-DEPOSITIONS PENDING ACTIONS

-DEPOSITIONS BEFORE ACTION OF PENDING APPEAL

-INTERROGATIONS TO PARTIES
- ADMISSION BY ADVERSE PARTY
-PRODUCTION OR INSPECTION OF DOCUMENTS OR THINGS
-PHYSICAL AND MENTAL EXAMINATION OF PERSONS
- REFUSAL TO COMPLY WITH MODES OF DISCOVERY

TRIAL
- What is trial
- Order of trial
- Consolidation or severance
- Trial by commissioner

CONSOLIDATION OR SEVERANCE
- What is consolidation
- Purpose of Consolidation
- When is consolidation proper
- What is severance
- When is severance proper

FIRST DIVISION
 [ G.R. No. 69260, December 22, 1989 ]
MUNICIPALITY OF BIAN, PETITIONER, VS. HON. JOSE MAR GARCIA, JUDGE OF
THE REGIONAL TRIAL COURT AT BIAN, LAGUNA (BRANCH XXIV, REGION IV),
AND ERLINDA FRANCISCO, RESPONDENTS.

DECISION
NARVASA, J.:
Three (3) questions are resolved in the action of certiorari at bar. The first is whether
the special civil action of eminent domain under Rule 67 of the Rules of Court is a case
"wherein multiple appeals are allowed," [1] as regards which "the period of appeal shall
be thirty [30] days,"[2] instead of fifteen (15) days. [3] The second is whether or not the
Trial Court may treat the "motion to dismiss" filed by one of the defendants in the action
of eminent domain as a motion to dismiss under Rule 16 of the Rules of Court, reverse
the sequence of trial in order and hear and determine said motion to dismiss, and
thereafter dismiss the expropriation suit as against the movant. And the third is whether
or not a "locational clearance" issued by the Human Settlement Regulatory Commission
relative to use of land is a bar to an expropriation suit involving that land.
The expropriation suit involved in this certiorari proceeding was commenced by
complaint of the Municipality ofBian, Laguna, [4] filed in the Regional Trial Court of
Laguna and City of San Pablo, presided over by respondent Judge Jose Mar
Garcia. The complaint named as defendants the owners of eleven (11) adjacent
parcels of land inBian with an aggregate area of about eleven and a half (11-1/2)
hectares. The land sought to be expropriated was intended for use as the new site of a
modern public market and the acquisition was authorized by a resolution of
the Sangguniang Bayan of Bian approved on April 11, 1983.
One of the defendants was Erlinda Francisco. She filed a "Motion to Dismiss" dated
August 26, 1983, on the following grounds: (a) the allegations of the complaint are
vague and conjectural; (b) the complaint violates the constitutional limitations of law and
jurisprudence on eminent domain; (c) it is oppressive; (d) it is barred by prior decision
and disposition on the subject matter; and (e) it states no cause of action.1 Now, her
"motion to dismiss" was filed pursuant to Section 3, Rule 67 of the Rules of Court:
"SEC. 3. Defenses and objections. - Within the time specified in the summons, each
defendant, in lieu of an answer, shall present in a single motion to dismiss or for other
appropriate relief, all of his objections and defenses to the right of the plaintiff to take his
property for the use or purpose specified in the complaint. All such objections and
defenses not so presented are waived. A copy of the motion shall be served on the
plaintiffs attorney of record and filed with the court with the proof of service."
Her "motion to dismiss" was thus actually a pleading, taking the place of an answer in
an ordinary civil action;2 it was not an ordinary motion governed by Rule 15, or a
"motion to dismiss" within the contemplation of Rule 16 of the Rules of Court.
On October 23, 1983, respondent Judge issued a writ of possession in favor of
the plaintiff Municipality.

On February 3, 1984, Erlinda Francisco filed a "Motion for Separate Trial," invoking
Section 2, Rule 31.3 She alleged that there had already been no little delay in bringing
all the defendants within the court's jurisdiction, and some of the defendants seemed
"nonchalant or without special interest in the case" if not mere "free riders;" and "while
the cause of action and defenses are basically the same," she had, among other
defenses, "a constitutional defense of vested right via a pre-existing
approved Locational Clearance from the H.S.R.C.4" Until this clearance was revoked,
Francisco contended, or the Municipality had submitted and obtained approval of a
"rezoning of the lots in question," it was premature for it to "file a case for
expropriation."5 The Court granted the motion. By Order dated March 2, 1984, it
directed that "a separate trial be held for defendant Erlinda Francisco regarding her
special defenses mentioned in her ** Motion for Separate Trial and in her Motion to
Dismiss, distinct from and separate from the defenses commonly raised by all the
defendants in their respective motions to dismiss."
At the separate trial, the Fiscal, in representation of the Municipality called the Trial
Court's attention to the irregularity of allowing Francisco to present her evidence ahead
of the plaintiff, "putting the cart before the horse, as it were." He argued that the motion
to dismiss was in truth an answer, citing Rural Progress Administration v. Judge de
Guzman, and its filing did "not mean that the order of presentation of evidence will be
reversed," but the usual procedure should be followed; and the evidence adduced
should be deemed "evidence only for the motion for reconsideration of the writ of
possession."1
Nevertheless, at the hearings of March 5, and March 26, 1984, the Court directed
Francisco to commence the presentation of evidence. Francisco presented the
testimony of Atty. Josue L. Jorvina, Jr. and certain exhibits -- the Land Use Map of the
Municipality of Bian, the Locational Clearance and Development Permit issued by the
HSRC in favor of "Erlinda Francisco c/o Ferlins Realty & Development Corporation, and
Executive Order No. 648 and Letter of Instructions No. 729, etc. Thereafter, the
respondent Judge issued an Order dated July 24, 1984 dismissing the complaint "as
against defendant ERLINDA FRANCISCO," and amending the Writ of Possession dated
October 18, 1983 so as to "exclude therefrom and from its force and effects said
defendant ** and her property **." His Honor found that -
1) a Locational Clearance had been issued on May 4, 1983 by the Human Settlements
Regulatory Commission to the "Ferlin's Realty ** owned by defendant Erlinda Francisco
to convert ** (her) lot to a commercial complex;"
2) according to the testimony of Atty. Jorvina of the HSRC, "a grantee of
a locational clearance acquires a vested right over the subject property in the sense that
* * said property may not be subject of an application for locationalclearance by another
applicant while said locational clearance is subsisting;"
3) such a clearance should be "considered as a decision and disposition of private
property co-equal with or in parity with a disposition of private property through eminent
domain;"
4) the clearance was therefore "a legal bar against the right of plaintiff Municipality * * to
expropriate the said property."
The Municipality filed on August 17, 1984 a Motion for Reconsideration. Therein it (a)
reiterated its contention respecting the irregularity of the reversal of the order of
trial, supra,2 (b) decried the act of the Court in considering the case submitted for
decision after the presentation of evidence by Francisco without setting the case for
further hearing for the reception of the plaintiffs own proofs, (c) pointed out that as
admitted by Atty. Jorvina, the locationalclearance did not "mean that other persons are
already prevented from filing locational clearance for the same project, and so could not
be considered a bar to expropriation, (d) argued that the locational clearance, issued on
May 4, 1983, became a "worthless sheet of paper" one year later, on May 4, 1984 in
accordance with the explicit condition in the clearance that it "shall be considered
automatically revoked it not used within a period of one (1) year from date of issue," the
required municipal permits to put up the commercial complex never having been
obtained by Francisco; and (e) alleged that all legal requirements for the expropriation
of the property had been duly complied with by the Municipality.1
The Municipality set its motion for reconsideration for hearing on August 28, 1984 after
furnishing Francisco's counsel with copy thereof. The Court however re-scheduled the
hearing more than two (2) months later, onNovember 20, 1984.2 Why the hearing was
reset to such a remote date is not explained.
On September 13, 1984, Francisco filed an "Ex-Parte Motion for Execution and/or
Finality of Order," contending that the Order of July 27, 1984 had become "final
and executory on August 12, 1984" for failure of the Municipality "to file a motion for
reconsideration and/or appeal within the reglementary period,"3 i.e., "fifteen (15) days
counted from the notice of the final order ** appealed from."4
On October 10, 1984, the Court issued an Order declaring the Municipality's motion for
reconsideration dated August 15, 1984 to have been "filed out of time," on account of
which the Court "could not give due course to and/or act ** (thereon) except to dismiss
(as it did thereby dismiss) the same."5 It drew attention to the fact that notice of its
Order of July 24, 1984 (dismissing the complaint as against Francisco) was served
on plaintiffMunicipality on July 27, 1984, but its motion for reconsideration was not
presented until August 17, 1984, beyond the fifteen-day period for appeal prescribed by
law. And on October 15, 1985, His Honor promulgated another Order directing the
issuance of (1) a writ of execution of the Order of July 24, 1984, and (2) a "certificate of
finality" of said order.6
The Municipality attempted to have the respondent Court reconsider both said Orders of
October 10, and October 15, 1984. To this end it submitted a motion contending that:7
1) "multiple appeals are allowed by law" in actions of eminent domain, and hence the
period of appeal is thirty (30), not fifteen (15) days;
2) moreover, the grant of a separate trial at Francisco's instance had given rise "ipso
facto to a situation where multiple appeals became available (Sections 4 and 5, Rule
36, **; Santos v. Pecson, 79 Phil. 261);"
3) it was wrong for the Trial Court to have acted ex parte on the motion for execution,
the motion being "litigable in character;" and
4) it (the Municipality) was denied due process when the Court, after receiving
Francisco's evidence and admitting her exhibits, immediately resolved the case on the
merits as regards Francisco, without setting the case "for further hearing for reception of
evidence for the plaintiff."
The motion was denied, by Order dated October 18, 1984; hence, the special civil
action of certiorari at bar.
1. There are two (2) stages in every action of expropriation. The first is concerned with
a determination of the authority of the plaintiff to exercise the power of eminent domain
and the propriety of its exercise in the context of the facts involved in the suit.1 It ends
with an order, if not of dismissal of the action, "of condemnation declaring that the
plaintiff has a lawful right to take the property sought to be condemned, for the public
use or purpose described in the complaint, upon the payment of just compensation to
be determined as of the date of the filing of the complaint."2 An order of dismissal, if this
be ordained, would be a final one, of course, since it finally disposes of the action and
leaves nothing more to be done by the Court on the merits.3 So, too, would an order of
condemnation be a final one, for thereafter, as the Rules expressly state, in the
proceedings before the Trial Court, "no objection to the exercise of the right of
condemnation (or the propriety thereof) shall be filed or heard."4
The second phase of the eminent domain action is concerned with the determination by
the Court of "the just compensation for the property sought to be taken." This is done by
the Court with the assistance of not more than three (3) commissioners.5 The order
fixing the just compensation on the basis of the evidence before, and findings of, the
commissioners would be final, too. It would finally dispose of the second stage of the
suit, and leave nothing more to be done by the Court regarding the issue. Obviously,
one or another of the parties may believe the order to be erroneous in its appreciation of
the evidence or findings of fact or otherwise. Obviously, too, such adissatisfied party
may seek reversal of the order by taking an appeal therefrom.
A similar two-phase feature is found in the special civil action of partition and accounting
under Rule 69 of the Rules of Court.6
The first phase of a partition and/or accounting suit is taken up with the determination of
whether or not a co-ownership in fact exists, and a partition is proper (i.e., not otherwise
legally proscribed) and may be made by voluntary agreement of all the parties
interested in the property.7 This phase may end with a declaration that plaintiff is not
entitled to have a partition either because a co-ownership does not exist, or partition is
legally prohibited.8 It may end, on the other hand, with an adjudgment that a co-
ownership does in truth exist, partition is proper in the premises and an accounting of
rents and profits received by the defendant from the real estate in question is in
order.1 In the latter case, "the parties may, if they are able to agree, make partition
among themselves by proper instruments of conveyance, and the court shall confirm
the partition so agreed upon."2 In either case -- i.e., either the action is dismissed or
partition and/or accounting is decreed -- the order is a final one, and may be appealed
by any party aggrieved thereby.3
The second phase commences when it appears that "the parties are unable to agree
upon the partition" directed by the Court. In that event partition shall be done for the
parties by the Court with the assistance of not more than three (3)
commissioners.4 This second stage may well also deal with the rendition of the
accounting itself and its approval by the Court after the parties have been accorded
opportunity to be heard thereon, and an award for the recovery by the party or parties
thereto entitled of their just share in the rents and profits of the real estate in
question."5 Such an order is, to be sure, final and appealable.
Now, this Court has settled the question of the finality and appealability of a decision or
order decreeing partition or recovery of property and/or accounting. In Miranda v. Court
of Appeals, decided on June 18, 1986,6 the Court resolved the question affirmatively,
and expressly revoked the rulings in Zaldarriaga v. Enriquez7 -- that a decision or order
of partition is not final because it leaves something more to be done in the trial court for
the complete disposition of the case, i.e., the appointment of commissioners, the
proceedings for the determination by said commissioners of just compensation, the
submission of their reports, the hearing thereon, and the approval of the partition -- and
in Fuentebella v. Carrascoso8 -- that a judgment for recovery of property with
accounting is not final, but merely interlocutory and hence not appealable until the
accounting is made and passed upon. As pointed out in Miranda, imperative
considerations of public policy, of sound practice and adherence to the constitutional
mandate of simplified, just, speedy and inexpensive determination of every action
require that judgments for recovery (or partition) of property with accounting be
considered as final judgments, duly appealable. This, notwithstanding that further
proceedings will still have to take place in the Court, i.e., the accounting will still have to
be rendered by the party required to do so, it will be ventilated and discussed by the
parties, and will eventually be passed upon by the Court. It is of course entirely
possible that the Court's disposition may not sit well with either the party in whose favor
the accounting is made, or the party rendering it. In either case, the Court's
adjudication on the accounting is without doubt a final one, for it would finally terminate
the proceedings thereon and leave nothing more to be done by the Court on the merits
of the issue. And it goes without saying that any party feeling aggrieved by that ultimate
action of the Court on the accounting may seek reversal or modification thereof by the
Court of Appeals or the Supreme Court.1
The Miranda doctrine was reiterated in de Guzman
v. C.A.;2 Valdez v. Bagaso;3 Lagunzad v. Gonzales;4 Cease v.
C.A.;5 Macadangdang v. C.A.;6 and Hernandez v. C.A.;7 Gabor v. C.A.,8 Fabrica v.
C.A.9
No reason presents itself for a different disposition as regards cases of eminent
domain. On the contrary, the close analogy between the special actions of eminent
domain and partition already pointed out, argues for the application of the same rule to
both proceedings.
The Court therefore holds that in actions of eminent domain, as in actions for partition,
since no less than two (2) appeals are allowed by law, the period for appeal from an
order of condemnation10 is thirty (30) days counted from notice of said order, and not
the ordinary period of fifteen (15) days prescribed for actions in general, conformably
with the provisions of Section 39 of Batas Pambansa Bilang 129, in relation to
paragraph 19 (b) of the Implementing Rules to the effect that in "appeals in special
proceedings in accordance with Rule 109 of the Rules of Court and other cases
wherein multiple appeals are allowed, the period of appeal shall be thirty (30) days, a
record of appeal being required.11
The Municipality's motion for reconsideration filed on August 17, 1984 was therefore
timely presented, well within the thirty-day period laid down by law therefor; and it was
error for the Trial Court to have ruled otherwise and to have declared that the order
sought to be reconsidered had become final and executory.
2. As already observed, the Municipality's complaint for expropriation impleaded eleven
(11) defendants. A separate trial was held on motion of one of
them, Erlinda Francisco,12 it appearing that she had asserted a defense personal and
peculiar to her, and inapplicable to the other defendants, supra. Subsequently, and on
the basis of the evidence presented by her, the Trial Court promulgated a separate
Order dismissing the action as to her, in accordance with Section 4, Rule 36 of the
Rules of Court, reading as follows:
SEC. 4. Several judgments. -- In an action against several defendants, the court may,
when a several judgment is proper, render judgment against one or more of them,
leaving the action to proceed against the others.
It is now claimed by the Municipality that the issuance of such a separate, final order or
judgment had given rise"ipso facto to a situation where multiple appeals became
available." The Municipality is right.
In the case at bar, where a single complaint was filed against several defendants having
individual, separate interests, and a separate trial was held relative to one of said
defendants after which a final order or judgment was rendered on the merits of the
plaintiffs claim against that particular defendant, it is obvious that in the event of an
appeal from that separate judgment, the original record cannot and should not be sent
up to the appellate tribunal. The record will have to stay with the trial court because it
will still try the case as regards the other defendants. As the rule above quoted states,
"In an action against several defendants, the court may, when a several judgment is
proper, render judgment against one or more of them, leaving the action to proceed
against the others."1 In lieu of the original record, a record on appeal will perforce have
to be prepared and transmitted to the appellate court. More than one appeal being
permitted in this case, therefore, "the period of appeal shall be thirty (30) days, a record
of appeal being required," as provided by the Implementing Rules in relation to Section
39 of B.P. Blg. 129,supra.2
3. Erlinda Francisco filed a "motion to dismiss" in traverse of the averments of the
Municipality's complaint for expropriation. That "motion to dismiss" was in fact the
indicated responsive pleading to the complaint, "in lieu of an answer."3
Now, the Trial Court conducted a separate trial to determine whether or not, as alleged
by Francisco in her "motion to dismiss," she had a "vested right via a pre-existing
approved Locational Clearance from the HSRC," making the expropriation suit
premature.4 While such a separate trial was not improper in the premises,5 and was not
put at issue by the Municipality, the latter did protest against the Trial Court's (a)
reversing the order of trial and receiving first, the evidence of defendant Francisco, and
(b) subsequently rendering its order sustaining Francisco's defense and dismissing the
action as to her, solely on the basis of said Francisco's evidence and without giving the
plaintiff an opportunity to present its own evidence on the issue. The Trial Court was
clearly wrong on both counts. The Court will have to sustain the Municipality on these
points.
Nothing in the record reveals any valid cause to reverse the order of trial. What the Trial
Court might have had in mind was the provision of Section 5, Rule 16 of the Rules of
Court allowing "any of the grounds for dismissal" in Rule 16 to "be pleaded as an
affirmative defense," and authorizing the holding of a "preliminary hearing ** thereon as
if a motion to dismiss had been filed." Assuming this to be the fact, the reception of
Francisco's evidence first was wrong, because obviously, her asserted objection or
defense -- that the locational clearance issued in her favor by the HSRC was a legal bar
to the expropriation suit -- was not a ground for dismissal under Rule 16. She evidently
meant to prove the Municipality's lack of cause of action; but lack of cause of action is
not a ground for dismissal of an action under Rule 16; the ground is the failure of the
complaint to state a cause of action, which is obviously not the same as plaintiffs not
having a cause of action.
Nothing in the record, moreover, discloses any circumstance from which a waiver by the
Municipality of the right to present contrary proofs may be inferred. So, in deciding the
issue without according the Municipality that right to present contrary evidence, the Trial
court had effectively denied the Municipality due process and thus incurred in another
reversible error.
4. Turning now to the locational clearance issued by the HSRC in Francisco's favor on
May 4, 1983, it seems evident that said clearance did become a "worthless sheet of
paper," as averred by the Municipality, upon the lapse of one (1) year from said date in
light of the explicit condition in the clearance that it "shall be considered automatically
revoked if not used within a period of one (1) year from date of issue," and
the unrebutted fact thatFancisco had not really made use of it within that period. The
failure of the Court to consider these facts, despite its attention having been drawn to
them, is yet another error which must be corrected.
WHEREFORE, the challenged Order issued by His Honor on July 24, 1984 in Civil
Case No. 8-1960 is ANNULLED AND SET ASIDE, and the case is remanded to the Trial
Court for the reception of the evidence of the plaintiff Municipality of Bian as against
defendant Erlinda Francisco, and for subsequent proceedings and judgment in
accordance with the Rules of Court and the law. Costs against private respondent.
SO ORDERED.
 EN BANC

[ G.R. No. 140884, March 06, 2001 ]

GELACIO P. GEMENTIZA, PETITIONER, VS. COMMISSION ON ELECTIONS

(SECOND DIVISION) AND VICTORIO R. SUAYBAGUIO, JR., RESPONDENTS.

DECISION

SANDOVAL-GUTIERREZ, J.:

Procedural rules in election cases are designed to achieve not only a correct but also
an expeditiousdetermination of the popular will of the electorate. Unfortunately, the
divergent interpretation of said rules by the contending parties has, until now, prolonged
the termination of such cases, thus failing to attain the desired result. Such is the
situation in the present case.

The antecedent facts are:

Petitioner Gelacio P. Gementiza and private respondent Victorio R. Suaybaguio, Jr.

were candidates for Vice-Governor in the Province of Davao del Norte during the May
11, 1998 national and local elections.

On May 18, 1998, the provincial board of canvassers proclaimed petitioner the winner,
with a total of 109,985 votes as against private respondent's 108,862, or a margin of
1,123 votes.

Claiming that fraud and irregularities were committed against him during the voting and
counting of votes, private respondent promptly filed on May 28, 1998 an election
protest[1] with the Commission on Elections (COMELEC) in Manila. The case, docketed
as EPC No. 98-58, was later assigned to public respondent COMELEC (Second
Division).

Private respondent's protest is anchored on the following grounds: (a) several members
of the Board of Election Inspectors (BEI) padded more than 1,000 votes, committed
deliberate errors in the reading of ballots, and made erroneous recording of votes in the
election returns intended to favor herein petitioner; (b) strangers, in connivance with the
BEI, voted in behalf of those who were not able to vote, and the watchers were
intimidated, threatened and forced to leave the polling places; (c) the BEI incorrectly
interpreted the rules on the appreciation of ballots numbering more than 1,000 votes
cast in favor of private respondent and were either invalidated or considered stray
votes; and (d) more than 1,000 marked ballots cast in favor of petitioner were
considered valid and counted in his favor.

These allegations were denied by petitioner in his answer [2] filed on June 22, 1998.

Thereafter, upon order by public respondent, a revision of the contested ballots from
624 protested precincts was conducted in the COMELEC central office in Manila.

After the revision proceeding was completed, and during the hearing on August 5, 1999
for the initial presentation of evidence in support of his election protest, private
respondent waived the presentation of testimonial evidence and rested his case solely
on the basis of documentary evidence consisting of the revision reports and other
election-related documents. On the same day, he formally offered these documentary
evidence. Forthwith, petitioner filed his comment thereon.

On September 6, 1999, petitioner filed a demurrer to evidence (denominated as "Motion

To Direct The Protestant Victorio R. Suaybaguio, Jr. To Show Cause Why His Protest
Should Not Be Dismissed And/Or Demurrer To The Protestant's Evidence"). [3] Petitioner
alleged therein that private respondent's allegations of "fraud and irregularities" in his
protest were "negated by the Minutes of Voting of the protested precincts which
the protestant has also adopted as his evidence," hence "his protest has no more
leg to stand on",[4] and "this Protest has no more reason to continue, nor is there
any legal justification to require the protestee to present his evidence". [5] Petitioner
thus prayed that private respondent's protest be dismissed. [6]

In an order dated October 11, 1999, [7] public respondent denied petitioner's demurrer to
evidence.

In denying petitioner's demurrer to evidence, public respondent held that it could already
ascertain the true choice of the electorate through an examination of the revision of
votes, the appreciation of the ballots and the results of the voting in the uncontested
precincts - all of which are now before the COMELEC. Moreover, following the ruling of
the Supreme Court in Demetrio vs. Lopez (50 Phil. 45 [1927]) and Jardiel vs.
COMELEC (124 SCRA 650 [1983]), the protestee in an election protest who demurs to
the evidence presented by the protestant after the latter has rested his case, impliedly
waives the presentation of his evidence. Thus, public respondent considered the case
submitted for resolution after the parties shall have filed, if they so desire, their
respective memoranda on or before November 18, 1999.

Petitioner filed a motion for reconsideration [8] of the October 11, 1999 order, contending
that it is premature and contrary to law and the due process clause of the Constitution
considering that under Section 1, Rule 33 of the 1997 Rules of Civil Procedure, as
amended, he has the right to present his evidence even if his demurrer was denied.
Moreover, the cases cited by public respondent are inapplicable in the instant case.
Thus, he prayed that he be allowed to present his evidence.

Petitioner further prayed that his motion for reconsideration be certified and elevated to
the COMELEC en bancpursuant to the provisions of Section 5, Rule 19 of the
COMELEC Rules of Procedure of February 15, 1993, which provides that "(u)pon the
filing of a motion to reconsider a decision, resolution, order or ruling of a Division, the
Clerk of Court concerned shall, within twenty-four (24) hours from the filing thereof,
notify the Presiding Commissioner. The latter shall within two (2) days thereafter certify
the case to the Commission en banc."

Public respondent, in an order dated November 29, 1999, [9] denied petitioner's motion
for reconsideration for lack of merit, citing Calabig vs. Villanueva (135 SCRA 300
[1985]) and Enojas, Jr. vs. Commission on Elections (283 SCRA 229 [1997]),
reiterating the ruling in Demetrio (supra) and Jardiel (supra).

In denying petitioner's prayer that his motion for reconsideration be certified and
elevated to the COMELEC en banc, public respondent held that the assailed October
11, 1999 order is interlocutory in character considering that respondent's protest has yet
to be resolved.

Petitioner elevated the matter to this Court via the instant petition for certiorari seeking
the nullification of public respondent's orders dated October 11, 1999 and November 29,
1999.
In an en banc resolution dated January 18, 2000, [10] this Court dismissed the petition for
having been prematurely filed. The Constitution, in its Section 7, Article IX-A in relation
to Section 3, Article IX-C, and Rule 37 of the COMELEC Rules of Procedure mandate
that only final orders, rulings and decisions of the COMELEC en banc can be
challenged before the Supreme Court on certiorari. [11]

Petitioner filed a motion for reconsideration [12] of this Court's order, contending that
public respondent's unjustified denial of his prayer to elevate to the COMELEC en
banc his motion to reconsider the October 11, 1999 order left him with no other recourse
but to come directly to us for relief. In the same motion, petitioner also prayed for the
issuance of a temporary restraining order to enjoin public respondent from further
hearing the protest case until his motion to reconsider the order of October 11, 1999 has
been passed upon by the Commission en banc.[13]

In order not to render moot the issues raised in the instant petition, this Court issued a
temporary restraining order dated February 10, 2000, [14] effective immediately, directing
the COMELEC (Second Division) to cease and desist from further proceeding with the
election protest until further orders from the Court.

On February 15, 2000, this Court, in an en banc resolution,[15] granted petitioner's

motion for reconsideration, reinstated the instant petition and required the respondents
to comment thereon.

Both private respondent and public respondent (represented by the Solicitor General)
filed their separate comments [16] on the petition, to which petitioner submitted a reply.
Thereafter, the parties filed their respective memoranda. On February 15, 2000, this
Court gave due course to the petition. [17]

In his petition, petitioner maintains:

1. That the filing of a demurrer to evidence does not carry with it an implied
waiver of private respondent's right to present evidence; and

2. That the October 11, 1999 order of public respondent denying the demurrer to
evidence is not interlocutory in character but a final order; hence, his motion to
reconsider the said order should be elevated to the COMELECen banc for resolution.
We rule against petitioner.

In support of his position that he does not lose his right to present evidence after the
denial of his demurrer to evidence by the public respondent, petitioner invokes Section
1, Rule 33 of the 1997 Rules of Civil Procedure, as amended, which reads:

"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 his right to present evidence."
(underscoring ours)

The petitioner urges us to apply the above-quoted rule to his case and to reiterate our
decision in Northwest Airlines vs. Court of Appeals [18] which sets a guideline on
demurrer to evidence in civil cases, as follows:

"We agree with the Court of Appeals in its holding that the trial court erred in deciding
the entire case on its merit. Indeed, as to the demurrer to evidence, the trial court
should have been solely guided by the procedure laid down in the above- mentioned
rule on demurrer to evidence. It had no choice other than to grant or to deny the
demurrer. It could not, without committing grave abuse of discretion amounting to
excess of jurisdiction, deny the motion and then forthwith grant TORRES' claims on a
finding that TORRES has established a preponderance of evidence in support of such
claims. In the instant case, the trial court did just that insofar as moral damages,
attorney's fees, and expenses of litigation were concerned. What it should have done
was to merely deny the demurrer and set a date for the reception of
NORTHWEST's evidence in chief."[19] (underscoring ours)

What petitioner is saying is that the rule on demurrer to evidence in civil cases is
applicable to election cases.

That is not so.

Section 4, Rule 1 of the 1997 Rules of Civil Procedure, as amended, provides

that "(t)hese Rules shall not apply to election cases, land registration, cadastral,
naturalization and insolvency proceedings, and other cases not herein provided
for, except by analogy or in a suppletory character and whenever practicable and
convenient."

In the same vein, under Section 1, Rule 41 of the COMELEC Rules of Procedure, the
Rules of Civil Procedure apply only "by analogy or in a suppletory character and effect."

The COMELEC Rules of Procedure is silent on the subject of demurrer to evidence.

This question now arises: Can we apply by analogy or in a suppletory character and
whenever practicable and convenient Section 1, Rule 33 of the 1997 Rules of Civil
Procedure, as amended, on a demurrer to evidence in an election protest?

We answer in the negative.

It should be underscored that the nature of an election protest case differs from an
ordinary civil action. Because of this difference, the Rules of Civil Procedure on
demurrer to evidence cannot apply to election cases even "by analogy or in a suppletory
character," especially because the application of said Rules would not be "practicable
and convenient."

Our decision in Estrada vs. Sto. Domingo[20] emphasizes the "special" and
"expeditious" nature of election cases,the early resolution of which should not be
hampered by any unnecessary observance of procedural rules. There we held:

"2. We face the problem ahead with an eye to the nature of election contest
proceedings.

"The statutory scheme clearly mapped out in the Revised Election Code is
that proceedings in election protests are special and expeditious. The periods for
filing pleadings are short. Trials are swift. Decisions in municipal election contests are to
be handed down in six months after the protest is presented. The time to file a notice of
appeal is cut short to five days from notice of the decision. Appeal is to be decided
within three months after the case is filed with the clerk of the court to which appeal is
taken. Preferential disposition of election contests except as to habeas corpus
proceedings is set forth in the law. Even the rules of court make it abundantly clear
that election cases enjoy preferential status. The proceedings should not be
encumbered by delays. All of these are because the term of elective office is
likewise short. There is the personal stake of the contestants which generates feuds
and discords. Above all is the public interest. Title to public elective office must
not be left long under cloud. Efficiency of public administration should not be
impaired. It is thus understandable that pitfalls which may retard the
determination of election contests should be avoided. Courts should heed the
imperative need for dispatch. Obstacles and technicalities which fetter the
people's will should not stand in the way of a prompt termination of election
contests.

"Since 1966, when this Court in Lagumbay vs. Climaco (16 SCRA 175) projected the
pressing need to strike a blow at the `pernicious grab-the-proclamation-prolong-the-
protest slogan of some candidates or parties', we observe, to our dismay, that courts
of justice still have to cope with oft-recurring cases which come about in utter
disregard of this rule.

"These are the desiderata which should be uppermost in the mind of courts of
justice, if only to give substance to the constitutional precept that "[s]overeignty
resides in the people and all government authority emanates from
them."[21] (underscoring ours)

A more detailed and emphatic ratiocination of a substantially similar issue is our

recent en banc pronouncement inEnojas, Jr. vs. Commission on Elections,[22] thus:

"The main issue in this case, therefore, involves the determination of whether the
motion to dismiss filed by respondent Rodriguez should be considered as a demurrer to
evidence by reason of which he is deemed to have waived his right to present
evidence.

"We rule in the affirmative.

"The present controversy does not involve a novel issue. As early as the case
of Demetrio vs. Lopez (50 Phil. 45 [1927]), wherein after the protestant had introduced
his evidence, the protestee, before presenting his own, filed a motion to dismiss the
protest upon the ground that the evidence presented by the protestant did not show that
he had obtained a greater number of votes than the protestee, and reserving the right to
present his evidence if his motion was decided adversely, this Court held that:
`In regard to the first assignment of error, the practice followed in the courts of these
Islands is to permit the defendant to present a motion for dismissal in ordinary
cases after the plaintiff has rested, reserving the right to present his evidence if the
ruling on his motion is adverse to him either in the first instance or on appeal. In an
election protest proceeding, however, which is a summary one, and in which the
periods are short and fatal, and trials rapid and preferential as the peremptory
nature of the litigation so requires, the motion for dismissal at that stage of the
proceeding must be considered as a demurrer to the evidence presented by the
protestant, with implied waiver by the protestee to present his evidence,
whatever may be the ruling, whether adverse or favorable, either in the first
instance or on appeal, the court of origin or appellate court having the power to
definitely decide the protest. If, in the prosecution of election protests the
ordinary practice were to be followed in regard to the presentation of motions for
dismissal or of demurrers to the evidence, in the majority of cases, if not always,
the law would be frustrated and the will of the electorate defeated, to the great
detriment of the underlying principles of representative government, because, in
case of revocation of a ruling sustaining the motion of dismissal or the demurrer on
appeal, the case would have to be remanded to the court below for the continuation of
the trial and the introduction of evidence by the protestee, thus causing the proceeding
to continue during the term of the office in question, with the possible result that the
defeated, and not the elected, candidate would be discharging the office.

`In election protests, therefore, the protestee should not be permitted to present a
motion for dismissal or a demurrer to the evidence of the protestant, unless he
waives the introduction of his own evidence in case the ruling on his motion or
demurrer is adverse to him, in which case the court that tries the case must
definitely decide it.

In the present case, the motion for dismissal filed by the protestee has the effect of
a demurrer to the evidencepresented by the protestant, he having thereby impliedly
waived the introduction of his evidence, for which reason the trial court did not
commit an error in sustaining said motion and definitely deciding the case
without requiring the protestee to present his evidence.'

"The aforequoted ruling was reiterated in the later case of Jardiel vs. Commission
on Elections, et al. (124 SCRA 650 [1983]) wherein the motion to dismiss filed by the
protestee, after the protestant had submitted a written offer of evidence, was considered
as a demurrer to the evidence presented. In the succeeding case of Calabig vs.
Villanueva, etc., et al. (135 SCRA 300 [1985], the foregoing pronouncement was
quoted with approval and applied as a doctrinal rule.

"The instant petition is substantially on all fours with the three cited cases and no
compelling reason exists to warrant an exception thereto. The fact that the motion
to dismiss filed by respondent Rodriguez was initially granted by the trial court, but
subsequently reversed on appeal by the COMELEC on the basis of the jurisdictional
grounds raised therein, does not warrant a ruling to the contrary. The reason is that
the motion to dismiss filed in this case did not only raise a couple of defective
jurisdictional issues but likewise challenged and demurred to the sufficiency of
the evidence adduced therein by petitioner Enojas, through these allegations:

`2. This protest is without any cause of action. It appears from the face of the protest
and even in the exhibits formally offered, admitting in arguendo that the same is
admitted by the Court, that the herein protest has no cause of action. The allegation in
the protest clearly shows that protestant has no cause of action against the protestee.
Again, granting in arguendo, that the herein protestant actually garnered more votes
than herein protestee, the protest should be filed against the person or persons liable
against such error or errors.'

and thereafter prayed that `the herein protest be dismissed for lack of
jurisdiction, lack of cause of action,nonpayment of correct filing fee, for being premature
as the pre-proclamation protest is not yet terminated, and the protest is ambiguous
whether it is for election contest or judicial recount.' Hence, we agree that respondent
Rodriguez had waived his right to present evidence." [23] (underscoring ours)

The doctrinal ruling in Demetrio vs. Lopez[24] has been consistently invoked by this
Court for seventy-four (74) years now. We see no reason to re-examine the venerable
doctrine because the philosophy behind it applies with even greater force today.
Candidates now use more sophisticated methods to win through irregularities and follow
them up with a pattern of procedural delays until all that is left to the winner is a
meaningless victory. In filing a demurrer to evidence after the protestant has rested his
case, the protestee wants at that point of time the proceedings terminated and all
uncertainties about his victory cleared with dispatch. Verily, he impliedly waives his right
to present his evidence.
And that exactly is what petitioner had in mind when he demurred to private
respondent's evidence in the protest proceedings below, asserting that:

"III
"Unquestionably, based on what appears in the Minutes of Voting, the protestant's
allegation of fraud is completely without basis. Hence, this Protest has no more
reason to continue, nor is there any legal justification to require the protestee to
present his evidence.

x x x x x x x x x

"C O N C L U S I O N

"Considering that the protestant's main allegations of `fraud and irregularities' in

the protested precincts are negated by the minutes of Voting from the protested
precincts which the protestant has also adopted as his evidence, his protest has
no more leg to stand on. His cause of action has been completely demolished by
his own judicial admission consisting of his submission of the minutes of Voting
as part of his evidence.

"To sustain the protestant's theory of `fraud and irregularities' in the protested precincts
in the face of insurmountable evidence to the contrary, is to allow him to smear the
electoral triumph of his own running mate (Governor Rodolfo P. Del Rosario) who won
as governor by an overwhelming majority. Such an absurd position should not be
permitted to stand especially in this case where the protestant has not presented
any credible or convincing evidence to support his theory.

"It is more in keeping with the objective of the rules of this Commission to
achieve `just, expeditious andinexpensive determination of every action and
proceeding brought before it' to dismiss this Protest outright.

"The protestee most respectfully submits that the kind of evidence submitted by the
protestant in support of his theory no longer makes it imperative for protestee to
submit additional countervailing evidence aside from those he has submitted in
support of this motion.
"P R A Y E R

"WHEREFORE in view of the foregoing premises, it is respectfully prayed that an order

issue from this Commission, Second Division, directing the protestant to show cause
why his Protest should not be dismissed, or ordering the immediate and outright
dismissal of the Protest filed by the Protestant pursuant to the Comelec Rules of
Procedure. xxx xxx xxx"[25] (underscoring ours)

To accentuate his desire not to present anymore his evidence, the petitioner asserted
once again in his rejoinder to private respondent's opposition that "there is no more
reason for him to submit his evidence because the protestant has not presented
evidence worth rebutting."[26] What could be a clearer proof of petitioner's waiver of
his right to present evidence in the election protest case than his very own categorical
and steadfast declarations in his pleadings? We, therefore, cannot permit him, after his
demurrer was denied, to make a complete turn around by now asking the public
respondent to allow him to present his evidence.

In this regard, we quote with approval public respondent's assailed ruling of November
29, 1999:

"It is not candid of the protestee to cry that he has been denied of due process and pray
in his motion for reconsideration that he be allowed to present evidence on the Election
Protest Proper after he had averred with full emphasis that `there is no more reason for
him to submit his evidence because the protestant has not presented evidence worth
rebutting,' and led the Commission to issue an Order which he now assails.

"A favorable grant on the protestee's motion for reconsideration would open the door for
continuation of the trial and introduction of evidence by the protestee, thus causing the
proceedings to continue during the term of the office in question (which is about only 18
months left) and thereby delay the final decision in the election protest to the benefit of
the occupant of the office, as pointed out in Demetrio and reiterated in subsequent
cases above cited.

"Furthermore, if the Commission succumbs to the protestee's theory that it is premature

for the Commission to resolve this case on the main issue of who won during the
subject election and that the proceedings in this case should continue for the
presentation of his evidence after waiving his right to present the same through a
demurrer, the Commission would cause undue delay in the resolution of the two other
cases pending before the Senate Electoral Tribunal (SET), which had communicated to
the Commission in its Order of April 23, 1999 as follows:

`The Commission on Elections (Second Division) is requested to conduct the revision

and appreciation proceedings in EPC No. 98-58 (Suaybaguio, Jr., vs. Gementiza) in the
most expeditious manner possible in order that the subject ballot boxes and other
election documents can be turned over to the Tribunal in due time. No revision of ballots
shall be conducted without prior notice being given directly to all parties in SET Case
No. 001- 98 (Pagdanganan vs. Aquino) and SET Case No. 002-98 (Lagman vs.
Guingona, Jr., et al.)'

"The fear of the protestee that `there is no evidence at all on the part of the protestee
which the Comelec' will consider is misplaced. In the determination of who between the
parties herein won, the Commission is bound by law to examine the claimed and
contested ballots of both the protestant and the protestee which have been marked as
exhibits during the revision proceedings.

"Finally, the ruling of this Commission as contained in its Order dated October 11, 1999
is a matter of procedure and does not finally dispose of the case on the merits. The
Commission is yet to resolve the case on the issue of who between the parties won in
the contested office of Vice-Governor of Davao del Norte during the May 11, 1998
elections. The Order dated October 11, 1999 being interlocutory in character
(Nepomoceno vs. Salazar, 173 SCRA 366), the same cannot be elevated to the
Commission En Banc but should be acted upon by the Division where the same was
filed (`It is not mandatory on the part of a division of the COMELEC to refer all pending
motions for reconsideration to the COMELEC en banc.' (Bulaong vs. COMELEC, First
Division, 220 SCRA 745, 749 [1993])."[27]

This brings us to the second issue raised by petitioner, i.e., that the challenged October
11, 1999 order denying his demurrer to evidence is not interlocutory but a final one, and
hence his motion to reconsider the said order should be elevated to the COMELEC en
banc for resolution.

We do not agree. Section 5, Rule 19 of the COMELEC Rules of Procedure, provides:

"SEC. 5. How Motion for Reconsideration Disposed of.- Upon the filing of a motion to
reconsider a decision, resolution, order or ruling of a Division, the Clerk of Court
concerned shall, within twenty-four (24) hours from the fling thereof, notify the presiding
Commissioner. The latter shall within two (2) days thereafter certify the case to the
Commission en banc."

Under the above-quoted rule, the acts of a Division that are subject of a motion for
reconsideration must have a character of finality before the same can be elevated to
the COMELEC en banc. The elementary rule is that an order is final in nature if it
completely disposes of the entire case. But if there is something more to be done in the
case after its issuance, that order is interlocutory.

As correctly pointed out by public respondent in its assailed order of November 29,
1999, the October 11, 1999 order did not dispose of the case completely as there is
something more to be done which is to decide the election protest. As such, it is the
herein public respondent (Second Division of the COMELEC) which issued the
interlocutory order of October 11, 1999 that should resolve petitioner's motion for
reconsideration, not the COMELEC en banc.[28] Accordingly, the applicable rule on the
subject is Section 5(c), Rule 3 of the COMELEC Rules of Procedure, which states:

"Rule 3, Section 5(c). Any motion to reconsider a decision, resolution, order or ruling of
a Division shall be resolved by the Commission en banc except motions on
interlocutory orders of the division, which shall be resolved by the divisions
which issued the order." (underscoring ours)

That only final orders of a Division may be raised before the COMELEC en banc is in
accordance with Article IX-C, Section 3 of the Constitution which mandates that only
motions for reconsideration of final decisions shall be decided by the Commission on
Elections en banc, thus:

"Sec. 3. The Commission on Elections may sit en banc or in two divisions, and shall
promulgate its rules of procedure in order to expedite disposition of election cases,
including pre-proclamation controversies. All such election cases shall be heard and
decided in Division, provided that motions for reconsideration of decisionsshall
be decided by the Commission en banc." (underscoring ours)

It bears stressing that under this constitutional provision, the COMELEC en banc shall
decide motions for reconsideration only of "decisions" of a Division, meaning those
acts of final character. Clearly, the assailed order denying petitioner's demurrer to
evidence, being interlocutory, may not be resolved by the COMELEC en banc.[29]

Even granting that petitioner's motion to reconsider the October 11, 1999 order may be
elevated to the COMELECen banc, still his plea that he be allowed to present evidence
after his demurrer was denied must certainly be rejected since, as already discussed
earlier, such prayer is legally impermissible.

In fine, we find that public respondent did not commit any grave abuse of discretion in
issuing the assailed orders.

WHEREFORE, the instant petition for certiorari is DISMISSED. The temporary

restraining order issued by this Court on February 10, 2000 is LIFTED effective
immediately. Public respondent Commission on Elections (Second Division) is
DIRECTED to resolve the instant election protest on the merits with deliberate dispatch.

SO ORDERED.
 THIRD DIVISION

[ G.R. No. 138739, July 06, 2000 ]

RADIOWEALTH FINANCE COMPANY, PETITIONER, VS . SPOUSES VICENTE AND

MA. SUMILANG DEL ROSARIO, RESPONDENTS.

DECISION

PANGANIBAN, J.:

When a demurrer to evidence granted by a trial court is reversed on appeal, the

reviewing court cannot remand the case for further proceedings. Rather, it should
render judgment on the basis of the evidence proffered by the plaintiff. Inasmuch as
defendants in the present case admitted the due execution of the Promissory Note both
in their Answer and during the pretrial, the appellate court should have rendered
judgment on the bases of that Note and on the other pieces of evidence adduced during
the trial.

The Case

Before us is a Petition for Review on Certiorari of the December 9, 1997 Decision [1] and
the May 3, 1999 Resolution [2] of the Court of Appeals in CA-GR CV No. 47737. The
assailed Decision disposed as follows:

"WHEREFORE, premises considered, the appealed order (dated November 4, 1994) of

the Regional Trial Court (Branch XIV) in the City of Manila in Civil Case No. 93-66507 is
hereby REVERSED and SET ASIDE. Let the records of this case be remanded to the
court a quo for further proceedings. No pronouncement as to costs."[3]

The assailed Resolution denied the petitioner's Partial Motion for Reconsideration. [4]

The Facts

The facts of this case are undisputed. On March 2, 1991, Spouses Vicente and Maria
Sumilang del Rosario (herein respondents), jointly and severally executed, signed and
delivered in favor of Radiowealth Finance Company (herein petitioner), a Promissory
Note[5] for P138,948. Pertinent provisions of the Promissory Note read:

"FOR VALUE RECEIVED, on or before the date listed below, I/We promise to pay jointly
and severally Radiowealth Finance Co. or order the sum of ONE HUNDRED THIRTY
EIGHT THOUSAND NINE HUNDRED FORTY EIGHT Pesos (P138,948.00) without
need of notice or demand, in installments as follows:

P11,579.00 payable for 12 consecutive months starting on ________ 19__ until the
amount of P11,579.00 is fully paid. Each installment shall be due every ____ day of
each month. A late payment penalty charge of two and a half (2.5%) percent per month
shall be added to each unpaid installment from due date thereof until fully paid.

xxx xxx xxx

It is hereby agreed that if default be made in the payment of any of the installments or
late payment charges thereon as and when the same becomes due and payable as
specified above, the total principal sum then remaining unpaid, together with the agreed
late payment charges thereon, shall at once become due and payable without need of
notice or demand.

xxx xxx xxx

If any amount due on this Note is not paid at its maturity and this Note is placed in the
hands of an attorney or collection agency for collection, I/We jointly and severally agree
to pay, in addition to the aggregate of the principal amount and interest due, a sum
equivalent to ten (10%) per cent thereof as attorney's and/or collection fees, in case no
legal action is filed, otherwise, the sum will be equivalent to twenty-five (25%) percent of
the amount due which shall not in any case be less than FIVE HUNDRED PESOS
(P500.00) plus the cost of suit and other litigation expenses and, in addition, a further
sum of ten per cent (10%) of said amount which in no case shall be less than FIVE
HUNDRED PESOS (P500.00), as and for liquidated damages." [6]

Thereafter, respondents defaulted on the monthly installments. Despite repeated

demands, they failed to pay their obligations under their Promissory Note.

On June 7, 1993, petitioner filed a Complaint [7] for the collection of a sum of money
before the Regional Trial Court of Manila, Branch 14. [8] During the trial, Jasmer
Famatico, the credit and collection officer of petitioner, presented in evidence the
respondents' check payments, the demand letter dated July 12, 1991, the customer's
ledger card for the respondents, another demand letter and Metropolitan Bank dishonor
slips. Famatico admitted that he did not have personal knowledge of the transaction or
the execution of any of these pieces of documentary evidence, which had merely been
endorsed to him.

On July 4, 1994, the trial court issued an Order terminating the presentation of evidence
for the petitioner.[9] Thus, the latter formally offered its evidence and exhibits and rested
its case on July 5, 1994.

Respondents filed on July 29, 1994 a Demurrer to Evidence [10] for alleged lack of cause
of action. On November 4, 1994, the trial court dismissed [11] the complaint for failure of
petitioner to substantiate its claims, the evidence it had presented being merely
hearsay.

On appeal, the Court of Appeals (CA) reversed the trial court and remanded the case
for further proceedings.

Hence, this recourse.[12]

Ruling of the Court of Appeals

According to the appellate court, the judicial admissions of respondents established

their indebtedness to the petitioner, on the grounds that they admitted the due execution
of the Promissory Note, and that their only defense was the absence of an agreement
on when the installment payments were to begin. Indeed, during the pretrial, they
admitted the genuineness not only of the Promissory Note, but also of the demand letter
dated July 12, 1991. Even if the petitioner's witness had no personal knowledge of
these documents, they would still be admissible "if the purpose for which [they are]
produced is merely to establish the fact that the statement or document was in fact
made or to show its tenor[,] and such fact or tenor is of independent relevance."

Besides, Articles 19 and 22 of the Civil Code require that every person must -- in the
exercise of rights and in the performance of duties -- act with justice, give all else their
due, and observe honesty and good faith. Further, the rules on evidence are to be
liberally construed in order to promote their objective and to assist the parties in
obtaining just, speedy and inexpensive determination of an action.

Issue

The petitioner raises this lone issue:

"The Honorable Court of Appeals patently erred in ordering the remand of this case to
the trial court instead of rendering judgment on the basis of petitioner's evidence." [13]

For an orderly discussion, we shall divide the issue into two parts: (a) legal effect of the
Demurrer to Evidence, and (b) the date when the obligation became due and
demandable.

The Court's Ruling

The Petition has merit. While the CA correctly reversed the trial court, it erred in
remanding the case "for further proceedings."

Consequences of a Reversal, on
Appeal, of a Demurrer to Evidence

Petitioner contends that if a demurrer to evidence is reversed on appeal, the defendant

should be deemed to have waived the right to present evidence, and the appellate court
should render judgment on the basis of the evidence submitted by the plaintiff. A
remand to the trial court "for further proceedings" would be an outright defiance of Rule
33, Section 1 of the 1997 Rules of Court.

On the other hand, respondents argue that the petitioner was not necessarily entitled to
its claim, simply on the ground that they lost their right to present evidence in support of
their defense when the Demurrer to Evidence was reversed on appeal. They stress that
the CA merely found them indebted to petitioner, but was silent on when their obligation
became due and demandable.

The old Rule 35 of the Rules of Court was reworded under Rule 33 of the 1997 Rules,
but the consequence on appeal of a demurrer to evidence was not changed. As
amended, the pertinent provision of Rule 33 reads as follows:

"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."[14]

Explaining the consequence of a demurrer to evidence, the Court in Villanueva Transit

v. Javellana[15]pronounced:

"The rationale behind the rule and doctrine is simple and logical. The defendant is
permitted, without waiving his right to offer evidence in the event that his motion is not
granted, to move for a dismissal (i.e., demur to the plaintiff's evidence) on the ground
that upon the facts as thus established and the applicable law, the plaintiff has shown
no right to relief. If the trial court denies the dismissal motion, i.e., finds that plaintiff's
evidence is sufficient for an award of judgment in the absence of contrary evidence, the
case still remains before the trial court which should then proceed to hear and receive
the defendant's evidence so that all the facts and evidence of the contending parties
may be properly placed before it for adjudication as well as before the appellate courts,
in case of appeal. Nothing is lost. The doctrine is but in line with the established
procedural precepts in the conduct of trials that the trial court liberally receive all
proffered evidence at the trial to enable it to render its decision with all possibly relevant
proofs in the record, thus assuring that the appellate courts upon appeal have all the
material before them necessary to make a correct judgment, and avoiding the need of
remanding the case for retrial or reception of improperly excluded evidence, with the
possibility thereafter of still another appeal, with all the concomitant delays.The rule,
however, imposes the condition by the same token that if his demurrer is granted by the
trial court, and the order of dismissal is reversed on appeal, the movant losses his right
to present evidence in his behalf and he shall have been deemed to have elected to
stand on the insufficiency of plaintiff's case and evidence. In such event, the appellate
court which reverses the order of dismissal shall proceed to render judgment on the
merits on the basis of plaintiff's evidence." (Underscoring supplied)
In other words, defendants who present a demurrer to the plaintiff's evidence retain the
right to present their own evidence, if the trial court disagrees with them; if the trial court
agrees with them, but on appeal, the appellate court disagrees with both of them and
reverses the dismissal order, the defendants lose the right to present their own
evidence.[16] The appellate court shall, in addition, resolve the case and render judgment
on the merits, inasmuch as a demurrer aims to discourage prolonged litigations. [17]

In the case at bar, the trial court, acting on respondents' demurrer to evidence,
dismissed the Complaint on the ground that the plaintiff had adduced mere hearsay
evidence. However, on appeal, the appellate court reversed the trial court because the
genuineness and the due execution of the disputed pieces of evidence had in fact been
admitted by defendants.

Applying Rule 33, Section 1 of the 1997 Rules of Court, the CA should have rendered
judgment on the basis of the evidence submitted by the petitioner. While the appellate
court correctly ruled that "the documentary evidence submitted by the [petitioner] should
have been allowed and appreciated xxx," and that "the petitioner presented quite a
number of documentary exhibits xxx enumerated in the appealed order," [18] we agree
with petitioner that the CA had sufficient evidence on record to decide the collection
suit. A remand is not only frowned upon by the Rules, it is also logically unnecessary on
the basis of the facts on record.

Due and Demandable Obligation

Petitioner claims that respondents are liable for the whole amount of their debt and the
interest thereon, after they defaulted on the monthly installments.

Respondents, on the other hand, counter that the installments were not yet due and
demandable. Petitioner had allegedly allowed them to apply their promotion services
for its financing business as payment of the Promissory Note. This was supposedly
evidenced by the blank space left for the date on which the installments should have
commenced.[19] In other words, respondents theorize that the action for immediate
enforcement of their obligation is premature because its fulfillment is dependent on the
sole will of the debtor. Hence, they consider that the proper court should first fix a
period for payment, pursuant to Articles 1180 and 1197 of the Civil Code.
This contention is untenable. The act of leaving blank the due date of the first
installment did not necessarily mean that the debtors were allowed to pay as and when
they could. If this was the intention of the parties, they should have so indicated in the
Promissory Note. However, it did not reflect any such intention.

On the contrary, the Note expressly stipulated that the debt should be amortized
monthly in installments of P11,579 for twelve consecutive months. While the specific
date on which each installment would be due was left blank, the Note clearly provided
that each installment should be payable each month.

Furthermore, it also provided for an acceleration clause and a late payment penalty,
both of which showed the intention of the parties that the installments should be paid at
a definite date. Had they intended that the debtors could pay as and when they could,
there would have been no need for these two clauses.

Verily, the contemporaneous and subsequent acts of the parties manifest their intention
and knowledge that the monthly installments would be due and demandable each
month.[20] In this case, the conclusion that the installments had already became due and
demandable is bolstered by the fact that respondents started paying installments on the
Promissory Note, even if the checks were dishonored by their drawee bank. We are
convinced neither by their avowals that the obligation had not yet matured nor by their
claim that a period for payment should be fixed by a court.

Convincingly, petitioner has established not only a cause of action against the
respondents, but also a due and demandable obligation. The obligation of the
respondents had matured and they clearly defaulted when their checks bounced. Per
the acceleration clause, the whole debt became due one month (April 2, 1991) after the
date of the Note because the check representing their first installment bounced.

As for the disputed documents submitted by the petitioner, the CA ruling in favor of their
admissibility, which was not challenged by the respondents, stands. A party who did not
appeal cannot obtain affirmative relief other than that granted in the appealed decision.
[21]

It should be stressed that respondents do not contest the amount of the principal
obligation. Their liability as expressly stated in the Promissory Note and found by the
CA is "P13[8],948.00[22] which is payable in twelve (12) installments at P11,579.00 a
month for twelve (12) consecutive months." As correctly found by the CA, the
"ambiguity" in the Promissory Note is clearly attributable to human error. [23]

Petitioner, in its Complaint, prayed for "14% interest per annum from May 6, 1993 until
fully paid." We disagree. The Note already stipulated a late payment penalty of 2.5
percent monthly to be added to each unpaid installment until fully paid. Payment of
interest was not expressly stipulated in the Note. Thus, it should be deemed included in
such penalty.

In addition, the Note also provided that the debtors would be liable for attorney's fees
equivalent to 25 percent of the amount due in case a legal action was instituted and 10
percent of the same amount as liquidated damages. Liquidated damages, however,
should no longer be imposed for being unconscionable. [24] Such damages should also
be deemed included in the 2.5 percent monthly penalty. Furthermore, we hold that
petitioner is entitled to attorney's fees, but only in a sum equal to 10 percent of the
amount due which we deem reasonable under the proven facts. [25]

The Court deems it improper to discuss respondents' claim for moral and other
damages. Not having appealed the CA Decision, they are not entitled to affirmative
relief, as already explained earlier.[26]

WHEREFORE, the Petition is GRANTED. The appealed Decision is MODIFIED in that

the remand is SET ASIDE and respondents are ordered TO PAY P138,948, plus 2.5
percent penalty charge per month beginning April 2, 1991 until fully paid, and 10 percent
of the amount due as attorney's fees. No costs.

SO ORDERED.
[14]
In the old Rules, the same provision is worded in Section 1 of Rule 35 as follows:

"SECTION 1. Effect of judgment on demurrer to evidence.--After the plaintiff has

completed the presentation of his evidence, the defendant without waiving his right to
offer evidence in the event the motion is not granted, may move for a dismissal on the
ground that upon the facts and the law the plaintiff has shown no right to relief.
However, if the motion is granted and the order of dismissal is reversed on appeal, the
movant loses his right to present evidence in his behalf."

[20]
Article 1371 of the Civil Code provides that "[i]n order to judge the intention of the
contracting parties, their contemporaneous and subsequent acts shall be principally
considered."
[24]
Article 2226 of the Civil Code provides that "[l]iquidated damages, whether intended
as an indemnity or a penalty, shall be equitably reduced if they are iniquitous or
unconscionable."
 SECOND DIVISION

[ G.R. No. 177960, January 29, 2009 ]

JEFFREY RESO DAYAP, PETITIONER, VS. PRETZY-LOU SENDIONG, GENESA

SENDIONG, ELVIE SY AND DEXIE DURAN, RESPONDENTS.

DECISION

TINGA, J.:

Before us is a petition for review [1] on certiorari of the Decision [2] dated 17 August 2006
and Resolution[3] dated 25 April 2007 by the Court of Appeals in CA-G.R. SP No. 01179
entitled, Pretzy-Lou P. Sendiong, Genesa R. Sendiong, Elvie H. Sy and Dexie Duran v.
Hon. Judge Cresencio Tan and Jeffrey Reso Dayap.

The case had its origins in the filing of an Information [4] on 29 December 2004 by the
Provincial Prosecutor's Office, Sibulan, Negros Oriental, charging herein petitioner
Jeffrey Reso Dayap with the crime of Reckless Imprudence resulting to Homicide, Less
Serious Physical Injuries, and Damage to Property. The pertinent portion of the
information reads:

That at about 11:55 o'clock in the evening of 28 December 2004 at Brgy. Maslog,
Sibulan, Negros Oriental, Philippines, and within the jurisdiction of this Honorable Court,
the above-named accused, did then and there, willfully, unlawfully and feloniously drive
in a reckless and imprudent manner a 10-wheeler cargo truck with plate number ULP-
955, color blue, fully loaded with sacks of coconut shell, registered in the name of
Ruben Villabeto of Sta. Agueda Pamplona, Negros Oriental, thereby hitting an
automobile, a Colt Galant with plate number NLD-379 driven by Lou Gene R. Sendiong
who was with two female passengers, namely: Dexie Duran and Elvie Sy, thus causing
the instantaneous death of said Lou Gene R. Sendiong, less serious physical injuries on
the bodies of Dexie Duran and Elvie Sy and extensive damage to the above-mentioned
Colt Galant which is registered in the name of Cristina P. Weyer of 115 Dr. V. Locsin St.,
Dumaguete City, to the damage of the heirs of the same Lou Gene R. Sendiong and the
other two offended parties above-mentioned.

An act defined and penalized by Article 365 of the Revised Penal Code.

On 10 January 2005, before the Municipal Trial Court (MTC) of Sibulan, Negros
Oriental, petitioner was arraigned and he pleaded not guilty to the charge. [5]

On 17 January 2005, respondents Pretzy-Lou P. Sendiong, Genesa Sendiong and

Dexie Duran filed a motion for leave of court to file an amended information. [6] They
sought to add the allegation of abandonment of the victims by petitioner, thus: "The
driver of the 10-wheeler cargo truck abandoned the victims, at a time when said [Lou-
Gene] R. Sendiong was still alive inside the car; he was only extracted from the car by
the by-standers."[7]

On 21 January 2005, however, the Provincial Prosecutor filed an Omnibus Motion

praying that the motion to amend the information be considered withdrawn. [8] On 21
January 2003, the MTC granted the withdrawal and the motion to amend was
considered withdrawn.[9]

Pre-trial and trial of the case proceeded. Respondents testified for the prosecution.
After the prosecution had rested its case, petitioner sought leave to file a demurrer to
evidence which was granted. Petitioner filed his Demurrer to Evidence [10] dated 15 April
2005 grounded on the prosecution's failure to prove beyond reasonable doubt that he is
criminally liable for reckless imprudence, to which respondents filed a Comment [11] dated
25 April 2005.

In the Order[12] dated 16 May 2005, the MTC granted the demurrer and acquitted
petitioner of the crime of reckless imprudence. The MTC found that the evidence
presented by respondents failed to establish the allegations in the Information.
Pertinent portions of the order state:
An examination of the allegations in the information and comparing the same with the
evidence presented by the prosecution would reveal that the evidence presented has
not established said allegations. The facts and circumstances constituting the
allegations charged have not been proven. It is elementary in the rules of evidence that
a party must prove his own affirmative allegations.

x x x x

Nowhere in the evidence of the prosecution can this Court find that it was the accused
who committed the crime as charged. Its witnesses have never identified the accused
as the one who has committed the crime. The prosecution never bothered to establish
if indeed it was the accused who committed the crime or asked questions which would
have proved the elements of the crime. The prosecution did not even establish if
indeed it was the accused who was driving the truck at the time of the incident. The
Court simply cannot find any evidence which would prove that a crime has been
committed and that the accused is the person responsible for it. There was no evidence
on the allegation of the death of Lou Gene R. Sendiong as there was no death
certificate that was offered in evidence. The alleged less serious physical injuries on the
bodies of Dexie Duran and Elvie Sy were not also proven as no medical certificate was
presented to state the same nor was a doctor presented to establish such injuries. The
alleged damage to the [C]olt [G]alant was also not established in any manner as no
witness ever testified on this aspect and no documentary evidence was also presented
to state the damage. The prosecution therefore failed to establish if indeed it was the
accused who was responsible for the death of Lou Gene R. Sendiong and the injuries to
Dexie Duran and Elvie Sy, including the damage to the Colt Galant. The mother of the
victim testified only on the expenses she incurred and the shock she and her family
have suffered as a result of the incident. But sad to say, she could not also pinpoint if it
was the accused who committed the crime and be held responsible for it. This Court
could only say that the prosecution has practically bungled this case from its inception.

x x x x

The defense furthermore argued that on the contrary, the prosecution's [evidence]
conclusively show that the swerving of vehicle 1 [the Colt Galant] to the lane of vehicle 2
[the cargo truck] is the proximate cause of the accident. The court again is inclined to
agree with this argument of the defense. It has looked carefully into the sketch of the
accident as indicated in the police blotter and can only conclude that the logical
explanation of the accident is that vehicle 1 swerved into the lane of vehicle 2, thus
hitting the latter's inner fender and tires. Exhibit "7" which is a picture of vehicle 2
shows the extent of its damage which was the effect of vehicle 1's ramming into the rear
left portion of vehicle 2 causing the differential guide of vehicle 2 to be cut, its tires
busted and pulled out together with their axle. The cutting of the differential guide
cause[d] the entire housing connecting the tires to the truck body to collapse, thus
causing vehicle 2 to tilt to its left side and swerve towards the lane of vehicle 1. It was
this accident that caused the swerving, not of [sic] any negligent act of the accused.

x x x x

Every criminal conviction requires of the prosecution to prove two thingsthe fact of the
crime, i.e., the presence of all the elements of the crime for which the accused stands
charged, and the fact that the accused is the perpetrator of the crime. Sad to say, the
prosecution has miserably failed to prove these two things. When the prosecution fails
to discharge its burden of establishing the guilt of the accused, an accused need not
even offer evidence in his behalf.

x x x x

WHEREFORE, premises considered, the demurrer is granted and the accused

JEFFREY RESO DAYAP is hereby acquitted for insufficiency of evidence. The bail
bond posted for his temporary liberty is also hereby cancelled and ordered released to
the accused or his duly authorized representative.

SO ORDERED.[13]

Respondents thereafter filed a petition for certiorari under Rule 65, [14] alleging that the
MTC's dismissal of the case was done without considering the evidence adduced by the
prosecution. Respondents added that the MTC failed to observe the manner the trial of
the case should proceed as provided in Sec. 11, Rule 119 of the Rules of Court as well
as failed to rule on the civil liability of the accused in spite of the evidence presented.
The case was raffled to the Regional Trial Court (RTC) of Negros Oriental, Br. 32.

In the order[15] dated 23 August 2005, the RTC affirmed the acquittal of petitioner but
ordered the remand of the case to the MTC for further proceedings on the civil aspect of
the case. The RTC ruled that the MTC's recital of every fact in arriving at its
conclusions disproved the allegation that it failed to consider the evidence presented by
the prosecution. The records also demonstrated that the MTC conducted the trial of the
case in the manner dictated by Sec. 11, Rule 119 of the Rules of Court, except that the
defense no longer presented its evidence after the MTC gave due course to the
accused's demurrer to evidence, the filing of which is allowed under Sec. 23, Rule 119.
The RTC however agreed that the MTC failed to rule on the accused's civil liability,
especially since the judgment of acquittal did not include a declaration that the facts
from which the civil liability might arise did not exist. Thus, the RTC declared that the
aspect of civil liability was not passed upon and resolved to remand the issue to the
MTC. The dispositive portion of the decision states:

WHEREFORE, the questioned order of the Municipal Trial Court of Sibulan on

accused's acquittal is AFFIRMED. The case is REMANDED to the court of origin or its
successor for further proceedings on the civil aspect of the case. No costs.

SO ORDERED.[16]

Both parties filed their motions for reconsideration of the RTC order, but these were
denied for lack of merit in the order [17] dated 12 September 2005.

Respondents then filed a petition for review with the Court of Appeals under Rule 42,
docketed as CA-G.R. SP. No. 01179. The appellate court subsequently rendered the
assailed decision and resolution. The Court of Appeals ruled that there being no proof
of the total value of the properties damaged, the criminal case falls under the
jurisdiction of the RTC and the proceedings before the MTC are null and void. In so
ruling, the appellate court cited Tulor v. Garcia (correct title of the case is Cuyos v.
Garcia)[18] which ruled that in complex crimes involving reckless imprudence resulting in
homicide or physical injuries and damage to property, the jurisdiction of the court to take
cognizance of the case is determined by the fine imposable for the damage to property
resulting from the reckless imprudence, not by the corresponding penalty for the
physical injuries charged. It also found support in Sec. 36 of the Judiciary
Reorganization Act of 1980 and the 1991 Rule 8 on Summary Procedure, which govern
the summary procedure in first-level courts in offenses involving damage to property
through criminal negligence where the imposable fine does not exceed P10,000.00. As
there was no proof of the total value of the property damaged and respondents were
claiming the amount of P1,500,000.00 as civil damages, the case falls within the RTC's
jurisdiction. The dispositive portion of the Decision dated 17 August 2006 reads:

WHEREFORE, premises considered, judgment is hereby rendered by Us REMANDING

the case to the Regional Trial Court (RTC), Judicial Region, Branch 32, Negros Oriental
for proper disposition of the merits of the case.

SO ORDERED.[19]

Petitioner moved for reconsideration of the Court of Appeals decision, [20] arguing that
jurisdiction over the case is determined by the allegations in the information, and that
neither the 1991 Rule on Summary Procedure nor Sec. 36 of the Judiciary
Reorganization Act of 1980 can be the basis of the RTC's jurisdiction over the case.
However, the Court of Appeals denied the motion for reconsideration for lack of merit in
the Resolution dated 25 April 2007. [21] It reiterated that it is the RTC that has proper
jurisdiction considering that the information alleged a willful, unlawful, felonious killing as
well as abandonment of the victims.

In the present petition for review, petitioner argues that the MTC had jurisdiction to hear
the criminal case for reckless imprudence, owing to the enactment of Republic Act
(R.A.) No. 7691,[22] which confers jurisdiction to first-level courts on offenses involving
damage to property through criminal negligence. He asserts that the RTC could not
have acquired jurisdiction on the basis of a legally unfiled and officially withdrawn
amended information alleging abandonment. Respondents are also faulted for
challenging the MTC's order acquitting petitioner through a special civil action for
certiorari under Rule 65 in lieu of an ordinary appeal under Rule 42.

The petition has merit. It should be granted.

The first issue is whether the Court of Appeals erred in ruling that jurisdiction over the
offense charged pertained to the RTC.

Both the MTC and the RTC proceeded with the case on the basis of the Information
dated 29 December 2004 charging petitioner only with the complex crime of reckless
imprudence resulting to homicide, less serious physical injuries and damage to property.
The Court of Appeals however declared in its decision that petitioner should have been
charged with the same offense but aggravated by the circumstance of abandonment of
the victims. It appears from the records however that respondents' attempt to amend the
information by charging the aggravated offense was unsuccessful as the MTC had
approved the Provincial Prosecutor's motion to withdraw their motion to amend the
information. The information filed before the trial court had remained unamended. [23]
Thus, petitioner is deemed to have been charged only with the offense alleged in the
original Information without any aggravating circumstance.

Article 365 of the Revised Penal Code punishes any person who, by reckless
imprudence, commits any act which, had it been intentional, would constitute a grave
felony, with the penalty of arresto mayor in its maximum period toprision correccional in
its medium period. When such reckless imprudence the use of a motor vehicle, resulting
in the death of a person attended the same article imposes upon the defendant the
penalty of prision correccional in its medium and maximum periods.

The offense with which petitioner was charged is reckless imprudence resulting in
homicide, less serious physical injuries and damage to property, a complex crime.
Where a reckless, imprudent, or negligent act results in two or more grave or less grave
felonies, a complex crime is committed. [24] Article 48 of the Revised Penal Code
provides that when the single act constitutes two or more grave or less grave felonies,
or when an offense is a necessary means for committing the other, the penalty for the
most serious crime shall be imposed, the same to be applied in its maximum period.
Since Article 48 speaks of felonies, it is applicable to crimes through negligence in view
of the definition of felonies in Article 3 as "acts or omissions punishable by law"
committed either by means of deceit (dolo) or fault (culpa).[25] Thus, the penalty
imposable upon petitioner, were he to be found guilty, is prision correccional in its
medium period (2 years, 4 months and 1 day to 4 years) and maximum period (4 years,
2 months and 1 day to 6 years).

Applicable as well is the familiar rule that the jurisdiction of the court to hear and decide
a case is conferred by the law in force at the time of the institution of the action, unless
such statute provides for a retroactive application thereof. [26] When this case was filed
on 29 December 2004, Section 32(2) of Batas Pambansa Bilang 129 had already been
amended by R.A. No. 7691. R.A. No. 7691 extended the jurisdiction of the first-level
courts over criminal cases to include all offenses punishable with imprisonment not
exceeding six (6) years irrespective of the amount of fine, and regardless of other
imposable accessory or other penalties including those for civil liability. It explicitly
states "that in offenses involving damage to property through criminal negligence, they
shall have exclusive original jurisdiction thereof." It follows that criminal cases for
reckless imprudence punishable withprision correccional in its medium and maximum
periods should fall within the jurisdiction of the MTC and not the RTC. Clearly, therefore,
jurisdiction to hear and try the same pertained to the MTC and the RTC did not have
original jurisdiction over the criminal case. [27] Consequently, the MTC of Sibulan, Negros
Oriental had properly taken cognizance of the case and the proceedings before it were
valid and legal.

As the records show, the MTC granted petitioner's demurrer to evidence and acquitted
him of the offense on the ground of insufficiency of evidence. The demurrer to evidence
in criminal cases, such as the one at bar, is "filed after the prosecution had rested its
case," and when the same is granted, it calls "for an appreciation of the evidence
adduced by the prosecution and its sufficiency to warrant conviction beyond reasonable
doubt, resulting in a dismissal of the case on the merits, tantamount to an acquittal of
the accused."[28] Such dismissal of a criminal case by the grant of demurrer to evidence
may not be appealed, for to do so would be to place the accused in double jeopardy. [29]
But while the dismissal order consequent to a demurrer to evidence is not subject to
appeal, the same is still reviewable but only by certiorari under Rule 65 of the Rules of
Court. Thus, in such case, the factual findings of the trial court are conclusive upon the
reviewing court, and the only legal basis to reverse and set aside the order of dismissal
upon demurrer to evidence is by a clear showing that the trial court, in acquitting the
accused, committed grave abuse of discretion amounting to lack or excess of
jurisdiction or a denial of due process, thus rendering the assailed judgment void. [30]

Accordingly, respondents filed before the RTC the petition for certiorari alleging that the
MTC gravely abused its discretion in dismissing the case and failing to consider the
evidence of the prosecution in resolving the same, and in allegedly failing to follow the
proper procedure as mandated by the Rules of Court. The RTC correctly ruled that the
MTC did not abuse its discretion in dismissing the criminal complaint. The MTC's
conclusions were based on facts diligently recited in the order thereby disproving that
the MTC failed to consider the evidence presented by the prosecution. The records
also show that the MTC correctly followed the procedure set forth in the Rules of Court.
The second issue is whether the Court of Appeals erred in ordering the remand of the
case of the matter of civil liability for the reception of evidence.

We disagree with the Court of Appeals on directing the remand of the case to the RTC
for further proceedings on the civil aspect, as well as with the RTC in directing a similar
remand to the MTC.

The acquittal of the accused does not automatically preclude a judgment against him on
the civil aspect of the case. The extinction of the penal action does not carry with it the
extinction of the civil liability where: (a) the acquittal is based on reasonable doubt as
only preponderance of evidence is required; (b) the court declares that the liability of the
accused is only civil; and (c) the civil liability of the accused does not arise from or is not
based upon the crime of which the accused is acquitted. [31] However, the civil action
based on delict may be deemed extinguished if there is a finding on the final judgment
in the criminal action that the act or omission from which the civil liability may arise did
not exist[32] or where the accused did not commit the acts or omission imputed to him. [33]

Thus, if demurrer is granted and the accused is acquitted by the court, the accused has
the right to adduce evidence on the civil aspect of the case unless the court also
declares that the act or omission from which the civil liability may arise did not exist. [34]
This is because when the accused files a demurrer to evidence, he has not yet adduced
evidence both on the criminal and civil aspects of the case. The only evidence on
record is the evidence for the prosecution. What the trial court should do is issue an
order or partial judgment granting the demurrer to evidence and acquitting the accused,
and set the case for continuation of trial for the accused to adduce evidence on the civil
aspect of the case and for the private complainant to adduce evidence by way of
rebuttal. Thereafter, the court shall render judgment on the civil aspect of the case. [35]

A scrutiny of the MTC's decision supports the conclusion that the acquittal was based
on the findings that the act or omission from which the civil liability may arise did not
exist and that petitioner did not commit the acts or omission imputed to him; hence,
petitioner's civil liability has been extinguished by his acquittal. It should be noted that
the MTC categorically stated that it cannot find any evidence which would prove that a
crime had been committed and that accused was the person responsible for it. It added
that the prosecution failed to establish that it was petitioner who committed the crime as
charged since its witnesses never identified petitioner as the one who was driving the
cargo truck at the time of the incident. Furthermore, the MTC found that the proximate
cause of the accident is the damage to the rear portion of the truck caused by the
swerving of the Colt Galant into the rear left portion of the cargo truck and not the
reckless driving of the truck by petitioner, clearly establishing that petitioner is not guilty
of reckless imprudence. Consequently, there is no more need to remand the case to
the trial court for proceedings on the civil aspect of the case, since petitioner's acquittal
has extinguished his civil liability.

WHEREFORE, the petition is GRANTED. The Court of Appeals' Decision dated 17

August 2006 and Resolution dated 25 April 2007 in CA-G.R. SP. No. 01179 are
REVERSED and SET ASIDE. The Order dated 16 May 2005 of the Municipal Trial
Court of Sibulan, Negros Oriental in Criminal Case No. 3016-04 granting the Demurrer
to Evidence and acquitting petitioner Jeffrey Reso Dayap of the offense charged therein
is REINSTATED and AFFIRMED.

SO ORDERED.
JUDGEMENT ON
THE PLEADINGS
 SECOND DIVISION
[ G.R. No. 163280, February 02, 2010 ]
DORIS U. SUNBANUN, PETITIONER, VS. AURORA B. GO, RESPONDENT.

DECISION
CARPIO, J.:
The Case

This petition for review on certiorari [1] assails the 30 September 2003 Decision [2] and the
18 March 2004 Resolution[3] of the Court of Appeals in CA-G.R. CV No. 67836.

The Facts

Petitioner Doris U. Sunbanun is the owner of a residential house located at No. 68-F
Junquera Street, Cebu City. On 7 July 1995, respondent Aurora B. Go leased the entire
ground floor of petitioner's residential house for one year which was to expire on 7 July
1996. As required under the lease contract, respondent paid a deposit of P16,000 to
answer for damages and unpaid rent. To earn extra income, respondent accepted
lodgers, mostly her relatives, from whom she received a monthly income of P15,000.
Respondent paid the monthly rental until March 1996 when petitioner drove away
respondent's lodgers by telling them that they could stay on the rented premises only
until 15 April 1996 since she was terminating the lease. The lodgers left the rented
premises by 15 April 1996, and petitioner then padlocked the rooms vacated by
respondent's lodgers.
On 10 May 1996, respondent filed an action for damages against petitioner.
Respondent alleged that she lost her income from her lodgers for the months of April,
May, and June 1996 totaling P45,000. Respondent, who worked in Hongkong, also
incurred expenses for plane fares and other travel expenses in coming to the
Philippines and returning to Hongkong.

On the other hand, petitioner argued that respondent violated the lease contract when
she subleased the rented premises. Besides, the lease contract was not renewed after
its expiration on 7 July 1996; thus, respondent had no more right to stay in the rented
premises. Petitioner also moved to dismiss the complaint in the trial court for failure to
comply with prior barangay conciliation.

During the pre-trial, petitioner moved for the case to be submitted for judgment on the
pleadings considering that the only disagreement between the parties was the correct
interpretation of the lease contract. Respondent did not object to petitioner's motion.
The trial court then directed the parties to submit their respective memoranda, after
which the case would be considered submitted for decision. [4]

In its decision dated 28 March 2000, the trial court held that the case is not covered by
the barangay conciliation process since respondent is a resident of Hongkong. The trial
court noted that petitioner did not controvert respondent's allegation that petitioner
ejected respondent's lodgers sometime in March 1996 even if the contract of lease
would expire only on 7 July 1996. The trial court found untenable petitioner's contention
that subleasing the rented premises violated the lease contract. The trial court held that
respondent's act of accepting lodgers was in accordance with the lease contract which
allows the lessee "to use the premises as a dwelling or as lodging house." Thus, the trial
court ordered petitioner to pay respondent actual damages of P45,000 for respondent's
lost income from her lodgers for the months of April, May, and June 1996, and attorney's
fees of P8,000.

Both parties appealed before the Court of Appeals. On 30 September 2003, the Court of
Appeals rendered its decision in favor of respondent and modified the trial court's
decision. Aside from actual damages and attorney's fees, the Court of Appeals also
ordered petitioner to pay moral and exemplary damages and the cost of the suit. The
dispositive portion of the Court of Appeals' decision reads:
 WHEREFORE, premises considered, the assailed Decision of the trial court is hereby
MODIFIED by ordering defendant-appellant [Doris U. Sunbanun] to pay plaintiff-
appellant [Aurora B. Go] the following amounts:

1. P45,000.00 as compensation for actual damages;

2. P50,000.00 as moral damages;
3. P50,000.00 as exemplary damages;
4. P8,000.00 as Attorney's Fees;
5. Cost of the suit.

SO ORDERED.[5]

The Court of Appeals' Ruling

The Court of Appeals held that petitioner's act of forcibly ejecting respondent's lodgers
three months prior to the termination of the lease contract without valid reason
constitutes breach of contract. Petitioner also violated Article 1654 of the Civil Code
which states that "the lessor is obliged to maintain the lessee in the peaceful and
adequate enjoyment of the lease for the duration of the contract." The Court of Appeals
awarded P50,000 as moral damages to respondent for breach of contract and for
petitioner's act of pre-terminating the lease contract without valid reason, which shows
bad faith on the part of petitioner. The Court of Appeals also awarded respondent
P50,000 as exemplary damages for petitioner's oppressive act.

The Issues

Petitioner raises the following issues:

I. THE COURT OF APPEALS ERRED IN AFFIRMING THE AWARD OF ACTUAL

DAMAGES BY THE TRIAL COURT.

II. THE COURT OF APPEALS ERRED IN MODIFYING THE JUDGMENT OF THE

TRIAL COURT AND AWARDING MORAL AND EXEMPLARY DAMAGES AND
COSTS OF SUIT IN FAVOR OF RESPONDENT.
III. THE COURT OF APPEALS ERRED IN AFFIRMING THE AWARD OF
ATTORNEY'S FEES IN FAVOR OF RESPONDENT.[6]

The Ruling of the Court

We find the petition without merit.

In this case, the trial court rendered a judgment on the pleadings. Section 1, Rule 34 of
the Rules of Court reads:

SECTION 1. Judgment on the pleadings. - Where an answer fails to tender an issue, or

otherwise admits the material allegations of the adverse party's pleading, the court may,
on motion of that party, direct judgment on such pleading. However, in actions for
declaration of nullity or annulment of marriage or for legal separation, the material facts
alleged in the complaint shall always be proved.

The trial court has the discretion to grant a motion for judgment on the pleadings filed by
a party if there is no controverted matter in the case after the answer is filed. [7] A
judgment on the pleadings is a judgment on the facts as pleaded, [8] and is based
exclusively upon the allegations appearing in the pleadings of the parties and the
accompanying annexes.

This case is unusual because it was petitioner, and not the claimant respondent, who
moved for a judgment on the pleadings during the pre-trial. This is clear from the trial
court's Order[9] dated 7 October 1997 which reads:

ORDER

When this case was called for pre-trial, parties appeared together with
counsel. Defendant [Doris U. Sunbanun] moved that considering that there is no
dispute as far as the contract is concerned and the only disagreement between
the parties is on the interpretation of the contract so that the issue boils down on
to which of the parties are correct on their interpretation. With the conformity of the
plaintiff [Aurora B. Go], this case is therefore considered closed and submitted for
judgment on the pleadings. x x x (Emphasis supplied)
Petitioner, in moving for a judgment on the pleadings without offering proof as to the
truth of her own allegations and without giving respondent the opportunity to introduce
evidence, is deemed to have admitted the material and relevant averments of the
complaint, and to rest her motion for judgment based on the pleadings of the parties.
[10]
As held in Tropical Homes, Inc. v. CA:[11]

As to the amount of damages awarded as a consequence of this violation of plaintiff's

rights, the lower court based its award from the allegations and prayer contained in the
complaint. The defendant, however, questions this award for the reason that, according
to the defendant, the plaintiff, in moving for judgment on the pleadings, did not offer
proof as to the truth of his own allegations with respect to the damages claimed by him,
and gave no opportunity for the appellant to introduce evidence to refute his claims. We
find this objection without merit. It appears that when the plaintiff moved to have the
case decided on the pleadings, the defendant interposed no objection and has
practically assented thereto. The defendant, therefore, is deemed to have admitted the
allegations of fact of the complaint, so that there was no necessity for plaintiff to submit
evidence of his claim.

In this case, it is undisputed that petitioner ejected respondent's lodgers three months
before the expiration of the lease contract on 7 July 1996. Petitioner maintains that she
had the right to terminate the contract prior to its expiration because respondent
allegedly violated the terms of the lease contract by subleasing the rented premises.
Petitioner's assertion is belied by the provision in the lease contract [12] which states that
the lessee can "use the premises as a dwelling or as lodging house." Furthermore the
lease contract clearly provides that petitioner leased to respondent the ground floor of
her residential house for a term of one year commencing from 7 July 1995. Thus, the
lease contract would expire only on 7 July 1996. However, petitioner started ejecting
respondent's lodgers in March 1996 by informing them that the lease contract was only
until 15 April 1996. Clearly, petitioner's act of ejecting respondent's lodgers resulted in
respondent losing income from her lodgers. Hence, it was proper for the trial court and
the appellate court to order petitioner to pay respondent actual damages in the amount
of P45,000.

We likewise sustain the award of moral damages in favor of respondent. In this case,
moral damages may be recovered under Article 2219 and Article 2220 of the Civil Code
in relation to Article 21. The pertinent provisions read:

Art. 2219. Moral damages may be recovered in the following and analogous cases:

x x x

(10) Acts and actions referred to in articles 21, 26, 27, 28, 29, 30, 32, 34, and 35.

Art. 2220. Wilfull injury to property may be a legal ground for awarding moral damages if
the court should find that, under the circumstances, such damages are justly due. The
same rule applies to breaches of contract where the defendant acted fraudulently
or in bad faith. (Emphasis supplied)

Art. 21. Any person who wilfully causes loss or injury to another in a manner that is
contrary to morals, good customs or public policy shall compensate the latter for the
damage.

We agree with the appellate court that petitioner's act of ejecting respondent's lodgers
three months before the lease contract expired without valid reason constitutes bad
faith. What aggravates the situation was that petitioner did not inform respondent, who
was then working in Hongkong, about petitioner's plan to pre-terminate the lease
contract and evict respondent's lodgers. Moral damages may be awarded when the
breach of contract was attended with bad faith. [13]

Furthermore, we affirm the award of exemplary damages and attorney's fees.

Exemplary damages may be awarded when a wrongful act is accompanied by bad faith
or when the defendant acted in a wanton, fraudulent, reckless, oppressive, or
malevolent manner which would justify an award of exemplary damages under Article
2232[14] of the Civil Code. [15] Since the award of exemplary damages is proper in this
case, attorney's fees and cost of the suit may also be recovered as provided under
Article 2208[16] of the Civil Code.[17]

WHEREFORE, the Court DENIES the petition. The Court AFFIRMS the 30
September 2003 Decision and the 18 March 2004 Resolution of the Court of
Appeals in CA-G.R. CV No. 67836.
SO ORDERED.

[14]
Article 2232 of the Civil Code provides that "in contracts and quasi-contracts, the
court may award exemplary damages if the defendant acted in a wanton, fraudulent,
reckless, oppressive, or malevolent manner."
[16]
Article 2208 of the Civil Code reads:

Art. 2208. In the absence of stipulation, attorney's fees and expenses of litigation, other
than judicial costs, cannot be recovered, except:

(1) When exemplary damages are awarded;

(2) When the defendant's act or omission has compelled the plaintiff to litigate with third
persons or to incur expenses to protect his interest;
(3) In criminal cases of malicious prosecution against the plaintiff;
(4) In case of a clearly unfounded civil action or proceeding against the plaintiff;
(5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the
plaintiff's plainly valid, just and demandable claim;
(6) In action for legal support;
(7) In actions for the recovery of wages of household helpers, laborers and skilled
workers;
(8) In actions for indemnity under workmen's compensation and employer's liability
laws;
(9) In a separate civil action to recover civil liability arising from a crime;
(10) When at least double judicial costs are awarded;
(11) In any other case where the court deems it just and equitable that attorney's fees
and expenses of litigation should be recovered.

In all cases, the attorney's fees and expenses of litigation must be reasonable.
(Emphasis supplied)
 SUMMARY
JUDGMENTS
- SUMMARY
JUDGEMENT
FOR CLAIMANT
 - SUMMARY
JUDGMENT FOR
DEFENDANT
FIRST DIVISION

[ G.R. No. 152092, August 04, 2010 ]

PILIPINO TELEPHONE CORPORATION, PETITIONER, VS. RADIOMARINE

NETWORK, INC., RESPONDENT.

DECISION

LEONARDO-DE CASTRO, J.:

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court seeking to
annul, reverse and set aside the Resolution [1] issued on May 2, 2001 by the former Sixth
Division of the Court of Appeals in CA-G.R. SP No. 64155, entitled "PILIPINO
TELEPHONE CORPORATION v. HON. JUDGE REINATO G. QUILALA, in his capacity
as Presiding Judge of the Regional Trial Court of Makati, Branch 57, and
RADIOMARINE NETWORK (SMARTNET), Inc." The assailed Court of Appeals
Resolution dismissed Pilipino Telephone Corporation's (PILTEL) petition
for certiorari under Rule 65 with application for temporary restraining order (TRO) and/or
writ of preliminary injunction which sought to set aside the Resolution [2] made by the
Regional Trial Court (RTC) of Makati City, Branch 57, dated November 13, 2000,
rendering partial summary judgment in Civil Case No. 99-2041, as well as the Order [3] of
the same trial court dated January 30, 2001 denying the motion for reconsideration
thereof. The instant petition also seeks to annul, reverse and set aside the Court of
Appeals Resolution[4] issued on February 7, 2002 denying petitioner's motion for
reconsideration of the May 2, 2001 Court of Appeals Resolution.

The genesis of this prolonged controversy can be traced back to the execution of a
Contract to Sell[5] on December 12, 1996 between petitioner PILTEL and respondent
Radiomarine Network, Inc. (RADIOMARINE), wherein the latter agreed to purchase a
3,500-square meter lot located in Makati City covered by Transfer Certificate of Title
(TCT) No. T-195516 issued by the Registry of Deeds for Makati City. The terms of
payment that were agreed upon by the parties were embodied in Article II of the said
contract, to wit:

The total consideration of FIVE HUNDRED SIXTY MILLION PESOS [P560,000,000.00]

shall be paid by the VENDEE, without the need of any demand, to the VENDOR in the
following manner:

[a] a downpayment in the amount of ONE HUNDRED EIGHTY MILLION

[P180,000,000.00] PESOS, to be paid on or before December 28, 1996;

[b] Any and all outstanding payables which the VENDOR owes to the VENDEE in
consideration of the cellular phone units and accessories ordered by the VENDOR and
delivered by the VENDEE between the initial downpayment date i.e. December 28,
1996 and April 30, 1997, shall be credited to the VENDEE as additional payment of the
purchase price.

[c] The remaining balance, after deducting [a] and [b] above, shall be paid on or about
April 30, 1997. It is expressly understood however, that the VENDOR shall submit to the
VENDEE, on or about April 20, 1997, a Statement of Account updating the deliveries of
cellular phones and its outstanding amount in order that the VENDEE can prepare the
final payment. In this way, the amount of final payment shall be made to the VENDOR
on or before April 30, 1997. Should the VENDOR be delayed in the submission of the
said Statement on the stipulated date, the date of payment of the remaining balance
shall be automatically adjusted for a period equivalent to the number of days by which
the VENDOR is delayed in the submission thereof. [6]

Thus, under the terms agreed upon, respondent was to give the amount of
P180,000,000.00 as down payment. Any outstanding unpaid obligation, which
petitioner owed respondent, would be deducted from the obligations of the latter. The
balance, if any, should be paid on or before April 30, 1997.

Contemporaneous with the execution of the Contract to Sell, petitioner wrote a

Letter[7] to respondent dated December 11, 1996 in which it expressed its willingness, on
a purely best effort basis, to purchase from respondent 300,000 units of various models
of Motorola, Mitsubishi and Ericsson brand cellular phones and accessories for the
entire year of 1997.

Respondent failed to pay the balance of P380,000,000.00 on the stipulated period of

April 30, 1997 alleging, among other things, that petitioner reneged on its commitment
to purchase 300,000 units of cellular phones and accessories from respondent and
instead purchased the units from other persons/entities.

On December 19, 1997, petitioner returned to respondent the amount of

P50,000,000.00, which is part of the P180,000,000.00 down payment made by the latter
pursuant to the Contract to Sell as evidenced by a Statement of Account [8] issued by the
former.

Respondent then filed a Complaint [9] on December 1, 1999 against petitioner PILTEL
seeking either the rescission of the Contract to Sell or the partial specific performance of
the same with the RTC of Makati City. It prayed that judgment be rendered (a) ordering
PILTEL to convey to it at least thirty-two percent (32%) interest in the Valgoson property,
representing the value of its down payment of P180,000,000.00, or in the alternative,
ordering PILTEL to return to it the down payment plus interest; (b) ordering PILTEL to
pay to it the amount of P81,800,764.96 representing the value of the 300,000 units of
various cellular phones which it bought pursuant to the commitment of PILTEL to
purchase but which commitment PILTEL disregarded, plus interest, as actual and
compensatory damages; and (c) ordering PILTEL to pay to it the attorney's fees in the
amount of P500,000.00.

Respondent then filed a Motion for Partial Summary Judgment [10] on October 6, 2000
which was opposed by petitioner in its Comment/Opposition [11] filed on October 26,
2000. The motion was eventually granted by the trial court in its assailed Resolution
dated November 13, 2000, the dispositive portion of which reads:
WHEREFORE, the motion for summary judgment is granted and defendant Piltel is
hereby ordered to return or to pay to plaintiff Smartnet the down payment of P180
Million less the forfeited amount of P18 Million and the cash advance of P50 Million, or a
net of P112 Million with interest at 6% per annum from the extrajudicial demand of
October 20, 1998 until finality of the judgment and after this judgment becomes final and
executory, additional legal interest at 12% per annum on the total obligation until the
judgment is satisfied.[12]

On December 5, 2000, petitioner filed a Motion for Reconsideration [13] which was denied
for lack of merit by the RTC in the assailed Order dated January 30, 2001. Prior to the
issuance of the said Order, respondent filed its Opposition [14] on December 14, 2000 to
which petitioner countered with a Reply[15] filed on January 10, 2001.

Respondent then filed a Manifestation and Motion for Execution [16] on March 15, 2001
manifesting its withdrawal of the two remaining causes of action and moving for the
issuance of a Writ of Execution. This was followed by an Alternative Motion for
Execution Pending Appeal [17] that was filed by respondent on March 20, 2001, praying
for execution pending appeal in the event that then defendant PILTEL would be held to
have the right to appeal.

On April 4, 2001, petitioner filed a Petition for Certiorari under Rule 65[18] of the Rules of
Court before the Court of Appeals, with an application for a temporary restraining order
and a writ of preliminary injunction, alleging grave abuse of discretion on the part of
Judge Reinato Quilala in issuing the November 13, 2000 Resolution and the January
30, 2001 Order. This petition was docketed as CA-G.R. SP No. 64155. A week later,
respondent filed before the Court of Appeals its Opposition to the Application for the
Issuance of a Temporary Restraining Order and/or Writ of Preliminary Injunction [19] on
April 11, 2001 wherein it called the appellate court's attention to what it perceived as
then defendant PILTEL's pursuance of simultaneous reliefs before the trial court and the
Court of Appeals that all seek to nullify the November 13, 2000 Resolution of the trial
court granting the summary judgment.

Meanwhile, in compliance with the trial court's Order [20] dated April 6, 2001, petitioner
filed before it on April 16, 2001, by registered mail, a Consolidated Opposition [21] against
respondent's Manifestation and Motion for Execution dated March 15, 2001 and the
Alternative Motion for Execution Pending Appeal dated March 20, 2001. On April 17,
2001, respondent filed with the trial court its Ex Parte Manifestation and
Motion[22] stating therein that, upon verification with the records of the court that day,
then defendant PILTEL had failed to file its Comment/Opposition to respondent's
aforementioned pending motions and, thus, respondent moved to submit both motions
for the resolution of the trial court without opposition from then defendant PILTEL.
Hence, the trial court issued an Order[23] on April 23, 2001 granting the withdrawal of
respondent's remaining causes of action and the execution pending appeal, the
dispositive portion of which reads:

WHEREFORE, the motion for execution pending appeal of the Partial Summary
Judgment rendered on November 13, 2000 is GRANTED.

Let the corresponding Writ of Execution be issued and implemented accordingly.

As a result, the corresponding Writ of Execution Pending Appeal [24] was issued on April
24, 2001.

Back at the Court of Appeals, petitioner filed an Urgent Manifestation and Urgent
Reiteratory Motion for the Issuance of a Temporary Restraining Order and/or Writ of
Preliminary Injunction[25] on April 25, 2001.

On that same date and while its Petition for Certiorari under Rule 65 was still pending
before the Court of Appeals, petitioner filed with the trial court its Notice of
Appeal[26] informing the said court that it will raise before the Court of Appeals the trial
court's November 13, 2000 Resolution and April 23, 2001 Order. This appeal was
subsequently docketed as CA-G.R. CV No. 71805.

The following day, on April 26, 2001, petitioner filed with the trial court an Urgent
Manifestation to Post Supersedeas Bond and Urgent Motion to Defer Execution
Pending Appeal.[27]

On April 30, 2001, respondent filed with the Court of Appeals its Supplement (To:
Opposition to the Application for the Issuance of a Temporary Restraining Order and/or
Writ of Preliminary Injunction) [28] while, on the other hand, petitioner filed with the trial
court another Urgent Motion to Admit Supersedeas Bond [29] on May 2, 2001. On the
same day, by virtue of the Writ of Execution Pending Appeal issued by the trial court and
there being no TRO issued against it by the Court of Appeals in CA-G.R. SP No. 64155,
Sheriff George C. Ragutana issued a Notice of Sale on Execution Pending Appeal of
Real Property[30] giving notice to the public that the sale by public auction of the real
property described in TCT No. 195516 or the Valgoson property shall be on May 31,
2001. Likewise on the same date, the Court of Appeals denied petitioner's petition
for certiorari along with the request for the issuance of a TRO in CA-G.R. SP No. 64155,
stating:

We resolve to dismiss the petition.

As pointed out by private respondent, an appeal from a partial summary judgment may
be allowed by the trial court under Section 1(g), Rule 41 of the 1997 Rules of Civil
Procedure, which reads:

"SECTION 1. Subject of appeal. x x x

No appeal may be taken from:

x x x x

(g) A judgment or final order for or against one or more of several parties or in separate
claims, counterclaims, cross-claims and third-party complaints, while the main case is
pending, unless the court allows an appeal therefrom;

x x x x"

Thus, petitioner should have filed, with leave of court, a notice of appeal from the partial
summary judgment dated November 13, 2000 before resorting to this special civil action
of certiorari. Moreover with the withdrawal and dismissal of private respondent's
remaining two causes of action, the summary judgment dated November 13, 2000
ceased to be partial as it may be considered to have completely disposed of the entire
case and, therefore, appealable.

Anent the alleged impropriety of a summary judgment, suffice it to say that certiorari will
not be issued to cure errors in proceedings or correct erroneous conclusions of law or
fact. As long as a court acts within its jurisdiction, any alleged errors committed in the
exercise of its jurisdiction will amount to nothing more than errors of judgment which are
reviewable by timely appeal and not by certiorari.

Petitioner likewise assails the Order of execution dated April 23, 2001. However, the
copy of said Order attached to the urgent manifestation and urgent reiteratory motion for
the issuance of a temporary restraining order and/or writ of preliminary injunction is a
mere unsigned xerox copy thereof, contrary to the requirement in Section 1, Rule 65 of
the 1997 Rules of Civil Procedure that the petition be accompanied by a clearly legible
duplicate original or certified true copy of the order subject thereof. Thus, Section 3,
Rule 46 of the 1997 Rules of Civil Procedure provides that the failure of the petitioner to
comply with the requirement, inter alia, that the petition be accompanied by a clearly
legible duplicate original or certified true copy of the order subject thereof, shall be
sufficient ground for the dismissal thereof. As held in Manila Midtown Hotels and Land
Corporation vs. NLRC, certiorari, being an extraordinary remedy, the party who seeks to
avail of the same must observe the rules laid down by law.[31]

Thus, the dispositive portion of which reads as follows:

WHEREFORE, the instant petition is DISMISSED for insufficiency in form and

substance.[32]

In response to petitioner's May 2, 2001 motion filed in the trial court, respondent filed an
Opposition to the Urgent Motion to Admit Supersedeas Bond [33] on May 4, 2001 alleging
that the offer to post supersedeas bond does not entitle then defendant PILTEL to a
deferment of execution pending appeal since at that time, compelling reasons warrant
immediate execution and that PILTEL has resorted to forum shopping in order to have
the execution postponed. On May 8, 2001, petitioner filed its Reply (to the Opposition
to Motion to Admit Supersedeas Bond) [34]to which respondent filed its Rejoinder [35] on
May 9, 2001.

Notwithstanding the dismissal of petitioner's Petition for Certiorari (CA-G.R. SP No.

64155), petitioner still filed on May 9, 2001 a Supplemental Petition
for Certiorari[36] challenging the April 23, 2001 Order of the trial court as having been
issued with grave abuse of discretion. Petitioner likewise filed a (Second) Urgent
Manifestation and Reiteratory Motion for a Temporary Restraining Order and/or Writ of
Preliminary Injunction[37] on May 17, 2001. Both pleadings were merely noted without
action by the Court of Appeals in a Resolution [38] dated May 18, 2001, to wit:

In view of the resolution of this Court dated May 2, 2001 which dismissed the petition,
the Supplemental Petition dated May 9, 2001 and (Second) Urgent Manifestation and
Reiteratory Motion for a Temporary Restraining Order and/or Writ of Preliminary
Injunction dated May 15, 2001 filed by petitioner are hereby NOTED without action.

On May 22, 2001, petitioner filed its Motion for Reconsideration [39] to the May 2, 2001
Court of Appeals Resolution. It followed this up with the filing of a pleading entitled "(A)
Third Urgent Manifestation and Reiteratory Motion for a Temporary Restraining Order
and/or Writ of Preliminary Injunction; and (B) Motion to Set Case for Oral
Arguments"[40] on June 1, 2001.

Respondent filed its Comment[41] and Supplemental Comment[42] on June 15, 2001 and
June 25, 2001, respectively, to petitioner's May 22, 2001 Motion for Reconsideration. In
return, petitioner filed by registered mail its Consolidated Reply (to
Smartnet's [1] Comment and [2] Supplemental Comment) on August 23, 2001.
Subsequently, respondent filed its Rejoinder [43] on September 17, 2001.

Back at the trial court, it issued an Order [44] on May 11, 2001 denying petitioner's Urgent
Manifestation to Post Supersedeas Bond and Urgent Motion to Defer Execution
Pending Appeal on the ground that the reasons for the allowance of execution pending
appeal still prevail and the posting of a supersedeas bond does not entitle the judgment
debtor to a suspension of execution as a matter of right. The dispositive portion of which
states:

WHEREFORE, defendant's Urgent Manifestation to Post Supersedeas Bond, Urgent

Motion to Defer Execution Pending Appeal and the Urgent Motion to Admit
Supersedeas Bond are hereby denied for lack of merit. [45]

Petitioner then filed on May 30, 2001 a Motion for Reconsideration [46] of the said Order
of the trial court. This was subsequently denied by the trial court in an Order [47] issued
on August 14, 2001, which likewise granted the withdrawal of all the remaining incidents
of the case. This Order later became the subject of petitioner's Supplemental Notice of
Appeal[48] which it filed on September 4, 2001.
On January 4, 2002, respondent filed a Manifestation [49] in CA-G.R. SP No. 64155
informing the Court of Appeals of the status of the appeal taken by petitioner in CA-G.R.
CV No. 71805 and reiterating the gross violations of the rule against forum shopping
allegedly committed by the same. A month later, or on February 7, 2002, the Court of
Appeals denied petitioner's May 22, 2001 Motion for Reconsideration in CA-G.R. SP
No. 64155. In denying petitioner's motion, the appellate court declared that "even
assuming that the Petition for Certiorari has a practical legal effect because it would
lead to the reversal of the Resolution dismissing the Complaint, it would still be denied
on the ground of forum shopping." The Court of Appeals concluded that petitioner
committed forum shopping because the subject matter of its petition for certiorari and
the notice of appeal that it subsequently filed are one and the same, to wit:

It should be noted that after the filing of the instant petition, petitioner appealed to this
Court the partial summary judgment dated November 13, 2000 and the Order dated
April 23, 2001, declaring the partial summary judgment to have finally disposed of the
entire case and granting the motion for execution pending appeal, docketed as CA-G.R.
CV No. 71805, which are the same subject matter of the instant petition. [50]

Hence, this petition where petitioner raises the following grounds:

I.

A SPECIAL CIVIL ACTION FOR CERTIORARI UNDER RULE 65 OF THE RULES OF

COURT IS THE PROPER REMEDY FROM A PARTIAL SUMMARY JUDGMENT.

A. SECTION 1(G), RULE 41 OF THE RULES OF COURT DOES NOT APPLY TO

PARTIAL SUMMARY JUDGMENTS.

B. A PARTIAL SUMMARY JUDGMENT IS AN INTERLOCUTORY ORDER THAT

CANNOT BE THE SUBJECT OF AN APPEAL.

C. THE RULES AND EXISTING JURISPRUDENCE DICTATE THAT APPEAL FROM A

PARTIAL SUMMARY JUDGMENT MUST BE TAKEN TOGETHER WITH THE
JUDGMENT THAT MAY BE RENDERED IN THE ENTIRE CASE AFTER TRIAL.
D. THE REMEDY OF AN AGGRIEVED PARTY FROM A PARTIAL SUMMARY
JUDGMENT IS A SPECIAL CIVIL ACTION FOR CERTIORARI UNDER RULE 65 OF
THE RULES OF COURT.

E. EVEN ASSUMING, ONLY FOR THE SAKE OF ARGUMENT, THAT SECTION 1,

RULE 41 IS APPLICABLE, THE GENERAL RULE EVEN AS STATED IN THE SAME
SECTION ITSELF, IS THAT "NO APPEAL MAY BE TAKEN FROM A JUDGMENT OR
FINAL ORDER FOR OR AGAINST ONE OR MORE OF SEVERAL PARTIES OR IN
SEPARATE CLAIMS, COUNTERCLAIMS, CROSS-CLAIMS AND THIRD-PARTY
COMPLAINTS, WHILE THE MAIN CASE IS PENDING." MOREOVER, THE
EXCEPTION PROVIDED THEREIN IS NOT EVEN MANDATORY.

F. AT THE TIME OF THE FILING OF THE PETITION IN THIS CASE, THE PARTIAL
SUMMARY JUDGMENT WAS TRULY "PARTIAL", AND NOT FINAL IN THE SENSE
THAT IT DISPOSES OF THE ENTIRE CASE.

II.

EVEN ASSUMING, ONLY FOR THE SAKE OF ARGUMENT, THAT APPEAL IS THE
PROPER REMEDY FROM A PARTIAL SUMMARY JUDGMENT, A SPECIAL CIVIL
ACTION FOR CERTIORARI UNDER RULE 65 OF THE RULES OF COURT IS NOT
BARRED.

III.

JUDGE QUILALA COMMITTED PATENT AND GRAVE ABUSE OF DISCRETION,

AMOUNTING TO LACK OR EXCESS OF JURISDICTION, IN RENDERING THE
ASSAILED PARTIAL SUMMARY JUDGMENT.

IV.

THE ISSUES RAISED IN PILTEL'S PETITION FOR CERTIORARI WITH THE COURT
OF APPEALS ARE DIFFERENT FROM THE ISSUES RAISED IN PILTEL'S APPEAL.

V.
PILTEL DID NOT COMMIT FORUM SHOPPING.

VI.

THE COURT OF APPEALS FAILED TO APPRECIATE THAT THE URGENT

MANIFESTATION AND URGENT REITERATORY MOTION FOR THE ISSUANCE OF A
TEMPORARY RESTRAINING ORDER DID NOT ASSAIL THE 23 APRIL 2001
[ORDER]; THE SAID ORDER WAS ASSAILED IN THE ORIGINAL SUPPLEMENTAL
PETITION."[51]

A careful perusal of the voluminous pleadings filed by the parties leads us to conclude
that this case revolves around the following core issues:

I.

WHETHER OR NOT PETITIONER IS GUILTY OF FORUM SHOPPING

II.

WHETHER OR NOT GRAVE ABUSE OF DISCRETION ATTENDED THE TRIAL

COURT'S ISSUANCE OF A SUMMARY JUDGMENT

III.

WHETHER OR NOT THE PETITION FOR CERTIORARI WAS PROPERLY

DISMISSED

We find the instant petition to be without merit.

Anent the first issue, petitioner asserts that the filing of its Notice of Appeal in CA-G.R.
CV No. 71805 subsequent to the filing of its Petition for Certiorari before the Court of
Appeals in CA-G.R. SP No. 64155 does not amount to forum shopping because the
issues raised in the petition for certiorari are different from the issues raised in the
appeal since the former seeks to have an order declared null and void for having been
rendered with grave abuse of discretion amounting to lack or excess of jurisdiction while
the latter deals with the correctness and legal soundness of the questioned decision.
Furthermore, petitioner argues that a subsequent appeal was not adequate to address
the grave abuse of discretion committed by the trial court judge and could not have
provided adequate relief. Lastly, petitioner maintains that the element of res judicata is
not present in this case so as to amount to forum shopping on the part of petitioner. [52]

We cannot countenance petitioner's nuanced position on this issue. The

captions/subheadings of the petitioner's petition for certiorari and the argument
captions/subheadings of petitioner's appellant's brief may, at first blush, appear to be
dissimilar. However, the discussion that expounded on each of them plainly betray a
similarity of issues presented, grounds argued, and reliefs sought.

An example is petitioner's first argument in its Petition for Certiorari before the Court of
Appeals in CA-G.R. SP No. 64155 where it alleged grave abuse of discretion on the
part of Judge Quilala in granting summary judgment despite the existence of materially
disputed facts and the absence of supporting affidavits, to wit:

RESPONDENT JUDGE COMMITTED PATENT AND GRAVE ABUSE OF

DISCRETION, AMOUNTING TO LACK OR EXCESS OF JURISDICTION, IN
RENDERING SUMMARY JUDGMENT NOTWITHSTANDING THE FACT THAT:

A. THE PLEADINGS READILY AND IMMEDIATELY SHOW THAT THERE ARE

MATERIAL DISPUTED FACTS DETERMINATIVE OF THE PARTIES' CLAIMS AND
DEFENSES WHICH CANNOT BE SETTLED WITHOUT PRESENTATION OF
EVIDENCE."[53]

In support of this allegation, petitioner states the following:

51. From the foregoing statement of the positions of the parties, the following questions
of material fact determinative of the parties claim and defenses are glaring:

51.1 Does the Letter constitute a valid, binding, and enforceable agreement between
the parties?
51.2 Did the parties intend the Letter to form an integral part of the Contract?

51.3 Was the Letter a material consideration for SMARTNET's entering into the
Contract?

51.4 Did PILTEL violate or fail to comply with any of its obligations under the Contract?

51.5 Assuming, arguendo, that the Letter constitutes a valid binding, and enforceable
agreement, did PILTEL violate any of its provisions?

51.6 Is PILTEL guilty of fraud or bad faith in the negotiation, performance or execution of
the Contract and/or the Letter?

52. BECAUSE OF THE INDISPUTABLE EXISTENCE OF THE FOREGOING

MATERIAL QUESTIONS OF FACT WHICH GO INTO THE HEART OF THE PARTIES'
RESPECTIVE CLAIMS AND DEFENSES, ESPECIALLY SMARTNET'S CLAIM FOR
PARTIAL SPECIFIC PERFORMANCE OR (IN THE ALTERNATIVE) FOR
RESCISSION,SUMMARY JUDGMENT IS EVIDENTLY NOT PROPER."[54]

On the other hand, petitioner assigned as its first error in its Appellant's Brief in CA-G.R.
No. 71805 the following contention:

I.

JUDGE QUILALA GRIEVOUSLY ERRED IN HOLDING THAT THE CONTRACT HAD

BEEN "RENDERED VOID AND INEFFECTIVE AND WITHOUT FORCE AND
EFFECT."[55]

In discussing this point, petitioner argued that the trial court was required to consider the
materially disputed facts before it can properly grant summary judgment instead of
directly disputing the finding that the contract had been rendered void, to wit:

Clearly, then, in order for Judge Quilala to determine whether or not SMARTNET is
entitled to any of the relief it prayed for, it had to resolve, among others, the following
issues of fact: Does the Letter constitute a valid, binding, and enforceable
agreement between the parties? Did the parties intend the Letter to form an
integral part of the Contract? Did PILTEL violate or fail to comply with any of its
obligations under the Contract to Sell? Is PILTEL guilty of fraud or bad faith in
the negotiation, performance or execution of the Contract to Sell?"[56]

In the present Petition for Review, we likewise find the same arguments, to wit:

6.31. In this case, Judge Quilala rendered partial summary judgment notwithstanding
the fact that THE PLEADINGS READILY AND IMMEDIATELY SHOW THAT THERE
ARE MATERIAL DISPUTED FACTS DETERMINATIVE OF THE PARTIES' CLAIMS
AND DEFENSES WHICH CANNOT BE SETTLED WITHOUT PRESENTATION OF
EVIDENCE.

x x x x

The rendition of the foregoing summary judgment is improper because, from the
pleadings of the parties and the issues presented at the pre-trial conference, including
the issues presented by PILTEL in its pre-trial brief, the following questions of material
fact determinative of the parties claim and defenses are glaring:

1. Does the Letter constitute a valid, binding, and enforceable agreement between the
parties?

2. Did the parties intend the Letter to form an integral part of the Contract?

3. Was the Letter a material consideration for SMARTNET's entering into the Contract?

4. Did PILTEL violate or fail to comply with any of its obligations under the Contract?

5. Assuming, arguendo, that the Letter constitutes a valid, binding, and enforceable
agreement, did PILTEL violate any of its provisions?

6. Is PILTEL guilty of fraud or bad faith in the negotiation, performance or execution of

the Contract and/or the Letter?"[57]

From the foregoing, it can be clearly deduced that petitioner repeated the same
argument in its appeal and its petition for certiorari filed in the Court of Appeals as well
as in the instant petition that the trial court's resolution of the case by summary
judgment was invalid allegedly because of materially disputed facts which would render
the whole proceeding beyond the purview of the established rules on summary
judgment.

Another illustration of petitioner's proclivity to repeat its arguments in different fora can
be found in the second argument of its petition for certiorari in CA-G.R. SP No. 64155
which reads:

II

EVEN ASSUMING, ARGUENDO, THAT SUMMARY JUDGMENT IS PROPER,

RESPONDENT JUDGECOMMITTED PATENT AND GRAVE ABUSE OF DISCRETION,
AMOUNTING TO LACK OR EXCESS OF JURISDICTION, WHEN HE DISREGARDED
THE LAW AND WELL-ESTABLISHED JURISPRUDENCE IN RENDERING
JUDGMENT IN FAVOR OF SMARTNET.

A. SMARTNET [RADIOMARINE] WENT TO COURT WITH UNCLEAN HANDS.

HENCE, IT IS NOT ENTITLED TO RELIEF FROM THE COURTS.

B. SMARTNET CANNOT RENDER THE CONTRACT VOID AND UNENFORCEABLE

THROUGH ITS OWN DEFAULT, BREACH, OR FAILURE.

C. SMARTNET IS NOT ENTITLED TO INTEREST.

D. SMARTNET'S OBLIGATION TO PAY THE BALANCE OF THE PURCHASE PRICE

IS VALID, BINDING, ENFORCEABLE AND SUBSISTING. [58]

In support of which, petitioner discussed the following points:

83. SMARTNET cannot avoid the Contract by the simple expedient of not paying. Here,
the bare truth of the matter is that SMARTNET is invoking its own refusal or failure to
comply with its obligation under the Contract to annul or render the Contract ineffective
or void.

x x x x
85. SMARTNET is in effect saying that, since it has not paid, and it failed and refused,
and continues to fail and refuse, to pay the balance of the purchase price for the
Valgoson Property, the Contract is automatically annulled or rescinded.

86. Article 1182 of the Civil Code provides that: "When the fulfillment of the obligation
depends upon the sole will of the debtor, the conditional obligation shall be void."
Thus, in Osmena vs. Rama, it was held that the condition to pay (the balance of the
purchase price of shares of stock) as soon as the debtor sells her house is void.

87. Article 1186 of the Civil Code provides that: "The condition shall be deemed
fulfilled when the obligor voluntarily prevents its fulfillment." The reason for the
rule is that ONE MUST NOT PROFIT BY HIS OWN FAULT.

88. In Mana vs. Luzon Consolidated Mines & Co., a company engaged the services
of a contractor to construct a road. Halfway, the company directed the contractor to stop
work. The contractor sued for the entire contract price. The company refused, asserting
that only half of the project was finished. The Court of Appeals sustained the contractor
and directed the company to pay the entire contract price, saying that the project is
deemed fulfilled because it was the company that voluntarily prevented its completion.

89. The case of Valencia vs. Rehabilitation Finance Corporation and Court of
Appeals is even more applicable. There, the Rehabilitation Finance Corporation
("RFC") advertised to the general public an "invitation to bid" for the construction of a
building in Davao City. Valencia submitted a bid for the electrical and plumbing works for
the building. RFC awarded the plumbing to Valencia. Valencia was asked to put up the
performance bond as required under the contract. Valencia did not put up the bond and
also did not begin the work. When RFC sued him, among the defenses put up by
Valencia was that, since he did not put up a bond, there was no contract since the
condition was not complied with. The Supreme Court, affirming the Court of Appeals,
held Valencia liable for damages to RFC, saying that:

x x x x

90. Article 1308 of the Civil Code states that: "The contract must bind both
contracting parties; its validity or compliance cannot be left to the will of one of
them." Thus, in Fernandez vs. Manila Electric Company, the Supreme Court held
that the validity and fulfillment of contracts can not be left to the will of one of the
contracting parties, and the mere fact that one has made a poor bargain is no ground
for setting aside an agreement.[59](citations omitted.)

These same arguments were raised by petitioner in its Appellant's Brief in CA-G.R. CV
No. 71805, to wit:

77. SMARTNET is in effect saying that, since it has not paid, and it failed and refused,
and continues to fail and refuse, to pay the balance of the purchase price for the
Valgoson Property, the Contract to Sell is automatically annulled or rescinded.

78. SMARTNET cannot avoid the Contract by the simple expedient of not paying. The
validity of, compliance with, or fulfillment of a contract cannot be left to the will of one of
the parties.

79. Article 1182 of the Civil Code provides that: "When the fulfillment of the obligation
depends upon the sole will of the debtor, the conditional obligation shall be void."
Thus, in Osmena vs. Rama, it was held that the condition to pay (the balance of the
purchase price of shares of stock) as soon as the debtor sells her house is void.

80. Article 1186 of the Civil Code provides that: "The condition shall be deemed
fulfilled when the obligor voluntarily prevents its fulfillment." The reason for the
rule is that ONE MUST NOT PROFIT BY HIS OWN FAULT."

81. In Mana vs. Luzon Consolidated Mines & Co., a company engaged the services
of a contractor to construct a road. Halfway, the company directed the contractor to stop
work. The contractor sued for the entire contract price. The company refused, asserting
that only half of the project was finished. The Court of Appeals sustained the contractor
and directed the company to pay the entire contract price, saying that the project is
deemed fulfilled because it was the company that voluntarily prevented its completion.

82. The case of Valencia vs. Rehabilitation Finance Corporation and Court of
Appeals is even more applicable. There, the Rehabilitation Finance Corporation
("RFC") advertised to the general public an "invitation to bid" for the construction of a
building in Davao City. Valencia submitted a bid for the electrical and plumbing works for
the building. RFC awarded the plumbing to Valencia. Valencia was asked to put up the
performance bond as required under the contract. Valencia did not put up the bond and
also did not begin the work. When RFC sued him, among the defenses put up by
Valencia was that, since he did not put up a bond, there was no contract since the
condition was not complied with. The Supreme Court, affirming the Court of Appeals,
held Valencia liable for damages to RFC, saying that:

x x x x

83. Article 1308 of the Civil Code states that: "The contract must bind both
contracting parties; its validity or compliance cannot be left to the will of one of
them." Thus, in Fernandez vs. Manila Electric Company, the Supreme Court held
that the validity and fulfillment of contracts can not be left to the will of one of the
contracting parties, and the mere fact that one has made a poor bargain is no ground
for setting aside an agreement.[60]

It is apparent from the above that petitioner puts forward in both its petition
for certiorari and its appeal before the Court of Appeals as well as in the present petition
the assertion that the contract at issue was rendered void and unenforceable due to
mistakes attributable solely to the respondent in this case.

And finally, the most glaring demonstration of petitioner's penchant for forum shopping
can be found in the prayer of its Court of Appeals' petition for certiorari and appeal
including the instant petition before this Court.

In the present petition for review, petitioner sought in its prayer the following relief:

WHEREFORE, PILTEL respectfully prays that judgment be rendered:

1. Annulling, reversing and setting aside the First and Second Assailed Resolutions;

2. Annulling, reversing and setting aside the Resolution of the trial court dated 13
November 2000 and theOrder of the trial court dated 30 January 2001.

PILTEL likewise prays for such further or other relief as may be deemed just and
equitable under the circumstances.[61] (Emphasis supplied.)
In its petition for certiorari in CA-G.R. SP No. 64155, petitioner prayed for the following:

2.1. Annul, reverse and set aside the Assailed Resolution dated 13 November
2000 and the assailed Order dated 30 January 2001, AND DENY SMARTNET'S
MOTION FOR PARTIAL SUMMARY JUDGMENT;

2.2 (a) Order the lower court to proceed with the trial on the merits of the case; or, in the
alternative,

(b) dismiss the Complaint, and order SMARTNET to pay PILTEL:

(i) PhP380,000,000.00, representing the balance of the purchase price for the Valgoson
Property, plus interest until the same is fully paid;

(ii) PhP5,000,000.00, as moral damages;

(iii) PhP1,000,000.00, as exemplary damages; and

(iv) PhP1,000,000.00, as attorney's fees and costs of litigation." [62] (Emphasis supplied.)

While in its Supplemental Petition for Certiorari in the same appellate case, petitioner
prayed:

2. After due proceedings, judgment be rendered annulling, reversing and setting aside
the Order of 23 April 2001in so far as it grants execution pending appeal. [63] (Emphasis
supplied.)

Petitioner's Appellant's Brief in CA-G.R. CV No. 71805, on the other hand, sought the
following relief:

WHEREFORE, PILTEL respectfully prays that judgment be rendered as follows:

a. Annulling, reversing and setting aside (1) the Assailed Resolution dated 13
November 2000, (2) the First Assailed Order dated 23 April 2001, and (3) the Second
Assailed Order dated 14 August 2001;
b. Remanding the case to the Trial Court and allow the parties to present evidence on
their respective claims and defenses; and

c. Ordering SMARTNET to return the amount of Php131,795,836.38 to PILTEL, plus

interest.

PILTEL likewise prays for such further or other relief just and equitable under the
circumstances."[64] (Emphasis supplied.)

It is plainly apparent from the foregoing that both the then pending suits before the
Court of Appeals and the instant petition before this Court raised the same issues and
sought the same reliefs, i.e., the annulment of the November 13, 2000 Resolution of
the trial court granting partial summary judgment, as well as the withdrawal of the other
causes of action thereby disposing of the entire case, and the execution of the summary
judgment as directed by the trial court in its April 23, 2001 Order.

Forum shopping exists when the elements of litis pendentia are present or when a final
judgment in one case will amount to res judicata in the other.[65] There is res
judicata when (1) there is a final judgment or order; (2) the court rendering it has
jurisdiction over the subject matter and the parties; (3) the judgment or order is on the
merits; and (4) there is between the two cases identity of parties, subject matter and
causes of action. For litis pendentia to exist, there must be (1) identity of the parties or
at least such as representing the same interests in both actions; (2) identity of the rights
asserted and relief prayed for, the relief founded on the same facts; and (3) identity of
the two cases such that judgment in one, regardless of which party is successful, would
amount to res judicata in the other.[66]

In the case at bar, the elements of litis pendentia and, consequently, of forum shopping
are present in petitioner's petition for certiorari along with its supplemental petition
for certiorari in CA-G.R. SP No. 64155 and in its appeal in CA-G.R. CV No. 71850.
Obviously, there is identity of parties. Likewise, there is identity of causes of
action as both cases assign the same errors on the part of the trial court. Finally, there
is identity of reliefs as both seek the annulment and reversal of the same orders. It is
not difficult to conclude that a decision in either case will necessarily have a practical
legal effect in the other.
Petitioner further argues that the petition for certiorari alleged grave abuse of discretion
on the part of the trial court judge in issuing the November 13, 2000 Resolution and
April 23, 2001 Order, while the appeal alleged grave error on the part of the trial court
judge in its November 13, 2000 Resolution, April 23, 2001 Order, and August 14, 2001
Order which are entirely different issues. [67] However, it is our view that, though
petitioner attempts to make distinctions between them, the two cases at issue are
undoubtedly directed against the November 13, 2000 Resolution and the April 23, 2001
Order of the trial court, as well as all rulings of the trial court arising from these two.
Clearly, both actions alleged the same right supposedly violated by the same acts of the
trial court which caused the same damage to petitioner, thus, in violation of the rule
against forum shopping. The present petition likewise violates the said rule.

Forum shopping is the act of a litigant who repetitively avails of several judicial remedies
in different courts, simultaneously or successively, all substantially founded on the same
transactions and the same essential facts and circumstances, and raising substantially
the same issues either pending in, or already resolved adversely by some other court,
or to increase his chances of obtaining a favorable decision if not in one court, then in
another. The rationale against forum shopping is that a party should not be allowed to
pursue simultaneous remedies in two different courts as it constitutes abuse of court
processes, which tends to degrade the administration of justice, wreaks havoc upon
orderly judicial procedure, and adds to the congestion of the heavily burdened dockets
of the courts.[68]

Petitioner stresses that when it filed its petition for certiorari directed against the
November 13, 2000 Resolution granting partial summary judgment, the remedy of
appeal was not yet an available option to it as the case in the trial court had yet to be
concluded. However, upon the issuance of the April 23, 2001 Order which rendered the
previously partial summary judgment as the complete and final judgment disposing of
the trial court case and was the subject of petitioner's supplemental petition
for certiorari, appeal was now open to petitioner which it readily pursued. Since the
issues raised and the reliefs sought in its petition for certiorari and its appeal are
identical which would make a decision in either one as res judicata on the other and
given that it is axiomatic that the availability of appeal precludes resort to certiorari, it
was imperative on the part of petitioner to withdraw its petition for certiorari which it did
not do. This is where the petitioner crossed the line into the forbidden recesses of
forum shopping. The assailed February 7, 2002 Court of Appeals Resolution correctly
pointed this out citing the case ofLey Construction and Development Corporation v.
Hyatt Industrial Manufacturing Corporation,[69] to wit:

Second, the Petition for Certiorari was superseded by the filing, before the Court of
Appeals, of a subsequent appeal docketed as CA-G.R. CV No. 57119, questioning the
Resolution and the two Orders. In this light, there was no more reason for the CA to
resolve the Petition for Certiorari.

Section 1, Rule 65 of the Rules of Court, clearly provides that a petition for certiorari is
available only when "there is no appeal, or any plain, speedy and adequate remedy in
the ordinary course of law." A petition for certioraricannot coexist with an appeal or any
other adequate remedy. The existence and the availability of the right to appeal are
antithetical to the availment of the special civil action for certiorari. As the Court has
held, these two remedies are "mutually exclusive."

In this case, the subsequent appeal constitutes an adequate remedy. In fact it is the
appropriate remedy, because it assails not only the Resolution but also the two Orders.

It has been held that "what is determinative of the propriety of certiorari is the danger of
failure of justice without the writ, not the mere absence of all other legal remedies." The
Court is satisfied that the denial of the Petition for Certiorari by the Court of Appeals will
not result in a failure of justice, for petitioner's rights are adequately and, in fact, more
appropriately addressed in the appeal.

Third, petitioner's submission that the Petition for Certiorari has a practical legal effect is
in fact an admission that the two actions are one and the same. Thus, in arguing that
the reversal of the two interlocutory Orders "would likely result in the setting aside of the
dismissal of petitioner's amended complaint," petitioner effectively contends that its
Petition for Certiorari, like the appeal, seeks to set aside the Resolution and the two
Orders.

Such argument unwittingly discloses a recourse to forum shopping, which has been
held as "the institution of two or more actions or proceedings grounded on the same
cause on the supposition that one or the other court would make a favorable
disposition." Clearly, by its own submission, petitioner seeks to accomplish the same
thing in its Petition for Certiorari and in its appeal: both assail the two interlocutory
Orders and both seek to set aside the RTC Resolution.

Hence, even assuming that the Petition for Certiorari has a practical legal effect
because it would lead to the reversal of the Resolution dismissing the Complaint, it
would still be denied on the ground of forum shopping.

With respect to the second issue of whether or not grave abuse of discretion attended
the granting of summary judgment by the trial court, we rule that a petition for an
extraordinary writ of certiorari is not a proper remedy to assail the propriety of the said
act. The pertinent provision of law in this particular case is Section 1, Rule 65 of the
1997 Rules of Civil Procedure, to wit:

SECTION 1. Petition for certiorari. - When any tribunal, board or officer exercising
judicial or quasi-judicial functions has acted without or in excess of its or his jurisdiction,
or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is
no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law, a
person aggrieved thereby may file a verified petition in the proper court, alleging the
facts with certainty and praying that judgment be rendered annulling or modifying the
proceedings of such tribunal, board or officer, and granting such incidental reliefs as law
and justice may require.

In other words, a writ of certiorari may be issued only for the correction of errors of
jurisdiction or grave abuse of discretion amounting to lack or excess of jurisidiction. [70]

In Rizal Security & Protective Services, Inc v. Maraan,[71] we elaborated on the

aforementioned grounds:

The respondent acts without jurisdiction if he does not have the legal power to
determine the case. There is excess of jurisdiction where the respondent, being clothed
with the power to determine the case, oversteps his authority as determined by law.
And there is grave abuse of discretion where the respondent acts in a capricious,
whimsical, arbitrary or despotic manner in the exercise of his judgment as to be said to
be equivalent to lack of jurisdiction. x x x.

After a careful review of the records, we find that petitioner failed to sufficiently show
that the trial court, in rendering a partial summary judgment, so gravely abused its
discretion amounting to lack or excess of jurisdiction. Verily, the circumstances of this
case do not show that the trial court's discretion was exercised arbitrarily, capriciously,
or despotically because the November 13, 2000 Resolution laid down the factual and
legal bases relied upon by the trial court in granting the Motion for Partial Summary
Judgment. Even assuming arguendo, that the trial court committed errors in its
appreciation of the facts and pleadings on record, as petitioner contends in its petition
forcertiorari, we agree with the Court of Appeals that these involve errors of judgment
which are not reviewable bycertiorari. As this Court held:

As a legal recourse, the special civil action of certiorari is a limited form of review. The
jurisdiction of this Court is narrow in scope; it is restricted to resolving errors of
jurisdiction, not errors of judgment. Indeed, as long as the courts below act within their
jurisdiction, alleged errors committed in the exercise of their discretion will amount to
mere errors of judgment correctable by an appeal or a petition for review.[72]

Lastly, we resolve the issue of whether or not the petition for certiorari filed by petitioner
was properly dismissed by the Court of Appeals. In dismissing the said petition, the
Court of Appeals ruled in its May 2, 2001 Resolution that appeal and not certiorari is the
proper remedy available to petitioner - a holding that was restated by the appellate court
in its February 7, 2002 Resolution citing the case of Ley Construction and Development
Corporation v. Hyatt Industrial Manufacturing Corporation. [73]

Petitioner defends its resort to dual remedies by arguing that, under the peculiar
circumstances of the case, it could properly avail of a petition for certiorari and an
appeal and that the former is not barred even with the filing of the latter. [74] However, we
deem such a position untenable as established jurisprudence declares otherwise.

The well-settled rule is that certiorari is not available where the aggrieved party's
remedy of appeal is plain, speedy and adequate in the ordinary course, the reason
being that certiorari cannot co-exist with an appeal or any other adequate remedy. The
existence and availability of the right of appeal are antithetical to the availment of the
special civil action for certiorari. These two remedies are mutually exclusive. [75]

Moreover, in Monterey Foods Corporation v. Eserjose, [76] the Court distinguished when a
partial summary judgment is appealable and when it is not, to wit:
Petitioners maintain that the order granting partial summary judgment was merely
interlocutory in nature and did not dispose of the action in its entirety. They cite the
doctrines laid down in Province of Pangasinan v. Court of Appeals and Guevarra v.
Court of Appeals, where the Court categorically stated that a partial summary judgment
is not a final or appealable judgment.

Petitioners' position is untenable.

The rulings in Province of Pangasinan and Guevarra is not applicable in the case at
bar. The said cases specifically delved on the appeal of a partial summary judgment,
which did not dispose of all the reliefs sought in the complaint. In the case at bar, other
than the admitted liability of petitioners to respondents under the contract growing
agreement, all other reliefs sought under the complaint had already been
expressly waived by respondent before the trial court. Accordingly, the assailed
November 25, 1999 Order of the trial court which granted partial summary
judgment in favor of respondent was in the nature of a final order which leaves
nothing more for the court to adjudicate in respect to the complaint. x x x.
(Emphases supplied.)

Petitioner strongly asserts that the aforementioned Court of Appeals' Resolutions are
invalid while conveniently failing to take into account the fact that the petition
for certiorari it filed before the Court of Appeals had become moot and academic
because of the following circumstances: First, when the May 2, 2001 Resolution was
issued by the Court of Appeals, respondent had already filed its Manifestation and
Motion for Execution dated March 15, 2001 withdrawing its remaining causes of action
and the RTC had already granted this in an Order dated April 23, 2001. In effect, this
Order terminated the case before the RTC and the proper mode to challenge it is
through an appeal which petitioner did through a Notice of Appeal on April 25, 2001.
Not unlike the factual circumstances found in the Ley Construction and Development
Corporation case, the petition for certiorari was correctly dismissed since superseding
events had already rendered it not only improper because appeal already became an
available remedy but also superfluous as the appeal that was eventually filed dealt
essentially with the same issues. Second, when the February 7, 2002 Resolution was
issued, there was already a Sheriff's Return [77] issued on September 21, 2001 informing
the trial court that the writ of execution pending appeal was fully satisfied rendering the
case bereft of any pending incidents at the trial court level and, thus, concluded already
which would make an appeal as the proper mode to question it and not a petition
for certiorari.

To reiterate, it is axiomatic that a writ of certiorari is available when any tribunal, board
or officer exercising judicial or quasi-judicial functions has acted without or in excess of
its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of
jurisdiction, and there is no appeal, nor any plain, speedy, and adequate remedy in the
ordinary course of law.[78] As we have previously discussed, we find that the trial court
acted within its jurisdiction when it granted summary judgment and the purported errors
attributed to the trial court appear to be errors of judgment not reviewable
by certiorari but by appeal. Likewise, we find that the particular circumstances of this
case made the remedy of appeal the proper vehicle to thresh out the issues raised by
petitioner and rendered the petition for certiorari improper and moot, notwithstanding the
fact that it was filed earlier than the appeal subsequently filed by petitioner. Premises
considered, the petition for certiorari was properly dismissed by the Court of Appeals.

WHEREFORE, the petition is hereby DENIED, and the assailed Resolutions of the
Court of Appeals are AFFIRMED in toto. With costs against petitioner.

SO ORDERED.
 SECOND DIVISION

[ G.R. No. 165300, April 23, 2010 ]

ATTY. PEDRO M. FERRER, PETITIONER, VS. SPOUSES ALFREDO DIAZ AND

IMELDA DIAZ, AND REINA COMANDANTE AND SPOUSES BIENVENIDO PANGAN
AND ELIZABETH PANGAN, RESPONDENTS.

DECISION

DEL CASTILLO, J.:

The basic questions to be resolved in this case are: Is a waiver of hereditary rights in
favor of another executed by a future heir while the parents are still living valid? Is an
adverse claim annotated on the title of a property on the basis of such waiver likewise
valid and effective as to bind the subsequent owners and hold them liable to the
claimant?

This Petition for Review on Certiorari[1] under Rule 45 of the Rules of Court assails the
December 12, 2003 Decision[2] of the Court of Appeals (CA) in CA-G.R. CV No. 70888.
[3]
Said Decision modified the June 14, 2001 Summary Judgment [4] of the Regional Trial
Court (RTC) of Quezon City in Civil Case No. Q-99-38876 by holding respondents
Spouses Bienvenido and Elizabeth Pangan (the Pangans) not solidarily liable with the
other respondents, Spouses Alfredo and Imelda Diaz (the Diazes) and Reina
Comandante (Comandante), to petitioner Atty. Pedro M. Ferrer (Atty. Ferrer). Likewise
assailed is the CA Resolution[5] dated September 10, 2004 which denied petitioner's as
well as respondents Spouses Diaz and Comandante's respective motions for
reconsideration.

The parties' respective versions of the factual antecedents are as follows:

Version of the Petitioner

Petitioner Atty. Ferrer claimed in his original Complaint [6] that on May 7, 1999, the
Diazes, as represented by their daughter Comandante, through a Special Power of
Attorney (SPA),[7] obtained from him a loan of P1,118,228.00. The loan was secured by
a Real Estate Mortgage Contract[8] by way of second mortgage over Transfer Certificate
of Title (TCT) No. RT-6604[9] and a Promissory Note[10] payable within six months or up
to November 7, 1999. Comandante also issued to petitioner postdated checks to secure
payment of said loan.

Petitioner further claimed that prior to this or on May 29, 1998, Comandante, for a
valuable consideration of P600,000.00, which amount formed part of the
abovementioned secured loan, executed in his favor an instrument entitled Waiver of
Hereditary Rights and Interests Over a Real Property (Still Undivided), [11] the pertinent
portions of which read:

I, REINA D. COMANDANTE, of legal age, Filipino, married, with residence and postal
address at No. 6, Road 20, Project 8, Quezon City, Metro Manila, Philippines, for a
valuable consideration of SIX HUNDRED THOUSAND PESOS (P600,000.00) which
constitutes my legal obligation/loan to Pedro M. Ferrer, likewise of legal age, Filipino,
married to Erlinda B. Ferrer, with residence and postal address at No. 9, Lot 4, Puerto
Rico Street, Loyola Grand Villas, Quezon City, Metro Manila, Philippines, by virtue of
these presents, do hereby WAIVE, and/or REPUDIATE all my hereditary rights and
interests as a legitimate heir/daughter of Sps. Alfredo T. Diaz and Imelda G. Diaz in
favor of said Pedro M. Ferrer, his heirs and assigns over a certain parcel of land
together with all the improvements found thereon and which property is more
particularly described as follows:

TRANSFER CERTIFICATE OF TITLE

NO. RT-6604 (82020) PR-18887
x x x x

and which property is titled and registered in the name of my parents Alfredo T. Diaz
and Imelda G. Diaz, as evidenced by Transfer Certificate of Title No. RT 6604 (82020)
PR-18887.

(sgd.)
REINA D. COMANDANTE
Affiant

On the basis of said waiver, petitioner executed an Affidavit of Adverse Claim [12] which
he caused to be annotated at the back of TCT No. RT-6604 on May 26, 1999.

The Diazes, however, reneged on their obligation as the checks issued by Comandante
were dishonored upon presentment. Despite repeated demands, said respondents still
failed and refused to settle the loan. Thus, petitioner filed on September 29, 1999 a
Complaint[13] for Collection of Sum of Money Secured by Real Estate Mortgage Contract
against the Diazes and Comandante docketed as Civil Case No. Q-99-38876 and
raffled to Branch 224 of RTC, Quezon City.

Petitioner twice amended his complaint. First, by including as an alternative relief the
Judicial Foreclosure of Mortgage[14] and, second, by impleading as additional
defendants the Pangans as the mortgaged property covered by TCT No. RT-6604 was
already transferred under their names in TCT No. N-209049. Petitioner prayed in his
second amended complaint that all the respondents be ordered to jointly and solidarily
pay him the sum of P1,118,228.00, exclusive of interests, and/or for the judicial
foreclosure of the property pursuant to the Real Estate Mortgage Contract.

Version of the Respondents

In her Answer[15] to petitioner's original complaint, Comandante alleged that petitioner

and his wife were her fellow members in the Couples for Christ Movement. Sometime in
1998, she sought the help of petitioner with regard to the mortgage with a bank of her
parents' lot located at No. 6, Rd. 20, Project 8, Quezon City and covered by TCT No.
RT-6604. She also sought financial accommodations from the couple on several
occasions which totaled P500,000.00. Comandante, however, claimed that these loans
were secured by chattel mortgages over her taxi units in addition to several postdated
checks she issued in favor of petitioner.

As she could not practically comply with her obligation, petitioner and his wife,
presented to Comandante sometime in May 1998 a document denominated as Waiver
of Hereditary Rights and Interests Over a Real Property (Still Undivided) pertaining to a
waiver of her hereditary share over her parents' abovementioned property. Purportedly,
the execution of said waiver was to secure Comandante's loan with the couple which at
that time had already ballooned to P600,000.00 due to interests.

A year later, the couple again required Comandante to sign the following documents: (1)
a Real Estate Mortgage Contract over her parents' property; and, (2) an undated
Promissory Note, both corresponding to the amount of P1,118,228.00, which petitioner
claimed to be the total amount of Comandante's monetary obligation to him exclusive of
charges and interests. Comandante alleged that she reminded petitioner that she was
not the registered owner of the subject property and that although her parents granted
her SPA, same only pertains to her authority to mortgage the property to banks and
other financial institutions and not to individuals. Petitioner nonetheless assured
Comandante that the SPA was also applicable to their transaction. As Comandante was
still hesitant, petitioner and his wife threatened to foreclose the former's taxi units and
present the postdated checks she issued to the bank for payment. For fear of losing her
taxi units which were the only source of her livelihood, Comandante was thus
constrained to sign the mortgage agreement as well as the promissory note. Petitioner,
however, did not furnish her with copies of said documents on the pretext that they still
have to be notarized, but, as can be gleaned from the records, the documents were
never notarized. Moreover, Comandante claimed that the SPA alluded to by petitioner in
his complaint was not the same SPA under which she thought she derived the authority
to execute the mortgage contract.

Comandante likewise alleged that on September 29, 1999 at 10:00 o` clock in the
morning, she executed an Affidavit of Repudiation/Revocation of Waiver of Hereditary
Rights and Interests Over A (Still Undivided) Real Property,[16] which she caused to be
annotated on the title of the subject property with the Registry of Deeds of Quezon City
on the same day. Interestingly, petitioner filed his complaint later that day too.
By way of special and affirmative defenses, Comandante asserted in her Answer to the
amended complaint[17] that said complaint states no cause of action against her because
the Real Estate Mortgage Contract and the waiver referred to by petitioner in his
complaint were not duly, knowingly and validly executed by her; that the Waiver of
Hereditary Rights and Interests Over a Real Property (Still Undivided) is a useless
document as its execution is prohibited by Article 1347 of the Civil Code, [18] hence, it
cannot be the source of any right or obligation in petitioner's favor; that the Real Estate
Mortgage was of doubtful validity as she executed the same without valid authority from
her parents; and, that the prayer for collection and/or judicial foreclosure was irregular
as petitioner cannot seek said remedies at the same time.

Apart from executing the affidavit of repudiation, Comandante also filed on October 4,
1999 a Petition for Cancellation of Adverse Claim (P.E. 2468) Under The Memorandum
of Encumbrances of TCT No. RT-6604 (82020) PR-18887 [19] docketed as LRC Case No.
Q-12009 (99) and raffled to Branch 220 of RTC, Quezon City. Petitioner who was
impleaded as respondent therein moved for the consolidation of said case [20] with Civil
Case No. Q-99-38876. On June 24, 2000, Branch 220 of RTC, Quezon City ordered the
consolidation of LRC Case No. Q-12009 (99) with Civil Case No. Q-99-38876.
Accordingly, the records of the former case was forwarded to Branch 224.

For their part, the Diazes asserted that petitioner has no cause of action against them.
They claimed that they do not even know petitioner and that they did not execute any
SPA in favor of Comandante authorizing her to mortgage for the second time the subject
property. They also contested the due execution of the SPA as it was neither
authenticated before the Philippine Consulate in the United States nor notarized before
a notary public in the State of New York where the Diazes have been residing for 16
years. They claimed that they do not owe petitioner anything. The Diazes also pointed
out that the complaint merely refers to Comandante's personal obligation to petitioner
with which they had nothing to do. They thus prayed that the complaint against them be
dismissed.[21]

At the Pangans' end, they alleged that they acquired the subject property by purchase in
good faith and for a consideration of P3,000,000.00 on November 11, 1999 from the
Diazes through the latter's daughter Comandante who was clothed with SPA
acknowledged before the Consul of New York. The Pangans immediately took actual
possession of the property without anyone complaining or protesting. Soon thereafter,
they were issued TCT No. N-209049 in lieu of TCT No. RT-6604 which was
cancelled. [22]

However, on December 21, 1999, they were surprised upon being informed by
petitioner that the subject land had been mortgaged to him by the Diazes. Upon inquiry
from Comandante, the latter readily admitted that she has a personal loan with
petitioner for which the mortgage of the property in petitioner's favor was executed. She
admitted, though, that her parents were not aware of such mortgage and that they did
not authorize her to enter into such contract. Comandante also informed the Pangans
that the signatures of her parents appearing on the SPA are fictitious and that it was
petitioner who prepared such document.

As affirmative defense, the Pangans asserted that the annotation of petitioner's adverse
claim on TCT No. RT-6604 cannot impair their rights as new owners of the subject
property. They claimed that the Waiver of Hereditary Rights and Interests Over a Real
Property (Still Undivided) upon which petitioner's adverse claim is anchored cannot be
the source of any right or interest over the property considering that it is null and void
under paragraph 2 of Article 1347 of the Civil Code.

Moreover, the Pangans asserted that the Real Estate Mortgage Contract cannot bind
them nor in any way impair their ownership of subject property because it was not
registered before the Register of Deeds. [23]

All the respondents interposed their respective counterclaims and prayed for moral and
exemplary damages and attorney's fees in varying amounts.

After the parties have submitted their respective pre-trial briefs, the Diazes filed on
March 29, 2001 a Motion for Summary Judgment [24] alleging that: first, since the
documents alluded to by petitioner in his complaint were defective, he was not entitled
to any legal right or relief; and, second, it was clear from the pleadings that it is
Comandante who has an outstanding obligation with petitioner which the latter never
denied. With these, the Diazes believed that there is no genuine issue as to any
material fact against them and, hence, they were entitled to summary judgment.

On May 7, 2001, petitioner also filed a Motion for Summary Judgment, [25] claiming that
his suit against the respondents is meritorious and well-founded and that same is
documented and supported by law and jurisprudence. He averred that his adverse claim
annotated at the back of TCT No. RT-6604, which was carried over in TCT No. 209049
under the names of the Pangans, is not merely anchored on the Waiver of Hereditary
Rights and Interests Over a Real Property (Still Undivided) executed by Comandante,
but also on the Real Estate Mortgage likewise executed by her in representation of her
parents and in favor of petitioner. Petitioner insisted that said adverse claim is not
frivolous and invalid and is registrable under Section 70 of Presidential Decree (PD) No.
1529. In fact, the Registrar of Deeds of Quezon City had already determined the
sufficiency and/or validity of such registration by annotating said claim, and this,
respondents failed to question. Petitioner further averred that even before the sale and
transfer to the Pangans of the subject property, the latter were already aware of the
existence of his adverse claim. In view of these, petitioner prayed that his Motion for
Summary Judgment be granted.

Ruling of the Regional Trial Court

After the filing of the parties' respective Oppositions to the said motions for summary
judgment, the trial court, in an Order dated May 31, 2001, [26] deemed both motions for
summary judgment submitted for resolution. Quoting substantially petitioner's
allegations in his Motion for Summary Judgment, it thereafter rendered on June 14,
2001 a Summary Judgment[27] in favor of petitioner, the dispositive portion of which
reads:

WHEREFORE, premises considered, summary judgment is hereby rendered in favor of

plaintiff and against defendants by:

a) ORDERING all defendants jointly and solidarily to pay plaintiff the sum of ONE
MILLION ONE HUNDRED EIGHTEEN THOUSAND TWO HUNDRED TWENTY EIGHT
PESOS (P1,118,228.00) which is blood money of plaintiff;

b) ORDERING the Honorable Registrar of Deeds of Quezon City that the rights and
interest of the plaintiff over subject property be annotated at the back of T.C.T. No. N-
209049;

c) SENTENCING all defendants to pay plaintiff's expenses of TEN THOUSAND PESOS

(P10,000.00) and to pay the costs of suit.
IT IS SO ORDERED.[28]

The Pangans, the Diazes, and Comandante appealed to the CA. [29] The Pangans
faulted the trial court in holding them jointly and severally liable with the Diazes and
Comandante for the satisfaction of the latter's personal obligation to petitioner in the
total amount of P1,118,228.00. The Diazes and Comandante, on the other hand,
imputed error upon the trial court in rendering summary judgment in favor of petitioner.
They averred that assuming the summary judgment was proper, the trial court should
not have considered the Real Estate Mortgage Contract and the Promissory Note as
they were defective, as well as petitioner's frivolous and non-registrable adverse claim.

In its Decision[30] dated December 12, 2003, the CA declared Comandante's waiver of
hereditary rights null and void. However, it found the Real Estate Mortgage executed by
Comandante on behalf of her parents as binding between the parties thereto.

As regards the Pangans, the CA ruled that the mortgage contract was not binding upon
them as they were purchasers in good faith and for value. The property was free from
the mortgage encumbrance of petitioner when they acquired it as they only came to
know of the adverse claim through petitioner's phone call which came right after the
former's acquisition of the property. The CA further ruled that as Comandante's waiver
of hereditary rights and interests upon which petitioner's adverse claim was based is a
nullity, it could not be a source of any right in his favor. Hence, the Pangans were not
bound to take notice of such claim and are thus not liable to petitioner.

Noticeably, the appellate court did not rule on the propriety of the issuance of the
Summary Judgment as raised by the Diazes and Comandante. In the ultimate, the CA
merely modified the assailed Summary Judgment of the trial court by excluding the
Pangans among those solidarily liable to petitioner, in effect affirming in all other
respects the assailed summary judgment, viz:

WHEREFORE, foregoing premises considered, the Decision of the Regional Trial Court
of Quezon City, Branch 224 in Civil Case No. Q-99-38876 is hereby MODIFIED, as
follows:

1. Ordering defendants-appellants Comandante and Spouses Diaz to jointly and

severally pay plaintiff the sum of Php 1,118, 228.00; and

2. Ordering defendants-appellants Comandante and Spouses Diaz to jointly and

severally pay plaintiff the amount of Php10,000.00 plus cost of suit.

SO ORDERED.[31]

Petitioner's Motion for Reconsideration [32] having been denied by the CA in its
Resolution[33] dated September 10, 2004, he now comes to us through this petition for
review on certiorari insisting that the Pangans should, together with the other
respondents, be held solidarily liable to him for the amount of P1,118,228.00.

Our Ruling

The petition lacks merit.

Petitioner merely reiterates his contentions in the Motion for Summary Judgment he
filed before the trial court. He insists that his Adverse Claim annotated at the back of
TCT No. RT-6604 is not merely anchored on Comandante's Waiver of Hereditary Rights
and Interests Over A Real Property (Still Undivided) but also on her being the attorney-
in-fact of the Diazes when she executed the mortgage contract in favor of petitioner. He
avers that his adverse claim is not frivolous or invalid and is registrable as the Registrar
of Deeds of Quezon City even allowed its annotation. He also claims that even prior to
the sale of subject property to the Pangans, the latter already knew of his valid and
existing adverse claim thereon and are, therefore, not purchasers in good faith. Thus,
petitioner maintains that the Pangans should be held, together with the Diazes and
Comandante, jointly and severally liable to him in the total amount of P1,118,228.00.

Petitioner's contentions are untenable.

The Affidavit of Adverse Claim executed by petitioner reads in part:

x x x x

1. That I am the Recipient/Benefactor of compulsory heir's share over an

undivided certain parcel of land together with all the improvements found
therein x x x as evidenced by Waiver of Hereditary Rights and Interests Over A
Real Property, executed by REINA D. COMANDANTE (a compulsory/legitimate
heir of Sps. Alfredo T. Diaz and Imelda G. Diaz), x x x.

2. That in order to protect my interest over said property as a

Recipient/Benefactor, for the registered owners/parents might dispose (of) and/or
encumber the same in a fraudulent manner without my knowledge and consent, for the
owner's duplicate title was not surrendered to me, it is petitioned that this Affidavit of
Adverse Claim be ANNOTATED at the back of the said title particularly on the original
copy of Transfer Certificate of Title No. RT-6604 (82020) PR-18887 which is on file with
the Register of Deeds of Quezon City.

3. That I am executing this Affidavit in order to attest (to) the truth of the foregoing facts
and to petition the Honorable Registrar of Deeds, Quezon City, to annotate this Affidavit
of Adverse Claim at the back of the said title particularly the original copy of Transfer
Certificate of Title No. RT-6604 (82020) PR-18887 which is on file with the said
office, so that my interest as Recipient/Benefactor of the said property will be
protected especially the registered owner/parents, in a fraudulent manner might dispose
(of) and/or encumber the same without my knowledge and consent. (Emphasis ours)

Clearly, petitioner's Affidavit of Adverse Claim was based solely on the waiver of
hereditary interest executed by Comandante. This fact cannot be any clearer especially
so when the inscription of his adverse claim at the back of TCT No. RT-6604 reads as
follows:

P.E. 2468/T-(82020)RT-6604 - - AFFIDAVIT OF ADVERSE CLAIM - - Executed under

oath by PEDRO M. FERRER, married to Erlinda B. Ferrer, claiming among others
that they have a claim, the interest over said property as Recipient/Benefactor, by
virtue of a waiver of Hereditary Rights and Interest over a real property x x x[34]
(Emphasis ours)

Therefore, there is no basis for petitioner's assertion that the adverse claim was also
anchored on the mortgage contract allegedly executed by Comandante on behalf of her
parents.

The questions next to be resolved are: Is Comandante's waiver of hereditary rights

valid? Is petitioner's adverse claim based on such waiver likewise valid and effective?

We note at the outset that the validity of petitioner's adverse claim should have been
determined by the trial court after the petition for cancellation of petitioner's adverse
claim filed by Comandante was consolidated with Civil Case No. Q-99-38876. [35] This is
in consonance with Section 70 of PD 1529 which provides:

Section 70. Adverse Claim. - Whoever claims any part or interest in registered land
adverse to the registered owner, arising subsequent to the date of the original
registration, may, if no other provision is made in this Decree for registering the same,
make a statement in writing setting forth fully his alleged right or interest, and how or
under whom acquired, a reference to the number of the certificate of title of the
registered owner, the name of the registered owner, and a description of the land in
which the right or interest is claimed.

The statement shall be signed and sworn to, and shall state the adverse claimant's
residence, and a place at which all notices may be served upon him. This statement
shall be entitled to registration as an adverse claim on the certificate of title. The
adverse claim shall be effective for a period of thirty days from the date of registration.
After the lapse of said period, the annotation of adverse claim may be cancelled
upon filing of a verified petition therefor by the party in interest: Provided,
however, That after cancellation, no second adverse claim based on the same ground
shall be registered by the same claimant.

Before the lapse of thirty days aforesaid, any party in interest may file a petition in
the Court of First Instance where the land is situated for the cancellation of the
adverse claim, and the court shall grant a speedy hearing upon the question of
validity of such adverse claim, and shall render judgment as may be just and
equitable. If the adverse claim is adjudged to be invalid, the registration thereof
shall be ordered cancelled. If, in any case, the court, after notice and hearing, shall
find that the adverse claim thus registered was frivolous, it may fine the claimant in an
amount not less than one thousand pesos nor more than five thousand pesos, in its
discretion. Before the lapse of thirty days, the claimant may withdraw his adverse claim
by filing with the Register of Deeds a sworn petition to that effect. (Emphasis ours)

Pursuant to the third paragraph of the afore-quoted provision, it has been held that the
validity or efficaciousness of an adverse claim may only be determined by the Court
upon petition by an interested party, in which event, the Court shall order the immediate
hearing thereof and make the proper adjudication as justice and equity may warrant.
And, it is only when such claim is found unmeritorious that the registration of the
adverse claim may be cancelled. [36]

As correctly pointed out by respondents, the records is bereft of any showing that the
trial court conducted any hearing on the matter. Instead, what the trial court did was to
include this material issue among those for which it has rendered its summary judgment
as shown by the following portion of the judgment:

x x x it will be NOTED that subject Adverse Claim annotated at the back of Transfer
Certificate of Title No. RT-6604 (82020) PR-18887, and carried over to defendants-Sps.
Pangan's Title No. N-20909, is not merely anchored on defendant Reina Comandante's
"Waiver of Hereditary Rights and Interest Over a Real Property" but also on her being
the Attorney-In-Fact of the previous registered owners/parents/defendants Sps. Alfredo
and Imelda Diaz about the Real Estate Mortgage Contract for a loan of P1,118,228.00
which is a blood money of the plaintiff.Moreover, subject Adverse Claim in LRC Case
No. Q-12009 (99) is NOT frivolous and invalid and consequently, REGISTRABLE
by virtue of Section 110 of the Land Registration Act (now Section 70 of
Presidential Decree No. 1529). [37] (Emphasis ours)

It does not escape our attention that the trial court merely echoed the claim of petitioner
that his adverse claim subject of LRC Case No. Q-12009 (99) is not frivolous, invalid
and is consequently registrable. We likewise lament the apparent lack of effort on the
part of said court to make even a short ratiocination as to how it came up with said
conclusion. In fact, what followed the above-quoted portion of the summary judgment
are mere recitals of the arguments raised by petitioner in his motion for summary
judgment. And in the dispositive portion, the trial court merely casually ordered that
petitioner's adverse claim be inscribed at the back of the title of the Pangans. What is
worse is that despite this glaring defect, the CA manifestly overlooked the matter even if
respondents vigorously raised the same before it.

Be that as it may, respondents' efforts of pointing out this flaw, which we find significant,
have not gone to naught as will be hereinafter discussed.
All the respondents contend that the Waiver of Hereditary Rights and Interest Over a
Real Property (Still Undivided) executed by Comandante is null and void for being
violative of Article 1347 of the Civil Code, hence, petitioner's adverse claim which was
based upon such waiver is likewise void and cannot confer upon the latter any right or
interest over the property.

We agree with the respondents.

Pursuant to the second paragraph of Article 1347 of the Civil Code, no contract may be
entered into upon a future inheritance except in cases expressly authorized by law. For
the inheritance to be considered "future", the succession must not have been opened at
the time of the contract. A contract may be classified as a contract upon future
inheritance, prohibited under the second paragraph of Article 1347, where the following
requisites concur:

(1) That the succession has not yet been opened.

(2) That the object of the contract forms part of the inheritance; and,

(3) That the promissor has, with respect to the object, an expectancy of a right which is
purely hereditary in nature.[38]

In this case, there is no question that at the time of execution of Comandante's Waiver
of Hereditary Rights and Interest Over a Real Property (Still Undivided), succession to
either of her parent's properties has not yet been opened since both of them are still
living. With respect to the other two requisites, both are likewise present considering
that the property subject matter of Comandante's waiver concededly forms part of the
properties that she expect to inherit from her parents upon their death and, such
expectancy of a right, as shown by the facts, is undoubtedly purely hereditary in nature.

From the foregoing, it is clear that Comandante and petitioner entered into a contract
involving the former's future inheritance as embodied in the Waiver of Hereditary Rights
and Interest Over a Real Property (Still Undivided) executed by her in petitioner's favor.

In Taedo v. Court of Appeals,[39] we invalidated the contract of sale between Lazaro

Taedo and therein private respondents since the subject matter thereof was a "one
hectare of whatever share the former shall have over Lot 191 of the cadastral survey of
Gerona, Province of Tarlac and covered by Title T-13829 of the Register of Deeds of
Tarlac." It constitutes a part of Taedo's future inheritance from his parents, which
cannot be the source of any right nor the creator of any obligation between the parties.

Guided by the above discussions, we similarly declare in this case that the Waiver of
Hereditary Rights and Interest Over a Real Property (Still Undivided) executed by
Comandante in favor of petitioner as not valid and that same cannot be the source of
any right or create any obligation between them for being violative of the second
paragraph of Article 1347 of the Civil Code.

Anent the validity and effectivity of petitioner's adverse claim, it is provided in Section 70
of PD 1529, that it is necessary that the claimant has a right or interest in the registered
land adverse to the registered owner and that it must arise subsequent to registration.
Here, as no right or interest on the subject property flows from Comandante's invalid
waiver of hereditary rights upon petitioner, the latter is thus not entitled to the
registration of his adverse claim. Therefore, petitioner's adverse claim is without any
basis and must consequently be adjudged invalid and ineffective and perforce be
cancelled.

Albeit we have already resolved the issues raised by petitioner, we shall not stop here
as the Diazes and Comandante in their Comment [40] call our attention to the failure of
the CA to pass upon the issue of the propriety of the issuance by the trial court of the
Summary Judgment in favor of petitioner despite the fact that they have raised this
issue before the appellate court. They argue that summary judgment is proper only
when there is clearly no genuine issue as to any material fact in the action. Thus, where
the defendant presented defenses tendering factual issue which call for presentation of
evidence, as when he specifically denies the material allegations in the complaint,
summary judgment cannot be rendered.

The Diazes and Comandante then enumerate the genuine issues in the case which
they claim should have precluded the trial court from issuing a summary judgment in
petitioner's favor. First, the execution of the SPA in favor of Comandante referred to by
petitioner in his complaint was never admitted by the Diazes. They assert that as such
fact is disputed, trial should have been conducted to determine the truth of the matter,
same being a genuine issue. Despite this, the trial court merely took the word of the
plaintiff and assumed that said document was indeed executed by them. Second,
although Comandante acknowledges that she has a personal obligation with petitioner,
she nevertheless, did not admit that it was in the amount of P1,118,228.00. Instead, she
claims only the amount of P500,000.00 or P600,000.00 (if inclusive of interest) as her
obligation. Moreover, the Diazes deny borrowing any money from petitioner and neither
did the Pangans owe him a single centavo. Thus, the true amount of the obligation due
the petitioner and how each of the respondents are responsible for such amount are
genuine issues which need formal presentation of evidence. Lastly, they aver that the
trial court ignored factual and material issues such as the lack of probative value of
Comandante's waiver of hereditary rights as well as of the SPA; the fact that
Comandante signed the mortgage contract and promissory note in her personal
capacity; and, that all such documents were prepared by petitioner who acted as a
lawyer and the creditor of Comandante at the same time.

Rule 35 of the Rules of Court provides for summary judgment, the pertinent provisions
of which are the following:

Section 1. Summary Judgment for claimant. A party seeking to recover upon a claim,
counterclaim, or cross-claim or to obtain a declaratory relief may, at any time after the
pleading in answer thereto has been served, move with supporting affidavits,
depositions or admissions for a summary judgment in his favor upon all or any part
thereof.

Section 2. Summary Judgment for the defending party. A party against whom a claim,
counterclaim or cross-claim is asserted or a declaratory relief is sought may, at any
time, move with supporting affidavits, depositions or admissions for a summary
judgment in his favor as to all or any part thereof.

Section 3. Motion and proceedings thereon. The motion shall be served at least ten (10)
days before the time specified for the hearing. The adverse party may serve opposing
affidavits, depositions, or admissions at least three (3) days before the hearing. After the
hearing, the judgment sought shall be rendered forthwith if the pleadings, supporting
affidavits, depositions and admissions on file, show that, except as to the amount of
damages, there is no genuine issue as to any material fact and that the moving party is
entitled to a judgment as a matter of law.
As can be deduced from the above provisions, summary judgment is a procedural
devise resorted to in order to avoid long drawn out litigations and useless delays. When
the pleadings on file show that there are no genuine issues of facts to be tried, the
Rules of Court allows a party to obtain immediate relief by way of summary judgment.
That is, when the facts are not in dispute, the court is allowed to decide the case
summarily by applying the law to the material facts. Conversely, where the pleadings
tender a genuine issue, summary judgment is not proper. A genuine issue is such fact
which requires the presentation of evidence as distinguished from a sham, fictitious,
contrived or false claim.[41]

Here, we find the existence of genuine issues which removes the case from the
coverage of summary judgment. The variance in the allegations of the parties in their
pleadings is evident.

Petitioner anchors his complaint for sum of money and/or judicial foreclosure on the
alleged real estate mortgage over the subject property allegedly entered into by
Comandante in behalf of her parents to secure payment of a loan amounting to
P1,118,228.00. To support this claim, petitioner attached to his complaint (1) the SPA
alleged to have been executed by the Diazes; (2) the Real Estate Mortgage Contract
pertaining to the amount of P1,118,228.00; and, (3) a Promissory Note.

Comandante, in her Answer to petitioner's Amended Complaint, assailed the validity and
due execution of the abovementioned documents. She asserted that the same were not
duly, knowingly and validly executed by her and that it was petitioner who prepared all
of them. Also, although she admitted owing petitioner, same was not an absolute
admission as she limited herself to an obligation amounting only to P600,000.00
inclusive of charges and interests. She likewise claimed that such obligation is her
personal obligation and not of her parents.

The Diazes, for their part, also denied that they executed the SPA authorizing their
daughter to mortgage their property to petitioner as well as having any obligation to the
latter.

Clearly, there are genuine issues in this case which require the presentation of
evidence. For one, it is necessary to ascertain in a full blown trial the validity and due
execution of the SPA, the Real Estate Mortgage and the Promissory Notes because the
determination of the following equally significant questions depends on them, to wit: (1)
Are the Diazes obligated to petitioner or is the obligation a purely personal obligation of
Comandante? and, (2) Is the sum of P1,118,228.00 as shown in the Real Estate
Mortgage and the Promissory Note, the amount which is really due the petitioner?

To stress, trial courts have limited authority to render summary judgments and may do
so only when there is clearly no genuine issue as to any material fact. When the facts
as pleaded by the parties are disputed or contested, proceedings for summary judgment
cannot take the place of trial. [42] From the foregoing, it is apparent that the trial court
should have refrained from issuing the summary judgment but instead proceeded to
conduct a full blown trial of the case. In view of this, the present case should be
remanded to the trial court for further proceedings and proper disposition according to
the rudiments of a regular trial on the merits and not through an abbreviated termination
of the case by summary judgment.

WHEREFORE, the petition is DENIED. The assailed Decision of the Court of Appeals
dated December 12, 2003 insofar as it excluded the respondents Spouses Bienvenido
Pangan and Elizabeth Pangan from among those solidarily liable to petitioner Atty.
Pedro M. Ferrer, is AFFIRMED. The inscription of the adverse claim of petitioner Atty.
Pedro M. Ferrer on T.C.T. No. N-209049 is hereby ordered CANCELLED. Insofar as its
other aspects are concerned, the assailed Decision is SET ASIDE and VACATED. The
case is REMANDED to the Regional Trial Court of Quezon City, Branch 224 for further
proceedings in accordance with this Decision.

SO ORDERED.

[18]
ART. 1347. All things which are not outside the commerce of men, including future
things, may be the object of a contract. All rights which are not intransmissible may also
be the object of contracts.

No contract may be entered into upon future inheritance except in cases expressly
authorized by law.

All services which are not contrary to law, morals, good customs, public order or public
policy may likewise be the object of a contract.
 FIRST DIVISION
[ G.R. No. 182984, February 10, 2009 ]
MARIANO NOCOM, PETITIONER, VS. OSCAR CAMERINO, EFREN CAMERINO,
CORNELIO MANTILE AND MILDRED DEL ROSARIO, IN HER CAPACITY AS LEGAL
HEIR AND REPRESENTATIVE OF NOLASCO DEL ROSARIO, RESPONDENTS.

DECISION
AZCUNA, J.:
This is a petition for review on certiorari seeking to reverse and set aside the Decision
dated February 14, 2008 of the Court of Appeals (CA) which affirmed the Joint Order
dated June 9, 2005 and Summary Judgment dated June 15, 2006 of the Regional Trial
Court (RTC) of Muntinlupa City, Branch 203 and dismissed petitioner's appeal under
Rule 41 of the Rules of Court for lack of jurisdiction and its Resolution dated May 23,
2008 which denied petitioner's motion for reconsideration.

The present case is an offshoot of the prior case, G.R. No. 161029, entitled "Springsun
Management Systems Corporation v. Oscar Camerino, Efren Camerino, Cornelio
Mantile, Nolasco Del Rosario, and Domingo Enriquez," which was promulgated on
January 19, 2005 (449 SCRA 65) and became final and executory on May 4, 2005 as
recorded in the Book of Entries of Judgment.

The factual antecedents are as follows:

G.R. No. 161029:

Respondent Oscar Camerino and respondents-intervenors Efren Camerino, Cornelio

Mantile, the deceased Nolasco Del Rosario, represented by Mildred Del Rosario, and
Domingo Enriquez were the tenants who were tilling on the parcels of land planted to
rice and corn previously owned by Victoria Homes, Inc. covered by Transfer Certificate
of Title (TCT) Nos. 289237, now S-6135 (109,451 square meters); S-72244 (73,849
square meters); and 289236, now S-35855 (109,452 square meters). On February 9,
1983, without notifying the respondents, Victoria Homes, Inc. sold the said lots to
Springsun Management Systems Corporation (SMSC) for P9,790,612. The three deeds
of sale were duly registered with the Registry of Deeds of Rizal and new titles were
issued in the name of SMSC.

Subsequently, SMSC mortgaged to Banco Filipino (BF) the said lots as collaterals for its
loans amounting to P11,545,000. As SMSC failed to pay the loans due, BF
extrajudicially foreclosed the mortgage and, later, was adjudged the highest bidder. On
May 10, 2000, SMSC redeemed the lots from BF. Earlier, on March 7, 1995,
respondents filed a complaint against SMSC and BF for "Prohibition/Certiorari,
Reconveyance/Redemption, Damages, Injunction with Preliminary Injunction and
Temporary Restraining Order," docketed as Civil Case No. 95-020, with the RTC of
Muntinlupa City, Branch 256.

On January 25, 2002, the RTC of Muntinlupa City, Branch 256, found respondents to be
tenants who have been tilling on the subject land planted to rice and corn since 1967
and, thus, authorized them to redeem the subject lots. The dispositive portion of the
decision states:
WHEREFORE, judgment is hereby as follows:
1. Declaring that plaintiffs are entitled (sic) to redeem, and ordering the defendant
Springsun Management Systems Corporation (now petitioner) to allow plaintiffs to
redeem the landholdings in question within 180 days from finality of this decision at
the total price of P9,790,612.00; upon full payment of the redemption price, the
defendant Springsun Management Systems Corporation is ordered to deliver
plaintiffs the titles and the corresponding Deed of Redemption so that the titles to the
properties in litigation can be transferred in the name of the plaintiffs;
2. Declaring plaintiffs entitled to possession, and ordering the defendant Springsun
Management Systems Corporation and all persons claiming under it to vacate the
lands in question and to surrender the same to the plaintiffs;

3. Dismissing the case against Banco Filipino Savings and Mortgage Bank;

4. Ordering the defendant Springsun Management Systems Corporation to pay

plaintiffs the sum of P200,000.00 as attorney's fees, plus costs.
SO ORDERED.[1]
On September 23, 2003, the CA, in CA-G.R. SP No. 72475, affirmed with modification
the RTC by declaring the respondents to be tenants or agricultural lessees on the
disputed lots and, thus, entitled to exercise their right of redemption, but deleted the
award of P200,000 attorney's fees for lack of legal basis.

On January 19, 2005, this Court, in G.R. No. 161029, affirmed the CA and reiterated
that being agricultural tenants of Victoria Homes, Inc. that had sold the lots to SMSC
without notifying them, respondents had the right to redeem the subject properties from
SMSC.

This Court denied SMSC's motions for reconsideration and for leave to file a second
motion for reconsideration and, on May 4, 2005, an Entry of Judgment was made.

The present G.R. No. 182984:

On December 3, 2003, petitioner Mariano Nocom gave the respondents several

Philtrust Bank Manager's Checks amounting to P500,000 each, which the latter
encashed, representing the price of their "inchoate and contingent rights" over the
subject lots which they sold to him.

On December 18, 2003, respondents, with the marital consent of their wives, executed
an "Irrevocable Power of Attorney" which was notarized by their counsel Atty. Arturo S.
Santos. Thus,
IRREVOCABLE POWER OF
ATTORNEY[2]

KNOW ALL MEN BY THESE PRESENTS:

WE, OSCAR CAMERINO, of legal age, Filipino, married to Teresita L. Magbanua:
EFREN CAMERINO, of legal age, Filipino, married to Susana Camerino, CORNELIO
MANTILE, of legal age, Filipino, married to Maria Fe Alon, NOLASCO DEL ROSARIO,
of legal age, Filipino, married to Mildred Joplo, and DOMINGO ENRIQUEZ, of legal
age, Filipino, married to Dionicia Enriquez whose residences are stated under our
respective names, hereby APPOINT, NAME, and CONSTITUTE MARIANO NOCOM, of
legal age, Filipino, married to Anacoreta Nocom and with office at No. 2315 Aurora Blvd,
Pasay City, in an irrevocable manner, coupled with interest, for us and in our stead, to
do all or any of the following acts and deeds:
1. To sell, assign, transfer, dispose of, mortgage and alienate the properties
described in TCT Nos. 120542, 120541 and 123872 of the Register of Deeds of
Muntinlupa City, currently in the name of Springsun Management Systems
Corporation, consisting of 292,752 square meters subject matter of Civil Case No.
95-020 of the Regional Trial Court of Muntinlupa City, Branch 256. The said court, in
its decision dated January 25, 2002 which was affirmed with modification of the Court
of Appeals in its decision dated September 24, 2003 in CA-G.R. SP No. 72475,
adjudged that we are legally entitled to redeem the lands from Springsun
Management Systems Corporation;

2. To comply with the said decision by paying the redemption price to Springsun
Management Systems Corporation and/or to the court, and upon such payment, to
secure execution of the judgment so that the titles can be issued in the name of our
attorney-in-fact;

3. To accept and receive for his exclusive benefit all the proceeds which may be
derived from the sale, mortgage, transfer or deposition thereof;

4. To sign and execute all the necessary papers, deed and documents that may be
necessary or the accomplishment of purposes of the Deed of Assignment, and to
issue receipts and proper discharges therefor;

5. To negotiate, deal and transact with all the persons and entities involved in Civil
Case No. 95-020, RTC, Muntinlupa City, Branch 256, with full power and authority to
compromise with them;
6. To procure all documents and papers in government agencies relative to the said
properties and case in court; and

7. To procure the necessary transfer certificate of titles in his name as the absolute
owner of said properties.

GIVING AND GRANTING full power and authority to our said attorney-in-fact to do all
things requisite and necessary with legal effects as if done by us when present.
IN WITNESS WHEREOF, We have hereunto affixed [our] signatures this 18 th day of
December, 2003.

(Sgd.) OSCAR CAMERINO(Sgd.) EFREN CAMERINO

Principal Principal
Sparrow St., Diamond ParkSan Antonio, San Pedro
Victoria Homes, TunasanLaguna
Muntinlupa City

(Sgd.) CORNELIO MANTILE (Sgd.) NOLASCO DEL ROSARIO

Principal Principal
Victoria Ave., TunasanEsmido St., Diamond Park
Muntinlupa City Victoria Homes, Muntinlupa City

(Sgd.) DOMINGO ENRIQUEZ

PrincipalTunasan Proper, Arandia
Tunasan, Muntinlupa City

WITH OUR MARITAL CONSENT:

(Sgd.) TERESITA MAGBANUA(Sgd.) SUSANA CAMERINO

Wife of Oscar Camerino Wife of Efren Camerino

(Sgd.) MARIA FE ALON ALON(Sgd.) MILDRED JOPLO

Wife of Cornelio Mantile Wife of Nolasco del Rosario

(Sgd.) DIONICIA ENRIQUEZ

Wife of Domingo Enriquez

CONFORME:
(Sgd.) MARIANO NOCOM
Attorney-in-Fact
Meanwhile, on July 21, 2005, the respondents, in Civil Case No. 95-020 of the RTC of
Muntinlupa City, Branch 256, filed a Motion for Execution with Prayer to Order the
Register of Deeds of Muntinlupa City to divest SMSC of title to the subject lots and have
the same vested on them. As SMSC refused to accept the redemption amount of
P9,790,612 plus P147,059.18 as commission given by the petitioner, the respondents
deposited, on August 4, 2005, the amounts of P9,790,612, P73,529.59, and
P73,529.59, duly evidenced by official receipts, with the RTC of Muntinlupa City, Branch
256. The RTC of Muntinlupa City, Branch 256 granted respondents' motion for
execution and, consequently, TCT Nos. 120542, 120541 and 123872 in the name of
SMSC were cancelled and TCT Nos. 15895, 15896 and 15897 were issued in the
names of the respondents. It also ordered that the "Irrevocable Power of Attorney,"
executed on December 18, 2003 by respondents in favor of petitioner, be annotated in
the memorandum of encumbrances of TCT Nos. 15895, 15896, and 15897.

On October 24, 2005, respondent Oscar Camerino filed a complaint against petitioner,
captioned as "Petition to Revoke Power of Attorney," docketed as Civil Case No. 05-
172, in the RTC of Muntinlupa City, Branch 203, seeking to annul the "Irrevocable
Power of Attorney" dated December 18, 2003, the turnover of the titles to the properties
in his favor, and the payment of attorney's fees and other legal fees.

Respondent Oscar Camerino's complaint alleged that he and co-respondents were

asked by their counsel, Atty. Arturo S. Santos, to sign a document with the
representation that it was urgently needed in the legal proceedings against SMSC; that
the contents of the said document were not explained to him; that in the first week of
September 2005, he learned that TCT Nos. 15895, 15896 and 15897 were issued in
their favor by the Register of Deeds; that he discovered that the annotation of the
"Irrevocable Power of Attorney" on the said titles was pursuant to the Order of the RTC
of Muntinlupa City, Branch 256 dated August 31, 2005; that the "Irrevocable Power of
Attorney" turned out to be the same document which Atty. Santos required him and the
other respondents to sign on December 18, 2003; that despite repeated demands,
petitioner refused to surrender the owner's duplicate copies of the said titles; that
petitioner had retained ownership over the subject lots; that he had no intention of
naming, appointing, or constituting anyone, including petitioner, to sell, assign, dispose,
or encumber the subject parcels of land; and that he executed an Affidavit of Adverse
Claim which was annotated on the titles involving the subject lots.

In his Answer with Counterclaim, petitioner countered that on September 3, 2003, Atty.
Santos informed him of the desire of his clients, herein respondents, to sell and assign
to him their "inchoate and contingent rights and interests" over the subject lots because
they were in dire need of money and could no longer wait until the termination of the
proceedings as SMSC would probably appeal the CA's Decision to this Court; that they
did not have the amount of P9,790,612 needed to redeem the subject lots; that on
December 18, 2003, he decided to buy the contingent rights of the respondents and
paid each of them P500,000 or a total of P2,500,000 as evidenced by Philtrust Bank
Manager's Check Nos. MV 0002060 (for respondent Oscar Camerino), MV 0002061 (for
respondent Efren Camerino), MV 0002062 (for respondent Cornelio Mantile), MV
0002063 (for Nolasco Del Rosario), and MV 0002064 (for Domingo Enriquez) which
they personally encashed on December 19, 2003; that on August 4, 2005, he also paid
the amount of P147,059.18 as commission; that simultaneous with the aforesaid
payment, respondents and their spouses voluntarily signed the "Irrevocable Power of
Attorney" dated December 18, 2003; that being coupled with interest, the "Irrevocable
Power of Attorney" cannot be revoked or cancelled at will by any of the parties; and that
having received just and reasonable compensation for their contingent rights,
respondents had no cause of action or legal right over the subject lots. Petitioner prayed
for the dismissal of the complaint and the payment of P1,000,000 moral damages,
P500,000 exemplary damages, and P500,000 attorney's fees plus costs.

On January 17, 2006, petitioner filed a Motion for Preliminary Hearing on his special
and/or affirmative defense that respondent Oscar Camerino had no cause of action or
legal right over the subject lots because the latter and his wife received the proceeds of
the Philtrust Bank Manager's check in the sum of P500,000 which they personally
encashed on December 19, 2003 and that being coupled with interest, the "Irrevocable
Power of Attorney" cannot be revoked or cancelled at will by any of the parties.

On January 26, 2006, respondents Efren Camerino, Cornelio Mantile and Mildred Del
Rosario, in her capacity as legal heir and representative of Nolasco Del Rosario, filed a
Motion for Leave of Court to Admit the Complaint-in-Intervention with the attached
Complaint-in-Intervention, dated January 26, 2006, seeking the nullification of the
"Irrevocable Power of Attorney" for being contrary to law and public policy and the
annotation of the "Irrevocable Power of Attorney" on the titles of the subject lots with
prayer that petitioner be ordered to deliver to them the copies of the owner's duplicate
certificate of TCT Nos. 15895, 15896, and 15897. Their Complaint-in-Intervention
alleged that they had a legal interest in the subject matter of the controversy and would
either be directly injured or benefited by the judgment in Civil Case No. 05-172; that
they were co-signatories or co-grantors of respondent Oscar Camerino in the
"Irrevocable Power of Attorney" they executed in favor of the petitioner; that their
consent was vitiated by fraud, misrepresentation, machination, mistake and undue
influence perpetrated by their own counsel, Atty. Santos, and petitioner; that sometime
in December 2003, Atty. Santos called for a meeting which was attended by petitioner
and one Judge Alberto Lerma where petitioner gave them checks in the amount of
P500,000 each as "Christmas gifts"; and that the "Irrevocable Power of Attorney" was
void ab initio as the same was contrary to law and public policy and for being a
champertous contract.

On January 30, 2006, respondent Oscar Camerino filed a Motion for Summary
Judgment alleging that since the existence of the "Irrevocable Power of Attorney" was
admitted by petitioner, the only issue to be resolved was whether the said document
was coupled with interest and whether it was revocable in contemplation of law and
jurisprudence; that Summary Judgment was proper because petitioner did not raise any
issue relevant to the contents of the "Irrevocable Power of Attorney"; and that in an
Affidavit dated January 23, 2005, he admitted receipt of a check amounting to
P500,000.00 which was given to him by petitioner as financial assistance.

On February 3, 2006, petitioner opposed respondent Oscar Camerino's motion on the

ground that there were factual issues that required the presentation of evidence.

On February 14, 2006, petitioner filed a Motion to Dismiss the complaint on the ground
that the petition for the cancellation of the "Irrevocable Power of Attorney" was actually
an action to recover the titles and ownership over the properties; that since respondent
Oscar Camerino alleged in paragraph 29 of his Motion for Summary Judgment that the
assessed value of the subject lots amounted to P600,000,000, the case partook of the
nature of a real action and, thus, the docket fees of P3,929 was insufficient; and that
due to insufficient docket fee, his complaint should be dismissed as the RTC was not
vested with jurisdiction over the subject matter of the complaint.
On February 22, 2006, respondent Oscar Camerino opposed petitioner's motion for
preliminary hearing of special and/or affirmative defenses alleging that it was dilatory
and that he had a cause of action.

On March 9, 2006, respondent Oscar Camerino filed his Reply to petitioner's Opposition
to the Motion for Summary Judgment claiming that the determinative issue of whether
or not the amount of P500,000 given to him by petitioner rendered the power of attorney
irrevocable can be determined from the allegations in the pleadings and affidavits on
record without the need of introduction of evidence.

On May 5, 2006, respondent Oscar Camerino filed an Opposition to petitioner's Motion

to Dismiss stating that the instant case was a personal action for the revocation of the
"Irrevocable Power of Attorney" and not for the recovery of real property and, thus, the
correct docket fees were paid.

On June 9, 2006, the RTC of Muntinlupa City, Branch 203 admitted the Complaint-in-
Intervention because the movants-intervenors ([herein respondents] Efren Camerino,
Cornelio Mantile, and Mildred Del Rosario as legal heir of Nolasco Del Rosario) "have
legal interest in the subject properties in litigation and in the success of the petitioner
[herein respondent Oscar Camerino], who was precisely their co-plaintiff in Civil Case
No. 95-020, entitled `Oscar Camerino, et al. v. Springsun Management Systems
Corporation et al.,' where they are the prevailing parties against the defendant therein
[SMSC], with respect to the same properties, subject of this case, in a decision
rendered by Branch 256 of this Court." The RTC, Branch 203, also granted the Motion
for Summary Judgment because "a meticulous scrutiny of the material facts admitted in
the pleadings of the parties reveals that there is really no genuine issue of fact
presented therein that needs to be tried to enable the court to arrive at a judicious
resolution of a matter of law if the issues presented by the pleadings are not genuine
issues as to any material fact but are patently unsubstantial issues that do not require a
hearing on the merits." Thus,
The instant Motion to Dismiss by the respondent is therefore DENIED, PROVIDED, the
petitioner should pay the balance of the docket fees remaining unpaid, if any, pursuant
to Rule 141, Section 7 of the Rules of Court, as amended by A.M. No. 04-2-04-SC
within the applicable prescriptive or reglementary period.

The "Motion for Intervention" timely filed by intervenors Efren Camerino, Cornelio
Mantile and Mildred Del Rosario, in her capacity as legal heir of Nolasco Del Rosario,
as opposed by the respondent, is hereby GRANTED.

xxx

Petitioner's Motion for Summary Judgment is therefore GRANTED.

Consequently, respondent's Motion for Preliminary Hearing on his Special and

Affirmative Defenses is deemed moot and academic.

SO ORDERED.[3]
On June 15, 2006, the RTC of Muntinlupa City, Branch 203 rendered a Summary
Judgment annulling the "Irrevocable Power of Attorney" for being contrary to law and
public policy. The pertinent portions of the trial court's decision state that:
Irrespective of whether the Power of Attorney in question is coupled with interest, or not,
the same can be revoked or annulled, firstly, because it is contrary to law and secondly
it is against public policy.

As aptly pointed out by the intervenors, the assailed Special Power of Attorney which
under its ultimate paragraph among others, authorizes the respondent (Nocom) `to
procure the necessary Transfer Certificate of Title in his name, as the absolute owner of
the said properties is a disguised conveyance or assignment of the signatories' statutory
rights of redemption and therefore prohibited under the provisions of Republic Act No.
3844, Sec. 62 which provides:

Sec. 62. Limitation on Land Rights.

Except in case of heredity succession by one heir, landholdings acquired under this
Code may not be resold, mortgaged, encumbered, or transferred until after the lapse of
ten years from the date of full payment and acquisition and after such ten year period,
any transfer, sale or disposition may be made only in favor of persons qualified to
acquire economic family-size farm units in accordance with the provisions of this Code
xxx. (underlining supplied)

The assailed "power of attorney" which was executed on December 18, 2003 is void ab
initio for being contrary to the express prohibition or spirit of the aforesaid law or the
declared state and public policy on the qualification of the beneficiaries of the agrarian
reform program. It bears stressing that the redemption price of the subject lots was paid
only on August 4, 2005 or 1 year, 8 months and 14 days after the execution of the
assailed power of attorney.

If pursuant to the spirit of the Agrarian Reform Law, the tenant cannot even sell or
dispose of his landholding within ten (10) years after he already acquired the same or
even thereafter to persons not qualified to acquire economic size farm units in
accordance with the provisions of the Agrarian Reform Code, with more reason should
the tenant not be allowed to alienate or sell his landholding before he actually acquires
the same.

The right of redemption of the petitioner and his co-plaintiffs in Civil Case No. 95-020 as
upheld by the Court of Appeals and the Supreme Court is founded on a piece of social
legislation known as Agrarian Reform Code.

Enunciated in the case of Association of Small Landowners in the Philippines, et al., vs.
Hon. Secretary of Agrarian Reform (G.R. No. 78742, July 14, 1989) is the policy of the
State on agrarian reform legislation. Said State policy emphasizes the "Land for the
Landless" slogan that underscores the acute imbalance in the distribution of land among
the people.

Furthermore, the assailed Special Power of Attorney is a champertous contract and

therefore void for being against public policy. The pleadings of the parties show that the
same special power of attorney was executed by the petitioner, et al. through the
intercession of Atty. Arturo Santos and at the behest of the respondent. In his own
answer to the instant petition which he is estopped to deny, the respondent alleges that
the actual agreement was for the respondent to pay the expenses of the proceedings to
enforce the rights of the petitioner and his co-plaintiffs in Civil Case No. 95-020 without
any provision for reimbursement. In other words, the respondents, through the
intercession of Atty. Santos, petitioner's attorney, had agreed to carry on with the action
for the petitioner et al. at his own expense in consideration of procuring for himself the
title to the lots in question as the absolute owner thereof, with the respondent paying the
redemption price of said lots, as well as separate amounts of Five Hundred Thousand
(P500,000.00) to each of the five (5) co-plaintiffs in Civil Case No. 95-020, including
herein petitioner, or a total sum of Two Million Five Hundred Thousand Pesos
(P2,500,000.00).

Under the premises, the aforesaid contract brokered by Atty. Arturo Santos has all really
the earmarks of a champertous contract which is against public policy as it violates the
fiduciary relations between the lawyer and his client, whose weakness or disadvantage
is being exploited by the former. In other words, the situation created under the given
premises is a clear circumvention of the prohibition against the execution of
champertous contracts between a lawyer and a client.
A champertous contract is defined as a contract between a stranger and a party to a
lawsuit, whereby the stranger pursues the party's claim in consideration of receiving part
or any of the proceeds recovered under the judgment; a bargain by a stranger with a
party to a suit, by which such third person undertakes to carry on the litigation at his
own cost and risk, in consideration of receiving, if successful, a part of the proceeds or
subject sought to be recovered. (Blacks Dictionary; Schnabel v. Taft Broadcasting Co.,
Inc. Mo. App. 525 S.W. 2d 819, 823). An Agreement whereby the attorney agrees to pay
expenses of proceedings to enforce the client's rights is champertous. [JBP Holding
Corporation v. U.S. 166 F. Supp. 324 (1958)]. Such agreements are against public
policy especially where as in this case, the attorney has agreed to carry on the action at
its own expense in consideration of some bargain to have part of the thing in dispute.
[See Sampliner v. Motion Pictures Patents Co., et al., 225 F. 242 (1918). The execution
of these contracts violates the fiduciary relationship between the lawyer and his client,
for which the former must incur administrative sanction.
The intention of the law in prohibiting this kind of contract is to prevent a lawyer from
acquiring an interest in the subject of the litigation and to avoid a conflict of interest
between him and his client.

In the instant case, it seems that Atty. Santos and the respondent colluded and
conspired to circumvent these prohibitions. Considering therefore that Atty. Santos, then
petitioner's counsel, brokered the alleged deal between petitioners et al. and the
respondent with respect to the lands subject of litigation in Civil Case No. 95-020, the
deal contracted is illegal for being a champertous agreement and therefore it cannot be
enforced.

Be that as it may, granting the agency established in the assailed Power of Attorney is
coupled with interest, the petitioner and his co-plaintiffs in Civil Case No. 95-020, who
are the present intervenors, are not revoking the Power of Attorney at will but have
precisely gone to court and filed the instant petition for its cancellation or revocation.
What is prohibited by law and jurisprudence is the arbitrary and whimsical revocation of
a power of attorney or agency coupled with interest, at will by a party, without court
declaration.

WHEREFORE, judgment is hereby rendered as follows:

(1) Nullifying the "Irrevocable Power of Attorney" in question dated December 18, 2003,
signed by the petitioner [herein respondent Oscar Camerino] and his co-plaintiffs [herein
respondents who were the movant-intervenors] in Civil Case No. 95-020 in favor of the
respondent [herein petitioner];

(2) Ordering the respondent to turnover the Certificates of Title Nos. 15895, 15896 and
15897 covering the lots, the subject of this case, to the petitioner and the intervenors;

(3) Ordering the respondent to pay the petitioner attorney's fees and all other legal fees
incurred by the latter in connection with this case;

(4) Ordering the petitioner and the intervenors to return to the respondent the amount of
P7,790,612 paid by the latter as redemption price of the lots in question plus
commission of P147,049.18; and

(5) Ordering the petitioner Oscar Camerino and the intervenors Efren Camerino,
Cornelio Mantile, Nolasco Del Rosario or his heirs and Domingo Enriquez, who are
petitioner's co-plaintiffs in Civil Case No. 95-020, to return to the respondent the total
amount of P2,500,000.00 or P500,000.00 from each of them paid by the respondent to
them under Philtrust Bank Check Nos. MV 0002060, MV 0002061, MV 0002062, MV
0002063, and MV 0002064 which checks were encashed by them with the drawee
bank.

SO ORDERED.[4]
On July 3, 2006 petitioner filed an Omnibus Motion for Reconsideration seeking to set
aside the trial court's Joint Order dated June 9, 2005 and Summary Judgment dated
June 15, 2006 which was opposed by the respondents.

On July 4, 2006, respondents filed a Motion for Execution Pending Final

Decision/Appeal which was opposed by petitioner.

On August 14, 2006, the trial court issued an order denying petitioner's Omnibus Motion
for Reconsideration. Within the reglementary period, petitioner filed a Notice of Appeal
and paid the corresponding appeal docket fees.

On February 14, 2008, the CA affirmed the trial court's Joint Order dated June 9, 2006
and Summary Judgment dated June 15, 2006 and dismissed the petitioner's appeal for
lack of jurisdiction. The CA ruled that as the RTC rendered the assailed Summary
Judgment based on the pleadings and documents on record, without any trial or
reception of evidence, the same did not involve factual matters. The CA found the
issues raised by the petitioner in his appeal to be questions of law, to wit: (a) whether
Summary Judgment was proper under the admitted facts and circumstances obtaining
in the present case; (b) whether undue haste attended the rendition of the Summary
Judgment; (c) whether the Summary Judgment was valid for failure of the RTC to
implead an indispensable party; (d) whether the RTC erred in allowing the intervention
of respondents Efren Camerino, Cornelio Mantile, and Mildred Del Rosario; and (e)
whether the RTC erred in taking cognizance of the case despite nonpayment of the
required docket fees. The CA concluded that since the issues involved questions of law,
the proper mode of appeal should have been through a petition for review
on certiorari under Rule 45 of the Rules of Court directly to this Court and not through
an ordinary appeal under Rule 41 thereof and, thus, petitioner's appeal to the CA should
be dismissed outright pursuant to this Court's Circular No. 2-90, dated March 9, 1990,
mandating the dismissal of appeals involving pure questions of law erroneously brought
to the CA.

In its Resolution of May 23, 2008, the CA denied petitioner's Motion for Reconsideration
dated February 26, 2008.

Hence, this present petition.

Petitioner raises the following issues:

I

WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED AN

ERROR IN DISMISSING PETITIONER'S APPEAL.
II

WHETHER OR NOT THE COURT OF APPEALS ERRED IN UPHOLDING THE

SUMMARY JUDGMENT OF THE TRIAL COURT DESPITE THE GENUINE ISSUE OF
FACT RAISED IN PETITIONER'S ANSWER.

III

WHETHER OR NOT THE COURT OF APPEALS IS CORRECT IN NOT VOIDING THE

ASSAILED SUMMARY JUDGMENT FOR FAILURE OF RESPONDENTS TO IMPLEAD
AN INDISPENSABLE PARTY.

IV

WHETHER OR NOT THE COURT OF APPEALS ERRED IN NOT DISMISSING CIVIL

CASE NO. 05-172 FOR NON-PAYMENT OF THE CORRECT DOCKET FEES.
Petitioner contends that the CA erred in dismissing his appeal as the case involves
questions of fact; that summary judgment was not proper as there were genuine issues
of fact raised in his Answer; that respondents failed to implead their lawyer, Atty. Arturo
S. Santos, as an indispensable party-defendant, who, according to them, allegedly
connived with him in making them sign the "Irrevocable Power of Attorney" in his favor;
and that since the case partakes of the nature of an action to recover ownership and
titles to the properties, respondents' complaint should be dismissed for failure to pay the
correct docket fees.

Respondent Oscar Camerino argues that the sole issue to be resolved pertains to the
legal issue of whether the Special Power of Attorney (SPA) denominated as irrevocable
may be revoked; that three material facts have been established, i.e., that the SPA was
executed, that Atty. Santos facilitated the signing and execution of the SPA, and that
petitioner paid P500,000 to each of the respondents in consideration for the signing of
the SPA and, thus, summary judgment was proper; and that pure questions of law are
not proper in an ordinary appeal under Rule 41 of the Rules.

Respondents Efren Camerino, Cornelio Mantile, and Mildred Del Rosario, in her
capacity as legal heir of Nolasco Del Rosario, aver that petitioner's petition is insufficient
in form, i.e., due to defective verification as the word "personal" was not stated when
referring to "personal knowledge," and in substance, i.e., there is no genuine issue to be
resolved as the factual allegations of the petitioner are unsubstantial and that Atty.
Santos is not an indispensable party to the case.

The petition has merit.

In dismissing petitioner's appeal, the CA erroneously relied on the rationale that the
petitioner's appeal raised questions of law and, therefore, it had no recourse but to
dismiss the same for lack of jurisdiction. The summary judgment rendered by the trial
court has the effect of an adjudication on the merits and, thus, the petitioner, being the
aggrieved party, correctly appealed the adverse decision of the RTC to the CA by filing a
notice of appeal coupled with the appellant's brief under Rule 41 of the Rules.

Contrary to the findings of the RTC and the CA, the present case involves certain
factual issues which remove it from the coverage of a summary judgment.

Under Section 1, Rule 35 of the Rules of Court, a party seeking to recover upon a claim,
counterclaim, or cross-claim or to obtain a declaratory relief may, at any time after the
pleading in answer thereto has been served, move with supporting affidavits,
depositions or admissions for a summary judgment in his favor upon all or any part
thereof.

Summary judgment is a procedural device resorted to in order to avoid long drawn out
litigations and useless delays. When the pleadings on file show that there are no
genuine issues of fact to be tried, the Rules allow a party to obtain immediate relief by
way of summary judgment, that is, when the facts are not in dispute, the court is allowed
to decide the case summarily by applying the law to the material facts. Conversely,
where the pleadings tender a genuine issue, summary judgment is not proper. A
"genuine issue" is such issue of fact which requires the presentation of evidence as
distinguished from a sham, fictitious, contrived or false claim. Section 3 of the said rule
provides two (2) requisites for summary judgment to be proper: (1) there must be no
genuine issue as to any material fact, except for the amount of damages; and (2) the
party presenting the motion for summary judgment must be entitled to a judgment as a
matter of law.[5] A summary judgment is permitted only if there is no genuine issue as to
any material fact and a moving party is entitled to a judgment as a matter of law. A
summary judgment is proper if, while the pleadings on their face appear to raise issues,
the affidavits, depositions, and admissions presented by the moving party show that
such issues are not genuine.[6]

The present case should not be decided via a summary judgment. Summary judgment
is not warranted when there are genuine issues which call for a full blown trial. The
party who moves for summary judgment has the burden of demonstrating clearly the
absence of any genuine issue of fact, or that the issue posed in the complaint is patently
unsubstantial so as not to constitute a genuine issue for trial. Trial courts have limited
authority to render summary judgments and may do so only when there is clearly no
genuine issue as to any material fact. When the facts as pleaded by the parties are
disputed or contested, proceedings for summary judgment cannot take the place of trial.
[7]

Summary judgment is generally based on the facts proven summarily by affidavits,

depositions, pleadings, or admissions of the parties. In this present case, while both
parties acknowledge or admit the existence of the "Irrevocable Power of Attorney," the
variance in the allegations in the pleadings of the petitioner vis--vis that of the
respondents require the presentation of evidence on the issue of the validity of the
"Irrevocable Power of Attorney" to determine whether its execution was attended by the
vices of consent and whether the respondents and their spouses did not freely and
voluntarily execute the same. In his Answer with Counterclaim, petitioner denied the
material allegations of respondent Oscar Camerino's complaint for being false and
baseless as respondents were informed that the document they signed was the
"Irrevocable Power of Attorney" in his favor and that they had received the full
consideration of the transaction and, thus, had no legal right over the three parcels of
land. Indeed, the presentation of evidence is necessary to determine the validity and
legality of the "Irrevocable Power of Attorney," dated December 18, 2003, executed by
the respondents in favor of the petitioner. From said main factual issue, other relevant
issues spring therefrom, to wit: whether the said "Irrevocable Power of Attorney" was
coupled with interest; whether it had been obtained through fraud, deceit, and
misrepresentation or other vices of consent; whether the five (5) Philtrust Bank
Manager's checks given by petitioner to the respondents amounting to P500,000 each
were in consideration of the "inchoate and contingent rights" of the respondents in favor
of the petitioner; whether Atty. Santos connived with petitioner in causing the
preparation of the said document and, therefore, should be impleaded as party-
defendant together with the petitioner; whether respondents deposited the amount of
P9,790,612.00 plus P147,059.18 with the RTC of Muntinlupa City, Branch 256; and
whether the sale of respondents' inchoate and contingent rights amounted to a
champertous contract.

The incongruence and disparity in the material allegations of both parties have been
evident. Respondent Oscar Camerino alleged in his complaint that he and his co-
respondents were required by their counsel, Atty. Santos, to sign a document on the
representation that it was urgently needed in the legal proceedings against SMSC which
turned out to be the "Irrevocable Power of Attorney"; but petitioner disproved the vitiated
consent on the part of the respondents as they knew fully well that the document they
signed, voluntarily and intelligently, on December 18, 2003, was the said "Irrevocable
Power of Attorney." Respondent Oscar Camerino alleged in his complaint that he has no
intention of naming, appointing or constituting anyone, including the petitioner, to sell,
assign, dispose or encumber the lots in question; but petitioner maintained that
respondent Oscar Camerino agreed to sell and assign to him his "inchoate and
contingent rights and interests" over the subject lot for and in consideration of the sum
of P500,000, plus the redemption price of P9,790,612. Respondents claimed that the
amount they received was grossly disproportionate to the value of the subject land; but
petitioner countered that the respondents did not have the amount of P9,790,612
needed to redeem the subject lots, so he decided to buy their contingent rights and paid
each of them P500,000 or a total of P2,500,000 as evidenced by five (5) Philtrust Bank
Manager's Check which they personally encashed on December 19, 2003, that he also
paid the amount of P147,059.18 as commission on August 4, 2005, that simultaneous
with the aforesaid payment, respondents and their spouses voluntarily signed the
"Irrevocable Power of Attorney" dated December 18, 2003, and that being coupled with
interest, the "Irrevocable Power of Attorney" cannot be revoked at will by any of the
parties.

Respondents maintain that they were deceived into executing the "Irrevocable Power of
Attorney" in favor of the petitioner which was done through the maneuverings of their
own lawyer, Atty. Santos, who, according to them, had connived with petitioner in order
to effect the fraudulent transaction. In this regard, respondents should have impleaded
Atty. Santos as an indispensable party-defendant early on when the case was still with
the RTC, but they failed to do so. However, their procedural lapse did not constitute a
sufficient ground for the dismissal of Civil Case No. 05-172.
In Domingo v. Scheer,[8] the Court explained that the non-joinder of an indispensable
party is not a ground for the dismissal of an action. Section 7, Rule 3 of the Rules, as
amended, requires indispensable parties to be joined as plaintiffs or defendants. The
joinder of indispensable parties is mandatory. Without the presence of indispensable
parties to the suit, the judgment of the court cannot attain real finality. Strangers to a
case are not bound by the judgment rendered by the court. The absence of an
indispensable party renders all subsequent actions of the court null and void. There is
lack of authority to act not only of the absent party but also as to those present. The
responsibility of impleading all the indispensable parties rests on the petitioner or
plaintiff. However, the non-joinder of indispensable parties is not a ground for the
dismissal of an action. Parties may be added by order of the court on motion of the
party or on its own initiative at any stage of the action and/or such times as are just. If
the petitioner or plaintiff refuses to implead an indispensable party despite the order of
the court, the latter may dismiss the complaint or petition for the petitioner or plaintiff's
failure to comply therefor. The remedy is to implead the non-party claimed to be
indispensable. In the present case, the RTC and the CA did not require the respondents
to implead Atty. Santos as party-defendant or respondent in the case. The operative act
that would lead to the dismissal of Civil Case No. 05-172 would be the refusal of
respondents to comply with the directive of the court for the joinder of an indispensable
party to the case.

In his petition, petitioner prays for the reversal of the Decision dated February 14, 2008
of the CA which affirmed the Joint Order dated June 9, 2005 and Summary Judgment
dated June 15, 2006 of the RTC of Muntinlupa City, Branch 203 and dismissed
petitioner's appeal under Rule 41 of the Rules for lack of jurisdiction and its Resolution
dated May 23, 2008 which denied petitioner's motion for reconsideration; the annulment
of the RTC's Summary Judgment rendered on June 15, 2006; and the dismissal of Civil
Case No. 05-172 filed with the RTC on the ground that respondents failed to pay the
correct docket fees as the action actually sought the recovery of ownership over the
subject properties.

The record shows that Civil Case No. 05-172 is a complaint filed by respondent Oscar
Camerino against petitioner, denominated as "Petition to Revoke Power of Attorney,"
that seeks to nullify the "Irrevocable Power of Attorney" coupled with interest dated
December 18, 2003; that petitioner be ordered to turn over TCT No. 15898, 15896, and
15897 to him; and that petitioner be ordered to pay the attorney's fees and other legal
fees as a consequence of the suit. This case is therefore not an action to recover the
titles and ownership over the subject properties. For now, the nature of the suit remains
that of personal action and not a real action in contemplation of Rule 4 of the Rules.
Hence, the docket fees paid by the respondents were in order. Should the complaint be
amended to seek recovery of ownership of the land, then the proper docket fees should
be paid and collected.

While the RTC erred in rendering the summary judgment, Civil Case No. 05-172 should
not perforce be dismissed. Instead, this present case should be remanded to the RTC
for further proceedings and proper disposition according to the rudiments of a regular
trial on the merits and not through an abbreviated termination of the case by summary
judgment.

WHEREFORE, the petition is PARTLY GRANTED. The Decision of the Court of

Appeals dated February 14, 2008 which affirmed the Joint Order dated June 9, 2005
and Summary Judgment dated June 15, 2006 of the Regional Trial Court of Muntinlupa
City, Branch 203 and dismissed petitioner's appeal under Rule 41 of the Rules of Court
on the ground of lack of jurisdiction and the Resolution of the Court of Appeals dated
May 23, 2008 which denied petitioner's motion for reconsideration in CA-G.R. CV No.
87656 are REVERSED and SET ASIDE. The case isREMANDED to the Regional Trial
Court of Muntinlupa City, Branch 203, for further proceedings in accordance with this
Decision.

No costs.

SO ORDERED.
JUDGMENT, FINAL
ORDERS AND
ENTRY THEREOF
- What is judgment
 - Entry of judgment
- Several
judgments

THIRD DIVISION

[ G.R. No. 114217, October 13, 2009 ]

HEIRS OF JOSE SY BANG, HEIRS OF JULIAN SY AND OSCAR SY,[1] PETITIONERS,

VS. ROLANDO SY, ROSALINO SY, LUCIO SY, ENRIQUE SY, ROSAURO SY,
BARTOLOME SY, FLORECITA SY, LOURDES SY, JULIETA SY, AND ROSITA
FERRERA-SY, RESPONDENTS.

[ G.R. NO. 150797]

ILUMINADA TAN, SPOUSES JULIAN SY AND ROSA TAN, ZENAIDA TAN, AND MA.
EMMA SY, PETITIONERS, VS. BARTOLOME SY, ROSALINO SY, FLORECITA SY,
ROLANDO SY, LOURDES SY, ROSAURO SY, JULIETA SY, AND ROSITA FERRERA-
SY, RESPONDENTS.

DECISION

NACHURA, J.:

Before this Court are two Petitions for Review on Certiorari under Rule 45 of the Rules
of Court. The first Petition, G.R. No. 114217, assails the Decision [2] dated May 6, 1993
and the Resolution[3] dated February 28, 1994 of the Court of Appeals (CA) in CA-G.R.
SP No. 17686. On the other hand, the second Petition, G.R. No. 150797, questions the
Decision dated February 28, 2001 and the Resolution dated November 5, 2001 of the
CA in CA-G.R. SP No. 46244.

The factual antecedents are as follows:

G.R. No. 114217

On May 28, 1980, respondent Rolando Sy filed a Complaint for Partition against
spouses Jose Sy Bang and Iluminada Tan, spouses Julian Sy and Rosa Tan, Zenaida
Sy, Ma. Emma Sy, Oscar Sy, Rosalino Sy, Lucio Sy, Enrique Sy, Rosauro Sy, Bartolome
Sy, Florecita Sy, Lourdes Sy, Julieta Sy, Rosita Ferrera-Sy, and Renato Sy before the
then Court of First Instance of Quezon, Branch 2, docketed as Civil Case No. 8578. [4]

Respondents Rolando Sy, Rosalino Sy, Lucio Sy, Enrique Sy, Rosauro Sy, Bartolome
Sy, Julieta Sy, Lourdes Sy, and Florecita Sy are the children of Sy Bang by his second
marriage to respondent Rosita Ferrera-Sy, while petitioners Jose Sy Bang, Julian Sy
and Oscar Sy are the children of Sy Bang from his first marriage to Ba Nga, and
petitioners Zenaida Tan and Ma. Emma Sy are the children of petitioner spouses Jose
Sy Bang and Iluminada Tan.[5]

Sy Bang died intestate in 1971, leaving behind real and personal properties, including
several businesses.[6]

During an out-of-court conference between petitioners and respondents, it was agreed

that the management, supervision or administration of the common properties and/or
the entire estate of the deceased Sy Bang shall be placed temporarily in the hands of
petitioner Jose Sy Bang, as trustee, with authority to delegate some of his functions to
any of petitioners or private respondents. Thus, the function or duty of bookkeeper was
delegated by Jose Sy Bang to his co-petitioner Julian Sy, and the duty or function of
management and operation of the business of cinema of the common ownership was
delegated by petitioner Jose Sy Bang to respondent Rosauro Sy.[7]

Herein petitioners and respondents also agreed that the income of the three cinema
houses, namely, Long Life, SBS and Sy-Co Theaters, shall exclusively pertain to
respondents for their support and sustenance, pending the termination of Civil Case No.
8578, for Judicial Partition, and the income from the vast parts of the entire estate and
other businesses of their common father, to pertain exclusively to petitioners. Hence,
since the year 1980, private respondents, through respondent Rosauro Sy, had taken
charge of the operation and management of the three cinema houses, with the income
derived therefrom evenly divided among themselves for their support and maintenance.
[8]

On March 30, 1981, the Judge rendered a First Partial Decision based on the
Compromise Agreement dated November 10, 1980, submitted in Civil Case No. 8578
by plaintiff Rolando Sy and defendants Jose Sy Bang and Julian Sy. On April 2, 1981,
the Judge rendered a Second Partial Decision based on the pretrial order of the court,
dated March 25, 1981, entered into by and between respondent Renato Sy and
petitioner spouses. Said First Partial Decision and Second Partial Decision had long
become final, without an appeal having been interposed by any of the parties. [9]

On June 8, 1982, the Judge rendered a Third Partial Decision, [10] the dispositive portion
of which reads as follows:

WHEREFORE, the Court hereby renders this Third Partial Decision:

(a) Declaring that all the properties, businesses or assets, their income, produce and
improvements, as well as all the rights, interests or participations (sic) in the names of
defendants Jose Sy Bang and his wife Iluminada Tan and their children, defendants
Zenaida and Ma. Emma; both surnamed Sy, and defendants Julian Sy and his wife
Rosa Tan, as belonging to the estate of Sy Bang, including the properties in the names
of said defendants which are enumerated in the Complaints in this case and all those
properties, rights and interests which said defendants may have concealed or
fraudulently transferred in the names of other persons, their agents or representatives;

(b) Declaring the following as the heirs of Sy Bang, namely: his surviving widow, Maria
Rosita Ferrera-Sy and her children, Enrique, Bartolome, Rosalino, Rolando, Rosauro,
Maria Lourdes, Florecita and Julieta, all surnamed Sy, and his children by his first wife,
namely: Jose Sy Bang, Julian Sy, Lucio Sy, Oscar Sy and Renato Sy;

(c) Ordering the partition of the Estate of Sy Bang among his heirs entitled thereto after
the extent thereof shall have been determined at the conclusion of the proper
accounting which the parties in this case, their agents and representatives, shall render
and after segregating and delivering to Maria Rosita Ferrera-Sy her one-half (1/2) share
in the conjugal partnership between her and her deceased husband Sy Bang;

(d) Deferring resolution on the question concerning the inclusion for partition of
properties in the names of Rosalino, Bartolome, Rolando and Enrique, all surnamed Sy.

SO ORDERED.

On June 16, 1982, petitioners filed a Motion to Suspend Proceedings and for Inhibition,
alleging, among others, that the Judge had patently shown partiality in favor of their co-
defendants in the case. This motion was denied on August 16, 1982. [11]

On July 4, 1982, petitioners filed a Petition for Prohibition and for Inhibition
(Disqualification) and Mandamus with Restraining Order with the Supreme Court
docketed as G.R. No. 60957. The Petition for Prohibition and for Inhibition was denied,
and the Petition for Mandamus with Restraining Order was Noted. [12]

On August 17, 1982, the Judge issued two Orders: (1) in the first Order, [13] Mrs. Lucita L.
Sarmiento was appointed as Receiver, and petitioners' Motion for New Trial and/or
Reconsideration, dated July 9, 1982 and their Supplemental Motion, dated July 12,
1982, were denied for lack of merit; and (2) in the second Order,[14] the Judge ordered
the immediate cancellation of the lis pendens annotated at the back of the certificates of
title in the names of Bartolome Sy, Rosalino Sy and Rolando Sy.

On August 18, 1982, the trial court approved the bond posted by the receiver, Mrs.
Lucita L. Sarmiento, Bartolome Sy, Rolando Sy and Rosalino Sy. [15]

While the Petition for Mandamus with Restraining Order was pending before the First
Division of the Supreme Court, petitioners filed a Petition for Certiorari and Prohibition
before the Supreme Court, docketed as G.R. No. 61519. A Temporary Restraining
Order was issued on August 31, 1982, to enjoin the Judge from taking any action in Civil
Case No. 8578 and, likewise, restraining the effectivity of and compliance with the
Resolution dated August 16, 1982, the two Orders dated August 17, 1982, and the
Order dated August 18, 1982.
On September 2, 1982, petitioners withdrew their Petition for Mandamus with
Restraining Order, docketed as G.R. No. 60957.

On September 11, 1982, an Urgent Manifestation and Motion was filed by Mrs. Lucita L.
Sarmiento, the appointed receiver, which was opposed by petitioners on September 24,
1982. [16]

After several incidents in the case, the Court, on May 8, 1989, referred the petition to
the CA for proper determination and disposition.

The CA rendered the assailed Decision [17] on May 6, 1993, denying due course to and
dismissing the petition for lack of merit. It held that Judge Puno acted correctly in
issuing the assailed Third Partial Decision. The CA said that the act of Judge Puno in
rendering a partial decision was in accord with then Rule 36, Section 4, of the Rules of
Court, which stated that in an action against several defendants, the court may, when a
judgment is proper, render judgment against one or more of them, leaving the action to
proceed against the others. It found that the judge's decision to defer resolution on the
properties in the name of Rosalino, Bartolome, Rolando, and Enrique would not affect
the resolution on the properties in the names of Jose Sy Bang, Iluminada, Julian, Rosa,
Zenaida, and Ma. Emma, since the properties were separable and distinct from one
another such that the claim that the same formed part of the Sy Bang estate could be
the subject of separate suits.

The CA also upheld the judge's appointment of a receiver, saying that the judge did so
after both parties had presented their evidence and upon verified petition filed by
respondents, and in order to preserve the properties under litigation. Further, the CA
found proper the order to cancel the notice of lis pendens annotated in the certificates of
title in the names of Rosalino, Rolando and Bartolome.

The Motion for Reconsideration was denied on February 28, 1994. [18]

On April 22, 1994, petitioners filed this Petition for Review on Certiorari under Rule 43 of
the Rules of Court.

The Court denied the Petition for non-compliance with Circulars 1-88 and 19-91 for
failure of petitioners to attach the registry receipt. Petitioners moved for reconsideration,
and the Petition was reinstated on July 13, 1994.

In this Petition for Review, petitioners seek the reversal of the CA Decision and
Resolution in CA-G.R. SP No. 17686 and, consequently, the nullification of the Third
Partial Decision and orders of the trial court in Civil Case No. 8578. They also pray for
the Court to direct the trial court to proceed with the reception of further evidence in Civil
Case No. 8578.[19] In particular, petitioners allege that the CA decided questions of
substance not in accord with law when it upheld the trial court's Third Partial Decision
which, they alleged, was rendered in violation of their rights to due process.

Petitioners narrate that the trial court initially gave them two trial days - May 26 and 27,
1982 - to present their evidence. However, at the hearing on May 26, the judge forced
them to terminate the presentation of their evidence. On June 2, 1982, following
petitioners' submission of additional documentary evidence, the trial court scheduled the
case for hearing on June 8 and 9, 1982, at 2 o'clock in the afternoon "in view of the
importance of the issue concerning whether all the properties in the names of Enrique
Sy, Bartolome Sy, Rosalino Sy, and Rolando Sy and/or their respective wives (as well
as those in the names of other party-litigants in this case) shall be declared or included
as part of the Estate of Sy Bang, and in view of the numerous documentary evidences
(sic) presented by Attys. Raya and Camaligan." At the June 8 hearing, petitioners
presented additional evidence. Unknown to them, however, the trial court had already
rendered its Third Partial Decision at 11 o'clock that morning. Thus, petitioners argue
that said Third Partial Decision is void. [20]

They also question the trial court's First Order dated August 17, 1982 and Order dated
August 18, 1982 granting the prayer for receivership and appointing a receiver,
respectively, both allegedly issued without a hearing and without showing the necessity
to appoint a receiver. Lastly, they question the Second Order dated August 17, 1982
canceling the notice of lis pendens ex parte and without any showing that the notice
was for the purpose of molesting the adverse parties, or that it was not necessary to
protect the rights of the party who caused it to be recorded. [21]

On May 9, 1996, Rosita Ferrera-Sy filed a Motion for Payment of Widow's Allowance.
She alleged that her deceased husband, Sy Bang, left an extensive estate. The
properties of the estate were found by the trial court to be their conjugal properties.
From the time of Sy Bang's death in 1971 until the filing of the motion, Rosita was not
given any widow's allowance as provided in Section 3, Rule 83 of the Rules of Court by
the parties in possession and control of her husband's estate, or her share in the
conjugal partnership.[22]

In their Comment on the Motion for Payment of Widow's Allowance, petitioners argued
that Section 3, Rule 83 of the Rules of Court specifically provides that the same is
granted only "during the settlement of the estate" of the decedent, and this allowance,
under Article 188 of the Civil Code (now Article 133 of the Family Code), shall be taken
from the "common mass of property" during the liquidation of the inventoried properties.
[23]
Considering that the case before the trial court is a special civil action for partition
under Rule 69 of the Rules of Court, Rosita is not entitled to widow's allowance.

On September 23, 1996, the Court granted the Motion for Payment of Widow's
Allowance and ordered petitioners jointly and severally to pay Rosita P25,000.00 as the
widow's allowance to be taken from the estate of Sy Bang, effective September 1, 1996
and every month thereafter until the estate is finally settled or until further orders from
the Court.[24]

In a Manifestation dated October 1, 1996, petitioners informed the Court that Rosita and
co-petitioner Enrique Sy had executed a waiver of past, present and future claims
against petitioners and, thus, should be dropped as parties to the case. [25] Attached
thereto was a Sinumpaang Salaysay wherein Rosita and Enrique stated that they were
given P1 million and a 229-square meter parcel of land, for which reason they were
withdrawing as plaintiffs in Civil Case No. 8578. [26]

Respondents, except Enrique Sy, filed a Counter-Manifestation and Opposition to Drop

Rosita Sy as a Party.[27]They said that it would be ridiculous for Rosita to give up her
share in Sy Bang's estate, amounting to hundreds of millions of pesos, which had
already been ordered partitioned by the trial court, to the prejudice of her seven full-
blooded children. They alleged that Rosita was not in possession of her full faculties
when she affixed her thumbmark on the Sinumpaang Salaysay considering her age, her
frequent illness, and her lack of ability to read or write. Hence, they filed a petition
before the Regional Trial Court (RTC) of Lucena City for guardianship over her person
and properties. They also alleged that Enrique and some of Jose Sy Bang's children
would stealthily visit Rosita in Rosauro's house while the latter was away. On one of
those occasions, she was asked to affix her thumbmark on some documents she could
not read and knew nothing about. They claim that Rosita has never received a single
centavo of the P1 million allegedly given her.

In their Reply to Counter-Manifestation, [28] petitioners countered that respondents failed

to present any concrete evidence to challenge the Sinumpaang Salaysay. Since the
same was duly notarized, it was a public document and presumed valid. They, likewise,
alleged that the Counter-Manifestation was filed without Rosita's authorization as, in
fact, she had written her counsel with instructions to withdraw said pleading. [29] Further,
they averred that Rosita executed the Sinumpaang Salaysay while in full possession of
her faculties. They alleged that Rosita intended to oppose the petition for guardianship
and they presented a copy of a sworn certification from Rosita's physician that "she
(Rosita) is physically fit and mentally competent to attend to her personal or business
transactions."[30]

On the other hand, petitioners filed a Motion for Reconsideration of the Court's
September 23, 1996 Resolution. It alleged that Rosita and Enrique executed
their Sinumpaang Salaysay on August 29, 1996. However, this development was made
known to the Court only on October 1, 1996; hence, the Court was not aware of this
when it issued its Resolution. Petitioners prayed for the reconsideration of the
September 23, 1996 Resolution and dropping Rosita and Enrique as parties to the
case.[31]

In their Opposition to the Motion for Reconsideration, respondents maintained that the
Court should not consider the Motion for Reconsideration. Respondents alleged that
Rosita thumbmarked the Sinumpaang Salaysay without understanding the contents of
the document or the implications of her acts. Respondents also tried to demonstrate
that their mother would thumbmark any document that their children asked her to by
exhibiting four documents each denominated as Sinumpaang Salaysay and
thumbmarked by Rosita. One purported to disown the earlierSinumpaang Salaysay.
The second was a reproduction of the earlier Sinumpaang Salaysay with the amount
changed to P100.00, the Transfer Certificate of Title number changed to 12343567, and
the size of the property to "as big as the entire Lucena City." The third purported to
bequeath her shares in the conjugal partnership of gains to Rosauro, Bartolome,
Rolando, and Rosalino, while refusing to give any inheritance to Florecita, Lourdes,
Julieta, and Enrique. Lastly, the fourth contradicted the third in that it was in favor of
Florecita, Lourdes, Julieta, and Enrique, while disinheriting Rosauro, Bartolome,
Rolando, and Rosalino. These, respondents assert, clearly show that their mother
would sign any document, no matter the contents, upon the request of any of her
children.[32]

The Court denied the Motion for Reconsideration on November 18, 1996. [33]

Petitioners filed a Supplement to their Memorandum, additionally arguing that the Third
Partial Decision did not only unduly bind the properties without due process, but also
ignored the fundamental rule on the indefeasibility of Torrens titles. [34]

G.R. No. 150797

Meanwhile, on September 30, 1996, respondents filed a Joint Petition for the
Guardianship of the Incompetent Rosita Ferrera-Sy before the RTC of Lucena City,
Branch 58 (Guardianship court), docketed as Special Proceedings No. 96-34. On May
19, 1997, Rosauro Sy, who sought to be named as the special guardian, filed before the
Guardianship court a Motion to Order Court Deposit of Widow's Allowance Ordered by
the Supreme Court.[35] Then, he filed a Motion before this Court seeking an Order for
petitioners to pay Rosita P2,150,000.00 in widow's allowance and P25,000.00 every
month thereafter, as ordered by this Court in its September 23, 1996 Resolution. He
also prayed for petitioners' imprisonment should they fail to comply therewith. [36]

On July 8, 1997, the Guardianship court issued an Order, the dispositive portion of
which reads:

WHEREFORE, Mr. Jose Sy Bang and his wife Iluminada Tan; and their children,
Zenaida Sy and Ma. Emma Sy; and Julian Sy and his wife Rosa Tan, are hereby
ordered to deposit to this Court, jointly and severally, the amount of P250,000.00
representing the widow's allowance of the incompetent Rosita Ferrera Sy corresponding
the (sic) periods from September 1, 1996 to June 30, 1997, and additional amount of
P25,000.00 per month and every month thereafter, within the first ten (10) days of each
month.[37]

Petitioners' Motion for Reconsideration was denied. Rosauro, the appointed guardian,
then asked the Guardianship court to issue a writ of execution. Meanwhile, on
December 10, 1997, petitioners filed a Petition forCertiorari with the CA docketed as
CA-G.R. SP No. 46244 to annul the July 8, 1997 Order and October 9, 1997 Resolution
of the Guardianship court.[38]

In a Decision[39] dated February 28, 2001, the CA ruled in respondents' favor, finding
"nothing legally objectionable in private respondent Rosauro Sy's filing of the motion to
order the deposit of the widow's allowance ordered by the Supreme Court in G.R. No.
114217 or, for that matter, in the public respondent's grant thereof in the order herein
assailed. More so, when the public respondent's actions are viewed in the light of the
Supreme Court's denial of petitioners' motion for reconsideration of its resolution dated
September 23, 1996."[40] Thus it held:

WHEREFORE, the petition is DENIED for lack of merit and the assailed resolution
dated September 23, 1996 (sic) is AFFIRMED in toto. No pronouncement as to costs.

SO ORDERED.

Their Motion for Reconsideration having been denied on November 5, 2001,

[41]
petitioners filed this Petition for Review [42] under Rule 45 of the Rules of Court praying
for this Court to reverse the CA's February 28, 2001 Decision and its Resolution
denying the Motion for Reconsideration, and to declare the Guardianship court to have
exceeded its jurisdiction in directing the deposit of the widow's allowance in Special
Proceedings No. 96-34.[43]They argued that the Guardianship court's jurisdiction is
limited to determining whether Rosita was incompetent and, upon finding in the
affirmative, appointing a guardian. Moreover, under Rule 83, Section 3, of the Rules of
Court, a widow's allowance can only be paid in an estate proceeding. Even if the
complaint for partition were to be considered as estate proceedings, only the trial court
hearing the partition case had the exclusive jurisdiction to execute the payment of the
widow's allowance.[44]

They raised the following issues:

The Court of Appeals erred in affirming the Guardianship Court's Order dated 8 July
1997, and Resolution dated 9 October 1997, in that:

I
The trial court, acting as a Guardianship Court, and limited jurisdiction, had no authority
to enforce payment of widow's allowance.

II

The payment of widow's allowance cannot be implemented at [the] present because the
estate of Sy Bang - the source from which payment is to be taken - has not been
determined with finality.

III

The Order of the trial court purporting to enforce payment of widow's allowance unduly
modified the express terms of this Honorable Court's Resolution granting it. [45]

Petitioners, likewise, question the Guardianship court's omission of the phrase "to be
taken from the estate of Sy Bang" from the July 8, 1997 Order. They interpreted this to
mean that the Guardianship court was ordering that the widow's allowance be taken
from their own properties and not from the estate of Sy Bang - an "undue modification"
of this Court's September 23, 1996 Resolution. [46]

On January 21, 2002, the Court resolved to consolidate G.R. No. 114217 and G.R. No.
150797. The parties submitted their respective Memoranda on May 21, 2003 and June
19, 2003, both of which were noted by this Court in its August 11, 2003 Resolution.

Pending the issuance of this Court's Decision in the two cases, respondent Rosauro Sy
filed, on November 11, 2003, a Motion to Order Deposit in Court of Supreme Court's
Ordered Widow's Allowance Effective September 23, 1996 and Upon Failure of
Petitioners Julian Sy, et al. to Comply Therewith to Order Their Imprisonment Until
Compliance. He alleged that his mother had been ill and had no means to support
herself except through his financial assistance, and that respondents had not complied
with this Court's September 23, 1996 Resolution, promulgated seven years earlier. [47] He
argued that respondents' defiance constituted indirect contempt of court. That the
Guardianship court had found them guilty of indirect contempt did not help his mother
because she was still unable to collect her widow's allowance. [48]
Petitioners opposed said Motion arguing that the estate from which the widow's
allowance is to be taken has not been settled. They also reiterated that Rosita, together
with son Enrique, had executed a Sinumpaang Salaysaywaiving all claims against
petitioners. Hence, there was no legal ground to cite them in contempt. [49]

On April 4, 2005, this Court granted Rosauro's Motion, to wit:

WHEREFORE, the Court finds and so holds petitioner Iluminada Tan (widow of
deceased petitioner Jose Sy Bang), their children and co-petitioners Zenaida
Sy, Ma. Emma Sy, Julian Sy and the latter's wife Rosa Tan,GUILTY of contempt of
this Court and are collectively sentenced to pay a FINE equivalent to ten (10%) percent
of the total amount due and unpaid to Rosita Ferrera-Sy by way of a widow's allowance
pursuant to this Court's Resolution of September 13, 1996, and
accordingly ORDERS their immediate imprisonment until they shall have complied with
said Resolution by paying Rosita Ferrera-Sy the amount of TWO MILLION SIX
HUNDRED THOUSAND ONE HUNDRED PESOS (P2,600,100.00), representing her
total accumulated unpaid widow's allowance from September, 1996 to April, 2005 at the
rate of TWENTY-FIVE THOUSAND PESOS (P25,000.00) a month, plus six (6%)
percent interest thereon. The Court further DIRECTS petitioners to faithfully pay Rosita
Ferrera-Sy her monthly widow's allowance for the succeeding months as they fall due,
under pain of imprisonment.

This Resolution is immediately EXECUTORY.

SO ORDERED.[50]

Iluminada, Zenaida and Ma. Emma paid the court fine of P260,010.00 on April 5, 2005.
[51]

Respondents, except Rosauro Sy (who had died), filed a Motion for Execution [52] before
this Court on April 25, 2005. On the other hand, petitioner Rosa Tan filed a Motion for
Reconsideration with Prayer for Clarification. [53]She alleged that, in accordance with
Chinese culture, she had no participation in the management of the family business or
Sy Bang's estate. After her husband's death, she allegedly inherited nothing but debts
and liabilities, and, having no income of her own, was now in a quandary on how these
can be paid. She asked the Court to consider that she had not disobeyed its Resolution
and to consider her motion.

Other petitioners, Iluminada, Zenaida and Ma. Emma, also filed a Motion for
Reconsideration with Prayer for Clarification. [54] They stressed that the P1 million and
the piece of land Rosita had already received from Jose Sy Bang in 1996 should form
part of the widow's allowance. They also argued that whatever allowance Rosita may be
entitled to should come from the estate of Sy Bang. They further argued the unfairness
of being made to pay the allowance when none of them participated in the management
of Sy Bang's estate; Zenaida and Ma. Emma being minors at the time of his death,
while Iluminada and Rosa had no significant role in the family business.

Respondents then filed a Motion for Issuance of Order Requiring Respondents to

Deposit with the Supreme Court's Cashier its Ordered Widow's Allowance [55] and a
Motion for Execution of Resolution dated April 4, 2005. [56] Petitioners opposed the same.
[57]

On July 25, 2005, the Court issued a Resolution granting both of respondents' motions
and denying petitioners' motion for reconsideration. [58]

Petitioners Iluminada, Zenaida and Ma. Emma filed, on August 15, 2005, a
Manifestation of Compliance and Motion for Clarification. [59] They maintained that the
issues they had raised in the motion for reconsideration had not been duly resolved.
They argued that when this Court issued its September 23, 1996 Resolution, it was not
yet aware that Rosita had executed a Sinumpaang Salaysay, wherein she waived her
claims and causes of action against petitioners. They also informed this Court that, on
April 17, 1998, the Guardianship court had issued an Order which recognized a
"temporary agreement" based on the voluntary offer of Jose Sy Bang of a financial
assistance of P5,000.00 per month to Rosita while the case was pending. Moreover, as
a manifestation of good faith, petitioners Iluminada, Zenaida and Ma. Emma paid the
P430,000.00 out of their own funds in partial compliance with the Court's Resolution.
However, the same did not in any way constitute a waiver of their rights or defenses in
the present case. They underscored the fact that the allowance must come from the
estate of Sy Bang, and not from Jose Sy Bang or any of the latter's heirs, the extent of
which remained undetermined. They further asked the Court to adjudicate the liability
for the widow's allowance to be equally divided between them and the other set of
petitioners, the heirs of Julian Sy.
On August 30, 2005, respondents filed a motion asking this Court to issue an Order for
the immediate incarceration of petitioners for refusing to comply with the Court's
resolution.[60] They aver that the period within which petitioners were to comply with the
Court's Resolution had now lapsed, and thus, petitioners must now be incarcerated for
failure to abide by said Resolution. They likewise asked the Court to refer petitioners'
counsel, Atty. Vicente M. Joyas, to the Integrated Bar of the Philippines (IBP) for
violations of the Canons of Professional Responsibility or to declare him in contempt of
court. They alleged that despite the finality of the Court's denial of petitioners' motion for
reconsideration, Atty. Joyas still filed a Manifestation with compliance arguing the same
points. Further, Atty. Joyas is not petitioners' counsel of record in this case since he
never formally entered his appearance before the Court. [61]

In a Resolution dated September 14, 2005, the Court denied the motion to refer Atty.
Joyas to the IBP for being a wrong remedy.[62]

Petitioners Iluminada, Zenaida and Ma. Emma then filed an Omnibus Motion, [63] seeking
an extension of time to comply with the Court's Resolution and Motion to delete the
penalty of "fine" as a consequence of voluntary compliance. They insist that their
compliance with the order to pay the widow's allowance should "obliterate, expunge,
and blot out" the penalty of fine and imprisonment. They alleged that for their failure to
comply with this Court's Resolution, the RTC, Lucena City, found them guilty of indirect
contempt and imposed on them a fine of P30,000.00. They had appealed said order to
the CA.

They also tried to make a case out of the use of the terms "joint and several" in the
September 23 Resolution, and "collectively" in the April 5, 2005 Resolution. They
argued that "joint and several" creates individual liability for each of the parties for the
full amount of the obligation, while "collectively" means that all members of the group
are responsible together for the action of the group. Hence, "collectively" would mean
that the liability belongs equally to the two groups of petitioners. They requested for an
additional 60 days to raise the necessary amount. They also asked the Court to hold
their imprisonment in abeyance until their "just and reasonable compliance" with the
Court's orders.

Barely a month later, petitioners, through their new counsel, filed another Manifestation
stressing that Sy Bang's marriage to Rosita Ferrera is void. They claimed that
respondents have falsified documents to lead the courts into believing that Rosita's
marriage to Sy Bang is valid.

The Omnibus Motion was denied in a Resolution dated October 17, 2005. Thereafter,
respondents filed a Motion to Immediately Order Incarceration of Petitioners, [64] which
petitioners opposed.[65]

In a Resolution dated December 12, 2005, [66] the Court issued a Warrant of
Arrest[67] against petitioners and directed the National Bureau of Investigation (NBI) to
detain them until they complied with this Court's April 4, 2005 and July 25, 2005
Resolutions.

Petitioner Rosa Tan filed a Manifestation with Motion. [68] She informed the Court that, to
show that she was not obstinate and contumacious of the Court and its orders, she had
begged and pleaded with her relatives to raise money to comply, but concedes that she
was only able to raise a minimal amount since she has no source of income herself and
needs financial support to buy her food and medicines. She obtained her brother's help
and the latter issued six checks in the total amount of P650,000.00. She also alleged
that she was not informed by her husband's counsel of the developments in the case,
and remained unconsulted on any of the matters or incidents of the case. She reiterated
that she had no participation in the management of the Sy Bang estate and received
nothing of value upon her husband's death. She prayed that the Court would not
consider her failure to raise any further amount as contempt or defiance of it's orders.

The motion was denied in a Resolution dated January 16, 2006.

In an Urgent Manifestation of Compliance with the Contempt Resolutions with Payment

of Widow's Allowance with Prayer Reiterating the Lifting of Warrant of Arrest on
Humanitarian Grounds,[69] petitioners Iluminada, Zenaida and Ma. Emma asked the
Court to delete the penalty of indefinite imprisonment considering their partial
compliance and the partial compliance of Rosa Tan. They expressed willingness to
deposit the widow's allowance with the Supreme Court's Cashier pending the
determination of Sy Bang's estate. They reasoned that the money to be deposited is
their own and does not belong to Sy Bang's estate. The deposit is made for the sole
purpose of deleting the penalty of indefinite imprisonment. They claim that they are not
willfully disobeying the Court's order but are merely hesitating to comply because of
pending incidents such as the falsification charges against Rosita, the resolution of the
partition case, the Sinumpaang Salaysay executed by Rosita, and the pendency of
Rosita's guardianship proceedings, as well as humanitarian considerations. Thus, they
prayed for the Court to reconsider the order of contempt and to recall the warrant of
arrest.

On February 15, 2006, this Court issued a Resolution [70] lifting the warrant of arrest on
petitioners Iluminada, Zenaida, Ma. Emma, and Rosa Tan on the condition that they
issue the corresponding checks to settle the accrued widow's allowance of Rosita
Ferrera-Sy. They were also directed to submit proof of their compliance to the Court
within ten (10) days from notice.

In a Manifestation[71] dated February 28, 2006, petitioners Iluminada, Zenaida and Ma.
Emma informed the Court that they had deposited the checks in favor of Rosita with the
RTC, Lucena City, Branch 58, during the proceedings on February 28, 2006. [72]

Respondents filed a Comment to the Manifestation arguing that the deposit of said
checks, amounting to P1,073,053.00, does not amount to full compliance with the
Court's order considering that the accrued widow's allowance now amounted to
P4,528,125.00.

Then, petitioners Iluminada, Zenaida and Ma. Emma filed a Motion to include Rosalino
Sy, Bartolome Sy, Rolando Sy, and Heirs of Enrique Sy as Likewise Liable for the
Payment of Widow's Allowance as Heirs of Sy Bang as they may also hold Assets-
Properties of the Estate of Sy Bang. [73] They argued that it is denial of the equal
protection clause for the Court to single out only the two children of the first marriage -
Jose Sy Bang and Julian Sy - and their heirs, as the ones responsible for the widow's
allowance. This ruling, they aver, does not take into consideration the numerous and
valuable properties from the estate of Sy Bang being held in the names of Rosalino,
Bartolome, Rolando, and Enrique. They alleged that two compromise agreements, both
approved by the trial court, transferred properties to Rolando and Renato. They further
alleged that respondents Rolando, Maria Lourdes, Florecita, Rosalino, Enrique, and
Rosita Ferrera-Sy have executed separate waivers and quitclaims over their shares in
the estate of Sy Bang for certain considerations. However, out of respect for the Court
and their fear of incarceration, they complied with the Court's orders using their personal
funds which they claim is unfair because they have never participated in the
management of the properties of Sy Bang. They prayed that the Court pronounce that
the liability for the widow's allowance be divided proportionately among the following
groups: Iluminada, Zenaida, and Ma. Emma; Rosa Tan; Rosalino Sy and wife Helen
Loo; Bartolome Sy and wife Virginia Lim; Rolando Sy and wife Anacorita Rioflorido; and
the heirs of Enrique Sy, namely, Elaine Destura and Edwin Maceda.

On March 23, 2006, petitioners filed an Urgent Reply to respondents' Comment on the
manifestation of compliance with Opposition [74] to the motion filed by respondents for the
Court to reiterate its order for the NBI to arrest petitioners for failure to comply with the
February 15, 2006 Resolution. They argued that they had fully complied with the Court's
orders. They alleged that on three occasions within the period, they had tried to submit
12 postdated checks to the Court's cashiers, but the same were refused due to the
policy of the Court not to issue receipts on postdated checks. They then filed a motion
before the RTC of Lucena City praying for authority to deposit the checks with the trial
court. The motion was denied but, on reconsideration, was later granted. The checks
are now in the custody of the RTC. The only issue respondents raise, they claim, is the
amount of the checks. Hence, there is no basis for the Court to direct the NBI to effect
their arrest.

The Court, in a Resolution dated March 29, 2006, required respondents to comment on
the motion to include some of them in the payment of widow's allowance. Petitioners, on
the other hand, were required to comment on a motion filed by respondents for the
Court to reiterate its order to the NBI to arrest petitioners for failure to comply with the
February 15, 2006 Resolution.[75]

Petitioners filed their Comment with Motion for Partial Reconsideration of the March 29,
2006 Resolution.[76] They reiterated their arguments in their Urgent Reply to
respondents' Comment on the manifestation of compliance with Opposition. They
further alleged that there is now a Resolution by the Regional State Prosecutor, Region
IV, San Pablo City, finding probable cause to charge respondents with falsification of
three marriage contracts between Sy Bang and Rosita Ferrera. According to them, this
development now constitutes a "highly prejudicial question" on whether they should
comply with the order to pay widow's allowance. They claim that, while the filing of the
information is merely the first step in the criminal prosecution of respondents, it already
casts doubt on whether Rosita is legally entitled to the widow's allowance. They now
seek partial reconsideration of the Resolution inasmuch as it requires them to deposit
with the Clerk of Court, RTC of Lucena City, Branch 58, new checks payable to Rosita
Ferrera.

Respondents, on the other hand, filed a Comment and Manifestation [77] on why they
should not be made to pay the widow's allowance. They argued that the RTC had
already decided that the estate of Sy Bang was comprised of properties in the names of
Jose Sy Bang, Iluminada Tan, Zenaida, Ma. Emma, Julian Sy, and Rosa Tan, and the
same was affirmed by the CA. Pending the resolution of the appeal before this Court,
this Decision stands. Thus, petitioners' claim that the estate of Sy Bang is yet
undetermined is false. They also claim that, contrary to petitioners' claims of being poor,
they still hold enormous properties of the Sy Bang estate, which had been transferred in
their names through falsification of public documents, now subject of several cases
which respondents filed against them before the Department of Justice (DOJ).
Respondents further claim that the validity of their mother's marriage to Sy Bang has
been recognized by the courts in several cases where the issue had been raised,
including the case for recognition of Rosita's Filipino citizenship, the guardianship
proceedings, and the partition proceedings.

On June 23, 2006, respondents filed a Motion for Substitution of Parties. [78] They
averred that Jose Sy Bang died on September 11, 2001, leaving behind his widow
Iluminada and 14 children, while Julian Sy died on August 28, 2004, leaving behind his
widow Rosa and eight children. The claims against Jose and Julian were not
extinguished by their deaths. It was the duty of petitioners' counsel, under Rule 3,
Section 16 of the Rules of Court, to inform the Court of these deaths within 30 days
thereof. Petitioners' counsel failed to so inform this Court, which should be a ground for
disciplinary action. Hence, respondents prayed that the Court order the heirs of the two
deceased to appear and be substituted in these cases within 30 days from notice.

In a Resolution[79] dated July 5, 2006, the Court granted the motion for substitution and
noted the Comment and Manifestation on the Motion to include Rosalino Sy, Bartolome
Sy, Rolando Sy, and Heirs of Enrique Sy as Likewise Liable for the Payment of Widow's
Allowance as Heirs of Sy Bang.

Respondents then filed a Manifestation and Motion to Implement the Supreme Court's
Resolutions of September 23, 1996, April 4, 2005, July 25, 2005, December 12, 2005,
and February 15, 2006.[80] They prayed that petitioners be given a last period of five
days within which to deposit with the Supreme Court Cashier all the accrued widow's
allowances as of June 2006.

Petitioners Iluminada, Zenaida and Ma. Emma opposed respondents' manifestation and
motion.[81] They argued that the resolutions sought to be implemented were all issued
prior to the DOJ Resolution finding probable cause to file the falsification charges
against respondents. They contended that the criminal cases for falsification expose
Rosita as a mere common-law wife and not a "widow"; hence, there is no legal
justification to give her the widow's allowance. They also reiterated their earlier
arguments against the grant of widow's allowance.

Meanwhile, Rosa Tan filed a Comment on the Substitution of Parties with Motion for
Reconsideration.[82] She argued that since the trial court had already appointed a judicial
administrator for the estate of Sy Bang, which includes Julian Sy's estate, the proper
party to be substituted should be the administrator and not Julian's heirs who never
exercised ownership rights over the properties thereof.

The Court denied the motion for reconsideration to the Resolution granting substitution
of parties for lack of merit on November 20, 2006.

The Court's Ruling

G.R. No. 114217

Finding no reversible error therein, we affirm the CA Decision.

The Third Partial Decision of the RTC

To review, the CA held, to wit:

The respondent Judge acted correctly inasmuch as his decision to defer the resolution
on the question concerning the properties in the name of Rosalino, Bartolome, Rolando
and Enrique, all surnamed Sy, will not necessarily affect the decision he rendered
concerning the properties in the names of Jose Sy Bang and wife, Julian Sy and wife,
Zenaida Sy and Maria Sy, considering that the properties mentioned were separable
and distinct from each other, such that the claim that said properties were not their own,
but properties of the late Sy Bang, could have been the subject of separate suits. [83]

We agree with the CA.

Section 4, Rule 36 of the Revised Rules on Civil Procedure states:

SEC. 4. Several judgments. - In an action against several defendants, the court may,
when a several judgment is proper, render judgment against one or more of them,
leaving the action to proceed against the others.

The trial court's Third Partial Decision is in the nature of a several judgment as
contemplated by the rule quoted above. The trial court ruled on the status of the
properties in the names of petitioners (defendants below) while deferring the ruling on
the properties in the names of respondents pending the presentation of evidence.

A several judgment is proper when the liability of each party is clearly separable and
distinct from that of his co-parties, such that the claims against each of them could have
been the subject of separate suits, and judgment for or against one of them will not
necessarily affect the other.[84]

Petitioners, although sued collectively, each held a separate and separable interest in
the properties of the Sy Bang estate.

The pronouncement as to the obligation of one or some petitioners did not affect the
determination of the obligations of the others. That the properties in the names of
petitioners were found to be part of the Sy Bang estate did not preclude any further
findings or judgment on the status or nature of the properties in the names of the other
heirs.

The trial court's June 2, 1982 Order reads:

IN view of the importance of the issue concerning whether all the properties in the name
(sic) of Enrique Sy, Bartolome Sy, Rosalino Sy and Rolando Sy and/or their respective
wives (as well as those in the names of the other parties litigants in this case), (sic) shall
be declared or included as part of the Estate of Sy Bang, and in view of the numerous
documentary evidences (sic) presented by Attys. Raya and Camaligan after the said
question was agreed to be submitted for resolution on May 26, 1982, the Court hereby
sets for the reception or for the resolution of said issue in this case on June 8 and 9,
1982, both at 2:00 o'clock in the afternoon; notify all parties litigants in this case of these
settings.[85]

It is obvious from the trial court's order [86] that the June 8, 1982 hearing is for the
purpose of determining whether properties in the names of Enrique Sy, Bartolome Sy,
Rosalino Sy, and Rolando Sy and/or their respective wives are also part of the Sy Bang
estate.

Hence, in the assailed Decision, the trial court said:

[I]n fact, the Court will require further evidence for or against any of the parties in this
case in the matter of whatever sums of money, property or asset belonging to the estate
of Sy Bang that came into their possession in order that the Court may be properly
guided in the partition and adjudication of the rightful share and interest of the heirs of
Sy Bang over the latter's estate; this becomes imperative in view of new matters shown
in the Submission and Formal Offer of Reserve Exhibits and the Offer of Additional
Documentary Evidence filed respectively by Oscar Sy and Jose Sy Bang, et al., thru
their respective counsels after the question of whether or not the properties in the
names of Enrique, Bartolome, Rosalino, and Rolando, all surnamed Sy, should form
part or be included as part of the estate of Sy Bang, had been submitted for resolution
as of May 26, 1982; the Court deems it proper to receive additional evidence on the part
of any of the parties litigants in this case if only to determine the true extent of the estate
belonging to Sy Bang.[87]

The trial court painstakingly examined the evidence on record and narrated the details,
then carefully laid out the particulars in the assailed Decision. The evidence that formed
the basis for the trial court's conclusion is embodied in the Decision itself - evidence
presented by the parties themselves, including petitioners.

However, notwithstanding the trial court's pronouncement, the Sy Bang estate cannot
be partitioned or distributed until the final determination of the extent of the estate and
only until it is shown that the obligations under Rule 90, Section 1, [88] have been settled.
[89]
In the settlement of estate proceedings, the distribution of the estate properties can only
be made: (1) after all the debts, funeral charges, expenses of administration, allowance
to the widow, and estate tax have been paid; or (2) before payment of said obligations
only if the distributees or any of them gives a bond in a sum fixed by the court
conditioned upon the payment of said obligations within such time as the court directs,
or when provision is made to meet those obligations. [90]

Settling the issue of ownership is the first stage in an action for partition. [91] As this Court
has ruled:

The issue of ownership or co-ownership, to be more precise, must first be resolved in

order to effect a partition of properties. This should be done in the action for partition
itself. As held in the case of Catapusan v. Court of Appeals:

"In actions for partition, the court cannot properly issue an order to divide the property,
unless it first makes a determination as to the existence of co-ownership. The court
must initially settle the issue of ownership, the first stage in an action for partition.
Needless to state, an action for partition will not lie if the claimant has no rightful interest
over the subject property. In fact, Section 1 of Rule 69 requires the party filing the action
to state in his complaint the "nature and extent of his title" to the real estate. Until and
unless the issue of ownership is definitely resolved, it would be premature to effect a
partition of the properties x x x." [92]

Moreover, the Third Partial Decision does not have the effect of terminating the
proceedings for partition. By its very nature, the Third Partial Decision is but a
determination based on the evidence presented thus far. There remained issues to be
resolved by the court. There would be no final determination of the extent of the Sy
Bang estate until the court's examination of the properties in the names of Rosalino,
Bartolome, Rolando, and Enrique. Based on the evidence presented, the trial court will
have to make a pronouncement whether the properties in the names of Rosalino,
Bartolome, Rolando, and Enrique indeed belong to the Sy Bang estate. Only after the
full extent of the Sy Bang estate has been determined can the trial court finally order the
partition of each of the heirs' share.

Appointment of Receiver
As to the issue of the judge's appointment of a receiver, suffice it to say that the CA
conclusively found thus:

The records show that the petitioners were never deprived of their day in court. Upon
Order of the respondent Judge, counsel for the petitioners submitted their opposition to
[the] petition for appointment of a receiver filed by private respondents. x x x.

Moreover, evidence on record shows that respondent Judge appointed the receiver
after both parties have presented their evidence and after the Third Partial Decision has
been promulgated. Such appointment was made upon verified petition of herein private
respondents, alleging that petitioners are mismanaging the properties in litigation by
either mortgaging or disposing the same, hence, the said properties are in danger of
being lost, wasted, dissipated, misused, or disposed of. The respondent Judge acted
correctly in granting the appointment of a receiver in Civil Case No. 8578, in order to
preserve the properties in litis pendentia and neither did he abuse his discretion nor
acted arbitrarily in doing s. On the contrary, We find that it was the petitioners who
violated the status quo sought to be maintained by the Supreme Court, in G.R. No.
61519, by their intrusion and unwarranted seizures of the 3 theaters, subject matter of
the litigation, and which are admittedly under the exclusive management and operation
of private respondent, Rosauro Sy.[93]

Cancellation of Notice of Lis Pendens

Next, petitioners question the trial court's Order canceling the notice of lis pendens.[94]

Section 77 of Presidential Decree No. 1529, or the Property Registration Decree,

provides:

SEC. 77. Cancellation of lis pendens. Before final judgment, a notice

of lis pendens may be cancelled upon order of the court, after proper showing that the
notice is for the purpose of molesting the adverse party, or that it is not necessary to
protect the rights of the party who caused it to be registered. It may also be cancelled by
the Register of Deeds upon verified petition of the party who caused the registration
thereof.
At any time after final judgment in favor of the defendant, or other disposition of the
action such as to terminate finally all rights of the plaintiff in and to the land and/or
buildings involved, in any case in which a memorandum or notice of lis pendens has
been registered as provided in the preceding section, the notice of lis pendens shall be
deemed cancelled upon the registration of certificate of the clerk of court in which the
action or proceeding was pending stating the manner of disposal thereof.

The filing of a notice of lis pendens has a two-fold effect: (1) to keep the subject matter
of the litigation within the power of the court until the entry of the final judgment in order
to prevent the final judgment from being defeated by successive alienations; and (2) to
bind a purchaser, bona fide or not, of the land subject of the litigation to the judgment or
decree that the court will promulgate subsequently.[95]

While the trial court has an inherent power to cancel a notice of lis pendens, such power
is to be exercised within the express confines of the law. As provided in Section 14,
Rule 13 of the 1997 Rules of Civil Procedure, a notice of lis pendens may be cancelled
on two grounds: (1) when the annotation was for the purpose of molesting the title of the
adverse party, or (2) when the annotation is not necessary to protect the title of the party
who caused it to be recorded.[96]

This Court has interpreted the notice as:

The notice is but an incident in an action, an extrajudicial one, to be sure. It does not
affect the merits thereof. It is intended merely to constructively advise, or warn, all
people who deal with the property that they so deal with it at their own risk, and
whatever rights they may acquire in the property in any voluntary transaction are subject
to the results of the action, and may well be inferior and subordinate to those which may
be finally determined and laid down therein. The cancellation of such a precautionary
notice is therefore also a mere incident in the action, and may be ordered by the Court
having jurisdiction of it at any given time. And its continuance or removal-like the
continuance or removal of a preliminary attachment of injunction-is not contingent on
the existence of a final judgment in the action, and ordinarily has no effect on the merits
thereof.[97]

The CA found, and we affirm, that Rosalino, Bartolome and Rolando were able to prove
that the notice was intended merely to molest and harass the owners of the property,
some of whom were not parties to the case. It was also proven that the interest of Oscar
Sy, who caused the notice to be annotated, was only 1/14 of the assessed value of the
property. Moreover, Rosalino, Bartolome and Rolando were ordered to post a
P50,000.00 bond to protect whatever rights or interest Oscar Sy may have in the
properties under litis pendentia.[98]

G.R. No. 150797

In G.R. No. 150797, petitioners are asking this Court to reverse the CA's February 28,
2001 Decision and its Resolution denying the Motion for Reconsideration, and to
declare the Guardianship court to have exceeded its jurisdiction in directing the deposit
of the widow's allowance in Special Proceedings No. 96-34.

We find merit in petitioners' contention.

The court hearing the petition for guardianship had limited jurisdiction. It had no
jurisdiction to enforce payment of the widow's allowance ordered by this Court.

Reviewing the antecedents, we note that the claim for widow's allowance was made
before the Supreme Court in a case that did not arise from the guardianship
proceedings. The case subject of the Supreme Court petition (Civil Case No. 8578) is
still pending before the RTC of Lucena City.

Rule 83, Sec. 3, of the Rules of Court states:

SEC. 3. Allowance to widow and family. - The widow and minor or incapacitated children
of a deceased person, during the settlement of the estate, shall receive therefrom,
under the direction of the court, such allowance as are provided by law.

Correlatively, Article 188 of the Civil Code states:

Art. 188. From the common mass of property support shall be given to the surviving
spouse and to the children during the liquidation of the inventoried property and until
what belongs to them is delivered; but from this shall be deducted that amount received
for support which exceeds the fruits or rents pertaining to them.
Obviously, "the court" referred to in Rule 83, Sec. 3, of the Rules of Court is the court
hearing the settlement of the estate. Also crystal clear is the provision of the law that the
widow's allowance is to be taken from the common mass of property forming part of the
estate of the decedent.

Thus, as evident from the foregoing provisions, it is the court hearing the settlement of
the estate that should effect the payment of widow's allowance considering that the
properties of the estate are within its jurisdiction, to the exclusion of all other courts. [99]

In emphasizing the limited jurisdiction of the guardianship court, this Court has
pronounced that:

Generally, the guardianship court exercising special and limited jurisdiction cannot
actually order the delivery of the property of the ward found to be embezzled,
concealed, or conveyed. In a categorical language of this Court, only in extreme cases,
where property clearly belongs to the ward or where his title thereto has been already
judicially decided, may the court direct its delivery to the guardian. In effect, there can
only be delivery or return of the embezzled, concealed or conveyed property of the
ward, where the right or title of said ward is clear and undisputable. However, where title
to any property said to be embezzled, concealed or conveyed is in dispute, x x x the
determination of said title or right whether in favor of the persons said to have
embezzled, concealed or conveyed the property must be determined in a separate
ordinary action and not in a guardianship proceedings. [100]

Further, this Court has held that the distribution of the residue of the estate of the
deceased incompetent is a function pertaining properly, not to the guardianship
proceedings, but to another proceeding in which the heirs are at liberty to initiate.[101]

Other Unresolved Incidents

Payment of Widow's Allowance

It has been 13 years since this Court ordered petitioners to pay Rosita Ferrera-Sy her
monthly widow's allowance. Petitioners Iluminada, Zenaida and Ma. Emma have since
fought tooth and nail against paying the said allowance, grudgingly complying only upon
threat of incarceration. Then, they again argued against the grant of widow's allowance
after the DOJ issued its Resolution finding probable cause in the falsification charges
against respondents. They contended that the criminal cases for falsification proved that
Rosita is a mere common-law wife and not a "widow" and, therefore, not entitled to
widow's allowance.

This argument deserves scant consideration.

A finding of probable cause does not conclusively prove the charge of falsification
against respondents.

In a preliminary investigation, probable cause has been defined as "the existence of

such facts and circumstances as would excite the belief, in a reasonable mind, acting
on the facts within the knowledge of the prosecutor, that the person charged was guilty
of the crime for which he was prosecuted." It is well-settled that a finding of probable
cause needs to rest only on evidence showing that more likely than not a crime has
been committed and was committed by the suspects. Probable cause need not be
based on clear and convincing evidence of guilt, neither on evidence establishing
guilt beyond reasonable doubt, and definitely not on evidence establishing absolute
certainty of guilt.[102]

Hence, until the marriage is finally declared void by the court, the same is presumed
valid and Rosita is entitled to receive her widow's allowance to be taken from the estate
of Sy Bang.

We remind petitioners again that they are duty-bound to comply with whatever the
courts, in relation to the properties under litigation, may order.

Motion to Include Rosalino Sy, Bartolome Sy, Rolando Sy, and Heirs of Enrique
Sy as Likewise Liable for the Payment of Widow's Allowance as Heirs of Sy Bang

On March 14, 2006, petitioners filed a Motion to include Rosalino Sy, Bartolome Sy,
Rolando Sy, and Heirs of Enrique Sy as Likewise Liable for the Payment of Widow's
Allowance as Heirs of Sy Bang.

The Motion is denied.

The widow's allowance, as discussed above, is chargeable to Sy Bang's estate. It must
be stressed that the issue of whether the properties in the names of Rosalino,
Bartolome, Rolando, and Enrique Sy form part of Sy Bang's estate remains unsettled
since this Petition questioning the trial court's Third Partial Decision has been pending.
On the other hand, there has been a categorical pronouncement that petitioners are
holding properties belonging to Sy Bang's estate.

That the full extent of Sy Bang's estate has not yet been determined is no excuse from
complying with this Court's order. Properties of the estate have been identified - i.e.,
those in the names of petitioners - thus, these properties should be made to answer for
the widow's allowance of Rosita. In any case, the amount Rosita receives for support,
which exceeds the fruits or rents pertaining to her, will be deducted from her share of
the estate.[103]

A Final Note

We are appalled by the delay in the disposition of this case brought about by petitioners'
propensity to challenge the Court's every directive. That the petitioners would go to
extreme lengths to evade complying with their duties under the law and the orders of
this Court is truly deplorable. Not even a citation for contempt and the threat of
imprisonment seemed to deter them. Their contumacious attitude and actions have
dragged this case for far too long with practically no end in sight. Their abuse of legal
and court processes is shameful, and they must not be allowed to continue with their
atrocious behavior. Petitioners deserve to be sanctioned, and ordered to pay the Court
treble costs.

WHEREFORE, the foregoing premises considered, the Petition in G.R. No. 150797
is GRANTED, while the Petition in G.R. No. 114217 is DENIED. The Regional Trial
Court of Lucena City is directed to hear and decide Civil Case No. 8578 with dispatch.
The Motion to include Rosalino Sy, Bartolome Sy, Rolando Sy, and Heirs of Enrique Sy
as Likewise Liable for the Payment of Widow's Allowance as Heirs of Sy Bang
is DENIED. Treble costs against petitioners.

SO ORDERED.
[88]
SECTION 1. When order for distribution of residue made.--When the debts, funeral
charges, and expenses of administration, the allowance to the widow, and inheritance
tax, if any, chargeable to the estate in accordance with law, have been paid, the court,
on the application of the executor or administrator, or of a person interested in the
estate, and after hearing upon notice, shall assign the residue of the estate to the
persons entitled to the same, naming them and the proportions, or parts, to which each
is entitled, and such persons may demand and recover their respective shares from the
executor or administrator, or any other person having the same in his possession. If
there is a controversy before the court as to who are the lawful heirs of the deceased
person or as to the distributive shares to which each person is entitled under the law,
the controversy shall be heard and decided as in ordinary cases.

No distribution shall be allowed until the payment of the obligations above mentioned
has been made or provided for, unless the distributees, or any of them, give a bond, in a
sum to be fixed by the court, conditioned for the payment of said obligations within such
time as the court directs.
[99]
Rule 73, Sec. 1 of the Rules of Court states:

SECTION 1. Where estate of deceased persons settled.--If the decedent is an

inhabitant of the Philippines at the time of his death, whether a citizen or an alien, his
will shall be proved, or letters of administration granted, and his estate settled, in the
Regional Trial Court in the province in which he resides at the time of his death, and if
he is an inhabitant of a foreign country, the Regional Trial Court of any province in which
he had estate. The court first taking cognizance of the settlement of the estate of a
decedent, shall exercise jurisdiction to the exclusion of all other courts. The
jurisdiction assumed by a court, so far as it depends on the place of residence of the
decedent, or of the location of his estate, shall not be contested in a suit or proceeding,
except in an appeal from that court, in the original case, or when the want of jurisdiction
appears on the record. (Emphasis supplied .)
 NEW TRIAL or
RECONSIDERATION
- Grounds for filing motion for
new trial
 - Grounds for filing motion for
reconsideration
- Contents of motion for new
trial
- Contents of a motion for
reconsideration
- Effect of granting motion for
new trial
- Effect of granting motion for
reconsideration

EN BANC

[ G.R. NO. 141524, September 14, 2005 ]

DOMINGO NEYPES, LUZ FAUSTINO, ROGELIO FAUSTINO, LOLITO VICTORIANO,

JACOB OBANIA AND DOMINGO CABACUNGAN, PETITIONERS, VS. HON. COURT
OF APPEALS, HEIRS OF BERNARDO DEL MUNDO, NAMELY: FE, CORAZON,
JOSEFA, SALVADOR AND CARMEN, ALL SURNAMED DEL MUNDO, LAND BANK
OF THE PHILIPPINES AND HON. ANTONIO N. ROSALES, PRESIDING JUDGE,
BRANCH 43, REGIONAL TRIAL COURT, ROXAS, ORIENTAL MINDORO,
RESPONDENTS.
DECISION

CORONA, J.

Petitioners Domingo Neypes, Luz Faustino, Rogelio Faustino, Lolito Victoriano, Jacob
Obania and Domingo Cabacungan filed an action for annulment of judgment and titles
of land and/or reconveyance and/or reversion with preliminary injunction before the
Regional Trial Court, Branch 43, of Roxas, Oriental Mindoro, against the Bureau of
Forest Development, Bureau of Lands, Land Bank of the Philippines and the heirs of
Bernardo del Mundo, namely, Fe, Corazon, Josefa, Salvador and Carmen.

In the course of the proceedings, the parties (both petitioners and respondents) filed
various motions with the trial court. Among these were: (1) the motion filed by
petitioners to declare the respondent heirs, the Bureau of Lands and the Bureau of
Forest Development in default and (2) the motions to dismiss filed by the respondent
heirs and the Land Bank of the Philippines, respectively.

In an order dated May 16, 1997, the trial court, presided by public respondent Judge
Antonio N. Rosales, resolved the foregoing motions as follows: (1) the petitioners'
motion to declare respondents Bureau of Lands and Bureau of Forest Development in
default was granted for their failure to file an answer, but denied as against the
respondent heirs of del Mundo because the substituted service of summons on them
was improper; (2) the Land Bank's motion to dismiss for lack of cause of action was
denied because there were hypothetical admissions and matters that could be
determined only after trial, and (3) the motion to dismiss filed by respondent heirs of del
Mundo, based on prescription, was also denied because there were factual matters that
could be determined only after trial. [1]

The respondent heirs filed a motion for reconsideration of the order denying their motion
to dismiss on the ground that the trial court could very well resolve the issue of
prescription from the bare allegations of the complaint itself without waiting for the trial
proper.

In an order[2] dated February 12, 1998, the trial court dismissed petitioners' complaint on
the ground that the action had already prescribed. Petitioners allegedly received a copy
of the order of dismissal on March 3, 1998 and, on the 15th day thereafter or on March
18, 1998, filed a motion for reconsideration. On July 1, 1998, the trial court issued
another order dismissing the motion for reconsideration [3] which petitioners received on
July 22, 1998. Five days later, on July 27, 1998, petitioners filed a notice of appeal [4] and
paid the appeal fees on August 3, 1998.

On August 4, 1998, the court a quo denied the notice of appeal, holding that it was filed
eight days late.[5] This was received by petitioners on July 31, 1998. Petitioners filed a
motion for reconsideration but this too was denied in an order dated September 3, 1998.
[6]

Via a petition for certiorari and mandamus under Rule 65 of the 1997 Rules of Civil
Procedure, petitioners assailed the dismissal of the notice of appeal before the Court of
Appeals.

In the appellate court, petitioners claimed that they had seasonably filed their notice of
appeal. They argued that the 15-day reglementary period to appeal started to run only
on July 22, 1998 since this was the day they received the final order of the trial
court denying their motion for reconsideration. When they filed their notice of
appeal on July 27, 1998, only five days had elapsed and they were well within the
reglementary period for appeal. [7]

On September 16, 1999, the Court of Appeals (CA) dismissed the petition. It ruled that
the 15-day period to appeal should have been reckoned from March 3, 1998 or the day
they received the February 12, 1998 order dismissing their complaint. According to the
appellate court, the order was the "final order" appealable under the Rules. It held
further:

Perforce the petitioners' tardy appeal was correctly dismissed for the (P)erfection of an
appeal within the reglementary period and in the manner prescribed by law is
jurisdictional and non-compliance with such legal requirement is fatal and effectively
renders the judgment final and executory.[8]

Petitioners filed a motion for reconsideration of the aforementioned decision. This was
denied by the Court of Appeals on January 6, 2000.
In this present petition for review under Rule 45 of the Rules, petitioners ascribe the
following errors allegedly committed by the appellate court:

THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING THE

PETITIONERS' PETITION FOR CERTIORARI AND MANDAMUS AND IN AFFIRMING
THE ORDER OF THE HON. JUDGE ANTONIO N. ROSALES WHICH DISMISSED THE
PETITIONERS' APPEAL IN CIVIL CASE NO. C-36 OF THE REGIONAL TRIAL COURT,
BRANCH 43, ROXAS, ORIENTAL MINDORO, EVEN AFTER THE PETITIONERS HAD
PAID THE APPEAL DOCKET FEES.

II

THE HONORABLE COURT OF APPEALS LIKEWISE ERRED IN RULING AND

AFFIRMING THE DECISION OR ORDER OF THE RESPONDENT HON. ANTONIO M.
ROSALES THAT PETITIONERS' APPEAL WAS FILED OUT OF TIME WHEN
PETITIONERS RECEIVED THE LAST OR FINAL ORDER OF THE COURT ON JULY
22, 1998 AND FILED THEIR NOTICE OF APPEAL ON JULY 27, 1998 AND PAID THE
APPEAL DOCKET FEE ON AUGUST 3, 1998.

III

THE HONORABLE COURT OF APPEALS FURTHER ERRED IN RULING THAT THE

WORDS "FINAL ORDER" IN SECTION 3, RULE 41, OF THE 1997 RULES OF CIVIL
PROCEDURE WILL REFER TO THE [FIRST] ORDER OF RESPONDENT JUDGE
HON. ANTONIO M. MORALES DATED FEBRUARY 12, 1998 INSTEAD OF THE LAST
AND FINAL ORDER DATED JULY 1, 1998 COPY OF WHICH WAS RECEIVED BY
PETITIONERS THROUGH COUNSEL ON JULY 22, 1998.

IV.

THE HONORABLE COURT OF APPEALS FINALLY ERRED IN FINDING THAT THE

DECISION IN THE CASE OF DENSO, INC. V. IAC, 148 SCRA 280, IS APPLICABLE IN
THE INSTANT CASE THEREBY IGNORING THE PECULIAR FACTS AND
CIRCUMSTANCES OF THIS CASE AND THE FACT THAT THE SAID DECISION WAS
RENDERED PRIOR TO THE ENACTMENT OF THE 1997 RULES OF CIVIL
PROCEDURE.[9]
The foregoing issues essentially revolve around the period within which petitioners
should have filed their notice of appeal.

First and foremost, the right to appeal is neither a natural right nor a part of due
process. It is merely a statutory privilege and may be exercised only in the manner and
in accordance with the provisions of law. Thus, one who seeks to avail of the right to
appeal must comply with the requirements of the Rules. Failure to do so often leads to
the loss of the right to appeal. [10] The period to appeal is fixed by both statute and
procedural rules. BP 129,[11] as amended, provides:

Sec. 39. Appeals. The period for appeal from final orders, resolutions, awards,
judgments, or decisions of any court in all these cases shall be fifteen (15) days counted
from the notice of the final order, resolution, award, judgment, or decision appealed
from. Provided, however, that in habeas corpus cases, the period for appeal shall be
(48) forty-eight hours from the notice of judgment appealed from. x x x

Rule 41, Section 3 of the 1997 Rules of Civil Procedure states:

SEC. 3. Period of ordinary appeal. The appeal shall be taken within fifteen (15)
days from the notice of the judgment or final order appealed from. Where a record
on appeal is required, the appellant shall file a notice of appeal and a record on appeal
within thirty (30) days from the notice of judgment or final order.

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

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

As already mentioned, petitioners argue that the order of July 1, 1998 denying their
motion for reconsideration should be construed as the "final order," not the February 12,
1998 order which dismissed their complaint. Since they received their copy of the
denial of their motion for reconsideration only on July 22, 1998, the 15-day reglementary
period to appeal had not yet lapsed when they filed their notice of appeal on July 27,
1998.

What therefore should be deemed as the "final order," receipt of which triggers the start
of the 15-day reglementary period to appeal the February 12, 1998 order dismissing
the complaint or the July 1, 1998 order dismissing the MR?

In the recent case of Quelnan v. VHF Philippines, Inc.,[13] the trial court declared
petitioner Quelnan non-suited and accordingly dismissed his complaint. Upon receipt of
the order of dismissal, he filed an omnibus motion to set it aside. When the omnibus
motion was filed, 12 days of the 15-day period to appeal the order had lapsed. He later
on received another order, this time dismissing his omnibus motion. He then filed his
notice of appeal. But this was likewise dismissed for having been filed out of time.

The court a quo ruled that petitioner should have appealed within 15 days after the
dismissal of his complaint since this was the final order that was appealable under the
Rules. We reversed the trial court and declared that it was the denial of the motion for
reconsideration of an order of dismissal of a complaint which constituted the final
orderas it was what ended the issues raised there.

This pronouncement was reiterated in the more recent case of Apuyan v. Haldeman et
al.[14] where we again considered the order denying petitioner Apuyan's motion for
reconsideration as the final order which finally disposed of the issues involved in the
case.

Based on the aforementioned cases, we sustain petitioners' view that the order dated
July 1, 1998 denying their motion for reconsideration was the final order contemplated
in the Rules.

We now come to the next question: if July 1, 1998 was the start of the 15-day
reglementary period to appeal, did petitioners in fact file their notice of appeal on time?

Under Rule 41, Section 3, petitioners had 15 days from notice of judgment or final
order to appeal the decision of the trial court. On the 15 th day of the original appeal
period (March 18, 1998), petitioners did not file a notice of appeal but instead opted to
file a motion for reconsideration. According to the trial court, the MR only interrupted the
running of the 15-day appeal period. [15] It ruled that petitioners, having filed their MR on
the last day of the 15-day reglementary period to appeal, had only one (1) day left to file
the notice of appeal upon receipt of the notice of denial of their MR. Petitioners,
however, argue that they were entitled under the Rules to a fresh period of 15 days
from receipt of the "final order" or the order dismissing their motion for reconsideration.

In Quelnan and Apuyan, both petitioners filed a motion for reconsideration of the
decision of the trial court. We ruled there that they only had the remaining time of the
15-day appeal period to file the notice of appeal. We consistently applied this rule in
similar cases,[16] premised on the long-settled doctrine that the perfection of an appeal in
the manner and within the period permitted by law is not only mandatory but also
jurisdictional.[17] The rule is also founded on deep-seated considerations of public policy
and sound practice that, at risk of occasional error, the judgments and awards of courts
must become final at some definite time fixed by law.[18]

Prior to the passage of BP 129, Rule 41, Section 3 of the 1964 Revised Rules of Court
read:

Sec. 3. How appeal is taken. Appeal maybe taken by serving upon the adverse
party and filing with the trial court within thirty (30) days from notice of order or
judgment, a notice of appeal, an appeal bond, and a record on appeal. The time
during which a motion to set aside the judgment or order or for new trial has been
pending shall be deducted, unless such motion fails to satisfy the requirements of Rule
37.

But where such motion has been filed during office hours of the last day of the period
herein provided, the appeal must be perfected within the day following that in which the
party appealing received notice of the denial of said motion. [19] (emphasis supplied)

According to the foregoing provision, the appeal period previously consisted of 30 days.
BP 129, however, reduced this appeal period to 15 days. In the deliberations of the
Committee on Judicial Reorganization [20] that drafted BP 129, the raison d' etre behind
the amendment was to shorten the period of appeal [21] and enhance the efficiency and
dispensation of justice. We have since required strict observance of this reglementary
period of appeal. Seldom have we condoned late filing of notices of appeal, [22] and only
in very exceptional instances to better serve the ends of justice.

In National Waterworks and Sewerage Authority and Authority v. Municipality of

Libmanan,[23] however, we declared that appeal is an essential part of our judicial
system and the rules of procedure should not be applied rigidly. This Court has on
occasion advised the lower courts to be cautious about not depriving a party of the right
to appeal and that every party litigant should be afforded the amplest opportunity for the
proper and just disposition of his cause, free from the constraint of technicalities.

In de la Rosa v. Court of Appeals,[24] we stated that, as a rule, periods which require

litigants to do certain acts must be followed unless, under exceptional circumstances, a
delay in the filing of an appeal may be excused on grounds of substantial justice. There,
we condoned the delay incurred by the appealing party due to strong considerations of
fairness and justice.

In setting aside technical infirmities and thereby giving due course to tardy appeals, we
have not been oblivious to or unmindful of the extraordinary situations that merit liberal
application of the Rules. In those situations where technicalities were dispensed with,
our decisions were not meant to undermine the force and effectivity of the periods set
by law. But we hasten to add that in those rare cases where procedural rules were not
stringently applied, there always existed a clear need to prevent the commission of a
grave injustice. Our judicial system and the courts have always tried to maintain a
healthy balance between the strict enforcement of procedural laws and the guarantee
that every litigant be given the full opportunity for the just and proper disposition of his
cause.[25]

The Supreme Court may promulgate procedural rules in all courts. [26] It has the sole
prerogative to amend, repeal or even establish new rules for a more simplified and
inexpensive process, and the speedy disposition of cases. In the rules governing
appeals to it and to the Court of Appeals, particularly Rules 42, [27] 43[28] and 45,[29] the
Court allows extensions of time, based on justifiable and compelling reasons, for parties
to file their appeals. These extensions may consist of 15 days or more.

To standardize the appeal periods provided in the Rules and to afford litigants fair
opportunity to appeal their cases, the Court deems it practical to allow a fresh period of
15 days within which to file the notice of appeal in the Regional Trial Court, counted
from receipt of the order dismissing a motion for a new trial or motion for
reconsideration. [30]

Henceforth, this "fresh period rule" shall also apply to Rule 40 governing appeals from
the Municipal Trial Courts to the Regional Trial Courts; Rule 42 on petitions for review
from the Regional Trial Courts to the Court of Appeals; Rule 43 on appeals from quasi-
judicial agencies[31] to the Court of Appeals and Rule 45 governing appeals
bycertiorari to the Supreme Court.[32] The new rule aims to regiment or make the appeal
period uniform, to be counted from receipt of the order denying the motion for new trial,
motion for reconsideration (whether full or partial) or any final order or resolution.

We thus hold that petitioners seasonably filed their notice of appeal within the fresh
period of 15 days, counted from July 22, 1998 (the date of receipt of notice denying
their motion for reconsideration). This pronouncement is not inconsistent with Rule 41,
Section 3 of the Rules which states that the appeal shall be taken within 15 days from
notice of judgment or final order appealed from. The use of the disjunctive word "or"
signifies disassociation and independence of one thing from another. It should, as a
rule, be construed in the sense in which it ordinarily implies. [33] Hence, the use of "or" in
the above provision supposes that the notice of appeal may be filed within 15 days from
the notice of judgment or within 15 days from notice of the "final order," which we
already determined to refer to the July 1, 1998 order denying the motion for a new trial
or reconsideration.

Neither does this new rule run counter to the spirit of Section 39 of BP 129 which
shortened the appeal period from 30 days to 15 days to hasten the disposition of cases.
The original period of appeal (in this case March 3-18, 1998) remains and the
requirement for strict compliance still applies. The fresh period of 15 days becomes
significant only when a party opts to file a motion for new trial or motion for
reconsideration. In this manner, the trial court which rendered the assailed decision is
given another opportunity to review the case and, in the process, minimize and/or rectify
any error of judgment. While we aim to resolve cases with dispatch and to have
judgments of courts become final at some definite time, we likewise aspire to deliver
justice fairly.

In this case, the new period of 15 days eradicates the confusion as to when the 15-day
appeal period should be counted from receipt of notice of judgment (March 3, 1998)
or from receipt of notice of "final order" appealed from (July 22, 1998).

To recapitulate, a party litigant may either file his notice of appeal within 15 days from
receipt of the Regional Trial Court's decision or file it within 15 days from receipt of the
order (the "final order") denying his motion for new trial or motion for reconsideration.
Obviously, the new 15-day period may be availed of only if either motion is filed;
otherwise, the decision becomes final and executory after the lapse of the original
appeal period provided in Rule 41, Section 3.

Petitioners here filed their notice of appeal on July 27, 1998 or five days from receipt of
the order denying their motion for reconsideration on July 22, 1998. Hence, the notice of
appeal was well within the fresh appeal period of 15 days, as already discussed. [34]

We deem it unnecessary to discuss the applicability of Denso (Philippines), Inc. v.

IAC[35] since the Court of Appeals never even referred to it in its assailed decision.

WHEREFORE, the petition is hereby GRANTED and the assailed decision of the Court
of Appeals REVERSEDand SET ASIDE. Accordingly, let the records of this case be
remanded to the Court of Appeals for further proceedings.

No costs.

SO ORDERED.
[30]
Rule 22, Section 1. How to compute time In computing any period of time
prescribed or allowed by these Rules, or by order of the court, or by any applicable
statute, the day of the act or event from which the designated period of time begins to
run is to be excluded and the date of performance included x x x. (1997 Rules of Civil
Procedure)
[32]
As far as Rule 65 (Petition for Certiorari, Mandamus and Prohibition) is concerned,
Section 3 thereof, as amended by SC Adm. Memo. No. 00-2-03, states that no
extension of time shall be granted except for compelling reason and in no case
exceeding 15 days.
[34]
Rules of procedure may be applied retroactively to actions pending and
undetermined at the time of their passage. (Valenzuela v. Court of Appeals, 416 Phil.
289 [2001] as cited in Agpalo, Statutory Construction, 1995 Edition, p. 294)
 FIRST DIVISION
[ G.R. NO. 167245, September 27, 2006 ]
ELPIDIO S. UY, PETITIONER, VS. FIRST METRO INTEGRATED STEEL CORP. AND
HON. ANTONIO I. DE CASTRO, IN HIS CAPACITY AS PRESIDING JUDGE,
REGIONAL TRIAL COURT, NATIONAL CAPITAL JUDICIAL REGION, BRANCH 3,
MANILA, RESPONDENTS.

DECISION
YNARES-SANTIAGO, J.:
This petition for review under Rule 45 of the Rules of Court assails the Decision [1] of the
Court of Appeals in CA-G.R. SP No. 81046 dated August 27, 2004 dismissing petitioner
Elpidio S. Uy's petition for certiorari and its Resolution [2] dated February 22, 2005
denying the motion for reconsideration.

The facts show that on July 5, 1999, private respondent First Metro Integrated Steel
Corporation (FMISC) filed a complaint for sum of money with prayer for writ of
preliminary attachment against Robert Juan Uy (Robert), Midland Integrated
Construction Company (MICC) and herein petitioner Elpidio Uy, with the Regional Trial
Court of Manila, which was docketed as Civil Case No. 99-94408 and raffled to Branch
3.[3]

It is alleged that on June 3, 5 and 6, 1998, FMISC delivered to MICC, Robert and
petitioner deformed steel bars valued at P695,811.00. On June 9, 1998, Robert
allegedly delivered to FMISC Metrobank Check No. 042892 in the amount of
P695,811.00 issued by petitioner as payment. However, the check was dishonored
upon presentment and despite demands, MICC, Robert and petitioner refused to pay,
hence the complaint.

In their Answer with Counterclaim and Crossclaim, Robert and MICC alleged that they
are strangers to the contract between FMISC and petitioner; that Robert merely referred
petitioner to FMISC; that petitioner left his check in Robert's office which was picked up
by FMISC's collector; and that the deformed steel bars were delivered to and received
by petitioner's representatives as certified to by Paul Eldrich V. Uy, petitioner's son. [4]

Petitioner filed his Answer with Counterclaim [5] claiming that he had no business
transaction with FMISC; that he issued the check in favor of FMISC in the amount of
P695,811,00 but since it was not intended as payment to FMISC, he stopped the
payment thereof.
Hearings were thereafter conducted for the reception of evidence of FMISC, Robert and
MICC. The initial reception of petitioner's evidence was set on February 28, 2001 [6] but it
was cancelled because petitioner had influenza. The hearing was reset to April 26, 2001
and May 10, 2001[7] but was again cancelled and moved to October 25, 2001 and
December 13, 2001.

During the October 25, 2001 hearing, petitioner was represented by Atty. Lucas C.
Carpio, Jr. who appeared as Atty. Molina's collaborating counsel. [8] The hearing was
cancelled and rescheduled to December 13, 2001. However, on December 10, 2001,
Atty. Molina withdrew his appearance as petitioner's counsel with the latter's consent.
[9]
On December 13, 2001, Atty. Danilo Baares entered his appearance and requested
for a resetting on February 14 and 28, 2002 [10] which was granted by the trial court. On
February 14, 2002, Atty. Baares appeared but instead of presenting evidence for the
petitioner, he requested for a postponement and resetting of the hearing. [11]

During the scheduled hearing on February 28, 2002, Atty. Baares arrived late. Upon
motion of FMISC, the trial court ordered that petitioner's right to present evidence is
deemed waived and the parties were directed to file their respective memorandum.
[12]
The case was deemed submitted for decision on November 18, 2002. [13]

Atty. Baares withdrew his appearance on January 8, 2003 with petitioner's conformity.
[14]

On March 7, 2003, the trial court rendered judgment, [15] the dispositive portion of which
reads as follows:
WHEREFORE, judgment is hereby rendered in favor of plaintiff ordering defendant
Elpidio Uy to pay the former:
a) the sum of P690,000 with interest thereon at 12% per annum from July 1998 until
fully paid;

b) the sum of P110,000.00 as attorney's fees which is 16% of the principal amount;
and

c) the costs of suit.

Defendant Robert Uy's cross-claim is denied as it is now academic. The counterclaims

of both defendants herein against plaintiff and against each other are denied for lack of
merit.

SO ORDERED.[16]
On April 4, 2003, petitioner received a copy of the Decision.

On April 21, 2003, petitioner through Atty. Lucas C. Carpio, Jr. filed a Motion for New
Trial[17] on the ground of gross negligence of petitioner's counsel in failing to attend the
hearing for the reception of evidence, thus impairing his rights to due process.

The trial court denied the motion for new trial in an Order [18] dated October 1, 2003.

Dissatisfied, petitioner filed with the Court of Appeals a petition for certiorari which
dismissed the petition in its assailed Decision dated August 27, 2004. It held that the
trial court correctly denied the motion for new trial because it was filed out of time and
that a petition for certiorari is not the proper remedy for the denial of a motion for new
trial.

Petitioner's motion for reconsideration was denied, hence, this recourse on the grounds
that -
1. The Seventeenth (17th) Division of the Court of Appeals gravely erred in denying
due course to the Petition for Certiorari on technical grounds, that is, for the
purported failure of the Petitioner to file with the Court a Quo his Motion for New Trial
within the reglementary period to appeal and that the only remedy for the denial of
the latter motion is by appealing from the Judgment or Final order and not through a
Special Civil Action for Certiorari under Rule 65 of the Revised Rules of Civil
Procedure.[19]

2. The former Seventeenth (17th) Division of the Court of Appeals gravely erred in
not finding that the Public Respondent Judge committed grave abuse of discretion
tantamount to lack or excess of jurisdiction when he issued the assailed Order dated
October 1, 2003 denying Petitioner's Motion for New Trial. [20]
A scrutiny of the records discloses that while the Motion for New Trial was received by
the trial court on April 28, 2003, the date on the Registry Receipt attached to the
Affidavit of Service[21] as well as that stamped on the envelope[22] which contained the
copy of the motion, reveals that it was filed and served by registered mail on April 21,
2003, a Monday, because April 19, 2003, the last day for filing the same was a
Saturday. Section 1, Rule 22 of the Rules of Court states in no uncertain terms that if
the last day of the period thus computed falls on a Saturday, a Sunday, or a legal
holiday in the place where the court sits, the time shall not run until the next working
day. Thus, the motion was actually filed on time it having been filed on April 21, 2003,
the next working day, following the last day for filing which fell on a Saturday.

Section 9, Rule 37 of the Rules of Court which provides that the remedy to an order
denying a motion for new trial is to appeal the judgment or final order, must be read in
conjunction with Section 1, Rule 41 which provides that:
SEC. 1. Subject of appeal. - An appeal may be taken from a judgment or final order that
completely disposes of the case, or of a particular matter therein when declared by
these rules to be appealable.

No appeal may be taken from:

(a) An order denying a motion for new trial or reconsideration;

x x x x

In all the above instances where the judgment or final order is not appeasable,
the aggrieved party may file an appropriate special civil action under Rule
65. (Emphasis supplied)
Thus, the filing by the petitioner of a petition for certiorari with the Court of Appeals from
the denial of the motion for new trial by the trial court is proper.

Notwthstanding the foregoing, we find that the trial court correctly denied petitioner's
motion for new trial.

Section 1, Rule 37 provides that a motion for new trial may be filed within the period for
taking an appeal based on the following grounds:
(a) Fraud, accident, mistake or excusable negligence which ordinary prudence could
not have guarded against and by reason of which such aggrieved party has probably
been impaired in his rights; or

xxxx
Negligence to be excusable must be one which ordinary diligence and prudence could
not have guarded against.[23]

In the instant case, we find the negligence of petitioner's counsel in failing to attend the
hearings for the reception of evidence inexcusable. The trial court scheduled the
hearing for the reception of petitioner's evidence seven times. The initial hearing set on
February 28, 2001 was cancelled because petitioner allegedly had influenza. The
hearings scheduled on April 26, 2001 and May 10, 2001 were cancelled and moved to
October 25, 2001 and December 13, 2001. Petitioner was represented by Atty. Carpio,
Jr. as collaborating counsel during the hearing on October 25, 2001 but no evidence
was presented. Instead, the hearing was cancelled. On December 13, 2001, Atty.
Baares, petitioner's new counsel, appeared but he requested for a resetting. On
February 14, 2002, Atty. Baares moved to postpone the hearing to February 28, 2002
as previously scheduled. On February 28, 2002, Atty. Baares arrived late.

Scrutiny of the records disclose that the hearings were postponed or cancelled without
any justification. However, the trial court accommodated the requests for postponement
or resetting in order to accord petitioner due process. Under the circumstances, we find
petitioner's counsel's failure to attend the seven scheduled hearings without justifiable
reason tantamount to inexcusable neglect. As such, it cannot be a ground for new trial.

In addition, the Rule requires that motions for new trial founded on fraud, accident,
mistake or excusable negligence must be accompanied by affidavits of merits, i.e.,
affidavits showing the facts (not mere conclusions or opinions) constituting the valid
cause of action or defense which the movant may prove in case a new trial is granted,
because a new trial would serve no purpose and would just waste the time of the court
as well as the parties if the complaint is after all groundless or the defense is nil or
ineffective.[24]

Under the Rules, the moving party must show that he has a meritorious defense. The
facts constituting the movant's good and substantial defense, which he may prove if the
petition were granted, must be shown in the affidavit which should accompany the
motion for a new trial.[25] We examined petitioner's Affidavit of Merit and find that it did
not contain clear statements of the facts constituting a good and valid defense which he
might prove if given the chance to introduce evidence. The allegations that he has a
"meritorious defense" [26] and a "good cause"[27] are mere conclusions which did not
provide the court with any basis for determining the nature and merit of the case. An
affidavit of merit should state facts, and not mere opinion or conclusions of law.
[28]
Petitioner's motion for new trial and affidavit of merit did not mention the evidence
which he was prevented from introducing, nor did it allege that such evidence would
change the outcome of the case.

Petitioner's argument that his counsel's negligence was so gross that he was deprived
of due process fails to impress. Gross negligence is not one of the grounds for a motion
for a new trial. We cannot declare his counsel's negligence as gross as to liberate him
from the effects of his failure to present countervailing evidence. [29] In Air Philippines
Corporation v. International Business Aviation Services, Phils., Inc.,[30] we did not
consider as gross negligence the counsel's resort to dilatory schemes, such as (1) the
filing of at least three motions to extend the filing of petitioner's Answer; (2) his
nonappearance during the scheduled pretrials; and (3) the failure to file petitioner's
pretrial Brief, even after the filing of several Motions to extend the date for filing.

Besides, we find that petitioner's and his counsel's negligence are concurrent. During
the initial hearing for the reception of his evidence, petitioner was absent allegedly due
to influenza. During the succeeding scheduled hearings, petitioner was absent but his
lawyer, Atty. Molina, was present but did not present any evidence. Instead, motions for
postponement or resetting were made. In one occasion, Atty. Molina was absent but
Atty. Carpio, Jr. appeared as collaborating counsel. Still, no evidence was presented but
a resetting was again requested.

On December 13, 2001, petitioner hired Atty. Baares as his new counsel, and the
hearings were set on February 14 and 28, 2002. For petitioner, thus, to feign and insist
upon a lack of awareness of the progress of the case is to unmask a penchant for the
ludicrous.[31] When he hired the services of Atty. Baares, it is highly improbable that he
was unaware of the stage of the proceedings. In keeping with the normal cause of
events, he should have made the proper inquiries from his former counsel as to the
status of the case.

Incidentally, we find it interesting that Atty. Lucas C. Carpio, Jr. who assisted petitioner in
the preparation of the motion for new trial, wherein he claimed that his former counsel
was grossly negligent in defending his case, was petitioner's collaborating counsel and
who appeared in his behalf during the October 25, 2001 hearing but likewise presented
no evidence for the petitioner.

Finally, petitioner's counsel's inexcusable neglect did not amount to petitioner's

deprivation of due process of law. The right to due process safeguards the opportunity
to be heard and to submit any evidence one may have in support of his claim or
defense. In the instant case, petitioner was given several opportunities to be heard and
to submit evidence but he squandered them. Indeed, from lethargy is misfortune born. [32]

Blunders and mistakes in the conduct of the proceedings in the trial court as a result of
the ignorance, inexperience or incompetence of counsel do not qualify as a ground for
new trial. If such were to be admitted as valid reasons for re-opening cases, there would
never be an end to litigation so long as a new counsel could be employed to allege and
show that the prior counsel had not been sufficiently diligent, experienced or learned.
This will put a premium on the willful and intentional commission of errors by counsel,
with a view to securing new trials in the event of conviction, [33] or an adverse decision,
as in the instant case.

WHEREFORE, the instant petition is DENIED for lack of merit.

SO ORDERED.
 RELIEF FROM
JUDGMENTS,
ORDERS, OR OTHER
PROCEEDINGS
-What is a petition for
relief from judgment
-Time for filing of the
petition

FIRST DIVISION

[ G.R. NO. 164871, August 22, 2006 ]

TRUST INTERNATIONAL PAPER CORPORATION, PETITIONER, VS. MARILOU R.
PELAEZ, RESPONDENT.

DECISION

CHICO-NAZARIO, J.:

This Petition for Review under Rule 45 of the Rules of Court with an Urgent Application
for the Issuance of a Temporary Restraining Order and/or Writ of Preliminary Injunction,
seeks to set aside the Resolutions of the Court of Appeals in CA-G.R. SP No. 73356
entitled, "Marilou R. Pelaez v. National Labor Relations Commission, et al."dated 13
February 2004[1] and 29 July 2004, respectively. The first Resolution denied petitioner
Trust International Paper Corporation's (TIPCO) Petition for Relief from Judgment, while
the second denied its motion seeking reconsideration thereof.

Respondent Marilou R. Pelaez started her employment with petitioner as Secretary. She
earned various promotions, the last of which was her appointment as Corporate Cashier
in 1993.

After undergoing substantial business losses for the fiscal year 1996-1997, petitioner
implemented cost-cutting and streamlining programs to alleviate its financial
predicament. In the course of carrying out the said programs, several positions were
abolished and declared redundant, one of which was the position of Corporate Cashier.
Thus, on 24 December 1997, respondent received a memorandum from Jose Reyes,
petitioner's Chief Financial Officer, informing her that her services were terminated. She
accepted her severance from the employ of petitioner and turned over her
accountabilities to the different departments which absorbed her responsibilities.
Thereafter, she was no longer required to report for work.

Sometime in January 1998, respondent found out the creation of the position of
Treasury Clerk in petitioner's plantilla which has the same job description and
responsibilities as that of Corporate Cashier. Feeling deceived, respondent immediately
filed on 6 January 1998 a Complaint for illegal dismissal, non-payment/underpayment of
salaries, separation pay, retirement benefits, service incentive leave and sick leave
benefits, and damages against petitioner, Elon Ting, the president of TIPCO, Efren
TanLapco, the Chief Operating Officer of TIPCO and Jose E. Reyes, the Chief Financial
Officer of TIPCO before the Arbitration Branch of the DOLE-NCR.

On 12 January 1998, respondent received her separation benefits from petitioner in the
amount of P539,974.20 and correspondingly signed a Deed of Release and Quitclaim.

In a Decision dated 21 September 1999, the Labor Arbiter found petitioner guilty of
illegal dismissal and awarded to respondent backwages, separation pay and damages.
The decretal portion of the Decision reads:

CONFORMABLY WITH THE FOREGOING, judgment is hereby rendered finding

complainant to have been illegally retrenched by respondents. Consequently, they are
ordered to pay in solidum complainant as follows:

a) Backwages as of August 29 August, 1999 Php 484,000.00

b) Separation Pay Php 459,800.00

c) Moral Damages Php 300,000.00

d) Exemplary Damages Php 100,000.00

e) Vacation and sick leaves Php 55,974.20

f) 5% of the awarded money claims as attorney's fees.

The sum of Php 539,974.20 should be deducted from the awards granted to
complainant.[2]

On 22 October 1999, petitioner appealed to the National Labor Relations Commission

(NLRC).

In a Decision dated 31 May 2002, the NLRC reversed the findings and rulings of the
Labor Arbiter. It affirmed the validity of petitioner's redundancy program, which was the
ground for the termination of respondent's employment. The dispositive portion of the
Decision provides:

WHEREFORE, the decision appealed from is hereby VACATED and SET ASIDE and a
new one entered DISMISSING the complaint for lack of merit. [3]
On 5 July 2002, respondent filed a Motion for Reconsideration which the NLRC denied
in a Resolution dated 31 July 2002.

Unfazed with the setback, respondent filed a special civil action for certiorari under Rule
65 of the Rules of Court with the Court of Appeals arguing that grave abuse of discretion
was committed by the NLRC in setting aside the Labor Arbiter's Decision despite having
been duly supported by the facts and the law.

In due time, the Court of Appeals rendered a Decision in favor of respondent on the
ground that respondent's dismissal due to redundancy did not meet the requirements of
law; hence, the same was illegal. The Court of Appeals decreed:

WHEREFORE, premises considered, the instant petition is GRANTED. The decision of

public respondent NLRC in NLRC NCR CA No. 021691-99, as well as its subsequent
resolution denying petitioner's motion for reconsideration, are hereby ANNULLED AND
SET ASIDE and the decision of the labor arbiter a quoREINSTATED.[4]

The Decision of the Court of Appeals became final and executory as no appeal or
motion for reconsideration was filed by either party.

Hence, on 25 July 2003, an Entry of Judgment was issued by the Court of Appeals.

On 29 December 2003, petitioner filed a Petition for Relief from Judgment with the
Court of Appeals. Petitioner anchored its petition on the "excusable negligence" of its
counsel Siguion Reyna, Montecillo & Ongsiako's (Siguion Reyna) law firm and the gross
negligence of Atty. Elena C. Cardinez (Atty. Cardinez), a newly hired junior associate of
the Siguion Reyna law firm, who allegedly handled the case for petitioner. Petitioner
revealed that the instant case was assigned to Atty. Cardinez in June 2003 and that all
notices, orders and legal processes in connection with the instant case were
immediately forwarded to her for appropriate action.

Petitioner contended that the Siguion Reyna law firm was never remiss in its duty to
follow up the status of the case with Atty. Cardinez. In fact, it was the law firm itself,
through Atty. Cardinez's supervising lawyers and co-counsels, Attys. Carla E.
Santamaria-Sea, Cheryll Ann L. Pea and Rean Mayo D. Javier, who had to elicit
reports from her. When asked about the developments of the case, Atty. Cardinez
supposedly informed the law firm that everything was in order regarding petitioner's
defense, when in fact, it was not. Eventually, Atty. Cardinez never reported to work and
that she was nowhere to be found despite the law firm's diligent efforts to search for her.
She did not turn over the case files in her possession, including the Court of Appeals file
folders of the instant case.

Petitioner maintained that the acts of Atty. Cardinez in misrepresenting to the law firm
that everything was in order regarding its defense, when in fact, it was not, and the fact
that she took the files with her constitute gross negligence and should not bind
petitioner. Corollarily, petitioner argues that the Siguion Reyna law firm's fault can only
be categorized as an excusable neglect for it was not remiss in making follow-ups about
the status of the case with Atty. Cardinez. It acknowledged that the law firm's mistake
was that it put faith in the assurances of Atty. Cardinez, who repeatedly gave her word
that nothing was amiss in the defense of petitioner's position in the instant case.

Unconvinced, the Court of Appeals, in a Resolution dated 13 February 2004, denied

petitioner's Petition for Relief from Judgment, ratiocinating as follows:

There is no use arguing that the instant case was unloaded by Attys. Pea and Javier,
to a certain Atty. Elena C. Cardinez, as it is the responsibility of the law firm of Siguion
Reyna Montecillo and Ongsiako Law Office itself, to prepare and submit the appropriate
relief or remedy of its client. The negligence or failure of its partners or associates to
perform its duties and tasks is not excusable negligence that could merit relief under
Rule 38 of the Rules of Court.

The doctrinal rule is that the negligence of the counsel binds the client because,
otherwise, there would never be an end to a suit so long as counsel could allege its own
fault or negligence to support the client's case and obtain remedies and relief already
lost by the operation of law.[5]

Subsequently, petitioner filed a Motion for Reconsideration which was denied by the
Court of Appeals in a Resolution dated 29 July 2004.

Hence, the instant Petition.

In its Memorandum, petitioner submitted the following issues:

A.

WHETHER THE COURT OF APPEALS COMMITTED GRAVE ERROR WHEN IT

FAILED TO RECOGNIZE THE GROSS AND PALPABLE NEGLIGENCE, BORDERING
ON FRAUD, COMMITTED BY PETITIONER'S FORMER HANDLING COUNSEL, ATTY.
CARDINEZ, WHOSE NEGLIGENCE AND ACTIVE MISREPRESENTATION
PREVENTED PETITIONER FROM EXHAUSTING ALL THE LEGAL REMEDIES
AVAILABLE TO IT, PARTICULARLY, THE REMEDY OF APPEAL TO THE SUPREME
COURT.

B.

WHETHER THE COURT OF APPEALS COMMITTED SERIOUS ERROR WHEN IT

STRICTLY APPLIED THE TECHNICAL RULES OF PROCEDURE TO THE
DETRIMENT OF SUBSTANTIAL JUSTICE.

C.

WHETHER THE COURT OF APPEALS COMMITTED GRAVE ERROR WHEN IT

FAILED TO TAKE INTO CONSIDERATION PETITIONER'S GOOD AND SUBSTANTIAL
DEFENSE, WHICH MUST BE FULLY VENTILATED, CONSIDERING THAT IT STANDS
TO LOSE THE STAGGERING SUM OF MORE THAN TWO MILLION PESOS
(P2,000,000.00)[6]

At the onset, it must be pointed out that the present petition seeking the setting aside of
the Court of Appeals' Resolutions dated 13 February 2004 and 29 July 2004, denying
petitioner's petition for relief from judgment, is a petition for review on certiorari under
Rule 45 of the Rules of Court.

Section 1(b) of Rule 41 of the Rules of Court, however, provides:

SECTION 1. Subject of appeal. An appeal may be taken from a judgment or final

order that completely disposes of the case, or of a particular matter therein when
declared by these Rules to be appealable.

No appeal may be taken from:

x x x x

(b) An order denying a petition for relief or any similar motion seeking relief from
judgment.

xxxx

In all the above instances where the judgment or final order is not appealable, the
aggrieved party may file an appropriate special civil action under Rule 65.

Thus, in Azucena v. Foreign Manpower Services,[7] it was held:

Neither may petitioner seek to set aside the Court of Appeals' April 26, 2001 Resolution
denying his petition for relief from judgment through the same mode of review (petition
for review on certiorari), for under Section 1(b) of Rule 41 of the Rules of Court, the
denial of a petition for relief from judgment is subject only to a special civil action for
certiorari under Rule 65. (Emphasis supplied.)

Based on the foregoing, the denial of a petition for relief from judgment can only be
assailed before this Court via a special civil action under Rule 65 and not through a
petition for review on certiorari under Rule 45. In availing of a petition for review on
certiorari under Rule 45 to obtain the reversal of the Court of Appeals' Resolutions
denying its petition for relief from judgment, petitioner certainly has made use of the
wrong remedy.

Even if this Court was to treat the instant petition as a special civil action
for certiorari under Rule 65, the same would still have to be dismissed.

In Mercury Drug Corporation v. Court of Appeals,[8] the Court clarified the nature of a
petition for relief from judgment:

A petition for relief from judgment is an equitable remedy that is allowed only in
exceptional cases when there is no other available or adequate remedy. When a party
has another remedy available to him, which may be either a motion for new trial or
appeal from an adverse decision of the trial court, and he was not prevented by fraud,
accident, mistake or excusable negligence from filing such motion or taking such
appeal, he cannot avail himself of this petition. x x x.
This Court likewise ruled:

Indeed, relief will not be granted to a party who seeks avoidance from the effects of the
judgment when the loss of the remedy at law was due to his own negligence; otherwise
the petition for relief can be used to revive the right to appeal which had been lost thru
inexcusable negligence.[9]

In the present case, petitioner posits that the Court of Appeals committed grave error
when it failed to recognize the gross and palpable negligence, bordering on fraud,
committed by Atty. Cardinez, whose negligence prevented petitioner from exhausting all
the legal remedies available to it.

It is undisputed that the counsel of record of petitioner is the Siguion Reyna law firm.
The law firm failed to notify petitioner of the adverse decision of the Court of Appeals to
enable it to file a motion for reconsideration or to appeal from the said decision. The law
firm's failure to inform petitioner of the decision is inexcusable negligence which cannot
be a ground for relief from judgment. This is in line with jurisprudence that notice sent to
counsel of record is binding upon the client, and the neglect or failure of counsel to
inform his client of an adverse judgment resulting in the loss of right to appeal will not
justify the setting aside of a judgment that is valid and regular on its face. [10]

The negligence of Atty. Cardinez, the law firm's new associate, apparent in her
mishandling of the cause of petitioner likewise constitutes inexcusable negligence.
Negligence, to be excusable, must be one which ordinary diligence and prudence could
have not guarded against.

It must be pointed out that Atty. Cardinez's name did not appear in any of the pleadings
filed by petitioner before the Labor Arbiter, the NLRC, and the Court of Appeals. It was
only in the petition for relief filed before the Court of Appeals that the name of Atty.
Cardinez appeared for the first time. In the petition for relief, Atty. Cardinez was blamed
by petitioner and its counsel, the Siguion Reyna law firm, for squandering petitioner's
opportunity to appeal the Court of Appeals' decision. What appears on the records is
that the Comment and Memorandum of petitioner before the Court of Appeals were
signed by Attys. Carla E. Santamaria-Sea, Cheryll Ann L. Pea and Rean Mayo D.
Javier.
From the foregoing, it is apparent that the handling lawyers of the law firm were putting
the blame on Atty. Cardinez when they lost the case and forgot to file the appeal.
Besides, if the case was, indeed, unloaded to Atty. Cardinez, the supervising lawyers
would have detected the omission of the former considering that it is a common practice
in a law firm that when it hires a new associate, his or her work is ordinarily reviewed by
the more senior associate of the law firm. If the supervising lawyers of Atty. Cardinez,
namely, Attys. Sea, Pea and Javier, were not remiss in their duty to follow up the
status of the case, they would have known that they have not received or reviewed any
pleadings from Atty. Cardinez pertaining to the case under consideration. Simply,
petitioner's counsel, the Siguion Reyna law firm itself, was guilty of inexcusable neglect
in handling petitioner's case before the Court of Appeals.

Petitioner insists that its case is an exception to the general rule that the negligence of
counsel binds the client. Petitioner invokes this Court's ruling in People's Homesite and
Housing Operation v. Workmen's Compensation Commission, [11] Somoso v. Court of
Appeals,[12] Apex Mining, Inc. v. Court of Appeals, [13] Salazar v. Court of Appeals,
[14]
Sarraga, Sr. v. Banco Filipino Savings and Mortgage Bank, [15] and Heirs of Pael v.
Court of Appeals,[16] where this Court departed from the general rule that the client is
bound by the mistakes of his lawyer considering that, in said cases, the lawyers were
grossly negligent in their duty to maintain their client's cause and such amounted to a
deprivation of their client's property without due process of law. In said cases, the
petitions for relief from judgment were given due course. However, we find that the
ruling in said cases do not apply in the instant case.

In People's Homesite, the counsel failed to apprise the petitioners therein of the hearing
and the case was heard in their absence. The counsel also did not inform the petitioners
that he had received a copy of the decision and neither did he file a motion for
reconsideration or a petition to set aside judgment to protect the interests of his clients.
When asked to explain, the counsel merely said that he did not inform the petitioners
because the case escaped his attention. On account of these attendant facts, this Court
found that there was "something fishy and suspicious" with the actions of counsel. The
Court therein, in allowing the petition for relief from judgment and in remanding the case
to the court of origin, had, in mind, the attending probability that petitioner's counsel
colluded with the adverse party, which is utterly wanting in the present case.

In the case at bar, petitioner's counsel was able to actively defend its case before the
Labor Arbiter, the NLRC and the Court of Appeals. In fact, the Siguion Reyna law firm
was able to obtain a favorable decision for petitioner before the NLRC. The instant case
is clearly at variance with the People's Homesite case.

In Somoso, the counsel of spouses Somoso informed them that he was withdrawing his
appearance as counsel of the case. A decision dated 8 March 1985 was issued by the
trial court against the spouses. The counsel received the decision on 15 August 1985,
but the spouses came to know of the decision only on 27 September 1985, the day they
received the letter from their counsel informing them of such decision. On 27 September
1985, the counsel belatedly filed in court his motion to withdraw as counsel which was
dated 10 June 1985. This Court granted spouses' petition for relief from judgment as
they were able to prove that they were entitled thereto considering that their counsel
had earlier informed them of his intention to withdraw from the case, but belatedly filed
the formal withdrawal.

In the present case, it has been Attys. Santamaria-Sea, Pea and Javier who
participated in the proceedings before the Court of Appeals. They did not notify the
Court of Appeals that they had withdrawn from the case. There was completely no
reason for them not to file an appeal, being the handling counsel of record during the
pendency of the case before the Court of Appeals.

The case of Apex Mining, Inc. invoked by petitioner is not on all fours with the instant
case. In Apex, petitioners' counsel did not attend the scheduled hearing for the
reception of the evidence. The law firm did not even bother to inform its client of the
scheduled hearing, as a result of which both counsel and petitioners were unable to
attend the same. After the trial court issued an order declaring petitioners in default for
having waived their right to present evidence, their counsel did not take steps to have
the same set aside. In addition, the negligent counsel deliberately misrepresented in the
progress report that the case was still pending with Court of Appeals when the same
was dismissed months earlier. These circumstances are absent in the case under
consideration because at no time was petitioner was deprived of its right to submit
evidence to support its argument.

Neither can the case of Salazar be applied in the case under consideration. In the
former, petitioners were deprived of their right to present evidence at the trial through
the gross and palpable mistake of their counsel who agreed to submit the case for
decision without fully substantiating their defense. In the instant case, petitioner was
able to ventilate its defense though various pleadings and documentary evidence before
the Labor Arbiter, the NLRC and the Court of Appeals.

In Sarraga, the petition for relief from judgment was granted due to the attending
circumstance where the counsel of record was grossly negligent in defending the
cause of the client. On the other hand, in the present case, petitioner is placing the
blame on the alleged gross negligence of an attorney who was not even been shown to
have participated in the proceedings of the case.

In Heirs of Antonio Pael, this Court found that there was a showing of "badges of fraud"
displayed by the counsel of the unsuccessful party when he resorted to two clearly
inconsistent remedies, namely appeal and motion for new trial. In contrast, the instant
case merely illustrates a scenario where a counsel committed a simple and inexcusable
negligence to the prejudice of the client.

In sum, this is not a case where the negligence of counsel is one that is so gross,
palpable, pervasive and reckless which deprives the party of his or her day in court. For
this reason, the Court need no longer concern itself with the propriety of the ruling of the
Court of Appeals reinstating the decision of the Labor Arbiter. The Court is bound by the
Court of Appeal's ruling which had become final and executory due to the simple and
inexcusable negligence of petitioner's counsel in allowing the reglementary period to
lapse without perfecting an appeal.

WHEREFORE, the petition is DENIED. The Resolutions of the Court of Appeals dated
13 February 2004 and 29 July 2004 in CA-G.R. SP No. 73356 denying petitioner's
petition for relief from judgment, are AFFIRMED. Costs against petitioner.

SO ORDERED.
 FIRST DIVISION

[ G.R. No. 146611, February 06, 2007 ]

TANCREDO REDEA, PETITIONER, VS. HON. COURT OF APPEALS AND

LEOCADIO REDEA, RESPONDENTS.

DECISION

GARCIA, J.:

In this special civil action for certiorari under Rule 65 of the 1997 Rules of Civil
Procedure, petitioner Tancredo Redea (Tancredo, hereafter) seeks the annulment and
setting aside of the Resolution[1] dated April 28, 2000 of the Court of Appeals in CA-
G.R. CV No. 59641, as reiterated in its Resolution[2] of November 16, 2000, denying
the petitioner's motion for reconsideration.

The present controversy sprung from an action for partition filed by petitioner Tancredo
against his older half-brother, herein private respondent Leocadio Redea (Leocadio,
for brevity) before the then Court of First Instance (now Regional Trial Court [RTC]) of
San Pablo City, Laguna, and thereat docketed as Civil Case No. S-241 which was
subsequently inherited by Branch 33 of the RTC, Siniloan, Laguna.

The basic complaint for partition alleges that plaintiff Tancredo and defendant Leocadio
are both sons of one Maximo Redea: Tancredo, by Maximo's marriage to Magdalena
Fernandez, and Leocadio, by Maximo's previous marriage to Emerenciana Redea.
The complaint further alleged that the parties' common father, Maximo, left several
pieces of realty, to wit: a residential lot at M. Calim Street, Famy, Laguna; a riceland at
Poroza, Famy, Laguna; and another parcel of land at Maate, also in Famy, Laguna.

In a decision[3] dated August 20, 1997, the trial court, based on the evidence presented,
confined the partition to only the property actually pertaining to the estate of the parties'
deceased father and co-owned by them, namely, the parcel of land at Maate, and
accordingly rendered judgment as follows:

WHEREFORE, premises considered, judgment is hereby rendered ordering the

defendant [now respondent Leocadio] to partition only the property located at Maate,
Famy, Laguna after plaintiff's [Tancredo's] reimbursement of the expenses incurred by
the defendant in relation to the said lot. However, partition cannot be effected with
regard to properties located at M. Calim Street, Famy, Laguna and the property located
at Poroza, Famy, Laguna, as the same belong to the defendant. No pronouncement as
to costs.

SO ORDERED. (Words in brackets supplied)

On December 11, 1997, petitioner filed with the trial court a Notice of Appeal.[4] The
court gave due course to the notice and directed the elevation of the records of the case
to the CA whereat petitioner's appeal was docketed asCA-G.R.CV No. 59641.

On September 28, 1998, the CA issued a resolution directing petitioner, as appellant, to

file his appellant's brief. Evidently, the period for filing the brief was even extended by
the CA.

On March 9, 1999, there being no appellant's brief filed within the extended period, the
CA issued a resolution[5]considering the appeal abandoned and accordingly dismissing
the same. The dismissal resolution reads:

For failure of plaintiff-appellant [now petitioner] to file the required brief within the
extended period, the instant appeal is hereby considered ABANDONED and
accordingly DISMISSED, pursuant to Section 1(e), Rule 50, 1997 Rules of Civil
Procedure.

On November 8, 1999 or eight (8) months after the CA issued the above resolution,
petitioner filed a motion for reconsideration [6] thereof. In a resolution[7] of November 25,
1999, the CA denied the motion.

Then, on December 28, 1999, in the same CA-G.R. CV No. 59641, petitioner filed
a Petition for Relief[8] bearing date December 27, 1999, anchored on Section 2, [9] Rule
38 of the 1997 Rules of Civil Procedure. In that pleading, petitioner prays the CA to set
aside its dismissal resolution of March 9, 1999, supra, reinstate his appeal and grant
him a fresh period of forty-five (45) days from notice within which to file his appellant's
brief.

In the herein assailed Resolution[10] dated April 28, 2000, the CA denied the
aforementioned Petition for Relief, thus:
WHEREFORE, the petition for relief dated 27 December 1999 is hereby DENIED.

SO ORDERED.

Explains the CA in said resolution:

Petition for relief is not among the remedies available in the Court of Appeals. In fact,
authorities in remedial law (noted authors Regalado, Herrera, and Feria) are one in their
commentaries that these petitions are filed with the trial courts. Not one of them has
advanced an opinion or comment that this equitable relief can be obtained in the Court
of Appeals. Under Rule 47, an annulment of judgment or final orders and resolutions
may be filed before this court based on the ground of extrinsic fraud which seems to be
the premise of the petition. Perhaps it is worth looking into by the petitioner if the factual
basis of the present petition for relief may qualify as an extrinsic fraud, under Rule 47.

Petitioner's motion for reconsideration of the above-mentioned resolution was likewise

denied by the CA in its equally challenged Resolution[11] of November 16,
2000, wherein the appellate court further wrote:

Under the 1964 Rules of Court, there was only one court where a petition for relief may
be filed - the Court of First Instance, now the Regional Trial Court. Section 1 thereof
governs a petition to Court of First Instance for relief from judgment of inferior court
while Section 2 thereof governs petition to Court of First Instance for relief from
judgment or other proceeding thereof. The 1997 Rules of Civil Procedure has altered
the said precept. Now, it must be filed before the Municipal Trial Courts or Metropolitan
Trial Courts for judgments or final orders or other proceedings taken in said courts, and
in the same case. And for judgment, order, or other proceedings in the Regional Trial
Court, it must be filed in the same Regional Trial Court which rendered the judgment or
final order, or other proceedings taken and in the same case. In other words, under the
present rule, such a petition may be filed in the same court which rendered the
judgment or final order, or proceedings taken and in the same case. This is in
accordance with uniform procedure rule for Municipal and Regional Trial Courts.

The above construction to limit the term "any court" to Municipal Trial Court and
Regional Trial Court - and not to include the Court of Appeals - finds support in Section
7 of the Rules which states:
Sec. 7. Procedure where the denial of an appeal is set aside. - Where the denial of
an appeal is set aside, the lower court shall be required to give due course to the
appeal and to elevate the record of the appealed case as if a timely and proper
appeal had been made.

Significantly, there is no specific provision in both the 1964 and 1997 Rules of Court
making the petition under Rule 38, applicable in the Court of Appeals. The procedure in
the Court of Appeals from Rule 44 to Rule 55 with the exception of Rule 45 which
pertains to the Supreme Court, identifies the remedies available before said court such
as annulment of judgment or final orders and resolution (Rule 47); motion for
reconsideration (Rule 52); and, new trial, (Rule 53). Nowhere is petition for relief under
Rule 38 mentioned.

But even as the CA stood firm on its stand that a petition for relief from denial of appeal
is not among the remedies available before the CA itself, the appellate court, in the
same Resolution of November 16, 2000, left the final determination of the question to
this Court, thus:

Parenthetically, the main question presented herein is novel in that there is yet no
definite and definitive jurisprudence from the Supreme Court. Perhaps, the case will
clarify this gray area in our adjective law for guidance of the Bench and Bar. The issue
should be elevated to that Tribunal.

Presently, petitioner is now before this Court via the instant recourse on his submission
that the CA committed grave abuse of discretion when it -

XXX RULED THAT A PETITION FOR RELIEF IS NOT AN AVAILABLE REMEDY IN

THE COURT OF APPEALS.

II

XXX REFUSED TO GRANT THE PETITION DESPITE A CLEAR SHOWING THAT (A)
PETITIONER, BY REASON OF FRAUD AND MISTAKE, WAS PREVENTED FROM
PROSECUTING HIS APPEAL, AND (B) PETITIONER HAS A GOOD AND
SUBSTANTIAL CAUSE OF ACTION AGAINST PRIVATE RESPONDENT.
We DISMISS.

In Hagonoy Market Vendor Association v. Municipality of Hagonoy, Bulacan, G.R. No.

137621, February 6, 2002, then Associate Justice, now Chief Justice Reynato S. Puno,
reminded us that 6

Laws are of two (2) kinds: substantive and procedural. Substantive laws, insofar as
their provisions are unambiguous, are rigorously applied to resolve legal issues on the
merits. In contrast, courts generally frown upon an uncompromising application of
procedural laws so as not to subvert substantial justice. Nonetheless, it is not totally
uncommon for courts to decide cases based on a rigid application of the so-called
technical rules of procedure as these rules exist for the orderly administration of justice.

From the petition, it is clear that this Court is called upon to relax the application of
procedural rules, or suspend them altogether, in favor of petitioner's substantial rights.
There is no doubt as to the power of this Court to do that. In a fairly recent case, we
reiterated:

The Court has often stressed that rules of procedure are merely tools designed to
facilitate the attainment of justice. They were conceived and promulgated to effectively
aid the court in the dispensation of justice. Courts are not slaves to or robots of
technical rules, shorn of judicial discretion. In rendering justice, courts have always
been, as they ought to be, conscientiously guided by the norm that on the balance,
technicalities take a backseat against substantive rights, and not the other way around.
Thus, if the application of the Rules would tend to frustrate rather than promote justice,
it is always within our power to suspend the rules or except a particular case from its
operation.[12]

The Rules itself expressly states in Section 2 of Rule 1 that the rules shall be liberally
construed in order to promote their object and to assist the parties in obtaining just,
speedy and inexpensive determination of every action and proceeding. Courts,
therefore, not only have the power but the duty to construe and apply technical rules
liberally in favor of substantive law and substantial justice. Furthermore, this Court,
unlike courts below, has the power not only to liberally construe the rules, but also to
suspend them, in favor of substantive law or substantial rights. Such power inherently
belongs to this Court, which is expressly vested with rule-making power by no less than
the Constitution.[13]
It is equally settled, however, that this Court's power to liberally construe and even to
suspend the rules, presupposes the existence of substantial rights in favor of which, the
strict application of technical rules must concede. The facts are borne out by the
records pertaining to petitioner's purported undivided share in the property at M. Calim
Street, Famy, Laguna, and the property in Poroza clearly showed that these two
properties had been subject of an agreement (Exh. "1") whereby petitioner recognized
respondent's rights to said properties. This fact binds this Court, there being nothing on
record with the trial court as to the herein alleged fraud against the petitioner. Upon
thorough deliberation of the supposed substantial rights claimed by the petitioner with
the court below, the Court finds no cogent basis to favorably rule on the merits of the
appeal even if it may be given due course which is indispensable to justify this Court in
considering this case as an exception to the rules.

The present case will have to be decided in accordance with existing rules of
procedure. We apply the settled principle that petition for relief under Rule 38 of the
Rules of Court is of equitable character, allowed only in exceptional cases as when
there is no other available or adequate remedy.[14] Hence, a petition for relief may not
be availed of where a party has another adequate remedy available to him, which is
either a motion for new trial or appeal from the adverse decision of the lower court, and
he is not prevented from filing such motion or taking the appeal. The rule is that relief
will not be granted to a party who seeks to be relieved from the effect of the judgment
when the loss of the remedy at law is due to his own negligence, or a mistaken mode of
procedure; otherwise, the petition for relief will be tantamount to reviving the right of
appeal which has already been lost either because of inexcusable negligence or due to
a mistake in the mode of procedure taken by counsel. [15]

Under Section 2 of Rule 38, supra, of the Rules of Court, a party prevented from taking
an appeal from a judgment or final order of a court by reason of fraud, accident, mistake
or excusable negligence, may file in the same court and in the same case a petition for
relief praying that his appeal be given due course. This presupposes, of course, that no
appeal was taken precisely because of any of the aforestated reasons which prevented
him from appealing his case. Hence, a petition for relief under Rule 38 cannot be
availed of in the CA, the latter being a court of appellate jurisdiction. For sure, under the
present Rules, petitions for relief from a judgment, final order or other proceeding
rendered or taken should be filed in and resolved by the court in the same case from
which the petition arose. Thus, petition for relief from a judgment, final order or
proceeding involved in a case tried by a municipal trial court shall be filed in and
decided by the same court in the same case, just like the procedure followed in the
present Regional Trial Court.[16]

Here, the record shows that petitioner in fact filed a Notice of Appeal with the trial court,
which the latter granted in its order of December 11, 1997 and ordered the elevation of
the records to the CA. In turn, the CA, in its resolution of September 28, 1998, required
the petitioner, thru his former counsel, Atty. Geminiano Almeda, to file his appellant's
brief. But petitioner failed to comply. Consequently, in its resolution of March 9, 1999,
the CA considered the appellant's appeal as ABANDONED and DISMISSED the same.

Additionally, after the dismissal of his appeal, petitioner filed with the CA a motion for
reconsideration of the dismissal resolution. Unfortunately, however, the motion was filed
very much late on November 8, 1999. Expectedly, in its resolution [17] of November 25,
1999, the CA denied the motion for reconsideration, to wit:

The last day to file a motion for reconsideration was on 06 April 1999 and as of 18
October 1999 no such motion was ever filed; in fact on 19 October 1999 the court
resolved that an entry of judgment may now be issued. The motion for reconsideration,
however, pleas for leniency on account of his former lawyer's inefficiency and
negligence in that he failed to appeal the case. This is not well taken.

His former lawyer's lack of fidelity and devotion to his client in the discharge of his duty
of perfecting the appeal on time without demonstrating fraud, accident, mistake or
excusable negligence cannot be a basis for judicial relief. The client has to bear the
adverse consequences of the inexcusable mistake or negligence of his counsel or of the
latter's employee and may not be heard to complain that the result of the litigation might
have been different had he proceeded differently (Inocando v. Inocando, 100 Phil. 266)

WHEREFORE, the motion is hereby DENIED.

Petitioner presents himself as a mere farmer seeking the Court's leniency to the point of
disregarding the rules on reglementary period for filing pleadings. But he fails to point
out any circumstance which might lead the Court to conclude that his station in life had
in any way placed his half-brother in a more advantageous position. As we see it,
petitioner failed to show diligence in pursuing his cause. His condition as a farmer, by
itself alone, does not excuse or exempt him from being vigilant on his right. He cannot
lay the blame solely on his former lawyer. It is settled that clients are bound by the
mistakes, negligence and omission of their counsel. [18] While, exceptionally, a client may
be excused from the failure of his counsel, the circumstances obtaining in this case do
not convince the Court to take exception.

In seeking exemption from the above rule, petitioner claims that he will suffer
deprivation of property without due process of law on account of the gross negligence
of his previous counsel. To him, the negligence of his former counsel was so gross that
it practically resulted to fraud because he was allegedly placed under the impression
that the counsel had prepared and filed his appellant's brief. He thus prays the Court
reverse the CA and remand the main case to the court of origin for new trial.

Admittedly, this Court has relaxed the rule on the binding effect of counsel's negligence
and allowed a litigant another chance to present his case (1) where the reckless or
gross negligence of counsel deprives the client of due process of law; (2) when
application of the rule will result in outright deprivation of the client's liberty or property;
or (3) where the interests of justice so require. [19] None of these exceptions obtains
here.

For a claim of counsel's gross negligence to prosper, nothing short of clear

abandonment of the client's cause must be shown. Here, petitioner's counsel failed to
file the appellant's brief. While this omission can plausibly qualify as simple negligence,
it does not amount to gross negligence to justify the annulment of the proceedings
below.

In Legarda v. Court of Appeals,[20] where the Court initially held that the counsel's failure
to file pleadings at the trial court and later on appeal amounted to gross negligence, the
Court, on motion of the respondent therein, granted reconsideration and applied the
general rule binding the litigant to her counsel's negligence. In said case, the Court
noted that the proceedings which led to the filing of the petition "were not attended by
any irregularity." The same observation squarely applies here.

To recapitulate, petitioner is not entitled to relief under Rule 38, Section 2 of the Rules of
Court. He was not prevented from filing his notice of appeal by fraud, accident, mistake
or excusable negligence, as in fact he filed one. The relief afforded by Rule 38 will not
be granted to a party who seeks to be relieved from the effects of the judgment when
the loss of the remedy of law was due to his own negligence, or a mistaken mode of
procedure for that matter; otherwise, the petition for relief will be tantamount to reviving
the right of appeal which has already been lost, either because of inexcusable
negligence or due to a mistake of procedure by counsel. [21] The Rules allow a petition for
relief only when there is no other available remedy, and not when litigants, like the
petitioner, lose a remedy by negligence.

On a final note, the extraordinary writ of certiorari may be issued only where it is clearly
shown that there is patent and gross abuse of discretion as to amount to an evasion
of positive duty or to virtual refusal to perform a duty enjoined by law, or to act at all
in contemplation of law, as where the power is exercised in an arbitrary and despotic
manner by reason of passion or personal hostility.[22] The Court finds no such abuse of
discretion in this case.

WHEREFORE, the instant petition is DISMISSED and the assailed resolutions of the
CA are AFFIRMED.

No pronouncement as to costs.

SO ORDERED.
[9]
SEC. 2. Petition for relief from denial of appeal.- When a judgment or final order is
rendered by any court in a case, and a party thereto, by fraud, accident, mistake, or
excusable negligence, has been prevented from taking an appeal, he may file a petition
in such court and in the same case praying that the appeal be given due course.
[13]
The Supreme Court shall have the power to promulgate rules concerning the
protection and enforcement of constitutional rights, pleading, practice, and procedure in
all courts. The admission to the practice of law, the Integrated Bar, and legal assistance
to the underprivileged. (Art. VIII, Sec. 5, Subsec. 5, 1987 Constitution).
 THIRD DIVISION

[ G.R. No. 165544, October 02, 2009 ]

ROMEO SAMONTE, PETITIONER, VS. S.F. NAGUIAT, INC., RESPONDENTS.

DECISION

PERALTA, J.:

Before the Court is a petition for review on certiorari filed by Romeo Samonte which
seeks to set aside the Decision [1] dated March 26, 2004 of the Court of Appeals (CA) in
CA-G.R. SP No. 70213, dismissing his petition forcertiorari of the Order[2] dated
December 21, 2001 of the Regional Trial Court (RTC), Malolos, Bulacan, in Civil Case
No. 585-M-2000, denying his petition for relief from judgment. Also assailed is the CA
Resolution[3] dated September 28, 2004, denying petitioner's motion for reconsideration.

The antecedent facts, as narrated by the Court of Appeals, are as follows:

Petitioner Romeo Samonte is the President and General Manager of S.B. Commercial
Traders, Inc. (SB Traders, for brevity), a corporation engaged in the business of retailing
motor oils and lubricants. It (sic) purchases Mobil products on credit basis from one of
Mobil Oil Philippines' authorized dealers in Bulacan, herein private respondent S.F.
Naguiat, Inc., with an express agreement to pay within a period of 60 days from date of
delivery.

On September 4, 2000, the private respondent filed a complaint for collection of sum of
money against SB Traders and the petitioner with Branch 9 of the Regional Trial Court
(RTC) of Malolos, Bulacan. The private respondent alleged that SB Traders incurred an
obligation to pay the total sum of P1,105,143.27 arising from the sale of Mobil Oil
products. It further averred that SB Traders was merely an alter ego of the petitioner
and that it was operating for his sole benefit.. Therefore, the petitioner and SB Traders
must be held solidarily liable for the subject amount.

The petitioner filed an answer denying all the material averments of the complaint, As
special and affirmative defenses, he claimed that he was not acting in his personal
capacity and was merely acting for and in behalf of SB Traders; that SB Traders never
denied its obligation to pay for the purchases it made with the private respondent but
was merely requesting for more time to settle its accounts; and that to effect payment
for the subject amount, it had already issued postdated checks of P25,000.00 per month
covering the period from June to December 1999 to the private respondent.

Despite due notice, the petitioner and his counsel failed to appear at the scheduled pre-
trial conference on April 20, 2001. Hence, trial ensued where the public respondent
allowed the ex parte presentation of the private respondent's evidence before the
Branch Clerk of Court.

On May 25, 2001, the public respondent rendered judgment in favor of the private
respondent, the dispositive portion of which reads:

WHEREFORE, premises considered, judgment is hereby rendered ordering defendants

S.B. Commercial Traders, Inc. and Romeo G. Samonte to pay, jointly and severally,
unto plaintiff S.F. Naguiat, Incorporated the following amounts: P1,105,143.27 as prayed
for in the complaint representing the value of the oil products reflected in the Invoices
marked as Exhibits 'B' to ' O' and 'O-1'-and 'P', with interest thereon at the rate of 18%
per annum from the filing of the complaint on September 4, 2000 until the same shall
have been paid in full; P10,000.00 as exemplary damages; and 20% of the entire
amount due and demandable from the defendants as and for attorney's fees, plus the
costs of the suit.

SO ORDERED.

The petitioner failed to appeal the said decision. Thereafter, on motion by the private
respondent, the public respondent ordered the issuance of a writ of execution on July
30, 2001.

On August 22, 2001, the petitioner filed a petition for relief from judgment on the ground
that the public respondent made serious and prejudicial mistakes in appreciating the
evidence presented. He argued that a corporation had a personality separate and
distinct from that of its officers and therefore, he cannot be held solidarily liable for
obligations contracted by corporation. The petition was opposed by the private
respondent.
On December 21, 2001, the public respondent issued the first assailed order denying
the petitioner's petition for relief from judgment for lack of merit. The petitioner moved
for reconsideration of the said order but the same was denied in the second assailed
order dated February 12, 2002 on the grounds that the motion failed to comply with the
mandatory requirements of sections 4 and 5 of Rule 15 of the 1997 Rules of Civil
procedure and that it failed to raise an issue which would warrant a modification or
reversal of the order dated December 21, 2001.[4]

Petitioner filed with the CA a petition for certiorari with prayer for the issuance of a
temporary restraining order and/or writ of preliminary injunction reiterating the grounds
stated in his petition for relief from judgment filed with the RTC. Respondent filed its
Comment. The parties subsequently filed their respective memoranda.

On March 26, 2004, the CA issued its assailed Decision dismissing the petition.

In so ruling, the CA found that the records showed that petitioner failed to file a motion
for reconsideration or an appeal from the RTC Decision dated May 25, 2001 causing
the said decision to become final and executory; that when petitioner filed the petition
for relief from judgment, petitioner did not offer any reason for his failure to appeal; there
was no assertion that the RTC decision was entered against him through fraud,
accident, mistake or excusable negligence. The CA noted that the petition was not
accompanied by an affidavit of merit showing the fraud, accident, mistake or excusable
negligence relied upon and the facts constituting petitioner's good and substantial
defense as required by law. It also agreed with the RTC's observation that petitioner did
not assail the proceedings conducted below, but merely questioned the validity of the
dispositive portion of the RTC decision, thus, the petition for relief from judgment was
fatally flawed and should have been dismissed outright.

The CA added that notwithstanding such defect, the RTC proceeded with hearing the
petition perhaps as an act of grace giving petitioner one last chance to protect his
interest and present evidence in support of his arguments, but petitioner opted to
dispense with the presentation of evidence in support of the said petition; that petitioner
could not claim that he was denied his day in court or claim that the RTC committed
grave abuse of discretion. The CA then said that once a judgment becomes final,
executory and unappealable, the prevailing party shall not be deprived of the fruits of
victory by some subterfuge devised by the losing party.
Petitioner's motion for reconsideration was denied in a Resolution dated September 28,
2004.

Petitioner is now before the Court raising the following grounds:

The Honorable Court committed an irreversible error in dismissing herein Petitioner's

Petition for Certiorari and subsequently thereafter, in denying his Motion for
Reconsideration thereto for lack of merit.

The Honorable Court gravely erred in strictly applying the rules of procedure at the
expense of substantial justice.

The Honorable Court committed an irreversible error in not ruling on the merits of the
case.[5]

The petition has no merit.

The Court of Appeals did not err in ruling that no grave abuse of discretion was
committed by the RTC in dismissing the petition for relief from judgment filed by
petitioner therewith.

Sections 1 and 3 of Rule 38 of the Rules of Court provide the requirements for a petition
for relief from judgment, thus:

SEC. 1. Petition for relief from judgment, order, or other proceedings. - When a
judgment or final order is entered, or any other proceeding is thereafter taken against a
party in any court through fraud, accident, mistake, or excusable negligence, he may file
a petition in such court and in the same case praying that the judgment, order or
proceeding be set aside.

SEC. 3. Time for filing of petition; contents and verification.-- A petition for in either of
the preceding sections of this rule must be verified, filed within sixty (60) days after the
petitioner learns of the judgment, order, or other proceeding to be set aside, and not
more than six (6) months after such judgment or order was entered, or such proceeding
was taken; and must be accompanied with affidavits showing the fraud, accident,
mistake, or excusable negligence relied upon, and the facts constituting the petitioner's
good and substantial cause of action or defense, as the case may be.

Relief from judgment under Rule 38 of the Rules of Court is a remedy provided by law
to any person against whom a decision or order is entered into through fraud, accident,
mistake or excusable negligence. The relief provided for is of equitable character,
allowed only in exceptional cases as where there is no other available or adequate
remedy.[6] When a party has another remedy available to him, which may either be a
motion for new trial or appeal from an adverse decision of the lower court, and he was
not prevented by fraud, accident, mistake or excusable negligence from filing such
motion or taking the appeal, he cannot avail himself of the relief provided in Rule 38.
The rule is that relief will not be granted to a party who seeks avoidance from the effects
of the judgment when the loss of the remedy at law was due to his own negligence or a
mistaken mode of procedure, otherwise the petition for relief will be tantamount to
reviving the right of appeal which has already been lost either because of inexcusable
negligence or due to a mistake in the mode of procedure by counsel. [7]

In his Petition for Relief from Judgment filed before the RTC, petitioner alleged that the
petition was filed on the ground that the RTC made serious and prejudicial mistakes in
appreciating the evidence presented. He then proceeded to discuss the errors of
judgment committed by the RTC in rendering its decision.

The mistake contemplated by Rule 38 of the Rules of Court pertains generally to

mistake of fact, not of law, which relates to the case. [8] The word "mistake" which grants
relief from judgment, does not apply and was never intended to apply to a judicial error
which the court might have committed in the trial.[9] Such error may be corrected by
means of an appeal.

The arguments raised by petitioner in his petition for relief from judgment, i.e., he cannot
be held civilly liable for obligations he, as corporate president thereof, has incurred in
behalf of the corporation which is vested with a personality separate and distinct from its
officers and stockholders; and that he cannot be held jointly and solidarily liable for the
obligations, are proper issues which petitioner could have raised in a motion for
reconsideration which he did not. The RTC, in its Order denying the petition for relief,
ruled:
Going by the tenor of the aforequoted Rule, it is the sense of this Court that the petition
under consideration cannot prosper, given the grounds therefor which should have been
raised, more appropriately, in a simple motion for reconsideration. It must be noted that
the petitioner does not assail the proceedings conducted by this Court which culminated
in the rendition of the judgment and issuance of the writ of execution rather; he
questions only the validity of the dispositive portion of the decision, an issue which, as
already adverted to, should have been ventilated via a motion for reconsideration. [10]

In fact, the alleged errors committed by the RTC could also be corrected by means of
an appeal from the RTC decision. Petitioner did not also file an appeal causing the RTC
decision to become final and executory and the subsequent issuance of a writ of
execution. Notably, petitioner never made any allegation in his petition for relief from
judgment that the RTC decision was entered against him through fraud, accident,
mistake, or excusable negligence. The petition for relief did not also show any reason
for petitioner's failure to file an appeal after the receipt of the RTC decision which the
CA correctly observed in its assailed decision.

Petitioner's claim that Section 1, Rule 38 of the Rules of Court does not require that
petitioner should state the reason why he did not avail of the remedy of appeal deserves
scant consideration. His failure to avail of the remedy of appeal within the reglementary
period despite receipt of the RTC decision rendered the same final and executory. He
cannot be allowed to assail the RTC decision which had become final in a petition for
relief from judgment when there was no allegations of fraud, accident, mistake, or
excusable negligence which prevented him from interposing an appeal. Such appeal
could have corrected what he believed to be an erroneous judicial decision. To reiterate,
petition for relief is an equitable remedy that is allowed only in exceptional cases where
there is no other available or adequate remedy [11] which is not present in petitioner's
case. Thus, petitioner's resort to a petition for relief under Rule 38 was not proper and
the CA correctly ruled that the RTC did not commit grave abuse of discretion in denying
the petition for relief from judgment.

Petitioner argues that the CA erred in finding that an affidavit of merit is an essential
requirement in filing a petition for relief from judgment and that without said affidavit the
same would be denied.

The Court does not agree.

Section 3, Rule 38 of the Rules of Court requires that the petition must be accompanied
with affidavits of merits showing the fraud, accident, mistake, or excusable negligence
relied upon by petitioner and the facts constituting the petitioner's good and substantial
cause of action or defense as the case maybe. While a petition for relief without a
separate affidavit of merit is sufficient where facts constituting petitioner's substantial
cause of action or defense, as the case may be, are alleged in a verified petition since
the oath elevates the petition to the same category as a separate affidavit, [12] the petition
for relief filed by petitioner was not even verified. Thus, the CA did not err in no longer
considering the merits of the case.

Petitioner now contends that the CA should have considered that it was petitioner's
former counsel who has the implied authority to determine what procedural steps to
take which in his judgment will best serve the interest of his client; that petitioner, being
not knowledgeable of the laws, ought not to be blamed by the incompetence, ignorance
and inexperience of his counsel; and that rules of procedure should give way for a
liberal construction if the same will hinder, impede or sacrifice the demands of
substantial justice.

There is no rule more settled than that a client is bound by his counsel's conduct,
negligence and mistake in handling the case. [13] To allow a party to disown his counsel's
conduct would render proceedings indefinite, tentative, and subject to reopening by the
mere subterfuge of replacing counsel. [14] Petitioner failed to show that his counsel's
negligence was so gross and palpable as to call for the exercise of this Court's equity
jurisdiction. While it is true that rules of procedure are not cast in stone, it is equally true
that strict compliance with the Rules is indispensable for the prevention of needless
delays and for the orderly and expeditious dispatch of judicial business. [15]

In Saint Louis University v. Cordero,[16] the Court said:

Thus, while regretful that the petitioners may have had meritorious defenses against the
trial court's 17 December 1998 Order, we must likewise weigh such defenses against
the need to halt an abuse of the flexibility of procedural rules. Additionally, it should be
pointed out that in petitions for relief from judgment, orders, or other proceedings; relief
from denial of appeals; or annulment of judgments, final orders and resolutions, where
meritorious defenses must be adduced, they must accompany the grounds cited
therein, whether it is fraud, accident, mistake, excusable negligence, extrinsic fraud or
lack of jurisdiction. Where, as here, there is neither excusable nor gross negligence
amounting to a denial of due process, meritorious defenses cannot alone be
considered.

It has long been recognized that strict compliance with the Rules of Court is
indispensable for the prevention of needless delays and for the orderly and expeditious
dispatch of judicial business. For the Court to allow the reopening or remand of the case
after such a display of indifference to the requirements of the Rules of Court would put a
strain on the orderly administration of justice.[17]

WHEREFORE, the petition is DENIED. The Decision dated March 26, 2004 and the
Resolution dated September 28, 2004 of the Court of Appeals in CA-G.R. SP No. 70213
are AFFIRMED.

SO ORDERED.
EXECUTION, SATISFACTION AND
EFFECT OF JUDGMENTS
- When is execution issued as a
matter of right
- Discretionary execution
- Stay of discretionary execution
- Execution in case of death penalty
- Issuance, form and contents of a writ
of execution
- Execution of judgment for money
- Execution of judgment for specific
act
- Execution of special judgments
- Property exempt from execution
- Conveyance of real property
- Return of writ of execution
- Effect of judgments or final orders
- Effect of foreign judgment or final
orders
SECOND DIVISION
 [ G.R. No. 188360, January 21, 2010 ]

SPS. HEBER & CHARLITA EDILLO, PETITIONERS, VS. SPS. NORBERTO &
DESIDERIA DULPINA, RESPONDENTS.

DECISION

BRION, J.:

We resolve in this Decision the Petition for Review on Certiorari[1] filed by defendants-
petitioners Spouses Heber and Charlita Edillo (defendants-petitioners) who seek to
reverse and set aside the Resolutions dated January 28, 2009 [2] and June 11, 2009[3] of
the Special Former Special Division of Five of the Court of Appeals (CA) in CA-G.R. SP
No. 02436-MIN. The first assailed CA Resolution dismissed outright the defendants-
petitioners' Petition for Review for failure to state the factual background of the case; the
second assailed CA Resolution denied the defendants-petitioners' Motion for
Reconsideration.

FACTUAL BACKGROUND

The facts of the case, gathered from the parties' pleadings and annexes, are briefly
summarized below.

On February 21, 2006, plaintiffs-respondents Spouses Norberto and Desideria Dulpina

(plaintiffs-respondents) filed a Complaint for Forcible Entry against the defendants-
petitioners with the Municipal Circuit Trial Court of Del Carmen-San Isidro-San Benito,
Surigao del Norte (MCTC).[4]

The plaintiffs-respondents alleged that they purchased from Wencelito Camingue a 235-
square meter residential lot and house located in Poblacion, San Isidro, Surigao del
Norte, through a Deed of Sale [5] dated May 14, 1990. On August 8, 2005, defendant-
petitioner Heber Edillo, without their consent and against their express prohibition,
suddenly fenced off and occupied a 50-square meter portion of the western part of the
disputed property while uttering threats against plaintiffs-respondents. On January 26,
2006, they sent the defendants-petitioners a notice to vacate the disputed property, but
the defendants-petitioners refused to comply.[6]
In their Answer dated March 1, 2006, the defendants-petitioners countered that the
Complaint states no cause of action because the plaintiffs-respondents failed to allege
that they were in prior physical possession of the disputed property. [7] They also alleged
that they acquired the disputed property through three (3) separate Deeds of Absolute
Sale[8] from Apolinar Saragoza,[9] Felomino Forcadilla,[10] and Wenceslao Caunzad.[11]

THE MCTC RULING

On May 23, 2007, the MCTC rendered judgment dismissing the Complaint. It ordered
the plaintiffs-respondents to pay the defendants-petitioners P10,000.00 as actual
damages and another P10,000.00 as attorney's fees. [12] The plaintiffs-respondents'
counsel received a copy of the MCTC Judgment on May 31, 2007. [13]

On June 5, 2007, the plaintiffs-respondents filed a Motion for Reconsideration [14] which
the MCTC denied in its Resolution of June 8, 2007. [15]

On July 30, 2007, the plaintiffs-respondents filed a Notice of Appeal with the MCTC,
which the latter granted.

On August 15, 2007, the plaintiffs-respondents filed their Appeal Memorandum with the
Regional Trial Court, Branch 31, Dapa, Surigao del Norte (RTC).[16]

THE RTC RULING

The RTC decided the appeal on November 7, 2007. It set aside the MCTC judgment
and ordered the defendants-petitioners to vacate the subject property and to restore the
plaintiffs-respondents to their possession. It likewise ordered the payment of
P10,000.00 as attorney's fees and the cost of suit. [17]

After the RTC denied[18] their Motion for Reconsideration,[19] the defendants-petitioners
elevated the case to the CA through a Petition for Review under Rule 42 of the Rules of
Court.[20] They argued that the plaintiffs-respondents' appeal with the RTC was filed out
of time since the Revised Rules of Summary Procedure (RRSP) prohibits the filing of a
motion for reconsideration.

THE CA RULING
The CA dismissed the Petition in its Resolution of January 28, 2009 [21] on the ground
that it does not contain a statement of the factual background of the case, in violation of
Sections 2 and 3 of Rule 42 of the Rules of Court. A special division of five (5) justices,
with Associate Justice Ruben C. Ayson dissenting, [22] rendered the resolution.

The defendants-petitioners moved to reconsider the dismissal, to amend the petition,

and to admit their First Amended Petition. [23] The CA denied the motions in its Resolution
of June 11, 2009, noting that the amended petition did not correct the infirmity of the
original petition.[24]

Faced with this development, the defendants-petitioners filed the present Petition for
Review on Certiorari under Rule 45 of the Rules of Court.

THE PETITION

The defendants-petitioners argue that the CA's outright dismissal of the petition was
unwarranted since the Petition for Review and the Amended Petition (filed with the
Motion for Reconsideration of the Dismissal of the Original Petition) sufficiently recited
the factual background of the case. They submit that the annexes to the original and
amended petitions, consisting of the Complaint, the Answer, the other pleadings, and
the MCTC and RTC Decisions, also contain this factual background. They point out that
a relaxation of technical rules is justified by the merits of the case - the RTC had no
jurisdiction to entertain the plaintiffs-respondents' appeal because the MCTC Decision
had become final and executory; the Motion for Reconsideration the plaintiffs-
respondents filed is a prohibited pleading in summary proceedings and did not stop the
running of the period for the decision's finality.

For their part, the plaintiffs-respondents submit that the requirements set forth in Section
2 of Rule 42 of the Revised Rules of Court are mandatory and the defendants-
petitioners have no discretion but to comply, citingGalang v. Court of Appeals[25] and Tan
v. Court of Appeals.[26]

OUR RULING

We find for the defendants-petitioners.

Procedure on Appeal; Liberal
Construction of Rules

An appeal to the CA from an RTC Decision rendered in the exercise of its appellate
jurisdiction is via a Petition for Review under Rule 42 of the Revised Rules of Court.
Section 2 of Rule 42 prescribes the following requirements:

SEC. 2. Form and contents. -- The petition shall be filed in seven (7) legible copies, with
the original copy intended for the court being indicated as such by the petitioner, and
shall (a) state the full names of the parties to the case, without impleading the lower
courts or judges thereof either as petitioners or respondents; (b) indicate the specific
material dates showing that it was filed on time; (c) set forth concisely a statement of
the matters involved, the issues raised, the specification of errors of fact or law,
or both, allegedly committed by the Regional Trial Court, and the reasons or
arguments relied upon for the allowance of the appeal; (d) be accompanied by
clearly legible duplicate originals or true copies of the judgments or final orders of both
lower courts, certified correct by the clerk of court of the Regional Trial Court, the
requisite number of plain copies thereof and of the pleadings and other material portions
of the record as would support the allegations of the petition.

The petitioner shall also submit together with the petition a certification under oath that
he has not theretofore commenced any other action involving the same issues in the
Supreme Court, the Court of Appeals or different divisions thereof, or any other tribunal
or agency; if there is such other action or proceeding, he must state the status of the
same; and if he should thereafter learn that a similar action or proceeding has been filed
or is pending before the Supreme Court, the Court of Appeals, or different divisions
thereof, or any other tribunal or agency, he undertakes to promptly inform the aforesaid
courts and other tribunal or agency thereof within five (5) days therefrom. (Emphasis
supplied.)

Non-compliance with these requirements is sufficient ground for the dismissal of the
Petition, pursuant to Section 3 of the same Rule, which reads:

SEC. 3. Effect of failure to comply with requirements. -- The failure of the petitioner to
comply with any of the foregoing requirements regarding the payment of the docket and
other lawful fees, the deposit for costs, proof of service of the petition, and the contents
of and the documents which should accompany the petition shall be sufficient ground
for the dismissal thereof.

In not a few cases, we have ruled that the right to appeal is neither a natural right nor a
part of due process; it is a mere statutory privilege that may be exercised only in the
manner and strictly in accordance with the provisions of law allowing the appeal. [27] The
party who seeks to appeal must comply with the requirements of the law and the rules;
failure to comply leads to the dismissal and the loss of the right to appeal. [28]

But while we have so ruled, we recognize nonetheless that the right to appeal is an
essential part of our system of judicial processes, and courts should proceed with
caution in order not to deprive a party of the right to appeal. We invariably made this
recognition due to our overriding concern that every party-litigant be given the amplest
opportunity to ventilate and secure the resolution of his cause, free from the constraints
of technicalities.[29] This line of rulings is based, no less, on the Rules of Court which
itself calls for a liberal construction of its provisions, with the objective of securing for the
parties a just, speedy and inexpensive disposition of every action and proceeding. [30] In
this line of rulings, we have repeatedly stressed that litigation is not merely a game of
technicalities. The law and jurisprudence grant to courts - in the exercise of their
discretion along the lines laid down by this Court - the prerogative to relax compliance
with procedural rules of even the most mandatory character, mindful of the duty to
reconcile both the need to put an end to litigation speedily and the parties' right to an
opportunity to be heard.[31]

We are aware of the plaintiffs-respondents' cited cases of Galang v. Court of

Appeals[32] and Tan v. Court of Appeals,[33] but these rulings are not fully applicable to the
present case as they are not squarely in point.

Galang involved the dismissal of a petition with the CA for nonpayment of costs within
three (3) days from notice of the order. It involved a direct failure to comply with a CA
directive - a matter vastly different from, and greater than, the question of sufficiency
posed in this case. Tan, on the other hand, involved a motion for reconsideration that
was considered a mere scrap of paper for lack of a notice of hearing. This is a matter
that, at its core, is a due process concern - the failure to afford the opposing party the
opportunity to respond to the motion in a duly scheduled hearing.
A commonality and the weightier reason (although not so given this characterization)
behind our rulings in these cited cases is the lack of merit of the respective petitioners'
underlying cases. In both cases, we took into account the relative merits of the parties'
cases and found that a liberal interpretation, applied to the interlocutory issues before
us, would be for naught because the petitioners' underlying cases clearly lacked merit.
As we ruled then, so do we rule now. We assess, albeit preliminarily, if the appeal is
meritorious on its face and relax the applicable rule of procedure only after a prima
facie finding of merit.[34]

That there was substantial compliance with the Rules because the background facts
can be found within the four corners of the petition and its incorporated annexes, is not
a novel ruling for this Court. In the case of Deloso v. Marapao[35] (involving the same
deficiency for lack of a specific and separate statement of facts outlining the factual
background relied upon), we said:

An examination of the petition filed with the Court of Appeals reveals that while it does
not contain a separate section on statement of facts, the facts of the case are, in fact,
integrated in the petition particularly in the discussion/argument portion. Moreover, the
decision of the DARAB which contains the facts of the case was attached to the
petition and was even quoted by the appellate court.The petition also sufficiently
discusses the errors committed by the DARAB in its assailed decision.

There was, therefore, substantial compliance with Sec. 6, Rule 43 of the Rules of
Court.It is settled that liberal construction of the Rules may be invoked in situations
where there may be some excusable formal deficiency or error in a pleading, provided
that the same does not subvert the essence of the proceeding and connotes at least a
reasonable attempt at compliance with the Rules. After all, rules of procedure are not to
be applied in a very rigid, technical sense; they are used only to help secure substantial
justice.[36]

Given this precedent, it only remains for us to determine if we can apply a liberal
construction of the Rules because a meaningful litigation of the case can ensue given
the Petition's prima facie merit.

The defendants-petitioners'
meritorious case; a motion for
reconsideration is a prohibited
pleading in summary procedure.

Our examination of the defendants-petitioners' petition preliminarily tells us that it is not

without merit, which merit would remain unventilated unless we relax our application of
the technical requirements applicable to their appeal. The question, too, that the
defendants-petitioners pose is not a minor one as it involves a very basic question of
law - whether the RTC has jurisdiction to entertain an appeal from a final and executory
MCTC decision. According to the defendants-petitioners, the plaintiffs-respondents' filing
of a motion for reconsideration of the MCTC judgment did not stop the running of the
period for appeal since a motion for reconsideration is a prohibited pleading under the
RRSP.

We agree with the defendants-petitioners.

Jurisdiction over forcible entry and unlawful detainer cases belongs to the Metropolitan
Trial Courts, the Municipal Trial Courts in Cities, the Municipal Trial Courts, and the
Municipal Circuit Trial Courts.[37] The RRSP applies to prevent undue delays in the
disposition of cases; to achieve this end, the filing of certain pleadings - a motion for
reconsideration, among others - is prohibited. [38]

Specifically, Section 19(c) of the Rules of Summary Procedure and Section 13(c) of
Rule 70 of the Rules of Court consider a motion for reconsideration of a judgment a
prohibited pleading.[39] Thus, when the plaintiffs-respondents filed on June 5, 2007 a
Motion for Reconsideration of the MCTC Judgment, the motion did not stop the running
of the period for appeal. With the continuous running of this period, the May 23, 2007
MCTC judgment (which the plaintiffs-respondents received through counsel on May 31,
2007) had long lapsed to finality when the plaintiffs-respondents filed their Notice of
Appeal on July 30, 2007.

The Doctrine of Immutability

A judgment that has become final and executory is immutable and unalterable; [40] the
judgment may no longer be modified in any respect, even if the modification is meant to
correct what is perceived to be an erroneous conclusion of fact or law, and regardless of
whether the modification is attempted to be made by the court rendering it or by the
highest Court of the land.[41] While there are recognized exceptions - e.g., the correction
of clerical errors, the so-called nunc pro tunc entries which cause no prejudice to any
party, void judgments, and whenever circumstances transpire after the finality of the
decision rendering its execution unjust and inequitable [42] - none of these exceptions
apply to the present case.

Litigation must at some time end, even at the risk of occasional errors. Public policy
dictates that once a judgment becomes final, executory and unappealable, the
prevailing party should not be denied the fruits of his victory by some subterfuge
devised by the losing party. Unjustified delay in the enforcement of a judgment sets at
naught the role and purpose of the courts to resolve justiciable controversies with
finality.[43]

In the present case, the lapse of the period for appeal rendered the RTC without any
jurisdiction to entertain, much less grant, the plaintiffs-respondents' appeal from the final
and immutable MCTC judgment. This very basic legal reality would forever be lost if we
allow the CA to dismiss the defendants-petitioners' appeal outright on the basis of a
technicality that, after all, has been substantially complied with.

WHEREFORE, in light of all the foregoing, we hereby REVERSE and SET ASIDE the
Resolutions dated January 28, 2009 and June 11, 2009 of the Special Former Special
Division of Five of the Court of Appeals in CA-G.R. SP No. 02436-MIN. The Decision
dated November 7, 2007 and Order dated July 1, 2008 of the Regional Trial Court,
Branch 31, Dapa, Surigao del Norte are ANNULLED. The Judgment dated May 23,
2007 of the Municipal Circuit Trial Court, Del Carmen-San Isidro-San Benito, Surigao
del Norte is REINSTATED. Costs against the plaintiffs-respondents.

SO ORDERED.
 SECOND DIVISION

[ G.R. No. 181970, August 03, 2010 ]

BERNARDO DE LEON, PETITIONER, VS. PUBLIC ESTATES AUTHORITY

SUBSTITUTED BY THE CITY OF PARAAQUE, RAMON ARELLANO, JR., RICARDO
PENA AND REYMUNDO ORPILLA, RESPONDENTS.

[G.R. No. 182678]

PUBLIC ESTATES AUTHORITY (NOW PHILIPPINE RECLAMATION AUTHORITY),

SUBSTITUTED BY THE CITY OF PARAAQUE, PETITIONER, VS. HON. SELMA
PALACIO ALARAS, IN HER CAPACITY AS THE ACTING PRESIDING JUDGE OF
BRANCH 135, REGIONAL TRIAL COURT OF MAKATI CITY, AND BERNARDO DE
LEON. RESPONDENTS.

DECISION

PERALTA, J.:

Before the Court are two consolidated petitions.

G.R. No. 181970 is a petition for review on certiorari under Rule 45 of the Rules of
Court filed by Bernardo de Leon seeking the reversal and setting aside of the
Decision[1] of the Court of Appeals (CA), dated November 21, 2007, in CA-G.R. SP No.
90328 which dismissed his petition for certiorari. De Leon also assails the CA
Resolution[2]dated March 4, 2008 denying his Motion for Reconsideration.

On the other hand, G.R. No. 182678 is a petition for certiorari under Rule 65 of the
Rules of Court filed by the Public Estates Authority (PEA) [3] seeking the nullification of
the Orders dated December 28, 2007 and March 4, 2008 of the Regional Trial Court
(RTC) of Makati City, Branch 135 in Civil Case No. 93-143.

The pertinent factual and procedural antecedents of the case, as summarized by the
CA, are as follows:

On [January 15, 1993], petitioner Bernardo De Leon ("De Leon") filed a Complaint for
Damages with Prayer for Preliminary Injunction before the Regional Trial Court [RTC] of
Makati City, raffled to Branch 135, against respondent Public Estates Authority ("PEA"),
a government-owned corporation, as well as its officers, herein private respondents
Ramon Arellano, Jr., Ricardo Pena and Reymundo Orpilla. The suit for damages hinged
on the alleged unlawful destruction of De Leon's fence and houses constructed on Lot
5155 containing an area of 11,997 square meters, situated in San Dionisio, Paraaque,
which De Leon claimed has been in the possession of his family for more than 50 years.
Essentially, De Leon prayed that - one, lawful possession of the land in question be
awarded to him; two, PEA be ordered to pay damages for demolishing the
improvements constructed on Lot 5155; and, three, an injunctive relief be issued to
enjoin PEA from committing acts which would violate his lawful and peaceful possession
of the subject premises.

The court a quo found merit in De Leon's application for writ of preliminary injunction
and thus issued the Orderdated 8 February 1993, pertinent portions of which read:

After a careful consideration of the evidence presented and without going into the
actual merits of the case, this Court finds that plaintiff (De Leon) has duly established
by preponderance of evidence that he has a legal right over the subject matter of the
instant case and is entitled to the injunctive relief demanded for and may suffer
irreparable damage or injury if such right is not protected by Law [Rules (sic) 58,
Section 3 of the Revised (Rules of Court)].

Premises considered upon plaintiff's (De Leon's) filing of a bond in the amount of
P500,000.00, let a writ of preliminary injunction be issued against the defendants, their
agents, representatives and other persons (PEA and its officers) acting for and in their
behalf are hereby enjoined from disturbing the peaceful possession of plaintiff(De
Leon) and his co-owners over Lot 5155 and further, from destroying and/or removing
whatever other improvements thereon constructed, until further orders of this Court.

SO ORDERED. (Emphasis supplied)

PEA sought recourse before the Supreme Court through a Petition for Certiorari with
Prayer for a Restraining Order, ascribing grave abuse of discretion against the court a
quo for issuing injunctive relief. The Petition was later referred to this Court for proper
determination and disposition, and was docketed as CA-G.R. SP No. 30630.

On 30 September 1993, the Ninth Division of this Court rendered a Decision discerning
that the court a quo did not act in a capricious, arbitrary and whimsical exercise of
power in issuing the writ of preliminary injunction against PEA. The Ninth Division ruled
that the court a quo was precisely careful to state in its Order that it was "without going
into the actual merits of the case" and that the words "plaintiff (De Leon) and his co-
owners" were used by the court a quo rather "loosely and did not intend it to be an
adjudication of ownership."

Unfazed, PEA appealed to the Supreme Court via a Petition for Certiorari insisting that
Lot 5155 was a salvage zone until it was reclaimed through government efforts in 1982.
The land was previously under water on the coastline which reached nine to twenty
meters deep. In 1989, PEA started constructing R-1 Toll Expressway Road for the
Manila-Cavite Coastal Road, which project directly traversed Lot 5155. PEA argued that
the documentary evidence presented by De Leon to bolster his fallacious claim of
possession and ownership were procured only in 1992, thus negating his very own
allegation that he and his predecessors-in-interest have been in occupation since time
immemorial.

Ruling squarely on the issue adduced before it, the Supreme Court declared that Lot
5155 was a public land so that De Leon's occupation thereof, no matter how long ago,
could not confer ownership or possessory rights. Prescinding therefrom, no writ of
injunction may lie to protect De Leon's nebulous right of possession. Accordingly, in its
Decision dated 20 November 2000, the Supreme Court disposed of the controversy in
this wise:

WHEREFORE, the Court REVERSES the decision of the Court of Appeals in CA-G.R.
SP No. 30630, andDISMISSES the complaint in Civil Case No. 93-143 of the Regional
Trial Court, Makati.

No costs.

SO ORDERED.

The aforesaid Decision became final and executory as no motion for reconsideration
was filed. In due course, PEA moved for the issuance of a writ of execution praying that
De Leon and persons claiming rights under him be ordered to vacate and peaceably
surrender possession of Lot 5155.
Acting on PEA's motion, the court a quo issued the first assailed Order dated 15
September 2004, viz:

Acting on the "Motion For Issuance Of Writ of Execution" filed by defendant Public
Estate[s] Authority, and finding the same to be impressed with merit, the same is
GRANTED.

Let a Writ of Execution issue directing plaintiff, his agents, principals, successors-in-
interest and all persons claiming rights under him to vacate and peaceably turn over
possession of Lot 5155 to defendant Public Estate[s] Authority.

SO ORDERED.

As could well be expected, De Leon moved for reconsideration thereof and quashal of
the writ of execution. He adamantly insisted that the court a quo's Order for the
issuance of the writ of execution completely deviated from the dispositive portion of the
Supreme Court's Decision dated 20 November 2000 as it did not categorically direct
him to surrender possession of Lot 5155 in favor of PEA.

However, both motions met the same fate as these were denied by the court a quo in
the second disputed Orderdated 29 April 2005.[4]

Dissatisfied, De Leon filed another Motion for Reconsideration dated July 1, 2005, but
the same was denied by the RTC in an Order dated July 27, 2005.

De Leon then filed a special civil action for certiorari with the CA assailing the
September 15, 2004 and April 29, 2005 Orders of the RTC of Makati City. This was
docketed as CA-G.R. SP No. 90328. In the same proceeding, De Leon filed an Urgent-
Emergency Motion for Temporary Restraining Order (TRO) and Issuance of Writ of
Preliminary Injunction but the same was denied by the CA in a Resolution dated April
24, 2006.

Subsequently, De Leon filed a second special civil action for certiorari with the CA
seeking to annul and set aside the same RTC Orders dated September 15, 2004 and
April 29, 2005, as well as the RTC Order of July 27, 2005. The case was docketed as
CA-G.R. SP No. 90984.

On July 26, 2006, PEA filed a Very Urgent Motion for Issuance of Writ of
Demolition[5] praying that the RTC issue a Special Order directing De Leon and persons
claiming under him to remove all improvements erected inside the premises of the
subject property and, in case of failure to remove the said structures, that a Special
Order and Writ of Demolition be issued directing the sheriff to remove and demolish the
said improvements.

On October 11, 2006, the RTC issued an Order [6] holding in abeyance the Resolution of
PEA's Motion. PEA filed a Motion for Reconsideration, [7] but it was denied by the RTC
in an Order[8] dated January 12, 2007.

On February 27, 2007, PEA filed an Omnibus Motion [9] to dismiss or, in the alternative,
resolve the petitions in CA-G.R. SP No. 90328 and CA-G.R. SP No. 90984.

In its Decision[10] dated March 21, 2007, the CA dismissed De Leon's petition in CA-G.R.
SP No. 90984 on the ground of forum shopping.

Subsequently, on November 21, 2007, the CA also dismissed De Leon's petition in CA-
G.R. SP No. 90328 holding that an earlier decision promulgated by the Supreme Court,
finding the subject property to be public and that De Leon has no title and no clear legal
right over the disputed lot, has already attained finality. [11] De Leon filed a Motion for
Reconsideration, but the CA denied it via its Resolution [12] dated March 4, 2008.

Thereafter, PEA filed an Urgent Motion to Resolve (Re: Very Urgent Motion for Issuance
of Writ of Demolition).[13]

On December 28, 2007, the RTC issued an Order [14] holding in abeyance the resolution
of PEA's Motion pending receipt by the trial court of the entry of judgment pertaining to
CA-G.R. SP No. 90328. PEA filed a Motion for Reconsideration. [15]

In its Order dated March 4, 2008, the RTC issued an Order denying PEA's Motion for
Reconsideration.

On April 23, 2008, De Leon filed the present petition for review on certiorari, docketed
as G.R. No. 181970, assailing the November 21, 2007 Decision of the CA.

Subsequently, on May 15, 2008, PEA, on the other hand, filed the instant special civil
action for certiorari, docketed as G.R. No. 182678, questioning the Orders of the RTC of
Makati City, dated December 28, 2007 and March 4, 2008.

In G.R. No. 181970, De Leon questions the Decision of the CA on the following
grounds: (a) he can only be removed from the subject land through ejectment
proceedings; (b) the Decision of this Court in G.R. No. 112172 merely ordered the
dismissal of De Leon's complaint for damages in Civil Case No. 93-143; and (c) even
though petitioner is not the owner and has no title to the subject land, mere prior
possession is only required for the establishment of his right.

In G.R. No. 182678, the sole issue raised is whether respondent judge committed grave
abuse of discretion in issuing the assailed Orders which held in abeyance the resolution
of PEA's Motion for the Issuance of a Writ of Demolition.

On February 25, 2009, PEA and the City of Paraaque filed a Joint Motion for
Substitution stating that PEA had transferred its ownership and ceded its interests over
the subject property to the City of Paraaque as full payment for all of the former's real
property tax liabilities. As a consequence, the movants prayed that PEA be substituted
by the City of Paraaque as petitioner in G.R. No. 182678 and respondent in G.R. No.
181970.[16]

In a Resolution[17] dated on October 14, 2009, this Court granted the Motion for
Substitution filed by PEA and the City of Paraaque.

The issues raised in the present petitions boil down to the question of whether PEA is
really entitled to possess the subject property and, if answered in the affirmative,
whether the RTC should proceed to hear PEA's Motion for the Issuance of a Writ of
Demolition.

The Court rules for PEA.

The question of ownership and rightful possession of the subject property had already
been settled and laid to rest in this Court's Decision dated November 20, 2000 in G.R.
No. 112172 entitled, Public Estates Authority v. Court of Appeals (PEA v. CA).[18] In the
said case, the Court ruled thus:

The issue raised is whether respondent and his brothers and sisters were lawful owners
and possessors of Lot 5155 by mere claim of ownership by possession for a period of at
least fifty (50) years.

The Court of Appeals ruled that respondent Bernardo de Leon and his brothers and
sisters were lawful owners and possessors of Lot 5155 entitled to protection by
injunction against anyone disturbing their peaceful possession of said Lot.

The ruling is erroneous. An applicant seeking to establish ownership of land must

conclusively show that he is the owner in fee simple, for the standing presumption is
that all lands belong to the public domain of the State, unless acquired from the
Government either by purchase or by grant, except lands possessed by an occupant
and his predecessors since time immemorial, for such possession would justify the
presumption that the land had never been part of the public domain, or that it had been
private property even before the Spanish conquest.

In this case, the land in question is admittedly public. The respondent Bernardo
de Leon has no title thereto at all. His claim of ownership is based on mere
possession by himself and his predecessors-in-interests, who claim to have been
in open, continuous, exclusive and notorious possession of the land in question,
under abona fide claim of ownership for a period of at least fifty (50)
years. However, the survey plan for the land was approved only in 1992, and
respondent paid the realty taxes thereon on October 30, 1992, shortly before the filing
of the suit below for damages with injunction. Hence, respondent must be deemed to
begin asserting his adverse claim to Lot 5155 only in 1992. More, Lot 5155 was certified
as alienable and disposable on March 27, 1972, per certificate of the Department of
Environment and Natural Resources. It is obvious that respondent's possession has
not ripened into ownership.

x x x x

Consequently, respondent De Leon has no clear legal right to the lot in

question, and a writ of injunction will not lie to protect such nebulous right of
possession. x x x[19]

The Court does not subscribe to De Leon's argument that the issues of ownership and
possession of the subject lot should not have been taken up by the court on the ground
that his complaint is only for damages. De Leon must be aware that his action for
damages is anchored on his claim that he owns and possesses the subject property.
[20]
On this basis, it would be inevitable for the court to discuss the issues of whether he,
in fact, owns the disputed property and, as such, has the right to possess the same.
Moreover, it is clear from this Court's Decision in PEA v. CA that the main issue resolved
therein was "whether respondent [De Leon] and his brothers and sisters were the lawful
owners and possessors of Lot 5155 by mere claim of ownership by possession for a
period of at least fifty (50) years."

De Leon insists that what this Court did in PEA v. CA was to simply dismiss his
complaint for damages and nothing more, and that the RTC erred and committed grave
abuse of discretion in issuing a writ of execution placing PEA in possession of the
disputed property. He insists that he can only be removed from the disputed property
through an ejectment proceeding.

The Court is not persuaded.

As a general rule, a writ of execution should conform to the dispositive portion of the
decision to be executed; an execution is void if it is in excess of and beyond the original
judgment or award.[21] The settled general principle is that a writ of execution must
conform strictly to every essential particular of the judgment promulgated, and may not
vary the terms of the judgment it seeks to enforce, nor may it go beyond the terms of
the judgment sought to be executed. [22]

However, it is equally settled that possession is an essential attribute of ownership.

[23]
Where the ownership of a parcel of land was decreed in the judgment, the delivery of
the possession of the land should be considered included in the decision, it appearing
that the defeated party's claim to the possession thereof is based on his claim of
ownership.[24] Furthermore, adjudication of ownership would include the delivery of
possession if the defeated party has not shown any right to possess the land
independently of his claim of ownership which was rejected. [25]This is precisely what
happened in the present case. This Court had already declared the disputed property as
owned by the State and that De Leon does not have any right to possess the land
independent of his claim of ownership.

In addition, a judgment for the delivery or restitution of property is essentially an order to

place the prevailing party in possession of the property.[26] If the defendant refuses to
surrender possession of the property to the prevailing party, the sheriff or other proper
officer should oust him.[27] No express order to this effect needs to be stated in the
decision; nor is a categorical statement needed in the decision that in such event the
sheriff or other proper officer shall have the authority to remove the improvements on
the property if the defendant fails to do so within a reasonable period of time. [28] The
removal of the improvements on the land under these circumstances is deemed read
into the decision, subject only to the issuance of a special order by the court for the
removal of the improvements.[29]

It bears stressing that a judgment is not confined to what appears upon the face of the
decision, but also those necessarily included therein or necessary thereto. [30] In the
present case, it would be redundant for PEA to go back to court and file an ejectment
case simply to establish its right to possess the subject property. Contrary to De Leon's
claims, the issuance of the writ of execution by the trial court did not constitute an
unwarranted modification of this Court's decision in PEA v. CA, but rather, was a
necessary complement thereto. Such writ was but an essential consequence of this
Court's ruling affirming the nature of the subject parcel of land as public and at the same
time dismissing De Leon's claims of ownership and possession. To further require PEA
to file an ejectment suit to oust de Leon and his siblings from the disputed property
would, in effect, amount to encouraging multiplicity of suits.

De Leon also contends that there "was never any government infrastructure project in
the subject land, much less a Manila-Cavite Coastal Road traversing it, at any time ever
since, until now" and that "allegations of a government project in the subject land and of
such Road traversing the subject land have been downright falsities and lies and mere
concoctions of respondent PEA." [31] However, this Court has already ruled in PEA v.
CA that "it is not disputed that there is a government infrastructure project in progress
traversing Lot 5155, which has been enjoined by the writ of injunction issued by the trial
court."
In any case, De Leon's argument that there was no government infrastructure project in
the subject property begs the issue of ownership and rightful possession. The subject
lot was properly identified. There is no dispute as to its exact location. Hence, whether
or not there is a government project existing within the premises or that which traverses
it is not relevant to the issue of whether petitioner is the owner of the disputed lot and,
therefore, has legal possession thereof.

As to whether or not the RTC committed grave abuse of discretion in holding in

abeyance the resolution of PEA's Motion for the Issuance of a Writ of Demolition,
Section 7,[32] Rule 65 of the Rules of Court provides the general rule that the mere
pendency of a special civil action for certiorari commenced in relation to a case pending
before a lower court or court of origin does not stay the proceedings therein in the
absence of a writ of preliminary injunction or temporary restraining order. It is true that
there are instances where, even if there is no writ of preliminary injunction or temporary
restraining order issued by a higher court, it would be proper for a lower court or court of
origin to suspend its proceedings on the precept of judicial courtesy. [33] The principle of
judicial courtesy, however, remains to be the exception rather than the rule. As held by
this Court in Go v. Abrogar,[34] the precept of judicial courtesy should not be applied
indiscriminately and haphazardly if we are to maintain the relevance of Section 7, Rule
65 of the Rules of Court.

Indeed, in the amendments introduced by A.M. No. 07-7-12-SC, a new paragraph is

now added to Section 7, Rule 65, which provides as follows:

The public respondent shall proceed with the principal case within ten (10) days from
the filing of a petition for certiorari with a higher court or tribunal, absent a temporary
restraining order or a preliminary injunction, or upon its expiration. Failure of the public
respondent to proceed with the principal case may be a ground for an administrative
charge.

While the above quoted amendment may not be applied in the instant case, as A.M. No.
07-7-12-SC was made effective only on December 27, 2007, the provisions of the
amendatory rule clearly underscores the urgency of proceeding with the principal case
in the absence of a temporary restraining order or a preliminary injunction.

This urgency is even more pronounced in the present case, considering that this Court's
judgment in PEA v. CA, finding that De Leon does not own the subject property and is
not entitled to its possession, had long become final and executory. As a consequence,
the writ of execution, as well as the writ of demolition, should be issued as a matter of
course, in the absence of any order restraining their issuance. In fact, the writ of
demolition is merely an ancillary process to carry out the Order previously made by the
RTC for the execution of this Court's decision inPEA v. CA. It is a logical consequence
of the writ of execution earlier issued.

Neither can De Leon argue that he stands to sustain irreparable damage. The Court
had already determined with finality that he is not the owner of the disputed property
and that he has no right to possess the same independent of his claim of ownership.

Furthermore, the Order of the RTC holding in abeyance the resolution of PEA's Motion
for the Issuance of a Writ of Demolition also appears to be a circumvention of the
provisions of Section 5, Rule 58 of the Rules of Court, which limit the period of effectivity
of restraining orders issued by the courts. In fact, the assailed Orders of the RTC have
even become more potent than a TRO issued by the CA because, under the Rules of
Court, a TRO issued by the CA is effective only for sixty days. In the present case, even
in the absence of a TRO issued by a higher court, the RTC, in effect, directed the
maintenance of the status quo by issuing its assailed Orders. Worse, the effectivity of
the said Orders was made to last for an indefinite period because the resolution of
PEA's Motion for the Issuance of a Writ of Demolition was made to depend upon the
finality of the judgment in G.R. No. 181970. Based on the foregoing, the Court finds that
the RTC committed grave abuse of discretion in issuing the assailed Orders dated
December 28, 2007 and March 4, 2008.

Finally, the Court reminds the De Leon that it does not allow the piecemeal
interpretation of its Decisions as a means to advance his case. To get the true intent
and meaning of a decision, no specific portion thereof should be isolated and read in
this context, but the same must be considered in its entirety. [35] Read in this manner,
PEA's right to possession of the subject property, as well as the removal of the
improvements or structures existing thereon, fully follows after considering the entirety
of the Court's decision in PEA v. CA. This is consistent with the provisions of Section 10,
paragraphs (c) and (d), Rule 39 of the Rules of Court, which provide for the procedure
for execution of judgments for specific acts, to wit:
SECTION 10. Execution of judgments for specific act. -

x x x x

(c) Delivery or restitution of real property. - The officer shall demand of the person
against whom the judgment for the delivery or restitution of real property is rendered
and all persons claiming rights under him to peaceably vacate the property within the
three (3) working days, and restore possession thereof to the judgment obligee;
otherwise, the officer shall oust all such persons therefrom with the assistance, if
necessary, of appropriate peace officers, and employing such means as may be
reasonably necessary to retake possession, and place the judgment obligee in
possession of such property. Any costs, damages, rents or profits awarded by the
judgment shall be satisfied in the same manner as a judgment for money.

(d) Removal of improvements on property subject of execution. - When the property

subject of execution contains improvements constructed or planted by the judgment
obligor or his agent, the officer shall not destroy, demolish or remove said
improvements, except upon special order of the court, issued upon motion of the
judgment obligee after due hearing and after the former has failed to remove the same
within a reasonable time fixed by the court.

As a final note, it bears to point out that this case has been dragging for more than 15
years and the execution of this Court's judgment in PEA v. CA has been delayed for
almost ten years now simply because De Leon filed a frivolous appeal against the
RTC's order of execution based on arguments that cannot hold water. As a
consequence, PEA is prevented from enjoying the fruits of the final judgment in its favor.
The Court agrees with the Office of the Solicitor General in its contention that every
litigation must come to an end once a judgment becomes final, executory and
unappealable. Just as a losing party has the right to file an appeal within the prescribed
period, the winning party also has the correlative right to enjoy the finality of the
resolution of his case by the execution and satisfaction of the judgment, which is the
"life of the law."[36] To frustrate it by dilatory schemes on the part of the losing party is to
frustrate all the efforts, time and expenditure of the courts. [37] It is in the interest of justice
that this Court should write finis to this litigation.

WHEREFORE, the Court disposes and orders the following:

The petition for review on certiorari in G.R. No. 181970 is DENIED. The challenged
Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 90328 dated
November 21, 2007 and March 4, 2008, respectively, areAFFIRMED.

The petition for certiorari in G.R. No. 182678 is GRANTED. The assailed Orders of the
Regional Trial Court of Makati City, Branch 135, dated December 28, 2007 and March
4, 2008, are ANNULLED and SET ASIDE.

The Regional Trial Court of Makati is hereby DIRECTED to hear and resolve PEA's
Motion for the Issuance of a Writ of Demolition with utmost dispatch. This Decision
is IMMEDIATELY EXECUTORY. The Clerk of Court isDIRECTED to remand the
records of the case to the court of origin.

SO ORDERED.
[32]
Sec. 7. Expediting proceedings; injunctive relief. - The court in which the petition is
filed may issue orders expediting the proceedings, and it may also grant a temporary
restraining order or a writ of preliminary injunction for the preservation of the rights of
the parties pending such proceedings. The petition shall not interrupt the course of the
principal case unless a temporary restraining order or a writ of preliminary injunction has
been issued against the public respondent from further proceeding in the case.
 SECOND DIVISION

[ G.R. No. 150092, September 27, 2002 ]

GLOBE TELECOM, INC., DELFIN LAZARO, JR., AND ROBERTO GALANG,

PETITIONERS, VS. JOAN FLORENDO-FLORES, RESPONDENT.

DECISION

BELLOSILLO, J.:

This is a petition for review under Rule 45 of the Rules of Court seeking to annul and set
aside the Decision[1] of the Court of Appeals of 25 May 2001 in CA-G.R. SP No. 60284
which affirmed the Decision of the National Labor Relations Commission of 28 January
2000 in NLRC RAB-CAR 05-0170-98, NLRC NCR CA No. 020270-99. [2]

Petitioner GLOBE TELECOM, INC. (GLOBE) is a corporation duly organized and

existing under the laws of the Philippines. Petitioners Delfin Lazaro Jr. was its President
and Roberto Galang its former Director-Regional Sales. Respondent Joan Florendo-
Flores was the Senior Account Manager for Northern Luzon.

On 1 July 1998 Joan Florendo-Flores filed with the Regional Arbitration Branch of the
National Labor Relations Commission (NLRC) an amended complaint for constructive
dismissal against GLOBE, Lazaro, Galang, and Cacholo M. Santos, her immediate
superior, Luzon Head-Regional Sales. In her affidavit submitted as evidence during the
arbitration proceedings, Florendo-Flores bared that Cacholo M. Santos never
accomplished and submitted her performance evaluation report thereby depriving her of
salary increases, bonuses and other incentives which other employees of the same
rank had been receiving; reduced her to a house-to-house selling agent (person-to-
person sales agent or direct sales agent) of company products ("handyphone") despite
her rank as supervisor of company dealers and agents; never supported her in the sales
programs and recommendations she presented; and, withheld all her other benefits, i.e.,
gasoline allowance, per diems, representation allowance, and car maintenance, to her
extreme pain and humiliation.[3]

GLOBE and its co-petitioners claimed that after receiving her salary in the second week
of May 1998 Florendo-Flores went AWOL (Absent Without Leave) without signifying
through letter or any other means that she was resigning from her position; that
notwithstanding her absence and the filing of her case, respondent Florendo-Flores'
employment was not terminated as shown by the fact that salary was still provided her
until July 1998 to be released upon her presentation of the attendance-record sheet
indicating that she already returned and reported for work; that she continued to have
the use a of company car and company "handyphone" unit; that she was replaced only
when her absence became indefinite and intolerable as the marketing operations in
Northern Luzon began to suffer; that during the pre-trial conference it was learned that
Florendo-Flores' complaint rested on her alleged personal and private disagreement
with her immediate superior Cacholo M. Santos; that there was no official act from
GLOBE or from other officers of the company, including respondents Lazaro and
Galang, which called for Florendo-Flores' termination, diminution in rank, seniority and
benefits, or would imply, even remotely, any of the same; and, that Florendo-Flores filed
the complaint without going through the grievance process of GLOBE's Human
Resources Department and without informing its officers of her problems with Cacholo
M. Santos.

Labor Arbiter Monroe C. Tabingan declared Florendo-Flores to have been illegally

dismissed and ordered petitioners to reinstate her without loss of seniority rights and full
benefits; and to pay full back wages, inclusive of basic pay, allowances and bonuses as
prayed for in the complaint amounting to P307,625.00, exemplary damages in the sum
of P200,000.00, and ten percent (10%) of the total monetary award as attorney's fees.
However, the Labor Arbiter set aside the claim of abandonment as the company failed
to send the requisite notice to Florendo-Flores, [4] hence, there was no adherence to
procedural due process. Although he recognized that the problem brewed and
eventually boiled over due to the acts of Cacholo M. Santos, GLOBE's former Head of
Regional Sales, Luzon Area, the Labor Arbiter found the company negligent in
monitoring all its key personnel, and thus assessed against it exemplary damages at the
same time deleting actual and moral damages.[5]
Petitioners appealed the decision to the NLRC which modified the judgment of the
Labor Arbiter. The NLRC ruled that petitioners did not dismiss Florendo-Flores but that
the latter actually abandoned her employment because of a disagreement with her
immediate superior which she failed to bring to the attention of GLOBE and its officers,
particularly petitioners Lazaro and Galang. [6] However, the NLRC declared that if only as
an act of grace for the latter's past services with the company, GLOBE, Lazaro and
Galang should be held accountable for the back wages of Florendo-Flores amounting to
P307,625.00 minus the amount of P63,000.00 for the value of the company car in
Florendo-Flores' possession, or the net amount of P244,625.00. [7]

Both parties elevated the NLRC decision to the Court of Appeals, each side through a
petition for certiorari. In its Resolution of 2 September 2000 the appellate court
dismissed the petition of Florendo-Flores for failure to append the required verification
and certification of non-forum shopping, [8] while it gave due course to the petition of
GLOBE, Lazaro and Galang.

In their petition before the appellate court, GLOBE, Lazaro and Galang averred that the
NLRC committed grave abuse of discretion amounting to lack or excess of jurisdiction
when it ordered them to pay Florendo-Flores full back wages and damages despite its
express finding that they did not cause the dismissal of Florendo-Flores as the latter
had actually abandoned her employment on account of her personal differences with
her superior.

In its Decision of 25 May 2001 the Court of Appeals found that Florendo-Flores was
constructively dismissed and that payment of back wages and damages was in order.
On 21 June 2001 GLOBE, Lazaro and Galang filed a motion for reconsideration but the
motion was denied in the appellate court's Resolution of 19 September 2001.

Petitioners pose the following questions in this petition: In a special civil action for
certiorari where factual findings are deemed to be final and conclusive, can the Court of
Appeals alter or substitute the findings of fact of the lower court/tribunal? In the face of
the finding of the NLRC that respondent abandoned her employment because of a
personal squabble with her immediate superior, and that petitioners had nothing to do
with the severance of Flores' employment, can petitioners be held legally liable for back
wages while the guilty party Cacholo M. Santos is legally absolved of liability?
Petitioners submit that the answers to both questions must be in the negative. They
argue that the appellate court can neither alter nor substitute the factual findings of the
NLRC as they are legally deemed to be final and conclusive in a certiorari proceeding.
They contend that a special civil action for certiorari is an extraordinary remedy created
not to correct mistakes in the factual findings or conclusions of the lower court or
tribunal, but a remedy intended to rectify jurisdictional errors and grave abuse of
discretion. Thus, the Court of Appeals cannot make its own factual findings and
substitute them for the factual findings of the NLRC, and on such basis render a
decision.

Petitioners further note that the appellate court failed to address the issues raised in
their petition. They reiterate their position that they cannot be held liable for payment of
back wages as an act of grace in view of the express finding by the NLRC that
respondent abandoned her employment because of a personal rift with her immediate
superior and not due to any act attributable to them. They stress that there can be no
liability in the absence of any wrongful act.

Invoking the principle of res inter alios acta declaring that the rights of a party cannot be
prejudiced by the act, declaration or omission of another, petitioners insist that since the
NLRC found that respondent's problems arose from the acts and deeds of Santos, he
alone should be held liable. Petitioners find special exception to the NLRC's application
of the concept of "act of grace" to justify the award since an "act of grace is not a
source of demandable obligation. They argue that it is not within the power of any
judicial or administrative agency to compel an employer to be liberal.

In the review of an NLRC decision through a special civil action for certiorari, resolution
is confined only to issues of jurisdiction and grave abuse of discretion on the part of the
labor tribunal.[9] Hence, the Court refrains from reviewing factual assessments of lower
courts and agencies exercising adjudicative functions, such as the NLRC. Occasionally,
however, the Court is constrained to delve into factual matters where, as in the instant
case, the findings of the NLRC contradict those of the Labor Arbiter.

In this instance, the Court in the exercise of its equity jurisdiction may look into the
records of the case and re-examine the questioned findings. [10] As a corollary, this Court
is clothed with ample authority to review matters, even if they are not assigned as errors
in their appeal, if it finds that their consideration is necessary to arrive at a just decision
of the case.[11] The same principles are now necessarily adhered to and are applied by
the Court of Appeals in its expanded jurisdiction over labor cases elevated through a
petition for certiorari; thus, we see no error on its part when it made anew a factual
determination of the matters and on that basis reversed the ruling of the NLRC.

Glaring however is the discrepancy between the text of the decision of the appellate
court which declares that respondent Florendo-Flores "was unlawfully constructively
dismissed" from employment,[12] and its dispositive portion which declares that "the
assailed judgment is affirmed." [13] It should be noted that the "assailed judgment"
referred to the NLRC Decision which declared that respondent was not illegally
dismissed but that she abandoned her employment. Even in the award of back wages
and exemplary damages the two (2) decisions are at odds: The award of back wages
made by the NLRC was a gratuity or an act of grace from petitioners while the award
made by the Court of Appeals could be assumed to be anchored on its finding of illegal
dismissal. How should the inconsistency be reconciled?

Where there is conflict between the dispositive portion of the decision and the body
thereof, the dispositive portion controls irrespective of what appears in the body.
[14]
While the body of the decision, order or resolution might create some ambiguity in
the manner the court's reasoning preponderates, it is the dispositive portion thereof that
finally invests rights upon the parties, sets conditions for the exercise of those rights,
and imposes the corresponding duties or obligations. [15] Hence, for the Court of Appeals
to have affirmed the assailed judgment is to adopt and uphold the NLRC finding of
abandonment and its award of full back wages to respondent as an "act of grace" from
petitioners.

However, we believe this is not the proper view as the records reveal that respondent
was constructively dismissed from service.

Constructive dismissal exists where there is cessation of work because "continued

employment is rendered impossible, unreasonable or unlikely, as an offer involving a
demotion in rank and a diminution in pay." [16] All these are discernible in respondent's
situation. She was singularly edged out of employment by the unbearable or
undesirable treatment she received from her immediate superior Cacholo M. Santos
who discriminated against her without reason - not preparing and submitting her
performance evaluation report that would have been the basis for her increased salary;
not forwarding her project proposals to management that would have been the source
of commendation; diminishing her supervisor stature by assigning her to house-to-
house sales or direct sales; and withholding from her the enjoyment of bonuses,
allowances and other similar benefits that were necessary for her efficient sales
performance. Although respondent continued to have the rank of a supervisor, her
functions were reduced to a mere house-to-house sales agent or direct sales agent.
This was tantamount to a demotion. She might not have suffered any diminution in her
basic salary but petitioners did not dispute her allegation that she was deprived of all
benefits due to another of her rank and position, benefits which she apparently used to
receive.

Far from pointing to Santos alone as the source of her woes, respondent attributes her
degraded state to petitioners as well. Florendo-Flores cited petitioners' apathy or
indifference to her plight as she was twice left out in a salary increase in August 1987
and May 1998, without petitioners giving her any reason. [17] It eludes belief that
petitioners were entirely in the dark as the salary increases were granted to all
employees across-the-board but respondent was the only one left receiving a
P19,100.00 per month basic salary while the rest received a basic salary of almost
P35,000.00 per month.[18] It is highly improbable that the exclusion of respondent had
escaped petitioners' notice. The absence of an evaluation report from Santos should
have been noted by petitioners and looked into for proper action to have been made. If
a salary increase was unwarranted, then it should have been sufficiently explained by
petitioners to respondent.

Petitioners argue that respondent Florendo-Flores could have brought to their attention
the deplorable treatment she received from Santos by resorting to the company's
grievance machinery so that the problems in her relationship with Santos could then
have been easily ironed out, but she did not. It remains uncontroverted that respondent
had inquired from petitioners the reason why her other benefits had been withheld and
sought clarification for her undeserved treatment but petitioner company and Santos
remained mum.[19]

Thus, contrary to the observation of the NLRC, the dispute was not a mere private spat
between respondent Florendo-Flores and her immediate superior Santos. Granting that
this was the case, it had exceeded the periphery of simple personal affairs that
overflowed into the realm of respondent's employment.
Respondent narrates that sometime in June 1997 Santos wrote her a baseless
accusatory letter, and he together with GLOBE Sales Director Roberto Galang, one of
petitioners herein, verbally told her that she should resign from her job, but she refused.
[20]
Thereafter, in July 1997 and the months subsequent thereto all of respondent's other
benefits were withheld without any reason nor explanation from the company. [21] Even
as petitioners endeavored to lay the blame on Santos alone, he would not have been
able to single-handedly mastermind the entire affair as to influence Sales Director
Galang and manipulate the payroll. It only stands to reason that Santos was acting
pursuant to a management directive, or if not, then petitioners had condoned it, or at the
very least, were negligent in supervising all of their employees. As aptly observed by the
Labor Arbiter -

x x x x it would appear however that the respondent company was negligent in

monitoring all its key personnel. For it is the bounden duty of the corporate officialdom
to constantly monitor their managerial staff if only to ascertain the smooth flow of work
and operations, which includes the inter-personal relations of each and every key
segment of the corporate machinery. For such, it must be assessed with just and
reasonable exemplary damages.[22]

The unauthorized absence of respondent should not lead to the drastic conclusion that
she had chosen to abandon her work. To constitute abandonment, there must be: (a)
failure to report for work or absence without valid or justifiable reason; and, (b) a clear
intention, as manifested by some overt act, to sever the employer-employee
relationship,[23] requisites that are negated by the immediate filing by respondent
Florendo-Flores of a complaint for constructive dismissal against petitioners. A charge of
abandonment is totally inconsistent with the immediate filing of a complaint for illegal
dismissal; more so, when it includes a prayer for reinstatement. [24]

The reduction of respondent's functions which were originally supervisory in nature to a

mere house-to-house sales agent or direct sales agent constitutes a demotion in rank.
For this act of illegal dismissal, she deserves no less than full back wages starting from
the time she had been illegally dismissed until her actual reinstatement to her former
position without loss of seniority rights and other benefits - earned, accrued and
demandable. She shall continue to enjoy her benefits, privileges and incentives
including the use of the company car and "handyphone."
The managerial prerogative to transfer personnel must be exercised without grave
abuse of discretion. It must always bear in mind the basic elements of justice and fair
play. Having the right should not be confused with the manner that right is exercised.
Thus, it cannot be used as a subterfuge by the employer to rid himself of an undesirable
worker.[25]

In constructive dismissal, the employer has the burden of proving that the transfer and
demotion of an employee are for just and valid grounds such as genuine business
necessity.[26] The employer must be able to show that the transfer is not unreasonable,
inconvenient, or prejudicial to the employee. It must not involve a demotion in rank or a
diminution of salary and other benefits. If the employer cannot overcome this burden of
proof, the employee's demotion shall be tantamount to unlawful constructive dismissal.

It should be noted that the award of back wages in the instant case is justified upon the
finding of illegal dismissal, and not under the principle of "act of grace" for past services
rendered. There are occasions when the Court exercises liberality in granting financial
awards to employees, but even then they contemplate only the award of separation pay
and/or financial assistance, and only as a measure of social justice when the
circumstances of the case so warrant, such as instances of valid dismissal for causes
other than serious misconduct or those reflecting on the employees' moral character.
[27]
Proper regard for the welfare of the labor sector should not dissuade us from
protecting the rights of management such that an award of back wages should be
forthcoming only when valid grounds exist to support it.

An award of actual and moral damages is not proper as the dismissal is not shown to be
attended by bad faith, or was oppressive to labor, or done in a manner contrary to
morals, good customs or public policy.[28] Exemplary damages are likewise not proper as
these are imposed only if moral, temperate, liquidated or compensatory damages are
awarded.[29]

WHEREFORE, the judgment appealed from is MODIFIED. The Decision of the Court of
Appeals of 25 May 2001 in CA-G.R. SP No. 60284 affirming the Decision of the National
Labor Relations Commission of 28 January 2000 declaring that respondent Joan
Florendo-Flores had abandoned her work is SET ASIDE. Petitioners Globe Telecom,
Inc., Delfin Lazaro, Jr., and Roberto Galang are ordered to pay respondent Joan
Florendo-Flores full back wages from the time she was constructively dismissed on 15
May 1998 until the date of her effective reinstatement, without qualification or deduction.
Accordingly, petitioners are ordered to cause the immediate reinstatement of
respondent to her former position, without loss of seniority rights and other benefits. No
pronouncement as to costs.

SO ORDERED.

THIRD DIVISION

[ G.R. No. 121428, November 29, 1995 ]

EX-BATAAN VETERANS SECURITY AGENCY, INC. AND/OR LEONARDO CASTRO,

JR., PETITIONERS, VS. THE NATIONAL LABOR RELATIONS COMMISSION (1ST
DIVISION), HON. GEOBEL A. BARTOLABAC, FRANCISCO BADOCDOC,
NORBERTO BARBA, GILBERT ENDUMA, JOEL RORNAL, BERNARDO TOLENTINO,
FELIX PALLES, ROFELIO QUINTANA, SELVINO CADALIN, EDGARDO DOROJA,
HECTOR GALLANO, JIMITO RICOHERMOSO, JOSE DELA PENA BALINGIT,
RESPONDENTS.

DECISION

MELO, J.:

Before us is a petition for certiorari seeking the annulment of the decision dated June 5,
1995 of respondent National Labor Relations Commission (NLRC) and the order dated
October 27, 1994 issued by respondent Labor Arbiter Geobel A. Bartolabac.

The issue posed by the petition is whether the dispositive portion of a decision of a
Labor Arbiter of the National Labor Relations Commission (the decision dated July 31,
1992 rendered in consolidated cases NLRC NCR No. 00-08-03268-88 and NLRC NCR
No. 00-08-3402-88) awarding backwages and attorney's fees to, and ordering the
reinstatement of, private respondents herein and which has become final and executory,
may be amended and expanded by a later order of another Labor Arbiter (the order
dated October 27, 1994 which is sought to be annulled in the present petition) by
granting separation pay to private respondents in lieu of reinstatement even as the
original decision dated July 31, 1992 did not award separation pay to private
respondents.

The facts of the case as gleaned from the record are as follows:

On August 8 and 11, 1988, private respondents filed complaints thence docketed as
NLRC NCR Case No. 00-08-03268-88 and NLRC NCR Case No. 00-08-3402-88 (which
were later consolidated) against petitioners herein for illegal dismissal, praying for
reinstatement with backwages and attorney's fees.

The parties submitted their respective position papers and documentary evidence, and
after hearing, Labor Arbiter Cresencio J. Ramos, on July 31, 1992 rendered a decision
(Annex A, Petition), the dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered ordering respondents Ex-Bataan Veteran

Security Agency Inc. and/or Leonardo Castro, to pay to each of the 12 complainants
backwages for three (3) years computed from the latest salary of complainants, as
follows:

Backwages

1. Norberto Barba P79,200.00

2. Gilbert Enduma 79,200.00
3. Joel Formal 57,600.00
4. Bernardo Tolentino 79,200.00
5. Felix Palles 57,600.00
6. Francisco Badocdoc 79,200.00
7. Rogelio Quintana 79,200.00
8. Salvino Cadalin 79,200.00
9. Edgardo Doroja 79,200.00
10. Hector Gallano 79,200.00
11. Juito Richdermoso 79,200.00
12. Jose dela Pena Balingit 57,600.00
P885,600.00
Refund for illegal deduction 6,709.20
P892,307.20
Attorney's fees of 10% 89,230.92
P981,540.12
=========

To refund to complainants the amount illegally deducted from the salary of complainants
representing AFP Mutual Fund, at P559.10 each or a total of P6,709.20.

To reinstate complainants immediately to their previous position without loss of seniority

rights and privileges.
Respondents is (sic) also ordered to pay complainants, attorney's fees equivalent to ten
(10) percent of the total award within ten (10) days from receipt of this decision, in the
amount of P89,230.92.

All other claims are dismissed for lack of merit.

(pp. 32-33, Rollo.)

Petitioners interposed an appeal from said decision before respondent NLRC. Pending
the appeal, the Labor Arbiter issued a writ of execution dated October 7, 1992 for the
immediate reinstatement of private respondents.

On October 15, 1992, Sheriff Ramon Nonato Dayao submitted his Sheriffs
Return/Report, stating, among other things, that on October 12, 1982, he received a
copy of a certification issued and signed by Mr. Leonardo O. Castro, Sr., President of
petitioner Ex-Bataan Veterans Security Agency, Inc., that the complainants (private
respondents herein) were reinstated to their previous positions (Records, pp. 608), [p. 6
of decision of respondent NLRC promulgated June 5, 1995, p. 48, Rollo].

On May 12, 1993, respondent NLRC issued a resolution (Annex B, Petition), affirming
the decision in NLRC cases NCR No. 00-08-03268-88 and 00-08-03402-88.

Consequently, petitioners filed on July 28, 1993 before this Court a petition
for certiorari docketed as G.R. No. 110984, praying that the decision dated July 31,
1992, as well as the resolution dated May 12, 1993 in the aforementioned cases be set
aside as null and void and that the complaint be dismissed.

In the meantime, on October 8, 1993, the complainants in Cases No. 00-08- 03268-88
and No. 00-08-3402-88 (private respondents herein) received all the monetary awards
in satisfaction of the decision dated July 31, 1992 (p. 6, decision of June 5, 1995 of
NLRC, Annex C, Petition). This finding of fact of respondent NLRC is categorically
confirmed by private respondents in their comment in the instant case, to wit:

There is no dispute that the original decision of then Labor Arbiter, Cresencio Ramos,
ordering the respondents (now petitioners) to pay each of the 12 complainants back
wages for three (3) years computed from the latest salary of complainants x x x to
reinstate complainants plus attorney's fees all in the total amount of NINE HUNDRED
EIGHTY ONE THOUSAND FIVE HUNDRED FORTY PESOS (P981,540.000 which
already executed. (sic)

(p. 91, Rollo.)

On February 21, 1994, the First Division of this Court dismissed the petition
for certiorari filed in G.R. No. 110984, and judgment was accordingly entered on April 4,
1994. By virtue of said dismissal, necessarily the decision dated July 31, 1992 became
final and executory.

Subsequently, private respondents filed a motion for reinstatement and for payment of
their withheld wages from October 15, 1994 up to the time they are actually reinstated
and, if reinstatement is not feasible, for separation pay.

On October 27, 1994, Labor Arbiter Geobel A. Bartolabac, one of the public respondent
herein, issued an Order (Annex D, Petition), the order sought to be annulled herein, the
dispositive portion of which reads as follows:

WHEREFORE, premises considered, respondent is hereby ordered to pay

complainants the following:

a) Separation pay at one-half (1/2) month for salary for every year of service for each
complainant from 1987 to 1994 or P145 x 15 day x 7 = P15,225.00

b) Withheld wages at one-half (1/2) month salary from October 12, 1992 to 12 October
1994 for each complainant.

10/2/92-12/15/93 = 14.10 mos.

P118 x 15 days x 14.10 mos. = P24,957.00
12/16/93-3/31/94 = 3.5 mos.
P135 x 15 days x 3.5 mos. 7,087.50
4/1/94-10/12/94 = 6.40 mos.
P145 x 15 days x 6.40 mos. 13,920.00 P45,964.50
P61,189.50
========

(p. 63, Rollo.)

Petitioners filed a motion for reconsideration of said order with opposition to the
issuance of an alias writ of execution, later twice supplemented.

On June 5, 1995, respondent NLRC, treating the motions for reconsideration as an

appeal, issued the questioned decision (Annex C, Petition), the dispositive portion of
which reads as follows:

WHEREFORE, premises considered, the appealed Order of the Labor Arbiter dated
October 27, 1994 is hereby MODIFIED, deleting the award, ordering the respondent to
pay the complainants the withheld wages at one-half (1/2) month salary from October
12, 1992 to October 12, 1994 amounting to P45,964.50 for each complainant.

According to petitioners they filed on July 3, 1995, a motion for a partial reconsideration
of the afore-mentioned decision so as to set aside the award of separation pay.

Hence, the present petition.

Are private respondents, the question is posed, entitled to separation pay although such
was not decreed in the decision of July 31, 1992?

The findings of fact of the NLRC are accorded great respect and should not needlessly
be disturbed on appeal. Absent any showing that said factual findings are not supported
by the evidence on record, they are not correctable by certiorari (Diola vs. National
Labor Relations Commission, 222 SCRA 860 [1993]). Findings of fact by administrative
agencies such as the NLRC are generally accorded not only respect, but even finality
(Philippine School of Business Administration vs. National Labor Relations Commission,
223 SCRA 305 [1993] Garcia vs. Manila Times, 224 SCRA 399 [1993]).
It must be stressed at this juncture that respondent NLRC found that private
respondents were actually reinstated by petitioners, to wit:

The records show that the complainants after their payroll reinstatement were actually
reinstated and reported for work with respondent Ex-Bataan Veterans Security Agency
on October 12, 1992. This fact was supported by the Sheriffs Return/Report dated
October 12, 1992 by Mr. Leonardo Castro, President of respondent Ex-Bataan Veterans
Security Agency, Inc.

Likewise, upon the actual reinstatement of complainants on October 12, 1992 with the
conformity of the group leader, Mr. Francisco Badocdoc, they were all advised to secure
security guard licenses, insurance policies and complete uniform prior to their re-
assignment or posting. Complainants did not comply with the said requirements for
reasons of their own and did not report for work anymore. The complainants did not
demand anew for their reinstatement after October 12, 1992 and because the
complainants did not report for work after October 12, 1992, they were considered to
have waived their right to reinstatement.

Moreover, since the complainants did not render service with the respondent security
agency during the period from October 12, 1992 to October 12, 1994, they are not
entitled to salary or wages under the principle of no work - no pay.

In his assailed decision, the Labor Arbiter ruled and We quote:

"Upon careful perusal, the evidence shows that complainants were holder of valid
licenses and were fully covered by insurance.

Hence, the remaining issue to be considered is whether or not it is correct for the
security agency to hold that complainants were at fault, as they failed to provide their
own uniform for them to be reinstated physically.

Generally, security guards are granted uniform allowance which are over and above the
basic salaries of employees. In fact, PADPAO rates show a separate rate for uniform
allowance which is directly given to security guards aside from the basic salary.

Ordinarily, the security agency initially provides in advance the uniform of the guards.
Hence, unless their is a contrary agreement, the guard thereafter received his monthly
salary sans the amount allotted for uniform allowance. Strictly, therefore, the security
agency shoulders in advance the uniforms of guards.

In the case at bar, complainants have already received their backwages and
remuneration for their payroll reinstatement. Thus, there is no reason why they could
not spare the agency from spending in advance for their uniforms.

Viewed under these circumstances we, therefore, hold that the blame should not be
place entirely on one party. It is in this respect that we believe that equity and fairness
would be better served that complainant should received only one-half (1/2) month
salary of the withheld wages from October 1992 to October 1994.

Accordingly, we are not impressed by respondent's contention that complainant have

waived their right to reinstatement by the mere failure to advance the expenses for their
uniform."

Based on above findings of the Labor Arbiter, it is presumed that the complainants did
not report for work because the respondent Ex-Bataan Veterans Security Agency failed
to provide the complainants with their uniforms.

We agree with the respondent Ex-Bataan Veterans Security Agency that it is not obliged
to give and provide the uniform of its security guards. As correctly pointed out, Section
4 of the Revised Rules and Regulations governing the organizations and operations of
private detective, watchmen, and security guard agencies expressly provides:

All licensed guards shall provide themselves with one (1) set of the prescribed uniform
once a year unless their employers provide it free.

As earlier maintained by respondent Security Agency, this policy of providing free

uniform does not exist in the respondent security agency. Hence, the security guards
themselves should buy their own uniforms.

As clearly pointed out by the Labor Arbiter that since the complainants have already
received their backwages and remuneration for their payroll reinstatement, there is no
reason why the complainants could not spare the agency from spending in advance for
their uniforms. Yet despite these findings of the Labor Arbiter, he still blamed and
faulted the respondent Ex-Bataan Veterans Security Agency for the failure of the
complainants to buy their own uniforms.

We find this conclusion of the Labor Arbiter to be erroneous. The blame for failure to
buy their uniforms should be entirely on the complainants themselves.

(pp. 51-55, Rollo)

Based on the above findings, and even as it found that the failure of private respondents
to report for work constituted a waiver of the right to actual reinstatement, the NLRC still
concluded, rather rashly, it may be said:

However, we agree with the Labor Arbiter as regards the grant of separation pay to the
complainants in lieu of reinstatement, thus we quote:

Nevertheless, we deem it proper to grant complainants' prayer to be paid their

separation pay in lieu of reinstatement but only at one-half (1/2) month salary for every
year of service, on the following grounds:

a) as a matter of right, complainants cannot demand for separation pay, as the

respondent is willing to reinstate them;

b) but, somehow, the atmosphere of harmonious relationship may not reasonably be

expected then on that it would be for the interest of both parties that the employer-
employee relationship be severed.

The award of separation is to be computed from the start of employment up to the time
of termination including the period of imputed service.

(pp. 56-57, Rollo)

The foregoing findings of fact not the conclusions of respondent NLRC, being
supported by substantial evidence, and not contrary to the evidence on record, must be
respected and accepted by this Court. These very findings, however, cannot justify and
warrant NLRC's conclusion that private respondents are entitled to separation pay.
A reading of the dispositive portion of the decision dated July 31, 1992 (Annex A,
Petition), discloses that nowhere in said dispositive portion of the decision is there an
award of separation pay to private respondents. A writ of execution should conform to
the dispositive portion of the decision to be executed, and the execution is void if it is in
excess of and beyond the original judgment or award (Buan vs. Court of Appeals, 235
SCRA 424 [1994]), for it is a settled general principle that a writ of execution must
conform strictly with every essential particular of the judgment promulgated
(Government Service Insurance Systems vs. Court of Appeals, 218 SCRA 233 [1993]).
Therefore, the award of separation pay to private respondents, not having been decreed
in the dispositive portion of the decision of July 31, 1992, is null and void.

It is to be noted that private respondents were in fact reinstated, but their failure to
actually enter into the performance of their duties is imputable to their own fault. They
failed to provide their own uniform. Petitioners are not bound to give uniforms to private
respondents. There is absolutely no showing whatsoever on record that there is an
agreement or contract between petitioners and private respondents providing that the
former shall furnish the latter with uniforms. Section 4 of Rule VI of the Revised Rules
and Regulations Governing the Organization and Operation of Private Detective,
Watchman and Security Guard Agencies Throughout The Philippines reads as follows:

SEC. 4. Provision for uniform. All employers of private security guards shall provide for
at least one (1) set of the prescribed uniform free to their respective guards for every
year of service with them. Simultaneously, all licensed guards shall provide themselves
with one (1) set of the prescribed uniform once a year unless their employers provide it
free.

In view of the foregoing findings, there is no further need to inquire into the other issue
posed by petitioners that respondent NLRC failed to act on their motion for
reconsideration.

WHEREFORE, the petition is granted, and the award of separation pay to private
respondents is hereby declared null and void.

SO ORDERED.
 FIRST DIVISION

[ G.R. No. 128349, September 25, 1998 ]

BACHRACH CORPORATION, PETITIONER, VS. THE HONORABLE COURT OF

APPEALS AND PHILIPPINE PORTS AUTHORITY, RESPONDENTS.
DECISION

VITUG, J.:

Bachrach Corporation ("Bachrach"), in its petition for review on certiorari, questions the
decision of the Court of Appeals in CA-G.R. SP No. 38763, promulgated on 12
November 1996, the dispositive part of which reading -

"WHEREFORE, the petition is granted. The assailed RTC orders are hereby
NULLIFIED and SET ASIDE and public respondent is ordered to dismiss the subject
action before him under Civil Case No. 95-73399. No pronouncement as to costs." [1] "on
several counts; viz:

"I. THE COURT OF APPEALS GRAVELY ERRED IN NOT DISMISSING CA-G.R. SP

NO. 38673 DESPITE THE FACT THAT A SIMILAR PETITION EARLIER FILED BY PPA
WAS DISMISSED FOR BEING INSUFFICIENT NOT ONLY IN FORM BUT ALSO IN
SUBSTANCE WHICH DISMISSAL CONSTITUTES RES JUDICATA INSOFAR AS THE
ISSUES RAISED THEREIN ARE CONCERNED.

"II. THE COURT OF APPEALS GRAVELY ERRED IN RULING THAT THE DECISION
IN THE UNLAWFUL DETAINER CASE CONSTITUTES RES JUDICATA WHICH BARS
THE SPECIFIC PERFORMANCE CASE.

"III. THE COURT OF APPEALS GRAVELY ERRED IN RULING THAT THE FILING OF
THE SPECIFIC PERFORMANCE CASE VIOLATES THE RULE AGAINST FORUM
SHOPPING.

"IV. THE COURT OF APPEALS GRAVELY ERRED IN RULING THAT THE WRIT OF
PRELIMINARY INJUNCTION ISSUED BY THE TRIAL COURT CONSTITUTES
INTERFERENCE WITH ITS JUDGMENT IN THE UNLAWFUL DETAINER CASE.

"V. THE COURT OF APPEALS GRAVELY ERRED IN ORDERING THE DISMISSAL OF

CIVIL CASE NO. 95-73399 THEREBY RULING ON THE MERITS OF THE CASE
WHEN IN FACT, THE ONLY ISSUES FOR ITS RESOLUTION WERE THE
PROPRIETY OF THE WRIT OF PRELIMINARY INJUNCTION ISSUED BY THE TRIAL
COURT AND THE DENIAL OF PPAS MOTION FOR PRELIMINARY HEARING ON
AFFIRMATIVE DEFENSES."[2]

It would appear that petitioner corporation entered into two lease contracts with the
Philippine government covering two specified areas, Block 180 and Block 185, located
at the Manila Port Area, then under the control and management of the Director of
Lands, for a term of ninety-nine years each, the first lease to expire on 19 June 2017
and the other on 14 February 2018. During her tenure, President Corazon Aquino
issued Executive Order No. 321 transferring the management and administration of the
entire Port Area to herein respondent Philippine Ports Authority ("PPA"). Shortly after its
take-over, PPA issued a Memorandum increasing the rental rates of Bachrach by
1,500%. Bachrach refused to pay the substantial increased rates demanded by PPA.

On 23 March 1992, PPA initiated unlawful detainer proceedings, docketed Civil Case
No. 138838 of the Metropolitan Trial Court ("MeTC") of Manila, against Bachrach for
non-payment of rent. On 27 April 1993, MeTC rendered a decision ordering the eviction
of Bachrach from the leased premises. Bachrach appealed to the Regional Trial Court
("RTC") of Manila which, on 21 September 1993, affirmed the decision of the lower
court in toto.[3]

Bachrach elevated the case to the Court of Appeals by way of a petition for review. On
29 July 1994, the appellate court affirmed the decision of the RTC. A motion for
reconsideration was filed by Bachrach; however, the resolution of the motion was put on
hold pending submission of a compromise agreement. [4] When the parties failed to
submit the promised compromise agreement, the Court of Appeals, on 15 May 1995,
denied Bachrachs motion for reconsideration. The decision of the appellate court in the
ejectment suit became final and executory on 20 May 1995. [5]

Meanwhile on 28 March 1995, while the motion for reconsideration was yet pending
with the appellate court, Bachrach filed a complaint against PPA with the Manila RTC,
docketed Civil Case No. 95-73399 (hereinafter referred to also as the specific
performance case), for refusing to honor a compromise agreement said to have been
perfected between Bachrach and PPA during their 04 February 1994 conference that
superseded the ejectment case. In its complaint, Bachrach prayed for specific
performance.
On 08 June 1995, PPA filed a motion for a writ of execution/garnishment in the
ejectment case. The next day, 09 June 1995, Bachrach filed an application in the
specific performance case for the issuance of a temporary restraining order and/or a
writ of preliminary injunction to enjoin the MeTC from issuing the writ of
execution/garnishment. PPA countered by filing a motion for preliminary hearing on its
affirmative defenses along the same grounds mentioned in its motion to dismiss the
specific performance case, to wit: (a) the pendency of another action between the same
parties for the same cause; (b) the violation of the anti-forum-shopping rule; (c) the
complaints lack of cause of action; and (d) the unenforceable character of the
compromise agreement invoked by Bachrach. On 13 July 1995, the trial court issued an
omnibus order, granting the application of Bachrach for a writ of preliminary injunction,
in this tenor -

"PREMISES CONSIDERED, this Court is of the opinion and so holds (1) that plaintiff
(Bachrach) is entitled to the injunctive relief prayed for and upon the posting of a bond in
the amount of P300,000.00, let a writ of preliminary injunction be issued enjoining the
defendant (PPA), the Presiding Judge of the Metropolitan Trial Court of Manila, Branch
2 from issuing a writ of execution/garnishment in Civil Case No. 238838-CV entitled
`Philippine Ports Authority vs. Bachrach Corporation; (2) lifting/setting aside the order
dated June 5, 1995 and (3) denying defendants motion for a preliminary hearing on
affirmative defenses."[6]

PPA moved for reconsideration of the above order but the trial court denied the plea in
its order of 29 August 1995.

On 25 September 1995, PPA filed a petition for certiorari and prohibition, with
application for the issuance of a temporary restraining order and/or writ of preliminary
injunction, docketed CA-G.R. SP No. 38508, before the Court of Appeals. The petition
was dismissed by resolution, dated 28 September 1995, of the appellate court for being
insufficient in form and substance, i.e., the failure of PPA to properly attach a certified
true copy each of the assailed order of 13 July 1995 and 29 August 1995 of the trial
court. PPA received on 05 October 1995 [7] a copy of the resolution, dated 28 September
1995, of the appellate court. Undaunted, PPA filed a new petition on 11 October 1995,
now evidently in proper form, asseverating that since it had received a copy of the
assailed resolution of the trial court only on 07 September 1995, the refiling of the
petition with the Court of Appeals within a period of less than two months from the date
of such receipt was well within the reasonable time requirement under the Rules for a
special civil action for certiorari.[8] In the meantime, the resolution, dated 28 September
1995, of the Court of Appeals which dismissed CA-G.R. No. 38508 became final on 21
October 1995.[9]

In its newly filed petition, docketed CA-G.R. SP No. 38673, PPA invoked the following
grounds for its allowance:

"I. That respondent Judge acted without, or in excess of jurisdiction, or with grave abuse
of discretion when it issued a writ of preliminary injunction against the final and
executory resolution of the Honorable Court of Appeals (Annex `I) inspite of the well-
established rule that courts are not allowed to interfere with each others judgment or
decrees by injunction, and worse, in this case, against the execution of the judgment of
a superior or collegiate court which had already become final and executory.

"II. That respondent Judge acted without, or in excess of jurisdiction, or with grave
abuse of discretion when it also denied petitioners motion for a preliminary hearing on
its affirmative defenses or in failing to have the case below outrightly dismissed on the
grounds stated in its affirmative defenses, when respondent Judge pronounced there is
no identity as to the causes of action between the case decided by the Court of Appeals
(CA-G.R. SP No. 32630) and the case below (Civil Case No. 95-73399) when clearly
the causes of action in both cases revolve on the same issue of possession of the
subject leased premises.

"III. That respondent Judge acted without, or in excess of jurisdiction, or with grave
abuse of discretion in refusing to take cognizance (of), abide (by) and acknowledge the
final judgment of the Court of Appeals which, on said ground alone, is enough
justification for the dismissal of the case grounded on res judicata. Moreover private
respondent is guilty of forum-shopping and the penalty therefor is the dismissal of its
case."[10]

On 12 November 1996, the Court of Appeals rendered the assailed decision nullifying
and setting aside the orders of the RTC and ordering the latter to dismiss the specific
performance case.

The Court finds merit in the instant appeal interposed by petitioner.

Verily, the decisive issue raised by the parties before the Court in the instant petition is
whether or not the specific performance case (Civil Case No. 73399) should be held
barred by the unlawful detainer case on the ground ofres judicata. There are four (4)
essential conditions which must concur in order that res judicata may effectively apply,
viz: (1) The judgment sought to bar the new action must be final; (2) the decision must
have been rendered by a court having jurisdiction over the subject matter and the
parties; (3) the disposition of the case must be a judgment or order on the merits; and
(4) there must be between the first and second action identity of parties, identity
of subject matter, and identity of causes of action." [11] There is no question about the
fact that all the first three elements of res judicata are here extant; it is the final condition
requiring an identity of parties, of subject matter and of causes of action, particularly the
last two, i.e., subject matter and cause of action, that presents a problem.

A cause of action, broadly defined, is an act or omission of one party in violation of the
legal right of the other.[12]The subject matter, on the other hand, is the item with respect
to which the controversy has arisen, or concerning which the wrong has been done, and
it is ordinarily the right, the thing, or the contract under dispute. [13] In a breach of
contract, the contract violated is the subject matter while the breach thereof by the
obligor is the cause of action. It would appear quite plain then that the RTC did act aptly
in taking cognizance of the specific performance case. In Civil Case No. 138838 of the
MeTC, the unlawful detainer case, the subject matter is the contract of lease between
the parties while the breach thereof, arising from petitioners non-payment of rentals,
constitutes the suits cause of action. In Civil Case No. 73399 of the RTC, the specific
performance case, the subject matter is the compromise agreement allegedly perfected
between the same parties while the cause of action emanates from the averred refusal
of PPA to comply therewith. The ultimate test in ascertaining the identity of causes of
action is said to be to look into whether or not the same evidence fully supports and
establishes both the present cause of action and the former cause of action. In the
affirmative, the former judgment would be a bar; if otherwise, then that prior judgment
would not serve as such a bar to the second.[14] The evidence needed to establish the
cause of action in the unlawful detainer case would be the lease contract and the
violation of that lease by Bachrach. In the specific performance case, what would be
consequential is evidence of the alleged compromise agreement and its breach by PPA.

The next thing to ask, of course, would be the question of whether or not the issuance
by the trial court of the writ of preliminary injunction was an improper interference with
the judgment in the unlawful detainer suit. It could be argued that, instead of filing a
separate action for specific performance, Bachrach should just have presented the
alleged compromise agreement in the unlawful detainer case. Unfortunately, the refusal
of PPA to honor the agreement after its alleged perfection effectively prevented
Bachrach from seeking the coercive power of the court to enforce the compromise in
the unlawful detainer case. The situation virtually left Bachrach with but the remedy of
independently initiating the specific performance case in a court of competent
jurisdiction. In its challenged decision, the Court of Appeals, on its part, has said that
respondent PPAs prayer for the issuance of a writ of execution and garnishment is but
the necessary and legal consequence of its affirmance of the lower courts decision in
the unlawful detainer case which has by then become final and executory. [15] The rule
indeed is, and has almost invariably been, that after a judgment has gained finality, it
becomes the ministerial duty of the court to order its execution. [16] No court, perforce,
should interfere by injunction or otherwise to restrain such execution. The rule, however,
concededly admits of exceptions; hence, when facts and circumstances later transpire
that would render execution inequitable or unjust, the interested party may ask a
competent court to stay its execution or prevent its enforcement. [17] So, also, a change in
the situation of the parties can warrant an injunctive relief. [18]Evidently, in issuing its
orders of 13 July 1995 and 29 August 1995 assailed by PPA in the latters petition for
certiorari and prohibition before the Court of Appeals, the trial court in the case at bar
would want to preservestatus quo pending its disposition of the specific performance
case and to prevent the case from being mooted by an early implementation of the
ejectment writ. In holding differently and ascribing to the trial court grave abuse of
discretion amounting to lack or excess of jurisdiction, the appellate court, in our
considered view, has committed reversible error.

Having reached the above conclusions, other incidental issues raised by petitioner no
longer need to be passed upon.
WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals is
reversed and set aside; Civil Case No. 73399 along with the assailed orders of the
Regional Trial Court, aforedated, are hereby reinstated. No costs.

SO ORDERED.

THIRD DIVISION
 [ A.M. NO. P-06-2107 (FORMERLY OCA IPI NO. 05-2184-P), February 14, 2007 ]

CEBU INTERNATIONAL FINANCE CORPORATION REPRESENTED BY ITS

PRESIDENT RUBEN ALMENDRAS, COMPLAINANT, VS. ARTHUR R. CABIGON,
SHERIFF IV, REGIONAL TRIAL COURT, BRANCH 57, CEBU CITY, RESPONDENT.

RESOLUTION

AUSTRIA-MARTINEZ, J.:

Before us is the Affidavit Complaint [1] dated April 7, 2005 of Cebu International Finance
Corporation represented by its President Ruben D. Almendras (complainant) charging
Arthur R. Cabigon (respondent), Sheriff IV, Regional Trial Court (RTC), Branch 57, Cebu
City, for Non-feasance and Neglect of Duty relative to Civil Case No. CEB-22725
entitled Cebu International Finance Corporation v. Spouses Luzviminda D. Tetales, et
al.

Complainant alleges: On January 23, 2004, a writ of possession was issued by Atty.
Jeoffrey S. Joaquino, Clerk of Court and ex-officio sheriff of the RTC, Cebu City, against
the defendants in Civil Case No. CEB-22725 pending before the RTC, Branch 57, Cebu
City. In September 2004, Atty. Joaquino assigned respondent to implement the writ
after the regular sheriff of Branch 57 was disallowed to continue its implementation. He
failed, however, to fully implement the writ as he only managed to open the gates, but
not the doors, of the house in spite of the break-open order issued by the court on the
pretext that the owners of the house were not present. Atty. Joaquino advised
respondent that he may implement the writ even in the absence of the owners of the
house and there is no need for a break-open order as the writ carries with it an authority
to employ necessary means to implement the writ. When respondent ignored the
advise of Atty. Joaquino, complainant pleaded with him and even wrote him a letter
reminding him that his continued refusal to implement the writ may open himself up to
administrative liability. Respondent never relented though and would offer flimsy
excuses every time his attention to the implementation of the writ would be called by
complainant. Worse, respondent was even guilty of double-dealing on the
implementation of the writ. On one instance, respondent called up the guard assigned
by complainant to oversee the properties subject matter of the writ asking him to allow
the son of the defendants to get some belongings therein.
In his Comment dated June 17, 2005,[2] respondent avers that he already submitted his
Sheriff's Report/Comment subject of the complaint to the RTC on June 6, 2005.

In his Report, respondent states: On September 14, 2004, he went to the address of the
defendant to serve the notice to vacate but the caretaker told him that defendant was
out. He came back the following day but was unable to contact the defendant. Finally
on September 20, 2004, he served upon defendant the notice to vacate but the latter
refused to sign the same. On the same day, he was served with an Order in Civil Case
No. CEB-30029 entitled Ralph Raye Retales, assisted by his father and natural
guardian, Leovigildo Retales v. Luzviminda Retales, et al. directing him to answer the
second amended complaint. On December 7, 2004, he received a letter from
complainant regarding the implementation of the writ of possession. Instead of replying
to the said letter and making a partial report, he was convinced by complainant's
counsel to just proceed with the implementation of the writ. On January 19, 2005, at
around 11:20 a.m., together with Rey Tibay (Tibay) (representative of plaintiff) and Atty.
Rolando P. Lavilla, he went to Cebu City and in the presence of a Barangay Councilor,
a Barangay Tanod, and a Barangay Worker, he broke the chains and padlocks of the
iron gate and the hut in front of the house located outside the gate and installed
PHILMUSA Security Guards in the premises with instructions not to let any person enter
unless cleared by the respondent or by Tibay. On the same date, at around past 5:00
p.m., defendant Luzviminda Retales called and pleaded that her son be allowed to enter
the house to get some clothes so he can attend his classes. He called and asked Tibay
about the situation and for humanitarian reasons, both agreed to let the son enter the
house and get things inside just for the night. On January 31, 2005, he was surprised to
receive a call from Tibay informing him that defendants are staying in the house at night
and going out during the day. On February 14, 2005, he wrote a letter which he served
upon defendant, informing her that the writ will be enforced on February 22, 2005. On
February 18, 2005, he received a letter from defendant's counsel informing him that the
intended execution of the writ is premature considering that there is a pending incident
embodied in the Order of February 11, 2005 requiring the plaintiff to comment on the
supplemental motion filed by defendants. And that should he pursue with the said
implementation of the writ despite the court Order, defendant will be constrained to file
the necessary administrative case against him. On the same date, he filed a
Manifestation and a request for clarification from the court. On March 4, 2005, he
received a copy of the Order denying the motion for the stay/suspension in the
implementation of the writ. He spent all the necessary expenses in connection with the
writ and as much as he would like to continue implementing the same, the lack of
logistical support prevented him and besides he cannot do anything as implementing
the same would need more expenses which plaintiff should have provided. He informed
the court that the writ of possession was duly served and partially satisfied.

In its Reply,[3] complainant alleges that despite several opportunities given him,
respondent failed to fully implement the writ. It took respondent almost nine months
from the time the writ of possession was assigned to him to file his report, in violation of
Section 14, Rule 39 of the 1997 Rules of Court. Complainant likewise refutes the
respondent's claim that he spent his own money in implementing the writ, as it provided
everything necessary for the latter to implement the writ. It did not advance the money
necessary for the implementation of the writ because respondent failed to make an
estimate of the expenses to be incurred in the implementation to be approved by the
court.

In the Agenda Report dated December 7, 2005, [4] the Office of the Court Administrator
(OCA) submitted its evaluation and recommendation, to wit:

Evaluation: As frontline officials of the justice system, sheriffs must always strive to
maintain public trust in the performance of their duties. They must see to it that the
final stage in litigation process is completed without unnecessary delay. Respondent
sheriff failed in this respect.

The writ of possession and the order to break open the chains and padlocks were
assigned for implementation to the respondent sheriff on 10 September 2004. The
notice to vacate was served upon the defendants on 20 September 2004. After more
than four months, or on 19 January 2005, respondent sheriff finally implemented the
writ, but the same has not yet been completed up to the present.

Respondent's failure to fully implement the writ of possession is inexcusable and

constitutes dereliction of duty. That he is required to implement the writ without delay is
clear from Administrative Circular No. 12 dated 1 October 1985, requiring sheriffs to
submit a progress report on the action taken on the writ within ten days from receipt of
the assignment order directing him to implement the writ. Moreover, under Section 4,
Rule 39 of the Rules of Court, sheriffs are required to render a report on the action
taken on the writ of execution within thirty days from receipt thereof and every thirty
days thereafter until judgment shall have been fully satisfied. In this case, it took
respondent sheriff nine months to submit his report on the action taken on the writ of
possession to Branch 57, which submission came about only after complainant filed a
motion to require him to render his report.

His claim that he was prevented from fully implementing the writ by lack of logistical
support from the complainant is untenable. Under the writ, he was duty-bound
to collect from complainant the expenses for execution of the writ. He should not
have, therefore, waited passively for the amount to be remitted to him because he is
obliged to submit and secure the approval by the court of the estimated expenses and
fees for the implementation of the writ. The records are bereft of any showing that he
took the initiative in this respect. He cannot, therefore, blame complainant for his
omissions.

In Lumbre v. dela Cruz, the respondent, after being found guilty of an inexcusable
seven-month delay in carrying out a lawful Writ of Execution was fined PhP5,000.00.
The same penalty was imposed on the erring sheriff inFajardo v. Quitalig. Taking into
consideration the stance of the Court in these cases, the imposition of a fine in the
amount of P5,000.00 upon herein respondent sheriff is appropriate.

RECOMMENDATION: The foregoing circumstances considered, it is respectfully

recommended that Arthur B. Cabigon, Sheriff IV, Office of the Clerk of Court, Regional
Trial Court, Cebu City, be FINED in the amount of Five Thousand Pesos (P5,000.00),
with a STERN WARNING that a repetition of the same or similar offense will be dealt
with more severely.

We agree and adopt the findings and recommendation of the OCA.

On March 30, 2006, respondent manifests that he is willing to submit the administrative
matter for resolution based on the pleadings filed.

For failure of the complainant to manifest it is willing to submit the matter for
resolution/decision based on the pleadings filed, the Court, in its Resolution of October
11, 2006, deemed the case submitted for resolution.

Well-settled is the rule that a sheriff's duty in the execution of the writ is purely
ministerial; he is to execute the order of the court strictly to the letter. [5] He has no
discretion whether to execute the judgment or not. [6] When a writ is placed in the hands
of the sheriff, it is his duty, in the absence of any instructions to the contrary, to proceed
with reasonable celerity and promptness to implement it in accordance with its mandate.
[7]
For it is only by doing so could he ensure that the order is executed without undue
delay. It cannot be overemphasized that sheriffs play an important part in the
administration of justice, because they are tasked to execute the final judgments of
courts. If not enforced, such decisions are empty victories on the part of the prevailing
parties.[8] Indeed, the execution of a final judgment is the fruit and end of the suit and is
the life of the law.

And we held in Escobar Vda. De Lopez v. Luna:[9]

As public officers who are repositories of public trust, sheriffs have the obligation to
perform the duties of their office honestly, faithfully and to the best of their abilities.
They must always hold inviolate and invigorate the tenet that a public office is a public
trust. As court personnel, their conduct must be beyond reproach and free from any
suspicion that may taint the judiciary. They must be circumspect and proper in their
behavior. They must use reasonable skill and diligence in performing their official
duties, especially when the rights of individuals may be jeopardized by neglect. They
are ranking officers of the court entrusted with a fiduciary role. They play an important
part in the administration of justice and are called upon to discharge their duties with
integrity, reasonable dispatch, due care and circumspection. Anything less is
unacceptable. This is because in serving the courts writs and processes and in
implementing the orders of the court, sheriffs cannot afford to err without affecting the
efficiency of the process of the administration of justice. Sheriffs are at the grassroots of
our judicial machinery and are indispensably in close contact with litigants, hence their
conduct should be geared towards maintaining the prestige and integrity of the court, for
the image of a court of justice is necessarily mirrored in the conduct, official or
otherwise, of the men and women who work thereat, from the judge to the least and
lowest of its personnel.[10]

We find respondent to be remiss in his duties and responsibilities. It is noted that

although respondent executed the writ of possession on September 14, 2004, a day
after he received his assignment order from the court, the same was not fully
implemented due to the fact that defendants were not in the premises to receive the
said writ. It was only on September 20, 2004 that respondent was able to serve on
defendant the writ but the latter refused to affix her signature therein. It was only on
January 19, 2005 that respondent, assisted by barangay authorities, was able to break
the padlocks of the iron gate and the hut located outside the gate and thereupon placed
security guards to secure the premises.

Section 14, Rule 39 of the Rules of Court provides that the writ of execution shall be
returnable to the court issuing it immediately after the judgment has been satisfied in
part or in full. If the judgment cannot be satisfied in full within thirty days after his receipt
of the writ, the officer shall report to the court and state the reason therefor. The officer
shall make a report to the court every thirty days on the proceedings taken thereon until
the judgment is satisfied in full, or its effectivity expires.

In San Jose v. Centeno,[11] the Court held that there is neglect in the performance of duty
on the part of respondent when he failed to submit his report on time. Records show
that the writ was placed in the hands of respondent on September 13, 2004, and the
return was made only on June 3, 2005, or more than eight months after the partial
execution of the same and after complainant filed a Motion to direct respondent to
render a report on the writ of possession assigned to him for implementation.

It is of no moment that the court, in its Order [12] of June 15, 2004, denied the
abovementioned motion on the ground that the allegations of double-dealing committed
by respondent is an irresponsible and reckless insinuation, hence, baseless and
unfounded. It is clear from the facts of the case that respondent was negligent in his
duties and responsibilities required of him for the orderly administration of justice.

Also, respondent's averment that the lack of logistical support prevented him from
executing the writ and that he cannot do anything as implementing the same needs
more expenses which plaintiff should have provided, is simply untenable. Section 9,
Rule 141 of the Rules of Court provides, inter alia, that a sheriff must submit an
estimate of expenses and have the same approved by the court. Respondent's failure
to follow basic procedure for the smooth implementation of the writ warrants disciplinary
action from this Court.

Respondent must always bear in mind that public service requires utmost integrity and
strictest discipline. A public servant must exhibit at all times the highest sense of
honesty and integrity.[13] The administration of justice is a sacred task. By the very
nature of their duties and responsibilities, all those involved in it must faithfully adhere
to, hold inviolate, and invigorate the principle solemnly enshrined in the 1987
Constitution that a public office is a public trust; and all public officers and employees
must at all times be accountable to the people, serve them with utmost responsibility,
integrity, loyalty and efficiency. The conduct and behavior of everyone connected with
an office charged with the dispensation of justice, from the presiding judge to the
lowliest clerk, should be circumscribed with the heavy burden of responsibility.[14] Their
conduct, at all times, must not only be characterized by propriety and decorum but,
above all else, must be above suspicion. Indeed, every employee of the judiciary
should be an example of integrity, uprightness and honesty.[15]

In several cases[16] involving neglect of duty, the Court finds it proper to impose a fine of
P5,000.00 on erring court personnel. However, considering that in a minute resolution
of March 21, 2001, the Court reprimanded respondent for neglect of duty with a warning
that a repetition of the same offense will be dealt with more severely, [17] we find it
appropriate to impose a fine of P10,000.00 with stern warning that a repetition of the
same or similar offense will be dealt with more severely.

ACCORDINGLY, the Court finds respondent ARTHUR R. CABIGON guilty of neglect of

duty and is FINED in the amount of TEN THOUSAND PESOS (P10,000.00) with
a STERN WARNING that a repetition of the same or similar offense will be dealt with
more severely.

SO ORDERED.
 EN BANC

G.R. No. L-20236 July 30, 1965

PHILIPPINE NATIONAL BANK, plaintiff-appellant,

vs.
JOAQUIN BONDOC, defendant-appellee.

Tomas Besa and Antonio P. Ruiz for plaintiff-appellant.

Eriberto D. Ignacio for defendant-appellee.

BENGZON, J.P., J.:

On June 29, 1949 the Philippine National Bank obtained a judgment in Civil Case No.
8040 from the Court of First Instance of Manila against Joaquin M. Bondoc for
P10,289.60 plus interest at the rate of 7% per annum computed from June 30, 1949 and
attorney's fees. This judgment was never executed.

After five years and upon the instance of the Philippine National Bank said judgment
was revived in Civil Case No. 30663 on February 20, 1957 where the Court of First
Instance of Manila condemned Joaquin M. Bondoc to pay the Philippines National Bank
the sum of P16,841.64 plus 7% interest and costs. Neither was this judgment enforced
during the five years thereafter.

But on June 7, 1962 the Philippine National Bank instituted in the Court of First Instance
of Manila Civil Case No. 50601 for the enforcement of the judgment rendered in Civil
Case No. 30663. On motion of defendant, however, the complaint for revival of
judgment was dismissed on grounds of prescription and lack of cause of action.

The lower court held that the right to revive the judgment has prescribed inasmuch as
more than ten years had elapsed since it was first rendered on June 29, 1949. It further
ruled that the Code of Civil Procedure (Act 190) or the New Civil Code does not provide
for the revival of a revived judgment.

Plaintiff has appealed from the order of dismissal. The only issue is whether or not a
revived judgment may itself be revived.

Section 6 of Rule 39 states:

SEC. 6. Execution by motion or by independent action. A judgment may be

executed on motion within five (5) years from the date of its entry or from the
date it becomes final and executory. After the lapse of such time, and before it is
barred by the statute of limitation, a judgment may be enforced by action.

Section 6, abovequoted, makes no distinction as to the kind of judgment which may be

revived by ordinary independent action. Such being so, proposition that a revived
judgment cannot any more be enforced by action under said section has no justification.
When the law does not distinguish, neither should we.

A judgment rendered on a complaint for the revival of a previous judgment is a new

judgment and the rights of the plaintiff rest on the new judgment not on the previous
one. Precisely, the purpose of the revival of a judgment is to give a creditor a new right
of enforcement from the date of revival. 1 The rule seeks to protect judgment creditors
from wily and unscrupulous debtors who, in order to evade attachment or execution,
cunningly conceal their assets and wait until the statute of limitations sets in.

Section 6 aforementioned requires that the judgment sought to be revived is not bared
by prescription. Under Article 1144(3) of the New Civil Code the right to enforce a
judgment prescribes in ten years counted from the date said judgment becomes final. 2

A judgment is revived only when the same cannot be enforced by motion, that is, after
five years from the time it becomes final. A revived judgment can be enforced by motion
within five years from its finality. After said five years, how may the revived judgment be
enforced? Appellee contends that by that time ten years or more would have elapsed
since the first judgment becomes final, so that an action to enforce said judgment would
then be barred by the statute of limitations.

Appellee's theory relates the period of prescription to the date the original judgment
became final. Such a stand is inconsistent with the accepted view that a judgment
reviving a previous one is a new and different judgment. The inconsistency becomes
clearer when we consider that the causes of action in the three cases are different. In
the original case, the action was premised on the unpaid promissory note signed by
Joaquin Bondoc in favor of the Philippine National Bank; in the second case, the
Philippine National Bank's cause of action was the judgment rendered in Civil Case No.
8040; and in the present case, the basis is the judgment rendered in Civil Case No.
30663. Parenthetically, even the amounts involved are different.

The source of Section 6 aforecited is Section 447 of the Code of Civil Procedure which
in turn was derived from the Code of Civil Procedure of California. The rule followed in
California in this regard is that a proceeding by separate ordinary action to revive a
judgment is a new action rather than a continuation of the old, and results in a new
judgment constituting a new cause of action, upon which a new period of limitations
begins to run.3

The judgment in Civil Case No. 30663, which provided the cause of action in the case at
bar, was rendered on February 20, 1957 and became final in the same year. Pursuant
to Article 1144(3) of the New Civil Code the action upon such judgment must be brought
within ten years from 1957 or until 1967. The instant case instituted in the court a
quo on June 7, 1962 is well within the prescriptive period.

WHEREFORE, the order appealed from is hereby set aside and this case remanded to
the lower court for further proceedings. Costs against appellee. It is so ordered.
 FIRST DIVISION

[ G.R. No. 118339, March 19, 1998 ]

AURORA B. CAMACHO, PETITIONER, VS. COURT OF APPEALS, LEONCIA

DIZON, RICARDO VALERA, DELFIN MANLAPID, JACOBE QUINTOS AND SPOUSES
GASPAR AND ELENA QUINTOS, RESPONDENTS.

DECISION

BELLOSILLO, J.:

The issue here is not new; it is simply, whether a judgment may still be executed by
mere motion after the lapse of five (5) years from its finality.

Before the then Court of First Instance (now Regional Trial Court) of Balanga, Bataan,
respondents Leoncia Dizon, Ricardo Valera, Delfin Manlapid, Jacobe Quintos and
spouses Gaspar and Elena Quintos instituted an action for specific performance against
petitioner Aurora B. Camacho concerning certain portions of Lot No. 26108 covered by
TCT No. T-29799. Their claim was anchored on the respective deeds of sale in their
favor.

On 20 December 1974 the trial court ruled for respondents. Petitioner was ordered,
among other things, to segregate the definite portions sold to respondents and to deliver
to them their corresponding titles. [1] On 30 January 1981 respondent Court of Appeals
affirmed the judgment with modification. On 4 June 1982 the appellate court granted
reconsideration by deleting the modification. On 21 March 1983 this Court denied the
petition for review on certiorari which denial became final and executory on 23 May
1983. On 6 June 1983 the records were remanded to the Balanga trial court.

On respondents' motion, the writ of execution was issued on 26 August 1983. On 28

September 1983 petitioner moved to defer the execution on the ground that the
directive of the judgment could not be carried out in the absence of an approved
subdivision plan. Besides, the boundaries and exact locations of the subject lots could
not be determined. On 18 January 1984 the trial court denied the motion and ordered
the Provincial Sheriff to enforce the writ. Thereafter petitioner filed a notice of appeal
while respondents moved for its dismissal. On 22 March 1985 the trial court ruled that
its order was not appealable and directed the issuance of a new writ of execution.
Undaunted, petitioner resorted anew to respondent court by way of a petition
forcertiorari, prohibition and mandamus which was however denied. On 26 February
1986 the petition before us met the same fate.

On 26 September 1986 a new writ of execution was issued. Nonetheless the judgment
remained unenforced due to the alleged failure of petitioner to surrender her copy of the
title. Upon inquiry with the Register of Deeds of Bataan, respondents discovered that
titles to the subject lots were transferred in 1984 to petitioner's daughter Aurora Fe B.
Camacho. Thus on 14 April 1987 respondents moved that petitioner and/or her
daughter surrender the copies of the present titles to the trial court.

On 11 August 1987 the trial court granted the motion insofar as it was directed against
petitioner but not as against her daughter. Petitioner moved for reconsideration on 4
September 1987 while respondents moved for modification which petitioner opposed.
Subsequently, another incident concerning the authority of a new counsel for
respondents to replace their original counsel was submitted. The trial court considered
the new counsel as co-counsel but the ruling was assailed by petitioner. Consequently
on 25 September 1990 it ordered respondents' counsel to comment thereon without
resolving the previous motions of the parties.

In a letter dated 24 January 1992 respondents invited the attention of this Court to the
vacancy in the branch of the trial court where their case was pending. On 15 June 1992
they moved again for implementation of the writ of execution. On 10 September 1992
petitioner countered by moving to dismiss the proceedings on the contention that the
trial court had no more jurisdiction because more than five (5) years had elapsed from
the date of entry of judgment.

The trial court sustained petitioner and explained that although respondents' motion was
for implementation of the writ of execution, in effect they were seeking the issuance of
an alias writ which should have been done within the period 26 February 1986 and 25
February 1991 and therefore their motion was denied. In the order of 19 November
1992,[2] the trial court dismissed the proceedings and in view thereof found it
unnecessary to dwell on the other pending motions.

Respondent appellate court assessed the situation differently. According to it -

x x x x The period during which defendant's motion to defer execution (dated September
28, 1983), which was finally resolved only upon the promulgation of the Supreme
Court's resolution dated February 26, 1986 (about 2 1/2 years) should be considered as
having stayed or suspended the five-year period. It is noted that the Court of Appeals
categorically ruled that defendant's motion to defer execution is "a purely dilatory action
to stave off the execution of a long final judgment of the trial court," and rejected
defendant's contention that the portions of Lot No. 261-B which she sold to the plaintiffs
are unidentifiable x x x x

x x x x The five-year period should be deemed extended by the delay due to causes not
of plaintiffs' making, as that due to a vacancy in the sala. We also see no reason why
the period of the pendency of plaintiffs' Motion to Surrender Owner's Duplicate Copy of
Title as well as the other unresolved incidents spawned by defendant's determined
efforts to resist execution of a final judgment should not be considered as having tolled
the five-year period when no fault can be attributed to plaintiffs for the court's failure to
resolve these pending incidents. Reasons of equity which have been justifiably invoked
in the computation of the five-year prescriptive period for execution on motion argue
against a contrary ruling.[3]

Thus on 15 December 1994 respondent court set aside the order of the trial court and
remanded the case for further proceedings.[4]

Petitioner[5] asserts that her motion to defer execution as well as the petitions before the
appellate courts could not have possibly suspended the five-year reglementary period
inasmuch as no writ of injunction was issued. She adds that it is immaterial that there
was a vacancy in the sala of the Presiding Judge and that there were unresolved
motions since the problem lies in the failure of respondents to apply for an alias writ of
execution within the reglementary period.

We find no reversible error committed by respondent court. Pursuant to Sec. 6, Rule 39,
of the Rules of Court a judgment may be executed on motion within five (5) years from
the date of its entry or from the date it becomes final and executory. After the lapse of
such time, and before it is barred by the statute of limitations, a judgment may be
enforced by action. Resolving the same issue in Gonzales v. Court of Appeals [6] the
Court emphasized -
On several instances, this Court has invoked the principle of equity in computing the 5-
year period to execute a judgment by motion. We have ruled that if the delays were
through no fault of the prevailing party, the same should not be included in computing
the 5-year period to execute a judgment by motion x x x x

Along the same line, the Court elucidated in Republic v. Court of Appeals[7]-

To be sure, there had been many instances where this Court allowed execution by
motion even after the lapse of five years, upon meritorious grounds. [8] These exceptions
have one common denominator, and that is: the delay is caused or occasioned by
actions of the judgment debtor and/or is incurred for his benefit or advantage.

In the case under consideration, the judgment sought to be executed became final and
executory on 23 May 1983. The writ of execution was issued on 25 July 1983 but on 28
September 1983 petitioner moved to defer execution. She even elevated the matter to
respondent court and this Court until it was settled unfavorably on 26 February 1986. By
then petitioner has consumed almost two and a half (2 1/2) years or almost half of the
period alloted to respondents within which to move to execute the judgment. On 26
September 1986 a new writ of execution was issued but unfortunately did not serve its
purpose due to the alleged failure of petitioner to surrender her copy of the title. Then it
turned out according to respondents that the original title was cancelled and two (2) new
titles were issued in the name of petitioner's daughter, Aurora Fe. Respondents were
prompted to file on 14 April 1987 a motion requiring petitioner and/or her daughter to
surrender their copies of the new titles. This motion was granted on 11 August 1987 but
only against petitioner. The latter moved for reconsideration on 4 September 1987 while
respondents moved for modification which petitioner opposed. Another incident
regarding the representation of respondents by new counsel arose. As of 25 September
1990 when the trial court issued its order regarding the representation the foregoing
motions remained unresolved.

Furthermore, a vacancy in the trial court was created when the then Presiding Judge
retired on 14 November 1990. Another Judge assumed office on 22 October 1991 but
retired barely two (2) months thereafter. A second vacancy thus existed until the present
Presiding Judge was appointed on 9 March 1992. On 15 June 1992 respondents filed a
motion to implement the writ of execution. Going back to the date when respondents
moved to require petitioner and/or her daughter to surrender their copies of the new
titles almost five (5) years and two (2) months had passed. Under the peculiar
circumstances of the present case where the delays were occasioned by petitioner's
own initiatives and for her advantage as well as beyond respondents' control, we hold
that the five-year period allowed for enforcement of the judgment by motion was
deemed to have been effectively interrupted or suspended. Once again we rely upon
basic notions of equity and justice in so ruling.

The purpose of the law in prescribing time limitations for enforcing judgments or actions
is to prevent obligors from sleeping on their rights. Far from sleeping on their rights,
respondents persistently pursued their rights of action. It is revolting to the conscience
to allow petitioner to further avert the satisfaction of her obligation because of sheer
literal adherence to technicality. After all, the Rules of Court mandates that a liberal
construction of the Rules be adopted in order to promote their object and to assist the
parties in obtaining just, speedy and inexpensive determination of every action and
proceeding.[9] This rule of construction is especially useful in the present case where
adherence to the letter of the law would result in absurdity and manifest injustice. [10]

WHEREFORE, the petition is DENIED. The questioned decision of respondent Court of

Appeals dated 15 December 1994 which ordered that the case be remanded to the
Regional Trial Court for further proceedings is AFFIRMED. Costs against petitioner.

SO ORDERED.
 THIRD DIVISION
[ G.R. No. 135630, September 26, 2000 ]
INTRAMUROS TENNIS CLUB, INC. (ITC), PHILIPPINE TENNIS ASSOCIATION
(PHILTA) AND ITC TENNIS PLAYERS, PETITIONERS, VS. PHILIPPINE TOURISM
AUTHORITY (PTA), CLUB INTRAMUROS, AND COURT OF APPEALS, SECOND
DIVISION, RESPONDENTS.

DECISION
GONZAGA-REYES, J.:
This petition for certiorari assails two resolutions of the Second Division of the Court of
Appeals which granted private respondents motion for execution pending appeal and
ordered the Regional Trial Court of Manila, Branch 50 to issue the corresponding writ of
execution. The antecedent facts are as follows:

Private respondent Philippine Tourism Authority (PTA) owns the Victoria Tennis Courts
located in Intramuros, Manila by virtue of Presidential Decree No. 1763. In a
Memorandum of Agreement (MOA) executed on June 11, 1987, the PTA transferred
the management, operation, administration and development of the Victoria Tennis
Courts to petitioner Philippine Tennis Association (PHILTA) for a period of ten (10)
years[1] commencing on June 15, 1987. [2] Petitioner Intramuros Tennis Club, Inc. (ITC)
is an affiliate of PHILTA and has for its members tennis players and enthusiasts who
regularly use the facilities of the Victoria Tennis Courts.

On June 26, 1995, and during the effectivity of the MOA, PTA wrote a letter to PHILTA
enumerating alleged violations by PHILTA of the terms and conditions of the MOA and
demanding the surrender of the possession of the Victoria tennis courts on or before
July 25, 1995.[3] On April 11, 1996, PTA wrote a second letter to PHILTA requesting the
latter to vacate the premises of said tennis courts to give way to PTAs golf course
expansion program with private respondent Club Intramuros. [4]

On May 7, 1996, petitioners instituted a case for preliminary injunction, damages, and
prayer for temporary restraining order with the Regional Trial Court of Manila, which
was docketed as Civil Case No. 96-78248. The petition alleged that PTAs demand to
vacate was a unilateral pre-termination of the MOA, under the terms of which PHILTA
was allowed the management of the tennis courts until June 15, 1997. It also alleged
that by complying with PTAs demand to vacate, petitioner ITC stands to sustain liability
because it had prior commitments to use the Victoria Tennis Courts for two activities,
namely, the International Wheelchair Tennis Clinic on May 14-16, 1996 and the
Philippine National Games on May 20-25, 1996. The other grounds cited by petitioners
were: the Victoria Tennis Courts are the oldest in the country, and form part of Philippine
history and cultural heritage; the Victoria Tennis Courts are one of the few remaining
public tennis courts in Metro Manila open to the less affluent; petitioners are maintaining
the tennis courts at high cost, and unless the demolition is restrained, they will be
unable to recoup their investments; the demolition will result in the displacement of the
workers in the tennis courts; and, as players and aficionados of tennis, petitioners stand
to lose the camaraderie that playing in Victoria Tennis Courts helped foster among
them.

The temporary restraining order was granted on May 22, 1996, and petitioners were
allowed to retain possession of the Victoria Tennis Courts.

Thereafter, or on June 17, 1996, the RTC also granted the writ of preliminary injunction
prayed for by petitioners, based upon a finding that PTA in pursuing the golf course
expansion program was in effect unilaterally pre-terminating the MOA. In the same
order, it declared that petitioner ITC is an affiliate of PHILTA that has a right to be
protected.[5]

On June 16, 1997, private respondents filed a motion to dismiss, stating that in view of
the expiration of the MOA petitioners cause of action was rendered moot and academic.
However, petitioners maintained that their petition was also an action for damages;
hence, there are other issues for resolution despite the termination of the MOA.

The RTC granted the motion to dismiss, finding that based on the allegations of the
petition in relation to the reliefs demanded, petitioners only purpose was to stop PTA
from pursuing the golf course expansion program on account of the tennis activities that
will utilize Victoria Tennis Courts as venue. It also found that the evidence submitted by
the parties at the trial revolved around the issue of whether the preliminary injunction
should be declared permanent or lifted. This issue has resolved itself when the MOA
expired. The RTC noted that by the terms of the MOA the contract between PTA and
PHILTA was actually one of lease --- and under the law on leases, upon the expiration of
the period of lease the lessor is entitled to be restored to the possession of the property.

Moreover, the RTC declared, the petition before it cannot be considered an action for
damages because based on standing case law the amount of damages must be stated
in the complaint for purposes of determining jurisdiction and the appropriate amount of
docket fees.[6] The court did not take cognizance of petitioners claim for damages
considering that the amount thereof was nowhere mentioned in the petition, whether in
the prayer or in the body of said pleading.

Hence, the RTC ruled to lift the writ of preliminary injunction and to declare private
respondent PTA entitled to the possession of Victoria Tennis Courts. It further declared
that petitioners action has become moot and academic by reason of the expiration of
the MOA upon which petitioners rights were based.

Petitioners appealed to respondent court. While the case was pending therewith, private
respondents filed a motion for execution of judgment pending appeal invoking that
under Section 4, Rule 39 of the 1997 Revised Rules of Court judgments in actions for
injunction are not stayed by appeals taken therefrom. Thus:
Sec. 4. Judgments not stayed by appeal. --- Judgments in actions for injunction,
receivership, accounting and support, and such other judgments as are now or may
hereafter be declared to be immediately executory, shall be enforceable after their
rendition and shall not be stayed by an appeal taken therefrom, unless otherwise
ordered by the trial court. On appeal therefrom, the appellee court in its discretion may
make an order suspending, modifying, restoring or granting the injunction, receivership,
accounting, or award of support. (Underscoring supplied)
The motion alleged that there was an urgent necessity on the part of private
respondents to immediately take possession of the Victoria Tennis Courts by reason of
its being heavily deteriorated and unsanitized because of [petitioners] failure to
maintain its good condition. It appended a letter by a group of tennis players,
addressed to Tourism Secretary Mina T. Gabor, complaining about the state of the
facilities and general uncleanliness of the tennis courts and appealing that the
depredations committed by PHILTA and its concessionaires be corrected. [7] The motion
also alleged that the appeal taken by petitioners was frivolous and intended merely to
delay the immediate execution of the judgment of the RTC.

In their comment to the above motion, petitioners stated that private respondents
reliance on Section 4, Rule 39 of the Revised Rules of Court was erroneous because
that provision contemplates an instance where an action for injunction was granted, not
a situation as the one herein where the judgment was for the lifting of an injunction
earlier issued. Rather, petitioners maintain that the applicable provision is Section 2,
Rule 39 of the Revised Rules of Court, which accords the appellate court discretionary
power to order execution of a judgment or final order pending appeal, upon good
reasons to be stated in a special order after due hearing.

Petitioners further contended that the deterioration and unsanitary conditions of Victoria
Tennis Courts alleged by private respondents were unsubstantiated and do not
constitute good reasons for the wielding by respondent court of its power of
discretionary execution. They maintained that their appeal is not merely dilatory, but
poses several justiciable issues including the claim for damages which was aborted by
the RTCs premature dismissal of the petition. Thus, respondent court should, in the
exercise of its discretion whether or not to allow execution pending appeal, lean towards
the preservation of petitioners right to appeal.

In a resolution dated July 9, 1998, the Second Division of respondent court [8] took into
consideration the ground advanced by private respondents, i.e., that the Victoria Tennis
Courts are ill-maintained by PHILTA. It granted the motion for execution pending appeal,
declaring that since the lease agreement under the MOA had already expired and
private respondents had made it clear that there will be no renewal of the said
agreement, PTA as lessor is entitled to exercise all its rights of ownership and
possession over the Victoria Tennis Courts. It also observed that the petitioners appeal
from the order of the RTC was merely dilatory, and that the outcome of the appeal will
not in any way alter the fact of private respondents entitlement to the possession and
administration of the Victoria Tennis Courts. [9] Thus, the dispositive portion of
respondent courts resolution provides:
WHEREFORE, for the special reasons set forth above, the motion for execution
pending appeal is hereby GRANTED upon payment and approval of this court of a bond
in the amount of P800,000.00.

SO ORDERED.[10]
In their motion for reconsideration, petitioners argued that under Section 2, Rule 39 of
the Revised Rules of Court respondent court should have conducted hearings to
ascertain whether there were good reasons to issue the writ of execution pending
appeal. Respondent court denied their motion for lack of merit, [11] and declared that
contrary to petitioners asseverations, the determination of good reasons for allowing
execution pending appeal does not strictly require a formal or trial-type hearing; instead,
the parties may be heard by way of pleadings. In the case of petitioners, their
arguments against private respondents motion for execution pending appeal were
heard when they filed their comment thereto. Moreover, under Rule 8 of the Revised
Internal Rules of the Court of Appeals ---
Section 1. Oral Argument. --- The necessity or propriety of oral argument shall be
determined by the Justice assigned to study and report on the case and the oral
argument shall be confined to those matters which he may specify. However, in lieu of
oral arguments, said Justice may allow the parties to file their respective memoranda
within fifteen (15) days from notice.
Petitioners also contended that the trial court had no jurisdiction to rule on PTAs
possessory rights over the tennis courts, because the appropriate action to determine
those rights is unlawful detainer which is under the jurisdiction of MTCs. Respondent
court dismissed the argument stating that it was inconsistent of petitioners to now
question the RTCs jurisdiction, considering that it was they who instituted the injunction
case before the RTC; thus, it appears that they were raising this argument merely
because they failed to secure the affirmative reliefs that they sought from that court.

Thus, the September 23, 1998 resolution of respondent court reads:

WHEREFORE, the motion for reconsideration is denied for lack of merit. The Regional
Trial Court of Manila, Branch 50 is hereby ordered to issue a Writ of Execution pursuant
to this courts resolution dated July 9, 1998 granting the execution pending appeal. [12]
From the above resolutions of respondent court, petitioners filed the instant special civil
action for certiorari. The petition, filed on November 17, 1998, alleged that the Court of
Appeals committed grave abuse of discretion in the following:
a. In granting private respondents Motion for Execution Pending Appeal pursuant to
an erroneous or incorrect provision of the Rules of Court;

b. In entertaining a special reason interposed by private respondents, which was

not even inceptually offered in evidence;

c. In considering - with unfounded bias, petitioners pending appeal with said

respondent court - as merely intended to delay;

d. In reasoning that the revised Internal Rules of the Court of Appeals can
supersede the Rules of Court;

e. In assuming that possessory reliefs automatically vest upon private respondents

due to the dismissal of the injunction case; and

f. In directing the RTC Manila, Branch 50, to issue a Writ of Execution pursuant to
the July 9, 1998 Resolution.[13]
Anent the first ground, petitioners allege that respondent court wrongly quoted the
provisions of Section 2, Rule 39 of the Revised Rules of Court, [14] and that the pertinent
provisions are the second and third paragraphs which declare that after the trial court
has lost jurisdiction, it is the appellate court in the exercise of its discretion and upon
good reasons that may issue the motion for execution pending appeal. They maintained
that the special reason interposed by private respondents, i.e., that the Victoria Tennis
Courts were ill-maintained, was a bare allegation that was not properly substantiated,
because the letter of the tennis players to Secretary Gabor was not formally submitted
in evidence in the trial court.[15] Moreover, they declared, there was no judgment or
final order to speak of in the instant case because the RTC order dated August 5,
1997 was still the subject of an appeal that is pending with respondent court. They also
assailed the conclusion of respondent court that the appeal was dilatory considering
that petitioners had several causes of action which transcend the lease relationship in
the MOA. The fourth assignment of error, meanwhile, asserts that petitioners were
entitled to a hearing under Section 2, Rule 39 of the Revised Rules of Court and
respondent court erroneously dispensed thereof in favor of the provisions of the Internal
Rules of the Court of Appeals that memoranda may be required of the parties in lieu of a
hearing. Finally, petitioners argued that respondent court acted hastily and prematurely
in ordering the trial court to issue a writ of execution for private respondents to gain
possession over the tennis courts, when the dispositive portion of the RTC order lifting
the preliminary injunction made no mention of giving possession to private respondents.
As declared by petitioners, the dispositive portion of the RTC order dated August 5,
1997 merely reads:
WHEREFORE, premises considered, the motion to dismiss filed by PTA is hereby
granted. The bond posted by plaintiff is hereby declared released. [16]
In response to petitioners arguments, private respondents declared that no grave abuse
of discretion may be imputed to respondent court for allowing execution pending appeal
to prosper. The matter of good reasons as basis of an execution pending appeal is a
question that lies within the sound discretion of respondent court, and its finding in the
herein case as to the existence of such good reasons should be given respect and
credence in the absence of evident bad faith. [17] Moreover, execution pending appeal is
only a provisional remedy that respondent court allowed private respondents to avail of
and should not be interpreted as an adjudication on the merits of the main case still
pending before respondent court. [18]

Shortly after the filing of the instant petition, or on October 21, 1998, private
respondents filed a motion for issuance of a writ of execution with the RTC of Manila,
Branch 50, pursuant to the resolutions of respondent court dated July 9, 1998 and
September 23, 1998. This motion, however, was not granted by the RTC which, in an
order penned by then presiding judge Urbano C. Victorio, Sr., suspended or held in
abeyance the issuance of the writ of execution because the records of Civil Case No.
96-78248 are still with respondent court and also in deference to the Supreme Court
where the instant petition is pending.[19] In a second order which denied private
respondents motion for reconsideration, Judge Victorio additionally noted that since the
principal cause of action in Civil Case No. 96-78248 was for the issuance of a writ of
preliminary injunction and the same has been cancelled or revoked by the RTC on
August 5, 1997, there was nothing more for the RTC to execute.

Undaunted by these developments, private respondents filed with the RTC a Second
Motion for Issuance of Writ of Execution With Leave of Court on November 11, 1999.
Private respondents reasoned that the mere pendency of a special civil action for
certiorari, commenced in relation to a case pending execution before a lower court,
cannot prevent the said lower court from effecting execution in the absence of a writ of
injunction from a higher court restraining it from doing so, and in the absence of a final
determination from the Supreme Court that the Court of Appeals gravely abused its
discretion in ordering the RTC to issue the writ of execution. [20] This motion was granted
on February 4, 2000 by Judge Concepcion S. Alarcon-Vergara, who assumed office as
presiding judge of RTC Manila, Branch 50 after the retirement of Judge Victorio. [21]
Thus, a writ of execution was issued on February 17, 2000 ordering the Sheriff of RTC
Manila, Branch 50 to cause petitioners to vacate the premises of Victoria Tennis Courts
and to place private respondents in possession of the same. [22]

Petitioners attempted to secure before this Court a restraining order against the
implementation of the above writ of execution, arguing that such implementation would
render the instant petition moot and academic. The Court, however, denied their motion
in a resolution dated March 15, 2000.

In their memorandum dated May 27, 2000, private respondents informed the Court that
on March 1, 2000 they had gained actual control and possession of the Victoria Tennis
Courts.[23] Thus, they submit that the instant petition is now moot and academic.

Preliminarily, we find that the petition was not rendered moot or illusory by the fact that
execution was effected and possession of the tennis courts restored to private
respondents. The resolution of the instant petition requires a determination of whether
respondent Court of Appeals gravely abused its discretionary power to order execution
pending appeal as prescribed in Section 2, Rule 39 of the 1997 Revised Rules of Court,
and where such grave abuse of discretion is established the execution pending appeal
pursuant to the resolutions of respondent court may be voided. Thus, the Court finds
that the petition presents a live and justiciable controversy.

Section 2, Rule 39 of the Revised Rules of Court reads ---

Discretionary execution. ---

(a) Execution of a judgment or final order pending appeal. --- On motion of the
prevailing party with notice to the adverse party filed in the trial court while it has
jurisdiction over the case and is in possession of either the original record or the record
on appeal, as the case may be, at the time of the filing of such motion, said court may,
in its discretion, order execution of a judgment or final order even before the expiration
of the period to appeal.

After the trial court has lost jurisdiction, the motion for execution pending appeal may be
filed in the appellate court.

Discretionary execution may only issue upon good reasons to be stated in a special
order after due hearing.
Based on the foregoing provisions, respondent court may order execution pending
appeal subject to the following conditions: (1) there must be a judgment or final order;
(2) the trial court must have lost jurisdiction over the case; (3) there must be good
reasons to allow execution; and (4) such good reasons must be stated in a special
order after due hearing.

Undoubtedly, the RTC order dated August 5, 1997 which granted private respondents
motion to dismiss and lifted the writ of preliminary injunction is a final order within the
contemplation of Section 2, Rule 39 of the Revised Rules of Court. Petitioners maintain
that the said RTC order could not be the proper subject of execution because it was still
appealed to respondent court, but this merely confuses the concept of a final judgment
or order from one which has become final (or to use the more established term, final
and executory) --- a distinction that is definite and settled.

A final judgment or order is one that finally disposes of a case, leaving nothing more
for the court to do in respect thereto --- such as an adjudication on the merits which, on
the basis of the evidence presented at the trial, declares categorically what the rights
and obligations of the parties are and which party is in the right, or a judgment or order
that dismisses an action on the ground of res judicata or prescription, for instance.[24] It
is to be distinguished from an order that is interlocutory, or one that does not finally
dispose of the case, such as an order denying a motion to dismiss under Rule 16 of the
Rules of Court, or granting a motion for extension of time to file a pleading. As such,
only final judgments or orders (as opposed to interlocutory orders) are appealable. Now,
a final judgment or order in the sense just described becomes final and executory
upon expiration of the period to appeal therefrom where no appeal has been duly
perfected or, an appeal therefrom having been taken, the judgment of the appellant
court in turn becomes final. It is called a final and executory judgment because
execution at such point issues as a matter of right. [25]

By its provisional nature, the remedy of execution pending appeal requires only a final
judgment or order (as distinguished from an interlocutory order) and not a final and
executory judgment or order. In the instant case, the RTC order dated August 5, 1997
which granted private respondents motion to dismiss, lifted the writ of preliminary
injunction and held private respondents entitled to possess the Victoria Tennis Courts is
a final order within the contemplation of Section 2, Rule 39 of the Revised Rules of
Court, inasmuch as it makes an adjudication on the merits of the case and dismisses
petitioners action. Petitioners, in fact, impliedly recognized the finality of this RTC order
when they filed an ordinary appeal (and not a petition for certiorari) therefrom with
respondent court.

Addressing petitioners argument that the dispositive portion of the RTC order dated
August 5, 1997 only provides that private respondents motion to dismiss is granted and
does not order private respondents to regain possession of the Victoria Tennis Courts,
suffice it to say that although as a rule, execution must conform to the dispositive
portion of a decision, the other parts of the decision may be resorted to in order to
determine the ratio decidendi of the court.[26] In fact, a closer look at the RTC order
shows that the dispositive portion consists of two paragraphs, thus ---
Accordingly, the writ of preliminary injunction is hereby lifted and defendant is entitled to
possess the Victoria Tennis Court.

WHEREFORE, premises considered, the motion to dismiss filed by PTA is hereby

granted. The bond posted by plaintiff is hereby declared released. (Underscoring
supplied)[27]
Thus, petitioners representation that the RTC order did not intend to award possession
to private respondents of the disputed property as a result of the lifting of the preliminary
injunction is blatantly without basis.

It is also not contested that at the time the motion for execution pending appeal was
filed, the RTC had already lost jurisdiction over the case as petitioners appeal had
already been perfected and the records of the case transmitted to respondent court.

On the matter of hearing, we uphold respondents position that respondent court did not
gravely abuse its discretion in granting the motion for execution pending appeal without
a full-blown or trial-type hearing. We have interminably declared that due process
basically entails the opportunity to be heard, and we hold that the same principle
underlies the provision on hearing in Section 2 of the abovecited Rule 39. The records
of the instant case clearly disclose that petitioners have filed their comment [28] to private
respondents motion for execution pending appeal, and their arguments as embodied in
said comment did in fact form part of the discussion of respondent court in its assailed
resolution of July 9, 1998.

Thus, the only issue remaining is whether respondent court gravely abused its
discretion in finding good reasons to grant private respondents motion for execution
pending appeal.

Execution of a judgment pending appeal is an exception to the general rule that only a
final judgment may be executed. [29] Thus, the existence of good reasons is essential
for it is what confers discretionary power on a court to issue a writ of execution pending
appeal.[30] These reasons must be stated in a special order --- for unless they are
divulged, it would be difficult to determine whether judicial discretion has been properly
exercised in the case.[31]

Good reasons consist of compelling circumstances justifying immediate execution lest

judgment becomes illusory, or the prevailing party after the lapse of time be unable to
enjoy it, considering the tactics of the adverse party who may have apparently no case
but to delay.[32] There must be superior circumstances demanding urgency which will
outweigh the injury or damages should the losing party secure a reversal of the
judgment.[33] Were it otherwise, execution pending appeal may well become a tool of
oppression and inequity instead of an instrument of solicitude and justice. [34]

In light of these considerations, the Court has been very discriminating in the allowance
of such exceptional execution. Thus, mere allegations that the appeal is dilatory, [35] or
that the bond for the early execution has been duly paid, [36] or that the corporation
seeking execution is in financial distress [37] --- were held insufficient grounds to merit
execution pending appeal. On the other hand, where the goods subject of the judgment
stand to perish or deteriorate during the pendency of the appeal, [38] or the award of
actual damages is for an amount which is fixed and certain, [39] the Court found that
good reasons existed for execution pending appeal to prosper.
At the same time, it must also be remembered that the determination of the existence of
good reasons is also a discretionary power, and the reviewing court will not interfere
with the exercise of this discretion absent a showing of grave abuse thereof. [40] In the
present case, we find that respondent court was well within its discretion in issuing its
questioned resolutions, which clearly set out the reasons for granting private
respondents motion for execution pending appeal. The observation on the deteriorating
and unsanitary conditions of the Victoria Tennis Courts came from tennis players who
regularly use the said courts, and there is no indication that the letter was contrived or
fabricated simply to procure for private respondents the restoration of possession of the
Victoria Tennis Courts. We find no merit to petitioners contention that the letter is
inadmissible because it was not among those formally offered in evidence during trial at
the RTC --- the letter was dated November 10, 1997 and it could not have formed part
of the evidence in trial at the time the parties formally rested their cases on June 11,
1996.[41] Verily, it could only have been submitted in evidence before respondent court,
while the case was on appeal therewith.

More importantly, PHILTA no longer had any legal right to the possession and
management of the Victoria Tennis Courts because the lease agreement between PTA
and PHILTA had already expired on June 15, 1997. Obviously, PTA as the lessor and
owner of the tennis courts had every right to regain possession thereof --- and it also
had every reason to be alarmed at the complaint filed by the tennis players with the
Department of Tourism because it would be held accountable as owner and
administrator of the tennis courts for the ill conditions of the said tennis courts. As also
observed by respondent court, after all, upon the expiration of the lease agreement, the
plaintiffs-appellants (petitioners herein) were no longer obliged to properly maintain the
property.[42]

Clearly, the restoration of PTA into the possession and management of Victoria Tennis
Courts is in order, being a necessary consequence of the lifting of the preliminary
injunction and the termination of the MOA or lease agreement, and does not prejudice in
any way the resolution of the other issues in petitioners pending appeal with respondent
court such as their claim for damages from PTA which petitioners admit to be
independent of the terms of the MOA. Thus, we find that respondent court did not
gravely abuse its discretion in finding good reasons for allowing private respondents
motion for execution pending appeal.
Moreover, judgments in actions for injunction are not stayed by the pendency of an
appeal taken therefrom.[43] This rule has been held to extend to judgments decreeing
the dissolution of a writ of preliminary injunction, which are immediately executory. [44]

However, we modify respondent courts findings to the extent that it held petitioners
appeal pending therewith to be clearly dilatory, and cited this as one of the reasons for
allowing execution pending appeal. This assumption prematurely judges the merits of
the main case on appeal,[45] and except in cases where the appeal is patently or
unquestionably intended to delay it must not be made the basis of execution pending
appeal if only to protect and preserve a duly exercised right to appeal.

WHEREFORE, the instant petition is DISMISSED. The validity of the writ of execution
issued and implemented pursuant to the resolutions of the Court of Appeals dated July
9, 1998 and September 23, 1998 is SUSTAINED. No costs.

SO ORDERED.

THIRD DIVISION
[ G.R. No. 131109, June 29, 1999 ]
INTERNATIONAL SCHOOL, INC. (MANILA), PETITIONER, VS. HON. COURT OF
APPEALS, SPOUSES ALEX AND OPHELIA TORRALBA, RESPONDENTS.

DECISION
GONZAGA-REYES, J.:
For review is the decision of the Court of Appeals, [1] dated June 23, 1997 in CA-G.R. SP
No. 42197, which dismissed the petition for certiorari filed by International School
(Manila), Inc. (ISM) assailing the orders dated June 19, 1996 and August 27, 1996 of
the lower court granting a writ of execution pending appeal, and denying the
subsequent motion to reconsider the same; and the resolution dated October 14, 1997
of the appellate court denying ISM's motion for reconsideration.

On February 14, 1996, the Regional Trial Court of Quezon City, Branch 77 [2] rendered a
decision in Civil Case No. Q-91-10653 entitled "Spouses Alex and Ophelia Torralba v.
International School, Inc. (Manila), Dr. Rodney C. Hermes, Noli Reloj and Danilo de
Jesus" involving a Complaint for Damages due to the death of plaintiffs' only son,
Ericson Torralba while in the custody of ISM and its officers. The dispositive portion of
the said decision reads:
"WHEREFORE, Judgment is hereby rendered finding defendant International School
(Manila), Inc. liable to pay plaintiffs, the following:
1. The sum of P4,000,000.00 as and for Moral damages;

2. The amount of P1,000,000.00 by way of Exemplary damages;

3. The amount of P2,000,000.00 as Actual damages;

4. The sum of P300,000.00 as and for Attorney's fees; and

5. To pay the costs.

The complaint against the individual defendants is DISMISSED for insufficiency of
evidence. Likewise, the Counterclaim is DISMISSED for lack of merit.

SO ORDERED."[3]
ISM appealed to the Court of Appeals. During the pendency thereof, the spouses
Torralba filed a motion for execution pending appeal before the lower court on the
grounds that the appeal is merely dilatory and that the filing of a bond is another good
reason for the execution of a judgment pending appeal. [4] Said motion was opposed by
ISM.

In an order dated June 19, 1996, the lower court granted execution pending appeal
upon the posting of a bond in the amount of Five Million Pesos (P5,000,000.00) by the
spouses Torralba.[5] In an ex-parte motion dated July 25, 1996, Deputy Sheriff Angel L.
Doroni informed the lower court that pursuant to the Writ of Execution Pending Appeal
issued by the court on July 17, 1996, a Notice of Garnishment of ISM's bank deposits at
Global Consumer Banking, Citibank N.A. (Citibank) was served by him to Citibank on
July 18, 1996; and that on July 24, 1996, he received a letter from Citibank informing
him that ISM's bank deposits with the said bank in the amount of P5,500,000.00 were
on 'hold/pledge'.[6]

In the meantime, ISM filed a motion for reconsideration or for approval of supersedeas
bond in the amount of Five Million and Six Hundred Thousand Pesos (P5,600,000.00)
on July 23, 1996.[7]
On July 25, 1996, the lower court issued an order directing Citibank to release to
Deputy Sheriff Doroni in cash or check the amount of Five Million and Five Hundred
Thousand Pesos (P5,500,000.00), subject of the Notice of Garnishment dated July 25,
1996.[8] The following day, the spouses Torralba filed an urgent ex parte motion to
encash and receive the proceeds of the Citibank Manager's check representing the
amount garnished in execution.[9]

However, on July 29, 1996, ISM filed an urgent motion to stop delivery of garnished
funds to the spouses Torralba.[10] On August 2, 1996, the lower court issued an order
suspending the execution process there being no opposition filed in relation thereto and
pending resolution of ISM's motion for reconsideration (or for approval of supersedeas
bond).[11] The spouses Torralba then filed an opposition to ISM's motion for
reconsideration.[12]

In an order dated August 27, 1996, the lower court denied ISM's motion for
reconsideration and authorized and directed Deputy Sheriff Doroni to encash the
Citibank Manager's Check payable to the said court in the amount of Five Million Five
Hundred Thousand Pesos (P5,500,000.00) and to turn over the proceeds thereof after
deducting all legal fees and charges if any, to the plaintiffs or their representative. [13]

In view of the above order of the lower court, ISM filed a motion to withdraw the
supersedeas bond.

Attempts to have the order of execution pending appeal set aside having proved futile
and the offer of a supersedeas bond having been rejected by the lower court, ISM filed
a petition for certiorari before the Court of Appeals.[14] ISM sought the nullification of the
assailed orders for having been issued in excess of jurisdiction and with grave abuse of
discretion.

In its challenged decision dated June 27, 1997, the Court of Appeals denied due course
and dismissed the petition for lack of merit. [15] The Court of Appeals found that the
grounds relied upon by the lower court in granting execution pending appeal, and which
were raised by the plaintiffs-spouses in their motion - that the appeal taken by the
defendant school is merely dilatory and the filing of a bond - constitute good reasons.
The Court of Appeals agreed with the lower court that ISM's appeal appears to be
dilatory in view of its "virtual admission of fault when it adopted the project "Code Red"
consisting of safety and emergency measures, only after the death of plaintiffs-spouses
Torralba's only son"; and that the delay has already affected the plaintiffs-spouses
Torralba financially. In a resolution dated October 14, 1997, the Court of Appeals denied
ISM's motion for reconsideration.[16]

Hence, this petition: To sum up the grounds raised in the petition, the question now is
whether or not the respondent Court of Appeals erred in finding that the lower court did
not commit any grave abuse of discretion in granting execution pending appeal of its
decision.

However, we shall deal first with the procedural issues raised by the private
respondents-spouses in their memorandum. Private respondents-spouses contend that
herein petitioner ISM is engaging in forum-shopping in filing the instant petition for
review on certiorari seeking the same reliefs as those prayed for in their pending appeal
with the Court of Appeals. Further, they contend that petitioner ISM improperly availed
of the special civil action for certiorari before the Court of Appeals considering that an
appeal and/or the posting of a supersedeas bond are both adequate remedies
precluding resort to the extraordinary writ of certiorari.

Forum-shopping is present when in the two or more cases pending there is identity of
parties, rights or causes of action and reliefs sought. [17] While there is an identity of
parties in the appeal and in the petition for review oncertiorari filed before this Court, it is
clear that the causes of action and reliefs sought are unidentical, although petitioner
ISM may have mentioned in its appeal the impropriety of the writ of execution pending
appeal under the circumstances obtaining in the case at bar. Clearly, there can be no
forum-shopping where in one petition a party questions the order granting the motion for
execution pending appeal, as in the case at bar, and, in a regular appeal before the
appellate court, the party questions the decision on the merits which finds the party
guilty of negligence and holds the same liable for damages therefor. After all, the merits
of the main case are not to be determined in a petition questioning execution pending
appeal[18] and vice versa. Hence, reliance on the principle of forum-shopping is
misplaced.

Coming now to the issue of the propriety of a special civil action for certiorari filed before
the appellate court to assail an order for execution pending appeal, this issue has been
squarely addressed in Valencia vs. Court of Appeals [19] as follows:
"xxx, we have ruled in Jaca, et al. vs. Davao Lumber Company, et al. that:

"xxx Although Section 1, Rule 65 of the Rules of Court provides that the special civil
action for certiorari may only be invoked when `there is no appeal, nor any plain, speedy
and adequate remedy in the (ordinary) course of law,' this rule is not without exception.
The availability of the ordinary course of appeal does not constitute sufficient ground to
prevent a party from making use of the extraordinary remedy of certiorari where appeal
is not an adequate remedy or equally beneficial, speedy and sufficient. It is the
inadequacy-not the mere absence of all other legal remedies and the danger of failure
of justice without the writ that usually determines the propriety of certiorari."

Thus, we held therein, and we so reiterate for purposes of the case at bar, that certiorari
lies against an order granting execution pending appeal where the same is not founded
upon good reasons. Also, the fact that the losing party had appealed from the judgment
does not bar the certiorari action filed in respondent court as the appeal could not be an
adequate remedy from such premature execution.

That petitioner could have resorted to a supersedeas bond to prevent execution

pending appeal, as suggested by the two lower courts, is not to be held against him.
The filing of such bond does not entitle him to the suspension of execution as a matter
of right. It cannot, therefore, be categorically considered as a plain, speedy and
adequate remedy. Hence, no rule requires a losing party so circumstanced to adopt
such remedy in lieu or before availment of other remedial options at hand.

Furthermore, a rational interpretation of Section 3, Rule 39 should be that the

requirement for a supersedeas bond presupposes that the case presents a
presumptively valid occasion for discretionary execution. Otherwise, even if no good
reason exists to warrant advance execution, the prevailing party could unjustly compel
the losing party to post a supersedeas bond through the simple expedient of filing a
motion for, and the trial court improvidently granting, a writ of execution pending appeal
although the situation is violative of Section 2, Rule 39. This could not have been the
intendment of the rule, hence we give our imprimatur to the propriety of petitioner's
action for certiorari in respondent court." [20]
Verily, a petition for certiorari lies against an order granting execution pending appeal
where the same is not founded upon good reasons.
This brings us now to the question on the validity of the appellate court's ruling
upholding the writ of execution pending appeal.

It must be stressed that private respondents-spouses' motion/application for an

execution pending appeal was premised on the following reasons: that the appeal was
being taken for purpose of delay and that they are filing a bond. In granting the motion
for the exceptional writ over the strong opposition of the ISM, the trial court adopted by
reference the said grounds adduced by the spouses Torralba in their motion in the first
order dated June 19, 1996;[21] and expressly reiterated the same grounds in the order
denying the motion for reconsideration dated August 27, 1996. [22]

In upholding the writ of execution pending appeal, the Court of Appeals observed that
the lower court had, prior to its issuance, duly noted the presence of the circumstances
laid down by Section 2, Rule 39 of the Rules of Court, [23] allowing execution as an
exception, or pending appeal, even before final judgment, to wit:
(a) There must be a motion by the prevailing party with notice to the adverse party;

(b) There must be good reasons for issuing the execution; and

(c) The good reasons must be stated in a special order.[24]

Likewise, the Court of Appeals accepted as `good reasons' that ISM's appeal appears to
be dilatory in view of its virtual admission of fault when it adopted the project "Code
Red" only after the death of plaintiffs-spouses Torralba's son, and the delay of the case
which already affected plaintiffs spouses Torralbas financially.

This Court has ruled in Ong vs. Court of Appeals [25] that:
"where the reason given is that an appeal is frivolous and dilatory, execution pending
appeal cannot be justified. It is not proper for the trial court to find that an appeal is
frivolous and consequently to disapprove it since the disallowance of an appeal by said
court constitutes a deprivation of the right to appeal. The authority to disapprove an
appeal rightfully pertains to the appellate court xxx." [26]
The "admission of fault or negligence" adverted to in the lower court's order and
subsequently adopted by the appellate court in its decision, was based on the following
exchange between the private respondents-spouses' counsel and one of the
defendants, ISM's swimming coach Noli Reloj, which transpired during the hearing of
February 18, 1994:
"ATTY. GUERRERO: Issue of Vol. 48, No. 2 of October 1993.

Mr. Reloj, you said that you have read this. There is here an article which says on the
front page "Introducing Code Red." And in this article it says and I quote "It was
introduced last year by the administration to prevent further incidents like the tragic
death of Freshman Ericson Torralba in August 1991 who collapsed while taking the
swimming competency test.

Due to school's lack of emergency procedures and equipments, valuable time was lost
in coordinating medical efforts in bringing him to the Makati Medical Center.

WITNESS: Yes, I read that portion.

Q. That's all I want from you.

Now likewise Mr. Witness on page 8 or Exhibit AA, by the way your Honor, may I
request the portion which I read be marked as AA-1. Likewise on page 8, there is again
mentioned here I quote "ISM has also acquired new equipment to deal with
emergencies such as oxygen tank, respirator, new buoyancy and life saving equipment
to the pool and a licensed ambulance to transport the victim to the Makati Medical
Center.

With the apparent success of Code Red, no one at ISM need worry any longer about life
or death emergency. Did you read these portions?

WITNESS: I read those articles."[27]

For purposes only of determining the correctness of the writ of execution pending
appeal, we cannot see how the lower courts came upon the conclusion of virtual
admission of fault or negligence by ISM based on the above-quoted exchange where
ISM's swimming coach admitted that he read the school paper article introducing "Code
Red". As correctly pointed out by ISM, the article was not an official statement of the
school, but merely an opinion of its author. Moreover, we cannot see how the statement
of Mr. Noli Reloj that he read the article on "Code Red" can be construed as an
admission of liability by the school. Clearly then, the conclusion of the lower courts that
the appeal is dilatory based solely on the foregoing exchange rests on shaky ground.
The next question to be resolved is whether or not the filing of a bond can be
considered a good reason to justify immediate execution under Section 2, Rule 39.

In the case of Roxas vs. Court of Appeals, [28] this Court had occasion to address this
issue directly, as follows:
"xxx to consider the mere posting of a bond a `good reason' would precisely make
immediate execution of a judgment pending appeal routinary, the rule rather than the
exception. Judgments would be executed immediately, as a matter of course, once
rendered, if all that the prevailing party needed to do was to post a bond to answer for
damages that might result therefrom. This is a situation, to repeat, neither contemplated
nor intended by law."[29]
In fine, the rule is now settled that the mere filing of a bond by the successful party is
not a good reason for ordering execution pending appeal, as "a combination of
circumstances is the dominant consideration which impels the grant of immediate
execution, the requirement of a bond is imposed merely as an additional factor, no
doubt for the protection of the defendant's creditor." [30] Since we have already ruled that
the reason that an appeal is dilatory does not justify execution pending appeal, neither
does the filing of a bond, without anything more, justify the same. Moreover, ISM could
not be faulted for its withdrawal of its supersedeas bond inasmuch as the lower court
granted the execution pending appeal and rejected its offer of supersedeas bond.

Finally, we note that writ of execution pending appeal covered the moral and exemplary
damages adjudged by the lower court against ISM. In this regard, we likewise
reproduce what was said in Radio Communications of the Philippines, Inc. (RCPI) vs.
Lantin, et al.[31] that awards for moral and exemplary damages cannot be the subject of
execution pending appeal, under the following rationale:
"xxx The execution of any award for moral and exemplary damages is dependent on the
outcome of the main case. Unlike the actual damages for which the petitioners may
clearly be held liable if they breach a specific contract and the amounts of which are
fixed and certain, liabilities with respect to moral and exemplary damages as well as the
exact amounts remain uncertain and indefinite pending resolution by the Intermediate
Appellate Court and eventually the Supreme Court. The existence of the factual bases
of these types of damages and their causal relation to the petitioners' act will have to be
determined in the light of errors on appeal. It is possible that the petitioners, after all,
while liable for actual damages may not be liable for moral and exemplary damages. Or
as in some cases elevated to the Supreme Court, the awards may be reduced."
Much as we appreciate the predicament of the bereaved parents, however, this Court is
of the opinion that the general rule still finds application in the instant case. In other
words, the respondent Court of Appeals committed reversible error in upholding the writ
of execution pending appeal absent the `good reasons' required by law.

WHEREFORE, the petition is granted and the assailed decisions of the Court of
Appeals are hereby REVERSED and SET ASIDE. The writ of execution issued by the
lower court pursuant to its order of June 19, 1996 is hereby ANNULLED.

SO ORDERED.

[23]
Section 2, Rule 39 of the Rules of Court provides:

"Execution pending appeal. - On Motion of the prevailing party with notice to the
adverse party the court may, in its discretion, order execution to issue even before the
expiration of the time to appeal, upon good reasons to be stated in a special order. If a
record on appeal is field thereafter, the motion and the special order shall be included
thereon."

SECOND DIVISION

[ G.R. No. 124642, February 23, 2004 ]

ALFREDO CHING AND ENCARNACION CHING, PETITIONERS, VS. THE HON.

COURT OF APPEALS AND ALLIED BANKING CORPORATION, RESPONDENTS.

DECISION

CALLEJO, SR., J.:

This petition for review, under Rule 45 of the Revised Rules of Court, assails the
Decision[1] of the Court of Appeals (CA) dated November 27, 1995 in CA-G.R. SP No.
33585, as well as the Resolution [2] on April 2, 1996 denying the petitioners motion for
reconsideration. The impugned decision granted the private respondents petition for
certiorari and set aside the Orders of the trial court dated December 15, 1993 [3] and
February 17, 1994[4] nullifying the attachment of 100,000 shares of stocks of the
Citycorp Investment Philippines under the name of petitioner Alfredo Ching.
The following facts are undisputed:

On September 26, 1978, the Philippine Blooming Mills Company, Inc. (PBMCI) obtained
a loan of P9,000,000.00 from the Allied Banking Corporation (ABC). By virtue of this
loan, the PBMCI, through its Executive Vice-President Alfredo Ching, executed a
promissory note for the said amount promising to pay on December 22, 1978 at an
interest rate of 14% per annum.[5] As added security for the said loan, on September 28,
1978, Alfredo Ching, together with Emilio Taedo and Chung Kiat Hua, executed a
continuing guaranty with the ABC binding themselves to jointly and severally guarantee
the payment of all the PBMCI obligations owing the ABC to the extent of
P38,000,000.00.[6] The loan was subsequently renewed on various dates, the last
renewal having been made on December 4, 1980. [7]

Earlier, on December 28, 1979, the ABC extended another loan to the PBMCI in the
amount of P13,000,000.00 payable in eighteen months at 16% interest per annum. As
in the previous loan, the PBMCI, through Alfredo Ching, executed a promissory note to
evidence the loan maturing on June 29, 1981. [8] This was renewed once for a period of
one month.[9]

The PBMCI defaulted in the payment of all its loans. Hence, on August 21, 1981, the
ABC filed a complaint for sum of money with prayer for a writ of preliminary attachment
against the PBMCI to collect the P12,612,972.88 exclusive of interests, penalties and
other bank charges. Impleaded as co-defendants in the complaint were Alfredo Ching,
Emilio Taedo and Chung Kiat Hua in their capacity as sureties of the PBMCI.

The case was docketed as Civil Case No. 142729 in the Regional Trial Court of Manila,
Branch XVIII.[10] In its application for a writ of preliminary attachment, the ABC averred
that the defendants are guilty of fraud in incurring the obligations upon which the
present action is brought[11] in that they falsely represented themselves to be in a
financial position to pay their obligation upon maturity thereof. [12] Its supporting affidavit
stated, inter alia, that the [d]efendants have removed or disposed of their properties, or
[are] ABOUT to do so, with intent to defraud their creditors. [13]

On August 26, 1981, after an ex-parte hearing, the trial court issued an Order denying
the ABCs application for a writ of preliminary attachment. The trial court decreed that
the grounds alleged in the application and that of its supporting affidavit are all
conclusions of fact and of law which do not warrant the issuance of the writ prayed for.
[14]
On motion for reconsideration, however, the trial court, in an Order dated September
14, 1981, reconsidered its previous order and granted the ABCs application for a writ of
preliminary attachment on a bond of P12,700,000. The order, in relevant part, stated:

With respect to the second ground relied upon for the grant of the writ of preliminary
attachment ex-parte, which is the alleged disposal of properties by the defendants with
intent to defraud creditors as provided in Sec. 1(e) of Rule 57 of the Rules of Court, the
affidavits can only barely justify the issuance of said writ as against the defendant
Alfredo Ching who has allegedly bound himself jointly and severally to pay plaintiff the
defendant corporations obligation to the plaintiff as a surety thereof.

WHEREFORE, let a writ of preliminary attachment issue as against the defendant

Alfredo Ching requiring the sheriff of this Court to attach all the properties of said Alfredo
Ching not exceeding P12,612,972.82 in value, which are within the jurisdiction of this
Court and not exempt from execution upon, the filing by plaintiff of a bond duly
approved by this Court in the sum of Twelve Million Seven Hundred Thousand Pesos
(P12,700,000.00) executed in favor of the defendant Alfredo Ching to secure the
payment by plaintiff to him of all the costs which may be adjudged in his favor and all
damages he may sustain by reason of the attachment if the court shall finally adjudge
that the plaintiff was not entitled thereto.

SO ORDERED.[15]

Upon the ABCs posting of the requisite bond, the trial court issued a writ of preliminary
attachment. Subsequently, summonses were served on the defendants, [16] save Chung
Kiat Hua who could not be found.

Meanwhile, on April 1, 1982, the PBMCI and Alfredo Ching jointly filed a petition for
suspension of payments with the Securities and Exchange Commission (SEC),
docketed as SEC Case No. 2250, at the same time seeking the PBMCIs rehabilitation.
[17]

On July 9, 1982, the SEC issued an Order placing the PBMCIs business, including its
assets and liabilities, under rehabilitation receivership, and ordered that all actions for
claims listed in Schedule A of the petition pending before any court or tribunal are
hereby suspended in whatever stage the same may be until further orders from the
Commission.[18] The ABC was among the PBMCIs creditors named in the said
schedule.

Subsequently, on January 31, 1983, the PBMCI and Alfredo Ching jointly filed a Motion
to Dismiss and/or motion to suspend the proceedings in Civil Case No. 142729 invoking
the PBMCIs pending application for suspension of payments (which Ching co-signed)
and over which the SEC had already assumed jurisdiction. [19] On February 4, 1983, the
ABC filed its Opposition thereto. [20]

In the meantime, on July 26, 1983, the deputy sheriff of the trial court levied on
attachment the 100,000 common shares of Citycorp stocks in the name of Alfredo
Ching.[21]

Thereafter, in an Order dated September 16, 1983, the trial court partially granted the
aforementioned motion by suspending the proceedings only with respect to the PBMCI.
It denied Chings motion to dismiss the complaint/or suspend the proceedings and
pointed out that P.D. No. 1758 only concerns the activities of corporations, partnerships
and associations and was never intended to regulate and/or control activities of
individuals. Thus, it directed the individual defendants to file their answers. [22]

Instead of filing an answer, Ching filed on January 14, 1984 a Motion to Suspend
Proceedings on the same ground of the pendency of SEC Case No. 2250. This motion
met the opposition from the ABC. [23]

On January 20, 1984, Taedo filed his Answer with counterclaim and cross-claim. [24]
Ching eventually filed his Answer on July 12, 1984. [25]

On October 25, 1984, long after submitting their answers, Ching filed an Omnibus
Motion,[26] again praying for the dismissal of the complaint or suspension of the
proceedings on the ground of the July 9, 1982 Injunctive Order issued in SEC Case No.
2250. He averred that as a surety of the PBMCI, he must also necessarily benefit from
the defenses of his principal. The ABC opposed Chings omnibus motion.

Emilio Y. Taedo, thereafter, filed his own Omnibus Motion [27] praying for the dismissal of
the complaint, arguing that the ABC had abandoned and waived its right to proceed
against the continuing guaranty by its act of resorting to preliminary attachment.

On December 17, 1986, the ABC filed a Motion to Reduce the amount of his preliminary
attachment bond from P12,700,000 to P6,350,000. [28] Alfredo Ching opposed the
motion,[29] but on April 2, 1987, the court issued an Order setting the incident for further
hearing on May 28, 1987 at 8:30 a.m. for the parties to adduce evidence on the actual
value of the properties of Alfredo Ching levied on by the sheriff. [30]

On March 2, 1988, the trial court issued an Order granting the motion of the ABC and
rendered the attachment bond of P6,350,000. [31]

On November 16, 1993, Encarnacion T. Ching, assisted by her husband Alfredo Ching,
filed a Motion to Set Aside the levy on attachment. She alleged inter alia that the
100,000 shares of stocks levied on by the sheriff were acquired by her and her husband
during their marriage out of conjugal funds after the Citycorp Investment Philippines was
established in 1974. Furthermore, the indebtedness covered by the continuing
guaranty/comprehensive suretyship contract executed by petitioner Alfredo Ching for
the account of PBMCI did not redound to the benefit of the conjugal partnership. She,
likewise, alleged that being the wife of Alfredo Ching, she was a third-party claimant
entitled to file a motion for the release of the properties. [32] She attached therewith a
copy of her marriage contract with Alfredo Ching. [33]

The ABC filed a comment on the motion to quash preliminary attachment and/or motion
to expunge records, contending that:

2.1 The supposed movant, Encarnacion T. Ching, is not a party to this present
case; thus, she has no personality to file any motion before this Honorable Court;

2.2 Said supposed movant did not file any Motion for Intervention pursuant to
Section 2, Rule 12 of the Rules of Court;

2.3 Said Motion cannot even be construed to be in the nature of a Third-Party

Claim conformably with Sec. 14, Rule 57 of the Rules of Court.

3. Furthermore, assuming in gracia argumenti that the supposed movant has

the required personality, her Motion cannot be acted upon by this Honorable Court as
 the above-entitled case is still in the archives and the proceedings thereon still
remains suspended. And there is no previous Motion to revive the same. [34]

The ABC also alleged that the motion was barred by prescription or by laches because
the shares of stocks were in custodia legis.

During the hearing of the motion, Encarnacion T. Ching adduced in evidence her
marriage contract to Alfredo Ching to prove that they were married on January 8, 1960;
[35]
the articles of incorporation of Citycorp Investment Philippines dated May 14, 1979;
[36]
and, the General Information Sheet of the corporation showing that petitioner Alfredo
Ching was a member of the Board of Directors of the said corporation and was one of
its top twenty stockholders.

On December 10, 1993, the Spouses Ching filed their Reply/Opposition to the motion to
expunge records.

Acting on the aforementioned motion, the trial court issued on December 15, 1993 an
Order[37] lifting the writ of preliminary attachment on the shares of stocks and ordering
the sheriff to return the said stocks to the petitioners. The dispositive portion reads:

WHEREFORE, the instant Motion to Quash Preliminary Attachment, dated November 9,

1993, is hereby granted. Let the writ of preliminary attachment subject matter of said
motion, be quashed and lifted with respect to the attached 100,000 common shares of
stock of Citycorp Investment Philippines in the name of the defendant Alfredo Ching, the
said shares of stock to be returned to him and his movant-spouse by Deputy Sheriff
Apolonio A. Golfo who effected the levy thereon on July 26, 1983, or by whoever may
be presently in possession thereof.

SO ORDERED.[38]

The plaintiff Allied Banking Corporation filed a motion for the reconsideration of the
order but denied the same on February 17, 1994. The petitioner bank forthwith filed a
petition for certiorari with the CA, docketed as CA-G.R. SP No. 33585, for the
nullification of the said order of the court, contending that:

1. The respondent Judge exceeded his authority thereby acted without

jurisdiction in taking cognizance of, and granting a Motion filed by a complete
 stranger to the case.

2. The respondent Judge committed a grave abuse of discretion in lifting the writ
of preliminary attachment without any basis in fact and in law, and contrary to
established jurisprudence on the matter.[39]

On November 27, 1995, the CA rendered judgment granting the petition and setting
aside the assailed orders of the trial court, thus:

WHEREFORE, premises considered, the petition is GRANTED, hereby setting aside

the questioned orders (dated December 15, 1993 and February 17, 1994) for being null
and void.

SO ORDERED.[40]

The CA sustained the contention of the private respondent and set aside the assailed
orders. According to the CA, the RTC deprived the private respondent of its right to file
a bond under Section 14, Rule 57 of the Rules of Court. The petitioner Encarnacion T.
Ching was not a party in the trial court; hence, she had no right of action to have the
levy annulled with a motion for that purpose. Her remedy in such case was to file a
separate action against the private respondent to nullify the levy on the 100,000
Citycorp shares of stocks. The court stated that even assuming that Encarnacion T.
Ching had the right to file the said motion, the same was barred by laches.

Citing Wong v. Intermediate Appellate Court,[41] the CA ruled that the presumption in
Article 160 of the New Civil Code shall not apply where, as in this case, the petitioner-
spouses failed to prove the source of the money used to acquire the shares of stock. It
held that the levied shares of stocks belonged to Alfredo Ching, as evidenced by the
fact that the said shares were registered in the corporate books of Citycorp solely under
his name. Thus, according to the appellate court, the RTC committed a grave abuse of
its discretion amounting to excess or lack of jurisdiction in issuing the assailed orders.
The petitioners motion for reconsideration was denied by the CA in a Resolution dated
April 2, 1996.

The petitioner-spouses filed the instant petition for review on certiorari, asserting that
the RTC did not commit any grave abuse of discretion amounting to excess or lack of
jurisdiction in issuing the assailed orders in their favor; hence, the CA erred in reversing
the same. They aver that the source of funds in the acquisition of the levied shares of
stocks is not the controlling factor when invoking the presumption of the conjugal nature
of stocks under Art. 160, [42] and that such presumption subsists even if the property is
registered only in the name of one of the spouses, in this case, petitioner Alfredo Ching.
[43]
According to the petitioners, the suretyship obligation was not contracted in the
pursuit of the petitioner-husbands profession or business. [44] And, contrary to the ruling
of the CA, where conjugal assets are attached in a collection suit on an obligation
contracted by the husband, the wife should exhaust her motion to quash in the main
case and not file a separate suit. [45] Furthermore, the petitioners contend that under Art.
125 of the Family Code, the petitioner-husbands gratuitous suretyship is null and
void ab initio,[46] and that the share of one of the spouses in the conjugal partnership
remains inchoate until the dissolution and liquidation of the partnership. [47]

In its comment on the petition, the private respondent asserts that the CA correctly
granted its petition for certiorari nullifying the assailed order. It contends that the CA
correctly relied on the ruling of this Court in Wong v. Intermediate Appellate Court.
Citing Cobb-Perez v. Lantin and G-Tractors, Inc. v. Court of Appeals, the private
respondent alleges that the continuing guaranty and suretyship executed by petitioner
Alfredo Ching in pursuit of his profession or business. Furthermore, according to the
private respondent, the right of the petitioner-wife to a share in the conjugal partnership
property is merely inchoate before the dissolution of the partnership; as such, she had
no right to file the said motion to quash the levy on attachment of the shares of stocks.

The issues for resolution are as follows: (a) whether the petitioner-wife has the right to
file the motion to quash the levy on attachment on the 100,000 shares of stocks in the
Citycorp Investment Philippines; (b) whether or not the RTC committed a grave abuse
of its discretion amounting to excess or lack of jurisdiction in issuing the assailed orders.

On the first issue, we agree with the petitioners that the petitioner-wife had the right to
file the said motion, although she was not a party in Civil Case No. 142729. [48]

In Ong v. Tating,[49] we held that the sheriff may attach only those properties of the
defendant against whom a writ of attachment has been issued by the court. When the
sheriff erroneously levies on attachment and seizes the property of a third person in
which the said defendant holds no right or interest, the superior authority of the court
which has authorized the execution may be invoked by the aggrieved third person in the
same case. Upon application of the third person, the court shall order a summary
hearing for the purpose of determining whether the sheriff has acted rightly or wrongly in
the performance of his duties in the execution of the writ of attachment, more
specifically if he has indeed levied on attachment and taken hold of property not
belonging to the plaintiff. If so, the court may then order the sheriff to release the
property from the erroneous levy and to return the same to the third person. In
resolving the motion of the third party, the court does not and cannot pass upon the
question of the title to the property with any character of finality. It can treat the matter
only insofar as may be necessary to decide if the sheriff has acted correctly or not. If
the claimants proof does not persuade the court of the validity of the title, or right of
possession thereto, the claim will be denied by the court. The aggrieved third party may
also avail himself of the remedy of terceria by executing an affidavit of his title or right
of possession over the property levied on attachment and serving the same to the office
making the levy and the adverse party. Such party may also file an action to nullify the
levy with damages resulting from the unlawful levy and seizure, which should be a
totally separate and distinct action from the former case. The above-mentioned
remedies are cumulative and any one of them may be resorted to by one third-party
claimant without availing of the other remedies. [50]

In this case, the petitioner-wife filed her motion to set aside the levy on attachment of
the 100,000 shares of stocks in the name of petitioner-husband claiming that the said
shares of stocks were conjugal in nature; hence, not liable for the account of her
husband under his continuing guaranty and suretyship agreement with the PBMCI. The
petitioner-wife had the right to file the motion for said relief.

On the second issue, we find and so hold that the CA erred in setting aside and
reversing the orders of the RTC. The private respondent, the petitioner in the CA, was
burdened to prove that the RTC committed a grave abuse of its discretion amounting to
excess or lack of jurisdiction. The tribunal acts without jurisdiction if it does not have the
legal purpose to determine the case; there is excess of jurisdiction where the tribunal,
being clothed with the power to determine the case, oversteps its authority as
determined by law. There is grave abuse of discretion where the tribunal acts in a
capricious, whimsical, arbitrary or despotic manner in the exercise of its judgment and is
equivalent to lack of jurisdiction. [51]

It was incumbent upon the private respondent to adduce a sufficiently strong

demonstration that the RTC acted whimsically in total disregard of evidence material to,
and even decide of, the controversy before certiorari will lie. A special civil action for
certiorari is a remedy designed for the correction of errors of jurisdiction and not errors
of judgment. When a court exercises its jurisdiction, an error committed while so
engaged does not deprive it of its jurisdiction being exercised when the error is
committed.[52]

After a comprehensive review of the records of the RTC and of the CA, we find and so
hold that the RTC did not commit any grave abuse of its discretion amounting to excess
or lack of jurisdiction in issuing the assailed orders.

Article 160 of the New Civil Code provides that all the properties acquired during the
marriage are presumed to belong to the conjugal partnership, unless it be proved that it
pertains exclusively to the husband, or to the wife. InTan v. Court of Appeals,[53] we held
that it is not even necessary to prove that the properties were acquired with funds of the
partnership. As long as the properties were acquired by the parties during the marriage,
they are presumed to be conjugal in nature. In fact, even when the manner in which the
properties were acquired does not appear, the presumption will still apply, and the
properties will still be considered conjugal. The presumption of the conjugal nature of
the properties acquired during the marriage subsists in the absence of clear, satisfactory
and convincing evidence to overcome the same.[54]

In this case, the evidence adduced by the petitioners in the RTC is that the 100,000
shares of stocks in the Citycorp Investment Philippines were issued to and registered in
its corporate books in the name of the petitioner-husband when the said corporation
was incorporated on May 14, 1979. This was done during the subsistence of the
marriage of the petitioner-spouses. The shares of stocks are, thus, presumed to be the
conjugal partnership property of the petitioners. The private respondent failed to
adduce evidence that the petitioner-husband acquired the stocks with his exclusive
money.[55] The barefaced fact that the shares of stocks were registered in the corporate
books of Citycorp Investment Philippines solely in the name of the petitioner-husband
does not constitute proof that the petitioner-husband, not the conjugal partnership,
owned the same.[56] The private respondents reliance on the rulings of this Court in
Maramba v. Lozano[57] and Associated Insurance & Surety Co., Inc. v. Banzon [58] is
misplaced. In the Maramba case, we held that where there is no showing as to when
the property was acquired, the fact that the title is in the wifes name alone is
determinative of the ownership of the property. The principle was reiterated in the
Associated Insurance case where the uncontroverted evidence showed that the shares
of stocks were acquired during the marriage of the petitioners.

Instead of fortifying the contention of the respondents, the ruling of this Court in Wong v.
Intermediate Appellate Court[59] buttresses the case for the petitioners. In that case, we
ruled that he who claims that property acquired by the spouses during their marriage is
not conjugal partnership property but belongs to one of them as his personal property is
burdened to prove the source of the money utilized to purchase the same. In this case,
the private respondent claimed that the petitioner-husband acquired the shares of
stocks from the Citycorp Investment Philippines in his own name as the owner thereof.
It was, thus, the burden of the private respondent to prove that the source of the money
utilized in the acquisition of the shares of stocks was that of the petitioner-husband
alone. As held by the trial court, the private respondent failed to adduce evidence to
prove this assertion.

The CA, likewise, erred in holding that by executing a continuing guaranty and
suretyship agreement with the private respondent for the payment of the PBMCI loans,
the petitioner-husband was in the exercise of his profession, pursuing a legitimate
business. The appellate court erred in concluding that the conjugal partnership is liable
for the said account of PBMCI under Article 161(1) of the New Civil Code.

Article 161(1) of the New Civil Code (now Article 121[2 and 3] [60] of the Family Code of
the Philippines) provides:

Art. 161. The conjugal partnership shall be liable for:

(1) All debts and obligations contracted by the husband for the benefit of the
conjugal partnership, and those contracted by the wife, also for the same purpose, in
the cases where she may legally bind the partnership.

The petitioner-husband signed the continuing guaranty and suretyship agreement as

security for the payment of the loan obtained by the PBMCI from the private respondent
in the amount of P38,000,000. In Ayala Investment and Development Corp. v. Court of
Appeals,[61] this Court ruled that the signing as surety is certainly not an exercise of an
industry or profession. It is not embarking in a business. No matter how often an
executive acted on or was persuaded to act as surety for his own employer, this should
not be taken to mean that he thereby embarked in the business of suretyship or
guaranty.

For the conjugal partnership to be liable for a liability that should appertain to the
husband alone, there must be a showing that some advantages accrued to the
spouses. Certainly, to make a conjugal partnership responsible for a liability that should
appertain alone to one of the spouses is to frustrate the objective of the New Civil Code
to show the utmost concern for the solidarity and well being of the family as a unit. The
husband, therefore, is denied the power to assume unnecessary and unwarranted risks
to the financial stability of the conjugal partnership. [62]

In this case, the private respondent failed to prove that the conjugal partnership of the
petitioners was benefited by the petitioner-husbands act of executing a continuing
guaranty and suretyship agreement with the private respondent for and in behalf of
PBMCI. The contract of loan was between the private respondent and the PBMCI,
solely for the benefit of the latter. No presumption can be inferred from the fact that
when the petitioner-husband entered into an accommodation agreement or a contract of
surety, the conjugal partnership would thereby be benefited. The private respondent
was burdened to establish that such benefit redounded to the conjugal partnership. [63]

It could be argued that the petitioner-husband was a member of the Board of Directors
of PBMCI and was one of its top twenty stockholders, and that the shares of stocks of
the petitioner-husband and his family would appreciate if the PBMCI could be
rehabilitated through the loans obtained; that the petitioner-husbands career would be
enhanced should PBMCI survive because of the infusion of fresh capital. However,
these are not the benefits contemplated by Article 161 of the New Civil Code. The
benefits must be those directly resulting from the loan. They cannot merely be a by-
product or a spin-off of the loan itself. [64]

This is different from the situation where the husband borrows money or receives
services to be used for his own business or profession. In the Ayala case, we ruled that
it is such a contract that is one within the term obligation for the benefit of the conjugal
partnership. Thus:
(A) If the husband himself is the principal obligor in the contract, i.e., he directly
received the money and services to be used in or for his own business or his own
profession, that contract falls within the term obligations for the benefit of the
conjugal partnership. Here, no actual benefit may be proved. It is enough that the
benefit to the family is apparent at the time of the signing of the contract. From the very
nature of the contract of loan or services, the family stands to benefit from the loan
facility or services to be rendered to the business or profession of the husband. It is
immaterial, if in the end, his business or profession fails or does not succeed. Simply
stated, where the husband contracts obligations on behalf of the family business, the
law presumes, and rightly so, that such obligation will redound to the benefit of the
conjugal partnership.[65]

The Court held in the same case that the rulings of the Court in Cobb-Perez and G-
Tractors, Inc. are not controlling because the husband, in those cases, contracted the
obligation for his own business. In this case, the petitioner-husband acted merely as a
surety for the loan contracted by the PBMCI from the private respondent.

IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The Decision and
Resolution of the Court of Appeals are SET ASIDE AND REVERSED. The assailed
orders of the RTC are AFFIRMED.

SO ORDERED.
 APPEALS
RULES 40 -43

SECOND DIVISION

[ G.R. No. 173351, July 29, 2010 ]

BF CITILAND CORPORATION, PETITIONER, VS. MARILYN B. OTAKE,

RESPONDENT.

DECISION

CARPIO, J.:

The Case

This is a petition for review[1] of the Resolutions dated 28 July 2005 [2] and 5 July
2006[3] of the Court of Appeals in CA-G.R. SP No. 88995. The 28 July 2005 Resolution
dismissed the petition for review filed by petitioner seeking the reversal of the 29
December 2004 Decision[4] of the Regional Trial Court (Branch 257) of Paraaque City.
The 5 July 2006 Resolution denied petitioner's motion for reconsideration.

The Antecedent Facts

Petitioner BF Citiland Corporation is the registered owner of Lot 2, Block 101 situated in
Brisbane Street, Phase III, BF Homes Subdivision, Paraaque City and covered by
Transfer Certificate of Title No. 52940. [5] Based on the tax declaration [6] filed in the
Office of the Assessor, the lot has an assessed value of P48,000.00.

On 24 February 1987, respondent Merlinda B. Bodullo [7] bought the adjoining Lot 1,
Block 101 covered by TCT No. 77549. [8] However, records show respondent occupied
not just the lot she purchased. She also encroached upon petitioner's lot.

On 13 October 2000, petitioner filed in the Metropolitan Trial Court (Branch 77) of
Paraaque City a complaint[9] foraccion publiciana praying that judgment be rendered
ordering respondent to vacate the subject lot. Petitioner also prayed that respondent be
ordered to pay P15,000.00 per month by way of reasonable compensation for the use of
the lot.

The Ruling of the MeTC

In its 25 April 2003 Decision,[10] the MeTC ruled in favor of petitioner, to wit:

WHEREFORE, premises considered, this Court renders judgment in favor of the plaintiff
and against the defendant and the latter, including any and all persons claiming rights
under her is ORDERED:

1. To VACATE Lot 2, Block 101 subject lot in this instant case and SURRENDER
peaceful possession to the plaintiff;
2. To PAY the plaintiff the sum of P10,000.00 per month by way of reasonable
compensation for the use and occupancy of the subject lot from the filing of this case
until the defendant shall have fully vacated the same;
3. To PAY the plaintiff the sum of P20,000.00 as and by way of attorney's fees; and
4. To PAY the costs of this suit.
SO ORDERED.[11]

Respondent filed a motion for reconsideration [12] claiming she was a lawful possessor
and buyer in good faith of the disputed lot. In its Order dated 20 June 2003, the MeTC
denied[13] the motion for reconsideration for lack of merit and for lack of the requisite
notice of hearing. The MeTC then issued a writ of execution. [14] Respondent filed a
motion[15] to quash the writ of execution on the ground that the MeTC had no jurisdiction
over accion publicianacases. In its 30 January 2004 Order,[16] the MeTC denied the
motion to quash the writ of execution. It held that under Section 33 of Batas Pambansa
Blg. 129, as amended by Republic Act 7691, [17] the MeTC had exclusive original
jurisdiction in all civil actions involving title to or possession of real property with
assessed value not exceeding P50,000.00.

Petitioner filed a motion for special order of demolition [18] alleging that the lot subject of
execution contained improvements introduced by respondent. Respondent opposed the
motion for being premature[19] and moved for reconsideration[20] of the 30 January 2004
Order of the MeTC. Respondent argued that even if the MeTC had jurisdiction
over accion publiciana cases, the total value of the lot together with the residential
house she built on it exceeded P50,000.00.

In its 23 July 2004 Order,[21] the MeTC ruled that since the subject lot had an assessed
value of P48,000.00, it had jurisdiction under Section 33 of BP 129, as amended. The
MeTC held that since the action was only for the recovery of the lot, the residential
house respondent built on it should not be included in computing the assessed value of
the property. Thus, the MeTC granted petitioner's motion for demolition and denied
respondent's motion for reconsideration of its 30 January 2004 Order.

Respondent filed in the Regional Trial Court (Branch 257) of Paraaque City a petition
for certiorari[22] under Rule 65 of the Rules of Court seeking dismissal of the accion
publiciana case for lack of jurisdiction of the MeTC.

The Ruling of the RTC

In its 29 December 2004 Decision,[23] the RTC held that accion publiciana was within the
exclusive original jurisdiction of regional trial courts. The RTC further explained that BP
129, as amended, did not modify the jurisprudential doctrine that a suit for accion
publiciana fell under the exclusive original jurisdiction of the RTC. It disposed of the
petition for certiorari in this wise:

WHEREFORE, the preliminary injunction previously issued by this Court in the Order
dated September 8, 2004 enjoining the court a quo and its sheriff from implementing the
Writ of Execution is hereby made permanent. Since the court a quo has no jurisdiction
over Civil Case No. 11868, a suit for accion publiciana filed by BF Citiland Corporation
against petitioner, the said case is dismissed. Consequently, all Orders and the Decision
rendered on the said case by the court a quo are deemed void or without force and
effect.

SO ORDERED.[24]

Petitioner filed a motion for reconsideration [25] insisting that accion publiciana was the
civil action involving title to or possession of real property referred to in Section 33 of BP
129, as amended. Petitioner also claimed respondent was already estopped from
assailing the jurisdiction of the MeTC because of respondent's participation in all the
proceedings in the MeTC coupled with respondent's failure to timely object to the
jurisdiction of the MeTC.

In her comment,[26] respondent reasoned that while Section 33 of BP 129, as amended,

explicitly qualified the court's jurisdiction depending on the assessed value of the real
property, accion publiciana conferred jurisdiction on regional trial courts regardless of
the value of the property. Respondent further argued that lack of jurisdiction could be
raised anytime.

Upon the RTC's denial[27] of petitioner's motion for reconsideration, petitioner filed in the
Court of Appeals a petition for review [28] under Rule 42 of the Rules of Court contending
that the RTC erred in ruling that the MeTC had no jurisdiction over accion
publiciana cases. Petitioner maintained respondent was already estopped from
questioning the jurisdiction of the MeTC. In her comment, [29] respondent stressed that
the MeTC had no jurisdiction over accion publiciana cases. Respondent reiterated the
argument that lack of jurisdiction could be raised anytime. In its reply, [30] petitioner
cited Refugia v. Court of Appeals [31] in claiming that the MeTC had limited original
jurisdiction in civil actions involving title to or possession of real property depending on
the property's assessed value.

The Ruling of the Court of Appeals

In its 28 July 2005 Resolution, [32] the Court of Appeals dismissed the petition for review
holding that appeal from a decision of the RTC rendered in the exercise of its original
jurisdiction should be by way of a notice of appeal.

The Court of Appeals ruled that appeal by way of petition for review under Rule 42 of
the Rules of Court could be resorted to only when what was appealed from was a
decision of the RTC rendered in the exercise of its appellate jurisdiction. In its 5 July
2006 Resolution,[33] the Court of Appeals denied petitioner's motion for reconsideration.
[34]

Hence, the instant petition for review.

The Issues

The issues for resolution are (1) whether a petition for review under Rule 42 is the
proper mode of appeal from a decision of the RTC in a petition for certiorari under Rule
65; and (2) whether the RTC correctly ruled that the MeTC has no jurisdiction
over accion publiciana cases.

The Court's Ruling

The petition is meritorious.

Petitioner posits that even if the RTC rendered the judgment in the exercise of its
original jurisdiction, the Court of Appeals still erred in dismissing the petition for review
because a petition for review contains all the requisites of a notice of appeal. Petitioner
argues the Court of Appeals erred in dismissing the petition for review on technicality
without considering the merits of the case. Petitioner maintains the MeTC has
jurisdiction since the assessed value of the lot subject of accion publiciana is only
P48,000.00.

Respondent counters that the decision of the RTC was rendered in a petition for
certiorari under Rule 65, unmistakably an original action. Respondent maintains that a
petition for review cannot be treated as a form of a notice of appeal because of the
inextendible nature of the latter. Respondent further argues that the RTC correctly ruled
the MeTC has no jurisdiction in accion publiciana cases. Respondent claims she is not
estopped from questioning the jurisdiction of the MeTC.

Section 2, Rule 41 of the Rules of Court states:

(a) Ordinary appeal. - The appeal to the Court of Appeals in cases decided by the
Regional Trial Court in the exercise of its original jurisdiction shall be taken by filing a
notice of appeal with the court which rendered the judgment or final order appealed
from and serving a copy thereof upon the adverse party. x x x

(b) Petition for review. - The appeal to the Court of Appeals in cases decided by the
Regional Trial Court in the exercise of its appellate jurisdiction shall be by petition for
review in accordance with Rule 42. (Emphasis supplied)

xxxx

The Rule is clear. In cases decided by the RTC in the exercise of its original
jurisdiction, appeal to the Court of Appeals is taken by filing a notice of appeal. On the
other hand, in cases decided by the RTC in the exercise of itsappellate jurisdiction,
appeal to the Court of Appeals is by a petition for review under Rule 42.

A petition for certiorari under Rule 65 does not interrupt the course of the principal case
unless a temporary restraining order or a writ of preliminary injunction from further
proceeding has been issued against the public respondent. [35] A petition for certiorari
under Rule 65 is, without a doubt, an original action. [36]

Since the decision of the RTC in the petition for certiorari under Rule 65 was rendered
in the exercise of its original jurisdiction, appeal from the said RTC decision to the Court
of Appeals should have been made by filing a notice of appeal, not a petition for review
under Rule 42.

However, in numerous cases, this Court has allowed liberal construction of the rules
when to do so would serve the demands of substantial justice. Dismissal of appeals
purely on technical grounds is frowned upon. It is better to excuse a technical lapse
rather than dispose of a case on technicality, giving a false impression of speedy
disposal of cases while actually resulting in more delay, if not a miscarriage of justice. [37]
In the present case, a dismissal on a technicality would only mean a new round of
litigation between the same parties for the same cause of action, over the same subject
matter. Thus, notwithstanding petitioner's wrong mode of appeal, the Court of Appeals
should not have so easily dismissed the petition.

Under Batas Pambansa Blg. 129, otherwise known as the Judiciary Reorganization Act
of 1980, the plenary action of accion publiciana must be brought before regional trial
courts.[38] With the modifications introduced by Republic Act No. 7691, the jurisdiction of
regional trial courts has been limited to real actions where the assessed value exceeds
P20,000.00 or P50,000.00 if the action is filed in Metro Manila. If the assessed value is
below the said amounts, the action must be brought before first level courts. As so
amended, BP 129 now provides:

Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts, and Municipal
Circuit Trial Courts in Civil Cases. - Metropolitan Trial Courts, Municipal Trial Courts, and
Municipal Circuit Trial Courts shall exercise:

x x x x

(3) Exclusive original jurisdiction in all civil actions which involve title to, or possession
of, real property, or any interest therein where the assessed value of the property or
interest therein does not exceed Twenty thousand pesos (P20,000.00) or, in civil
actions in Metro Manila, where such assessed value does not exceed Fifty
thousand pesos (P50,000.00) exclusive of interest, damages of whatever kind,
attorney's fees, litigation expenses, and costs: Provided, That in cases of land not
declared for taxation purposes, the value of such property shall be determined by the
assessed value of the adjacent lots. (Emphasis supplied)

Under BP 129, as amended, jurisdiction even in accion publiciana cases is determined

by the assessed value of the property.[39] The Court recently explained in Spouses
Alcantara v. Nido[40] that assessed value is the worth or value of the property as fixed by
the taxing authorities for the purpose of determining the applicable tax rate. The
assessed value does not necessarily represent the true or market value of the property.
[41]

In the present case, the complaint, [42] which was filed after the enactment of R.A. 7691,
contained a statement that, based on the tax declaration [43] filed in the Office of the
Assessor, the lot subject of the accion publiciana has an assessed value of P48,000.00.
A copy of the tax declaration was attached as Annex "B" of the complaint. The subject
lot, with an assessed value below the jurisdictional limit of P50,000.00 for Metro Manila,
comes within the exclusive original jurisdiction of the MeTC under BP 129, as amended.
Thus, the RTC erred in holding that the MeTC had no jurisdiction in this case.

WHEREFORE, we GRANT the petition. We SET ASIDE the Resolutions dated 28 July
2005 and 5 July 2006 of the Court of Appeals in CA-G.R. SP No. 88995.
We REINSTATE the 25 April 2003 Decision and the 20 June 2003 Order of the
Metropolitan Trial Court (Branch 77) of Paraaque City in Civil Case No. 11868.

Costs against petitioner.

SO ORDERED.

EN BANC

[ G.R. No. 173634, July 22, 2010 ]

PHILIPPINE AMUSEMENT AND GAMING CORPORATION (PAGCOR),

REPRESENTED BY ATTY. CARLOS R. BAUTISTA, JR., PETITIONER, VS. RUFINO
G. AUMENTADO, JR., RESPONDENT.

DECISION
CARPIO, J.:

The Case

This is a petition for review [1] of the 28 April 2006 Decision [2] and 19 July 2006
Resolution[3] of the Court of Appeals in CA-G.R. SP No. 83624. In its 28 April 2006
Decision, the Court of Appeals denied the petition for review filed by petitioner Philippine
Amusement and Gaming Corporation (PAGCOR) of Civil Service Commission (CSC)
Resolution No. 03-0082.[4] In its 19 July 2006 Resolution, the Court of Appeals denied
PAGCOR's motion for reconsideration.

The Facts

Respondent Rufino G. Aumentado, Jr. (respondent) was employed by PAGCOR as a

table supervisor. Subsequently, PAGCOR dismissed respondent from the service.
Feeling aggrieved, respondent filed a complaint for illegal dismissal.

In CSC Resolution No. 98-1996 dated 27 July 1998, the CSC ruled that respondent was
illegally terminated from the service and ordered respondent's reinstatement and the
payment of his backwages. PAGCOR filed a motion for reconsideration. On 5 October
1998, the CSC denied PAGCOR's motion.

PAGCOR appealed to the Court of Appeals. The Court of Appeals affirmed the CSC's
decision.

PAGCOR appealed to this Court. In our 20 November 2000 Resolution in G.R. No.
144500, we denied PAGCOR's appeal for failure to take the appeal within the
reglementary period of 15 days. [5] On 29 January 2001, our 20 November 2000
Resolution became final and executory.[6]

In his 15 March 2001 letter addressed to the CSC, the Chairman and Chief Executive
Officer and the Board of Directors of PAGCOR, respondent requested for his immediate
reinstatement and the payment of his backwages. [7] Respondent also filed a motion for
execution before the CSC. In CSC Resolution No. 02-0773 dated 30 May 2002, [8] the
CSC granted respondent's motion. The dispositive portion of CSC Resolution No. 02-
0773 provides:
WHEREFORE, the Philippine Amusement and Gaming Corporation (PAGCOR),
through its responsible officials, is hereby ORDERED, for the last time, to
effect FORTHWITH the reinstatement of Rufino G. Aumentado, Jr. according to the
tenor of CSC Resolution No. 98-1996 dated July 27, 1998. It is
likewise ORDERED that it directly furnish the Commission with its compliance report as
soon as possible. Be forewarned that failure to do so shall constrain the Commission to
take punitive actions, within the bounds of law, against the accountable officials of
PAGCOR. Finally, it is understood that the Commission shall no longer entertain any
more representation from PAGCOR insofar as it concerns the instant case.

Civil Service Commission - National Capital Region (CSC-NCR) is hereby ordered to

closely monitor the implementation of this Resolution and for its Regional Director to
submit her report within fifteen (15) days from receipt hereof. [9]

However, on 4 April 2001, PAGCOR and respondent entered into an amicable

settlement and, for monetary consideration, respondent executed a quitclaim which
reads:

FOR THE SOLE CONSIDERATION OF THE SUM OF EIGHT HUNDRED FORTY

THREE THOUSAND THREE HUNDRED EIGHTY AND 40/100 (P843,840.41) [sic]
receipt of which is hereby acknowledged, I, RUFINO G. AUMENTADO, JR. of 56-A
Rizal Avenue Extension, Basak, Mambaling, Cebu City, do hereby waive, quit,
renounce, release and forever discharge the Philippine Amusement and Gaming
Corporation (PAGCOR), with address at 1330 PAGCOR House, Roxas Blvd., Ermita,
Manila, and its employees, from any and all actions, claims, demands and rights of
action whatsoever, including my right to reinstatement, arising out of my previous
employment thereon, or in connection with CSC Resolution No. 981996 of July 27, 1998
of which I am fully compensated.

This release may be pleaded as a bar to any criminal, civil or administrative suit or
proceeding which may be taken or have been taken in connection with the
aforementioned employment and other circumstances pertaining thereto.

It is further agreed that PAGCOR is hereby released from all claims, demands and
rights of action from the undersigned. [10]
On 1 July 2002, PAGCOR filed with the CSC a "Manifestation of Quitclaim with Prayer
to Declare Complainant in Contempt." [11] PAGCOR sought the reconsideration of CSC
Resolution No. 02-0773 on the basis of the quitclaim executed by respondent.

In CSC Resolution No. 03-0082 dated 20 January 2003, the CSC denied PAGCOR's
motion. The dispositive portion of CSC Resolution No. 03-0082 provides:

WHEREFORE, the motion of the Philippine Amusement and Gaming Corporation to set
aside CSC Resolution No. 02-0773, dated June 26, 2002, is hereby DENIED. There
being no more legal impediment, Rufino G. Aumentado, Jr. should now be reinstated
forthwith to his former position, or, if the same be legally untenable, to any equivalent
position. The payment made to him in consonance with the quitclaim shall be deemed
to be an advance of his back salaries, the amount of which should be reckoned from the
time of his illegal dismissal up to the date of his actual reinstatement, but not to exceed
five (5) years.[12]

PAGCOR filed a motion for reconsideration. In CSC Resolution No. 04-0395 dated 5
April 2004 Resolution,[13]the CSC denied PAGCOR's motion.

PAGCOR appealed to the Court of Appeals.

The Ruling of the Court of Appeals

In its 28 April 2006 Decision, the Court of Appeals denied PAGCOR's appeal. The
Court of Appeals ruled that the appeal was not proper because Rule 43 of the Rules of
Court (the Rules) applies only to appeals from judgments or final orders of an
administrative body. According to the Court of Appeals, PAGCOR's appeal was not one
from a judgment or final order of the CSC but was directed against a resolution ordering
respondent's reinstatement in accordance with a decision which had already become
final and executory. The Court of Appeals added that an order of execution is not
appealable.

PAGCOR filed a motion for reconsideration. In its 19 July 2006 Resolution, the Court of
Appeals denied PAGCOR's motion.
Hence, this petition.

The Issues

PAGCOR raises the following issues:

I.

Whether or not the Court of Appeals erred in ruling that its jurisdiction under Rule 43 of
the Rules of Court is limited only to JUDGMENTS and FINAL ORDERS of the Civil
Service Commission?

II.

Whether or not the Court of Appeals erred in ruling that CSC Resolution No. 02-0773
dated May 30, 2002, CSC Resolution No. 03-0082 dated January 20, 2003, [and] CSC
Resolution No. 04-0395 dated April 5, 2004, are merely orders for execution thus not
susceptible to appeal?[14]

In the event that we rule on the affirmative and in the interest of substantial justice,
PAGCOR prays that we rule on the validity of the quitclaim and on the CSC's jurisdiction
to pass upon its validity.

The Ruling of the Court

The petition is meritorious.

First, PAGCOR is correct that the jurisdiction of the Court of Appeals over petitions for
review under Rule 43 is not limited to judgments and final orders of the CSC. Section 1,
Rule 43 of the Rules provides:

SECTION 1. Scope. - This Rule shall apply to appeals from judgments or final orders of
the Court of Tax Appeals and from awards, judgments, final orders or resolutions of
or authorized by any quasi-judicial agency in the exercise of its quasi-judicial
functions. Among these agencies are the Civil Service Commission, x x x.
(Emphasis supplied)
It is clear from the Rules that the Court of Appeals can entertain appeals from awards,
judgments, final orders or resolutions of the CSC.

Second, when the Court of Appeals declared that CSC Resolution Nos. 02-0773, 03-
0082, and 04-0395 were not subject to appeal, the Court of Appeals applied Section 1,
Rule 41 of the Rules which provides:

SECTION 1. Subject of Appeal. - An appeal may be taken from a judgment or final order
that completely disposes of the case, or of a particular matter therein when declared by
these Rules to be appealable.

No appeal may be taken from:

a) An order denying a motion for new trial or reconsideration;

b) An order denying a petition for relief or any similar motion seeking relief from
judgment;

c) An interlocutory order;

d) An order disallowing or dismissing an appeal;

e) An order denying a motion to set aside a judgment by consent, confession or

compromise on the ground of fraud, mistake, duress, or any other ground vitiating
consent;

f) An order of execution;

g) A judgment or final order for or against one or more of several parties or in separate
claims, counterclaims, cross-claims and third-party complaints, while the main case is
pending, unless the court allows an appeal therefrom; and

h) An order dismissing an action without prejudice.

In all the above instances where the judgment or final order is not appealable, the
aggrieved party may file an appropriate special civil action under Rule
65. (Emphasis supplied)

The general rule is that an order of execution is not appealable; otherwise, a case would
never end.[15] There are, however, exceptions to this rule, namely:

1. The writ of execution varies the judgment;

2. There has been a change in the situation of the parties making execution inequitable
or unjust;

3. Execution is sought to be enforced against property exempt from execution;

4. It appears that the controversy has been submitted to the judgment of the court;

5. The terms of the judgment are not clear enough and there remains room for
interpretation thereof; or

6. It appears that the writ of execution has been improvidently issued, or that it is
defective in substance, or issued against the wrong party, or that the judgment debt has
been paid or otherwise satisfied, or the writ issued without authority.[16]

In these exceptional circumstances, considerations of justice and equity dictate that

there be some remedy available to the aggrieved party. The remedy may either be by
appeal or by a special civil action of certiorari, prohibition, or mandamus. [17]

PAGCOR argues that the quitclaim changed the situation of the parties making the
execution of CSC Resolution No. 98-1996 unjust. PAGCOR contends that it refused to
reinstate respondent because he already executed the quitclaim and waived his right to
reinstatement.

PAGCOR and respondent executed the quitclaim after the entry of judgment. The
execution of a quitclaim after a decision has become final and executory is a
supervening event which could affect the execution of the decision. The quitclaim
between PAGCOR and respondent brought about a change in their situation because
the validity of the quitclaim would determine whether respondent is entitled to
reinstatement. The validity of the quitclaim will also determine if the execution of CSC
Resolution No. 98-1996 will be inequitable or unjust.

In this case, the CSC, without mentioning the quitclaim, issued CSC Resolution No. 02-
0773 and ordered respondent's reinstatement. The CSC only took notice of the
quitclaim in CSC Resolution No. 03-0082 and declared it void. PAGCOR insists that the
quitclaim is valid.[18] The Court of Appeals subsequently denied PAGCOR's appeal
without ruling on the validity of the quitclaim.

The issue on the validity of the quitclaim is a question of fact which should have been
properly decided by the Court of Appeals. As we are not a trier of facts, we remand the
case to the Court of Appeals for a thorough examination of the evidence and a judicious
disposal of the case.

WHEREFORE, we GRANT the Petition. We SET ASIDE the 28 April 2006 Decision
and 19 July 2006 Resolution of the Court of Appeals in CA-G.R. SP No. 83624.
Petitioner Philippine Amusement and Gaming Corporation's appeal
is REINSTATED and the instant case is REMANDED to the Court of Appeals for further
proceedings, particularly on the validity of the quitclaim.

SO ORDERED.

THIRD DIVISION
[ G.R. No. 180010, July 30, 2010 ]
CENITA M. CARIAGA, PETITIONER, VS. PEOPLE OF THE PHILIPPINES,
RESPONDENT.
DECISION
CARPIO MORALES, J.:
In issue in the present petition for review is one of jurisdiction.

By Resolutions of May 28, 2007 and September 27, 2007, the Court of Appeals, in CA-
G.R. CR No. 29514, "People of the Philippines v. Cenita Cariaga," dismissed the appeal
of Cenita Cariaga (petitioner) for lack of jurisdiction over the subject matter.

Petitioner, as the municipal treasurer of Cabatuan, Isabela with a Salary Grade of 24,
was charged before the Regional Trial Court (RTC) of Cauayan City in Isabela with
three counts of malversation of public funds, defined under Article 217 of the Revised
Penal Code.

The Information in the first case, Criminal Case No. 1293, reads:

That on or about the year 1993 or sometime prior or subsequent thereto in the
Municipality of Cabatuan, Province of Isabela, and within the jurisdiction of this
Honorable Court, the above-named accused, [C]ENITA M. CARIAGA, a public officer,
being the Municipal Treasurer of Cabatuan, Isabela, and as such is accountable for
taxes, fees and monies collected and/or received by her by reason of her position,
acting in relation to her office and taking advantage of the same, did then and there,
willfully, unlawfully and feloniously take, misappropriate and convert to her personal use
the amount of TWO THOUSAND SEVEN HUNDRED EIGHTY FIVE PESOS
(P2,785.00) representing the remittance of the Municipality of Cabatuan to the
Provincial Government of Isabela as the latter's share in the real property taxes
collected, which amount was not received by the Provincial Government of Isabela, to
the damage and prejudice of the government in the amount aforestated.

CONTRARY TO LAW.[1] (underscoring supplied)

The two other Informations in the second and third criminal cases, Nos. 1294 and 1295,
contain the same allegations except the malversed amounts which are P25,627.38 and
P20,735.13, respectively.[2]
Branch 20 of the Cauayan RTC, by Joint Decision of June 22, 2004, [3] convicted
petitioner in the three cases, disposing as follows:

WHEREFORE, finding the accused CENITA M. CARIAGA, GUILTY beyond reasonable

doubt of the crime of MALVERSATION for which she is charged in the three (3)
separate informations and in the absence of any mitigating circumstance, hereby
sentences her to suffer:

1. In Crim. Case No. Br.20-1293, an indeterminate penalty of from FOUR (4) YEARS
and ONE (1) DAY of PRISION CORRECCIONAL as minimum to SEVEN (7) YEARS,
FOUR (4) MONTHS and ONE (1) DAY of PRISION MAYOR as maximum and its
accessory penalty of perpetual special disqualification and a fine of Two Thousand
Seven Hundred Eighty Five (P2,785.00) Pesos, without subsidiary imprisonment in case
of insolvency. Cost against the accused.

2. In Crim. Case No. Br. 20-1294, an indeterminate penalty of from TEN (10) YEARS
and ONE (1) DAY of PRISION MAYOR as minimum to EIGHTEEN (18) YEARS, EIGHT
(8) MONTHS and ONE (1) DAY of RECLUSION TEMPORAL as maximum and to suffer
the accessory penalty of perpetual special disqualification and to pay a fine of Twenty
Five Thousand Six Hundred Twenty Seven (P25,627.00) Pesos. She is ordered to
indemnify the Provincial Government of Isabela Twenty Five Thousand Six Hundred
Twenty Seven (P25,627.00) Pesos, without subsidiary imprisonment in case of
insolvency. Cost against the accused.

3. In Crim. Case No. Br. 20-1295, an indeterminate penalty of from TEN (10) YEARS
and ONE (1) DAY of PRISION MAYOR as minimum to FOURTEEN (14) YEARS,
EIGHT (8) MONTHS and ONE (1) DAY of RECLUSION TEMPORAL as maximum, and
to suffer the accessory penalty of perpetual special disqualification and a fine of Twenty
Thousand Seven Hundred Thirty (P20,730.00) Pesos, without subsidiary imprisonment
in case of insolvency. The bailbonds are cancelled. Costs against the accused.

SO ORDERED.

Petitioner, through counsel, in time filed a Notice of Appeal, stating that he intended to
appeal the trial court's decision to the Court of Appeals.
 By Resolution of May 28, 2007, [4] the Court of Appeals dismissed petitioner's appeal for
lack of jurisdiction, holding that it is the Sandiganbayan which has exclusive appellate
jurisdiction thereon. Held the appellate court:

Concomitantly, jurisdiction over the offense is vested with the Regional Trial Court
considering that the position of Municipal Treasurer corresponds to a salary grade
below 27. Pursuant to Section 4 of [Presidential Decree No. 1606, as amended by
Republic Act No. 8249], it is the Sandiganbayan, to the exclusion of all others,
which enjoys appellate jurisdiction over the offense. Evidently, the appeal to this
Court of the conviction for malversation of public funds was improperly and
improvidently made. (emphasis and underscoring supplied)

Petitioner's Motion for Reconsideration was denied by Resolution of September 27,

2007.[5] Hence, the present petition for review, petitioner defining the issues as follows:

I. WHETHER . . ., CONSIDERING THE CLEAR AND GRAVE ERROR

COMMITTED BY COUNSEL OF [PETITIONER] AND OTHER EXTRA-ORDINARY
CIRCUMSTANCES, THE APPEAL OF... [PETITIONER] WRONGFULLY DIRECTED
TO THE COURT OF APPEALS BE DISMISSED OUTRIGHT...OR BE ENDORSED
AND TRANSMITTED TO THE SANDIGANBAYAN WHERE THE APPEAL SHALL
THEN PROCEED IN DUE COURSE.

II. WHETHER . . ., IN CONSIDERATION OF SUBSTANTIAL JUSTICE IN A

CRIMINAL CASE, NEW TRIAL BE GRANTED TO THE PETITIONER TO BE
UNDERTAKEN IN THE SANDIGANBAYAN (ALTERNATIVELY IN THE REGIONAL
TRIAL COURT) SO THAT CRUCIAL EVIDENCE OF PETITIONER...BE ADMITTED.
[6]

Petitioner, now admitting the procedural error committed by her former counsel,
implores the Court to relax the Rules to afford her an opportunity to fully ventilate her
appeal on the merits and requests the Court to endorse and transmit the records of the
cases to the Sandiganbayan in the interest of substantial justice.

Section 2 of Rule 50 of the Rules of Court provides:

SEC. 2. Dismissal of improper appeal to the Court of Appeals. x x x.

An appeal erroneously taken to the Court of Appeals shall not be transferred to
the appropriate court but shall be dismissed outright. (emphasis and underscoring
supplied)

That appellate jurisdiction in this case pertains to the Sandiganbayan is clear. Section 4
of Presidential Decree No. 1606, [7] as amended by Republic Act No. 8249, so directs: [8]

Sec. 4. Jurisdiction. - The Sandiganbayan shall exercise exclusive original jurisdiction in

all cases involving:

x x x x

In cases where none of the accused are occupying positions corresponding to

Salary Grade `27' or higher, as prescribed in the said Republic Act No. 6758, or
military and PNP officers mentioned above, exclusive original jurisdiction thereof
shall be vested in the proper regional trial court, metropolitan trial court,
municipal trial court, and municipal circuit trial court, as the case may be,
pursuant to their respective jurisdictions as provided in Batas Pambansa Blg.
129, as amended.

The Sandiganbayan shall exercise exclusive appellate jurisdiction over final

judgments, resolutions or orders of regional trial courts whether in the exercise
of their own original jurisdiction or of their appellate jurisdiction as herein
provided. x x x (emphasis, italics and underscoring supplied).

Since the appeal involves criminal cases, and the possibility of a person being deprived
of liberty due to a procedural lapse militates against the Court's dispensation of justice,
the Court grants petitioner's plea for a relaxation of the Rules.

For rules of procedure must be viewed as tools to facilitate the attainment of justice,
such that any rigid and strict application thereof which results in technicalities tending to
frustrate substantial justice must always be avoided. [9]

In Ulep v. People,[10] the Court remanded the case to the Sandiganbayan when it found
that
x x x petitioner's failure to designate the proper forum for her appeal was inadvertent.
The omission did not appear to be a dilatory tactic on her part. Indeed, petitioner had
more to lose had that been the case as her appeal could be dismissed outright for
lack of jurisdiction - which was exactly what happened in the CA.

The trial court, on the other hand, was duty bound to forward the records of the
case to the proper forum, the Sandiganbayan. It is unfortunate that the RTC judge
concerned ordered the pertinent records to be forwarded to the wrong court, to the great
prejudice of petitioner. Cases involving government employees with a salary grade
lower than 27 are fairly common, albeit regrettably so. The judge was expected to know
and should have known the law and the rules of procedure. He should have known
when appeals are to be taken to the CA and when they should be forwarded to the
Sandiganbayan. He should have conscientiously and carefully observed this
responsibility specially in cases such as this where a person's liberty was at stake.
(emphasis and underscoring supplied)

The slapdash work of petitioner's former counsel and the trial court's apparent
ignorance of the law effectively conspired to deny petitioner the remedial measures to
question her conviction.[11]

While the negligence of counsel generally binds the client, the Court has made
exceptions thereto, especially in criminal cases where reckless or gross negligence of
counsel deprives the client of due process of law; when its application will result in
outright deprivation of the client's liberty or property; or where the interests of justice so
require. [12] It can not be gainsaid that the case of petitioner can fall under any of these
exceptions.

Moreover, a more thorough review and appreciation of the evidence for the prosecution
and defense as well as a proper application of the imposable penalties in the present
case by the Sandiganbayan would do well to assuage petitioner that her appeal is
decided scrupulously.

WHEREFORE, the assailed Resolutions of the Court of Appeals in CA-G.R. CR No.

29514 are SET ASIDE. Let the records of the cases be FORWARDED to the
Sandiganbayan for proper disposition.
The Presiding Judge of Branch 20, Henedino P. Eduarte, of the Cauayan City Regional
Trial Court is warned against committing the same procedural error, under pain of
administrative sanction.

SO ORDERED.
- Appeal from MTC
to RTC
- Appeal from RTC
- Petition for
Review from the
RTC to the CA
- Appeals from the
Quasi-Judicial
bodies to the CA
 SECOND DIVISION
[ G.R. NO. 139596, January 24, 2006 ]
CHARLES CU-UNJIENG, PETITIONER, VS. HON. COURT OF APPEALS AND UNI0N
BANK OF THE PHILIPPINES, RESPONDENTS.

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

2. Resolution[2] dated July 30, 1999 which denied petitioner's Motion for
Reconsideration and ordered expunged the appeal brief thereto attached.
The facts:

Respondent Union Bank of the Philippines (UBP) is the owner of a parcel of agricultural
land with an area of 218,769 square meters situated in Barangay Sta. Maria, San
Miguel, Bulacan and registered in its name under Transfer Certificate of Title (TCT) No.
TC-1062 of the Registry of Deeds of Bulacan.

Sometime in January 1994, UBP caused the posting on the bulletin boards of its branch
offices of a three-page list of acquired realty assets available for sale to interested
parties. Included in said list was the aforementioned parcel of land, offered to be sold for
P2,200,000.00.

Petitioner, through a letter[3] dated April 11, 1994 and addressed to Joselito P. Valera,
manager of UBP's Acquired Assets Department, offered to buy the subject property for a
lesser amount of P2,078,305.50, payable as follows: 50% as down payment with the
balance to be paid in equal monthly installments over a period of two (2) years.
Petitioner explained that his offer for an amount lesser than UBP's asking price was on
account of five (5) tenants occupying the subject land who were allegedly demanding
P500,000.00 to voluntarily vacate the same.

As proof of his interest to buy the property, petitioner tendered PCIB Check No. 565827
for P103,915.27, purportedly representing 10% of the 50% down payment as earnest
money or deposit. UBP acknowledged receipt thereof by way of Union Bank Receipt
No. 495081 dated April 11, 1994.

On August 30, 1994, petitioner wrote a follow-up letter to UBP inquiring on the status of
his offer to buy the subject premises. [4]

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

As it turned out, UBP rejected petitioner's offer as shown by the fact that in another
letter[6] dated December 19, 1994, the bank informed petitioner that his offer could not
be favorably acted upon on account of the legal division's opinion that sales of lands
covered by the Comprehensive Agrarian Reform Law without prior Department of
Agrarian Reform (DAR) approval are considered null and void. Accordingly, UBP
advised petitioner to pick up the refund of his P103,915.27 "earnest money" at the
bank's disbursing unit.

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

Responding thereto, UBP, thru its counsel, Atty. Luzano, in a letter [8] dated July 19,
1995, reiterated the bank's rejection of petitioner's offer as "the land
being carpable could only be disposed of by the bank either thru Voluntary Offer to Sell
(VOS) or compulsory acquisition, the procedure of which is outlined in Sec. 16" of
Republic Act (RA) No. 6657.

It was against the foregoing backdrop of events that, on February 6, 1997, in the
Regional Trial Court (RTC) at Malolos, Bulacan, petitioner filed his complaint [9] in this
case for Specific Performance and Damages against UBP, impleading as co-defendant
in the suit the Register of Deeds of Bulacan. Docketed as Civil Case No. 80-M-97 and
raffled to Branch 9 of the court, the complaint principally sought UBP's compliance with
an alleged perfected contract of sale between it and petitioner relative to the parcel of
land in question. More specifically, the complaint prays for a judgment ordering UBP to:
a) accept payments from the plaintiff [petitioner] for the sale of the Property in
accordance with the terms and conditions of the letter dated 11 April 1994;

b) execute a Deed of Absolute Sale over the Property covered by TCT No. TC 1062 of
the Registry of Deeds of the Province of Bulacan upon the plaintiff's full payment of the
amount of Two Million Seventy Eight Thousand Three Hundred Five & 50/100
(P2,078,305.50), failing in which, the deputy sheriff should be ordered to execute such
deed and the Registry of Deeds to cancel the title of the Bank and issue a new one in
favor of the plaintiff;

c) pay plaintiff the sum of Five Hundred Thousand Pesos (P500,000.00) as moral
damages;

d) pay plaintiff the sum of Five Hundred Thousand Pesos (P500,000.00) as exemplary
damages;

e) pay plaintiff the sum of Four Hundred Thousand Pesos (P400,000.00) as attorney's
fees; and

f) pay the costs of the suit.

Other reliefs, just and equitable under the premises, are likewise respectfully prayed for.
After due proceedings, the trial court, in a decision dated September 1, 1998, [10] upon a
finding that no perfected contract of sale transpired between the parties, dismissed
petitioner's complaint for lack of sufficient cause of action, thus:
WHEREFORE, on the basis of the evidence adduced and the laws/jurisprudence
applicable thereon, judgment is hereby rendered DISMISSING the complaint in the
above entitled case for want of sufficient cause of action as well as the defendant's
counterclaim for damages and attorney's fees for lack of proof to warrant the same.

However, defendant Union Bank of the Philippines is ordered to reimburse plaintiff

Charles Cu-Unjieng the amount of P103,915.27 representing the face value of PCIBank
Check No. 565827 tendered by the latter to the former as purported "earnest money",
with interest thereon at the prevailing rates of interest periodically bestowed by UBP to
its savings depositors from April 11, 1994, through the succeeding years, and until the
full amount thereof shall have been delivered to the plaintiff.

No pronouncement as to costs.

SO ORDERED.
With his motion for reconsideration having been denied, petitioner filed with the trial
court a Notice of Appeal[11]therein making known that he is taking an appeal from the
adverse decision to the CA. Acting thereon, the trial court issued an Order [12] directing
the elevation of the records of the case to the CA, whereat petitioner's appeal was
docketed as CA-G.R. CV No. 8177-B-UDK.

As things would have it, in the herein first assailed Resolution dated May 10, 1999, the
CA dismissed petitioner's appeal for nonpayment of the required docket and other lawful
appeal fees, to wit:

For failure of the appellant [petitioner] to pay the docket and other lawful fees (Sec. 4,
Rule 41, 1997 Rules of Civil Procedure), the Court Resolved to DISMISS the appeal
pursuant to Sec. 1(c), Rule 50 of the same Rule.

SO ORDERED.[13]

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

In Pedrosa vs. Hill, 257 SCRA 373, the Supreme Court, citing Rodillas vs. Commission
on Elections (245 SCRA 702 aptly said:

xxx the mere filing of the notice of appeal was not enough. It should be accompanied by
the payment of the correct amount of appeal fee. In other words, the payment of the full
amount of the docket fee is an indispensable step for the perfection of an appeal. In
both original and appellate cases, the court acquires jurisdiction over the case only
upon the payment of the prescribed docket fees. Well-rooted is the principle that
perfection of an appeal within the statutory or reglementary period is not only mandatory
but also jurisdictional and failure to do so renders the questioned decision final and
executory, and deprives the appellate court or body of jurisdiction to alter the final
judgment much less to entertain the appeal. This requirement of an appeal fee is by no
means a mere technicality of law or procedure. It is an essential requirement without
which the decision appealed from would become final and executory, as if no appeal
was filed at all.

SO ORDERED.
Undaunted, petitioner is now with us via the present recourse seeking a relaxation of
procedural rules and ultimately the reversal and setting aside of the assailed twin
resolutions of the appellate court.

Petitioner would have the Court view his failure to pay the appeal docket fees on time
as a non-fatal lapse, or a non-jurisdictional defect which the CA should have ignored in
order to attain substantial justice. Further, petitioner passes the blame to the RTC clerk
of court who allegedly made the erroneous computation of docket fees.

We are not persuaded.

Doctrinally entrenched is the pronouncement that the right to appeal is merely statutory
and a party seeking to avail of that right must comply with the statute or rules. [15]

Rule 41, Section 4, of the 1997 Rules of Civil Procedure provides:

SEC. 4. Appellate court docket and other lawful fees. - Within the period for taking an
appeal, the appellant shall pay to the clerk of the court which rendered the judgment or
final order appealed from, the full amount of the appellate court docket and other lawful
fees. Proof of payment of said fees shall be transmitted to the appellate court together
with the original record or the record on appeal.
Well-settled is the rule that payment of the docket and other legal fees within the
prescribed period is both mandatory and jurisdictional, [16] noncompliance with which is
fatal to an appeal. For, to stress, appeal is not a matter of right, but a mere statutory
privilege.[17]

An ordinary appeal from a decision or final order of the RTC to the CA must be made
within fifteen (15) days from notice. [18] And within this period, the full amount of the
appellate court docket and other lawful fees must be paid to the clerk of the court which
rendered the judgment or final order appealed from.

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

For sure, nonpayment of the appellate court docket and other lawful fees within the
reglementary period as provided under Section 4, Rule 41, supra, is a ground for the
dismissal of an appeal under Section 1(c) of Rule 50, to wit:
SECTION 1. Grounds for dismissal of appeal.- An appeal may be dismissed by the
Court of Appeals, on its own motion or on that of the appellee, on the following grounds:

xxx xxx xxx

c. Failure of the appellant to pay the docket and other lawful fees as provided in section
4 of Rule 41; xxx
This Court has invariably sustained the CA's dismissal on technical grounds under the
aforequoted provision unless considerations of equity and substantial justice present
cogent reasons to hold otherwise. True, the rules may be relaxed but only for
persuasive and weighty reasons, to relieve a litigant of an injustice commensurate with
his failure to comply with the prescribed procedure. [20] So it is that in La Salette College
vs. Victor Pilotin,[21] we held:
Notwithstanding the mandatory nature of the requirement of payment of appellate
docket fees, we also recognize that its strict application is qualified by the following: first,
failure to pay those fees within the reglementary period allows only discretionary, not
automatic, dismissal; second, such power should be used by the court in conjunction
with its exercise of sound discretion in accordance with the tenets of justice and fair
play, as well as with a great deal of circumspection in consideration of all attendant
circumstances
Then, too, in Mactan Cebu International Airport Authority (MCIAA) vs. Mangubat,[22] we
held that late payment of docket fees may be admitted when the party showed
willingness to abide by the Rules by immediately paying the required
fees. Mactan, however, cannot be a source of comfort for herein petitioner. For there,
the appellate docket fees were paid six (6) days after the timely filing of the notice of
appeal. Unlike in Mactan, payment of the appellate docket fees in this case was
effected by petitioner only after four (4) months following the expiration of the
reglementary period to take an appeal.

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

We must emphasize that invocation of substantial justice is not a magical incantation

that will automatically compel this Court to suspend procedural rules. Rules of
procedure are not to be belittled or dismissed simply because their non-observance
may have resulted in prejudice to a party's substantive rights. Like all rules, they are
required to be followed. So it must be here.

WHEREFORE, petition is DENIED and the assailed resolutions dated May 10,1999 and
July 30, 1999 of the Court of Appeals AFFIRMED.

Costs against petitioner.

SO ORDERED.
 FIRST DIVISION
[ G.R. NO. 151895, February 16, 2005 ]
BANK OF COMMERCE, PETITIONER, VS. TERESITA S. SERRANO, RESPONDENT.

DECISION
QUISUMBING, J.:
For our review on certiorari is the civil aspect of the Court of Appeals Decision,[1] dated
September 28, 2001, in CA-G.R. CR No. 24570 as well as its Resolution,[2] dated
January 17, 2002, denying petitioners motion for reconsideration. The Court of Appeals
set aside the Decision[3] dated May 31, 2000, of the Regional Trial Court (RTC) Branch
105 of Quezon City.

The facts are as follows:

Petitioner Bank of Commerce (formerly Boston Bank of the Philippines) is a private

domestic banking institution. Respondent Teresita S. Serrano is the General Manager
and Treasurer of Via Moda International, Inc., a domestic business entity primarily
engaged in the import and export of textile materials and fabrics.

Via Moda International, represented by respondent, obtained an export packing loan

from petitioner, Bank of Commerce (BOC)-Diliman, Quezon City Branch, in the amount
of US$50,000 (P1,382,250), secured by a Deed of Assignment over Irrevocable
Transferable Letter of Credit No. 100072119. Respondent Serrano executed in favor of
BOC Promissory Note No. 94/086 for US$50,000 dated May 6, 1994 with maturity date
on July 14, 1994. Via Moda then opened a deposit account for the proceeds of the said
loan.[4]

On March 15, 1994, BOC issued to Via Moda, Irrevocable Letter of Credit No. BCZ-
940051, in the amount of US$56,735, for the purchase and importation of fabric and
textile products from Tiger Ear Fabric Co. Ltd. of Taiwan. To secure the release of the
goods covered, respondent, in representation of Via Moda, executed Trust Receipt No.
94-22221 dated April 21, 1994 with due date on July 20, 1994 for US$55,944.73
(P1,554,424.32).[5]

Under the terms of the trust receipt, Via Moda agreed to hold the goods in trust for
petitioner as the latters property and to sell the same for the latters account. In case of
sale, the proceeds are to be remitted to the bank as soon as it is received, but not later
than the maturity date. Said proceeds are to be applied to the relative acceptances, with
interest at the rate of 26% per annum, with a penalty of 36% per annum of the total
amount due until fully paid in case of non-payment of the trust receipt and relative
acceptance at maturity date or, in the alternative, to return the goods in case of non-
sale.[6]

The goods covered by the trust receipt were shipped by Via Moda to its consignee in
New Jersey, USA, who sent an Export Letter of Credit issued by the Bank of New York,
in favor of BOC. The Regional Operations Officer of BOC signed the export declarations
to show consent to the shipment. The total value of the entrusted goods which were
shipped per export declaration was US$81,987 (P2,246,443.80). The proceeds of the
entrusted goods sold were not credited to the trust receipt but, were applied by the bank
to the principal, penalties and interest of the export packing loan. The excess
P472,114.85 was applied to the trust receipt, leaving a balance of P1,444,802.28 as of
November 15, 1994.[7]

On November 16, 1994, petitioner sent a demand letter to Via Moda to pay the said
amount plus interest and penalty charges, or to return the goods covered by Trust
Receipt No. 94-22221 within 5 days from receipt. The demand was not heeded. As of
December 15, 1998, the outstanding balance of Via Moda was P4,783,487.15. [8]

On March 8, 1998, respondent was charged with the crime of estafa under Article 315
(b) of the Revised Penal Code in relation to Presidential Decree No. 115. [9]

On May 31, 2000, the trial court rendered judgment and the dispositive portion of which
reads:
WHEREFORE, in the light of the foregoing, the Court finds accused Teresita S. Serrano
GUILTY beyond reasonable doubt of the crime charged in the Information filed in this
case and sentences her to serve the indeterminate penalty of imprisonment from EIGHT
(8) YEARS AND ONE (1) DAY OF PRISION MAYOR, AS MINIMUM, TO TWENTY (20)
YEARS OF RECLUSION TEMPORAL, AS MAXIMUM, including the accessory
penalties. She is ordered to pay her civil liability to Bank of Commerce in the amount of
P4,783,487.15, with interest until fully paid, and the costs of this suit.

SO ORDERED.[10]
 Respondent appealed to the Court of Appeals which rendered a decision dated
September 28, 2001, reversing the trial courts decision. The Court of Appeals held that
the element of misappropriation or conversion in violation of P.D. No. 115, in relation to
the crime of estafa, was absent in this case, thereby acquitting the respondent and
deleting her civil liability. The decretal portion of the decision reads as follows:
WHEREFORE, premises considered, the appealed decision is hereby REVERSED, and
the accused-appellant ACQUITTED of the crime charged. The civil liability adjudged by
the court a quo is hereby deleted, there being no showing that accused-appellant bound
herself personally liable with respect to the loan secured by the trust receipt.

SO ORDERED.[11]
Petitioner filed a Motion for Reconsideration which was denied. Petitioner now comes to
this Court submitting the following issues for our resolution:
I. WHETHER RESPONDENT IS JOINTLY AND SEVERALLY LIABLE WITH VIA
MODA UNDER THE GUARANTEE CLAUSE OF LC NO. [BCZ-940051] (EXHIBIT A)
SECURED BY TRUST RECEIPT NO. [94-22221] (EXHIBIT C). [12]

II. WHETHER THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR

IN DELETING THE CIVIL LIABILITY OF RESPONDENT SERRANO IN ITS
DECISION DATED SEPTEMBER 28, 2001.[13]
On the first issue, petitioner contends that the Court of Appeals made a manifestly
mistaken inference from its findings or a misapprehension of facts and overlooked a
vital piece of evidence on record, particularly, the Guarantee Clause of the Letter of
Credit secured by the Trust Receipt. Petitioner further alleges that the said Guarantee
Clause provides that the liability of respondent is joint and solidary; hence, she should
be held liable on the obligation.

A letter of credit is a separate document from a trust receipt. While the trust receipt may
have been executed as a security on the letter of credit, still the two documents involve
different undertakings and obligations. A letter of credit is an engagement by a bank or
other person made at the request of a customer that the issuer will honor drafts or other
demands for payment upon compliance with the conditions specified in the credit.
Through a letter of credit, the bank merely substitutes its own promise to pay for the
promise to pay of one of its customers who in return promises to pay the bank the
amount of funds mentioned in the letter of credit plus credit or commitment fees
mutually agreed upon.[14] By contrast, a trust receipt transaction is one where the
entruster, who holds an absolute title or security interests over certain goods,
documents or instruments, released the same to the entrustee, who executes a trust
receipt binding himself to hold the goods, documents or instruments in trust for the
entruster and to sell or otherwise dispose of the goods, documents and instruments with
the obligation to turn over to the entruster the proceeds thereof to the extent of the
amount owing to the entruster, or as appears in the trust receipt, or return the goods,
documents or instruments themselves if they are unsold, or not otherwise disposed of,
in accordance with the terms and conditions specified in the trust receipt. [15]

However, the question of the liability of respondent based on the Guarantee Clause of
the Letter of Credit, was not raised either at the trial court or before the Court of
Appeals. A question that was never raised in the courts below cannot be allowed to be
raised for the first time on appeal without offending basic rules of fair play, justice and
due process. Such an issue was not brought to the fore either in the trial court or the
appellate court, and would have been disregarded by the latter tribunal for the reasons
previously stated. With more reason, the same does not deserve consideration by this
Court.[16]

On the second issue, the Court of Appeals held that respondent Serrano cannot be held
civilly liable under the trust receipt since she was not made personally liable nor was
she a guarantor therein. The parties stipulated during the pre-trial that respondent
Serrano executed the trust receipt in representation of Via Moda, Inc., which has a
separate personality from Serrano, and petitioner BOC failed to show sufficient reason
to justify the piercing of the veil of corporate fiction. It thus ruled that this was not
Serranos personal obligation but that of Via Moda and there was no basis of finding her
solidarily liable with Via Moda.[17]

Worthy of mention at this point is the Court of Appeals finding that there was no
misappropriation or conversion by the respondent of the proceeds of the sale in the
goods, subject of the trust receipt since the proceeds were actually received by
petitioner but the latter applied the same to Via Modas other obligations under the
export packing loan. It further stated that such application of payment to another
obligation was done by petitioner on its own and should not create a criminal liability on
the part of respondent who did not take part nor had any knowledge thereof. It is on this
premise that the respondent was acquitted of the crime charged. [18]
Incidentally, petitioner urged this Court to review the factual findings of the case due to
contradictory findings of the trial court and the Court of Appeals arising from
misappreciation of facts by the Court of Appeals. Such plea must be rejected. It is a well
established rule that in an appeal via certiorari, only questions of law may be raised,
[19]
and we find petitioners averments insufficient to disregard this well-entrenched rule.
This Court does not, of itself, automatically delve into the record of a case to determine
the facts anew where there is disagreement between the findings of fact by the trial
court and by the Court of Appeals. When the disagreement is merely on the probative
value of the evidence, i.e., which is more credible of two versions, we limit our review to
only ascertaining if the findings of the Court of Appeals are supported by the records. So
long as the findings of the appellate court are consistent with and not palpably contrary
to the evidence on record, we shall decline to make a review on the probative value of
such evidence. The findings of fact of the Court of Appeals, and not those of the trial
court, will be considered final and conclusive, even in this Court. [20] In this case, we find
no cogent reason to disturb the foregoing factual findings of the Court of Appeals.

At any rate, petitioner BOC is not precluded from filing a separate civil action against the
responsible party where the abovementioned issues could be properly resolved or
determined. The issues raised by herein petitioner involve a determination of facts and
require the admission and examination of additional evidence for its resolution. That
cannot be done in a petition for review on certiorari by merely appealing the civil aspect
of an acquittal in a criminal case.

WHEREFORE, the petition is DENIED for lack of merit. The Decision dated September
28, 2001 and theResolution dated January 17, 2002, of the Court of Appeals in CA-G.R.
CR No. 24570, are AFFIRMED.

SO ORDERED.
 EN BANC

[ G.R. No. 130866, September 16, 1998 ]

ST. MARTIN FUNERAL HOME, PETITIONER, VS. NATIONAL LABOR RELATIONS

MARTINEZ, COMMISSION AND BIENVENIDO ARICAYOS, RESPONDENTS.

DECISION

REGALADO, J.:

The present petition for certiorari stemmed from a complaint for illegal dismissal filed by
herein private respondent before the National Labor Relations Commission (NLRC),
Regional Arbitration Branch No. III, in San Fernando, Pampanga. Private respondent
alleges that he started working as Operations Manager of petitioner St. Martin Funeral
Home on February 6, 1995. However, there was no contract of employment executed
between him and petitioner nor was his name included in the semi-monthly payroll. On
January 22, 1996, he was dismissed from his employment for allegedly
misappropriating P38,000.00 which was intended for payment by petitioner of its value
added tax (VAT) to the Bureau of Internal Revenue (BIR). [1]

Petitioner on the other hand claims that private respondent was not its employee but
only the uncle of Amelita Malabed, the owner of petitioner St. Martins Funeral Home.
Sometime in 1995, private respondent, who was formerly working as an overseas
contract worker, asked for financial assistance from the mother of Amelita. Since then,
as an indication of gratitude, private respondent voluntarily helped the mother of Amelita
in overseeing the business.

In January 1996, the mother of Amelita passed away, so the latter she took over the
management of the business. She then discovered that there were arrears in the
payment of taxes and other government fees, although the records purported to show
that the same were already paid. Amelita then made some changes in the business
operation and private respondent and his wife were no longer allowed to participate in
the management thereof. As a consequence, the latter filed a complaint charging that
petitioner had illegally terminated his employment. [2]

Based on the position papers of the parties, the labor arbiter rendered a decision in
favor of petitioner on October 25, 1996 declaring that no employer-employee
relationship existed between the parties and, therefore, his office had no jurisdiction
over the case.[3]

Not satisfied with the said decision, private respondent appealed to the NLRC
contending that the labor arbiter erred (1) in not giving credence to the evidence
submitted by him; (2) in holding that he worked as a "volunteer" and not as an employee
of St. Martin Funeral Home from February 6, 1995 to January 23, 1996, or a period of
about one year; and (3) in ruling that there was no employer-employee relationship
between him and petitioner.[4]

On June 13, 1997, the NLRC rendered a resolution setting aside the questioned
decision and remanding the case to the labor arbiter for immediate appropriate
proceedings.[5] Petitioner then filed a motion for reconsideration which was denied by
the NLRC in its resolution dated August 18, 1997 for lack of merit, [6] hence the present
petition alleging that the NLRC committed grave abuse of discretion. [7]

Before proceeding further into the merits of the case at bar, the Court feels that it is now
exigent and opportune to reexamine the functional validity and systemic practicability of
the mode of judicial review it has long adopted and still follows with respect to decisions
of the NLRC. The increasing number of labor disputes that find their way to this Court
and the legislative changes introduced over the years into the provisions of Presidential
Decree (P.D.) No. 442 (The Labor Code of the Philippines and Batas Pambansa Blg.
(B.P. No.) 129 (The Judiciary Reorganization Act of 1980) now stridently call for and
warrant a reassessment of that procedural aspect.

We prefatorily delve into the legal history of the NLRC. It was first established in the
Department of Labor by P.D. No. 21 on October 14, 1972, and its decisions were
expressly declared to be appealable to the Secretary of Labor and, ultimately, to the
President of the Philippines.

On May 1, 1974, P.D. No. 442 enacted the Labor Code of the Philippines, the same to
take effect six months after its promulgation.[8] Created and regulated therein is the
present NLRC which was attached to the Department of Labor and Employment for
program and policy coordination only.[9] Initially, Article 302 (now, Article 223) thereof
also granted an aggrieved party the remedy of appeal from the decision of the NLRC to
the Secretary of Labor, but P.D. No. 1391 subsequently amended said provision and
abolished such appeals. No appellate review has since then been provided for.

Thus, to repeat, under the present state of the law, there is no provision for appeals
from the decision of the NLRC.[10] The present Section 223, as last amended by Section
12 of R.A. No. 6715, instead merely provides that the Commission shall decide all
cases within twenty days from receipt of the answer of the appellee, and that such
decision shall be final and executory after ten calendar days from receipt thereof by the
parties.

When the issue was raised in an early case on the argument that this Court has no
jurisdiction to review the decisions of the NLRC, and formerly of the Secretary of Labor,
since there is no legal provision for appellate review thereof, the Court nevertheless
rejected that thesis. It held that there is an underlying power of the courts to scrutinize
the acts of such agencies on questions of law and jurisdiction even though no right of
review is given by statute; that the purpose of judicial review is to keep the
administrative agency within its jurisdiction and protect the substantial rights of the
parties; and that it is that part of the checks and balances which restricts the separation
of powers and forestalls arbitrary and unjust adjudications. [11]

Pursuant to such ruling, and as sanctioned by subsequent decisions of this Court, the
remedy of the aggrieved party is to timely file a motion for reconsideration as a
precondition for any further or subsequent remedy,[12] and then seasonably avail of the
special civil action of certiorari under Rule 65, [13] for which said Rule has now fixed the
reglementary period of sixty days from notice of the decision. Curiously, although the
10-day period for finality of the decision of the NLRC may already have lapsed as
contemplated in Section 223 of the Labor Code, it has been held that this Court may still
take cognizance of the petition for certiorari on jurisdictional and due process
considerations if filed within the reglementary period under Rule 65. [14]

Turning now to the matter of judicial review of NLRC decisions, B.P. No. 129 originally
provided as follows:

SEC. 9. Jurisdiction. - The Intermediate Appellate Court shall exercise:

(1) Original jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas

corpus, and quo warranto, and auxiliary writs or processes, whether or not in aid of its
appellate jurisdiction;

(2) Exclusive original jurisdiction over actions for annulment of judgments of Regional
Trial Courts; and

(3) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions,
orders, or awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities,
boards, or commissions, except those falling within the appellate jurisdiction of the
Supreme Court in accordance with the Constitution, the provisions of this Act, and of
subparagraph (1) of the third paragraph and subparagraph (4) of the fourth paragraph of
Section 17 of the Judiciary Act of 1948.

The Intermediate Appellate Court shall have the power to try cases and conduct
hearings, receive evidence and perform any and all acts necessary to resolve factual
issues raised in cases falling within its original and appellate jurisdiction, including the
power to grant and conduct new trials or further proceedings.

These provisions shall not apply to decisions and interlocutory orders issued under the
Labor Code of the Philippines and by the Central Board of Assessment Appeals. [15]

Subsequently, and as it presently reads, this provision was amended by R.A. No. 7902
effective March 18, 1995, to wit:

SEC. 9. Jurisdiction. - The Court of Appeals shall exercise:

(1) Original jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas

corpus, and quo warranto, and auxiliary writs or processes, whether or not in aid of its
appellate jurisdiction;

(2) Exclusive original jurisdiction over actions for annulment of judgments of Regional
Trial Courts; and

(3) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions,
orders or awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities,
boards or commissions, including the Securities and Exchange Commission, the Social
Security Commission, the Employees Compensation Commission and the Civil Service
Commission, except those falling within the appellate jurisdiction of the Supreme Court
in accordance with the Constitution, the Labor Code of the Philippines under
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.

The Court of Appeals shall have the power to try cases and conduct hearings, receive
evidence and perform any and all acts necessary to resolve factual issues raised in
cases falling within its original and appellate jurisdiction, including the power to grant
and conduct new trials or further proceedings. Trials or hearings in the Court of Appeals
must be continuous and must be completed within, three (3) months, unless extended
by the Chief Justice."

It will readily be observed that, aside from the change in the name of the lower appellate
court,[16] the following amendments of the original provisions of Section 9 of B.P. No. 129
were effected by R.A. No. 7902, viz.:

1. The last paragraph which excluded its application to the Labor Code of the
Philippines and the Central Board of Assessment Appeals was deleted and replaced by
a new paragraph granting the Court of Appeals limited powers to conduct trials and
hearings in cases within its jurisdiction.

2. The reference to the Labor Code in that last paragraph was transposed to paragraph
(3) of the section, such that the original exclusionary clause therein now provides
"except 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." (Italics supplied)

3. Contrarily, however, specifically added to and included among the quasi-judicial

agencies over which the Court of Appeals shall have exclusive appellate jurisdiction are
the Securities and Exchange Commission, the Social Security Commission, the
Employees Compensation Commission and the Civil Service Commission.
This, then, brings us to a somewhat perplexing impass, both in point of purpose and
terminology. As earlier explained, our mode of judicial review over decisions of the
NLRC has for some time now been understood to be by a petition for certiorari under
Rule 65 of the Rules of Court. This is, of course, a special original action limited to the
resolution of jurisdictional issues, that is, lack or excess of jurisdiction and, in almost all
cases that have been brought to us, grave abuse of discretion amounting to lack of
jurisdiction.

It will, however, be noted that paragraph (3), Section 9 of B.P. No. 129 now grants
exclusive appellate jurisdiction to the Court of Appeals over all final adjudications of the
Regional Trial Courts and the quasi-judicial agencies generally or specifically referred to
therein except, among others, "those falling within the appellate jurisdiction of the
Supreme Court in accordance with x x x the Labor Code of the Philippines under
Presidential Decree No. 442, as amended, x x x." This would necessarily contradict
what has been ruled and said all along that appeal does not lie from decisions of the
NLRC.[17] Yet, under such excepting clause literally construed, the appeal from the
NLRC cannot be brought to the Court of Appeals, but to this Court by necessary
implication.

The same exceptive clause further confuses the situation by declaring that the Court of
Appeals has no appellate jurisdiction over decisions falling within the appellate
jurisdiction of the Supreme Court in accordance with the Constitution, the provisions of
B.P. No. 129, and those specified cases in Section 17 of the Judiciary Act of 1948.
These cases can, of course, be properly excluded from the exclusive appellate
jurisdiction of the Court of Appeals. However, because of the aforementioned
amendment by transposition, also supposedly excluded are cases falling within the
appellate jurisdiction of the Supreme Court in accordance with the Labor Code. This is
illogical and impracticable, and Congress could not have intended that procedural gaffe,
since there are no cases in the Labor Code the decisions, resolutions, orders or awards
wherein are within the appellate jurisdiction of the Supreme Court or of any other court
for that matter.

A review of the legislative records on the antecedents of R.A. No. 7902 persuades us
that there may have been an oversight in the course of the deliberations on the said Act
or an imprecision in the terminology used therein. In fine, Congress did intend to provide
for judicial review of the adjudications of the NLRC in labor cases by the Supreme
Court, but there was an inaccuracy in the term used for the intended mode of review.
This conclusion which we have reluctantly but prudently arrived at has been drawn from
the considerations extant in the records of Congress, more particularly on Senate Bill
No. 1495 and the Reference Committee Report on S. No. 1495/H. No. 10452. [18]

In sponsoring Senate Bill No. 1495, Senator Raul S. Roco delivered his sponsorship
speech[19] from which we reproduce the following excerpts:

The Judiciary Reorganization Act, Mr. President, Batas Pambansa Blg. 129,
reorganized the Court of Appeals and at the same time expanded its jurisdiction and
powers. Among others, its appellate jurisdiction was expanded to cover not only final
judgment of Regional Trial Courts, but also all final judgment(s), decisions, resolutions,
orders or awards of quasi-judicial agencies, instrumentalities, boards and commissions,
except those falling within the appellate jurisdiction of the Supreme Court in accordance
with the Constitution, the provisions of BP Blg. 129 and of subparagraph 1 of the third
paragraph and subparagraph 4 of Section 17 of the Judiciary Act of 1948.

Mr. President, the purpose of the law is to ease the workload of the Supreme Court by
the transfer of some of its burden of review of factual issues to the Court of Appeals.
However, whatever benefits that can be derived from the expansion of the appellate
jurisdiction of the Court of Appeals was cut short by the last paragraph of Section 9 of
Batas Pambansa Blg. 129 which excludes from its coverage the "decisions and
interlocutory orders issued under the Labor Code of the Philippines and by the Central
Board of Assessment Appeals."

Among the highest number of cases that are brought up to the Supreme Court are labor
cases. Hence, Senate Bill No. 1495 seeks to eliminate the exceptions enumerated in
Section 9 and, additionally, extends the coverage of appellate review of the Court of
Appeals in the decision(s) of the Securities and Exchange Commission, the Social
Security Commission, and the Employees Compensation Commission to reduce the
number of cases elevated to the Supreme Court. (Emphases and corrections ours)

xxx

Senate Bill No. 1495 authored by our distinguished Colleague from Laguna provides the
ideal situation of drastically reducing the workload of the Supreme Court without
depriving the litigants of the privilege of review by an appellate tribunal.

In closing, allow me to quote the observations of former Chief Justice Teehankee in

1986 in the Annual Report of the Supreme Court:

x x x Amendatory legislation is suggested so as to relieve the Supreme Court of the

burden of reviewing these cases which present no important issues involved beyond the
particular fact and the parties involved, so that the Supreme Court may wholly devote its
time to cases of public interest in the discharge of its mandated task as the guardian of
the Constitution and the guarantor of the peoples basic rights and additional task
expressly vested on it now "to determine whether or not there has been a grave abuse
of discretion amounting to lack of jurisdiction on the part of any branch or instrumentality
of the Government."

We used to have 500,000 cases pending all over the land, Mr. President. It has been
cut down to 300,000 cases some five years ago. I understand we are now back to
400,000 cases. Unless we distribute the work of the appellate courts, we shall continue
to mount and add to the number of cases pending.

In view of the foregoing, Mr. President, and by virtue of all the reasons we have
submitted, the Committee on Justice and Human Rights requests the support and
collegial approval of our Chamber.

xxx

Surprisingly, however, in a subsequent session, the following Committee Amendment

was introduced by the said sponsor and the following proceedings transpired: [20]

Senator Roco. On page 2, line 5, after the line "Supreme Court in accordance with the
Constitution," add the phrase "THE LABOR CODE OF THE PHILIPPINES UNDER P.D.
442, AS AMENDED." So that it becomes clear, Mr. President, that issues arising from
the Labor Code will still be appealable to the Supreme Court.

The President. Is there any objection? (Silence) Hearing none, the amendment is
approved.
Senator Roco. On the same page, we move that lines 25 to 30 be deleted. This was
also discussed with our Colleagues in the House of Representatives and as we
understand it, as approved in the House, this was also deleted, Mr. President.

The President. Is there any objection? (Silence) Hearing none, the amendment is
approved.

Senator Roco. There are no further Committee amendments, Mr. President.

Senator Romulo. Mr. President, I move that we close the period of Committee
amendments.

The President. Is there any objection? (Silence) Hearing none, the amendment is
approved. (Italics supplied)

xxx

Thereafter, since there were no individual amendments, Senate Bill No. 1495 was
passed on second reading and being a certified bill, its unanimous approval on third
reading followed.[21]; Record of the Senate, Vol. V, No. 63, pp. 180-181.21 The
Conference Committee Report on Senate Bill No. 1495 and House Bill No. 10452,
having theretofore been approved by the House of Representatives, the same was
likewise approved by the Senate on February 20, 1995, [22] inclusive of the dubious
formulation on appeals to the Supreme Court earlier discussed.

The Court is, therefore, of the considered opinion that ever since appeals from the
NLRC to the Supreme Court were eliminated, the legislative intendment was that the
special civil action of certiorari was and still is the proper vehicle for judicial review of
decisions of the NLRC. The use of the word "appeal" in relation thereto and in the
instances we have noted could have been a lapsus plumae because appeals by
certiorari and the original action for certiorari are both modes of judicial review
addressed to the appellate courts. The important distinction between them, however,
and with which the Court is particularly concerned here is that the special civil action of
certiorari is within the concurrent original jurisdiction of this Court and the Court of
Appeals;[23] whereas to indulge in the assumption that appeals by certiorari to the
Supreme Court are allowed would not subserve, but would subvert, the intention of
Congress as expressed in the sponsorship speech on Senate Bill No. 1495.

Incidentally, it was noted by the sponsor therein that some quarters were of the opinion
that recourse from the NLRC to the Court of Appeals as an initial step in the process of
judicial review would be circuitous and would prolong the proceedings. On the contrary,
as he commendably and realistically emphasized, that procedure would be
advantageous to the aggrieved party on this reasoning:

On the other hand, Mr. President, to allow these cases to be appealed to the Court of
Appeals would give litigants the advantage to have all the evidence on record be
reexamined and reweighed after which the findings of facts and conclusions of said
bodies are correspondingly affirmed, modified or reversed.

Under such guarantee, the Supreme Court can then apply strictly the axiom that factual
findings of the Court of Appeals are final and may not be reversed on appeal to the
Supreme Court. A perusal of the records will reveal appeals which are factual in nature
and may, therefore, be dismissed outright by minute resolutions. [24]

While we do not wish to intrude into the Congressional sphere on the matter of the
wisdom of a law, on this score we add the further observations that there is a growing
number of labor cases being elevated to this Court which, not being a trier of fact, has at
times been constrained to remand the case to the NLRC for resolution of unclear or
ambiguous factual findings; that the Court of Appeals is procedurally equipped for that
purpose, aside from the increased number of its component divisions; and that there is
undeniably an imperative need for expeditious action on labor cases as a major aspect
of constitutional protection to labor.

Therefore, all references in the amended Section 9 of B.P. No. 129 to supposed appeals
from the NLRC to the Supreme Court are interpreted and hereby declared to mean and
refer to petitions for certiorari under Rule 65. Consequently, all such petitions should
henceforth be initially filed in the Court of Appeals in strict observance of the doctrine on
the hierarchy of courts as the appropriate forum for the relief desired.

Apropos to this directive that resort to the higher courts should be made in accordance
with their hierarchical order, this pronouncement in Santiago vs. Vasquez, et al.
[25]
should be taken into account:
One final observation. We discern in the proceedings in this case a propensity on the
part of petitioner, and, for that matter, the same may be said of a number of litigants who
initiate recourses before us, to disregard the hierarchy of courts in our judicial system by
seeking relief directly from this Court despite the fact that the same is available in the
lower courts in the exercise of their original or concurrent jurisdiction, or is even
mandated by law to be sought therein. This practice must be stopped, not only because
of the imposition upon the precious time of this Court but also because of the inevitable
and resultant delay, intended or otherwise, in the adjudication of the case which often
has to be remanded or referred to the lower court as the proper forum under the rules of
procedure, or as better equipped to resolve the issues since this Court is not a trier of
facts. We, therefore, reiterate the judicial policy that this Court will not entertain direct
resort to it unless the redress desired cannot be obtained in the appropriate courts or
where exceptional and compelling circumstances justify availment of a remedy within
and calling for the exercise of our primary jurisdiction.

WHEREFORE, under the foregoing premises, the instant petition for certiorari is
hereby REMANDED, and all pertinent records thereof ordered to be FORWARDED, to
the Court of Appeals for appropriate action and disposition consistent with the views and
ruling herein set forth, without pronouncement as to costs.

SO ORDERED.
[10]
While Art. 223 bears the epigraph of "Appeal," it actually refers only to decisions,
awards, or orders of the labor arbiter which shall be final and executory unless appealed
to the NLRC by any or both parties within ten calendar days from receipt thereof.
[16]
Executive Order No. 33 restored the name of the Court of Appeals, in lieu of the
Intermediate Appellate Court, effective July 28, 1986.
[17]
The different modes of appeal, that is, by writ of error (Rule 41), petition for review
(Rules 42 and 43), and petition for review on certiorari (Rule 45) obviously cannot be
availed of because there is no provision for appellate review of NLRC decisions in P.D.
No. 442, as amended.
[23]
The Regional Trial Court also shares that concurrent jurisdiction but that cannot be
considered with regard to the NLRC since they are of the same rank.
 FIRST DIVISION

[ G.R. NO. 147640, October 16, 2006 ]

JOWETT K. GOLANGCO, PETITIONER, VS. ATTY. JONE B. FUNG, RESPONDENT.

[G.R. No. 147762]

OFFICE OF THE OMBUDSMAN, PETITIONER, VS. HON. COURT OF APPEALS AND

ATTY. JONE B. FUNG, RESPONDENTS.

DECISION

CHICO-NAZARIO, J.:

Petitioners Jowett K. Golangco (Golangco) and the Office of the Ombudsman, in this
consolidated Petitions for Review under Rule 45 of the Rules of Court, assail the
Decision[1] of the Court of Appeals in CA- G.R. SP No. 57418 dated 24 August 2000 and
its Resolution[2] dated 28 March 2001 setting aside the Resolution dated 13 March 1995
and the Order dated 25 September 1996 of the Office of the Ombudsman in OMB-ADM-
0-93-0149. The assailed Decision also directed the Office of the Ombudsman to cause
the withdrawal of the Information it filed with the Regional Trial Court (RTC) of Manila,
Branch 38 entitled, "People of the Philippines v. Atty. Jone B. Fung," docketed as
Criminal Case No. 96-149444. The said Resolution and Order of the Office of the
Ombudsman found Atty. Jone B. Fung (respondent) guilty of oppression, gross
inefficiency, gross neglect of duty and grave misconduct and imposed upon him the
penalty of dismissal from government service.

Respondent is an employee of the Philippine Overseas Employment Administration

(POEA) and was, at that time, assigned as Officer-In-Charge of the Operations and
Surveillance Division, Anti-Illegal Recruitment Branch, Licensing and Regulation Office,
under the auspices of the Department of Labor and Employment (DOLE).

On 1 February 1993, then DOLE Secretary Nieves Confesor received a letter from then
Senator Ernesto Maceda bringing to her attention a letter-complaint of a certain Edwin
Belarmino, an applicant for overseas employment with the Golangco and Monteverde
recruitment agency [G&M (Phil.) Inc.]. In the letter-complaint, Belarmino alleged that he
was required by the recruitment agency to pay P20,000.00 as initial payment of the total
recruitment fee of P55,000.00 before his application as factory worker in Taiwan could
be processed.

The DOLE Secretary referred the letter-complaint to the POEA Administrator who
instructed the POEA Licensing and Regulation Office, headed by respondent, to
conduct an on-the- spot investigation of the activities of G&M (Phil.) Inc. and to verify in
particular the placement fee being charged as alleged in the letter-complaint.
Respondent was likewise directed to conduct a discreet surveillance of the recruitment
agency.

On 8 February 1993, some inspectors of the POEA Licensing and Regulation Office
went to the office of G&M (Phil.) Inc. and inquired from petitioner Golangco, the
President of G&M (Phil.) Inc., about the allegation that the agency collected excessive
fees from its applicants. Petitioner Golangco denied such allegation.

On 10 February 1993, respondent dispatched SPO4 Domingo Bonita and SPO2 Alfonso
Zacarias, PNP-CIS operatives, to perform a surveillance operation on the activities of
the agency and to submit a written report of their findings and recommendations.

The PNP-CIS operatives proceeded to the premises of G&M (Phil.) Inc. located at 426
J. Nepomuceno St., San Miguel, Manila, where they posed as applicant-workers for
Taiwan. They were entertained by Elizabeth Encenada (Encenada), who introduced
herself as an employee of the agency. She gave them bio-data forms to fill up and a list
of documents to prepare. The bio-data forms bore the letterhead and the control
numbers of G&M (Phil.) Inc. Encenada informed the operatives that the total job
placement fee per applicant was P55,000.00 payable as follows: P7,000.00
downpayment, P20,000.00 to be paid after submission of the requirements, and
P28,000.00 payable at the airport prior to departure for Taiwan.

As a result of their surveillance, the operatives recommended that an entrapment

operation be conducted on the employees of the agency.
On 15 February 1993, a joint POEA-CIS team headed by respondent with eight others
as members, including SPO4 Bonita and SPO2 Zacarias, proceeded to the premises of
G&M (Phil.) Inc. to conduct the said operation. SPO4 Bonita was entertained by
Encenada. Thereafter, SPO4 Bonita handed P7,000.00 to Encenada as initial payment
of the placement fee of P55,000.00. When Encenada received the money, she was
arrested by the team.

During the arrest of Encenada, petitioner Golangco was not around. When he arrived,
he, too, was arrested by the POEA-CIS team and was brought to the POEA
Headquarters for investigation.

Petitioner Golangco left the POEA premises at around 7:30 p.m. after the termination of
the investigation.

Subsequently, petitioner Golangco and Encenada were charged with violation of Articles
29, 32 and 34(a) of the Labor Code. Thereafter, Senior State Prosecutor Romeo A.
Danosos issued a Resolution finding probable cause against Encenada for violations of
Articles 32 and 34(a) of the Labor Code, and dismissing all the charges against
petitioner Golangco.

Administrative cases were also hurled against G&M (Phil.) Inc. for violations of the
Labor Code. However, the cases were dismissed based on the finding that there was
no evidence adduced showing that the agency was involved in the illegal acts of
Encenada.

Aggrieved by his arrest, petitioner Golangco filed a criminal complaint against

respondent before the Office of the Ombudsman for arbitrary detention and violation of
Section 3, paragraphs (a) and (e) of Republic Act No. 3019. The case was docketed as
OMB-0-93-0407. An administrative complaint for oppression, abuse of authority, gross
inefficiency, gross neglect of duty and grave misconduct arising from the same incident
was likewise filed against respondent which was docketed as OMB-ADM-0-93-0149.

In a Resolution dated 9 June 1993, Graft Investigation Officer (GIO) II Mothalib C. Onos
(GIO Onos) recommended the dismissal of the criminal complaint against respondent in
OMB-0-93-0407. This recommendation was approved by Overall Deputy Ombudsman
Francisco A. Villa in a Resolution dated 15 July 1993. Petitioner Golangco filed a
motion for reconsideration of the resolution of dismissal which was denied by GIO Onos
in an Order dated 16 September 1993 and approved by Overall Deputy Ombudsman
Francisco A. Villa on 28 October 1993.

Unfazed by the denial of his motion for reconsideration, petitioner Golangco filed a
Petition for Certiorari before this Court entitled, "Jowett K. Golangco v. Office of the
Ombudsman, et al." docketed as G.R. No. 112857.

In a Resolution dated 24 January 1994, this Court dismissed the petition. Petitioner
Golangco filed a motion for reconsideration of the said resolution which this Court
denied in a Resolution dated 16 March 1994.

In the meantime, the administrative complaint against respondent, docketed as OMB-

ADM-0-93-0149, proceeded independently of the criminal complaint. In a Resolution
dated 13 March 1995, GIO II Celso R. Dao found respondent guilty of the administrative
charges against him and recommended his dismissal from the service for cause with
the accessory penalties of forfeiture of his leave credits and retirement benefits and
disqualification from further re-employment in the government. This Resolution was
disapproved by Assistant Ombudsman Abelardo L. Aportadera, Jr. who recommended
the reassignment of the case to another graft investigating officer so that the
administrative aspect of the case can "be reconciled with the facts found in the criminal
aspect of the case." The recommendation of Assistant Ombudsman Abelardo L.
Aportadera, Jr. was later approved by Overall Deputy Ombudsman Francisco A. Villa
and the case was reassigned to GIO Onos.

Convinced that the administrative complaint against respondent was bereft of evidence,
GIO Onos, in a Resolution dated 17 May 1995, recommended the dismissal of the
same which was approved by Assistant Ombudsman Abelardo Aportadera, Jr. by
authority of then Acting Ombudsman Francisco A. Villa on 14 June 1995.

Petitioner Golangco filed a motion for reconsideration of the Resolution dated 17 May
1995, which was denied by GIO Onos in an Order dated 9 August 1995.

When Aniano A. Desierto assumed the Office of the Ombudsman, he referred the Order
dated 9 August 1995 of GIO Onos to the Office of the Special Prosecutor for further
study.
Special Prosecution Officer I Lemuel M. De Guzman (De Guzman), to whom the case
was assigned, issued a Memorandum dated 22 January 1996 finding probable cause
against petitioner Golangco for violation of Section 3(e) of Republic Act No. 3019. Thus,
De Guzman recommended to Ombudsman Aniano A. Desierto that the Resolutions
dated 9 June 1993 and 16 September 1993 in the criminal complaint docketed as OMB-
0-93-0407 be set aside, and that the information he prepared indicting respondent
before the RTC for violating Section 3(e) of Republic Act No. 3019 to be approved. De
Guzman also recommended that GIO Onos' Resolution dated 9 August 1996 dismissing
the administrative complaint against respondent be disapproved; that the Resolution of
the Overall Deputy Ombudsman dated 17 May 1995 be set aside; that petitioner
Golangco's motion for reconsideration be given due course; and that GIO Dao's
Resolution dated 13 March 1995 finding respondent guilty of the administrative charge
be approved.

On 12 February 1996, Ombudsman Desierto approved the Information charging

respondent with violation of Section 3(e) of Republic Act No. 3019 as well as the
Resolution dated 13 March 1995 of GIO Dao finding respondent guilty of the
administrative charges filed against him. Ombudsman Desierto disapproved GIO Onos'
Resolution dated 17 May 1995 recommending the dismissal of the administrative
complaint against respondent, which, as earlier stated, had already been approved by
Assistant Ombudsman Aportadera by authority of then Acting Ombudsman Villa.

With the Ombudsman's approval of the Information prepared by De Guzman, said

information was subsequently filed before the RTC, Branch 38, Manila, docketed as
Criminal Case No. 96-149144.

Respondent filed a Motion for Reconsideration of GIO Dao's Resolution dated 13 March
1995. GIO Dao denied the motion in an Order dated 25 September 1996. The Order of
Denial was later approved by Ombudsman Desierto on 24 February 1997.

Disgruntled with the actions of the Ombudsman in OMB-ADM-0-93-0149, respondent

filed a Petition for Review on Certiorari with this Court impugning the validity of the
foregoing Resolution and Order adjudging him guilty of oppression, gross inefficiency,
gross neglect of duty and grave misconduct. The petition, docketed as G.R. No.
112857, was later referred to the Court of Appeals based on the doctrine laid down in
Fabian v. Hon. Desierto[3]which vested in the Court of Appeals the appellate jurisdiction
over decisions of the Ombudsman pertaining to administrative disciplinary cases.

In a Decision dated 24 August 2000, the Court of Appeals reversed the ruling of the
Ombudsman. It likewise directed the Ombudsman to cause the withdrawal of the
information filed with the RTC of Manila, Branch 38, in the criminal case filed against
respondent, docketed as Criminal Case No. 96-149444.

Petitioner Golangco and the Office of the Ombudsman separately filed motions for
reconsideration of the decision. These motions were denied by the Court of Appeals in
a Resolution dated 28 March 2001.

Hence, these petitions.

In G.R. No. 147640, petitioner Golangco raises the following issues:

WHETHER OR NOT THE COURT OF APPEALS ERRED ON A MATTER OF LAW

WHEN IT DECLARED THAT THE RESPONDENT HAD PROBABLE CAUSE TO
ORDER PETITIONER'S WARRANTLESS ARREST.

II

WHETHER OR NOT THE COURT OF APPEALS ERRED IN GIVING WEIGHT AND

RESPECT TO THE OPINION OF THE OFFICE OF THE SOLICITOR GENERAL AND
IN CONSIDERING IT AS AN EX-OFFICIO COUNSEL FOR THE OFFICE OF THE
OMBUDSMAN.

III

WHETHER OR NOT THE COURT OF APPEALS ERRED AND EXCEEDED ITS

AUTHORITY IN, LIKEWISE, RULING ON THE CRIMINAL ASPECT OF THE CASE IN
DISREGARD OF THIS HONORABLE COURT'S RESOLUTION ISSUED IN G.R. NO.
128742 DATED FEBRUARY 14 2000.

In G.R. No. 147762, the Office of the Ombudsman submits the following issues:
I

WHETHER OR NOT THE APPELLATE COURT A QUO HAS JURISDICTION TO

REVIEW THE FINDINGS OF PROBABLE CAUSE BY THE OMBUDSMAN IN THE
CRIMINAL CASE OMB-0-93-0407, MUCH LESS DIRECT THE LATTER TO
WITHDRAW SAID CASE ALREADY FILED WITH REGIONAL TRIAL COURT,
NOTWITHSTANDING THAT ITS APPELLATE JURISDICTION PERTAINS ONLY TO
THE ADMINISTRATIVE DISCIPLINARY CASE OMB-ADM-0-93-0149 WHICH IS
DISTINCT AND INDEPENDENT OF SAID CRIMINAL CASE.

II

WHETHER OR NOT THE APPELLATE COURT A QUO GRAVELY ERRED IN FINDING

THAT PRIVATE RESPONDENT EFFECTED A VALID WARRANTLESS ARREST ON A
DULY-LICENSED RECRUITER FOR ILLEGAL TRANSFER OF RECRUITMENT
LICENSE OR AUTHORITY, AS DEFINED AND PENALIZED UNDER ARTICLES 29
AND 39 (B) OF THE LABOR CODE, AS AMENDED, EVEN THOUGH SAID
RECRUITER WAS NOT ACTUALLY COMMITTING OR ATTEMPTING TO COMMIT
SAID OFFENSE AT THE TIME OF THE ARREST.

Petitioners Golangco and the Office of the Ombudsman posit that the Court of Appeals
erred in annulling the Resolution of the Ombudsman and in ruling that respondent is not
guilty of oppression, gross inefficiency, gross neglect of duty and grave misconduct for
ordering the arrest and detention of petitioner Golangco. In support of this claim,
petitioners insist that respondent failed to comply with the constitutional and procedural
requirement when he effected petitioner Golangco's arrest without any valid warrant of
arrest. Likewise, respondent cannot validly arrest petitioner Golangco without warrant
as the latter did not commit any crime when he was arrested. Since the arrest was not
lawful, ergo, respondent deserves the penalty of dismissal from service.

Respondent is charged with an administrative case for oppression, gross inefficiency,

gross neglect of duty and grave misconduct arising from the arrest incident of petitioner
Golangco.

Oppression has been defined as "an act of cruelty, severity, unlawful exaction,
domination or excessive use of authority." [4]
Gross inefficiency is closely related to gross neglect, for both involve specific acts of
omission resulting in damage to another.[5]

Gross neglect of duty or gross negligence refers to negligence characterized by the

want of even slight care, acting or omitting to act in a situation where there is a duty to
act, not inadvertently but willfully and intentionally, with a conscious indifference to
consequences insofar as other persons may be affected. [6] It is the omission of that
care which even inattentive and thoughtless persons never fail to take on their own
property.[7] In cases involving public officials, there is gross negligence when a breach
of duty is flagrant and palpable.[8]

The Court defined misconduct as an intentional wrongdoing or deliberate violation of a

rule of law or standard of behavior, especially by a government official. [9] As
differentiated from simple misconduct, in grave misconduct the elements of corruption,
clear intent to violate the law or flagrant disregard of established rule, must be manifest.
[10]

No such acts or omissions as defined has been committed by respondent.

The attendant circumstances leading to the arrest of Encenada and petitioner Golangco
was a result of the surveillance and entrapment operations efficiently planned and
carried out by POEA-CIS team headed by respondent. It will be recalled that the arrest
incident started with the letter complaint against G&M (Phil.) Inc. of then Senator
Ernesto Maceda to then Labor Secretary Confessor which the latter referred to the
POEA. In turn, the POEA Administrator ordered a surveillance and investigation of
G&M (Phil.) Inc. to be conducted by a joint POEA- CIS team headed by respondent.
The surveillance and investigation operations established the following facts: that
Encenada permanently occupied a table of her own at G&M (Phil.) Inc.; and that she
conducted recruitment activities thereat by interviewing, screening and collecting
payments and documents from the prospective applicants of G&M (Phil.) Inc.; and that
Encenada was closely associating with the other employees of the agency and was
discussing with the wife of petitioner Golangco matters relating to the employment
status of applicants. These attendant circumstances and the fact that Encenada was
not an employee included in the list of personnel submitted by the agency to the POEA
to conduct recruitment activities, gave respondent and the POEA-CIS operatives more
than reasonable ground to sustain the belief that petitioner Golangco authorized and
allowed the illegal activities of Encenada inside the agency thereby violating Article 29
of the Labor Code which provides:

Article 29. Non-transferability of licence or authority-

No license or authority shall be used directly or indirectly by any person other than the
one in whose favor it was issued or at any place other than that stated in the license or
authority, nor may such license or authority be transferred, conveyed or assigned to any
other person or entity. Any transfer of business address, appointment or designation of
any agent or representative including the establishment of additional offices anywhere
shall be subject to the prior approval of the Department of Labor.

That respondent honestly believed that petitioner Golangco was violating Article 29 of
the Labor Code when the arrest was made can be gleaned from respondent's opinion
on the applicability of the said provision embodied in his Memorandum dated 10 May
1995 sent to his superior, the Officer-In-Charge of the Licensing and Regulation Office,
POEA, viz:

This Office could not close its eyes (from) the prevalent malpractices committed by the
licensed agencies of simply engaging unregistered employees in their recruitment
business for purposes of collecting money from unwary job seekers and then later, deny
them as its employees in order to escape from liability. This is exactly what was
envisioned under Article 29 of the Labor Code. Otherwise, said provision is just a
useless provision.[11]

Verily, from the foregoing disquisition, the conduct of respondent in arresting petitioner
Golangco was far from being oppressive, malicious, grossly negligent, inefficient or
abusive. On the contrary, respondent was just doing his legal duty as a government
official tasked with enforcing the law. On this score, Sanders v. Veridiano II [12] is quite
relevant:

[E]ven under the law of public officers, the acts of the petitioners are protected by the
presumption of good faith, which has not been overturned by the private respondents.
Even mistakes concededly committed by such public officers are not actionable as long
as it is not shown that they were motivated by malice or gross negligence amounting to
bad faith.
Perforce, the Court of Appeals did not err when it held that respondent is not liable for
the administrative charge hurled against him.

Likewise, petitioners Golangco and the Office of the Ombudsman assail the actuation of
the Court of Appeals in taking cognizance of the criminal case against respondent and
directing the Office of the Ombudsman to withdraw Criminal Case No. 96-149144. This,
according to petitioners, is in violation of established jurisprudence stating that the Court
of Appeals has no authority to review the finding of probable cause by the Office of the
Ombudsman.

The Court agrees with the petitioners.

The Court of Appeals has jurisdiction over orders, directives and decisions of the Office
of the Ombudsman in administrative disciplinary cases only.[13] It cannot, therefore,
review the orders, directives or decisions of the Office of the Ombudsman in criminal or
non-administrative cases.

In Kuizon v. Desierto,[14] this Court clarified:

The appellate court correctly ruled that its jurisdiction extends only to decisions of the
Office of the Ombudsman in administrative cases. In the Fabian case, we ruled that
appeals from decisions of the Office of the Ombudsman in administrative disciplinary
cases should be taken to the Court of Appeals under Rule 43 of the 1997 Rules of Civil
Procedure. It bears stressing that when we declared Section 27 of Republic Act No.
6770 as unconstitutional, we categorically stated that said provision is involved only
whenever an appeal by certiorari under Rule 45 is taken from a decision in an
administrative disciplinary action. It cannot be taken into account where an original
action for certiorari under Rule 65 is resorted to as a remedy for judicial review, such as
from an incident in a criminal action

In the case under consideration, the Court of Appeals, instead of confining itself to the
administrative case appealed before it, reviewed the decision of the Office of the
Ombudsman in OMB-0-93-0407 finding probable cause against respondent. The Court
of Appeals further ordered the Office of the Ombudsman to withdraw the criminal
information filed by the same with the RTC of Manila docketed as Criminal Case No. 96-
149144. Such act by the Court of Appeals cannot be countenanced. It is settled that a
judgment rendered by a court without jurisdiction over the subject matter is void. [15]
Since the Court of Appeals has no jurisdiction over decisions and orders of the
Ombudsman in criminal cases, its ruling on the same is void.

WHEREFORE, judgment is rendered as follows:

(1) The Decision of the Court of Appeals dated 24 August 2000 and its Resolution
dated 28 March 2001 insofar as it ruled that respondent Jose B. Fung is not liable
for the administrative charge in OMB-ADM-0-93-0149 isAFFIRMED; and

(2) The same Decision and Resolution of the Court of Appeals directing the withdrawal
of Criminal Case No. 96-149144 pending before the Regional Trial Court, Branch
38, Manila, is VOID.

SO ORDERED.
PROCEDURE IN THE
COURT OF APPEALS
RULES 44 to 55
-Ordinary appealed
cases
-Appeal by certiorari to
the Supreme court
-Annulment of
judgments or final
orders and resolutions
 THIRD DIVISION

[ G.R. No. 141241, November 22, 2005 ]

REPUBLIC OF THE PHILIPPINES, THROUGH ITS TRUSTEE, THE ASSET

PRIVATIZATION TRUST, PETITIONER, VS. "G" HOLDINGS, INC., RESPONDENT.

DECISION

CORONA, J.:

This petition for review on certiorari under Rule 45 of the Rules of Court assails the
December 21, 1999 resolution[1] of the Court of Appeals (CA) dismissing the petition for
annulment of judgment in CA-G.R. SP No. 53517.

On May 21, 1992, the Committee on Privatization approved the proposal of the Asset
Privatization Trust (APT) for the negotiated sale of 90% of the shares of stock of the
government-owned Maricalum Mining Corporation (MMC). Learning of the government's
intention to sell MMC, the respondent "G" Holdings, Inc. signified its interest to purchase
MMC and submitted the best bid.

The series of negotiations between the petitioner Republic of the Philippines, through
the APT as its trustee,[2] and "G" Holdings culminated in the execution of a purchase and
sale agreement on October 2, 1992. Under the agreement, the Republic undertook to
sell and deliver 90% of the entire issued and outstanding shares of MMC, as well as its
company notes, to "G" Holdings in consideration of the purchase price of P673,161,280.
It also provided for a down payment of P98,704,000 with the balance divided into four
tranches payable in installment over a period of ten years.

Subsequently, a disagreement on the matter of when the installment payments should

commence arose between the parties. The Republic claimed that it should be on the
seventh month from the signing of the agreement while "G" Holdings insisted that it
should begin seven months after the fulfillment of the closing conditions.

Unable to settle the issue, "G" Holdings filed a complaint for specific performance and
damages with the Regional Trial Court of Manila, Branch 49, against the Republic to
compel it to close the sale in accordance with the purchase and sale agreement. The
complaint was docketed as Civil Case No. 95-76132.

During the pre-trial, the respective counsels of the parties manifested that the issue
involved in the case was one of law and submitted the case for decision. On June 11,
1996, the trial court rendered its decision. It ruled in favor of "G" Holdings and held:

In line with the foregoing, this Court having been convinced that the Purchase and Sale
Agreement is indeed subject to the final closing conditions prescribed by Stipulation No.
5.02 and conformably to Rule 39, Section 10 of the Rules of Court, accordingly orders
that the Asset Privatization Trust execute the corresponding Document of Transfer of
the subject shares and financial notes and cause the actual delivery of subject shares
and notes to "G" Holdings, Inc., within a period of thirty (30) days from receipt of this
Decision, and after the "G" Holdings, Inc. shall have paid in full the entire balance, at its
present value of P241,702,122.86, computed pursuant to the prepayment provisions of
the Agreement. Plaintiff shall pay the balance simultaneously with the delivery of the
Deed of Transfer and actual delivery of the shares and notes.

SO ORDERED.[3]

The Solicitor General filed a notice of appeal on behalf of the Republic on June 28,
1996. Contrary to the rules of procedure, however, the notice of appeal was filed with
the Court of Appeals (CA), not with the trial court which rendered the judgment
appealed from.

No other judicial remedy was resorted to until July 2, 1999 when the Republic, through
the APT, filed a petition for annulment of judgment with the CA. It claimed that the
decision should be annulled on the ground of abuse of discretion amounting to lack of
jurisdiction on the part of the trial court. It characterized the fashion by which the trial
court handled the case as highly aberrant and peculiar because the court a
quo promulgated its decision prior to the submission of the Republic's formal offer of
evidence and without ruling on the admissibility of the evidence offered by "G" Holdings.
The Republic also asserted that the failure of the Solicitor General to file the notice of
appeal with the proper forum amounted to extrinsic fraud which prevented it from
appealing the case.

Finding that the grounds necessary for the annulment of judgment were inexistent, the
appellate court dismissed the petition. It ruled that there was no extrinsic fraud because
"G" Holdings had no participation in the failure of the Solicitor General to properly
appeal the decision of the trial court. Neither was there any connivance between "G"
Holdings' and the Republic's counsels in the commission of the error.

The appellate court also held that the trial court had jurisdiction over the subject matter
of the case, as well as over the person of the parties. Hence, whatever error the trial
court committed in the exercise of its jurisdiction was merely an error of judgment, not
an error of jurisdiction. As an error of judgment, it was correctable by appeal.
Unfortunately, appeal could no longer be availed of by the Republic.

The appellate court further declared that there was no grave abuse of discretion on the
part of the court a quowhen it decided the case before its receipt of the Republic's
formal offer of evidence. The evidence of both parties was already in the possession of
the court and painstakingly considered before the decision was arrived at. Thus, if at all,
the trial court perpetrated an "irregularity" which should have been the subject of an
appeal. But no appeal was perfected and the decision of the trial court thus attained
finality.

The Republic now assails the resolution of the appellate court on the following grounds:

THE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE TRIAL COURT
COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF
JURISDICTION WHICH RESULTED IN THE NULLITY OF THE TRIAL COURT'S
DECISION

A
THE TRIAL COURT RENDERED ITS DECISION EVEN PRIOR TO THE SUBMISSION
OF PETITIONER'S FORMAL OFFER OF EVIDENCE AND EVEN BEFORE
PETITIONER COULD FILE ITS COMMENT TO RESPONDENT'S FORMAL OFFER OF
EVIDENCE

THE TRIAL COURT RENDERED ITS DECISION WITHOUT RULING ON THE

ADMISSION OF THE EVIDENCE OFFERED BY RESPONDENT

II

THE FAILURE OF THE [SOLICITOR GENERAL] TO FILE THE NOTICE OF APPEAL

WITH THE PROPER FORUM AMOUNTED TO EXTRINSIC FRAUD WHICH
PREVENTED THE PETITIONER FROM APPEALING THE CASE WITH THE COURT
OF APPEALS.[4]

Before anything else, we note that the instant petition suffers from a basic infirmity for
lack of the requisite imprimatur from the Office of the Solicitor General, hence, it is
dismissible on that ground. [5] The general rule is that only the Solicitor General can bring
or defend actions on behalf of the Republic of the Philippines and that actions filed in
the name of the Republic, or its agencies and instrumentalities for that matter, if not
initiated by the Solicitor General, should be summarily dismissed. [6] As an exception to
the general rule, the Solicitor General is empowered to "deputize legal officers of
government departments, bureaus, agencies and offices to assist the Solicitor General
and appear or represent the Government in cases involving their respective offices,
brought before the courts and exercise supervision and control over such legal officers
with respect to such cases." [7]

Here, the petition was signed and filed on behalf of the Republic by Atty. Raul B.
Villanueva, the executive officer of the legal department of the APT, and Atty. Rhoel Z.
Mabazza.[8] However, they did not present any proof that they had been duly deputized
by the Solicitor General to initiate and litigate this action. Thus, this petition can be
dismissed on that ground.
In the interest of justice, however, we shall proceed to discuss the issues propounded
by the Republic.

A petition for annulment of judgment is an extraordinary action. [9] By virtue of its

exceptional character, the action is restricted exclusively to the grounds specified in the
rules,[10] namely, (1) extrinsic fraud and (2) lack of jurisdiction. [11] The rationale for the
restriction is to prevent the extraordinary action from being used by a losing party to
make a complete farce of a duly promulgated decision that has long become final and
executory.[12] The remedy may not be invoked where the party has availed himself of the
remedy of new trial, appeal, petition for relief or other appropriate remedy and lost, or
where he has failed to avail himself of those remedies through his own fault or
negligence.[13]

Lack of jurisdiction as a ground for annulment of judgment refers to either lack of

jurisdiction over the person of the defending party or over the subject matter of the
claim.[14] Where the court has jurisdiction over the defendant and over the subject matter
of the case, its decision will not be voided on the ground of absence of jurisdiction.

The Republic does not deny that the trial court had jurisdiction over it as well as over the
subject matter of the case. What the Republic questions is the grave abuse of discretion
allegedly committed by the court a quo in rendering the decision.

We cannot agree with the Republic.

First, the interpretation of the Republic contravenes the very rationale of the restrictive
application of annulment of judgment. By seeking to include acts committed with grave
abuse of discretion, it tends to enlarge the concept of lack of jurisdiction as a ground for
the availment of the remedy.

In a petition for annulment of judgment based on lack of jurisdiction, the petitioner must
show not merely an abuse of jurisdictional discretion but an absolute lack of jurisdiction.
[15]
Thus, the concept of lack of jurisdiction as a ground to annul a judgment does not
embrace abuse of discretion.

Second, by claiming grave abuse of discretion on the part of the trial court, the Republic
actually concedes and presupposes the jurisdiction of the court to take cognizance of
the case. Hence, the Republic effectively admits that the two grounds for which lack of
jurisdiction may be validly invoked to seek the annulment of a judgment want of
jurisdiction over the parties and want of jurisdiction over the subject matter do not
exist. It only assails the manner in which the trial court formulated its judgment in the
exercise of its jurisdiction.

Jurisdiction is distinct from the exercise thereof. We amply explained the distinction
between the two in Tolentino v. Leviste,[16] thus:

Jurisdiction is not the same as the exercise of jurisdiction. As distinguished from the
exercise of jurisdiction, jurisdiction is the authority to decide a cause, and not the
decision rendered therein. Where there is jurisdiction over the person and the subject
matter, the decision on all other questions arising in the case is but an exercise of the
jurisdiction. And the errors which the court may commit in the exercise of jurisdiction are
merely errors of judgment which are the proper subject of an appeal.

Finally, no grave abuse of discretion can be imputed to the trial court when it rendered
the decision. The pieces of evidence considered by the court a quo to arrive at its
decision were documents attached as annexes to the various pleadings filed by the
parties. It is well-settled that documents attached to the pleadings form part thereof and
may be considered as evidence even if not formally introduced as evidence. [17] The
court may and should consider as evidence documents attached to the pleadings filed
by the parties and made a part thereof, without necessity of introducing them expressly
as evidence when their authenticity and due execution have not been denied under
oath.[18]

Moreover, the minutes of the pre-trial conference [19] on May 27, 1996 show that the
exhibits presented by both parties were "marked, offered and admitted" during the pre-
trial. This fact coupled with the manifestation of the parties during the pre-trial that the
sole issue to be resolved was one of law the interpretation of the provisions of
the purchase and sale agreement which was adopted by the parties as their common
exhibit show that the trial court did not commit an abuse of discretion.

The conclusion that there was no abuse of discretion on the part of the trial court would
be the same even if it were to be assumed that a procedural mistake was committed
when it decided the case before the parties could formally offer their evidence. We have
held that where the court has jurisdiction and, having all the facts necessary for a
judgment, it renders a decision without holding any trial or hearing (where the parties
are allowed to present their respective evidence in support of their cause of action and
defense), such judgment cannot be assailed as having been rendered without or in
excess of jurisdiction nor rendered with grave abuse of discretion. [20]

In the matter of extrinsic fraud, the circumstances of this case do not establish its
existence.

Extrinsic fraud refers to any fraudulent act of the prevailing party in the litigation which is
committed outside of the trial of the case, whereby the unsuccessful party is prevented
from fully proving his case, by fraud or deception practiced on him by his opponent.
[21]
Fraud is regarded as extrinsic where it prevents a party from having a trial or from
presenting his entire case to the court, or where it operates upon matters pertaining not
to the judgment itself but to the manner in which it is procured. [22] The overriding
consideration when extrinsic fraud is alleged is that the fraudulent scheme of the
prevailing litigant prevented a party from having his day in court. [23]

The Republic has not proven, or even alleged, that "G" Holdings practiced deceit or
employed subterfuge on it, precluding it from fully and completely presenting its case to
the court. Since the prevailing party did not commit or participate in the commission of
fraud which prevented the other party from having his day in court, there was no reason
for the appellate court to annul the decision of the trial court.

The unfortunate predicament of the Republic was caused by the Solicitor General, its
own counsel. We have consistently ruled that, to render a judgment void, the fraud must
be committed by the adverse party and not by one's own counsel. [24]

While the Republic or the government is usually not estopped by the mistake or error on
the part of its officials or agents, [25] the Republic cannot now take refuge in the rule as it
does not afford a blanket or absolute immunity. Our pronouncement in Republic v. Court
of Appeals[26] is instructive: the Solicitor General may not be excused from its
shortcomings by invoking the doctrine as if it were some magic incantation that could
benignly, if arbitrarily, condone and erase its errors.

Here, no fault had been ascribed to "G" Holdings and the proceedings in the trial court
were proper. The judgment has already attained finality as a result of the fault and
inaction of the Solicitor General. This was aggravated by the fact that this petition was
filed by those who had no authority to do so.

Litigation should end and terminate sometime and somewhere. [27] It is essential to an
effective and efficient administration of justice that, once a judgment has become final,
the winning party should not be deprived of the fruits of the verdict. [28] Courts must
therefore guard against any scheme calculated to bring about that undesirable result.
[29]
Thus, it is only proper for this Court to now write finis to this decade-old controversy.

WHEREFORE, the petition is hereby DENIED. The December 21, 1999 resolution of
the Court of Appeals in CA-G.R. SP No. 53517 is AFFIRMED.

Costs against petitioner.

SO ORDERED.
[2]
Pursuant to RA 8758, the term of existence of the APT expired on December 31,
2000. (Section 1). Upon the expiration of the term of the APT, its powers, functions,
duties and responsibilities, all properties, real or personal assets, equipment and
records, as well as its obligations and liabilities, were transformed to the National
Government. (Section 3). Further, its financial assets were transferred for disposition by
the President of the Philippines to a trust department of the appropriate government
financial institution. (Section 1).
 SECOND DIVISION
[ G.R. No. 173559, January 07, 2013 ]
LETICIA DIONA, REPRESENTED BY HER ATTORNEY-IN-FACT, MARCELINA
DIONA, PETITIONER, VS. SONNY A. BALANGUE, ROMEO A. BALANGUE,
REYNALDO A. BALANGUE, AND ESTEBAN A. BALANGUE, JR., RESPONDENTS.

DECISION
DEL CASTILLO, J.:
The grant of a relief neither sought by the party in whose favor it was given nor
supported by the evidence presented violates the opposing partys right to due process
and may be declared void ab initio in a proper proceeding.

This Petition for Review on Certiorari[1] assails the November 24, 2005 Resolution [2] of
the Court of Appeals (CA) issued in CA-G.R. SP No. 85541 which granted the Petition
for Annulment of Judgment [3] filed by the respondents seeking to nullify that portion of
the October 17, 2000 Decision [4] of the Regional Trial Court (RTC), Branch 75,
Valenzuela City awarding petitioner 5% monthly interest rate for the principal amount of
the loan respondents obtained from her.

This Petition likewise assails the CAs June 26, 2006 Resolution [5] denying petitioners
Motion for Reconsideration.

Factual Antecedents

The facts of this case are simple and undisputed.

On March 2, 1991, respondents obtained a loan of P45,000.00 from petitioner payable

in six months and secured by a Real Estate Mortgage [6] over their 202-square meter
property located in Marulas, Valenzuela and covered by Transfer Certificate of Title
(TCT) No. V-12296.[7] When the debt became due, respondents failed to pay
notwithstanding demand. Thus, on September 17, 1999, petitioner filed with the RTC a
Complaint[8] praying that respondents be ordered:

(a) To pay [petitioner] the principal obligation of P45,000.00, with interest

thereon at the rate of 12% per annum, from 02 March 1991 until the full
obligation is paid.
(b) To pay [petitioner] actual damages as may be proven during the trial but shall
in no case be less than P10,000.00; P25,000.00 by way of attorneys fee, plus
P2,000.00 per hearing as appearance fee.
(c) To issue a decree of foreclosure for the sale at public auction of the
aforementioned parcel of land, and for the disposition of the proceeds [thereof]
in accordance with law, upon failure of the [respondents] to fully pay [petitioner]
within the period set by law the sums set forth in this complaint.
(d) Costs of this suit.

Other reliefs and remedies just and equitable under the premises are likewise prayed
for.[9] (Emphasis supplied)

Respondents were served with summons thru respondent Sonny A. Balangue (Sonny).
On October 15, 1999, with the assistance of Atty. Arthur C. Coroza (Atty. Coroza) of the
Public Attorneys Office, they filed a Motion to Extend Period to Answer. Despite the
requested extension, however, respondents failed to file any responsive pleadings.
Thus, upon motion of the petitioner, the RTC declared them in default and allowed
petitioner to present her evidence ex parte. [10]

Ruling of the RTC sought to be annulled.

In a Decision[11] dated October 17, 2000, the RTC granted petitioners Complaint. The
dispositive portion of said Decision reads:

WHEREFORE, judgment is hereby rendered in favor of the [petitioner], ordering the

[respondents] to pay the [petitioner] as follows:

a) the sum of FORTY FIVE THOUSAND (P45,000.00) PESOS, representing the

unpaid principal loan obligationplus interest at 5% per month [sic] reckoned from
March 2, 1991, until the same is fully paid;
b) P20,000.00 as attorneys fees plus cost of suit;
c) in the event the [respondents] fail to satisfy the aforesaid obligation, an order of
foreclosure shall be issued accordingly for the sale at public auction of the subject
 property covered by Transfer Certificate of Title No. V-12296 and the improvements
thereon for the satisfaction of the [petitioners] claim.

SO ORDERED.[12] (Emphasis supplied)

Subsequently, petitioner filed a Motion for Execution, [13] alleging that respondents did not
interpose a timely appeal despite receipt by their former counsel of the RTCs Decision
on November 13, 2000. Before it could be resolved, however, respondents filed a
Motion to Set Aside Judgment [14] dated January 26, 2001, claiming that not all of them
were duly served with summons. According to the other respondents, they had no
knowledge of the case because their co-respondent Sonny did not inform them about it.
They prayed that the RTCs October 17, 2000 Decision be set aside and a new trial be
conducted.

But on March 16, 2001, the RTC ordered [15] the issuance of a Writ of Execution to
implement its October 17, 2000 Decision. However, since the writ could not be
satisfied, petitioner moved for the public auction of the mortgaged property, [16] which the
RTC granted. [17] In an auction sale conducted on November 7, 2001, petitioner was the
only bidder in the amount of P420,000.00. Thus, a Certificate of Sale[18] was issued in
her favor and accordingly annotated at the back of TCT No. V-12296.

Respondents then filed a Motion to Correct/Amend Judgment and To Set Aside

Execution Sale[19] dated December 17, 2001, claiming that the parties did not agree in
writing on any rate of interest and that petitioner merely sought for a 12% per
annum interest in her Complaint. Surprisingly, the RTC awarded 5% monthly interest
(or 60% per annum) from March 2, 1991 until full payment. Resultantly, their
indebtedness inclusive of the exorbitant interest from March 2, 1991 to May 22, 2001
ballooned from P124,400.00 to P652,000.00.

In an Order[20] dated May 7, 2002, the RTC granted respondents motion and
accordingly modified the interest rate awarded from 5% monthly to 12% per annum.
Then on August 2, 2002, respondents filed a Motion for Leave To Deposit/Consign
Judgment Obligation[21] in the total amount of P126,650.00. [22]

Displeased with the RTCs May 7, 2002 Order, petitioner elevated the matter to the
CA via a Petition forCertiorari[23] under Rule 65 of the Rules of Court. On August 5,
2003, the CA rendered a Decision [24] declaring that the RTC exceeded its jurisdiction in
awarding the 5% monthly interest but at the same time pronouncing that the RTC
gravely abused its discretion in subsequently reducing the rate of interest to 12% per
annum. In so ruling, the CA ratiocinated:

Indeed, We are convinced that the Trial Court exceeded its jurisdiction when it granted
5% monthly interest instead of the 12% per annum prayed for in the complaint.
However, the proper remedy is not to amend the judgment but to declare that portion as
a nullity. Void judgment for want of jurisdiction is no judgment at all. It cannot be the
source of any right nor the creator of any obligation (Leonor vs. CA, 256 SCRA 69). No
legal rights can emanate from a resolution that is null and void (Fortich vs. Corona,
312 SCRA 751).

From the foregoing, the remedy of [the respondents] is to have the Court declare the
portion of the judgment providing for a higher interest than that prayed for as null and
void for want of or in excess of jurisdiction. A void judgment never acquire[s] finality and
any action to declare its nullity does not prescribe (Heirs of Mayor Nemencio Galvez
vs. CA, 255 SCRA 672).

WHEREFORE, foregoing premises considered, the Petition having merit, is

hereby GIVEN DUE COURSE. Resultantly, the challenged May 7, 2002 and September
5, 2000 orders of Public Respondent Court are herebyANNULLED and SET ASIDE for
having been issued with grave abuse of discretion amounting to lack or in excess of
jurisdiction. No costs.

SO ORDERED.[25] (Emphases in the original; italics supplied.)

Proceedings before the Court of Appeals

Taking their cue from the Decision of the CA in the special civil action for certiorari,
respondents filed with the same court a Petition for Annulment of Judgment and
Execution Sale with Damages.[26] They contended that the portion of the RTC Decision
granting petitioner 5% monthly interest rate is in gross violation of Section 3(d) of Rule 9
of the Rules of Court and of their right to due process. According to respondents, the
loan did not carry any interest as it was the verbal agreement of the parties that in lieu
thereof petitioners family can continue occupying respondents residential building
located in Marulas, Valenzuela for free until said loan is fully paid.

Ruling of the Court of Appeals

Initially, the CA denied due course to the Petition. [27] Upon respondents motion,
however, it reinstated and granted the Petition. In setting aside portions of the RTCs
October 17, 2000 Decision, the CA ruled that aside from being unconscionably
excessive, the monthly interest rate of 5% was not agreed upon by the parties and that
petitioners Complaint clearly sought only the legal rate of 12% per annum. Following
the mandate of Section 3(d) of Rule 9 of the Rules of Court, the CA concluded that the
awarded rate of interest is void for being in excess of the relief sought in the Complaint.
It ruled thus:

WHEREFORE, [respondents] motion for reconsideration is GRANTED and our

resolution dated October 13, 2004 is, accordingly, REVERSED and SET ASIDE. In lieu
thereof, another is entered ordering the ANNULMENT OF:

(a) public respondents impugned October 17, 2000 judgment, insofar as it awarded 5%
monthly interest in favor of [petitioner]; and

(b) all proceedings relative to the sale at public auction of the property titled in
[respondents] names under Transfer Certificate of Title No. V-12296 of the Valenzuela
registry.

The judgment debt adjudicated in public respondents impugned October [17, 2000]
judgment is, likewise, orderedRECOMPUTED at the rate of 12% per annum from March
2, 1991. No costs.

SO ORDERED.[28] (Emphases in the original.)

Petitioner sought reconsideration, which was denied by the CA in its June 26, 2006
Resolution. [29]

Issues

Hence, this Petition anchored on the following grounds:

 I. THE HONORABLE COURT OF APPEALS COMMITTED GRAVE AND SERIOUS
ERROR OF LAW WHEN IT GRANTED RESPONDENTS PETITION FOR
ANNULMENT OF JUDGMENT AS A SUBSTITUTE OR ALTERNATIVE REMEDY OF
A LOST APPEAL.

II. THE HONORABLE COURT OF APPEALS COMMITTED GRAVE AND SERIOUS

ERROR AND MISAPPREHENSION OF LAW AND THE FACTS WHEN IT
GRANTED RESPONDENTS PETITION FOR ANNULMENT OF JUDGMENT OF
THE DECISION OF THE REGIONAL TRIAL COURT OF VALENZUELA, BRANCH
75 DATED OCTOBER 17, 2000 IN CIVIL CASE NO. 241-V-99, DESPITE THE FACT
THAT SAID DECISION HAS BECOME FINAL AND ALREADY EXECUTED
CONTRARY TO THE DOCTRINE OF IMMUTABILITY OF JUDGMENT.[30]

Petitioners Arguments

Petitioner claims that the CA erred in partially annulling the RTCs October 17, 2000
Decision. She contends that a Petition for Annulment of Judgment may be availed of
only when the ordinary remedies of new trial, appeal, petition for relief or other
appropriate remedies are no longer available through no fault of the claimant. In the
present case, however, respondents had all the opportunity to question the October 17,
2000 Decision of the RTC, but because of their own inaction or negligence they failed to
avail of the remedies sanctioned by the rules. Instead, they contented themselves with
the filing of a Motion to Set Aside Judgment and then a Motion to Correct/Amend
Judgment and to Set Aside Execution Sale.

Petitioner likewise argues that for a Rule 47 petition to prosper, the same must either be
based on extrinsic fraud or lack of jurisdiction. However, the allegations in respondents
Rule 47 petition do not constitute extrinsic fraud because they simply pass the blame to
the negligence of their former counsel. In addition, it is too late for respondents to pass
the buck to their erstwhile counsel considering that when they filed their Motion to
Correct/Amend Judgment and To Set Aside Execution Sale they were already assisted
by their new lawyer, Atty. Reynaldo A. Ruiz, who did not also avail of the remedies of
new trial, appeal, etc. As to the ground of lack of jurisdiction, petitioner posits that there
is no reason to doubt that the RTC had jurisdiction over the subject matter of the case
and over the persons of the respondents.
While conceding that the RTC patently made a mistake in awarding 5% monthly
interest, petitioner nonetheless invokes the doctrine of immutability of final judgment
and contends that the RTC Decision can no longer be corrected or modified since it had
long become final and executory. She likewise points out that respondents received a
copy of said Decision on November 13, 2000 but did nothing to correct the same. They
did not even question the award of 5% monthly interest when they filed their Motion to
Set Aside Judgment which they anchored on the sole ground of the RTCs lack of
jurisdiction over the persons of some of the respondents.

Respondents Arguments

Respondents do not contest the existence of their obligation and the principal amount
thereof. They only seek quittance from the 5% monthly interest or 60% per
annum imposed by the RTC. Respondents contend that Section (3)d of Rule 9 of the
Rules of Court is clear that when the defendant is declared in default, the court cannot
grant a relief more than what is being prayed for in the Complaint. A judgment which
transgresses said rule, according to the respondents, is void for having been issued
without jurisdiction and for being violative of due process of law.

Respondents maintain that it was through no fault of their own, but through the gross
negligence of their former counsel, Atty. Coroza, that the remedies of new trial, appeal
or petition for relief from judgment were lost. They allege that after filing a Motion to
Extend Period to Answer, Atty. Coroza did not file any pleading resulting to their being
declared in default. While the said lawyer filed on their behalf a Motion to Set Aside
Judgment dated January 26, 2001, he however took no steps to appeal from the
Decision of the RTC, thereby allowing said judgment to lapse into finality.
Citing Legarda v. Court of Appeals,[31] respondents aver that clients are not always
bound by the actions of their counsel, as in the present case where the clients are to
lose their property due to the gross negligence of their counsel.

With regard to petitioners invocation of immutability of judgment, respondents argue

that said doctrine applies only to valid and not to void judgments.

Our Ruling

The petition must fail.

We agree with respondents that the award of 5% monthly interest violated their right to
due process and, hence, the same may be set aside in a Petition for Annulment of
Judgment filed under Rule 47 of the Rules of Court.

Annulment of judgment under Rule 47;

an exception to the final judgment rule;
grounds therefor.

A Petition for Annulment of Judgment under Rule 47 of the Rules of Court is a remedy
granted only under exceptional circumstances where a party, without fault on his part,
has failed to avail of the ordinary remedies of new trial, appeal, petition for relief or other
appropriate remedies. Said rule explicitly provides that it is not available as a substitute
for a remedy which was lost due to the partys own neglect in promptly availing of the
same. The underlying reason is traceable to the notion that annulling final judgments
goes against the grain of finality of judgment. Litigation must end and terminate
sometime and somewhere, and it is essential to an effective administration of justice
that once a judgment has become final, the issue or cause involved therein should be
laid to rest.[32]

While under Section 2, Rule 47 [33] of the Rules of Court a Petition for Annulment of
Judgment may be based only on the grounds of extrinsic fraud and lack of jurisdiction,
jurisprudence recognizes lack of due process as additional ground to annul a judgment.
[34]
In Arcelona v. Court of Appeals,[35] this Court declared that a final and executory
judgment may still be set aside if, upon mere inspection thereof, its patent nullity can be
shown for having been issued without jurisdiction or for lack of due process of law.

Grant of 5% monthly interest is way beyond

the 12% per annum interest sought in the
Complaint and smacks of violation of due process.

It is settled that courts cannot grant a relief not prayed for in the pleadings or in excess
of what is being sought by the party. They cannot also grant a relief without first
ascertaining the evidence presented in support thereof. Due process considerations
require that judgments must conform to and be supported by the pleadings and
evidence presented in court. In Development Bank of the Philippines v. Teston,[36] this
Court expounded that:

Due process considerations justify this requirement. It is improper to enter an order

which exceeds the scope of relief sought by the pleadings, absent notice which affords
the opposing party an opportunity to be heard with respect to the proposed relief. The
fundamental purpose of the requirement that allegations of a complaint must provide the
measure of recovery is to prevent surprise to the defendant.

Notably, the Rules is even more strict in safeguarding the right to due process of a
defendant who was declared in default than of a defendant who participated in trial. For
instance, amendment to conform to the evidence presented during trial is allowed the
parties under the Rules. [37] But the same is not feasible when the defendant is declared
in default because Section 3(d), Rule 9 of the Rules of Court comes into play and limits
the relief that may be granted by the courts to what has been prayed for in the
Complaint. It provides:

(d) Extent of relief to be awarded. A judgment rendered against a party in default shall
not exceed the amount or be different in kind from that prayed for nor award
unliquidated damages.

The raison dtre in limiting the extent of relief that may be granted is that it cannot be
presumed that the defendant would not file an Answer and allow himself to be declared
in default had he known that the plaintiff will be accorded a relief greater than or
different in kind from that sought in the Complaint. [38] No doubt, the reason behind
Section 3(d), Rule 9 of the Rules of Court is to safeguard defendants right to due
process against unforeseen and arbitrarily issued judgment. This, to the mind of this
Court, is akin to the very essence of due process. It embodies the sporting idea of fair
play[39] and forbids the grant of relief on matters where the defendant was not given the
opportunity to be heard thereon.

In the case at bench, the award of 5% monthly interest rate is not supported both by the
allegations in the pleadings and the evidence on record. The Real Estate
Mortgage[40] executed by the parties does not include any provision on interest. When
petitioner filed her Complaint before the RTC, she alleged that respondents borrowed
from her the sum of FORTY-FIVE THOUSAND PESOS (P45,000.00), with interest
thereon at the rate of 12% per annum[41] and sought payment thereof. She did not
allege or pray for the disputed 5% monthly interest. Neither did she present evidence
nor testified thereon. Clearly, the RTCs award of 5% monthly interest or 60% per
annumlacks basis and disregards due process. It violated the due process requirement
because respondents were not informed of the possibility that the RTC may award 5%
monthly interest. They were deprived of reasonable opportunity to refute and present
controverting evidence as they were made to believe that the complainant [petitioner]
was seeking for what she merely stated in her Complaint.

Neither can the grant of the 5% monthly interest be considered subsumed by

petitioners general prayer for [o]ther reliefs and remedies just and equitable under the
premises x x x.[42] To repeat, the courts grant of relief is limited only to what has been
prayed for in the Complaint or related thereto, supported by evidence, and covered by
the partys cause of action. [43] Besides, even assuming that the awarded 5% monthly or
60% per annum interest was properly alleged and proven during trial, the same remains
unconscionably excessive and ought to be equitably reduced in accordance with
applicable jurisprudence. In Bulos, Jr. v. Yasuma,[44] this Court held:

In the case of Ruiz v. Court of Appeals, citing the cases of Medel v. Court of Appeals,
Garcia v. Court of Appeals, Spouses Bautista v. Pilar Development Corporation and the
recent case of Spouses Solangon v. Salazar, this Court considered the 3% interest per
month or 36% interest per annum as excessive and unconscionable. Thereby, the
Court, in the said case, equitably reduced the rate of interest to 1% interest per month
or 12% interest per annum. (Citations omitted)

It is understandable for the respondents not to contest the default order for, as alleged
in their Comment, it is not their intention to impugn or run away from their just and valid
obligation.[45] Nonetheless, their waiver to present evidence should never be construed
as waiver to contest patently erroneous award which already transgresses their right to
due process, as well as applicable jurisprudence.

Respondents former counsel was grossly

negligent in handling the case of his clients;
respondents did not lose ordinary remedies
of new trial, petition for relief, etc. through
their own fault.
Ordinarily, the mistake, negligence or lack of competence of counsel binds the client.
This is based on the rule that any act performed by a counsel within the scope of his
general or implied authority is regarded as an act of his client. A recognized exception
to the rule is when the lawyers were grossly negligent in their duty to maintain their
clients cause and such amounted to a deprivation of their clients property without due
process of law.[46] In which case, the courts must step in and accord relief to a client
who suffered thereby. [47]

The manifest indifference of respondents former counsel in handling the cause of his
client was already present even from the beginning. It should be recalled that after filing
in behalf of his clients a Motion to Extend Period to Answer, said counsel allowed the
requested extension to pass without filing an Answer, which resulted to respondents
being declared in default. His negligence was aggravated by the fact that he did not
question the awarded 5% monthly interest despite receipt of the RTC Decision on
November 13, 2000.[48] A simple reading of the dispositive portion of the RTC Decision
readily reveals that it awarded exorbitant and unconscionable rate of interest. Its
difference from what is being prayed for by the petitioner in her Complaint is so blatant
and very patent. It also defies elementary jurisprudence on legal rate of interests. Had
the counsel carefully read the judgment it would have caught his attention and
compelled him to take the necessary steps to protect the interest of his client. But he
did not. Instead, he filed in behalf of his clients a Motion to Set Aside Judgment [49] dated
January 26, 2001 based on the sole ground of lack of jurisdiction, oblivious to the fact
that the erroneous award of 5% monthly interest would result to his clients deprivation
of property without due process of law. Worse, he even allowed the RTC Decision to
become final by not perfecting an appeal. Neither did he file a petition for relief
therefrom. It was only a year later that the patently erroneous award of 5% monthly
interest was brought to the attention of the RTC when respondents, thru their new
counsel, filed a Motion to Correct/Amend Judgment and To Set Aside Execution Sale.
Even the RTC candidly admitted that it made a glaring mistake in directing the
defendants to pay interest on the principal loan at 5% per month which is very different
from what was prayed for by the plaintiff. [50]

A lawyer owes entire devotion to the interest of his client, warmth and zeal in the
maintenance and defense of his rights and the exertion of his utmost learning and
ability, to the end that nothing can be taken or withheld from his client except in
accordance with the law.[51] Judging from how respondents former counsel handled the
cause of his clients, there is no doubt that he was grossly negligent in protecting their
rights, to the extent that they were deprived of their property without due process of law.

In fine, respondents did not lose the remedies of new trial, appeal, petition for relief and
other remedies through their own fault. It can only be attributed to the gross negligence
of their erstwhile counsel which prevented them from pursuing such remedies. We
cannot also blame respondents for relying too much on their former counsel. Clients
have reasonable expectations that their lawyer would amply protect their interest during
the trial of the case.[52] Here, [r]espondents are plain and ordinary people x x x who are
totally ignorant of the intricacies and technicalities of law and legal procedures. Being
so, they completely relied upon and trusted their former counsel to appropriately act as
their interest may lawfully warrant and require. [53]

As a final word, it is worth noting that respondents principal obligation was only
P45,000.00. Due to their former counsels gross negligence in handling their cause,
coupled with the RTCs erroneous, baseless, and illegal award of 5% monthly interest,
they now stand to lose their property and still owe petitioner a large amount of money.
As aptly observed by the CA:

x x x If the impugned judgment is not, therefore, rightfully nullified, petitioners will not
only end up losing their property but will additionally owe private respondent the sum of
P232,000.00 plus the legal interest said balance had, in the meantime, earned. As a
court of justice and equity, we cannot, in good conscience, allow this unconscionable
situation to prevail.[54]

Indeed, this Court is appalled by petitioners invocation of the doctrine of immutability of

judgment. Petitioner does not contest as she even admits that the RTC made a glaring
mistake in awarding 5% monthly interest. [55] Amazingly, she wants to benefit from such
erroneous award. This Court cannot allow this injustice to happen.

WHEREFORE, the instant Petition is hereby DENIED and the assailed November 24,
2005 and June 26, 2006 Resolutions of the Court of Appeals in CA-G.R. SP No. 85541
are AFFIRMED.

SO ORDERED.
 THIRD DIVISION

[ G.R. NO. 142628, February 06, 2007 ]

SPRINGFIELD DEVELOPMENT CORPORATION, INC. AND HEIRS OF PETRA

CAPISTRANO PIIT, PETITIONERS, VS. HONORABLE PRESIDING JUDGE OF
REGIONAL TRIAL COURT OF MISAMIS ORIENTAL, BRANCH 40, CAGAYAN DE
ORO CITY, DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD
(DARAB), DAR REGION X DIRECTOR, ROSALIO GAMULO, FORTUNATO TELEN,
EMERITA OLANGO, THERESA MONTUERTO, DOMINGO H. CLAPERO, JOEL U.
LIM, JENEMAIR U. POLLEY, FIDELA U. POLLEY, JESUS BATUTAY, NICANOR UCAB,
EMERIA U. LIM, EMILITO CLAPERO, ANTONINA RIAS, AURILLIO ROMULO, ERWIN
P. CLAPERO, EVELITO CULANGO, VILMA/CRUISINE ALONG, EFREN EMATA,
GREGORIO CABARIBAN, AND SABINA CANTORANA, RESPONDENTS.

DECISION

AUSTRIA-MARTINEZ, J.:

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of
Court. The principal issue presented for resolution is whether the Regional Trial Court
(RTC) has jurisdiction to annul final judgment of the Department of Agrarian Reform
Adjudication Board (DARAB).

The antecedent facts:

Petra Capistrano Piit previously owned Lot No. 2291 located in Cagayan de Oro City
which measured 123,408 square meters under Transfer Certificate of Title No. T-62623.
Springfield Development Corporation, Inc. (Springfield) bought Lot No. 2291-C with an
area of 68,732 square meters, and Lot No. 2291-D with an area of 49,778 square
meters.[1] Springfield developed these properties into a subdivision project called Mega
Heights Subdivision.[2]
On May 4, 1990, the Department of Agrarian Reform (DAR), through its Municipal
Agrarian Reform Officer, issued a Notice of Coverage, [3] placing the property under the
coverage of Republic Act (R.A.) No. 6657 or the Comprehensive Agrarian Reform Law
of 1988. There being an opposition from the heirs of Petra Piit, the case was docketed
as DARAB Case No. X-305. On August 27, 1991, DARAB Provincial Adjudicator Abeto
A. Salcedo, Jr. rendered a decision declaring the nature of the property as residential
and not suitable for agriculture. [4] The Regional Director filed a notice of appeal, which
the Provincial Adjudicator disallowed for being pro forma and frivolous. [5] The decision
became final and executory[6] and Springfield proceeded to develop the property.[7]

The DAR Regional Director then filed a petition for relief from judgment of the DARAB
Decision, docketed as DARAB Case No. 0555. In its Decision dated October 5, 1995,
the DARAB granted the petition and gave due course to the Notice of Coverage. It also
directed the Municipal Agrarian Reform Office to proceed with the documentation,
acquisition, and distribution of the property to the true and lawful beneficiaries. [8]

The DARAB also issued an Order dated May 22, 1997, ordering the heirs of Piit and
Springfield to pay the farmer-beneficiaries the amount of Twelve Million, Three Hundred
Forty Thousand, Eight Hundred Pesos (P12,340,800.00), corresponding to the value of
the property since the property has already been developed into a subdivision.

On June 13, 1997, Springfield and the heirs of Piit (petitioners) filed with the RTC of
Cagayan de Oro City, Branch 40, a petition for annulment of the DARAB Decision dated
October 5, 1995 and all its subsequent proceedings. Petitioners contend that the
DARAB decision was rendered without affording petitioners any notice and hearing. [9]

On motion filed by the farmer-beneficiaries, the RTC issued an Order dated June 25,
1997, dismissing the case for lack of jurisdiction. [10]

On July 2, 1997, petitioners filed with the Court of Appeals (CA) a special civil action
for certiorari, mandamus, and prohibition with prayer for the issuance of writ of
preliminary injunction and/or temporary restraining order, docketed as CA-G.R. SP No.
44563.[11] Petitioners alleged that the RTC committed grave abuse of discretion when it
ruled that the annulment of judgment filed before it is actually an action for certiorari in a
different color. According to petitioners, what it sought before the RTC is an annulment
of the DARAB Decision and not certiorari, as the DARAB Decision is void ab initio for
having been rendered without due process of law.[12]

In the assailed Decision[13] dated July 16, 1998, the CA dismissed the petition for lack of
merit, ruling that the RTC does not have jurisdiction to annul the DARAB Decision
because it is a co-equal body.[14]

However, on January 12, 1999, the CA ordered the elevation of the DARAB records
before it, declaring that it "overlooked the fact that petitioners likewise applied for a writ
of prohibition against the enforcement of the DARAB decision which they claim to be
patently void."[15] Forwarded to the CA were the records of the original case filed with
the DARAB-Region X, and it appearing that the petition for relief from judgment and its
pertinent records were forwarded to the DARAB Central Office, the CA issued another
Resolution on December 20, 1999,[16] requiring the DARAB Central Office to forward the
records of the case. But after receipt of the records, the CA simply denied petitioners'
motion for reconsideration per Resolution [17] dated February 23, 2000 without
specifically resolving the issues raised concerning the prayer for a writ of prohibition.

Hence, the present petition on the following grounds:

THE COURT OF APPEALS COMMITTED A CLEAR ERROR OF LAW IN APPLYING

THE PRINCIPLE OF JUDICIAL STABILITY TO JUSTIFY ITS CONCLUSION
DIVESTING THE REGIONAL TRIAL COURT OF ITS JURISDICTION VESTED BY LAW
OVER CASES WHERE THE EXCLUSIVE JURISDICTION WAS NOT EXPRESSLY
GRANTED TO ANY OTHER COURTS [SIC] OR TRIBUNAL, IN EFFECT, MODIFYING
THE APPLICABLE LAW ON THE MATTER.

II

THE COURT OF APPEALS IRREGULARLY DISMISSED PETITIONERS' MOTION

FOR RECONSIDERATION AFTER IT HAD RESOLVED TO ENTERTAIN
PETITIONERS' PETITION FOR PROHIBITION AND TO REVIEW THE DARAB
PROCEEDINGS, THEREBY DEPARTING FROM THE USUAL COURSE OF JUDICIAL
PROCEEDINGS.
III

THE HONORABLE SUPREME COURT, BEING THE HIGHEST TEMPLE OF RIGHTS,

AND TO AVOID SERIOUS MISCARRIAGE OF JUSTICE AND NEEDLESS DELAYS, IS
MOST RESPECTFULLY URGED TO TAKE COGNIZANCE OF THE PETITION FILED
IN CA-G.R. SP No. 44563 IN THE EXERCISE OF ITS CONCURRENT JURISDICTION,
AS IF THE PETITION WAS ORIGINALLY LODGED BEFORE IT.[18]

Petitioners argue that under Batas Pambansa (B.P.) Blg. 129, there is no provision that
vests with the CA jurisdiction over actions for annulment of DARAB judgments.
Petitioners, however, contend that the RTC may take cognizance of the annulment case
since Section 19 of B.P. Blg. 129 vests the RTC with general jurisdiction and an action
for annulment is covered under such general jurisdiction. According to petitioners, "this
is but a logical consequence of the fact that no other courts were expressly given the
jurisdiction over such actions."[19] Petitioners further argue that the CA was in error
when it summarily ignored their application for a writ of prohibition, as it was necessary
to restrain the DARAB from enforcing its void decision; and even if the DARAB decision
was valid, the writ of prohibition could have enjoined the execution of the DARAB
decision since there have been changes which will make the execution unjust and
inequitable.

In their Joint-Comments, the farmer-beneficiaries and the DARAB (respondents) refute

petitioners' allegation that they were not afforded due process in the DARAB
proceedings, stating that petitioners were impleaded as a party thereto, and in fact, they
attended some of the hearings although their counsel was absent. Respondents also
adopt the CA's ruling that the RTC is not vested with any jurisdiction to annul the
DARAB decision.

As stated at the outset, the main issue in this case is whether the RTC has jurisdiction
to annul a final judgment of the DARAB.

Note must be made that the petition for annulment of the DARAB decision was filed with
the RTC on June 13, 1997, before the advent of the 1997 Rules of Civil Procedure,
which took effect on July 1, 1997. Thus, the applicable law is B.P. Blg. 129 or the
Judiciary Reorganization Act of 1980, enacted on August 10, 1981.
It is also worthy of note that before the effectivity of B.P. Blg. 129, a court of first
instance has the authority to annul a final and executory judgment rendered by another
court of first instance or by another branch of the same court. This was the Court's
ruling in Dulap v. Court of Appeals.[20] Yet, in subsequent cases, [21] the Court held that
the better policy, as a matter of comity or courteous interaction between courts of first
instance and the branches thereof, is for the annulment cases to be tried by the same
court or branch which heard the main action.

The foregoing doctrines were modified in Ngo Bun Tiong v. Sayo,[22] where the Court
expressed that pursuant to the policy of judicial stability, the doctrine of non-interference
between concurrent and coordinate courts should be regarded as highly important in the
administration of justice whereby the judgment of a court of competent jurisdiction may
not be opened, modified or vacated by any court of concurrent jurisdiction.

With the introduction of B.P. Blg. 129, [23] the rule on annulment of judgments was
specifically provided in Section 9(2), which vested in the then Intermediate Appellate
Court (now the CA) the exclusive original jurisdiction over actions for annulment of
judgments of RTCs. Sec. 9(3) of B.P. Blg. 129 also vested the CA with "exclusive
appellate jurisdiction over all final judgments, decisions, resolutions, orders, or awards
of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or
commissions, except those falling within the appellate jurisdiction of the Supreme Court
in accordance with the Constitution, the provisions of this Act, and of sub-paragraph (1)
of the third paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the
Judiciary Act of 1948." As provided in paragraph 16 of the Interim Rules and Guidelines
implementing B.P. Blg. 129, the quasi-judicial bodies whose decisions are exclusively
appealable to the CA are those, which under the law, R.A. No. 5434, [24] or its enabling
acts, are specifically appealable to the CA.

Significantly, B.P. Blg. 129 does not specifically provide for any power of the RTC to
annul judgments of quasi-judicial bodies. However, in BF Northwest Homeowners
Association, Inc. v. Intermediate Appellate Court,[25] the Court ruled that the RTCs have
jurisdiction over actions for annulment of the decisions of the National Water Resources
Council, which is a quasi-judicial body ranked with inferior courts, pursuant to its original
jurisdiction to issue writs of certiorari, prohibition, and mandamus, under Sec. 21(1) of
B.P. Blg. 129, in relation to acts or omissions of an inferior court. This led to the
conclusion that despite the absence of any provision in B.P. Blg. 129, the RTC had the
power to entertain petitions for annulment of judgments of inferior courts and
administrative orquasi-judicial bodies of equal ranking. This is also in harmony with
the "pre-B.P. Blg. 129" rulings of the Court recognizing the power of a trial court (court of
first instance) to annul final judgments. [26] Hence, while it is true, as petitioners contend,
that the RTC had the authority to annul final judgments, such authority pertained only to
final judgments rendered by inferior courts and quasi-judicial bodies of equal ranking
with such inferior courts.

The foregoing statements beg the next question, i.e., whether the DARAB is a quasi-
judicial body with the rank of an inferior court such that the RTC may take
cognizance of an action for the annulments of its judgments. The answer is no.

The DARAB is a quasi-judicial body created by Executive Order Nos. 229 and 129-A.
R.A. No. 6657 delineated its adjudicatory powers and functions. The DARAB Revised
Rules of Procedure adopted on December 26, 1988 [27]specifically provides for the
manner of judicial review of its decisions, orders, rulings, or awards. Rule XIV, Section
1 states:

SECTION 1. Certiorari to the Court of Appeals. Any decision, order, award or ruling by
the Board or its Adjudicators on any agrarian dispute or on any matter pertaining to the
application, implementation, enforcement or interpretation of agrarian reform laws or
rules and regulations promulgated thereunder, may be brought within fifteen (15) days
from receipt of a copy thereof, to the Court of Appeals by certiorari, except as provided
in the next succeeding section. Notwithstanding an appeal to the Court of Appeals the
decision of the Board or Adjudicator appealed from, shall be immediately executory.

Further, the prevailing 1997 Rules of Civil Procedure, as amended, expressly provides
for an appeal from the DARAB decisions to the CA. [28]

The rule is that where legislation provides for an appeal from decisions of certain
administrative bodies to the CA, it means that such bodies are co-equal with the RTC, in
terms of rank and stature, and logically, beyond the control of the latter. [29]

Given that DARAB decisions are appealable to the CA, the inevitable conclusion is
that the DARAB is a co-equal body with the RTC and its decisions are beyond the
RTC's control. The CA was therefore correct in sustaining the RTC's dismissal of the
petition for annulment of the DARAB Decision dated October 5, 1995, as the RTC does
not have any jurisdiction to entertain the same.

This brings to fore the issue of whether the petition for annulment of the DARAB
judgment could be brought to the CA. As previously noted, Section 9(2) of B.P. Blg. 129
vested in the CA the exclusive original jurisdiction over actions for annulment of
judgments, but only those rendered by the RTCs. It does not expressly give the CA the
power to annul judgments of quasi-judicial bodies. Thus, in Elcee Farms, Inc. v.
Semillano,[30] the Court affirmed the ruling of the CA that it has no jurisdiction to entertain
a petition for annulment of a final and executory judgment of the NLRC, citing Section 9
of B.P. Blg. 129, as amended, which only vests in the CA "exclusive jurisdiction over
actions for annulment of judgments of Regional Trial Courts." This was reiterated
in Galang v. Court of Appeals,[31] where the Court ruled that that the CA is without
jurisdiction to entertain a petition for annulment of judgment of a final decision of the
Securities and Exchange Commission.

Recent rulings on similar cases involving annulments of judgments of quasi-judicial

bodies are also quite instructive on this matter.

In Cole v. Court of Appeals,[32] involving an annulment of the judgment of the HLURB

Arbiter and the Office of the President (OP), filed with the CA, the Court stated that,
"(U)nder Rule 47 of the Rules of Court, the remedy of annulment of judgment is
confined to decisions of the Regional Trial Court on the ground of extrinsic fraud and
lack of jurisdiction x x x." The Court further ruled, viz.

Although the grounds set forth in the petition for annulment of judgment are fraud and
lack of jurisdiction, said petition cannot prosper for the simple reason that the decision
sought to be annulled was not rendered by the Regional Trial Court but by an
administrative agency (HLU Arbiter and Office of the President), hence, not within
the jurisdiction of the Court of Appeals. There is no such remedy as annulment
of judgment of the HLURB or the Office of the President. Assuming arguendo that
the annulment petition can be treated as a petition for review under Rule 43 of the 1997
Rules of Civil Procedure, the same should have been dismissed by the Court of
Appeals, because no error of judgment was imputed to the HLURB and the Office of the
President. Fraud and lack of jurisdiction are beyond the province of petitions under
Rule 43 of the Rules of Court, as it covers only errors of judgment. A petition for
annulment of judgment is an initiatory remedy, hence no error of judgment can be the
subject thereof. Besides, the Arbiter and the Office of the President indisputably have
jurisdiction over the cases brought before them in line with our ruling in Francisco Sycip,
Jr. vs. Court of Appeals, promulgated on March 17, 2000, where the aggrieved
townhouse buyers may seek protection from the HLURB under Presidential Decree No.
957, otherwise known as "Subdivision and Condominium Buyers' Protective Decree." [33]
(Emphasis supplied)

In Macalalag v. Ombudsman,[34] the Court ruled that Rule 47 of the 1997 Rules of Civil
Procedure on annulment of judgments or final orders and resolutions covers "annulment
by the Court of Appeals of judgments or final orders and resolutions in civil actions
of Regional Trial Courts for which the ordinary remedies of new trial, appeal, petition for
relief or other appropriate remedies could no longer be availed of through no fault of the
petitioner." Thus, the Court concluded that judgments or final orders and resolutions of
the Ombudsman in administrative cases cannot be annulled by the CA, more so, since
The Ombudsman Act specifically deals with the remedy of an aggrieved party from
orders, directives and decisions of the Ombudsman in administrative disciplinary cases
only, and the right to appeal is not to be considered granted to parties aggrieved by
orders and decisions of the Ombudsman in criminal or non-administrative cases.

While these cases involve annulments of judgments under the 1997 Rules of Civil
Procedure, as amended, still, they still find application in the present case, as the
provisions of B.P. Blg. 129 and the 1997 Rules of Civil Procedure, as amended, on
annulment of judgments are identical.

Consequently, the silence of B.P. Blg. 129 on the jurisdiction of the CA to annul
judgments or final orders and resolutions of quasi-judicial bodies like the DARAB
indicates its lack of such authority.

Further, petitioners are also asking the Court to take cognizance of their prayer for the
issuance of a writ of prohibition, which they claim was not acted upon by the CA, citing
the Court's action in Fortich v. Corona[35] where the Court took cognizance of the petition
previously filed with the CA due to compelling reasons. The Court is not persuaded to
do so.

Fortich involved a 144-hectare land located at San Vicente, Sumilao, Bukidnon, owned
by the Norberto Quisumbing, Sr. Management and Development Corporation
(NQSRMDC), which was leased as a pineapple plantation to Del Monte Philippines, Inc.
for a period of 10 years. During the existence of the lease, the DAR placed the entire
144-hectare property under compulsory acquisition and assessed the land value at
P2.38 million. When the NQSRMDC/BAIDA (Bukidnon Agro-Industrial Development
Association) filed an application for conversion due to the passage of Resolution No. 6
by the Provincial Development Council of Bukidnon and Ordinance No. 24 by the
Sangguniang Bayan of Sumilao, Bukidnon, reclassifying the area from agricultural to
industrial/institutional, the same was disapproved by the DAR Secretary and instead,
the property was placed under the compulsory coverage of Comprehensive Agrarian
Reform Program for distribution to all qualified beneficiaries. This prompted Governor
Carlos O. Fortich of Bukidnon to file an appeal with the OP, while NQSRMDC filed with
the CA a petition for certiorari, and prohibition with preliminary injunction.

The OP then issued a Decision dated March 29, 1996 reversing the DAR Secretary's
decision and approving the application for conversion. Executive Secretary Ruben D.
Torres denied the DAR's motion for reconsideration for having been filed beyond the
reglementary period of 15 days, and it was also declared that the OP Decision dated
March 29, 1996 had already become final and executory.

Because of this, the farmer-beneficiaries staged a hunger strike on October 9, 1997,

protesting the OP's decision. In order to resolve the strike, the OP issued a so-called
"Win/Win" resolution on November 7, 1997, modifying the decision in that NQSRMDC's
application for conversion is approved only with respect to the approximately 44-hectare
portion of the land adjacent to the highway, as recommended by the Department of
Agriculture, while the remaining approximately 100 hectares traversed by an irrigation
canal and found to be suitable for agriculture shall be distributed to qualified farmer-
beneficiaries.

A petition for certiorari and prohibition under Rule 65 of the Revised Rules of
Court[36] was then filed with the Court, which was contested by the Office of the Solicitor
General on the ground that the proper remedy should have been to file a petition for
review directly with the CA in accordance with Rule 43 of the Revised Rules of Court.

In resolving the issue, the Court recognized the rule that the Supreme Court, CA and
RTC have original concurrent jurisdiction to issue a writ of certiorari, prohibition,
and mandamus. However, due to compelling reasons and in the interest of speedy
justice, the Court resolved to take primary jurisdiction over the petition in the interest of
speedy justice, after which the Court nullified the act of the OP in re-opening the case
and substantially modifying its March 29, 1996 Decision which had already become final
and executory, as it was in gross disregard of the rules and basic legal precept that
accord finality to administrative determinations.

It must be stressed at this point that the Court, as a rule, will not entertain direct resort
to it unless the redress desired cannot be obtained in the appropriate courts, and
exceptional and compelling circumstances, such as cases of national interest and of
serious implications, justify the availment of the extraordinary remedy of writ
ofcertiorari, prohibition, or mandamus calling for the exercise of its primary jurisdiction.
[37]
The Court finds no compelling circumstances in this case to warrant a relaxation of
the foregoing rule. The Fortich case is not analogous with the present case such that
the Court is not bound to abandon all rules, take primary jurisdiction, and resolve the
merits of petitioners' application for a writ of prohibition.

In the present case, the assailed DARAB Decision dated October 5, 1995 granting the
petition for relief from judgment and giving due course to the Notice of Coverage was
made pursuant to a petition for relief from judgment filed by the DAR, albeit petitioners
are contesting the validity of the proceedings held thereon. On the other hand,
in Fortich, the OP's "Win/Win" resolution dated November 7, 1997 was made motu
proprio, as a result of the hunger strike staged by the farmer-beneficiaries.

Further, the OP's "Win/Win" Resolution dated November 7, 1997 in the Fortich case is a
patently void judgment since it was evident that there was already an existing final and
executory OP Decision dated March 29, 1996. In this case, the assailed DARAB
Decision dated October 5, 1995 appears to be regular on its face, and for its alleged
nullity to be resolved, the Court must delve into the records of the case in order to
determine the validity of petitioners' argument of lack of due process, absent notice and
hearing.

Moreover, the principle of hierarchy of courts applies generally to cases involving factual
questions. As it is not a trier of facts, the Court cannot entertain cases involving factual
issues.[38] The question of whether the DARAB Decision dated October 5, 1995 is null
and void and enforceable against petitioners for having been rendered without affording
petitioners due process is a factual question which requires a review of the records of
this case for it to be judiciously resolved.

The Court notes that the CA, indeed, failed to resolve petitioners' prayer for the
issuance of the writ of prohibition, which, significantly, focuses on the alleged nullity of
the DARAB Decision dated October 5, 1995. On this score, the CA found that the
application for the issuance of the writ of prohibition was actually a collateral attack on
the validity of the DARAB decision. But, a final and executory judgment may be set
aside in three ways;[39] and a collateral attack, whereby in an action to obtain a different
relief, an attack on the judgment is nevertheless made as an incident thereof, [40] is one
of these. This tenet is based upon a court's inherent authority to expunge void acts
from its records.[41] Despite recognizing the need to resolve petitioners' application for
the writ of prohibition in its Resolution dated January 12, 1999, the CA nonetheless
summarily denied petitioners' motion for reconsideration in its Resolution dated
February 23, 2000,[42] leaving the matter hanging and unresolved.

At first, the Court considered resolving the merits of petitioners' motion for
reconsideration concerning their application for a writ of prohibition against enforcing the
DARAB Decision dated October 5, 1995. Thus, in a Resolution dated June 5, 2006,
the Court directed the CA to transmit the records of DARAB Case No. 0555, which was
previously required by the CA to be forwarded to it per Resolution dated December 20,
1999.[43] However, as of even date, the CA has not complied with the Court's
Resolution. Withal, upon re-examination of the issues involved in this case, the Court
deems it more judicious to remand this case to the CA for immediate resolution of
petitioners' motion for reconsideration, re: their application for the writ of prohibition.

Moreover, the radical conflict in the findings of the Provincial Adjudicator and the
DARAB as regards the nature of the subject property necessitates a review of the
present case. In this regard, the CA is in a better position to fully adjudicate the case for
it can delve into the records to determine the probative value of the evidence supporting
the findings of the Provincial Adjudicator and of the DARAB. In addition, the CA is
empowered by its internal rules to require parties to submit additional documents, as it
may find necessary to promote the ends of substantial justice, and further order the
transmittal of the proper records for it to fully adjudicate the case. After all, it is an
avowed policy of the courts that cases should be determined on the merits, after full
opportunity to all parties for ventilation of their causes and defenses, rather than on
technicality or some procedural imperfections. In that way, the ends of justice would be
served better.[44]

WHEREFORE, the petition is PARTLY GRANTED. This case is REMANDED to the

Court of Appeals which isDIRECTED to resolve petitioners' prayer for the issuance of
the writ of prohibition in their Motion for Reconsideration.

Upon finality of this Decision, let the records be remanded forthwith to the Court of
Appeals.

No pronouncement as to costs.

SO ORDERED.
[24]
Entitled "An Act to Provide a Uniform Procedure for Appeals from the Court of
Agrarian Relations, the Secretary of Labor under Section 7 of Republic Act Numbered
Six Hundred Two, also known as 'The Minimum Wage Law,' the Department of Labor
under Section 23 of Republic Act Numbered Eight Hundred Seventy-Five, also known
as 'The Industrial Peace Act,' the Land Registration Commission, the Securities and
Exchange Commission, the Social Security Commission, the Civil Aeronautics Board,
the Patent Office, and the Agricultural Inventions Board, and for other purposes."
[27]
The DARAB Revised Rules of Procedure took effect on February 6, 1989, fifteen (15)
days after its publication in The Manila Standard and The Philippine Daily Inquirer.
[39]
First, a petition for relief from judgment under Rule 38 of the Rules of Court on
grounds of fraud, accident, mistake and excusable negligence filed within sixty (60)
days from the time petitioner learns of the judgment but not more than six (6) months
from the entry thereof; second, a direct action to annul the judgment on the ground of
extrinsic fraud; and third, a direct action for certiorari or collateral attack to annul a
judgment that is void upon its face or void by virtue of its own recitals. Arcelona v. Court
of Appeals, 345 Phil. 250, 263 (1997).
-Preliminary conference
-Oral argument
-Dismissal of appeal
-Judgment
-Motion for
reconsideration
-New trial
 -Prublicaiton of
judgement and final
resolution

PROCEDURE IN
THE SUPREME
COURT
RULE 56
 - Original Cases
- Appealed cases

EN BANC

[ G.R. No. 129742, September 16, 1998 ]

TERESITA G. FABIAN PETITIONER, VS. HON. ANIANO A. DESIERTO, IN HIS

CAPACITY AS OMBUDSMAN; HON. JESUS F. GUERRERO, IN HIS CAPACITY AS
DEPUTY OMBUDSMAN FOR LUZON; AND NESTOR V. AGUSTIN RESPONDENTS.

DECISION

REGALADO, J:

Petitioner has appealed to us by certiorari under Rule 45 of the Rules of Court from the
"Joint Order" issued by public respondents on June 18, 1997 in OMB-Adm. Case No. 0-
95-0411 which granted the motion for reconsideration of and absolved private
respondents from administrative charges for inter alia grave misconduct committed by
him as then Assistant Regional Director, Region IV-A, Department of Public Works and
Highways (DPWH).

It appears from the statement and counter-statement of facts of the parties that
petitioner Teresita G. Fabian was the major stockholder and president of PROMAT
Construction Development Corporation (PROMAT) which was engaged in the
construction business. Private respondents Nestor V. Agustin was the incumbent District
Engineering District (FMED) when he allegedly committed the offenses for which he
was administratively charged in the Office in the office of the Ombudsman.

Promat participated in the bidding for government construction project including those
under the FMED, and private respondent, reportedly taking advantage of his official
position, inveigled petitioner into an amorous relationship. Their affair lasted for some
time, in the course of which private respondents gifted PROMAT with public works
contracts and interceded for it in problems concerning the same in his office.

Later, misunderstanding and unpleasant incidents developed between the parties and
when petitioner tried to terminate their relationship, private respondent refused and
resisted her attempts to do so to the extent of employing acts of harassment,
intimidation and threats. She eventually filed the aforementioned administrative case
against him in a letter-complaint dated July 24, 1995.

The said complaint sought the dismissal of private respondent for violation of Section
19, Republic Act No. 6770 (Ombudsman Act of 1989) and Section 36 of Presidential
Decree No. 807 (Civil Service Decree), with an ancillary prayer for his preventive
suspension. For purposes of this case, the charges referred to may be subsumed under
the category of oppression, misconduct, and disgraceful or immoral conduct.

On January 31, 1996, Graft Investigator Eduardo R. Benitez issued a resolution finding
private respondents guilty of grave misconduct and ordering his dismissal from the
service with forfeiture of all benefits under the law. His resolution bore the approval of
Director Napoleon Baldrias and Assistant Ombudsman Abelardo Aportadera of their
office.

Herein respondent Ombudsman, in an Order dated February 26, 1996, approved the
aforesaid resolution with modifications, by finding private respondent guilty of
misconduct and meting out the penalty of suspension without pay for one year. After
private respondent moved for reconsideration, respondent Ombudsman discovered that
the former's new counsel had been his "classmate and close associate" hence he
inhibited himself. The case was transferred to respondent Deputy Ombudsman Jesus F.
Guerrero who, in the now challenged Joint Order of June 18, 1997, set aside the
February 26, 1997 Order of respondent Ombudsman and exonerated private
respondents from the administrative charges.

II

In the present appeal, petitioner argues that Section 27 of Republic Act No. 6770
(Ombudsman Act of 1989)[1]pertinently provides that -

In all administrative diciplinary cases, orders, directives or decisions of the Office of the
Ombudsman may be appealed to the Supreme Court by filing a petition
for certiorari within ten (10) days from receipt of the written notice of the order, directive
or decision or denial of the motion for reconsideration in accordance with Rule 45 of the
Rules of Court. (Emphasis supplied)

However, she points out that under Section 7, Rule III of Administrative Order No. 07
(Rules of Procedure of the office of the Ombudsman), [2] when a respondent is absolved
of the charges in an administrative proceeding decision of the ombudsman is final and
unappealable. She accordingly submits that the office of the ombudsman has no
authority under the law to restrict, in the manner provided in its aforesaid Rules, the
right of appeal allowed by Republic Act No. 6770, nor to limit the power of review of this
Court. Because of the aforecited provision in those Rules of Procedure, she claims that
she found it "necessary to take an alternative recourse under Rule 65 of the Rules of
Court, because of the doubt it creates on the availability of appeals under Rule 45 of the
Rules of Court.

Respondents filed their respective comments and rejoined that the Office of the
Ombudsman is empowered by the Constitution and the law to promulgate its own rules
of procedure. Section 13(8), Article XI of the 1987 Constitution provides, among others,
that the Office of the Ombudsman can "(p)romulgate its rules of procedure and exercise
such other powers or perform such functions or duties as may be provided by law."

Republic Act No. 6770 duly implements the Constitutional mandate with these relevant
provisions:

Sec. 14. Restrictions. - x x x No court shall hear any appeal or application for remedy
against the decision or findings of the Ombudsman except the Supreme Court on pure
question on law.
xxx

Sec. 18. Rules of Procedure. - (1) The Office of the Ombudsman shall promulgate its
own rules of procedure for the effective exercise or performance of its powers,
functions, and duties.

xxx

Sec. 23. Formal Investigation. - (1) Administrative investigations by the Office of the
Ombudsman shall be in accordance with its rules of procedure and consistent with the
due process. x x x

xxx

Sec. 27. Effectivity and Finality of Decisions. - All provisionary orders at the Office of the
Ombudsman are immediately effective and executory.

A motion for reconsideration of any order, directive or decision of the Office of the
Ombudsman must be filed within five (5) days after receipt of written notice shall be
entertained only on any of the following grounds:

xxx

Findings of fact by the Office of the Ombudsman when supported by substantial

evidence are conclusive. Any order, directive or decision imposing the penalty of public
censure or reprimand, suspension of not more than one month salary shall be final and
unappealable.

In all administrative disciplinary cases, orders, directives or decisions of the Office of the
Ombudsman may be appealed to the Supreme Court by filing a petition for certiorari
within ten (10) days from receipt of the written notice of the order, directive or decision
or denial of the motion for reconsideration in accordance with Rule 45 of the Rules of
Court.

The above rules may be amended or modified by the Office of the Ombudsman as the
interest of justice may require.
Respondents consequently contend that, on the foregoing constitutional and statutory
authority, petitioner cannot assail the validity of the rules of procedure formulated by the
Office of the Ombudsman governing the conduct of proceeding before it, including those
with respect to the availabity or non-avalability of appeal in administrative cases. Such
as Section 7, Rule III of Administrative Order No.07.

Respondents also question the propriety of petitioner's proposition that, although she
definitely prefaced her petition by categorizing the same as "an appeal by certiorari
under Rule 45 of the Rules of Court," she makes the aforequoted ambivalent statement
which in effect asks that, should the remedy under Rule 45 be unavailable, her petition
be treated in the alternative as an original action for certiorari under Rule 65. The
parties thereafter engage in a discussion of the differences between a petition for review
on certiorari under Rule 45 and a special civil action of certiorari under Rule 65.

Ultimately, they also attempt to review and rationalize the decision of this Court applying
Section 27 of Republic Act No. 6770 vis--vis Section 7, Rule III of Administrative Order
No. 07. As correctly pointed out by public respondents, Ocampo IV vs. Ombudsman, et
al.[3] and Young vs. Office of the Ombudsman, et al. [4] were original actions for certiorari
under Rule 65. Yabut vs. Office of the Ombudsman, et al. [5] was commenced by a
petition for review on certiorari under Rule 45. Then came Cruz, Jr. vs. People, et al.,
[6]
Olivas vs. Office of the Ombudsman, et al., [7] Olivarez vs. Sandiganbayan, et al.,
[8]
and Jao, et al. vs. Vasquez,[9] which were for certiorari, prohibition and/or mandamus
under Rule 65. Alba vs. Nitorreda, et al. [10] was initiated by a pleading unlikely
denominated as an "Appeal/Petition for Certiorari and/or Prohibition," with a prayer for
ancillary remedies, and ultimately followed by Constantino vs. Hon. Ombudsman
Aniano Desierto, et al.[11] which was a special civil action for certiorari.

Considering, however the view that this Court now takes of the case at bar and the
issues therein which will shortly be explained, it refrains from preemptively resolving the
controverted points raised by the parties on the nature and propriety of application of
the writ of certiorari when used as a mode of appeal or as the basis of a special original
action, and whether or not they may be resorted to concurrently or alternatively, obvious
though the answers thereto appear to be. Besides, some seemingly obiter statements
in Yabuts and Alba could bear reexamination and clarification. Hence, we will merely
observe and lay down the rule at this juncture that Section 27 of Republic Act No. 6770
is involved only whenever an appeal by certiorari under Rule 45 is taken from a decision
in an administrative diciplinary action. It cannot be taken into account where an original
action for certiorari under Rule 65 is resorted to as a remedy for judicial review, such as
from an incident in a criminal action.

III

After respondents' separate comments had been filed, the Court was intrigued by the
fact, which does appear to have been seriously considered before, that the
administrative liability of a public official could fall under the jurisdiction of both the Civil
Service Commission and the Office of the Ombudsman. Thus, the offenses imputed to
herein private respondent were based on both Section 19 of Republic Act. No. 6770 and
Section 36 of Presidential Decree No. 807. Yet, pursuant to the amendment of section
9, Batas Pambansa Blg. 129 by Republic Act No. 7902, all adjudications by Civil Service
Commission in administrative disciplinary cases were made appealable to the Court of
Appeals effective March 18, 1995, while those of the Office of the Ombudsman are
appealable to this Court.

It could thus be possible that in the same administrative case involving two
respondents, the proceedings against one could eventually have been elevated to the
Court of Appeals, while the other may have found its way to the Ombudsman from
which it is sought to be brought to this Court. Yet systematic and efficient case
management would dictate the consolidation of those cases in the Court of Appeals,
both for expediency and to avoid possible conflicting decisions.

Then there is the consideration that Section 30, Article VI of the 1987 Constitution
provides that "(n)o law shall be passed increasing the appellate indiction of the
Supreme Court as provided in this Constitution without its advice and consent," and that
Republic Act No. 6770, with its challenged Section 27, took effect on November 17,
1989, obviously in spite of that constitutional grounds must be raised by a party to the
case, neither of whom did so in this case, but that is not an inflexible rule, as we shall
explain.

Since the constitution is intended fort the observance of the judiciary and other
departments of the government and the judges are sworn to support its provisions, the
courts are not at liberty to overlook or disregard its commands or countenance evasions
thereof. When it is clear that a statute trangresses the authority vested in a legislative
body, it is the duty of the courts to declare that the constitution, and not the statute,
governs in a case before them for judgement. [12]

Thus, while courts will not ordinarily pass upon constitutional questions which are not
raised in the pleadings,[13]the rule has been recognized to admit of certain exceptions. It
does not preclude a court from inquiring into its own jurisdiction or compel it to enter a
judgement that it lacks jurisdiction to enter. If a statute on which a court's jurisdiction in a
proceeding depends is unconstitutional, the court has no jurisdiction in the proceeding,
and since it may determine whether or not it has jurisdiction, it necessarily follows that it
may inquire into the constitutionality of the statute. [14]

Constitutional question, not raised in the regular and orderly procedure in the trial are
ordinarily rejected unless the jurisdiction of the court below or that of the appellate court
is involved in which case it may be raised at any time or on the court's own motion.
[15]
The Court ex mero motu may take cognizance of lack of jurisdiction at any point in
the case where the fact is developed. [16] The court has a clearly recognized right to
determine its own jurisdiction in any proceeding. [17]

The foregoing authorities notwithstanding, the Court believed that the parties hereto
should be further heard on this constitutional question. Correspondingly, the following
resolution was issued on May 14, 1998, the material parts stating as follows:

The Court observes that the present petition, from the very allegations thereof, is "an
appeal by certiorari under Rule 45 of the Rules of Court from the 'Joint Order (Re:
Motion for Reconsideration)' issued in OMB-Adm. Case No. 0-95-0411, entitled 'Teresita
G. Fabian vs. Engr. Nestor V. Agustin, Asst. Regional Director, Region IV-A, EDSA,
Quezon City,' which absolved the latter from the administrative charges for grave
misconduct, among other."

It is further averred therein that the present appeal to this Court is allowed under
Section 27 of the Ombudsman Act of 1987 (R.A. No. 6770) and, pursuant thereto, the
Office of the Ombudsman issued its Rules of Procedure, Section 7 whereof is assailed
by petitioner in this proceeding. It will be recalled that R.A. No. 6770 was enacted on
November 17, 1989, with Section 27 thereof pertinently providing that all administrative
diciplinary cases, orders, directives or decisions of the Office of the Ombudsman may
be appealed to this Court in accordance with Rule 45 of the Rules of Court.
The Court notes, however, that neither the petition nor the two comments thereon took
into account or discussed the validity of the aforestated Section 27 of R.A. No. 8770 in
light of the provisions of Section 30, Article VI of the 1987 Constitution that "(n)o law
shall be passed increasing the appellate jurisdiction of the Supreme Court as provided
in this Constitution without its advise and consent."

The Court also invites the attention of the parties to its relevant ruling in First Lepanto
Ceramics, Inc. vs. The Court of Appeals , et al. (G.R. No. 110571, October 7, 1994, 237
SCRA 519) and the provisions of its former Circular No. 1-95,as now substantially
reproduced in Rule 43 of the 1997 revision of the Rules of Civil Procedure.

In view of the fact that the appellate jurisdiction of the Court is invoked and involved and
in this case, and the foregoing legal consideration appear to impugn the constitutionality
and validity of the grant of said appellate jurisdiction to it, the Court deems it necessary
that the parties be heard thereon and the issue be first resolved before conducting
further proceedings in this appellate review.

ACCORDINGLY, the Court Resolved to require the parties to Submit their position and
arguments on the matter subject of this resolution by filing their corresponding pleadings
within ten (10) days from notice hereof.
IV

The records do not show that the Office of the Solicitor General has complied with such
requirement, hence the Court dispenses with any submission it should have presented.
On the other hand, petitioner espouses the theory that the provision in Section 27 of
Republic Act No. 6770 which authorizes an appeal by certiorari to this Court of the
aforementioned adjudications of the Ombudsman is not violative of Section 30, Article
VI of the Constitution. She claims that what is proscribed is the passage of law
"increasing" the appellate jurisdiction of this Court "as provided in this Constitution," and
such appellate jurisdiction includes "all cases in which only an error or question of law is
involved." Since Section 5(2)(e), Article VIII of the Constitution authorizes this Court to
review, revise, reverse, modify, or affirm on appeal or certiorari the aforesaid final
judgement or orders "as the law or the Rules of Court may provide," said Section 27
does not increase this Court may provide," said section 27 does not increase this
Court's appellate jurisdiction since, by providing that the mode of appeal shall be by
petition for certiorari under Rule 45, then what may be raised therein are only questions
of law of which this Court already has of which this Court already has jurisdiction.

We are not impressed by this discourse. It overlooks the fact that by jurisprudential
developments over the years, this Court has allowed appeals by certiorari under Rule
45 in a substantial number of cases and instances even if questions of fact are directly
involved and have to be resolved by the appellate court. [18] Also, the very provision cited
by petitioner specifies that the appellate jurisdiction of this Court contemplated therein is
to be exercised over "final judgements and orders of lower courts," that is, the courts
composing the integrated judicial system. It does not include the quasi-judicial bodies or
agencies, hence whenever the legislature intends that the decisions or resolutions of
the quasi-judicial agency shall be reviewable by the Supreme Court or the Court of
Appeals, a specific provision to that effect is included in the law creating that quasi-
judicial agency and, for that matter, any special statutory court. No such provision on
appellate procedure is required for the regular courts of the integrated judicial system
because they are what are referred to and already provided for in Section 5, Article VIII
of the Constitution.

Apropos to the foregoing, and as correctly observed by private respondent, the revised
Rules of Civil Procedure[19]preclude appeals from quasi-judicial agencies to the
Supreme Court via a petition for review on certiorari under Rule 45. In the 1997 Rules of
Civil Procedure, Section 1 Rule 45, on "Appeal by Certiorari to the Supreme Court,"
explicitly states:

SECTION 1 . Filing of petition with Supreme Court. - A person desiring to appeal by

certiorari from a judgement or final order or Resolution of the Court of Appeals, the
Sandiganbayan, the Regional Trial Court or other court whenever authorized by
law, may file with the Supreme Court a verified petition for review on certiorari. The
petition shall raise only question of law which must be distinctly set forth. (Italics ours).

This differs from the former Rule 45 of the 1964 Rules of Court which made mention
only of the Court of Appeals, and had to be adopted in statutes creating and providing
for appeals from certain administrative or quasi-judicial agencies, whenever the purpose
was to restrict the scope of the appeal to questions of law. That intended limitation on
appellate review, as we have just discussed, was not fully subserved by recourse to the
former Rule 45 but, then, at that time there was no uniform rule on appeals from quasi-
judicial agencies.

Under the present Rule 45, appeals may be brought through a petition for review on
certiorari but only from judgments and final orders of the courts enumerated in Section 1
thereof. Appeals from judgments and final orders of quasi-judicial agencies[20] are now
required to be brought to the Court of Appeals on a verified petition for review, under the
requirements and conditions in Rule 43 which was precisely formulated and adopted to
provide for a uniform rule of appellate procedure for quasi-judicial agencies . [21]

It is suggested, however, that the provisions of Rule 43 should apply only to "ordinary"
quasi-judicial agencies, but not to the Office of the Ombudsman which is a "high
constitutional body." We see no reason for this distinction for, if hierarchical rank should
be a criterion, that proposition thereby disregards the fact that Rule 43 even includes
the Office of the President and the Civil Service Commission, although the latter is even
an independent constitutional commission, unlike the Office of the Ombudsman which is
a constitutionally-mandated but statutorily created body.

Regarding the misgiving that the review of the decision of the Office of the Ombudsman
by the Court of Appeals would cover questions of law, of fact or of both, we do not
perceive that as an objectionable feature. After all, factual controversies are usually
involved in administrative disciplinary actions, just like those coming from the Civil
Service, Commission, and the Court of Appeals as a trier of fact is better prepared than
this Court to resolve the same. On the other hand, we cannot have this situation
covered by Rule 45 since it now applies only to appeals from the regular courts. Neither
can we place it under Rule 65 since the review therein is limited to jurisdictional
questions.*

The submission that because this Court has taken cognizance of cases involving
Section 27 of Republic Act No. 6770, that fact may be viewed as "acquiescence" or
"acceptance" by it of the appellate jurisdiction contemplated in said Section 27, is
unfortunately too tenuous. The jurisdiction of a court is not of acquiescence as a matter
of fact but an issue of conferment as a matter of law. Besides, we have already
discussed the cases referred to, including the inaccuracies of some statements therein,
and we have pointed out the instances when Rule 45 is involved, hence covered by
Section 27 of Republic Act No. 6770 now under discussion, and when that provision
would not apply if it is a judicial review under Rule 65.

Private respondent invokes the rule that courts generally avoid having to decide a
constitutional question, especially when the case can be decided on other grounds. As a
general proposition that is correct. Here, however, there is an actual case susceptible of
judicial determination. Also, the constitutional question, at the instance of this Court,
was raised by the proper parties, although there was even no need for that because the
Court can rule on the matter sua sponte when its appellate jurisdiction is involved. The
constitutional question was timely raised, although it could even be raised any time
likewise by reason of the jurisdictional issue confronting the Court. Finally, the resolution
of the constitutional issue here is obviously necessary for the resolution of the present
case. [22]

It is, however, suggested that this case could also be decided on other grounds, short of
passing upon; the constitutional question. We appreciate the ratiocination of private
respondent but regret that we must reject the same. That private respondent could be
absolved of the charge because the decision exonerating him is final and unappealable
assumes that Section 7, Rule III of Administrative Order No. 07 is valid, but that is
precisely one of the issues here. The prevailing rule that the Court should not interfere
with the discretion of the Ombudsman in prosecuting or dismissing a complaint is not
applicable in this administrative case, as earlier explained. That two decisions rendered
by this Court supposedly imply the validity of the aforementioned Section 7 of Rule III is
precisely under review here because of some statements therein somewhat at odds
with settled rules and the decisions of this Court on the same issues, hence to invoke
the same would be to beg the question.

Taking all the foregoing circumstances in their true legal roles and effects, therefore,
Section 27 of Republic Act No. 6770 cannot validly authorize an appeal to this Court
from decisions of the Office of the Ombudsman in administrative disciplinary cases. It
consequently violates the proscription in Section 30, Article VI of the Constitution
against a law which increases the Appellate jurisdiction of this Court. No countervailing
argument has been cogently presented to justify such disregard of the constitutional
prohibition which, as correctly explained inFirst Leparto Ceramics, Inc. vs. The Court of
Appeals, el al. [23] was intended to give this Court a measure of control over cases
placed under its appellate Jurisdiction. Otherwise, the indiscriminate enactment of
legislation enlarging its appellate jurisdiction would unnecessarily burden the Court [24]

We perforce have to likewise reject the supposed inconsistency of the ruling in First
Lepanto Ceramics and some statements in Yabut and Alba, not only because of the
difference in the factual settings, but also because those isolated cryptic statements
in Yabut and Alba should best be clarified in the adjudication on the merits of this case.
By way of anticipation, that will have to be undertaken by the proper court of competent
jurisdiction.

Furthermore in addition to our preceding discussion on whether Section 27 of Republic

Act No. 6770 expanded the jurisdiction of this Court without its advice and consent,
private respondent's position paper correctly yields the legislative background of
Republic Act No. 6770. On September 26, 1989, the Conference Committee Report on
S.B. No. 453 and H.B. No. 13646, setting forth the new version of what would later be
Republic Act No. 6770, was approved on second reading by the House of
Representatives.[25] The Senate was informed of the approval of the final version of the
Act on October 2, 1989 [26] and the same was thereafter enacted into law by President
Aquino on November 17, 1989.

Submitted with said position paper is an excerpt showing that the Senate, in the
deliberations on the procedure for appeal from the Office of the Ombudsman to this
Court, was aware of the provisions of Section 30, Article III of the Constitution. It also
reveals that Senator Edgardo Angara, as a co-author and the principal sponsor of S.B.
No. 543 admitted that the said provision will expand this Court's jurisdiction, and that the
Committee on Justice and Human Rights had not consulted this Court on the matter,
thus:

INTERPELLATION OF SENATOR SHAHANI

xxx

Thereafter, with reference to Section 22(4) which provides that the decisions of the
Office of the Ombudsman may be appealed to the Supreme Court, in reply to Senator
Shahani's query whether the Supreme Court would agree to such provision in the light
of Section 30, Article VI of the Constitution which requires its advice and concurrence in
laws increasing its appellate jurisdiction, Senator Angara informed that the Committee
has not yet consulted the Supreme Court regarding the matter. He agreed that the
provision will expand the Supreme Court's jurisdiction by allowing appeals through
petitions for review, adding that they should be appeals on certiorari.[27]

There is no showing that even up to its enactment, Republic Act No. 6770 was ever
referred to this Court for its advice and consent .[28]

VI

As a consequence of our ratiocination that Section 27 of Republic Act No. 6770 should
be struck down as unconstitutional, and in line with the regulatory philosophy adopted in
appeals from quasi-judicial agencies in the 1997 Revised Rules of Civil Procedure,
appeals from decisions of the Office of the Ombudsman in administrative disciplinary
cases should be taken to the Court of Appeals under the provisions of Rule 43.

There is an intimation in the pleadings, however, that said Section 27 refers to appellate
jurisdiction which, being substantive in nature, cannot be disregarded by this Court
under its rule-making power, especially if it results in a diminution, increase or
modification of substantive rights. Obviously, however, where the law is procedural in
essence and purpose, the foregoing consideration would not pose a proscriptive issue
against the exercise of the rule-making power of this Court. This brings to fore the
question of whether Section 27 of Republic Act No. 6770 is substantive or procedural.

It will be noted that no definitive line can be drawn between those rules or statutes
which are procedural, hence within the scope of this Court's rule-making power, and
those which are substantive. In fact, a particular rule may be procedural in one context
and substantive in another.[29] It is admitted that what is procedural and what is
substantive is frequently a question of great difficulty. [30] It is not, however, an
insurmountable problem if a rational and pragmatic approach is taken within the context
of our own procedural and jurisdictional system.

In determining whether a rule prescribed by the Supreme Court, for the practice and
procedure of the lower courts, abridges, enlarges, or modifies any substantive right, the
test is whether the rule really regulates procedure, that is, the judicial process for
enforcing rights and duties recognized by substantive law and for justly administering
remedy and redress for a disregard or infraction of them. [31] If the rule takes away a
vested right, it is not procedural. If the rule creates a right such as the right to appeal, it
may be classified as a substantive matter; but if it operates as a means o implementing
an existing right then the rule deals merely with procedure. [32]

In the situation under consideration, a transfer by the Supreme Court, in the exercise of
its rule-making power, of pending cases involving a review of decisions of the Office of
the Ombudsman in administrative disciplinary actions to the Court of Appeals which
shall now be vested with exclusive appellate jurisdiction thereover, relates to procedure
only.[33] This is so because it is not the right to appeal of an aggrieved party which is
affected by the law. That right has been preserved. Only the procedure by which the
appeal is to be made or decided has been changed. The rationale for this is that litigant
has a vested right in a particular remedy, which may be changed by substitution without
impairing vested rights, hence he can have none in rules of procedure which relate to
the remedy.[34]

Furthermore, it cannot be said that transfer of appellate jurisdiction to the Court of

Appeals in this case is an act of creating a new right of appeal because such power of
the Supreme Court to transfer appeals to subordinate appellate courts is purely a
procedural and not a substantive power. Neither can we consider such transfer as
impairing a vested right because the parties have still a remedy and still a competent
tribunal to administer that remedy.[35]

Thus, it has been generally held that rules or statutes involving a transfer of cases from
one court to another, are procedural and remedial merely and that, as such, they are
applicable to actions pending at the time the statute went into effect [36] or, in the case at
bar, when its invalidity was declared. Accordingly, even from the standpoint of
jurisdiction ex hypothesi the validity of the transfer of appeals in said cases to the Court
of Appeals can be sustained.

WHEREFORE, Section 27 of Republic Act No. 6770 (Ombudsman Act of 1989),

together with Section 7, Rule III of Administrative Order No. 07 (Rules of Procedure of
the Office of the Ombudsman), and any other provision of law or issuance implementing
the aforesaid Act and insofar as they provide for appeals in administrative disciplinary
cases from the Office of the Ombudsman to the Supreme Court, are hereby
declared INVALID and of no further force and effect.

The instant petition is hereby referred and transferred to the Court of Appeals for final
disposition, with said petition to be considered by the Court of Appeals pro hac vice as a
petition for review under Rule 43, without prejudice to its requiring the parties to submit
such amended or supplemental pleadings and additional documents or records as it
may deem necessary and proper.

SO ORDERED.

PROVISIONAL
REMEDIES
RULES 57 to 61
 -PRELIMINARY
ATTACHMENT

THIRD DIVISION

[ G.R. NO. 123638, June 15, 2005 ]

INSULAR SAVINGS BANK, PETITIONER, VS. COURT OF APPEALS, JUDGE OMAR

U. AMIN, IN HIS CAPACITY AS PRESIDING JUDGE OF BRANCH 135 OF THE
REGIONAL TRIAL COURT OF MAKATI, AND FAR EAST BANK AND TRUST
COMPANY, RESPONDENTS.

DECISION

GARCIA, J.:

Thru this appeal via a petition for review on certiorari under Rule 45 of the Rules of
Court, petitioner Insular Savings Bank seeks to set aside the decision[1] dated
October 9, 1995 of the Court of Appeals in CA-G.R. SP No. 34876 and its resolution
dated January 24, 1996,[2] denying petitioners motion for reconsideration.
The assailed decision of October 9, 1995 cleared the Regional Trial Court (RTC) at
Makati, Branch 135, of committing, as petitioner alleged, grave abuse of discretion in
denying petitioners motion to discharge attachment by counter-bond in Civil Case No.
92-145, while the equally assailed resolution of January 24, 1996 denied petitioners
motion for reconsideration.

The undisputed facts are summarized in the appellate courts decision [3] under review,
as follows:

On December 11, 1991, respondent Bank [Far East Bank and Trust Company]
instituted Arbitration Case No. 91-069 against petitioner [Insular Savings Bank] before
the Arbitration Committee of the Philippine Clearing House Corporation [PCHC]. The
dispute between the parties involved three [unfunded] checks with a total value of
P25,200,000.00. The checks were drawn against respondent Bank and were presented
by petitioner for clearing. As respondent Bank returned the checks beyond the
reglementary period, [but after petitioners account with PCHC was credited with the
amount of P25,200,000.00] petitioner refused to refund the money to respondent Bank.
While the dispute was pending arbitration, on January 17, 1992, respondent Bank
instituted Civil Case No. 92-145 in the Regional Trial Court of Makati and prayed for the
issuance of a writ of preliminary attachment. On January 22, 1992, Branch 133 of the
Regional Trial Court of Makati issued an Order granting the application for preliminary
attachment upon posting by respondent Bank of an attachment bond in the amount of
P6,000,000.00. On January 27, 1992, Branch 133 of the Regional Trial Court of Makati
issued a writ of preliminary attachment for the amount of P25,200,000.00. During the
hearing on February 11, 1992 before the Arbitration Committee of the Philippine
Clearing House Corporation, petitioner and respondent Bank agreed to temporarily
divide between them the disputed amount of P25,200,000.00 while the dispute has not
yet been resolved. As a result, the sum of P12,600,000.00 is in the possession of
respondent Bank. On March 9, 1994, petitioner filed a motion to discharge attachment
by counter-bond in the amount of P12,600,000.00. On June 13, 1994, respondent
Judge issued the first assailed order denying the motion. On June 27, 1994,
petitioner filed a motion for reconsideration which was denied in the second
assailed order dated July 20, 1994 (Emphasis and words in bracket added).
From the order denying its motion to discharge attachment by counter-bond, petitioner
went to the Court of Appeals on a petition for certiorari thereat docketed as CA-G.R. SP
No. 34876, ascribing on the trial court the commission of grave abuse of discretion
amounting to lack of jurisdiction.

While acknowledging that [R]espondent Judge may have erred in his Order of June 13,
1994 that the counter-bond should be in the amount of P27,237,700.00, in that he
erroneously factored in, in arriving at such amount, unliquidated claim items, such as
actual and exemplary damages, legal interest, attorneys fees and expenses of
litigation, the CA, in the herein assailed decision dated October 9, 1995, nonetheless
denied due course to and dismissed the petition. For, according to the appellate court,
the RTCs order may be defended by, among others, the provision of Section 12 of Rule
57 of the Rules of Court, infra. The CA added that, assuming that the RTC erred on the
matter of computing the amount of the discharging counter-bond, its error does not
amount to grave abuse of discretion.

With its motion for reconsideration having been similarly denied, petitioner is now with
us, faulting the appellate court, as follows:

I. THE COURT OF APPEALS ERRED IN NOT RULING THAT THE PRINCIPAL

AMOUNT CLAIMED BY RESPONDENT BANK SHOULD BE THE BASIS FOR
COMPUTING THE AMOUNT OF THE COUNTER-BOND, FOR THE PRELIMINARY
ATTACHMENT WAS ISSUED FOR THE SAID AMOUNT ONLY.

II. THE COURT OF APPEALS ERRED IN NOT RULING THAT THE ARGUMENT THAT
THE AMOUNT OF THE COUNTER-BOND SHOULD BE BASED ON THE VALUE OF
THE PROPERTY ATTACHED CANNOT BE RAISED FOR THE FIRST TIME IN THE
COURT OF APPEALS.

III. THE COURT OF APPEALS ERRED IN RULING THAT THE AMOUNT OF THE
COUNTER-BOND SHOULD BE BASED ON THE VALUE OF THE PROPERTY
ATTACHED EVEN IF IT WILL RESULT IN MAKING THE AMOUNT OF THE
COUNTER-BOND EXCEED THE AMOUNT FOR WHICH PRELIMINARY
ATTACHMENT WAS ISSUED.
Simply put, the issue is whether or not the CA erred in not ruling that the trial court
committed grave abuse of discretion in denying petitioners motion to discharge
attachment by counter-bond in the amount of P12,600,000.00.

Says the trial court in its Order of June 13, 1994:

xxx (T)he counter-bond posted by [petitioner] Insular Savings Bank should include the
unsecured portion of [respondents] claim of P12,600,000.00 as agreed by means of
arbitration between [respondent] and [petitioner]; Actual damages at 25% percent per
annum of unsecured amount of claim from October 21, 1991 in the amount of
P7,827,500.00; Legal interest of 12% percent per annum from October 21, 1991 in the
amount of P3,805,200.00; Exemplary damages in the amount of P2,000,000.00; and
attorneys fees and expenses of litigation in the amount of P1,000,000.00 with a total
amount of P27,237,700.00 (Adlawan vs. Tomol, 184 SCRA 31 (1990).

Petitioner, on the other hand, argues that the starting point in computing the amount of
counter-bond is the amount of the respondents demand or claim only, in this case
P25,200,000.00, excluding contingent expenses and unliquidated amount of damages.
And since there was a mutual agreement between the parties to temporarily, but
equally, divide between themselves the said amount pending and subject to the final
outcome of the arbitration, the amount of P12,600,000.00 should, so petitioner argues,
be the basis for computing the amount of the counter-bond.

The Court rules for the petitioner.

The then pertinent provision of Rule 57 (Preliminary Attachment) of the Rules of Court
under which the appellate court issued its assailed decision and resolution, provides as
follows:

SEC. 12. Discharge of attachment upon giving counter-bond. At any time after an
order of attachment has been granted, the party whose property has been attached, . . .
may upon reasonable notice to the applicant, apply to the judge who granted the order
or to the judge of the court which the action is pending, for an order discharging the
attachment wholly or in part on the security given. The judge shall, after hearing, order
the discharge of the attachment if a cash deposit is made, or a counter-bond executed
to the attaching creditor is filed, on behalf of the adverse party, with the clerk or judge of
the court where the application is made in an amount equal to the value of the
property attached as determined by the judge, to secure the payment of any
judgment that the attaching creditor may recover in the action. x x x . Should such
counter-bond for any reason be found to be, or become insufficient, and the party
furnishing the same fail to file an additional counter-bond, the attaching party may apply
for a new order of attachment4 (Emphasis supplied).[4]

As may be noted, the amount of the counter-attachment bond is, under the terms of the
aforequoted Section 12, to be measured against the value of the attached property, as
determined by the judge to secure the payment of any judgment that the attaching
creditor may recover in the action. Albeit not explicitly stated in the same section and
without necessarily diminishing the sound discretion of the issuing judge on matters of
bond approval, there can be no serious objection, in turn, to the proposition that the
attached property - and logically the counter-bond necessary to discharge the lien on
such property - should as much as possible correspond in value to, or approximately
match the attaching creditors principal claim. Else, excessive attachment, which ought
to be avoided at all times, shall ensue. As we held in Asuncion vs. Court of Appeals:[5]

We, however, find the counter-attachment bond in the amount of P301,935.41 required
of the private respondent by the trial court as rather excessive under the circumstances.
Considering that the principal amounts claimed by the petitioner . . . total only
P185,685.00, and that he had posted a bond of only P80,000.00 for the issuance of the
writ of preliminary attachment, we deem it reasonable to lower the amount of the
counter-attachment bond to be posted by the private respondent . . . to the sum of
P185,685.00.

The following excerpts from Herrera, REMEDIAL LAW, Vol. VII, 1997 ed., p. 61, citing
retired Justice Jose Y. Feria, drive home the same point articulated in Asuncion:

The sheriff is required to attach only so much of the property of the party against whom
the order is issued as may be sufficient to satisfy the applicants demand, the amount of
which is stated in the order, unless a deposit is made or a counter-bond is given
equal to said amount. However, if the value of the property to be attached is less than
the amount of the demand, the amount of the applicants bond may be equal to the
value of said property, and the amount of the adverse partys deposit or counter-
bond may be equal to the applicants bond. The writ of preliminary attachment is
issued upon approval of the requisite bond. (Emphasis supplied).
Turning to the case at bar, the records show that the principal claim of respondent, as
plaintiff a quo, is in the amount of P25,200,000.00, [6] representing the three (3) unfunded
checks drawn against, and presented for clearing to, respondent bank. Jurisprudence
teaches that a writ of attachment cannot be issued for moral and exemplary damages,
and other unliquidated or contingent claim. [7]

The order of attachment dated January 22, 1992 fixed the bond to be posted by
respondent, as applicant, at P6,000,000.00. The writ of attachment issued on January
27, 1992, in turn, expressly indicated that petitioner is justly indebted to respondent in
the amount of P25,200,000.00. [8] On February 11, 1992, before the Arbitration
Committee of the Philippine Clearing House Corporation, petitioner and respondent,
however, agreed to equally divide between themselves, albeit on a temporary basis, the
disputed amount of P25,200,000.00, subject to the outcome of the arbitration
proceedings. Thus, the release by petitioner of the amount of P12,600,000.00 to
respondent. On March 7, 1994, petitioner filed a motion to discharge attachment by
counter-bond in the amount of P12,600,000.00 [9] which, to petitioner, is the extent that
respondent may actually be prejudiced in the event its basic complaint for recovery of
money against petitioner prospers.

As things stood, therefore, respondents principal claim against petitioner immediately

prior to the filing of the motion to discharge attachment has effectively been pruned
down to P12,600,000.00. The trial court was fully aware of this reality. Accordingly, it
should have allowed a total discharge of the attachment on a counter-bond based on
the reduced claim of respondent. If a portion of the claim is already secured, we see no
justifiable reason why such portion should still be subject of counter-bond. It may be that
a counter-bond is intended to secure the payment of any judgment that the attaching
party may recover in the main action. Simple common sense, if not consideration of fair
play, however, dictates that a part of a possible judgment that has veritably been
preemptively satisfied or secured need not be covered by the counter-bond.

With the view we take of this case, the trial court, in requiring petitioner to post a
counter-bond in the amount of P27,237,700.00, obviously glossed over one certain
fundamental. We refer to the fact that the attachment respondent applied for and the
corresponding writ issued was only for the amount of P25.2 Million. Respondent, it
bears to stress, did not pray for attachment on its other claims, contingent and
unliquidated as they were. Then, too, the attaching writ rightly excluded such claims.
While the records do not indicate, let alone provide a clear answer as to the actual value
of the property levied upon, it may reasonably be assumed that it is equal to
respondents principal claim. Be that as it may, it was simply unjust for the trial court to
base the amount of the counter-bond on a figure beyond the P25,200,000.00 threshold,
as later reduced to P12,600,200.00.

The trial court, therefore, committed grave abuse of discretion when it denied
petitioners motion to discharge attachment by counter-bond in the amount of
P12,600,000.00, an amount more than double the attachment bond required of, and
given by, respondent. As a necessary consequence, the Court of Appeals committed
reversible error when it dismissed petitioners recourse thereto in CA-G.R. SP No.
34876.

It bears to stress, as a final consideration, that the certiorari proceedings before the
appellate court and the denial of the motion to discharge attachment subject of such
proceedings, transpired under the old rules on preliminary attachment which has since
been revised.[10] And unlike the former Section 12 of Rule 57 of the Rules of Court
where the value of the property attached shall be the defining measure in the
computation of the discharging counter-attachment bond, the present less stringent
Section 12 of Rule 57 provides that the court shall order the discharge of attachment if
the movant makes a cash deposit, or files a counter-bond . . . in an amount equal to
that fixed by the court in the order of attachment, exclusive of costs. Not being in the
nature of a penal statute, the Rules of Court cannot be given retroactive effect. [11]

This disposition should be taken in the light of then Section 12, Rule 57 of the Rules of
Court.

WHEREFORE, the instant petition is GRANTED. Accordingly, the assailed decision and
resolution of the Courts of Appeals are hereby REVERSED and SET ASIDE, along with
the orders dated June 13, 1994 and July 20, 1994 of the Regional Trial Court at Makati,
Branch 135, in Civil Case No. 92-145 insofar they denied petitioners motion to
discharge attachment by counter-bond in the amount of P12,600,000.00, and a new one
entered GRANTING such motion upon the reposting of the same counter-bond.

SO ORDERED.
[4]
As amended Section 12, Rule 57 of the Rules of Court now reads as follows

SEC. 12. Discharge of attachment upon giving counter-bond. After a writ of

attachment has been enforced, the party whose property has been attached, or the
person appearing on his behalf, may move for the discharge of the attachment wholly or
in part on the security given. The court shall, after due notice and hearing, order the
discharge of the attachment if the movant makes a cash deposit, or files a counter-bond
executed to the attaching party with the clerk of the court where the application is made,
in an amount equal to that fixed by the court in the order of attachment, exclusive of
costs. But if the attachment is sought to be discharged with respect to a particular
property, the counter-bond shall be equal to the value of that property as determined by
the court. In either case, the cash deposit or the counter-bond shall secure the payment
of any judgment that the attaching party may recover in the action. xxx. Should such
counter-bond for any reason be found to be, or become insufficient, and the party
furnishing the same fail to file an additional counter-bond, the attaching party may apply
for a new order of attachment.

SECOND DIVISION

[ G.R. No. L-55381, March 26, 1984 ]

SPOUSES JULIETA SALGADO AND JOSE SALGADO, PETITIONERS, VS. HON.

COURT OF APPEALS AND PHILIPPINE COMMERCIAL & INDUSTRIAL BANK,
RESPONDENTS.

DECISION

ESCOLIN, J.:
This is a petition for review filed by the spouses Jose Salgado and Julieta Salgado to
set aside the resolution of the then Court of Appeals in CA-G.R. No. SP-09407-R, dated
September 18, 1980, which authorized the issuance of a writ of attachment against the
property of said petitioners.

The pertinent facts that gave rise to this petition are as follows: On May 8, 1978, the
Philippine Commercial and Industrial Bank, hereinafter referred to as the Bank, filed an
action against petitioners, docketed as Civil Case No. 29392 of the then Court of First
Instance of Rizal, to recover on a promissory note in the amount of P1,510,905.96,
inclusive of interest and other bank charges. In its verified complaint, the Bank further
prayed for the issuance of a writ of attachment. As grounds therefor it alleged that
petitioners had fraudently misappropriated and/or converted to their own personal use
and benefit the sugar proceeds given as security for the payment of the indebtedness;
that petitioners are guilty of fraud in contracting their obligation and have concealed,
removed or disposed of the properties mortgaged or assigned to the plaintiff, or are
concealing, removing or disposing or about to do so, with intent to defraud their creditor;
that the obligation sought to be enforced is genuine and, therefore, a sufficient cause of
action exists; and that there is no sufficient security for the claim sought to be enforced
by the action. Attached to the complaint was the affidavit of Mrs. Helen Osias, Senior
Branch Credit Division Manager of the Bank, wherein she stated, among others, "that
there is no sufficient security for the claim sought to be enforced by this action."

On May 9, 1978, the trial court issued an order granting the Bank's prayer for
preliminary attachment upon a bond in the sum of P1,510,905.96. Upon the filing of said
bond, the Deputy Provincial Sheriff levied upon several parcels of land of pe titioners
situated in the province of Negros Occidental.

On September 15, 1978, petitioners Salgado moved to quash the writ of attachment on
the ground that respondent Bank made fraudulent misrepresentation in securing the writ
by deleting the words "R E M" or "Real Estate Mortgage" from the xerox copy of the
promissory note attached to the complaint, thereby "making it appear that the note was
unsecured when in truth and in fact it was fully secured by a series of valid and existing
real estate mortgages duly registered and annotated in the titles of the affected real
properties in favor of the plaintiff Bank." In the same motion, petitioners stressed the
lack of factual basis of the Bank's claim as to their alleged fraudulent misappropriation
or conversion of the sugar proceeds given as security for their obligation.
After due hearing, the trial court issued an order dated January 31, 1979 granting
petitioners' motion and lifting the writ of attachment previously issued.

Upon denial of its motion for reconsideration the Bank went to the Court of Appeals on a
petition for certiorari to annul the order of the trial court lifting the writ of attachment.

On November 29, 1979, the respondent Court of Appeals, finding that the order of the
trial court was not arbitrarily issued, dismissed the petition for lack of merit.

However, on motion of the Bank, the respondent Court reconsidered its decision of
November 29, 1979 and issued the questioned resolution dated September 18, 1980,
which authorized the issuance of a writ of attachment.

Hence, the present recourse.

We find the petition impressed with merit. The chief purpose of the remedy of
attachment is to secure a contingent lien on defendant's property until plaintiff can, by
appropriate proceedings, obtain a judgment and have such property applied to its
satisfaction, or to make some provision for unsecured debts in cases where the means
of satisfaction thereof are liable to be removed beyond the jurisdiction, or improperly
disposed of or concealed, or otherwise placed beyond the reach of creditors. [1]

The grounds upon which attachment may issue are set forth in Section 1, Rule 57 of the
Rules of Court. But quite apart from the grounds stated therein, it is further provided in
Section 3 of Rule 57 that "an order of attachment shall be granted only when it is made
to appear by the affidavit of the applicant or some other person who personally knows
the facts, that x x x there is no other sufficient security for the claim sought to be en -
forced by the action."

The reason for the rule prohibiting attachment where indebtedness was already secured
is to prevent the secured creditors from attaching additional property and thus tying up
more of the debtor's property than was necessary to secure the indebtedness. [2] Thus,
to sustain an order of attachment, "it is incumbent upon plaintiff to establish either of
these two facts, to wit: (a) that the obligation had not been secured originally, or (b) that,
if secured at its beginning, the security later became valueless." [3]
In the instant case, the allegation in the affidavit of the Bank's Credit Division Manager,
Mrs. Helen Osias, to the effect that "there is no sufficient security for the claim sought to
be enforced by this action" has been shown to be false. It is undisputed that the note
sued upon "is fully secured by a series of valid and existing real estate mortgages duly
registered and annotated in the titles of the affected real property in favor of the plaintiff
Bank."

Section 13, Rule 57 of the Rules of Court authorizes the discharge of an attachment
where the same had been improperly or irregularly issued. In National Coconut
Corporation vs. Hon. Potenciano Pecson, [4] this Court ruled that when the facts or some
of them, stated in the plaintiff's affidavit, are shown by the defendant to be untrue, the
writ of attachment may be considered as improperly or irregularly issued.

Since attachment is a harsh and rigorous remedy which exposes the debtor to
humiliation and annoyance, the rule authorizing its issuance must be strictly construed
in favor of the defendant. It should not be abused as to cause unnecessary prejudice. It
is the duty of the court before issuing the writ to ensure that all the requisites of the law
has been complied with.[5]

Accordingly, the resolution of the respondent Court of Appeals, now the Intermediate
Appellate Court, dated September 18, 1980, is hereby set aside. No costs. SO
ORDERED.

Concepcion, Jr., Guerrero, Abad Santos and De Castro, JJ., concur.

Makasiar, Acting C.J., (Chairman), joins J. Aquino in his dissent.

[1]
7 C.J.S. 190

[2]
Blankenship vs. Myers, 54 P. 2d 314, 316; 97 Idaho 356 (1975)

[3]
Giandeini vs. Ramirez, 54 Pacific Reporter (2d) 91-92

[4]
90 Phil. 809

[5]
Guzman vs. Catolico, 65 Phil. 257; Salas vs. Adil, 90 SCRA 125
DISSENTING OPINION

AQUINO, J.:

I dissent with deference to Justice Escolin's opinion. On May 8, 1978, the Philippine
Commercial & Industrial Bank filed an ordinary action against the Salgado spouses
(residents of Kabankalan, Negros Occidental) in the Court of First Instance of Pasig,
Rizal for the collection of the sum of P1,510,905.96 as the debt due from the Salgado
spouses on their loan for the crop-year 1975-76, with a prayer for a writ of attachment,
considering that there was allegedly no sufficient security for the debt.

The attachment was granted by Judge Nelly L. Romero Valdellon on the following day,
May 9, subject to the filing of a bond in the amount of the obligation, P1,510,905.96.
The Salgados moved to quash it on the ground that there was misrepresentation on the
part of the bank that there was no security for the loan. They charged that the bank
tampered with the promissory note by erasing the acronym "REM" (meaning real estate
mortgages), thus giving the false impression that there was no security.

The bank countered that it did not resort to foreclosure because the mortgages (Exh. 6
to 10) covered not only the debt of the Salgados for the crop-year 1975-76 but also their
obligations for the crop-years 1976-77 and 1977-78 and an additional commercial loan.
The Salgados admitted that they did not assign to the bank their sugar for the 1975- 76
crop-year. That was why the loan was not paid.

On January 31, 1979, Judge Valdellon dissolved the attachment. About a month later,
Julieta Chua Salgadotransferred four pieces of real property covered by the attachment
to her sisters Jimema Chua Ang and Soledad Chua Montilla, her brother Romeo G.
Chua and her daughter, Mary Jane Salgado.

The bank assailed the dissolution order by certiorari in the Court of Appeals. In a
decision dated November 29, 1979, Justices Nocon, Samuel F. Reyes and Victoriano
upheld the dissolution order because the bank allegedly acted fraudulently in tampering
with the note, making it appear that the loan was unsecured when in fact it was secured
by mortgages.
The bank filed a motion for reconsideration. In the resolution of September 18, 1980,
the same three Justices set aside their decision and sustained the attachment. They
held that the dissolution was made on grounds not mentioned in section 13 of Rule 57.

The Salgados appealed to this Court on December 3, 1980. The instant appeal was
dismissed for lack of merit in this Court's resolution of June 26, 1981. The Salgados
filed a motion for reconsideration wherein they stated that Judge Valdellon in a decision
dated July 15, 1981 dismissed the bank's complaint and ordered it to pay the Salgados
one million two hundred fifty thousand pesos as moral and exemplary damages and
attorney's fees.

The bank opposed the motion. In a manifestation dated June 10, 1982, it apprised this
Court that Judge Pineda issued an order dated January 4, 1982 wherein he set aside
Judge Valdellon's decision and ordered the Salgados to pay the bank P1,300,000 plus
interest and penalties, bank charges and attorney's fees as stipulated in the promissory
note, Exhibit A. Judge Pineda denied the Salgados' motion for reconsideration. (The
Salgados appealed to the Intermediate Appellate Court, AC-G. R. No. 00119.)

I am of the opinion that the writ of attachment was properly issued. It is supported by a
sufficient bond. The bank posted a bond of P1,510,905.96. The 1981 resolution
dismissing the instant appeal should be reaffirmed.
PRELIMINARY
INJUNCTION
 THIRD DIVISION
[ G.R. No. 184645, October 30, 2009 ]
JOSE T. BARBIETO, PETITIONER, VS. THE HONORABLE COURT OF APPEALS;
MARY RAWNSLE V. LOPEZ, GRAFT INVESTIGATION AND PROSECUTION
OFFICER II; EULOGIO S. CECILIO, DIRECTOR; EMILIO A. GONZALES III, DEPUTY
OMBUDSMAN FOR THE MILITARY AND OTHER LAW ENFORCEMENT OFFICES;
OMBUDSMAN MERCEDITAS GUTIERREZ; AND LIEUTENANT GENERAL
ALEXANDER B. YANO, COMMANDING GENERAL, PHILIPPINE ARMY,
RESPONDENTS.

DECISION
CHICO-NAZARIO, J.:
This Petition for Certiorari under Rule 65 of the Revised Rules of Court assails the
Resolutions dated 6 August 2008[1] and 22 September 2008[2] of the Court of Appeals in
CA-G.R. SP. No. 102874, denying the prayer of petitioner Major General Jose T.
Barbieto (Maj. Gen. Barbieto) for a temporary restraining order (TRO) and/or writ of
preliminary injunction to enjoin his arrest and confinement, and/or lift the preventive
suspension order issued by the Office of the Deputy Ombudsman for the Military and
other Law Enforcement Offices (ODO-MOLEO) and the warrant of arrest and
confinement issued by Lieutenant General Alexander B. Yano (Lt. Gen. Yano),
Commanding General (CG) of the Philippine Army (PA).

Facts of the Case

Maj. Gen. Barbieto is the Division Commander of the 4 th Infantry Division, PA, Camp
Edilberto Evangelista, Cagayan de Oro City.

Several Complaint-Affidavits were filed before the ODO-MOLEO by various personnel

of the 4th Infantry Division, PA, against Maj. Gen. Barbieto and his alleged bagman Staff
Sergeant Roseller A. Echipare (S/Sgt. Echipare), charging the latter two with grave
misconduct and violation of Republic Act No. 6713. Maj. Gen. Barbieto and S/Sgt.
Echipare, for allegedly committed the following: (a) extortion of amounts ranging from
P25,000.00 to P30,000.00 from applicants in order to guarantee their enlistment in the
Philippine Army; (b) extortion of money from soldiers seeking reinstatement, in
exchange for Maj. Gen. Barbieto's approval of their reinstatement, despite previous
disapproval of said soldiers' requests for reinstatement by the 4 th Infantry Division
Reinstatement Board; and (c) anomalies in the clearing of payroll of the Balik
Baril program fund of the Armed Forces of the Philippines (AFP). The administrative
case against Maj. Gen. Barbieto and S/Sgt. Echipare was docketed as OMB-P-A-08-
0201-B, and the criminal case was docketed as OMB-P-C-08-0204-B. [3]

On 29 February 2008, ODO-MOLEO ordered [4] the preventive suspension of Maj. Gen.
Barbieto and S/Sgt. Echipare for six months during the pendency of OMB-P-A-08-0201-
B, the administrative case, thus:

WHEREFORE in accordance with Section 24 of Republic Act 6770 and Section 9 Rule
III of Administrative Order No. 7 respondents MAJOR GENERAL JOSE T. BARBIETO
and SSGT ROSELLER A. ECHEPARE are hereby PREVENTIVELY SUSPENDED
during the pendency of this case until its termination, but not to exceed the total period
of six (6) months, without pay. In case of delay in the disposition of the case due to the
fault, negligence or any cause attributable to the respondents, the period of such delay
shall not be counted in computing the period of the preventive suspension.

In accordance with Section 27, paragraph (1) of Republic Act 6770, this Order is
immediately executory. Notwithstanding any motion, appeal or petition that may be filed
by the respondents seeking relief from this Order, unless otherwise ordered by this
office or by any court of competent jurisdiction, the implementation of this Order shall
not be interrupted within the period prescribed.

The Chief of Staff GENERAL HERMOGENES ESPERON of the Armed Forces of the
Philippines is hereby directed to implement this Order immediately upon receipt hereof,
and to notify this Office within five (5) days from said receipt of the status of said
implementation.

Maj. Gen. Barbieto filed a Motion for Reconsideration [5] of the foregoing Order.
Simultaneous with the proceedings before the ODO-MOLEO, the Army Investigator
General (AIG) was also conducting an investigation on the same charges against Maj.
Gen. Barbieto and S/Sgt. Echipare. The AIG recommended, and Lt. Gen. Yano, as CG-
PA, approved, the indictment of Maj. Gen. Barbieto for violations of Articles 55 (Officer
Making Unlawful Enlistment), 96 (Conduct Unbecoming of an Officer and a Gentleman),
and 97 (Conduct Prejudicial to Good Order and Military Discipline); and of S/Sgt.
Echipare for violations of Articles 96 and 97, all of the Articles of War. [6]

On 20 February 2008, Maj. Gen. Barbieto's 10-day leave of absence took effect to pave
the way for an impartial investigation. On even date, S/Sgt. Echipare was arrested and
confined at the Intelligence and Security Group Compound, Fort Bonifacio, Taguig City.
[7]

Lt. Gen. Yano subsequently issued on 13 March 2008 an Order for the "Arrest and
Confinement of Major General Barbieto AFP and SSG Echipare PA," directing the
Commander of the Headquarters and Headquarters Support Group (HHSG), PA, "to
arrest and take responsibility of Major General Barbieto and SSG Echipare PA x x x and
to restrict them to quarters pending investigation with the end view of a General Court
Martial Trial."[8] Pursuant to this Order of Arrest, Maj. Gen. Barbieto was arrested and
confined to cluster officer housing, while S/Sgt. Echipare was transferred to and
detained at the Custodial Management Unit (CMU), HHSG, PA, on 18 March 2008. [9]

On 10 April 2008, the Office of the Army Judge Advocate (OAJA), concurring in the
findings of the Pre-Trial Investigation Panel, recommended the immediate trial of Maj.
Gen. Barbieto and S/Sgt. Echipare before the General Court Martial and the
endorsement of the case to the AFP General Headquarters for the conduct of General
Court Martial Proceedings.[10]

Without waiting for the resolution by the ODO-MOLEO of his Motion for Reconsideration
of the preventive suspension order issued against him in OMB-P-A-08-0201-B, Maj.
Gen. Barbieto filed before the Court of Appeals a Petition for Certiorari with Prayer for
the Issuance of a Temporary Restraining Order (TRO) and/or Writ of Preliminary
Injunction,[11] docketed as CA-G.R. SP. No. 102874. Maj. Gen. Barbieto specifically
prayed for: (1) the issuance of a TRO enjoining respondents Mary Rawnsle V. Lopez
(Lopez), Graft Investigation and Prosecution Officer II; Eulogio S. Cecilio, Director;
Emilio A. Gonzalez, Deputy Ombudsman for MOLEO; and Orlando C. Casimiro, Acting
Ombudsman, to lift and hold in abeyance the preventive suspension order; and ordering
Alexander B. Yano, Lieutenant General, Commanding General of the Philippine Army to
nullify the warrant of arrest and confinement of petitioner; (2) the setting of a hearing on
the preliminary injunction; and (3) after hearing on the preliminary injunction, the
issuance of an order granting the injunction and making the injunction permanent, and
such other and further relief as the appellate court may deem just and equitable in the
premises.[12]

On 4 April 2008, the Court of Appeals directed respondents to submit, within 10 days,
their comment stating the reasons or justifications why the TRO and/or writ of
preliminary injunction Maj. Gen. Barbieto prayed for should not be issued. [13]

After the parties submitted all the required pleadings, the Court of Appeals issued a
Resolution on 6 August 2008, denying Maj. Gen. Barbieto's prayer for a TRO and/or writ
of preliminary injunction. The appellate court held:

After due consideration of the factual circumstances of the instant case, we find
no compelling reason to issue an injunctive writ and/or temporary restraining
order.

The surrounding facts underpinning [Maj. Gen. Barbieto]'s plea for the issuance of an
injunctive relief are intimately related to and inextricably intertwined with the issues
raised in the instant Petition for Certiorari.

Moreover, [Maj. Gen. Barbieto] failed to demonstrate extreme urgency, as well as great
or irreparable injury that he may suffer while the instant Petition is pending adjudication.
x x x.

x x x x

Here, [Maj. Gen. Barbieto] failed to at least show a clear and unmistakable right entitling
him to the issuance of a writ of preliminary injunction and/or temporary restraining order.
[14]
(Emphasis supplied.)

The dispositive portion of the Resolution reads:

 WHEREFORE, [Maj. Gen. Barbieto]'s prayer for the issuance of a temporary restraining
order and/or writ of preliminary injunction is hereby DENIED.[15]

Maj. Gen. Barbieto moved for reconsideration of the aforementioned Resolution, but the
Court of Appeals, in its Resolution [16] dated 22 September 2008, refused to do so. The
appellate court stressed that before there could be a question of whether to grant or
deny the prayer for a writ of preliminary injunction, Maj. Gen. Barbieto, at the onset,
should have established in his pleadings the existence of the grounds enumerated in
Section 3, Rule 58 of the Revised Rules of Court. It stood by its pronouncement in the
earlier Resolution that Maj. Gen. Barbieto failed to demonstrate urgency, as well as
great or irreparable injury that he may suffer while his Petition in CA-G.R. SP No.
102874 is pending adjudication; hence, the necessity of a hearing did not even arise.
The Court of Appeals further reasoned that it could properly deny Maj. Gen. Barbieto's
prayer for preliminary injunctive relief since, being an ancillary remedy, the grant of the
same, which would result in a premature resolution of the case, or will grant the
principal objectives of the parties, before the merits could be passed, is proscribed.

The Court of Appeals decreed in its 22 September 2008 Resolution:

In fine, [Maj. Gen. Barbieto]'s Motion for Reconsideration proffers no substantial issue
which may warrant reversal of the assailed Resolution.

WHEREFORE, the instant Motion for Reconsideration is hereby DENIED for lack of
merit.[17]

Hence, Maj. Gen. Barbieto filed the instant Petition before this Court, raising the
following issues:

I. THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF

DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN
DENYING PETITIONER'S PRAYER FOR INJUNCTIVE RELIEF WITHOUT
HEARING IN VIOLATION OF HIS RIGHT TO PROCEDURAL DUE PROCESS OF
LAW.

II. THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF

DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN RULING
 THAT PETITIONER FAILED TO DEMONSTRATE EXTREME URGENCY AS WELL
AS GREAT OR IRREPARABLE INJURY THAT HE MAY SUFFER THAT SHOULD
MERIT THE GRANT OF INJUNCTIVE RELIEF.

III. THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF

DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN RULING
THAT PETITIONER MAY BE FURTHER DEPRIVED OF THE PRIMORDIAL RIGHT
TO LIBERTY GUARANTEED IN THE CONSTITUTION BY A MERE PROCEDURAL
CONSIDERATION THAT THE INJUNCTIVE RELIEF IS INEXTRICABLY
INTERTWINED WITH THE ISSUES RAISED IN THE PETITION.

During the pendency of the present Petition, an Order, [18] prepared by respondent Lopez
on 27 March 2008, but approved by Ombudsman Merceditas N. Gutierrez only on 7
November 2008, denied Maj. Gen. Barbieto's Motion for Reconsideration of the
preventive suspension order previously issued against Maj. Gen. Barbieto and S/Sgt.
Echipare in OMB-P-A-08-0201-B. The Order cited the power of the Office of the
Ombudsman to preventively suspend any public officer under Republic Act No. 6770,
otherwise known as the Ombudsman Act of 1989, provided that the essential requisites
under Section 24 thereof are present. The Order pointed out that this power of the
Office of the Ombudsman had long been respected by the Supreme Court.

Maj. Gen. Barbieto's claim that he was denied his constitutional right to due process
was rejected in this latest Ombudsman Order, because:

The above-concept [of due process] is not a fixed or static one, as clearly
acknowledged. What is due process of the law depends on circumstances, it varies with
the subject matter and necessities of the situation (Bernas, Joaquin. The Constitution
of the Republic of the Philippines, p. 114).

Considering however, that this is an administrative case, the Supreme Court has
recognized that there are two (2) types of preventive suspension. Preventive
suspension as a preventive measure and suspension as penalty. x x x.

x x x x

In the instant case, it is clear that the suspension issued is a mere preliminary step and
not a penalty. Thus, the strict adherence to the rudiments of notice and hearing need not
be applied due to the immediate nature of the action. [19]

The same Ombudsman Order rebuffed Maj. Gen. Barbieto's contention that there was
forum shopping, given the existence of two similar administrative cases against him:
one, OMB-P-A-08-0201-B before the Office of the Ombudsman; and two, before the
military tribunal. OMB-P-A-08-0201-B determines Maj. Gen. Barbieto's fitness as a
public officer; whereas the pending administrative case before the Provost Marshall
General, PA, determines his fitness and efficiency as a military officer.

Therefore, the ultimate ruling in said Ombudsman Order is as follows:

WHEREFORE, premises considered, the Motion for Reconsideration dated 12 March

2008, is hereby DENIED for lack of merit. The Order dated 29 February 2008 is hereby
AFFIRMED.[20]

Arguments of the Parties

Maj. Gen. Barbieto avers in the Petition [21] at bar that the Court of Appeals committed
grave abuse of discretion amounting to lack or excess of jurisdiction in denying his
prayer for preliminary injunctive relief without hearing, in violation of his right to
procedural due process of law; in finding that he failed to demonstrate extreme urgency,
as well as great or irreparable injury that he may suffer from respondents' acts, which
would have merited the grant of a TRO and/or writ of preliminary injunction; and in ruling
that the preliminary injunctive relief prayed for is inextricably intertwined with the issues
raised in his Petition in CA-G.R. SP No. 102874.

Maj. Gen. Barbieto insists that his right to procedural due process was violated by the
Court of Appeals when said court denied his prayer for a TRO and/or writ of preliminary
injunction without a hearing. Maj. Gen. Barbieto invoked Supreme Court Administrative
Circular No. 20-95, which provides that "an application for TRO shall be acted upon only
after all parties are heard in a summary hearing x x x." [22]

Maj. Gen. Barbieto further argues that all elements to warrant the grant of a writ of
preliminary injunction are present in this case. His preventive suspension, merely a step
in the administrative investigation against him, had already expired on 28 August 2008,
and yet, he remains to be under arrest and confinement. Maj. Gen. Barbieto stresses
that the urgent need for the issuance of a TRO and/or writ of preliminary injunction by
the Court of Appeals is evident from the fact that he is being continuously deprived of
his right to liberty.

The Office of the Ombudsman counters that Maj. Gen. Barbieto's reliance on
Administrative Circular No. 20-95 is misplaced, for the same applies to trial courts only.
Referring to Section 4, Rule VI of the 2002 Internal Rules of the Court of Appeals, the
Office of the Ombudsman posits that procedural due process has been satisfied by the
appellate court when the latter issued a resolution requiring the party, whose act was
sought to be enjoined, to file a comment on the application for a TRO. The denial by the
Court of Appeals of Maj. Gen. Barbieto's prayer for preliminary injunctive relief was
grounded on both legal and logical considerations. The grant of the ancillary remedy of
TRO and/or writ of preliminary injunction would have resulted in a premature resolution
of the main case of certiorari in CA-G.R. SP No. 102874 before the merits of the latter
could be passed upon.

The Office of the Ombudsman contends, likewise, that the expiration of Maj. Gen.
Barbieto's six-month preventive suspension on 28 August 2008 renders the issue on the
propriety of such suspension moot and academic. There is nothing more that an
injunctive relief could seek to enjoin. Maj. Gen. Barbieto's continued confinement is no
longer due to the preventive suspension order of the Ombudsman, but pursuant to Lt.
Gen. Yano's Order of Arrest.

Lastly, the Office of the Ombudsman maintains that none of the requisites for the
issuance of a TRO and/or writ of preliminary injunction exists in the instant case. Maj.
Gen. Barbieto's proper recourse is to just await the resolution of his Petition
for Certiorari in CA-G.R. SP No. 102874 still pending before the Court of Appeals, which
involved the issue of the legality of his continued confinement.

Lt. Gen. Yano substantially joins in and/or adopts the arguments of the Office of the
Ombudsman. He additionally asserts that there is no reason to enjoin the enforcement
of the Order of Arrest against Maj. Gen. Barbieto, citing his authority as CG-PA to issue
the same, pursuant to the Articles of War.

The Ruling of the Court

At the onset, the Court must clarify that Maj. Gen. Barbieto is actually seeking a TRO
and/or a writ of preliminary injunction to enjoin the implementation of two distinct orders,
issued by two different persons, in two separate proceedings: (1) the preventive
suspension order issued by the ODO-MOLEO in OMB-P-A-08-0201-B; and (2) the
Order of Arrest issued by Lt. Gen. Yano as CG-PA in view of the impending General
Court Martial Trial.

The preventive suspension order issued by the ODO-MOLEO merely suspended Maj.
Gen. Barbieto from his office for six months, pending the administrative proceedings
against the latter.[23] There is nothing in said preventive suspension order of the ODO-
MOLEO that directed Maj. Gen. Barbieto's arrest. His arrest and continued confinement
is solely by virtue of Lt. Gen. Yano's Order.

The Court takes note of the undisputed fact that Maj. Gen. Barbieto's six-month
suspension, imposed by the ODO-MOLEO in an Order dated 28 February 2008 in
OMB-P-A-08-0201-B, already expired on 28 August 2008. Such an event necessarily
renders this Petition moot and academic, insofar as the latter pertains to the said
preventive suspension order issued by the ODO-MOLEO against Maj. Gen. Barbieto.
Any ruling by this Court, whether affirming or reversing the denial by the appellate court
of Maj. Gen. Barbieto's prayer for issuance of a TRO and/or writ of preliminary injunction
to enjoin the implementation of said preventive suspension order, will no longer serve
any practical purpose, because the act sought to be enjoined has long been
consummated.[24]

Time and again, courts have refrained from even expressing an opinion in a case where
the issues have become moot and academic, there being no more justiciable
controversy to speak of, so that a determination thereof would be of no practical use or
value.[25] Where the issue has become moot and academic, there is no actual
substantial relief to which Maj. Gen. Barbieto would be entitled and which would be
negated by the dismissal of his Petition as regards the preventive suspension order of
the ODO-MOLEO.[26]

Similarly, the Court finds the present Petition, insofar as it concerns Lt. Gen. Yano's
Order of Arrest against Maj. Gen. Barbieto, dismissible for lack of merit.
Sine dubio, the grant or denial of a writ of preliminary injunction in a pending case rests
on the sound discretion of the court taking cognizance of the case, since the
assessment and evaluation of evidence towards that end involves findings of facts left
to the said court for its conclusive determination. Hence, the exercise of judicial
discretion by a court in injunctive matters must not be interfered with, except when there
is grave abuse of discretion.[27]

Grave abuse of discretion means such capricious and whimsical exercise of judgment
as is equivalent to lack of jurisdiction. Mere abuse of discretion is not enough. It must be
grave abuse of discretion, as when the power is exercised in an arbitrary or despotic
manner by reason of passion or personal hostility, and must be so patent and so gross
as to amount to an evasion of a positive duty or to a virtual refusal to perform the duty
enjoined or to act at all in contemplation of law. [28] The Court of Appeals did not gravely
abuse its discretion in refusing to issue a TRO and/or writ of preliminary injunction to
enjoin the enforcement of Lt. Gen. Yano's Order of Arrest against Maj. Gen. Barbieto.

Maj. Gen. Barbieto cannot rely on Supreme Court Administrative Circular No. 20-95,
providing special rules for temporary restraining orders and preliminary injunctions, to
support his claim that he was denied due process when the Court of Appeals denied his
prayer for the issuance of a TRO and/or writ of preliminary injunction without first
conducting a summary hearing.

The whole text of said Administrative Circular is reproduced below:

1. Where an application for temporary restraining order (TRO) or writ of preliminary

injunction is included in a complaint or any initiatory pleading filed with the trial
court, such compliant or initiatory pleading shall be raffled only after notice to the
adverse party and in the presence of such party or counsel.

2. The application for a TRO shall be acted upon only after all parties are heard in a
summary hearing conducted within twenty-four (24) hours after the records
are transmitted to the branch selected by raffle. The records shall be transmitted
immediately after raffle.

3. If the matter is of extreme urgency, such that unless a TRO is issued, grave injustice
and irreparable injury will arise, the Executive Judge shall issue the TRO effective only
for seventy-two (72) hours from issuance but shall immediately summon the parties for
conference and immediately raffle the case in their presence. Thereafter, before the
expiry of the seventy-two (72) hours, the Presiding Judge to whom the case is
assigned shall conduct a summary hearing to determine whether the TRO can be
extended for another period until a hearing in the pending application for preliminary
injunction can be conducted. In no case shall the total period of the TRO exceed twenty
(20) days, including the original seventy-two (72) hours, for the TRO issued by the
Executive Judge.

4. With the exception of the provisions which necessarily involve multiple-sala

stations, these rules shall apply tosingle-sala stations especially with regard to
immediate notice to all parties of all applications for TRO.

For immediate compliance. (Emphases ours.)

Maj. Gen. Barbieto overlooked that Supreme Court Administrative Circular No. 20-95
pertains to applications for TROs and/or writs of preliminary injunctions filed before trial
courts, whether multi-sala or single-sala.

The Court of Appeals has its own Internal Rules.

Section 2, Rule IV of the 2002 Internal Rules of the Court of Appeals provides the
following procedure in the case of a petition involving an urgent matter, such as an
application for a TRO:

Sec. 2. Action by the Presiding Justice. -When a petition involves an urgent matter, such
as an application for writ of habeas corpus or temporary restraining order, and there is
no way of convening the Raffle Committee or calling any of its members, the Presiding
Justice may conduct the raffle or act on the petition, subject to raffle on the next
working day in accordance with Rule III hereof. (Emphasis ours.)

Noticeably, under the aforementioned circumstances, the Presiding Justice of the Court
of Appeals may even, by himself, act on an urgent application for a TRO. There is no
mention at all of the requirement that the Presiding Justice must hold a summary
hearing prior to granting or denying such an application.
As for a preliminary injunction, Section 4, Rule VI of the 2002 Internal Rules of the Court
of Appeals lays down the following procedure:

Sec. 4. Hearing on Preliminary Injunction.-- The requirement of a hearing on an

application for preliminary injunction is satisfied with the issuance by the Court
of a resolution served upon the party sought to be enjoined requiring him to
comment on said application within a period of not more thanten (10) days from
notice. Said party may attach to his comment documents which may show why the
application for preliminary injunction should be denied. The Court may require the party
seeking the injunctive relief to file his reply to the comment within five (5) days from
receipt of the latter.

If the party sought to be enjoined fails to file his comment as provided for in the
preceding paragraph, the Court may resolve the application on the basis of the petition
and its annexes.

The preceding paragraphs, notwithstanding, the Court may, in its sound discretion,
set the application for a preliminary injunction for hearing during which the parties
may present their respective positions or submit evidence in support thereof.
(Emphases ours.)

Based on the foregoing rule, the Court of Appeals clearly satisfied the requirement of a
hearing when, in its Resolution dated 4 April 2008 in CA-G.R. SP No. 102874, it
directed respondents to submit their comment on Maj. Gen. Barbieto's prayer for the
issuance of a TRO and/or writ of preliminary injunction within ten days from notice.
[29]
While it is true that the right to due process safeguards the opportunity to be heard
and to submit any evidence one may have in support of his claim or defense, the Court
has time and again held that where the opportunity to be heard, either through verbal
arguments or pleadings, is accorded, and the party can "present its side" or defend its
"interest in due course," there is no denial of due process. What the law proscribes is
the lack of opportunity to be heard. [30]

The last paragraph of Section 4, Rule VI of the 2002 Internal Rules of the Court of
Appeals also proves false Maj. Gen. Barbieto's contention that the actual conduct of a
hearing on an application for preliminary injunction is mandatory. Said rule explicitly
states that the setting of a hearing on such an application is left to the sound discretion
of the appellate court. Hence, it is not enough for Maj. Gen. Barbieto to show that no
hearing on his application for TRO and/or preliminary injunction was conducted by the
Court of Appeals, but he must also be able to convince this Court that the appellate
court gravely abused its discretion in choosing not to conduct such a hearing. Maj. Gen.
Barbieto likewise failed in this regard.

The Court, in Philippine Ports Authority v. Cipres Stevedoring & Arrastre, Inc.,
[31]
provided the following elucidation on the general principles in issuing a writ of
preliminary injunction:

A preliminary injunction is an order granted at any stage of an action prior to judgment

of final order, requiring a party, court, agency, or person to refrain from a particular act or
acts. It is a preservative remedy to ensure the protection of a party's substantive rights
or interests pending the final judgment in the principal action. A plea for an injunctive
writ lies upon the existence of a claimed emergency or extraordinary situation which
should be avoided for otherwise, the outcome of a litigation would be useless as far as
the party applying for the writ is concerned.

At times referred to as the "Strong Arm of Equity," we have consistently ruled that there
is no power the exercise of which is more delicate and which calls for greater
circumspection than the issuance of an injunction. It should only be extended in cases
of great injury where courts of law cannot afford an adequate or commensurate remedy
in damages;"in cases of extreme urgency; where the right is very clear; where
considerations of relative inconvenience bear strongly in complainant's favor; where
there is a willful and unlawful invasion of plaintiff's right against his protest and
remonstrance, the injury being a continuing one, and where the effect of the mandatory
injunction is rather to reestablish and maintain a preexisting continuing relation between
the parties, recently and arbitrarily interrupted by the defendant, than to establish a new
relation."

For the writ to issue, two requisites must be present, namely, the existence of the right
to be protected, and that the facts against which the injunction is to be directed are
violative of said right. x x x.

A writ of preliminary injunction may be granted only upon showing by the applicant of a
clear and unmistakable right that is a right in esse. Maj. Gen. Barbieto claims that his
right in esse that is being violated herein is his right to liberty.

Indeed, Section I, Article III of the 1987 Constitution, guarantees that no person may be
deprived of life, liberty, or property without due process of law. Also, the Republic of the
Philippines, as a signatory to the Universal Declaration of Human Rights (UDHR),
recognizes that everyone has the right to liberty and security of one's person. No one
shall be subjected to arbitrary arrest or detention. No one shall be deprived of his liberty
except on such grounds and in accordance with such procedure as are established by
law.[32]

Nevertheless, the right to liberty is not absolute. It bears to point out that while both the
1987 Constitution and the UDHR affirm the right of every person to liberty, they do
concede that there are instances when a person must be deprived thereof for as long
as due process of law has been observed.

Thus, Maj. Gen. Barbieto cannot just invoke herein his fundamental right to liberty; upon
him also falls the burden of proving that he is being deprived of such right without due
process.

To recall, Lt. Gen. Yano ordered Maj. Gen. Barbieto's arrest after the conduct of an
investigation by and the recommendation of the AIG that Maj. Gen. Barbieto be charged
before a court martial with violations of Articles 55 (Officer Making Unlawful Enlistment),
96 (Conduct Unbecoming of an Officer and Gentleman), and 97 (Conduct Prejudicial to
Good Order and Military Discipline) of the Articles of War. Since Maj. Gen. Barbieto is
being charged with serious offenses, Lt. Gen. Yano issued the Order of Arrest for the
former under Article 70 of the Articles of War:

Art. 70. Arrest or Confinement. - Any person subject to military law charged with
crime or with a serious offense under these articles shall be placed in
confinement or in arrest, as circumstances require; but when charged with a minor
offense only, such person shall not ordinarily be placed in confinement. Any person
placed in arrest under the provisions of this Article, shall thereby be restricted to his
barracks, quarters or tent, unless such limits shall be enlarged by proper authority.
Any officer or cadet who breaks his arrest or who escapes from confinement, whether
before or after trial or sentence and before he is set at liberty by proper authority, shall
be dismissed from the service or suffer such other punishment as a court-martial may
direct, and any other person subject to military law who escapes from confinement or
who breaks his arrest, whether before or after trial or sentence and before he is set at
liberty by proper authority, shall be punished as a court martial may direct. (Emphases
ours.)

Now, is Lt. Gen. Yano's issuance of the Order of Arrest under the aforedescribed
circumstances violative of Maj. Gen. Barbieto's right to liberty and due process? The
Court accords to Lt. Gen. Yano the presumption of good faith and regularity in the
issuance of said Order of Arrest, having done the same in the course of the
performance of his official duties. Other than this, the Court cannot make any more
pronouncements on the matter. Suffice it to say that the need for a more extensive
determination of said question, by itself, already negates Maj. Gen. Barbieto's insistence
of a clear and well-established right that warrants the protection of a TRO and/or writ of
preliminary injunction. Where the complainant's (or in this case, petitioner's) right is
doubtful or disputed, injunction is not proper.[33]

The Court must limit itself in the Petition at bar to the issue on the non-issuance by the
Court of Appeals of a TRO and/or writ of preliminary injunction to prevent the
enforcement of Maj. Gen. Barbieto's arrest. It must be careful not to preempt the
resolution by the Court of Appeals of Maj. Gen. Barbieto's Petition for Certiorari in CA-
G.R. SP No. 102874, wherein the propriety of his arrest and continued confinement is
one of the central issues.

The prevailing rule is that the courts should avoid issuing a writ of preliminary injunction
that would in effect dispose of the main case without trial. Otherwise, there would be a
prejudgment of the main case and a reversal of the rule on the burden of proof, since
such issuance would assume the proposition that Maj. Gen. Barbieto is inceptively
bound to prove.[34]

WHEREFORE, the instant Petition is DISMISSED. The Resolutions dated 6 August

2008 and 22 September 2008 of the Court of Appeals in CA-G.R. SP No. 102874
are AFFIRMED. The Court of Appeals is DIRECTED to resolve petitioner Maj. Gen.
Jose T. Barbieto's Petition for Certiorari in CA-G.R. SP No. 102874 with dispatch. Costs
against petitioner.

SO ORDERED.
[23]
The authority of the ODO-MOLEO to suspend Maj. Gen. Barbieto is rooted in Section
24 of Republic Act No. 6770, which reads:

SEC. 24. Preventive Suspension. -- The Ombudsman or his Deputy may preventively
suspend any officer or employee under his authority pending an investigation, if in his
judgment the evidence of guilt is strong, and (a) the charge against such officer or
employee involves dishonesty, oppression or grave misconduct or neglect in the
performance of duty; or (b) the charges would warrant removal from the service; or (c)
the respondent's continued stay in office may prejudice the case filed against him.

The preventive suspension shall continue until the case is terminated by the Office of
the Ombudsman but not more than six months, without pay, except when the delay in
the disposition of the case by the Office of the Ombudsman is due to the fault,
negligence or petition of the respondent, in which case the period of such delay shall
not be counted in computing the period of suspension herein provided.
 FIRST DIVISION
[ G.R. No. 179230, March 09, 2010 ]
EUGENE L. LIM, PETITIONER, VS. BPI AGRICULTURAL DEVELOPMENT BANK,
RESPONDENT.

DECISION
CARPIO MORALES, J.:
The BPI Agricultural Development Bank (respondent) granted Eugene L. Lim (petitioner)
and his wife Constancia arevolving credit line in the amount of P7,000,000 on account
of which they executed two promissory notes:Promissory Note No. 1000045-08 dated
January 9, 1998 for P2,000,000 which matured on July 8, 1998, [1] andPromissory Note
No. 1000045-09 dated April 8, 1998 for P5,000,000 which matured on October 5, 1998.
[2]

Respondent also granted petitioner medium term loans on account of which he and his
wife executed Promissory Note No. 6000201-00 dated September 4, 1997 for
P3,294,117.63 which matured on August 19, 1999 [3] andPromissory Note No. 6000191-
00 for P2,000,000 dated February 19, 1997 which matured on February 19, 2002. [4]

The first three Promissory Notes, Nos. 1000045-08, 1000045-09, and 6000201-00,
carried a cross-default provision reading:

In case of my/our failure to pay when due and payable any amount which I/we are
obligated to pay under this Note and/or any other obligation which I/we or any of
us may owe or hereafter owe to the BANK, or to the Bank of the Philippine Islands
(BPI) or to any of BPI Subsidiary or Affiliate, such as but not limited to BPI Family Bank,
BPI Credit Corporation, BPI Leasing Corporation, BPI Securities Corporation and BPI
Express Card Corporation whether as or in case of conviction for a criminal offense with
final judgment carrying with it the penalty of civil interdiction affecting me/us, or any of
us, or in any of the cases covered by Article 1198 of the Civil Code of the Philippines,
then the entire amount outstanding under this Note shall immediately become due and
payable without the necessity of notice or demand which I/we hereby waive. Likewise,
I/we hereby jointly and severally promise to pay a late payment charge on any overdue
amount under this note at the rate of Two percent (2%) per month over and above and
in addition to the interest payable under this note. [5] (emphasis and underscoring
supplied)

The fourth Promissory Note, No. 6000191-00, carried a substantially similar provision. [6]

To secure the payment of their loans, petitioner and his wife executed real estate
mortgages covering properties in Ozamis City.

Petitioner defaulted on the first Promissory Note. And he had an overdraft of

P16,000,000 with respondent,[7]drawing respondent to send a final demand letter dated
July 27, 1998 declaring petitioner's availments under the revolving credit line and
medium term loans immediately due and payable [8] and demanding settlement thereof in
five days.

Petitioner and his wife failed to settle their obligations, hence, respondent filed an
application for extrajudicial foreclosure of the mortgages in September 1999 before the
Office of the Sheriff of the Regional Trial Court (RTC) of Ozamis City. [9]

Petitioner thereupon filed on October 15, 1998 before the RTC of Ozamis City a
complaint[10] for injunction with damages against respondent to enjoin the foreclosure of
the mortgages, alleging, inter alia, as follows:

3. To finance the construction of [its] poultry farm . . . the defendant[-herein respondent]

granted the plaintiff a Revolving Credit Line amounting to P7 Million, which was availed
of by the plaintiff under the following Promissory Note [including Note No. 1000045-08]:

x x x x

5. x x x [I]t appears indubitably clear, that at the time the defendant[-herein

respondent's] lawyer sent a letter to plaintiff dated 27 July 1998, declaring the entire
obligation of plaintiff immediately due and demandable [covered by the first Promissory
Note], the only loan availment which had already matured was the P2 Million in the
Revolving Credit Line, but whose interest was fully paid up to 8 July 1998; x x x

x x x x

7. Defendant's act of accelerating the maturity of plaintiff's entire obligation would not
only be in gross bad faith, but also a gross abuse of right, as it has subjected the
maturity of the loans to its own whims and caprices, to the damage and great
prejudice of the plaintiff; not to mention the fact that it is done in the midst of this present
economic crisis and during these difficult times of high and exorbitant interest rates;

8. There is no reason for the defendant to hasten the maturity of the loans, as it would
not suffer any prejudice, for the loans both under the Credit Line and the Medium Term
Loan are secured with collaterals and whatever amount due can very well be taken
cared of by the same; on the contrary, it is plaintiff who would suffer the most;

9. Surprisingly, defendant BPI Agribank filed with the office of the RTC Sheriff, Ozamiz
City, an application for Extra-judicial foreclosure of the mortgaged properties, which
foreclosure will undoubtedly work undeniable injustice and serious irreparable damage
to plaintiff. Hence, this instant complaint asking this Honorable Court to maintain the
status quo and cease and desist from taking any further action in connection with the
application for foreclosure against plaintiff[.][11] (emphasis and underscoring supplied),

and praying that:

1. Immediately after the filing of the complaint and before hearing, a writ of
preliminary injunction/temporary order be issued ordering the defendant BPI
Agribank to maintain the status quo and cease and desist from taking any further
action against plaintiff by collecting his loan obligation particularly by foreclosing the
mortgaged properties; and furthermore, ordering the defendant Ex-Officio Sheriff of
Ozamiz City to cease and desist from taking any further action in connection with
defendant's application for foreclosure;
2. After due hearing:

2.1 Ordering the preliminary injunction permanent;

 2.2. Ordering the defendant to pay plaintiff the amount of no less than P500,000 as
moral damages, P100,000 as actual damages; P100,000 as exemplary damages
and P50,000 as attorney's fees.

3. Plaintiff be granted such other and further reliefs as are just and equitable under
the premises.[12](emphasis and underscoring supplied)

By Order of October 23, 1998, [13] Branch 15 of the Ozamis City RTC directed the
issuance of a Temporary Restraining Order.

After it conducted a hearing on herein petitioner's application for a writ of preliminary

injunction, the trial court, by Order of March 13, 2000, [14] directed the issuance of a writ
of preliminary injunction, it finding that "there are legal matters to be looked into with
respect to the application of the acceleration clause or default provisions in the
promissory note and great and irreparable damage will be suffered by the plaintiff if the
mortgage will be foreclosed and the propert[ies] are sold on public auction."[15] Its Motion
for Reconsideration[16] having been denied,[17] respondent filed a petition for
certiorari[18] before the Court of Appeals.

The Court of Appeals, by Decision of June 30, 2006, [19] finding that petitioner has no
clear right to an injunctive relief, lifted the preliminary injunction issued by the RTC,
hence, the present petition for review on certiorari, [20]petitioner alleging that the Court of
Appeals gravely erred in:

x x x LIFTING THE WRIT OF PRELIMINARY INJUNCTION ISSUED BY THE TRIAL

COURT.

x x x x

x x x RULING THAT THE [RTC] MARCH 13, 2000 ORDER FAILED TO

DEMONSTRATE THAT PETITIONER HAS ANY RIGHT IN ESSE WHICH WOULD BE
VIOLATED BY THE RESPONDENT BANK IF FORECLOSURE PROCEEDINGS WERE
TO PROCEED.

x x x x
x x x NOT RULING THAT THE ISSUE ON THE VALIDITY OR LEGALITY OF THE
DEFAULT PROVISIONALLEGELDY PROVIDED IN THE PROMISSORY NOTES AND
INVOKED [BY] THE RESPONDENT BANK IN DECLARING PETITIONER AS HAVING
DEFAULTED IN ALL HIS ACCOUNTS/OBLIGATIONS CONSTITUTES AS A LEGAL
AND FACTUAL BASIS IN THE ISSUANCE OF THE WRIT OF PRELIMINARY
INJUNCTION IN ORDER TO PRESERVE THE STATUS QUO AND TO PREVENT
GREAT AND IRREPARABLE DAMAGE AND INJURY TO PETITIONER SHOULD THE
FORECLOSURE PROCEED.[21] (emphasis and underscoring supplied)

The petition fails.

One of the requisites for the issuance of a writ of preliminary injunction is that the
applicant must have a right in esse.[22] A right in esse is a clear and unmistakable right to
be protected,[23] one clearly founded on or granted by law or is enforceable as a matter
of law.[24] The existence of a right to be protected, and the acts against which the writ is
to be directed are violative of said right must be established.[25]

The complaint filed by petitioner for injunction with damages seeks to enjoin the
foreclosure of the mortgages. Petitioner admitted having executed Promissory Note No.
1000045-08. During the hearing of his application for a writ of preliminary injunction, the
cross-default provision of the note was read to him and he admitted having gone
over[26] it before he signed the note. And petitioner admitted that he failed to honor the
note on maturity.

Petitioner alleged in his complaint, however, that respondent's acceleration of the

maturity of his entire obligation is "in gross bad faith" and in "gross abuse of [his] right"
as it "subjected the maturity of the loans to its own whims and caprices . . . not to
mention that it [was] done in the midst of this present economic crisis . . . ."

Respondent's declaration that petitioner's availments under the revolving credit line and
medium term loans were immediately due and payable was by virtue of the cross-
default provision of Promissory Note No. 1000045-08. Respondent's move to foreclose
the mortgages after petitioner defaulted in his obligation under the promissory note was
thus in accordance with said provision which petitioner did not challenge. The trial court
thus erred in ordering the issuance of the writ of preliminary injunction on the basis of its
finding that "there are legal matters to be looked into with respect to the application of
the acceleration clause or default provisions in the promissory note."

It need not be underlined that jurisdiction over an issue in a case is determined and
conferred by the pleadings filed by the parties, or by their agreement in a pre-trial order
or stipulation or, at times by their implied consent as by the failure of a party to object to
evidence on an issue not covered by the pleadings, as provided in Section 5, Rule 10 of
the Rules of Court.[27]

By the above-quoted allegations and prayer in petitioner's complaint, however, which

complaint, it bears emphasis, is for injunction and damages, as well as from the
transcript of stenographic notes taken during the hearing on petitioner's application for a
writ of preliminary injunction, petitioner has not laid or established a right in esse to
entitle him to the writ.

WHEREFORE, the petition is DENIED.

SO ORDERED.
 SECOND DIVISION

[ A.M. No. RTJ-04-1885, July 14, 2004 ]

BENJAMIN A. RIVERA, SIMEON B. QUILANG, JR. AND NICANOR ASUNCION,

PETITIONERS, VS. JUDGE TEODULO E. MIRASOL, REGIONAL TRIAL COURT,
BRANCH 23, ROXAS, ISABELA, RESPONDENT.

RESOLUTION

AUSTRIA-MARTINEZ, J.:

On February 22, 2002, Benjamin Rivera, Simeon Quilang, Jr. and Nicanor Asuncion
filed with the Court an Affidavit-Complaint against Judge Teodulo E. Mirasol [1] of the
Regional Trial Court, Branch 23, Roxas, Isabela (RTC for brevity) charging him with
gross ignorance of the law.

Complainants are the defendants in Civil Case No. 618, a case for recovery of
possession of property filed by the Municipality of Roxas, Isabela, on September 16,
1999, then pending before the sala of respondent Judge. [2]

Complainants aver that on September 28, 1999, without summons having been served,
the municipality filed an unverified motion for preliminary mandatory injunction against
them with motion for writ of demolition. Complainants filed their answer to the complaint
opposing the motion.[3]

On November 24, 1999, respondent issued an order granting the writ of preliminary
injunction and placing the municipality in possession of the areas occupied by
complainants.[4] Complainants sought reconsideration of the Order but respondent
denied the same.[5]
On February 15, 2000, the municipality
demolition which respondent granted
[6]
Consequently, by virtue of a writ of
structures built by complainants on
filed a motion for the issuance of a writ of
in his Order dated February 18, 2000.
demolition issued on March 14, 2000, the
the subject property were demolished.

From April 2000 to January 2002, no pre-trial was conducted or scheduled in Civil Case
No. 618.

On February 1, 2002, the municipality filed a motion for the issuance of an alias writ of
demolition with regard to the remaining structures on the subject property which
respondent Judge granted on February 8, 2002. [7]Complainants brought the incident to
the Court of Appeals via special action for certiorari, docketed as CA-G.R. SP No.
69187.[8]

In his Answer to the affidavit-complaint, respondent contends that the charge against
him being administrative in character, the complaint is now moot and academic as he
had already compulsorily retired from the service. Respondent Judge maintains that
since the issue is judicial in nature, it is the Court of Appeals that can pass upon the
legality of his questioned orders, complainants having brought the issue to the Court of
Appeals on certiorari.[9]

After evaluation, Deputy Court Administrator Jose P. Perez, endorsed by Court

Administrator Presbitero J. Velasco, Jr., recommended the dismissal of the complaint for
lack of merit as the issues raised therein were indeed judicial in nature and similar to
those raised by complainants in their petition for certiorari before the Court of Appeals.
[10]
As a result, the Court dismissed the administrative complaint for lack of merit per
Resolution dated September 18, 2002. [11]

Complainants, however, filed a motion for reconsideration of the Courts dismissal on

the ground that the Court of Appeals had already decided CA-G.R. SP No. 69187 on
August 27, 2002, and annulled respondent Judges questioned orders. The Court of
Appeals held:

On the first issue, we find that the Order granting the preliminary injunction was not
validly and legally issued by the respondent Judge. Section 4, Rule 58 of the Rules of
Court explicitly provides in part, that:
. . .

It should be noted that the respondents application for a writ of preliminary injunction
was not verified and no bond was executed in relation thereto. These are patent
disregard of the rules and an Order granting an application, which did not conform to the
required form and procedure, was obviously issued with certain irregularity.

. . .

Thus, by granting the motion, the reliefs sought by the respondent municipality in its
complaint had already been granted and the respondent Judge had already decided the
main case without any trial. In so doing, [R]espondent judge gravely abused his
discretion in issuing a writ of preliminary injunction which in effect practically granted the
principal relief sought.

. . .

Anent the second issue, we hold that since the writ of demolition was issued pursuant to
the Order granting the writ of preliminary injunction, which was not validly and legally
issued, necessarily, the writ of demolition has no legal basis to stand on its own. [12]

The decision of the Court of Appeals became final and executory on September 20,
2002 and entry of judgment was accordingly made. [13]

In the meantime, in A.M. No. 10929-Ret (Re: Claims for Compulsory Retirement
Benefits under R.A. No. 910 by Judge Teodulo E. Mirasol, Regional Trial Court, Roxas,
Isabela, Branch 23), the Court ordered the release of respondent Judges claim for
compulsory retirement benefits, but set aside the amount of P20,000.00 pending
resolution of the present case.[14] Complainants filed a motion for reconsideration. In his
Comment, respondent Judge points out, if at all, it was merely an error of judgment that
he committed in issuing the questioned orders. [15]

In his Memorandum dated April 17, 2004, DCA Perez, with the endorsement of Court
Administrator Velasco, Jr., finds respondent guilty of gross ignorance of the law and
recommends, as follows:
 (1) Judge Teodulo E. Mirasol, then Presiding Judge, Regional
Trial Court, Branch 23, Roxas, Isabela, be FINED the
amount of Ten Thousand (P10,000.00) Pesos for gross
ignorance of the law, to be deducted from the amount of
Twenty Thousand (P20,000.00) Pesos retained from his
retirement benefits, pursuant to the resolution of the 1st
Division of the Honorable Court dated 11 September 2002,
in AM No. 10929-Ret.;

(3) the remaining Ten Thousand (P10,000.00) Pesos be

RELEASED to Judge Mirasol considering that the Legal
Office, OCA has certified that there is no other pending case
against him;

(4) the instant administrative complaint be re-docketed as a

regular administrative matter against Judge Mirasol so it
may be reflected in his personal files.[16]

The Court adopts the findings and recommendations of the Office of the Court
Administrator.

At the outset, it must be stressed that the decision of the Court of Appeals in CA-G.R.
SP No. 69187 is already final and executory. Thus, for all intents and purposes, parties
herein are bound by the findings of the appellate court with regard to the facts and
issues raised therein which the Court must respect.

Respondent Judge does not deny that he issued the writ of preliminary injunction and
the concomitant writs of demolition based on an unverified application filed by the
Municipality of Roxas, Isabela. However, he claims that his determination of the
propriety of the issuance of the writs of preliminary injunction and demolition is merely
an error of judgment.

Indeed, as a matter of public policy, not every error or mistake of a judge in the
performance of his official duties renders him liable. In the absence of fraud, dishonesty
or corruption, the acts of a judge in his official capacity do not always constitute
misconduct although the same acts may be erroneous. True, a judge may not be
disciplined for error of judgment absent proof that such error was made with a
conscious and deliberate intent to cause an injustice. This does not mean, however,
that a judge need not observe propriety, discreetness and due care in the performance
of his official functions.[17]

Canon 3 of the Code of Judicial Conduct is explicit:

Rule 3.02. In every case, a judge shall endeavor diligently to ascertain the facts and
the applicable law unswayed by partisan interests, public opinion or fear of criticism.

Moreover, Rule 58, Section 4 (a) of the Rules of Court is clear with regard to the
procedure to be followed in the issuance of writs of preliminary injunction, i.e., a
preliminary injunction or temporary restraining order may be granted only when the
application in the action or proceeding is verified, and shows facts entitling the
applicant to the relief demanded. The rule is very explicit in its requirement that a
preliminary injunction may be granted only when the complaint is verified. Absence of
verification makes an application or petition for preliminary injunction patently
insufficient both in form and substance. [18]

Clearly, in the present case, the issuance of the writ of preliminary injunction is not a
mere deficiency in prudence, discretion and judgment on the part of respondent Judge
but a patent disregard of well-known rules and, therefore, constitutive of gross
ignorance of the law.[19] It is a pressing responsibility of judges to keep abreast with the
law and changes therein, as well as with the latest decisions of the Supreme Court.
One cannot seek refuge in a mere cursory acquaintance with the statute and procedural
rules. Ignorance of the law, which everyone is bound to know, excuses no one not
even judges. IGNORANTIA JURIS QUOD QUISQUE SCIRE TENETUR NON
EXCUSAT.[20]

Finally, respondent Judges retirement from office does not render the present
administrative case moot and academic. Complainants filed the case on February 22,
2002, before respondent judge compulsorily retired from office on April 4, 2002. As
such, the Court retains authority to pursue the administrative complaint against him.
Cessation from office because of retirement does not warrant the dismissal of the
administrative complaint filed against him while he was still in service. [21]

WHEREFORE, complainants Motion for Reconsideration of our Resolution dated

September 18, 2002 is GRANTED. The Court finds respondent Judge GUILTY of
GROSS IGNORANCE OF THE LAW and hereby imposes upon him a FINE of Ten
Thousand Pesos (P10,000.00), to be deducted from the amount of Twenty Thousand
Pesos (P20,000.00) retained from his retirement benefits, pursuant to the resolution of
the First Division of the Honorable Court dated September 11, 2002, in A.M. No. 10929-
Ret. The remaining Ten Thousand Pesos (P10,000.00) is ordered RELEASED to Judge
Mirasol.

Let this resolution be attached to the personal files of respondent Judge.

SO ORDERED.
 THIRD DIVISION

[ G.R. NO. 167434, February 19, 2007 ]

SPOUSES RAMON M. NISCE AND A. NATIVIDAD PARAS- NISCE, PETITIONERS,

VS. EQUITABLE PCI BANK, INC., RESPONDENT.

DECISION

CALLEJO, SR., J.:

On November 26, 2002, Equitable PCI Bank [1] (Bank) as creditor-mortgagee filed a
petition for extrajudicial foreclosure before the Office of the Clerk of Court as Ex-
Officio Sheriff of the Regional Trial Court (RTC) of Makati City. It sought to foreclose the
following real estate mortgage contracts executed by the spouses Ramon and Natividad
Nisce over two parcels of land covered by Transfer Certificate of Title (TCT) Nos. S-
83466 and S-83467 of the Registry of Deeds of Rizal: one dated February 26, 1974; two
(2) sets of Additional Real Estate Mortgage dated September 27, 1978 and June 3,
1996; and an Amendment to Real Estate Mortgage dated February 28, 2000. The
mortgage contracts were executed by the spouses Nisce to secure their obligation
under Promissory Note Nos. 1042793 and BD-150369, including a Suretyship
Agreement executed by Natividad. The obligation of the Nisce spouses totaled
P34,087,725.76 broken down as follows:

Spouses Ramon & Natividad Nisce - - - - - - P17,422,285.99

Natividad P. Nisce (surety) - - - - - - - - US$57,306.59
and - - - - - P16,665,439.77[2]
On December 2, 2002, the Ex-Officio Sheriff set the sale at public auction at 10:00 a.m.
on January 14, 2003,[3] or on January 30, 2003 in the event the public auction would not
take place on the earlier setting.

On January 28, 2003, the Nisce spouses filed before the RTC of Makati City a
complaint for nullity of the Suretyship Agreement, damages and legal compensation
with prayer for injunctive relief against the Bank and theEx-Officio Sheriff. They alleged
the following: in a letter [4] dated December 7, 2000 they had requested the bank
(through their lawyer-son Atty. Rosanno P. Nisce) to setoff the peso equivalent of their
obligation against their US dollar account with PCI Capital Asia Limited (Hong Kong), a
subsidiary of the Bank, under Certificate Deposit No. 01612 [5] and Account No. 090-
0104 (Passbook No. 83-3041);[6] the Bank accepted their offer and requested for an
estimate of the balance of their account; they complied with the Banks request and in a
letter dated February 11, 2002, informed it that the estimated balance of their account
as of December 1991 (including the 11.875% per annum interest) was US$51,000.42,
[7]
and that as of December 2002, Natividads US dollar deposit with it amounted to at
least P9,000,000.00; they were surprised when they received a letter from the Bank
demanding payment of their loan account, and later a petition for extrajudicial
foreclosure.

The spouses Nisce also pointed out that the petition for foreclosure filed by the Bank
included the alleged obligation of Natividad as surety for the loan of Vista Norte Trading
Corporation, a company owned and managed by their son Dino Giovanni P. Nisce
(P16,665,439.77 and US$57,306.59). They insisted, however, that the suretyship
agreement was null and void for the following reasons:
(a) x x x [I]t was executed without the knowledge and consent of plaintiff Ramon M.
Nisce, who is by law the administrator of the conjugal partnership;

(b) The suretyship agreement did not redound to the benefit of the conjugal partnership
and therefore did not bind the same;

(c) Assuming, arguendo, that the suretyship contract was valid and binding, any
obligation arising therefrom is not covered by plaintiffs real estate mortgages which
were constituted to secure the payment of certain specific obligations only.[8]
The spouses Nisce likewise alleged that since they and the Bank were creditors and
debtors with respect to each other, their obligations should have been offset by legal
compensation to the extent of their account with the Bank.

To support their plea for a writ of preliminary and prohibitory injunction, the spouses
Nisce alleged that the amount for which their property was being sold at public auction
(P34,087,725.76) was grossly excessive; the US dollar deposit of Natividad with PCI
Capital Asia Ltd. (Hong Kong), and the obligation covered by the suretyship agreement
had not been deducted. They insisted that their property rights would be violated if the
sale at public auction would push through. Thus, the spouses Nisce prayed that they be
granted the following reliefs:

(1) that upon the filing of this Complaint and/or after due notice and summary hearing,
the Honorable Court immediately issue a temporary restraining order (TRO) restraining
defendants, their representatives and/or deputies, and other persons acting for and on
their behalf from proceeding with the extrajudicial foreclosure sale of plaintiffs
mortgaged properties on 30 January 2003 or on any other dates subsequent thereto;

(2) that after due notice and hearing and posting of the appropriate bond, the Honorable
Court convert the TRO to a writ of preliminary prohibitory injunction;

(3) that after trial on the merits, the Honorable Court render judgment

(a) making the preliminary injunction final and permanent;

(b) ordering defendant Bank to set off the present peso value of Mrs. Nisces US dollar
time deposit, inclusive of stipulated interest, against plaintiffs loan obligations with
defendant Bank;

(c) declaring the Deed of Suretyship dated 25 May 1998 null and valid and without any
binding effect as to plaintiff spouses, and ordering defendant Bank to exclude the
amounts covered by said suretyship contract from plaintiffs obligations with defendant
Bank;
(d) ordering defendant Bank to pay plaintiffs the following sums:

(i) at least P3,000,000.00 as moral damages;

(ii) at least P1,500,000.00 as exemplary damages; and

(iii) at least P500,000.00 as attorneys fees and for other expenses of litigation.

Plaintiffs further pray for costs of suit and such other reliefs as may be deemed just and
equitable.[9]

On same day, the Bank filed an Amended Petition with the Office of the Executive
Judge for extrajudicial foreclosure of the Real Estate Mortgage to satisfy the spouses
loan account of P30,533,552.24, exclusive of interests, penalties and other charges;
and the amounts of P16,665,439.77 and US$57,306.59 covered by the suretyship
agreement executed by Natividad Nisce. [10]

In the meantime, the parties agreed to have the sale at public auction reset to January
30, 2003.

In its Answer to the complaint, the Bank alleged that the spouses had no cause of action
for legal compensation since PCI Capital was a different corporation with a separate
and distinct personality; if at all, offsetting may occur only with respect to the spouses
US$500.00 deposit account in its Paseo de Roxas branch.

In the meantime, the Ex-Officio Sheriff set the sale at public auction at 10:00 a.m. on
March 5 and 27, 2003.[11] The spouses Nisce then filed a Supplemental Complaint with
plea for a temporary restraining order to enjoin the sale at public auction. [12] Thereafter,
the RTC conducted hearings on the plaintiffs plea for a temporary restraining order, and
the parties adduced testimonial and documentary evidence on their respective
arguments.

The Case for the Spouses Nisce

Natividad frequently traveled abroad and needed a facility with easy access to foreign
exchange. She inquired from E.P. Nery, the Bank Manager for PCI Bank Paseo de
Roxas Branch, about opening an account. He assured her that she would be able to
access it from anywhere in the world. She and Nery also agreed that any balance of
account remaining at maturity date would be rolled over until further instructions, or until
she terminated the facility.[13] Convinced, Natividad deposited US$20,500.00 on July 19,
1984, and was issued Passbook No. 83-3041. [14] Upon her request, the bank
transferred the US$20,000.00 to PCI Capital Asia Ltd. in Hong Kong via cable order. [15]

On July 11, 1996, the spouses Nisce secured a P20,000,000.00 loan from the Bank
under Promissory Note No. BD-150369. [16] The maturity date of the loan was July 11,
2001, payable in monthly installments at 16.731% interest per annum. To secure the
payment of the loan account, they executed an Amendment to the Real Estate
Mortgage over the properties[17] located in Makati City covered by TCT Nos. S-83466
and S-83467.[18] They later secured another loan of P13,089,936.90 on March 1, 2000
(to mature on March 1, 2005) payable quarterly at 13.9869% interest per annum; this
loan agreement is evidenced by Promissory Note (PN) No. 1042793 [19] and covered by
a Real Estate Mortgage[20] executed on February 28, 2000. They made a partial
payment of P13,866,666.50 on the principal of their loan account covered by PN No.
BD-150369, and P5,348,239.82 on the interests. [21] These payments are evidenced by
receipts and checks.[22] However, there were payments totaling P4,600,000.00 received
by the Bank but were not covered by checks or receipts. [23] As of September 2000, the
balance of their loan account under PN No. BD-150369 was only P4,333,333.46. [24]
They also made partial payment on their loan account under PN No. 1042793 which, as
of May 30, 2001, amounted to P2,218,793.61. [25]

On July 20, 1984, PCI Capital issued Certificate of Deposit No. CD-01612; [26] proof of
receipt of the US$20,000.00 transferred to it by PCI Bank Paseo de Roxas Branch as
requested by Natividad. The deposit account was to earn interest at the rate of
11.875% per annum, and would mature on October 22, 1984, thereafter to be payable
at the office of the depositary in Hong Kong upon presentation of the Certificate of
Deposit.

In June 1991, two sons of the Nisce spouses were stranded in Hong Kong. Natividad
called the Bank and requested for a partial release of her dollar deposit to her sons.
However, she was informed that according to its computer records, no such dollar
account existed. Sometime in November 1991, she submitted her US dollar passbook
with a xerox copy of the Certificate of Deposit for the PCIB to determine the
whereabouts of the account.[27] She reiterated her request to the Bank on January 27,
1992[28] and September 11, 2000.[29]

In the meantime, in 1994, the Equitable Banking Corporation and the PCIB were
merged under the corporate name Equitable PCI Bank.

In a letter dated December 7, 2000, Natividad confirmed to the Bank, through Ms.
Shellane R. Casaysayan, her offer to settle their loan account by offsetting the peso
equivalent of her dollar account with PCI Capital under Account No. 090-0104. [30] Their
son, Atty. Rosanno Nisce, later wrote the Bank, declaring that the estimated balance of
the US dollar account with PCI Capital as of December 1991 was US$51,000.42. [31]
Atty. Nisce corroborated this in his testimony, and stated that Ms. Casaysayan had
declared that she would refer the matter to her superiors. [32] A certain Rene Esteven also
told him that another offer to setoff his parents account had been accepted, and he was
assured that its implementation was being processed. [33] On cross examination, Atty.
Nisce declared that there was no response to his request for setoff, [34] and that Esteven
assured him that the Bank would look for the records of his mothers US dollar savings
deposit.[35] He was later told that the Bank had accepted the offer to setoff the account.
[36]

The Case for the Bank

The Bank adduced evidence that, as of January 31, 2003, the balance of the spouses
account under the two promissory notes, including interest and penalties, was
P30,533,552.24.[37] It had agreed to restructure their loans on March 31, 1998, but they
nevertheless failed to pay despite repeated demands. [38] The spouses had also been
furnished with a statement of their account as of June 2001. Thus, under the terms of
the Real Estate Mortgage and Promissory Notes, it had the right to the remedy of
foreclosure. It insisted that there is no showing in its records that the spouses had
delivered checks amounting to P4,600,000.00.[39]

According to the Bank, Natividads US$20,000.00 deposit with the PCIB Paseo de
Roxas branch was transferred to PCI Capital via cable order, [40] and that it later issued
Certificate of Deposit No. 01612 (Non-transferrable). [41] In a letter dated May 9, 2001, it
informed Natividad that it had acted merely as a conduit in facilitating the transfer of the
funds, and that her deposit was made with PCI Capital and not with PCIB. PCI Capital
had a separate and distinct personality from the PCIB, and a claim against the former
cannot be made against the latter. It was later advised that PCI Capital had already
ceased operations.[42]

The spouses Nisce presented rebuttal documentary evidence to show that PCI Capital
was registered in Hong Kong as a corporation under Registration No. 84555 on
February 27, 1989[43] with an authorized capital stock of 50,000,000 (with par value of
HKD1.00); the PCIB subscribed to 29,039,993 issued shares at the par value of
HKD1.00 per share;[44] on October 25, 2004, the corporate name of PCI Capital was
changed to PCI ExpressPadala (HK) Ltd.;[45] and the stockholdings of PCIB remained at
29,039,999 shares.[46]

On March 24, 2003, the RTC issued an Order [47] granting the spouses Nisces plea for a
writ of preliminary injunction on a bond of P10,000,000.00. The dispositive portion of the
Order reads:

WHEREFORE, in order not to render the judgment ineffectual, upon filing by the
plaintiffs and the approval thereof by the court of a bond in the amount of
Php10,000,000.00, which shall answer for any damage should the court finally decide
that plaintiffs are not entitled thereto, let a writ of preliminary injunction issue enjoining
defendants Equitable-PCI Bank, Atty. Engracio M. Escasinas, Jr., and any person or
entity acting for and in their behalf from proceeding with the extrajudicial foreclosure
sale of TCT Nos. 437678 and 437679 registered in the names of the plaintiffs. [48]

After weighing the parties arguments along with their documentary evidence, the RTC
declared that justice would be best served if a writ of preliminary injunction would be
issued to preserve the status quo. It had yet to resolve the issue of setoff since only
Natividad dealt with the Bank regarding her dollar account. It also had to resolve the
issue of whether the Bank had failed to credit the amount of P4,600,000.00 to the
spouses Nisces account under PN No. BD-150369, and their claim that the Bank had
effectively accelerated the respective maturity dates of their loan. [49]The spouses Nisce
posted the requisite bond which was approved by the RTC.
The Bank opted not to file a motion for reconsideration of the order, and instead
assailed the trial courts order before the CA via petition for certiorari under Rule 65 of
the Rules of Court. The Bank alleged that the RTC had acted without or in excess of its
jurisdiction, or with grave abuse of its discretion amounting to lack or excess of
jurisdiction when it issued the assailed order; [50] the spouses Nisce had failed to prove
the requisites for the issuance of a writ of preliminary injunction; respondents claim that
their account with petitioner had been extinguished by legal compensation has no
factual and legal basis. It further asserted that according to the evidence, Natividad
made the US$20,000.00 deposit with PCI Capital before it merged with Equitable Bank
hence, the Bank was not the debtor of Natividad relative to the dollar account. The
Bank cited the ruling of this Court in Escao v. Heirs of Escao and Navarro [51] to
support its arguments. It insisted that the spouses Nisce had failed to establish
irreparable injury in case of denial of their plea for injunctive relief.

The spouses, for their part, pointed out that the Bank failed to file a motion for
reconsideration of the trial courts order, a condition sine qua non to the filing of a
petition for certiorari under Rule 65 of the Rules of Court. Moreover, the error committed
by the trial court is a mere error of judgment not correctible by certiorari; hence, the
petition should have been dismissed outright by the CA. They reiterated their claim that
they had made a partial payment of P4,600,000.00 on their loan account which
petitioner failed to credit in their favor. The Bank had agreed to debit their US dollar
savings deposit in the PCI Capital as payment of their loan account. They insisted that
they had never deposited their US dollar account with PCI Capital but with the Bank,
and that they had never defaulted on their loan account. Contrary to the Banks claim,
they would have suffered irreparable injury had the trial court not enjoined the
extrajudicial foreclosure of the real estate mortgage.

On December 22, 2004, the CA rendered judgment granting the petition and nullifying
the assailed Order of the RTC. [52] The appellate court declared that a petition
for certiorari under Rule 65 of the Rules of Court may be filed despite the failure to file a
motion for reconsideration, particularly in instances where the issue raised is one of law;
where the error is patent; the assailed order is void, or the questions raised are the
same as those already ruled upon by the lower court. According to the appellate court,
the issue raised before it was purely one of law: whether the loan account of the
spouses was extinguished by legal compensation. Thus, a motion for the
reconsideration of the assailed order was not a prerequisite to a petition
for certiorari under Rule 65.

The appellate court further declared that the trial court committed grave abuse of its
discretion in issuing the assailed order, since no plausible reason was given by the
spouses Nisce to justify the injunction of the extrajudicial foreclosure of the real estate
mortgage. Given their admission that they had not settled the obligations secured by the
mortgage, the Bank had a clear right to seek the remedy of foreclosure.

The CA further declared as devoid of factual basis the spouses Nisces argument that
the Bank should have applied, by way of legal compensation, the peso equivalent of
their time deposit with PCI Capital as partial settlement of their obligations. It held that
for compensation to take place, the requirements set forth in Articles 1278 and 1279 of
the Civil Code of the Philippines must be present; in this case, the parties are not
mutually creditors and debtors of each other. It pointed out that the time deposit which
the spouses Nisce sought to offset against their obligations to the Bank is maintained
with PCI Capital. Even if PCI Capital is a subsidiary of the Bank, compensation cannot
validly take place because the Bank and PCI Capital are two separate and distinct
corporations. It pointed out the settled principle that a corporation has a personality
separate and distinct from its stockholders and from other corporations to which it may
be connected.

The CA further declared that the alleged P4,600,000.00 payment on PN No. BD-150369
was not pleaded in the spouses complaint and supplemental complaint before the
court a quo. What they alleged, aside from legal compensation, was that the mortgage
is not liable for the obligation of Natividad Nisce as surety for the loans obtained by a
trading firm owned and managed by their son. The CA further pointed out that the Bank
precisely amended the petition for foreclosure sale by deleting the claim for Natividads
obligation as surety. The appellate court concluded that the injunctive writ was issued by
the RTC without factual and legal basis. [53]

The spouses Nisce moved to have the decision reconsidered, but the appellate court
denied the motion. They thus filed the instant petition for review on the following
grounds:

5.1. THE HONORABLE COURT OF APPEALS ERRED IN TAKING COGNIZANCE OF

THE PETITION FOR CERTIORARI DESPITE THE BANKS FAILURE TO FILE A
MOTION FOR RECONSIDERATION WITH THE TRIAL COURT.

5.2. THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR

WHEN IT PREMATURELY RULED ON THE MERITS OF THE MAIN CASE.

5.3. THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT

RESPONDENT JUDGE HAD COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN ISSUING A TEMPORARY
RESTRAINING ORDER AND A WRIT OF PRELIMINARY INJUNCTION IN FAVOR OF
THE SPOUSES NISCE.[54]

Petitioners aver that the CA erred in not dismissing respondent Banks petition
for certiorari outright because of the absence of a condition precedent: the filing of a
motion for reconsideration of the assailed Order of the RTC before filing the petition
for certiorari in the CA. They insist that respondent banks failure to file a motion for
reconsideration of the assailed Order deprived the RTC of its option to resolve the issue
of whether it erred in issuing the writ of preliminary injunction in their favor.

Petitioners insist that in resolving whether a petition for a writ of preliminary injunction
should be granted, the trial court and the appellate court are not to resolve the merits of
the main case. In this case, however, the CA resolved the bone of contention of the
parties in the trial court: whether the loan account of petitioners with respondent bank
had been extinguished by legal compensation against petitioner Natividad Nisces US
dollar savings account with PCI Capital in Hong Kong. The CA reversed the assailed
order of the trial court by resolving the main issue in the trial court on its merits, and
declaring that the US dollar savings deposit of the petitioner Natividad Nisce with the
PCI Capital cannot be used to offset the loan account of petitioners with respondent
bank. In fine, according to petitioners, the CA preempted the ruling of the RTC on the
main issue even before the parties could be given an opportunity to complete the
presentation of their respective evidences. Petitioners point out that in the assailed
Order, the RTC declared that to determine whether respondent had credited petitioners
for the amount of P4,600,000.00 under PN No. BD-150369 and whether respondent as
mortgagee-creditor accelerated the maturities of the two (2) promissory notes executed
by petitioner, there was a need for a full-blown trial and an exhaustive consideration of
the evidence of the parties.
Petitioners further insist that a petition for a writ of certiorari is designed solely to correct
errors of jurisdiction and not errors of judgment, such as errors in the findings and
conclusions of the trial court. Petitioners maintain that the trial courts erroneous
findings and conclusions (according to respondent bank) are not the proper subjects for
a petition for certiorari. Contrary to the findings of the CA, they did not admit in the trial
court that they were in default in the payment of their loan obligations. They had always
maintained that they had no outstanding obligation to respondent bank precisely
because their loan account had been offset by the US dollar deposit of petitioner
Natividad Nisce, and that they had made check payments of P4,600,000.00 which
respondent bank had not credited in their favor. Likewise erroneous is the CA ruling that
they would not suffer irreparable damage or injury if their properties would be sold at
public auction following the extrajudicial foreclosure of the mortgage. Petitioners point
out that their conjugal home stands on the subject properties and would be lost if sold at
public auction. Besides, petitioners aver, the injury to respondent bank resulting from
the issuance of a writ of preliminary injunction is amply secured by the P10,000,000.00
injunction bond which they had posted.

For its part, respondent avers that, as held by the CA, the requirement of the filing of a
motion for reconsideration of the assailed Order admits of exceptions, such as where
the issue presented in the appellate court is the same issue presented and resolved by
the trial court. It insists that petitioners failed to prove a clear legal right to injunctive
relief; hence, the trial court committed grave abuse of discretion in issuing a writ of
preliminary injunction.

Respondent maintains that the sole issue involved in the petition for certiorari of
respondent in the CA was whether or not the trial court committed grave abuse of its
discretion in issuing the writ of preliminary injunction. Necessarily, the CA would have to
delve into the circumstances behind such issuance. In so doing, the CA had to consider
and calibrate the testimonial and documentary evidence adduced by the parties.
However, the RTC and the CA did not resolve with finality the threshold factual and legal
issue of whether the loan account of petitioners had been paid in full before it filed its
petition for extrajudicial foreclosure of the real estate mortgage.

The Ruling of the Court

The Petition in the

Court of Appeals
Not Premature

The general rule is that before filing a petition for certiorari under Rule 65 of the Rules of
Court, the petitioner is mandated to comply with a condition precedent: the filing of a
motion for reconsideration of the assailed order, and the subsequent denial of the
court a quo. It must be stressed that a petition for certiorari is an extraordinary remedy
and should be filed only as a last resort. The filing of a motion for reconsideration is
intended to afford the public respondent an opportunity to correct any actual error
attributed to it by way of re-examination of the legal and factual issues. [55] However, the
rule is subject to the following recognized exceptions:

(a) where the order is a patent nullity, as where the court a quo has no jurisdiction; (b)
where the questions raised in the certiorari proceeding have been duly raised and
passed upon by the lower court, or are the same as those raised and passed upon in
the lower court; (c) where there is an urgent necessity for the resolution of the question
and any further delay would prejudice the interests of the Government or of the
petitioner or the subject matter of the action is perishable; (d) where, under the
circumstances, a motion for reconsideration would be useless; (e) where petitioner was
deprived of due process and there is extreme urgency for relief; (f) where, in a criminal
case, relief from an order of arrest is urgent and the granting of such relief by the trial
court is improbable; (g) where the proceedings in the lower court are a nullity for lack of
due process; (h) where the proceedings was ex parte or in which the petitioner had no
opportunity to object; and (i) where the issue raised is one purely of law or public
interest is involved.[56]

As will be shown later, the March 24, 2003 Order of the trial court granting petitioners
plea for a writ of preliminary injunction was issued with grave abuse of discretion
amounting to excess or lack of jurisdiction and thus a nullity. If the trial court issues a
writ of preliminary injunction despite the absence of proof of a legal right and the injury
sustained by the plaintiff, the writ is a nullity. [57]

Petitioners Are Not

Entitled to a Writ of
Preliminary Prohibitory
Injunction
Section 3, Rule 58 of the Rules of Court provides that a preliminary injunction may be
granted when the following have been established:

(a) That the applicant is entitled to the relief demanded, and the whole or part of such
relief consists in restraining the commission or continuance of the act or acts
complained of, or in requiring the performance of an act or acts, either for a limited
period or perpetually;

(b) That the commission, continuance or nonperformance of the act or acts complained
of during the litigation would probably work injustice to the applicant; or

(c) That a party, court, agency or a person is doing, threatening, or is attempting to do,
or is procuring or suffering to be done, some act or acts probably in violation of the
rights of the applicant respecting the subject of the action or proceeding, and tendering
to render the judgment ineffectual.

The grant of a preliminary injunction in a case rests on the sound discretion of the court
with the caveat that it should be made with great caution. The exercise of sound judicial
discretion by the lower court should not be interfered with except in cases of manifest
abuse. Injunction is a preservative remedy for the protection of the parties substantive
rights and interests. The sole aim of a preliminary injunction is to preserve the status
quowithin the last actual status that preceded the pending controversy until the merits of
the case can be heard fully. Moreover, a petition for a preliminary injunction is an
equitable remedy, and one who comes to claim for equity must do so with clean hands.
It is to be resorted to by a litigant to prevent or preserve a right or interest where there is
a pressing necessity to avoid injurious consequences which cannot be remedied under
any standard of compensation. A petition for a writ of preliminary injunction rests upon
an alleged existence of an emergency or of a special reason for such a writ before the
case can be regularly tried. By issuing a writ of preliminary injunction, the court can
thereby prevent a threatened or continued irreparable injury to the plaintiff before a
judgment can be rendered on the claim.[58]

The plaintiff praying for a writ of preliminary injunction must further establish that he or
she has a present and unmistakable right to be protected; that the facts against which
injunction is directed violate such right;[59] and there is a special and paramount
necessity for the writ to prevent serious damages. In the absence of proof of a legal
right and the injury sustained by the plaintiff, an order for the issuance of a writ of
preliminary injunction will be nullified. Thus, where the plaintiffs right is doubtful or
disputed, a preliminary injunction is not proper. The possibility of irreparable damage
without proof of an actual existing right is not a ground for a preliminary injunction. [60]

However, to establish the essential requisites for a preliminary injunction, the evidence
to be submitted by the plaintiff need not be conclusive and complete. [61] The plaintiffs are
only required to show that they have an ostensible right to the final relief prayed for in
their complaint.[62] A writ of preliminary injunction is generally based solely on initial or
incomplete evidence.[63] Such evidence need only be a sampling intended merely to
give the court an evidence of justification for a preliminary injunction pending the
decision on the merits of the case, and is not conclusive of the principal action which
has yet to be decided.[64]

It bears stressing that findings of the trial court granting or denying a petition for a writ of
preliminary injunction based on the evidence on record are merely provisional until after
the trial on the merits of the case shall have been concluded. [65]

The trial court, in granting or dismissing an application for a writ of preliminary injunction
based on the pleadings of the parties and their respective evidence must state in its
order the findings and conclusions based on the evidence and the law. This is to enable
the appellate court to determine whether the trial court committed grave abuse of its
discretion amounting to excess or lack of jurisdiction in resolving, one way or the other,
the plea for injunctive relief. The trial courts exercise of its judicial discretion whether to
grant or deny an application for a writ of preliminary injunction involves the assessment
and evaluation of the evidence, and its findings of facts are ordinarily binding and
conclusive on the appellate court and this Court. [66]

We agree with respondents contention that as creditor-mortgagee, it has the right under
the real estate mortgage contract and the amendment thereto to foreclose
extrajudicially, the real estate mortgage and sell the property at public auction,
considering that petitioners had failed to pay their loans, plus interests and other
incremental amounts as provided for in the deeds. Petitioners contend, however, that if
respondent bank extrajudicially forecloses the real estate mortgage and has petitioners
property sold at public auction for an amount in excess of the balance of their loan
account, petitioners contractual and substantive rights under the real estate mortgage
would be violated; in such a case, the extrajudicial foreclosure sale may be enjoined by
a writ of preliminary injunction.

Respondent bank sought the extrajudicial foreclosure of the real estate mortgage and
was to sell the property at public auction for P30,533,552.24. The amount is based on
Promissory Notes No. 1042793 and BD-150369, interests, penalty charges, and
attorneys fees, as of January 31, 2003, exclusive of all interests, penalties, other
charges, and foreclosure costs accruing thereafter.[67] Petitioners asserted before the
trial court that respondents sought the extrajudicial foreclosure of the mortgaged deed
for an amount far in excess of what they owed, because the latter failed to credit
P4,600,000.00 paid in checks but without any receipts having been issued therefor; and
the P9,000,000.00 peso equivalent of the US$20,000.00 deposit of petitioner Natividad
Nisce with PCIB under Passbook No. 83-3041 and Certificate of Deposit No. CD-01612
issued by PCI Capital on July 23, 1984. Petitioners maintain that the US$20,000.00
dollar deposit should be setoff against their account with respondent against their loan
account, on their claim that respondent is their debtor insofar as said deposit is
concerned.

It was the burden of petitioners, as plaintiffs below, to adduce preponderant evidence to

prove their claim that respondent bank was the debtor of petitioner Natividad Nisce
relative to her dollar deposit with PCIB, and later transferred to PCI Capital in Hong
Kong, a subsidiary of respondent Bank. Petitioners, however, failed to discharge their
burden.

Under Article 1278 of the New Civil Code, compensation shall take place when two
persons, in their own right, are creditors and debtors of each other. In order that
compensation may be proper, petitioners were burdened to establish the following:

(1) That each one of the obligors be bound principally, and that he be at the same time a
principal creditor of the other;

(2) That both debts consist in a sum of money, or if the things due are consumable, they
be of the same kind, and also of the same quality if the latter has been stated;

(3) That the two debts be due;

(4) That they be liquidated and demandable;

(5) That over neither of them there be any retention or controversy, commenced by third
persons and communicated in due time to the debtor.[68]

Compensation takes effect by operation of law when all the requisites mentioned in
Article 1279 of the New Civil Code are present and extinguishes both debts to the
concurrent amount even though the creditors and debtors are not aware of the
compensation. Legal compensation operates even against the will of the interested
parties and even without their consent. [69] Such compensation takes place ipso jure; its
effects arise on the very day on which all requisites concur. [70]

As its minimum, compensation presupposes two persons who, in their own right and as
principals, are mutually indebted to each other respecting equally demandable and
liquidated obligations over any of which no retention or controversy commenced and
communicated in due time to the debtor exists. Compensation, be it legal or
conventional, requires confluence in the parties of the characters of mutual debtors and
creditors, although their rights as such creditors or their obligations as such debtors
need not spring from one and the same contract or transaction. [71]

Article 1980 of the New Civil Code provides that fixed, savings and current deposits of
money in banks and similar institutions shall be governed by the provisions concerning
simple loans. Under Article 1953, of the same Code, a person who secures a loan of
money or any other fungible thing acquires the ownership thereof, and is bound to pay
the creditor an equal amount of the same kind and quality. The relationship of the
depositors and the Bank or similar institution is that of creditor-debtor. Such deposit may
be setoff against the obligation of the depositor with the bank or similar institution.

When petitioner Natividad Nisce deposited her US$20,500.00 with the PCIB on July 19,
1984, PCIB became the debtor of petitioner. However, when upon petitioners request,
the amount of US$20,000.00 was transferred to PCI Capital (which forthwith issued
Certificate of Deposit No. 01612), PCI Capital, in turn, became the debtor of Natividad
Nisce. Indeed, a certificate of deposit is a written acknowledgment by a bank or
borrower of the receipt of a sum of money or deposit which the Bank or borrower
promises to pay to the depositor, to the order of the depositor; or to some other person;
or to his order whereby the relation of debtor and creditor between the bank and the
depositor is created.[72] The issuance of a certificate of deposit in exchange for currency
creates a debtor-creditor relationship. [73]

Admittedly, PCI Capital is a subsidiary of respondent Bank. Even then, PCI Capital [PCI
Express Padala (HK) Ltd.] has an independent and separate juridical personality from
that of the respondent Bank, its parent company; hence, any claim against the
subsidiary is not a claim against the parent company and vice versa.[74] The evidence on
record shows that PCIB, which had been merged with Equitable Bank, owns almost all
of the stocks of PCI Capital. However, the fact that a corporation owns all of the stocks
of another corporation, taken alone, is not sufficient to justify their being treated as one
entity. If used to perform legitimate functions, a subsidiarys separate existence shall be
respected, and the liability of the parent corporation, as well as the subsidiary shall be
confined to those arising in their respective business. [75] A corporation has a separate
personality distinct from its stockholders and from other corporations to which it may be
conducted. This separate and distinct personality of a corporation is a fiction created by
law for convenience and to prevent injustice.

This Court, in Martinez v. Court of Appeals [76] held that, being a mere fiction of law,
peculiar situations or valid grounds can exist to warrant, albeit sparingly, the disregard
of its independent being and the piercing of the corporate veil. The veil of separate
corporate personality may be lifted when, inter alia, the corporation is merely an adjunct,
a business conduit or an alter ego of another corporation or where the corporation is so
organized and controlled and its affairs are so conducted as to make it merely an
instrumentality, agency, conduit or adjunct of another corporation; or when the
corporation is used as a cloak or cover for fraud or illegality; or to work injustice; or
where necessary to achieve equity or for the protection of the creditors. In those cases
where valid grounds exist for piercing the veil of corporate entity, the corporation will be
considered as a mere association of persons. The liability will directly attach to them.
[77]

The Court likewise declared in the same case that the test in determining the application
of the instrumentality or alter ego doctrine is as follows:

1. Control, not mere majority or complete stock control, but complete dominion, not only
of finances but of policy and business practice in respect to the transaction attacked so
that the corporate entity as to this transaction had at the time no separate mind, will or
existence of its own;

2. Such control must have been used by the defendant to commit fraud or wrong, to
perpetuate the violation of a statutory or other positive legal duty, or dishonest and
unjust act in contravention of plaintiffs legal rights; and

3. The aforesaid control and breach of duty must proximately cause the injury or unjust
loss complaint of.

The Court emphasized that the absence of any one of these elements prevents
piercing the corporate veil. In applying the instrumentality or alter ego doctrine, the
courts are concerned with reality and not form, with how the corporation operated and
the individual defendants relationship to that operation. [78]

Petitioners failed to adduce sufficient evidence to justify the piercing of the veil of
corporate entity and render respondent Bank liable for the US$20,000.00 deposit of
petitioner Natividad Nisce as debtor.

On hindsight, petitioners could have spared themselves the expenses and tribulation of
a litigation had they just withdrawn their deposit from the PCI Capital and remitted the
same to respondent. However, petitioner insisted on their contention of setoff.

On the P4,600,000.00 paid in checks allegedly remitted by petitioners to respondent in

partial payment of their loan account, petitioners failed to adduce in evidence the
checks to show that, indeed, the checks were drawn by petitioners and delivered to
respondent, and that respondent was able to cash the checks. The only evidence
adduced by petitioners is a piece of paper listing the serial numbers of the checks and
the amount of each check:

PAYMENTS MADE & RECEIVED BY EBC BUT W/O RECEIPTS

1. Dec. 29, 1997 - EBC-0000039462 -P2,000,000.00

2. Jan. 22, 1998 - BC-213016118C - 1,000,000.00
3. Feb. 24, 1998 - UB -0000074619 - 800,000.00
 4. Mar. 23, 1998 - EBC-213016121C - 800,000.00
P 4,600,000.00

IN LIGHT OF ALL THE FOREGOING, the petition is DENIED for lack of merit. The
Decision of the Court of Appeals is AFFIRMED. Costs against petitioners.

SO ORDERED.

SECOND DIVISION
[ G.R. No. 157494, December 10, 2004 ]
BACOLOD CITY WATER DISTRICT, PETITIONER, VS. THE HON. EMMA C.
LABAYEN, PRESIDING JUDGE, RTC OF BACOLOD CITY, BR. 46 AND THE CITY OF
BACOLOD, RESPONDENTS.

DECISION
PUNO, J.:
First, the chronology of facts. Petitioner Bacolod City Water District (BACIWA) is a water
district established pursuant to Presidential Decree No. 198 as a government-owned
and controlled corporation with original charter. It is in the business of providing safe
and potable water to Bacolod City.

Public respondent City of Bacolod is a municipal corporation created by Commonwealth

Act No. 326, otherwise known as the Charter of Bacolod.

On March 26, 1999, respondent City filed a case for Injunction With a Prayer for
Temporary Restraining Order And/Or Preliminary Mandatory Injunction against
petitioner in the sala of public respondent judge. The petition stated that on January 15,
1999, BACIWA published in the Visayan Daily Star,[1] a local paper of general
circulation, a Schedule of Automatic Water Rates Adjustments for the years 1999, 2000
and 2001. The rates were supposed to take effect seven (7) days after its posting in the
local papers or on January 22, 1999. The increase was aborted after petitioner
unilaterally suspended the January 22, 1999 scheduled implementation. On March 15,
1999, however, petitioner announced that the rate hike will be implemented on April 1,
1999. [2]

Respondent City opposed. It alleged that the proposed water rates would violate due
process as they were to be imposed without the public hearing required under Letter of
Instructions No. 700[3] and Presidential Decree No. 1479.[4] Hence, it prayed that before
the hearing of the main case, a temporary restraining order or a preliminary injunction
be issued.[5]

On March 30, 1999, the court a quo issued an Order[6] summoning the parties with their
counsels to attend the preliminary hearing for the issuance of a temporary restraining
order or preliminary mandatory injunction. On April 8, 1999, it required the parties to
simultaneously submit their respective memoranda on whether it had jurisdiction over
the case and whether a public hearing was conducted re the proposed increase in water
rates.[7]

Petitioner filed its Position Paper dated April 15, 1999. It attached documents
evidencing the conduct of extensive and lengthy public hearings in fifty-eight (58) of the
sixty-one (61) barangays of Bacolod City. It opined that original jurisdiction over cases
on rate review is vested in the Local Water Utilities Administration (LWUA); appellate
jurisdiction is vested in the National Water Resources [Board] (NWRB) whose decisions
shall be appealable to the Office of the President. [8]

On May 5, 1999, petitioner also filed a Motion to Dismiss. In an Order [9] dated May 7,
1999, the court directed respondent City to file its Opposition to petitioners Motion to
Dismiss within fifteen (15) days.

On June 17, 1999, respondent City filed a Motion to Set [for] Hearing [10] its application
for a temporary restraining order or preliminary mandatory injunction. It alleged that the
parties had already submitted their respective memoranda and it has already submitted
its Opposition to petitioners Motion to Dismiss. It also alleged that petitioner had
already effected the water rates increase and collection, hence, causing irreparable
injury to the public.

Petitioner opposed the Motion. On July 20, 1999, respondent City filed its Reply to
Opposition and reiterated that the application for the issuance of a temporary restraining
order or preliminary mandatory injunction be heard since petitioner continued to violate
the right of the public to due process and it might take time before the case would be
finally resolved.[11] On the same date, petitioner filed a Manifestation and
Motion[12] stating that the hearing may no longer be necessary as the respective
positions of both parties have already been presented and amplified in their pleadings
and memoranda.

On July 22, 1999, respondent trial court issued an Order [13] stating that there was no
more need to hear the caseon the merits[14] as both parties have already submitted
their position papers and documents to prove their respective allegations.

On July 23, 1999, petitioner filed its Reply [15] to respondent Citys Opposition to the
Motion to Dismiss reiterating that petitioner failed to exhaust administrative remedies
provided by law hence the petition be dismissed for utter lack of merit.

After a hiatus of nearly seven (7) months, or on February 18, 2000, respondent City filed
an Urgent Motion for the Issuance of Temporary Restraining Order And[/]Or Writ of
Preliminary Injunction[16] praying that the case be set for hearing on February 24, 2000.
On the same date requested, respondent court heard respondents application for
temporary restraining order and issued an Order [17] commanding petitioner to stop,
desist and refrain from implementing the proposed water rates for the year 2000 which
were then supposed to take effect on March 1, 2000.

On March 7, 2000, petitioner filed an Urgent Motion for Reconsideration and Dissolution
of the Temporary Restraining Order.[18] Respondent court a quo issued on March 10,
2000 an Order[19] directing respondent City to file an Opposition to the Urgent Motion. In
its Opposition, respondent City[20] contended that the temporary restraining order issued
was not infirmed with procedural and substantive defects. It also averred that
respondent court has jurisdiction over the case since the sole question of the lack of
public hearing does not require the special knowledge or expertise of an administrative
agency and may be resolved by respondent court, hence the doctrine of primary
jurisdiction does not apply.

Respondent court continued with the proceedings by receiving the evidence of

petitioner in support of its Motion for Reconsideration and Dissolution of Temporary
Restraining Order. It further issued Orders dated March 17, 2000 [21] and March 20,
2000.[22]

On April 6, 2000, respondent court issued an Order [23] finding petitioners Urgent Motion
for Reconsideration and Dissolution of Temporary Restraining Order moot and
academic considering petitioners compliance of said temporary restraining order.

Four (4) days after, in an Order [24] dated April 10, 2000, it denied petitioners Motion to
Dismiss for lack of merit.

On April 19, 2000, respondent City filed a Manifestation praying that respondent trial
court issue a writ of preliminary injunction against petitioner, stating thus:

A Temporary Restraining Order was issued against the respondents which, however,
expired before the parties were able to finish the presentation of their respective
witnesses and evidences;
The instant case was submitted for resolution and decision of this Honorable Court
during the last week of March but while awaiting the decision of this Honorable Court,
several complaints had reached the petitioner that the respondents had already
reflected in the water billings for the month of April the new water rates for the year
2000;

x x x [25]
Petitioner, for its part, filed a Motion for Reconsideration [26] of respondent trial courts
Order denying its Motion to Dismiss. Respondent City filed an Opposition to [the] Motion
for Reconsideration[27] on June 1, 2000.

Respondent court did not act upon petitioners Motion for Reconsideration until
respondent City filed an [Ex Parte] Motion for Speedy Resolution [28] of the case on
October 6, 2000 praying that the case be resolved before the year 2000 ends in order to
prevent the implementation of the water rates increase for the year 2001 which was to
be imposed allegedly without the benefit of a public hearing.

On December 21, 2000, respondent court issued the assailed Decision [29] granting the
final injunction which allegedly confirmed the previous preliminary injunction.

Petitioner filed its Motion for Reconsideration [30] of the assailed Decision on January 11,
2001 asserting, among others, that the case was not yet ripe for decision when the
court granted the final injunction, the petitioner having had no opportunity to file its
answer, avail of the mandatory pre-trial conference and have the case tried on the
merits.

Respondent court denied the Motion for Reconsideration for lack of merit in an
Order[31] dated January 24, 2001. Petitioner then filed a special civil action for certiorari
under Rule 65 in the Court of Appeals. It alleged that public respondent judge acted
without or in excess of jurisdiction and/or with grave and patent abuse of discretion
amounting to lack or excess of jurisdiction when she issued the final injunction in
disregard of petitioners basic right to due process. [32]

The Court of Appeals dismissed the petition for review on certiorari, ratiocinating thus:
In the case at bar, the [O]rder of public respondent dated 24 February 2000, though
termed by BACIWA as a temporary restraining order, is in fact a preliminary injunction.
The period of the restraint was not limited. By its wordings, it can be safely inferred that
the increased water rates must not be effected until final disposition of the main case.
This note of semi-permanence simply cannot issue from a mere temporary restraining
order. It must be further noted that the temporary restraining order has been elevated to
the same level as the preliminary injunction in the procedure, grounds and requirements
of its obtention by S[ection] 4, Rule 58. Thus, to set [a] distinction, the present practice
is to categorically refer to it as a temporary restraining order. In which case, the
omission by the public respondent in referring to the 24 February 2000 order as a
temporary restraining order could not have been a mere oversight but deliberate. [33]
Resorting to this Court, petitioner raises the following issues:
I

THE COURT OF APPEALS GRAVELY ERRED WHEN IT FAILED AND REFUSED TO

RULE THAT RESPONDENT COURT HAD ACTED WITHOUT OR IN EXCESS OF
JURISDICTION AND/OR WITH GRAVE ABUSE OF DISCRETION FOR ARBITRARILY
AND CAPRICIOUSLY RENDERING A DECISION PURPORTING TO ISSUE A FINAL
INJUNCTION AND CONFIRMING ITS ALLEGED PRELIMINARY INJUNCTION,
DESPITE THE FACT THAT:
A. NO PRELIMINARY INJUNCTION HAD BEEN ISSUED;
B. THE RESPONDENT LOWER COURT DID NOT RESOLVE HEREIN
PETITIONERS MOTION FOR RECONSIDERATION OF THE ORDER DENYING
PETITIONERS MOTION TO DISMISS;

C. THE HEREIN PETITIONER HAD NOT YET FILED ITS ANSWER TO THE
PETITION;

D. THERE WAS STILL NO JOINDER OF THE ISSUES SINCE NO ANSWER HAD

YET BEEN FILED;

E. THE MANDATORY PRE-TRIAL CONFERENCE WAS NOT YET CONDUCTED;

F. THERE WAS NO TRIAL ON THE MERITS FOR THE MAIN CASE.

II

THE COURT OF APPEALS GRAVELY ERRED WHEN IT INSISTED THAT THE 24

FEBRUARY 2000 ORDER (ANNEX R) ISSUED BY THE TRIAL COURT WAS A
PRELIMINARY INJUNCTION WHEN THE RECORDS CLEARLY AND INDUBITABLY
SHOW THAT IT WAS A TEMPORARY RESTRAINING ORDER (TRO).

III

BY DISMISSING THE PETITION FOR CERTIORARI, THE COURT OF APPEALS

GRAVELY ERRED WHEN IT EFFECTIVELY PREVENTED PETITIONER FROM
FULLY VENTILATING ITS CASE IN THE MAIN ACTION DUE TO THE IRREGULAR
AND CONFUSED PROCEEDINGS CONDUCTED BY THE RESPONDENT COURT.[34]
We rule in favor of petitioner.

The initial issue is the proper characterization of the Order dated February 24, 2000.

The sequence of events and the proceedings that transpired in the trial court make a
clear conclusion that the Order issued was a temporary restraining order and not a
preliminary injunction.

First. We quote the pertinent parts of the questioned Order:

xxx
When this motion was called for hearing wherein both parties have argued exhaustedly
their respective sides, this court denied the ten (10) days extension for further
amplification of the arguments of the respondent to oppose the said motion for issuance
of a temporary restraining order.

It appearing therefore, that the acts of the defendant will actually affect the plaintiff
before the decision of this court can be rendered and in order to afford the court to pass
on the issues without the same becoming moot and academic and considering the
urgency of the matter that immediate action should be taken, and pursuant to
Administrative Circular No. 6, Paragraph 4 and sub-paragraph 15 and The Interim Rules
and Guidelines [set forth] by the Rules of Court, this court hereby orders the
respondent[,] its agents, representatives or any person acting in his behalf to
stop, desist and refrain from implementing in their billings the new water rate
increase which will start on March 1, 2000. The Deputy Provincial Sheriff of this court
is hereby ordered to furnish copy of this order to the respondent Bacolod City Water
District as well as to its agents or representatives acting [o]n his behalf.

x x x [35] (emphases supplied)

It can be gleaned from the afore-quoted Order that what the trial court issued was a
temporary restraining order and not a preliminary injunction. The trial court has always
referred to it as a temporary restraining order in the succeeding Orders it issued on
March 10, 2000[36] and April 6, 2000.[37]

The parties, in their succeeding pleadings, [38] also referred to the assailed Order as a
temporary restraining order. The petitioner filed an Urgent Motion for Reconsideration
and Dissolution of Temporary Restraining Order (TRO) [39] on March 1, 2000. This was
opposed by respondent City itself in its Opposition to Motion for Reconsideration and
Dissolution of Temporary Restraining Order (TRO)[40] dated March 14, 2000. Further,
respondent City, in its Manifestation dated April 19, 2000 stated, viz:
xxx

A Temporary Restraining Order was issued against the respondents which, however,
expired before the parties were able to finish the presentation of their respective
witnesses and evidences;
xxx

WHEREFORE, it is most respectfully prayed that while waiting for the decision
and order of the Honorable Court, a preliminary injunction as prayed for in the
petition be issued against the respondents.

x x x[41] (emphases supplied)

It can be gleaned from the foregoing that both parties and respondent trial court have
consistently referred to the directive as a temporary restraining order. It was only in the
respondent courts assailed Decision that the Order was referred to as a preliminary
injunction, viz:
xxx

This Court therefore grants the final injunction prayed for restraining the respondent
from the commission of the act complained of for the year 2001 and hereby confirming
the preliminary injunction previously ordered.

x x x [42] (emphasis supplied)

Again, it was only when petitioner expressed its vehement objection on the ruling that
the final injunction confirmed the preliminary injunction previously issued, when the
respondent City and the respondent trial court started to insist that the questioned Order
was a preliminary injunction. Given the previous undeviating references to it as a
temporary restraining order, respondents cannot now consider it as a preliminary
injunction to justify the validity of the assailed Decision. The attendant facts and
circumstances clearly show that the respondent trial court issued a temporary
restraining order.

Second. Injunction is a judicial writ, process or proceeding whereby a party is ordered

to do or refrain from doing a certain act. It may be the main action or merely a
provisional remedy for and as an incident in the main action. [43]

The main action for injunction is distinct from the provisional or ancillary remedy of
preliminary injunction which cannot exist except only as part or an incident of an
independent action or proceeding. As a matter of course, in an action for injunction, the
auxiliary remedy of preliminary injunction, whether prohibitory or mandatory, may issue.
Under the law, the main action for injunction seeks a judgment embodying a final
injunction which is distinct from, and should not be confused with, the provisional
remedy of preliminary injunction, the sole object of which is to preserve the status
quo until the merits can be heard. [44] A preliminary injunction is granted at any stage of
an action or proceeding prior to the judgment or final order. It persists until it is dissolved
or until the termination of the action without the court issuing a final injunction. [45]

A restraining order, on the other hand, is issued to preserve the status quo until the
hearing of the application for preliminary injunction which cannot be issued ex
parte. Under Rule 58[46] of the Rules of Court, a judge may issue a temporary restraining
order with a limited life of twenty (20) days from date of issue. If before the expiration of
the twenty (20)-day period the application for preliminary injunction is denied, the
temporary restraining order would be deemed automatically vacated. If no action is
taken by the judge on the application for preliminary injunction within the said twenty
(20) days, the temporary restraining order would automatically expire on the 20th day
by the sheer force of law, no judicial declaration to that effect being necessary. [47]

Hence, in the case at bar, since no preliminary injunction was issued, the temporary
restraining order granted automatically expired after twenty (20) days under the Rules.
The fact that respondent court merely ordered the respondent[,] its agents,
representatives or any person acting in his behalf to stop, desist and refrain from
implementing in their billings the new water rate increase which will start on
March 1, 2000[48] without stating the period for the restraint does not convert the
temporary restraining order to a preliminary injunction.

The rule against the non-extendibility of the twenty (20)-day limited period of effectivity
of a temporary restraining order is absolute if issued by a regional trial court. The failure
of respondent court to fix a period for the ordered restraint did not lend the temporary
restraining order a breath of semi-permanence which can only be characteristic of a
preliminary injunction. The twenty (20)-day period provided by the Rules of Court should
be deemed incorporated in the Order where there is an omission to do so. It is because
of this rule on non-extendibility that respondent City was prompted to move that
hearings be set for its application of a preliminary injunction. Respondent City cannot
take advantage of this omission by respondent trial court.

Third. Even if we assume that the issued Order was a preliminary injunction, petitioner
is correct in contending that the assailed Decision is premature.

The records reveal that respondent court did not resolve petitioners Motion for
Reconsideration of the Order denying its Motion to Dismiss before it issued the assailed
Decision. Consequently, there was no answer filed by petitioner, no joinder of issues, no
mandatory pre-trial conference, and no trial on the merits, yet, a Decision was handed
down by the respondent trial court.

The short circuiting of the procedural process denied the petitioner due process of law.
It was not able to allege its defenses in an answer and prove them in a hearing. The
convoluted procedure allowed by the respondent trial court and the pleadings filed by
the parties which are not models of clarity certainly created confusion. But this
confusion should not be seized as a reason to deny a party the constitutional right to
due process. Over and above every desideratum in litigation is fairness. All doubts
should be resolved in favor of fairness.

IN VIEW WHEREOF, the petition is GRANTED. The Decision and Resolution of the
Court of Appeals dated November 27, 2002 and February 28, 2003, respectively,
are REVERSED and SET ASIDE. The case is remanded to the court a quo for further
proceedings.

SO ORDERED.

[46]
RULE 58, SECTION 1. Preliminary Injunction defined; classes. A preliminary
injunction is an order granted at any stage of an action or proceeding prior to the
judgment or final order, requiring a party or a court, agency or a person to refrain from a
particular act or acts. It may also require the performance of a particular act or acts, in
which case it shall be known as a preliminary mandatory injunction.

xxx

SEC. 5. Preliminary Injunction not granted without notice; exception. No preliminary

injunction shall be granted without hearing and prior notice to the party or person sought
to be enjoined. If it shall appear from facts shown by affidavits or by the verified
application that great or irreparable injury would result to the applicant before the
matter can be heard on notice, the court to which the application for preliminary
injunction was made, may issue ex parte a temporary restraining order to be
effective only for a period of twenty (20) days from service on the party or person
sought to be enjoined, except as herein provided. Within the said twenty-day period,
the court must order said party or person to show cause at a specified time and place,
why the injunction should not be granted, determine within the same period whether or
not the preliminary injunction shall be granted, and accordingly issue the corresponding
order.

xxx

In the event that the application for preliminary injunction is denied or not
resolved within the said period, the temporary restraining order is deemed
automatically vacated. The effectivity of a temporary restraining order is not
extendible without need of any judicial declaration to that effect and no court
shall have authority to extend or renew the same on the same ground for which it
was issued.

However, if issued by the Court of Appeals or a member thereof, the temporary

restraining order shall be effective for sixty (60) days from service on the party or person
sought to be enjoined. (emphases supplied)
 - Receivership
- Replevin
- Support pendent
lite
 THIRD DIVISION

[ G.R. NO. 148132, January 23, 2008 ]

SMART COMMUNICATIONS, INC., PETITIONER, VS. REGINA M. ASTORGA,

RESPONDENT.

G.R. NO. 151079

SMART COMMUNICATIONS, INC., PETITIONER, VS. REGINA M. ASTORGA,

RESPONDENT.

G.R. NO. 151372

REGINA M. ASTORGA, PETITIONER, VS. SMART COMMUNICATIONS, INC. AND

ANN MARGARET V. SANTIAGO, RESPONDENTS.

DECISION

NACHURA, J.:

For the resolution of the Court are three consolidated petitions for review
on certiorari under Rule 45 of the Rules of Court. G.R. No. 148132 assails the February
28, 2000 Decision[1] and the May 7, 2001 Resolution[2] of the Court of Appeals (CA) in
CA-G.R. SP. No. 53831. G.R. Nos. 151079 and 151372 question the June 11, 2001
Decision[3] and the December 18, 2001 Resolution [4] in CA-G.R. SP. No. 57065.

Regina M. Astorga (Astorga) was employed by respondent Smart Communications,

Incorporated (SMART) on May 8, 1997 as District Sales Manager of the Corporate
Sales Marketing Group/ Fixed Services Division (CSMG/FSD). She was receiving a
monthly salary of P33,650.00. As District Sales Manager, Astorga enjoyed additional
benefits, namely, annual performance incentive equivalent to 30% of her annual gross
salary, a group life and hospitalization insurance coverage, and a car plan in the amount
of P455,000.00.[5]

In February 1998, SMART launched an organizational realignment to achieve more

efficient operations. This was made known to the employees on February 27, 1998.
[6]
Part of the reorganization was the outsourcing of the marketing and sales force. Thus,
SMART entered into a joint venture agreement with NTT of Japan, and formed SMART-
NTT Multimedia, Incorporated (SNMI). Since SNMI was formed to do the sales and
marketing work, SMART abolished the CSMG/FSD, Astorga's division.

To soften the blow of the realignment, SNMI agreed to absorb the CSMG personnel who
would be recommended by SMART. SMART then conducted a performance evaluation
of CSMG personnel and those who garnered the highest ratings were favorably
recommended to SNMI. Astorga landed last in the performance evaluation, thus, she
was not recommended by SMART. SMART, nonetheless, offered her a supervisory
position in the Customer Care Department, but she refused the offer because the
position carried lower salary rank and rate.

Despite the abolition of the CSMG/FSD, Astorga continued reporting for work. But on
March 3, 1998, SMART issued a memorandum advising Astorga of the termination of
her employment on ground of redundancy, effective April 3, 1998. Astorga received it on
March 16, 1998.[7]

The termination of her employment prompted Astorga to file a Complaint [8] for illegal
dismissal, non-payment of salaries and other benefits with prayer for moral and
exemplary damages against SMART and Ann Margaret V. Santiago (Santiago). She
claimed that abolishing CSMG and, consequently, terminating her employment was
illegal for it violated her right to security of tenure. She also posited that it was illegal for
an employer, like SMART, to contract out services which will displace the employees,
especially if the contractor is an in-house agency.[9]

SMART responded that there was valid termination. It argued that Astorga was
dismissed by reason of redundancy, which is an authorized cause for termination of
employment, and the dismissal was effected in accordance with the requirements of the
Labor Code. The redundancy of Astorga's position was the result of the abolition of
CSMG and the creation of a specialized and more technically equipped SNMI, which is
a valid and legitimate exercise of management prerogative. [10]

In the meantime, on May 18, 1998, SMART sent a letter to Astorga demanding that she
pay the current market value of the Honda Civic Sedan which was given to her under
the company's car plan program, or to surrender the same to the company for proper
disposition.[11] Astorga, however, failed and refused to do either, thus prompting SMART
to file a suit for replevin with the Regional Trial Court of Makati (RTC) on August 10,
1998. The case was docketed as Civil Case No. 98-1936 and was raffled to Branch 57.
[12]

Astorga moved to dismiss the complaint on grounds of (i) lack of jurisdiction; (ii) failure
to state a cause of action; (iii) litis pendentia; and (iv) forum-shopping. Astorga posited
that the regular courts have no jurisdiction over the complaint because the subject
thereof pertains to a benefit arising from an employment contract; hence, jurisdiction
over the same is vested in the labor tribunal and not in regular courts. [13]

Pending resolution of Astorga's motion to dismiss the replevin case, the Labor Arbiter
rendered a Decision[14]dated August 20, 1998, declaring Astorga's dismissal from
employment illegal. While recognizing SMART's right to abolish any of its departments,
the Labor Arbiter held that such right should be exercised in good faith and for causes
beyond its control. The Arbiter found the abolition of CSMG done neither in good faith
nor for causes beyond the control of SMART, but a ploy to terminate Astorga's
employment. The Arbiter also ruled that contracting out the functions performed by
Astorga to an in-house agency like SNMI was illegal, citing Section 7(e), Rule VIII-A of
the Rules Implementing the Labor Code.

Accordingly, the Labor Arbiter ordered:

WHEREFORE, judgment is hereby rendered declaring the dismissal of [Astorga] to be

illegal and unjust. [SMART and Santiago] are hereby ordered to:
1. Reinstate [Astorga] to [her] former position or to a substantially equivalent position,
without loss of seniority rights and other privileges, with full backwages, inclusive of
allowances and other benefits from the time of [her] dismissal to the date of
reinstatement, which computed as of this date, are as follows:

(a) Astorga

BACKWAGES; (P33,650.00 x= P 134,600.0

4 months) 0
UNPAID SALARIES (February
15, 1998-
April 3, 1998
February 15-28, 1998 = P 16,823.00
March 1-31, [1998] = P 33,650.00
April 1-3, 1998 = P 3,882.69

CAR MAINTENANCE
ALLOWANCE
(P2,000.00 x 4) = P 8,000.00
FUEL ALLOWANCE (300
liters/mo. x
4 mos. at P12.04/liter) = P 14,457.83
TOTAL = P 211,415.52

x x x x

3. Jointly and severally pay moral damages in the amount of P500,000.00 x x x and
exemplary damages in the amount of P300,000.00. x x x

4. Jointly and severally pay 10% of the amount due as attorney's fees.

SO ORDERED.[15]
Subsequently, on March 29, 1999, the RTC issued an Order [16] denying Astorga's motion
to dismiss the replevincase. In so ruling, the RTC ratiocinated that:

Assessing the [submission] of the parties, the Court finds no merit in the motion to
dismiss.

As correctly pointed out, this case is to enforce a right of possession over a company
car assigned to the defendant under a car plan privilege arrangement. The car is
registered in the name of the plaintiff. Recovery thereof via replevin suit is allowed by
Rule 60 of the 1997 Rules of Civil Procedure, which is undoubtedly within the
jurisdiction of the Regional Trial Court.

In the Complaint, plaintiff claims to be the owner of the company car and despite
demand, defendant refused to return said car. This is clearly sufficient statement of
plaintiff's cause of action.

Neither is there forum shopping. The element of litis penden[t]ia does not appear to
exist because the judgment in the labor dispute will not constitute res judicata to bar the
filing of this case.

WHEREFORE, the Motion to Dismiss is hereby denied for lack of merit.

SO ORDERED.[17]

Astorga filed a motion for reconsideration, but the RTC denied it on June 18, 1999. [18]

Astorga elevated the denial of her motion via certiorari to the CA, which, in its February
28, 2000 Decision,[19]reversed the RTC ruling. Granting the petition and, consequently,
dismissing the replevin case, the CA held that the case is intertwined with Astorga's
complaint for illegal dismissal; thus, it is the labor tribunal that has rightful jurisdiction
over the complaint. SMART's motion for reconsideration having been denied, [20] it
elevated the case to this Court, now docketed as G.R. No. 148132.

Meanwhile, SMART also appealed the unfavorable ruling of the Labor Arbiter in the
illegal dismissal case to the National Labor Relations Commission (NLRC). In its
September 27, 1999 Decision,[21] the NLRC sustained Astorga's dismissal. Reversing
the Labor Arbiter, the NLRC declared the abolition of CSMG and the creation of SNMI to
do the sales and marketing services for SMART a valid organizational action. It
overruled the Labor Arbiter's ruling that SNMI is an in-house agency, holding that it
lacked legal basis. It also declared that contracting, subcontracting and streamlining of
operations for the purpose of increasing efficiency are allowed under the law. The NLRC
further found erroneous the Labor Arbiter's disquisition that redundancy to be valid must
be impelled by economic reasons, and upheld the redundancy measures undertaken by
SMART.

The NLRC disposed, thus:

WHEREFORE, the Decision of the Labor Arbiter is hereby reversed and set aside.
[Astorga] is further ordered to immediately return the company vehicle assigned to her.
[Smart and Santiago] are hereby ordered to pay the final wages of [Astorga] after [she]
had submitted the required supporting papers therefor.

SO ORDERED.[22]

Astorga filed a motion for reconsideration, but the NLRC denied it on December 21,
1999.[23]

Astorga then went to the CA via certiorari. On June 11, 2001, the CA rendered a
Decision[24] affirming with modification the resolutions of the NLRC. In gist, the CA
agreed with the NLRC that the reorganization undertaken by SMART resulting in the
abolition of CSMG was a legitimate exercise of management prerogative. It rejected
Astorga's posturing that her non-absorption into SNMI was tainted with bad faith.
However, the CA found that SMART failed to comply with the mandatory one-month
notice prior to the intended termination. Accordingly, the CA imposed a penalty
equivalent to Astorga's one-month salary for this non-compliance. The CA also set aside
the NLRC's order for the return of the company vehicle holding that this issue is not
essentially a labor concern, but is civil in nature, and thus, within the competence of the
regular court to decide. It added that the matter had not been fully ventilated before the
NLRC, but in the regular court.

Astorga filed a motion for reconsideration, while SMART sought partial reconsideration,
of the Decision. On December 18, 2001, the CA resolved the motions, viz.:
WHEREFORE, [Astorga's] motion for reconsideration is hereby PARTIALLY GRANTED.
[Smart] is hereby ordered to pay [Astorga] her backwages from 15 February 1998 to 06
November 1998. [Smart's] motion for reconsideration is outrightly DENIED.

SO ORDERED.[25]

Astorga and SMART came to us with their respective petitions for review assailing the
CA ruling, docketed as G.R Nos. 151079 and 151372. On February 27, 2002, this Court
ordered the consolidation of these petitions with G.R. No. 148132. [26]

In her Memorandum, Astorga argues:

THE COURT OF APPEALS ERRED IN UPHOLDING THE VALIDITY OF ASTORGA'S

DISMISSAL DESPITE THE FACT THAT HER DISMISSAL WAS EFFECTED IN CLEAR
VIOLATION OF THE CONSTITUTIONAL RIGHT TO SECURITY OF TENURE,
CONSIDERING THAT THERE WAS NO GENUINE GROUND FOR HER DISMISSAL.

II

SMART'S REFUSAL TO REINSTATE ASTORGA DURING THE PENDENCY OF THE

APPEAL AS REQUIRED BY ARTICLE 223 OF THE LABOR CODE, ENTITLES
ASTORGA TO HER SALARIES DURING THE PENDENCY OF THE APPEAL.

III

THE COURT OF APPEALS WAS CORRECT IN HOLDING THAT THE REGIONAL

TRIAL COURT HAS NO JURISDICTION OVER THE COMPLAINT FOR RECOVERY
OF A CAR WHICH ASTORGA ACQUIRED AS PART OF HER EMPLOYEE (sic)
BENEFIT.[27]

On the other hand, Smart in its Memoranda raises the following issues:

WHETHER THE HONORABLE COURT OF APPEALS HAS DECIDED A QUESTION

OF SUBSTANCE IN A WAY PROBABLY NOT IN ACCORD WITH LAW OR WITH
APPLICABLE DECISION OF THE HONORABLE SUPREME COURT AND HAS SO
FAR DEPARTED FROM THE ACCEPTED AND USUAL COURSE OF JUDICIAL
PROCEEDINGS AS TO CALL FOR AN EXERCISE OF THE POWER OF
SUPERVISION WHEN IT RULED THAT SMART DID NOT COMPLY WITH THE
NOTICE REQUIREMENTS PRIOR TO TERMINATING ASTORGA ON THE GROUND
OF REDUNDANCY.

II

WHETHER THE NOTICES GIVEN BY SMART TO ASTORGA AND THE

DEPARTMENT OF LABOR AND EMPLOYMENT ARE SUBSTANTIAL COMPLIANCE
WITH THE NOTICE REQUIREMENTS BEFORE TERMINATION.

III

WHETHER THE RULE ENUNCIATED IN SERRANO VS. NATIONAL LABOR

RELATIONS COMMISSION FINDS APPLICATION IN THE CASE AT BAR
CONSIDERING THAT IN THE SERRANO CASE THERE WAS ABSOLUTELY NO
NOTICE AT ALL.[28]

IV

WHETHER THE HONORABLE COURT OF APPEALS HAS DECIDED A QUESTION

OF SUBSTANCE IN A WAY PROBABLY NOT IN ACCORD WITH LAW OR WITH
APPLICABLE DECISION[S] OF THE HONORABLE SUPREME COURT AND HAS SO
FAR DEPARTED FROM THE ACCEPTED AND USUAL COURSE OF JUDICIAL
PROCEEDINGS AS TO CALL FOR AN EXERCISE OF THE POWER OF
SUPERVISION WHEN IT RULED THAT THE REGIONAL TRIAL COURT DOES NOT
HAVE JURISDICTION OVER THE COMPLAINT FOR REPLEVIN FILED BY SMART
TO RECOVER ITS OWN COMPANY VEHICLE FROM A FORMER EMPLOYEE WHO
WAS LEGALLY DISMISSED.

WHETHER THE HONORABLE COURT OF APPEALS HAS FAILED TO APPRECIATE

THAT THE SUBJECT OF THE REPLEVIN CASE IS NOT THE ENFORCEMENT OF A
CAR PLAN PRIVILEGE BUT SIMPLY THE RECOVERY OF A COMPANY CAR.

VI

WHETHER THE HONORABLE COURT OF APPEALS HAS FAILED TO APPRECIATE

THAT ASTORGA CAN NO LONGER BE CONSIDERED AS AN EMPLOYEE OF
SMART UNDER THE LABOR CODE.[29]

The Court shall first deal with the propriety of dismissing the replevin case filed with the
RTC of Makati City allegedly for lack of jurisdiction, which is the issue raised in G.R. No.
148132.

Replevin is an action whereby the owner or person entitled to repossession of goods or

chattels may recover those goods or chattels from one who has wrongfully distrained or
taken, or who wrongfully detains such goods or chattels. It is designed to permit one
having right to possession to recover property in specie from one who has wrongfully
taken or detained the property.[30] The term may refer either to the action itself, for the
recovery of personalty, or to the provisional remedy traditionally associated with it, by
which possession of the property may be obtained by the plaintiff and retained during
the pendency of the action. [31]

That the action commenced by SMART against Astorga in the RTC of Makati City was
one for replevin hardly admits of doubt.

In reversing the RTC ruling and consequently dismissing the case for lack of jurisdiction,
the CA made the following disquisition, viz.:

[I]t is plain to see that the vehicle was issued to [Astorga] by [Smart] as part of the
employment package. We doubt that [SMART] would extend [to Astorga] the same car
plan privilege were it not for her employment as district sales manager of the company.
Furthermore, there is no civil contract for a loan between [Astorga] and [Smart].
Consequently, We find that the car plan privilege is a benefit arising out of employer-
employee relationship. Thus, the claim for such falls squarely within the original and
exclusive jurisdiction of the labor arbiters and the NLRC. [32]
We do not agree. Contrary to the CA's ratiocination, the RTC rightfully assumed
jurisdiction over the suit and acted well within its discretion in denying Astorga's motion
to dismiss. SMART's demand for payment of the market value of the car or, in the
alternative, the surrender of the car, is not a labor, but a civil, dispute. It involves the
relationship of debtor and creditor rather than employee-employer relations. [33] As such,
the dispute falls within the jurisdiction of the regular courts.

In Basaya, Jr. v. Militante,[34] this Court, in upholding the jurisdiction of the RTC over
the replevin suit, explained:

Replevin is a possessory action, the gist of which is the right of possession in the
plaintiff. The primary relief sought therein is the return of the property in specie
wrongfully detained by another person. It is an ordinary statutory proceeding to
adjudicate rights to the title or possession of personal property. The question of whether
or not a party has the right of possession over the property involved and if so, whether
or not the adverse party has wrongfully taken and detained said property as to require
its return to plaintiff, is outside the pale of competence of a labor tribunal and beyond
the field of specialization of Labor Arbiters.

xxxx

The labor dispute involved is not intertwined with the issue in the Replevin Case. The
respective issues raised in each forum can be resolved independently on the other. In
fact in 18 November 1986, the NLRC in the case before it had issued an Injunctive Writ
enjoining the petitioners from blocking the free ingress and egress to the Vessel and
ordering the petitioners to disembark and vacate. That aspect of the controversy is
properly settled under the Labor Code. So also with petitioners' right to picket. But the
determination of the question of who has the better right to take possession of the
Vessel and whether petitioners can deprive the Charterer, as the legal possessor of the
Vessel, of that right to possess in addressed to the competence of Civil Courts.

In thus ruling, this Court is not sanctioning split jurisdiction but defining avenues of
jurisdiction as laid down by pertinent laws.

The CA, therefore, committed reversible error when it overturned the RTC ruling and
ordered the dismissal of thereplevin case for lack of jurisdiction.
Having resolved that issue, we proceed to rule on the validity of Astorga's dismissal.

Astorga was terminated due to redundancy, which is one of the authorized causes for
the dismissal of an employee. The nature of redundancy as an authorized cause for
dismissal is explained in the leading case ofWiltshire File Co., Inc. v. National Labor
Relations Commission,[35] viz:

x x x redundancy in an employer's personnel force necessarily or even ordinarily refers

to duplication of work. That no other person was holding the same position that private
respondent held prior to termination of his services does not show that his position had
not become redundant. Indeed, in any well organized business enterprise, it would be
surprising to find duplication of work and two (2) or more people doing the work of one
person. We believe that redundancy, for purposes of the Labor Code, exists where the
services of an employee are in excess of what is reasonably demanded by the actual
requirements of the enterprise. Succinctly put, a position is redundant where it is
superfluous, and superfluity of a position or positions may be the outcome of a number
of factors, such as overhiring of workers, decreased volume of business, or dropping of
a particular product line or service activity previously manufactured or undertaken by the
enterprise.

The characterization of an employee's services as superfluous or no longer necessary

and, therefore, properly terminable, is an exercise of business judgment on the part of
the employer. The wisdom and soundness of such characterization or decision is not
subject to discretionary review provided, of course, that a violation of law or arbitrary or
malicious action is not shown. [36]

Astorga claims that the termination of her employment was illegal and tainted with bad
faith. She asserts that the reorganization was done in order to get rid of her. But except
for her barefaced allegation, no convincing evidence was offered to prove it. This Court
finds it extremely difficult to believe that SMART would enter into a joint venture
agreement with NTT, form SNMI and abolish CSMG/FSD simply for the sole purpose of
easing out a particular employee, such as Astorga. Moreover, Astorga never denied that
SMART offered her a supervisory position in the Customer Care Department, but she
refused the offer because the position carried a lower salary rank and rate. If indeed
SMART simply wanted to get rid of her, it would not have offered her a position in any
department in the enterprise.
Astorga also states that the justification advanced by SMART is not true because there
was no compelling economic reason for redundancy. But contrary to her claim, an
employer is not precluded from adopting a new policy conducive to a more economical
and effective management even if it is not experiencing economic reverses. Neither
does the law require that the employer should suffer financial losses before he can
terminate the services of the employee on the ground of redundancy. [37]

We agree with the CA that the organizational realignment introduced by SMART, which
culminated in the abolition of CSMG/FSD and termination of Astorga's employment was
an honest effort to make SMART's sales and marketing departments more efficient and
competitive. As the CA had taken pains to elucidate:

x x x a careful and assiduous review of the records will yield no other conclusion than
that the reorganization undertaken by SMART is for no purpose other than its declared
objective - as a labor and cost savings device. Indeed, this Court finds no fault in
SMART's decision to outsource the corporate sales market to SNMI in order to attain
greater productivity. [Astorga] belonged to the Sales Marketing Group under the Fixed
Services Division (CSMG/FSD), a distinct sales force of SMART in charge of selling
SMART's telecommunications services to the corporate market. SMART, to ensure it
can respond quickly, efficiently and flexibly to its customer's requirement, abolished
CSMG/FSD and shortly thereafter assigned its functions to newly-created SNMI
Multimedia Incorporated, a joint venture company of SMART and NTT of Japan, for the
reason that CSMG/FSD does not have the necessary technical expertise required for
the value added services. By transferring the duties of CSMG/FSD to SNMI, SMART
has created a more competent and specialized organization to perform the work
required for corporate accounts. It is also relieved SMART of all administrative costs -
management, time and money-needed in maintaining the CSMG/FSD. The
determination to outsource the duties of the CSMG/FSD to SNMI was, to Our mind, a
sound business judgment based on relevant criteria and is therefore a legitimate
exercise of management prerogative.

Indeed, out of our concern for those lesser circumstanced in life, this Court has inclined
towards the worker and upheld his cause in most of his conflicts with his employer. This
favored treatment is consonant with the social justice policy of the Constitution. But
while tilting the scales of justice in favor of workers, the fundamental law also
guarantees the right of the employer to reasonable returns for his investment. [38] In this
light, we must acknowledge the prerogative of the employer to adopt such measures as
will promote greater efficiency, reduce overhead costs and enhance prospects of
economic gains, albeit always within the framework of existing laws. Accordingly, we
sustain the reorganization and redundancy program undertaken by SMART.

However, as aptly found by the CA, SMART failed to comply with the mandated one (1)
month notice prior to termination. The record is clear that Astorga received the notice of
termination only on March 16, 1998 [39] or less than a month prior to its effectivity on April
3, 1998. Likewise, the Department of Labor and Employment was notified of the
redundancy program only on March 6, 1998. [40]

Article 283 of the Labor Code clearly provides:

Art. 283. Closure of establishment and reduction of personnel. -- The employer may
also terminate the employment of any employee due to the installation of labor saving
devices, redundancy, retrenchment to prevent losses or the closing or cessation of
operation of the establishment or undertaking unless the closing is for the purpose of
circumventing the provisions of this Title, by serving a written notice on the workers and
the Ministry of Labor and Employment at least one (1) month before the intended date
thereof x x x.

SMART's assertion that Astorga cannot complain of lack of notice because the
organizational realignment was made known to all the employees as early as February
1998 fails to persuade. Astorga's actual knowledge of the reorganization cannot replace
the formal and written notice required by the law. In the written notice, the employees
are informed of the specific date of the termination, at least a month prior to the
effectivity of such termination, to give them sufficient time to find other suitable
employment or to make whatever arrangements are needed to cushion the impact of
termination. In this case, notwithstanding Astorga's knowledge of the reorganization,
she remained uncertain about the status of her employment until SMART gave her
formal notice of termination. But such notice was received by Astorga barely two (2)
weeks before the effective date of termination, a period very much shorter than that
required by law.

Be that as it may, this procedural infirmity would not render the termination of Astorga's
employment illegal. The validity of termination can exist independently of the procedural
infirmity of the dismissal.[41] In DAP Corporation v. CA,[42] we found the dismissal of the
employees therein valid and for authorized cause even if the employer failed to comply
with the notice requirement under Article 283 of the Labor Code. This Court upheld the
dismissal, but held the employer liable for non-compliance with the procedural
requirements.

The CA, therefore, committed no reversible error in sustaining Astorga's dismissal and
at the same time, awarding indemnity for violation of Astorga's statutory rights.

However, we find the need to modify, by increasing, the indemnity awarded by the CA to
Astorga, as a sanction on SMART for non-compliance with the one-month mandatory
notice requirement, in light of our ruling in Jaka Food Processing Corporation v. Pacot,
[43]
viz.:

[I]f the dismissal is based on a just cause under Article 282 but the employer failed to
comply with the notice requirement, the sanction to be imposed upon him should
be tempered because the dismissal process was, in effect, initiated by an act imputable
to the employee, and (2) if the dismissal is based on an authorized cause under Article
283 but the employer failed to comply with the notice requirement, the sanction should
be stiffer because the dismissal process was initiated by the employer's exercise of his
management prerogative.

We deem it proper to increase the amount of the penalty on SMART to P50,000.00.

As provided in Article 283 of the Labor Code, Astorga is, likewise, entitled to separation
pay equivalent to at least one (1) month salary or to at least one (1) month's pay for
every year of service, whichever is higher. The records show that Astorga's length of
service is less than a year. She is, therefore, also entitled to separation pay equivalent
to one (1) month pay.

Finally, we note that Astorga claimed non-payment of wages from February 15, 1998.
This assertion was never rebutted by SMART in the proceedings a quo. No proof of
payment was presented by SMART to disprove the allegation. It is settled that in labor
cases, the burden of proving payment of monetary claims rests on the employer.
[44]
SMART failed to discharge the onus probandi. Accordingly, it must be held liable for
Astorga's salary from February 15, 1998 until the effective date of her termination, on
April 3, 1998.

However, the award of backwages to Astorga by the CA should be deleted for lack of
basis. Backwages is a relief given to an illegally dismissed employee. Thus, before
backwages may be granted, there must be a finding of unjust or illegal dismissal from
work.[45] The Labor Arbiter ruled that Astorga was illegally dismissed. But on appeal, the
NLRC reversed the Labor Arbiter's ruling and categorically declared Astorga's dismissal
valid. This ruling was affirmed by the CA in its assailed Decision. Since Astorga's
dismissal is for an authorized cause, she is not entitled to backwages. The CA's award
of backwages is totally inconsistent with its finding of valid dismissal.

WHEREFORE, the petition of SMART docketed as G.R. No. 148132 is GRANTED. The
February 28, 2000 Decision and the May 7, 2001 Resolution of the Court of Appeals in
CA-G.R. SP. No. 53831 are SET ASIDE. The Regional Trial Court of Makati City,
Branch 57 is DIRECTED to proceed with the trial of Civil Case No. 98-1936 and render
its Decision with reasonable dispatch.

On the other hand, the petitions of SMART and Astorga docketed as G.R. Nos. 151079
and 151372 are DENIED. The June 11, 2001 Decision and the December 18, 2001
Resolution in CA-G.R. SP. No. 57065, are AFFIRMEDwith MODIFICATION. Astorga is
declared validly dismissed. However, SMART is ordered to pay Astorga P50,000.00 as
indemnity for its non-compliance with procedural due process, her separation pay
equivalent to one (1) month pay, and her salary from February 15, 1998 until the
effective date of her termination on April 3, 1998. The award of backwages
is DELETED for lack of basis.

SO ORDERED.
SPECIAL CIVIL
ACTIONS
RULE 62 to 71
 - Interpleader

FIRST DIVISION
[ G.R. NO.147812, April 06, 2005 ]
LEONARDO R. OCAMPO, PETITIONER, VS. LEONORA TIRONA, RESPONDENT.

DECISION
CARPIO, J.:
The Case

This is a petition for review[1] to annul the Decision[2] dated 29 November 2000 of the
Court of Appeals ("appellate court") in CA-G.R. SP No. 41686, and its Resolution dated
16 April 2001 denying the motion for reconsideration. The appellate court set aside the
Decision[3] dated 27 June 1996 of Branch 110 of the Regional Trial Court of Pasay City
("RTC") in Civil Case No. 96-0209. The RTC affirmed the Decision [4] dated 29 December
1995 of Branch 47 of the Metropolitan Trial Court of Pasay City ("MTC") in Civil Case
No. 754-95 ordering respondent Leonora Tirona ("Tirona") to vacate and surrender
possession of the property under litigation to petitioner Leonardo R. Ocampo
("Ocampo"). The MTC also ordered Tirona to pay Ocampo rentals in arrears, attorney's
fees, and costs of suit.

Antecedent Facts
Ocampo alleged that he is the owner of a parcel of land ("subject land") described in
Transfer Certificate of Title ("TCT") No. 134359, with an approximate area of 500 square
meters, located at Alvarez Street, Pasay City. Ocampo bought the subject land from
Rosauro Breton, heir of the subject land's registered owner Alipio Breton Cruz.
Possession and administration of the subject land are claimed to be already in
Ocampo's management even though the TCT is not yet in his name. Tirona, on the
other hand, is a lessee occupying a portion of the subject land. [5] The MTC established
the following facts:
According to [Ocampo], upon acquisition of ownership of the subject premises, a formal
written notice was given to [Tirona] which was received by the latter on 9 March 1995,
copy of the said formal written agreement marked as Annex "A" and likewise copy of the
registry return receipt showing that [Tirona] received Annex "A" was marked as Annex
"A-1". In recognition of [Ocampo's] right of ownership over the subject premises, [Tirona]
paid some monthly rentals due, however, on July 5, 1995, [Ocampo] received a letter
from Callejo Law Office of Room 513 Borja Bldg., 645 Sta. Cruz, Manila stating among
others, that, in view of the fact that the subject premises was declared under area for
priority development, [Tirona] is invoking her right of first refusal and in connection
thereto [Tirona] will temporarily stop paying her monthly rentals until and unless the
National Housing Authority have processed the pertinent papers as regards the amount
due to [Ocampo] by reason of the implementation of the above law, a copy of the said
letter marked as Annex "B" of the Complaint. In reply to Annex "B", [Ocampo] sent a
letter dated 17 July 1995 addressed to the said Callejo Law Office, copy furnished
[Tirona]. A copy of the said reply of [Ocampo] marked as Annex "C" of the Complaint, a
copy of the Registry Return Receipt showing that [Tirona] received said Annex "C" on
20 July 1995 marked as Annex "C-1" of the Complaint, while as the original copy which
was sent to Callejo Law Office was also received by said office. On 7 August 1995,
[Ocampo] wrote a letter to [Tirona] demanding upon [Tirona] to pay the rentals in arrears
for the months of April, May, June, July and August at the rate of P1,200 a month and to
vacate the premises, copy of the said letter dated 7 August 1995 marked as Annex "D"
of the Complaint and the signature at the bottom portion of Annex "D" clearly shows that
the same was received by [Tirona] on 8 August 1995. Despite receipt of said letter,
[Tirona] failed and refused and still fails and refuses to heed [Ocampo's] demands. [6]
On 11 September 1995, Ocampo filed a complaint docketed as Civil Case No. 754-95
for unlawful detainer and damages against Tirona before the MTC.
Tirona filed her answer on 27 September 1995. Tirona asserted that Doa Lourdes
Rodriguez Yaneza actually owns the subject land. The allegations in the answer state
thus:
1. That the Assignor [one Edison A. Hindap, Sr.] is the General Overseer and
Attorney-in-Fact of DOA LOURDES RODRIGUEZ YANEZA, Heir/Owner of TITULO
DE PROPRIEDAD DE TERENOS of 1891, Royal Degree 01-4 Protocol, the real
owner of a parcel of land allegedly claimed by [Ocampo].

2. That the Title of [Ocampo] was overlapped [sic] the Original Land Title of the
Assignor.

3. That [Tirona], hereby recognized by the Assignor as co-owner by possession and

hereby cede, transfer and assign the said parcel of land in [Tirona's] favor.

4. That [Tirona] hereby denied [sic] and discontinued [sic] all the obligations
imposed by [Ocampo], for the simple reason, the property in question is not owned
by [Ocampo], but rather owned by the Assignor, as proof of evidence herein Assignor
issued a Certification for Occupancy and Assignment in favor of [Tirona] herein
attached with [sic], and the other evidence shall be presented upon the proper
hearing on the merits of this case.[7]
Ocampo filed a motion to strike out the answer filed and a motion for judgment on 10
October 1995. Ocampo claimed that the answer was not verified; therefore, it was as if
no answer was filed.

On 12 October 1995, Tirona filed a motion with leave to amend defendant's answer.
[8]
She alleged that she filed her answer without the assistance of a lawyer due to fear
that she might be unable to file the required pleading on time. In her amended answer,
Tirona maintained that Ocampo is not the owner of the subject land. She stated that the
certificate of title to the subject land is not even registered under Ocampo's name.
Tirona also alleged that she has a right of first refusal in case of sale of the land,
pursuant to Presidential Decree ("PD") Nos. 1517, [9] 1893[10]and 1968.[11] The area where
the subject land is located was certified as an area under priority development. [12]Tirona
asked for attorney's fees and moral and exemplary damages.

In the spirit of substantial justice, the MTC granted Tirona's motion to amend her answer
on 20 October 1995. On 15 November 1995, the MTC directed Ocampo and Tirona to
submit their respective position papers and other evidence after the termination of the
pre-trial conference.

The issue considered by the MTC for resolution was whether Ocampo may eject Tirona
because of non-payment of rent and because of the termination of Tirona's right to
possess and occupy the subject land.

The MTC's Ruling

The MTC ruled that Tirona does not have any reason to suspend payment of rents until
after PD No. 1517, in relation to PD Nos. 1893 and 1968, is implemented in her favor.
Tirona's non-payment of rents rendered her occupation of the subject land illegal. As
owner of the subject land, Ocampo is entitled to its use and enjoyment, as well as to
recover its possession from any person unlawfully withholding it.

The dispositive part of the MTC's decision reads:

WHEREFORE, judgment is hereby rendered in favor of [Ocampo] and against [Tirona]:
1. Ordering [Tirona] and all other persons claiming possession under her to vacate
and surrender possession to [Ocampo] the premises known as, parcel of land
located at 2132 Alvarez St., Pasay City, covered by Transfer Certificate of Title No.
134359 of the Register of Deeds of Pasay City;

2. Ordering [Tirona] to pay the rentals in arrears covering the period from April 1995
until such time [Tirona] shall have finally vacated the subject premises at the rate of
P1,200 a month, with interest at a legal rate;

3. Ordering [Tirona] to pay the sum of P5,000 for and as attorney's fees; and

4. Ordering [Tirona] to pay the cost of the suit.

SO ORDERED.[13]
Ocampo filed a motion for execution pending appeal on 24 January 1996, while Tirona
filed a notice of appeal on 25 January 1996. The MTC directed its clerk of court to
transmit the records of the case, as well as the motion for execution pending appeal,
through an order issued on 29 January 1996. The RTC issued an order on 26 February
1996 ordering both parties to file their respective memoranda.

On 4 March 1996, Maria Lourdes Breton-Mendiola, who claimed to be the owner of the
subject land, filed a motion with leave to file intervention before the RTC.
The RTC's Ruling

In an order dated 11 March 1996, the RTC issued a writ of execution pending appeal for
the enforcement of the MTC's decision. The RTC stated that although Tirona perfected
her appeal on time, the record showed that she failed to pay the required supersedeas
bond as well as deposit the current rentals as mandated by Section 8, Rule 70 of the
1964 Rules of Court. In a separate order issued on the same date, the RTC denied
Maria Lourdes Breton-Mendiola's motion with leave to file intervention. The RTC stated
that granting the motion to intervene would violate the 1964 Rules of Court and
jurisprudence.

Ocampo filed his memorandum on 21 March 1996. [14] He emphasized that Tirona's
assertion of a "preferential right of first refusal" is a recognition of the sale by Rosauro
Breton of the subject land to him. Moreover, Tirona is not qualified to claim this
preferential right because she is no longer a legitimate tenant. The payment of Tirona's
monthly rent was already in arrears at the time Ocampo filed the complaint against
Tirona.

On 25 March 1996, Tirona filed a manifestation which stated that she paid both the
supersedeas bond and rent on the subject land. The RTC considered Tirona's
manifestation as a motion for reconsideration of its previous order issuing a writ of
execution pending appeal. In its order dated 15 April 1996, the RTC recalled its 11
March 1996 order and cancelled the writ of execution.

Tirona filed her memorandum also on 25 March 1996. For the first time, Tirona
disclosed that Alipio Breton is the registered owner of the subject land and that he is her
landlord since 1962. When Alipio Breton died in 1975, his children, Rosauro Breton and
Maria Lourdes Breton-Mendiola, inherited the subject land. Tirona claims she has never
stopped paying her rent to Maria Lourdes Breton-Mendiola. Tirona also stated that
Rosauro Breton could not transfer ownership to the subject land to Ocampo. On 14 July
1978, Rosauro Breton executed a deed of conveyance and waiver in favor of his sister,
Maria Lourdes Breton-Mendiola. Rosauro Breton executed another deed of conveyance
and waiver in favor of Maria Lourdes Breton-Mendiola on 9 March 1995. Thus, Tirona
claims, Ocampo cannot legally acquire title from Rosauro Breton in view of the waivers.
Maria Lourdes Breton-Mendiola is Tirona's lessor, and is the only person who can
validly file an ejectment suit against Tirona. [15]
After quoting the findings of the MTC, the RTC held thus:
This Court after a careful review of the complete record of this case particularly the
evidences, applicable laws and jurisprudence relied upon by the [MTC] in finding for
[Ocampo] and declaring that [Tirona] can be lawfully ejected from the subject premises,
concurs with the findings thereof. There is therefore nothing in the record which would
warrant the Court to disturb the findings of fact and law and the conclusions reached by
the [MTC].

This Court finds the decision of the lower court fully justified in granting the reliefs to
[Ocampo].

WHEREFORE, judgment is hereby rendered AFFIRMING IN TOTO the decision of the

[MTC] with costs against [Tirona].

SO ORDERED.[16]
In its petition before the appellate court, Tirona stated that the RTC erred in the
following grounds:
1. ORDERING THE EJECTMENT OF [TIRONA] IN VIOLATION OF SECTION 2 OF
PD [NO.] 2016.[17]

2. NOT RULING THAT [TIRONA] HAS A BETTER RIGHT OF POSSESSION OVER

THE PROPERTY IN QUESTION.

3. RULING THAT THE SUCCESSOR-IN-INTEREST OF AN UNDIVIDED IDEAL

ONE-HALF PORTION, [OCAMPO] MAY DEPRIVE THE OTHER CO-OWNER OF
THE ADMINISTRATION OF ONE-HALF PORTION BY EJECTING HER LESSEE,
[TIRONA].[18]
The appellate court stated that the principal issue for its resolution is whether Ocampo,
being the buyer of the subject land which is not yet partitioned among the heirs, can
validly evict Tirona.[19]

The Appellate Court's Ruling

The appellate court considered partition of the estate of Alipio Breton as a prerequisite
to Ocampo's action. The appellate court ruled that "[u]ntil the partition of the estate is
ordered by the Regional Trial Court of Pasay City in the pending partition proceedings
and the share of each co-heir is determined by metes and bounds, [Ocampo] cannot
rightfully claim that what he bought is part of the property occupied by [Tirona]." [20] The
dispositive part of the appellate court's decision reads thus:
WHEREFORE, the decision of the respondent court is hereby SET ASIDE and
judgment is hereby rendered dismissing the complaint of the private respondent in the
court below.

SO ORDERED.[21]
Hence, the instant petition.

The Issues

Ocampo assigned three errors to the appellate court. Ocampo stated that the appellate
court erred in:
1. ENTERTAINING AND NOT DISMISSING THE PETITION FOR REVIEW (with
prayer for its issuance of Writ of Preliminary Injunction and immediate issuance of
TRO), THE SAME HAVING BEEN FILED BEYOND THE REGLAMENTARY
PERIOD.

2. CONSIDERING AND RESOLVING AN ISSUE RAISED IN THE PETITION FOR

REVIEW FOR THE FIRST TIME ON APPEAL.

3. DECLARING THAT LEONARDO R. OCAMPO HAS NO RIGHT TO EJECT

LEONORA TIRONA, NOR DEMAND PAYMENT OF RENTALS FROM HER FOR
THE USE AND OCCUPANCY OF THE LOT INVOLVED IN THE PRESENT CASE.[22]

The Ruling of the Court

The petition has merit.

We agree with Ocampo's observation that Tirona changes her theory of the case each
time she appeals.[23] For this reason, we shall limit our ruling to the propriety of
Ocampo's unlawful detainer case against Tirona.
Moreover, we have assessed the evidence on record and found that the appellate court
did not contradict the findings of facts of the MTC and RTC. Thus, we see no reason to
deviate from their findings of facts.

Unlawful Detainer

Elements to be Proved

Unlawful detainer cases are summary in nature. The elements to be proved and
resolved in unlawful detainer cases are the fact of lease and expiration or violation of its
terms.[24] To support their conclusion that there was an existing lease, the MTC and RTC
found that:

(1) Ocampo informed Tirona through a letter dated 1 March 1995 that he bought
the subject land, upon which Tirona's house stands, from the previous owner
and lessor Rosauro Breton;[25]

(2) Tirona's continued occupancy of the subject land signifies Tirona's acceptance
of Ocampo's conditions of lease stated in the 1 March 1995 letter; [26] and

(3) In asserting her right to possess the subject land, Tirona admitted that Ocampo
is her lessor. In the 5 July 1995 letter, Tirona was referred to as "the
hereinmentioned tenant of yours."[27]

In Mirasol v. Magsuci, et al.,[28] we ruled that the sale of a leased property places the
vendee into the shoes of the original lessor to whom the lessee bound himself to pay.
The vendee acquires the right to evict the lessee from the premises and to recover the
unpaid rentals after the vendee had notified the lessee that he had bought the leased
property and that the rentals on it should be paid to him, and the lessee refused to
comply with the demand.

The following facts support the conclusion that there was a violation of the lease
agreement:

(1) Tirona, through Callejo Law Office, sent a letter dated 5 July 1995 which stated
that Tirona will temporarily stop paying her monthly obligation until the National
Housing Authority has processed the pertinent papers regarding the amount
 due to Ocampo in view of PD 1517;[29]

(2) As of August 1995, Tirona has not paid her rent to Ocampo corresponding to
April to August 1995;[30]and

(3) In a letter dated 7 August 1995, Ocampo demanded from Tirona unpaid rent
payments.[31]

In view of these facts, we hold that Tirona is estopped from denying her possession
under a lease[32] and that there was a violation of the lease agreement. Thus, the MTC
and RTC correctly ruled against Tirona.

Ownership as an Issue

When Tirona filed her answer before the MTC, she raised the issue of ownership and
ascribed ownership of the subject lot to one Doa Lourdes Rodriguez Yaneza. Tirona
later changed her strategy and filed an amended answer that ascribed ownership of the
subject lot to Maria Lourdes Breton-Mendiola. Tirona justified the amendment by stating
that she did not ask for the assistance of a lawyer for fear of not being able to file her
answer on time. This excuse is flimsy considering that Tirona first communicated to
Ocampo through Callejo Law Office. However, the MTC still allowed Tirona to amend
her answer. Tirona stated that there was no violation of the lease agreement because
she paid her rent to the real owner, Maria Lourdes Breton-Mendiola.

Contrary to Tirona's position, the issue of ownership is not essential to an action for
unlawful detainer. The fact of the lease and the expiration of its term are the only
elements of the action. The defense of ownership does not change the summary nature
of the action. The affected party should raise the issue of ownership in an appropriate
action, because a certificate of title cannot be the subject of a collateral attack.
[33]
Although a wrongful possessor may at times be upheld by the courts, this is merely
temporary and solely for the maintenance of public order. The question of ownership is
to be settled in the proper court and in a proper action. [34]
In actions for forcible entry and [unlawful] detainer, the main issue is possession de
facto, independently of any claim of ownership or possession de jure that either party
may set forth in his pleadings, and an appeal does not operate to change the nature of
the original action. On appeal, in an ejectment case, it is within the discretion of the
court to look into the evidence supporting the assigned errors relating to the alleged
ownership of appellant insofar as said evidence would indicate or determine the nature
of appellant's possession of the controverted premises. Said court should not however
resolve the issue raised by such assigned errors. The resolution of said issues would
effect an adjudication on ownership which is not sanctioned in the summary action for
unlawful detainer.[35]
Unlawful detainer being a summary proceeding, it was error for the appellate court to
include the issue of ownership. Had the appellate court limited its ruling to the elements
to be proved in a case of unlawful detainer, Ocampo need not even prove his
ownership. When the appellate court ruled that the case of unlawful detainer had to wait
for the results of the partition proceedings, it effectively put ownership as the main issue
in the case. The issue of ownership opens a virtual Pandora's Box for Tirona and her
supposed intervenor, Maria Lourdes Breton-Mendiola. [36]

Interpleader

The good faith of Tirona is put in question in her preference for Maria Lourdes Breton-
Mendiola. As a stakeholder, Tirona should have used reasonable diligence in hailing the
contending claimants to court. Tirona need not have awaited actual institution of a suit
by Ocampo against her before filing a bill of interpleader.[37] An action for interpleader is
proper when the lessee does not know the person to whom to pay rentals due to
conflicting claims on the property.[38]
The action of interpleader is a remedy whereby a person who has property whether
personal or real, in his possession, or an obligation to render wholly or partially, without
claiming any right in both, or claims an interest which in whole or in part is not disputed
by the conflicting claimants, comes to court and asks that the persons who claim the
said property or who consider themselves entitled to demand compliance with the
obligation, be required to litigate among themselves, in order to determine finally who is
entitled to one or the other thing. The remedy is afforded not to protect a person against
a double liability but to protect him against a double vexation in respect of one liability.
When the court orders that the claimants litigate among themselves, there arises in
reality a new action and the former are styled interpleaders, and in such a case the
pleading which initiates the action is called a complaint of interpleader and not a cross-
complaint.[39]
Ocampo has the right to eject Tirona from the subject land. All the elements required for
an unlawful detainer case to prosper are present. Ocampo notified Tirona that he
purchased the subject land from Tirona's lessor. Tirona's continued occupation of the
subject land amounted to acquiescence to Ocampo's terms. However, Tirona eventually
refused to pay rent to Ocampo, thus violating the lease.

Finally, legal interest at the annual rate of 6% is due on the unpaid monthly rentals
starting from 7 August 1995 when Ocampo made an extrajudicial demand on Tirona for
payment of the monthly rental. [40] On finality of our decision, annual interest at 12%, in
lieu of 6% annual interest, is due on the amounts the MTC awarded until full payment. [41]

WHEREFORE, we GRANT the instant petition for review. The Decision dated 27 June
1996 of Branch 110 of the RTC in Civil Case No. 96-0209, which affirmed the Decision
dated 29 December 1995 of Branch 47 of the MTC in Civil Case No. 754-95,
is REINSTATED. The Decision dated 29 November 2000 of the appellate court in CA-
G.R. SP No. 41686, and its Resolution dated 16 April 2001 denying the motion for
reconsideration, are SET ASIDE.

SO ORDERED.
DECLARATORY
RELIEF AND
SIMILAR
REMEDIES
 EN BANC

[ G.R. NO. 161400, September 02, 2005 ]

ZENAIDA ORTEGA, REPRESENTED BY HER ATTORNEY-IN FACT OCTAVIO

ALVAREZ AND/OR ZEMVE ORTEGA ALVAREZ, PETITIONERS, VS. THE QUEZON
CITY GOVERNMENT, THE NATIONAL HOUSING AUTHORITY & THE NATIONAL
HOME MORTGAGE CORP., RESPONDENTS.

DECISION

CARPIO MORALES, J.:

Petitioner Zenaida Ortega comes directly to this Court assailing the validity of Quezon
City Ordinance No. SP 1304, Series of 2003, and praying that the following agencies,
National Housing Authority (NHA), Housing and Land Use Regulatory Board (HLURB),
Department of Environment and Natural Resources Bureau of Land Management,
National Home Mortgage Financing Corporation, and Home Insurance Guarantee
Corporation, be restrained from implementing the said ordinance.

Proposed Ordinance No. 2002-07 (PO 2002-07) was filed on January 10, 2002 before
the City Council. PO 2002-07 sought to approve "the Subdivision Plan of Samahang
Kapitbahayan ng Barangay Vasra (Samahang Kapitbahayan), a Socialized Housing
Project (B.P. Blg. 220) with seventeen (17) lots (Community Mortgage Program)
containing [a total] area of Six Hundred Sixty Seven (667) square meters, covered by
Original Certificate of Title No. 735, owned by the City Government of Quezon City
(Vendor) located at a portion of [an] easement [in] Barangay Vasra, Quezon City, Metro
Manila, as applied for by the Samahang Kapitbahayan ng Barangay Vasra (Vendee)
subject to the conditions prescribed under Quezon City Ordinance No. SP-56, S-93 and
Batas Pambansa Blg. 220."[1]

Proposed Resolution No. 2003-13 (PR 2003-13) was subsequently filed on January 20,
2002 to complement PO 2002-07. The proposed resolution sought to authorize Quezon
City Mayor Feliciano R. Belmonte to enter into a contract to sell a portion of an
easement located at Barangay Vasra, Quezon City with the SAMAHANG
KAPITBAHAYAN to be represented by its President, through the Community Mortgage
Program (CMP) of the National Home Mortgage Finance Corporation (NHMFC). [2]

On August 5, 2003, the Quezon City government enacted Ordinance No. SP-1304,
Series of 2003 (the ordinance), which is being challenged in the present petition,
[3]
reclassifying "as residential or converted from its original classification to residential
for distribution or for sale to its informal settlers" a "parcel of land which may be
considered an accretion/excess lot and previously conceived and referred to in
Proposed Ordinance No. 2002-07 and Proposed [Resolution] 2002-13 as portion of [an]
easement situated between Block 14, Psd-39577 of the original subdivision plan and
Culiat Creek, Barangay Vasra, Quezon City." [4]

The provisions of the assailed ordinance read:

SECTION 1. A parcel of land which may be considered an accretion/excess lot and

previously conceived and referred to in proposed ordinance no. PO 2002-07 and
proposed ordinance no. PO 2002-13 as portion of easement, situated between Block
14. Psd-39577 of the original subdivision plan and Culiat Creek, Barangay Vasra,
Quezon City, is hereby classified as residential or converted from its original
classification to residential for distribution or for sale to its informal settlers.

SECTION 2. This Ordinance shall take effect immediately upon its approval. [5]

Petitioner, who claims to be the rightful owner of the land subject of the ordinance,
alleges that in enacting the ordinance, her various letter-protests to the City Council
against proposed Resolutions No. 2002-13, 2002-07 and 2002-239 [6] were not heeded
in the City Council, thus violating her constitutional rights to due process and equal
protection of the law.

Petitioner further claims that the lot referred to in the ordinance overlaps her properties
as their technical descriptions in Transfer Certificates of Title Nos. RT-70472 (296026)
and N-152137 issued in her name show; [7] and that assuming that there exists
accretion or easement of the Culiat Creek, she, being the owner of the adjoining land, is
the rightful owner thereof following Articles 457 [8] and Article 620[9] of the Civil Code.

Petitioner likewise claims that the intended beneficiaries under the proposed ordinance
and resolution are not informal settlers as required under City Ordinance No. SP-56,
Series of 1993,[10] but lessees of her properties who had been ordered ejected after she
filed several unlawful detainer cases against them. [11]

By Comment[12] filed on April 14, 2004, the Quezon City Government, through the Office
of the City Attorney, alleges that the present petition is premature and raises questions
of fact which entail reception of evidence; and that petitioner has not yet established
her right of ownership over the property referred to in the ordinance, whereas its clear
right thereover is evidenced by Original Certificate of Title No. 735 issued in its name. [13]

The NHA, by Comment[14] filed on May 17, 2004, prayed for the dismissal of the petition,
pointing out that the petition is actually one for declaratory relief under Section 1, Rule
63 of the Rules of Court over which this Court has no original jurisdiction.

The NHMFC, by Comment[15] filed on June 17, 2004, alleged that it is not a party to any
of the transactions with any of the parties in the present case. It nevertheless adopted
the comment of the Quezon City government that the petition is premature and alleges
facts which still need to be proven. [16]

The petition must be dismissed.

Article VIII, Section 5 of the Constitution provides:

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

xxx

(2) Review, revise, reverse, modify, or affirm on appeal or certiorari, as the law or
theRules of Court may provide,final judgments and orders of lower courts in:

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

x x x (Emphasis and underscoring supplied).

This Court can thus only review, revise, reverse, modify on appeal or
certiorari final judgments and orders of lowercourts in all cases in which the
constitutionality or validity of, among other things, an ordinance is in question.
Foremost, therefore, is that there must be first a final judgment rendered by an inferior
court[17] before this Court can assume jurisdiction over a case of this nature.

Verily, this Court does not conduct original and full trial of a main factual issue like what
petitioner is raising in the present petition. [18] It does not analyze or weigh evidence
brought before it at the first instance, otherwise, it would preempt the primary function of
the lower court to try the case on the merits, receive evidence, and decide the case
definitively.[19] Its jurisdiction in cases which assail the validity of an ordinance is limited
to reviewing or revising final judgments or orders of lower courts and applying the law
based on their findings of facts brought before it. [20]

In another vein, if this petition was to be considered as one for declaratory relief, as
observed by the OSG, it is not embraced within the original jurisdiction of this Court. [21]
Rule 63 of the Rules of Court provides:

SECTION 1. Who may file petition. Any person interested under a deed, will, contract
or other written instrument, orwhose rights are affected by a statute, executive order or
regulation, ordinance, or any other government regulation may, before breach or
violation thereof, bring an action in the appropriate Regional Trial Court to
determineany question of construction or validity arising from, and for a declaration of
his rightsor duties, thereunder.
An action for the reformation of an instrument, or to quiet title to real property or remove
clouds therefrom, or to consolidate ownership under Article 1607 of the Civil Code may
be brought under this Rule.

xxx

SEC. 4. Local government ordinances. In any action involving the validity of a local
government ordinance, the corresponding prosecutor or attorney of the local
government unit involved shall be similarly notified and entitled to be heard. (Emphasis
and underscoring supplied)

Respecting petitioner's contention that since the ordinance violates national laws, the
present petition delves on questions of law over which this Court has original
jurisdiction,[22] the same fails.

As reflected above, petitioner's assertion that the invalidity of the ordinance is premised
on her claim that she has a better right to the parcel of land referred to in the ordinance
is a factual issue.

At all events, even if this petition delves on questions of law, there is no statutory or
jurisprudential basis for according to this Court original and exclusive jurisdiction over
declaratory relief which advances only questions of law. [23]

Finally, while a petition for declaratory relief may be treated as one for prohibition if it
has far reaching implications and raises questions that need to be resolved, [24] there is
no allegation of facts by petitioner tending to show that she is entitled to such a writ.
The judicial policy must thus remain that this Court will not entertain direct resort to it,
except when the redress sought cannot be obtained in the proper courts or when
exceptional and compelling circumstances warrant availment of a remedy within and
calling for the exercise of this Courts primary jurisdiction. [25]

WHEREFORE, the petition is hereby DISMISSED.

Costs against the petitioner.

SO ORDERED.
[8]
Article 457. To the owners of lands adjoining the banks of rivers belong the accretion
which they gradually receive from the effects of the current of the waters.

[9]
Article 620. Continuous and apparent easements are acquired either by virtue of a
title or by prescription of ten years.

THIRD DIVISION

[ G.R. NO. 144101, September 16, 2005 ]

ANTONIO P. TAMBUNTING, JR. AND COMMERCIAL HOUSE OF FINANCE, INC.,

PETITIONERS, VS. SPOUSES EMILIO SUMABAT AND ESPERANZA BAELLO,
RESPONDENTS.

DECISION

CORONA, J.

This petition for review on certiorari under Rule 45 of the Rules of Court assails the
February 11, 2000 decision of the Regional Trial Court (RTC) of Caloocan City, Branch
120, in Civil Case No. C-16822.

This case involves a dispute over a parcel of land situated in Caloocan City covered by
TCT No. (87655) 18837. It was previously registered in the names of respondents,
spouses Emilio Sumabat and Esperanza Baello. On May 3, 1973, respondents
mortgaged it to petitioner Antonio Tambunting, Jr. to secure the payment of a P7,727.95
loan. In August 1976, respondents were informed that their indebtedness had
ballooned to P15,000 for their failure to pay the monthly amortizations. In May 1977,
because respondents defaulted in their obligation, petitioner Commercial House of
Finance, Inc. (CHFI), as assignee of the mortgage, initiated foreclosure proceedings on
the mortgaged property but the same did not push through. It was restrained by the
then Court of First Instance (CFI) of Caloocan City, Branch 33 (now RTC Branch 123) in
Civil Case No. C-6329, a complaint for injunction filed by respondents against
petitioners. However, the case was subsequently dismissed for failure of the parties to
appear at the hearing on November 9, 1977.

On March 16, 1979, respondents filed an action for declaratory relief with the CFI of
Caloocan City, Branch 33, seeking a declaration of the extent of their actual
indebtedness. It was docketed as Civil Case No. C-7496. Petitioners were declared in
default for failure to file an answer within the reglementary period. They moved for the
dismissal of the action on the ground that its subject, the mortgage deed, had already
been breached prior to the filing of the action. The motion was denied for having been
filed out of time and petitioners had already been declared in default.

On January 8, 1981, the CFI rendered its decision. It fixed respondents' liability at
P15,743.83 and authorized them to consign the amount to the court for proper
disposition. In compliance with the decision, respondents consigned the required
amount on January 9, 1981.

In March 1995, respondents received a notice of sheriff's sale indicating that the
mortgage had been foreclosed by CHFI on February 8, 1995 and that an extrajudicial
sale of the property would be held on March 27, 1995.

On March 27, 1995, respondents instituted Civil Case No. C-16822, a petition for
preliminary injunction, damages and cancellation of annotation of encumbrance with
prayer for the issuance of a temporary restraining order, with the RTC of Caloocan City,
Branch 120. However, the public auction scheduled on that same day proceeded and
the property was sold to CHFI as the highest bidder. Respondents failed to redeem the
property during the redemption period. Hence, title to the property was consolidated in
favor of CHFI and a new certificate of title (TCT No. 310191) was issued in its name. In
view of these developments, respondents amended their complaint to an action for
nullification of foreclosure, sheriff's sale and consolidation of title, reconveyance and
damages.

On February 11, 2000, the RTC issued the assailed decision. It ruled that the 1981 CFI
decision in Civil Case No. C-7496 (fixing respondents' liability at P15,743.83 and
authorizing consignation) had long attained finality. The mortgage was extinguished
when respondents paid their indebtedness by consigning the amount in court.
Moreover, the ten-year period within which petitioners should have foreclosed the
property was already barred by prescription. They abused their right to foreclose the
property and exercised it in bad faith. As a consequence, the trial court nullified the
foreclosure and extrajudicial sale of the property, as well as the consolidation of title in
CHFI's name in 1995. It then ordered the register of deeds of Caloocan City to cancel
TCT No. 310191 and to reconvey the property to respondents. It also held petitioners
liable for moral damages, exemplary damages and attorney's fees.

Petitioners moved for a reconsideration of the trial court's decision but it was denied.
Hence, this petition.

Petitioners claim that the trial court erred when it affirmed the validity of the
consignation. They insist that the CFI was barred from taking cognizance of the action
for declaratory relief since, petitioners being already in default in their loan
amortizations, there existed a violation of the mortgage deed even before the institution
of the action. Hence, the CFI could not have rendered a valid judgment in Civil Case
No. C-7496 and the consignation made pursuant to a void judgment was likewise void.
Respondents also fault the trial court for holding that their right to foreclose the property
had already prescribed.

True, the trial court erred when it ruled that the 1981 CFI decision in Civil Case No. C-
7496 was already final and executory.

An action for declaratory relief should be filed by a person interested under a deed, will,
contract or other written instrument, and whose rights are affected by a statute,
executive order, regulation or ordinance before breach or violation thereof. [1] The
purpose of the action is to secure an authoritative statement of the rights and
obligations of the parties under a statute, deed, contract, etc. for their guidance in its
enforcement or compliance and not to settle issues arising from its alleged breach. [2] It
may be entertained only before the breach or violation of the statute, deed, contract,
etc. to which it refers. [3] Where the law or contract has already been contravened prior to
the filing of an action for declaratory relief, the court can no longer assume jurisdiction
over the action.[4] In other words, a court has no more jurisdiction over an action for
declaratory relief if its subject, i.e., the statute, deed, contract, etc., has already been
infringed or transgressed before the institution of the action. Under such circumstances,
inasmuch as a cause of action has already accrued in favor of one or the other party,
there is nothing more for the court to explain or clarify short of a judgment or final order.

Here, an infraction of the mortgage terms had already taken place before the filing of
Civil Case No. C-7496. Thus, the CFI lacked jurisdiction when it took cognizance of the
case in 1979. And in the absence of jurisdiction, its decision was void and without legal
effect. As this Court held in Arevalo v. Benedicto:[5]

Furthermore, the want of jurisdiction by a court over the subject-matter renders its
judgment void and a mere nullity, and considering that a void judgment is in legal effect
no judgment, by which no rights are divested, from which no rights can be obtained,
which neither binds nor bars any one, and under which all acts performed and all claims
flowing out of are void, and considering further, that the decision, for want of jurisdiction
of the court, is not a decision in contemplation of law, and, hence, can never become
executory, it follows that such a void judgment cannot constitute a bar to another case
by reason of res judicata.

Nonetheless, the petition must fail.

Article 1142 of the Civil Code is clear. A mortgage action prescribes after ten years.

An action to enforce a right arising from a mortgage should be enforced within ten years
from the time the right of action accrues. [6] Otherwise, it will be barred by prescription
and the mortgage creditor will lose his rights under the mortgage.

Here, petitioners' right of action accrued in May 1977 when respondents defaulted in
their obligation to pay their loan amortizations. It was from that time that the ten-year
period to enforce the right under the mortgage started to run. The period was
interrupted when respondents filed Civil Case No. C-6329 sometime after May 1977
and the CFI restrained the intended foreclosure of the property. However, the period
commenced to run again on November 9, 1977 when the case was dismissed.

The respondents' institution of Civil Case No. C-7496 in the CFI on March 16, 1979 did
not interrupt the running of the ten-year prescriptive period because, as discussed
above, the court lacked jurisdiction over the action for declaratory relief. All proceedings
therein were without legal effect. Thus, petitioners could have enforced their right under
the mortgage, including its foreclosure, only until November 7, 1987, the tenth year from
the dismissal of Civil Case No. C-6329. Thereafter, their right to do so was already
barred by prescription.

The foreclosure held on February 8, 1995 was therefore some seven years too late. The
same thing can be said about the public auction held on March 27, 1995, the
consolidation of title in CHFI's favor and the issuance of TCT No. 310191 in its name.
They were all void and did not exist in the eyes of the law.

WHEREFORE, the petition is hereby DENIED.

Costs against petitioners.

SO ORDERED.

REVIEW OF
JUDGMENTS AND
FINAL ORDERS OR
RESOLUTIONS OF
 THE COMMISSION
ON ELECTIONS
AND COMMISION
ON AUDIT

EN BANC
[ G.R. No. 193808, June 26, 2012 ]
LUIS K. LOKIN, JR. AND TERESITA F. PLANAS, PETITIONERS, VS. COMMISSION
ON ELECTIONS (COMELEC), CITIZENS' BATTLE AGAINST CORRUPTION PARTY
LIST REPRESENTED BY VIRGINIA S. JOSE, SHERWIN N. TUGNA, AND CINCHONA
CRUZ GONZALES, RESPONDENTS.

DECISION
SERENO, J.:
The present petition having been filed beyond the reglementary period, Rule 64 of the
Rules of Court compels a dismissal on this basis alone. Despite petitioner's inexplicable
disregard of basic concepts, this Court deems it appropriate to reiterate the specific
procedure for the review of judgments made by the Commission on Elections
(COMELEC) as laid down in Rule 64, and how it is differentiated from the more general
remedy afforded by Rule 65.
On 5 July 2010, the COMELEC First Division issued a Resolution [1] expunging the
Certificate of Nomination which included herein petitioners as representatives of the
party-list group known as Citizens' Battle Against Corruption (CIBAC). The
COMELEC en banc affirmed the said Resolution, prompting Luis Lokin, Jr. and Teresita
F. Planas to file the present Petition for Certiorari. Petitioners allege grave abuse of
discretion on the part of the COMELEC in issuing both Resolutions, praying that they be
recognized as the legitimate nominees of CIBAC party-list, and that petitioner Lokin, Jr.
be proclaimed as the CIBAC party-list representative to the House of Representatives.

Respondent CIBAC party-list is a multi-sectoral party registered [2] under Republic Act
No. (R.A.) 7941, otherwise known as the Party- List System Act. As stated in its
constitution and bylaws, the platform of CIBAC is to fight graft and corruption and to
promote ethical conduct in the country's public service. [3] Under the leadership of the
National Council, its highest policy making and governing body, the party participated in
the 2001, 2004, and 2007 elections. [4] On 20 November 2009, two different entities, both
purporting to represent CIBAC, submitted to the COMELEC a "Manifestation of Intent to
Participate in the Party-List System of Representation in the May 10, 2010 Elections."
The first Manifestation[5] was signed by a certain Pia B. Derla, who claimed to be the
party's acting secretary-general. At 1:30 p.m. of the same day, another
Manifestation[6] was submitted by herein respondents Cinchona Cruz-Gonzales and
Virginia Jose as the party's vice-president and secretary-general, respectively.

On 15 January 2010, the COMELEC issued Resolution No. 8744 [7] giving due course to
CIBAC's Manifestation, "WITHOUT PREJUDICE ...TO the determination which of the
two factions of the registered party-list/coalitions/sectoral organizations which
filed two (2) manifestations of intent to participate is the official representative of
said party-list/coalitions/sectoral organizations xxx."[8]

On 19 January 2010, respondents, led by President and Chairperson Emmanuel Joel J.

Villanueva, submitted the Certificate of Nomination [9] of CIBAC to the COMELEC Law
Department. The nomination was certified by Villanueva and Virginia S. Jose. On 26
March 2010, Pia Derla submitted a second Certificate of Nomination, [10]which included
petitioners Luis Lokin, Jr. and Teresita Planas as party-list nominees. Derla affixed to the
certification her signature as "acting secretary-general" of CIBAC.

Claiming that the nomination of petitioners Lokin, Jr. and Planas was unauthorized,
respondents filed with the COMEEEC a "Petition to Expunge From The Records And/Or
For Disqualification," seeking to nullify the Certificate filed by Derla. Respondents
contended that Derla had misrepresented herself as "acting secretary-general," when
she was not even a member of CIBAC; that the Certificate of Nomination and other
documents she submitted were unauthorized by the party and therefore invalid; and that
it was Villanueva who was duly authorized to file the Certificate of Nomination on its
behalf.[11]

In the Resolution dated 5 July 2010, the COMELEC First Division granted the Petition,
ordered the Certificate filed by Deria to be expunged from the records, and declared
respondents' faction as the true nominees of CIBAC. [12] Upon Motion for
Reconsideration separately filed by the adverse parties, the COMELEC en
banc affirmed the Division's findings. In a per curiam Resolution dated 31 August 2010,
[13]
the Commission reiterated that Pia Derla was unable to prove her authority to file the
said Certificate, whereas respondents presented overwhelming evidence that
Villanueva deptitized CIBAC Secretary General Virginia Jose to submit the Certificate of
Nomination pursuant to CIBAC's Constitution and bylaws.

Petitioners now seek recourse with this Court in accordance with Rules 64 and 65 of the
Rules of Court, raising these issues: I) Whether the authority of Secretary General
Virginia Jose to file the party's Certificate of Nomination is an intra-corporate matter,
exclusively cognizable by special commercial courts, and over which the COMELEC
has no jurisdiction; and II) Whether the COMELEC erred in granting the Petition for
Disqualification and recognizing respondents as the properly authorized nominees of
CIBAC party-list.

As earlier stated, this Court denies the petition tor being filed outside the requisite
period. The review by this Court of judgments and final orders of the COMELEC is
governed specifically by Rule 64 of the Rules of Court, which stales:

Sec. 1. Scope. This rule shall govern the review of judgments and final orders or
resolutions of the Commission on Elections and the Commission on Audit.

Sec. 2. Mode of review. A judgment or final order or resolution of the Commission on

Elections and the Commission on Audit may be brought by the aggrieved party to the
Supreme Court on certiorari under Rule 65, except as hereinafter provided.
The exception referred to in Section 2 of this Rule refers precisely to the immediately
succeeding provision, Section 3 thereof, [14] which provides for the allowable period
within which to file petitions for certiorari from judgments of both the COMBLBC and the
Commission on Audit. Thus, while Rule 64 refers to the same remedy of certiorari as the
general rule in Rule 65, they cannot be equated, as they provide for different
reglementary periods.[15] Rule 65 provides for a period of 60 days from notice of
judgment sought to be assailed in the Supreme Court, while Section 3 expressly
provides for only 30 days, viz:

SEC. 3. Time to file petition.The petition shall be tiled within thirty (30) days from
notice of the judgment or final order or resolution sought to be reviewed. The filing of a
motion for new trial or reconsideration of said judgment or final order or
resolution, if allowed under the procedural rules of the Commission concerned,
shall interrupt the period herein fixed. It' the motion is denied, the aggrieved party
may file the petition within the remaining period, but which shall not be less than
five (5) days in any event, reckoned from notice of denial.

Petitioner received a copy of the first assailed Resolution on 12 July 2010. Upon the
Motion for Reconsideration tiled by petitioners on 15 July 2010, the COMELEC en
banc issued the second assailed Resolution on 31 August 2010. This per
curiam Resolution was received by petitioners on 1 September 2010. [16] Thus, pursuant
to Section 3 above, deducting the three days it took petitioners to file the Motion for
Reconsideration, they had a remaining period of 27 days or until 28 September 2010
within which to file the Petition for Certiorari with this Court.

However, petitioners filed the present Petition only on 1 October 2010, clearly outside
the required period. In Pates v. Commission on Elections and Domingo v. Commission
on Elections[17], we have established that the fresh-period rule used in Rule 65 does not
similarly apply to the timeliness of petitions under Rule 64. In Pates, this Court
dismissed the Petition for Certiorari on the sole ground that it was belatedly filed,
reasoning thus:

xxx. 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 (he 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."

xxx xxx xxx

Under this unique nature of the exceptions, a party asking for the suspension of
the Rules of Court comes to us with the heavy burden of proving that he deserves
to be accorded exceptional treatment- Every plea for a liberal construction of (lie
Rules must at least he accompanied by an explanation of why the party-litigant
failed to comply with the rules and by a justification for the requested liberal
construction.

xxx xxx xxx

xxx. Section 3, Article 1X-C of the Constitution expressly requires that the COMELEC's
rules of procedure should expedite the disposition of election cases. This Court labors
under the same command, as our proceedings arc in fact the constitutional extension of
cases that start with the COMEI.EC.

Based on these considerations, we do not find convenience and uniformity lo be

reasons sufficiently compelling to modify the required period for the filing of petitions
for certiorari under Rule 64. While the petitioner is correct in his historical data
about the Court's treatment of the periods for the filing of the different modes of
review, he misses out on the reason why the period under Section 3, Rule 64 has
been retained. The reason, as made clear above, is constitutionally-based and is
no less than the importance our Constitution accords to the prompt
determination of election results.[18] x x x. (Emphasis supplied, footnotes omitted.)

In this case, petitioners do not even attempt to explain why the Petition was filed out of
time. Clearly, they are aware of the applicable period for filing, as they themselves
invoke the remedy under Rule 64 in conjunction with Rule 65. Hence, there is no
acceptable reason for their failure to comply with the proper procedure. But even if this
Court were to apply liberality and take cognizance of the late Petition, the arguments
therein are flawed. The COMELEC has jurisdiction over cases pertaining to party
leadership and the nomination of party-list representatives.
Petitioners contend that the COMELEC never should have taken cognizance of
respondents' Petition to Expunge and/or for Disqualification. They have reached this
conclusion by characterizing the present matter as an intra-corporate dispute and, thus,
cognizable only by special commercial courts, particularly the designated commercial
court in this case, the Regional Trial Court in Pasig City.[19] Pia Derla purportedly filed
the Certificate of Nomination pursuant to the authority granted by the Board of Trustees
of the "CIBAC Foundation, Inc." the non-stock entity that is registered with the
Securities and Exchange Commission (SEC).[20]

Thus, petitioners insist that the group that participated in the party-list system in the
2004 and 2007 elections was the SEC-registered entity, and not the National Council,
which had allegedly become defunct since 2003. That was the year when CIBAC
Foundation, Inc. was established and registered with the SEC. [21] On the other hand,
respondents counter that the foundation was established solely for the purpose of acting
as CIBAC's legal and financial arm, as provided by the party's Constitution and bylaws.
It was never intended to substitute for, or oust CIBAC, the party-list itself. [22]

Even as petitioners insisted on the purely intra-corporate nature of the conflict between
"CIBAC Foundation" and the CIBAC Sectoral Party, they submitted their Certificate of
Nomination and Manifestation of Intent to participate in the party-list elections. Precisely,
petitioners were seeking the COMEXEC's approval of their eligibility to participate in the
upcoming party-list elections. In effect, they invoke its authority under the Party-List
System Act.[23] Contrary to their stance that the present dispute stemmed from an intra-
corporate matter, their submissions even recognize the COMELEC's constitutional
power to enforce and administer all laws relative to the conduct of an election,
plebiscite, initiative, referendum, and recall.24 More specifically, as one of its
constitutional functions, the COMELEC is also tasked to "register, alter sufficient
publication, political parties, organizations, or coalitions which, in addition to other
requirements, must present their platform or program of government." [25]

In any case, the COMELEC's jurisdiction to settle the struggle for leadership within the
party is well established. This singular power to rule upon questions of party identity and
leadership is exercised by the COMELEC as an incident to its enforcement powers.
In Laban ng Demokratikong Filipino v. Commission on Elections, [26] the Court held:
xxx. Corollary to the right of a political party "lo identify the people who constitute the
association and to select a standard bearer who best represents the party's ideologies
and preference" is the right lo exclude persons in its association and to not lend its
name and prestige to those which it deems undeserving to represent its ideals. A
certificate of candidacy makes known to the COMELEC that the person therein
mentioned has been nominated by a duly authorized political group empowered lo act
and that it reflects accurately the sentiment of the nominating body. A candidate's
political party affiliation is also printed followed by his or her name in the certified list of
candidates. A candidate misrepresenting himself or herself to be a party's
candidate, therefore, not only misappropriates (he party's name and prestige but
foists a deception upon the electorate, who may unwittingly cast its ballot for him
or her on the mistaken belief that he or she stands for the party's principles. To
prevent this occurrence, the COMELEC has the power and the duty to step in and
enforce the law not only to protect the party but, more importantly, the electorate,
in line with the Commission's broad constitutional mandate to ensure orderly
elections.[27] (Emphasis supplied.)

Similar to the present case, Laban delved into the issue of leadership for the purpose of
determining which officer or member was the duly authorized representative tasked
with filing the Certificate of Nomination, pursuant to its Constitution and bylaws, to wit:

The only issue in this case, as defined by the COMELEC itself, is who as between the
Party Chairman and the Secretary General has the authority to sign certificates of
candidacy of the official candidates of the party. Indeed, the
petitioners' Manifestation and Petition before the COMELEC merely asked the
Commission to recognize only those certificates of candidacy signed by petitioner Sen.
Angara or his authorized representative, and no other.[28]

In the 2010 case Atienza v. Commission on Elections,[29] it was expressly settled that the
COMELEC possessed the authority to resolve intra-party disputes as a necessary
tributary of its constitutionally mandated power to enforce election laws and register
political parties. The Court therein cited Kalaw v. Commission on Elections and
Palmares v. Commission on Elections, which uniformly upheld the COMELEC's
jurisdiction over intra-party disputes:
The COMELEC's jurisdiction over intra-party leadership disputes has already been
settled by the Court. The Court ruled in Kalaw v. Commission on Elections that the
COMELEC's powers and functions under Section 2, Article 1X-C of the Constitution,
"include the ascertainment of the identity of the political party and its legitimate officers
responsible for its acts." The Court also declared in another case that the COMELEC's
power to register political parties necessarily involved the determination of the persons
who must act on its behalf Thus, the COMELEC may resolve an intra-party leadership
dispute, in a proper case brought before it, as an incident of its power to register political
parties.[30]

Furthermore, matters regarding the nomination of party-list representatives, as well as

their individual qualifications, are outlined in the Party-List System Law. Sections 8 and
9 thereof state:

Sec. 8. Nomination of Party-List Representatives. Each registered party, organization or

coalition shall submit lo the COMELEC not later than forty-five (45) days before the
election a list of names, not less than five (5), from which party-list representatives shall
be chosen in case it obtains the required number of votes.

A person may be nominated in one (1) list only. Only persons who have given their
consent in writing may be named in the list. The list shall not include any candidate for
any elective office or a person who has lost his bid for an elective office in the
immediately preceding election. No change of names or alteration of the order of
nominees shall be allowed after the same shall have been submitted to the COMELEC
except in cases where the nominee dies, or withdraws in writing his nomination,
becomes incapacitated in which ease the name of the substitute nominee shall be
placed last in the list. Incumbent sectoral representatives in the House of
Representatives who are nominated in the party-list system shall not be considered
resigned.

Sec. 9. Qualifications of Party-List Nominees. No person shall be nominated as party-

list representative unless he is a natural-born citizen of the Philippines, a registered
voter, a resident of the Philippines for a period of not less than one (l)year immediately
preceding the day of the election, able to read and write, a bona fide member of the
party or organization which he seeks to represent for at least ninety (90) days preceding
the day of the election, and is at least twenty-five (25) years of age on the day of the
election.

By virtue of the aforesaid mandate of the Party-List Law vesting the COMELEC with
jurisdiction over the nomination of party-list representatives and prescribing the
qualifications of each nominee, the COMELEC promulgated its "Rules on
Disqualification Cases Against Nominees of Party-List Groups/ Organizations
Participating in the 10 May 2010 Automated National and Local Elections." [31] Adopting
the same qualifications of party-list nominees listed above, Section 6 of these Rules
also required that:

The party-list group and the nominees must submit documentary evidence in
consonance with the Constitution, R..A. 7941 and other laws to duly prove that the
nominees truly belong to the marginalized and under/represented sector/s, the sectoral
party, organization, political party or coalition they seek to represent, which may include
but not limited to the following:

a. Track record of the party-list group/organization showing active participation of the

nominee/s in the undertakings of the party-list group/organization for the advancement
of the marginalized and underrepresented sector/s, the sectoral party, organization,
political party or coalition they seek to represent;

b. Proofs that the nominee/s truly adheres to the advocacies of the party-list
group/organizations (prior declarations, speeches, written articles, and such other
positive actions on the part of the nominee/s showing his/her adherence to the
advocacies of the party-list group/organizations);

c. Certification that the nominee/s is/are a bona fide member of the party-list group/
organization for at least ninety (90) days prior lo the election; and

d. In case of a party-list group/organization seeking representation of the marginalized

and under represented sector/s, proof that the nominee/s is not only an advocate of the
party-list/organization but is/are also a bona fide member/s of said marginalized and
underrepresented sector.

The Law Department shall require party-list group and nominees to submit the foregoing
documentary evidence if not complied with prior to the effectivity of this resolution not
later than three (3) days from the last day of filing of the list of nominees.

Contrary to petitioners' stance, no grave abuse of discretion is attributable to the

COMELEC First Division and the COMELEC en banc. The tribunal correctly found that
Pia Derla's alleged authority as "acting secretary-general" was an unsubstantiated
allegation devoid of any supporting evidence. Petitioners did not submit any
documentary evidence that Derla was a member of CIBAC, let alone the representative
authorized by the party to submit its Certificate of Nomination. [32] The COMELEC ruled:

A careful perusal of the records readily shows that Pia B. Derla, who has signed and
submitted, as the purported Acting Secretary General of CIBAC, the Certificates of
Nomination of Respondents, has no authority to do so. Despite Respondents' repeated
claim that Ms. Derla is a member and officer of CIBAC, they have not presented any
proof in support of the same. We are at a loss as to the manner by which Ms. Derla has
assumed the post, and We see nothing but Respondents' claims and
writings/certifications by Ms. Derla herself that point to that alleged fact. Surely, We
cannot rely on these submissions, as they are the very definition of self-serving
declarations.

On the other hand...We cannot help but be convinced that it was Emmanuel Joel J.
Villanueva, as the Party President and Chairman, who had been given the sole
authority; at least for the 10 May 2010 Elections, to submit the list of nominees for the
Party. The records would show that, in accordance with the Party's Constitution and by-
laws, its National Council, the highest policymaking and governing body of the Party,
met on 12 November 2009 and there being a quorum, then proceeded to elect its new
set of officers, which included Mr. Villanueva as both Party President and Party
Chairman, and Virginia S. Jose as Party Secretary General. During the same meeting,
the Party's New Electoral Congress, which as per the CIBAC's Constitution and By-
Laws, was also composed of the National Council Members and had the task of
choosing the nominees for the Party in the Party-List Elections, unanimously ruled to
delegate to the Party President such latter function. This set of facts, which had not
been belied by concrete contrary evidence, weighed heavily against Respondents and
favorably for Petitioner.[33]

Pia Derla, who is not even a member of CIBAC, is thus a virtual stranger to the party-
list, and clearly not qualified to attest to petitioners as CIBAC nominees, or certify their
nomination to the COMELEC. Petitioners cannot use their registration with the SEC as
a substitute for the evidentiary requirement to show that the nominees, including Derla,
are bona fide members of the party. Petitioners Planas and Lokin, Jr. have not even
presented evidence proving the affiliation of the so-called Board of Trustees to the
CIBAC Sectoral Party that is registered with COMELEC.

Petitioners cannot draw authority from the Board of Trustees of the SEC-registered
entity, because the Constitution of C1BAC expressly mandates that it is the National
Council, as the governing body of CIBAC, that has the power to formulate the policies,
plans, and programs of the Party, and to issue decisions and resolutions binding on
party members and officers. [34] Contrary to petitioners' allegations, the National Council
of CIBAC has not become defunct, and has certainly not been replaced by the Board of
Trustees of the SEC-registered entity. The COMELEC carefully perused the documents
of the organization and outlined the process followed by the National Council before it
complied with its task of choosing the party's nominees. This was based on the
''Minutes of Meeting of CIBAC Party-List National Council" held on 12 November 2009,
which respondents attached to their Memorandum. [35]

For its part, the COMELEC en banc also enumerated the documentary evidence that
further bolstered respondents' claim that it is Chairman Villanueva and Secretary
General Virginia Jose who were duly authorized to submit the Certificate of Nomination
to the COMELEC[36] These include:

a. The Joint Affidavit of Resolutions of the CIBAC National Council and the National
electoral Congress of CIBAC dated 12 November 2009;

b. Certificate of Deputization and Delegation of Authority issued to CIBAC

Secretary-General Virginia S. Jose by the CIBAC President;

c. Constitution and By-Laws of CIBAC as annexed to its Petition for Registration as

Sectoral Organization Under the Party-List System filed by CIBAC on 13 November
2000; and

d. Manifestation dated 8 January 2010 by CIBAC's Secretary General Virginia S.

Jose providing the official list of officers of CIBAC.[37]
WHEREFORE , finding no grave abuse of discretion on the part of the COMELEC in
issuing (lie assailed Resolutions, the instant Petition is DISMISSED. This
Court AFFIRMS the judgment of the COMELEC expunging from its records the
Certificate of Nomination filed on 26 March 2010 by Pia B. Derla. The nominees, as
listed in the Certificate of Nomination filed on 19 January 2010 by Emmanuel Joel J.
Villanueva, President and Chairman of Citizens' Battle Against Corruption (CIBAC)
Party List, are recognized as the legitimate nominees of the said party.

SO ORDERED.
 CERTIORARI,
PROHIBITION AND
MANDAMUS

THIRD DIVISION

[ G.R. No. 165273, March 10, 2010 ]

LEAH PALMA, PETITIONER, VS. HON. DANILO P. GALVEZ, IN HIS CAPACITY AS

PRESIDING JUDGE OF THE REGIONAL TRIAL COURT OF ILOILO CITY, BRANCH
24; AND PSYCHE ELENA AGUDO, RESPONDENTS.

DECISION
PERALTA, J.:

Assailed in this petition for certiorari under Rule 65 of the Rules of Court are the Orders
dated May 7, 2004[1] and July 21, 2004[2] of the Regional Trial Court (RTC) of Iloilo City,
Branch 24, granting the motion to dismiss filed by private respondent Psyche Elena
Agudo and denying reconsideration thereof, respectively.

On July 28, 2003, petitioner Leah Palma filed with the RTC an action for damages
against the Philippine Heart Center (PHC), Dr. Danilo Giron and Dr. Bernadette O. Cruz,
alleging that the defendants committed professional fault, negligence and omission for
having removed her right ovary against her will, and losing the same and the tissues
extracted from her during the surgery; and that although the specimens were
subsequently found, petitioner was doubtful and uncertain that the same was hers as
the label therein pertained that of somebody else. Defendants filed their respective
Answers. Petitioner subsequently filed a Motion for Leave to Admit Amended Complaint,
praying for the inclusion of additional defendants who were all nurses at the PHC,
namely, Karla Reyes, Myra Mangaser and herein private respondent Agudo. Thus,
summons were subsequently issued to them.

On February 17, 2004, the RTC's process server submitted his return of summons
stating that the alias summons, together with a copy of the amended complaint and its
annexes, were served upon private respondent thru her husband Alfredo Agudo, who
received and signed the same as private respondent was out of the country. [3]

On March 1, 2004, counsel of private respondent filed a Notice of Appearance and a

Motion for Extension of Time to File Answer [4] stating that he was just engaged by
private respondent's husband as she was out of the country and the Answer was
already due.

On March 15, 2004, private respondent's counsel filed a Motion for Another Extension of
Time to File Answer,[5]and stating that while the draft answer was already finished, the
same would be sent to private respondent for her clarification/verification before the
Philippine Consulate in Ireland; thus, the counsel prayed for another 20 days to file the
Answer.

On March 30, 2004, private respondent filed a Motion to Dismiss [6] on the ground that
the RTC had not acquired jurisdiction over her as she was not properly served with
summons, since she was temporarily out of the country; that service of summons on her
should conform to Section 16, Rule 14 of the Rules of Court. Petitioner filed her
Opposition[7] to the motion to dismiss, arguing that a substituted service of summons on
private respondent's husband was valid and binding on her; that service of summons
under Section 16, Rule 14 was not exclusive and may be effected by other modes of
service, i.e., by personal or substituted service. Private respondent filed a
Comment[8] on petitioner's Opposition, and petitioner filed a Reply [9] thereto.

On May 7, 2004, the RTC issued its assailed Order granting private respondent's
motion to dismiss. It found that while the summons was served at private respondent's
house and received by respondent's husband, such service did not qualify as a valid
service of summons on her as she was out of the country at the time the summons was
served, thus, she was not personally served a summons; and even granting that she
knew that a complaint was filed against her, nevertheless, the court did not acquire
jurisdiction over her person as she was not validly served with summons; that
substituted service could not be resorted to since it was established that private
respondent was out of the country, thus, Section 16, Rule 14 provides for the service of
summons on her by publication.

Petitioner filed a motion for reconsideration, which the RTC denied in its Order dated
July 21, 2004.

Petitioner is now before us alleging that the public respondent committed a grave abuse
of discretion amounting to lack or excess of jurisdiction when he ruled that:

I. Substituted service of summons upon private respondent, a defendant residing in the

Philippines but temporarily outside the country is invalid;

II. Section 16, Rule 14, of the 1997 Rules of Civil Procedure limits the mode of service
of summons upon a defendant residing in the Philippines, but temporarily outside the
country, exclusively to extraterritorial service of summons under section 15 of the same
rule;

III. In not ruling that by filing two (2) motions for extension of time to file Answer, private
respondent had voluntarily submitted herself to the jurisdiction of respondent court,
pursuant to Section 20, Rule 14 of the 1997 Rules of Civil Procedure, hence, equivalent
to having been served with summons;

IV. The cases cited in his challenged Order of May 7, 2004 constitute stare
decisis despite his own admission that the factual landscape in those decided cases are
entirely different from those in this case. [10]

Petitioner claims that the RTC committed a grave abuse of discretion in ruling that
Section 16, Rule 14, limits the service of summons upon the defendant-resident who is
temporarily out of the country exclusively by means of extraterritorial service, i.e., by
personal service or by publication, pursuant to Section 15 of the same Rule. Petitioner
further argues that in filing two motions for extension of time to file answer, private
respondent voluntarily submitted to the jurisdiction of the court.

In her Comment, private respondent claims that petitioner's certiorari under Rule 65 is
not the proper remedy but a petition for review under Rule 45, since the RTC ruling
cannot be considered as having been issued with grave abuse of discretion; that the
petition was not properly verified because while the verification was dated September
15, 2004, the petition was dated September 30, 2004. She insists that since she was
out of the country at the time the service of summons was made, such service should
be governed by Section 16, in relation to Section 15, Rule 14 of the Rules of Court; that
there was no voluntary appearance on her part when her counsel filed two motions for
extension of time to file answer, since she filed her motion to dismiss on the ground of
lack of jurisdiction within the period provided under Section 1, Rule 16 of the Rules of
Court.

In her Reply, petitioner claims that the draft of the petition and the verification and
certification against forum shopping were sent to her for her signature earlier than the
date of the finalized petition, since the petition could not be filed without her signed
verification. Petitioner avers that when private respondent filed her two motions for
extension of time to file answer, no special appearance was made to challenge the
validity of the service of summons on her.

The parties subsequently filed their respective memoranda as required.

We shall first resolve the procedural issues raised by private respondent.
Private respondent's claim that the petition for certiorari under Rule 65 is a wrong
remedy thus the petition should be dismissed, is not persuasive. A petition
for certiorari is proper when any tribunal, board or officer exercising judicial or quasi-
judicial functions has acted without or in excess of jurisdiction, or with grave abuse of
discretion amounting to lack or excess of jurisdiction and there is no appeal, or any
plain, speedy, and adequate remedy at law.[11] There is "grave abuse of discretion" when
public respondent acts in a capricious or whimsical manner in the exercise of its
judgment as to be equivalent to lack of jurisdiction.

Section 1, Rule 41 of the 1997 Rules of Civil Procedure states that an appeal may be
taken only from a final order that completely disposes of the case; that no appeal may
be taken from (a) an order denying a motion for new trial or reconsideration; (b) an
order denying a petition for relief or any similar motion seeking relief from judgment; (c)
an interlocutory order; (d) an order disallowing or dismissing an appeal; (e) an order
denying a motion to set aside a judgment by consent, confession or compromise on the
ground of fraud, mistake or duress, or any other ground vitiating consent; (f) an order of
execution; (g) a judgment or final order for or against one or more of several
parties or in separate claims, counterclaims, cross-claims and third-party
complaints, while the main case is pending, unless the court allows an appeal
therefrom; or (h) an order dismissing an action without prejudice. In all the above
instances where the judgment or final order is not appealable, the aggrieved party may
file an appropriate special civil action for certiorari under Rule 65.

In this case, the RTC Order granting the motion to dismiss filed by private respondent is
a final order because it terminates the proceedings against her, but it falls within
exception (g) of the Rule since the case involves several defendants, and the complaint
for damages against these defendants is still pending. [12] Since there is no appeal, or
any plain, speedy, and adequate remedy in law, the remedy of a special civil action
for certiorari is proper as there is a need to promptly relieve the aggrieved party from the
injurious effects of the acts of an inferior court or tribunal. [13]

Anent private respondent's allegation that the petition was not properly verified, we find
the same to be devoid of merit. The purpose of requiring a verification is to secure an
assurance that the allegations of the petition have been made in good faith, or are true
and correct, not merely speculative. [14] In this instance, petitioner attached a verification
to her petition although dated earlier than the filing of her petition. Petitioner explains
that since a draft of the petition and the verification were earlier sent to her in New York
for her signature, the verification was earlier dated than the petition for certiorari filed
with us. We accept such explanation. While Section 1, Rule 65 requires that the petition
for certiorari be verified, this is not an absolute necessity where the material facts
alleged are a matter of record and the questions raised are mainly of law. [15] In this case,
the issue raised is purely of law.

Now on the merits, the issue for resolution is whether there was a valid service of
summons on private respondent.

In civil cases, the trial court acquires jurisdiction over the person of the defendant either
by the service of summons or by the latter's voluntary appearance and submission to
the authority of the former.[16] Private respondent was a Filipino resident who was
temporarily out of the Philippines at the time of the service of summons; thus, service of
summons on her is governed by Section 16, Rule 14 of the Rules of Court, which
provides:

Sec. 16. Residents temporarily out of the Philippines. - When an action is commenced
against a defendant who ordinarily resides within the Philippines, but who is temporarily
out of it, service may, by leave of court, be alsoeffected out of the Philippines, as under
the preceding section. (Emphasis supplied)

The preceding section referred to in the above provision is Section 15, which speaks of
extraterritorial service, thus:

SEC. 15. Extraterritorial service. When the defendant does not reside and is not
found in the Philippines, and the action affects the personal status of the plaintiff or
relates to, or the subject of which is, property within the Philippines, in which the
defendant has or claims a lien or interest, actual or contingent, or in which the relief
demanded consists, wholly or in part, in excluding the defendant from any interest
therein, or the property of the defendant has been attached within the Philippines,
service may, by leave of court, be effected out of the Philippines by personal service as
under section 6; or by publication in a newspaper of general circulation in such places
and for such time as the court may order, in which case a copy of the summons and
order of the court shall be sent by registered mail to the last known address of the
defendant, or in any other manner the court may deem sufficient. Any order granting
such leave shall specify a reasonable time, which shall not be less than sixty (60) days
after notice, within which the defendant must answer.

The RTC found that since private respondent was abroad at the time of the service of
summons, she was a resident who was temporarily out of the country; thus, service of
summons may be made only by publication.

We do not agree.

In Montefalcon v. Vasquez,[17] we said that because Section 16 of Rule 14 uses the

words "may" and "also," it is not mandatory. Other methods of service of summons
allowed under the Rules may also be availed of by the serving officer on a defendant-
resident who is temporarily out of the Philippines. Thus, if a resident defendant is
temporarily out of the country, any of the following modes of service may be resorted to:
(1) substituted service set forth in section 7 ( formerly Section 8), Rule 14; (2) personal
service outside the country, with leave of court; (3) service by publication, also with
leave of court; or (4) in any other manner the court may deem sufficient. [18]

In Montalban v. Maximo,[19] we held that substituted service of summons under the

present Section 7, Rule 14 of the Rules of Court in a suit in personam against residents
of the Philippines temporarily absent therefrom is the normal method of service of
summons that will confer jurisdiction on the court over such defendant. In the same
case, we expounded on the rationale in providing for substituted service as the normal
mode of service for residents temporarily out of the Philippines.

x x x A man temporarily absent from this country leaves a definite place of residence, a
dwelling where he lives, a local base, so to speak, to which any inquiry about him may
be directed and where he is bound to return. Where one temporarily absents himself, he
leaves his affairs in the hands of one who may be reasonably expected to act in his
place and stead; to do all that is necessary to protect his interests; and to communicate
with him from time to time any incident of importance that may affect him or his
business or his affairs. It is usual for such a man to leave at his home or with his
business associates information as to where he may be contacted in the event a
question that affects him crops up. If he does not do what is expected of him, and a
case comes up in court against him, he cannot just raise his voice and say that he is not
subject to the processes of our courts. He cannot stop a suit from being filed against
him upon a claim that he cannot be summoned at his dwelling house or residence or his
office or regular place of business.

Not that he cannot be reached within a reasonable time to enable him to contest a suit
against him. There are now advanced facilities of communication. Long distance
telephone calls and cablegrams make it easy for one he left behind to communicate
with him.[20]

Considering that private respondent was temporarily out of the country, the summons
and complaint may be validly served on her through substituted service under Section
7, Rule 14 of the Rules of Court which reads:

SEC. 7. Substituted service. -- If, for justifiable causes, the defendant cannot be served
within a reasonable time as provided in the preceding section, service may be effected
(a) by leaving copies of the summons at the defendant's residence with some person of
suitable age and discretion then residing therein, or (b) by leaving the copies at
defendant's office or regular place of business with some competent person in charge
thereof.

We have held that a dwelling, house or residence refers to the place where the person
named in the summons is living at the time when the service is made, even though he
may be temporarily out of the country at the time. [21] It is, thus, the service of the
summons intended for the defendant that must be left with the person of suitable age
and discretion residing in the house of the defendant. Compliance with the rules
regarding the service of summons is as important as the issue of due process as that of
jurisdiction.[22]

Section 7 also designates the persons with whom copies of the process may be left.
The rule presupposes that such a relation of confidence exists between the person with
whom the copy is left and the defendant and, therefore, assumes that such person will
deliver the process to defendant or in some way give him notice thereof. [23]

In this case, the Sheriff's Return stated that private respondent was out of the country;
thus, the service of summons was made at her residence with her husband, Alfredo P.
Agudo, acknowledging receipt thereof. Alfredo was presumably of suitable age and
discretion, who was residing in that place and, therefore, was competent to receive the
summons on private respondent's behalf.

Notably, private respondent makes no issue as to the fact that the place where the
summons was served was her residence, though she was temporarily out of the country
at that time, and that Alfredo is her husband. In fact, in the notice of appearance and
motion for extension of time to file answer submitted by private respondent's counsel,
he confirmed the Sheriff's Return by stating that private respondent was out of the
country and that his service was engaged by respondent's husband. In his motion for
another extension of time to file answer, private respondent's counsel stated that a draft
of the answer had already been prepared, which would be submitted to private
respondent, who was in Ireland for her clarification and/or verification before the
Philippine Consulate there. These statements establish the fact that private respondent
had knowledge of the case filed against her, and that her husband had told her about
the case as Alfredo even engaged the services of her counsel.

In addition, we agree with petitioner that the RTC had indeed acquired jurisdiction over
the person of private respondent when the latter's counsel entered his appearance on
private respondent's behalf, without qualification and without questioning the propriety of
the service of summons, and even filed two Motions for Extension of Time to File
Answer. In effect, private respondent, through counsel, had already invoked the RTC's
jurisdiction over her person by praying that the motions for extension of time to file
answer be granted. We have held that the filing of motions seeking affirmative relief,
such as, to admit answer, for additional time to file answer, for reconsideration of a
default judgment, and to lift order of default with motion for reconsideration, are
considered voluntary submission to the jurisdiction of the court.[24] When private
respondent earlier invoked the jurisdiction of the RTC to secure affirmative relief in her
motions for additional time to file answer, she voluntarily submitted to the jurisdiction of
the RTC and is thereby estopped from asserting otherwise. [25]

Considering the foregoing, we find that the RTC committed a grave abuse of discretion
amounting to excess of jurisdiction in issuing its assailed Orders.

WHEREFORE, the petition is GRANTED. The Orders dated May 7, 2004 and July 21,
2004 of the Regional Trial Court of Iloilo City, Branch 24, are hereby SET ASIDE.
Private respondent is DIRECTED to file her Answer within the reglementary period from
receipt of this decision.

SO ORDERED.

THIRD DIVISION

[ G.R. No. 182065, October 27, 2009 ]

EVELYN ONGSUCO AND ANTONIA SALAYA, PETITIONERS, VS. HON. MARIANO M.

MALONES, BOTH IN HIS PRIVATE AND OFFICIAL CAPACITY AS MAYOR OF THE
MUNICIPALITY OF MAASIN, ILOILO, RESPONDENT.

DECISION

CHICO-NAZARIO, J.:

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing
the Decision[1] dated 28 November 2006, rendered by the Court of Appeals in CA-G.R.
SP No. 86182, which affirmed the Decision [2] dated 15 July 2003, of the Regional Trial
Court (RTC), Branch 39, of Iloilo City, in Civil Case No. 25843, dismissing the special
civil action for Mandamus/Prohibition with Prayer for Issuance of a Temporary
Restraining Order and/or Writ of Preliminary Injunction, filed by petitioners Evelyn
Ongsuco and Antonia Salaya against respondent Mayor Mariano Malones of the
Municipality of Maasin, Iloilo.

Petitioners are stall holders at the Maasin Public Market, which had just been newly
renovated. In a letter[3] dated 6 August 1998, the Office of the Municipal Mayor informed
petitioners of a meeting scheduled on 11 August 1998 concerning the municipal public
market. Revenue measures were discussed during the said meeting, including the
increase in the rentals for the market stalls and the imposition of "goodwill fees" in the
amount of P20,000.00,[4]payable every month.

On 17 August 1998, the Sangguniang Bayan of Maasin approved Municipal Ordinance

No. 98-01, entitled "The Municipal Revised Revenue Code." The Code contained a
provision for increased rentals for the stalls and the imposition of goodwill fees in the
amount of P20,000.00 and P15,000.00 for stalls located on the first and second floors of
the municipal public market, respectively. The same Code authorized respondent to
enter into lease contracts over the said market stalls, [5] and incorporated a standard
contract of lease for the stall holders at the municipal public market.

Only a month later, on 18 September 1998, the Sangguniang Bayan of Maasin

approved Resolution No. 68, series of 1998, [6] moving to have the meeting dated 11
August 1998 declared inoperative as a public hearing, because majority of the persons
affected by the imposition of the goodwill fee failed to agree to the said measure.
However, Resolution No. 68, series of 1998, of the Sangguniang Bayan of Maasin was
vetoed by respondent on 30 September 1998. [7]
After Municipal Ordinance No. 98-01 was approved on 17 August 1998, another
purported public hearing was held on 22 January 1999. [8]

On 9 June 1999, respondent wrote a letter to petitioners informing them that they were
occupying stalls in the newly renovated municipal public market without any lease
contract, as a consequence of which, the stalls were considered vacant and open for
qualified and interested applicants. [9]

This prompted petitioners, together with other similarly situated stall holders at the
municipal public market,[10] to file before the RTC on 25 June 1999 a Petition for
Prohibition/Mandamus, with Prayer for Issuance of Temporary Restraining Order and/or
Writ of Preliminary Injunction,[11] against respondent. The Petition was docketed as Civil
Case No. 25843.

Petitioners alleged that they were bona fide occupants of the stalls at the municipal
public market, who had been religiously paying the monthly rentals for the stalls they
occupied.

Petitioners argued that public hearing was mandatory in the imposition of goodwill fees.
Section 186 of the Local Government Code of 1991 provides that an ordinance levying
taxes, fees, or charges shall not be enacted without any prior hearing conducted for the
purpose. Municipal Ordinance No. 98-01, imposing goodwill fees, is invalid on the
ground that the conferences held on 11 August 1998 and 22 January 1999 could not be
considered public hearings. According to Article 277(b)(3) of the Implementing Rules
and Regulations of the Local Government Code:

(3) The notice or notices shall specify the date or dates and venue of the public hearing
or hearings. The initial public hearing shall be held not earlier than ten (10) days from
the sending out of the notice or notices, or the last day of publication, or date of posting
thereof, whichever is later. (Emphasis ours.)

The letter from the Office of the Municipal Mayor was sent to stall holders on 6 August
1998, informing the latter of the meeting to be held, as was in fact held, on 11 August
1998, only five days after notice.[12]
Hence, petitioners prayed that respondent be enjoined from imposing the goodwill fees
pending the determination of the reasonableness thereof, and from barring petitioners
from occupying the stalls at the municipal public market and continuing with the
operation of their businesses.

Respondent, in answer, maintained that Municipal Ordinance No. 98-01 is valid. He

reasoned that Municipal Ordinance No. 98-01 imposed goodwill fees to raise income to
pay for the loan obtained by the Municipality of Maasin for the renovation of its public
market. Said ordinance is not per se a tax or revenue measure, but involves the
operation and management of an economic enterprise of the Municipality of Maasin as
a local government unit; thus, there was no mandatory requirement to hold a public
hearing for the enactment thereof. And, even granting that a public hearing was
required, respondent insisted that public hearings take place on 11 August 1998 and 22
January 1999.

Respondent further averred that petitioners were illegally occupying the market stalls,
and the only way petitioners could legitimize their occupancy of said market stalls would
be to execute lease contracts with the Municipality of Maasin. While respondent
admitted that petitioners had been paying rentals for their market stalls in the amount of
P45.00 per month prior to the renovation of the municipal public market, respondent
asserted that no rentals were paid or collected from petitioners ever since the
renovation began.

Respondent sought from the RTC an award for moral damages in the amount of not
less than P500,000.00, for the social humiliation and hurt feelings he suffered by reason
of the unjustified filing by petitioners of Civil Case No. 25843; and an order for
petitioners to vacate the renovated market stalls and pay reasonable rentals from the
date they began to occupy said stalls until they vacate the same. [13]

The RTC subsequently rendered a Decision [14] on 15 July 2003 dismissing the Petition
in Civil Case No. 25843.

The RTC found that petitioners could not avail themselves of the remedy
of mandamus or prohibition. It reasoned that mandamus would not lie in this case where
petitioners failed to show a clear legal right to the use of the market stalls without paying
the goodwill fees imposed by the municipal government. Prohibition likewise would not
apply to the present case where respondent's acts, sought to be enjoined, did not
involve the exercise of judicial or quasi-judicial functions.

The RTC also dismissed the Petition in Civil Case No. 25843 on the ground of non-
exhaustion of administrative remedies. Petitioners' failure to question the legality of
Municipal Ordinance No. 98-01 before the Secretary of Justice, as provided under
Section 187 of the Local Government Code, [15] rendered the Petition raising the very
same issue before the RTC premature.

The dispositive part of the RTC Decision dated 15 July 2003 reads:

WHEREFORE, in view of all the foregoing, and finding the petition without merit, the
same is, as it is hereby ordered, dismissed. [16]

On 12 August 2003, petitioners and their co-plaintiffs filed a Motion for Reconsideration.
[17]
The RTC denied petitioners' Motion for Reconsideration in a Resolution dated 18
June 2004.[18]

While Civil Case No. 25843 was pending, respondent filed before the 12 th Municipal
Circuit Trial Court (MCTC) of Cabatuan-Maasin, Iloilo City a case in behalf of the
Municipality of Maasin against petitioner Evelyn Ongsuco, entitled Municipality of
Maasin v. Ongsuco, a Complaint for Unlawful Detainer with Damages, docketed as
MCTC Civil Case No. 257. On 18 June 2002, the MCTC decided in favor of the
Municipality of Maasin and ordered petitioner Ongsuco to vacate the market stalls she
occupied, Stall No. 1-03 and Stall No. 1-04, and to pay monthly rentals in the amount of
P350.00 for each stall from October 2001 until she vacates the said market stalls. [19] On
appeal, Branch 36 of the RTC of Maasin, Iloilo City, promulgated a Decision, dated 29
April 2003, in a case docketed as Civil Case No. 02-27229 affirming the decision of the
MCTC. A Writ of Execution was issued by the MCTC on 8 December 2003. [20]

Petitioners, in their appeal before the Court of Appeals, docketed as CA-G.R. SP No.
86182, challenged the dismissal of their Petition for Prohibition/Mandamus docketed as
Civil Case No. 25843 by the RTC. Petitioners explained that they did appeal the
enactment of Municipal Ordinance No. 98-01 before the Department of Justice, but their
appeal was not acted upon because of their failure to attach a copy of said municipal
ordinance. Petitioners claimed that one of their fellow stall holders, Ritchelle Mondejar,
wrote a letter to the Officer-in-Charge (OIC), Municipal Treasurer of Maasin, requesting
a copy of Municipal Ordinance No. 98-01, but received no reply. [21]

In its Decision dated 28 November 2006 in CA-G.R. SP No. 86182, the Court of
Appeals again ruled in respondent's favor.

The Court of Appeals declared that the "goodwill fee" was a form of revenue measure,
which the Municipality of Maasin was empowered to impose under Section 186 of the
Local Government Code. Petitioners failed to establish any grave abuse of discretion
committed by respondent in enforcing goodwill fees.

The Court of Appeals additionally held that even if respondent acted in grave abuse of
discretion, petitioners' resort to a petition for prohibition was improper, since
respondent's acts in question herein did not involve the exercise of judicial, quasi-
judicial, or ministerial functions, as required under Section 2, Rule 65 of the Rules of
Court. Also, the filing by petitioners of the Petition for Prohibition/Mandamus before the
RTC was premature, as they failed to exhaust administrative remedies prior thereto.
The appellate court did not give any weight to petitioners' assertion that they filed an
appeal challenging the legality of Municipal Ordinance No. 98-01 before the Secretary
of Justice, as no proof was presented to support the same.

In the end, the Court of Appeals decreed:

WHEREFORE, in view of the foregoing, this Court finds the instant appeal bereft of
merit. The assailed decision dated July 15, 2003 as well as the subsequent resolution
dated 18 June 2004 are hereby AFFIRMED and the instant appeal is
hereby DISMISSED. [22]

Petitioners filed a Motion for Reconsideration [23] of the foregoing Decision, but it was
denied by the Court of Appeals in a Resolution [24] dated 8 February 2008.

Hence, the present Petition, where petitioners raise the following issues:

I
WHETHER OR NOT THE PETITIONERS HAVE EXHAUSTED ADMINISTRATIVE
REMEDIES BEFORE FILING THE INSTANT CASE IN COURT;

II

WHETHER OR NOT EXHAUSTION OF ADMINISTRATIVE REMEDIES IS

APPLICABLE IN THIS CASE; AND

III

WHETHER OR NOT THE APPELLEE MARIANO MALONES WHO WAS THEN THE
MUNICIPAL MAYOR OF MAASIN, ILOILO HAS COMMITTED GRAVE ABUSE OF
DISCRETION.[25]

After a close scrutiny of the circumstances that gave rise to this case, the Court
determines that there is no need for petitioners to exhaust administrative remedies
before resorting to the courts.

The findings of both the RTC and the Court of Appeals that petitioners' Petition for
Prohibition/Mandamus in Civil Case No. 25843 was premature is anchored on Section
187 of the Local Government Code, which reads:

Section 187. Procedure for Approval and Effectivity of Tax Ordinances and Revenue
Measures; Mandatory Public Hearings.--The procedure for approval of local tax
ordinances and revenue measures shall be in accordance with the provisions of this
Code: Provided, That public hearings shall be conducted for the purpose prior to the
enactment thereof: Provided, further, That any question on the constitutionality or
legality of tax ordinances or revenue measures may be raised on appeal within
thirty (30) days from the effectivity thereof to the Secretary of Justice who shall
render a decision within sixty (60) days from the date of receipt of the appeal:Provided,
however, That such appeal shall not have the effect of suspending the effectivity of the
ordinance and the accrual and payment of the tax, fee, or charge levied
therein: Provided, finally, That within thirty (30) days after receipt of the decision or the
lapse of the sixty-day period without the Secretary of Justice acting upon the appeal, the
aggrieved party may file appropriate proceedings with a court of competent jurisdiction.
(Emphasis ours.)

It is true that the general rule is that before a party is allowed to seek the intervention of
the court, he or she should have availed himself or herself of all the means of
administrative processes afforded him or her. Hence, if resort to a remedy within the
administrative machinery can still be made by giving the administrative officer
concerned every opportunity to decide on a matter that comes within his or her
jurisdiction, then such remedy should be exhausted first before the court's judicial power
can be sought. The premature invocation of the intervention of the court is fatal to one's
cause of action. The doctrine of exhaustion of administrative remedies is based on
practical and legal reasons. The availment of administrative remedy entails lesser
expenses and provides for a speedier disposition of controversies. Furthermore, the
courts of justice, for reasons of comity and convenience, will shy away from a dispute
until the system of administrative redress has been completed and complied with, so as
to give the administrative agency concerned every opportunity to correct its error and
dispose of the case. However, there are several exceptions to this rule. [26]

The rule on the exhaustion of administrative remedies is intended to preclude a court

from arrogating unto itself the authority to resolve a controversy, the jurisdiction over
which is initially lodged with an administrative body of special competence. Thus, a case
where the issue raised is a purely legal question, well within the competence; and the
jurisdiction of the court and not the administrative agency, would clearly constitute an
exception.[27]Resolving questions of law, which involve the interpretation and application
of laws, constitutes essentially an exercise of judicial power that is exclusively allocated
to the Supreme Court and such lower courts the Legislature may establish. [28]

In this case, the parties are not disputing any factual matter on which they still need to
present evidence. The sole issue petitioners raised before the RTC in Civil Case No.
25843 was whether Municipal Ordinance No. 98-01 was valid and enforceable despite
the absence, prior to its enactment, of a public hearing held in accordance with Article
276 of the Implementing Rules and Regulations of the Local Government Code. This is
undoubtedly a pure question of law, within the competence and jurisdiction of the RTC
to resolve.

Paragraph 2(a) of Section 5, Article VIII of the Constitution, expressly establishes the
appellate jurisdiction of this Court, and impliedly recognizes the original jurisdiction of
lower courts over cases involving the constitutionality or validity of an ordinance:

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

x x x x

(2) Review, revise, reverse, modify or affirm on appeal or certiorari, as the law or the
Rules of Court may provide, final judgments and orders of lower courts in:

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

In J.M. Tuason and Co., Inc. v. Court of Appeals,[29] Ynot v. Intermediate Appellate Court,
[30]
and Commissioner of Internal Revenue v. Santos,[31] the Court has affirmed the
jurisdiction of the RTC to resolve questions of constitutionality and validity of laws
(deemed to include local ordinances) in the first instance, without deciding questions
which pertain to legislative policy.

Although not raised in the Petition at bar, the Court is compelled to discuss another
procedural issue, specifically, the declaration by the RTC, and affirmed by the Court of
Appeals, that petitioners availed themselves of the wrong remedy in filing a Petition for
Prohibition/Mandamus before the RTC.

Sections 2 and 3, Rule 65 of the Rules of the Rules of Court lay down under what
circumstances petitions for prohibition and mandamus may be filed, to wit:

SEC. 2. Petition for prohibition. - When the proceedings of any tribunal, corporation,
board, officer or person, whether exercising judicial, quasi-judicial or ministerial
functions, are without or in excess of its or his jurisdiction, or with grave abuse of
discretion amounting to lack or excess of jurisdiction, and there is no appeal or any
other plain, speedy, and adequate remedy in the ordinary course of law, a person
aggrieved thereby may file a verified petition in the proper court, alleging the facts with
certainty and praying that judgment be rendered commanding the respondent to desist
from further proceedings in the action or matter specified therein, or otherwise granting
such incidental reliefs as law and justice may require.

SEC. 3. Petition for mandamus. - When any tribunal, corporation, board, officer or
person unlawfully neglects the performance of an act which the law specifically
enjoins as a duty resulting from an office, trust, or station, orunlawfully excludes
another from the use and enjoyment of a right or office to which such other is
entitled, and there is no other plain, speedy and adequate remedy in the ordinary
course of law, the person aggrieved thereby may file a verified petition in the proper
court, alleging the facts with certainty and praying that judgment be rendered
commanding the respondent, immediately or at some other time to be specified by the
court, to do the act required to be done to protect the rights of the petitioner, and to pay
the damages sustained by the petitioner by reason of the wrongful acts of the
respondent. (Emphases ours.)

In a petition for prohibition against any tribunal, corporation, board, or person -- whether
exercising judicial, quasi-judicial, or ministerial functions -- who has acted without or in
excess of jurisdiction or with grave abuse of discretion, the petitioner prays that
judgment be rendered, commanding the respondent to desist from further proceeding
in the action or matter specified in the petition. [32] On the other hand, the remedy of
mandamus lies to compel performance of a ministerial duty.[33] The petitioner for such a
writ should have a well-defined, clear and certain legal right to the performance of the
act, and it must be the clear and imperative duty of respondent to do the act required to
be done.[34]

In this case, petitioners' primary intention is to prevent respondent from implementing

Municipal Ordinance No. 98-01, i.e., by collecting the goodwill fees from petitioners and
barring them from occupying the stalls at the municipal public market. Obviously, the
writ petitioners seek is more in the nature of prohibition (commanding desistance),
rather than mandamus (compelling performance).

For a writ of prohibition, the requisites are: (1) the impugned act must be that of a
"tribunal, corporation, board, officer, or person, whether exercising judicial, quasi-judicial
or ministerial functions"; and (2) there is no plain, speedy, and adequate remedy in the
ordinary course of law."[35]

The exercise of judicial function consists of the power to determine what the law is and
what the legal rights of the parties are, and then to adjudicate upon the rights of the
parties. The term quasi-judicial function applies to the action and discretion of public
administrative officers or bodies that are required to investigate facts or ascertain the
existence of facts, hold hearings, and draw conclusions from them as a basis for their
official action and to exercise discretion of a judicial nature. In implementing Municipal
Ordinance No. 98-01, respondent is not called upon to adjudicate the rights of
contending parties or to exercise, in any manner, discretion of a judicial nature.

A ministerial function is one that an officer or tribunal performs in the context of a given
set of facts, in a prescribed manner and without regard for the exercise of his or its own
judgment, upon the propriety or impropriety of the act done. [36]

The Court holds that respondent herein is performing a ministerial function.

It bears to emphasize that Municipal Ordinance No. 98-01 enjoys the presumption of
validity, unless declared otherwise. Respondent has the duty to carry out the provisions
of the ordinance under Section 444 of the Local Government Code:

Section 444. The Chief Executive: Powers, Duties, Functions and Compensation. - (a)
The Municipal mayor, as the chief executive of the municipal government, shall exercise
such powers and perform such duties and functions as provided by this Code and other
laws.

(b) For efficient, effective and economical governance the purpose of which is the
general welfare of the municipality and its inhabitants pursuant to Section 16 of this
Code, the Municipal mayor shall:

x x x x

(2) Enforce all laws and ordinances relative to the governance of the municipality and
the exercise of its corporate powers provided for under Section 22 of this Code,
implement all approved policies, programs, projects, services and activities of the
municipality x x x.

x x x x
(3) Initiate and maximize the generation of resources and revenues, and apply the same
to the implementation of development plans, program objectives sand priorities as
provided for under Section 18 of this Code, particularly those resources and revenues
programmed for agro-industrial development and country-wide growth and progress,
and relative thereto, shall:

x x x x

(iii) Ensure that all taxes and other revenues of the municipality are collected, and
that municipal funds are applied in accordance with law or ordinance to the payment of
expenses and settlement of obligations of the municipality; x x x. (Emphasis ours.)

Municipal Ordinance No. 98-01 imposes increased rentals and goodwill fees on stall
holders at the renovated municipal public market, leaving respondent, or the municipal
treasurer acting as his alter ego, no discretion on whether or not to collect the said
rentals and fees from the stall holders, or whether or to collect the same in the amounts
fixed by the ordinance.

The Court further notes that respondent already deemed petitioners' stalls at the
municipal public market vacated. Without such stalls, petitioners would be unable to
conduct their businesses, thus, depriving them of their means of livelihood. It is
imperative on petitioners' part to have the implementation of Municipal Ordinance No.
98-01 by respondent stopped the soonest. As this Court has established in its previous
discussion, there is no more need for petitioners to exhaust administrative remedies,
considering that the fundamental issue between them and respondent is one of law,
over which the courts have competence and jurisdiction. There is no other plain,
speedy, and adequate remedy for petitioners in the ordinary course of law, except to
seek from the courts the issuance of a writ of prohibition commanding respondent to
desist from continuing to implement what is allegedly an invalid ordinance.

This brings the Court to the substantive issue in this Petition on the validity of Municipal
Ordinance N. 98-01.

Respondent maintains that the imposition of goodwill fees upon stall holders at the
municipal public market is not a revenue measure that requires a prior public hearing.
Rentals and other consideration for occupancy of the stalls at the municipal public
market are not matters of taxation.

Respondent's argument is specious.

Article 219 of the Local Government Code provides that a local government unit
exercising its power to impose taxes, fees and charges should comply with the
requirements set in Rule XXX, entitled "Local Government Taxation":

Article 219. Power to Create Sources of Revenue.--Consistent with the basic policy of
local autonomy, each LGU shall exercise its power to create its own sources of
revenue and to levy taxes, fees, or charges, subject to the provisions of this Rule.
Such taxes, fees, or charges shall accrue exclusively to the LGU. (Emphasis ours.)

Article 221(g) of the Local Government Code of 1991 defines "charges" as:

Article 221. Definition of Terms.

x x x x

(g) Charges refer to pecuniary liability, as rents or fees against persons or property.
(Emphasis ours.)

Evidently, the revenues of a local government unit do not consist of taxes alone, but
also other fees and charges. And rentals and goodwill fees, imposed by Municipal
Ordinance No. 98-01 for the occupancy of the stalls at the municipal public market, fall
under the definition of charges.

For the valid enactment of ordinances imposing charges, certain legal requisites must
be met. Section 186 of the Local Government Code identifies such requisites as follows:

Section 186. Power to Levy Other Taxes, Fees or Charges.--Local government units
may exercise the power to levy taxes, fees or charges on any base or subject not
otherwise specifically enumerated herein or taxed under the provisions of the National
Internal Revenue Code, as amended, or other applicable laws: Provided, That the
taxes, fees or charges shall not be unjust, excessive, oppressive, confiscatory or
contrary to declared national policy:Provided, further, That the ordinance levying such
taxes, fees or charges shall not be enacted without any prior public hearing
conducted for the purpose. (Emphasis ours.)

Section 277 of the Implementing Rules and Regulations of the Local Government Code
establishes in detail the procedure for the enactment of such an ordinance, relevant
provisions of which are reproduced below:

Section 277. Publication of Tax Ordinance and Revenue Measures.--x x x.

(b) The conduct of public hearings shall be governed by the following procedure:

x x x x

(2) In addition to the requirement for publication or posting, the sanggunian concerned
shall cause the sending ofwritten notices of the proposed ordinance, enclosing a copy
thereof, to the interested or affected parties operating or doing business within the
territorial jurisdiction of the LGU concerned.

(3) The notice or notices shall specify the date or dates and venue of the public hearing
or hearings. The initial public hearing shall be held not earlier than ten (10)
days from the sending out of the notice or notices, or the last day of publication, or date
of posting thereof, whichever is later;

(c) No tax ordinance or revenue measure shall be enacted or approved in the

absence of a public hearing duly conducted in the manner provided under this
Article. (Emphases ours.)

It is categorical, therefore, that a public hearing be held prior to the enactment of an

ordinance levying taxes, fees, or charges; and that such public hearing be conducted as
provided under Section 277 of the Implementing Rules and Regulations of the Local
Government Code.

There is no dispute herein that the notices sent to petitioners and other stall holders at
the municipal public market were sent out on 6 August 1998, informing them of the
supposed "public hearing" to be held on 11 August 1998. Even assuming that
petitioners received their notice also on 6 August 1998, the "public hearing" was already
scheduled, and actually conducted, only five days later, on 11 August 1998. This
contravenes Article 277(b)(3) of the Implementing Rules and Regulations of the Local
Government Code which requires that the public hearing be held no less than ten
days from the time the notices were sent out, posted, or published.

When the Sangguniang Bayan of Maasin sought to correct this procedural defect
through Resolution No. 68, series of 1998, dated 18 September 1998, respondent
vetoed the said resolution. Although the Sangguniang Bayan may have had the power
to override respondent's veto,[37] it no longer did so.

The defect in the enactment of Municipal Ordinance No. 98 was not cured when another
public hearing was held on 22 January 1999, after the questioned ordinance was
passed by the Sangguniang Bayan and approved by respondent on 17 August 1998.
Section 186 of the Local Government Code prescribes that the public hearing be
held prior to the enactment by a local government unit of an ordinance levying taxes,
fees, and charges.

Since no public hearing had been duly conducted prior to the enactment of Municipal
Ordinance No. 98-01, said ordinance is void and cannot be given any effect.
Consequently, a void and ineffective ordinance could not have conferred upon
respondent the jurisdiction to order petitioners' stalls at the municipal public market
vacant.

IN VIEW OF THE FOREGOING, the instant Petition is GRANTED. The assailed

Decision dated 28 November 2006 of the Court of Appeals in CA-G.R. SP No. 86182
is REVERSED and SET ASIDE. Municipal Ordinance No. 98-01 is DECLARED void
and ineffective, and a writ of prohibition is ISSUED commanding the Mayor of the
Municipality of Maasin, Iloilo, to permanently desist from enforcing the said
ordinance. Petitioners are also DECLARED as lawful occupants of the market stalls
they occupied at the time they filed the Petition for Mandamus/Prohibition docketed as
Civil Case No. 25843. In the event that they were deprived of possession of the said
market stalls, petitioners are entitled to recover possession of these stalls.

SO ORDERED.
 FIRST DIVISION
[ G. R. No. 142549, March 09, 2010 ]
FIDELA R. ANGELES, PETITIONER, VS. THE SECRETARY OF JUSTICE, THE
ADMINISTRATOR, LAND REGISTRATION AUTHORITY, THE REGISTER OF DEEDS
OF QUEZON CITY, AND SENATOR TEOFISTO T. GUINGONA, JR., RESPONDENTS.

DECISION
VELASCO JR., J.:
The property involved in this case is covered by Original Certificate of Title (OCT) No.
994, which encompasses One Thousand Three Hundred Forty-Two (1,342) hectares of
the Maysilo Estate, previously described by this Court En Banc as a "vast tract of land
[that] stretches over three cities, comprising an area larger than the sovereign states of
Monaco and the Vatican."[1] What we have before us now is touted as "one of the
biggest and most extensive land-grabbing incidents in recent history." [2]

The existence of several cases already decided by this Court dealing with this infamous
estate has made the job of deciding this particular petition easy, on one hand, as there
are cases squarely on point and at the outset, applicable; but complicated, on the other
hand, as such applicability must be determined with thoroughness and accuracy to
come up with a just, equitable, and fair conclusion to a controversy that has now lasted
for almost forty-five (45) years.

Submitted for Decision is a petition for mandamus seeking respondents Secretary of

Justice, the Administrator of the Land Registration Authority (LRA), and the Register of
Deeds of Quezon City to comply with the Order[3] dated January 8, 1998 issued by the
Regional Trial Court (RTC) of Caloocan City in Civil Case No. C-424, entitledBartolome
Rivera, et al. v. Isabel Gil de Sola, et al. (the RTC Order), which was issued a Certificate
of Finality on March 12, 1998.

On May 3, 1965, petitioner, together with other individuals, all of them claiming to be the
heirs of a certain Maria de la Concepcion Vidal, and alleging that they are entitled to
inherit her proportional share in the parcels of land located in Quezon City and in the
municipalities of Caloocan and Malabon, Province of Rizal, commenced aspecial civil
action for partition and accounting of the property otherwise known as Maysilo
Estate covered by OCT No. 994, allegedly registered on April 19, 1917 with the
Registry of Deeds of Caloocan City. This was docketed as Civil Case No. C-424 in the
RTC of Caloocan City, Branch 120.

Some of said alleged heirs were able to procure Transfer Certificates of Title (TCTs)
over portions of the Maysilo Estate. They also had led this Court to believe that OCT
No. 994 was registered twice, thus, in Metropolitan Waterworks and Sewerage Systems
(MWSS) v. Court of Appeals,[4] reiterated in Heirs of Luis J. Gonzaga v. Court Of
Appeals,[5] the Court held that OCT No. 994 dated April 19, 1917, and not May 3, 1917,
was the valid title by virtue of the prior registration rule.

In the RTC Order sought to be implemented, Judge Jaime D. Discaya granted the
partition and accountingprayed for by plaintiffs in that case; directed the respective
Registers of Deeds of Caloocan City and Quezon City to issue transfer certificates of
title in the names of all the co-owners, including petitioner, for twelve (12) parcels of
land with an aggregate area of One Hundred Five Thousand and Nine Hundred Sixty-
Nine square meters (105,969 sq. m.), more or less; and ordered that said parcels of
land be sold, subject to the confirmation of the Court, and the proceeds be divided
among the plaintiffs in proportion to their respective interests in the property.

The dispositive portion of said Order reads as follows:

WHEREFORE, premises considered, the recommendation of the Commissioners in

their Joint Commissioners' Report dated October 21, 1997 and Supplemental
Commissioners' Report dated December 30, 1997 that the following lots with transfer
certificates of title to be issued by the Register of Deeds of Caloocan City in the names
of all co-owners be sold and the proceeds thereof divided among themselves in
proportion to their respective interest in the property, is approved.

The Register of Deeds of Caloocan City and of Quezon City are hereby directed to
issue transfer certificates of title in the names of all the co-owners for the following lots,
namely:

x x x x

Any sale of above-mentioned lots shall be subject to confirmation by this Court pursuant
to Section 11, Rule 69 of the Rules of Civil Procedure. [6]
Petitioner alleges that the respective Registers of Deeds of Caloocan City and Quezon
City refused to comply with the RTC Order because they were still awaiting word from
the LRA Administrator before proceeding. Counsel for petitioner then requested the LRA
Administrator to direct said Registers of Deeds to comply with the Order.

The LRA Administrator, Mr. Alfredo R. Enriquez, sent counsel for petitioner a letter-
reply[7] dated March 27, 2000, with two attachments: 1) the 1 st Indorsement[8] dated
September 22, 1997 (the 1st Indorsement) issued by then Department of Justice (DOJ)
Secretary Teofisto T. Guingona, Jr. (respondent Guingona), and 2) LRA Circular No. 97-
11[9] issued to all Registers of Deeds. The letter-reply reads in part:

We regret to inform you that your request cannot be granted in view of the directive of
the Department of Justice in its 1 st Indorsement dated 22 September 1997, copy
enclosed, as a result of the inquiry conducted by the Composite Fact-Finding
Committee (created under DOJ Department Order No. 137) finding that there is only
one OCT No. 994 which was issued by the Rizal Register of Deeds on 3 May 1917
(and not on 19 April 1919)pursuant to Decree No. 36455 in Land Registration Case
No. 4429. Pursuant to this DOJ directive, this Authority issued LRA Circular No. 97-11 to
all Registers of Deeds, copy attached, stating the following:

x x x x

In compliance with the DOJ directive, this Authority, in its 1 st Indorsement dated 27
March 1998, x x x had recommended to the Office of the Solicitor General the filing of
an appropriate pleading relative to the said Order dated 8 January 1998.

The findings of the DOJ on OCT No. 994 are in fact sustained by the Senate Committee
on Justice and Human Rights and Urban Planning in its Senate Committee Report No.
1031 dated 25 May 1998 x x x.[10] (Emphasis ours.)

The LRA Administrator likewise wrote that in Senate Committee Report No. 1031 dated
May 25, 1998, the Senate Committees on Justice and Human Rights and Urban
Planning came up with the following findings:
i. There is only one Original Certificate of Title (OCT) No. 994 and this was issued or
registered on May 3, 1917[.]

ii. The [OCT] No. 994 dated April 19, 1917 is non-existent. It was a fabrication
perpetrated by Mr. Norberto Vasquez, Jr., former Deputy Registrar of Deeds of
Caloocan City.

iii. The alleged surviving heirs could not have been the true and legal heirs of the late
Maria de la Concepcion Vidal as government findings showed the physical and genetic
impossibility of such relationship[.]

iv. Mr. Norberto Vasquez, Jr., former Deputy Registrar of Deeds of Caloocan City, acted
maliciously, fraudulently and in bad faith, by issuing "certifications" and/or written
statements to the effect that OCT No. 994 was issued or registered on April 19, 1917
when in truth and in fact it was issued or registered on May 3, 1917.

v. Atty. Yolanda O. Alfonso, Registrar of Deeds of Caloocan City, likewise acted

maliciously, fraudulently and in bad faith, when she signed the TCTs issued in the name
of Eleuteria Rivera which bear a wrong date of the registration of OCT No. 994. Malice
was evident because she had previously issued certificates of title in the names of other
individuals which were derived from OCT No. 994 dated May 3, 1917 and she had in
fact questioned the falsity of April 19, 1917 as the correct date of the registration of OCT
No. 994.[11] (Underscoring in the original.)

The letter-reply further stated that OCT No. 994 was intact and was being kept in the
LRA "to prevent its alteration and tampering." We quote the last portion of said letter-
reply:

As found by the Senate Committees, the mess caused by the former Register of Deeds
and Deputy Register of Deeds in making it appear that OCT No. 994 was issued in 19
April 1917, thus giving the wrong impression that there were two (2) OCT No. 994,
resulted in the double, if not multiple, issuance of transfer certificates of title covering
the subdivided portions of the Maysilo Estate, including the parcels of land mentioned in
the subject Order dated 8 January 1998. Our Authority, as the protector of the integrity
of the Torrens title is mandated to prevent anomalous titling of real properties and put a
stop to further erode the confidence of the public in the Torrens system of land
registration.

With due respect, the Order dated 8 January 1998 which directs the issuance of transfer
certificates of title as direct transfer from OCT No. 994, suffers from certain deficiencies,
to wit: OCT No. 994 had long been cancelled totally by the issuance of various
certificates of title in the names of different persons; and that the plan and descriptions
of the lands were not based on a subdivision plan duly approved by the proper
government agency but merely sketch plans, in violation of Section 50 of PD 1529.
Obviously, compliance with the Order will result to duplication of certificates of title
covering land previously registered in the names of other persons. Besides, in MWSS
vs. CA, the Supreme Court did not declare the nullity of the certificates of title which
emanated from OCT No. 994 issued on 3 May 1917. It merely invalidates the title of
MWSS and recognizes as valid the title of Jose B. Dimson. There was no such
declaration as to the various transfer certificates of title emanating from OCT No. 994.
Under the law, there must be a separate action in court for the declaration of nullity of
certificates of title pursuant to the due process clause of the Constitution.

As observed by the Supreme Court in Republic vs. Court of Appeals (94 SCRA 874),
"there are too many fake titles being peddled around and it behooves every official of
the government whose functions concern the issuance of legal titles to see to it that this
plague that has made a mockery of the Torrens system is eradicated right now through
their loyalty, devotion, honesty and integrity, in the interest of our country and people at
large."[12]

Petitioner avers that respondent Guingona, in issuing the 1 st Indorsement,[13] made a

substantive modification of the ruling made by this Court in MWSS v. Court of
Appeals and Heirs of Luis Gonzaga v. Court of Appeals. She further avers that "[n]ot
even the Secretary of Justice has the power or authority to set aside or alter an
established ruling made by the highest Court of the land." According to petitioner,
respondent Guingona claimed to have made his own finding that there is only one OCT
No. 994 which was issued by the Register of Deeds of Rizal on May 3, 1917, and not on
April 19, 1917, and this finding is a reversal of the decisions of this Court on "what is the
valid OCT No. 994." Petitioner contends that "[t]he rule is well settled that once a
decision becomes final[,] the Court can no longer amend, modify, much less set aside
the same" and that respondent Guingona usurped judicial functions and did a prohibited
act which rendered the Order of no effect. [14]
Petitioner claims that respondent Guingona was the one who caused the issuance by
the LRA Administrator of Circular No. 97-11 dated October 3, 1997, which had the same
legal effect on other cases similarly situated without hearing or notice to the parties-in-
interest, and that this was contemptuous and contumacious and calls for "condemnation
and reproof of the highest degree." [15]

Petitioner alleges that compliance with a final judicial order is a purely ministerial duty,
that she and her co-plaintiffs in Civil Case No. C-424 cannot avail of the benefits
granted to them by the Order, and that she has no "plain, speedy and adequate remedy
in the ordinary course of law, other than this action."

In his Comment,[16] respondent Guingona raises the following grounds for denial of the
petition:

1. Petitioner has no cause of action against respondent Guingona in that the latter
is no longer the Secretary of Justice.

2. The issuance of the 1st Indorsement dated September 22, 1997 was pursuant to
the report dated August 27, 1997 made by the committee created by Department
Order No. 137 dated April 23, 1997 after conducting an independent fact-finding
investigation. It did not in any way alter or modify any judgment of this Honorable
Court.

3. Petitioner was not denied due process as her rights, if any, under the Order
dated January 18, 1998 were not yet in existence at the time the 1st Indorsement
was issued.

4. Mandamus is not the appropriate remedy to enforce claims of damages. [17]

Respondent Guingona contends that he was no longer the Secretary of Justice,

therefore, he did not anymore possess the mandatory duties being compelled to be
performed in this case by way of a writ of mandamus; he had no more duty resulting
from the said position and could not perform an act that pertained to said duty, even if
he wanted to; and since he did not have the powers and duties of the Secretary of
Justice, he was therefore not a real party-in-interest in this case.
Respondent Guingona avers that he was prompted to issue DOJ Department Order No.
137 dated April 13, 1997 creating a committee due to several complaints received by
the Office of the Secretary of Justice in February 1997. Among others, the complaints
prayed for the investigation of certain actions taken by the LRA officials and personnel
in connection with transactions involving the Maysilo Estate. According to him, the
committee was tasked for the purpose of initiating a fact-finding inquiry:

"(1) to ascertain the circumstances surrounding the issuance of original Certificate(s) of

Title (OCT) No. 994 of the Registry of Deeds of Rizal purporting to cover a mass of land
encompassing Malabon, Caloocan City and Quezon City as well as the issuance and
regularity of Transfer Certificates of Titles (TCTs) derived therefrom; (2) in the event of a
finding of the irregular issuance of any such [TCTs], (a) to determine the involvement of
and to recommend the actions to be taken against person(s) and/or officials and
employees of this Department or its agencies who may appear to have participated
therein, and (b) to recommend the administrative and/or judicial actions, if any, that may
directly be undertaken by this Department, the Office of the Solicitor General, the Land
Registration Authority, and other units and attached agencies of this Department, with
respect to such irregularly issued Transfer Certificates of Title, taking into account the
final decisions of the courts affecting the Maysilo Estate." [18]

Respondent Guingona contends that it can be gleaned from the purpose of the creation
of the committee that its fact-finding investigation was merely administrative to formulate
and recommend policies, procedures and courses of action which the DOJ, the LRA,
the Office of the Solicitor General and other agencies of the DOJ can adopt with regard
to the problem of the proliferation of fake land titles, including those that relate to the
Maysilo Estate. He alleges that based on this committee's report dated August 27, 1997,
he issued the subject 1st Indorsement which spelled out the policies, procedures, and
courses of action which the LRA, an agency under the DOJ, must follow not only with
respect to OCT No. 994 and its derivative titles covering the Maysilo Estate but to all
other original or transfer certificates of title as well. He contends that the 1 st Indorsement
was merely an administrative issuance of the DOJ; thus, it could not be said that it
altered or supplanted any judgment of this Court.

Respondent Guingona further states that the 1 st Indorsement dated September 22, 1997
was issued long before the Order dated January 18, 1998, thus it could not be said that
petitioner was denied due process as her rights and interests were non-existent at that
time. Furthermore, respondent Guingona alleges that petitioner was accorded due
process when the LRA Administrator gave an opportunity to petitioner's counsel to
present petitioner's case to the LRA legal staff. Respondent Guingona claims that such
opportunity to be heard satisfies the requirements of due process, as the essence of
due process is simply the opportunity to be heard. [19]

With regard to the claim for damages, respondent Guingona argues that it is a factual
issue which the petitioner must prove in the course of a trial where petitioner's claim for
damages can be fully litigated. This Honorable Court, however, is not a trier of facts.
Such being the case, it is inappropriate for petitioner to include in her petition
formandamus a claim for damages the amount of which she did not even specify. As it
is, such claim should be denied by this Honorable Court. There is also no showing that
petitioner paid the required docket fees for her claims for damages. On this score alone,
such a claim should be outrightly dismissed.[20]

In her Reply,[21] petitioner contends that former DOJ Secretary Guingona has to be
named as private respondent because he was the cause of public respondents' failure
to comply with their ministerial duty. A private respondent is "the person interested in
sustaining the proceedings in the court; and it shall be the duty of such private
respondent to appear and defend, both in his own behalf and in behalf of the public
respondents affected by the proceedings x x x." He is not charged with any improper
act, but he is a necessary party as the grant of relief prayed for by petitioner shall
require private respondent's active participation. [22]

Anent private respondent's argument that the 1 st Indorsement did not in any way alter or
modify any judgment of this Honorable Court, petitioner counters that the
1st Indorsement and "pertinent acts of private respondent x x x resulted in the altering or
supplanting of a judgment of this Court." The complaints praying that an investigation be
conducted on the irregular issuance of titles in the Maysilo Estate were made to the
private respondent by parties who held titles derived from OCT No. 994 on May 3,
1917, after the Supreme Court had rendered its decision inMWSS v. Court of
Appeals and Heirs of Gonzaga v. Court of Appeals.

Petitioner argues that contrary to private respondent's claim, she is entitled to file a
petition for mandamus as she and her co-plaintiffs in Civil Case No. C-424 has been
suffering from damages and losses incapable of quantification, because of the wrongful
act of the respondents. Petitioner cites the following provisions of the Rules of Court in
support of her argument:

RULE 65

xxxx

SECTION 9. Service and enforcement of order or judgment. -- A certified copy of the

judgment rendered in accordance with the last preceding section shall be served upon
the court, quasi-judicial agency, tribunal, corporation, board, officer or person concerned
in such manner as the court may direct, and disobedience thereto shall be punished as
contempt. An execution may issue for any damages or costs awarded in accordance
with Section 1 of Rule 39.

RULE 39

SECTION 1. Execution upon final judgments or 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.

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.

Petitioner avers that private respondent seemed to assume a function that did not
belong to the Executive Department, because he had caused the issuance of an LRA
Circular that forbade compliance with a court order that had already become final and
executory. Petitioner likewise avers that the doctrine of separation of powers called for
each branch of government to be left alone to discharge its functions within its
jurisdiction, as it saw fit.[23]
Public respondents Secretary of Justice, the Administrator of the Land Registration
Authority, and the Register of Deeds of Quezon City filed their Comment[24] on
November 16, 2000. Public respondents claim that petitioner and her co-plaintiffs are
not the rightful owners of the property subject of said complaint for partition. Their
allegation in the complaint that they are the heirs and successors-in-interest of the late
Maria de la Concepcion Vidal, co-owner of the parcels of land described in OCT No.
994, and are therefore entitled to the proportionate share, ownership, and possession of
the parcels of land described in paragraphs XI to XV of the complaint, is an untrue
statement made with intent to deceive. This is because the findings embodied in the
Report of the Fact Finding Committee created by the DOJ, which are the result of the
joint undertaking of the Department proper, the Office of the Solicitor General, and the
LRA, support the conclusion that petitioner and her co-plaintiffs are not entitled to the
issuance of new transfer certificates of title in their names. [25]

Public respondents claim the following as facts:

The DOJ Report became the subject of [a] Senate investigation. On May 25, 1998, the
Honorable Senate of the Tenth Congress of the Republic of the Philippines reached the
conclusion that petitioner and her co-plaintiffs are not and cannot be true heirs of the
late Maria de la Concepcion Vidal (par. 3, p. 33, Senate Report). x x x.

As early as 1917, subject property of the instant case had already been partitioned and
divided among the true owners, namely, Gonzalo Tuason y Patino, Jose Rato y Tuason,
Luis Vidal y Tuason, Concepcion Vidal y Tuason, Pedro Baos, Maria de la Concepcion
Vidal, Trinidad Jurado, Bernardino Hernandez, Esperanza Tuason Chua Jap, Isabel
Tuason Chua, Juan Jose Tuason de la Paz, Maria Teresa Tuason y de la Paz, Mariano
Severo Tuason y de la Paz, Demetrio Asuncion Tuason y de la Paz, Augusto Hoberto
Tuason y de la Paz, Maria Soterrana Tuason y de la Paz, Benito Legarda y de la Paz,
Consuelo Legarda y de la Paz, Rita Legarda y de la Paz, Benito Legarda y Tuason,
Emilia Tuason y Patio, Maria Rocha de Despujols, Sofia O'Farrell y Patio, German
Franco y Gonzales, Concepcion Franco y Gonzales, Domingo Franco y Gonzales,
Guillerma Ferrer y Tuason, Vicente Ferrer y Tuason, Josefa Tuason vda. de Flores, and
heirs of Filemon Tuazon in proportion to their respective shares, as evidenced by the
document entitled PROYECTO DE PARTICION DE LA HACIENDA DE MAYSILO
(PARTITION PLAN OF HACIENDA MAYSILO) consisting of fifty-two (52) pages which is
attached as Annex "D", and its faithful translation into English consisting of forty-nine
(49) pages attached as Annex "E", and both made integral parts hereof.

As a result of said partition, transfer certificates of titles covering the same subject
parcels of land were legally issued in the names of above-enumerated true owners.

The Register of Deeds of Quezon City and Caloocan City, through the undersigned
counsel, filed the aforestated Motion for Reconsideration of the questioned Order of the
lower court.

The resolution of said motion and other incidents in related cases pending before the
lower court has been held in abeyance to await the resolution by higher courts of other
cases involving the Maysilo Estate.[26]

We are thus faced with the issue of whether public respondents unlawfully
neglected to perform their duties by their refusal to issue the questioned transfer
certificates of title to petitioner and her co-plaintiffs (in Civil Case No. C-424) or have
unlawfully excluded petitioner from the use and enjoyment of whatever claimed
right, as would warrant the issuance of a writ of mandamus against said public
respondents.

Considering the factual background and recent jurisprudence related to this controversy
as will be discussed below, we find that it was not unlawful for public respondents to
refuse compliance with the RTC Order, and the act being requested of them is not their
ministerial duty; hence, mandamus does not lie and the petition must be dismissed.

Rule 65 of the 1997 Rules of Civil Procedure provides:

SECTION 3. Petition for mandamus. -- When any tribunal, corporation, board, officer or
person unlawfully neglects the performance of an act which the law specifically enjoins
as a duty resulting from an office, trust, or station, or unlawfully excludes another from
the use and enjoyment of a right or office to which such other is entitled, and there is no
other plain, speedy and adequate remedy in the ordinary course of law, the person
aggrieved thereby may file a verified petition in the proper court, alleging the facts with
certainty and praying that judgment be rendered commanding the respondent,
immediately or at some other time to be specified by the court, to do the act required to
be done to protect the rights of the petitioner, and to pay the damages sustained by the
petitioner by reason of the wrongful acts of the respondent.

It is settled that mandamus is employed to compel the performance, when refused, of a

ministerial duty, but not to compel the performance of a discretionary
duty. Mandamus will not issue to enforce a right which is in substantial dispute or to
which a substantial doubt exists.[27] It is nonetheless likewise available to compel action,
when refused, in matters involving judgment and discretion, but not to direct the
exercise of judgment or discretion in a particular way or the retraction or reversal of an
action already taken in the exercise of either.[28]

Therefore, we must look into the alleged right of petitioner and see if compliance with
the RTC Order is compellable by mandamus; or, in the alternative, find out if substantial
doubt exists to justify public respondents' refusal to comply with said Order. Did public
respondents have sufficient legal basis to refuse to grant petitioner's request?

In this regard, we find our discussion in Laburada v. Land Registration Authority [29]>
instructive, to wit:

That the LRA hesitates in issuing a decree of registration is understandable. Rather

than a sign of negligence or nonfeasance in the performance of its duty, the LRA's
reaction is reasonable, even imperative. Considering the probable duplication of
titles over the same parcel of land, such issuance may contravene the policy and
the purpose, and thereby destroy the integrity, of the Torrens system of
registration.

x x x x

x x x Likewise, the writ of mandamus can be awarded only when the petitioners' legal
right to the performance of the particular act which is sought to be compelled
is clear and complete. Under Rule 65 of the Rules of Court, a clear legal right is a right
which is indubitably granted by law or is inferable as a matter of law. If the right is clear
and the case is meritorious, objections raising merely technical questions will be
disregarded. But where the right sought to be enforced is in substantial doubt or
dispute, as in this case, mandamus cannot issue.[30] (Emphasis ours.)
As can be gleaned from the above discussion, the issuance by the LRA officials of a
decree of registration is not a purely ministerial duty in cases where they find that such
would result to the double titling of the same parcel of land. In the same vein, we find
that in this case, which involves the issuance of transfer certificates of title, the Register
of Deeds cannot be compelled by mandamus to comply with the RTC Order since there
were existing transfer certificates of title covering the subject parcels of land and there
was reason to question the rights of those requesting for the issuance of the TCTs.
Neither could respondent LRA Administrator be mandated by the Court to require the
Register of Deeds to comply with said Order, for we find merit in the explanations of
respondent LRA Administrator in his letter-reply that cites the 1 st Indorsement issued by
respondent Guingona, LRA Circular No. 97-11, and Senate Committee Report No.
1031, as reasons for his refusal to grant petitioner's request. [31] There was, therefore,
sufficient basis for public respondents to refuse to comply with the RTC Order, given the
finding, contained in the cited documents, that OCT No. 994 dated April 19, 1917, on
which petitioner and her co-plaintiffs in the civil case clearly anchored their rights, did
not exist.

It is important to emphasize at this point that in the recent case resolved by this
Court En Banc in 2007, entitledManotok Realty, Inc. v. CLT Realty Development
Corporation[32] (the 2007 Manotok case), as well as the succeeding resolution [33] in the
same case dated March 31, 2009 (the 2009 Manotok case), the controversy
surrounding the Maysilo Estate and the question of the existence of another OCT No.
994 have been finally laid to rest. All other cases involving said estate and OCT No.
994, such as the case at bar, are bound by the findings and conclusions set forth in said
resolutions.

As stated earlier, petitioner anchors her claim on previous cases decided by this
Court[34] which have held that there are two existing OCT No. 994, dated differently, and
the one from which she and her co-plaintiffs (in Civil Case No. C-424) derived their
rights was dated earlier, hence, was the superior title. Regrettably, petitioner's claim no
longer has a leg to stand on. As we held in the 2007 Manotok case:

The determinative test to resolve whether the prior decision of this Court should be
affirmed or set aside is whether or not the titles invoked by the respondents are valid. If
these titles are sourced from the so-called OCT No. 994 dated 17 April 1917, then such
titles are void or otherwise should not be recognized by this Court. Since the true basic
factual predicate concerning OCT No. 994 which is that there is only one such OCT
differs from that expressed in the MWSS and Gonzaga decisions, said rulings have
become virtually functus officio except on the basis of the "law of the case" doctrine,
and can no longer be relied upon as precedents. [35]

Specifically, petitioner cannot anymore insist that OCT No. 994 allegedly issued on April
19, 1917 validly and actually exists, given the following conclusions made by this Court
in the 2007 Manotok case:

First, there is only one OCT No. 994. As it appears on the record, that mother title
was received for transcription by the Register of Deeds on 3 May 1917, and that
should be the date which should be reckoned as the date of registration of the
title. It may also be acknowledged, as appears on the title, that OCT No. 994 resulted
from the issuance of the decree of registration on [19] April 1917, although such date
cannot be considered as the date of the title or the date when the title took effect.

Second. Any title that traces its source to OCT No. 994 dated [19] April 1917 is void,
for such mother title is inexistent. The fact that the Dimson and CLT titles made
specific reference to an OCT No. 994 dated [19] April 1917 casts doubt on the validity of
such titles since they refer to an inexistent OCT. x x x.

Third. The decisions of this Court in MWSS v. Court of Appeals and Gonzaga v.
Court of Appeals cannot apply to the cases at bar, especially in regard to their
recognition of an OCT No. 994 dated 19 April 1917, a title which we now
acknowledge as inexistent. Neither could the conclusions
in MWSS or Gonzaga with respect to an OCT No. 994 dated 19 April 1917 bind any
other case operating under the factual setting the same as or similar to that at
bar.[36] (Emphases supplied.)

To be sure, this Court did not merely rely on the DOJ and Senate reports regarding OCT
No. 994. In the 2007Manotok case, this Court constituted a Special Division of the Court
of Appeals to hear the cases on remand, declaring as follows:

Since this Court is not a trier of fact[s], we are not prepared to adopt the findings made
by the DOJ and the Senate, or even consider whether these are admissible as
evidence, though such questions may be considered by the Court of Appeals upon the
initiative of the parties. x x x The reports cannot conclusively supersede or overturn
judicial decisions, but if admissible they may be taken into account as evidence on the
same level as the other pieces of evidence submitted by the parties. The fact that they
were rendered by the DOJ and the Senate should not, in itself, persuade the courts to
accept them without inquiry. The facts and arguments presented in the reports must still
undergo judicial scrutiny and analysis, and certainly the courts will have the discretion to
accept or reject them.

There are many factual questions looming over the properties that could only be
threshed out in the remand to the Court of Appeals. x x x.

x x x x

The Special Division is tasked to hear and receive evidence, conclude the proceedings
and submit to this Court a report on its findings and recommended conclusions within
three (3) months from finality of this Resolution.[37]

Thus, in the 2009 Manotok case, this Court evaluated the evidence engaged in by said
Special Division, and adopted the latter's conclusions as to the status of the original title
and its subsequent conveyances. This case affirmed the earlier finding that "there is
only one OCT No. 994, the registration date of which had already been decisively
settled as 3 May 1917 and not 19 April 1917" and categorically concluded that "OCT
No. 994 which reflects the date of 19 April 1917 as its registration date is null and
void."

In the case at bar, petitioner is the last surviving co-plaintiff in Civil Case No. C-424
originally filed on May 3, 1965. The records bear several attempts of different individuals
to represent her as counsel, a matter that could be attributed to her advanced age and
potential access to a vast sum of money, should she get a favorable decision from this
case. It appears, however, that the partition and accounting of a portion of the Maysilo
Estate that she and her co-plaintiffs prayed for can no longer prosper because of the
conclusive findings quoted above that the very basis of their claim, a second, albeit
earlier registered, OCT No. 994, does not exist.
The requirements under Rule 65 for the issuance of the writ of mandamus not having
been proven by petitioner to exist, we dismiss the petition for lack of merit.

WHEREFORE, premises considered, the petition is hereby DISMISSED.

SO ORDERED.
 FIRST DIVISION

[ G.R. No. 101387, March 11, 1998 ]

SPOUSES MARIANO AND ERLINDA LABURADA, REPRESENTED BY THEIR

ATTORNEY-IN-FACT, MANUEL SANTOS, JR., PETITIONERS, VS. LAND
REGISTRATION AUTHORITY, RESPONDENT.

DECISION

PANGANIBAN, J:

In an original land registration proceeding in which applicants have been adjudged to

have a registrable title, may the Land Registration Authority (LRA) refuse to issue a
decree of registration if it has evidence that the subject land may already be included in
an existing Torrens certificate of title? Under this circumstance, may the LRA be
compelled by mandamus to issue such decree?

The Case

These are the questions confronting this Court in this special civil action for
mandamus[1] under Rule 65 which asks this Court to direct the Land Registration
Authority (LRA) to issue the corresponding decree of registration in Land Registration
Case (LRC) No. N-11022.[2]

The Facts

Petitioners were the applicants in LRC Case No. N-11022 for the registration of Lot 3-A,
Psd-1372, located in Mandaluyong City. On January 8, 1991, the trial court, acting as a
land registration court, rendered its decision disposing thus: [3]

WHEREFORE, finding the application meritorious and it appearing that the applicants,
Spouses Marciano [sic] and Erlinda Laburada, have a registrable title over the parcel of
land described as Lot 3A, Psd-1372, the Court declares, confirms and orders the
registration of their title thereto.

As soon as this decision shall become final, let the corresponding decree be issued in
the name of spouses Marciano [sic] and Erlinda Laburada, both of legal age, married,
with residence and postal address at No. 880 Rizal Ave., Manila.
After the finality of the decision, the trial court, upon motion of petitioners, issued an
order[4] dated March 15, 1991 requiring the LRA to issue the corresponding decree of
registration. However, the LRA refused. Hence, petitioners filed this action for
mandamus.[5]

Attached to the LRAs comment on the petition is a report dated April 29, 1992 signed by
Silverio G. Perez, director of the LRA Department of Registration, which explained
public respondents refusal to issue the said decree: [6]

In connection with the Petition for Mandamus filed by Petitioners through counsel,
dated August 27, 1991 relative to the above-noted case/record, the following comments
are respectfully submitted:

On March 6, 1990, an application for registration of title of a parcel of land, Lot 3-A of
the subdivision plan Psd-1372, a portion of Lot 3, Block No. 159, Swo-7237, situated in
the Municipality of San Felipe Neri, Province of Rizal was filed by Spouses Marciano
[sic] Laburada and Erlinda Laburada;

After plotting the aforesaid plan sought to be registered in our Municipal Index Sheet, it
was found that it might be a portion of the parcels of land decreed in Court of Land
Registration (CLR) Case Nos. 699, 875 and 817, as per plotting of the subdivision plan
(LRC) Psd-319932, a copy of said subdivision plan is Annex A hereof;

The records on file in this Authority show that CLR Case Nos. 699, 875 & 917 were
issued Decree Nos. 240, 696 and 1425 on August 25, 1904, September 14, 1905 and
April 26, 1905, respectively;

On May 23, 1991, a letter of this Authority was sent to the Register of Deeds, Pasig,
Metro Manila, a copy is Annex B hereof, requesting for a certified true copy of the
Original Certificate of Title No. 355, issued in the name of Compania Agricola de
Ultramar;

On May 20, 1991, a certified true copy of the Original Certificate of Title (OCT) No. 355
was received by this Authority, a copy is Annex C hereof, per unsigned letter of the
Register of Deeds of Pasig, Metro Manila, a copy is Annex D hereof;

After examining the furnished OCT NO. 355, it was found that the technical description
of the parcel of land described therein is not readable, that prompted this Authority to
send another letter dated April 15, 1992 to the Register of Deeds of Pasig, Metro
Manila, a copy is Annex E hereof, requesting for a certified typewritten copy of OCT
No. 355, or in lieu thereof a certified copy of the subsisting certificate of title with
complete technical description of the parcel of land involved therein. To date, however,
no reply to our letter has as yet been received by this Authority;

After verification of the records on file in the Register of Deeds for the Province of Rizal,
it was found that Lot 3-B of the subdivision plan Psd-1372 being a portion of Lot No. 3,
Block No. 159, Plan S.W.O. -7237, is covered by Transfer Certificate of Title No. 29337
issued in the name of Pura Escurdia Vda. de Buenaflor, a copy is attached as Annex F
hereof. Said TCT No. 29337 is a transfer from Transfer Certificate of Title No. 6595.
However, the title issued for Lot 3-A of the subdivision plan Psd-1372 cannot be located
because TCT No. 6595 consisting of several sheets are [sic] incomplete.

For this Authority to issue the corresponding decree of registration sought by the
petitioners pursuant to the Decision dated January 8, 1991 and Order dated March 15,
1991, it would result in the duplication of titles over the same parcel of land, and thus
contravene the policy and purpose of the Torrens registration system, and destroy the
integrity of the same (G.R. No. 63189, Pedro E. San Jose vs. Hon. Eutropio Migrio, et
al.,); x x x.

In view of the foregoing explanation, the solicitor general prays that the petition be
dismissed for being premature.

After the filing of memoranda by the parties, petitioners filed an urgent motion, dated
September 4, 1995,[7] for an early resolution of the case. To this motion, the Court
responded with a Resolution, dated October 23, 1995, which ordered: [8]

x x x Acting on the urgent motion for early resolution of the case dated 04 September
1995 filed by petitioner Erlinda Laburada herself, the Court resolved to require the
Solicitor General to report to the Court in detail, within fifteen (15) days from receipt of
this Resolution, what concrete and specific steps, if any, have been taken by
respondent since 19 May 1993 (the date of respondents Memorandum) to actually
verify whether the lot subject of LRC Case No. N-11022 (Regional Trial Court of Pasig,
Branch 68), described as Lot 3A, Psd-1372 and situated in Mandaluyong City, might be
a portion of the parcels of land decreed in Court of Land Registration Case (CLR) Nos.
699, 875 and 917.
On December 29, 1995, the solicitor general submitted his compliance with the above
resolution, to which was attached a letter dated November 27, 1997 of Felino M. Cortez,
chief of the LRA Ordinary and Cadastral Decree Division, which states: [9]

With reference to your letter dated November 13, 1995, enclosed herewith is a copy of
our letter dated 29 April 1992 addressed to Hon. Ramon S. Desuasido stating among
others that Lot 3-B, of the subdivision plan Psd-1372, a portion of Lot 3, Blk. 159, Swo-
7237 is really covered by Transfer Certificate of Title No. 29337 issued in the name of
Pura Escurdia Vda. de Bunaflor [sic] which was transfer[ed] from Transfer Certificate of
Title No. 6395, per verification of the records on file in the Register of Deeds of Rizal.
However, the title issued for the subject lot, Lot 3-A of the subdivision plan Psd-1372,
cannot be located because TCT #6595 is incomplete.

It was also informed [sic] that for this Authority to issue the corresponding decree of
registration sought by the petitioners pursuant to the decision dated January 9, 1991
and order dated March 15, 1991, would result in the duplication of [the] title over the
same parcel of land, and thus contravene the policy and purposes of the torrens
registration system, and destroy the integrity of the same (O.R. No. 63189 Pedro K. San
Jose vs. Hon. Eutropio Migrio, et. al.).

Hence, this case will be submitted to the Court for dismissal to avoid duplication of title
over the same parcel of land.

Issue

Petitioners submit this lone issue:[10]

Whether or not Respondent Land Registration Authority can be compelled to issue the
corresponding decree in LRC Case No. N-11022 of the Regional Trial Court of Pasig,
Branch LXVIII (68).

The Courts Ruling

The petition is not meritorious.

Sole Issue: Is Mandamus the Right Remedy?

Petitioners contend that mandamus is available in this case, for the LRA unlawfully
neglect[ed] the performance of an act which the law specifically enjoins as a duty
resulting from an office x x x. They cite four reasons why the writ should be
issued.First, petitioners claim that they have a clear legal right to the act being prayed
for and the LRA has the imperative duty to perform because, as land registration is
an in remproceeding, the jurisdictional requirement of notices and publication should be
complied with.[11] Since there was no showing that the LRA filed an opposition in this
proceeding, it cannot refuse to issue the corresponding decree. Second, it is not the
duty of the LRA to take the cudgels for the private persons in possession of OCT No.
355, TCT No. 29337 snf [sic] TCT No. 6595. Rather, it is the sole concern of said
private person-holders of said titles to institute in a separate but proper action whatever
claim they may have against the property subject of petitioners application for
registration. Third, petitioners contend that they suffered from the delay in the issuance
of their title, because of the failure of the Register of Deeds of Pasig, Metro Manila to
furnish LRA of [sic] the certified copies of TCT No. 29337 and TCT No. 6595
notwithstanding the lack of opposition from the holders of said titles. [12] Fourth, the State
consented to its being sued in this case[;] thus, the legislature must recognize any
judgment that may be rendered in this case as final and make provision for its
satisfaction.[13]

On the other hand, the LRA, represented by the solicitor general, contends that the
decision of the trial court is not valid, considering that [the] Court of First Instance has
no jurisdiction to decree again the registration of land already decreed in an earlier land
registration case and [so] a second decree for the same land is null and void. [14] On the
question of whether the LRA can be compelled to issue a decree of registration, the
solicitor general cites Ramos vs. Rodriguez[15] which held:[16]

Nevertheless, even granting that procedural lapses have been committed in the
proceedings below, these may be ignored by the Court in the interest of substantive
justice. This is especially true when, as in this case, a strict adherence to the rules
would result in a situation where the LRA would be compelled to issue a decree of
registration over land which has already been decreed to and titled in the name of
another.

It must be noted that petitioners failed to rebut the LRA report and only alleged that the
title of the Payatas Estate was spurious, without offering any proof to substantiate this
claim. TCT No. 8816, however, having been issued under the Torrens system, enjoys
the conclusive presumption of validity. As we declared in an early case, (t)he very
purpose of the Torrens system would be destroyed if the same land may be
subsequently brought under a second action for registration. The application for
registration of the petitioners in this case would, under the circumstances, appear to be
a collateral attack of TCT No. 8816 which is not allowed under Section 48 of P.D.
1529. (Underscoring supplied.)

We agree with the solicitor general. We hold that mandamus is not the proper remedy
for three reasons.

First: Judgment Is Not Yet Executory

Contrary to the petitioners allegations, the judgment they seek to enforce in this petition
is not yet executory and incontrovertible under the Land Registration Law. That is, they
do not have any clear legal right to implement it. We have unambiguously ruled that a
judgment of registration does not become executory until after the expiration of one year
after the entry of the final decree of registration. We explained this in Gomez vs. Court
of Appeals:[17]

It is not disputed that the decision dated 5 August 1981 had become final and
executory. Petitioners vigorously maintain that said decision having become final, it may
no longer be reopened, reviewed, much less, set aside. They anchor this claim on
section 30 of P.D. No. 1529 (Property Registration Decree) which provides that, after
judgment has become final and executory, the court shall forthwith issue an order to the
Commissioner of Land Registration for the issuance of the decree of registration and
certificate of title. Petitioners contend that section 30 should be read in relation to
section 32 of P.D. 1529 in that, once the judgment becomes final and executory under
section 30, the decree of registration must issue as a matter of course. This being the
law, petitioners assert, when respondent Judge set aside in his decision, dated 25
March 1985, the decision of 5 August 1981 and the order of 6 October 1981, he clearly
acted without jurisdiction.

Petitioners contention is not correct. Unlike ordinary civil actions, the adjudication of
land in a cadastral or land registration proceeding does not become final, in the sense
of incontrovertibility until after the expiration of one (1) year after the entry of the final
decree of registration. This Court, in several decisions, has held that as long as a final
decree has not been entered by the Land Registration Commission (now NLTDRA) and
the period of one (1) year has not elapsed from date of entry of such decree, the title is
not finally adjudicated and the decision in the registration proceeding continues to be
under the control and sound discretion of the court rendering it.

Second: A Void Judgment Is Possible

That the LRA hesitates in issuing a decree of registration is understandable. Rather

than a sign of negligence or nonfeasance in the performance of its duty, the LRAs
reaction is reasonable, even imperative. Considering the probable duplication of titles
over the same parcel of land, such issuance may contravene the policy and the
purpose, and thereby destroy the integrity, of the Torrens system of registration.

In Ramos vs. Rodriguez,[18] this Court ruled that the LRA is mandated to refer to the trial
court any doubt it may have in regard to the preparation and the issuance of a decree of
registration. In this respect, LRA officials act not as administrative officials but as officers
of said court, and their act is the act of the court. They are specifically called upon to
extend assistance to courts in ordinary and cadastral land registration proceedings.

True, land registration is an in rem proceeding and, therefore, the decree of registration
is binding upon and conclusive against all persons including the government and its
branches, irrespective of whether they were personally notified of the application for
registration, and whether they filed an answer to said application. This stance of
petitioners finds support in Sec. 38 of Act 496 which provides:

SEC. 38. If the court after hearing finds that the applicant or adverse claimant has title
as stated in his application or adverse claim and proper for registration, a decree of
confirmation and registration shall be entered. Every decree of registration shall bind the
land, and quiet title thereto, subject only to the exceptions stated in the following
section. It shall be conclusive upon and against all persons, including the Insular
Government and all the branches thereof, whether mentioned by name in the
application, notice, or citation, or included in the general description To all whom it may
concern. Such decree shall not be opened by reason of the absence, infancy, or other
disability of any person affected thereby, nor by any proceeding in any court for
reversing judgments or decrees; subject, however, to the right of any person deprived of
land or of any estate or interest therein by decree of registration obtained by fraud to file
in the competent Court of First Instance a petition for review within one year after entry
of the decree, provided no innocent purchaser for value has acquired an interest. Upon
the expiration of said term of one year, every decree or certificate of title issued in
accordance with this section shall be incontrovertible. If there is any such purchaser, the
decree of registration shall not be opened, but shall remain in full force and effect
forever, subject only to the right of appeal herein before provided: Provided,
however, That no decree or certificate of title issued to persons not parties to the appeal
shall be cancelled or annulled. But any person aggrieved by such decree in any case
may pursue his remedy by action for damages against the applicant or any other person
for fraud in procuring the decree. Whenever the phrase innocent purchaser for value or
an equivalent phrase occurs in this Act, it shall be deemed to include an innocent
lessee, mortgagee, or other encumbrancer for value. (As amended by Sec. 3, Act No.
3621; and Sec. 1, Act No. 3630, and PD 1529, Sec. 39).

However, we must point out that the letters of Silverio G. Perez and Felino M. Cortez,
dated April 29, 1992 and November 27, 1995, respectively, clearly stated that, after
verification from the records submitted by the Registry of Deeds of Rizal, the property
which petitioners are seeking to register -- Lot 3-A of Subdivision Plan Psd-1372 -- is a
portion of Lot No. 3, Block 159, Plan S.W.O.-7237, over which TCT No. 6595 has
already been issued. Upon the other hand, in regard to Lot 3-B of said Lot 3, TCT No.
29337 was issued in lieu of TCT No. 6595. Thus, the LRAs refusal to issue a decree of
registration is based on documents which, if verified, may render the judgment of the
trial court void.

It is settled that a land registration court has no jurisdiction to order the registration of
land already decreed in the name of another in an earlier land registration case. A
second decree for the same land would be null and void, [19] since the principle behind
original registration is to register a parcel of land only once. [20] Thus, if it is proven that
the land which petitioners are seeking to register has already been registered in 1904
and 1905, the issuance of a decree of registration to petitioners will run counter to said
principle. As ruled in Duran vs. Olivia:[21]

As the title of the respondents, who hold certificates of title under the Land Registration
Act becomes indefeasible, it follows that the Court of First Instance has no power or
jurisdiction to entertain proceedings for the registration of the same parcels of land
covered by the certificates of title of the respondents. Such has been our express ruling
in the case of Rojas, et al. v. The City of Tagaytay, et al., G.R. No. L-13333, prom.
November 24, 1959, in which this Court, through Mr. Justice Barrera, said:

As thus viewed, the pivotal issue is one of jurisdiction on the part of the lower court. All
the other contentions of respondent regarding possession in good faith, laches or claims
of better right, while perhaps valid in an appropriate ordinary action, as to which we here
express no opinion, can not avail in the case at bar if the court a quo, sitting as land
registration court, had no jurisdiction over the subject matter in decreeing on June 30,
1957, the registration, in favor of respondent city, of a lot already previously decreed
and registered in favor of the petitioners.

In a quite impressive line of decisions, it has been well-settled that a Court of First
Instance has no jurisdiction to decree again the registration of land already decreed in
an earlier land registration case and a second decree for the same land is null and void.
This is so, because when once decreed by a court of competent jurisdiction, the title to
the land thus determined is already a res judicata binding on the whole world, the
proceedings being in rem.The court has no power in a subsequent proceeding (not
based on fraud and within the statutory period) to adjudicate the same title in favor of
another person. Furthermore, the registration of the property in the name of first
registered owner in the Registration Book is a standing notice to the world that said
property is already registered in his name. Hence, the latter applicant is chargeable with
notice that the land he applied for is already covered by a title so that he has no right
whatsoever to apply for it. To declare the later title valid would defeat the very purpose
of the Torrens system which is to quiet title to the property and guarantee its
indefeasibility. It would undermine the faith and confidence of the people in the efficacy
of the registration law.

Third: Issuance of a Decree Is Not a Ministerial Act

The issuance of a decree of registration is part of the judicial function of courts and is
not a mere ministerial act which may be compelled through mandamus. Thus, this Court
held in Valmonte and Jacinto vs. Nable: [22]

Moreover, after the rendition of a decision by a registration or cadastral court, there

remain many things to be done before the final decree can be issued, such as the
preparation of amended plans and amended descriptions, especially where the decision
orders a subdivision of a lot, the segregation therefrom of a portion being adjudicated to
another party, to fit the said decision. As said by this Court in the case of De los
Reyes vs. De Villa, 48 Phil., 227, 234:

Examining section 40, we find that the decrees of registration must be stated in
convenient form for transcription upon the certificate of title and must contain an
accurate technical description of the land. This requires trained technical men.
Moreover, it frequently occurs that only portions of a parcel of land included in an
application are ordered registered and that the limits of such portions can only be
roughly indicated in the decision of the court. In such cases amendments of the plans
and sometimes additional surveys become necessary before the final decree can be
entered. That can hardly be done by the court itself; the law very wisely charges the
chief surveyor of the General Land Registration Office with such duties (Administrative
Code, section 177).

Furthermore, although the final decree is actually prepared by the Chief of the General
Land Registration Office, the administrative officer, the issuance of the final decree can
hardly be considered a ministerial act for the reason that said Chief of the General Land
Registration Office acts not as an administrative officer but as an officer of the court and
so the issuance of a final decree is a judicial function and not an administrative one (De
los Reyes vs. De Villa, supra). x x x (Underscoring supplied.)

Indeed, it is well-settled that the issuance of such decree is not compellable by

mandamus because it is a judicial act involving the exercise of discretion. [23] Likewise,
the writ of mandamus can be awarded only when the petitioners legal right to the
performance of the particular act which is sought to be compelled is clear and complete.
[24]
Under Rule 65 of the Rules of Court, a clear legal right is a right which is indubitably
granted by law or is inferable as a matter of law. If the right is clear and the case is
meritorious, objections raising merely technical questions will be disregarded. [25]But
where the right sought to be enforced is in substantial doubt or dispute, as in this case,
mandamus cannot issue.

A court may be compelled by mandamus to pass and act upon a question submitted to
it for decision, but it cannot be enjoined to decide for or against one of the parties. [26] As
stated earlier, a judicial act is not compellable by mandamus. [27] The court has to decide
a question according to its own judgment and understanding of the law.[28]
In view of the foregoing, it is not legally proper to require the LRA to issue a decree of
registration. However, to avoid multiplicity of suits and needless delay, this Court deems
it more appropriate to direct the LRA to expedite its study, to determine with finality
whether Lot 3-A is included in the property described in TCT No. 6595, and to submit a
report thereon to the court of origin within sixty (60) days from receipt of this Decision,
after which the said court shall act with deliberate speed according to the facts and the
law, as herein discussed.

WHEREFORE, the petition is hereby DISMISSED but the case is REMANDED to the
court of origin in Pasig City. The Land Registration Authority, on the other hand, is
ORDERED to submit to the court a quo a report determining with finality whether Lot 3-
A is included in the property described in TCT No. 6595, within sixty (60) days from
notice. After receipt of such report, the land registration court, in turn, is ordered to ACT,
with deliberate and judicious speed, to settle the issue of whether the LRA may issue
the decree of registration, according to the facts and the law as herein discussed.

SO ORDERED.

[20]
PD 1529 provides:
SEC. 14. Who may apply. -- The following persons may file in the proper Court of First
Instance an application for registration of title to land, whether personally or through
their duly authorized representatives:
(1) Those who by themselves or through their predecessors-in-interest have been in
open, continuous, exclusive and notorious possession and occupation of alienable and
disposable lands of the public domain under a bona fide claim of ownership since June
12, 1945, or earlier.

SECOND DIVISION
[ G.R. NO. 140189, February 28, 2005 ]
GREAT SOUTHERN MARITIME SERVICES CORPORATION, FERRY CASINOS
LIMITED AND PIONEER INSURANCE AND SURETY CORPORATION,
PETITIONERS, VS. JENNIFER ANNE B. ACUA, HAYDEE ANNE B. ACUA,
MARITES T. CLARION, MARISSA C. ENRIQUEZ, GRACIELA M. TORRALBA AND
MARY PAMELA A. SANTIAGO, RESPONDENTS.

DECISION
AUSTRIA-MARTINEZ, J.:
Before us is a petition for review on certiorari under Rule 45 of the Rules of Court
assailing the Decision[1] of the Court of Appeals dated June 30, 1999 in CA-G.R. SP No.
50504, which set aside the Decision of the National Labor Relations Commission
(NLRC) dated January 15, 1997 in NLRC CA No. 010186-96.

The factual background of the case is as follows:

Petitioner Great Southern Maritime Services Corporation (GSMSC) is a manning

agency organized and existing under Philippine laws. It is the local agent of petitioner
Ferry Casinos Limited. Petitioner Pioneer Insurance and Surety Corporation is the
surety company of petitioner GSMSC.

On October 7, 1993, respondents Jennifer Anne B. Acua, Haydee Anne B. Acua,

Marites T. Clarion, Marissa C. Enriquez, Graciela M. Torralba, and Mary Pamela A.
Santiago filed a complaint for illegal dismissal against petitioners before the Philippine
Overseas Employment Administration (POEA), docketed as POEA Case No. (M) 93-10-
1987.[2]

Respondents claim that: between the months of March and April 1993, they were
deployed by petitioner GSMSC to work as croupiers (card dealers) for petitioner Ferry
Casinos Limited under a six-month contract with monthly salaries of US$356.45 plus
fixed overtime pay of US$107 a month and vacation leave pay equivalent to two months
salary pro rata, except for respondent Jennifer Anne B. Acua who had a monthly salary
of US$250.56 plus fixed overtime pay of US$87.17 and vacation leave pay equivalent to
two months salary pro rata; sometime in July 1993, Sue Smits, the Casino Manager,
informed them that their services were no longer needed; considering that their plane
tickets were already ready and they were subjected to harassment, they had no
alternative but to sign documents on July 11 and 12, 1993 specifying that they were the
ones who terminated their employment; they were repatriated on July 25, 1993. [3]

Petitioners denied the allegations of respondents and averred that respondents

voluntarily resigned from employment. They contend that: respondents were hired by
petitioner Ferry Casinos Limited through petitioner GSMSC to work as croupiers for a
period of six months; sometime in July 1993, respondents intimated their desire to
resign; petitioner Ferry Casinos Limited did not allow them to resign as the
simultaneous loss of croupiers would paralyze casino operations; respondents
thereafter exhibited lukewarm attitude towards work, became defiant and rude;
consequently, petitioner Ferry Casinos Limited was forced to accede to respondents
demands; and respondents executed resignation letters and disembarked on July 27,
1993.[4]

On October 5, 1995, the POEA decided the case against petitioners, thus:
WHEREFORE, premises considered, respondent Great Southern Maritime Services
[Corporation] and Pioneer Insurance and Surety Corporation, are hereby ordered jointly
and severally liable to pay complainants the following amounts:

1. Jennifer B. Acua US $ 610.17

2. Marissa C. Enriquez 986.17
3. Marites T. Clarion 986.17
4. Graciela M. Torralba 986.17
5. Pamela Santiago 582.20
6. Haydee Anne B. Acua 582.20

representing their salaries for the unexpired portion of their contract. All other claims are
dismissed for lack of merit.

SO ORDERED.[5]
The POEA ruled that the respondents were illegally dismissed since petitioners failed to
prove that respondents voluntarily resigned from employment. It held that the alleged
resignation letters are only declarations of release and quitclaim.

Petitioners appealed to the NLRC [6] which, on January 15, 1997, set aside the decision
of the POEA and dismissed the complaint for illegal dismissal. [7] The NLRC held that the
contested letters are not only declarations of release and quitclaim but resignations as
well. It further held that there is no concrete evidence of undue pressure, force and
duress in the execution of the resignation letters. The NLRC gave credence to
petitioners claim that respondents pre-terminated their contracts en masse because two
of the respondents, Haydee Anne B. Acua and Marites T. Clarion, are now working in
Singapore.

Respondents filed a motion for reconsideration [8] but the NLRC denied the same in a
Resolution dated April 30, 1997. [9]

On July 18, 1997, respondents filed a petition for certiorari before us, docketed as G.R.
No. 129673.[10]

On October 3, 1997, petitioners, in their Comment, prayed for outright dismissal of the
petition for: (a) failure of respondents to submit a verified statement of the material
dates to show that the petition was filed on time, and (b) filing a certification on non-
forum shopping signed only by their counsel. In addition, petitioners argued that the
issues raised are factual and there is no showing that the NLRC committed grave abuse
of discretion.[11]

On January 27, 1998, the Solicitor General, in lieu of Comment, manifested that he is
unable to sustain the position of the NLRC because the allegation that respondents
voluntarily resigned was not substantially established and respondents non-compliance
with the formal requirements of the petition should be waived since the petition is
meritorious.[12]

The NLRC, in compliance with our Resolution dated March 16, 1998, [13] filed its own
Comment praying for the dismissal of the petition and the affirmance of its decision with
finality. It argued that in reversing the POEA, it focused its attention on the correct
evaluation of the evidence on record which substantially showed that petitioners did not
dismiss respondents but that the latter resigned en masse on July 12, 1993. [14]

In accordance with St. Martin Funeral Homes vs. NLRC,[15] we referred the petition to
the Court of Appeals which, on June 30, 1999, set aside the decision of the NLRC and
reinstated the decision of the POEA.[16] The Court of Appeals held that respondents
were illegally dismissed since the petitioners failed to substantiate their claim that
respondents voluntarily resigned from employment. It ruled that the quitclaims are not
sufficient to show valid terminations. Anent non-compliance with the formal
requirements of the petition, the Court of Appeals, adopting the observation of the
Solicitor General, held that the case is an exception to the rule on strict adherence to
technicality.

On July 21, 1999, petitioners filed a motion for reconsideration but the Court of Appeals
denied it in a Resolution dated September 22, 1999.

Hence, the present petition for review on certiorari on the following grounds:
1. Under the law and applicable jurisprudence, the Petition for Certiorari filed by
respondents should have been denied outright for non-compliance with the
requirements for filing a Petition for Certiorari. [17]

2. Under the law and applicable jurisprudence, respondents cannot be considered

to have been dismissed from employment, because it was respondents who resigned
from their employment.[18]
Petitioners maintain that the petition for certiorari should have merited outright dismissal
for non-compliance with the mandatory requirements of the rules. There is no statement
indicating the material dates when the decision of the NLRC was received and when the
motion for reconsideration was filed. Likewise, the certification on non-forum shopping
was not signed by respondents but by their counsel. In any event, petitioners insist
that respondents voluntarily resigned from their employment.

In their Comment, respondents allege that the instant petition highlights the same
arguments already raised and squarely resolved by the Court of Appeals. Nevertheless,
they reiterate that they did not resign from employment but were abruptly and
unceremoniously terminated by petitioner Ferry Casinos Limited. [19]

Section 3[20] of Rule 46 of the Rules of Court provides that there are three material dates
that must be stated in a petition for certiorari brought under Rule 65: (a) the date when
notice of the judgment or final order or resolution was received, (b) the date when a
motion for new trial or for reconsideration when one such was filed, and, (c) the date
when notice of the denial thereof was received. This requirement is for the purpose of
determining the timeliness of the petition, since the perfection of an appeal in the
manner and within the period prescribed by law is jurisdictional and failure to perfect
an appeal as required by law renders the judgment final and executory. [21]
The same rule requires the pleader to submit a certificate of non-forum shopping to be
executed by the plaintiff or principal party. Obviously, it is the plaintiff or principal party,
and not the counsel whose professional services have been retained for a particular
case, who is in the best position to know whether he or it actually filed or caused the
filing of a petition in that case. [22]

As a general rule, these requirements are mandatory, meaning, non-compliance

therewith is a sufficient ground for the dismissal of the petition. [23]

In the case before us, the failure to comply with the rule on a statement of material
dates in the petition may be excused since the dates are evident from the records. A
thorough scrutiny of the records reveals that the January 15, 1997 decision of the NLRC
was received by respondents counsel on January 24, 1997. [24] On February 19, 1997,
respondents filed a motion for reconsideration [25] which was denied by the NLRC in a
Resolution dated April 30, 1997. [26] Respondents counsel received the resolution on
May 30, 1997 and they filed the petition forcertiorari on July 18, 1997.

In view of the retroactive application of procedural laws, [27] Section 4, Rule 65 of the
1997 Rules of Procedure, [28]as amended by A.M. No. 00-2-03 which took effect on
September 1, 2000, is the governing provision. It provides that when a motion for
reconsideration is timely filed, the 60-day period for filing a petition for certiorari shall be
counted from notice of the denial of said motion. While respondents motion for
reconsideration was filed 16 days late, [29] the NLRC nonetheless acted thereon and
denied it on the basis of lack of merit. In resolving the merits of the motion despite being
filed out of time, the NLRC undoubtedly recognized that it is not strictly bound by the
technicalities of law and procedure. Thus, the 60-day period for filing of a petition
for certiorari should be reckoned from the date of the receipt of the resolution denying
the motion for reconsideration, i.e., May 30, 1997, and thus, the filing made on July 18,
1997 was well within the 60-day reglementary period.

As regards the verification signed only by respondents counsel, this procedural lapse
could have warranted the outright dismissal of respondents petition for certiorari before
the Court of Appeals. However, it must be remembered that the rules on forum
shopping, which were precisely designed to promote and facilitate the orderly
administration of justice, should not be interpreted with such absolute literalness as to
subvert its own ultimate and legitimate objective which is the goal of all rules of
procedure - that is, to achieve substantial justice as expeditiously as possible. [30]

Needless to stress, rules of procedure are merely tools designed to facilitate the
attainment of justice. They were conceived and promulgated to effectively aid the court
in the dispensation of justice. Courts are not slaves to or robots of technical rules, shorn
of judicial discretion. In rendering justice, courts have always been, as they ought to be,
conscientiously guided by the norm that on the balance, technicalities take a backseat
against substantive rights, and not the other way around. Thus, if the application of the
Rules would tend to frustrate rather than promote justice, it is always within our power to
suspend the rules or except a particular case from its operation. [31]

As the Court eloquently stated in the case of Aguam vs. Court of Appeals:[32]
The court has the discretion to dismiss or not to dismiss an appellant's appeal. It is a
power conferred on the court, not a duty. The "discretion must be a sound one, to be
exercised in accordance with the tenets of justice and fair play, having in mind the
circumstances obtaining in each case." Technicalities, however, must be avoided. The
law abhors technicalities that impede the cause of justice. The court's primary duty is to
render or dispense justice. "A litigation is not a game of technicalities." "Lawsuits unlike
duels are not to be won by a rapier's thrust. Technicality, when it deserts its proper office
as an aid to justice and becomes its great hindrance and chief enemy, deserves scant
consideration from courts." Litigations must be decided on their merits and not on
technicality. Every party litigant must be afforded the amplest opportunity for the proper
and just determination of his cause, free from the unacceptable plea of technicalities.
Thus, dismissal of appeals purely on technical grounds is frowned upon where the
policy of the court is to encourage hearings of appeals on their merits and the rules of
procedure ought not to be applied in a very rigid, technical sense; rules of procedure are
used only to help secure, not override substantial justice. 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.[33] (Emphasis supplied)
Thus, in Sy Chin vs. Court of Appeals,[34] we held that the procedural lapse of a partys
counsel in signing the certificate of non-forum shopping may be overlooked if the
interests of substantial justice would thereby be served. Further, in Damasco vs. NLRC,
[35]
we noted that the certificate of non-forum shopping was executed by the petitioners
counsel, but nevertheless resolved the case on its merits for the reason that
technicality should not be allowed to stand in the way of equitably and completely
resolving the equity and obligations of the parties to a labor case.

Indeed, where a decision may be made to rest on informed judgment rather than rigid
rules, the equities of the case must be accorded their due weight because labor
determinations should not only be secundum rationem but also secundum caritatem.[36]

In this case, the Court of Appeals aptly found compelling reasons to disregard
respondents procedural lapses in order to obviate a patent injustice.

Time and again we have ruled that in illegal dismissal cases like the present one,
the onus of proving that the employee was not dismissed or if dismissed, that the
dismissal was not illegal, rests on the employer and failure to discharge the same would
mean that the dismissal is not justified and therefore illegal. [37] Thus, petitioners must not
only rely on the weakness of respondents evidence but must stand on the merits of
their own defense. A party alleging a critical fact must support his allegation with
substantial evidence for any decision based on unsubstantiated allegation cannot stand
as it will offend due process. [38] Petitioners failed to discharge this burden.

Petitioners complete reliance on the alleged resignation letters cum release and
quitclaim to support their claim that respondents voluntarily resigned is unavailing as
the filing of the complaint for illegal dismissal is inconsistent with resignation.
[39]
Resignation is the voluntary act of employees who are compelled by personal
reasons to dissociate themselves from their employment. It must be done with the
intention of relinquishing an office, accompanied by the act of abandonment. [40] Thus, it
is illogical for respondents to resign and then file a complaint for illegal dismissal. We
find it highly unlikely that respondents would just quit even before the expiration of their
contracts, after all the expenses and the trouble they went through in seeking greener
pastures and financial upliftment, and the concomitant tribulations of being separated
from their families, having invested so much time, effort and money to secure their
employment abroad. Considering the hard economic times, it is incongruous for
respondents to simply give up their work, return home and be jobless once again.

Likewise, petitioners submission that respondents voluntarily resigned because of their

desire to seek employment elsewhere, as accentuated by the concurrent fact that two of
the respondents, Haydee Anne B. Acua and Marites T. Clarion, already have jobs in
Singapore is an unreasonable inference. The fact that these two have already found
employment elsewhere should not be weighed against their favor. It should be expected
that they would seek other means of income to tide them over during the time that the
legality of their termination is under litigation. They should not be faulted for seeking
employment elsewhere for their economic survival.

We further note that the alleged resignation letters, one of which reads:
In signing this document, I am declaring my decision to return to the Philippines with the
other eight employees of Ferry Casinos Limited and Great Southern Maritime
Corporation, on the 25th July 1993. I understand that my contract is uncompleted and I
fully understand the consequences of that. I do however promise to work to full for both
companies before my departure.

I realise (sic) that I may be dismissed by the captain or Purser of my assigned vessel, if
I am suspected of misconduct in the remaining weeks of my employment, until my
departure, and I understand that I will compansate (sic) both companies for the results
from (sic) my actions.

I sign to say that I will follow the instructions of Captain A. Sanchez upon my arrival in
the Philippines and that any previous arrangements to this date are nul (sic) and void.

I recognise (sic) that I have been fairly treated by both companies and for this I will not
jeopardise (sic) them upon my arrival in the Philippines.

I acknowledge and accept this as evidence for (sic) my departure to be shown to the
P.O.E.A. in the Philippines.[41]
which were all prepared by petitioner Ferry Casinos Limited, are substantially similarly
worded and of the same tenor. A thorough scrutiny of the purported resignation letters
reveals the true nature of these documents. In reality, they are waivers or quitclaims
which are not sufficient to show valid separation from work or bar respondents from
assailing their termination. The burden of proving that quitclaims were voluntarily
entered into falls upon the employer.[42] Deeds of release or quitclaim cannot bar
employees from demanding benefits to which they are legally entitled or from contesting
the legality of their dismissal.[43] The reason for this rule was laid down in the landmark
case of Cario vs. ACCFA:[44]
Acceptance of those benefits would not amount to estoppel. The reason is plain.
Employer and employee, obviously, do not stand on the same footing. The employer
drove the employee to the wall. The latter must have to get hold of money. Because, out
of job, he had to face the harsh necessities of life. He thus found himself in no position
to resist money proffered. His, then, is a case of adherence, not of choice. One thing
sure, however, is that petitioners did not relent their claim. They pressed it. They are
deemed not to have waived any of their rights.Renuntiatio non praesumitur.
Thus, we are more than convinced that respondents did not voluntarily quit their jobs.
Rather, they were forced to resign or were summarily dismissed without just cause. The
Court of Appeals acted in the exercise of its sound discretion when it denied petitioners
insistence to dismiss the petition for certiorari, in light of the factual and antecedent
milieu. By so doing, the appellate court correctly gave more importance to the resolution
of the case on the merits.

WHEREFORE, the instant petition is DENIED and the assailed Decision of the Court of
Appeals dated June 30, 1999 in CA-G.R. SP No. 50504 is AFFIRMED. Costs against
petitioners.

SO ORDERED.
[20]
SEC. 3. Contents and filing of petition; effect of non-compliance with requirements.-

. . .

In actions filed under Rule 65, the petition shall further indicate the material dates
showing when notice of the judgment or (final) order or resolution subject thereof was
received, when a motion for new trial or reconsideration, if any, was filed and when
notice of the denial thereof was received.

. . .
The petitioner shall also submit together with the petition a sworn certification that he
has not theretofore commenced any other action involving the same issues in the
Supreme Court, the Court of Appeals or different divisions thereof, or any other tribunal
or agency; if there is such other action or proceeding, he must state the status of the
same; and if he should thereafter learn that a similar action or proceeding has been filed
or is pending before the Supreme Court, the Court of Appeals, or different divisions
thereof, or any other tribunal or agency, he undertakes to promptly inform the aforesaid
courts and other tribunal or agency thereof within five (5) days therefrom.

. . .

The failure of the petitioner to comply with any of the foregoing requirements shall be
sufficient ground for the dismissal of the petition. (As amended by SC Circular No. 39-
98, which took effect on September 1, 1998)
[28]
SEC. 4. When and where petition filed. The petition may be filed not later than sixty
(60) days from notice of the judgment, order or resolution. In case a motion for
reconsideration or new trial is timely filed, whether such motion is required or not, the
sixty (60) day period shall be counted from notice of the denial of said motion. . . .
[29]
Article 223 of the Labor Code provides:

Art. 223. Appeals. xxx The decision of the Commission shall be final and executory after
ten (10) calendar days from receipt thereof by the parties. . . .

Section 14, Rule VII of the New Rules of Procedure of the NLRC provides:

Section 14. Motions for Reconsideration. Motions for reconsideration of any order,
resolution or decision of the Commission shall not be entertained except when based on
palpable or patent errors, provided that the motion is under oath and filed within ten (10)
calendar days from receipt of the order, resolution or decision, with proof of service that
a copy of the same has been furnished, within the reglementary period, the adverse
party and provided further, that only one such motion from the same party shall be
entertained.
 QUO WARRANTO

EN BANC
[ G.R. No. 161434, March 03, 2004 ]
MARIA JEANETTE C. TECSON AND FELIX B. DESIDERIO, JR., PETITIONERS, VS.
THE COMMISSION ON ELECTIONS, RONALD ALLAN KELLY POE (A.K.A.
FERNANDO POE, JR.) AND VICTORINO X. FORNIER, RESPONDENTS. [*]
 [G.R. No. 161634. March 3, 2004]

ZOILO ANTONIO VELEZ, PETITIONER, VS. RONALD ALLAN KELLEY POE, A.K.A.
FERNANDO POE, JR., RESPONDENT. [*]

[G. R. No. 161824. March 3, 2004]

VICTORINO X. FORNIER, PETITIONER, VS. HON. COMMISSION ON ELECTIONS

AND RONALD ALLAN KELLEY POE, ALSO KNOWN AS FERNANDO POE JR.,
RESPONDENTS.

DECISION
VITUG, J.:
Citizenship is a treasured right conferred on those whom the state believes are
deserving of the privilege. It is a precious heritage, as well as an inestimable
acquisition,[1] that cannot be taken lightly by anyone - either by those who enjoy it or by
those who dispute it.

Before the Court are three consolidated cases, all of which raise a single question of
profound importance to the nation. The issue of citizenship is brought up to challenge
the qualifications of a presidential candidate to hold the highest office of the land. Our
people are waiting for the judgment of the Court with bated breath. Is Fernando Poe, Jr.,
the hero of silver screen, and now one of the main contenders for the presidency, a
natural-born Filipino or is he not?

The moment of introspection takes us face to face with Spanish and American colonial
roots and reminds us of the rich heritage of civil law and common law traditions, the
fusion resulting in a hybrid of laws and jurisprudence that could be no less than
distinctly Filipino.

Antecedent Case Settings

On 31 December 2003, respondent Ronald Allan Kelly Poe, also known as Fernando
Poe, Jr. (hereinafter "FPJ"), filed his certificate of candidacy for the position of President
of the Republic of the Philippines under the Koalisyon ng Nagkakaisang Pilipino (KNP)
Party, in the forthcoming national elections. In his certificate of candidacy, FPJ,
representing himself to be a natural-born citizen of the Philippines, stated his name to
be "Fernando Jr.," or "Ronald Allan" Poe, his date of birth to be 20 August 1939 and his
place of birth to be Manila.

Victorino X. Fornier, petitioner in G.R. No. 161824, entitled "Victorino X. Fornier,

Petitioner, versus Hon. Commission on Elections and Ronald Allan Kelley Poe, also
known as Fernando Poe, Jr., Respondents," initiated, on 09 January 2004, a petition
docketed SPA No. 04-003 before the Commission on Elections ("COMELEC") to
disqualify FPJ and to deny due course or to cancel his certificate of candidacy upon the
thesis that FPJ made a material misrepresentation in his certificate of candidacy by
claiming to be a natural-born Filipino citizen when in truth, according to Fornier, his
parents were foreigners; his mother, Bessie Kelley Poe, was an American, and his
father, Allan Poe, was a Spanish national, being the son of Lorenzo Pou, a Spanish
subject. Granting, petitioner asseverated, that Allan F. Poe was a Filipino citizen, he
could not have transmitted his Filipino citizenship to FPJ, the latter being an illegitimate
child of an alien mother. Petitioner based the allegation of the illegitimate birth of
respondent on two assertions - first, Allan F. Poe contracted a prior marriage to a certain
Paulita Gomez before his marriage to Bessie Kelley and, second, even if no such prior
marriage had existed, Allan F. Poe, married Bessie Kelly only a year after the birth of
respondent.

In the hearing before the Third Division of the COMELEC on 19 January 2004,
petitioner, in support of his claim, presented several documentary exhibits - 1) a copy of
the certificate of birth of FPJ, 2) a certified photocopy of an affidavit executed in Spanish
by Paulita Poe y Gomez attesting to her having filed a case for bigamy and
concubinage against the father of respondent, Allan F. Poe, after discovering his
bigamous relationship with Bessie Kelley, 3) an English translation of the affidavit
aforesaid, 4) a certified photocopy of the certificate of birth of Allan F. Poe, 5) a
certification issued by the Director of the Records Management and Archives Office,
attesting to the fact that there was no record in the National Archives that a Lorenzo Poe
or Lorenzo Pou resided or entered the Philippines before 1907, and 6) a certification
from the Officer-In-Charge of the Archives Division of the National Archives to the effect
that no available information could be found in the files of the National Archives
regarding the birth of Allan F. Poe.

On his part, respondent, presented twenty-two documentary pieces of evidence, the

more significant ones being - a) a certification issued by Estrella M. Domingo of the
Archives Division of the National Archives that there appeared to be no available
information regarding the birth of Allan F. Poe in the registry of births for San Carlos,
Pangasinan, b) a certification issued by the Officer-In-Charge of the Archives Division of
the National Archives that no available information about the marriage of Allan F. Poe
and Paulita Gomez could be found, c) a certificate of birth of Ronald Allan Poe, d)
Original Certificate of Title No. P-2247 of the Registry of Deeds for the Province of
Pangasinan, in the name of Lorenzo Pou, e) copies of Tax Declaration No. 20844, No.
20643, No. 23477 and No. 23478 in the name of Lorenzo Pou, f) a copy of the
certificate of death of Lorenzo Pou, g) a copy of the purported marriage contract
between Fernando Pou and Bessie Kelley, and h) a certification issued by the City Civil
Registrar of San Carlos City, Pangasinan, stating that the records of birth in the said
office during the period of from 1900 until May 1946 were totally destroyed during World
War II.

On 23 January 2004, the COMELEC dismissed SPA No. 04-003 for lack of merit. Three
days later, or on 26 January 2004, Fornier filed his motion for reconsideration. The
motion was denied on 06 February 2004 by the COMELEC en banc. On 10 February
2004, petitioner assailed the decision of the COMELEC before this Court conformably
with Rule 64, in relation to Rule 65, of the Revised Rules of Civil Procedure. The
petition, docketed G. R. No. 161824, likewise prayed for a temporary restraining order, a
writ of preliminary injunction or any other resolution that would stay the finality and/or
execution of the COMELEC resolutions.

The other petitions, later consolidated with G. R. No. 161824, would include G. R. No.
161434, entitled "Maria Jeanette C. Tecson, and Felix B. Desiderio, Jr., vs. The
Commission on Elections, Ronald Allan Kelley Poe (a.k.a. Fernando Poe, Jr.), and
Victorino X. Fornier," and the other, docketed G. R. No. 161634, entitled "Zoilo Antonio
G. Velez, vs. Ronald Allan Kelley Poe, a.k.a. Fernando Poe, Jr.," both challenging the
jurisdiction of the COMELEC and asserting that, under Article VII, Section 4, paragraph
7, of the 1987 Constitution, only the Supreme Court had original and exclusive
jurisdiction to resolve the basic issue on the case.

Jurisdiction of the Court

In G. R. No. 161824

In seeking the disqualification of the candidacy of FPJ and to have the COMELEC deny
due course to or cancel FPJs certificate of candidacy for alleged misrepresentation of a
material fact (i.e., that FPJ was a natural-born citizen) before the COMELEC, petitioner
Fornier invoked Section 78 of the Omnibus Election Code
Section 78. Petition to deny due course to or cancel a certificate of candidacy. --- A
verified petition seeking to deny due course or to cancel a certificate of candidacy may
be filed by any person exclusively on the ground that any material representation
contained therein as required under Section 74 hereof is false
in consonance with the general powers of COMELEC expressed in Section 52 of the
Omnibus Election Code -
Section 52. Powers and functions of the Commission on Elections. In addition to the
powers and functions conferred upon it by the Constitution, the Commission shall have
exclusive charge of the enforcement and administration of all laws relative to the
conduct of elections for the purpose of ensuring free, orderly and honest elections -
and in relation to Article 69 of the Omnibus Election Code which would authorize "any
interested party" to file a verified petition to deny or cancel the certificate of candidacy of
any nuisance candidate.

Decisions of the COMELEC on disqualification cases may be reviewed by the Supreme

Court per Rule 64[2] in an action for certiorari under Rule 65[3] of the Revised Rules of
Civil Procedure. Section 7, Article IX, of the 1987 Constitution also reads
"Each Commission shall decide by a majority vote of all its Members any case or matter
brought before it within sixty days from the date of its submission for decision or
resolution. A case or matter is deemed submitted for decision or resolution upon the
filing of the last pleading, brief, or memorandum, required by the rules of the
Commission or by the Commission itself. Unless otherwise provided by this Constitution
or by law, any decision, order, or ruling of each Commission may be brought to the
Supreme Court on certiorari by the aggrieved party within thirty days from receipt of a
copy thereof."
Additionally, Section 1, Article VIII, of the same Constitution provides that judicial power
is vested in one Supreme Court and in such lower courts as may be established by law
which power includes the duty of the courts of justice to settle actual controversies
involving rights which are legally demandable and enforceable, and to determine
whether or not there has been a grave abuse of discretion amounting to lack or excess
of jurisdiction on the part of any branch or instrumentality of the Government.

It is sufficiently clear that the petition brought up in G. R. No. 161824 was aptly elevated
to, and could well be taken cognizance of by, this Court. A contrary view could be a
gross denial to our people of their fundamental right to be fully informed, and to make a
proper choice, on who could or should be elected to occupy the highest government
post in the land.

In G. R. No. 161434 and G. R. No. 161634

Petitioners Tecson, et al., in G. R. No. 161434, and Velez, in G. R. No. 161634, invoke
the provisions of Article VII, Section 4, paragraph 7, of the 1987 Constitution in assailing
the jurisdiction of the COMELEC when it took cognizance of SPA No. 04-003 and in
urging the Supreme Court to instead take on the petitions they directly instituted before
it. The Constitutional provision cited reads:
"The Supreme Court, sitting en banc, shall be the sole judge of all contests relating to
the election, returns, and qualifications of the President or Vice-President, and may
promulgate its rules for the purpose."
The provision is an innovation of the 1987 Constitution. The omission in the 1935 and
the 1973 Constitution to designate any tribunal to be the sole judge of presidential and
vice-presidential contests, has constrained this Court to declare, in Lopez vs. Roxas,
[4]
as not (being) justiciable controversies or disputes involving contests on the
elections, returns and qualifications of the President or Vice-President. The
constitutional lapse prompted Congress, on 21 June 1957, to enact Republic Act No.
1793, "An Act Constituting an Independent Presidential Electoral Tribunal to Try, Hear
and Decide Protests Contesting the Election of the President-Elect and the Vice-
President-Elect of the Philippines and Providing for the Manner of Hearing the Same."
Republic Act 1793 designated the Chief Justice and the Associate Justices of the
Supreme Court to be the members of the tribunal. Although the subsequent adoption of
the parliamentary form of government under the 1973 Constitution might have implicitly
affected Republic Act No. 1793, the statutory set-up, nonetheless, would now be
deemed revived under the present Section 4, paragraph 7, of the 1987 Constitution.

Ordinary usage would characterize a "contest" in reference to a post-

election scenario. Election contests consist of either an election protest or a quo
warranto which, although two distinct remedies, would have one objective in view, i.e.,
to dislodge the winning candidate from office. A perusal of the phraseology in Rule 12,
Rule 13, and Rule 14 of the "Rules of the Presidential Electoral Tribunal," promulgated
by the Supreme Court en banc on 18 April 1992, would support this premise -
Rule 12. Jurisdiction. -The Tribunal shall be the sole judge of all contests relating to
the election, returns, and qualifications of the President or Vice-President of the
Philippines.

Rule 13. How Initiated. - An election contest is initiated by the filing of an election
protest or a petition for quo warranto against the President or Vice-President. An
election protest shall not include a petition for quo warranto. A petition for quo
warranto shall not include an election protest.

Rule 14. Election Protest. - Only the registered candidate for President or for Vice-
President of the Philippines who received the second or third highest number of
votes may contest the election of the President or the Vice-President, as the case may
be, by filing a verified petition with the Clerk of the Presidential Electoral Tribunal within
thirty (30) days after the proclamation of the winner.
The rules categorically speak of the jurisdiction of the tribunal over contests relating to
the election, returns and qualifications of the "President" or "Vice-President", of the
Philippines, and not of "candidates" for President or Vice-President. A quo
warranto proceeding is generally defined as being an action against a person who
usurps, intrudes into, or unlawfully holds or exercises a public office. [5] In such context,
the election contest can only contemplate a post-election scenario. In Rule 14, only a
registered candidate who would have received either the second or third highest
number of votes could file an election protest. This rule again presupposes a post-
electionscenario.

It is fair to conclude that the jurisdiction of the Supreme Court, defined by Section 4,
paragraph 7, of the 1987 Constitution, would not include cases directly brought before it,
questioning the qualifications of a candidate for the presidency or vice-presidency
before the elections are held.

Accordingly, G. R. No. 161434, entitled "Maria Jeanette C. Tecson, et al., vs.

Commission on Elections et al.," and G. R. No. 161634, entitled "Zoilo Antonio Velez vs.
Ronald Allan Kelley Poe a.k.a. Fernando Poe, Jr." would have to be dismissed for want
of jurisdiction.

The Citizenship Issue

Now, to the basic issue; it should be helpful to first give a brief historical background on
the concept of citizenship.

Perhaps, the earliest understanding of citizenship was that given by Aristotle, who,
sometime in 384 to 322 B.C., described the "citizen" to refer to a man who shared in the
administration of justice and in the holding of an office. [6]Aristotle saw its significance if
only to determine the constituency of the "State," which he described as being
composed of such persons who would be adequate in number to achieve a self-
sufficient existence.[7] The concept grew to include one who would both govern and be
governed, for which qualifications like autonomy, judgment and loyalty could be
expected. Citizenship was seen to deal with rights and entitlements, on the one hand,
and with concomitant obligations, on the other.[8] In its ideal setting, a citizen was active
in public life and fundamentally willing to submit his private interests to the general
interest of society.

The concept of citizenship had undergone changes over the centuries. In the 18th
century, the concept was limited, by and large, to civil citizenship, which established the
rights necessary for individual freedom, such as rights to property, personal liberty and
justice.[9] Its meaning expanded during the 19th century to include political citizenship,
which encompassed the right to participate in the exercise of political power.[10] The 20th
century saw the next stage of the development of social citizenship, which laid
emphasis on the right of the citizen to economic well-being and social security.[11] The
idea of citizenship has gained expression in the modern welfare state as it so developed
in Western Europe. An ongoing and final stage of development, in keeping with the
rapidly shrinking global village, might well be the internationalization of citizenship.[12]

The Local Setting - from Spanish

Times to the Present

There was no such term as "Philippine citizens" during the Spanish regime but "subjects
of Spain" or "Spanish subjects."[13] In church records, the natives were called 'indios',
denoting a low regard for the inhabitants of the archipelago. Spanish laws on citizenship
became highly codified during the 19th century but their sheer number made it difficult
to point to one comprehensive law. Not all of these citizenship laws of Spain however,
were made to apply to the Philippine Islands except for those explicitly extended by
Royal Decrees.[14]
Spanish laws on citizenship were traced back to the Novisima Recopilacion,
promulgated in Spain on 16 July 1805 but as to whether the law was extended to the
Philippines remained to be the subject of differing views among experts; [15] however,
three royal decrees were undisputably made applicable to Spaniards in the Philippines -
the Order de la Regencia of 14 August 1841,[16] the Royal Decree of 23 August 1868
specifically defining the political status of children born in the Philippine Islands, [17] and
finally, the Ley Extranjera de Ultramarof 04 July 1870, which was expressly made
applicable to the Philippines by the Royal Decree of 13 July 1870. [18]

The Spanish Constitution of 1876 was never extended to the Philippine Islands because
of the express mandate of its Article 89, according to which the provisions of
the Ultramar among which this country was included, would be governed by special
laws.[19]

It was only the Civil Code of Spain, made effective in this jurisdiction on 18 December
1889, which came out with the first categorical enumeration of who were Spanish
citizens. -
(a) Persons born in Spanish territory,

(b) Children of a Spanish father or mother, even if they were born outside of Spain,

(c) Foreigners who have obtained naturalization papers,

(d) Those who, without such papers, may have become domiciled inhabitants of any
town of the Monarchy.[20]
The year 1898 was another turning point in Philippine history. Already in the state of
decline as a superpower, Spain was forced to so cede her sole colony in the East to an
upcoming world power, the United States. An accepted principle of international law
dictated that a change in sovereignty, while resulting in an abrogation of all political laws
then in force, would have no effect on civil laws, which would remain virtually intact.

The Treaty of Paris was entered into on 10 December 1898 between Spain and the
United States.[21] Under Article IX of the treaty, the civil rights and political status of the
native inhabitants of the territories ceded to the United States would be determined by
its Congress -
"Spanish subjects, natives of the Peninsula, residing in the territory over which Spain by
the present treaty relinquishes or cedes her sovereignty may remain in such territory or
may remove therefrom, retaining in either event all their rights of property, including the
right to sell or dispose of such property or of its proceeds; and they shall also have the
right to carry on their industry, commerce, and professions, being subject in respect
thereof to such laws as are applicable to foreigners. In case they remain in the territory
they may preserve their allegiance to the Crown of Spain by making, before a court of
record, within a year from the date of the exchange of ratifications of this treaty, a
declaration of their decision to preserve such allegiance; in default of which declaration
they shall be held to have renounced it and to have adopted the nationality of the
territory in which they reside.

Thus

"The civil rights and political status of the native inhabitants of the territories hereby
ceded to the United States shall be determined by the Congress." [22]
Upon the ratification of the treaty, and pending legislation by the United States
Congress on the subject, the native inhabitants of the Philippines ceased to be Spanish
subjects. Although they did not become American citizens, they, however, also ceased
to be "aliens" under American laws and were thus issued passports describing them to
be citizens of the Philippines entitled to the protection of the United States.

The term "citizens of the Philippine Islands" appeared for the first time in the Philippine
Bill of 1902, also commonly referred to as the Philippine Organic Act of 1902, the first
comprehensive legislation of the Congress of the United States on the Philippines -
".... that all inhabitants of the Philippine Islands continuing to reside therein, who were
Spanish subjects on the 11th day of April, 1891, and then resided in said Islands, and
their children born subsequent thereto, shall be deemed and held to be citizens of the
Philippine Islands and as such entitled to the protection of the United States, except
such as shall have elected to preserve their allegiance to the Crown of Spain in
accordance with the provisions of the treaty of peace between the United States and
Spain, signed at Paris, December tenth eighteen hundred and ninety eight." [23]
Under the organic act, a citizen of the Philippines was one who was an inhabitant of
the Philippines, and a Spanish subject on the 11th day of April 1899. The term
inhabitant was taken to include 1) a native-born inhabitant, 2) an inhabitant who was a
native of Peninsular Spain, and 3) an inhabitant who obtained Spanish papers on or
before 11 April 1899.[24]

Controversy arose on to the status of children born in the Philippines from 11 April 1899
to 01 July 1902, during which period no citizenship law was extant in the Philippines.
Weight was given to the view, articulated in jurisprudential writing at the time, that the
common law principle of jus soli, otherwise also known as the principle of territoriality,
operative in the United States and England, governed those born in the Philippine
Archipelago within that period.[25] More about this later.

In 23 March 1912, the Congress of the United States made the following amendment to
the Philippine Bill of 1902 -
"Provided, That the Philippine Legislature is hereby authorized to provide by law for the
acquisition of Philippine citizenship by those natives of the Philippine Islands who do not
come within the foregoing provisions, the natives of other insular possession of the
United States, and such other persons residing in the Philippine Islands who would
become citizens of the United States, under the laws of the United States, if residing
therein."[26]
With the adoption of the Philippine Bill of 1902, the concept of "Philippine citizens" had
for the first time crystallized. The word "Filipino" was used by William H. Taft, the first
Civil Governor General in the Philippines when he initially made mention of it in his
slogan, "The Philippines for the Filipinos." In 1916, the Philippine Autonomy Act, also
known as the Jones Law restated virtually the provisions of the Philippine Bill of 1902,
as so amended by the Act of Congress in 1912 -
That all inhabitants of the Philippine Islands who were Spanish subjects on the
eleventh day of April, eighteen hundred and ninety-nine, and then resided in said
Islands, and their children born subsequently thereto, shall be deemed and held
to be citizens of the Philippine Islands, except such as shall have elected to preserve
their allegiance to the Crown of Spain in accordance with the provisions of the treaty of
peace between the United States and Spain, signed at Paris December tenth, eighteen
hundred and ninety-eight and except such others as have since become citizens of
some other country; Provided, That the Philippine Legislature, herein provided for, is
hereby authorized to provide for the acquisition of Philippine citizenship by those natives
of the Philippine Islands who do not come within the foregoing provisions, the natives of
the insular possessions of the United States, and such other persons residing in the
Philippine Islands who are citizens of the United States, or who could become citizens
of the United States under the laws of the United States, if residing therein."
Under the Jones Law, a native-born inhabitant of the Philippines was deemed to be a
citizen of the Philippines as of 11 April 1899 if he was 1) a subject of Spain on 11 April
1899, 2) residing in the Philippines on said date, and, 3) since that date, not a citizen of
some other country.

While there was, at one brief time, divergent views on whether or not jus soli was a
mode of acquiring citizenship, the 1935 Constitution brought to an end to any such link
with common law, by adopting, once and for all, jus sanguinis or blood relationship as
being the basis of Filipino citizenship -
Section 1, Article III, 1935 Constitution. The following are citizens of the Philippines -

(1) Those who are citizens of the Philippine Islands at the time of the adoption of this
Constitution

(2) Those born in the Philippines Islands of foreign parents who, before the adoption of
this Constitution, had been elected to public office in the Philippine Islands.

(3) Those whose fathers are citizens of the Philippines.

(4) Those whose mothers are citizens of the Philippines and upon reaching the age of
majority, elect Philippine citizenship.

(5) Those who are naturalized in accordance with law.

Subsection (4), Article III, of the 1935 Constitution, taken together with existing civil law
provisions at the time, which provided that women would automatically lose their Filipino
citizenship and acquire that of their foreign husbands, resulted in discriminatory
situations that effectively incapacitated the women from transmitting their Filipino
citizenship to their legitimate children and required illegitimate children of Filipino
mothers to still elect Filipino citizenship upon reaching the age of majority. Seeking to
correct this anomaly, as well as fully cognizant of the newly found status of Filipino
women as equals to men, the framers of the 1973 Constitution crafted the provisions of
the new Constitution on citizenship to reflect such concerns -
Section 1, Article III, 1973 Constitution - The following are citizens of the Philippines:

(1) Those who are citizens of the Philippines at the time of the adoption of this
Constitution.
(2) Those whose fathers or mothers are citizens of the Philippines.

(3) Those who elect Philippine citizenship pursuant to the provisions of the Constitution
of nineteen hundred and thirty-five.

(4) Those who are naturalized in accordance with law.

For good measure, Section 2 of the same article also further provided that
"A female citizen of the Philippines who marries an alien retains her Philippine
citizenship, unless by her act or omission she is deemed, under the law to have
renounced her citizenship."
The 1987 Constitution generally adopted the provisions of the 1973 Constitution, except
for subsection (3) thereof that aimed to correct the irregular situation generated by the
questionable proviso in the 1935 Constitution.

Section I, Article IV, 1987 Constitution now provides:

The following are citizens of the Philippines:

(1) Those who are citizens of the Philippines at the time of the adoption of this
Constitution.

(2) Those whose fathers or mothers are citizens of the Philippines.

(3) Those born before January 17, 1973 of Filipino mothers, who elect Philippine
citizenship upon reaching the age of majority; and

(4) Those who are naturalized in accordance with law.

The Case Of FPJ
Section 2, Article VII, of the 1987 Constitution expresses:

"No person may be elected President unless he is a natural-born citizen of the

Philippines, a registered voter, able to read and write, at least forty years of age on the
day of the election, and a resident of the Philippines for at least ten years immediately
preceding such election."
The term "natural-born citizens," is defined to include "those who are citizens of the
Philippines from birth without having to perform any act to acquire or perfect their
Philippine citizenship."[27]

The date, month and year of birth of FPJ appeared to be 20 August 1939 during the
regime of the 1935 Constitution. Through its history, four modes of acquiring citizenship
- naturalization, jus soli, res judicata and jus sanguinis[28] had been in vogue. Only
two, i.e., jus soli and jus sanguinis, could qualify a person to being a natural-born
citizen of the Philippines. Jus soli, per Roa vs. Collector of Customs[29] (1912), did not
last long. With the adoption of the 1935 Constitution and the reversal of Roa in Tan
Chong vs. Secretary of Labor[30] (1947), jus sanguinis or blood relationship would now
become the primary basis of citizenship by birth.

Documentary evidence adduced by petitioner would tend to indicate that the earliest
established direct ascendant of FPJ was his paternal grandfather Lorenzo Pou, married
to Marta Reyes, the father of Allan F. Poe. While the record of birth of Lorenzo Pou had
not been presented in evidence, his death certificate, however, identified him to be a
Filipino, a resident of San Carlos, Pangasinan, and 84 years old at the time of his death
on 11 September 1954. The certificate of birth of the father of FPJ, Allan F. Poe, showed
that he was born on 17 May 1915 to an Espaol father, Lorenzo Pou, and a mestiza
Espaol mother, Marta Reyes. Introduced by petitioner was an uncertified copy of a
supposed certificate of the alleged marriage of Allan F. Poe and Paulita Gomez on 05
July 1936. The marriage certificate of Allan F. Poe and Bessie Kelley reflected the date
of their marriage to be on 16 September 1940. In the same certificate, Allan F. Poe was
stated to be twenty-five years old, unmarried, and a Filipino citizen, and Bessie Kelley to
be twenty-two years old, unmarried, and an American citizen. The birth certificate of
FPJ, would disclose that he was born on 20 August 1939 to Allan F. Poe, a Filipino,
twenty-four years old, married to Bessie Kelly, an American citizen, twenty-one years
old and married.

Considering the reservations made by the parties on the veracity of some of the entries
on the birth certificate of respondent and the marriage certificate of his parents, the only
conclusions that could be drawn with some degree of certainty from the documents
would be that -
1. The parents of FPJ were Allan F. Poe and Bessie Kelley;

2. FPJ was born to them on 20 August 1939;

3. Allan F. Poe and Bessie Kelley were married to each other on 16 September,
1940;

4. The father of Allan F. Poe was Lorenzo Poe; and

5. At the time of his death on 11 September 1954, Lorenzo Poe was 84 years old.
Would the above facts be sufficient or insufficient to establish the fact that FPJ is a
natural-born Filipino citizen? The marriage certificate of Allan F. Poe and Bessie Kelley,
the birth certificate of FPJ, and the death certificate of Lorenzo Pou are documents of
public record in the custody of a public officer. The documents have been submitted in
evidence by both contending parties during the proceedings before the COMELEC.

The birth certificate of FPJ was marked Exhibit "A" for petitioner and Exhibit "3" for
respondent. The marriage certificate of Allan F. Poe to Bessie Kelley was submitted as
Exhibit "21" for respondent. The death certificate of Lorenzo Pou was submitted by
respondent as his Exhibit "5." While the last two documents were submitted in evidence
for respondent, the admissibility thereof, particularly in reference to the facts which they
purported to show, i.e., the marriage certificate in relation to the date of marriage of
Allan F. Poe to Bessie Kelley and the death certificate relative to the death of Lorenzo
Pou on 11 September 1954 in San Carlos, Pangasinan, were all admitted by petitioner,
who had utilized those material statements in his argument. All three documents were
certified true copies of the originals.

Section 3, Rule 130, Rules of Court states that -

Original document must be produced; exceptions. - When the subject of inquiry is the
contents of a document, no evidence shall be admissible other than the original
document itself, except in the following cases:

x x x x x x x x x

(d) When the original is a public record in the custody of a public office or is recorded in
a public office.
Being public documents, the death certificate of Lorenzo Pou, the marriage certificate of
Allan F. Poe and Bessie Kelly, and the birth certificate of FPJ, constitute prima
facie proof of their contents. Section 44, Rule 130, of the Rules of Court provides:
Entries in official records. Entries in official records made in the performance of his duty
by a public officer of the Philippines, or by a person in the performance of a duty
specially enjoined by law, are prima facie evidence of the facts therein stated.
The trustworthiness of public documents and the value given to the entries made
therein could be grounded on 1) the sense of official duty in the preparation of the
statement made, 2) the penalty which is usually affixed to a breach of that duty, 3) the
routine and disinterested origin of most such statements, and 4) the publicity of record
which makes more likely the prior exposure of such errors as might have occurred. [31]

The death certificate of Lorenzo Pou would indicate that he died on 11 September 1954,
at the age of 84 years, in San Carlos, Pangasinan. It could thus be assumed that
Lorenzo Pou was born sometime in the year 1870 when the Philippines was still a
colony of Spain. Petitioner would argue that Lorenzo Pou was not in the Philippines
during the crucial period of from 1898 to 1902 considering that there was no existing
record about such fact in the Records Management and Archives Office. Petitioner,
however, likewise failed to show that Lorenzo Pou was at any other place during the
same period. In his death certificate, the residence of Lorenzo Pou was stated to be
San Carlos, Pangasinan. In the absence of any evidence to the contrary, it should be
sound to conclude, or at least to presume, that the place of residence of a person at the
time of his death was also his residence before death. It would be extremely doubtful if
the Records Management and Archives Office would have had complete records of all
residents of the Philippines from 1898 to 1902.

Proof of Paternity and Filiation

Under Civil Law.

Petitioner submits, in any case, that in establishing filiation (relationship or civil status of
the child to the father [or mother]) or paternity (relationship or civil status of the father to
the child) of an illegitimate child, FPJ evidently being an illegitimate son according to
petitioner, the mandatory rules under civil law must be used.

Under the Civil Code of Spain, which was in force in the Philippines from 08 December
1889 up until the day prior to 30 August 1950 when the Civil Code of the Philippines
took effect, acknowledgment was required to establish filiation or paternity.
Acknowledgment was either judicial (compulsory) or voluntary. Judicial or compulsory
acknowledgment was possible only if done during the lifetime of the putative parent;
voluntary acknowledgment could only be had in a record of birth, a will, or a public
document.[32] Complementary to the new code was Act No. 3753 or the Civil Registry
Law expressing in Section 5 thereof, that -
In case of an illegitimate child, the birth certificate shall be signed and sworn to
jointly by the parents of the infant or only by the mother if the father refuses. In the
latter case, it shall not be permissible to state or reveal in the document the name of the
father who refuses to acknowledge the child, or to give therein any information by which
such father could be identified.
In order that the birth certificate could then be utilized to prove voluntary
acknowledgment of filiation or paternity, the certificate was required to be signed or
sworn to by the father. The failure of such requirement rendered the same useless as
being an authoritative document of recognition. [33] In Mendoza vs. Mella,[34] the Court
ruled -
"Since Rodolfo was born in 1935, after the registry law was enacted, the question here
really is whether or not his birth certificate (Exhibit 1), which is merely a certified copy of
the registry record, may be relied upon as sufficient proof of his having been voluntarily
recognized. No such reliance, in our judgment, may be placed upon it. While it contains
the names of both parents, there is no showing that they signed the original, let alone
swore to its contents as required in Section 5 of Act No. 3753. For all that might have
happened, it was not even they or either of them who furnished the data to be entered
in the civil register. Petitioners say that in any event the birth certificate is in the nature
of a public document wherein voluntary recognition of a natural child may also be made,
according to the same Article 131. True enough, but in such a case, there must be a
clear statement in the document that the parent recognizes the child as his or her own."
In the birth certificate of respondent FPJ, presented by both parties, nowhere in the
document was the signature of Allan F. Poe found. There being no will apparently
executed, or at least shown to have been executed, by decedent Allan F. Poe, the only
other proof of voluntary recognition remained to be "some other public document."
In Pareja vs. Pareja,[35] this Court defined what could constitute such a document as
proof of voluntary acknowledgment:
"Under the Spanish Civil Code there are two classes of public documents,
those executed by private individuals which must be authenticated by notaries,
and those issued by competent public officials by reason of their office. The public
document pointed out in Article 131 as one of the means by which recognition may be
made belongs to the first class."
Let us leave it at that for the moment.

The 1950 Civil Code categorized the acknowledgment or recognition of illegitimate

children into voluntary, legal or compulsory. Voluntary recognition was required to be
expressedly made in a record of birth, a will, a statement before a court of record or in
any authentic writing. Legal acknowledgment took place in favor of full blood brothers
and sisters of an illegitimate child who was recognized or judicially declared as natural.
Compulsory acknowledgment could be demanded generally in cases when the child
had in his favor any evidence to prove filiation. Unlike an action to claim legitimacy
which would last during the lifetime of the child, and might pass exceptionally to the
heirs of the child, an action to claim acknowledgment, however, could only be brought
during the lifetime of the presumed parent.

Amicus Curiae Ruben F. Balane defined, during the oral argument, "authentic writing,"
so as to be an authentic writing for purposes of voluntary recognition, simply as being a
genuine or indubitable writing of the father. The term would include a public instrument
(one duly acknowledged before a notary public or other competent official) or a private
writing admitted by the father to be his.

The Family Code has further liberalized the rules; Article 172, Article 173, and Article
175 provide:
Art. 172. The filiation of legitimate children is established by any of the following:

(1) The record of birth appearing in the civil register or a final judgment; or

(2) An admission of legitimate filiation in a public document or a private handwritten

instrument and signed by the parent concerned.

In the absence of the foregoing evidence, the legitimate filiation shall be proved by:

(1) The open and continuous possession of the status of a legitimate child; or

(2) Any other means allowed by the Rules of Court and special laws.

Art. 173. The action to claim legitimacy may be brought by the child during his or her
lifetime and shall be transmitted to the heirs should the child die during minority or in a
state of insanity. In these cases, the heirs shall have a period of five years within which
to institute the action.

The action already commenced by the child shall survive notwithstanding the death of
either or both of the parties.

x x x x x x x x x.

Art. 175. Illegitimate children may establish their illegitimate filiation in the same way
and on the same, evidence as legitimate children.

The action must be brought within the same period specified in Article 173, except
when the action is based on the second paragraph of Article 172, in which case the
action may be brought during the lifetime of the alleged parent.
The provisions of the Family Code are retroactively applied; Article 256 of the code
reads:
"Art. 256. This Code shall have retroactive effect insofar as it does not prejudice or
impair vested or acquired rights in accordance with the Civil Code or other laws.
Thus, in Vda. de Sy-Quia vs. Court of Appeals,[36] the Court has ruled:
"We hold that whether Jose was a voluntarily recognized natural child should be
decided under Article 278 of the Civil Code of the Philippines. Article 2260 of that Code
provides that 'the voluntary recognition of a natural child shall take place according to
this Code, even if the child was born before the effectivity of this body of laws' or before
August 30, 1950. Hence, Article 278 may be given retroactive effect."
It should be apparent that the growing trend to liberalize the acknowledgment or
recognition of illegitimate children is an attempt to break away from the traditional idea
of keeping well apart legitimate and non-legitimate relationships within the family in
favor of the greater interest and welfare of the child. The provisions are intended to
merely govern the private and personal affairs of the family. There is little, if any, to
indicate that the legitimate or illegitimate civil status of the individual would also affect
his political rights or, in general, his relationship to the State. While, indeed, provisions
on "citizenship" could be found in the Civil Code, such provisions must be taken in the
context of private relations, the domain of civil law; particularly -
"Civil Law is that branch of law which has for its double purpose the organization of the
family and the regulation of property. It has thus [been] defined as the mass of precepts
which determine and regulate the relations of assistance, authority and obedience
among members of a family, and those which exist among members of a society for the
protection of private interests."[37]
In Yaez de Barnuevo vs. Fuster,[38] the Court has held:
"In accordance with Article 9 of the Civil Code of Spain, x x x the laws relating to family
rights and duties, or to the status, condition and legal capacity of persons, govern
Spaniards although they reside in a foreign country; that, in consequence, 'all questions
of a civil nature, such as those dealing with the validity or nullity of the matrimonial
bond, the domicile of the husband and wife, their support, as between them, the
separation of their properties, the rules governing property, marital authority, division of
conjugal property, the classification of their property, legal causes for divorce, the extent
of the latter, the authority to decree it, and, in general, the civil effects of marriage and
divorce upon the persons and properties of the spouses, are questions that are
governed exclusively by the national law of the husband and wife."
The relevance of "citizenship" or "nationality" to Civil Law is best exemplified in Article
15 of the Civil Code, stating that -
"Laws relating to family rights and duties, or to the status, condition and legal capacity of
persons are binding uponcitizens of the Philippines, even though living abroad" -
that explains the need to incorporate in the code a reiteration of the Constitutional
provisions on citizenship. Similarly, citizenship is significant in civil relationships found in
different parts of the Civil Code,[39] such as on successional rights and family relations.
[40]
In adoption, for instance, an adopted child would be considered the child of his
adoptive parents and accorded the same rights as their legitimate child but such legal
fiction extended only to define his rights under civil law[41] and not his political status.

Civil law provisions point to an obvious bias against illegitimacy. This discriminatory
attitude may be traced to the Spanish family and property laws, which, while defining
proprietary and successional rights of members of the family, provided distinctions in the
rights of legitimate and illegitimate children. In the monarchial set-up of old Spain, the
distribution and inheritance of titles and wealth were strictly according to bloodlines and
the concern to keep these bloodlines uncontaminated by foreign blood was paramount.

These distinctions between legitimacy and illegitimacy were codified in the Spanish Civil
Code, and the invidious discrimination survived when the Spanish Civil Code became
the primary source of our own Civil Code. Such distinction, however, remains and
should remain only in the sphere of civil law and not unduly impede or impinge on the
domain of political law.
The proof of filiation or paternity for purposes of determining his citizenship status
should thus be deemed independent from and not inextricably tied up with that
prescribed for civil law purposes. The Civil Code or Family Code provisions on proof of
filiation or paternity, although good law, do not have preclusive effects on matters alien
to personal and family relations. The ordinary rules on evidence could well and should
govern. For instance, the matter about pedigree is not necessarily precluded from being
applicable by the Civil Code or Family Code provisions.

Section 39, Rule 130, of the Rules of Court provides -

Act or Declaration about pedigree. The act or declaration of a person deceased, or
unable to testify, in respect to the pedigree of another person related to him by birth or
marriage, may be received in evidence where it occurred before the controversy, and
the relationship between the two persons is shown by evidence other than such act or
declaration. The word `pedigree includes relationship, family genealogy, birth, marriage,
death, the dates when and the places where these facts occurred, and the names of the
relatives. It embraces also facts of family history intimately connected with pedigree.
For the above rule to apply, it would be necessary that (a) the declarant is already dead
or unable to testify, (b) the pedigree of a person must be at issue, (c) the declarant must
be a relative of the person whose pedigree is in question, (d) declaration must be made
before the controversy has occurred, and (e) the relationship between the declarant and
the person whose pedigree is in question must be shown by evidence other than such
act or declaration.

Thus, the duly notarized declaration made by Ruby Kelley Mangahas, sister of Bessie
Kelley Poe submitted as Exhibit 20 before the COMELEC, might be accepted to prove
the acts of Allan F. Poe, recognizing his own paternal relationship with FPJ, i.e, living
together with Bessie Kelley and his children (including respondent FPJ) in one house,
and as one family -
"I, Ruby Kelley Mangahas, of legal age and sound mind, presently residing in Stockton,
California, U.S.A., after being sworn in accordance with law do hereby declare that:

1. I am the sister of the late Bessie Kelley Poe.

2. Bessie Kelley Poe was the wife of Fernando Poe, Sr.

3. Fernando and Bessie Poe had a son by the name of Ronald Allan Poe, more
popularly known in the Philippines as `Fernando Poe, Jr., or `FPJ.

4. Ronald Allan Poe `FPJ was born on August 20, 1939 at St. Luke's Hospital,
Magdalena Street, Manila.

x x x x x x x x x

7. Fernando Poe Sr., and my sister Bessie, met and became engaged while they were
students at the University of the Philippines in 1936. I was also introduced to
Fernando Poe, Sr., by my sister that same year.

8. Fernando Poe, Sr., and my sister Bessie had their first child in 1938.

9. Fernando Poe, Sr., my sister Bessie and their first three children, Elizabeth,
Ronald, Allan and Fernando II, and myself lived together with our mother at our
family's house on Dakota St. (now Jorge Bocobo St.), Malate until the liberation of
Manila in 1945, except for some months between 1943-1944.

10. Fernando Poe, Sr., and my sister, Bessie, were blessed with four (4) more children
after Ronald Allan Poe.

x x x x x x x x x

18. I am executing this Declaration to attest to the fact that my nephew, Ronald Allan
Poe is a natural born Filipino, and that he is the legitimate child of Fernando Poe,
Sr.

"Done in City of Stockton, California, U.S.A., this 12th day of January 2004.

Ruby Kelley Mangahas

Declarant
DNA Testing

In case proof of filiation or paternity would be unlikely to satisfactorily establish or would

be difficult to obtain, DNA testing, which examines genetic codes obtained from body
cells of the illegitimate child and any physical residue of the long dead parent could be
resorted to. A positive match would clear up filiation or paternity. In Tijing vs. Court of
Appeals,[42] this Court has acknowledged the strong weight of DNA testing -
"Parentage will still be resolved using conventional methods unless we adopt the
modern and scientific ways available. Fortunately, we have now the facility and
expertise in using DNA test for identification and parentage testing. The University of the
Philippines Natural Science Research Institute (UP-NSRI) DNA Analysis Laboratory has
now the capability to conduct DNA typing using short tandem repeat (STR) analysis.
The analysis is based on the fact that the DNA of a child/person has two (2) copies, one
copy from the mother and the other from the father. The DNA from the mother, the
alleged father and the child are analyzed to establish parentage. Of course, being a
novel scientific technique, the use of DNA test as evidence is still open to challenge.
Eventually, as the appropriate case comes, courts should not hesitate to rule on the
admissibility of DNA evidence. For it was said, that courts should apply the results of
science when competently obtained in aid of situations presented, since to reject said
result is to deny progress."
Petitioners Argument For
Jurisprudential Conclusiveness

Petitioner would have it that even if Allan F. Poe were a Filipino citizen, he could not
have transmitted his citizenship to respondent FPJ, the latter being an illegitimate child.
According to petitioner, prior to his marriage to Bessie Kelley, Allan F. Poe, on July 5,
1936, contracted marriage with a certain Paulita Gomez, making his subsequent
marriage to Bessie Kelley bigamous and respondent FPJ an illegitimate child. The
veracity of the supposed certificate of marriage between Allan F. Poe and Paulita
Gomez could be most doubtful at best. But the documentary evidence introduced by no
less than respondent himself, consisting of a birth certificate of respondent and a
marriage certificate of his parents showed that FPJ was born on 20 August 1939 to a
Filipino father and an American mother who were married to each other a year later, or
on 16 September 1940. Birth to unmarried parents would make FPJ an illegitimate child.
Petitioner contended that as an illegitimate child, FPJ so followed the citizenship of his
mother, Bessie Kelley, an American citizen, basing his stand on the ruling of this Court
in Morano vs. Vivo,[43] citing Chiongbian vs. de Leon[44] and Serra vs. Republic.[45]
On the above score, the disquisition made by amicus curiae Joaquin G. Bernas, SJ, is
most convincing; he states -
"We must analyze these cases and ask what the lis mota was in each of them. If the
pronouncement of the Court onjus sanguinis was on the lis mota, the pronouncement
would be a decision constituting doctrine under the rule of stare decisis. But if the
pronouncement was irrelevant to the lis mota, the pronouncement would not be a
decision but a mere obiter dictum which did not establish doctrine. I therefore invite the
Court to look closely into these cases.

First, Morano vs. Vivo. The case was not about an illegitimate child of a Filipino father.
It was about a stepson of a Filipino, a stepson who was the child of a Chinese mother
and a Chinese father. The issue was whether the stepson followed the naturalization of
the stepfather. Nothing about jus sanguinis there. The stepson did not have the blood of
the naturalized stepfather.

Second, Chiongbian vs. de Leon. This case was not about the illegitimate son of a
Filipino father. It was about a legitimate son of a father who had become Filipino by
election to public office before the 1935 Constitution pursuant to Article IV, Section 1(2)
of the 1935 Constitution. No one was illegitimate here.

Third, Serra vs. Republic. The case was not about the illegitimate son of a Filipino
father. Serra was an illegitimate child of a Chinese father and a Filipino mother. The
issue was whether one who was already a Filipino because of his mother who still
needed to be naturalized. There is nothing there about invidious jus sanguinis.

Finally, Paa vs. Chan.[46] This is a more complicated case. The case was about the
citizenship of Quintin Chan who was the son of Leoncio Chan. Quintin Chan claimed
that his father, Leoncio, was the illegitimate son of a Chinese father and a Filipino
mother. Quintin therefore argued that he got his citizenship from Leoncio, his father. But
the Supreme Court said that there was no valid proof that Leoncio was in fact the son of
a Filipina mother. The Court therefore concluded that Leoncio was not Filipino. If
Leoncio was not Filipino, neither was his son Quintin. Quintin therefore was not only not
a natural-born Filipino but was not even a Filipino.

The Court should have stopped there. But instead it followed with an obiter dictum. The
Court said obiter that even if Leoncio, Quintin's father, were Filipino, Quintin would not
be Filipino because Quintin was illegitimate. This statement about Quintin, based on a
contrary to fact assumption, was absolutely unnecessary for the case. x x x It was obiter
dictum, pure and simple, simply repeating the obiter dictum in Morano vs. Vivo.

x x x x x x x x x

"Aside from the fact that such a pronouncement would have no textual foundation in the
Constitution, it would also violate the equal protection clause of the Constitution not
once but twice. First, it would make an illegitimate distinction between a legitimate child
and an illegitimate child, and second, it would make an illegitimate distinction between
the illegitimate child of a Filipino father and the illegitimate child of a Filipino mother.

The doctrine on constitutionally allowable distinctions was established long ago by

People vs. Cayat.[47] I would grant that the distinction between legitimate children and
illegitimate children rests on real differences. x x x But real differences alone do not
justify invidious distinction. Real differences may justify distinction for one purpose but
not for another purpose.

x x x What is the relevance of legitimacy or illegitimacy to elective public service? What

possible state interest can there be for disqualifying an illegitimate child from becoming
a public officer. It was not the fault of the child that his parents had illicit liaison. Why
deprive the child of the fullness of political rights for no fault of his own? To disqualify an
illegitimate child from holding an important public office is to punish him for the
indiscretion of his parents. There is neither justice nor rationality in that. And if there is
neither justice nor rationality in the distinction, then the distinction transgresses the
equal protection clause and must be reprobated.
The other amici curiae, Mr. Justice Vicente Mendoza (a former member of this Court),
Professor Ruben Balane and Dean Martin Magallona, at bottom, have expressed similar
views. The thesis of petitioner, unfortunately hinging solely on pure obiter dicta, should
indeed fail.

Where jurisprudence regarded an illegitimate child as taking after the citizenship of its
mother, it did so for the benefit the child. It was to ensure a Filipino nationality for the
illegitimate child of an alien father in line with the assumption that the mother had
custody, would exercise parental authority and had the duty to support her illegitimate
child. It was to help the child, not to prejudice or discriminate against him.
The fact of the matter perhaps the most significant consideration is that the 1935
Constitution, the fundamental law prevailing on the day, month and year of birth of
respondent FPJ, can never be more explicit than it is. Providing neither conditions nor
distinctions, the Constitution states that among the citizens of the Philippines are those
whose fathers are citizens of the Philippines. There utterly is no cogent justification to
prescribe conditions or distinctions where there clearly are none provided.

In Sum

(1) The Court, in the exercise of its power of judicial review, possesses jurisdiction over
the petition in G. R. No. 161824, filed under Rule 64, in relation to Rule 65, of the
Revised Rules of Civil Procedure. G.R. No. 161824 assails the resolution of the
COMELEC for alleged grave abuse of discretion in dismissing, for lack of merit, the
petition in SPA No. 04-003 which has prayed for the disqualification of respondent FPJ
from running for the position of President in the 10th May 2004 national elections on the
contention that FPJ has committed material representation in his certificate of candidacy
by representing himself to be a natural-born citizen of the Philippines.

(2) The Court must dismiss, for lack of jurisdiction and prematurity, the petitions in G. R.
No. 161434 and No. 161634 both having been directly elevated to this Court in the
latters capacity as the only tribunal to resolve a presidential and vice-presidential
election contest under the Constitution. Evidently, the primary jurisdiction of the Court
can directly be invoked only after, not before, the elections are held.

(3) In ascertaining, in G.R. No. 161824, whether grave abuse of discretion has been
committed by the COMELEC, it is necessary to take on the matter of whether or not
respondent FPJ is a natural-born citizen, which, in turn, depended on whether or not the
father of respondent, Allan F. Poe, would have himself been a Filipino citizen and, in the
affirmative, whether or not the alleged illegitimacy of respondent prevents him from
taking after the Filipino citizenship of his putative father. Any conclusion on the Filipino
citizenship of Lorenzo Pou could only be drawn from the presumption that having died
in 1954 at 84 years old, Lorenzo would have been born sometime in the year 1870,
when the Philippines was under Spanish rule, and that San Carlos, Pangasinan, his
place of residence upon his death in 1954, in the absence of any other evidence, could
have well been his place of residence before death, such that Lorenzo Pou would have
benefited from the en masse Filipinization that the Philippine Bill had effected in 1902.
That citizenship (of Lorenzo Pou), if acquired, would thereby extend to his son, Allan F.
Poe, father of respondent FPJ. The 1935 Constitution, during which regime respondent
FPJ has seen first light, confers citizenship to all persons whose fathers are Filipino
citizens regardless of whether such children are legitimate or illegitimate.

(4) But while the totality of the evidence may not establish conclusively that respondent
FPJ is a natural-born citizen of the Philippines, the evidence on hand still would
preponderate in his favor enough to hold that he cannot be held guilty of having made a
material misrepresentation in his certificate of candidacy in violation of Section 78, in
relation to Section 74, of the Omnibus Election Code. Petitioner has utterly failed to
substantiate his case before the Court, notwithstanding the ample opportunity given to
the parties to present their position and evidence, and to prove whether or not there has
been material misrepresentation, which, as so ruled in Romualdez-Marcos vs.
COMELEC,[48] must not only be material, but also deliberate and willful.

WHEREFORE, the Court RESOLVES to DISMISS

1. G. R. No. 161434, entitled "Maria Jeanette C. Tecson and Felix B. Desiderio, Jr.,
Petitioners, versusCommission on Elections, Ronald Allan Kelley Poe (a.k.a.
"Fernando Poe, Jr.,) and Victorino X. Fornier, Respondents," and G. R. No. 161634,
entitled "Zoilo Antonio Velez, Petitioner, versus Ronald Allan Kelley Poe, a.k.a.
Fernando Poe, Jr., Respondent," for want of jurisdiction.

2. G. R. No. 161824, entitled Victorino X. Fornier, Petitioner, versus Hon.

Commission on Elections and Ronald Allan Kelley Poe, also known as Fernando
Poe, Jr., for failure to show grave abuse of discretion on the part of respondent
Commission on Elections in dismissing the petition in SPA No. 04-003.
No Costs.

SO ORDERED.

Davide, Jr., C.J., see separate opinion, concurring.

Puno, J., on leave but was allowed to vote; see separate opinion.
Panganiban, J., on official leave; allowed to vote but did not send his vote on the matter.
Quisumbing, J., joins the dissent of Justices Tinga and Morales; case should have been
remanded.
Ynares-Santiago, J., concurs and also with J. Punos separate opinion.
Sandoval-Gutierrez, J., concurs, please see separate opinion.
Carpio, J., see dissenting opinion.
Austria-Martinez, J., concurs, please see separate opinion.
Corona, J., joins the dissenting opinion of Justice Morales.
Carpio-Morales, J., see dissenting opinion.
Callejo, Sr., J., please see concurring opinion.
Azcuna, J., concurs in a separate opinion.
Tinga, J., dissents per separate opinion.

[1]
Tan Chong vs. The Secretary of Labor, 45 O.G. No. 31, 1269.

[2]
Sec. 2. Mode of review. A judgment or final order or resolution of the Commission
on Elections and the Commission on Audit may be brought by the aggrieved party to the
Supreme Court on certiorari under Rule 65, except as hereinafter provided. (Rule 64)

[3]
Sec. 1. Petition for certiorari. When any tribunal, board or officer exercising
judicial or quasi-judicial functions has acted without or in excess of its or his jurisdiction,
or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is
no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law, a
person aggrieved thereby may file a verified petition in the proper court, alleging the
facts with certainty and praying that judgment be rendered annulling or modifying the
proceedings of such tribunal, board or officer, and granting such incidental reliefs as law
and justice may require.

The petition shall be accompanied by a certified true copy of the judgment, order or
resolution subject thereof, copies of all pleadings and documents relevant and pertinent
thereto, and a sworn certification of non-forum shopping as provided in the third
paragraph of section 3, Rule 46. (Rule 65)

[4]
17 SCRA 761.

[5]
See Rule 66, Revised Rules of Civil Procedure.
[6]
The Politics of Aristotle, edited and translated by Ernest Barker, Oxford University
Press, London, 1946. at p. 93.

[7]
Id., at 95.

[8]
Introduction, The Conditions of Citizenship, edited by Bart Van Steenbergen, Sage
Publications, London, Thousand Oaks, New Delhi (1994).

[9]
Ibid.

[10]
Ibid.

[11]
Ibid.

[12]
Ibid.

[13]
Under the codified Novisima Recopilacion promulgated in Spain in 1805, the
following were considered denizens (vecinos) " all foreigners who obtained the privilege
of naturalization, those who were born in these kingdoms, those who residing therein
may be converted to the holy Catholic faith; those, being self-supporting, established
their domicile therein; and in the case of a foreign woman who married a native man,
she thereby becomes subject to the same laws and acquires the same domicile as her
husband; those who establish themselves in the country by acquiring real property;
those who have trade or profession and go there to practice the same; also those who
practice some mechanical trade therein or keep a retail store;....those who reside for a
period of ten years in a home of his own; and also those foreigners who, in accordance
with the common law, royal orders and other laws of the kingdoms, may have become
naturalized or acquired residence therein. (Leon T. Garcia, The Problems of Citizenship
in the Philippines, Rex Bookstore, 1949, at p. 4)

[14]
Garcia, supra., at p. 3.

[15]
Justices Malcolm, Recto and Florentino Torres believed that the law was effective in
the Philippines. Those who entertained the contrary view were Justices Imperial and
Villareal. (Garcia, supra., at 4.).
[16]
Garcia, supra., pp. 5-6.

[17]
Under the Royal Decree of August 23, 1868, the following were considered
foreigners --- (1) The legitimate and recognized natural children of a father who belongs
to another independent state, and the unrecognized and natural and other illegitimate
children of a mother belonging to another State born outside of the Spanish dominions,
(2) The children specified in the preceding paragraph, born in the Spanish dominions or
on board Spanish vessels on the high seas if they do not, on attaining the age of
majority fixed in the laws of the Kingdom, elect Spanish nationality, (3) Those being
Spaniards, acquire another nationality, as well by renouncing the first as by accepting
employment, from another government without the authority of the sovereign and (4)
The woman who contracts marriage with a subject of another State. (Garcia, supra., pp.
6-7)

[18]
Under the law, the following were foreigners (a) All persons born of foreign parents
outside of the Spanish territory; (b) Those born outside of the Spanish territory of foreign
fathers and Spanish mothers while they do not claim Spanish nationality, (3) Those born
in Spanish territory of foreign parents or foreign fathers and Spanish mothers while they
do not make that claim, (4) Spaniards who may have lost their nationality, (5) Those
born outside of the Spanish territory of parents who may have lost their Spanish
nationality; and (6), the Spanish woman married to a foreigner. (Garcia, supra., p. 7)

[19]
Velayo, infra., p. 11.

[20]
Article 17, The Civil Code of Spain.

[21]
Garcia, supra, pp. 6-7.

[22]
Ramon M. Velayo, Philippine Citizenship And Naturalization, Central Book Supply,
Manila (1965), pp. 22-23.

[23]
Ibid., p. 30.

[24]
Garcia, supra, at pp. 31-32.

[25]
Garcia, supra, pp. 23-26.
[26]
Velayo, supra, p. 31

[27]
Section 2, Article IV, 1987 Constitution.

[28]
Per amicus curiae Joaquin G. Bernas, SJ.

[29]
23 Phil 315 (1912).

[30]
Supra., which held that jus soli was never applied in the Philippines.

[31]
Antillon vs. Barcelon, 37 Phil 148.

[32]
Article 131 Old Civil Code.

[33]
Dayrit vs. Piccio, 92 Phil 729.

[34]
17 SCRA 788.

[35]
95 Phil 167.

[36]
125 SCRA 835.

[37]
Vicente J. Fransisco, Civil Code of the Philippines, Bk I, 1953 at p. 5

[38]
29 Phil 606.

[39]
Article 16. Real property as well as personal property is subject to the law of the
country where it is situated.

However, intestate and testamentary successions, both with respect to the order of
succession and to the amount of successional rights and to the intrinsic validity of
testamentary provisions, shall be regulated by the national law of the person whose
succession is under consideration, whatever may be the nature of the property and
regardless of the country wherein said property may be found.
Article 17. The forms and solemnities of contracts, wills, and other public instruments
shall be governed by the laws of the country in which they are executed.

When the acts referred to are executed before the diplomatic or consular officials of the
Republic of the Philippines in a foreign country, the solemnities established by
Philippine laws shall be observed in their execution.

Prohibitive laws concerning persons, their acts or property, and those which have for
their object public order, public policy and good customs, shall not be rendered
ineffective by laws or judgments promulgated, or by determinations or conventions
agreed upon in a foreign country.

Article 815. When a Filipino is in a foreign country, he is authorized to make a will in any
of the forms established by the law of the country in which he may be. Such will may be
probated in the Philippines.

Article 816. The will of an alien who is abroad produces effect in the Philippines if made
with the formalities prescribed by the law of the place in which he resides, or according
to the formalities observed in his country, or in conformity with those which this Code
prescribes.

Article 817. A will made in the Philippines by a citizen or subject of another country,
which is executed in accordance with the law of the country of which he is a citizen or
subject, and which might be proved and allowed by the law of his own country, shall
have the same effect as if executed according to the laws of the Philippines.

Article 819. Wills, prohibited by the preceding article, executed by Filipinos in a foreign
country shall not be valid in the Philippines, even though authorized by the laws of the
country where they may have been executed.

Article 1039. Capacity to succeed is governed by the law of the nation of the decedent.

[40]
Article 10. Marriages between Filipino citizens abroad may be solemnized by a
consul general, consul or vice-consul of the Republic of the Philippines. The issuance of
the marriage license and the duties of the local civil registrar and of the solemnizing
officer with regard to the celebration of marriage shall be performed by said consular
official.

Article 21. When either or both of the contracting parties are citizens of a foreign
country, it shall be necessary for them before a marriage license can be obtained, to
submit a certificate of legal capacity to contract marriage, issued by their respective
diplomatic or consular officials.

Stateless persons or refugees from other countries shall, in lieu of the certificate of legal
capacity herein required, submit an affidavit stating the circumstances showing such
capacity to contract marriage.

Article 26. x x x

Where a marriage between a Filipino citizen and a foreigner is validly celebrated and a
divorce is thereafter validly obtained abroad by the alien spouse capacitating him or her
to remarry, the Filipino spouse shall have capacity to remarry under Philippine law.

Article 80. In the absence of a contrary stipulation in the marriage settlements, the
property relations of the spouses shall be governed by Philippine laws, regardless of the
place of the celebration of the marriage and their residence. This rule shall not apply:

(1) Where both spouses are aliens;

(2) With respect to the extrinsic validity of contracts affecting property not situated in the
Philippines and executed in the country where the property is located; and

(3) With respect to the extrinsic validity of contracts entered into in the Philippines but
affecting property situated in a foreign country whose laws require different formalities
for their extrinsic validity.

[41]
See Ching Leng vs. Galang, L-11931, October 1958, unreported.

[42]
354 SCRA 17.

[43]
20 SCRA 562, Paa vs. Chan 21 SCRA 753.
[44]
82 Phil. 771.

[45]
91 Phil. 914, unreported.

[46]
21 SCRA 753.

[47]
68 Phil 12.

[48]
248 SCRA 300 (1995)

SEPARATE OPINION

AUSTRIA-MARTINEZ, J.:

There are three petitions before this Court which seek the disqualification of a prominent
presidential aspirant in the forthcoming May 10, 2004 elections. The petitions are
common in their allegation that Fernando Poe, Jr. (FPJ) is not a qualified candidate for
the position of the President of the Philippines since he is not a natural-born Filipino
citizen for the following reasons: (a) FPJs father, Allan F. Poe, was not a Filipino citizen,
but a Spanish citizen; (b) FPJ is an illegitimate child having been born out of wedlock;
(c) the subsequent marriage of his parents did not inure to his benefit since they failed
to comply with the procedural requirements for legitimation; and (d) FPJ, as an
illegitimate child, follows the citizenship of his American mother, Bessie Kelley.

G.R. Nos. 161434 and 161634 invoke the Courts exclusive jurisdiction under the last
paragraph of Section 4, Article VII of the 1987 Constitution. [1] I agree with the majority
opinion that these petitions should be dismissed outright for prematurity. The Court has
no jurisdiction at this point of time to entertain said petitions.

The Supreme Court, as a Presidential Electoral Tribunal (PET), the Senate Electoral
Tribunal (SET) and House of Representatives Electoral Tribunal (HRET) [2] are electoral
tribunals, each specifically and exclusively clothed with jurisdiction by the Constitution to
act respectively as sole judge of all contests relating to the election, returns, and
qualifications of the President and Vice-President, Senators, and, Representatives. [3] In
a litany of cases, this Court has long recognized that these electoral tribunals exercise
jurisdiction over election contests only after a candidate has already been proclaimed
winner in an election.[4] Rules 14 and 15 of the Rules of the Presidential Electoral
Tribunal[5] provide that, for President or Vice-President, election protest or quo
warranto may be filedafter the proclamation of the winner.

Prior to the proclamation of winners, questions on the eligibility and

qualifications of a candidate may be addressed to the COMELEC only if they fall
under Section 78 of the Batas Pambansa Blg. 881 (Omnibus Election Code) which
provides:
Section 78. Petition to deny due course to or cancel a certificate of candidacy A
verified petition seeking to deny due course or to cancel a certificate of
candidacy may be filed by any person exclusively on the ground that any material
representation contained therein as required under Section 74 [6] hereof is
false. The petition may be filed at any time not later than twenty-five days from the time
of the filing of the certificate of candidacy and shall be decided after due notice and
hearing, not later than fifteen days before the election. (Emphasis supplied)
In his Certificate of Candidacy, respondent FPJ asserts that he is a natural-born citizen
and therefore eligible to the position of President of the Philippines. [7] Petitioner assails
the truthfulness of such material representation. Thus, the issue whether or not
respondent Poe made a material representation which is false is within the jurisdiction
of the COMELEC to resolve under Section 78 of the Omnibus Election Code. And when
the COMELEC denied the cancellation of the Certificate of Candidacy, petitioner,
ascribing grave abuse of discretion on the part of COMELEC in denying his petition,
appropriately filed G.R. No. 161824 under Rule 64 in relation to Rule 65 of the Rules of
Court which provides that the mode of review of a judgment of the COMELEC may be
brought by the aggrieved party to the Court on certiorari under Rule 65. Needless to
stress, certiorari is an extraordinary remedy that can be availed of only for an error of
jurisdiction, that is, one where the act complained of was issued by the court, officer or a
quasi-judicial body without or in excess of jurisdiction, or with grave abuse of discretion
which is tantamount to lack or in excess of jurisdiction. [8]

In Salcedo II vs. COMELEC,[9] the Court held that in order to justify the cancellation of
the certificate of candidacy under Section 78 of the Omnibus Election Code, it is
essential that: (1) the false representation mentioned therein pertains to a material
matter on the contents of the certificate of candidacy as provided in Section 74, that is,
the qualifications for elective office as provided in the Constitution; and (2) the false
representation must consist of adeliberate attempt to mislead, misinform, or hide a fact
which would otherwise render a candidate ineligible.

The Courts jurisdiction in the present petition for certiorari is limited only to the question
whether the COMELEC has acted with grave abuse of discretion amounting to lack or
excess of jurisdiction in finding that the evidence of petitioner is weak and not
convincing. Is it a capricious, whimsical and arbitrary exercise of discretion? The answer
is definitely in the negative.

The Certificate of Candidacy was executed by respondent FPJ under oath. The law
always presumes good faith.[10] One who alleges malice has the burden of proving the
same.[11] It is elementary that contentions must be proved by competent evidence and
reliance must be based on the strength of the partys own evidence and not upon the
weakness of the opponents defense.[12] To lay the burden of proof upon FPJ to prove
his citizenship simply because petitioner assails the same is anathema to the well-
recognized rule on the burden of proof.

The burden of proof is on the party who would be defeated if no evidence is given on
either side.[13]

In other words, petitioner should have established by competent evidence before the
COMELEC that the subject material representation is false and that it must have been
made by respondent FPJ deliberately to deceive the electorate as to his eligibility for the
position of President of the Philippines.

Justice Puno, in his separate opinion, has extensively discussed the evidence that were
correctly considered by the COMELEC as weak and not convincing to which I fully
subscribe, with the following additional observations:
Under Section 1 of Article IV of the 1935 Constitution, the following are citizens of the
Philippines:
1. Those who are citizens of the Philippines at the time of the adoption of this
Constitution.
...
3. Those whose fathers are citizens of the Philippines.

4. Those whose mothers are citizens of the Philippines and, upon reaching the age
of majority, elect Philippine citizenship.
...
Pertinent in the determination of who were the citizens of the Philippines at the time of
the adoption of the 1935 Constitution are the Treaty of Paris of 1898, the Philippine Bill
of 1902 and the Philippine Autonomy Act of 1916, otherwise known as the Jones Law.

Article IX of the Treaty of Paris of 1898 reads:

Spanish subjects, natives of the peninsula, residing in the territory over which
Spain by the present treaty relinquished or cedes her sovereignty, may remain in
such territory or may remove therefrom, retaining in either event all their rights or
property, including the right to sell or dispose of such property or of its proceeds; and
they shall also have the right to carry on their industry, commerce and professions,
being subject in respect thereof to such laws as are applicable to other foreigners. In
case they remain in the territory they may preserve their allegiance to the Crown
of Spain by making, before a court of record, a year from the date of the exchange
of ratification of this treaty, a declaration of their decision to preserve such
allegiance in default of which declaration they shall be held to have renounced it
and to have adopted the nationality of the territory in which they may
reside. (Emphasis supplied)
Section 4 of the Philippine Bill of 1902 enacted by U.S. Congress, reads:
That all inhabitants of the Philippines Islands who were Spanish subjects on the
eleventh day of April, eighteen hundred and ninety-nine, and then resided in said
islands, and their children born subsequent thereto, shall be deemed and held to
be citizens of the Philippines Islands, except such as shall have elected to preserve
their allegiance to the Crown of Spain in accordance with the provisions of the treaty of
peace between the United States and Spain, signed in Paris December tenth, eighteen
hundred and ninety eight, and except such others as have since become citizens of
some other country; Provided, That the Philippine Legislature, herein provided for, is
hereby authorized to provide by law for the acquisition of Philippines citizenship by
those natives of the Philippine Islands who do not come within the foregoing provisions,
the natives of the insular possessions of the United States, and such other persons
residing in the Philippines Islands who are citizens of the United States, or who could
become citizens of the United States under the laws of the United States if residing
therein. (Emphasis supplied)
Section 2 of the Jones Law reads:
That all inhabitants of the Philippine Islands who were Spanish subjects on the
eleventh day of April, eighteen hundred and ninety-nine, and then resided in said
islands, and their children born subsequent thereto, shall be deemed and held to
be citizens of the Philippines Islands, except such as shall have elected to preserve
their allegiance to the Crown of Spain in accordance with the provisions of the treaty of
peace between the United States and Spain, signed at Paris December tenth, eighteen
hundred and ninety eight, and except such others as have since become citizens of
some other country: Provided, that the Philippine Legislature, herein provided for, is
hereby authorized to provide by law for the acquisition of Philippine citizenship by those
natives of the Philippine Islands who do not come within the foregoing provisions, the
natives of the insular possessions of the United States, and such other persons residing
in the Philippine Islands who are citizens of the United States, or who could become
citizens of the United States under the laws of the United States if residing therein.
(Emphasis supplied)
Petitioners Exhibit D, a certification of the National Archives that it has no record that
respondents grandfather Lorenzo Pou entered or resided in the Philippines before
1907, seeks to establish that respondent FPJ is Spanish as his grandfather was a
Spanish citizen for which reason, his son, Allan Poe, FPJs father, was a Spanish citizen
under the aforequoted provisions of the Treaty of Paris and Philippine Bill of 1902. Said
exhibit is neither here nor there considering that, as noted by Justice Puno, the
petitioner had failed to demonstrate that the National Archives has a complete record of
all persons who lived in the Philippines during the Spanish and American occupation.

Moreover, petitioner Fornier failed to present competent evidence that

respondent FPJs grandfather had preserved his allegiance to the Crown of Spain
by having made a declaration to that effect before a court of record, pursuant to
the Treaty of Paris. Consequently, in the absence of such evidence, it cannot be validly
concluded that FPJs grandfather remained a Spanish citizen and transmitted his
citizenship to FPJs father. It is also true that neither could anyone conclusively
conclude on that basis, that FPJs grandfather did not retain his Spanish citizenship. In
either case, it sustains the view of the COMELEC that the evidence of petitioner is weak
and not convincing.
As earlier stated, the onus probandi is on petitioner to prove his claim, failing which his
petition to cancel the certificate of candidacy of respondent FPJ must necessarily fail.
The COMELECs assessment of the evidence presented before it must perforce be
accorded full respect.

It is suggested that the case be remanded to the COMELEC or the Court of Appeals for
the presentation of additional evidence to enable the Court to finally determine the
citizenship of respondent Poe. With all due respect to the proponents, I submit that to
do so would not only be contrary to basic fair play but also it is not within the jurisdiction
of the Court to make a final determination of respondent FPJs citizenship in the present
petition for certiorari which is specifically on the ground of grave abuse of discretion in
not canceling the certificate of candidacy under Section 78 of the Omnibus Election
Code. The issue on citizenship may be properly dealt with ina quo warranto proceeding
which is available to protesters only after elections under Section 4, Article VII of the
1987 Constitution.

As a last pitch effort to disqualify respondent FPJ, petitioner posits that the phrase
those whose fathers are citizens of the Philippines in the 1935 Constitution should
refer only to legitimate children, relying upon the cases ofChiongbian vs. De Leon,
[14]
Serra vs. Republic,[15] Morano vs. Vivo,[16] and Paa vs. Chan;[17] that inasmuch as it
appears that respondent Poe is an illegitimate son, then he follows the citizenship of his
mother who was an American citizen per respondent FPJs birth certificate. However,
the cited cases are inapplicable because they are not squarely in point. These cases did
not involve an illegitimate child of a Filipino father or the issue of citizenship in relation to
the exercise of the right to be elected into office. Besides, the Courts pronouncements
in these cases that illegitimacy in relation to citizenship are merely obiter dicta,
obviously non sequitur. Obiter dictumsimply means words of a prior opinion entirely
unnecessary for the decision of the case[18] or an incidental and collateral opinion
uttered by a judge and therefore not material to his decision or judgment and not
binding.[19] As such, the pronouncements therein on illegitimacy in relation to citizenship
must be disregarded as the ruling of the Court cannot be duly extended to expand the
main thrust of the decisions beyond their true import.

The fundamental principle in constitutional construction is that the primary source from
which to ascertain constitutional intent or purpose is the language of the provision itself.
The presumption is that the words in which the constitutional provisions are couched
express the objective sought to be attained. Otherwise stated, verba legisstill prevails.
Only when the meaning of the words used is unclear and equivocal should resort be
made to extraneous aids of construction and interpretation, such as the proceedings of
the Constitutional Commission or Convention, in order to shed light on and ascertain the
true intent or purpose of the provision being construed. [20]

Section 1, Article IV of the 1935 Constitution does not provide for a qualification
that the child be a product of a legitimate union for the child to acquire the
nationality of the Filipino father. Ubi lex non distinguit nec nos distinguere debemus.
When the law does not distinguish, neither should we. There should be no distinction in
the application of the fundamental law where none is indicated. The drafters of the
Constitution, in making no qualification in the use of the general word father must have
intended no distinction at law. The Courts could only distinguish where there are facts or
circumstances showing that the lawgiver intended a distinction or qualification. In such a
case, the courts would merely give effect to the lawgivers intent. [21]

Clearly, the framers of the 1935 Constitution simply provided that when paternity is
known or established, the child follows the fathers citizenship; otherwise, the citizenship
of the mother is followed. If we concede that the framers of the Constitution intended a
qualification that the child be the product of a legitimate union, such would lead to clear
injustice, and a restricted interpretation, by creating a distinction when the language of
the law is clear and unambiguous.

Thus, based on the evidence presented before it, the COMELEC did not commit any
grave abuse of discretion in concluding that petitioner failed to present substantial
evidence that FPJ has knowingly or deliberately committed a material representation
that is false in his certificate of candidacy.

For the foregoing reasons, I vote to dismiss all the petitions.

[1]
SEC. 4. . . . The Supreme Court, sitting en banc, shall be the sole judge of all contests
relating to the election, returns, and qualifications of the President or Vice President,
and may promulgate its rule for the purpose.
[2]
Section 17, Article VI of the 1987 Constitution reads:

SEC. 17. The Senate and the House of Representatives shall each have an electoral
tribunal which shall be the sole judge of all contests relating to the election, returns, and
qualifications of their respective members. . . .

[3]
Angara vs. Electoral Commission, 63 Phil. 139 (1936); Lazatin vs. House of
Representatives Electoral Tribunal, 168 SCRA 391 (1988); Co vs. Electoral Tribunal of
the House of Representatives, 199 SCRA 692 (1991); and, Chavez vs. COMELEC, 211
SCRA 315, 322 (1992).

[4]
See OHara vs. COMELEC, 379 SCRA 247 (2002); Dumayas, Jr. vs. COMELEC, 357
SCRA 358 (2001); Guerrero vs. COMELEC, 336 SCRA 458 (2000); Barroso vs. Ampig,
Jr., 328 SCRA 530 (2000); Caruncho III vs. COMELEC, 315 SCRA 693 (1999); Rasul
vs. COMELEC, 313 SCRA 18 (1999); Aquino vs. COMELEC, 248 SCRA 400 (1995);
Romualdez-Marcos vs. COMELEC, 248 SCRA 300 (1995); Pangilinan vs. COMELEC,
228 SCRA 36 (1993); Sampayan vs. Daza, 213 SCRA 807 (1992); Lazatin vs.
COMELEC, 157 SCRA 337, 338 (1988) Lomugdang vs. Javier, 21 SCRA 402 (1967);
and, Vda. de De Mesa vs. Mencias, 18 SCRA 533 (1966).

[5]
Rules 14 and 15 of the Rules of the Presidential Electoral Tribunal read as follows:

RULE 14. Election Protest. Only the registered candidate for President or for Vice-
President of the Philippines who received the second or third highest number of votes
may contest the election of the President or the Vice-President, as the case may be, by
filing a verified petition with the Clerk of the Presidential Electoral Tribunal within thirty
(30) days from the proclamation of the winner.

RULE 15. Quo Warranto. A verified petition for quo warranto contesting the election of
the President or Vice-President on the ground of ineligibility or of disloyalty to the
Republic of the Philippines may be filed by any voter within ten (10) days after the
proclamation of the winner. (Emphasis supplied)

[6]
SEC. 74. Contents of certificate of candidacy. The certificate of candidacy shall
state that the person filing it is announcing his candidacy for the office stated therein
and that he is eligible for said office; if for Member of the Batasang Pambansa, the
province, including its component cities, highly urbanized city or district or sector which
he seeks to represent; the political party to which he belongs; civil status, his date of
birth; residence; his post office address for all election purposes; his profession or
occupation; that he will support and defend the Constitution of the Philippines and will
maintain true faith and allegiance thereto; that he will obey the laws, legal orders, and
decrees promulgated by the duly constituted authorities; that he is not a permanent
resident or immigrant to a foreign country; that the obligation imposed by his oath is
assumed voluntarily, without mental reservation or purpose of evasion; and that the
facts stated in the certificate of candidacy are true to the best of his knowledge.
(Emphasis supplied)

.........

[7]
Section 2, Article VII of the Constitution provides:

Section 2. No person may be elected president unless he is a natural-born citizen of the

Philippines, a registered voter, able to read and write, at least forty years of age on the
day of the election, and a resident of the Philippines for at least ten years immediately
preceding such election.

[8]
Fortich vs. Corona, 289 SCRA 624, 642 (1998).

[9]
312 SCRA 447 (1999). See also Frivaldo vs. COMELEC, 174 SCRA 245 (1989);
Abella vs. Larrazabal, 180 SCRA 509 (1989); Labo vs. COMELEC, 211 SCRA 297
(1992); Frivaldo vs. COMELEC, 232 SCRA 785 (1996); and, Frivaldo vs. COMELEC,
257 SCRA 727 (1996).

[10]
Chua vs. Court of Appeals, 242 SCRA 341, 345 (1995).

[11]
Bernardino vs. Ignacio, 253 SCRA 641, 644 (1996); Ford Philippines, Inc. vs. Court
of Appeals, 267 SCRA 320, 329 (1997); Cancio vs. Garchitorena, 311 SCRA 268, 286
(1999).

[12]
Saguid vs. Court of Appeals, G.R. No. 150611, June 10, 2003; Heirs of Anastacio
Fabela vs. Court of Appeals, 362 SCRA 531, 547 (2001); Javier vs. Court of Appeals,
231 SCRA 498, 504 (1994); and, Pornellosa vs. Land Tenure Administration, 110 Phil.
986, 991 (1961).

[13]
Summa Insurance Corporation vs. Court of Appeals, 253 SCRA 175, 185 (1996).

[14]
46 O.G. 3652.

[15]
L-4223, May 12, 1952.

[16]
20 SCRA 562 (1967).

[17]
21 SCRA 753 (1967).

[18]
Blacks Law Dictionary, p. 1222, citing Noel vs. Olds, 78 U.S. App. D.C. 155.

[19]
Websters Third New International Dictionary, p. 1555.

[20]
Ang Bagong Bayani-OFW Labor Party vs. COMELEC, 359 SCRA 698, 724 (2001),
citing JM Tuason & Co., Inc. vs. Land Tenure Administration, 31 SCRA 413 (1970); Gold
Creek Mining Corp. vs. Rodriguez, 66 Phil. 259, 264 (1938); Ruben C. Agpalo, Statutory
Construction, 1990 ed., p. 311.

[21]
Guerrero vs. COMELEC, supra, Note No. 4, p. 468, citing Social Security System vs.
City of Bacolod, 115 SCRA 412, 415 (1982).

CONCURRING OPINION

A court which yields to the popular will

thereby licenses itself to practice despotism for
there can be no assurance that it will not on
another occasion indulge its own will.[1]
CALLEJO, SR., J.:

Before the Court are three petitions seeking to disqualify respondent Ronald Allan
Kelley Poe as candidate for President of the Republic of the Philippines, on the ground
of ineligibility as he is not a natural-born Filipino citizen, one of the qualifications for the
said position under Section 2, Article VII of the 1987 Constitution. [2]

The petitions in G.R. No. 161434[3] and G.R. No. 161634[4] were filed directly with this
Court invoking Section 4, Article VII of the 1987 Constitution. The petition in G.R. No.
161824 was filed by Victorino X. Fornier under Rule 64 in relation to Rule 65 of the
Rules of Court. It seeks to set aside and nullify the Resolution dated February 6, 2004
of the respondent Commission on Elections (COMELEC) en banc which affirmed the
Resolution of its First Division dated January 23, 2004 dismissing the petition for
disqualification filed against respondent Poe by petitioner Fornier.

I vote to dismiss outright the first two petitions for prematurity and for want of
jurisdiction.

It is on the third petition, G.R. No. 161824, that I submit this Opinion.

The petitioner invokes the certiorari jurisdiction of this Court over a judgment or final
order or resolution of respondent COMELEC by authority of Section 7, Article IX of the
1987 Constitution.[5]

Briefly, the factual antecedents giving rise to the petition in G.R. No. 161824 are as
follows:

On December 31, 2003, respondent Poe filed his Certificate of Candidacy for President
with the COMELEC. Among others, it is stated therein that he is a natural-born Filipino
citizen. On January 9, 2004, petitioner Fornier filed a Petition for Disqualification of
Presidential Candidate Ronald Allan Kelley Poe, also known as Fernando Poe, Jr. (the
petition a quo). The petitioner asserted that respondent Poe is not a citizen, much more
a natural-born citizen, of the Philippines. As such, he lacks one of the essential
qualifications for the position of President.

According to the petition a quo, respondent Poes father, Allan Fernando Poe, was a
Spanish citizen as shown by the marriage contract[6] between him and a certain Paulita
Gomez. On the other hand, his mother, Bessie Kelley, was an American citizen as
shown by his birth certificate.[7] Granting arguendo that respondent Poes father was a
Filipino citizen, still, respondent Poe could not acquire the citizenship of his father; the
latters marriage to Bessie Kelley was void, since he was previously married to Paulita
Gomez. As an illegitimate child, respondent Poe followed the citizenship of his American
mother. The petition a quo then prayed that respondent Poe be disqualified from
running for the position of the President of the Republic of the Philippines and that his
Certificate of Candidacy be denied due course, or cancelled.

On the basis of the allegations therein, the petition a quo was treated by the COMELEC
(First Division) as a petition to deny due course to or cancel a certificate of candidacy
under Section 78 of the Omnibus Election Code.

Pursuant to Section 1,[8] Rule 23 of the COMELEC Rules of Procedure, the petition was
correspondingly docketed as a special action SPA No. 04-003. [9] Because the
proceedings were heard summarily,[10] respondent Poe was given only three (3) days
within which to answer. He seasonably filed his Answer on January 16, 2004
substantially denying the material allegations contained in the petition a quo.[11] Attached
to respondent Poes answer was his birth certificate [12] and the marriage contract of his
parents, Allan Fernando Poe and Bessie Kelley,[13] to support his contention that he is a
natural-born Filipino citizen and a legitimate child. Respondent Poe also maintained that
while his mother was an American citizen, his father was a Filipino citizen. Thus,
respondent Poe concluded, he is a natural-born citizen as he follows the citizenship of
his father.

The hearing was held on January 19, 2004. The parties were given only two (2) days
within which to submit their respective memoranda which was timely filed by the parties
on January 21, 2004.[14]

On January 23, 2004, based on the pleadings filed therewith, the COMELEC (First
Division) rendered the assailed Resolution of January 23, 2004, dismissing the
petition a quo for lack of merit.[15] Citing Section 78 of the Omnibus Election Code, [16] the
COMELEC (First Division) opined that it only has jurisdiction to deny due course to or
cancel a certificate of candidacy exclusively on the ground that any material
representation contained therein is false. It added that, it is not at liberty to finally
declare whether or not the respondent is a natural-born Filipino.

According to the COMELEC (First Division), the evidence adduced by the petitioner,
namely:
1. Certificate of Candidacy of Ronald Allan Poe also known as Fernando Poe, Jr.; [17]

2. Certificate of Birth of Ronald Allan Poe; [18]

3. Sworn Statement in Spanish of one Paulita Gomez; [19] and

4. Marriage Certificate of Allan Fernando Poe and Paulita Gomez. [20]

failed to show strongly and convincingly that the declaration in respondent Poes
Certificate of Candidacy as to his citizenship was a falsehood.

The COMELEC (First Division) also made a provisional finding that respondent Poe is a
natural-born Filipino. It found that his grandfather, Lorenzo Pou, was a Spanish subject
who acquired Filipino citizenship by virtue of Section 4 of the Philippine Bill of 1902.
[21]
There being no evidence to show that Lorenzo Pou made a declaration to preserve
his allegiance to the Crown of Spain in accordance with Article IX of the Treaty of Paris,
[22]
he was held to have renounced it and became a Filipino citizen. Consequently, Allan
Fernando Poe, who was born subsequent to his fathers acquisition of Filipino
citizenship, followed Lorenzo Pous citizenship.

Regarding the petitioners claim that respondent Poe is an illegitimate child of Allan
Fernando Poe and Bessie Kelley, the COMELEC (First Division) cited Section 1, Article
IV of the 1935 Constitution, the law determinative of respondent Poes citizenship,
which stated that:
Sec. 1. The following are citizens of the Philippines:

1. Those who are citizens of the Philippine Islands at the time of the adoption of this
Constitution.

...

3. Those whose fathers are citizens of the Philippines.

It noted that the parties agreed on the fact that Allan Fernando Poe was the father of
Ronald Allan Poe. Hence, if Allan Fernando Poe was Filipino, necessarily, his son,
Ronald Allan Poe, is likewise a Filipino.

As to the allegation that respondent Poe was an illegitimate child, the COMELEC (First
Division) ratiocinated that:
Note that section 3 [should read section 1, paragraph (3)] of Article IV of the 1935
Constitution does not have a qualifying term legitimate after the words those whose
fathers and before the phrase are citizens of the Philippines. Legitimacy therefore is
beside the point. As long as the father is a Filipino, the child will always be a Filipino. As
we have discussed early on, since Allan Fernando Poe is a Filipino, his son Ronald
Allan Poe, the respondent herein, is a natural-born Filipino. [23]
Accordingly, it concluded that, considering the evidence presented by the petitioner is
not substantial, we declare that the respondent did not commit any material
misrepresentation when he stated in his Certificate of Candidacy that he is a natural-
born Filipino citizen.[24]

Petitioner Fornier then filed with the COMELEC en banc a motion for reconsideration of
the First Divisions resolution.[25] He urged the respondent COMELEC to assert its
original and exclusive jurisdiction to conclusively determine whether respondent Poe is
a natural-born Filipino citizen, invoking paragraphs (1) and (3), Section 2, Article IX-
C[26] of the Constitution and COMELEC Resolution No. 6452. [27] Further, petitioner
Fornier maintained that respondent Poe failed to establish that he is a natural-born
Filipino citizen as he failed to rebut the petitioners evidence tending to show that his
grandfather, Lorenzo Pou, and father, Allan Fernando Poe, were Spanish citizens. The
petitioner further insisted that even if respondent Poes father was a Filipino citizen,
since his (respondent Poes) own evidence showed that he was born prior to the
marriage of his parents and therefore an illegitimate child, he acquired the citizenship of
his mother, i.e., American citizenship. Petitioner Fornier thus reiterated his prayer that
respondent Poes Certificate of Candidacy be denied due course or ordered cancelled
for containing a material misrepresentation regarding his citizenship.

On February 6, 2004, the COMELEC en banc promulgated the assailed Resolution

dismissing the petitioners motion for reconsideration for lack of merit. [28] The
COMELEC en banc maintained that since the petition a quowas characterized as one
falling under Section 78 of the Omnibus Election Code, the proceedings covered
thereby was limited to a determination as to whether or not a material misrepresentation
contained in the certificate of candidacy is false. On this score, the COMELEC en
banc sustained the propriety of the First Divisions declaration on the paucity of the
petitioners evidence to disprove respondent Poes representation as to his Filipino
citizenship. It thereby affirmed that the First Divisions favorable pronouncement as to
respondent Poes citizenship was inevitably crucial to resolve the issue as to whether
respondent Poe had, indeed, made a material misrepresentation in his CoC as to
warrant its denial in due course and/or cancellation.

Aggrieved by the dismissal of the petition a quo, petitioner Fornier now comes to this
Court on certiorari.

At the outset, it bears stressing that resort to a special civil action for certiorari under
Rule 65 of the Rules of Court, as in the present recourse, is limited to the resolution of
jurisdictional issues, that is, lack or excess of jurisdiction and grave abuse of discretion
amounting to lack of jurisdiction on the part of the tribunal rendering the assailed
decision, order or resolution.[29] Thus
There is grave abuse of discretion justifying the issuance of the writ of certiorari when
there is a capricious and whimsical exercise of judgment as is equivalent to lack of
jurisdiction; where the power is exercised in an arbitrary or despotic manner by reason
of passion, prejudice, or personal hostility amounting to an evasion of positive duty or to
a virtual refusal to perform the duty enjoined, or to act at all in contemplation of law.[30]
Simply stated then, the threshold issue for resolution is whether or not the COMELEC
committed a grave abuse of its discretion amounting to excess or lack of jurisdiction in
dismissing the petition before it, for failure of the petitioner to prove the essential
requisites for the cancellation of the certificate of candidacy of respondent Poe under
Section 78 of the Omnibus Election Code.

The well-entrenched principle is that in the absence of any jurisdictional infirmity or an

error of law of the utmost gravity, the conclusion rendered by the COMELEC on a
matter that falls within its competence is entitled to utmost respect. Not every abuse of
discretion justifies the original action of certiorari; it must be grave. The test therefore is
whether the petitioner has demonstrated convincingly that the tribunal has committed
grave abuse of discretion.[31]

The COMELEC should have

dismissed the petition for
failure to state a sufficient
basis for the cancellation of
respondent Poes
certificate of candidacy

Irrefragably, the petition filed before the COMELEC was a petition under Section 78 of
the Omnibus Election Code, to cancel the certificate of candidacy of respondent Poe.
The said section reads:
Section 78. Petition to deny due course or cancel a certificate of candidacy. A verified
petition seeking to deny due course or to cancel a certificate of candidacy may be filed
by any person exclusively on the ground that any material representation contained
therein as required under Section 74 hereof is false. The petition may be filed at any
time not later than twenty-five days from the time of the filing of the certificate of
candidacy and shall be decided, after due notice and hearing, not later than fifteen days
before the election.
Section 74 of the Code provides that:
SEC. 74. Contents of certificate of candidacy. The certificate of candidacy shall state
that the person filing it is announcing his candidacy for the office stated therein and that
he is eligible for said office; if for Member of the Batasang Pambansa, the province,
including its component cities, highly urbanized city or district or sector which he seeks
to represent; the political party to which he belongs; civil status; his date of birth;
residence; his post office address for all election purposes; his profession or occupation;
that he will support and defend the Constitution of the Philippines and will maintain true
faith and allegiance thereto; that he will obey the laws, legal orders, and decrees
promulgated by the duly constituted authorities; that he is not a permanent resident or
immigrant to a foreign country; that the obligation imposed by his oath is assumed
voluntarily, without mental reservation or purpose of evasion; and that the facts stated in
the certificate of candidacy are true to the best of his knowledge.

Unless a candidate has officially changed his name through a court approved
proceeding, a certificate shall use in a certificate of candidacy the name by which he
has been baptized, or if has not been baptized in any church or religion, the name
registered in the office of the local civil registrar or any other name allowed under the
provisions of existing law or, in the case of a Muslim, his Hadji name after performing
the prescribed religious pilgrimage:Provided, That when there are two or more
candidates for an office with the same name and surname, each candidate, upon being
made aware or such fact, shall state his paternal and maternal surname, except the
incumbent who may continue to use the name and surname stated in his certificate of
candidacy when he was elected. He may also include one nickname or stage name by
which he is generally or popularly known in the locality.

The person filing a certificate of candidacy shall also affix his latest photograph,
passport size; a statement in duplicate containing his bio-data and program of
government not exceeding one hundred words, if he so desires.
A petition for the cancellation of a certificate of candidacy under Section 78 of the
Omnibus Election Code must aver three essential elements: (a) the candidate makes a
representation in his certificate of candidacy; (b) the representation pertains to a
material matter which would affect the substantive rights of the candidate the right to
run for the election for which he filed his certificate of candidacy; (c) the candidate
makes the false representation with the intention to deceive the electorate as to his
qualification for public office or deliberately attempts to mislead, misinform, or hide a
fact which would otherwise render him ineligible.[32] If the petition fails to state the three
essential elements, the petitioner would have no cause of action for the cancellation of
the certificate of candidacy of the respondent candidate; hence, the petition must be
dismissed.

The entries in a certificate of candidacy are prima facie correct. In making the said
entries, the candidate is presumed to have acted in good faith. In this case, the material
averments of the petition filed in the COMELEC reads:
1. Petitioner is of legal age, Filipino citizen of voting age and registered voter of
Pasay City with address at 122 Suerte Street, Pasay City 1300, where he may be
served with processes of the Honorable Commission.

2. Respondent Ronald Allan Kelley Poe, also known as Fernando Poe, Jr. (Poe),
is a candidate for the position of President of the Republic of the Philippines under
the Koalisyon ng Nagkakaisang Pilipino (KNP) party for the 10 May 2004 elections.
Based on his Certificate of Candidacy, respondent Poe claims to be of legal age and
is a resident of 23 Lincoln Street, Greenhills, San Juan, Metro Manila, where he may
be served with summons and other processes of the Honorable Commission. A copy
of respondent Poes Certificate of Candidacy is attached and made integral part
hereof as Annex A.
3. Under Section 2, Article VII of the 1987 Constitution, the qualifications of the
President of the Republic of the Philippines are enumerated as follows:
Sec. 2. No person may be elected president unless he is a natural-born citizen of
the Philippines, a registered voter, able to read and write, at least forty years of age
on the day of the election, and resident of the Philippines for at least ten years
immediately preceding such election. (Emphasis supplied)
4. Respondent Poe, however, is not even a citizen of the Philippines, much more a
natural born citizen, and as such lacks one of the essential qualifications for the
position of President of the Republic of the Philippines since both of his parents are
not Filipino citizens.

5. Based on respondent Poes alleged Certificate of Birth, he was born on 20

August 1939. A copy of the said Certificate of Birth is attached and made integral part
hereof as Annex B.
5.1. Respondent Poes alleged Certificate of Birth indicated that his parents are Allan
F. Poe and Bessie Kelley.

5.2. Respondent Poes alleged Certificate of Birth indicated that his mother, Bessie
Kelley, is an Americancitizen.

5.3. However, the alleged Certificate of Birth of respondent Poe falsely or incorrectly
indicated the real citizenship of his father, Allan F. Poe, since he is legally not a
Filipino citizen, as shown below.
6. Contrary to what was falsely indicated in the alleged Certificate of Birth of
respondent Poe, the latters father, Allan F. Poe, is not a Filipino, but an alien,
specifically, a citizen of Spain.
6.1. On 05 July 1936, Allan F. Poe expressly and categorically declared in a public
instrument that he was a Spanish citizen. A copy of the Marriage Contract executed
by Allan F. Poe and one Paulita Gomez at the Convento de Santo Domingo at
Intramuros, Manila, is attached and made an integral part hereof as Annex C.

6.2. Moreover, in said Marriage Contract, Allan F. Poe likewise categorically and
expressly admitted that both of his parents, Lorenzo Poe and Marta Reyes are also
citizens of Spain.
 6.3. Clearly, respondent Poes father is a Spanish citizen whose parents are
both Spanish citizens.
7. Thus, respondent Poe could not have possibly acquired Filipino citizenship from
his father, Allan F. Poe, since the latter is a Spanish citizen.

8. But even assuming arguendo that respondent Poes father, Allan F. Poe was a
Filipino citizen, as indicated in respondent Poes Certificate of Birth (Annex B
hereof), still respondent Poe could not have validly acquired Filipino citizenship from
his father due to the fact that the purported marriage of his parents, Allan F. Poe and
Bessie Kelley, is void.
8.1. Under Philippine jurisprudence, an illegitimate child, i.e. a child conceived and
born outside a valid marriage, follows the citizenship of his mother. [United States
vs. Ong Tianse, 29 Phil. 332 (1915)].

8.2. As previously stated, respondent Poes father, Allan F. Poe, married Paulita
Gomez on 05 July 1936, which marriage was subsisting at the time of the purported
marriage of respondent Poes father to his mother, Bessie Kelley. (cf. Annex C
hereof).

8.3. Moreover, it appears that Allan F. Poes first wife, Paulita Gomez, even filed a
case of bigamy and concubinage against him after discovering his bigamous
relationship with Bessie Kelley. A copy of the Affidavit dated 13 July 1939 executed
by Paulita Gomez in Spanish attesting to the foregoing facts, together with an English
translation thereof, are attached and made an integral parts hereof as Annex
D and D-1,respectively.
9. Verily, having been born out of void marriage, respondent Poe is an illegitimate
child of Allan F. Poe and Bessie Kelley. Consequently, the citizenship of respondent
Poe follows that of his mother, Bessie Kelley, who is undeniably an American citizen.

10. Under the 1935 Constitution, which was then applicable at the time of respondent
Poes birth, only the following are considered Filipino citizens:
SECTION 1. The following are citizens of the Philippines:

1) Those who are citizens of the Philippine Islands at the time of the adoption of this
Constitution;

2) Those born in the Philippine Islands of foreign parents who, before the adoption of
 this Constitution, had been elected to public office in the Philippine Islands;

3) Those whose fathers are citizens of the Philippines;

4) Those whose mothers are citizens of the Philippines and, upon reaching the age of
majority, elect Philippine citizenship; and

5) Those who are naturalized in accordance with law.

11. Clearly, respondent Poe is not a citizen of the Philippines, much more a natural-
born Filipino citizen, considering that both of his parents are aliens. Also, even
assuming arguendo that respondent Poes father, Allan F. Poe, is a Filipino citizen, as
indicated in his Certificate of Birth (Annex B hereof), since respondent Poe is an
illegitimate child of his father with Bessie Kelley, an American, he acquired the
citizenship of the latter. [United States vs. Ong Tianse, supra]

12. Hence, respondent Poe, not being a natural-born citizen of the Philippines, lacks
an essential qualification and corollarily possesses a disqualification to be elected
President of the Republic of the Philippines, as expressly required under the 1987
Constitution.

13. In view of the foregoing, respondent Poe should be disqualified from being a
candidate for the position of President of the Republic of the Philippines in the
coming 10 May 2004 elections.
PRAYER

WHEREFORE, it is respectfully prayed that Ronald Allan Kelley Poe, also known as
Fernando Poe, Jr., be disqualified from running for the position of President of the
Republic of the Philippines, and that his Certificate of Candidacy be denied due course,
or cancelled.[33]
The petition does not contain any material averments that in stating in his certificate of
candidacy that he was a natural-born citizen, respondent Poe intended to deceive the
electorate or that he deliberately attempted to mislead, misinform, or hide the fact that
he is not eligible for the position of President of the Republic of the Philippines.

The respondent Poes statement in his CoC that he was a natural-born Filipino citizen
does not ipso facto amount to an erroneous and deliberate statement of a material fact
which would constitute material misrepresentation. Indeed, the determination of
whether one is a natural-born citizen as defined by our Constitution is, ultimately, a
conclusion of law.[34] Corollarily, granting arguendo that respondent Poes statement in
his CoC later turned out to be erroneous or inexact, the same is not entirely groundless,
having been honestly based on admitted and authentic public records. Such error could
not be considered a falsity within the meaning of Section 78 of the Omnibus Election
Code because expressing an erroneous conclusion of law cannot be considered a
deliberate untruthful statement of a fact.[35]

But even if it were to be assumed that respondent Poes declaration in his CoC that he
is a natural-born Filipino citizen is a statement of a fact, the COMELEC did not gravely
err in its provisional finding that, based on the records extant in this case, respondent
Poe was in truth and in fact a natural-born Filipino citizen. Hence, respondent Poe made
no material misrepresentation in his CoC.

The petitioner failed to prove

the essential elements for an
action under Section 78 of the
Omnibus Election Code

Obviously, the burden of proof is, in the first instance, with the party who initiated the
action.[36] But in the final analysis, the party upon whom the ultimate burden lies is to be
determined by the pleadings, not by who is the plaintiff or the defendant. The test for
determining where the burden of proof lies is to ask which party to an action or suit will
fail if he offers no evidence competent to show the facts averred as the basis for the
relief he seeks to obtain,[37] and based on the result of an inquiry, which party would be
successful if he offers no evidence.

In ordinary civil cases, the plaintiff has the burden of proving the material allegations of
the complaint which are denied by the defendant, and the defendant has the burden of
proving the material allegations in his case where he sets up a new matter. All facts in
issue and relevant facts must, as a general rule, be proven by evidence except the
following:
(1) Allegations contained in the complaint or answer immaterial to the issues.

(2) Facts which are admitted or which are not denied in the answer, provided they have
been sufficiently alleged.
(3) Those which are the subject of an agreed statement of facts between the parties; as
well as those admitted by the party in the course of the proceedings in the same case.

(4) Facts which are the subject of judicial notice.

(5) Facts which are legally presumed.

(6) Facts peculiarly within the knowledge of the opposite party.[38]

I am convinced that the petitioner failed to prove that the COMELEC committed a grave
abuse of its discretion in dismissing the petition to disqualify respondent Poe for the
petitioners failure to allege and prove that the respondent Poe made a false
representation when he stated in his certificate of candidacy that he is a natural-born
Filipino.

The only evidence adduced by the petitioner to prove the falsity of respondent Poes
statement that he is a natural-born Filipino are the following:
1. Certified photocopy of the Certificate of Birth of Ronald Allan Poe, which
indicates the citizenship of Lorenzo Pou as Espaol;[39]

2. Certified photocopy of the Marriage Certificate of Allan Fernando Poe and Paulita
Gomez, which indicates the citizenship of respondent Poes father as also Espaol;
[40]
and

3. Certification issued by Director Ricardo Manapat that the National Archives does
not possess any record in regard to the entry of Lorenzo Poe or Lorenzo Pou in
the Philippines before 1907.[41]
However, as gleaned from the affidavits of Remmel G. Talabis, Emman A. Llanera,
Vicelyn G. Tarin, William Duff and Victorino A. Floro III, the aforementioned documents
relied upon by the petitioner are false documents. In fact, the lack of probative value to
be credited to the foregoing documents was implicitly affirmed by the petitioner himself
during the oral arguments of the parties before the Court on February 19, 2004. Failing
to discharge his burden with his own documentary evidence, the petitioner had to rely
on the private respondents Certificate of Birth[42] and the Marriage Contract[43] of his
parents.

The petitioner alleges that respondent Poe was born on August 20, 1939, that is, before
the marriage of his parents on September 16, 1940. Being born out of wedlock,
respondent Poe was an illegitimate child who could not acquire the Filipino citizenship
of Allan Fernando Poe under Section 1(3), Article IV of the 1935 Constitution which, the
petitioner posits, encompass within its terms only legitimate children.[44] Hence,
respondent Poe followed the citizenship of his mother who was an American. [45] The
petitioner further asserts that assuming the validity of the subsequent marriage of
respondent Poes parents, Article 121 of the Old Civil Code [46] necessitated, as a
fundamental requirement of legitimation, that the father and the mother acknowledge
the child. In any event, assuming that legitimation had properly taken place, its effects
would retroact only to the date of marriage of respondent Poes parents. [47] The
subsequent legitimation would not anyhow effectively confer upon respondent Poe the
status of a natural-born Filipino citizen which is defined by our Constitution as one
who is a citizen of the Philippines from birth without having to perform any act to acquire
or perfect his Philippine citizenship. [48]

The petitioners assertions are barren of merit.

First. The provisions of the Old Civil Code adverted to by the petitioner should not be
made to apply in the present case. There is no legal impediment to the application in
this case of the rule of retroactivity provided in Article 256 of the Family Code to the
effect that, [T]his Code shall have retroactive effect insofar as it does not prejudice or
impair vested or acquired rights in accordance with the Civil Code or other laws.
Vested right is a right in property which has become fixed and established and is no
longer open to doubt or controversy. It expresses the concept of present fixed interest,
which in right reason and natural justice should be protected against arbitrary State
action.[49] In the present case, there appears to be no substantial evidence on record to
prove that vested rights will be prejudiced or impaired by a confirmation, that is, of
respondent Poes legitimate status since he has, since birth, been regarded a legitimate
child by his parents, siblings and other relatives. Consequently, the provisions of Article
177,[50] 178,[51] 179[52] and 180[53] of the Family Code may be applied retroactively to
respondent Poes case. As a corollary, respondent Poes legitimation became the
necessary legal consequence of the subsequent marriage of his parents, the effects of
which would retroact to the time of respondent Poes birth in 1939.

Second. As correctly maintained by the COMELEC, the issue of legitimacy bears no

direct relevance to the determination of respondent Poes citizenship in the petition at
bar. Contrary to the petitioners protestations, legitimacy or the lack of it cannot by
itself be made determinative of a childs citizenship. The fact of legitimacy cannot, even
if successfully concluded, be used as a spring board to secure a declaration of a childs
citizenship. The legitimate status of a child emanates from civil law which regulates the
private relations of the members of civil society, while citizenship is political in character
and the ways in which it should be conferred lie outside the ambit of the Civil Code. It is
not within the province of our civil law to determine how or when citizenship is to be
acquired.[54] This is precisely evinced by the fact that the right to acquire the parents
citizenship is not among the enumerated rights of a legitimate child under our civil laws.
[55]

Third. Section 1(3), Article IV of the 1935 Constitution did not, by its express terms,
distinguish between a legitimate and an illegitimate child for purposes of acquiring the
Filipino citizenship of the father. It is a rudiment in legal hermeneutics that when no
distinction is made by law, the Court should not distinguish Ubi lex non distinguit nec
nos distinguere debemos.[56]

In Domino v. COMELEC,[57] we held that:

It is to be assumed that the words in which constitutional provisions are couched
express the objective sought to be attained. They are to be given their ordinary meaning
except where technical terms are employed in which case the significance thus
attached to them prevails. As the Constitution is not primarily a lawyers document, it
being essential for the rule of law to obtain that it should ever be present in the peoples
consciousness, its language as much as possible should be understood in the sense
they have in common use. What it says according to the text of the provision to be
construed compels acceptance and negates the power of the courts to alter it, based on
the postulate that the framers and the people mean what they say. Thus there are cases
where the need for construction is reduced to a minimum.
In Llamado v. Court of Appeals,[58] the Court affirmed that:
As a matter of verbal recognition certainly, no one will gainsay that the function in
construing a statute is to ascertain the meaning of words used by the legislature. To go
beyond it is to usurp a power which our democracy has lodged in its elected
legislature. The great judges have constantly admonished their brethren of the need for
discipline in observing the limitations. A judge must not rewrite a statute, neither to
enlarge nor to contract it.Whatever temptations the statesmanship of policy-making
might wisely suggest, construction must eschew interpolation and evisceration. He must
not read in by way of creation. He must not read out except to avoid patent nonsense of
internal contradictions.
Any other interpretation of the provision would visit unmitigated violence not only upon
statutory construction but on existing laws and the generally accepted principles of
international law, to which we are bound under the present state of affairs, as hereafter
to be discussed.

Fourth. To circumscribe the application of the endowed political privilege under Section
1(3), Article IV of the 1935 Constitution only to the legitimate children of Filipino fathers
would be clearly violative of the equal protection clause of the Constitution. There
appears to be no substantial distinction between legitimate and illegitimate children to
justify their disparate treatment vis--vis the possession of the status of and the
exercise of a political privilege, including the right to run for and be elected to public
office. The legal status of illegitimacy, however defined, bears no relation to the
individuals ability to participate in and contribute to society.[59] The only purported
purpose of the natural-born citizen requirement is to ensure the elected public officers
allegiance to the Republic. The petitioners have failed to demonstrate how legitimate or
illegitimate birth affects loyalty to the Republic. Not to be overlooked is the fact that a
natural childs conception may take place under circumstances that render it practically
indistinguishable from that of a legitimate child, except for the absence of a marriage
ceremony between the parents. To hold that a childs illegitimacy can bear significance
on his right to acquire citizenship is to step from the bounds of law, into the realm of
inequitable and bigoted rationalism.

The following provisions and principles of law further militate against a restrictive
interpretation of the disputed constitutional provision:
1. Article 3 of P.D. 603, otherwise known as the Child and Youth Welfare Code
provides that all children shall be entitled to the rights herein set forth without
distinction as to legitimacy or illegitimacy, sex, social status, religion, political
antecedents, and other factors.

2. The Philippines is a party to the Convention on the Rights of the Child, Article
2.1 of which guarantees that each child within its jurisdiction shall be treated without
discrimination of any kind, irrespective of the childs birth or other status.
3. Article 25 of The Universal Declaration of Human Rights itself provides that all
children whether born in or out of wedlock, shall enjoy the same social protection.
Finally, the amici curiae[60] of the Court are unanimous in their position that Section 1(3),
Article IV of the 1935 Constitution is founded upon the principle of jus sanguinis. In
other words, the derivation of citizenship from a person, or the transmission of
citizenship to his child, springs from blood relationship which, whether injected
legitimately or illegimately, is the same blood and has the same political effect. Hence,
all that is needed to be established is paternity as a manifestation of blood relationship.

In the present petition, the petitioner does not deny that respondent Poe is the natural
son of Allan Fernando Poe. On the question as to whether Allan Fernando Poe was a
Filipino citizen, the petitioner failed to adduce evidence to controvert respondent Poes
evidence attesting to the Filipino citizenship of his father. The petitioner initially
endeavored to corroborate the Spanish nationality of Lorenzo Pou to bear out the
Spanish nationality of Allan Fernando Poe. He then presented a certification by Director
Ricardo Manapat stating that the National Archives does not possess any record of a
certain LORENZO POE or LORENZO POU residing or entering the Philippines before
1907 in its Spanish Documents Section. [61] The authenticity of this piece of documentary
evidence, however, as earlier alluded to, has been put to serious question for being a
fabricated. Also debilitating to its probative value was Manapats own admission on
cross-examination that the National Archives does not have a complete record of all
persons who lived in the Philippines during the Spanish and American occupations.

I agree with the position of learned Rev. Joaquin G. Bernas, S.J., thus:
Naturalization can be individual naturalization or mass naturalization. For the purpose of
the present case, what is relevant is the mass naturalization achieved by the Treaty of
Paris jointly with the Philippine Bill of 1902. These two historical documents decreed
that subjects of Spain, whether Peninsulares or Indios, residing in the Philippines on the
eleventh day of April 1899 were deemed citizens of the Philippines unless
the Peninsulares, that is, natives of Spain, either abandoned Philippine residence within
a specified period or elected before a court of record to remain subjects of Spain also
within a specified period. Under these documents, therefore, those claiming citizenship
must prove that on the date indicated they were (1) subjects of Spain and (2) residents
of the Philippines. Conversely, those who challenge the citizenship
of Peninsulares must show either that such natives of Spain abandoned Philippine
residence or elected before a court of record to remain subjects of Spain.
I submit that these requirements apply to the grandfather of Fernando Poe, Jr., but I am
in no position to present evidence in either direction. [62]
The petitioner challenged the citizenship of Lorenzo Pou. He has not adduced evidence
to prove that Lorenzo Pou, while admittedly born a Spanish Subject, was not an
inhabitant of the Philippine Islands on December 10, 1898 when Spain ceded the
Philippine Islands to the U.S. by virtue of the Treaty of Paris. The petitioner has also
failed to proffer evidence to prove that Lorenzo Poe renounced his allegiance to the
crown of Spain and embraced Filipino citizenship by operation of law.[63] Neither has the
petitioner disproved Lorenzo Pous continued residence in the Philippines until his death
on September 11, 1954 in San Carlos, Pangasinan,[64] nor proffered evidence to prove
that Lorenzo Pou was a resident of any other state in the intervening period from April
11, 1899 until his death. Incidentally, in the Certification dated January 12, 2004 of
excerpts from the Register of Death in San Carlos, Pangasinan, [65] the citizenship of
Lorenzo Pou is stated to be Filipino. Again, there lies here in favor of respondent Poes
cause a prima facie proof of the Filipino citizenship of his grandfather as per entry in the
Civil Register of the latters Certificate of Death, a public record. Moreover, during his
lifetime, Lorenzo Poe comported himself as a Filipino. He voted in elections and did not
register as an alien. He even owned real properties in the Philippines. [66] Accordingly, by
Lorenzo Pous acquisition of Filipino citizenship under the pertinent provisions of the
Treaty of Paris and the relevant succeeding laws, Allan Fernando Poe also acquired the
Filipino citizenship of his father.

Apart from the foregoing, respondent Poe also presented supplementary evidence
corroborating Allan Fernando Poes Filipino citizenship as revealed by the following
facts which have not been in any way refuted by the petitioner:
1. Allan Fernando Poe obtained the degree of Bachelor of Science in Chemistry
from the U.P. in 1935 and the degree of Doctor of Dental Medicine from the
Philippine Dental College in 1942;

2. He later became a leading movie actor in the Philippines;

3. He was called to active duty to serve in the Philippine Army on December 24,
1942; inducted into the USAFE on December 25, 1941, fought in Bulacan, was in the
Death March, and reverted to inactive status with the rank of Captain on November
20, 1945.[67] On September 27, 1945, he was awarded the Gold Cross by direction
 of the President for meritorious services rendered while under furious and intense
enemy bombing and strafing;[68] and,

4. He died on October 23, 1951 and his death certificate also reflected his political
status as Filipino.[69]
As shown, Allan Fernando Poe comported himself as a Filipino citizen, was regarded as
such in the community where he lived, and was acknowledged to be a Filipino by the
Philippine government during his lifetime. The paternity of Allan Fernando Poe having
been admitted, and his Filipino citizenship having been established, respondent Poe
was correct in representing in his CoC that he was a natural-born Filipino citizen.

Accordingly, the petition in G.R. 161824 must be dismissed for failure to show that
respondent COMELEC committed grave abuse of discretion in dismissing the petition a
quo as the petitioner failed to establish that respondent Poe committed a material
misrepresentation, within the meaning of Section 78 of the Omnibus Election Code,
when he stated that he is a natural-born Filipino citizen in his Certificate of Candidacy.

One caveat. The resolution of the issue in the present petition will be without prejudice
to the filing by the proper party of the appropriate quo warranto petition before the
Court En Banc to assail respondent Poes eligibility in case he wins the elections and
there to litigate all the issues raised in as much detail as may be deemed necessary or
apropos.

WHEREFORE, I VOTE to
1. DISMISS the petitions in G.R. Nos. 161434 and 161634 for prematurity and want
of jurisdiction; and

2. DISMISS the petition in G.R. No. 161824 for failure to show that respondent
COMELEC committed grave abuse of discretion amounting to lack or excess of
jurisdiction in issuing the assailed Resolutions.

[1]
A.F.F.L. v. American Scale & Door, Co., 335 US 538, 557 (1949).

[2]
The provision reads in full:
Sec. 2. No person may be elected President unless he is a natural-born citizen of the
Philippines, a registered voter, able to read and write, at least forty years of age on the
day of the election, and a resident of the Philippines for at least ten years immediately
preceding such election.

[3]
Filed by Maria Jeanette C. Tecson and Felix B. Desiderio, Jr.

[4]
Filed by Zoilo Gomez.

[5]
Sec. 7. Each Commission [referring to the Civil Service Commission, Commission on
Audit and Commission on Elections] shall decide by a majority vote of all its Members
any case or matter brought before it within sixty days from the date of its submission for
decision or resolution. A case or matter is deemed submitted for decision or resolution
upon the filing of the last pleading, brief or memorandum required by the rules of the
Commission or by the Commission itself. Unless otherwise provided by this Constitution
or by law, any decision, order, or ruling of each Commission may be brought to the
Supreme Court on certiorari by the aggrieved party within thirty days from receipt of a
copy thereof (Underscoring supplied).

[6]
Exhibit B-2.

[7]
Exhibit A.

[8]
B. SPECIAL ACTIONS

Rule 23 Petition to Deny Due Course to or Cancel Certificate of Candidacy

SECTION 1. Grounds for Denial of Certificate of Candidacy. A petition to deny due

course to or cancel a certificate of candidacy for any elective office may be filed with the
Law Department of the Commission by any citizen of voting age or a duly registered
political party, organization, or coalition of political parties on the exclusive ground that
any material representation contained therein as required by law is false.

[9]
Annex A of the petition in G.R. No. 161824.

[10]
Section 3, Rule 23 of the COMELEC Rules of Procedure states:
Rule 23- Petition to Deny Due Course to or Cancel Certificates of Candidacy

Sec. 3. Summary Proceeding. This petition shall be heard summarily after due notice.

[11]
Annex B of the petition in G.R. No. 161824.

[12]
Exhibit 3.

[13]
Exhibit 21.

[14]
Annexes C & C-28 of the petition in G.R. No. 161824.

[15]
Annex D of the petition in G.R. No. 161824.

[16]
Supra.

[17]
Annex A of the petition in SPA No. 04-003.

[18]
Exhibit A.

[19]
Exhibits B & B-1.

[20]
Exhibit B-2.

[21]
Sec. 4. That all inhabitants of the Philippine Islands continuing to reside therein who
were Spanish subjects on the eleventh day of April, eighteen hundred and ninety-nine,
and then resided in the Philippine Islands, and their children born subsequent thereto,
shall be deemed and held to be citizens of the Philippine Islands and as such entitled to
the protection of the United States, except such as shall have elected to preserve their
allegiance to the Crown of Spain in accordance with the provisions of the treaty of
peace between the United States and Spain signed at Paris December tenth, eighteen
hundred and ninety-eight.

[22]
The provision reads in full:
Spanish subjects, natives of the Peninsula, residing in the territory over which Spain by
the present treaty relinquishes or cedes her sovereignty, may remain in such territory or
may remove therefrom, retaining in either event all their rights of property, including the
right to sell or dispose of such property or of its proceeds; and they shall also have the
right to carry on their industry, commerce, and professions, being subject in respect
thereof to such laws as are applicable to other foreigners. In case they remain in the
territory they may preserve their allegiance to the Crown of Spain by making, before a
court of record, within a year from the date of the exchange of ratifications of this treaty,
a declaration of their decision to preserve such allegiance; in default of which
declaration they shall be held to have renounced it and to have adopted the nationality
of the territory in which they may reside.

[23]
Resolution, dated January 23, 2004, of the COMELEC (First Division), p. 11.

[24]
Id. at 12.

[25]
Annexes E & F of the petition in G.R. No. 161824.

[26]
Section 2. The Commission on Elections shall exercise the following powers and
functions:

(1) Enforce and administer all laws and regulations relative to the conduct of an
election, plebiscite, initiative, referendum, and recall.

(3) Decide, except those involving the right to vote, all questions affecting elections,
including determination of the number and location of polling places, appointment of
election officials and inspectors, and registration of voters.

[27]
The pertinent proviso of the Resolution reads:

SECTION 1. Delegation of reception of evidence. -- The Commission hereby designates

its field officials who are members of the Philippine Bar to hear and receive evidence in
the following petitions:
a. Petition to deny due course or to cancel Certificate of Candidacy;

b. Petition to declare a nuisance candidate;

c. Petition to disqualify a candidate pursuant to Sec. 68 of the Omnibus Election

Code and disqualify a candidate for lack of qualifications or possessing same
grounds for disqualification; and

d. Petition to disqualify a candidate engaged in gunrunning, using and transporting

of firearms or in organizing special strike forces.

SECTION 3. Where to file petitions. -- The petitions shall be filed with the following
offices of the Commission:
a. For President, Vice-President, Senator and Party-List Organizations, with the
Clerk of the Commission, Commission on Elections in Manila;
[28]
Annex G of the petition in G.R. No. 161824.

[29]
Recabo, Jr. v. COMELEC, 308 SCRA 793 (1999).

[30]
Malinias v. COMELEC, 390 SCRA 480 (2002).

[31]
Arao v. COMELEC, 210 SCRA 290 (1992).

[32]
Salcedo II v. Commission on Elections, 312 SCRA 447 (1999).

[33]
Supra, pp. 1-6.

[34]
In Syquian v. People (171 SCRA 223 [1989]), the Court held that:

Conclusion of law is defined as a proposition not arrived at by any process of natural

reasoning from a fact or combination of facts stated but by the application of the artificial
rules of law to the facts pleaded [Levins v. Rovegno, 71 Cal. 273, 12 p. 161; Blacks Law
Dict., p. 362].
[35]
People v. Yanza, 107 Phil. 888 (1960).

[36]
Francisco, The Revised Rules of Court in the Philippines, Vol. VII, Part II, 1997 ed.,
pp. 5-6.

[37]
Di Baco v. Bendetto, 95 SE 601.

[38]
Francisco, The Revised Rules of Court in the Philippines, Vol. VII, Part II, 1997 ed.,
pp. 8-9.

[39]
Exhibit A.

[40]
Exhibit B-2.

[41]
Exhibit D.

[42]
Exhibit 3.

[43]
Exhibit 21.

[44]
Citing Morano v. Vivo & Paa v. Chan.

[45]
Exhibit 21.

[46]
The provision reads in full:

Article 121. Children shall be considered as legitimated by a subsequent marriage only

when they have been acknowledged by the parents before or after the celebration
thereof.

[47]
Article 123 of the Old Civil Code reads in full: In all cases the effects of legitimation
shall commence from the date of the marriage.

[48]
Section 2, Article IV of the 1987 Constitution.

[49]
Marquino v. Intermediate Appellate Court, 233 SCRA 348, 355 (1994).
[50]
ART. 177. Only children conceived and born outside of wedlock of parents who, at
the time of the conception of the former, were not disqualified by any impediment to
marry each other may be legitimated.

[51]
ART. 178. Legitimation shall take place by a subsequent valid marriage between
parents. The annulment of a voidable marriage shall not affect the legitimation.

[52]
ART. 179. Legitimated children shall enjoy the same rights as legitimate children.

[53]
ART. 180. The effects of legitimation shall retroact to the time of the childs birth.

[54]
Malkinson v. Agrava, 54 SCRA 66 (1973); Lo Beng Ha Ong v. Republic, 25 SCRA
247 (1968); Uggi Lindamand Therkelsen v. Republic, 12 SCRA 400 (1964).

[55]
Article 114 of the Old Civil Code; Article 264 of the New Civil Code; Article 174 of the
Family Code.

[56]
Guerrero v. COMELEC, 336 SCRA 458 (2000).

[57]
310 SCRA 546 (1999).

[58]
174 SCRA 566 (1989).

[59]
Weber Aetna Casualty & Surety Co., 406 US 164 (1972).

[60]
Retired Justice Vicente V. Mendoza, Rev. Joaquin G. Bernas, SJ, Dean Merlin M.
Magallona, and Prof. Ruben C. Balane.

[61]
Exhibit D.

[62]
Supra, p. 3.

[63]
Article IX of the Treaty of Paris, supra.

[64]
Exhibit 5.
[65]
Exhibit 5.

[66]
See certified true copy of OCT No. P-2247 and copies of Declaration of Real
Property for tax purposes. Exhibits 6 & submarkings.

[67]
See Certification dated January 13, 2004 by Lt. Col. Narciso S. Erna, Asst. Adjutant
General (Exhibit 8). See also Affidavit for Army Personnel dated December 22, 1947
signed by Fernando R. Poe (Exhibit 8-a).

[68]
See General Order No. 175, dated September 27, 1945 (Exhibit 9) and
Memorandum For: Lt. Col. Conrado B. Rigor, 0-1535, Office of Chief of Staff, AFP, dated
October 27, 1951 (Exhibit 10).

[69]
Exhibit 7.

SEPARATE OPINION

DAVIDE, JR. C.J.:

The procedural and factual antecedents of these consolidated cases are as follows:

On 9 January 2004, petitioner Victorino X. Fornier filed with public respondent

Commission on Elections (COMELEC) a petition to disqualify private respondent
Fernando Poe, Jr. (FPJ) and to deny due course to or cancel his certificate of candidacy
for the position of President in the forthcoming 10 May 2004 presidential elections. As a
ground therefore, he averred that FPJ committed falsity in a material representation in
his certificate of candidacy in declaring that he is a natural-born Filipino citizen when in
truth and in fact he is not, since he is the illegitimate son of Bessie Kelley, an American
citizen, and Allan Poe, a Spanish national. The case was docketed as COMELEC Case
SPA No. 04-003 and assigned to the COMELECs First Division.
At the hearing before the First Division of the COMELEC, petitioner Fornier offered
FPJs record of birth to prove that FPJ was born on 20 August 1939 to Bessie Kelley, an
American citizen, and Allan Poe, who was then married to Paulita Gomez. Upon the
other hand, FPJ tried to establish that his father was a Filipino citizen whose parents,
although Spanish nationals, were Filipino citizens. He adduced in evidence a copy of
the marriage contract of Allan Poe and Bessie Kelley, showing that they were married
on 16 September 1940 in Manila.

In its Resolution of 23 January 2004, the First Division of the COMELEC dismissed
COMELEC Case SPA No. 04-003 for lack of merit. It declared that COMELECs
jurisdiction is limited to all matters relating to election, returns and qualifications of all
elective regional, provincial and city officials, but not those of national officials like the
President. It has, however, jurisdiction to pass upon the issue of citizenship of national
officials under Section 78 of the Omnibus Election Code on petitions to deny due course
or cancel certificates of candidacy on the ground that any material representation
contained therein is false. It found that the evidence adduced by petitioner Fornier is not
substantial, and that FPJ did not commit any falsehood in material representation when
he stated in his certificate of candidacy that he is a natural-born Filipino citizen.

His motion for reconsideration filed before the COMELEC en banc having been denied,
petitioner Fornier filed a petition with this Court, which was docketed as G.R. No.
161824.

Meanwhile, petitioners Maria Jeanette C. Tecson and Felix B. Desiderio, Jr. came to this
Court via a special civil action for certiorari under Rule 65 of the Rules of Court,
docketed as G.R. No. 161434, to challenge the jurisdiction of the COMELEC over the
issue of the citizenship of FPJ. They assert that only this Court has jurisdiction over the
issue in light of the last paragraph of Section 4 of Article VII of the Constitution, which
provides:
The Supreme Court, sitting en banc, shall be the sole judge of all contests relating to
the election returns, and qualifications of the President or Vice-President, and may
promulgate its rules for the purpose.
On 29 January 2004 petitioner Velez filed a similar petition, which was docketed as G.R.
No. 161634.
The core issues in these consolidated cases, as defined by the Court during the oral
argument, are as follows:
(1) Whether the COMELEC has jurisdiction over petitions to deny due course to or
cancel certificates of candidacy of Presidential candidates;

(2) Whether the Supreme Court has jurisdiction over the petitions of (a) Tecson, et al.,
(b) Velez, and (c) Fornier; and

(3) Whether respondent FPJ is a Filipino citizen, and if so, whether he is a natural-born
Filipino citizen.
These consolidated petitions must be dismissed.

Both the petitions of Tecson and Velez invoke the jurisdiction of this Court as provided
for in the last paragraph of Section 4 of Article VII of the Constitution, and raise the
issue of the ineligibility of a candidate for President on the ground that he is not a
natural-born citizen of the Philippines. The actions contemplated in the said provision of
the Constitution are post-election remedies, namely, regular election contests and quo
warranto. The petitioner should have, instead, resorted to pre-election remedies, such
as those prescribed in Section 68 (Disqualifications), in relation to Section 72; Section
69 (Nuisance candidates); and Section 78 (Petition to deny course to or cancel a
certificate of candidacy), in relation to Section 74, of the Omnibus Election Code, which
are implemented in Rules 23, 24 and 25 of the COMELEC Rules of Procedure. These
pre-election remedies or actions do not, however, fall within the original jurisdiction of
this Court.

Under the Omnibus Election Code and the COMELEC Rules of Procedure, the
COMELEC has the original jurisdiction to determine in an appropriate proceeding
whether a candidate for an elective office is eligible for the office for which he filed his
certificate of candidacy or is disqualified to be a candidate or to continue such
candidacy because of any of the recognized grounds for disqualification. Its jurisdiction
over COMELEC SPA No. 04-003 is, therefore, beyond question.

Upon the other hand, this Court has jurisdiction over Forniers petition (G.R. No.
161824) under Section 7 of Article IX-A of the Constitution, which provides:
Section 7. Each Commission shall decide by a majority vote of all its Members any case
or matter brought before it within sixty days from the date of its submission for decision
or resolution. A case or matter is deemed submitted for decision or resolution upon the
filing of the last pleading, brief, or memorandum required by the rules of the
Commission or by the Commission itself. Unless otherwise provided by this Constitution
or by law, any decision, order, or ruling of each Commission may be brought to the
Supreme Court on certiorari by the aggrieved party within thirty days from receipt of a
copy thereof.
This Court can also take cognizance of the issue of whether the COMELEC committed
grave abuse of discretion amounting to lack or excess of jurisdiction in issuing the
challenged resolution in COMELEC SPA No. 04-003 by virtue of Section 1 of Article VIII
of the Constitution, which reads as follows:
Section 1. The judicial power shall be vested in one Supreme Court and in such lower
courts as may be established by law.

Judicial power includes the duty of the courts of justice to settle actual controversies
involving rights which are legally demandable and enforceable, and to determine
whether or not there has been a grave abuse of discretion amounting to lack or excess
of jurisdiction on the part of nay branch or instrumentality of the Government.
On the issue of whether private respondent FPJ is a natural-born Filipino citizen, the
following facts have been established by a weighty preponderance of evidence either in
the pleadings and the documents attached thereto or from the admissions of the parties,
through their counsels, during the oral arguments:
1. FPJ was born on 20 August 1939 in Manila, Philippines.

2. FPJ was born to Allan Poe and Bessie Kelley.

3. Bessie Kelley and Allan Poe were married on 16 September 1940.

4. Allan Poe was a Filipino because his father, Lorenzo Poe, albeit a Spanish
subject, was not shown to have declared his allegiance to Spain by virtue of the
Treaty of Paris and the Philippine Bill of 1902.
From the foregoing it is clear that respondent FPJ was born before the marriage of his
parents. Thus, pursuant to the Civil Code then in force, he could either be (a) a natural
child if both his parents had no legal impediments to marry each other; or (b) an
illegitimate child if, indeed, Allan Poe was married to another woman who was still alive
at the time FPJ was born.

Petitioner Fornier never alleged that Allan Poe was not the father of FPJ. By revolving
his case around the illegitimacy of FPJ, Fornier effectively conceded paternity or filiation
as a non-issue. For purposes of the citizenship of an illegitimate child whose father is a
Filipino and whose mother is an alien, proof of paternity or filiation is enough for the
child to follow the citizenship of his putative father, as advanced by Fr. Joaquin Bernas,
one of theamici curiae. Since paternity or filiation is in fact admitted by petitioner Fornier,
the COMELEC committed no grave abuse of discretion in holding that FPJ is a Filipino
citizen, pursuant to paragraph 3 of Section 1 of Article IV of the 1935 Constitution, which
reads:
Section 1. The following are citizens of the Philippines:

(3) Those whose fathers are citizens of the Philippines.
I agree with the amici curiae that this provision makes no distinction between legitimate
and illegitimate children of Filipino fathers. It is enough that filiation is established or that
the child is acknowledged or recognized by the father.

SEPARATE OPINION

PUNO, J.:

Why bastard? Wherefore

When my dimensions are well compact,
My mind as generous, and my shape as true
As honest madams issue?
Why brand they us
With base? With baseness
Bastardy? Base, base?
Who, in the lusty stealth of nature take
More composition and fierce quality
Than doth, within a dull stale, tired bed,
Got tween sleep and wake?
well then,
Legitimate Edgar, I must have your land:
Our fathers love is to the bastard Edmund.
As to the legitimate: fine word legitimate!
Well my legitimate, if this letter speed,
And my invention thrive, Edmund the base
Shall top the legitimate. I grow; I prosper
Now, gods, stand up for bastards!

(Edmund, Bastard Son to Gloster,

King Lear, Act I, Scene II)

I.

PROLOGUE

The petitions at bar seek the disqualification of respondent Fernando Poe, Jr. from
running for the Presidency in the May 2004 national elections. But the issues posed by
the petitions at bar transcend the person of respondent Poe. These issues affect some
of our most deeply held values in democracy - - - the protection of the exercise of
political rights, such as the right to run for public office against irrelevant impediments,
the levelling of the political playing field, the disapprobation of political loyalty in our
temples of justice, elimination of all invidious discrimination against non-marital children,
and the continued enthronement of the sovereignty of the people in the election of our
leaders. The petitions at bar concern all these democratic values. It is the people on the
line. It is us.

II.

THE FACTS AND THE PROCEEDINGS

Let us first look at the facts for they are staring at us. On December 31, 2003,
respondent Ronald Allan Kelley Poe, also known as Fernando Poe, Jr. filed with the
Commission on Elections his Certificate of Candidacy for President in the May 10, 2004
elections. He made the following declarations under oath in his certificate of candidacy:

CERTIFICATE OF CANDIDACY FOR PRESIDENT

I hereby announce my candidacy for the position of PRESIDENT, Republic of the
Philippines, in the May 10, 2004 elections; and after having been sworn in accordance
with law, hereby state the following:
1. FULL NAME: POE, FERNANDO, JR./RONALD ALLAN KELLEY

2. ONE NICKNAME OR STAGE NAME (by which I am generally or popularly

known): FPJ

3. OFFICIALLY NOMINATED BY: KNP

4. DATE OF BIRTH: 20 August 1939 PLACE OF BIRTH: MANILA SEX: MALE

5. CIVIL STATUS: M IF MARRIED, FULL NAME OF SPOUSE: JESUSA SONORA

6. I AM A NATURAL BORN FILIPINO CITIZEN

7. PROFESSION OR OCCUPATION: MOVIE PRODUCER/ACTOR

8. RESIDENCE: 23 LINCOLN ST., GREENHILLS, SAN JUAN, METRO MANILA

9. RESIDENCE IN THE PHILIPPINES BEFORE MAY 10, 2004: 64 Years

and 8 Months

10. I AM A REGISTERED VOTER OF PRECINCT NO. 227 A,

BARANGAY GREENHILLS CITY/MUNICIPALITY OFSAN JUAN, PROVINCE OF
METRO MANILA

11. I AM NOT A PERMANENT RESIDENT OF, OR MIGRANT TO, A FOREIGN

COUNTRY.

12. I AM ELIGIBLE for the office I seek to be elected. I will support and defend the
Constitution of the Philippines, and will maintain true faith and allegiance thereto; that
I will obey the laws, legal orders and decrees promulgated by the duly constituted
authorities of the Republic of the Philippines; and that I impose this obligation upon
myself voluntarily, without mental reservation or purpose of evasion, I hereby certify
that the facts stated herein are true and correct of my own personal knowledge.
31 December 2003

(thumbmarked) (sgd) RONALD ALLAN K. POE

SUBSCRIBED AND SWORN to before me this 31st day of Dec. 2003 at Manila, affiant
exhibiting to me his/her Community Tax Certificate No. 11835585 issued on 8 Jan. 2003
at San Juan, M. Mla.

Doc. No. 92 (sgd) ATTY. KEVIN NARCE B. VIVERO

Page No. 20 NOTARY PUBLIC
Book No. III until December 31, 2003
Series of 2003 PTR NO. 881104, JAN. 09, 2003, MANILA
On January 9, 2004, petitioner in G.R. No. 161824, Victorino X. Fornier, filed with the
COMELEC a Petition for Disqualification of Presidential Candidate Ronald Allan Kelley
Poe, also known as Fernando Poe, Jr. Fornier alleged that respondent Poe is not a
citizen of the Philippines, much less a natural-born citizen, and as such, lacks one of the
essential qualifications for the position of President of the Republic of the Philippines.
Fornier presented a photocopy of the marriage contract of Allan Fernando Poe,
respondent Poes father, and a certain Paulita Gomez which appears to have been
executed on July 5, 1936.[1] Said marriage contract indicates that Allan Fernando Poes
nationality was Espaol, and that his parents, Lorenzo Poe and Marta Reyes, were
both Spanish citizens. The copy presented by Fornier was certified by Ricardo Manapat,
Chief of the Records Management and Archives Office. [2] Based on said document,
Fornier alleged that respondent Poe could not have acquired Filipino citizenship from
his father. Fornier added that even if respondent Poes father were a Filipino citizen, he
still could not have validly acquired Filipino citizenship from the former because the prior
marriage of Allan Fernando Poe and Paulita Gomez renders the marriage of his
parents, Allan Fernando Poe and Bessie Kelley, void, thus making him an illegitimate
child. He contended that an illegitimate child follows the citizenship of the legally known
parent which is the mother. Respondent Poes mother, Bessie Kelley, was admittedly an
American citizen.[3] In addition to the copy of the marriage contract between Allan
Fernando Poe and Paulita Gomez, petitioner Fornier also presented a photocopy of the
affidavit of Paulita Gomez stating that she filed a bigamy case against Allan Fernando
Poe.[4] Petitioner prayed that respondent Poe be disqualified from running for the
position of President of the Republic of the Philippines and that his Certificate of
Candidacy be denied due course or cancelled.

In his Answer, respondent Poe asserted that he is a Filipino citizen and denied Forniers
allegation that his father and his grandparents were Spanish subjects. He likewise
denied the alleged prior marriage between Allan Fernando Poe and one Paulita Gomez.
He maintained that his father, Allan Fernando Poe, and grandfather, Lorenzo Pou, were
Filipino citizens. He alleged that since the Constitution provides that those whose
fathers are citizens of the Philippines are Filipinos, he is therefore a Filipino citizen.
Respondent presented a certification from the Office of the Civil Registrar of San Carlos
City, Pangasinan stating the contents of page 32 of Book 4 of the Register of Death of
San Carlos City which show, among others, that Lorenzo Pou died a Filipino citizen.
[5]
Respondent alleged that Lorenzo Pou was born a Spanish subject; he was an
inhabitant of the Philippine Islands when Spain ceded the Philippine Islands to the
United States by virtue of the Treaty of Paris on December 10, 1898; and he became a
citizen of the Philippines under the provisions of the Philippine Bill of 1902 and the
Jones Law. Respondent further averred that in his lifetime, Lorenzo Pou comported
himself a Philippine citizen - - - he voted in elections; he did not register as an alien; and
he owned real properties.[6] Respondent Poe also presented the death certificate of his
father, Allan Fernando Poe, which states that he died as Filipino. [7]Respondent further
alleged that his father was born in the Philippines in 1916, before the 1935 Constitution
took effect, hence, a Filipino by reason of his birthplace. He stated that Allan Fernando
Poe acted as a Filipino during his lifetime. He was called to active duty to serve in the
Philippine Army; he was inducted into the USAFFE; he fought in Bulacan and was in the
Death March; and after the war, he reverted to inactive status with the rank of Captain;
[8]
he was awarded the Gold Cross[9] and served the guerilla movement during the
Japanese occupation. Respondent Poe also presented his own Certificate of
Birth[10] which indicates that he is a Filipino citizen and that his father, Allan F. Poe, was
Filipino. Like his father and grandfather, respondent Poe represented and conducted
himself as Filipino from birth. He is a registered voter and has voted in every election;
he holds a Philippine passport;[11] he owns real properties which only citizens of this
country may do;[12] he represented himself as a citizen of the Philippines in all contracts
or transactions. Respondent dismissed as a worthless piece of paper the alleged
marriage contract between Allan Fernando Poe and Paulita Gomez for the following
reasons: (1) it is only a xerox copy which is not even represented to be a xerox copy of
an original document; (2) no averment is made whether an original exists and where it is
located; (3) assuming an original exists, its genuineness and due execution may not be
assumed and no proof is offered; and (4) it is not evidence, much less persuasive
evidence of the citizenship of the parties. Respondent further presented the sworn
statement of Ms. Ruby Kelley Mangahas, a surviving sister of Bessie Kelley belying,
among others, petitioners claim of the prior marriage between Allan Fenando Poe and
Paulita Gomez.[13]

Meanwhile, Maria Jeanette C. Tecson and Felix B. Desiderio, Jr., as well as Zoilo
Antonio Velez, filed their separate petitions with this Court, also seeking the
disqualification of respondent Poe from the presidential elections on the ground that he
is not a natural-born citizen of the Philippines. Petitioners Tecson and
Desiderio[14]contended that respondent Poe is an illegitimate child and therefore follows
the citizenship of his mother. Petitioners cite the marriage certificate of Poes parents
which shows that they were married in 1940, while Poe was born in 1939. They contend
that it does not appear that Poe has been legitimated by the subsequent marriage of his
parents as he had not been acknowledged by his father. The same arguments were
advanced by petitioner Velez.[15]

The Senate also conducted two public hearings on January 21, 2004 and February 2,
2004 on the authenticity of the following documents submitted by petitioner Fornier to
the COMELEC: (1) the alleged birth certificate of Allan Fernando Poe; (2) the alleged
marriage certificate between Allan Fernando Poe and Paulita Gomez; and (3) the
alleged bigamy charge filed by Paulita Gomez against Allan Fernando Poe. The Senate
issued subpoena duces tecum and ad testificandum to compel the appearance of
witnesses and the production of documents, equipment and other materials relevant to
the investigation. Witnesses from the Records Management and Archives Office came
forward and testified that they have been unwitting instruments in the fabrication of the
documents in question. The Senate Committee Report No. 517, signed by Senators
Edgardo Angara, Teresa Aquino-Oreta, Rodolfo Biazon, Loren Legarda, Aquilino
Pimentel, Sergio Osmea, Juan Flavier and Vicente C. Sotto III, recommended the
criminal prosecution of Director Ricardo Manapat for falsification of public documents,
perjury, incriminatory machination, theft, infidelity in the custody of document, violation
of the Anti-Graft and Corrupt Practices Act and obstruction of justice. The Report was
submitted by the respondent to the COMELEC en banc.

After hearing the parties, the First Division of the COMELEC, on January 23, 2004,
issued a Resolution dismissing Forniers petition for disqualification for lack of merit.
The First Division stated that its jurisdiction is limited to all contests relating to elections,
returns and qualifications of all elective regional, provincial and city officials. It, however,
has authority to pass upon the issue of citizenship of national officials in actions under
Section 78 of the Omnibus Election Code, that is, in Petitions to Deny Due Course or
Cancel a Certificate of Candidacy on the ground that any material representation
contained therein is false. Thus, the First Division of the COMELEC proceeded to
assess the evidence presented by the parties to resolve the issue of whether
respondent Poe is a natural-born Filipino citizen. The COMELEC First Division
concluded: (c)onsidering that the evidence presented by the petitioner is not
substantial, we declare that the respondent did not commit any material
misrepresentation when he stated in his Certificate of Candidacy that he is a natural-
born Filipino citizen.

Petitioner Fornier moved to reconsider the Resolution of the First Division.

On February 6, 2004, the Commission En Banc affirmed the Resolution of the First
Division.

Thus, petitioner Fornier filed a Petition for Certiorari with this Court assailing the
Resolution of the Commission En Banc. He cited the following grounds for the petition:
1. Respondent Comelec committed grave and reversible error of law and even
acted with grave abuse of discretion tantamount to lack or excess of jurisdiction when
it arbitrarily and whimsically ruled, in violation of the Constitution, existing laws,
jurisprudence and its own rules and issuance, that it had no jurisdiction over the
disqualification case below grounded on the lack of essential qualification of
respondent FPJ and on his disqualification to be elected President of the Republic of
the Philippines.

2. Respondent Comelec committed grave and reversible error of law, and even
acted with grave abuse of discretion tantamount to lack or excess of jurisdiction, in
concluding that under the law Lorenzo Pou became a citizen of the Philippine
Islands.

3. Respondent Comelec committed grave and reversible error of law, and even
acted with grave abuse of discretion tantamount to lack or excess of jurisdiction, in
concluding that, under law and Constitution, Allan F. Poe/Allan Fernando Poe/Allan
R. Pou/Fernando R. Pou became a citizen of the Philippine Islands or of the
Philippines.

4. Respondent Comelec committed grave and reversible error of law, and even
acted with grave abuse of discretion tantamount to lack or excess of jurisdiction, in
 concluding that, under the 1935 Constitution, respondent FPJ is a natural-born
Filipino citizen despite his illegitimacy.

5. Assuming arguendo that respondent Comelecs jurisdiction is limited to denying

due course or cancelling certificate of candidacy on the ground of material
misrepresentation, respondent Comelec committed grave and reversible error of law,
and even acted with grave abuse of discretion tantamount to lack or excess of
jurisdiction, in concluding that respondent FPJs certificate of candidacy does not
contain a material misrepresentation or falsity as to his being a natural-born Filipino
citizen.

6. Respondent Comelec committed grave and reversible error of law, and even
acted with grave abuse of discretion tantamount to lack or excess of jurisdiction, in
concluding that respondent FPJ should not be declared as disqualified to run for
President in the May 2004 elections, and in consequently dismissing the petition of
petitioner Fornier.

7. In any event, regardless of whether or not respondent Comelec has jurisdiction to

rule on the disqualification case below which is grounded on the fact that respondent
FPJ is not a natural-born Filipino citizen and thus lacks an essential qualification, the
Honorable Court can take cognizance of said issue and rule on the qualifications of
respondent FPJ to run for the position of President for the Republic of the
Philippines.
III.

THE ISSUES

On February 23, 2004, the Court held a session to discuss the cases at bar. The issues
discussed were the following: (1) Whether the Court has jurisdiction over the Tecson
and Valdez petitions and the Fornier petition; (2) Assuming the Court has jurisdiction,
whether the COMELEC en banc gravely abused its discretion in dismissing the Fornier
petition on the ground that Fornier failed to prove that respondent Poe deliberately
misrepresented himself as a natural-born Filipino; (3) Assuming there is no grave abuse
of discretion, whether the issue of the citizenship of respondent Poe should now be
resolved; and (4) Assuming the issue will now be resolved, whether the Court should
resolve it on the basis of the evidence on record or whether it should be remanded to
the COMELEC to enable the parties to adduce further evidence on the acknowledgment
made by Allan F. Poe of respondent Poe as his son.

These issues shall be discussed in seriatim.

IV.

DISCUSSION

A.

JURISDICTION

The Court is unanimous on the issue of jurisdiction. It has no jurisdiction on the Tecson
and Valdez petitions. Petitioners cannot invoke Article VII, Section 4, par. 7 of the
Constitution which provides:
The Supreme Court, sitting en banc shall be the sole judge of all contests relating to the
election, returns and qualifications of the President or Vice President and may
promulgate its rules for the purpose.
The word contest in the provision means that the jurisdiction of this Court can only be
invoked after the election and proclamation of a President or Vice President. There can
be no contest before a winner is proclaimed.

On the other hand, the Court is also unanimous in its view that it has jurisdiction over
the Fornier petition. The COMELEC treated the Fornier petition as a petition to deny
due course or to cancel a certificate of candidacy under Section 78 of B.P. Blg. 881
which provides:
B.P. Blg. 881, Section 78. Petition to deny due course or cancel a certificate of
candidacy. A verified petition seeking to deny due course or to cancel a certificate of
candidacy may be filed by any person exclusively on the ground that any material
representation contained therein as required under Section 74 hereof is false. The
petition may be filed at any time not later than twenty-five days from the time of the filing
of the certificate of candidacy and shall be decided, after due notice and hearing, not
later than fifteen days before the election.
Article IX (C), Section 7 of the 1987 Constitution provides:
Unless otherwise provided by this Constitution or by law, any decision, order, or ruling of
each Commission may be brought to the Supreme Court on certiorari by the aggrieved
party within thirty days from receipt of a copy thereof.
The Fornier petition is before this Court on review under Rule 64 in relation to Rule 65
of the Rules of Court. The jurisdiction of this Court is therefore unassailable.
B.

THE COMELEC DID NOT COMMIT GRAVE ABUSE OF DISCRETION WHEN IT

RULED THAT PETITIONER FAILED TO PROVE BY SUBSTANTIAL EVIDENCE THE
CHARGE THAT RESPONDENT POE DELIBERATELY MISREPRESENTED THAT HE
IS A NATURAL- BORN FILIPINO CITIZEN IN HIS CERTIFICATE OF CANDIDACY.
Certiorari power of this Court to
review COMELEC decisions is a
limited power.

We start with the elementary proposition that the certiorari power of this Court to review
decisions of the COMELEC is a limited one. This Court can only reverse or change the
COMELEC decision on the ground that the COMELEC committed grave abuse of
discretion. Grave abuse of discretion has a well defined meaning in our jurisprudence. It
means despotic, arbitrary or capricious. A decision supported by substantial evidence is
not despotic, arbitrary or capricious. Neither is a decision interpreting a novel or difficult
question of law with logical reasons. A mere disagreement with COMELEC on the
weight it gave to certain evidence or on its interpretation of some difficult provisions of
law is no basis to strike down the COMELEC decision as despotic, arbitrary or
whimsical. More so when the case involves election law where the expertise of
COMELEC ought to be conceded.

The ruling of the COMELEC

denying the petition to disqualify
respondent Poe is based on
substantial evidence, hence is not
despotic, whimsical or capricious.

To stress again, the petition of Fornier was treated by the COMELEC as a petition to
deny due course or cancel the certificate of candidacy of respondent Poe on the ground
of material misrepresentation under B.P. Blg. 881, Section 78. Allegedly, respondent
Poe misrepresented himself as a natural-born Filipino citizen. In Romualdez-Marcos
vs. COMELEC[16] we held that the misrepresentation must not only be material but also
deliberate and willfull.

Petitioner, therefore, has the burden to prove by substantial evidence the following
facts: (1) that respondent Poe made a misrepresentation in his Certificate of Candidacy;
(2) that the misrepresentation is material to the position of which he is a candidate; and
(3) that the material misrepresentation was made deliberately and willfully. Let us now
examine the evidence presented by petitioner Fornier to determine whether he was able
to discharge the burden of evidence.

Analysis of Petitioners
Evidence

The first evidence of petitioner is Exhibit A which is the Certificate of Birth of

respondent Poe. This evidence proved the date of birth of respondent Poe, i.e., August
20, 1939. It is no proof that he is not a natural-born citizen. Nor is it proof that
respondent Poe knew that he was not a natural-born citizen and deliberately
represented himself as such in his Certificate of Candidacy.

The second evidence of petitioner are Exhibits B, B-1 and B-2. Exhibits B and
B-1 is the Sworn Statement of Paulita Gomez charging Allan F. Poe with bigamy.
Exhibit B-2 is the alleged marriage contract between Allan F. Poe and Paulita Gomez.
Exhibits B, B-1 and B-2 were presented thru Director Manapat. These exhibits do
not prove anything. They are out and out fabrications. The sworn statements of Mr.
Remmel G. Talabis, Mr. Emman A. Llamora, Ms. Vicelyn G. Tarin, all employees of the
Records Management and Archives Office, as well as the sworn statements of Mr.
William Duff and Mr. Victorino Floro III of Florofoto proved the fabrications of Director
Manapat.

The sworn statement of Remmel Talabis states:

REPUBLIKA NG PILIPINAS)
SIYUDAD NG MAYNILA ) s.s.

SINUMPAANG SALAYSAY
Ako Si Remmel G. Talabis, nasa wastong gulang, walang asawa, naninirahan sa 149 P.
Gomez St., Bagong Barrio, Caloocan City, pagkatapos manumpa ay nagsasabing:

1. Ako ay kasalukuyang naninilbihan sa Pambansang Sinupan bilang Store Keeper I

sa Supplies Section. Inilipat ako ni Dir. Ricardo Manapat sa aming Computer
Section dahil sa ako ay nagtapos ng Computer Technology.

2. Noong magkakatapusan ng buwan ng Nobyembre 2003 ay ipinatawag ako ni Dir.

Manapat sa kanyang tanggapan at ako ay inutusang mag-scan ng mga birth
record sa Archives, Paco. Nakahanda na raw ang mga ito at ii-scan na lang. Ang
mga birth record na ito ay mula sa mga taong 1936 hanggang 1941.

Matapos kong i-scan ang mga birth record at makabalik sa opisina ay inutusan
naman niya ako na linisin ang mga ito at alisin ang mga datos na nakalagay dito at
pagkatapos ay gawan ko raw ito ng black and white copy. Ginawa ko ito sa Adobe
Photoshop. Nagpa-print din siya ng mga kopya nito.

3. Muli na naman akong ipinatawag ni Dir. Manapat noong kaagahan ng buwan ng

Disyembre 2003 at ako ay inutusan na naman niya na mag-scan ng birth record sa
Archives, Paco. Ayon sa kanya ang kailangan niya raw na record ay para sa taon
ng 1915 o 1916 pero ang pinakamaagang kopya lang ng birth record na nasa
Archives, Paco ay para sa taon ng 1928 lang. Kaya yun na lang ang ipina-scan
niya sa akin.

3.1 Nang matapos kong i-scan ang birth record ay inutusan niya ako uli na linisin
ang birth record, alisin ang mga datos nito at gawing black and white copy.
Inutusan din niya ako na dagdagan ng entrada ang black and white na kopya
ng 1928 birth record ng in-scan ko, para sa province at municipality. Pina-
alis din niya ang numero 2 sa lahat ng 192_ na entrada. Nagpa-print siya
ng kopya nito.

3.2 Pinahanap din ako ni Dir. Manapat ng katulad na font na ginamit sa 1928
birth record na in-scan ko pero hindi ako makakita kaya nag-cut and paste
na lang ako ng mga letra mula din sa nasabing dokumento at ipinagdugtong-
dugtong ko na lang para mabuo ang mga salitang isisingit.

4. Bago mag-pasko ay ipinatawag niya akong muli sa kanyang tanggapan. Inutusan

niya ako na kopyahin ang isang faxed copy ng marriage certificate at gawan ito ng
form. Naumpisahan kong gawin ang porma ngunit hindi ko natapos dahil sumapit
na ang takdang araw ng aking forced leave na na-file. Nang mga panahon ding
iyon ay inuutusan na rin niya ako na mag scan ng mga pirma mula sa ibat-ibang
documento at linisin ang nga iyon.

4.1 Tinawagan ko si Emman Llamera upang pakiusapan na siya na lang ang

tumapos duon sa iniuutos sa akin ni Dir. Manapat. Pumayag naman siya dahil
 wala ng ibang gagawa noon.

5. Nakaraan ang ilang araw ay nakatanggap naman ako ng tawag mula kay Dir.
Manapat na nagtatanong kung paano lilinisin ang pirma na ilalagay sa MS Word
document. Sinabi ko na sa Adobe Photoshop ang gamitin para malinis ang mga
dumi.

6. Matapos iyon ay wala na kaming komunikasyon hanggang sa akoy pumasok ng

Enero 5, 2004. Ipinatawag niya ako muli sa kanyang tanggapan at inutusan na i-
print ang isang Marriage Contract. Ito yung form ng Marriage Contract na
pinagawa niya sa akin noong Disyembre.

6.1 Nang aking suriin ang documento, nakita ko na meron nang mga entrada
tulad ng pangalan, pirma, selyo, atbp. Pero gusto ni Dir. Manapat na paliitin
ito. Sinabi ko sa kanya na mahirap gawin yun sa isang Word Document.

6.2 Iminungkahi ko sa kanya na kung gusto nyang paliitin ang marriage contract
ay mas maigi na i-print ito ng actual size at pagkatapos ay i-scan muli at
pagkatapos ay i-paste sa MS Word para madali tong i-resize. Pumayag
naman siya at ito nga ang aming ginawa. Ayon sa kanya ay gawin namin
itong katulad lamang ng laki ng isang lumang litrato sa Archives Library.

6.3 Pinalagyan din niya ng parang wavy line na border ang ipina-print nyang
marriage contract sa akin. Pagkatapos ay pinadagdagan na naman niya ito
ng isa pang border para raw magmukhang naka ipit. Pina-print niya ito ulit sa
akin gamit ang isang newsprint na papel.

7. Ang sumunod naman nyang ipinagawa sa akin ay ang paglalagay naman ng pirma
ng isang Paulita Gomez sa gilid ng isang dokumento at pirma ng isang
nagngangalang Cordero sa ikalawang pahina ng pareho ring dokumento na
nakasaad sa wikang espanyol. Dati ng may nakalagay na pirma ni Paulita
Gomez sa ibabaw ng pangalan nito sa ikalawang pahina ng documento. Nang
matapos ko ang pinagagawa niya, ipina-print niya sa akin ang nasabing
dokumento gamit ang isang newsprint na papel.

8. Makaraan pa ng ilang araw, pinatawag akong muli ni Dir. Manapat upang ipa-scan
naman ang isang birth record na may pangalan ng isang Allan Fernando Poe.
Inutusan po ako na mag-print ng isang negative copy at isang positive copy.

8.1 Nang makita ko ang Xerox copy ng minarkahang Exhibit C sa kasong

disqualification sa COMELEC ay katulad ito ng ipina scan at ipinalinis na birth
record sa akin ni Dir. Manapat noong Disyembre 2003.

9. Nito nga pong nakaraang lingo ay inutusan na naman ako ni Dir. Manapat na i-
scan uli yung mga dokumento na ipina print nya sa akin noon (marriage contract at
dokumento ni Paulita Gomez). Napansin ko na sinunog ang mga gilid ng
dokumento. Nagpa print po siya uli ng isang negative copy at isang positive copy
 ng mga nabanggit na dokumento.

10. Sa lahat po ng mga iniutos at ipinagawa ni Dir. Manapat sa akin ay hindi po niya ni
minsan binanggit kung ano at para saan gagamitin ang mga ipinagagawa niya sa
akin.

(sgd) Remmel Talabis

Nagsalaysay

Subscribed and sworn to before me, at Quezon City this 21 st day of January, 2004,
Affiant exhibiting to me his Community Tax No. 15325884, issued on January 21, 2004
at Valenzuela City.

NOTARY PUBLIC

(sgd) ATTY. KENNETH S.

TAMPAL
Notary Public
Until Dec. 31, 2005
PTR No. 50648646
Quezon City

Doc. No. 673;

Page No. 135;
Book No. XIII;
Series of 2004.

The sworn statement of Emman A. Llamera states:

REPUBLIKA NG PILIPINAS)
SIYUDAD NG MAYNILA )s.s.

SINUMPAANG SALAYSAY

Ako si Emman A. Llamera, nasa wastong gulang, walang asawa, naninirahan sa 825
Rosarito Street, Sampaloc, Manila, pagkatapos manumpa ay nagsasabing:
1. Ako ay kasalukuyang naninilbihan sa Pambansang Sinupan bilang isang
contractual, na may alam sa lahat ng gawain pang computer, at direktang
nagrereport sa opisina ni Dir. Ricardo Manapat. Ako po nagtatapos ng computer
science at isinabay ang kursong computer technician, at nagpatuloy sa pag-aral
bilang computer engineer hanggang sa ikaapat na taon.

2. Noong bago magkatapusan ng Disyembre ng taong nagdaan, may ipinasa si

Remmel Talabis sa akin na trabaho na ipinapagawa sa kanya ni Dir. Manapat.
Nakisuyo si Remmel sa akin na ipagpatuloy ko yong naumpisahan niyang trabaho
at ibigay na lang kay Mr. Manapat pag natapos ko.

3. Nang humarap ako sa computer ni Dir. Manapat, nakita ko sa unang pagkakataon

ang isang blankong porma ng Marriage Contract. Pagkaraan ng ilang minuto ay
kinausap ako ni Dir. Manapat at may pinakita at ibinigay sa akin na kopya ng
Marriage Contract na may lamang datos at entrada na gawa sa sulat kamay niya.
Ang sabi niya, kopyahin ko daw ang mga datos at entrada at ilipat ang mga ito sa
blankong porma ng Marriage Certificate na nakasalang sa computer.

3.1 Inumpisahan ko na ipinil-up sa blankong porma ng Marriage Contract na

nasa computer ang mga pangalan nina Allan Fernando Poe at Paulita Gomez
at iba pang impormasyon na nakalagay sa papel na binigay ni Dir. Manapat.

3.2 Nang matapos na naming makompleto ang mga datos at entrada sa

Marriage Contract ay dahan-dahan ko namang in-insert ang tatlong pirma na
ang natatandaan ko po lamang ay ang pirma ng isang nagngangalang Mata,
na nakalagay sa gitna sa bandang baba ng dokumento. Nang matapos kong
mailagay lahat ang tatlong pirma ay ipinapaprint na ni Dir. Mata. Di nagtagal,
pinauwi na niya ako dakong mag-aalas singko na.

3.3 Wala pang nakalagay na pirma sa pangalan nina Allan Fernando Poe at
Paulita Gomez.

3.4 Nakabantay sa tabi ko si Dir. Manapat habang nagtratrabaho ako, mula

umpisa hanggang matapos ko ang pinagawa niya.

4. Sa lahat po ng mga iniutos at pinagawa ni Dir. Manapat sa akin ay hindi po niya ni

minsan binanggit kung ano at para saan gagamitin ang mga ipinagagawa niya sa
akin.

(sgd) Emman A. Llamera

Nagsalaysay

Subscribed and sworn to before me at Quezon City this 21 st day of January, 2004,
Affiant exhibiting to me his Community Tax No. 01477379, issued on April 10, 2003 at
City of Manila.
 NOTARY PUBLIC

(sgd) KENNETH S.
TAMPAL
Notary Public

Doc. No. 672;

Page No. 135;
Book No. XIII;
Series of 2004.

The sworn statement of Vicelyn G. Tarin states:

REPUBLIKA NG PILIPINAS)
SIYUDAD NG MAYNILA )s.s.

SINUMPAANG SALAYSAY

Ako si Vicelyn G. Tarin, nasa wastong gulang, walang asawa, naninirahan sa 3150
Gen. T. de Leon, Valenzuela City, pagkatapos manumpa ay nagsasabing:

1. Ako ay kasalukuyang naninilbihan sa Pambansang Sinupan bilang isang Records

Management Analyst I. Bahagi ng aking katungkulan ay ang wastong paggamit at
pagsusuri ng mga ibat-ibang anyo ng mga dokumento at kasulatan. Ako ay
pansamantalang inilipat noong Agosto, 2002 sa computer section ng aming
tanggapan. Naging bahagi ng aking panibagong tungkulin ang humawak ng
anumang gawain hinggil sa computer.

2. Noong Disyembre 30, 2003 ng gawing hapon, inutusan ako ni G. Ricardo L.

Manapat na mag-scan ng mga dokumento.

2.1 Iniabot ni G. Manapat sa akin ang dalawang piraso ng papel para i-scan.
Iyung isang papel ay naglalaman ng maraming pirmang Allan Poe; at iyung
isa naman ay naglalaman ng maraming pirmang Paulita Gomez. Iniutos ni
G. Manapat na mamili kami ni Leizl Punongbayan ng pinakamaayos na
pirma.

2.2 Pagkatapos kong i-scan ang buong papel, krinap (crop) ko iyong
pinakamaayos na pirma nina Allan Poe at Paulita Gomez, at nilinis sa
pamamagitan ng software na Adobe Photoshop. Pagkatapos noon, Ininsert
 ko yung dalawang napili kong lagda sa MS Word at I-save sa diskette.

2.3 Nang matapos kong I-save sa diskette ang lahat ng aking mga nagawa ay
iniwan ko na lang ito kay Leizl para ibigay kay G. Manapat sa kadahilanang
may kausap si G. Manapat sa kaniyang opisina noong mga oras na iyon.

3. Matapos ang ilang araw, pinatawag ako muli ni G. Manapat para baguhin ang
pirma ni Paulita Gomez dahil masyado daw malaki ang tipo at sukat. Nang
pumunta ako sa computer niya, doon ko na muling nakita na iyong ini-scan kong
mga pirma ay nakapaloob na sa isang file o softcopy ng isang dokumento na
may titulo na Marriage Contract.

3.1 Inedit ko yung pirma ni Paulita Gomez sa pamamagitan ng Adobe Photoshop.

Nang matapos kong baguhin ito ayon sa kagustuhan ni G. Manapat, I-ninsert
ko muli sa MS Word at si-nave ko ito sa isang diskette. Binigay ko ang
diskette na naglalaman ng edited version ng pirma ni Paulita Gomez kay G.
Manapat mismo.

4. Makaraan ang isang linggo nakita ko muli sa ikalawang pagkakataon yung

dokumento na may titulong Marriage Contract kung saan nakapaloob na ang
mga pirma nina Allan Fernando Poe at Paulita Gomez na ini-scan at trinabaho ko
sa mismong loob ng kuwarto namin ni Remmel Talabis. Napagalaman ko kay
Remmel na inutusan siya ni G. Manapat na I-print na yung kopya ng Marriage
Contract.

5. Ginawa ko ang Sinumpaang Salaysay ng buong kusa at laya upang patotohanan

ang lahat ng mga nakasaad dito.

(sgd) VICELYN G. TARIN

Nagsalaysay

Subscribed and sworn to before me at Quezon City this 21 st day of January, 2004,
Affiant exhibiting to me his Community Tax No. 15325883 , issued on January 21, 2004
at Valenzuela City.

NOTARY PUBLIC

(Sgd.) KENNETH S.
TAMPAL
Notary Public
Until Dec. 31, 2005
PTR No. 50648641
Doc. No. 674;
Page No. 135;
Book No. XIII;
Series of 2004.
This is not all. Equally damaging to the credibility of Director Manapat are the sworn
statements of Mr. William Duff and Mr. Victorino A. Floro III of Florofoto. The sworn
statement of Mr. Duff states:
REPUBLIKA NG PILIPINAS)
SIYUDAD NG MAYNILA )s.s.

SINUMPAANG SALAYSAY

Ako si William Bautista Duff, may sapat na gulang, may asawa, kasalukuyang
namamasukan sa Florofoto na may address sa No. 502, C. Palanca St., Quiapo,
Manila, pagkatapos manumpa ay nagsasabing:

1. Ako po ay kasalukuyang naninilbihan bilang isang service supervisor sa naturang

tanggapan.

2. Noong ika-sampu ng Enero ngayong taong kasalukuyan, sabado ng umaga,

sinabihan ako ni Mr. Floro na i-setup ang aming kamera dahil may ipapamicrofilm
si Director Manapat na confidential in nature.

3. Dumating si Director Manapat mga dakong alas-onse ng umaga. Mahigit mga 30

to 50 dokumento ang iniwan niya na minicrofilm ko. Mga deed of sale na nakasaad
sa espanyol ang mga naturang documento.

3.1 Tinanong ako ni Mr. Manapat kung ilang oras ko magagawa ito? Ang sabi ko,
sandali lang mga 30 minutes to 1 hour. Iiwanan ko na lang kay Emy,
sekretarya ni Mr. Floro ang mga dokumento para doon na lang niya kunin.

3.2 Kinuha ni Director Manapat ang mga naturang documento bandang hapon
kay Emy.

4. Noong ika-labindalawa ng Enero, tinawagan ako ng processor ng film at sinabihan

na hindi daw malinaw at mabasa ang microfilm na ginawa ko.

4.1 Agad-agad kong tinawag si Director Manapat sa kanyang opisina at

pinakiusapang ibalik ang mga dokumento na minicrofilm ko dahil hindi ito
 mabasa at kukunan ko ulit.

4.2 Sinabihan ako ni Director Manapat na hintayin ako noong oras ding iyon.
Dumating siya mga dakong alas-onse na ng umaga at may dalang dalawang
bundle ng mga dokumento. Ang tantiya ko, iyong isang bundle naglalaman
ng humigit kumulang tatlong daang dokumento, at iyong isa naman ay may
humigit kumulang limang daang dokumento.

4.3 Sinabihan ko si Direktor Manapat na gagawin ko agad at balikan na lang

niya. Napagalaman ko na mga birth certificate ang laman ng isang folder at
mga deed of sale naman ang laman noong isang folder.

5. Bumalik si Director Manapat mga dakong 12:30 ng hapon habang kasalukuyang

akong nag-mimicrofilm ako ng mga deed of sale. Nang tinanong ako ang
kalagayan ng trabaho, sinabi ko na tapos na yong mga birth certificates at pwede
na niyang kunin. Iyong mga deed of sale, balikan na lang niya at matatagalan pa.
Iwanan ko na lang uli sa sekretarya ni Mr. Floro at doon niya kunin ang mga
dokumento.

5.1 Sinabihan ako ni Director Manapat na magdagdag ng isa pang kopya para sa
mga deed of sale.

6. Pagkatapos ko pong magawa ang mga microfilm, pinadala ko sa planta namin

para sa developing. Sinabihan ko ang supervisor ng aming planta na kabilin-
bilinan ni Director Manapat kay Mr. Floro na highly confidential ang laman ng
microfilms.

7. Noon ika-labingpito ng Enero, bumalik si Director Manapat para kunin ang mga
rolyo ng developed film. Sinabihan ako ni Director Manapat na mag-print ng mga
kopya ng microfilms.

7.1 Sinita ako dahil nag-iisa ang kopya ng microfilm na naglalaman ng mga deed
of sale.

7.2 Agad akong tumawag sa planta namin para magpakopya pa ng isa. Sinabi ni
Director Manapat na siya lang ang magdadala ng film sa isang planta. Ito ay
pinaalam ko kay Mr. Floro.

8. Gusto ni Director Manapat ng print copies kaya pina-basa ko sa makina ang rolyo
ng birth certificate. Habang ginagawa ko ito, pinatigil ako sa isang image. Nakita
ko ang birth certificate ng isang Allan Fernando Poe. Nag-print ako ng kopya sa
utos ni Director Manapat. Malabo po ang lumabas na printout. Lahat na ng paraan
ginawa namin para gumanda ang printout ngunit di namin magawa.

8.1 Iyong isang rolyo na naglalaman ng mga deed of sale naman ang isinunud
naming ipabasa sa makina. Pinatigil ako ni Director Manapat sa isang image.
Nakita ko ang marriage contract ni Allan Fernando Poe at Paulita Gomez.
Nakita ko rin ang isang image na nakasulat sa espanyol na may pangalang
 Paulita Gomez. Sa utos niya, nag-print ako ng isang kopya ngunit katulad ng
dati malabo ang printout.

9. Para luminaw ang mga printout, pinalaki ko ang mga microfilms gamit ang isang
enlarger. Doon lumabas ng maganda ang mga imahen sa loob ng dalawang
microfilm. Nagprint ako ng kopya ng marriage contract, birth certificate at ang
dalawang pahinang documento na nakasulat sa espanyol na may pangalang
Paulita Gomez. Natapos ko lahat ng mga ito dakong alas-4 na ng hapon. Kinuha
mismo ni Director Manapat ang mga microfilms at mga printouts sa akin.

10. Gusto akong ihatid ni Director Manapat sa bahay ko ngunit sinabihan kong
madami pa akong gagawin.

11. Ang lahat po ng mga iniutos at ipinagawa ni Director Manapat sa akin ay bahagi
lamang ng aking katungkulan. Ni minsan po ay hindi nabanggit kung ano at para
saan gagamitin ang mga trabahong ipinagagawa sa akin.

12. Ginawa ko ang Sinumpaang Salaysay ng buong kusa at laya upang patotohanan
ang lahat ng mga nakasaad dito.

(sgd) WILLIAM B. DUFF

Nagsalaysay

Subscribed and sworn to before me at Quezon City this 2 nd day of February, 2004,
Affiant exhibiting to me his Information Tax No. 109-998-007, issued by the Bureau of
Internal Revenue.

NOTARY PUBLIC

(sgd) KENNETH S.
TAMPAL
Notary Public
Until Dec. 31, 2005
PTR No. 50648641
Doc. No. 696;
Page No. 135;
Book No. XIII;
Series of 2004.
The sworn statement of Mr. Floro is as follows:
REPUBLIKA NG PILIPINAS)
SIYUDAD NG MAYNILA )s.s.
 AF F I D AV I T

I, VICTORINO A. FLORO III, of legal age, married, with business address at No. 502
Carlos Palanca St., Quiapo, Manila, under oath, states:
1. I am the Vice-President of Florofoto;

2. Floro International, a sister company of Florofoto has a standing business

agreement with the Records and Management and Archives Office (RMAO) for the
supply of microfilms;

3. Sometime in the first week of January, 2004, Mr. Ricardo L. Manapat, Director of
the RMAO, called me up, asking if Florofoto could microfilm some confidential
documents;

4. On January 10, 2004, Mr. Manapat brought to my office a set of documents,

numbering about 20 to 30 pages, and requested that the same be microfilmed;

5. On January 12, 2004, our technician, Mr. William Duff informed me that the
microfilm was unreadable;

6. On January 17, 2004, Mr. Manapat came to pick up the microfilm rolls;

7. Mr. Duff, with whom Mr. Manapat communicated directly on the matter of the
production of the microfilms will be most willing to give details in the transactions he
had with Mr. Manapat;

8. Florofoto had absolutely no knowledge of the intention of Mr. Manapat on what

he intended to do with the microfilms he asked our company to produce;

9. I am executing this affidavit for the purpose of the Senate hearing.

Affiant further sayeth naught.

(sgd) VICTORINO A.
FLORO III
Affiant
nd
Subscribed and sworn to before me at Quezon City this 2 day of February, 2004,
Affiant exhibiting to me his Community Tax No. 12356783, issued on January 6, 2004 at
Manila.
 NOTARY PUBLIC

(sgd) KENNETH S.
TAMPAL
Notary Public
Until Dec. 31, 2005
PTR No. 50648641
Doc. No. 695;
Page No. 140;
Book No. XIII;
Series of 2004.
These sworn statements were submitted to the COMELEC en banc by the respondent
Poe. Instead of traversing them, petitioner merely contended that they should not be
considered on the technical grounds that they were not formally offered in evidence
before the COMELEC and that they cannot be the subject of judicial notice. Petitioner,
however, overlooks that the COMELEC is a quasi-judicial body and hence is not bound
by the technical rules of evidence. It can accept evidence which cannot be admitted in a
judicial proceeding where the rules of court on evidence are strictly observed. It can
accord weight to such evidence depending on its trustworthiness. In any event,
petitioner cannot complain they are hearsay for he was given an opportunity to
challenge the credibility of the witnesses who executed the foregoing sworn statements.

The third evidence of petitioner is Exhibit C which is the birth certificate of Allan F.
Poe. This is part of the Manapat fabricated evidence with a zero value. But even
assuming it has a value, it merely proves the fact of birth of Allan F. Poe as all birth
certificates merely do. It does not prove that respondent Poe is not a natural-born
citizen. Neither does it prove that respondent Poe deliberately misrepresented that he
is a natural-born citizen.

The fourth evidence of petitioner is Exhibit D, the certification of Director Manapat

that the National Archives has no record that Lorenzo Pou entered or resided in the
Philippines before 1907. Again, this is part of the Manapat manufactured evidence
which can only be given the value of a cypher. But even if it is admissible, it has little
weight for there is no evidence that the National Archives has a complete record of all
persons who lived in the Philippines during the Spanish and American occupation of our
country. Needless to state, petitioner again failed to prove that Lorenzo Pou,
grandfather of respondent Poe, was a Spanish subject.

The fifth and last evidence of the petitioner is Exhibit E (also Exhibit 1 of
respondent Poe). It is a certification of Estrella M. Domingo, OIC, Archives Division that
the Register of Births for the municipality of San Carlos, Pangasinan in the year 1916 is
not on file with the National Archives, hence, there is no available information about the
birth of Allan Poe to the spouses Lorenzo Pou and Marta Reyes in San Carlos
Pangasinan. This lack of information is not proof that respondent
Poe deliberately misrepresented that he is a natural-born citizen. Law and logic bar
that non sequitur conclusion.

These are all the evidence presented by the petitioner. Even a sweep eye contact both
with these evidence will show that petitioner failed to discharge the burden of
proving that respondent Poe is not a natural-born citizen. Petitioner was more dismal in
trying to prove that respondent Poe willfully and deliberately misrepresented himself
as a natural-born citizen. For one, the Manapat evidence appears to have been
manufactured evidence. For another, these and the other evidence are irrelevant
evidence and there is no proof that they ever crossed the attention of respondent Poe.
On the other hand, the evidence unerringly show that respondent Poe, from the time of
his involuntary birth here, has always conducted himself as a Filipino. He is a registered
voter, he owns land, he is married to a Filipina, he carries a Filipino passport - - - he has
always lived the life of a Filipino (Exhibits 16, 17 to 19). Thus, there is no iota of
doubt that petitioner miserably failed to discharge his burden of proving that respondent
Poe deliberately misrepresented that he is a natural-born citizen. For failure of
petitioner to discharge the burden of proof, respondent Poe is entitled to an
outright dismissal of the Fornier petition. Respondent Poe need not present any
contrary evidence for the burden of proof has not shifted to him. Prescinding from
these premises, this Court cannot hold that the COMELEC committed grave abuse of
discretion when it ruled that no substantial evidence was offered by petitioner to
disqualify respondent Poe.
C.

ASSUMING THE COMELEC GRAVELY ABUSED ITS JURISDICTION AND THE

ISSUE OF WHETHER RESPONDENT POE IS A NATURAL-BORN FILIPINO
SHOULD NOW BE RESOLVED, THE FORNIER PETITION NEED NOT BE
REMANDED TO THE COMELEC FOR FURTHER RECEPTION OF EVIDENCE.
Remand to the COMELEC to give
the petitioner a second opportunity
to prove his case is a palpable error.

As aforediscussed, petitioner has the following burden of proof in the COMELEC: (1)
prove that respondent Poe is not a natural-born citizen, and (2) prove that knowing he is
not a natural-born citizen, he willfully and deliberately misrepresented that fact in his
Certificate of Candidacy.

The COMELEC en banc dismissed the petition of Fornier for failure to prove these
operative facts by substantial evidence. After the 12-hour marathon hearing of the case
at bar before this Court, the hope of petitioner to disqualify respondent Poe became
dimmer. Petitioners principal thesis that respondent Poe is an illegitimate child and
therefore follows the American citizenship of his mother, Bessie Kelley, was completely
smothered by the learned opinions of the amici curiae. They opined that respondent
Poes illegitimacy is immaterial in resolving the issue of whether he is a natural-born
citizen and whether he has a political right to run for President. They further submitted
the view that all that is required is clear proof of his filiation -- - i.e., that his father is
Allan F. Poe, a Filipino citizen. Mr. Justice Mendoza left it to the Court to determine the
standard of proof that should be imposed to prove this filiation.

In light of these erudite opinions of our amici curiae, it is daylight clear that
petitioner Fornier is not only wrong with his facts but also wrong with his
law. Considering that petitioner is wrong both with his facts and the law, the Court has
no option but to dismiss the petition at bar which espouses nothing but errors. This
Court will be compounding the wrongs committed by petitioner Fornier with another
wrong if it remands the petition at bar to the COMELEC. A remand means a new round
of litigation in the COMELEC when its proceedings have long been closed and
terminated. Remand means the petitioner will be gifted with another chance to prove
facts which he has failed to prove before. Remand means the petitioner will be given
the extra-ordinary privilege of correcting his erroneous understanding of the law on who
are natural-born Filipino citizens. These are favors which cannot be extended to a
litigant without shattering the Courts stance of political neutrality. The Court
must be above politics for in the temples of justice, we do not follow any political
god.
Remand will change the nature of a
Section 78 proceeding by judicial
legislation, hence, unconstitutional.

The Fornier petition was treated by the COMELEC as a petition to deny due course or
to cancel a certificate of candidacy under B.P. Blg. 881, Section 78. The principal issue
on a Section 78 petition is whether the respondentdeliberately made a material
misrepresentation in his Certificate of Candidacy. In the particular petition at bar, the
issue is whether respondent Poe deliberately misrepresented that he is a natural-born
Filipino citizen. The issue of whether respondent Poe is in truth a natural-born citizen is
considered only because it is necessary to determine the deliberateness and the
willfulness of the material misrepresentation. The proceedings are summary in
character for the central issue to be resolved is the deliberateness of the material
misrepresentation, as the issue of natural-born citizenship is a mere incident. In fine, the
complex issue of natural-born citizenship may not be finally litigated and can still be
raised in an appropriate proceeding such as a quo warranto proceeding after election.
The citizenship issue in a quo warranto proceeding will be determined in full length
proceedings.

The remand of the case to the COMELEC will change the character of a Section 78
proceeding. The citizenship of respondent Poe will no longer be inquired into as a mere
incident necessary to determine whether he deliberatelymade a material
misrepresentation that he is a natural-born citizen. It will now be determined as if it is
the main issue in a Section 78 proceeding. This Court cannot change the nature of a
Section 78 proceeding without usurping legislative power. It is Congress by law that
defined the nature of a Section 78 proceeding and it is only Congress that can change it
by another law. We cannot engage in judicial legislation.

Remand will violate respondent

Poes right to due process, hence,
unconstitutional.

There is a more compelling reason why the petition at bar should not be remanded to
the COMELEC for re-litigation. The COMELEC that will resolve the issue of whether
respondent Poe is a natural-born Filipino has ceased to be an impartial tribunal. Three
of its members, Commissioners Tuazon, Barcelona and Garcellano, submitted separate
Comments to this Court expressing the firm view that respondent Poe is not a natural-
born Filipino. Their views are contrary to the decision of the COMELEC under review by
this Court. It is improper enough for individual commissioners to assail the decision of
the COMELEC of which they are members. It is worse in the case of Commissioners
Barcelona and Garcellano, who are not even sitting commissioners when the
COMELEC promulgated its decision under review. This is plain and simple
prejudgment and it is not even disguised prejudgment that needs to be
unmasked. The COMELEC is composed of seven commissioners all of whom must be
independent and unbiased. The right to due process of respondent Poe is the right to be
heard by seven unbiased COMELEC commissioners - - - not 1, not 2, not 3, not 4, but
by 7 unbiased members. We do not have such a COMELEC.

Remand will delay the resolution of

the issue of whether respondent Poe
is qualified. Delay will also
prejudice his candidacy and will
favor his political opponents.

Remand of the petition at bar to the COMELEC will inevitably delay the resolution of the
issue of whether respondent Poe is a natural-born Filipino citizen. The issue will not be
finally resolved by the COMELEC. The decision of the COMELEC can still be appealed
to this Court. Given the temperature of the present presidential contest, such an appeal
can be assumed.

It cannot be gainsaid that any doubt on the qualification of respondent Poe to run as
President is prejudicial to his presidential bid and favorable to his political
opponents. The right to run for a public office includes the right to equal chance to
compete. The right to run is empty if the chance to win is diminished or denied a
candidate. This chance to win may amount to a mere chimera if the
disqualification of respondent Poe will be left hanging in the air for a long time. It
is the solemn duty of this Court to equalize the chances of winning of all candidates to a
public office. Any failure to equalize the chances of all candidates is to insure the defeat
of the disfavored.
D.

TO AVOID DELAY, THE COURT SHOULD ITSELF DECIDE THE ISSUE AND
DECLARE RESPONDENT POE AS A NATURAL-BORN CITIZEN ON THE BASIS OF
THE EVIDENCE ADDUCED BEFORE THE COMELEC.
Whether respondent Poe is
illegitimate is irrelevant in
determining his status as natural-
born citizen - - - that is the law.

Petitioner has always submitted the legal thesis that: (1) respondent Poe is an
illegitimate child as he was born out of wedlock, i.e., he was born before the marriage of
Allan F. Poe and Bessie Kelly; (2) as an illegitimate child, he follows the American
citizenship of his mother, Bessie Kelly; therefore, (3) he is not a natural-born citizen.
Petitioner contends that evidence of respondent Poe himself, Exhibits 3 and 21,
prove these facts.

This interpretation of the law by the petitioner is erroneous. The amici curiae have
opined that the illegitimacy of respondent Poe is immaterial in determining his status as
natural-born citizen. I quote the learned opinion ofFather Joaquin Bernas:
AN ILLEGITIMATE CHILD OF A FILIPINO FATHER IS BORN A FILIPINO AND IS
THEREFORE A NATURAL-BORN FILIPINO CITIZEN. PUT DIFFERENTLY, THE
PRINCIPLE OF JUS SANGUINIS APPLIES EVEN TO ILLEGITIMATE CHILDREN

I now come to the question whether jus sanguinis applies to illegitimate children. We
have many decisions which say that jus sanguinis applies to the illegitimate children of
Filipino mothers because the mother is the only known or acknowledged parent. But
does the law make a distinction and say that jus sanguinis does not apply to the
illegitimate children of Filipino fathers even if paternity is clearly established?

No law or constitutional provision supports this distinction. On the contrary, the

Constitution clearly says without distinction that among those who are citizens of the
Philippines are those whose father is a Filipino citizen. Hence, what is needed for the
application of jus sanguinis according to the clear letter of the law is not legitimacy of
the child but proof of paternity.

Having said that, however, we must contend with four cases promulgated by the
Supreme Court which contain the statement that illegitimate children do not follow the
Filipino citizenship of the father. These cases are: Morano v. Vivo, 20 SCRA 562 (1967),
which in turn cites Chiongbian v. De Leon, 46 O.G. 3652 and Serra v. Republic, L-4223,
May 12, 1952, and finally Paa v. Chan, 21 SCRA 753 (1967).

We must analyze these cases and ask what the lis mota was in each of them. If the
pronouncement of the Court onjus sanguinis was on the lis mota, the pronouncement
would be a decision constituting doctrine under the rule ofstare decisis. But if the
pronouncement was irrelevant to the lis mota, the pronouncement would not be a
decision but a mere obiter dictum which did not establish doctrine. I therefore invite the
Court to look closely into these cases.

First, Morano v. Vivo. This case was not about an illegitimate child of a Filipino father. It
was about a stepson of a Filipino, a stepson who was the child of a Chinese mother and
a Chinese father. The issue was whether the stepson followed the naturalization of the
stepfather. Nothing about jus sanguinis there. The stepson did not have the blood of the
naturalized stepfather.

Second, Chiongbian v. de Leon. This case was not about the illegitimate son of a
Filipino father. It was about a legitimate son of a father who had become Filipino by
election to public office before the 1935 Constitution pursuant to Article IV, Section 1(2)
of the 1935 Constitution. No one was illegitimate here.

Third, Serra v. Republic. The case was not about the illegitimate son of a Filipino father.
Serra was an illegitimate child of a Chinese father and a Filipino mother. The issue was
whether one who was already a Filipino because of his mother who still needed to be
naturalized. There is nothing there about invidious jus sanguinis.

Finally, Paa v. Chan. This is a more complicated case. The case was about the
citizenship of Quintin Chan who was the son of Leoncio Chan. Quintin Chan claimed
that his father, Leoncio, was the illegitimate son of a Chinese father and a Filipino
mother. Quintin therefore argued that he got his citizenship from Leoncio, his father. But
the Supreme Court said that there was no valid proof that Leoncio was in fact the son of
a Filipina mother. The Court therefore concluded that Leoncio was not Filipino. If
Leoncio was not Filipino, neither was his son Quintin. Quintin therefore was not only not
a natural-born Filipino but was not even a Filipino.

The Court should have stopped there. But instead it followed with an obiter dictum. The
Court said obiter that even if Leoncio, Quintins father, were Filipino, Quintin would not
be Filipino because Quintin was illegitimate. This statement about Quintin, based on a
contrary to fact assumption, was absolutely unnecessary for the case. Quintin was
already on the floor and the Court still kicked him. It was obiter dictum pure and simple,
simply repeating theobiter dictum in Morano v. Vivo. I submit that the petitioners in this
case as well as three Comelec Commissioners including the two new ones and also the
Solicitor General have merely been repeating without any semblance of analysis
the obiter dicta in these four cases.

The clear conclusion from all these four cases is that their statements to the effect
that jus sanguinis applies only to legitimate children were all obiter dicta which decided
nothing. The Court had purported to offer a solution to a non-existent problem. Obiter
dicta do not establish constitutional doctrine even if repeated endlessly. Obiter dictaare
not decisions and therefore they do not constitute stare decisis. They therefore cannot
be used to resolve constitutional issues today.

Now to Fernando Poe, Jr. If indeed he is an illegitimate son of a Filipino father, should
the Court now pronounce a new doctrine that an illegitimate son of a Filipino father is
not born a Filipino citizen even if paternity is established? There is compelling
constitutional reason why the Court should not do so. Aside from the fact that such a
pronouncement would have no textual foundation in the Constitution, it would also
violate the equal protection clause of the Constitution not once but twice. First, it would
make an illegitimate distinction between a legitimate child and an illegitimate child, and
second it would make an illegitimate distinction between the illegitimate child of a
Filipino father and the illegitimate child of a Filipino mother.

The doctrine on constitutionally allowable distinctions was established long ago

by People v. Cayat. I would grant that the distinction between legitimate and illegitimate
children rests on real differences even if the differences are not as pleasurable as the
differences between male and female. But real differences alone do not justify invidious
distinction. Real differences may justify distinction for one purpose but not for another
purpose.

Among the four requirements of allowable distinction is that the distinction must be
germane to the purpose of the law. Thus, the distinction between male and female is
real, and we thank God for that. But such distinction would not be relevant for purposes
of, for instance, improving the standards of the legal profession. Such distinction cannot
be made the basis for disqualifying women from the practice of law or sitting in the
Supreme Court.

It is the same thing with respect to the exercise of political rights. What is the relevance
of legitimacy or illegitimacy to elective public service? What possible state interest can
there be for disqualifying an illegitimate child from becoming a public officer. It was not
the fault of the child that his parents had illicit liaison. Why deprive the child of the
fullness of political rights for no fault of his own? To disqualify an illegitimate child from
holding an important public office is to punish him for the indiscretion of his parents.
There is neither justice nor rationality in that. And if there is neither justice nor rationality
in the distinction, then the distinction transgresses the equal protection clause and must
be reprobated.

The delegates to the 1935 Constitutional Convention, honorable men that they were,
must have been aware of the injustice of punishing the child politically for the
indiscretion of his or her parents. I invite the honorable Court to peruse the debates of
the 1935 Constitutional Convention. When the delegates were debating jus sanguinis,
there was not the slightest suggestion to make a distinction between legitimate and
illegitimate children. For themsanguis, or blood, whether injected legitimately or
illegimately was the same blood and had the same political effect citizenship of the
offspring.

The only time the Convention distinguished between legitimate and illegitimate children
was in relation to the right of children born of Filipino mothers and alien fathers to elect
Philippine citizenship upon reaching majority. But it was an unnecessary distinction.
When Delegate Rafols raised the question whether the right to elect belonged to both
legitimate and illegitimate children, Delegate Cuaderno answered that only legitimate
children could elect because only legitimate children needed to elect. Illegitimate
children already had the Filipino citizenship of their mother flowing in their veins.

What then should be done with the obiter dicta in the four cases cited by the
petitioners? I answer this question with what the Court said when it declared in Tan
Chong v. Secretary of Labor that Roa v. Collector of Customs was wrong in holding that
jus soli was put in effect in the Philippines. The Court said: The duty of this Court is to
forsake and abandon any doctrine or rule found to be in violation of the law in
force. Tan Chong v. Secretary of Labor, 79 Phil. 249 (1947).

The four cases cited by petitioners are not even decisions. They do not come under
stare decisis. They are obiter dicta more easily repudiated and should be repudiated.

In conclusion, therefore, when the Constitution says: The following are citizens of the
Philippines Those whose fathers are citizens of the Philippines, the Constitution
means just that without invidious distinction. Ubi lex non distinguit ne nos distinguere
debemus, especially if the distinction has no textual foundation in the Constitution,
serves no state interest, and even imposes an injustice on an innocent child. What flow
from legitimacy are civil rights; citizenship is a political right which flows not from
legitimacy but from paternity. And paternity begins when the ovum is fertilized nine
months before birth and not upon marriage or legitimation.

As to Fernando Poe, Jr., therefore, if it is established by competent proof that he is the

son of a Filipino father, legitimate or illegitimate, he is a natural-born Filipino citizen.
The former Dean of the UP College of Law Merlin Magallona espoused the same
scholarly view. I quote him:
4. Transmissive Essence of Citizenship

4.1 It is an essential feature of citizenship that it is transmissible. The key issue is: What
principle governs its transmissibility? The Philippine Bill of 1902 as well the Jones Law
defines the conditions by which persons similarly situated as Lorenzo Pou as a Spanish
subject shall be deemed and held to be citizens of the Philippine Islands. Over and
above that, these laws provide for the means by which Lorenzo Pous Philippine
citizenship would be transmitted when they declare that their or his children born
subsequent to the date of exchange of ratifications of the Treaty of Paris as citizens of
the Philippine Islands as well.

4.2 While the text of the law speaks of children of Spanish subjects who are deemed to
be citizens of the Philippine Islands, it is at that same time an embodiment of a core
principle of blood relationship or jus sanguinis. The word children becomes merely a
reflection of the transmissive essence of citizenship which lies in blood relationship. In
this sense, the transmissibility of citizenship, such as that of Lorenzo Pou, is not limited
to the immediate generation to which Allan R. Pou belonged; it continues to run through
all children across generations, barring naturalization and other methods of extradition.

4.3 The operation of the core principle of transmissibility in blood relation finds
affirmation and, more significantly, continuity in the 1935, 1973 and 1987 Constitutions
in which blood relationship becomes a principal derivation and transmissibility of
citizenship. All Constitutions embody this transmissive essence of citizenship in blood
relationship. In the determination as to who are citizens of the Philippines, they have a
common provision that those whose fathers are citizens of the Philippines are citizens.

4.4 The interconnection between the Philippine citizenship of children born to Spanish
subjects under the Philippine Bill of 1902 and the Jones Law and the said provision
common to the three Philippine Constitutions becomes a long line of generations that
illustrates the transmissive essence of citizenship.

4.5 Under the circumstances defined by the Treaty of Paris in correlation with the
Philippine Bill of 1902 and the Jones Law, the Philippine citizenship of Lorenzo Pou and
his son Allan R. Pou were further affirmed by the application of subsection (1), Section
1, Article IV of the 1935 Constitution, by which citizenship is defined on the part of:
Those who are citizens of the Philippine Islands at the time of the adoption of this
Constitution.
4.6 On his own account, having become citizen of the Philippine Islands as a child of
Lorenzo Pou born subsequent to the date of exchange of ratifications of the Treaty of
Paris under Section 4 of the Philippine Bill of 1902 and Section 2 of the Jones Law,
Allan R. Pou has the benefit of subsection (1), Section 1, Article IV of the 1935
Constitution, quoted above.

4.7 As thus defined, Philippine citizenship on the part of Allan R. Pou is not limited to his
person; his citizenship is transmissible by its nature. The principle governing the
transmissibility of his citizenship to his children is provided by subsection 3, Section 1,
Article IV of the 1935 Constitution, which declares as citizens of the Philippines
Those whose fathers are citizens of the Philippines.
4.8 The transmissive essence of citizenship here is clearly the core principle of blood
relationship or jus sanguinis. On this account, the derivation of citizenship from a person
or the transmission of citizenship to his child, springs from a person or the transmission
of citizenship to his child, springs from the fact that he is the father. Thus, paternity as
manifestation of blood relationship is all that is needed to be established. To introduce a
distinction between legitimacy or illegitimacy in the status of the child vis--vis the
derivation of his citizenship from the father defeats the transmissive essence of
citizenship in blood relationship. The text of the law which reads Those whose fathers
are citizens of the Philippines becomes an embodiment of the kernel principle of blood
relationship, which provides no room for the notion of citizenship by legitimacy or
legitimation.

4.9 The transmissive essence of citizenship as outlined above may receive further
clarification in the 1987 Constitution, in which it is provided in subsection 2, Section 1 of
Article IV that Philippine citizenship is derived as follows:
Those whose fathers or mothers are citizens of the Philippines. (Emphasis added.)
A woman becomes a derivation of citizenship not because of the illegitimate status of
her child but for the reason that she is a mother and as mother she is the medium of
blood relationship. In this provision of law, the father and the mother stand in equality.
Both are derivative of citizenship on the same principle of blood relationship.

4.10 The approach to the problem of citizenship from the angle of transmissive essence
of citizenship receives authoritative support from Chief Justice Manuel Moran speaking
for this Honorable Court in Chiongbian v. De Leon (82 Phil. 771 [1949]). In question was
the interpretation of the provision in the 1935 Constitution declaring that Those born in
the Philippine Islands of foreign parents who, before the adoption of this Constitution,
had been elected to public office. (Art. IV, Section 1, subsection 2). It was contended
that citizenship thus acquired is personal and cannot be transmitted to the children. In
response, Chief Justice Moran emphasized the transmissive essence of citizenship,
saying that this provision does not stand alone and requires its application together with
the provision that Those whose fathers are citizens of the Philippines, thus bringing in
the transmissibility of citizenship on the principle of blood relationship.
Associate Justice Vicente V. Mendoza, a former member of this Court and an expert in
Constitutional Law, similarly opined:
The cases, in interpreting Art. IV, Section 1 (3), do not exclude illegitimate children of
Filipino fathers from this class of citizens of the Philippines. They do not say
that only legitimate children or natural children, who are legitimated as a result of the
subsequent marriage of their parents and their acknowledgment before or after the
marriage, belong to this class of citizens of the Philippines (those whose fathers are
citizens of the Philippines). Nor, on the other hand, by holding that illegitimate children
follow the citizenship of their Filipino mothers as the only legally recognized parents,
do some of the cases exclude instances in which an illegitimate child may have been
acknowledged by his Filipino father.

Indeed, cases holding that illegitimate children follow the citizenship of their Filipino
mothers involve situations in which the fathers are not Filipinos. (United States v. Ong
Tianse, supra; Serra v. Republic, supra; Santos Co v. Government of the Philippine
Islands, 52 Phil. 543 [1928]; Ratunil Sy Quimsuan v. Republic, 92 Phil. 675 [1953]).To
hold that the illegitimate child follows the citizenship of his Filipino mother but
that an illegitimate child does not follow the citizenship of his Filipino father
would be to make an invidious discrimination. To be sure this Court has not ruled
thus.

What is only needed is that the illegitimate child must be acknowledged by the father to
establish his filiation to the latter. The acknowledgment and establishment of filiation of
such child may not be sufficient to entitle him to support, successional rights, and other
benefits under Civil Law, but, for purposes of determining his political status as a citizen
of the Philippines, such proof of acknowledgment and filiation is all that is required.

A ruling by this Court that the constitutional provision (that those whose fathers are
citizens of the Philippines are citizens of the Philippines themselves) will require no
overruling of prior decisions. After all, none of the prior decisions of this Court deal with
a situation in which the Filipino parent of the illegitimate child is the father.

If this Court interprets the constitutional provision as including in the class of citizens
illegitimate children whose filiation to their Filipino fathers is established, the Court will
simply be adding a third category of citizens. In 1949,Chiongbian v. De Leon, supra, this
Court held that a legitimate minor child follows the citizenship of his Filipino father.
This is the first category. In 1967, in Paa v. Chan, supra, it was held that a legitimated
natural child, whose father is a Filipino, is also Filipino. This is the second category of
citizens whose fathers are Filipinos.

By holding that an illegitimate child follows the citizenship of his Filipino father provided
he is acknowledged or his filiation to him is duly proven, this Court will be creating a
third category of Filipino citizens whose fathers are citizens of the Philippines. For
there is really no difference in principle between, on the one hand, the illegitimate child
of a Filipino mother and an alien father, and, on the other hand, the illegitimate child of a
Filipino father and an alien mother. As long as the childs filiation to his supposed father
is established, it does not matter whether he is a legitimate or an illegitimate child.
These opinions of the amici curiae support the ruling of the First Division of the
COMELEC that:
xxx

Note that Section 3 of Article IV of the 1935 Constitution does not have a qualifying
term legitimate after the words those whose fathers and before the phrase are
citizens of the Philippines. Legitimacy therefore is beside the point. As long as the
father is a Filipino, the child will always be a Filipino. As we have discussed early
on, since Allan Fernando Poe is a Filipino, his son Ronald Allan Poe, the respondent
herein, is a natural-born Filipino.
This ruling was unanimously affirmed by the COMELEC en banc.

If petitioner Fornier is wrong in his understanding of the law on who are natural-born
citizens of the Philippines, how can he be right in assailing the status of respondent
Poe?

To establish that respondent Poe is

a natural-born citizen, all that is
needed is proof of his filiation to his
father Allan R. Poe, a Filipino
citizen - - - that is the critical fact.

The critical fact in the determination of whether respondent Poe is a natural-born

citizen is his filiation with Allan F. Poe, a citizen of the Philippines. The fact that
respondent Poe is the son of Allan F. Poe is not disputed. It is anadmitted
fact. Petitioner Fornier from Day 1 proceeded from the premise that respondent Poe is
the son of Allan F. Poe.

The records of the case at bar speak for themselves. Let us first examine
the Petition filed by Fornier in SPA No. 04-003 before the First Division of the
COMELEC. The Petition never questioned the fact that Allan F. Poe is the father of
respondent Fernando Poe, Jr. What it questioned is the alleged Filipino citizenship of
Allan F. Poe. I quote the Petition in extenso:
xxx
3. Under Section 2, Article VII of the 1987 Constitution, the qualifications of the
President of the Republic of the Philippines are enumerated as follows:
Section 2. No person may be elected president unless he is a natural-born citizen
of the Philippines, a registered voter, able to read and write, at least forty years of
age on the day of the election, and resident of the Philippines for at least ten years
immediately preceding such election.
4. Respondent Poe, however, is not even a citizen of the Philippines, much more a
natural-born citizen, and as such lacks the essential qualifications for the position of
President of the Republic of the Philippines since both of his parents are not Filipino
citizens.

5. Based on respondent Poes alleged Certificate of Birth, he was born on 20

August 1939. A copy of the said Certificate of Birth is attached and made integral part
hereof as Annex B.
5.1. Respondent Poes alleged Certificate of Birth indicated that his parents are
Allan F. Poe and Bessie Kelley.

5.2. Respondent Poes alleged Certificate of Birth indicated that his mother, Bessie
Kelley, is an American citizen.

5.3. However, the alleged Certificate of Birth of respondent Poe falsely or incorrectly
indicated the real citizenship of his father Allan F. Poe, since he is legally not a
Filipino citizen, as shown below.
6. Contrary to what was falsely indicated in the alleged Certificate of Birth of
respondent Poe, the latters father, Allan F. Poe, is not a Filipino, but an alien,
specifically, a citizen of Spain.
6.1. On 05 July 1936, Allan F. Poe expressly and categorically declared in a public
instrument that he was a Spanish citizen. A copy of the Marriage Contract executed
by Allan F. Poe, and one Paulita Gomez at the Convento de Santo Domingo at
Intramuros, Manila is attached and made an integral part hereof as Annex C.

6.2. Moreover, in said Marriage Contract, Allan F. Poe likewise categorically and
expressly admitted that both of his parents, Lorenzo Poe and Marta Reyes are also
citizens of Spain.
 6.3. Clearly respondent Poes father is a Spanish citizen whose parents are both
Spanish citizens.
7. Thus, respondent Poe could not have possibly acquired Filipino citizenship from
his father, Allan F. Poe since the latter is a Spanish citizen.

8. But even assuming arguendo that respondent Poes father, Allan F. Poe was a
Filipino citizen, as indicated in respondent Poes Certificate of Birth (Annex B
hereof), still respondent Poe could not have validly acquired Filipino citizenship from
his father due to the fact that the purported marriage of his parents, Allan F. Poe and
Bessie Kelley, is void.
8.1. Under Philippine jurisprudence, an illegitimate child, i.e., a child conceived and
born outside a valid marriage, follows the citizenship of his mother. (United States vs.
Ong Tianse, 29 Phil. 332 [1915])

8.2. As previously stated, respondent Poes father, Allan F. Poe, married Paulita
Gomez on 05 July 1936, which marriage was subsisting at the time of the purported
marriage of respondent Poes father to his mother, Bessie Kelley. (cf. Annex C
hereof)

8.3. Moreover, it appears that Allan F. Poes first wife, Paulita Gomez, even filed a
case of bigamy and concubinage against him after discovering his bigamous
relationship with Bessie Kelley. A copy of the Affidavit dated 13 July 1939 executed
by Paulita Gomez in Spanish attesting to the foregoing facts, together with an English
translation thereof, are attached and made an integral parts hereof as Annexes
D and D-1, respectively.
9. Verily, having been born out of void marriage, respondent Poe is an
illegitimate child of Allan F. Poe and Bessie Kelley. Consequently, the citizenship of
respondent Poe follows that of his mother, Bessie Kelley, who is undeniably an
American citizen.

10. Under the 1935 Constitution, which was then applicable at the time of respondent
Poes birth, only the following are considered Filipino citizens:
Section 1. The following are citizens of the Philippines:

1) Those who are citizens of the Philippine Islands at the time of the adoption of this
Constitution;
 2) Those born in the Philippine Islands of foreign parents who, before the adoption of
this Constitution, had been elected to public office in the Philippines Islands;

3) Those whose fathers are citizens of the Philippines;

4) Those whose mothers are citizens of the Philippines and, upon reaching the age
of majority, elect Philippine citizenship; and

5) Those who are naturalized in accordance with law.

11. Clearly, respondent Poe is not a citizen of the Philippines, much more a natural-
born Filipino citizen, considering that both of his parents are aliens. Also, even
assuming arguendo that respondent Poes father, Allan F. Poe, is a Filipino citizen,
as indicated in his Certificate of Birth (Annex B hereof), since respondentPoe is an
illegitimate child of his father with Bessie Kelley, an American, he acquired the
citizenship of the latter. (United States vs. Ong Tianse, supra)

12. Hence, respondent Poe, not being a natural-born citizen of the Philippines, lacks
an essential qualification and corollarily possesses a disqualification to be elected
President of the Republic of the Philippines, as expressly required under the 1987
Constitution.

13. In view of the foregoing, respondent Poe should be disqualified from being a
candidate for the position of President of the Republic of the Philippines in the
coming 10 May 2004 elections.
The Answer of respondent Fernando Poe, Jr. did not touch on the fact that his father is
Allan F. Poe as that is anon-issue. Rather, it discussed the citizenship of Lorenzo Pou,
the grandfather of respondent Fernando Poe, Jr., the citizenship of Allan F. Poe, the
father of respondent Fernando Poe, Jr., and the Philippine citizenship of respondent
Fernando Poe, Jr. himself.

After the evidence of the parties were received by the First Division of the COMELEC,
petitioner offered the following evidence as narrated in his Memorandum, viz:
xxx

1.8. In support of the petition, the petitioner presented and offered in evidence the
following documentary evidence showing that FPJ is not a natural-born Filipino
citizen and is, therefore, disqualified to run for President of the Republic of the
Philippines, and that he made a material misrepresentation in his certificate of
candidacy as to his true and real citizenship.

1.8.1. As Exhibit A A copy of FPJs Certificate of Birth, indicating that respondent

Poe was born on 20 August 1939 and that his parents are Bessie Kelley, an American
citizen, and Allan F. Poe, allegedly a Filipino citizen.

1.8.2. As Exhibits B and B-1 A certified photocopy of an Affidavit executed on 13

July 1939 by Paulita Poe y Gomez in Spanish, attesting to the fact that she filed a case
of bigamy and concubinage against respondents father, Allan F. Poe, after
discovering the latters bigamous relationship with respondents mother, Bessie Kelley.

1.8.3. As Exhibit B-2 A certified photocopy of the Marriage Contract entered into on 5
July 1936 by and betweenrespondents father, Allan Fernando Poe and Paulita
Gomez, showing that respondents father is Espaol; and that his parents, Lorenzo
Poe and Marta Reyes, were Espaol and Mestiza Espaola, respectively.

1.8.4. As Exhibit B-3 An English translation of the Affidavit dated 13 July 1939
executed by Paulita Poe y Gomez.

1.8.5. As Exhibit C A certified photocopy of the Certificate of Birth of Allan Fernando

Poe showing that he was born on May 17, 1915, and that his father, Lorenzo Poe, is
Espaol and his mother, Marta Reyes, is Mestiza Espaola,

1.8.6. As Exhibit D A certification dated 16 January 2004 issued by Ricardo L.

Manapat, Director of the Records Management and Archives Office, certifying that the
National Archives does not possess any record of a certain Lorenzo Poe or Lorenzo
Pou residing or entering the Philippines before 1907.

1.8.7. As Exhibit E (also respondents Exhibit 1) Certification dated 12 January

2004 issued by Estrella M. Domingo, OIC of the Archives Division of the National
Archives, certifying that there is no available information in the files of the National
Archives, regarding the birth of Allan R. Pou, alleged to have been born on November
27, 1916.
Again, it is plain to see that petitioner offered no evidence to impugn the fact that
Allan F. Poe is the father of respondent Fernando Poe, Jr. Indeed, petitioners
Exhibits A, B, B-1 and B-2 recognized that Allan F. Poe is the father of the
respondent.

Consequently, the First Division of the COMELEC in its Resolution of January 23,
2004 treated the fact that Allan F. Poe is the father of respondent Poe as an admitted
fact. Page 7 of the Resolution states:
xxx

To assail respondents claim of eligibility, petitioner asserts that respondent is not a

natural-born Filipino citizen. According to him, Exhibit B-2 (alleged Marriage Contract
between Allan Fernando Poe and Paulita Gomez) shows that the nationality of the
father of Allan Fernando Poe, Lorenzo Poe is Espaol. Allan Fernando Poe is
admittedly the father of the respondent. In the same Exhibit B-2 appears an entry
that the nationality of Allan Fernando Poe is also Espaol. Petitioners line of argument
is that respondent could not have acquired Filipino citizenship from his father since the
latter is Espaol.
Page 8 of the Resolution reiterated:
xxx

Parenthetically, petitioner and respondent agreed on the fact that Allan Fernando
Poe is the father of Ronald Allan Poe. Hence, if Allan Fernando Poe is Filipino,
necessarily, Ronald Allan Poe, his son is likewise a Filipino.
Page 11 of the Resolution is similarly emphatic that respondent Poe, is the son of Allan
F. Poe, viz:
xxx

Note that Section 3 of Article IV of the 1935 Constitution does not have a qualifying term
legitimate after the words those whose fathers and before the phrase are citizens of
the Philippines. Legitimacy therefore is beside the point. As long as the father is a
Filipino, the child will always be a Filipino. As we have discussed early on, since
Allan Fernando Poe is a Filipino, his son Ronald Allan Poe, the respondent
herein, is a natural-born Filipino.
Petitioner filed a Motion for Reconsideration dated January 26, 2004. In this Motion
for Reconsideration, petitioner always conceded that respondent Fernando Poe, Jr., is
the son of Allan F. Poe.[17] Petitioner simply continued to allege that the evidence does
not show that the citizenship of Lorenzo Pou (grandfather of respondent Poe) and
Allan F. Poe (father of respondent Poe) is Filipino. Petitioner insisted in the conclusion
that respondent Poe is not a Filipino, let alone a natural-born Filipino. Again, this is
evident from the grounds invoked by petitioner in his Motion for Reconsideration, viz:
xxx
Grounds

I.

The Honorable First Division committed a serious and reversible error in holding that it
is not the proper forum to finally declare whether or not the respondent is a natural-born
Filipino citizen.

II.

The Honorable First Division committed a serious and reversible error in not
appreciating all the evidence presented by the parties in determining whether or not
respondent made a material misrepresentation or false material representation
regarding his real citizenship in his certificate of candidacy.

III.

The Honorable First Division committed a serious and reversible error in holding that the
evidence presented do not controvert the declaration of the respondent in his certificate
of candidacy that he is a natural-born Filipinocitizen.

IV.

The Honorable First Division committed a serious and reversible error in holding that
legitimacy is beside the point in determining the citizenship of the respondent.
On February 4, 2004, petitioner filed his Memorandum In Support Of Petitioners
Motion For Reconsideration. As to be expected, petitioner did not again assail the fact
that respondent Poe is the son of Allan F. Poe. [18]

In its February 6, 2004 Resolution, the COMELEC en banc affirmed in toto, the
resolution of its First Division that respondent Poe, x x x did not commit any material
misrepresentation when he stated in his Certificate of Candidacy that he is a natural-
born Filipino citizen. Significantly, it did not waste any word on whether Allan F. Poe is
the father of respondent Fernando Poe, Jr. The paternity of respondent Fernando Poe,
Jr., is conceded, anon-issue.

In the Petition for Certiorari dated February 9, 2004 and filed with this Court, petitioner
again proceeded from the premise that Allan Poe is the father of respondent Fernando
Poe, Jr. The pertinent portion of the Petition states:
xxx

The Relevant Facts

8. Briefly stated, the pertinent facts concern the circumstances of Lorenzo Pou
respondent FPJs grandfather, of Allan F. Poe/Allan Fernando Poe/Allan R.
Pou/Fernando R. Poe respondent FPJs father, of Bessie Kelley respondent
FPJs mother, and accordingly of respondent FPJ himself.
The fact that respondent Poe is the son of Allan F. Poe is a judicial admission. It does
not require proof.[19]

Aside from these admissions, the filiation of respondent Poe is also proved by the
declaration of Mrs. Ruby Kelley Mangahas, Exhibit 20 of the respondent. Mrs.
Mangahas is the sister of Bessie Kelly, mother of the respondent. Her sworn statement
states:
DECLARATION OF
RUBY KELLEY MANGAHAS

I, Ruby Kelley Mangahas, of legal age and sound mind, presently residing in Stockton,
California, U.S.A., after being sworn in accordance with law, do hereby declare that:
1. I am the sister of the late BESSIE KELLEY POE.

2. Bessie Kelley Poe was the wife of FERNANDO POE, SR.

3. Fernando and Bessie Poe had a son by name of RONALD ALLAN POE,
more popularly known in the Philippines as Fernando Poe, Jr., or FPJ.

4. Ronald Allan Poe FPJ was born on August 20, 1939 at St. Lukes Hospital,
Magdalena St., Manila.
5. At the time of Ronald Allan Poes birth, his father, Fernando Poe, Sr., was a
Filipino citizen and his mother, Bessie Kelley Poe, was an American citizen.

6. Considering the existing citizenship law at that time, Ronald Allan Poe
automatically assumed the citizenship of his father, a Filipino, and has always
identified himself as such.

7. Fernando Poe, Sr. and my sister, Bessie, met and became engaged while they
were students at the University of the Philippines in 1936. I was also introduced to
Fernando Poe, Sr. by my sister that same year.

8. Fernando Poe, Sr. and my sister, Bessie had their first child in 1938.

9. Fernando Poe, Sr., my sister Bessie, and their first three children, Elizabeth,
Ronald Allan, and Fernando II, and myself lived together with our mother at our
familys house on Dakota St. (now Jorge Bocobo St.), Malate until the liberation of
Manila in 1945, except for some months between 1943-1944.

10. Fernando Poe, Sr. and my sister, Bessie, were blessed with four (4) more
children after Ronald Allan Poe.

11. From the very first time I met Fernando Poe, Sr., in 1936, until his death in 1951,
I never heard my sister mention anything about her husband having had a marital
relationship prior to their marriage.

12. During the entire life of Fernando Poe, Sr., as my brother-in-law, I never heard of
a case filed against him by a woman purporting to be his wife.

13. Considering the status of Fernando Poe, Sr., as a leading movie personality
during that time, a case of this nature could not have escaped publicity.

14. Assuming, for the sake of argument, that the case was never published in any
newspaper or magazine, but was in fact filed in court, I would have known about it
because my sister would have been an indispensable party to the case, and she
could not have kept an emotionally serious matter from me.

15. This is the first time, after almost 68 years, that I have heard Fernando Poe, Sr.,
being maliciously accused of being a married man prior to his marriage to my sister.
16. This is the first time, after almost 68 years, that I have heard the name Paulita
Poe y Gomez as being the wife of Fernando Poe, Sr.

17. There was no Paulita Poe y Gomez, or any complainant for that matter, in or out
of court, when my sister gave birth to six (6) children, all fathered by Fernando Poe,
Sr.

18. I am executing this Declaration to attest to the fact that my nephew, Ronald Allan
Poe is a natural-born Filipino, and that he is the legitimate child of Fernando Poe, Sr.
Done in the City of Stockton, California, U.S.A., this 12th day of January 2004.

(Sgd.) RUBY KELLEY MANGAHAS

Declarant
The allegation of Mrs. Mangahas that respondent Fernando Poe, Jr. is the son of Allan
F. Poe stands unchallenged.

We follow the principle of jus sanguinis, the rule of blood relationship. Proof that Allan F.
Poe, a Filipino citizen, is the father of respondent Poe is proof that the blood of Allan F.
Poe flows in the veins of respondent Poe. No other proof is required for the principle
of jus sanguinis to apply. There is no need for other proofs such as proofs of
acknowledgment, for such proofs are only used in civil law for the purpose of
establishing the legitimation of illegitimate children. Our Constitutions from 1935 merely
state those whose fathers are citizens of the Philippines. The ineluctable conclusion
is that the only proof required for the principle of jus sanguinis to operate is
filiation, i.e., that ones father is a citizen of the Philippines. No other kind of proof is
required. In fine, the quantity and quality of proof or the standard of proof is
provided by the Constitution itself. We cannot alter this standard by suggesting
either a strict or liberal approach.

In any event, if further poof of acknowledgment is required, Exhibit 8-a of the

respondent Poe, should be considered. It is entitled Affidavit for Philippine Army
Personnel, executed by Allan F. Poe. In this Affidavit, Allan F. Poe declared and
acknowledged his children to be Elizabeth, 6 years old, Ronnie, 5 years old and
Fernando II, 3 years old. This Affidavit is not refuted.

Filipino citizenship of Allan F. Poe,

respondents father is well established.
The Filipino citizenship of respondent Poes father, Allan F. Poe, is well established by
evidence. Allan F. Poes father is Lorenzo Pou. Lorenzo Pou was a Spanish subject. He
was an inhabitant of the Philippines on December 10, 1898 when Spain ceded the
Philippines to the United States by virtue of the Treaty of Paris. Said Treaty pertinently
provides:
xxx

Spanish subjects, natives of the Peninsula, residing in the territory over which Spain by
the present treaty relinquishes or cedes her sovereignty, may remain in such territory or
may remove therefrom, retaining in either event all their rights of property, including the
right to sell or dispose of such property or of its proceeds; and they shall also have the
right to carry on their industry, commerce, and professions, being subject in respect
thereof to such laws as are applicable to other foreigners. In case they remain in the
territory they may preserve their allegiance to the Crown of Spain by making,
before a court of record, within a year from the date of the exchange of
ratifications of this treaty, a declaration of their decision to preserve such
allegiance; in default of which declaration they shall be held to have renounced it
and to have adopted the nationality to the territory in which they may reside.

The civil rights and political status of the native inhabitants of the territories hereby
ceded to the United States shall be determined by the Congress.
In relation to this Treaty, the Philippine Bill of 1902, provided as follows:
SEC. 4. That all inhabitants of the Philippine Islands continuing to reside therein
who were Spanish subjects on the eleventh day of April eighteen hundred ninety-
nine, and then resided in the Philippine Islands, and their children born
subsequent thereto shall be deemed and held to be citizens of the Philippine
Islands and as such entitled to the protection of the United States, except such as shall
have elected to preserve their allegiance to the Crown of Spain in accordance with the
provisions of the treaty of peace between the United States and Spain signed at Paris
December tenth, eighteen hundred and ninety-eight.
while the Jones Law provided as follows:
SEC. 2. That all inhabitants of the Philippine Islands who were Spanish subjects
on the eleventh day of April eighteen hundred and ninety-nine, and then resided
in said Islands, and their children born subsequent thereto, shall be deemed and
held to be citizens of the Philippine Islands, except such as shall have elected to
preserve their allegiance to the Crown of Spain in accordance with the provisions of the
treaty of peace between the United States and Spain, signed at Paris December tenth,
eighteen hundred and ninety-eight, and except such others as have since become
citizens of some other country: Provided, That the Philippine Legislature, herein
provided for, is hereby authorized to provide by law for the acquisition of Philippine
citizenship by those natives of the Philippine Islands who cannot come within the
foregoing provisions, the natives of the insular possessions of the United States, and
such other persons residing in the Philippine Islands who are citizens of the United
States, or who could become citizens of the United States under the laws of the Untied
States residing therein.
The death certificate of Lorenzo Pou, Exhibit S shows he died at age 84 in San Carlos,
Pangasinan. By the Treaty of Paris, the Philippine Bill of 1902 and the Jones Law,
Lorenzo Pou was a citizen of the Philippines. Allan F. Poe followed the citizenship of his
father (Lorenzo) as a Filipino. Allan F. Poe can also be considered as a Filipino by birth.
He was born in the Philippines on November 27, 1916, before the 1935 Constitution. He
studied, worked, lived and died in the Philippines. [20] His Filipino citizenship is
transmitted to his son, respondent Poe. The attempt of petitioner to cast doubt on the
Filipino citizenship of Allan F. Poe is an exercise in futility.
E.

TO DISQUALIFY RESPONDENT POE BECAUSE HE IS ILLEGITIMATE WILL

VIOLATE OUR TREATY OBLIGATION.
The Convention on the Rights of the Child was adopted by the General Assembly of the
United Nations on November 20, 1989. The Philippines was the 31 st state to ratify the
Convention in July 1990 by virtue of Senate Resolution 109. The Convention entered
into force on September 2, 1990. A milestone treaty, it abolished all discriminations
against children including discriminations on account of birth or other
status. Part 1, Article 2 (1) of the Convention explicitly provides:
Article 2
1. State Parties shall respect and ensure the rights set forth in the present
Convention to each child within their jurisdiction without discrimination of any kind,
irrespective of the childs or his or her parents or legal guardians race colour, sex,
language religion, political or other opinion, national, ethnic or social origin, property,
disability, birth or other status.
The Convention protects in the most comprehensive way all rights of children: political
rights, civil rights, social rights, economic rights and cultural rights. It adopted the
principle of interdependence and indivisibility of childrens rights. A violation of one right
is considered a violation of the other rights. It also embraced the rule that all actions of a
State concerning the child should consider the best interests of the child.

Pursuant to Article VII, Section 21 of the 1987 Constitution, this Convention on the
Rights of the child became valid and effective on us in July 1990 upon concurrence by
the Senate. We shall be violating the Convention if we disqualify respondent Poe just
because he happened to be an illegitimate child. It is our bounden duty to comply with
our treaty obligation pursuant to the principle of pacta sunct servanda. As we held in La
Chemise Lacoste, S.A. vs. Fernandez,[21] viz:
xxx

For a treaty or convention is not a mere moral obligation to be enforced or not at the
whims of an incumbent head of a Ministry. It creates a legally binding obligation on the
parties founded on the generally accepted principle of international law of pacta sunct
servanda which has been adopted as part of the law of our land. (Constitution, Article II,
Section 3)
Indeed there is no reason to refuse compliance with the Convention for it is in perfect
accord with our Constitution and with our laws.

Moreover to disqualify respondent Poe due to his illegitimacy is against the trend in civil
law towards equalizing the civil rights of an illegitimate child with that of a legitimate
child. Called originally as nullius filius or no ones child, an illegitimate child started
without any birthright of significance. The passage of time, however, brought about the
enlightenment that an illegitimate should not be punished for the illicit liaison of his
parents of which he played no part. No less than our Chief Justice Hilario G. Davide,
Jr., then a Commissioner of the Constitutional Commission, proposed the adoption of
the following radical provision in the 1987 Constitution, viz: All children regardless of
filiations shall enjoy the same social protection. In an exchange with
Commissioner Nolledo, he explained its rationale as follows: [22]
xxx

Mr. Nolledo. Would it be appropriate to say that social protection is earned and should
not be imposed by legal mandate?

Mr. Davide: Mr. Presiding Officer, it is not, it may not be imposed but we are framing a
Constitution to provide for a directive policy or directive principles of state policy, there is
no harm in making it as a directive principle or a state policy especially if it would
affect the lives of citizens who, I would like to state again, are not responsible for
a misfortune in life.
Following the undeniable injustice committed to illegitimate children due alone to the
accident of their birth, the universal trend of laws today is to abolish all invidious
discriminations against their rights. Slowly, they were granted more rights until their civil
rights are now equal to the rights of legitimate children. The Philippines has joined the
civilized treatment of illegitimate children. Hence, under Article 178 of our New Family
Code, a child born out of wedlock of parents without any impediment to marry (like the
parents of respondent Poe) can be legitimated. If legitimated, Article 179 of the same
Code provides that the child shall enjoy the same civil rights as a legitimate child.
In Ilano vs. Court of Appeals,[23] this Court expressed the enlightened policy that
illegitimate children were born with a social handicap and the law should help them to
surmount the disadvantages facing them through the misdeeds of their parents. The
march towards equality of rights between legitimate and illegitimate children is
irreversible. We will be medieval in our outlook if we refuse to be in cadence with this
world wide movement.
V.

EPILOGUE

Whether respondent Fernando Poe, Jr. is qualified to run for President involves a
constitutional issue but its political tone is no less dominant. The Court is split down the
middle on the citizenship of respondent Poe, an issue of first impression made more
difficult by the interplay of national and international law. Given the indecisiveness of the
votes of the members of this Court, the better policy approach is to let the people decide
who will be the next President. For on political questions, this Court may err but the
sovereign people will not. To be sure, the Constitution did not grant to the unelected
members of this Court the right to elect in behalf of the people.

IN VIEW WHEREOF, the petitions in G.R. Nos. 161434, 161634 and 161824
are DISMISSED.
[1]
Exh. B-2.

[2]
Exh. B-2-a.

[3]
Exh. A (Certificate of Birth of Ronald Allan Poe).

[4]
Exh. B; Exh. B-3 (English translation).

[5]
Exh. 5.

[6]
Exhs. 6; 6-A; 6-B; 6-C; 6-D.

[7]
Exh. 7.

[8]
Exh. 8-b.

[9]
Exh. 9.

[10]
Exh. 3.

[11]
Exh. 16.

[12]
Exhs. 5; 17; 18; 19.

[13]
Exh. 20.

[14]
G.R. No. 161434.

[15]
G.R. No. 161634.

[16]
248 SCRA 300 (1995).

[17]
See pp. 18, 19, 29, 33, 35 and 39 of Motion.

[18]
See pp. 20, 21, 23, 28, 30, 32, 34, 38, 39, 41 and 45 of the Memorandum.
[19]
Rule 129, Section 4.

[20]
Exhibit 7.

[21]
129 SCRA 373 (1984).

[22]
V Record 67, Sept. 25, 1986, p. 69.

[23]
230 SCRA 242 (1994).

CONCURRING OPINION

SANDOVAL-GUTIERREZ, J.:

This Court has repeatedly stressed the importance of giving effect to the sovereign will
in order to ensure the survival of our democracy. In cases where the sovereignty of the
people is at stake, we must not only be legally right but also politically correct. We
cannot fail by making the people succeed.[1] In resolving election cases, a dominant
consideration is the need to effectuate the will of the electorate x x x. We cannot
frustrate this sovereign will on highly arguable technical considerations. In case of
doubt, we should lean towards a rule that will give life to the peoples political
judgment.[2]

May this Court exercise its

judicial power to disqualify a
candidate before the election?

The candidates for President, Gloria Macapagal-Arroyo, Fernando Poe (or FPJ), Raul
Roco, Ping Lacson, and Eddie Villanueva are on the campaign trail. But petitioner
Fornier would have this Court pull out FPJ from the track.

I submit that while the campaign for the Presidency is on, this Court may not exercise its
judicial power to disqualify a candidate. That would definitely wreck the constitutional
right of the people to choose their candidate. Only after the election is over and a winner
is proclaimed and the result of the election is contested, may this Court participate and
decide the contest.

How is the President elected? Only by direct vote of the people. He shall not be
chosen by the incumbent President. He shall not be elected by Congress nor by the
Commission on Elections. And neither by this Court. Only by direct vote of the people.

While the President is elected by direct vote of the people, they may only vote for one
who is a candidate. It does not matter whether they believe he would not be the best
President.

Petitioner Fornier would have this Court, in the exercise of its judicial power, intrude
into the right of the voters to elect by direct vote the President by removing respondent
Fernando Poe, Jr. from among those whom they may vote for President, thereby
constricting or limiting the candidates, and consequently, the right of the people to
vote (or not to vote) for respondent Poe.

The Constitution does not allow such intervention. Mr. Justice Vicente V. Mendoza, a
retired member of this Court, in his Separate Opinion in Romualdez-Marcos vs.
COMELEC,[3] said, In my view, the issue in this case is whether the Commission on
Elections has the power to disqualify candidates on the ground that they lack eligibility
for the office to which they seek to be elected. I think that it has none and that the
qualifications of candidates may be questioned only in the event they are elected, by
filing a petition for quo warranto or an election protest in the appropriate forum.

The assailed ruling of the COMELEC dismissing Forniers petition is consistent with the
above view.

The impact of a proceeding to disqualify a candidate, particularly a leading candidate for

President, after the electoral process has started, is shown by the contemporary events.
The instant cases have agitated the people. Those who support respondent Poe, and
their number is not miniscule, openly accuse the supporters of President Arroyo as
those behind the effort to disqualify respondent Poe. From well-publicized reports of the
campaign, his campaign sorties have been welcomed with enthusiasm exceeding those
of President Estrada. What can not be ignored is that those who support respondent
Poe come principally from the masses those whose voices, albeit an integral part
of the sovereign will of the people, are generally silent and heard only through the
ballots. The intervention by this Court, through the exercise of its judicial power on
grounds that are at best highlydisputable, can not but be viewed as political. Indeed,
what is worrisome is that the termination of the candidacy of respondent Poe, who
appears to be a leading candidate, will in the long term impair the mandate of the
people.

What is at stake is not just the candidacy of respondent Poe or the right of the masses
to vote for him. Equally at stake is the credibility of this Court. It should not enter the
political thicket. Intrusion into a campaign for President, and worse, in the right of the
people to choose their candidate, is an intrusion into their vested right to elect by direct
vote the President.

History will judge whether this Court ought to have declined in determining if FPJ is a
natural born Filipino citizen even before the presidential election. I am not certain
whether history will judge kindly. What I can foresee is that disqualifying respondent Poe
will be viewed as directed against the masses, a situation not allowed by the
Constitution.

While this Court, in exercising its judicial power, should not cater to popular support, the
force of its Decisions springs from the faith of the people reposed in its fairness and
integrity. That faith is not strengthened and respect and obedience to its Decisions are
not enhanced had this Court intruded in the choice of President by the people.

Let it not be forgotten that the historic core of our democratic system is political
liberty, which is the right and opportunity to choose those who will lead the
governed with their consent. This right to choose cannot be subtly interfered with
through the elimination of the electoral choice. The present bid to disqualify
respondent Poe from the presidential race is a clear attempt to eliminate him as one of
the choices. This Court should resist such attempt. The right to choose is the single
factor that controls the ambitions of those who would impose through force or
stealth their will on the majority of citizens. We should not only welcome electoral
competition, we should cherish it. Disqualifying a candidate, particularly the popular
one, on the basis of doubtful claims does not result to a genuine, free and fair
election. It results to violence. In some countries, incumbents have manipulated every
resource at their disposal to eliminate electoral choice. The result is a frustrated and
angry public; a public that has no place to express this anger because the electoral
system is rigged to guarantee the re-election of the incumbents in office. We have seen
Edsa I and Edsa II, thus, we know that when democracy operates as intended, an
aroused public can replace those who govern in a manner beyond the parameters
established by public consent.

The Philippines is not alone in her predicament. Iran is besieged by the same political
crisis. The Guardian Council, an unelected hard-line constitutional watchdog, has
barred more than 3,000 of the 8,200 candidates in the 290member parliament. State
broadcast media controlled by hard-liners said that the candidates were disqualified
because they lack the necessary legal qualifications. This prompted Irans largest
reformist party, the Islamic Iran Participation Front, to state: We consider the
disqualification as national treason and an attempt to transform the Republic into
a despotic establishment. Disqualifications deny the people of their
constitutional right to choose and be chosen Thus, threatening to resign, Irans
reformist government stressed that, if the government feels that it cannot fulfill its
responsibilities in protecting legitimate freedoms, such as defending the rights of the
nation for a free and fair elections, then it does not believe that there is any reason to
stay in power.

This Court, as the last guardian of democracy, has the duty to protect the right of our
nation to a genuine, free and fair election. Article 25 of the International Covenant on
Civil and Political Rights guarantees that every citizen shall have the right and the
opportunity to vote and be elected at genuine periodic elections which shall be by
universal and equal suffrage and shall be held by secret ballot, guaranteeing the free
expression of the will of the electors. There can be no genuine, free and fair election
when the peoples right to choose is manipulated or eliminated. Political liberty cannot
be subverted to the personal ambitions of some politicians. This Court should take an
active stance in crushing the devious ploy, for in the last analysis, its handling of the
electoral issues is the fundamental measure of the present governments credibility.
When the people vote on May 10 and cast their ballots for President, they will be
exercising a sovereign right. They may vote for respondent Poe, or they may not. When
they vote, they will consider a myriad of issues, some relevant, others trivial, including
the eligibility of the candidates, their qualities of leadership, their honesty and sincerity,
perhaps including their legitimacy. That is their prerogative. After the election, and only
after, and that is what the Constitution mandates the election of whoever is proclaimed
winner may be challenged in an election contest or a petition for quo warranto. Where
the challenge is because of ineligibility, he will be ousted only if this Court exerts utmost
effort to resolve the issue in a manner that would give effect to the will of the majority,
for it is merely sound public policy to cause elective offices to be filled by those who are
the choice of the majority.[4]

II

Whether the COMELEC committed

grave abuse of discretion in dismissing
Forniers petition for disqualification
against respondent.

To begin with, in Salcedo II vs. Commission on Elections,[5] we emphasized that there

is only one instance where a petition questioning the qualifications of a registered
candidate to run for the office for which his certificate of candidacy was filed can be
raised before election. That only instance is when the petition is based on Section 78
of the Omnibus Election Code, quoted as follows:
Section 78. Petition to deny due course or to cancel a certificate of candidacy. A
verified petition seeking to deny due course or to cancel a certificate of candidacy may
be filed by any person exclusively on the ground that any material representation
contained therein as required under Section 74 hereof is false. The petition may be filed
at any time not later than twenty-five days from the time of the filing of the certificate of
candidacy and shall be decided, after due notice and hearing, not later than fifteen days
before the election.
As stated in the above provisions, in order to justify the cancellation of the
certificate of candidacy, it is essential that the false representation mentioned
therein pertains to a material matter for the sanction imposed by this provision would
affect the substantive rights of a candidate the right to run for the elective post for
which he filed the certificate of candidacy.[6]
Aside from the requirement of materiality, a false representation under Section 78 must
consist of a deliberate attempt to mislead, misinform, or hide a fact which would
otherwise render a candidate ineligible. [7] In other words, it must be made with an
intention to deceive the electorate as to ones qualifications for public office. [8]

The Fornier petition before this Court is one brought under Rule 65 of the 1997 Rules of
Civil Procedure, as amended. What is to be determined, therefore, is whether the
COMELEC acted with grave abuse of discretion in issuing its assailed Resolutions of
January 23, 2004 and February 6, 2004 holding that considering that the evidence
presented by petitioner is not substantial, we declare that respondent did not commit
any material misrepresentation when he stated in his Certificate of Candidacy that he is
natural born Filipino citizen.

Petitioner Forniers basic allegations in his petition filed with the COMELEC are:
1. Respondent Poe committed false material representation by stating in his
Certificate of Candidacy that he is a natural born Filipino citizen; and

2. He knowingly made such false representation.

According to petitioner, respondent Poe is in fact not a citizen of the Philippines, much
more a natural born Filipino citizen, considering that both his parents are aliens.
Annexed to the petition as its principal basis is a copy of a Marriage Contract dated
July 5, 1936 between Allan Fernando Poe and Paulita Gomez. Since the Marriage
Contract states the nationality of respondents father, Allan Fernando Poe, and his
grandfather, Lorenzo Pou, as Espaol, respondent Poe is also Espaol. Even
assuming that Allan Fernando Poe is a Filipino, still, respondent Poe could not have
validly acquired Filipino citizenship from his father because the marriage of his parents
is void. Respondent Poes father married Paulita Gomez on July 5, 1936, which
marriage was subsisting at the time of the marriage of respondent Poes father to his
mother, Bessie Kelley, an American citizen. Fornier then concluded that respondent
Poe, being illegitimate, follows the citizenship of his mother.

Devastating to the Fornier petition is that the Contract of Marriage between Allan
Fernando Poe and Paulita Gomez (Annex C, Petition; Exhibits B, B-1, B-2) and
the Birth Certificate of Allan Fernando Poe (Exhibit C), appear to have been falsified
by Director Ricardo L. Manapat of the National Archives. The records of the hearing of
the Senate Committee on Constitutional Amendments, and Revision of Codes and
Laws held on January 21, 2004 and February 2, 2004, which incidentally were shown
live on television and aired over the radio, show in shocking detail how the falsification
was so brazenly done. The Court may not gloss over these casually. The details are
spread in the record of these proceedings. Given this pathetic state of petitioners
evidence, we cannot conclude that he has proved his allegations by sufficient evidence.
Without doubt, the COMELEC, in dismissing Forniers petition for lack of substantial
evidence, did not gravely abuse its discretion.

It bears stressing that petitioner has the burden of establishing his allegations of
respondents material misrepresentation in his Certificate of Candidacy.

Ei incumbit probation qui dicit, non que negat, otherwise stated, he who asserts, not he
who denies, must prove.[9] What I observe from his allegations is a misconception as to
whom the burden of proof lies.

Section 1, Rule 131 of the Revised Rules on Evidence provides:

Sec. 1. Burden of proof. Burden of proof is the duty of a party to present
evidence on the facts in issue necessary to establish his claim x x x by the
amount of evidence required by law.
In Borlongan vs. Madrideo,[10] we held:
The burden of proof x x x is on the plaintiff who is the party asserting the affirmative of
an issue. He has the burden of presenting evidence required to obtain a favorable
judgment, and he, having the burden of proof, will be defeated if no evidence were
given on either side.
Obviously, petitioner Fornier failed to prove his allegations. The documentary evidence
he presented in support of his allegation that respondent Poe made a false material
representation that he is a natural born Filipino citizen are falsified. Likewise, Forniers
allegation that respondent Poe fully knew such false representation, has not been
substantiated. Indeed, his allegations remain as mere allegations. Hence, the
COMELEC correctly dismissed his petition.

The only way petitioner can be entitled to a writ of certiorari from this Court is to show
that the COMELEC committed grave abuse of discretion. For this Court to issue the
extraordinary writ of certiorari, the tribunal or administrative body must have issued the
assailed decision, order or resolution in a capricious and despotic manner.[11] Grave
abuse of discretion means such capricious and whimsical exercise of judgment as is
equivalent to lack of jurisdiction, or, in other words where the power is exercised in an
arbitrary or despotic manner by reason of passion or personal hostility, and it 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 or to act at all in contemplation of law. [12]

We cannot discern from the records any indication that the COMELEC gravely abused
its discretion in dismissing Forniers petition. Indeed, his availment of the extraordinary
writ of certiorari is grossly misplaced.

III

Whether the respondent committed a

material and false representation when
he declared in his Certificate of
Candidacy that he is a natural born
Filipino citizen.

At any rate, in order to show that respondent Poe did not commit a false material
representation in his certificate of candidacy, I believe that this Court should decide
whether respondent Poe is a natural born Filipino citizen on the basis of the evidence at
hand.

The COMELECs First Division held that respondent Poe did not commit any material
misrepresentation when he stated in his Certificate of Candidacy that he is a natural
born Filipino citizen because his father, Allan Fernando Poe, is a Filipino citizen; and
that by virtue of the principle of jus sanguinis, he is also a Filipino citizen under the 1935
Constitution.

In Valles vs. Commission on Eelections,[13] we emphasized that the Philippine law on

citizenship adheres to the principle of jus sanguinis. Thereunder, a child follows the
nationality or citizenship of the parents regardless of the place of his birth.

Respondents Certificate of Birth reveals that he was born on August 20, 1939 at St.
Lukes Hospital, Magdalena Street, Manila to Allan Fernando Poe, a Filipino
citizen, and Bessie Kelley, an American citizen. This was almost four (4) years after the
1935 Constitution took effect. Under Section 3, Article IV, the following are citizens of
the Philippines:
(1) Those who are citizens of the Philippine Islands at the time of the adoption of this
Constitution.

(2) Those born in the Philippine Islands of foreign parents who, before the adoption of
this Constitution had been elected to public office in the Philippine Islands.

(3) Those whose fathers are citizens of the Philippines.

(4) Those whose mothers are citizens of the Philippines and, upon reaching the age of
majority, elect Philippine citizenship.

(5) Those who are naturalized in accordance with law.

Pursuant to the above provision, the law in force at the time of his birth, respondent Poe
is a citizen of the Philippines, having been born to a Filipino father.

That respondent Poe is the son of Allan Fernando Poe is admitted by the parties.

According to petitioner, Allan Fernando Poe is a citizen of Spain as shown by the

Marriage Contract between him and Paulita Gomez stating that his parents, Lorenzo
Pou and Marta Reyes, are citizens of Spain. It follows that Allan Fernando Poe is also a
Spanish citizen. And clearly, respondent Poe could not have possibly acquired Filipino
citizenship from his father, Allan Fernando Poe, since the latter is a Spanish citizen.

Suffice it to state that this allegation must fail because the Marriage Contract between
Allan Fernando Poe and Paulita Gomez has been shown to be falsified.

It bears reiterating that petitioner Fornier does not dispute that Allan Fernando Poe is
the father of respondent Poe. Allans father is Lorenzo Pou, a Spanish subject and an
inhabitant of the Philippines on April 11, 1899 when Spain ceded the Philippines to the
United States by virtue of the Treaty of Paris. Specifically, this Treaty provides that:
Spanish subjects x x x may remain in such territory x x x. In case they remain in the
territory they may preserve their allegiance to the Crown of Spain by making, before a
court of record, within a year from the date of the exchange of ratifications of the treaty,
a declaration of their decision to preserve such allegiance; in default of which
declaration they shall be held to have renounced it and to have adopted the nationality
of the territory in which they may reside.
Relative to this Treaty, Section 4 of the Philippine Bill of 1902 provides:
That all inhabitants of the Philippine Islands continuing to reside therein who were
Spanish subjects on the leventh day of April, eighteen hundred and ninety-nine, and
then resided to the Philippine Islands, and their children born subsequent thereto shall
be deemed and held to be citizens of the Philippines and such entitled to the protection
of the United States, except such as shall have elected to preserve their allegiance to
the Crown of Spain in accordance with the provisions of the treaty of peace between the
United States and Spain signed at Paris December tenth, eighteen hundred and ninety-
eight.
Likewise, the Jones Law provides as follows:
That all inhabitants of the Philippine Islands who were Spanish subjects on the
eleventh day of April, eighteen hundred and ninety-nine, and then resided in said
Islands, and their children born subsequent thereto, shall be deemed and held to be
citizens of the Philippine Islands, except such as shall have elected to preserve their
allegiance to the Crown of Spain in accordance with the provisions of the treaty of
peace between the United States and Spain, signed at Paris December tenth, eighteen
hundred and ninety-eight, and except such others as have since become citizens of
some other country: x x x.
We held in the case of In Re Bosque:[14]
With respect to Spanish residents, it was agreed to accord them the right of electing
to leave the country, thus freeing themselves of subjection to the new sovereign, or to
continue to reside in the territory, in which case the expiration of the term of
eighteen months (April 11, 1899 to October 1900) without their making an express
declaration of intention to retain their Spanish nationality resulted in the loss of
the latter, such persons thereby becoming subjects of the new sovereign in the same
manner as the natives of these Islands.
Likewise, in Palanca vs. Republic,[15] we ruled:
A person, who was an inhabitant of the Philippine Islands and a naturalized subject of
Spain on the 11th day of April 1899, is a Filipino citizen, by virtue of the provisions of
Sec. 4 of the Act of Congress on 1 July 1902 and of Sec. 2 of the Act of Congress of 29
August 1916. Under the Constitution, he is also a citizen of the Philippines because he
was such at the time of the adoption of the Constitution.
Under the above provisions and jurisprudence, Lorenzo Pou was a citizen of the
Philippines. In turn, his son Allan Fernando Poe, followed his (Lorenzos) citizenship as
a Filipino. Section 3, Article IV of the 1935 Constitution states that those whose
fathers are citizens of the Philippines are Filipino citizens. We thus follow the
principle of jus sanguinis, the rule of blood relationship. Consequently, since Allan
Fernando Poe is a Filipino citizen, it follows that respondent Poe is also a Filipino
citizen. That he is a natural born Filipino citizen is beyond question. The following
provisions are in point:
SECTION 4. A natural born citizen is one who is a citizen of the Philippines from birth
without having to perform any act to acquire or perfect his Philippine citizenship.
(Article III of the 1973 Constitution)

SECTION 2. Natural born citizens are those who are citizens of the Philippines from
birth without having to perform any act to acquire or perfect their Philippine citizenship. x
x x. (Article IV of the 1987 Constitution).
Respondent Poe, being a Filipino citizen from birth without having to perform any act to
acquire or perfect his Philippine citizenship is, therefore, a natural born Filipino citizen.

Still, petitioner insists that even if respondent Poes father is a Filipino citizen, he
(respondent) is not a natural born Filipino citizen because he is an illegitimate child
whose citizenship follows that of his mother, Bessie Kelley, an American citizen.

On this point, the following amici curiae have a common opinion the illegitimacy of
respondent Poe is inconsequential in determining whether he is a natural born Filipino
citizen.

Mr. Justice Vicente V. Mendoza said:

For there is really no difference in principle between, on the one hand, the illegitimate
child of a Filipino mother and an alien father, and, on the other hand, the illegitimate
child of a Filipino father and an alien mother. As long as the childs filiation to his
supposed father is established, it does not matter whether he is legitimate or an
illegitimate child.
Rev. Fr. Joaquin G. Bernas, former Constitutional Commissioner, advanced the
following view:
In conclusion, therefore, when the Constitution says: The following are citizens
of the Philippines: Those whose fathers are citizens of the Philippines, the
Constitution means just that without invidious distinction.Ubi lex non distinguit nec
nos distinguere debemus, especially if the distinction has no textual foundation in the
Constitution, serves no state interest, and even imposes an injustice on an innocent
child. What flow from legitimacy are civil rights; citizenship is a political right which flows
not from legitimacy but from paternity. And paternity begins when the ovum is fertilized
nine months before birth and not upon marriage or legitimation.
Dean Merlin M. Magallonas theory is reproduced as follows:
The transmissive essence of citizenship here is clearly the core principle of blood
relationship or jus sanguinis. On this account, the derivation of citizenship from a person
or the transmission of citizenship to his child springs from the fact that he is the father.
Thus, paternity as manifestation of blood relationship is all that is needed to be
established. To introduce a distinction between legitimacy or illegitimacy in the
status of the child vis--vis the derivation of his citizenship from the father
defeats the transmissive essence of citizenship in blood relationship. The text of
the law which reads Those whose father are citizens of the Philippines becomes an
embodiment of the kernel principle of blood relationship, which provides no room for
the notion of citizenship by legitimacy or legitimation.
The ascertainment of the meaning of the provision of the Constitution begins with the
language of the document itself. The words of the Constitution should as much as
possible be understood in the sense they have in common use and given their ordinary
meaning. The reason for this is because the Constitution is not primarily a lawyers
document but essentially that of the people, in whose consciousness is should even be
present as an important condition for the rule of law to prevail. [16] Section 3, Article IV of
the 1935 Constitution is very clear. As the provision does not distinguish between a
legitimate child and an illegitimate child of a Filipino father, we should not make a
distinction.

In fine, I reiterate that the COMELEC did not gravely abuse its discretion in rendering its
assailed Resolutions dated January 23, 2004 and February 6, 2004.

WHEREFORE, I concur with Justice Jose C. Vitug in his ponencia and with Senior
Justice Reynato S. Puno in his Separate Opinion DISMISSING Forniers petition.

[*]
I concur in the retiocination and conclusion of the majority that this Court has no
jurisdiction over peitions.
[1]
Frivaldo vs. COMELEC, G.R. No. 120295, June 28, 1996, 257 SCRA727.

[2]
Concurring Opinion of Justice Reynato S. Puno in Romualdez-Marcos vs. COMELEC,
G.R. No. 119976, September 18, 1995, 248 SCRA 300, 364-365.

[3]
Supra.

[4]
Frivaldo vs. COMELEC, supra.

[5]
G.R. No. 135886, August 16, 1999, 312 SCRA 447, 456-457, citing Aznar vs.
Commission on Elections, 185 SCRA 703 (1990).

[6]
Ibid. at 455.

[7]
Romualdez-Marcos vs. Commission on Elections, supra at 326.

[8]
Salcedo II vs. Commission on Elections, supra. at 459.

[9]
Balanay vs. Sandiganbayan, G.R. No. 112924, October 20, 2000, 344 SCRA 1.

[10]
G.R. No. 120267, January 225, 2000, 323 SCRA 248, 255, citing Transpacific
Supplies, Inc. vs. Court of Appeals, 235 SCRA 494, 502 (1994); Geraldez vs. Court of
Appeals, 230 SCRA 320, 330 (1994); Republic vs. Court of Appeals, 182 SCRA 290,
301 (1990); and Summa Insurance Corporation vs. Court of Appeals, 253 SCRA 175
(1996).

[11]
Malinias vs. COMELEC, G.R. No. 146943, October 4, 2002, 390 SCRA 480.

[12]
Benito vs. COMELEC, G.R. No. 134913, January 19, 2001, 349 SCRA 705, 713-714,
citing Cuizon vs. Court of Appeals, 289 SCRA 159 (1998).

[13]
G.R. No. 137000, August 9, 2000, 337 SCRA 543, 549.

[14]
G.R. No. 666, January 14, 1902, 1 Phil. 88.

[15]
G.R. No. L-301, April 7, 1948, 80 Phil. 578, 584.
[16]
Separate Opinion of J. Gutierrez in Ernesto B. Francisco, Jr. vs. The House of
Representatives, G.R. Nos. 160261, 160262, 160263, 160277, 160292, 160295,
160310, 160318, 160342, 160343, 160360, 160365, 160370, 160376, 160392, 160397,
160403 & 160405, November 10, 2003, citing J.M. Tuazon & Co., Inc. vs. Land Tenure
Administration, 31 SCRA 413 (1970); Ordillo vs. Commission on Elections, 192 SCRA
100 (1990); Occea vs. Commission on Elections, 95 SCRA 755 (1980); and Agpalo,
Statutory Construction, 1995 Ed. at 344.

SEPARATE OPINION

AZCUNA, J.:

Present your evidence and dont be nervous . . . .

- Alice in Wonderland

[This gets] curioser and curioser . . . .

- Through the Looking Glass

These are petitions that, directly or indirectly, seek to disqualify a candidate for the
Presidency of the land.

Two of the petitions seek a direct action for this purpose, those of petitioners Tecson, et
al., and Velez. These two petitions fail outright. The contest they rely on is as yet non-
existing, since it refers to a situation when someone has been proclaimed a winner after
the elections and his proclamation is challenged in a contest. The provision in the
Constitution (Art. VII, Sec. 4, par. 7, Constitution) that says that the Supreme Court,
sitting en banc, shall be the sole judge of all contests relating to the election, returns,
and qualifications of the President or Vice-President, cannot be invoked before the
elections.
The petition of Fornier, on the other hand, took a different route. Fornier started by filing
a petition in the Commission on Elections and, having lost there, he now comes to us
for relief.

Precisely what was Forniers case in the Comelec?

Fornier sought to disqualify Fernando Poe, Jr. from running for the Presidency on the
ground that he stated in his certificate of candidacy a material statement that is false.
What was that? The statement that he was a natural-born Filipino. And what did the
Comelec do? It first held, in its First Division, that it had no jurisdiction to rule on the
issue, then, en banc, it held that, in any event, Fernando Poe, Jr. has not been shown to
have deliberately misrepresented his citizenship even assuming that what he said was
false. It then concluded that there is no ground to cancel his certificate of candidacy
because by a material statement that is false is meant a deliberatefalsehood.

Now, Fornier seeks to declare the Comelec en banc decision as erroneous and/or done
with grave abuse of discretion amounting to lack or excess of jurisdiction.

Fornier argues that the Comelec en banc erred and/or gravely abused its discretion in
that it should have squarely ruled on whether or not the statement of Poe, Jr. regarding
his citizenship is false. Fornier further argues that the statement is in fact false so that
Poe, Jr. is not qualified to run for President and should have been so declared and/or
should be so declared by us now.

The first question is, do we have power or jurisdiction to review the Comelec en
banc decision?

I say that we do, on two counts: First, under the specific provision of the Constitution
stating that any decision, order, or ruling of the Comelec may be brought to us
on certiorari by the aggrieved party within thirty days from receipt of a copy thereof (Art.
IX, A., Sec. 7, Constitution). And second, under our power to determine whether or not
there has been a grave abuse of discretion amounting to lack or excess of jurisdiction
on the part of any branch or instrumentality of the Government (Art. VIII, Sec. 1,
Constitution).

Addressing the subject at hand, how do we proceed?

First, by recognizing that we can only resolve questions of law and of jurisdiction, not of
facts.

Is the question whether or not Fernando Poe, Jr. made a material representation that is
false in his certificate of candidacy one of law, of jurisdiction, or of facts?

I submit that it has aspects of all three. We can resolve only the first and second (law
and jurisdiction) but not the third (factual) aspects.

Accordingly, we shall proceed on the basis principally of three undisputed facts. These
are:
1. The fact that Fernando Poe, Jr. was born on August 20, 1939 (Birth Certificate);

2. The fact that Fernando Poe, Sr. and Bessie Kelley (Poe, Jr.s mother) were
married on September 16, 1940 (Marriage Contract); and

3. The fact that Bessie Kelley was an American citizen (Admission in the Answer of
Poe, Jr.).
I first wanted to refer the case back to the Comelec for reception of more evidence to
cover gaps in the factual premises. There being no majority to sustain that course, I
have to proceed by seeking to resolve the issues raised on the basis of the facts
available to us now.

From the foregoing facts, Fornier argues that Poe, Jr. is shown to be an illegitimate
child, since he was born before, or outside of, marriage, and thus, applying a number of
our decisions in the past,[1] he follows the citizenship of his mother. Poe, Jr., therefore,
was an American citizen at birth. Thus, he is not a natural-born Filipino, for the
Constitution defines that term to mean one who is so at birth without having to perform
any act to acquire or perfect his citizenship (Art. IV, Sec. 2, Constitution). Upon this
reasoning, Fornier rests his case, arguing that the Comelec cannot evade this issue as
its goes into the falsity of the statement made in the certificate of candidacy (which
Fornier claims was deliberately made) and, it also goes into the qualifications of a
candidate for President, which the Comelec is empowered to determine even before the
elections.
Is he right?

I submit that he is not. Forniers case rests on the premise that Fernando Poe, Jr. is an
illegitimate child at birth.

This takes us into the realm of civil law, regarding which we are thankful for the
excellent presentation of amicus curiae Professor Ruben C. Balane, and under which
an illegitimate (natural) child becomes legitimated by the subsequent marriage of his
parents.

It is true that under the Old Civil Code, prevailing when Poe, Jr. was born, the effects of
legitimation retroact only to the time of the marriage, and not to the time of birth.
[2]
However, the New Civil Code, effective on August 30, 1950, made the effects retroact
to the time of the birth of the child.[3] It is also true that the Old Civil Code required, in
addition to the marriage, an acknowledgment by the parent(s) in the birth certificate, a
will or any public instrument.[4] Under the New Civil Code, however, this was liberalized
so that acknowledgment can be done also in a statement before a court of record or in
any authentic writing.[5] Furthermore, these new provisions of the law are made
expressly applicable to persons born under the old regime if these are beneficial to
them.[6] And, finally, under the Family Code of 1988, even the need for acknowledgment
has been dropped, and retroactivity is also provided for, without prejudice to vested
rights.[7]

Now, what we are concerned with here are not the civil rights of the person -- whether to
support or to succession in the estate. And, as admitted by Forniers counsel during the
oral arguments, violation of vested rights are not presumed but must be proved, which
has not been done here. Accordingly, at issue here is simply political status as a citizen,
as ably pointed out by amicus curiae Justice Vicente V. Mendoza. Therefore, I hold the
view that the new legislations retroact to benefit Poe, Jr., so that he must be deemed
legitimated as of his birth. Since a legitimated child has all the rights of a legitimate child
(and here, as stated, we refer only to citizenship), it is clear that, pursuant to the law, not
being illegitimate at birth, Poe, Jr. does not follow the citizenship of his mother.

As to the point that such legitimation needed an act after birth, namely, the marriage of
the parents, the same would not detract from the concept of a natural-born citizen. For
the definition in the Constitution refers to those who are citizens from birth without
having to perform any act to acquire or perfect their citizenship (Art. IV, Sec. 2,
Constitution). Thus, it speaks of an act having to be done by the child, to acquire or
perfect his citizenship, and does not cover acts of his parents.

From this it follows that Forniers case falls, since he has not proven that Poe, Jr. was
not a Filipino citizen at birth, a point that as petitioner he has the burden of showing.

For the nonce, this suffices. The rest of the questions, fortunately or unfortunately, will
have to be resolved in an election contest, should one become appropriate in the future,
in which the points brilliantly covered by amici curiae Rev. Joaquin G. Bernas, S.J. and
Dean Merlin M. Magallona regarding the determination of the citizenship of Poe, Jr.s
father, may find application once the pertinent factual premises shall have been duly
presented and established.

I VOTE, THEREFORE, to DISMISS the petitions of Tecson, et al., and Velez for lack of
jurisdiction, and to DENY the petition of Fornier for lack of merit.

[1]
Board of Immigration Commissioners v. Callano, 25 SCRA 890 (1968); Paa v. Chan,
21 SCRA 753 (1967);Zamboanga Transportation Co. v. Lim, 105 Phil. 1321
(1959); Serra v. Republic, G.R. No. L-4223, May 12, 1952; and United States v. Ong
Tianse, 29 Phil. 332 (1915).

[2]
Art. 123, Old Civil Code.

[3]
Art. 273, New Civil Code.

[4]
Art. 131, Old Civil Code.

[5]
Art. 278, New Civil Code.

[6]
Art. 2253, New Civil Code.

[7]
Art. 256, Family Code.
 DISSENTING OPINION

CARPIO, J.:

I dissent from the majority opinion.

The Antecedent Proceedings

Petitioner Fornier filed before the Commission on Elections (Comelec) a Petition for
Disqualification of Presidential Candidate Ronald Allan Kelley Poe a.k.a. Fernando Poe,
Jr. on the ground that Fernando Poe, Jr. (FPJ) is not a natural-born Philippine citizen.
The Comelec First Division dismissed the petition, ruling that petitioner failed to present
substantial evidence that FPJ committed any material misrepresentation when he
stated in his Certificate of Candidacy that he is a natural-born citizen. On motion for
reconsideration, the ComelecEn Banc affirmed the ruling of the First Division. Petitioner
Fornier now assails the Comelec En Banc resolution under Rule 64 in relation to Rule
65 of the Rules of Court.

The Undisputed Facts

The undisputed facts are based on two documents and the admission of FPJ. The first
document is the Birth Certificate of FPJ, showing he was born on 20 August 1939. The
Birth Certificate is an evidence of FPJ. [1] The second document is the Marriage
Certificate of Allan F. Poe and Bessie Kelley, showing that their marriage took place on
16 September 1940. The Marriage Certificate is also an evidence of FPJ. [2] Moreover,
FPJ admits that his mother Bessie Kelley was an American citizen. [3]

Based on these two documents and admission, the undisputed facts are: (1) FPJ was
born out of wedlock and therefore illegitimate, [4] and (2) the mother of FPJ was an
American citizen.

The Issues
The issues raised in Forniers petition are:

(a) Whether the Court has jurisdiction over the petition to disqualify FPJ as a
candidate for President on the ground that FPJ is not a natural-born Philippine
citizen;

(b) Whether FPJ is a natural-born citizen of the Philippines.

Jurisdiction

The Comelec has jurisdiction to determine initially the qualifications of all candidates.
Under Section 2(1), Article IX-C of the Constitution, the Comelec has the power and
function to [E]nforce and administer all laws and regulations relative to the
conduct of an election. The initial determination of who are qualified to file certificates
of candidacies with the Comelec clearly falls within this all-encompassing constitutional
mandate of the Comelec. The conduct of an election necessarily includes the initial
determination of who are qualified under existing laws to run for public office in an
election. Otherwise, the Comelecs certified list of candidates will be cluttered with
unqualified candidates making the conduct of elections unmanageable. For this reason,
the Comelec weeds out every presidential election dozens of candidates for president
who are deemed nuisance candidates by the Comelec. [5]

Section 2(3), Article IX-C of the Constitution also empowers the Comelec to [D]ecide,
except those involving the right to vote, all questions affecting elections x x
x. The power to decide all questions affecting elections necessarily includes the
power to decide whether a candidate possesses the qualifications required by law for
election to public office. This broad constitutional power and function vested in the
Comelec is designed precisely to avoid any situation where a dispute affecting elections
is left without any legal remedy. If one who is obviously not a natural-born Philippine
citizen, like Arnold Schwarzenneger, runs for President, the Comelec is certainly not
powerless to cancel the certificate of candidacy of such candidate. There is no need to
wait until after the elections before such candidate may be disqualified.

Under Rule 25 on Disqualification of Candidates of the Comelec Rules of Procedure, a

voter may question before the Comelec the qualifications of any candidate for public
office. Thus, Rule 25 provides:
Section 1. Grounds for Disqualification. Any candidate who does not possess all
the qualifications of a candidate as provided for by the Constitution or by existing
law or who commits any act declared by law to be grounds for disqualification may be
disqualified from continuing as a candidate.

Section 2. Who May File Petition for Disqualification. Any citizen of voting age, or
duly registered political party, organization or coalition of political parties may file with
the Law Department of the Commission a petition to disqualify a candidate on
grounds provided by law. (Emphasis supplied)
The Comelec adopted its Rules of Procedure pursuant to its constitutional power to
promulgate its own rules of procedure[6] to expedite the disposition of cases or
controversies falling within its jurisdiction.

The Comelec has ruled upon the qualifications of candidates, even if the Constitution
provides that some other body shall be the sole judge of the qualifications of the
holders of the public offices involved. The Court has upheld the jurisdiction of Comelec
to issue such rulings,[7] even when the issue is the citizenship of a candidate. [8]Thus, the
Comelec has jurisdiction to determine initially if FPJ meets the citizenship qualification
to run for President.

However, the Comelec En Banc, in its scanty resolution, failed to state the factual bases
of its ruling. The ComelecEn Banc also failed to rule conclusively on the issue
presented whether FPJ is a natural-born Philippine citizen. The Comelec En
Banc affirmed the First Division ruling that [W]e feel we are not at liberty to finally
declare whether or not the respondent is a natural-born citizen. In short, the
Comelec En Banc allowed a candidate for President to run in the coming elections
without being convinced that the candidate is a natural-born Philippine citizen. Clearly,
the Comelec En Banc acted with grave abuse of discretion. Under Section 1, Article VIII,
as well as Section 5, Article VIII, of the Constitution, the Court has jurisdiction to hear
and decide the issue in a petition for certiorari under Rule 64 in relation to Rule 65.

To hold that the Court acquires jurisdiction to determine the qualification of a candidate
for President only after the elections would lead to an absurd situation. The Court would
have to wait for an alien to be elected on election day before he could be disqualified to
run for President. If the case is not decided immediately after the election, an alien who
wins the election may even assume office as President before he is finally disqualified.
Certainly, this is not what the Constitution says when it provides that [N]o person may
be elected President unless he is a natural-born citizen of the Philippines.[9] The
clear and specific language of the Constitution prohibits the election of one who is not a
natural-born citizen. Thus, the issue of whether a candidate for President is a natural-
born Philippine citizen must be decided before the election.

Governing Laws

Since FPJ was born on 20 August 1939, his citizenship at the time of his
birth depends on the Constitution and statutes in force at the time of his birth. [10] FPJs
citizenship at the time of his birth in 1939, applying the laws in force in 1939, determines
whether he is a natural-born Philippine citizen.

Natural-born Philippine citizens are those who are citizens of the Philippines from
birth without having to perform any act to acquire or perfect their Philippine
citizenship.[11] If a person has to perform an act, such as proving in an administrative
or judicial proceeding, that an event subsequent to his birth transpired thus entitling
him to Philippine citizenship, such person is not a natural born citizen. [12]

The 1935 Constitution and the Spanish Civil Code, the laws in force in 1939, are the
governing laws that determine whether a person born in 1939 is a Philippine citizen at
the time of his birth in 1939. Any subsequent legislation cannot change the citizenship at
birth of a person born in 1939 because such legislation would violate the constitutional
definition of a natural-born citizen as one who is a Philippine citizen from birth. In short,
one who is not a Philippine citizen at birth in 1939 cannot be declared by subsequent
legislation a natural-born citizen.

General Principles

A legitimate child of a Filipino father follows the citizenship of the father. A child born
within wedlock is presumed to be the son of the father [13] and thus carries the blood of
the father. Under the doctrine of jus sanguinis, as provided for in Section 1(3), Article III
of the 1935 Constitution, a legitimate child, by the fact of legitimacy, automatically
follows the citizenship of the Filipino father.
An illegitimate child, however, enjoys no presumption at birth of blood relation to any
father unless the father acknowledges the child at birth. [14] The law has always required
that in all cases of illegitimate children, their filiation must be duly proved. [15] The only
legally known parent of an illegitimate child, by the fact of illegitimacy, is the mother of
the child who conclusively carries the blood of the mother. Thus, unless the father
acknowledges the illegitimate child at birth, the illegitimate child can only acquire the
citizenship of the only legally known parent - the mother.

However, if the Filipino father is legally known because the filiation (blood relation of
illegitimate child to the father) of the child to the Filipino father is established in
accordance with law, the child follows the citizenship of the Filipino father. This gives
effect, without discrimination between legitimate and illegitimate children, to the
provision of the 1935 Constitution that [T]hose whose fathers are citizens of the
Philippines[16] are Philippine citizens.

Nature of Citizenship

If the Filipino father acknowledges the illegitimate child at birth, the child is a natural-
born Philippine citizen because no other act after his birth is required to acquire or
perfect his Philippine citizenship. The child possesses all the qualifications to be a
Philippine citizen at birth.

If the Filipino father acknowledges the child after birth, the child is a Philippine citizen as
of the time of the acknowledgment. In this case, the child does not possess all the
qualifications to be a Philippine citizen at birth because an act - the acknowledgement of
the Filipino father - is required for the child to acquire or perfect his Philippine
citizenship. Statutory provisions on retroactivity of acknowledgment cannot be given
effect because they would be contrary to the constitutional definition of natural- born
citizens as those who are Philippine citizens at birth without having to perform any act to
acquire or perfect their Philippine citizenship.

If the illegitimacy of a child is established, there is no presumption that the child has the
blood of any man who is supposed to be the father. There is only a conclusive
presumption that the child has the blood of the mother. If an illegitimate child claims to
have the blood of a man who is supposed to be the childs father, such blood relation
must be established in accordance with proof of filiation as required by law.

Where the illegitimate child of an alien mother claims to follow the citizenship of the
putative father, the burden is on the illegitimate child to establish a blood relation to the
putative Filipino father since there is no presumption that an illegitimate child has the
blood of the putative father. Even if the putative father admits paternity after the birth of
the illegitimate child, there must be an administrative or judicial approval that such blood
relation exists upon proof of paternity as required by law.

Citizenship, being a matter of public and State interest, cannot be conferred on an

illegitimate child of an alien mother on the mere say so of the putative Filipino father.
The State has a right to examine the veracity of the claim of paternity. Otherwise, the
grant of Philippine citizenship to an illegitimate child of an alien mother is left to the sole
discretion of the putative Filipino father. For example, a Philippine citizen of Chinese
descent can simply claim that he has several illegitimate children in China. The State
cannot be required to grant Philippine passports to these supposed illegitimate children
born in China of Chinese mothers just because the putative Filipino father
acknowledges paternity of these illegitimate children. There must be either an
administrative or judicial determination that the claim of the putative Filipino father is
true.

The case of the illegitimate Vietnamese children, born in Vietnam of Vietnamese

mothers and allegedly of Filipino fathers, is illustrative. These children grew up in
Vietnam, many of them studying there until high school. These children grew up
knowing they were Vietnamese citizens. In 1975, a Philippine Navy vessel brought
them, together with their Vietnamese mothers, to the Philippines as Saigon fell to the
communists. The mothers of these children became stateless when the Republic of
(South) Vietnam ceased to exist in 1975. The Department of Justice rendered Opinion
No. 49 dated 3 May 1995 that being children of Filipino fathers, these Vietnamese
children, even if illegitimate, are Philippine citizens under Section 1(3), Article IV of the
1935 Constitution and Section 1(2), Article III of the 1973 Constitution. This Opinion is
cited by FPJ as basis for his claim of being a natural-born Philippine citizen. [17] However,
this Opinion categorically stated that before the illegitimate Vietnamese children may be
considered Filipino citizens it is necessary in every case referred to that such
paternity be established by sufficient and convincing documentary evidence.[18]
In short, the illegitimate child must prove to the proper administrative or judicial authority
the paternity of the alleged Filipino father by sufficient and convincing documentary
evidence. Clearly, an administrative or judicial act is necessary to confer on the
illegitimate Vietnamese children Philippine citizenship. The mere claim of the illegitimate
child of filiation to a Filipino father, or the mere acknowledgment of the alleged Filipino
father, does not automatically confer Philippine citizenship on the child. The State must
be convinced of the veracity of such claim and approve the same. Since the illegitimate
Vietnamese children need to perform an act to acquire or perfect Philippine citizenship,
they are not natural-born Philippine citizens. They become Philippine citizens only from
the moment the proper administrative or judicial authority approve and recognize their
filiation to their alleged Filipino fathers.

The rationale behind requiring that only natural-born citizens may hold certain high
public offices[19] is to insure that the holders of these high public offices grew up
knowing they were at birth citizens of the Philippines. In their formative years they
knew they owed from birth their allegiance to the Philippines. In case any other country
claims their allegiance, they would be faithful and loyal to the Philippines of which they
were citizens from birth. This is particularly true to the President who is the commander-
in-chief of the armed forces.[20] The President of the Philippines must owe, from birth,
allegiance to the Philippines and must have grown up knowing that he was a citizen of
the Philippines at birth. The constitutional definition of a natural-born Philippine citizen
would lose its meaning and efficacy if one who was at birth recognized by law as an
alien were declared forty years later[21] a natural-born Philippine citizen just because his
alleged Filipino father subsequently admitted his paternity.

Proof of Filiation

Article 131[22] of the Spanish Civil Code, the law in force in 1939, recognized only the
following as proof of filiation of a natural child:
a. acknowledgment in a record of birth;
b. acknowledgment in a will;
c. acknowledgment in some other public document.
To establish his Philippine citizenship at birth, FPJ must present either an
acknowledgement in a record of birth, or an acknowledgment in some other public
document executed at the time of his birth. An acknowledgment executed after birth
does not make one a citizen at birth but a citizen from the time of such acknowledgment
since the acknowledgment is an act done after birth to acquire or perfect Philippine
citizenship.

After the birth of one who is not a natural-born Philippine citizen, a subsequent
legislation liberalizing proof of filiation cannot apply to such person to make him a
natural-born citizen. A natural-born Philippine citizen is expressly defined in the
Constitution as one who is a citizen at birth. If a person is not a citizen at birth, no
subsequent legislation can retroactively declare him a citizen at birth since it would
violate the constitutional definition of a natural-born citizen.

Burden of Proof

Any person who claims to be a citizen of the Philippines has the burden of proving his
Philippine citizenship. Any person who claims to be qualified to run for President
because he is, among others, a natural-born Philippine citizen, has the burden of
proving he is a natural-born citizen. Any doubt whether or not he is natural-born citizen
is resolved against him. The constitutional requirement of a natural-born citizen, being
an express qualification for election as President, must be complied with strictly as
defined in the Constitution. As the Court ruled in Paa v. Chan: [23]
It is incumbent upon a person who claims Philippine citizenship to prove to the
satisfaction of the Court that he is really a Filipino. No presumption can be indulged in
favor of the claimant of Philippine citizenship, and any doubt regarding citizenship must
be resolved in favor of the State.
Since the undisputed facts show that FPJ is an illegitimate child, having been born out
of wedlock, the burden is on FPJ to prove his blood relation to his alleged Filipino father.
An illegitimate child enjoys no presumption of blood relation to any father. Such blood
relationship must be established in the appropriate proceedings in accordance with law.

Private party litigants cannot stipulate on the Philippine citizenship of a person because
citizenship is not a private right or property, but a matter of public and State interest.
Even if petitioner Fornier admits that FPJ, although illegitimate, is the son of Allan F.
Poe, such admission cannot bind the State for the purpose of conferring on FPJ the
status of a natural-born Philippine citizen or even of a naturalized citizen. Certainly, the
Court will not recognize a person as a natural-born Philippine citizen just because the
private party litigants have admitted or stipulated on such a status. In the present case,
the Solicitor General, as representative of the Government, is strongly disputing the
status of FPJ as a natural-born Philippine citizen.

Legitimation

Under Article 123[24] of the Spanish Civil Code, legitimation took effect as of the date of
marriage. There was no retroactivity of the effects of legitimation on the rights of the
legitimated child. Thus, a legitimated child acquired the rights of a legitimate child only
as of the date of marriage of the natural parents. Allan F. Poe and Bessie Kelley were
married on 16 September 1940 while FPJ was born more than one year earlier on 20
August 1939. Assuming that Allan F. Poe was FPJs natural father, the effects of
legitimation did not retroact to the birth of FPJ on 20 August 1939.

Besides, legitimation vests only civil, not political rights, to the legitimated child. As the
Court held in Ching Leng:[25]
The framers of the Civil Code had no intention whatsoever to regulate
therein political questions. Hence, apart from reproducing the provisions of the
Constitution on citizenship, the Code contains no precept thereon except that which
refers all matters of naturalization, as well as those related to the loss
and reacquisition of citizenship to special laws. Consistently with this policy, our Civil
Code does not include therein any rule analogous to Articles 18 to 28 of the Civil Code
of Spain, regulating citizenship. (Underscoring in the original)
Clearly, even assuming that the marriage of Allan F. Poe and Bessie Kelley legitimated
FPJ, such legitimation did not vest retroactively any civil or political rights to FPJ.

Treaty of Paris of 1898 and Philippine Bill of 1902

FPJ admits that his grandfather, Lorenzo Pou, was a Spanish citizen who came to the
Philippines from Spain.[26]To benefit from the mass naturalization under the Treaty of
Paris of 1898 and the Philippine Bill of 1902, FPJ must prove that Lorenzo Pou was an
inhabitant and resident of the Philippines on 11 April 1899. Once it is established that
Lorenzo Pou was an inhabitant and resident of the Philippines on 11 April 1899, then he
is presumed to have acquired Philippine citizenship under the Treaty of Paris of 1898
and the Philippine Bill of 1902.[27] Being an inhabitant and resident of the Philippines on
11 April 1899 is the determinative fact to fall under the coverage of the Treaty of Paris of
1898 and the Philippine Bill of 1902.[28]
There is, however, no evidence on record that Lorenzo Pou was a Philippine inhabitant
and resident on 11 April 1899. The date of arrival of Lorenzo Pou in the Philippines is
not known. If he arrived in the Philippines after 11 April 1899, then he could not benefit
from the mass naturalization under the Treaty of Paris of 1898 and the Philippine Bill of
1902. There is also no evidence that Lorenzo Pou was naturalized as a Philippine
citizen after 11 April 1899. Thus, there can be no presumption that Lorenzo Pou was a
Philippine citizen.

There is also no evidence on record that Allan F. Poe, the son of Lorenzo Pou and the
alleged father of FPJ, was naturalized as a Philippine citizen. Thus, based on the
evidence adduced there is no legal basis for claiming that Allan F. Poe is a Philippine
citizen. Nevertheless, there is no need to delve further into this issue since the Court
can decide this case without determining the citizenship of Lorenzo Pou and Allan F.
Poe. Whether or not Lorenzo Pou and Allan F. Poe were Philippine citizens is not
material in resolving whether FPJ is a natural-born Philippine citizen.

Convention on the Rights of the Child

The Philippines signed the Convention on the Rights of the Child on 26 January 1990
and ratified the same on 21 August 1990. The Convention defines a child to mean
every human being below the age of eighteen years unless, under the law applicable to
the child, majority is attained earlier. Obviously, FPJ cannot invoke the Convention
since he is not a child as defined in the Convention, and he was born half a century
before the Convention came into existence. FPJs citizenship at birth in 1939 could not
in any way be affected by the Convention which entered into force only on 2 September
1990.

The Convention has the status of a municipal law[29] and its ratification by the Philippines
could not have amended the express requirement in the Constitution that only natural-
born citizens of Philippines are qualified to be President. While the Constitution
apparently favors natural-born citizens over those who are not, that is the explicit
requirement of the Constitution which neither the Executive Department nor the
Legislature, in ratifying a treaty, could amend. In short, the Convention cannot amend
the definition in the Constitution that natural-born citizens are those who are citizens of
the Philippines from birth without having to perform any act to acquire or perfect their
Philippine citizenship.
In any event, the Convention guarantees a child the right to acquire a
nationality,[30] and requires States Parties to ensure the implementation of this right,
in particular where the child would otherwise be stateless. [31] Thus, as far as
nationality or citizenship is concerned, the Convention guarantees the right of the
child to acquire a nationality so that he may not be stateless. The Convention does
not guarantee a child a citizenship at birth, but merely the right to acquire a nationality
in accordance with municipal law. When FPJ was born in 1939, he was apparently
under United States law an American citizen at birth. [32] After his birth FPJ also had the
right to acquire Philippine citizenship by proving his filiation to his alleged Filipino father
in accordance with Philippine law. At no point in time was FPJ in danger of being
stateless. Clearly, FPJ cannot invoke the Convention to claim he is a natural-born
Philippine citizen.

The Doctrine in Ching Leng v. Galang

The prevailing doctrine today is that an illegitimate child of a Filipino father and an alien
mother follows the citizenship of the alien mother as the only legally known parent. The
illegitimate child, even if acknowledged and legally adopted by the Filipino father, cannot
acquire the citizenship of the father. The Court made this definitive doctrinal ruling
in Ching Leng v. Galang,[33] which involved the illegitimate minor children of a
naturalized Filipino of Chinese descent with a Chinese woman, Sy An. The
illegitimate children were later on jointly adopted by the naturalized Filipino and his legal
wife, So Buan Ty.

The facts in Ching Leng as quoted by the Court from the trial courts decision are as
follows:
After the petitioner Ching Leng Alias Ching Ban Lee obtained judgment in this Court
dated May 2, 1950 granting his petition for naturalization, he together with his wife So
Buan Ty filed another petition also in this Court in Special Proc. No. 1216 for the
adoption of Ching Tiong Seng, Ching Liong Ding, Victoria Ching Liong Yam, Sydney
Ching and Ching Tiong An, all minors and admittedly the illegitimate children of
petitioner Ching Leng with one Sy An, a Chinese citizen. Finding the petition for
adoption proper, this Court granted the same in a decision dated September 12, 1950,
declaring the said minors free from all legal obligations of obedience and maintenance
with respect to their mother Sy An and to all legal intents and purposes the children of
the adopter Ching Leng alias Ching Ban Lee and So Buan Ty with all the legal rights
and obligations provided by law.

On September 29, 1955, Ching Leng took his oath of allegiance and became therefore
a full pledge (sic) Filipino citizen. Believing now that his adopted illegitimate
children became Filipino citizens by virtue of his naturalization, petitioner Ching
Leng addressed a communication to the respondent Commissioner of
Immigration requesting that the alien certificate of registration of the said minors
be cancelled. (Bold underscoring supplied)
In Ching Leng, the Court made a definitive ruling on the meaning of minor child or
children in Section 15 of the Naturalization Law,[34] as well as the meaning of children
whose parents are citizens of the Philippines under the Constitution. The Court
categorically ruled that these children refer to legitimate children only, and not to
illegitimate children. Thus, the Court held:
It is claimed that the phrases minor children and minor child, used in these
provisions, include adopted children. The argument is predicated upon the theory that
an adopted child is, for all intents and purposes, a legitimate child. Whenever, the word
children or child is used in statutes, it is generally understood, however, to refer to
legitimate children, unless the context of the law and its spirit indicate clearly the
contrary. Thus, for instance, when the Constitution provides that those whose
parents are citizens of the Philippines, and those whose mothers are citizens of
the Philippines, who shall elect Philippine citizenship upon reaching the age of
majority, are citizens of the Philippines (Article IV, Section 1, subdivisions 3 and
4), our fundamental law clearly refers to legitimate children (Chiong Bian vs. De
Leon, 46 Off. Gaz., 3652-3654; Serra v. Republic, L-4223, May 12, 1952).

Similarly, the children alluded to in said section 15 are those begotten in lawful
wedlock, when the adopter, at least is the father. In fact, illegitimate children are
under the parental authority of the mother and follow her nationality, not that of
the illegitimate father (U.S. vs. Ong Tianse, 29 Phil. 332, 335-336; Santos Co vs.
Govt of the Philippines, 52 Phil. 543, 544; Serra v. Republic, supra; Gallofin v. Ordoez,
70 Phil. 287; Quimsuan vs. Republic, L-4693, Feb. 16, 1953). Although, adoption gives
to the adopted person the same rights and duties as if he were a legitimate child of the
adopter, pursuant to said Article 341 of our Civil Code, we have already seen that the
rights therein alluded to are merely those enumerated in Article 264, and do not include
the acquisition of the nationality of the adopter.
Moreover, as used in said section 15 of the Naturalization Law, the term children could
not possibly refer to those whose relation to the naturalized person is one created by
legal fiction, as, for instance, by adoption, for, otherwise, the place and time of birth of
the child would be immaterial. The fact that the adopted persons involved in the
case at bar are illegitimate children of appellant Ching Leng does not affect
substantially the legal situation before us, for, by legal fiction, they are now being
sought to be given the status of legitimate children of said appellant, despite the
circumstance that the Civil Code of the Philippine does not permit their
legitimation.(Bold underscoring supplied)
Ching Leng, penned by Justice Roberto Concepcion in October 1958, was a
unanimous decision of the Court En Banc. Subsequent Court decisions, including Paa
v. Chan[35] and Morano et al. v. Vivo,[36] have cited the doctrine laid down in Ching
Leng that the provision in the 1935 Constitution stating those whose fathers are
citizens of the Philippines refers only to legitimate children. When the 1973 and 1987
Constitutions were drafted, the framers did not attempt to change the intent of this
provision, even as they were presumably aware of the Ching Leng doctrine.

Nevertheless, I believe that it is now time to abandon the Ching Leng doctrine. The
inexorable direction of the law, both international and domestic in the last 100 years, is
to eliminate all forms of discrimination between legitimate and illegitimate children.
Where the Constitution does not distinguish between legitimate and illegitimate children,
we should not also distinguish, especially when private rights are not involved as in
questions of citizenship. Abandoning the Ching Leng doctrine upholds the equal
protection clause of the Constitution. Abandoning theChing Leng doctrine is also in
compliance with our treaty obligation under the Covenant on the Rights of Children
mandating States Parties to eliminate all forms of discrimination based on the status of
children, save of course those distinctions prescribed in the Constitution itself like the
reservation of certain high public offices to natural-born citizens.

Abandoning the Ching Leng doctrine does not mean, however, that an illegitimate child
of a Filipino father and an alien mother automatically becomes a Philippine citizen at
birth. We have repeatedly ruled that an illegitimate child does not enjoy any
presumption of blood relation to the alleged father until filiation or blood relation is
proved as provided by law.[37] Article 887 of the Civil Code expressly provides that [I]n
all cases of illegitimate children, their filiation must be duly proved. The illegitimate child
becomes a Philippine citizen only from the time he establishes his blood relation to the
Filipino father. If the blood relation is established after the birth of the illegitimate child,
then the child is not a natural-born Philippine citizen since an act is required after birth
to acquire or perfect his Philippine citizenship.

Conclusion

In conclusion, private respondent Fernando Poe, Jr. is not a natural-born Philippine

citizen since there is no showing that his alleged Filipino father Allan F. Poe
acknowledged him at birth. The Constitution defines a natural-born citizen as a
Philippine citizen from birth without having to perform any act to acquire or perfect his
Philippine citizenship. Private respondent Fernando Poe, Jr. does not meet this
citizenship qualification.

Therefore, I vote to grant the petition of Victorino X. Fornier. However, I vote to dismiss
the petitions of Maria Jeanette C. Tecson, Felix B. Desiderio, Jr. and Zoilo Antonio Velez
on the ground that their direct petitions invoking the jurisdiction of the Court under
Section 4, paragraph 7, Article VII of the Constitution are premature, there being no
election contest in this case.

[1]
FPJs Memorandum before the Comelec dated 4 February 2004, pp. 2-3.

[2]
Ibid., pp. 4-5.

[3]
FPJs Answer before the Comelec dated 16 January 2004, pp. 5 and 21.

[4]
Article 108, Spanish Civil Code; Article 255, New Civil Code; Article 165, Family Code.

[5]
Section 69 of Batas Pambansa Blg. 881 and Section 5 of Republic Act No.
6646. See Bautista v. Commission on Elections, 359 Phil. 1 (1998); Fernandez v.
Fernandez, et al., 146 Phil. 605 (1970).

[6]
Section 6, Article IX-A and Section 3, Article IX-C of the Constitution.
[7]
Romualdez Marcos v. Comelec, G.R. No. 119976, 13 September 1995, 248 SCRA
300; Aquino v. Comelec, 130 Phil. 275 (1968).

[8]
Frivaldo v. Comelec, G.R. No. 8793, 23 June 1989, 174 SCRA 245.

[9]
Section 2, Article VII of the Constitution.

[10]
United States v. Lim Bin, 36 Phil. 924 (1917); Tan Chong v. Secretary of Labor, 79
Phil. 249 (1947).

[11]
Section 2, Article IV of the 1987 Constitution; Section 4, Article III of the 1973
Constitution.

[12]
The only exception is that specified in Section 1(3), Article IV of the 1987
Constitution, which means that there can be no other exception to this rule.

[13]
See note 4.

[14]
Sebbano v. Aragon, 22 Phil. 10 (1912).

[15]
Article 887, New Civil Code.

[16]
Section 1(3), Article III of the 1935 Constitution.

[17]
Supra, note 3 at pp. 8-9.

[18]
Department of Justice Opinion No. 49 dated 3 May 1995.

[19]
Section 2, Article VIII of the 1987 Constitution.

[20]
Under the United States Constitution, the President, who is the commander-in-chief
of the armed forces, is required to be a natural-born citizen. The rationale for this is to
insure that no foreigner or former foreigner becomes the commander-in-chief of the
armed forces. This is culled from John Jays letter to George Washington when the
qualifications for President of the United States were being discussed in the
constitutional convention. See Jill A. Pryor, The Natural-Born Citizen Clause and
Presidential Eligibility: An Approach for Resolving Two Hundred Years of Uncertainty,
Yale Law Review, April 1988.

[21]
Under Section 2, Article VII of the 1987 Constitution, the minimum age requirement to
run for President is forty years of age.

[22]
Article 131 of the Spanish Civil Code provides: The acknowledgment of a natural
child must be made in the record of birth, in a will, or in some other public document.

[23]
128 Phil. 815 (1967).

[24]
Article 123 of the Spanish Civil Code provides: Legitimation shall produce its effects
in any case from the date of the marriage.

[25]
No. L-11931, 27 October 1958, 104 Phil. 1058 (unreported).

[26]
Supra, note 3 at p. 14.

[27]
Article IX, Treaty of Paris, 10 December 1898; Section 4, Philippine Bill of 1902.

[28]
Ibid.

[29]
Emerald Garments Manufacturing Corp. v. Court of Appeals, G.R. No. 100098, 29
December 1995, 251 SCRA 600.

[30]
Paragraph 1, Article 7, Convention on the Rights of the Child.

[31]
Paragraph 2, ibid.

[32]
See Daniel Levy, U.S. Citizenship and Naturalization Handbook, December 2003,
stating in Chapter 4:
4:29. OUT-OF-WEDLOCK CHILDREN

Out-of-wedlock children born to a U.S. citizen mother between May 24, 1934 and
January 13, 1941, acquired U.S. citizenship at birth through the general provision of the
1934 act, which granted U.S. citizenship to children born abroad to a U.S. citizen
parent. Since the natural father in such cases is not considered the legal father, the
retention requirement when one parent is a non-citizen does not apply. The citizenship
acquired under this provision is not affected by subsequent legitimation of the child.
[33]
Supra, note 25.

[34]
Section 15 of the Naturalization Law provided as follows:
Minor children of persons naturalized under this law who have been born in the
Philippines shall be considered citizens thereof.

A foreign-born minor child, if dwelling in the Philippines at the time of the naturalization
of the parent, shall automatically become a Philippine citizen, and a foreign-born minor
child, who is not in the Philippines at the time the parent is naturalized, shall be deemed
a Philippine citizen only during his minority, unless he begins to reside permanently in
the Philippines when still a minor, in which case, he will continue to be a Philippine
citizen even after becoming of age.

A child born outside of the Philippines after the naturalization of his parent, shall be
considered a Philippine citizen, unless within one year after reaching the age of
majority, he fails to register himself as a Philippine citizen at the American Consulate of
the country where he resides, and to take the necessary oath of allegiance.
[35]
Supra, note 23.

[36]
128 Phil. 923 (1967).

[37]
Reyes, et al. v. CA, et. al., 220 Phil. 116 (1985); Colorado v. Court of Appeals, G.R.
No. L-39948, 28 February 1985, 135 SCRA 47; Berciles, et al. v. GSIS, et al., 213 Phil.
48 (1984); Divinagracia v. Rovira, G.R. No. L-42615, 10 August 1976, 72 SCRA 307;
Noble v. Noble, 125 Phil. 123 (1966); Rep. of the Phils. v. WCC and Espiritu, 121 Phil.
261 (1965); Paulino v. Paulino, G.R. No. L-15091, 28 December 1961, 3 SCRA 730.

DISSENTING OPINION
CARPIO MORALES, J.:

The Constitution, in unmistakable terms, declares that

No person may be elected President unless he is a natural born citizen of the
Philippines, a registered voter, able to read and write, at least forty years of age on the
day of the election, and a resident of the Philippines for at least ten years immediately
preceding such election.[1]
Foremost, thus, in the qualifications for one to seek to become the highest official of the
land is that he must be a natural-born Filipino, a citizen of the Philippines from birth
without having to perform any act to acquire or perfect his Philippine
citizenship.[2]

As citizens of a nation which has its own political, social, and cultural identity and
independence, it is axiomatic that we elect to the Philippine presidency only a citizen
whose fealty to the Filipinos most cherished ideals and aspirations as a people is above
suspicion or whatever approximates an unfailing allegiance to the Philippine State. The
President, with all his multifarious powers and functions, is a focal point in this nations
governance as shown by the legacies and lessons of history and the continuing realities
of the present. The process, therefore, of selecting the person for the Office of the
President partakes not only of a moral obligation to choose the one best suited for the
job but also, and more importantly perhaps, of the matter of ensuring that he indeed
possesses the measurable qualifications as demanded of him by the Constitution.

This Court is once again mandated to interpret the law and apply it to breathe life to its
language and give expression to its spirit in the context of real facts. In the present
controversy which brings to fore the real import of the Constitutional imposition that a
candidate for President of the Philippines must be a natural-born Filipino, it is
specifically tasked to craft a rule of law that will govern the determination of ones
citizenship in all cases, now and in the future, without regard for whoever are the
personalities involved.

The consolidated petitions subject of the present Decision, all seek to disqualify
respondent Ronald Allan Kelley Poe, also known as Fernando Poe, Jr. (FPJ) or Ronnie
Poe, from seeking election as President of the Republic of the Philippines on the ground
that he is not a natural-born Filipino and, thus, not qualified for the office of Chief
Executive.

In G.R. Nos. 161434 and 161634, petitioners Maria Jeannette C. Tecson and Felix B.
Desiderio, Jr. (Tecson et al.) and Zoilo Antonio Velez (Velez), through separate original
petitions filed with this Court, all invoke this Courts jurisdiction as sole judge of all
contests relating to the election, returns and qualifications of the President [3] of the
Philippines to determine whether FPJ is eligible for the presidency in accordance with
the qualifications prescribed by Section 2 of Article VII of the Constitution, viz:
Sec. 2. No person may be elected President unless he is a natural-born citizen of
the Philippines, a registered voter, able to read and write, at least forty years of age on
the day of the election, and a resident of the Philippines for at least ten years
immediately preceding such election. (Emphasis supplied),
in relation to Sections 1 and 2 of Article IV thereof, viz:
Sec. 1. The following are citizens of the Philippines:

(1) Those who are citizens of the Philippines at the time of the adoption of this
Constitution;

(2) Those whose fathers or mothers are citizens of the Philippines;

(3) Those born before January 17, 1973, of Filipino mothers, who elect Philippine
citizenship upon reaching the age of majority; and

(4) Those who are naturalized in accordance with the law.

Sec. 2. Natural-born citizens are those who are citizens of the Philippines from
birth without having to perform any act to acquire or perfect their Philippine
citizenship. Those who elect Philippine citizenship in accordance with paragraph (3),
Section 1 hereof shall be deemed natural-born citizens. (Emphasis supplied)
In G.R. No. 161824, petitioner Victorino X. Fornier (Fornier), [4] via a petition
for certiorari under Rule 64 in relation to Rule 65 of the Rules of Court, seeks the review
by this Court of the Resolutions issued by the Commission on Elections (COMELEC)
dismissing a Petition for Disqualification in COMELEC SPA 04-003 filed by him under
Section 78 of Batas Pambansa Bilang 881, as amended, otherwise known as the
Omnibus Election Code:
Sec. 78. Petition to deny due course to or cancel a certificate of candidacy. - A verified
petition seeking to deny due course or to cancel a certificate of candidacy may be
filed by any person exclusively on the ground that any material representation
contained therein as required under Section 74 hereof is false. The petition may be
filed at any time not later than twenty-five days from the time of the filing of the
certificate of candidacy and shall be decided, after due notice and hearing, not later
than fifteen days before the election. (Emphasis supplied),
in relation to Section 74 thereof:
Sec. 74. Contents of certificate of candidacy. - The certificate of candidacy shall state
that the person filing it is announcing his candidacy for the office stated therein and
that he is eligible for said office; if for Member of the Batasang Pambansa, the
province, including its component cities, highly urbanized city or district or sector which
he seeks to represent; the political party to which he belongs; civil status; his date of
birth; residence; his post office address for all election purposes; his profession or
occupation; that he will support and defend the Constitution of the Philippines and will
maintain true faith and allegiance thereto; that he will obey the laws, legal orders, and
decrees promulgated by the duly constituted authorities; that he is not a permanent
resident or immigrant to a foreign country; that the obligation imposed by his oath is
assumed voluntarily, without mental reservation or purpose of evasion; and that the
facts stated in the certificate of candidacy are true to the best of his knowledge.

x x x (Emphasis supplied)
Statement of the Case

On December 31, 2003, FPJ filed with the COMELEC his Certificate of Candidacy for
President[5] indicating therein that, among others things, he is a August 20, natural-
born Filipino citizen, born on 1939 in the City of Manila.

On January 9, 2004, petitioner Fornier filed a Petition for Disqualification of Presidential

Candidate Ronald Allan Kelley Poe, also known as Fernando Poe, Jr. [6] (Petition for
Disqualification) with the COMELEC, which was docketed as COMELEC SPA No. 04-
003. Said Petition for Disqualification prayed that FPJ be disqualified from running for
the position of President of the Republic of the Philippines, and that his Certificate of
Candidacy be denied due course, or cancelled. [7]

In support of his Petition for Disqualification, petitioner Fornier asserted that: (1) Allan F.
Poe, father of FPJ, was a Spanish citizen, hence, FPJ could not have derived Philippine
citizenship from him;[8] (2) Allan F. Poes marriage to FPJs mother, Bessie Kelley, an
American citizen, was void because of the prior subsisting marriage of Allan F. Poe to
one Paulita Gomez;[9] and (3) given that the marriage of FPJs parents was void, even
assuming arguendothat Allan F. Poe was a Filipino citizen, FPJ could still not have
derived Philippine citizenship from him since, as an illegitimate child, he followed the
citizenship of his American mother. [10]

Petitioner Fornier thus concluded that FPJ, not being a natural-born citizen of the
Philippines, lacks an essential qualification and corollarily possesses a disqualification
to be elected President of the Republic of the Philippines, as expressly required under
the 1987 Constitution,[11] and, therefore, FPJ should be disqualified from being a
candidate for the position of President of the Republic of the Philippines in the coming
10 May 2004 elections.[12]

On January 16, 2004, FPJ filed his Answer[13] to the Petition for Disqualification,
maintaining that he is a natural born Filipino since his father, Allan F. Poe, and
grandfather, Lorenzo Pou, were both Filipino; his father was never married to a Paulita
Gomez;[14] and he is the legitimate son of Allan Fernando Poe and Bessie Kelley.

In his Answer, FPJ expressly admitted the authenticity of the copies of his Certificate of
Candidacy and Birth Certificate[15] attached to petitioner Forniers Petition for
Disqualification, but denied that of the other attached documents.

Attached to FPJs Answer was a certified copy[16] of the Marriage

Contract[17]Fernando R. Pou, Filipino, wasmarried to Bessie between Allan Fernando
Poe and Bessie Kelley which shows that Kelley, American, onSeptember 16, 1940 at
906 Dakota Street, Manila in a ceremony officiated by Rev. Rito Aramil, and witnessed
by Roman Despi and Marta Gatbunton.

By Resolution No. 6558 of January 17, 2004, the COMELEC gave due course to FPJs
Certificate of Candidacy and included him among the six qualified candidates for
President.

On January 22, 2004, petitioners Tecson and Desiderio, Jr. filed their Petition (With
Application for Writ of Preliminary Injunction and/or Restraining Order) [18] with this Court
questioning the jurisdiction of the COMELEC over the Petition for Disqualification. In
their petition, Tecson et al. argue that:
this Court is the sole judge of all contests relating to the (1) The COMELEC does not
have jurisdiction over the Petition for Disqualification filed by petitioner Fornier against
FPJ since paragraph 7 of Section 4, Article VII of the Constitution provides
that qualification of the President. Moreover, this Courts authority to act as the sole
judge of all contests relating to the election, returns and qualifications is all-
encompassing and covers all matters related thereto from beginning to end, including
those arising before the proclamation of winners. [19]

(2) FPJ was an illegitimate child since his Birth Certificate shows that he was born
on August 20, 1939, while the Marriage Contract between Fernando R. Pou and Bessie
Kelley attached to FPJs Answer to the Petition for Disqualification shows that they were
married on September 16, 1940.

(3) FPJ was not legitimated by the subsequent marriage in 1940 of his parents since,
under the Spanish Civil Code of 1889 which was then in force, only acknowledged
natural children can be legitimated, and it has not been shown that FPJ was
acknowledged by his parents whether before or after their marriage. [20] Moreover, FPJs
parents failed to comply with the procedural requirements to legitimate him, through
either voluntary acknowledgment under Article 131 of the Spanish Civil Code or
compulsory acknowledgment under Articles 135 and 136 thereof. [21]

(4) The citizenship requirement under Section 2, Article VII of the Constitution must be
interpreted strictly. Since he was illegitimate, FPJ follows the nationality of his only
legally recognized parent, his mother, who is an American. [22]
By Resolution of January 23, 2004, the First Division of the COMELEC dismissed
petitioner Forniers Petition for Disqualification for lack of merit, holding that:
(1) The COMELECs jurisdiction under the Constitution
is limited to contests relating to elections, returns andqualifications of elective regional,
provincial and city officials, and does not include national elective offices.

(2) However, under Section 78 of the Omnibus Election Code, the COMELEC has the
power to deny due course or to cancel Certificates of Candidacy exclusively on the
ground that any material representation contained therein is false. [23]
(3) While the COMELEC is not at liberty to finally declare whether or not the
respondent is a natural-born Filipino citizen since it is not the proper forum,
nevertheless it may establish FPJs citizenship as an incident to the action to deny due
course or cancel his Certificate of Candidacy under Section 78 of the Omnibus Election
Code.[24]

(4) Petitioner Forniers Petition for Disqualification did not allege that FPJs Certificate of
Candidacy contained a material misrepresentation. Moreover, the Petition and the
evidence presented by him failed to show convincingly and strongly that FPJs
declaration that he is a natural-born Filipino is false. [25]

(5) The 1935 Constitution provided that [t]hose whose fathers are citizens of the
Philippines are likewise Filipino.[26] Both petitioner Fornier and FPJ agree that the latter
is the son of Allan Fernando Poe. Hence, if Allan Fernando Poe is a Filipino,
necessarily, FPJ is likewise a Filipino.[27]

(6) The purported marriage contract between Allan Fernando Poe and one Paulita
Gomez submitted by petitioner Fornier states that he is the son of Lorenzo Poe, a
Spaniard. However, by operation of law and upon the cession of the Philippines to the
United States of America by Spain, Lorenzo Poe ceased to be a Spaniard and became
a citizen of the Philippine Islands and later a citizen of the Philippines. Consequently,
Allan Fernando Poe, following the citizenship of his father, was also Filipino. [28]

(7) Since paragraph 3, Section 1 of Article IV of the 1935 Constitution does not
distinguish between legitimate and illegitimate children, FPJs legitimacy is beside the
point. Since his father was a Filipino, FPJ is a natural-born Filipino. [29]
On January 26, 2004, petitioner Fornier filed a Motion for Reconsideration of the
COMELEC First Division Resolution in the Petition for Disqualification.

On the same day, in light of the January 23, 2004 Resolution of the COMELEC First
Division, petitioners Tecson et al. filed a Supplemental Petition[30] arguing that: (1) The
COMELEC First Division Resolution is void since, as COMELEC itself admitted, it has
no jurisdiction to determine the core issue of whether FPJ is a natural-born citizen; and
(2) the COMELECs ruling that FPJ is a natural-born citizen under paragraph 3, Section
1 of the 1935 Constitution is fatally flawed.[31]
In their Supplemental Petition, petitioners Tecson et al. reiterate their arguments that
FPJ is not a natural-born citizen, he being an illegitimate child and, therefore, follows the
citizenship of his American mother;[32] and even assuming that FPJ was legitimated by
the subsequent marriage and acknowledgment of his parents, Article 123 of the Spanish
Civil Code provides that the effects of such legitimation commence only from the date of
the marriage. Thus, petitioners Tecson et al. conclude that FPJ was, from his birth on
September 9, 1939 up to September 15, 1940 (the day prior to the marriage of his
parents on September 16, 1940), illegitimate and followed the citizenship of his
American mother, hence, he cannot be considered a natural-born citizen as Section 2,
Article IV of the Constitution mandates that such citizenship must be from birth.[33]

Still in their Supplemental Petition,[34] Tecson et al. pray that the COMELEC be enjoined
from recognizing the candidacy of FPJ and conducting further proceedings in the
Petition for Disqualification; and, after hearing on the merits, this Court render judgment:
(a) declaring that [FPJ] is not a natural-born Filipino citizen and thus not qualified to vie
for the position of the President of the Republic of the Philippines;

(b) setting aside and reversing Resolution No. 6558 dated 17 January 2004 issued by
public respondent Comelec, specifically that portion of the dispositive portion which
gives due course to the Certificate of Candidacy filed by [FPJ] for the position of
President of the Republic of the Philippines;

(c) setting aside and reversing the Resolution dated 23 January 2004 issued by
respondent Comelec in SPA No. 04-003; and

(d) ordering the permanent removal of the name of [FPJ] as a qualified candidate for
President of the Republic of the Philippines in all records of respondent Comelec. [35]
On January 29, 2004, petitioner Velez filed an original petition [36] with this Court
questioning FPJs qualifications as president based on Section 4, paragraph 7 of the
Constitution. In his Petition, petitioner Velez alleges that:
(1) As an illegitimate child, FPJ acquired the citizenship of his only legally known parent,
Bessie Kelley, his American mother.[37]

(2) The subsequent marriage of FPJs parents did not result in his legitimation since: (1)
it has not been shown that he was acknowledged by his parents either before or after
their marriage as required by Article 121 of the Spanish Civil Code of 1889; and (2) the
procedural requirements for his acknowledgement, whether voluntarily under Article 131
of the Spanish Civil Code or compulsory under Article 135 and 136, have not been
complied with.[38]

(3) Even if respondent Poe was legitimated by the subsequent marriage of his parents,
he still cannot be considered a natural-born Filipino considering that said marriage was
an act required to perfect his citizenship contrary to Section 2 of Article IV of the
Constitution.[39]
Petitioner Velez prays that this Court take jurisdiction over this instant petition and
declare whether [FPJ] is a natural born citizen of the Philippines; hence, qualified to be
a candidate for President in the 10 May 2004 national elections. [40]

By Resolution of February 6, 2004, the COMELEC en banc denied petitioner Forniers

Motion for Reconsideration, holding as follows:
(1) Petitioner Forniers Petition for Disqualification was in the nature of a petition to
deny due course to or cancel a certificate of candidacy under Section 78 of the
Omnibus Election Code. Such a petition relates only to certificates of candidacy, is
summary in character and has for its purpose the disqualification of a person from being
a candidate on the ground that a material representation contained in the certificate of
candidacy is false.[41]

(2) The COMELEC has the power to determine issues of citizenship as an incident to a
petition for disqualification or cancellation of a certificate of candidacy which, in turn,
falls within the COMELECs constitutional mandate to enforce and administer all laws
and regulations pertaining to the elections. The COMELEC First Division, in stating that
the Commission is not the proper forum to declare with finality the citizenship of
respondent Poe, merely prefaced its decision with the time-honored principle that there
is no one court or body that judicially declares the citizenship of any person. [42]

(3) For a petition under Section 78 of the Omnibus Election Code to prosper, there must
be proof ofmisrepresentation with a deliberate attempt to mislead. Thus, it must be
shown by direct and substantial evidence that FPJ
must have known or have been aware of the falsehood as appearing on his certificate.[
43]

(4) The COMELEC First Division was correct in concluding that [c]onsidering that the
evidence presented by the petitioner is not substantial, FPJ
did not commit any material misrepresentation when he stated in his Certificateof Candi
dacy that he is a natural-born Filipino citizen.[44]
In his Concurring and Separate Opinion,[45] COMELEC Commissioner Florentino A.
Tuason, Jr. sought to distinguish between the COMELECs limited power to determine
whether or not respondent committed material misrepresentation in his certificate of
candidacy and the determination of respondent Poes citizenship in this wise:
x x x respondents representation anent his citizenship stems from his reliance on public
records, i.e., his birth certificate, his parents marriage contract, his Philippine passport,
aside from his personal belief of such fact.

To go beyond these public records and scrutinize the same would inevitably
compel the Commission to determine the issue of respondents citizenship
a province already outside of the Commissionsjurisdiction. Corollarily, and in
the light of the same, neither could there be any deliberate attempt on
respondents part to commit material misrepresentation in his CoC. As succinctly
and clearly explained by the Supreme Court, there is false representation when there is
a deliberate attempt to mislead, misinform, or hide a fact which would otherwise render
a candidate ineligible. (Salcedo vs. Comelec, et al., GR No. 135886, 16 August 1999)

Nevertheless, I respectfully take exception to the conclusion made by the 1st Division
that the issue of legitimacy is immaterial in the determination of a persons citizenship.
For contrary to said observation, it is the settled rule of our jurisprudence that only a
legitimate minor child follows the citizenship of his father. (Chiongbian vs. De Leon, 82
Phil. 771 [1949]; Morano vs. Vivo, 20 SCRA 562 [1967]; Paa vs. Chan, 21 SCRA 753
[1967]; Board of Commissioners (CID) vs. De la Rosa, 197 SCRA 854
[1999]). Settlement of said issue then is crucial in the determination of
respondents citizenship in a direct proceeding before the proper forum.
[46]
(Emphasis supplied)
On February 10, 2004, petitioner Fornier filed his present Petition for Certiorari [47] under
Rule 64 in relation to Rule 65 of the Rules of Court, praying that the COMELECs
Resolutions dated January 23, 2004 and February 6, 2004 in the Petition for
Disqualification be reversed, set aside and annulled, and that judgment be rendered
disqualifying [FPJ] from running for the position of President of the Republic of the
Philippines and directing respondent Comelec to cancel his Certificate of
Candidacy.[48] Before this Court, Fornier argues that the COMELEC acted with grave
abuse of discretion when:
(1It ruled that it had no jurisdiction over the Petition for Disqualification grounded on the
) lack of an essential qualification of FPJ to be elected President of the Republic of the
Philippines;

(2It concluded that Lorenzo Pou became a citizen of the Philippine Islands;
)

(3It concluded that Allan F. Poe became a citizen of the Philippine Islands or of the Phili
) ppines;

(4It concluded that, under the 1935 Constitution, FPJ is a natural-born citizen despite hi
) s illegitimacy;

(5It concluded that FPJs Certificate of Candidacy does not contain a material misrepres
) entation or falsity as tohis being a natural-born Filipino citizen;

(6It concluded that FPJ should not be declared disqualified to run for President in the M
) ay 2004 elections.
Petitioner Fornier maintains that, in any event, this Court can take cognizance of the
issue of FPJs citizenship and rule on his qualifications to run for President of the
Republic of the Philippines.

On February 11, 2004, in compliance with this Courts Resolution of January 27, 2004,
FPJ submitted his Consolidated Comment [49] on the petitions filed by petitioners
Tecson et al. and Velez. In his Comment, FPJ argues that:
(1) The Supreme Court, acting as the Presidential Electoral Tribunal, may not exercise
its jurisdiction as sole judge of all contests relating to the qualifications of the President
prior to the elections.

(2) Petitioners Tecson et al. and Velez have no standing to seek the review of the
questioned COMELEC Resolutions since the Constitution provides that a review of a
decision, order or ruling of the COMELEC may be brought by the aggrieved
party,[50] and petitioners were never parties, much less aggrieved parties, to the
proceedings in the Petition for Disqualification.
(3) Moreover, the issues raised by petitioners Tecson et al. and Velez have already
been raised in the Petition for Disqualification.
On February 13, 2004, in compliance with this Courts Resolution of January 27, 2004,
petitioner Fornier submitted his Comment [To Petitioners Tecson et al.s Petition and
Supplemental Petition in G.R. No. 161434].[51] In his Comment, petitioner Fornier asserts
that:
(1) The petitions filed directly with this Court by petitioners Tecson et al. and Velez are
premature and improper considering that the original jurisdiction to try and decide the
disqualification case of FPJ, prior to the May 10, 2004 elections, is with the COMELEC.
In fact, the original jurisdiction of the COMELEC over disqualification cases has been
recognized in a number of cases.[52]

(2) Moreover, the jurisdiction of this Court as sole judge of all contests relating to the
qualifications of the President begins only after a presidential candidate has already
been elected and his or her disqualification is being sought in an election protest or by
way of a quo warranto proceeding.
On February 16, 2004, in compliance with this Courts Resolution of February 11, 2004,
FPJ submitted his Comment[53] on the Petition filed by petitioner Fornier. In his
Comment, FPJ contends that:
(1) Petitioner Fornier cannot seek equitable relief from this Court since he does not
come with clean hands, he having knowingly annexed falsified documents to the
Petition for Disqualification.

(2) Inasmuch as the only issue in a petition for certiorari is whether the COMELEC
acted with grave abuse of discretion when it promulgated its questioned Resolutions,
the issues in petitioner Forniers present petition are limited to: (a) whether petitioner
has shown by clear and convincing evidence that FPJ is not a natural-born citizen; and
(b) assuming petitioner has discharged this burden, whether FPJ knew, at the time that
he filed his Certificate of Candidacy, that he is not a natural-born citizen.

(4) Petitioner Forniers Petition for Certiorari may not be treated as one for
disqualification of FPJ on the ground of ineligibility since:

(a) Such would be in clear breach of Section 7, Article IX-A of the Constitution and
Rule 65 of the Rules of Court;
(b) It would violate FPJs right to procedural due process considering that the Petition
for Disqualification was heard summarily pursuant to Rule 23 of the COMELEC
Rules of Procedure covering Petitions to Deny Due Course to or Cancel
Certificates of Candidacy; and

(c) Neither the COMELEC nor the Supreme Court has jurisdiction to disqualify a
candidate for president for ineligibility since:

(i) Paragraph 2 of Section 2, Article IX-C of the Constitution limits the original
jurisdiction of the COMELEC to contests relating to the elections, returns and
qualifications of all elective regional, provincial and city officials; and

(ii) This Courts jurisdiction as the Presidential Electoral Tribunal may only be
invoked, and exercised, after the election and proclamation of the President.

(5) FPJ could not be other than a natural-born Filipino considering that his father, Allan
Fernando Poe, and his grandfather Lorenzo Pou were both Philippine citizens.

(6) Petitioner Forniers evidence purportedly showing that FPJ is not a natural-born
Filipino is based on fabricated documents.

(7) That FPJs parents were married after his birth is no consequence on his Filipino
citizenship since his Birth Certificate declares that he is a Filipino. In addition, the
Marriage Contract of FPJs parents declares his father, Fernando R. Pou, and his
grandfather, Lorenzo Pou, to be Filipinos. Furthermore, FPJs legitimacy may no longer
be questioned and may not be subject to collateral attack.
On February 18, 2004, petitioners Tecson et al. filed a Consolidated Reply (To [FPJs]
Consolidated Comment and Respondent Forniers Comment) [54] maintaining that:
(1) This Court should assume jurisdiction over the Petition in G.R. No. 161434 and
resolve the case on the merits considering that the question of whether FPJ is a natural-
born Philippine citizen qualified to run for President is a purely legal one impressed with
transcendental importance.

(2) In addition, paragraph 7 of Section 4, Article VII taken together with Section 1, Article
VIII of the Constitution authorizes this Court to assume exclusive original jurisdiction
over the question of FPJs qualification to run for the Presidency.
(3) The fact that FPJ did not refute the allegations that he is not a natural-born
Philippine citizen, based on the very documents he presented, only proves that he has
no solid legal basis on which to anchor his claim of natural-born citizenship.
On February 19, 2004, this Court heard oral arguments by the parties to the present
cases during which the opinions of the following who were invited as amici curiae were
proffered:
(1) Supreme Court Associate Justice Vicente V. Mendoza (Ret.)
(2) Former Constitutional Commissioner Joaquin G. Bernas
(3) Former Dean Merlin Magallona; and
(4) Professor Ruben C. Balane

For purposes of the oral arguments, the Court issued an Advisory defining the principal
issues to be discussed as follows:
(1) Whether the Commission on Elections has jurisdiction over petitions to deny due
course to or cancel certificates of candidacy of Presidential candidates.

(2) Whether the Supreme Court has jurisdiction over the petitions of:

i. petitioners Tecson et al.

ii. petitioner Velez
iii. petitioner Fornier

(3) Whether respondent Ronald Allan Kelley Poe is a Filipino citizen. If so, whether he
is a natural-born Filipino citizen,
and suggested that:
In discussing these issues, the following may be taken up:

a) the Commission on Elections power to enforce and administer election laws and
decide, except those involving the right to vote, all questions affecting elections
under paragraphs (1) and (3), Section 2 of Article IX-C of the Constitution;

b) the concept of natural-born citizen;

c) the principle of jus sanguinis;

d) applicability of international law in resolving problems of citizenship;

e) whether children, as used in citizenship statutes, includes illegitimate children;

f) laws governing the citizenship of a child born under the 1935 Constitution;
g) other Constitutional and statutory provisions as well as jurisprudential principles
relevant to the principal issues.
On February 23, 2004, in compliance with the Order given in open court in the course of
the oral arguments, the parties and amici curiae submitted their respective position
papers in lieu of memoranda. Whereupon, these consolidated cases were submitted for
decision.

Issues for Resolution:

In summary, the instant petitions call upon this Court to determine: (1) whether this
Court has original and exclusive jurisdiction to pass upon the qualifications of
presidential candidates; (2) whether the COMELEC acted with grave abuse of discretion
when it issued its Resolutions of January 23, 2004 and February 6, 2004 dismissing the
Petition for Disqualification; and (3) whether FPJ is a natural-born Filipino and therefore
qualified to seek election as President of the Republic of the Philippines.

These issues will be discussed seriatim.

Supreme Courts Jurisdiction Over the

Petitions in G.R. Nos. 161464 and 161634.

Petitioners Tecson et al. and Velez assert that this Court has exclusive original
jurisdiction to determine whether FPJ is qualified to be a candidate for President of the
Republic of the Philippines primarily on the basis of paragraph 7, Section 4 of Article VII
of the Constitution, to wit:
Sec. 4. x x x

xxx

The Supreme Court, sitting en banc, shall be the sole judge of all contests
relating to the election, returns, and qualifications of the President or Vice-
President, and may promulgate its rules for the purpose. (Emphasis supplied)
However, the foregoing provision clearly refers to this Courts jurisdiction as the
Presidential Electoral Tribunal over electoral contests relating to the election, returns
and qualifications of the President, and not to the qualifications or disqualifications of a
presidential candidate.
An electoral contest has been defined as an adversarial proceeding by
which matters involving the title or claimof title to an elective office, made before or after
the proclamation of the winner, is settled whether or not the contestant is claiming the
office in dispute.[55] Thus, the subject matter of such a contest is the title or claim of
title to an elective office itself and not merely the qualifications or absence of
qualifications of a candidate for such office.

In Topacio v. Paredes,[56] this Court distinguished between (a) electoral contests relating
to the election and election returns and (b) contests relating to the qualifications for the
electoral office:
All election disputes may be divided into two distinct classes: (1) those which
pertain to the casting and counting of the ballots; and (2) those which pertain to
the eligibility of the candidates. If there be cases incapable of being so classified,
they have not been suggested. Those parts of section 27 [Act No. 1582 as amended by
Act No. 2170], indicative of the kind of contests which are to be determined under its
provisions, read:
Such court (of First Instance) shall have exclusive and final jurisdiction except as
hereinafter provided, and shall forthwith cause the registry lists and all ballots used at
such election to be brought before it and examined, and to appoint the necessary
officers therefor and to fix their compensation, . . .

xxx xxx xxx

In such proceedings the registry list as finally corrected by the board of inspectors shall
be conclusive as to who was entitled to vote at such election.
These very words indicate the character of the election disputes which Courts of First
Instance are empowered to decide under this provision of law. Contests which cannot
be decided by an examination of the registry lists and of the ballots, and evidence of
fraud and irregularity in connection with the manner of casting and counting the votes,
must be included in the phrase "for the determination of which provision has not been
otherwise made" which appears near the beginning of the section. If the nature of the
evidence upon which the eligibility (qualifications) of a person to hold office must
be decided is considered, it will be seen that such evidence has nothing to do
with the manner of casting and counting the votes. To what purpose would be the
examination of registry lists and ballots by officers appointed and paid for that purpose
in determining the eligibility of a successful candidate for office? The eligibility of a
person to be elected to a provincial or municipal office depends upon his
qualifications as a voter, his residence, his allegiance to the United States, his
age, the absence of disqualifications inflicted by the courts by way of
punishment, etc. That
is, these qualifications anddisqualifications do not depend upon the conduct of el
ection inspectors, the illegal trafficking in votes, themethod of casting and counti
ng the ballots, or the election returns. The evidence required to establish such
qualifications or disqualifications would not aid in any way in determining the
questions relating to the manner of casting and counting the ballots. E converso,
would the examination of ballots aid in arriving at a decision as to his
eligibility. There is nothing in this section to indicate that the court shall receive or
consider evidence as to the personal character or circumstances of candidates.

Again, the effect of a decision that a candidate is not entitled to the office because
of fraud or irregularities in the election is quite different from that produced by
declaring a person ineligible to hold such an office. In the former case the court,
after an examination of the ballots may find that some other person than the candidate
declared to have received a plurality by the board of canvassers actually received the
greater number of votes, in which case the court issues its mandamus to the board of
canvassers to correct the returns accordingly; or it may find that the manner of holding
the election and the returns are so tainted with fraud or illegality that it cannot be
determined who received a plurality of the legally cast ballots. In the latter case, no
question as to the correctness of the returns or the manner of casting and
counting the ballots is before the deciding power, and generally the only result
can be that the election fails entirely. In the former, we have a contest in the strict
sense of the word, because opposing parties are striving for supremacy. If it be found
that the successful candidate (according to the board of canvassers) obtained a plurality
in an illegal manner, and that another candidate was the real victor, the former must
retire in favor of the latter. In the other case, there is not, strictly speaking, a
contest, as the wreath of victory cannot be transferred from an ineligible
candidate to any other candidate when the sole question is the eligibility of the
one receiving a plurality of the legally cast
ballots. In the onecase the question is as to who received a plurality of the legally
cast ballots; in the other, the question isconfined to the personal character and ci
rcumstances of a single individual.
xxx

In Greenwood vs. Murphy (131 Ill., 604), the court said:

We think that the statute limits the power of the county court to contests of elections.
That court has no other or further jurisdiction than to determine which of the contestants
has been duly elected. The question whether or not a party already elected
possesses the necessary qualifications for the office is one which must be
determined in another way and by a different proceeding.

Where it is claimed that such an one unlawfully holds an office by reason of his l
ack of a legal qualificationtherefor, his right should be determined by information
in the nature of quo warranto in the name of the peopleof the State.[57] (Emphasis
and underscoring supplied)
Thus, the contest concerning the qualifications of the President referred to in paragraph
7, Section 4 of Article VII of the Constitution clearly refers to a quo warranto proceeding.

Quo warranto literally means by what authority. It has been defined as an

extraordinary legal remedy whereby a person or entity is challenged to show by what
authority he holds a public office or exercises a public franchise. [58]The object of a quo
warranto proceeding is to determine the right of a person to the use or exercise of a
franchise or office and to oust the holder from its enjoyment, if his claim is not well-
founded, or if he has forfeited his right to enjoy the privilege. [59]

Hence, actions falling under paragraph 7, Section 4 of Article VII of the Constitution may
only be directed against the persons occupying or having title to the position of
President (and Vice President) i.e. the incumbent President (and Vice President) or
the President-elect (and Vice-President-elect) and not against the candidates for said
electoral offices who do not, as such, hold or have any title thereto.

This interpretation is in consonance with Section 7 of Article VII of the Constitution

which provides for the procedure to be followed in case the President-elect and/or Vice
President-elect fail to qualify:
Sec. 7. The President-elect and the Vice-President-elect shall assume office at the
beginning of their terms.

If the President-elect fails to qualify, the Vice-President-elect shall act as President

until a President shall have been chosen and qualified.

If at the beginning of the term of the President, the President-elect shall have died or
shall have become permanently disabled, the Vice-President-elect shall become
President.

Where no President and Vice-President shall have been chosen or shall

have qualified, or where both shall have died or become permanently disabled, the
President of the Senate or, in case of his inability, the Speaker of the House of
Representatives shall act as President until a President or a Vice-President shall have
been chosen andqualified.

The Congress shall, by law, provide for the manner in which one who is to act as
President shall be selected until aPresident or a Vice-President shall have qualified, in
case of death, permanent disability, or inability of the officials mentioned in the next
preceding paragraph. (Emphasis supplied)
The procedure for quo warranto proceedings questioning the eligibility of the President
is governed by Rules 12, 13 and 15 of the Rules of the Presidential Electoral Tribunal,
which were promulgated by this Court specifically in order to implement the above-cited
Constitutional provision. The Rules clearly provide that such quo warrantopetition may
be initiated by any voter after a candidate has been vested with a claim of title to the
Presidency, i.e.after the proclamation of the winner, viz:
Rule 12. Jurisdiction. The Tribunal shall be the sole judge of all contests relating to the
election, returns and qualifications of the President or Vice-President of the Philippines.

Rule 13. How Initiated. An election contest is initiated by the filing of an election
protest or a petition for quo warranto against the President or Vice-President. An
election protest shall not include a petition for quo warranto. A petition for quo warranto
shall not include an election protest.

xxx
Rule 15. Quo Warranto. A verified petition for quo warranto contesting the
election of the President or Vice-President on the ground of ineligibility or of
disloyalty to the Republic of the Philippines may be filed by any voter within ten (10)
days after the proclamation of the winner. (Emphasis supplied)
Thus, the petitions in G.R. Nos. 161434 and 161634, which invoke the jurisdiction of this
Court, as the Presidential Electoral Tribunal, to determine the eligibility or ineligibility of
the President (and Vice-President) or the President-elect (and Vice-President-elect), are
clearly premature and must be dismissed.

While conceding that under Republic Act No. 1793, [60] the precursor to the above-cited
Constitutional provision, the jurisdiction of the Presidential Electoral Tribunal was limited
to post-election controversies,[61] petitioner Velez claims that the use of the word
President (and Vice-President) and not merely President-elect (and Vice-
President-elect) in the present provision implies an expansion of the Presidential
Electoral Tribunals jurisdiction. Specifically, he asserts that [t]he dropping of the word
elect in the present Constitution is significant because this clearly means that the
Supreme Court now has jurisdiction over cases involving qualifications of presidential
candidates even if he is not yet elected.

The Record of the Proceedings of the 1986 Constitutional Commission does not,
however, support petitioner Velezs novel theory. No intention to increase the jurisdiction
of the Presidential Electoral Tribunal may be fairly inferred from the Record. The intent
of the Constitutional Commissioners, as articulated by Commissioner Bernas, appears
merely to elevate the status of the Presidential Electoral Tribunal to that of a
Constitutional Body, to wit:
xxx

MR. VILLACORTA: Thank you very much, Madam President. I am not sure
whether Commissioner Suarez has expressed his point. On
page 2, the fourth paragraph of Section 4 provides:

The Supreme Court, sitting en banc, shall be the sole judge of

all contests relating to the election, returns and qualifications of
the President or Vice-President.

May I seek clarification as to whether or not the matter of

 determining the outcome of the contests relating to the election
returns and qualifications of the President or Vice-President is
purely a political matter and, therefore, should not be left
entirely to the judiciary. Will the above-quoted provision not
impinge on the doctrine of separation of powers between the
executive and the judicial departments of the government?

MR. REGALADO: No, I really do not feel that would be a problem. This is a new
provision incidentally. It was not in the 1935 Constitution nor in
the 1973 Constitution.

MR. VILLACORTA: That is right.

MR. REGALADO: We feel that it will not be an intrusion into the separation of
powers guaranteed to the judiciary because this is strictly an
adversarial and judicial proceeding.

MR. VILLACORTA: May I know the rationale of the Committee because this
supersedes Republic Act 7950 which provides for the
Presidential Electoral Tribunal?

FR. BERNAS: Precisely, this is necessary. Election contests are, by their

nature, judicial.Therefore, they are cognizable only by courts.
If, for instance, we did not have a constitutional provision on an
electoral tribunal for the Senate or an electoral tribunal for the
House, normally, as composed, that cannot be given
jurisdiction over contests.

So, the background of this is really the case of Roxas vs.

Lopez. The Gentleman will remember that in that election,
Lopez was declared winner. He filed a protest before the
Supreme Court because there was a republic act which
created the Supreme Court as the Presidential Electoral
Tribunal. The question in this case was whether new powers
could be given the Supreme Court by law. In effect, the conflict
was actually whether there was an attempt to create two
Supreme Courts and the answer of the Supreme Court was:
No, this did not involve the creation of two Supreme Courts,
but precisely we are giving new jurisdiction to the Supreme
Court, as it is allowed by the Constitution. Congress may
allocate various jurisdictions.
 Before the passage of that republic act in case there was any
contest between two presidential candidates or two vice-
presidential candidates, no one had jurisdiction over it. So, it
became necessary to create a Presidential Electoral
Tribunal. What we have done is to constitutionalize what
was statutory but it is not an infringement on the separation of
powers because the power being given to the Supreme Court
here is a judicial power.[62]

x x x (Emphasis and underscoring supplied)

Petitioners Tecson et al. and Velez also argue that the word contests should be
interpreted liberally in accordance with this Courts ruling in Javier v. Commission on
Elections.[63] They further cite Javier as authority for the proposition that this Court may
immediately exercise exclusive original jurisdiction over the issues concerning FPJs
possession of the requisite citizenship qualification to enable him to run as a candidate
for the Presidency.

Petitioners assertions cannot be sustained. Javier involved an electoral contest relating

to serious anomalies in the conduct of an election and the canvass election returns, and
not to a proceeding to determine the qualifications of a candidate for election, viz:
Alleging serious anomalies in the conduct of the elections and the canvass of the
election returns, the petitioner went to the Commission on Elections to prevent the
impending proclamation of his rival, the private respondent herein. Specifically, the
petitioner charged that the elections were marred by massive terrorism,
intimidation, duress, vote-buying, fraud, tampering and falsification of election
returns under duress, threat and intimidation, snatching of ballot boxes
perpetrated by the armed men of respondent Pacificador.Particular mention was
made of the municipalities of Caluya, Cabate, Tibiao, Barbaza, Laua-an, and also of
San Remigio, where the petitioner claimed the election returns were not placed in the
ballot boxes but merely wrapped in cement bags or manila paper.[64] (Emphasis
supplied)
In fact, the ponencia, as quoted by petitioners, clearly states that election contests refer
to matters involving the claim of title to an elective office, not a claim that one is qualified
to be a candidate for such office:
The word contests should not be given a restrictive meaning; on the contrary, it
should receive the widest possible scope conformably to the rule that the words
used in the Constitution should be interpreted liberally. As employed in the 1973
Constitution, the term should be understood as referring to any
matter involving thetitle or claim of title to an elective office, made before or after
proclamation of the winner, whether or not the contestant is claiming the office in
dispute. Needless to stress, the term should be given a consistent meaning and
understood in the same sense under both Section 2(2) and Section 3 of Article XII-C of
the Constitution.

The phrase election, returns and qualifications should be interpreted in its

totality as referring to all mattersaffecting the validity of the contestee's title. But if
it is necessary to specify, we can say that election referred to the conduct of the polls,
including the listing of voters, the holding of the electoral campaign, and the casting and
counting of the votes; returns to the canvass of the returns and the proclamation of the
winners, including questions concerning the composition of the board of canvassers and
the authenticity of the election returns;
andqualifications to matters that could be raised in a quo warranto proceeding
against the proclaimed winner, such as his disloyalty or ineligibility or the
inadequacy of his certificate of candidacy.[65] (Emphasis and underscoring supplied)
Finally, petitioners Tecson et al. and Velez claim that the issue of FPJs qualification for
the Presidency may also be brought directly to this Court on the basis of Section 1 of
Article VIII of the Constitution through a petition forcertiorari under Rule 65 of the Rules
of Court, specially considering that the instant case is one of transcendental importance.

This claim cannot likewise be sustained. First, it is axiomatic that a petition

for certiorari under Rule 65 of the Rules of Court is not available where there is another
plain, speedy and adequate remedy in the ordinary course of law.[66] With respect to the
issues raised in the present petitions, such other plain, speedy and adequate remedy
exists, namely, as will be discussed further below, a petition to deny due course to or
cancel a certificate of candidacy before the COMELEC under Section 78 of the
Omnibus Rules of Court. Thus, the correct remedy of petitioners Tecson et al. and Velez
should have been to intervene in the Petition for Disqualification.

Second, in determining whether procedural rules, such as standing, should be relaxed

on the ground of transcendental importance, the following determinants should be
considered: (1) the character of the funds or other assets involved in the case; (2) the
presence of a clear case of disregard of a constitutional or statutory prohibition by the
public respondent agency or instrumentality of the government; and
(3) the lack of any otherparty with a more direct and specific interest in raising the questi
ons being raised.[67] Considering that the substantive issues raised by petitioners Tecson
et al. and Velez in G.R. Nos. 161434 and 161634, respectively, are virtually identical to
those raised by petitioner Fornier in G.R. No. 161824, this Court is not convinced that
the transcendental importance of the issues raised herein justifies a direct resort to
this Court under Rule 65 of the Rules of Court or the exercise of its
expanded certiorari jurisdiction under Sec. 1, Article VIII of the Constitution.

Supreme Courts Jurisdiction Over

the Petition in G.R. No. 161824.

Upon the other hand, there can be no doubt that this Court has jurisdiction over
petitioner Forniers Petition for Certiorari questioning the Resolutions of January 23,
2004 and February 6, 2004 issued by the COMELEC First Division and En Banc,
respectively in the Petition for Disqualification. Section 7 of Article IX-A of the
Constitution[68] expressly vests this Court with the power of review over decisions, orders
or rulings of the COMELEC.

COMELECs Jurisdiction Over the Subject

Matter of the Petition for Disqualification
Under Section 78 of the Omnibus Election
Code.

The COMELEC, for its part, has original jurisdiction over petitions
to deny due course to or cancel the certificate ofcandidacy of a
Presidential candidate on the ground of falsity of material representation under Section
78 of Omnibus Election Code, to wit:
Sec. 78. Petition to deny due course to or cancel a certificate of candidacy. - A verified
petition seeking to deny due course or to cancel a certificate of candidacy may be
filed by any person exclusively on the ground that any material representation
contained therein as required under Section 74 hereof is false. The petition may be
filed at any time not later than twenty-five days from the time of the filing of the
certificate of candidacy and shall be decided, after due notice and hearing, not later
than fifteen days before the election. (Emphasis supplied)
This jurisdiction arises from the COMELECs powers and functions under paragraphs
(1) and (3) of Section 2, Article IX-C of the Constitution:
Sect. 2. The Commission on Elections shall exercise the following powers and
functions:

(1) Enforce and administer all laws and regulations relative to the conduct of an
election, plebiscite, initiative, referendum, and recall.

xxx

(3) Decide, except those involving the right to vote, all questions affecting elections,
including determination of the number and location of polling places, appointment of
election officials and inspectors, and registration of voters. (Emphasis supplied)
and Sec. 52, Article VII of the Omnibus Election Code:
Sec. 52. Powers and functions of the Commission on Elections. In addition to the
powers and functions conferred upon it by the Constitution, the Commission shall have
exclusive charge of the enforcement and administration of all laws relative to the
conduct of elections for the purpose of ensuring free, orderly and honest elections x x x

xxx
As pointed out by petitioner Fornier, the COMELECs authority to deny due course to or
cancel a certificate of candidacy on the ground specified in Section 78 and other similar
provisions of the Omnibus Election Code has been recognized in a long line of cases.

FPJ, however, points out that the cases cited by petitioner Fornier do not involve
candidates for either President or Vice-President. He argues that the original jurisdiction
of the COMELEC is limited only to contests relating to elective regional, provincial and
city officials by paragraph (2) of Section 2, Article IX-C of the Constitution, viz:
Sec. 2. The Commission on Elections shall exercise the following powers and functions:

xxx

(2) Exercise exclusive original jurisdiction over all contests relating to the
elections, returns, and qualifications of all
elective regional, provincial, and city officials, and appellate jurisdiction over all
contests involving elective municipal officials decided by trial courts of general
jurisdiction, or involving elective barangay officials decided by trial courts of limited
jurisdiction.

Decisions, final orders, or rulings of the Commission on election contests involving

elective municipal and barangay offices shall be final, executory, and not appealable.

x x x (Emphasis supplied)
FPJ adds that the above-cited Constitutional provision refers precisely to the
jurisdiction of the Commission on Elections over the qualifications of candidates,
definitively establishing that paragraphs (1) and (3) which the petitioner invoked do not
include issues or questions involving the qualifications of candidates.

The cited provision does not support FPJs conclusion. Paragraph (2) of Section 2,
Article IX-C refers to the COMELECs jurisdiction over electoral contests involving
elective regional, provincial, and city positions, whether they are questioning the
conduct of the election and the canvass of the votes or are in the nature of quo
warrantoproceedings to determine the eligibility or ineligibility of the proclaimed winner.
The provision says nothing at all about the qualifications of a candidate for election,
much less the cancellation of a certificate of candidacy.

In contradistinction, Section 78 of the Omnibus Election Code provides for the sanctions
of denial of due course or cancellation where a material representation required by
Section 74 (i.e. announcement of candidacy, statement of eligibility, date of birth, civil
status, residence, profession or occupation, political affiliation, etc.) as contained in a
certificate of candidacy is shown to be false.

The cancellation of a certificate of candidacy under Section 78 of the Omnibus Election

Code is clearly separate and distinct from the election contests contemplated in
paragraph (2) of Section 2, Article IX-C. The former involves a measure
to enforce compliance with the statutory requirements for the filing of certificates of
candidacy, while the latter is an adversarial proceeding involving the title or claim of title
to an elective office. That there are grounds common to both does not detract from the
fact that each has a separate subject matter and purpose.

It is true that the present proceedings mark the first time that a petition questioning the
certificate of candidacy of a presidential candidate under Section 78 of the Omnibus
Election Code has reached this Court. However, in a number of cases involving
candidates for the House of Representatives and the Senate, [69] this Court has already
recognized
that the jurisdiction vested in the COMELEC by Section 78 arises from its enforcement
powers underparagraphs (1) and (3) of Section 2, Article IX-C of the Constitution, not
from its adjudicatory powers under paragraph (2) of the same section. Thus, in the
recent case of Domino v. Commission on Elections[70] involving a candidate for
Representative of the lone district of Sarangani, this Court declared:
The COMELEC has jurisdiction as provided in Sec. 78, Art. IX of the Omnibus
Election Code, over a petition to deny due course to or cancel certificate of
candidacy. In the exercise of the said
jurisdiction, it is within thecompetence of the COMELEC to determine whether fal
se representation as to material facts was made in thecertificate of candidacy, that
will include, among others, the residence of the candidate. [71]

xxx

DOMINOs contention that the COMELEC has no jurisdiction in the present petition is
bereft of merit.

As previously mentioned, the COMELEC, under Sec. 78, Art. IX of the Omnibus
Election Code, has jurisdiction over a petition to deny course to or cancel
certificate of candidacy. Such jurisdiction continues even after election, if for any
reason no final judgment of disqualification is rendered before the election, and the
candidate facing disqualification is voted for and receives the highest number of votes
and provided further that the winning candidate has not been proclaimed or has taken
his oath of office.[72] (Emphasis and underscoring supplied)
FPJ cites the Separate Opinion of Justice Mendoza, an amicus curiae in the present
proceedings, in Romualdez-Marcos v. Commission in Elections[73] to support his claim
that there are no proceedings to contest the eligibility or the qualification of a candidate
before the elections, and more specially, in regard candidates for President, Vice-
President and members of Congress.

An examination of Justice Mendozas Separate Opinion, however, shows that he was

well aware of the nature and purpose of a petition to deny due course to or cancel a
certificate of candidacy on the basis of Section 78 of the Omnibus Election Code:
The various election laws will be searched in vain for authorized proceedings for
determining a candidate's qualifications for an office before his election. There are none
in the Omnibus Election Code (B.P. Blg. 881), in the Electoral Reforms Law of 1987
(R.A. No. 6646), or in the law providing for synchronized elections (R.A. No. 7166).
There are, in other words, no provisions for pre-proclamation contests but only election
protests or quo warranto proceedings against winning candidates.

To be sure, there are provisions denominated for disqualification, but they are not
concerned with a declaration of the ineligibility of a candidate. These provisions are
concerned with the incapacity (due to insanity, incompetence or conviction of an
offense) of a person either to be a candidate or to continue as a candidate for public
office.There is also a provision for the denial or cancellation of certificates of
candidacy, but it applies only to cases involving false representations as to
certain matters required by law to be stated in the certificates.

These provisions are found in the following parts of the Omnibus Election Code:
12. Disqualifications. Any person who has been declared by competent authority
insane or incompetent, or has been sentenced by final judgment for subversion,
insurrection, rebellion or for any offense for which he has been sentenced to a. penalty
of more than eighteen months or for a crime involving moral turpitude, shall be
disqualified to be a candidate and to hold any office, unless he has been given plenary
pardon or granted amnesty.

The disqualifications to be a candidate herein provided shall be deemed removed upon

the declaration by competent authority that said insanity or incompetence had been
removed or after the expiration of a period of five years from his service of sentence,
unless within the same period he again becomes disqualified.

68. Disqualifications. Any candidate who, in an action or protest in which he is a

party is declared by final decision of a competent court guilty of, or found by the
Commission of having (a) given money or other material consideration to influence,
induce or corrupt the voters or public officials performing electoral functions; (b)
committed acts of terrorism to enhance his candidacy; (c) spent in his election
campaign an amount in excess of that allowed by this Code; (d) solicited, received or
made any contribution prohibited under Sections 89, 95, 96, 97 and 104; or (e) violated
any of Sections 80, 83, 85, 86 and 261, paragraphs d, e, k, v, and cc, sub-paragraph 6,
shall be disqualified from continuing as a candidate, or if he has been elected, from
holding the office. Any person who is a permanent resident of or an immigrant to a
foreign country shall not be qualified to run for any elective office under this Code,
unless said person has waived his status as permanent resident or immigrant of a
foreign country in accordance with the residence requirement provided for in the
election laws.

78. Petition to deny due course to or cancel a certificate of candidacy. A

verified petition seeking to deny due course or to cancel a certificate of candidacy may
be filed by any person exclusively on the ground that any material representation
contained therein as required under Section 74 hereof is false. The petition may be filed
at any time not later than twenty-five days from the time of the filing of the certificate of
candidacy and shall be decided, after due notice and hearing, not later than fifteen days
before the election.
xxx

The petition filed by private respondent Cirilo Roy Montejo in the COMELEC, while
entitled For Cancellation and Disqualification, contained no allegation that private
respondent Imelda Romualdez-Marcos made material representations in her certificate
of candidacy which were false. It sought her disqualification on the ground that on the
basis of her Voter Registration Record and Certificate of Candidacy, [she] is disqualified
from running for the position of Representative, considering that on election day, May 8,
1995, [she] would have resided less than ten (10) months in the district where she is
seeking to be elected. For its part, the COMELECs Second Division, in its resolution of
April 24, 1995, cancelled her certificate of candidacy and corrected certificate of
candidacy on the basis of its finding that petitioner is not qualified to run for the position
of Member of the House of Representatives for the First Legislative District of Leyte
and not because of any finding that she had made false representations as to material
matters in her certificate of candidacy.

Montejo's petition before the COMELEC was therefore not a petition for cancellation of
certificate of candidacy under 78 of the Omnibus Election Code, but essentially a
petition to declare private respondent ineligible. It is important to note this, because, as
will presently be
explained, proceedings under 78 have for their purpose todisqualify a person fro
m being a candidate, whereas quo warranto proceedings have for their purpose
to disqualify a person from holding public office. Jurisdiction over quo warranto
proceedings involving members of the House of Representatives is vested in the
Electoral Tribunal of that body.[74] (Emphasis supplied, italics in the original)
xxx
Moreover, the COMELECs authority to deny due course to or cancel the certificate of
candidacy of a Presidential candidate under Section 78 in connection with Section 74 of
the Omnibus Election Code cannot be deemed to run counter to the policy against the
filing of pre-proclamation cases against Presidential candidates since it is evidently not
one of the actions prohibited under Section 15 [75] of Republic Act No. 7166.[76]

Indeed, Section 2, Article I of the Omnibus Election Code makes its provisions, including
Sections 74 and 78, applicable to all candidates for all elective positions:
Sec. 2. Applicability. This Code shall govern all elections of public officers and, to the
extent appropriate, all referenda and plebiscites.
There being no provision to the contrary whether Constitutional or statutory, there is
every reason to apply Sections 74 and 78 of the Omnibus Election Code to the
certificates of candidacy of Presidential candidates.

The COMELEC Acted with Grave Abuse

of Discretion in Dismissing the Petition for
Disqualification for Lack of Merit.

Having determined that the COMELEC has jurisdiction to deny due course to or cancel
the certificate of candidacy of a Presidential candidate under Section 78 of the Omnibus
Election Code, this Court segues to the issue of whether the COMELEC acted with
grave abuse of discretion amounting to lack or excess of jurisdiction when it dismissed
the Petition for Disqualification for lack of merit.

Grave abuse of discretion has been defined as a capricious or whimsical exercise of

judgment which is equivalent to lack of jurisdiction. The abuse of discretion must be so
patent and gross as to amount to an evasion of positive duty or to a virtual refusal to
perform a duty enjoined by law, or to act at all in contemplation of law, as when the
power is exercised in an arbitrary and despotic manner by reason of passion or
personal hostility.[77]

A careful review of the questioned COMELEC Resolutions of January 23, 2004 and
February 6, 2004 shows that the COMELEC did indeed act with grave abuse of
discretion in issuing them: first, by resolving to dismiss the petition in the Petition for
Disqualification without stating the factual bases therefor; and second, by resolving to
dismiss the Petition for
Disqualification without ruling categorically on the issue of FPJs citizenship.

Absence of Factual Basis for the

Questioned COMELEC Resolutions

Section 14, Article VIII of the Constitution provides that [n]o decision shall be rendered
by any court without expressing therein clearly and distinctly the facts and the law on
which it is based. This requirement that the factual bases for a judgment must be
clearly and distinctly expressed in a decision or resolution has been extended to
administrative agencies exercising quasi-judicial functions by legislative fiat through
Section 14, Chapter 3, Book VII of Executive Order 292, otherwise known as the
Administrative Code of 1987:
Sec. 14. Decision. Every decision rendered by the agency in a contested case
shall be in writing and shall state clearly and distinctly the facts and the law on
which it is based. The agency shall decide each case within thirty (30) days following
its submission. The parties shall be notified of the decision personally or by registered
mail addressed to their counsel of record, if any, or to them. (Emphasis supplied)
Significantly, a corresponding rule was adopted by the COMELEC in Sections 1 and 2
of Rule 18 of the COMELEC Rules of Procedure:
Rule 18. Decisions.

Sec. 1. Procedure in Making Decisions. xxx

Every Decision shall express therein clearly and distinctly the facts and the law
on which it is based.

Sec. 2. Minute Resolution. No minute resolution resolving a case shall be rendered if

evidence has been adduced and received. (Emphasis supplied)
Despite the foregoing, however, a reading of the January 23, 2004 Resolution of
COMELEC First Division in the Petition for Disqualification does not state the facts on
which the disposition of the said Resolution is based.
Said questioned Resolution contains an enumeration of the evidence submitted by
petitioner Fornier,[78] a statement of the contents of FPJs Certificate of Candidacy,[79] and
a statement that the parties stipulated on the fact that Allan F. Poe is the father of FPJ.
[80]

However, in determining whether FPJ is a natural-born citizen, the COMELEC First

Division had only this to say:
To assail respondents claim of eligibility, petitioner asserts that respondent is not a
natural-born Filipino citizen. According to him, Exhibit B-2 (alleged Marriage Contract
between Allan Fernando Poe and Paulita Gomez) shows that the nationality of the
father of Allan Fernando Poe, Lorenzo Poe, is Espaol. Allan Fernando Poe is
admittedly the father of the respondent. In the same Exhibit B-2 appears an entry that
the nationality of Allan Fernando Poe is also Espaol. Petitioners line of argument is
that respondent could not have acquired Filipino citizenship from his father since the
latter is Espaol.

Did the allegations in the petition as well as the exhibits presented in support thereof
convincingly controvert the declaration by respondent in his Certificate of Candidacy
that he is a natural-born Filipino citizen?

No.

The petition and the evidence failed to show strongly and convincingly that the
declaration in the Certificate of Candidacy as to the citizenship of respondent was
a falsehood.[81] (Emphasis supplied)
In discussing the citizenship of Lorenzo Pou, to whom FPJ traces his Philippine
citizenship, the COMELEC First Division, after stating what it held to be the applicable
law,[82] was equally parsimonious, to wit:
In the alleged marriage contract between Allan Fernando Poe and Paulita Gomez,
submitted in evidence by petitioner, it was stated that Lorenzo Poe is the father of Allan
Fernando Poe and that he is an Espaol. By operation of the foregoing laws,
however, Lorenzo Poe, respondents grandfather, the father of Allan Fernando
Poe, had ceased to be a Spanish subject and had become a Filipino citizen.
Necessarily, Allan Fernando Poe Lorenzo Poes child who was born subsequent
to his (Lorenzos) acquisition of Filipino citizenship followed his fathers
citizenship. To dispute that fact, petitioner should have presented proof that Lorenzo
Poe intended to preserve his allegiance to the Crown of Spain by making before a court
of record, within a year from the date of the exchange of ratifications of the peace treaty,
a declaration of his decision to preserve such allegiance. Since there was no such
declaration, he should be held to have renounced it and to have adopted the nationality
of the territory in which he resides.[83] (Emphasis supplied; italics in the original)
The February 6, 2004 Resolution issued by the COMELEC En Banc which passed upon
Forniers Motion for Reconsideration of the COMELEC First Division Resolution
provides no further elucidation of the operative facts of the Petition for Disqualification.
In said Resolution, the COMELEC En Banc redefined the issue to be determined in the
Petition as whether FPJ made a deliberate attempt to mislead when he stated that he
was a natural-born Philippine citizen in his Certificate of Candidacy:
Undeniably, the question on the citizenship of respondent falls within the requirement of
materiality under Section 78.
However, proof of misrepresentation with a deliberate attempt to mislead, must still be e
stablished. In other words, direct and substantial evidence showing that the person
whose certificate of candidacy is being sought to be cancelled or denied due
course, must have known or have been aware of the falsehood as appearing on hiscerti
ficate.[84] (Underscoring in the original)
The COMELEC En Banc then proceeded to quote with approval the Resolution of the
COMELEC First Division:
We quote, with approval, the position taken by the First Division, thus:
Considering that the evidence presented by the petitioner is not substantial, we declare
that the respondent did not commit any material misrepresentation when he stated in
his Certificate of Candidacy that he is a natural-born Filipino citizen.
This leaves us with the question: Did the First Division err when it proceeded to make a
pronouncement that Respondent Poe is a natural-born Filipino citizen in disposing the
issue of whether or not he made a material misrepresentation in his Certificate of
Candidacy regarding his citizenship?

We do not think so.[85]

But on what factual basis the First Division concluded at respondent FPJ is a
natural-born Filipino citizen, the COMELEC En Banc remained silent.

Consequently, I am at a loss as to how the COMELEC appreciated the evidence

presented by the parties in order to arrive at its conclusions. As this Court observed
in Nicos Industrial Corp. v. Court of Appeals:[86]
It is a requirement of due process that the parties to a litigation be informed of
how it was decided, with an explanation of the factual and legal reasons that led
to the conclusions of the court. The court cannot simply say that judgment is
rendered in favor of X and against Y and just leave it at that without any justification
whatsoever for its action. The losing party is entitled to know why he lost, so he may
appeal to a higher court, if permitted, should he believe that the decision should be
reversed. A decision that does not clearly and distinctly state the facts and the law
on which it is based leaves the parties in the dark as to how it was reached and is
especially prejudicial to the losing party, who is unable to pinpoint the possible
errors of the court for review by a higher tribunal.[87] (Emphasis supplied)
In fine, neither the Resolution of the COMELEC First Division, nor the Resolution
COMELEC En Banc indicates the factual findings on which both were supposedly
anchored. This failure on the part of the COMELEC to abide by the requirements of
Section 14, Chapter 3, Book VII of the Administrative Code of 1987 as well as Sections
1 and 2 of Rule 18 of its own Rules of Procedure impressed the questioned Resolutions
of January 23, 2004 and February 6, 2004 with the vice of grave abuse of discretion and
reduced the same to patent nullities.

Apropos, in this regard, is this Courts admonition in Naguiat v. National Labor Relations
Commission:[88]
x x x Unfortunately, the NLRC did not discuss or give any explanation for holding
Naguiat Enterprises and its officers jointly and severally liable in discharging CFTIs
liability for payment of separation pay. We again remind those concerned that
decisions, however concisely written, must distinctly and clearly set forth the
facts and law upon which they are based. This rule applies as well to dispositions
by quasi-judicial and administrative bodies.[89] (Emphasis supplied)
COMELECs Jurisdiction to Determine the
Citizenship of a Candidate for Election/
Clarification of the pronouncement in
Salcedo II.

From the records of the present case, it is clearly evident that the central issue of the
proceedings before the COMELEC in the Petition for Disqualification, and indeed in the
case now before this Court, is FPJs claim to being a natural-born Filipino citizen.

By his original Petition in the Petition for Disqualification, petitioner Fornier directly
called into question FPJs claim to being a natural-born Filipino citizen who is eligible for
the position of President of the Republic of the Philippines, thus:
4. [FPJ], however, is not even a citizen of the Philippines, much more a natural born
citizen, and as such lacks one of the essential qualifications for the position of
President of the Republic of the Philippines since both of his parents are not Filipino
citizens.
xxx
11. Clearly, [FPJ] is not a citizen of the Philippines, much more a natural-born Filipino
citizen, considering that both of his parents are aliens. Also, even
assuming arguendo that respondent Poes father, Allan F. Poe, is a Filipino citizen, as
indicated in his Certificate of Birth (Annex B hereof), since respondent Poe is an
illegitimate child of his father with Bessie Kelley, an American, he acquired the
citizenship of the latter. [United States vs. Ong Tianse, supra]

12. Hence, [FPJ], not being a natural-born citizen of the Philippines, lacks an
essential qualification and corollarily possesses a disqualification to be elected
President of the Republic of the Philippines, as expressly required under the 1987
Constitution.

13. In view of the foregoing, [FPJ] should be disqualified from being a candidate for
the position of President of the Republic of the Philippines in the coming 10 May
2004 elections.[90]
The COMELEC First Division, while aware of the fact that the Petition for
Disqualification before it called for a determination of FPJs citizenship and that the
COMELEC had, in the past, given due course to similar petitions, nevertheless held that
it was not the proper forum to finally declare whether FPJ is indeed a natural-born
Filipino citizen:
As earlier stated, the Commission has jurisdiction to deny due course to or cancel a
Certificate of Candidacy exclusively on the ground that any material representation
contained therein is false.

We feel we are not at liberty to finally declare whether or not the respondent is a
natural-born Filipino citizen. Comelec is not the proper forum. But we are called
upon to decide the question of whether or not the Certificate of Candidacy filed by the
respondent should be denied due course or cancelled. [91] (Emphasis supplied)
Passing on Forniers Motion for Reconsideration, the COMELEC En Banc declared that
[u]ndeniably, the question on the citizenship of respondent falls within the requirement
of materiality under Section 78. The COMELEC En Banc went on to stress that the
power of the COMELEC to determine issues of citizenship as an incident to petitions for
disqualification or cancellation of certificates of candidacy has never been questioned
by this Court.[92] Nevertheless, it sustained the First Divisions dismissal of the Petition
for Disqualification without determiningthe issue of FPJs citizenship.

It is apparent then that the COMELEC avoided ruling squarely, one way or the other, on
the issue of FPJs citizenship. Considering that Section 74 of the Omnibus Election
Code requires that a candidate must state under oath that he is eligible for the office for
which he is announcing his candidacy and that Section 2, Article VII of the Constitution
clearly provides that [n]o person may be elected President unless he is a natural-born
citizen of the Philippines, it was the duty of the COMELEC in the Petition for
Disqualification to determine, on the basis of the evidence adduced, whether FPJ is in
fact a natural-born Filipino citizen. In resolving to dismiss the Petition without
performing this duty, the COMELEC clearly acted with grave abuse of discretion.

Notatu dignum is that while, under our laws, there can be no action or proceeding for
the judicial declaration of the citizenship of an individual, [93] this Court has long
recognized the power of quasi-judicial agencies to pass upon, and rule on the issue of
citizenship as an incident to the adjudication of a real and justiciable controversy such
as when a person asserts a right exercisable only by a Filipino citizen. [94] Indeed, the
COMELEC itself has ruled, or has been deemed to have ruled, squarely upon the issue
of citizenship in a number of cases concerning candidates for election. [95]

To justify its evasion of the duty to rule squarely on the issue of citizenship, the
COMELEC relies on this Courts ruling in Salcedo II v. Commission on Elections,
[96]
wherein this Court held:
Aside from the requirement of materiality, a false representation under Section 78 must
consist of a deliberate attempt to mislead, misinform, or hide a fact which would
otherwise render a candidate ineligible. [Romualdez-Marcos v. COMELEC, 248 SCRA
300 (1995)] In other words, it must be made with an intention to deceive the electorate
as to ones qualifications for public office. The use of a surname, when not intended to
mislead or deceive the public as to ones identity, is not within the scope of the
provision.[97]
Thus, upon the above-quoted pronouncement, the COMELEC En Banc held that
Fornier should have presented proof of misrepresentation with a deliberate attempt to
mislead on the part of FPJ, and evidently confined the issue in the Petition for
Disqualification to whether FPJ must have known or have been aware of the falsehood
as [allegedly] appearing on his certificate.

The COMELECs ratio does not convince. First, even accepting its definition of the
issue, it is impossible for the COMELEC to determine whether FPJ was aware of a false
material representation in his Certificate of
Candidacywithout first determining whether such material representation (in this case,
his claim of natural-born citizenship)was false. The fact alone that there is a public
document (i.e., his birth certificate) which FPJ might have relied upon in averring
natural-born citizenship does not automatically exclude the possibility that (a) there is
other evidence to show that such averment is false, and (b) that FPJ was aware of such
evidence.

Second, the COMELECs strained construction of the ruling in Salcedo II v. Commission

on Elections[98] removes the above-quoted portion of the ponencia from the factual
circumstances of the case. The issue in Salcedo II was whether Ermelita Cacao
Salcedos use of the surname Salcedo in her Certificate of Candidacy constituted a
false material representation under Section 78 of the Omnibus Election Code, given the
allegation that she was not legally married to Neptali Salcedo. In ruling that Ermelita
Cacaos use of the surname Salcedo did not constitute a false material representation,
this Court stated:
x x x it may be concluded that the material misrepresentation contemplated by
Section 78 of the Code refer[s] to qualifications for elective office. This conclusion
is strengthened by the fact that the consequences imposed upon a candidate guilty of
having made a false representation in his certificate of candidacy are grave to prevent
the candidate from running or, if elected, from serving, or to prosecute him for violation
of the election laws. It could not have been the intention of the law to deprive a person
of such a basic and substantive political right to be voted for a public office upon just
any innocuous mistake.

Petitioner has made no allegations concerning private respondents qualifications

to run for the office of mayor. Aside from his contention that she made a
misrepresentation in the use of the surname Salcedo, petitioner does not claim
that private respondent lacks the requisite residency, age, citizenship or any
other legal qualification necessary to run for a local elective office as provided for
in the Local Government Code.Thus, petitioner has failed to discharge the burden of
proving that the misrepresentation allegedly made by private respondent in her
certificate of candidacy pertains to a material matter.

Aside from the requirement of materiality, a false representation under Section 78 must
consist of a deliberate attempt to mislead, misinform, or hide a fact which would
otherwise render a candidate ineligible. In other words, it must be made with an
intention to deceive the electorate as to ones qualifications for public office. The use of
a surname, when not intended to mislead or deceive the public as to ones
identity, is not within the scope of the provision.

There is absolutely no showing that the inhabitants of Sara, Iloilo were deceived by the
use of such surname by private respondent. Petitioner does not allege that the
electorate did not know who they were voting for when they cast their ballots in favor of
Ermelita Cacao Salcedo or that they were fooled into voting for someone else by the
use of such name. It may safely be assumed that the electorate knew who private
respondent was, not only by name, but also by face and may have even been
personally acquainted with her since she has been residing in the municipality of Sara,
Iloilo since at least 1986. Bolstering this assumption is the fact that she has been living
with Neptali Salcedo, the mayor of Sara for three consecutive terms, since 1970 and the
latter has held her out to the public as his wife.

Also arguing against petitioners claim that private respondent intended to deceive the
electorate is the fact that private respondent started using the surname Salcedo since
1986, several years before the elections. In her application for registration of her rice
and corn milling business filed with the Department of Trade and Industry in 1993,
private respondent used the name Ermelita Cacao Salcedo. From 1987 to 1997, she
also used the surname Salcedo in the income tax returns filed by herself and by
Neptali Salcedo. The evidence presented by private respondent on this point, which has
remained uncontested by petitioner, belie the latters claims that private respondent
merely adopted the surname Salcedo for purposes of improving her chances of
winning in the local elections by riding on the popularity of her husband.

Thus, we hold that private respondent did not commit any material misrepresentation by
the use of the surname Salcedo in her certificate of candidacy.[99] (Emphasis and
underscoring supplied)
The import of this Courts ruling in Salcedo II is clearly that Ermelita Cacaos use of the
surname Salcedo, assuming it to be a misrepresentation, was not a false material
representation in the context of Section 78 of the Omnibus Election Code since it did
not deceive the electorate as to either her identity or her qualifications for the position of
mayor.

In contrast, a false statement as to a qualification for elective office in this case,

natural-born citizenship is always material and, if the truth remains undisclosed, it
would definitely deceive the electorate as to a candidates qualifications for office.

It may indeed be that a false representation in a certificate of candidacy is the result of a

candidates erroneous interpretation of law and not from a false statement of fact,
intentional or otherwise.[100] In declaring that he is eligible, a candidate invariably relies
on his understanding of the legal requirement of residency or, as in this case,
citizenship.

Thus, in Romualdez-Marcos v. Commission on Elections,[101] cited in Salcedo II,[102] Mrs.

Marcos stated that she had been a resident of Leyte for only 7 months in the belief that
what she was required by the law to state was the period of her actual residence
therein. In deciding the case, this Court held that it was the actual fulfillment of the
requirement, not the candidates erroneous understanding of the requirement which was
controlling:
It is the fact of residence, not a statement in a certificate of
candidacy which ought to be decisive indetermining whether or not an individual
has satisfied the constitutions residency qualification requirement.The said [false]
statement becomes material only when there is or appears to be a deliberate attempt to
mislead, misinform, or hide a fact which would otherwise render a candidate ineligible. It
would be plainly ridiculous for a candidate to deliberately and knowingly make a
statement in a certificate of candidacy which would lead to his or her disqualification.
[103]
(Emphasis and underscoring supplied)
As applied to the present petitions, it is the status of FPJs being a natural-born Filipino
citizen, not the statement to that effect, which is material since it is the status of being a
natural-born Filipino which
is decisive in determiningwhether the Constitutional and statutory requirements have b
een fulfilled.

Viewed from whatever angle, it is beyond cavil that a determination of FPJs citizenship
was crucial to the proper disposition of the Petition for Disqualification. Such
determination was impressed with immense public interest and made more urgent by
the fast approaching May 10, 2004 elections as it directly impacts on the informed
choice of each and every Filipino voter. The COMELECs failure to rule squarely on said
issue clearly constituted grave abuse of discretion.

Philippine Citizenship as Conferred by the

Constitution.

Having identified FPJs citizenship to be the crucial issue, whether in the Petition for
Disqualification or in the instant petition, it is necessary to consider the applicable law
and jurisprudence for its determination.

Citizenship is a political status denoting membership, more or less permanent in

character, in a political society and implying the duty of allegiance on the part of the
member and a duty of protection on the part of society.[104]

Thus, a citizen is one who, by birth, naturalization, or otherwise, is a member of a

political community, and as such is subject to its laws and entitled to its protection in all
his rights incident to that relation. Derived from the Latin word cives, the term citizen
conveys the idea of connection or identification with the state or government and
participation in its function.[105] It denotes possession within that particular political
community of full civil and political rights subject to special disqualifications such as
minority.[106]

It is a recognized rule that each state, in the exercise of its sovereign power, is free to
determine who its citizens are, but not who the citizens of other states are:
As a general principle, each State is free to determine by its own law the persons
whom it considers to be its own nationals. The Hague Convention in 1930 on
Conflict of Nationality Laws laid down two important rules on the point. The first
rule is that it is for the municipal law of each State (not for International Law) to
determine who are the nationals of a particular State, subject to certain
limitations. Hence, the following provisions of the Hague Convention:
It is for each State to determine under its own law who are its nationals. This law
shall be recognized by other States insofar as it is consistent with international
conventions, international customs, and the principles of law generally recognized with
regard to nationality.

The second rule is a logical corollary of the first. If it is for the municipal law of each
State to determine who are its nationals, it would necessarily follow that

Any question as to whether a person possesses the nationality of a particular State

shall be determined in accordance with the law of that State.

In short, no other law than that of the Philippines determines whether or not a
person is a Filipino national.[107](Emphasis supplied)
In the Philippines, citizenship is essential not only for the exercise of political
rights[108] and the right to hold public office,[109] but for the exercise of a number of
important economic privileges which the Constitution reserves exclusively to Philippine
citizens as well.[110] A comparison of the 1935, 1973 and present 1987 Constitution
shows that a number of economic privileges reserved exclusively to Philippine citizens
has increased over time.

These nationalist provisions make the question of citizenship of even greater

importance and deserving of the most serious consideration. Thus, it has been said
that [to] those who are citizens by birth it is a precious heritage, while to those who
acquire it thru naturalization it is a priceless acquisition. [111]

Philippine Citizenship as Conferred by the

Constitution.

Being a political status, citizenship is determined by political law and not by civil or other
laws. Thus in Ching Leng v. Galang,[112] this Court, speaking through Justice (later Chief
Justice) Roberto Concepcion, stated:
The framers of the Civil Code had no intention whatsoever to regulate
therein political questions. Hence, apart from reproducing the provisions of the
Constitution on citizenship, the Code contains no precept thereon except that which
refers all matters of naturalization, as well as those related to the loss
and reacquisition of citizenship to special laws. Consistently with this policy, our Civil
Code does not include therein any rule analogous to Articles 18 to 28 of the Civil Code
of Spain, regulating citizenship.[113] (Emphasis supplied, underscoring in the original)
Philippine citizenship is thus governed primarily by Article IV of our 1987
Constitution, viz:
ARTICLE IV
Citizenship

Sec. 1. The following are citizens of the Philippines :

(1) Those who are citizens of the Philippines at the time of the adoption of this
Constitution;

(2) Those whose fathers or mothers are citizens of the Philippines;

(3) Those born before January 17, 1973, of Filipino mothers, who elect Philippine
citizenship upon reaching the age of majority; and

(4) Those who are naturalized in accordance with law.

Sec. 2. Natural-born citizens are those who are citizens of the Philippines from birth
without having to perform any act to acquire or perfect their Philippine citizenship.
Those who elect Philippine citizenship in accordance with paragraph (3), Section 1
hereof shall be deemed natural-born citizens.

Sec. 3. Philippine citizenship may be lost or reacquired in the manner provided by law.

Sec. 4. Citizens of the Philippines who marry aliens shall retain their citizenship, unless
by their act or omission they are deemed, under the law, to have renounced it.

Sec. 5. Dual allegiance of citizens is inimical to the national interest and shall be dealt
with by law. (Emphasis supplied)
Paragraph (1) of Section 1, Article IV of the 1987 Constitution recognizes as citizens
those who were considered Philippine citizens under the 1973 Constitution. Paragraph
(1) of Section 1, Article III of the 1973 Constitution, [114]in turn refers to those who were
citizens under Article IV of the 1935 Constitution,[115] which provides:
 ARTICLE IV
CITIZENSHIP

Sec. 1. The following are citizens of the Philippines:

(1) Those who are citizens of the Philippine Islands at the time of the adoption of this
Constitution.

(2) Those born in the Philippine Islands of foreign parents who, before the adoption of
this Constitution, had been elected to public office in the Philippine Islands.

(3) Those whose fathers are citizens of the Philippines.

(4) Those whose mothers are citizens of the Philippines and, upon reaching the age of
majority, elect Philippine citizenship.

(5) Those who are naturalized in accordance with law.

Sec. 2. Philippine citizenship may be lost or reacquired in the manner provided by law.
Thus, the citizenship of one born during the effectivity of the 1935 Constitution is
determined by the provisions thereof. Moreover, the changes in the provisions on
citizenship in the present Constitution may not be deemed to retroact to benefit those
born before it, except only when such retroactive effect has been made explicit in the
Constitution itself. Thus, in In Re: Application For Admission to the Philippine Bar.
Vicente D. Ching,[116] this Court held that:
x x x It should be noted, however, that the 1973 and 1987 Constitutional provisions on
the election of Philippine citizenship should not be understood as having a curative
effect on any irregularity in the acquisition of citizenship for those covered by the
1935
Constitution. If the citizenship of a person was subject to challengeunder the old
charter, it remains subject to challenge under the new charter even if the judicial
challenge hadnot been commenced before the effectivity of the new Constitution.
[117]
(Emphasis and underscoring supplied supplied).
Prior to the ratification of the 1935 Constitution, citizenship of the Philippine Islands was
governed by the principal organic acts by which the United States governed the country.
These were the Philippine Bill of July 1, 1902 and the Philippine Autonomy Act of August
29, 1916, also known as the Jones Law. Both of these organic acts make reference to
the Treaty of Paris of December 10, 1898 by which Spain ceded the Philippine Islands
to the United States. Article IX of the Treaty of Paris provided for effects of the change in
sovereignty on citizenship status in the Philippine Islands:
Spanish subjects, natives of the Peninsula, residing in the territory over which Spain by
the present treaty relinquishes or cedes her sovereignty, may remain in such territory or
may remove therefrom, retaining in either event all their rights of property, including the
right to sell or dispose of such property or of its proceeds; and they shall also have the
right to carry on their industry, commerce and professions, being subject in respect
thereof to such laws as are applicable to other foreigners. In case they remain in the
territory they may preserve their allegiance to the Crown of Spain by making, before a
court of record, within a year from the date of the exchange of ratifications of this treaty,
a declaration of their decision to preserve such allegiance; in default of which
declaration they shall be held to have renounced it and to have adopted the nationality
of the territory in which they may reside.

The civil rights and political status of the native inhabitants of the territories hereby
ceded to the United States shall be determined by the Congress.
Interpreting the provisions of the Philippine Bill of 1902 and the Jones Law, this Court, in
the recent case of Valles v. Commission on Elections,[118] had occasion to state:
The Philippine law on citizenship adheres to the principle of jus sanguinis. Thereunder,
a child follows the nationality or citizenship of the parents regardless of the place of
his/her birth, as opposed to the doctrine of jus soliwhich determines nationality or
citizenship on the basis of place of birth.

Private respondent Rosalind Ybasco Lopez was born on May 16, 1934 in Napier
Terrace, Broome, Western Australia, to the spouses, Telesforo Ybasco, a Filipino citizen
and native of Daet, Camarines Norte, and Theresa Marquez, an Australian. Historically,
this was a year before the 1935 Constitution took into effect and at that time, what
served as the Constitution of the Philippines were the principal organic acts by
which the United States governed the country. These were the Philippine Bill of
July 1, 1902 and the Philippine Autonomy Act of August 29, 1916, also known as
the Jones Law.

Among others, these laws defined who were deemed to be citizens of the Philippine
islands. The Philippine Bill of 1902 defined Philippine citizens as:

SEC. 4. x x x all inhabitants of the Philippine Islands continuing to reside therein

who were Spanish subjects on the eleventh day of April, eighteen hundred and
ninety-nine, and then resided in the Philippine Islands, and their children born
subsequent thereto, shall be deemed and held to be citizens of the Philippine
Islands and as such entitled to the protection of the United States, except such as
shall have elected to preserve their allegiance to the Crown of Spain in
accordance with the provisions of the treaty of peace between the United States
and Spain signed at Paris December tenth, eighteen hundred and ninety-eight.

The Jones Law, on the other hand, provides:

SEC. 2. That all inhabitants of the Philippine Islands who were Spanish subjects on the
eleventh day of April, eighteen hundred and ninety-nine, and then resided in said
Islands, and their children born subsequent thereto, shall be deemed and held to be
citizens of the Philippine Islands, except such as shall have elected to preserve their
allegiance to the Crown of Spain in accordance with the provisions of the treaty
of peace between the United States and Spain, signed at Paris December tenth,
eighteen hundred and ninety-eight, and except such others as have since become
citizens of some other country: Provided, That the Philippine Legislature, herein
provided for, is hereby authorized to provide by law for the acquisition of Philippine
citizenship by those natives of the Philippine Islands who cannot come within the
foregoing provisions, the natives of the insular possessions of the United States, and
such other persons residing in the Philippine Islands who are citizens of the United
States, or who could become citizens of the United States under the laws of the United
States if residing therein.

Under both organic acts, all inhabitants of the Philippines who were Spanish
subjects on April 11, 1899 and resided therein including their children are deemed
to be Philippine citizens. Private respondent's father, Telesforo Ybasco, was born on
January 5, 1879 in Daet, Camarines Norte, a fact duly evidenced by a certified true
copy of an entry in the Registry of Births. Thus, under the Philippine Bill of 1902 and the
Jones Law, Telesforo Ybasco was deemed to be a Philippine citizen. By virtue of the
same laws, which were the laws in force at the time of her birth, Telesforo's daughter,
herein private respondent Rosalind Ybasco Lopez, is likewise a citizen of the
Philippines.
The signing into law of the 1935 Philippine Constitution has established the principle
of jus sanguinis as basis for the acquisition of Philippine citizenship, to wit:

(1) Those who are citizens of the Philippine Islands at the time of the adoption of this
Constitution.
(2) Those born in the Philippine Islands of foreign parents who, before the adoption of
this Constitution had been elected to public office in the Philippine Islands.
(3) Those whose fathers are citizens of the Philippines.
(4) Those whose mothers are citizens of the Philippines and, upon reaching the age of
majority, elect Philippine citizenship.
(5) Those who are naturalized in accordance with law.

So also, the principle of jus sanguinis, which confers citizenship by virtue of blood
relationship, was subsequently retained under the 1973 and 1987 Constitutions. Thus,
the herein private respondent, Rosalind Ybasco Lopez, is a Filipino citizen, having been
born to a Filipino father. The fact of her being born in Australia is not tantamount to her
losing her Philippine citizenship. If Australia follows the principle of jus soli, then at most,
private respondent can also claim Australian citizenship resulting to her possession of
dual citizenship.[119] (Emphasis supplied, italics in the original)
Upon the other hand, in In Re: Bosque,[120] this Court elucidated on
the requisites for the acquisition of citizenshipof the Philippine Islands by operation of th
e Treaty of Paris as follows:
The cession of the Philippine Archipelago having been agreed upon by the parties to the
treaty of Paris of December 10, 1898, the compulsory subjection of the subjects of the
ceding power to the new sovereign followed as a logical consequence. The status of
these subjects was not uniform, as in addition to the natives there were others
who were merely residents but who, equally with the natives had interests and
rights inherent in the nationality of the territory. With respect to these the special
agreement contained in article 9 was established, by virtue of which it was agreed
to accord them the right of electing to leave the country, thus freeing themselves
of subjection to the new sovereign, or to continue to reside in the territory, in
which case the expiration of the term of eighteen months [121] without their making
an express declaration of intention to retain their Spanish nationality resulted in
the loss of the latter, such persons thereby becoming subjects of the new
sovereign in the same manner as the natives of these Islands. The period of
eighteen months began to run from the date of the exchange of the ratifications
of the treaty that is to say, from April 11, 1899, and expired on the
corresponding day of October, 1900. The petitioner absented himself from these
Islands on May 30, 1899, and remained absent therefrom during the whole period. It
was in January, 1901, that he returned to these Islands.

From this conduct on the part of the petitioner it is evident that he elected to take the
first of the two courses open to him under his right of option. Neither the Government
nor the courts can place any other construction upon the facts above related. Having left
the Islands he had no occasion to make any declaration of his intention to preserve his
Spanish nationality, which he carried with him on his departure. This nationality could
be forfeited only by a continued residence in the ceded territory and a failure to
make a declaration of intention to preserve it within the term fixed
therefore. The conditions which gave rise to the presumptive change of nationalit
y wereresidence and the lapse of eighteen months without express declaration to
the contrary; these two conditions not being fulfilled there was no change of
national status. Neither by the Government of Spain nor by that of the United States
could the petitioner be regarded as a Filipino subject. By absenting himself from the
territory he continued to be a Spaniard.

To native-born subjects of the territory no such right of option was accorded; it

was expressly refused them upon the rejection by the American Commissioners of the
proposition in favor of the inhabitants of the ceded territories made by the Spanish
Commissioners in Annex No. 1 to the twenty-second protocol. (Conference of
December 10, 1898). The native subject could not evade the power of the new
sovereign by withdrawing from the Islands, nor while continuing to reside therein
make declaration of his intention to preserve the Spanish nationality enjoyed
under the former sovereign. Neither the Government of the United States nor that of
Spain can consider them as other than Filipino subjects. This is expressly stated by the
Spanish Government in article 1 of its royal decree of May 11, 1901.

The dates fixed by the treaty by which the sovereignty of one nation is ceded to another
are of the highest importance, they being part of the contract, and are not within the
control of the subjects as are those relating to their individual rights by reason of the fact
that the political rights of the contracting nations themselves are the subject of the
agreement. It is for this reason that the Government of Spain in the royal decree above
cited has always taken the dates fixed in the treaty of Paris as the starting point, and,
moreover, expressly declares thereinthat persons who are natives or residents of
the ceded or relinquished territories can not, in their relations with the
Government or authorities of such territories, lay claim to Spanish nationality
preserved or recovered by virtue of said decree, except with the consent of such
Government, or under treaty stipulations. (Art. 5.) The Government and courts of
these Islands should not act with less circumspection in the matter, and invade the
sovereign rights of Spain by giving the presumptive nationality established by Article IX
of the treaty of Paris an extent not warranted by the conditions upon which it depends,
to wit, residence coupled with failure to make an express declaration to the contrary.
The ordinary provisions of local laws in their normal operation with regard to the effect
of absence upon the retention of a residence or domicile can not therefore be relied
upon, nor the presumptions as to the intention of an absentee recognized by the civil
codes and international treaties, although the most general and almost the only proof
allowed by statute as evidence of an intention to preserve a residence or domicile in a
country is the maintenance of a dwelling or commercial establishment therein, upon
which point, as also upon the fact that the petitioner became a member of the bar of
Barcelona upon his arrival in that city, we make no decision, not regarding it as of any
moment in view of the conclusions above expressed. The fact is that one is not to be
regarded as having submitted to the new sovereign by the mere failure to make
an express declaration, inasmuch as without a residence de facto the declaration
is of no significance, having been established for the express purpose of
overcoming the effect of a continued residence, an act which in itself implies
subjection to the new sovereign by giving rise to the presumption of waiver of Spanish
nationality and the adoption of that of the territory.

The petitioner can not, therefore, be considered to have lost his Spanish nationality by
reason of his residence in the territory after the 11th of October, 1900, and his failure to
make declaration of his intention to preserve it within the period agreed upon by the
high contracting parties to the treaty of Paris, and to have adopted the nationality of the
native subjects under the presumption arising from the conditions expressed. He can
only acquire it through voluntary renunciation of his present nationality by seeking to
become naturalized in these Islands; but upon this matter this court can decide nothing,
there having been no legislation upon the subject up to the present. [122](Emphasis and
underscoring supplied)
From the foregoing, it can be gathered that Article IX of the Treaty of Paris contemplated
two distinct classes of persons: (a) the native inhabitants of the Philippine Islands, and
(b) Spanish subjects who were natives of the Peninsula. The native inhabitants
immediately became citizens of the Philippine Islands with no option whatsoever to
retain Spanish citizenship.
However, for the natives of Spain to become citizens of the Philippine Islands, the
following conditions had to be met: (1) they had to
be residents of the Philippine Islands on April 11, 1899; (2) they had
to maintain actual residence therein for a period of 18 months or until October 11, 1900;
(3) without theirmaking an express declaration of intention to retain Spanish citizenship.
The absence of any of these requisites prevented them from becoming citizens of the
Philippine Islands.

In the later case of In Re Mallare,[123] this Court, speaking through Justice (then Acting
Chief Justice) J.B.L. Reyes, held that a claim of Philippine citizenship on the basis of the
Treaty of Paris and the two Organic Acts must be supported by preponderant evidence,
to wit:
On 16 July 1962, the then Acting Commissioner of Immigration Martiniano P. Vivo
denounced the respondent to this Court as a Chinaman masquerading as a Filipino
citizen and requested that the matter be investigated thoroughly and if the respondent
fails to show that he has legally become a Filipino, steps be taken for striking his name
from the roll of persons authorized to practice law. Acting upon the request, this Court,
on 9 August 1962, referred the matter to its Legal Officer-Investigator for investigation
and report. An investigation was thus held wherein the relator or complainant and the
respondent appeared and adduced their respective evidence.

The position of the respondent-lawyer is that he is a Filipino citizen based on the

supposed citizenship of his father, Esteban Mallare, alleged to be a Filipino citizen by
choice, because he was the illegitimate son of a Chinese father and a Filipina mother,
Ana Mallare; and that the respondent's mother, Te Na, a Chinese, followed the
citizenship of her husband upon their marriage.

xxx

On respondent's first claim to citizenship by blood, the earliest datum that can be
stated about the respondent's supposed ancestry is that in 1902, ex-municipal
president Rafael Catarroja, then eight years old, met for the first time Ana Mallare,
the supposed paternal grandmother of the respondent, in Macalelon, Quezon. He
had not seen her deliver or give birth to the baby boy, Esteban Mallare, father of the
respondent, but met the supposed Filipina mother and Esteban Mallare years later
when the boy was already eight (8) years old. (Annex 8, pp. 10-12, t.s.n., Sept. 24,
1959, Civil Case No. 329-G, CFI of Quezon Province). There is no evidence that Ana
Mallare was an inhabitant of the Philippine Islands continuing to reside therein
who was a Spanish subject on the eleventh day of April, eighteen hundred and
ninety-nine, as required by the Philippine Bill of July 1, 1902 and she cannot,
therefore, be considered a Filipina. That witness Catarroja, the respondent, and the
latter's brothers and sisters, stated that Ana Mallare was a Filipina, as well as their
testimonies in the civil case that she had not married her Chinese husband and that she
is the true mother of Esteban Mallare, are more of opinion or conjecture than fact,
utterly insufficient to overcome the presumption that persons living together as husband
and wife are married to each other (Rule 131, par. bb). Every intendment of law and
fact, says Article 220 of our Civil Code leans toward the validity of marriage and the
legitimacy of children.[124] (emphasis supplied)
It was only after a new trial, wherein Mr. Mallare was able to present sufficient evidence,
that his claim of Philippine citizenship was finally recognized:
In Our decision of April 29, 1968, respondent's claim that he is a Filipino was
denied for lack of evidence proving the Philippine citizenship of his father,
Esteban Mallare. It was ruled that Ana Mallare (Esteban's mother) can not be
considered a Filipino, there being no proof that she was "an inhabitant of the
Philippines continuing to reside therein who was a Spanish subject on the
eleventh day of April, eighteen hundred and ninety-nine"; that the landing certificate
issued by the Bureau of Immigration which referred to respondent's mother, Te Na, as
"wife of Dy Esteban, P.I. citizen", was based upon an ex parte determination of the
evidence presented by therein applicant and consequently carries little evidentiary
weight as to the citizenship of her said husband; and that the affidavit of Esteban
Mallare, executed on February 20, 1939, to the effect that he had chosen to follow the
citizenship of his Filipino mother was not only self-serving, but also it can not be
considered a re-affirmation of the alleged election of citizenship since no previous
election of such citizenship has been proved to exist.

With the additional evidence submitted by respondent pursuant to the authority

granted by this Court, the aforementioned void in the proof of respondent's
citizenship has been duly filled.

The witnesses, all natives of

Macalelon, who had personal knowledge of the person, birth and residency of
both Ana Mallare and her son Esteban, were one in their declaration that Ana Mallare
is a Tagalog who had continuously resided in the place, and that Esteban, her son, was
reputedly born out of wedlock. Such declarations constitute admissible evidence of the
birth and illegitimacy of Esteban Mallare. Reputation has been held admissible as
evidence of age, birth, race, or race-ancestry, and on the question of whether a child
was born alive. Unlike that of matters of pedigree, general reputation of marriage may
proceed from persons who are not members of the family - the reason for the distinction
is the public interest that is taken in the question of the existence of marital relations.

The principle could not have been more true than in a Philippine rural community where
relationships not in conformity with established conventions become the subject of
criticisms and public cynosure. Thus, the public reputation in Macalelon that Esteban
was Ana's natural child, testified to by the witnesses, would constitute proof of the
illegitimacy of the former. Besides, if Esteban were really born out of legal union, it is
highly improbable that he would be keeping the surname Mallare after his mother,
instead of adopting that of his father. And it would be straining the imagination to
perceive that this situation was purposedly sought by Estebans parents to suit some
ulterior motives. In 1903, we can not concede that alien inhabitants of his country were
that sophisticated or legally-oriented.

The assertion of the witnesses, which have not been controverted, that Ana Mallare is a
Tagalog (and, therefore, a Filipino citizen), cannot be assailed as being mere
conclusions devoid of evidentiary value. The declarations were not only based on the
reputation in the community regarding her race or race-ancestry, which is admissible in
evidence, but they must have certain factual basis. For it must be realized that in this
Philippine society, every region possesses certain characteristics all its own. Thus, a
Tagalog would normally detect if a person hails from the same region even from the way
the latter speaks. Considering that the witnesses testified having known, and lived with,
Ana Mallare in Macalelon, their declaration that she is a Tagalog should receive a high
degree of credibility.[125] (Emphasis and underscoring supplied)
Indeed in Valles v. Commission on Elections,[126] the claim of citizenship was again
sufficiently supported by the evidence, viz:
Under both organic acts, all inhabitants of the Philippines who were Spanish subjects on
April 11, 1899 and resided therein including their children are deemed to be Philippine
citizens. Private respondent's father, Telesforo Ybasco, was born on January 5,
1879 in Daet, Camarines
Norte, a fact duly evidenced by a certifiedtrue copy of an entry in the Registry of
Births. Thus, under the Philippine Bill of 1902 and the Jones Law, Telesforo Ybasco
was deemed to be a Philippine citizen. By virtue of the same laws, which were the laws
in force at the time of her birth, Telesforo's daughter, herein private respondent Rosalind
Ybasco Lopez, is likewise a citizen of the Philippines. [127] (Emphasis and underscoring
supplied)
The same requirement was consistently adopted in other cases decided by this Court.
[128]

It thus clear that a claim of citizenship on the basis of the Treaty of Paris, the Philippine
Bill of 1902 and the Jones Law must be adequately supported by evidence and cannot
be sustained on mere assumption or supposition.

Citizenship of an Illegitimate Child.

It is in light of the foregoing laws and jurisprudence that I now proceed to examine the
arguments concerning Philippine citizenship of illegitimate children like FPJ who was
born on August 20, 1939, before his parents contracted marriage on September 16,
1940.

Petitioner Fornier argues, on the basis of this Courts rulings in United States v. Ong
Tianse,[129] Serra v. Republic,[130] Zamboanga Transportation Co. v. Lim,[131] Board of
Immigration v. Gallano,[132] and Paa v. Chan,[133] that an illegitimate child follows the
citizenship of his or her mother, and not that of the illegitimate father. Thus, he
concludes, even if the illegitimate childs father is a Filipino, paragraph (3) of Section 1,
Article IV of the 1935 Constitution would not operate to confer Philippine citizenship on
him or her.

In the cited case of United States v. Ong Tianse,[134] decided in 1915 before the
ratification of the 1935 Constitution, this Court held:
x x x In the present case, Ong Tianse alleges that he is a Filipino citizen because he
was born in the Philipines of a Filipino mother, with the circumstance that his Chinese
father was not legally married to his natural mother. Under these conditions the
appellant follows, in accordance with law, the status and nationality of his only
known parent, who is his mother, Barbara Dangculos, a Filipina. [135] (Emphasis
supplied)
The foregoing was known to and considered by the delegates to the 1934 Constitutional
Convention. Indeed, even after the ratification of the 1935 Constitution, commentators
were of the opinion that it was a well-settled rule in our jurisdiction that an illegitimate or
natural child follows the status and nationality of its mother, who is the only legally
recognized parent.[136]

Indeed, even former amicus curiae Constitutional Commissioner Fr. Joaquin G. Bernas,
S.J., once held the same view:
It is also a settled rule that the principle of jus sanguinis applies only to natural filiation
and not to filiation by adoption. Likewise, it is a settled rule that only legitimate
children follow the citizenship of the father and that illegitimate children are
under the parental authority of the mother and follow her nationality, not that of
the illegitimate father. This rule, based on parental authority, remains unchanged
by the 1973 Constitution.[137](Emphasis supplied; italics in the original)
FPJ, on the other hand, argues that a plain reading of the Constitutional provision does
not reveal any distinction in its application with respect to legitimate or illegitimate
children. This view is shared by amici curiae Justice Mendoza, Fr. Bernas, and former
University of the Philippines College of Law Dean Merlin M. Magallona.

In his Position Paper, Justice Mendoza opines:

On the basis of Art. IV, Sec. 1(3) of the 1935 Constitution (Those whose fathers are
citizens of the Philippines), as interpreted by this Court, the rule may be summarized as
follows:
1. A child follows the citizenship of his Filipino father if he is legitimate. If he is not a
legitimate child but a natural one, he may be legitimated by the subsequent marriage
of his parents provided he is acknowledged by them either before or after the
marriage.

2. A child born out of wedlock of an alien father and a Filipino mother follows the
citizenship of his mother as the only legally recognized parent.
Thus, the cases interpreting Art. IV, Sec. 1(3) do not exclude illegitimate children of
Filipino fathers from this class of citizens of the Philippines. They do not say
that only legitimate children or natural children, who are legitimated as a result of the
subsequent marriage of their parents and their acknowledgement before or after the
marriage, belong to this class of citizens of the Philippines (Those whose fathers are
citizens of the Philippines). Nor, on the other hand, by holding that illegitimate children
follow the citizenship of their Filipino mothers as the only legally recognized parents,
do the cases excludes instances in which an illegitimate child may have been
acknowledged by his Filipino father.

These cases (United States v. Ong Tianse, supra; Serra v. Republic, supra; Santos Co
v. Government of the Philippine Islands, 52 Phil. 543 (1928); Ratunil Sy Quimsuan v.
Republic, 92 Phil. 675 (1953), holding that illegitimate children follow the citizenship of
their Filipino mothers, involve situations in which the fathers are not Filipinos and the
discernible effort of the Court is to trace a blood relation in order to give the illegitimate
child Philippine citizenship. This blood relationship is easily established in the case of
the mother as the only legally recognized parent of the child. But it would stand the
principle on its head to say that the illegitimate child cannot follow the citizenship of the
father if it happens and that he is the citizen of the Philippines, while the mother is the
alien. Indeed to hold that an illegitimate child follows the citizenship of his Filipino
mother but that an illegitimate child does not follow the citizenship of his Filipino father
would be to make an invidious discrimination. To be sure this Court has not ruled thus.
To this Fr. Bernas, adds:
I now come to the question whether jus sanguinis applies to illegitimate children. We
have many decisions which say that jus sanguinis applies to the illegitimate children of
Filipino mothers because the mother is the only known or acknowledged parent. But
does the law make a distinction and say that jus sanguinis does not apply to the
illegitimate children of Filipino fathers even if paternity is clearly established?

No law or constitutional provision supports this distinction. On the contrary, the

Constitution clearly says without distinction that among those who are citizens of the
Philippines are those whose father[s are] Filipino citizen[s]. Hence, what is needed for
the application of jus sanguinis according to the clear letter of the law is not legitimacy
of the child but proof of paternity.

Having said that, however, we must contend with four cases promulgated by the
Supreme Court which contain the statement that illegitimate children do not follow the
Filipino citizenship of the father. These cases are: Morano v. Vivo, 20 SCRA 562 (1967),
which in turns cites Chiongbian v. De Leon, 46 O.G. 3652 and Serra v. Republic, L-
4223, May 12, 1952, and finally Paa v. Chan, 21 SCRA (1967).
 xxx

I submit that the petitioners in this case as well as three Comelec Commissioners,
including the two controversial new ones, and even the Solicitor General himself
supported by sixteen Solicitors, Associate and Assistant Solicitors, have merely
repeated, without any semblance of analysis, the obiter dicta in these four cases. It is I
believe an unfortunate lapse in government legal scholarship.

The clear conclusion from all these four cases is that their statements to the effect
that jus sanguinis applies only to legitimate children were all obiter dicta which decided
nothing. The Court had purported to offer a solution to a non-existent problem. Obiter
dicta do not establish constitutional doctrine even if repeated endlessly. Obiter dictaare
not decisions, and non-decisions do not constitute stare decisis. They therefore cannot
be used to resolve constitutional issues today.
For his part, Dean Magallona states:
The transmissive essence of citizenship here is clearly the core principle of blood
relationship or jus sanguinis. On this account, the derivation of citizenship from a person
or the transmission of citizenship to his child, springs from the fact that he is the father.
Thus, paternity as manifestation of blood relationship is all that is needed to be
established. To introduce a distinction between legitimacy or illegitimacy in the status of
a child vis-a-vis the derivation of his citizenship from the father defeats the transmissive
essence of citizenship in blood relationship. The text of the law which reads Those
whose fathers are citizens of the Philippines becomes an embodiment of the kernel
principle of blood relationship, which provides no room for the notion of citizenship by
legitimacy or legitimation.
I am aware that under Roman Law, from which the concept of jus sanguinis originated,
a child born out of the pale of lawful marriage always followed the condition of his or her
mother.[138] However, it cannot be denied that the concept of jus sanguinis as well as the
rights of an illegitimate child have progressed considerably in the three millennia since
the inception of Roman Law. Thus, I am open to a closer examination of the
pronouncement that an illegitimate follows the status and nationality of its mother, who
is the only legally recognized parent.

In Zamboanga Transportation Co. v. Lim,[139] this Court affirmed an Order by the Public
Service Commission to the effect that an illegitimate child born to a Filipino mother
during the effectivity of the 1935 Constitution did not have to elect Philippine citizenship
upon reaching majority,[140] thereby implying that paragraph (4) of Section 1, Article IV of
the 1935 Constitution did not apply to illegitimate children. However, said decision
precisely had the effect of recognizing the citizenship of the illegitimate child on the
basis of his blood relationship to his Filipino mother. It cannot reasonably be inferred,
however, from this pronouncement that paragraph (3) of Section 1, Article IV of the 1935
Constitution should be construed as preventing an illegitimate child from deriving
Philippine citizenship from his Filipino father.

I am likewise aware that in Morano v. Vivo,[141] Chiongbian v. de Leon[142] and Ching

Leng v. Galang[143] it declared that a legitimate minor child follows the citizenship of his
or her father. However, as observed by Justice Mendoza, these pronouncements did
not say that only legitimate children will follow the citizenship of one or the other parent,
who is a Filipino.[144]

As regards this Courts statement in United States v. Ong Tianse[145] that a child born out
of wedlock to a foreign father and a Filipino mother is presumed prima-facie to be a
citizen of this country for, as under the law, he follows the status and nationality of his
only legally recognized parent his mother, a Filipina, Justice Mendoza comments that
such pronouncement is based on the fact that a childs blood relationship to his mother
is easily determined at birth. However, so Justice Mendoza asserts, the pronouncement
does not entirely foreclose the possibility that the illegitimate child may derive his
fathers citizenship should such blood relationship be proved.

After due consideration of the arguments presented by the parties and amici curiae, I
agree with the view of FPJ and the amici curiae that indeed a textual examination of the
relevant provisions of the Constitution shows the same do not distinguish between
legitimate or illegitimate children. As priorly observed, the Philippines has adopted the
principle of jus sanguinis, or blood relationship, as the rule in determining citizenship.
Consequently, the civil law status of legitimacy or illegitimacy, by itself, is not
determinative of Philippine citizenship.

This view is reinforced by an examination of the record of the proceedings of the 1934
Constitutional Convention, particularly the session of November 26, 1934 when the
provisions on citizenship were taken up by the plenary. The proceedings of the
Constitutional Convention reveals that the delegates were acutely aware of the possible
problems with respect to illegitimate children and foundlings that could arise from the
adoption of jus sanguinis as the exclusive source of Philippine citizenship.
Nevertheless, the consensus of the Convention delegates was apparently that such
cases were too few to warrant the inclusion of a specific provision in the Constitution,
and should be governed by statutory legislation, the principles of international law, and
the decisions of this Court.[146]

In sum, finding no cogent reason to, in the language of Dean Magallona, defeat the
transmissive essence of citizenship in blood relationship between fathers and their
children, legitimate or illegitimate, I find that illegitimate children may follow the
citizenship of their fathers under the principle of jus sanguinis.

In the determination of the citizenship of the illegitimate child, his status as such
becomes material only in case his mother is an alien and he desires to claim Philippine
citizenship through his putative Filipino father.

Relevance of Legitimacy/Illegitimacy at
Birth/Clarification of Doctrine in Ong
Tianse.

Does my foregoing statement render completely irrelevant the pronouncements,

whether doctrine or dicta, inUnited States v. Ong Tianse[147] and the other cases cited by
petitioner Fornier? FPJ and the amici curiae would argue in the affirmative.

On considered reflection, however, I find in the negative.

The rationale for the rule that the citizenship of an illegitimate child follows that of his or
her mother appears to be two-fold: first, as an illegitimate child, he or she does not have
an identifiable father and, unless he is identified, considered nullus filius or the child of
no one; second, because the father is unknown, an unacknowledged illegitimate child
acquires no rights with respect to his father. Both reasons appear to possess some
practical value.

Undoubtedly, citizenship is a political right which flows not from legitimacy but from
paternity. But, while it is impossible to argue with the statement of Fr. Bernas that
paternity begins when the ovum is fertilized nine months before birth and not upon
marriage or legitimation, the practical fact of the matter is that, at the point of
conception and perhaps even until and beyond the point of birth, the identity of the
father remains a secret known only to God and hidden from men the childs father
included.

Put differently, the recognition that an illegitimate child may derive citizenship from his
Filipino father does not resolve all issues as to his citizenship. All the amici curiae agree
that an essential prerequisite is that the identity of the illegitimate childs father should
be firmly established he should be legally known.

Human biology is such that, as a scientific fact, the identity of the mother is immediately
known at birth, but that of the father is not. To manage this uncertainty as well as
preserve, protect and promote the family as a social institution, [148] the law steps in and
creates certain strong presumptions as to paternity.

With respect to filiation to his or her father, a child born within the marriage of his or her
parents differs from one born out of wedlock. For a child born within the marriage of his
parents, the law creates a strong presumption as to the paternity of his mothers
husband.[149] Correspondingly, the law makes it difficult to impugn the presumption that
he is the child of his father.[150]

The law makes no such presumptions with respect to the paternity of an

illegitimate child, however.[151]

As noted by the amici curiae, the rights accorded to illegitimate children have steadily
progressed through time. Since the Roman Law to the present legal framework of the
Family Code, a trend towards affording the nullius filiuswith more rights is readily
apparent. Thus, the law does allow a father to establish his paternity with respect to his
illegitimate child and, correspondingly, it also allows the illegitimate child to prove his
filiation to his father. Given this, the principle enunciated in United States v. Ong
Tianse[151] may be correctly understood to be that an illegitimate child follows the
nationality of his legally recognized parent or parents.

For purposes of establishing citizenship, how then may he or she legally establish his or
her filial relationship to his or her father? In the absence of more specific legislation, the
provisions of civil law, as suggested by amicus curiae Prof. Ruben F. Balane, with
respect to filiation may provide some guidance.
Under the Family Code, an illegitimate child may establish his or her filiation in the same
manner as a legitimate child.[153] Article 172 of the Family Code thus provides:
Art. 172. The filiation of legitimate children is established by any of the following:

(1) The record of birth appearing in the civil register or a final judgment; or
(2) An admission of legitimate filiation in a public document or a private handwritten
instrument and signed by the parent concerned.

In the absence of the foregoing evidence, the legitimate filiation shall be proved by:

(1) The open and continuous possession of the status of a legitimate child; or
(2) Any other means allowed by the Rules of Court and special laws.

May an illegitimate child use the foregoing methods to prove his filiation for purposes of
establishing not only his civil law status as the child of his father, but also to derive the
political status of citizenship from his father? In evaluating this proposition, I am guided
by the knowledge that citizenship confers a broader spectrum of rights and privileges
between the individual and the State than between a child and the other members of his
family.

With respect to voluntary

acknowledgment, specially if made prior to any controversy concerning citizenship, the
same may be considered sufficient to prove filiation for purposes of establishing
citizenship on the assumption that a man would not lightly assume the solemn
responsibilities of fatherhood if he were not certain of his paternity.

With respect to compulsory acknowledgment through a judicial proceeding, the same

may be considered ideal as it would provide an opportunity for all parties to furnish all
the evidence relevant to the issue of paternity. Moreover, it would give the State the
opportunity to intervene and satisfy itself as to the jus sanguinis of the parties and
ensure the enforcement of the States strict policies on immigration. In this regard, the
observation of this Court inTijing v. Court of Appeals[154] with respect to DNA evidence is
significant:
A final note. Parentage will still be resolved using conventional methods unless we
adopt the modern and scientific ways available. Fortunately, we have now the
facility and expertise in using DNA test for identification and parentage
testing. The University of the Philippines Natural Science Research Institute (UP-NSRI)
DNA Analysis Laboratory has now the capability to conduct DNA typing using short
tandem repeat (STR) analysis. The analysis is based on the fact that the DNA of a
child/person has two (2) copies, one copy from the mother and the other from the father.
The DNA from the mother, the alleged father and child are analyzed to establish
parentage. Of course, being a novel scientific technique, the use of DNA test as
evidence is still open to challenge. Eventually, as the appropriate case comes, courts
should not hesitate to rule on the admissibility of DNA evidence. For it was said, that
courts should apply the results of science when competently obtained in aid of
situations presented, since to reject said result is to deny progress. Though it is
not necessary in this case to resort to DNA testing, in future it would be useful to
all concerned in the prompt resolution of parentage and identity
issues. (Emphasis supplied)[155]
With respect to the open and continuous possession of the status of a legitimate child,
the same may prove less weighty considering that a child is accorded the status of a
legitimate child for reasons other than blood relationship. The statements of this Court
in Morano v. Vivo,[156] and Ching Leng v. Galang[157] to the effect that blood relationship,
and not merely parental authority, is required for a child to derive Philippine citizenship
from his father may be considered persuasive.

Natural-born citizenship

Indeed, I note that in the context of the present case, the strictest proof of filiation is
required since what must be determined is not merely citizenship but natural-
born citizenship.

The concept of natural-born citizen was a concept adopted in the 1935 Constitution as
a qualification for the offices of President and Vice-President, [158] Senator,[159] as well as
Member of the House of Representatives. [160]

The 1935 Constitution did not itself define who is a natural-born citizen, but the concept
was elucidated in the discussion between Delegates Artadi and Roxas during the
deliberations of the 1934 Constitutional Convention, [161] wherein Delegate Roxas
explained that a natural-born citizen is one who is a citizen by reason of his birth and
not by naturalization or by any subsequent statement required by the law for his
citizenship.[162]
The requirement was considered a reflection of the nationalistic spirit of the Framers of
the Constitution.[163]According to Delegate Aruego, It was felt that, by virtue of the key
positions of the President and the Vice-President in the Philippine Government, every
precaution should be taken to insure the fact the persons elected, instead of being or
developing to be mere instruments of foreign governments or foreign groups, would be
loyal to the country and to its people.[164]

The 1973 Constitution explicitly incorporated the definition of natural-born citizen into
the text,[165] as does the present 1987 Constitution:
Sec. 2. Natural-born citizens are those who are citizens of the Philippines from birth
without having to perform any act to acquire or perfect their Philippine citizenship.
Those who elect Philippine citizenship in accordance with paragraph (3), Section 1
hereof shall be deemed natural-born citizens.
The second paragraph of the foregoing provision was intended to equalize the status of
those born of Filipina parents before the effectivity of the 1973 Constitution on January
17, 1973 with that of those born after that date. Hence, by express Constitutional fiat,
legitimate children of Filipino mothers born before the 1973 Constitution who elect
Philippine citizenship within a reasonable time after reaching their majority age are
deemed natural-born citizens even though they had to perform an act to perfect their
Philippine citizenship.

It may be noted that, with the singular exception of those covered by the second
sentence of Section 2, as discussed above, the essential features of natural-born
citizenship is that it is (1) established at birth, and (2) involuntary in character that is,
a natural-born citizen has no choice in his being a Filipino.

That more high ranking public officials are required to be natural-born Philippine citizens
under the present 1987 Constitution than in previous Constitutions may be interpreted
to be further measures taken by the Constitutional Commissioners to ensure that the
nationalist provisions of the Constitution, political, social and economic, are carried out
by men and women who are of unquestionable loyalty to the Philippines, whether in war
or in peace. It may be further remarked that this expansion of the requirement of
natural-born citizenship to other high public offices may prove prophetic in the context of
the increasing importance of global trade and the intensity of global economic
competition.
The special importance of the status of a natural-born citizen was eloquently stressed
by Associate Justice Sandoval-Gutierez in her dissenting opinion in the recent case
of Bengzon III v. House of Representatives Electoral Tribunal,[166] where the question of
whether a natural-born citizen who had emigrated to a foreign country could
subsequently re-acquire his natural-born status by repatriation:
For sure, the framers of our Constitution intended to provide a more stringent
citizenship requirement for higher elective offices, including that of the office of a
Congressman. Otherwise, the Constitution should have simply provided that a
candidate for such position can be merely a citizen of the Philippines, as required
of local elective officers.

The spirit of nationalism pervading the 1935 Constitution, the first charter framed
and ratified by the Filipinos(even as the draft had to be approved by President
Franklin Delano Roosevelt of the United States) guides and governs the
interpretation of Philippine citizenship and the more narrow and bounded
concept of being a natural-born citizen.

Under the 1935 Constitution, the requirement of natural-born citizenship was applicable
only to the President and Vice President. A person who had been a citizen for only five
(5) years could be elected to the National Assembly. Only in 1940, when the first
Constitution was amended did natural-born citizenship become a requirement for
Senators and Members of the House of Representatives. A Filipino naturalized for at
least five (5) years could still be appointed Justice of the Supreme Court or a Judge of a
lower court.

The history of the Constitution shows that the meaning and application of the
requirement of being natural-born have become more narrow and qualified over
the years.

Under the 1973 Constitution, the President, members of the National Assembly, Prime
Minister, Justices of the Supreme Court, Judges of inferior courts, the chairmen and
members of the Constitutional Commissions and the majority of members of the
cabinet, must be natural-born citizens. The 1987 Constitution added the Ombudsman
and his deputies and the members of the Commission on Human Rights to those who
must be natural-born citizens.
The questioned Decision of respondent HRET reverses the historical trend and clear
intendment of the Constitution. It shows a more liberal, if not a cavalier approach to the
meaning and import of natural-born citizen and citizenship in general.

It bears stressing that we are tracing and enforcing a doctrine embodied in no

less than the Constitution.Indeed, a deviation from the clear and constitutional
definition of a "natural-born Filipino citizen" is a matter which can only be accomplished
through a constitutional amendment. Clearly, respondent HRET gravely abused its
discretion.[167] (Emphasis supplied; italics in the original)
Considering the special status and privileges of a natural-born citizen, how should be
determine whether a child born out of wedlock to an alien mother is indeed a natural-
born Filipino citizen?

Justice Mendoza offers a possible solution in his Position Paper:

Finally, the question is whether respondent FPJ is a natural born citizen. The definition
of who is a natural born citizen of the Philippines in the 1973 and in the 1987 document
follows the general idea that a person be a citizen at birth. This notion applies whether
citizenship in a nation is based on the principle of jus sanguinis (blood relationship) or
the principle of jus soli (place of birth). The notion was articulated in the American case
of United State[s] v. Wong Kim Ark, 769 U.S. 649, 18 S. Ct. 456, 42 L. Ed. 890 (1848)
and considered by the Constitutional Convention of 1934. (See the discussion between
delegates Roxas and Artadi (See 5 Proceedings of the 1934-1935 Constitutional
Convention 306-309 (Salvador H. Laurel, ed. 1966)). Consequently, if it can be
shown that his acknowledgment by his supposed father was made upon his birth,
then respondent FPJ is a natural born citizen of the Philippines within the
meaning of Art. IV Sec. 2 of the 1987 Constitution.

xxx
6. If an illegitimate
childs filiation to his supposed father and his acknowledgment by the latter ar
e made atthe moment of the childs birth and these matter are duly proven,
then he is a natural born citizen of the Philippines. (Emphasis and underscoring
supplied; italics in the original)
The suggestion of Justice Mendoza that an illegitimate child of a foreigner-mother who
claims to be the son or daughter of a Filipino father may be considered a natural-born
citizen if he was duly acknowledged by the latter at birth, in so far as it requires that
citizenship be established at birth and preserves the involuntary character of natural-
born citizenship, is well taken.

Citizenship of FPJ

The determination of FPJs citizenship, which is the pivotal issue in the Petition for
Disqualification, thus hinges on the application of the foregoing laws and jurisprudence
to the facts of the present case.

But what precisely are the facts to which the law should be applied? As aforementioned,
the COMELEC, in grave abuse of its discretion, limited itself to the entries in respondent
Poes certificate of candidacy without determining the veracity of these entries on the
basis of the evidence adduced by the parties.

The rules governing the Petition for Disqualification were laid out by the COMELEC in
its Resolution 6452,[168]promulgated on December 10, 2003. By said Resolution, the
COMELEC, in the interest of justice and speedy disposition, suspended its Rules of
procedure as may be inconsistent therewith; [169] designated the Clerk of the Commission
to receive petitions pertaining to candidates for President; [170] and specified the
procedure for presentation of evidence in Petitions to Deny Due Course or to Cancel
Certificates of Candidacy,[171] and Petitions to Disqualify a Candidate Pursuant to Sec.
68 of the Omnibus Election Code and Petitions to Disqualify for Lack of Qualifications or
Possessing Same Grounds for Disqualification. [172]

Pursuant to said COMELEC Resolution 6452, petitioner Fornier presented the following
documentary evidence in the Petition for Disqualification:
(1) A certified copy of FPJs Birth Certificate, certified by V. C. Feliciano, Registration
Officer IV of the City Civil Registry Office of Manila, indicating that FPJ was born on
August 20, 1939, and that his parents are Bessie Kelley, an American citizen, and
Allan F. Poe, allegedly a Filipino citizen. (petitioners Exhibit A).

(2) A certified photocopy of an Affidavit executed on July 13, 1939 by Paulita Poe y
Gomez in Spanish, certified by Ricardo L. Manapat of the Records Management
and Archives Office, attesting to the fact that she filed a case of bigamy and
concubinage against respondents father, Allan F. Poe, after discovering the latters
bigamous relationship with respondents mother, Bessie Kelley. (petitioners Exhibit
B and B-1)
(3) A certified photocopy of the Marriage Contract entered into on July 5, 1936 by and
between respondents father, Allan Fernando Poe and Paulita Gomez, certified by
Ricardo L. Manapat of the Records Management and Archives Office, showing that
respondents father is Espaol; and that his parents, Lorenzo Poe and Marta
Reyes, were Espaol and Mestiza Espaola, respectively. (petitioners Exhibit
B-2)

(4) An English translation of the Affidavit dated July 13, 1939 executed by Paulita Poe
y Gomez. (petitioners Exhibit B-3)

(5) A certified photocopy of the Birth Certificate of Allan Fernando Poe, certified by
Ricardo L. Manapat of the Records Management and Archive Office, showing that
he was born on May 17, 1915, and that his father, Lorenzo Poe, is Espaol and
his mother, Marta Reyes, is Mestiza Espaola. (petitioners Exhibit C)

(6) A Certification dated 16 January 2004 issued by Ricardo L. Manapat, Director of

the Records Management and Archives Office, certifying that the National Archives
does not possess any record of a certain Lorenzo Poe or Lorenzo Pou residing or
entering the Philippines before 1907. (petitioners Exhibit D)

(7) A Certification dated 12 January 2004 issued by Estrella M. Domingo, OIC of the
Archives Division of the National Archives, certifying that there is no available
information in the files of the National Archives, regarding the birth of Allan R.
Pou, alleged to have been born on November 27, 1916. (petitioners Exhibit E)
FPJ, for his part, offered the following as evidence in the Petition for Disqualification:
(1) A Certification dated January 12, 2004, issued by Estrella M. Domingo, OIC of the
Archives Division of the National Archives, certifying, among others, that there is no
available information regarding the birth of Allan R. Pou in the Register of Births for
San Carlos, Pangasinan, in the files of said Office. (respondents Exhibit 1)

(2) A Certification dated January 13, 2004, issued by Estrella M. Domingo, OIC of the
Archives Division of the National Archives, certifying, among others, that there is no
available information about the marriage of Allan Fernando Poe and Paulita Gomez
alleged to have been married on 18 July 1936 in Manila. (respondents Exhibit 2)

(3) A certified copy of the Birth Certificate of Ronald Allan Poe, certified by Gloria C.
Pagdilao of the City Civil Registrar of Manila. (respondents Exhibit 3)

(4) A certified photocopy of Opinion No. 49, Series of 1995 rendered by Acting
Secretary Demetrio G. Demetria on May 3, 1995, certified by Monalisa T. Esguerra,
Chief of the Records Section, Department of Justice. (respondents Exhibit 4)

(5) A Certification dated January 12, 2004 issued by Zenaida A. Peralta of the City
Civil Registrar of San Carlos City, Pangasinan, certifying, among others, that as
appearing from the Register of Death, Lorenzo Pou died on 11 September 1954 in
San Carlos, Pangasinan. (respondents Exhibit 5)
(6) A copy of Original Certificate of Title No. P-2247 of the Registry of Deeds for the
Province of Pangasinan in the name of Lorenzo Pou, certified by the Registrar of
Deeds/Deputy Registrar of Deeds of San Carlos City, Pangasinan on January 12,
2004 as a certified true copy, the original of which is on file in said Registry of
Deeds. (respondents Exhibit 6)

(7) Copies of Tax Declaration Nos. 20644, 20643, 23477 in the name of Lorenzo Pou,
certified as true copies from the office file by Irene M. De Vera, In-charge of the
Records Division, and of Tax Declaration No. 23478 in the name of Lorenzo Pou,
certified as true copy from the original by Irene M. De Vera, In-charge of the
Records Division (respondents Exhibit 6-A to 6-D)

(8) Certified copy of the Certificate of Death of Fernando R. Poe, certified by Gloria C.
Pagdilao of the City Civil Registrar of Manila, stating, among others, that he died
on October 23, 1951. (respondents Exhibit 7)

(9) A Certification dated January 13, 2004 issued by Lt. Colonel Narciso S. Erna,
Assistant Adjutant General of the Armed Forces of the Philippines, showing certain
available data regarding Fernando Reyes Poe. (respondents Exhibit 8)

(10) Certified copy of an alleged Affidavit for Army Personnel executed by Fernando R.
Poe on December 22, 1947, certified by Lt. Colonel Narciso S. Erna, Assistant
Adjutant General of the Armed Forces of the Philippines. (respondents Exhibit 8-
A)

(11) Purported copy of General Order No. 175 allegedly issued by Army Headquarters
APO 501 conferring Award of Gold Cross to Fernando Poe. (respondents Exhibit
9)

(12) A copy of Memorandum dated January 27, 1951 purportedly issued by S.H.
Concepcion of the Office of the Adjutant General, Armed Forces of the Philippines
addressed to Lt. Col Conrado Rigor, the latter being the officer tasked by the
Armed Forces of the Philippines to present the Gold Cross Medal to the family of
the late Captain Fernando Poe. (respondents Exhibit 10)

(13) A certified photocopy of the Certificate of Birth of Elizabeth Ann Poe, sister of
respondent Poe. (respondents Exhibit 11)

(14) A certified photocopy of the Certificate of Birth of Fernando Poe II, of the City Civil
Registrar of Manila. (respondents Exhibit 12)

(15) Certified photocopy of the original Certificate of Birth of Martha Genevieve Poe,
sister of respondent, issued and certified by Gloria C. Pagdilao of the City Civil
Registrar of Manila, showing that her nationality is American. (respondents
Exhibit 13)

(16) Certified photocopy of the original Certificate of Birth of Baby Poe, brother of
respondent, issued and certified by Gloria C. Pagdilao of the City Civil Registrar of
 Manila. (respondents Exhibit 14)

(17) Certified photocopy of the original Certificate of Birth of Evangeline K. Poe,

respondents sister, issued and certified by Gloria C. Pagdilao of the City Civil
Registrar of Manila. (respondents Exhibit 15)

(18) Copy of Passport No. ll491191 issued on June 25, 2003 in the name of respondent
Poe. (respondents Exhibit 16)

(19) A photocopy of Transfer Certificate of Title No. 55020 of the Registry of Deeds for
Rizal in the name of spouses Jesusa Poe and Ronald Allan Poe. (respondents
Exhibit 17)

(20) A photocopy of Transfer Certificate of Title No. RT-116312 of the Registry of Deeds
for Quezon City in the name of Ronald Allan Poe. (respondents Exhibit 18)

(21) A photocopy of Transfer Certificate of Title No. 300533 of the Registry of Deeds for
Quezon City in the name of spouses Ronald Allan Poe and Jesusa Sonora.
(respondents Exhibit 19)

(22) A Declaration of Ruby Kelly Mangahas, sister of the late Bessie Kelly, executed on
January 12, 2004 in Stockton, California, U.S.A. notarized before Dorothy Marie
Scheflo of San Joaquin County, California, U.S.A., attesting that her nephew,
Ronald Allan Poe, is a natural born Filipino and is the legitimate child of Fernando
Poe Jr. (respondents Exhibit 20)

(23) A certified photocopy of the Marriage Contract entered into by and between
respondents father, Fernando Pou and respondents mother Bessie Kelly on
September 16, 1940, certified by Florendo G. Suba, Administrative Officer II of the
Civil Registrar of Manila. (respondents Exhibit 21)

(24) A Certification issued by the Office of the City Civil Registrar of San Carlos City,
Pangasinan, certifying, among others, that the records of birth of said office during
the period 1900 to May 1946, were totally destroyed during the last World War II.
(respondents Exhibit 22)
Each of the foregoing must be carefully considered and evaluated, both individually and
in comparison with the others, as to admissibility, relevance, and evidentiary weight in
order that a firm factual footing for this case may be established.

A review of the arguments presented by the parties during the oral arguments and a
preliminary examination of the foregoing documents leads to the following initial
observations:

Some of the documents presented by petitioner Fornier [173] as well as those offered by
FPJ[174] appear to be documents consisting of entries in public records. As such, they
are prima facie evidence of the facts stated therein.[175] However, several of these
documents conflict with one another in material points.

Some of FPJs documentary submissions[176] appear to be transfer certificates of title to

real properties acquired by him jointly with his wife, Jesusa Sonora. Considering that the
exercise of rights exclusive to Filipinos has been held not to be conclusive proof that he
is a Filipino citizen,[177] these do not appear to be relevant to the issue of citizenship.

Several Certifications[178] submitted by the parties may be admissible evidence that the
records of the custodians office do not contain a certain record or entry,[179] but do not
necessarily prove the said record or entry does or did not ever exist or that the
purported contents thereof are either true or false.

On further examination, the evidence submitted by the parties, taken together, do not
form a coherent and consistent whole. Indeed, even considered apart from the
documents submitted by petitioner Fornier, the documents offered by FPJ are in conflict
with each other.

Thus, for example, FPJs birth certificate refers to his putative father as Allan F. Poe,
while the name in the space for the father in the birth certificates of his putative
siblings uniformly appears as Fernando Poe. Similarly, what he claims to be his fathers
death certificate is also in the name of Fernando R. Poe. While that appearing under
husband in the alleged Marriage Contract of his putative parents is Fernando R. Pou.

As a further example, FPJs birth certificate indicates that his parents were married, and
that he is a legitimate child. However, the Marriage Contract of his putative parents,
Fernando R. Pou and Bessie Kelley, is dated September 16, 1940; thus, seemingly
indicating that FPJ was born out of wedlock.

The difficulty in appreciating and weighing the foregoing pieces of evidence was further
compounded during the oral arguments of the present case when, after the Chief
Justice suggested that the parties enter into a stipulation of facts in order to abbreviate
the proceedings, counsel for FPJ Atty. Estelito Mendoza disclaimed any knowledge as
to the truth of the entries in FPJs Birth Certificate as well as the Marriage Contract of
Allan F. Poe and Bessie Kelley:
CHIEF I think we can avoid all these disputations on these fact[s], if the parties
JUSTICE: will only agree on stipulation of facts on very, very simple questions.
Cannot the parties for instance agree for the record that private
respondent Fernando Poe, Jr. was born on 20 August 1939 in Manila,
Philippines? Second, that his parents were Allan Poe and Bessie
Kelley? Third[,] that Bessie Kelly was an American citizen before and at
the time she gave birth to Fernando Poe Jr. and that Allan Poe and
Bessie Kelly subsequently contracted marriage. They were married on
16 September 1940. If you can agree on that there seems to be no
disputation at all on the details and so on. And if there is no agreement on
the entries in both the record of birth and the marriage contract and then that
would call for a presentation of evidence, and this Court is not a trier of facts.

ATTY. We are willing to agree, Your Honor.

FORNIER
:

CHIEF Justice Quisumbing.

JUSTICE

JUSTICE A few questions, Mr. Counsel.

QUISUM
BING:

CHIEF Yes, would Atty. Mendoza agree to these facts? So, we could terminate
JUSTICE: faster this oral argument. So, I will ask first Atty. Fornier. Do you agree
that private respondent Fernando Poe Jr. was born on 20 August 1939
in Manila, Philippines?

ATTY. Yes, Your Honor.

[FORNIE
R]:

CHIEF Atty. Mendoza, do you agree to that?

JUSTICE:

ATTY. Your Honors please, I can only stipulate [that] is what the birth
MENDOZ certificate says.
A:

CHIEF But is that a fact?

JUSTICE:

ATTY. Your Honors, please I can only agree that that is what the birth certificate
MENDOZ says.
A:

CHIEF But is that a fact?

JUSTICE:

ATTY. No, I cannot agree, Your Honor, please.

MENDOZ
A:

CHIEF In other words, (interrupted)

JUSTICE:

ATTY. I have no personal knowledge on that and I cannot confirm it. Both the
MENDOZ father and mother are already deceased. There is no one from whom I
A: can confirm those as facts. I regret very much Your Honor that I cannot
agree to those as facts. All that I know [is] that the birth certificate stated
that and that the petitioner marked that as evidence twice and he presented
that as his own evidence and he must be bound by everything that he has
stated in the certificate of voters. For example, Your Honor, that Bessie Kelly
states that she is an American, but she is also a Filipino, because she was
born in the Philippines. So, this is something which requires evidence. Based
on all the extant records in the case he was (interrupted)

CHIEF Yes, before you go into that (interrupted)

JUSTICE:

ATTY. That is why if Your Honor please which I regret very much (interrupted)
MENDOZ
A:

CHIEF Do you admit that the documents mentioned by Atty. Fornier, that is the birth
JUSTICE: certificate and the marriage contract were furnished by you or by the
respondent here?

ATTY. I have my turn but Ill have to explain (interrupted)

MENDOZ
A:

CHIEF We try to shorten the proceedings, but it would appear that you are not
JUSTICE: agreeable to these facts even if this would come from documents presented
by you?

ATTY. No, no, Your Honor please. May I clarify?

MENDOZ
A:

CHIEF Yes.
JUSTICE:

ATTY. The birth certificate was presented by petitioner Fornier. It was marked as
MENDOZ Exhibit A and Exhibit B. Apart from that, if Your Honor please, it was Atty.
A: Fornier who subpoenaed the Civil Registrar of Manila to bring the original of
the birth certificate. And the birth certificate was brought to the COMELEC
and the certified copies that we used were confirmed as authentic. Now,
marriage contract was our evidence and since that was our evidence, I am
not conceding that for example, that Bessie Kelly was not necessarily Filipino.
The fact that her citizenship is stated in the birth certificate as American does
not necessarily preclude that she was also Filipino. Because as a matter of
fact I can also prove that is, from information, that Bessie Kellys mother was
a Filipina. Her name was Martha Gatbonton. She was from Candaba,
Pampanga. So, there are many facts, if Your Honor please, which I
cannot stipulate on
this. Because even my client Mr. Poe does not know this, hewas just a s
mall boy when his [father] died. So, I regret very much Your Honor
please I can go no further but to stipulate on certain documents. But on
whether those documents states the truth is something I cannot
stipulate on because I would have no basis.

CHIEF That seems to [be] very, very clear to the Court. You can stipulate on the
JUSTICE: authenticity of the document presented, the record of birth and the
marriage contract but as to the truth or falsity of the contents therein
you cannot stipulate? That would seem to be clear to us.

ATTY. Your Honor, at the stage of the proceeding this is already a petition to review
MENDOZ by certiorari a resolution of the COMELEC. And I do not think the Supreme
A: Court may review on the basis of Rule 65 petition proceeding before the
COMELEC and the basis of stipulation made by the parties before this Court.
This case is only before the Court on a petition for certiorari under Rule 65.
 So, I regret very much if Your Honors please, that at the stage of the
proceeding, I am unable to stipulate on many things.

CHIEF Thank you, We cannot force you. Anyway, Fornier himself admitted, rather
JUSTICE: tried to insinuate of certain false entries. So, I doubt very mush if these facts
could be considered as no longer disputed by the parties. We can now
proceed with interpolation of Atty. Fornier. The Court now recognizes Justice
Quisumbing. (Emphasis and underscoring supplied) [180]
Even Prof. Balane, upon a question by the Chief Justice, could not determine whether
the evidence submitted by the parties was sufficient to prove filiation under the
provisions of the Civil Code:
CHIE One or two questions Professor Balane. In light of your recommendations, and
F the possible conclusion regarding the political status of the private
JUS respondent here, especially on the matter of issue of legitimation and the
TICE effects thereof, according to the rules established by the New Civil
: Code,can you conclude from the facts adduced here admitted by the parties
orotherwise undisputed by the parties, to be sufficient to show that therehad
been legitimation in the case of private respondent?

PRO First of all Mr. Chief Justice, I would like to confess that I looked at the pleadings,
FES but I did not go very thoroughly [at] them because I did not have enough time.
SOR But my impression now is that [there is] still that requirement of recognition
BAL for legitimation I am not sure that the facts as we have them, now amount to
ANE: a recognition, even if we were to follow the rule laid down in Tongoy vs.
Court of Appeals that for legitimation, you do not even need voluntary
recognition, but just the continuous possession of a state of a natural child.
I am not sure that there is enough evidence to establish [that] at this stage.

CHIE So, in light of your observation that there is not enough evidence to reach that
F conclusion to sustain your view, would you recommend that this case be
JUS remanded to the COMELEC, for the COMELEC to receive the evidence in this
TICE regard?
:

PRO I would probably recommend Mr. Chief Justice, that evidence be presented,
FES to determine whether the requirements of recognition and therefore,
SOR legitimation are present.
BAL
ANE:

CHIE But definitely not before this Court because this Court is not a trier of facts but to
F the proper instrumentality, more specifically [in] this case[, to] the COMELEC
JUS because this case started with the COMELEC and the COMELEC has jurisdiction
TICE over the issue?
:

PRO If the COMELEC has the competence to pass upon these matters in not a
FES summary manner but in a thorough manner which I am not sure of. In fact, I have
SOR been grappling with that question Mr. Chief Justice, I am not an expert in
BAL procedural law.
ANE:

CHIE Since evidence would be necessary.

F
JUS
TICE
:

PRO Since evidence seems to be necessary in order to establish the fact of his
FES legitimation (interrupted)
SOR
BAL
ANE:

CHIE Whose burden would it be to prove these facts, would it be the burden of the
F petitioner or will it be the burden of the respondent?
JUS
TICE
:

PRO Well, generally, it is he who seeks to establish his status as a legitimatedchil

FES d, he will have the burden to prove it. It may not be difficult to prove, but I
SOR think he would have the burden. Frankly, honestly, I am not sure what the
BAL proper Tribunal is to which it should be referred.
ANE:

CHIE [In] other words, it [may] not even be the COMELEC but definitely it should not be
F the Supreme Court?
JUS
TICE
:

PRO Because that would make this Court a trier of facts, Mr. Chief Justice. [181]
FES (Emphasis supplied)
SOR
BAL
ANE:
Given this situation, it may have been prudent for this Court to have remanded or
referred this case to trier of facts in order that all available relevant evidence may be
presented and threshed out in the necessary evidentiary hearings. As it is, I am
constrained to scrutinize the records of this case to determine five crucial factual
questions, to wit:

(1) Whether Lorenzo Pou has been established to be a Filipino citizen at the
time of the birth of his son, Allan F. Poe;
(2) Whether Allan F. Poe, the putative father of FPJ was a Filipino at the time
of the birth of the latter;
(3) Whether FPJ is a legitimate or illegitimate child;
(4) Whether Allan F. Poe has been legally determined to be the father of FPJ;
(5) Whether FPJ is a natural-born Filipino Citizen.

Citizenship of Lorenzo Pou

In his Answer in the Petition for Disqualification, FPJ claimed to have derived Philippine
citizenship from his father, Allan F. Poe, who in turn derived from his father (FPJs
grandfather) Lorenzo Pou:
Respondent is a citizen of the Republic of the Philippines because his father, Allan
Fernando Poe, was a citizen of the Philippines. Upon the other hand, Allan Fernando
Poe, was a citizen of the Philippines, because Lorenzo Pou, the father of Allan
Fernando Poe, or respondents grandfather, was a citizen of the Philippines.

xxx

Lorenzo Pou was born a Spanish subject. He was an inhabitant of the Philippine Islands
when on December 10, 1898, by virtue of the Treaty of Paris, Spain ceded the
Philippine Islands to the United States. [182]
In support of the foregoing, FPJ submitted a Certification from the Civil Registrar of San
Carlos City, Pangasinan which contains the following entries:
 Registry number : 681
Date of Registration : September 11, 1954
Name of deceased : LORENZO POU
Sex: : Male
Age : 84 yrs old
Civil Status : Married
Citizenship : Filipino
Date of death : September 11, 1954
Place of death : San Carlos, Pangasinan
Cause of death : Cerebral Hemorrhage,
Hypertensive, heart disease
FPJ also submitted Original Certificate of Title No. P-2247 of the Registry of Deeds of
the Province of Pangasinan in the name of Lorenzo Pou covering a Sales Patent dated
September 10, 1936.

Under prevailing jurisprudence, the foregoing submissions by the parties are insufficient
to prove that Lorenzo Pou became a citizen of the Philippine Islands by operation of the
Treaty of Paris, the Philippine Bill of 1902 and the Jones Law.

The above-mentioned entry in the Registry of Deaths is only prima facie evidence that
Lorenzo Pou died in Pangasinan on September 11, 1954. No presumption can be made
that he was a resident of Pangasinan before that date.

Similarly, Original Certificate of Title P-2247 of the Registry of Deeds of the Province of
Pangasinan is only prima facie evidence that Lorenzo Pou purchased a parcel of land in
Pangasinan on September 10, 1936. It is neither proof that Lorenzo Pou resided in
Pangasinan prior to that date nor proof that Lorenzo Pou was a citizen of the Philippine
Islands.

Following the cases of In re Mallari and Valles v. Commission on Elections,[183] the claim
that Lorenzo Pou was an inhabitant of the Philippine Islands when on December 10,
1898, by virtue of the Treaty of Paris, Spain ceded the Philippine Islands to the United
States must be supported by a record of birth evidencing his birth in the Philippine
Islands, testimonial evidence to that effect, or some other competent evidence of that
fact.

Moreover, the admission that Lorenzo Pou was a subject of Spain and not merely a
native of the Philippine Islands opens the possibility that he was a native of the Spanish
Peninsula. If such were the case, then he would have had to comply with the
requirements prescribed in In Re: Bosque,[184] to become a citizen of the Philippine
Islands. To reiterate, these requirements are: (1) he should have been a resident of the
Philippine Islands on April 11, 1899; (2) he should have maintained actual residence
therein for a period of 18 months or until October 11, 1900; (3) without their making an
express declaration of intention to retain his Spanish citizenship.

In sum, the evidence presented does not show that Lorenzo Pou acquired Philippine
citizenship by virtue of the Treaty of Paris or the Organic Acts covering the Philippine
Islands.

Citizenship of Allan F. Poe at the

time of the Birth of FPJ

In the proceedings in the COMELEC, petitioner Fornier presented a document

(Petitioners Exhibit C) purported to be the Birth Certificate of Allan F. Poe and
stamped:

CERTIFIED PHOTOCOPY:

(Sgd.)
RICARDO L. MANAPAT
RECORDS MANAGEMENT
AND ARCHIVES OFFICE

The entries in petitioner Forniers Exhibit C indicate that Allan F. Poe was a Spanish
citizen born to Lorenzo Pou, Espaol, and Marta Reyes, mestiza Espaola.

FPJ vehemently denied the authenticity and due execution of petitioner Forniers Exhibit
C, alleging that the same is a Manapat-fabricated document on the basis of the
testimony of certain personnel of the Records Management and Archives Office before
the Senate Committee on Constitutional Amendments, Revision of Codes and Laws.
Granting arguendo that the testimony of the witnesses in the Senate is competent proof
that may be appreciated both in the proceedings in the Petition for Disqualification as
well as in the present petition, this Court shall examine only the claim made by FPJ in
that Allan F. Poe acquired Philippine citizenship independently of the latters father,
Lorenzo Pou, by virtue of jus soli, Allan F. Poe having been allegedly born in the
Philippines on November 27, 1916.
Allan Fernando Poe was born in San Carlos, Pangasinan, on November 27, 1916. His
parents were Lorenzo Pou and Marta Reyes of Pangasinan. Allan Fernando Poe was
also known as Fernando Poe, Sr. He obtained the degree of Bachelor of Science in
Chemistry from the University of the Philippines in 1935 and the degree of Doctor of
Dental Medicine from the Philippine Dental College in 1942. He later became a leading
movie actor. He died on October 23, 1951. Like his father, Lorenzo Pou, he died, as his
Certificate of Death states, a Filipino.

Since Lorenzo Pou, the father of Allan Fernando Poe, was a citizen of the Philippine
Islands, his children, including Allan Fernando Poe, were citizens of the Philippines.

Moreover, because Allan Fernando Poe was born in 1916 in the Philippines, before the
1935 Constitution, he furthermore acquired citizenship of the Philippine Islands because
he was born in the Philippines independently of the citizenship of his parents. [185]
No evidence appears to have been submitted by FPJ in support of the foregoing
allegations. However, even assuming arguendo that Allan F. Poe was born in the
Philippines on November 27, 1916, such fact, per se, would not suffice to prove that he
was a citizen of the Philippine Islands absent a showing that he was judicially declared
to be a Filipino citizen.

In Tan Chong v. Secretary of Labor,[186] this Court ruled that the principle jus soli or
acquisition of citizenship by place of birth was never extended or applied in the
Philippine Islands:
It appears that the petitioner in the first case was born in San Pablo, Laguna, in July
1915, of a Chinese father and a Filipino mother, lawfully married, left for China in 1925,
and returned to the Philippines on 25 January 1940. The applicant in the second case
was born in Jolo, Sulu, on 8 May 1900, of a Chinese father and a Filipino mother. It
does not appear whether they were legally married, so in the absence of proof to the
contrary they are presumed to be lawfully married. From the date of his birth up to 16
November 1938, the date of the filing of his application for naturalization, and up to the
date of hearing, he had been residing in the Philippines. He is married to a Filipino
woman and has three children by her. He speaks the local dialect and the Spanish and
English languages.

Considering that the common law principle or rule of jus soli obtaining in
England and in the United States, as embodied in the Fourteenth Amendment to
the Constitution of the United
States, has never been extended tothis jurisdiction (section 1, Act of 1 July 1902;
sec. 5, Act of 29 August 1916); considering that the law in force and applicable to the
petitioner and the applicant in the two cases at the time of their birth is sec. 4 of the
Philippine Bill (Act of 1 July 1902), as amended by Act of 23 March 1912, which
provides that only those "inhabitants of the Philippine Islands continuing to reside
therein who were Spanish subjects on the 11th day of April, 1899; and then resided in
said Islands, and their children born subsequent thereto, shall be deemed and held to
be citizens of the Philippine Islands," we are of the opinion and so hold that the
petitioner in the first case and the applicant in the second case, who were born of alien
parentage, were not and are not, under said section, citizens of the Philippine Islands.

Needless to say, this decision

is not intended or designed to deprive, as it cannot divest, of their Filipinocitizens
hip those who had been declared to be Filipino citizens, or upon whom such
citizenship had been conferred, by the
courts because of the doctrine or principle of res adjudicata. (Emphasis and
underscoring supplied).[187]
Allan F. Poe then cannot, even by virtue of the doctrine of res judicata, be considered a
Filipino citizen.

Legitimacy or Illegitimacy of FPJ

As priorly mentioned, FPJs birth certificate indicates that his parents were married, and
that he is a legitimate child. However, the Marriage Contract of his putative parents,
Fernando R. Pou and Bessie Kelley, is dated September 16, 1940, thereby indicating
that he was born out of wedlock. The entries in the two documents, both entries in a
public record and prima facie proof of their contents, are obviously in conflict with each
other.
In appreciating the evidentiary weight of each document, it is observed that the Birth
Certificate was prepared by the attending physician who would have had personal
knowledge of the fact and date of birth, but would have had to rely on hearsay
information given to him as regards the other entries including legitimacy of FPJ. Hence,
greater weight may be given to the date and fact of FPJs birth as recorded in the Birth
Certificate, but less weighty with respect to the entries regarding his legitimacy or
paternity.[188]

As for the marriage contract, since the two contracting parties, Allan F. Poe and Bessie
Kelley, participated in its execution, the entry therein with respect to the date of their
marriage should be given greater weight.

This Court thus concludes, on the basis of the evidence before it, that FPJ was born out
of wedlock, and was thus an illegitimate child at birth. As such, he, at birth, acquired the
citizenship of his legally known American mother, Bessie Kelley.

Whether Allan F. Poe Has Been

Legally Determined to be the Father
of FPJ

Assuming arguendo that Allan F. Poe has been shown to have acquired Philippine
citizenship, whether derived from Lorenzo Pou or through some other means, before
the birth of FPJ, this Court now examines FPJs claim of filiation.

As proof of his filiation, FPJ relies upon (1) the stipulation by petitioner Fornier, both
before the COMELEC and this Court that Allan F. Poe is indeed the father of FPJ; (2)
the declaration of Ruby Kelley Mangahas; and (3) a certified copy of an affidavit of
Fernando R. Poe for Philippine Army Personnel.

With respect to the admission made by petitioner Fornier that Allan F. Poe is indeed the
father of FPJ, the same appears to have been based on the Birth Certificate of FPJ
which is a common exhibit of both parties. However, the same is deemed negated by
the statements of Atty. Estelito Mendoza, counsel for FPJ, during the oral arguments,
when the Chief Justice asked him to stipulate on the truth of the entries of the said
document, that:
x x x I have no personal knowledge on that and I cannot confirm it. Both the father
and mother are already deceased. There is no one from whom I can confirm those
as facts. I regret very much Your Honor that I cannot agree to those as facts.

xxx

x x x So, there are many facts, if Your Honor please, which I cannot stipulate on
this. Because even my clientMr. Poe does not know this, he was just a small boy
when his [father] died. So, I regret very much Your Honor please I can go no
further but to stipulate on certain documents. But on whether those documents
states the truth [is] something I cannot stipulate on because I would have no
basis. (Emphasis and underscoring supplied)[189]
Certainly it would be absurd to bind one partys stipulation as to the truth of certain facts
after the party alleging the same facts has categorically denied knowledge of the truth
thereof.

In any event, such an admission, if it may be deemed one, made by a third party
(petitioner Fornier) is not one of the accepted means of proving filiation under the
Family Code, it having been made by one who does not claim to have personal
knowledge of the circumstances of FPJs birth.

With respect to the Declaration of Ruby Kelley Mangahas, to wit:

DECLARATION
of
RUBY KELLEY MANGAHAS

I, Ruby Kelley Mangahas, of legal age and sound mind, presently residing in Stockton,
California, U.S.A., after being sworn in accordance with law, do hereby declare that:
1. I am the sister of the late BESSIE KELLEY POE.

2. Bessie Kelley Poe was the wife of FERNANDO POE, SR.

3. Fernando and Bessie Poe had a son by name of RONALD ALLAN POE, more
popularly known in the Philippines as Fernando Poe, Jr, or FPJ.

4. Ronald Allan Poe FPJ was born on August 20, 1939 at St. Lukes Hospital,
Magdalena St., Manila.
5. At the time of Ronald Allan Poes birth, his father, Fernando Poe, Sr., was a
Filipino citizen and his mother, Bessie Kelley Poe, was an American citizen.

6. Considering the existing citizenship law at that time, Ronald Allan Poe
automatically assumed the citizenship of his father, a Filipino, and has always
identified himself as such.

7. Fernando Poe, Sr. and my sister, Bessie, met and became engaged while they
were students at the University of the Philippines in 1936. I was also introduced to
Fernando Poe, Sr., by my sister that same year.

8. Fernando Poe, Sr., and my sister, Bessie had their first child in 1938.

9. Fernando Poe, Sr., my sister Bessie, and their first three children, Elizabeth,
Ronald Allan, and Fernando II, and myself lived together with our mother at our
familys house on Dakota St. (now Jorge Bocobo St.), Malate until the liberation of
Manila in 1945, except for some months between 1943-1944.

10. Fernando Poe, Sr. and my sister, Bessie, were blessed with four (4) more
children after Ronald Allan Poe.

11. From the very first time I met Fernando Poe, Sr., in 1936, until his death in
1951, I never heard my sister mention anything about her husband having had
a marital relationship prior to their marriage.

12. During the entire life of Fernando Poe, Sr., as my brother-in-law, I never
heard of a case filed against him by a woman purporting to be his wife.

13. Considering the status of Fernando Poe, Sr., as a leading movie personality
during that time, a case of this nature could not have escaped publicity.

14. Assuming, for the sake of argument, that the case was never published in any
newspaper or magazine, but was in fact filed in court, I would have known about it
because my sister would have been an indispensable party to the case, and she
could not have kept an emotionally serious matter from me.

15. This is the first time, after almost 68 years, that I have heard Fernando Poe, Sr.,
being maliciously accused of being a married man prior to his marriage to my sister.
16. This is the first time, after almost 68 years, that I have heard the name Paulita
Poe y Gomez as being the wife of Fernando Poe, Sr.

17. There was no Paulita Poe y Gomez, or any complainant for that matter, in or out
of court, when my sister gave birth to six (6) children, all fathered by Fernando Poe,
Sr.

18. I am executing this Declaration to attest to the fact that my nephew, Ronald Allan
Poe is a natural born Filipino, and that he is the legitimate child of Fernando Poe, Sr.
Done in the City of Stockton, California, U.S.A., this 12th day of January 2004.

(SIGNED)
RUBY KELLEY MANGAHAS
Declarant,

(Emphasis supplied)
aside from the fact that it is hearsay,[190] it does not serve as proving either FPJs filiation
or his citizenship.

It may not be the basis for proving paternity and filiation since it is in the nature of a self-
serving affidavit, the reliance on which has long been frowned upon. [191] The self-serving
nature of the affidavit is readily apparent, the affidavit having been executed on January
12, 2004 or after the petition for disqualification had already been filed by petitioner
Fornier on January 9, 2004. The only conclusion then is that the extrajudicial
Declaration was executed solely to buttress respondents defense.

Inadmissibility in evidence aside, the statements in the Declaration are regarded as

favorable to the interest of the declarant, being the aunt of FPJ. To admit Declaration as
proof of the facts asserted therein would open the door to frauds and perjuries. [192]

Neither can the same Declaration be made the basis to prove pedigree under Section
39, Rule 130 of the Rules of Evidence, as it is necessary that the following requisites be
present: (1) the declarant is already dead or unable to testify (2) pedigree of a person
must be in issue (3) declarant must be a relative of the person whose pedigree is in
question (4) declaration must be made before the controversy has occurred (5) the
relationship between the declarant and the person whose pedigree must be shown by
evidence other than such act or declaration.
The Declaration of Mrs. Mangahas was executed AFTER the controversy had already
arisen. There is thus failure to comply with the requisite that the declaration must have
been made ante litem motam that is before the controversy, and under such
circumstances that the person making them could have no motive to misrepresent the
facts.

In order thus for a declaration as to pedigree to be admissible, it is necessary that the

declarant should have been disinterested to the extent of having no motive which can
fairly be assumed to be such as it would induce him to state the fact otherwise than as
he understood it. The statement must, therefore, be shown to have been made ante
litem motam; a fortiori, it must have been made before the commencement of a suit
involving the issue to which the declaration relates. [193]

Nor can the Declaration be the basis to prove family reputation or tradition regarding
pedigree under Section 40, Rule 130 of the Rules of Evidence. While a declaration
relating to pedigree may be in any form capable of conveying thought, provided the
authenticity of the vehicle conveying the statement is established to the satisfaction of
the court by evidence as recognition in the family or production from proper custody, the
declarationmust be a statement of fact.[194] The statements that FPJ is a natural-born
Filipino and a legitimate child of Fernando Poe, Sr. are not statements of fact, but
conclusions of law.

More. The Declaration may not also be the basis for proving the citizenship of Allan Poe
since, again, the same is a conclusion of law.

In In re Mallare,[195] this Court, based on the testimonies of the claimants witnesses,

concluded that the claimants father was a Filipino citizen. These testimonies included
facts respecting claimants father his childhood, residency, habits, on the bases of
which this Court concluded that claimants father was indeed Filipino.

Mrs. Mangahas Declaration, on the other hand does not state the operative facts on
which such a conclusion were based.

As for the Affidavit for Philippine Army Personnel[196] of December 22, 1947, it does not
qualify as an acknowledgment in a public document. In acknowledgment through a
public instrument, the parent must admit legitimate filiation in a document duly
acknowledged before a notary public or similar functionary, with the proper formalities,
through private handwritten document signed by him. [197]

Moreover, the admission must be direct and unambiguous to make it at par with, or at
least comparable in form and substance to, either a record of birth or a final judgment.
An incidental statement that does not convey a clear intent to establish the childs
legitimacy should, at best, be just a piece of evidence that might be considered in
proving that filiation by judicial action. [198]

Parenthetically, the age of FPJ indicated in the affidavit which was purportedly executed
on December 22, 1947 does not jibe with his date of birth appearing in his Birth
Certificate.

In sum, the proofs relied upon by FPJ do not constitute sufficient proofs of filiation under
Article 172 of the Family Code.

Whether FPJ is a natural-born

citizen

Following the suggestion of Justice Mendoza, I am adopting the rule that an illegitimate
child of an alien-mother who claims to be an offspring of a Filipino father may be
considered a natural-born citizen if he was duly acknowledged by the latter at birth,
thus leaving the illegitimate child with nothing more to do to acquire or perfect his
citizenship.

Assuming arguendo, therefore, that Allan F. Poe, the putative father of FPJ, was indeed
a Filipino citizen at the time of his birth, no evidence has been submitted to show that
Allan F. Poe did indeed acknowledge FPJ as his own son at birth. In fact, as
emphasized by petitioner Fornier, in the course of the proceedings before the
COMELEC, both parties verified that there was no such acknowledgment by Allan F.
Poe on the dorsal portion of FPJs Birth Certificate.

Since FPJ then was born out of wedlock and was not acknowledged by his father, the
only possible Filipino parent, at the time of his birth, the inescapable conclusion is that
he is not a natural-born Philippine citizen.
Consequently, the material representations in his Certificate of Candidacy that [he] is a
natural born Filipino citizen, and that [he] is eligible for the office [he] seek[s] to be
elected are false. Necessarily, his Certificate of Candidacy must be cancelled pursuant
to Section 78 of the Omnibus Election Code.

A Final Note

The onus of resolving the disqualification case against FPJ, lodged in this Court as the
final arbiter of all legal or justiciable disputes, had to be discharged, the clamor for this
Court to stay away therefrom and let the will of the electorate decide it notwithstanding.

By no stretch of the imagination does this Court envision itself as impeding or frustrating
the will of the people in choosing their leaders, for this institution is precisely built to
uphold and defend the principle underlying our system of government that
sovereignty resides in the people and all government authority emanates from
them.[199]

But if a candidate for public office has not shown that he possesses the basic
qualifications required by law, will he be allowed to continue his candidacy? Why then,
in the first place, have laws been legislated charting the procedure for pre-
election disqualification or declaration of ineligibility of candidates?

The rallies and show of force that have been, and appear to continue to be carried out
by sympathizers of FPJ, the threats of anarchy, the incendiary statements against this
Court spawned by the present controversy have no place in a society that adheres to
the rule of law. Nor do they matter in the arrival of a judicial decision, rendered in
accordance with the facts, evidence, law and jurisprudence.

To be cowed or intimidated by these currents of misguided resentment, and unrest, to

say the least, is to allow extralegal forces to bastardize the decision making process.

WHEREFORE, I vote to: (1) DISMISS the petitions in G.R. Nos. 161434 and 161634 for
being premature, (2)DECLARE COMELEC Resolutions dated January 23, 2004 and
February 6, 2004, rendered in COMELEC SPA No. 04-003 NULL AND VOID, and
(3) DIRECT the COMELEC to cancel the Certificate of Candidacy of Ronald Allan Kelley
Poe, a.k.a. Fernando Poe Jr., for containing a false material representation.
[61]
Section 1 of R.A. No. 1793 reads:

SECTION 1.There shall be an independent Presidential Electoral Tribunal to be

composed of eleven members which shall be the sole judge of all contests relating to
the election, returns, and qualifications of the president-elect and the vice-president-
elect of the Philippines. It shall be composed of the Chief Justice and the other ten
members of the Supreme Court. The Chief Justice shall be its chairman. If on account
of illness, absence, or incapacity upon any of the grounds mentioned in section one,
Rule one hundred and twenty-six of the Rules of Court, of any member of the Tribunal,
or whenever, by reason of temporary disability of any member thereof, or vacancies
occurring therein the requisite number of members of the Tribunal necessary to
constitute a quorum or to render a judgment in any given contest, as hereafter provided,
is not present, or for any other good reason for the early disposal of the contest, the
Chief Justice may designate any retired justice or justices of the Supreme Court as may
be necessary, to sit temporarily as Member of the Tribunal, in order to form a quorum or
until a judgment in said contest is reached: Provided, however, That if no retired justices
of the Supreme Court are available or the number available is not sufficient, justices of
the Court of Appeals and retired justices of the Court of Appeals may be designated to
act as Member of the Tribunal. (Emphasis supplied)

[66]
Sec. 1. Petition for certiorari. When any tribunal, board or officer exercising judicial
or quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with
grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no
appeal, or any plain, speedy, and adequate remedy in the ordinary course of law, a
person aggrieved thereby may file a verified petition in the proper court, alleging the
facts with certainty and praying that judgment be rendered annulling or modifying the
proceedings of such tribunal, board or officer, and granting such incidental reliefs as law
and justice may require.

The petition shall be accompanied by a certified true copy of the judgment, order or
resolution subject thereof, copies of all pleadings and documents relevant and pertinent
thereto, and a sworn certification of non-forum shopping as provided in the third
paragraph of section 3, Rule 46. (1a) (Emphasis supplied)
[68]
Sec. 7. Each Commission shall decide by a majority vote of all its Members any case
or matter brought before it within sixty days from the date of its submission for decision
or resolution. A case or matter is deemed submitted for decision or resolution upon the
filing of the last pleading, brief, or memorandum required by the rules of the
Commission or by the Commission itself. Unless otherwise provided by this
Constitution or by law, any decision, order, or ruling of each Commission may
brought to the Supreme Court on certiorari by the aggrieved party within thirty
days from receipt of a copy thereof. (Emphasis supplied)
[75]
Sec. 15. Pre-proclamation Cases Not Allowed in Elections for President, Vice-
President, Senator, and Member of the House of Representatives. For purposes of
the elections for President, Vice-President, Senator and Member of the House of
Representatives, no pre-proclamation cases shall be allowed on matters relating to the
preparation, transmission, receipt, custody and appreciation of the election returns or
the certificates of canvass, as the case may be. However, this does not preclude the
authority of the appropriate canvassing body motu proprio or upon written complaint of
an interested person to correct manifest errors in the certificate of canvass or election
returns before it.

Questions affecting the composition or proceedings of the board of canvassers may be

initiated in the board or directly with the Commission in accordance with Section 19
hereof.

Any objection on the election returns before the city or municipal boards of canvassers,
or on the municipal certificates of canvass before the provincial board of canvassers or
district boards of canvassers in Metro Manila Area, shall be specifically noted in the
minutes of their respective proceedings. (Emphasis supplied)
[82]
Anyway, to know who are the citizens of the Philippines at the time of the adoption of
the Constitution, it becomes necessary to inquire into the citizenship laws at that time.

The 1935 Constitution of the Philippines was adopted on November 15, 1935.

Who were citizens of the Philippines then?

1. all inhabitants of the Philippine Islands continuing to reside, therein, who were
Spanish subjects on the eleventh day of April, eighteen hundred and ninety-nine, and
then resided in said Islands provided they had not yet lost their citizenship on
November 15, 1935.

This provision of the Philippine Bill is an act of mass naturalization. It implements

 Article IX of the Treaty of Paris. For the first time, it creates the category of Filipino
citizen. Prior to the Philippine Bill there were only Spanish subjects.

The provision includes: (a) persons born in the Philippines, (b) persons born in Spain,
and (c) all other inhabitants of the Philippines provided that they were subjects of
Spain and residents of the Philippines on April 11, 1899, the date of the exchange of
ratification of the Treaty of Paris.

Not included, however, were those who had elected to preserve their allegiance to
the Crown of Spain in accordance with the Treaty of Peace between the [United]
States and Spain The Treaty of Paris allowed Peninsular Spaniards residing in the
Philippines to preserve their allegiance to the Crown of Spain by making, before a
court of record, within a year from the date of exchange of ratification of this treaty
[April 11, 1899], a declaration of their decision to preserve such allegiance

2. The children of those who became Filipino citizens under the Philippine Bill,
provided they had not lost their citizenship prior to November 15, 1935 (G.R. No.
161824 Rollo Vol. I at 247-249). (Emphasis in the original)
3. [108] ARTICLE V
4. SUFFRAGE
5.
Sec. 1. Suffrage may be exercised by all citizens of the Philippines x x x.
[109]
ARTICLE VI
6. THE LEGISLATIVE DEPARTMENT
7.
8. Sec. 3. No person shall be a Senator unless he is a natural-born citizen of the
Philippines x x x.

Sec. 6. No person shall be a Member of the House of Representatives unless he

is a natural-born citizen of the Philippines x x x.
9. ARTICLE VII
10. EXECUTIVE DEPARTMENT
11.
Sec. 2. No person may be elected President unless he is a natural-born citizen of
the Philippines x x x.
 Sec. 3. There shall be a Vice-President who shall have the same qualifications
and term of office and be elected with and in the same manner as the President.
xxx
12. ARTICLE VIII
13. JUDICIAL DEPARTMENT
14.
Sec. 7. (1) No person shall be appointed Member of the Supreme Court or any
lower collegiate court unless he is a natural-born citizen of the Philippines. x x x
15. ARTICLE IX
CONSTITUTIONAL COMMISSIONS

xxx

B. THE CIVIL SERVICE COMMISSION

16.
Sec. 1. (1) The civil service shall be administered by the Civil Service
Commission composed of a Chairman and two Commissioners who shall be
natural-born citizens of the Philippines x x x.
17.
C. THE COMMISSION ON ELECTIONS
18.
Sec. 1. (1) There shall be a Commission on Elections composed of a Chairman
and six Commissioners who shall be natural-born citizens of the Philippines x x x.
19. D. THE COMMISSION ON AUDIT
20.
Sec. 1 (1) There shall be a Commission on Audit composed of a Chairman and
two Commissioners, who shall be natural-born citizens of the Philippines x x x.
21. ARTICLE XI
ACCOUNTABILITY OF PUBLIC OFFICERS
22.
Sec. 8. The Ombudsman and his Deputies shall be natural-born citizens of the
Philippines x x x.

Sec. 18. Public officers and employees owe the State and this Constitution
allegiance at all times, and any public officer or employee who seeks to change
 his citizenship or acquire the status of an immigrant of another country during his
tenure shall be dealt with by law. x x x
23. ARTICLE XII
NATIONAL ECONOMY AND PATRIMONY
24.
Sec. 20. The Congress shall establish an independent central monetary authority,
the members of whose governing board must be natural-born Filipino citizens x x
x.
25. ARTICLE XIII
SOCIAL JUSTICE AND HUMAN RIGHTS
HUMAN RIGHTS
26.
Sec. 17. x x x

(2) The Commission shall be composed of a Chairman and four Members who
must be natural-born citizens of the Philippines and a majority of whom shall be
members of the Bar. The term of office and other qualifications and disabilities of
the Members of the Commission shall be provided by law. x x x
27.
[110]
ARTICLE XII
28. NATIONAL ECONOMY AND PATRIMONY
29.
30. Sec. 2. x x x The State may directly undertake such activities [exploration,
development and utilization of natural resources], or it may enter into co-
production, joint venture, or production-sharing agreements with Filipino citizens,
or corporations or associations at least 60 per centum of whose capital is owned
by such citizens. x x x

The State shall protect the nations marine wealth in its archipelagic waters,
territorial sea, and exclusive economic zone, and reserve its use and enjoyment
exclusively to Filipino citizens.

The Congress may, by law, allow small-scale utilization of natural resources by

Filipino citizens, as well as cooperative fish farming, x x x.

Sec. 3. x x x Citizens of the Philippines may lease not more than five hundred
 hectares, or acquire not more than twelve hectares thereof, by purchase,
homestead, or grant.
31. x x x
32.
Sec. 8. Notwithstanding the provisions of Section 7 of this Article, a natural-born
citizen of the Philippines who has lost his Philippine citizenship may be a
transferee of private lands, subject to limitations provided by law.
33. x x x
34.
Sec. 10. The Congress shall, upon recommendation of the economic and
planning agency, when the national interest dictates, reserve to citizens of the
Philippines or to corporations or associations at least sixty per centum of whose
capital is owned by such citizens, or such higher percentage as Congress may
prescribe, certain areas of investments. The Congress shall enact measures that
will encourage the formation and operation of enterprises whose capital is wholly
owned by Filipinos.

In the grant of rights, privileges, and concessions covering the national economy
and patrimony, the State shall give preference to qualified Filipinos.
35. x x x
36.
Sect. 11. No franchise, certificate, or any other form of authorization for the
operation of a public utility shall be granted except to citizens of the Philippines or
to corporations or associations organized under the laws of the Philippines at
least sixty per centum of whose capital is owned by such citizens, x x x. The
participation of foreign investors in the governing body of any public utility
enterprise shall be limited to their proportionate share in its capital, and all the
executive and managing officers of such corporation or association must be
citizens of the Philippines.

Sec. 12. The State shall promote the preferential use of Filipino labor, domestic
materials and locally produced goods, and adopt measures that help make them
competitive.
37.
ARTICLE XIV
 EDUCATION, SCIENCE AND TECHNOLOGY, ARTS,
CULTURE AND SPORTS EDUCATION
38. Sec. 4. (1) x x x

(2) Educational institutions, other than those established by religious groups and
mission boards, shall be owned solely by citizens of the Philippines or
corporations or associations at least sixty per centum of the capital of which is
owned by such citizens. The Congress may, however, require increased Filipino
equity participation in all educational institutions.

The control and administration of educational institutions shall be vested in

citizens of the Philippines.
39. ARTICLE XVI
GENERAL PROVISIONS
40.
Sec. 11. (1) The ownership and management of mass media shall be limited to
citizens of the Philippines, or to corporations, cooperatives or associations,
wholly-owned and managed by such citizens.
41. x x x
42.
(2) x x x

Only Filipino citizens or corporations or associations at least seventy per

centum of the capital of which is owned by such citizens shall be allowed to
engage in the advertising industry.

The participation of foreign investors in the governing body of entities in such

industry shall be limited to their proportionate share in the capital thereof, and all
the executive and managing officers of such entities must be citizens of the
Philippines.

Sec. 14. x x x The practice of all professions in the Philippines shall be limited to
Filipino citizens, save in cases prescribed by law.
[114]
Sec. 1. The following are citizens of the Philippines:
 43. (1) Those who are citizens of the Philippines at the time of the adoption of this
Constitution.

[148]
CONST. Art. II, Sec. 12.

The State recognizes the sanctity of family life and shall protect and strengthen the
family as a basic autonomous social institution. x x x
[149]
Family Code, Art. 164. Children conceived or born during the marriage of the
parents are legitimate.

Children conceived as a result of artificial insemination of the wife with the sperm of the
husband or that of a donor or both are likewise legitimate children of the husband and
his wife, provided, that both of them authorized or ratified such insemination in a written
instrument executed and signed by them before the birth of the child. The instrument
shall be recorded in the civil registry together with the birth certificate of the child.
[150]
Family Code, Art. 166. Legitimacy of a child may be impugned only on the following
grounds:

(1) That it was physically impossible for the husband to have sexual intercourse with his
wife within the first 120 days of the 300 days which immediately preceded the birth of
the child because of:

(a) the physical incapacity of the husband to have sexual intercourse with his
wife;
(b) the fact that the husband and wife were living separately in such a way that
sexual intercourse was not possible; or
(c) serious illness of the husband, which absolutely prevented sexual intercourse;

(2) That it is proved that for biological or other scientific reasons, the child could not
have been that of the husband, except in the instance provided in the second paragraph
of Article 164; or

(3) That in case of children conceived through artificial insemination, the written
authorization or ratification of either parent was obtained through mistake, fraud,
violence, intimidation, or undue influence.

Art. 167. The child shall be considered legitimate although the mother may have
declared against its legitimacy or may have been sentenced as an adulteress.
Art. 170. The action to impugn the legitimacy of the child shall be brought within one
year from the knowledge of the birth or its recording in the civil register, if the husband
or, in a proper case, any of his heirs, should reside in the city or municipality where the
birth took place or was recorded.

If the husband or, in his default, all of his heirs do not reside at the place of birth as
defined in the first paragraph or where it was recorded, the period shall be two years if
they should reside in the Philippines; and three years if abroad. If the birth of the child
has been concealed from or was unknown to the husband or his heirs, the period shall
be counted from the discovery or knowledge of the birth of the child or of the fact of
registration of said birth, whichever is earlier.

Art. 171. The heirs of the husband may impugn the filiation of the child within the period
prescribed in the preceding article only in the following cases:

(1) If the husband should die before the expiration of the period fixed for bringing
his action;
(2) If he should die after the filing of the complaint without having desisted
therefrom; or
(3) If the child was born after the death of the husband.

[151]
FAMILY CODE, Art. 165. Children conceived and born outside a valid marriage are
illegitimate, unless otherwise provided in this Code.

FAMILY CODE, Art. 176. Illegitimate children shall use the surname and shall be under
the parental authority of their mother, and shall be entitled to support in conformity with
this Code. The legitime of an illegitimate child shall consist of one-half of the legitime of
each legitimate child. Except for this modification, all other provisions in
theCivil Code governing successional rights shall remain in force. (Underscoring
supplied)

[151]
29 Phil. 332 (1915).

[153]
FAMILY CODE, Art. 175. Illegitimate children may establish their illegitimate filiation
in the same way and on the same evidence as legitimate children.

The action must be brought within the same period specified in Article 173, except when
the action is based on the second paragraph of Article 172, in which case the action
may be brought during the lifetime of the alleged parent. (289a)
[158]
ARTICLE VII
EXECUTIVE DEPARTMENT

Sec. 3. No person may be elected to the office of the President or Vice-President unless
he is a natural-born citizen of the Philippines x x x.
[159]
ARTICLE VI
LEGISLATIVE DEPARTMENT

Sec. 4. No person shall be a Senator unless he be a natural-born citizen of the

Philippines x x x.

[160]
Sec. 7. No person shall be a Member of the House of Representatives unless he be
a natural-born citizen of the Philippines x x x.
[165]
ARTICLE III

Sec. 4. A natural-born citizen is one who is a citizen of the Philippines from birth without
having to perform any act to acquire or perfect his Philippine citizenship.
[168]
RULES DELEGATING TO COMELEC FIELD OFFICIALS THE HEARING AND
RECEPTION OF EVIDENCE OF DISQUALIFICATION CASES FILED IN
CONNECTION WITH THE MAY 10, 2004 NATIONAL AND LOCAL ELECTIONS, MOTU
PROPRIO ACTIONS AND DISPOSITION OF DISQUALIFICATION CASES.
[169]
Sec. 2. Suspension of the Comelec Rules of Procedure. In the interest of justice
and in order to attain speedy disposition of cases, the Comelec Rules of Procedure or
any portion thereof inconsistent herewith is hereby suspended.
[170]
Sec. 3. Where to file petitions. The petitions shall be filed with the following offices
of the Commission:

a. For President, Vice-President, Senator and Party-List Organizations, with the Clerk of
the Commission, Commission on Elections in Manila.

xxx
[171]
SEC. 5. Procedure in filing petitions. For purposes of the preceding section, the
following procedure shall be observed:

A. PETITION TO DENY DUE COURSE

OR TO CANCEL CERTIFICATE OF CANDIDACY
1. A verified petition to deny due course or to cancel certificate of candidacy may be
filed at any time after the filing of the certificate of the person whose candidacy is
sought to be denied due course or cancelled but not later than January 7, 2004.
xxx
6. The proceeding shall be summary in nature. In lieu of the testimonies, the parties
shall submit their affidavits or counter-affidavits and other documentary evidence
including their position paper or memorandum within a period of three (3)
inextendible days;
x x x (Emphasis supplied)
[172]

C. PETITION TO DISQUALIFY A CANDIDATE PURSUANT TO SEC. 68 OF THE

OMNIBUS ELECTION CODE AND PETITION TO DISQUALIFY FOR LACK OF
QUALIFICATIONS OR POSSESSING SAME GROUNDS FOR DISQUALIFICATION

1. The verified petition to disqualify a candidate pursuant to Sec. 68 of the Omnibus

Election Code and the verified petition to disqualify a candidate for lack of
qualifications or possessing same grounds for disqualification, may be filed any day
after the last day for filing of certificates of candidacy but not later than the date of
proclamation.
xxx
3. The petition to disqualify a candidate for lack of qualification or possessing same
grounds for disqualification, shall be filed in ten (10) legible copies with the concerned
office mentioned in Sec. 3 personally or through duly authorized representative by
citizen of voting age, or duly registered political party, organization or coalition of
political parties on the grounds that the candidate does not possess all the
qualifications of a candidate as provided for by the constitution or by existing
law or who possesses some grounds for disqualification,
3.a. Disqualification under Existing Law
1. for not being a citizen of the Philippines;
2. for being a permanent resident of or an immigrant of a foreign country;
3. for lack of age;
4. for lack of residence;
5. for not being a registered voter;
6. for not being able to read and write;
7. for not being a bona fide member of the party or organization which the nominee
seeks to represent for at least ninety (90) days preceding the day of the election. (for
party-list nominee)
3.b Some grounds for Disqualifications:
1. for not being a citizen of the Philippines;
2. for being a permanent resident of or an immigrant of a foreign country;
3. for lack of age;
4. for lack of residence;
5. for not being a registered voter;
6. for not being able to read and write;

7. for not being a bona fide member of the party or organization which the nominee
seeks to represent for at least ninety (90) days preceding the day of the election. (for
party-list nominee)
xxx
8. The proceeding shall be summary in nature. In lieu of the testimonies, the
parties shall submit their affidavits or counter-affidavits and other documentary
evidences including their position paper or memorandum.

SEPARATE OPINION

TINGA, J.:

Unabated, the interesting times march on. [1]

No sooner had the dust of battle settled in the impeachment case, [2] where this writer
noted the unfurling saga of profound events that dominated the countrys recent past,
[3]
the cavalcade of occurrences of the last three months reached a crescendo with the
filing of the instant cases before this Court. After the case involving the Chief Justice, we
now address the question on the citizenship qualification for President of the land.

How the Chinese customary wish of interesting times will turn out for the Filipinos lot,
whether as a curse or a blessing, still remains to be seen. But definitely, more than
much depends on the Courts disposal of the present controversy.

The instant cases are unique and unprecedented. For the first time the Court is tasked
to ascertain the farthest reach of the term natural-born citizen in the context of an out-
of-wedlock birth. For the first time too, the Court is disposed to resolve the citizenship
qualification, affecting no less than a leading candidate for President before, in fact
some time reasonably before and not after the elections, as was the Courts wont in
prior instances.[4]

To a man, the members of the Court are agreed that the Tecson and Velez petitions
(G.R. No. 161434 and G.R. No. 161634) deserve unceremonious dismissal for
prematurity and lack of jurisdiction. A different view though obtains as regards
the Fornier petition (G.R. No. 161824). As it seeks to set aside rulings of the
Commission of Elections (COMELEC), the Courts jurisdiction over the petition finds
mooring in no less than the Constitution.[5]

COMELEC Acted With Grave Abuse of Discretion

Fornier posits that the COMELEC acted with grave abuse of discretion in promulgating
the assailed resolutions. The contention is meritorious.

In seeking outright dismissal of the Fornier petition, private respondent Poe proceeds
from the premise that it is exclusively a petition for certiorari under Rule 65 of the 1997
Rules of Civil Procedure. It is not.

The petition invokes as its basis Rule 64 of the Rules of Court, which is captioned
Review of Judgments and Final Orders or Resolutions of the Commission on Elections
and the Commission on Audit.

The 1997 Rules of Civil Procedure introduced this mode of review separate and distinct
from the Rule 65 special civil action. The innovation is consonant with the constitutional
provision[6] which allows the institution of a new review modality for rulings of
constitutional commissions. It ordains that (U)nless otherwise provided by this
Constitution or by law, the mode of review is certiorari. The Supreme Court introduced
the new mode in the exercise of its power under the Constitution [7] to promulgate rules
of pleading, practice and procedure in all courts.

Rule 64 appears to be a fusion of sorts of at least three other Rules, i.e., Rule 65, Rule
46 and Rule 43. Notably, as in a special civil action for certiorari under Rule 65, the
Commission concerned is joined as party respondent unlike in an ordinary appeal or
petition for review; the contents of the petition are similar to those required under
Section 3 of Rule 46; the order to comment is similar to Section 6 of Rule 65; the effect
of filing a petition is similar to Section 12 of Rule 43; and the provision on when the case
is deemed submitted for decision is similar to Section 13 of Rule 43. [8]

A Rule 64 petition must be filed within thirty days from notice of the judgment, final order
or resolution sought to be reviewed, [9] whereas a Rule 65 petition for certiorari calls for a
sixty day period. The distinction gains greater significance in the context that great
public interest inheres in the goal to secure expeditious resolution of election cases
before the COMELEC.

In form, a petition under Rule 64 takes on the characteristics of a Rule 43 petition, which
may allege errors of fact or law.[10] Similar to Rule 43, Rule 64 also provides that findings
of fact that are supported by substantial evidence are binding. [11] As a new and
independent mode of review a Rule 64 petition may as well be treated as a petition for
review, under which errors of fact or law may also be rectified.

However, the Fornier petition also alleges grave abuse of discretion tantamount to lack
or excess of jurisdiction. Verily, he prefaced all the grounds and arguments he raised
with the common statement that the COMELEC committed grave and reversible
errors of law and even acted with grave abuse of discretion.

Hence, while the Fornier petition comes out as an inelegant pastiche of Rule 64 and
Rule 65 initiatory pleadings, it is not defective in form but on the contrary it can stand on
its own merits. Aside from errors of law, it also raised errors of jurisdiction amounting to
grave abuse of discretion.

The Fornier petition before the COMELEC is grounded on Section 1, Rule 23 of the
COMELEC Rules of Procedure, which recognizes and allows petitions to deny due
course to or cancel certificates of candidacy:
Section 1. Grounds for Denial of Certificate of Candidacy. A petition to deny due
course to or cancel, a certificate of candidacy for any elective office may be filed with
the Law Department of the Commission by any citizen of voting age or a duly registered
political party, organization, or coalition of political parties on the exclusive groundthat
any material representation contained therein as required by law is false.
Section 1, Rule 23 of said Rules, in turn, gives flesh to Section 78 of the Omnibus
Election Code, which provides:
SEC. 78. Petition to deny due course to or cancel a certificate of candidacy. A verified
petition seeking to deny due course or to cancel a certificate of candidacy may be filed
by any person exclusively on the ground that any material representation contained
therein as required under Section 74 hereof is false. The petition may be filed at any
time not later than twenty-five days from the time of the filing of the certificate of
candidacy and shall be decided, after notice and hearing, not later than fifteen days
before the election.
Section 74, to which Section 78 refers, states:
Sec. 74. Contents of certificate of candidacy. The certificate of candidacy shall state
that the person filing it is announcing his candidacy for the office stated therein and that
he is eligible for said office; if for Member of the Batasang Pambansa, the province,
including its component cities, highly urbanized city or district or sector which he seeks
to represent; the political party to which he belongs; civil status; his date of birth;
residence; his post office address for all election purposes; his profession or occupation;
that he will support and defend the Constitution of the Philippines and will maintain true
faith and allegiance thereto; that he will obey the laws, legal orders, and decrees
promulgated by the duly constituted authorities; that he is not a permanent resident or
immigrant to a foreign country; that the obligation imposed by his oath is assumed
voluntarily, without mental reservation or purpose of evasion; and that the facts stated in
the certificate of candidacy are true to the best of his knowledge.

Unless a candidate has officially changed his name through a court approved
proceeding, a candidate shall use in a certificate of candidacy the name by which he
has been baptized, or he has not been baptized in any church or religion, the name
registered in the office of the local civil registrar or any other name allowed under the
provisions of existing law or, in the case a Muslim, his Hadji name after performing the
prescribed religious pilgrimage:Provided, That when there are two or more candidates
for an office with the same name and surname, each candidate, upon being made
aware or such fact, shall state his paternal and maternal surname, except the
incumbent who may continue to use the name and surname stated in this certificate of
candidacy when he was elected. He may also include one nickname or stage name by
which he is generally or popularly known in the locality.

The person filing a certificate of candidacy shall also affix his latest photograph,
passport size; a statement in duplicate containing his bio-data and program of
government not exceeding one hundred words, if he so desires. [Emphasis supplied]
Thus, in accordance with Section 78, supra, the petitioner in a petition to deny due
course or to cancel a certificate of candidacy need only prove three
elements. First, there is a representation contained in the certificate of
candidacy. Second, the representation is required under Section 74. Third, the
representation must be material, which, according to jurisprudence, [12] means that it
pertains to the eligibility of the candidate to the office. Fourth,the representation is false.

Asserting that proof of intent to conceal is also necessary for a petition under Section 78
to prosper, Mr. Justice Kapunan wrote in Romualdez-Marcos v. Commission on
Elections,[13] thus:
It is the fact of residence, not a statement in a certificate of candidacy which ought to be
decisive in determining whether or not an individual has satisfied the [C]onstitutions
residency qualification requirement. The said statement becomes material only when
there is or appears to be a deliberate attempt to mislead, misinform, or hide a fact
which would otherwise render a candidate ineligible. It would be plainly ridiculous
for a candidate to deliberately and knowingly make a statement in a certificate of
candidacy which would lead to his or her disqualification. [14] [Emphasis supplied]
The Court, reiterated the Kapunan pronouncement in Salcedo II v. Commission on
Elections.[15]

Adverting to Romualdez-Marcos and Salcedo II, the COMELEC En Banc ruled that
while the element of materiality was not in question the intent to deceive was not
established, not even the knowledge of falsity, thus:
Undeniably, the question on the citizenship or respondent falls within the requirement of
materiality under Section 78. However, proof of misrepresentation with a deliberate
attempt to mislead must still be established. In other words, direct and substantial
evidence showing that the person whose certificate of candidacy is being sought to be
cancelled or denied due course, must have known or have been aware of the falsehood
as appearing on his certificate.[16]
The pronouncements in Romualdez-Marcos and Salcedo II, however, are clearly not
supported by a plain reading of the law. Nowhere in Section 78 is it stated or implied
that there be an intention to deceive for a certificate of candidacy to be denied due
course or be cancelled. All the law requires is that the material representation
contained [in the certificate of candidacy] as required under Section 74 is false. Be it
noted that a hearing under Section 78 and Rule 23 is a quasi-judicial proceeding where
the intent of the respondent is irrelevant. Also drawing on the principles of criminal law
for analogy, the offense of material representation is malum prohibitumnot malum in
se. Intent is irrelevant. When the law speaks in clear and categorical language, there is
no reason for interpretation or construction, but only for application. [17]

The reason for the irrelevance of intent or belief is not difficult to divine. Even if a
candidate believes that he is eligible and purports to be so in his certificate of
candidacy, but is subsequently proven in a Rule 23 proceeding to be, in fact or in law,
not eligible, it would be utterly foolish to allow him to proceed with his candidacy. The
electorate would be merely squandering its votes for and the COMELEC, its
resources in counting the ballots cast in favor of a candidate who is not, in any case,
qualified to hold public office.

The Kapunan pronouncement in the Romualdez-Marcos case did not establish a

doctrine. It is not supported by law, and it smacks of judicial legislation. Moreover,
such judicial legislation becomes even more egregious considering that it arises out of
the pronouncement of only one Justice, or 6% of a Supreme Court. While several other
Justices joined Justice Kapunan in upholding the residence qualification of Rep. Imelda
Romualdez-Marcos, they did not share his dictum.[18] It was his by his lonesome. Justice
Puno had a separate opinion, concurred in by Justices Bellosillo and Melo. Justice
Mendoza filed a separate opinion too, in which Chief Justice Narvasa concurred.
Justices Romero and Francisco each had separate opinions. [19] Except for Chief Justice
Narvasa and Justice Mendoza, the Justices in the majority voted to grant Rep. Marcos
petition on the ground that she reestablished her domicile in Leyte upon being widowed
by the death of former President Marcos.

On the other hand, the reiteration of the Kapunan pronouncement in Salcedo is a

mere obiter dictum. The Court dismissed the disqualification case on the ground that the
respondents use of the surname Salcedo in her certificate of candidacy is not a
material representation since the entry does not refer to her qualification for elective
office.[20] Being what it is, the Salcedo obiter cannot elevate the Kapunan
pronouncement to the level of a doctrine regardless of how many Justices voted
for Salcedo. Significantly, Justice Puno concurred in the result only.[21]

Thus, in this case, it does not matter that respondent knows that he was not a natural-
born Filipino citizen and, knowing such fact, proceeded to state otherwise in his
certificate of candidacy, with an intent to deceive the electorate. A candidates
citizenship eligibility in particular is determined by law, not by his good faith. It was,
therefore, improper for the COMELEC to dismiss the petition on the ground that
petitioner failed to prove intent to mislead on the part of respondent.

I submit, therefore, that the COMELEC acted with grave abuse of discretion in failing to
make a determination of the findings of fact, as well as rule on the evidence before it.
This failure is even violative of the Constitution, as well as relevant statutes and rules of
procedure.[22] Especially blatant to my mind was the conclusion of the COMELEC that
Lorenzo Pou had ceased to be a Spanish subject and had become a Filipino citizen by
operation of the Philippine Bill of 1902 and the Jones Law, despite the absence of
substantial evidence to support this claim. The relevant provisions of these laws are
explicit. Those who were considered citizens of the Philippines under the Philippine Bill
of 1902 and the Jones Law were those who, on 11 April 1899, were inhabitants of the
Philippines who were Spanish subjects, and then resided in the Philippines, and did not
elect to preserve their allegiance to the Crown of Spain. [23]

In In Re: Bosque,[24] petitioner therein, a Spanish national, had left the Philippines on 30
May 1899, returning only in 1901. The Court considered the established fact that
Bosque had been in the Philippines on 11 April 1899. By operation of the Treaty of
Paris, Bosque retained his Spanish citizenship by virtue of his presence in the
Philippines on 11 April 1899. Furthermore, Bosque did not lose such Spanish citizenship
because he failed to comply with the provisions of the Treaty of Paris that a Spanish
national in the Philippines should expressly renounce his foreign allegiance within the
eighteen-month period provided for in the Treaty of Paris that expired in 11 October
1900.[25]

It was possible that Lorenzo Pou, just like Bosque, failed to duly renounce his Spanish
allegiance, assuming he was here in 11 April 1899. The COMELEC could have only
concluded as it did that Lorenzo Pou was among those naturalized by the Treaty of
Paris and relevant laws if it was established that Lorenzo Pou was present in the
Philippines on 11 April 1899. No such proof was submitted to the COMELEC, and its
baseless conclusion that Lorenzo Pou became a Filipino citizen constitutes grave abuse
of discretion.

The Appreciation of the Evidence

The COMELEC failed in its duty as a trier of facts in refusing to appreciate the evidence
presented before it. Instead, it chose to treat the matter as one of a pure question of
law, despite that the allegations in the petition and arguments in rebuttal were grounded
on factual matters.

Similarly before the Court, the resolution of the questions before us hinge on a definitive
finding of fact. Ideally, this should entail deliberate appreciation of evidence, rulings on
the admissibility, materiality and veracity of the documents. The Supreme Court is not a
trier of facts,[26] nor does it appreciate evidence at the first instance. [27]The Court was not
precluded by rule of procedure to remand the case to the COMELEC for the reception
and trial on the facts. Moreover, the Court could have referred the Fornier petition to the
Court of Appeals for the reception and trial on the evidence.

The Court however, has chosen not to remand the case either to the COMELEC or the
Court of Appeals. The duty therefore, is to rule on the evidence as presented right now,
even if its mettle has not been tested before a trier of facts. There is no substantial
evidence at this point that indubitably proves the claim that Ronald Poe is a natural-born
Filipino. Thus, as with the rest of my colleagues, I am compelled to primarily employ
legal presumptions in formulating my opinion.

I am very mindful of the Courts pronouncement that no presumption can be indulged

in favor of the claimant of Philippine citizenship, and any doubt regarding
citizenship must be resolved in favor of the State.[28]

This doctrine provides the Court guidance on how to resolve the several doubtful factual
issues in the case. There may be several matters under the law that may be liberally
construed, but I believe citizenship is not one of them. Filipino citizenship is conferred
by law and nothing else, not even good faith or colorable possession thereof.
Citizenship is a privilege, and not a right.[29] To cheapen citizenship by according it
through haphazard presumptions is tantamount to cheapening our nations worth and
soul.

Thus, any unresolved doubt cannot be adjudged in favor of Poe. His claim to natural-
born citizenship must be established by law, and evidence in accord with the law.

I am willing to consider as authentic the following documents: the 1939 Birth Certificate
of Poe, the 1941 Marriage Contract between Allan F. Poe and Bessie Kelley, the 1951
Death Certificate of Allan F. Poe, and the 1954 Death Certificate of Lorenzo Pou. These
are official public documents which carry with them the presumption of regularity in
execution, and moreover, their authenticity is not challenged by the parties. These
documents are, at the very least, conclusive as to the facts of birth, marriage and death.

These documents were submitted by Poe before the COMELEC, in order to rebut
Forniers allegations. Yet these documents establish facts that are actually damaging to
Poes very claims The Marriage Contract contradicts the notation in the Birth Certificate
that in 1939, Allan F. Poe and Bessie Kelley were married. Since it is the Marriage
Contract, and not the Birth Certificate that indubitably establishes the fact of marriage, it
is more believable that Allan F. Poe and Bessie Kelley were married in 1941, two years
after the birth of Poe. The conclusion that Poe was born illegitimate thus arises.

The submission of these documents effectively shifted the burden of evidence to Poe.
The documents constituteprima facie evidence that Poe was born illegitimate, and
correspondingly, carry no presumption of paternity. The duty falls on Poe to controvert
the prima facie case.[30] Burden of proof remains immutable, but the burden of evidence
can shift depending on the exigencies of the case. [31]

Apart from these documents, there really are no other factual findings that deserve
consideration by this Court, not even the findings of a Senate Committee since they
cannot be binding on this Court, as stressed by Justice Puno in another case. [32]

Paternity of Ronald Allan Poe Not Duly Established

The paternity of Ronald Allan Poe has not been conclusively established. Some may
take stock in the purported admission of petitioner Fornier in his pleadings before both
the COMELEC and this Court that respondent Poe is the son of Allan F. Poe. I am not
as hasty to conclude that such an admission dispenses with proof. The rule on judicial
admissions[33] is but an application of the law on estoppel.[34] The State is not put in
estoppel by the mistakes or errors of its officials, [35] much less by those who, not being
an agent thereof, is in no position to bind it. To hold otherwise would be to compel the
State to recognize as a citizen one who is not by its most fundamental of laws, and in
effect sanction a monstrosity known as citizenship by estoppel. [36]

The truth is that no incontestable proof establishes that respondent Poe had been
acknowledged by Allan F. Poe as his son. Allan F. Poe might have been listed as the
father in the 1939 Birth Certificate, but such document was not signed by him. As
Justice Vitug explains in his Separate Opinion, the birth certificate can be utilized to
prove voluntary acknowledgment of filiation of paternity only if signed or sworn to by the
father.[37]

I disagree with some of my colleagues who would utilize the Affidavit executed by one
Ruby Kelley Mangahas as conclusive proof of respondents paternity. This particular
declaration does not fall under the evidentiary rule on act or declaration about
pedigree. The rule requires that the declaration about pedigree be made before the
controversy has occurred.[38] The Mangahas Affidavit was executed on 12 January
2004, three days after Fornier filed his petition before the COMELEC. This declaration
was clearly made only after the controversy had arisen, and reinforces the notion that it
is a self-serving statement made by a relative of Poe.

Moreover, the Mangahas Affidavit is hearsay[39] and therefore inadmissible in evidence.

Mangahas never testified as to her due execution of the affidavit. Perhaps her testimony
was unnecessary before the summary proceedings in the COMELEC, but it is urged
here that we accept the same as conclusive. To do so will create an ignominious
precedent that would allow for all sorts of affidavits unverified by testimony to be
introduced before this Court and be deemed admissible and conclusive.

Neither do I put much value as proof of filiation, the 1947 Philippine Army Affidavit
purportedly executed by Allan F. Poe,. Therein, Allan F. Poe acknowledged one Ronnie,
age 5, as his son. This document does not clearly establish that Allan F. Poe had
acknowledged respondent Poe who was born in 1939. On its face, the document refers
to a child born in 1942. This affidavit also contains other inconsistencies that contradict
the other evidence which I deem as authentic. It adverts to a 1939 marriage between
Allan F. Poe and Bessie Kelley, an item inconsistent with the Marriage Contract itself. I
am not prepared to declare respondent Poe a Filipino citizen or the son of Allan F. Poe
on the basis of such a dubious document.

In the end, there is nothing left but the Birth Certificate of 1939 and the Marriage
Contract of 1940 that could be taken as proper evidence to establish filiation. Not only
do they fail to prove filiation, they actually caution us against any hasty presumptions of
paternity. These documents establish the illegitimacy of Poe, and illegitimate birth does
not carry any presumption on paternity. Indeed, paternity has to be established by
independent evidence. No such independent evidence is before this Court.

Since paternity has not been proven, there is no choice but to deem Poe as following
the citizenship of his mother, the only parent conclusively established. This conclusion is
militantly opposed by Poe, and even the amici curiaemaintain that when Section 1(3),
Article IV of the 1935 Constitution speaks of children whose fathers are citizens of the
Philippines, it does not distinguish between legitimate and illegitimate children. So long
as the father is a Filipino, so the argument goes, his child shall also be a Filipino.

Whether existing jurisprudence supports Forniers thesis has been the subject of
extensive debate. Of these cases, perhaps Ching Leng v. Galang[40] comes the closest.
There, the Court was confronted with the question of whether a naturalized Filipino
transmits his Filipino citizenship when he adopts his illegitimate children by his Chinese
wife. The Court held that the Civil Code did not extend the fathers privilege of
citizenship to his adopted children. Although the Court found that
.... The fact that the adopted persons involved in the case at bar are illegitimate children
of appellant Ching Leng does not affect substantially the legal situation before us, for, by
legal fiction, they are now being sought to be given the status of legitimate children of
said appellant, despite the circumstances that the Civil Code of the Philippines does not
permit their legitimation.[41]
it nevertheless foreclosed any question on the significance of the childrens
illegitimacy. In definite terms, the Court ruled, thru Justice Roberto Concepcion, that
[in] fact, illegitimate children are under the parental authority of the mother and
follow her nationality, not that of the illegitimate father.[42]

This principle, enunciated in Ching Leng and cases cited therein, is supported by
international custom and the principles of law generally recognized with regard to
nationality.[43] Thus, the delegates to the 1935 Constitutional Convention even voted
down a proposed amendment to include as Filipino citizens the illegitimate children with
a foreign father of a mother who was a citizen of the Philippines, believing that the rules
of international law were already clear to the effect that illegitimate children followed the
citizenship of the mother.[44]

This principle rests on sound policy. It is not rare that in cases of children born out of
wedlock, the paternity is either unknown or disputed. Logically, the nationality of the
illegitimate child cannot follow that of the father. For States adhering to the rule of jus
sanguinis, therefore, the nationality of the mother, the childs only known parent,
becomes the only basis for the childs nationality. The principle thus benefits the child,
saving him from a limbic, stateless existence.

The argument of respondent is premised on the notion that the paternity between
respondent Poe and his alleged father Allan F. Poe has been sufficiently proven.
Indeed, if that be the case, the principle that the citizenship of an illegitimate child
follows that of the mother would lose its rationale and preclude its application. It is my
assertion, however, that paternity has not been so proven; consequently, the rule
invoked by petitioner still holds.

It has been urged that disqualifying Poe as a consequence of ruling that he follows the
citizenship of his mother would constitute a violation of international law, particularly the
Convention on the Rights of the Child. The Convention proscribes the commission of
discriminatory acts against any person by reason of birth. The submission proceeds
from the conviction that the paternity of Poe and, therefore, his Filipino citizenship, has
been duly established. Truly, the Convention would find full application if it were so, but,
sadly, it has not.

Surely, it is not suggested that, regardless of his not being a natural- born Filipino
citizen, respondent is eligible to be President by virtue of such Convention. Obviously, it
is municipal law, not international law, that determines the qualifications of a candidate
for public office. It is also municipal law, not international law, that determines
citizenship.[45]

Our Constitution requires natural-born citizenship as a requisite for holding the office of
the Presidency of the Philippines. This is a rule derived mainly from the American legal
experience, which adopted the principle as a safeguard against foreign subversion. As
explained in a popular online magazine:
Though their concerns may now seem archaic, the framers were genuinely afraid of
foreign subversion. Among their nightmare scenarios was the prospect of a European
noble using his money and influence to sway the Electoral College, take command of
the American army, and return the nascent nation to the royalist fold. At the time,
several European figures such as France's Marquis de Lafayette, a hero of the
Revolutionary War were quite popular in the New World, so the idea wasn't completely
far-fetched.

The framers also took a lesson from Europe, where dynasties constantly schemed
against one another. The men who drafted the Constitution were certainly familiar with
the tragic example of Poland, where agents from Russia, Prussia, and Austria conspired
to install a friendly monarch, Stanislaus II, and subsequently seized upon his weakness
and partitioned the country among themselves. Keep in mind, too, that dynasties
occasionally shuffled around Europe regardless of national origin; England's King
George I, for example, was a Hanoverian who spoke zero English.

There is scant primary source material attesting to the 1787 Constitutional debate over
Article II, Section I, which contains the "natural born" provision. The potential scourge of
foreign influence, however, is mentioned several times in the Federalist Papers. And in
a letter dated July 25, 1787, John Jay, the future first Chief Justice of the Supreme
Court, wrote to George Washington:
Permit me to hint, whether it would not be wise & seasonable to provide a strong check
to the admission of Foreigners into the administration of our national Government; and
to declare expressly that the Command in chief of the American army shall not be given
to, nor devolve on, any but a natural born Citizen. [46]
Historical context notwithstanding, the issues leading to the adoption of the rule cannot
be easily discarded, even with the pretense of 20/20 hindsight. For many, these
considerations remain material. Yet whether or not these concerns maintain to this day
is of no moment. It would take a constitutional amendment, and not a judicial
declaration, that would overturn this requirement of natural-born citizenship.

No Proof of Lorenzo Pous Acquisition of Filipino Citizenship

There is no evidence adduced that Lorenzo Pou was born in the Philippines, or was
even present in the Philippines up until the first few decades of the 20 th century.
However, it is insisted that Lorenzo Pou obtained his citizenship by virtue of the Treaty
of Paris and the Philippine Bill of 1902. I earlier concluded that the COMELEC acted
with grave abuse of discretion in adopting this theory without any substantial evidence.
Again, there is no proof that exists that Lorenzo Pou, a Spanish subject, was already
present in the Philippines on 11 April 1899. It is the fact of presence on that date that
renders operative the grant of mass naturalization. It is a fact that must be established,
and sadly, the evidence fails to do so.

In Co v. Electoral Tribunal,[47] the majority opinion concluded that the son of a

naturalized Filipino and a natural-born Filipina was a natural-born Filipino by virtue of his
election of Filipino citizenship in accordance with the 1973 Constitution; and the
declaration of the 1971 Constitutional Convention that his brother had been earlier
declared a natural-born citizen by virtue of his grandfathers acquisition of Filipino
citizenship by operation of the Philippine Bill of 1902. However, the dissenting opinion of
Mr. Justice Teodoro Padilla raises several points well worth considering, especially on
the residency requirement core to the Philippine Bill of 1902:
The 1971 Constitutional Convention in holding that Emil L. Ong was a "natural-born
citizen" of the Philippines under the 1935 Constitution laid stress on the 'fact'-and this
appears crucial and central to its decision-that Emil L. Ong's grandfather, Ong Te,
became a Filipino citizen under the Philippine Bill of 1902 and, therefore, his
descendants like Emil L. Ong (and therefore, also private respondent) became natural-
born Filipinos. The 1971 Constitutional Convention said:

"Ong Te, Emil Ong's grandfather, was a Spanish subject residing in the Philippines on
April 11, 1899 and was therefore one of the many who became ipso facto citizens of the
Philippines under the provisions of the Philippine Bill of 1902. Said law expressly
declared that all inhabitants of the Philippine Islands who continued to reside therein
and who were Spanish subjects on April 11, 1899 as well as their children born
subsequent thereto, 'shall be deemed and held to be citizens of the Philippine Islands.'
(Section 4, Philippine Bill of 1902)."

The "test" then, following the premises of the 1971 Constitutional Convention, is
whether or not Ong Te, private respondent's and Emil L. Ong's grandfather was "an
inhabitant of the Philippines who continued to reside therein and was a Spanish subject
on April 11, 1899. " If he met these requirements of the Philippine Bill of 1902, then, Ong
Te was a Filipino citizen; otherwise, he was not a Filipino citizen.

xxx

Registro de Chinos" from years 1896 to 1897 which show that Ong Te was not listed as
an inhabitant of Samar where he is claimed to have been a resident. Petitioners
(protestants) also submitted and offered in evidence before the House Electoral Tribunal
exhibit V, a certification of the Chief of the Archives Division, Records and Management
and Archives Office, stating that the name of Ong Te does not appear in the "Registro
Central de Chinos" for the province of Samar for 1895. These exhibits prove or at least,
as petitioners validly argue, tend to prove that Ong Te was NOT a resident of Samar
close to 11 April 1899 and, therefore, could not continue residing in Samar, Philippines
after 11 April 1899, contrary to private respondents pretense. In the face of these proofs
or evidence, private respondent FAILED TO PRESENT ANY REBUTTAL OR
COUNTERVAILING EVIDENCE, except the decision of the 1971 Constitutional
Convention in the case of Emil L. Ong, previously discussed.

It is not surprising then that, as previously noted, the majority decision of the House
Electoral Tribunal skirted any reliance on the alleged ipso facto Filipino citizenship of
Ong Te under the Philippine Bill of 1902. It is equally not surprising that Ong Chuan, the
son of Ong Te and father or private respondent, did not even attempt to claim Filipino
citizenship by reason of Ong Te's alleged Filipino citizenship under the Philippine Bill of
1902 but instead applied for Philippine citizenship, through naturalization.

Nor can it be contended by the private respondent that the House Electoral Tribunal
should no longer have reviewed the factual question or issue of Ong Te's citizenship in
the light of the resolution of the 1971 Constitutional Convention finding him (Ong Te) to
have become a Filipino citizen under the Philippine Bill of 1902. The tribunal had to look
into the question because the finding that Ong Te had become a Filipino citizen under
the Philippine Bill of 1902 was the central core of said 1971 resolution but as held in Lee
vs. Commissioners of Immigration:

x x x. Everytime the citizenship of a person is material on indispensable in a judicial or

administrative case, whatever the corresponding Court or administrative authority
decides therein as to such citizenship is generally not considered as res adjudicata,
hence it has to be threshed out again and again as the occasion may demand. [48]
Notably, not one of the Justices in the majority in the Co case chose to counter these
observations of Justice Padilla. Hence, these pronouncements, even if in dissent,
should not be deemed as discredited, as they have not been contradicted. Taken
together with the rulings of the Court in Bosque and Valles, a doctrinal point is apparent
- proof of residence in the Philippines on and after 11 April 1899 is necessary to
establish that one has acquired the benefits of Filipino citizenship in accordance with
the Treaty of Paris and the Philippine Bill of 1902. This is a matter that has been taken
for granted by Poe, and even by some members of this Court.

Instead, tenuous connections are drawn from Lorenzo Pous 1954 Death Certificate.
Admittedly, the Death Certificate states that Lorenzo Pou was a Filipino. But it does not
say when he became a Filipino. If, for example, Lorenzo Pou became a Filipino only in
1953, his death certificate would also state, without comment, that he was a Filipino. In
this case, the date Lorenzo Pou became a citizen is crucial to Poes cause, as he is
alleging that he draws his natural-born citizenship from that of Lorenzo Pou. Yet the
Death Certificate does not establish any presumption, disputable or conclusive, as to
when Lorenzo Pou became a Filipino citizen. More so, it clearly cannot establish the
fact that Lorenzo Pou was present in the Philippines on 11 April 1899. What it only
establishes was that Lorenzo Pou was a resident of San Carlos, Pangasinan at the time
of his death in 1954.

Even conceding that the presence of Lorenzo Pou in the Philippines was established as
of 1916, when Allan F. Poe was born, the rule is that proof of the existence at a
particular time of a fact of a continuous nature gives rise to an inference, that it exists at
a subsequent time.[49] No similar inference can be drawn that such fact existed prior to
the time it had been established. The presumption of inference of the continued
existence of a condition or state of facts is generally considered to be prospective, not
retrospective. Indeed, the presumption never runs backward. [50] The presence of
Lorenzo Pou in the Philippines in 1916 or 1954 does not establish his presence in the
Philippines in 1899. In 1916, he was already 46 years old, the average lifespan of the
average male during that period, and yet it remains unanswered where he was prior to
that time and more so in 1899.

The following findings are thus binding on the Court. Poe is an illegitimate child whose
paternity has not been duly established. Even if it is assumed that Allan F. Poe was
respondents father, his own nationality has not been duly established Lorenzo Pous
presence in the Philippines in 1899 cannot be determined; hence, no presumption of
nationality can be accorded him.

Let the people decide, respondent insists. That is also the battle cry of those among
us who opt to take the path of least resistance to let the sovereign will chart the
course of the Philippine political landscape. That argument is also a malaise, whether
caused by academic sloth, intellectual cowardice or judicial amnesia, which has
unfortunately plagued this Court. [51] It is an easy cop-out that overlooks the fact that the
Constitution is itself an expression of the sovereign will. The Filipino people, by ratifying
the Constitution, elected to be bound by it, to be ruled by a fundamental law and not by
a hooting throng.

I harbor no pretensions of being wiser than our people when it comes to political
questions. The questions raised, however, are not political but legal, and the people, by
the same Charter to which they bound themselves, have reposed upon the members of
this Court a duty to perform and an oath to uphold, to answer the hard legal questions
and to blaze new trails in jurisprudence.

The Constitution prescribes the qualifications for elective office. The Omnibus Election
Code outlines the procedures for challenging such qualifications. The Commission on
Elections has rendered a resolution upholding respondents eligibility. Petitions assailing
that resolution have been filed before this Court. I see no reason why the Court should
shirk from its constitutional obligation and allow the electorate to squander its votes on
an ineligible candidate.

Respondent may indeed be at heart, and in mind, a natural-born Filipino. He may speak
the vernacular, partake of the native ale, and portray the Filipino hero. He may have
even exercised rights and enjoy privileges reserved to Filipino citizens. All these,
however, do not constitute conclusive proof that he is one. For it may be that a person,
otherwise disqualified by reason of citizenship, may exercise and enjoy such rights and
privileges by representing or mistaking himself to be a Filipino. [52] It was incumbent
upon the respondent, who claims natural-born status, to prove to the satisfaction of the
Court that he really is such. Failing thus, and, as no presumption can be indulged in
favor of the claimant of Philippine citizenship, the doubt must be resolved in favor of the
State.[53]

I come to this conclusion without judgment on whether respondent is a curse about to

be inflicted, or a blessing to be bestowed, upon the Filipino people. The undoubtedly
interesting times that lay before us notwithstanding,

I vote to GRANT the Fornier Petition.

[32]
There is a fundamental difference between a case in court and an investigation of a
congressional committee. The purpose of a judicial proceeding is to settle the dispute in
controversy by adjudicating the legal rights and obligations of the parties to the case.
On the other hand, a congressional investigation is conducted in aid of legislation. Its
aim is to assist and recommend to the legislature a possible action that the body may
take with regard to a particular issue, specifically as to whether or not to enact a new
law or amend an existing one. Consequently, this Court cannot treat the findings in a
congressional committee report as binding because the facts elicited in congressional
hearings are not subject to the rigors of the Rules of Court on admissibility of evidence.
Agan, et al. v. Piatco, G. R. Nos. 155001, 155547, and 155661, 21 January 2004.
[37]
See also Section 5 of the Civil Registry Law, Act No. 3753, also cited by Justice
Vitug. In case of an illegitimate child, the birth certificate shall be signed and sworn to
jointly by the parents of the infant or only by the mother if the father refuses. In the latter
case, it shall not be permissible to state or reveal in the document the name of the
father who refuses to acknowledge the child, or to give therein any information by which
such father could be identified.
[39]
Affidavits are classified as hearsay evidence since they are not generally prepared
by the affiant but by another who uses his own language in writing the affiant's
statements, which may thus be either omitted or misunderstood by the one writing them.
Moreover, the adverse party is deprived of the opportunity to cross-examine the affiants,
For this reason, affidavits are generally rejected for being hearsay, unless the affiant
themselves are placed on the witness stand to testify thereon. Peoples Bank and Trust
Company v. Leonidas, G.R. No. 47815, 11 March 1992, 207 SCRA 164, 166.
[45]
The Convention on Conflict of Nationality Laws, April 12, 1930 (signed at Hague
Conference for Codification of International Law; 5 Hudson, International Legislation
359) provides as follows:

Art. 1. It is for each state to determine under its own law who are its nationals.xxx

Art. 2. Any question as to whether a person possesses the nationality of a particular

state shall be determined in accordance with the law of that state.

[52]
The exercise by a person of the rights and/or privileges that are granted to Filipino
citizens is not conclusive proof that he or she is a Filipino citizen. A person, otherwise
disqualified by reason of citizenship, may exercise and enjoy the right or privilege of a
Filipino citizen by representing himself to be a Filipino. Paa v. Chan, G.R. No. L-25845,
October 31, 1967, 21 SCRA 753, 761.
EXPROPRIATION
 EN BANC

[ G.R. NO. 166429, December 19, 2005 ]

REPUBLIC OF THE PHILIPPINES, REPRESENTED BY EXECUTIVE SECRETARY

EDUARDO R. ERMITA, THE DEPARTMENT OF TRANSPORTATION AND
COMMUNICATIONS (DOTC), AND THE MANILA INTERNATIONAL AIRPORT
AUTHORITY (MIAA), PETITIONERS, VS. HON. HENRICK F. GINGOYON, IN HIS
CAPACITY AS PRESIDING JUDGE OF THE REGIONAL TRIAL COURT, BRANCH
117, PASAY CITY AND PHILIPPINE INTERNATIONAL AIR TERMINALS CO., INC.,
RESPONDENTS.

DECISION

TINGA, J.:

The Ninoy Aquino International Airport Passenger Terminal III (NAIA 3) was conceived,
designed and constructed to serve as the country's show window to the world.
Regrettably, it has spawned controversies. Regrettably too, despite the apparent
completion of the terminal complex way back it has not yet been operated. This has
caused immeasurable economic damage to the country, not to mention its deplorable
discredit in the international community.

In the first case that reached this Court, Agan v. PIATCO,[1] the contracts which the
Government had with the contractor were voided for being contrary to law and public
policy. The second case now before the Court involves the matter of just compensation
due the contractor for the terminal complex it built. We decide the case on the basis of
fairness, the same norm that pervades both the Court's 2004 Resolution in the first case
and the latest expropriation law.

The present controversy has its roots with the promulgation of the Court's decision
in Agan v. PIATCO,[2]promulgated in 2003 (2003 Decision). This decision nullified the
"Concession Agreement for the Build-Operate-and-Transfer Arrangement of the Ninoy
Aquino International Airport Passenger Terminal III" entered into between the Philippine
Government (Government) and the Philippine International Air Terminals Co., Inc.
(PIATCO), as well as the amendments and supplements thereto. The agreement had
authorized PIATCO to build a new international airport terminal (NAIA 3), as well as a
franchise to operate and maintain the said terminal during the concession period of 25
years. The contracts were nullified, among others, that Paircargo Consortium,
predecessor of PIATCO, did not possess the requisite financial capacity when it was
awarded the NAIA 3 contract and that the agreement was contrary to public policy. [3]

At the time of the promulgation of the 2003 Decision, the NAIA 3 facilities had already
been built by PIATCO and were nearing completion. [4] However, the ponencia was silent
as to the legal status of the NAIA 3 facilities following the nullification of the contracts, as
well as whatever rights of PIATCO for reimbursement for its expenses in the
construction of the facilities. Still, in his Separate Opinion, Justice Panganiban, joined by
Justice Callejo, declared as follows:

Should government pay at all for reasonable expenses incurred in the

construction of the Terminal? Indeed it should, otherwise it will be unjustly
enriching itself at the expense of Piatco and, in particular, its funders, contractors
and investors both local and foreign. After all, there is no question that the State
needs and will make use of Terminal III, it being part and parcel of the critical
infrastructure and transportation-related programs of government. [5]

PIATCO and several respondents-intervenors filed their respective motions for the
reconsideration of the 2003 Decision. These motions were denied by the Court in
its Resolution dated 21 January 2004 (2004 Resolution). [6]However, the Court this time
squarely addressed the issue of the rights of PIATCO to refund, compensation or
reimbursement for its expenses in the construction of the NAIA 3 facilities. The holding
of the Court on this crucial point follows:

This Court, however, is not unmindful of the reality that the structures comprising
the NAIA IPT III facility are almost complete and that funds have been spent by
PIATCO in their construction. For the government to take over the said facility, it
has to compensate respondent PIATCO as builder of the said structures. The
compensation must be just and in accordance with law and equity for the
government can not unjustly enrich itself at the expense of PIATCO and its
investors.[7]

After the promulgation of the rulings in Agan, the NAIA 3 facilities have remained in the
possession of PIATCO, despite the avowed intent of the Government to put the airport
terminal into immediate operation. The Government and PIATCO conducted several
rounds of negotiation regarding the NAIA 3 facilities. [8] It also appears that arbitral
proceedings were commenced before the International Chamber of Commerce
International Court of Arbitration and the International Centre for the Settlement of
Investment Disputes,[9] although the Government has raised jurisdictional questions
before those two bodies.[10]

Then, on 21 December 2004, the Government [11] filed a Complaint for expropriation with
the Pasay City Regional Trial Court (RTC), together with an Application for Special
Raffle seeking the immediate holding of a special raffle. The Government sought upon
the filing of the complaint the issuance of a writ of possession authorizing it to take
immediate possession and control over the NAIA 3 facilities.

The Government also declared that it had deposited the amount of

P3,002,125,000.00[12] (3 Billion)[13] in Cash with the Land Bank of the Philippines,
representing the NAIA 3 terminal's assessed value for taxation purposes. [14]

The case[15] was raffled to Branch 117 of the Pasay City RTC, presided by respondent
judge Hon. Henrick F. Gingoyon (Hon. Gingoyon). On the same day that
the Complaint was filed, the RTC issued an Order[16] directing the issuance of a writ of
possession to the Government, authorizing it to "take or enter upon the possession" of
the NAIA 3 facilities. Citing the case of City of Manila v. Serrano,[17] the RTC noted that it
had the ministerial duty to issue the writ of possession upon the filing of a complaint for
expropriation sufficient in form and substance, and upon deposit made by the
government of the amount equivalent to the assessed value of the property subject to
expropriation. The RTC found these requisites present, particularly noting that "[t]he
case record shows that [the Government has] deposited the assessed value of the
[NAIA 3 facilities] in the Land Bank of the Philippines, an authorized depositary, as
shown by the certification attached to their complaint." Also on the same day, the RTC
issued a Writ of Possession. According to PIATCO, the Government was able to take
possession over the NAIA 3 facilities immediately after the Writ of Possession was
issued.[18]

However, on 4 January 2005, the RTC issued another Order designed to supplement its
21 December 2004 Order and the Writ of Possession. In the 4 January 2005 Order, now
assailed in the present petition, the RTC noted that its earlier issuance of its writ of
possession was pursuant to Section 2, Rule 67 of the 1997 Rules of Civil Procedure.
However, it was observed that Republic Act No. 8974 (Rep. Act No. 8974), otherwise
known as "An Act to Facilitate the Acquisition of Right-of-Way, Site or Location for
National Government Infrastructure Projects and For Other Purposes" and its
Implementing Rules and Regulations (Implementing Rules) had amended Rule 67 in
many respects.

There are at least two crucial differences between the respective procedures under
Rep. Act No. 8974 and Rule 67. Under the statute, the Government is required to make
immediate payment to the property owner upon the filing of the complaint to be entitled
to a writ of possession, whereas in Rule 67, the Government is required only to make
an initial deposit with an authorized government depositary. Moreover, Rule 67
prescribes that the initial deposit be equivalent to the assessed value of the property for
purposes of taxation, unlike Rep. Act No. 8974 which provides, as the relevant standard
for initial compensation, the market value of the property as stated in the tax declaration
or the current relevant zonal valuation of the Bureau of Internal Revenue (BIR),
whichever is higher, and the value of the improvements and/or structures using the
replacement cost method.

Accordingly, on the basis of Sections 4 and 7 of Rep. Act No. 8974 and Section 10 of
the Implementing Rules, the RTC made key qualifications to its earlier
issuances. First, it directed the Land Bank of the Philippines, Baclaran Branch (LBP-
Baclaran), to immediately release the amount of US$62,343,175.77 to PIATCO, an
amount which the RTC characterized as that which the Government "specifically made
available for the purpose of this expropriation;" and such amount to be deducted from
the amount of just compensation due PIATCO as eventually determined by the
RTC. Second, the Government was directed to submit to the RTC a Certificate of
Availability of Funds signed by authorized officials to cover the payment of just
compensation. Third, the Government was directed "to maintain, preserve and
safeguard" the NAIA 3 facilities or "perform such as acts or activities in preparation for
their direct operation" of the airport terminal, pending expropriation proceedings and full
payment of just compensation. However, the Government was prohibited "from
performing acts of ownership like awarding concessions or leasing any part of [NAIA 3]
to other parties."[19]

The very next day after the issuance of the assailed 4 January 2005 Order, the
Government filed an Urgent Motion for Reconsideration, which was set for hearing on
10 January 2005. On 7 January 2005, the RTC issued anotherOrder, the second now
assailed before this Court, which appointed three (3) Commissioners to ascertain the
amount of just compensation for the NAIA 3 Complex. That same day, the Government
filed a Motion for Inhibitionof Hon. Gingoyon.

The RTC heard the Urgent Motion for Reconsideration and Motion for Inhibition on 10
January 2005. On the same day, it denied these motions in an Omnibus Order dated 10
January 2005. This is the third Order now assailed before this Court. Nonetheless, while
the Omnibus Order affirmed the earlier dispositions in the 4 January 2005Order, it
excepted from affirmance "the superfluous part of the Order prohibiting the plaintiffs
from awarding concessions or leasing any part of [NAIA 3] to other parties." [20]

Thus, the present Petition for Certiorari and Prohibition under Rule 65 was filed on 13
January 2005. The petition prayed for the nullification of the RTC orders dated 4
January 2005, 7 January 2005, and 10 January 2005, and for the inhibition of Hon.
Gingoyon from taking further action on the expropriation case. A concurrent prayer for
the issuance of a temporary restraining order and preliminary injunction was granted by
this Court in a Resolutiondated 14 January 2005.[21]

The Government, in imputing grave abuse of discretion to the acts of Hon. Gingoyon,
raises five general arguments, to wit:

(i) that Rule 67, not Rep. Act No. 8974, governs the present expropriation proceedings;

(ii) that Hon. Gingoyon erred when he ordered the immediate release of the amount of
US$62.3 Million to PIATCO considering that the assessed value as alleged in the
complaint was only P3 Billion;

(iii) that the RTC could not have prohibited the Government from enjoining the
performance of acts of ownership;

(iv) that the appointment of the three commissioners was erroneous; and

(v) that Hon. Gingoyon should be compelled to inhibit himself from the expropriation
case.[22]

Before we delve into the merits of the issues raised by the Government, it is essential to
consider the crucial holding of the Court in its 2004 Resolution in Agan, which we repeat
below:

This Court, however, is not unmindful of the reality that the structures comprising the
NAIA IPT III facility are almost complete and that funds have been spent by PIATCO in
their construction. For the government to take over the said facility, it has to
compensate respondent PIATCO as builder of the said structures. The
compensation must be just and in accordance with law and equity for the
government can not unjustly enrich itself at the expense of PIATCO and its
investors.[23]

This pronouncement contains the fundamental premises which permeate this decision
of the Court. Indeed, Agan,final and executory as it is, stands as governing law in this
case, and any disposition of the present petition must conform to the conditions laid
down by the Court in its 2004 Resolution.

The 2004 Resolution Which Is

Law of This Case Generally
Permits Expropriation

The pronouncement in the 2004 Resolution is especially significant to this case in

two aspects, namely: (i) that PIATCO must receive payment of just compensation
determined in accordance with law and equity; and (ii) that the government is
barred from taking over NAIA 3 until such just compensation is paid. The parties
cannot be allowed to evade the directives laid down by this Court through any mode of
judicial action, such as the complaint for eminent domain.

It cannot be denied though that the Court in the 2004 Resolution prescribed mandatory
guidelines which the Government must observe before it could acquire the NAIA 3
facilities. Thus, the actions of respondent judge under review, as well as the arguments
of the parties must, to merit affirmation, pass the threshold test of whether such
propositions are in accord with the 2004 Resolution.

The Government does not contest the efficacy of this pronouncement in the
2004 Resolution,[24] thus its application to the case at bar is not a matter of controversy.
Of course, questions such as what is the standard of "just compensation" and which
particular laws and equitable principles are applicable, remain in dispute and shall be
resolved forthwith.

The Government has chosen to resort to expropriation, a remedy available under the
law, which has the added benefit of an integrated process for the determination of just
compensation and the payment thereof to PIATCO. We appreciate that the case at bar
is a highly unusual case, whereby the Government seeks to expropriate a building
complex constructed on land which the State already owns. [25] There is an inherent
illogic in the resort to eminent domain on property already owned by the State. At first
blush, since the State already owns the property on which NAIA 3 stands, the proper
remedy should be akin to an action for ejectment.

However, the reason for the resort by the Government to expropriation proceedings is
understandable in this case. The 2004 Resolution, in requiring the payment of just
compensation prior to the takeover by the Government of NAIA 3, effectively precluded
it from acquiring possession or ownership of the NAIA 3 through the unilateral exercise
of its rights as the owner of the ground on which the facilities stood. Thus, as things
stood after the 2004 Resolution, the right of the Government to take over the NAIA 3
terminal was preconditioned by lawful order on the payment of just compensation to
PIATCO as builder of the structures.

The determination of just compensation could very well be agreed upon by the parties
without judicial intervention, and it appears that steps towards that direction had been
engaged in. Still, ultimately, the Government resorted to its inherent power of eminent
domain through expropriation proceedings. Is eminent domain appropriate in the first
place, with due regard not only to the law on expropriation but also to the Court's 2004
Resolution in Agan?

The right of eminent domain extends to personal and real property, and the NAIA 3
structures, adhered as they are to the soil, are considered as real property. [26] The public
purpose for the expropriation is also beyond dispute. It should also be noted that
Section 1 of Rule 67 (on Expropriation) recognizes the possibility that the property
sought to be expropriated may be titled in the name of the Republic of the Philippines,
although occupied by private individuals, and in such case an averment to that effect
should be made in the complaint. The instant expropriation complaint did aver that the
NAIA 3 complex "stands on a parcel of land owned by the Bases Conversion
Development Authority, another agency of [the Republic of the Philippines]." [27]

Admittedly, eminent domain is not the sole judicial recourse by which the Government
may have acquired the NAIA 3 facilities while satisfying the requisites in the 2004
Resolution. Eminent domain though may be the most effective, as well as the speediest
means by which such goals may be accomplished. Not only does it enable immediate
possession after satisfaction of the requisites under the law, it also has a built-in
procedure through which just compensation may be ascertained. Thus, there should be
no question as to the propriety of eminent domain proceedings in this case.

Still, in applying the laws and rules on expropriation in the case at bar, we are impelled
to apply or construe these rules in accordance with the Court's prescriptions in the 2004
Resolution to achieve the end effect that the Government may validly take over the
NAIA 3 facilities. Insofar as this case is concerned, the 2004 Resolution is effective not
only as a legal precedent, but as the source of rights and prescriptions that must be
guaranteed, if not enforced, in the resolution of this petition. Otherwise, the integrity and
efficacy of the rulings of this Court will be severely diminished.

It is from these premises that we resolve the first question, whether Rule 67 of the Rules
of Court or Rep. Act No. 8974 governs the expropriation proceedings in this case.

Application of Rule 67 Violates

the 2004 Agan Resolution

The Government insists that Rule 67 of the Rules of Court governs the expropriation
proceedings in this case to the exclusion of all other laws. On the other hand, PIATCO
claims that it is Rep. Act No. 8974 which does apply. Earlier, we had adverted to the
basic differences between the statute and the procedural rule. Further elaboration is in
order.

Rule 67 outlines the procedure under which eminent domain may be exercised by the
Government. Yet by no means does it serve at present as the solitary guideline through
which the State may expropriate private property. For example, Section 19 of the Local
Government Code governs as to the exercise by local government units of the power of
eminent domain through an enabling ordinance. And then there is Rep. Act No. 8974,
which covers expropriation proceedings intended for national government infrastructure
projects.

Rep. Act No. 8974, which provides for a procedure eminently more favorable to the
property owner than Rule 67, inescapably applies in instances when the national
government expropriates property "for national government infrastructure
projects."[28] Thus, if expropriation is engaged in by the national government for
purposes other than national infrastructure projects, the assessed value standard and
the deposit mode prescribed in Rule 67 continues to apply.

Under both Rule 67 and Rep. Act No. 8974, the Government commences expropriation
proceedings through the filing of a complaint. Unlike in the case of local governments
which necessitate an authorizing ordinance before expropriation may be accomplished,
there is no need under Rule 67 or Rep. Act No. 8974 for legislative authorization before
the Government may proceed with a particular exercise of eminent domain. The most
crucial difference between Rule 67 and Rep. Act No. 8974 concerns the particular
essential step the Government has to undertake to be entitled to a writ of possession.

The first paragraph of Section 2 of Rule 67 provides:

SEC. 2. Entry of plaintiff upon depositing value with authorized government depository.
Upon the filing of the complaint or at any time thereafter and after due notice to the
defendant, the plaintiff shall have the right to take or enter upon the possession of the
real property involved if he deposits with the authorized government depositary an
amount equivalent to the assessed value of the property for purposes of taxation
to be held by such bank subject to the orders of the court. Such deposit shall be
in money, unless in lieu thereof the court authorizes the deposit of a certificate of
deposit of a government bank of the Republic of the Philippines payable on
demand to the authorized government depositary.

In contrast, Section 4 of Rep. Act No. 8974 relevantly states:

SEC. 4. Guidelines for Expropriation Proceedings. Whenever it is necessary to

acquire real property for the right-of-way, site or location for any national government
infrastructure project through expropriation, the appropriate proceedings before the
proper court under the following guidelines:
a) Upon the filing of the complaint, and after due notice to the defendant, the
implementing agency shall immediately pay the owner of the property the amount
equivalent to the sum of (1) one hundred percent (100%) of the value of the property
based on the current relevant zonal valuation of the Bureau of Internal Revenue (BIR);
and (2) the value of the improvements and/or structures as determined under Section 7
hereof;

. . .

c) In case the completion of a government infrastructure project is of utmost urgency

and importance, and there is no existing valuation of the area concerned, the
implementing agency shall immediately pay the owner of the property its proffered value
taking into consideration the standards prescribed in Section 5 hereof.

Upon completion with the guidelines abovementioned, the court shall immediately issue
to the implementing agency an order to take possession of the property and start the
implementation of the project.

Before the court can issue a Writ of Possession, the implementing agency shall present
to the court a certificate of availability of funds from the proper official concerned.

...

As can be gleaned from the above-quoted texts, Rule 67 merely requires the
Government to deposit with an authorized government depositary the assessed value of
the property for expropriation for it to be entitled to a writ of possession. On the other
hand, Rep. Act No. 8974 requires that the Government make a direct payment to the
property owner before the writ may issue. Moreover, such payment is based on the
zonal valuation of the BIR in the case of land, the value of the improvements or
structures under the replacement cost method, [29] or if no such valuation is available and
in cases of utmost urgency, the proffered value of the property to be seized.

It is quite apparent why the Government would prefer to apply Rule 67 in lieu of Rep.
Act No. 8974. Under Rule 67, it would not be obliged to immediately pay any amount to
PIATCO before it can obtain the writ of possession since all it need do is deposit the
amount equivalent to the assessed value with an authorized government depositary.
Hence, it devotes considerable effort to point out that Rep. Act No. 8974 does not apply
in this case, notwithstanding the undeniable reality that NAIA 3 is a national government
project. Yet, these efforts fail, especially considering the controlling effect of the 2004
Resolution in Agan on the adjudication of this case.

It is the finding of this Court that the staging of expropriation proceedings in this case
with the exclusive use of Rule 67 would allow for the Government to take over the NAIA
3 facilities in a fashion that directly rebukes our 2004 Resolution in Agan. This Court
cannot sanction deviation from its own final and executory orders.

Section 2 of Rule 67 provides that the State "shall have the right to take or enter upon
the possession of the real property involved if [the plaintiff] deposits with the authorized
government depositary an amount equivalent to the assessed value of the property for
purposes of taxation to be held by such bank subject to the orders of the court." [30] It is
thus apparent that under the provision, all the Government need do to obtain a writ of
possession is to deposit the amount equivalent to the assessed value with an
authorized government depositary.

Would the deposit under Section 2 of Rule 67 satisfy the requirement laid down in the
2004 Resolution that "[f]or the government to take over the said facility, it has to
compensate respondent PIATCO as builder of the said structures"? Evidently not.

If Section 2 of Rule 67 were to apply, PIATCO would be enjoined from receiving a single
centavo as just compensation before the Government takes over the NAIA 3 facility by
virtue of a writ of possession. Such an injunction squarely contradicts the letter and
intent of the 2004 Resolution. Hence, the position of the Government sanctions its own
disregard or violation the prescription laid down by this Court that there must first be just
compensation paid to PIATCO before the Government may take over the NAIA 3
facilities.

Thus, at the very least, Rule 67 cannot apply in this case without violating the 2004
Resolution. Even assuming that Rep. Act No. 8974 does not govern in this case, it does
not necessarily follow that Rule 67 should then apply. After all, adherence to the letter of
Section 2, Rule 67 would in turn violate the Court's requirement in the 2004 Resolution
that there must first be payment of just compensation to PIATCO before the
Government may take over the property.
It is the plain intent of Rep. Act No. 8974 to supersede the system of deposit under Rule
67 with the scheme of "immediate payment" in cases involving national government
infrastructure projects. The following portion of the Senate deliberations, cited by
PIATCO in its Memorandum, is worth quoting to cogitate on the purpose behind the
plain meaning of the law:

THE CHAIRMAN (SEN. CAYETANO). "x x x Because the Senate believes that, you
know, we have to pay the landowners immediately not by treasury bills but by
cash.

Since we are depriving them, you know, upon payment, 'no, of possession, we
might as well pay them as much, 'no, hindi lang 50 percent.

xxx

THE CHAIRMAN (REP. VERGARA). Accepted.

xxx

THE CHAIRMAN (SEN. CAYETANO). Oo. Because this is really in favor of the
landowners, e.

THE CHAIRMAN (REP. VERGARA). That's why we need to really secure the availability
of funds.

xxx

THE CHAIRMAN (SEN. CAYETANO). No, no. It's the same. It says here: iyong first
paragraph, diba? Iyong zonal talagang magbabayad muna. In other words, you
know, there must be a payment kaagad. (TSN, Bicameral Conference on the
Disagreeing Provisions of House Bill 1422 and Senate Bill 2117, August 29, 2000, pp.
14-20)

xxx

THE CHAIRMAN (SEN. CAYETANO). Okay, okay, "no. Unang-una, it is not deposit,
'no. It's payment."

REP. BATERINA. It's payment, ho, payment." (Id., p. 63)[31]

It likewise bears noting that the appropriate standard of just compensation is a

substantive matter. It is well within the province of the legislature to fix the standard,
which it did through the enactment of Rep. Act No. 8974. Specifically, this prescribes the
new standards in determining the amount of just compensation in expropriation cases
relating to national government infrastructure projects, as well as the manner of
payment thereof. At the same time, Section 14 of the Implementing Rules recognizes
the continued applicability of Rule 67 on procedural aspects when it provides "all
matters regarding defenses and objections to the complaint, issues on uncertain
ownership and conflicting claims, effects of appeal on the rights of the parties, and such
other incidents affecting the complaint shall be resolved under the provisions on
expropriation of Rule 67 of the Rules of Court." [32]

Given that the 2004 Resolution militates against the continued use of the norm under
Section 2, Rule 67, is it then possible to apply Rep. Act No. 8974? We find that it is, and
moreover, its application in this case complements rather than contravenes the
prescriptions laid down in the 2004 Resolution.

Rep. Act No. 8974 Fits

to the Situation at Bar
and Complements the
2004 Agan Resolution

Rep. Act No. 8974 is entitled "An Act To Facilitate The Acquisition Of Right-Of-Way, Site
Or Location For National Government Infrastructure Projects And For Other Purposes."
Obviously, the law is intended to cover expropriation proceedings intended for national
government infrastructure projects. Section 2 of Rep. Act No. 8974 explains what are
considered as "national government projects."

Sec. 2. National Government Projects. The term "national government projects" shall
refer to all national government infrastructure, engineering works and service contracts,
including projects undertaken by government-owned and controlled corporations, all
projects covered by Republic Act No. 6957, as amended by Republic Act No. 7718,
otherwise known as the Build-Operate-and-Transfer Law, and other related and
necessary activities, such as site acquisition, supply and/or installation of equipment
and materials, implementation, construction, completion, operation, maintenance,
improvement, repair and rehabilitation, regardless of the source of funding.

As acknowledged in the 2003 Decision, the development of NAIA 3 was made pursuant
to a build-operate-and-transfer arrangement pursuant to Republic Act No. 6957, as
amended,[33] which pertains to infrastructure or development projects normally financed
by the public sector but which are now wholly or partly implemented by the private
sector.[34] Under the build-operate-and-transfer scheme, it is the project proponent which
undertakes the construction, including the financing, of a given infrastructure facility.
[35]
In Tatad v. Garcia,[36] the Court acknowledged that the operator of the EDSA Light
Rail Transit project under a BOT scheme was the owner of the facilities such as "the rail
tracks, rolling stocks like the coaches, rail stations, terminals and the power plant." [37]

There can be no doubt that PIATCO has ownership rights over the facilities which it had
financed and constructed. The 2004 Resolution squarely recognized that right when it
mandated the payment of just compensation to PIATCO prior to the takeover by the
Government of NAIA 3. The fact that the Government resorted to eminent domain
proceedings in the first place is a concession on its part of PIATCO's ownership. Indeed,
if no such right is recognized, then there should be no impediment for the Government
to seize control of NAIA 3 through ordinary ejectment proceedings.

Since the rights of PIATCO over the NAIA 3 facilities are established, the nature of
these facilities should now be determined. Under Section 415(1) of the Civil Code, these
facilities are ineluctably immovable or real property, as they constitute buildings, roads
and constructions of all kinds adhered to the soil. [38] Certainly, the NAIA 3 facilities are of
such nature that they cannot just be packed up and transported by PIATCO like a
traveling circus caravan.

Thus, the property subject of expropriation, the NAIA 3 facilities, are real property
owned by PIATCO. This point is critical, considering the Government's insistence that
the NAIA 3 facilities cannot be deemed as the "right-of-way", "site" or "location" of a
national government infrastructure project, within the coverage of Rep. Act No. 8974.

There is no doubt that the NAIA 3 is not, under any sensible contemplation, a "right-of-
way." Yet we cannot agree with the Government's insistence that neither could NAIA 3
be a "site" or "location". The petition quotes the definitions provided in Black's Law
Dictionary of "location'" as the specific place or position of a person or thing and "site"
as pertaining to a place or location or a piece of property set aside for specific
use.'"[39] Yet even Black's Law Dictionary provides that "[t]he term [site] does not of itself
necessarily mean a place or tract of land fixed by definite boundaries." [40] One would
assume that the Government, to back up its contention, would be able to point to a
clear-cut rule that a "site" or "location" exclusively refers to soil, grass, pebbles and
weeds. There is none.

Indeed, we cannot accept the Government's proposition that the only properties that
may be expropriated under Rep. Act No. 8974 are parcels of land. Rep. Act No. 8974
contemplates within its coverage such real property constituting land, buildings, roads
and constructions of all kinds adhered to the soil. Section 1 of Rep. Act No. 8974, which
sets the declaration of the law's policy, refers to "real property acquired for national
government infrastructure projects are promptly paid just compensation." [41] Section 4 is
quite explicit in stating that the scope of the law relates to the acquisition of "real
property," which under civil law includes buildings, roads and constructions adhered to
the soil.

It is moreover apparent that the law and its implementing rules commonly provide for a
rule for the valuation of improvements and/or structures thereupon separate from that of
the land on which such are constructed. Section 2 of Rep. Act No. 8974 itself
recognizes that the improvements or structures on the land may very well be the subject
of expropriation proceedings. Section 4(a), in relation to Section 7 of the law provides
for the guidelines for the valuation of the improvements or structures to be expropriated.
Indeed, nothing in the law would prohibit the application of Section 7, which provides for
the valuation method of the improvements and or structures in the instances wherein it
is necessary for the Government to expropriate only the improvements or structures, as
in this case.

The law classifies the NAIA 3 facilities as real properties just like the soil to which they
are adhered. Any sub-classifications of real property and divergent treatment based
thereupon for purposes of expropriation must be based on substantial distinctions,
otherwise the equal protection clause of the Constitution is violated. There may be
perhaps a molecular distinction between soil and the inorganic improvements adhered
thereto, yet there are no purposive distinctions that would justify a variant treatment for
purposes of expropriation. Both the land itself and the improvements thereupon are
susceptible to private ownership independent of each other, capable of pecuniary
estimation, and if taken from the owner, considered as a deprivation of property. The
owner of improvements seized through expropriation suffers the same degree of loss as
the owner of land seized through similar means. Equal protection demands that all
persons or things similarly situated should be treated alike, both as to rights conferred
and responsibilities imposed. For purposes of expropriation, parcels of land are similarly
situated as the buildings or improvements constructed thereon, and a disparate
treatment between those two classes of real property infringes the equal protection
clause.

Even as the provisions of Rep. Act No. 8974 call for that law's application in this case,
the threshold test must still be met whether its implementation would conform to the
dictates of the Court in the 2004 Resolution. Unlike in the case of Rule 67, the
application of Rep. Act No. 8974 will not contravene the 2004 Resolution, which
requires the payment of just compensation before any takeover of the NAIA 3 facilities
by the Government. The 2004 Resolution does not particularize the extent such
payment must be effected before the takeover, but it unquestionably requires at least
some degree of payment to the private property owner before a writ of possession may
issue. The utilization of Rep. Act No. 8974 guarantees compliance with this bare
minimum requirement, as it assures the private property owner the payment of, at the
very least, the proffered value of the property to be seized. Such payment of the
proffered value to the owner, followed by the issuance of the writ of possession in favor
of the Government, is precisely the schematic under Rep. Act No. 8974, one which
facially complies with the prescription laid down in the 2004 Resolution.

Clearly then, we see no error on the part of the RTC when it ruled that Rep. Act No.
8974 governs the instant expropriation proceedings.

The Proper Amount to be Paid

under Rep. Act No. 8974

Then, there is the matter of the proper amount which should be paid to PIATCO by the
Government before the writ of possession may issue, consonant to Rep. Act No. 8974.
At this juncture, we must address the observation made by the Office of the Solicitor
General in behalf of the Government that there could be no "BIR zonal valuations" on
the NAIA 3 facility, as provided in Rep. Act No. 8974, since zonal valuations are only for
parcels of land, not for airport terminals. The Court agrees with this point, yet does not
see it as an impediment for the application of Rep. Act No. 8974.

It must be clarified that PIATCO cannot be reimbursed or justly compensated for the
value of the parcel of land on which NAIA 3 stands. PIATCO is not the owner of the land
on which the NAIA 3 facility is constructed, and it should not be entitled to just
compensation that is inclusive of the value of the land itself. It would be highly
disingenuous to compensate PIATCO for the value of land it does not own. Its
entitlement to just compensation should be limited to the value of the improvements
and/or structures themselves. Thus, the determination of just compensation cannot
include the BIR zonal valuation under Section 4 of Rep. Act No. 8974.

Under Rep. Act No. 8974, the Government is required to "immediately pay" the owner of
the property the amount equivalent to the sum of (1) one hundred percent (100%) of the
value of the property based on the current relevant zonal valuation of the [BIR]; and (2)
the value of the improvements and/or structures as determined under Section 7. As
stated above, the BIR zonal valuation cannot apply in this case, thus the amount subject
to immediate payment should be limited to "the value of the improvements and/or
structures as determined under Section 7," with Section 7 referring to the "implementing
rules and regulations for the equitable valuation of the improvements and/or structures
on the land." Under the present implementing rules in place, the valuation of the
improvements/structures are to be based using "the replacement cost
method."[42] However, the replacement cost is only one of the factors to be considered in
determining the just compensation.

In addition to Rep. Act No. 8974, the 2004 Resolution in Agan also mandated that the
payment of just compensation should be in accordance with equity as well. Thus, in
ascertaining the ultimate amount of just compensation, the duty of the trial court is to
ensure that such amount conforms not only to the law, such as Rep. Act No. 8974, but
to principles of equity as well.

Admittedly, there is no way, at least for the present, to immediately ascertain the value
of the improvements and structures since such valuation is a matter for factual
determination.[43] Yet Rep. Act No. 8974 permits an expedited means by which the
Government can immediately take possession of the property without having to await
precise determination of the valuation. Section 4(c) of Rep. Act No. 8974 states that "in
case the completion of a government infrastructure project is of utmost urgency and
importance, and there is no existing valuation of the area concerned, the
implementing agency shall immediately pay the owner of the property its proferred
value, taking into consideration the standards prescribed in Section 5 [of the
law]."[44] The "proffered value" may strike as a highly subjective standard based solely
on the intuition of the government, but Rep. Act No. 8974 does provide relevant
standards by which "proffered value" should be based, [45] as well as the certainty of
judicial determination of the propriety of the proffered value. [46]

In filing the complaint for expropriation, the Government alleged to have deposited the
amount of P3 Billion earmarked for expropriation, representing the assessed value of
the property. The making of the deposit, including the determination of the amount of the
deposit, was undertaken under the erroneous notion that Rule 67, and not Rep. Act No.
8974, is the applicable law. Still, as regards the amount, the Court sees no impediment
to recognize this sum of P3 Billion as the proffered value under Section 4(b) of Rep. Act
No. 8974. After all, in the initial determination of the proffered value, the Government is
not strictly required to adhere to any predetermined standards, although its proffered
value may later be subjected to judicial review using the standards enumerated under
Section 5 of Rep. Act No. 8974.

How should we appreciate the questioned order of Hon. Gingoyon, which pegged the
amount to be immediately paid to PIATCO at around $62.3 Million? The Order dated 4
January 2005, which mandated such amount, proves problematic in that regard. While
the initial sum of P3 Billion may have been based on the assessed value, a standard
which should not however apply in this case, the RTC cites without qualification Section
4(a) of Rep. Act No. 8974 as the basis for the amount of $62.3 Million, thus leaving the
impression that the BIR zonal valuation may form part of the basis for just
compensation, which should not be the case. Moreover, respondent judge made no
attempt to apply the enumerated guidelines for determination of just compensation
under Section 5 of Rep. Act No. 8974, as required for judicial review of the proffered
value.

The Court notes that in the 10 January 2005 Omnibus Order, the RTC noted that the
concessions agreement entered into between the Government and PIATCO stated that
the actual cost of building NAIA 3 was "not less than" US$350 Million. [47] The RTC then
proceeded to observe that while Rep. Act No. 8974 required the immediate payment to
PIATCO the amount equivalent to 100% of the value of NAIA 3, the amount deposited
by the Government constituted only 18% of this value. At this point, no binding import
should be given to this observation that the actual cost of building NAIA 3 was "not less
than" US$350 Million, as the final conclusions on the amount of just compensation can
come only after due ascertainment in accordance with the standards set under Rep. Act
No. 8974, not the declarations of the parties. At the same time, the expressed linkage
between the BIR zonal valuation and the amount of just compensation in this case, is
revelatory of erroneous thought on the part of the RTC.

We have already pointed out the irrelevance of the BIR zonal valuation as an
appropriate basis for valuation in this case, PIATCO not being the owner of the land on
which the NAIA 3 facilities stand. The subject order is flawed insofar as it fails to qualify
that such standard is inappropriate.

It does appear that the amount of US$62.3 Million was based on the certification issued
by the LBP-Baclaran that the Republic of the Philippines maintained a total balance in
that branch amounting to such amount. Yet the actual representation of the $62.3 Million
is not clear. The Land Bank Certification expressing such amount does state that it was
issued upon request of the Manila International Airport Authority "purportedly as
guaranty deposit for the expropriation complaint." [48] The Government claims in its
Memorandum that the entire amount was made available as a guaranty fund for the
final and executory judgment of the trial court, and not merely for the issuance of the
writ of possession.[49] One could readily conclude that the entire amount of US$62.3
Million was intended by the Government to answer for whatever guaranties may be
required for the purpose of the expropriation complaint.

Still, such intention the Government may have had as to the entire US$62.3 Million is
only inferentially established. In ascertaining the proffered value adduced by the
Government, the amount of P3 Billion as the amount deposited characterized in the
complaint as "to be held by [Land Bank] subject to the [RTC's] orders," [50] should be
deemed as controlling. There is no clear evidence that the Government intended to offer
US$62.3 Million as the initial payment of just compensation, the wording of the Land
Bank Certification notwithstanding, and credence should be given to the consistent
position of the Government on that aspect.

In any event, for the RTC to be able to justify the payment of US$62.3 Million to PIATCO
and not P3 Billion Pesos, he would have to establish that the higher amount represents
the valuation of the structures/improvements, and not the BIR zonal valuation on the
land wherein NAIA 3 is built. The Order dated 5 January 2005 fails to establish such
integral fact, and in the absence of contravening proof, the proffered value of P3 Billion,
as presented by the Government, should prevail.

Strikingly, the Government submits that assuming that Rep. Act No. 8974 is applicable,
the deposited amount of P3 Billion should be considered as the proffered value, since
the amount was based on comparative values made by the City Assessor.
[51]
Accordingly, it should be deemed as having faithfully complied with the requirements
of the statute.[52] While the Court agrees that P3 Billion should be considered as the
correct proffered value, still we cannot deem the Government as having faithfully
complied with Rep. Act No. 8974. For the law plainly requires direct payment to the
property owner, and not a mere deposit with the authorized government depositary.
Without such direct payment, no writ of possession may be obtained.

Writ of Possession May Not

Be Implemented Until Actual
Receipt by PIATCO of Proferred
Value

The Court thus finds another error on the part of the RTC. The RTC authorized the
issuance of the writ of possession to the Government notwithstanding the fact that no
payment of any amount had yet been made to PIATCO, despite the clear command of
Rep. Act No. 8974 that there must first be payment before the writ of possession can
issue. While the RTC did direct the LBP-Baclaran to immediately release the amount of
US$62 Million to PIATCO, it should have likewise suspended the writ of possession,
nay, withdrawn it altogether, until the Government shall have actually paid PIATCO. This
is the inevitable consequence of the clear command of Rep. Act No. 8974 that requires
immediate payment of the initially determined amount of just compensation should be
effected. Otherwise, the overpowering intention of Rep. Act No. 8974 of ensuring
payment first before transfer of repossession would be eviscerated.
Rep. Act No. 8974 represents a significant change from previous expropriation laws
such as Rule 67, or even Section 19 of the Local Government Code. Rule 67 and the
Local Government Code merely provided that the Government deposit the initial
amounts[53] antecedent to acquiring possession of the property with, respectively, an
authorized

Government depositary[54] or the proper court.[55] In both cases, the private owner does
not receive compensation prior to the deprivation of property. On the other hand, Rep.
Act No. 8974 mandates immediate payment of the initial just compensation prior to the
issuance of the writ of possession in favor of the Government.

Rep. Act No. 8974 is plainly clear in imposing the requirement of immediate
prepayment, and no amount of statutory deconstruction can evade such requisite. It
enshrines a new approach towards eminent domain that reconciles the inherent unease
attending expropriation proceedings with a position of fundamental equity. While
expropriation proceedings have always demanded just compensation in exchange for
private property, the previous deposit requirement impeded immediate compensation to
the private owner, especially in cases wherein the determination of the final amount of
compensation would prove highly disputed. Under the new modality prescribed by Rep.
Act No. 8974, the private owner sees immediate monetary recompense with the same
degree of speed as the taking of his/her property.

While eminent domain lies as one of the inherent powers of the State, there is no
requirement that it undertake a prolonged procedure, or that the payment of the private
owner be protracted as far as practicable. In fact, the expedited procedure of payment,
as highlighted under Rep. Act No. 8974, is inherently more fair, especially to the
layperson who would be hard-pressed to fully comprehend the social value of
expropriation in the first place. Immediate payment placates to some degree whatever
ill-will that arises from expropriation, as well as satisfies the demand of basic fairness.

The Court has the duty to implement Rep. Act No. 8974 and to direct compliance with
the requirement of immediate payment in this case. Accordingly, the Writ of Possession
dated 21 December 2004 should be held in abeyance, pending proof of actual payment
by the Government to PIATCO of the proffered value of the NAIA 3 facilities, which
totals P3,002,125,000.00.
Rights of the Government
upon Issuance of the Writ
of Possession

Once the Government pays PIATCO the amount of the proffered value of P3 Billion, it
will be entitled to the Writ of Possession. However, the Government questions the
qualification imposed by the RTC in its 4 January 2005 Orderconsisting of the
prohibition on the Government from performing acts of ownership such as awarding
concessions or leasing any part of NAIA 3 to other parties. To be certain, the RTC, in its
10 January 2005 Omnibus Order,expressly stated that it was not affirming "the
superfluous part of the Order [of 4 January 2005] prohibiting the plaintiffs from awarding
concessions or leasing any part of NAIA [3] to other parties."[56] Still, such statement was
predicated on the notion that since the Government was not yet the owner of NAIA 3
until final payment of just compensation, it was obviously incapacitated to perform such
acts of ownership.

In deciding this question, the 2004 Resolution in Agan cannot be ignored, particularly
the declaration that "[f]or the government to take over the said facility, it has to
compensate respondent PIATCO as builder of the said structures." The obvious import
of this holding is that unless PIATCO is paid just compensation, the Government is
barred from "taking over," a phrase which in the strictest sense could encompass even
a bar of physical possession of NAIA 3, much less operation of the facilities.

There are critical reasons for the Court to view the 2004 Resolution less stringently, and
thus allow the operation by the Government of NAIA 3 upon the effectivity of the Writ of
Possession. For one, the national prestige is diminished every day that passes with the
NAIA 3 remaining mothballed. For another, the continued non-use of the facilities
contributes to its physical deterioration, if it has not already. And still for another, the
economic benefits to the Government and the country at large are beyond dispute once
the NAIA 3 is put in operation.

Rep. Act No. 8974 provides the appropriate answer for the standard that governs the
extent of the acts the Government may be authorized to perform upon the issuance of
the writ of possession. Section 4 states that "the court shall immediately issue to the
implementing agency an order to take possession of the property and start the
implementation of the project." We hold that accordingly, once the Writ of Possession
is effective, the Government itself is authorized to perform the acts that are essential to
the operation of the NAIA 3 as an international airport terminal upon the effectivity of the
Writ of Possession. These would include the repair, reconditioning and improvement of
the complex, maintenance of the existing facilities and equipment, installation of new
facilities and equipment, provision of services and facilities pertaining to the facilitation
of air traffic and transport, and other services that are integral to a modern-day
international airport.

The Government's position is more expansive than that adopted by the Court. It argues
that with the writ of possession, it is enabled to perform acts de jure on the expropriated
property. It cites Republic v. Tagle,[57] as well as the statement therein that "the
expropriation of real property does not include mere physical entry or occupation of
land," and from them concludes that "its mere physical entry and occupation of the
property fall short of the taking of title, which includes all the rights that may be
exercised by an owner over the subject property."

This conclusion is indeed lifted directly from statements in Tagle,[58] but not from
the ratio decidendi of that case.Tagle concerned whether a writ of possession in favor of
the Government was still necessary in light of the fact that it was already in actual
possession of the property. In ruling that the Government was entitled to the writ of
possession, the Court in Tagle explains that such writ vested not only physical
possession, but also the legal right to possess the property. Continues the Court, such
legal right to possess was particularly important in the case, as there was a pending suit
against the Republic for unlawful detainer, and the writ of possession would serve to
safeguard the Government from eviction. [59]

At the same time, Tagle conforms to the obvious, that there is no transfer of ownership
as of yet by virtue of the writ of possession. Tagle may concede that the Government is
entitled to exercise more than just the right of possession by virtue of the writ of
possession, yet it cannot be construed to grant the Government the entire panoply of
rights that are available to the owner. Certainly, neither Tagle nor any other case or law,
lends support to the Government's proposition that it acquires beneficial or equitable
ownership of the expropriated property merely through the writ of possession.

Indeed, this Court has been vigilant in defense of the rights of the property owner who
has been validly deprived of possession, yet retains legal title over the expropriated
property pending payment of just compensation. We reiterated the various doctrines of
such import in our recent holding in Republic v. Lim:[60]

The recognized rule is that title to the property expropriated shall pass from the owner to
the expropriator only upon full payment of the just compensation. Jurisprudence on
this settled principle is consistent both here and in other democratic jurisdictions.
In Association of Small Landowners in the Philippines, Inc. et al., vs. Secretary of
Agrarian Reform[61], thus:

"Title to property which is the subject of condemnation proceedings does not

vest the condemnor until the judgment fixing just compensation is entered and
paid, but the condemnor's title relates back to the date on which the petition under the
Eminent Domain Act, or the commissioner's report under the Local Improvement Act, is
filed.

x x x Although the right to appropriate and use land taken for a canal is complete
at the time of entry, title to the property taken remains in the owner until payment
is actually made. (Emphasis supplied.)

In Kennedy v. Indianapolis, the US Supreme Court cited several cases holding that title
to property does not pass to the condemnor until just compensation had actually been
made. In fact, the decisions appear to be uniform to this effect. As early as 1838,
in Rubottom v. McLure, it was held that 'actual payment to the owner of the
condemned property was a condition precedent to the investment of the title to
the property in the State' albeit 'not to the appropriation of it to public
use.' In Rexford v. Knight, the Court of Appeals of New York said that the construction
upon the statutes was that the fee did not vest in the State until the payment of the
compensation although the authority to enter upon and appropriate the land was
complete prior to the payment. Kennedy further said that 'both on principle and
authority the rule is . . . that the right to enter on and use the property is
complete, as soon as the property is actually appropriated under the authority of
law for a public use, but that the title does not pass from the owner without his
consent, until just compensation has been made to him.'
Our own Supreme Court has held in Visayan Refining Co. v. Camus and Paredes, that:

'If the laws which we have exhibited or cited in the preceding discussion are
attentively examined it will be apparent that the method of expropriation adopted
in this jurisdiction is such as to afford absolute reassurance that no piece of land
can be finally and irrevocably taken from an unwilling owner until compensation
is paid....'"(Emphasis supplied.)

Clearly, without full payment of just compensation, there can be no transfer of title from
the landowner to the expropriator. Otherwise stated, the Republic's acquisition of
ownership is conditioned upon the full payment of just compensation within a
reasonable time.

Significantly, in Municipality of Bian v. Garcia[62] this Court ruled that the expropriation
of lands consists of two stages, to wit:

"x x x The first is concerned with the determination of the authority of the plaintiff to
exercise the power of eminent domain and the propriety of its exercise in the context of
the facts involved in the suit. It ends with an order, if not of dismissal of the action, "of
condemnation declaring that the plaintiff has a lawful right to take the property sought to
be condemned, for the public use or purpose described in the complaint, upon the
payment of just compensation to be determined as of the date of the filing of the
complaint" x x x.

The second phase of the eminent domain action is concerned with the determination by
the court of "the just compensation for the property sought to be taken." This is done by
the court with the assistance of not more than three (3) commissioners. x x x.

It is only upon the completion of these two stages that expropriation is said to have
been completed. In Republic v. Salem Investment Corporation [63] , we ruled that, "the
process is not completed until payment of just compensation." Thus, here, the failure of
the Republic to pay respondent and his predecessors-in-interest for a period of 57 years
rendered the expropriation process incomplete.
Lim serves fair warning to the Government and its agencies who consistently refuse to
pay just compensation due to the private property owner whose property had been
expropriated. At the same time, Lim emphasizes the fragility of the rights of the
Government as possessor pending the final payment of just compensation, without
diminishing the potency of such rights. Indeed, the public policy, enshrined foremost in
the Constitution, mandates that the Government must pay for the private property it
expropriates. Consequently, the proper judicial attitude is to guarantee compliance with
this primordial right to just compensation.

Final Determination of Just

Compensation Within 60 Days

The issuance of the writ of possession does not write finis to the expropriation
proceedings. As earlier pointed out, expropriation is not completed until payment to the
property owner of just compensation. The proffered value stands as merely a
provisional determination of the amount of just compensation, the payment of which is
sufficient to transfer possession of the property to the Government. However, to
effectuate the transfer of ownership, it is necessary for the Government to pay the
property owner the final just compensation.

In Lim, the Court went as far as to countenance, given the exceptional circumstances of
that case, the reversion of the validly expropriated property to private ownership due to
the failure of the Government to pay just compensation in that case. [64] It was noted in
that case that the Government deliberately refused to pay just compensation. The Court
went on to rule that "in cases where the government failed to pay just compensation
within five (5) years from the finality of the judgment in the expropriation proceedings,
the owners concerned shall have the right to recover possession of their property." [65]

Rep. Act No. 8974 mandates a speedy method by which the final determination of just
compensation may be had. Section 4 provides:

In the event that the owner of the property contests the implementing agency's proffered
value, the court shall determine the just compensation to be paid the owner within sixty
(60) days from the date of filing of the expropriation case. When the decision of the
court becomes final and executory, the implementing agency shall pay the owner the
difference between the amount already paid and the just compensation as determined
by the court.

We hold that this provision should apply in this case. The sixty (60)-day period
prescribed in Rep. Act No. 8974 gives teeth to the law's avowed policy "to ensure that
owners of real property acquired for national government infrastructure projects
are promptly paid just compensation."[66] In this case, there already has been
irreversible delay in the prompt payment of PIATCO of just compensation, and it is no
longer possible for the RTC to determine the just compensation due PIATCO within sixty
(60) days from the filing of the complaint last 21 December 2004, as contemplated by
the law. Still, it is feasible to effectuate the spirit of the law by requiring the trial court to
make such determination within sixty (60) days from finality of this decision, in
accordance with the guidelines laid down in Rep. Act No. 8974 and its Implementing
Rules.

Of course, once the amount of just compensation has been finally determined, the
Government is obliged to pay PIATCO the said amount. As shown in Lim and other like-
minded cases, the Government's refusal to make such payment is indubitably
actionable in court.

Appointment of Commissioners

The next argument for consideration is the claim of the Government that the RTC erred
in appointing the three commissioners in its 7 January 2005 Order without prior
consultation with either the Government or PIATCO, or without affording the
Government the opportunity to object to the appointment of these commissioners. We
can dispose of this argument without complication.

It must be noted that Rep. Act No. 8974 is silent on the appointment of commissioners
tasked with the ascertainment of just compensation. [67] This protocol though is
sanctioned under Rule 67. We rule that the appointment of commissioners under Rule
67 may be resorted to, even in expropriation proceedings under Rep. Act No. 8974,
since the application of the provisions of Rule 67 in that regard do not conflict with the
statute. As earlier stated, Section 14 of the Implementing Rules does allow such other
incidents affecting the complaint to be resolved under the provisions on expropriation of
Rule 67 of the Rules of Court. Even without Rule 67, reference during trial to a
commissioner of the examination of an issue of fact is sanctioned under Rule 32 of the
Rules of Court.

But while the appointment of commissioners under the aegis of Rule 67 may be
sanctioned in expropriation proceedings under Rep. Act No. 8974, the standards to be
observed for the determination of just compensation are provided not in Rule 67 but in
the statute. In particular, the governing standards for the determination of just
compensation for the NAIA 3 facilities are found in Section 10 of the Implementing
Rules for Rep. Act No. 8974, which provides for the replacement cost method in the
valuation of improvements and structures. [68]

Nothing in Rule 67 or Rep. Act No. 8974 requires that the RTC consult with the parties
in the expropriation case on who should be appointed as commissioners. Neither does
the Court feel that such a requirement should be imposed in this case. We did rule
in Municipality of Talisay v. Ramirez[69] that "there is nothing to prevent [the trial court]
from seeking the recommendations of the parties on [the] matter [of appointment of
commissioners], the better to ensure their fair representation." [70] At the same time, such
solicitation of recommendations is not obligatory on the part of the court, hence we
cannot impute error on the part of the RTC in its exercise of solitary discretion in the
appointment of the commissioners.

What Rule 67 does allow though is for the parties to protest the appointment of any of
these commissioners, as provided under Section 5 of the Rule. These objections though
must be made filed within ten (10) days from service of the order of appointment of the
commissioners.[71] In this case, the proper recourse of the Government to challenge the
choice of the commissioners is to file an objection with the trial court, conformably with
Section 5, Rule 67, and not as it has done, assail the same through a special civil action
for certiorari. Considering that the expropriation proceedings in this case were
effectively halted seven (7) days after the Order appointing the commissioners,[72] it is
permissible to allow the parties to file their objections with the RTC within five (5) days
from finality of this decision.

Insufficient Ground for Inhibition

of Respondent Judge

The final argument for disposition is the claim of the Government is that Hon. Gingoyon
has prejudged the expropriation case against the Government's cause and, thus, should
be required to inhibit himself. This grave charge is predicated on facts which the
Government characterizes as "undeniable." In particular, the Government notes that the
4 January 2005 Order was issued motu proprio, without any preceding motion, notice or
hearing. Further, such order, which directed the payment of US$62 Million to PIATCO,
was attended with error in the computation of just compensation. The Government also
notes that the said Order was issued even before summons had been served on
PIATCO.

The disqualification of a judge is a deprivation of his/her judicial power [73] and should not
be allowed on the basis of mere speculations and surmises. It certainly cannot be
predicated on the adverse nature of the judge's rulings towards the movant for
inhibition, especially if these rulings are in accord with law. Neither could inhibition be
justified merely on the erroneous nature of the rulings of the judge. We emphasized
in Webb v. People:[74]

To prove bias and prejudice on the part of respondent judge, petitioners harp on the
alleged adverse and erroneous rulings of respondent judge on their various
motions. By themselves, however, they do not sufficiently prove bias and
prejudice to disqualify respondent judge. To be disqualifying, the bias and
prejudice must be shown to have stemmed from an extrajudicial source and
result in an opinion on the merits on some basis other than what the judge
learned from his participation in the case. Opinions formed in the course of judicial
proceedings, although erroneous, as long as they are based on the evidence presented
and conduct observed by the judge, do not prove personal bias or prejudice on the part
of the judge. As a general rule, repeated rulings against a litigant, no matter how
erroneous and vigorously and consistently expressed, are not a basis for
disqualification of a judge on grounds of bias and prejudice. Extrinsic evidence is
required to establish bias, bad faith, malice or corrupt purpose, in addition to the
palpable error which may be inferred from the decision or order itself. Although
the decision may seem so erroneous as to raise doubts concerning a judge's
integrity, absent extrinsic evidence, the decision itself would be insufficient to
establish a case against the judge. The only exception to the rule is when the
error is so gross and patent as to produce an ineluctable inference of bad faith or
malice.[75]
The Government's contentions against Hon. Gingoyon are severely undercut by the fact
that the 21 December 2004 Order, which the 4 January 2005 Order sought to rectify,
was indeed severely flawed as it erroneously applied the provisions of Rule 67 of the
Rules of Court, instead of Rep. Act No. 8974, in ascertaining compliance with the
requisites for the issuance of the writ of possession. The 4 January 2005 Order, which
according to the Government establishes Hon. Gingoyon's bias, was promulgated
precisely to correct the previous error by applying the correct provisions of law. It would
not speak well of the Court if it sanctions a judge for wanting or even attempting to
correct a previous erroneous order which precisely is the right move to take.

Neither are we convinced that the motu proprio issuance of the 4 January
2005 Order, without the benefit of notice or hearing, sufficiently evinces bias on the part
of Hon. Gingoyon. The motu proprio amendment by a court of an erroneous order
previously issued may be sanctioned depending on the circumstances, in line with the
long-recognized principle that every court has inherent power to do all things reasonably
necessary for the administration of justice within the scope of its jurisdiction. [76] Section
5(g), Rule 135 of the Rules of Court further recognizes the inherent power of courts "to
amend and control its process and orders so as to make them conformable to law and
justice,"[77] a power which Hon. Gingoyon noted in his 10 January 2005 Omnibus Order.
[78]
This inherent power includes the right of the court to reverse itself, especially when in
its honest opinion it has committed an error or mistake in judgment, and that to adhere
to its decision will cause injustice to a party litigant. [79]

Certainly, the 4 January 2005 Order was designed to make the RTC's previous order
conformable to law and justice, particularly to apply the correct law of the case. Of
course, as earlier established, this effort proved incomplete, as the 4 January
2005 Order did not correctly apply Rep. Act No. 8974 in several respects. Still, at least,
the 4 January 2005 Order correctly reformed the most basic premise of the case that
Rep. Act No. 8974 governs the expropriation proceedings.

Nonetheless, the Government belittles Hon. Gingoyon's invocation of Section 5(g), Rule
135 as "patently without merit". Certainly merit can be seen by the fact that the 4
January 2005 Order reoriented the expropriation proceedings towards the correct
governing law. Still, the Government claims that the unilateral act of the RTC did not
conform to law or justice, as it was not afforded the right to be heard.
The Court would be more charitably disposed towards this argument if not for the fact
that the earlier order with the 4 January 2005 Order sought to correct was itself issued
without the benefit of any hearing. In fact, nothing either in Rule 67 or Rep. Act No. 8975
requires the conduct of a hearing prior to the issuance of the writ of possession, which
by design is available immediately upon the filing of the complaint provided that the
requisites attaching thereto are present. Indeed, this expedited process for the obtention
of a writ of possession in expropriation cases comes at the expense of the rights of the
property owner to be heard or to be deprived of possession. Considering these
predicates, it would be highly awry to demand that an order modifying the earlier
issuance of a writ of possession in an expropriation case be barred until the staging of a
hearing, when the issuance of the writ of possession itself is not subject to hearing.
Perhaps the conduct of a hearing under these circumstances would be prudent.
However, hearing is not mandatory, and the failure to conduct one does not establish
the manifest bias required for the inhibition of the judge.

The Government likewise faults Hon. Gingoyon for using the amount of US$350 Million
as the basis for the 100% deposit under Rep. Act No. 8974. The Court has noted that
this statement was predicated on the erroneous belief that the BIR zonal valuation
applies as a standard for determination of just compensation in this case. Yet this is
manifest not of bias, but merely of error on the part of the judge. Indeed, the
Government was not the only victim of the errors of the RTC in the assailed orders.
PIATCO itself was injured by the issuance by the RTC of the writ of possession, even
though the former had yet to be paid any amount of just compensation. At the same
time, the Government was also prejudiced by the erroneous ruling of the RTC that the
amount of US$62.3 Million, and not P3 Billion, should be released to PIATCO.

The Court has not been remiss in pointing out the multiple errors committed by the RTC
in its assailed orders, to the prejudice of both parties. This attitude of error towards all
does not ipso facto negate the charge of bias. Still, great care should be had in requiring
the inhibition of judges simply because the magistrate did err. Incompetence may be a
ground for administrative sanction, but not for inhibition, which requires lack of
objectivity or impartiality to sit on a case.

The Court should necessarily guard against adopting a standard that a judge should be
inhibited from hearing the case if one litigant loses trust in the judge. Such loss of trust
on the part of the Government may be palpable, yet inhibition cannot be grounded
merely on the feelings of the party-litigants. Indeed, every losing litigant in any case can
resort to claiming that the judge was biased, and he/she will gain a sympathetic ear
from friends, family, and people who do not understand the judicial process. The test in
believing such a proposition should not be the vehemence of the litigant's claim of bias,
but the Courts judicious estimation, as people who know better than to believe any
old cry of "wolf!", whether such bias has been irrefutably exhibited.

The Court acknowledges that it had been previously held that "at the very first sign of
lack of faith and trust in his actions, whether well-grounded or not, the judge has no
other alternative but to inhibit himself from the case." [80]But this doctrine is qualified by
the entrenched rule that "a judge may not be legally prohibited from sitting in a litigation,
but when circumstances appear that will induce doubt to his honest actuations and
probity in favor of either party, or incite such state of mind, he should conduct a careful
self-examination. He should exercise his discretion in a way that the people's faith in the
Courts of Justice is not impaired." [81] And a self-assessment by the judge that he/she is
not impaired to hear the case will be respected by the Court absent any evidence to the
contrary. As held in Chin v. Court of Appeals:

An allegation of prejudgment, without more, constitutes mere conjecture and is not one
of the "just and valid reasons" contemplated in the second paragraph of Rule 137 of the
Rules of Court for which a judge may inhibit himself from hearing the case. We have
repeatedly held that mere suspicion that a judge is partial to a party is not enough. Bare
allegations of partiality and prejudgment will not suffice in the absence of clear and
convincing evidence to overcome the presumption that the judge will undertake his
noble role to dispense justice according to law and evidence and without fear or favor.
There should be adequate evidence to prove the allegations, and there must be
showing that the judge had an interest, personal or otherwise, in the prosecution of the
case. To be a disqualifying circumstance, the bias and prejudice must be shown to have
stemmed from an extrajudicial source and result in an opinion on the merits on some
basis other than what the judge learned from his participation in the case. [82]

The mere vehemence of the Government's claim of bias does not translate to clear and
convincing evidence of impairing bias. There is no sufficient ground to direct the
inhibition of Hon. Gingoyon from hearing the expropriation case.

In conclusion, the Court summarizes its rulings as follows:

(1) The 2004 Resolution in Agan sets the base requirement that has to be observed
before the Government may take over the NAIA 3, that there must be payment to
PIATCO of just compensation in accordance with law and equity. Any ruling in the
present expropriation case must be conformable to the dictates of the Court as
pronounced in the Agan cases.

(2) Rep. Act No. 8974 applies in this case, particularly insofar as it requires the
immediate payment by the Government of at least the proffered value of the NAIA 3
facilities to PIATCO and provides certain valuation standards or methods for the
determination of just compensation.

(3) Applying Rep. Act No. 8974, the implementation of Writ of Possession in favor of the
Government over NAIA 3 is held in abeyance until PIATCO is directly paid the amount
of P3 Billion, representing the proffered value of NAIA 3 under Section 4(c) of the law.

(4) Applying Rep. Act No. 8974, the Government is authorized to start the
implementation of the NAIA 3 Airport terminal project by performing the acts that are
essential to the operation of the NAIA 3 as an international airport terminal upon the
effectivity of the Writ of Possession, subject to the conditions above-stated. As
prescribed by the Court, such authority encompasses "the repair, reconditioning and
improvement of the complex, maintenance of the existing facilities and equipment,
installation of new facilities and equipment, provision of services and facilities pertaining
to the facilitation of air traffic and transport, and other services that are integral to a
modern-day international airport."[83]

(5) The RTC is mandated to complete its determination of the just compensation within
sixty (60) days from finality of this Decision. In doing so, the RTC is obliged to comply
with "law and equity" as ordained in Again and the standard set under Implementing
Rules of Rep. Act No. 8974 which is the "replacement cost method" as the standard of
valuation of structures and improvements.

(6) There was no grave abuse of discretion attending the RTC Order appointing the
commissioners for the purpose of determining just compensation. The provisions on
commissioners under Rule 67 shall apply insofar as they are not inconsistent with Rep.
Act No. 8974, its Implementing Rules, or the rulings of the Court in Agan.
(7) The Government shall pay the just compensation fixed in the decision of the trial
court to PIATCO immediately upon the finality of the said decision.

(8) There is no basis for the Court to direct the inhibition of Hon. Gingoyon.

All told, the Court finds no grave abuse of discretion on the part of the RTC to warrant
the nullification of the questioned orders. Nonetheless, portions of these orders should
be modified to conform with law and the pronouncements made by the Court herein.

WHEREFORE, the Petition is GRANTED in PART with respect to the orders dated 4
January 2005 and 10 January 2005 of the lower court. Said orders are AFFIRMED with
the following MODIFICATIONS:

1) The implementation of the Writ of Possession dated 21 December 2005 is

HELD IN ABEYANCE, pending payment by petitioners to PIATCO of the
amount of Three Billion Two Million One Hundred Twenty Five Thousand
Pesos (P3,002,125,000.00), representing the proffered value of the NAIA 3
facilities;

2) Petitioners, upon the effectivity of the Writ of Possession, are authorized start
the implementation of the Ninoy Aquino International Airport Pasenger Terminal
III project by performing the acts that are essential to the operation of the said
International Airport Passenger Terminal project;

3) RTC Branch 117 is hereby directed, within sixty (60) days from finality of this
Decision, to determine the just compensation to be paid to PIATCO by the
Government.

The Order dated 7 January 2005 is AFFIRMED in all respects subject to the
qualification that the parties are given ten (10) days from finality of this Decision to file, if
they so choose, objections to the appointment of the commissioners decreed therein.

The Temporary Restraining Order dated 14 January 2005 is hereby LIFTED.

No pronouncement as to costs.

SO ORDERED.

[42]
See Section 10, Implementing Rules to Rep. Act No. 8974. The replacement cost
method is generally defined as "the amount necessary to replace the
improvements/structures, based on the current market prices for materials, equipment,
labor, contractor's profit and overhead, and all other attendant costs associated with the
acquisition and installation in place of the affected improvements/structures."

[43]
The replacement cost method is generally defined as "the amount necessary to
replace the improvements/structures, based on the current market prices for materials,
equipment, labor, contractor's profit and overhead, and all other attendant costs
associated with the acquisition and installation in place of the affected
improvements/structures." Ibid.
[46]
"In the event that the owner of the property contests the implementing agency's
proffered value, the court shall determine the just compensation to be paid the owner
within sixty (60) days from the date of filing of the expropriation case." See Section 4, id.

[58]
"In exercising this power, petitioner intended to acquire not only physical possession
but also the legal right to possess and ultimately to own the subject property. Hence, its
mere physical entry and occupation of the property fall short of the taking of title, which
includes all the rights that may be exercised by an owner over the subject property."
Republic v. Tagle, 359 Phil. 892, 902 (1998).
[64]
The Court in Republic v. Lim however recognized the exceptional circumstances in
that case, wherein the government had not paid just compensation in the 57 years that
had passed since the expropriation proceedings were terminated. The general rule, as
stated in Republic, remained that "non-payment of just compensation (in expropriation
proceedings) does not entitle the private landowners to recover possession of the
expropriated lots."Id.

[65]
Republic v. Lim, supra note 60. The 5 year period set in Lim was based on Section 6,
Rule 39 of the Rules of Court, which sets a 5 year period within which a final and
executory judgment or order may be executed on motion.Id.
[67]
Section 11 of the Implementing Rules does allow the implementing government
agency to engage the services of government financing institutions or private appraisers
duly accredited by those institutions to undertake the appraisal of the property, including
the land and/or improvements and structures. Yet the engagement of these appraisers
at the election of the Government is clearly different from the appointment by the trial
court of commissioners. The differences extend beyond merely the selecting authority.
The engagement of appraisers under Section 11 primarily occurs before the filing of the
expropriation complaint, when the Government is obliged to determine the current
relevant zonal valuation of the land to be expropriated, the valuation of the structures
and improvements using the replacement cost method, or the proffered value of the
property for expropriation, all for the purpose of making the initial payment necessary for
the writ of possession under Section 4 of Rep. Act No. 8974. This initial determination of
the amount is generally made by the Government, and not by the courts, and the
engagement of appraisers is attuned for such purpose. However, if the Government
engages these appraisers after the initial payment has been made to the property
owner, for the express purpose of making the final determination of just compensation,
there is no rule that binds the trial court to the findings of these appraisers. Neither are
these appraisers obliged to receive evidence submitted by the parties, unlike the
commissioners, who are expressly authorized to do so under Section 6, Rule 67.

SEPARATE OPINION

PUNO, J.:

I join the exhaustive Dissent of Mr. Justice Corona. In addition, I proffer the following
thoughts:

Agan case did not preclude

right of State to expropriate

The majority opinion took excruciating pains to reconcile our Decision in Agan and the
inherent right of the State to expropriate private property. With due respect, the effort is
strained and unnecessary for there nothing in Aganwhere it can be deduced that the
right of the State to expropriate the subject property has been impaired or diminished.
In Agan, we simply held:

x x x

This Court, however, is not unmindful of the reality that the structures comprising the
NAIA IPT III facility are almost complete and that funds have been spent by PIATCO in
their construction. For the government to take over the said facility, it has to compensate
respondent PIATCO as builder of the said structures. The compensation must be just
and in accordance with law and equity for the government cannot unjustly enrich itself at
the expense of PIATCO and its investors.
Agan involved solely the issue of the validity of THE PIATCO contracts. After striking
down the contracts as void, we ruled that the State must pay just compensation to
PIATCO before it could exercise the right to take over considering the undeniable fact
that the latter spent a considerable sum of money to build the structures comprising the
NAIA IPT III. The Court, however, did not spell out a rigid formula for just compensation
to be paid to PIATCO except to say that it must be according to law and equity. The
Court's language was carefully crafted to give the trial court sufficient flexibility in
determining just compensation considering the exchange of charges and
countercharges that the cost in building the said structures was unreasonably bloated. It
ought to be stressed again that in Agan, we did not rule that the State cannot
expropriate the said structures. Necessarily, we did not also set the procedure on how
the expropriation proceedings should be conducted if the State would opt to expropriate
said structures. We need not, therefore, strain in attempting to square our ruling
in Agan with our ruling in the case at bar. If at all, Agan will later be relevant in fixing
just compensation but not in determining which procedure to follow in the expropriation
of NAIA IPT III.

II

R.A. No. 8974 cannot

amend Rule 67

Article VIII, sec. 5 of the 1987 Constitution gave the Supreme Court the following
powers:

x x x

(5) Promulgate rules concerning the protection and enforcement of constitutional rights,
pleading, practice, and procedure in all courts, the admission to the practice of law, the
Integrated Bar, and legal assistance to the underprivileged. Such rules shall provide a
simplified and inexpensive procedure for the speedy disposition of cases, shall be
uniform for all courts of the same grade, and shall not diminish, increase, or modify
substantive rights. Rules of procedure of special courts and quasi-judicial bodies shall
remain effective unless disapproved by the Supreme Court.
In Echegaray v. Secretary of Justice [1] we emphasized that the 1987 Constitution
strengthened the rule making power of this Court, thus:

The 1987 Constitution molded an even stronger and more independent judiciary. Among
others, it enhanced the rule making power of this Court. x x x
The rule making power of this Court was expanded. This Court for the first time was
given the power to promulgate rules concerning the protection and enforcement of
constitutional rights. x x x But most importantly, the 1987 Constitution took away
the power of Congress to repeal, alter, or supplement rules concerning pleading,
practice and procedure. In fine, the power to promulgate rules of pleading,
practice and procedure is no longer shared by this Court with Congress x x x.
Undoubtedly, Rule 67 is the rule this Court promulgated to govern the proceedings in
expropriation cases filed in court. It has been the undeviating rule for quite a length of
time. Following Article VIII, section 5(5) of the 1987 Constitution and
the Echegaray jurisprudence, Rule 67 cannot be repealed or amended by Congress.
This prohibition against non- repeal or non-amendment refers to any part of Rule 67 for
Rule 67 is pure procedural law. Consequently, the Court should not chop Rule 67 into
pieces and hold that some can be changed by Congress but others can be changed.
The stance will dilute the rule making power of this Court which can not be allowed for it
will weaken its institutional independence.

III

On December 12, 2005, the Solicitor General filed a Supplemental Manifestation and
Motion. The Solicitor General informed the Court about an Order dated December 2,
2005 of the High Court of Justice, Queen's Bench Division, London which reads:

Claim No.: HT-05-269

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
MR. JUSTICE RAMSEY

BETWEEN:

TAKENAKA CORPORATION (PHILIPPINE BRANCH)

First Claimant

ASAHIKOSAN CORPORATION
Second Claimant

-vs.-
PHILIPPINE INTERNATIONAL AIR TERMINALS CO., INC.
Defendant

_______________________________

ORDER DATED 2 DECEMBER 2005

_______________________________

UPON Judgment in default of Defence having been entered on 28 November 2005.

AND UPON READING the Application Notice of the Claimants dated 28 November
2005 and the evidence referred to in Part C.

AND UPON HEARING the solicitors for the Claimants and the solicitors for the
Defendant appearing.

IT IS ORDERED THAT:
1. Judgment be entered for the First Claimant in the sum of 21,688,012.18 United
States dollars, together with interest in the sum of 6,052,805.83 United State dollars.

2. Judgment be entered for the Second Claimant in the sum of 30,319,284.36

United States dollars, together with interest in the sum of 5,442,628.26 United Stats
dollars.

3. The Defendant do pay the Claimants' costs in the action, to be subject to detailed
assessment if not agreed.
DATED this 2 day of December 2005.
To be sure, the said Order is not yet final. Be that as it may, the Court cannot turn a
blind eye to this new wrinkle of the case at bar. It is of judicial notice that
despite Agan, the subject case has reached the international arbitral tribunals where
the government and the private respondent have filed charges and countercharges.
There is evident need to avoid the issues pestering the parties from further multiplying
and for new proceedings to be started in other courts, lest public interest suffer further
irretrievable prejudice. Towards this end, it is respectfully submitted that the Court
should exercise its power to compel the parties to interplead pursuant to Rule 62 and
invoke the need for orderly administration of justice. The parties may be given
reasonable time to amend their pleadings in the trial court.
IN VIEW WHEREOF, I join the Opinion of Mr. Justice Corona except the part calling for
the inhibition of the respondent judge. The issues resolved by the respondent judge are
not the run of the mill variety. Indeed, their novelty and complexity have divided even
the members of this Court. There may have been lapses by the respondent judge but
they do not bespeak of a biased predisposition.

[1]
361 Phil. 76 (1999).

SEPARATE OPINION

CARPIO, J.:

I concur in the result of the majority opinion.

Congress has no power to amend or repeal rules of procedure adopted by the Supreme
Court.[1] However, Congress can enact laws on substantive matters which are the
subject of court procedures. Thus, Congress can prescribe the initial or minimum
amount for just compensation in expropriation cases, and require immediate payment of
such initial or minimum amount as condition for the immediate takeover of the property
by the government. The rules of procedure, like Rule 67 of the Rules of Court, must
adjust automatically to such new laws on substantive matters.

Section 4 of Republic Act No. 8974, mandating immediate payment to the property
owner of the full zonal or proffered value prior to takeover by the government, is a
substantive requirement in expropriation cases. Thus, Section 4 must apply to all
expropriation cases under RA No. 8974 involving the acquisition of real property, like the
NAIA Terminal III, for "national government projects."

Even assuming, for the sake of argument, that Section 4 of RA 8974 is not applicable to
the expropriation of NAIA Terminal III, the Court must still apply the substantive concept
in Section 4 of RA 8974 to expropriation proceedings under Rule 67 to insure equal
protection of the law to property owners. [2] There is no substantial reason to discriminate
against property owners in expropriation cases under Rule 67. Under RA 8974, when
private property is expropriated for a national government project, the government must
first pay the zonal or proffered value to the property owner before the government can
take over the property. In the present case, private property is expropriated for an
admittedly national government project. Thus, the Court must extend the substantive
benefits in Section 4 of RA 8974 to expropriation cases under Rule 67 to prevent denial
of the equal protection of the law.
Accordingly, I join in the result of the majority opinion.

[1]
Section 5(5), Article VIII, 1987 Constitution; Echegaray v. Secretary of Justice, 361
Phil. 76 (1999).
[2]
Section 1, Article III, 1987 Constitution.

DISSENTING OPINION

CORONA, J.:

The 1987 Constitution molded an even stronger and more independent judiciary.
Among others, it enhanced the rule making power of this Court. x x x

The rule making power of this Court was expanded. This Court for the first time was
given the power to promulgate rules concerning the protection and enforcement of
constitutional rights. x x x But most importantly, the 1987 Constitution took away
the power of Congress to repeal, alter, or supplement rules concerning pleading,
practice and procedure. In fine, the power to promulgate rules of pleading, practice
and procedure is no longer shared by this Court with Congress x x x. (emphasis
supplied)

Echegaray v. Secretary of Justice, 361 Phil. 76 (1999)

--- ---

Senator [Miriam] Santiago. Mr. President, will the gentleman yield for clarificatory
interpellation considering that I support the bill?

xxxxxxxxx

x x x I would now like to proceed with the clarificatory questions. I would like to go
through the pages chronologically. I will refer to Section 4 on page 2 of [Senate Bill No.
2038]. This is the Section which sets out the procedures for acquisition of land or
other real property, including expropriation.

We all know in the legal profession that expropriation proceedings are covered by Rule
67 of the Rules of Court. I think it is self-evident that Section 4 seeks to revise Rule
67 of the Rules of Court.

x x x Is this section intended to amend Rules of Procedure promulgated by the

Supreme Court? x x x

Senator [Renato] Cayetano. x x x

Yes, Mr. President, to a certain extent, Section 4 would amend the provisions of the
Rules of Court vis--vis expropriation x x x.

xxxxxxxxx

x x x Section 4 of this bill x x x effectively amends certain portions of the Rules of

Court on expropriation.

Senate deliberations on July 25, 2000 on Senate Bill (SB) No. 2038 which later
became SB No. 2117. SB No. 2117 was consolidated with House Bill No. 1422 and
enacted by Congress as RA 8974.
This case involves the exercise by the national government of the power of eminent
domain over the Ninoy Aquino International Airport International Passenger Terminal III
(NAIA IPT3). From the start, there was never any doubt about the Republic's position to
exercise the power of eminent domain. The discussions within the Court focused on
which procedure shall govern the determination of the just compensation due to
PIATCO for the NAIA IPT3 facilities whether it would be Rule 67 of the Rules of Court
or RA 8974.

The majority ruled that RA 8974 should apply. It ordered the national government and its
co-petitioners to immediately pay the just compensation for NAIA IPT3 before taking
over the facility. In so doing, the majority may have unwittingly further delayed, if not
virtually foreclosed, the expropriation of NAIA IPT3.

I submit it erroneously allowed the procedure set forth in an unconstitutional law.

The majority allowed Congress to encroach upon the rule-making power [1] which the
Constitution has reserved exclusively to this Court. And it may have created another
white elephant as a result.

Hence, I respectfully dissent.

Before us is a petition for certiorari and prohibition with urgent prayer for preliminary
injunction and temporary restraining order filed by the Republic of the Philippines
(Republic), the Department of Transportation and Communications (DOTC) and the
Manila International Airport Authority (MIAA). The petition seeks to nullify and set aside
the January 4, 2005, January 7, 2005 and January 10, 2005 orders of the public
respondent, Hon. Henrick F. Gingoyon, presiding judge of the Regional Trial Court of
Pasay City, Branch 117, in RTC Civil Case No. 04-0876.

The main case here is one of expropriation [2] and is an offshoot of the decision [3] and
resolution[4] of this Court in the consolidated cases of Agan v. PIATCO, Baterina v.
PIATCO and Lopez v. PIATCO. The object of the expropriation proceedings is the NAIA
IPT3.[5]

PETITIONERS' CASE

The actual construction and development of the NAIA IPT3 were undertaken by
PIATCO as contractor of a build-operate-transfer project [6] pursuant to the following
contracts: (1) Concession Agreement signed on July 12, 1997; (2) Amended and
Restated Concession Agreement (ARCA) dated November 26, 1998; (3) First
Supplement to the ARCA dated August 27, 1999; (4) Second Supplement to the ARCA
dated September 4, 2000; and (5) Third Supplement to the ARCA dated June 22, 2001
[collectively, the PIATCO Contracts].[7]

At the end of a 25-year concession, PIATCO will transfer the operation of the terminal to
the MIAA.[8] PIATCO commenced but did not complete the construction of NAIA IPT3
because of certain developments which will be taken up in detail later.

NAIA IPT3 stands on a parcel of land owned by the Bases Conversion Development
Authority (BCDA), an agency of the Republic. [9]

By way of a brief background, this Court ruled in Agan that in view of the absence of the
required financial capacity of PIATCO's predecessor, the Paircargo Consortium, [10] the
award to it by the Prequalification Bids and Awards Committee (PBAC) of the contract
for the construction, operation and maintenance of the NAIA IPT3 was null and void.
[11]
Moreover, the 1997 Concession Agreement was nullified for being a substantially
different agreement from the contract bidded upon. It also contained a provision
constituting a direct government guarantee which was expressly prohibited by RA 6957
or the Build-Operate-Transfer (B-O-T) Law and its implementing rules. The 1999 ARCA
and its supplements, being mere accessory contracts, were all similarly voided.

After invalidating all the PIATCO Contracts, the Court declared in a resolution dated
January 21, 2004 (2004 resolution):

[that this] Court, however, is not unmindful of the reality that the structures comprising
the NAIA [IPT3] facility are almost complete and that funds have been spent by PIATCO
in their construction. For the government to take over the facility, it has to compensate
respondent PIATCO as builder of the said structures. The compensation must be just
and in accordance with law and equity for the government can not unjustly enrich itself
at the expense of PIATCO and its investors. [12] (emphasis supplied)
More than a year later, however, the Republic still had not moved any closer to opening
and operating a modern international airport. Petitioners allegedly exerted efforts,
unfortunately to no avail, to negotiate with PIATCO and its foreign stockholder and
lender, Fraport AG Frankfurt Airport Services Worldwide (Fraport), for the resolution of
the stalemate. Petitioners claimed that their request for a "walk-through" to arrive at a
preliminary determination of the safety and structural integrity of the terminal as well as
their appeal for the submission of construction plans and related documents were
denied.

On the ground that, under the Constitution, (1) private property can be taken for public
use under certain conditions and (2) the State has the inherent power of eminent
domain, the Republic resorted to an action for expropriation on December 21, 2004. [13]

Upon filing the complaint for expropriation, petitioners made a cash deposit of
P3,002,125,000 (NAIA IPT3's assessed value for taxation purposes) at the Baclaran
Branch of the Land Bank of the Philippines (LBP-Baclaran). The amount, roughly
equivalent to US$ 53 million, was subject to the orders of the trial court. A writ of
possession was thereafter issued, enabling petitioner to gain its first access to the
terminal[14] after the promulgation of Agan.With the writ, petitioners entered and took
possession of the NAIA IPT3.[15]

Meanwhile, the sheriff was not able to serve summons at the indicated address of
PIATCO since it apparently no longer held office there. [16] Petitioners claim that, as of
January 3, 2005, the sheriff still had been unable to serve summons on PIATCO. [17]

On January 4, 2005, respondent judge issued the first assailed order:

In view of the foregoing, this court hereby issues the following orders to supplement its
Order dated 21 December 2004 and the writ of possession issued on the same date:

(a) The Land Bank of the Philippines, Baclaran Branch, is hereby directed to
immediately, upon receipt of this Order, release the amount of US$62,343,175.77 that
plaintiffs specifically made available for the purpose of expropriation, to and in favor of
PIATCO. This amount shall be deducted from the amount of just compensation due
PIATCO that shall be determined by this court pursuant to Section 4 of R.A. No. 8974.

(b) The plaintiffs are hereby directed to submit to this court a Certificate of Availability of
Funds signed by authorized officials to cover the payment of just compensation.

(c) Pending expropriation proceedings and full payment of just compensation to

PIATCO, the plaintiffs are directed to maintain, preserve and safeguard NAIA IPT3, or
perform such acts or activities in preparation for their direct operation of NAIA IPT3.
Plaintiffs, however, are prohibited from performing acts of ownership like awarding
concessions or leasing any part of NAIA IPT3 to other parties.

SO ORDERED.[18]
Petitioners filed an urgent motion for reconsideration on January 5, 2005, asserting that
the amount ordered released by the court (approximately US$ 62.3+ million) was
excessive. The LBP-Baclaran had certified that the Republic had a total deposit of
approximately US$ 62.3+[19] million with it. Apparently, it was this whole amount the trial
court wanted released to PIATCO.

On the other hand, petitioner Republic objected to the order of the court because, as
could be allegedly concluded from the documents it filed with the expropriation
complaint, since there were no comparable values for the expropriated property,
"reasonable basis" should determine what the provisional value [20] of NAIA IPT3 ought to
be. Using "reasonable basis" as a guide, the Republic arrived at a provisional value of
P3,002,125,000 or about US$ 53 million which actually represented the assessed value
of the property for taxation purposes. [21] The amount Judge Gingoyon wanted to be
released immediately to PIATCO was about US$ 9 million more or US$ 63.2+ million.
Hence, the Republic's objection on the ground of excessiveness.

Petitioners contended that it was likewise erroneous for the trial court to order the
release of the deposit motu propio (that is, without any motion therefor) since just
compensation was yet undetermined and the deposit itself was being claimed by other
parties.[22] According to petitioners, since they had not been granted "full and relevant
access to the NAIA IPT3," it was impossible for them to fully assess its safety, structural
integrity and real value after just one perfunctory guided tour of the facility. [23] As there
was no opportunity to thoroughly inspect the property being expropriated, the
expenditure of public funds could not be legally justified. [24] Hence, it was error for the
trial court to order the release of any part of the Republic's deposits in LBP-Baclaran to
PIATCO.

Petitioners also questioned why the court a quo applied RA 8974[25] instead of Rule
67[26] of the 1997 Rules of Court to the expropriation proceedings. They argued that the
title of RA 8974 itself defined its limited application: only for the acquisition of a right of
way, site or location for a national infrastructure project. NAIA IPT3 was not a right-of-
way, site or location for any national government infrastructure project. It was the
national government infrastructure project itself. [27]

Furthermore, petitioners considered the trial court's prohibition against "acts of

ownership like awarding concessions or leasing any part of NAIA IPT3 to other parties"
as, in effect, an injunction or restraining order against a government infrastructure
project and therefore a violation of RA 8975 [28] which prohibits the issuance of an
injunction (except by the Supreme Court) against government infrastructure projects.
[29]
In total disregard of due process, the injunction was issued by the trial court without
notice and hearing.[30] Petitioners argued that preventing them from exercising the rights
of a beneficial owner of NAIA IPT3 would negate the very purpose for which the writ of
possession was issued[31] and the expropriation itself was being pursued.

Respondent judge, finding that petitioners had the legal right to expropriate NAIA IPT3,
issued the second assailed order on January 7, 2005.

WHEREFORE, finding plaintiffs to have the right to expropriate NAIA IPT3, this court
hereby orders:
1. The EXPROPRIATION of NAIA IPT3, which is particularly described in the Writ of
Possession issued by this court on December 21, 2004;

2. The appointment of DR. FIORELLO R. ESTUAR, SOFRONIO B. URSAL and

ANGELO I. PANGANIBAN as commissioners to ascertain and report to this court
the just compensation for the taking of NAIA IPT3. They shall appear before this
court within three (3) days from receipt hereof to take and subscribe an oath that they
will faithfully perform their duties as commissioners under Section 6, Rule 67 of the
1997 Rules of Civil Procedure.

a. The first session of the hearing to be held by the aforesaid commissioners

shall be on January 14, 2005 at 10:00 A.M. at the NAIA International Passenger
Terminal 3, Villamor Airbase, Pasay City.

b. Thereafter, the commissioners shall hold session at least twice a week.

c. The commissioners shall make a full and accurate report to the court of all
their proceedings on or before February 28, 2005.

d. The commissioners shall be paid reasonable fees that shall be taxed as

part of the costs of the proceedings.

SO ORDERED.[32]
On January 10, 2005, the trial court denied the urgent motion for reconsideration of its
January 4, 2005 order and petitioners' urgent motion for inhibition of respondent judge
filed on January 7, 2005.[33]

WHEREFORE, plaintiffs['] Motion for Reconsideration of the Order dated January 4,

2005, and Urgent Motion for Inhibition are DENIED.

Accordingly, except for the superfluous part of the Order prohibiting the plaintiffs from
awarding concession or leasing any part of NAIA IPT3 to other parties, the order sought
to be reconsidered stands: (1) The Land Bank of the Philippines, Baclaran Branch, must
release the sum of US$62,343,175.77 in favor of PIATCO; (2) The Plaintiffs must submit
a certificate of availability of funds; and (3) Pending expropriation proceedings and full
payment of just compensation to PIATCO, the plaintiffs are directed to maintain,
preserve and safeguard NAIA IPT3, or perform such acts or activities in preparation for
their direct operation of NAIA IPT3.

SO ORDERED.
RESPONDENT PIATCO'S VERSION OF EVENTS

On October 5, 1994, petitioners received an unsolicited offer from Asia's Emerging

Dragons Corporation (AEDC) to construct, operate and maintain a state-of-the-art
international passenger terminal under Section 4(a) of RA 6957 (the B-O-T Law),
[34]
Section 4(a) because the government did not have the funds nor the expertise to do
the same.[35] The project was considered an unsolicited proposal because it was not a
government priority project.[36]Paircargo Consortium, which eventually incorporated with
other investors under the name PIATCO, submitted a counterproposal:

to construct IPT-3 at a cost of not less than US$ 350 Million, operate such terminal at no
cost to the Government, pay Government a total of at least P17.5 Billion in annual
guaranteed payments over twenty-five (25) years and thereafter transfer title over IPT-3
to the Government for P1.00.[37]
The government, considering Paircargo Consortium's counterproposal more beneficial,
gave AEDC thirty days to match it; this, AEDC failed to do. [38] The DOTC then issued the
notice of award for the NAIA IPT3 project to PIATCO's predecessor, Paircargo
Consortium. The government, through then DOTC Secretary Arturo T. Enrile, and
PIATCO, through its President, Henry T. Go, executed the so-called PIATCO Contracts
whereby PIATCO was granted a 25-year concession to operate NAIA IPT3, after which
title was to pass on to the government.[39]

The 1997 Concession Agreement was signed during former President Fidel V. Ramos'
administration while the ARCA and the first two supplements were executed during the
tenure of former President Joseph Ejercito Estrada. [40] In January 2001, the Estrada
administration was overthrown by mass political action popularly known as EDSA
People Power II. Six months into the new administration of President Gloria Macapagal-
Arroyo, on June 22, 2001, the third supplement to the ARCA was signed. Since then,
the NAIA IPT3 project has been beset by seemingly interminable difficulties on all fronts.

According to PIATCO, long-term loans from Asian Development Bank, Kreditanstalt fr

Wiederaufbau, International Finance Corporation and Dresdner Bank could not be
drawn on because of the refusal of the government to cooperate in the fulfillment of
conditions precedent demanded by the lenders. [41] Undaunted, PIATCO nevertheless
continued the construction of NAIA IPT3 through advances from stockholders and
interim financing. It would have completed NAIA IPT3 by now had it not been for the
alleged lack of cooperation of the Macapagal-Arroyo administration and the obstacles it
allegedly put up.[42] (In her speech at the 2002 Golden Shell Export Awards at
Malacaang Palace, President Macapagal-Arroyo stated that she could not honor the
PIATCO Contracts denounced by government lawyers [43] as null and void.[44])

Furthermore, while the government defended the validity of the PIATCO Contracts in
the past, it suddenly made avolte face and joined the parties who sought their
nullification.[45] On September 17, 2002, various petitions were filed before this Court to
annul the PIATCO Contracts and prohibit the DOTC and MIAA from implementing
them.Agan was promulgated on May 5, 2003. Although this Court voided the PIATCO
Contracts because PIATCO was, among other reasons, unqualified, this Court did not
actually find private respondent to have acted fraudulently.[46]

Moreover, the Court required the government to pay PIATCO a fair and just
compensation for NAIA IPT3 as a prerequisite for any takeover of the terminal. [47]

According to PIATCO, since the nullification of the PIATCO Contracts in 2003,

petitioners have not shown any interest in the completion, opening and operation of
NAIA IPT3. Instead of directing its resources and efforts to actually take over and
operate NAIA IPT3 and to compensate PIATCO as builder of the structures, the
government allegedly prepared to develop the Diosdado Macapagal International Airport
in Clark Field, Pampanga.[48]

Contrary to petitioners' assertion that they were not being given access to NAIA IPT3,
PIATCO alleged that invitations to view and inspect the terminal were in fact extended
to them on several occasions. According to private respondent, the following were
actually able to inspect NAIA IPT3:

(a) Secretary Leandro Mendoza;

(b) Solicitor General Alfredo Benipayo;
(c) Former Executive Secretary, now Foreign Affairs
Secretary Alberto Romulo;
(d) Former MIAA General Manager Edgardo Manda;
(e) MIAA General Manager Alfonso Cusi;
(f) Former Immigration Commissioner Andrea Domingo;
(g) Congressmen Alfonso Umali Jr., Raul Villareal,
Joseph Santiago, Roberto Cajes, Corazon
Malanyaon, Josephine Ramirez, Charity Leviste,
Jacinto Paras, Prospero Pichay, Prospero Nograles,
Willie Villarama, Perpetuo Ylagan, Eduardo Zialcita,
Carmen Cari, Jose Solis, Consuelo Dy, Aleta Suarez,
Rodolfo Bacani, Aurelio Umali, Augusto Syjuco Jr.,
Generoso Tulagan and Harlin Cast Abayon;
(h) Senators Ramon Revilla Jr., Alfredo Lim, Juan Ponce
Enrile, Edgardo Angara, Panfilo Lacson and Tessie
Aquino-Oreta.[49]

PIATCO is convinced that the government's intentions vis--vis NAIA IPT3 are suspect.
"They did not negotiate. They dictated." [50] The government, with police assistance,
allegedly seized control of NAIA IPT3 late in the afternoon of December 21, 2004 on the
basis of a writ of possession issued by the trial court after no more than a unilateral
assessment of the value of the facility.[51]

THE ISSUES

In fine, petitioners seek the resolution of the following issues:

I.
WHETHER OR NOT RESPONDENT JUDGE COMMITTED GRAVE ABUSE OF
DISCRETION AND ACTED IN EXCESS OF JURISDICTION WHEN HE HELD THAT
RA 8974, NOT RULE 67 OF THE RULES OF COURT, IS APPLICABLE IN THE
EXPROPRIATION PROCEEDINGS.

II.

WHETHER OR NOT RESPONDENT JUDGE COMMITTED GRAVE ABUSE OF

DISCRETION AND ACTED IN EXCESS OF HIS JURISDICTION WHEN HE MOTU
PROPIO ISSUED THE ORDER DIRECTING THE DEPOSITARY BANK TO
IMMEDIATELY RELEASE PETITIONERS' DEPOSIT IN THE AMOUNT OF US$
62,343,175.77 WHEN NAIA IPT3'S ASSESSED VALUE FOR THE PURPOSE OF THE
ISSUANCE OF THE WRIT AS ALLEGED IN THE COMPLAINT FOR EXPROPRIATION
IS ONLY P 3,002,125,000 (APPROXIMATELY US$ 53 MILLION).
III.

WHETHER OR NOT RESPONDENT JUDGE COMMITTED GRAVE ABUSE OF

DISCRETION AND ACTED IN EXCESS OF HIS JURISDICTION WHEN HE
PROHIBITED PETITIONERS FROM PERFORMING "ACTS OF OWNERSHIP" SUCH
AS AWARDING CONCESSIONS OR LEASING ANY PART OF NAIA IPT3 TO OTHER
PARTIES.

IV.

WHETHER OR NOT RESPONDENT JUDGE GRAVELY ERRED IN MOTU

PROPIO ISSUING THE JANUARY 7, 2005 ORDER APPOINTING THREE
COMMISSIONERS TO DETERMINE THE TERMINAL'S JUST COMPENSATION.

V.

WHETHER OR NOT RESPONDENT JUDGE GRAVELY ABUSED HIS DISCRETION IN

REFUSING TO INHIBIT HIMSELF FROM THE EXPROPRIATION CASE.
Parallel to the resolution of the foregoing issues, petitioners also sought: (1) a TRO
commanding respondent judge to cease and desist from implementing his orders dated
January 4, 2005, January 7, 2005 and January 10, 2005 in RTC Civil Case No. 04-876;
(2) the nullification of the orders dated January 4, 2005; January 7, 2005; and January
10, 2005; and (3) an order to respondent judge in his capacity as presiding judge of the
Regional Trial Court, Branch 117, Pasay City to inhibit himself from further actions on
the subject case.

The Court issued the TRO, as prayed for, on January 14, 2005. [52]

I shall discuss the issues in seriatim.

THE CONSTITUTIONAL REQUIREMENT OF PUBLIC USE

This case essentially pertains to the exercise by the Republic of its inherent power of
eminent domain or the right of the sovereign authority to acquire private property for
public use upon payment of just compensation. It refers to the right to take or reassert
dominion over property within the state for public use or to meet a public exigency.
[53]
The constitutional requirement of due process lays down a rule of procedure to be
observed in the exercise of such power.[54] This rule of procedure is more familiarly
known as expropriation,[55] a term used interchangeably with eminent domain.

The exercise of eminent domain is circumscribed by two limitations in the Constitution:

(1) the taking must be for public use and (2) just compensation must be paid to the
owner of the private property.[56] These twin proscriptions are grounded on the necessity
to achieve a balance between the interests of the State, on the one hand, and the
private rights of the individual, on the other hand, by effectively restraining the former
and affording protection to the latter.[57]

"Public use" as a limitation to the power of eminent domain is not defined in the
Constitution. It is thus considered in its general notion of meeting a public need or a
public exigency.[58] It is not restricted to clear cases of "use by the public" [59] but
embraces whatever may be beneficially employed for the community.[60] The concept
now covers uses which, while not directly available to the public, redound to their
indirect advantage or benefit. [61] It is generally accepted that it is just as broad as "public
welfare."[62]

Viewed in this light, the "public use" dimension of a modern international airport need
not be belabored. For it is inextricably linked to air transport which, in turn, is vital to the
economy, to business and to tourism. It enhances the movement of goods, services and
people across international borders. It serves as the country's main gateway to the
world and as its major link to its neighbors in the global village. Hardly anyone can
doubt the public need for a modern international airport and the immeasurable boost it
will give the country's economy.[63]

WHY EXPROPRIATE NAIA IPT3 IN THE FIRST PLACE?

In Manotok v. National Housing Authority,[64] we ruled that the exercise of the power of
eminent domain should be based on necessity. Is there such a necessity for the
expropriation of NAIA IPT3?

First, in today's global market governed by the hard-hearted rules of business

dominance and competitiveness, time has become a precious resource and a critical
determinant of either failure or success. Indeed, not only time but also resources are at
stake in the expropriation of NAIA IPT3, an infrastructure project that needs only to be
completed to become fully operational, instead of building an entirely new facility from
scratch.

Second, NAIA IPT3 sits on 65 hectares (161 acres) of prime government land located in
one of the most expensive commercial areas in the country. But that valuable land will
be completely laid to waste if NAIA IPT3 does not become operational, either because
government does not allow it to operate or petitioners decide to build, operate or
develop an entirely new international airport. In either case, both sides will only succeed
in stalemating each other and NAIA IPT3 will be absolutely of no use to both petitioners
and private respondent PIATCO. The land will just lie idle and unproductive while a
white elephant abjectly sits on it. A repeat of the mothballed Bataan Nuclear Power
Plant? Certainly. On the other hand, will not expropriating NAIA IPT3, putting it to good
use and paying off its owner(s) redound to the benefit of the entire country and all
parties concerned?
Third, there is no denying that a project like NAIA IPT3 is long overdue, such that the
prestige of the entire country before the international community is at stake. Politics and
narrow vested interests have a peculiar way of extirpating the most salutary and
beneficial ventures in this country. The undertaking appears headed for the same fate
unless this Court intervenes and exercises its judicial discretion to settle the destructive
impasse. Shall this Court watch in silence while the parties claw at each other before
international arbitration bodies?

The majority opinion effectively disregarded this necessity.

PUBLIC USE AND JUST COMPENSATION

None of the parties actually questioned the public purpose of the expropriation not
the petitioners of course, not the respondent judge, not even private respondent
PIATCO. In fact, petitioners exerted special effort to show that the taking was intended
to encourage and promote international air traffic as well as to develop an airport with
facilities, accommodations and services meeting international standards. As for
PIATCO, the records do not show that it questioned the public purpose of the
expropriation at all. The respondent judge, for his part, recognized that the NAIA IPT3
was undoubtedly a structure for a well-defined public purpose, being of critical
importance to the Philippine economy in terms of the carriage of goods, services and
people.[65] Thus, there was never any question that the expropriation of NAIA IPT3 was
for a public purpose.

The policy underlying the constitutional provision for eminent domain is to make the
private owner "whole" after his property is taken. [66] Thus, private property cannot be
taken in any way for public use without adequate compensation. [67]

Just compensation is the just and complete equivalent of the loss which the owner of
the thing expropriated has to suffer by reason of the expropriation. [68] The compensation
given to the owner is just if he receives for his property a sum equivalent to its market
value at the time of the taking. [69] "Market value" is the price fixed by the buyer and the
seller in the open market in the usual and ordinary course of legal trade and
competition.[70]

RA 8974 OR RULE 67 OF THE RULES OF COURT?

At bottom, the bone of contention is the procedure that should govern the determination
and payment of just compensation, i.e., whether it should be that under RA 8974 [71] or
that under Rule 67 of the Rules of Court.

Under the relevant provisions of Rule 67 of the Rules of Court, possession is given to
the condemnor and just compensation is determined in accordance with the following
procedures:

xxx xxx xxx

SECTION 2. Entry of plaintiff upon depositing value with authorized government
depositary. Upon the filing of the complaint or at any time thereafter and after due
notice to the defendant, the plaintiff shall have the right to take or enter upon
the possession of the real property involved if he deposits with the authorized
government depositary an amount equivalent to the assessed value of the
property for purposes of taxation to be held by such bank subject to the orders of the
court. x x x

xxx xxx xxx

After such deposit is made the court shall order the sheriff or other proper officer to
forthwith place the plaintiff in possession of the property involved and promptly submit a
report thereof to the court with service of copies to the parties.

SECTION 3. Defenses and objections.

xxx xxx xxx

If a defendant has any objection to the filing of or the allegations in the complaint, or any
objection or defense to the taking of his property, he shall serve his answer within the
time stated in the summons. The answer shall specifically designate or identify the
property in which he claims to have an interest, state the nature and extent of the
interest claimed, and adduce all his objections and defenses to the taking of his
property. x x x

x x x However, at the trial of the issue of just compensation, whether or not a defendant
has previously appeared or answered, he may present evidence as to the amount of the
compensation to be paid for his property, and he may share in the distribution of the
award.

SECTION 4. Order of expropriation. If the objections to and the defenses against the
right of the plaintiff to expropriate the property are overruled, or when no party appears
to defend as required by this Rule, the court may issue an order of expropriation
declaring that the plaintiff has a lawful right to take the property sought to be
expropriated, for the public use or purpose described in the complaint, upon the
payment of just compensation to be determined as of the date of the taking of the
property or the filing of the complaint, whichever came first.

xxx xxx xxx

SECTION 5. Ascertainment of compensation. Upon the rendition of the order of

expropriation, the court shall appoint not more than three (3) competent and
disinterested persons as commissioners to ascertain and report to the court the just
compensation for the property sought to be taken. The order of appointment shall
designate the time and place of the first session of the hearing to be held by the
commissioners and specify the time within which their report shall be submitted to the
court.

Copies of the order shall be served on the parties. Objections to the appointment of any
of the commissioners shall be filed with the court within ten (10) days from service, and
shall be resolved within thirty (30) days after all the commissioners shall have received
copies of the objections. (emphasis supplied)

On the other hand, RA 8974 provides for the observance of the following guidelines:

xxx xxx xxx

SECTION 4. Guidelines for Expropriation Proceedings. Whenever it is necessary to

acquire real property for the right-of-way, site or location for any national government
infrastructure project through expropriation, the appropriate implementing agency shall
initiate the expropriation proceedings before the proper court under the following
guidelines:

(a) Upon the filing of the complaint, and after due notice to the defendant, the
implementing agency shall immediately pay the owner of the property the amount
equivalent to the sum of (1) one hundred percent (100%) of the value of the
property based on the current relevant zonal valuation of the Bureau of Internal
Revenue (BIR); and (2) the value of the improvements and/or structures as
determined under Section 7 hereof;

xxx xxx xxx

(c) In case the completion of a government infrastructure project is of utmost urgency
and importance, and there is no existing valuation of the area concerned, the
implementing agency shall immediately pay the owner of the property its proffered
value taking into consideration the standards prescribed in Section 5 hereof.

Upon compliance with the guidelines abovementioned, the court shall immediately issue
to the implementing agency an order to take possession of the property and start the
implementation of the project.

Before the court can issue a Writ of Possession, the implementing agency shall present
to the court a certificate of availability of funds from the proper official concerned.

In the event that the owner of the property contests the implementing agency's proffered
value, the court shall determine the just compensation to be paid the owner within sixty
(60) days from the date of filing of the expropriation case. When the decision of the
court becomes final and executory, the implementing agency shall pay the owner the
difference between the amount already paid and the just compensation as determined
by the court. (emphasis supplied)
To implement the above "guidelines", the Implementing Rules and Regulations (IRR) of
RA 8974 provide:

xxx xxx xxx

SECTION 8. Expropriation. If the owner of a private property needed by the
government implementing agency does not agree to convey his property to the
government by any of the foregoing modes of acquiring and/or transferring ownership of
the property, then the government shall exercise its right of eminent domain by filing a
complaint with the proper Court for the expropriation of the private property.

The verified complaint shall state with certainty the right and purpose of expropriation,
describe the real or personal property sought to be expropriated, and join as defendants
all persons owning or claiming to own, or occupying, any part thereof or interest therein,
showing as far as practicable, the interest of each defendant separately. If the title of
any property sought to be condemned appears to be in the name of the Republic of the
Philippines, although occupied by private individuals, or if the title is otherwise obscure
or doubtful so that the plaintiff cannot with accuracy or certainty specify the real owners,
averment to the effect may be made in the complaint.

Pursuant to Section 4 of the Act, the Implementing Agency shall comply with the
following guidelines:

a. Upon the filing of the complaint, and after due notice to the defendant/property
owner, the Implementing Agency shall immediately pay the property owner the
amount equivalent to the sum of (1) one hundred percent (100%) of the value of
the property based on the current zonal valuation of the BIR; and (2) the value of
the improvements and/or structures as determined by the Implementing Agency,
in accordance with Section 10 hereof, pursuant to Section 7 of the Act.

xxx xxx xxx

c. In case the completion of a national government project is of utmost urgency and

importance, and there is no existing valuation of the area concerned, the Implementing
Agency shall immediately pay the owner of the property its proffered value taking into
consideration the standards stated in the second paragraph of Section 8 hereof,
pursuant to Section 5 of the Act.

xxx xxx xxx

SECTION 10. Valuation of Improvements and/or Structures. Pursuant to Section 7 of

the Act, the Implementing Agency shall determine the valuation of the improvements
and/or structures on the land to be acquired using the replacement cost method. The
replacement cost of the improvements/structures is defined as the amount necessary to
replace the improvements/structures, based on the current market prices for materials,
equipment, labor, contractor's profit and overhead, and all other attendant costs
associated with the acquisition and installation in place of the affected
improvements/structures. In the valuation of the affected improvements/structures, the
Implementing Agency shall consider, among other things, the kinds and quantities of
materials/equipment used, the location, configuration and other physical features of the
properties, and prevailing construction prices.

SECTION 11. Engagement of Appraisers. The Implementing Agency may, if it deems

necessary, engage the services of government financing institutions and/or private
appraisers duly accredited by the said institutions to undertake the appraisal of the
property, i.e., the land and/or improvements/structures, and to determine its fair market
value. The Implementing Agency concerned shall consider the recommendations of the
said appraisers in deciding on the purchase price of or just compensation for the
property.

SECTION 12. Writ of Possession. Pursuant to Section 4 of the Act, upon compliance
with the guidelines stated in Section 8 of this IRR, the court shall immediately issue to
the Implementing Agency an order to take possession of the property and start the
implementation of the project.

Before the Court can issue a Writ of Possession, however, the Implementing Agency
shall present to the Court ofCertificate of Availability of Funds signed by authorized
officials to cover the payment to be made to the property owner.

After the Implementing Agency has complied with the foregoing requirements, the Court
shall immediately issue the Writ of Possession to the complainant Implementing Agency.

SECTION 13. Payment of Compensation. Should the property owner concerned

contest the proffered value of the Implementing Agency, the Court shall determine the
just compensation to be paid to the owner within sixty (60) days from the date of the
filling of the expropriation case, considering the standards set out in Sections 8, 9 and
10 hereof, pursuant to Section 5 of the Act. When the decision of the Court becomes
final and executory, the Implementing Agency shall pay the owner the difference
between the amount already paid as provided in Section 8 (a) hereof and the just
compensation determined by the court, pursuant to Section 4 of the Act.

SECTION 14. Trial Proceedings. Within the sixty (60)-day period prescribed by the
Act, all matters regarding defenses and objections to the complaint, issues on uncertain
ownership and conflicting claims, effects of appeal on the rights of the parties, and such
other incidents affecting the complaint shall be resolved under the provisions on
expropriation of Rule 67 of the Rules of Court. (emphasis supplied)
Petitioners assert that the provisions on expropriation of Rule 67 of the Rules of Court
should apply. The trial court and respondent PIATCO opine that it should be RA 8974.

Rule 67 and RA 8974 differ in the manner of compensating the owner of the property
under expropriation. Under Rule 67, before the government can take possession of the
property to be expropriated, the deposit of an amount equivalent to the assessed
value of the property for taxation purposes is sufficient for the time being, that is, until
the conclusion of the court proceedings where both parties shall have proven their
claims and the court shall have made a factual determination of the price of the
property. Under RA 8974, on the other hand, immediate payment of the full zonal
value (a much bigger sum than the assessed value required by Rule 67) of the property
and improvements and/or structures as determined under Section 7 of the law is
required before the government can take possession of the property.

Petitioners maintain that the very title of RA 8974 states that it only covers the
acquisition of right of way, site or location for government infrastructure projects. Thus,
the law itself defines the limits of its application.

Obviously, according to petitioners, an airport is not a right of way because a "right of

way" refers to the right to pass through property owned by another, which is not so in
this case. Neither is it a "site or location" because "location" is the specific place or
position of a person or thing and "site" pertains to a place or location or a piece of
property set aside for a specific use. They further aver that even the bicameral
deliberations on the law reveal that the legislature never contemplated the use of this
special law for the acquisition of land for a purpose other than a right of way, site or
location for government infrastructure projects. [72]

Moreover, the provisions[73] of RA 8974 cited by respondent judge speak of "relevant

current zonal valuation of the [Bureau of Internal Revenue (BIR)]" as the amount of
deposit necessary for the issuance of a writ of possession. BIR zonal valuations are
only for parcels of land, not for airport facilities. There is no BIR zonal valuation for an
airport terminal precisely because the latter is not land.

The majority opinion ruled that RA 8974 applies in this case. It premised its conclusion
on the argument that the application of Rule 67 will violate this Court's 2004 resolution
in Agan, the alleged governing law of the case.

The ruling is basically flawed as it is grounded on a wrong premise.

It is incorrect to say that Agan constitutes the law of the case. The "law of the case"
doctrine is defined as a term applied to an established rule that, when an appellate court
passes on a question and remands the case to the lower court for further proceedings,
the question there settled becomes the law of the case on subsequent appeal. [74] Unlike
the doctrine of stare decisis, the doctrine of the law of the case operates only in the
particular case.[75]

The law of the case finds application only in the same case between the parties. This
case (which refers to the expropriation of NAIA IPT3) is irrefutably not the same
as Agan (which was about the validity of the so-called "PIATCO contracts"). Hence, the
pronouncements in Agan cannot constitute the law of the case here.

The majority opinion claims that "the staging of expropriation proceedings in this case
with the exclusive use of Rule 67 would allow for the government to take over the NAIA
3 facilities in a fashion that directly rebukes our 2004 resolution in Agan (which)
mandated that there must be first payment of just compensation before the Government
could take over the NAIA IPT3 facilities." This is very misleading.

The full text of the relevant statement of the Court in its 2004 resolution in Agan is as
follows:

This Court, however, is not unmindful of the reality that the structures comprising the
NAIA [IPT3] facility are almost complete and that funds have been spent by PIATCO in
their construction. For the government to take over the facility, it has to compensate
respondent PIATCO as builder of the said structures. The compensation must be just
and in accordance with law and equity for the government can not unjustly enrich itself
at the expense of PIATCO and its investors. (emphasis supplied)
Clearly, the resolution only requires that PIATCO be given just compensation as a
condition for any government take-over of NAIA IPT3. The just compensation should be
in accordance with law and equity. There is something seriously wrong with the
argument that RA 8974 is the only legal and equitable way to compensate PIATCO in
accordance with our 2004 resolution.

The application of Rule 67 in the expropriation proceedings of NAIA IPT3 is in

consonance with Agan. The determination and payment of just compensation pursuant
to Rule 67 are in accordance with law. Under Rule 67, PIATCO will be given FULL JUST
COMPENSATION by the government for the taking of NAIA IPT3. That is mandatory.
The Constitution itself ordains it.

Under Rule 67, there is no way the government can unjustly enrich itself at the expense
of PIATCO. Section 9 of Rule 67 ensures this by requiring the payment of interest from
the time government takes possession of the property.

Moreover, I dare say the majority opinion actually got caught up in a self-contradiction.
At first, it claimed that the 2004 resolution in Agan laid down the following directives: (1)
PIATCO must receive payment of just compensation determined in accordance with law
and equity, and (2) the government is barred from taking over NAIA IPT3 until such just
compensation is paid. It continued to argue that the 2004 resolution requires the
payment of just compensation before the takeover of NAIA IPT3 facilities. Subsequently,
however, it backtracked and stated that "the 2004 resolution does not particularize the
extent such payment must be effected before the takeover, but it actually requires at
least some degree of payment to the private owner before a writ of possession may
issue." However, neither the proffered value nor the zonal valuation under RA 8974 is
equivalent to just compensation. If the majority opinion were to pursue its argument to
its logical conclusion, no takeover can be had without payment of the just compensation
itself, not merely of a value corresponding to what it vaguely referred to as "some
degree of payment".
The requirement to pay the proffered value was a strained and belabored way of
establishing that the application of RA 8974 is in consonance with the 2004 resolution
in Agan. If the majority opinion were to be true to its pronouncement that the 2004
resolution demands payment of just compensation prior to the take over of NAIA IPT3,
then payment of the proffered value is not enough. The proffered value is definitely not
equivalent to just compensation.

The majority failed to realize that respondent judge gravely abuse his discretion when
he issued his January 10, 2005 order. Respondent judge precipitately ruled that Rule 67
of the Rules of Court and all the laws on expropriation involving infrastructure projects
had been expressly repealed by RA 8974 and its implementing rules and regulations.
Worse, respondent judge justified his conclusion by erroneously invoking a footnote
in City of Iloilo v. Legaspi[76]. His order read:

xxx xxx xxx

[Petitioners] relied solely and this court initially went along with their reliance on Rule
67 on Expropriation (an perchance of P.D. Nos. 42 and 1533) as the applicable authority
on the instant case for expropriation. But this court did not know then that
Rule [67] and all the laws on expropriation involving infrastructure projects have
been expressly repealed by R.A. No. 8974 and its Implementing Rules and
Regulations insofar as they are inconsistent with said Act. In the footnote of the
recent case of City of lloilo vs. Judge Legaspi (G.R. No. 154614, November 25,
2004), the Supreme Court recognized that:

"Section 4 of Rep. Act No. 8974 (An Act To Facilitate The Acquisition of Right-Of-Way,
Site Or Location For National Government Infrastructure Projects and For Other
Purposes) provides for the guidelines for expropriation proceedings."

Plaintiff's argument that R.A. No. 8974 is not applicable because NAIA IPT3 is "not
right-of-way, site or location" for a national infrastructure project "but the infrastructure
itself" is absurd. It is very plain to see, and this court hereby holds, that the NAIA IPT3 is
itself the very right-of-way, the site or location of the national government's infrastructure
project; it is the very right-of-way, site or location of an airport that will make them attain
their "goal of encouraging and promoting international and domestic air traffic as well as
developing an internationally acceptable airport accommodation and
[77]
service." (emphasis supplied)
Respondent judge's theory about Rule 67's supposed repeal by RA 8974 was totally
devoid of factual and legal basis. RA 8974 did not repeal Rule 67 at all. The
Constitution will not allow it. In fact, neither its repealing clause nor any of its provisions
even mentioned or referred to the Rules of Court, whether on expropriation or anything
else. But even assuming (but not conceding) that respondent judge's theory had been
based on an implied repeal, still there would have been no legal justification for it.

Settled is the rule in statutory construction that implied repeals are not favored. Thus:

The two laws must be absolutely incompatible, and a clear finding thereof must surface,
before the inference of implied repeal may be drawn. The rule is expressed in the
maxim, interpretare et concordare legibus est optimus interpretendi, i.e., every statute
must be so interpreted and brought into accord with other laws as to form a uniform
system of jurisprudence. The fundament is that the legislature should be presumed to
have known the existing laws on the subject and not have enacted conflicting statutes.
Hence, all doubts must be resolved against any implied repeal, and all efforts should be
exerted in order to harmonize and give effect to all laws on the subject. [78]
The foregoing becomes all the more significant when, as in this case, the provisions of
RA 8974 reveal no manifest intent to revoke Rule 67. In fact, Section 14 of the IRR of
RA 8974 makes an explicit reference to Rule 67 and mandates its applicability to all
matters regarding defenses and objections to the complaint, issues on uncertain
ownership and conflicting claims, effects of appeal on the rights of the parties and such
other incidents affecting the complaint. If only for this reason, respondent judge's
"repeal theory" is totally erroneous.

The footnote in City of Iloilo[79] was not in any way necessary to resolve any of the
issues in that case. Thus, it was merely part of an obiter dictum. Respondent judge
should be reminded of our pronouncement in City of Manila v. Entote[80] that a remark
made or opinion expressed by a judge in a decision upon a cause, incidentally or
collaterally, and not directly upon the question before the court, or upon a point not
necessarily involved in the determination of the cause, is obiter dictum lacking the force
of an adjudication. An obiter dictum is an opinion entirely unnecessary for the decision
of the case and is not binding as precedent. [81]

Not only was there no pronouncement from us in City of Iloilo about Rule 67's repeal by
RA 8974, we in fact applied Rule 67 in that case. The Court invoked Section 1 of Rule
67 in resolving the issue of the sufficiency in form and substance of the amended
complaint for expropriation and Section 2 of the same Rule in holding that the City of
Iloilo was not in estoppel since it simply followed the procedure that a prior hearing was
not required before a writ of possession could be issued. Indeed, the Court could not
even have applied RA 8974 in City of Iloilobecause it did not involve a project of the
national government but that of a local government unit, [82] thus requiring the application
of RA 7160 (the Local Government Code).[83]

More importantly, any talk of repeal (whether express or implied) by legislative

enactment of the rules of procedure duly promulgated by this Court goes against the
Constitution itself. The power to promulgate rules of pleading, practice and procedure
was granted by the Constitution to this Court to enhance its independence. [84] It is no
longer shared by this Court with Congress. [85] The legislature now has no power to
annul, modify or augment the Rules of Court. We expressly declared in Echegaray v.
Secretary of Justice[86] that the 1987 Constitution took away the power of Congress
to repeal, alter or supplement rules concerning pleading, practice and procedure.
[87]

The majority properly recognized that Rule 67 governs the procedure undertaken for
eminent domain. It is thus surprising when they unequivocally declared that, as a rule of
procedure, Rule 67 can be superseded by statutory enactment.

A perusal of the so-called "Guidelines for Expropriation Proceedings" provided for under
Section 4 of RA 8974 shows that the "guidelines" radically alter the rules for
expropriation under Rule 67. The majority even declared that "RA 8974 represents
a significant change from previous expropriation laws such as Rule 67...." The majority
however failed to realize that such change brought about by a legislative enactment
subverts the fundamental law and defeats the constitutional intent to strengthen the
independence of this Court.

There is no question that the appropriate standard of just compensation is a substantive

matter, not procedural. However, the manner of determining just compensation
(including how it shall be paid and under what conditions a writ of possession may be
issued) is a matter of procedure, not of substantive law.

If a rule or statute creates a right or takes away a vested right, it is substantive. If it

operates as a means of implementing an existing right, then it is procedural. [88]

The provisions of Rule 67 neither vest a new power on the State nor create a new right
in favor of the property owner. Rule 67 merely provides the procedure for the State's
exercise of eminent domain and, at the same time, ensures the enforcement of the right
of the private owner to receive just compensation for the taking of his property. It is
purely a matter of procedure. It is therefore exclusively the domain of this Court. The
Constitution prohibits Congress from transgressing this sphere.

Congress cannot legislate the manner of payment of just compensation. Neither can
Congress impose a condition on the issuance of a writ of possession. Yet that is what
RA 8974 precisely does.

The records of the 11th Congress which enacted RA 8974 reveal that Congress intended
to revise and amend Rule 67. The Senate deliberations quoted at the beginning of this
dissenting opinion show this legislative intent. [89] I am therefore disheartened that the
majority opinion is in effect sanctioning the arrogation of judicial power by Congress.

In denying the petition, the majority effectively sustained respondent judge's repeal
theory. Thus, they allowed Congress to infringe on the Court's rule-making power, a
power vested by the Constitution exclusively on this Court.
Assuming ex gratia argumenti that the procedure outlined under RA 8974 does not
constitute an impermissible encroachment on the Court's rule-making power, the law
still does not apply here. Section 1 of the IRR of RA 8974 provides that the law covers:

[A]ll acquisition of private real properties, including improvements therein, needed as

right-of-way, site or location for national government projects undertaken by any
department, office or agency of the national government, including any government-
owned or controlled corporation or state college or university, authorized by law or its
respective charter to undertake national government projects.
From this, we can clearly infer that the law does not apply to the following:

(1) expropriation of private property which is personal or movable property;

(2) taking of private property, whether personal or real, for a purpose other than for
right-of-way, site or location of a national government project;

(3) appropriation of private property for right-of-way, site or location of a project not
classified as a national government project;

(4) acquisition of private property for right-of-way, site or location of a national

government project but to be undertaken by an entity not enumerated in
Section 1 of the IRR of RA 8974.

In the foregoing situations, it is Rule 67 of the Rules of Court or the relevant special law
(if any)[90] that will apply.

Here, the expropriation of NAIA IPT3 falls under the second category since petitioners
seek to take private property for a purpose other than for a right-of-way, site or location
for a national government project.

Unfortunately, the majority sided with respondent judge and completely disregarded the
fact that NAIA IPT3 wasthe national government infrastructure project itself and ruled
instead that it was the right-of-way, site or location of a national government project.
That was wrong and the reasoning was even more difficult to understand.

True, under Section 2(d) of the IRR of RA 8974 defining "national government projects",
an airport (which NAIA IPT3 essentially is) is specifically listed among the national
government projects for which expropriation proceedings may be initiated under the law.
However, the law and its IRR also provide that the expropriation should be for the
purpose of providing for a right of way, site or location for the intended national
government project. A national government project is separate and distinct from the
purpose of expropriation. Otherwise, there would have been no need to define them
separately. Thus, respondent judge erred when he equated one with the other and
obliterated the clear distinction made by the law.

Moreover, under Section 2(e) of the IRR, the specific objects or purposes of
expropriation were lumped as 'ROW' which is defined as the "right-of-way, site or
location, with defined physical boundaries, used for a national government project."
Obviously, the NAIA IPT3 is not a right of way, site or location for any national
government infrastructure project but the infrastructure itself albeit still under
construction. The construction (and now the completion) of NAIA IPT3 never required
the acquisition of private property for a right of way, site or location since the terminal,
including all its access roads, stands completely on government land.

Conformably, RA 8974 does not apply to the expropriation of NAIA IPT3. And there
being no special law on the matter, Rule 67 of the Rules of Court governs the procedure
for its expropriation.

AMOUNT ORDERED TO BE RELEASED

Having determined Rule 67 to be the applicable procedure to follow in this expropriation

case, I now turn to the other issues.

In its complaint[91] for the expropriation of NAIA IPT3, petitioners prayed for the
immediate issuance of a writ of possession of the airport terminal and deposited the
amount of P3,002,125,00 (about $53 million) at LBP-Baclaran for this purpose. This
amount was based on the assessed value of NAIA IPT3 for taxation purposes. [92] As
requested by petitioners and in support of their complaint for expropriation, LBP-
Baclaran issued a certification of deposit,[93] which was in effect the functional equivalent
of a certificate of availability of said funds.

In his January 4, 2005 order,[94] respondent judge without any motion by PIATCO
ordered petitioners to immediately pay PIATCO US$62,343,175.77, the total balance of
MIAA's deposits in LBP-Baclaran. Respondent judge reiterated the above directive in
his January 10, 2005 omnibus order.[95] The amount directed to be released was about
US$ 9 million (or P500 million) more than the provisional value required by Rule 67 for
issuance of the writ of possession.

I refuse to join the majority who turned a blind eye on respondent judge's orders which
were issued with grave abuse of discretion.

Respondent judge should not have issued his disputed orders without any motion by
PIATCO. There were very compelling reasons why. Considering that respondent judge
knew or should have known how extremely controversial NAIA IPT3 had become, he
should have granted the parties unimpeded opportunity to confront each other on the
propriety of releasing such a huge amount to the owner of the property under
expropriation. There were in fact still so many pending contentious issues on which the
parties had taken radically opposite positions, such as whether it was respondent
PIATCO alone that was entitled to payment or whether there were other parties like
Takenaka Corporation (to be discussed later in this decision) that had valid claims
thereon and, if so, how much each was entitled to. Furthermore, inasmuch as
petitioners had been vigorously complaining that they were never really able to inspect
and evaluate the structural integrity and real worth of NAIA IPT3, respondent judge
should have at least tried to determine the reasonableness of petitioners' provisional
deposit and therefore, he ought not to have been in such a hurry to order the release of
petitioners' funds to PIATCO which was not even asking for it. In other words, all the
foregoing warning signs considered, he should have been more circumspect, deliberate
and careful in handling the case.

On a more academic note, however, and as already quoted previously, one significant
difference between RA 8974 and Rule 67 is that, under RA 8974, immediate payment of
the full zonal value of the land and improvements/structures is required before the writ
of possession is issued. On the other hand, under Rule 67, the deposit of an amount
equivalent to the assessed value of the property for taxation purposes is enough.

Under Section 2 of Rule 67, the only requisites for authorizing immediate entry (that is,
for the issuance of the writ of possession) in expropriation proceedings are: (1) the filing
of a complaint for expropriation sufficient in form and substance, and (2) a deposit
equivalent to the assessed value for taxation purposes of the property subject to
expropriation. Upon compliance with these two requirements, the issuance of a writ of
possession becomes ministerial.[96]

Petitioners complied fully with the requirements of Rule 67 pertaining to the issuance of
the writ allowing entry into the expropriated facility. First, they duly filed the verified
complaint with the court a quo. Second, PIATCO was served with and notified of the
complaint. Third, petitioners set aside and earmarked P3,022,125,000 as provisional
deposit, equivalent to the assessed value of the property for taxation purposes with the
depositary bank. From then on, it became the ministerial duty of the trial court presided
over by respondent judge to issue the writ of possession.

Section 2 of Rule 67 categorically prescribes the amount to be deposited with the

authorized government depositary as the pre-condition for the issuance of a writ of
possession. This is the assessed value of the property for purposes of taxation. The
figure is exact and permits the court no discretion in determining what the provisional
value should be.[97]

Respondent judge committed grave abuse of discretion when he ordered the release
not only of the provisional deposit (as computed under Rule 67) but also of the entire
bank balance of petitioner MIAA. He exercised discretion in a matter where no
discretion was allowed.

Respondent judge thus disregarded established rules by unilaterally increasing the

amount of the provisional deposit required for the issuance of the writ of possession.
This Court has had occasions in the past where we denounced the acts of trial courts in
unilaterally increasing such provisional deposits. After issuing the writ of possession, the
provisional deposit is fixed and the court can no longer change it. As the Court ruled
in National Power Corporation v. Jocson [98]:

After having fixed these provisional values, x x x and upon deposit by petitioner of the
said amounts, respondent Judge lost, as was held in Manila Railroad Company vs.
Paredes, "plenary control over the order fixing the amount of the deposit, and has no
power to annul, amend or modify it in matters of substance pending the course of the
condemnation proceedings." The reason for this rule is that a contrary ruling would
defeat the very purpose of the law which is to provide a speedy and summary
procedure whereby the peaceable possession of the property subject of the
expropriation proceedings "may be secured without the delays incident to prolonged
and vexatious litigation touching the ownership and value of such lands, which should
not be permitted to delay the progress of work."
Even assuming for the sake of argument that it was RA 8974 that was applicable, still
the trial court could not order petitioners to increase their deposit and to immediately
pay the zonal value of NAIA IPT3. Section 4(c) of the law [99] states that, in cases where
there is no existing valuation of the property concerned, only the proferred valueof the
property by the agency requesting expropriation is required to be paid for issuance of
the writ.

So even if it had been RA 8974 that was applicable which was not so the amount
deposited by petitioners would have constituted the proffered value estimated by them,
based on comparative values made by the City Assessor. In any case, the final
determination of the total just compensation due the owner will have to be made in
accordance with Rule 67. The provisional deposit shall then be deducted and petitioners
shall pay the balance plus legal interest from the time petitioners took possession of the
property until PIATCO is fully paid.

The majority opinion asserted that the determination of the amount of just compensation
to be made pursuant to RA 8974 is limited to the value of the improvements/structures
that constitute the NAIA IPT3 complex and cannot include the BIR zonal valuation which
serves as one of the bases for just compensation under the law. This is, however, based
on the assumption that the law is valid and Congress can substantially amend the rules
of practice and procedure duly promulgated by this Court. It cannot.

Even assuming that RA 8974 is valid, it still does not support the conclusions of the
majority opinion.

The law makes clear the distinction between the valuation of the land itself, and the
improvements and structures constructed therein. While PIATCO is not entitled to the
valuation that is inclusive of the value of the land, it is entitled to just compensation
limited to the value of the improvements and/or structures.

True, Section 4 distinguishes between the valuations of the land itself and of the
improvements and structures constructed therein. However, it is erroneous to infer that
such difference in the manner of valuation justifies the application of RA 8974 to the
expropriation of improvements and structures alone, i.e., separate from the land. The
language of the law itself does not warrant the conclusion made in the majority opinion.

Section 4 of RA 8974 on the valuation of improvements and structures expressly refers

to Section 7 of the law. Section 4 is therefore to be construed in the light of Section 7.
The latter provision (Section 7) speaks of "improvements and/or structures on the land
to be expropriated." Hence, the expropriation of the improvements and structures under
RA 8974 should be properly viewed not in isolation from but in connection with (or as an
incident of) the expropriation of land.

Moreover, any discussion of the expropriation under RA 8974 cannot be divorced from
(1) the purpose of the expropriation and (2) the nature or character of the project. Here,
the expropriation does not meet the first requisite. Hence, assuming the validity of RA
8974, its provisions still cannot be applied.

Even the reference to the proffered value by the majority opinion is inappropriate. The
law is clear that such proffered value applies only "[i]n case the completion of a national
government project is of utmost urgency and importance, and there is no existing
valuation of the area concerned." The majority opinion recognizes the correctness of the
position of the Solicitor General that zonal valuations are only for parcels of land and,
hence, there can be no zonal valuation for improvements or structures such as an
airport terminal like NAIA IPT3. Since it is impossible for improvements or structures to
have an existing valuation, then there can be no proffered value for NAIA IPT 3 to speak
of.

The fact that the proffered value does not apply to improvements is buttressed by the
provisions of RA 8974. The law provides that in the determination of the proffered value,
the standards prescribed in Section 5 of RA 8974 shall be taken into consideration.
Section 5 expressly refers to "Standards for the Assessment of the Value of the Land
Subject of Expropriation Proceedings or Negotiated Sale." On the other hand, the
valuation of improvements and/or structures is separately governed by Section 7 of the
law.

To reiterate, the determination of the proffered value categorically refers to Section 5 on

the valuation of the land, not to valuation of improvements or structures under Section
7. Thus, the majority opinion unduly enlarged the concept of proffered value when it
extended the same to improvements or structures.

PERFORMANCE OF ACTS OF OWNERSHIP

Petitioners contend that respondent judge committed grave abuse of discretion when he
prohibited petitioners in his January 4, 2005 order from performing "acts of ownership".
Although six days later, in his January 10, 2005 omnibus order, respondent judge
removed this prohibition, it was only because he thought it to be a "superfluity"
inasmuch as petitioners were not yet the owners of the terminal. [100]

Petitioners allege that the order of respondent judge unduly limited them to mere
physical entry to the property without, however, affording them the means to accomplish
the public purpose of the expropriation. They argue that a writ of possession in an
expropriation proceeding carries with it the right to perform acts de jure which are
necessary to attain the purpose for which the expropriation is intended. In deciding to
exercise the power of eminent domain, petitioners intended to acquire not only physical
possession but also ownership of the property ultimately. By NAIA IPT3's very nature as
an international airport terminal, awarding concessions and leasing space to third
parties are necessary and related activities in its operation. [101] Petitioners assert that,
upon the issuance of the writ of possession, they acquired equitable or beneficial
ownership of NAIA IPT3. What PIATCO retained until full payment of just
compensation was the mere legal title to the terminal. [102]

PIATCO, on the other hand, alleges that petitioners, not being the owners of NAIA IPT3,
cannot exercise rights of ownership. It cites the doctrine that title to the property does
not transfer to the expropriating authority until full payment of the just compensation. [103]

I agree with petitioners.

In expropriation, private property is taken for public use.[104] What constitutes taking is
well-settled in our jurisprudence. The owner is ousted from his property and deprived of
his beneficial enjoyment thereof. [105] The owner's right to possess and exploit the
property (that is to say, his beneficial ownership of it) is "destroyed". [106]And it is only
after the property is taken that the court proceeds to determine just compensation,
[107]
upon full payment of which shall title pass on to the expropriator.

Citing the case of Association of Small Landowners in the Phils., Inc. v. Secretary of
Agrarian Reform,[108] PIATCO contends that title to the property expropriated can only
cede from the owner to the expropriator only upon full payment of just compensation.
The citation is incomplete, however. We actually held that:

(T)he right to enter on and use the property is complete, as soon as the property is
actually appropriated under the authority of law for a public use, but (the) title does not
pass from the owner without his consent, until just compensation has been made to
him.[109] (emphasis supplied)
True, title remains with the owner until just compensation is fully paid. This is only
proper to protect the rights of the property owner. But that is not the point here. The
issue is whether or not the expropriating authority has the right to enter and use the
property even prior to full payment. [110] In other words, can the property be taken and
used even before full payment of just compensation? Yes. Full payment of just
compensation, though a condition precedent for the transfer of title or ownership, is not
a condition precedent for the taking of the property. As discussed earlier, an important
element of taking is that the owner's right to possess and exploit the land (in other
words, his beneficial ownership of it) is transferred to and thenceforth exercised by the
expropriator.

This is consistent with our ruling in Republic v. Tagle[111] where the issue was whether
the quashal of the writ of possession, on the ground that the Republic was already
occupying the property sought to be expropriated, was proper. We held there that it was
not and that the expropriation of real property was not limited to mere physical entry or
occupation:

... (I)t is manifest that the petitioner, in pursuit of an objective beneficial to public
interest, seeks to realize the same through its power of eminent domain. In exercising
this power, petitioner intended to acquire not only physicalpossession but also
the legal right to possess and ultimately to own the subject property. Hence, its mere
physical entry and occupation of the property fall short of the taking of title, which
includes all the rights that may be exercised by an owner over the subject
property.

xxx xxx xxx

... Ineludibly, said writ (of possession) is both necessary and practical, because
mere physical possession that is gained by entering the property is not equivalent to
expropriating it with the aim of acquiring ownership over, or even the right to possess,
the expropriated property.[112] (emphasis supplied)
The question now is whether this right of beneficial ownership enjoyed by the
expropriator includes the right to lease out the property (or portions thereof) and to
award concessions within NAIA IPT3 to third parties. It does.

In Estate of Salud Jimenez v. Philippine Export Processing Zone (PEZA), [113] we allowed
the lease by the PEZA of the property under expropriation to third parties even before
payment of just compensation. PEZA's charter provided it "substantial leeway in
deciding for what public use the expropriated property would be utilized." [114]Thus, the
Court declared that it would not question the lease because it was in furtherance of the
public purpose of the expropriation.[115]

In this case, petitioners aim to acquire the NAIA IPT3 as the site of a world-class
passenger terminal and airport, and to complete its construction and operate it for the
benefit of the Filipino people.[116] This is the "public use" purpose of the expropriation. On
the other hand, the lease and concession contracts are the means by which the public
purpose of the expropriation can be attained. Since PIATCO never challenged the
"public use" purpose of the expropriation, the reasonable implications of such public
use, including the award of leases and concessions in the terminal, are deemed
admitted as necessary consequences of such expropriation.

Furthermore, in a contract of lease, only the use and enjoyment of the thing are
extended to the lessee.[117] Thus, one need not be the legal owner of the property in
order to give it in lease. [118] The same is true for the award of concessions which
petitioners, as beneficial owner of the property, can legally grant.

Hence, respondent judge committed grave abuse of discretion when he prohibited

petitioners from exercising acts of ownership in NAIA IPT3.

APPOINTMENT OF COMMISSIONERS

In petitioners' complaint for expropriation, they prayed inter alia for the appointment of
commissioners to determine the terminal's just compensation. [119] Respondent judge, in
the assailed order dated January 7, 2005, granted petitioners' prayer and appointed
three commissioners.[120]

Petitioners now assail the appointment because it was allegedly issued by respondent
judge without prior consultation, notice and hearing to all parties who claim an interest in
the just compensation to be determined. Respondent judge also disregarded petitioners'
right to object to any of the appointed commissioners within ten days from notice under
Section 5, Rule 67 of the Rules of Court. Petitioners question as well the competence of
the appointed commissioners.

Petitioners' contentions are untenable.

Section 5 of Rule 67 provides:

Section 5. Ascertainment of Compensation. Upon the rendition of the order of

expropriation, the court shall appoint not more than three (3) competent and
disinterested persons as commissioners to ascertain and report to the court the just
compensation for the property sought to be taken. The order of appointment shall
designate the time and place of the first session of the hearing to be held by the
commissioners and specify the time within which their report shall be submitted to the
court.

Copies of the order shall be served on the parties. Objections to the appointment of any
of the commissioners shall be filed with the court within ten (10) days from service, and
shall be resolved within thirty (30) days after all the commissioners shall have received
copies of the objections.
Contrary to petitioners' position, Rule 67 does not require consultation with the parties
before the court appoints the commissioners. Neither notice to the parties nor hearing is
required for the appointment of commissioners by the judge.

However, in Municipality of Talisay v. Ramirez,[121] we held that "while it is true that,

strictly speaking, it is the court that shall appoint the said commissioners, there is
nothing to prevent it from seeking the recommendations of the parties on this matter x x
x to ensure their fair representation."

This ruling was more or less integrated into the revised rules of court as the latter now
gives the parties ten days from the service of the order appointing the commissioners to
file their objections to any of the appointees. This, in effect, allows them to protest the
appointment of the commissioners while providing them the opportunity to recommend
their own choices.

But the objection must come after the appointment. This is apparent from the second
paragraph of Section 5, Rule 67:

"[o]bjections to the appointment of any of the commissioners shall be filed in court within
ten (10) days from service, and shall be resolved within thirty (30) days after all the
commissioners shall have received copies of the objections." (emphasis supplied)
Consequently, if petitioners are unable to accept the competence of any of the
commissioners, their remedy is to file an objection with the trial court within the stated
period. Initiating a certiorari proceeding on this issue is premature.

In any case, even if the commissioners are appointed by the court, the latter is not
bound by their findings.[122]Section 8 of Rule 67 provides:

Section 8. Action upon the Commissioner's Report. Upon the expiration of the period
of ten (10) days referred to in the preceding section [123], but after all the interested
parties have filed their objections to the report or their statement of agreement
therewith, the court may, after hearing, accept the report and render judgment in
accordance therewith; or, for cause shown, it may recommit the same to the
commissioners for further report of facts; or it may set aside the report and appoint new
commissioners; or it may accept the report in part and reject it in part; and it may make
such order or render such judgment as shall secure to the plaintiff the property essential
to the exercise of his right of expropriation, and to the defendant just compensation for
the property so taken.
The report of the commissioners on the value of the condemned property is neither final
nor conclusive. The court is permitted to act on the report in any of several ways
enumerated in the rules, at its discretion. [124] It may render such judgment as shall
secure to the plaintiff the property essential to the exercise of his right of condemnation
and, to the defendant, just compensation for the property expropriated. The court may
substitute its own estimate of the value as gathered from the records. [125]

I therefore find no abuse of discretion on the part of respondent judge in the

appointment of the three commissioners.

However, to ensure the parties' fair representation, they should be allowed to object, if
they so desire, to any of the appointed commissioners within ten days from receipt of
this decision.

INHIBITION OF RESPONDENT JUDGE

According to petitioners, respondent judge should have inhibited himself from the
expropriation case because he had already prejudged it and was extremely biased
against their cause.

Petitioners charge that respondent judge's January 4, 2005 order authorizing PIATCO
to immediately withdraw the sum of US$62,343,175.77 was irregularly and unfairly
issued. Apart from the fact that the amount was inexcess[126] of what petitioners
proffered, no motion or notice preceded the order. In other words, PIATCO was not
even asking for what the judge granted. To petitioners, respondent judge's extreme
diligence and assiduousness were uncalled for. The swiftness by which the order was
issued could only mean collusion between respondent judge and PIATCO. This
explained why PIATCO did not bother to file any motion or pleading as even without it,
the orders of respondent judge were always in its favor.

In seeking respondent judge's recusation, petitioners aver that they are "not shopping
for a sympathetic judge."[127] They ask for his inhibition in order to have a competent
judge who can hear the parties impartially and with an open mind.

As a general rule, judges are mandated to hear and decide cases, unless legally
disqualified.[128] However, they may voluntarily excuse themselves, in the exercise of
their sound discretion, for just or valid reasons. [129]

The rule on disqualification of a judge to hear a case finds its rationale in the principle
that no judge should preside in a case in which he is not wholly free, disinterested,
impartial and independent. It is aimed at preserving the people's faith and confidence in
the courts of justice.

In compulsory disqualification, the law conclusively presumes that a judge cannot

objectively or impartially sit in a case. [130] In voluntary inhibition, the law leaves it to the
judge to decide for himself whether he will desist from sitting in a case with only his
conscience to guide him.[131]

In Pimentel v. Salanga,[132] the Court provided guidance in case a judge's capacity to try
and decide a case fairly and
judiciously is challenged by any of the parties:

A judge may not be legally prohibited from sitting in a litigation. But when suggestion is
made of record that he might be induced to act in favor of one party or with bias or
prejudice against a litigant arising out of circumstances reasonably capable of inciting
such a state of mind, he should conduct a careful self-examination. He should exercise
his discretion in a way that the people's faith in the courts of justice is not impaired. A
salutary norm is that he reflect on the probability that a losing party might nurture at the
back of his mind the thought that the judge had unmeritoriously tilted the scales of
justice against him. That passion on the part of a judge may be generated because of
serious charges of misconduct against him by a suitor or his counsel, is not altogether
remote. He is a man, subject to the frailties of other men. He should, therefore, exercise
great care and caution before making up his mind to act or withdraw from a suit where
that party or counsel is involved. He could in good grace inhibit himself where that case
could be heard by another judge and where no appreciable prejudice would be
occasioned to others involved therein. On the result of his decisions to sit or not to sit
may depend to a great extent the all-important confidence in the impartiality of the
judiciary. If after reflection he should resolve to voluntarily desist from sitting in a case
where his motives or fairness might be seriously impugned, his action is to be
interpreted as giving meaning and substance to the second paragraph of Section 1,
Rule 137. He serves the cause of the law who forestalls miscarriage of justice.
Here, petitioners' skepticism of respondent judge's ability to display the cold neutrality of
an impartial judge was evident:

Respondent judge ought to have inhibited himself from the expropriation case. xxx [H]e
lacks the competence and more importantly, the impartiality necessary for justice to
prevail.

xxx xxx xxx

[I]f respondent judge did not ambush petitioners with his Orders dated January 4 and
10, 2005, petitioners would have had the restraint and patience to contest in the
ordinary course of law the Order dated January 7, 2005 hastily appointing three
commissioners for the determination of just compensation. But the pattern of fraud
and deception has become too obvious and too dangerous to be
ignored. Petitioners have had enough of respondent judge's onslaught. Three
successive orders of incredible implications have raised the levels of concern to
a tsunami. This was no longer a matter for polite presumptions; hostile facts were
already staring petitioners in the face. Thus, before the die could be cast, the Republic
was constrained to act deliberately and decisively by bringing the matter to this
Honorable Court. Otherwise, the expropriation case would irreversibly become the
plaything of one who had lost the virtues of a good magistrate. [133] (emphasis supplied)
A judge, like Caesar's wife, must be above suspicion. [134] He must hold himself above
reproach and suspicion. At the very first sign of lack of faith and trust in his actions,
whether well-grounded or not, the judge has no other alternative but to inhibit himself
from the case. That way, he avoids being misunderstood. His reputation for probity and
objectivity is maintained. Even more important, the ideal of an impartial administration of
justice is preserved.[135] Justice must not merely be done but must also be seen and
perceived to be done.[136]

Besides, where a case has generated a strained personal relationship, animosity and
hostility between the party or his counsel and the judge that the former has lost
confidence in the judge's impartiality or the latter is unable to display the cold neutrality
of an impartial judge,[137] it is a violation of due process for the judge not to recuse
himself from hearing the case. Due process cannot be satisfied in the absence of that
objectivity on the part of a judge sufficient to reassure litigants of his being fair and just.
[138]

Respondent judge should have recused himself from hearing the case in the light of
petitioners' patent distrust:

The presiding judge's impartiality has been irreparably impaired. x x x [A]ny decision,
order or resolution he would make on the incidents of the case would now be under a
cloud of distrust and skepticism. The presiding judge is no longer effective in dispensing
justice to the parties herein.[139]
Clearly, it would have been more prudent for respondent judge to inhibit himself instead
of placing any of his decisions, orders or resolutions under a cloud of distrust. It would
have likewise deprived petitioners or any one else of reason to cast doubt on the
integrity of these expropriation proceedings with national and international implications.

One final note.

The complaint for expropriation before the RTC named PIATCO as the sole defendant.
However, both petitioners and PIATCO claim that there are other parties who assert an
interest in NAIA IPT3. According to the parties, one of these parties is Takenaka
Corporation, PIATCO's contractor for the construction of NAIA IPT3. Petitioners are
aware that all the parties who claim an interest in the just compensation should be
notified and heard on the matter. They have even signified their intention to file an
amended complaint impleading Takenaka Corporation as a necessary party so that
complete relief may be accorded to all interested parties. [140]
Section 1, Rule 67 of the Rules of Court provides:

Section 1. The complaint. The right of eminent domain shall be exercised by the filing
of a verified complaint which shall state with certainty the right and purpose of
expropriation, describe the real or personal property sought to be expropriated, and join
as defendants all persons owning or claiming to own, or occupying, any part
thereof or interest therein, showing as far as practicable, the separate interest of
each defendant. If the title to any property sought to be expropriated appears to be in
the name of the Republic of the Philippines, although occupied by private individuals, or
if the title is otherwise obscure or doubtful so that the plaintiff cannot with accuracy or
certainty specify who are the real owners, averment to the effect may be made in the
complaint. (Emphasis supplied)
Just compensation is not due to the owner alone: [141]

The defendants in an expropriation case are not limited to the owners of the property
condemned. They include all other persons owning occupying, or claiming to own the
property. When [property] is taken by eminent domain, the owner ... is not necessarily
the only person who is entitled to compensation. In American jurisdiction, the term
'owner' when employed in statutes relating to eminent domain to designate the persons
who are to be made parties to the proceeding, refer, as is the rule in respect of those
entitled to compensation, to all those who have lawful interest in the property to be
condemned, including a mortgagee, a lessee and a vendee in possession under an
executory contract. Every person having an estate or interest at law or in equity in the
land taken is entitled to share in the award. If a person claiming an interest in the land is
not made a party, he is given the right to intervene and lay claim to the compensation.
[142]

In accordance with the foregoing rule, petitioners should be ordered to amend their
complaint for expropriation to include as defendants Takenaka Corporation and all other
parties who occupy, own or claim to own any part of or interest in NAIA IPT3.

EPILOGUE

The government got entangled in the present legal controversy as a result of its
decision to resort to expropriation proceedings for the take-over of NAIA IPT3. It could
have avoided this imbroglio had it pursued the options available to it under the 2004
resolution in Agan. Among these options was the filing in this Court of a motion for the
determination of just compensation. Immediately after the 2004 resolution was
promulgated, the right, purpose and propriety of expropriation could not have been
seriously contested. The sole issue that remained was the amount of just compensation
to be paid. Thus, a motion could have easily been filed to determine the just
compensation for the facility. The Court could have then appointed a panel of
commissioners in accordance with Section 5 of Rule 67 and the problem could have
been completely resolved.

Another option the government could have taken at that time was to take over NAIA
IPT3 in the exercise of its police power. Thereafter, it could have bidded out the facility's
operations. PIATCO could have then been paid from the revenues from the winning
bidder.

Nonetheless, the present expropriation proceedings are proper. Even the majority
opinion recognizes this. The government has all the right to institute the proceedings
where Rule 67 should be applied.

Rule 67 is designed to expedite expropriation proceedings as well as to strike the

needed balance between the interests of the State and that of the private owner.
Applying its provisions here is grounded not only in law but also in reality.

The provisional deposit having been paid, petitioners can take possession of NAIA
IPT3. They can also perform acts of ownership over the property. NAIA IPT3 can then
be made operational and the public purpose for its expropriation will be satisfied.
PIATCO, on the other hand, will receive full and just compensation after the court finally
determines the fair market value of the property.

RA 8974 provides that there should be immediate payment direct to the property owner
prior to the take over of the property. Pursuant thereto, the majority opinion ordered the
payment of the proffered value to PIATCO as a condition for the implementation of the
writ of possession earlier issued by respondent judge. On the other hand, Rule 67
requires only the making of a down payment in the form of a provisional deposit. It
cannot be withdrawn without further orders from the court, i.e., until just compensation is
finally determined.

It is disturbing that the majority opinion allows PIATCO to take hold of the money
without giving the government the opportunity to first inspect the facility thoroughly to
ascertain its structural integrity and to make a preliminary valuation. With the money
already in its possession, PIATCO may make use of the same in whatever way it may
see fit. I dread to think what will happen if the government later on decides to back out
after finding either irremediable structural defects or an excessively bloated valuation,
such that it will cost more to put NAIA IPT3 in operational readiness than to build (or
develop) and operate another airport. What happens then? Will not the government be
left holding an empty bag losing no less than US$ 53 million for an inoperable
facility?

Furthermore, the exchange of opinion between Senator Renato Cayetano and

Congressman Salacnib Baterina quoted by the majority opinion reveals that there
should be a legislative appropriation of funds to finance the acquisition of right of
way, site or location for a national government project. Based on PIATCO's estimate,
the value of the NAIA IPT3 may well be $400 million. This amount may be fair or it may
be bloated. Nonetheless, in the event the trial court determines the just compensation
after 60 days from finality of the decision in this case, the government cannot just
release the amount, assuming that it has the necessary funds. The release of that huge
amount in one shot should have congressional fiat for it is Congress after all which
holds the purse under our system of government.

Given the foregoing, while the procedure under RA 8974 is (as the majority opinion
describes it) "eminently more favorable to the property owner than Rule 67," it is clearly
onerous to the government. In contrast, Rule 67 will be advantageous to the
government without being cumbersome to the private owner. It provides a procedure
that is sensitive to the government's financial condition and, at the same time, fair and
just to the owner of the property.

In ordering the application of RA 8974, the majority opinion favors the interests of
PIATCO over that of the government. Rather than striking the desired balance between
legitimate State interests and private rights, it sacrifices public interest in favor of
individual benefit.

The majority opinion constantly and unabashedly proclaims the objectives of RA 8974
to benefit the property owner and to expedite expropriation proceedings for national
government projects. The majority opinion tilted the balance in favor of private interest
to the prejudice of the common good. Moreover, besides being erroneous, resort to RA
8974 will be counter-productive and self-defeating.

The national government operates on a "collection-for-payment" system. It has to collect

money first before it can make payments to its creditors. If the government is allowed to
undertake acts of ownership over NAIA IPT3, the facility can be utilized not only to serve
the public but also to contribute to the collections needed by the government. Payment
of just compensation to PIATCO will then come "easier and sooner."

Applying RA 8974, on the other hand, will bring about the exact opposite result.
Considering the limited funds and scarce resources of the national government, it will
not be able to come up with the amount equivalent to the full just compensation within
the short period envisioned in the majority opinion. It is absurd to expect or require the
government to pay the full just compensation for NAIA IPT3 allegedly worth several
hundred million dollars in one shot. The expropriation proceedings will grind to a halt.
The hands of the government will be tied. The public interest sought to be met by the
expropriation will be adversely affected. NAIA IPT3 will remain idle and the prime
government property on which it stands will be a complete waste. In such a case,
nobody wins. Everybody loses PIATCO, the government, the Filipino people and our
national prestige. Indeed, another mothballed white elephant!

Accordingly, I vote to grant the petition except insofar as it assails the January 7, 2005
order directing the appointment of three commissioners to assist the trial court in
determining just compensation.
[1]
Section 5(5), Article VIII of the Constitution provides:

xxx xxx xxx

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

xxx xxx xxx

(5) Promulgate rules concerning the protection and enforcement of constitutional rights,
pleading, practice and procedure in all courts, the admission to the practice of law, the
Integrated Bar, and legal assistance to the underprivileged. Such rules shall provide a
simplified and inexpensive procedure for the speedy disposition of cases, shall be
uniform for all courts of the same grade, and shall not diminish, increase, or modify
substantive rights. Rules of procedure of special courts and quasi-judicial bodies shall
remain effective unless disapproved by the Supreme Court.
[14]
Rule 67, Section 2 of the Rules of Court provides:

SEC. 2. Entry of plaintiff upon depositing value with authorized government

depositary. Upon the filing of the complaint or at any time thereafter and after due
notice to the defendant, the plaintiff shall have the right to take or enter upon the
possession of the real property involved if he deposits with the authorized government
depositary an amount equivalent to the assessed value of the property for purposes of
taxation to be held by such bank subject to the orders of the court. Such deposit shall
be in money, unless in lieu thereof the court authorizes the deposit of a certificate of
deposit of a government bank of the Republic of the Philippines payable on demand to
the authorized government depositary.

xxx xxx xxx

After such deposit is made[,] the court shall order the sheriff or other proper officer to
forthwith place the plaintiff in possession of the property involved and promptly submit a
report thereof to the court with service of copies to the parties.
[19]
The Republic's deposit for purposes of securing the writ of possession was roughly
equivalent to only US$ 53 million. But its total bank balance in LBP-Baclaran amounted
to US$ 62.3+ million. The difference represented other funds or deposits not at all
intended by the Republic to be part of the provisional value required before a writ of
possession could be issued.

[20]
The "provisional value" refers to the provisional amount which is, according to Rule
67, Sec. 2 of the 1997 Rules of Civil Procedure, "equivalent to the assessed value of the
property for [taxation] purposes." It is by no means the final or total amount of
compensation to be paid to the owner of the property expropriated (arrived at only after
the entire expropriation proceedings are concluded), but merely an initial sum or "down
payment" required before the court can issue a writ of possession which will then
authorize the expropriation complainant to take, enter or possess the property.
[25]
"An Act to Facilitate the Acquisition of Right-of-Way, Site or Location for National
Government Infrastructure Projects and for other Purposes."
[28]
"An Act to ensure the expeditious implementation and completion of government
infrastructure projects by prohibiting lower courts from issuing temporary restraining
orders, preliminary injunctions or preliminary mandatory injunctions, providing penalties
for violations thereof, and for other purposes."

It is a declared policy under RA 8975 that "the use of property bears a social function,
and all economic agents shall contribute to the common good. Toward this end, the
State shall ensure the expeditious and efficient implementation and completion of
government infrastructure projects to avoid unnecessary increase in construction,
maintenance and/or repair costs and to immediately enjoy the social and economic
benefits therefrom" pursuant to Article XII, Section 6 of the Constitution.
[72]
Petitioners quote the following portions of the discussions during the bicameral
conference committee meeting on the disagreeing provisions of SB No. 2117 and
House Bill No. 1422, the congressional bills which later became RA 8974:

THE CHAIRMAN (SEN. CAYETANO). x x x

Now, [House Bill No. 1422's] Section 3, ours is [a] method of acquiring real properties;
yours is right-of-way acquisition procedure,....
THE CHAIRMAN (REP. VERGARA). Yeah.

THE CHAIRMAN (SEN. CAYETANO). Okay, there are few basic differences. In our
version, we do not only include right-of-way....; we also included acquisition of site or
location, .... [Yours is limited to right-of-way]. [Thus, ours is broader because our
definition... includes right-of-way or site,..., or location. So to be consistent with that, we
have also to include here,..., that we are not only speaking of right of way but also of
site or location.]

xxxxxxxxx

(Transcript of Bicameral Conference Committee Meeting on the Disagreeing Provisions

of SB No. 2117 and HB No. 1422, August 29, 2000, pp. 11-12)
[99]
This is implemented by Sec. 8 of the IRR of RA 8974 which provides:

SECTION 8. Expropriation.

xxx xxx xxx

In case the completion of a national government project is of utmost urgency and

importance, and there is no existing valuation of the area concerned, the Implementing
Agency shall immediately pay the owner of the property its proffered value taking
into consideration the standards stated in the second paragraph of Section 8 hereof,
pursuant to Section 5 of the Act. (emphasis supplied)
[128]
Section 1, Rule 137: Disqualification of Judges. No judge or judicial officer shall sit
in any case in which he, or his wife or child, is pecuniarily interested as heir, legatee,
creditor or otherwise, or in which he is related to either party within the sixth degree of
consanguinity or affinity, or to counsel within the fourth degree, computed according to
the rules of the civil law, or in which he has been executor, administrator, guardian,
trustee or counsel, or in which he has presided in any inferior co5urt when his ruling or
decision is the subject of review, without the written consent of all parties in interest,
signed by them and entered upon the record.

A judge may, in the exercise of his sound discretion, disqualify himself from sitting in a
case, for just or valid reasons other than those mentioned above.
FORECLOSURE OF
REAL ESTATE
MORTGAGE

SECOND DIVISION

[ G.R. No. 178479, October 23, 2009 ]

METROPOLITAN BANK & TRUST CO., PETITIONER, VS. NIKKO SOURCES
INTERNATIONAL CORP., AND SUPERMAX PHILIPPINES, INC., RESPONDENTS.

DECISION

CARPIO MORALES, J.:

Respondent Supermax Philippines, Inc. (Supermax) obtained loans in 1999 from

Metropolitan Bank and Trust Company (petitioner) totaling P24,600,000. [1] To secure the
loans, its co-respondent Nikko Sources International Corporation mortgaged a parcel of
land covered by Transfer Certificate of Title No. T-763001 in its name. [2]

Supermax failed to pay the loans upon maturity, hence, petitioner filed a petition for
extra-judicial foreclosure of the mortgage before a notary public in Cavite. [3] A Notice of
Sale[4] scheduled on August 4, 2000 was rescheduled to November 7, 2000 on
petitioner's request,[5] and finally to November 14, 2000 on respondent's request.

Four days before the finally rescheduled public auction sale or on November 10, 2000,
respondents filed before the Regional Trail Court (RTC) of Bacoor, Cavite a
Complaint[6] against petitioner and the notary public, docketed as Civil Case No. BCV
2000-146, for declaration of nullity of notice of sale and increase in interest rates and
damages, with prayer for the issuance of temporary restraining order (TRO) and/or writ
of preliminary injunction, alleging that their failure to pay the loans was due to the
unilateral imposition of exorbitant interest rate by petitioner from 16.453% to 18.5% in a
matter of months;[7] and that petitioner reset the auction sale to November 14, 2000
without complying with the posting and publication requirements. [8]

Branch 19 of the Bacoor RTC issued a TRO and eventually a writ of preliminary
injunction.[9] Petitioner filed a Motion to Dissolve the writ [10] which the trial court denied,
[11]
it finding that, among other things, petitioner did not comply with the requirements of
the law on notice and publication of the auction sale. Its Motion for
Reconsideration[12] having been denied,[13] petitioner filed a petition[14] for Certiorari
before the Court of Appeals.

By Decision[15] of December 4, 2006, the Court of Appeals, finding that petitioner failed
to comply with Section 3 of Act No. 3135 (An Act to Regulate the Sale of Property Under
Special Powers Inserted In or Annexed to Real Estate Mortgages), as amended and
Circular No. 7-2002 (Guidelines for the Enforcement of Supreme Court Resolution of
December 14, 1999 in Administrative Matter No. 99-10-05-0 (Re: Procedure in Extra-
Judicial Foreclosure of Mortgage), as Amended by the Resolutions dated January 30,
2001 and August 7, 2001)[16] of this Court, dismissed the petition. Petitioner's Motion for
Reconsideration[17] having been denied,[18] it filed the present Petition for Review,
[19]
alleging that the Court of Appeals

x x x DECIDED A QUESTION IN A WAY NOT IN ACCORDANCE WITH LAW OR

WITH THE APPLICABLE DECISIONS OF THE HON. SUPREME COURT WHEN IT
UPHELD THE ASSAILED ORDERS OF THE LOWER COURT AND ENJOINED THE
AUCTION SALE OF THE SUBJECT PROPERTY DESPITE THE EXISTENCE OF
VALID AND LEGAL GROUNDS [FOR] DISSOLVING THE WRIT OF PRELIMINARY
INJUNCTION.

x x x DEPARTED FROM THE USUAL COURSE OF PROCEEDING OR

SANCTIONED SUCH DEPARTURE BY THE LOWER COURT IN THAT ACT NO.
3135, AS AMENDED, REQUIRES THE REPUBLICATION OF THE NOTICE OF SALE
DESPITE THE FACT THAT THE RESPONDENTS REQUESTED FOR THREE
POSTPONEMENTS OF THE AUCTION SALE AND WHICH WAS SCHEDULED
LONG BEFORE THE EFFECTIVITY OF CIRCULAR NO. 7-2002. [20] (Emphasis in the
original)

In the meantime, the trial court dismissed Civil Case No. BCV-2000-146 for failure of
respondents and their counsel to appear during pre-trial. [21] Respondents' Motion for
Reconsideration[22] was denied,[23] hence, they filed a Notice of Appeal [24] which the trial
court gave due course to.[25]

Petitioner now contends that with the dismissal of Civil Case No. BV-2000-146, the Writ
of Preliminary Injunction being challenged by them in the present petition ipso
facto ceased to exist.[26] Respondents counter, however, that their Notice of Appeal of
the dismissal of the case was given due course by the trial court, hence, the writ stands.

On the merits, petitioner argues:

x x x [I]n deciding to uphold the ruling of the trial court, the Honorable Court of Appeals
reasoned that, underCircular No. 7-2002, which took effect on 22 April
2002, republication of a subsequent date of the foreclosure sale
is unnecessary, provided that the said subsequent date be indicated in the original
Notice of Sale. Hence, as the foreclosure sale in this instance was intended to be held
on 14 November 2000, before the said Circular took effect, there was a need for the
Notice of Sale to be re-published and re-posted.

However, prior to the effectivity of Circular No. 7-2002, there was neither any
statute nor judicial pronouncement from the Hon. Supreme Court requiring
republication and reposting of a Notice of Sale in the event foreclosure did not
proceed on the date originally intended.

The Honorable Court of Appeals, however, anchored its Decision [on] the case
of Philippine National Bank vs. Nepomuceno Productions, Inc., 394 SCRA 405,
which was, however, promulgated by the Hon. Supreme Court on 27 December
2002 or more than two (2) years after the intended auction sale in the instant case
on 14 November 2000.[27] (Emphasis and underscoring in the original; italics supplied)

The sale at public auction of the properties covered by the foreclosed mortgage
in Philippine National Bank v. Nepomuceno Productions, Inc. [28] cited by petitioner took
place in 1976, also prior to the effectivity on April 22, 2002 of this Court's Circular No. 7-
2002. The Court therein held that under Act No. 3135, as amended, republication as
well as reposting of the notice of sale is required if the foreclosure does not proceed on
the dateoriginally intended.

The principal object of a notice of sale in a foreclosure of mortgage is not so much to

notify the mortgagor as to inform the public generally of the nature and condition of the
property to be sold, and of the time, place, and terms of the sale. Notices are given to
secure bidders and prevent a sacrifice of the property. Clearly, the statutory
requirements of posting and publication are mandated, not for the mortgagor's benefit,
but for the public or third persons. In fact, personal notice to the mortgagor in
extrajudicial foreclosure proceedings is not even necessary, unless stipulated. As such,
it is imbued with public policy considerations and any waiver thereon would be
inconsistent with the intent and letter of Act No. 3135.
Moreover, statutory provisions governing publication of notice of mortgage foreclosure
sales must be strictly complied with and slight deviations therefrom will invalidate the
notice and render the sale at the very least voidable.

x x x x

Thus, in the recent case of Development Bank of the Philippines v. Aguirre,[29] the
foreclosure sale held more than two (2) months after the published date of sale was
considered void for lack of republication. Similarly, in the instant case, the lack of
republication of the notice of the December 20, 1976 foreclosure sale renders it void.

The right of a bank to foreclose a mortgage upon the mortgagor's failure to pay his
obligation must be exercised according to its clear mandate, and every requirement of
the law must be complied with, lest the valid exercise of the right would end. The
exercise of a right ends when the right disappears, and it disappears when it is abused
especially to the prejudice of others.[30] (Emphasis and underscoring supplied)

Petitioner not having republished the notice of the finally rescheduled auction sale, its
petition must fail.

WHEREFORE, the petition is DENIED.

Costs against petitioner.

SO ORDERED.
[16]
Sec. 3 of Act. No. 3135:

SEC. 3. Notice shall be given by posting notices of the sale for not less than twenty
days in at least three public places of the municipality or city where the property is
situated and if such property is worth more than Four hundred pesos, such notice shall
also be published once a week for at least three consecutive weeks in a newspaper of
general circulation in the municipality or city.

Supreme Court Circular No. 7-2002:

Sec. 4. The Sheriff to whom the application for extra-judicial foreclosure of mortgage
was raffled shall do the following:
a. Prepare a Notice of Extra-judicial Sale using the following form:

"NOTICE OF EXTRA-JUDICIAL SALE"

Upon extra-judicial petition for sale under Act 3135/1508 filed __________________
against (name and address of Mortgagor/s) to satisfy the mortgage indebtedness which
as of ______________ amounts to P______________, excluding penalties, charges,
attorney's fees and expenses of foreclosure, the undersigned or his duly authorized
deputy will sell at public auction on (date of sale) ___________ at 10:00 A.M. or soon
thereafter at the main entrance of the _______________ (place of sale) to the highest
bidder, for cash or manager's check and in Philippine Currency, the following property
with all its improvements, to wit:

"(Description of Property)"

"All sealed bids must be submitted to the undersigned on the above stated time and
date."

"In the event the public auction should not take place on the said date, it shall be held
on ______________, ______________ without further notice."

_________________(date)
 SECOND DIVISION
[ G.R. No. 150197, July 28, 2005 ]
PRUDENTIAL BANK, PETITIONER, VS. DON A. ALVIAR AND GEORGIA B. ALVIAR,
RESPONDENTS.

DECISION
TINGA, J.:
Before us is a petition for review on certiorari under Rule 45 of the Rules of Court.
Petitioner Prudential Bank seeks the reversal of the Decision[1] of the Court of Appeals
dated 27 September 2001 in CA-G.R. CV No. 59543 affirming the Decision of the
Regional Trial Court (RTC) of Pasig City, Branch 160, in favor of respondents.

Respondents, spouses Don A. Alviar and Georgia B. Alviar, are the registered owners of
a parcel of land in San Juan, Metro Manila, covered by Transfer Certificate of Title
(TCT) No. 438157 of the Register of Deeds of Rizal. On 10 July 1975, they executed a
deed of real estate mortgage in favor of petitioner Prudential Bank to secure the
payment of a loan worth P250,000.00. [2] This mortgage was annotated at the back of
TCT No. 438157. On 4 August 1975, respondents executed the corresponding
promissory note, PN BD#75/C-252, covering the said loan, which provides that the loan
matured on 4 August 1976 at an interest rate of 12% per annum with a 2% service
charge, and that the note is secured by a real estate mortgage as aforementioned.
[3]
Significantly, the real estate mortgage contained the following clause:
That for and in consideration of certain loans, overdraft and other credit
accommodations obtained from the Mortgagee by the Mortgagor and/or
________________ hereinafter referred to, irrespective of number, as DEBTOR, and to
secure the payment of the same and those that may hereafter be obtained, the principal
or all of which is hereby fixed at Two Hundred Fifty Thousand (P250,000.00) Pesos,
Philippine Currency, as well as those that the Mortgagee may extend to the Mortgagor
and/or DEBTOR, including interest and expenses or any other obligation owing to the
Mortgagee, whether direct or indirect, principal or secondary as appears in the
accounts, books and records of the Mortgagee, the Mortgagor does hereby transfer
and convey by way of mortgage unto the Mortgagee, its successors or assigns, the
parcels of land which are described in the list inserted on the back of this document,
and/or appended hereto, together with all the buildings and improvements now existing
or which may hereafter be erected or constructed thereon, of which the Mortgagor
declares that he/it is the absolute owner free from all liens and incumbrances. . . . [4]
On 22 October 1976, Don Alviar executed another promissory note, PN BD#76/C-345
for P2,640,000.00, secured by D/A SFDX #129, signifying that the loan was secured by
a "hold-out" on the mortgagor's foreign currency savings account with the bank under
Account No. 129, and that the mortgagor's passbook is to be surrendered to the bank
until the amount secured by the "hold-out" is settled. [5]

On 27 December 1976, respondent spouses executed for Donalco Trading, Inc., of

which the husband and wife were President and Chairman of the Board and Vice
President,[6] respectively, PN BD#76/C-430 covering P545,000.000. As provided in the
note, the loan is secured by "Clean-Phase out TOD CA 3923," which means that the
temporary overdraft incurred by Donalco Trading, Inc. with petitioner is to be converted
into an ordinary loan in compliance with a Central Bank circular directing the
discontinuance of overdrafts.[7]

On 16 March 1977, petitioner wrote Donalco Trading, Inc., informing the latter of its
approval of a straight loan of P545,000.00, the proceeds of which shall be used to
liquidate the outstanding loan of P545,000.00 TOD. The letter likewise mentioned that
the securities for the loan were the deed of assignment on two promissory notes
executed by Bancom Realty Corporation with Deed of Guarantee in favor of A.U.
Valencia and Co. and the chattel mortgage on various heavy and transportation
equipment.[8]

On 06 March 1979, respondents paid petitioner P2,000,000.00, to be applied to the

obligations of G.B. Alviar Realty and Development, Inc. and for the release of the real
estate mortgage for the P450,000.00 loan covering the two (2) lots located at Vam
Buren and Madison Streets, North Greenhills, San Juan, Metro Manila. The payment
was acknowledged by petitioner who accordingly released the mortgage over the two
properties.[9]

On 15 January 1980, petitioner moved for the extrajudicial foreclosure of the mortgage
on the property covered by TCT No. 438157. Per petitioner's computation, respondents
had the total obligation of P1,608,256.68, covering the three (3) promissory notes, to
wit: PN BD#75/C-252 for P250,000.00, PN BD#76/C-345 for P382,680.83, and PN
BD#76/C-340 for P545,000.00, plus assessed past due interests and penalty charges.
The public auction sale of the mortgaged property was set on 15 January 1980. [10]
 Respondents filed a complaint for damages with a prayer for the issuance of a writ of
preliminary injunction with the RTC of Pasig, [11] claiming that they have paid their
principal loan secured by the mortgaged property, and thus the mortgage should not be
foreclosed. For its part, petitioner averred that the payment of P2,000,000.00 made on 6
March 1979 was not a payment made by respondents, but by G.B. Alviar Realty and
Development Inc., which has a separate loan with the bank secured by a separate
mortgage.[12]

On 15 March 1994, the trial court dismissed the complaint and ordered the Sheriff to
proceed with the extra-judicial foreclosure. [13] Respondents sought reconsideration of
the decision.[14] On 24 August 1994, the trial court issued an Order setting aside its
earlier decision and awarded attorney's fees to respondents. [15] It found that only the
P250,000.00 loan is secured by the mortgage on the land covered by TCT No. 438157.
On the other hand, the P382,680.83 loan is secured by the foreign currency deposit
account of Don A. Alviar, while the P545,000.00 obligation was an unsecured loan,
being a mere conversion of the temporary overdraft of Donalco Trading, Inc. in
compliance with a Central Bank circular. According to the trial court, the "blanket
mortgage clause" relied upon by petitioner applies only to future loans obtained by the
mortgagors, and not by parties other than the said mortgagors, such as Donalco
Trading, Inc., for which respondents merely signed as officers thereof.

On appeal to the Court of Appeals, petitioner made the following assignment of errors:
I. The trial court erred in holding that the real estate mortgage covers only the
promissory note BD#75/C-252 for the sum of P250,000.00.

II. The trial court erred in holding that the promissory note BD#76/C-345 for
P2,640,000.00 (P382,680.83 outstanding principal balance) is not covered by the
real estate mortgage by expressed agreement.

III. The trial court erred in holding that Promissory Note BD#76/C-430 for
P545,000.00 is not covered by the real estate mortgage.

IV. The trial court erred in holding that the real estate mortgage is a contract of
adhesion.

V. The trial court erred in holding defendant-appellant liable to pay plaintiffs-

appellees attorney's fees for P20,000.00.[16]
The Court of Appeals affirmed the Order of the trial court but deleted the award of
attorney's fees.[17] It ruled that while a continuing loan or credit accommodation based
on only one security or mortgage is a common practice in financial and commercial
institutions, such agreement must be clear and unequivocal. In the instant case, the
parties executed different promissory notes agreeing to a particular security for each
loan. Thus, the appellate court ruled that the extrajudicial foreclosure sale of the
property for the three loans is improper.[18]

The Court of Appeals, however, found that respondents have not yet paid the
P250,000.00 covered by PN BD#75/C-252 since the payment of P2,000,000.00
adverted to by respondents was issued for the obligations of G.B. Alviar Realty and
Development, Inc.[19]

Aggrieved, petitioner filed the instant petition, reiterating the assignment of errors raised
in the Court of Appeals as grounds herein.

Petitioner maintains that the "blanket mortgage clause" or the "dragnet clause" in the
real estate mortgage expressly covers not only the P250,000.00 under PN BD#75/C-
252, but also the two other promissory notes included in the application for extrajudicial
foreclosure of real estate mortgage.[20] Thus, it claims that it acted within the terms of the
mortgage contract when it filed its petition for extrajudicial foreclosure of real estate
mortgage. Petitioner relies on the cases of Lim Julian v. Lutero,[21] Tad-Y v. Philippine
National Bank,[22] Quimson v. Philippine National Bank, [23] C & C Commercial v.
Philippine National Bank,[24] Mojica v. Court of Appeals,[25]and China Banking
Corporation v. Court of Appeals,[26] all of which upheld the validity of mortgage contracts
securing future advancements.

Anent the Court of Appeals' conclusion that the parties did not intend to include PN
BD#76/C-345 in the real estate mortgage because the same was specifically secured
by a foreign currency deposit account, petitioner states that there is no law or rule which
prohibits an obligation from being covered by more than one security. [27] Besides,
respondents even continued to withdraw from the same foreign currency account even
while the promissory note was still outstanding, strengthening the belief that it was the
real estate mortgage that principally secured all of respondents' promissory notes. [28] As
for PN BD#76/C-345, which the Court of Appeals found to be exclusively secured by the
Clean-Phase out TOD 3923, petitioner posits that such security is not exclusive, as the
"dragnet clause" of the real estate mortgage covers all the obligations of the
respondents.[29]

Moreover, petitioner insists that respondents attempt to evade foreclosure by the

expediency of stating that the promissory notes were executed by them not in their
personal capacity but as corporate officers. It claims that PN BD#76/C-430 was in fact
for home construction and personal consumption of respondents. Thus, it states that
there is a need to pierce the veil of corporate fiction. [30]

Finally, petitioner alleges that the mortgage contract was executed by respondents with
knowledge and understanding of the "dragnet clause," being highly educated
individuals, seasoned businesspersons, and political personalities. [31] There was no
oppressive use of superior bargaining power in the execution of the promissory notes
and the real estate mortgage.[32]

For their part, respondents claim that the "dragnet clause" cannot be applied to the
subsequent loans extended to Don Alviar and Donalco Trading, Inc. since these loans
are covered by separate promissory notes that expressly provide for a different form of
security.[33] They reiterate the holding of the trial court that the "blanket mortgage clause"
would apply only to loans obtained jointly by respondents, and not to loans obtained by
other parties.[34]Respondents also place a premium on the finding of the lower courts
that the real estate mortgage clause is a contract of adhesion and must be strictly
construed against petitioner bank.[35]

The instant case thus poses the following issues pertaining to: (i) the validity of the
"blanket mortgage clause" or the "dragnet clause"; (ii) the coverage of the "blanket
mortgage clause"; and consequently, (iii) the propriety of seeking foreclosure of the
mortgaged property for the non-payment of the three loans.

At this point, it is important to note that one of the loans sought to be included in the
"blanket mortgage clause" was obtained by respondents for Donalco Trading, Inc.
Indeed, PN BD#76/C-430 was executed by respondents on behalf of Donalco Trading,
Inc. and not in their personal capacity. Petitioner asks the Court to pierce the veil of
corporate fiction and hold respondents liable even for obligations they incurred for the
corporation. The mortgage contract states that the mortgage covers "as well as those
that the Mortgagee may extend to the Mortgagor and/or DEBTOR, including interest
and expenses or any other obligation owing to the Mortgagee, whether direct or indirect,
principal or secondary." Well-settled is the rule that a corporation has a personality
separate and distinct from that of its officers and stockholders. Officers of a corporation
are not personally liable for their acts as such officers unless it is shown that they have
exceeded their authority.[36] However, the legal fiction that a corporation has a
personality separate and distinct from stockholders and members may be disregarded if
it is used as a means to perpetuate fraud or an illegal act or as a vehicle for the evasion
of an existing obligation, the circumvention of statutes, or to confuse legitimate issues.
[37]
PN BD#76/C-430, being an obligation of Donalco Trading, Inc., and not of the
respondents, is not within the contemplation of the "blanket mortgage clause."
Moreover, petitioner is unable to show that respondents are hiding behind the corporate
structure to evade payment of their obligations. Save for the notation in the promissory
note that the loan was for house construction and personal consumption, there is no
proof showing that the loan was indeed for respondents' personal consumption.
Besides, petitioner agreed to the terms of the promissory note. If respondents were
indeed the real parties to the loan, petitioner, a big, well-established institution of long
standing that it is, should have insisted that the note be made in the name of
respondents themselves, and not to Donalco Trading Inc., and that they sign the note in
their personal capacity and not as officers of the corporation.

Now on the main issues.

A "blanket mortgage clause," also known as a "dragnet clause" in American

jurisprudence, is one which is specifically phrased to subsume all debts of past or future
origins. Such clauses are "carefully scrutinized and strictly construed." [38] Mortgages of
this character enable the parties to provide continuous dealings, the nature or extent of
which may not be known or anticipated at the time, and they avoid the expense and
inconvenience of executing a new security on each new transaction. [39] A "dragnet
clause" operates as a convenience and accommodation to the borrowers as it makes
available additional funds without their having to execute additional security documents,
thereby saving time, travel, loan closing costs, costs of extra legal services, recording
fees, et cetera.[40] Indeed, it has been settled in a long line of decisions that mortgages
given to secure future advancements are valid and legal contracts, [41] and the amounts
named as consideration in said contracts do not limit the amount for which the mortgage
may stand as security if from the four corners of the instrument the intent to secure
future and other indebtedness can be gathered. [42]
The "blanket mortgage clause" in the instant case states:
That for and in consideration of certain loans, overdraft and other credit
accommodations obtained from the Mortgagee by the Mortgagor and/or
________________ hereinafter referred to, irrespective of number, as DEBTOR, and to
secure the payment of the same and those that may hereafter be obtained, the
principal or all of which is hereby fixed at Two Hundred Fifty Thousand (P250,000.00)
Pesos, Philippine Currency, as well as those that the Mortgagee may extend to the
Mortgagor and/or DEBTOR, including interest and expenses or any other
obligation owing to the Mortgagee, whether direct or indirect, principal or
secondary as appears in the accounts, books and records of the Mortgagee, the
Mortgagor does hereby transfer and convey by way of mortgage unto the Mortgagee,
its successors or assigns, the parcels of land which are described in the list inserted on
the back of this document, and/or appended hereto, together with all the buildings and
improvements now existing or which may hereafter be erected or constructed thereon,
of which the Mortgagor declares that he/it is the absolute owner free from all liens and
incumbrances. . . .[43] (Emphasis supplied.)
Thus, contrary to the finding of the Court of Appeals, petitioner and respondents
intended the real estate mortgage to secure not only the P250,000.00 loan from the
petitioner, but also future credit facilities and advancements that may be obtained by the
respondents. The terms of the above provision being clear and unambiguous, there is
neither need nor excuse to construe it otherwise.

The cases cited by petitioner, while affirming the validity of "dragnet clauses" or "blanket
mortgage clauses," are of a different factual milieu from the instant case. There, the
subsequent loans were not covered by any security other than that for the mortgage
deeds which uniformly contained the "dragnet clause."

In the case at bar, the subsequent loans obtained by respondents were secured by
other securities, thus: PN BD#76/C-345, executed by Don Alviar was secured by a
"hold-out" on his foreign currency savings account, while PN BD#76/C-430, executed
by respondents for Donalco Trading, Inc., was secured by "Clean-Phase out TOD CA
3923" and eventually by a deed of assignment on two promissory notes executed by
Bancom Realty Corporation with Deed of Guarantee in favor of A.U. Valencia and Co.,
and by a chattel mortgage on various heavy and transportation equipment. The matter
of PN BD#76/C-430 has already been discussed. Thus, the critical issue is whether the
"blanket mortgage" clause applies even to subsequent advancements for which other
securities were intended, or particularly, to PN BD#76/C-345.

Under American jurisprudence, two schools of thought have emerged on this question.
One school advocates that a "dragnet clause" so worded as to be broad enough to
cover all other debts in addition to the one specifically secured will be construed to
cover a different debt, although such other debt is secured by another mortgage. [44]The
contrary thinking maintains that a mortgage with such a clause will not secure a note
that expresses on its face that it is otherwise secured as to its entirety, at least to
anything other than a deficiency after exhausting the security specified therein, [45] such
deficiency being an indebtedness within the meaning of the mortgage, in the absence of
a special contract excluding it from the arrangement. [46]

The latter school represents the better position. The parties having conformed to the
"blanket mortgage clause" or "dragnet clause," it is reasonable to conclude that they
also agreed to an implied understanding that subsequent loans need not be secured by
other securities, as the subsequent loans will be secured by the first mortgage. In other
words, the sufficiency of the first security is a corollary component of the "dragnet
clause." But of course, there is no prohibition, as in the mortgage contract in issue,
against contractually requiring other securities for the subsequent loans. Thus, when the
mortgagor takes another loan for which another security was given it could not be
inferred that such loan was made in reliance solely on the original security with the
"dragnet clause," but rather, on the new security given. This is the "reliance on the
security test."

Hence, based on the "reliance on the security test," the California court in the cited case
made an inquiry whether the second loan was made in reliance on the original security
containing a "dragnet clause." Accordingly, finding a different security was taken for the
second loan no intent that the parties relied on the security of the first loan could be
inferred, so it was held. The rationale involved, the court said, was that the "dragnet
clause" in the first security instrument constituted a continuing offer by the borrower to
secure further loans under the security of the first security instrument, and that when the
lender accepted a different security he did not accept the offer. [47]

In another case, it was held that a mortgage with a "dragnet clause" is an "offer" by the
mortgagor to the bank to provide the security of the mortgage for advances of and when
they were made. Thus, it was concluded that the "offer" was not accepted by the bank
when a subsequent advance was made because (1) the second note was secured by a
chattel mortgage on certain vehicles, and the clause therein stated that the note was
secured by such chattel mortgage; (2) there was no reference in the second note or
chattel mortgage indicating a connection between the real estate mortgage and the
advance; (3) the mortgagor signed the real estate mortgage by her name alone,
whereas the second note and chattel mortgage were signed by the mortgagor doing
business under an assumed name; and (4) there was no allegation by the bank, and
apparently no proof, that it relied on the security of the real estate mortgage in making
the advance.[48]

Indeed, in some instances, it has been held that in the absence of clear, supportive
evidence of a contrary intention, a mortgage containing a "dragnet clause" will not be
extended to cover future advances unless the document evidencing the subsequent
advance refers to the mortgage as providing security therefor. [49]

It was therefore improper for petitioner in this case to seek foreclosure of the mortgaged
property because of non-payment of all the three promissory notes. While the existence
and validity of the "dragnet clause" cannot be denied, there is a need to respect the
existence of the other security given for PN BD#76/C-345. The foreclosure of the
mortgaged property should only be for the P250,000.00 loan covered by PN BD#75/C-
252, and for any amount not covered by the security for the second promissory note.
As held in one case, where deeds absolute in form were executed to secure any and all
kinds of indebtedness that might subsequently become due, a balance due on a note,
after exhausting the special security given for the payment of such note, was in the
absence of a special agreement to the contrary, within the protection of the mortgage,
notwithstanding the giving of the special security.[50] This is recognition that while the
"dragnet clause" subsists, the security specifically executed for subsequent loans must
first be exhausted before the mortgaged property can be resorted to.

One other crucial point. The mortgage contract, as well as the promissory notes subject
of this case, is a contract of adhesion, to which respondents' only participation was the
affixing of their signatures or "adhesion" thereto. [51] A contract of adhesion is one in
which a party imposes a ready-made form of contract which the other party may accept
or reject, but which the latter cannot modify.[52]
The real estate mortgage in issue appears in a standard form, drafted and prepared
solely by petitioner, and which, according to jurisprudence must be strictly construed
against the party responsible for its preparation. [53] If the parties intended that the
"blanket mortgage clause" shall cover subsequent advancement secured by separate
securities, then the same should have been indicated in the mortgage contract.
Consequently, any ambiguity is to be taken contra proferentum, that is, construed
against the party who caused the ambiguity which could have avoided it by the exercise
of a little more care.[54] To be more emphatic, any ambiguity in a contract whose terms
are susceptible of different interpretations must be read against the party who drafted it,
[55]
which is the petitioner in this case.

Even the promissory notes in issue were made on standard forms prepared by
petitioner, and as such are likewise contracts of adhesion. Being of such nature, the
same should be interpreted strictly against petitioner and with even more reason since
having been accomplished by respondents in the presence of petitioner's personnel and
approved by its manager, they could not have been unaware of the import and extent of
such contracts.

Petitioner, however, is not without recourse. Both the Court of Appeals and the trial court
found that respondents have not yet paid the P250,000.00, and gave no credence to
their claim that they paid the said amount when they paid petitioner P2,000,000.00.
Thus, the mortgaged property could still be properly subjected to foreclosure
proceedings for the unpaid P250,000.00 loan, and as mentioned earlier, for any
deficiency after D/A SFDX#129, security for PN BD#76/C-345, has been exhausted,
subject of course to defenses which are available to respondents.

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R.
CV No. 59543 isAFFIRMED.

Costs against petitioner.

SO ORDERED.
 FIRST DIVISION

[ G. R. No. 126800, November 29, 1999 ]

NATALIA P. BUSTAMANTE, PETITIONER VS. SPOUSES RODITO F. ROSEL AND

NORMA A. ROSEL, RESPONDENTS.

RESOLUTION

PARDO, J. :

The case before the Court is a petition for review on certiorari [1] to annul the decision of
the Court of Appeals,[2]reversing and setting aside the decision of the Regional Trial
Court,[3], dated November 10, 1992, Judge Teodoro P. Regino. 3 Quezon City, Branch
84, in an action for specific performance with consignation.

On March 8, 1987, at Quezon City, Norma Rosel entered into a loan agreement with
petitioner Natalia Bustamante and her late husband Ismael C. Bustamante, under the
following terms and conditions:

"1. That the borrowers are the registered owners of a parcel of land, evidenced by
TRANSFER CERTIFICATE OF TITLE No. 80667, containing an area of FOUR
HUNDRED TWENTY THREE (423) SQUARE Meters, more or less, situated along
Congressional Avenue.

"2. That the borrowers were desirous to borrow the sum of ONE HUNDRED
THOUSAND (P100,000.00) PESOS from the LENDER, for a period of two (2) years,
counted from March 1, 1987, with an interest of EIGHTEEN (18%) PERCENT per
annum, and to guaranty the payment thereof, they are putting as a collateral SEVENTY
(70) SQUARE METERS portion, inclusive of the apartment therein, of the aforestated
parcel of land, however, in the event the borrowers fail to pay, the lender has the option
to buy or purchase the collateral for a total consideration of TWO HUNDRED
THOUSAND (P200,000.00) PESOS, inclusive of the borrowed amount and interest
therein;

"3. That the lender do hereby manifest her agreement and conformity to the preceding
paragraph, while the borrowers do hereby confess receipt of the borrowed amount." [4]
When the loan was about to mature on March 1, 1989, respondents proposed to buy at
the pre-set price of P200,000.00, the seventy (70) square meters parcel of land covered
by TCT No. 80667, given as collateral to guarantee payment of the loan. Petitioner,
however, refused to sell and requested for extension of time to pay the loan and offered
to sell to respondents another residential lot located at Road 20, Project 8, Quezon City,
with the principal loan plus interest to be used as down payment. Respondents refused
to extend the payment of the loan and to accept the lot in Road 20 as it was occupied
by squatters and petitioner and her husband were not the owners thereof but were mere
land developers entitled to subdivision shares or commission if and when they
developed at least one half of the subdivision area. [5]

Hence, on March 1, 1989, petitioner tendered payment of the loan to respondents which
the latter refused to accept, insisting on petitioner's signing a prepared deed of absolute
sale of the collateral.

On February 28, 1990, respondents filed with the Regional Trial Court, Quezon City,
Branch 84, a complaint for specific performance with consignation against petitioner and
her spouse.[6]

Nevertheless, on March 4, 1990, respondents sent a demand letter asking petitioner to

sell the collateral pursuant to the option to buy embodied in the loan agreement.

On the other hand, on March 5, 1990, petitioner filed in the Regional Trial Court,
Quezon City a petition for consignation, and deposited the amount of P153,000.00 with
the City Treasurer of Quezon City on August 10, 1990. [7]

When petitioner refused to sell the collateral and barangay conciliation failed,
respondents consigned the amount of P47,500.00 with the trial court. [8] In arriving at the
amount deposited, respondents considered the principal loan of P100,000.00 and 18%
interest per annum thereon, which amounted to P52,500.00. [9] The principal loan and
the interest taken together amounted to P152,500.00, leaving a balance of P 47,500.00.
[10]

After due trial, on November 10, 1992, the trial court rendered decision holding:
"WHEREFORE, premises considered, judgment is hereby rendered as follows:

"1. Denying the plaintiff's prayer for the defendants' execution of the Deed of Sale to
Convey the collateral in plaintiffs' favor;

"2. Ordering the defendants to pay the loan of P100,000.00 with interest thereon at 18%
per annum commencing on March 2, 1989, up to and until August 10, 1990, when
defendants deposited the amount with the Office of the City Treasurer under Official
Receipt No. 0116548 (Exhibit "2"); and

"3. To pay Attorney's Fees in the amount of P 5,000.00, plus costs of suit.

"SO ORDERED.

"Quezon City, Philippines, November 10, 1992.

"TEODORO P. REGINO
[11]
"Judge"
On November 16, 1992, respondents appealed from the decision to the Court of
Appeals.[12] On July 8, 1996, the Court of Appeals rendered decision reversing the ruling
of the Regional Trial Court. The dispositive portion of the Court of Appeals' decision
reads:

"IN VIEW OF THE FOREGOING, the judgment appeal (sic) from

is REVERSED and SET ASIDE and a new one entered in favor of the plaintiffs ordering
the defendants to accept the amount of P 47,000.00 deposited with the Clerk of Court of
Regional Trial Court of Quezon City under Official Receipt No. 0719847, and for
defendants to execute the necessary Deed of Sale in favor of the plaintiffs over the 70
SQUARE METER portion and the apartment standing thereon being occupied by the
plaintiffs and covered by TCT No. 80667 within fifteen (15) days from finality hereof.
Defendants, in turn, are allowed to withdraw the amount of P153,000.00 deposited by
them under Official Receipt No. 0116548 of the City Treasurer's Office of Quezon City.
All other claims and counterclaims are DISMISSED, for lack of sufficient basis. No
costs.

"SO ORDERED."[13]
Hence, this petition.[14]

On January 20, 1997, we required respondents to comment on the petition within ten
(10) days from notice.[15] On February 27, 1997, respondents filed their comment. [16]

On February 9, 1998, we resolved to deny the petition on the ground that there was no
reversible error on the part of respondent court in ordering the execution of the
necessary deed of sale in conformity the with the parties' stipulated agreement. The
contract is the law between the parties thereof (Syjuco v. Court of Appeals, 172 SCRA
111, 118, citing Phil. American General Insurance v. Mutuc, 61 SCRA 22; Herrera v.
Petrophil Corporation, 146 SCRA 360).[17]

On March 17, 1998, petitioner filed with this Court a motion for reconsideration of the
denial alleging that the real intention of the parties to the loan was to put up the
collateral as guarantee similar to an equitable mortgage according to Article 1602 of the
Civil Code.[18]

On April 21, 1998, respondents filed an opposition to petitioner's motion for

reconsideration. They contend that the agreement between the parties was not a sale
with right of re-purchase, but a loan with interest at 18% per annum for a period of two
years and if petitioner fails to pay, the respondent was given the right to purchase the
property or apartment for P200,000.00, which is not contrary to law, morals, good
customs, public order or public policy.[19]

Upon due consideration of petitioner's motion, we now resolve to grant the motion for
reconsideration.

The questions presented are whether petitioner failed to pay the loan at its maturity date
and whether the stipulation in the loan contract was valid and enforceable.

We rule that petitioner did not fail to pay the loan.

The loan was due for payment on March 1, 1989. On said date, petitioner tendered
payment to settle the loan which respondents refused to accept, insisting that petitioner
sell to them the collateral of the loan.
When respondents refused to accept payment, petitioner consigned the amount with the
trial court.

We note the eagerness of respondents to acquire the property given as collateral to

guarantee the loan. The sale of the collateral is an obligation with a suspensive
condition.[20] It is dependent upon the happening of an event, without which the
obligation to sell does not arise. Since the event did not occur, respondents do not have
the right to demand fulfillment of petitioner's obligation, especially where the same
would not only be disadvantageous to petitioner but would also unjustly enrich
respondents considering the inadequate consideration (P200,000.00) for a 70 square
meter property situated at Congressional Avenue, Quezon City.

Respondents argue that contracts have the force of law between the contracting parties
and must be complied with in good faith. [21] There are, however, certain exceptions to
the rule, specifically Article 1306 of the Civil Code, which provides:

"Article 1306. The contracting parties may establish such stipulations, clauses, terms
and conditions as they may deem convenient, provided they are not contrary to law,
morals, good customs, public order, or public policy."

A scrutiny of the stipulation of the parties reveals a subtle intention of the creditor to
acquire the property given as security for the loan. This is embraced in the concept
of pactum commissorium, which is proscribed by law.[22]

"The elements of pactum commissorium are as follows: (1) there should be a property
mortgaged by way of security for the payment of the principal obligation, and (2) there
should be a stipulation for automatic appropriation by the creditor of the thing
mortgaged in case of non-payment of the principal obligation within the stipulated
period."[23]

In Nakpil vs. Intermediate Appellate Court, [24] we said:

"The arrangement entered into between the parties, whereby Pulong Maulap was to be
"considered sold to him (respondent) xxx in case petitioner fails to reimburse Valdes,
must then be construed as tantamount to pactum commissorium which is expressly
prohibited by Art. 2088 of the Civil Code. For, there was to be automatic appropriation of
the property by Valdes in the event of failure of petitioner to pay the value of the
advances. Thus, contrary to respondent's manifestation, all the elements of a pactum
commissorium were present: there was a creditor-debtor relationship between the
parties; the property was used as security for the loan; and there was automatic
appropriation by respondent of Pulong Maulap in case of default of petitioner."

A significant task in contract interpretation is the ascertainment of the intention of the

parties and looking into the words used by the parties to project that intention. In this
case, the intent to appropriate the property given as collateral in favor of the creditor
appears to be evident, for the debtor is obliged to dispose of the collateral at the pre-
agreed consideration amounting to practically the same amount as the loan. In effect,
the creditor acquires the collateral in the event of non payment of the loan. This is within
the concept of pactum commissorium. Such stipulation is void.[25]

All persons in need of money are liable to enter into contractual relationships whatever
the condition if only to alleviate their financial burden albeit temporarily. Hence, courts
are duty bound to exercise caution in the interpretation and resolution of contracts lest
the lenders devour the borrowers like vultures do with their prey.

WHEREFORE, we GRANT petitioner's motion for reconsideration and SET ASIDE the
Court's resolution of February 9, 1998. We REVERSE the decision of the Court of
Appeals in CA-G. R. CV No. 40193. In lieu thereof, we hereby DISMISS the complaint
in Civil Case No. Q-90-4813.

No costs.

SO ORDERED.
[20]
Article 1181, Civil Code. In conditional obligations, the acquisition of the rights, as
well as the extinguishment or loss of those already acquired, shall depend upon the
happening of the event which constitutes the condition.

[21]
Article 1159, Civil Code.

[22]
Article 2088, Civil Code. The creditor cannot appropriate the things given by way of
pledge or mortgage, or dispose of them. Any stipulation to the contrary is null and void.
 FIRST DIVISION

[ G.R. No. L-48276, September 30, 1987 ]

DR. PEDRO A. DANAO (SUBSTITUTED BY HIS HEIRS MARTIN DANAO, MINDA

DANAO AND CO-PETITIONER CONCEPCION S. DANAO) AND CONCEPCION S.
DANAO, PETITIONERS, VS. HON. COURT OF APPEALS, BANK OF THE
PHILIPPINE ISLANDS, SUCCESSOR TO THE PEOPLES BANK & TRUST COMPANY,
RESPONDENTS.

[G.R. NO. L-48980. SEPTEMBER 30, 1987]

BANK OF THE PHILIPPINE ISLANDS, SUCCESSOR TO THE PEOPLES BANK &

TRUST COMPANY, PETITIONER, VS. HON. COURT OF APPEALS, DR. PEDRO A.
DANAO (SUBSTITUTED BY HIS HEIRS MARTIN DANAO, MINDA DANAO AND CO-
RESPONDENT CONCEPCION S. DANAO) AND CONCEPCION S. DANAO,
RESPONDENTS.

DECISION

PARAS, J.:

These are two petitions for review on certiorari of the decision[1] of respondent Court of
Appeals in CA-G.R. No. 59865-R, promulgated on April 14, 1978 (Rollo, p. 22), affirming
the decision[2] of the Court of First Instance of Manila with
modifications. The dispositive portion of the appellate judgment reads:

"WHEREFORE, with the modifications that the actual and compensatory damages are
eliminated, the moral damages are reduced to P30,000.00, and the attorney's fees are
likewise reduced to P5,000.00, the decision appealed from is affirmed.

The facts of the cases involved are quoted from the decision of respondent Court of
Appeals as follows:
"On February 27, 1963, spouses Pedro Danao and Concepcion S. Danao applied for a
commercial credit line of P20,000.00 with the People's Bank and Trust Company. The
application having been granted, the parties onMarch 14, 1963, executed a Commercial
Credit Agreement and Mortgage in which, among others, they stipulated:

'WHEREFORE, the said mortgagor(s) have offered and agreed to secure the repayment
of the said credits and advances with interest due or accruing thereon as well as any
other liability or liabilities of the said mortgagors to the said mortgagee, now existing,
due or to become due, or hereafter incurred by means of a good and valid mortgage as
hereinafter stated, and the mortgagee has consented to grant the line of credit applied
for a good and sufficient security;

'NOW, THEREFORE, in consideration of the premises and of the mutual covenants

herein set forth the parties do have agreed and do hereby agree, as follows:

'The said mortgagor(s) shall be and are hereby granted a line of credit not to exceed at
any one time the sum total of TWENTY THOUSAND AND 00/000 (P20,000.00) at NINE
(9%) per cent per annum, which credit shall be available to said Mortgagor(s) or
EITHER OF THEM in the form of advances from time to time to be evidenced by
promissory note or notes. x x x'

and on the mortgage that -

'This mortgage shall continue as security for the payment of the indebtedness herein
contracted by said Mortgagor(s) as aforesaid, and of all money expanded or liabilities
incurred by virtue hereof, with interest thereon, as well as security for the repayment of
any other sums now or hereafter owing to the said Mortgagee in addition to or aside
from the credit facilities herein granted by the Mortgagee to the Mortgagor(s).

'F. - In the event that the Mortgagor(s) should fail to pay the sums of money secured by
the mortgage, or any part thereof, in accordance with the terms and conditions herein
set forth, x x x, the Mortgagee shall have the right, at its election, to foreclose this
mortgage extrajudicially. x x x.

'The proceeds of such sale of the mortgaged properties shall be applied as

follows: x x x. 3) To the satisfaction of the principal amount of obligation herein
secured; and 4) To the satisfaction of all further obligations owing by the Mortgagor(s) to
the Mortgagee.'

"Given as a security for the credit line of P20,000.00 was a parcel of land in the City
of Baguio, covered by Transfer Certificate of Title No. T-233, together with the buildings
and improvements thereon.

"The spouses availed of the credit facility granted them by the People's Bank and Trust
Company not only during the original term of one year, but also during the renewals or
extensions thereof. The last promissory note signed by Pedro Danao during the
extensions was fully paid on July 5, 1968.

"It appears that October 28, 1963, Antonio Co Kit and Pedro Danao signed a promissory
note for P10,000.00. The two agreed to pay the note, jointly and severally, within 179
days after date. The check for the proceeds of the note was issued in the name of
Antonio Co Kit alone. The note was renewed by Antonio Co Kit and Pedro Danao for
the amount of P8,650.00 on April 27, 1964, payable within 91 days. They promised to
pay the amount, jointly and severally.

"On September 30, 1968, counsel for the People's Bank and Trust Company wrote a
demand letter to Antonio Co Kit and Pedro Danao for the payment of the balance of the
promissory note in the amount of P5,870.09.

"On July 14, 1969, the manager of the People's Bank and Trust Company wrote another
demand letter, this time to Pedro Danao, for the payment of the balance of P4,225.15,
excluding interest.

"On September 19, 1969, the People's Bank and Trust Company filed a complaint in the
City Court of Baguio City against Antonio Co Kit and Pedro Danao, praying that
judgment be rendered, ordering defendants, jointly and severally, to pay it (plaintiff) the
sum of P4,225.15, plus interest thereon at the rate of 13.5% per annum from July 8,
1969 until full payment, attorney's fees in the sum equal to 10% of the total amount due,
and the costs of suit.

"On January 5, 1971, the City Court issued an order, dismissing the complaint 'for lack
of interest on the part of the plaintiff.'

"On March 1, 1971, the branch manager of the People's Bank and Trust
Company, Baguio Branch, wrote a letter to Pedro Danao, informing the latter that they
had filed a petition for foreclosure to the City Sheriff of Baguio City, attaching therewith a
copy of the petition. Stated therein is that the parcel of land covered by Transfer
Certificate of Title No. 2033 will be sold at public auction. According to the petition, the
land is security for the payment of any other sums owing to the Bank 'in addition to or
aside from x x x credit facility.' The indebtedness to be satisfied out of the proceeds of
the foreclosure sale is P3,024.03, exclusive of interest.

"On March 4, 1971, notice of public auction sale was published in the Baguio Midland
Courier, a weekly newspaper published and edited in the City of Baguio and which is of
wide circulation in the City, province ofBenguet and in the Philippines, for three
consecutive weeks, once a week. Copies of the notice were also posted in three public
and conspicuous places in Baguio for the information of the public. In the published
notice of public auction sale, it is stated that in the petition for foreclosure it is alleged
that Mortgagors' spouses PEDRO DANAO and CONCEPTION DANAO, x x x,
x x x failed to pay the x x x loan when it fell due thereby violating the terms and
conditions of the real estate mortgage above mentioned.

"On March 10, 1971, counsel for the People's Bank and Trust Company, Baguio Branch,
wrote a letter, informing the Bank of the full payment of the obligations of Antonio Co Kit
and Pedro Danao.

"On March 16, 1971, the branch manager of the People's Bank and Trust Company
executed a cancellation of the real estate mortgage, stating therein that the mortgagors
had fully paid the obligation or indebtedness secured by the mortgage.

"On June 16, 1972, Pedro Danao and Concepcion S. Danao filed a complaint for
damages against the Bank of Philippine Islands, as successor to the People's Bank and
Trust Company, in the Court of Instance of Manila, where it was docketed as Civil Case
No. 8781.

"The complaint alleged, inter alia, that both the petition for foreclosure and the notice of
public auction sale published in the 'Baguio Midland Courier' have neither legal nor
factual bases, because (1) while the credit line was availed of from time to time in
different amounts by promissory notes, the credits and loans obtained were dully paid in
1968 and since then no further loans were availed of under the credit line secured by
mortgage of the plaintiffs' properties; (2) the plaintiffs' alleged indebtedness mentioned
in the defendant's petition for foreclosure and in the consequent notice of public auction
sale was the balance due on a 'clean loan' granted by the defendant to Antonio Co Kit,
although admittedly the promissory note was cosigned by plaintiff Pedro Danao, and
the same was a distinct and separate transaction from the plaintiffs' credit line, and was
not covered nor secured by the plaintiffs' properties mortgaged to the defendant. The
complaint further alleged that the publication of the notice of public auction sale in the
'Baguio Midland Courier' was malicious and/or with deliberate intent, or was due to
gross negligence, causing the plaintiffs, who are respected members of the community
of Baguio City, untold mental and moral anguish, serious anxiety, besmirched reputation
and social humiliation; that as a result of his social humiliation, anxiety, mental and
moral anguish, plaintiff Pedro Danao suffered serious heart attack and was hospitalized
and confined in bed for a period of one year, causing him to incur hospitalization and
medical expenses, and resulting in the loss of his income from his medical
practice. The plaintiffs ask for actual or compensatory, moral and exemplary damages,
as well as attorney's fees.

"In its answer with conterclaim, the People's Bank and Trust Company contended that in
filing the petition for extra-judicial foreclosure of the mortgage with the consequent
publication of notice of public auction sale, it merely exercised its legal right as creditor-
mortgagee after plaintiff Pedro Danao had defaulted, despite repeated demands, in the
payment of the indebtedness or obligation contracted by him jointly and severally with
Antonio Co Kit; that in exercising such right, it acted lawfully, in good faith and with
full justification to protect its interest; and, asaffirmative defense, alleged that, contrary
to plaintiffs' allegations, the Commercial Credit Agreement and Mortgagee provides that
the mortgage shall continue as security for the payment of the indebtedness therein
contracted by the mortgagors, 'as well as security for the repayment of any other sums
x x x (then or thereafter) owing to the said mortgagee in addition to or aside from the
credit facilities (therein) granted by the Mortgagee to the Mortgagors; and that plaintiff
Pedro Danao's solidary obligation upon the promissory note signed by him as co-maker
jointly and severally with Antonio Co Kit constitutes a further obligation secured by the
aforementioned mortgage, in addition to the indebtedness arising from the commercial
credit line, which additional obligation was subsisting at the time the extrajudicial
foreclosure proceeding was commenced.

"After the issues had been joined upon the filing of the answer to the counterclaim and
reply to answer, the case was set for pre-trial.

"After trial on the merits, the Court of First Instance of Manila rendered a decision
the dispositive part of which read as follows:
'WHEREFORE, in view of all the foregoing considerations, the Court hereby renders
judgment in favor of the plaintiffs and against the defendant ordering the latter to pay
the former the sum of P14,290.00 as actual and compensatory damages, P100,000.00,
as moral damages, and P10,000.00, as exemplary damages, in addition to P20,000.00
as and for attorney's fees, as well as the costs of suit. The counterclaim is dismissed.

"SO ORDERED."

From this decision only the Bank of the Philippine Islands as successor of Peoples Bank
and Trust Company appealed. Respondent Court affirmed the trial court's decision with
some modifications as earlier quoted. Both parties moved for reconsideration. The
motion for reconsideration filed by Pedro and Concepcion Danao, as plaintiff-
appellees (Rollo, p. 39) was denied in respondent Court's resolution dated May 9, 1978
(Rollo, p. 48), while the motion for reconsideration filed by the Bank of the Philippine
Islands, as defendant-appellant (Rollo, p. 41), was also denied in the resolution of the
same Appellate Court dated September 6, 1978 (Rollo, p. 53).

Hence, these petitions filed by both parties.

The petition in G.R. No. L-48276 was filed with the Court by the spouses Dr. Pedro
A. Danao and Concepcion S.Danao on June 7, 1978 (Rollo, p. 5); while the petition in
G.R. No. L-48980 was filed by the Bank of the Philippine Islands on October 7,
1978 (Rollo, p. 7).

In G.R. No. L-48276 respondent bank filed its comment on the petition for review
on certiorari (Rollo, L-48276, p. 114) in compliance with the resolution of the First
Division of this Court dated June 27, 1978 (ibid, p. 107) on August 8, 1978 while the
petitioners filed their reply on September 14, 1978 (ibid, p. 265) in compliance with the
resolution of August 21, 1978 (ibid, p. 261). The Court gave due course to the petition
in the resolution datedOctober 4, 1978 (ibid, p. 274). The brief for the petitioners was
filed on December 5, 1978 (ibid, p. 277); while the brief for the respondent, was filed
on February 3, 1979 (ibid, p. 301). Petitioner having failed to file the required reply brief
within the period granted by the Court which expired on March 1, 1979, the Court
resolved on April 16, 1979 (ibid, p. 305) to declare the case submitted for decision.

In G.R. No. L-48980, respondents filed their comment on the petition for review
on certiorari on November 15, 1978 (Rollo, L-48980, p. 62) in compliance with the
resolution of the Second Division of this Court dated October 18, 1978 (ibid, p. 61) while
petitioner filed its Reply on January 18, 1979 (ibid, p. 76) in compliance with the
resolution of December 4, 1978 (Rollo, p. 73). The Court resolved to give due course to
the petition in the resolution of March 21, 1979 (ibid, p. 83). The brief for petitioner was
filed on June 23, 1979 (ibid, p. 98); while the brief for respondent was filed on July 8,
1979 (ibid, p. 101). On September 14, 1979 the Court resolved to consider the case
submitted for decision (ibid, p. 105), petitioner having failed to file its reply brief within
the period granted by the Court whichexpired on August 7, 1979.

On April 29, 1980, the spouses Pedro and Concepcion Danao, petitioners in L-48276
and private respondents in L-48980 moved for the consolidation of the two cases (Rollo,
L-48276, p. 308) which was granted by the FirstDivision of the Court in its resolution
dated May 7, 1980 (ibid, p. 311). On July 2, 1980 the Second Division of the Court also
ordered the consolidation of L-48980 with L-48276 and the transfer of the case to the
First Division of the Court (Rollo, L-48980, p. 110).

On August 16, 1985, counsel for the spouses Pedro and Concepcion Danao manifested
to the Court the death of his client Pedro Danao and moved for the substitution of the
heirs Martin Danao and Minda Danao as co-petitioners and co-respondents
of Concepcion Danao in the instant cases (Rollo, L-48276, p. 327). On September 4,
1985 the heirs submitted to the Court a copy of the death certificate of Pedro
A. Danao (ibid, p. 341), hence the effecting of the substitution.

In L-48276, petitioners raised the following assignment of errors:

FIRST - THE COURT OF APPEALS ERRED IN FINDING THAT THE REAL ESTATE
MORTGAGED UNDER THE COMMERCIAL CREDIT AGREEMENT & MORTGAGE BY
AND BETWEEN THE PARTIES ALSO SECURED THE CLEAN LOAN EXTENDED TO
MR. ANTONIO CO KIT, THE PROMISSORY NOTE FOR WHICH WAS CO-SIGNED BY
PETITIONER DR. PEDRO A. DANAO.

SECOND - THE COURT OF APPEALS ERRED IN FINDING THAT THE ILLNESS AND
HEART ATTACKS SUFFERED BY PETITIONER DR. PEDRO A. DANAO HAD NO
CASUAL RELATIONSHIP TO THE FORECLOSURE OF MORTGAGE AND
PUBLICATION OF THE NOTICE OF AUCTION SALE.
THIRD - THE COURT OF APPEALS ERRED IN REDUCING THE MORAL DAMAGES
AND ATTORNEY'S FEES AWARDED BY THE TRIAL COURT.

In L-48980, petitioner bank raised the following assignment of errors:

I. The Court of Appeals erred in holding that petitioner's predecessor Peoples Bank and
Trust Company, by filing a civil complaint against Antonio Co Kit and Pedro A. Danao in
the Baguio City Court for the collection of the unpaid balance of the latter's promissory
note "had waived" the remedy of extra-judicial foreclosure of mortgage, and "such
complaint barred the subsequent petition for foreclosure of mortgage."

II. The Court of Appeals erred in concluding that the extrajudicial foreclosure of
mortgage ultimately resorted to as a last recourse to enforce payment of the
outstanding balance long past due on Co Kit and Danao's promissory note "was
unwarranted", and in not holding that said bank as creditor-mortgagee acted lawfully
and was fully justified in exercising such remedy.

III. The Court of Appeals erred in awarding moral damages, exemplary damages and
attorney's fees to the plaintiffs-appellees, private respondents herein.

IV. The Court of Appeals erred in not awarding at least temperate damages and
reasonable attorney's fees upon defendant-appellant bank's counterclaim
against the plaintiffs-appellees, private respondents herein.

Plaintiffs' (Petitioners in L-48276 and respondents in L-48980) claim for damages is

predicated on the theory that the real estate mortgage executed by them on March 14,
1963 in favor of defendant did not secure the solidaryobligation of Dr. Danao upon the
promissory note signed by him jointly and severally with Antonio C. Kit on October 28,
1963 and therefore, defendant's act in foreclosing said mortgagee extrajudicially was
unwarranted. (Respondent's brief in L-48276, Rollo, p. 301).

Placed in proper perspective, the deed of mortgage otherwise called "Commercial

Credit Agreement and Mortgage" is under scrutiny not for the purposes of the loan itself
because the same has been fully paid but for the determination of the legality or
illegality of the foreclosure proceedings instituted by the bank, which is now the subject
of the action for damages.
The creditor bank insists that the promissory note co-signed by Dr. Danao with Antonio
C. Kit as accommodation party for the latter, is secured by the deed of mortgage in favor
of the bank so that in the foreclosure proceedings so instituted, it was merely exercising
its rights as stipulated in the contract and was acting with justification. (L-48980,
Petition, Rollo, p. 19).

Be that as it may, such distinction is in fact immaterial for even assuming

that the promissory note of Antonio C. Kitwas indeed included among the obligations
secured by the deed of mortgage of Dr. Danao, still the creditor bank in opting to file a
civil action (Civil Case No. 4281) in the Baguio City Court for the collection of the unpaid
balance of P4,225.15 plus interest has abandoned its mortgage lien on the property in
question.

Thus the Court has invariably held that:

"x x x The rule is now settled that a mortgage creditor may elect to waive his security
and bring, instead, an ordinary action to recover the indebtedness with the right to
execute a judgment thereon on all the properties of the debtor, including the subject
matter of the mortgage x x x, subject to the qualification that if he fails in the remedy by
him elected, he cannot pursue further the remedy he has waived." (Manila Trading and
Supply Co. vs. Co Kim, et al. 71 Phil. 448 [1941]; Movido v. RFC, et al. 105 Phil. 886
[1959]).

Anent real properties in particular, the Court has laid down the rule that a mortgage
creditor may institute against the mortgage debtor either a personal action for debt or a
real action to foreclose the mortgage. In other words, he may pursue either of the two
remedies, but not both. As explained by the Court, the rule is as follows:

"For non-payment of a note secured by mortgage, the creditor has a single cause of
action against the debtor. This single cause of action consists in the recovery of the
credit with execution of the security. In other words, the creditor in his action may make
two demands, the payment of the debt and the foreclosure of the mortgage. But both
demands arise from the same cause, the non-payment of the debt, and, for that reason,
they constitute a single cause of action. Though the debt and the mortgage constitute
separate agreements, the latter is subsidiary to the former, and both refer to one and
the same obligation. Consequently there exists only once cause of action for a single
breach of that obligation. Plaintiff, then, by applying the rule above stated cannot split
up his single cause of action by filing a complaint for payment of the debt, and thereafter
another complaint for foreclosure of the mortgage. If he does so, the filing of the first
complaint will bar the subsequent complaint. By allowing the creditor to file two
separate complaints simultaneously or successively, one to recover his credit and
another to foreclose his mortgage, we will, in effect, be authorizing him plural redress for
a single breach of contract at much cost to the courts and with so much vexation and
oppression to the debtor.

"x x x a rule that would authorize the plaintiff to bring a personal action against the
debtor and simultaneously or successively another action against the mortgaged
property, would result not only in multiplicity of suits so offensive to justice (Soriano v.
Enriquez, 24 Phil. 584) and obnoxious to law and equity (Osorio v. San Agustin, 25 Phil.
404), but also in subjecting the defendant to the vexation of being sued in the place of
his residence or of the residence of the plaintiff, and then again in the place where the
property lies." (Bachrach Motor Co. Inc. v. EstebanIcarangal, et al., 38 Off. Gaz. 389
[1939]).

Evidently, the prior recourse of the creditor bank in filing a civil action against
the Danao spouses and subsequently resorting to the complaint of foreclosure
proceedings, are not only a demonstration of the prohibited splitting up of a cause of
action but also of the resulting vexation and oppression to the debtor.

Both the lower court and the Court of Appeals found that the People's Bank and Trust
Co. (succeeded by the Bank of the Philippine Islands) acted unlawfully and without
justification in extra-judicially foreclosing the disputed mortgage and hence
the Danao spouses are entitled to damages.

As basis for actual damages, the lower court relied on the testimonies of
Mrs. Danao and Dr. Rodolfo Perez and the medical certificates of the various doctors
and came out with the award of actual and compensatory damages in the total amount
of P14,290.00 in favor of the same spouses, computed as follows: (1) P1,290.00
representingmedical and hospitalization expenses of Pedro Danao while confined at the
Manila Medical Center from October 1 to October 12, 1972; (2) P7,000.00 as costs for
various examinations; and (3) P6,000.00 supposed to be the amount of income lost by
Pedro Danao from his medical practice because of this incident.
But the evidence as correctly appreciated by the Court of Appeals shows that the first
mild heart attack suffered by Pedro Danao occurred in October 1977 or more than
seven months after the initial publication of the notice of foreclosure sale and the
second heart attack occured in October 1978 or more than 19 months after said
publication. No less important is the fact that Dr. Rodolfo Perez, the regular attending
physician of Pedro Danaoand the latter's own witness, testified to the effect, that
aforesaid heart attacks were the natural result or outgrowth of a chronic rheumatic heart
disease of long standing which developed over a period of years, possibly even before
1966. (Decision D.A. G.R. No. 59865-R; Rollo, pp. 36-37).

The second item was found to be unsupported by evidence while as to the third item,
Pedro Danao did not testify to prove the alleged lost income. (Ibid, p. 37). In the case
of Sy v. Court of Appeals (131 SCRA 127 [1984]) the Court ruled that an alleged loss of
income is not recoverable for being speculative if no receipt or any kind of evidence on
the matter is presented to prove it.

The Court has ruled that actual or compensatory damages are "those recoverable
because of pecuniary loss in business, trade, property, profession, job or occupation
and the same must be proved, otherwise if the proof is flimsy and non-substantial, no
damages will be given." (Perfecto v. Gonzales, 128 SCRA 640 [1984]).

More specifically in point to the case at bar, the Court has said:

"x x x Well settled is the rule that even if the complaint filed by one against the other is
clearly unfounded this does not necessarily mean, in the absence of specific facts
proving damages, that said defendant really suffered actual damages over and above
attorney's fees and costs. The Court cannot rely on its speculations as to the fact and
amount of damages. It must depend on actual proof of the damages alleged to have
been suffered." (Ibid, p. 640).

On the other hand, moral damages may be recovered if they are the proximate result of
the defendant's wrongful act or omission. The assessment of such damages, except
liquidated ones, is left to the discretion of the court, according to the circumstances of
the case. (People v. Baylon, 129 SCRA 63 [1984]).

As a general rule, the filing alone of the foreclosure application should not be a ground
for an award of moral damages.
In the case at bar, however, the main bone of contention is not only the filing of the
petition for foreclosure proceedings but the manner in which the same was carried out,
such as the publication of the notice of extrajudicial foreclosure and sale at public
auction in a Sunday edition of the Baguio Midland Courier in the society page, instead
of in the "legal notices" or "classified ads" sections as usual in these types of notices, in
extraordinarily large and boxed advertisements, which allegedly bespoke the bank's
malicious intent to embarrass and harass the Danao spouses which actuations are
contrary to the canons of conduct provided for in Articles 19, 20 and 21 of the Civil
Code. (Comment, Rollo, p. 67)

Both the lower court and the Court of Appeals took cognizance of the spouses' mental
anguish, serious anxiety and besmirched reputation traceable to the unfortunate
publication (Record on Appeal, p. 79; Rollo, p. 38).

For moral damages, the lower court awarded P100,00.00 but the Court of Appeals
reduced said amount to P30,000.00 and attorney's fees from P20,000.00 to P5,000.00.

We have laid down the rule that the fairness of the award of damages by the trial court
also calls for appellate determination (Luzon Concrete Products Inc. v. Court of Appeals,
135 SCRA 456 [1985]), such that where the award of moral damages is far too
excessive compared to the actual losses sustained by the claimants, the former may be
reduced. (Siguenza v. Court of Appeals, 137 SCRA 577-579). In fact, We have held
that reduction of moral damages is justified where the negligence of petitioner bank and
its employees is not wanton and reckless. (Bank of the Philippine Islands v. Court of
Appeals, 117 SCRA 628).

After a careful review of the records, no plausible reason can be found to justify the
reversal of the findings of the Court of Appeals, however in view of the embarrassing
circumstances attendant to the foreclosure notice, as already explained hereinabove,
We hereby MODIFY the judgment of the respondent Court of Appeals by increasing the
award of moral damages to P60,000.00 and the attorney's fees to P10,00.00, and by
imposing exemplary damages the amount of P20,000.00.

SO ORDERED.
PARTITION
 EN BANC

[ G.R. No. 103727, December 18, 1996 ]

INTESTATE ESTATE OF THE LATE DON MARIANO SAN PEDRO Y ESTEBAN,

REPRESENTED BY ITS HEIR-JUDICIAL ADMINISTRATOR, ENGRACIO F. SAN
PEDRO, PETITIONER-APPELLANT, VS. COURT OF APPEALS (SECOND DIVISION),
AURELIO OCAMPO, DOMINADOR D. BUHAIN, TERESA C. DELA CRUZ,
RESPONDENTS-APPELLEES.

[G.R. NO. 106496. DECEMBER 18, 1996]

ENGRACIO SAN PEDRO, CANDIDO GENER, ROSA PANTALEON, VICENTE

PANTALEON, ELEUTERIO PANTALEON, TRINIDAD SAN PEDRO, RODRIGO SAN
PEDRO, RICARDO NICOLAS, FELISA NICOLAS, AND LEONA SAN PEDRO,
PETITIONERS, VS. THE HONORABLE COURT OF APPEALS, (SIXTEENTH
DIVISION) AND REPUBLIC OF THE PHILIPPINES, RESPONDENTS.

DECISION

HERMOSISIMA, JR., J.:

The most fantastic land claim in the history of the Philippines is the subject of
controversy in these two consolidated cases. The heirs of the late Mariano San Pedro y
Esteban laid claim and have been laying claim to the ownership of, against third
persons and the Government itself, a total land area of approximately 173,000 hectares
or "214,047 quiniones,"[1] on the basis of a Spanish title, entitled "Titulo de Propriedad
Numero 4136" dated April 25, 1894. The claim, according to the San Pedro heirs,
appears to cover lands in the provinces of Nueva Ecija, Bulacan, Rizal, Laguna and
Quezon; and such Metro Manila cities as Quezon City, Caloocan City, Pasay City, City
of Pasig and City of Manila, thus affecting in general lands extending from Malolos,
Bulacan to the City Hall of Quezon City and the land area between Dingalan Bay in the
north and Tayabas Bay in the south. [2]

Considering the vastness of the land claim, innumerable disputes cropped up and land
swindles and rackets proliferated resulting in tedious litigation in various trial courts, in
the appellate court and in the Supreme Court, [3]in connection therewith.
We have had the impression that our decisions in Director of Forestry, et al. v. Muoz,
23 SCRA 1183 [1968]; Antonio, et al. v. Barroga, et al., 23 SCRA 357 [1968]; Carabot,
et al. v. Court of Appeals, et al., 145 SCRA 368 [1986]; Republic v. Intermediate
Appellate Court, et al., 186 SCRA 88 [1990]; Widows and Orphans Association, Inc.
(WIDORA) v. Court of Appeals, et al., 212 SCRA 360 [1992]; NAPOCOR v. Court of
Appeals, et al., 144 SCRA 318 [1986]; Republic v. Court of Appeals, et al., 135 SCRA
156 [1985]; and Director of Lands v. Tesalona, 236 SCRA 336 [1994] [4] terminated the
controversy as to ownership of lands covered by Spanish Land Titles, for it is the rule
that, once this Court, as the highest Tribunal of the land, has spoken, there the matter
must rest:

"It is withal of the essence of the judicial function that at some point, litigation must end.
Hence, after the procedures and processes for lawsuits have been undergone, and the
modes of review set by law have been exhausted, or terminated, no further ventilation
of the same subject matter is allowed. To be sure, there may be, on the part of the
losing parties, continuing disagreement with the verdict, and the conclusions therein
embodied. This is of no moment, indeed, is to be expected; but, it is not their will, but
the Courts, which must prevail; and, to repeat, public policy demands that at some
definite time, the issues must be laid to rest and the courts dispositions thereon
accorded absolute finality."[5] [Cited cases omitted]

It is, therefore, to the best interest of the people and the Government that we render
judgment herein writing finis to these controversies by laying to rest the issue of validity
of the basis of the estates claim of ownership over this vast expanse of real property.

The following facts are pertinent in the resolution of these long drawn-out cases:

G.R. NO. 103727

G.R No. 103727, an appeal by certiorari, arose out of a complaint [6] for recovery of
possession and/or damages with a prayer for a writ of preliminary injunction. This was
dismissed by the Regional Trial Court, National Capital Judicial Region, Branch 104,
Quezon City in its decision[7] dated July 7, 1989, the dispositive portion [8] of which reads:

"WHEREFORE, judgment is hereby rendered, dismissing the complaint against the

defendants Aurelio Ocampo, Dominador Buhain and Teresa dela Cruz and ordering
plaintiff to pay each of the herein defendants, the sum of FIVE THOUSAND PESOS
(P5,000.00) as and for attorneys fees, and to pay the costs of suit."

The said complaint for recovery of possession of real property and/or reconveyance
with damages and with a prayer for preliminary injunction was filed on August 15, 1988
by Engracio San Pedro as heir-judicial administrator of the "Intestate Estate of Don
Mariano San Pedro y Esteban" against Jose G. De Ocampo, Aurelio Ocampo,
MARECO, Inc., Rey Antonio Noguera, Teresa C. dela Cruz, Gaudencio R. Soliven,
Diomedes Millan, Carmen Rayasco, Dominador D. Buhain, Mario D. Buhain, Jose D.
Buhain, Arestedes S. Cauntay, Manuel Chung and Victoria Chung Tiu (El Mavic
Investment & Development Corporation), Capitol Hills Realty Corporation and Jose F.
Castro. The complaint was docketed as Civil Case No. Q-88-447 in Branch 104,
Regional Trial Court of Quezon City.

In the complaint, it was alleged, among others: (1) that Engracio San Pedro discovered
that the aforenamed defendants were able to secure from the Registry of Deeds of
Quezon City titles to portions of the subject estate, particularly Transfer Certificates of
Title Nos. 1386, 8982, 951975-951977, 313624, 279067, 1412, 353054, 372592,
149120, 86404, 17874-17875, all emanating from Original Certificate of Title No.
614[9] and Transfer Certificates of Title Nos. 255544 and 264124, both derivatives of
Original Certificate of Title No. 333; (2) that the aforesaid defendants were able to
acquire exclusive ownership and possession of certain portions of the subject estate in
their names through deceit, fraud, bad faith and misrepresentation; (3) that Original
Certificates of Title Nos. 614 and 333 had been cancelled by and through a final and
executory decision dated March 21, 1988 in relation to letter recommendations by the
Bureau of Lands, Bureau of Forest Development and the Office of the Solicitor General
and also in relation to Central Bank Circulars dated April 7, 1971, April 23, 1971,
September 12, 1972 and June 10, 1980; and (4) that the issue of the existence, validity
and genuineness of Titulo Propriedad No. 4136 dated April 25, 1894 which covers the
subject estate had been resolved in favor of the petitioner estate in a decision dated
April 25, 1978 by the defunct Court of First Instance, Branch 1 of Baliwag, Bulacan
pertaining to a case docketed as Special Proceeding No. 312-B. [10]

Summons were served on only five of the aforementioned defendants, namely, Aurelio
Ocampo, MARECO, Inc., Teresita G. dela Cruz, Dominador Buhain and Manuel Chung
and Victoria Chung Tiu.[11]
On February 7, 1989, the lower court ordered the dismissal of the complaint against
Mareco, Inc. for improper service of summons and against Manuel Chung and Victoria
Chung Tiu for lack of cause of action considering that the registered owner of the parcel
of land covered by TCT No. 86404 is El Mavic Investment and Development Co., Inc.,
not Manuel Chung and Victoria Chung Tiu. [12]

Trial on the merits proceeded against the private respondents Ocampo, Buhain and
Dela Cruz.

On July 7, 1989, the lower court rendered judgment dismissing the complaint based on
the following grounds: (a) Ocampo, Buhain and Dela Cruz are already the registered
owners of the parcels of land covered by Torrens titles which cannot be defeated by the
alleged Spanish title, Titulo Propriedad No. 4136, covering the subject estate; and (b)
the decision of the Court of First Instance of Bulacan entitled "In the Matter of the
Intestate Estate of the late Don Mariano San Pedro y Esteban" specifically stated in its
dispositive portion that all lands which have already been legally and validly titled under
the Torrens system by private persons shall be excluded from the coverage of Titulo
Propriedad No. 4136.[13]

The motion for reconsideration thereof was denied, [14] and so, the petitioner estate
interposed an appeal with the Court of Appeals. On January 20, 1992, the appeal was
dismissed[15] for being unmeritorious and the lower courts decision was affirmed with
costs against the petitioner estate. The appellate court ratiocinated:

(1) neither the Titulo Propriedad No. 4136 nor a genuine copy thereof was presented in
the proceeding below;

(2) the illegible copy of the Titulo presented in court was not registered under the
Torrens System hence, it cannot be used as evidence of land ownership;

(3) the CFI decision invoked by petitioner estate in its favor expressly excluded from the
Titulo titled lands of private individuals;

(4) the Titulo is inferior to that of the registered titles of Ocampo, Buhain and Dela Cruz
as correctly ruled by the lower court;
(5) there is no evidence showing that OCT No. 614 from which titles of Ocampo, Buhain
and Dela Cruz originated was already cancelled, hence, the lower court did not err in
not declaring the same as null and void.[16]

Not having obtained a favorable judgment on appeal, the petitioner estate, on March 16,
1992, filed the present petition[17] docketed as G. R. No. 103727.

G.R. NO. 106496

G.R No. 106496, a petition for review on certiorari, began as a petition [18] for letters of
administration over the intestate estate of the late Mariano San Pedro y Esteban which
eventually resulted to an Order [19] dated November 17, 1978 declaring inter alia, Titulo
de Propriedad No. 4136 as null and void and of no legal force and effect.

The dispositive portion[20] of the said Order reads:

"WHEREFORE, this Court so orders that:

1) The Decision dated April 25, 1978 is reconsidered and set aside.

2) Titulo de Propriedad No. 4136 is declared null and void and of no legal force and
effect and that therefore no rights could be derived therefrom.

3) All orders approving the sales, conveyances, donations or any other transactions
involving the lands covered by Titulo de Propriedad No. 4136 are declared invalidated,
void and of no force and effect.

4) All lands covered by Titulo de Propriedad No. 4136 are excluded from the inventory
of the estate of the late Mariano San Pedro y Esteban.

5) The heirs, agents, privies or anyone acting for and in behalf of the estate of the late
Mariano San Pedro y Esteban are enjoined from representing or exercising any acts of
possession or ownership or from disposing in any manner portions of all the lands
covered by Titulo de Propriedad No. 4136 and to immediately vacate the same.

6) Engracio San Pedro and Justino Benito as co-administrators submit in Court within
twenty days their final accounting and inventory of all real and personal properties of the
estate which had come into their possession or knowledge under oath.

7) This case is hereby re-opened, to allow movants-intervenors to continue with the

presentation of their evidence in order to rest their case.

The consideration and approval of the administrators final accounting and inventory of
the presentation of movants-intervenors evidence as well as the consideration of all
other incidents are hereby set on December 22, 1978 at 8:30 a. m."

The aforementioned petition for letters of administration over the intestate estate of the
late Mariano San Pedro y Esteban was filed on December 29, 1971 with the defunct
Court of First Instance of Bulacan, Fifth Judicial District, Branch IV, Baliuag, Bulacan.
The petition docketed as Sp. Proc. No. 312-B was initiated by Engracio San Pedro and
Justino Z. Benito who sought to be appointed as administrator and co-administrator,
respectively.

On February 29, 1972, after the jurisdictional facts were established, evidence for the
petitioners was received by the lower court without any opposition. [21]

On March 2, 1972, then Presiding Judge Juan F. Echiverri issued an Order appointing
Engracio San Pedro as Administrator of the subject estate. [22]

On March 11, 1972, the Court issued letters of administration in favor of Engracio San
Pedro upon posting of a bond in the sum of Ten Thousand Pesos (P10,000.00). [23]

On February 7, 1974, Administrator Engracio San Pedro was ordered to furnish copies
of the letters of administration and other pertinent orders approving certain dispositions
of the properties of the estate to the following entities:
The Commanding General
(a) Philippine Constabulary
Camp Crame, Quezon City
The Solicitor General
(b)
Manila
(c) The Government Corporate Counsel
 A. Mabini St., Manila
(d) The City Mayors of Quezon City & Caloocan
(e) The Governors of Rizal, Quezon and Bulacan
The City Treasurers of Quezon City and
(f)
Caloocan
The Provincial Treasurers of Quezon, Bulacan
(g)
and Rizal
(h) The PHHC, Diliman, Quezon City
(i) The PAHRRA Quezon Boulevard, Quezon City
The Municipal Treasurers of the various
(j)
municipalities in which properties of the estate are
located; and
Office of Civil Relations, Camp Crame, Quezon
(k)
City and Camp Aguinaldo, Quezon City.[24]

The above Order was issued so as to protect the general public from any confusion
brought about by various persons who had been misrepresenting themselves as having
been legally authorized to act for the subject estate and to sell its properties by virtue
thereof.

On August 30, 1976, a Motion for Intervention and an Opposition to the Petition was
filed by the Republic of the Philippines alleging, inter alia:

"4. That under Presidential Decree No. 892, dated February 16, 1976, Spanish titles like
the TITULO is absolutely inadmissible and ineffective as proof of ownership in court
proceedings, except where the holder thereof applies for land registration under Act
496, which is not true in the proceedings at bar;

"5. That no less than the Supreme Court had declared TITULO DE PROPIEDAD NO.
4136 as invalid;

"6. That, moreover, the late Don Mariano San Pedro y Esteban and/or his supposed
heirs have lost whatever rights of ownership they might have had to the so-called Estate
on the ground of inaction, laches and/or prescription;
"7. That, accordingly, there is no estate or property to be administered for purposes of
inventory, settlement or distribution in accordance with law, and all the inventories so far
submitted, insofar as they embraced lands within the TITULO, are deemed ineffective
and cannot be legally considered; and

"8. That the Republic of the Philippines has a legal interest in the land subject matter of
the petition considering that, except such portions thereof had been (sic) already the
subject of valid adjudication or disposition in accordance with law, the same belong in
State ownership."[25]

On February 15, 1977, the Republic filed a Motion to Suspend Proceedings. [26]

On February 16, 1977, the Republics Opposition to the Petition for Letters of
Administration was dismissed by means of the following Order issued by Judge Benigno
Puno:

"WHEREFORE, for lack of jurisdiction to determine the legal issues raised, the Court
hereby DISMISSES the Opposition dated August 30, 1976, filed by the Office of the
Solicitor General; likewise, for lack of merit, the Motion to Suspend Proceedings dated
February 15, 1977, filed by the Office of the Solicitor General is DENIED.

The administrator Engracio San Pedro and the co-administrator Justino Z. Benito are
ordered to furnish the office of the Solicitor General all copies of inventories already filed
in Court within ten (10) days from notice hereof." [27]

On March 9, 1977, a motion for reconsideration was filed by the Republic. [28]

On April 25, 1978, the lower court then presided over by Judge Agustin C.

Bagasao, rendered a 52-page decision, the dispositive portion of which reads:

"WHEREFORE, judgment is hereby rendered:

(a) Declaring the existence, genuineness and authenticity of Titulo de Propriedad No.
4136 of the Registry of Deeds of Bulacan, issued on April 29, 1984, in the name of the
deceased Don Mariano San Pedro y Esteban, covering a total area of approximately
214,047 quiniones or 173,000 hectares, situated in the Provinces of Bulacan, Rizal,
Quezon, Quezon City and Caloocan City;

(b) Declaring Engracio San Pedro, Candido Gener, Santiago Gener, Rosa Pantaleon,
Vicente Pantaleon, Eleuterio Pantaleon, Trinidad San Pedro, Rodrigo San Pedro,
Ricardo Nicolas, and Teresa Nicolas, as the true and lawful heirs of the deceased Don
Mariano San Pedro y Esteban and entitled to inherit the intestate estate left by the said
deceased, consisting of the above-mentioned tract of private land covered and
described by said above-mentioned Titulo de Propriedad No. 4136 of the Registry of
Deeds of Bulacan, excluding therefrom: (a) all lands which have already been legally
and validly titled under the Torrens System, by private persons, or the Republic of the
Philippines, or any of its instrumentalities or agencies; (b) all lands declared by the
government as reservations for public use and purposes; (c) all lands belonging to the
public domain; and, (d) all portions thereof which had been sold, quitclaimed and/or
previously excluded by the Administrator and duly approved by a final order of the
Court, except those which may hereafter be set aside, after due consideration on a case
to case basis, of various motions to set aside the said Court order which approved the
said sales, quitclaims, and/or exclusions;

(c) The designation of Atty. Justino Z. Benito as co-administrator, is hereby revoked to

take effect immediately, to obviate any confusion in the administration of the Estate, and
to fix the responsibilities of administration to the co-heir Administrator, Engracio San
Pedro, whose appointment as such is hereby confirmed. The said co-administrator
Justino Z. Benito is hereby ordered to render his final accounting of his co-
administration of the Estate, within thirty (30) days from receipt of copy hereof;

(d) The Co-Heir-Administrator, Engracio San Pedro is hereby ordered to amass, collate,
consolidate and take possession of all the net estate of the deceased Don Marino San
Pedro y Esteban, as well as all other sets and credits lawfully belonging to the estate
and/or to take appropriate legal action to recover the same in the proper Courts of
Justice, government offices or any appropriate forum; and to pay all taxes or charges
due from the estate to the Government, and all indebtedness of the estate, and
thereafter, to submit a project of partition of the estate among the lawful heirs as herein
recognized and declared.

It is, however, strongly recommended to His Excellency, President Ferdinand E. Marcos

that, to avoid the concentration of too much land to a few persons and in line with the
projected urban land reform program of the government, corollary to the agricultural
land reform program of the New Society, the above intestate estate of the late Don
Mariano San Pedro y Esteban should be expropriated or purchased by negotiated sale
by the government to be used in its human settlements and low cost housing projects.

No Costs.

SO ORDERED."[29]

On May 17, 1978, the Republic moved for a reconsideration of the above decision: [30]

On June 5, 1978, administrator Engracio San Pedro filed a Manifestation and Petition
for the Inhibition of the then newly appointed Presiding Judge Oscar Fernandez. On
July 12,1978, after the Republic filed its Reply to the Petition for Inhibition, Judge
Fernandez denied the said petition. [31]

After hearings were conducted on the Republics Motion for Reconsideration, Judge
Fernandez issued the aforestated Order[32] dated November 17, 1978 which, in essence,
set aside Judge Bagasaos decision dated April 25, 1978 by declaring Titulo de
Propriedad No. 4136 as null and void and of no legal force and effect, thus, excluding all
lands covered by Titulo de Propriedad No. 4136 from the inventory of the estate of the
late Mariano San Pedro y Esteban.

The petitioners-heirs of the late Mariano San Pedro y Esteban appealed to the Court of
Appeals and alleged that the lower court did not act with impartiality when it granted the
Republics motion for reconsideration which was merely pro forma, thereby overturning
a prior declaration by the same court of the existence, genuineness and authenticity of
Titulo de Propriedad No. 4136 in the name of the deceased Mariano San Pedro. [33]

On March 11, 1992, the Court of Appeals dismissed the appeal of the petitioners-heirs.
[34]
In affirming the assailed Order dated November 17, 1978, the appellate court
focused its discussion solely on the issue of whether or not the lower court erred in
declaring Titulo de Propriedad No. 4136 null and void. The appellate court ruled that the
petitioners-heirs failed to controvert the Republics claim that Titulo de Propriedad No.
4136 is invalid on the following bases; (a) non-production of the original of the subject
title; (b) inadmissibility of the photostat copies of the said title; and (c) non-registration of
the subject Spanish title under Act No. 496 (Land Registration Act) as required by
Presidential Decree No. 892 (Discontinuance of the Spanish Mortgage System of
Registration and of the Use of Spanish Titles as Evidence in Land Registration
Proceedings).

The petitioners-heirs moved for a reconsideration of the Court of Appeals decision by

invoking certain cases wherein the validity of Titulo de Propriedad No. 4136 had been
allegedly recognized. The Court of Appeals refused to be swayed and denied the
motion for reconsideration for lack of merit.[35]

Hence, the herein petition,[36] docketed as G. R. No. 106496, was filed on September
18, 1992.

After the parties filed their respective pleadings in G.R. Nos. 103727 and 106496, this
Court resolved to consolidate both cases on September 15, 1994. [37]

While these cases were pending before us, several parties filed separate motions for
intervention which we denied on different occasions for lack of merit.

In G.R. No. 103727, the grounds relied upon for the grant of the petition are as follows:

"I. That petitioner-appellant as plaintiff in Civil Case No. Q-88-447, RTC, Branch 104
was denied due process of law due to gross negligence of lawyer, which respondent
court grossly failed to take cognizance of.

II. That the respondent court committed grave abuse of discretion tantamount to lack of
jurisdiction in not remanding the case for trial and in affirming the lower courts null and
void judgment."[38]

In G.R. No. 106496, the petitioners-heirs present the following assignment of errors, to
wit:

"First. Respondent Court of Appeals affirmed the appealed order which resolved a
question of title or ownership over which the lower court as an intestate court has no
jurisdiction and over the vigorous and repeated objections of the petitioners. [39]
Second. Respondent Court of Appeals erred in upholding the order of Judge Fernandez
setting aside the order and decision of Judge Puno and Bagasao; Judge Fernandez
thereby acted as an appellate court reviewing, revising, amending or setting aside the
order and decision of Judges of equal rank. [40]

Third. Respondent Court of Appeals has no jurisdiction to uphold the order of Judge
Fernandez who without jurisdiction, set aside the order of Judge Puno and the decision
of Judge Bagasao, both of which were already final. [41]

Fourth. Respondent Court of Appeals was unmindful of the fact that Judge Fernandez
was appointed by President Marcos to reverse Judge Bagasao, regardless of the
evidence, thereby unmindful that petitioners were denied the cold neutrality of an
impartial tribunal.[42]

Fifth. Respondent Court of Appeals erred in not considering the evidence presented
before Judges Echiverri, Puno and Bagasao and merely adopted the order of Judge
Fernandez who never received a single piece of evidence, notwithstanding the 1906
Guido title over Hacienda Angono in Binangonan, Rizal, the boundary owner stated
therein being Don Mariano San Pedro y Esteban, and the November 1991 en
banc decision of the Supreme Court upholding the Guido title." [43]

Of paramount importance over and above the central issue of the probative value of the
petitioners Spanish title in these cases is the propriety of the lower courts resolution of
the question of ownership of the subject San Pedro estate in the special proceedings
case. Thus, before we address ourselves to the issue of whether or not petitioners
Titulo de Propriedad No. 4136 is null and void and of no legal force and effect, it is best
that we first determine whether or not the lower court, acting as a probate court, in the
petition for letters of administration, committed grave abuse of discretion amounting to
lack of jurisdiction in settling the issue of ownership of the San Pedro estate covered by
Titulo Propriedad No. 4136.

Petitioners-heirs, in G.R. No. 106496, on the one hand, contend that the lower court,
then CFI, Bulacan, Branch IV, had no jurisdiction as an "intestate court", [44] to resolve the
question of title or ownership raised by the public respondent Republic of the
Philippines, through the Office of the Solicitor General in the intestate proceedings of
the estate of Mariano San Pedro y Esteban. [45]
The public respondent, on the other hand, invoking its sovereign capacity as parens
patriae, argues that petitioners contention is misplaced considering that when the
Republic questioned the existence of the estate of Mariano San Pedro y Esteban, the
lower court became duty-bound to rule on the genuineness and validity of Titulo de
Propriedad 4136 which purportedly covers the said estate, otherwise, the lower court in
the intestate proceedings would be mistakenly dealing with properties that are proven to
be part of the States patrimony or improperly included as belonging to the estate of the
deceased.[46]

A probate courts jurisdiction is not limited to the determination of who the heirs are and
what shares are due them as regards the estate of a deceased person. Neither is it
confined to the issue of the validity of wills. We held in the case of Maingat v. Castillo,
[47]
that "the main function of a probate court is to settle and liquidate the estates of
deceased persons either summarily or through the process of administration." Thus, its
function necessarily includes the examination of the properties, rights and credits of the
deceased so as to rule on whether or not the inventory of the estate properly included
them for purposes of distribution of the net assets of the estate of the deceased to the
lawful heirs.

In the case of Trinidad v. Court of Appeals,[48] we stated, thus:

"x x x questions of title to any property apparently still belonging to estate of the
deceased maybe passed upon in the Probate Court, with the consent of all the parties,
without prejudice to third persons x x x"

Parenthetically, questions of title pertaining to the determination prima facie of whether

certain properties ought to be included or excluded from the inventory and accounting of
the estate subject of a petition for letters of administration, as in the intestate
proceedings of the estate of the late Mariano San Pedro y Esteban, maybe resolved by
the probate court. In this light, we echo our pronouncement in the case of Garcia v.
Garcia[49]that:

"x x x The court which acquired jurisdiction over the properties of a deceased person
through the filing of the corresponding proceedings, has supervision and control over
the said properties, and under the said power, it is its inherent duty to see that the
inventory submitted by the administrator appointed by it contains all the properties,
rights and credits which the law requires the administrator to set out in his inventory. In
compliance with this duty, the court has also inherent power to determine what
properties, rights and credits of the deceased should be included in or excluded from
the inventory. Should an heir or person interested in the properties of a deceased
person duly call the courts attention to the fact that certain properties, rights or credits
have been left out in the inventory, it is likewise the courts duty to hear the
observations, with power to determine if such observations should be attended to or not
and if the properties referred to therein belong prima facie to the intestate, but no such
determination is final and ultimate in nature as to the ownership of the said
properties."[50] [Underscoring Supplied]

In view of these disquisitions of this Court, we hold that the lower court did not commit
any reversible error when it issued the Order dated November 17, 1978 which set aside
Judge Bagasaos decision dated April 25, 1978 and declared Titulo de Propriedad No.
4136 as null and void, consequently excluding all lands covered by the said title from
the inventory of the estate of the late Mariano San Pedro y Esteban.

A corollary issue sought to be ventilated by the petitioners-heirs as regards the assailed

Order of November 17, 1978 is the impropriety of Judge Fernandez act of granting the
motion for reconsideration filed by the public respondent Republic since, Judge
Fernandez did not personally hear the intestate case. Petitioners thus dubbed him as a
"reviewing judge." By setting aside the Decision dated April 25, 1978 of his
predecessors in CFI, Branch IV, Baliuag, Bulacan, namely, Judge Benigno Puno and
Judge Agustin C. Bagasao, respectively, Judge Fernandez, acting as a "reviewing
judge," proceeded without authority and/or jurisdiction. [51]

There is no question that, barring any serious doubts as to whether the decision arrived
at is fair and just, a newly appointed judge who did not try the case can decide the same
as long as the record and the evidence are all available to him and that the same were
taken into consideration and thoroughly studied. The "reviewing judge" argument of the
petitioners-heirs has no leg to stand on considering that "the fact that the judge who
penned the decision did not hear a certain case in its entirety is not a compelling reason
to jettison his findings and conclusion inasmuch as the full record was available to him
for his perusal."[52] In the case at bar, it is evident that the 41-page Order dated
November 17, 1978 of Judge Fernandez bespeaks of a knowledgeable and analytical
discussion of the rationale for reconsidering and setting aside Judge Bagasaos
Decision dated April 25, 1978.

Considering the definiteness of our holding in regard to the correctness of Judge

Fernandez disposition of the case, i.e., the issuance by the lower court of the assailed
Order of November 17, 1978, we now focus on the core issue of whether or not the
lower court in G.R. No. 106496 committed reversible error in excluding from the
inventory of the estate of the deceased Mariano San Pedro y Esteban all lands covered
by Titulo de Propriedad No. 4136 primarily on the ground that the said title is null and
void and of no legal force and effect. Juxtaposed with this is the issue of whether or not
the appellate court, in both cases, G.R. Nos. 103727 and 106496, erred in not
recognizing Titulo de Propriedad No. 4136 as evidence to prove ownership by the late
Mariano San Pedro of the lands covered thereby.

It is settled that by virtue of Presidential Decree No. 892 which took effect on February
16, 1976, the system of registration under the Spanish Mortgage Law was abolished
and all holders of Spanish titles or grants should cause their lands covered thereby to
be registered under the Land Registration Act [53] within six (6) months from the date of
effectivity of the said Decree or until August 16, 1976. [54] Otherwise, non-compliance
therewith will result in a re-classification of their lands. [55] Spanish titles can no longer be
countenanced as indubitable evidence of land ownership. [56]

Section 1 of the said Decree provides:

"SECTION 1. The system of registration under the Spanish Mortgage Law is

discontinued, and all lands recorded under said system which are not yet covered by
Torrens title shall be considered as unregistered lands.

All holders of Spanish titles or grants should apply for registration of their lands under
Act No. 496, otherwise known as the Land Registration Act, within six (6) months from
the effectivity of this decree. Thereafter, Spanish titles cannot be used as evidence of
land ownership in any registration proceedings under the Torrens system.

Hereafter, all instruments affecting lands originally registered under the Spanish
Mortgage Law may be recorded under Section 194 of the Revised Administrative Code,
as amended by Act. 3344."
The Whereas clauses of the aforesaid Decree specify the underlying policies for its
passage, to wit:

"WHEREAS, fraudulent sales, transfers, and other forms of conveyances of large tracts
of public and private lands to unsuspecting and unwary buyers appear to have been
perpetrated by unscrupulous persons claiming ownership under Spanish titles or grants
of dubious origin;

WHEREAS, these fraudulent transactions have often resulted in conflicting claims and
litigations between legitimate title holders, bona fide occupants or applicants of public
lands, on the one hand, and the holders of, or person claiming rights under the said
Spanish titles or grants, on the other, thus creating confusion and instability in property
ownership and threatening the peace and order conditions in the areas affected;

WHEREAS, statistics in the Land Registration Commission show that recording in the
system of registration under the Spanish Mortgage Law is practically nil and that this
system has become obsolete;

WHEREAS, Spanish titles to lands which have not yet been brought under the
operation of the Torrens system, being subject to prescription, are now ineffective to
prove ownership unless accompanied by proof of actual possession;

WHEREAS, there is an imperative need to discontinue the system of registration under

the Spanish Mortgage Law and the use of Spanish titles as evidence in registration
proceedings under the Torrens system";

In the case of Director of Lands v. Heirs of Isabel Tesalona, et al., [57] we took cognizance
of this Decree and thus held that caution and care must be exercised in the acceptance
and admission of Spanish titles taking into account the numerous fake titles that have
been discovered after their supposed reconstitution subsequent to World War II.

In both cases, petitioners-heirs did not adduce evidence to show that Titulo de
Propriedad 4136 was brought under the operation of P.D. 892 despite their allegation
that they did so on August 13, 1976. [58] Time and again we have held that a mere
allegation is not evidence and the party who alleges a fact has the burden of proving it.
[59]
Proof of compliance with P.D. 892 should be the Certificate of Title covering the land
registered.

In the petition for letters of administration, it was a glaring error on the part of Judge
Bagasao who rendered the reconsidered Decision dated April 25, 1978 to have
declared the existence, genuineness and authenticity of Titulo de Propriedad No. 4136
in the name of the deceased Mariano San Pedro y Esteban despite the effectivity of
P.D. No. 892. Judge Fernandez, in setting aside Judge Bagasao's decision, emphasized
that Titulo de Propriedad No. 4136, under P.D. 892, is inadmissible and ineffective as
evidence of private ownership in the special proceedings case. He made the following
observations as regards the Titulo, to wit:

"The Solicitor General, articulating on the dire consequences of recognizing the

nebulous titulo as an evidence of ownership underscored the fact that during the
pendency of this case, smart speculators and wise alecks had inveigled innocent parties
into buying portions of the so-called estate with considerations running into millions of
pesos.

Some, under the guise of being benign heroes even feigned donations to charitable and
religious organizations, including veterans' organizations as smoke screen to the
gargantuan fraud they have committed and to hood wink further other gullible and
unsuspecting victims."[60]

In the same light, it does not escape this Courts onomatopoeic observation that the
then heir-judicial administrator Engracio San Pedro who filed the complaint for recovery
of possession and/or reconveyance with damages in G.R. No. 103727 on August 15,
1988 invoked Judge Bagasaos Decision of April 25, 1978 in support of the Titulos
validity notwithstanding the fact that, by then, the said Decision had already been set
aside by Judge Fernandez Order of November 17, 1978. We are in accord with the
appellate courts holding in G.R. No. 103727 insofar as it concludes that since the Titulo
was not registered under Act No. 496, otherwise known as the Land Registration Act,
said Titulo is inferior to the registered titles of the private respondents Ocampo, Buhain
and Dela Cruz.

This Court can only surmise that the reason for the non-registration of the Titulo under
the Torrens system is the lack of the necessary documents to be presented in order to
comply with the provisions of P.D. 892. We do not discount the possibility that the
Spanish title in question is not genuine, especially since its genuineness and due
execution have not been proven. In both cases, the petitioners-heirs were not able to
present the original of Titulo de Propriedad No. 4136 nor a genuine copy thereof. In the
special proceedings case, the petitioners-heirs failed to produce the Titulo despite
a subpoena duces tecum (Exh. "Q-RP") to produce it as requested by the Republic from
the then administrators of the subject intestate estate, Engracio San Pedro and Justino
Benito, and the other interested parties. As an alternative to prove their claim of the
subject intestate estate, the petitioners referred to a document known as "hypoteca"
(the Spanish term is `hipoteca) allegedly appended to the Titulo. However, the said
hypoteca was neither properly identified nor presented as evidence. Likewise, in the
action for recovery of possession and/or reconveyance with damages, the petitioners-
heirs did not submit the Titulo as part of their evidence. Instead, only an alleged illegible
copy of the Titulo was presented. (Exhs. "C-9" to "C-19").

The Best Evidence Rule as provided under Rule 130, section 2 of the Rules of Court is
stated in unequivocal terms. Subparagraphs (a) and (b) of the said Rule read:

"SEC. 2. - Original writing must be produced; exceptions. - There can be no evidence of

a writing the contents of which is the subject of inquiry, other than the original writing
itself, except in the following cases:

(a) When the original has been lost, destroyed, or cannot be produced in court;

(b) When the original is in the possession of the party against whom the evidence is
offered, and the latter fails to produce it after reasonable notice;"

x x x x x x x x x

Sections 4 and 5 of the same Rule further read:

"SEC. 4. Secondary evidence when original is lost or destroyed. --- When the original
writing has been lost or destroyed, or cannot be produced in court, upon proof of its
execution and loss or destruction or unavailability, its contents may be proved by a copy,
or by a recital of its contents in some authentic document, or by the recollection of
witnesses."
SEC. 5. Secondary evidence when original is in adverse partys custody. --- If the writing
be in the custody of the adverse party, he must have reasonable notice to produce it. If
after such notice and after satisfactory proof of its existence, he fails to produce the
writing, the contents thereof may be proved as in the case of its loss. But the notice to
produce it is not necessary where the writing is itself a notice, or where it has been
wrongfully obtained or withheld by the adverse party."

Thus, the court shall not receive any evidence that is merely substitutionary in its
nature, such as photocopies, as long as the original evidence can be had. In the
absence of a clear showing that the original writing has been lost or destroyed or cannot
be produced in court, the photocopy submitted, in lieu thereof, must be disregarded,
being unworthy of any probative value and being an inadmissible piece of evidence. [61]

Hence, we conclude that petitioners-heirs failed to establish by competent proof the

existence and due execution of the Titulo. Their explanation as to why the original copy
of the Titulo could not be produced was not satisfactory. The alleged contents thereof
which should have resolved the issue as to the exact extent of the subject intestate
estate of the late Mariano San Pedro were not distinctly proved. In the case of Ong
Hing Po v. Court of Appeals,[62]we pointed out that:

"Secondary evidence is admissible when the original documents were actually lost or
destroyed. But prior to the introduction of such secondary evidence, the proponent must
establish the former existence of the document. The correct order of proof is as follows:
existence; execution; loss; contents. This order may be changed if necessary in the
discretion of the court.[63]

In upholding the genuineness and authenticity of Titulo de Propriedad No. 4136, Judge
Bagasao, in his decision, relied on: (1) the testimony of the NBI expert, Mr. Segundo
Tabayoyong, pertaining to a report dated January 28, 1963 denominated as
"Questioned Documents Report No. 230-163"; (2) a photostat copy of the original of the
Titulo duly certified by the then Clerk of Court of the defunct Court of First Instance of
Manila; and (3) the hipotecaregistered in the Register of Deeds of Bulacan on
December 4, 1894.

Judge Fernandez, in his November 1978 Order which set aside Judge Bagasaos April
1978 decision correctly clarified that the NBI report aforementioned was limited to the
genuineness of the two signatures of Alejandro Garcia and Mariano Lopez Delgado
appearing on the last page of the Titulo, not the Titulo itself. When asked by the counsel
of the petitioners-heirs to admit the existence and due execution of the Titulo, the
handling Solicitor testified:

x x x x x x x x x

ATTY. BRINGAS:

With the testimony of this witness, I would like to call the distinguished counsel for the
government whether he admits that there is actually a titulo propriedad 4136.

COURT:

Would you comment on that Solicitor Agcaoili?

ATTY. AGCAOILI:

We are precisely impugning the Titulo and I think the question of counsel is already
answered by witness. The parties have not yet established the due existence of the
titulo.

ATTY. BRINGAS:

We are constrained to ask this matter in order to be candid about the question. The
witness is a witness for the government, so with the testimony of this witness for the
government to the effect that there is actually in existence Titulo Propiedad 4136; we
are asking the question candidly to the government counsel whether he is prepared to
state that there is really in existence such Titulo Propiedad 4136.

ATTY. AGCAOILI:

We are now stating before this Court that there was such a document examined by the
NBI insofar as the signatures of Alejandro Garcia and Manuel Lopez Delgado are
concerned and they are found to be authentic." [64]
The following significant findings of Judge Fernandez further lend credence to our
pronouncement that the Titulo is of dubious validity:

"x x x the NBI in its Questioned Document Report No. 448-977 dated September 2,
1977 (Exhibit `O-RP) concluded that the document contained material alterations as
follows:

a) On line 15 of p. 1, Title and on line 5 of p. 2, Title, the word Pinagcamaligan was

written after Pulo;

b) On line 16, p. 1, Title, un was converted to mil;

c) On Line 18, p. 1, Title, mil was written at the end of tres in tres mil;

d) On line 19 of p. 1, Title, a semblance of mil was written after setentay tres;

e) On line 6, p. 2, Title, un was formed to a semblance of uni; and

f) On line 8, p. 2, Title, un was formed to mil.

The plain and evident purpose was definitely to enlarge the area of the Titulo. According
to Mr. Tabayoyong of the NBI, there are still "pieces of black ashes around the rings of
the portions which are indications of burnings." The burnings were made on the very
portions where there were previous erasures, alterations and intercalations.
Understandably, the burnings were done to erase traces of the criminal act." [65]

In the case of National Power Corporation v. Court of Appeals, et al. [66] Justice
Ameurfina Melencio-Herrera, in reinstating the trial courts judgment therein, sustained
the finding that:

"x x x The photostatic copy (in lieu of the lost original) of the Spanish title in the name of
Mariano San Pedro shows obvious alterations and intercalations in an attempt to vastly
increase the area and change the location of the land described in the original title x x
x."

Anent the inadmissibility as evidence of the photostat copy of the Titulo, we sustain the
lower courts analysis, as affirmed by the appellate court, viz:
"To begin with, the original of Titulo de Propiedad No. 4136 was never presented in
Court. Upon request of the Government, a subpoena duces tecum (Exhibit "Q-RP")
was issued to the two administrators, Engracio San Pedro and Justino Benito as well as
to other interested parties to produce the original of Titulo de Propriedad No. 4136. But
no one produced the Titulo. What the parties did was to pass the buck to one another.

Without any plausible explanation at all on as to why the original could not be produced,
the Court cannot take cognizance of any secondary evidence.

It was explained that the Titulo after changing hands, finally fell into the hands of a
certain Moon Park of Korea but who later disappeared and that his present
whereabouts could not be known.

Strangely enough, despite the significance of the titulo, no serious efforts on the part of
the claimants-heirs were exerted to retrieve this document of vital importance despite
the Court order to produce it in order to determine its authenticity.

It would not be enough to simply say that Moon Parks whereabouts are unknown or
that there are not enough funds to locate him. The only logical conclusion would be that
the original would be adverse if produced." [67]

As regards the hipoteca which allegedly defines the metes and bounds of the subject
intestate estate, the petitioners-heirs have not established the conditions required by
law for their admissibility as secondary evidence to prove that there exists a document
designated as Titulo de Propriedad No. 4136. Hence, the same acquires no probative
value.[68]

At this juncture, our decision dated June 28, 1968 in Director of Forestry, et al. v. Hon.
Emmanuel M. Muoz, as Judge of the Court of First Instance of Bulacan, Branch I, et
al.[69] is enlightening. In said case, private respondent, Pinaycamaligan Indo-Agro
Development Corporation, Inc. (PIADECO), claimed to be the owner of some 72,000
hectares of land located in the municipalities of Angat, Norzagaray and San Jose del
Monte, province of Bulacan, and in Antipolo and Montalban, province of Rizal. To prove
its ownership Piadeco relied on Titulo de Propriedad No. 4136 dated April 28, 1894.
Scholarly opining that the Titulo is of doubtful validity,[70] Justice Conrado V. Sanchez,
speaking for the Court, stated that:
"But an important moiety here is the deeply disturbing intertwine of two undisputed
facts. First. The Title embraces land `located in the Provinces of Bulacan, Rizal,
Quezon, and Quezon City. Second. The title was signed only by the provincial officials
of Bulacan, and inscribed only in the Land Registry of Bulacan. Why? The situation,
indeed, cries desperately for a plausible answer.

To be underscored at this point is the well-embedded principle that private ownership of

land must be proved not only through the genuineness of title but also with a clear
identity of the land claimed. (Oligan v. Mejia, 17 Phil. 494, 496; Villa Abrille v. Banuelos,
20 Phil. 1, 8, citing Sison v. Ramos, 13 Phil. 54 and Belen v. Belen, 13 Phil. 202; Licad
v. Bacani, 51 Phil 51, 54-56; Lasam v. Director, 65 Phil. 367, 371. This Court ruled in a
case involving a Spanish title acquired by purchase that the land must be concretely
measured per hectare or per quinon, not in mass (cuerpos ciertos), (Valdez v. Director,
62 Phil. 362, 373, 375). The fact that the Royal Decree of August 31, 1888 used 30
hectares as a basis for classifying lands strongly suggests that the land applied for must
be measured per hectare.

Here, no definite area seems to have been mentioned in the title. In Piadecos
Rejoinder to Opposition dated April 28, 1964 filed in Civil Case 3035-M, it specified that
area covered by its Titulo de Propiedad as 74,000 hectares (Rollo in L-24796, p. 36). In
its Opposition of May 13, 1964 in the same case, it described the land as containing
72,000 hectares (Id., p. 48). Which is which? This but accentuates the nebulous identity
of Piadecos land. Piadecos ownership thereof then equally suffers from vagueness,
fatal at least in these proceedings.

Piadeco asserts that Don Mariano San Pedro y Esteban, the original owner appearing
on the title, acquired his rights over the property by prescription under Articles 4 and 5 of
the Royal Decree of June 25, 1880, (Rollo of L-24796, p. 184) the basic decree that
authorized adjustment of lands. By this decree, applications for adjustment -- showing
the location, boundaries and area of land applied for -- were to be filed with the
Direccion General de Administracion Civil, which then ordered the classification and
survey of the land with the assistance of the interested party or his legal representative
(Ponce, op. cit., p. 22).

The Royal Decree of June 5, 1880 also fixed the period for filing applications for
adjustment at one year from the date of publication of the decree in the Gaceta de
Manila on September 10, 1880, extended for another year by the Royal Order of July
15, 1881 (Ibid.). If Don Mariano sought adjustment within the time prescribed, as he
should have, then, seriously to be considered here are the Royal Orders of November
25, 1880 and of October 26, 1881, which limited adjustment to 1,000 hectares of arid
lands, 500 hectares of land with trees and 100 hectares of irrigable lands (See:
Government v. Avila, 46 Phil. 146, 154; Bayot v. Director of Lands, 98 Phil. 935, 941.
Article 15 of the Royal Decree of January 26, 1889 limited the area that may be
acquired by purchase to 2,500 hectares, with allowable error up to 5%. Ponce, op. cit.,
p. 19). And, at the risk of repetition, it should be stated again that Piadecos Titulo is
held out to embrace 72,000 or 74,000 hectares of land.

But if more were needed, we have the Maura Law (Royal Decree of February 13, 1894),
published in the Gaceta de Manila on April 17, 1894 (Ibid., p. 26; Ventura, op. cit., p.
28). That decree required a second petition for adjustment within six months from
publication, for those who had not yet secured their titles at the time of the publication of
the law (Ibid.). Said law also abolished the provincial boards for the adjustment of lands
established by Royal Decree of December 26, 1884, and confirmed by Royal Decree of
August 31, 1888, which boards were directed to deliver to their successors, the
provincial boards established by Decree on Municipal Organization issued on May 19,
1893, all records and documents which they may hold in their possession (Ramirez v.
Director of Land, supra, at p. 124).

Doubt on Piadecos title here supervenes when we come to consider that title was either
dated April 29 or April 25, 1894, twelve or eight days after the publication of the Maura
Law.

Let us now take a look, as near as the record allows, at how Piadeco exactly acquired
its rights under the Titulo. The original owner appearing thereon was Don Mariano San
Pedro y Esteban. From Piadecos explanation -- not its evidence (Rollo of L-24796, pp.
179-188) we cull the following: On December 3, 1894, Don Mariano mortgaged the land
under pacto de retro, redeemable within 10 years, for P8,000.00 to one Don Ignacio
Conrado. This transaction was said to have been registered or inscribed on December
4, 1894. Don Mariano Ignacio died, his daughter, Maria Socorro Conrado, his only heir,
adjudicated the land to herself. At about the same time, Piadeco was organized. Its
certificate of registration was issued by the Securities and Exchange Commission on
June 27, 1932. Later, Maria Socorro, heir of Don Ignacio, became a shareholder of
Piadeco when she conveyed the land to Piadecos treasurer and an incorporator,
Trinidad B. Estrada, in consideration of a certain amount of Piadeco shares. Thereafter,
Trinidad B. Estrada assigned the land to Piadeco. Then came to the scene a certain
Fabian Castillo, appearing as sole heir of Don Mariano, the original owner of the land.
Castillo also executed an affidavit of adjudication to himself over the same land, and
then sold the same to Piadeco. Consideration therefor was paid partially by Piadeco,
pending the registration of the land under Act 496.

The question may well be asked: Why was full payment of the consideration to Fabian
Castillo made to depend on the registration of the land under the Torrens system, if
Piadeco was sure of the validity of Titulo de Propiedad 4136? This, and other factors
herein pointed out, cast great clouds of doubt that hang most conspicuously over
Piadecos title."

Moreover, in the case of Widows & Orphans Association, Inc. v. Court of Appeals, [71] we
categorically enunciated that the alleged Spanish title, Titulo de Propriedad No. 4136,
had become bereft of any probative value as evidence of land ownership by virtue of
P.D. 892 as contained in our Resolution dated February 6, 1985 in a related case
entitled Benito and WIDORA v. Ortigas docketed as G.R. No. 69343. On March 29,
1985, an entry of final judgment was made respecting G.R. No. 69343.

Under the doctrine of conclusiveness of judgment, the prior declarations by this Court
relating to the issue of the validity of Titulo de Propriedad No. 4136 preclude us from
adjudicating otherwise. In the Muoz case, we had cast doubt on the Titulos validity. In
the WIDORA case, the Titulos nullification was definitive. In both cases, the Republic
and the estate of Mariano San Pedro y Esteban were on opposite ends before this
bench. In the case en banc of Calalang v. Register of Deeds of Quezon City,[72] the
Court explained the concept of conclusiveness of judgment, viz:

"x x x conclusiveness of judgment - states that a fact or question which was in issue in a
former suit and was there judicially passed upon and determined by a court of
competent jurisdiction, is conclusively settled by the judgment therein as far as the
parties to that action and persons in privity with them are concerned and cannot be
again litigated in any future action between such parties or their privies, in the same
court or any other court of concurrent jurisdiction on either the same or different cause
of action, while the judgment remains unreversed by proper authority. It has been held
that in order that a judgment in one action can be conclusive as to a particular matter in
another action between the same parties or their privies, it is essential that the issue be
identical. If a particular point or question is in issue in the second action, and the
judgment will depend on the determination of that particular point or question, a former
judgment between the same parties or their privies will be final and conclusive in the
second if that same point or question was in issue and adjudicated in the first suit
(Nabus v. Court of Appeals, 193 SCRA 732 [1991]). Identity of cause of action is not
required by merely identity of issues."

The issue, whether Titulo de Propriedad No. 4136 is valid or not, must now be laid to
rest. The Titulo cannot be relied upon by the petitioners-heirs or their privies as
evidence of ownership. In the petition for letters of administration the inventory
submitted before the probate court consisted solely of lands covered by the Titulo.
Hence, there can be no "net estate" to speak of after the Titulos exclusion from the
intestate proceedings of the estate of the late Mariano San Pedro.

In G.R. No. 103727, the Titulo cannot be superior to the Torrens Titles of private
respondents Buhain, Ocampo and Dela Cruz, namely TCT No. 372592 (Exh. "2",
Buhain), TCT No. 8982 (Exh. "2"- De Ocampo) and TCT No. 269707 (Exh. "2" - Dela
Cruz).[73] Under the Torrens system of registration, the titles of private respondents
became indefeasible and incontrovertible one year from its final decree. [74] More
importantly, TCT Nos. 372592, 8982, 269707, having been issued under the Torrens
system, enjoy the conclusive presumption of validity.[75] As a last hurrah to champion
their claim to the vast estate covered by the subject Spanish title, the petitioners-heirs
imputed fraud and bad faith which they failed to prove on the part of the private
respondents as regards their Torrens titles and accused their own counsel of gross
negligence for having failed to call the proper witnesses from the Bureau of Forestry to
substantiate the petitioners-heirs claim that OCT No. 614 from which private
respondents were derived is null and void. It is an elementary legal principle that the
negligence of counsel binds the client. [76] The records show that the petitioners-heirs
were not at all prejudiced by the non-presentation of evidence to prove that OCT No.
614 is a nullity considering that their ownership itself of the lands being claimed was not
duly proved. In the case of Villa Rhecar Bus v. Dela Cruz, et al.,[77] we held:

"It is unfortunate that the lawyer of the petitioner neglected his responsibilities to his
client. This negligence ultimately resulted in a judgment adverse to the client. Be that as
it may, such mistake binds the client, the herein petitioner. As a general rule, a client is
bound by the mistakes of his counsel. (Que v. Court of Appeals, 101 SCRA 13 [1980]
Only when the application of the general rule would result in serious injustice should an
exception thereto be called for. Under the circumstances obtaining in this case, no
undue prejudice against the petitioner has been satisfactorily demonstrated. At most,
there is only an unsupported claim that the petitioner had been prejudiced by the
negligence of its counsel, without an explanation to that effect."

Sans preponderance of evidence in support of the contention that the petitioners-heirs

were denied due process on account of the negligence of their counsel, the writ of
certiorari is unavailing.

It bears repeating that the heirs or successors-in-interest of Mariano San Pedro y

Esteban are not without recourse. Presidential Decree No. 892, quoted hereinabove,
grants all holders of Spanish Titles the right to apply for registration of their lands under
Act No. 496, otherwise known as the Land Registration Act, within six (6) months from
the effectivity of the Decree. Thereafter, however, any Spanish Title, if utilized as
evidence of possession, cannot be used as evidence of ownership in any land
registration proceedings under the Torrens system.

All instruments affecting lands originally registered under the Spanish Mortgage Law
may be recorded under Section 194 of the Revised Administrative Code, as amended
by Act 3344.

In view hereof, this is as good a time as any, to remind the Solicitor General to be more
vigilant in handling land registration cases and intestate proceedings involving portions
of the subject estate. It is not too late in the day for the Office of the Solicitor General to
contest the Torrens titles of those who have acquired ownership of such portions of land
that rightfully belong to the State.

In fine, the release of the matured Land Bank Capital Bonds issued in favor of Mariano
San Pedro y Esteban on August 13, 1968 sought by one Catalino San Pedro, alleged
heir, legal holder and owner of Titulo de Propriedad No. 4136 is a matter not ripe for
adjudication in these cases. Firstly, Catalino San Pedro is not a party in any of the two
cases before us for review, hence, this Court in a Resolution dated May 10, 1993,
[78]
denied Catalinos motion for leave to reopen and/or new trial. And, secondly, the
aforementioned bonds were not included in the inventory of the subject estate submitted
by then administrators, Engracio San Pedro and Justino Benito before the probate
court.

WHEREFORE, in view of all the foregoing, the petitions in G.R. Nos. 103727 and
106496 are hereby DISMISSEDfor lack of merit.

Consequently, in G.R. No. 103727, the decision of the Court of Appeals dated January
20, 1992 is herebyAFFIRMED.

In G.R. No. 106496, judgment is hereby rendered as follows :

(1) Titulo de Propriedad No. 4136 is declared null and void and, therefore, no rights
could be derived therefrom;

(2) All lands covered by Titulo de Propriedad No. 4136 are excluded from the inventory
of the estate of the late Mariano San Pedro y Esteban;

(3) The petition for letters of administration, docketed as Special Proceedings No. 312-
B, should be, as it is, hereby closed and terminated.

(4) The heirs, agents, privies and/or anyone acting for and in behalf of the estate of the
late Mariano San Pedro y Esteban are hereby disallowed to exercise any act of
possession or ownership or to otherwise, dispose of in any manner the whole or any
portion of the estate covered by Titulo de Propriedad No. 4136; and they are hereby
ordered to immediately vacate the same, if they or any of them are in possession
thereof.

This judgment is IMMEDIATELY EXECUTORY.

SO ORDERED.
 FIRST DIVISION

[ G.R. NO. 144095, April 12, 2005 ]

SPOUSES HAYMATON S. GARINGAN AND JAYYARI PAWAKI, PETITIONERS, VS.

HADJI MUNIB SAUPI GARINGAN, HADJA TERO SAUPI GARINGAN, AND HADJA
JEHADA SAUPI GARINGAN, RESPONDENTS.

DECISION

CARPIO, J.:

The Case

Before this Court is a petition for review [1] to reverse the Decision[2] dated 19 June 2000
and the Order[3] dated 19 July 2000 of the Shari'a District Court, Third Shari'a Judicial
District, Zamboanga City in Civil Case No. 13-3. The Shari'a District Court cancelled
Transfer Certificate of Title ("TCT") No. 2592 in the name of "Djayari or Jayyari Moro."
The Shari'a District Court also ordered the partition of the land in dispute, and the
issuance of new TCTs in the names of Hadji Munib Saupi Garingan, Hadja Tero Saupi
Garingan, Hadja Jehada Saupi Garingan and Haymaton Garingan Jayyari.

The Antecedent Facts

On 23 February 1993, Hadji Munib Saupi Garingan, Hadja Tero Saupi Garingan and
Hadja Jehada Saupi Garingan ("Hadji Munib, et al.") filed an action for Partition and
Injunction with prayer for Preliminary Injunction against their sister Haymaton Saupi
Garingan[4] ("Haymaton") and her husband Jayyari Pawaki ("Pawaki"), also known as
Djayari Moro. Hadji Munib, et al. alleged that their grandfather Saupi Moro owned an
agricultural lot, fully planted with coconut and other fruit bearing trees, containing an
area of 11.3365 hectares. The land is situated in Sitio Tinebbasan, Barangay Semut,
Municipality of Lamitan, Basilan Province. Saupi Moro acquired the land through
purchase from Gani Moro. Saupi Moro donated the land to his daughter Insih Saupi
("Insih"), mother of Hadji Munib, et al. and Haymaton. After the donation, Insih
predeceased her father and her interest over the land passed to her children Hadji
Munib Saupi Garingan, Hadja Tero Saupi Garingan, Hadja Jehada Saupi Garingan, and
Haymaton Garingan.

After the death of Saupi Moro in 1954, [5] Haymaton and Pawaki took over the
administration of the land. Later, Haymaton and Pawaki declared the land, then still
untitled, in their names for taxation purposes under Tax Declaration No. 1675.
Haymaton and Pawaki refused to share with Hadji Munib, et al. the income from the
sale of fruits from the land.

Haymaton and Pawaki, on the other hand, claimed that on 22 September 1969, Pawaki
bought the land from Jikirum M. Adjaluddin ("Jikirum"). TCT No. T-2592 was issued in
the name of Djayari Moro. Pawaki took possession of the land in the concept of an
owner in the same year. He declared the land for taxation purposes under Tax
Declaration No. 1675.

The Decision of the Shari'a District Court

The Shari'a District Court found that Saupi Moro acquired the land in dispute from Gani
Moro. Insih Saupi, during her lifetime, accepted the land by way of donation from her
father. Upon the death of Insih and her husband, their children succeeded to the rights
of their parents over the property. The Shari'a District Court ruled:

From the foregoing evidence of the plaintiffs it appears that the property in question was
given by Saupi Moro during his lifetime to his daughter Insih Saupi, who thereafter,
stayed in the land and introduced improvements consisting of coconut trees with her
husband Garingan until they died, predeceasing Saupi Moro, which shows that the
property given by Saupi Moro to his daughter Insih Saupi Garingan during the former's
lifetime, was accepted by the latter during her lifetime.

The herein plaintiffs in this case, including their sister and defendant, Haymaton
Garingan Jayyari, being the children of Insih Saupi and Garingan, steps (sic) into
whatever rights or properties left by their deceased parents.

On the basis of the evidence of the case, the herein property in question was acquired
by their grandfather Saupi Moro from Gani Moro before World War II or sometime
during the Japanese occupation. (See Exhibit "A-1", p. 297, Record). During their
grandfather's lifetime he donated it to his daughter plaintiff's (sic) mother Insih Garingan
who together with her husband Garingan occupied and planted said property; After
plaintiff's mother Insih Saupi Garingan died, the property was left to plaintiff's sister now
defendant Haymaton Garingan Jayyari; And, after the latter also died, her husband and
co-defendant Jayyari Pawaki took over the property. There is therefore, an implied trust
relation established between the heirs of Insih Saupi Garingan plaintiffs herein and their
sister defendant Haymaton Garingan and the latter husband Jayyari Pawaki over the
said property. In a case, it was held, "that the Torrens System was never calculated to
forment (sic) betrayal in the performance of a trust." (Escobar v. Locsin, 74 Phil. 86).
Thus, through the continuous possession of the property beginning from the plaintiff's
grandparent Saupi Moro sometime in 1941, until the latter died sometime in 1954 up to
the time it was held in trust by plaintiffs co-heir, defendant Haymaton Garingan, and the
latter husband and co-defendant Jayyari Pawaki, who after Haymaton Garingan's death
continued to hold the land claiming to have acquired it by purchase from Adjaluddin
Moro, tacking the periods, more than thirty years had elapsed which gives the herein
plaintiffs the right over the said property, though the donation made in favor of their
mother Insih Garingan by their grandfather Saupi Moro was not in a public instrument,
but merely verbal. In a case the Court held, "That while donation of immovable property
not made in a public instrument, such as verbal one, is not effective as a transfer of title,
yet it is a circumstance which may explain the adverse and exclusive character of the
possession of the intended donee, and such possession may ripen into ownership by
prescription." (Pensader vs. Pensader, 47 Phil. 959; Apilado vs. Apilado (C.A.) 34 O.G.
p. 144; Macabasco vs. Macabasco (C.A.) 45 O.G. 2532; Espique vs. Espique (S.C.) 53
O.G. 4079; Cabacutan vs. Serrano (C.S.) 59 O.G. 292; Cited on p. 523, A. Tolentino,
Civil Code of the Philippines, Vol. II, 1987 ed.).

Plaintiffs herein, namely (1) Hadji Munib Saupi Garingan, (2) Hadja Tero Saupi
Garingan, (3) Hadja Jehada Saupi Garingan, together with their sister, and defendant
(4) Haymaton Garingan-Jayyari are the children of Insih Saupi and Garingan. Upon the
death of their parents Insih Saupi and Garingan, they succeeded to whatever hereditary
rights over the estates of their deceased parents. The evidence shows that plaintiff's
mother Insih Saupi Garingan predeceased her father Saupi Garingan. x x x.

In Civil Case No. 41 entitled Janjalawi Moro, et. al., plaintiffs vs. Andaang Moro, et. al.,
defendants that was filed before the then Court of First Instance of Basilan City is dated
July 16, 1956 on paragraph 3 of the said Civil complaint states, "that Saupi Moro died
intestate in 1954" (sic); Thus, Insih Saupi and Imam Garingan, the plaintiffs parents,
who both predeceased Saupi Moro, their death occurred sometime before the death of
Saupi Moro in 1954. Such being the case, the law then governing the successional
rights of Filipino Muslims was still the Civil Code of the Philippines, R.A. No. 386 which
became effective on August 30, 1950. (Ilejay vs. Ilejay, et. al., (S.C.) 49 O.G. 4903).
And, under Article 90 of the present Code of Muslim Personal Laws of the Philippines,
P.D. 1083, "The rights to succession are transmitted from the moment of the death of
the decedent". This provision is an adoption of Article 77 of the Civil Code of the
Philippines, which provides: "The rights to the succession are transmitted from the
moment of the death of the decedent"; which has been interpreted that the succession
is opened by the death of the person from whom the inheritance comes. (A. Tolentino,
Civil Code, p. 13, Vol. III, 1979 ed.; Cited 3 Navarro Amandi 82). Considering the
applicable laws on this regard, since Insih Saupi Garingan and Imam Garingan who
were plaintiffs parents, predeceased Saupi Moro who died in 1954, the law then
applicable to successional rights of Filipino Muslims was the prevailing law at that time
which was still the Civil Code of the Philippines. This rule is recognized by the Code of
Muslim Personal Laws of the Philippines, P.D. 1083, under Article 186, which provides:

"Art. 186. Effect of Code on Past Acts. - (1) Acts executed prior to the effectivity of this
Code shall be governed by the laws in force at that time of their execution, and nothing
herein except as otherwise specifically provided, shall affect their validity or legality or
operate to extinguish any right acquired or liability incurred thereby."

And, the applicable provisions of the Civil Code of the Philippines on this regard are as
follows, to quote:

"Art. 979. Legitimate children and their descendants succeed the parents and other
ascendants, without distinction as to sex or age, and even if they should come from
different marriages'; And,

Art. 980. The Children of the deceased shall always inherit from him in their own right,
dividing the inheritance in equal shares."

WHEREFORE, in view of the foregoing, judgment is hereby rendered as follows:

 (1) That the following described real property, viz: "A parcel of agricultural land
located in Semut, Lamitan, Basilan City, Philippines, identified as Bureau of
Lands Plan H-V-18368 bounded on N., by seashore, 20 m. wide; on the SE.,
by property of Turavin Moro; on the S., by property of Hatib Hiya; and on the
W., by property of Husin Moro, containing an area of ONE HUNDRED
THIRTEEN THOUSAND THREE HUNDRED AND SIXTY FIVE (113,365)
SQUARE METERS more or less' is ordered partitioned among the following in
EQUAL SHARES, to wit: Hadji Munib Saupi Garingan, Hadja Tero Saupi
Garingan, Hadja Jehada Saupi Garingan, and Haymaton Garingan Jayyari,
shall get entitled to ONE FOURTH (1/4) SHARE EACH of the aforesaid
property;

(2) Transfer Certificate of Title No. 2592 covering said property in the name of
Djayari or Jayyari Moro married to Haymaton Mora of the Office of the Register
of Deeds of Basilan City is hereby ordered annulled and cancelled, and, in lieu
thereof the Office of the Register of Deeds of Basilan City is ordered to issue a
New Certificate of Title in the names of the owners mentioned in the preceding
paragraph 1, and in the proportion given therein;

(3) Ordering the defendant and anyone acting for the defendants to peacefully,
and voluntarily surrender the afore-mentioned parcel of land together with the
improvements existing thereon to the plaintiffs, their heirs or legal
representatives, and restore them in the occupation and enjoyment thereof.

SO ORDERED.[6]

In an Order dated 19 July 2000, the Shari'a District Court denied the motion for
reconsideration of Haymaton and Pawaki.

Hence, the present petition.

The Issues

In their memorandum, petitioners raise the following issues:

Whether the Shari'a District Court erred in ordering the partition of the subject property
and annulment of Transfer Certificate of Title No. T-2592 on the basis alone of
respondents' claim that Saupi Moro, their predecessor-in-interest, was the one who
owned the said parcel of land during his lifetime, thereby disregarding the protection
accorded to persons dealing with property registered under the Torrens system.

Whether the Third Shari'a District Court erred in not ruling that respondents' right to
seek a reconveyance of the subject property had already prescribed or is barred by
laches.

Whether the Third Shari'a District Court erred in not ruling that respondents have no
cause of action against the petitioners in an action for partition as they are not co-
owners of the subject property, petitioners being the sole owners of the property.[7]

The Ruling of the Court

The petition is meritorious.

The settlement of the issue of ownership is the first stage in an action for partition, and
the action will not lie if the claimant has no rightful interest in the property in dispute. [8] In
this case, Hadji Munib, et al. failed to prove their right to the land in dispute.

The Derivative Title of Jayyari Pawaki

The land in dispute was originally registered in the name of Andaang Gani ("Andaang")
under Original Certificate of Title ("OCT") No. P-793 [9] issued on 6 December 1955. OCT
No. P-793 was issued upon the approval of Andaang's homestead application and the
issuance on 17 February 1955 of Letters of Patent No. V-41831.

Andaang died intestate on 29 August 1959. On 13 April 1960, Andaang's widow and
sole heir, Cristeta Santiago vda. de Gani ("Cristeta"), executed an Extrajudicial
Settlement and Sale[10] adjudicating to herself the land in dispute and at the same time
selling it to Jikirum. On 31 August 1967 or seven years after the sale, Cristeta caused
the cancellation of OCT No. P-793 and the issuance in her name of TCT No. T-1940.
[11]
On the same date, TCT No. T-1940 was cancelled and TCT No. T-1941 [12] was issued
in the name of Jikirum.

On 22 September 1969, Jikirum executed a Deed of Absolute Sale [13] in favor of Djayari
Moro. On 10 June 1971, TCT No. T-1941 was cancelled and TCT No. T-2592 [14] was
issued in the name of Djayari Moro also known as Jayyari Pawaki.

The Claim of Hadji Munib, et al.

Hadji Munib, et al. claim that before or during the Japanese occupation of the
Philippines, Saupi Moro acquired the land in dispute through sale from Gani Moro. After
Gani Moro's death, his heirs, which included Andaang, offered to repurchase the land
from Saupi Moro. Saupi Moro refused. The heirs of Gani Moro [15] instituted Civil Case
No. 31 for Illegal Detainer [16] against Saupi Moro.[17] Although the Municipal Trial Court of
Basilan City[18] declared Saupi Moro in default for non-appearance, it dismissed the
complaint in a Decision dated 24 September 1951, as follows:

Does an action lie against the defendant for Illegal Detainer: Rule 72, pp. 247-248,
Moran's Rules of Court, provides, that there are two (2) kinds of Detainer: (1) that by a
tenant, and (2) that by a vendee or vendor, or other person unlawfully withholding
possession of any land of building (sic). In the present case, the cause of action is
based only on a verbal contract that took place year ago, one of the principal parties is
now dead. The court believes that the right of the plaintiffs to recover possession has
not been clearly established. In their complaint, they stated that the alleged contract
took place before World War II, while in open court they stated that it took place during
the Japanese occupation. The plaintiffs likewise failed to explain in Court, why Gani
Moro during his lifetime failed to redeem the property, although the amount involved is a
pittant (sic). Gani Moro has all the time in the world and the means to repay said
amount of seventy (P70.00), before his death on May, 1949, and if said contract really
existed, he would not have hesitated to redeem said property knowing that his children
stands (sic) to be deprived of their inheritance of a substantial parcel of land with
improvements.

Although, the allegations of the plaintiffs stands unrefuted (defendant being in default)
yet the Court in the interest of justice, has to sift and analyze the evidence of the
plaintiffs in order that justice could be meted to the parties.

IN VIEW OF THE FOREGOING CONSIDERATIONS, the Court is of the opinion and so

hold, that the plaintiff has failed to prove its case, and judgment is hereby rendered
dismissing the above complaint, without costs.

IT IS SO ORDERED.[19]

Despite the decision, Andaang applied for a homestead patent over the disputed land.
Andaang's application was approved and on 17 February 1955, he was issued Letters
of Patent No. V-41831. On 6 December 1955, OCT No. P-793 was issued in Andaang's
name.

In July 1956, the brothers and sisters of Saupi Moro, [20] claiming to be his heirs,[21] filed
Civil Case No. 41 for Annulment of Certificate of Title to a Parcel of Land and Damages
against Andaang and the Register of Deeds of Basilan before the then Court of First
Instance ("CFI") of Basilan City.[22] However, the case did not prosper. In a certification
dated 18 September 1994, Clerk of Court Selso M. Manzanaris of the Regional Trial
Court of Isabela, Basilan declared that the building housing the sala of the CFI of
Basilan City was burned in 1975. The records of Civil Case No. 41 were destroyed. The
plaintiffs did not revive the case which was "considered abandoned." [23]

The Homestead Application of Andaang Gani

Under Commonwealth Act No. 141 ("CA 141"), [24] as amended, agricultural lands may
be acquired by homestead, as follows:

SEC. 12. Any citizen of the Philippines over the age of eighteen years, or the head of a
family, who does not own more than twenty-four hectares of land in the Philippines or
has not had the benefit of any gratuitous allotment of more than twenty-four hectares of
land since the occupation of the Philippines by the United States, may enter a
homestead of not exceeding twenty-four hectares of agricultural land of the public
domain.

SEC. 13. Upon the filing of an application for a homestead, the Director of Lands, if he
finds that the application should be approved, shall do so and authorize the applicant to
take possession of the land upon the payment of five pesos, Philippine currency, as
entry fee. Within six months from and after the date of the approval of the application,
the applicant shall begin to work the homestead, otherwise he shall lose his prior right to
the land.

SEC. 14. No certificate shall be given or patent issued for the land applied for until at
least one-fifth of the land has been improved and cultivated. The period within which the
land shall be cultivated shall not be less than one nor more than five years, from and
after the date of the approval of the application. The applicant shall, within the said
period, notify the Director of Lands as soon as he is ready to acquire the title. If at the
date of such notice, the applicant shall prove to the satisfaction of the Director of Lands,
that he has resided continuously for at least one year in the municipality in which the
land is located, or in the municipality adjacent to the same and has cultivated at least
one-fifth of the land continuously since the approval of the application, and shall make
affidavit that no part of said land has been alienated or encumbered, and that he has
complied with all the requirements of this Act, then, upon the payment of five pesos, as
final fee, he shall be entitled to a patent.

CA 141 requires the applicant to enter in possession of, improve and cultivate the land.

Andaang was one of the plaintiffs in Civil Case No. 31 for illegal detainer against Saupi
Moro.[25] In that case, the plaintiffs prayed that they be allowed to redeem the land in
dispute which Gani Moro verbally mortgaged to Saupi Moro during the Japanese
occupation. The plaintiffs also prayed that the trial court order Saupi Moro to vacate the
land and to restitute the premises to the plaintiffs. The trial court dismissed the
complaint.

There is no evidence on record that shows that the heirs of Gani Moro subsequently
reacquired the land. Nothing shows that Andaang Gani was the occupant of the land
when he applied for homestead patent, or that he occupied the land and introduced
improvements thereon in the interim before the approval of his application. Hence, Hadji
Munib, et al. insist that Andaang did not comply with the requirements of CA 141.

Review of Certificate of Title on Ground of Fraud

Section 122 of Act No. 496 ("Act 496"),[26] provides:

SEC. 122. Whenever public lands in the Philippine Islands belonging to the Government
of the (United States or to the Government of the) Philippine Islands are alienated,
granted, or conveyed to persons or to public or private corporations, the same shall be
brought forthwith under the operation of this Act and shall become registered lands. It
shall be the duty of the official issuing the instrument of alienation, grant, or conveyance
in behalf of the Government to cause such instrument before its delivery to the grantee,
to be filed with the register of deeds for the province where the land lies and to be there
registered like other deeds and conveyances, whereupon a certificate shall be entered
as in other cases of registered land, and an owner's duplicate certificate issued to the
grantee. The deed, grant, or instrument of conveyance from the Government to the
grantee shall not take effect as a conveyance or bind the land, but shall operate only as
a contract between the Government and the grantee and as evidence of authority to the
clerk or register of deeds to make registration. The act of registration shall be the
operative act to convey and affect the land, and in all cases under this Act registration
shall be made in the office of the register of deeds for the province where the land lies.
The fees for registration shall be paid by the grantee. After due registration and issue of
the certificate and owner's duplicate, such land shall be registered land for all purposes
under this Act.

Upon its registration, the land in dispute falls under the operation of Act 496 and
becomes registered land. A homestead patent, once registered, becomes as
indefeasible as a Torrens title. [27]

A person deprived of the land, estate, or interest therein by virtue of a decree of

registration may avail of the remedy provided under Section 38 of Act 496. Thus:

Sec. 38. If the court after hearing finds that the applicant or adverse claimant has title as
stated in his application or adverse claim and proper for registration, a decree of
confirmation and registration shall be entered. Every decree of registration shall bind the
land, and quiet title thereto, subject only to the exceptions stated in the following
section. It shall be conclusive upon and against all persons, including the Insular
Government and all the branches thereof, whether mentioned by name in the
application, notice, or citation, or included in the general description "To whom it may
concern." Such decree shall not be opened by reason of the absence, infancy, or
other disability of any person affected thereby, nor by any proceeding in any
court for reversing judgments or decrees: subject, however, to the right of any
person deprived of the land or of any estate or interest therein by decree of
registration obtained by fraud to file in the competent Court of First Instance a
petition for review within one year after entry of the decree provided no innocent
purchaser for value has acquired an interest. Upon the expiration of said term of
one year, every decree or certificate of title issued in accordance with this section
shall be incontrovertible. If there is any such purchaser, the decree of registration
shall not be opened, but shall remain in full force and effect forever, subject only to the
right of appeal hereinbefore provided: Provided, however, That no decree or certificate
of title issued to persons not parties to the appeal shall be cancelled or annulled. But
any person aggrieved by such decree in any case may pursue his remedy by action for
damages against the applicant or any other person for fraud in procuring the decree.
Whenever the phrase "innocent purchaser for value" or an equivalent phrase occurs in
this Act, it shall be deemed to include an innocent lessee, mortgagee, or other
encumbrancer for value. (Emphasis supplied)

The fraud contemplated in Section 38 of Act 496 refers to extrinsic or collateral fraud.
In Libudan v. Gil,[28] the Court explained the scope of extrinsic or collateral fraud as
follows:

x x x (T)he action to annul a judgment, upon the ground of fraud, would be unavailing
unless the fraud be extrinsicor collateral and the facts upon which it is based have not
been controverted or resolved in the case where the judgment sought to be annulled
was rendered. Extrinsic or collateral fraud, as distinguished from intrinsic fraud,
connotes any fraudulent scheme executed by a prevailing litigant "outside the trial of a
case against the defeated party, or his agents, attorneys or witnesses, whereby said
defeated party is prevented from presenting fully and fairly his side of the case."
But intrinsic fraud takes the form of "acts of a party in a litigation during the trial, such as
the use of forged instruments or perjured testimony, which did not affect the
presentation of the case, but did prevent a fair and just determination of the case."

Thus, relief is granted to a party deprived of his interest in land where the fraud consists
in a deliberate misrepresentation that the lots are not contested when in fact they are; or
in applying for and obtaining adjudication and registration in the name of a co-owner of
land which he knows had not been allotted to him in the partition; or in intentionally
concealing facts, and conniving with the land inspector to include in the survey plan the
bed of a navigable stream; or in willfully misrepresenting that there are no other claims;
or in deliberately failing to notify the party entitled to notice; or in inducing him not to
oppose an application; or in misrepresenting about the identity of the lot to the true
owner by the applicant causing the former to withdraw his application. In all these
examples the overriding consideration is that the fraudulent scheme of the prevailing
litigant prevented a party from having his day in court or from presenting his case. The
fraud, therefore, is one that affects and goes into the jurisdiction of the court.

x x x

We have repeatedly held that relief on the ground of fraud will not be granted where the
alleged fraud goes into the merits of the case, is intrinsic and not collateral, and has
been controverted and decided. Thus we have underscored the denial of relief where it
appears that the fraud consisted in the presentation at the trial of a supposed forged
document, or a false and perjured testimony, or in basing the judgment on a fraudulent
compromise agreement, or in the alleged fraudulent acts or omissions of the counsel
which prevented the petitioner from properly presenting the case.

The fraud being attributed to Andaang is not extrinsic and collateral. In Libudan, the
Court ruled that the allegation that neither the applicant nor his alleged successor-in-
interest has ever been in actual possession of the property in question since time
immemorial does not constitute extrinsic fraud.

Granting that Andaang committed extrinsic and collateral fraud, Hadji Munib, et al. failed
to avail of the remedy provided under Section 38 of Act 496 within the prescribed
period.

In Nelayan, et al. v. Nelayan, et al.,[29] this Court ruled that in the case of public land
grants (patents), the one-year period under Section 38 is counted from the issuance of
the patent by the government.

The Letters of Patent was issued on 17 February 1955. The brothers and sisters of
Saupi Moro filed Civil Case No. 41 for annulment of title only in July 1956, more than a
year after the issuance of the Letters of Patent. There is no evidence that Saupi Moro's
children, who are his compulsory heirs, intervened in the case. Insih's children who
claim to have succeeded to the rights of their mother also failed to intervene in the case.
Hadji Munib, et al. did not do anything to protect their interest, not even after the records
of Civil Case No. 41 were burned. Instead of availing of the remedy under Section 38 of
Act 496, Hadji Munib, et al. filed an action for partition on 23 February 1993, which must
fail because a Torrens title is not susceptible to collateral attack. Thus:

"It is a rule in this jurisdiction that once a public land has been brought under the Land
Registration Act, the Torrens title issued thereto is indefeasible. It is entitled to the same
regard as one issued in a judicial proceeding. The Torrens title is not susceptible to
collateral attack. The decree (or order of the Director of Lands for the issuance of the
patent in the case of a homestead) may be reviewed under Sec. 38 of the Land
Registration Act by filing the appropriate petition within one year from the issuance of
the said decree or from the issuance of the order for the issuance of the patent. Or an
appeal may be taken to the appellate court within the reglementary period from the
decision of the Court; and in the case of the homestead, the administrative remedies
may be pursued. These are the methods of direct attack." [30]

The Proper Party to Bring the Action

In any event, Hadji Munib, et al. are not the proper parties to file an action for
reconveyance of the land in dispute.

Even in Civil Case No. 41, the plaintiffs there did not claim that the land was privately
owned and thus not proper subject for homestead application. They only
alleged continuous possession of the land. Even in their Memorandum filed before
this Court, Hadji Munib, et al. only alleged that Andaang Gani violated the provisions of
CA 141 and that he was never in actual possession and occupation of the land in
dispute. Hadji Munib, et al. also acknowledged that Civil Case No. 31 only confirmed
Saupi Moro's physical possession of the land. Indeed, Civil Case No. 31, being a case
for illegal detainer, did not settle the issue of ownership of the land. The trial court
dismissed the complaint in that case only because the plaintiffs failed to establish their
right to recover possession of the land. Any determination of ownership made in the
illegal detainer case is not conclusive.

Evidently, the land was not privately owned by Gani Moro from whom Saupi Moro
"acquired" it. The land in dispute was part of the public domain before the issuance of
OCT No. P-793. If it were otherwise, there would be no need for Gani Moro's son,
Andaang, to file a homestead application.

The rule on this matter is clear:

All lands that were not acquired from the Government, either by purchase or by grant,
belong to the public domain. An exception to the rule would be any land that should
have been in the possession of an occupant and of his predecessors in interest since
time immemorial, for such possession would justify presumption that the land had never
been part of the public domain or that it had been a private property even before the
Spanish conquest.[31]

Hadji Munib, et al.'s action for partition effectively seeks to cancel the homestead patent
and the corresponding certificate of title. However, even if the homestead patent and the
certificate of title are cancelled, Hadji Munib, et al. will not acquire the land in the
concept of an owner. The land will revert to the government and will again form part of
the public domain.

Section 101 of CA 141 provides that actions for reversion of public lands fraudulently
awarded must be instituted by the Solicitor General and in the name of the Republic of
the Philippines.[32] Thus:

A certificate of title issued pursuant to a homestead patent partakes of the nature of a

certificate issued in a judicial proceeding, as long as the land disposed of is really a part
of the disposable land of the public domain and becomes indefeasible and
incontrovertible after one year from issuance. x x x. The only instance when a certificate
of title covering a tract of land, formerly a part of the patrimonial property of the State,
could be cancelled, is for failure on the part of the grantee to comply with the conditions
imposed by law, and in such case the proper party to bring the action would be the
Government to which the property would revert.[33]

Considering the foregoing, Hadji Munib, et al. have no personality to file an action to
recover possession of the land in dispute. Further, they failed to timely avail of whatever
remedy available to them to protect whatever interest they had over the land.

WHEREFORE, the Decision of the Shari'a District Court, Third Shari'a Judicial District,
Zamboanga City in Civil Case No. 13-3, is SET ASIDE, and another one is
entered DISMISSING the complaint in Civil Case No. 13-3.
SO ORDERED.

FORCIBLE ENTRY
AND UNLAWFUL
DETAINER
 THIRD DIVISION

[ G.R. No. 171842, July 22, 2009 ]

GLORIA S. DY, PETITIONER, VS. MANDY COMMODITIES CO., INC., RESPONDENT.

DECISION

CHICO-NAZARIO, J.:

This Petition for Review on Certiorari filed by petitioner Gloria S. Dy seeks to reverse
and set aside the 15 September 2005 Decision [1] of the Court of Appeals in CA-G.R. SP
No. 86478 dismissing petitioner's appeal on the ground of forum shopping and its
Resolution[2] dated 3 March 2006, denying the petitioner's motion for reconsideration.

This case has its origin in the contract entered into by the National Government with the
Philippine National Bank (PNB) on 9 June 1978, wherein the former leased in favor of
the latter the 21,727-square meter government-owned land located at Numancia Street,
corner Urbiztondo, Binondo, Manila. The lease was good for 25 years which
commenced on 1 August 1978 and was to expire on 31 July 2003, renewable for the
same period upon agreement of both parties.

On 17 October 1994, PNB sublet a portion of the subject land consisting of 8,530.l6
square meters to respondent Mandy Commodities Co., Inc. (Mandy Commodities), for a
period corresponding to PNB's contract with the National Government. Respondent
constructed on the subleased portion a two-storey warehouse which was leased out to
its tenants.

When the expiration of the subject lease contract was approaching, then Department of
Environment and Natural Resources (DENR) Secretary Heherson Alvarez (Secretary
Alvarez), on behalf of the government, issued a Memorandum Order dated 6 May 2002
initially approving the renewal of PNB's lease for another 25 years. In another
Memorandum dated 6 August 2002, Secretary Alvarez, however, recalled the earlier 6
May 2002 Memorandum and revoked the renewal of the said lease contract for the
purpose of clarifying the terms thereof and re-evaluating the role, qualifications and
capability of the subject realty's sub-lessees. Later, in a Final Endorsement dated 29
November 2002, Secretary Alvarez had a change of heart and approved the renewal of
the lease in favor of PNB and included respondent as one of the sub-lessees. This Final
Endorsement, though, did not last long as the then new DENR Secretary, Elisea Gozun,
issued a Memorandum dated 27 May 2003, withdrawing the lease contract with PNB
and, consequently calling off the sub-lease contract with the respondent.

Since the subject lease was about to expire, the Land Management Bureau (LMB), on
behalf of the National Government, in a letter dated 25 July 2003, informed PNB that a
take over team was created to effect repossession of the subject property and
requested the PNB to turn it over to the DENR upon the termination of the lease
contract.

On 30 July 2003, in order to avert the eventual take over, PNB commenced a complaint
for Injunction (PNB Injunction Case) with prayer for the issuance of a Temporary
Restraining Order (TRO) or Writ of Preliminary Injunction and damages docketed as
Civil Case No. 03-0368-CFM before the Regional Trial Court (RTC) of Pasay, Branch
118. The PNB alleged that the contract of lease between it and the National
Government had already been renewed by virtue of the 29 November 2002 Final
Endorsement of then Secretary Alvarez; hence, PNB's possession of the disputed
property must be respected by the LMB. The PNB Injunction Case prompted Secretary
Gozun to issue a Memorandum dated 31 July 2003 directing the LMB to observe
the status quo until further advice from her office or from the Pasay RTC.

In an Order dated 28 August 2003, the Pasay RTC in the PNB Injunction Case denied
PNB's application for TRO and/or Writ of Preliminary Injunction. The Pasay RTC also
ordered the LMB to secure and take over the subject land. PNB questioned this order
before the Court of Appeals in CA-G.R. SP No. 78980. Although the 28 August 2003
Order of the Pasay RTC had yet to be decided by the Court of Appeals, the LMB was
able to implement said order and gain possession of the subject property on 29 August
2003.
On 18 September 2003, the Court of Appeals, in the PNB Injunction Case, nullified the
said RTC Order and granted PNB's application for TRO.

Since the LMB had already taken possession of the questioned property, thereby
rendering the 18 September 2003 TRO issued by the Court of Appeals moot, the LMB
sought the legal advice of the Office of the Solicitor General (OSG). In its Opinion dated
23 September 2003, the OSG opined, among other things, that the TRO issued by the
Court of Appeals against it was indeed moot, and that provisional permits for occupancy
of the same property could be issued to qualified applicants, subject to the outcome of
the main PNB Injunction Case involving the property before the RTC.

In a letter dated 6 October 2003, PNB demanded the pull-out of the guards posted by
the LMB in the premises of the property. This demand letter was ignored by the LMB on
the strength of the Solicitor General's opinion.

In the meantime, banking on the same OSG opinion, LMB granted petitioner Gloria Dy a
provisional permit to occupy the subject realty. Equipped with the provisional permit
from the LMB, petitioner was able to enter and install her own guards in the premises of
the property on 10 October 2003. Petitioner also posted notices announcing that all the
tenants therein should secure from her an authorization to enter the same.

On 15 October 2003, respondent Mandy Commodoties, being the sub-lessee, reacted

to petitioner's intrusion on the subject property by filing a complaint for Damages with
prayer for injunction (Respondent's Injunction Case) and TRO docketed as Civil Case
No. 03108128 before the Manila RTC, Branch 25. On 21 October 2003, through the aid
of its own security personnel, respondent regained possession of the same property.

Meanwhile, in the PNB Injunction Case, the Court of Appeals in its 30 October 2003
Decision, affirmed the 28 August 2003 Order of the Pasay RTC denying PNB's
application for TRO on the ground that PNB failed to establish its right to the disputed
property. Although the Court of Appeals affirmed the 28 August 2003 Order of the Pasay
RTC, it nonetheless declared void the take over order, since the subject matter of the
PNB Injunction Case was limited to whether the grant of the provisional remedy of TRO
was warranted or not; hence, the RTC Pasay went beyond the matter submitted for
adjudication when it ordered the take over of the property. The Court of Appeals went on
by declaring that the take over by LMB of the property was void, and that any action
affecting PNB and its lease was also condemned as lacking any legal basis, since such
order to take over amounted to a disposition of the main case of injunction. PNB
elevated this adverse decision to this Court, which case was docketed as G.R. No.
164786.

On 7 November 2003, petitioner was able to wrest from respondent possession of the
property in question.

On 4 December 2003, respondent commenced the instant case with the Metropolitan
Trial Court (MeTC) of Manila, Branch 20, for Forcible Entry (Respondent's Forcible
Entry Case), with prayer for mandatory injunction, docketed as Civil Case No. 176953-
CV.

On 6 April 2004, in Respondent's Forcible Entry Case, the MeTC Manila ruled against
respondent, opining that, by virtue of the expiration of PNB's lease contract, respondent
lost its right to possess said property. Concomitantly, as respondent's right thereto was
intertwined with that of PNB, the same right also vanished.

Respondent appealed to the RTC Manila, Branch 30, for the dismissal of its forcible
entry complaint.

On 12 July 2004, the RTC Manila, in Respondent's Forcible Entry Case, reversed the
MeTC decision and ordered petitioner to vacate the subject property. It ruled that
despite the take over by the LMB, respondent was allowed to continue its business and
possession of the disputed landholding. Hence, it was respondent who had prior, actual
and physical possession of the property and had a better right over it. This favorable
decision prompted respondent to file a motion for immediate execution which was
granted by the RTC Manila and, accordingly, a Writ of Execution dated 7 September
2004 was issued in favor of the respondent. Conversely, petitioner's motion for
reconsideration of the RTC decision was denied. Undaunted, petitioner elevated the
case to the Court of Appeals, where it was docketed as CA-G.R. SP No. 86478.

Meanwhile, the OSG filed an Omnibus Motion seeking intervention in Respondent's

Forcible Entry Case, as well as the admission of its motion for reconsideration-in-
intervention of the RTC decision and opposition-in-intervention to respondent's motion
for immediate execution. The RTC Manila denied the Omnibus Motion filed by the OSG.
This adverse ruling was questioned by the OSG before the Court of Appeals, where it
was docketed as CA-G.R. SP No. 86307 (OSG Certiorari).

On 8 November 2004, petitioner moved for the consolidation of CA-G.R. SP No. 86307
and CA-G.R. SP No. 86478, a motion that was granted by the Court of Appeals, subject
to the conformity of the ponente in the former case.

On 21 April 2005, the OSG Certiorari (CA-G.R. SP No. 86307) was dismissed by the
Court of Appeals upon a motion filed by respondent. The Court of Appeals said that the
OSG should address its motion to intervene in CA-G.R. SP No. 86478. No further action
was taken by the OSG in CA-G.R. SP No. 86307.

In the meantime, on 15 May 2005, without waiting for the result of Respondent's
Forcible Entry Case (CA-G.R. SP No. 86478) pending before the Court of Appeals,
petitioner filed an Unlawful Detainer case (Petitioner's Unlawful Detainer Case) against
respondent before the MeTC Manila, Branch 15, where it was docketed as Civil Case
No. 00000004-CV. In her complaint, petitioner made use of the same facts as in CA-
G.R. SP No. 86478.

On account of the foregoing fact, respondent moved for the dismissal of CA-G.R. SP
No. 86478 on the ground of forum shopping. Calling the Court of Appeals' attention to
the 10 November 2004 and 2 February 2005 Resolutions of this Court in G.R. No.
164786 (PNB's Injunction Case) denying PNB's application for TRO, petitioner opposed
the motion to dismiss on the ground that, among other things, her Unlawful Detainer
Case was now premised on the settled termination of PNB's contract of lease with the
National Government as implied by said Resolutions.

In a Decision dated 15 September 2005, the Court of Appeals dismissed CA-G.R. SP

No. 86478 on the ground of forum shopping and for lack of merit. The Court of Appeals
stated that petitioner's filing of the Unlawful Detainer Case during the pendency of the
Respondent's Forcible Entry Case (CA-G.R. SP No. 86478) in the Court of Appeals
constituted forum shopping. The dispositive portion thereof reads:

WHEREFORE, the petition is DISMISSED on account of forum shopping and for lack of
merit[3].
On 6 October 2005, petitioner filed a Motion for Reconsideration. For its part,
respondent filed an Urgent Motion to Include in the Decision an Order Dismissing the
Case Simultaneously Commenced by the Petitioner Together with the Instant Petition.
The Court of Appeals was also apprised that petitioner's Unlawful Detainer Case had
already been decided by the MeTC Manila in petitioner's favor and was now pending
appeal before the Manila RTC, Branch 9.

In its 3 March 2006 Resolution, the Court of Appeals denied petitioner's motion for
reconsideration. The Court of Appeals, on the other hand, granted respondent's urgent
motion to dismiss Petitioner's Unlawful Detainer Case, which is now on appeal before
the RTC Manila.

Hence, the instant petition.

Petitioner maintains that she did not commit forum shopping, since there is no identity of
the cause of action or of the issue between Respondent's Forcible Entry Case and
Petitioner's Unlawful Detainer Case.

The petition is not meritorious.

Forum shopping is a deplorable practice of litigants consisting of resorting to two

different fora for the purpose of obtaining the same relief, to increase the chances of
obtaining a favorable judgment. [4] What is pivotal to the determination of whether forum
shopping exists or not is the vexation caused to the courts and the party-litigants by a
person who asks appellate courts and/or administrative entities to rule on the same
related causes and/or to grant the same or substantially the same relief, in the process
creating the possibility of conflicting decisions by the different courts or fora upon the
same issues.[5]

The grave evil sought to be avoided by the rule against forum shopping is the rendition
by two competent tribunals of two separate and contradictory decisions. Unscrupulous
party litigants, taking advantage of a variety of competent tribunals, may repeatedly try
their luck in several different fora until a favorable result is reached. To avoid the
resultant confusion, this Court adheres strictly to the rules against forum shopping, and
any violation of these rules results in the dismissal of a case. To stamp out this
abominable practice, which seriously impairs the efficient administration of justice, this
Court promulgated Administrative Circulars No. 28-91 and No. 04-94, which are now
embodied as Section 5, Rule 7 of the Rules of Court, which reads:

SEC. 5. Certification against forum shopping. -- The plaintiff or principal party shall
certify under oath in the complaint or other initiatory pleading asserting a claim for relief,
or in a sworn certification annexed thereto and simultaneously filed therewith: (a) that he
has not theretofore commenced any action or filed any claim involving the same issues
in any court, tribunal or quasi-judicial agency and, to the best of his knowledge, no such
other action or claim is pending therein; (b) if there is such other pending action or
claim, a complete statement of the present status thereof; and (c) if he should thereafter
learn that the same or similar action or claim has been filed or is pending, he shall
report that fact within five (5) days therefrom to the court wherein his aforesaid
complaint or initiatory pleading has been filed.

Failure to comply with the foregoing requirements shall not be curable by mere
amendment of the complaint or other initiatory pleading, but shall be a cause for the
dismissal of the case without prejudice, unless otherwise provided, upon motion and
after hearing. The submission of a false certification of or non-compliance with any of
the undertakings therein shall constitute indirect contempt of court, without prejudice to
the corresponding administrative and criminal actions. If the acts of the party or his
counsel clearly constitute willful and deliberate forum shopping, the same shall be a
ground for summary dismissal with prejudice and shall constitute direct contempt, as
well as a cause for administrative sanctions.

The test for determining the existence of forum shopping is whether the elements of litis
pendentia are present, or whether a final judgment in one case amounts to res
judicata in another. Thus, there is forum shopping when the following elements are
present: (a) identity of parties, or at least such parties as represent the same interests in
both actions; (b) identity of rights asserted and reliefs prayed for, the relief being
founded on the same facts; and (c) the identity of the two preceding particulars, such
that any judgment rendered in the other action will, regardless of which party is
successful, amount to res judicata in the action under consideration. Said requisites are
also constitutive of the requisites for auter action pendant or lis pendens.

In the instant case, the first element of forum shopping is present. The parties to CA-
G.R. SP No. 86478 and Petitioner's Unlawful Detainer Case are the same. As to the
second element, it must be stressed that in ejectment cases, either in unlawful detainer
or in forcible entry cases, the only issue to be resolved is the question of who is entitled
to the physical or material possession of the premises or possession de facto.[6] Thus,
these are summary proceedings intended to provide an expeditious means of protecting
actual possession or right of possession of property. Title is not involved; that is why it is
a special civil action with a special procedure. [7] Here, the rights asserted in both cases
are also identical, namely, the right of possession over the subject property. In fact, in
the Unlawful Detainer case, petitioner's cause of action was based on her alleged
superior right over the property in question as a lessee thereof, pursuant to the
provisional permit from the LMB, as against respondent's allegedly expired sub-lease
contract with the National Government. [8] This is the very same assertion of petitioner
and the contentious fact involved in CA-G.R. SP No. 86478 (Respondent's Forcible
Entry Case). As the issues in both cases refer singularly to the right of material
possession over the disputed property, then an adjudication in Repondent's Forcible
Entry Case constitutes an adjudication of Petitioner's Unlawful Detainer Case, such that
the latter court would be bound thereby and could not render a contrary ruling on the
very same issue.

Petitioner insists that, assuming arguendo he is guilty of forum shopping, the Court of
Appeals should have only dismissed CA-G.R. SP No. 86478 (Respondent's Forcible
Entry Case) and allowed Petitioner's Unlawful Detainer Case be decided first by the
MeTC.

Petitioner's argument is inaccurate.

Once there is a finding of forum shopping, the penalty is summary dismissal not only of
the petition pending before this Court, but also of the other case that is pending in a
lower court. This is so because twin dismissal is a punitive measure to those who trifle
with the orderly administration of justice.

In Buan v. Lopez, Jr.,[9] petitioners therein instituted before the Court a special civil
action for prohibition and, almost a month earlier, another special civil action for
"prohibition with preliminary injunction" before the RTC Manila. Finding petitioners guilty
of forum shopping, the Court dismissed not only the action before it, but also the special
civil action still pending before the RTC, viz:
Indeed, the petitioners in both actions x x x have incurred not only the sanction of
dismissal of their case before this Court in accordance with Rule 16 of the Rules of
Court, but also punitive measure of dismissal of both their actions, that in this
Court and that in Regional Trial Court as well.[10]

Also, in First Philippine International Bank v. Court of Appeals,[11] an action for specific
performance became the subject of a petition for review before the Court. While said
case was pending, a second one -- denominated as a derivative suit and involving the
same parties, causes of action and reliefs -- was filed before the RTC Makati. The Court
therein dismissed the petition before it and the derivative suit that was pending before
the RTC Makati, thus:

[F]inding the existence of forum-shopping x x x, the only sanction now is the dismissal
of both cases x x x.[12]

Taking our cue from these cases, the Court of Appeals' action of dismissing petitioner's
appeal relative to Respondent's Forcible Entry Case and Petitioner's Unlawful Detainer
Case is, therefore, warranted.

Moreover, even as we pass upon the merit of the instant case, we find that the Court of
Appeals did not err in dismissing the same.

There is forcible entry or desahucio when one is deprived of physical possession of land
or building by means of force, intimidation, threat, strategy or stealth. [13] The basic
inquiry centers on who has the prior possession de facto. In filing forcible entry cases,
the law tells us that two allegations are mandatory for the municipal court to acquire
jurisdiction: first, the plaintiff must allege prior physical possession of the property; and
second, he must also allege that he was deprived of his possession by any of the
means provided for in Section 1, Rule 70 of the Rules of Court, i.e., by force,
intimidation, threat, strategy or stealth. It is also settled that in the resolution of such
cases, what is important is determining who is entitled to the physical possession of the
property. Thus, the plaintiff must prove that he was in prior physical possession of the
premises until he was deprived thereof by the defendant. Indeed, any of the parties who
can prove prior possession de facto may recover the possession even from the owner
himself, since such cases proceed independently of any claim of ownership, and the
plaintiff needs merely to prove prior possession de facto and undue deprivation thereof.
In the case under consideration, the Court of Appeals found that respondent as sub-
lessee of the PNB was acting within its prerogatives as possessor when it filed the
forcible entry suit against petitioner. From 1994 until the controversy arose, respondent
was in peaceful possession of the property in question. The Court of Appeals even
pointed out that even when the LMB gained possession of the property on 29 August
2003, respondent was allowed to continue business within the premises. In contrast,
petitioner's possession was predicated on the provisional permit issued to her by LMB
and the 28 August 2003 Order of the Pasay City RTC in the PNB Injunction Case. It
must be noted that the said order directing the take over of the disputed property was
declared void by the Court of Appeals, even when it denied the propriety of the issuance
of a TRO in the PNB Injunction Case. The said ruling of the Court of Appeals was in turn
affirmed in the 10 November 2004 and 2 February 2005 Resolutions in G.R. No.
164786. Considering that the possession of petitioner was declared void, and bearing in
mind that the validity of petitioner's provisional permit to occupy the property is yet to be
settled in the PNB Injunction Case, still pending in the Pasay City RTC, petitioner's
occupation thereof is without legal authority. Simply put, petitioner has no right to
occupy the property. In contrast, respondent's right to occupy it remains intact, since the
records of the case are barren of any indication that the National Government or the
PNB made a formal demand on the respondent to vacate said property. The way things
stand, respondent, whose prior possession over the property remains intact, has the
better right over it. Thus, when it filed the instant forcible entry case against petitioner
who forcibly took possession thereof on 7 November 2003, respondent was just
exercising its right.

In sum, this Court defers to the findings of the Court of Appeals, there being no cogent
reason to veer away from such findings.

WHEREFORE, premises considered, the instant petition is DENIED. The Decision of

the Court of Appeals dated 15 September 2005 and its Resolution dated 3 March 2006
dismissing petitioner's appeal of the adverse resolution against her in Respondent's
Forcible Entry Case (CA-G.R. No. 86478) and Petitioner's Unlawful Detainer Case
((Civil Case No. 00000004-CV) in the MeTC Manila, Branch 15, are
hereby AFFIRMED. Costs against petitioner.

SO ORDERED.
 SECOND DIVISION
[ G.R. No. 167390, July 26, 2010 ]
SPOUSES ADOLFO FERNANDEZ, SR., AND LOURDES FERNANDEZ,
PETITIONERS, VS. SPOUSES MARTINES CO AND ERLINDA CO, RESPONDENTS.

DECISION
PERALTA, J.:
This is a petition for review on certiorari[1] of the Decision[2] of the Court of Appeals dated
November 30, 2004 in CA-G.R. SP No. 85994, and its Resolution [3] dated March 10,
2005, denying petitioners' motion for reconsideration.

The Decision of the Court of Appeals reversed and set aside the Decision of the
Regional Trial Court (RTC) of Dagupan City, Branch 44, and reinstated the Decision of
the Municipal Trial Court (MTC) of Calasiao, Pangasinan, finding respondents entitled
to possession of the property involved in this case, but deleting the award of moral and
exemplary damages for lack of legal basis.

The facts are as follows:

The property involved in this case is Lot 978, Cad. 439-D, with an area of 1,209 square
meters, located in Nalsian, Calasiao, Pangasinan.

Respondents' predecessor-in-interest, Emilio Torres, married to Pilar Torres, applied for,

and was granted, a free patent over the subject property, described as Lot 978, Cad.
439-D, Calasiao Cadastre. The said free patent, issued on June 10, 1996 by President
Fidel V. Ramos, was registered with the Register of Deeds for the Province of
Pangasinan, and Katibayan ng Orihinal na Titulo Blg. P-35620[4] covering the subject
property was issued in the name of Emilio Torres. Petitioner Adolfo Fernandez filed an
Affidavit of Adverse Claim with the Register of Deeds of Pangasinan and had the same
annotated on Emilio Torres' title on July 16, 1996. [5]

The adverse claim was eventually cancelled when Emilio Torres filed an Affidavit of
Cancellation of Adverse Claim[6] with the Register of Deeds of Pangasinan, alleging,
among others, that adverse claimant Adolfo Fernandez failed to pursue his claim in
court, and that he executed an Affidavit [7] dated March 20, 1996, wherein he admitted
that Emilio Torres is the actual owner in possession of the subject property. The
Affidavit of petitioner Adolfo Fernandez reads:

I, ADOLFO FERNANDEZ, of legal age, married, Filipino citizen, and resident of Lasip,
Calasiao, Pangasinan, after having been duly sworn to in accordance with law hereby
depose and say:

That I know personally EMILIO L. TORRES, of legal age, married, Filipino citizen and
resident of Lasip, Calasiao, Pangasinan as the legal and true owner of a parcel of land
described as Lot No. 978, Cad. 439-D situated at Nalsian, Calasiao, Pangasinan;

That I am one and the same person who was listed as survey claimant over Lot No.
978, Cad. 439-D situated at Nalsian, Calasiao, Pangasinan; and that Rodolfo
Fernandez and Adolfo Fernandez are one and the same person which refers to me;

That during the execution of the Cadastral Survey of Calasiao, Pangasinan, the
surveyor who executed the survey made a mistake or an error in putting my name
as survey claimant over Lot No. 978, Cad. 439-D, while in truth and in fact the
actual owner of said lot is Emilio L. Torres who is in actual possession and
cultivation of said land;

That I execute this Affidavit freely and voluntarily and have read and understood the
contents hereof.[8]

Thereafter, Emilio Torres executed an Affidavit of Request for Issuance of New Transfer
Certificate of Title[9] dated September 20, 1996 and filed the same before the Register of
Deeds of Pangasinan. Acting favorably thereon, the Register of Deeds of Pangasinan
cancelled Katibayan ng Orihinal na Titulo Blg. P-35620 and issued Transfer Certificate
of Title (TCT) No. 216709 [10] in the name of Emilio Torres. Emilio Torres declared the
subject property for taxation.[11]
On June 6, 1997, the spouses Emilio and Pilar Torres sold the subject property to
respondents spouses Martines and Erlinda Co, as evidenced by a Deed of Absolute
Sale.[12] TCT No. T-216709 in the name of Emilio Torres was cancelled, and TCT No. T-
236032[13] was issued in the name of respondents spouses Martines and Erlinda Co.
Respondents took actual physical possession of the property, and erected concrete
posts and barbed wire fence enclosing the property.

On August 14, 1997, respondents obtained a loan from Solid Bank in the amount of
P8,000,000.00, and mortgaged the subject property to secure the loan. [14]

Subsequently, a portion of the property, denominated as Lot 978-B, was segregated and
made part of the Judge Jose De Venecia, Sr. Highway covered by TCT No. T-236033
(Road Lot).[15] The remaining portion, denominated as Lot 978-A, covered by TCT No. T-
236032,[16] now subject matter of the controversy, pertained to respondents.

On September 3, 2001, respondents' possession of the subject property was disturbed

by petitioner Adolfo Fernandez, who destroyed the perimeter fence surrounding the
property and started construction work therein.

In order to protect their interest, respondents filed a Complaint for quieting of title and
injunction with damages before the RTC of Dagupan City, but the complaint was
dismissed for lack of jurisdiction.

On January 22, 2002, respondents filed a Complaint for forcible entry/ejectment before
the MTC in Calasiao, Pangasinan (trial court).

In their Answer to the Complaint and, later, Position Paper, petitioners alleged that
respondents had no cause of action against them as the subject property belonged to
them. Petitioners claimed to have long been in actual possession of Lot No. 978 when
the said lot, including Lot No. 661-A and Lot No. 661-B originally formed part of an
unirrigated riceland with an area of 3,904 square meters, originally recorded as
Cadastral Lot No. 661 under Tax Declaration No. 16357 [17] issued in the names of
petitioners in 1973. Tax Declaration No. 16357 was cancelled and Tax Declaration No.
455[18] was issued in 1980 by the Calasiao Municipal Assessor's Office. Subsequently,
Tax Declaration No. 455 was cancelled and Tax Declaration No. 494 [19] was issued in
1982 in the names of petitioners.

Petitioners further alleged that when Cadastral Lot No. 661 was traversed by the Judge
Jose de Venecia, Sr. Highway, the said lot was subdivided into Cadastral Lot No. 661-
A, Cadastral Lot 661-B, and Cadastral Lot No. 978. Tax Declaration No. 13162,
[20]
covering Cadastral Lot No. 661-A, was issued in the name of the Republic of the
Philippines on December 12, 1995. Tax Declaration No. 13163, covering Lot No. 661-B,
[21]
was allegedly issued in the name of petitioners. Tax Declaration No. 13161,
[22]
covering Lot No. 978, was issued in the name of petitioners.

Petitioners averred that sometime in 1996, they learned that Lot No. 978, Cad. 439-D
was covered by Original Certificate of Title (OCT) No. P-35620 by virtue of the issuance
of a Free Patent in the name of Emilio Torres. Hence, petitioners executed an Affidavit
of Adverse Claim, which adverse claim was annotated on the original title of Emilio
Torres.

Petitioners claimed that they had the subject lot fenced, and the lot was leased on
January 4, 2000 to Architect Andres L. Gutierrez, Jr., who constructed the necessary
building and improvements thereon for the operation of a car wash. They asserted that
it was not true that respondents fenced the lot with concrete posts and perimeter barbed
wire, because it was already fenced by petitioners.

Petitioners alleged that respondents' reliance on TCT No. 216709, which was
fraudulently issued in the name of Emilio Torres, who is respondents' predecessor-in-
interest, cannot be maintained as the subject property is private land belonging to
petitioners; hence, it cannot be the subject of a free patent.

Respondents' prayer for the issuance of a Writ of Preliminary Injunction was denied by
the trial court for lack of merit.

On March 31, 2003, the trial court rendered a Decision [23] in favor of respondents, the
dispositive portion of which reads:

WHEREFORE, premises duly considered, judgment is hereby rendered, ordering the

defendants and any and all persons acting for and [in] their behalf to vacate and
surrender possession of Lot 978, Cad. 439-D, Calasiao Cadastre, to and in favor of the
plaintiffs. The defendants are ordered further to pay to the plaintiffs, the following:

1. The amount of P12,000.00 per month as the reasonable rental for the use and
occupation of the premises commencing from September 13, 2001 (first judicial
demand) until the actual physical possession of the premises shall have been
surrendered by the defendants to the plaintiffs;
2. P100,000.00 as moral damages;
3. P50,000.00 as exemplary damages;
4. P30,000.00 as attorney's fees; and other expenses of litigation, and
5. The costs of suit.[24]

The trial court found that the evidence adduced by respondents showed that they and
their predecessors-in-interest were the ones in actual, continuous physical possession
of the subject lot for thirty (30) years being the registered owners thereof.

Moreover, the trial court pointed out that the adverse claim of petitioners, which was
annotated on the original title of Emilio Torres, respondents' predecessor-in-interest,
was cancelled by reason of the Affidavit dated March 20, 1996, wherein petitioner
Adolfo Fernandez recognized Emilio Torres as the legal and true owner in actual
possession and cultivation of the subject property.

Further, the trial court held that petitioners' allegation that Lot 978 is part of Lot 661,
which they owned, is belied by the approved cadastral survey of Calasiao, Pangasinan,
showing that Lot 978 and Lot 661 are two distinct lots. According to the trial court, the
claim of petitioners that they are in prior possession of Lot 978 is based on the false
assumption that Lot 978 is part of Lot 661. While petitioners are the owners and in
possession of Lot 661, respondents are the owners and in possession of Lot 978. In his
Affidavit dated March 20, 1996, petitioner Adolfo Fernandez recognized the possession
and ownership of the subject lot by Emilio Torres, respondents' predecessor-in-interest.
Hence, petitioners now cannot claim otherwise; they are bound by their own admission.

The trial court also held that respondents cannot just be unlawfully deprived of peaceful
possession of their property by petitioners under Article 536 of the Civil Code of the
Philippines.
Petitioners appealed the trial court's decision to the RTC of Dagupan City, Branch 44.

In a Decision[25] dated January 12, 2004, the RTC reversed the decision of the trial
court. The dispositive portion of the decision reads:

WHEREFORE, the appeal is given due course and the Decision appealed from is
REVERSED. In this connection, the ejectment case is DISMISSED.

The plaintiffs-appellees are ordered to pay P100,000.00 to the defendants-appellants by

way of moral damages, and P25,000.00 by way of exemplary damages. The plaintiffs-
appellees are also ordered to pay the amount of P40,000.00 for the services of counsel
and P1,000.00 per appearance.[26]

The RTC stated that although a Deed of Absolute Sale was executed by the spouses
Emilio and Pilar Torres in favor of respondents, the title of respondents is void on two
grounds: (1) the property is a private unirrigated riceland owned by petitioners; hence, it
cannot be the subject of a free patent; and (2) even assuming for the sake of argument
that the property could be the subject of a free patent, the same was disposed within the
prohibitory period.

Respondents appealed the RTC's Decision to the Court of Appeals via a petition for
review.

On November 30, 2004, the Court of Appeals rendered a Decision, the dispositive
portion of which reads:

WHEREFORE, the present petition is GRANTED and the Decision dated January 12,
2004 rendered by the Regional Trial Court in Dagupan City is REVERSED and SET
ASIDE. The Decision dated March 31, 2003 of the Municipal Trial Court is reinstated,
with the MODIFICATION that the award of moral and exemplary damages is hereby
deleted for lack of legal basis.[27]

The Court of Appeals held that the Affidavit of petitioner Adolfo Fernandez, dated March
20, 1996, wherein he admitted that respondents' predecessor-in-interest, Emilio L.
Torres, was in actual possession and cultivation of the subject property and was the
owner thereof, belied petitioners' claim that they were the owners and possessors of the
subject property.

Petitioners' motion for reconsideration was denied in a Resolution dated March 10,
2005.

Hence, petitioners filed this petition, raising the following issues:

I.

THE COURT OF APPEALS GRIEVOUSLY ERRED ON A QUESTION OF LAW WHEN

IT RULED THAT IT IS UNNECESSARY TO INQUIRE ON THE VALIDITY OF TITLE OF
RESPONDENTS DESPITE THE FACT THAT THE CLAIM OF POSSESSION BY THE
RESPONDENTS IS ANCHORED ON THEIR ALLEGED OWNERSHIP OF THE
SUBJECT PARCEL OF LAND.

II.

THE COURT OF APPEALS GRIEVOUSLY ERRED ON A QUESTION OF LAW

WHEN [IT DECIDED] CA-G.R. SP NO. 85994 ON THE ISSUE [OF] DE
FACTO POSSESSION DESPITE RULING THAT THE ISSUES IN SAID CASE
SHOULD HAVE ULTIMATELY BEEN RESOLVED BY THE AFFIDAVIT OF PETITIONER
ADOLFO FERNANDEZ WHICH INVOLVES A QUESTION OF OWNERSHIP.

III.

THE COURT OF APPEALS GRIEVOUSLY ERRED ON A QUESTION OF LAW WHEN

IT FAILED TO RULE THAT PETITIONERS HAVE BEEN IN JURIDICAL AND
MATERIAL POSSESSION AS PROVEN BY OVERWHELMING EVIDENCE.

IV.

THE COURT OF APPEALS GRIEVOUSLY ERRED ON A QUESTION OF LAW WHEN

IT DID NOT RULE ON THE PROCEDURAL MISSTEPS COMMITTED BY
RESPONDENTS WHICH SHOULD HAVE MERITED THE DISMISSAL OF CA-G.R. SP
NO. 85994.

V.
THE COURT OF APPEALS GRIEVOUSLY ERRED ON A QUESTION OF LAW WHEN
IT HASTILY DECIDED CA-G.R. SP NO. 85994 WITHOUT INFORMING PETITIONERS
THAT SAID CASE HAD ALREADY BEEN SUBMITTED FOR DECISION.

VI.

THE COURT OF APPEALS GRIEVOUSLY ERRED ON A QUESTION OF LAW WHEN

IT DECIDED CA-G.R. SP NO. 85994 BASED ON A DOCUMENT WHICH SHOULD
NOT HAVE BEEN ADMITTED AS EVIDENCE IN THE FIRST PLACE. [28]

The main issue in this case is who between the parties is entitled to the possession of
Lot 978, Cad. 439-D located in Nalsian, Calasiao, Pangasinan.

The Court upholds the Decision of the Court of Appeals, reinstating the decision of the
trial court that respondents are entitled to the possession of Lot 978, Cad. 439-D.

In unlawful detainer and forcible entry cases, the only issue to be determined is who
between the contending parties has the better right to possess the contested property,
independent of any claim of ownership. [29] However, where the issue of ownership is so
intertwined with the issue of possession, the courts may pass upon the issue of
ownership if only to determine who has the better right to possess the property.[30]

The evidence on record shows that respondents and their predecessors-in-interest have
been in continuous and actual physical possession of the subject property, and are the
registered owners thereof.

Respondents' predecessor-in-interest, Emilio Torres, applied for a free patent over the
subject property under Section 44 of Commonwealth Act 141, which provides:

Sec. 44. Any natural-born citizen of the Philippines who is not the owner of more than
twenty-four hectares, and who since July fourth nineteen hundred and twenty-six or
prior thereto, has continuously occupied and cultivated, either by himself or
through his predecessor- in-interest, a tract or tract of agricultural public lands
subject to disposition, or who shall have paid the real tax thereon while the same
has not been occupied by any other person shall be entitled, under the provisions
of this chapter, to have a free patent issued to himfor such tract or tracts of such
land not to exceed twenty-four hectares.[31]

The application was granted as evidenced by OCT No. P-35620 [32] covering the subject
property identified as Lot No. 978, Cad. 439-D of the Calasiao Cadastre, registered in
the name of Emilio Torres on June 13, 1996.

The Court may presume, absent any evidence to the contrary, that the free patent over
the subject property was issued to Emilio Torres only after a determination that he had
duly complied with all the requirements, specifically the requirement of continuous
occupation and cultivation of the property.

Moreover, petitioners' adverse claim that was annotated on the original title of Emilio
Torres was cancelled, since petitioner Adolfo Fernandez had earlier executed an
Affidavit[33] recognizing Emilio Torres as the true owner of the subject property. The
pertinent portion of the Affidavit of petitioner Adolfo Fernandez states:

x x x x

That during the execution of the Cadastral Survey of Calasiao, Pangasinan, the
surveyor who executed the survey made a mistake or an error in putting my name as
survey claimant over Lot No. 978, Cad. 439-D, while in truth and in fact the actual
owner of said lot is Emilio L. Torres who is in actual possession and cultivation of
said land.[34]

Petitioner Adolfo Fernandez is bound by this admission in his Affidavit, which he

declared was freely and voluntarily executed by him. The admission proves that
petitioners have not been in actual physical and material possession of the subject
property, but respondents' predecessor-in-interest, Emilio Torres, had been in actual
possession and cultivation of the property.

Upon the sale of the subject property by the spouses Emilio and Pilar Torres to
respondents, respondents took possession of the property, and a new transfer
certificate of title was issued in the name of respondents. Hence, respondents had
actual, physical possession of the subject property.
Moreover, the Court agrees with the finding of the trial court that petitioners' claim of
being in prior possession of Lot 978 is based on the false assumption that Lot 978 is
part of Lot No. 661. Petitioners claimed in their Answer [35]that they have long been in
actual possession of Lot 978 when the said lot, including Lot No. 661-A and Lot No.
661-B originally formed part of an unirrigated riceland recorded as Cadastral Lot No.
661 under Tax Declaration No. 16357 issued in the names of petitioners.

The Court notes that based on the original cadastral survey [36] of Calasiao, Pangasinan,
Lot 978 is distinct from Lot No. 661, although they are adjacent lots.

The tax declarations[37] issued in the name of petitioners showed that petitioners
declared ownership and paid for real property taxes of Lot No. 661 alone. Lot No. 661
was described in Tax Declarations Nos. 455, 494 and 457 [38] as a parcel of unirrigated
riceland with an area of 3,904 square meters. However, in the survey[39] made for
petitioner Adolfo Fernandez by Geodetic Engineer Leonardo V. De Vera on November
13, 1995, Lot No. 661 had a land area of only 2,679 square meters, which should
prevail over the land area stated in petitioners' tax declarations (3,904 square meters).

After a part of Lot No. 661 was purchased on December 11, 1995 by the Republic of the
Philippines, petitioners claimed that Lot No. 661 was subdivided into Lot No. 661-A, Lot
No. 661-B and Lot 978.

In 1996, petitioners declared ownership of Lot 978 in Tax Declaration No. 13161,
[40]
which cancelled Tax Declaration No. 457 [41] pertaining to declaration of ownership
and payment of the real property tax of Lot No. 661 alone. It must be emphasized that
petitioners' previous tax declarations pertained only to Lot No. 661, and did not include
Lot 978, which is a distinct lot from Lot No. 661 in the original cadastral survey [42] of
Calasiao, Pangasinan.

In view of the foregoing, the Court finds that petitioners' allegation that that they have
long been in actual possession of the subject property converting it into their private
property has not been substantiated.

Further, petitioners contend that even if the free patent title issued to Emilio Torres is
valid, the sale of the property by Emilio Torres to respondents within the five-year
prohibitive period renders respondents' title null and void; hence, the possession being
claimed by respondents must necessarily fail.

The Court is not persuaded.

Ejectment proceedings are summary proceedings only intended to provide an

expeditious means of protecting actual possession or right to possession of property. [43]
The sole issue to be resolved is who is entitled to the physical or material possession of
the premises or possession de facto.[44] The Court sustains the Decision of the Court of
Appeals that respondents are entitled to the possession of the subject property as they
are found to be the ones in actual possession of the property after it was sold to them
by the registered owners, Emilio and Pilar Torres. The issue of the validity of the title of
respondents can only be assailed in an action expressly instituted for that purpose.
[45]
Section 48 of Presidential Decree No. 1529 [46] specifically states that a certificate of
title shall not be subject to collateral attack, and that it cannot be altered, modified or
cancelled, except in a direct proceeding in accordance with law.

In Mediran v. Villanueva,[47] the Court held:

x x x In giving recognition to the action of forcible entry and detainer the purpose of the
law is to protect the person who in fact has actual possession; and in case of
controverted right, it requires the parties to preserve the status quo until one or the other
of them sees fit to invoke the decision of a court of competent jurisdiction upon the
question of ownership. It is obviously just that the person who has first acquired
possession should remain in possession pending this decision; and the parties cannot
be permitted meanwhile to engage in a petty warfare over the possession of the
property which is the subject of dispute. To permit this would be highly dangerous to
individual security and disturbing to social order. Therefore, where a person supposes
himself to be the owner of a piece of property and desires to vindicate his ownership
against the party actually in possession, it is incumbent upon him to institute an action
to this end in a court of competent jurisdiction; and he [cannot] be permitted, by invading
the property and excluding the actual possessor, to place upon the latter the burden of
instituting an action to try the property right.

In addition, petitioners contend that respondents' petition for review should have been
dismissed by the Court of Appeals for failing to state in their certification of forum
shopping that an action to quiet title was filed by petitioners against respondents which
was pending before the RTC of Dagupan City, Branch 44.

The contention is unmeritorious.

The Court of Appeals correctly held in its Resolution dated March 10, 2005, denying
petitioners' motion for reconsideration, that respondents' non-disclosure of the action to
quiet title cannot be taken against them, because ejectment cases proceed
independently of any claim of ownership. [48]

Petitioners also contend that the Court of Appeals erred in hastily deciding the appeal
after the Comment and Reply were filed, without informing petitioners that the case had
already been submitted for decision, insinuating that they were denied due process.

The contention is without merit.

The Court of Appeals already resolved the same issue in its Resolution dated March 10,
2005, wherein it stated that petitioners cannot feign denial of due process as they were
afforded the opportunity to present their side through their Comment, which was taken
into account by the appellate court.

The Court of Appeals is not obliged to inform the parties that the petition will be given
due course based on the Comment and Reply of the parties. It has the discretion to
resolve the case after the Comment and Reply have been filed, or it may still require
the parties to submit a Memorandum before resolution of the case. Sections 6 and 9 of
Rule 42 of the Rules of Court state:

SEC. 6. Due Course. -- If upon the filing of the comment or such other pleadings as the
court may allow or require, or after the expiration of the period for the filing thereof
without such comment or pleading having been submitted, the Court of Appeals
finds prima facie that the lower court has committed an error of fact or law that will
warrant a reversal or modification of the appealed decision, it may accordingly give due
course to the petition.

SEC. 9. Submission for decision. -- If the petition is given due course, the Court of
Appeals may set the case for oral argument or require the parties to submit memoranda
within a period of fifteen (15) days from notice. The case shall be deemed submitted
for decision upon the filing of the last pleading or memorandum required by these Rules
or by the court itself.[49]

In this case, the case was deemed submitted for decision upon the filing of the last
pleading, which is the Reply, required by the Court of Appeals.

As regards the other technical defects raised in issue, We agree with the Court of
Appeals that rules of procedure are merely tools designed to facilitate the attainment of
justice. Their strict and rigid application especially on technical matters, which tend to
frustrate rather than promote substantial justice, must be avoided. [50]

The other technical issues raised by petitioners to have been committed by the trial
court was overlooked by it in the interest of justice. The trial court correctly held that
rules of procedure are construed liberally in order not to defeat or supplant substantive
rights of the parties, considering that respondents have a cause of action against
petitioners who forcibly deprived respondents' possession of the subject property in
contravention of Article 536 of the Civil Code, thus:

Art. 536. In no case may possession be acquired through force or intimidation as long
as there is a possessor who objects thereto. He who believes that he has an action or a
right to deprive another of the holding of a right, must invoke the aid of the competent
court, if the holder should refuse to deliver the thing.

As a final word, the court's adjudication of ownership in an ejectment case is merely

provisional, and affirmance of the trial court's decision would not prejudice an action
between the same parties involving title to the property.[51] Section 18, Rule 70 of the
Rules of Court specifically provides:

Sec. 18. x x x The judgment rendered in an action for forcible entry or

detainer shall be conclusive with respect to the possession only and shall in no
wise bind the title or affect the ownership of the land or building. Such judgment shall
not bar an action between the same parties respecting title to the land or building. [52]

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals dated
November 30, 2004 in CA-G.R. SP No. 85994, and its Resolution dated March 10,
2005, are hereby AFFIRMED.
Costs against petitioners.

SO ORDERED.

SECOND DIVISION

[ G.R. NO. 144057, January 17, 2005 ]

REPUBLIC OF THE PHILIPPINES, PETITIONER, VS. THE HONORABLE COURT OF

APPEALS AND CORAZON NAGUIT, RESPONDENTS.

DECISION

TINGA, J.:

This is a Petition for Review on Certiorari under Rule 45 of the 1997 Rules of Civil
Procedure, Seeking to review the Decision[1] of the Sixth Division of the Court of
Appeals dated July 12, 2000 in CA-G.R. SP No. 51921. The appellate court affirmed
the decisions of both the Regional Trial Court (RTC), [2] Branch 8, of Kalibo, Aklan dated
February 26, 1999, and the 7 th Municipal Circuit Trial Court (MCTC) [3] of Ibajay-Nabas,
Aklan dated February 18, 1998, which granted the application for registration of a parcel
of land of Corazon Naguit (Naguit), the respondent herein.

The facts are as follows:

On January 5, 1993, Naguit, a Filipino citizen, of legal age and married to Manolito S.
Naguit, filed with the MCTC of Ibajay-Nabas, Aklan, a petition for registration of title of a
parcel of land situated in Brgy. Union, Nabas, Aklan. The parcel of land is designated as
Lot No. 10049, Cad. 758-D, Nabas Cadastre, AP 060414-014779, and contains an
area of 31,374 square meters. The application Seeks judicial confirmation of
respondents imperfect title over the aforesaid land.

On February 20, 1995, the court held initial hearing on the application. The public
prosecutor, appearing for the government, and Jose Angeles, representing the heirs of
Rustico Angeles, opposed the petition. On a later date, however, the heirs of Rustico
Angeles filed a formal opposition to the petition. Also on February 20, 1995, the court
issued an order of general default against the whole world except as to the heirs of
Rustico Angeles and the government.

The evidence on record reveals that the subject parcel of land was originally declared
for taxation purposes in the name of Ramon Urbano (Urbano) in 1945 under Tax
Declaration No. 3888 until 1991.[4] On July 9, 1992, Urbano executed a Deed of
Quitclaim in favor of the heirs of Honorato Maming (Maming), wherein he renounced
all his rights to the subject property and confirmed the sale made by his father to
Maming sometime in 1955 or 1956.[5]Subsequently, the heirs of Maming executed a
deed of absolute sale in favor of respondent Naguit who thereupon started occupying
the same. She constituted Manuel Blanco, Jr. as her attorney-in-fact and administrator.
The administrator introduced improvements, planted trees, such as mahogany, coconut
and gemelina trees in addition to existing coconut trees which were then 50 to 60 years
old, and paid the corresponding taxes due on the subject land. At present, there are
parcels of land surrounding the subject land which have been issued titles by virtue of
judicial decrees. Naguit and her predecessors-in-interest have occupied the land
openly and in the concept of owner without any objection from any private person or
even the government until she filed her application for registration.

After the presentation of evidence for Naguit, the public prosecutor manifested that the
government did not intend to present any evidence while oppositor Jose Angeles, as
representative of the heirs of Rustico Angeles, failed to appear during the trial despite
notice. On September 27, 1997, the MCTC rendered a decision ordering that the
subject parcel be brought under the operation of the Property Registration Decree or
Presidential Decree (P.D.) No. 1529 and that the title thereto registered and confirmed
in the name of Naguit.[6]

The Republic of the Philippines (Republic), thru the Office of the Solicitor General
(OSG), filed a motion for reconsideration. The OSG stressed that the land applied for
was declared alienable and disposable only on October 15, 1980, per the certification
from Regional Executive Director Raoul T. Geollegue of the Department of Environment
and Natural Resources, Region VI. [7] However, the court denied the motion for
reconsideration in an order dated February 18, 1998. [8]
Thereafter, the Republic appealed the decision and the order of the MCTC to the RTC,
Kalibo, Aklan, Branch 8. On February 26, 1999, the RTC rendered its decision,
dismissing the appeal.[9]

Undaunted, the Republic elevated the case to the Court of Appeals via Rule 42 of the
1997 Rules of Civil Procedure. On July 12, 2000, the appellate court rendered a
decision dismissing the petition filed by the Republic and affirmed in toto the assailed
decision of the RTC.

Hence, the present petition for review raising a pure question of law was filed by the
Republic on September 4, 2000. [10]

The OSG assails the decision of the Court of Appeals contending that the appellate
court gravely erred in holding that there is no need for the governments prior release of
the subject lot from the public domain before it can be considered alienable or
disposable within the meaning of P.D. No. 1529, and that Naguit had been in
possession of Lot No. 10049 in the concept of owner for the required period. [11]

Hence, the central question for resolution is whether is necessary under Section 14(1)
of the Property Registration Decree that the subject land be first classified as alienable
and disposable before the applicants possession under a bona fide claim of ownership
could even start.

The OSG invokes our holding in Director of Lands v. Intermediate Appellate Court [12] in
arguing that the property which is in open, continuous and exclusive possession must
first be alienable. Since the subject land was declared alienable only on October 15,
1980, Naguit could not have maintained a bona fide claim of ownership since June 12,
1945, as required by Section 14 of the Property Registration Decree, since prior to
1980, the land was not alienable or disposable, the OSG argues.

Section 14 of the Property Registration Decree, governing original registration

proceedings, bears close examination. It expressly provides:

SECTION 14. Who may apply. The following persons may file in the proper Court of
First Instance an application for registration of title to land, whether personally or
through their duly authorized representatives:
(1) those who by themselves or through their predecessors-in-interest have been in
open, continuous, exclusive and notorious possession and occupation of alienable and
disposable lands of the public domain under a bona fide claim of ownership since June
12, 1945, or earlier.

(2) Those who have acquired ownership over private lands by prescription under the
provisions of existing laws.

....
There are three obvious requisites for the filing of an application for registration of title
under Section 14(1) that the property in question is alienable and disposable land of
the public domain; that the applicants by themselves or through their predecessors-in-
interest have been in open, continuous, exclusive and notorious possession and
occupation, and; that such possession is under a bona fide claim of ownership since
June 12, 1945 or earlier.

Petitioner suggests an interpretation that the alienable and disposable character of the
land should have already been established since June 12, 1945 or earlier. This is not
borne out by the plain meaning of Section 14(1). Since June 12, 1945, as used in the
provision, qualifies its antecedent phrase under a bonafide claim of ownership.
Generally speaking, qualifying words restrict or modify only the words or phrases to
which they are immediately associated, and not those distantly or remotely located.
[13]
Ad proximum antecedents fiat relation nisi impediatur sentencia.

Besides, we are mindful of the absurdity that would result if we adopt petitioners
position. Absent a legislative amendment, the rule would be, adopting the OSGs view,
that all lands of the public domain which were not declared alienable or disposable
before June 12, 1945 would not be susceptible to original registration, no matter the
length of unchallenged possession by the occupant. Such interpretation renders
paragraph (1) of Section 14 virtually inoperative and even precludes the government
from giving it effect even as it decides to reclassify public agricultural lands as alienable
and disposable. The unreasonableness of the situation would even be aggravated
considering that before June 12, 1945, the Philippines was not yet even considered an
independent state.

Instead, the more reasonable interpretation of Section 14(1) is that it merely requires
the property sought to be registered as already alienable and disposable at the time the
application for registration of title is filed. If the State, at the time the application is made,
has not yet deemed it proper to release the property for alienation or disposition, the
presumption is that the government is still reserving the right to utilize the property;
hence, the need to preserve its ownership in the State irrespective of the length of
adverse possession even if in good faith. However, if the property has already been
classified as alienable and disposable, as it is in this case, then there is already an
intention on the part of the State to abdicate its exclusive prerogative over the property.

This reading aligns conformably with our holding in Republic v. Court of Appeals.
[14]
Therein, the Court noted that to prove that the land subject of an application for
registration is alienable, an applicant must establish the existence of a positive act of
the government such as a presidential proclamation or an executive order; an
administrative action; investigation reports of Bureau of Lands investigators; and a
legislative act or a statute. [15]In that case, the subject land had been certified by the
DENR as alienable and disposable in 1980, thus the Court concluded that the alienable
status of the land, compounded by the established fact that therein respondents had
occupied the land even before 1927, sufficed to allow the application for registration of
the said property. In the case at bar, even the petitioner admits that the subject property
was released and certified as within alienable and disposable zone in 1980 by the
DENR.[16]

This case is distinguishable from Bracewell v. Court of Appeals,[17] wherein the Court
noted that while the claimant had been in possession since 1908, it was only in 1972
that the lands in question were classified as alienable and disposable. Thus, the bid at
registration therein did not succeed. In Bracewell, the claimant had filed his application
in 1963, or nine (9) years before the property was declared alienable and disposable.
Thus, in this case, where the application was made years after the property had been
certified as alienable and disposable, theBracewell ruling does not apply.

A different rule obtains for forest lands, [18] such as those which form part of a reservation
for provincial park purposes[19] the possession of which cannot ripen into ownership. [20] It
is elementary in the law governing natural resources that forest land cannot be owned
by private persons. As held in Palomo v. Court of Appeals,[21] forest land is not
registrable and possession thereof, no matter how lengthy, cannot convert it into private
property, unless such lands are reclassified and considered disposable and alienable.
[22]
In the case at bar, the property in question was undisputedly classified as disposable
and alienable; hence, the ruling in Palomo is inapplicable, as correctly held by the Court
of Appeals.[23]

It must be noted that the present case was decided by the lower courts on the basis of
Section 14(1) of the Property Registration Decree, which pertains to original registration
through ordinary registration proceedings. The right to file the application for registration
derives from a bona fide claim of ownership going back to June 12, 1945 or earlier, by
reason of the claimants open, continuous, exclusive and notorious possession of
alienable and disposable lands of the public domain.

A similar right is given under Section 48(b) of the Public Land Act, which reads:

Sec. 48. The following described citizens of the Philippines, occupying lands of the
public domain or claiming to own any such land or an interest therein, but those titles
have not been perfected or completed, may apply to the Court of First Instance of the
province where the land is located for confirmation of their claims and the issuance of a
certificate of title therefor, under the Land Registration Act, to wit:

xxx xxx xxx

(b) Those who by themselves or through their predecessors in interest have been in
open, continuous, exclusive, and notorious possession and occupation of agricultural
lands of the public domain, under a bona fide claim of acquisition of ownership, for at
least thirty years immediately preceding the filing of the application for confirmation of
title except when prevented by war or force majeure. These shall be conclusively
presumed to have performed all the conditions essential to a Government grant and
shall be entitled to a certificate of title under the provisions of this chapter.

When the Public Land Act was first promulgated in 1936, the period of possession
deemed necessary to vest the right to register their title to agricultural lands of the public
domain commenced from July 26, 1894. However, this period was amended by R.A.
No. 1942, which provided that the bona fide claim of ownership must have been for at
least thirty (30) years. Then in 1977, Section 48(b) of the Public Land Act was again
amended, this time by P.D. No. 1073, which pegged the reckoning date at June 12,
1945. This new starting point is concordant with Section 14(1) of the Property
Registration Decree.
Indeed, there are no material differences between Section 14(1) of the Property
Registration Decree and Section 48(b) of the Public Land Act, as amended. True, the
Public Land Act does refer to agricultural lands of the public domain, while the
Property Registration Decree uses the term alienable and disposable lands of the
public domain. It must be noted though that the Constitution declares that alienable
lands of the public domain shall be limited to agricultural lands. [24] Clearly, the subject
lands under Section 48(b) of the Public Land Act and Section 14(1) of the Property
Registration Decree are of the same type.

Did the enactment of the Property Registration Decree and the amendatory P.D. No.
1073 preclude the application for registration of alienable lands of the public domain,
possession over which commenced only after June 12, 1945? It did not, considering
Section 14(2) of the Property Registration Decree, which governs and authorizes the
application of those who have acquired ownership of private lands by prescription
under the provisions of existing laws.

Prescription is one of the modes of acquiring ownership under the Civil Code. [25] There
is a consistent jurisprudential rule that properties classified as alienable public land may
be converted into private property by reason of open, continuous and exclusive
possession of at least thirty (30) years. [26] With such conversion, such property may now
fall within the contemplation of private lands under Section 14(2), and thus susceptible
to registration by those who have acquired ownership through prescription. Thus, even
if possession of the alienable public land commenced on a date later than June 12,
1945, and such possession being been open, continuous and exclusive, then the
possessor may have the right to register the land by virtue of Section 14(2) of the
Property Registration Decree.

The land in question was found to be cocal in nature, it having been planted with
coconut trees now over fifty years old. [27] The inherent nature of the land but confirms its
certification in 1980 as alienable, hence agricultural. There is no impediment to the
application of Section 14(1) of the Property Registration Decree, as correctly
accomplished by the lower courts.

The OSG posits that the Court of Appeals erred in holding that Naguit had been in
possession in the concept of owner for the required period. The argument begs the
question. It is again hinged on the assertionshown earlier to be unfoundedthat
there could have been no bona fide claim of ownership prior to 1980, when the subject
land was declared alienable or disposable.

We find no reason to disturb the conclusion of both the RTC and the Court of Appeals
that Naguit had the right to apply for registration owing to the continuous possession by
her and her predecessors-in-interest of the land since 1945. The basis of such
conclusion is primarily factual, and the Court generally respects the factual findings
made by lower courts. Notably, possession since 1945 was established through proof of
the existence of 50 to 60-year old trees at the time Naguit purchased the property as
well as tax declarations executed by Urbano in 1945. Although tax declarations and
realty tax payment of property are not conclusive evidence of ownership, nevertheless,
they are good indicia of the possession in the concept of owner for no one in his right
mind would be paying taxes for a property that is not in his actual or at least
constructive possession. They constitute at least proof that the holder has a claim of title
over the property. The voluntary declaration of a piece of property for taxation purposes
manifests not only ones sincere and honest desire to obtain title to the property and
announces his adverse claim against the State and all other interested parties, but also
the intention to contribute needed revenues to the Government. Such an act
strengthens ones bona fide claim of acquisition of ownership. [28]

Considering that the possession of the subject parcel of land by the respondent can be
traced back to that of her predecessors-in-interest which commenced since 1945 or for
almost fifty (50) years, it is indeed beyond any cloud of doubt that she has acquired title
thereto which may be properly brought under the operation of the Torrens system. That
she has been in possession of the land in the concept of an owner, open, continuous,
peaceful and without any opposition from any private person and the government itself
makes her right thereto undoubtedly settled and deserving of protection under the law.

WHEREFORE, foregoing premises considered, the assailed Decision of the Court of

Appeals dated July 12, 2000 is hereby AFFIRMED. No costs.

SO ORDERED.
[24]
Section 3, Article XII, Constitution.
[25]
See Article 1113, Civil Code, which states: All things which are within the commerce
of men are susceptible of prescription, unless otherwise provided. Property of the State
or any of its subdivisions not patrimonial in character shall not be the object of
prescription.

THIRD DIVISION
[ G.R. No. 178908, February 04, 2010 ]
SPOUSES EULOGIO N. ANTAZO AND NELIA C. ANTAZO, PETITIONERS, VS.
LEONIDES DOBLADA, DIOSDADO CELESTRA, LEOPOLDO CELESTRA,
FERDINAND CELESTRA, AND ROBERTO DOBLADA, RESPONDENTS.

DECISION
NACHURA, J.:
This is a petition for review on certiorari of the Court of Appeals (CA) Decision [1] dated
February 28, 2007 and Resolution [2] dated July 18, 2007, which affirmed the order
directing petitioners to vacate the subject property.

The case arose from the following antecedents:

Respondents, Leonides Doblada, Diosdado Celestra, Leopoldo Celestra, Ferdinand

Celestra, and Roberto Doblada, filed a complaint for forcible entry against petitioners,
spouses Eulogio N. Antazo and Nelia C. Antazo. The complaint alleged that
respondents have been in open and peaceful possession of a parcel of land, identified
as Assessor's Lot Nos. 112 and 113, located in Barangay Pila-Pila, Binangonan, Rizal,
with an area of, approximately, 551.87 square meters. [3]

Respondents narrated that, in May 2003, they received a letter from petitioners, through
the Panganiban Law Office, informing them that the latter had bought the property. It
was made to appear in the said letter that respondents forcibly took possession of the
property from petitioners. Respondents replied that they could not have wrested
possession of the property from petitioners, as they were in possession thereof and
that, in fact, on June 11, 2003, petitioners evicted them therefrom, destroyed
respondents' bamboo fence, and constructed a concrete perimeter fence thereon. [4]

In their Answer, petitioners admitted that they sent a letter to respondents through the
Panganiban Law Office, but they denied that respondents had been in possession of
the property since time immemorial. They averred that respondents failed to show their
right to recover possession of the property. On the contrary, petitioners claimed that they
are the ones entitled to possess the property considering that they purchased it from a
certain Carmencita S. Anciano, registered it for taxation purposes in their names, and
paid the real property tax thereon.

The records reveal that the subject property is part of the parcel of land owned by
Eduardo Paralejas, respondents' great grandfather, who died in 1939. Paralejas had
three daughters: Matea, Eufemia and Leoncia. On April 12, 1983, Eufemia and Atanacio
Buesa, Matea's son, purportedly executed an Extrajudicial Settlement and Sale,
[5]
adjudicating to themselves the entire parcel of land and, at the same time, selling it to
Guadalupe Morales Sevillano. The document bears the thumbprints of Eufemia and
Atanacio, which, respondents claim, are not genuine. After Sevillano died on November
24, 1995, her sole heir, Carmencita S. Anciano, petitioners' predecessor-in-interest,
executed a document, denominated as Sinumpaang Salaysay ng Paglilipat sa Sarili ng
Mga Lupang Naiwan ng Namatay,[6] adjudicating to herself the properties that Sevillano
left, which included the subject property. On April 21, 2003, Anciano sold the subject
property to petitioners.[7]

On July 2, 2004, the Municipal Trial Court (MTC) dismissed the complaint because
respondents failed to prove by preponderance of evidence that they had prior
possession of the subject property. The court a quo found that ownership and
possession of the subject property was transferred to petitioners when they purchased
the same from Anciano. [8]

On appeal, the Regional Trial Court (RTC) initially affirmed the MTC Decision. [9] Upon
respondents' motion for reconsideration, the RTC, in an Order dated May 29, 2006,
reversed its previous decision and ruled in favor of respondents, thus:
Wherefore, this Court reconsiders the Decision of Judge Bernelito R. Fernandez, dated
August 18, 2005, and the Decision of the Municipal Trial Court of Binangonan dated
July 2, 2004 is hereby reversed as follows:

A. That the complaint which was dismissed by the Lower Court is hereby reinstated.

B. That this Court finds that the plaintiffs-appellants were in prior possession of lot
112 and 113, subject of this case, before defendants-appellees Eulogio Antazo and
Nelia Antazo forcibly seized possession of the aforementioned property from the
plaintiffs-appellants.

C. That defendants-appellees, Eulogio Antazo, and Nelia Antazo are hereby ordered
to vacate lots 112, 113 situated at Barrio Pila-Pila, Binangonan, Rizal, covered by Tax
Declaration No. 17-0765 consisting of 787.87 square meters.

D. That there was a substantial compliance of the Katarungan Pambarangay Law.

E. That the defendants-appellees are hereby ordered to pay 1,000.00 a month as

reasonable compensation for the occupancy of the lots from the time they purchased
the property on April 21, 2003 up to the present.

F. The defendants-appellees are hereby ordered to pay attorney's fees in the

amount of 20,000.00 pesos.

G. To pay the costs of suit.

SO ORDERED.[10]

Petitioners moved for reconsideration, but the motion was denied by the RTC on August
1, 2006.[11]

Unrelenting, petitioners filed a petition for review with the CA. On February 28, 2007,
the CA affirmed the RTC decision with modification, thus:

WHEREFORE, premises considered, the petition is DENIED. The assailed Orders are
hereby AFFIRMED withMODIFICATION deleting the award of P1,000.00 as reasonable
compensation for the use and occupation of the land from April 21, 2003 up to the
present.
 SO ORDERED.[12]

According to the CA, petitioners may not eject respondents from the subject property
since it appears that, as between them, the latter had prior possession thereof.
Assuming that petitioners have the legal title to the property and that respondents are
mere usurpers thereof, the latter are nonetheless entitled to stay until they are lawfully
ejected therefrom.[13] The CA also deleted the amount of reasonable compensation
awarded to respondents for the use and occupation of the property, ratiocinating that
the latter can recover only the damages they have sustained as mere possessors. [14]

Both petitioners and respondents moved for the partial reconsideration of the decision.
In a Resolution dated July 18, 2007, the CA denied both motions. [15]

Petitioners filed this petition for review on certiorari, ascribing the following errors to the
CA:

I. THE COURT OF APPEALS ERRED IN NOT RULING THAT THE REGIONAL

TRIAL COURT ERRED IN REVERSING ITS EARLIER DECISION DATED AUGUST
18, 2005 AND IN ORDERING THE EJECTMENT OF PETITIONERS FROM LOTS
112 AND 113;

II. THE COURT OF APPEALS ERRED IN NOT RULING THAT PETITIONERS

HAVE PRIORITY IN POSSESSION OF THE SUBJECT PROPERTY.[16]

Petitioners contend that respondents' claim is not supported by competent evidence.

They aver that when they bought the property from Anciano, the latter transferred to
them possession and ownership of the subject property. They point out that, after they
purchased the property from Anciano, they declared it in their names for taxation
purposes and paid real property tax thereon.

The petition is without merit.

Petitioners' argument is misplaced, considering that this is a forcible entry case. They
are apparently referring to "possession" flowing from ownership of the property, as
opposed to actual possession. In ejectment cases, possession means nothing more
than actual physical possession, not legal possession in the sense contemplated in civil
law.[17]

Prior physical possession is the primary consideration in a forcible entry case. A party
who can prove prior possession can recover such possession even against the owner
himself. Whatever may be the character of his possession, if he has in his favor prior
possession in time, he has the security that entitles him to remain on the property until a
person with a better right lawfully ejects him. [18] The party in peaceable quiet possession
shall not be thrown out by a strong hand, violence or terror.[19]

We are convinced that respondents were in prior possession of the property and that
petitioners deprived them of such possession by means of force.

In the Letter dated May 26, 2003, Atty. Jimmy R. Panganiban of Panganiban Law Office,
on behalf of petitioners, wrote to respondents:

According to my clients, they bought the above-mentioned property from the true and
absolute owner sometime in April 2003. Immediately upon the sale of said land in their
favor, they took possession thereof in the concept of an owner. They reported to me that
they are now fencing said property. They were surprise[d] that through force, violence,
threat, strategy, and stealth you deprived them of possession. The saddest part of it is
that you timed the deprivation after they have already paid a worker for one week
fencing activity. They have already bought fencing construction materials such as
gravel[,] sand, steel, wires, and others. They could not understand why you are doing
this thing to them because they know that you have no legal basis [for] putting up a
bamboo fence at the frontage portion of the said property.

Accordingly, FINAL DEMAND is hereby made upon all of you to remove the bamboo
fence and to restore my clients' possession within five (5) days from receipt of this
letter. If you [fail] to comply with this demand, I shall take it that I am at liberty to file an
ejectment case against all of you in order to protect the rights and interests of my
clients.[20]

The RTC correctly concluded that it would have been unnecessary to write the letter if
petitioners were already in possession of the property. The contents of the letter are
clear--petitioners are demanding that respondents restore possession of the property to
them.

We also note that petitioners did not deny in their Answer respondents' allegation that
they constructed a concrete fence on the subject property. Failure to specifically deny
the allegation amounts to a judicial admission. Unlawfully entering the subject property,
erecting a structure thereon and excluding therefrom the prior possessor would
necessarily imply the use of force. In order to constitute force, the trespasser does not
have to institute a state of war.[21] No other proof is necessary.

While the Letter intimates that petitioners were in possession of the property prior to
respondents and that the latter were the ones who forcibly evicted them therefrom, such
statement is clearly self-serving and unsupported by other evidence. Verily, this
information, assuming that it is true, is not relevant to the resolution of this case. This
case involves respondents' cause of action against petitioners for evicting them from the
subject property which was in their possession. It is immaterial how respondents came
into such possession or by what right they did so. Even usurpers of land owned by
another are entitled to remain on it until they are lawfully ejected therefrom. [22]

Granting that petitioners had earlier possession and respondents were the ones who
first forcibly dispossessed them of the property, this circumstance would not have given
petitioners license to recover possession in the same way. Such course of action is
precisely what is sought to be avoided by the rule on ejectment. The underlying
philosophy behind ejectment suits is to prevent breach of the peace and criminal
disorder and to compel the party out of possession to respect and resort to the law
alone to obtain what he claims is his. The party deprived of possession must not take
the law into his own hands. [23] Petitioners would have had a right of action against
respondents to file an ejectment suit, but they evidently let the chance pass and chose
the easier and faster way. Unfortunately for them, this time, their opponents chose to
resort to appropriate judicial measures.

WHEREFORE, the petition is DENIED DUE COURSE. The CA Decision dated

February 28, 2007 and Resolution dated July 18, 2007 are AFFIRMED.

SO ORDERED.
 FIRST DIVISION
[ G.R. NO. 132424, May 04, 2006 ]
SPOUSES BONIFACIO R. VALDEZ, JR. AND VENIDA M. VALDEZ, PETITIONERS,
VS. HON. COURT OF APPEALS, SPOUSES GABRIEL FABELLA AND FRANCISCA
FABELLA, RESPONDENTS.

DECISION
CHICO-NAZARIO, J.:
This petition for review under Rule 45 of the Rules of Court, filed by petitioners spouses
Bonifacio R. Valdez, Jr. and Venida M. Valdez, seeks to nullify and set aside the 22 April
1997 decision[1] and 30 January 1998 resolution of the Court of Appeals in CA-G.R. SP
No. 43492, which reversed the judgment, dated 8 January 1997, of the Regional Trial
Court of Antipolo, Rizal, Branch 74, in Civil Case No. 3607, which, in turn, affirmed in
toto the decision rendered by the Municipal Trial Court of Antipolo, Rizal, Branch II, in
Civil Case No. 2547.

This case originated from a complaint for unlawful detainer filed by petitioners Bonifacio
and Venida Valdez against private respondents Gabriel and Francisca Fabella before
the Municipal Trial Court of Antipolo, Rizal. The complaint alleges these material facts:
2. That plaintiffs are the registered owner[s] of a piece of residential lot
denominated as Lot [N]o. 3 Blk 19 located at Carolina Executive Village, Brgy. Sta.
Cruz, Antipolo, Rizal which [they] acquired from Carolina Realty, Inc. Sometime [i]n
November 1992 by virtue of Sales Contract, xerox copy of which is hereto attached
marked as Annex "A" and the xerox copy of the Torrens Certificate of Title in her
name marked as Annex "B";
3. That defendants, without any color of title whatsoever occupie[d] the said lot by
building their house in the said lot thereby depriving the herein plaintiffs rightful
possession thereof;

4. That for several times, plaintiffs orally asked the herein defendants to peacefully
surrender the premises to them, but the latter stubbornly refused to vacate the lot
they unlawfully occupied;

5. That despite plaintiffs' referral of the matter to the Barangay, defendants still
refused to heed the plea of the former to surrender the lot peacefully;

6. That because of the unfounded refusal of the herein defendants to settle the
case amicably, the Barangay Captain was forced to issue the necessary Certification
to File Action in favor of the herein plaintiffs in order that the necessary cause of
action be taken before the proper court, xerox copy of which is hereto attached
marked as Annex "C";

7. That by reason of the deliberate, malicious and unfounded refusal of the

defendants to vacate/surrender the premises in question, the herein plaintiffs were
constrained to engage the professional services of counsel thus incurring expenses
amounting to TEN THOUSAND PESOS (P10,000.00) representing acceptance fee
and additional ONE THOUSAND PESOS (P1,000.00) per appearance, who on July
12, 1994 sent a formal demand was likewise ignored, (sic) copy of which is hereto
attached as Annex "D";

8. That likewise by virtue of the adamant refusal of the defendants to

vacate/surrender the said premises in question, plaintiff[s] suffered serious anxiety,
sleepless nights, mental torture and moral erosion; x x x [2]
In their answer, private respondents contended that the complaint failed to state that
petitioners had prior physical possession of the property or that they were the lessors of
the former. In the alternative, private respondents claimed ownership over the land on
the ground that they had been in open, continuous, and adverse possession thereof for
more than thirty years, as attested by an ocular inspection report from the Department
of Environment and Natural Resources. They also stressed that the complaint failed to
comply with Supreme Court Circular No. 28-91 regarding affidavits against non-forum
shopping.

The Municipal Trial Court (MTC) rendered a decision in favor of the petitioners, ordering
private respondents to vacate the property and to pay rent for the use and occupation of
the same plus attorney's fees.

Private respondents appealed the MTC's decision to the Regional Trial Court (RTC).
The RTC, in a decision dated 8 January 1997, affirmed in toto the decision of the MTC.

Undeterred, the private respondents filed a petition for review with the Court of Appeals
on 10 March 1997 questioning the decision of the RTC.

In a decision dated 22 April 1997, the Court of Appeals reversed and set aside the
decision of the RTC. It held that petitioners failed to make a case for unlawful detainer
because they failed to show that they had given the private respondents the right to
occupy the premises or that they had tolerated private respondents' possession of the
same, which is a requirement in unlawful detainer cases. It added that the allegations in
petitioners' complaint lack jurisdictional elements for forcible entry which requires an
allegation of prior material possession. The Court of Appeals ratiocinated thus:
An examination of the complaint reveals that key jurisdictional allegations that will
support an action for ejectment are conspicuously lacking. In particular, an allegation of
prior material possession is mandatory in forcible entry, xxx and the complaint is
deficient in this respect. On the other hand, neither does there appear to be a case of
unlawful detainer, since the private respondents failed to show that they had given the
petitioners the right to occupy the premises, which right has now [been] extinguished.

xxx

In light of the foregoing, the conclusion is inevitable that the Municipal Trial Court before
which the action for ejectment was filed had no jurisdiction over the case. Consequently,
the dismissal thereof is in order.

WHEREFORE, the Petition is hereby GIVEN DUE COURSE, and GRANTED. The
decision dated 08 January 1997 rendered by the respondent court is hereby
REVERSED and SET ASIDE, and judgment is hereby rendered DISMISSING the
complaint in Civil Case No. 2547 of the Municipal Trial Court of Antipolo, Rizal for lack of
jurisdiction.[3]
Petitioners filed a motion for reconsideration which was denied in a resolution dated 30
January 1998.[4]

Hence, the instant petition.

Petitioners submit the following issues for the Court's consideration [5]:
A. WHETHER OR NOT THE ALLEGATIONS OF THE COMPLAINT CLEARLY
MADE OUT A CASE FOR UNLAWFUL DETAINER.

B. WHETHER OR NOT BASED ON THE ALLEGATION(S) OF THE COMPLAINT,

THE MUNICIPAL TRIAL COURT OF ANTIPOLO, RIZAL, CLEARLY HAS ORIGINAL
JURISDICTION OVER THE INSTANT COMPLAINT FILED BEFORE IT.
Since the two issues are closely intertwined, they shall be discussed together.

In the main, petitioners claim that the averments of their complaint make out a case for
unlawful detainer having alleged that private respondents unlawfully withheld from them
the possession of the property in question, which allegation is sufficient to establish a
case for unlawful detainer. They further contend that the summary action for ejectment
is the proper remedy available to the owner if another occupies the land at the former's
tolerance or permission without any contract between the two as the latter is bound by
an implied promise to vacate the land upon demand by the owner.

The petition is not meritorious.

Under existing law and jurisprudence, there are three kinds of actions available to
recover possession of real property: (a) accion interdictal; (b) accion publiciana; and
(c) accion reivindicatoria.[6]

Accion interdictal comprises two distinct causes of action, namely, forcible entry
(detentacion) and unlawful detainer (desahuico).[7] In forcible entry, one is deprived of
physical possession of real property by means of force, intimidation, strategy, threats, or
stealth whereas in unlawful detainer, one illegally withholds possession after the
expiration or termination of his right to hold possession under any contract, express or
implied.[8] The two are distinguished from each other in that in forcible entry, the
possession of the defendant is illegal from the beginning, and that the issue is which
party has prior de facto possession while in unlawful detainer, possession of the
defendant is originally legal but became illegal due to the expiration or termination of the
right to possess.[9]

The jurisdiction of these two actions, which are summary in nature, lies in the proper
municipal trial court or metropolitan trial court. [10] Both actions must be brought within
one year from the date of actual entry on the land, in case of forcible entry, and from the
date of last demand, in case of unlawful detainer.[11] The issue in said cases is the right
to physical possession.

Accion publiciana is the plenary action to recover the right of possession which should
be brought in the proper regional trial court when dispossession has lasted for more
than one year.[12] It is an ordinary civil proceeding to determine the better right of
possession of realty independently of title. [13] In other words, if at the time of the filing of
the complaint more than one year had elapsed since defendant had turned plaintiff out
of possession or defendant's possession had become illegal, the action will be, not one
of the forcible entry or illegal detainer, but an accion publiciana. On the other
hand, accion reivindicatoria is an action to recover ownership also brought in the proper
regional trial court in an ordinary civil proceeding. [14]

To justify an action for unlawful detainer, it is essential that the plaintiff's supposed acts
of tolerance must have been present right from the start of the possession which is later
sought to be recovered.[15] Otherwise, if the possession was unlawful from the start, an
action for unlawful detainer would be an improper remedy. [16] As explained in Sarona v.
Villegas[17]:
But even where possession preceding the suit is by tolerance of the owner, still,
distinction should be made.

If right at the incipiency defendant's possession was with plaintiff's tolerance, we do not
doubt that the latter may require him to vacate the premises and sue before the inferior
court under Section 1 of Rule 70, within one year from the date of the demand to
vacate.

xxxx
A close assessment of the law and the concept of the word "tolerance" confirms our
view heretofore expressed that such tolerance must be present right from the start of
possession sought to be recovered, to categorize a cause of action as one of unlawful
detainer - not of forcible entry . Indeed, to hold otherwise would espouse a dangerous
doctrine. And for two reasons: First. Forcible entry into the land is an open challenge to
the right of the possessor. Violation of that right authorizes the speedy redress - in the
inferior court - provided for in the rules. If one year from the forcible entry is allowed to
lapse before suit is filed, then the remedy ceases to be speedy; and the possessor is
deemed to have waived his right to seek relief in the inferior court. Second, if a forcible
entry action in the inferior court is allowed after the lapse of a number of years, then the
result may well be that no action of forcible entry can really prescribe. No matter how
long such defendant is in physical possession, plaintiff will merely make a demand,
bring suit in the inferior court - upon a plea of tolerance to prevent prescription to set in -
and summarily throw him out of the land. Such a conclusion is unreasonable. Especially
if we bear in mind the postulates that proceedings of forcible entry and unlawful detainer
are summary in nature, and that the one year time-bar to suit is but in pursuance of the
summary nature of the action.[18] (Underlining supplied)
It is the nature of defendant's entry into the land which determines the cause of action,
whether it is forcible entry or unlawful detainer. If the entry is illegal, then the action
which may be filed against the intruder is forcible entry. If, however, the entry is legal but
the possession thereafter becomes illegal, the case is unlawful detainer.

Indeed, to vest the court jurisdiction to effect the ejectment of an occupant, it is

necessary that the complaint should embody such a statement of facts as brings the
party clearly within the class of cases for which the statutes provide a remedy, as these
proceedings are summary in nature. [19] The complaint must show enough on its face the
court jurisdiction without resort to parol testimony.[20]

The jurisdictional facts must appear on the face of the complaint. When the complaint
fails to aver facts constitutive of forcible entry or unlawful detainer, as where it does not
state how entry was affected or how and when dispossession started, the remedy
should either be an accion publiciana or an accion reivindicatoria in the proper regional
trial court.[21] Thus, in Go, Jr. v. Court of Appeals,[22] petitioners filed an unlawful detainer
case against respondent alleging that they were the owners of the parcel of land
through intestate succession which was occupied by respondent by mere tolerance of
petitioners as well as their deceased mother. Resolving the issue on whether or not
petitioners' case for unlawful detainer will prosper, the court ruled [23]:
Petitioners alleged in their complaint that they inherited the property registered under
TCT No. C-32110 from their parents; that possession thereof by private respondent was
by tolerance of their mother, and after her death, by their own tolerance; and that they
had served written demand on December, 1994, but that private respondent refused to
vacate the property. x x x

It is settled that one whose stay is merely tolerated becomes a deforciant illegally
occupying the land the moment he is required to leave. It is essential in unlawful
detainer cases of this kind, that plaintiff's supposed acts of tolerance must have been
present right from the start of the possession which is later sought to be recovered. This
is where petitioners' cause of action fails. The appellate court, in full agreement with the
MTC made the conclusion that the alleged tolerance by their mother and after her
death, by them, was unsubstantiated. x x x

The evidence revealed that the possession of defendant was illegal at the inception and
not merely tolerated as alleged in the complaint, considering that defendant started to
occupy the subject lot and then built a house thereon without the permission and
consent of petitioners and before them, their mother. xxx Clearly, defendant's entry into
the land was effected clandestinely, without the knowledge of the owners, consequently,
it is categorized as possession by stealth which is forcible entry. As explained in Sarona
vs. Villegas, cited in Muoz vs. Court of Appeals [224 SCRA 216 (1992)] tolerance must
be present right from the start of possession sought to be recovered, to categorize a
cause of action as one of unlawful detainer not of forcible entry x x x.
And in the case of Ten Forty Realty and Development Corp. v. Cruz,[24] petitioner's
complaint for unlawful detainer merely contained the bare allegations that (1)
respondent immediately occupied the subject property after its sale to her, an action
merely tolerated by petitioner; and (2) her allegedly illegal occupation of the premises
was by mere tolerance. The court, in finding that the alleged tolerance did not justify the
action for unlawful detainer, held:
To justify an action for unlawful detainer, the permission or tolerance must have been
present at the beginning of the possession. x x x

xxxx
In this case, the Complaint and the other pleadings do not recite any averment of fact
that would substantiate the claim of petitioner that it permitted or tolerated the
occupation of the property by Respondent Cruz. The complaint contains only bare
allegations that 1) respondent immediately occupied the subject property after its sale to
her, an action merely tolerated by petitioner; and 2) her allegedly illegal occupation of
the premises was by mere tolerance.

These allegations contradict, rather than support, petitioner's theory that its cause of
action is for unlawful detainer.First, these arguments advance the view that
respondent's occupation of the property was unlawful at its inception.Second, they
counter the essential requirement in unlawful detainer cases that petitioner's supposed
act of sufferance or tolerance must be present right from the start of a possession that is
later sought to be recovered.[25]
In the instant case, the allegations in the complaint do not contain any averment of fact
that would substantiate petitioners' claim that they permitted or tolerated the occupation
of the property by respondents. The complaint contains only bare allegations that
"respondents without any color of title whatsoever occupies the land in question by
building their house in the said land thereby depriving petitioners the possession
thereof." Nothing has been said on how respondents' entry was effected or how and
when dispossession started. Admittedly, no express contract existed between the
parties. This failure of petitioners to allege the key jurisdictional facts constitutive of
unlawful detainer is fatal.[26] Since the complaint did not satisfy the jurisdictional
requirement of a valid cause for unlawful detainer, the municipal trial court had no
jurisdiction over the case.[27] It is in this light that this Court finds that the Court of
Appeals correctly found that the municipal trial court had no jurisdiction over the
complaint.

WHEREFORE, the petition is DENIED and the judgment of the Court of Appeals
dismissing the complaint in Civil Case No. 2547 of the MTC Antipolo, Rizal for lack of
jurisdiction is hereby AFFIRMED.

No pronouncement as to costs.

SO ORDERED.
 FIRST DIVISION
[ G.R. NO. 152978, March 04, 2005 ]
ANICIA U. TECSON, CLEMENT MARSIANEL TECSON AND VIRGINIA GRECIL
TECSON, PETITIONERS, VS. DANTE GUTIERREZ, RESPONDENT.

DECISION
QUISUMBING, J.:
The Decision[1] dated January 31, 2002 of the Court of Appeals in CA-G.R. SP No.
60627 set aside that of the Regional Trial Court, Branch 83, Malolos, Bulacan, in Civil
Case Nos. 47-M-99 and 48-M-99, and dismissed the complaints in Civil Case Nos. 2287
and 2288 before the Municipal Trial Court of San Miguel, Bulacan.

The factual milieu of the present case is as follows:

On August 21, 1997, petitioners filed a complaint for unlawful detainer against
respondent before the Municipal Trial Court (MTC) docketed as Civil Case No. 2287.
[2]
They alleged that they were the owners of a residential lot covered by Transfer
Certificate of Title (TCT) No. T-62466, which they leased to respondent for and in
consideration of four cavans of palay yearly under an oral lease agreement. The lot
was to be used by the respondent as the site of his dwelling. They declared that
starting the year 1995, respondent failed to pay the yearly rental. Thus, they considered
the lease terminated and made oral and written demands on him to vacate the
property. Respondent, however, stubbornly refused to leave.

On the same day, petitioners also filed a complaint for forcible entry against respondent
before the MTC docketed as Civil Case No. 2288. [3] They charged him of occupying,
since January 1997, a portion of their residential lot under TCT No. T-62465, without
their consent. This lot is adjacent to the subject lot of Civil Case No. 2287.

In his answer, respondent averred that he was a farmer beneficiary of a homelot

composed of the subject parcels of land. He alleged that the petitioners unlawfully
reclassified the lot from agricultural to residential, subdivided it, and evicted the tenants.
Respondent also stated that the same lots were the subject of DARAB Case No. R-03-
028101-98.

On August 21, 1998, the MTC decided Civil Case No. 2288 in favor of petitioners. It
ruled that respondent cannot claim entitlement to acquire the subject lot as his homelot
for the following reasons: (1) respondent was not a tenant-farmer of the petitioners; (2)
the land was residential and not agricultural, and the respondent was using it for
purposes other than agricultural; (3) the subject lot was far from respondents farm; and
(4) no certification was issued by the Department of Agrarian Reform that the land was
respondents homelot.[4] The MTC ordered respondent to vacate the premises and to
pay petitioners a monthly rental of P800 beginning January 1997 until he vacates the
premises.[5]

On August 24, 1998, the MTC likewise decided Civil Case No. 2287 in favor of
petitioners based on the same reasons. The MTC ordered the respondent to vacate the
parcel of land and to pay petitioners four cavans of palay or its equivalent per annum
beginning 1995 and every year thereafter until he vacates the subject land. [6]

Respondent appealed the decisions to the Regional Trial Court (RTC). He maintained
that it is the Department of Agrarian Reform Adjudication Board (DARAB), not the MTC,
which has jurisdiction over the actions. The RTC, however, affirmed in toto the MTC
decisions.[7]

Undaunted, respondent elevated the cases to the Court of Appeals in a consolidated

petition for review.[8] The latter reversed the rulings of the RTC and dismissed the
complaints in Civil Case Nos. 2287 and 2288 for lack of jurisdiction. [9] The Court of
Appeals ruled that the case involved agrarian reform matters which should be resolved
by the DARAB and not by the MTC. The Court of Appeals also declared that the
application of agrarian reform laws does not depend on the existence of a tenancy
 relationship between the contending parties and that an agrarian reform beneficiary is
entitled to a homelot even when the property where the homelot is located belongs to a
person other than his landlord.

Petitioners filed a motion for reconsideration of the Court of Appeals decision, but it was
denied.[10] Hence, this appeal by certiorari alleging that the Court of Appeals erred when:
I. . . .IT ORDERED THE SETTING ASIDE OF THE DECISIONS OF THE
REGIONAL TRIAL COURT, MALOLOS, BULACAN AND THE DISMISSAL OF CIVIL
CASE NO. 2287 AND CIVIL CASE NO. 2288 OF THE MUNICIPAL TRIAL COURT,
SAN MIGUEL, BULACAN;

II. . . . IT RULED THAT IT IS THE DEPARTMENT OF AGRARIAN REFORM

ADJUDICATION BOARD THAT HAS THE JURISDICTION OVER THE CASE.[11]
Simply put, for resolution now are the issues of jurisdiction and of rightful possession.
As they are interrelated, we will discuss them together.

Petitioners point out that a homelot is a parcel of agricultural land used by the agrarian
reform beneficiary as the site of his permanent dwelling. Since the lots in question were
residential, petitioners assert that they could not be the subject of land distribution under
CARP, the comprehensive agrarian reform program.

Petitioners aver that respondent was not their tenant but another landowners, hence
they had no tenancy relationship with respondent. They claim that respondent was
occupying their land as a mere civil lessee.

As there was no tenurial relationship between them and that the land involved was
residential, petitioners contend that the case does not involve an agrarian dispute and
that jurisdiction was properly with the MTC. Moreover, petitioners maintain that
jurisdiction is determined by the allegations in the complaint and not by the defense
raised in respondents answer.

For his part, respondent maintains that only the DARAB has jurisdiction to determine
whether he is entitled to the homelot or not.

At the outset, we must point out that this appeal stemmed from ejectment suits
wherein the jurisdiction of the court is determined by the allegations in the
complaint[12] and the character of the relief sought. [13] In their complaint for unlawful
detainer, petitioners alleged that the respondent unlawfully withheld possession of the
land despite several demands on him to vacate the premises, and that these demands
were made after the latter failed to pay the rent. Likewise, in their complaint for forcible
entry, petitioners averred that respondent deprived them of physical possession of the
land by means of stealth and strategy. Based on the averments in the complaint, the
Municipal Trial Court indeed properly acquired jurisdiction over the cases below
between herein petitioners and the respondent.

Although respondent impugned the validity of petitioners title over the property and
claimed it to be his homelot, this assertion could not divest the MTC of jurisdiction over
the ejectment cases.[14] The court could not be divested of jurisdiction over the ejectment
cases on the mere allegation that the defendant asserts ownership over the litigated
property.[15] Moreover, a pending action involving ownership of the same property does
not bar the filing or consideration of an ejectment suit, nor suspend the proceedings.
[16]
The ejectment cases can proceed independently of the DARAB case. The
underlying reason for this rule is to prevent the defendant from trifling with the summary
nature of an ejectment suit by the simple expedient of asserting ownership over the
disputed property.[17]

It is settled that the only issue for resolution in ejectment suits is the physical or material
possession of the property involved, independent of any claim of ownership by any of
the party litigants.[18] In forcible entry and unlawful detainer cases, even if the defendant
raises the question of ownership in his pleadings and the question of possession cannot
be resolved without deciding the issue of ownership, the MTC, nonetheless, has the
undoubted competence to provisionally resolve the issue of ownership for the sole
purpose of determining the issue of possession. [19]

Going to the issue of rightful possession now, n our view, petitioners are entitled to
possess the parcels of land. For respondent failed to show that the land had been
awarded to him by the Department of Agrarian Reform as his homelot. There is ,
instead, preponderance of evidence shown before the trial court in favor of petitioners
claim. They were able to show Transfer Certificate of Titles in their names, whereas the
respondent had none but bare assertions.

We must stress, however, that before us is only the initial determination of ownership
over the lot in dispute, for the purpose of settling the issue of possession, although the
issue of ownership is inseparably linked thereto. [20] As such, the lower courts
adjudication of ownership in the ejectment case is merely provisional, and our
affirmance of the trial courts decisions as well, would not bar or prejudice an action
between the same parties involving title to the property,[21] if and when such action is
brought seasonably before the proper forum.

WHEREFORE, the petition is hereby GRANTED. The Decision dated January 31, 2002
and the Resolution dated April 16, 2002 of the Court of Appeals in CA-G.R. SP NO.
60627 are REVERSED and SET ASIDE. The decisions of the Municipal Trial Court
which have been sustained by the Decisions dated January 31, 2000 of the Regional
Trial Court, Branch 83, Malolos, Bulacan in Civil Case Nos. 47-M-99 and 48-M-99
are REINSTATED and AFFIRMED. No pronouncement as to costs.

SO ORDERED.
 SECOND DIVISION

[ G.R. No. 154152, August 25, 2010 ]

LA CAMPANA DEVELOPMENT CORPORATION, PETITIONER, VS. ARTURO

LEDESMA, HON. JUDGE ESTRELLA T. ESTRADA, IN HER CAPACITY AS
PRESIDING JUDGE, REGIONAL TRIAL COURT, BRANCH 83, QUEZON CITY, AND
THE HON. COURT OF APPEALS, RESPONDENTS.

DECISION

PERALTA, J.:

This resolves the Petition for Certiorari under Rule 65 of the Rules of Court, praying that
the Resolution[1] of the Court of Appeals (CA), dated February 13, 2002, ordering the
issuance of a writ of preliminary injunction, and its Resolution [2] dated June 28, 2002
denying petitioner's motion for reconsideration, be declared null and void ab initio.

The antecedent facts are as follows.

Petitioner filed an ejectment case with the Metropolitan Trial Court (MeTC) against
private respondent Ledesma, alleging that despite expiration of the contract of lease
executed between them and demands to vacate subject premises and pay rentals
therefor, the latter failed to comply with such demands. Private respondent countered in
his Answer that he had paid the rentals over subject premises and petitioner no longer
had the right to possess the property as it had been foreclosed by the Development
Bank of the Philippines (DBP). Private respondent further pointed out that subject
premises had in fact been in the possession of the DBP since March or April of 1997, so
since that time, it was with the DBP that he made arrangements for his continued
occupation of the subject premises.

The MeTC then rendered judgment in favor of petitioner, ordering private respondent to
surrender possession of subject premises to petitioner. Private respondent appealed to
the Regional Trial Court (RTC), and to stay execution of said judgment, private
respondent filed a supersedeas bond with the MeTC.

The RTC affirmed the MeTC judgment. Petitioner then moved for the immediate
execution of the RTC Decision, which motion was granted by the RTC. Meanwhile,
private respondent elevated the case to the CA via a petition for review on certiorari with
prayer for the issuance of a temporary restraining order or writ of preliminary injunction.
A temporary restraining order was issued by the CA, effectively staying implementation
of the writ of execution issued by the RTC. Eventually, the CA also issued a writ of
preliminary injunction per Resolution dated February 13, 2002. In justification of the
issuance of said writ, the CA stated in said Resolution that:

Based on the evidence before Us, We are convinced that the execution of the assailed
decision of the RTC at this stage will probably cause injustice to the petitioner [herein
private respondent]. We cannot ignore Our ruling in CA-GR CV No. 34856 which had
already attained finality. The facts on hand show that the DBP is the present owner of
the leased premises. The only person who can lawfully eject an unwelcome tenant from
the leased premises is the owner thereof or persons deriving rights from said owner, of
which private respondent [herein petitioner], in its Opposition to the present motion,
does not pretend to be. Contrary to the stand of the respondent, the petitioner is not
estopped from questioning the title of respondent over the leased premises as the rule
on estoppel against tenants is subject to a qualification. It does not apply if the
landlord's title has expired, or has been conveyed to another, or has been defeated by a
title paramount, subsequent to the commencement of lessor-lessee relationship. In
other words, if there was a change in the nature of the title of the landlord during the
subsistence of the lease, then the presumption does not apply.

Petitioner's motion for reconsideration of said Resolution was denied on June 28, 2002.

Thus, petitioner filed the present petition for certiorari seeking the annulment of the
aforementioned CA Resolutions.

The issues boil down to whether the CA committed grave abuse of discretion amounting
to lack or excess of jurisdiction when it ordered the issuance of a writ of preliminary
injunction to stay the immediate execution of the RTC judgment and whether
mandamus lies to compel respondent RTC Judge to issue a writ of execution.

The Court finds the petition unmeritorious.

For the Court to issue a writ of certiorari against the CA, it is incumbent upon petitioner
to show that said lower court committed grave abuse of discretion. In Quasha Ancheta
Pea & Nolasco Law Office v. Special Sixth Division, Court of Appeals,[3] the Court
stated that:

Grave abuse of discretion means a capricious and whimsical exercise of judgment as is

equivalent to lack of jurisdiction. Mere abuse of discretion is not enough; it must be
so grave as when the power is exercised in an arbitrary or despotic manner by reason
of passion or personal hostility, and must be so patent and so gross as to amount to an
evasion of a positive duty or to a virtual refusal to perform the duty enjoined or to act at
all in contemplation or law.[4]

A showing of such grave abuse of discretion is sorely wanting in this case.

It is true that Section 21, Rule 70 of the Rules of Court provides that "[t]he judgment of
the Regional Trial Court against the defendant shall be immediately executory, without
prejudice to a further appeal that may be taken therefrom." However, the Court ruled
in Benedicto v. Court of Appeals [5] that "on appeal the appellate court may stay the said
writ should circumstances so require. x x x even if RTC judgments in unlawful detainer
cases are immediately executory, preliminary injunction may still be granted."
Citing Amagan v. Marayag[6] and Vda. de Legaspi v. Avendao,[7] the Court explained
in Benedicto that:

Where the action, therefore, is one of illegal detainer, as distinguished from one of
forcible entry, and the right of the plaintiff to recover the premises is seriously placed in
issue in a proper judicial proceeding, it is more equitable and just and less productive of
confusion and disturbance of physical possession, with all its concomitant
inconvenience and expenses. For the Court in which the issue of legal possession,
whether involving ownership or not, is brought to restrain, should a petition for
preliminary injunction be filed with it, the effects of any order or decision in the unlawful
detainer case in order to await the final judgment in the more substantive case involving
legal possession or ownership. x x x[8]

Moreover, the Court also stressed in City of Naga v. Asuncion[9] that:

As a rule, the issuance of a preliminary injunction rests entirely within the discretion of
the court taking cognizance of the case and will not be interfered with, except in cases
of manifest abuse. x x x

x x x x

x x x Be it noted that for a writ of preliminary injunction to be issued, the Rules of Court
do not require that the act complained of be in clear violation of the rights of the
applicant. Indeed, what the Rules require is that the act complained of be probably in
violation of the rights of the applicant. Under the Rules, probability is enough basis for
injunction to issue as a provisional remedy. x x x[10]

In the afore-quoted case, the Court reiterated that when exigencies in the case warrant
it, the appellate court may stay the writ of execution issued by the RTC in an action for
ejectment if there are circumstances necessitating such action. An example of such
exceptional circumstance can be seen in Laurel v. Abalos.[11] Therein, a defendant was
ordered by the trial court to vacate the premises of the disputed property and return
possession thereof to the plaintiffs, but while the ejectment case was on appeal, a
judgment was promulgated in a separate case where the sale of the property to said
plaintiffs was declared null and void, making the plaintiffs' right to possess the disputed
property inconclusive. The Court ruled in said case that:

Where supervening events (occurring subsequent to the judgment) bring about a

material change in the situation of the parties which makes the execution inequitable,
or where there is no compelling urgency for the execution because it is not
justified by the prevailing circumstances, the court may stay immediate execution
of the judgment.[12]
Based on the foregoing earlier ruling in Laurel,[13] the Court also considered it just and
equitable to stay the execution of the RTC judgment in an ejectment case against the
City of Naga, stating that:

Needless to reiterate, grave and irreparable injury will be inflicted on the City of Naga by
the immediate execution of the June 20, 2005 RTC Decision. x x x the people of Naga
would be deprived of access to basic social services. It should not be forgotten that the
land subject of the ejectment case houses government offices which perform important
functions vital to the orderly operation of the local government. x x x [14]

In the present case, there also exists a material change in the situation of the parties.
The CA properly took into serious consideration the fact that in its Decision in CA-G.R.
CV No. 34856 entitled La Campana Food Products, Inc. v. Development Bank of the
Philippines, which has become final and executory, it ordered herein petitioner,
formerly known as La Campana Food Products, Inc., to surrender possession of
subject properties to the Development Bank of the Philippines. Evidently, a serious
cloud of doubt has been cast on petitioner's right of possession, making it questionable
whether the RTC Decision, ordering private respondent to surrender possession of
subject premises to petitioner, should be immediately implemented. Therefore, the CA
did not gravely abuse its discretion in this case; rather, it acted prudently when it stayed
execution of the RTC Decision until such time that a final resolution of the main case is
reached.

Petitioner's contention, that it was improper for the CA to have granted private
respondent's motion to consider thesupersedeas bond it posted with the Metropolitan
Trial Court as sufficient to cover the bond required for the issuance of the writ of
preliminary injunction, is likewise incorrect. Petitioner argues that, "said supersedeas
bond is posted solely and primarily to answer for a specific purpose which is for the
payment of unpaid rentals accruing up to the final judgment. This cannot be held
answerable for damages to petitioner should it later be found out that the private
respondent is not entitled to the issuance [of a writ of preliminary injunction]." [15]

Note that Section 4(b), Rule 58 of the Rules of Court provides that:
(b) Unless exempted by the court, the applicant files with the court where the action or
proceeding is pending, a bond executed to the party or person enjoined, in an amount
to be fixed by the court, to the effect that the applicant will pay to such party or person
all damages which he may sustain by reason of the injunction or temporary restraining
order if the court should finally decide that the applicant was not entitled thereto. Upon
approval of the requisite bond, a writ of preliminary injunction shall be issued;

However, in Hualam Construction and Dev't. Corp. v. Court of Appeals,[16] the Court
expounded on what damages may be recovered in actions for forcible entry or unlawful
detainer, to wit:

As to damages, We have on several occasions ruled that since the only issue raised in
forcible entry or unlawful detainer cases is that of rightful physical possession, the
"damages" recoverable in these cases are those which the plaintiff could have
sustained as a mere possessor, i.e., those caused by the loss of the use and occupation
of the property, and not the damages which he may have suffered but which have no
direct relation to his loss of material possession. x x x Simply put, "damages" in the
context of Section 8 of Rule 70 [now Section 19, Rule 70 of the Rules of Court] is limited
to "rent" or "fair rental value" for the use and occupation of the property.[17]

Since the only damages that petitioner may be entitled to in an action for unlawful
detainer are those arising from its loss of the use or occupation of subject premises, the
only damages petitioner can claim by reason of the stay of execution of the RTC
judgment is also only for the "rent" or "fair rental value" for the property in question.
Therefore, the CA did not err in considering the supersedeas bond filed with the MTC,
which answers for unpaid rentals, as sufficient bond for the issuance of a writ of
preliminary injunction.

In light of the foregoing, it is quite clear that there is no reason to compel the RTC to
immediately implement the writ of execution in this case.

WHEREFORE, the petition is DISMISSED for lack of merit. The Resolutions of the
Court of Appeals, dated February 13, 2002 and June 28, 2002, respectively, in CA-G.R.
SP No. 66668, are AFFIRMED.

SO ORDERED.
 SECOND DIVISION

[ G.R. No. 181851, March 09, 2010 ]

CAPT. WILFREDO G. ROQUERO, PETITIONER, VS. THE CHANCELLOR OF UP-

MANILA; THE ADMINISTRATIVE DISCIPLINARY TRIBUNAL (ADT) OF UP-MANILA;
ATTY. ZALDY B. DOCENA; EDEN PERDIDO; ISABELLA LARA, IN THEIR
CAPACITIES AS CHAIRMAN AND MEMBERS OF THE ADT; AND IMELDA O.
ABUTAL, RESPONDENTS.

DECISION

PEREZ, J.:

This is a petition for review on certiorari under Rule 45 seeking to set aside the
Decision[1] dated 22 March 2007, and the Resolution [2] dated 1 February 2008, of the
Court of the Appeals in CA-G.R. SP No. 87776 entitled, "Capt. Wilfredo G. Roquero v.
The Chancellor of the University of the Philippine-Manila (UP Manila), et al.," a petition
forCertiorari under Rule 65 of the Rules of Civil Procedure with Prayer for the Issuance
of a Temporary Restraining Order (TRO), which sought to reverse and set aside the
Orders dated 8 June 2004[3] and 9 November 2004[4] of the Administrative Disciplinary
Tribunal (ADT) of UP-Manila, chaired by Atty. Zaldy B. Docena with Eden Perdido and
Isabella Lara as members.
The undisputed facts of the case as found by the Court of Appeals are as follows:

Petitioner Wildredo G. Roquero is an employee of UP-Manila assigned at the Philippine

General Hospital (PGH) Security Division as Special Police Captain. Private respondent
Imelda O. Abutal is a Lady Guard of Ex-Bataan Security Agency who was applying for a
position in the security force assigned at UP-PGH.

The instant controversy arose from a complaint by private respondent Abutal with then
Chancellor of UP-Manila Perla D. Santos-Ocampo for Grave Misconduct against
petitioner Capt. Roquero. The formal charge filed on 1 October 1998 and docketed
as ADM Case No. UPM-AC 97-007 reads as follows:

After preliminary investigation duly conducted in accordance with the Rules and
Regulations on the Discipline of UP Faculty and Employees, a prima facie case has
been found to exist against you for GRAVE MISCONDUCT punishable under the
University Rules and Regulations on the Discipline of UP Faculty and Employees in
relation to the Civil Service Law, committed as follows:

That you, Capt. Wilfredo Roquero of the UP Manila Police Force, sometime in April
1996, while conducting an interview on MS. IMELDA ABUTAL who was then applying
for the position of Lady Guard of Ex-Bataan Security Agency to be assigned at UP-
PGH, proposed to her that if she agreed to be your mistress, you would facilitate her
application and give her a permanent position; that despite the fact the MS. ABUTAL
rejected your proposal, you still insisted on demanding said sexual favor from her; that
you, therefore, are liable for GRAVE MISCONDUCT under Section 22, paragraph (c) of
Rule XIV of the Omnibus Rules Implementing Book V of E.O. 292 on Civil Rules.

x x x x.

On 1 October 1998, the petitioner was placed under preventive suspension for ninety
(90) days by Chancellor Santos-Ocampo, the material portion of said Order reads:

Considering the gravity of the offense charged and pursuant to Section 19 of Rules and
Regulations on the Discipline of UP Faculty Members and Employees and Section 26
and 27 Rule XIV of Book V of Executive Order No. 292 and Omnibus Rules, you are
hereby preventively suspended for ninety (90) days effective upon receipt hereof.
While on preventive suspension, you are hereby required to appear before the
Administrative Disciplinary Tribunal (ADT) whenever your presence is necessary.

Thereafter, the Administrative Disciplinary Tribunal (ADT) composed of Atty. Zaldy B.

Docena, Eden Perdido and Isabella Lara, was organized to hear the instant case. Atty.
Paul A. Flor, as University Prosecutor, represented the prosecution. He was later on
replaced by Atty. Asteria Felicen. Petitioner was represented by Atty. Leo G. Lee of the
Public Attorneys Office (PAO) who was then replaced by Public Attorney Philger
Inovejas.

The Prosecution presented its only witness, private respondent Abutal. After the
completion of the cross-examination on the prosecution's only witness, the prosecution
agreed to submit its Formal Offer of Evidence on or before 16 July 1999.

x x x x

The prosecution, however, failed to submit its formal offer of evidence within the period
agreed upon.

Thereafter, on 10 August 1999, when the case was called, only petitioner and his
counsel appeared. Atty. Flor merely called by telephone and requested Atty. Docena to
reset the case to another date. Atty. Docena then ordered the resetting of the hearing on
the following dates: 11 August and 21 August 1999. On 11 August 1999, only petitioner
and his counsel came. No representative from the prosecution appeared before the
ADT. Atty. Flor again called and asked for the postponement of the hearing. By reason
thereof, Atty. Docena issued an Order, which reads as follows:

The continuation of the hearing of this case is hereby set to September 29, 1999 at 2:00
p.m., with the understanding that if and when the parties fail to appear at said hearing
date, this case shall be deemed submitted for resolution based on the evidences
already obtaining in the record of the case.

SO ORDERED.

11 August 1999.
On said date, the representative from the prosecution again failed to appear.

On 22 October 1999, petitioner filed a Motion through counsel praying that

complainant (private respondent herein) be declared to have waived her rights to
formally offer her exhibits since complainant was not able to file her Formal Offer
within the given period of fifteen (15) days from 1 July 1999 or up to 16 July 1999.

The ADT was not able to act on the said Motion for almost five (5) years. Due to the
unreasonable delay, petitioner, on 19 May 2004 filed another Motion asking for the
dismissal of the administrative case against him. The Motion to Dismiss was anchored
on the following reasons: that the prosecution had not formally offered its evidence; that
the ADT had failed to act on the motion filed on 22 October 1999; that the unfounded
charges in the administrative complaint were filed just to harass him; and that he is
entitled to a just and speedy disposition of the case.

On 26 May 2004, the prosecution, represented by Atty. Felicen in view of the resignation
of Atty. Flor in August 1999, filed its Comment/Opposition to the Motion to Dismiss. The
prosecution alleged that a Formal Offer of Documentary Exhibits had been filed on
24 January 2004, of which a copy thereof was received by Atty. Lee, petitioner's
counsel, on 30 January 2004, per registry return receipt. However, petitioner has not
filed his comment to the said Formal Offer.

Furthermore, the prosecution explained in its Comment/Opposition that in view of the

resignation of Atty. Flor in August 1999 but who had been on leave by mid-July 1999,
the Formal Offer could not be prepared by another counsel until all the transcript of
stenographic notes have been furnished to the counsel that replaced Atty. Flor.
Meanwhile, the stenographer, Jamie Limbaga, had been in and out of the hospital due
to a serious illness, thus the delay in the filing of the prosecutor's Formal Offer of
Documentary Exhibits.

On 8 June 2004, Atty. Docena issued the assailed Order denying petitioner's motion to
dismiss, to wit:

Acting on respondent's Motion to Dismiss, as well as the University Prosecutor's

Comment and/or Opposition to said Motion, and finding that said Motion to Dismiss to
be bereft of merit, the same is hereby DENIED.
In view of the failure of the respondent to file his comment on the Prosecution's Formal
Offer of Evidence, the Exhibit's ("A" to "G-1") of the Prosecution are hereby ADMITTED
for the purpose for which the same have been offered.

The respondent is hereby directed to present his evidence on June 22, 2004 at 10:30 in
the morning.

SO ORDERED.

A motion for reconsideration was filed by petitioner but the same was denied in an
Order dated 9 November 2004.[5]

Petitioner Captain Wilfredo Roquero then filed with the Court of Appeals a Petition
for Certiorari under Rule 65, docketed as CA-G.R. SP No. 87776, alleging therein that
the ADT committed grave abuse of discretion when it denied the motion to dismiss the
administrative case filed against him.

In a Decision dated 22 March 2007, the Honorable Court of Appeals denied the petition
with prayer for TRO of Roquero reasoning that the ADT did not commit grave abuse of
discretion in issuing the assailed orders.

The Court of Appeals ruled, thus:

The main issue to be resolved is whether the ADT gravely abused its discretion
amounting to lack or excess of jurisdiction when it issued the Order denying petitioner's
motion to dismiss the administrative case filed against him.

We rule in the negative.

Petitioner argues that the administrative case against him should be dismissed because
of the failure of the prosecution to file its Formal Offer of Evidence within the agreed
period.

We do not agree.
The appropriate rule in this case is Section 27 of the Uniform Rules on Administrative
Cases in the Civil Service, which provides, to wit:

When the presentation of evidence has been concluded, the parties shall formally offer
their evidence either orally or in writing and thereafter objections thereto may also be
made either orally or in writing. After which, both parties may be given time to submit
their respective memorandum which in no case shall [be] beyond five (5) days after the
termination of the investigation. Failure to submit the same within the given period shall
be considered a waiver thereof.

The failure to file a formal offer of evidence amounts to no more than a waiver of the
right to file the same. In administrative cases, particularly, where the Uniform Rules on
Administrative Cases in the Civil Service applies, the absence of a formal offer of
evidence does not bar the adverse party from presenting its evidence.

Section 3 of the Uniform Rules on Administrative Cases in the Civil Service provides:

Administrative investigations shall be conducted without necessarily adhering strictly to

the technical rules of procedure and evidence applicable to judicial proceedings.

While under the Rules of Court, a formal offer may be indispensable because the rules
on evidence so require it, the same is not true in administrative cases. There is no
provision in the Uniform Rules on Administrative Cases in the Civil Service akin to
Section 34, Rule 132 of the Rules of Court.

Furthermore, Section 27 of the Uniform Rules states that the failure to file a formal offer
of evidence amounts to a mere waiver thereof, and not a dismissal of the action. As
such, petitioner cannot claim a vested right to a dismissal of his case below just
because a formal offer was not filed within the agreed period.

In addition thereto, the Uniform Rules give the hearing officer a leeway when it provided
that x x x the hearing officer shall accept all evidence deemed material and relevant to
the case. In case of doubt, he shall allow the admission of evidence subject to the
objection interposed against its admission.
In the case at bar, records show that in fact, a formal offer of evidence was filed by the
prosecution, a copy of which was received by petitioner's counsel. The action of the
ADT in admitting the prosecution's exhibits was consistent with the above-mentioned
Rules. Thus, the tribunal acted within the bounds of its authority.

Grave abuse of discretion implies such capricious and whimsical exercise of judgment
as is equivalent to lack of jurisdiction, or in other words, where the power is exercised in
an arbitrary or despotic manner by reason of passion, prejudice, or personal hostility,
and it must be so patent and gross as to amount to an evasion of a positive duty or to a
virtual refusal to perform the duty enjoined or to act at all in contemplation of law.

To reiterate, the admission of the exhibits for the prosecution is in accordance with
Section 3, 27, and 28 of the Uniform Rules on Administrative Cases in the Civil Service.
In admitting the exhibits for the prosecution, petitioner was not denied the opportunity to
present his evidence. In fact, he could have presented his evidence as early as 11
August 1999 but he did not do so.

WHEREFORE, for utter lack of merit, the instant petition with prayer for temporary
restraining order is hereby DENIED.[6]

Roquero moved for reconsideration of the Decision, but the same was likewise denied
by the Court of Appeals in its Resolution promulgated on 1 February 2008.

Roquero is now before us seeking the reversal of the decision and resolution of the
Court of Appeals.

The core issue of this case is whether the failure of the ADT to resolve Roquero's
Motion (to declare complainant Imelda Abutal to have waived her right to submit her
Formal Offer of Exhibit) which he seasonably filed on 22 October 1999 and the assailed
Order of the ADT dated 8 June 2004 admitting the Formal Offer of Exhibit of
complainant Imelda Abutal despite having filed after almost five years violated the
constitutional right of Roquero to a speedy disposition of cases.

We find merit in the petition.

The Court of Appeals faulted petitioner for his failure to present his own evidence which
"he could have done as early as 11 August 1999." [7] It must be noted, however, that
petitioner's 22 October 1999 motion to declare complainant to have waived her right to
submit her Formal Offer of Exhibit remained unresolved. This is reason enough for
Roquero to defer presentation of his own evidence.

Indeed, while Section 27 of the Uniform Rules on Administrative Cases in Civil Service
states that the failure to submit the formal offer of evidence within the given
period shall be considered as waiver thereof, the ADT in fact allowed the
prosecution to present its formal offer almost five (5) years later or on 24 January 2004.
Starting on that date, petitioner was presented with the choice to either present his
evidence or to, as he did, file a motion to dismiss owing to the extraordinary length of
time that ADT failed to rule on his motion.

We cannot accept the finding of the Court of Appeals that there was no grave abuse of
discretion on the part of the ADT because "a formal offer of evidence was filed by
the prosecution, a copy of which was received by petitioners' counsel." [8] The
admission by ADT on 8 June 2004 of the formal offer of exhibits belatedly filed did not
cure the 5-year delay in the resolution of petitioner's 1999 motion to deem as waived
such formal offer of evidence. Indeed, the delay of almost five (5) years cannot be
justified.

The prosecution tried to explain in its Comment/Opposition dated 26 May 2004, that the
resignation of Atty. Paul Flor in August 1999, who had by then already been on leave
since mid-July 1999, contributed to the delay of the filing of the formal offer and that the
formal offer could not be prepared by another counsel until all the transcripts of
stenographic notes had been given to him. Also, it was pointed out that the
stenographer, Jaime Limbaga, had been in and out of the hospital due to a serious
illness.[9]

The ADT admitted this explanation of the prosecutor hook, line and sinker without
asking why it took him almost five (5) years to make that explanation. If the excuses
were true, the prosecution could have easily manifested with the ADT of its predicament
right after Roquero filed his motion to declare the waiver of the formal offer. It is evident
too that the prosecution failed to explain why it took them so long a time to find a
replacement for the original prosecutor. And, the stenographer who had been in and out
of the hospital due to serious illness should have been replaced sooner.

While it is true that administrative investigations should not be bound by strict

adherence to the technical rules of procedure and evidence applicable to judicial
proceedings,[10] the same however should not violate the constitutional right of
respondents to a speedy disposition of cases.

Section 16, Article III of the 1987 Constitution provides:

Section 16. All person shall have the right to a speedy disposition of their cases before
all judicial, quasi-judicial, or administrative bodies.

The constitutional right to a "speedy disposition of cases" is not limited to the accused in
criminal proceedings but extends to all parties in all cases, including civil and
administrative cases, and in all proceedings, including judicial and quasi-judicial
hearings. Hence, under the Constitution, any party to a case may demand expeditious
action by all officials who are tasked with the administration of justice. [11]

The right to a speedy disposition of a case, like the right to a speedy trial, is deemed
violated only when the proceedings are attended by vexatious, capricious, and
oppressive delays; or when unjustified postponements of the trial are asked for and
secured; or even without cause or justifiable motive, a long period of time is
allowed to elapse without the party having his case tried. Equally applicable is the
balancing test used to determine whether a defendant has been denied his right to a
speedy trial, or a speedy disposition of a case for that matter, in which the conduct of
both the prosecution and the defendant is weighed, and such factors as the length of
the delay, the reasons for such delay, the assertion or failure to assert such right by the
accused, and the prejudice caused by the delay. The concept of a speedy disposition is
a relative term and must necessarily be a flexible concept. [12]

Hence, the doctrinal rule is that in the determination of whether that right has been
violated, the factors that may be considered and balanced are as follows: (1) the length
of delay; (2) the reasons for the delay; (3) the assertion or failure to assert such right by
the accused; and (4) the prejudice caused by the delay.[13]

Applying the doctrinal ruling vis-a-vis the factual milieu of this case, the violation of the
right to a speedy disposition of the case against petitioner is clear for the following
reasons: (1) the delay of almost five (5) years on the part of ADT in resolving the motion
of petitioner, which resolution petitioner reasonably found necessary before he could
present his defense; (2) the unreasonableness of the delay; and (3) the timely
assertions by petitioner of the right to an early disposition which he did through a motion
to dismiss. Over and above this, the delay was prejudicial to petitioner's cause as he
was under preventive suspension for ninety (90) days, and during the interregnum of
almost five years, the trial of the accusation against him remained stagnant at the
prosecution stage.

The Constitutional guarantee against unreasonable delay in the disposition of cases

was intended to stem the tide of disenchantment among the people in the administration
of justice by our judicial and quasi-judicial tribunals. [14]The adjudication of cases must
not only be done in an orderly manner that is in accord with the established rules of
procedure but must also be promptly decided to better serve the ends of justice.
Excessive delay in the disposition of cases renders the rights of the people guaranteed
by the Constitution and by various legislations inutile. [15]

WHEREFORE, the Petition is hereby GRANTED. The assailed Decision dated 22

March 2007 and Resolution dated 1 February 2008 of the Court of Appeals in CA-G.R.
SP No. 87776 are hereby REVERSED and SET ASIDE.The Administrative Disciplinary
Tribunal (ADT) of the University of the Philippines-Manila, Atty. Zaldy B. Docena, Eden
Perdido and Isabella Lara, in their capacities as Chairman and Members of the ADT
respectively, are herebyORDERED to DISMISS the administrative case against Capt.
Wilfredo G. Roquero for violation of his constitutional right to a speedy disposition of
cases.

SO ORDERED.
 SECOND DIVISION
[ G.R. NO. 142882, May 02, 2006 ]
SPS. RICARDO AND LYDIA LLOBRERA, SPS. BENJAMIN AND ESTHER
LLOBRERA, SPS. MIKE AND RESIDA MALA, SPS. OTOR AND DOLINANG
BAGONTE, SPS. EDUARDO AND DAMIANA ICO, SPS. ANTONIO AND MERLY
SOLOMON, SPS. ANSELMO AND VICKY SOLOMON, SPS. ALEX AND CARMELITA
CALLEJO, SPS. DEMETRIO AND JOSEFINA FERRER, SPS. BENJAMIN AND ANITA
MISLANG, SPS. DOMINGO AND FELICIDAD SANCHEZ, SPS. FERNANDO AND
CARMELITA QUEBRAL, SPS. BERNARDO AND PRISCILLA MOLINA, PRISCILLA
BAGA AND BELEN SEMBRANO, PETITIONERS, VS. JOSEFINA V. FERNANDEZ,
RESPONDENT.

DECISION
GARCIA, J.:
Under consideration is this petition for review on certiorari under Rule 45 of the Rules of
Court to nullify and set aside the following issuances of the Court of Appeals (CA)
in CA-G.R. SP No. 48918, to wit:
1. Decision dated June 30, 1999,[1] affirming the Decision dated August 7, 1998 of
the Regional Trial Court (RTC) of Dagupan City, Branch 41, in Civil Case No. 98-
02353-D which affirmed an earlier decision of the Municipal Trial Court in Cities
 (MTCC), Dagupan City, Branch 2, in Civil Case No. 10848, entitled "Josefina F. De
Venecia Fernandez vs. Sps. Mariano and Lourdes Melecio, et al.," an action for
ejectment.

2. Resolution dated March 27, 2000,[2] denying petitioners' motion for

reconsideration.
Subject of the controversy is a 1,849 square-meter parcel of land, covered by Transfer
Certificate of Title No. 9042. Respondent Josefina V. Fernandez, as one of the
registered co-owners of the land, served a written demand letter upon petitioners
Spouses Llobrera, et al., to vacate the premises within fifteen (15) days from notice.
Receipt of the demand letter notwithstanding, petitioners refused to vacate,
necessitating the filing by the respondent of a formal complaint against them before the
Barangay Captain of Barangay 11, Dagupan City. Upon failure of the parties to reach
any settlement, the Barangay Captain issued the necessary certification to file action.

Respondent then filed a verified Complaint for ejectment and damages against the
petitioners before the MTCC of Dagupan City, which complaint was raffled to Branch 2
thereof.

By way of defense, petitioners alleged in their Answer that they had been occupying the
property in question beginning the year 1945 onwards, when their predecessors-in-
interest, with the permission of Gualberto de Venecia, one of the other co-owners of
said land, developed and occupied the same on condition that they will pay their
monthly rental of P20.00 each. From then on, they have continuously paid their monthly
rentals to Gualberto de Venecia or Rosita de Venecia or their representatives, such
payments being duly acknowledged by receipts. Beginning sometime June 1996,
however, the representative of Gualberto de Venecia refused to accept their rentals,
prompting them to consign the same to Banco San Juan, which bank deposit they
continued to maintain and update with their monthly rental payments.

In a decision dated February 18, 1998, the MTCC rendered judgment for the
respondent as plaintiff, thus:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the
plaintiff and against the defendants as follows:
1. Ordering each of the defendants to vacate the portion of the land in question they
respectively occupy and to restore the possession thereof to the plaintiff and her co-
owners;

2. Ordering each of the defendants to pay to the plaintiff the amount of P300.00 per
month from January 17, 1997 until they vacate the land in question as the
reasonable compensation for the use and occupation of the premises;

3. Ordering the defendants to pay proportionately the amount of P10,000.00 as

attorney's fee and P2,000.00 as litigation expenses, and to pay the cost of suit.
SO ORDERED.
On petitioners' appeal to the RTC of Dagupan City, Branch 41 thereof, in its decision of
August 7, 1998, affirmed the foregoing judgment.

Therefrom, petitioners went to the CA whereat their recourse was docketed as CA-G.R.
SP. No. 48918. As stated at the threshold hereof, the CA, in its Decision of June 30,
1999, affirmed that of the RTC. With the CA's denial of their motion for reconsideration,
in its Resolution of March 27, 2000, petitioners are now before this Court with the
following assignment of errors:
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN:
A. HOLDING THAT THE OCCUPATION AND POSSESSION OF THE PROPERTY
IN QUESTION IS BY MERE TOLERANCE OF THE RESPONDENT.

B. HOLDING THAT THE FAILURE OF THE PETITIONERS (DEFENDANTS) TO

VACATE THE PREMISES AFTER DEMANDS WERE MADE UPON THEM IS A
VALID GROUND FOR THEIR EJECTMENT.

C. HOLDING THAT THE CONSIGNATION MADE BY PETITIONERS IN

CONTEMPLATION OF ARTICLE 1256 OF THE NEW CIVIL CODE IS NOT
LEGALLY TENABLE.

D. AFFIRMING THE DECISION OF THE REGIONAL TRIAL COURT DATED

AUGUST 7, 1998 WHICH, LIKEWISE AFFIRMED THE DECISION OF THE MTCC
DECISION DATED FEBRUARY 18, 1998 INSOFAR AS THE ORDER FOR THE
PETITIONERS (DEFENDANTS) TO PAY RENTAL AND ATTORNEY'S FEES AND
LITIGATION EXPENSES.
At the heart of the controversy is the issue of whether petitioners' possession of the
subject property is founded on contract or not. This factual issue was resolved by the
three (3) courts below in favor of respondent. As tersely put by the CA in its assailed
decision of June 30, 1999:
Petitioners failed to present any written memorandum of the alleged lease
arrangements between them and Gualberto De Venecia. The receipts claimed to have
been issued by the owner were not presented on the excuse that the March 19, 1996
fire burned the same. Simply put, there is a dearth of evidence to substantiate the
averred lessor-lessee relationship. x x x.[3]
Consistent with this Court's long-standing policy, when the three courts below have
consistently and unanimously ruled on a factual issue, such ruling is deemed final and
conclusive upon this Court, especially in the absence of any cogent reason to depart
therefrom.

From the absence of proof of any contractual basis for petitioners' possession of the
subject premises, the only legal implication is that their possession thereof is by mere
tolerance. In Roxas vs. Court of Appeals,[4] we ruled:
A person who occupies the land of another at the latter's tolerance or permission,
without any contract between them, is necessarily bound by an implied promise that he
will vacate upon demand, failing which, a summary action for ejectment is the proper
remedy against him.
The judgment favoring the ejectment of petitioners being consistent with law and
jurisprudence can only be affirmed. The alleged consignation of the P20.00 monthly
rental to a bank account in respondent's name cannot save the day for the petitioners
simply because of the absence of any contractual basis for their claim to rightful
possession of the subject property. Consignation based on Article 1256 of the Civil
Code indispensably requires a creditor-debtor relationship between the parties, in the
absence of which, the legal effects thereof cannot be availed of.

Article 1256 pertinently provides:

Art. 1256. If the creditor to whom tender of payment has been made refuses without just
cause to accept it, the debtor shall be released from responsibility by the consignation
of the thing or sum due.
Unless there is an unjust refusal by a creditor to accept payment from a debtor, Article
1256 cannot apply. In the present case, the possession of the property by the
petitioners being by mere tolerance as they failed to establish through competent
evidence the existence of any contractual relations between them and the respondent,
the latter has no obligation to receive any payment from them. Since respondent is not a
creditor to petitioners as far as the alleged P20.00 monthly rental payment is concerned,
respondent cannot be compelled to receive such payment even through consignation
under Article 1256. The bank deposit made by the petitioners intended as consignation
has no legal effect insofar as the respondent is concerned.

Finally, as regards the damages awarded by the MTCC in favor of the respondent, as
affirmed by both the RTC and the CA, petitioners failed to present any convincing
argument for the Court to modify the same. The facts of the case duly warrant payment
by the petitioners to respondent of actual and compensatory damages for depriving the
latter of the beneficial use and possession of the property. Also, the unjustified refusal to
surrender possession of the property by the petitioners who were fully aware that they
cannot present any competent evidence before the court to prove their claim to rightful
possession as against the true owners is a valid legal basis to award attorney's fees as
damages, as well as litigation expenses and cost of suit.

Rule 70 of the Rules of Court relevantly reads:

Sec. 17. Judgment. - If after trial the court finds that the allegations of the complaint are
true, it shall render judgment in favor of the plaintiff for the restitution of the premises,
the sum justly due as arrears of rent or as reasonable compensation for the use and
occupation of the premises, attorney's fees and costs. If it finds that said allegations
are not true, it shall render judgment for the defendant to recover his costs. If a
counterclaim is established, the court shall render judgment for the sum found in arrears
from either party and award costs as justice requires. (Emphasis supplied).
There is no doubt whatsoever that it is within the MTCC's competence and jurisdiction
to award attorney's fees and costs in an ejectment case. After thoroughly considering
petitioners' arguments in this respect, the Court cannot find any strong and compelling
reason to disturb the unanimous ruling of the three (3) courts below on the matter of
damages.

WHEREFORE, the petition is hereby DENIED for lack of merit, with costs against
petitioners.

SO ORDERED.
 SECOND DIVISION

[ G.R. NO. 154282, April 07, 2006 ]

VANGIE BARRAZONA, PETITIONER, VS. REGIONAL TRIAL COURT, BRANCH 61,

BAGUIO CITY AND SAN-AN REALTY AND DEVELOPMENT CORPORATION,
HEREIN REPRESENTED BY RODRIGO CHUA TIU, RESPONDENTS.

DECISION

SANDOVAL-GUTIERREZ, J.:

For our resolution is the instant Petition for Certiorari under Rule 65 of the 1997 Rules of
Civil Procedure, as amended, assailing the Order dated June 19, 2002 of the Regional
Trial Court (RTC), Branch 61, Baguio City, denying petitioner's Motion to Dismiss Civil
Case No. 5238-R, entitled "SAN-AN REALTY and DEVELOPMENT CORPORATION,
herein represented by RODRIGO CHUA TIU, plaintiff, v. VANGIE BARRAZONA,
defendant."

San-an Realty and Development Corporation, respondent, owns a building located at

Naguilian corner Asin Road, Baguio City. Vangie Barrazona, petitioner, has been leasing
portions of the building identified as Units 203 A and B at the second floor. The period of
the lease is for two (2) years, commencing July 15, 2001 and ending June 30, 2003.
The monthly rental is P400.00 per square meter for Unit 203 A and P500.00 per square
meter for Unit 203 B.

Starting August 2001, petitioner defaulted in the payment of the monthly rentals and
failed to pay despite demands by respondent. Thus, on May 14, 2002, respondent filed
with the RTC, Branch 61, Baguio City, a Complaint for Collection of Sum of Money with
Damages, docketed as Civil Case No. 5238-R.

On June 3, 2002, petitioner filed with the RTC a Motion to Dismiss on the ground,
among others, that the RTC has no jurisdiction over the complaint considering that the
allegations therein clearly indicate that the action is one for ejectment (illegal detainer)
which is under the exclusive jurisdiction of the Municipal Trial Court (MTC). Petitioner
pointed out the following allegations in paragraphs 4 and 5 of the complaint showing
that it is not for sum of money but for ejectment:

4. That the defendant has failed to pay the rentals for the said leased premises for the
month of August 2001 up to the present;

5. That the plaintiff has demanded the defendant to pay her overdue account, now
amounting to P971,838.15, the last demand to vacate and payment of arrears having
been made in writing on March 27, 2002 xxx.

In an Order dated June 19, 2002, the RTC denied the Motion to Dismiss for lack of
merit.

Forthwith, petitioner filed the instant Petition for Certiorari alleging that: (1) the RTC
committed grave abuse of discretion amounting to lack or excess of jurisdiction in
denying her Motion to Dismiss; and (2) the Resolution denying her Motion to Dismiss is
unconstitutional as it does not state its legal basis.

On the other hand, respondent, in praying for the dismissal of the petition, contends that
(1) the complaint is for the collection of unpaid rentals as there is absolutely no
allegation that its intent is to eject petitioner from the premises; (2) petitioner should
have first filed a motion for reconsideration before resorting to the extraordinary suit of
certiorari; and (3) the assailed order denying petitioner's motion to dismiss is
interlocutory and, therefore, cannot be the subject of a petition for certiorari.

We hold that in denying petitioner's motion to dismiss the complaint, the RTC acted with
grave abuse of discretion.

Petitioner's motion to dismiss the complaint for lack of jurisdiction is pursuant to Section
1, Rule 16 of the 1997 Rules of Civil Procedure, as amended, which provides:

Sec. 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:

x x x x x x x x x

b.) That the court has no jurisdiction over the subject matter of the claim.

As mentioned earlier, petitioner stated in her motion that respondent's allegations in its
complaint show that it is one for ejectment cognizable, not by the RTC but, by the MTC
of Baguio City.

In Herrera, et al. v. Bollos, et al.,[1] we emphasized the basic rule that jurisdiction of the
court over the subject matter of the action is determined by the allegations of the
complaint at the time of its filing, irrespective of whether or not the plaintiff is entitled to
recover upon all or some of the claims asserted therein. What determines the
jurisdiction of the court is the nature of the action pleaded as appearing from the
allegations in the complaint. The averments therein and the character of the relief
sought are the ones to be consulted.
It bears reiterating paragraph 5 of the complaint, thus:

5. That the plaintiff has demanded the defendant to pay her overdue account, now
amounting to P971,838.15, the last demand to vacate and payment of arrears having
been made in writing on March 27, 2002 xxx.

This allegation clearly shows that respondent made several demands upon petitioner to
pay her overdue rentals and to vacate the premises; and that the last demand to pay
and vacate in writing was on March 27, 2002. Respondent thus complied with Section 2,
Rule 70 of the 1997 Rules of Civil Procedure, as amended, which provides:

Sec. 2. Lessor to proceed against lessee only after demand. - Unless otherwise
stipulated, such action by the lessor shall be commenced only after demand to pay or
comply with the conditions of the lease and to vacate is made upon the lessee, or by
serving written notice of such demand upon the person found on the premises, or by
posting such notice on the premises if no person be found thereon, and the lessee fails
to comply therewith after fifteen (15) days in the case of land or five (5) days in the case
of buildings. (2a)

Indeed, while the complaint is captioned "Collection of Sum of Money with Damages,"
the allegations therein show that respondent's action is for ejectment. All ejectment
cases are within the jurisdiction of the MTC. [2]

Next, petitioner maintains that the Order of the RTC denying her Motion to Dismiss
violates the Constitution as it does not state the facts and the law on which it is based.
The challenged Order is reproduced as follows:

ORDER
This Court finds that the grounds stated in the Motion to Dismiss to be without merit,
hence, the same is denied.

SO ORDERED.

We have admonished the trial courts not to issue a minute order or resolution like the
one specified above. A trial court should state in its order the reasons for the dismissal
of the complaint so that when the order is appealed, the appellate court can readily
determine from a casual perusal thereof whether there is a prima facie justification for
the dismissal.[3]

Under Section 3, Rule 16 of the 1997 Rules of Civil Procedure, as amended, we require
that resolutions disposing of a motion to dismiss shall state clearly and distinctly the
reasons therefor, thus:

Sec. 3. Resolution of motion. - After the hearing, the court may dismiss the action or
claim, deny the motion, or order the amendment of the pleading.

The court shall not defer the resolution of the motion for the reason that the ground
relied upon is not indubitable.

In every case, the resolution shall state clearly and distinctly the reasons therefor.

This requirement proscribes the common practice of perfunctorily dismissing a motion to

dismiss for "lack of merit." Such cavalier dispositions can often pose difficulty and
misunderstanding on the part of the aggrieved party in taking recourse therefrom and
likewise on the higher court called upon to resolve the same, usually on certiorari. [4]

While an order denying a motion to dismiss is interlocutory and non-appeallable,

however, if the denial is without or in excess of jurisdiction, certiorari and prohibition are
proper remedies from such order of denial. [5] In Time, Inc. v. Reyes,[6] this Court,
speaking through Justice J.B. L. Reyes, held: The motion to dismiss was predicated on
the respondent court's lack of jurisdiction to entertain the action; and the rulings of this
Court are that writs of certiorari or prohibition, or both, may issue in case of a denial or
deferment of an action or on the basis of a motion to dismiss for lack of jurisdiction.
[7]
Verily, the writ of certiorari is granted to keep an inferior court within the bounds of its
jurisdiction or to prevent it from committing such a grave abuse of discretion amounting
to lack or excess of jurisdiction. [8]

Lastly, we cannot go along with respondent's contention that petitioner should have first
filed a motion for reconsideration before resorting to the remedy of certiorari. While the
rule is that before certiorari may be availed of, petitioner must first file a motion for
reconsideration with the lower court of the act or order complained of, [9]however, such
rule is not without exception. We have, in several instances, dispensed with the filing of
a motion for reconsideration of a lower court's ruling, such as: where the proceedings in
which the error occurred is a patent nullity; [10] where the question is purely of law; when
public interest is involved; where judicial intervention is urgent or its application may
cause great and irreparable damage; [11] and where the court a quo has no jurisdiction,
[12]
as in this case.

WHEREFORE, the petition is GRANTED. The Order dated June 19, 2002 issued by the
RTC, Branch 61, Baguio City, in Civil Case No. 5238-R, is ANNULLED and SET
ASIDE.

SO ORDERED.

THIRD DIVISION

[ G.R. No. 136274, September 03, 2003 ]

SUNFLOWER NEIGHBORHOOD ASSOCIATION, REPRESENTED BY FLORO

ARAGAN, PETITIONERS, VS. COURT OF APPEALS, HON. ACTING PRESIDING
JUDGE LORIFEL LACAP PHIMNA, METC, BRANCH 77, PARAAQUE CITY AND
ELISA MAGLAQUI-CAPARAS, RESPONDENTS.

DECISION

CORONA, J.:

This is a petition for review of the July 16, 1998 decision of the Court of Appeals [1] in CA-
G.R. SP No. 46861 (a) declaring null and void the injunction orders respectively issued
by Judge Amelita Tolentino[2] in Civil Case No. 96-0253, for Expropriation, and Judge
Rolando G. How in Civil Case No. 96-0480, for Prohibition with Preliminary Injunction;
and (b) ordering the Metropolitan Trial Court (MeTC) of Paraaque City, Branch 78, to
enforce its July 8, 1996 Writ of Demolition. The dispositive portion read:

WHEREFORE, foregoing considered, the injunction orders subject of the instant petition
are hereby DECLARED NULL AND VOID. Corollary thereto, the Court of origin,
Metropolitan Trial Court, Branch 78, Paraaque, is hereby directed to ENFORCE its
Writ of Demolition dated July 8, 1996. [3]

The antecedent facts follow.

Private respondent Elisa Maglaqui-Caparas, in her capacity as executrix of the testate

estate of Macaria Maglaqui, filed on March 16, 1993 a complaint for unlawful detainer
(Civil Case No. 8550) against Alfredo Mogar and 46 other persons [4] who were
occupying several parcels of land (Lots 1-A, B, C, E, F and G) in Yellow Ville, United
Paraaque Subdivision IV, Metro Manila. These parcels of land are covered by
individual transfer certificates of title [5] registered in the name of Macaria Maglaqui,
private respondent's mother.

The MeTC of Paraaque City, Branch 78, eventually decided in favor of private
respondent. On appeal, the decision of the MeTC was affirmed by the Regional Trial
Court (RTC) of Makati City, Branch 66. Mogar et al. elevated the case to the Court of
Appeals but their petition was dismissed by the appellate court on December 12, 1994.
After the dismissal became final, a writ of demolition was issued by the MeTC of
Paraaque City, Branch 78. The writ, however, was not immediately implemented
because the case was transferred to Branch 77 of the same court. On February 6,
1997, Mogar et al. filed a petition with the RTC of Paraaque City, Branch 257, presided
over by Judge Rolando G. How, to enjoin the implementation of the writ of demolition.
However, this petition was denied and subsequently, an alias writ of demolition was
issued by Judge Vivencio G. Lirio of MeTC Branch 77, the court of origin.

The alias writ of demolition was, again, not executed, this time due to the ex
parte issuance of a writ of preliminary injunction by Judge Amelita Tolentino, in
connection with the expropriation case (Civil Case No. 96-0253) filed by the Municipality
of Paraaque against the Testate Estate of Macaria Maglaqui.

Meanwhile, another group of persons occupying portions of the parcels of land (Lots I-F
and I-G) subject of the unlawful detainer case, organized themselves into the Sunflower
Neighborhood Association (Sunflower), the petitioner herein. On November 18, 1996,
Sunflower, represented by one Floro Aragan, filed a complaint for prohibition/injunction
with preliminary injunction against private respondent also with the RTC of Paraaque
City, Branch 257. Sunflower argued that its members should be excluded from the
demolition order as they were not parties to the original unlawful detainer case. To
include their houses in the demolition would be to deprive them of due process. This
time, Judge How granted the injunction and ordered the exclusion of the houses
belonging to petitioner from demolition.

Thus, private respondent filed a petition for certiorari, prohibition and mandamus with
the Court of Appeals (CA GR SP No. 46861) assailing both the injunction orders issued
by Judge Tolentino in the expropriation case and by Judge How in the prohibition case.

The Court of Appeals ruled in favor of private respondent holding that, as the judgment
in the unlawful detainer case had already become final, the execution could not be
enjoined. Consequently, the MeTC of Paraaque City, Branch 77 issued another alias
writ of demolition on September 14, 1998.

In order to stay the execution of the writ of demolition, Sunflower filed on January 7,
1999 an urgent motion in this Court for the issuance of a status quo order. This we
granted in a resolution dated January 20, 1999. Prior to the issuance of our resolution,
however, the writ of demolition was implemented on January 14, 1999. Petitioner thus
filed a motion to allow its members to return to the premises, which we granted in
another resolution dated April 28, 1999. Thereafter, we required both parties to submit
their memoranda.
Sometime in November 1998, the group of Mogar et al. filed in this Court a petition for
review of the decision of the Court of Appeals in CA GR SP No. 46861. However, we
dismissed the same on January 18, 1999 for failure of said petitioners to comply with
certain procedural requirements, including their failure to submit a certification of non-
forum shopping.[6]

For its part, petitioner Sunflower likewise assailed the same decision of the Court of
Appeals in this petition for review on certiorari under Rule 45 of the Revised Rules of
Court.

Before we proceed, it should be pointed out that any issue relating to the expropriation
case (Civil Case No. 96-0253) filed by the Municipality of Paraaque has been rendered
moot by the dismissal of that case. This Court, in a Resolution dated January 29, 2003,
[7]
ordered the presiding judge of the RTC of Paraaque City, Branch 274 to report on
the status of the expropriation case filed by the Municipality of Paraaque against
herein private respondent. The presiding judge reported that the case was already
dismissed on June 1, 1999 in an order issued by then Presiding Judge Amelita Tolentino
who granted the motion to dismiss filed by herein private respondent. Said dismissal
was not challenged by the Municipality of Paraaque. [8]

The basic issue before us is whether petitioner's members, who were not parties to the
unlawful detainer case, may be ejected from the land subject of this case.

We rule in the affirmative. It is well-settled that, although an ejectment suit is an

action in personam wherein the judgment is binding only upon the parties properly
impleaded and given an opportunity to be heard, the judgment becomes binding on
anyone who has not been impleaded if he or she is: (a) a trespasser, squatter or agent
of the defendant fraudulently occupying the property to frustrate the judgment; (b) a
guest or occupant of the premises with the permission of the defendant; (c) a transferee
pendente lite; (d) a sublessee; (e) a co-lessee or (f) a member of the family, relative or
privy of the defendant.[9]

In the case at bar, the records show that petitioner's members are trespassers or
squatters who do not have any right to occupy the property of respondent. Petitioner
does not dispute the ownership of the parcels of land in question. In fact, it even
admitted that the subject property is owned by Macaria Maglaqui, mother of private
respondent.[10] Petitioner failed to establish any right which would entitle its members to
occupy the land in any capacity, whether as lessees, tenants and the like. Petitioner's
only defense against the eviction and demolition orders is their supposed non-inclusion
in the original detainer case. This defense, however, has no legal support since its
members are trespassers or squatters who are bound by the judgment.

Petitioner's argument that the parcels of land occupied by its members (Lots I-F and I-
G) were not included in the original ejectment complaint has no basis. The complaint
private respondent filed with the MeTC of Paraaque City, Branch 78, clearly included
Lots I-F and I-G as part of the subject matter under litigation in the unlawful detainer
case.[11] Thus, petitioner's members, together with all the parties in the unlawful detainer
case, must vacate the disputed land.

The Court commiserates with respondent, already in her twilight years, who has been
unlawfully deprived of her land for a good number of years. Thus, we exhort the court
of origin to execute this decision with reasonable dispatch, consistent with the
requirements of Section 28 of RA 7279 and EO 152, [12] on eviction and demolition.

WHEREFORE, the petition is hereby DENIED and the decision of the Court of Appeals
in CA-GR SP No. 46861 isAFFIRMED.

SO ORDERED.
[12]
Executive Order No. 152 entitled DESIGNATING THE PRESIDENTIAL
COMMISSION FOR THE URBAN POOR AS THE SOLE CLEARING HOUSE FOR THE
CONDUCT OF DEMOLITION AND EVICTION ACTIVITIES INVOLVING THE
HOMELESS AND UNDERPRIVILEGED CITIZENS AND ESTABLISHING FOR THE
PURPOSE A MECHANISM TO ENSURE STRICT COMPLIANCE WITH THE
REQUIREMENTS OF JUST AND HUMANE DEMOLITION AND EVICTION UNDER
THE URBAN DEVELOPMENT AND HOUSING ACT OF 1992, AND FOR OTHER
PURPOSES, signed December 10, 2002.

SECOND DIVISION

[ G.R. No. 180542, April 12, 2010 ]

HUBERT NUEZ, PETITIONER, VS. SLTEAS PHOENIX SOLUTIONS, INC.,
THROUGH ITS REPRESENTATIVE, CESAR SYLIANTENG RESPONDENT,

DECISION

PEREZ, J.:

The determination of the jurisdiction of first level courts over ejectment cases is at the
heart of this Petition for Review on Certiorari filed pursuant to Rule 45 of the 1997 Rules
of Civil Procedure, which seeks the nullification and setting aside of the 31 July 2007
Decision rendered by the Special Twelfth Division of the Court of Appeals in CA-G.R.
SP No. 91771. [1]

The Facts

The subject matter of the instant suit is a 635.50 square meter parcel of land situated
at Calle Solana, Intramuros, Manila and registered in the name of respondent SLTEAS
Phoenix Solutions, Inc. under Transfer Certificate of Title (TCT) No. 87556 of the Manila
City Registry of Deeds. Despite having acquired the same thru the 4 June 1999 Deed of
Assignment executed in its favor by the Spouses Ong Tiko and Emerenciana
Sylianteng,[2] it appears that respondent was constrained to leave the subject parcel idle
and unguarded for some time due to important business concerns. In October 2003, an
ocular inspection conducted by respondent's representatives revealed that the property
was already occupied by petitioner Hubert Nuez and 21 other individuals. [3] Initially
faulting one Vivencia Fidel with unjustified refusal to heed its verbal demands to vacate
the subject parcel, respondent filed its 5 December 2003 complaint for forcible entry
which was docketed as Civil Case No. 177060 before Branch 4 of the Metropolitan Trial
Court (MeTC) of Manila.[4]

Additionally impleading petitioner and the rest of the occupants of the property,
respondent filed its 9 January 2004 amended complaint, alleging, among other matters,
that thru its representatives and predecessors-in-interest, it had continuously possessed
the subject realty, over which it exercised all attributes of ownership, including payment
of real property taxes and other sundry expenses; that without the benefit of any lease
agreement or possessory right, however, petitioners and his co-defendants have
succeeded in occupying the property by means of strategy and stealth; and, that
according to reliable sources, the latter had been in occupancy of the same parcel since
1999. Together with the ejectment of the occupants of the subject premises, respondent
prayed for the grant of its claims for reasonable rentals, attorney's fees, litigation
expenses and the costs.[5]

Specifically denying the material allegations of the foregoing amended complaint in his
14 February 2004 Answer, petitioner averred that the property occupied by him is
owned by one Maria Ysabel Potenciano Padilla Sylianteng, with whom he had
concluded a subsisting lease agreement over the same, and that, in addition to
respondent's lack of cause of action against him, the MeTC had no jurisdiction over the
case for lack of prior demand to vacate and referral of the controversy to
the barangay authorities for a possible amicable settlement. [6] Likewise questioning the
MeTC's jurisdiction over the case, the rest of the defendants filed a Motion to
Dismiss[7] which they adopted as their answer subsequent to its 27 February 2004
denial upon the finding that a sufficient cause of action can be gleaned from the
allegations of the complaint.[8]

After an ocular inspection conducted on 9 June 2004, it appears that the MeTC
concluded that the crowding of the residential units on the subject parcel rendered the
determination of its exact metes and bounds impossible. [9]Unable to present his lessor's
title, petitioner also appears to have agreed to the use of TCT No. 87556 as basis for
determining the exact measurement of respondent's property. [10] With the parties' further
failure to abide by their agreement to cause a survey of the property thru an impartial
surveyor from the Office of the City Assessor or City Engineer, the record shows that
respondent submitted a survey plan prepared by Geodetic Engineer Joseph Padilla who
determined that petitioner was, indeed, occupying a portion of the subject parcel.
[11]
Relying on said report, the MeTC went on to render a Decision dated 23 November
2004,[12] resolving the complaint in the following wise:

Wherefore, premises considered, judgment is hereby rendered in favor of the plaintiff

and against all the defendants and ordering the latter to:

1. vacate the subject premises located at Lot 11, Block 45, Solana St., Intramuros,
Manila;

2. for each [defendant], to pay Php5,000.00 a month counted from October 2003 until
defendants vacate the subject property;
3. to pay Php15,000.00 as and for attorney's fees; and

4. to pay the costs of suit.[13]

On appeal, the foregoing decision was affirmed in toto in the 14 July 2005 Order issued
by the Regional Trial Court (RTC) of Manila in Civil Case No. 05-112490. [14] Dissatisfied
with said Order, petitioner elevated the case to the Court of Appeals by way of a petition
for review filed pursuant to Section 1, Rule 42 of the 1997 Rules of Civil Procedure.
[15]
Finding that the allegations in respondent's amended complaint sufficiently made out
a cause of action for forcible entry against petitioner, the Court of Appeals rendered the
herein assailed decision, dismissing said petition for review upon the following findings
and conclusions:

Parenthetically, although the dispossession took place more than one year from the
illegal entry of petitioner and his co-defendants, knowledge of the same was only
acquired by petitioner in 2003 when the ocular inspection was made. While ordinarily,
the one-year prescriptive period should be reckoned from the date of the actual entry on
the land, the same however, does not hold true when entry was made through stealth,
in which case, the one year period is counted from the time the plaintiff learned thereof.

Neither may petitioner seek refuge in the alleged demand letter dated 31 July 1996 sent
by respondent's counsel which sought his ouster from the subject premises. Not only
was the existence of this letter immaterial to the issue of illegal entry into the subject
premises but the same cannot bind respondent who has no participation therein.
Moreover, it also bears stressing that not once did petitioner refute the lack of
knowledge on the part of respondent of the alleged lease contract and their usurpation
of the disputed property. Verily, granting that a lease contract truly existed, respondent's
lack of knowledge of the lease contract and the failure to register the same in the
Register of Deeds cannot bind third parties like respondent and therefore, withhold
respondent's right to institute the action for ejectment.

As to the identity of the premises occupied by petitioner Nuez, We find that the RTC
committed no reversible error in admitting the evidence of respondent which consists of
the plan prepared by Geodetic Engineer Padilla. Suffice it to state that petitioner, during
the proceedings below, agreed to secure an impartial survey from the Assessor's Office
or the Office of the City Engineer. However, when he took no action after failing to
obtain the survey from said offices, his consequent failure to secure, on his own, the
services of an impartial surveyor to determine and rebut respondent's allegation, he did
so on his own accord and had no other person but himself to blame. [16]

The Issues

Upon receipt of the Court of Appeals' 4 November 2007 Resolution denying his motion
for reconsideration of the aforequoted decision, [17] petitioner filed the petition at bench
on the following grounds:

THE COURTS HAVE NO JURISDICTION TO TRY THE INSTANT CASE

CONSIDERING THAT THE ELEMENTS OF FORCIBLE ENTRY ARE NOT PRESENT
AND ADDITIONALLY THERE IS A QUESTION OF OWNERSHIP.

II

THE PETITIONER SHOULD NOT VACATE THE LEASED PREMISES CONSIDERING

THAT THERE IS AN EXISTING LEASE CONTRACT WITH THE OWNER WHICH IS IN
VIOLATION OF THE PROVISION OF ARTICLE 1671 OF THE NEW CIVIL CODE. [18]

The Court's Ruling

We find the petition bereft of merit.

Designed to provide an expeditious means of protecting actual possession or the right

to possession of the property involved, [19] there can be no gainsaying the fact that
ejectment cases fall within the original and exclusive jurisdiction of first level courts [20] by
express provision of Section 33 of Batas Pambansa Blg. 129, in relation to Sec. 1,
Rule 70 of the 1997 Rules of Civil Procedure. [21] In addition to being conferred by law,
[22]
however, a court's jurisdiction over the subject matter is determined by the
allegations of the complaint[23] and the character of the relief sought, [24] irrespective of
whether or not the plaintiff is entitled to recover all or some of the claims asserted
therein.[25] In much the same way that it cannot be made to depend on the exclusive
characterization of the case by one of the parties, [26] jurisdiction cannot be made to
depend upon the defenses set up in the answer, in a motion to dismiss or in a motion for
reconsideration.[27]

The rule is no different in actions for forcible entry where the following requisites are
essential for the MeTC's acquisition of jurisdiction over the case, viz.: (a) the plaintiffs
must allege their prior physical possession of the property; (b) they must assert that
they were deprived of possession either by force, intimidation, threat, strategy or stealth;
and, (c) the action must be filed within one (1) year from the time the owners or legal
possessors learned of their deprivation of the physical possession of the property. [28] As
it is not essential that the complaint should expressly employ the language of the law, it
is considered a sufficient compliance of the requirement where the facts are set up
showing that dispossession took place under said conditions. [29] The one-year period
within which to bring an action for forcible entry is generally counted from the date of
actual entry on the land, except that when the entry is through stealth, the one-year
period is counted from the time the plaintiff learned thereof. [30]

Even prescinding from the fact that the parties had admitted the MeTC's jurisdiction,
[31]
our perusal of the record shows that respondent's 9 January 2004 amended
complaint was able to make out a cause of action for forcible entry against petitioner. As
the registered owner of the subject parcel, respondent distinctly alleged that, by its
representatives and thru its predecessors-in-interest, it had been in possession of the
subject parcel and had exercised over the same all attributes of ownership, including
the payment of realty taxes and other expenses; that an ocular inspection conducted in
October 2003 revealed that petitioner and his co-defendants have succeeded in
occupying the property by means of stealth and strategy; and, that its subsequent
demands to vacate had been unheeded by said interlopers. [32] Considering that the test
for determining the sufficiency of the allegations in the complaint is whether, admitting
the facts alleged, the court can render a valid judgment in accordance with the prayer of
the plaintiff,[33] we find that the Court of Appeals correctly ruled that the MeTC had
jurisdiction over the case.

Then as now, petitioner argues that, aside from the admission in the complaint that the
subject parcel was left idle and unguarded, respondent's claim of prior possession is
clearly negated by the fact that he had been in occupancy thereof since 1999. While
prior physical possession is, admittedly, an indispensable requirement in forcible entry
cases, the dearth of merit in petitioner's position is, however, evident from the principle
that possession can be acquired not only by material occupation, but also by the fact
that a thing is subject to the action of one's will or by the proper acts and legal
formalities established for acquiring such right. [34] Because possession can also be
acquired by juridical acts to which the law gives the force of acts of possession, e.g.,
donations, succession, execution and registration of public instruments, inscription of
possessory information titles and the like, it has been held that one need not have
actual or physical occupation of every square inch of the property at all times to be
considered in possession.[35]

In this case, the subject parcel was acquired by respondent by virtue of the 4 June 1999
Deed of Assignment executed in its favor by the Spouses Ong Tiko and Emerenciana
Sylianteng. Although it did not immediately put the same to active use, respondent
appears to have additionally caused the property to be registered in its name as of 27
February 2002[36] and to have paid the real property taxes due thereon [37] alongside the
sundry expenses incidental thereto. Viewed in the light of the foregoing juridical acts, it
consequently did not matter that, by the time respondent conducted its ocular inspection
in October 2003, petitioner had already been occupying the land since 1999. Ordinarily
reckoned from the date of actual entry on the land, the one year period is counted from
the time the plaintiff acquired knowledge of the dispossession when, as here, the same
had been effected by means of stealth. [38]

Petitioner had, of course, endeavored to establish that respondent's predecessors-in-

interest had served him a demand to vacate the subject parcel as early as 31 July 1996.
[39]
Correctly brushed aside by the Court of Appeals on the ground, among others, that
respondent had no participation in its preparation, we find said demand letter of little or
no use to petitioner's cause in view of its non-presentation before the MeTC. However,
much as it may now be expedient for petitioner to anchor his cause thereon, said
demand letter was first introduced in the record only as an attachment to his reply to
respondent's comment to the motion for reconsideration of the 14 July 2005 order
issued by the RTC.[40] The rule is settled, however, that points of law, theories, issues
and arguments not brought to the attention of the trial court will not be and ought not to
be considered by a reviewing court, as these cannot be raised for the first time on
appeal.[41] Basic consideration of due process impels this rule. [42]

A similar dearth of merit may be said of the exceptions petitioner continues to take
against the MeTC's reliance on the survey plan prepared by Geodetic Engineer Joseph
Padilla to the effect that that the premises occupied by petitioner lies within the metes
and bounds of respondent's property. As mere allegation is not evidence, [43] the rule is
settled that plaintiff has the burden of proving the material allegations of the complaint
which are denied by the defendant, and the defendant has the burden of proving the
material allegations in his case where he sets up a new matter. [44] Given the parties'
failure to make good on their agreement to cause a survey of the property thru an
impartial surveyor from the Office of the City Assessor or City Engineer, respondent's
submission of said report was evidently for the purpose discharging the onus of proving
petitioner's encroachment on the subject parcel, as alleged in the complaint. As the
party asserting the contrary proposition, petitioner cannot expediently disparage the
admissibility and probative value of said survey plan to compensate for his failure to
prove his own assertions.

Petitioner is, finally, out on a limb in faulting the Court of Appeals with failure to apply the
first paragraph of Article 1676 of the Civil Code of the Philippines [45] in relation to the
lease he claims to have concluded with one Maria Ysabel Potenciano Padilla
Sylianteng. In the absence of proof of his lessor's title or respondent's prior knowledge
of said contract of lease, petitioner's harping over the same provision simply amounts to
an implied admission that the premises occupied by him lie within the metes and
bounds of the subject parcel. Even then, the resolution of said issue is clearly
inappropriate since ejectment cases are summary actions intended to provide an
expeditious manner for protecting possession or right to possession without involvement
of title.[46] Moreover, if a defendant's mere assertion of ownership in an ejectment case
will not oust the MeTC of its summary jurisdiction, [47] we fail to see why it should be any
different in this case where petitioner merely alleged his lessor's supposed title over the
subject parcel.

WHEREFORE, the petition is DENIED for lack of merit.

SO ORDERED.
[21]
Section 1. Who may institute proceedings, and when. - Subject to the provisions
of the next succeeding section, a person deprived of the possession of any land or
building by force, intimidation, threat, strategy or stealth, or a lessor, vendor, vendee, or
other person against whom the possession of any land or building is unlawfully withheld
after the expiration or termination of the right to hold possession, by virtue of a contract,
express or implied, or the legal representatives or assigns of any such lessor, vendor,
vendee, or other person may at anytime within one (1) year after such unlawful
deprivation or withholding of possession, bring an action in the proper Municipal Trial
Court against the person or persons unlawfully withholding or depriving of possession,
or any person or persons claiming under them, for the restitution of such possession,
together with damages and costs.
[45]
Art. 1676. The purchaser of a piece of land which is under a lease that is not
recorded in the Registry of Property may terminate the lease, save when there is a
stipulation to the contrary in the contract of sale, or when the purchaser knows of the
existence of the lease.
CONTEMPT
 THIRD DIVISION

[ G.R. NO. 158971, August 25, 2005 ]

MARIANO Y. SIY, IN HIS PERSONAL CAPACITY, AS WELL AS IN HIS CAPACITY AS

OWNER OF PHILIPPINE AGRI TRADING CENTER, PETITIONER, VS. NATIONAL
LABOR RELATIONS COMMISSION AND ELENA EMBANG, RESPONDENTS.

RESOLUTION

CORONA, J.:

For resolution is private respondent Elena Embang's motion to cite Atty. Frederico P.
Quevedo, counsel of petitioner Mariano Y. Siy, in contempt of court for delaying this
case and impeding the execution of the judgment rendered herein, in violation of Canon
12[1] and Rule 12.04[2] of the Code of Professional Responsibility.

This case originated from a complaint for illegal dismissal and non-payment of holiday
pay and holiday premium pay filed by Embang against petitioner and Philippine Agri
Trading Center. The labor arbiter ruled in favor of Embang. The dispositive portion of his
September 29, 2000 decision[3] read:

WHEREFORE, judgment is hereby rendered declaring [Embang] to be a regular

employee of the PHIL-AGRI TRADING CENTER and ordering the latter to reinstate her
to her former position and pay her backwages from the date of her dismissal on
February 18, 2000 until her reinstatement which computed as of today amounts to
P37,771.50 (P5881 x 6.5 months) plus 1/12 thereof or the amount of P3,147.62 as
corresponding 13th month pay for the period.

An additional award of 5% of the total award is also rendered since [,] compelled to
litigate [,] [Embang] had to engage the services of counsel.

All other claims are DISMISSED for lack of merit.

SO ORDERED.
On March 8, 2002, the Third Division of the National Labor Relations Commission
(NLRC) denied petitioner's appeal and affirmed the decision of the labor arbiter with
modification. Thus:

WHEREFORE, premises considered, the appeal is DENIED for lack of merit and the
Decision dated September 29, 2000 is hereby AFFIRMED with MODIFICATION in [that
Mariano Y. Siy] should be made jointly and severally liable together with Phil. Agri
Trading Center and that [Embang] is entitled only [to] the ten (10%) percent of his
awarded 13th month pay as attorney's fees.

SO ORDERED.[4]

After the NLRC refused to reconsider its March 8, 2002 resolution, petitioner elevated
the case to the Court of Appeals (CA) by way of a petition for certiorari. Finding the
petition to be without merit, the appellate court dismissed the same. [5] The motion for
reconsideration filed by petitioner was likewise denied. [6]

Undaunted, petitioner filed a petition for review on certiorari before this Court
questioning the CA's decision (dismissing his petition) and resolution (denying his
motion for reconsideration). Since we found no reversible error on the part of the
appellate court, we denied the petition in our September 22, 2003 resolution. Petitioner
sought a reconsideration of our resolution but we resolved to deny the same with
finality. Thereafter, entry of judgment was made on December 30, 2003.

In accordance with the rules of procedure of the NLRC, Embang's counsel filed a
motion for the issuance of a writ of execution dated February 16, 2004 before the labor
arbiter. Subsequently, Atty. Quevedo entered his appearance for the petitioner and filed
a comment to the motion for writ of execution. [7] He alleged that Embang rejected the
various offers of reinstatement extended to her by petitioner; hence, she should be
entitled to backwages only up to September 29, 2000, the date of the promulgation of
the labor arbiter's decision.

This was followed by a protracted exchange of pleadings and motions between the
parties.[8] Finding that his office was never informed by petitioner and Philippine Agri
Trading Center of any intention on their part to reinstate Embang to her former position,
the labor arbiter issued an order dated July 30, 2004 [9] granting the February 16, 2004
motion and directing that a writ of execution be issued.

Atty. Quevedo refused to be deterred. He filed an appeal with the NLRC on August 12,
2004. He insisted that the labor arbiter committed grave abuse of discretion in failing to
specify in his order that the backwages should be computed until September 29, 2000
only and that no backwages should accrue thereafter because of Embang's refusal to
be reinstated.

Embang's counsel moved to dismiss the appeal. He contended that the appeal was not
perfected because petitioner and Philippine Agri Trading Center did not post the
required cash or surety bond. Pending the resolution of the appeal, Embang filed the
instant motion to cite Atty. Quevedo in contempt of court.

By way of comment, Atty. Quevedo maintains that he did not delay the execution of the
decision but only sought the consideration of Embang's refusal to be reinstated in any
writ of execution that may be issued. He claims that such refusal on Embang's part
constituted a supervening event that justified the filing of an appeal - notwithstanding
the finality of the decision. He also asserts that an appeal was the proper remedy to
question the July 30, 2004 order of the labor arbiter.

Meanwhile, the Third Division of the NLRC issued a resolution [10] on February 28, 2005
resolving not to give due course to the appeal and to remand the case to the regional
arbitration branch for further proceedings. The NLRC held that the July 30, 2004 order
was not appealable. Despite the denial of the appeal, however, Atty. Quevedo filed a
motion for clarification/partial reconsideration of the NLRC's February 28, 2005
resolution.

For his obstinacy in refusing to respect a final and executory judgment, we hold Atty.
Quevedo in contempt of court.

Contempt of court is disobedience to the court by acting in opposition to its authority,

justice and dignity. It signifies not only a willful disregard or disobedience of the court's
orders but also conduct tending to bring the authority of the court and the administration
of law into disrepute or, in some manner, to impede the due administration of justice.
[11]
Under the Rules of Court, contempt is classified into either direct or indirect
contempt. Direct contempt is committed in the presence of or so near a court or judge
as to obstruct or interrupt the proceedings before the same. [12] Indirect contempt is one
not committed in the presence of a court.[13] It is an act done at a distance which tends
to belittle, degrade, obstruct or embarrass the court and justice. [14]

Atty. Quevedo should be sanctioned for indirect contempt. Indirect contempt is

committed by a person who commits the following acts, among others: disobedience or
resistance to a lawful writ, process, order or judgment of a court; [15] any abuse of or any
unlawful interference with the processes or proceedings of a court not constituting direct
contempt;[16] and any improper conduct tending, directly or indirectly, to impede, obstruct
or degrade the administration of justice. [17]

We denied with finality the petitioner's petition for review on certiorari almost two years
ago. But the decision of the labor arbiter (affirmed with modification by the NLRC and
upheld by the CA and this Court) remains unsatisfied up to now because of Atty.
Quevedo's sly maneuvers on behalf of his client.

Once a case is decided with finality, the controversy is settled and the matter is laid to
rest. The prevailing party is entitled to enjoy the fruits of his victory while the other party
is obliged to respect the court's verdict and to comply with it. We reiterate our
pronouncement in Sacdalan v. Court of Appeals:[18]

...well-settled is the principle that a decision that has acquired finality becomes
immutable and unalterable and may no longer be modified in any respect even if the
modification is meant to correct erroneous conclusions of fact or law and whether it will
be made by the court that rendered it or by the highest court of the land.

The reason for this is that litigation must end and terminate sometime and somewhere,
and it is essential to an effective and efficient administration of justice that, once a
judgment has become final, the winning party be not deprived of the fruits of the verdict.
Courts must guard against any scheme calculated to bring about that result and must
frown upon any attempt to prolong the controversies.

The only exceptions to the general rule are the correction of clerical errors, the so-
called nunc pro tunc entries which cause no prejudice to any party, void judgments, and
whenever circumstances transpire after the finality of the decision rendering its
execution unjust and inequitable.
This case does not fall under any of the recognized exceptions. Contrary to Atty.
Quevedo's contention, there existed no supervening event that would have brought the
case outside the ambit of the general rule on the immutability of final and executory
decisions.

Supervening events refer to facts which transpire after judgment becomes final and
executory or to new circumstances which develop after judgment acquires finality.
[19]
The "refusal" of Embang to be reinstated happened, assuming it really
happened, before the finality of our September 22, 2003 resolution, i.e., before the
decision of the labor arbiter as modified by the NLRC became final and executory.

In fact, the issue of the alleged offer of reinstatement and Embang's rejection of the
same was not a new one and had already been passed upon by the courts. Atty.
Quevedo himself admits that petitioner brought the issue before the CA in his June 6,
2002 petition for certiorari and December 3, 2002 memorandum. The appellate court
brushed it aside and found neither factual nor legal merit in the petition. The matter was
again raised in petitioner's June 3, 2003 motion for reconsideration which was denied
on the ground that the basic issues had already been previously considered by the
court. Embang's alleged refusal to be reinstated was also alleged in the petition for
review on certiorari filed by petitioner before this Court. We denied it for failing to show
that a reversible error had been committed by the CA.

Atty. Quevedo's client was bound by the finality of our affirmance of the modified
decision of the labor arbiter. He should not have tried, under the guise of a flimsy appeal
to the NLRC, to reopen a case already decided with finality. Nor should he have raised
anew matters previously considered and issues already laid to rest.

Atty. Quevedo's act of filing a baseless appeal with the NLRC was obviously intended to
defeat the implementation of a final and executory decision. Elementary is the rule that
an order granting a motion for a writ of execution is not appealable. [20] Thus, Atty.
Quevedo's deceptively "innocent" appeal constituted either a willful disregard or gross
ignorance of basic rules of procedure resulting in the obstruction of justice.

By his acts, Atty. Quevedo has tried to prevent Embang from enjoying the fruits of her
hard earned legal victory. In effect, he has been tying the hands of justice and
preventing it from taking its due course. His conduct has thwarted the due execution of
a final and executory decision. By appealing an order which he knew to be
unappealable, he abused court processes and hindered the dispensation of justice. His
dilatory tactics were an affront to the dignity of the Court, clearly constituting indirect
contempt.

We note that the ground cited in the motion to cite Atty. Quevedo in contempt of court
was his violation of Canon 12 and Rule 12.04 of the Code of Professional
Responsibility. While a lawyer's violation of his duties as an officer of the court may also
constitute contempt, the grounds for holding a person in contempt and for holding him
administratively liable for the violation of his lawyer's oath are distinct and separate from
each other. They are specified in Rule 71 of the Rules of Court. A finding of contempt on
the part of a lawyer does not preclude the imposition of disciplinary sanctions against
him for his contravention of the ethics of the legal profession. Thus:

x x x the power to punish for contempt and the power to disbar are separate and
distinct, and that the exercise of one does not exclude the exercise of the other. A
contempt proceeding for misbehavior in court is designed to vindicate the authority of
the court; on the other hand, the object of a disciplinary proceeding is to deal with the
fitness of the court's officer to continue in that office, to preserve and protect the court
and the public from the official ministrations of persons unfit or unworthy to hold such
office. The principal purpose of the exercise of the power to cite for contempt is to
safeguard the functions of the court [while that] of the exercise of disciplinary authority
by the Supreme Court is to assure respect for orders of such court by attorneys who, as
much as judges, are responsible for the orderly administration of justice.

Moreover, it has been held that the imposition of a fine as a penalty in a contempt
proceeding is not considered res judicata to a subsequent charge for unprofessional
conduct. In the same manner, an attorney's conviction for contempt was not collaterally
estopped by reason of a subsequent disbarment proceeding in which the court found in
his favor on essentially the same facts leading to conviction. It has likewise been the
rule that a notice to a lawyer to show cause why he should not be punished for
contempt cannot be considered as a notice to show cause why he should not be
suspended from the practice of law, considering that they have distinct objects and for
each of them a different procedure is established. Contempt of court is governed by the
procedures laid down under Rule 71 of the Rules of Court, whereas disciplinary actions
in the practice of law are governed by Rules 138 and 139 thereof.
Although apparently different in legal bases, the authority to punish for contempt and to
discipline lawyers are both inherent in the Supreme Court and are equally incidents of
the court's basic power to oversee the proper administration of justice and the orderly
discharge of judicial functions. As was succinctly expounded in Zaldivar v.
Sandiganbayan, et al.:

There are, in other words, two (2) related powers which come into play in cases like that
before us here: the Court's inherent power to discipline attorneys and the contempt
power. The disciplinary authority of the Court over members of the Bar is broader [than]
the power to punish for contempt. Contempt of court may be committed both by lawyers
and non-lawyers, both in and out of court. Frequently, where the contemnor is a lawyer,
the contumacious conduct also constitutes professional misconduct which calls into play
the disciplinary authority of the Supreme Court. Where the respondent is a lawyer,
however, the Supreme Court's disciplinary authority over lawyers may come into play
whether or not the misconduct with which the respondent is charged also constitutes
contempt of court. The power to punish for contempt of court does not exhaust the
scope of disciplinary authority of the Court over lawyers. The disciplinary authority of the
Court over members of the Bar is but corollary to the Court's exclusive power of
admission to the Bar. A lawyer is not merely a professional but also an officer of the
court and as such, he is called upon to share in the task and responsibility of dispensing
justice and resolving disputes in society. Any act on his part which visibly tends to
obstruct, pervert, or impede and degrade the administration of justice constitutes both
professional misconduct calling for the exercise of disciplinary action against him, and
contumacious conduct warranting application of the contempt power.[21]

We therefore refer the complaint against Atty. Quevedo's behavior to the Committee on
Bar Discipline of the Integrated Bar of the Philippines for an investigation of his possible
liabilities under Canon 12 and Rule 12.04 of the Code of Professional Responsibility.

WHEREFORE, Atty. Frederico P. Quevedo is hereby found GUILTY of INDIRECT

CONTEMPT for which a FINE of P30,000 is imposed upon him, payable in full within
five days from receipt of this resolution.

SO ORDERED.
[1]
Canon 12 - A lawyer shall exert every effort and consider it his duty to assist in the
speedy and efficient administration of justice.

[2]
Rule 12.04 - A lawyer shall not unduly delay a case, impede the execution of a
judgment or misuse court processes.

FIRST DIVISION

[ G.R. NO. 150274, August 06, 2006 ]

IN THE MATTER TO DECLARE IN CONTEMPT OF COURT HON. SIMEON A.

DATUMANONG IN THE LATTER'"S CAPACITY AS SECRETARY OF THE
DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS.

JIMMIE F. TEL-EQUEN, PETITIONER,

DECISION

YNARES-SANTIAGO, J.:

Petitioner Jimmie F. Tel-Equen, District Engineer of Mountain Province, DPWH

Cordillera Administrative Region, filed this present petition to cite the former Secretary
Simeon A. Datumanong of the Department of Public Works and Highways (DPWH) in
contempt of court for issuing Memorandum Order dated October 5, 2001 dismissing him
from the service.

The facts of the case are as follows:

The Ombudsman Task Force on Public Works and Highways filed with the Office of the
Ombudsman an administrative complaint for dishonesty, falsification of official
documents, grave misconduct, gross neglect of duty, violation of office rules and
regulations, and conduct prejudicial to the service against petitioner Tel-Equen and
several others, relative to the anomalous payment of P553,900.00 of the bailey bridge
components owned by the government. The case was docketed as OMB-ADM-0-91-
0430.[1]

On March 28, 1994, the Administrative Adjudication Bureau of the Office of the
Ombudsman found respondents guilty of dishonesty, falsification of public documents,
misconduct and conduct prejudicial to the best interest of the service and ordered their
dismissal from the service with accessory penalties pursuant to Section 23 of Rule XIV,
Book V of Executive Order No. 292, otherwise known as the Revised Administrative
Code of 1987.[2]

After the denial of the motions for reconsideration, three petitions were filed before this
Court which were consolidated and referred to the Court of Appeals in light of the ruling
in Fabian v. Desierto[3] where appeals from decisions of the Office of the Ombudsman in
administrative cases should be referred to the appellate court under Rule 43 of the
Rules of Court.[4]

On March 2, 2000, the Court of Appeals affirmed with modification the decision of the
Administrative Adjudication Bureau of the Office of the Ombudsman finding petitioner
and two co-accused guilty as charged and dismissed them from the service while the
other two respondents were exonerated from administrative liability for lack of evidence.
[5]

Petitioner, together with his two co-accused, appealed from the decision of the Court of
Appeals which was docketed as G.R. No. 144694. [6] Meanwhile, while appeal was still
pending, Secretary Datumanong issued the assailed Memorandum Order,[7] which
reads:

October 5, 2001

MEMORANDUM TO:

Messrs:

JIMMIE F. TEL-EQUEN
District Engineer

RUDY P. ANTONIO
Chief, Construction Section

All of Mountain Province Engineering District

This Department

This is with reference to the Order of the Ombudsman dated December 11, 1995 in
OMB ADM. 0-91-0430 entitled "OMB TASK FORCE ON DPWH versus JIMMIE F. TEL-
EQUEN, ET AL." (Annex "A"), affirming the March 28, 1994 Resolution (Annex "B") in
the same case finding you guilty of having committed acts of dishonesty, falsification of
public documents, misconduct and conduct prejudicial to the best interest of the service
and recommending that you be DISMISSED from the service together with its
accessory penalties pursuant to Sec. 23, Rule XIV, Book V of Executive Order No. 292.

The Order was affirmed by the Court of Appeals (Eight Division) in its Decision (Annex
"C") promulgated on March 02, 2000 in CA-G.R. SP No. 50324 entitled "ROMULO H.
MABUNGA, ET AL. versus THE OMBUDSMAND, ET AL."

Inasmuch as the Order dismissing you from the service is not a subject of any injunction
or restraining order from the Supreme Court, the same is immediately executory.
Wherefore, you are hereby ordered DROPPED/DISMISSED from the service effective
upon receipt hereof.

(Sgd.) SIMEON A. DATUMANONG

Secretary
Hence, the instant petition to cite Secretary Datumanong in contempt of court.

Petitioner contends that in issuing the Memorandum Order despite knowledge of the
pendency of G.R. No. 144694, Secretary Datumanong committed a contumacious act, a
gross and blatant display of abuse of discretion and an unlawful interference with the
proceedings before the Court, thereby directly or indirectly impeding, obstructing and
degrading the administration of justice, and pre-empting the Court's sole right to make a
decision in accord with the evidence and law.[8]

Petition lacks merit.

The power to declare a person in contempt of court and in dealing with him accordingly
is an inherent power lodged in courts of justice, to be used as a means to protect and
preserve the dignity of the court, the solemnity of the proceedings therein, and the
administration of justice from callous misbehavior, offensive personalities, and
contumacious refusal to comply with court orders. [9] This contempt power, however
plenary it may seem, must be exercised judiciously and sparingly with utmost self-
restraint with the end in view of utilizing the same for correction and preservation of the
dignity of the court, not for retaliation or vindication. [10] It should not be availed of unless
necessary in the interest of justice. [11]

After careful consideration of the facts and circumstances of the case, we find that the
issuance of the Memorandum Order by Secretary Datumanong was not a contumacious
conduct tending, directly or indirectly, to impede, obstruct or degrade the administration
of justice. A conduct, to be contumacious, implies willfulness, bad faith or with deliberate
intent to cause injustice, which is not so in the case at bar. If it were otherwise, petitioner
should have been dismissed immediately after the Administrative Adjudication Bureau of
the Office of the Ombudsman rendered its decision on March 28, 1994. It was only after
the Court of Appeals rendered its decision on March 2, 2000 affirming the dismissal that
Secretary Datumanong issued the memorandum and after ascertaining that no
injunction or restraining order was issued by the Court.

At most, it may be considered only an error of judgment or a result of confusion

considering the different rules regarding execution of decisions pending appeal.

Decisions of the Civil Service Commission under the Administrative Code of 1987 [12] are
immediately executory even pending appeal because the pertinent laws [13] under which
the decisions were rendered mandate them to be so. [14] Thus, "where the legislature has
seen fit to declare that the decision of the quasi-judicial agency is immediately final and
executory pending appeal, the law expressly so provides." [15] Otherwise, execution of
decisions takes place only when they become final and executory, like decisions
rendered by the Office of the Ombudsman.

Thus, in Lapid v. Court of Appeals,[16] the Court held:

Petitioner was administratively charged for misconduct under the provisions of R.A.
6770, the Ombudsman Act of 1989. Section 27 of the said Act provides as follows:

"Section 27. Effectivity and Finality of Decisions. All provisionary orders of the Office
of the Ombudsman are immediately effective and executory.
A motion for reconsideration of any order, directive or decision of the Office of the
Ombudsman must be filed within five (5) days after receipt of written notice and shall be
entertained only on the following grounds:

xxxxxxxxx

Findings of fact of the Office of the Ombudsman when supported by substantial

evidence are conclusive. Any order, directive or decision imposing the penalty of public
censure or reprimand, suspension of not more than one month's salary shall be final
and unappealable.

In all administrative disciplinary cases, orders, directives or decisions of the Office of the
Ombudsman may be appealed to the Supreme Court by filing a petition for certiorari
within ten (10) days from receipt of the written notice of the order, directive or decision
or denial of the motion for reconsideration in accordance with Rule 45 of the Rules of
Court."

The Rules of Procedure of the Office of the Ombudsman likewise contain a similar
provision. Section 7, Rule III of the said Rules provides as follows:

"Sec. 7. Finality of Decision where the respondent is absolved of the charge and in
case of conviction where the penalty imposed is public censure or reprimand,
suspension of not more than one month, or a fine not equivalent to one month salary,
the decision shall be final and unappealable. In all other cases, the decision shall
become final after the expiration of ten (10) days from receipt thereof by the respondent,
unless a motion for reconsideration or petition for certiorari, shall have been filed by him
as prescribed in Section 27 of R.A. 6770."

It is clear from the above provisions that the punishment imposed upon petitioner, i.e.
suspension without pay for one year, is not among those listed as final and
unappealable, hence, immediately executory. Section 27 states that all provisionary
orders of the Office of the Ombudsman are immediately effective and executory; and
that any order, directive or decision of the said Office imposing the penalty of censure or
reprimand or suspension of not more than one month's salary is final and unappealable.
As such the legal maxim "inclusio[n] unius est exclusio alterius" finds application. The
express mention of the things included excludes those that are not included. The clear
import of these statements taken together is that all other decisions of the Office
of the Ombudsman which impose penalties that are not enumerated in the said
Section 27 are not final, unappealable and immediately executory. An appeal
timely filed, such as the one filed in the instant case, will stay the immediate
implementation of the decision. This finds support in the Rules of Procedure issued
by the Ombudsman itself which states that "(I)n all other cases, the decision shall
become final after the expiration of ten (10) days from receipt thereof by the respondent,
unless a motion for reconsideration or petition for certiorari (should now be petition for
review under Rule 43) shall have been filed by him as prescribed in Section 27 of R.A.
6770."

x x x x

A judgment becomes "final and executory" by operation of law. Section 27 of the

Ombudsman Act provides that any order, directive or decision of the Office of the
Ombudsman imposing a penalty of public censure or reprimand, or suspension of not
more than one month's salary shall be final and unappealable. In all other cases, the
respondent therein has the right to appeal to the Court of Appeals within ten (10) days
from receipt of the written notice of the order, directive or decision. In all these other
cases therefore, the judgment imposed therein will become final after the lapse of the
reglementary period of appeal if no appeal is perfected or, an appeal therefrom having
been taken, the judgment in the appellate tribunal becomes final. It is this final judgment
which is then correctly categorized as a "final and executory judgment" in respect to
which execution shall issue as a matter of right. In other words, the fact that the
Ombudsman Act gives parties the right to appeal from its decisions should
generally carry with it the stay of these decisions pending appeal. Otherwise, the
essential nature of these judgments as being appealable would be rendered
nugatory. (Emphasis supplied)

Petitioner was charged administratively before the Office of the Ombudsman.

Accordingly, the provisions of the Ombudsman Act and its Rules of Procedure should
apply in his case. It is a principle in statutory construction that where there are two
statutes that apply to a particular case, that which was specially designed for the said
case must prevail over the other.[17]

In fine, Secretary Datumanong cannot be held in contempt of court for issuing the
Memorandum Order in the absence of malice or wrongful conduct in issuing it. The
remedy of the petitioner is not to file a petition to cite him in contempt of court but to
elevate the error to the higher court for review and correction.

However, two events supervened since the filing of this petition that would support its
dismissal. First, on March 28, 2005, the Court in G.R. No. 144694 affirmed the
decisions of the Court of Appeals and Administrative Adjudication Bureau of the Office
of the Ombudsman ordering petitioner dismissed from the service for dishonesty,
falsification of public documents, misconduct, and conduct prejudicial to the best
interest of the service. Second, Section 7, Rule III of the Rules of Procedure of the
Office of the Ombudsman was amended by Administrative Order No. 17 [18]wherein the
pertinent provision on the execution of decisions pending appeal is now essentially
similar to Section 47 of the Uniform Rules on Administrative Cases in the Civil
Service and other related laws, thus:

Rule III

PROCEDURE IN ADMINISTRATIVE CASES

Section 7. Finality and execution of decision. - Where the respondent is absolved of the
charge, and in case of conviction where the penalty imposed is public censure or
reprimand, suspension of not more than one month, or a fine equivalent to one month
salary, the decision shall be final, executory and unappealable. In all other cases, the
decision may be appealed to the Court of Appeals on a verified petition for review under
the requirements and conditions set forth in Rule 43 of the Rules of Court, within fifteen
(15) days from receipt of the written Notice of the Decision or Order denying the Motion
for Reconsideration.

An appeal shall not stop the decision from being executory. In case the penalty is
suspension or removal and the respondent wins such appeal, he shall be
considered as having been under preventive suspension and shall be paid the
salary and such other emoluments that he did not receive by reason of the
suspension or removal.

A decision of the Office of the Ombudsman in administrative cases shall be executed as

a matter of course. The Office of the Ombudsman shall ensure that the decision shall be
strictly enforced and properly implemented. The refusal or failure by any officer without
just cause to comply with an order of the Office of the Ombudsman to remove, suspend,
demote, fine, or censure shall be a ground for disciplinary action against said officer.

Well-settled is the rule that procedural laws are construed to be applicable to actions
pending and undetermined at the time of their passage, and are deemed retroactive in
that sense and to that extent. As a general rule, the retroactive application of procedural
laws cannot be considered violative of any personal rights because no vested right may
attach to nor arise therefrom.[19]

In the case at bar, the Rules of Procedure of the Office of the Ombudsman are clearly
procedural and no vested right of the petitioner is violated as he is considered
preventively suspended while his case is on appeal. Moreover, in the event he wins on
appeal, he shall be paid the salary and such other emoluments that he did not receive
by reason of the suspension or removal. Besides, there is no such thing as a vested
interest in an office, or even an absolute right to hold office. Excepting constitutional
offices which provide for special immunity as regards salary and tenure, no one can be
said to have any vested right in an office. [20]

WHEREFORE, in view of the foregoing, the petition to cite former Secretary Simeon A.
Datumanong of the Department of Public Works and Highways in contempt of court for
issuing Memorandum Order dated October 5, 2001 dismissing petitioner Jimmie F. Tel-
Equen from the service is DISMISSED for lack of merit.

SO ORDERED.
 THIRD DIVISION
[ G.R. No. 167988, February 06, 2007 ]
MA. CONCEPCION L. REGALADO, PETITIONER, VS. ANTONIO S. GO,
RESPONDENT.

DECISION
CHICO-NAZARIO, J.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, of the
Resolution[1] dated 30 August 2004 of the Court of Appeals, finding petitioner Ma.
Concepcion L. Regalado (Atty. Regalado) guilty of indirect contempt. Likewise assailed
in this petition is the Resolution[2] denying her Motion for Reconsideration. The
dispositive portion of the Resolution reads:
WHEREFORE, Atty. Ma. Concepcion Regalado of De Borja Medialdea Bello Guevarra
and Gerodias Law Offices is declared GUILTY of INDIRECT CONTEMPT and is
ordered to pay a fine of Five Thousand Pesos (P5,000), with a STERN WARNING that
a repetition of the same or similar acts in the future will be dealt with more severely.
The imposed fine should be paid to this Court upon finality hereof.

Let a copy of this resolution be furnished the Bar Confidant (sic), the Integrated Bar of
the Philippines and the Court Administrator for investigation and possible administrative
sanction.[3]
The present controversy stemmed from the complaint of illegal dismissal filed before the
Labor Arbiter by herein respondent Antonio S. Go against Eurotech Hair Systems, Inc.
(EHSI), and its President Lutz Kunack and General Manager Jose E. Barin.
In a Decision[4] dated 29 December 2000, the Labor Arbiter ruled that respondent Go
was illegally dismissed from employment, the decretal portion of which reads:
WHEREFORE, premises considered, judgment is hereby rendered as follows:
1. Declaring [EHSI, Kunack and Barin] guilty of illegal dismissal;

2. Considering that reinstatement would not be feasible because of strained

relations, [EHSI, Kunack and Barin] are ordered to pay [herein respondent Go]
backwages in the amount of Php900,000.00 (Php60,000 x 15 months), separation
pay of Php180,000.00 (one month pay for every year of service = Php60,000 x 3
years);

3. Ordering [EHSI, Kunack and Barin] to pay [respondent Go] Php500,000.00 as

moral damages;

4. Ordering [EHSI, Kunack and Barin] to pay [respondent Go] Php300,000 as

exemplary damages;

5. Ordering the payment of ten percent (10%) of the total monetary award as
attorney's fees in the sum of Php188,000.00.
All other claims are hereby dismissed for lack of merit.
On appeal to the National Labor Relations Commission (NLRC), EHSI, Kunack and
Barin employed the legal services of De Borja Medialdea Bello Guevarra and Gerodias
Law Offices where herein petitioner Atty. Regalado worked as an associate. [5]

On 11 June 2001, the NLRC rendered a Decision [6] reversing the Labor Arbiter's
decision and declaring that respondent Go's separation from employment was legal for
it was attended by a just cause and was validly effected by EHSI, Kunack and Barin.
The dispositive part of the decision reads:
WHEREFORE, the appealed decision is set aside. The complaint below is dismissed for
being without merit.
For lack of patent or palpable error, the Motion for Reconsideration interposed by
respondent Go was denied by the NLRC in an Order [7] dated 20 December 2001.

Aggrieved, respondent Go elevated the adverse decision to the Court of Appeals which
was docketed as CA-G.R. SP No. 69909 entitled, Antonio S. Go v. National Labor
Relations Commission, Eurotech Hair Systems, Inc., Lutz Kunack and Jose Barin.
On 9 July 2003, the Court of Appeals promulgated a Decision [8] setting aside the ruling
of the NLRC and reinstating the decision of the Labor Arbiter adjudging EHSI, Kunack
and Barin guilty of illegal dismissal. The appellate court thus ordered EHSI, Kunack and
Barin to pay respondent Go full backwages, separation pay, moral and exemplary
damages. The fallo of the decision reads:
WHEREFORE, the petition for certiorari is GRANTED. The assailed decision of the
NLRC promulgated on July 30, 2001 and its Order dated December 20, 2001 are SET
ASIDE while the decision of Labor Arbiter Waldo Emerson R. Gan dated December 29,
2000 declaring the dismissal of [herein respondent Go] as illegal is hereby
REINSTATED with the modification that [EHSI] is hereby Ordered to pay [respondent
Go]:
1. His full backwages from the time of his illegal dismissal until the finality of this
decision;

2. Separation pay equal to one month pay for every year of service;

3. Moral damages in the amount of P50,000.00; and

4. Exemplary damages in the amount of P20,000.00

The award of attorney's fees is DELETED.
EHSI, Kunack and Barin were able to receive a copy of the decision through registered
mail on 17 July 2003 while respondent Go received his copy on 21 July 2003. [9]

On 16 July 2003, after the promulgation of the Court of Appeals decision but prior to
the receipt of the parties of their respective copies, the parties decided to settle the case
and signed a Release Waiver and Quitclaim [10] with the approval of the Labor Arbiter. In
view of the amicable settlement, the Labor Arbiter, on the same day, issued an
Order[11] dismissing the illegal dismissal case with prejudice. The order thus reads:

In view of the Release, Waiver and Quitclaim voluntarily executed by the [herein
respondent] Antonio S. Go, let the instant case be as it is hereby DISMISSED WITH
PREJUDICE.
The execution of the compromise agreement was attended by the counsel for EHSI,
Kunack and Barin, petitioner Atty. Regalado, and respondent Go, but in the absence
and without the knowledge of respondent Go's lawyer. [12]

After the receipt of a copy of the Court of Appeals decision, respondent Go, through
counsel, filed, on 29 July 2003, a Manifestation with Omnibus Motion [13] seeking to
nullify the Release Waiver and Quitclaim dated 16 July 2003 on the ground of fraud,
mistake or undue influence. In the same motion, respondent Go, through counsel,
moved that petitioner Atty. Regalado be made to explain her unethical conduct for
directly negotiating with respondent Go without the knowledge of his counsel. The
motion thus prays:
WHEREFORE, premises considered, it is most respectfully prayed for the Honorable
Court to declare Null and Void the dismissal of the instant (sic), with prejudice, by Labor
(sic) Waldo Emerson Gan, as well as the Release Waiver and Quitclaim dated July 16,
2003 signed by [herein respondent Go] for having been obtained through mistake, fraud
or undue influence committed by [EHSI, Kunack and Barin] and their counsels (sic).

It is likewise prayed for [EHSI, Kunack and Barin's] counsel, particularly Atty. Ma.
Concepcion Regalado, to be required to explain why no disciplinary action should be
taken against them (sic) for their (sic), unethical conduct of directly negotiating with
[respondent Go] without the presence of undersigned counsel, and for submitting the
Release, Waiver and Quitclaim before Labor Arbiter Waldo Emerson Gan knowing fully
well that the controversy between [respondent Go] and [EHSI] is still pending before this
Honorable Court.

[Respondent Go] likewise prays for such other relief [as may be] just and equitable
under the premises.[14]
For their part, EHSI, Kunack and Barin submitted a Manifestation and Motion with
Leave of Court[15] praying that CA-G.R. SP No. 69909 be considered settled with finality
in view of the amicable settlement among the parties which resulted in the dismissal of
respondent Go's complaint with prejudice in the Labor Arbiter's Order dated 16 July
2003.

In addition, EHSI, Kunack and Barin also filed a Motion for Reconsideration [16] with
an ad cautelam that in case of unfavorable action on their foregoing Manifestation and
Motion, the appellate court should reconsider its decision dated 9 July 2003.

Acting on the motions, the appellate court issued a Resolution [17] on 19 November 2003
annulling the Order of the Labor Arbiter dated 16 July 2003 for lack of jurisdiction. It
also denied for lack of merit EHSI, Kunack and Barin's Motion for Reconsideration Ad
Cautelam. In the same resolution, petitioner Atty. Regalado was ordered to explain why
she should not be cited for contempt of court for violating Canon 9 of the Canons of
Professional Ethics. The decretal portion of the Resolution reads:
WHEREFORE, premises considered, the Manifestation with Omnibus Motion is
PARTIALLY GRANTED. The order of Labor Arbiter Gan dismissing the case with
prejudice is hereby declared NULL and VOID for lack of jurisdiction. [EHSI, Kunack and
Barin's] counsel, [herein petitioner] Atty. Ma. Concepcion Regalado is ordered to SHOW
CAUSE within five (5) days from receipt of this Resolution why she should not be cited
for contempt of court for directly negotiating with [herein respondent Go] in violation of
Canon 9 of the Canons of Professional Ethics. On the other hand, the Motion for
Reconsideration Ad Cautelam is hereby denied for lack of merit.
EHSI, Kunack and Barin thus filed a Petition for Review on Certiorari before this Court,
assailing the Court of Appeals decision promulgated on 9 July 2003 and its Resolution
dated 19 November 2003, denying their Motion for Reconsideration. The case is
cognized by another division of this Court.

For her part, petitioner Atty. Regalado submitted a Compliance [18] and explained that she
never took part in the negotiation for the amicable settlement of the illegal dismissal
case with respondent Go which led to the execution of a compromise agreement by the
parties on 16 July 2003. EHSI, Kunack and Barin, through a Mr. Ragay, a former EHSI
employee and a close ally of respondent Go, were the ones who negotiated the
settlement.

Further, petitioner Atty. Regalado maintained that she never met personally respondent
Go, not until 16 July 2003, when the latter appeared before the Labor Arbiter for the
execution of the Release Waiver and Quitclaim. Petitioner Atty. Regalado claimed that
she was in fact apprehensive to release the money to respondent Go because the latter
cannot present any valid identification card to prove his identity. It was only upon the
assurance of Labor Arbiter Gan that Antonio S. Go and the person representing himself
as such were one and the same, that the execution of the agreement was
consummated.

Considering the circumstances, petitioner Atty. Regalado firmly stood that there was no
way that she had directly dealt with respondent Go, to the latter's damage and
prejudice, and misled him to enter into an amicable settlement with her client.

On 30 August 2004, the Court of Appeals issued a Resolution [19] disregarding petitioner
Atty. Regalado's defenses and adjudging her guilty of indirect contempt under Rule 71
of the Revised Rules of Court. As declared by the appellate court, even
granting arguendo that petitioner Atty. Regalado did not participate in the negotiation
process, she was nonetheless under the obligation to restrain her clients from doing
acts that she herself was prohibited to perform as mandated by Canon 16 of the
Canons of Professional Ethics. However, instead of preventing her clients from
negotiating with respondent Go who was unassisted by his counsel, Atty. Regalado
actively participated in the consummation of the compromise agreement by dealing
directly with respondent Go and allowing him to sign the Release Waiver and Quitclaim
without his lawyer.

Undaunted, petitioner Atty. Regalado filed a Motion for Reconsideration which was also
denied by the appellate court for lack of merit. [20]

Hence, this instant Petition for Review on Certiorari,[21] raising the following issues:
I.

WHETHER OR NOT THE COURT OF APPEALS COMPLETELY VIOLATED

PETITIONER'S CONSTITUTIONAL RIGHTS.

II.

WHETHER OR NOT THE COURT OF APPEALS TOTALLY DISREGARDED THE

MANDATORY PROVISION OF RULE 71 OF THE 1997 RULES OF CIVIL
PROCEDURE.

III.

WHETHER OR NOT THE COURT OF APPEALS COMMITTED A MANIFEST ERROR

OF LAW IN RULING THAT PETITIONER IS ESTOPPED FROM CHALLENGING ITS
AUTHORITY TO ENTERTAIN THE CONTEMPT CHARGES AGAINST HER.

IV.

WHETHER OR NOT THE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF

DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN
DISREGARDING THE OVERWHELMING EVIDENCE ON RECORD TO EFFECT THAT
PETITIONER DID NOT COMMIT ANY CONTUMACIOUS CONDUCT.

V.

WHETHER OR NOT THE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF

DISCRETION AND COMMITTED A GROSS MISAPPRECIATION OF FACTS IN
FINDING THE PETITIONER GUILTY OF INDIRECT CONTEMPT ON THE BASIS OF
THE CONFLICTING, UNCORROBORATED, AND UNVERIFIED ASSERTIONS OF
THE RESPONDENT.
Considering that the issues raised herein are both questions of law and fact, and
consistent with our policy that this Court is not a trier of facts, we shall address only the
pure questions of law and leave the factual issues, which are supported by evidence, as
found by the appellate court. It is an oft-repeated principle that in the exercise of the
Supreme Court's power of review, the Court is not a trier of facts and does not normally
undertake the re-examination of the evidence presented by the contending parties
during the trial of the case considering that the findings of facts of the Court of Appeals,
if supported by evidence, are conclusive and binding upon this Court. [22]

Contempt of court is a defiance of the authority, justice or dignity of the court; such
conduct as tends to bring the authority and administration of the law into disrespect or to
interfere with or prejudice parties litigant or their witnesses during litigation. [23] It is
defined as disobedience to the Court by acting in opposition to its authority, justice, and
dignity. It signifies not only a willful disregard or disobedience of the court's orders, but
such conduct as tends to bring the authority of the court and the administration of law
into disrepute or in some manner to impede the due administration of justice. [24]

The power to punish for contempt is inherent in all courts and is essential to the
preservation of order in judicial proceedings and to the enforcement of judgments,
orders, and mandates of the court, and consequently, to the due administration of
justice.[25]

Thus, contempt proceedings has a dual function: (1) vindication of public interest by
punishment of contemptuous conduct; and (2) coercion to compel the contemnor to do
what the law requires him to uphold the power of the Court, and also to secure the
rights of the parties to a suit awarded by the Court. [26]
In our jurisdiction, the Rules of Court penalizes two types of contempt, namely direct
contempt and indirect contempt. [27]

Direct contempt is committed in the presence of or so near a court as to obstruct or

interrupt the proceedings before the same, and includes disrespect toward the court,
offensive personalities toward others, or refusal to be sworn or answer as a witness, or
to subscribe an affidavit or deposition when lawfully required to do so. [28]

On the other hand, Section 3, Rule 71 of the Rules of Court enumerates particular acts
which constitute indirect contempt, thus:
(a) Misbehavior of an officer of a court in the performance of his official duties or in his
official transactions;

(b) Disobedience of or resistance to a lawful writ, process, order, or judgment of a court,

including the act of a person who, after being dispossessed or ejected from any real
property by the judgment or process of any court of competent jurisdiction, enters or
attempts or induces another to enter into or upon such real property, for the purpose of
executing acts of ownership or possession, or in any manner disturbs the possession
given to the person adjudged to be entitled thereto;

(c) Any abuse of or any unlawful interference with the processes or proceedings of a
court not constituting direct contempt under Section 1 of this Rule;

(d) Any improper conduct tending, directly or indirectly, to impede, obstruct, or degrade
the administration of justice;

(e) Assuming to be an attorney or an officer of a court, and acting as such without

authority;

(f) Failure to obey a subpoena duly served;

(g) The rescue, or attempted rescue, of a person or property in the custody of an officer
by virtue of an order or process of a court held by him.

But nothing in this section shall be so construed as to prevent the court from issuing
process to bring the respondent into court, or from holding him in custody pending such
proceedings. (Emphasis supplied.)[29]
Section 4, Rule 71 of the same Rules provides how proceedings for indirect contempt
should be commenced, thus:
SEC. 4. How proceedings commenced. - Proceedings for indirect contempt may be
initiated motu proprio by the court against which the contempt was committed by an
order or any other formal charge requiring the respondent to show cause why he should
not be punished for contempt.

In all other cases, charges for indirect contempt shall be commenced by a

verified petition with supporting particulars and certified true copies of
documents or papers involved therein, and upon full compliance with the
requirements for filing initiatory pleadings for civil actions in the court
concerned. If the contempt charges arose out of or are related to a principal action
pending in the court, the petition for contempt shall allege that fact but said petition
shall be docketed, heard and decided separately, unless the court in its discretion
orders the consolidation of the contempt charge and the principal action for joint hearing
and decision. (Emphases supplied.)
As can be gleaned above, the provisions of the Rules are unequivocal. Indirect
contempt proceedings may be initiated only in two ways: (1) motu proprio by the court;
or (2) through a verified petition and upon compliance with the requirements for initiatory
pleadings. Procedural requirements as outlined must be complied with.

There is no doubt that the complained acts of Atty. Regalado would fall under
paragraphs (a) and (d) of Section 3, Rule 71, as in fact, she was adjudged guilty of
indirect contempt. But were the proceedings conducted in convicting petitioner done in
accordance with law?

In the instant case, the indirect contempt proceedings was initiated by respondent Go
through a Manifestation with Omnibus Motion. [30] It was based on the aforesaid Motion
that the appellate court issued a Resolution [31] dated 19 November 2003, requiring
petitioner Atty. Regalado to show cause why she should not be cited for contempt.

Clearly, respondent Go's Manifestation with Omnibus Motion was the catalyst which set
everything in motion and led to the eventual conviction of Atty. Regalado. It was
respondent Go who brought to the attention of the appellate court the alleged
misbehavior committed by petitioner Atty. Regalado. Without such positive act on the
part of respondent Go, no indirect contempt charge could have been initiated at all.

Indeed, the appellate court itself, in its Resolution dated 30 August 2004, made
categorical findings as to how the contempt charge was initiated, to wit:
In the present case, [respondent's Go] Manifestation With Omnibus Motion which
led to our 19 November 2003 Resolution requiring Atty. Regalado to explain why
she should not be cited for contempt, x x x.[32]
We cannot, therefore, argue that the Court of Appeals on its own initiated the indirect
contempt charge without contradicting the factual findings made by the very same court
which rendered the questioned resolution.

It is true in Leonidas v. Judge Supnet,[33] this Court ruled that the contempt proceedings
was considered commenced by the court motu proprio even if the show cause order
came after the filing of the motions to cite for contempt filed by the adverse party. The
Decision thus reads:
Thus, independently of the motions filed by the Tamondong Spouses, it was the Pasay
MTC which commenced the contempt proceedings motu proprio. No verified petition is
required if proceedings for indirect contempt are initiated in this manner, and the
absence of a verified petition does not affect the procedure adopted.

It is true that the Tamondong Spouses did file a Motion To Cite Plaintiff For Contempt Of
Court, dated May 17, 2000. In this pleading they prayed that Union Bank be declared in
indirect contempt of court for its disobedience to the Pasay MTC's Order dated May 9,
2000. This Order dated May 9, 2000 specifically directed Union Bank to "return
immediately to the defendants the replevied motor vehicle." However, the Tamondong
Spouses' unverified motion dated May 17, 2000 cannot invalidate the contempt
proceedings because these proceedings were initiated by respondent judge motu
proprio in accordance with Section 4, Rule 71 of the 1997 Rules of Civil Procedure.
This above-cited case, however, has no application in the case at bar for the factual
milieu of the cases are different from each other. In Leonidas, there was an order of the
court that was utterly violated by Union Bank. Thus, even in the absence of the motion
of spouses Tamondong to cite Union Bank in contempt, the court a quo on its own can
verily initiate the action. In the present case, the appellate court could not have
acquired knowledge of petitioner Atty. Regalado's misbehavior without respondent Go's
Manifestation with Omnibus Motion reiterating the alleged deceitful conduct committed
by the former.

Having painstakingly laid down that the instant case was not initiated by the court motu
proprio necessitates us to look into the second mode of filing indirect contempt
proceedings.

In cases where the court did not initiate the contempt charge, the Rules prescribe that a
verified petition which has complied with the requirements of initiatory pleadings as
outlined in the heretofore quoted provision of second paragraph, Section 4, Rule 71 of
the Rules of Court, must be filed.

The manner upon which the case at bar was commenced is clearly in contravention with
the categorical mandate of the Rules. Respondent Go filed a Manifestation with
Omnibus Motion, which was unverified and without any supporting particulars and
documents. Such procedural flaw notwithstanding, the appellate court granted the
motion and directed petitioner Atty. Regalado to show cause why she should not be
cited for contempt. Upon petitioner Atty. Regalado's compliance with the appellate
court's directive, the tribunal proceeded in adjudging her guilty of indirect contempt and
imposing a penalty of fine, completely ignoring the procedural infirmities in the
commencement of the indirect contempt action.

It bears to stress that the power to punish for contempt is not limitless. It must be used
sparingly with caution, restraint, judiciousness, deliberation, and due regard to the
provisions of the law and the constitutional rights of the individual. [34]

The limitations in the exercise of the power to punish for indirect contempt are
delineated by the procedural guidelines specified under Section 4, Rule 71 of the Rules
of Court. Strict compliance with such procedural guidelines is mandatory considering
that proceedings against person alleged to be guilty of contempt are commonly treated
as criminal in nature.[35]

As explained by Justice Florenz Regalado, [36] the filing of a verified petition that has
complied with the requirements for the filing of initiatory pleading, is mandatory, and
thus states:
1. This new provision clarifies with a regularity norm the proper procedure for
commencing contempt proceedings. While such proceeding has been classified as
special civil action under the former Rules, the heterogenous practice tolerated by the
courts, has been for any party to file a motion without paying any docket or lawful fees
therefore and without complying with the requirements for initiatory pleadings, which is
now required in the second paragraph of this amended section.

x x x x

Henceforth, except for indirect contempt proceedings initiated motu propio by order of or
a formal charge by the offended court, all charges shall be commenced by a verified
petition with full compliance with the requirements therefore and shall be disposed in
accordance with the second paragraph of this section.
Time and again we rule that the use of the word "shall" underscores the mandatory
character of the Rule. The term "shall" is a word of command, and one which has
always or which must be given a compulsory meaning, and it is generally imperative or
mandatory.[37]

In Enriquez v. Enriquez,[38] this Court applied the word "shall" by giving it mandatory and
imperative import and ruled that non-compliance with the mandatory requirements of
the Rules goes into the very authority of the court to acquire jurisdiction over the subject
matter of the case, thus:
"However, the 1997 Rules of Civil Procedure, as amended, which took effect on July 1,
1997, now require that appellate docket and other lawful fees must be paid within the
same period for taking an appeal. This is clear from the opening sentence of Section 4,
Rule 41 of the same rules that, "(W)ithin the period for taking an appeal, the
appellant shall pay to the clerk of court which rendered the judgment or final order
appealed from, the full amount of the appellate court docket and other lawful fees."

x x x x

Time and again, this Court has consistently held that payment of docket fee within the
prescribed period is mandatory for the perfection of an appeal. Without such
payment, the appellate court does not acquire jurisdiction over the subject matter
of the action and the decision sought to be appealed from becomes final and
executory.[39] (Emphases supplied.)
In United States v. de la Santa,[40] which bears parallelism in the instant case, we held:
The objection in this case is not, strictly speaking, to the sufficiency of the
complaint, but goes directly to the jurisdiction of the court over the crime with
which the accused was charged. x x x. (Emphasis supplied.)
Even if the contempt proceedings stemmed from the main case over which the court
already acquired jurisdiction, the Rules direct that the petition for contempt be treated
independently of the principal action. Consequently, the necessary prerequisites for the
filing of initiatory pleadings, such as the filing of a verified petition, attachment of a
certification on non-forum shopping, and the payment of the necessary docket fees,
must be faithfully observed.[41]

We now proceed to the issue of estoppel raised by the Court of Appeals. When
petitioner Atty. Regalado brought to the attention of the appellate court through a Motion
for Reconsideration the remedial defect attendant to her conviction, the Court of
Appeals, instead of rectifying the palpable and patent procedural error it earlier
committed, altogether disregarded the glaring mistake by interposing the doctrine
of estoppel. The appellate court ruled that having actively participated in the contempt
proceedings, petitioner Atty. Regalado is now barred from impugning the Court of
Appeals jurisdiction over her contempt case citing the case of People v. Regalario.[42]

We do not agree.

Laches is defined as the "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 length of time,
warranting a presumption that the party entitled to assert it either has abandoned it or
declined to assert it."[43]

The ruling in People v. Regalario[44] that was based on the landmark doctrine
enunciated in Tijam v. Sibonghanoy[45] on the matter of jurisdiction by estoppel is the
exception rather than the rule. Estoppel by laches may be invoked to bar the issue of
lack of jurisdiction only in cases in which the factual milieu is analogous to that in the
cited case. In such controversies, laches should have been clearly present; that is, lack
of jurisdiction must have been raised so belatedly as to warrant the presumption that the
party entitled to assert it had abandoned or declined to assert it. [46]

In Sibonghanoy,[47] the defense of lack of jurisdiction was raised for the first time in a
motion to dismiss filed by the Surety[48] almost 15 years after the questioned ruling had
been rendered.[49] At several stages of the proceedings, in the court a quo as well as in
the Court of Appeals, the Surety invoked the jurisdiction of the said courts to obtain
affirmative relief and submitted its case for final adjudication on the merits. It was only
when the adverse decision was rendered by the Court of Appeals that it finally woke up
to raise the question of jurisdiction. [50]

Clearly, the factual settings attendant in Sibonghanoy are not present in the case at
bar. Petitioner Atty. Regalado, after the receipt of the Court of Appeals resolution finding
her guilty of contempt, promptly filed a Motion for Reconsideration assailing the said
court's jurisdiction based on procedural infirmity in initiating the action. Her compliance
with the appellate court's directive to show cause why she should not be cited for
contempt and filing a single piece of pleading to that effect could not be considered as
an active participation in the judicial proceedings so as to take the case within the milieu
of Sibonghanoy. Rather, it is the natural fear to disobey the mandate of the court that
could lead to dire consequences that impelled her to comply.

The provisions of the Rules are worded in very clear and categorical language. In case
where the indirect contempt charge is not initiated by the courts, the filing of a verified
petition which fulfills the requirements on initiatory pleadings is a prerequisite. Beyond
question now is the mandatory requirement of a verified petition in initiating an indirect
contempt proceeding. Truly, prior to the amendment of the 1997 Rules of Civil
Procedure, mere motion without complying with the requirements for initiatory pleadings
was tolerated by the courts.[51] At the onset of the 1997 Revised Rules of Civil
Procedure, however, such practice can no longer be countenanced.

Evidently, the proceedings attendant to the conviction of petitioner Atty. Regalado for
indirect contempt suffered a serious procedural defect to which this Court cannot close
its eyes without offending the fundamental principles enunciated in the Rules that we,
ourselves, had promulgated.

The other issues raised on the merits of the contempt case have become moot and
academic.

WHEREFORE, premises considered, the instant Petition is GRANTED. The indirect

contempt proceedings before the Court of Appeals is DECLARED null and void.
SO ORDERED.