sum of FIVE HUNDRED THOUSAND (P500,000.00) PESOS a
month with a five (5%) per cent yearly increase, plus interest thereon at the legal rate, beginning July 1975
until it finally vacates the same;
5. Ordering the Republic to pay plaintiffs counsel a sum equivalent to TWENTY FIVE (25%) PER CENT
of the current value of the subject property and/or whatever amount is recovered under the premises;
Further, plaintiff prays for such other relief, just and equitable under the premises.
On May 21, 2003, the Republic, represented by the OSG, filed a Motion for Extension (With Motion for
Cancellation of scheduled pre-trial). In it, the Republic manifested its inability to simply adopt its previous
answer and, accordingly, asked that it be given a period of thirty (30) days from May 21, 2003 or until June
20, 2003 within which to submit an Answer.5 June 20, 2003 came and went, but no answer was filed. On
July 18, 2003 and again on August 19, 2003, the OSG moved for a 30-day extension at each instance.
The filing of the last two motions for extension proved to be an idle gesture, however, since the trial court
had meanwhile issued an order6 dated July 7, 2003 declaring the petitioner Republic as in default and
allowing the private respondent to present her evidence ex-parte.
The evidence for the private respondent, as plaintiff a quo, consisted of her testimony denying having
executed the alleged deed of sale dated July 15, 1975 which paved the way for the issuance of TCT No.
118911. According to her, said deed is fictitious or inexistent, as evidenced by separate certifications, the
first (Exh. "E"), issued by the Register of Deeds for Manila and the second (Exh. "F"), by the Office of
Clerk of Court, RTC Manila. Exhibit "E"7 states that a copy of the supposed conveying deed cannot, despite
diligent efforts of records personnel, be located, while Exhibit "F"8 states that Fidel Vivar was not a
commissioned notary public for and in the City of Manila for the year 1975. Three other witnesses9 testified,
albeit their testimonies revolved around the appraisal and rental values of the Arlegui property.
Eventually, the trial court rendered a judgment by default10 for Mendoza and against the Republic. To the
trial court, the Republic had veritably confiscated Mendozas property, and deprived her not only of the use
thereof but also denied her of the income she could have had otherwise realized during all the years she
was illegally dispossessed of the same.
Dated August 27, 2003, the trial courts decision dispositively reads as follows:
WHEREFORE, judgment is hereby rendered:
1. Declaring the deed of sale dated July 15, 1975, annotated at the back of [TCT] No. 118527 as
PE:2035/T-118911, as non-existent and/or fictitious, and, therefore, null and void from the beginning;
2. Declaring that [TCT] No. 118911 of the defendant Republic of the Philippines has no basis, thereby
making it null and void from the beginning;

3. Ordering the defendant Register of Deeds for the City of Manila to reinstate plaintiff [Mendozas TCT] No.
118527;
4. Ordering the defendant Republic to pay just compensation in the sum of ONE HUNDRED FORTY
THREE MILLION SIX HUNDRED THOUSAND (P143,600,000.00) PESOS, plus interest at the legal rate,
until the whole amount is paid in full for the acquisition of the subject property;
5. Ordering the plaintiff, upon payment of the just compensation for the acquisition of her property, to
execute the necessary deed of conveyance in favor of the defendant Republic ; and, on the other hand,
directing the defendant Register of Deeds, upon presentation of the said deed of conveyance, to cancel
plaintiffs TCT No. 118527 and to issue, in lieu thereof, a new Transfer Certificate of Title in favor of the
defendant Republic;
6. Ordering the defendant Republic to pay the plaintiff the sum of ONE BILLION FOUR HUNDRED
EIGHTY MILLION SIX HUNDRED TWENTY SEVEN THOUSAND SIX HUNDRED EIGHTY EIGHT
(P1,480,627,688.00) PESOS, representing the reasonable rental for the use of the subject property, the
interest thereon at the legal rate, and the opportunity cost at the rate of three (3%) per cent per annum,
commencing July 1975 continuously up to July 30, 2003, plus an additional interest at the legal rate,
commencing from this date until the whole amount is paid in full;
7. Ordering the defendant Republic to pay the plaintiff attorneys fee, in an amount equivalent to
FIFTEEN (15%) PER CENT of the amount due to the plaintiff.
With pronouncement as to the costs of suit.
SO ORDERED. (Words in bracket and emphasis added.)
Subsequently, the Republic moved for, but was denied, a new trial per order of the trial court of October 7,
2003.11 Denied also was its subsequent plea for reconsideration.12 These twin denial orders were followed
by several orders and processes issued by the trial court on separate dates as hereunder indicated:
1. November 27, 2003 - - Certificate of Finality declaring the August 27, 2003 decision final and
executory.13
2. December 17, 2003 - - Order denying the Notice of Appeal filed on November 27, 2003, the same having
been filed beyond the reglementary period.14
3. December 19, 2003 - - Order15 granting the private respondents motion for execution.
4. December 22, 2003 - - Writ of Execution.16
Hence, this petition for certiorari.
By Resolution17 of November 20, 2006, the case was set for oral arguments. On January 22, 2007, when
this case was called for the purpose, both parties manifested their willingness to settle the case amicably,
for which reason the Court gave them up to February 28, 2007 to submit the compromise agreement for
approval. Following several approved extensions of the February 28, 2007 deadline, the OSG, on August 6,
2007, manifested that it is submitting the case for resolution on the merits owing to the inability of the
parties to agree on an acceptable compromise.
In this recourse, the petitioner urges the Court to strike down as a nullity the trial courts order declaring it in
default and the judgment by default that followed. Sought to be nullified, too, also on the ground that they
were issued in grave abuse of discretion amounting to lack or in excess of jurisdiction, are the orders and
processes enumerated immediately above issued after the rendition of the default judgment.
Petitioner lists five (5) overlapping grounds for allowing its petition. It starts off by impugning the order of
default and the judgment by default. To the petitioner, the respondent judge committed serious jurisdictional
error when he proceeded to hear the case and eventually awarded the private respondent a staggering
amount without so much as giving the petitioner the opportunity to present its defense.
Petitioners posture is simply without merit.

Deprivation of procedural due process is obviously the petitioners threshold theme. Due process, in its
procedural aspect, guarantees in the minimum the opportunity to be heard.18 Grave abuse of discretion,
however, cannot plausibly be laid at the doorstep of the respondent judge on account of his having issued
the default order against the petitioner, then proceeding with the hearing and eventually rendering a default
judgment. For, what the respondent judge did hew with what Section 3, Rule 9 of the Rules of Court
prescribes and allows in the event the defending party fails to seasonably file a responsive pleading. The
provision reads:
SEC. 3. Default; declaration of.- If the defending party fails to answer within the time allowed therefor, the
court shall, upon motion of the claiming party with notice to the defending party, and proof of such failure,
declare the defending party in default. Thereupon, the court shall proceed to render judgment granting the
claimant such relief as his pleading may warrant, unless the court in its discretion requires the claimant to
submit evidence .19
While the ideal lies in avoiding orders of default,20 the policy of the law being to have every litigated case
tried on its full merits,21 the act of the respondent judge in rendering the default judgment after an order of
default was properly issued cannot be struck down as a case of grave abuse of discretion.
The term "grave abuse of discretion," in its juridical sense, connotes capricious, despotic, oppressive or
whimsical exercise of judgment as is equivalent to lack of jurisdiction.22 The abuse must be of such degree
as to amount to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law, as
where the power is exercised in a capricious manner. The word "capricious," usually used in tandem with
"arbitrary," conveys the notion of willful and unreasoning action.23
Under the premises, the mere issuance by the trial court of the order of default followed by a judgment by
default can easily be sustained as correct and doubtless within its jurisdiction. Surely, a disposition directing
the Republic to pay an enormous sum without the trial court hearing its side does not, without more, vitiate,
on due procedural ground, the validity of the default judgment. The petitioner may have indeed been
deprived of such hearing, but this does not mean that its right to due process had been violated. For,
consequent to being declared in default, the defaulting defendant is deemed to have waived his right to be
heard or to take part in the trial. The handling solicitors simply squandered the Republics opportunity to be
heard. But more importantly, the law itself imposes such deprivation of the right to participate as a form of
penalty against one unwilling without justification to join issue upon the allegations tendered by the plaintiff.
And going to another point, the petitioner would ascribe jurisdictional error on the respondent judge for
denying its motion for new trial based on any or a mix of the following factors, viz., (1) the failure to file an
answer is attributable to the negligence of the former handling solicitor; (2) the meritorious nature of the
petitioners defense; and (3) the value of the property involved.
The Court is not convinced. Even as the Court particularly notes what the trial court had said on the matter
of negligence: that all of the petitioners pleadings below bear at least three signatures, that of the handling
solicitor, the assistant solicitor and the Solicitor General himself, and hence accountability should go up all
the way to the top of the totem pole of authority, the cited reasons advanced by the petitioner for a new trial
are not recognized under Section 1, Rule 37 of the Rules of Court for such recourse.24 Withal, there is no
cogent reason to disturb the denial by the trial court of the motion for new trial and the denial of the
reiterative motion for reconsideration.
Then, too, the issuance by the trial court of the Order dated December 17, 200325 denying the petitioners
notice of appeal after the court caused the issuance on November 27, 2003 of a certificate of finality of its
August 27, 2003 decision can hardly be described as arbitrary, as the petitioner would have this Court
believe. In this regard, the Court takes stock of the following key events and material dates set forth in the
assailed December 17, 2003 order, supra: (a) The petitioner, thru the OSG, received on August 29, 2003 a
copy of the RTC decision in this case, hence had up to September 13, 2003, a Saturday, within which to
perfect an appeal; (b) On September 15, 2003, a Monday, the OSG filed its motion for new trial, which the
RTC denied, the OSG receiving a copy of the order of denial on October 9, 2003; and (c) On October 24,
2003, the OSG sought reconsideration of the order denying the motion for new trial. The motion for
reconsideration was denied per Order dated November 25, 2003, a copy of which the OSG received on the
same date.
Given the foregoing time perspective, what the trial court wrote in its aforementioned impugned order of
December 17, 2003 merits approval:

In the case at bar, it is clear that the motion for new trial filed on the fifteenth (15th) day after the decision
was received on August 29, 2003 was denied and the moving party has only the remaining period from
notice of notice of denial within which to file a notice of appeal. xxx
Accordingly, when defendants [Republic et al.] filed their motion for new trial on the last day of the fifteen
day (15) prescribed for taking an appeal, which motion was subsequently denied, they had one (1) day
from receipt of a copy of the order denying new trial within which to perfect [an] appeal . Since
defendants had received a copy of the order denying their motion for new trial on 09 October 2003,
reckoned from that date, they only have one (1) day left within which to file the notice of appeal. But instead
of doing so, the defendants filed a motion for reconsideration which was later declared by the Court as pro
forma motion in the Order dated 25 November 2003. The running of the prescriptive period, therefore, can
not be interrupted by a pro forma motion. Hence the filing of the notice of appeal on 27 November 2007
came much too late for by then the judgment had already become final and executory.26 (Words in bracket
added; Emphasis in the original.)
It cannot be over-emphasized at this stage that the special civil action of certiorari is limited to resolving
only errors of jurisdiction; it is not a remedy to correct errors of judgment. Hence, the petitioners lament,
partly covered by and discussed under the first ground for allowing its petition, about the trial court taking
cognizance of the case notwithstanding private respondents claim or action being barred by prescription
and/or laches cannot be considered favorably. For, let alone the fact that an action for the declaration of the
inexistence of a contract, as here, does not prescribe;27 that a void transfer of property can be recovered by
accion reivindicatoria;28 and that the legal fiction of indefeasibility of a Torrens title cannot be used as a
shield to perpetuate fraud,29 the trial courts disinclination not to appreciate in favor of the Republic the
general principles of prescription or laches constitutes, at best, errors of judgment not correctable by
certiorari.
The evidence adduced below indeed adequately supports a conclusion that the Office of the President,
during the administration of then President Marcos, wrested possession of the property in question and
somehow secured a certificate of title over it without a conveying deed having been executed to legally
justify the cancellation of the old title (TCT No. 118527) in the name of the private respondent and the
issuance of a new one (TCT No. 118911) in the name of petitioner Republic. Accordingly, granting private
respondents basic plea for recovery of the Arlegui property, which was legally hers all along, and the
reinstatement of her cancelled certificate of title are legally correct as they are morally right. While not
exactly convenient because the Office of the President presently uses it for mix residence and office
purposes, restoring private respondent to her possession of the Arlegui property is still legally and
physically feasible. For what is before us, after all, is a registered owner of a piece of land who, during the
early days of the martial law regime, lost possession thereof to the Government which appropriated the
same for some public use, but without going through the legal process of expropriation, let alone paying
such owner just compensation.
The Court cannot, however, stop with just restoring the private respondent to her possession and
ownership of her property. The restoration ought to be complemented by some form of monetary
compensation for having been unjustly deprived of the beneficial use thereof, but not, however, in the
varying amounts and level fixed in the assailed decision of the trial court and set to be executed by the
equally assailed writ of execution. The Court finds the monetary award set forth therein to be erroneous.
And the error relates to basic fundamentals of law as to constitute grave abuse of discretion.
As may be noted, private respondent fixed the assessed value of her Arlegui property at P2,388,990.00.
And in the prayer portion of her third amended complaint for recovery, she asked to be restored to the
possession of her property and that the petitioner be ordered to pay her, as reasonable compensation or
rental use or occupancy thereof, the sum of P500,000.00 a month, or P6 Million a year, with a five percent
(5%) yearly increase plus interest at the legal rate beginning July 1975. From July 1975 when the PSG
allegedly took over the subject property to July 2003, a month before the trial court rendered judgment, or a
period of 28 years, private respondents total rental claim would, per the OSGs computation, only amount
to P371,440,426.00. In its assailed decision, however, the trial court ordered the petitioner to pay private
respondent the total amount of over P1.48 Billion or the mind-boggling amount of P1,480,627,688.00, to be
exact, representing the reasonable rental for the property, the interest rate thereon at the legal rate and the
opportunity cost. This figure is on top of the P143,600,000.00 which represents the acquisition cost of the
disputed property. All told, the trial court would have the Republic pay the total amount of about P1.624
Billion, exclusive of interest, for the taking of a property with a declared assessed value of P2,388,900.00.
This is not to mention the award of attorneys fees in an amount equivalent to 15% of the amount due the

private respondent.
In doing so, the respondent judge brazenly went around the explicit command of Rule 9, Section 3(d) of the
Rules of Court30 which defines the extent of the relief that may be awarded in a judgment by default, i.e.,
only so much as has been alleged and proved. The court acts in excess of jurisdiction if it awards an
amount beyond the claim made in the complaint or beyond that proved by the evidence.31 While a defaulted
defendant may be said to be at the mercy of the trial court, the Rules of Court and certainly the imperatives
of fair play see to it that any decision against him must be in accordance with law.32 In the abstract, this
means that the judgment must not be characterized by outrageous one-sidedness, but by what is fair, just
and equitable that always underlie the enactment of a law.
Given the above perspective, the obvious question that comes to mind is the level of compensation which
for the use and occupancy of the Arlegui property - would be fair to both the petitioner and the private
respondent and, at the same time, be within acceptable legal bounds. The process of balancing the
interests of both parties is not an easy one. But surely, the Arlegui property cannot possibly be assigned,
even perhaps at the present real estate business standards, a monthly rental value of at least P500,000.00
or P6,000,000.00 a year, the amount private respondent particularly sought and attempted to prove. This
asking figure is clearly unconscionable, if not downright ridiculous, attendant circumstances considered. To
the Court, an award of P20,000.00 a month for the use and occupancy of the Arlegui property, while
perhaps a little bit arbitrary, is reasonable and may be granted pro hac vice considering the following hard
realities which the Court takes stock of:
1. The property is relatively small in terms of actual area and had an assessed value of only P2,388,900.00;
2. What the martial law regime took over was not exactly an area with a new and imposing structure, if
there was any; and
3. The Arlegui property had minimal rental value during the relatively long martial law years, given the very
restrictive entry and egress conditions prevailing at the vicinity at that time and even after.
To be sure, the grant of monetary award is not without parallel. In Alfonso v. Pasay City,33 a case where a
registered owner also lost possession of a piece of lot to a municipality which took it for a public purposes
without instituting expropriation proceedings or paying any compensation for the lot, the Court, citing
Herrera v. Auditor General,34 ordered payment of just compensation but in the form of interest when a
return of the property was no longer feasible.
The award of attorneys fees equivalent to 15% of the amount due the private respondent, as reduced
herein, is affirmed.
The assessment of costs of suit against the petitioner is, however, nullified, costs not being allowed against
the Republic, unless otherwise provided by law.35
The assailed trial courts issuance of the writ of execution36 against government funds to satisfy its money
judgment is also nullified. It is basic that government funds and properties may not be seized under writs of
execution or garnishment to satisfy such judgments.37 Republic v. Palacio38 teaches that a judgment
against the State generally operates merely to liquidate and establish the plaintiffs claim in the absence of
express provision; otherwise, they can not be enforced by processes of law.
Albeit title to the Arlegui property remains in the name of the petitioner Republic, it is actually the Office
of the President which has beneficial possession of and use over it since the 1975 takeover. Accordingly,
and in accord with the elementary sense of justice, it behooves that office to make the appropriate
budgetary arrangements towards paying private respondent what is due her under the premises. This, to
us, is the right thing to do. The imperatives of fair dealing demand no less. And the Court would be remiss
in the discharge of its duties as dispenser of justice if it does not exhort the Office of the President to
comply with what, in law and equity, is its obligation. If the same office will undertake to pay its obligation
with reasonable dispatch or in a manner acceptable to the private respondent, then simple justice, while
perhaps delayed, will have its day. Private respondent is in the twilight of her life, being now over 90 years
of age.39 Any delay in the implementation of this disposition would be a bitter cut.1wphi1
WHEREFORE, the decision of the Regional Trial Court of Manila dated August 27, 2003 insofar as it
nullified TCT No. 118911 of petitioner Republic of the Philippines and ordered the Register of Deeds of

Manila to reinstate private respondent Tarcila L. Mendozas TCT No. 118527, or to issue her a new
certificate of title is AFFIRMED. Should it be necessary, the Register of Deeds of Manila shall execute the
necessary conveying deed to effect the reinstatement of title or the issuance of a new title to her.
It is MODIFIED in the sense that for the use and occupancy of the Arlegui property, petitioner Republic is
ordered to pay private respondent the reasonable amount of P20,000.00 a month beginning July 1975 until
it vacates the same and the possession thereof restored to the private respondent, plus an additional
interest of 6% per annum on the total amount due upon the finality of this Decision until the same is fully
paid. Petitioner is further ordered to pay private respondent attorney's fees equivalent to 15% of the amount
due her under the premises.
Accordingly, a writ of certiorari is hereby ISSUED in the sense that:
1. The respondent courts assailed decision of August 27, 2003 insofar as it ordered the petitioner Republic
of the Philippines to pay private respondent Tarcila L. Mendoza the sum of One Billion Four Hundred Eighty
Million Six Hundred Twenty Seven Thousand Six Hundred Eighty Eight Pesos (P1,480,627,688.00)
representing the purported rental use of the property in question, the interest thereon and the opportunity
cost at the rate of 3% per annum plus the interest at the legal rate added thereon is nullified. The portion
assessing the petitioner Republic for costs of suit is also declared null and void.
2. The Order of the respondent court dated December 19, 2003 for the issuance of a writ of execution and
the Writ of Execution dated December 22, 2003 against government funds are hereby declared null and
void. Accordingly, the presiding judge of the respondent court, the private respondent, their agents and
persons acting for and in their behalves are permanently enjoined from enforcing said writ of execution.
However, consistent with the basic tenets of justice, fairness and equity, petitioner Republic, thru the Office
of the President, is hereby strongly enjoined to take the necessary steps, and, with reasonable dispatch,
make the appropriate budgetary arrangements to pay private respondent Tarcila L. Mendoza or her assigns
the amount adjudged due her under this disposition.
SO ORDERED.

SECOND DIVISION
ADM. MATTER NO. RTJ-04-1848 October 25, 2005
(Formerly OCA I.P.I. No. 03-1804-RTJ)
Philippine Amusement and Gaming Corporation (PAGCOR), represented by Atty. Carlos R.
Bautista, Jr., Complainant,
vs.
HON. ROMULO A. LOPEZ, CHICO-NAZARIO,* Presiding Judge, Branch 34, Regional Trial Court,
Manila, Respondent.
RESOLUTION
AUSTRIA-MARTINEZ, J.:
PAGCOR filed the instant administrative complaint against Judge Romulo A. Lopez of the Regional Trial
Court (RTC) of Manila, Branch 34, seeking his dismissal from the service for alleged gross ignorance of the
law and for his disbarment for such ignorance, violation of the lawyers oath and the Code of Professional
Responsibility.
The administrative complaint stemmed from the proceedings in Civil Case No. 00-99133,1 entitled, Filipinas
Gaming Entertainment Totalizator Corporation (FILGAME) vs. PAGCOR, Department of Interior and Local

Government (DILG), and Secretary Alfredo S. Lim, filed with the RTC of Manila and assigned by raffle to
Branch 34 presided by respondent Judge. The antecedents and the pertinent proceedings that transpired
therein are as follows:
On June 17, 1999, PAGCOR entered into an Agreement with FILGAME and BELLE Jai-Alai Corporation
(BELLE) for the resumption of the Jai-Alai operations in the country.2 FILGAME and BELLE jointly agreed
to provide funds, at no cost to complainant, for pre-operating expenses and working capital. PAGCOR shall
manage, operate and control all aspects of the Jai-Alai operations.
On October 19, 2000, the Office of the President of the Philippines issued a Memorandum addressed to
Alicia Ll. Reyes, then PAGCOR Chairperson and Chief Executive Officer, directing her to take immediate
steps to close down all PAGCOR facilities and outlets in Jai-Alai, on-line bingo and internet casino gaming.
On October 20, 2000, DILG, through then Secretary Alfredo S. Lim, caused the closure of the Jai-Alai main
fronton.
Thus, on November 6, 2000, FILGAME and BELLE filed the case for Specific Performance and Injunction
with prayer for Damages and Temporary Restraining Order (TRO), and Writ of Preliminary Injunction3
against PAGCOR, DILG and Secretary Alfredo Lim, docketed as Civil Case No. 00-99133 and raffled to
herein respondent Judge.
On November 10, 2000, respondent issued a writ of temporary restraining order effective for 20 days.
On November 29, 2000, this Court rendered a decision in the cases, entitled, Raoul B. Del Mar vs.
PAGCOR, BELLE and FILGAME and Federico S. Sandoval II and Michael T. Defensor vs. PAGCOR,4 the
decretal portion of which reads:
WHEREFORE, the petitions are GRANTED. Respondents PAGCOR, Belle Jai-Alai Corporation and
Filipinas Gaming Entertainment Totalizator Corporation are enjoined from managing, maintaining and
operating jai-alai games, and from enforcing the agreement entered into by them for that purpose.
Motions for Reconsideration filed by PAGCOR, BELLE and FILGAME were subsequently denied.
Consequently, FILGAME and BELLE filed a Motion to Admit Amended Complaint5 with the trial court where
the cause of action was changed, i.e., from Specific Performance to Recovery of Sum of Money, inasmuch
as plaintiffs could no longer ask for specific performance of their agreement with complainant since the
Court had declared the agreement without force and effect. Thus, FILGAME and BELLE sought to recover
their pre-operating expenses and/or investments totaling P1,562,145,661.87 including the goodwill money
of P200,000,000.00 which they allegedly invested with the complainant. Complainant filed an opposition on
the ground that there is a substantial change in the complaint and cause of action.
On November 27, 2001, respondent issued an Order6 admitting the amended complaint and directing
complainant and DILG to file their answer.
Complainant filed a motion to dismiss the amended complaint7 on the ground that the trial court had not
acquired jurisdiction over the case for failure of the plaintiffs to pay the prescribed docket fees considering
that the docket fee originally paid was only P1,212.00. It claimed that per the affidavit of Atty. Ma.
Concepcion Gloria,8 complainants representative, she attested to the fact that as computed by the Docket
Fee Assessor, the amended complaint, which sought recovery of the P1,562,145,661.87 including the
P200,000,000 goodwill money, should have docket fees of P15,775,903.68.
On June 19, 2002, respondent issued an Order9 denying complainants motion to dismiss and directed it to
file its answer. Respondent judge made the following ratiocination:
Considering the parties arguments, this Court is of the opinion and so holds that there is no basis for
dismissing the amended complaint since the original complaint was filed and the corresponding docket fee
was paid by the plaintiff, the Court had acquired jurisdiction over the said complaint. Having done so, and
considering the rule for the payment of the docket fees set forth in the Sun Insurance Office, Ltd. with
respect to initiatory pleadings, there is no firm ground to dismiss the Amended Complaint.
Under the said ruling "where the filing of the initiatory pleading is not accompanied by payment of the

docket fee, the Court may allow payment of the fee within a reasonable time but in no case beyond the
applicable prescriptive or reglementary period." If a late payment of the docket fee is allowed in filing
initiatory pleading to vest jurisdiction to the Court, with more reason the same leniency should be afforded
in an amended pleading/complaint which sets out additional/new cause of action necessitating the increase
of the docket fee. The plaintiff is correct in not immediately paying the additional filing fee before the
amended complaint is admitted for why will it pay when there is no assurance that the amended complaint
will be admitted.
Once jurisdiction is acquired and vested in a Court, said Court maintains its jurisdiction until judgment is
had. (Aruego, Jr., et al. vs. CA, 254 SCRA 711-719). Such acquired jurisdiction is not lost by the
amendment of a pleading that raises additional/new cause(s) of action. The jurisdiction of a Court is not lost
even if additional docket fees are required by reason of the amendment.
In the same ruling in Sun Insurance case, "any additional filing (docket) fee shall constitute a lien on the
judgment and that it shall be the responsibility of the Clerk of Court or his duly authorized deputy to enforce
said lien and assess and collect the additional fee provided that the cause of action has not prescribed."
Moreover in Yuchengco vs. Republic, 333 SCRA 368, 381, the Supreme Court even allowed the payment
of the filing fees beyond the prescriptive period.
Complainant then filed its Answer with compulsory counterclaim.10 A pre-trial conference was conducted.
On October 10, 2002, respondent issued a Pre-trial Order and at the same time directed the parties to
submit their respective comments and/or manifestations on the said order. The pre-trial order listed 13
issues to be resolved.
During the October 25, 2002 hearing, FILGAME and BELLE manifested their intention to file a Motion for
Summary Judgment which they subsequently filed. Complainant filed its opposition thereto. Respondent
did not conduct any hearing on the motion for summary judgment.
On May 19, 2003, respondent rendered his decision by way of Summary Judgment11 in favor of FILGAME
and BELLE where complainant was ordered to return and pay the sum of P1,562,145,661.87, representing
the amount of pre-operating expenses and/or investment including the goodwill money given by plaintiffs
and the release of P500,000.00 cash bond posted in support of the TRO.
On June 10, 2003, complainant filed its notice of appeal12 which was subsequently withdrawn.
On June 12, 2003, complainant filed with the Court of Appeals (CA) a petition for certiorari seeking the
annulment of the respondents decision by way of summary judgment for having been rendered without or
in excess of jurisdiction and with grave abuse of discretion.13
On July 8, 2003, complainant filed the present administrative case charging respondent with gross
ignorance of the law and for violations of the Lawyers Oath and Code of Professional Responsibility in
connection with his actions in Civil Case No. 00-99133.
In a Resolution dated January 26, 2004,14 we deferred action on this complaint until the final resolution of
the petition for certiorari filed before the CA.
On January 21, 2004, a judgment by compromise agreement15 was rendered by the CA in the certiorari
case filed with it and an entry of judgment was subsequently made.16 Thereafter, complainant sought the
continuation of the pending administrative case because there was no longer any legal impediment with the
resolution of the certiorari case.
Complainant charges respondent for gross ignorance of the law and procedure in (1) admitting the
amended complaint of plaintiffs FILGAME and BELLE in Civil Case No. 00-99133 despite the fact that (a)
the amended complaint is a total change of theory of the case; and (b) that the required filing fees for the
amended complaint were not paid; and (2) in rendering summary judgment (a) despite the fact that
respondent found the existence of 13 factual issues to be resolved; (b) without conducting a hearing on the
motion for summary judgment; (c) based on the alleged implied admission rather than on the personal
knowledge of witnesses and other affiants; and (d) despite the fact that plaintiffs were estopped from
denying the existence of these 13 issues raised in the pre-trial order.

Complainant contends that respondent denied its motion to dismiss the amended complaint without
requiring plaintiffs FILGAME and BELLE to pay the correct docket fees within a reasonable time from the
admission of the amended complaint, thus the court is deprived of its lawful docket fees in the amount of
P15,774,691.68; that respondents reliance on the third rule enunciated in the Sun Insurance, i.e., allowing
docket fee to constitute as lien on the judgment, finds no application in the civil case since the P1.5 Billion
claim is not in the nature of an award not specified in the pleading.
Complainant claims that respondent Judge was grossly ignorant of the law when he disregarded the 13
factual issues enumerated in his Pre-trial Order dated October 10, 2002 and rendered a summary judgment
on the case; that in rendering a summary judgment, he disposed of the case with undue haste thus
depriving it of its day in court; that no hearing was conducted by respondent for purposes of resolving
FILGAME and BELLEs motion for summary judgment as provided under Section 3, Rule 35 of the Rules
on Civil Procedure; that although opposition, reply and rejoinder were submitted by the parties, the same
appeared to be inadequate considering the mandatory nature of the summary hearing.
Complainant avers that respondent granted summary judgment based on its alleged implied admissions
when it failed to specifically deny certain material allegations in the amended complaint and other pleadings
of FILGAME and BELLE; that such is contrary to Section 5, Rule 35 and jurisprudence.
In his Comment, respondent denied having committed gross ignorance of the law in admitting the amended
complaint since dismissal is not the consequence provided for in not paying the right docket fee at the time
the complaint or initiatory pleading is filed; that the trial court acquires jurisdiction over a claim by the filing
of appropriate pleading and payment of the prescribed filing fee but when subsequently the judgment
awards a claim not specified in the pleading, the additional filing fee therefor shall constitute a lien on the
judgment.
He argues that the grant of summary judgment despite the existence of a list of issues in his Pre-trial Order
dated October 10, 2002 was not even final and only listed issues or matters which complainant refused to
admit when counsel for BELLE and FILGAME asked for stipulations; that the holding of a trial type hearing
is not absolutely indispensable for the court to rule on a motion for summary judgment; that he granted the
motion for summary judgment not solely on the implied admissions made by complainant but based on the
evidence on record and that complainants contention that plaintiffs are estopped from challenging the list
of issues in the Pre-trial Order is without basis since plaintiffs had vigorously insisted for a summary
judgment.
Complainant filed a Reply where it claimed that because of respondents undue haste in rendering
summary judgment, some of its evidence were suppressed.
Respondent filed his Rejoinder where he stated that in his Order dated February 19, 2004, he required the
payment of additional docket fees on the amended complaint which was complied with; that since it was the
clerk of court who computed the same, any deficiency can still be collected by issuing another order. He
denied the suppression of evidence since the alleged evidence were not attached to its answer to the
amended complaint.
Complainant filed a Sur-rejoinder claiming that the additional docket fees were based on the compromise
agreement entered by the parties in the CA in the amount of P120 million and not in the amended
complaint for recovery of money in the amount of P1.56 billion.
In a Resolution dated September 15, 2004,17 the Court referred the case to Justice Noel G. Tijam of the CA
for investigation, report and recommendation.
The Investigating Justice submitted his Report recommending the dismissal of the administrative and the
disbarment complaint against respondent for patent lack of merit, based on the following findings:
Anent the issue on non-payment of docket fees on the amended complaint Based on the evidence, the undersigned Investigator finds that Respondent Judge did not commit gross
ignorance of the law in admitting the amended complaint. There is no evidence that the respondent Judge
acted in bad faith or was motivated by fraud, dishonesty or corruption in issuing the assailed order.
It is a well-settled rule that once the jurisdiction of the court attaches, it continues until the case is finally

terminated. The trial court cannot be ousted therefrom by subsequent happenings of events, although of a
character would have prevented jurisdiction from attaching in the first instance.
The trial court validly acquired jurisdiction over the amended complaint. In the case of PNOC Shipping and
Transport Corp. vs. CA, the Supreme Court ruled that the plaintiffs failure to pay the docket fee
corresponding to its increased claim for damages to P600,000.00 under the amended complaint should not
be considered as having curtailed the lower courts jurisdiction. Pursuant to the ruling in Sun Insurance
Office, Ltd. vs. Asuncion, the unpaid docket fee should be considered as a lien on the judgment even
though private respondent therein specified the amount of P600,000.00 as its claim for damages in its
amended complaint. Besides, it is too late in the day to invoke lack of jurisdiction because the case decided
by the respondent Judge elevated on appeal to the Court of Appeals has become final and executory when
PAGCOR voluntarily entered into a compromise agreement in the Court of Appeals.
Respondent Judge did not deviate from the rules when he did not dismiss the amended complaint for
failure to pay the additional docket fee because the court may still require the same to be paid within a
reasonable time and in no case beyond the prescriptive period. The timely payment of docket fees is
jurisdictional, but considerations of law and equity come into the picture. Despite the jurisdictional nature on
the rule on the payment of the docket fee, the court still has discretion to relax the rule in meritorious cases.
Furthermore, the undersigned Investigator agrees with Respondent Judges argument that the assailed
Order was consistent with Sec. 3, Rule 10 of the Rules on Civil Procedure, as amended and the ruling in
the case of Pagubo vs. CA. Indeed, although an amendment may substantially change or alter the cause of
action or defense, the same must serve the higher interests of substantial justice, and prevent delay and
equally promote the laudable objective of the rules which is to secure a "just, speedy and inexpensive
disposition of every action and proceedings."
Contrary to PAGCORs claim that Respondent Judge failed to issue an order to collect the additional
docket fees, the evidence shows that Respondent Judge in fact issued an Order dated February 19, 2004,
directing the Clerk of Court of the RTC of Manila to collect and require payment of docket fees within 15
days. The order was issued after the entry of judgment on a compromise which automatically lifted the TRO
which earlier prevented the Respondent Judge from directing Belle and Filgame to pay the additional fees.
Moreover, at PAGCORs instance, Respondent Judge issued another Order dated October 26, 2004
directing the Clerk of Court to recompute the docket fee.
As to the claim that respondent judge rendered summary judgment despite the 13 factual issues embodied
in the Pre-trial Order and that he did not find that plaintiffs are estopped from denying these factual issues
Section 10 of Rule 8 of the Rules provides that if the defendant is without knowledge or information
sufficient to form a belief as to the truth of the material averment in the complaint, he is bound to so state
and this shall have the effect of denial. In such a case it is indispensable that the matter denied for lack of
knowledge is alleged be clearly set forth so that the adverse party is informed of what is denied.
A scrutiny of the amended answer of PAGCOR in Civil Case No. 00-99133, shows that PAGCOR actually
knows the gross and net income from the Jai-Alai operations, the tax paid by PAGCOR and the preoperating expenses of Belle and Filgame. Considering that the Agreement between PAGCOR and Filgame
and Belle provided that PAGCOR shall manage, operate and control all aspects of Jai-Alai operation
pursuant to its franchise, it would have been unbelievable for them not to know the gross and net income
from the Jai-Alai operations from June 1999 to December 2000; the tax paid by PAGCOR to BIR; and the
effect of Jai- Alai operations on the government revenues and where the income of PAGCOR was used.
Furthermore, Belle and Filgame had furnished PAGCOR a copy of the amount of pre-operating per request
of PAGCOR as evidenced by a letter dated September 15, 1999 of Edgardo M. del Fonso, President of
Belle Jai-Alai Corporation addressed to Renaldo Tenorio, President and Chief Operating Officer of
PAGCOR and the receipt of which was not denied by PAGCOR.
PAGCORs blanket denial of the said allegations in the amended complaint is ineffective because such
facts are within PAGCORs knowledge. Thus, said denial was properly treated as an admission.
Indeed, in a similar case, PNB vs. Court of Appeals, the private respondent therein denied the averments in
the complaint regarding the fact of withdrawal of $14,056.25 in PCIB-Cagayan de Oro City Account No.
16087 and the surrounding circumstances of said withdrawal. The private respondent, however, admitted
the averment in the complaint that he is the sole signatory of the subject account. The Supreme Court

considered said denial as ineffective because such fact was within the knowledge of the private
respondent, being the sole signatory to the said account. Private respondents denial was consequently
declared by the Supreme Court as equivalent to an admission.
Respondent Judge, therefore, correctly granted the motion for summary judgment based on the Agreement
dated June 17, 1999 and the stipulation made by PAGCORs counsel, Atty. Bautista, regarding the records
of summary operations covering the period of June 1999 to October 2000 being true and correct, having
been prepared by a responsible officer of PAGCOR and based on the existing records of PAGCOR.
All told, based on the evidence, PAGCOR was privy to all the material allegations in the amended
complaint relating to the Jai-Alai operations. It would have been incredulous for PAGCOR to claim
ignorance or lack of knowledge of said material allegations.
Convincingly, Respondent Judge had sufficient basis to render summary judgment.
As to the claim that the summary judgment was rendered without hearing Based on the evidence,we find that Respondent Judge did not commit gross ignorance of the law in not
conducting a trial type hearing in resolving the motion for summary judgment. Well-settled is the rule that, in
proceedings for summary judgment, the court is merely expected to act chiefly on the basis of what is on
the records of the case and that the hearing contemplated in the Rules is not de riguer as its purpose is
only to determine whether the issues are genuine or not and not to receive evidence on issues set up in the
pleadings.
Based on the records and the evidence presented, the trial type hearing on the motion was dispensable in
view of the fact that PAGCORs blanket/ineffective denial in its answer to the amended complaint had the
effect of an admission, thus, did not raise any genuine issues. Furthermore, a hearing on the motion for
summary judgment was not necessary considering that the evidence necessary for the resolution of the
same was already part of the records. It is evident from the records, particularly in the minutes of the
hearings held on November 22, 2002 and February 10, 2003, as well as Respondent Judges Order issued
on even dates, that PAGCOR was given ample opportunity to be heard and present its evidence in
opposition to the motion for summary judgment, but PAGCOR chose not to adduce any such evidence. The
scheduled hearing on the motion for summary judgment was cancelled and the motion was considered
submitted for resolution without PAGCOR objecting on the absence of a hearing. PAGCOR, therefore,
cannot now insist that Respondent Judge should have conducted a hearing on the motion.
As to the claim that respondent Judge granted the summary judgment based on complainants implied
admissions It is a recognized rule in summary judgment that the trial court can determine whether there is genuine
issue on the basis of the pleadings, admissions, documents, affidavits, and/or counter-affidavits submitted
by the parties. On the basis of this rule PAGCOR cannot claim that Respondent Judge was grossly
ignorant of the law and procedure when he rendered summary judgment based on implied admissions of
the material facts in the amended complaint and not on personal knowledge of witnesses and other
affiants. PAGCOR cannot rely solely on Section 5, Rule 35 of the Rules of Court because the provision
pertains only to cases when affidavits and supporting papers are submitted to establish whether there is
genuine issue. Such supporting affidavits must be made on personal knowledge. Section 1, Rule 35 is
explicit that the movant of the motion for summary judgment can support his motion with affidavits,
depositions and admissions. It is illogical to claim that a motion for summary judgment must be resolved
based on affidavits alone, considering that the Rules are clear that the motion can likewise be supported by
depositions and admissions.
As to complainants claim that respondent Judge should be disbarred because he violated the laws, rules
and legal principles The complaint for violation of lawyers oath and Code of Professional Responsibility is not meritorious.
The complaint for disbarment is unfounded. There was no gross ignorance of the law and procedure
committed by the Respondent Judge. Considering the evidence presented, Respondent Judge conducted
the proceedings in accordance with the applicable laws and procedure. To constitute gross ignorance of
the law, the judges actuation must not only be contrary to law and jurisprudence, the judge must have also

been moved by bad faith, fraud, dishonesty or corruption. The records are also bereft of any showing of
bad faith, fraud, dishonesty and corruption on the part of the Respondent Judge.
It is settled that in administrative proceedings, the complainant has the burden of substantiating the
charges asseverated in the complaint. The complainant has the burden of proving the allegations in the
complaint with substantial evidence. In the absence of evidence to the contrary, the presumption that
respondent has regularly performed his duties will prevail. Applying the same in the case, PAGCOR failed
to support its allegations with substantial and competent evidence to warrant the dismissal and disbarment
of the Respondent Judge.
As a matter of policy, in the absence of fraud, dishonesty, and corruption, the acts of the judge in his
judicial capacity are not subject of disciplinary action even though such acts are erroneous. He cannot be
subjected to liability civil, criminal, or administrative for any of his official acts, no matter how erroneous,
as long as he acts in good faith. Only judicial errors tainted with fraud, dishonesty, gross ignorance, bad
faith or deliberate intent to do an injustice will be administratively sanctioned. To hold otherwise, would be
to render the judicial office untenable, for no one is called upon to try the facts or interpret the law in the
process of administering justice can be infallible in his judgment.
Well-settled is the rule that, if a party is prejudiced by the orders of a judge, his remedy lies with the proper
court for proper judicial action and not with the office of the Court Administrator by means of an
administrative complaint. It is an established doctrine and policy that disciplinary proceedings and criminal
actions against judges are not complementary or suppletory of, nor a substitute for, these judicial remedies,
whether ordinary or extraordinary. Resort to and exhaustion of these judicial remedies, as well as entry of
judgment in the corresponding action or proceeding, is pre-requisite for the taking of other measure against
the person of the judges concerned. It is only after the available judicial remedies have been exhausted
and the appellate court have spoken with finality, the door to an inquiry into his criminal, civil and
administrative liability may be said to have opened or closed.
Here, the administrative complaint was filed by the Complainant pending the resolution of PAGCORs
Petition for Certiorari filed before the Court of Appeals. As such, the filing of this administrative case was in
disregard of the rules, if not malicious. Indeed, Civil Case No. 0099133 has not been resolved with finality
at the time the administrative complaint was filed with the Supreme Court. Also, a review of the records of
the case discloses the fact that counsels of PAGCOR were negligent in handling their case. Clearly, this
baseless administrative case was filed merely to harass Respondent Judge in the hope that the negligence
of PAGCORs counsel would be conveniently overlooked or unjustifiably mitigated.
The Court agrees with the findings and recommendation of the Investigating Justice that the administrative
complaint against respondent be dismissed.
The Court finds no gross ignorance of law committed by respondent when he admitted the amended
complaint notwithstanding that such amended complaint substantially altered the cause of action of
plaintiffs FILGAME and BELLE.
Section 3, Rule 10 of the Rules of Court, provides:
SECTION 3. Amendments by leave of court. Except as provided in the next preceding section, substantial
amendments may be made only upon leave of court. But such leave may be refused if it appears to the
court that the motion was made with intent to delay. Orders of the court upon the matters provided in this
section shall be made upon motion filed in court, and after notice to the adverse party, and an opportunity
to be heard.
As held in Valenzuela vs. CA,18
Interestingly, Section 3, Rule 10 of the 1997 Rules of Civil Procedure amended the former rule in such
manner that the phrase "or that the cause of action or defense is substantially altered" was stricken-off and
not retained in the new rules. The clear import of such amendment in Section 3, Rule 10 is that under
the new rules, "the amendment may (now) substantially alter the cause of action or defense." This
should only be true, however, when despite a substantial change or alteration in the cause of action or
defense, the amendments sought to be made shall serve the higher interests of substantial justice, and
prevent delay and equally promote the laudable objective of the rules which is to secure a "just, speedy and
inexpensive disposition of every action and proceeding.(emphasis supplied).

The original complaint filed by the plaintiffs was for specific performance and injunction with prayer for
damages and for TRO and writ of preliminary injunction against complainant while the amended complaint
was for recovery of sum of money. Such amendment to the original complaint was filed by plaintiffs
FILGAME and BELLE after the Supreme Court decision declared that complainant could not enter into a
joint agreement with other corporations to operate the Jai-Alai, and that the Agreement dated June 17,
1999 entered into between complainant and the plaintiffs is null and void. However, since plaintiffs had
provided funds for complainants pre-operating expenses and working capital, plaintiffs had to file an
amended complaint which seeks the recovery of their expenses. Although the amended complaint
substantially changed the cause of action of plaintiffs FILGAME and BELLE, the admission thereof by
respondent is allowed under Section 3, Rule 10 and jurisprudence.
The Court also finds that respondent was not guilty of gross ignorance of the law when he admitted the
amended complaint despite the non-payment by plaintiffs FILGAME and BELLE of additional docket fees
on the amended complaint. In Sun Insurance Office, Ltd. vs. Asuncion,19 the Court laid down the rules on
the payment of docket fees as follows:
1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the
prescribed docket fee, that vests a trial court with jurisdiction over the subject-matter or nature of the action.
Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may
allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or
reglementary period.
2. The same rule applies to permissive counterclaims, third-party claims and similar pleadings, which shall
not be considered filed until and unless the filing fee prescribed therefor is paid. The court may also allow
payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or
reglementary period.
3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and
payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the
pleading, or if specified the same has been left for determination by the court, the additional filing fee
therefor shall constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court or his duly
authorized deputy to enforce said lien and assess and collect the additional fee.20
Respondent is correct in ruling in his Order dated June 19, 2002 that the court had jurisdiction over the
amended complaint as it had acquired jurisdiction over the case when the original complaint was filed and
the corresponding docket fee was paid thereon. Plainly, while the payment of the prescribed docket fee is a
jurisdictional requirement, even its non-payment at the time of filing does not automatically cause the
dismissal of the case, as long as the fee is paid within the applicable prescriptive or reglementary period.
Respondent also stated in the same order that this Court in the Sun Insurance case had further declared
that "any additional filing (docket) fee shall constitute a lien on the judgment and that it shall be the
responsibility of the Clerk of Court or his duly authorized deputy to enforce said lien and assess and collect
the additional fee provided that the cause of action has not prescribed."
In PNOC Shipping and Transport Corporation vs. CA,21 the Court held:
With respect to petitioner's contention that the lower court did not acquire jurisdiction over the amended
complaint increasing the amount of damages claimed to P600,000.00, we agree with the Court of Appeals
that the lower court acquired jurisdiction over the case when private respondent paid the docket fee
corresponding to its claim in its original complaint. Its failure to pay the docket fee corresponding to its
increased claim for damages under the amended complaint should not be considered as having curtailed
the lower court's jurisdiction. Pursuant to the ruling in Sun Insurance Office, Ltd. (SIOL) v. Asuncion, the
unpaid docket fee should be considered as a lien on the judgment even though private respondent
specified the amount of P600,000.00 as its claim for damages in its amended complaint.22
Thus, the unpaid additional docket fees should be considered as a lien on the judgment even though
plaintiffs had specified the amount of P1,562,145,661.87 in the prayer of the amended complaint.
Moreover, the issue of jurisdiction for non-payment of additional docket fees is deemed abandoned as
there was neither a motion for reconsideration nor a petition questioning such Order filed by complainant. In
fact, when the amended complaint was admitted and respondent directed complainant to file its answer, the
latter filed its Answer with compulsory counterclaim and without questioning the jurisdiction of the trial court

on the ground of insufficient payment of docket fees. Complainant even invoked the courts authority when
it asked for affirmative relief on its counterclaim, thus it is estopped from challenging the courts
jurisdiction.23
Moreover, as observed by the Investigating Justice, "it is too late in the day to invoke lack of jurisdiction
because the civil case decided by the respondent which was elevated on appeal to the CA has become
final and executory when complainant voluntarily entered into a compromise agreement in the CA."24 Thus,
the issues raised in the petition for certiorari were not actually resolved. Thus, it becomes necessary for the
Court to determine in the present administrative case whether or not respondent is guilty of gross ignorance
of the law.
Respondent, in his Order dated February 19, 2004, after the entry of judgment on the compromise
agreement, directed plaintiffs BELLE and FILGAME to cause the computation of the additional docket on
the amended complaint, of which the Clerk of Court of Manila is directed to collect. Plaintiffs paid the
amount of P1,058,732.48. However, it appeared that based on the affidavit of the collecting agent, she
assessed the docket fees based on the judgment on the compromise which was presented to her by the
plaintiffs and not on the amended complaint as stated in the respondents Order dated February 19, 2004,
thus docket fees collected were still insufficient. If the amount of docket fees paid is insufficient considering
the amount of the claim, the clerk of court of the lower court involved or his duly authorized deputy has the
responsibility of making a deficiency assessment,25 thus it is no longer the fault of respondent when there
was a mistake in the assessment. However, when the matter was brought to the attention of respondent by
complainant in its sur-rejoinder in this administrative complaint, respondent called the attention of the clerk
of court where she was asked to recompute the same so that proper order can be issued.26 Respondent,
on November 18, 2004, issued another Order based on the compliance report submitted by the Clerk of
Court that plaintiffs have still to pay the amount of P14,717,171.19 based on the claim in the amended
complaint by directing the plaintiffs to pay within 15 days from receipt. These actuations of respondent are
in accordance with the Sun Insurance case.
Anent complainants claim that respondent was grossly ignorant of the law in rendering summary judgment
(a) based on implied admissions; (b) notwithstanding the 13 factual issues embodied in respondents PreTrial Order dated October 10, 2002; and (c) without conducting a trial, the Court finds that these alleged
errors committed by respondent pertained to the performance of his adjudicative functions.
In Maquiran vs. Grageda,27 we held:
As everyone knows, the law provides ample judicial remedies against errors or irregularities being
committed by a Trial Court in the exercise of its jurisdiction. The ordinary remedies against errors or
irregularities which may be regarded as normal in nature (i.e., error in appreciation or admission of
evidence, or in construction or application of procedural or substantive law or legal principle) include a
motion for reconsideration (or after rendition of judgment or final order, a motion for new trial), and appeal.
The extraordinary remedies against error or irregularities which may be deemed extraordinary in character
(i.e., whimsical, capricious, despotic exercise of power or neglect of duty, etc.) are, inter alia, the special
civil action of certiorari, prohibition or mandamus, or a motion for inhibition, a petition for change of venue,
as the case may be.
Now, the established doctrine and policy is that disciplinary proceedings and criminal actions against
Judges are not complementary or suppletory of, nor a substitute for, these judicial remedies, whether
ordinary or extraordinary. Resort to and exhaustion of these judicial remedies, as well as the entry of
judgment in the corresponding action or proceeding, are pre-requisites for the taking of other measures
against the persons of the judges concerned, whether of civil, administrative, or criminal nature. It is only
after the available judicial remedies have been exhausted and the appellate tribunals have spoken with
finality, that the door to an inquiry into his criminal, civil, or administrative liability may be said to have
opened, or closed.
Law and logic decree that "administrative" or criminal remedies are neither alternative nor cumulative to
judicial review where such review is available, and must wait on the result thereof'. Indeed, since judges
must be free to judge, without pressure or influence from external forces or factors, they should not be
subject to intimidation, the fear of civil, criminal or administrative sanctions for acts they may do and
dispositions they may make in the performance of their duties and functions; and it is sound rule, which
must be recognized independently of statute, that judges are not generally liable for acts done within the
scope of their jurisdiction and in good faith; and that exceptionally, prosecution of the judge can be had only

if "there be a final declaration by a competent court in some appropriate proceeding of the manifestly unjust
character of the challenged judgment or order, and ** also evidence of malice or bad faith, ignorance of
inexcusable negligence, on the part of the judge in rendering said judgment or order" or under the stringent
circumstances set out in Article 32 of the Civil Code.
Considering that the resolution of these issues was foreclosed when the parties entered into a compromise
agreement in the petition for certiorari involving said issues, the Court, in the present administrative case,
will not and cannot resolve the same for obvious reason. The least that the Court can do, under the
circumstances, is to determine whether respondent may be held administratively liable for rendering the
summary judgment.
The 13 issues which were embodied in the Pre-trial Order of the respondent judge are as follows:
1. Whether or not plaintiffs incurred the total expenses of P1,562,145,661.87;
2. Whether or not PAGCOR as a result of the expenditures which FILGAME and Belle agreed to bear
PAGCOR earned P200,000,000.00 goodwill money and a net income of P197,000,000.00;
3. Whether or not plaintiffs have only jointly earned P173,000,000.00 or barely 9% of their total investment
of P1.56 Billion;
4. Whether or not PAGCORs Jai- Alai operations generated gross earnings in the aggregate amount of
P2,826,947,353.00 from June of 1999 to November 30, 2000;
5. Whether or not the average earnings for that period is P157,052,630.73 per month for that same period;
6. Whether or not from the period from June 1999 to November 30, 2000 PAGCOR realized a net income
of P199,738,755.31;
7. Whether or not from the period of June 1999 to November 30, 2000 PAGCOR remitted the amount of
P262,470,808.71 to the BIR;
8. Whether or not with the reactivation of Jai-Alai operations no revenues were generated by the Philippine
government;
9. Whether or not PAGCORs earnings from Jai-Alai operations contributed immensely not only in terms of
boosting governments coffers but directly funding socio-economic projects;
10. Whether or not Belle and FILGAME relying on the representations made by PAGCOR, the OGCC and
the Department of Justice have at all times faithfully complied with their obligations and undertakings with
the end in mind that they will be able to recover their investment and earn a responsible return thereon
before the expiration of the agreement between Belle and PAGCOR on the year 2008;
11. Whether or not Belle and FILGAME made its massive investment of financial and physical capital worth
approximately P1.56 Billion relying upon PAGCORs representation and the Philippine governments
categorical and official representation through the OGCC and Department of Justice that it was legal for
Belle and FILGAME to recover its investment and profit through sharing in the income form (sic) an ongoing
and legally sanctioned Jai-Alai operation carried on by PAGCOR under and in accordance with the June
17, 1999 agreement between plaintiffs and PAGCOR;
12. Whether or not PAGCOR closed the Jai-Alai operations before the finality of the resolution on June 19,
2001 and without legal basis;
13. Whether or not PAGCOR may be required to pay Belle and FILGAME by way of quantum meruit
compensation for the use of facilities and network provided to PAGCOR, and for the services and technical
know how already put to service of PAGCOR and the government for the years 1999 to 2000 based on the
expected return of investment of Belle and FILGAME and the projected income of PAGCOR for the period
ending in 2008.28
A perusal of these issues convinces us that issues no. 1 and no. 13 are genuine issues which necessitate
the presentation of evidence so as to establish plaintiffs FILGAME and BELLEs action for the recovery of

the sum of P1.56 Billion. The Court finds that respondent erred in rendering the summary judgment,
however, respondent could not be held administratively liable. To justify the taking of drastic disciplinary
action, the law requires that the error or mistake of the judge must be gross or patent, malicious, deliberate
or in bad faith.29 These are not present in the instant case. The Investigating Justice finds, and the Court
agrees, that there is no evidence showing that respondent acted with malice in rendering the summary
judgment. This is bolstered by the fact that a judgment by compromise agreement was already rendered by
the CA on the civil case and an entry of judgment was subsequently made.
Moreover, the Court finds that respondent had meticulously explained why he found no genuine issue as to
the fact that plaintiffs are entitled to the recovery of their investments, to wit:
a. The provisions of the June 17, 1999 Agreement between PAGCOR, BELLE and FILGAME (Exh "1")
which gave PAGCOR the power to manage/operate and control all aspects of Jai-Alai operation, and the
duty to both maintain separate accounts, ledgers and other records and to render periodic accounting and
financial reports relative to Jai-Alai operation.
b. The fact that the Managing Head for Finance of PAGCORs Jai-Alai Department, Mrs. Esther H. Reyes,
not only testified that it was part of her job to make financial reports to management, but was able to
produce both records of the daily gross receipts of Jai-Alai operations for September 2000 and October,
2000 and summaries of the results of those operations from June 1999 to October 2000.
c. The fact that PAGCOR counsel, Atty. Carlos R. Bautista, Jr. categorically stipulated that the records of
daily gross receipts and summaries of operations produced by Mrs. Esther H. Reyes are genuine and
prepared by the corresponding Jai-Alai Department of PAGCOR based on PAGCORs records.
d. The fact that FILGAMESs Mr. Cesar Marcelo testified that PAGCOR required BELLE and FILGAME to
submit valuations of the properties contributed by it to the Jai-Alai operations and that FILGAME in
compliance submitted an appraisal report prepared by Cuervo Appraisers, Inc. while BELLE complied by
submitting as an attachment to a letter dated September 15, 1999 to PAGCOR President Mr. Reynaldo Y.
Tenorio an inventory listing the value of the assets contributed by BELLE and FILGAME to the Jai-Alai
operation.30
We reiterate the rule that not every error or mistake that a judge commits in the performance of his duties
renders him liable, unless he is shown to have acted in bad faith or with deliberate intent to do an injustice.
Good faith and absence of malice, corrupt motives or improper considerations are sufficient defenses in
which a judge charged with ignorance of the law can find refuge.31
Anent the claim that there was no hearing conducted on the motion for summary judgment, the same was
with the acquiescence of PAGCORs counsel. The records show that the motion for summary judgment
was set for hearing by plaintiffs on December 1, 2002, i.e., 11 days from service of the motion as required
by the Rules. In the Order dated November 22, 2000 respondent granted PAGCORs prayer to be given 20
days to submit comment/opposition to the motion for summary judgment to copy furnish plaintiffs counsel
who is then given 7 days to file his reply and for PAGCOR to file a rejoinder. The same order states that
thereafter the pending incident shall be considered submitted for resolution. Complainant did not ask for a
hearing or any additional relief. It evidently agreed to the respondents order that upon submission of those
pleadings, the incident would be submitted for resolution. The signature of complainants counsel affixed in
the minutes showed his agreement thereto. In fact, in the Order dated February 10, 2003, the respondent
declared that both parties agreed that the motion and the subsequent pleadings filed are submitted for
resolution. Again, complainants counsel never registered his objections thereto as he in fact affixed his
signature to the minutes thereof. In Ley Construction and Development Corporation vs. Union Bank of the
Philippines,32 the Court held:
Admittedly, there is nothing in the records which indicates that Judge Arcangel conducted a hearing before
he resolved respondents motion for summary judgment. Nevertheless as explained in Carcon
Development Corporation v. Court of Appeals, in proceedings for summary judgment, the court is merely
expected to act chiefly on the basis of what is in the records of the case and that the hearing contemplated
in the Rules is not de riguer as its purpose is merely to determine whether the issues are genuine or not,
and not to receive evidence on the issues set up in the pleadings.33
Considering the foregoing, there exists no valid ground for the disbarment of respondent.

WHEREFORE, the instant administrative complaint against respondent Judge Romulo A. Lopez is
DISMISSED.
SO ORDERED.

SECOND DIVISION
G.R. No. 162525

September 23, 2008

ASEAN PACIFIC PLANNERS, APP CONSTRUCTION AND DEVELOPMENT CORPORATION * AND

CESAR GOCO, petitioners,
vs.
CITY OF URDANETA, CEFERINO J. CAPALAD, WALDO C. DEL CASTILLO, NORBERTO M. DEL
PRADO, JESUS A. ORDONO AND AQUILINO MAGUISA,**, respondents.
DECISION
QUISUMBING, J.:
The instant petition seeks to set aside the Resolutions1 dated April 15, 2003 and February 4, 2004 of the
Court of Appeals in CA-G.R. SP No. 76170.
This case stemmed from a Complaint2 for annulment of contracts with prayer for preliminary prohibitory
injunction and temporary restraining order filed by respondent Waldo C. Del Castillo, in his capacity as
taxpayer, against respondents City of Urdaneta and Ceferino J. Capalad doing business under the name
JJEFWA Builders, and petitioners Asean Pacific Planners (APP) represented by Ronilo G. Goco and Asean
Pacific Planners Construction and Development Corporation (APPCDC) represented by Cesar D. Goco.
Del Castillo alleged that then Urdaneta City Mayor Rodolfo E. Parayno entered into five contracts for the
preliminary design, construction and management of a four-storey twin cinema commercial center and hotel
involving a massive expenditure of public funds amounting to P250 million, funded by a loan from the
Philippine National Bank (PNB). For minimal work, the contractor was allegedly paid P95 million. Del
Castillo also claimed that all the contracts are void because the object is outside the commerce of men.
The object is a piece of land belonging to the public domain and which remains devoted to a public purpose
as a public elementary school. Additionally, he claimed that the contracts, from the feasibility study to
management and lease of the future building, are also void because they were all awarded solely to the
Goco family.
In their Answer,3 APP and APPCDC claimed that the contracts are valid. Urdaneta City Mayor Amadeo R.
Perez, Jr., who filed the city's Answer,4 joined in the defense and asserted that the contracts were properly
executed by then Mayor Parayno with prior authority from the Sangguniang Panlungsod. Mayor Perez also
stated that Del Castillo has no legal capacity to sue and that the complaint states no cause of action. For
respondent Ceferino J. Capalad, Atty. Oscar C. Sahagun filed an Answer5 with compulsory counterclaim
and motion to dismiss on the ground that Del Castillo has no legal standing to sue.
Respondents Norberto M. Del Prado, Jesus A. Ordono and Aquilino Maguisa became parties to the case
when they jointly filed, also in their capacity as taxpayers, a Complaint-in-Intervention6 adopting the
allegations of Del Castillo.
After pre-trial, the Lazaro Law Firm entered its appearance as counsel for Urdaneta City and filed an
Omnibus Motion7 with prayer to (1) withdraw Urdaneta City's Answer; (2) drop Urdaneta City as defendant
and be joined as plaintiff; (3) admit Urdaneta City's complaint; and (4) conduct a new pre-trial. Urdaneta
City allegedly wanted to rectify its position and claimed that inadequate legal representation caused its
inability to file the necessary pleadings in representation of its interests.

In its Order8 dated September 11, 2002, the Regional Trial Court (RTC) of Urdaneta City, Pangasinan,
Branch 45, admitted the entry of appearance of the Lazaro Law Firm and granted the withdrawal of
appearance of the City Prosecutor. It also granted the prayer to drop the city as defendant and admitted its
complaint for consolidation with Del Castillo's complaint, and directed the defendants to answer the city's
complaint.
In its February 14, 2003 Order,9 the RTC denied reconsideration of the September 11, 2002 Order. It also
granted Capalad's motion to expunge all pleadings filed by Atty. Sahagun in his behalf. Capalad was
dropped as defendant, and his complaint filed by Atty. Jorito C. Peralta was admitted and consolidated with
the complaints of Del Castillo and Urdaneta City. The RTC also directed APP and APPCDC to answer
Capalad's complaint.
Aggrieved, APP and APPCDC filed a petition for certiorari before the Court of Appeals. In its April 15, 2003
Resolution, the Court of Appeals dismissed the petition on the following grounds: (1) defective verification
and certification of non-forum shopping, (2) failure of the petitioners to submit certified true copies of the
RTC's assailed orders as mere photocopies were submitted, and (3) lack of written explanation why service
of the petition to adverse parties was not personal.10 The Court of Appeals also denied APP and APPCDC's
motion for reconsideration in its February 4, 2004 Resolution.11
Hence, this petition, which we treat as one for review on certiorari under Rule 45, the proper remedy to
assail the resolutions of the Court of Appeals.12
Petitioners argue that:
I.
THE APPELLATE COURT PALPABLY ERRED AND GRAVELY ABUSED ITS JUDICIAL PREROGATIVES
BY SUMMARILY DISMISSING THE PETITION ON THE BASIS OF PROCEDURAL TECHNICALITIES
DESPITE SUBSTANTIAL COMPLIANCE [THEREWITH]
II.
THE TRIAL COURT PALPABLY ERRED AND GRAVELY ABUSED ITS JUDICIAL PREROGATIVES BY
CAPRICIOUSLY
(a.) Entertaining the taxpayers' suits of private respondents del Castillo, del Prado, Ordono and Maguisa
despite their clear lack of legal standing to file the same.
(b.) Allowing the entry of appearance of a private law firm to represent the City of Urdaneta despite the
clear statutory and jurisprudential prohibitions thereto.
(c.) Allowing Ceferino J. Capalad and the City of Urdaneta to switch sides, by permitting the withdrawal of
their respective answers and admitting their complaints as well as allowing the appearance of Atty. Jorito C.
Peralta to represent Capalad although Atty. Oscar C. Sahagun, his counsel of record, had not withdrawn
from the case, in gross violation of well settled rules and case law on the matter.13
We first resolve whether the Court of Appeals erred in denying reconsideration of its April 15, 2003
Resolution despite APP and APPCDC's subsequent compliance.
Petitioners argue that the Court of Appeals should not have dismissed the petition on mere technicalities
since they have attached the proper documents in their motion for reconsideration and substantially
complied with the rules.
Respondent Urdaneta City maintains that the Court of Appeals correctly dismissed the petition because
Cesar Goco had no proof he was authorized to sign the certification of non-forum shopping in behalf of
APPCDC.
Indeed, Cesar Goco had no proof of his authority to sign the verification and certification of non-forum
shopping of the petition for certiorari filed with the Court of Appeals.14 Thus, the Court of Appeals is allowed
by the rules the discretion to dismiss the petition since only individuals vested with authority by a valid
board resolution may sign the certificate of non-forum shopping in behalf of a corporation. Proof of said

authority must be attached; otherwise, the petition is subject to dismissal.15

However, it must be pointed out that in several cases,16 this Court had considered as substantial
compliance with the procedural requirements the submission in the motion for reconsideration of the
authority to sign the verification and certification, as in this case. The Court notes that the attachments in
the motion for reconsideration show that on March 5, 2003, the Board of Directors of APPCDC authorized
Cesar Goco to institute the petition before the Court of Appeals.17 On March 22, 2003, Ronilo Goco doing
business under the name APP, also appointed his father, Cesar Goco, as his attorney-in-fact to file the
petition.18 When the petition was filed on March 26, 200319 before the Court of Appeals, Cesar Goco was
duly authorized to sign the verification and certification except that the proof of his authority was not
submitted together with the petition.
Similarly, petitioners submitted in the motion for reconsideration certified true copies of the assailed RTC
orders and we may also consider the same as substantial compliance.20 Petitioners also included in the
motion for reconsideration their explanation21 that copies of the petition were personally served on the
Lazaro Law Firm and mailed to the RTC and Atty. Peralta because of distance. The affidavit of service22
supported the explanation. Considering the substantial issues involved, it was thus error for the appellate
court to deny reinstatement of the petition.
Having discussed the procedural issues, we shall now proceed to address the substantive issues raised by
petitioners, rather than remand this case to the Court of Appeals. In our view, the issue, simply put, is: Did
the RTC err and commit grave abuse of discretion in (a) entertaining the taxpayers' suits; (b) allowing a
private law firm to represent Urdaneta City; (c) allowing respondents Capalad and Urdaneta City to switch
from being defendants to becoming complainants; and (d) allowing Capalad's change of attorneys?
On the first point at issue, petitioners argue that a taxpayer may only sue where the act complained of
directly involves illegal disbursement of public funds derived from taxation. The allegation of respondents
Del Castillo, Del Prado, Ordono and Maguisa that the construction of the project is funded by the PNB loan
contradicts the claim regarding illegal disbursement since the funds are not directly derived from taxation.
Respondents Del Castillo, Del Prado, Ordono and Maguisa counter that their personality to sue was not
raised by petitioners APP and APPCDC in their Answer and that this issue was not even discussed in the
RTC's assailed orders.
Petitioners' contentions lack merit. The RTC properly allowed the taxpayers' suits. In Public Interest Center,
Inc. v. Roxas,23 we held:
In the case of taxpayers' suits, the party suing as a taxpayer must prove that he has sufficient interest in
preventing the illegal expenditure of money raised by taxation. Thus, taxpayers have been allowed to sue
where there is a claim that public funds are illegally disbursed or that public money is being deflected to any
improper purpose, or that public funds are wasted through the enforcement of an invalid or unconstitutional
law.
xxxx
Petitioners' allegations in their Amended Complaint that the loan contracts entered into by the Republic and
NPC are serviced or paid through a disbursement of public funds are not disputed by respondents, hence,
they are invested with personality to institute the same.24
Here, the allegation of taxpayers Del Castillo, Del Prado, Ordono and Maguisa that P95 million of the P250
million PNB loan had already been paid for minimal work is sufficient allegation of overpayment, of illegal
disbursement, that invests them with personality to sue. Petitioners do not dispute the allegation as they
merely insist, albeit erroneously, that public funds are not involved. Under Article 195325 of the Civil Code,
the city acquired ownership of the money loaned from PNB, making the money public fund. The city will
have to pay the loan by revenues raised from local taxation or by its internal revenue allotment.
In addition, APP and APPCDC's lack of objection in their Answer on the personality to sue of the four
complainants constitutes waiver to raise the objection under Section 1, Rule 9 of the Rules of Court.26
On the second point, petitioners contend that only the City Prosecutor can represent Urdaneta City and that
law and jurisprudence prohibit the appearance of the Lazaro Law Firm as the city's counsel.

The Lazaro Law Firm, as the city's counsel, counters that the city was inutile defending its cause before the
RTC for lack of needed legal advice. The city has no legal officer and both City Prosecutor and Provincial
Legal Officer are busy. Practical considerations also dictate that the city and Mayor Perez must have the
same counsel since he faces related criminal cases. Citing Mancenido v. Court of Appeals,27 the law firm
states that hiring private counsel is proper where rigid adherence to the law on representation would
deprive a party of his right to redress a valid grievance.28
We cannot agree with the Lazaro Law Firm. Its appearance as Urdaneta City's counsel is against the law
as it provides expressly who should represent it. The City Prosecutor should continue to represent the city.
Section 481(a)29 of the Local Government Code (LGC) of 199130 mandates the appointment of a city legal
officer. Under Section 481(b)(3)(i)31 of the LGC, the city legal officer is supposed to represent the city in all
civil actions, as in this case, and special proceedings wherein the city or any of its officials is a party. In
Ramos v. Court of Appeals,32 we cited that under Section 1933 of Republic Act No. 5185,34 city governments
may already create the position of city legal officer to whom the function of the city fiscal (now prosecutor)
as legal adviser and officer for civil cases of the city shall be transferred.35 In the case of Urdaneta City,
however, the position of city legal officer is still vacant, although its charter36 was enacted way back in
1998.
Because of such vacancy, the City Prosecutor's appearance as counsel of Urdaneta City is proper. The
City Prosecutor remains as the city's legal adviser and officer for civil cases, a function that could not yet be
transferred to the city legal officer. Under the circumstances, the RTC should not have allowed the entry of
appearance of the Lazaro Law Firm vice the City Prosecutor. Notably, the city's Answer was sworn to
before the City Prosecutor by Mayor Perez. The City Prosecutor prepared the city's pre-trial brief and
represented the city in the pre-trial conference. No question was raised against the City Prosecutor's
actions until the Lazaro Law Firm entered its appearance and claimed that the city lacked adequate legal
representation.
Moreover, the appearance of the Lazaro Law Firm as counsel for Urdaneta City is against the law. Section
481(b)(3)(i) of the LGC provides when a special legal officer may be employed, that is, in actions or
proceedings where a component city or municipality is a party adverse to the provincial government. But
this case is not between Urdaneta City and the Province of Pangasinan. And we have consistently held that
a local government unit cannot be represented by private counsel37 as only public officers may act for and
in behalf of public entities and public funds should not be spent to hire private lawyers.38 Pro bono
representation in collaboration with the municipal attorney and prosecutor has not even been allowed.39
Neither is the law firm's appearance justified under the instances listed in Mancenido when local
government officials can be represented by private counsel, such as when a claim for damages could result
in personal liability. No such claim against said officials was made in this case. Note that before it joined the
complainants, the city was the one sued, not its officials. That the firm represents Mayor Perez in criminal
cases, suits in his personal capacity,40 is of no moment.
On the third point, petitioners claim that Urdaneta City is estopped to reverse admissions in its Answer that
the contracts are valid and, in its pre-trial brief, that the execution of the contracts was in good faith.
We disagree. The court may allow amendment of pleadings.
Section 5,41 Rule 10 of the Rules of Court pertinently provides that if evidence is objected to at the trial on
the ground that it is not within the issues raised by the pleadings, the court may allow the pleadings to be
amended and shall do so with liberality if the presentation of the merits of the action and the ends of
substantial justice will be subserved thereby. Objections need not even arise in this case since the Pre-trial
Order42 dated April 1, 2002 already defined as an issue whether the contracts are valid. Thus, what is
needed is presentation of the parties' evidence on the issue. Any evidence of the city for or against the
validity of the contracts will be relevant and admissible. Note also that under Section 5, Rule 10, necessary
amendments to pleadings may be made to cause them to conform to the evidence.
In addition, despite Urdaneta City's judicial admissions, the trial court is still given leeway to consider other
evidence to be presented for said admissions may not necessarily prevail over documentary evidence,43
e.g., the contracts assailed. A party's testimony in open court may also override admissions in the
Answer.44

As regards the RTC's order admitting Capalad's complaint and dropping him as defendant, we find the
same in order. Capalad insists that Atty. Sahagun has no authority to represent him. Atty. Sahagun claims
otherwise. We note, however, that Atty. Sahagun represents petitioners who claim that the contracts are
valid. On the other hand, Capalad filed a complaint for annulment of the contracts. Certainly, Atty. Sahagun
cannot represent totally conflicting interests. Thus, we should expunge all pleadings filed by Atty. Sahagun
in behalf of Capalad.
Relatedly, we affirm the order of the RTC in allowing Capalad's change of attorneys, if we can properly call
it as such, considering Capalad's claim that Atty. Sahagun was never his attorney.
Before we close, notice is taken of the offensive language used by Attys. Oscar C. Sahagun and Antonio B.
Escalante in their pleadings before us and the Court of Appeals. They unfairly called the Court of Appeals a
"court of technicalities"45 for validly dismissing their defectively prepared petition. They also accused the
Court of Appeals of protecting, in their view, "an incompetent judge."46 In explaining the "concededly strong
language," Atty. Sahagun further indicted himself. He said that the Court of Appeals' dismissal of the case
shows its "impatience and readiness to punish petitioners for a perceived slight on its dignity" and such
dismissal "smacks of retaliation and does not augur for the cold neutrality and impartiality demanded of the
appellate court."47
Accordingly, we impose upon Attys. Oscar C. Sahagun and Antonio B. Escalante a fine of P2,00048 each
payable to this Court within ten days from notice and we remind them that they should observe and
maintain the respect due to the Court of Appeals and judicial officers;49 abstain from offensive language
before the courts;50 and not attribute to a Judge motives not supported by the record.51 Similar acts in the
future will be dealt with more severely.
WHEREFORE, we (1) GRANT the petition; (2) SET ASIDE the Resolutions dated April 15, 2003 and
February 4, 2004 of the Court of Appeals in CA-G.R. SP No. 76170; (3) DENY the entry of appearance of
the Lazaro Law Firm in Civil Case No. U-7388 and EXPUNGE all pleadings it filed as counsel of Urdaneta
City; (4) ORDER the City Prosecutor to represent Urdaneta City in Civil Case No. U-7388; (5) AFFIRM the
RTC in admitting the complaint of Capalad; and (6) PROHIBIT Atty. Oscar C. Sahagun from representing
Capalad and EXPUNGE all pleadings that he filed in behalf of Capalad.
Let the records of Civil Case No. U-7388 be remanded to the trial court for further proceedings.
Finally, we IMPOSE a fine of P2,000 each on Attys. Oscar C. Sahagun and Antonio B. Escalante for their
use of offensive language, payable to this Court within ten (10) days from receipt of this Decision.
SO ORDERED.

THIRD DIVISION
G.R. No. 151932

August 19, 2009

HENRY CHING TIU, CHRISTOPHER HALIN GO, and GEORGE CO, Petitioners,
vs.
PHILIPPINE BANK OF COMMUNICATIONS, Respondent.
DECISION
PERALTA, J.:
This is a petition for review on certiorari, under Rule 45 of the Rules of Court, seeking to annul and set
aside the Decision1 dated September 28, 2001, rendered by the Court of Appeals (CA) in CA-G.R. SP No.
57732, dismissing the petition and affirming the assailed Orders of the Regional Trial Court (RTC) of
Cagayan de Oro City, Branch 21 in Civil Case No. 99-352, dated December 14, 1999 and January 11,

2000.
The factual and procedural antecedents are as follows:
In June 1993, Asian Water Resources, Inc. (AWRI), represented by herein petitioners, applied for a real
estate loan with the Philippine Bank of Communications (PBCOM) to fund its purified water distribution
business. In support of the loan application, petitioners submitted a Board Resolution2 dated June 7, 1993.
The loan was guaranteed by collateral over the property covered by Transfer Certificate of Title No. T13020.3 The loan was eventually approved.4
In August 1996, AWRI applied for a bigger loan from PBCOM for additional capitalization using the same
Board Resolution, but without any additional real estate collateral. Considering that the proposed additional
loan was unsecured, PBCOM required all the members of the Board of Directors of AWRI to become
sureties. Thus, on August 16, 1996, a Surety Agreement5 was executed by its Directors and acknowledged
by a notary public on the same date. All copies of the Surety Agreement, except two, were kept by
PBCOM. Of the two copies kept by the notary public, one copy was retained for his notarial file and the
other was sent to the Records Management and Archives Office, through the Office of the RTC Clerk of
Court.6
Thereafter, on December 16, 1998, AWRI informed the bank of its desire to surrender and/or assign in its
favor, all the present properties of the former to apply as dacion en pago for AWRIs existing loan obligation
to the bank.7 On January 11, 1999, PBCOM sent a reply denying the request. On May 12, 1999, PBCOM
sent a letter to petitioners demanding full payment of its obligation to the bank.8
Its demands having remained unheeded, PBCOM instructed its counsel to file a complaint for collection
against petitioners. The case was docketed as Civil Case No. 99-352.
On July 3, 1999, petitioners filed their Answer. It alleged, among other things, that they were not personally
liable on the promissory notes, because they signed the Surety Agreement in their capacities as officers of
AWRI. They claimed that the Surety Agreement attached to the complaint as Annexes "A" to "A-2"9 were
falsified, considering that when they signed the same, the words "In his personal capacity" did not yet
appear in the document and were merely intercalated thereon without their knowledge and consent.10
In support of their allegations, petitioners attached to their Answer a certified photocopy of the Surety
Agreement issued on March 25, 1999 by the Records Management and Archives Office in Davao City,11
showing that the words "In his personal capacity" were not found at the foot of page two of the document
where their signatures appeared.12
Because of this development, PBCOMs counsel searched for and retrieved the file copy of the Surety
Agreement. The notarial copy showed that the words "In his personal capacity" did not appear on page two
of the Surety Agreement.13
Petitioners counsel then asked PBCOM to explain the alteration appearing on the agreement. PBCOM
subsequently discovered that the insertion was ordered by the bank auditor. It alleged that when the Surety
Agreement was inspected by the bank auditor, he called the attention of the loans clerk, Kenneth Cabahug,
as to why the words "In his personal capacity" were not indicated under the signature of each surety, in
accordance with bank standard operating procedures. The auditor then ordered Mr. Cabahug to type the
words "In his personal capacity" below the second signatures of petitioners. However, the notary public was
never informed of the insertion.14 Mr. Cabahug subsequently executed an affidavit15 attesting to the
circumstances why the insertion was made.
PBCOM then filed a Reply and Answer to Counterclaim with Motion for Leave of Court to Substitute Annex
"A" of the Complaint,16 wherein it attached the duplicate original copy retrieved from the file of the notary
public. PBCOM also admitted its mistake in making the insertion and explained that it was made without the
knowledge and consent of the notary public. PBCOM maintained that the insertion was not a falsification,
but was made only to speak the truth of the parties intentions. PBCOM also contended that petitioners
were already primarily liable on the Surety Agreement whether or not the insertion was made, having
admitted in their pleadings that they voluntarily executed and signed the Surety Agreement in the original
form. PBCOM, invoking a liberal application of the Rules, emphasized that the motion incorporated in the
pleading can be treated as a motion for leave of court to amend and admit the amended complaint
pursuant to Section 3, Rule 10 of the Rules of Court.

On December 14, 1999, the RTC issued an Order17 allowing the substitution of the altered document with
the original Surety Agreement, the pertinent portion of which reads:
August 16, 1996 attached as Annexes "A" to "A-2" of the reply and answer Resolving the Motion to
Substitute Annexes "A" to "A-2" of the complaint and the opposition thereto by the defendant, this Court, in
the interest of justice, hereby allows the substitution of said Annexes "A" to "A-2" of the complaint with the
duplicate original of notarial copy of the Agreement dated to counter-claim.
SO ORDERED.
Petitioners filed a motion for reconsideration,18 but it was denied in the Order19 dated January 11, 2000, to
wit:
Resolving the motion for reconsideration and the opposition thereto, the Court finds the motion substantially
a reiteration of the opposition to plaintiffs motion.
Additionally, the instant motion for reconsideration treats on evidentiary matter which can be properly
ventilated in the trial proper, hence, there is no cogent reason to disturb the Courts order of December 14,
1999.
SO ORDERED.
Aggrieved, petitioners sought recourse before the CA via a petition for certiorari under Rule 65 of the Rules
of Court, docketed as CA-G.R. SP No. 57732.
Petitioners claimed that the RTC acted without or in excess of jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction in denying their motion for reconsideration and in allowing
PBCOM to substitute the altered copy of the Surety Agreement with the duplicate original notarial copy
thereof considering that the latters cause of action was solely and principally founded on the falsified
document marked as Annexes "A" to "A-2."20
On September 28, 2001, the CA rendered a Decision dismissing the petition for lack of merit, the decretal
portion of which reads:
WHEREFORE, foregoing considered, the instant petition is hereby DENIED DUE COURSE and,
accordingly, DISMISSED for lack of merit. The assailed Orders dated December 14, 1999 and January 11,
2000 of the Regional Trial Court of Cagayan de Oro City, Branch 21, are hereby AFFIRMED in toto.
SO ORDERED.21
Hence, the petition assigning the following errors:
I
The COURT committed a reversible error in affirming in toto the order of the lower court allowing the
substitution of the falsified document by relying on the provision of section 3, rule 10 of the rules of Court.
II
Acting as the court on the petition for certiorari, the court committed a reversible error having no jurisdiction
to rule on the obligation of the petitioners based on the falsified document
III
The court erred in giving credence to the allegation of respondent bank that from August 15 to December 9,
1997 asian water resources inc. obtained several availments of new bigger and additional loans totalLing
p2,030,000.00 evidenced by 4 promissory notes marked as annexes "B," "B-1," "B-2" and "B-3."
IV
The court failed to consider the misapplication of the principle of equity committed by the lower court in

ordering the substitution of the falsified document.22

Petitioners argue that the CA committed a reversible error in affirming the Order of the RTC allowing the
substitution of the document by relying on Section 3, Rule 10 of the Rules of Court. Petitioners assert that
the Rules do not allow the withdrawal and substitution of a "falsified document" once discovered by the
opposing party.
Petitioners maintain that PBCOMs cause of action was solely and principally founded on the alleged
"falsified document" originally marked as
Annexes "A" to "A-2." Thus, the "withdrawal" of the document results in the automatic withdrawal of the
whole complaint on the ground that there is no more cause of action to be maintained or enforced by
plaintiff against petitioners. Also, petitioners argue that if the substitution will be allowed, their defenses that
were anchored on Annexes "A" to "A-2" would be gravely affected. Moreover, considering that the said
document was already removed, withdrawn, and disregarded by the RTC, the withdrawal and substitution
of the document would prevent petitioners from introducing the falsified documents during the trial as part
of their evidence.23
Petitioners submit that the RTC misapplied the principle of equity when it allowed PBCOM to substitute the
document with the original agreement. Petitioners also claim that the remedy of appeal after the termination
of the case in the RTC would become ineffective and inadequate if the Order of the RTC allowing the
"withdrawal" and "substitution" of the document would not be nullified, because the falsified document
would no longer be found in the records of the case during the appeal.24
Petitioners contend that the CA went beyond the issue raised before it when it interpreted the provisions of
the Surety Agreement, particularly paragraph 4 thereof, and then ruled on the obligations of the parties
based on
the document. Petitioners posit that the CA prematurely ruled on petitioners obligations, considering that
their obligations should be determined during trial on the merits, after the parties have been given the
opportunity to present their evidence in support of their respective claims. Petitioners stress that the CA
went into the merit of the case when it gave credence to the statement of fact of PBCOM that "From August
15 to December 9, 1997, Asian Water Resources, Inc. obtained several availments on its additional loans
totalling P2,030,000.00 as evidenced by 4 promissory notes marked as Annexes B, B-1, B-2, and B-3.
Thus, the conclusion of the CA in declaring the petitioners liable as sureties violated their right to due
process.25
For its part, PBCOM argues that since the complaint is based on an actionable document, i.e., the surety
agreement, the original or a copy thereof should be attached to the pleading as an exhibit, which shall be
deemed part of the pleading. Considering that the surety agreement is annexed to the complaint, it is an
integral part thereof and its substitution with another copy is in the nature of a substantial amendment,
which is allowed by the Rules, but with prior leave of court.
Moreover, PBCOM alleges that since the Rules provides that substantial amendments may be made upon
leave of court, the authority of the RTC to allow the amendment is discretionary. Thus, the CA correctly
held that the act of granting the said substitution was within the clear and proper discretion of the RTC.
The petition is without merit.
As to the substitution of the earlier surety agreement that was annexed to the complaint with the original
thereof, this Court finds that the RTC did not err in allowing the substitution.
The pertinent rule on actionable documents is found in Section 7, Rule 8 of the Rules of Court, which
provides that when the cause of action is anchored on a document, its substance must be set forth, and the
original or a copy thereof "shall" be attached to the pleading as an exhibit and deemed a part thereof, to wit:
Section 7. Action or defense based on document. Whenever an action or defense is based upon a written
instrument or document, the substance of such instrument or document shall be set forth in the pleading,
and the original or a copy thereof shall be attached to the pleading as an exhibit, which shall be deemed to
be a part of the pleading, or said copy may with like effect be set forth in the pleading.

With respect to PBCOMs right to amend its complaint, including the documents annexed thereto, after
petitioners have filed their answer, Section 3, Rule 10 of the Rules of Court specifically allows amendment
by leave of court. The said Section states:
SECTION 3. Amendments by leave of court. Except as provided in the next preceding section, substantial
amendments may be made only upon leave of court. But such leave may be refused if it appears to the
court that the motion was made with intent to delay. Orders of the court upon the matters provided in this
section shall be made upon motion filed in court, and after notice to the adverse party, and an opportunity
to be heard.
This Court has emphasized the import of Section 3, Rule 10 of the 1997 Rules of Civil Procedure in
Valenzuela v. Court of Appeals,26 thus:
Interestingly, Section 3, Rule 10 of the 1997 Rules of Civil Procedure amended the former rule in such
manner that the phrase "or that the cause of action or defense is substantially altered" was stricken-off and
not retained in the new rules. The clear import of such amendment in Section 3, Rule 10 is that under the
new rules, "the amendment may (now) substantially alter the cause of action or defense." This should only
be true, however, when despite a substantial change or alteration in the cause of action or defense, the
amendments sought to be made shall serve the higher interests of substantial justice, and prevent delay
and equally promote the laudable objective of the rules which is to secure a "just, speedy and inexpensive
disposition of every action and proceeding."27
The granting of leave to file amended pleading is a matter particularly addressed to the sound discretion of
the trial court; and that discretion is broad, subject only to the limitations that the amendments should not
substantially change the cause of action or alter the theory of the case, or that it was not made to delay the
action.28 Nevertheless, as enunciated in Valenzuela, even if the amendment substantially alters the cause
of action or defense, such amendment could still be allowed when it is sought to serve the higher interest of
substantial justice; prevent delay; and secure a just, speedy and inexpensive disposition of actions and
proceedings.
The courts should be liberal in allowing amendments to pleadings to avoid a multiplicity of suits and in order
that the real controversies between the parties are presented, their rights determined, and the case decided
on the merits without unnecessary delay. This liberality is greatest in the early stages of a lawsuit,
especially in this case where the amendment was made before the trial of the case, thereby giving the
petitioners all the time allowed by law to answer and to prepare for trial.29
Furthermore, amendments to pleadings are generally favored and should be liberally allowed in furtherance
of justice in order that every case, may so far as possible, be determined on its real facts and in order to
speed up the trial of the case or prevent the circuity of action and unnecessary expense. That is, unless
there are circumstances such as inexcusable delay or the taking of the adverse party by surprise or the
like, which might justify a refusal of permission to amend.30
In the present case, there was no fraudulent intent on the part of PBCOM in submitting the altered surety
agreement. In fact, the bank admitted that it was a mistake on their part to have submitted it in the first
place instead of the original agreement. It also admitted that, through inadvertence, the copy that was
attached to the complaint was the copy wherein the words "IN HIS PERSONAL CAPACITY" were inserted
to conform to the banks standard practice. This alteration was made without the knowledge of the notary
public. PBCOMs counsel had no idea that what it submitted was the altered document, thereby
necessitating the substitution of the surety agreement with the original thereof, in order that the case would
be judiciously resolved.
Verily, it is a cardinal rule of evidence, not just one of technicality but of substance, that the written
document is the best evidence of its own contents. It is also a matter of both principle and policy that when
the written contract is established as the repository of the parties stipulations, any other evidence is
excluded, and the same cannot be used to substitute for such contract, or even to alter or contradict the
latter.31 The original surety agreement is the best evidence that could establish the parties respective rights
and obligations. In effect, the RTC merely allowed the amendment of the complaint, which consequently
included the substitution of the altered surety agreement with a copy of the original.
It is well to remember at this point that rules of procedure are but mere tools designed to facilitate the
attainment of justice. Their strict and rigid application that would result in technicalities that tend to frustrate

rather than promote substantial justice must always be avoided.32 Applied to the instant case, this not only
assures that it would be resolved based on real facts, but would also aid in the speedy disposition of the
case by utilizing the best evidence possible to determine the rights and obligations of the party- litigants.
Moreover, contrary to petitioners contention, they could not be prejudiced by the substitution since they
can still present the substituted documents, Annexes "A" to A-2," as part of the evidence of their affirmative
defenses. The substitution did not prejudice petitioners or delay the action. On the contrary, it tended to
expedite the determination of the controversy. Besides, the petitioners are not precluded from filing the
appropriate criminal action against PBCOM for attaching the altered copy of the surety agreement to the
complaint. The substitution of the documents would not, in any way, erase the existence of falsification, if
any. The case before the RTC is civil in nature, while the alleged falsification is criminal, which is separate
and distinct from another. Thus, the RTC committed no reversible error when it allowed the substitution of
the altered surety agreement with that of the original.
A Petition for Certiorari under Rule 65 of the Rules of Court is intended for the correction of errors of
jurisdiction only or grave abuse of discretion amounting to lack or excess of jurisdiction. Its principal office is
only to keep the inferior court within the parameters of its jurisdiction or to prevent it from committing such a
grave abuse of discretion amounting to lack or excess of jurisdiction.33
For a petition for certiorari to prosper, the essential requisites that have to concur are: (1) the writ is
directed against a tribunal, a board or any officer exercising judicial or quasi-judicial functions; (2) such
tribunal, board or officer has acted without or in excess of jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction; and (3) there is no appeal or any plain, speedy and adequate
remedy in the ordinary course of law.341avvphi1
The phrase without jurisdiction means that the court acted with absolute lack of authority 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. Excess of jurisdiction occurs
when the court transcends its power or acts without any statutory authority; or results when an act, though
within the general power of a tribunal, board or officer (to do) is not authorized, and is 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. Grave abuse of discretion implies such capricious and whimsical exercise of
judgment as to be equivalent to lack or excess of jurisdiction; simply put, power is exercised in an arbitrary
or despotic manner by reason of passion, prejudice, or personal hostility; and such exercise is so patent or
so gross as to amount to an evasion of a positive duty or to a virtual refusal either to perform the duty
enjoined or to act at all in contemplation of law.35
The present case failed to comply with the above-stated requisites. In the instant case, the soundness of
the RTCs Order allowing the substitution of the document involves a matter of judgment and discretion,
which cannot be the proper subject of a petition for certiorari under Rule 65. This rule is only intended to
correct defects of jurisdiction and not to correct errors of procedure or matters in the trial courts findings or
conclusions.
However, this Court agrees with the petitioners contention that the CA should not have made
determinations as regards the parties respective rights based on the surety agreement. The CA went
beyond the issues brought before it and effectively preempted the RTC in making its own determinations. It
is to be noted that the present case is still pending determination by the RTC. The CA should have been
more cautious and not have gone beyond the issues submitted before it in the petition for certiorari;
instead, it should have squarely addressed whether or not there was grave abuse of discretion on the part
of the RTC in issuing the Orders dated December 14, 1999 and January 11, 2000.
WHEREFORE, premises considered, the petition is DENIED. Subject to the above disquisitions, the
Decision of the Court of Appeals in CA-G.R. SP No. 57732, dated September 28, 2001, and the Orders of
the Regional Trial Court of Cagayan de Oro City, Branch 21, in Civil Case No. 99-352, dated December 14,
1999 and January 11, 2000, are AFFIRMED.
SO ORDERED.

THIRD DIVISION
G.R. NO. 158998

March 28, 2008

LIGAYA, CHARITO, PARALUMAN And EFREN, all surnamed BIGLANG-AWA Petitioners,

vs.
PHILIPPINE TRUST COMPANY Respondent.
DECISION
AUSTRIA-MARTINEZ, J.:
Assailed in the present petition for review on certiorari under Rule 45 of the Rules of Court is the Decision1
of the Court of Appeals (CA) promulgated on April 30, 2003 which reversed and set aside the Order dated
August 14 , 2001 of the Regional Trial Court (RTC) of Quezon City, Branch 93; and the CA Resolution of
July 4, 2003, denying the Motion for Reconsideration of Ligaya, Charito, Paraluman and Efren, all
surnamed Biglang-Awa (petitioners).
The facts of the case are as follows:
On November 22, 2000, herein petitioners, together with their mother, Encarnacion Cleofas Vda. de
Biglang-Awa (Encarnacion), filed a Complaint2 for declaration of nullity of deeds, cancellation of titles,
reconveyance and recovery with damages before the RTC of Quezon City against Roberth B. Tolentino
(Tolentino), Philippine Trust Co. (respondent) and the Register of Deeds of Quezon City.
In the complaint, petitioners and Encarnacion alleged that they are the legitimate owners of eight parcels of
land, all located along Quirino Highway, Novaliches Quezon City, to wit:
1) Lot 884-B, Psd-00-043766, covered by Transfer Certificate of Title (TCT) No. N-181964, in the name of
Ligaya Biglang-Awa (Ligaya);
2) Lot 884-C, Psd-00-043766, covered by TCT No. N-181965, in the name of Paraluman Biglang-Awa
(Paraluman);
3)Lot 884-D, Psd-00-043766, covered by TCT No. N-181966, in the name of Hector Biglang-Awa (Hector);
4) Lot 884-E, Psd-00-043766, covered by TCT No. N-181967, in the name of Efren Biglang-Awa (Efren),
and
5) Lots 884-F, 884-G, 884-H and 884-I, all of Psd-00-043766 and covered by TCT Nos. N-181968, N181969, N-181970 and N-181971, respectively, all of which are in the name of Encarnacion.
Petitioners averred that in 1977, without the knowledge and consent of Encarnacion and through fraudulent
manipulations, misrepresentations and the use of falsified documents, Tolentino succeeded in having four
of the eight subject parcels of land, which are in the name of Encarnacion, encumbered by way of
mortgage to secure a loan made by Tolentino with respondent; that on separate occasions in 1998 and
2000, and using similar fraudulent manipulations, misrepresentations and use of falsified documents,
Tolentino was able to secure in his name new Torrens titles over all the eight subject parcels of land.
Subsequently, petitioners caused the annotation of a notice of lis pendens on all the titles registered in the
name of Tolentino.
On January 3, 2001, Tolentino filed a Motion to Dismiss3 on the ground that Ligaya of lack capacity to sue
in behalf of the other plaintiff, and that she has no cause of action considering that she has sold her
property to Tolentino.
On January 4, 2001, Encarnacion filed a Notice of Dismissal4 claiming that the subject complaint was filed
without her permission and/or conformity; that the four parcels of land, titled under her name, and which
formed part of the subject matter of the said complaint, were solely her own; and that she freely and

satisfactorily sold them to Tolentino.

On even date, respondent filed its Answer with Compulsory Counterclaim5 praying that the complaint be
dismissed for failure to state a cause of action against it, and for failure of Encarnacion to verify and certify
the complaint against it.
On February 2, 2001, the RTC issued an Order, to wit:
ACCORDINGLY, the court confirms plaintiff Encarnacion Cleofas vda. de Biglang-Awa's notice of dismissal
pursuant to Section 1, Rule 17 of the 1997 Rules of Civil Procedure as amended.
The action therefore, insofar as plaintiff Encarnacion Cleofas vda. De Biglang-Awa only and all the
defendants are concerned, is DISMISSED with prejudice. Let her name be deleted from the caption of the
complaint.
With this dismissal, there is no further legal obstacle to the cancellation of the notice of lis pendens
annotated on TCT Nos. N-198629; N-198630, N-198631; and N-198632, all in the name of defendant
Roberth B. Tolentino.
SO ORDERED.6 (Emphasis supplied)
Thereafter, Tolentino filed a Motion for Issuance of a Certificate of Finality of the Court's Order of February
2, 2001.
On February 19, 2001, herein petitioners filed a Motion for Reconsideration of the Order of the RTC dated
February 2, 2001.7
Subsequently, petitioners filed a Motion for Leave to Amend Complaint and to Admit Attached Amended
Complaint.8 The Amended Complaint seek to implead Encarnacion petitioner and a sister Liwayway
Biglang-Awa (Liwayway) as party defendants. Petitioners contend that they, together with Encarnacion and
Liwayway are co-owners, pro-indiviso, of the subject parcels of land; that through manipulations and
misrepresentations, Tolentino, Encarnacion and Liwayway were able to secure a partition of and titles over
the disputed properties.
On April 16, 2001, the RTC issued a Resolution pertinent portions of which read as follows:
The following incidents thus, have been submitted to the court for resolution:
1) Motion For Issuance of a Certificate of Finality of the court's order of February 02, 2001;
2) Motion for Reconsideration of the February 02, 2001 order;
3) Motion to Dismiss filed by Tolentino; and
4) Motion For Leave to Amend Complaint
On The Motion For Issuance of a Certificate of Finality
The records show that plaintiffs, other than Encarnacion Cleofas, filed their motion for reconsideration on
February 19, 2001, which is the 15th day counting from February 02, 2001, of the 15-day period within
which a party aggrieved may either appeal or move to reconsider a final order. Thus, a motion for
reconsideration having been filed seasonably, Tolentino's motion for a certificate of finality, perforce, must
be denied as the court hereby denies the same.
On The Motion For Reconsideration
The court notes that the plaintiff's motion for reconsideration was filed not by Encarnacion Cleofas but by
her co-plaintiffs. To the court, the notice of dismissal filed by plaintiff Encarnacion Cleofas Vda. de Biglang
Awa is something that is personal to her. The same having been filed pursuant to Section 1 of Rule 17, the
court's action on her initiative is limited to merely confirming said dismissal. From this confirmatory order of
the court only she and she alone may move to reconsider or move for any other reliefs. Her co-plaintiffs do

not have the standing to ask for any relief arising from the court's action on her notice to dismiss her
complaint. This is especially true considering that the allegations on the complaint mainly concern her only
and the defendants. Whatever rights her co-plaintiffs may have with respect to the complaint will not at all
be prejudiced by the dismissal ordered upon her notice. The motion for reconsideration must likewise be
denied as it is hereby denied.
On The Motion to Dismiss Filed by Tolentino
Insofar as the remaining plaintiffs are concerned, it would appear that whatever cause of action they may
still have against the defendants has been seriously impaired, if not negated, by the notice of dismissal by
plaintiff Encarnacion Cleofas and the apparent lack of standing to sue by plaintiff Ligaya Biglang-Awa on
her behalf as well as of her capacity to sue in behalf of her co-plaintiffs.
With respect to defendant PTC, it is clear that the allegations of the complaint, insofar as the plaintiffs are
concerned, fail to state a cause of action. It is plaintiff Encarnacion Cleofas Vda. de Biglang Awa who had a
cause of action against PTC but this has been done away with by reason of her notice of dismissal.
The court also notes that the complaint fails to allege the value of the real property that is the subject of the
action and for which docket fees ought to be assessed and paid for the court to acquire jurisdiction over the
complaint. The non-payment of the appropriate docket fees is another ground for the dismissal of the
complaint.
The court therefore finds the motion to dismiss by Tolentino as well as by PTC to be in order. Thus, these
motions are granted.
On The Motion For Leave To Amend Complaint
With the grant of the motion to dismiss, the consequent denial of the motion for leave to amend complaint
ought to follow but there is need for some discussion on the matter.
During the hearing on the notice of dismissal and motion to dismiss, plaintiff Encarnacion Cleofas Vda de
Biglang Awa unequivocally told the court among others, that she never met plaintiff's counsel before and
that she never authorized nor engaged counsel to file the present complaint. Thus, her notice to dismiss the
action. This repudiation of a presumed client-attorney relationship is quite disturbing to the court. It
indicates that some "short-cuts" or "cutting corners," to put it mildly, may have been resorted to by counsel
appearing for the plaintiffs.
In light of the foregoing, the motion for leave to amend complaint filed by the same counsel for the plaintiffs
would not appear to be deserving of a favorable response from the court, Moreover, the amendment sought
to be made appears to have drastically altered the causes of action of the parties plaintiffs and parties
defendants between and among themselves.
It is true that an unwilling party plaintiff may be joined as a defendant but this must be set out at the
inception of the complaint. Even if, for the sake of argument, that this joinder may be made via an
amendment, the allegations of the complaint do not clearly indicate that the case involves a party who
refuses to give her consent to be joined as a plaintiff. As revealed in open court during the hearing on the
incidents, the plaintiff Encarnacion Cleaofas Vda. de Biglang Awa has not been made aware at all of the
filing of the complaint and of the reasons therefore. It may not therefore be correctly said that she was an
unwilling co-plaintiff.
Given the prevailing circumstances, the sound exercise of discretion would be to withhold the grant of the
relief prayed for.
WHEREFORE, the foregoing premises considered, the court resolves to:
1) deny defendant Tolentino's motion for issuance of a certificate of finality;
2) deny [petitioners'] motion for reconsideration
3) grant the [respondent's] motion to dismiss; and

4) deny [petitioners'] motion for leave to amend complaint.

The dismissal of the complaint is without prejudice to the commencement of any appropriate action that
may be initiated by the proper party plaintiffs against the proper defendant or defendants.
The previously scheduled hearing on April 20, 2001, is therefore without any further purpose. It is
accordingly cancelled.
SO ORDERED.9 (Emphasis supplied)
On May 2, 2001, Tolentino, filed a Motion for Cancellation of Notice of Lis Pendens10 with respect to the
four parcels of land covered by TCT Nos. N-198629, N-198630, N-198631 and N-198632 derived from the
TCTs of Encarnacion.
On May 3, 2001, herein petitioners filed a Motion for Reconsideration of the April 16, 2001 RTC Resolution
and an Opposition to Tolentino's Motion for Cancellation of Notice of Lis Pendens.11 Respondent filed its
Opposition and Reply to petitioners' Motion for Reconsideration and Opposition. Petitioners filed their
Rejoinder to Opposition and Reply.
On August 14, 2001, the RTC issued an Order denying petitioners motion for reconsideration and
Tolentinos Motion for cancellation of notice of Lis Pendens, thus:
xxxx
The Resolution of April 16, 2001 is clear and comprehensive enough to be misread. Once a case is
dismissed, there is nothing else left to amend. Thus, the futility of a motion to amend. Moreover, there is a
peculiar ingredient in this case, as already discussed in the questioned resolution, that called for the court's
exercise of discretion against an amendment. The arguments raised by the movants fail to persuade the
court that a reconsideration is in order. Upon the other hand, the position taken by [respondent] PTC in its
"Opposition and Reply" is sound and well taken. The court adopts the same insofar as the reconsideration
aspect is concerned.
Anent the motion to cancel the notice of lis pendens and the opposition thereto, the court finds that it may
not be granted at this time in view of the clear pronouncement in the resolution of April 16, 2001 that "the
dismissal of the complaint is without prejudice to the commencement of any appropriate action that may be
initiated by the proper party plaintiffs against the proper defendant or defendants."
The motion for reconsideration and the motion for cancellation of notice of lis pendens are thus both
resolved in the negative.
SO ORDERED.12
On September 19, 2001, respondent filed a motion for reconsideration13 on the ground that RTC ---- dated
Febuary 2, 2001 declaring that there is no further legal _______ to the cancellation of the notice of lis
pendens have already become final and executory.
On August 20, 2001, the RTC issued an Entry of Judgment14 declaring that its Order of February 2, 2001
dismissing the complaint of Encarnacion had become final and executory.
On December 21, 2001, the RTC issued an Order denying respondent's Motion for Reconsideration of the
RTC Order dated August 14, 200115 on the ground that the cancellation of the notice of lis pendens is
"simply not accessible".
Unsatisfied by the August 14, 2001 and December 21, 2001 Orders of the RTC, respondent filed a petition
for certiorari with the CA contending that the RTC is guilty of grave abuse of discretion when it denied the
motion for cancellation of the notices of lis pendens annotated on TCT Nos. N-198629 to N-198632.16 The
case was docketed as CA-G.R. SP No. 69643.
On March 26, 2002, petitioners also filed a petition for certiorari questioning the August 14, 2001 Order of
the RTC. The case was docketed as CA-G.R. SP No. 69842. The issue raised in the said petition is
whether the RTC committed grave abuse of discretion when it granted Tolentino's motion to dismiss and

denied petitioner's motion for leave to admit amended complaint. However, the case was dismissed by the
CA via its Decision17promulgated on February 27, 2004, which became final and executory on August 17,
2004.18
Meanwhile, on April 30, 2003, the CA promulgated the presently assailed Decision with the following
dispositive portion:
WHEREFORE, premises considered, the assailed Order dated August 14, 2001 insofar as it denied the
cancellation of the notice of lis pendens covering TCT Nos. N-198629, N-198630, N-198631, and N198632, and the Order dated December 21, 2001 issued by the public respondent are hereby REVERSED
AND SET ASIDE. It is ordered that the notice of lis pendens annotated at the back of Transfer Certificate of
Title Nos. N-198629, N-198630, N-198631, and N-198632 be immediately canceled.
SO ORDERED.19
Petitioners filed a Motion for Reconsideration but the same was denied by the CA via its Resolution of July
4, 2003.20
Hence, the present petition raising the following issues:
1) Whether or not the Court of Appeals committed an error of law in reversing and setting aside the order of
the RTC dated 14 August 2001 wherein it denied the motion of Roberth B. Tolentino praying for the
cancellation of the lis pendens annotated at the back of torrens titles issued in the name of Encarnacion
Biglang-Awa.
2) Whether or not the Court of Appeals committed an error of law in disregarding the fact that it is [a] matter
of right of the petitioners to amend their complaint prior to the submission of an answer or responsive
pleading by the adverse parties
3) Whether or not the Court of Appeals committed an error of law in finding that the petitioners have no
more cause of action against the respondents since petitioners have no more any "direct or indirect interest
to protect."21
Petitioners contend that the February 2, 2001 Order of the RTC never attained finality because petitioners
were able to seasonably move for its reconsideration; that in its Resolution of April 16, 2001, the RTC
amended and modified its February 2, 2001 Order by ruling that "(t)he dismissal of the complaint is without
prejudice to the commencement of any appropriate action that may be initiated by the proper party plaintiffs
against the proper party defendant or defendants"; that the April 16, 2001 Resolution of the RTC has
become final and executory because none of the defendants filed a motion for its reconsideration.
Petitioners aver that under Section 2, Rule 10 of the Rules of Court, as well as in several rulings of this
Court, a party may amend his pleading once as a matter of right at any time before a responsive pleading is
served; that prior to the filing of Tolentino's answer, petitioners filed an amended complaint wherein they
alleged that they are co-owners of the subject parcels of land and that they have been deprived of their
proper shares in the partition of the said lands through the falsifications committed by the defendants
impleaded in the original and amended complaints.
Petitioners further claim that the CA erred in ruling that there is no longer any legal obstacle to effect the
cancellation of the notice of lis pendens annotated on the titles covering the subject properties since
petitioners do not have any interest to protect. On the contrary, petitioners claim that they will be greatly
prejudiced by the cancellation of the notice of lis pendens on TCT Nos. N-198629, N-198630, N-198631,
and N-198632 because they are co-owners pro-indiviso of the eight parcels of land subject of the instant
case; that the dismissal of Civil Case No. Q-00-42489 did not ipso facto operate as cancellation of the
notice of lis pendens since such dismissal has not attained finality.
Respondent further counters that under Section 14, Rule 13 of the Rules of Court, a notice of lis pendens
may be canceled after showing that the purpose of the annotation is for molesting the adverse party, or that
it is not necessary to protect the rights of the party who caused it to be annotated; that in the present case,
the CA did not commit any error of law in ordering the cancellation of the notice of lis pendens on the
subject titles as these annotations are clearly not necessary to protect the rights of petitioners.

Respondent further contends that the notice of lis pendens being ordered canceled by the CA refers to
those annotated over the title to the properties which were formerly owned exclusively by Encarnacion; the
order does not include the cancellation of the notice of lis pendens annotated on the titles of the properties
formerly owned by petitioners; that Encarnacion's exclusive ownership of four out of the eight parcels of
land subject of the complaint is confirmed by the petitioners themselves in their complaint; that it is
deceptive for petitioners to continuously refer to the allegations in their amended complaint because such
amended complaint was not admitted by the RTC in its Resolution dated April 16, 2001.
Respondent further argues that the complaint filed by petitioners was already dismissed by the RTC per its
Orders dated February 2, 2001 and April 16, 2001; that the Order of February 2, 2001 was a "dismissal
with prejudice" insofar as it affects the four properties formerly owned by Encarnacion and insofar as
respondent is concerned considering that the latter was merely impleaded as a mortgagee of these
properties; that the Order of the RTC dated April 16, 2001 did not amend its February 2, 2001 Order as the
"dismissal without prejudice" being contemplated by the April 16, 2001 Order refers to the remaining four
properties allegedly owned by petitioners excluding those parcels of land formerly owned by Encarnacion;
that the February 2, 2001 and April 16, 2001 Orders of the RTC had already become final and executory.
Lastly, respondent contends that the petition for certiorari (CA-G.R. SP No. 69842) filed by petitioners with
the CA questioning the propriety of the April 16, 2001 Order of the RTC had already been dismissed by the
CA and that the decision of the CA had already become final and executory.
Premised on the factual circumstances established in the present case, the basic issues to be resolved are:
(1) whether the RTC should have allowed petitioners to amend their complaint against herein respondent,
and (2) whether it is proper to cancel the notice of lis pendens annotated at the back of the Torrens titles
issued in the name of Encarnacion.
The petition is not meritorious.
With respect to the first issue, it is true that petitioners were able to file a Motion for Reconsideration of the
February 2, 2001 Order of the RTC. However, in its April 16, 2001 Resolution, the RTC denied said Motion.
On petition for certiorari filed by petitioners, the CA, in its February 27, 2004 Decision in CA-G.R. SP No.
69842, affirmed the RTC Resolution of April 16, 2001. The CA Decision became final and executory on
August 17, 2004.22 The February 2, 2001 Order of the RTC dismissing the complaint, insofar only as
Encarnacion and all the defendants therein, namely: Tolentino herein respondent and the Register of
Deeds for Quezon City, are concerned, had become final and executory.
The Court likewise agrees that the April 16, 2001 Resolution of the RTC did not amend its February 2, 2001
Order. The subject Resolution concerns the dismissal, without prejudice, of the remaining plaintiffs' (herein
petitioners) complaint, and does not in any way affect the earlier dismissal of the complaint of Encarnacion.
With respect to petitioners' right to amend their Complaint, after respondent had filed its answer, Rule 10 of
the Rules of Court provides:
SEC. 2. Amendments as a matter of right.
A party may amend his pleading once as a matter of right at any time before a responsive pleading is
served or, in the case of a reply, at any time within ten (10) days after it is served.
SEC. 3. Amendments by leave of court
Except as provided in the next preceding Section, substantial amendments may be made only upon leave
of court. But such leave may be refused if it appears to the court that the motion was made with intent to
delay. Orders of the Court upon the matters provided in this Section shall be made upon motion filed in
court, and after notice to the adverse party, and an opportunity to be heard. (3a)
In Republic v. Africa23, this Court held that where some but not all of the defendants have answered,
plaintiffs may amend their complaint once, as a matter of right, in respect to claims asserted solely against
the non-answering defendants, but not as to claims asserted against the other defendants.
In the present case, prior to petitioners' filing of their Motion for Leave to Amend Complaint and to Admit
Attached Amended Complaint, respondent already filed its Answer with Counterclaim. Hence, since

respondent had already filed its answer, it follows that petitioners may no longer amend their complaint
against the former as a matter of right. They may do so only upon leave of court, as provided under Section
3, Rule 1024 of the same Rules, which they did by filing their Motion for Leave to Amend Complaint.
In the recent case of Philippine Ports Authority v.William Gothong & Aboitiz (WG&A), Inc.25, this Court, in
discussing the import of Section 3, Rule 10 of the Rules of Court, as amended, held that:
Interestingly, Section 3, Rule 10 of the 1997 Rules of Civil Procedure amended the former rule in such
manner that the phrase "or that the cause of action or defense is substantially altered" was stricken-off and
not retained in the new rules. The clear import of such amendment in Section 3, Rule 10 is that under the
new rules, "the amendment may (now) substantially alter the cause of action or defense." This should only
be true, however when despite a substantial change or alteration in the cause of action or defense, the
amendments sought to be made shall serve the higher interests of substantial justice, and prevent delay
and equally promote the laudable objective of the rules which is to secure a "just, speedy and inexpensive
disposition of every action and proceeding."
On the basis of the foregoing ruling, the denial of petitioners' Motion for Leave to Amend Complaint on the
ground that the amendment "drastically altered the causes of action of the parties plaintiffs and parties
defendants between and among themselves" is erroneous.
Nonetheless, the Court finds that the RTC correctly denied petitioners' Motion for Leave to Amend
Complaint, although for a different reason.
In their original complaint, petitioners claim that the properties covered by TCT Nos. N-198629 to N-198632
were owned exclusively by Encarnacion. There was no mention whatsoever that Encarnacion's titles over
these parcels of land were obtained through fraud or any other illegal means. However, in their Amended
Complaint, where petitioners sought to make Encarnacion and Liwayway as defendants, they subsequently
seek the nullification of Encarnacion's titles over the abovementioned parcels of land by alleging that
petitioners together with Encarncacion and Liwayway are co-owners of all the subject that and the titles
thereto were obtained on the basis of falsified subdivision agreements and subdivision plans.
It should be noted, however, that the basis of the February 2, 2001 Order and April 16, 2001 Resolution of
the trial court, both of which had already become final and executory, is its finding that the four parcels of
land covered by TCT Nos. N-198629 to N-198632 were exclusively owned by Encarnacion. Since the
February 2, 2001 Order and the April 16, 2001 Resolution of the RTC had already become final and
executory, petitioners are already precluded from claiming otherwise. If petitioners are permitted to amend
their complaint they would, in effect, alter a factual conclusion of the RTC which it used as its basis in
rendering its February 2, 2001 Order and April 16, 2001 Resolution. Settled is the rule that a decision that
has acquired finality becomes immutable and unalterable.26 A final judgment may no longer be modified in
any respect, even if the modification is meant to correct erroneous conclusions of fact or law; and whether it
will be made by the court that rendered it or by the highest court in the land.27 The only exceptions to this
rule are the correction of (1) clerical errors, (2) the so-called nunc pro tunc entries which cause no prejudice
to any party, and (3) void judgments.28 None of these exceptions are present in the instant case.1avvphi1
Moreover, the RTC already dismissed the Complaint filed by petitioners for lack of jurisdiction over the
action because petitioners failed to pay the appropriate docket fees. Petitioners did not appeal this ruling of
the RTC. In any case, such order of dismissal had already become final and executory pending resolution
of the present petition. On this basis, the Motion for Leave to Amend Complaint is rendered moot.
As to the second issue, petitioners had categorically declared in their original Complaint that the parcels of
land covered by TCT Nos. N-198629 to N-198632 were previously owned exclusively by Encarnacion. On
this basis, the RTC correctly ruled that petitioners have no cause of action against respondent. In its Order
of February 2, 2001, the RTC affirmed Encarnacion's Notice of Dismissal of her complaint against the
defendants therein. The RTC also ruled that by reason of such dismissal, there is no longer any legal
obstacle to the cancellation of the notice of lis pendens annotated on TCT Nos. N-198629 to N-198632.
However, in its August 14, 2001 Order, the RTC denied Tolentino's Motion for Cancellation of Notice of Lis
Pendens which are annotated on the abovementioned TCTs, Nonetheless, the CA, in its presently assailed
Decision reversed the August 14, 2001 Order of the RTC and directed the cancellation of the notice of lis
pendens annotated on the subject TCTs.
The Court agrees with the CA. The Court's disquisition in Romero v. Court of Appeals29 is instructive, to wit:

Lis pendens, which literally means pending suit, refers to the jurisdiction, power or control which a court
acquires over property involved in a suit, pending the continuance of the action, and until final judgment
Founded upon public policy and necessity, lis pendens is intended to keep the properties in litigation within
the power of the court until the litigation is terminated, and to prevent the defeat of the judgment or decree
by subsequent alienation. Its notice is an announcement to the whole world that a particular property is in
litigation and serves as a warning that one who acquires an interest over said property does so at his own
risk or that he gambles on the result of the litigation over said property.
The filing of a notice of lis pendens has a two-fold effect: (1) to keep the subject matter of the litigation
within the power of the court until the entry of the final judgment to prevent the defeat of the final judgment
by successive alienations; and (2) to bind a purchaser, bona fide or not, of the land subject of the litigation
to the judgment or decree that the court will promulgate subsequently.
While the trial court has inherent power to cancel a notice of lis pendens, such power, meanwhile, is
exercised under express provisions of law. As provided for by Sec. 14, Rule 13 of the 1997 Rules of Civil
Procedure, a notice of lis pendens may be canceled on two grounds: (1) if the annotation was for the
purpose of molesting the title of the adverse party, or (2) when the annotation is not necessary to protect
the title of the party who caused it to be recorded.30
In the instant case, it is established that petitioners have no interest over the properties covered by TCT
Nos. N-198629 to 198632. Hence, the annotation of notices of lis pendens on the abovementioned titles is
not necessary to protect petitioners individual titles over the other properties involved in their complaint.
Furthermore, as the complaint of petitioners was already dismissed without prejudice, and since petitioners
had not filed any other case involving the subject properties, there is no longer any pending suit to speak
of.
Hence, the CA did not commit any error when it ordered the cancellation of the notices of lis pendens
annotated at the back of TCT Nos. N-198629 to N-198632.
Lastly, petitioners insist on their allegations they set forth in their Amended Complaint that they are proindiviso owners of the subject parcels of land and that Encarnacion and Tolentino submitted a falsified
Subdivision Agreement and Subdivision Plan resulting in the partition of and the issuance of title over the
subject properties. Suffice it to say, however, that the RTC Resolution denying petitioners' Motion for Leave
to Amend Complaint had already become final and executory. This only means that the original Complaint
stands. In effect, petitioner cannot use the Amended Complaint as a basis for indemnity that the notice of
lis pendens should not be cancelled as it does not form part of the records.
WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals dated April 30, 2003 and its
Resolution of July 4, 2003 are AFFIRMED.
SO ORDERED.

THIRD DIVISION
G.R. No. 136048

January 23, 2001

JOSE BARITUA and JB LINE, petitioners,

vs.
NIMFA DIVINA MERCADER in her capacity and as guardian of DARWIN, GIOVANNI, RODEL and
DENNIS, all surnamed MERCADER; LEONIDA Vda. de MERCADER on her behalf and on behalf of
her minor child MARY JOY MERCADER; SHIRLEY MERCADER DELA CRUZ; MARIA THERESA
MERCADER-GARCIA; DANILO MERCADER; JOSE DANTE MERCADER; JOSEFINA MERCADER,
respondents.

PANGANIBAN, J.:
The Manchester ruling requiring the payment of docket and other fees as a condition for the acquisition of
jurisdiction has no retroactive effect and applies only to cases filed after its finality.

The Case
Before us is a Petition for Review under Rule 45 of the Rules of Court, assailing the April 17, 1998
Decision1 and the October 28, 1998 Resolution2 of the Court of Appeals (CA) in CA-GR CY No. 40772. The
decretal portion of said Decision reads as follows:
"WHEREFORE, upon all the foregoing premises considered, the DECISION appealed from is AFFIRMED
with the MODIFICATION that the loss of earnings of the late Dominador Mercader is reduced to
P798,000.00."3
The assailed Resolution denied petitioners' Motion for Reconsideration.
The Court of Appeals sustained the Decision of the Regional Trial Court (RTC) of Laoang, Northern Samar
(Branch 21). Except for the modification of the loss of earnings, it affirmed all the monetary damages
granted by the trial court to respondents. The decretal portion of the assailed RTC Decision reads as
follows:4
"WHEREFORE, on preponderance of evidence, judgment is for [herein respondents] and against [herein
petitioners], ordering the latter to pay the former:
(a) As compensatory damages for the death of Dominador Mercader -- P50,000.00;
(b) For the loss of earnings of the late Dominador Mercader -- P1,660,000.00, more or less, based on the
average life span of 75 years from the time of his death who earned a net income of P5,000.00 monthly out
of his business;
(c) Actual damages of P30,000.00 receipted purchases of goods in Manila; P5,750.00 for the first class
coffin and a 15-day wake services evidenced by a receipt marked Exh. 'D'; [P.]850.00 for the 50 x 60
headstone, receipt marked Exh. 'E' and P1,590.00 -- Deed of Absolute Sale of a burial lot, marked Exh. 'F';
(d) 25% of whatever amount is collected by [respondents] from [petitioners] but no less than P50,000.00
plus P1 ,000.00 per hearing by way of attorney's fees;
(e) As moral damages -- P50,000.00;
(f) As exemplary damages -- P30,000.00; and
(g) To pay the costs."

The Facts
The antecedents of the case are succinctly summarized by the Court of Appeals in this wise:
"The original complaint was filed against JB Lines, Inc. [Petitioner JB Lines, Inc.] filed a motion to dismiss
complaint, to strike out false-impertinent matters therefrom, and/or for bill of particulars on the primary
grounds that [respondents] failed to implead Jose Baritua as an indispensable party and that the cause of
action is a suit against a wrong and non-existent party. [Respondents] filed an opposition to the said motion
and an amended complaint.
"In an Order dated December 11, 1984 the trial court denied the aforesaid motion and admitted the
amended complaint of [respondents] impleading Jose Baritua and alleged the following:

'(10) The late Dominador Mercader is a [b]usinessman mainly engaged in the buy and sell of dry goods in
Laoang, N. Samar. He buys his goods from Manila and bring[s] them to Laoang, Northern Samar for sale at
his store located in the said locality;
(11) Sometime on March 16, 1983, the late Dominador Mercader boarded [petitioners'] bus No. 142 with
Plate No. 484 EU at [petitioners'] Manila Station/terminal, bound for Brgy. Rawis, Laoang Northern Samar
as a paying passenger;
(12) At that time, Dominador Mercader had with him as his baggage, assorted goods (i.e. long pants, short
pants, dusters, etc.) which he likewise loaded in [petitioners'] bus;
(13) The late Dominador Mercader was not able to reach his destination considering that on March 17,
1983 at Beily (Bugco) Bridge, Barangay Roxas, Mondragon, Northern Samar, while he was on board
[petitioners'] bus no. 142 with Plate No. 484 EU, the said bus fell into the river as a result of which the late
Dominador Mercader died. x x x.
(14) The accident happened because [petitioners'] driver negligently and recklessly operated the bus at a
fast speed in wanton disregard of traffic rules and regulations and the prevailing conditions then existing
that caused [the] bus to fall into the river.'
"[Respondents] then filed a motion to declare [petitioners] in default which motion was opposed by
[petitioners]. [Respondents] withdrew the said motion prompting the trial court to cancel the scheduled
hearing of the said motion to declare [petitioners] in default in an Order dated January 23, 1985.
"In its answer, [petitioners] denied specifically all the material allegations in the complaint and alleged the
following:
'2. The alleged person of Dominador Mercader did not board bus 142 at [petitioners'] Manila
station/terminal x x x as a (supposed paying passenger). There is even no statement in the complaint that
Dominador Mercader (if it were true that he was a passenger of bus 142 'at the [petitioners'] Manila
station/terminal') was issued any passenger-freight ticket conformably with law and practice. It is a fact of
public knowledge that, in compliance with existing rules and laws, [Petitioner] Baritua, as a public utility
operator, issues, thru his conductors, in appropriate situations, to a true passenger, the familiar and known
passenger and freight ticket which reads in part:
'NOTICE

Baggage carried at owner's risk x x x liability on prepaid freight otherwise declared.

xxx

xxx

xxx

Whole Fare Paid P ___________________________ Declared value x x x.

Description of Freight ________________________

Signature of Owner .'

3. It is also a fact of public knowledge that [Petitioner] Baritua does not have any 'Manila station/terminal,'
because what he has is a Pasay city station.
4. [Petitioner] Baritua had no prior knowledge that, on or about March 17, 1983, and/or previous thereto,
the Bugko Bailey Bridge (across Catarman-Laoang road) in Barangay Roxas, Mondragon, Northern Samar,
was in virtual' dilapida[ted] and dangerous condition, in a state of decay and disrepair, thus calling for the
concerned government and public officials' performance of their coordinative and joint duties and
responsibilities, to repair, improve and maintain that bridge, in good and reasonably safe condition, but, far

from performing or complying with said subject duties and responsibilities, the adverted officials concerned,
without just cause, not only failed and neglected to cause such needed repair, improvement and
maintenance of the Bugko Bailey Bridge, on or prior to March 17, 1983, but also failed, and neglected to
either close the Bugko Bridge to public use and travel, and/or to put appropriate warning and cautionary
signs, for repair, improvement, maintenance, and safety purposes. So that, as a proximate and direct
consequence of the aggregate officials' nonfeasance, bad faith, negligence, serious inefficiency, and
callous indifference to public safety, that Bugko Bridge collapsed inward and caved in ruin, on that March
17, 1983, while Baritua's bus 142 was cautiously and prudently passing and travelling across the said
bridge, as a result of which the bus fell into the river and sea waters, despite the exercise and compliance
by Baritua and his driver of their duties in the matter of their requisite degree of diligence, caution and
prudence, Baritua also exercised and complied with the requisite duty of diligence, care, and prudence in
the selection and supervision over his driver, contrary to the baseless imputation in paragraphs 14 and 20
of the original and amended complaints. Moreover, Baritua and his driver did not violate any traffic rule and
regulation, contrary to plaintiffs' insinuation.
5. Furthermore, [Petitioner] Baritua and his driver have no causative connection with the alleged death of
Dominador Mercader who, according to a reliable source, was already seriously suffering from a lingering
illness even prior to his alleged demise. Baritua also learned lately, and so it is herein alleged that
Dominador Mercader contributed considerably, to, and/or provided the proximate and direct cause of his
own death, hence, he himself is to be blamed for whatever may have happened to him or for whatever may
have been sustained by his supposed heirs, vis--vis the suit against the wrong party.
6. Baritua and his driver, as earlier stated, did not commit any actionable breach of contract with the alleged
Dominador Mercader or the latter's supposed heirs.
7. There is no factual nor any legal basis for plaintiffs' proffered claims for damages.

II. AFFIRMATIVE DEFENSES

8. Based on the preceding averments, plaintiffs have neither a cause nor a right of action against
[Petitioner] Baritua and his driver.
8.1. The allegation that supposedly the 'x x x [p]laintiffs are the compulsory heirs of the late DOMINADOR
MERCADER x x x' (par. 8, complaint) is too vague and too broad, as the subject allegation is a bare and
pure conclusionary averment unaccompanied by the requisite statement of ultimate facts constitutive of a
cause or right of action.
8.2. Even assuming arguendo, without however conceding, plaintiffs statement of a cause of action, the
complaint is nonetheless replete with false and impertinent matters which fit the rule on striking out
pleadings or parts thereof. To mention only a glaring few:
8.2.a. The allegation on exemplary damages x x x is impertinent and immaterial in the complaint against a
supposed employer. For, even theoretically assuming, without however admitting a negligent act-omission
on the part of a driver, nevertheless, in such a hypothetical situation, the causative negligence, if any there
was, is personal to the wrongdoer, i.e., the employee-driver, to the exclusion of the employer.
8.2.b. The allegation on supposed 'minimum life of 75 years' and on 'he expects to earn no less than
P1,680,000.00 x x x is false, a pure hyperbole, and bereft of factual and legal basis. Besides, what
jurisprudential rule refers to is only net earning. The law abhors a claim, akin to plaintiffs' allegation, which
is manifestly speculative, as it may not exist at all. Furthermore, the questioned allegation in the plaintiff's
original and amended complaints is not preceded by the requisite statement of definitive facts, nor of any
specific fact, which could possibly afford a rational basis for a reasonable expectation of supposed earning
that could be lost, or impaired.
8.2.c. Likewise, the allegations that allegedly 'x x x the late Dominador Mercader boarded x x x Bus No.
142 x x x and that supposedly the latter had a baggage x x x containing drygoods x x x in which case
[petitioners have] to pay the value thereof in such amount as may be proven by [respondents] in court
during the trial x x x, apart from being false, are offensive to the rule on concise statement of ultimate facts.
The assailed allegations also contravene Interim Rule 11, '(i)f any demand is for damages in a civil action

the amount thereof must be specifically alleged.' In consequence of this averment, [respondents] have not
yet paid the correct docket fee, for which reason, [respondents'] case may be dismissed on that ground
alone.1wphi1.nt
8.3. In violation also of the same Interim Rule 11, regarding the requisite definitive amount of claim, the
allegation on the supposed funeral expense x x x does not also indicate any specific amount. So with the
averment on supposed moral damage which may not be warranted because of absence of allegation of
fraud or bad faith, if any, there was, apart from want of causative connection with the defendant.
8.4. The allegation in paragraph 15 of the original and amended complaint is also a pure conclusionary
averment, without a factual premise.
9. [Petitioner] JB LINE, impleaded in the amended, complaint, is merely a business name and sole
proprietorship of defendant Baritua. As such, JB Line is not a juridical person, nor an entity authorized by
law to sue and be sued, hence, it cannot legally be a party to any action. With this averment, correlated
with that in paragraphs 4-5 hereof, [respondents'] amended complaint is essentially a suit against a wrong
party."5
The RTC, after due trial, rendered the aforesaid assailed Decision.

Ruling of the Court of Appeals

As earlier stated, the Court of Appeals affirmed the trial court's award of monetary damages in favor of
respondents, except the amount of Dominador Mercader's lost earnings, which it reduced to P798,000. It
held that petitioners failed to rebut the presumption that in the event a passenger died or was injured, the
carrier had acted negligently. Petitioners, it added, presented no sufficient proof that they had exercised
extraordinary diligence.
Hence, this Petition.6

The Issues
In their Memorandum, petitioners submit the following issues for our consideration:

"I
Did the honorable Court of Appeals (CA) gravely abuse its discretion when it allowed to pass sub silencio
the trial court's failure to rule frontally on petitioners' plea for a bill of particulars, and ignored the nature of
respondents' prayer in the complaint pleading for an award of -'a) P12,000.00 -- representing the death compensation;
b) An amount to be proven in court. representing actual damages;
c) P1,660,000.00 or more as may be proven during the trial, by way of loss of earnings;
d) An amount to be proven in court as and by way of funeral expenses;
e) An amount to be proven during the trial representing moral damages;
f) An amount to be determined by this Honorable Court, representing exemplary damages;
g) An amount equivalent to 25% of whatever amount the plaintiffs would be able to collect from the
defendant but in no case less than P50,000.00 plus an additional amount of P1,000.00 per hearing as and
by way of Attorney's fees;'

"II
Did the CA also ignore the fact that the trial court was not paid the correct amount of the docket and other
lawful fees; hence, without jurisdiction over the original and amended complaints or over the subject matter
of the case;

"III
Did the CA likewise arbitrarily disregard petitioners' constitutional right to procedural due process and
fairness when it ignored and thrust aside their right to present evidence and to expect that their evidence
will be duly considered and appreciated; and

"IV.
In awarding excessive and extravagant damages, did the CA and the trial court adhere to the rule that their
assailed decision must state clearly and distinctly the facts and the laws on which they are based?"7

Distilling the alleged errors cited above, petitioners raise two main issues for our consideration: (1) whether
the CA erred in holding that the RTC had jurisdiction over the subject matter of the case, and (2) whether
the CA disregarded petitioners' procedural rights.

The Court's Ruling

The Petition is devoid of merit.

First Issue:
Jurisdiction
Petitioners contend that since the correct amounts of docket and other lawful fees were not paid by
respondents, then the trial court did not acquire jurisdiction over the subject matter of the case.
The Court, in Manchester Development Corporation v. CA,8 held that "[t]he court acquires jurisdiction over
any case only upon the payment of the prescribed docket fee. An amendment of the complaint or similar
pleading will not thereby vest jurisdiction in the court, much less the payment of the docket fee based on
the amounts sought in the amended pleading. x x x."
Generally, the jurisdiction of a court is determined by the statute in force at the commencement of the
action,9 unless such statute provides for its retroactive application.10 Once the jurisdiction of a court
attaches, it continues until the case is finally terminated.11 The trial court cannot be ousted therefrom by
subsequent happenings or events, although of a character that would have prevented jurisdiction from
attaching in the first instance.12
The Manchester ruling, which became final in 1987, has no retroactive application and cannot be invoked in
the subject Complaint filed in 1984. The Court explicitly declared:
"To put a stop to this irregularity, henceforth all complaints, petitions, answers and other similar pleadings
should specify the amount of damages being prayed for not only in the body of the pleading but also in the
prayer, and said damages shall be considered in the assessment of the filing fees in any case. Any

pleading that fails to comply with this requirement shall not be accepted nor admitted, or shall otherwise be
expunged from the record."13 (emphasis supplied)

Second Issue:
Petitioners' Procedural Rights
Motion for a Bill of Particulars
Petitioners argue that the Court of Appeals erred when it passed sub silencio on the trial court's failure to
rule frontally on their plea for a bill of particulars.
We are not impressed. It must be noted that petitioners' counsel manifested in open court his desire to file
a motion for a bill of particulars. The RTC gave him ten days from March 12, 1985 within which to do so.14
He, however, filed the aforesaid motion only on April 2, 1985 or eleven days past the deadline set by the
trial court.15 Moreover, such motion was already moot and academic because, prior to its filing, petitioners
had already filed their answer and several other pleadings to the amended Complaint. Section 1, Rule 12 of
the Rules of Court, provides:
"Section 1. When applied for; purpose. -- Before responding to a pleading, a party may move for a more
definite statement or for a bill of particulars of any matter which is not averred with sufficient definiteness or
particularity to enable him properly to prepare his responsive pleading. If the pleading is a reply, the motion
must be filed within ten (10) days from service thereof. Such motion shall point out the defects complained
of, the paragraphs wherein they are contained, and the details desired."16 (emphasis supplied)

Petitioners' Right to Adduce Evidence

Petitioners also argue that their right to present evidence was violated by the CA, because it did not
consider their contention that the trial judges who heard the case were biased and impartial. Petitioners
contend, as they did before the CA, that Judge Tomas B. Noynay based his Decision" on certain chosen
partial testimonies of [respondents'] witnesses x x x." They further maintain that Judge Fortunato Operario,
who initially handled the case, questioned some witnesses in an overzealous manner and "assum[ed] the
dual role of magistrate and advocate."17
These arguments are not meritorious. First, judges cannot be expected to rely on the testimonies of every
witness. In ascertaining the facts, they determine who are credible and who are not. In doing so, they
consider all the evidence before them. In other words, the mere fact that Judge Noynay based his decision
on the testimonies of respondents' witnesses does not necessarily mean that he did not consider those of
petitioners. Second, we find no sufficient showing that Judge Operario was overzealous in questioning the
witnesses. His questions merely sought to clarify their testimonies. In all, we reject petitioners' contention
that their right to adduce evidence was violated.

Alleged Failure to State Clearly the Facts and the Law

We are not convinced by petitioners' contention, either, that both the trial and the appellate courts failed to
state clearly and distinctly the facts and the law involved in the case. As can be gleaned from their
Decisions, both courts clearly laid down their bases for awarding monetary damages to respondents.
Both the RTC and the CA found that a contract of carriage existed between petitioners and Dominador
Mercader when he boarded Bus No. 142 in Pasay City on March 16, 1983. Petitioners failed to transport
him to his destination, because the bus fell into a river while traversing the Bugko Bailey Bridge. Although
he survived the fall, he later died of asphyxia secondary to drowning.
We agree with the findings of both courts that petitioners failed to observe extraordinary diligence18 that
fateful morning. It must be noted that a common carrier, by the nature of its business and for reasons of

public policy, is bound to carry passengers safely as far as human care and foresight can provide. It is
supposed to do so by using the utmost diligence of very cautious persons, with due regard for all the
circunistances.19 In case of death or injuries to passengers, it is presumed to have been at fault or to have
acted negligently, unless it proves that it observed extraordinary diligence as prescribed in Articles 1733
and 175520 of the Civil Code.1wphi1.nt
We sustain the ruling of the CA that petitioners failed to prove that they had observed extraordinary
diligence.
First, petitioners did not present evidence on the skill or expertise of the driver of Bus No. 142 or the
condition of that vehicle at the time of the incident.
Second, the bus was overloaded at the time. In fact, several individuals were standing when the incident
occurred.21
Third, the bus was overspeeding. Its conductor testified that it had overtaken several buses before it
reached the Bugko Bailey Bridge.22 Moreover, prior to crossing the bridge, it had accelerated and
maintained its speed towards the bridge.23
We therefore believe that there is no reason to overturn the assailed CA Decision, which affirmed that of
the RTC. It is a well-settled rule that the trial court's factual findings, when affirmed by the appellate court,
are conclusive and binding, if they are not tainted with arbitrariness or oversight of some fact or
circumstance of significance and influence.24 As clearly discussed above, petitioners have not presented
sufficient ground to warrant a deviation from this rule.
Finally, we cannot fault the appellate court in its computation of the damages and lost earnings, since it
effectively computed only net earnings in accordance with existing jurisprudence.25
WHEREFORE, the Petition is hereby DENIED, and the assailed Decision AFFIRMED. Costs against
petitioners.
SO ORDERED.

SECOND DIVISION
G.R. No. 165744

August 11, 2008

OSCAR C. REYES, petitioner,

vs.
HON. REGIONAL TRIAL COURT OF MAKATI, Branch 142, ZENITH INSURANCE CORPORATION, and
RODRIGO C. REYES, respondents.
DECISION
BRION, J.:
This Petition for Review on Certiorari under Rule 45 of the Rules of Court seeks to set aside the Decision of
the Court of Appeals (CA)1 promulgated on May 26, 2004 in CA-G.R. SP No. 74970. The CA Decision
affirmed the Order of the Regional Trial Court (RTC), Branch 142, Makati City dated November 29, 20022 in
Civil Case No. 00-1553 (entitled "Accounting of All Corporate Funds and Assets, and Damages") which
denied petitioner Oscar C. Reyes (Oscar) Motion to Declare Complaint as Nuisance or Harassment Suit.
BACKGROUND FACTS
Oscar and private respondent Rodrigo C. Reyes (Rodrigo) are two of the four children of the spouses

Pedro and Anastacia Reyes. Pedro, Anastacia, Oscar, and Rodrigo each owned shares of stock of Zenith
Insurance Corporation (Zenith), a domestic corporation established by their family. Pedro died in 1964,
while Anastacia died in 1993. Although Pedros estate was judicially partitioned among his heirs sometime
in the 1970s, no similar settlement and partition appear to have been made with Anastacias estate, which
included her shareholdings in Zenith. As of June 30, 1990, Anastacia owned 136,598 shares of Zenith;
Oscar and Rodrigo owned 8,715,637 and 4,250 shares, respectively.3
On May 9, 2000, Zenith and Rodrigo filed a complaint4 with the Securities and Exchange Commission
(SEC) against Oscar, docketed as SEC Case No. 05-00-6615. The complaint stated that it is "a derivative
suit initiated and filed by the complainant Rodrigo C. Reyes to obtain an accounting of the funds and
assets of ZENITH INSURANCE CORPORATION which are now or formerly in the control, custody, and/or
possession of respondent [herein petitioner Oscar] and to determine the shares of stock of deceased
spouses Pedro and Anastacia Reyes that were arbitrarily and fraudulently appropriated [by Oscar] for
himself [and] which were not collated and taken into account in the partition, distribution, and/or settlement
of the estate of the deceased spouses, for which he should be ordered to account for all the income from
the time he took these shares of stock, and should now deliver to his brothers and sisters their just and
respective shares."5 [Emphasis supplied.]
In his Answer with Counterclaim,6 Oscar denied the charge that he illegally acquired the shares of
Anastacia Reyes. He asserted, as a defense, that he purchased the subject shares with his own funds from
the unissued stocks of Zenith, and that the suit is not a bona fide derivative suit because the requisites
therefor have not been complied with. He thus questioned the SECs jurisdiction to entertain the complaint
because it pertains to the settlement of the estate of Anastacia Reyes.
When Republic Act (R.A.) No. 87997 took effect, the SECs exclusive and original jurisdiction over cases
enumerated in Section 5 of Presidential Decree (P.D.) No. 902-A was transferred to the RTC designated as
a special commercial court.8 The records of Rodrigos SEC case were thus turned over to the RTC, Branch
142, Makati, and docketed as Civil Case No. 00-1553.
On October 22, 2002, Oscar filed a Motion to Declare Complaint as Nuisance or Harassment Suit.9 He
claimed that the complaint is a mere nuisance or harassment suit and should, according to the Interim
Rules of Procedure for Intra-Corporate Controversies, be dismissed; and that it is not a bona fide derivative
suit as it partakes of the nature of a petition for the settlement of estate of the deceased Anastacia that is
outside the jurisdiction of a special commercial court. The RTC, in its Order dated November 29, 2002
(RTC Order), denied the motion in part and declared:
A close reading of the Complaint disclosed the presence of two (2) causes of action, namely: a) a derivative
suit for accounting of the funds and assets of the corporation which are in the control, custody, and/or
possession of the respondent [herein petitioner Oscar] with prayer to appoint a management committee;
and b) an action for determination of the shares of stock of deceased spouses Pedro and Anastacia Reyes
allegedly taken by respondent, its accounting and the corresponding delivery of these shares to the parties
brothers and sisters. The latter is not a derivative suit and should properly be threshed out in a petition for
settlement of estate.
Accordingly, the motion is denied. However, only the derivative suit consisting of the first cause of action
will be taken cognizance of by this Court.10
Oscar thereupon went to the CA on a petition for certiorari, prohibition, and mandamus11 and prayed that
the RTC Order be annulled and set aside and that the trial court be prohibited from continuing with the
proceedings. The appellate court affirmed the RTC Order and denied the petition in its Decision dated May
26, 2004. It likewise denied Oscars motion for reconsideration in a Resolution dated October 21, 2004.
Petitioner now comes before us on appeal through a petition for review on certiorari under Rule 45 of the
Rules of Court.
ASSIGNMENT OF ERRORS
Petitioner Oscar presents the following points as conclusions the CA should have made:
1. that the complaint is a mere nuisance or harassment suit that should be dismissed under the Interim
Rules of Procedure of Intra-Corporate Controversies; and

2. that the complaint is not a bona fide derivative suit but is in fact in the nature of a petition for settlement
of estate; hence, it is outside the jurisdiction of the RTC acting as a special commercial court.
Accordingly, he prays for the setting aside and annulment of the CA decision and resolution, and the
dismissal of Rodrigos complaint before the RTC.
THE COURTS RULING
We find the petition meritorious.
The core question for our determination is whether the trial court, sitting as a special commercial court, has
jurisdiction over the subject matter of Rodrigos complaint. To resolve it, we rely on the judicial principle that
"jurisdiction over the subject matter of a case is conferred by law and is determined by the allegations of
the complaint, irrespective of whether the plaintiff is entitled to all or some of the claims asserted therein."12
JURISDICTION OF SPECIAL COMMERCIAL COURTS
P.D. No. 902-A enumerates the cases over which the SEC (now the RTC acting as a special commercial
court) exercises exclusive jurisdiction:
SECTION 5. In addition to the regulatory and adjudicative functions of the Securities and Exchange
Commission over corporations, partnership, and other forms of associations registered with it as expressly
granted under existing laws and decrees, it shall have original and exclusive jurisdiction to hear and decide
cases involving:
a) Devices or schemes employed by or any acts of the board of directors, business associates, its officers
or partners, amounting to fraud and misrepresentation which may be detrimental to the interest of the public
and/or of the stockholders, partners, members of associations or organizations registered with the
Commission.
b) Controversies arising out of intra-corporate or partnership relations, between and among stockholders,
members, or associates; between any or all of them and the corporation, partnership or association of
which they are stockholders, members, or associates, respectively; and between such corporation,
partnership or association and the State insofar as it concerns their individual franchise or right to exist as
such entity; and
c) Controversies in the election or appointment of directors, trustees, officers, or managers of such
corporations, partnerships, or associations.
The allegations set forth in Rodrigos complaint principally invoke Section 5, paragraphs (a) and (b) above
as basis for the exercise of the RTCs special court jurisdiction. Our focus in examining the allegations of
the complaint shall therefore be on these two provisions.
Fraudulent Devices and Schemes
The rule is that a complaint must contain a plain, concise, and direct statement of the ultimate facts
constituting the plaintiffs cause of action and must specify the relief sought.13 Section 5, Rule 8 of the
Revised Rules of Court provides that in all averments of fraud or mistake, the circumstances
constituting fraud or mistake must be stated with particularity.14 These rules find specific application
to Section 5(a) of P.D. No. 902-A which speaks of corporate devices or schemes that amount to fraud or
misrepresentation detrimental to the public and/or to the stockholders.
In an attempt to hold Oscar responsible for corporate fraud, Rodrigo alleged in the complaint the following:
3. This is a complaintto determine the shares of stock of the deceased spouses Pedro and
Anastacia Reyes that were arbitrarily and fraudulently appropriated for himself [herein petitioner
Oscar] which were not collated and taken into account in the partition, distribution, and/or settlement of the
estate of the deceased Spouses Pedro and Anastacia Reyes, for which he should be ordered to account
for all the income from the time he took these shares of stock, and should now deliver to his brothers and
sisters their just and respective shares with the corresponding equivalent amount of P7,099,934.82 plus
interest thereon from 1978 representing his obligations to the Associated Citizens Bank that was paid for

his account by his late mother, Anastacia C. Reyes. This amount was not collated or taken into account in
the partition or distribution of the estate of their late mother, Anastacia C. Reyes.
3.1. Respondent Oscar C. Reyes, through other schemes of fraud including misrepresentation,
unilaterally, and for his own benefit, capriciously transferred and took possession and control of
the management of Zenith Insurance Corporation which is considered as a family corporation, and
other properties and businesses belonging to Spouses Pedro and Anastacia Reyes.
xxxx
4.1. During the increase of capitalization of Zenith Insurance Corporation, sometime in 1968, the property
covered by TCT No. 225324 was illegally and fraudulently used by respondent as a collateral.
xxxx
5. The complainant Rodrigo C. Reyes discovered that by some manipulative scheme, the
shareholdings of their deceased mother, Doa Anastacia C. Reyes, shares of stocks and [sic]
valued in the corporate books at P7,699,934.28, more or less, excluding interest and/or dividends, had
been transferred solely in the name of respondent. By such fraudulent manipulations and
misrepresentation, the shareholdings of said respondent Oscar C. Reyes abruptly increased to
P8,715,637.00 [sic] and becomes [sic] the majority stockholder of Zenith Insurance Corporation, which
portion of said shares must be distributed equally amongst the brothers and sisters of the respondent
Oscar C. Reyes including the complainant herein.
xxxx
9.1 The shareholdings of deceased Spouses Pedro Reyes and Anastacia C. Reyes valued at
P7,099,934.28 were illegally and fraudulently transferred solely to the respondents [herein
petitioner Oscar] name and installed himself as a majority stockholder of Zenith Insurance
Corporation [and] thereby deprived his brothers and sisters of their respective equal shares thereof
including complainant hereto.
xxxx
10.1 By refusal of the respondent to account of his [sic] shareholdings in the company, he illegally
and fraudulently transferred solely in his name wherein [sic] the shares of stock of the deceased
Anastacia C. Reyes [which] must be properly collated and/or distributed equally amongst the
children, including the complainant Rodrigo C. Reyes herein, to their damage and prejudice.
xxxx
11.1 By continuous refusal of the respondent to account of his [sic] shareholding with Zenith Insurance
Corporation[,] particularly the number of shares of stocks illegally and fraudulently transferred to him from
their deceased parents Sps. Pedro and Anastacia Reyes[,] which are all subject for collation and/or
partition in equal shares among their children. [Emphasis supplied.]
Allegations of deceit, machination, false pretenses, misrepresentation, and threats are largely conclusions
of law that, without supporting statements of the facts to which the allegations of fraud refer, do not
sufficiently state an effective cause of action.15 The late Justice Jose Feria, a noted authority in Remedial
Law, declared that fraud and mistake are required to be averred with particularity in order to enable the
opposing party to controvert the particular facts allegedly constituting such fraud or mistake.16
Tested against these standards, we find that the charges of fraud against Oscar were not properly
supported by the required factual allegations. While the complaint contained allegations of fraud
purportedly committed by him, these allegations are not particular enough to bring the controversy within
the special commercial courts jurisdiction; they are not statements of ultimate facts, but are mere
conclusions of law: how and why the alleged appropriation of shares can be characterized as "illegal and
fraudulent" were not explained nor elaborated on.
Not every allegation of fraud done in a corporate setting or perpetrated by corporate officers will bring the
case within the special commercial courts jurisdiction. To fall within this jurisdiction, there must be sufficient

nexus showing that the corporations nature, structure, or powers were used to facilitate the fraudulent
device or scheme. Contrary to this concept, the complaint presented a reverse situation. No corporate
power or office was alleged to have facilitated the transfer of the shares; rather, Oscar, as an individual and
without reference to his corporate personality, was alleged to have transferred the shares of Anastacia to
his name, allowing him to become the majority and controlling stockholder of Zenith, and eventually, the
corporations President. This is the essence of the complaint read as a whole and is particularly
demonstrated under the following allegations:
5. The complainant Rodrigo C. Reyes discovered that by some manipulative scheme, the shareholdings of
their deceased mother, Doa Anastacia C. Reyes, shares of stocks and [sic] valued in the corporate books
at P7,699,934.28, more or less, excluding interest and/or dividends, had been transferred solely in the
name of respondent. By such fraudulent manipulations and misrepresentation, the shareholdings of
said respondent Oscar C. Reyes abruptly increased to P8,715,637.00 [sic] and becomes [sic] the
majority stockholder of Zenith Insurance Corporation, which portion of said shares must be distributed
equally amongst the brothers and sisters of the respondent Oscar C. Reyes including the complainant
herein.
xxxx
9.1 The shareholdings of deceased Spouses Pedro Reyes and Anastacia C. Reyes valued at
P7,099,934.28 were illegally and fraudulently transferred solely to the respondents [herein
petitioner Oscar] name and installed himself as a majority stockholder of Zenith Insurance
Corporation [and] thereby deprived his brothers and sisters of their respective equal shares thereof
including complainant hereto. [Emphasis supplied.]
In ordinary cases, the failure to specifically allege the fraudulent acts does not constitute a ground for
dismissal since such defect can be cured by a bill of particulars. In cases governed by the Interim Rules of
Procedure on Intra-Corporate Controversies, however, a bill of particulars is a prohibited pleading.17 It is
essential, therefore, for the complaint to show on its face what are claimed to be the fraudulent corporate
acts if the complainant wishes to invoke the courts special commercial jurisdiction.
We note that twice in the course of this case, Rodrigo had been given the opportunity to study the propriety
of amending or withdrawing the complaint, but he consistently refused. The courts function in resolving
issues of jurisdiction is limited to the review of the allegations of the complaint and, on the basis of these
allegations, to the determination of whether they are of such nature and subject that they fall within the
terms of the law defining the courts jurisdiction. Regretfully, we cannot read into the complaint any
specifically alleged corporate fraud that will call for the exercise of the courts special commercial
jurisdiction. Thus, we cannot affirm the RTCs assumption of jurisdiction over Rodrigos complaint on the
basis of Section 5(a) of P.D. No. 902-A.18
Intra-Corporate Controversy
A review of relevant jurisprudence shows a development in the Courts approach in classifying what
constitutes an intra-corporate controversy. Initially, the main consideration in determining whether a dispute
constitutes an intra-corporate controversy was limited to a consideration of the intra-corporate relationship
existing between or among the parties.19 The types of relationships embraced under Section 5(b), as
declared in the case of Union Glass & Container Corp. v. SEC,20 were as follows:
a) between the corporation, partnership, or association and the public;
b) between the corporation, partnership, or association and its stockholders, partners, members, or officers;
c) between the corporation, partnership, or association and the State as far as its franchise, permit or
license to operate is concerned; and
d) among the stockholders, partners, or associates themselves. [Emphasis supplied.]
The existence of any of the above intra-corporate relations was sufficient to confer jurisdiction to the SEC,
regardless of the subject matter of the dispute. This came to be known as the relationship test.
However, in the 1984 case of DMRC Enterprises v. Esta del Sol Mountain Reserve, Inc.,21 the Court

introduced the nature of the controversy test. We declared in this case that it is not the mere existence of
an intra-corporate relationship that gives rise to an intra-corporate controversy; to rely on the relationship
test alone will divest the regular courts of their jurisdiction for the sole reason that the dispute involves a
corporation, its directors, officers, or stockholders. We saw that there is no legal sense in disregarding or
minimizing the value of the nature of the transactions which gives rise to the dispute.
Under the nature of the controversy test, the incidents of that relationship must also be considered for the
purpose of ascertaining whether the controversy itself is intra-corporate.22 The controversy must not only be
rooted in the existence of an intra-corporate relationship, but must as well pertain to the enforcement of the
parties correlative rights and obligations under the Corporation Code and the internal and intra-corporate
regulatory rules of the corporation. If the relationship and its incidents are merely incidental to the
controversy or if there will still be conflict even if the relationship does not exist, then no intra-corporate
controversy exists.
The Court then combined the two tests and declared that jurisdiction should be determined by considering
not only the status or relationship of the parties, but also the nature of the question under controversy.23
This two-tier test was adopted in the recent case of Speed Distribution, Inc. v. Court of Appeals:24
To determine whether a case involves an intra-corporate controversy, and is to be heard and decided by
the branches of the RTC specifically designated by the Court to try and decide such cases, two elements
must concur: (a) the status or relationship of the parties; and (2) the nature of the question that is the
subject of their controversy.
The first element requires that the controversy must arise out of intra-corporate or partnership relations
between any or all of the parties and the corporation, partnership, or association of which they are
stockholders, members or associates; between any or all of them and the corporation, partnership, or
association of which they are stockholders, members, or associates, respectively; and between such
corporation, partnership, or association and the State insofar as it concerns their individual franchises. The
second element requires that the dispute among the parties be intrinsically connected with the regulation of
the corporation. If the nature of the controversy involves matters that are purely civil in character,
necessarily, the case does not involve an intra-corporate controversy.
Given these standards, we now tackle the question posed for our determination under the specific
circumstances of this case:
Application of the Relationship Test
Is there an intra-corporate relationship between the parties that would characterize the case as an intracorporate dispute?
We point out at the outset that while Rodrigo holds shares of stock in Zenith, he holds them in two
capacities: in his own right with respect to the 4,250 shares registered in his name, and as one of the heirs
of Anastacia Reyes with respect to the 136,598 shares registered in her name. What is material in resolving
the issues of this case under the allegations of the complaint is Rodrigos interest as an heir since the
subject matter of the present controversy centers on the shares of stocks belonging to Anastacia, not on
Rodrigos personally-owned shares nor on his personality as shareholder owning these shares. In this light,
all reference to shares of stocks in this case shall pertain to the shareholdings of the deceased Anastacia
and the parties interest therein as her heirs.
Article 777 of the Civil Code declares that the successional rights are transmitted from the moment of death
of the decedent. Accordingly, upon Anastacias death, her children acquired legal title to her estate (which
title includes her shareholdings in Zenith), and they are, prior to the estates partition, deemed co-owners
thereof.25 This status as co-owners, however, does not immediately and necessarily make them
stockholders of the corporation. Unless and until there is compliance with Section 63 of the Corporation
Code on the manner of transferring shares, the heirs do not become registered stockholders of the
corporation. Section 63 provides:
Section 63. Certificate of stock and transfer of shares. The capital stock of stock corporations shall be
divided into shares for which certificates signed by the president or vice-president, countersigned by the
secretary or assistant secretary, and sealed with the seal of the corporation shall be issued in accordance
with the by-laws. Shares of stock so issued are personal property and may be transferred by delivery of the

certificate or certificates indorsed by the owner or his attorney-in-fact or other person legally authorized to
make the transfer. No transfer, however, shall be valid, except as between the parties, until the
transfer is recorded in the books of the corporation so as to show the names of the parties to the
transaction, the date of the transfer, the number of the certificate or certificates, and the number of
shares transferred. [Emphasis supplied.]
No shares of stock against which the corporation holds any unpaid claim shall be transferable in the books
of the corporation.
Simply stated, the transfer of title by means of succession, though effective and valid between the parties
involved (i.e., between the decedents estate and her heirs), does not bind the corporation and third parties.
The transfer must be registered in the books of the corporation to make the transferee-heir a stockholder
entitled to recognition as such both by the corporation and by third parties.26
We note, in relation with the above statement, that in Abejo v. Dela Cruz27 and TCL Sales Corporation v.
Court of Appeals28 we did not require the registration of the transfer before considering the transferee a
stockholder of the corporation (in effect upholding the existence of an intra-corporate relation between the
parties and bringing the case within the jurisdiction of the SEC as an intra-corporate controversy). A
marked difference, however, exists between these cases and the present one.
In Abejo and TCL Sales, the transferees held definite and uncontested titles to a specific number of
shares of the corporation; after the transferee had established prima facie ownership over the shares of
stocks in question, registration became a mere formality in confirming their status as stockholders. In the
present case, each of Anastacias heirs holds only an undivided interest in the shares. This interest, at this
point, is still inchoate and subject to the outcome of a settlement proceeding; the right of the heirs to
specific, distributive shares of inheritance will not be determined until all the debts of the estate of the
decedent are paid. In short, the heirs are only entitled to what remains after payment of the decedents
debts;29 whether there will be residue remains to be seen. Justice Jurado aptly puts it as follows:
No succession shall be declared unless and until a liquidation of the assets and debts left by the decedent
shall have been made and all his creditors are fully paid. Until a final liquidation is made and all the debts
are paid, the right of the heirs to inherit remains inchoate. This is so because under our rules of procedure,
liquidation is necessary in order to determine whether or not the decedent has left any liquid assets
which may be transmitted to his heirs.30 [Emphasis supplied.]
Rodrigo must, therefore, hurdle two obstacles before he can be considered a stockholder of Zenith with
respect to the shareholdings originally belonging to Anastacia. First, he must prove that there are
shareholdings that will be left to him and his co-heirs, and this can be determined only in a settlement of the
decedents estate. No such proceeding has been commenced to date. Second, he must register the
transfer of the shares allotted to him to make it binding against the corporation. He cannot demand that this
be done unless and until he has established his specific allotment (and prima facie ownership) of the
shares. Without the settlement of Anastacias estate, there can be no definite partition and distribution of
the estate to the heirs. Without the partition and distribution, there can be no registration of the transfer.
And without the registration, we cannot consider the transferee-heir a stockholder who may invoke the
existence of an intra-corporate relationship as premise for an intra-corporate controversy within the
jurisdiction of a special commercial court.
In sum, we find that insofar as the subject shares of stock (i.e., Anastacias shares) are concerned
Rodrigo cannot be considered a stockholder of Zenith. Consequently, we cannot declare that an intracorporate relationship exists that would serve as basis to bring this case within the special commercial
courts jurisdiction under Section 5(b) of PD 902-A, as amended. Rodrigos complaint, therefore, fails the
relationship test.
Application of the Nature of Controversy Test
The body rather than the title of the complaint determines the nature of an action.31 Our examination of the
complaint yields the conclusion that, more than anything else, the complaint is about the protection and
enforcement of successional rights. The controversy it presents is purely civil rather than corporate,
although it is denominated as a "complaint for accounting of all corporate funds and assets."
Contrary to the findings of both the trial and appellate courts, we read only one cause of action alleged in

the complaint. The "derivative suit for accounting of the funds and assets of the corporation which are in the
control, custody, and/or possession of the respondent [herein petitioner Oscar]" does not constitute a
separate cause of action but is, as correctly claimed by Oscar, only an incident to the "action for
determination of the shares of stock of deceased spouses Pedro and Anastacia Reyes allegedly taken by
respondent, its accounting and the corresponding delivery of these shares to the parties brothers and
sisters." There can be no mistake of the relationship between the "accounting" mentioned in the complaint
and the objective of partition and distribution when Rodrigo claimed in paragraph 10.1 of the complaint that:
10.1 By refusal of the respondent to account of [sic] his shareholdings in the company, he illegally and
fraudulently transferred solely in his name wherein [sic] the shares of stock of the deceased Anastacia C.
Reyes [which] must be properly collated and/or distributed equally amongst the children including the
complainant Rodrigo C. Reyes herein to their damage and prejudice.
We particularly note that the complaint contained no sufficient allegation that justified the need for an
accounting other than to determine the extent of Anastacias shareholdings for purposes of distribution.
Another significant indicator that points us to the real nature of the complaint are Rodrigos repeated claims
of illegal and fraudulent transfers of Anastacias shares by Oscar to the prejudice of the other heirs of the
decedent; he cited these allegedly fraudulent acts as basis for his demand for the collation and distribution
of Anastacias shares to the heirs. These claims tell us unequivocally that the present controversy arose
from the parties relationship as heirs of Anastacia and not as shareholders of Zenith. Rodrigo, in filing the
complaint, is enforcing his rights as a co-heir and not as a stockholder of Zenith. The injury he seeks to
remedy is one suffered by an heir (for the impairment of his successional rights) and not by the corporation
nor by Rodrigo as a shareholder on record.
More than the matters of injury and redress, what Rodrigo clearly aims to accomplish through his
allegations of illegal acquisition by Oscar is the distribution of Anastacias shareholdings without a prior
settlement of her estate an objective that, by law and established jurisprudence, cannot be done. The
RTC of Makati, acting as a special commercial court, has no jurisdiction to settle, partition, and distribute
the estate of a deceased. A relevant provision Section 2 of Rule 90 of the Revised Rules of Court that
contemplates properties of the decedent held by one of the heirs declares:
Questions as to advancement made or alleged to have been made by the deceased to any heir may be
heard and determined by the court having jurisdiction of the estate proceedings; and the final order
of the court thereon shall be binding on the person raising the questions and on the heir. [Emphasis
supplied.]
Worth noting are this Courts statements in the case of Natcher v. Court of Appeals:32
Matters which involve settlement and distribution of the estate of the decedent fall within the
exclusive province of the probate court in the exercise of its limited jurisdiction.
xxxx
It is clear that trial courts trying an ordinary action cannot resolve to perform acts pertaining to a
special proceeding because it is subject to specific prescribed rules. [Emphasis supplied.]
That an accounting of the funds and assets of Zenith to determine the extent and value of Anastacias
shareholdings will be undertaken by a probate court and not by a special commercial court is completely
consistent with the probate courts limited jurisdiction. It has the power to enforce an accounting as a
necessary means to its authority to determine the properties included in the inventory of the estate to be
administered, divided up, and distributed. Beyond this, the determination of title or ownership over the
subject shares (whether belonging to Anastacia or Oscar) may be conclusively settled by the probate court
as a question of collation or advancement. We had occasion to recognize the courts authority to act on
questions of title or ownership in a collation or advancement situation in Coca v. Pangilinan33 where we
ruled:
It should be clarified that whether a particular matter should be resolved by the Court of First Instance in the
exercise of its general jurisdiction or of its limited probate jurisdiction is in reality not a jurisdictional
question. In essence, it is a procedural question involving a mode of practice "which may be waived."

As a general rule, the question as to title to property should not be passed upon in the testate or intestate
proceeding. That question should be ventilated in a separate action. That general rule has qualifications or
exceptions justified by expediency and convenience.
Thus, the probate court may provisionally pass upon in an intestate or testate proceeding the question of
inclusion in, or exclusion from, the inventory of a piece of property without prejudice to its final
determination in a separate action.
Although generally, a probate court may not decide a question of title or ownership, yet if the
interested parties are all heirs, or the question is one of collation or advancement, or the parties
consent to the assumption of jurisdiction by the probate court and the rights of third parties are not
impaired, the probate court is competent to decide the question of ownership. [Citations omitted.
Emphasis supplied.]
In sum, we hold that the nature of the present controversy is not one which may be classified as an intracorporate dispute and is beyond the jurisdiction of the special commercial court to resolve. In short,
Rodrigos complaint also fails the nature of the controversy test.
DERIVATIVE SUIT
Rodrigos bare claim that the complaint is a derivative suit will not suffice to confer jurisdiction on the RTC
(as a special commercial court) if he cannot comply with the requisites for the existence of a derivative suit.
These requisites are:
a. the party bringing suit should be a shareholder during the time of the act or transaction complained of,
the number of shares not being material;
b. the party has tried to exhaust intra-corporate remedies, i.e., has made a demand on the board of
directors for the appropriate relief, but the latter has failed or refused to heed his plea; and
c. the cause of action actually devolves on the corporation; the wrongdoing or harm having been or being
caused to the corporation and not to the particular stockholder bringing the suit.34
Based on these standards, we hold that the allegations of the present complaint do not amount to a
derivative suit.
First, as already discussed above, Rodrigo is not a shareholder with respect to the shareholdings originally
belonging to Anastacia; he only stands as a transferee-heir whose rights to the share are inchoate and
unrecorded. With respect to his own individually-held shareholdings, Rodrigo has not alleged any individual
cause or basis as a shareholder on record to proceed against Oscar.
Second, in order that a stockholder may show a right to sue on behalf of the corporation, he must allege
with some particularity in his complaint that he has exhausted his remedies within the corporation by
making a sufficient demand upon the directors or other officers for appropriate relief with the expressed
intent to sue if relief is denied.35 Paragraph 8 of the complaint hardly satisfies this requirement since what
the rule contemplates is the exhaustion of remedies within the corporate setting:
8. As members of the same family, complainant Rodrigo C. Reyes has resorted [to] and exhausted all legal
means of resolving the dispute with the end view of amicably settling the case, but the dispute between
them ensued.
Lastly, we find no injury, actual or threatened, alleged to have been done to the corporation due to Oscars
acts. If indeed he illegally and fraudulently transferred Anastacias shares in his own name, then the
damage is not to the corporation but to his co-heirs; the wrongful transfer did not affect the capital stock or
the assets of Zenith. As already mentioned, neither has Rodrigo alleged any particular cause or
wrongdoing against the corporation that he can champion in his capacity as a shareholder on record.36
In summary, whether as an individual or as a derivative suit, the RTC sitting as special commercial court
has no jurisdiction to hear Rodrigos complaint since what is involved is the determination and distribution
of successional rights to the shareholdings of Anastacia Reyes. Rodrigos proper remedy, under the
circumstances, is to institute a special proceeding for the settlement of the estate of the deceased

Anastacia Reyes, a move that is not foreclosed by the dismissal of his present complaint.
WHEREFORE, we hereby GRANT the petition and REVERSE the decision of the Court of Appeals dated
May 26, 2004 in CA-G.R. SP No. 74970. The complaint before the Regional Trial Court, Branch 142,
Makati, docketed as Civil Case No. 00-1553, is ordered DISMISSED for lack of jurisdiction.
SO ORDERED.

SECOND DIVISION
G.R. No. 148154

December 17, 2007

REPUBLIC OF THE PHILIPPINES, represented by the Presidential Commission on Good

Government (PCGG), petitioner,
vs.
SANDIGANBAYAN (Second Division) and FERDINAND R. MARCOS, JR. (as executor of the estate of
FERDINAND E. MARCOS), respondents.
RESOLUTION
QUISUMBING, J.:
The propriety of filing and granting of a motion for a bill of particulars filed for the estate of a defaulting and
deceased defendant is the main issue in this saga of the protracted legal battle between the Philippine
government and the Marcoses on alleged ill-gotten wealth.
This special civil action for certiorari1 assails two resolutions of the Sandiganbayan ("anti-graft court" or
"court") issued during the preliminary legal skirmishes in this 20-year case:2 (1) the January 31, 2000
Resolution3 which granted the motion for a bill of particulars filed by executor Ferdinand R. Marcos, Jr.
(respondent) on behalf of his father's estate and (2) the March 27, 2001 Resolution4 which denied the
government's motion for reconsideration.
From the records, the antecedent and pertinent facts in this case are as follows:
The administration of then President Corazon C. Aquino successively sued former President Ferdinand E.
Marcos and former First Lady Imelda Romualdez-Marcos (Mrs. Marcos), and their alleged cronies or
dummies before the anti-graft court to recover the alleged ill-gotten wealth that they amassed during the
former president's 20-year rule. Roman A. Cruz, Jr. (Cruz), then president and general manager of the
Government Service Insurance System (GSIS); president of the Philippine Airlines (PAL); chairman and
president of the Hotel Enterprises of the Philippines, Inc., owner of Hyatt Regency Manila; chairman and
president of Manila Hotel Corporation; and chairman of the Commercial Bank of Manila (CBM), is the
alleged crony in this case.
On July 21, 1987, the Presidential Commission on Good Government (PCGG), through the Office of the
Solicitor General, filed a Complaint5 for reconveyance, reversion, accounting, restitution and damages
alleging that Cruz and the Marcoses stole public assets and invested them in several institutions here and
abroad. Specifically, Cruz allegedly purchased, in connivance with the Marcoses, assets whose values are
disproportionate to their legal income, to wit: two residential lots and two condominiums in Baguio City; a
residential building in Makati; a parcel of land and six condominium units in California, USA; and a
residential land in Metro Manila. The PCGG also prayed for the payment of moral damages of P50 billion
and exemplary damages of P1 billion.
On September 18, 1987, Cruz filed an Omnibus Motion to Dismiss, strike out averments in the complaint,
and for a bill of particulars.6

On April 18, 1988, the court ordered that alias summonses be served on the Marcoses who were then in
exile in Hawaii.7 The court likewise admitted the PCGG's Expanded Complaint8 dated April 25, 1988, then
denied Cruz's omnibus motion on July 28, 1988 after finding that the expanded complaint sufficiently states
causes of action and that the matters alleged are specific enough to allow Cruz to prepare a responsive
pleading and for trial.9 On September 15, 1988, Cruz filed his answer ad cautelam.10
On November 10, 1988, the alias summonses on the Marcoses were served at 2338 Makiki Heights,
Honolulu, Hawaii.11 The Marcoses, however, failed to file an answer and were accordingly declared in
default by the anti-graft court on April 6, 1989.12 In Imelda R. Marcos, et al. v. Garchitorena, et al.,13 this
Court upheld the validity of the Marcoses' default status for failure to file an answer within 60 days from
November 10, 1988 when the alias summonses were validly served in their house address in Hawaii.
On September 29, 1989, former President Marcos died in Hawaii. He was substituted by his estate,
represented by Mrs. Marcos and their three children, upon the motion of the PCGG.14
On July 13, 1992, Mrs. Marcos filed a Motion to Set Aside Order of Default,15 which was granted by the
anti-graft court on October 28, 1992.16 In Republic v. Sandiganbayan,17 this Court affirmed the resolution of
the anti-graft court, ruling that Mrs. Marcos had a meritorious defense, and that failure of a party to properly
respond to various complaints brought about by the occurrence of circumstances which ordinary prudence
could not have guarded against, such as being barred from returning to the Philippines, numerous civil and
criminal suits in the United States, deteriorating health of her husband, and the complexities of her legal
battles, is considered as due to fraud, accident and excusable negligence.18
On September 6, 1995, Mrs. Marcos filed her answer,19 arguing that the former President Marcos' wealth is
not ill-gotten and that the civil complaints and proceedings are void for denying them due process. She also
questioned the legality of the PCGG's acts and asked for P20 billion moral and exemplary damages and
P10 million attorney's fees.
On January 11, 1999, after pre-trial briefs had been filed by Cruz, the PCGG, and Mrs. Marcos, the court
directed former President Marcos' children to appear before it or it will proceed with pre-trial and
subsequent proceedings.20
On March 16, 1999, respondent filed a Motion for Leave to File a Responsive Pleading as executor of his
late father's estate.21 The PCGG opposed the motion, citing as ground the absence of a motion to set aside
the default order or any order lifting the default status of former President Marcos.22
On May 28, 1999, the court granted respondent's motion:
xxxx
The Court concedes the plausibility of the stance taken by the Solicitor General that the default Order binds
the estate and the executor for they merely derived their right, if any, from the decedent. Considering
however the complexities of this case, and so that the case as against the other defendants can proceed
smoothly as the stage reached to date is only a continuation of the pre-trial proceedings, the Court, in the
interest of justice and conformably with the discretion granted to it under Section 3 of Rule 9 of the Rules of
Court hereby accords affirmative relief to the prayer sought in the motion.
Accordingly, Ferdinand R. Marcos, Jr.[,] as executor of the [estate of] deceased defendant Ferdinand E.
Marcos[,] is granted a period of ten (10) days from receipt of this Resolution within which to submit his
Responsive Pleading.
x x x x23
Respondent asked for three extensions totaling 35 days to file an answer. The court granted the motions
and gave him until July 17, 1999 to file an answer. But instead of filing an answer, respondent filed on July
16, 1999, a Motion For Bill of Particulars,24 praying for clearer statements of the allegations which he called
"mere conclusions of law, too vague and general to enable defendants to intelligently answer."
The PCGG opposed the motion, arguing that the requested particulars were evidentiary matters; that the
motion was dilatory; and that it contravened the May 28, 1999 Resolution granting respondent's Motion for
Leave to File a Responsive Pleading.25

The anti-graft court, however, upheld respondent, explaining that the allegations against former President
Marcos were vague, general, and were mere conclusions of law. It pointed out that the accusations did not
specify the ultimate facts of former President Marcos' participation in Cruz's alleged accumulation of illgotten wealth, effectively preventing respondent from intelligently preparing an answer. It noted that this
was not the first time the same issue was raised before it, and stressed that this Court had consistently
ruled in favor of the motions for bills of particulars of the defendants in the other ill-gotten wealth cases
involving the Marcoses.
The fallo of the assailed January 31, 2000 Resolution reads:
WHEREFORE, the defendant-movant's motion for bill of particulars is hereby GRANTED.
Accordingly, the plaintiff is hereby ordered to amend pars. 9 and Annex "A", 12 (a) to (e), and 19 in relation
to par-3 of the PRAYER, of the Expanded Complaint, to allege the ultimate facts indicating the nature,
manner, period and extent of participation of Ferdinand E. Marcos in the acts referred to therein, and the
amount of damages to be proven during trial, respectively, within fifteen (15) days from receipt of this
resolution[.]
SO ORDERED.26
Not convinced by petitioner's Motion for Reconsideration,27 the court ruled in the assailed March 27, 2001
Resolution that the motion for a bill of particulars was not dilatory considering that the case was only at its
pre-trial stage and that Section 1,28 Rule 12 of the 1997 Rules of Civil Procedure allows its filing.
In urging us to nullify now the subject resolutions, petitioner, through the PCGG, relies on two grounds:
i.
The motion for bill of particulars contravenes section 3, rule 9 of the 1997 rules [OF] civil procedure.
ii.
The motion for bill of particulars is patently dilatory and bereft of any basis.29
Invoking Section 3,30 Rule 9 of the 1997 Rules of Civil Procedure, petitioner argues that since the default
order against former President Marcos has not been lifted by any court order, respondent cannot file a
motion for a bill of particulars. Petitioner stresses that respondent did not file a motion to lift the default
order as executor of his father's estate; thus, he and the estate cannot take part in the trial.
Petitioner also contends that respondent was granted leave to file an answer to the expanded complaint,
not a motion for a bill of particulars. The anti-graft court should not have accepted the motion for a bill of
particulars after he had filed a motion for leave to file responsive pleading and three successive motions for
extension as the motion for a bill of particulars is dilatory. Petitioner insists that respondent impliedly
admitted that the complaint sufficiently averred factual matters with definiteness to enable him to properly
prepare a responsive pleading because he was able to prepare a draft answer, as stated in his second and
third motions for extension. Petitioner adds that the factual matters in the expanded complaint are clear and
sufficient as Mrs. Marcos and Cruz had already filed their respective answers.
Petitioner also argues that if the assailed Resolutions are enforced, the People will suffer irreparable
damage because petitioner will be forced to prematurely divulge evidentiary matters, which is not a function
of a bill of particulars. Petitioner maintains that paragraph 12, subparagraphs a to e,31 of the expanded
complaint "illustrate the essential acts pertaining to the conspirational acts" between Cruz and former
President Marcos. Petitioner argues that respondent erroneously took out of context the phrase "unlawful
concert" from the rest of the averments in the complaint.
Respondent, for his part, counters that this Court had compelled petitioner in several ill-gotten wealth cases
involving the same issues and parties to comply with the motions for bills of particulars filed by other
defendants on the ground that most, if not all, of the allegations in the similarly worded complaints for the
recovery of alleged ill-gotten wealth consisted of mere conclusions of law and were too vague and general
to enable the defendants to intelligently parry them.

Respondent adds that it is misleading for the Government to argue that the default order against his father
stands because the May 28, 1999 Resolution effectively lifted it; otherwise, he would not have been called
by the court to appear before it and allowed to file a responsive pleading. He stresses that the May 28,
1999 Resolution remains effective for all intents and purposes because petitioner did not file a motion for
reconsideration.
Respondent likewise denies that his motion for a bill of particulars is dilatory as it is petitioner's continued
refusal to submit a bill of particulars which causes the delay and it is petitioner who is "hedging, flip-flopping
and delaying in its prosecution" of Civil Case No. 0006. His draft answer turned out "not an intelligent" one
due to the vagueness of the allegations. He claims that petitioner's actions only mean one thing: it has no
specific information or evidence to show his father's participation in the acts of which petitioner complains.
In its Reply,32 petitioner adds that the acts imputed to former President Marcos were acts that Cruz
committed in conspiracy with the late dictator, and which Cruz could not have done without the participation
of the latter. Petitioner further argues that conspiracies need not be established by direct evidence of the
acts charged but by a number of indefinite acts, conditions and circumstances.
In a nutshell, the ultimate issue is: Did the court commit grave abuse of discretion amounting to lack or
excess of jurisdiction in granting respondent's motion for a bill of particulars as executor of former President
Marcos' estates considering that the deceased defendant was then a defaulting defendant when the motion
was filed?
We rule in the negative, and dismiss the instant petition for utter lack of merit.
Under the Rules of Court, a defending party may be declared in default, upon motion and notice, for failure
to file an answer within the allowable period. As a result, the defaulting party cannot take part in the trial
albeit he is entitled to notice of subsequent proceedings.33
The remedies against a default order are: (1) a motion to set aside the order of default at any time after
discovery thereof and before judgment on the ground that the defendant's failure to file an answer was due
to fraud, accident, mistake or excusable neglect and that the defendant has a meritorious defense; (2) a
motion for new trial within 15 days from receipt of judgment by default, if judgment had already been
rendered before the defendant discovered the default, but before said judgment has become final and
executory; (3) an appeal within 15 days from receipt of judgment by default; (4) a petition for relief from
judgment within 60 days from notice of judgment and within 6 months from entry thereof; and (5) a petition
for certiorari in exceptional circumstances.34
In this case, former President Marcos was declared in default for failure to file an answer. He died in Hawaii
as an exile while this case was pending, since he and his family fled to Hawaii in February 1986 during a
people-power revolt in Metro Manila. His representatives failed to file a motion to lift the order of default.
Nevertheless, respondent, as executor of his father's estate, filed a motion for leave to file a responsive
pleading, three motions for extensions to file an answer, and a motion for bill of particulars all of which were
granted by the anti-graft court.
Given the existence of the default order then, what is the legal effect of the granting of the motions to file a
responsive pleading and bill of particulars? In our view, the effect is that the default order against the former
president is deemed lifted.
Considering that a motion for extension of time to plead is not a litigated motion but an ex parte one, the
granting of which is a matter addressed to the sound discretion of the court; that in some cases we have
allowed defendants to file their answers even after the time fixed for their presentation; that we have set
aside orders of default where defendants' failure to answer on time was excusable; that the pendency of
the motion for a bill of particulars interrupts the period to file a responsive pleading; and considering that no
real injury would result to the interests of petitioner with the granting of the motion for a bill of particulars,
the three motions for extensions of time to file an answer, and the motion with leave to file a responsive
pleading, the anti-graft court has validly clothed respondent with the authority to represent his deceased
father. The only objection to the action of said court would be on a technicality. But on such flimsy
foundation, it would be erroneous to sacrifice the substantial rights of a litigant. Rules of procedure should
be liberally construed to promote their objective in assisting the parties obtain a just, speedy and
inexpensive determination of their case.35

While it is true that there was no positive act on the part of the court to lift the default order because there
was no motion nor order to that effect, the anti-graft court's act of granting respondent the opportunity to file
a responsive pleading meant the lifting of the default order on terms the court deemed proper in the interest
of justice. It was the operative act lifting the default order and thereby reinstating the position of the original
defendant whom respondent is representing, founded on the court's discretionary power to set aside orders
of default.
It is noteworthy that a motion to lift a default order requires no hearing; it need be under oath only and
accompanied by an affidavit of merits showing a meritorious defense.36 And it can be filed "at any time after
notice thereof and before judgment." Thus, the act of the court in entertaining the motions to file a
responsive pleading during the pre-trial stage of the proceedings effectively meant that respondent has
acquired a locus standi in this case. That he filed a motion for a bill of particulars instead of an answer does
not pose an issue because he, as party defendant representing the estate, is allowed to do so under the
Rules of Court to be able to file an intelligent answer. It follows that petitioner's filing of a bill of particulars in
this case is merely a condition precedent to the filing of an answer.
Indeed, failure to file a motion to lift a default order is not procedurally fatal as a defaulted party can even
avail of other remedies mentioned above.
As default judgments are frowned upon, we have been advising the courts below to be liberal in setting
aside default orders to give both parties every chance to present their case fairly without resort to
technicality.37 Judicial experience shows, however, that resort to motions for bills of particulars is
sometimes intended for delay or, even if not so intended, actually result in delay since the reglementary
period for filing a responsive pleading is suspended and the subsequent proceedings are likewise set back
in the meantime. As understood under Section 1 of Rule 12, mentioned above, a motion for a bill of
particulars must be filed within the reglementary period for the filing of a responsive pleading to the
pleading sought to be clarified. This contemplates pleadings which are required by the Rules to be
answered under pain of procedural sanctions, such as default or implied admission of the facts not
responded to.38
But as defaulted defendants are not actually thrown out of court because the Rules see to it that judgments
against them must be in accordance with the law and competent evidence, this Court prefers that the lifting
of default orders be effected before trial courts could receive plaintiffs' evidence and render judgments. This
is so since judgments by default may result in considerable injustice to defendants, necessitating careful
and liberal examination of the grounds in motions seeking to set them aside. The inconvenience and
complications associated with rectifying resultant errors, if defendant justifies his omission to seasonably
answer, far outweigh the gain in time and dispatch of immediately trying the case.39 The fact that former
President Marcos was in exile when he was declared in default, and that he later died still in exile, makes
the belated filing of his answer in this case understandably excusable.
The anti-graft court required the Marcos siblings through its January 11, 1999 Order40 to substitute for their
father without informing them that the latter was already declared in default. They were unaware, therefore,
that they had to immediately tackle the matter of default. Respondent, who stands as the executor of their
father's estate, could assume that everything was in order as far as his standing in court was concerned.
That his motion for leave to file a responsive pleading was granted by the court gave him credible reason
not to doubt the validity of his legal participation in this case. Coupled with his intent to file an answer, once
his motion for a bill of particulars is sufficiently answered by petitioner, the circumstances abovementioned
warrant the affirmation of the anti-graft court's actions now being assailed.
As to the propriety of the granting of the motion for a bill of particulars, we find for respondent as the
allegations against former President Marcos appear obviously couched in general terms. They do not cite
the ultimate facts to show how the Marcoses acted "in unlawful concert" with Cruz in illegally amassing
assets, property and funds in amounts disproportionate to Cruz's lawful income, except that the former
President Marcos was the president at the time.
The pertinent allegations in the expanded complaint subject of the motion for a bill of particulars read as
follows:
11. Defendant Roman A. Cruz, Jr. served as public officer during the Marcos administration. During his . . .
incumbency as public officer, he acquired assets, funds and other property grossly and manifestly
disproportionate to his salaries, lawful income and income from legitimately acquired property.

12. . . . Cruz, Jr., in blatant abuse of his position as Chairman and General Manager of the Government
Service Insurance System (GSIS), as President and Chairman of the Board of Directors of the Philippine
Airlines (PAL), and as Executive Officer of the Commercial Bank of Manila, by himself and/or in unlawful
concert with defendants Ferdinand E. Marcos and Imelda R. Marcos, among others:
(a) purchased through Arconal N.V., a Netherland-Antilles Corporation, a lot and building located at 212
Stockton St., San Francisco, California, for an amount much more than the value of the property at the time
of the sale to the gross and manifest disadvantageous (sic) to plaintiff.
GSIS funds in the amount of $10,653,350.00 were used for the purchase when under the right of first
refusal by PAL contained in the lease agreement with Kevin Hsu and his wife, the owners of the building, a
much lower amount should have been paid.
For the purchase of the building, defendant Cruz allowed the intervention of Sylvia Lichauco as broker
despite the fact that the services of such broker were not necessary and even contrary to existing policies
of PAL to deal directly with the seller. The broker was paid the amount of $300,000.00 resulting to the
prejudice of GSIS and PAL.
(b) Converted and appropriated to . . . own use and benefit funds of the Commercial Bank of Manila, of
which he was Executive Officer at the time.
He caused the disbursement from the funds of the bank of among others, the amount of P81,152.00 for
personal services rendered to him by one Brenda Tuazon.
(c) Entered into an agency agreement on behalf of the Government Service Insurance System with the
Integral Factors Corporation (IFC), to solicit insurance, and effect reinsurance on behalf of the GSIS,
pursuant to which agreement, IFC effected a great part of its reinsurance with INRE Corporation, which,
was a non-insurance company registered in London[,] with defendant . . . Cruz, Jr., as one of its directors.
IFC was allowed to service accounts emanating from government agencies like the Bureau of Buildings,
Philippine National Oil Corporation, National Power Corporation, Ministry of Public Works and Highways
which under the laws are required to insure with and deal directly with the GSIS for their insurance needs.
The intervention of IFC to service these accounts caused the reduction of premium paid to GSIS as a
portion thereof was paid to IFC.
(d) Entered into an agreement with the Asiatic Integrated Corporation (AIC) whereby the GSIS ceded,
transferred, and conveyed property consisting of five (5) adjoining parcels of land situated in Manila
covered by Transfer Certificates of Title (TCT) Nos. 49853, 49854, 49855 and 49856 to AIC in exchange
for AIC property known as the Pinugay Estate located at Tanay, Rizal, covered by TCT No. 271378, under
terms and conditions grossly and manifestly disadvantageous to the government.
The appraised value of the GSIS parcels of land was P14,585,600.00 as of June 25, 1971 while the value
of the Pinugay Estate was P2.00 per square meter or a total amount of P15,219,264.00. But in the barter
agreement, the Pinugay Estate was valued at P5.50 per square meter or a total of P41,852,976.00, thus
GSIS had to pay AIC P27,287,976.00, when it was GSIS which was entitled to payment from AIC for its
failure to pay the rentals of the GSIS property then occupied by it.
(e) purchased three (4) (sic) additional Airbus 300 in an amount much more than the market price at the
time when PAL was in deep financial strain, to the gross and manifest disadvantage of Plaintiff.
On October 29, 1979, defendant Cruz, as President and Chairman of the Board of Directors of . . . (PAL)
authorized the payment of non-refundable deposit of U.S. $200,000.00 even before a meeting of the Board
of Directors of PAL could deliberate and approve the purchase.41
In his motion for a bill of particulars, respondent wanted clarification on the specific nature, manner and
extent of participation of his father in the acquisition of the assets cited above under Cruz; particularly
whether former President Marcos was a beneficial owner of these properties; and the specific manner in
which he acquired such beneficial control.
Also, respondent wanted to know the specific nature, manner, time and extent of support, participation and
collaboration of his father in (1) Cruz's alleged "blatant abuse" as GSIS president and general manager,

PAL president and chairman of the board, and executive officer of the CBM; (2) the purchase of a lot and
building in California using GSIS funds and Cruz's allowing Lichauco as broker in the sale of the lot and
building contrary to PAL policies; (3) Cruz's appropriating to himself CBM funds; (4) Cruz's disbursement of
P81,152 CBM funds for personal services rendered to him by Tuazon; (5) Cruz's entering into an agency
agreement for GSIS with IFC to solicit, insure, and effect reinsurance of GSIS, as result of which IFC
effected a great part of its reinsurance with INRE Corporation, a London-registered non-insurance
company, of which Cruz was one of the directors; (6) Cruz's allowing IFC to service the accounts
emanating from government agencies which were required under the law to insure and deal directly with
the GSIS for their insurance needs; (7) the GSIS-AIC agreement wherein GSIS ceded and conveyed to AIC
five parcels of land in Manila in exchange for AIC's Pinugay Estate in Tanay, Rizal; (8) PAL's purchase of
three Airbus 300 jets for a higher price than the market price; and (9) if former President Marcos was
connected in any way to IFC and INRE Corporation. Respondent likewise asked, what is the specific
amount of damages demanded?
The 1991 Virata-Mapa Doctrine42 prescribes a motion for a bill of particulars, not a motion to dismiss, as the
remedy for perceived ambiguity or vagueness of a complaint for the recovery of ill-gotten wealth,43 which
was similarly worded as the complaint in this case. That doctrine provided protective precedent in favor of
respondent when he filed his motion for a bill of particulars.
While the allegations as to the alleged specific acts of Cruz were clear, they were vague and unclear as to
the acts of the Marcos couple who were allegedly "in unlawful concert with" the former. There was no
factual allegation in the original and expanded complaints on the collaboration of or on the kind of support
extended by former President Marcos to Cruz in the commission of the alleged unlawful acts constituting
the alleged plunder. All the allegations against the Marcoses, aside from being maladroitly laid, were
couched in general terms. The alleged acts, conditions and circumstances that could show the conspiracy
among the defendants were not particularized and sufficiently set forth by petitioner.
That the late president's co-defendants were able to file their respective answers to the complaint does not
necessarily mean that his estate's executor will be able to file an equally intelligent answer, since the
answering defendants' defense might be personal to them.
In dismissing this petition, Tantuico, Jr. v. Republic44 also provides us a cogent jurisprudential guide. There,
the allegations against former President Marcos were also conclusions of law unsupported by factual
premises. The particulars prayed for in the motion for a bill of particulars were also not evidentiary in
nature. In that case, we ruled that the anti-graft court acted with grave abuse of discretion amounting to
lack or excess of jurisdiction in denying an alleged crony's motion for a bill of particulars on a complaint with
similar tenor and wordings as in the case at bar.
Likewise we have ruled in Virata v. Sandiganbayan45 (1993) that Tantuico's applicability to that case was
"ineluctable," and the propriety of the motion for a bill of particulars under Section 1, Rule 12 of the Revised
Rules of Court was beyond dispute.46
In 1996, in the similar case of Republic v. Sandiganbayan (Second Division),47 we also affirmed the
resolutions of the Sandiganbayan granting the motion for a bill of particulars of Marcos' alleged crony,
business tycoon Lucio Tan.48
Phrases like "in flagrant breach of public trust and of their fiduciary obligations as public officers with grave
and scandalous abuse of right and power and in brazen violation of the Constitution and laws," "unjust
enrichment," "embarked upon a systematic plan to accumulate ill-gotten wealth," "arrogated unto himself all
powers of government," are easy and easy to read; they have potential media quotability and they evoke
passion with literary flair, not to mention that it was populist to flaunt those statements in the late 1980s. But
they are just that, accusations by generalization. Motherhood statements they are, although now they might
be a politically incorrect expression and an affront to mothers everywhere, although they best describe the
accusations against the Marcoses in the case at bar.
In Justice Laurel's words, "the administration of justice is not a matter of guesswork."49 The name of the
game is fair play, not foul play. We cannot allow a legal skirmish where, from the start, one of the
protagonists enters the arena with one arm tied to his back.50 We must stress anew that the administration
of justice entails a painstaking, not haphazard, preparation of pleadings.
The facile verbosity with which the legal counsel for the government flaunted the accusation of excesses

against the Marcoses in general terms must be soonest refurbished by a bill of particulars, so that
respondent can properly prepare an intelligent responsive pleading and so that trial in this case will proceed
as expeditiously as possible. To avoid a situation where its pleadings may be found defective, thereby
amounting to a failure to state a cause of action, petitioner for its part must be given the opportunity to file a
bill of particulars. Thus, we are hereby allowing it to supplement its pleadings now, considering that
amendments to pleadings are favored and liberally allowed especially before trial.
Lastly, the allowance of the motion for a more definite statement rests with the sound discretion of the
court. As usual in matters of a discretionary nature, the ruling of the trial court will not be reversed unless
there has been a palpable abuse of discretion or a clearly erroneous order.51 This Court has been liberal in
giving the lower courts the widest latitude of discretion in setting aside default orders justified under the
right to due process principle. Plain justice demands and the law requires no less that defendants must
know what the complaint against them is all about.52
What is important is that this case against the Marcoses and their alleged crony and dummy be decided by
the anti-graft court on the merits, not merely on some procedural faux pas. In the interest of justice, we
need to dispel the impression in the individual respondents' minds that they are being railroaded out of their
rights and properties without due process of law.
WHEREFORE, finding no grave abuse of discretion on the part of the Sandiganbayan in granting
respondent's Motion for Bill of Particulars, the petition is DISMISSED. The Resolutions of the
Sandiganbayan dated January 31, 2000 and March 27, 2001 in Civil Case No. 0006 are AFFIRMED.
Petitioner is ordered to prepare and file a bill of particulars containing the ultimate facts as prayed for by
respondent within twenty (20) days from notice.
SO ORDERED.

THIRD DIVISION
G.R. Nos. 156851-55

February 18, 2008

HEIDE M. ESTANDARTE, petitioner,

vs.
PEOPLE OF THE PHILIPPINES, respondent.
DECISION
AUSTRIA-MARTINEZ, J.:
Before the Court are Petitions for Review on Certiorari under Rule 45 of the Rules of Court, filed by Heide1
M. Estandarte (petitioner) which seek to reverse and set aside the Order2 dated September 24, 2002 of the
Regional Trial Court (RTC) of Bago City, Branch 62 denying the petitioners Motion for Reinvestigation and
the Order3 dated December 20, 2002 of the same court denying petitioners Motion for Reconsideration
issued in consolidated Criminal Case Nos. 1918-1922.
The records disclose the following antecedent facts:
Petitioner was the school principal of the Ramon Torres National High School (RTNHS) in Bago City,
Negros Occidental.4
Sometime in 1998, a group of concerned RTNHS teachers, composed of the Faculty and Personnel Club
Officers and department heads (private complainants), sent an undated letter to the Schools Division of
Bago City (Schools Division)5 attaching a list of 15 irregularities allegedly committed by the petitioner, which

the private complainants requested to be investigated.6

Two complaints were eventually filed by private complainants against petitioner with the Office of the
Ombudsman-Visayas (Ombudsman-Visayas) docketed as OMB-VIS-Crim-99-1094 and OMB-VIS-Crim2000-1127.
The Ombudsman-Visayas forwarded the complaint docketed as OMB-VIS-Crim-99-1094 to the Office of
the City Prosecutor of Bago City (City Prosecutor) for preliminary investigation, pursuant to Section 31 of
Republic Act (R.A.) No. 6770, otherwise known as the Ombudsman Act of 1989.7 The City Prosecutor
served the petitioner with a subpoena on August 28, 2000 and another on August 30, 2000, requiring her to
submit her counter-affidavit.8
On September 6, 2000, instead of filing a counter-affidavit, petitioner filed before the City Prosecutor a
Motion for Bill of Particulars with Motion for Extension of Time to File Counter-Affidavit.9 In the Motion for
Bill of Particulars, petitioner alleged that there were no specific criminal charges that were stated in the
subpoenas. Thus, petitioner insisted that she cannot intelligently prepare her counter-affidavit unless the
criminal charges and the laws she violated are specified.10
On March 10, 2000, the City Prosecutor issued an Order11 attaching the private complainants Bill of
Particulars,12 pertinent portions of which read:
1. That complainants are charging respondent for violation of Sec. 68 and 69 of PD 144513 in connection
with the above-entitled case;
2. That to support their complaint, private complainants adopt the investigation report of the provincial [sic]
Auditor on [sic] complaint No. 23 and 25 which states:
Complaint 23 & 25
The principal Ms. Estandarte accepted cash and in kind donations without being properly channeled and
accounted first by the property custodian and the cash without first deposited in the Trust Fund.
xxxx
and directing the petitioner to file her counter-affidavit.14 Petitioner filed her counter-affidavit limiting herself
only to the charges specified in the Bill of Particulars.15
Thereafter, the City Prosecutor referred the case back to the Ombudsman-Visayas. The latter found
sufficient grounds to hold petitioner liable for five counts of violation of Section 3(e)16 of R.A. No. 3019, as
amended, or the Anti-Graft and Corrupt Practices Act, and filed before the RTC the corresponding
Informations,17 all dated October 12, 2001, with the following charges:
1. In Criminal Case No. 1918, for receiving cash donations from private individuals and establishments in
the total amount P163,400.00;18
2. In Criminal Case No. 1919, for collecting contributions or allowing the collection of contributions in the
amount of P10.00 from the enrollees of the school without authority of law;19
3. In Criminal Case No. 1920, for purchasing guns using the students Trust Fund and registering the same
in her name, depriving the Security Guard of the school of the use of said guns;20
4. In Criminal Case No. 1921, for double charging of the expenses of P1,500.00 incurred for the video
coverage of the coronation night;21
5. In Criminal Case No. 1922, for double charging of the expenses amounting to P45,000.00 incurred in the
repairs of the Home Economics Building of the school.22
The criminal cases were consolidated.
On May 21, 2002, petitioner filed a Motion for Reinvestigation23 before the RTC on the ground that she
cannot allegedly be charged with violation of Sections 68 and 69 of Presidential Decree (P.D.) No. 1445

since she was not a collecting officer. She also asserts that she cannot be charged under Section 3(e) of
R.A. No. 3019, as the acts which she was charged with, did not constitute "manifest partiality, evident bad
faith or inexcusable negligence."24
The RTC, in its assailed Order25 dated September 24, 2002, ruled against the petitioner.26 In denying the
Motion for Reinvestigation, the RTC held that the petitioners claim that her acts for which she is charged
do not constitute "manifest partiality, evident bad faith or grossly inexcusable negligence" and is evidentiary
in nature, and the same can only be appreciated after a full-blown trial.27
Feeling aggrieved, the petitioner filed a Motion for Reconsideration28 of the September 24, 2002 Order.
Petitioner maintains that when the five Informations for the violation of Section 3(e) of R.A. No. 3019 were
filed by the Ombudsman-Visayas, her right to due process was violated; and that the Ombudsman-Visayas
in effect went beyond the Bill of Particulars filed by the private complainants.29
In the other assailed Order30 dated December 20, 2002, the RTC denied the Motion for Reconsideration.31
Hence, herein petition.
Petitioner claims that the RTC erred when it overlooked the following "formulations," viz:
(1) THE HONORABLE OFFICE OF THE OMBUDSMAN (VISAYAS) CANNOT NOW QUESTION THE
"BILL OF PARTICULARS" FILED BY COUNSEL FOR COMPLAINANTS;
(2) WHEN THE HONORABLE OFFICE OF THE OMBUDSMAN WENT BEYOND THE "BILL OF
PARTICULARS" FILED BY THE COMPLAINANTS THROUGH THEIR COUNSEL, SHE WAS
EFFECTIVELY DENIED OF HER RIGHT TO DUE PROCESS.32
The petition is partly meritorious.
The Court shall first discuss the procedural aspect of the case.
The herein assailed RTC Order dated September 24, 2002 denied petitioners Motion for Reinvestigation,
and the other assailed RTC Order dated December 20, 2002 denied her Motion for Reconsideration.
From the RTC, petitioner went straight to this Court via a petition for review on certiorari under Rule 45
apparently on the basis of Section 2(c), Rule 4133 of the Rules of Court, which provides that in all cases
where only questions of law are raised, the appeal from a decision or final order of the RTC shall be to
the Supreme Court by a petition for review on certiorari in accordance with Rule 45.34
However, considering that herein assailed Orders are obviously interlocutory orders, the proper recourse of
petitioner should have been by way of a petition for certiorari as prescribed in Section 1, Rule 41 of the
Rules of Court, which specifically allows the aggrieved party to file a petition for certiorari under Rule 65.35
The herein petition for review on certiorari assails the jurisdiction of the RTC in issuing the Orders in
question denying petitioners Motion for Reinvestigation, on the ground that the five Informations filed
against the petitioner contained charges beyond the Bill of Particulars filed by the private complainants,
thereby depriving her of due process.
The Court has treated a petition for review on certiorari under Rule 45 as a petition for certiorari under Rule
65 of the Rules of Court in cases where the subject of the recourse was one of jurisdiction, or the act
complained of was perpetrated by a court with grave abuse of discretion amounting to lack or excess of
jurisdiction. 36
Moreover, in the exercise of its equity jurisdiction, the Court may disregard procedural lapses so that a case
may be resolved on its merits based on records and evidence of the parties.37 Proceeding from the timehonored principle that rules of procedure should promote, not defeat substantial justice, the Court may opt
to apply the Rules liberally to resolve the substantial issues raised by the parties.38
Accordingly, the Court shall treat the instant petition as a petition for certiorari under Rule 65 of the Rules of
Court since the primordial issue to be resolved is whether the trial court acted with grave abuse of
discretion amounting to lack or excess of jurisdiction in denying petitioners Motion for Reinvestigation.

Thus, the Court will now proceed to determine the merits of the present petition.
On the first assigned error, petitioner insists that the Ombudsman-Visayas should have limited the charges
filed against her to the crimes mentioned in the Bill of Particulars, and that the filing of the Informations
charging her with crimes different from those specified in the Bill of Particulars violates her right to due
process.
The Office of the Solicitor General (OSG) counters that a bill of particulars is not allowed by Administrative
Order No. 7, entitled Rules of Procedure in the Office of the Ombudsman39 (A.O. No. 7); and that therefore
the Ombudsman cannot be bound by the Bill of Particulars submitted by private complainants.
The Court agrees with the OSG. Clearly, the act of the prosecutor in granting the petitioners Motion for Bill
of Particulars is an act contrary to the express mandate of A.O. No. 7, to wit:
Section 4. Procedure- The preliminary investigation of cases falling under the jurisdiction of the
Sandiganbayan and Regional Trial Courts shall be conducted in the manner prescribed in Section 3, Rule
112 of the Rules of Court, subject to the following provisions:
xxxx
d) No motion to dismiss shall be allowed except for lack of jurisdiction. Neither may a motion for a bill of
particulars be entertained. If the respondent desires any matter in the complainants affidavit to be
clarified, the particularization thereof may be done at the time of clarificatory questioning in the manner
provided in paragraph (f) of this section.
The Court finds the argument of petitioner that when the City Prosecutor was deputized by the
Ombudsman-Visayas to conduct the preliminary investigation, any action taken therein is, in effect, an
action of the Ombudsman, who is bound by the act of the City Prosecutor in granting the Motion for Bill of
Particulars, and is not tenable.
Section 31 of R.A. No. 6770 or The Ombudsman Act of 1989 expressly provides that those designated or
deputized to assist the Ombudsman shall be under his supervision and control. Indubitably, when the City
Prosecutor is deputized by the Office of the Ombudsman, he comes under the "supervision and control" of
the Ombudsman which means that he is subject to the power of the Ombudsman to direct, review,
approve, reverse or modify the prosecutors decision.40
Consequently, in the present case, petitioner has no valid basis for insisting that the Ombudsman-Visayas
must be bound by the erroneous act of the City Prosecutor in granting petitioners Motion for Bill of
Particulars. Laws and jurisprudence grant the Office of the Ombudsman the authority to reverse or nullify
the acts of the prosecutor pursuant to its power of control and supervision over deputized prosecutors.
Hence, it was within the prerogative of the Ombudsman-Visayas not to consider the Bill of Particulars
submitted by the private complainants.
This brings the Court to the second assigned error.
Petitioner claims that her right to due process was violated when the Ombudsman-Visayas filed
Informations charging her with violations of R.A. No. 3019, which went beyond the charges specified in
Bill of Particulars.41 Petitioner further argues that since there were no criminal charges stated in
subpoenas served on her on August 28, 2000 and August 30, 2000, she was not properly informed of
nature of the crime which she was supposed to answer in her counter-affidavit.42

the
the
the
the

While the Bill of Particulars is not allowed under the Rules of Procedure of the Office of the Ombudsman
and therefore should not be the basis for determining what specific criminal charges should be filed against
herein petitioner, it behooves the Ombudsman to accord the petitioner her basic rights to due process in
the conduct of the preliminary investigation.
In a preliminary investigation, Section 3, Rule 112 of the Rules of Court guarantees the petitioners basic
due process rights, such as the right to be furnished a copy of the complaint, the affidavits, and other
supporting documents, and the right to submit counter-affidavits and other supporting documents in her
defense,43 to wit:

Section 3. Procedure. The preliminary investigation shall be conducted in the following manner:
xxxx
(b) Within ten (10) days after the filing of the complaint, the investigating officer shall either dismiss it if he
finds no ground to continue with the investigation, or issue a subpoena to the respondent attaching to it a
copy of the complaint and its supporting affidavits and documents.
xxxx
(c) Within ten (10) days from receipt of the subpoena with the complaint and supporting affidavits and
documents, the respondent shall submit his counter-affidavit and that of his witnesses and other supporting
documents relied upon for his defense. The counter-affidavits shall be subscribed and sworn to and
certified as provided in paragraph (a) of this section, with copies thereof furnished by him to the
complainant. The respondent shall not be allowed to file a motion to dismiss in lieu of a counter-affidavit.
Likewise, Section 4 of A.O. No. 7 provides:
Section 4. Procedure. The preliminary investigation of cases falling under the jurisdiction of the
Sandiganbayan and Regional Trial Courts shall be conducted in the manner prescribed in Section 3, Rule
112 of the Rules of Court, subject to the following provisions:
a) If the complaint is not under oath or is based only on official reports, the investigating officer shall require
the complainant or supporting witnesses to execute affidavits to substantiate the complaints.
b) After such affidavits have been secured, the investigating officer shall issue an order, attaching
thereto a copy of the affidavits and other supporting documents, directing the respondent to
submit, within ten (10) days from receipt thereof, his counter-affidavits and controverting evidence
with proof of service thereof on the complainant. The complainant may file reply affidavits within
ten (10) days after service of the counter-affidavits.
c) If the respondent does not file a counter-affidavit, the investigating officer may consider the comment
filed by him, if any, as his answer to the complaint. In any event, the respondent shall have access to the
evidence on record.
d) No motion to dismiss shall be allowed except for lack of jurisdiction. Neither may a motion for a bill of
particulars be entertained. If the respondent desires any matter in the complainants affidavit to be clarified,
the particularization thereof may be done at the time of clarificatory questioning in the manner provided in
paragraph (f) of this section.
e) If the respondent cannot be served with the order mentioned in paragraph 6 hereof, or having been
served, does not comply therewith, the complaint shall be deemed submitted for resolution on the basis of
the evidence on record.
f) If, after the filing of the requisite affidavits and their supporting evidences, there are facts material to the
case which the investigating officer may need to be clarified on, he may conduct a clarificatory hearing
during which the parties shall be afforded the opportunity to be present but without the right to examine or
crossexamine the witness being questioned. Where the appearance of the parties or witnesses is
impracticable, the clarificatory questioning may be conducted in writing, whereby the questions desired to
be asked by the investigating officer or a party shall be reduced into writing and served on the witness
concerned who shall be required to answer the same in writing and under oath.
g) Upon the termination of the preliminary investigation, the investigating officer shall forward the records of
the case together with his resolution to the designated authorities for their appropriate action thereon.
h) No information may be filed and no complaint may be dismissed without written authority or approval of
the Ombudsman in cases falling within the jurisdiction of the Sandiganbayan, or of the proper Deputy
Ombudsman in all other cases. (Emphasis supplied)
In the pleadings submitted before this Court, petitioner complained that the subpoenas served on her did
not state the law allegedly violated by her.44

In the Motion for Bill of Particulars she filed before the City Prosecutor, she declared that she was served
with "subpoena together with the documents attached therein."45
However, after a thorough examination of the records, the Court does not find the subpoenas and the
alleged documents served on her. Absent the subpoenas and the documents attached to the subpoenas,
how could it be intelligently determined whether she was fully apprised of the acts complained of and
imputed to her; whether she was given the opportunity to submit an appropriate counter-affidavit to the
charges; and whether the charges in the five Informations filed against petitioner were based on the same
acts complained of and stated in the subpoena and the documents attached thereto?
While there is no rule that the initial complaint filed against an accused with the prosecutors office should
specifically state the particular law under which he is being charged, it is a basic elementary rule that the
complaint should specifically allege the criminal acts complained of, so as to enable the accused to prepare
his answer or counter-affidavit accurately and intelligently.
The determination of the issue whether the criminal charges were indeed alleged or specified in the
subpoenas and in the documents attached thereto, is a factual issue and therefore outside the province of
this Court. It is a well-settled rule that the Supreme Court is not the proper venue in which to consider a
factual issue, as it is not a trier of facts.46
In resolving the question whether petitioner was denied due process, the RTC or this Court cannot rely on
the disputable presumption that official duties have been regularly performed. The RTC should have
required the petitioner to submit the subpoenas and the attached documents served on her to enable it to
examine the same and resolve whether the petitioners right to be informed was violated. It was only upon
ascertaining this fact that the RTC could have validly determined whether petitioner was denied due
process.
It must be stressed that the primordial issue in the present petition is not whether the Ombudsman-Visayas
had correctly found a probable cause to justify the filing of the five Informations against herein petitioner,
but whether she was not accorded due process in the conduct of the preliminary investigation as to entitle
her to a reinvestigation. A valid and just determination of whether there is a probable cause on the part of
the Ombudsman to bring the cases to court against petitioner would ensue only when the petitioner has
been fully accorded due process in the conduct of the preliminary investigation.
A preliminary investigation is a judicial proceeding wherein the prosecutor or investigating officer, by the
nature of his functions, acts as a quasi-judicial officer.47 Although a preliminary investigation is not a trial
and is not intended to usurp the function of the trial court, it is not a casual affair. The officer conducting the
same investigates or inquires into the facts concerning the commission of the crime, with the end in view of
determining whether or not an information may be prepared against the accused. Indeed, a preliminary
investigation is in effect a realistic judicial appraisal of the merits of the case.48 In order to satisfy the due
process clause, it is not enough that the preliminary investigation is conducted in the sense of making sure
that a transgressor shall not escape with impunity.49 A preliminary investigation serves not only the
purposes of the State. More important, it is a part of the guarantee of freedom and fair play which are
birthrights of all who live in our country.50
WHEREFORE, the petition is PARTIALLY GRANTED. The assailed Orders dated September 24, 2002
and December 20, 2002 of the Regional Trial Court of Bago City, Branch 62 are SET ASIDE. The case is
remanded to the trial court for determination whether petitioner was denied due process in the conduct of
the preliminary investigation.
SO ORDERED.

SECOND DIVISION
G.R. No. 169122

February 2, 2010

MARCELINO DOMINGO, Petitioner,

vs.
COURT OF APPEALS, AGAPITA DOMINGO, ANA DOMINGO, HEIRS OF GAUDENCIO DOMINGO,
namely: DOROTEO DOMINGO, JULITA DOMINGO, AMANDO DOMINGO, and ARCEL DOMINGO;
HEIRS OF JULIAN DOMINGO, namely: JULIAN DOMINGO, JR. and PONCIANO DOMINGO; HEIRS OF
EDILBERTA DOMINGO, namely: ANITA DOMINGO and ROSIE DOMINGO; HEIR OF FELIPE
DOMINGO, namely: LORNA DOMINGO; and HEIRS OF GERONIMO DOMINGO, namely: EMILY
DOMINGO and ARISTON DOMINGO represented by ROLANDO DOMINGO, Respondents.
RESOLUTION
CARPIO, J.:
This is a petition1 for certiorari under Rule 65 of the Rules of Court. The petition challenges the 5 April2 and
10 June3 2005 Resolutions of the Court of Appeals in CA-G.R. SP No. 89023. The Court of Appeals
dismissed the petition4 for certiorari, with prayer for issuance of a temporary restraining order, filed by
Marcelino Domingo (Marcelino) for failure to serve the pleadings personally and for failure to provide a
written explanation why the service was not done personally.
Before he died, Julio Domingo (Julio) allegedly executed a Deed of Absolute Sale over a 4.1358-hectare
parcel of land in favor of Marcelinos wife, Carmelita Mananghaya (Mananghaya). The property was
situated in Burgos, Sto. Domingo, Nueva Ecija, and was covered by Transfer Certificate of Title No. NT87365.
Agapita and Ana Domingo, and the heirs of Gaudencio, Julian, Edilberta, Modesta, Felipe, and Geronimo
Domingo (the Domingos) filed before the Regional Trial Court (RTC), Judicial Region 3, Branch 37, Baloc,
Sto. Domingo, Nueva Ecija, a complaint against Marcelino and Mananghaya for the annulment of the Deed
of Absolute Sale. The Domingos alleged that Julios signature in the deed was forged.
In its 3 November 1993 Decision,5 the RTC held that Julios signature in the Deed of Absolute Sale was
forged; thus, the deed was void. The RTC ordered Marcelino and Mananghaya to deliver possession of the
property to the Domingos.
Marcelino and Mananghaya appealed the 3 November 1993 Decision to the Court of Appeals. In its 14 July
2000 Decision, the Court of Appeals dismissed the appeal. The 14 July 2000 Decision became final and
executory. Thus, on 4 August 2003, the RTC issued a writ of execution. On 25 August 2003, the Domingos
gained possession of the property.
Marcelino filed with the Department of Agrarian Reform (DAR) a petition6 dated 25 August 2003 praying
that he be declared the tenant-beneficiary of the property.
Around April 2004, Marcelino reentered and retook possession of the property. The Domingos filed before
the RTC a motion to cite Marcelino in contempt. Marcelino and Mananghaya filed before the Court of
Appeals a petition,7 dated 28 April 2004, for certiorari, prohibition and mandamus. They prayed that:
1. Pending hearing a preliminary injunction be issued against the [RTC] enjoining and prohibiting to
implement the writ of executed [sic] (Exh. M);
2. Annulling the writ of execution dated August 23, 2003;
3. Annulling the last portion of the decision in Civil Case No. 1218 which states: ["]to deliver the possession
of the land in question to the plaintiffs. (par. 5 Decision dated November 3, 1993)."
4. Ordering the denial and or dismissal of the motion for contempt filed by the private respondent against
the petitioners.8
In its 26 May 2004 Order, the RTC found Marcelino in contempt, fined him P25,000 and ordered his arrest
and imprisonment. However, the sheriff of the RTC no longer served the 26 May 2004 Order because
Marcelino declared in writing that he would deliver possession of the property to the Domingos. In its 8
June 2004, Resolution,9 the Court of Appeals dismissed outright Marcelino and Mananghayas 28 April
2004 petition.

Later, however, Marcelino employed six men to reenter the property. On 14 June 2004, the RTC issued
warrants of arrest against Marcelino and the six men. Marcelino and a certain Genero Salazar (Salazar)
were arrested and were detained at the Philippine National Police station in Sto. Domingo, Nueva Ecija. On
17 and 23 June 2004, Genero and Marcelino, respectively, were released after declaring in writing that they
would no longer interfere with the Domingos possession of the property. The RTC warned Marcelino that a
warrant for his arrest shall be deemed automatically issued if he reenters the property.
In its 4 October 2004 Order,10 the DAR granted Marcelinos 25 August 2003 petition, placed 10.0108
hectares of land including the property under the coverage of Republic Act (RA) No. 6657, and
named Marcelino as one of the tenant-beneficiaries. Agapita Domingo (Agapita) filed a motion for
reconsideration of the 4 October 2004 Order. Marcelino reentered and retook possession of the property.
The Domingos filed before the RTC another motion to cite Marcelino in contempt, and for the issuance of a
warrant for his arrest. In its 23 December 2004 Order,11 the RTC stated that:
In the partial return, dated December 9, 2004, of Sheriff Crispino Magbitang acting per order, dated
December 1, 2004 of this Court, he confirmed that when he went to the subject property on December 7,
2004, about 3:00 p.m., he saw six (6) men "tilling and plowing the land-in-question" but who, upon seeing
him, stopped working, gathered their agricultural implements and left. x x x Dorenzo Domingo, brother of
defendant Marcelino Domingo, confirmed to the sheriff the re-entry on the land in question by his brother,
the barangay captain of the place where said land is situated, who bragged of an alleged decision of the
DARAB regional office in San Fernando City, Pampanga, making him the legal owner of the subject land.
The evidence of the plaintiffs also showed that defendant Marcelino Domingo had actually fenced the
subject property.
This Court, notwithstanding its already final order of May 26, 2004, finding and declaring defendant
Marcelino Domingo in contempt of court as well as the order of June 23, 2004 wherein it warned of the
automatic re-issuance of a warrant of arrest against him and any other acting in his behalf in the event of
reentry and retaking possession of the subject property, set the present motion for hearing on December
15, 2004 to afford defendant Marcelino Domingo the opportunity to explain his side even only for the
purpose of mitigating the legal consequences of his very stubborn arrogance that amounted to open
defiance of the power of contempt of this Court.
Unfortunately, not only did defendant Marcelino Domingo refuse to receive the notice of the hearing set on
December 15, 2004, but he actually disregarded it by failing to appear on said date.
Again, to give the defendant another chance, the hearing set on December 15, 2004 was reset to
December 20, 2004, as requested by defendants counsel Atty. Restituto M. David x x x but again, none of
them appeared on said date nor file [sic] any comment on the same.
With defendant Marcelino Domingos cavalier attitude towards it, this Court now feels its authority ignored
and belittled and its power of contempt challenged and tested of its worth by said defendant who, ironically,
as barangay head and, as such, a person in authority himself, should first be the paragon in upholding the
rule of law.
Even if granted that defendant Marcelino Domingo had awarded [sic] ownership of the subject land by the
DARAB, still he could not have taken the law in his own hands by simply taking over thereof without any
judicial order and thereby ousting therefrom the plaintiffs who [sic], this Court, had given legal possession
thereof pursuant to a decision of the Court of Appeals which had already long become final and executory.
WHEREFORE, premises considered, the present motion is granted:
1. Ordering the issuance of a continuing warrant of arrest and detention of defendant Marcelino Domingo at
the Nueva Ecija Provincial Jail, Caalibangbangan, Cabanatuan City for a period of Thirty (30) days until
further order from this Court;
2. Ordering defendant Marcelino Domingos further detention at the said jail until he shall have effectively
surrendered and redelivered possession of the subject property to the plaintiffs;
3. Ordering the forfeiture in favor of the plaintiffs of all the movable improvements put or introduced on the

subject property by defendant Marcelino Domingo;

4. Ordering the issuance of a writ of execution for the satisfaction of the fine of P25,000.00 per the Order,
dated May 26, 2004[;]
5. Ordering the issuance of a [sic] continuing warrants for the arrest of all other persons working,
cultivating, tilling and planting on the subject landholding in behalf of defendant Marcelino Domingo, and
under his control, direction and supervision.12
Marcelino filed a motion for reconsideration of the 23 December 2004 Order.
In its 17 February 2005 Order,13 the DAR granted Agapitas motion for reconsideration and set aside the 4
October 2004 Order. The DAR held that the property was not covered by RA No. 6657 because it was less
than five hectares. The DAR stated that:
From the documents submitted by the movant, it appears that the subject property of 4.1358 hectares
covered by TCT No. 87365 is the only landholdings owned by Julio Domingo. He was only an administrator
of the 5.8831 hectares, therefore, the 4.1358 hectares cannot be covered by land reform law either under
PD 27/RA 6657 since the same is way below the ceiling mandated by agrarian reform law.14
In its 4 March 2005 Order,15 the RTC denied Marcelinos motion for reconsideration. The RTC held that:
In his Sinumpaang Salaysay of June 22, 2004 on the basis of which this Court ordered his release from jail,
defendant Marcelino never mentioned anything about the distinction of his possession of the subject
property between that in the concept of owner and in the concept of a tenant-lessee. Even if he did, that
would not have mattered because the concept of possession in the instance [sic] case was never in issue.
Besides, his undertaking in the said sworn statement was clearly worded that he would never again reenter or retake possession of the subject land either by himself of [sic] by his agents and he would bar
others from entering the same.
It will now appear that he had foisted a contumacious lie to this Court with his declaration in the said sworn
statement to obtain his release from jail. This warrant his being cited for another contempt of this Court.
Actually even if defendant Marcelino had been awarded ownership of the subject land by the DARAB, still
he could not have taken the law in his own hands by simply taking over thereof without any judicial order
and thereby ousting therefrom the plaintiffs who [sic], this Court, had given legal possession thereof
pursuant to a decision of the Court of Appeals which had already long become final and executory.
But the fact is, the Order of the DARAB relied upon by the defendant Marcelino did not grant him any
specific portion of the land declared to be within the coverage of PD27/RA 6657 because the same was
yet, by its terms, to be distributed to the qualified beneficiaries thereof and defendant Marcelino being only
one of such beneficiaries.
What accentuates defendant Marcelino contemnary [sic] act of reentering and retaking possession of the
subject land was the fact that he did so without even waiting for the finality of the order relied upon by him.
As it has turned out the DAR Region III had reversed its order of October 4, 2004 in another order, dated
February 17, 2005, copy of which was presented by the plaintiff to this Court by way of manifestation filed
on February 23, 2005, "SETTING ASIDE the Order, dated October 4, 2004, and a new one is hereby
issued DENYING the petition for coverage filed by Marcelino Domingo for utter lack of merit".
It is now very clear to this Court that defendant Marcelinos re-entry and retaking possession and cultivation
of the subject land was sheer display of stubborn arrogance and an open, deliberate and contemptuous
defiance of its order and processes.
WHEREFORE, premises considered, the Motion for Reconsideration of defendant Marcelino Domingo is
hereby denied and further ordering that:
1. The order granting the issuance of a warrant of arrest against defendant Marcelino Domingo is hereby
maintained;
2. Defendant Marcelino Domingo is again found and declared in contempt of Court and penalized with

imprisonment of Twenty (20) days;

3. Defendant Marcelino Domingos further detention at the Nueva Ecija Provincial Jail until he shall have
effectively surrendered and redelivered possession of the subject land to plaintiffs;
4. Ordering the forfeiture in favor of the plaintiffs of all the movable improvements put or introduced on the
subject property by defendant Marcelino Domingo[;]
5. Ordering the issuance of a writ of execution for the satisfaction of The fine of P25,000.00 per the Order,
dated May 26, 2004[;]
6. Ordering the issuance of a continuing warrants [sic] for the arrest of all other persons working,
cultivating, tilling and planting on the subject landholding in behalf of defendant Marcelino Domingo, and
under his control, direction and supervision.16
Marcelino filed before the Court of Appeals a petition for certiorari under Rule 65 of the Rules of Court,
dated 21 March 2005, with prayer for the issuance of a temporary restraining order. Marcelino alleged that
the RTC had no jurisdiction to order him to deliver possession of the property to the Domingos and that the
RTC gravely abused its discretion in finding him in contempt.
In its 5 April 2005 Resolution, the Court of Appeals dismissed outright Marcelinos petition. The Court of
Appeals held that:
This petition for certiorari faces outright dismissal for three (3) fundamental reasons, namely:
(1) There is no written explanation to justify service by mail in lieu of the preferred mode of personal
service, this in violation of Section 11, Rule 13, of the [Rules of Court] x x x.
Net result: The petition is deemed NOT filed.
(2) The following copies of pertinent pleadings and orders that would support the allegations in the petition
have not been attached thereto as annexes, to wit:
(a) The complaint for annulment of sale with damages filed with the Regional Trial Court, Branch 37, Baloc,
Sto. Domingo, Nueva Ecija;
(b) The RTC decision of November 3, 1993;
(c) The petition for coverage under PD 27 filed with DAR, Regional Office, San Fernando, Pampanga;
(d) The October 4, 2004 DAR order;
(e) The motion for reconsideration filed with DAR, Reg. III, San Fernando, Pampanga;
(f) DAR order of February 17, 2005; and,
(g) The notice of appeal filed on March 8, 2005.
this in violation of Section 3, Rule 46 of the 1997 Rules x x x.
(3) The prayer for temporary restraining order failed to manifest willingness to post the necessary injunctive
bond, in violation of Section 4, Rule 58.17
Marcelino filed a motion18 for reconsideration of the 5 April 2005 Resolution. In its 10 June 2005 Resolution,
the Court of Appeals denied the motion. The Court of Appeals held that Marcelinos "failure to file a written
explanation to justify service by mail in lieu of the preferred mode of personal service is an absolutely
insurmountable obstacle to the success of this motion for reconsideration."19 Marcelino filed another
motion20 for reconsideration. In its 19 July 2005 Resolution, the Court of Appeals noted the motion. The
Court of Appeals held that, "We cannot accept the motion for reconsideration for the reason that a second
motion for reconsideration of a final order is a prohibited pleading."21

Hence, the present petition. Marcelino alleges that the Court of Appeals gravely abused its discretion in
dismissing the 21 March 2005 petition. He states that:
While it is true that petitioner failed to incorporate a written explanation to justify service by mail in lieu of
the preferred mode of personal service in his Petition, it was grave abuse of discretion for public
respondent Court of Appeals to dismiss his Petition on this ground. x x x [L]itigations should be decided as
much as possible on their merits rather than technicalities x x x.
x x x Section 11, Rule 13 of the 1997 Rules of Civil Procedure is "merely directory" and it is incumbent
upon the court to use its discretion in determining whether substantial justice will be served (or rights
unjustifiably prejudiced) if it resolves to dismiss a petition because of non-compliance with a mere directory
rule.22
The petition is unmeritorious. Section 11, Rule 13 of the Rules of Court states:
SEC. 11. Priorities in modes of service and filing. Whenever practicable, the service and filing of
pleadings and other papers shall be done personally. Except with respect to papers emanating from the
court, a resort to other modes must be accompanied by a written explanation why the service or filing was
not done personally. A violation of this Rule may be cause to consider the paper as not filed.
Section 11 is mandatory. In Solar Team Entertainment, Inc. v. Judge Ricafort,23 the Court held that:
Pursuant x x x to Section 11 of Rule 13, service and filing of pleadings and other papers must,
whenever practicable, be done personally; and if made through other modes, the party concerned
must provide a written explanation as to why the service or filing was not done personally. x x x
Personal service and filing are preferred for obvious reasons. Plainly, such should expedite action or
resolution on a pleading, motion or other paper; and conversely, minimize, if not eliminate, delays likely to
be incurred if service or filing is done by mail, considering the inefficiency of postal service. Likewise,
personal service will do away with the practice of some lawyers who, wanting to appear clever, resort to the
following less than ethical practices: (1) serving or filing pleadings by mail to catch opposing counsel offguard, thus leaving the latter with little or no time to prepare, for instance, responsive pleadings or an
opposition; or (2) upon receiving notice from the post office that the registered parcel containing the
pleading of or other paper from the adverse party may be claimed, unduly procrastinating before claiming
the parcel, or, worse, not claiming it at all, thereby causing undue delay in the disposition of such pleading
or other papers.1avvphi1
If only to underscore the mandatory nature of this innovation to our set of adjective rules requiring
personal service whenever practicable, Section 11 of Rule 13 then gives the court the discretion to
consider a pleading or paper as not filed if the other modes of service or filing were resorted to and
no written explanation was made as to why personal service was not done in the first place. The
exercise of discretion must, necessarily, consider the practicability of personal service, for Section 11 itself
begins with the clause "whenever practicable."
We thus take this opportunity to clarify that under Section 11, Rule 13 of the 1997 Rules of Civil Procedure,
personal service and filing is the general rule, and resort to other modes of service and filing, the
exception. Henceforth, whenever personal service or filing is practicable, in light of the
circumstances of time, place and person, personal service or filing is mandatory. Only when
personal service or filing is not practicable may resort to other modes be had, which must then be
accompanied by a written explanation as to why personal service or filing was not practicable to
begin with. In adjudging the plausibility of an explanation, a court shall likewise consider the importance of
the subject matter of the case or the issues involved therein, and the prima facie merit of the pleading
sought to be expunged for violation of Section 11. This Court cannot rule otherwise, lest we allow
circumvention of the innovation introduced by the 1997 Rules in order to obviate delay in the administration
of justice.
xxxx
x x x [F]or the guidance of the Bench and Bar, strictest compliance with Section 11 of Rule 13 is
mandated.24 (Emphasis supplied)

In petitions for certiorari, procedural rules must be strictly observed. In Athena Computers, Inc. v. Reyes,25
the Court held that:
Certiorari, being an extraordinary remedy, the party who seeks to avail of the same must strictly observe
the rules laid down by law.
xxxx
The acceptance of a petition for certiorari as well as the grant of due course thereto is, in general,
addressed to the sound discretion of the court. Although the court has absolute discretion to reject and
dismiss a petition for certiorari, it does so only x x x when there are procedural errors, like violations of the
Rules of Court.26
Liberal application of procedural rules is allowed only when two requisites are present: (1) there is a
plausible explanation for the non-compliance, and (2) the outright dismissal would defeat the administration
of justice. In Tible & Tible Company, Inc. v. Royal Savings and Loan Association,27 the Court held that "the
two pre-requisites for the relaxation of the rules are: (1) justifiable cause or plausible reason for noncompliance; and (2) compelling reason to convince the court that outright dismissal of the petition would
seriously impair the orderly administration of justice."28 Both requisites are lacking in the present case.
WHEREFORE, we DISMISS the petition. We AFFIRM the 5 April and 10 June 2005 Resolutions of the
Court of Appeals in CA-G.R. SP No. 89023.
SO ORDERED.

SPECIAL FIRST DIVISION

G.R. No. 166645

January 23, 2007

VICENTE D. HERCE, JR., Petitioner,

vs.
MUNICIPALITY OF CABUYAO, LAGUNA and JOSE B. CARPENA, Respondents.
RESOLUTION
YNARES-SANTIAGO, J.:
For resolution is the Motion for Reconsideration filed by petitioner Vicente D. Herce, Jr. of the Decision
dated November 11, 2005, the dispositive portion of which states:
WHEREFORE, the petition is DENIED. The validity of Decree No. 4244 issued on March 3, 1991 in favor of
respondent Municipality of Cabuy[a]o, Laguna is AFFIRMED, whereas Decree No. N-216115 and Original
Certificate of Title No. 0-2099, issued in the name of petitioner Herce, are declared NULL and VOID.
SO ORDERED.
In denying the petition, we held that:
[I]t is clear that Decree No. 4244 issued in favor of the respondent municipality in 1911 has become
indefeasible; as such, petitioner is now barred from claiming the subject land. Although the municipalitys
claim of ownership is based on the entry in the Ordinary Decree Book, LRC (CLR) Rec. No. 6763, showing
that Decree No. 4244 was issued on March 3, 1911 and that Lot I Plan II-2719 was one of the six parcels of
land previously applied for registration by the Municipality of Cabuyao in LRC (GLRO) Record No. 6763,
being a public document, the Ordinary Decree Book is prima facie proof of the entries appearing therein. x
xx

xxxx
In the absence of evidence to the contrary, the Ordinary Decree Book, LRC (CLR) Rec. No. 6763, showing
that Decree No. 4244 was issued on March 3, 1911, is presumed to have been regularly issued by the
accountable public officers who enjoy the legal presumption of regularity in the performance of their
functions. Thus, the proceedings that led to the issuance of Decree No. 4244 in favor of the Municipality of
Cabuyao cannot be overturned without any countervailing proof to the contrary. x x x
xxxx
Accordingly, the decree of registration issued by the LRA on January 28, 1997 in favor of petitioner,
followed by the issuance of OCT No. O-2099, pertaining to the same parcel of land covered by Decree No.
4244, has no legal basis and should be nullified.
In his Motion for Reconsideration, petitioner principally claimed that the entries in the Ordinary Decree Book
of the Land Registration Authority (LRA) did not categorically state that the property covered by Decree No.
N-216115 and OCT No. O-2099 was included in Decree No. 4244. As such, the title issued in his favor
could not be declared void, because it had not been shown by competent proof that the lot covered thereby
was included in Decree No. 4244.
Petitioner thus prayed that: (a) The parcel of land identified as Lot Plan II-2719-A and Cadastral Lot No.
3484 be declared as not included in Decree No. 4244 issued in favor of the Municipality of Cabuyao; (b)
The Municipality of Cabuyao be declared as having been barred by laches from recovering the title and
ownership over the subject property; (c) Jose B. Carpena should be declared as having been barred by
laches from asserting ownership over the subject property; and (d) Decree No. N-216115 and OCT No. 02099 issued in favor of petitioner should be declared as valid. In the alternative, petitioner prayed that the
assailed Decision be partially reconsidered by remanding the case to the trial court for the determination of
whether the property subject of litigation was included in Decree No. 4244 issued in favor of the
Municipality of Cabuyao. If found to be included, then OCT No. 0-2099 and Decree No. N-216115 issued in
favor of petitioner should be declared as void.
In its Opposition/Comment to petitioners Motion for Reconsideration, respondents maintained that Lot 1,
Plan II-2719-A, the property subject of litigation, was included in Decree No. 4244 issued in the name of the
Municipality of Cabuyao, as shown by the following pieces of evidence, to wit:
(a) Survey Plan conducted by the Bureau of Lands with notation at the bottom portion indicating that
Decree No. 4244 was issued in favor of the Municipality of Cabuyao on March 3, 1911 over the Lot 1, Plan
II-2719-A;
(b) Certification issued by Mr. Teodoro Bonifacio, then Administrator of the Land Registration Authority,
stating that Plan SWO-25706 (II-2719-A) was presented as evidence in the "Carpena case;"
(c) Entries in the Ordinary Decree Book of the LRA;
(d) LRA Report dated December 2, 1980 narrating the history of the subject property; and
(e) Survey Plan over Lot 3484.
The motion is partially granted.
The inherent power of a court to amend and control its processes and orders includes the right to reverse
itself if only to make its findings and conclusions conformable to law and justice. Every court has the power
and the corresponding duty to review, amend or reverse its findings and conclusions whenever its attention
is seasonably called to any error or defect that it may have committed.
We have given the assailed Decision as well as the parties respective evidence and arguments a hard
second look. It appearing that we have overlooked certain crucial points and arguments and calling to mind
the Courts duty to rectify its mistakes when warranted by the facts and the law at hand, we are constrained
to partially grant petitioners motion for reconsideration.
After a careful and more circumspect re-evaluation of the evidence before us, we are convinced that the

case should be remanded to the trial court. It must be recalled that on August 21, 1998, the trial court
issued an Order, the dispositive portion of which states:
In view of the foregoing rule, and considering the Report dated December 2, 1980, of the Acting
Commissioner of Land Registration x x x that Decree No. 4244 was issued on x x x March 3, 1911 in LRC
(GLRO), Record No. 6763, in favor of the Municipality of Cabuyao for apparently the same parcel of land
applied for herein, this Court resolves to open the decree of registration issued herein. The Decision of this
Court dated May 29, 1957, in Land Registration Case No. N-438, LRC Record No. 10514, insofar as Lot 1,
Plan II-2719 only is concerned, and the Order of this Court dated May 3, 1996 are both set aside.
Set this case for presentation of evidence for claimant Vicente Herce, Jr. on September 28, 1998 at 8:30
a.m.
SO ORDERED.1
From the foregoing Order, it is clear that petitioner must still present evidence to prove his claim over the
subject property. Petitioners motion for reconsideration of the Order was denied; hence, he filed a petition
for certiorari before the Court of Appeals where the sole issue for resolution was whether the trial court
gravely abused its discretion in granting respondent municipalitys motion to reopen the decree of
registration. Finding that the latter met all the requirements to reopen the decree of registration, the Court of
Appeals denied the petition. At the same time, it ruled that:
It should be recalled that the basis of the issuance of the Decree in favor of the petitioner in the case at bar
is the May 30, 1980 Decision of Branch I of the Court of First Instance of Laguna in Cad. Case No. N-B-1LRC Cad No. N-651 instituted by the Republic of the Philippines denying the latters petition for registration
which is in turn based on the opposition filed by the petitioner alleging therein that he is the rightful owner of
the property having acquired the same from Jose Carpena.
Noticeable from the said May 30, 1980 decision however is that the existence of Decree No. 4244 issued
on March 3, 1911 was never mentioned. Neither was it mentioned in the petitioners motion to modify
decision dated June 26, 1995. In fact, when asked to comment on the petitioners motion to modify
decision, the LRA interposed no objection thereto, but with the caveat that "xxx provided it will not
adversely affect the government as well as third parties."
Of course, the controversy could have easily ended at this point had LRA exercised prudence in checking
its records and would have found out the existence of Decree No. 4244 in favor of the Municipality of
Cabuyao. As it were, however, the motion to modify decision was granted, notwithstanding the fact that the
1957 decision of the trial court directing the issuance of the corresponding decrees over the 44 parcels of
land applied for by the group of Juanita Carpena had already attained finality, that decrees over the 42 of
these parcels have already been issued, and that the property subject of the present case was not issued a
decree in view precisely of the existence of Decree 4244.
Clearly, the decree was issued upon the petitioners manifestation before the trial court that it was the
rightful owner of the property subject of the controversy and that as transferee and therefore the successorin-interest of the original applicant Juanita Carpena, he was entitled to the issuance of a decree of
registration as decreed in the 1957 Decision of the CFI of Laguna.
xxxx
In the case at bar, the respondent municipality in its petition/motion to reopen/review decree alleged that as
early as March 3, 1911, it has been issued Decree No. 4244 over Lot I Plan II 2719-A (now Lot 3484,
Cabuyao Cadastral 455-1). In 1975, petitioner entered his opposition to the case claiming to be the
possessor of the said parcel. While the court ruled in favor of the petitioner in the said case and ordered a
decree of registration in his favor, it was subsequently found out in a report dated December 2, 1980 that
the decree ordered by the court could not be issued as it appears in the Ordinary Decree Book of the LRC
Record 6763, a previous decree (Decree 4244) dated March 3, 1911 was already issued in favor of the
Municipality which is the same parcel of land sought to be registered by the oppositor in his name.
Specifically, the ground relied upon by the municipality in seeking the reopening of the decree of
registration is the Report dated December 2, 1980 of the Land Registration Authority in Cadastral Case No.
N-B-1, LRC Cadastral No. N-651 that after plotting the technical descriptions of Lot 3484, in the Municipal

Index Map, it was found that said lot is more or less identical to the parcel of land described in Plan II-2719A for which no final decree of registration has as yet been issued.
To hold otherwise would result in a situation wherein the LRA would be compelled to issue a decree of
registration over a piece of land which has already been decreed and titled in the name of another, if it were
found out that indeed, the property has already been earlier titled in the name of the municipality.
Considering the existence of two conflicting titles one in favor of petitioner, and the other in the name of
the Municipality of Cabuyao, the court properly granted the reopening of the decree of title in order to finally
settle the issue of ownership over the property subject of the instant controversy and to end this litigation
which has dragged on for decades.2
The foregoing pronouncements of the Court of Appeals do not expressly state that the property covered by
OCT No. 0-2099 and Decree No. N-216115 issued in favor of petitioner is included and within the scope of
Decree No. 4244 earlier issued in 1911 in favor of respondent municipality.
As we have ruled in the assailed Decision, there is no doubt that Decree No. 4244 issued in favor of the
municipality has become indefeasible. However, based on the records before us, there is insufficient
information to conclude that Decree No. 4244 includes the property covered by OCT No. 0-2099 and
Decree No. N-216115. As such, there is a need to remand the case to the trial court for further
proceedings. As correctly noted by the Court of Appeals:
Considering the existence of two conflicting titles one in favor of petitioner, and the other in the name of
the Municipality of Cabuyao, the court properly granted the reopening of the decree of title in order to finally
settle the issue of ownership over the property subject of the instant controversy and to end this litigation
which has dragged on for decades.3
It is elementary that a court must render judgment confirming the title of the applicant only if it finds that the
latter has sufficient title proper for registration. An application for land registration may include two or more
parcels of land, but the court may at any time order an application to be amended by striking out one or
more of the parcels or order a severance of the application.
WHEREFORE, the assailed Decision is PARTIALLY RECONSIDERED. The case is REMANDED to the
Regional Trial Court of Laguna, Branch 24 for the determination of whether the subject property is included
in Decree No. 4244 issued in favor of the Municipality of Cabuyao.
SO ORDERED.

THIRD DIVISION
G.R. No. 157644

November 17, 2010

SPOUSES ERNESTO and VICENTA TOPACIO, as represented by their attorney-in-fact MARILOU

TOPACIO-NARCISO, Petitioners,
vs.
BANCO FILIPINO SAVINGS and MORTGAGE BANK, Respondent.
DECISION
BRION, J.:
Before the Court is a petition for review on certiorari,1 filed by petitioner spouses Ernesto and Vicenta
Topacio (petitioners), assailing the August 26, 2002 Decision2 of the Court of Appeals (CA) in CA-G.R. SP

No. 32389, as well as its March 17, 2003 Resolution3 denying the petitioners motion for reconsideration.
The CA Decision and Resolution affirmed in toto the October 1, 1993 Order of the Regional Trial Court of
Valenzuela City, Branch 75, which issued an alias writ of possession in favor of the respondent Banco
Filipino Savings and Mortgage Bank (respondent).
THE BACKGROUND FACTS
The backgrounds facts, as culled from the records, are summarized below.
The petitioners obtained a loan amounting to P400,000.00 from the respondent. To secure the loan, the
petitioners executed on May 8, 1980, a real estate mortgage over Lot 1224-B-1 LRC Psd-15436, covered
by TCT No. T-191117 (now 13554) of the Registry of Deeds of Bulacan, in favor of the respondent. The
petitioners failed to pay the loan, prompting the respondent to file a Petition for Extrajudicial Foreclosure of
Mortgage, pursuant to Act No. 3135. To satisfy the obligation, the Provincial Sheriff of Bulacan, on
November 8, 1982, sold the mortgaged property at public auction, where the respondent emerged as the
highest bidder. Accordingly, a Certification of Sale was issued in favor of the respondent and registered
with the Registry of Deeds.4
On May 26, 1983, the respondent filed a Petition for the Issuance of a Writ of Possession5 over the
mortgaged property before the Regional Trial Court, Branch 172, Valenzuela City (RTC). In an Order6
dated December 12, 1983, the RTC granted the petition, conditioned on the posting of a P100,000.00
bond. Upon posting of the required bond, the RTC issued, on February 16, 1984, a writ of possession,
commanding the sheriff to place the respondent in possession of the property.
The writ of possession was not implemented7 because, on February 27, 1984, the petitioners, filed with the
RTC, a petition to set aside the auction sale and the writ of possession (with application for a temporary
restraining order and a writ of preliminary injunction).8 In an Order dated February 28, 1984, the RTC
issued a temporary restraining order enjoining the respondent and the Deputy Sheriff from implementing
the writ of possession it previously issued. 9 After hearing, the RTC, issued on March 13, 1984, a writ of
preliminary injunction ordering the respondent and the Provincial Sheriff to desist from implementing the
writ of possession and to refrain from interfering with and disrupting the possession of the petitioners over
the subject parcel of land.10
Sometime in April 1984, the respondent filed with the RTC its Motion to Admit Answer with Opposition to
the Petition to Set Aside Auction Sale and Writ of Possession with Motion to Dissolve or Lift Preliminary
Injunction (Answer) which was granted on April 26, 1984.11 On May 21, 1984, the petitioners filed their
Reply thereto, praying that the writ of preliminary injunction previously issued be maintained.12
More than two years after the filing of the Answer and the Reply, and after a series of postponements at the
instance of both parties, then Presiding Judge Teresita D. Capulong issued an Order dated December 16,
1986, dismissing the respondents petition for the issuance of a writ of possession on the ground of "failure
to prosecute."13 The Order reads in full:
When this case was called for hearing, counsel for the oppositors [now petitioners], Atty. Constancio R.
Gallamos, was present. Atty. Francisco Rivera [counsel for the respondent] was absent despite notice.
Upon petition of the counsel for the oppositors, this case is hereby ordered dismissed for failure to
prosecute.
SO ORDERED.
No copy of the above Order was served on the respondent14 whose operations the Monetary Board
(Central Bank of the Philippines) shut down on January 25, 1985, for reasons not relevant to the present
case.15
Nearly six (6) years later (after the Court ordered the reorganization and resumption of the respondents
operations in G.R. No. 70054)16 or on August 19, 1992, the respondent filed a Motion to Clarify the Order of
December 16, 1986. In the same motion, the respondent likewise moved for the issuance of an alias writ of
possession. 17
In an Order18 dated September 18, 1992, the RTC made a clarification that the Order of Dismissal of
December 16, 1986 refers to the dismissal of the "main case for issuance of a writ of possession." In that

same Order, the RTC denied the respondents motion for the issuance of an alias writ of possession.
On May 18, 1993, the respondent moved for the reconsideration19 of the September 18, 1992 Order. In an
Order20 dated June 2, 1993, the RTC, this time presided by Judge Emilio L. Leachon, Jr., reconsidered and
set aside the Order of December 16, 1986 and granted the respondents prayer for the issuance of an alias
writ of possession. The petitioners moved for a reconsideration of the June 2, 1993 Order and prayed that
the implementation of the alias writ of possession be held in abeyance.
The RTC Ruling
On October 1, 1993, the RTC, now presided by Judge Jaime F. Bautista, issued the assailed Order21 which
denied the petitioners motion for reconsideration and reiterated its order for the issuance of an alias writ of
possession in favor of the respondent. The assailed RTC Order is summarized below.
First, the RTC ruled that the Order of Dismissal was granted on a "technicality" and that "[t]he ground of
failure to prosecute is manifestly unfounded."22 The RTC held that "the power of the trial court to dismiss an
action on the ground of non prosequitur is not unbounded. The real test x x x is whether under the facts and
circumstances, the plaintiff is chargeable with want of due diligence in [failing] to proceed with reasonable
promptitude."23 In the present case, the RTC noted that the records show that the case dragged on for
years because of several postponements at the request of both parties, particularly petitioner Ernesto
Topacio who went abroad for a long time during the pendency of the case.24
Second, the RTC held that the December 16, 1986 Dismissal Order cannot be considered a dismissal on
the merits as it was founded not on a substantial ground but on a technical one; it does not amount to a
"declaration of the law [on] the respective rights and duties of the parties, based upon the ultimate x x x
facts disclosed by the pleadings and evidence, and upon which the right of recovery depends, irrespective
of formal, technical or dilatory objectives or contentions."25
Third, the RTC ruled that the revival by a motion for reconsideration (filed on May 18, 1993) of the February
16, 1984 Order, granting the writ of possession, was seasonably filed by the respondent, pursuant to the
period allowed under Section 6, Rule 39 of the Rules of Court. Citing National Power Corporation v. Court
of Appeals,26 the RTC held that "[i]n computing the time [limit] for suing out an execution, x x x the general
rule is that there should not be included the time when execution is stayed, either by agreement of the
parties for a definite time, by injunction, by the taking of an appeal or writ of error so as to operate as a
supersedeas, by the death of a party, or otherwise." The RTC noted that the running of the five-year period
under Section 6 of the Rules of Court had been interrupted by the erroneous issuance of a writ of
preliminary injunction; the February 16, 1984 Order never attained finality and was overtaken by the
issuance of the Order dated June 2, 1993, granting the issuance of an alias writ of execution.27
Finally, the RTC held that the respondent, as the winning bidder, "has an absolute right to a writ of
possession,"28 considering that: (1) a writ of possession had been issued on February 16, 1984 and the
corresponding bond had already been posted, although the writ was not enforced because of the erroneous
injunction issued by Judge Capulong; and (2) there was no redemption by the petitioners.29
On October 20, 1993, the petitioners filed their Petition for Certiorari and Prohibition under Rule 65 of the
1997 Rules of Court with prayer for the issuance of a preliminary injunction (petition), docketed as CA-G.R.
SP No. 32389.30 Before the CA, the petitioners argued that the RTC acted without jurisdiction or with grave
abuse of discretion when it: (1) reinstated the respondents case more than seven (7) years after the
December 16, 1986 Dismissal Order became final and executory, and (2) issued an alias writ of execution
upon a mere motion for reconsideration and not by an independent action pursuant to Section 6, Rule 39 of
the Rules of Court.
The CA Ruling
On August 26, 2002, the CA denied the petitioners petition and affirmed in toto the June 2, 1993 and
October 1, 1993 Orders of the RTC. The CA found that the December 16, 1986 Order of the RTC does not
amount to a dismissal on the merits as it was based on purely technical grounds. It noted that the records
show that the respondent was not furnished a copy of the Dismissal Order; hence, the case cannot be
deemed to be final with respect to the respondent. The CA also agreed with the RTCs conclusion that the
delay in the resolution of the case cannot be solely attributed to the respondent and did not warrant its
outright dismissal.31

The CA held that an independent action for the revival of the writ of possession need not be filed in order to
enforce the writ of possession issued on December 12, 1983 since Section 6, Rule 39 of the Rules of Court
applies only to civil actions and not to special proceedings,32 citing Heirs of Cristobal Marcos v. de
Banuvar.33
The Petition
In the present petition,34 the petitioners contend that the CA erred in affirming the October 1, 1993 Order of
the RTC considering that:
1) the December 16, 1986 Dismissal Order constitutes an adjudication on the merits which has already
attained finality, and
2) a writ of possession may not be enforced upon mere motion of the applicant after the lapse of more than
five (5) years from the time of its issuance.
On the first assignment of error, the petitioners submit that the December 16, 1986 Dismissal Order for
failure to prosecute constitutes adjudication upon the merits, considering that the RTC did not declare
otherwise, pursuant to Section 3, Rule 17 of the Rules of Court. The petitioners further contend that the
Dismissal Order has become final and executory since the respondent belatedly filed the Motion to Clarify
the Order of December 16, 1986 on August 19, 1992 or almost six years later. On these premises, the
petitioners argue that res judicata has set in and consequently, the RTC had no jurisdiction to grant the
motion for reconsideration and to issue an alias writ of possession in favor of the respondent.35
On the second assignment of error, the petitioners contend that pursuant to Section 6, Rule 39 of the Rules
of Court, the writ of possession issued on February 16, 1984 may no longer be enforced by a mere motion
but by a separate action, considering that more than five years had elapsed from its issuance. The
petitioners also argue that Section 6, Rule 39 of the Rules of Court applies to the present case since a
petition for the issuance of a writ of possession is neither a special proceeding nor a land registration
case.36
In their Memorandum, the petitioners additionally submit that they do not dispute that the CA made a
finding that the December 16, 1986 Dismissal Order was not properly served. They, however, point out that
the CA made no such finding with respect to the September 18, 1992 Order of the RTC. The petitioners
contend that the Motion for Reconsideration, filed on May 18, 1993 or eight months later from the
September 18, 1992 Order by the respondent, was filed out of time. Thus, they conclude that any
subsequent ruling of the RTC, including the June 2, 1993 and October 1, 1993 Orders, is barred by res
judicata.37
OUR RULING
We deny the petition for lack of merit.
A. Preliminary Considerations
Our review of the records, particularly the CA decision, indicates that the CA did not determine the
presence or absence of grave abuse of discretion in the RTC decision before it. Given that the petition
before the CA was a petition for certiorari and prohibition under Rule 65 of the Rules of Court, it appears
that the CA instead incorrectly reviewed the case on the basis of whether the RTC decision on the merits
was correct.
To put the case in its proper perspective, the task before us is to examine the CA decision from the prism of
whether it correctly determined the presence or absence of grave abuse of discretion in the RTC decision
before it. Stated otherwise, did the CA correctly determine whether the RTC committed grave abuse of
discretion amounting to lack or excess of jurisdiction in ruling on the case?
As discussed below, our review of the records and the CA decision shows that the RTC did not commit
grave abuse of discretion in issuing an alias writ of possession in favor of the respondent.
B. Applicability of Res Judicata

Under the rule of res judicata, a final judgment or decree on the merits by a court of competent jurisdiction
is conclusive of the rights of the parties or their privies, in all later suits and on all points and matters
determined in the previous suit. The term literally means a "matter adjudged, judicially acted upon, or
settled by judgment."38 The principle bars a subsequent suit involving the same parties, subject matter, and
cause of action. The rationale for the rule is that "public policy requires that controversies must be settled
with finality at a given point in time."39
The doctrine of res judicata embraces two (2) concepts: the first is "bar by prior judgment" under paragraph
(b) of Rule 39, Section 47 of the Rules of Court, and the second is "conclusiveness of judgment" under
paragraph (c) thereof. Res judicata applies in the concept of "bar by prior judgment" if the following
requisites concur: (1) the former judgment or order must be final; (2) the judgment or order must be on the
merits; (3) the decision must have been rendered by a court having jurisdiction over the subject matter and
the parties; and (4) there must be, between the first and the second action, identity of parties, of subject
matter and of causes of action.40
The petitioners claim that res judicata under the first concept applies in the present case because all of the
elements thereof are present. In response, the respondent argues that res judicata did not set in as the first
element is lacking.
We agree with the respondent.
The December 16, 1986 Dismissal Order never attained finality as it was not properly served
The following provisions under Rule 13 of the Rules of Court define the proper modes of service of
judgments:41
SEC. 2. Filing and service, defined. x x x
Service is the act of providing a party with a copy of the pleading or paper concerned. x x x
SEC. 5. Modes of service. Service of pleadings, motions, notices, orders, judgments and other papers
shall be made either personally or by mail.
SEC. 6. Personal service. Service of the papers may be made by delivering personally a copy to the party
or his counsel, or by leaving it in his office with his clerk or with a person having charge thereof. If no
person is found in his office, or his office is not known, or he has no office, then by leaving the copy,
between the hours of eight in the morning and six in the evening, at the partys or counsels residence, if
known, with a person of sufficient age and discretion then residing therein.
SEC. 7. Service by mail. Service by registered mail shall be made by depositing the copy in the office, in
a sealed envelope, plainly addressed to the party or his counsel at his office, if known, otherwise at his
residence, if known, with postage fully pre-paid, and with instructions to the postmaster to return the mail to
the sender after ten (10) days if undelivered. If no registry service is available in the locality of either the
sender or the addressee, service may be done by ordinary mail.
SEC. 8. Substituted service. If service of pleadings, motions, notices, resolutions, orders and other
papers cannot be made under the two preceding sections, the office and place of residence of the party or
his counsel being unknown, service may be made by delivering the copy to the clerk of court, with proof of
failure of both personal service and service by mail. The service is complete at the time of such delivery.
SEC. 9. Service of judgments, final orders or resolutions. Judgments, final orders or resolutions shall be
served either personally or by registered mail. When a party summoned by publication has failed to appear
in the action, judgments, final orders or resolutions against him shall be served upon him also by
publication at the expense of the prevailing party.
As a rule, judgments are sufficiently served when they are delivered personally, or through registered mail
to the counsel of record, or by leaving them in his office with his clerk or with a person having charge
thereof. After service, a judgment or order which is not appealed nor made subject of a motion for
reconsideration within the prescribed 15-day period attains finality.42
In Philemploy Services and Resources, Inc. v. Rodriguez,43 the Court ruled that the Resolution of the

National Labor Relations Commission, denying the respondents motion for reconsideration, cannot be
deemed to have become final and executory as there is no conclusive proof of service of the said
resolution. In the words of the Court, "there was no proof of actual receipt of the notice of the registered
mail by the respondents counsel."44 Based on these findings, the Court concluded that the CA properly
acquired jurisdiction over the respondents petition for certiorari filed before it; in the absence of a reckoning
date of the period provided by law for the filing of the petition, the Court could not assume that it was
improperly or belatedly filed.
Similarly, in Tomawis v. Tabao-Cudang,45 the Court held that the decision of the Regional Trial Court did
not become final and executory where, from the records, the respondent had not received a copy of the
resolution denying her motion for reconsideration.46 The Court also noted that there was no sufficient proof
that the respondent actually received a copy of the said Order or that she indeed received a first notice.
Thus, the Court concluded that there could be no valid basis for the issuance of the writ of execution as the
decision never attained finality.
In the present case, we note that the December 16, 1986 Dismissal Order cannot be deemed to have
become final and executory in view of the absence of a valid service, whether personally or via registered
mail, on the respondents counsel. We note in this regard that the petitioners do not dispute the CA finding
that the "records failed to show that the private respondent was furnished with a copy of the said order of
dismissal[.]"47 Accordingly, the Dismissal Order never attained finality.
The petitioners now claim that the Motion for Reconsideration, filed by the respondent on May 18, 1993
from the September 18, 1992 Order of the RTC, was filed out of time. The petitioners make this claim to
justify their contention that the subsequent rulings of the RTC, including the June 2, 1993 and October 1,
1993 Orders, are barred by res judicata.
We reject this belated claim as the petitioners raised this only for the first time on appeal, particularly, in
their Memorandum. In fact, the petitioners never raised this issue in the proceedings before the court a quo
or in the present petition for review.
As a rule, a party who deliberately adopts a certain theory upon which the case is tried and decided by the
lower court will not be permitted to change the theory on appeal.48 Points of law, theories, issues and
arguments not brought to the attention of the lower court need not be, and ordinarily will not be, considered
by a reviewing court, as these cannot be raised for the first time at such late stage. It would be unfair to the
adverse party who would have no opportunity to present further evidence material to the new theory, which
it could have done had it been aware of it at the time of the hearing before the trial court.49 Thus, to permit
the petitioners in this case to change their theory on appeal would thus be unfair to the respondent and
offend the basic rules of fair play, justice and due process.50
C. Applicability of the Rule on Execution
by Motion or by Independent Action
The petitioners finally submit that the writ of possession, issued by the RTC on February 16, 1984, may no
longer be enforced by a mere motion, but by a separate action, considering that more than five years had
elapsed from its issuance, pursuant to Section 6, Rule 39 of the Rules of Court, which states:
Sec. 6. Execution by motion or by independent action. A final and executory judgment or order may be
executed on motion within five (5) years from the date of its entry. After the lapse of such time, and before it
is barred by the statute of limitations, a judgment may be enforced by action. The revived judgment may
also be enforced by motion within five (5) years from the date of its entry and thereafter by action before it
is barred by the statute of limitations.
Section 6, Rule 39 of the Rules of Court only applies to civil actions
In rejecting a similar argument, the Court held in Paderes v. Court of Appeals51 that Section 6, Rule 39 of
the Rules of Court finds application only to civil actions and not to special proceedings. Citing Sta. Ana v.
Menla,52 which extensively discussed the rationale behind the rule, the Court held:
In a later case [Sta. Ana v. Menla, 111 Phil. 947 (1961)], the Court also ruled that the provision in the
Rules of Court to the effect that judgment may be enforced within five years by motion, and after

five years but within ten years by an action (Section 6, Rule 39) refers to civil actions and is not
applicable to special proceedings, such as land registration cases. x x x x
We fail to understand the arguments of the appellant in support of the above assignment, except in so far
as it supports his theory that after a decision in a land registration case has become final, it may not be
enforced after the lapse of a period of 10 years, except by another proceeding to enforce the judgment or
decision. Authority for this theory is the provision in the Rules of Court to the effect that judgment may be
enforced within 5 years by motion, and after five years but within 10 years, by an action (Sec. 6, Rule 39).
This provision of the Rules refers to civil actions and is not applicable to special proceedings, such
as a land registration case. This is so because a party in a civil action must immediately enforce a
judgment that is secured as against the adverse party, and his failure to act to enforce the same
within a reasonable time as provided in the Rules makes the decision unenforceable against the
losing party. In special proceedings the purpose is to establish a status, condition or fact; in land
registration proceedings, the ownership by a person of a parcel of land is sought to be established.
After the ownership has been proved and confirmed by judicial declaration, no further proceeding
to enforce said ownership is necessary, except when the adverse or losing party had been in
possession of the land and the winning party desires to oust him therefrom.
Subsequently, the Court, in Republic v. Nillas,53 affirmed the dictum in Sta. Ana and clarified that "Rule 39 x
x x applies only to ordinary civil actions, not to other or extraordinary proceedings not expressly governed
by the Rules of Civil Procedure but by some other specific law or legal modality," viz:
Rule 39, as invoked by the Republic, applies only to ordinary civil actions, not to other or extraordinary
proceedings not expressly governed by the Rules of Civil Procedure but by some other specific law or legal
modality such as land registration cases. Unlike in ordinary civil actions governed by the Rules of Civil
Procedure, the intent of land registration proceedings is to establish ownership by a person of a parcel of
land, consistent with the purpose of such extraordinary proceedings to declare by judicial fiat a status,
condition or fact. Hence, upon the finality of a decision adjudicating such ownership, no further step is
required to effectuate the decision and a ministerial duty exists alike on the part of the land registration
court to order the issuance of, and the LRA to issue, the decree of registration.1avvphi1
In the present case, Section 6, Rule 39 of the Rules of Court is not applicable to an ex parte petition for the
issuance of the writ of possession as it is not in the nature of a civil action54 governed by the Rules of Civil
Procedure but a judicial proceeding governed separately by Section 7 of Act No. 3135 which regulates the
methods of effecting an extrajudicial foreclosure of mortgage. The provision states:
Section 7. Possession during redemption period. In any sale made under the provisions of this Act, the
purchaser may petition the [Regional Trial Court] where the property or any part thereof is situated, to give
him possession thereof during the redemption period, furnishing bond in an amount equivalent to the use of
the property for a period of twelve months, to indemnify the debtor in case it be shown that the sale was
made without violating the mortgage or without complying with the requirements of this Act. Such petition
shall be made under oath and filed in form of an ex parte motion in the registration or cadastral proceedings
if the property is registered, or in special proceedings in the case of property registered under the Mortgage
Law or under section one hundred and ninety-four of the Administrative Code, or of any other real property
encumbered with a mortgage duly registered in the office of any register of deeds in accordance with any
existing law, and in each case the clerk of the court shall, upon the filing of such petition, collect the fees
specified in paragraph eleven of section one hundred and fourteen of Act Numbered Four hundred and
ninety-six, as amended by Act Numbered Twenty-eight hundred and sixty-six, and the court shall, upon
approval of the bond, order that a writ of possession issue, addressed to the sheriff of the province in which
the property is situated, who shall execute said order immediately.
The above-cited provision lays down the procedure that commences from the filing of a motion for the
issuance of a writ of possession, to the issuance of the writ of possession by the Court, and finally to the
execution of the order by the sheriff of the province in which the property is located. Based on the text of
the law, we have also consistently ruled that the duty of the trial court to grant a writ of possession is
ministerial; the writ issues as a matter of course upon the filing of the proper motion and the approval of the
corresponding bond.55 In fact, the issuance and the immediate implementation of the writ are declared
ministerial and mandatory under the law.
Thus, in Philippine National Bank v. Adil,56 we emphatically ruled that "once the writ of possession has
been issued, the trial court has no alternative but to enforce the writ without delay." The issuance of a writ

of possession to a purchaser in an extrajudicial foreclosure is summary and ministerial in nature as such

proceeding is merely an incident in the transfer of title. The trial court does not exercise discretion in the
issuance thereof;57 it must grant the issuance of the writ upon compliance with the requirements set forth by
law, and the provincial sheriff is likewise mandated to implement the writ immediately.
Clearly, the exacting procedure provided in Act No. 3135, from the moment of the issuance of the writ of
possession, leaves no room for the application of Section 6, Rule 39 of the Rules of Court which we
consistently ruled, as early as 1961 in Sta. Ana, to be applicable only to civil actions. From another
perspective, the judgment or the order does not have to be executed by motion or enforced by action within
the purview of Rule 39 of the Rules of Court. 58
D. Conclusion
In sum, based on these considerations, we find that the RTC committed no grave abuse of discretion in
issuing an alias writ of possession in favor of the respondent.
WHEREFORE, the present petition is DENIED. The August 26, 2002 Decision and the March 17, 2003
Resolution of the Court of Appeals in CA-G.R. SP No. 32389 are AFFIRMED. Costs against the petitioners.
SO ORDERED.

THIRD DIVISION
G.R. No. 148568

March 20, 2003

ATLANTIC ERECTORS, INC., petitioner,

vs.
HERBAL COVE REALTY CORPORATION, respondent.
PANGANIBAN, J.:
The pendency of a simple collection suit arising from the alleged nonpayment of construction services,
materials, unrealized income and damages does not justify the annotation of a notice of lis pendens on the
title to a property where construction has been done.
Statement of the Case
Before the Court is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court, challenging the
May 30, 2000 Decision2 of the Court of Appeals (CA) in CA-GR SP No. 56432. The dispositive portion of
the Decision is reproduced as follows:
"WHEREFORE, the petition is granted and the assailed November 4, 1998 and October 22, 1999 orders
annulled and set aside. The July 30, 1998 order of respondent judge is reinstated granting the cancellation
of the notices of lis pendens subject of this petition."3
In its July 21, 2001 Resolution,4 the CA denied petitioner's Motion for Reconsideration.
The Facts
The factual antecedents of the case are summarized by the CA in this wise:
"On June 20, 1996, [respondent] and [petitioner] entered into a Construction Contract whereby the former
agreed to construct four (4) units of [townhouses] designated as 16-A, 16-B, 17-A and 17-B and one (1)
single detached unit for an original contract price of P15,726,745.19 which was late[r] adjusted to
P16,726,745.19 as a result of additional works. The contract period is 180 days commencing [on] July 7,
1996 and to terminate on January 7, 1997. [Petitioner] claimed that the said period was not followed due to
reasons attributable to [respondent], namely: suspension orders, additional works, force majeure, and

unjustifiable acts of omission or delay on the part of said [respondent]. [Respondent], however, denied such
claim and instead pointed to [petitioner] as having exceeded the 180 day contract period aggravated by
defective workmanship and utilization of materials which are not in compliance with specifications.
xxx

xxx

xxx

"On November 21, 1997, [petitioner] filed a complaint for sum of money with damages (Civil Case No. 972707) with the Regional Trial Court of Makati entitled 'Atlantic Erectors, Incorporated vs. Herbal Cove
Realty Corp. and Ernest C. Escal[e]r'. This case was raffled to Branch 137, x x x Judge Santiago J. Ranada
presiding. In said initiatory pleading, [petitioner] AEI asked for the following reliefs:
'AFTER DUE NOTICE AND HEARING, to order x x x defendant to:
1. Pay plaintiff the sum of P4,854,229.94 for the unpaid construction services already rendered;
2. To x x x pay plaintiff the sum of P1,595,551.00 for the construction materials, equipment and tools of
plaintiff held by defendant;
3. To x x x pay plaintiff the sum of P2,250,000.00 for the [loss] x x x of expected income from the
construction project;
4. [T]o x x x pay plaintiff the sum of P800,000.00 for the cost of income by way of rental from the equipment
of plaintiff held by defendants;
5. To x x x pay plaintiff the sum of P5,000,000.00 for moral damages;
6. To x x x pay plaintiff the sum of P5,000,000.00 for exemplary damages;
7. To x x x pay plaintiff the sum equivalent of 25% of the total money claim plus P200,000.00 acceptance
fee and P2,500.00 per court appearance;
8. To x x x pay the cost of suit.'
"On the same day of November 21, 1997, [petitioner] filed a notice of lis pendens for annotation of the
pendency of Civil Case No. 97-707 on titles TCTs nos. T-30228, 30229, 30230, 30231 and 30232. When
the lots covered by said titles were subsequently subdivided into 50 lots, the notices of lis pendens were
carried over to the titles of the subdivided lots, i.e., Transfer Certificate of Title Nos. T-36179 to T-36226
and T-36245 to T-36246 of the Register of Deeds of Tagaytay City.
"On January 30, 1998, [respondent] and x x x Ernest L. Escaler, filed a Motion to Dismiss [petitioner's]
Complaint for lack of jurisdiction and for failure to state a cause of action. They claimed [that] the Makati
RTC has no jurisdiction over the subject matter of the case because the parties' Construction Contract
contained a clause requiring them to submit their dispute to arbitration.
xxx

xxx

xxx

"On March 17, 1998, [RTC Judge Ranada] dismissed the Complaint as against [respondent] for
[petitioner's] failure to comply with a condition precedent to the filing of a court action which is the prior
resort to arbitration and as against x x x Escaler for failure of the Complaint to state a cause of action x x x.
"[Petitioner] filed a Motion for Reconsideration of the March 17, 1998 dismissal order. [Respondent] filed its
Opposition thereto.
"On April 24, 1998, [respondent] filed a Motion to Cancel Notice of Lis Pendens. It argued that the notices
of lis pendens are without basis because [petitioner's] action is a purely personal action to collect a sum of
money and recover damages and x x x does not directly affect title to, use or possession of real property.
"In his July 30, 1998 Order, [Judge Ranada] granted [respondent's] Motion to Cancel Notice of Lis Pendens
x x x:
"[Petitioner] filed a Motion for Reconsideration of the aforesaid July 30, 1998 Order to which [respondent]

filed an Opposition.
"In a November 4, 1998 Order, [Judge Ranada,] while finding no merit in the grounds raised by [petitioner]
in its Motion for Reconsideration, reversed his July 30, 1998 Order and reinstated the notices of lis
pendens, as follows:
'1. The Court finds no merit in plaintiff's contention that in dismissing the above-entitled case for lack of
jurisdiction, and at the same time granting defendant Herbal Cove's motion to cancel notice of lis pendens,
the Court [took] an inconsistent posture. The Rules provide that prior to the transmittal of the original record
on appeal, the court may issue orders for the protection and preservation of the rights of the parties which
do not involve any matter litigated by the appeal (3rd par., Sec. 10, Rule 41). Even as it declared itself
without jurisdiction, this Court still has power to act on incidents in this case, such as acting on motions for
reconsideration, for correction, for lifting of lis pendens, or approving appeals, etc.
'As correctly argued by defendant Herbal Cove, a notice of lis pendens serves only as a precautionary
measure or warning to prospective buyers of a property that there is a pending litigation involving the same.
'The Court notes that when it issued the Order of 30 July 1998 lifting the notice of lis pendens, there was as
yet no appeal filed by plaintiff. Subsequently, on 10 September 1998, after a notice of appeal was filed by
plaintiff on 4 September 1998, the Branch Clerk of Court was ordered by the Court to elevate the entire
records of the above-entitled case to the Court of Appeals. It therefore results that the above-entitled case
is still pending. After a careful consideration of all matters relevant to the lis pendens, the Court believes
that justice will be better served by setting aside the Order of 30 July 1998.'
"On November 27, 1998, [respondent] filed a Motion for Reconsideration of the November 4, 1998 Order
arguing that allowing the notice of lis pendens to remain annotated on the titles would defeat, not serve, the
ends of justice and that equitable considerations cannot be resorted to when there is an applicable
provision of law.
xxx

xxx

xxx

"On October 22, 1999, [Judge Ranada] issued an order denying [respondent's] Motion for Reconsideration
of the November 4, 1998 Order for lack of sufficient merit."5
Thereafter, Respondent Herbal Cove filed with the CA a Petition for Certiorari.
Ruling of the Court of Appeals
Setting aside the Orders of the RTC dated November 4, 1998 and October 22, 1999, the CA reinstated the
former's July 30, 1998 Order6 granting Herbal Cove's Motion to Cancel the Notice of Lis Pendens.
According to the appellate court, the re-annotation of those notices was improper for want of any legal
basis. It specifically cited Section 76 of Presidential Decree No. 1529 (the Property Registration Decree).
The decree provides that the registration of such notices is allowed only when court proceedings directly
affect the title to, or the use or the occupation of, the land or any building thereon.
The CA opined that the Complaint filed by petitioner in Civil Case No. 97-2707 was intended purely to
collect a sum of money and to recover damages. The appellate court ruled that the Complaint did not aver
any ownership claim to the subject land or any right of possession over the buildings constructed thereon. It
further declared that absent any claim on the title to the buildings or on the possession thereof, the notices
of lis pendens had no leg to stand on.
Likewise, the CA held that Judge Ranada should have maintained the notice cancellations, which he had
directed in his July 30, 1998 Order. Those notices were no longer necessary to protect the rights of
petitioner, inasmuch as it could have procured protective relief from the Construction Industry Arbitral
Commission (CIAC), where provisional remedies were available. The CA also mentioned petitioner's
admission that there was already a pending case before the CIAC, which in fact rendered a decision on
March 11, 1999.
The appellate court further explained that the re-annotation of the Notice of Lis Pendens was no longer
warranted after the court a quo had ruled that the latter had no jurisdiction over the case. The former held
that the rationale behind the principle of lis pendens -- to keep the subject matter of the litigation within the

power of the court until the entry of final judgment -- was no longer applicable. The reason for such
inapplicability was that the Makati RTC already declared that it had no jurisdiction or power over the subject
matter of the case.
Finally, the CA opined that petitioner's Complaint had not alleged or claimed, as basis for the continued
annotation of the Notice of Lis Pendens, the lien of contractors and laborers under Article 2242 of the New
Civil Code. Moreover, petitioner had not even referred to any lien of whatever nature. Verily, the CA ruled
that the failure to allege and claim the contractor's lien did not warrant the continued annotation on the
property titles of Respondent Herbal Cove.
Hence, this Petition.7
The Issues
Petitioner raises the following issues for our consideration:
"I. Whether or not money claims representing cost of materials [for] and labor [on] the houses constructed
on a property [are] a proper lien for annotation of lis pendens on the property title[.]
"II. Whether or not the trial court[,] after having declared itself without jurisdiction to try the case[,] may still
decide on [the] substantial issue of the case."8
This Court's Ruling
The Petition has no merit.
First Issue:
Proper Basis for a Notice of Lis Pendens
Petitioner avers that its money claim on the cost of labor and materials for the townhouses it constructed on
the respondent's land is a proper lien that justifies the annotation of a notice of lis pendens on the land
titles. According to petitioner, the money claim constitutes a lien that can be enforced to secure payment for
the said obligations. It argues that, to preserve the alleged improvement it had made on the subject land,
such annotation on the property titles of respondent is necessary.
On the other hand, Respondent Herbal Cove argues that the annotation is bereft of any factual or legal
basis, because petitioner's Complaint9 does not directly affect the title to the property, or the use or the
possession thereof. It also claims that petitioner's Complaint did not assert ownership of the property or any
right to possess it. Moreover, respondent attacks as baseless the annotation of the Notice of Lis Pendens
through the enforcement of a contractor's lien under Article 2242 of the Civil Code. It points out that the
said provision applies only to cases in which there are several creditors carrying on a legal action against
an insolvent debtor.
As a general rule, the only instances in which a notice of lis pendens may be availed of are as follows: (a)
an action to recover possession of real estate; (b) an action for partition; and (c) any other court
proceedings that directly affect the title to the land or the building thereon or the use or the occupation
thereof.10 Additionally, this Court has held that resorting to lis pendens is not necessarily confined to cases
that involve title to or possession of real property. This annotation also applies to suits seeking to establish
a right to, or an equitable estate or interest in, a specific real property; or to enforce a lien, a charge or an
encumbrance against it.11
Apparently, petitioner proceeds on the premise that its money claim involves the enforcement of a lien.
Since the money claim is for the nonpayment of materials and labor used in the construction of
townhouses, the lien referred to would have to be that provided under Article 2242 of the Civil Code. This
provision describes a contractor's lien over an immovable property as follows:
"Art. 2242. With reference to specific immovable property and real rights of the debtor, the following claims,
mortgages and liens shall be preferred, and shall constitute an encumbrance on the immovable or real
right:

xxx

xxx

xxx

"(3) Claims of laborers, masons, mechanics and other workmen, as well as of architects, engineers and
contractors, engaged in the construction, reconstruction or repair of buildings, canals or other works, upon
said buildings, canals or other works;
"(4) Claims of furnishers of materials used in the construction, reconstruction, or repair of buildings, canals
or other works, upon said buildings, canals or other works[.]" (Emphasis supplied)
However, a careful examination of petitioner's Complaint, as well as the reliefs it seeks, reveals that no
such lien or interest over the property was ever alleged. The Complaint merely asked for the payment of
construction services and materials plus damages, without mentioning -- much less asserting -- a lien or an
encumbrance over the property. Verily, it was a purely personal action and a simple collection case. It did
not contain any material averment of any enforceable right, interest or lien in connection with the subject
property.
As it is, petitioner's money claim cannot be characterized as an action that involves the enforcement of a
lien or an encumbrance, one that would thus warrant the annotation of the Notice of Lis Pendens. Indeed,
the nature of an action is determined by the allegations of the complaint.12
Even assuming that petitioner had sufficiently alleged such lien or encumbrance in its Complaint, the
annotation of the Notice of Lis Pendens would still be unjustified, because a complaint for collection and
damages is not the proper mode for the enforcement of a contractor's lien.
In J.L. Bernardo Construction v. Court of Appeals,13 the Court explained the concept of a contractor's lien
under Article 2242 of the Civil Code and the proper mode for its enforcement as follows:
"Articles 2241 and 2242 of the Civil Code enumerates certain credits which enjoy preference with respect
to specific personal or real property of the debtor. Specifically, the contractor's lien claimed by the
petitioners is granted under the third paragraph of Article 2242 which provides that the claims of contractors
engaged in the construction, reconstruction or repair of buildings or other works shall be preferred with
respect to the specific building or other immovable property constructed.
"However, Article 2242 finds application when there is a concurrence of credits, i.e., when the same
specific property of the debtor is subjected to the claims of several creditors and the value of such property
of the debtor is insufficient to pay in full all the creditors. In such a situation, the question of preference will
arise, that is, there will be a need to determine which of the creditors will be paid ahead of the others.
Fundamental tenets of due process will dictate that this statutory lien should then only be enforced in the
context of some kind of a proceeding where the claims of all the preferred creditors may be bindingly
adjudicated, such as insolvency proceedings."14 (Emphasis supplied)
Clearly then, neither Article 2242 of the Civil Code nor the enforcement of the lien thereunder is applicable
here, because petitioner's Complaint failed to satisfy the foregoing requirements. Nowhere does it show
that respondent's property was subject to the claims of other creditors or was insufficient to pay for all
concurring debts. Moreover, the Complaint did not pertain to insolvency proceedings or to any other action
in which the adjudication of claims of preferred creditors could be ascertained.
Another factor negates the argument of petitioner that its money claim involves the enforcement of a lien or
the assertion of title to or possession of the subject property: the fact that it filed its action with the RTC of
Makati, which is undisputedly bereft of any jurisdiction over respondent's property in Tagaytay City.
Certainly, actions affecting title to or possession of real property or the assertion of any interest therein
should be commenced and tried in the proper court that has jurisdiction over the area, where the real
property involved or a portion thereof is situated.15 If petitioner really intended to assert its claim or enforce
its supposed lien, interest or right over respondent's subject properties, it would have instituted the proper
proceedings or filed a real action with the RTC of Tagaytay City, which clearly had jurisdiction over those
properties.16
Narciso Pea, a leading authority on the subject of land titles and registration, gives an explicit exposition
on the inapplicability of the doctrine of lis pendens to certain actions and proceedings that specifically
include money claims. He explains in this wise:

"By express provision of law, the doctrine of lis pendens does not apply to attachments, levies of execution,
or to proceedings for the probate of wills, or for administration of the estate of deceased persons in the
Court of First Instance. Also, it is held generally that the doctrine of lis pendens has no application to a
proceeding in which the only object sought is the recovery of a money judgment, though the title or right of
possession to property be incidentally affected. It is essential that the property be directly affected, as
where the relief sought in the action or suit includes the recovery of possession, or the enforcement of a
lien, or an adjudication between conflicting claims of title, possession, or the right of possession to specific
property, or requiring its transfer or sale"17 (Emphasis supplied)
Pea adds that even if a party initially avails itself of a notice of lis pendens upon the filing of a case in
court, such notice is rendered nugatory if the case turns out to be a purely personal action. We quote him
as follows:
"It may be possible also that the case when commenced may justify a resort to lis pendens, but during the
progress thereof, it develops to be purely a personal action for damages or otherwise. In such event, the
notice of lis pendens has become functus officio."18 (Emphasis supplied)
Thus, when a complaint or an action is determined by the courts to be in personam, the rationale for or
purpose of the notice of lis pendens ceases to exist. To be sure, this Court has expressly and categorically
declared that the annotation of a notice of lis pendens on titles to properties is not proper in cases wherein
the proceedings instituted are actions in personam.19
Second Issue:
Jurisdiction of the Trial Court
Petitioner argues that the RTC had no jurisdiction to issue the Order canceling the Notice of Lis Pendens
as well as the Order reinstating it. Supposedly, since both Orders were issued by the trial court without
jurisdiction, the annotation made by the Register of Deeds of Tagaytay City must remain in force.
Petitioner avers that the trial court finally declared that the latter had no jurisdiction over the case on July
27, 1998, in an Order denying the former's Motion for Reconsideration of the March 17, 1998 Order
dismissing the Complaint. Petitioner insists that the subsequent July 30, 1998 Order cancelling the subject
Notice of Lis Pendens is void, because it was issued by a court that had no more jurisdiction over the case.
Rule 41 of the 1997 Rules on Civil Procedure, which governs appeals from regional trial courts, expressly
provides that RTCs lose jurisdiction over a case when an appeal is filed. The rule reads thus:
"SEC. 9. Perfection of appeal; effect thereof. -- A party's appeal by notice of appeal is deemed perfected as
to him upon the filing of the notice of appeal in due time.
xxx

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xxx

"In appeals by notice of appeal, the court loses jurisdiction over the case upon the perfection of the appeals
filed in due time and the expiration of the time to appeal of the other parties." (Emphasis supplied)
On the basis of the foregoing rule, the trial court lost jurisdiction over the case only on August 31, 1998,
when petitioner filed its Notice of Appeal.20 Thus, any order issued by the RTC prior to that date should be
considered valid, because the court still had jurisdiction over the case. Accordingly, it still had the authority
or jurisdiction to issue the July 30, 1998 Order canceling the Notice of Lis Pendens. On the other hand, the
November 4, 1998 Order that set aside the July 30, 1998 Order and reinstated that Notice should be
considered without force and effect, because it was issued by the trial court after it had already lost
jurisdiction.
In any case, even if we were to adopt petitioner's theory that both the July 30, 1998 and the November 4,
1998 Orders were void for having been issued without jurisdiction, the annotation is still improper for lack of
factual and legal bases.
As discussed previously, erroneously misplaced is the reliance of petitioner on the premise that its money
claim is an action for the enforcement of a contractor's lien. Verily, the annotation of the Notice of Lis
Pendens on the subject property titles should not have been made in the first place. The Complaint filed

before the Makati RTC -- for the collection of a sum of money and for damages -- did not provide sufficient
legal basis for such annotation.
Finally, petitioner vehemently insists that the trial court had no jurisdiction to cancel the Notice. Yet, the
former filed before the CA an appeal, docketed as CA-GR CV No. 65647,21 questioning the RTC's
dismissal of the Complaint for lack of jurisdiction. Moreover, it must be remembered that it was petitioner
which had initially invoked the jurisdiction of the trial court when the former sought a judgment for the
recovery of money and damages against respondent. Yet again, it was also petitioner which assailed that
same jurisdiction for issuing an order unfavorable to the former's cause. Indeed, parties cannot invoke the
jurisdiction of a court to secure affirmative relief, then repudiate or question that same jurisdiction after
obtaining or failing to obtain such relief.22
WHEREFORE, the Petition is hereby DENIED and the assailed Decision AFFIRMED. Costs against
petitioner.
SO ORDERED.

THIRD DIVISION
G.R. No. 174290

January 20, 2009

ST. MARY OF THE WOODS SCHOOL, INC. and MARCIAL P. SORIANO, petitioners,
vs.
OFFICE OF THE REGISTRY OF DEEDS OF MAKATI CITY and HILARIO P. SORIANO,
x---------------------x
G.R. No. 176116

January 20, 2009

ST. MARY OF THE WOODS SCHOOL, INC. and MARCIAL P. SORIANO, petitioners,
vs.
OFFICE OF THE REGISTRY OF DEEDS OF MAKATI CITY, NATIONAL BUREAU OF INVESTIGATION,
and HILARIO P. SORIANO, Respondents.
DECISION
CHICO-NAZARIO, J.:
Before this Court are two special civil actions for Certiorari and Prohibition under Rule 65 of the 1997
Revised Rules of Civil Procedure, which were consolidated per Resolution1 dated 5 February 2007.
The petitioners in G.R. No. 174290, namely: St. Mary of the Woods School, Inc. (SMWSI) and Marcial P.
Soriano, seek to annul and set aside on the ground of grave abuse of discretion tantamount to lack or
excess of jurisdiction the Resolution2 dated 18 August 2006 of the Court of Appeals in CA-G.R. CV No.
85561, which granted herein private respondent Hilario P. Sorianos Motion to Reinstate/Re-annotate the
Notice of Lis Pendens over Transfer Certificates of Title (TCT) No. 175029,3 2209774 and 220978,5 of the
Registry of Deeds of Makati City, all registered in the name of herein petitioner SMWSI.
The afore-named petitioners are the same petitioners in G.R. No. 176116 in which they also seek to annul
and set aside, on the ground of grave abuse of discretion amounting to lack or excess of jurisdiction, the
three Resolutions similarly rendered by the Court of Appeals in CA-G.R. CV No. 85561, to wit: (1)
Resolution6 dated 18 August 2006 denying petitioners Motion to Dismiss Appeal of herein private
respondent Hilario P. Soriano; (2) Resolution7 dated 9 November 2006 denying for lack of merit petitioners

Motion for Reconsideration of the 18 August 2006 Resolution of the appellate court, as well as the
supplement to the said motion; and (3) Resolution8 dated 9 November 2006 requiring the Register of
Deeds of Makati City to submit to the appellate court the original copies of the documents involved in Civil
Case No. 03-954 so that they can be presented to the National Bureau of Investigation (NBI) for
comparative analysis of the signatures of Tomas Q. Soriano.
Petitioner SMWSI is an educational institution incorporated and existing by virtue of the laws of the
Republic of the Philippines. It is the current registered owner of the three parcels of land (subject
properties), located in Makati City and covered by TCTs No. 175029, No. 220977 and No. 220978.
Petitioner Marcial P. Soriano is the President of petitioner SMWSI.
Private respondent Hilario P. Soriano, on the other hand, is one of the siblings of petitioner Marcial P.
Soriano.
The consolidated cases presently before this Court originated from the Complaint9 filed on 14 August 2003
by the private respondent with the Regional Trial Court (RTC) of Makati City, Branch 148, for Declaration of
Nullity of Deed of Assignment, Deed of Sale and Cancellation of TCTs No. 156249, No. 156250, and No.
156251 of the Register of Deeds of Makati, Metro Manila,10 registered in the name of Oro Development
Corporation (ODC); and TCT No. 175029, registered in the name of petitioner SMWSI. Named defendants
therein were the petitioners, together with ODC, Antonio P. Soriano, Aurelia P. Soriano-Hernandez,
Rosario P. Soriano-Villasor, Eugenia Ma. P. Soriano-Lao and Josefina P. Soriano (hereinafter collectively
referred to as petitioners, et al.). The Complaint was docketed as Civil Case No. 03-954.
In his Complaint, private respondent alleged that during the marriage of his parents, Tomas Q. Soriano and
Josefina P. Soriano, the couple acquired both real and personal properties, including the subject properties,
which were then covered by TCTs No. 169941,11 No. 114408,12 and No. 114409.13 On 10 May 1988, the
Soriano couple allegedly executed14 a Deed of Assignment15 in favor of ODC involving the subject
properties to pay for Tomas Q. Sorianos subscription of stocks in the said corporation. On 14 June 1988,
Tomas Q. Soriano died16 intestate.
By virtue of the said Deed of Assignment, the ownership and title over the subject properties were
transferred to ODC. Consequently, TCTs No. 169941, No. 114408 and No. 114409 were cancelled and the
new TCTs No. 156249,17 No. 15625018 and No. 15625119 were issued in the name of ODC.
Thereafter, on 26 April 1991, ODC executed20 in favor of petitioner SMWSI a Deed of Sale21 over the
subject property covered by TCT No. 156249. By virtue of the sale, petitioner SMWSI acquired ownership
and title over the particular property. Thus, TCT No. 156249 was cancelled and the new TCT No. 175209
was issued in the name of petitioner SMWSI.
Private respondent claimed that several years after his father Tomas Q. Sorianos death, he discovered
that the latters signature in the Deed of Assignment of 10 May 1988 in favor of ODC was a forgery. Being
very familiar with his fathers signature, private respondent compared Tomas Q. Sorianos purported
signature in the Deed of Assignment of 10 May 1988 with Tomas Q. Sorianos genuine signature in another
document captioned Second Amendment of Credit Agreement.22 Private respondent also presented a
Certification23 from the Records Management and Archives Office which stated that the forged Deed of
Assignment dated 10 May 1988 was not available in the files of the Office.
Meanwhile, by reason of the pendency of Civil Case No. 03-954, a Notice of Lis Pendens was annotated on
TCTs No. 156249, No. 156250, and No. 156251, in the name of ODC. With the subsequent cancellation of
TCT No. 156249 and the issuance of TCT No. 175209 in the name of petitioner SMWSI, the Notice of Lis
Pendens was carried over to the new certificate of title.
In a Joint Affidavit24 dated 18 July 1990 executed by petitioner Marcial P. Soriano, it appears that the other
individual defendants in Civil Case No. 03-954, and private respondent, recognized and acknowledged the
validity, legality and propriety of the transfer of the subject properties from Tomas Q. Soriano to ODC. On
this basis, defendants filed with the RTC a Motion to Dismiss25 Civil Case No. 03-954 on the grounds that:
(1) the Complaint states no cause of action; (2) the claim set forth in the Complaint has been paid, waived,
abandoned or otherwise extinguished; (3) the Complaint is barred by estoppel or laches; (4) the Complaint
is barred by prescription; (5) the titles to the subject properties are incontestable and can no longer be
annulled; and (6) a condition precedent for filing the claim has not been complied with, i.e., the compromise
agreement failed despite earnest efforts towards that end.

On 17 January 2005, the RTC issued an Order26 dismissing the private respondents Complaint. The RTC
ratiocinated in this manner:
A careful reading of the [14] August 2003 Complaint filed by [herein private respondent] Hilario P. Soriano
would suffice that he indeed failed to state that he has a right over the [subject properties] and that the
[herein petitioners, et al.] have the obligation to observe such right. Assuming for the sake of argument that
the signature was forged, the [private respondent] did not state that he was deprived of his share in the
legitime of the deceased. Thus, his right over the [subject properties which were] assigned by the deceased
was not clearly defined and stated in the [C]omplaint filed.
xxxx
x x x. Also, the [private respondent] must comply with the provision of the Civil Code of [the] Philippines, to
wit:
"Article 22227 No suit shall be filed or maintained between members of the same family unless it should
appear that earnest efforts toward a compromise have been made, but that the same have failed, subject to
the limitations in Article 2035."
x x x. There is no showing in the allegations in the [C]omplaint of the [private respondent] that he complied
with the requirement of the law. Thus, the Court finds merit in the position of the [petitioners, et al.]
xxxx
x x x. Clearly, the act of the [private respondent] in acknowledging the legality, validity and genuineness of
the [D]eed of [A]ssignment in the [J]oint [A]ffidavit placed him in no better position to question the validity of
the subject document. [Private respondent] never questioned the distribution of the properties among the
heirs of Tomas Soriano. [Private respondent] even accepted the conveyance of a parcel of land covered by
TCT No. 156253. By accepting said property as his share in the estate of his late father, [private
respondent] is now deemed to have been paid or compensated because there was delivery of his share in
the estate of the deceased. It can now be conclusively presumed that his share in the legitime of deceased
Tomas Soriano was fully awarded to [private respondent]. He is now estopped in questioning the validity of
the [D]eed of [A]ssignment by Tomas Q. Soriano in favor of [ODC]. Accordingly, all subsequent
conveyances involving the subject properties can no longer be questioned by [private respondent] Hilario P.
Soriano.28
Accordingly, the RTC decreed:
WHEREFORE, finding merits on the [M]otion to [D]ismiss filed by [herein petitioners, et al.] and in the
prayer set forth in the [A]nswer of defendants Josefina P. Soriano and Rosario P. Soriano-Villasor, the
dismissal of this case is hereby GRANTED. Accordingly, the Complaint filed by [private respondent] Hilario
P. Soriano is dismissed because it asserts no cause of action and the claim or demand set forth in the
[private respondents] pleading has been waived, abandoned, or otherwise extinguished, and that a
condition precedent for filing the claim has not been complied with.29
In the interim, the subject properties covered by TCTs No. 156250 and No. 156251 in the name of ODC
were also transferred to petitioner SMWSI by virtue of a Deed of Sale dated 3 February 2005. TCTs No.
156250 and No. 156251 in the name of ODC were then cancelled and the new TCTs No. 220977 and No.
220978 were issued in the name of petitioner SMWSI. The Notice of Lis Pendens annotated on the
cancelled TCTs was copied into the new TCTs in the name of petitioner SMWSI.
Aggrieved by the RTC Order dated 17 January 2005, private respondent moved for its reconsideration, but
the RTC denied the same in an Order30 dated 26 April 2005.
On 16 May 2005, petitioners, et al., filed with the RTC a Motion to Cancel Notice of Lis Pendens31
annotated on the titles covering the subject properties, which Motion was opposed by the private
respondent.
The very next day, 17 May 2005, private respondent filed a Notice of Appeal stating his intention to elevate
the RTC Orders dated 17 January 2005 and 26 April 2005 to the Court of Appeals. Private respondents
appeal before the Court of Appeals was docketed as CA-G.R. CV No. 85561.

Meanwhile, the RTC issued its Order32 dated 20 June 2005 granting the Motion to Cancel Notice of Lis
Pendens filed by petitioners, et al., and ordering the Registrer of Deeds of Makati City to cancel the Notice
of Lis Pendens annotated on TCTs No. 156249, No. 156250, No. 156251 in the name of ODC and TCT No.
175029 in the name of petitioner SMWSI. The RTC justified its latest Order as follows:
As mentioned in the case, the notice of lis pendens can be cancelled if it is not necessary to protect the
interest of the party who caused it to be recorded. In this case, the [herein private respondents] interest
should be considered on whether the notice of lis pendens should be cancelled or not. As it is the Court
believes that the cancellation is proper in this case. First, the Court still has jurisdiction of the case
considering that the Notice of Appeal was only filed on [17 May 2005], while the Motion to cancel Notice of
Lis Pendens was filed on [16 May 2005]. Second, [private respondent] Hilario P. Soriano has no interest to
be protected insofar as the subject properties are concerned because of his acknowledgment that he
already received his share in the estate of Tomas Soriano. Lastly, the contention of the [private respondent]
that the motion is premature is not tenable. The authority of the Court to Cancel Notice of Lis Pendens is
even evident in the Comment/Opposition of the [private respondent] which states that "While it may be true
that the cancellation of a notice of lis pendens may be ordered at any given time even before final
judgment, x x x."33
On 4 July 2005, the petitioners, et al., filed with the RTC a Motion for Issuance of Supplement to Order
Cancelling Notice of Lis Pendens34 to clarify that TCTs No. 156249, No. 156250, and No. 156251 in the
name of ODC were already cancelled and replaced with TCTs No. 175209, No. 220977, and No. 220978
all registered in the name of petitioner SMWSI in which the Notice of Lis Pendens was carried over. The
private respondent, on the other hand, filed a Motion for Reconsideration of the RTC Order dated 20 June
2005 with Comment on the petitioners, et al.s, Motion for Issuance of Supplement to the same RTC Order.
On 15 July 2005, the RTC issued another Order35 by way of supplement to its Order dated 20 June 2005,
directing anew the Registrer of Deeds of Makati City to cancel the Notice of Lis Pendens annotated on
TCTs No. 175029, No. 220977 and No. 220978 in the name of petitioner SMWSI.
In a subsequent Order36 dated 15 August 2005, the RTC denied for lack of merit private respondents
Motion for Reconsideration of the RTC Order dated 20 June 2005.
On 28 September 2005, private respondent received a directive from the Court of Appeals dated 20
September 2005 requiring him to file his Appellants Brief pursuant to his Notice of Appeal dated 17 May
2005. In compliance therewith, private respondent submitted his Appellants Brief to the Court of Appeals
with the following assignment of errors:
1. The lower court erred in dismissing the [C]omplaint on the ground that no certificate from a signature
expert was attached to affirm the conclusion of the [herein private respondent] that the signature of Tomas
Q. Soriano in the [D]eed of [A]ssignment was forged and on the ground that neither can the certificate
issued by the Records Management and Archive Office support such allegation and that the [herein
petitioners, et al.] cannot shoulder the burden caused by the Notary Public in failing to file the notarized
documents, if he indeed failed.
2. The lower court erred in dismissing the [C]omplaint on the ground that the [private respondent] failed to
state that he has a right over the subject properties and that the [petitioners, et al.] have the obligation to
observe such right.
3. The lower court erred in ruling that Article 151 of the Family Code should have been complied with.
4. The lower court erred in denying [private respondents] [M]otion for [R]econsideration despite valid and
compelling arguments that warrant the reconsideration prayed for.
5. The lower court erred in granting [petitioners, et al.] [M]otion for [C]ancellation of Lis Pendens.
6. The lower court erred in dismissing the [C]omplaint on the ground that by accepting the conveyance of a
parcel of land covered by TCT No. 156253 as his share in the estate of his late father, [private respondent]
is now deemed to have been paid or compensated because there was delivery of his share in the estate of
the deceased.37
While CA-G.R. CV No. 85561 was still pending, and since the Notice of Lis Pendens annotated on the

TCTs of the subject properties in the name of petitioner SMWSI was already cancelled per RTC Orders
dated 20 June 2005 and 15 July 2005, petitioner SMWSI mortgaged the subject properties on 15 February
2006 for the amount of P8,000,000.00.
On 14 March 2006, private respondent filed before the Court of Appeals a Motion to Reinstate/Re-annotate
Notice of Lis Pendens on the TCTs of the subject properties given that there was yet no final judgment of
dismissal of his Complaint, as its dismissal had been duly appealed. Moreover, it had not been shown that
the Notice of Lis Pendens was to molest the petitioners, et al., or that the same was not necessary to
protect his interests; thus, its re-annotation on the TCTs of the subject properties while the appeal was
pending would be in accordance with public policy. Petitioners, et al., opposed the aforesaid Motion of
private respondent.
On 17 March 2006, petitioners, et al., filed a Motion to Dismiss Appeal on the ground that "the issues in the
appeal are and can only be questions of law, the appellate jurisdiction over which belongs exclusively to the
Supreme Court, thus the dismissal of [private respondents] appeal is mandatory pursuant to Supreme
Court Circular No. 2-90 and Section 2, Rule 50 of the 1997 Rules of Civil procedure."38
Thereafter, on 18 August 2006, the Court of Appeals issued a Resolution granting private respondents
Motion to Reinstate/Re-annotate Notice of Lis Pendens on the TCTs of the subject properties. The Court of
Appeals ruled that although the RTC found that private respondent had no interest to be protected by the
Notice of Lis Pendens, since the appellate court already acquired jurisdiction over the case, it was the latter
which must ascertain the propriety of canceling the Notice of Lis Pendens upon proper motion and
hearing.39 On the same day, the Court of Appeals also issued a separate Resolution denying petitioners, et
al.s, Motion to Dismiss Appeal of private respondent. According to the appellate court, private respondent
raised both questions of fact and law in his appeal; hence, the ground for the dismissal of the appeal relied
upon by the petitioners, et al., was untenable.
G.R. No. 17429040
Aggrieved by the Resolution dated 18 August 2006 of the Court of Appeals granting private respondents
Motion to Reinstate/Re-annotate Notice of Lis Pendens on the subject properties, petitioners, without filing
a Motion for Reconsideration, filed on 11 September 2006 before this Court the instant Petition for
Certiorari under Rule 65 of the 1997 Revised Rules of Civil Procedure alleging grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of the appellate court in rendering the assailed
Resolution. The Petition is docketed as G.R. No. 174290.
Petitioners maintain that the RTC Orders canceling the Notice of Lis Pendens on the TCTs of the subject
properties were valid and proper as they were issued on the basis of private respondents lack of
interest/right over the subject properties to be protected by the annotation of such Notice. Moreover, the
cancellation of the Notice of Lis Pendens is authorized by Section 14,41 Rule 13 of the 1997 Revised Rules
of Civil Procedure, as well as under Section 77,42 Presidential Decree No. 1529.43 Hence, the reinstatement
of the Notice of Lis Pendens should not have been allowed.
Petitioners opine that the Court of Appeals gravely abused its discretion when it ordered the re-annotation
of the Notice of Lis Pendens based on the mere motion filed by private respondent, as it was violative of the
proper procedures prescribed under Presidential Decree No. 1529.
Grave abuse of discretion is committed when an act is 1) done contrary to the Constitution, the law or
jurisprudence; or 2) executed "whimsically or arbitrarily" in a manner "so patent and so gross as to amount
to an evasion of a positive duty, or to a virtual refusal to perform the duty enjoined." What constitutes grave
abuse of discretion is such capricious and arbitrary exercise of judgment as that which is equivalent, in the
eyes of the law, to lack of jurisdiction.44 It does not encompass an error of law.45
At the outset, it is significant to note that petitioners filed the instant Petition without filing a Motion for
Reconsideration of the assailed Resolution. A Motion for Reconsideration of the order or resolution is a
condition precedent for the filing of a Petition for Certiorari challenging the issuance of the same.46
The general rule that the filing of a Motion for Reconsideration before resort to certiorari will lie is intended
to afford the public respondent an opportunity to correct any factual or fancied error attributed to it by way
of re-examination of the legal and factual aspects of the case.47 This rule, however, is subject to certain
recognized exceptions, to wit: (1) where the order or a resolution, is a patent nullity, as where the court a

quo has no jurisdiction; (2) where the questions raised in the certiorari proceeding have been duly raised
and passed upon in the lower court; (3) where there is an urgent necessity for the resolution of the
question, and any further delay would prejudice the interests of the Government or of the petitioner or the
subject matter of the action is perishable; (4) where, under the circumstances, a Motion for Reconsideration
would be useless; (5) where petitioner was deprived of due process and there is extreme urgency for relief;
(6) where, in a criminal case, relief from an order of arrest is urgent and the granting of such relief by the
trial court is improbable; (7) where the proceedings in the lower court are a nullity for lack of due process;
(8) where the proceedings were ex parte or were such that the petitioner had no opportunity to object; and
(9) where the issue raised is one purely of law or where public interest is involved.48
In the case at bar, petitioners aver that they dispensed with the filing of a Motion for Reconsideration of the
18 August 2006 before the Court of Appeals because of the extreme urgency of the relief prayed for, and
the issues raised herein are purely of law and involve public interest, therefore, placing the instant case
within the ambit of the exceptions to the general rule. Petitioners claim that at the time of filing of this
Petition, private respondent was taking steps and other measures to present for registration the 18 August
2006 Resolution of the Court of Appeals to the Office of the Registry of Deeds of Makati City so as to
already re-annotate the Notice of Lis Pendens on the TCTs of the subject properties, prompting petitioners
to immediately file the instant Petition without seeking reconsideration of the assailed Resolution.
We find that petitioners reasons for excusing themselves from filing a Motion for Reconsideration before
filing the present Petition for Certiorari are baseless and unsubstantiated.
Petitioners averment of sense of urgency in that private respondent was already taking steps and other
measures to have the Notice of Lis Pendens re-annotated by presenting the 18 August 2006 Resolution of
the Court of Appeals to the Office of the Registry of Deeds of Makati City deserves scant consideration.
Petitioners never described with particularity, much less, presented proof of the steps purportedly taken by
the private respondent that would justify their immediate resort to this Court on certiorari without seeking
reconsideration of the Resolution in question from the Court of Appeals. Petitioners simply made a
sweeping allegation that absolutely has no basis. The records themselves are bare of any proof that would
convince this Court that the private respondent indeed, took steps to have the challenged Resolution
implemented. In fact, petitioners themselves, in their letter49 dated 8 September 2006 addressed to the
Office of the Registry of Deeds of Makati City, pointed out that the questioned Resolution of the Court of
Appeals did not yet order the said Office to re-annotate the Notice of Lis Pendens. Petitioners explained in
their letter that the 18 August 2006 Resolution granting private respondents Motion to Reinstate/Reannotate Notice of Lis Pendens is a mere indication that private respondent can proceed with the legal
procedure leading to the actual re-annotation of the said notice. They even reminded the Register of Deeds
of Makati City that even if it would be furnished with a copy of the assailed Resolution, it had no authority to
reinstate/re-annotate the Notice of Lis Pendens without a proper and direct order from the appellate court.
More importantly, petitioners explicitly revealed in their letter that they intended to file a Motion for
Reconsideration with the Court of Appeals, as its Resolution dated 18 August 2006 had not yet acquired
finality. Why then did petitioners not proceed with filing their motion for reconsideration, and opted to
immediately file the present Petition for Certiorari?
Similarly baseless is petitioners bare assertion, without even an attempt at explaining, that the issues
subject of the Petition at bar involve public interest sufficient to excuse them from filing a Motion for
Reconsideration of the Resolution dated 18 August 2006.
Given the foregoing, the Court dismisses the instant Petition for Certiorari for petitioners failure to comply
with a condition precedent for filing such a petition.
Granting arguendo that the present special civil action for certiorari can be given due course, the Court still
finds that the Court of Appeals did not commit any grave abuse of discretion in granting private
respondents Motion to Reinstate/Re-annotate Notice of Lis Pendens.
Lis pendens, which literally means pending suit, refers to the jurisdiction, power or control which a court
acquires over property involved in a suit, pending the continuance of the action, and until final judgment.
Founded upon public policy and necessity, lis pendens is intended (1) to keep the properties in litigation
within the power of the court until the litigation is terminated and to prevent the defeat of the judgment or
decree by subsequent alienation; and (2) to announce to the whole world that a particular property is in
litigation and serves as a warning that one who acquires an interest over said property does so at his own
risk, or that he gambles on the result of the litigation over said property.50

A trial court has, however, the inherent power to cancel a notice of lis pendens, under the express
provisions of law.51 As provided for by Sec. 14, Rule 13 of the 1997 Rules of Civil Procedure, a notice of lis
pendens may be cancelled on two grounds: (1) if the annotation was for the purpose of molesting the title of
the adverse party; or (2) when the annotation is not necessary to protect the title of the party who caused it
to be recorded.
Considering that the dismissal of private respondents Complaint by the RTC was appealed to the Court of
Appeals, which Complaint refers to the properties covered by TCTs No. 175209, No. 220977, and No.
220978 that bear the annotations of lis pendens, and such properties therefore are irrefragably still the
subject matter of litigation, the appellate court rightly saw the need for giving notice to the public of such a
fact. The necessity becomes even more compelling considering that petitioner SMWSI had already entered
into transactions with third parties involving the subject properties.
On the issue of jurisdiction of the Court of Appeals to entertain the issue on the notice of lis pendens, we
adhere to the Court of Appeals ratiocination, thus:
However, as the dismissal of this case by the lower court has been appealed to us, we now have
jurisdiction over the case.
The doctrine of lis pendens is based on consideration of public policy and convenience, under the view that
once a court has taken cognizance of a controversy, it should be impossible to interfere with the
consummation of the judgment by any ad interim transfer, encumbrance, or change of possession.
Now that the case is pending before us on appeal, there is no certainty as to the outcome of the case.
There is a need to warn the whole world that a particular property is in litigation, serving as a warning that
the one who acquires an interest over said property does so at his own risk, or that he gambles on the
result of the litigation over said property.
x x x. Although the lower court made a finding that [herein private respondent] Hilario has no interest to be
protected by the annotation of the notice of the pendency of the case as we now have jurisdiction over the
case, we have to ascertain for ourselves the propriety of canceling the annotation of the notice of lis
pendens upon proper motion and hearing.52
There is likewise no merit in petitioners contention that the filing by private respondent with the Court of
Appeals of an appeal (where he already raised the issue of re-annotating the Notice of Lis Pendens) and,
subsequently, a separate Motion to Reinstate/Re-annotate Notice of Lis Pendens is tantamount to forum
shopping.
Forum shopping is committed by a party who, having received an adverse judgment in one forum, seeks
another opinion in another court, other than by appeal or the special civil action of certiorari. More
accurately, however, forum shopping is the institution of two or more suits in different courts, either
simultaneously or successively, in order to ask the courts to rule on the same or related causes and/or to
grant the same or substantially the same reliefs.53 The essence of forum-shopping is the filing of multiple
suits involving the same parties for the same cause of action, either simultaneously or successively, to
secure a favorable judgment. Forum-shopping is present when in the two or more cases pending, there is
identity of parties, rights of action and reliefs sought.54
In the present case, what were filed by the private respondent before the appellate court were an appeal
and a motion relative to the same case. The appeal and the motion filed by the private respondent cannot
be regarded as separate and distinct cases or suits. It is settled that the office of a motion is not to initiate
new litigation, but to bring up a material but incidental matter arising in the progress of the case in which the
motion was filed. A motion is not an independent right or remedy, but is confined to incidental matters in the
progress of a cause. It relates to some question that is collateral to the main object of the action and is
connected with and dependent upon the principal remedy.55 Private respondents Motion to Reinstate/Reannotate Notice of Lis Pendens is, at the very least, a mere reiteration of one particular issue already raised
in the appeal, and an insistence on the urgency of resolving the same ahead of the other issues. The filing
of said Motion cannot be considered forum shopping and the admission thereof by the Court of Appeals did
not constitute grave abuse of discretion.
Finally, petitioners futilely attempt to convince this Court that the Court of Appeals acted with grave abuse
of discretion in granting private respondents Motion to Reinstate/Re-annotate Notice of Lis Pendens in

violation of the proper procedures prescribed under Presidential Decree No. 1529:
Section 117. Procedure. When the Register of Deeds is in doubt with regard to the proper step to be taken
or memorandum to be made in pursuance of any deed, mortgage or other instrument presented to him for
registration, or where any party in interest does not agree with the action taken by the Register of Deeds
with reference to any such instrument, the question shall be submitted to the Commissioner of Land
Registration by the Register of Deeds, or by the party in interest thru the Register of Deeds.
Where the instrument is denied registration, the Register of Deeds shall notify the interested party in
writing, setting forth the defects of the instrument or legal grounds relied upon, and advising him that if he is
not agreeable to such ruling, he may, without withdrawing the documents from the Registry, elevate the
matter by consulta within five days from receipt of notice of the denial of registration to the Commissioner of
Land Registration.
The Register of Deeds shall make a memorandum of the pending consulta on the certificate of title which
shall be canceled motu proprio by the Register of Deeds after final resolution or decision thereof, or before
resolution, if withdrawn by petitioner.
The Commissioner of Land Registration, considering the consulta and the records certified to him after
notice to the parties and hearing, shall enter an order prescribing the step to be taken or memorandum to
be made. His resolution or ruling in consultas shall be conclusive and binding upon all Registers of Deeds,
provided, that the party in interest who disagrees with the final resolution, ruling or order of the
Commissioner relative to consultas may appeal to the Court of Appeals within the period and in the manner
provided in Republic Act No. 5434.
It is clear that the afore-quoted procedure applies only when the instrument is already presented for
registration and: (1) the Register of Deeds is in doubt with regard to the proper step to be taken or
memorandum to be made in pursuance of any deed, mortgage or other instrument presented to him for
registration; or (2) where any party in interest does not agree with the action taken by the Register of Deeds
with reference to any such instrument; and (3) when the registration is denied. None of these situations is
present in this case.
There was no evidence that the 18 August 2006 Resolution of the Court of Appeals was already presented
to the Register of Deeds of Makati City for the re-annotation of the Notice of Lis Pendens. There is also no
showing that the Register of Deeds denied the re-annotation.
G.R. No. 17611656
Unsatisfied with the other Resolution dated 18 August 2006 of the Court of Appeals denying their Motion to
Dismiss Appeal, petitioners moved for its reconsideration, but it was denied by the appellate court in a
Resolution57 dated 9 November 2006. In a separate Resolution58 also dated 9 November 2006, the Court of
Appeals ordered the Register of Deeds of Makati City to submit the original copies of the Minutes of the
Meeting of the Board of Directors of ODC dated 7 May 1988, together with the Deed of Assignment dated
10 May 1988 entered into by and between Tomas Q. Soriano and ODC involving the subject properties, so
that they could be referred to the NBI for comparative analysis of Tomas Q. Sorianos signatures.
Following the foregoing development, petitioners filed before this Court another Petition for Certiorari under
Rule 65 of the 1997 Revised Rules of Civil Procedure on 29 December 2006, docketed as G.R. No.
176116.
Petitioners assert that the Court of Appeals acted with grave abuse of discretion amounting to lack or
excess of jurisdiction in refusing to dismiss private respondents appeal in its Resolutions dated 18 August
2006 and 9 November 2006, even though the appeal raised only questions of law. Petitioners argue that an
appeal raising pure questions of law must be filed with the Supreme Court via Petition for Review under
Rule 45 and not with the Court of Appeals.
Petitioners also contend that the Resolution dated 9 November 2006 of the Court of Appeals ordering the
submission of documents so that the NBI could perform a comparative analysis of Tomas Q. Sorianos
signatures, was apparently for the purpose of finding out whether forgery was committed in the Deed of
Assignment dated 10 May 1988. Petitioners assert that the appellate court has absolutely no original
jurisdiction to rule whether Tomas Q. Sorianos signature was forged in the Deed of Assignment in

question. There is no need for the Court of Appeals to have done an analytical comparison of Tomas Q.
Sorianos signatures considering that the RTC made no factual finding as regards the existence or nonexistence of forgery. Accordingly, the Court of Appeals has no power to inquire into the allegations of
forgery made in the private respondents Complaint, and for it to proceed to do so is grave abuse of
discretion tantamount to lack or excess of jurisdiction.
The Court resolves first the issue of whether the Court of Appeals committed grave abuse of discretion
amounting to lack or excess of jurisdiction in denying petitioners Motion to Dismiss Appeal.
In resolving such issue, it is necessary to determine only if private respondent's appeal to the Court of
Appeals involves purely questions of law, in which case, the proper mode of appeal would be a Petition for
Review on Certiorari to the Supreme Court under Rule 45 of the 1997 Revised Rules of Civil Procedure; or
questions of fact or mixed questions of fact and law, in which case, the proper mode would be by ordinary
appeal to the Court of Appeals under Rule 41.
A question of law exists when there is doubt or controversy as to what the law is on a certain state of facts,
and there is a question of fact when the doubt or difference arises as to the truth or falsehood of facts, or
when the query necessarily invites calibration of the whole evidence considering mainly the credibility of
witnesses, existence and relevancy of specific surrounding circumstances, their relation to one another and
to the whole, and probabilities of the situation. Ordinarily, the determination of whether an appeal involves
only questions of law or questions both of law and of fact is best left to the appellate court, and all doubts
as to the correctness of such conclusions will be resolved in favor of the Court of Appeals.59
Among the grounds raised by petitioners in seeking the dismissal by the RTC of private respondents
Complaint in Civil Case No. 03-954 are: (1) the Complaint stated no cause of action;60 (2) the claim or
demand set forth in the Complaint had been paid, waived, abandoned, or otherwise extinguished;61 and (3)
a condition precedent for filing the claim has not been complied with.62
Settled is the rule that in a Motion to Dismiss based on lack of cause of action, the issue is passed upon on
the basis of the allegations in the complaint, assuming them to be true. The court does not inquire into the
truth of the allegations and declare them to be false; otherwise, it would be a procedural error and a denial
of due process to the plaintiff. Only the statements in the complaint may be properly considered, and the
court cannot take cognizance of external facts or hold preliminary hearings to ascertain their existence. To
put it simply, the test for determining whether a complaint states or does not state a cause of action against
the defendants is whether or not, admitting hypothetically the truth of the allegations of fact made in the
complaint, the judge may validly grant the relief demanded in the complaint.63
In a Motion to Dismiss based on failure to state a cause of action, there cannot be any question of fact or
"doubt or difference as to the truth or falsehood of facts," simply because there are no findings of fact in the
first place. What the trial court merely does is to apply the law to the facts as alleged in the complaint,
assuming such allegations to be true. It follows then that any appeal therefrom could only raise questions of
law or "doubt or controversy as to what the law is on a certain state of facts." Therefore, a decision
dismissing a complaint based on failure to state a cause of action necessarily precludes a review of the
same decision on questions of fact. One is the legal and logical opposite of the other.64
Hence, private respondent did raise a question of law when he assigned as an error in his appeal to the
Court of Appeals the RTCs alleged error in dismissing his Complaint in Civil Case No. 03-954 for failure to
state a cause of action.
It must be remembered, however, that the basis of the RTC Order on 17 January 2005 dismissing private
respondents Complaint was not only its failure to state a cause of action, but also the fact that the claim or
demand set forth therein had been paid, waived, abandoned, or otherwise extinguished, and that the
condition precedent for filing a claim had not been complied with.
According to the RTC, the Complaint was dismissible on the ground that the claim or demand set forth
therein had been paid, waived, abandoned, or otherwise extinguished. Private respondent, in accepting a
certain parcel of land as his share in the estate of his late father Tomas Q. Soriano, was now deemed to
have been paid or compensated because his share in the estate of the deceased had been delivered to
him. In arriving at such a finding, the RTC necessarily made a preliminary determination of the facts in
order to verify that, indeed, private respondents claim or demand had been paid. When the private
respondent assigned as error in his appeal such finding of the RTC, he raised not only a question of law,

but also a question of fact.

The Court agrees in the following observation and pronouncement made by the Court of Appeals:
The lower court evaluated the documents [herein private respondent] Hilario submitted to prove his claim of
forgery. The lower court practically made a finding of fact that the signature of Tomas Q. Soriano in the
[D]eed of [A]ssignment is a forgery when the court stated that "the signatures in the [D]eed of [A]ssignment
and in the [S]econd [A]mendment of [C]redit [A]greement are the same." Whether the signature of Tomas
Q. Soriano was a forgery or not should have been determined during a trial, and not merely in the
resolution of a [M]otion to [D]ismiss.
[Private respondent] Hilario likewise raised the issue of whether or not there was payment or estoppel as
claimed by the [herein peititoners]. At first glance, it could be surmised that the issue of estoppel is a
question of law. However, in this case, there is a question of fact involved.
[Private respondent] Hilario comments that there is precisely a need to factually ascertain whether there
has been full payment or award of his legitime, as a compulsory heir of Tomas Q. Soriano, before the court
can conclude that [private respondent] Hilario is estopped from questioning the [D]eed of [A]ssignment.
xxxx
As [private respondent] Hilario raised questions of fact as well as questions of law in his appeal, the ground
for dismissal relied upon by the [petitioners] is not applicable in his case.65
The rule is that the determination of whether an appeal involves only questions of law or questions of both
law and fact is best left to the appellate court, and all doubts as to the correctness of such conclusions will
be resolved in favor of the Court of Appeals.66
Finally, we do not perceive any abusive exercise of power in the Resolution dated 9 November 2006 of the
Court of Appeals requiring the submission of the original copies of the documents involved in Civil Case
No. 03-954 to enable the NBI to perform a comparative analysis of Tomas Q. Sorianos signatures therein.
It must be stressed that in its 17 January 2005 Order, the trial court expressed a finding that "in the
beholder of untrained eyes, the signatures in the Deed of Assignment and in the Second Amendment of
Credit Agreement are the same."67 Considering that the trial court made a finding of fact as regards the
issue of forgery and such issue was properly raised in the private respondents appeal with the appellate
court, it certainly behooves the appellate court to review the said findings. Accordingly, as the Court of
Appeals has the power to inquire into the allegations of forgery made in the private respondents Complaint,
it can validly require the submission of the original copies of the documents involved in Civil Case No. 03954 to enable the NBI to perform a comparative analysis of Tomas Q. Sorianos signatures therein.
WHEREFORE, premises considered, these consolidated Petitions for Certiorari are hereby DISMISSED.
SO ORDERED.

FIRST DIVISION
G.R. no. 169970

January 20, 2009

PROTACIO VICENTE AND DOMINGA VICENTE, represented by Rondolf Vicente, Petitioners,

vs.
DELIA SOLEDAD AVERA and RONBERTO VALINO, Sheriff IV, Regional Trial Court, Branch 70,
Pasig City, Respondents.
DECISION

PUNO, C.J.:
This Petition for Review on Certiorari seeks to set aside the Decision1 and Resolution2 of the Court of
Appeals (CA), dated June 16, 2005 and October 4, 2005 respectively, in CA-G.R. CV No. 79327, which
reversed the Decision3 of the Regional Trial Court (RTC), Branch 208, Mandaluyong City, dated March 30,
2003.
Jovencio Rebuquiao was the registered owner of the property in dispute, then covered by Transfer
Certificate of Title (TCT) No. 34351.4 On October 1, 1987, Rebuquiao executed a Deed of Absolute Sale in
favor of petitioners, spouses Protacio Vicente and Dominga Vicente, over the property in dispute.5
Respondent Delia Soledad Avera alleges that on October 9, 1987, Jose Rebuquiao, pursuant to a Special
Power of Attorney granted to him by Jovencio Rebuquiao, executed a Deed of Absolute Sale with
Assumption of Mortgage in favor of Roberto Domingo, Averas spouse at the time, and herself.6
On May 29, 1991, Avera filed a Petition for Declaration of Nullity of Marriage before the RTC, Branch 70,
Pasig City, entitled "Delia Soledad Domingo, etc. v. Roberto Domingo" and docketed as JDRC Case No.
1989-J (JDRC case).7 In this case, Avera asserted exclusive ownership over the property in dispute.8 On
January 23, 1992, a notice of lis pendens was inscribed on TCT No. 34351, pertaining to the JDRC case
pending at the time.9
Since 1997, petitioners possessed the property in dispute.10 On July 22, 1998, TCT No. 34351 was
cancelled, and in lieu thereof, the Registry of Deeds issued petitioners TCT No. 14216 for the property in
dispute, on the basis of the deed of sale executed on October 1, 1987.11 The notice of lis pendens was
carried over to TCT No. 14216.12
On November 28, 1994, the RTC, Branch 70, Pasig City, rendered a Decision in the JDRC case, declaring
the marriage of Avera and Domingo void and ordering the property acquired during their cohabitation to be
put in the custody of Avera, including the property in dispute.13 After the decision in the JDRC case became
final and executory, the RTC, Branch 70, Pasig City, issued a Writ of Execution.14 On June 13, 2001, the
same trial court issued an Alias Writ of Execution, which reads:
Movant declared in her motion that the said property is now registered in the name of another person,
namely, Protacio Vicente, under TCT No. 14216 of the Register of Deeds of Mandaluyong City. It
appearing, however, that the transfer was made notwithstanding the annotation thereon of the notice of lis
pendens that the same property is the subject of the instant case, it can still be the subject of a writ of
execution to satisfy the judgment in favor of herein petitioner.
WHEREFORE, let an alias writ of execution be issued over Transfer Certificate of Title No. 34351, now
covered by TCT No. 14216 of the Register of Deeds of Mandaluyong City.1avvphil.zw+
SO ORDERED.15
Pursuant to the Alias Writ of Execution, respondent Ronberto Valino, in his capacity as Sheriff IV of the
RTC, Branch 70, Pasig City, served a Notice to Vacate dated August 15, 2001, on petitioners.16 On August
17, 2001, petitioners filed an Affidavit of Third Party Claim before the RTC, Branch 70, Pasig City.17
On August 22, 2001, petitioners filed a Complaint for Injunction with Prayer for a Temporary Restraining
Order (TRO) before the RTC, Branch 208, Mandaluyong City, to enjoin Sheriff Valino from implementing
the alias writ of execution.18 On September 4, 2001, the trial court issued a TRO19 and, on May 29, 2002, a
Writ of Preliminary Injunction, enjoining respondents from enforcing the notice to vacate.20 On March 30,
2003, it rendered a decision, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered making the writ of preliminary injunction PERMANENT.
Defendants counterclaims are hereby dismissed for lack of merit.
SO ORDERED.21
It held that petitioners were entitled to permanent injunction considering the following: (1) it is undisputed
that petitioners are the registered owners of the subject property, which certificate of title confers upon them
conclusive ownership of the property; and (2) the writ of execution issued in the JDRC case could only be

issued against a party to the action, and thus not to the petitioners.22
On appeal, the CA reversed and set aside the decision of the RTC, Branch 208, Mandaluyong City.23 The
CA held that petitioners are bound by the outcome of the JDRC case, because the annotation of the notice
of lis pendens (January 23, 1992) was ahead of petitioners registration of the deed of sale executed on
October 1, 1987 (July 22, 1998).24 Petitioners filed a Motion for Reconsideration, which the CA denied.25
Petitioners raise the following issues before this Court:
I
The CA erred in ordering the dismissal of the complaint for injunction despite the fact that the Petitioners
are the registered owners of the property and as such cannot be evicted out therefrom unless:
A. the sale from which they based their acquisition is declared void.
B. the title issued in their names based on the Deed of Sale is likewise declared void.
II
The CA erred in dismissing the complaint because in so doing, it made an implied recognition that a real
property titled under the torrens system may be attacked collaterally in contravention of law and established
jurisprudence[.]
III
The CA erred in concluding that the Petitioners are bound by the lis pendens it being clear that the property
was acquired long before the lis pendens was annotated. Petitioners (sic) became owners of the property
on October 1, 1987 and not on July 20, 1998 when their ownership was merely confirmed by the title issued
by the Office of the Register of Deeds.
Petitioners maintain that as the registered owners and actual possessors of the property in dispute, they
are entitled to a writ of injunction that will prevent the implementation of the writ of execution corresponding
to the JDRC case.
Respondents assert that petitioners are not entitled to the writ of injunction, because the petitioners are
subject to the outcome of the JDRC case and thus the implementation of the writ of execution due to the
notice of lis pendens annotated on their TCT. They further allege: (1) that there was no sale by Rebuquiao
in favor of petitioners on October 1, 1987; and (2) if there was a sale, the same happened in 1997, the year
petitioners registered the deed of sale executed in their favor.26
The core issue in the case at bar is whether injunction lies in favor of the petitioners to prevent the
respondents from interfering in the exercise of their rights over the property in dispute.
We find merit in the petition.
Injunction, as a preservative remedy, aims to protect substantive rights and interests.27 To be entitled to a
writ of injunction, the complainant must establish the following requisites: (1) there must be a right in esse
or the existence of a right to be protected; and (2) the act against which injunction is to be directed is a
violation of such right.28 The grant of the writ is conditioned on the existence of the complainants clear legal
right, which means one clearly founded in or granted by law or is "enforceable as a matter of law."29
As the registered owners and actual possessors of the property in question, petitioners have a clear legal
right to the property in dispute. Section 51 of Presidential Decree (P.D.) No. 1529 provides that registration
is the operative act that conveys or affects registered land as against third persons.30 Thus, a TCT is the
best proof of ownership of land.31 In the case at bar, it is undisputed that petitioners are the registered
owners and actual possessors of the subject property. Moreover, as the registered owners, petitioners have
the right to the possession of the property, which is one of the attributes of ownership.32
It was erroneous for respondents to assail the deed of sale executed on October 1, 1987 in favor of
petitioners, because this constitutes a collateral attack on petitioners TCT. Section 48 of P.D. No. 1529

prohibits a collateral attack on a Torrens title.33 This Court has held that a petition which, in effect,
questioned the validity of a deed of sale for registered land constitutes a collateral attack on a certificate of
title.34 In the case at bar, respondents allegation, that the deed of sale executed on October 1, 1987 in
favor of petitioners does not exist, clearly constitutes a collateral attack on a certificate of title. The
allegation of the inexistence of the deed of sale in effect attacks the validity of the TCT issued in the
petitioners names.
Petitioners title to the property in dispute is not subject to the outcome of the litigation covered by the
notice of lis pendens annotated on January 23, 1992. Section 24, Rule 14 of the 1964 Rules of Civil
Procedure provides that a purchaser of the property affected by the notice of lis pendens is deemed to
have constructive notice of the pendency of the action only from the time of filing such notice.35 Section 14,
Rule 13 of the 1997
Rules of Civil Procedure reiterates this rule.36 Thus, a notice of lis pendens affects a transferee pendente
lite, who by virtue of the notice, is bound by any judgment, which may be rendered for or against the
transferor, and his title is subject to the results of the pending litigation.37
A notice of lis pendens neither affects the merits of a case nor creates a right or a lien.38 It serves to protect
the real rights of the registrant while the case involving such rights is pending resolution.39 While the notice
of lis pendens remains on a certificate of title, the registrant could rest secure that he would not lose the
property or any part of it during the litigation.40 Once a notice of lis pendens has been duly registered, any
subsequent transaction affecting the land involved would have to be subject to the outcome of the litigation.
For this reason, the Court has pronounced that a "purchaser who buys registered land with full notice of the
fact that it is in litigation between the vendor and a third party stands in the shoes of his vendor and his title
is subject to the incidents and result of the pending litigation."41
In the case at bar, the notice of lis pendens does not affect petitioners title to the property in dispute. A
notice of lis pendens concerns litigation between a transferor and a third party, where the transferee who
acquires land with a notice of lis pendens annotated on the corresponding certificate of title stands in the
shoes of his predecessor and in which case the transferees title is subject to the results of the pending
litigation. The notice of lis pendens does not concern litigation involving Rebuquiao, who transferred his title
to the property in dispute to petitioners, and his title. The notice of lis pendens pertains to the JDRC case,
an action for nullity of the marriage between Avera and Domingo. Since Rebuquiaos title to the property in
dispute is not subject to the results of the JDRC case, petitioners title to the same property is also not
subject to the results of the JDRC case.
To determine whether the second requisite for granting a writ of injunction exists, that the act against which
injunction is to be directed is a violation of the complainants right, we must examine the implications
regarding the implementation of the writ of execution over TCT No. 14216. Pursuant to this writ of
execution, Sheriff Valino served petitioners with a notice to vacate.
If allowed to be carried out, the act against which the injunction is directed, the implementation of the writ of
execution, would violate petitioners rights as the registered owners and actual possessors of the property
in dispute. The registered owner has the right to possess and enjoy his property, without any limitations
other than those imposed by law.42 The implementation of the writ of execution would unduly deprive
petitioners, as the registered owners, of their right to possess the subject property, which is one of the
attributes of ownership.43
We must stress that until petitioners title is annulled in a proper proceeding, Avera has no enforceable right
over the property in dispute. At this point, petitioners possession of the subject property must be respected.
Since Avera failed to prove her indubitable right over the subject property, we rule that petitioners possess
a clear and unmistakable right over the property in dispute that requires the issuance of a writ of injunction
to prevent any damage to their interests as registered owners.
IN VIEW WHEREOF, the petition is GRANTED. The Decision and Resolution of the Court of Appeals in
CA-G.R. CV No. 79327, dated June 16, 2005 and October 4, 2005 respectively, are REVERSED and SET
ASIDE.
SO ORDERED.

THIRD DIVISION
G.R. No. 166216

March 14, 2012

ROGELIO ABERCA, RODOLFO BENOSA, NESTOR BODINO, NOEL ETABAG, DANILO DELA
FUENTE, BELEN DIAZ-FLORES, MANUEL MARIO GUZMAN, ALAN JASMINEZ, EDWIN LOPEZ,
ALFREDO MANSOS, ALEX MARCELINO, ELIZABETH PROTACIO-MARCELINO, JOSEPH OLAYER,
CARLOS PALMA, MARCO PALO, ROLANDO SALUTIN BENJAMIN SEGUNDO, ARTURO TABARA,
EDWIN TULALIAN, and REBECCA TULALIAN, Petitioners,
vs.
MAJ. GEN. FABIAN VER, COL. FIDEL SINGSON, COL. GERARDO B. LANTORIA, COL. ROLANDO
ABADILLA, COL. GALILEO KINTANAR, LT. COL. PANFILO M. LACSON, MAJ. RODOLFO
AGUINALDO, CAPT. DANILO PIZARRO, 1LT. PEDRO TANGO, 1LT. ROMEO RICARDO, 1LT. RAUL
BACALSO, M/SGT. BIENVENIDO BALABA and "JOHN DOES," Respondents.
DECISION
MENDOZA, J.:
Assailed in this petition is the July 31, 2003 Decision1 of the Court of Appeals (CA) in CA-G.R. CV No.
43763 and its November 26, 2004 Resolution2 reversing and setting aside the February 19, 1993 Decision3
of the Regional Trial Court, Branch 107, Quezon City (RTC), in Civil Case No. 37487 entitled "Rogelio
Aberca, et al. v. Maj. Gen. Fabian Ver, et al." for sum of money and damages.
The Facts
The factual and procedural antecedents were succinctly recited by the CA as follows:
On 25 January 1983, several suspected subversives who were arrested and detained by the military filed a
complaint for damages with the Regional Trial Court of Quezon City against Gen. Fabian Ver, then AFP
Chief of Staff, and the following subordinate officers: Col. Fidel Singson, Col. Gerardo Lantoria, Col.
Rolando Abadilla, Col. Guillermo Kintanar, Lt. Col. Panfilo Lacson, Maj. Rodolfo Aguinaldo, Capt. Danilo
Pizarro, 1Lt. Pedro Tango, 1Lt. Romeo Ricardo, 1Lt. Raul Bacalso, M/Sgt. Bienvenido Balaba and "John
Does." The case was docketed as Civil Case No. 37487 and assigned to Branch 95.
In their complaint, the plaintiff-appellees alleged that they were arrested and detained by Task Force
Makabansa, a composite group of various intelligence units of the AFP, on the strength of defective search
warrants; that while under detention and investigation, they were subjected to physical and psychological
harm, torture and other brutalities to extort from them confessions and other information that would
incriminate them; and that by reason thereof, they suffered actual and moral damages.
Defendants-appellants, through their counsel, the then Solicitor General Estelito Mendoza, filed a motion to
dismiss on the following grounds: (1) since the privilege of the writ of habeas corpus was then suspended,
the trial court cannot inquire into the circumstances surrounding plaintiffs-appellees arrests; (2) the
defendants-appellants are immune from liability for the reason that they were then performing their official
duties; and (3) the complaint states no cause of action.
In an order dated November 8, 1983, the trial court granted defendants-appellants motion to dismiss and
ordered the case dismissed.
Plaintiffs-appellees filed a motion to reconsider and set aside the order of dismissal. In an order dated May
11, 1984, the trial court declared the order of November 8, 1983 final.
Plaintiffs-appellees again filed a motion for reconsideration of the order dated May 11, 1984. In an order
dated September 21, 1984, the trial court denied the motion for reconsideration.
On March 15, 1985, plaintiffs-appellees went to the Supreme Court on a petition for review on certiorari,

seeking to annul and set aside the orders of the trial court dated November 8, 1983, May 11, 1984 and
September 21, 1984. The case was docketed as G.R. No. 69866.
While the case was pending in the Supreme Court, the so-called EDSA revolution took place. As a result,
the defendants-appellants lost their official positions and were no longer in their respective office addresses
as appearing in the record. Also, in the meantime, the case was re-raffled to Branch 107.
On April 15, 1988, the Supreme Court rendered a decision annulling and setting aside the assailed orders
and remanded the case to the trial court for further proceedings.
However, trial could not proceed immediately because on June 11, 1988, the record of the case was
destroyed when fire razed the City Hall of Quezon City. It was only on October 9, 1989 when plaintiffsappellees sought a reconstitution of the record of the case. The record shows that the petition for
reconstitution was set for hearing on October 27, 1989. However, there is nothing in the record to show that
defendants-appellants or their counsel were notified. For lack of an opposition, the petition for reconstitution
was granted in an order dated March 12, 1990.
On August 15, 1990, plaintiffs-appellees filed a motion praying that defendants-appellants be required to
file their answer. However, the record as reconstituted did not show who are the lawyers of the defendantsappellants considering that Estelito Mendoza, who had represented them in his capacity as Solicitor
General, was no longer holding that position. Furthermore, defendants-appellants were also no longer
occupying the positions they held at the time the complaint was filed. Thus, in an order dated August 17,
1990, plaintiffs-appellees were directed to report to the trial court the addresses and whereabouts of
defendants-appellants so that they could be properly notified.
Instead of complying with the order of August 17, 1990, plaintiffs-appellees filed a motion to declare
defendants-appellants in default. The trial court deferred resolution of this motion and instead, it issued an
order on September 10, 1990 directing that a copy of the order dated August 17, 1990 be furnished to new
Solicitor General Francisco Chavez to enable him to take action pursuant to Section 18, Rule 3 of the Rules
of Court, and to former Solicitor General Estelito Mendoza to enable him to give notice as to whether he
[would] continue to represent the defendants-appellants in his private capacity. As it said in its order, the
trial court took this action "in view of the change in government and corresponding change in the addresses
and circumstances of the defendants-appellants who may not even be aware of the decision of the
Supreme Court in case G.R. No. L-69866 and of the reconstitution of records in this case xxx."
On October 1, 1990, former Solicitor General Mendoza filed a manifestation informing the trial court that his
appearance as defendants-appellants counsel terminated when he ceased to be Solicitor General and that
he was not representing them in his private capacity. On his part, Solicitor General Chavez finally filed on
December 11, 1990 a notice of withdrawal of appearance, citing Urbano v. Go, where the Supreme Court
said that "the Office of the Solicitor General (OSG) is not authorized to represent a public official at any
stage of a criminal case or in a civil suit for damages arising from a felony." The record does not show that
defendants-appellants were furnished a copy of this notice of withdrawal or that they gave their conformity
thereto.
In an order dated December 27, 1990, the trial court denied plaintiffs-appellees motion to declare
defendants-appellants in default, emphatically pointing out that defendants-appellants were not duly notified
of the decision of the Supreme Court. In the same order, the trial court directed plaintiffs-appellees to
comply with the order of August 17, 1990 within ten (10) days from notice, with a warning that the case
[would] be archived and eventually dismissed if plaintiffs-appellees failed to furnish to the court the
addresses of defendants-appellants. Plaintiffs-appellees moved to reconsider the order dated December
27, 1990 but in an order dated February 1, 1991, the trial court denied the motion, stating that "without
actual notice of the judgment of the Supreme Court xxx the defendants-appellants herein would not be
aware that they should file a responsive pleading" and that, therefore, "to consider the defendantsappellants in default would be tantamount to lack of due process xxx."
For failure of the plaintiffs-appellees to comply with the orders dated August 17, 1990 and December 27,
1990, the trial court dismissed the case without prejudice in its order dated March 7, 1991. Subsequently,
however, in an order dated June 4, 1991, the trial court set aside the order of dismissal and reinstated the
case. It also approved plaintiffs-appellees request to serve the notice to file answer or responsive pleading
by publication.

In a compliance dated September 12, 1991, plaintiffs-appellees informed the trial court that the following
notice was published in the Tagalog newspaper BALITA in its issues of August 29, 1991 and September 5,
1991:
xxxx
No answer was filed by defendants-appellants within the period stated in the notice. On motion of plaintiffsappellees, the trial court in its order dated December 5, 1991 declared defendants-appellants in default and
directed plaintiffs-appellees to present their evidence ex-parte.4
Ruling of the RTC
On February 19, 1993, the RTC handed down a decision in favor of the petitioners, the dispositive portion
of which reads:
WHEREFORE, judgment is hereby rendered, ordering the following defendants:
1) Maj. General Fabian Ver
2) Col. Fidel Singson
3) Col. Rolando Abadilla
4) Col. Gerardo Lantoria
5) Col. Galileo Kintanar
6) Lt. Col. Panfilo Lacson
7) Maj. Rodolfo Aguinaldo
8) 1Lt. Pedro Tango
9) M/Sgt. Bienvenido Balaba
to pay jointly and severally to EACH of the following plaintiffs:
a) Rodolfo Benosa
b) Manuel Mario Guzman
c) Joseph Olayer
d) Marco Palo
e) Rolando Salutin
the amounts of FIFTY THOUSAND PESOS (50,000.00) as temperate or moderate damages; ONE
HUNDRED FIFTY THOUSAND PESOS (150,000.00) as moral damages; and ONE HUNDRED FIFTY
THOUSAND PESOS (150,000.00) as exemplary damages. Likewise, they are ordered to pay jointly and
severally the sum of TWO HUNDRED THOUSAND PESOS to the plaintiffs counsel.
The claims of the rest of the plaintiffs are denied and thereby dismissed. Likewise, the case against the
following defendants: Capt. Danilo Pizarro, 1Lt. Romeo Ricardo and 1Lt. Raul Bacalso is DISMISSED, and
the said defendants are exonerated from any liability.5
Subsequently, respondents Col. Fidel Singson (Col. Singson), Lt. Col. Panfilo M. Lacson (Lt. Col. Lacson),
and Col. Rolando Abadilla (Col. Abadilla) filed their Omnibus Motion praying as follows: 1) that the order of
default dated December 5, 1991 be reversed and set aside; 2) that the decision dated February 19, 1993
be reversed and set aside; 3) that the entire proceedings be declared null and void; and 4) that they be
given fifteen (15) days from notice to file answer to the complaint and present their evidence. Col. Gerardo
B. Lantoria (Col. Lantoria) filed his own Motion for Reconsideration.

On his part, respondent Maj. Rodolfo Aguinaldo (Maj. Aguinaldo) failed to file a timely notice of appeal so
he filed a Petition for Relief from Judgment praying that the RTC set aside its decision and proceed to try
the case based on the following grounds: 1) the decision was rendered without the benefit of notice in gross
violation of his right to due process; 2) the reconstitution of the records of the case and further proceedings
taken thereon were effected through fraud; and 3) his failure to move for a new trial or to appeal was due to
mistake or excusable negligence.
The Omnibus Motion of Col. Singson, Lt. Col. Lacson and Col. Abadilla; the Motion for Reconsideration of
Col. Gerardo Lantoria; and the Petition for Relief from Judgment of Maj. Aguinaldo were denied by the
RTC.6 Aggrieved, the said respondents elevated their case to the CA.
Maj. Aguinaldo argued that he was deliberately deprived of the opportunity to be heard and put up his
defense, while Col. Singson, Lt. Col. Lacson and Col. Abadilla presented the following assignment of
errors:
I
THE TRIAL COURT ERRED IN ALLOWING THE OFFICE OF THE SOLICITOR GENERAL (OSG) TO
WITHDRAW AS COUNSEL WITHOUT THE REQUIRED NOTICE TO, AND/OR CONSENT/CONFORMITY
OF APPELLANTS.
II
THE TRIAL COURT ERRED IN NOT SETTING ASIDE THE ORDER OF DEFAULT AND/OR THE
JUDGMENT BY DEFAULT AND GRANTING NEW TRIAL.
III
THE TRIAL COURT ERRED IN HOLDING THAT THE OSGS MISTAKES AND NEGLIGENCE ARE
BINDING ON THE DEFENDANTS-APPELLANTS.
IV
THE TRIAL COURT ERRED IN HOLDING THE DEFENDANTS-APPELLANTS SINGSON, ABADILLA
AND LACSON LIABLE FOR THE ALLEGED DAMAGES SUSTAINED BY THE PLAINTIFFSAPPELLANTS (SIC).7
The Ruling of the CA
On July 31, 2003, the CA rendered a decision reversing and setting aside the RTC decision and ordering
the case remanded to the RTC for further proceedings. The dispositive portion of the CA decision reads as
follows:
WHEREFORE, premises considered, the appeal is hereby GRANTED. The assailed decision dated
February 19, 1993 is hereby REVERSED and SET ASIDE. Let the record be REMANDED to the trial court
for further proceedings in accordance with the foregoing disquisition.
SO ORDERED.8
The CA ruled, among others, that the RTC committed four (4) errors in declaring the respondents in default
and proceeding to hear the case. The RTC committed its first error when it abandoned the proper modes of
service of notices, orders, resolutions or judgments as the petitioners failed to comply with its order dated
August 17, 1990, directing them to report the addresses and whereabouts of the respondents so that they
could be properly notified.
The second error was the failure of the RTC to avail of substituted service after failing to effect personal
service or service by mail. It perpetrated its third error when it authorized service by publication after
dismissing the case for failure of the petitioners to furnish the current addresses of the respondents. The
CA reasoned out that there was nothing in the rules which would authorize publication of a notice of
hearing to file answer and for what was authorized to be published were summons and final orders and
judgments. The fourth error was committed when the respondents were declared in default because they

were not duly notified and, therefore, were denied due process.
The CA stated that since the RTC failed to notify the respondents of the proceedings undertaken, the latter
were denied the chance to actively participate therein. It explained as follows:
Instead of observing the above precepts by according defendants-appellants every opportunity to ventilate
their side of the controversy, the trial court failed not only to notify them of the proceedings undertaken
relative to the resolution of the case but the chance as well to actively participate therein. It bears stressing
that defendants-appellants were not informed of the reinstatement of the case against them when the High
Tribunal set aside the orders of the trial court dated May 11, 1984, September 21, 1984 and November 8,
1983 dismissing the complaint instituted by plaintiffs-appellees. Likewise, defendants-appellants were not
apprised of the reconstitution of the records of the case which were destroyed by the fire that razed the City
Hall of Quezon City. In the same manner, they were not notified of the withdrawal of the OSG as their
official counsel of record, much less was their consent thereto sought. Finally and most significantly,
defendants-appellants were precluded the chance to file their respective answer or responsive pleadings to
the complaint with the issuance of the order dated December 5, 1991 declaring them in default
notwithstanding the defective service by publication of the courts notice requiring them to file such answer
or responsive pleading.9
Not satisfied, the petitioners come to this Court praying for the reversal and setting aside of the CA decision
anchored on the following arguments:
I
IN REVERSING THE TRIAL COURTS RULINGS DECLARING DEFENDANTS IN DEFAULT AND
ALLOWING PLAINTIFFS TO PRESENT THEIR EVIDENCE EX-PARTE; AND IN NULLIFYING THE TRIAL
COURTS JUDGMENT BY DEFAULT, THE COURT A QUO ACTED CONTRARY TO LAW AND
JURISPRUDENCE AND SO FAR DEPARTED FROM THE USUAL COURSE OF JUDICIAL
PROCEEDINGS AS TO WARRANT THE EXERCISE BY THIS COURT OF ITS POWER OF
SUPERVISION.10
II
IN HOLDING THAT THE TRIAL COURT ERRED IN DENYING RESPONDENTS MOTION FOR NEW
TRIAL TO SET ASIDE THE JUDGMENT AND PETITION FOR RELIEF FROM JUDGMENT, THE COURT
A QUO ACTED CONTRARY TO LAW AND JURISPRUDENCE, AND SO FAR DEPARTED FROM THE
USUAL COURSE OF JUDICIAL PROCEEDINGS AS TO WARRANT THE EXERCISE BY THIS COURT
OF ITS POWER OF SUPERVISION.11
The Petitioners Position
The petitioners claim that the RTC did not err in declaring the respondents in default and in allowing them
to present evidence ex- parte; that the respondents were represented by the OSG from 1983 up to
December 11, 1990 when the latter withdrew its appearance from the case; that after the respondents had
appeared, thru the OSG, by filing a motion to dismiss, the petitioners were under no obligation to track
down the respondents addresses since the Rules of Court provide that once a litigant is represented by
counsel, all notices, motions and pleadings must be sent to him as counsel of record; that it is a matter of
record that the OSG was furnished copies of all court orders and the petitioners pleadings for the period it
remained as the respondents counsel of record or from 1983 until the OSG withdrew on December 11,
1990; that as counsel of record, the OSG was duty-bound to file the respondents answer to the complaint
within 15 days from notice that it was reinstated by this Court and the case was remanded to the RTC for
further proceedings; and that despite having received copies of this Courts decision in G.R. No. 69866 on
or about April 20, 1988 and despite having been duly notified of the finality of said decision by means of this
Courts Entry of Judgment, the OSG did not file any answer or seek an extension of time to do so.
The petitioners further argue that as early as May 1988, when this Courts decision became final and
executory and the respondents received notice thereof through their counsel of record, it was incumbent
upon them to have answered the complaint within the period provided by the Rules of Court; that the RTC
was not hasty in declaring the respondents in default for they were given several chances to file their
answers even after their period to do so had already lapsed; that it was the respondents failure to exercise
ordinary prudence in monitoring the progress of this case that placed the petitioners in a difficult situation;

that the respondents in this case cannot seize control of the proceedings or cause them to be suspended
indefinitely by the simple expedient of not filing their answers or by feigning ignorance of the status of the
proceedings; that the rule on service of summons by means of publication applies to service of summons
by publication, not to notices to file answer by publication; that while service of summons by publication
entails acquiring jurisdiction over the person of the defendant, it was already obtained over the respondents
in this case by their voluntary appearance through counsel and their act of filing a motion to dismiss on
substantive grounds; that substituted service was an exercise in futility because the respondents were no
longer holding the positions they were holding at the time the petition was filed and, therefore, could not be
reached at the addresses indicated on the complaint; that the only remaining option was to notify the
respondents by publication; that the RTC did not err in holding that the respondents failed to establish the
fraud, accident, mistake and/or excusable negligence that would warrant the grant of a new trial, or the
setting aside of the judgment and/or petition for relief from judgment; that the negligence of the OSG is
binding on the respondents in the same manner that its initial success in securing the dismissal of the case
was binding on them; and that it would be highly unfair to allow the respondents, who reaped the benefits of
the initial dismissal of the case and never complained then about the OSG, to suddenly complain that they
were not bound by their counsels handling or mishandling of the case.
The Respondents Position
The respondents counter that the CA did not commit a reversible error in reversing and setting aside the
default judgment rendered by the RTC; that the petitioners failed to address four (4) errors committed by
the RTC cited by the CA; that the respondents were deprived of the opportunity to file their answer or
responsive pleadings to the complaint when the RTC issued a default order against them after a defective
service of notice to file answer by publication; that the petitioners invocation of the jurisprudence that a
defaulting party has the burden of showing that he has a meritorious defense does not apply in this case;
and that what should apply is the settled rule that once a denial or deprivation of due process is
determined, the RTC is ousted of its jurisdiction to proceed and its judgment is null and void.
The Courts Ruling
The basic question is whether the constitutional right to procedural due process was properly observed or
was unacceptably violated in this case when the respondents were declared in default for failing to file their
answer within the prescribed period and when the petitioners were allowed to present their evidence exparte.
Section 1, Article III of the 1987 Constitution guarantees that:
No person shall be deprived of life, liberty, or property without due process of law nor shall any person be
denied the equal protection of the law.
Procedural due process is that which hears before it condemns, which proceeds upon inquiry and renders
judgment only after trial. It contemplates notice and opportunity to be heard before judgment is rendered
affecting one's person or property.12
Moreover, pursuant to the provisions of Section 5(5) of Article VIII of the 1987 Constitution,13 the Court
adopted and promulgated the following rules concerning, among others, the protection and enforcement of
constitutional rights, pleading, practice and procedure in all courts:
Rule 13
SEC. 5. Modes of service.Service of pleadings, motions, notices, orders, judgments and other papers
shall be made either personally or by mail.
SEC. 6. Personal service.Service of the papers may be made by delivering personally a copy to the party
or his counsel, or by leaving it in his office with his clerk or with a person having charge thereof. If no
person is found in his office, or his office is not known, or he has no office, then by leaving the copy,
between the hours of eight in the morning and six in the evening, at the partys or counsels residence, if
known, with a person of sufficient age and discretion then residing therein.
SEC. 7. Service by mail.Service by registered mail shall be made by depositing the copy in the office, in
a sealed envelope, plainly addressed to the party or his counsel at his office, if known, otherwise at his

residence, if known, with postage fully prepaid, and with instructions to the postmaster to return the mail to
the sender after ten (10) days if undelivered. If no registry service is available in the locality of either the
sender or the addressee, service may be done by ordinary mail.
SEC. 8. Substituted service.If service of pleadings, motions, notices, resolutions, orders and other papers
cannot be made under the two preceding sections, the office and place of residence of the party or his
counsel being unknown, service may be made by delivering the copy to the clerk of court, with proof of
failure of both personal service and service by mail. The service is complete at the time of such delivery.
The above rules, thus, prescribe the modes of service of pleadings, motions, notices, orders, judgments,
and other papers, namely: (1) personal service; (2) service by mail; and (3) substituted service, in case
service cannot be effected either personally or by mail.
The Rules of Court has been laid down to insure the orderly conduct of litigation and to protect the
substantive rights of all party litigants. It is for this reason that the basic rules on the modes of service
provided under Rule 13 of the Rules of Court have been made mandatory and, hence, should be strictly
followed. In Marcelino Domingo v. Court of Appeals, 14 the Court wrote:
Section 11, Rule 13 of the Rules of Court states:
SEC. 11. Priorities in modes of service and filing. Whenever practicable, the service and filing of
pleadings and other papers shall be done personally. Except with respect to papers emanating from the
court, a resort to other modes must be accompanied by a written explanation why the service or filing was
not done personally. A violation of this Rule may be cause to consider the paper as not filed.
Section 11 is mandatory. In Solar Team Entertainment, Inc. v. Judge Ricafort, the Court held that:
Pursuant x x x to Section 11 of Rule 13, service and filing of pleadings and other papers must, whenever
practicable, be done personally; and if made through other modes, the party concerned must provide a
written explanation as to why the service or filing was not done personally. x x x
Personal service and filing are preferred for obvious reasons. Plainly, such should expedite action or
resolution on a pleading, motion or other paper; and conversely, minimize, if not eliminate, delays likely to
be incurred if service or filing is done by mail, considering the inefficiency of postal service. Likewise,
personal service will do away with the practice of some lawyers who, wanting to appear clever, resort to the
following less than ethical practices: (1) serving or filing pleadings by mail to catch opposing counsel offguard, thus leaving the latter with little or no time to prepare, for instance, responsive pleadings or an
opposition; or (2) upon receiving notice from the post office that the registered parcel containing the
pleading of or other paper from the adverse party may be claimed, unduly procrastinating before claiming
the parcel, or, worse, not claiming it at all, thereby causing undue delay in the disposition of such pleading
or other papers.
If only to underscore the mandatory nature of this innovation to our set of adjective rules requiring personal
service whenever practicable, Section 11 of Rule 13 then gives the court the discretion to consider a
pleading or paper as not filed if the other modes of service or filing were resorted to and no written
explanation was made as to why personal service was not done in the first place. The exercise of discretion
must, necessarily, consider the practicability of personal service, for Section 11 itself begins with the clause
"whenever practicable."
We thus take this opportunity to clarify that under Section 11, Rule 13 of the 1997 Rules of Civil Procedure,
personal service and filing is the general rule, and resort to other modes of service and filing, the exception.
Henceforth, whenever personal service or filing is practicable, in light of the circumstances of time, place
and person, personal service or filing is mandatory. Only when personal service or filing is not practicable
may resort to other modes be had, which must then be accompanied by a written explanation as to why
personal service or filing was not practicable to begin with. In adjudging the plausibility of an explanation, a
court shall likewise consider the importance of the subject matter of the case or the issues involved therein,
and the prima facie merit of the pleading sought to be expunged for violation of Section 11. This Court
cannot rule otherwise, lest we allow circumvention of the innovation introduced by the 1997 Rules in order
to obviate delay in the administration of justice.
xxxx

x x x [F]or the guidance of the Bench and Bar, strictest compliance with Section 11 of Rule 13 is mandated.
[Emphasis supplied]
In the case at bench, the respondents were completely deprived of due process when they were declared
in default based on a defective mode of service service of notice to file answer by publication. The rules
on service of pleadings, motions, notices, orders, judgments, and other papers were not strictly followed in
declaring the respondents in default. The Court agrees with the CA that the RTC committed procedural
lapses in declaring the respondents in default and in allowing the petitioners to present evidence ex-parte.
A review of the records discloses that after the Court rendered its April 15, 1988 Decision in G.R. No.
69866, annulling the RTC orders dated November 8, 1983, May 11, 1984 and September 21, 1984 and
ordering the remand of the case to the RTC for further proceedings, the RTC issued an order15 dated
August 17, 1990 directing the petitioners to report the addresses and whereabouts of the respondents so
that they would be properly notified of the proceedings. This directive was issued by the RTC considering
that the respondents counsel of record, the OSG, could no longer represent them and because the
respondents were no longer holding official government positions because of a change in government
brought about by the 1986 EDSA Revolution. This order was likewise made in response to the motion16
filed by the petitioners praying that the respondents be required to file their answer.
Instead of complying with the RTCs directive to report the respondents addresses and whereabouts, the
petitioners filed a motion17 dated September 4, 1990 to declare the respondents in default. On December
27, 1990, the RTC denied the petitioners default motion because the respondents were not duly notified of
the April 15, 1988 Decision of this Court and the OSG no longer wanted to represent them. The RTC
likewise ordered the petitioners to comply with its August 17, 1990 Order, otherwise, the case would be
archived and eventually dismissed. On February 1, 1991, the RTC denied the petitioners motion for
reconsideration and on March 7, 1991, it issued an order dismissing the case without prejudice.
Surprisingly, on June 4, 1991, the RTC issued an order18 setting aside its March 7, 1991 Order and
reinstating the case. It directed the petitioners, among others, to cause the publication of a notice on the
respondents to file answer or responsive pleading. After the petitioners complied with the publication
requirements, the RTC issued the order dated December 5, 1991 declaring the respondents in default and
directing the petitioners to present evidence ex-parte.
As correctly observed by the CA, the RTCs August 17, 1990 Order was an attempt to serve a notice to file
answer on the respondents by personal service and/or by mail. These proper and preferred modes of
service, however, were never resorted to because the OSG abandoned them when the petitioners failed to
comply with the August 17, 1990 RTC order requiring them to report the addresses and whereabouts of the
respondents. Nevertheless, there was still another less preferred but proper mode of service available
substituted service - which is service made by delivering the copy to the clerk of court, with proof of failure
of both personal service and service by mail. Unfortunately, this substitute mode of service was not
resorted to by the RTC after it failed to effect personal service and service by mail. Instead, the RTC
authorized an unrecognized mode of service under the Rules, which was service of notice to file answer by
publication.
Considering the fact that the OSG could no longer represent the respondents, the RTC should have been
more patient in notifying the respondents through personal service and/or service by mail. It should not
have simply abandoned the preferred modes of service when the petitioners failed to comply with its
August 17, 1990 order with the correct addresses of the respondents. More so, it should not have skipped
the substituted service prescribed under the Rules and authorized a service of notice on the respondents to
file answer by publication.
In view of the peculiar circumstances surrounding the case, the RTC should have instead directed the
petitioners to exert diligent efforts to notify the respondents either personally or by registered mail. In case
the preferred modes were impractical, the Court should have required the petitioners to at least report in
writing why efforts exerted towards personal service or service by mail failed. In other words, a convincing
proof of an impossibility of personal service or service by mail to the respondents should have been shown
first. The RTC, thus, erred when it ruled that the publication of a notice to file answer to the respondents
substantially cured the procedural defect equivalent to lack of due process. The RTC cannot just abandon
the basic requirement of personal service and/or service by mail.
At any rate, the Court is of the view that personal service to the respondents was practicable under the

circumstances considering that they were well-known persons who used to occupy high government
positions.
To stress, the only modes of service of pleadings, motions, notices, orders, judgments and other papers
allowed by the rules are personal service, service by mail and substituted service if either personal service
or service by mail cannot be made, as stated in Sections 6, 7 and 8 of Rule 13 of the Rules of Court.
Nowhere under this rule is service of notice to file answer by publication is mentioned, much less
recognized.
Furthermore, the Court would like to point out that service by publication only applies to service of
summons stated under Rule 14 of the Rules of Court where the methods of service of summons in civil
cases are: (1) personal service;19 (2) substituted service;20 and (3) service by publication.21 Similarly,
service by publication can apply to judgments, final orders and resolutions as provided under Section 9,
Rule 13 of the Rules of Court, as follows:
SEC. 9. Service of judgments, final orders or resolutions. Judgments, final orders or resolutions shall be
served either personally or by registered mail. When a party summoned by publication has failed to appear
in the action, judgments, final orders or resolutions against him shall be served upon him also by
publication at the expense of the prevailing party. [Emphasis supplied]
As correctly ruled by the CA:
Its third error was when it authorized service by publication after initially dismissing the case for failure of
plaintiffs-appellees to furnish the current address of defendants-appellants. There is, however, nothing in
the Rules that authorizes publication of a notice of hearing to file answer. What is authorized to be
published are: (1) summons, and (2) final orders and judgments.
xxx

xxx

xxx

The above-quoted provision cannot be used to justify the trial courts action in authorizing service by
publication. Firstly, what was published was not a final order or judgment but a simple order or notice to file
answer. Secondly, even granting that the notice to file answer can be served by publication, it is explicit in
the Rule that publication is allowed only if the defendant-appellant was summoned by publication. The
record is clear that defendants-appellants were not summoned by publication.
On this point, the petitioners argue that the publication was a valid and justified procedure because
following the ruling of the RTC, it was "an extra step to safeguard the interest of the defendants done
pursuant to the inherent power of the courts to control its proceedings to make them comfortable to law and
justice." The petitioners further argue that "the defendants in a civil case cannot seize control of the
proceedings or cause them to be suspended indefinitely by the simple expedient of not filing their answers
or by feigning ignorance of the proceedings. All these could have been avoided had the defendants not
been so inexplicably complacent and utterly lacking in ordinary prudence."
The Court is not convinced.
As already discussed above, the basic rules on modes of service of pleadings, motions, notices, orders,
judgments, and other papers are mandatory in nature and, therefore, must be strictly observed. The Court
is not unaware of the inherent power of courts to control its proceedings. Nonetheless, the exercise of such
inherent power must not violate basic court procedures. More importantly, it must not disregard ones basic
constitutional right to procedural due process.
This was precisely the reason for the RTCs denial of the petitioners default motion in its August 17, 1990
Order, and for the eventual dismissal of the case in its December 27, 1990 Order.
It must be noted that as the RTC orders stated, the respondents were not notified of the April 15, 1988
Decision of this Court, which ordered the re-opening and remanding of this case to the RTC. They were
neither notified of the reconstitution proceedings that took place pertaining to the burned records of the
case. The RTC further stated that the respondents were no longer holding their official government
positions and that they were no longer represented by the OSG on account of the change in government. In
other words, the respondents had no counsel of record and no notice of subsequent proceedings. In short,
due process was absent.

Next, the court records got burned during the June 11, 1988 fire that hit the Quezon City Hall where the
records were kept. On March 12, 1990, the RTC granted the petitioners petition for reconstitution. Again,
the records do not show that the RTC initiated extra efforts to notify the respondents about the
reconstitution proceedings. The entire records of this case tend to show that the respondents were
completely out of the picture until after the promulgation of the RTC decision.
On countless occasions, the Court ruled that, generally, judgments by default are looked upon with disfavor
and are frowned upon as contrary to public policy. An example here would be the case of Regalado P.
Samartino v. Leonor B. Raon,22 where the Court stated:
The trial court should not have been too rash in declaring petitioner in default, considering it had actual
notice of valid reasons that prevented him from answering. Well-settled is the rule that courts should be
liberal in setting aside orders of default for default judgments are frowned upon, unless in cases where it
clearly appears that the reopening of the case is intended for delay. The issuance of orders of default
should be the exception rather than the rule, to be allowed only in clear cases of obstinate refusal by the
defendant to comply with the orders of the trial court.
Suits should as much as possible be decided on the merits and not on technicalities. In this regard, we
have often admonished courts to be liberal in setting aside orders of default as default judgments are
frowned upon and not looked upon with favor for they may amount to a positive and considerable injustice
to the defendant and the possibility of such serious consequences necessitates a careful examination of
the grounds upon which the defendant asks that it be set aside. Since rules of procedure are mere tools
designed to facilitate the attainment of justice, it is well recognized that this Court is empowered to suspend
its operation, or except a particular case from its operation, when the rigid application thereof tends to
frustrate rather than promote the ends of justice. We are not unmindful of the fact that during the pendency
of the instant petition, the trial court has rendered judgment against petitioners. However, being the court of
last resort, we deem it in the best interest that liberality and relaxation of the Rules be extended to
petitioners by setting aside the order of default issued by the trial court and the consequent default
judgment; otherwise, great injustice would result if petitioners are not afforded an opportunity to prove their
claims.1wphi1
Finally, the Court finds unacceptable the petitioners contention that 1) the respondents were well
represented by counsel from 1983 up to December 1990 and that the respondents were properly notified of
the entire proceedings through their counsel; 2) the respondents counsel was negligent for failing to file an
answer within the prescribed period; and 3) the negligence of the OSG binds the respondents.
The petitioners do not deny the fact that on May 15, 1985, they filed a petition for certiorari before this Court
questioning the RTC orders granting the respondents motion to dismiss and denying their motion for
reconsideration. They do not question the fact that while their petition was pending in this Court, the 1986
EDSA Revolution took place which resulted in the removal of the respondents from their respective high
government offices and the replacement of then Solicitor General Estelito Mendoza (Sol. Gen. Mendoza).
There is likewise no dispute that subsequently, on April 15, 1988, this Court rendered its decision annulling
the subject RTC orders and remanding the case to the RTC for further proceedings. The case was then reraffled to another branch.
Clearly from the above circumstances, there was no longer any lawyer-client relationship between the OSG
and the respondents at the time the decision of the Court dated April 15, 1988 was promulgated because,
admittedly, after the 1986 EDSA Revolution, the respondents were no longer occupying their respective
government positions and Sol. Gen. Mendoza, who represented them, was no longer the Solicitor General.
In fact, in compliance with the RTCs order dated September 10, 1990,23 former Solicitor General Mendoza
submitted a manifestation24 that his legal representation for the respondents was deemed terminated when
he ceased to be the Solicitor General and that he was not representing the respondents in his private
capacity. For his part, on December 11, 1990, the incumbent Solicitor General at that time, Solicitor
General Francisco Chavez (Sol. Gen. Chavez), filed a notice of withdrawal of appearance for the
respondents citing the case of Urbano v. Chavez,25 where the Court ruled that the OSG is not authorized to
represent a public official at any stage of a criminal case or in a civil suit for damages arising from a felony.
The records do not show any proof that the respondents were furnished a copy of this notice of withdrawal
or whether or not they gave their conformity thereto.
Contrary to the petitioners position, while it is true that Sol. Gen. Chavez filed a notice of withdrawal only

on December 11, 1990, the respondents were in effect no longer represented by counsel as early as April
15, 1988 when the Courts decision was rendered, or much earlier, right after the 1986 EDSA Revolution
due to the change in government. The Court cannot subscribe to the petitioners argument that there was
negligence or mistake on the part of the OSG considering that Sol. Gen. Mendoza ceased to hold office
due to the EDSA Revolution while Sol. Gen. Chavez withdrew his representation because of the prohibition
in Urbano v. Chavez. Definitely, Sol. Gen. Mendozas cessation from holding office and Sol. Gen. Chavezs
withdrawal of representation in the unique scenario of this case are not equivalent to professional
delinquency or ignorance, incompetency or inexperience or negligence and dereliction of duty. Hence,
there is no negligence of counsel in this case. After the 1986 EDSA Revolution, the respondents were
practically left without counsel.
As a final point, this Court commiserates with the petitioners plight and cry for justice. They should not be
denied redress of their grievances. The Court, however, finds Itself unable to grant their plea because the
fundamental law clearly provides that no person shall be deprived of life, liberty and property without due
process of law.
WHEREFORE, the petition is DENIED.
SO ORDERED.

FIRST DIVISION
G.R. No. 168362

October 12, 2006

FAR EASTERN UNIVERSITY - DR. NICANOR REYES MEDICAL FOUNDATION (FEU-NRMF) and LILIA
P. LUNA. M.D., petitioners,
vs.
FEU-NRMF EMPLOYEES ASSOCIATION-ALLIANCE OF FILIPINO WORKERS (FEU-NRMFEA-AFW),
union officers DANTE F. SUCGANG, VIRGILIO P. BLANCO, FERNANDO S.P. VILLAPANDO, LORNA
M. MELECIO, FLORENCIA O. REYES, MERCEDITA P. MENDOZA, LEONOR B. VIAJAR, union
members DORIS ABOLENCIA, SUSAN ADRIANO, AVELINO AGUILAR, REYNALDO AGUSTIN,
SERGIO ALINGOD, MARSHA EILEEN ALMAZAN, ELOISA ALONZO, LILIAN AMBITO, FERDINAND
ANGELES, PABLOITO ARGUIL, RAYMUNDO ATAYDE, RANULFO AUSTRIA, JOHNNY BALABBO,
DELIA BALINGIT, DAISY BANGUIS, CRISPIN BARANGAN, EVELYN BARCENAS, JONATHAN
BASILIO, ROMULO BLANCO, ALFREDO CABALLES, NOLAN FERNANDEZ, VICENTE FERRER,
ALLAN FLORES, MANUEL GALANG, ESTELA CABANA, WILFREDO CABANTOG, VIRGINIA
CABRERA, MEDI GRACE CACHO, CLARA CANDELARIA, NELIA CHIU, ANTONIA CHOZAS,
IGNACIO CHUA, RUTH CUARTERO, AMELITA DECICATORIA, VICTORINO DELOS SANTOS,
YOLANDA DEL ROSARIO, JOSE ANTHONY DEL ROSARIO, FE DIZON, RENATO DUAO, ANTONIO
DUARTE, GERTRUDES DUNGO, DEOGRACIAS ESPAO, GREGORIO ESPINOSA, ELEANOR M.
FAJARDO, EMILIA FAJARDO, EDUARDO FRAMIL, DITCHER GARCIA, HILDA GARLITOS, JUSTINA
GOOT, JOSEFINA GRIMALDO, GERARDO GUTIERREZ, PRECILA IMPERIAL, MELLYN INSERTO,
MICHELLE IRAELA, DIVINE GRACE JEREZO, RAMERO JUSPICIO, LORENA GRACE LAO, DEXTER
LA TORRE, RONALD LANUZA, OFELIO LAZARO, CARMELITA LIPANA, JESUS LIBERES, ZAIL
BENNET LIM, MERLIE LIWANAG, ROSENDO LOBERIANO, DELIO LOTERTE, MA. SHEILA LOTERTE,
FELIX LUBAO, DENNIS LUCE, ANASTACIO LUZON, ARACELI MAGLANTAY, NELIA MAGSINO, MA.
TERESA MALALUAN, REMUS MAPULA, MYRNA MARCENA, ROSEMARIE MANGONON, PANCHO
MANUCOM, GENARO MARASIGAN, MARIO MARCOS, WILDA MARTINEZ, DONALYN MENDOZA,
TERESITA MENDOZA, VIVIAN MENDOZA, FELIZA MERCADO, TOMAS MERCADO, ROSITA MESINA,
ADORA MEJICA, CRISANTO MONIS, HUBERTO NIEVA, JOHN NORCIO, HERMAN OBRERO, JR.,
CRISTINA ONG, FLORDELIZA ORBIEN, LUCILA PAGLINAWAN, ROMEO PAPIO, ROSARIO PACIAL,
ALFREDO PARREAS, CHRISTINE PEREZ, RODOLFO PEREZ, FRANCISCO PIDLAOAN, EDUARDO
PUSING, FELIMON QUITALEG, BERNADETH RADOC, HERMES RAQUEO, JASMIN RAZON, ELISA
REYES, AGNES RIEGO, GLENDA RIVERA, JONEL ROMERO, RODEL ROPEREZ, ELENITA RUAN,
MARISA RUIZ, MARIO SANTOS, ARSENIA SAOI, ROSIE SARAOSOS, DESIRE SARGADE, EDGAR
SIM, LOLITA SISON, GERTRUDES TALLADOR, ZENAIDA TAN, EVANGELINE TRINIDAD, VILMA
TULABOT, MARIE TULLA, MARY ANN VILLAFANIA, RODOLFO VILLEGAS, GLENDA VALLANO,

DELSA WARQUEZ, the ALLIANCE OF FILIPINO WORKERS (AFW), federation officers GREGORIO C.
DEL PRADO and JOSE UMALI, respondents.

DECISION

YNARES-SANTIAGO, J.:
Before Us is a Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court, as amended,
assailing the 22 March 2005 Decision1 of the Court of Appeals in CA-G.R. SP No. 86690 and its 22 June
2005 Resolution2 denying the Motion for Reconsideration of petitioner Far Eastern University - Dr. Nicanor
Reyes Medical Foundations (FEU-NRMF) Motion for Reconsideration. The challenged Decision disposed
thus:
WHEREFORE, finding grave abuse of discretion, committed by public respondent NLRC, the instant
petition is GRANTED. The assailed Resolution, dated 23 September 2002, and Order, dated 30 June 2004,
are hereby REVERSED and SET ASIDE in so far as the illegality of the strike and loss of employment
status of individual petitioners are concerned. All other respects are AFFIRMED. No costs at this instance.3
Petitioner FEU-NRMF is a medical institution duly organized and existing under the Philippine laws. On the
other hand, respondent union is a legitimate labor organization and is the duly recognized representative of
the rank and file employees of petitioner FEU-NRMF.
In 1994, petitioner FEU-NRMF and respondent union entered into a Collective Bargaining Agreement
(CBA) that will expire on 30 April 1996.
In view of the forthcoming expiry, respondent union, on 21 March 1996, sent a letter-proposal4 to petitioner
FEU-NRMF stating therein their economic and non-economic proposals for the negotiation of the new CBA.
On 8 May 1996, petitioner FEU-NRMF sent a letter-reply5 flatly rejecting respondent unions demands and
proposed to maintain the same provisions of the old CBA. Petitioner FEU-NRMF reasoned that due to
financial constraints, it cannot afford to accede to a number of their demands for educational and death
benefits, uniforms, longetivity pay, meal allowance and special pay, but nevertheless gave an assurance
that it will seriously consider their proposal on salary increase.
In an effort to arrive at a compromise, subsequent conciliation proceedings were conducted before the
National Conciliation and Mediation Board - National Capital Region (NCMB-NCR) but because of the
unyielding stance of both parties, the negotiation failed.
On 6 August 1996, respondent union filed a Notice of Strike before NCMB-NCR on the ground of
bargaining deadlock. A strike vote was conducted on 23 August 1996 and the result thereof was submitted
to NCMB-NCR on 26 August 1996. After the expiration of the thirty-day cooling off period and the sevenday strike ban, respondent union, on 6 September 1996, staged a strike.6
Before the strike was conducted, respondent union, on 4 September 1996, offered a skeletal force of
nursing and health personnel who will man the hospitals operation for the duration of the strike. For
reasons unknown to respondent union, however, petitioner FEU-NRMF failed or refused to accept the offer.
For its part, petitioner FEU-NRMF, on 29 August 1996, filed a Petition for the Assumption of Jurisdiction or
for Certification of Labor Dispute with the National Labor Relations Commission (NLRC), underscoring the
fact that it is a medical institution engaged in the business of providing health care for its patients.7
Acting on the petition, the Secretary of Labor, on 5 September 1996, granted the petition and thus issued
an Order8 assuming jurisdiction over the labor dispute, thereby prohibiting any strike or lockout whether
actual or impending, and enjoining the parties from committing any acts which may exacerbate the
situation.
On 6 September 1996, Francisco Escuadra, the NLRC process server, certified that, on 5 September 1996

at around 4:00 P.M., he attempted to serve a copy of the Assumption of Jurisdiction Order to the union
officers but since no one was around at the strike area, he just posted copies of the said Order at several
conspicuous places within the premises of the hospital.
Claiming that they had no knowledge that the Secretary of Labor already assumed jurisdiction over the
pending labor dispute as they were not able to receive a copy of the Assumption of Jurisdiction Order,
striking employees continued holding a strike until 12 September 1996.
On 12 September 1996, the Secretary of Labor issued another Order9 directing all the striking employees
to return to work and the petitioner FEU-NRMF to accept them under the same terms and conditions
prevailing before the strike. Accordingly, on 13 September 1996, a Return to Work Agreement was
executed by the disputing parties, whereby striking employees agreed to return to their work and the
petitioner FEU-NRMF undertook to accept them under status pro ante. On the same day, the striking
employees returned to their respective stations.
Subsequently, petitioner FEU-NRMF filed a case before the NLRC, contending that respondent union
staged the strike in defiance of the Assumption of Jurisdiction Order; hence, it was illegal. Further, the said
strike was conducted in a deleterious and prejudicial manner, endangering the lives of the patients confined
at the hospital. In its complaint docketed as NLRC-NCR No. 10-11-0733-96, petitioner FEU-NRMF
specifically alleged that the striking employees effectively barricaded the ingress and egress of the hospital,
thus, preventing trucks carrying the supplies of medicines and food for the patients from entering the
hospitals premises. In one instance, an ambulance carrying a patient in critical condition was likewise
prevented from passing through the blockade. Finally, respondent union also prevented patients from
seeking medical assistance by blocking their way into the hospital. In order to redress the wrongful and
illegal acts of the respondent union, petitioner FEU-NRMF prayed for the declaration that the strike is illegal
and, resultantly, for the dismissal of the striking employees and decertification of the respondent union, plus
damages.
In contrast, respondent union avers that petitioner FEU-NRMF refused to bargain collectively despite hefty
financial gains and, thus, guilty of surface bargaining. Before staging a strike, respondent union complied
with the procedural requirements by filing a notice of strike and strike vote with the NCMB-NCR. The thirtyday cooling off period and the seven-day strike ban was also fully observed. Respondent union also offered
a skeletal work force but it was refused by petitioner FEU-NRMF. The strike was conducted in a peaceful
and orderly manner where striking employees merely sat down outside the hospitals premises with their
placards airing their grievances. Petitioner FEU-NRMFs allegation of sabotage, therefore, was merely
concocted. Finally, respondent maintained that they did not defy any order of the Secretary of Labor
because neither its officers nor its members were able to receive a copy of the same.
On 27 May 1998, the Labor Arbiter rendered a Decision10 declaring the strike illegal and dismissing the
union officers for conducting the strike in defiance of the Assumption of Jurisdiction Order. The dispositive
portion of the decision reads:
WHEREFORE, a decision is hereby rendered cast in favor of complainants and against the respondents
declaring the strike conducted by the latter last September 5-14, [1996] illegal and the following individual
respondents officers of union employed by complainant hospital to have lost their employment status,
Dante F. Sugcang, Virgilio P. Blanco, Fernando S.P. Villapando, Lorna M. Melecio, Florencia O. Reyes,
Mercedita P. Mendoza and Leonor P. Vajar.
The prayer for decertification is hereby denied for lack of jurisdiction and the prayer for damages is likewise
denied for lack of sufficient evidence.
Aggrieved, the respondent union filed a Partial Appeal11 before the NLRC asserting that the Labor Arbiter
gravely abused its discretion in denying a formal trial and in holding that the Assumption of Jurisdiction
Order dated 5 September 1996 was properly served. In its Partial Appeal Memorandum12 filed on 29 July
1998, respondent union claimed that the Labor Arbiter erred in declaring the strike illegal and in adjudging
that the union officers have lost their employment status.
On 23 September 2002, the NLRC handed down a Resolution13 affirming in toto the Decision of the Labor
Arbiter dated 27 May 1998 and, thus, upheld the illegality of the strike and loss of employment status of the
union officers. The NLRC found that during the conciliation proceedings before the NCMB-NCR, the union
officers admitted that they were aware that the Secretary of Labor issued an Assumption of Jurisdiction

Order which enjoined the strike they were conducting. There was, therefore, an utter defiance of the said
Order, making the strike illegal. The union officers dismissal is thus warranted.
Undaunted, the respondent union filed a Motion for Reconsideration14 which was likewise denied by the
NLRC in its Resolution15 dated 30 June 2004, for failure to present positive averment that the Resolution16
dated 11 October 2002 contains palpable or patent errors as required by the NLRC Revised Rules of
Procedure.
Consequently, the respondent union brought a Petition for Certiorari under Rule 65 before the Court of
Appeals seeking to annul the NLRC Resolution dated 23 September 2002, affirming the Decision of the
Labor Arbiter dated 27 May 1998 and the Resolution dated 30 June 2004, denying its Motion for
Reconsideration. In its Petition17 docketed as CA-G.R. SP No. 86690, FEU-NRMF Employees AssociationAlliance of Filipino Workers (FEU-NRMFEA-AFW), Dante Sugcang, Virgilio Blanco, Norma Melencio and
Florencia Reyes v. National Labor Relations Commission, and Far Eastern University Dr. Nicanor Reyes
Medical Foundation (FEU-NRMF), respondent union alleged that the public respondents committed grave
abuse of discretion amounting to lack or excess of jurisdiction in rendering the aforesaid judgments which
are contrary to law and established jurisprudence.
On 22 March 2005, the Court of Appeals rendered a Decision granting the Petition and reversing the
assailed Resolution dated 23 September 2002, and Order dated 30 June 2004, as they were made with
grave abuse of discretion amounting to lack or excess of jurisdiction. The appellate court found that no
personal service was validly effected by the process server that could bind the striking employees.
Similarly ill-fated was petitioner FEU-NRMFs motion for reconsideration which was denied through the
Court of Appeals Resolution promulgated on 22 June 2005.18
Petitioners are now before this Court assailing the aforementioned decision and resolution of the Court of
Appeals on the ground that the appellate court erred in reversing both the decisions of the Labor Arbiter
and the NLRC.19
For our resolution are the following issues:
I.
WHETHER OR NOT SERVICE OF THE ASSUMPTION OF JURISDICTION ORDER WAS VALIDLY
EFFECTED.
II.
WHETHER OR NOT THE STRIKE CONDUCTED BY THE RESPONDENT UNION WAS ILLEGAL.
III.
WHETHER OR NOT THE DISMISSAL OF THE UNION OFFICERS WAS VALID.
The crucial question for the determination of this Court, however, is whether the service of the Assumption
of Jurisdiction Order was validly effected by the process server so as to bind the respondent union and hold
them liable for the acts committed subsequent to the issuance of the said Order.
The certification/proof of service of the process server, Francisco A. Escuadra, dated 6 September 1996,
reads:
CERTIFICATION/PROOF OF SERVICE
This is to certify that on September 5, 1996 at around 4:00 P.M., I attempted to serve a copy of the Order of
Assumption of Jurisdiction issued by the Secretary of Labor and Employment, to the officials of the FEUNRMF Employees Association-AFL.
Since none of the officials of the said union was available to receive a copy of the said Order, I posted
copies of the same at several conspicuous places within the premises of Far Eastern University Nicanor
Reyes Medical Foundation (FEU-NRMF).

The copies of the Order were posted on September 5, 1996 at around 4:30 PM.
Manila, Philippines, 6 September 1996.20
It can be inferred from the foregoing that the process server resorted to posting the Order when personal
service was rendered impossible since the striking employees were not present at the strike area. This
mode of service, however, is not sanctioned by either the NLRC Revised Rules of Procedure or the
Revised Rules of Court.
The pertinent provisions of the NLRC Revised Rules of Procedure21 read:
Section 6. Service of Notices and Resolutions.
(a) Notices or summons and copies of orders, shall be served on the parties to the case personally
by the Bailiff or duly authorized public officer within three (3) days from receipt thereof or by
registered mail; Provided that in special circumstances, service of summons may be effected in
accordance with the pertinent provisions of the Rules of Court; Provided further, that in cases of
decisions and final awards, copies thereof shall be served on both parties and their counsel or
representative by registered mail; Provided further, that in cases where a party to a case or his counsel
on record personally seeks service of the decision upon inquiry thereon, service to said party shall be
deemed effected upon actual receipt thereof; Provided finally, that where parties are so numerous, service
shall be made on counsel and upon such number of complainants, as may be practicable, which shall be
considered substantial compliance with Article 224(a) of the Labor Code, as amended. (Emphasis
supplied.)
An Order issued by the Secretary of Labor assuming jurisdiction over the labor dispute is not a final
judgment for it does not dispose of the labor dispute with finality. 22 Consequently, the rule on service of
summons and orders, and not the proviso on service of decisions and final awards, governs the service of
the Assumption of Jurisdiction Order.
Under the NLRC Revised Rules of Procedure, service of copies of orders should be made by the process
server either personally or through registered mail. However, due to the urgent nature of the Assumption of
Jurisdiction Order and the public policy underlying the injunction carried by the issuance of the said Order,
service of copies of the same should be made in the most expeditious and effective manner, without any
delay, ensuring its immediate receipt by the intended parties as may be warranted under the
circumstances. Accordingly, in this case, personal service is the proper mode of serving the
Assumption of Jurisdiction Order.
It is also provided under the same rules that in special circumstances, service of summons may be effected
in accordance with the pertinent provisions of the Rules of Court.23
Parenthetically, the manner upon which personal service may be made is prescribed by the following
provisions of the Revised Rules of Court:
Rule 13. Filing and Service of Pleadings, Judgments And Other Papers.
Section 6. Personal service. Service of the papers may be made by delivering personally a copy to the
party or his counsel, or by leaving it in his office with his clerk or with a person having charge thereof. if no
person is found in his office, or his office is not known, or he has no office, then by leaving a copy, between
the hours of eight in the morning and six in the evening, at the partys or counsels residence, if known, with
a person of sufficient age and discretion then residing therein.
Let it be recalled that the process server merely posted copies of the Assumption of Jurisdiction Order in
conspicuous places in the hospital. Such posting is not prescribed by the rules, nor is it even referred to
when the said rules enumerated the different modes of effecting substituted service, in case personal
service is impossible by the absence of the party concerned.
Clearly, personal service effectively ensures that the notice desired under the constitutional requirement of
due process is accomplished. If, however, efforts to find the party concerned personally would make
prompt service impossible, service may be completed by substituted service, that is, by leaving a copy,
between the hours of eight in the morning and six in the evening, at the partys or counsels residence, if

known, with a person of sufficient age and discretion then residing therein.
Substituted service derogates the regular method of personal service. It is therefore required that statutory
restrictions for effecting substituted service must be strictly, faithfully and fully observed. Failure to comply
with this rule renders absolutely void the substituted service along with the proceedings taken thereafter.24
The underlying principle of this rigid requirement is that the person, to whom the orders, notices or
summons are addressed, is made to answer for the consequences of the suit even though notice of such
action is made, not upon the party concerned, but upon another whom the law could only presume would
notify such party of the pending proceedings.25
Applying this principle in the case at bar, presumption of receipt of the copies of the Assumption of
Jurisdiction Order could not be lightly inferred from the circumstances considering the adverse effect in
case the parties failed to heed to the injunction directed by such Order. Worthy to note that in a number of
cases, we have ruled that defiance of the assumption and return-to-work orders of the Secretary of Labor
after he has assumed jurisdiction is a valid ground for the loss of employment status of any striking union
officer or member.26 Employment is a property right of which one cannot be deprived of without due
process.27 Due process here would demand that the respondent union be properly notified of the
Assumption of Jurisdiction Order of the Secretary of Labor enjoining the strike and requiring its members to
return to work. Thus, there must be a clear and unmistakable proof that the requirements prescribed by the
Rules in the manner of effecting personal or substituted service had been faithfully complied with. Merely
posting copies of the Assumption of Jurisdiction Order does not satisfy the rigid requirement for proper
service outlined by the above stated rules. Needless to say, the manner of service made by the process
server was invalid and irregular. Respondent union could not therefore be adjudged to have defied the said
Order since it was not properly apprised thereof. Accordingly, the strike conducted by the respondent union
was valid under the circumstances.
For a strike to be valid, the following requisites must concur: (1) the thirty-day notice or the fifteen-day
notice, in case of unfair labor practices; (2) the two-thirds (2/3) required vote to strike done by secret ballot;
and (3) the submission of the strike vote to the Department of Labor and Employment at least seven days
prior to the strike.28 In addition, in case of strikes in hospitals, clinics and medical institutions, it shall be the
duty of the striking employees to provide and maintain an effective and skeletal workforce of medical and
other health personnel in order to insure the proper and adequate protection of the life and health of its
patients.29 These procedural requirements, along with the mandatory cooling off and strike ban periods had
been fully observed by the respondent union.
It is true that the strike may still be declared invalid where the means employed are illegal even if the
procedural requisites before staging a strike were satisfied.30 However, in the absence of evidence to
support the allegations that the respondent union did not commit illegal acts during the strike, we are
constrained to dismiss the allegations and uphold the strike as a valid exercise of the workers
constitutional right to self-organization and collective bargaining.
The affidavits presented by the petitioner FEU-NRMF and relied upon by the Labor Arbiter and the NLRC,
in arriving at the conclusion that the respondent union committed illegal acts during the strike, could not be
given probative value by this Court as the adverse party was not given a chance to cross-examine the
affiants. In a catena of labor cases, this Court has consistently held that where the adverse party is
deprived of the opportunity to cross-examine the affiants, affidavits are generally rejected for being
hearsay, unless the affiants themselves are placed on the witness stand to testify thereon.31 Neither can
this Court rely on the photographs supporting these allegations without verifying its authenticity.
Verily, this Court is not bound to uphold the erroneous findings of the administrative bodies. While it is wellsettled that findings of facts of the Labor Arbiter, when affirmed by the NLRC, are entitled to great respect
and are generally binding on this Court, it is equally settled that this Court will not uphold erroneous
conclusions of the said bodies as when we find insufficient or insubstantial evidence on record to support
these factual findings. The same holds true when it is perceived that far too much is concluded, inferred or
deduced from the bare allegations or insufficient evidence appearing on the record.
Prescinding from the above, as the strike conducted by the respondent union is valid and legal, there is
therefore no cogent reason to dismiss the union officers.
WHEREFORE, premises considered, the instant Petition is DENIED. Costs against the petitioner.

SO ORDERED.

SECOND DIVISION
G.R. No. 203039

September 11, 2013

REPUBLIC OF THE PHILIPPINES, represented by the DEPARTMENT OF PUBLIC WORKS AND

HIGHWAYS (DPWH), Petitioner,
vs.
BANK OF THE PHILIPPINE ISLANDS (BPI), Respondent.
DECISION
CARPIO, J.:
The Case
Before the Court is a petition for review1 assailing the Decision2 dated 14 September 2011 and Resolution3
dated 06 August 2012 of the Court of Appeals in CA-G.R. CV No. 79843, affirming the Order4 dated 03
February 2003 of the Regional Trial Court of Las Pias City in Civil Case No. LP 98-0031.
The Antecedent Facts
On 12 February 1998, the Department of Public Works and Highways (DPWH) filed with the Regional Trial
Court, National Capital Region, Las Pias City, Branch 275 (trial court), a case for expropriation against
portions of the properties of Bank of the Philippine Islands (BPI) and of Bayani Villanueva (Villanueva)
situated in Pamplona, Las Pias City. DPWH needed 281 square meters of BPIs lot covered by Transfer
Certificate of Title (TCT) No. T-59156 and 177 square meters from Villanuevas lot covered by TCT No. T64556 for the construction of the Zapote-Alabang Fly-Over.5
Neither BPI nor Villanueva objected to the propriety of the expropriation;6 hence, the trial court constituted a
Board of Commissioners to determine the just compensation.7 In their Report dated 29 September 1998,8
the Board of Commissioners recommended the amount of P40,000.00 per square meter as the fair market
value. On 25 November 1998, the trial court in its Decision set the fair market value at P40,000.00 per
square meter:9
The property of BPI, which was affected, consists of 281 square meters and that of Defendant Villanueva
consists of 177 square meters. Hence the amount to be awarded to the defendants shall be computed as
follows:
BPI 281 sq. meters x P40,000.00 =
P11,240,000.00; and
Villanueva 177 sq. meters x P40,000.00 =
P7,080,000.00
Considering that the plaintiff has deposited the amount of P632,250.00 with respect to the property of BPI,
the latter should receive the amount of P10,607,750.00.
With respect to Defendant Villanueva, the plaintiff deposited the provisional amount of P2,655,000.00,
hence, the remaining amount to be paid is P4,425,000.00.
WHEREFORE, in view of the foregoing, judgment is hereby rendered ordering the plaintiff Republic of the

Philippines as represented by the Department of Public Works and Highways to pay defendant Bank of the
Philippine Islands the amount of TEN MILLION SIX HUNDRED SEVEN THOUSAND AND SEVEN
HUNDRED FIFTY PESOS(P10,607,750.00) and Defendant Bayani Villanueva the amount of FOUR
MILLION FOUR HUNDRED TWENTY FIVE THOUSAND(P4,425,000.00), as just compensation for their
properties which were expropriated.10
On 15 December 1998, the acting branch clerk of court issued a Certification11 stating that:
x x x the Decision in this case dated November 25, 1998 has become FINAL, EXECUTORY and
UNAPPEALABLE as of December 11, 1998 considering that the Office of the Solicitor General failed to file
any Notice of Appeal or Motion for Reconsideration despite receipt of a copy thereof on November 26,
1998.
This certification is being issued upon the request of Atty. Jansen Rodriguez for whatever legal purpose it
may serve.
Meanwhile, BPI filed on 16 December 1998 a Motion for Partial New Trial12 to determine the just
compensation of its building, which was not included in the Decision dated 25 November 1998 that fixed
the just compensation for the parcels of land. In the motion, BPI claimed that its motion was timely filed
since it received a copy of the Decision on 01December 1998.13 The trial court granted partial new trial in
an Order dated06 January 1999.
Due to the failure of counsel for petitioner, despite notice, to appear during the scheduled hearing for the
determination of the just compensation of the building, the trial court allowed BPI to present its evidence exparte.14 On 01 September 1999, the trial court admitted the exhibits presented by BPI.15 On the same day,
the trial court also appointed as commissioner the Officer-In-Charge of the trial court, Leticia B. Agbayani
(Agbayani), and ordered her to conduct an ocular inspection of the building.16 Agbayani reported the
following findings:
a) That the undersigned found out that a new building was constructed and a picture of said building is
hereto attached and made as an integral part hereof as Annex "A" and;
b) That the building was moved back when it was constructed to conform with the requirement of the
Building Code; and
c) Improvements were introduced around the building.17
In its Decision dated 10 September 1999,18 the trial court held that just compensation for the building was
due and ordered petitioner to pay BPI the amount of P2,633,000.00. The dispositive portion of the Decision
reads:
WHEREFORE, IN VIEW OF THE FOREGOING, judgment is hereby rendered ordering the plaintiff
Republic of the Philippines represented by the Department of Public Works and Highways to pay defendant
Bank of the Philippine Island (sic) the amount of TWOMILLION SIX HUNDRED THIRTY THREE
[THOUSAND] PESOS(PHP2,633,000.00).19
Petitioner moved for the reconsideration20 of the 10 September 1999Decision on the ground that the
proceeding fixing the just compensation of the building is null and void for not complying with the
mandatory procedure set forth in Sections 5 to 8 of Rule 67 of the Rules of Court.21
After due hearing, the trial court granted on 14 February 2000 petitioners motion for reconsideration and
ordered that the Decision dated10 September 1999 be set aside and vacated.22 From this order, BPI filed a
motion for reconsideration,23 on the ground that there was substantial compliance with the Rules. The trial
court denied BPIs motion for reconsideration.24
On 19 September 2000, the trial court appointed Atty. Edgar Allan C. Morante, the branch clerk of court, as
the chairman of the Board of Commissioners, and gave petitioner and BPI ten days to submit their
respective nominees and their oaths of office.25 On 28 September 2000, BPI nominated Roland Savellano
(Savellano), and submitted his oath of office.26
Instead of submitting its nominee, petitioner filed on 13 October 2000a Manifestation and Motion27 objecting

to the propriety of paying just compensation for BPIs building and praying that BPIs claim for additional
just compensation be denied. Petitioner claimed that the building was never taken by the government.28 In
support, petitioner attached a letter dated 12 September 2000 from the DPWH, addressed to the Solicitor
General. The letter states, in part:
x x x the original plan affecting the subject property was not implemented. The width of the sidewalk at the
premises under consideration was actually reduced from 2.50 m to 2.35 m x x x to avoid the costly
structure of that bank.29
In its opposition,30 BPI claimed that it was not aware that the original plan was not implemented. It received
no correspondence from the DPWH on the matter, except for the letter dated 12 August 1997 from DPWH
addressed to BPI, stating in part that:
We regret to inform you that adjustment of the RROW limit of our project along this section is not possible
as it will affect the effective width of the sidewalk designated at 2.50 m. wide.31 (Emphasis in the original)
BPI also argued that even "if a 3-meter setback is observed, only 75%of the old building could be utilized x
x x and cutting the support system of the building x x x would affect the buildings structural integrity."32
On 07 May 2001, the trial court denied33 petitioners motion dated 09October 2000, and ruled that the
demolition of the old building of BPI can be construed as a consequential damage suffered by BPI as a
result of the expropriation. Petitioner was thus ordered to submit its nominee to the Board of
Commissioners.
Petitioner nominated Romulo C. Gervacio (Gervacio), the Officer-In-Charge of the City Assessors Office in
Las Pias City. The Board thus constituted, the trial court ordered the Commissioners to submit their
recommendation.
Commissioner for BPI Savellano recommended the amount of P2,633,000.00, which was based on the
appraisal conducted by an independent professional business and property consultant.34 On the other
hand, Commissioner for petitioner Gervacio recommended the amount of P1,905,600.00, which was the
market value indicated on the tax declaration of said building. The Commissioners Report35 presented both
the recommendations of Savellano and Gervacio for the trial courts consideration.
The Trial Courts Ruling
The trial court issued the Order36 dated 03 February 2003, adopting the recommendation of Gervacio of
P1,905,600.00, thus:
The Court approves the Recommendation dated October 22, 2001of ONE MILLION NINE HUNDRED FIVE
THOUSAND SIXHUNDRED PESOS (P1,905,600.00) by Commissioner ROMULO C.GERVACIO as the
just compensation of the building of the Bank of the Philippine Islands (BPI) Zapote affected by the
construction of the Zapote-Alabang Fly-over, it appearing that such amount is the existing market value of
the property pursuant to the Declaration by BPI as the market value of the building affected by the project
as contained in Tax Declaration D-006-02044.
Let the same amount be paid by the Republic of the Philippines through the Department of Public Works
and Highways as the just compensation for the property.37
Petitioner filed an appeal with the Court of Appeals docketed as CA-G.R. CV No. 79843.38
The Court of Appeals Ruling
On 14 September 2011, the Court of Appeals dismissed the appeal and affirmed the order of the trial court.
The relevant portions of the decision state:
We cannot sustain plaintiff-appellants proposition that the decision dated November 25, 1998 has already
attained finality there being no appeal filed within the reglementary period as provided in Section 3, Rule41
of the 1997 Rules of Civil Procedure.
Pursuant to Section 1, Rule 37 of the Rules of Civil Procedure, the period within which an aggrieved party

may move the trial court to set aside the judgment or final order and file a motion for new trial is within the
period to file an appeal, which is fifteen (15) days from receipt of the judgment or final order. It is explicit
from the stated provision that the fifteen day period to file a motion for new trial will start to run from receipt
of judgment or final order. A judgment, final order or resolution shall be served upon a party either
personally or through registered mail. Moreover, Section 13 of Rule 13 of the Rules of Civil Procedure
specifically provides for the proof of service of judgments, final orders or resolution x x x.
xxxx
Guided by the foregoing provisions of law, the crucial fact in which the finality of the decision dated
November 25, 1998 with respect to defendant-appellee, depends in the determination of the date of its
receipt of the copy of the said decision in order to ascertain whether its motion for partial new trial was filed
within the 15-day period allowed by law.
In this case, records bear that a copy of the decision dated November 25, 1998, ordering the payment of
just compensation for the expropriated land was received in behalf of defendant Bayani Villanueva on the
same day of its promulgation. A copy of the said decision was also served upon plaintiff-appellant through
the OSG on November 26, 1998.However, there is no showing, that defendant-appellee through its counsel
received a copy of the trial courts decision on a definite date. No official return nor affidavit of the party
serving the decision was attached to there cords of the case. Neither was the presence of a registry receipt
issued by the mailing office nor a registry return card containing the date of receipt of the decision be found
among its records. Since there was no showing as to the exact date of receipt of defendant-appellee of the
said decision, the running of the period of 15 days within which to file a motion for new trial did not begin to
run. Therefore, the filing of defendant-appellee of a motion for partial new trial on December 16, 1998 was
never delayed but timely filed thus preventing the decision dated November 25, 1998from attaining finality
as against them. Moreover, We find the admission of defendant-appellee in its brief filed on June 2, 2005,
that it received a copy of the trial courts decision on December 1, 1998,sufficient to comply with the
requirement of a written admission of a party served with a judgment as provided in Sec. 13 of Rule 13, of
the Rules of Civil Procedure. It should also be noted that the certification issued by Edgar Allan C. Morante,
the acting clerk of court, as to the finality of judgment as of December 11, 1998 will not stand against
defendant-appellee because the 15-day period to file an appeal will only start to commence upon the
receipt of the decision which is on December 1,1998. Counting the 15-day period from the first of
December, the period within which to file an appeal will expire on December 16, 1998. Thus, the trial court
did not err in granting the motion for partial new trial of the defendant-appellee as the same was amply filed
with the reglementary period prescribed by law.
Having settled that the motion for partial new trial was timely filed, We now rule that the trial court did not
lose its jurisdiction when it conducted subsequent proceedings determining just compensation and later on
directed plaintiff-appellant to pay additional just compensation in the amount of P1,905,600.00 for the
building of defendant-appellee.
Lastly, as to the argument of plaintiff-appellant that the award of additional just compensation for the
building of defendant-appellee is erroneous and without legal basis because the building was never taken
by the government in the expropriation proceeding conducted by the trial court nor was it affected by the
construction of the Zapote-Alabang Flyover, We find the ruling of Republic of the Philippines through the
DPWH vs. CA and Rosario R. Reyes appropriate to apply in this case, to wit:
Petitioner contends that no consequential damages may be awarded as the remaining lot was not "actually
taken" by the DPWH, and to award consquential damages for the lot which was retained by the owner is
tantamount to unjust enrichment on the part of the latter.
Petitioners contention is unmeritorious.
No actual taking of the remaining portion of the real property is necessary to grant consequential damages.
If as a result of the expropriation made by petitioner, the remaining lot (i.e., the 297-square meter lot) of
private respondent suffers from an impairment or decrease in value, consequential damages may be
awarded to private respondent.
WHEREFORE, in view of the foregoing considerations, the instant appeal is hereby DISMISSED. The
assailed order of the Regional Trial Court of Las Pias, Branch 275 dated February 3, 2003 is AFFIRMED
in toto.39 (Emphasis and underscoring supplied; italicization in the original.)

Petitioner filed a Motion for Reconsideration.40 This was denied by the appellate court in a Resolution dated
06 August 2012.41
The Issues
The issues for our resolution are: (1) whether the trial courts Decision dated 25 November 1998 had
become final and executory before BPI filed its motion for partial new trial; and (2) whether the award of
additional just compensation for BPIs building in the amount fixed therefor is unfounded and without legal
basis.
The Courts Ruling
We find the appeal unmeritorious.
On whether BPIs motion for partial new
trial was filed out of time
Petitioner contends that the trial courts Decision dated 25 November 1998 had already become final and
executory as of 11 December 1998, as stated in the Certification42 issued by the acting branch clerk of
court. On the other hand, BPI asserts that its motion for partial new trial filed on 16 December 1998 was
timely filed because it received a copy of the Decision on 01 December 1998.
Petitioner argues that the Court of Appeals erred in holding that the 25 November 1998 Decision did not
become final and executory for BPI on 11December 1998. It argues that the appellate court erred in
reckoning the 15-day reglementary period from a mere admission of the date of receipt by BPI. Petitioner
further argues that the Certification issued by the acting branch clerk of the trial court enjoys a presumption
of regularity and that BPI had not been able to overcome the presumption. Both the trial and appellate
courts found that BPIs motion for partial new trial was filed on time.
A perusal of the Certification reveals that it certifies that the 25 November 1998 Decision had already
become final, executory and unappealable as to petitioner:
x x x the Decision in this case dated November 25, 1998 has become FINAL, EXECUTORY and
UNAPPEALABLE as of December 11, 1998 considering that the Office of the Solicitor General failed to file
any Notice of Appeal or Motion for Reconsideration despite receipt of a copy thereof on November 26,
1998.
This certification is being issued upon the request of Atty. Jansen Rodriguez for whatever legal purpose it
may serve.43 (Emphasis supplied)
There can be no other reading of this certificate that would be supported by the record.
Section 9 of Rule 13 of the Rules of Court states that judgments, final orders or resolutions shall be served
either personally or by registered mail. Section 13 of the same Rule provides what consists proof of service:
Proof of personal service shall consist of a written admission of the party served, or the official return of the
server, or the affidavit of the party serving, containing a full statement of the date, place and manner of
service. x x x If service is made by registered mail, proof shall be made by such affidavit and the registry
receipt issued by the mailing office. The registry return card shall be filed immediately upon its receipt by
the sender x x x.
A careful review of the record shows the absence of any proof that the Decision of 25 November 1998 was
served upon BPI. Hence, the Court of Appeals correctly held that absent any proof of service to BPI of the
Decision, the period of 15 days within which to file its motion for partial new trial did not begin to run against
BPI. However, BPIs admission that it received a copy of the Decision on 01 December 1998 is binding on
it, and was correctly considered by the Court of Appeals as the reckoning date to count the 15-day period.
On whether the award of additional just
compensation and the amount fixed therefor

was unfounded and without legal basis

Eminent domain is the authority and right of the State, as sovereign, to take private property for public use
upon observance of due process of law and payment of just compensation.44 The States power of eminent
domain is limited by the constitutional mandate that private property shall not be taken for public use
without just compensation.45
Just compensation is the full and fair equivalent of the property sought to be expropriated.46
The general rule is that the just compensation to which the owner of the condemned property is entitled to
is the market value.47 Market value is that sum of money which a person desirous but not compelled to buy,
and an owner willing but not compelled to sell, would agree on as a price to be paid by the buyer and
received by the seller. The general rule, however, is modified where only a part of a certain property is
expropriated.48 In such a case, the owner is not restricted to compensation for the portion actually taken, he
is also entitled to recover the consequential damage, if any, to the remaining part of the property.49
In this case, petitioner questions the appellate courts Decision affirming the trial courts Order of 03
February 2003 granting additional just compensation for consequential damages for BPIs building.
Petitioner contends that BPIs building was "never taken" by petitioner, and that to award consequential
damages for the building was unfounded and without legal basis. In support of its contention, petitioner
relies on the letter dated12 September 2000 of the DPWH to the Office of the Solicitor General50 stating
that the proposed sidewalk of 2.50 meters was reduced to 2.35meters, thus leaving BPIs building intact.
Petitioners argument is untenable.
No actual taking of the building is necessary to grant consequential damages. Consequential damages are
awarded if as a result of the expropriation, the remaining property of the owner suffers from an impairment
or decrease in value.51 The rules on expropriation clearly provide a legal basis for the award of
consequential damages. Section 6 of Rule 67 of the Rules of Court provides:
x x x The commissioners shall assess the consequential damages to the property not taken and deduct
from such consequential damages the consequential benefits to be derived by the owner from the public
use or public purpose of the property taken, the operation of its franchise by the corporation or the carrying
on of the business of the corporation or person taking the property. But in no case shall the consequential
benefits assessed exceed the consequential damages assessed, or the owner be deprived of the actual
value of his property so taken.
In B.H. Berkenkotter & Co. v. Court of Appeals,52 we held that:
To determine just compensation, the trial court should first as certain the market value of the property, to
which should be added the consequential damages after deducting therefrom the consequential benefits
which may arise from the expropriation. If the consequential benefits exceed the consequential damages,
these items should bed is regarded altogether as the basic value of the property should be paid in every
case.
We quote with approval the ruling of the Court of Appeals:
Lastly, as to the argument of plaintiff-appellant that the award of additional just compensation for the
building of defendant-appellee is erroneous and without legal basis because the building was never taken
by the government in the expropriation proceeding conducted by the trial court nor was it affected by the
construction of the Zapote-Alabang Flyover, We find the ruling of Republic of the Philippines through the
DPWH vs. CA and Rosario R. Reyes appropriate to apply in this case, to wit:
Petitioner contends that no consequential damages may be awarded as the remaining lot was not "actually
taken" by the DPWH, and to award consequential damages for the lot which was retained by the owner is
tantamount to unjust enrichment on the part of the latter.
Petitioners contention is unmeritorious.
No actual taking of the remaining portion of the real property is necessary to grant consequential damages.
If as a result of the expropriation made by petitioner, the remaining lot (i.e., the 297-square meter lot) of

private respondent suffers from an impairment or decrease in value, consequential damages may be
awarded to private respondent.53 (Italicization in the original)
Petitioner would also have us review the bases of the courts below in awarding just compensation for the
building for consequential damages. The uniform findings of the trial court and the appellate court are
entitled to the greatest respect. They are binding on the Court in the absence of a strong showing by
petitioner that the courts below erred in appreciating the established facts and in drawing inferences from
such facts.54 We find no cogent reason to deviate from this.
The Court would like to stress that there is a stark absence in the records of any proof that DPWH
communicated its amended plan to BPI or to the trial court. On the other hand, the trial court found that BPI
was not notified of the reduction and had relied only on the DPWH letter dated 12 August 1997 saying that
it was not possible to reduce the width of the sidewalk. Petitioner had actively participated in the
expropriation proceedings of the portion of BPIs lot according to the original plan, the decision for which
was promulgated on 25 November 1998. The trial court had also ruled that additional just compensation for
the building was in order in its Decision dated 10 September 1999, from which petitioner moved for
reconsideration but only as to the procedure in the determination of the amount. Further, the records show
that by 07 September 1999, when Officer-In-Charge Agbayani conducted an ocular inspection, a new
building had already been constructed replacing the old one; whereas the amended plan was
communicated by DPWH to the OSG only in September 2000,when the trial court was constituting anew
the Board of Commissioners to determine the amount of just compensation for the building. The findings of
the lower courts are borne by the records. Hence, there was proper basis for the determination of just
compensation for the building for consequential damages.
WHEREFORE, we DENY the petition. We AFFIRM the Court of Appeals Decision dated 14 September
2011 and Resolution dated 06 August 2012 in CA-G.R. CV No. 79843.
SO ORDERED.

THIRD DIVISION
G.R. No. 181480

January 30, 2009

JOSEFINA CADA, Petitioner,

vs.
TIME SAVER LAUNDRY/LESLIE PEREZ, Respondents.
DECISION
CHICO-NAZARIO, J.:
This is a Petition for Review on Certiorari under Rule 451 of the Revised Rules of Court filed by petitioner
Josefina Cada assailing the Decision2 of the Court of Appeals dated 17 December 2007 in CA-G.R. SP No.
94616, which declared the Resolutions dated 30 November 20043 and 28 February 2006 of the National
Labor Relations Commission (NLRC)4 as null and void on the ground of lack of proper service of summons
on respondent Leslie Perez (Perez). In its Resolution dated 30 November 2004, the NLRC affirmed5 the
Decision6 dated 16 March 2004 of the Labor Arbiter in NLRC-NCR Case No. 05-06071-03 in finding that
petitioner Josefina Cada was illegally dismissed by respondents Perez and Time Saver Laundry (TSL).
The Petition at bar stemmed from a Complaint7 dated 21 May 2003 filed before the NLRC by petitioner
against respondents for illegal dismissal, underpayment of salary, nonpayment of overtime pay, holiday
pay, premium pay for holiday and rest day pay, service incentive leave pay, 13th month pay, ECOLA,
separation pay and attorneys fees. The Complaint was docketed as NLRC-NCR Case No. 05-06071-03.

Respondent TSL is a sole proprietorship engaged in the laundry business. Respondent Perez is the
owner/proprietor of TSL.8
Petitioner alleged that she was employed by the respondents on 28 September 2002 as Presser, receiving
a salary of P220.00 per day. She worked for 12 hours a day, from 9:00 a.m. to 9:00 p.m., but she was not
paid overtime pay. She also did not receive holiday pay, premium pay for holidays and rest days, 5 days
service incentive leave pay (SILP), and 13th month pay. While she was working on 7 May 2003, the
management called her attention for quarreling with her co-employee. Without giving her an opportunity to
explain and defend her side, petitioner was sent home and prevented to work further, compelling her to file
the Complaint for illegal dismissal against respondents.
Respondents failed to appear for the entire proceedings before the Labor Arbiter. The Labor Arbiter heard
the case ex parte directing the petitioner to file her position paper.9 On the basis of the petitioners position
paper, the case was submitted for decision.
In its Decision dated 16 March 2004, the Labor Arbiter ruled:
WHEREFORE, finding complainant to have been illegally dismissed, she is entitled to payment of
separation pay in lieu of reinstatement as aforestated and backwages. Accordingly, respondents Time
Saver Laundry and Leslie Perez are hereby ordered to pay complainant the following:
1. P 7,280.00 - separation pay
2. P80,563.17 - backwages from May 7, 2003 to date of this decision which will further be computed until
finality of this decision
3. P 5,670.00 - salary differentials from September 28, 2002 to May 7, 2003
4. P 5,670.60 - ECOLA
5. P29,534.38 - overtime pay
P128,718.75 - TOTAL
6. P12,871.88 - 10% of the total award as and by way of attorneys fees.
P141,590.63 - TOTAL MONETARY AWARD
All other claims are ordered DISMISSED for lack of merit.10
On 21 June 2004, respondents appealed to the NLRC11 essentially arguing that they were denied due
process on the ground of improper service of summons and that the monetary award in favor of petitioner
was without basis. Respondents appeal was docketed as CA No. 040723-04.
The NLRC issued its Resolution dated 30 November 2004, sustaining the finding of the Labor Arbiter that
petitioner was illegally dismissed:
Conclusively of first impression, [herein petitioner] filed her verified complaint on May 21, 2003, alleging
among others, the fact of her dismissal on May 7, 2003. Thereafter, [petitioner] submitted her verified
Position Paper which takes the place of her direct testimonies which substantiate her claim for illegal
dismissal, stating with particularity the facts attending her illegal dismissal as follows:
"x x x. On May 7, 2003, while working, her attention was called to the Office by Management and accused
her of quarreling with an employee of the Company. From there, and without giving her an opportunity to
explain and defend her side, was sent home and prevented to work further. x x x" (Complainants Position
Paper, p. 1, Record, p. 13)
In this jurisdiction, it is the unwavering rule that the "onus probandi" to show that the dismissal of an
employee from service is for cause and due process rests upon the shoulders of the employer. Failure to
discharge this burden, the dismissal is tainted with illegality.

At bar, [herein respondents] failed to discharge this burden. A mere denial that they did not dismiss the
[petitioner] is not a sufficient measure of the required proof to belie or controvert the latters assertion that
she was dismissed from service, much less, illegally; more so, when [petitioner] satisfactorily narrated the
ultimate facts attending her dismissal.
In fine, for want of just or authorized cause and in the absence of due process, the dismissal of [petitioner]
from service is therefore tainted with illegality.12
The NLRC did not give credence to respondents argument that they were denied due process:
The issue interposed by the [respondents] that their right to due process was denied in the discernment of
the present dispute is now rendered moot and academic as We give (sic) them the opportunity to explain
and be heard through the judicious resolution of the substantive merits of this case:
"The party who has had ample opportunity to present its side of the controversy not only before the Labor
Arbiter but also the NLRC on appeal, it cannot interpose lack of due process for what the fundamental law
abhors is simply the absolute absence of opportunity to be heard." (CMP Federal Security Agency, Inc. vs.
NLRC, 303 SCRA 99).13
The NLRC then determined the monetary awards to which petitioner would be entitled to:
Finding the dismissal of [petitioner] as illegal, she is entitled, under Art. 279 of the Labor Code, to
reinstatement and full backwages. However, considering that reinstatement would not be in the interest of
the parties as there is now of ruptured and strained relationship exists between them, it is more appropriate
to award separation pay, in lieu of reinstatement.
In the absence of proof of payment on the [petitioners] money claims as these were not substantially belied
nor controverted by [respondents], the awards for salary differential, overtime pay, SILP and 13th month
pay are hereby affirmed.
The claim for attorneys fees is granted based on salary differential, overtime pay and ECOLA pursuant to
Article 111 of the Labor Code.
All other claims, for lack of factual or legal basis, are DISMISSED.14
In the end, the NLRC decreed:
WHEREFORE, the assailed decision of 16 March 2004 with modification on the award of attorneys fee is
AFFIRMED.15
Respondents filed a Motion for Reconsideration of the 30 November 2004 Resolution of the NLRC.16 They
followed this up with a Supplemental Motion for Reconsideration which only reiterated the arguments
presented in their appeal.17
In a Resolution dated 28 February 2006, the NLRC denied respondents Motion and Supplemental Motion
for Reconsideration.18
Thereafter, respondents filed with the Court of Appeals a Petition for Certiorari under Rule 6519 of the
Revised Rules of Court, docketed as CA-G.R. SP No. 94616.
In its Decision dated 17 December 2007, the Court of Appeals held that respondent Perez was indeed
denied due process based on the following ratiocination:
As above-quoted, service of summons in cases before the Labor Arbiters shall be served on the parties
personally or by registered mail, provided that in special circumstances, service of summons may be
effected in accordance with the pertinent provisions of the Rules of Court. In this case, since [herein
respondent] Leslie Perez is the sole proprietor of Time Saver Laundry, service of summons must be made
to her personally or by registered mail. The bailiff chose to serve the summons personally upon
[respondent Perez]. However, said service of summons was invalid as it was not personally received by
[respondent Perez] herself. The records show that the summons was received by one Alfredo Perez on
June 7, 2003. It appears that Alfredo Perez is a co-employee of [herein petitioner]. x x x.

xxxx
Considering that there was no proper service of summons upon [respondent Perez], the Labor Arbiter did
not acquire jurisdiction over his (sic) person. Perforce, the proceedings conducted and the decision
rendered is nugatory and without effect.
xxxx
The lack of proper service of summons clearly deprived [respondent Perez] of her right to due process of
law. She should have been afforded her day before the labor arbiter. She was deprived of her right to be
heard and to present evidence which are essential ingredients of due process of law. While it is true that
the Labor Arbiters and the NLRC are not bound by technical rules of evidence and procedure, such should
not be interpreted so as to dispense with the fundamental and essential right of every person to due
process of law.20
The dispositive portion of the assailed Decision of the Court of Appeals reads:
WHEREFORE, premises considered, finding grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of public respondent, the instant petition is GRANTED. The assailed Resolutions
dated November 30, 2004 and February 28, 2006, respectively, of public respondent NLRC are hereby
declared NULL and VOID.21
Aggrieved, petitioner comes before us22 with the following assignment of errors:
I THE COURT OF APPEALS DECIDED THE CASE ON QUESTION OF LAW AND SUBSTANCE
DETERMINABLE BY THE HONORABLE SUPREME COURT
II THE COURT OF APPEALS IN DECIDING, HAS DEPARTED FROM THE USUAL AND ACCEPTED
JUDICIAL PROCEEDINGS DEROGATORY TO THE RIGHTS OF PETITIONER.23
We determine that the fundamental issue for our resolution in the present Petition is whether there had
been improper service of summons upon respondent Perez which renders the judgment by the NLRC
against her null and void.
We rule in the negative.
The NLRC Rules governing the issuance and service of summons provide24:
Sec. 3. Issuance of Summons. Within two (2) days from receipt of a case, the Labor Arbiter shall issue the
required summons, attaching thereto a copy of the complaint/petition and supporting documents, if any.
The summons, together with a copy of the complaint, shall specify the date, time and place of the
conciliation and mediation conference in two (2) settings.
Section 6. SERVICE OF NOTICES AND RESOLUTIONS. a) Notices or summonses and copies of orders
shall be served on the parties to the case personally by the bailiff or duly authorized public officer within
three (3) days from receipt thereof or by registered mail; provided that in special circumstances, service of
summons may be effected in accordance with the pertinent provisions of the Rules of Court; Provided
further, that in cases of decisions and final awards, copies thereof shall be served on both parties and their
counsel/representative by registered mail; provided further that in cases where a party to a case or his
counsel on record personally seeks service of the decision upon inquiry thereon, service to said party shall
be deemed effected upon actual receipt thereof; provided finally, that where parties are so numerous,
service shall be made on counsel and upon such number of complainants, as maybe practicable, which
shall be considered substantial compliance with Article 224(a) of the Labor Code, as amended.25
(Emphasis supplied.)1avvph!1.net
Sec. 6. Proof and completeness of service. The return is prima facie proof of the facts indicated therein.
Service by registered mail is complete upon receipt by the addressee or his agent; but if the addressee fails
to claim his mail from the post office within five (5) days from the date of first notice of the postmaster,
service shall take effect after such time.26
Sec. 5. x x x

(b) The bailiff or officer serving the notice, order, resolution or decision shall submit his return within two (2)
days from the date of service thereof, stating legibly in his return, his name, the names of the persons
served and the date of receipt, which return shall be immediately attached and shall form part of the
records of the case. In case of service by registered mail, the bailiff or officer shall write in the return, the
names of persons served and the date of mailing of the resolution or decision. If no service was effected,
the serving officer shall state the reason therefor in the return.
Based on the foregoing rules, notices or summonses shall be served on the parties to the case personally.
The same rule allows under special circumstances, that service of summons may be effected in
accordance with the provisions of the Rules of Court.
Pertinent provisions of the Rules of Court regarding service of summons read:
RULE 14
SUMMONS
Sec. 6. Service in person on defendant. Whenever practicable, the summons shall be served by handing
a copy thereof to the defendant in person, or, if he refuses to receive and sign for it by tendering it to him.
Sec. 7. Substituted service. If, for justifiable causes, the defendant cannot be served within a reasonable
time as provided in the proceding section, service may be affected (a) by leaving copies of the summons at
the defendants residence with some person of suitable age and discretion then residing therein, or (b) by
leaving the copies at defendants office or regular place of business with some competent person in charge
thereof.
As borne by the records, summons and notices were served on respondents under the circumstances
described below:
1) Summons to respondents dated 27 May 2003, received by Alfredo Perez, employee of TSL and uncle of
respondent Perez, on 7 June 2003 as shown by the bailiffs return dated 10 June 200327;
2) Notice of Hearing set on 10 July 2003, received for the respondents by Beth Diapolet, Cashier at
respondent TSL, on 1 July 2003. During the hearing, only the petitioner and her counsel appeared,
respondents failed to appear28;
3) Notice of Hearing set on 31 July 2003, received for the respondents by Beth Diapolet, Cashier at
respondent TSL, on 26 July 2003 as shown by bailiffs return dated 28 July 2003. Petitioner and counsel
appeared but the respondents did not appear. During this hearing, the Labor Arbiter required the parties to
file their position paper29;
4) Notice of Hearing set on 20 August 2003, received for the respondents by Vivian Bon, Supervisor at
respondent TSL, on 13 August 2003 as shown by the bailiffs return dated 15 August 2003.30 Only the
petitioner appeared and filed her position paper. The Labor Arbiter set the case for hearing anew on 18
September 2003;
5) Notice of hearing and to file position paper set on 18 September 2003 with a warning that upon failure to
appear on this date, the case will proceed ex parte. This notice was received for the respondents by Beth
Diapolet, cashier at respondent TSL on 15 September 2003 as shown by the bailiffs return dated 17
September 2003.31 Again, respondents did not appear before the Labor Arbiter or file their position paper
on the date indicated in the notice; and
6) Notice of Hearing set on 9 October 2003 with a second "Warning." This was received for the
respondents by "Benjie,"32 delivery boy at respondent TSL, on 3 October 2003 as shown by the bailiffs
return dated 6 October 2003.33
Following the explicit language of the NLRC Rules, service of summons on respondent Perez should be
made personally. But was personal service of summons practicable? Conversely, was substituted service
of summons justified? Obviously, in this case, personal service of summons was not practicable. By
respondent Perezs own admission, she was out of town during the entire proceedings before the Labor
Arbiter.34 Given this admission, she would be unable to personally receive the summons and later the

notices from the Labor Arbiter. Thus, even if the bailiff would return at some other time to personally serve
the summons on respondent Perez, it would still yield the same result. To proceed with personal service of
summons on respondent Perez who unequivocally admits that she was out of town during the entire
proceedings before the Labor Arbiter would not only be impractical and futile - it would be absurd.35 While
we are not unmindful of the NLRC rules which state that service of summons should be made personally,
considering the circumstances in the instant case, we find that service of summons at TSL, respondent
Perezs place of business,36 amounts to substantial compliance with the Rules.37 In the fairly recent case of
Scenarios v. Vinluan,38 service of summons by registered mail at therein petitioners place of business was
considered valid. This Court declared in the said case that technical rules of procedure are not strictly
applied in quasi-judicial proceedings; only substantial compliance is required. That the summons was
served in the premises of therein petitioners office was enough to convince the court that the service of
said processes was completed and resultantly, the requirement of notice has been served.39
In quasi-judicial proceedings before the NLRC and its arbitration branch, procedural rules governing service
of summons are not strictly construed. Substantial compliance thereof is sufficient. The constitutional
requirement of due process with respect to service of summons only exacts that the service of summons be
such as may reasonably be expected to give the notice desired.40 Once the service provided by the rules
reasonably accomplishes that end, the requirement of justice is answered, the traditional notion of fair play
is satisfied, due process is served.41
To apply the technical rules on service of summons would be to overturn the bias of the Constitution and
the laws in favor of labor. In labor cases, punctilious adherence to stringent technical rules maybe relaxed
in the interest of the working man; it should not defeat the complete and equitable resolution of the rights
and obligations of the parties. This Court is ever mindful of the underlying spirit and intention of the Labor
Code to ascertain the facts of each case speedily and objectively without resort to technical rules.42
In Columbus Philippines Bus Corporation v. National Labor Relations Commission,43 we expounded on the
presumption of regularity in the service of summons and other notices, to wit:
[U]nless the contrary is proven, official duty is presumed to have been performed regularly and judicial
proceedings regularly conducted. This presumption of the regularity of the quasi-judicial proceedings before
DOLE includes the presumption of regularity of service of summons and other notices. x x x.
Moreover, it is a legal presumption, based on wisdom and experience, that official duty has been regularly
performed; that the proceedings of a judicial (and quasi-judicial) tribunal are regular and valid, and that
judicial (quasi-judicial) acts and duties have been and will be duly and properly performed.44 The burden of
proving the irregularity in official conduct, if any, is on the part of respondents who, in this case, clearly
failed to discharge the same.
It has not escaped our attention the respondents denial of receipt of the notices from the Labor Arbiter, yet
they were able to receive a copy of the Labor Arbiters decision and file a timely appeal with the NLRC.
Indeed, respondents were able to seek the reconsideration of the adverse decision of the Labor Arbiter
when they seasonably filed their appeal before the NLRC. A party who has availed himself of the
opportunity to present his position cannot claim to have been denied due process. Despite such
opportunity, respondents failed to convincingly establish that their defense is meritorious.45
We must emphasize that even though respondents did not participate in the proceedings before the Labor
Arbiter, they were eventually able to argue their case on appeal before the NLRC. In their appeal,
respondents had the opportunity to substantiate with evidence their claim that they did not receive the
summons and notices from the Labor Arbiter, and that petitioner was not illegally dismissed. Article 22346 of
the Labor Code allows an appeal from a decision of the Labor Arbiter "if serious errors in the findings of
facts are raised which would cause grave or irreparable injury to the appellant." The NLRC, in the exercise
of its appellate powers, is authorized to correct, amend or waive any error, defect or irregularity in
substance or in form. This Court had previously allowed evidence to be submitted on appeal, emphasizing
that, in labor cases, technical rules of evidence are not binding. The NLRC in fact went over the arguments
of respondents but it remained unconvinced.
Necessarily, respondents contention that they were denied due process because of improper service of
summons and notices is devoid of merit. The essence of due process is simply an opportunity to be heard
or as applied to administrative proceedings, an opportunity to explain one's side or an opportunity to seek a

reconsideration of the action or ruling complained of. What the law prohibits is absolute absence of the
opportunity to be heard; hence, a party cannot feign denial of due process where he had been afforded the
opportunity to present his side.47 A formal or trial type hearing is not at all times and in all instances
essential to due process, the requirements of which are satisfied where the parties are afforded fair and
reasonable opportunity to explain their side of the controversy.
Equally without merit is respondents' assertion that they were not afforded due process when the Labor
Arbiter rendered his decision based only on the evidence adduced by petitioner. The authority of the Labor
Arbiter to render judgment based solely on the evidence adduced by a complainant is explicitly sanctioned
by Section 2, Rule V of the Revised Rules of Procedure of the NLRC, which provides:
Section 2 of Rule V:
Sec. 2. x x x.
xxxx
In case of non-appearance of the respondent/s during the first conference, a second conference shall
proceed. Non-appearance of the respondent during the second conference shall immediately terminate the
mandatory conciliation/mediation conference. The complainant shall thereupon be allowed to file his
position paper as well as submit evidence in support of his cause or causes of action after which, the Labor
Arbiter shall render his decision on the basis of the evidence on record.48 (Emphasis supplied.)
Undoubtedly, respondents were afforded ample opportunity to be heard. Despite any purported procedural
flaw that may have marred the proceedings before the Labor Arbiter, it should be deemed rectified in the
subsequent proceedings in the NLRC, to the Court of Appeals, and before this Court.
Wherefore, premises considered, the instant Petition is Granted. The Decision dated 17 December 2007 of
the Court of Appeals in CA-G.R. SP No. 94616 is reversed and set aside; and the NLRC Resolutions dated
30 November 2004 and 28 February 2006 in CA No. 040723-04, affirming with modification the Decision
dated 16 March 2004 of the Labor Arbiter in NLRC-NCR Case No. 05-06071-03, are reinstated. Costs
against respondents.
SO ORDERED.

THIRD DIVISION
G.R. No. 171916

December 4, 2009

CONSTANTINO A. PASCUAL, substituted by his heirs, represented by Zenaida Pascual, Petitioner,

vs.
LOURDES S. PASCUAL, Respondent.
DECISION
PERALTA, J.:
Due process dictates that jurisdiction over the person of a defendant can only be acquired by the courts
after a strict compliance with the rules on the proper service of summons.
Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, with Prayer for
Temporary Restraining Order and Writ of Preliminary Injunction, seeking to annul the Decision1 dated June
29, 2005 and the Resolution2 dated March 14, 2006 of the Court of Appeals (CA) nullifying and vacating the
Decision3 dated December 3, 2002 and Order4 dated April 4, 2003 of the Regional Trial Court (RTC),
Branch 12, Malolos, Bulacan.
The facts, as found in the records, are the following:

Petitioner filed a Complaint for Specific Performance with Prayer for Issuance of Preliminary Mandatory
Injunction with Damages before the RTC of Malolos, Bulacan against respondent. The process server, in
his Return of Service5 dated May 21, 2002, reported, among others that:
The undersigned Process Server of this Honorable Court went at defendant's given address at No. 4
Manikling St., Talayan Village, Quezon City on May 20, 2002 to serve the summons and copy of the
Complaint together with the annexes thereto in connection with the above-entitled case.
At the time of the service of the said summons, the defendant was not at her home and only her maid was
there who refused to receive the said summons [in spite] of the insistence of the undersigned.
The undersigned, upon his request with the Brgy. Clerk at the said place, was given a certification that he
really exerted effort to effect the service of the said summons but failed due to the above reason. (Annex
"A").
The following day, May 21, 2002, the undersigned went back at defendant's residence to have her receive
the subject summons but again the above defendant was not at her house.
WHEREFORE, the original summons and copy of the complaint is hereby returned to the Honorable Court
NOT SERVED.
Malolos, Bulacan, May 21, 2002.
Thereafter, an alias summons was issued by the RTC and, on May 29, 2002, the following report was
submitted:
The undersigned, on May 29, 2002, made a 3rd attempt to serve the alias summons issued by the Hon.
Court relative with the above-entitled case at the given address of the defendant.
The undersigned, accompanied by the barangay officials of the said place, proceeded at defendant's
residence but the undersigned was not permitted to go inside her house and was given information by her
maid that the defendant was not there.
The defendant's car was parked inside her house and inquiries/verification made on her neighbors revealed
that the defendant was inside her house at the time of service of said summons and probably did not want
to show-up when her maid informed her of undersigned's presence.
WHEREFORE, the undersigned court process server respectfully returned the alias summons dated May
29, 2002 issued by the Hon. Court "UNSERVED" for its information and guidance.
Malolos, Bulacan, May 30, 2002.6
Subsequently, on August 14, 2002, the process server returned with the following report,7 stating that a
substituted service was effected:
This is to certify that on the 14th day of August, 2002, I personally went at Dr. Lourdes Pascual's residence
at #4 Manikling Street, Talayan Village, Quezon City, to serve the copy of the Summons dated August 12,
2002, together with a copy of the Complaint and its annexes thereto.1avvphi1
Defendant Dr. Lourdes Pascual was out during the time of service of the said summons and only her
housemaid was present. The undersigned left a copy of the same to the latter who is at the age of reason
but refused to sign the same.
WHEREFORE, the undersigned respectfully return the service of summons duly served for information and
guidance of the Honorable Court.
Malolos, Bulacan, August 14, 2002.
For failure of the respondent to file a responsive pleading, petitioner, on September 17, 2002, filed a Motion
to Declare Defendant in Default8 to which the petitioner filed an Opposition/Comment to Plaintiff's Motion to
Declare Defendant in Default9 dated October 1, 2002, claiming that she was not able to receive any

summons and copy of the complaint. The RTC, in its Order10 dated October 30, 2002, declared respondent
in default and allowed petitioner to file his evidence ex-parte.
Respondent filed a Motion for Reconsideration11 dated November 18, 2002 seeking to set aside the abovementioned Order dated October 30, 2002. However, the said motion was denied by the RTC in its Order12
dated November 27, 2002.
Consequently, on December 3, 2002, the RTC, in its Decision,13 found in favor of the petitioner. The
dispositive portion of the said Decision reads:
WHEREFORE, in light of all the foregoing, judgment is hereby rendered in favor of the plaintiff, Constantino
A. Pascual, and against Lourdes S. Pascual, ordering the latter as follows:
a. to CEASE AND DESIST from further intervening with the corporate and internal affairs of Rosemoor
Mining Corporation, consisting of acts and omissions prejudicial and detrimental to the interest of the said
corporation resulting to irreparable injury to herein plaintiff;
b. to pay plaintiff the sum of One Hundred Thousand Pesos (P100,000.00), for and by way of moral
damages;
c. to pay the sum of Thirty Thousand Pesos (P30,000.00) for and by way of Attorney's fees; and
d. to pay the costs of this suit.
SO ORDERED.
Respondent then filed a Motion to Set Aside Order of Default14 dated December 13, 2002, with the
argument of non-service of summons upon her. This was denied by the RTC in its Order15 dated April 4,
2003; and on the same day, a Certificate of Finality and Entry of Judgment was issued. Eventually,
respondent, on April 28, 2003, filed a Motion for Reconsideration16 of the Order dated April 4, 2003, which
was denied by the RTC in its Order17 dated June 23, 2003. Finally, on June 26, 2003, a Writ of Execution
was issued to enforce the Decision dated December 3, 2002 of the RTC.
Aggrieved, respondent filed with the CA a Petition for Certiorari and Prohibition under Rule 65 of the Rules
of Court which was granted by the same Court in its Decision18 dated June 29, 2005, the dispositive portion
of which reads:
WHEREFORE, the petition is GIVEN DUE COURSE and GRANTED. The said Decision, as well as the
Orders and the processes on which this is premised, are NULLIFIED and VACATED.
SO ORDERED.
Petitioner comes now to this Court through a Petition for Review on Certiorari under Rule 45 of the Rules of
Court, with Prayer for Temporary Restraining Order and Writ of Preliminary Injunction, on the following
grounds:
I
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THERE WAS AN INVALID
SERVICE OF SUMMONS UPON THE RESPONDENT AND, HENCE, THE COURT (REGIONAL TRIAL
COURT) DID NOT ACQUIRE JURISDICTION OVER THE RESPONDENT.
II
THE HONORABLE COURT OF APPEALS ERRED IN GIVING DUE COURSE TO THE PETITION WHEN
FROM THE UNDISPUTED FACTS, THE RESPONDENT'S FAILURE TO INTERPOSE AN APPEAL OR
TO FILE A MOTION FOR RECONSIDERATION OR A PETITION FOR RELIEF FROM JUDGMENT
CLEARLY BARS THE INSTITUTION OF THE SPECIAL CIVIL ACTION FOR CERTIORARI UNDER RULE
65, 1997 RULES OF CIVIL PROCEDURE.
Petitioner insists that there was a valid substituted service of summons and that there should be a

presumption of regularity in the performance of official functions. He also avers that certiorari, which was
filed by the respondent with the CA, does not lie when the remedy of appeal has been lost.
In her Comment with Motion to Cite for Contempt19 dated August 29, 2006, respondent raises the following
issues:
1. SHOULD THE PETITION BE DISMISSED FOR HAVING BEEN FILED IN VIOLATION REPUBLIC ACT
NO. 6713 IN RELATION TO ART. 5 OF THE CIVIL CODE?
2. ARE THE PETITIONER AND HIS COUNSEL PUNISHABLE FOR CONTEMPT OF COURT FOR
KNOWINGLY MISLEADING THIS HONORABLE COURT?
3. WAS THE ALLEGED SERVICE OF SUMMONS ON THE ILLITERATE MAID EFFECTIVE TO CONFER
JURISDICTION OVER THE DEFENDANT BEFORE THE RTC OF MALOLOS, BULACAN?
4. ASSUMING FOR THE SAKE OF ARGUMENT THAT THE SERVICE OF SUMMONS WAS VALID, WAS
THE ORDER DECLARING THE DEFENDANT IN DEFAULT RENDERED WITH GRAVE ABUSE OF
DISCRETION?
5. WAS THE ORDER DENYING THE MOTION TO LIFT AND SET ASIDE THE ORDER OF DEFAULT
RENDERED WITH GRAVE ABUSE OF DISCRETION?
6. IS THE PETITIONER GUILTY OF FORUM SHOPPING?
7. WILL THIS HONORABLE COURT ALLOW THE NULL AND VOID DECEMBER 3, 2002 DECISION OF
THE RTC TO BECOME FINAL AND EXECUTORY AND OBLITERATE THE CRIMINAL ACT OF
FALSIFICATION, THEREBY REWARDING THE AUTHOR OF THE CRIMINAL OFFENSE?
In addressing the above issues, the respondent argues that the CA decision became final by operation of
law because the present petition is null and void for being a violation of the provisions of Republic Act No.
6712, in relation to Article 5 of the Civil Code, the counsel for petitioner having filed a Motion for Extension
of Time to File Petition for Review and, thereafter, the Petition for Review itself. She also claims that there
was no proper service of summons as the maid who was purportedly served a copy thereof was illiterate
and has denied being served in a sworn statement executed before a notary public and, thus, the RTC
never acquired jurisdiction over her person. According to her, assuming that the summons were indeed
served, the RTC was guilty of grave abuse of discretion for declaring her in default and for refusing to lift
the order of default because it deprived her of her right to present evidence in support of her defense. She
further disputes the argument of the petitioner that the Decision dated December 3, 2002 became final
because it did not become the subject of appeal by stating that the said principle can only be applied to
valid judgments that were rendered in accordance with law and not to void judgments rendered without
jurisdiction or in excess thereof. In addition, she avers that petitioner made a deliberate and malicious
concealment of the fact that at the time he filed the case for specific performance, as well as during the
time it was being heard, he was already being investigated in administrative proceedings before the
National Bureau of Investigation, the Department of Justice and the Municipal Trial Court of Malolos,
Bulacan, Branch 2, involving the same subject matter, issues and parties; hence, he violated the law
against forum shopping. Lastly, respondent points out that the CA Decision dated June 29, 2005 is a
permanent injunction against the implementation of the contested Orders and Decisions of the RTC;
therefore, there is an urgent necessity to enforce the said judgment.
On June 30, 2008, this Court granted20 the substitution of the respondent by his heirs as represented by his
wife Zenaida Pascual, after the Manifestation21 dated June 12, 2008 was filed informing this Court of the
demise of the same respondent.
After a careful study of the records of this case, this Court finds the petition bereft of any merit.
Clearly, the main, if not the only issue that needs to be resolved is whether or not there was a proper and
valid substituted service of summons, the resolution of which, will determine whether jurisdiction was
indeed acquired by the trial court over the person of the petitioner.
In a case where the action is in personam and the defendant is in the Philippines, the service of summons
may be done by personal or substituted service as laid out in Sections 6 and 7 of Rule 14 of the Revised

Rules of Court. The provisions state:

Section 6. Service in person on defendant. - Whenever practicable, the summons shall be served by
handing a copy thereof to the defendant in person, or, if he refuses to receive and sign for it, by tendering it
to him.
Section 7. Substituted service. - If, for justifiable causes, the defendant cannot be served within a
reasonable time as provided in the preceding section, service may be effected (a) by leaving copies of the
summons at the defendant's residence with some person of suitable age and discretion then residing
therein, or (b) by leaving the copies at defendants office or regular place of business with some competent
person in charge thereof.
A plain and simple reading of the above provisions indicates that personal service of summons should and
always be the first option, and it is only when the said summons cannot be served within a reasonable time
can the process server resort to substituted service.
This Court gave an in-depth discussion as to the nature and requisites of substituted service in Manotoc v.
Court of Appeals, et al.:22
We can break down this section into the following requirements to effect a valid substituted service:
(1) Impossibility of Prompt Personal Service
The party relying on substituted service or the sheriff must show that defendant cannot be served
promptly or there is impossibility of prompt service.23 Section 8, Rule 14 provides that the plaintiff or
the sheriff is given a "reasonable time" to serve the summons to the defendant in person, but no specific
time frame is mentioned. "Reasonable time" is defined as "so much time as is necessary under the
circumstances for a reasonably prudent and diligent man to do, conveniently, what the contract or duty
requires that should be done, having a regard for the rights and possibility of loss, if any, to the other
party."24 Under the Rules, the service of summons has no set period. However, when the court, clerk of
court, or the plaintiff asks the sheriff to make the return of the summons and the latter submits the return of
summons, then the validity of the summons lapses. The plaintiff may then ask for an alias summons if the
service of summons has failed.25 What then is a reasonable time for the sheriff to effect a personal service
in order to demonstrate impossibility of prompt service? To the plaintiff, "reasonable time" means no more
than seven (7) days since an expeditious processing of a complaint is what a plaintiff wants. To the sheriff,
"reasonable time" means 15 to 30 days because at the end of the month, it is a practice for the branch clerk
of court to require the sheriff to submit a return of the summons assigned to the sheriff for service. The
Sheriffs Return provides data to the Clerk of Court, which the clerk uses in the Monthly Report of Cases to
be submitted to the Office of the Court Administrator within the first ten (10) days of the succeeding month.
Thus, one month from the issuance of summons can be considered "reasonable time" with regard to
personal service on the defendant.
Sheriffs are asked to discharge their duties on the service of summons with due care, utmost diligence, and
reasonable promptness and speed so as not to prejudice the expeditious dispensation of justice. Thus, they
are enjoined to try their best efforts to accomplish personal service on defendant. On the other hand, since
the defendant is expected to try to avoid and evade service of summons, the sheriff must be resourceful,
persevering, canny, and diligent in serving the process on the defendant. For substituted service of
summons to be available, there must be several attempts by the sheriff to personally serve the summons
within a reasonable period [of one month] which eventually resulted in failure to prove impossibility of
prompt service. "Several attempts" means at least three (3) tries, preferably on at least two different dates.
In addition, the sheriff must cite why such efforts were unsuccessful. It is only then that impossibility of
service can be confirmed or accepted.
(2) Specific Details in the Return
The sheriff must describe in the Return of Summons the facts and circumstances surrounding the
attempted personal service.26 The efforts made to find the defendant and the reasons behind the
failure must be clearly narrated in detail in the Return. The date and time of the attempts on personal
service, the inquiries made to locate the defendant, the name/s of the occupants of the alleged residence or
house of defendant and all other acts done, though futile, to serve the summons on defendant must be
specified in the Return to justify substituted service. The form on Sheriffs Return of Summons on

Substituted Service prescribed in the Handbook for Sheriffs published by the Philippine Judicial Academy
requires a narration of the efforts made to find the defendant personally and the fact of failure.27 Supreme
Court Administrative Circular No. 5 dated November 9, 1989 requires that "impossibility of prompt service
should be shown by stating the efforts made to find the defendant personally and the failure of such
efforts," which should be made in the proof of service.
(3) A Person of Suitable Age and Discretion
If the substituted service will be effected at defendants house or residence, it should be left with a
person of "suitable age and discretion then residing therein."28 A person of suitable age and discretion
is one who has attained the age of full legal capacity (18 years old) and is considered to have enough
discernment to understand the importance of a summons. "Discretion" is defined as "the ability to make
decisions which represent a responsible choice and for which an understanding of what is lawful, right or
wise may be presupposed".29 Thus, to be of sufficient discretion, such person must know how to read and
understand English to comprehend the import of the summons, and fully realize the need to deliver the
summons and complaint to the defendant at the earliest possible time for the person to take appropriate
action. Thus, the person must have the "relation of confidence" to the defendant, ensuring that the latter
would receive or at least be notified of the receipt of the summons. The sheriff must therefore determine if
the person found in the alleged dwelling or residence of defendant is of legal age, what the recipients
relationship with the defendant is, and whether said person comprehends the significance of the receipt of
the summons and his duty to immediately deliver it to the defendant or at least notify the defendant of said
receipt of summons. These matters must be clearly and specifically described in the Return of Summons.
(4) A Competent Person in Charge
If the substituted service will be done at defendants office or regular place of business, then it should be
served on a competent person in charge of the place. Thus, the person on whom the substituted service
will be made must be the one managing the office or business of defendant, such as the president or
manager; and such individual must have sufficient knowledge to understand the obligation of the defendant
in the summons, its importance, and the prejudicial effects arising from inaction on the summons. Again,
these details must be contained in the Return.
Petitioner contends that there was a valid substituted service of summons as shown in not one, but three
Officer's Return. He points out that the absence in the officer's return of a statement about the impossibility
of personal service does not conclusively prove that the service was invalid. He adds that proof of prior
attempts to serve personally can be deduced from the other returns when there are several in a series of
officer's returns all tending to establish the impossibility of personal service upon the respondent. However,
the said argument of the petitioner is merely a plain deduction that veers away from the well-established
requisite that the officer must show that the defendant cannot be served promptly, or that there was an
impossibility of prompt service. A cursory reading of the three Officer's Returns does not show any
compliance with the said requisite. The Return of Service dated May 21, 2002 inadequately states that:
xxxx
At the time of service of the said summons, the defendant was not at her home and only her maid was
there who refused to receive the said summons [in spite] of the insistence of the undersigned.
The undersigned, upon his request with the Brgy. Clerk at the said place, was given a certification that he
really exerted effort to effect the service of the said summons but failed due to the above reason. (Annex
"A").
The following day, May 21, 2002, the undersigned went back at defendant's residence to have her receive
the subject summons but again the above defendant was not at her house.
xxxx
Similarly, in the Return of Service dated May 30, 2002, pertinent details were wanting, as it reads:
xxxx
The undersigned accompanied by the barangay officials of the said place proceeded at defendant's

residence but the undersigned was not permitted to go inside her house and was given information by her
maid that the defendant was not there.
The defendant's car was parked inside her house and inquiries/verification made on her neighbors revealed
that the defendant was inside her house at the time of service of said summons and probably did not want
to show-up when her maid informed her of undersigned's presence.
xxxx
Lastly, the Return of Service dated August 14, 2002 was no different. It reads:
xxxx
Defendant Dr. Lourdes Pascual was out during the time of service of the said summons and only her
housemaid was present. The undersigned left a copy of the same to the latter who is at the age of reason
but refused to sign the same.
xxxx
The above Return of Summons does not show or indicate the actual exertion or any positive steps taken by
the officer or process server in serving the summons personally to the defendant. As in Jose v. Boyon,30
this Court ruled that:
The Return of Summons shows no effort was actually exerted and no positive step taken by either the
process server or petitioners to locate and serve the summons personally on respondents. At best, the
Return merely states the alleged whereabouts of respondents without indicating that such information was
verified from a person who had knowledge thereof. Certainly, without specifying the details of the attendant
circumstances or of the efforts exerted to serve the summons, a general statement that such efforts were
made will not suffice for purposes of complying with the rules of substituted service of summons.
The necessity of stating in the process server's Return or Proof of Service the material facts and
circumstances sustaining the validity of substituted service was explained by this Court in Hamilton v.
Levy,31 from which we quote:
x x x The pertinent facts and circumstances attendant to the service of summons must be stated in the
proof of service or Officer's Return; otherwise, any substituted service made in lieu of personal service
cannot be upheld. This is necessary because substituted service is in derogation of the usual method of
service. It is a method extraordinary in character and, hence, may be used only as prescribed and in the
circumstances authorized by statute. Here, no such explanation was made. Failure to faithfully, strictly, and
fully comply with the requirements of substituted service renders said service ineffective.32
Petitioner further states that the presumption of regularity in the performance of official functions must be
applied to the present case. He expounds on the fact that as between the process server's return of
substituted service, which carries with it the presumption of regularity and the respondent's self-serving
assertion that she only came to know of the case against her when she received a copy of the petitioner's
motion to declare her in default, the process server's return is undoubtedly more deserving of credit. The
said argument, however, is only meritorious, provided that there was a strict compliance with the procedure
for serving a summons. In the absence of even the barest compliance with the procedure for a substituted
service of summons outlined in the Rules of Court, the presumption of regularity in the performance of
public functions does not apply.33
Applying the above disquisitions, the jurisdiction over the person of the respondent was never vested with
the RTC, because the manner of substituted service by the process server was apparently invalid and
ineffective. As such, there was a violation of due process. Jurisdiction over the defendant is acquired either
upon a valid service of summons or the defendants voluntary appearance in court. When the defendant
does not voluntarily submit to the courts jurisdiction or when there is no valid service of summons, "any
judgment of the court which has no jurisdiction over the person of the defendant is null and void."34
Petitioner also raises the issue of the impropriety of the remedy resorted to by the respondent which is the
filing of a Petition for Certiorari under Rule 65 of the Rules of Court, claiming that the said remedy is
inappropriate because there are still other plain, speedy and adequate remedies available, such as an

ordinary appeal, the Decision of the RTC having attained its finality. The question, however, is whether the
said Decision has indeed attained finality. The importance of the doctrine of the finality of judgment has
always been emphasized by this Court. In Pasiona, Jr. v. Court of Appeals,35 this Court has expounded on
the said doctrine, thus:
The Court re-emphasizes the doctrine of finality of judgment. In Alcantara v. Ponce,36 the Court, citing its
much earlier ruling in Arnedo v. Llorente,37 stressed the importance of said doctrine, to wit:
It is true that it is the purpose and intention of the law that courts should decide all questions submitted to
them "as truth and justice require," and that it is greatly to be desired that all judgments should be so
decided; but controlling and irresistible reasons of public policy and of sound practice in the courts demand
that at the risk of occasional error, judgments of courts determining controversies submitted to them should
become final at some definite time fixed by law, or by a rule of practice recognized by law, so as to be
thereafter beyond the control even of the court which rendered them for the purpose of correcting errors of
fact or of law, into which, in the opinion of the court it may have fallen. The very purpose for which the
courts are organized is to put an end to controversy, to decide the questions submitted to the litigants, and
to determine the respective rights of the parties. With the full knowledge that courts are not infallible, the
litigants submit their respective claims for judgment, and they have a right at some time or other to have
final judgment on which they can rely as a final disposition of the issue submitted, and to know that there is
an end to the litigation.38
Then, in Juani v. Alarcon,39 it was held, thus:
This doctrine of finality of judgment is grounded on fundamental considerations of public policy and sound
practice. In fact, nothing is more settled in law than that once a judgment attains finality it thereby becomes
immutable and unalterable. It may no longer be modified in any respect, even if the modification is meant to
correct what is perceived to be an erroneous conclusion of fact or law, and regardless of whether the
modification is attempted to be made by the court rendering it or by the highest court of the land.40
Again, in Dinglasan v. Court of Appeals,41 the Court declared that:
After the judgment or final resolution is entered in the entries of judgment, the case shall be laid to rest. x x
x
xxxx
The finality of decision is a jurisdictional event which cannot be made to depend on the convenience of the
party. To rule otherwise would completely negate the purpose of the rule on completeness of service, which
is to place the date of receipt of pleadings, judgment and processes beyond the power of the party being
served to determine at his pleasure.42
The said doctrine, however, is applicable only when the judgment or decision is valid. In the present case,
as earlier pronounced, and as ruled by the CA, the judgment in question is void, the RTC not having
acquired jurisdiction over the person of the respondent. It is a well-entrenched principle that a void
judgment can never become final. As ruled by this Court in Metropolitan Bank & Trust Company v. Alejo:43
In Leonor v. Court of Appeals44 and Arcelona v. Court of Appeals,45 we held thus:
A void judgment for want of jurisdiction is no judgment at all. It cannot be the source of any right nor
the creator of any obligation. All acts performed pursuant to it and all claims emanating from it have no
legal effect. Hence, it can never become final and any writ of execution based on it is void: "x x x it may be
said to be a lawless thing which can be treated as an outlaw and slain at sight, or ignored wherever and
whenever it exhibits its head."
Thus, from the above discussion, the Decision of the RTC, not having attained its finality due to its being
void, the Petition for Certiorari under Rule 65, filed by the respondent with the CA, was proper.
WHEREFORE, the Petition dated May 3, 2006 is hereby DENIED and the Decision dated June 29, 2005 of
the Court of Appeals in CA-G.R. SP No. 77789 is hereby AFFIRMED in toto.
SO ORDERED.

THIRD DIVISION
G.R. No. 130974 August 16, 2006
MA. IMELDA M. MANOTOC, Petitioner,
vs.
HONORABLE COURT OF APPEALS and AGAPITA TRAJANO on behalf of the Estate of
ARCHIMEDES TRAJANO, Respondents.
DECISION
VELASCO, JR., J.:
The courts jurisdiction over a defendant is founded on a valid service of summons. Without a valid service,
the court cannot acquire jurisdiction over the defendant, unless the defendant voluntarily submits to it. The
defendant must be properly apprised of a pending action against him and assured of the opportunity to
present his defenses to the suit. Proper service of summons is used to protect ones right to due process.
The Case
This Petition for Review on Certiorari 1 under Rule 45 presents the core issue whether there was a valid
substituted service of summons on petitioner for the trial court to acquire jurisdiction. Petitioner Manotoc
claims the court a quo should have annulled the proceedings in the trial court for want of jurisdiction due to
irregular and ineffective service of summons.
The Facts
Petitioner is the defendant in Civil Case No. 63337 entitled Agapita Trajano, pro se, and on behalf of the
Estate of Archimedes Trajano v. Imelda Imee R. Marcos-Manotoc 2 for Filing, Recognition and/or
Enforcement of Foreign Judgment. Respondent Trajano seeks the enforcement of a foreign courts
judgment rendered on May 1, 1991 by the United States District Court of Honolulu, Hawaii, United States of
America, in a case entitled Agapita Trajano, et al. v. Imee Marcos-Manotoc a.k.a. Imee Marcos, Civil Case
No. 86-0207 for wrongful death of deceased Archimedes Trajano committed by military intelligence officials
of the Philippines allegedly under the command, direction, authority, supervision, tolerance, sufferance
and/or influence of defendant Manotoc, pursuant to the provisions of Rule 39 of the then Revised Rules of
Court.
Based on paragraph two of the Complaint, the trial court issued a Summons 3 on July 6, 1993 addressed to
petitioner at Alexandra Condominium Corporation or Alexandra Homes, E2 Room 104, at No. 29 Meralco
Avenue, Pasig City.
On July 15, 1993, the Summons and a copy of the Complaint were allegedly served upon (Mr.) Macky de la
Cruz, an alleged caretaker of petitioner at the condominium unit mentioned earlier. 4 When petitioner failed
to file her Answer, the trial court declared her in default through an Order 5 dated October 13, 1993.
On October 19, 1993, petitioner, by special appearance of counsel, filed a Motion to Dismiss 6 on the
ground of lack of jurisdiction of the trial court over her person due to an invalid substituted service of
summons. The grounds to support the motion were: (1) the address of defendant indicated in the Complaint
(Alexandra Homes) was not her dwelling, residence, or regular place of business as provided in Section 8,
Rule 14 of the Rules of Court; (2) the party (de la Cruz), who was found in the unit, was neither a
representative, employee, nor a resident of the place; (3) the procedure prescribed by the Rules on
personal and substituted service of summons was ignored; (4) defendant was a resident of Singapore; and
(5) whatever judgment rendered in this case would be ineffective and futile.
During the hearing on the Motion to Dismiss, petitioner Manotoc presented Carlos Gonzales, who testified

that he saw defendant Manotoc as a visitor in Alexandra Homes only two times. He also identified the
Certification of Renato A. de Leon, which stated that Unit E-2104 was owned by Queens Park Realty, Inc.;
and at the time the Certification was issued, the unit was not being leased by anyone. Petitioner also
presented her Philippine passport and the Disembarkation/Embarkation Card 7 issued by the Immigration
Service of Singapore to show that she was a resident of Singapore. She claimed that the person referred to
in plaintiffs Exhibits "A" to "EEEE" as "Mrs. Manotoc" may not even be her, but the mother of Tommy
Manotoc, and granting that she was the one referred to in said exhibits, only 27 out of 109 entries referred
to Mrs. Manotoc. Hence, the infrequent number of times she allegedly entered Alexandra Homes did not at
all establish plaintiffs position that she was a resident of said place.
On the other hand, Agapita Trajano, for plaintiffs estate, presented Robert Swift, lead counsel for plaintiffs
in the Estate of Ferdinand Marcos Human Rights Litigation, who testified that he participated in the
deposition taking of Ferdinand R. Marcos, Jr.; and he confirmed that Mr. Marcos, Jr. testified that
petitioners residence was at the Alexandra Apartment, Greenhills. 8 In addition, the entries 9 in the logbook
of Alexandra Homes from August 4, 1992 to August 2, 1993, listing the name of petitioner Manotoc and the
Sheriffs Return, 10 were adduced in evidence.
On October 11, 1994, the trial court rejected Manotocs Motion to Dismiss on the strength of its findings that
her residence, for purposes of the Complaint, was Alexandra Homes, Unit E-2104, No. 29 Meralco Avenue,
Pasig, Metro Manila, based on the documentary evidence of respondent Trajano. The trial court relied on
the presumption that the sheriffs substituted service was made in the regular performance of official duty,
and such presumption stood in the absence of proof to the contrary. 11
On December 21, 1994, the trial court discarded Manotocs plea for reconsideration for lack of merit. 12
Undaunted, Manotoc filed a Petition for Certiorari and Prohibition 13 before the Court of Appeals (CA) on
January 20, 1995, docketed as CA-G.R. SP No. 36214 seeking the annulment of the October 11, 1994 and
December 21, 1994 Orders of Judge Aurelio C. Trampe.
Ruling of the Court of Appeals
On March 17, 1997, the CA rendered the assailed Decision, 14 dismissing the Petition for Certiorari and
Prohibition. The court a quo adopted the findings of the trial court that petitioners residence was at
Alexandra Homes, Unit E-2104, at No. 29 Meralco Avenue, Pasig, Metro Manila, which was also the
residence of her husband, as shown by the testimony of Atty. Robert Swift and the Returns of the
registered mails sent to petitioner. It ruled that the Disembarkation/Embarkation Card and the Certification
dated September 17, 1993 issued by Renato A. De Leon, Assistant Property Administrator of Alexandra
Homes, were hearsay, and that said Certification did not refer to July 1993the month when the
substituted service was effected.
In the same Decision, the CA also rejected petitioners Philippine passport as proof of her residency in
Singapore as it merely showed the dates of her departure from and arrival in the Philippines without
presenting the boilerplates last two (2) inside pages where petitioners residence was indicated. The CA
considered the withholding of those pages as suppression of evidence. Thus, according to the CA, the trial
court had acquired jurisdiction over petitioner as there was a valid substituted service pursuant to Section
8, Rule 14 of the old Revised Rules of Court.
On April 2, 1997, petitioner filed a Motion for Reconsideration
Resolution 16 dated October 8, 1997.

15

which was denied by the CA in its

Hence, petitioner has come before the Court for review on certiorari.
The Issues
Petitioner raises the following assignment of errors for the Courts consideration:
I. RESPONDENT COURT OF APPEALS COMMITTED [A] SERIOUS ERROR IN RENDERING THE
DECISION AND RESOLUTION IN QUESTION (ANNEXES A AND B) IN DEFIANCE OF LAW AND
JURISPRUDENCE IN RULING THAT THE TRIAL COURT ACQUIRED JURISDICTION OVER THE
PERSON OF THE PETITIONER THROUGH A SUBSTITUTED SERVICE OF SUMMONS IN
ACCORDANCE WITH SECTION 8, RULE 14 OF THE REVISED RULES OF COURT.

II. RESPONDENT COURT OF APPEALS COMMITTED [A] SERIOUS ERROR WHEN IT RULED THAT
THERE WAS A VALID SERVICE OF SUMMONS ON AN ALLEGED CARETAKER OF PETITIONERS
RESIDENCE IN COMPLETE DEFIANCE OF THE RULING IN CASTILLO VS. CFI OF BULACAN, BR. IV,
G.R. NO. L-55869, FEBRUARY 20, 1984, 127 SCRA 632 WHICH DEFINES THE PROPRIETY OF SUCH
SERVICE UPON MERE OVERSEERS OF PREMISES WHERE A PARTY SUPPOSEDLY RESIDES.
III. RESPONDENT COURT OF APPEALS COMMITTED [A] SERIOUS ERROR IN CONCLUDING THAT
THE RESIDENCE OF THE HUSBAND IS ALSO THE RESIDENCE OF HIS WIFE CONTRARY TO THE
RULING IN THE BANK OF THE PHILIPPINE ISLANDS VS. DE COSTER, G.R. NO. 23181, MARCH 16,
1925, 47 PHIL. 594.
IV. RESPONDENT COURT OF APPEALS COMMITTED [A] SERIOUS ERROR IN FAILING TO APPLY
THE RULE ON EXTRA-TERRITORIAL SERVICE OF SUMMONS UNDER SECTIONS 17 AND 18, RULE
14 OF THE REVISED RULES OF COURT. 17
The assigned errors bring to the fore the crux of the disagreementthe validity of the substituted service of
summons for the trial court to acquire jurisdiction over petitioner.
The Courts Ruling
We GRANT the petition.
Acquisition of Jurisdiction
Jurisdiction over the defendant is acquired either upon a valid service of summons or the defendants
voluntary appearance in court. When the defendant does not voluntarily submit to the courts jurisdiction or
when there is no valid service of summons, "any judgment of the court which has no jurisdiction over the
person of the defendant is null and void." 18 In an action strictly in personam, personal service on the
defendant is the preferred mode of service, that is, by handing a copy of the summons to the defendant in
person. If defendant, for excusable reasons, cannot be served with the summons within a reasonable
period, then substituted service can be resorted to. While substituted service of summons is permitted, "it is
extraordinary in character and in derogation of the usual method of service." 19 Hence, it must faithfully and
strictly comply with the prescribed requirements and circumstances authorized by the rules. Indeed,
"compliance with the rules regarding the service of summons is as much important as the issue of due
process as of jurisdiction." 20
Requirements for Substituted Service
Section 8 of Rule 14 of the old Revised Rules of Court which applies to this case provides:
SEC. 8. 21 Substituted service. If the defendant cannot be served within a reasonable time as provided in
the preceding section [personal service on defendant], service may be effected (a) by leaving copies of the
summons at the defendants residence with some person of suitable age and discretion then residing
therein, or (b) by leaving the copies at defendants office or regular place of business with some competent
person in charge thereof.
We can break down this section into the following requirements to effect a valid substituted service:
(1) Impossibility of Prompt Personal Service
The party relying on substituted service or the sheriff must show that defendant cannot be served promptly
or there is impossibility of prompt service. 22 Section 8, Rule 14 provides that the plaintiff or the sheriff is
given a "reasonable time" to serve the summons to the defendant in person, but no specific time frame is
mentioned. "Reasonable time" is defined as "so much time as is necessary under the circumstances for a
reasonably prudent and diligent man to do, conveniently, what the contract or duty requires that should be
done, having a regard for the rights and possibility of loss, if any[,] to the other party." 23 Under the Rules,
the service of summons has no set period. However, when the court, clerk of court, or the plaintiff asks the
sheriff to make the return of the summons and the latter submits the return of summons, then the validity of
the summons lapses. The plaintiff may then ask for an alias summons if the service of summons has failed.
24
What then is a reasonable time for the sheriff to effect a personal service in order to demonstrate
impossibility of prompt service? To the plaintiff, "reasonable time" means no more than seven (7) days

since an expeditious processing of a complaint is what a plaintiff wants. To the sheriff, "reasonable time"
means 15 to 30 days because at the end of the month, it is a practice for the branch clerk of court to require
the sheriff to submit a return of the summons assigned to the sheriff for service. The Sheriffs Return
provides data to the Clerk of Court, which the clerk uses in the Monthly Report of Cases to be submitted to
the Office of the Court Administrator within the first ten (10) days of the succeeding month. Thus, one
month from the issuance of summons can be considered "reasonable time" with regard to personal service
on the defendant.
Sheriffs are asked to discharge their duties on the service of summons with due care, utmost diligence, and
reasonable promptness and speed so as not to prejudice the expeditious dispensation of justice. Thus, they
are enjoined to try their best efforts to accomplish personal service on defendant. On the other hand, since
the defendant is expected to try to avoid and evade service of summons, the sheriff must be resourceful,
persevering, canny, and diligent in serving the process on the defendant. For substituted service of
summons to be available, there must be several attempts by the sheriff to personally serve the summons
within a reasonable period [of one month] which eventually resulted in failure to prove impossibility of
prompt service. "Several attempts" means at least three (3) tries, preferably on at least two different dates.
In addition, the sheriff must cite why such efforts were unsuccessful. It is only then that impossibility of
service can be confirmed or accepted.
(2) Specific Details in the Return
The sheriff must describe in the Return of Summons the facts and circumstances surrounding the
attempted personal service. 25 The efforts made to find the defendant and the reasons behind the failure
must be clearly narrated in detail in the Return. The date and time of the attempts on personal service, the
inquiries made to locate the defendant, the name/s of the occupants of the alleged residence or house of
defendant and all other acts done, though futile, to serve the summons on defendant must be specified in
the Return to justify substituted service. The form on Sheriffs Return of Summons on Substituted Service
prescribed in the Handbook for Sheriffs published by the Philippine Judicial Academy requires a narration
of the efforts made to find the defendant personally and the fact of failure. 26 Supreme Court Administrative
Circular No. 5 dated November 9, 1989 requires that "impossibility of prompt service should be shown by
stating the efforts made to find the defendant personally and the failure of such efforts," which should be
made in the proof of service.
(3) A Person of Suitable Age and Discretion
If the substituted service will be effected at defendants house or residence, it should be left with a person
of "suitable age and discretion then residing therein." 27 A person of suitable age and discretion is one who
has attained the age of full legal capacity (18 years old) and is considered to have enough discernment to
understand the importance of a summons. "Discretion" is defined as "the ability to make decisions which
represent a responsible choice and for which an understanding of what is lawful, right or wise may be
presupposed". 28 Thus, to be of sufficient discretion, such person must know how to read and understand
English to comprehend the import of the summons, and fully realize the need to deliver the summons and
complaint to the defendant at the earliest possible time for the person to take appropriate action. Thus, the
person must have the "relation of confidence" to the defendant, ensuring that the latter would receive or at
least be notified of the receipt of the summons. The sheriff must therefore determine if the person found in
the alleged dwelling or residence of defendant is of legal age, what the recipients relationship with the
defendant is, and whether said person comprehends the significance of the receipt of the summons and his
duty to immediately deliver it to the defendant or at least notify the defendant of said receipt of summons.
These matters must be clearly and specifically described in the Return of Summons.
(4) A Competent Person in Charge
If the substituted service will be done at defendants office or regular place of business, then it should be
served on a competent person in charge of the place. Thus, the person on whom the substituted service
will be made must be the one managing the office or business of defendant, such as the president or
manager; and such individual must have sufficient knowledge to understand the obligation of the defendant
in the summons, its importance, and the prejudicial effects arising from inaction on the summons. Again,
these details must be contained in the Return.
Invalid Substituted Service in the Case at Bar

Let us examine the full text of the Sheriffs Return, which reads:
THIS IS TO CERTIFY that on many occasions several attempts were made to serve the summons with
complaint and annexes issued by this Honorable Court in the above entitled case, personally upon the
defendant IMELDA IMEE MARCOS-MANOTOC located at Alexandra Condominium Corpration [sic] or
Alexandra Homes E-2 Room 104 No. 29 Merlaco [sic] Ave., Pasig, Metro-Manila at reasonable hours of the
day but to no avail for the reason that said defendant is usually out of her place and/or residence or
premises. That on the 15th day of July, 1993, substituted service of summons was resorted to in
accordance with the Rules of Court in the Philippines leaving copy of said summons with complaint and
annexes thru [sic] (Mr) Macky de la Cruz, caretaker of the said defendant, according to (Ms) Lyn Jacinto,
Receptionist and Telephone Operator of the said building, a person of suitable age and discretion, living
with the said defendant at the given address who acknowledged the receipt thereof of said processes but
he refused to sign (emphases supplied).
WHEREFORE, said summons is hereby returned to this Honorable Court of origin, duly served for its
record and information.
Pasig, Metro-Manila July 15, 1993. 29
A meticulous scrutiny of the aforementioned Return readily reveals the absence of material data on the
serious efforts to serve the Summons on petitioner Manotoc in person. There is no clear valid reason cited
in the Return why those efforts proved inadequate, to reach the conclusion that personal service has
become impossible or unattainable outside the generally couched phrases of "on many occasions several
attempts were made to serve the summons x x x personally," "at reasonable hours during the day," and "to
no avail for the reason that the said defendant is usually out of her place and/or residence or premises."
Wanting in detailed information, the Return deviates from the rulingin Domagas v. Jensen 30 and other
related cases 31that the pertinent facts and circumstances on the efforts exerted to serve the summons
personally must be narrated in the Return. It cannot be determined how many times, on what specific
dates, and at what hours of the day the attempts were made. Given the fact that the substituted service of
summons may be assailed, as in the present case, by a Motion to Dismiss, it is imperative that the pertinent
facts and circumstances surrounding the service of summons be described with more particularity in the
Return or Certificate of Service.
Besides, apart from the allegation of petitioners address in the Complaint, it has not been shown that
respondent Trajano or Sheriff Caelas, who served such summons, exerted extraordinary efforts to locate
petitioner. Certainly, the second paragraph of the Complaint only states that respondents were "informed,
and so [they] allege" about the address and whereabouts of petitioner. Before resorting to substituted
service, a plaintiff must demonstrate an effort in good faith to locate the defendant through more direct
means. 32 More so, in the case in hand, when the alleged petitioners residence or house is doubtful or has
not been clearly ascertained, it would have been better for personal service to have been pursued
persistently.
In the case Umandap v. Sabio, Jr., 33 it may be true that the Court held that a Sheriffs Return, which states
that "despite efforts exerted to serve said process personally upon the defendant on several occasions the
same proved futile," conforms to the requirements of valid substituted service. However, in view of the
numerous claims of irregularities in substituted service which have spawned the filing of a great number of
unnecessary special civil actions of certiorari and appeals to higher courts, resulting in prolonged litigation
and wasteful legal expenses, the Court rules in the case at bar that the narration of the efforts made to find
the defendant and the fact of failure written in broad and imprecise words will not suffice. The facts and
circumstances should be stated with more particularity and detail on the number of attempts made at
personal service, dates and times of the attempts, inquiries to locate defendant, names of occupants of the
alleged residence, and the reasons for failure should be included in the Return to satisfactorily show the
efforts undertaken. That such efforts were made to personally serve summons on defendant, and those
resulted in failure, would prove impossibility of prompt personal service.
Moreover, to allow sheriffs to describe the facts and circumstances in inexact terms would encourage
routine performance of their precise duties relating to substituted servicefor it would be quite easy to
shroud or conceal carelessness or laxity in such broad terms. Lastly, considering that monies and
properties worth millions may be lost by a defendant because of an irregular or void substituted service, it is
but only fair that the Sheriffs Return should clearly and convincingly show the impracticability or
hopelessness of personal service.

Granting that such a general description be considered adequate, there is still a serious nonconformity from
the requirement that the summons must be left with a "person of suitable age and discretion" residing in
defendants house or residence. Thus, there are two (2) requirements under the Rules: (1) recipient must
be a person of suitable age and discretion; and (2) recipient must reside in the house or residence of
defendant. Both requirements were not met. In this case, the Sheriffs Return lacks information as to
residence, age, and discretion of Mr. Macky de la Cruz, aside from the sheriffs general assertion that de la
Cruz is the "resident caretaker" of petitioner as pointed out by a certain Ms. Lyn Jacinto, alleged
receptionist and telephone operator of Alexandra Homes. It is doubtful if Mr. de la Cruz is residing with
petitioner Manotoc in the condominium unit considering that a married woman of her stature in society
would unlikely hire a male caretaker to reside in her dwelling. With the petitioners allegation that Macky de
la Cruz is not her employee, servant, or representative, it is necessary to have additional information in the
Return of Summons. Besides, Mr. Macky de la Cruzs refusal to sign the Receipt for the summons is a
strong indication that he did not have the necessary "relation of confidence" with petitioner. To protect
petitioners right to due process by being accorded proper notice of a case against her, the substituted
service of summons must be shown to clearly comply with the rules.
It has been stated and restated that substituted service of summons must faithfully and strictly comply with
the prescribed requirements and in the circumstances authorized by the rules. 34
Even American case law likewise stresses the principle of strict compliance with statute or rule on
substituted service, thus:
The procedure prescribed by a statute or rule for substituted or constructive service must be strictly
pursued. 35 There must be strict compliance with the requirements of statutes authorizing substituted or
constructive service. 36
Where, by the local law, substituted or constructive service is in certain situations authorized in the place of
personal service when the latter is inconvenient or impossible, a strict and literal compliance with the
provisions of the law must be shown in order to support the judgment based on such substituted or
constructive service. 37 Jurisdiction is not to be assumed and exercised on the general ground that the
subject matter of the suit is within the power of the court. The inquiry must be as to whether the requisites
of the statute have been complied with, and such compliance must appear on the record. 38 The fact that
the defendant had actual knowledge of attempted service does not render the service effectual if in fact the
process was not served in accordance with the requirements of the statute. 39
Based on the above principles, respondent Trajano failed to demonstrate that there was strict compliance
with the requirements of the then Section 8, Rule 14 (now Section 7, Rule 14 of the 1997 Rules of Civil
Procedure).
Due to non-compliance with the prerequisites for valid substituted service, the proceedings held before the
trial court perforce must be annulled.
The court a quo heavily relied on the presumption of regularity in the performance of official duty. It reasons
out that "[t]he certificate of service by the proper officer is prima facie evidence of the facts set out herein,
and to overcome the presumption arising from said certificate, the evidence must be clear and convincing."
40

The Court acknowledges that this ruling is still a valid doctrine. However, for the presumption to apply, the
Sheriffs Return must show that serious efforts or attempts were exerted to personally serve the summons
and that said efforts failed. These facts must be specifically narrated in the Return. To reiterate, it must
clearly show that the substituted service must be made on a person of suitable age and discretion living in
the dwelling or residence of defendant. Otherwise, the Return is flawed and the presumption cannot be
availed of. As previously explained, the Return of Sheriff Caelas did not comply with the stringent
requirements of Rule 14, Section 8 on substituted service.
In the case of Venturanza v. Court of Appeals, 41 it was held that "x x x the presumption of regularity in the
performance of official functions by the sheriff is not applicable in this case where it is patent that the
sheriffs return is defective (emphasis supplied)." While the Sheriffs Return in the Venturanza case had no
statement on the effort or attempt to personally serve the summons, the Return of Sheriff Caelas in the
case at bar merely described the efforts or attempts in general terms lacking in details as required by the
ruling in the case of Domagas v. Jensen and other cases. It is as if Caelas Return did not mention any

effort to accomplish personal service. Thus, the substituted service is void.

On the issue whether petitioner Manotoc is a resident of Alexandra Homes, Unit E-2104, at No. 29 Meralco
Avenue, Pasig City, our findings that the substituted service is void has rendered the matter moot and
academic. Even assuming that Alexandra Homes Room 104 is her actual residence, such fact would not
make an irregular and void substituted service valid and effective.
IN VIEW OF THE FOREGOING, this Petition for Review is hereby GRANTED and the assailed March 17,
1997 Decision and October 8, 1997 Resolution of the Court of Appeals and the October 11, 1994 and
December 21, 1994 Orders of the Regional Trial Court, National Capital Judicial Region, Pasig City, Branch
163 are hereby REVERSED and SET ASIDE.No costs.
SO ORDERED.

THIRD DIVISION
G.R. No. 177007

July 14, 2009

SANSIO PHILIPPINES, INC., Petitioner,

vs.
SPOUSES ALICIA AND LEODEGARIO MOGOL, JR., Respondents.
DECISION
CHICO-NAZARIO, J.:
Challenged in this Petition for Review on Certiorari1 under Rule 45 of the Rules of Court are the Decision2
dated 21 November 2006 and the Resolution3 dated 12 March 2007 of the Court of Appeals in CA-G.R. SP
No. 70029. The assailed Decision reversed and set aside the Order4 dated 18 January 2002 of the
Regional Trial Court (RTC) of Manila, Branch 33, in Civil Case No. 01-101267, which dismissed the Petition
for Certiorari, Prohibition and/or Injunction filed by herein respondent spouses Alicia and Leodegario Mogol,
Jr. against herein petitioner Sansio Philippines, Inc. and Judge Severino B. de Castro, Jr. of the
Metropolitan Trial Court (MeTC) of Manila, Branch 25. The assailed Resolution of the Court of Appeals
denied the Motion for Reconsideration of its earlier Decision.
Petitioner Sansio Philippines, Inc. is a domestic corporation that is engaged in the business of
manufacturing and selling appliances and other related products.
On 12 July 2000, petitioner filed a Complaint for Sum of Money and Damages5 against respondent spouses
Mogol before the MeTC of Manila. The case was docketed as Civil Case No. 167879CV and was raffled to
Branch 25 of said court.
Petitioner stated in the Complaint that respondent spouses Alicia and Leodegario Mogol, Jr. were the
owners and managers of MR Homes Appliances, with residence at 1218 Daisy St., Employee Village,
Lucena City, where summons and other written legal processes of the court may be served. Petitioner
further alleged that on 15 November 1993 and 27 January 1994, respondent spouses Mogol purchased
from petitioner air-conditioning units and fans worth P217,250.00 and P5,521.20, respectively. Respondent
spouses Mogol apparently issued postdated checks as payment therefor, but said checks were dishonored,
as the account against which the checks were drawn was closed. Respondent spouses Mogol made partial
payments, leaving a balance of P87,953.12 unpaid. Despite several demands by petitioner, respondent
spouses Mogol failed to settle their obligation. Thus, petitioner prayed that respondent spouses Mogol be
ordered to pay the former, jointly and severally, the amount of P87,953.12, with legal interest; as well as
attorneys fees in the sum of twenty-five (25%) percent of the amount collectible, plus P2,000.00 for every
appearance in court; and costs of suit.

On 3 October 2000, at the request of herein petitioner, the process server of the MeTC of Manila served
the summons6 and the copy of the complaint on respondent spouses Mogol at the courtroom of the MeTC
of Manila, Branch 24. Respondent spouses were in the said premises, as they were waiting for the
scheduled hearing of the criminal cases filed by petitioner against respondent Alicia Mogol for violations of
Batas Pambansa Blg. 22. Upon being so informed of the summons and the complaint, respondent spouses
Mogol referred the same to their counsel, who was also present in the courtroom. The counsel of
respondent spouses Mogol took hold of the summons and the copy of the complaint and read the same.7
Thereafter, he pointed out to the process server that the summons and the copy of the complaint should be
served only at the address that was stated in both documents, i.e., at 1218 Daisy St., Employee Village,
Lucena City, and not anywhere else. The counsel of respondent spouses Mogol apparently gave back the
summons and the copy of the complaint to the process server and advised his clients not to obtain a copy
and sign for the same. As the process server could not convince the respondent spouses Mogol to sign for
the aforementioned documents, he proceeded to leave the premises of the courtroom.
On 4 October 2000, the process server of the MeTC of Manila issued a Return on Service of Summons,8
declaring that:
RETURN ON SERVICE OF SUMMONS
This is to certify that on October 3, 2000, the undersigned tried to serve a copy of the Summons issued by
the Court in the above-entitled case together with a copy of Complaint upon defendant Leodegario Mogol[,]
Jr. and Alicia Mogol doing business under the name/style of "Mr. Homes Appliance" (sic) at MTC (sic)
Branch 24 Ongpin (sic) (courtroom) as requested by plaintiff counsel, but failed for the reason that they
refused to received (sic) with no valid reason at all.
The original and duplicate copies of the Summons are hereby respectfully returned, (sic) UNSERVED.
Manila, Philippines, October 4, 2000.
(signed)
ALFONSO S. VALINO
Process Server (Emphases ours.)
Motion to Declare in Default
On 6 December 2000, petitioner filed a Motion to Declare [Respondents] in Default.9 Petitioner averred that
the summons and the copy of the complaint were already validly served upon the respondent spouses
Mogol at the courtroom of the MeTC, Branch 24, which they refused to accept for no valid reason at all.
From the date of said service up to the time of the filing of the above-stated motion, respondent spouses
Mogol had yet to file any responsive pleading. Petitioner, thus, prayed that judgment be rendered against
respondent spouses Mogol, and that the relief prayed for in its Complaint be granted.
On 15 December 2000, through a special appearance of their counsel, respondent spouses Mogol filed an
Opposition10 to the Motion to Declare [Respondents] in Default. They posited that Section 3, Rule 611 of the
Rules of Court requires that the complaint must contain the names and residences of the plaintiff and
defendant. Therefore, the process server should have taken notice of the allegation of the complaint, which
referred to the address of respondent spouses Mogol wherein court processes may be served. If such
service, as alleged in the complaint, could not be complied with within a reasonable time, then and only
then may the process server resort to substituted service. Respondent spouses Mogol further averred that
there was no quarrel as to the requirement that the respondents must be served summons in person and, if
they refused to receive and sign for it, by tendering it to them. They merely reiterated that the service
should have been effected at the respondent spouses residential address, as stated in the summons and
the copy of the complaint.
On 6 April 2001, the MeTC of Manila, Branch 25, issued an Order,12 the fallo of which provides:
WHEREFORE, premises considered, the Motion to Declare [Respondents] in Default dated December 5,
2000 filed by counsel for [petitioner] is hereby granted. ACCORDINGLY, [respondents] Leodegario Mogol,
Jr. and Alicia Mogol are hereby declared in default and [petitioner] is hereby allowed to present its evidence

ex-parte (sic) before the Branch Clerk of Court on May 25, 2001 at 8:30 a.m. (Emphasis ours.)
The MeTC of Manila, Branch 25 ruled that Section 6, Rule 1413 of the Rules of Court does not specify
where service is to be effected. For obvious reasons, because service of summons is made by handing a
copy thereof to the defendant in person, the same may be undertaken wherever the defendant may be
found. Although the Return on the Service of Summons indicated that the original and the duplicate copies
thereof were returned "UNSERVED," the same could not be taken to mean that respondent spouses Mogol
had not yet been served with summons. That allegation in the return was clearly prompted by the statement
in the first paragraph thereof that respondents spouses Mogol "refused to received (sic) [the summons and
the copy of the complaint] with no valid reason at all." Respondent spouses Mogol were, thus, validly
served with summons and a copy of the complaint. For failing to file any responsive pleading before the
lapse of the reglementary period therefor, the Motion to Declare [Respondents] in Default filed by petitioner
was declared to be meritorious.
Respondent spouses Mogol filed a Motion for Reconsideration14 on the above Order, but the same was
denied by the MeTC of Manila, Branch 25, in an Order15 dated 11 June 2001.
On 17 July 2001, respondent spouses Mogol filed a Petition for Certiorari, Prohibition and/or Injunction16
before the RTC of Manila against Judge Severino B. de Castro, Jr. of the MeTC of Manila, Branch 25 and
herein petitioner. Said petition was docketed as Civil Case No. 01-101267 and raffled to Branch 33 thereof.
Respondent spouses Mogol insisted there was no valid service of summons per return of the process
server, which was binding on the MeTC judge, who did not acquire jurisdiction over the persons of
respondent spouses. They contended that the MeTC of Manila, Branch 25, acted with grave abuse of
discretion amounting to lack or excess of jurisdiction in declaring them in default in Civil Case No.
167879CV, thereby depriving them of their right to be heard with due process of law, despite their having a
good defense against petitioners complaint. Respondent spouses Mogol prayed that the Orders dated 6
April 2001 and 11 June 2001 of the MeTC of Manila, Branch 25, be declared null and void.
On 18 January 2002, the RTC of Manila, Branch 33, issued an Order, disposing of the petition in this wise:
WHEREFORE, viewed from the foregoing observations and findings, the present petition is hereby
DISMISSED for lack of merit.17
The RTC of Manila, Branch 33, held that Section 6, Rule 14 of the Rules of Court does not mandate that
summons be served strictly at the address provided by the plaintiff in the complaint. Contrarily, said
provision states that the service of summons may be made wherever such is possible and practicable.
Therefore, it did not matter much that the summons and the copy of the complaint in this case were served
inside the courtroom of the MeTC of Manila, Branch 24, instead of the address at 1218 Daisy St.,
Employee Village, Lucena City. The primordial consideration was that the service of summons was made in
the person of the respondent spouses Mogol in Civil Case No. 167879CV. Lastly, the RTC of Manila,
Branch 33, did not find any error in the interpretation of the MeTC of Manila, Branch 25, that summons had
indeed been served on respondent spouses Mogol. On the face of the Return on Service of Summons, it
was unmistakable that the summons and the copy of the complaint were served on respondent spouses,
and that they refused to receive the same for no valid reason at all.
Respondent spouses Mogol filed a Notice of Appeal18 on the above-mentioned Order of the RTC of Manila,
Branch 33, which was given due course. The appeal was docketed in the Court of Appeals as CA-G.R. SP
No. 70029.
On 21 November 2006, the Court of Appeals rendered the assailed Decision in CA-G.R. SP No. 70029, the
relevant portions of which read:
We find the appeal meritorious.
After a careful perusal of the records, We hold that there was no valid service of summons upon the
[respondent] Mogol spouses in Civil Case No. 167879. Perforce, the MeTC [Branch 25] never acquired
jurisdiction over them. We explain.
xxxx

In this case, it is indubitable that the [respondent] Mogol spouses, as defendants in Civil Case No. 167879,
never received the summons against them, whether personally or by substituted service. As stated earlier,
the process server failed to effect personal service of summons against the [respondent] Mogol spouses at
the courtroom of the MeTC of Manila, Branch 24, because the latter refused to receive it, arguing that the
same should be served at their residence, and not anywhere else.
Concomitant to the trial courts duty to bring the defendant within its jurisdiction by the proper service of
summons is its duty to apprise the plaintiff, as in the case of [petitioner] Sansio, whether or not the said
summons was actually served upon the defendant. The proof of service of summons (or the lack of it)
alluded to by the rules is found in Sec. 4, Rule 14 of the Revised Rules of Court, to wit:
SECTION 4. Return. When the service has been completed, the server shall, within five (5) days
therefrom, serve a copy of the return, personally or by registered mail, to the plaintiffs counsel, and shall
return the summons to the clerk who issued it, accompanied by proof of service.
In this case, the process servers Return of Service of Summons states, in clear and unequivocal terms,
that:
The original and duplicate copies of the Summons are hereby returned, UNSERVED.
In the case of Spouses Madrigal v. Court of Appeals [G.R. No. 129955, 26 November 1999], it was held
that the sheriffs certificate of service of summons is prima facie evidence of the facts therein set out. In the
absence of contrary evidence, a presumption exists that a sheriff has regularly performed his official duties.
To overcome the presumption arising from the sheriffs certificate, the evidence must be clear and
convincing. In the instant case, no proof of irregularity in the process servers return was shown by Sansio.
A perusal of the said return readily shows that the summons was unserved upon the Mogol spouses. From
the foregoing, We hold that the Mogol spouses were never in actual receipt of the summons in Civil Case
167879. Perforce, the trial court did not acquire jurisdiction over them.
In one case, the Supreme Court ruled that the refusal of a defendant to receive the summons is a
technicality resorted to in an apparent attempt to frustrate the ends of justice. It is precisely for this reason
that the rules provide a remedy that, in case the defendant refuses to receive and sign for it, [the same is
served] by tendering it to him. Moreover, even if tender of summons upon the defendant proves futile, the
trial court may further resort to substituted service of summons, as provided under Sec. 7, Rule 14 of the
Revised Rules of Court.
Stated otherwise, the trial court is not left with any other remedy in case the defendant refuses to receive
and sign for his receipt of the summons, as in this case. Unfortunately, however, after the incident at the
courtroom of the MeTC of Manila, Branch 24, there was no longer any further effort on the part of the trial
court to serve anew the summons, together with a copy of the complaint, upon the Mogol spouses. Instead,
the trial court assumed jurisdiction over the Mogol spouses; declared them in default for failure to file any
responsive pleading; and, (sic) allowed Sansio to present its evidence ex parte in Civil Case No. 167879.
xxxx
All told, it is clearly established that there was indeed no valid service of summons upon the Mogol spouses
in Civil Case No. 167879. Consequently, the MeTC of Manila, Branch 24 did not acquire jurisdiction over
their persons. Perforce, the order declaring them in default in the said civil case is nugatory and without
effect, as it was issued with grave abuse of discretion amounting to lack or in excess of jurisdiction.19
(Emphases ours.)
Thus, the Court of Appeals decreed:
WHEREFORE, premises considered, the Appeal is hereby GRANTED. The assailed Order dated January
18, 2002 of the Regional Trial Court (RTC) of Manila, National Capital Judicial Region, Branch 33, in SP
Civil Case No. 01-101267 is hereby REVERSED and SET ASIDE. Accordingly, the Order dated April 6,
2001 of the Metropolitan Trial Court (MeTC) of Manila, Branch 25, in Civil Case No. 167879 is declared
NULL and VOID. No pronouncement as to costs.20
Petitioner filed a Motion for Reconsideration21 thereon, but the same was denied by the Court of Appeals in
the assailed Resolution22 dated 12 March 2007.

Complaint for Sum of Money and Damages

In the interregnum, on 3 August 2001, petitioner presented its evidence ex parte in the main case. On the
basis thereof, on 17 August 2001, the MeTC of Manila, Branch 25, rendered a Decision, adjudging that
petitioner had sufficiently established its entitlement to the grant of the reliefs prayed for in its Complaint.
The decretal portion of the Decision states:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the [petitioner] and against
the [respondent spouses Mogol], ordering the latter to pay the former jointly and severally the sum of
P87,953.12 with interest thereon at the legal rate from date of demand until the same is fully paid; the sum
equivalent to 25% of the amount due as and by way of attorneys fees, and the cost of suit.23 (Emphasis
ours.)
Respondent spouses Mogol appealed24 the above Decision to the RTC of Manila. The appeal was
docketed as Civil Case No. 01-101963 and was raffled to Branch 50 of the trial court.
On 19 March 2004, the RTC of Manila, Branch 50, promulgated its Decision,25 affirming in toto the Decision
of the MeTC of Manila, Branch 25. The RTC declared that Section 6, Rule 14 of the Rules of Court clearly
reveals that there is no requirement that the summons should only be served in the place stated in the
summons. What is required is that a summons must be served by handing a copy thereof to the defendant
in person, or, if he refuses to receive and sign for it, by tendering it to him. Under the circumstances of the
case, the service of the copy of the summons and the complaint inside the courtroom of the MeTC of
Manila, Branch 24 was the most practicable act. The process server need not wait for the respondent
spouses Mogol to reach their given address before he could serve on the latter with summons and the copy
of the complaint. The refusal of respondent spouses Mogol to receive the summons without valid cause
was, thus, equivalent to a valid service of summons that vested jurisdiction in the MeTC of Manila, Branch
25.
Respondent spouses Mogol sought a reconsideration of the aforesaid Decision, but the RTC of Manila,
Branch 50, denied the same in an Order26 dated 4 October 2004, finding no cogent reason to disturb its
earlier judgment. Thereafter, respondent spouses Mogol no longer filed any appeal on the above Decision
of the RTC of Manila, Branch 50.
On 26 April 2007, petitioner filed the instant Petition for Review, questioning the rulings of the Court of
Appeals in CA-G.R. SP No. 70029 and raising for resolution the following legal issues:
1. Whether or not the service of summons in the courtroom, before the hearing, [was] a valid service of
summons;
2. Whether or not the clause "tendering it to him" when the defendant refuses to receive and sign for the
summons under Section 6, Rule 14 of the Rules of Court means "leaving a copy of the summons to her or
in the premises where the defendant could get it";
3. Whether or not summons refused to be received by [respondent spouses Mogol], upon advice of their
counsel, need to be served anew to them;
4. Whether or not the court is bound by the conclusions of the Process Server in his Return of Service of
Summons; and
5. Whether or not the appeal before the Court of Appeals denying the Petition for Certiorari, Prohibition and
Injunction has become moot and academic when the [RTC of Manila, Branch 50] rendered a Decision
affirming the Decision of the [MeTC of Manila, Branch 25], and which Decision of the [RTC of Manila,
Branch 50] has become final and executory.
Contrary to the ruling of the Court of Appeals, petitioner argues that the service of summons inside the
courtroom of the MeTC of Manila, Branch 24, was already valid. Such was a more practicable and
convenient procedure, as opposed to requesting the process server to serve the summons and the copy of
the complaint upon the respondent spouses Mogol at their residence in Lucena City. Petitioner further
contends that, when the respondent spouses Mogol declined to receive and sign for the summons,
tendering of the same was sufficient, and the summons need not be served anew. Section 6, Rule 14 of the
Rules of Court does not state that the personal service of summons fails because the defendant refuses to

receive and sign for it. As regards the Return on Service of Summons, petitioner claims that the second
paragraph thereof was a mere conclusion of law, which does not bind the independent conclusion of the
courts. Although the second paragraph stated that the summons was returned UNSERVED, the first
paragraph clearly indicated that, indeed, the summons and the copy of the complaint were already
personally served upon the Mogol spouses. They merely refused to receive them for no valid reasons.
Finally, petitioner asserts that the assailed Decision dated 21 November 2006 of the Court of Appeals has
already become moot and academic. The Decision dated 19 March 2004 of the RTC of Manila, Branch 50,
in Civil Case No. 01-101963, which affirmed the Decision of the MeTC of Manila, Branch 25, on the merits
of the case has since become final and executory for failure of respondent spouses Mogol to interpose an
appeal of the same before the Court of Appeals.
We find merit in the petition.
A summons is a writ by which the defendant is notified of the action brought against him or her. In a civil
action, jurisdiction over the defendant is acquired either upon a valid service of summons or the
defendant's voluntary appearance in court. When the defendant does not voluntarily submit to the court's
jurisdiction, or when there is no valid service of summons, any judgment of the court, which has no
jurisdiction over the person of the defendant, is null and void.27 Where the action is in personam, i.e., one
that seeks to impose some responsibility or liability directly upon the person of the defendant through the
judgment of a court,28 and the defendant is in the Philippines, the service of summons may be made
through personal or substituted service in the manner provided for in Sections 6 and 7, Rule 14 of the
Rules of Court, which read:
SEC. 6. Service in person on defendant. Whenever practicable, the summons shall be served by handing
a copy thereof to the defendant in person, or, if he refuses to receive and sign for it, by tendering it to him.
SEC. 7. Substituted service. If, for justifiable causes, the defendant cannot be served within a reasonable
time as provided in the preceding section, service may be effected (a) by leaving copies of the summons at
the defendants residence with some person of suitable age and discretion then residing therein; or (b) by
leaving the copies at defendants office or regular place of business with some competent person in charge
thereof.
It is well-established that summons upon a respondent or a defendant must be served by handing a copy
thereof to him in person or, if he refuses to receive it, by tendering it to him. Personal service of summons
most effectively ensures that the notice desired under the constitutional requirement of due process is
accomplished.29 The essence of personal service is the handing or tendering of a copy of the summons to
the defendant himself,30 wherever he may be found; that is, wherever he may be, provided he is in the
Philippines.31
In the instant case, the Court finds that there was already a valid service of summons in the persons of
respondent spouses Mogol. To recapitulate, the process server presented the summons and the copy of
the complaint to respondent spouses at the courtroom of the MeTC of Manila, Branch 24. The latter
immediately referred the matter to their counsel, who was present with them in the aforesaid courtroom. At
the express direction of his clients, the counsel took the summons and the copy of the complaint, read the
same, and thereby informed himself of the contents of the said documents. Ineluctably, at that point, the act
of the counsel of respondent spouses Mogol of receiving the summons and the copy of the complaint
already constituted receipt on the part of his clients, for the same was done with the latters behest and
consent. Already accomplished was the operative act of "handing" a copy of the summons to respondent
spouses in person. Thus, jurisdiction over the persons of the respondent spouses Mogol was already
acquired by the MeTC of Manila, Branch 25. That being said, the subsequent act of the counsel of
respondent spouses of returning the summons and the copy of the complaint to the process server was no
longer material.
Furthermore, the instruction of the counsel for respondent spouses not to obtain a copy of the summons
and the copy of the complaint, under the lame excuse that the same must be served only in the address
stated therein, was a gross mistake. Section 6, Rule 14 of the Rules of Court does not require that the
service of summons on the defendant in person must be effected only at the latters residence as stated in
the summons. On the contrary, said provision is crystal clear that, whenever practicable, summons shall be
served by handing a copy thereof to the defendant; or if he refuses to receive and sign for it, by tendering it
to him. Nothing more is required. As correctly held by the RTC of Manila, Branch 50, the service of the copy
of the summons and the complaint inside the courtroom of the MeTC of Manila, Branch 24 was the most

practicable act under the circumstances, and the process server need not wait for respondent spouses
Mogol to reach their given address, i.e., at 1218 Daisy St., Employee Village, Lucena City, before he could
serve on the latter the summons and the copy of the complaint. Due to the distance of the said address,
service therein would have been more costly and would have entailed a longer delay on the part of the
process server in effecting the service of the summons.
Much more important than considerations of practicality, however, is the fact that respondent spouses
Mogol based their case on a wrong appreciation of the above-stated provisions of the Rules of Court.
Respondent spouses Mogol principally argue that Section 6 of Rule 14 cannot be singled out without
construing the same with Section 7. They posit that, in a civil case, summons must be served upon the
defendants personally at the designated place alleged in the complaint. If the defendants refuse to receive
and sign the summons, then the process server must tender the same to them by leaving a copy at the
residence of the defendants. If the summons cannot be served in person because of the absence of the
defendants at the address stated, then the same can be served by (1) leaving copies of the summons at
the defendants residence with some person of suitable age and discretion residing therein, or (2) leaving
the copies at defendants office or regular place of business with some competent person in charge thereof.
Said arguments must fail, for they have no leg to stand on.
Axiomatically, Sections 6 and 7 of Rule 14 of the Rules of Court cannot be construed to apply
simultaneously. Said provisions do not provide for alternative modes of service of summons, which can
either be resorted to on the mere basis of convenience to the parties. Under our procedural rules, service of
summons in the persons of the defendants is generally preferred over substituted service.32 Substituted
service derogates the regular method of personal service. It is an extraordinary method, since it seeks to
bind the respondent or the defendant to the consequences of a suit, even though notice of such action is
served not upon him but upon another whom the law could only presume would notify him of the pending
proceedings.33 For substituted service to be justified, the following circumstances must be clearly
established: (a) personal service of summons within a reasonable time was impossible; (b) efforts were
exerted to locate the party; and (c) the summons was served upon a person of sufficient age and discretion
residing at the partys residence or upon a competent person in charge of the partys office or place of
business.34
Relevantly, in Lazaro v. Rural Bank of Francisco Balagtas (Bulacan), Inc.,35 very categorical was our
statement that the service of summons to be done personally does not mean that service is possible only at
the defendants actual residence. It is enough that the defendant is handed a copy of the summons in
person by anyone authorized by law. This is distinct from substituted service under Section 7, Rule 14 of
the Rules of Court. As already discussed above, there was already a valid service of summons in the
persons of respondent spouses Mogol in the courtroom of the MeTC of Manila, Branch 24, when their
counsel, upon their explicit instructions, received and read the same on their behalf. Contrary to the ruling
of the Court of Appeals, the fact that the summons was returned to the process server and respondent
spouses Mogul subsequently declined to sign for them did not mean that the service of summons in the
persons of respondent spouses was a failure, such that a further effort was required to serve the summons
anew. A tender of summons, much less, a substituted service of summons, need no longer be resorted to
in this case.
Indeed, a contrary ruling by this Court would inevitably give every future defendant to a case the
unwarranted means to easily thwart the cardinal procedures for the service of summons at the simple
expedient of returning the summons and the copy of the complaint to the process server and refusing to
sign for the same even after being already informed of their contents. This the Court will never allow.
As to the reliance of the Court of Appeals on the second paragraph of the Return on Service of Summons
stating that the original and duplicate copies of the Summons were returned "UNSERVED," the Court finds
the same utterly misplaced. A simple reading of the first paragraph of the Return on Service of Summons,
which contains the circumstances surrounding the service of the summons on the persons of the
respondent spouses Mogol, manifestly reveals that the summons and the copy of the complaint were
already validly served on the said respondents. They merely refused to receive or obtain a copy of the
same. The certificate of service of the process server is prima facie evidence of the facts as set out therein.
This is fortified by the presumption of the regularity of performance of official duty. To overcome the
presumption of regularity of official functions in favor of such sheriffs return, the evidence against it must be
clear and convincing. Sans the requisite quantum of proof to the contrary, the presumption stands
deserving of faith and credit.36 In the instant case, it is worthwhile to note that the facts stated in the first

paragraph of the Return on Service of Summons were not at all disputed by the respondent spouses
Mogol.
Although We find lamentable the apparently erroneous statement made by the process server in the
aforesaid second paragraph an error that undoubtedly added to the confusion of the parties to this case
the same was, nonetheless, a mere conclusion of law, which does not bind the independent judgment of
the courts. Indeed, it cannot be said that because of such a statement, respondent spouses Mogol had the
right to rely on said return informing them that the summons had been unserved, thus justifying their nonfiling of any responsive pleading. To reiterate, respondent spouses Mogol were validly served summons
and a copy of the complaint against them. At their explicit instructions, their counsel read the same and
thereby learned of the nature of the claim against them. After being made aware of the complaint filed
against them, they chose not to obtain a copy thereof and pretended that it did not exist. They, thus, took a
gamble in not filing any responsive pleading thereto. Suffice it to say, they lost. The constitutional
requirement of due process exacts that the service be such as may be reasonably expected to give the
notice desired. Once the service provided by the rules reasonably accomplishes that end, the requirement
of justice is answered; the traditional notions of fair play are satisfied and due process is served.37
In fine, we rule that jurisdiction over the persons of the respondent spouses Mogol was validly acquired by
the MeTC, Branch 25 in this case. For their failure to file any responsive pleading to the Complaint filed
against them, in violation of the order of the said court as stated in the summons, respondent spouses
Mogol were correctly declared in default.
WHEREFORE, premises considered, the Petition for Review on Certiorari under Rule 45 is GRANTED.
The Decision dated 21 November 2006 and the Resolution dated 12 March 2007 of the Court of Appeals in
CA-G.R. SP No. 70029 are hereby REVERSED AND SET ASIDE. The Order dated 18 January 2002 of the
Regional Trial Court of Manila, Branch 33, in Civil Case No. 01-101267 is hereby AFFIRMED. No costs.
SO ORDERED.

FIRST DIVISION
G.R. No. 170281

January 18, 2008

REPUBLIC OF THE PHILIPPINES, represented by the ANTI-MONEY LAUNDERING COUNCIL,

petitioner,
vs.
GLASGOW CREDIT AND COLLECTION SERVICES, INC. and CITYSTATE SAVINGS BANK, INC.,
respondents.
DECISION
CORONA, J.:
This is a petition for review1 of the order2 dated October 27, 2005 of the Regional Trial Court (RTC) of
Manila, Branch 47, dismissing the complaint for forfeiture3 filed by the Republic of the Philippines,
represented by the Anti-Money Laundering Council (AMLC) against respondents Glasgow Credit and
Collection Services, Inc. (Glasgow) and Citystate Savings Bank, Inc. (CSBI).
On July 18, 2003, the Republic filed a complaint in the RTC Manila for civil forfeiture of assets (with urgent
plea for issuance of temporary restraining order [TRO] and/or writ of preliminary injunction) against the
bank deposits in account number CA-005-10-000121-5 maintained by Glasgow in CSBI. The case, filed
pursuant to RA 9160 (the Anti-Money Laundering Act of 2001), as amended, was docketed as Civil Case
No. 03-107319.
Acting on the Republics urgent plea for the issuance of a TRO, the executive judge4 of RTC Manila issued

a 72-hour TRO dated July 21, 2003. The case was thereafter raffled to Branch 47 and the hearing on the
application for issuance of a writ of preliminary injunction was set on August 4, 2003.
After hearing, the trial court (through then Presiding Judge Marivic T. Balisi-Umali) issued an order granting
the issuance of a writ of preliminary injunction. The injunctive writ was issued on August 8, 2003.
Meanwhile, summons to Glasgow was returned "unserved" as it could no longer be found at its last known
address.
On October 8, 2003, the Republic filed a verified omnibus motion for (a) issuance of alias summons and (b)
leave of court to serve summons by publication. In an order dated October 15, 2003, the trial court directed
the issuance of alias summons. However, no mention was made of the motion for leave of court to serve
summons by publication.
In an order dated January 30, 2004, the trial court archived the case allegedly for failure of the Republic to
serve the alias summons. The Republic filed an ex parte omnibus motion to (a) reinstate the case and (b)
resolve its pending motion for leave of court to serve summons by publication.
In an order dated May 31, 2004, the trial court ordered the reinstatement of the case and directed the
Republic to serve the alias summons on Glasgow and CSBI within 15 days. However, it did not resolve the
Republics motion for leave of court to serve summons by publication declaring:
Until and unless a return is made on the alias summons, any action on [the Republics] motion for leave of
court to serve summons by publication would be untenable if not premature.
On July 12, 2004, the Republic (through the Office of the Solicitor General [OSG]) received a copy of the
sheriffs return dated June 30, 2004 stating that the alias summons was returned "unserved" as Glasgow
was no longer holding office at the given address since July 2002 and left no forwarding address.
Meanwhile, the Republics motion for leave of court to serve summons by publication remained unresolved.
Thus, on August 11, 2005, the Republic filed a manifestation and ex parte motion to resolve its motion for
leave of court to serve summons by publication.
On August 12, 2005, the OSG received a copy of Glasgows "Motion to Dismiss (By Way of Special
Appearance)" dated August 11, 2005. It alleged that (1) the court had no jurisdiction over its person as
summons had not yet been served on it; (2) the complaint was premature and stated no cause of action as
there was still no conviction for estafa or other criminal violations implicating Glasgow and (3) there was
failure to prosecute on the part of the Republic.
The Republic opposed Glasgows motion to dismiss. It contended that its suit was an action quasi in rem
where jurisdiction over the person of the defendant was not a prerequisite to confer jurisdiction on the court.
It asserted that prior conviction for unlawful activity was not a precondition to the filing of a civil forfeiture
case and that its complaint alleged ultimate facts sufficient to establish a cause of action. It denied that it
failed to prosecute the case.
On October 27, 2005, the trial court issued the assailed order. It dismissed the case on the following
grounds: (1) improper venue as it should have been filed in the RTC of Pasig where CSBI, the depository
bank of the account sought to be forfeited, was located; (2) insufficiency of the complaint in form and
substance and (3) failure to prosecute. It lifted the writ of preliminary injunction and directed CSBI to
release to Glasgow or its authorized representative the funds in CA-005-10-000121-5.
Raising questions of law, the Republic filed this petition.
On November 23, 2005, this Court issued a TRO restraining Glasgow and CSBI, their agents,
representatives and/or persons acting upon their orders from implementing the assailed October 27, 2005
order. It restrained Glasgow from removing, dissipating or disposing of the funds in account no. CA-005-10000121-5 and CSBI from allowing any transaction on the said account.
The petition essentially presents the following issue: whether the complaint for civil forfeiture was correctly
dismissed on grounds of improper venue, insufficiency in form and substance and failure to prosecute.

The Court agrees with the Republic.

The Complaint Was Filed In The Proper Venue
In its assailed order, the trial court cited the grounds raised by Glasgow in support of its motion to dismiss:
1. That this [c]ourt has no jurisdiction over the person of Glasgow considering that no [s]ummons has been
served upon it, and it has not entered its appearance voluntarily;
2. That the [c]omplaint for forfeiture is premature because of the absence of a prior finding by any tribunal
that Glasgow was engaged in unlawful activity: [i]n connection therewith[,] Glasgow argues that the
[c]omplaint states no cause of action; and
3. That there is failure to prosecute, in that, up to now, summons has yet to be served upon Glasgow.5
But inasmuch as Glasgow never questioned the venue of the Republics complaint for civil forfeiture against
it, how could the trial court have dismissed the complaint for improper venue? In Dacoycoy v. Intermediate
Appellate Court6 (reiterated in Rudolf Lietz Holdings, Inc. v. Registry of Deeds of Paraaque City),7 this
Court ruled:
The motu proprio dismissal of petitioners complaint by [the] trial court on the ground of improper
venue is plain error. (emphasis supplied)
At any rate, the trial court was a proper venue.
On November 15, 2005, this Court issued A.M. No. 05-11-04-SC, the Rule of Procedure in Cases of Civil
Forfeiture, Asset Preservation, and Freezing of Monetary Instrument, Property, or Proceeds Representing,
Involving, or Relating to an Unlawful Activity or Money Laundering Offense under RA 9160, as amended
(Rule of Procedure in Cases of Civil Forfeiture). The order dismissing the Republics complaint for civil
forfeiture of Glasgows account in CSBI has not yet attained finality on account of the pendency of this
appeal. Thus, the Rule of Procedure in Cases of Civil Forfeiture applies to the Republics complaint.8
Moreover, Glasgow itself judicially admitted that the Rule of Procedure in Cases of Civil Forfeiture is
"applicable to the instant case."9
Section 3, Title II (Civil Forfeiture in the Regional Trial Court) of the Rule of Procedure in Cases of Civil
Forfeiture provides:
Sec. 3. Venue of cases cognizable by the regional trial court. A petition for civil forfeiture shall be filed in
any regional trial court of the judicial region where the monetary instrument, property or proceeds
representing, involving, or relating to an unlawful activity or to a money laundering offense are
located; provided, however, that where all or any portion of the monetary instrument, property or proceeds
is located outside the Philippines, the petition may be filed in the regional trial court in Manila or of the
judicial region where any portion of the monetary instrument, property, or proceeds is located, at the option
of the petitioner. (emphasis supplied)
Under Section 3, Title II of the Rule of Procedure in Cases of Civil Forfeiture, therefore, the venue of civil
forfeiture cases is any RTC of the judicial region where the monetary instrument, property or proceeds
representing, involving, or relating to an unlawful activity or to a money laundering offense are located.
Pasig City, where the account sought to be forfeited in this case is situated, is within the National Capital
Judicial Region (NCJR). Clearly, the complaint for civil forfeiture of the account may be filed in any RTC of
the NCJR. Since the RTC Manila is one of the RTCs of the NCJR,10 it was a proper venue of the Republics
complaint for civil forfeiture of Glasgows account.
The Complaint Was Sufficient In Form And Substance
In the assailed order, the trial court evaluated the Republics complaint to determine its sufficiency in form
and substance:
At the outset, this [c]ourt, before it proceeds, takes the opportunity to examine the [c]omplaint and
determine whether it is sufficient in form and substance.

Before this [c]ourt is a [c]omplaint for Civil Forfeiture of Assets filed by the [AMLC], represented by the
Office of the Solicitor General[,] against Glasgow and [CSBI] as necessary party. The [c]omplaint principally
alleges the following:
(a) Glasgow is a corporation existing under the laws of the Philippines, with principal office address at Unit
703, 7th Floor, Citystate Center [Building], No. 709 Shaw Boulevard[,] Pasig City;
(b) [CSBI] is a corporation existing under the laws of the Philippines, with principal office at Citystate Center
Building, No. 709 Shaw Boulevard, Pasig City;
(c) Glasgow has funds in the amount of P21,301,430.28 deposited with [CSBI], under CA 005-10-0001215;
(d) As events have proved, aforestated bank account is related to the unlawful activities of Estafa and
violation of Securities Regulation Code;
(e) The deposit has been subject of Suspicious Transaction Reports;
(f) After appropriate investigation, the AMLC issued Resolutions No. 094 (dated July 10, 2002), 096 (dated
July 12, 2002), 101 (dated July 23, 2002), and 108 (dated August 2, 2002), directing the issuance of freeze
orders against the bank accounts of Glasgow;
(g) Pursuant to said AMLC Resolutions, Freeze Orders Nos. 008-010, 011 and 013 were issued on
different dates, addressed to the concerned banks;
(h) The facts and circumstances plainly showing that defendant Glasgows bank account and deposit are
related to the unlawful activities of Estafa and violation of Securities Regulation Code, as well as to a
money laundering offense [which] [has] been summarized by the AMLC in its Resolution No. 094; and
(i) Because defendant Glasgows bank account and deposits are related to the unlawful activities of Estafa
and violation of Securities Regulation Code, as well as [to] money laundering offense as aforestated, and
being the subject of covered transaction reports and eventual freeze orders, the same should properly be
forfeited in favor of the government in accordance with Section 12, R.A. 9160, as amended.11
In a motion to dismiss for failure to state a cause of action, the focus is on the sufficiency, not the veracity,
of the material allegations.12 The determination is confined to the four corners of the complaint and
nowhere else.13
In a motion to dismiss a complaint based on lack of cause of action, the question submitted to the court for
determination is the sufficiency of the allegations made in the complaint to constitute a cause of action and
not whether those allegations of fact are true, for said motion must hypothetically admit the truth of the facts
alleged in the complaint.
The test of the sufficiency of the facts alleged in the complaint is whether or not, admitting the facts
alleged, the court could render a valid judgment upon the same in accordance with the prayer of the
complaint.14 (emphasis ours)
In this connection, Section 4, Title II of the Rule of Procedure in Cases of Civil Forfeiture provides:
Sec. 4. Contents of the petition for civil forfeiture. - The petition for civil forfeiture shall be verified and
contain the following allegations:
(a) The name and address of the respondent;
(b) A description with reasonable particularity of the monetary instrument, property, or proceeds, and their
location; and
(c) The acts or omissions prohibited by and the specific provisions of the Anti-Money Laundering Act, as
amended, which are alleged to be the grounds relied upon for the forfeiture of the monetary instrument,
property, or proceeds; and

[(d)] The reliefs prayed for.

Here, the verified complaint of the Republic contained the following allegations:
(a) the name and address of the primary defendant therein, Glasgow;15
(b) a description of the proceeds of Glasgows unlawful activities with particularity, as well as the location
thereof, account no. CA-005-10-000121-5 in the amount of P21,301,430.28 maintained with CSBI;
(c) the acts prohibited by and the specific provisions of RA 9160, as amended, constituting the grounds for
the forfeiture of the said proceeds. In particular, suspicious transaction reports showed that Glasgow
engaged in unlawful activities of estafa and violation of the Securities Regulation Code (under Section
3(i)(9) and (13), RA 9160, as amended); the proceeds of the unlawful activities were transacted and
deposited with CSBI in account no. CA-005-10-000121-5 thereby making them appear to have originated
from legitimate sources; as such, Glasgow engaged in money laundering (under Section 4, RA 9160, as
amended); and the AMLC subjected the account to freeze order and
(d) the reliefs prayed for, namely, the issuance of a TRO or writ of preliminary injunction and the forfeiture
of the account in favor of the government as well as other reliefs just and equitable under the premises.
The form and substance of the Republics complaint substantially conformed with Section 4, Title II of the
Rule of Procedure in Cases of Civil Forfeiture.
Moreover, Section 12(a) of RA 9160, as amended, provides:
SEC. 12. Forfeiture Provisions.
(a) Civil Forfeiture. When there is a covered transaction report made, and the court has, in a petition filed
for the purpose ordered seizure of any monetary instrument or property, in whole or in part, directly or
indirectly, related to said report, the Revised Rules of Court on civil forfeiture shall apply.
In relation thereto, Rule 12.2 of the Revised Implementing Rules and Regulations of RA 9160, as amended,
states:
RULE 12
Forfeiture Provisions
xxx xxx xxx
Rule 12.2. When Civil Forfeiture May be Applied. When there is a SUSPICIOUS TRANSACTION
REPORT OR A COVERED TRANSACTION REPORT DEEMED SUSPICIOUS AFTER INVESTIGATION
BY THE AMLC, and the court has, in a petition filed for the purpose, ordered the seizure of any monetary
instrument or property, in whole or in part, directly or indirectly, related to said report, the Revised Rules of
Court on civil forfeiture shall apply.
RA 9160, as amended, and its implementing rules and regulations lay down two conditions when applying
for civil forfeiture:
(1) when there is a suspicious transaction report or a covered transaction report deemed suspicious after
investigation by the AMLC and
(2) the court has, in a petition filed for the purpose, ordered the seizure of any monetary instrument or
property, in whole or in part, directly or indirectly, related to said report.
It is the preliminary seizure of the property in question which brings it within the reach of the judicial
process.16 It is actually within the courts possession when it is submitted to the process of the court.17 The
injunctive writ issued on August 8, 2003 removed account no. CA-005-10-000121-5 from the effective
control of either Glasgow or CSBI or their representatives or agents and subjected it to the process of the
court.

Since account no. CA-005-10-000121-5 of Glasgow in CSBI was (1) covered by several suspicious
transaction reports and (2) placed under the control of the trial court upon the issuance of the writ of
preliminary injunction, the conditions provided in Section 12(a) of RA 9160, as amended, were satisfied.
Hence, the Republic, represented by the AMLC, properly instituted the complaint for civil forfeiture.
Whether or not there is truth in the allegation that account no. CA-005-10-000121-5 contains the proceeds
of unlawful activities is an evidentiary matter that may be proven during trial. The complaint, however, did
not even have to show or allege that Glasgow had been implicated in a conviction for, or the commission
of, the unlawful activities of estafa and violation of the Securities Regulation Code.
A criminal conviction for an unlawful activity is not a prerequisite for the institution of a civil forfeiture
proceeding. Stated otherwise, a finding of guilt for an unlawful activity is not an essential element of civil
forfeiture.
Section 6 of RA 9160, as amended, provides:
SEC. 6. Prosecution of Money Laundering.
(a) Any person may be charged with and convicted of both the offense of money laundering and the
unlawful activity as herein defined.
(b) Any proceeding relating to the unlawful activity shall be given precedence over the prosecution of any
offense or violation under this Act without prejudice to the freezing and other remedies provided.
(emphasis supplied)
Rule 6.1 of the Revised Implementing Rules and Regulations of RA 9160, as amended, states:
Rule 6.1. Prosecution of Money Laundering
(a) Any person may be charged with and convicted of both the offense of money laundering and the
unlawful activity as defined under Rule 3(i) of the AMLA.
(b) Any proceeding relating to the unlawful activity shall be given precedence over the prosecution of any
offense or violation under the AMLA without prejudice to the application ex-parte by the AMLC to the
Court of Appeals for a freeze order with respect to the monetary instrument or property involved therein and
resort to other remedies provided under the AMLA, the Rules of Court and other pertinent laws and
rules. (emphasis supplied)
Finally, Section 27 of the Rule of Procedure in Cases of Civil Forfeiture provides:
Sec. 27. No prior charge, pendency or conviction necessary. No prior criminal charge, pendency of or
conviction for an unlawful activity or money laundering offense is necessary for the commencement
or the resolution of a petition for civil forfeiture. (emphasis supplied)
Thus, regardless of the absence, pendency or outcome of a criminal prosecution for the unlawful activity or
for money laundering, an action for civil forfeiture may be separately and independently prosecuted and
resolved.
There Was No Failure To Prosecute
The trial court faulted the Republic for its alleged failure to prosecute the case. Nothing could be more
erroneous.
Immediately after the complaint was filed, the trial court ordered its deputy sheriff/process server to serve
summons and notice of the hearing on the application for issuance of TRO and/or writ of preliminary
injunction. The subpoena to Glasgow was, however, returned unserved as Glasgow "could no longer be
found at its given address" and had moved out of the building since August 1, 2002.
Meanwhile, after due hearing, the trial court issued a writ of preliminary injunction enjoining Glasgow from
removing, dissipating or disposing of the subject bank deposits and CSBI from allowing any transaction on,
withdrawal, transfer, removal, dissipation or disposition thereof.

As the summons on Glasgow was returned "unserved," and considering that its whereabouts could not be
ascertained despite diligent inquiry, the Republic filed a verified omnibus motion for (a) issuance of alias
summons and (b) leave of court to serve summons by publication on October 8, 2003. While the trial court
issued an alias summons in its order dated October 15, 2003, it kept quiet on the prayer for leave of court
to serve summons by publication.
Subsequently, in an order dated January 30, 2004, the trial court archived the case for failure of the
Republic to cause the service of alias summons. The Republic filed an ex parte omnibus motion to (a)
reinstate the case and (b) resolve its pending motion for leave of court to serve summons by publication.
In an order dated May 31, 2004, the trial court ordered the reinstatement of the case and directed the
Republic to cause the service of the alias summons on Glasgow and CSBI within 15 days. However, it
deferred its action on the Republics motion for leave of court to serve summons by publication until a
return was made on the alias summons.
Meanwhile, the Republic continued to exert efforts to obtain information from other government agencies
on the whereabouts or current status of respondent Glasgow if only to save on expenses of publication of
summons. Its efforts, however, proved futile. The records on file with the Securities and Exchange
Commission provided no information. Other inquiries yielded negative results.
On July 12, 2004, the Republic received a copy of the sheriffs return dated June 30, 2004 stating that the
alias summons had been returned "unserved" as Glasgow was no longer holding office at the given
address since July 2002 and left no forwarding address. Still, no action was taken by the trial court on the
Republics motion for leave of court to serve summons by publication. Thus, on August 11, 2005, the
Republic filed a manifestation and ex parte motion to resolve its motion for leave of court to serve summons
by publication.
It was at that point that Glasgow filed a motion to dismiss by way of special appearance which the Republic
vigorously opposed. Strangely, to say the least, the trial court issued the assailed order granting Glasgows
motion.
Given these circumstances, how could the Republic be faulted for failure to prosecute the complaint for civil
forfeiture? While there was admittedly a delay in the proceeding, it could not be entirely or primarily
ascribed to the Republic. That Glasgows whereabouts could not be ascertained was not only beyond the
Republics control, it was also attributable to Glasgow which left its principal office address without
informing the Securities and Exchange Commission or any official regulatory body (like the Bureau of
Internal Revenue or the Department of Trade and Industry) of its new address. Moreover, as early as
October 8, 2003, the Republic was already seeking leave of court to serve summons by publication.
In Marahay v. Melicor,18 this Court ruled:
While a court can dismiss a case on the ground of non prosequitur, the real test for the exercise of such
power is whether, under the circumstances, plaintiff is chargeable with want of due diligence in failing to
proceed with reasonable promptitude. In the absence of a pattern or scheme to delay the disposition
of the case or a wanton failure to observe the mandatory requirement of the rules on the part of the
plaintiff, as in the case at bar, courts should decide to dispense with rather than wield their
authority to dismiss. (emphasis supplied)
We see no pattern or scheme on the part of the Republic to delay the disposition of the case or a wanton
failure to observe the mandatory requirement of the rules. The trial court should not have so eagerly
wielded its power to dismiss the Republics complaint.
Service Of Summons May Be By Publication
In Republic v. Sandiganbayan,19 this Court declared that the rule is settled that forfeiture proceedings are
actions in rem. While that case involved forfeiture proceedings under RA 1379, the same principle applies
in cases for civil forfeiture under RA 9160, as amended, since both cases do not terminate in the imposition
of a penalty but merely in the forfeiture of the properties either acquired illegally or related to unlawful
activities in favor of the State.
As an action in rem, it is a proceeding against the thing itself instead of against the person.20 In actions in

rem or quasi in rem, jurisdiction over the person of the defendant is not a prerequisite to conferring
jurisdiction on the court, provided that the court acquires jurisdiction over the res.21 Nonetheless, summons
must be served upon the defendant in order to satisfy the requirements of due process.22 For this purpose,
service may be made by publication as such mode of service is allowed in actions in rem and quasi in
rem.23
In this connection, Section 8, Title II of the Rule of Procedure in Cases of Civil Forfeiture provides:
Sec. 8. Notice and manner of service. - (a) The respondent shall be given notice of the petition in the same
manner as service of summons under Rule 14 of the Rules of Court and the following rules:
1. The notice shall be served on respondent personally, or by any other means prescribed in Rule 14 of the
Rules of Court;
2. The notice shall contain: (i) the title of the case; (ii) the docket number; (iii) the cause of action; and (iv)
the relief prayed for; and
3. The notice shall likewise contain a proviso that, if no comment or opposition is filed within the
reglementary period, the court shall hear the case ex parte and render such judgment as may be warranted
by the facts alleged in the petition and its supporting evidence.
(b) Where the respondent is designated as an unknown owner or whenever his whereabouts are
unknown and cannot be ascertained by diligent inquiry, service may, by leave of court, be effected
upon him by publication of the notice of the petition in a newspaper of general circulation in such
places and for such time as the court may order. In the event that the cost of publication exceeds the
value or amount of the property to be forfeited by ten percent, publication shall not be required. (emphasis
supplied)
WHEREFORE, the petition is hereby GRANTED. The October 27, 2005 order of the Regional Trial Court of
Manila, Branch 47, in Civil Case No. 03-107319 is SET ASIDE. The August 11, 2005 motion to dismiss of
Glasgow Credit and Collection Services, Inc. is DENIED. And the complaint for forfeiture of the Republic of
the Philippines, represented by the Anti-Money Laundering Council, is REINSTATED.
The case is hereby REMANDED to the Regional Trial Court of Manila, Branch 47 which shall forthwith
proceed with the case pursuant to the provisions of A.M. No. 05-11-04-SC. Pending final determination of
the case, the November 23, 2005 temporary restraining order issued by this Court is hereby MAINTAINED.
SO ORDERED.

THIRD DIVISION
G.R. No. 165273

March 10, 2010

LEAH PALMA, Petitioner,

vs.
HON. DANILO P. GALVEZ, in his capacity as PRESIDING JUDGE of the REGIONAL TRIAL COURT
OF ILOILO CITY, BRANCH 24; and PSYCHE ELENA AGUDO, Respondents.
DECISION
PERALTA, J.:
Assailed in this petition for certiorari under Rule 65 of the Rules of Court are the Orders dated May 7, 20041
and July 21, 20042 of the Regional Trial Court (RTC) of Iloilo City, Branch 24, granting the motion to
dismiss filed by private respondent Psyche Elena Agudo and denying reconsideration thereof, respectively.

On July 28, 2003, petitioner Leah Palma filed with the RTC an action for damages against the Philippine
Heart Center (PHC), Dr. Danilo Giron and Dr. Bernadette O. Cruz, alleging that the defendants committed
professional fault, negligence and omission for having removed her right ovary against her will, and losing
the same and the tissues extracted from her during the surgery; and that although the specimens were
subsequently found, petitioner was doubtful and uncertain that the same was hers as the label therein
pertained that of somebody else. Defendants filed their respective Answers. Petitioner subsequently filed a
Motion for Leave to Admit Amended Complaint, praying for the inclusion of additional defendants who were
all nurses at the PHC, namely, Karla Reyes, Myra Mangaser and herein private respondent Agudo. Thus,
summons were subsequently issued to them.
On February 17, 2004, the RTC's process server submitted his return of summons stating that the alias
summons, together with a copy of the amended complaint and its annexes, were served upon private
respondent thru her husband Alfredo Agudo, who received and signed the same as private respondent was
out of the country.3
On March 1, 2004, counsel of private respondent filed a Notice of Appearance and a Motion for Extension
of Time to File Answer4 stating that he was just engaged by private respondent's husband as she was out
of the country and the Answer was already due.
On March 15, 2004, private respondent's counsel filed a Motion for Another Extension of Time to File
Answer,5 and stating that while the draft answer was already finished, the same would be sent to private
respondent for her clarification/verification before the Philippine Consulate in Ireland; thus, the counsel
prayed for another 20 days to file the Answer.
On March 30, 2004, private respondent filed a Motion to Dismiss6 on the ground that the RTC had not
acquired jurisdiction over her as she was not properly served with summons, since she was temporarily out
of the country; that service of summons on her should conform to Section 16, Rule 14 of the Rules of Court.
Petitioner filed her Opposition7 to the motion to dismiss, arguing that a substituted service of summons on
private respondent's husband was valid and binding on her; that service of summons under Section 16,
Rule 14 was not exclusive and may be effected by other modes of service, i.e., by personal or substituted
service. Private respondent filed a Comment8 on petitioner's Opposition, and petitioner filed a Reply9
thereto.
On May 7, 2004, the RTC issued its assailed Order granting private respondent's motion to dismiss. It
found that while the summons was served at private respondent's house and received by respondent's
husband, such service did not qualify as a valid service of summons on her as she was out of the country
at the time the summons was served, thus, she was not personally served a summons; and even granting
that she knew that a complaint was filed against her, nevertheless, the court did not acquire jurisdiction
over her person as she was not validly served with summons; that substituted service could not be resorted
to since it was established that private respondent was out of the country, thus, Section 16, Rule 14
provides for the service of summons on her by publication.
Petitioner filed a motion for reconsideration, which the RTC denied in its Order dated July 21, 2004.
Petitioner is now before us alleging that the public respondent committed a grave abuse of discretion
amounting to lack or excess of jurisdiction when he ruled that:
I. Substituted service of summons upon private respondent, a defendant residing in the Philippines but
temporarily outside the country is invalid;
II. Section 16, Rule 14, of the 1997 Rules of Civil Procedure limits the mode of service of summons upon a
defendant residing in the Philippines, but temporarily outside the country, exclusively to extraterritorial
service of summons under section 15 of the same rule;
III. In not ruling that by filing two (2) motions for extension of time to file Answer, private respondent had
voluntarily submitted herself to the jurisdiction of respondent court, pursuant to Section 20, Rule 14 of the
1997 Rules of Civil Procedure, hence, equivalent to having been served with summons;
IV. The cases cited in his challenged Order of May 7, 2004 constitute stare decisis despite his own
admission that the factual landscape in those decided cases are entirely different from those in this case.10

Petitioner claims that the RTC committed a grave abuse of discretion in ruling that Section 16, Rule 14,
limits the service of summons upon the defendant-resident who is temporarily out of the country exclusively
by means of extraterritorial service, i.e., by personal service or by publication, pursuant to Section 15 of the
same Rule. Petitioner further argues that in filing two motions for extension of time to file answer, private
respondent voluntarily submitted to the jurisdiction of the court.
In her Comment, private respondent claims that petitioner's certiorari under Rule 65 is not the proper
remedy but a petition for review under Rule 45, since the RTC ruling cannot be considered as having been
issued with grave abuse of discretion; that the petition was not properly verified because while the
verification was dated September 15, 2004, the petition was dated September 30, 2004. She insists that
since she was out of the country at the time the service of summons was made, such service should be
governed by Section 16, in relation to Section 15, Rule 14 of the Rules of Court; that there was no voluntary
appearance on her part when her counsel filed two motions for extension of time to file answer, since she
filed her motion to dismiss on the ground of lack of jurisdiction within the period provided under Section 1,
Rule 16 of the Rules of Court.
In her Reply, petitioner claims that the draft of the petition and the verification and certification against
forum shopping were sent to her for her signature earlier than the date of the finalized petition, since the
petition could not be filed without her signed verification. Petitioner avers that when private respondent filed
her two motions for extension of time to file answer, no special appearance was made to challenge the
validity of the service of summons on her.
The parties subsequently filed their respective memoranda as required.
We shall first resolve the procedural issues raised by private respondent.
Private respondent's claim that the petition for certiorari under Rule 65 is a wrong remedy thus the petition
should be dismissed, is not persuasive. A petition for certiorari is proper when any tribunal, board or officer
exercising judicial or quasi-judicial functions has acted without or in excess of jurisdiction, or with grave
abuse of discretion amounting to lack or excess of jurisdiction and there is no appeal, or any plain, speedy,
and adequate remedy at law.11 There is "grave abuse of discretion" when public respondent acts in a
capricious or whimsical manner in the exercise of its judgment as to be equivalent to lack of jurisdiction.
Section 1, Rule 41 of the 1997 Rules of Civil Procedure states that an appeal may be taken only from a
final order that completely disposes of the case; that no appeal may be taken from (a) an order denying a
motion for new trial or reconsideration; (b) an order denying a petition for relief or any similar motion
seeking relief from judgment; (c) an interlocutory order; (d) an order disallowing or dismissing an appeal; (e)
an order denying a motion to set aside a judgment by consent, confession or compromise on the ground of
fraud, mistake or duress, or any other ground vitiating consent; (f) an order of execution; (g) a judgment or
final order for or against one or more of several parties or in separate claims, counterclaims, cross-claims
and third-party complaints, while the main case is pending, unless the court allows an appeal therefrom; or
(h) an order dismissing an action without prejudice. In all the above instances where the judgment or final
order is not appealable, the aggrieved party may file an appropriate special civil action for certiorari under
Rule 65.
In this case, the RTC Order granting the motion to dismiss filed by private respondent is a final order
because it terminates the proceedings against her, but it falls within exception (g) of the Rule since the
case involves several defendants, and the complaint for damages against these defendants is still
pending.12 Since there is no appeal, or any plain, speedy, and adequate remedy in law, the remedy of a
special civil action for certiorari is proper as there is a need to promptly relieve the aggrieved party from the
injurious effects of the acts of an inferior court or tribunal.13
Anent private respondent's allegation that the petition was not properly verified, we find the same to be
devoid of merit. 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.14 In this instance,
petitioner attached a verification to her petition although dated earlier than the filing of her petition.
Petitioner explains that since a draft of the petition and the verification were earlier sent to her in New York
for her signature, the verification was earlier dated than the petition for certiorari filed with us. We accept
such explanation. While Section 1, Rule 65 requires that the petition for certiorari be verified, this is not an
absolute necessity where the material facts alleged are a matter of record and the questions raised are
mainly of law.15 In this case, the issue raised is purely of law.

Now on the merits, the issue for resolution is whether there was a valid service of summons on private
respondent.
In civil cases, the trial court acquires jurisdiction over the person of the defendant either by the service of
summons or by the latters voluntary appearance and submission to the authority of the former.16 Private
respondent was a Filipino resident who was temporarily out of the Philippines at the time of the service of
summons; thus, service of summons on her is governed by Section 16, Rule 14 of the Rules of Court,
which provides:
Sec. 16. Residents temporarily out of the Philippines. When an action is commenced against a defendant
who ordinarily resides within the Philippines, but who is temporarily out of it, service may, by leave of court,
be also effected out of the Philippines, as under the preceding section. (Emphasis supplied)
The preceding section referred to in the above provision is Section 15, which speaks of extraterritorial
service, thus:
SEC. 15. Extraterritorial service. When the defendant does not reside and is not found in the Philippines,
and the action affects the personal status of the plaintiff or relates to, or the subject of which is, property
within the Philippines, in which the defendant has or claims a lien or interest, actual or contingent, or in
which the relief demanded consists, wholly or in part, in excluding the defendant from any interest therein,
or the property of the defendant has been attached within the Philippines, service may, by leave of court,
be effected out of the Philippines by personal service as under section 6; or by publication in a newspaper
of general circulation in such places and for such time as the court may order, in which case a copy of the
summons and order of the court shall be sent by registered mail to the last known address of the
defendant, or in any other manner the court may deem sufficient. Any order granting such leave shall
specify a reasonable time, which shall not be less than sixty (60) days after notice, within which the
defendant must answer.
The RTC found that since private respondent was abroad at the time of the service of summons, she was a
resident who was temporarily out of the country; thus, service of summons may be made only by
publication.
We do not agree.
In Montefalcon v. Vasquez,17 we said that because Section 16 of Rule 14 uses the words "may" and "also,"
it is not mandatory. Other methods of service of summons allowed under the Rules may also be availed of
by the serving officer on a defendant-resident who is temporarily out of the Philippines. Thus, if a resident
defendant is temporarily out of the country, any of the following modes of service may be resorted to: (1)
substituted service set forth in section 7 ( formerly Section 8), Rule 14; (2) personal service outside the
country, with leave of court; (3) service by publication, also with leave of court; or (4) in any other manner
the court may deem sufficient.18
In Montalban v. Maximo,19 we held that substituted service of summons under the present Section 7, Rule
14 of the Rules of Court in a suit in personam against residents of the Philippines temporarily absent
therefrom is the normal method of service of summons that will confer jurisdiction on the court over such
defendant. In the same case, we expounded on the rationale in providing for substituted service as the
normal mode of service for residents temporarily out of the Philippines.
x x x A man temporarily absent from this country leaves a definite place of residence, a dwelling where he
lives, a local base, so to speak, to which any inquiry about him may be directed and where he is bound to
return. Where one temporarily absents himself, he leaves his affairs in the hands of one who may be
reasonably expected to act in his place and stead; to do all that is necessary to protect his interests; and to
communicate with him from time to time any incident of importance that may affect him or his business or
his affairs. It is usual for such a man to leave at his home or with his business associates information as to
where he may be contacted in the event a question that affects him crops up. If he does not do what is
expected of him, and a case comes up in court against him, he cannot just raise his voice and say that he
is not subject to the processes of our courts. He cannot stop a suit from being filed against him upon a
claim that he cannot be summoned at his dwelling house or residence or his office or regular place of
business.
Not that he cannot be reached within a reasonable time to enable him to contest a suit against him. There

are now advanced facilities of communication. Long distance telephone calls and cablegrams make it easy
for one he left behind to communicate with him.20
Considering that private respondent was temporarily out of the country, the summons and complaint may
be validly served on her through substituted service under Section 7, Rule 14 of the Rules of Court which
reads:
SEC. 7. Substituted service. If, for justifiable causes, the defendant cannot be served within a
reasonable time as provided in the preceding section, service may be effected (a) by leaving copies of the
summons at the defendants residence with some person of suitable age and discretion then residing
therein, or (b) by leaving the copies at defendants office or regular place of business with some competent
person in charge thereof.
We have held that a dwelling, house or residence refers to the place where the person named in the
summons is living at the time when the service is made, even though he may be temporarily out of the
country at the time.21 It is, thus, the service of the summons intended for the defendant that must be left
with the person of suitable age and discretion residing in the house of the defendant. Compliance with the
rules regarding the service of summons is as important as the issue of due process as that of
jurisdiction.221avvphi1
Section 7 also designates the persons with whom copies of the process may be left. The rule presupposes
that such a relation of confidence exists between the person with whom the copy is left and the defendant
and, therefore, assumes that such person will deliver the process to defendant or in some way give him
notice thereof.23
In this case, the Sheriff's Return stated that private respondent was out of the country; thus, the service of
summons was made at her residence with her husband, Alfredo P. Agudo, acknowledging receipt thereof.
Alfredo was presumably of suitable age and discretion, who was residing in that place and, therefore, was
competent to receive the summons on private respondent's behalf.
Notably, private respondent makes no issue as to the fact that the place where the summons was served
was her residence, though she was temporarily out of the country at that time, and that Alfredo is her
husband. In fact, in the notice of appearance and motion for extension of time to file answer submitted by
private respondent's counsel, he confirmed the Sheriff's Return by stating that private respondent was out
of the country and that his service was engaged by respondent's husband. In his motion for another
extension of time to file answer, private respondent's counsel stated that a draft of the answer had already
been prepared, which would be submitted to private respondent, who was in Ireland for her clarification
and/or verification before the Philippine Consulate there. These statements establish the fact that private
respondent had knowledge of the case filed against her, and that her husband had told her about the case
as Alfredo even engaged the services of her counsel.
In addition, we agree with petitioner that the RTC had indeed acquired jurisdiction over the person of
private respondent when the latter's counsel entered his appearance on private respondent's behalf,
without qualification and without questioning the propriety of the service of summons, and even filed two
Motions for Extension of Time to File Answer. In effect, private respondent, through counsel, had already
invoked the RTCs jurisdiction over her person by praying that the motions for extension of time to file
answer be granted. We have held that the filing of motions seeking affirmative relief, such as, to admit
answer, for additional time to file answer, for reconsideration of a default judgment, and to lift order of
default with motion for reconsideration, are considered voluntary submission to the jurisdiction of the
court.24 When private respondent earlier invoked the jurisdiction of the RTC to secure affirmative relief in
her motions for additional time to file answer, she voluntarily submitted to the jurisdiction of the RTC and is
thereby estopped from asserting otherwise.25
Considering the foregoing, we find that the RTC committed a grave abuse of discretion amounting to
excess of jurisdiction in issuing its assailed Orders.
WHEREFORE, the petition is GRANTED. The Orders dated May 7, 2004 and July 21, 2004 of the Regional
Trial Court of Iloilo City, Branch 24, are hereby SET ASIDE. Private respondent is DIRECTED to file her
Answer within the reglementary period from receipt of this decision.
SO ORDERED.

SECOND DIVISION
G.R. No. 159699. March 16, 2005
ROSALINO P. ACANCE, in his capacity as Attorney-in-Fact, Administrator of property and as
counsel of SPOUSES JESULITO P. ACANCE and VILMA ACANCE, SPOUSES MANUEL P. ACANCE
and GUIA ACANCE, and SPOUSES NESTOR P. ACANCE and LYNNE ACANCE, Petitioners,
vs.
COURT OF APPEALS, SPOUSES YOLANDA QUIJANO TRIA and AMBROCIO TRIA, SPOUSES
EPIFANIA QUIJANO and RAPHAEL VILLANUEVA, and SPOUSES NAPOLEON PAGLICAWAN
QUIJANO and PILAR Z. QUIJANO, represented by their attorney-in-fact, ENGR. JULIUS
VILLANUEVA, Respondents.
DECISION
CALLEJO, SR., J.:
Before the Court is a petition for review on certiorari seeking to reverse and set aside the Resolution1 dated
November 29, 2002 of the Court of Appeals (CA) in CA-G.R. SP No. 71658. In the said resolution, the
appellate court dismissed the petition for certiorari filed therewith for failure to file a motion for
reconsideration with the court a quo. Likewise sought to be reversed is the appellate courts Resolution
dated August 27, 2003 denying the reconsideration of its earlier resolution.
The case stemmed from the following facts:
On May 23, 2001, Spouses Yolanda Quijano and Ambrocio Tria, Spouses Epifania Quijano and Raphael
Villanueva, Spouses Napoleon and Pilar Quijano (respondents herein), represented by their attorney-in-fact
Engr. Julius F. Villanueva, filed with the Regional Trial Court (RTC) of Muntinlupa an amended complaint
against Spouses Jesulito and Vilma Acance, Spouses Nestor and Lynne Acance, and Spouses Manuel and
Guia Acance (petitioners herein). The case was docketed as Civil Case No. 01-122 and raffled to Branch
276 of the RTC of Muntinlupa City.
The amended complaint sought to annul the Extra-Judicial Settlement of the Estate of Deceased Jesus P.
Acance and Waiver of Rights dated February 10, 1997, executed by Jesulito, Manuel and Nestor, all
surnamed Acance, and their mother Angela. The estate covered by the said extra-judicial settlement
included two parcels of land with a total area of 1,044 square meters under Transfer Certificates of Titles
(TCT) Nos. 239998 and 242993 and the improvements thereon consisting of a 9-door apartment units,
situated in Muntinlupa City. Following the execution of the extra-judicial settlement, TCT Nos. 239998 and
242993, which were in the names of Jesus and Angela Acance, were cancelled and, in their stead, TCT
Nos. 4365 and 4366 were issued in the names of the Acance siblings.
The amended complaint alleged that the siblings Yolanda, Epifania and Napoleon were the legitimate
children of Angela Paglicawan and Vernier Quijano. The couple, however, became estranged after the birth
of their youngest child. Upon their separation, Vernier continued to reside in Looc, Occidental Mindoro
while Angela went to Manila to work as a nurse at the National Mental Hospital in Muntinlupa City. While
working thereat, Angela met Jesus Acance. They lived together as common law husband and wife and
bore the siblings Jesulito, Manuel and Nestor.
Some time in 1966, Angela went to the United States to work as a nurse. With the savings she earned
therefrom, she acquired the subject parcels of land in Muntinlupa and had the subject 9-door apartment
units constructed thereon. Jesus Acance lived with Angela in the United States. After Vernier passed away
in 1989, Jesus and Angela got married in 1990. Jesus died in 1996 in the United States.
In seeking to nullify the extra-judicial settlement of estate executed by the Acance siblings and their TCT
Nos. 4365 and 4366, the Quijano siblings alleged that the subject real properties are conjugal properties of

Angela and Vernier because these were acquired by Angela during the subsistence of her first marriage
with Vernier. As such, they (the Quijano siblings) have a valid right to succeed over the said properties as
the lawful and compulsory heirs of Angela and Vernier.
The Quijano siblings impugned the validity of the extra-judicial settlement claiming that the signature of
Angela thereon was a forgery or that she affixed the same without her free volition because at the time of
its execution, she was already senile. In any case, Angelas purported waiver of her rights over the subject
properties in favor of her children with Jesus (Acance siblings) and excluding her children with Vernier
(Quijano siblings) is against the law. Consequently, TCT Nos. 4365 and 4366 of the Acance siblings are
allegedly also void as they emanated from the forged deed of extra-judicial settlement.
On April 26, 2002, upon motion of the respondents (the Quijano siblings and their spouses), as plaintiffs
therein, the court a quo issued an order declaring the petitioners (the Acance siblings and their spouses),
as defendants therein, in default for their failure to file an answer to the amended complaint.
On May 13, 2002, petitioner Rosalino Acance, as attorney-in-fact and administrator of the subject
properties, filed with the court a quo a Motion to Lift/Set Aside Order of Default. In his affidavit of merit
attached to the said motion, petitioner Rosalino alleged that the Acance siblings had appointed him as their
private prosecutor in a criminal case involving the subject real properties. On January 25, 2002, upon
learning about Civil Case No. 01-122, he filed therein a Motion to Represent Defendants and set the same
for hearing on February 5, 2002. On the said date, however, petitioner Rosalino found out that his motion
was not included in the court calendar for that day. Since there was no action on his motion, he had the
impression that the court a quo needed time to determine other jurisdictional requirements considering that
the petitioners are American citizens and non-residents of the Philippines.
Petitioner Rosalino further alleged that he had not received a copy of the complaint filed in Civil Case No.
01-122. The only pleading he received pertaining to the case was that of the motion to declare the
petitioners in default and setting the hearing thereon on April 26, 2002. At the said hearing, the
respondents motion was granted and the petitioners were declared in default.
The affidavit of merit likewise alleged that the petitioners have a valid and meritorious defense including
that the subject real properties were acquired by their parents, Jesus and Angela, with both their earnings
during the period that they lived together. They denied that these were paraphernal properties of Angela or
conjugal properties of Angela and Vernier. The petitioners further claimed that the extra-judicial settlement
was duly executed by them and Angelas waiver of her rights over the subject properties in their favor was
validly made. To prove that Angela really intended to transfer the properties to them, the petitioners
presented her Last Will and Testament executed in the United States on December 6, 1996 in which she
bequeathed to them all her properties, real and personal, wherever situated.
In its Order dated June 27, 2002, the court a quo denied the motion to lift the order of default. It explained
that the petitioners are all residing abroad but the real properties subject of the complaint are situated in
Muntinlupa City. Accordingly, upon motion, they were deemed served with the summons and the amended
complaint through publication thereof in a newspaper of general circulation in Muntinlupa City, where the
properties are located, and nationwide on October 20, 2001. The petitioners had sixty (60) days from the
last publication or until December 2, 2001 within which to file their answer. However, they failed to do so.
More than a month later, or on January 25, 2002, petitioner Rosalino filed the motion to represent the
petitioners and asked for sixty (60) days to file an answer. According to the court a quo, since the motion
was not an adversarial pleading it was no longer included in the court calendar. It stressed that at the time
said counsel entered his appearance, the period to file an answer had long expired. Further, the 60 days
extension prayed for was not denied. However, the petitioners still failed to file their answer within the
extension period prayed for.
The court a quo faulted petitioner Rosalino, as counsel, for erroneously assuming that since it failed to rule
on his entry of appearance, the period to file an answer was suspended. It pointed out that the fact that the
counsel may be allowed to represent a party-litigant or not does not toll the running of the period to file the
responsive pleading to the complaint.
Forthwith, the petitioners filed with the Court of Appeals a petition for certiorari alleging grave abuse of
discretion on the part of the court a quo in denying their motion to lift the default order. Preliminarily, they
averred that they dispensed with the filing of a motion for reconsideration with the court a quo because of

the urgency of the matter as well as the fact that they raised jurisdictional issues in their motion to lift the
default order.
They contended that, in denying their motion to lift the order of default, the court a quo adopted a rigid,
strict and technical stance. Further, petitioner Rosalino, as their counsel, was of the honest belief that when
the court a quo did not act on his motion to represent the petitioners, it was still determining whether all the
requirements for a valid extraterritorial service was made on them. They, likewise, harped on the fact that
the court a quos order denying their motion to lift order of default had been promulgated before they even
filed their reply to the respondents opposition. They maintained that the court a quo did not acquire
jurisdiction over the petitioners because no valid extraterritorial service of summons was made on them.
On November 29, 2002, the appellate court rendered the assailed Resolution dismissing outright the
petition for certiorari for failure of the petitioners to file a motion for reconsideration with the court a quo. In
so doing, it applied the general rule that the filing of a motion for reconsideration of the disputed order is a
condition sine qua non in order that certiorari will lie. The petitioners moved for the reconsideration of the
said resolution but it was denied in the assailed Resolution dated August 27, 2003. Hence, the recourse to
this Court by the petitioners.
It is contended by the petitioners that the appellate court committed reversible error in dismissing their
petition for certiorari for failure to file a motion for reconsideration with the court a quo. They posit that such
omission is not fatal. They maintain that they have a meritorious defense in Civil Case No. 01-122 and that
grave injuries and injustice would be inflicted on them unless they are afforded the full opportunity to protect
their interests. On the other hand, no undue prejudice would be caused the respondents in the event that
the order of default is lifted and the action in the court a quo is heard on the merits.
According to the petitioners, the non-filing of a motion for reconsideration was justified because the need
for relief was extremely urgent and a motion for reconsideration was not a plain and adequate remedy
under the circumstances of the case. Moreover, the questions raised before the appellate court were the
same as those which have been raised in the motion to lift order of default and already passed upon by the
court a quo. Finally, the failure to file a responsive pleading to the respondents amended complaint was
due to the excusable negligence of the petitioners counsel.
For their part, the respondents urge the Court to deny the petition for review. They are of the view that the
appellate court correctly applied the general rule that the filing of a motion for reconsideration is a condition
sine qua non in order that certiorari will lie.
The threshold issue that needs to be resolved is whether the CA committed reversible error in dismissing
the petition for certiorari for failure of the petitioners to file a motion for reconsideration with the court a quo.
The Court rules in the affirmative.
The rule is well settled that the filing of a motion for reconsideration is an indispensable condition to the
filing of a special civil action for certiorari.2 However, this rule admits of exceptions including:
(a) where the order is a patent nullity, as where the court a quo has no jurisdiction;
(b) where the questions raised in the certiorari proceedings have been duly raised and passed upon by the
lower court, or are the same as those raised and passed upon in the lower court;
(c) where there is an urgent necessity for the resolution of the question and any further delay would
prejudice the interests of the Government or of the petitioner or the subject matter of the action is
perishable;
(d) where, under the circumstances, a motion for reconsideration would be useless;
(e) where petitioner was deprived of due process and there is extreme urgency for relief;
(f) where, in a criminal case, relief from an order of arrest is urgent and the granting of such relief by the
trial court is improbable;
(g) where the proceedings in the lower court are a nullity for lack of due process;

(h) where the proceedings was ex parte or in which the petitioner had no opportunity to object; and
(i) where the issue raised is one purely of law or public interest is involved.3
A perusal of the petition for certiorari filed with the CA shows that the petitioners expressly stated therein
that they dispensed with the filing of a motion for reconsideration with the court a quo because they raised
questions of jurisdiction in the motion to set aside the default order filed therewith. It was further averred
that there was an urgent necessity for relief as the court a quo seemed to act with precipitate haste. It was,
likewise, pointed out that the court a quo allowed the respondents to present their evidence ex parte on
April 30, 2002 (a Tuesday), just two office days after the default order was issued on April 26, 2002 (a
Friday).
It appears that the CA committed reversible error in dismissing outright the petition for certiorari for failure
of the petitioners to move for a reconsideration of the default order when it had been sufficiently shown that
the need for relief was extremely urgent. The procedural requirement that a motion for reconsideration must
first be filed before resorting to the special civil action of certiorari may be glossed over to prevent a
miscarriage of justice and, among other recognized instances, when the need for relief is extremely urgent
and certiorari is the only adequate and speedy remedy available.4 Among other remedies, a petition for
certiorari to declare the nullity of a judgment by default is available if the trial court improperly declared a
party in default, or even if the trial court properly declared a party in default, if grave abuse of discretion
attended such declaration.5
In this case, the court a quo acted with grave abuse of discretion in declaring the petitioners in default
without showing that there was full compliance with the requirements for extraterritorial service of summons
under Section 15, Rule 14 of the Rules of Court. The said provision reads:
Sec. 15. Extraterritorial service. When the defendant does not reside and is not found in the Philippines,
and the action affects the personal status of the plaintiff or relates to, or the subject of which is, property
within the Philippines, in which the defendant has or claims a lien or interest, actual or contingent, or in
which the relief demanded consists, wholly or in part, in excluding the defendant from any interest therein,
or the property of the defendant has been attached within the Philippines, service may, by leave of court,
be effected out of the Philippines by personal service as under Section 6; or by publication in a newspaper
of general circulation in such places and for such time as the court may order, in which case a copy of the
summons and order of the court shall be sent by registered mail to the last known address of the
defendant, or in any other manner the court may deem sufficient. Any order granting such leave shall
specify a reasonable time, which shall not be less than sixty (60) days after notice, within which the
defendant must answer.
The petitioners are citizens of the United States and residents thereof. Further, the suit against them
involves real property wherein the petitioners, as defendants therein, have an interest. These facts clearly
warranted extraterritorial service of summons in accordance with Section 15, Rule 14 of the Rules of Court.
The rationale for service of summons on a nonresident defendant is explained, thus:
We repeat, service of summons on a nonresident defendant who is not found in the country is required, not
for purposes of physically acquiring jurisdiction over his person but simply in pursuance of the requirements
of fair play, so that he may be informed of the pendency of the action against him and the possibility that
the property in the Philippines belonging to him or in which he has an interest may be subjected to a
judgment in favor of a resident, and that he may thereby be accorded an opportunity to defend in the
action, if he be so minded. The only relief that may be granted in such an action against such a nonresident
defendant, who does not choose to submit himself to the jurisdiction of the Philippine court, is limited to the
res.6
In its Order dated April 26, 2002, the court a quo declared the petitioners in default in this wise:
Since the last publication of this case more than 60 days ago, no answer has been filed by any of the
Defendants, the MOTION TO DECLARE THE DEFENDANTS IN DEFAULT is, therefore, granted; hence
Defendants, SPS. JESULITO P. ACANCE & VILMA ACANCE, SPS. MANUEL P. ACANCE & GUIA
ACANCE, and SPS. NESTOR P. ACANCE & LYNNE ACANCE are defaulted.
Evidence for Plaintiffs may be received ex-parte before the Clerk of Court.7

However, as will be shown shortly, the service of summons in this case is defective. There was no showing
that copies of the summons and the amended complaint were duly served at the petitioners last known
correct address by registered mail, as a complement to the publication pursuant to Section 15, Rule 14 of
the Rules of Court8 and in compliance with the court a quos Order dated July 1, 2001 granting the
respondents motion for leave to serve summons by publication.
The respondents alleged that they had "caused copies of the Amended Complaint and Summons and the 1
July 2001 Order to be sent on November 13, 2001 by registered mail to the Acances known addresses in
the United States." In their Compliance dated January 31, 2002 filed with the court a quo, the respondents
averred that "a copy of the summons and order of the court together with a copy of the amended complaint
had been sent to each of the three (3) defendants in their respective addresses by registered mail, as
evidenced by Registry Receipt No. 26832 for Nestor P. Acance dated November 13, 2001; Registry receipt
No. 26833 for Jesulito P. Acance dated November 13, 2001 and Registry Receipt No. 26834 for Manuel P.
Acance dated November 13, 2001, all sent from the Makati City Branch Post Office."9 However, except for
this bare allegation, the corresponding registry receipts or copies thereof were not presented to show
compliance with the rules.
Further, there was likewise non-compliance with Section 19, Rule 15 of the Rules of Court relating to the
proof of service by publication. The said provision reads:
Sec. 19. Proof of service by publication. If the service has been made by publication, service may be
proved by the affidavit of the printer, his foreman, or principal clerk, or of the editor, business or advertising
manager, to which affidavit a copy of the publication shall be attached, and by an affidavit showing the
deposit of a copy of the summons and order for publication in the post office, postage prepaid, directed to
the defendant by registered mail to his last known address.
While the respondents claimed that they had complied with the service of summons by publication in a
newspaper of general circulation,10 it does not appear that they had presented to the court a quo the
"affidavit of the printer, his foreman, or principal clerk, or of the editor, business or advertising manager" of
the "Remate," where the publication was allegedly made, to prove such service by publication. Neither did
they present an affidavit showing the deposit of a copy of the summons and order of publication in the post
office, postage prepaid, directed to the petitioners by registered mail to their last known addresses.
The failure to strictly comply correctly with the requirements of the rules regarding the mailing of copies of
the summons and the order for its publication is a fatal defect in the service of summons.11 As held by this
Court:
It is the duty of the court to require the fullest compliance with all the requirements of the statute permitting
service by publication. Where service is obtained by publication, the entire proceeding should be closely
scrutinized by the courts and a strict compliance with every condition of law should be exacted. Otherwise
great abuses may occur, and the rights of persons and property may be made to depend upon the elastic
conscience of interested parties rather than the enlightened judgment of the court or judge.12
Even granting arguendo that the respondents had fully complied with the requirements for extraterritorial
service of summons and the court a quo correctly declared them in default; still, it should not have been too
rash in dismissing the petitioners motion to lift the default order. Well-settled is the rule that courts should
be liberal in setting aside orders of default for default judgments are frowned upon, unless in cases where it
clearly appears that the reopening of the case is intended for delay. The issuance of the orders of default
should be the exception rather than the rule, to be allowed only in clear cases of obstinate refusal by the
defendant to comply with the orders of the trial court.13 In this case, there is no showing that the petitioners
failure to file an answer was due to an apparent scheme to delay the proceedings or to flagrantly transgress
the rules.
Under the circumstances, the setting aside of the order of default is in order. The petitioners should be
afforded the opportunity to present evidence on their behalf in order that substantial justice is achieved.
After all, court litigations are primarily for the search of truth, and a liberal interpretation of the rules by
which both parties are given the fullest opportunity to adduce proofs is the best way to ferret out such
truth.14 By conducting a full-blown trial, both parties will be able to present their evidence, thus, affording
them the opportunity to enforce and protect their respective rights.
WHEREFORE, the petition is GRANTED. The assailed Resolutions dated November 29, 2002 and August

27, 2003 of the Court of Appeals in CA-G.R. SP No. 71658 are REVERSED AND SET ASIDE. The case is
REMANDED to the court a quo, which is DIRECTED to allow the petitioners to file their answer to the
amended complaint, and thereafter to conduct the proper proceedings in Civil Case No. 01-122.
SO ORDERED.

FIRST DIVISION
A.M. No. P-13-3153

October 14, 2013 (Formerly A.M. No. 13-9-88-MeTC)

ATTY. VLADIMIR ALARIQUE T. CABIGAO, Complainant,

vs.
NEPTALI ANGELO V. NERY, SHERIFF III, BRANCH 30, METROPOLITAN TRIAL COURT, MANILA,
Respondent.
RESOLUTION
REYES, J.:
This resolves the administrative complaint filed by Atty. Vladimir Alarique T. Cabigao complainant) against
Sheriff Neptali Angelo V. Nery Nery), Sheriff III of the Metropolitan Trial Court MeTC) of Manila, Branch 30.
The complainant is the counsel of Vision Automotive Technology, Inc. Vision Automotive), the plaintiff in
Civil Case No. 0 1785-SC entitled Vision Automotive Technology Inc. v Sound and Beyond Autoworks
which was then pending before the MeTC of Manila, Branch 30. On March 15, 2012, the complainant sent
a letter-complaint1 to the Presiding Judge of the MeTC of Manila, Branch 30, alleging that Nery called
Vision Automotive and asked for money to cover the transportation expenses in serving the summons to
the defendant in New Manila, Quezon City.
He claimed that, on February 20, 2012, Vision Automotive deposited the amount of One Thousand Pesos
(P1,000.00) in the account of Nery with the Land Bank of the Philippines under account number 19871141-90.2 However, despite receipt of the money deposited by Vision Automotive, Nery still failed to serve
the summons to the defendant in Civil Case No. 01785-SC. The complainant furnished the Office of the
Court Administrator (OCA) with a copy of his letter-complaint. On March 30, 2012, then Assistant Court
Administrator3 Thelma C. Bahia directed Nery to comment on the allegations contained in the
complainants letter-complaint.4
In his comment5 dated May 9, 2012, Nery denied that he asked for money from Vision Automotive. He
averred that Civil Case No. 01785-SC was raffled to their branch on January 13, 2012; that a month after it
was filed, Vision Automotive has yet to coordinate with him as regards the service of summons to the
defendant. He admitted having called a representative of Vision Automotive, but clarified that he only did so
to request Vision Automotive to defray the transportation expenses for the service of summons as it was
burdensome to withdraw the amount of P1,000.00 from the Sheriffs Trust Fund. He claimed that it was the
representative of Vision Automotive who insisted on depositing the amount of P1,000.00 in his bank
account to defray the expenses in serving the summons on the defendant.
Nery further claimed that he never intended to tarnish the image of the judiciary when he accepted the
money from Vision Automotive; that there were instances in the past when he used his own money in order
to expedite court processes. Nery likewise claimed that the complainant had already manifested to the
OCA that he is already withdrawing his complaint.6 He further alleged that he had already served the
summons to the defendant in Civil Case No. 01785-SC on March 16, 2012. After which, Nery returned the
remaining balance of the P1,000.00 given by Vision Automotive to defray the expenses in serving the
summons.
On August 6, 2013, the OCA issued its evaluation and recommendation on the case.7 In its evaluation, the

OCA found that there is sufficient evidence to hold Nery administratively liable, pointing out that the latter
did not categorically deny having asked and received money from Vision Automotive. The OCA further
opined that Nery should have served the summons to the defendant in Civil Case No. 01785-SC within
fifteen (15) days from his receipt thereof pursuant to the 2002 Revised Manual for Clerks of Court; that his
failure to do so constituted simple neglect of duty.
As regards Nerys demand and subsequent receipt of money from Vision Automotive, the OCA found him
liable for less serious dishonesty, pointing out that only the payment of sheriffs fees can be lawfully
received by a sheriff and the acceptance of any other amount is improper even if it were to be applied for a
lawful purpose. Accordingly, the OCA recommended that:
RECOMMENDATION: It is respectfully recommended for the consideration of the Honorable Court that:
1. the instant complaint against Neptali Angelo V. Nery, Sheriff, Branch 30, Metropolitan Trial Court, Manila,
be DOCKETED as a regular administrative matter; and
2. respondent Nery be found GUILTY of less serious dishonesty and be FINED in an amount equivalent to
his six (6) months salary to be paid to the Court within thirty (30) days from notice.8
After a careful review of the records of this case, the Court adopts the findings and recommendation of the
OCA albeit with modification as regards the sanction to be imposed. Summons to the defendant in a case
shall forthwith be issued by the clerk of court upon the filing of the complaint and the payment of the
requisite legal fees.9 Once issued by the clerk of court, it is the duty of the sheriff, process server or any
other person serving court processes to serve the summons to the defendant efficiently and expeditiously.
Failure to do so constitutes simple neglect of duty, which is the failure of an employee to give ones
attention to a task expected of him, and signifies a disregard of a duty resulting from carelessness or
indifference.10
It took Nery more than two months to serve the summons to the defendant in Civil Case No. 01785-SC
from the time the same was raffled to their branch. Civil Case No. 01785-SC was raffled to the MeTC of
Manila, Branch 30, on January 13, 2012; Nery was only able to serve the summons on the defendant
therein only on March 16, 2012.
Explaining the delay in the service of the summons, Nery claims that Vision Automotive, from the time it
deposited the P1,000.00 in his bank account, no longer coordinated with him as regards the service of the
summons. Nerys reasoning is flawed. The supposed lack of coordination on the part of Vision Automotive
would not hinder the service of the summons to the defendant in Civil Case No. 01785-SC. To stress, once
issued by the clerk of court, it becomes the duty of the sheriff, process server or any other person serving
court processes to promptly serve the summons on the defendant in a case.
There being no sufficient justification for his delay in serving the summons on the defendant in the said
case, Nery clearly disregarded his duty to promptly serve the summons on the defendant in Civil Case No.
01785-SC and should thus be held liable for simple neglect of duty.
It is likewise improper for Nery to ask and actually receive money from Vision Automotive, even if the
money would be used to defray the expenses in serving the summons to the defendant in Civil Case No.
01785 SC. "Sheriffs are not allowed to receive any payments from the parties in the course of the
performance of their duties. They cannot just unilaterally demand sums of money from the parties without
observing the proper procedural steps."11
Section 10, Rule 141 of the Rules of Court, as amended by A.M. No. 04-2-04-SC, outlines the procedure to
be observed in defraying the actual travel expenses in serving summons, viz:
Sec. 10. Sheriffs, Process Servers and other persons serving processes.
a. For serving summons and copy of complaint, for each defendant, Two Hundred (P200.00) Pesos;
b. x x x x
In addition to the fees hereinabove fixed, the amount of One Thousand (P1,000.00) Pesos shall be
deposited with the Clerk of Court upon filing of the complaint to defray the actual travel expenses of the

sheriff, process server or other court-authorized persons in the service of summons, subpoena and other
court processes that would be issued relative to the trial of the case. In case the initial deposit of One
Thousand (P1,000.00) Pesos is not sufficient, then the plaintiff or petitioner shall be required to make an
additional deposit. The sheriff, process server or other court authorized person shall submit to the court for
its approval a statement of the estimated travel expenses for service of summons and court processes.
Once approved, the Clerk of Court shall release the money to said sheriff or process server. After service, a
statement of liquidation shall be submitted to the court for approval. After rendition of judgment by the court,
any excess from the deposit shall be returned to the party who made the deposit.
Accordingly, the plaintiff in a case is required to deposit the amount of P1,000.00 with the clerk of court,
which would be used to defray the actual travel expenses in serving the summons. The sheriff, process
server or any other person authorized to serve court processes would then submit to the court a statement
of estimated travel expenses for the service of the summons. Once the court approves the statement of
estimated travel expenses, the clerk of court shall release the money to the sheriff, process server or any
other person authorized to serve court processes.
Nery failed to follow the foregoing procedure and, instead, opted to ask Vision Automotive to defray the
actual travel expenses that would be incurred in serving the summons to the defendant. His failure to
strictly comply with the provisions of Section 10, Rule 141 of the Rules of Court warrants the imposition of
disciplinary measure. Considering that Nery demanded from Vision Automotive only the amount needed to
actually defray his actual travel expenses, the Court agrees with the OCA that he should be held
administratively liable for less serious dishonesty.
The Court "cannot overemphasize that the conduct required of court personnel must always be beyond
reproach and circumscribed with the heavy burden of responsibility as to let them be free from any
suspicion that may taint the judiciary. They shall endeavor to discourage wrong perceptions of their roles as
dispensers or peddlers of undue patronage. As a court employee, it therefore behooves respondent sheriff
to act with more circumspection and to steer clear of any situation, which may cast the slightest suspicion
on his conduct."12
"Sheriffs, as officers of the court and agents of the law, play an important role in the administration of
justice. They are in the forefront of things, tasked as they are to serve judicial writs, execute all processes,
and carry into effect the orders of the court."13 As a front-line representative of the judicial system, sheriffs
must always demonstrate integrity in their conduct for once they lose the peoples trust, they also diminish
the peoples faith in the entire judiciary.14
Section 50 of the Revised Rules on Administrative Cases in the Civil Service15 (RRACCS) mandates that:
Sec. 50. Penalty for the Most Serious Offense. If the respondent is found guilty of two (2) or more
charges or counts, the penalty to be imposed should be that corresponding to the most serious charge and
the rest shall be considered as aggravating circumstances.
The most serious charge against Nery is less serious dishonesty, which merits the penalty of suspension of
six (6) months and one (1) day to one (1) year for the first offense.16 The offense of simple neglect of duty
shall be taken as an aggravating circumstance against Nery.
"However, while this Court is duty-bound to sternly wield a corrective hand to discipline its errant
employees and to weed out those who are undesirable, this Court also has the discretion to temper the
harshness of its judgment with mercy."17 "In several jurisprudential precedents, the Court has refrained
from imposing the actual administrative penalties prescribed by law or regulation in the presence of
mitigating factors. Factors such as the respondents length of service, the respondents acknowledgement
of his or her infractions and feeling of remorse, family circumstances, humanitarian and equitable
considerations, respondents advanced age, among other things, have had varying significance in the
determination by the Court of the imposable penalty."18
The complainant already retracted his allegations against Nery, pointing out that this case simply arose
from miscommunication between Vision Automotive and Nery.19 The Court also notes that this is Nerys
first offense in his more than ten (10) years in the service, having been initially appointed as Court
Interpreter on May 23, 2002.20 Length of service and the fact that this is Nerys first offense are considered
mitigating circumstances under Section 48(l) and (n), Rule 10 of the RRACCS.21 Under the peculiar
circumstances of this case, the complainants withdrawal of his letter- complaint, taken together with the

fact that this is his first offense in his more than ten (10) years of service in the judiciary, serves to temper
the penalty to be imposed on Nery.
It bears stressing that Nery, as a sheriff, is actually discharging frontline functions.1wphi1 Under Section
47(1)(b), Rule 10 of the RRACCS, the penalty of fine may be imposed in lieu of suspension from office if
the respondent is actually discharging frontline functions, viz:
Sec. 47. Penalty of Fine. The following are the guidelines for the penalty of fine:
1. Upon the request of the head of the office or the concerned party and when supported by justifiable
reason/s, the disciplining authority may allow payment of fine in place of suspension if any of the following
circumstances are present:
a. When the functions/nature of the office is impressed with national interest such as those involved in the
maintenance of peace and order, health and safety, education; or
b. When the respondent is actually discharging frontline functions or those directly dealing with the public
and the personnel complement of the office is insufficient to perform such functions; and
c. When the respondent committed the offense without utilizing or abusing the powers of his/her position or
office.
x x x x (Emphasis ours)
In Marias v. Florendo,22 the Court imposed the penalty of fine in lieu of suspension from office, declaring
that:
While the recommended penalty of one-month suspension is reasonable, the same is not practical at this
point, considering that his work would be left unattended by reason of his absence. Furthermore, he may
use his suspension as a not Her excuse to justify his inaction and inefficiency in other matters pending
before his office. Instead of suspension, we impose a fine equivalent to his one-month salary, so that he
can finally implement the subject writs and perform the other duties of his office.23 (Citation omitted and
emphasis ours)
Accordingly, considering that Nery is performing frontline functions and that there is a great probability that
his work would be left unattended by reason of his suspension, and considering that this is his first offense
in his more than ten (10) years of service in the judiciary, the Court deems it proper to impose the straight
penalty of fine against Nery in the amount of Twenty Thousand Pesos (P20,000.00) in lieu of the penalty of
suspension from office.24
WHEREFORE, respondent Neptali Angelo V Nery, Sheriff III of the Metropolitan Trial Court of Manila,
Branch 30, is found GUILTY of less serious dishonesty, and is hereby ordered to pay a FINE in the amount
of Twenty Thousand Pesos (P20,000.00). Neptali Angelo V Nery is STERNLY WARNED that a repetition of
the same or similar acts in the future shall be dealt with more severely. Let a copy of this Resolution be
attached to his personal record.
SO ORDERED.