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THE 1991 REVISED RULES ON SUMMARY PROCEDURE (For Civil Pro Only)

JULY 5, 2015 KNOWYERL AW


Pursuant to section 36 of the Judiciary Reorganization Act of 1980 (B.P. Blg. 129) and to
achieve an expeditious and inexpensive determination of the cases referred to herein, the
Court resolved to promulgate the following Revised Rules on Summary Procedure:
I. APPLICABILITY
SECTION 1. Scope- This rule shall govern the summary procedure in the Metropolitan Trial
Courts, Municipal Trial Courts in Cities, Municipal Circuit Trial Courts, and Municipal Trial
Courts in the following cases falling within their jurisdiction:
A. Civil Cases
(1) All cases of forcible entry and unlawful detainer, irrespective of the amount of damages
and unpaid rentals sought to be recovered. Where attorneys fees are awarded, the same
shall not exceed 20,000.00
(2) All other cases, except probate proceedings, where the total amount of plaintiffs claim
does not exceed 100,000.00 or 200,000.00 in Metro Manila, exclusive of interests and costs.
(As amended by A.M. 02-11-09-SC, effective November 25, 2002)

II. CIVIL CASES


SECTION 3- Pleadings
A. Pleadings Allowed- The only pleadings allowed to be filed are:

Complaints

Compulsory Counterclaims and cross-claims pleaded in the answer; and

The answers thereto.

B. Verification All pleadings shall be verified.


SECTION 4- Duty of Court- After the court determines that the case falls under summary
procedure, it may, from an examination of theallegations therein and such evidence as
may be attached thereto, dismiss the case outright on any of the grounds apparent
therefrom for the dismissal of a civil action.
If no ground for dismissal is found, it shall forthwith issue summons which shall state that
the summary procedure under this Rule shall apply.

SECTION 5- Answer- Within 10 days from service of summons, the defendant shall file his
answer to the complaint and serve a copy thereof on the plaintiff.
Affirmative and negative defenses (by the defendant) not pleaded therein shall be deemed
waived, except for lack of jurisdiction over the subject matter.
Cross-claims and compulsory counterclaims (by the defendant) not asserted in the answer
shall be considered barred.
The answer to counterclaims and cross-claims (to the plaintiff) shall be filed and served (by
the plaintiff) within 10 days from the service of the answer in which they are pleaded.
SECTION 6- Effect of failure to answer- Should the defendant fail to answer the complaint
within the period above provided, (10days), the court, motu proprio or on motion of the
plaintiff shall render judgment as may be warranted by the facts alleged in the
complaint and limited to what is prayed for therein.
Provided, however, that the court may, in its discretion, reduce the amount of damages and
attorneys fees claimed for being excessive or otherwise, unconscionable. This is without
prejudice to the applicability of Section 4, Rule 18 of the Rules of Court, if there are two or
more defendants.
SECTION 7- Preliminary conference; appearance of parties Not later than 30 days after the
last answer is filed, a preliminary conference shall be held. The rules on pre-trial in ordinnary
cases shall be applicable to the preliminary conference unless inconsistent with the
provisions of this Rule.
The failure of the plaintiff to appear in the preliminary conference shall be a cause for the
dismissal of his complaint. The defendant who appears in the absence of the plaintiff shall
be entitled to judgment of his counterclaim in accordance with section 6 hereof. All crossclaims (by the plaintiff or by both?) shall be dismissed.
If a sole defendant shall fail to appear, the plaintiff shall be entitled to judgment in
accordance with section 6 hereof. This rule shall not apply where one of two or more
defendants sued under a common cause of action who had pleaded a common defense shall
appear at the preliminary conference.
SECTION 8-Record of Preliminary Conference- Within 5 days after the termination of the
preliminary conference, the court shall issue an order stating the matters taken up
therein, including but not limited to:
(a) Whether the parties have arrived at an amicable settlement, and if so, the terms thereof;
(b) The stipulations or admissions entered thereto;

(c) Whether, on the basis of the pleadings and the stipulations and admissions made by the
parties, judgment may be rendered without the need of further proceedings, in which event
the judgment shall be rendered within 30 days from issuance of the order;
(d) A clear specification of material facts which remain controverted;
(e) Such other matters intended to expedite the disposition of the case.
SECTION 9- Submission of affidavits and position papers Within 10 days from receipt of
the order mentioned in the next preceding section, the parties shall submit the affidavits of
their witnesses and other evidenceon the factual issues defined in the order, together
with their position papers setting forth the law and the facts relied upon by them.
SECTION 10- Rendition of judgment- Within 30 days after receipt of the last affidavits and
position papers, or the expiration of the period for filing the same, the court shall render
judgment.
However, should the court find it necessary to clarify certain material facts, it may, during
the said period, issue an order specifying the matters to be clarified, and require the parties
to submit affidavits or other evidences on the said matters within 10 days from receipt of
said order.
Judgment shall be rendered within 15 days after the receipt of the last clarificatory affidavits,
or the expiration of the period for filing the same.
The court shall not resort to the clarificatory procedure to gain time for the rendition of the
judgment.

IV. COMMON PROVISIONS


SECTION 18- Referral to Lupon Cases requiring referral to Lupon for conciliation under the
provisions of PD 1508, where there is no showing of compliance with such requirement, shall
be dismissed without prejudice, and may be revived only after such requirement shall have
been complied with. This provision shall not apply to criminal cases where the accused was
arrested without a warrant.

SECTION 19- Prohibited pleadings and motions The following pleadings, motions or petitions
shall not be allowed in the cases covered by this rule.
(a) Motion to dismiss the complaint or to quash the complaint or information except on the
ground of lack of jurisdiction over the subject matter or failure to comply with the preceding
section. (D)
(b) Motion for a bill of particulars (BillP)
(c) Motion for new trial, or for reconsideration of judgment, or for reopening of trial. (CiTy)
(d) Petition for relief from judgment (PReliefJudg)
(e) Motion for extension of time to file pleadings, affidavits, or any other paper (as in Exte)
(f) Memoranda (FM R. Station)
(g) Petition for certiorari, mandamus, or prohibition against any interlocutory order issued by
the court. (GCert, etc Interloc)
(h) Motion to declare the defendant in default (HD-default)
(i) Dilatory motions for postponement (i-Dil)
(j) Reply (Reply pud j)
(k) Third-party complaints (k3)
(l) Interventions (L-int)
SECTION 20- Affidavits The affidavits required to be submitted under this rule shall state
only facts of direct personal knowledge of the affiants which are admissible in evidence, and
shall show their competence to testify to the matters stated therein.
A violation of this requirement may subject the party or the counsel who submits the same
to disciplinary action, and shall be cause to expunge the inadmissible affidavit or portion
thereof from the record.

SECTION 21- Appeal- The judgment or final order shall be appealable to the appropriate RTC
which shall decide the same in accordance with Section 22 of BP Blg. 129. The decision of
the RTC in civil cases governed by this Rule, including forcible entry and unlawful detainer,
shall be immediately executory, without prejudice to a further appeal that may be taken
therefrom. Section 10 of Rule 70 shall be deemed repealed.
SECTION 22- Applicability of the regular rules- The regular procedure prescribed in the Rules
of Court shall apply to the special cases herein provided for in a suppletory capacity insofar
as they are not inconsistent herewith.
SECTION 23- Effectivity This revised rule on summary procedure shall be effective on
November 15, 1991

Republic of the Philippines


SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-54287 September 28, 1988

REPUBLIC PLANTERS BANK petitioner,


vs.
HON. CONRADO M. MOLINA, as Presiding Judge, Court of First Instance of Manila,
Branch XX, SARMIENTO EXPORT CORPORATION, SARMIENTO SECURITIES
CORPORATION and FELICIANO SARMIENTO, JR., respondents.
Paco, Gutierrez, Dorado, Asia & Associates for petitioner.
Benjamin M. Reyes for respondents.
GANCAYCO, J.:
The principal issue raised in this case is whether the trial court committed a grave abuse of
discretion when it ordered Civil Case No. 129829 dismissed on the ground of resjudicata it
appearing that Civil Case No. 116028 was dismissed on May 21, 1979, for failure of
petitioner to prosecute within a reasonable length of time, although in the said case, the trial
court never acquired jurisdiction over the persons of private respondents.
It is not disputed that both complaints in Civil Case No. 116028 (Branch XXXVI, Manila, Judge
Alfredo C. Florendo) and in Civil Case No. 129829 (Branch XX, Manila, Judge Conrado M.
Molina) were filed by petitioner Republic Planters Bank against private respondent, for the
collection of a sum of money based on a promissory note dated January 26, 1970, in the
amount of P100,000.00.
On May 21, 1979, Judge Alfredo C. Florendo dismissed Civil Case No. 116028 for failure of
the petitioner "to prosecute its case within a reasonable length of time. 1 A motion for
reconsideration of that order was denied on January 15, 1979. 2
When Civil Case No. 129829 was filed by petitioner, a motion to dismiss was submitted by
private respondents on the ground that the cause of action is barred by a prior judgment
(res judicata) in Civil Case No. 116028. Private respondents opined that said order was an
adjudication upon the merits. Petitioner opposed the motion to dismiss, claiming that res
judicata does not apply because the summons and complaint in Civil Case No. 116028 were
never served upon private respondents and, as such, the trial court never acquired
jurisdiction over private respondents and, consequently, over the case. Petitioner maintains
that the order of dismissal in Civil Case No. 11 6028 never became final as against private
respondents.
The trial court (Branch XX), in its order dated May 8, 1980, dismissed the complaint in Civil
Case No. 129829 on the ground that the orders dated May 21, 1979 and June 15, 1979
issued by Judge Alfredo C. Florendo, dismissing Civil Case No. 116028, had become final. The
trial court ruled that the dismissal of Civil Case No. 116028 had the effect of an adjudication
upon the merits, that the dismissal was with prejudice since the order was unconditional,
and that the lack of jurisdiction over defendants (private respondents) in Civil Case No.
116028 was of no moment. 3
In a motion for reconsideration of the order of May 8, 1980, petitioner reiterated its
allegation that in Civil Case No. 116028, the court did not acquire jurisdiction over private

respondents and that at the time the court ordered its dismissal, a motion for an alias writ of
summons was pending resolution inasmuch as the sheriff had not acted on the same. 4 The
motion for reconsideration was denied by the trial court on June 26, 1980 in Civil Case No.
129829. 5
Petitioner appealed to the Court of Appeals both questioned orders of respondent court in
Civil Case No. 129829.6 But then, petitioner sought a more speedy remedy in questioning
said orders by filing this petition for certiorari before this Court.
Under the foregoing undisputed facts, the Court finds this petition to be impressed with
merit.
The questioned orders of the trial court in Civil Case No. 129829 supporting private
respondent's motion to dismiss on the ground of res judicata are without cogent basis. We
sustain petitioner's claim that respondent trial judge acted without or in excess of
jurisdiction when he issued said orders because he thereby traversed the constitutional
precept that "no person shall be deprived of property without due process of law" and that
jurisdiction is vitally essential for any order or adjudication to be binding. Justice cannot be
sacrificed for technicality. Originally, the action for collection of the loan, evidenced by a
promissory note, was only for P100,000.00 but petitioner claims that as of March 5, 1981,
the obligation was already P429,219.74. It is a cardinal rule that no one must be allowed to
enrich himself at the expense of another without just cause.
In the very order of dismissal of Civil Case No. 116028, the trial court admitted that it did not
acquire jurisdiction over the persons of private respondents and yet, it held that it was of no
moment as to the dismissal of the case. We disagree. For the court to have authority to
dispose of the case on the merits, it must acquire jurisdiction over the subject matter and
the parties. If it did not acquire jurisdiction over the private respondents as parties to Civil
Case No. 116028, it cannot render any binding decision, favorable or adverse to them, or
dismiss the case with prejudice which, in effect, is an adjudication on the merits. 7 The
controverted orders in Civil Case No. 116028 disregarded the fundamental principles of
remedial law and the meaning and the effect of jurisdiction. A judgment, to be
considered res judicata, must be binding, and must be rendered by a court of competent
jurisdiction. Otherwise, the judgment is a nullity.
The order of dismissal in Civil Case No. 116028 does not have the effect of an adjudication
on the merits of the case because the court that rendered the same did not have the
requisite jurisdiction over the persons of the defendants therein.
This being so, it cannot be the basis of res judicata and it cannot be a bar to a lawful claim. If
at all, such a dismissal may be considered as one without prejudice. 8
Trial courts have the duty to dispose of controversies after trial on the merits whenever
possible. In this case, there are no indications that petitioner intentionally failed to prosecute
the case. The delay could not be attributed to its fault. Petitioner pursued the case with
diligence, but jurisdiction could not be acquired over defendants-private respondents. The
sheriff had not yet submitted his return of the alias summons when the action was
precipitately dismissed by the trial court. These are proven circumstances that negate the

action of respondent judge that the dismissal of Civil Case No. 116028 has the effect of an
adjudication upon the merits and constitutes a bar to the prosecution of Civil Case No.
129829. The court finds that the two questioned orders of the trial court are irregular,
improper, and, were issued with grave abuse of discretion amounting to excess of
jurisdiction.
Petitioner correctly states that its appeal to the Court of Appeals in CA-G.R. No. 67288
pertaining to the questioned orders of the trial court is not an adequate remedy, because
petitioner was not able to present evidence in the trial court. The sole issue involved in this
case is one of jurisdiction, which is appropriate for resolution by the instant petition.
WHEREFORE, and by reason of the foregoing, the questioned orders dated May 8, 1980 and
June 26, 1980 issued in Civil Case No. 129829 are hereby REVERSED and SET ASIDE. The
records of the case are ordered returned to the trial court for trial and disposition on the
merits. No costs. This decision is immediately executory.
SO ORDERED.

SUPREME COURT EN BANC


SERAFIN TIJAM, ET AL.,
Plaintiffs-Appellees,
-versus-

G.R. No. L-21450 April 15, 1968

MAGDALENO

SIBONGHANOY

ALIAS GAVINO SIBONGHANOY, ET AL.,

Defendants,
MANILA SURETY AND FIDELITY CO.,
INC.

(CEBU BRANCH)

bonding Company and defendant-appellant.

DECISION
DIZON, J.
On July 19, 1948 barely one month after the effectivity of Republic Act No. 296 known as
the Judiciary Act of 1948 the spouses Serafin Tijam and Felicitas Tagalog commenced Civil
Case No. R-660 in the Court of First Instance of Cebu against the spouses Magdaleno
Sibonghanoy and Lucia Baguio to recover from them the sum of P1,908.00, with legal
interest thereon from the date of the filing of the complaint until the whole obligation is
paid, plus costs. As prayed for in the complaint, a writ of attachment was issued by the court
against defendants properties, but the same was soon dissolved upon the filing of a

counter-bond by defendants and the Manila Surety and Fidelity Co., Inc. hereinafter referred
to as the Surety, on the 31st of the same month.
After being duly served with summons the defendants filed their answer in which, after
making some admissions and denials of the material averments of the complaint, they
interposed a counterclaim. This counterclaim was answered by the plaintiffs.
After trial upon the issues thus joined, the Court rendered judgment in favor of the plaintiffs
and, after the same had become final and executory, upon motion of the latter, the Court
issued a writ of execution against the defendants. The writ having been returned unsatisfied,
the plaintiffs moved for the issuance of a writ of execution against the Suretys bond (Rec.
on Appeal pp. 46-49), against which the Surety filed a written opposition (Id. pp. 49) upon
two grounds, namely, (1) Failure to prosecute and (2) Absence of a demand upon the Surety
for the payment of the amount due under the judgment. Upon these grounds the Surety
prayed the Court not only to deny the motion for execution against its counter-bond but also
the following affirmative relief : to relieve the herein bonding company of its liability, if any,
under the bond in question (Id. p. 54) The Court denied this motion on the ground solely
that no previous demand had been made on the Surety for the satisfaction of the judgment.
Thereafter the necessary demand was made, and upon failure of the Surety to satisfy the
judgment, the plaintiffs filed a second motion for execution against the counter-bond. On the
date set for the hearing thereon, the Court, upon motion of the Suretys counsel, granted
the latter a period of five days within which to answer the motion. Upon its failure to file
such answer, the Court granted the motion for execution and the corresponding writ was
issued.
Subsequently, the Surety moved to quash the writ on the ground that the same was issued
without the required summary hearing provided for in Section 17 of Rule 59 of the Rules of
Court. As the Court denied the motion, the Surety appealed to the Court of Appeals from
such order of denial and from the one denying its motion for reconsideration (Id.
p. 97). Its record on appeal was then printed as required by the Rules, and in due time it filed
its brief raising therein no other question but the ones covered by the following assignment
of errors:
I. That the Honorable Court a quo erred in issuing its order dated November 2, 1957, by
holding the incident as submitted for resolution, without a summary hearing and compliance
with the other mandatory requirements provided for in Section 17, Rule 59 of the Rules of
Court.
II. That the Honorable Court a quo erred in ordering the issuance of execution against the
herein bonding company- appellant.
III. That the Honorable Court a quo erred in denying the motion to quash the writ of
execution filed by the herein bonding company- appellant as well as its subsequent motion
for reconsideration, and/or in not quashing or setting aside the writ of execution.
Not one of the assignment of errors it is obvious raises the question of lack of
jurisdiction, neither directly nor indirectly.
Although the appellees failed to file their brief, the Court of Appeals, on December 11, 1962,
decided the case affirming the orders appealed from.

On January 8, 1963 five days after the Surety received notice of the decision, it filed a
motion asking for extension of time within which to file a motion for reconsideration. The
Court of Appeals granted the motion in its resolution of January 10 of the same year. Two
days later the Surety filed a pleading entitled MOTION TO DISMISS, alleging substantially
that appellees action was filed in the Court of First Instance of Cebu on July 19, 1948 for the
recovery of the sum of P1,908.00 only; that a month before that date Republic Act No. 296,
otherwise known as the Judiciary Act of 1948, had already become effective, Section 88 of
which placed within the original exclusive jurisdiction of inferior courts all civil actions where
the value of the subject-matter or the amount of the demand does not
exceedP2,000.00, exclusive of interest and costs; that the Court of First Instance therefore
had no jurisdiction to try and decide the case. Upon these premises the Suretys motion
prayed the Court of Appeals to set aside its decision and to dismiss the case. By resolution
of January 16, 1963 the Court of Appeals required the appellees to answer the motion to
dismiss, but they failed to do so. Whereupon, on May 20 of the same year, the Court
resolved to set aside its decision and to certify the case to Us. The pertinent portions of its
resolution read as follows:
It would indeed appear from the record that the action at bar, which is a suit for collection
of money in the sum of exactly P1,908.00 exclusive of interest, was originally instituted in
the Court of First Instance of Cebu on July 19, 1948. But about a month prior to the filing of
the complaint, more specifically on June 17, 1948, the Judiciary Act of 1948 took effect,
depriving the Court of First Instance of original jurisdiction over cases in which the demand,
exclusive of interest, is not more than P2,000.00. (Secs. 44[c] and 86[b], R.A. No. 296).
We believe, therefore, that the point raised in appellants motion is an important one which
merits serious consideration. As stated, the complaint was filed on July 19, 1948. This case
therefore has been pending now for almost 15 years, and throughout the entire proceeding
appellant never raised the question of jurisdiction until after receipt of this Courts adverse
decision.
There are three cases decided by the Honorable Supreme Court which may be worthy of
consideration in connection with this case, namely: Tyson Tan, et al. vs. Filipinas Compaia
de Seguros, et al., G. R. No. L-10096, March 23, 1956; Pindagan Agricultural Co., Inc. vs.
Jose P. Dans, etc., et al., G. R. No. L- 14591, September 26, 1962; and Alfredo Montelibano,
et al. vs. Bacolod-Murcia Milling Co., Inc., G. R. No. L-15092, September 29, 1962, wherein
the Honorable Supreme Court frowned upon the undesirable practice of appellants
submitting their case for decision and then accepting the judgment, if favorable, but
attacking it for lack of jurisdiction when adverse.
Considering, however, that the Supreme Court has the exclusive appellate jurisdiction
over all cases in which the jurisdiction of any inferior court is in issue (Sec. 1, Par. 3[3],
Judiciary Act of 1948, as amended), we have no choice but to certify, as we hereby do
certify; this case to the Supreme Court.
ACCORDINGLY, pursuant to Section 31 of the Judiciary Act of 1948 as amended, let the
record of this case be forwarded to the Supreme Court.
It is an undisputed fact that the action commenced by appellees in the Court of First
Instance of Cebu against the Sibonghanoy spouses was for the recovery of the sum of
P1,908.00 only an amount within the original exclusive jurisdiction of inferior courts in

accordance with the provisions of the Judiciary Act of 1948 which had taken effect about a
month prior to the date when the action was commenced. True also is the rule that
jurisdiction over the subject-matter is conferred upon the courts exclusively by law, and as
the lack of it affects the very authority of the court to take cognizance of the case, the
objection may be raised at any stage of the proceedings. However, considering the facts and
circumstances of the present case which shall forthwith be set forth We are of the
opinion that the Surety is now barred by laches from invoking this plea at this late hour for
the purpose of annulling everything done heretofore in the case with its active participation.
As already stated, the action was commenced in the Court of First Instance of Cebu on July
19, 1948, that is, almost fifteen years before the Surety filed its motion to dismiss on January
12, 1963 raising the question of lack of jurisdiction for the first time.
It must be remembered that although the action, originally, was exclusively against the
Sibonghanoy spouses, the Surety became a quasi-party therein since July 31, 1948 when it
filed a counter-bond for the dissolution of the writ of attachment issued by the court of
origin. (Record on Appeal, pp. 15-19). Since then, it acquired certain rights and assumed
specific obligations in connection with the pending case, in accordance with Sections 12 and
17, Rule 57, Rules of Court. (Bautista vs. Joaquin, 46 Phil. 885; Kimpang & Co. vs. Javier, 65
Phil. 170).
Upon the filing of the first motion for execution against the counter- bond the Surety not only
filed a written opposition thereto praying for its denial but also asked for an additional
affirmative relief that it be relieved of its liability under the counter-bond upon the
grounds relied upon in support of its opposition lack of jurisdiction of the court a quo not
being one of them.
Then, at the hearing on the second motion for execution against the counter-bond, the
Surety appeared, through counsel, to ask for time within which to file an answer or
opposition thereto. This motion was granted, but instead of such answer or opposition, the
Surety filed the motion to dismiss mentioned heretofore.
A party may be estopped or barred from raising a question in different ways and for
different reasons. Thus we speak of estoppel in pais, of estoppel by deed or by record, and of
estoppel by laches.
Laches, in a general sense, is failure or neglect, for an unreasonable and unexplained length
of time, to do that which, by exercising due diligence, could or should have been done
earlier; it is negligence or omission to assert a right within a reasonable time, warranting a
presumption that the party entitled to assert it either has abandoned it or declined to assert
it.
The doctrine of laches or of stale demands is based upon grounds of public policy which
requires, for the peace of society, the discouragement of stale claims and, unlike the statute
of limitations, is not a mere question of time but is principally a question of the inequity or
unfairness of permitting a right or claim to be enforced or asserted.
It has been held that a party cannot invoke the jurisdiction of a court to secure affirmative
relief against his opponent and, after obtaining or failing to obtain such relief, repudiate or
question that same jurisdiction. (Dean vs. Dean, 136 Or. 694, 86 A.L.R. 79). In the case just
cited, by way of explaining the rule, it was further said that the question whether the court

had jurisdiction either of the subject- matter of the action or of the parties was not important
in such cases because the party is barred from such conduct not because the judgment or
order of the court is valid and conclusive as an adjudication, but for the reason that
such a practice cannot be tolerated obviously for reasons of public policy.
Furthermore, it has also been held that after voluntarily submitting a cause and
encountering an adverse decision on the merits, it is too late for the loser to question the
jurisdiction or power of the court (Pease vs. Rathbun-Jones etc. 243 U.S. 273, 61 L. Ed. 715,
37 S. Ct.
283; St. Louis etc. vs. McBride, 141 U.S. 127, 35 L. Ed. 659). And in Littleton vs. Burgess, 16
Wyo. 58, the Court said that it is not right for a party who has affirmed and invoked the
jurisdiction of a court in a particular matter to secure an affirmative relief, to afterwards
deny that same jurisdiction to escape a penalty.
Upon this same principle is what We said in the three cases mentioned in the resolution of
the Court of Appeals of May 20, 1963 (supra) to the effect that we frown upon the
undesirable practice of a party submitting his case for decision and then accepting the
judgment, only if favorable, and attacking it for lack of jurisdiction, when adverse as well
as in Pindagan etc. vs. Dans et al., G. R. L- 14591, September 26, 1962; Montelibano et al.
vs. Bacolod-Murcia Milling Co., Inc., G. R. L-15092; Young Men Labor Union etc. vs. the Court
of Industrial Relations et al., G. R. L-20307, Feb. 26, 1965, and Mejia vs. Lucas, 100 Phil. p.
277.
The facts of this case show that from the time the Surety became a quasi-party on July 31,
1948, it could have raised the question of the lack of jurisdiction of the Court of First
Instance of Cebu to take cognizance of the present action by reason of the sum of money
involved which, according to the law then in force, was within the original exclusive
jurisdiction of inferior courts. It failed to do so. Instead, at several stages of the proceedings
in the court a quo as well as in the Court of Appeals, it invoked the jurisdiction of said courts
to obtain affirmative relief and submitted its case for a final adjudication on the merits. It
was only after an adverse decision was rendered by the Court of Appeals that it finally woke
up to raise the question of jurisdiction. Were We to sanction such conduct on its part, We
would in effect be declaring as useless all the proceedings had in the present case since it
was commenced on July 19, 1948 and compel the judgment creditors to go up their Calvary
once more. The inequity and unfairness of this is not only patent but revolting.
Coming now to the merits of the appeal: after going over the entire record, We have become
persuaded that We can do nothing better than to quote in toto, with approval the decision
rendered by the Court of Appeals on December 11, 1962 as follows:
In Civil Case No. R-660 of the Court of First Instance of Cebu, which was a suit for collection
of a sum of money, a writ of attachment was issued against defendants properties. The
attachment, however, was subsequently discharged under Section 12 of Rule 59 upon the
filing by defendants of a bond subscribed by Manila Surety & Fidelity Co., Inc. After trial,
judgment was rendered in favor of plaintiffs.
The writ of execution against defendants having been returned totally unsatisfied, plaintiffs
moved, under Section 17 of Rule 59, for issuance of writ of execution against Manila Surety
& Fidelity Co., Inc. to enforce the obligation of the bond. But the motion was, upon the

suretys opposition, denied on the ground that there was no showing that a demand had
been made by the plaintiffs to the bonding company for payment of the amount due under
the judgment. (Record on Appeal, p. 60).
Hence, plaintiffs made the necessary demand upon the surety for satisfaction of the
judgment, and upon the latters failure to pay the amount due, plaintiffs again filed a motion
dated October 31, 1957, for issuance of writ of execution against the surety, with notice of
hearing on November 2, 1957. On October 31, 1957, the surety received copy of said motion
and notice of hearing.
It appears that when the motion was called on November 2, 1957, the suretys counsel
asked that he be given time within which to answer the motion, and so an order was issued
in open court, as follows:
As prayed for, Atty. Jose P. Soberano, Jr. counsel for the Manila Surety & Fidelity Co., Inc.,
Cebu Branch, is given until Wednesday, November 6, 1957, to file his answer to the motion
for the issuance of a writ of execution dated October 30, 1957 of the plaintiffs, after which
this incident shall be deemed submitted for resolution.
SO ORDERED
Given in open court, this 2nd day of Nov. 1957, at Cebu City, Philippines.
(SGD.) JOSE M. MENDOZA
Judge
(Record on Appeal, pp. 64-65, Emphasis supplied)
Since the suretys counsel failed to file any answer or objection within the period given him,
the court, on December 7, 1957, issued an order granting plaintiffs motion for execution
against the surety; and on December 12, 1957, the corresponding writ of execution was
issued.
On December 24, 1957, the surety filed a motion to quash the writ of execution on the
ground that the same was issued without the requirements of Section 17, Rule 59 of the
Rules of Court having been complied with, more specifically, that the same was issued
without the required summary hearing. This motion was denied by order of February 10,
1958.
On February 25, 1958, the surety filed a motion for reconsideration of the above-stated
order of denial; which motion was likewise denied by order of March 26, 1958.
From the above-stated orders of February 10, 1958 and March 26, 1958 denying the
suretys motion to quash the writ of execution and motion for reconsideration, respectively
the surety has interposed the appeal on hand.
The surety insists that the lower court should have granted its motion to quash the writ of
execution because the same was issued without the summary hearing required by Section
17 of Rule 59, which reads:

SECTION 17. When execution returned unsatisfied, recovery had upon bond. if the
execution be returned unsatisfied in whole or in part, the surety or sureties on any bond
given pursuant to the provisions of this role to secure the payment of the judgment shall
become finally charged on such bond, and bound to pay to the plaintiff upon demand the
amount due under the judgment, which amount may be recovered from such surety or
sureties after notice and summary hearing in the same action.(Emphasis supplied).
Summary hearing is not intended to be carried on in the formal manner in which ordinary
actions are prosecuted. (83
C.J.S. 792). It is, rather, a procedure by which a question is resolved with dispatch, with the
least possible delay, and in preference to ordinary legal and regular judicial proceedings.
(Ibid, p. 790). What is essential is that the defendant is notified or summoned to appear and
is given an opportunity to hear what is urged upon him, and to interpose a defense, after
which follows an adjudication of the rights of the parties. (Ibid., pp. 793-794); and as to the
extent and latitude of the hearing, the same will naturally lie upon the discretion of the
court, depending upon the attending circumstances and the nature of the incident up for
consideration.
In the case at bar, the surety had been notified of the plaintiffs motion for execution and of
the date when the same would be submitted for consideration. In fact, the suretys counsel,
was present in court when the motion was called, and it was upon his request that the court
a quo gave him a period of four days within which to file an answer. Yet he allowed that
period to lapse without filing an answer or objection. The surety cannot now, therefore,
complain that it was deprived of its day in court.
It is argued that the suretys counsel did not file an answer to the motion for the simple
reason that all its defenses can be set up during the hearing of the motion even if the same
are not reduced to writing. (Appellants brief, p. 4). There is obviously no merit in this
pretense because, as stated above, the record will show that when the motion was called,
what the suretys counsel did was to ask that he be allowed and given time to file an answer.
Moreover, it was stated in the order given in open court upon request of the suretys counsel
that after the four- day period within which to file an answer, the incident shall be deemed
submitted for resolution; and counsel apparently agreed, as the order was issued upon his
instance and he interposed no objection thereto.
It is also argued that although according to Section 17 of Rule 59, supra, there is no need
for a separate action, there must, however, be a separate judgment against the surety in
order to hold it liable on the bond. (Appellants Brief, p, 15). Not so, in our opinion. A bond
filed for discharge of attachment is, per Section 12 of Rule 59, to secure the payment to the
plaintiff of any judgment he may recover in the action, and stands in place of the property
so released. Hence, after the judgment for the plaintiff has become executory and the
execution is returned unsatisfied (Section. 17, Rule 59), as in this case, the liability of the
bond automatically attaches and, in failure of the surety to satisfy the judgment against the
defendant despite demand therefor, writ of execution may issue against the surety to
enforce the obligation of the bond.
UPON ALL THE FOREGOING, the orders appealed from are hereby affirmed, with costs
against the appellant Manila Surety and Fidelity Company, Inc.

Republic of the Philippines


SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 201601

March 12, 2014

MARYLOU CABRERA, Petitioner,


vs.
FELIX NG, Respondent.
DECISION
REYES, J.:

Before this Court is a petition for review on certiorari1 under Rule 45 of the Rules of Court
seeking to annul and set aside the Decision2 dated October 21, 2009 and the
Resolution3 dated March 26, 2012 of the Court of Appeals (CA) in CA-G.R. SP No. 03392. The
CA denied the petition for certiorari filed by Marylou Cabrera (petitioner), which assailed the
Order4 dated December 19, 2007 of the Regional Trial Court (RTC) of Mandaue City, Branch
56, in Civil Case No. MAN-4773.
The Facts
On February 14, 2004, Felix Ng (respondent) filed a complaint for sum of money with the RTC
against the petitioner and her husband Marionilo Cabrera (spouses Cabrera), alleging that
the latter issued to him the following: (1) Metrobank Check No. 0244694 dated June 30,
2002 for the amount of Thirty-One Thousand Pesos (P31,000.00); (2) Metrobank Check No.
0244674 dated August 9, 2002 for the amount of Thirty-Eight Thousand Seventy-Four Pesos
and Seventy-Six Centavos (P38,074.76); and (3) Metrobank Check No. 0244745 dated
August 15, 2005 for Two Million Five Hundred Thousand Pesos (P2,500,000.00). That when
presented for payment, the said checks were all dishonored as the accounts from which they
had been drawn were already closed.
The spouses Cabrera admitted that they issued Metrobank Check No. 0244694 and
Metrobank Check No. 0244674 to the respondent and that the same were dishonored when
presented for payment. However, they claimed that they paid the respondent the amount
represented by the said checks through the latters son Richard Ng. Further, they deny
having issued Metrobank Check No. 0244745 to the respondent, alleging that the said check
was forcibly taken from them by Richard Ng.
On August 7, 2007, the RTC rendered a Decision, 5 which ordered the spouses Cabrera to pay
the respondent the following: (1) Two Million Five Hundred Sixty-Nine Thousand Seventy-Four
Pesos (P2,569,074.00) plus legal interest from inception of the obligation until fully paid; (2)
moral damages in the amount of Fifty Thousand Pesos (P50,000.00); (3) attorneys fees of
Twenty Thousand Pesos (P20,000.00); and (4) litigation expenses in the amount of Ten
Thousand Pesos (P10,000.00).
On August 8, 2007, the spouses Cabrera received a copy of the RTC Decision dated August
7, 2007. On August 14, 2007, the spouses Cabrera filed with the RTC a motion for
reconsideration,6 which they set for hearing on August 17, 2007. On even date, the spouses
Cabrera sent a copy of their motion for reconsideration to the respondent thru registered
mail; it was actually received by the respondent on August 21, 2007.
The said motion for reconsideration, however, was not heard on August 17, 2007 as the new
acting presiding judge of the said court had just assumed office. On August 28, 2007, the
RTC issued a notice,7 which set the said motion for reconsideration for hearing on September
25, 2007.
On September 20, 2007, the respondent filed an opposition 8 to the motion for
reconsideration filed by the spouses Cabrera. The respondent alleged that the said motion
for reconsideration is a mere scrap of paper since it violated the three-day notice
requirement. The respondent pointed out that the spouses Cabrera sent to him a copy of
their motion for reconsideration, which was set for hearing on August 17, 2007, via
registered mail on August 14, 2007; that he actually received a copy thereof only on August
21, 2007 four days after the scheduled hearing thereon.
It appears that the scheduled hearing of the spouses Cabreras motion for reconsideration
on September 25, 2007 did not push through. Consequently, on September 26, 2007, the

RTC issued another notice,9 which set the said motion for reconsideration for hearing on
October 26, 2007.
On October 26, 2007, the RTC issued an Order,10 which directed the parties to file their
additional pleadings, after which the motion for reconsideration filed by the spouses Cabrera
would be deemed submitted for resolution.
On December 19, 2007, the RTC issued an Order11 which denied the motion for
reconsideration filed by the spouses Cabrera. The RTC pointed out that the spouses Cabrera
violated Section 4, Rule 15 of the Rules of Court, which mandates that every motion required
to be heard should be served by the movant in such a manner as to ensure its receipt by the
other party at least three days before the date of hearing. Thus:
After a meticulous scrutiny of the records of this case, the court opines that the motion was
filed beyond the reglementary three (3)[-]day period.
As the records bear out, the instant motion was mailed to the plaintiffs counsel on August
14[, 2007] and was set for hearing on August 17, 2007. However, the copy of said motion
had reached plaintiffs side and a copy of which was received by plaintiffs counsel only on
August 17, 2007[,] four (4) days late after it was supposed to be heard. Hence, a clear
blatant violations [sic] of the rule on notice and hearing.12
The RTC further opined that a motion, which fails to comply with the three-day notice
requirement is a mere scrap of paper; it is not entitled to judicial cognizance and would not
toll the running of the reglementary period for filing the requisite pleadings. Accordingly, the
RTC held, its Decision dated August 7, 2007 had already become final for failure of the
spouses Cabrera to comply with the three-day notice requirement.
The petitioner then filed a petition for certiorari13 with the CA, alleging that the RTC gravely
abused its discretion in denying her motion for reconsideration. The petitioner pointed out
that the RTC did not actually conduct a hearing on her motion for reconsideration on August
17, 2007;
that her motion for reconsideration was actually heard on October 26, 2007, after the
respondent had already filed his opposition thereto. Thus, the petitioner claimed, the issue
of her failure to comply with the three-day notice requirement had already been rendered
moot. In any case, the petitioner asserted, the RTC should have resolved her motion for
reconsideration on its merits rather than simply denying it on mere technicality.
On October 21, 2009, the CA, by way of the assailed Decision, 14 denied the petition for
certiorari filed by the petitioner. The CA opined that the RTC did not abuse its discretion in
denying the motion for reconsideration filed by the spouses Cabrera since it merely applied
the three-day notice requirement under Section 4, Rule 15 of the Rules of Court. Thus:
It appears that petitioners Motion for Reconsideration was set for hearing on 17 August
2007. A copy thereof was mailed to private respondent on 14 August 2007, and private
respondent actually received his copy only on 21 August 2007 or four (4) days after the set
date of hearing; and thus, depriving him of the opportunity to oppose the motion.
Respondent court, therefore, correctly held that such motion violated the three (3)-day
notice rule; the essence of due process. Respondent court had applied said rule to the given
situation, and of no doubt, mere adherence to the rules cannot be considered grave abuse of
discretion on the part of the respondent court. x x x.15 (Citation omitted)

The petitioner sought a reconsideration of the Decision dated October 21, 2009 but it was
denied by the CA in its Resolution16 dated March 26, 2012.
Hence, the instant petition.
The Issue
The sole issue to be resolved by the Court is whether the CA erred in affirming the RTC Order
dated December 19, 2007, which denied the motion for reconsideration filed by the spouses
Cabrera.
The Courts Ruling
The petition is meritorious.
Sections 4 and 5, Rule 15 of the Rules of Court provide that:
Sec. 4. Hearing of motion. Except for motions which the court may act upon without
prejudicing the rights of the adverse party, every written motion shall be set for hearing by
the applicant.
Every written motion required to be heard and the notice of the hearing thereof shall be
served in such a manner as to ensure its receipt by the other party at least three (3) days
before the date of hearing, unless the court for good cause sets the hearing on shorter
notice.
Sec. 5. Notice of hearing. The notice of hearing shall be addressed to all parties concerned,
and shall specify the time and date of the hearing which must not be later than ten (10)
days after the filing of the motion. (Emphasis ours)
The general rule is that the three-day notice requirement in motions under Sections 4 and 5
of the Rules of Court is mandatory. It is an integral component of procedural due
process.17 "The purpose of the three-day notice requirement, which was established not for
the benefit of the movant but rather for the adverse party, is to avoid surprises upon the
latter and to grant it sufficient time to study the motion and to enable it to meet the
arguments interposed therein."18
"A motion that does not comply with the requirements of Sections 4 and 5 of Rule 15 of the
Rules of Court is a worthless piece of paper which the clerk of court has no right to receive
and which the court has no authority to act upon."19 "Being a fatal defect, in cases of
motions to reconsider a decision, the running of the period to appeal is not tolled by their
filing or pendency."20
Nevertheless, the three-day notice requirement is not a hard and fast rule. When the
adverse party had been afforded the opportunity to be heard, and has been indeed heard
through the pleadings filed in opposition to the motion, the purpose behind the three-day
notice requirement is deemed realized. In such case, the requirements of procedural due
process are substantially complied with. Thus, in Preysler, Jr. v. Manila Southcoast
Development Corporation,21 the Court ruled that:
The three-day notice rule is not absolute. A liberal construction of the procedural rules is
proper where the lapse in the literal observance of a rule of procedure has not prejudiced
the adverse party and has not deprived the court of its authority. Indeed, Section 6, Rule 1 of

the Rules of Court provides that the Rules should be liberally construed in order to promote
their objective of securing a just, speedy and inexpensive disposition of every action and
proceeding. Rules of procedure are tools designed to facilitate the attainment of justice, and
courts must avoid their strict and rigid application which would result in technicalities that
tend to frustrate rather than promote substantial justice.
In Somera Vda. De Navarro v. Navarro, the Court held that there was substantial compliance
of the rule on notice of motions even if the first notice was irregular because no prejudice
was caused the adverse party since the motion was not considered and resolved until after
several postponements of which the parties were duly notified.
Likewise, in Jehan Shipping Corporation v. National Food Authority, the Court held that
despite the lack of notice of hearing in a Motion for Reconsideration, there was substantial
compliance with the requirements of due process where the adverse party actually had the
opportunity to be heard and had filed pleadings in opposition to the motion. The Court held:
This Court has indeed held time and again, that under Sections 4 and 5 of Rule 15 of the
Rules of Court, mandatory is the requirement in a motion, which is rendered defective by
failure to comply with the requirement. As a rule, a motion without a notice of hearing is
considered pro forma and does not affect the reglementary period for the appeal or the filing
of the requisite pleading.
As an integral component of the procedural due process, the three-day notice required by
the Rules is not intended for the benefit of the movant. Rather, the requirement is for the
purpose of avoiding surprises that may be sprung upon the adverse party, who must be
given time to study and meet the arguments in the motion before a resolution of the
court.1wphi1 Principles of natural justice demand that the right of a party should not be
affected without giving it an opportunity to be heard.
The test is the presence of opportunity to be heard, as well as to have time to study the
motion and meaningfully oppose or controvert the grounds upon which it is based. x x
x22(Emphasis supplied and citations omitted)
It is undisputed that the hearing on the motion for reconsideration filed by the spouses
Cabrera was reset by the RTC twice with due notice to the parties; it was only on October 26,
2007 that the motion was actually heard by the RTC. At that time, more than two months
had passed since the respondent received a copy of the said motion for reconsideration on
August 21, 2007. The respondent was thus given sufficient time to study the motion and to
enable him to meet the arguments interposed therein. Indeed, the respondent was able to
file his opposition thereto on September 20, 2007.
Notwithstanding that the respondent received a copy of the said motion for reconsideration
four days after the date set by the spouses Cabrera for the hearing thereof, his right to due
process was not impinged as he was afforded the chance to argue his position. Thus, the R
TC erred in denying the spouses Cabrera's motion for reconsideration based merely on their
failure to comply with the three-day notice requirement.
WHEREFORE, in consideration of the foregoing disquisitions, the instant petition is GRANTED.
The Decision dated October 21, 2009 and the Resolution dated March 26, 2012 of the Court
of Appeals in CA-G.R. SP No. 03392, are hereby REVERSED and SET ASIDE. The case is
hereby REMANDED to the Regional Trial Court of Mandaue City, Branch 56, to resolve the
Motion for Reconsideration filed by the spouses Cabrera on the merits within five (5) days
from the finality of this Decision.

SO ORDERED.
SECOND DIVISION
[G.R. No. 141116. February 17, 2003]
DAMASO SEBASTIAN and TOMASA CARDENAS, petitioners, vs. HON. HORACIO R.
MORALES, Secretary of the Department of Agrarian Reform, LEONILA
SARENAS[1], JOSEPHINE SARENAS-DAYRIT, EVANGELINE SARENAS, ESTRELITA
SARENAS TAN, CECILIO MARCOS SARENAS, MANUEL DEL SARENAS, DAISY
RITA SARENAS, and JOY SARENAS, respondents.
DECISION
QUISUMBING, J.:
On appeal by certiorari is the decision[2] of the Court of Appeals dated March 9, 1999 in
CA-G.R. SP No. 51288, which dismissed petitioners special civil action for certiorari and
prohibition on the ground that petitioners pursued the wrong mode of appeal. Equally
assailed is the resolution[3] of the appellate court dated December 10, 1999, which denied
petitioners motion for reconsideration.
The facts, as gleaned from the record, are as follows:
Private respondents Leonila Sarenas, Josephine Sarenas-Dayrit, Evangeline Sarenas,
Estrellita Sarenas Tan, Cecilio Marcos Sarenas, Manuel Gil Sarenas, Daisy Rita Sarenas, and
Joy Sarenas are the heirs of the late Guillermo Sarenas, who died intestate on June 27, 1986.
During his lifetime, Guillermo owned the following agricultural landholdings, all located in
Samon and Mayapyap Sur, Cabanatuan City:
1. Agricultural lot with an area of 1.6947 hectares covered by TCT No. NT-8607 and
tenanted by Juanito Gonzales;
2. Agricultural lot with an area of 3.1663 hectares covered by TCT No. NT-8608, with
petitioner Damaso Sebastian as the tenant; and
3. Agricultural lot with an area of 2.2723 hectares registered under TCT No. NT8609, with Perfecto Mana as the tenant.
In addition to the foregoing properties, Guillermo was also the registered owner of a
parcel of agricultural land located at San Ricardo, Talavera, Nueva Ecija, with a total area of
4.9993 hectares, under TCT No. NT-143564. This property was, in turn, tenanted by Manuel
Valentin and Wenceslao Peneyra.
The tenants tilling the farm lots covered by TCT Nos. NT-8607, 8608, and 8609 had
already been issued emancipation patents pursuant to P.D. No. 27. [4]

On July 14, 1993, private respondents filed an application with the Department of
Agrarian Reform (DAR) Regional Office in San Fernando, Pampanga, docketed as No. A-03031219-96, for retention of over five hectares of the late Guillermos landholdings. Among the
lots which private respondents sought to retain under Section 6 of the Comprehensive
Agrarian Reform Law (R.A. No. 6657)[5] were those covered by TCT Nos. NT-8608 and 8609.
On June 6, 1997, the DAR Regional Office in San Fernando, Pampanga granted private
respondents application, thus:
WHEREFORE, premises considered, an ORDER is hereby issued:
1. GRANTING the Application for Retention of not more than five (5) hectares of the
Heirs of the late Guillermo Sarenas on their agricultural landholdings covered by
TCT Nos. NT-TCT-8608 and TCT-8609 situated at Samon and Mayapyap Sur,
Cabanatuan City, and which area must be compact and contiguous and least
prejudicial to the entire landholdings and majority of the farmers therein;
2. DIRECTING the Heirs of the late Guillermo Sarenas o[r] their duly authorized
representative to coordinate with the MARO concerned for the segregation of
their retained area at their own expense and to submit a copy of the segregation
plan within thirty (30) days from approval thereof;
3. MAINTAINING the tenants in the retained areas as lessees thereof pursuant to RA
3844 as amended; and
4. ACQUIRING the other agricultural landholdings in excess of the retained area, and
to distribute the same to identified qualified farmer-beneficiaries pursuant to RA
6657.
SO ORDERED.[6]
On June 16, 1997, petitioner Sebastian moved for reconsideration of the foregoing order
before the DAR Regional Director, Region III, which docketed the case as A.R. Case No. LSD
1083-97. The DAR Regional Director found that the order dated June 6, 1997 in Docket No. A0303-1219-96 was contrary to law for violating Section 6 of RA No. 6657 [7] and its
Implementing Rules and Regulations. He then issued a new order dated October 23, 1997,
which instead allowed private respondents to retain a parcel of land with an area of 4.9993
hectares, covered by TCT No. 143564, located at San Ricardo, Talavera, Nueva Ecija.
Private respondents then appealed the order of October 23, 1997 to the DAR Secretary.
On June 18, 1998, the Secretary of Agrarian Reform set aside the order dated October
23, 1997, and in lieu thereof issued a new one the decretal portion of which reads:
WHEREFORE, premises considered, the 23 October 1997 Order of RD Herrera is hereby SET
ASIDE and a new one issued:

1. GRANTING the heirs of Guillermo Sarenas the right to retain 2.8032 has. of the
landholding covered by TCT No. 8608 located at Cabanatuan City;
2. AFFIRMING the validity of the coverage of the landholdings covered by TCT Nos.
8607, 8609 and 143564 located at Cabanatuan City and Talavera, Nueva Ecija
respectively;
3. MAINTAINING the tenants affected in the retained area as leaseholders thereof
pursuant to RA 3844;
4. DIRECTING the MARO/PARO to determine the qualification status of the FB whose
respective tillage is embraced under TCT No. 8608, subject of the pending
controversy with the DARAB; and
5. DIRECTING the Heirs of the late Guillermo Sarenas or their duly authorized
representative to coordinate with the MARO concerned for the segregation of
their retained area at their own expense and to submit a copy of the
segregation plan within 30 days from approval thereof.
SO ORDERED.[8]
Petitioner Sebastian then filed a motion for reconsideration, but this motion was denied
by the DAR Secretary in an order dated January 26, 1999, the dispositive portion of which
states:
WHEREFORE, premises considered, Order is hereby issued DENYING the instant Motion for
Reconsideration for utter lack of merit. Accordingly, as far as this Office is concerned, this
case is considered closed. Further, all persons, other than the recognized tenant-farmers,
are hereby ordered to cease and desist from further entering and undertaking any activity
on the subject landholdings.
SO ORDERED.[9]
The Secretary also found that petitioners appeared to have waived their rights over the
tenanted land in favor of Clemente Bobares and Luzviminda Domingo-Villaroman, and had
allowed cultivation of the landholding by a certain Ricardo Dela Paz. He ruled that it was
unlawful/illegal to allow other persons than the tenant-farmers themselves to work on the
land except if they are only working as an aide of the latter otherwise, landowners shall have
the recourse against the tenant-farmers.[10]
Consequently, on February 22, 1999, petitioners filed a special civil action for certiorari
and prohibition, with prayer for writ of preliminary mandatory injunction with the Court of
Appeals, docketed as CA-G.R. SP No. 51288.
On March 9, 1999, the Court of Appeals, without going into the merits of the case,
dismissed CA-G.R. SP No. 51288 after finding that petitioners pursued the wrong mode of
appeal.[11] It found that the orders of the DAR Secretary sought to be reviewed were final
orders for they finally disposed of the agrarian case and left nothing more to be decided on

the merits. Hence, the proper remedy available to petitioners was a petition for review
pursuant to Rule 43, Section 1 of the 1997 Rules of Civil Procedure, [12] and not a special civil
action for certiorari under Rule 65. The Court of Appeals also ruled that petitioners failed to
attach a certified true copy or duplicate original of the assailed order of June 18, 1998 as
required by Rule 46, Section 3, [13] and hence, it had no alternative but to dismiss the action
pursuant to said Section 3.
Petitioners then timely moved for reconsideration, but the appellate court in its
resolution of December 10, 1999 denied their motion.
Hence, the instant case anchored on the following sole assigned error:
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR (A) IN NOT TREATING THE
PETITION FILED BY PETITIONERS AS A PETITION FOR REVIEW; AND (B) IN NOT RESOLVING
THE CASE ON THE MERITS.[14]
Petitioners submit that the sole issue before us is whether or not the dismissal by the
Court of Appeals of the petition in CA-G.R. SP No. 51288 is valid and proper.
Petitioners admit that there was error in the remedy resorted to before the Court of
Appeals. They insist, however, that a perusal of their initiatory pleading in CA-G.R. SP No.
51288 would show that said pleading contained all the features and contents for a petition
for review under Rule 43, Section 6 of the 1997 Rules of Civil Procedure. [15] Hence, the
court a quo should have treated their special civil action for certiorari and prohibition under
Rule 65 as a petition for review under Rule 43, since dismissals based on technicalities are
frowned upon. Petitioners contend that procedural rules are but a means to an end and
should be liberally construed to effect substantial justice.
Private respondents, on the other hand, claim that the Court of Appeals did not commit
any reversible error in dismissing the petition in CA-G.R. SP No. 51288, for it simply applied
the express and categorical mandate of this Court that a petition shall be dismissed if the
wrong remedy is availed of. Private respondents argue that while it is true that the Rules of
Court should be liberally construed, it is also equally true that the Rules cannot be ignored,
since strict observance thereof is indispensable to the orderly and speedy discharge of
judicial business.
Under Rule 1, Section 6 of the 1997 Rules of Civil Procedure, [16] liberal construction of
the rules is the controlling principle to effect substantial justice. Thus, litigations should, as
much as possible, be decided on their merits and not on technicalities. This does not mean,
however, that procedural rules are to be ignored or disdained at will to suit the convenience
of a party. Procedural law has its own rationale in the orderly administration of justice,
namely, to ensure the effective enforcement of substantive rights by providing for a system
that obviates arbitrariness, caprice, despotism, or whimsicality in the settlement of disputes.
Hence, it is a mistake to suppose that substantive law and procedural law are contradictory
to each other, or as often suggested, that enforcement of procedural rules should never be
permitted if it would result in prejudice to the substantive rights of the litigants.

Litigation is not a game of technicalities, but every case must be prosecuted in


accordance with the prescribed procedure so that issues may be properly presented and
justly resolved. Hence, rules of procedure must be faithfully followed except only when for
persuasive reasons, they may be relaxed to relieve a litigant of an injustice not
commensurate with his failure to comply with the prescribed procedure. Concomitant to a
liberal application of the rules of procedure should be an effort on the part of the party
invoking liberality to explain his failure to abide by the rules. [17]
In the instant case, petitioners failed to show any compelling reason for not resorting to
the proper remedy. Instead, we find from our perusal of their pleadings before the appellate
court that they stoutly and persistently insisted that the extraordinary remedy of certiorari
was their correct remedy. First, in instituting CA-G.R. SP No. 51288, petitioners categorically
invoked the jurisdiction of the Court of Appeals to have the questioned orders of the DAR
Secretary declared null and void for having been issued and promulgated with grave abuse
of discretion . . . a mounting to lack of jurisdiction. [18] Note that it is precisely the office of an
action for certiorari under Rule 65 to correct errors of jurisdiction. Second, after the appellate
court dismissed their petition on the ground that the proper remedy was a petition for
review, petitioners continued to insist in their motion for reconsideration that under Section
54 of R.A. No. 6657,[19] a petition for certiorari is both adequate and proper in CA-G.R. SP No.
51288. It was only as an afterthought that they asked the appellate court to treat their
special civil action for certiorari as a petition for review, after a belated and grudging
admission that their reliance on Section 54 of R.A. No. 6657 was an honest mistake or
excusable error.
We agree with the appellate court that petitioners reliance on Section 54 of R.A. No.
6657 is not merely a mistake in the designation of the mode of appeal, but clearly an
erroneous appeal from the assailed Orders. [20]For in relying solely on Section 54, petitioners
patently ignored or conveniently overlooked Section 60 of R.A. No. 6657, the pertinent
portion of which provides that:
An appeal from the decision of the Court of Appeals, or from any order, ruling or decision of
the DAR, as the case may be, shall be by a petition for review with the Supreme Court,
within a non-extendible period of fifteen (15) days from receipt of a copy of said decision.
(Emphasis supplied.)
Section 60 of R.A. No. 6657 should be read in relation to R.A. No. 7902 expanding the
appellate jurisdiction of the Court of Appeals to include:
Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or
awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or
commissionsexcept those falling within the appellate jurisdiction of the Supreme Court in
accordance with the Constitution, the Labor Code of the Philippines under Presidential
Decree No. 442, as amended, the provisions of this Act, and of subparagraph (1) of the third
paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of
1948.[21]
With the enactment of R.A. No. 7902, this Court issued Circular 1-95 dated May 16, 1995
governing appeals from all quasi-judicial bodies to the Court of Appeals by petition for

review, regardless of the nature of the question raised. Said circular was incorporated in Rule
43 of the 1997 Rules of Civil Procedure.
Section 61 of R.A. No. 6657 [22] clearly mandates that judicial review of DAR orders or
decisions are governed by the Rules of Court. The Rules direct that it is Rule 43 that governs
the procedure for judicial review of decisions, orders, or resolutions of the DAR Secretary. By
pursuing a special civil action for certiorari under Rule 65 rather than the mandatory petition
for review under Rule 43, petitioners opted for the wrong mode of appeal. Pursuant to the
fourth paragraph of Supreme Court Circular No. 2-90, [23] an appeal taken to the Supreme
Court or the Court of Appeals by the wrong or inappropriate mode shall be dismissed.
Therefore, we hold that the Court of Appeals committed no reversible error in dismissing CAG.R. SP No. 51288 for failure of petitioners to pursue the proper mode of appeal.
But should the appellate court have treated the petition for the extraordinary writs of
certiorari and prohibition in CA-G.R. SP No. 51288 as a petition for review as petitioners
insist?
That a petition for certiorari under Rule 65 should pro forma satisfy the requirements for
the contents of a petition for review under Rule 43 does not necessarily mean that one is the
same as the other. Or that one may be treated as the other, for that matter. A petition for
review is a mode of appeal, while a special civil action for certiorari is an extraordinary
process for the correction of errors of jurisdiction. It is basic remedial law that the two
remedies are distinct, mutually exclusive,[24] and antithetical. The extraordinary remedy of
certiorari is proper if the tribunal, board, or officer exercising judicial or quasi-judicial
functions acted without or in grave abuse of discretion amounting to lack or excess of
jurisdiction and there is no appeal or any plain, speedy, and adequate remedy in law. [25] A
petition for review, on the other hand, seeks to correct errors of judgment committed by the
court, tribunal, or officer. In the instant case, petitioners failed to show any grave abuse of
discretion amounting to want of jurisdiction on the part of the DAR Secretary. When a court,
tribunal, or officer has jurisdiction over the person and the subject matter of the dispute, the
decision on all other questions arising in the case is an exercise of that jurisdiction.
Consequently, all errors committed in the exercise of said jurisdiction are merely errors of
judgment. Under prevailing procedural rules and jurisprudence, errors of judgment are not
proper subjects of a special civil action for certiorari. [26] For if every error committed by the
trial court or quasi-judicial agency were to be the proper subject of review by certiorari, then
trial would never end and the dockets of appellate courts would be clogged beyond
measure. Hence, no error may be attributed to the appellate court in refusing to grant
petitioners request that their petition for certiorari under Rule 65 be treated as a petition for
review under Rule 43.
As a final salvo, petitioners urge us to review the factual findings of the DAR Secretary.
Settled is the rule that factual questions are not the proper subject of an appeal by
certiorari, as a petition for review under Rule 45 is limited only to questions of law.
[27]
Moreover, it is doctrine that the errors which may be reviewed by this Court in a petition
for certiorari are those of the Court of Appeals,[28] and not directly those of the trial court or
the quasi-judicial agency, tribunal, or officer which rendered the decision in the first
instance. Finally, it is settled that factual findings of administrative agencies are generally
accorded respect and even finality by this Court, if such findings are supported by

substantial evidence,[29] a situation that obtains in this case. The factual findings of the
Secretary of Agrarian Reform who, by reason of his official position, has acquired expertise in
specific matters within his jurisdiction, deserve full respect and, without justifiable reason,
ought not to be altered, modified or reversed.
WHEREFORE, the instant petition is DENIED. The assailed decision of the Court of
Appeals in CA-G.R. SP No. 51288 dated March 4, 1999, as well as the resolution of the
appellate court dated December 10, 1999, is AFFIRMED. No pronouncement as to costs.
SO ORDERED.

Republic of the Philippines


Supreme Court
Manila
SECOND DIVISION
ASIA UNITED BANK,
Petitioner,

G.R. No. 188051


Present:
CARPIO MORALES, J.,*
NACHURA,**
Acting Chairperson,
PERALTA,
PEREZ,*** and
MENDOZA, JJ.

- versus -

Promulgated:
GOODLAND COMPANY, INC.,
Respondent.

November 22, 2010

x------------------------------------------------------------------------------------x
DECISION
NACHURA, J.:

Petitioner assails the February 16, 2009 Decision [1] and the May 18, 2009
Resolution[2] of the Court of Appeals (CA) in CA-G.R. SP No. 103304, annulling the August 23,
2007[3] and February 15, 2008[4] Orders of the Regional Trial Court (RTC) of Makati City,
Branch 150, which in turn denied due course to respondent Goodland Company, Inc.s
(GOODLAND) notice of appeal for invalid substitution of counsel.
The antecedents:
An Ex-Parte Application/Petition for the Issuance of Writ of Possession [5] was filed by
Asia United Bank (AUB) over a 5,801-square- meter lot located in Makati City and covered by
Transfer Certificate of Title (TCT) No. 223120 of the Registry of Deeds of Makati in AUBs
name. The property was previously registered in the name of GOODLAND under TCT No.
192674 (114645).
The petition alleged that, on February 20, 2000, GOODLAND executed a Third Party Real
Estate Mortgage on the property in favor of AUB to secure the P202 million credit
accommodation

extended

by

the

latter

to

Radiomarine

Network

(Smartnet)

Inc.

(Radiomarine).
When Radiomarine defaulted in the payment of its obligation, AUB instituted extrajudicial
foreclosure proceedings against the real estate mortgage. At the public auction sale held on
December 4, 2006, AUB was declared the highest bidder. On the same date, a Certificate of
Sale was issued in its name and registered with the Registry of Deeds of Makati City.
With the expiration of the redemption period, AUB proceeded to execute an Affidavit of
Consolidation of Ownership, through its First Vice-President, Florante del Mundo. AUB
thereafter secured a Certificate Authorizing Registration from the Bureau of Internal Revenue
to facilitate the transfer of the title.
On December 8, 2006, TCT No. 192674 (114645) was cancelled and, in lieu thereof,
TCT No. 223120 was issued in the name of AUB.
GOODLAND, through its counsel, Atty. Antonio Bautista (Atty. Bautista), opposed the
petition, denying that it executed the real estate mortgage. GOODLAND further averred that
the signature of the notary public appearing on the deed was a forgery, and that no
technical description of the property supposedly mortgaged was indicated therein.

Concluding that AUBs title was derived from the foreclosure of a fake mortgage, GOODLAND
prayed for the petitions denial.[6]
On March 1, 2007, the RTC issued the writ of possession sought by AUB. It ratiocinated that,
as the purchaser of the property at the foreclosure sale and as the new title holder thereof,
AUBs right of possession and enjoyment of the same had become absolute. [7]
GOODLAND,

through

reconsideration

[8]

its

counsel

on

record,

Atty.

Bautista,

and a supplemental motion for reconsideration,

[9]

filed

motion

for

but both were denied in

the Order[10] dated April 25, 2007, which was received by Atty. Bautista on June 15, 2007. [11]
Relentless, GOODLAND sought recourse with the CA by initially filing a Notice of
Appeal

[12]

with the RTC, through a certain Atty. Lito Mondragon (Atty. Mondragon) of the

Mondragon & Montoya Law Offices. On August 23, 2007, the RTC issued an Order [13] denying
due course to GOODLANDs notice of appeal for being legally inutile due to Atty. Mondragons
failure to properly effect the substitution of former counsel on record, Atty. Bautista.
GOODLAND moved for reconsideration, but the same was denied in the Order dated
February 15, 2008.[14]
GOODLAND

elevated

the

incident

to

the

CA

by

way

of

special

civil acton for certiorari. In its February 16, 2009 Decision, the CA granted the petition and
directed the RTC to give due course to the notice of appeal, thus:
WHEREFORE,
the
petition
is
hereby
GRANTED.
The
assailed Orders dated August 23, 2007 and February 15, 2008 of the Regional
Trial Court, Branch 150, Makati City are ANNULLED and SET ASIDE. The trial
court is DIRECTED to give due course to petitioners Notice of Appeal.
SO ORDERED.[15]

Aggrieved, AUB moved for reconsideration, but the CA denied the motion in its
Resolution dated May 18, 2009. Hence, the present petition for review on certiorari,
[16]

praying for the reinstatement of the RTC Order.


The petition is meritorious.
Under Rule 138, Section 26 of the Rules of Court, for a substitution of attorney to be

effectual, the following essential requisites must concur: (1) there must be a written
application for substitution; (2) it must be filed with the written consent of the client; (3) it

must be with the written consent of the attorney substituted; and (4) in case the consent of
the attorney to be substituted cannot be obtained, there must at least be proof of notice that
the motion for substitution was served on him in the manner prescribed by the Rules of
Court.

[17]

The courts a quo were uniform and correct in finding that Atty. Mondragon failed to
observe the prescribed procedure and, thus, no valid substitution of counsel was
actualized. However, they took divergent postures as to the repercussion of such noncompliance, thereby igniting the herein controversy.
The RTC strictly imposed the rule on substitution of counsel and held that the notice
of appeal filed by Atty. Mondragon was a mere scrap of paper.

However, relying on our pronouncement in Land Bank of the Philippines v. Pamintuan


Development Co.,[18] the CA brushed aside the procedural lapse and took a liberal stance on
considerations of substantial justice, viz.:
It is a far better and more prudent course of action for the court to
excuse a technical lapse and afford the parties a review of the case on appeal
to attain the ends of justice rather than dispose of the case on technicality
and cause a grave injustice to the parties, giving a false impression of speedy
disposal of cases while actually resulting in more delay, if not a miscarriage of
justice. Thus, substantial justice would be better served by giving due course
to petitioners notice of appeal.[19]

AUB argues that the liberality applied by the Court in Land Bank is incompatible with
the herein controversy, and that Pioneer Insurance and Surety Corporation v. De Dios
Transportation Co., Inc.,[20]which espouses the same view adopted by the RTC, is more
appropriate.
GOODLAND, on the other hand, insists that the CA committed no reversible error in
ordering that the notice of appeal be allowed in order not to frustrate the ends of substantial
justice.
We agree with AUB. A revisit of our pronouncements in Land Bank and Pioneer is in
order.

In Land Bank, we held that the Department of Agrarian Reform Adjudication Board
gravely abused its discretion when it denied due course to the Notice of Appeal and Notice
of Entry of Appearance filed by petitioners new counsel for failure to effect a valid
substitution of the former counsel on record.
We clarified that the new counsel never intended to replace the counsel of record
because, although not so specified in the notice, they entered their appearance as
collaborating counsel. Absent a formal notice of substitution, all lawyers who appear before
the court or file pleadings in behalf of a client are considered counsel of the latter. We
pursued a liberal application of the rule in order not to frustrate the just, speedy, and
inexpensive determination of the controversy.
In Pioneer, we adopted a strict posture and declared the notice of withdrawal of
appeal filed by appellants new counsel as a mere scrap of paper for his failure to file
beforehand a motion for the substitution of the counsel on record.
Provoking such deportment was the absence of a special power of attorney
authorizing the withdrawal of the appeal in addition to the lack of a proper substitution of
counsel. More importantly, we found that the withdrawal of the appeal was calculated to
frustrate the satisfaction of the judgment debt rendered against appellant, thereby
necessitating a rigid application of the rules in order to deter appellant from benefiting from
its own deleterious manipulation thereof.
The emerging trend of jurisprudence is more inclined to the liberal and flexible application of
the Rules of Court. However, we have not been remiss in reminding the bench and the bar
that zealous compliance with the rules is still the general course of action. Rules of
procedure are in place to ensure the orderly, just, and speedy dispensation of cases; [21] to
this end, inflexibility or liberality must be weighed. Therelaxation or suspension of
procedural rules or the exemption of a case from their operation is warranted only by
compelling reasons or when the purpose of justice requires it. [22]
As early as 1998, in Hon. Fortich v. Hon. Corona,[23] we expounded on these guiding
principles:
Procedural rules, we must stress, should be treated with utmost
respect and due regard since they are designed to facilitate the adjudication
of cases to remedy the worsening problem of delay in the resolution of rival

claims and in the administration of justice. The requirement is in pursuance to


the bill of rights inscribed in the Constitution which guarantees that all
persons shall have a right to the speedy disposition of their cases before all
judicial, quasi-judicial and administrative bodies. The adjudicatory bodies and
the parties to a case are thus enjoined to abide strictly by the rules. While it is
true that a litigation is not a game of technicalities, it is equally true that
every case must be prosecuted in accordance with the prescribed procedure
to ensure an orderly and speedy administration of justice. There have been
some instances wherein this Court allowed a relaxation in the application of
the rules, but this flexibility was never intended to forge a bastion for erring
litigants to violate the rules with impunity. A liberal interpretation and
application of the rules of procedure can be resorted to only in proper cases
and under justifiable causes and circumstances.

In Sebastian v. Hon. Morales,[24] we straightened out the misconception that the enforcement
of procedural rules should never be permitted if it would prejudice the substantive rights of
litigants:
Under Rule 1, Section 6 of the 1997 Rules of Civil Procedure, liberal
construction of the rules is the controlling principle to effect substantial
justice. Thus, litigations should, as much as possible, be decided on their
merits and not on technicalities. This does not mean, however, that
procedural rules are to be ignored or disdained at will to suit the convenience
of a party. Procedural law has its own rationale in the orderly administration of
justice, namely, to ensure the effective enforcement of substantive rights by
providing for a system that obviates arbitrariness, caprice, despotism, or
whimsicality in the settlement of disputes. Hence, it is a mistake to suppose
that substantive law and procedural law are contradictory to each other, or as
often suggested, that enforcement of procedural rules should never be
permitted if it would result in prejudice to the substantive rights of the
litigants.
x x x. Hence, rules of procedure must be faithfully followed except only
when for persuasive reasons, they may be relaxed to relieve a litigant of an
injustice not commensurate with his failure to comply with the prescribed
procedure. x x x.
Indeed, the primordial policy is a faithful observance of the Rules of Court, and their
relaxation or suspension should only be for persuasive reasons and only in meritorious
cases, to relieve a litigant of an injustice not commensurate with the degree of his
thoughtlessness in not complying with the procedure prescribed. [25] Further, a bare
invocation of the interest of substantial justice will not suffice to override a stringent
implementation of the rules.[26]
A reading of the CAs Decision readily shows that the leniency it granted GOODLAND
was merely anchored on substantial justice. The CA overlooked GOODLANDs failure to

advance meritorious reasons to support its plea for the relaxation of Rule 138, Section 26.
The fact that GOODLAND stands to lose a valuable property is inadequate to dispense with
the exacting imposition of a rather basic rule.
More importantly, the CA failed to realize that the ultimate consequences that will
come about should GOODLANDs appeal proceed would in fact contravene substantial
justice. The CA and, eventually, this Court will just re-litigate an otherwise non-litigious
matter and thereby compound the delay GOODLAND attempts to perpetrate in order to
prevent AUB from rightfully taking possession of the property.
It is a time-honored legal precept that after the consolidation of titles in the buyer's name,
for failure of the mortgagor to redeem, entitlement to a writ of possession becomes a matter
of right.[27] As the confirmed owner, the purchasers right to possession becomes absolute.
[28]

There is even no need for him to post a bond,[29] and it is the ministerial duty of the courts

to issue the same upon proper application and proof of title. [30] To accentuate the writs
ministerial character, the Court has consistently disallowed injunction to prohibit its issuance
despite a pending action for annulment of mortgage or the foreclosure itself. [31]
The nature of an ex parte petition for issuance of the possessory writ under Act No. 3135 has
been described as a non-litigious proceeding and summary in nature. [32] As an ex
parte proceeding, it is brought for the benefit of one party only, and without notice to or
consent by any person adversely interested.[33]

Subsequent proceedings in the appellate courts would merely involve a reiteration of


the foregoing settled doctrines. The issue involved in the assailed RTC issuances is
conclusively determined by the above cited legal dictum, and it would be unnecessarily
vexatious and unjust to allow the present controversy to undergo protracted litigation.
AUBs right of possession is founded on its right of ownership over the property which
it purchased at the auction sale. Upon expiration of the redemption period and consolidation
of the title to the property, its possessory rights over the same became absolute. We quote
with approval the pronouncement of the RTC, viz.:
As the purchaser of the property in the foreclosure sale to which new title has
already been issued, petitioners right over the property has become absolute,
vesting upon it the right of possession and enjoyment of the property which
this Court must aid in effecting its delivery. Under the circumstances, and

following established doctrine, the issuance of a writ of possession is a


ministerial function whereby the court exercises neither discretion nor
judgment x x x. Said writ of possession must be enforced without delay x x x.
[34]

The law does not require that a petition for a writ of possession be granted only after
documentary and testimonial evidence shall have been offered to and admitted by the
court.[35] As long as a verified petition states the facts sufficient to entitle petitioner to the
relief requested, the court shall issue the writ prayed for.[36]
Given the foregoing, we are bound to deny a liberal application of the rules on
substitution of counsel and resolve definitively that GOODLANDs notice of appeal merits a
denial, for the failure of Atty. Mondragon to effect a valid substitution of the counsel on
record. Substantial justice would be better served if the notice of appeal is disallowed. In the
same way that the appellant in Pioneer was not permitted to profit from its own
manipulation of the rules on substitution of counsel, so too can GOODLAND be not tolerated
to foster vexatious delay by allowing its notice of appeal to carry on.
WHEREFORE, premises considered, the petition is GRANTED. The February 16, 2009
Decision

and

the

May

18,

2009

Resolution

of

the

Court

of

Appeals

are

hereby ANNULLED and SET ASIDE; and the August 23, 2007 and February 15, 2008 Orders
of the Regional Trial Court of Makati City, Branch 150, are REINSTATED.

SO ORDERED.

FIRST DIVISION
[G.R. No. 136368. January 16, 2002]
JAIME TAN, JR., as Judicial Administrator of the Intestate Estate of Jaime C.
Tan, petitioner, vs. HON. COURT OF APPEALS (Ninth Special Div.) and JOSE
A. MAGDANGAL and ESTRELLA MAGDANGAL, respondents.
DECISION
PUNO, J.:
This is a petition for review of the Decision of the Court of Appeals dated July 15,
1998[1]and its Resolution dated November 9, 1998[2]denying petitioners motion for
reconsideration in CA-G.R. SP-41738.
The facts are as stated in the impugned Decision, viz:
Involved in this case is a parcel of land, designated as Lot No. 645-C, with an area of 34,829
square meters, more or less, situated in Bunawan, Davao City. The lot was once covered by
TCT No. T-72067 of the Registry of Deeds of Davao City in the name of the late Jaime C. Tan
(Tan, for short) married to Praxedes V. Tan.
From the petition, the motion to dismiss petition, their respective annexes and other
pleadings, we gather the following factual antecedents:
On January 22, 1981, Tan, for a consideration of P59,200.00, executed a deed of absolute
sale over the property in question in favor of

spouses Jose Magdangal and Estrella Magdangal. Simultaneous with the execution of
this deed, the same contracting parties entered into another agreement whereunder Tan
was given one (1) year within which to redeem or repurchase the property.
Albeit given several opportunities and/or extensions to exercise the option, Tan failed to
redeem the property until his death on January 4, 1988.
On May 2, 1988, Tans heirs filed before the Regional Trial Court at Davao City a suit against
the Magdangals for reformation of instrument. Docketed as CIVIL CASE NO. 19049-88, the
complaint alleged that, while Tan and the Magdangalsdenominated their agreement as deed
of absolute sale, their real intention was to conclude an equitable mortgage.
Barely hours after the complaint was stamped received, the Magdangals were able to have
Tans title over the lot in question canceled and to secure in their names TCT No. T134470. This development prompted the heirs of Tan, who were to be later substituted by
Jaime V. Tan, Jr. (Tan, Jr.) as plaintiff, to file a supplemental complaint.
The intervening legal tussles are not essential to this narration. What is material is that on
June 4, 1991, Branch 11 of the Regional Trial Court of Davao City rendered judgment finding
for Tan, Jr., as plaintiff therein. The dispositive portion of the decision reads:.
WHEREFORE, judgment is rendered:
1. The Deed of Absolute Sale (Exhibits B, B-1) is, in accordance with the true intention of the
parties, hereby declared and reformed an equitable mortgage;
2. The plaintiff is ordered to pay the defendants within 120 days after the finality of
this decision P59,200 plus interest at the rate of 12% per annum from May 2, 1988, the
date the complaint was filed, until paid;
3. In order to avoid multiplicity of suits and to fully give effect to the true intention of the
parties, upon the payment of the aforesaid amount, TCT No. T-134470 in the name of
defendants Jose Magdangal and Estrella Magdangal (Exh. 13) and shall be deemed canceled
and null and void and TCT No. T-72067 in the name of Jaime C. Tan and Praxedes Valles Tan
(Exh. A) be reinstated.
No pronouncement as to costs.
SO ORDERED. (Annex B, Petition; Emphasis added).
From the above, the Magdangals appealed to this Court in CA-G.R. CV No. 33657.
In a decision promulgated on September 28, 1995, this Court, thru its then Special Third
Division, affirmed in toto the appealed decision of the lower court. Copy of
this affirmatory judgment was each received by the Magdangals and Tan, Jr. onOctober 5,
1995.

On March 13, 1996, the Clerk of this Court entered in the Book of Entries of Judgment the
Decision in CA-G.R. CV No. 33657 and issued the corresponding Entry of Judgment which, on
its face, stated that the said Decision has on October 21, 1995 become final
and executory (Annex L, Petition; Emphasis added).
On March 21, 1996, the Magdangals filed in the lower court a MOTION FOR CONSOLIDATION
AND WRIT OF POSSESSION, therein alleging that they did not appeal from the aforesaid
decision of this Court, adding [T]hat the appealed judgment of the Court of Appeals has
become final and executory 15 days from October 5, 1995 or up to October 20, 1995, which
the 120 days redemption period commences. And noting that the redemption period has
expired without Tan, Jr. exercising his option, the Magdangals thus prayed that the title in the
name of Jaime C. Tan and Praxedes Tan be consolidated and confirmed in the name of the
(Magdangals) x x x and pending such issuance, a writ of possession be ordered issued
(Annex C, Petition).
In opposition to this motion (Annex F, Petition), Tan, Jr. alleged, among other things, that
until an entry of judgment has been issued by the Court of Appeals and copy thereof
furnished the parties, the appealed decision of the court a quo in this case cannot be
considered final and executory. Pressing the point, Tan, Jr.,
citing Cueto vs. Collantes, infra., would then assert that the period of redemption on his part
commenced to run from receipt of entry of judgment in CA-G.R. CV No. 33657.
Meanwhile, Tan, Jr. via a motion for execution dated March 27, 1996, which he filed directly
with this court, prayed this court to direct the court a quo to issue the corresponding writ of
execution in Civil Case No. 19049-88. In a related move, Tan, Jr. filed on April 16,
1996, a MANIFESTATION AND MOTION therein advising the court a quo of his intention to
redeem the property in question and of the fact that, on such date, he has deposited with its
clerk of court the repurchase price, plus interest, as required by its original decision. By way
of relief, Tan, Jr. prayed that the Magdangals be ordered to claim the amount thus deposited
and the Register of Deeds of Davao City, to reinstate the title of Jaime Tan and PraxedesTan.
Jointly acting on the aforementioned MOTION FOR CONSOLIDATION AND WRIT OF
POSSESSION of the Magdangals (Annex C, Petition), MANIFESTATION AND MOTION of Tan, Jr.
(Annex I, Petition), the court a quo presided by the respondent judge, came out with the first
challenged order of June 10, 1996 (Annex N, Petition), dispositively reading, as follows:
WHEREFORE, x x x the Motion for Consolidation and a Writ of Possession is hereby DENIED
for lack of merit.
The deposit of the amount of P116,032.00 made by plaintiff with the Office of the Clerk of
Court x x x on April 17, 1996 is hereby considered full payment of the redemption price and
the Clerk of Court is hereby ordered to deliver said amount to herein defendants.
The Register of Deeds of Davao City x x x is hereby directed to cancel TCT No. T-134470 in
the name of Jose Magdangal and Estrella Magdangal and, thereafter, to reinstate TCT No.
72067 in the name of Jaime C. Tan and Praxedes Valles Tan and to submit her compliance
thereto within ten (10) days from receipt of this Order.

SO ORDERED.
Explaining her action, the respondent judge wrote in the same order:
Following the ruling of the Supreme Court in Cueto vs. Collantes, et al., 97 Phil. 325, the 120
days period for plaintiff to pay the amount of P59,200.00 plus interest x x x should be
reckoned from the date of Entry of Judgment x x x which was March 13, 1996. The
plaintiff made a deposit on April 17, 1996 well within the 120-day period mandated by the
decision of this Court.
In due time, the Magdangals moved for a reconsideration. However, in her next assailed
order of July 24, 1996 (Annex R, Petition), the respondent judge denied the motion for being
pro-forma and fatally defective.[3]
Petitioner assails the aforequoted Decision as follows:
I. Petitioners right to due process was violated when the Court of Appeals rendered
a judgment on the merits of private respondents petition without granting to
petitioner the opportunity to controvert the same.
II. Appeal not certiorari was the appropriate remedy of private respondents as there
was no grave abuse of discretion as to amount to lack of or excess of jurisdiction
on the part of the trial judge. Neither is delay in resolving the main case a ground
for giving due course to the petition.
III. Cueto vs. Collantes, 97 Phil. 325, was disregarded by the Court of Appeals in
resolving the petition of private respondents. It is still good case law and was in
effect made a part of section 2 of Rule 68 of the 1997 Rules of Civil Procedure on
Foreclosure of Mortgage.
IV. The St. Dominic vs. Intermediate Appellate Court, 138 SCRA 242 case is not
applicable
to
the
case
at
bar;
on
the
other
hand
the
ruling in Gutierrez Hermanos vs. de La Riva, 46 Phil. 827, applies.
V. Equity considerations justify giving due course to this petition.[4](emphasis ours)
We will immediately resolve the key issue of what rule should govern the finality of
judgment favorably obtained in the trial court by the petitioner.
The operative facts show that in its Decision of June 4, 1991, the trial court held that: (1)
the contract between the parties is not an absolute sale but an equitable mortgage; and (2)
petitioner Tan should pay to the respondents Magdangal within 120 days after
the finality of this decision P59,200.00 plus interest at the rate of 12% per annum from May
2, 1988, the date the complaint was filed, until paid. [5]
On September 28, 1995 in CA-G.R. CV No. 33657, the Special Third Division of the Court
of Appeals affirmed the decision of the trial court in toto. Both parties received the decision
of the appellate court on October 5, 1995. On March 13, 1996, the clerk of court of the

appellate court entered in the Book of Entries of Judgement the decision in CA-G.R. CV No.
33657 and issued the corresponding Entry of Judgment which, on its face, stated that the
said decision has on October 21, 1995 become final and executory.[6]
The respondents Magdangal filed in the trial court a Motion for Consolidation and Writ
of Possession.[7]They alleged that the 120-day period of redemption of the petitioner has
expired. They reckoned that the said period began 15 days after October 5, 1995, the date
when the finality of the judgment of the trial court as affirmed by the appellate court
commenced to run.
On the other hand, petitioner filed on March 27, 1996 a motion for execution in the
appellate court praying that it direct the court a quo to issue the corresponding writ of
execution in Civil Case No. 19049-88.[8]On April 17, 1996, petitioner deposited
with the clerk of court the repurchase price of the lot plus interest as ordered by the
decision.
On June 10, 1996, the trial court allowed the petitioner to redeem the lot in question. It
ruled that the 120-day redemption period should be reckoned from the date of Entry of
Judgment in the appellate court or fromMarch 13, 1996. [9]The redemption price was
deposited on April 17, 1996. As aforestated, the Court of Appeals set aside the ruling of the
trial court.
From 1991-1996, the years relevant to the case at bar, the rule that governs finality of
judgment is Rule 51 of the Revised Rules of Court. Its sections 10 and 11 provide:
SEC. 10. Entry of judgments and final resolutions. If no appeal or motion for new trial or
reconsideration is filed within the time provided in these Rules, the judgment or final
resolution shall forthwith be entered by the clerk in the book of entries of judgments. The
date when the judgment or final resolution becomes executory shall be deemed as the date
of its entry. The record shall contain the dispositive part of the judgment or final resolution
and shall be signed by the clerk, with a certificate that such judgment or final resolution has
become final and executory. (2a, R36)
SEC. 11. Execution of judgment. Except where the judgment or final order or resolution, or a
portion thereof, is ordered to be immediately executory, the motion for its execution may
only be filed in the proper court after its entry.
In original actions in the Court of Appeals, its writ of execution shall be accompanied by
a certified true copy of the entry of judgment or final resolution and addressed to any
appropriate officer for its enforcement.
In appealed cases, where the motion for execution pending appeal is filed in the Court of
Appeals at a time that it is in possession of the original record or the record on appeal, the
resolution granting such motion shall be transmitted to the lower court from which the case
originated, together with a certified true copy of the judgment or final order to be executed,
with a directive for such court of origin to issue the proper writ for its enforcement.
This rule has been interpreted by this Court in Cueto vs. Collantes as follows:[10]

The only error assigned by appellants refer to the finding of the lower court that plaintiff can
still exercise his right of redemption notwithstanding the expiration of the 90-day period
fixed in the original decision and, therefore, defendants should execute the deed
of reconveyance required in said decision. Appellants contend that, the final judgment of the
Court of Appeals having been entered on July 8, 1953, the 90-day period for the exercise of
the right of redemption has long expired,it appearing that plaintiff deposited the redemption
money with the clerk of court only on October 17, 1953, or, after the expiration of 101
days. Appellee brands this computation as erroneous, or one not in accordance with the
procedure prescribed by the rules of court.
Appellees contention should be sustained. The original decision provides that appellee may
exercise his right of redemption within the period of 90 days from the date the judgment has
become final. It should be noted that appellee had appealed from this decision. This decision
was affirmed by the court of appeals and final judgment was entered on July 8, 1953. Does
this mean that the judgment became final on that date?
Let us make a little digression for purposes of clarification. Once a decision is rendered by
the Court of Appeals a party may appeal therefrom by certiorari by filing with the Supreme
Court a petition within 10 days from the date of entry of such decision (Section 1, Rule
46). The entry of judgment is made after it has become final, i.e., upon the expiration of 15
days after notice thereof to the parties (Section 8, Rule 53, as modified by a resolution of the
Supreme Court dated October 1, 1945). But, as Chief Justice Moran has said, such finality ***
is subject to the aggrieved partys right of filing a petition for certiorari under this section,
which means that the Court of Appeals shall remand the case to the lower court for the
execution of its judgment, only after the expiration of ten (10) days from the date of such
judgment, if no petition for certiorari is filed within that period. (1 Moran, Comments on the
Rules of Court, 1952 ed., p. 950) It would therefore appear that the date of entry
of judgment of the Court of Appeals is suspended when a petition for review is filed to
await the final entry of the resolution or decision of the Supreme Court.
Since in the present case appellee has filed a petition for review within
the reglementary period, which was dismissed by resolution of July 6, 1953, and for lack of a
motion for reconsideration the entry of final judgment was made on August 7, 1953, it
follows that the 90-day period within which appellee may exercise his right of redemption
should be counted from said date, August 7, 1953. And appellee having exercised such right
on October 17, 1953 by depositing the redemption money with the clerk of court, it is
likewise clear that the motion be filed for the exercise of such right is well taken and is within
the purview of the decision of the lower court. [11]
On April 18, 1994, this Court issued Circular No. 24-94, viz:
TO: COURT OF APPEALS, SANDIGANBAYAN, COURT OF TAX APPEALS, REGIONAL
TRIAL COURTS, METROPOLITAN TRIAL COURTS, MUNICIPAL TRIAL COURTS,
MUNICIPAL CIRCUIT TRIAL COURTS, AND ALL MEMBERS OF THE INTEGRATED BAR
OF THE PHILIPPINES

SUBJECT: RESOLUTION OF THE COURT EN BANC APPROVING AND PROMULGATING


THE REVISED PROVISION ON EXECUTION OF JUDGMENTS, SPECIFICALLY IN
APPEALED CASES, AND AMENDING SECTION 1, RULE 39 OF THE RULES OF COURT
It appears that in a number of instances, the execution of judgments in appealed cases
cannot be promptly enforced because of undue administrative delay in the remand of the
records to the court of origin, aggravated at times by misplacement or misdelivery of said
records. The Supreme Court Committee on the Revision of the Rules of Court has drafted
proposals including a provision which can remedy the procedural impasse created by said
contingencies.
Accordingly, pending approval by the Court of the revised rules on Civil Procedure, and to
provide a solution to the aforestated problems, the Court Resolved to approve and
promulgate the following section thereof on execution of judgments, amending Section 1,
Rule 39 of the Rules of Court:
Section 1. Execution upon judgments or final orders. Execution shall issue as a matter of
right, on motion, upon a judgment or order that disposes of the action or proceeding upon
expiration of the period to appeal therefrom if no appeal has been duly perfected.
If the appeal has been duly perfected and finally resolved, such execution may forthwith be
applied for in the lower court from which the action originated, on motion of the
judgment obligee, submitting therewith certified true copies of the judgment or judgments
or the final order or orders sought to be enforced and of the entry thereof, with notice to the
adverse party.
The appellate court may, on motion in the same case, when the interest of justice so
requires, direct the court of origin to issue the writ of execution.
This resolution shall be published in two (2) newspapers of general circulation and shall take
effect on June 1, 1994.
April 18, 1994.
(Sgd.) ANDRES R. NARVASA
Chief Justice
The Circular took effect on June 1, 1994.
The 1997 Revised Rules of Civil Procedure, however, amended the rule on finality of
judgment by providing in section 1, Rule 39 as follows:
Section 1. Execution upon judgments or final orders. Execution shall issue as a matter of
right, on motion, upon a judgment or order that disposes of the action or proceeding upon
the expiration of the period to appeal therefrom if no appeal has been duly perfected. (1a)

If the appeal has been duly perfected and finally resolved, the execution may forthwith be
applied for in the court of origin, on motion of the judgment obligee, submitting therewith
certified true copies of the judgment or judgments or final order or orders sought to be
enforced and of the entry thereof, with notice to the adverse party.
The appellate court may, on motion in the same case, when the interest of justice so
requires, direct the court of origin to issue the writ of execution.
The rationale of the new rule is explained by retired Justice F.D. Regalado as follows:[12]
1. The term final order is used in two senses depending on whether it is used on the issue
of appealability or on the issue of binding effect. For purposes of appeal, an order is final if it
disposes of the action, as distinguished from an interlocutory order which leaves something
to be done in the trial court with respect to the merits of the case (De la Cruz, et al.
vs. Paras, et al., L-41053, Feb. 27, 1976). For purposes of binding effect or whether it can be
subject of execution, an order is final or executory after the lapse of the reglementary period
to appeal and no appeal has been perfected (see Perez, et al. vs. Zulueta, L-10374, Sept. 30,
1959; cf. Denso [Phil.], Inc. vs. IAC, et al., G.R. No. 75000, Feb. 27, 1987; Montilla vs. CA, et
al., L-47968, May 9, 1988).
2. On the aspect of appealability, these revised Rules use the adjective final with respect to
orders and resolutions, since to terminate a case the trial courts issue orders while the
appellate courts and most of the quasi-judicial agencies issue resolutions. Judgments are not
so qualified since the use of the so-called interlocutory judgments is not favored in this
jurisdiction, while the categorization of an order or a resolution for purposes of denoting that
it is appealable is to distinguish them from interlocutory orders or resolutions. However, by
force of extended usage the phrase final and executory judgment is sometimes used and
tolerated, although the use of executory alone would suffice. These observations also apply
to the several and separate judgments contemplated in Rule 36, or partial judgments which
totally dispose of a particular claim or severable part of the case, subject to the power of the
court to suspend or defer action on an appeal from or further proceedings in such special
judgment, or as provided by Rule 35 on the matter of partial summary judgments which are
not considered as appealable (see Sec. 4, Rule 35 and the explanation therein).
The second paragraph of this section is an innovation in response to complaints over the
delay caused by the former procedure in obtaining a writ of execution of a judgment, which
has already been affirmed on appeal, with notice to the parties.As things then stood, after
the entry of judgment in the appellate court, the prevailing party had to wait for the records
of the case to be remanded to the court of origin when and where he could then move for
the issuance of a writ of execution.The intervening time could sometimes be substantial,
especially if the court a quo is in a remote province, and could also be availed of by the
losing party to delay or thwart actual execution.
On these considerations, the Supreme Court issued Circular No. 24-94, dated April 18, 1994,
approving and promulgating in advance this amended Section 1 of Rule 39 and declaring the
same effective as of June 1, 1994.

Under the present procedure, the prevailing party can secure certified true copies of the
judgment or final order of the appellate court and the entry thereof, and submit the same to
the court of origin with and to justify his motion for a writ of execution, without waiting for its
receipt of the records from the appellate court. That motion must be with notice to the
adverse party, with a hearing when the circumstances so require, to enable him to file any
objection thereto or bring to the attention of said court matters which may have transpired
during the pendency of the appeal and which may have a bearing on the execution sought
to enforce the judgment.
The third paragraph of this section, likewise a new provision, is due to the experience of the
appellate courts wherein the trial court, for reasons of its own or other unjustifiable
circumstances, unduly delays or unreasonably refuses to act on the motion for execution or
issue the writ therefor. On motion in the same case while the records are still with the
appellate court, or even after the same have been remanded to the lower court, the
appellate court can direct the issuance of the writ of execution since such act is merely in
the enforcement of its judgment and which it has the power to require.
It is evident that if we apply the old rule on finality of judgment, petitioner redeemed the
subject property within the 120-day period of redemption reckoned from the appellate courts
entry of judgment. The appellate court, however, did not apply the old rule but the 1997
Revised Rules of Civil Procedure. In fine, it applied the new rule retroactively and we hold
that given the facts of the case at bar this is an error.
There is no dispute that rules of procedure can be given retroactive effect. This general
rule, however, has well-delineated exceptions. We quote author Agpalo:[13]
9.17. Procedural laws.
Procedural laws are adjective laws which prescribe rules and forms of procedure of enforcing
rights or obtaining redress for their invasion; they refer to rules of procedure by which courts
applying laws of all kinds can properly administer justice. They include rules of pleadings,
practice and evidence. As applied to criminal law, they provide or regulate the steps by
which one who commits a crime is to be punished.
The general rule that statutes are prospective and not retroactive does not ordinarily apply
to procedural laws. It has been held that a retroactive law, in a legal sense, is one which
takes away or impairs vested rights acquired under laws, or creates a new obligation and
imposes a new duty, or attaches a new disability, in respect of transactions or considerations
already past. Hence, remedial statutes or statutes relating to remedies or modes of
procedure, which do not create new or take away vested rights, but only operate in
furtherance of the remedy or confirmation of rights already existing, do not come within the
legal conception of a retroactive law, or the general rule against the retroactive operation of
statutes. The general rule against giving statutes retroactive operation whose effect is to
impair the obligations of contract or to disturb vested rights does not prevent the application
of statutes to proceedings pending at the time of their enactment where they neither create
new nor take away vested rights. A new statute which deals with procedure only is
presumptively applicable to all actions those which have accrued or are pending.

Statutes regulating the procedure of the courts will be construed as applicable to actions
pending and undetermined at the time of their passage. Procedural laws are retroactive in
that sense and to that extent. The fact that procedural statutes may somehow affect the
litigants rights may not preclude their retroactive application to pending actions. The
retroactive application of procedural laws is not violative of any right of a person who may
feel that he is adversely affected. Nor is the retroactive application of procedural statutes
constitutionally objectionable. The reason is that as a general rule no vested right may
attach to, nor arise from, procedural laws. It has been held that a person has no vested right
in any particular remedy, and a litigant cannot insist on the application to the trial of his
case, whether civil or criminal, of any other than the existing rules of procedure.
Thus, the provision of Batas Bilang 129 in Section 39 thereof prescribing that no record on
appeal shall be required to take an appeal is procedural in nature and should therefore be
applied retroactively to pending actions. Hence, the question as to whether an appeal from
an adverse judgment should be dismissed for failure of appellant to file a record on appeal
within thirty days as required under the old rules, which question is pending resolution at the
time Batas Bilang 129 took effect, became academic upon the effectivity of said law
because the law no longer requires the filing of a record on appeal and its retroactive
application removed the legal obstacle to giving due course to the appeal. A statute which
transfers the jurisdiction to try certain cases from a court to a quasi-judicial tribunal is a
remedial statute that is applicable to claims that accrued before its enactment but
formulated and filed after it took effect, for it does not create new nor take away vested
rights. The court that has jurisdiction over a claim at the time it accrued cannot validly try
the claim where at the time the claim is formulated and filed the jurisdiction to try it has
been transferred by law to a quasi-judicial tribunal, for even actions pending in one court
may be validly taken away and transferred to another and no litigant can acquire a vested
right to be heard by one particular court.
9.18. Exceptions to the rule.
The rule that procedural laws are applicable to pending actions or proceedings admits
certain exceptions. The rule does not apply where the statute itself expressly or by
necessary implication provides that pending actions are excepted from its
operation, or where to apply it to pending proceedings would impair vested rights. Under
appropriate circumstances, courts may deny the retroactive application of procedural laws in
the event that to do so would not be feasible or would work injustice. Nor may procedural
laws be applied retroactively to pending actions if to do so would involve intricate problems
of due process or impair the independence of the courts.
We hold that section 1, Rule 39 of the 1997 Revised Rules of Procedure should not be
given retroactive effect in this case as it would result in great injustice to the
petitioner. Undoubtedly, petitioner has the right to redeem the subject lot and this right is a
substantive right. Petitioner followed the procedural rule then existing as well as the
decisions of this Court governing the reckoning date of the period of redemption when he
redeemed the subject lot. Unfortunately for petitioner, the rule was changed by the 1997
Revised Rules of Procedure which if applied retroactively would result in his losing the right
to redeem the subject lot. It is difficult to reconcile the retroactive application of this
procedural rule with the rule of fairness. Petitioner cannot be penalized with the loss of the

subject lot when he faithfully followed the laws and the rule on the period of redemption
when he made the redemption. The subject lot may only be 34,829 square meters but as
petitioner claims, it is the only property left behind by their father, a private law practitioner
who was felled by an assassins bullet.[14]
Petitioner fought to recover this lot from 1988. To lose it because of a change of
procedure on the date of reckoning of the period of redemption is inequitous. The manner of
exercising the right cannot be changed and the change applied retroactively if to do so will
defeat the right of redemption of the petitioner which is already vested.
IN VIEW WHEREOF, the decision of the Court of Appeals dated July 15, 1998 and
its Resolution dated November 9, 1998 in CA-G.R. SP-41738 are annulled and set aside. The
Orders dated June 10, 1996 and July 24, 1996 of the RTC of Davao City, 11th Judicial Region,
Branch 11, in Civil Case No. 19049-88 are reinstated. No costs.
SO ORDERED.

FIRST DIVISION
G.R. No. 197380, October 08, 2014
ELIZA ZUIGA-SANTOS,* REPRESENTED BY HER ATTORNEY-IN FACT, NYMPHA Z.
SALES,Petitioners, v. MARIA DIVINA GRACIA SANTOS-GRAN** AND REGISTER OF
DEEDS OF MARIKINA CITY, Respondents.
DECISION
PERLAS-BERNABE, J.:
Before the Court is a petition for review on certiorari1 assailing the Decision2 dated January
10, 2011 and the Resolution3 dated June 22, 2011 of the Court of Appeals (CA) in CA-G.R. CV
No. 87849 which affirmed the Order4 dated July 6, 2006 of the Regional Trial Court of San
Mateo, Rizal, Branch 76 (RTC) in Civil Case No. 2018-06, dismissing the Amended Complaint
for annulment of sale and revocation of title on the ground of insufficiency of factual basis.
The Facts
On January 9, 2006, petitioner Eliza Zuiga-Santos (petitioner), through her authorized
representative, Nympha Z. Sales,5 filed a Complaint6 for annulment of sale and revocation of
title against respondents Maria Divina Gracia Santos-Gran (Gran) and the Register of Deeds
of Marikina City before the RTC, docketed as Civil Case No. 2018-06. The said complaint was
later amended7 on March 10, 2006 (Amended Complaint).
In her Amended Complaint,8 petitioner alleged, among others, that: (a) she was the
registered owner of three (3) parcels of land located in the Municipality of Montalban,

Province of Rizal, covered by Transfer Certificate of Title (TCT) Nos. N-5500, 9 224174,10 and
N-423411 (subject properties) prior to their transfer in the name of private respondent Gran;
(b) she has a second husband by the name of Lamberto C. Santos (Lamberto), with whom
she did not have any children; (c) she was forced to take care of Lambertos alleged
daughter, Gran, whose birth certificate was forged to make it appear that the latter was
petitioners daughter; (d) pursuant to void and voidable documents, i.e., a Deed of Sale,
Lamberto succeeded in transferring the subject properties in favor of and in the name of
Gran; (e) despite diligent efforts, said Deed of Sale could not be located; and (f) she
discovered that the subject properties were transferred to Gran sometime in November
2005. Accordingly, petitioner prayed, inter alia, that Gran surrender to her the subject
properties and pay damages, including costs of suit. 12cralawlawlibrary
For her part, Gran filed a Motion to Dismiss,13 contending, inter alia, that (a) the action filed
by petitioner had prescribed since an action upon a written contract must be brought within
ten (10) years from the time the cause of action accrues, or in this case, from the time of
registration of the questioned documents before the Registry of Deeds; 14 and (b) the
Amended Complaint failed to state a cause of action as the void and voidable documents
sought to be nullified were not properly identified nor the substance thereof set forth, thus,
precluding the RTC from rendering a valid judgment in accordance with the prayer to
surrender the subject properties.15cralawlawlibrary
The RTC Ruling
In an Order16 dated July 6, 2006, the RTC granted Grans motion and dismissed the Amended
Complaint for its failure to state a cause of action, considering that the deed of sale sought
to be nullified an essential and indispensable part of [petitioners] cause of action 17 was
not attached. It likewise held that the certificates of title covering the subject properties
cannot be collaterally attacked and that since the action was based on a written contract,
the same had already prescribed under Article 1144 of the Civil Code. 18cralawlawlibrary
Dissatisfied, petitioner elevated the matter to the CA.
The CA Ruling
In a Decision19 dated January 10, 2011, the CA sustained the dismissal of petitioners
Amended Complaint but on the ground of insufficiency of factual basis.
It disagreed with the RTCs finding that the said pleading failed to state a cause of action
since it had averred that: (a) petitioner has a right over the subject properties being the
registered owner thereof prior to their transfer in the name of Gran; (b) Lamberto succeeded
in transferring the subject properties to his daughter, Gran, through void and voidable
documents; and (c) the latters refusal and failure to surrender to her the subject properties
despite demands violated petitioners rights over them.20 The CA likewise ruled that the
action has not yet prescribed since an action for nullity of void deeds of conveyance is
imprescriptible.21 Nonetheless, it held that since the Deed of Sale sought to be annulled was
not attached to the Amended Complaint, it was impossible for the court to determine
whether petitioners signature therein was a forgery and thus, would have no basis to order
the surrender or reconveyance of the subject properties.22cralawlawlibrary
Aggrieved, petitioner moved for reconsideration23 and attached, for the first time, a copy of
the questioned Deed of Sale24 which she claimed to have recently recovered, praying that
the order of dismissal be set aside and the case be remanded to the RTC for further
proceedings.
In a Resolution25 dated June 22, 2011, the CA denied petitioners motion and held that the

admission of the contested Deed of Sale at this late stage would be contrary to Grans right
to due process.
Hence, the instant petition.
The Issue Before the Court
The primordial issue for the Courts resolution is whether or not the dismissal of petitioners
Amended Complaint should be sustained.
The Courts Ruling
Failure to state a cause of action and lack of cause of action are distinct grounds to dismiss a
particular action. The former refers to the insufficiency of the allegations in the pleading,
while the latter to the insufficiency of the factual basis for the action. Dismissal for failure to
state a cause of action may be raised at the earliest stages of the proceedings through a
motion to dismiss under Rule 16 of the Rules of Court, while dismissal for lack of cause of
action may be raised any time after the questions of fact have been resolved on the basis of
stipulations, admissions or evidence presented by the plaintiff. 26 In Macaslang v.
Zamora,27 the Court, citing the commentary of Justice Florenz D. Regalado,
explained:chanRoblesvirtualLawlibrary
Justice Regalado, a recognized commentator on remedial law, has explained the
distinction:chanroblesvirtuallawlibrary
x x x What is contemplated, therefore, is a failure to state a cause of action which is
provided in Sec. 1(g) of Rule 16. This is a matter of insufficiency of the pleading. Sec. 5 of
Rule 10, which was also included as the last mode for raising the issue to the court, refers to
the situation where the evidence does not prove a cause of action. This is, therefore, a
matter of insufficiency of evidence. Failure to state a cause of action is different from failure
to prove a cause of action. The remedy in the first is to move for dismissal of the pleading,
while the remedy in the second is to demur to the evidence, hence reference to Sec. 5 of
Rule 10 has been eliminated in this section. The procedure would consequently be to require
the pleading to state a cause of action, by timely objection to its deficiency; or, at the trial,
to file a demurrer to evidence, if such motion is warranted. 28
In the case at bar, both the RTC and the CA were one in dismissing petitioners Amended
Complaint, but varied on the grounds thereof that is, the RTC held that there was failure to
state a cause of action while the CA ruled that there was insufficiency of factual basis.
At once, it is apparent that the CA based its dismissal on an incorrect ground. From the
preceding discussion, it is clear that insufficiency of factual basis is not a ground for a
motion to dismiss. Rather, it is a ground which becomes available only after the questions of
fact have been resolved on the basis of stipulations, admissions or evidence presented by
the plaintiff. The procedural recourse to raise such ground is a demurrer to evidence taken
only after the plaintiffs presentation of evidence. This parameter is clear under Rule 33 of
the Rules of Court:chanRoblesvirtualLawlibrary
RULE 33
Demurrer to Evidence
Section 1. Demurrer to evidence. After the plaintiff has completed the presentation of his
evidence, the defendant may move for dismissal on the ground that upon the facts and the
law the plaintiff has shown no right to relief. If his motion is denied he shall have the right to
present evidence. If the motion is granted but on appeal the order of dismissal is reversed
he shall be deemed to have waived the right to present evidence.

At the preliminary stages of the proceedings, without any presentation of evidence even
conducted, it is perceptibly impossible to assess the insufficiency of the factual basis on
which the plaintiff asserts his cause of action, as in this case. Therefore, that ground could
not be the basis for the dismissal of the action.
However, the Amended Complaint is still dismissible but on the ground of failure to state a
cause of action, as correctly held by the RTC. Said ground was properly raised by Gran in a
motion to dismiss pursuant to Section 1, Rule 16 of the Rules of
Court:chanRoblesvirtualLawlibrary
RULE 16
Motion to Dismiss
Section 1. Grounds. Within the time for but before filing the answer to the complaint or
pleading asserting a claim, a motion to dismiss may be made on any of the following
grounds:chanRoblesvirtualLawlibrary
xxxx
(g) That the pleading asserting the claim states no cause of action;
xxxx
A complaint states a cause of action if it sufficiently avers the existence of the three (3)
essential elements of a cause of action, namely: (a) a right in favor of the plaintiff by
whatever means and under whatever law it arises or is created; (b) an obligation on the part
of the named defendant to respect or not to violate such right; and (c) an act or omission on
the part of the named defendant violative of the right of the plaintiff or constituting a breach
of the obligation of defendant to the plaintiff for which the latter may maintain an action for
recovery of damages.29 If the allegations of the complaint do not state the concurrence of
these elements, the complaint becomes vulnerable to a motion to dismiss on the ground of
failure to state a cause of action.30cralawlawlibrary
It is well to point out that the plaintiffs cause of action should not merely be stated but,
importantly, the statement thereof should be sufficient. This is why the elementary test in
a motion to dismiss on such ground is whether or not the complaint alleges facts which if
true would justify the relief demanded. 31 As a corollary, it has been held that only ultimate
facts and not legal conclusions or evidentiary facts are considered for purposes of applying
the test. 32 This is consistent with Section 1, Rule 8 of the Rules of Court which states that
the complaint need only allege the ultimate facts or the essential facts constituting the
plaintiffs cause of action. A fact is essential if they cannot be stricken out without leaving
the statement of the cause of action inadequate.33 Since the inquiry is into the sufficiency,
not the veracity, of the material allegations, it follows that the analysis should be confined to
the four corners of the complaint, and no other.34cralawlawlibrary
A judicious examination of petitioners Amended Complaint readily shows its failure to
sufficiently state a cause of action. Contrary to the findings of the CA, the allegations therein
do not proffer ultimate facts which would warrant an action for nullification of the sale and
recovery of the properties in controversy, hence, rendering the same dismissible.
While the Amended Complaint does allege that petitioner was the registered owner of the
subject properties in dispute, nothing in the said pleading or its annexes would show the
basis of that assertion, either through statements/documents tracing the root of petitioners
title or copies of previous certificates of title registered in her name. Instead, the certificates

of title covering the said properties that were attached to the Amended Complaint are in the
name of Gran. At best, the attached copies of TCT Nos. N-5500 and N-4234 only mention
petitioner as the representative of Gran at the time of the covered propertys registration
when she was a minor. Nothing in the pleading, however, indicates that the former had
become any of the properties owner. This leads to the logical conclusion that her right to
the properties in question at least through the manner in which it was alleged in the
Amended Complaint remains ostensibly unfounded. Indeed, while the facts alleged in the
complaint are hypothetically admitted for purposes of the motion, it must, nevertheless, be
remembered that the hypothetical admission extends only to the relevant and material
facts well pleaded in the complaint as well as to inferences fairly deductible
therefrom.35 Verily, the filing of the motion to dismiss assailing the sufficiency of the
complaint does not hypothetically admit allegations of which the court will take judicial
notice of to be not true, nor does the rule of hypothetical admission apply to legally
impossible facts, or to facts inadmissible in evidence, or tofacts that appear to be
unfounded by record or document included in the pleadings.36cralawlawlibrary
Aside from the insufficiency of petitioners allegations with respect to her right to the subject
properties sought to be recovered, the ultimate facts supposedly justifying the annulment
of sale, by which the reconveyance of the subject properties is sought, were also
insufficiently pleaded. The following averments in the Amended Complaint betray no more
than an insufficient narration of facts:chanRoblesvirtualLawlibrary
6. That pursuant to a voidable [sic] and void documents, the second husband of the
plaintiff succeed [sic] in transferring the above TITLES in the name of MARIA
DIVINAGRACIA SANTOS, who is (sic) alleged daughter of LAMBERTO C. SANTOS in
violation of Article 1409, Par. 2 of the Civil Code;
7. That the said properties [were] transferred to the said defendant by a Deed of Sale
(DOS) to the said MARIA DIVINAGRACIA SANTOS through a void documents [sic]
considering that the seller is the alleged mother of defendant is also the buyer of the
said properties in favor of defendant;
8. x x x.
9. That the alleged sale and transfer of the said properties in favor of defendant was
only discovered by [plaintiffs] daughter CYNTHIA BELTRAN-LASMARIAS when
[plaintiff] has been requesting for financial assistance, considering that the said
mother of plaintiff [sic] has so many properties which is now the subject of this
complaint;
10. That plaintiff then return on [to] the Philippines sometime [in] November, 2005 and
discovered that all [plaintiffs] properties [had] been transferred to defendant MARIA
DIVINAGRACIA SANTOS who is not a daughter either by consanguinity or affinity to
the plaintiff mother [sic];
11. That the titles that [were] issued in the name of MARIA DIVINAGRACIA SANTOS by
virtue of the said alleged voidable and void documents, should be annulled and
cancelled as the basis of the transfer is through void and voidable documents;
x x x x37

Clearly, the claim that the sale was effected through voidable and void documents
partakes merely of a conclusion of law that is not supported by any averment of

circumstances that will show why or how such conclusion was arrived at. In fact, what these
voidable and void documents are were not properly stated and/or identified. In Abad v.
Court of First Instance of Pangasinan,38 the Court pronounced
that:chanRoblesvirtualLawlibrary
A pleading should state the ultimate facts essential to the rights of action or
defense asserted, as distinguished from mere conclusions of fact, or conclusions
of law. General allegations that a contract is valid or legal, or is just, fair, and reasonable,
are mere conclusions of law. Likewise, allegations that a contract is void,
voidable, invalid, illegal, ultra vires, or against public policy, without stating facts showing
its invalidity, are mere conclusions of law.39 (Emphases supplied)
Hence, by merely stating a legal conclusion, the Amended Complaint presented no sufficient
allegation upon which the Court could grant the relief petitioner prayed for. Thus, said
pleading should be dismissed on the ground of failure to state cause of action, as correctly
held by the RTC.
That a copy of the Deed of Sale adverted to in the Amended Complaint was subsequently
submitted by petitioner does not warrant a different course of action. The submission of that
document was made, as it was purportedly recently recovered, only on reconsideration
before the CA which, nonetheless, ruled against the remand of the case. An examination of
the present petition, however, reveals no counter-argument against the foregoing actions;
hence, the Court considers any objection thereto as waived.
In any event, the Court finds the Amended Complaints dismissal to be in order considering
that petitioners cause of action had already prescribed.
It is evident that petitioner ultimately seeks for the reconveyance to her of the subject
properties through the nullification of their supposed sale to Gran. An action for
reconveyance is one that seeks to transfer property, wrongfully registered by another, to its
rightful and legal owner. 40 Having alleged the commission of fraud by Gran in the transfer
and registration of the subject properties in her name, there was, in effect, an implied trust
created by operation of law pursuant to Article 1456 of the Civil Code which
provides:chanRoblesvirtualLawlibrary
Art. 1456. If property is acquired through mistake or fraud, the person obtaining it is, by
force of law, considered a trustee of an implied trust for the benefit of the person from whom
the property comes.
To determine when the prescriptive period commenced in an action for reconveyance, the
plaintiffs possession of the disputed property is material. If there is an actual need to
reconvey the property as when the plaintiff is not in possession, the action for
reconveyance based on implied trust prescribes in ten (10) years, the reference
point being the date of registration of the deed or the issuance of the title. On the
other hand, if the real owner of the property remains in possession of the property, the
prescriptive period to recover title and possession of the property does not run against him
and in such case, the action for reconveyance would be in the nature of a suit for quieting of
title which is imprescriptible.41cralawlawlibrary
In the case at bar, a reading of the allegations of the Amended Complaint failed to show that
petitioner remained in possession of the subject properties in dispute. On the contrary, it
can be reasonably deduced that it was Gran who was in possession of the subject properties,
there being an admission by the petitioner that the property covered by TCT No. 224174 was
being used by Grans mother-in-law.42 In fact, petitioners relief in the Amended Complaint
for the surrender of three (3) properties to her bolsters such stance. 43 And since the new

titles to the subject properties in the name of Gran were issued by the Registry of Deeds of
Marikina on the following dates: TCT No. 224174 on July 27, 1992, 44 TCT No. N-5500 on
January 29, 1976,45 and TCT No. N-4234 on November 26, 1975,46 the filing of the
petitioners complaint before the RTC on January 9, 2006 was obviously beyond the ten-year
prescriptive period, warranting the Amended Complaints dismissal all the same.
WHEREFORE, the petition is DENIED. The Decision dated January 10, 2011 and the
Resolution dated June 22, 2011 of the Court of Appeals in CA-G.R. CV No. 87849 are
hereby AFFIRMED withMODIFICATION in that the Amended Complaint be dismissed on the
grounds of (a) failure to state a cause of action, and (b) prescription as herein discussed.
SO ORDERED.cralawred

Republic of the Philippines


SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 198680

July 8, 2013

HEIRS OF MAGDALENO YPON, NAMELY, ALVARO YPON, ERUDITA Y. BARON, CICERO


YPON, WILSON YPON, VICTOR YPON, AND HINIDINO Y. PEALOSA, PETITIONERS,
vs.
GAUDIOSO PONTERAS RICAFORTE A.K.A. "GAUDIOSO E. YPON," AND THE REGISTER
OF DEEDS OF TOLEDO CITY, RESPONDENTS.
RESOLUTION
PERLAS-BERNABE, J.:
This is a direct recourse to the Court from the Regional Trial Court of Toledo City, Branch 59
(RTC), through a petition for review on certiorari 1 under Rule 45 of the Rules of Court, raising
a pure question of law. In particular, petitioners assail the July 27, 2011 2 and August 31,
20113 Orders of the RTC, dismissing Civil Case No. T-2246 for lack of cause of action.
The Facts
On July 29, 2010, petitioners, together with some of their cousins, 4 filed a complaint for
Cancellation of Title and Reconveyance with Damages (subject complaint) against
respondent Gaudioso Ponteras Ricaforte a.k.a. "Gaudioso E. Ypon" (Gaudioso), docketed as
Civil Case No. T-2246.5 In their complaint, they alleged that Magdaleno Ypon (Magdaleno)
died intestate and childless on June 28, 1968, leaving behind Lot Nos. 2-AA, 2-C, 2-F, and 2-J
which were then covered by Transfer Certificates of Title (TCT) Nos. T-44 and T-77A.6 Claiming to be the sole heir of Magdaleno, Gaudioso executed an Affidavit of SelfAdjudication and caused the cancellation of the aforementioned certificates of title, leading
to their subsequent transfer in his name under TCT Nos. T-2637 and T-2638, 7 to the prejudice
of petitioners who are Magdalenos collateral relatives and successors-in-interest. 8
In his Answer, Gaudioso alleged that he is the lawful son of Magdaleno as evidenced by: (a)
his certificate of Live Birth; (b) two (2) letters from Polytechnic School; and (c) a certified
true copy of his passport.9 Further, by way of affirmative defense, he claimed that: (a)
petitioners have no cause of action against him; (b) the complaint fails to state a cause of
action; and (c) the case is not prosecuted by the real parties-in-interest, as there is no
showing that the petitioners have been judicially declared as Magdalenos lawful heirs. 10
The RTC Ruling

On July 27, 2011, the RTC issued the assailed July 27, 2011 Order, 11 finding that the subject
complaint failed to state a cause of action against Gaudioso. It observed that while the
plaintiffs therein had established their relationship with Magdaleno in a previous special
proceeding for the issuance of letters of administration,12 this did not mean that they could
already be considered as the decedents compulsory heirs. Quite the contrary, Gaudioso
satisfactorily established the fact that he is Magdalenos son and hence, his compulsory
heir through the documentary evidence he submitted which consisted of: (a) a marriage
contract between Magdaleno and Epegenia Evangelista; (b) a Certificate of Live Birth; (c) a
Letter dated February 19, 1960; and (d) a passport.13
The plaintiffs therein filed a motion for reconsideration which was, however, denied on
August 31, 2011 due to the counsels failure to state the date on which his Mandatory
Continuing Legal Education Certificate of Compliance was issued. 14
Aggrieved, petitioners, who were among the plaintiffs in Civil Case No. T-2246, 15 sought
direct recourse to the Court through the instant petition.
The Issue Before the Court
The core of the present controversy revolves around the issue of whether or not the RTCs
dismissal of the case on the ground that the subject complaint failed to state a cause of
action was proper.
The Courts Ruling
The petition has no merit.
Cause of action is defined as the act or omission by which a party violates a right of
another.16 It is well-settled that the existence of a cause of action is determined by the
allegations in the complaint.17 In this relation, a complaint is said to assert a sufficient cause
of action if, admitting what appears solely on its face to be correct, the plaintiff would be
entitled to the relief prayed for.18Accordingly, if the allegations furnish sufficient basis by
which the complaint can be maintained, the same should not be dismissed, regardless of the
defenses that may be averred by the defendants.19
As stated in the subject complaint, petitioners, who were among the plaintiffs therein,
alleged that they are the lawful heirs of Magdaleno and based on the same, prayed that the
Affidavit of Self-Adjudication executed by Gaudioso be declared null and void and that the
transfer certificates of title issued in the latters favor be cancelled. While the foregoing
allegations, if admitted to be true, would consequently warrant the reliefs sought for in the
said complaint, the rule that the determination of a decedents lawful heirs should be made
in the corresponding special proceeding20 precludes the RTC, in an ordinary action for
cancellation of title and reconveyance, from granting the same. In the case of Heirs of Teofilo
Gabatan v. CA,21 the Court, citing several other precedents, held that the determination of
who are the decedents lawful heirs must be made in the proper special proceeding for such
purpose, and not in an ordinary suit for recovery of ownership and/or possession, as in this
case:

Jurisprudence dictates that the determination of who are the legal heirs of the deceased
must be made in the proper special proceedings in court, and not in an ordinary suit for
recovery of ownership and possession of property.1wphi1 This must take precedence over
the action for recovery of possession and ownership. The Court has consistently ruled that
the trial court cannot make a declaration of heirship in the civil action for the reason that
such a declaration can only be made in a special proceeding. Under Section 3, Rule 1 of the
1997 Revised Rules of Court, a civil action is defined as one by which a party sues another
for the enforcement or protection of a right, or the prevention or redress of a wrong while a
special proceeding is a remedy by which a party seeks to establish a status, a right, or a
particular fact. It is then decisively clear that the declaration of heirship can be made only in
a special proceeding inasmuch as the petitioners here are seeking the establishment of a
status or right.
In the early case of Litam, et al. v. Rivera, this Court ruled that the declaration of heirship
must be made in a special proceeding, and not in an independent civil action. This doctrine
was reiterated in Solivio v. Court of Appeals x x x:
In the more recent case of Milagros Joaquino v. Lourdes Reyes, the Court reiterated its ruling
that matters relating to the rights of filiation and heirship must be ventilated in the proper
probate court in a special proceeding instituted precisely for the purpose of determining
such rights. Citing the case of Agapay v. Palang, this Court held that the status of an
illegitimate child who claimed to be an heir to a decedent's estate could not be adjudicated
in an ordinary civil action which, as in this case, was for the recovery of
property.22 (Emphasis and underscoring supplied; citations omitted)
By way of exception, the need to institute a separate special proceeding for the
determination of heirship may be dispensed with for the sake of practicality, as when the
parties in the civil case had voluntarily submitted the issue to the trial court and already
presented their evidence regarding the issue of heirship, and the RTC had consequently
rendered judgment thereon,23 or when a special proceeding had been instituted but had
been finally closed and terminated, and hence, cannot be re-opened. 24
In this case, none of the foregoing exceptions, or those of similar nature, appear to exist.
Hence, there lies the need to institute the proper special proceeding in order to determine
the heirship of the parties involved, ultimately resulting to the dismissal of Civil Case No. T2246.
Verily, while a court usually focuses on the complaint in determining whether the same fails
to state a cause of action, a court cannot disregard decisions material to the proper
appreciation of the questions before it.25 Thus, concordant with applicable jurisprudence,
since a determination of heirship cannot be made in an ordinary action for recovery of
ownership and/or possession, the dismissal of Civil Case No. T-2246 was altogether proper. In
this light, it must be pointed out that the RTC erred in ruling on Gaudiosos heirship which
should, as herein discussed, be threshed out and determined in the proper special
proceeding. As such, the foregoing pronouncement should therefore be devoid of any legal
effect.

WHEREFORE, the petition is DENIED. The dismissal of Civil Case No. T-2246 is hereby
AFFIRMED, without prejudice to any subsequent proceeding to determine the lawful heirs of
the late Magdaleno Ypon and the rights concomitant therewith.
SO ORDERED.

Republic of the Philippines


SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 182435

August 13, 2012

LILIA B. ADA, LUZ B. ADANZA, FLORA C. BA YLON, REMO BA YLON, JOSE BA YLON,
ERIC BA YLON, FLORENTINO BA YLON, and MA. RUBY BA YLON, Petitioners,
vs.
FLORANTE BA YLON, Respondent.
VILLARAMA, JR.,*
DECISION
REYES, J.:
Before this Court is a petition for review on certiorari under Rule 45 of the Rules of Court
seeking to annul and set aside the Decision1 dated October 26, 2007 rendered by the Court

of Appeals (CA) in CA-G.R. CV No. 01746. The assailed decision partially reversed and set
aside the Decision2 dated October 20, 2005 issued ~y the Regional Trial Court (RTC), Tan jay
City, Negros Oriental, Branch 43 in Civil Case No. 11657.
The Antecedent Facts
This case involves the estate of spouses Florentino Baylon and Maximina Elnas Baylon
(Spouses Baylon) who died on November 7, 1961 and May 5, 1974, respectively. 3 At the time
of their death, Spouses Baylon were survived by their legitimate children, namely, Rita
Baylon (Rita), Victoria Baylon (Victoria), Dolores Baylon (Dolores), Panfila Gomez (Panfila),
Ramon Baylon (Ramon) and herein petitioner Lilia B. Ada (Lilia).
Dolores died intestate and without issue on August 4, 1976. Victoria died on November 11,
1981 and was survived by her daughter, herein petitioner Luz B. Adanza. Ramon died
intestate on July 8, 1989 and was survived by herein respondent Florante Baylon (Florante),
his child from his first marriage, as well as by petitioner Flora Baylon, his second wife, and
their legitimate children, namely, Ramon, Jr. and herein petitioners Remo, Jose, Eric,
Florentino and Ma. Ruby, all surnamed Baylon.
On July 3, 1996, the petitioners filed with the RTC a Complaint 4 for partition, accounting and
damages against Florante, Rita and Panfila. They alleged therein that Spouses Baylon,
during their lifetime, owned 43 parcels of land5 all situated in Negros Oriental. After the
death of Spouses Baylon, they claimed that Rita took possession of the said parcels of land
and appropriated for herself the income from the same. Using the income produced by the
said parcels of land, Rita allegedly purchased two parcels of land, Lot No. 4709 6 and half of
Lot No. 4706,7situated in Canda-uay, Dumaguete City. The petitioners averred that Rita
refused to effect a partition of the said parcels of land.
In their Answer,8 Florante, Rita and Panfila asserted that they and the petitioners co-owned
229 out of the 43 parcels of land mentioned in the latters complaint, whereas Rita actually
owned 10 parcels of land10 out of the 43 parcels which the petitioners sought to partition,
while the remaining 11 parcels of land are separately owned by Petra Cafino
Adanza,11 Florante,12 Meliton Adalia,13 Consorcia Adanza,14 Lilia15 and Santiago
Mendez.16Further, they claimed that Lot No. 4709 and half of Lot No. 4706 were acquired by
Rita using her own money. They denied that Rita appropriated solely for herself the income
of the estate of Spouses Baylon, and expressed no objection to the partition of the estate of
Spouses Baylon, but only with respect to the co-owned parcels of land.
During the pendency of the case, Rita, through a Deed of Donation dated July 6, 1997,
conveyed Lot No. 4709 and half of Lot No. 4706 to Florante. On July 16, 2000, Rita died
intestate and without any issue. Thereafter, learning of the said donation inter vivos in favor
of Florante, the petitioners filed a Supplemental Pleading 17 dated February 6, 2002, praying
that the said donation in favor of the respondent be rescinded in accordance with Article
1381(4) of the Civil Code. They further alleged that Rita was already sick and very weak
when the said Deed of Donation was supposedly executed and, thus, could not have validly
given her consent thereto.

Florante and Panfila opposed the rescission of the said donation, asserting that Article
1381(4) of the Civil Code applies only when there is already a prior judicial decree on who
between the contending parties actually owned the properties under litigation. 18
The RTC Decision
On October 20, 2005, the RTC rendered a Decision,19 the decretal portion of which reads:
Wherefore judgment is hereby rendered:
(1) declaring the existence of co-ownership over parcels nos. 1, 2, 3, 5, 7, 10, 13, 14,
16, 17, 18, 26, 29, 30, 33, 34, 35, 36, 40 and 41 described in the complaint;
(2) directing that the above mentioned parcels of land be partitioned among the heirs
of Florentino Baylon and Maximina Baylon;
(3) declaring a co-ownership on the properties of Rita Baylon namely parcels no[s]. 6,
11, 12, 20, 24, 27, 31, 32, 39 and 42 and directing that it shall be partitioned among
her heirs who are the plaintiffs and defendant in this case;
(4) declaring the donation inter vivos rescinded without prejudice to the share of
Florante Baylon to the estate of Rita Baylon and directing that parcels nos. 1 and 2
paragraph V of the complaint be included in the division of the property as of Rita
Baylon among her heirs, the parties in this case;
(5) excluding from the co-ownership parcels nos. 20, 21, 22, 9, 43, 4, 8, 19 and 37.
Considering that the parties failed to settle this case amicably and could not agree on the
partition, the parties are directed to nominate a representative to act as commissioner to
make the partition. He shall immediately take [his] oath of office upon [his] appointment.
The commissioner shall make a report of all the proceedings as to the partition within fifteen
(15) days from the completion of this partition. The parties are given ten (10) days within
which to object to the report after which the Court shall act on the commissioner report.
SO ORDERED.20 (Emphasis ours)
The RTC held that the death of Rita during the pendency of the case, having died intestate
and without any issue, had rendered the issue of ownership insofar as parcels of land which
she claims as her own moot since the parties below are the heirs to her estate. Thus, the
RTC regarded Rita as the owner of the said 10 parcels of land and, accordingly, directed that
the same be partitioned among her heirs. Nevertheless, the RTC rescinded the donation inter
vivos of Lot No. 4709 and half of Lot No. 4706 in favor of Florante. In rescinding the said
donation inter vivos, the RTC explained that:
However, with respect to lot nos. 4709 and 4706 which [Rita] had conveyed to Florante
Baylon by way of donation inter vivos, the plaintiffs in their supplemental pleadings (sic)
assailed the same to be rescissible on the ground that it was entered into by the defendant
Rita Baylon without the knowledge and approval of the litigants [or] of competent judicial

authority. The subject parcels of lands are involved in the case for which plaintiffs have
asked the Court to partition the same among the heirs of Florentino Baylon and Maximina
Elnas.
Clearly, the donation inter vivos in favor of Florante Baylon was executed to prejudice the
plaintiffs right to succeed to the estate of Rita Baylon in case of death considering that as
testified by Florante Baylon, Rita Baylon was very weak and he tried to give her vitamins x x
x. The donation inter vivos executed by Rita Baylon in favor of Florante Baylon is rescissible
for the reason that it refers to the parcels of land in litigation x x x without the knowledge
and approval of the plaintiffs or of this Court. However, the rescission shall not affect the
share of Florante Baylon to the estate of Rita Baylon.21
Florante sought reconsideration of the Decision dated October 20, 2005 of the RTC insofar as
it rescinded the donation of Lot No. 4709 and half of Lot No. 4706 in his favor. 22 He asserted
that, at the time of Ritas death on July 16, 2000, Lot No. 4709 and half of Lot No. 4706 were
no longer part of her estate as the same had already been conveyed to him through a
donation inter vivos three years earlier. Thus, Florante maintained that Lot No. 4709 and half
of Lot No. 4706 should not be included in the properties that should be partitioned among
the heirs of Rita.
On July 28, 2006, the RTC issued an Order23 which denied the motion for reconsideration filed
by Florante.
The CA Decision
On appeal, the CA rendered a Decision24 dated October 26, 2007, the dispositive portion of
which reads:
WHEREFORE, the Decision dated October 20, 2005 and Order dated July 28, 2006
are REVERSEDand SET ASIDE insofar as they decreed the rescission of the Deed of
Donation dated July 6, 1997 and the inclusion of lot no. 4709 and half of lot no. 4706 in the
estate of Rita Baylon. The case isREMANDED to the trial court for the determination of
ownership of lot no. 4709 and half of lot no. 4706.
SO ORDERED.25
The CA held that before the petitioners may file an action for rescission, they must first
obtain a favorable judicial ruling that Lot No. 4709 and half of Lot No. 4706 actually
belonged to the estate of Spouses Baylon and not to Rita. Until then, the CA asserted, an
action for rescission is premature. Further, the CA ruled that the petitioners action for
rescission cannot be joined with their action for partition, accounting and damages through
a mere supplemental pleading. Thus:
If Lot No. 4709 and half of Lot No. 4706 belonged to the Spouses estate, then Rita Baylons
donation thereof in favor of Florante Baylon, in excess of her undivided share therein as coheir, is void. Surely, she could not have validly disposed of something she did not own. In
such a case, an action for rescission of the donation may, therefore, prosper.

If the lots, however, are found to have belonged exclusively to Rita Baylon, during her
lifetime, her donation thereof in favor of Florante Baylon is valid. For then, she merely
exercised her ownership right to dispose of what legally belonged to her. Upon her death,
the lots no longer form part of her estate as their ownership now pertains to Florante Baylon.
On this score, an action for rescission against such donation will not prosper. x x x.
Verily, before plaintiffs-appellees may file an action for rescission, they must first obtain a
favorable judicial ruling that lot no. 4709 and half of lot no. 4706 actually belonged to the
estate of Spouses Florentino and Maximina Baylon, and not to Rita Baylon during her
lifetime. Until then, an action for rescission is premature. For this matter, the applicability of
Article 1381, paragraph 4, of the New Civil Code must likewise await the trial courts
resolution of the issue of ownership.
Be that as it may, an action for rescission should be filed by the parties concerned
independent of the proceedings below. The first cannot simply be lumped up with the
second through a mere supplemental pleading.26 (Citation omitted)
The petitioners sought reconsideration27 of the Decision dated October 26, 2007 but it was
denied by the CA in its Resolution28 dated March 6, 2008.
Hence, this petition.
Issue
The lone issue to be resolved by this Court is whether the CA erred in ruling that the
donation inter vivos of Lot No. 4709 and half of Lot No. 4706 in favor of Florante may only be
rescinded if there is already a judicial determination that the same actually belonged to the
estate of Spouses Baylon.
The Courts Ruling
The petition is partly meritorious.
Procedural Matters
Before resolving the lone substantive issue in the instant case, this Court deems it proper to
address certain procedural matters that need to be threshed out which, by laxity or
otherwise, were not raised by the parties herein.
Misjoinder of Causes of Action
The complaint filed by the petitioners with the RTC involves two separate, distinct and
independent actions partition and rescission. First, the petitioners raised the refusal of their
co-heirs, Florante, Rita and Panfila, to partition the properties which they inherited from
Spouses Baylon. Second, in their supplemental pleading, the petitioners assailed the
donation inter vivos of Lot No. 4709 and half of Lot No. 4706 made by Rita in favor of
Florante pendente lite.

The actions of partition and


rescission cannot be joined in a
single action.
By a joinder of actions, or more properly, a joinder of causes of action is meant the uniting of
two or more demands or rights of action in one action, the statement of more than one
cause of action in a declaration. It is the union of two or more civil causes of action, each of
which could be made the basis of a separate suit, in the same complaint, declaration or
petition. A plaintiff may under certain circumstances join several distinct demands,
controversies or rights of action in one declaration, complaint or petition. 29
The objectives of the rule or provision are to avoid a multiplicity of suits where the same
parties and subject matter are to be dealt with by effecting in one action a complete
determination of all matters in controversy and litigation between the parties involving one
subject matter, and to expedite the disposition of litigation at minimum cost. The provision
should be construed so as to avoid such multiplicity, where possible, without prejudice to the
rights of the litigants.30
Nevertheless, while parties to an action may assert in one pleading, in the alternative or
otherwise, as many causes of action as they may have against an opposing party, such
joinder of causes of action is subject to the condition, inter alia, that the joinder shall not
include special civil actions governed by special rules. 31
Here, there was a misjoinder of causes of action. The action for partition filed by the
petitioners could not be joined with the action for the rescission of the said donation inter
vivos in favor of Florante. Lest it be overlooked, an action for partition is a special civil action
governed by Rule 69 of the Rules of Court while an action for rescission is an ordinary civil
action governed by the ordinary rules of civil procedure. The variance in the procedure in the
special civil action of partition and in the ordinary civil action of rescission precludes their
joinder in one complaint or their being tried in a single proceeding to avoid confusion in
determining what rules shall govern the conduct of the proceedings as well as in the
determination of the presence of requisite elements of each particular cause of action. 32
A misjoined cause of action, if not
severed upon motion of a party or
by the court sua sponte, may be
adjudicated by the court together
with the other causes of action.
Nevertheless, misjoinder of causes of action is not a ground for dismissal. Indeed, the courts
have the power, acting upon the motion of a party to the case or sua sponte, to order the
severance of the misjoined cause of action to be proceeded with separately. 33 However, if
there is no objection to the improper joinder or the court did not motu proprio direct a
severance, then there exists no bar in the simultaneous adjudication of all the erroneously
joined causes of action. On this score, our disquisition in Republic of the Philippines v.
Herbieto34 is instructive, viz:

This Court, however, disagrees with petitioner Republic in this regard. This procedural lapse
committed by the respondents should not affect the jurisdiction of the MTC to proceed with
and hear their application for registration of the Subject Lots.
xxxx
Considering every application for land registration filed in strict accordance with the Property
Registration Decree as a single cause of action, then the defect in the joint application for
registration filed by the respondents with the MTC constitutes a misjoinder of causes of
action and parties. Instead of a single or joint application for registration, respondents
Jeremias and David, more appropriately, should have filed separate applications for
registration of Lots No. 8422 and 8423, respectively.
Misjoinder of causes of action and parties do not involve a question of jurisdiction of the
court to hear and proceed with the case. They are not even accepted grounds for dismissal
thereof. Instead, under the Rules of Court, the misjoinder of causes of action and parties
involve an implied admission of the courts jurisdiction. It acknowledges the power of the
court, acting upon the motion of a party to the case or on its own initiative, to order the
severance of the misjoined cause of action, to be proceeded with separately (in case of
misjoinder of causes of action); and/or the dropping of a party and the severance of any
claim against said misjoined party, also to be proceeded with separately (in case of
misjoinder of parties).35 (Citations omitted)
It should be emphasized that the foregoing rule only applies if the court trying the case has
jurisdiction over all of the causes of action therein notwithstanding the misjoinder of the
same. If the court trying the case has no jurisdiction over a misjoined cause of action, then
such misjoined cause of action has to be severed from the other causes of action, and if not
so severed, any adjudication rendered by the court with respect to the same would be a
nullity.
Here, Florante posed no objection, and neither did the RTC direct the severance of the
petitioners action for rescission from their action for partition. While this may be a patent
omission on the part of the RTC, this does not constitute a ground to assail the validity and
correctness of its decision. The RTC validly adjudicated the issues raised in the actions for
partition and rescission filed by the petitioners.
Asserting a New Cause of Action in a Supplemental Pleading
In its Decision dated October 26, 2007, the CA pointed out that the said action for rescission
should have been filed by the petitioners independently of the proceedings in the action for
partition. It opined that the action for rescission could not be lumped up with the action for
partition through a mere supplemental pleading.
We do not agree.
A supplemental pleading may raise
a new cause of action as long as it
has some relation to the original

cause of action set forth in the


original complaint.
Section 6, Rule 10 of the Rules of Court reads:
Sec. 6. Supplemental Pleadings. Upon motion of a party the court may, upon reasonable
notice and upon such terms as are just, permit him to serve a supplemental pleading setting
forth transactions, occurrences or events which have happened since the date of the
pleading sought to be supplemented. The adverse party may plead thereto within ten (10)
days from notice of the order admitting the supplemental pleading.
In Young v. Spouses Sy,36 this Court had the opportunity to elucidate on the purpose of a
supplemental pleading. Thus:
As its very name denotes, a supplemental pleading only serves to bolster or add something
to the primary pleading. A supplement exists side by side with the original. It does not
replace that which it supplements. Moreover, a supplemental pleading assumes that the
original pleading is to stand and that the issues joined with the original pleading remained
an issue to be tried in the action. It is but a continuation of the complaint. Its usual office is
to set up new facts which justify, enlarge or change the kind of relief with respect to the
same subject matter as the controversy referred to in the original complaint.
The purpose of the supplemental pleading is to bring into the records new facts which will
enlarge or change the kind of relief to which the plaintiff is entitled; hence, any
supplemental facts which further develop the original right of action, or extend to vary the
relief, are available by way of supplemental complaint even though they themselves
constitute a right of action.37 (Citations omitted and emphasis ours)
Thus, a supplemental pleading may properly allege transactions, occurrences or events
which had transpired after the filing of the pleading sought to be supplemented, even if the
said supplemental facts constitute another cause of action.
Admittedly, in Leobrera v. Court of Appeals,38 we held that a supplemental pleading must be
based on matters arising subsequent to the original pleading related to the claim or defense
presented therein, and founded on the same cause of action. We further stressed therein
that a supplemental pleading may not be used to try a new cause of action.
However, in Planters Development Bank v. LZK Holdings and Development Corp., 39 we
clarified that, while a matter stated in a supplemental complaint should have some relation
to the cause of action set forth in the original pleading, the fact that the supplemental
pleading technically states a new cause of action should not be a bar to its allowance but
only a matter that may be considered by the court in the exercise of its discretion. In such
cases, we stressed that a broad definition of "cause of action" should be applied.
Here, the issue as to the validity of the donation inter vivos of Lot No. 4709 and half of Lot
No. 4706 made by Rita in favor of Florante is a new cause of action that occurred after the
filing of the original complaint. However, the petitioners prayer for the rescission of the said
donation inter vivos in their supplemental pleading is germane to, and is in fact, intertwined

with the cause of action in the partition case. Lot No. 4709 and half of Lot No. 4706 are
included among the properties that were sought to be partitioned.
The petitioners supplemental pleading merely amplified the original cause of action, on
account of the gratuitous conveyance of Lot No. 4709 and half of Lot No. 4706 after the filing
of the original complaint and prayed for additional reliefs, i.e., rescission. Indeed, the
petitioners claim that the said lots form part of the estate of Spouses Baylon, but cannot be
partitioned unless the gratuitous conveyance of the same is rescinded. Thus, the principal
issue raised by the petitioners in their original complaint remained the same.
Main Issue: Propriety of Rescission
After having threshed out the procedural matters, we now proceed to adjudicate the
substantial issue presented by the instant petition.
The petitioners assert that the CA erred in remanding the case to the RTC for the
determination of ownership of Lot No. 4709 and half of Lot No. 4706. They maintain that the
RTC aptly rescinded the said donation inter vivos of Lot No. 4709 and half of Lot No. 4706
pursuant to Article 1381(4) of the Civil Code.
In his Comment,40 Florante asserts that before the petitioners may file an action for
rescission, they must first obtain a favorable judicial ruling that Lot No. 4709 and half of Lot
No. 4706 actually belonged to the estate of Spouses Baylon. Until then, Florante avers that
an action for rescission would be premature.
The petitioners contentions are well-taken.
The resolution of the instant dispute is fundamentally contingent upon a determination of
whether the donation inter vivos of Lot No. 4709 and half of Lot No. 4706 in favor of Florante
may be rescinded pursuant to Article 1381(4) of the Civil Code on the ground that the same
was made during the pendency of the action for partition with the RTC.
Rescission is a remedy to address
the damage or injury caused to the
contracting parties or third
persons.
Rescission is a remedy granted by law to the contracting parties and even to third persons,
to secure the reparation of damages caused to them by a contract, even if it should be valid,
by means of the restoration of things to their condition at the moment prior to the
celebration of said contract.41 It is a remedy to make ineffective a contract, validly entered
into and therefore obligatory under normal conditions, by reason of external causes resulting
in a pecuniary prejudice to one of the contracting parties or their creditors. 42
Contracts which are rescissible are valid contracts having all the essential requisites of a
contract, but by reason of injury or damage caused to either of the parties therein or to third
persons are considered defective and, thus, may be rescinded.

The kinds of rescissible contracts, according to the reason for their susceptibility to
rescission, are the following: first, those which are rescissible because of lesion or
prejudice;43 second, those which are rescissible on account of fraud or bad faith; 44 and third,
those which, by special provisions of law,45 are susceptible to rescission.46
Contracts which refer to things
subject of litigation is rescissible
pursuant to Article 1381(4) of the
Civil Code.
Contracts which are rescissible due to fraud or bad faith include those which involve things
under litigation, if they have been entered into by the defendant without the knowledge and
approval of the litigants or of competent judicial authority. Thus, Article 1381(4) of the Civil
Code provides:
Art. 1381. The following contracts are rescissible:
xxxx
(4) Those which refer to things under litigation if they have been entered into by the
defendant without the knowledge and approval of the litigants or of competent judicial
authority.
The rescission of a contract under Article 1381(4) of the Civil Code only requires the
concurrence of the following: first, the defendant, during the pendency of the case, enters
into a contract which refers to the thing subject of litigation; and second, the said contract
was entered into without the knowledge and approval of the litigants or of a competent
judicial authority. As long as the foregoing requisites concur, it becomes the duty of the
court to order the rescission of the said contract.
The reason for this is simple. Article 1381(4) seeks to remedy the presence of bad faith
among the parties to a case and/or any fraudulent act which they may commit with respect
to the thing subject of litigation.
When a thing is the subject of a judicial controversy, it should ultimately be bound by
whatever disposition the court shall render. The parties to the case are therefore expected,
in deference to the courts exercise of jurisdiction over the case, to refrain from doing acts
which would dissipate or debase the thing subject of the litigation or otherwise render the
impending decision therein ineffectual.
There is, then, a restriction on the disposition by the parties of the thing that is the subject
of the litigation. Article 1381(4) of the Civil Code requires that any contract entered into by a
defendant in a case which refers to things under litigation should be with the knowledge and
approval of the litigants or of a competent judicial authority.
Further, any disposition of the thing subject of litigation or any act which tends to render
inutile the courts impending disposition in such case, sans the knowledge and approval of
the litigants or of the court, is unmistakably and irrefutably indicative of bad faith. Such acts

undermine the authority of the court to lay down the respective rights of the parties in a
case relative to the thing subject of litigation and bind them to such determination.
It should be stressed, though, that the defendant in such a case is not absolutely proscribed
from entering into a contract which refer to things under litigation. If, for instance, a
defendant enters into a contract which conveys the thing under litigation during the
pendency of the case, the conveyance would be valid, there being no definite disposition yet
coming from the court with respect to the thing subject of litigation. After all,
notwithstanding that the subject thereof is a thing under litigation, such conveyance is but
merely an exercise of ownership.
This is true even if the defendant effected the conveyance without the knowledge and
approval of the litigants or of a competent judicial authority. The absence of such knowledge
or approval would not precipitate the invalidity of an otherwise valid contract. Nevertheless,
such contract, though considered valid, may be rescinded at the instance of the other
litigants pursuant to Article 1381(4) of the Civil Code.
Here, contrary to the CAs disposition, the RTC aptly ordered the rescission of the donation
inter vivos of Lot No. 4709 and half of Lot No. 4706 in favor of Florante. The petitioners had
sufficiently established the presence of the requisites for the rescission of a contract
pursuant to Article 1381(4) of the Civil Code. It is undisputed that, at the time they were
gratuitously conveyed by Rita, Lot No. 4709 and half of Lot No. 4706 are among the
properties that were the subject of the partition case then pending with the RTC. It is also
undisputed that Rita, then one of the defendants in the partition case with the RTC, did not
inform nor sought the approval from the petitioners or of the RTC with regard to the donation
inter vivos of the said parcels of land to Florante.
Although the gratuitous conveyance of the said parcels of land in favor of Florante was valid,
the donation inter vivos of the same being merely an exercise of ownership, Ritas failure to
inform and seek the approval of the petitioners or the RTC regarding the conveyance gave
the petitioners the right to have the said donation rescinded pursuant to Article 1381(4) of
the Civil Code.
Rescission under Article 1381(4) of
the Civil Code is not preconditioned
upon the judicial determination as
to the ownership of the thing
subject of litigation.
In this regard, we also find the assertion that rescission may only be had after the RTC had
finally determined that the parcels of land belonged to the estate of Spouses Baylon
intrinsically amiss. The petitioners right to institute the action for rescission pursuant to
Article 1381(4) of the Civil Code is not preconditioned upon the RTCs determination as to
the ownership of the said parcels of land.
It bears stressing that the right to ask for the rescission of a contract under Article 1381(4)
of the Civil Code is not contingent upon the final determination of the ownership of the thing
subject of litigation. The primordial purpose of Article 1381(4) of the Civil Code is to secure

the possible effectivity of the impending judgment by a court with respect to the thing
subject of litigation. It seeks to protect the binding effect of a courts impending adjudication
vis--vis the thing subject of litigation regardless of which among the contending claims
therein would subsequently be upheld. Accordingly, a definitive judicial determination with
respect to the thing subject of litigation is not a condition sine qua non before the rescissory
action contemplated under Article 1381(4) of the Civil Code may be instituted.
Moreover, conceding that the right to bring the rescissory action pursuant to Article 1381(4)
of the Civil Code is preconditioned upon a judicial determination with regard to the thing
subject litigation, this would only bring about the very predicament that the said provision of
law seeks to obviate. Assuming arguendo that a rescissory action under Article 1381(4) of
the Civil Code could only be instituted after the dispute with respect to the thing subject of
litigation is judicially determined, there is the possibility that the same may had already
been conveyed to third persons acting in good faith, rendering any judicial determination
with regard to the thing subject of litigation illusory. Surely, this paradoxical eventuality is
not what the law had envisioned.
Even if the donation inter vivos is
validly rescinded, a determination
as to the ownership of the subject
parcels of land is still necessary.
Having established that the RTC had aptly ordered the rescission of the said donation inter
vivos in favor of Florante, the issue that has to be resolved by this Court is whether there is
still a need to determine the ownership of Lot No. 4709 and half of Lot No. 4706.
In opting not to make a determination as to the ownership of Lot No. 4709 and half of Lot No.
4706, the RTC reasoned that the parties in the proceedings before it constitute not only the
surviving heirs of Spouses Baylon but the surviving heirs of Rita as well. As intimated earlier,
Rita died intestate during the pendency of the proceedings with the RTC without any issue,
leaving the parties in the proceedings before the RTC as her surviving heirs. Thus, the RTC
insinuated, a definitive determination as to the ownership of the said parcels of land is
unnecessary since, in any case, the said parcels of land would ultimately be adjudicated to
the parties in the proceedings before it.
We do not agree.
Admittedly, whoever may be adjudicated as the owner of Lot No. 4709 and half of Lot No.
4706, be it Rita or Spouses Baylon, the same would ultimately be transmitted to the parties
in the proceedings before the RTC as they are the only surviving heirs of both Spouses
Baylon and Rita. However, the RTC failed to realize that a definitive adjudication as to the
ownership of Lot No. 4709 and half of Lot No. 4706 is essential in this case as it affects the
authority of the RTC to direct the partition of the said parcels of land. Simply put, the RTC
cannot properly direct the partition of Lot No. 4709 and half of Lot No. 4706 until and unless
it determines that the said parcels of land indeed form part of the estate of Spouses Baylon.
It should be stressed that the partition proceedings before the RTC only covers the
properties co-owned by the parties therein in their respective capacity as the surviving heirs

of Spouses Baylon. Hence, the authority of the RTC to issue an order of partition in the
proceedings before it only affects those properties which actually belonged to the estate of
Spouses Baylon.
In this regard, if Lot No. 4709 and half of Lot No. 4706, as unwaveringly claimed by Florante,
are indeed exclusively owned by Rita, then the said parcels of land may not be partitioned
simultaneously with the other properties subject of the partition case before the RTC. In such
case, although the parties in the case before the RTC are still co-owners of the said parcels
of land, the RTC would not have the authority to direct the partition of the said parcels of
land as the proceedings before it is only concerned with the estate of Spouses Baylon.
WHEREFORE, in consideration of the foregoing disquisitions, the petition is PARTIALLY
GRANTED. The Decision dated October 26, 2007 issued by the Court of Appeals in CA-G.R.
CV No. 01746 is MODIFIED in that the Decision dated October 20, 2005 issued by the
Regional Trial Court, Tanjay City, Negros Oriental, Branch 43 in Civil Case No. 11657, insofar
as it decreed the rescission of the Deed of Donation dated July 6, 1997 is
herebyREINSTATED. The case is REMANDED to the trial court for the determination of the
ownership of Lot No. 4709 and half of Lot No. 4706 in accordance with this Decision.
SO ORDERED.

FIRST DIVISION
G.R. No. 204444, January 14, 2015
VIRGILIO C. BRIONES, Petitioner, v. COURT OF APPEALS AND CASH ASIA CREDIT
CORPORATION, Respondents.
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for certiorari1 are the Decision2 dated March 5, 2012 and the
Resolution3 dated October 4, 2012 of the Court of Appeals(CA) in CA-G.R. SP No. 117474,
which annulled the Orders dated September 20, 20104 and October 22, 20105 of the

Regional Trial Court of Manila, Branch 173 (RTC) in Civil Case No. 10-124040, denying private
respondent Cash Asia Credit Corporations (Cash Asia) motion to dismiss on the ground of
improper venue.cralawred
The Facts
The instant case arose from a Complaint6 dated August 2, 2010 filed by Virgilio C. Briones
(Briones) for Nullity of Mortgage Contract, Promissory Note, Loan Agreement, Foreclosure of
Mortgage, Cancellation of Transfer Certificate of Title (TCT) No.290846, and Damages against
Cash Asia before the RTC.7 In his complaint, Briones alleged that he is the owner of a
property covered by TCT No. 160689 (subject property),and that, on July 15, 2010, his sister
informed him that his property had been foreclosed and a writ of possession had already
been issued in favor of Cash Asia.8 Upon investigation, Briones discovered that: (a) on
December 6, 2007, he purportedly executed a promissory note, 9 loan agreement,10 and deed
of real estate mortgage11covering the subject property (subject contracts) in favor of Cash
Asia in order to obtain a loan in the amount of P3,500,000.00 from the latter; 12 and (b) since
the said loan was left unpaid, Cash Asia proceeded to foreclose his property. 13 In this
relation, Briones claimed that he never contracted any loans from Cash Asia as he has been
living and working in Vietnam since October 31, 2007. He further claimed that he only went
back to the Philippines on December 28, 2007 until January 3, 2008 to spend the holidays
with his family, and that during his brief stay in the Philippines, nobody informed him of any
loan agreement entered into with Cash Asia. Essentially, Briones assailed the validity of the
foregoing contracts claiming his signature to be forged.14chanRoblesvirtualLawlibrary
For its part, Cash Asia filed a Motion to Dismiss 15 dated August 25, 2010, praying for the
outright dismissal of Brioness complaint on the ground of improper venue. 16 In this regard,
Cash Asia pointed out the venue stipulation in the subject contracts stating that all legal
actions arising out of this notice in connection with the Real Estate Mortgage subject hereof
shall only be brought in or submitted to the jurisdiction of the proper court of Makati
City.17 In view thereof, it contended that all actions arising out of the subject contracts may
only be exclusively brought in the courts of Makati City, and as such, Brioness complaint
should be dismissed for having been filed in the City of Manila. 18chanRoblesvirtualLawlibrary
In response, Briones filed an opposition,19 asserting, inter alia, that he should not be covered
by the venue stipulation in the subject contracts as he was never a party therein. He also
reiterated that his signatures on the said contracts were
forgeries.20chanRoblesvirtualLawlibrary
The RTC Ruling
In an Order21 dated September 20, 2010, the RTC denied Cash Asias motion to dismiss for
lack of merit. In denying the motion, the RTC opined that the parties must be afforded the
right to be heard in view of the substance of Brioness cause of action against Cash Asia as
stated in the complaint.22chanRoblesvirtualLawlibrary
Cash Asia moved for reconsideration23 which was, however, denied in an Order24 dated
October 22, 2010. Aggrieved, it filed a petition for certiorari25 before the CA.cralawred
The CA Ruling
In a Decision26 dated March 5, 2012, the CA annulled the RTC Orders, and accordingly,
dismissed Brioness complaint without prejudice to the filing of the same before the proper
court in Makati City.27It held that the RTC gravely abused its discretion in denying Cash Asias
motion to dismiss, considering that the subject contracts clearly provide that actions arising

therefrom should be exclusively filed before the courts of Makati City only. 28 As such, the CA
concluded that Brioness complaint should have been dismissed outright on the ground of
improper venue,29 this, notwithstanding Brioness claim of forgery.
Dissatisfied, Briones moved for reconsideration,30 which was, however, denied in a
Resolution31 dated October 4, 2012, hence, this petition.
The Issue Before the Court
The primordial issue for the Courts resolution is whether or not the CA gravely abused its
discretion in ordering the outright dismissal of Brioness complaint on the ground of
improper venue.
The Courts Ruling
The petition is meritorious.
At the outset, the Court stresses that [t]o justify the grant of the extraordinary remedy
of certiorari, [the petitioner] must satisfactorily show that the court or quasi-judicial
authority gravely abused the discretion conferred upon it. Grave abuse of discretion
connotes judgment exercised in a capricious and whimsical manner that is tantamount to
lack of jurisdiction. To be considered grave, discretion must be exercised in a despotic
manner by reason of passion or personal hostility, and must be so patent and gross as to
amount to an evasion of positive duty or to a virtual refusal to perform the duty enjoined by
or to act at all in contemplation of law.32chanRoblesvirtualLawlibrary
Guided by the foregoing considerations, the Court finds that the CA gravely abused its
discretion in ordering the outright dismissal of Brioness complaint against Cash Asia,
without prejudice to its re-filing before the proper court in Makati City.
Rule 4 of the Rules of Court governs the rules on venue of civil actions, to
wit:chanroblesvirtuallawlibrary
Rule 4
VENUE OF ACTIONS
SECTION 1. Venue of real actions. Actions affecting title to or possession of real property,
or interest therein, shall be commenced and tried in the proper court which has jurisdiction
over the area wherein the real property involved, or a portion thereof, is situated.
Forcible entry and detainer actions shall be commenced and tried in the municipal trial court
of the municipality or city wherein the real property involved, or a portion thereof, is
situated.
SEC. 2. Venue of personal actions. All other actions may be commenced and tried where
the plaintiff or any of the principal plaintiffs resides, or where the defendant or any of the
principal defendants resides, or in the case of a non-resident defendant where he may be
found, at the election of the plaintiff.
SEC. 3. Venue of actions against nonresidents. If any of the defendants does not reside
and is not found in the Philippines, and the action affects the personal status of the plaintiff,
or any property of said defendant located in the Philippines, the action may be commenced
and tried in the court of the place where the plaintiff resides, or where the property or any
portion thereof is situated or found.

SEC. 4. When Rule not applicable. This Rule shall not apply
(a) In those cases where a specific rule or law provides otherwise; or
(b) Where the parties have validly agreed in writing before the filing of the action on the
exclusive venue thereof.
Based therefrom, the general rule is that the venue of real actions is the court which has
jurisdiction over the area wherein the real property involved, or a portion thereof, is situated;
while the venue of personal actions is the court which has jurisdiction where the plaintiff or
the defendant resides, at the election of the plaintiff. As an exception, jurisprudence
in Legaspi v. Rep. of the Phils.33 instructs that the parties, thru a written instrument, may
either introduce another venue where actions arising from such instrument may be filed, or
restrict the filing of said actions in a certain exclusive venue, viz.:chanroblesvirtuallawlibrary
The parties, however, are not precluded from agreeing in writing on an exclusive venue, as
qualified by Section 4 of the same rule. Written stipulations as to venue may be
restrictive in the sense that the suit may be filed only in the place agreed upon, or
merely permissive in that the parties may file their suit not only in the place
agreed upon but also in the places fixed by law. As in any other agreement, what is
essential is the ascertainment of the intention of the parties respecting the matter.
As regards restrictive stipulations on venue, jurisprudence instructs that it must
be shown that such stipulation is exclusive. In the absence of qualifying or
restrictive words, such as exclusively, waiving for this purpose any other venue, shall
only preceding the designation of venue, to the exclusion of the other courts, or words of
similar import, the stipulation should be deemed as merely an agreement on an
additional forum, not as limiting venue to the specified place.34 (Emphases and
underscoring supplied)
In this relation, case law likewise provides that in cases where the complaint assails only the
terms, conditions, and/or coverage of a written instrument and not its validity, the exclusive
venue stipulation contained therein shall still be binding on the parties, and thus, the
complaint may be properly dismissed on the ground of improper venue. 35 Conversely,
therefore, a complaint directly assailing the validity of the written instrument itself should
not be bound by the exclusive venue stipulation contained therein and should be filed in
accordance with the general rules on venue.To be sure, it would be inherently consistent for
a complaint of this nature to recognize the exclusive venue stipulation when it, in fact,
precisely assails the validity of the instrument in which such stipulation is contained.
In this case, the venue stipulation found in the subject contracts is indeed restrictive in
nature, considering that it effectively limits the venue of the actions arising therefrom to the
courts of Makati City. However, it must be emphasized that Brioness complaint directly
assails the validity of the subject contracts, claiming forgery in their execution. Given this
circumstance, Briones cannot be expected to comply with the aforesaid venue stipulation, as
his compliance therewith would mean an implicit recognition of their validity. Hence,
pursuant to the general rules on venue, Briones properly filed his complaint before a court in
the City of Manila where the subject property is located.
In conclusion, the CA patently erred and hence committed grave abuse of discretion in
dismissing Brioness complaint on the ground of improper venue.chanrobleslaw
WHEREFORE, the petition is GRANTED. Accordingly, the Decision dated March 5, 2012 and
the Resolution dated October 4, 2012 of the Court of Appeals in CA-G.R. SP No. 117474 are
herebyANNULLED and SET ASIDE. The Orders dated September 20, 2010 and October 22,

2010 of the Regional Trial Court of Manila, Branch 173 in Civil Case No. 10-124040
are REINSTATED.
SO ORDERED.cralawlawlibrary

Republic of the Philippines


SUPREME COURT
Manila

SECOND DIVISION
G.R. No. 200191

August 20, 2014

LOURDES C. FERNANDEZ, Petitioner,


vs.
NORMA VILLEGAS and any person acting in her behalf including her
family, Respondents.
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari 1 are the Resolutions dated June 22,
20112 and December 28, 20113 of the Court of Appeals (CA) in CA-G.R. SP No. 116143 which
dismissed the petition for review under Rule 42 of the Rules of Court 4 (CA petition) due to
defective verification and certification against forum shopping.
The Facts
On August 21, 2008, petitioner Lourdes C. Fernandez (Lourdes) and her sister, Cecilia Siapno
(Cecilia), represented by her attorney-in-fact, Imelda S. Slater (Imelda), filed a Complaint for
Ejectment5 before the Municipal Trial Court in Cities, Branch 1, Dagupan City(MTCC),
docketed as Civil Case No. 15980, against respondent Norma Villegas (Norma) and any
person acting in her behalf including her family (respondents), seeking to recover possession
of a parcel of land situated in Guilig Street, Dagupan City covered by Transfer Certificate of
Title (TCT) No. 191706 (subject property).
In their complaint, Lourdes and Cecilia(plaintiffs) averred that they are the registered owners
of the subject property on which both Lourdes and respondents previously lived under
oneroof. However, when their house was destroyed by typhoon "Cosme," Lourdes
transferred to a nipahut on the same lot, while Norma, Cecilias daughter-in-law, and her
family were advised to relocate but, in the meantime, allowed to use a portion
thereof.7Instead, respondents erecteda house thereon over plaintiffs objections and, despite
demands, refused to vacate and surrender possession of the subject property. 8 The dispute
was referred to the Barangay Office of Pugo9Chico and the Public Attorneys Office, both of
Dagupan City, but no settlement was reached.10
For their part, respondents, in their Answer,11 averred that the complaint stated no cause of
action,considering that Lourdes has no standing to question their possession ofthe subject
property as she had already donated her portion in favor of Cecilia, 12 adding too that the
latter is bound by her declaration that"the house and lot belong[s] to Eddie," who is Normas
late husband.13 Respondents further asserted that there was no compliance with the
required conciliation and mediation under the Katarungang Pambarangay Law 14 as no
Certificate to File Action was attached to the complaint, 15 thereby rendering the complaint
dismissible.
The MTCC Ruling

In a Decision16 dated September 30, 2009,the MTCC found that respondents failed to impugn
the validity of plaintiffs ownership over the subject property. As owners, plaintiffs therefore
have the right to enjoy the use and receive the fruits from the saidproperty, as well as to
exclude one from its enjoyment pursuant to Articles 428 and 429 of the Civil
Code.17 Accordingly, the MTCC ordered respondents to: (a) vacate the subject property and
pay plaintiffs the amount of P1,000.00 per month as reasonable compensation for the use
and occupation of the portion of the lot occupied by them, reckoned from the filing of the
complaint; (b) pay plaintiffs P10,000.00 as attorneys fees; and (c) pay the cost of suit.18
Dissatisfied with the MTCCs ruling, respondents filed an appeal 19 before the Regional Trial
Court ofDagupan City (RTC), Branch 40, docketed as Civil Case No. 2009-0224-D.
The RTC Ruling
In a Decision20 dated March 16, 2010, the RTC, Branch 40 granted respondents appeal and
ordered the dismissal of plaintiffs complaint based on the following grounds: (a) there was
no substantial compliance with the mandatory conciliation and mediation process before the
barangay, especially considering that the parties are very close relatives; 21 and (b)
respondents are builders in good faith and cannot be summarily ejected from the subject
property without compliance with the provisions of Articles 448, 546, and 548 of the Civil
Code.22
The RTC, Branch 40 further ordered plaintiffs to jointly and severally pay respondents the
amount of P50,000.00 as attorneys fees.23
Aggrieved, plaintiffs filed a motion for reconsideration24 which was denied by the RTC,
Branch 4425 in a Resolution26 dated August 18, 2010, prompting the filing of the CA petition.
The CA Proceedings
In response to plaintiffs CA petition, respondents filed a Motion to Dismiss Appeal on the
grounds that: (a) Cecilia failed to personally verify the petition; and (b) the appeal is
dilatory.27 In their comment, plaintiffs maintained that Lourdes, as co-owner of the subject
property, has the right tofile an ejectment case by herself, without joining her co-owner,
Cecilia, as provided under Article 487 of the Civil Code. Moreover, Lourdes was specially
authorized by Imelda to file the CA petition.28
In a Resolution29 dated June 22, 2011, the CA granted respondents Motion to Dismiss
Appeal, holding that the verification and certification30 against forum shopping attached to
the CA petition was defective since it was signed only by Lourdes, one of the plaintiffs in the
case, in violation of Section 5,31 Rule 7 of the Rules of Court which requires all the plaintiffs
to sign the same.32 There was also no showing that Lourdes was authorized by her coplaintiff, Cecilia, to represent the latter and to sign the said certification, and neither did the
submission of the special powers of attorney of Cecilia and Imelda to that effect constitute
substantial compliance with the rules.33The CA further noted that plaintiffs failed to comply
with its prior Resolution dated October 11, 2010 requiring the submission of an amended
verification/certification against forum shopping within five (5) days from notice, warranting
the dismissal of the CA petition on this score.34

At odds with the CAs resolution, plaintiffs sought reconsideration 35 but the same was denied
in a Resolution36dated December 28, 2011, hence, the instant petition filed by Lourdes
alone.
The Issue Before the Court
The primordial issue in this case is whether or not the CA erred in dismissing outright the CA
petition due to a defective verification and certification against forum shopping attached to
the CA petition.
The Courts Ruling
The present petition has merit.
The Court laid down the following guidelines with respect to noncompliance with the
requirements on or submission of a defective verification and certification against forum
shopping, viz.:
1) A distinction must be madebetween non-compliance with the requirement on or
submission of defective verification, and noncompliance with the requirement on or
submission of defective certification against forum shopping.
2) As to verification, non-compliance therewith or a defect therein does not
necessarily render the pleading fatally defective. The court may order its submission
or correction or act on the pleading if the attending circumstances are such that
strictcompliance with the Rule may be dispensed with in order that the endsof justice
may be served thereby.
3) Verification is deemed substantially compliedwith when one who has ample
knowledge to swear tothe truth of the allegations in the complaint or petition signs
the verification, and when matters alleged in the petition have been made in
goodfaith or are true and correct.
4) As to certification against forum shopping, non-compliance therewith or a defect
therein, unlike in verification, is generally not curable by its subsequent submission
orcorrection thereof, unless there is a need to relax the Rule on the ground of
"substantial compliance" or presence of "special circumstances or compelling
reasons."
5) The certification against forum shopping must be signed by all the plaintiffs or
petitioners in a case; otherwise, those who did not sign will be dropped as parties to
the case. Under reasonable or justifiable circumstances, however, as when all the
plaintiffs or petitioners share a common interestand invoke a common cause of
action or defense, the signature of only one of them in the certification against forum
shopping substantially complies with the Rule.
6) Finally, the certification against forum shopping must be executed by the partypleader, not by his counsel. If, however, for reasonable or justifiable reasons, the

party-pleader is unable to sign, he must execute a Special Power of Attorney


designating his counsel of record to sign on his behalf.37 (Emphases supplied)
Applying these guidelines to the caseat bar, particularly, those stated in paragraphs 3 and 5
highlighted above, the Court finds that the CA committed reversible error in dismissing the
CA petition due to a defective verification and certification against forum shopping.
A. Substantial Compliance with the Verification Requirement.
It is undisputed that Lourdes is not only a resident of the subject property but is a co-owner
thereof together with her co-plaintiff/sister, Cecilia. As such, she is "one who has ample
knowledge to swear to the truth of the allegations in the x x x [CA] petition" and is therefore
qualified to "sign x x x the verification" attached thereto in view of paragraph 3 of the
above-said guidelines.1wphi1
In fact, Article 487 of the Civil Code explicitly provides that any of the co-owners may bring
an action for ejectment, without the necessity of joining all the other co-owners as coplaintiffs because the suit is deemed to be instituted for the benefit of all. 38 To reiterate, both
Lourdes and Cecilia are co-plaintiffs in the ejectment suit. Thus, they share a commonality of
interest and cause of action as against respondents. Notably, even the petition for review
filed before the CA indicated that they are the petitioners therein and that the same was
filed on their behalf. Hence, the lone signature of Lourdes on the verification attached to the
CA petition constituted substantial compliance with the rules. 39 As held in the case of
Medado v. Heirs of the Late Antonio Consing:40
[W]here the petitioners are immediate relatives, who share a common interestin the
property subject of the action, the fact that only one of the petitioners executed the
verification or certification of forum shopping will not deter the court from proceeding with
the action.41 (Emphases and underscoring supplied)
Besides, it is settled that the verification of a pleading is only a formal, not a jurisdictional
requirement intended to secure the assurance that the matters alleged in a pleading are
true and correct. Therefore, the courts may simply order the correction of the pleadings
oract on them and waive strict compliance with the rules,42 as in this case.
B. Substantial Compliance with the Certification Against Forum Shopping Requirement.
Following paragraph 5 of the guidelinesas aforestated, there was also substantial compliance
with the certification against forum shopping requirement, notwithstanding the fact that only
Lourdes signed the same.
It has been held that under reasonable or justifiable circumstances - as in this case where
the plaintiffs or petitioners share a common interest and invoke a common cause of action
or defense - the rule requiring all such plaintiffs or petitioners to sign the certification against
forum shopping may be relaxed.43 Consequently, the CA erred in dismissing the petition on
this score.

Similar to the rules on verification, the rules on forum shopping are designed to promote and
facilitate the orderly administration of justice; hence, it should not be interpreted with such
absolute literalness as to subvert its own ultimate and legitimate objectives. The
requirement of strict compliance with the provisions on certification against forum shopping
merely underscores its mandatory nature to the effect that the certification cannot
altogether be dispensed with or its requirements completely disregarded. It does not prohibit
substantial compliance with the rules under justifiable circumstances, 44 as also in this case.
As there was substantial compliance with the above-discussed procedural requirements at
the onset, plaintiffs' subsequent failure to file an amended verification and certification, as
directed by the October 11, 2010 CA Resolution, should not have warranted the dismissal of
the CA petition.
WHEREFORE, the petition is GRANTED. The Resolutions dated January 22, 2011 and
December 28, 2011 of the Court of Appeals (CA) in CA-G.R. SP No. 116143 are hereby
REVERSED and SET ASIDE. Accordingly, the case is REINSTATED and REMANDED to the CA
for proper and immediate disposition.
SO ORDERED.