THIRD DIVISION employees of PTMC.
Sometime in 2000, PTMC referred
G.R. No. 194176, September 10, 2014
LIMUELL C. NARCISO, OMAR C. MATUGUINA, ERIC
MATUGUINA, AZENITH MAG-ASO, LILIBETH
MASCARIAS, LUTGARDO OGAMA, LOLITO
COLLAMAT, IRIS MATUGUINA AND ELMER
BANILAD, CARLOS B. MATUGUINA, JR., BIBIANO
ESTRERA, JR., PEDRO LINABOG, BOBBY ALQUEZA,
SANTIAGO ATIS, MARLON DAMAYO, CASINILLO
NESTRO, BERNARDITO DACAN, SABINIANO
PATATAG, JOLLYBOY MONICIT, RODRIGO DAYDAY,
REY ESTRERA, CRESENCIO CASIO, DOMINICO
AVILA, ERVERT RICAZA, ENRIQUE PANTILGAN,
JONARDEN E. GONZAGA, RENATO CASIO, BENNY
BOOC, DUA CORSINO, RANILO IGOT, NARCISO
PATERNO, ROBERTO RABAL, JULITO MONSALES,
LEOPOLDO MONGUEZ, JR., ROWEL NEIGAS,
EPIFANIO PIAMIL, LOUIE JUDILLAS AND MANUEL
CENIZA, Petitioners, v. PACIFIC TRADERS &
MANUFACTURING CORPORATION (PTMC)/TABOK
WORKERS MULTIPURPOSE COOPERATIVE
(TWMPC), Respondents.
RESOLUTION
REYES, J.:
This is a petition for review on certiorari1 under Rule 45
of the Rules of Court assailing the Decision 2dated
March 25, 2010 and the Resolution3 dated September
30, 2010 of the Court of Appeals (CA) in CA-G.R. CEB-
SP. No. 02021 which affirmed the Order 4 dated
February 22, 2006 of the National Labor Relations
Commission (NLRC) dismissing the appeal filed by the
petitioners for failure to attach thereto a certificate of
non-forum shopping.
The Facts
Petitioners were the employees of Pacific Traders
Manufacturing Corporation (PTMC), a domestic
corporation engaged in the business of manufacturing
furniture and fixtures for export. They were hired on
different dates from 1999 to 2002 and in various
capacities such as framer, attacher, finisher,
assembler, etc.5cralawlawlibrary
Tabok Workers Multi-Purpose Cooperative (TWMPC) is a
cooperative duly registered with the Cooperative
Development Authority among the purposes of which is
"to engage in job out works of rattan and wood
companies to the Pacific Rattan Manufacturing
Corporation and other manufacturing
companies."6cralawlawlibrary
The present controversy arose when the petitioners
filed in 2004, complaints for illegal dismissal with
money claims7 against PTMC and TWMPC before the
Regional Arbitration Branch No. VII, NLRC, Cebu City
docketed as NLRC RAB-VII Case No. 10-2076-2004 and
NLRC RAB-VII Case No. 10-2047-2004.8cralawlawlibrary
The petitioners alleged that they were regular
them to TWMPC in view of PTMC's refusal to sign a
casual or probationary employment contract with
them. They claimed to have been treated indifferently
by TWMPC and were not given the proper labor
benefits. When they reported the matter to the
Department of Labor and Employment (DOLE), TWMPC
terminated them from employment without just or
authorized cause.9cralawlawlibrary
PTMC denied that the petitioners were its regular
employees and instead claimed that they were hired on
a contractual or casual basis to meet the volume of
orders from its foreign buyers which can no longer be
accommodated by its regular employees. The
petitioners were assigned to PTMC by TWMPC, one of
its] legitimate job contractors. PTMC asserted that the
petitioners were paid all the salaries and benefits due
them under the law and when their contracts expired,
they voluntarily executed "Releases and Quitclaims."
PTMC also averred that when it found out about the
petitioners' illegal dismissal complaint, it had long
terminated its relations with them.10cralawlawlibrary
TWMPC confirmed that the petitioners were its
bonafide members. They agreed to work on specific
works on particular job orders contracted by TWMPC
with different companies. Sometime in 2004, TWMPC's
Board of Directors contemplated to try a
"pakyaw system" instead of the per hour system of
compensation. After being informed of such plan, the
petitioners disagreed. The disagreement was
eventually settled when the petitioners verbally
acquiesced to withdraw their membership from TWMPC
provided they will be paid separation pay and other
amounts they were entitled to receive as cooperative
members. Despite this verbal agreement, however, the
petitioners filed complaints before the DOLE and the
NLRC RAB-VII.11 The DOLE case was later on dismissed
upon an amicable settlement between the petitioners
and TWMPC.12cralawlawlibrary
The complaints before the NLRC RAB-VII were
consolidated and jointly resolved by the Labor
Arbiter13 (LA) in its Decision dated July 21, 2005. The LA
ruled that the petitioners were not illegally dismissed.
However, TWMPC was directed to pay their separation
pay as well as the amount of benefits due them as
members of the cooperative. The LA declared that the
petitioners were not employees of PTMC which was
accordingly discharged from any liability.14 The LA
dismissed the petitioners' money claims for lack of
factual basis.15cralawlawlibrary
The petitioners and TWMPC appealed to the NLRC.16 In
its Order dated February 22, 2006, the NLRC dismissed
both appeals outright for failure to attach the requisite
Certificate of Non-Forum Shopping. The NLRC reasoned
that appeal is a mere statutory privilege and the period
and manner for its perfection are not only mandatory
but also jurisdictional.17cralawlawlibrary
Petitioners moved for the reconsideration of the
foregoing order. They also submitted a Motion to Admit
Certificate of Non-Forum Shopping pleading for a
liberal application of procedural rules in the interest of
substantial justice.18cralawlawlibrary

The NLRC denied reconsideration in its Resolution
dated May 25, 2006. The February 22, 2006 NLRC
Resolution became final and executory on July 10, 2006
and an entry of judgment was issued on August 10,
2006.19cralawlawlibrary
The petitioners persisted in their cause and elevated
the matter to the CA via a petition for certiorari under
Rule 65 of the Rules of Court ascribing grave abuse of
discretion to the NLRC.
In its herein assailed Decision20 dated March 25, 2010,
the CA dismissed the petition upon finding that the
petitioners failed to file the certificate of non-forum
shopping within the reglementary period of filing a
Memorandum of Appeal. Instead, they belatedly
submitted the same in their motion for reconsideration
of the NLRC resolution dismissing their appeal. The CA
also ruled that the petitioners failed to cite any
compelling reason which will warrant a relaxation of
procedural rules. The CA stressed that the petitioners
were not denied their right to appeal because it is
actually a mere statutory privilege which must be
perfected in the manner provided by law. The CA
reiterated the NLRC's ruling that rules on perfection of
appeal are not only mandatory but jurisdictional as
well.21cralawlawlibrary
The petitioners moved for reconsideration22 but their
motion was denied in the CA Resolution23 dated
September 30, 2010.
Hence, the present appeal arguing, in the main, that
the CA erred in "strictly applying the requirement of
certificate of non-forum shopping despite the presence
of highly exceptional situation.24cralawlawlibrary
The Ruling of the Court
The petition is denied.
At the outset, it bears to emphasize that "the findings
of the NLRC are generally binding and should be
treated with finality. The CA only looks at the facts to
determine if a tribunal, board or officer exercising
judicial or quasi-judicial functions acted without or in
excess of its or his jurisdiction, or with grave abuse of
discretion amounting to lack or excess of jurisdiction in
appreciating the facts."25cralawlawlibrary
Hence, in ruling on the correctness of the CA's review
of the NLRC decision, this Court is confined to a review
of the case solely on pure questions of law. We are
tasked to view the CA decision in the same context that
the petition for certiorari it ruled upon was presented;
we have to examine the CA decision from the prism of
whether it correctly determined the presence or
absence of grave abuse of discretion in the NLRC
decision before it, not on the basis of whether the NLRC
decision on the merits of the case was correct. In other
words, we have to be keenly aware that the CA
undertook a Rule 65 review, not a review on appeal, of
the challenged NLRC decision. In question form, the
question to ask is: Did the CA correctly determine
whether the NLRC committed grave abuse of discretion
in ruling on the case?26cralawlawlibrary
Grave abuse of discretion connotes utter absence of
any basis for the NLRC ruling.27 The attendant facts and
records on hand show otherwise.
A certificate of non-forum shopping is a requisite for
the perfection of an appeal. This is clearly enunciated
in Section 4, Rule VI of the 2005 Revised Rules of
Procedure of the NLRC (2005 NLRC
Rules),28 thus:chanRoblesvirtualLawlibrary
Sec. 4. Requisites For Perfection Of Appeal. - a) The
appeal shall be: 1) filed within the reglementary period
provided in Section 1 of this Rule; 2) verified by the
appellant himself in accordance with Section 4, Rule 7
of the Rules of Court, as amended; 3) in the form of a
memorandum of appeal which shall state the grounds
relied upon and the arguments in support thereof, the
relief prayed for, and with a statement of the date the
appellant received the appealed decision, resolution or
order; 4) in three (3) legibly typewritten or printed
copies; and 5) accompanied by i) proof of payment of
the required appeal fee; ii) posting of a cash or surety
bond as provided in Section 6 of this Rule; iii) a
certificate of non-forum shopping; and iv) proof of
service upon the other parties. (Emphasis, italics and
underscore ours)
The petitioners aver that the CA should have granted
their petition for certiorari and relaxed the NLRC Rules
of Procedure because on page 53 of their
memorandum on appeal is the caption "Verification
and Certification." However, the counsel for the
petitioners inadvertently deleted the paragraphs
intended for the certification of non-forum shopping.
They assert that they were in a hurry in preparing the
memorandum due to the very limited time of 10 days
to file the same. They proffer these as justifiable
causes for their non-compliance with the NLRC Rules of
Procedure and submit that their belated filing of the
certificate in their motion for reconsideration was
substantial compliance. They further aver that the
outright dismissal of their appeal on a mere
technicality would seriously impair the orderly
administration of justice.
The petitioners' arguments are devoid of merit. The
subsequent compliance with the requirement does not
excuse a party's failure to comply therewith in the first
instance. While the Court, in certain cases, has excused
non-compliance with the requirement to submit a
certificate of non-forum shopping, such liberal posture
has always been grounded on special circumstances or
compelling reasons which made the strict application
of the rule clearly unjustified or
inequitable.29cralawlawlibrary
Here, the reasons cited by the petitioners for their
failure to attach the certificate in their appeal
memorandum can hardly be considered as special
circumstances or compelling reasons to warrant a
liberal application of the rules of procedure. Moreover,
based on the facts of the case, a strict application of a
technical rule will not prejudice the administration of
justice in view of the petitioners' unmeritorious claims.
It is true that in labor cases, technical rules are not
necessarily fatal and they can be liberally applied.
However, this principle can only operate if, all things
being equal, any doubt or ambiguity would be resolved
in favor of labor. Should the case be substantively
unmeritorious, technicalities and limitations in
procedural rules must be fully
enforced.30cralawlawlibrary
The claims advanced by the petitioners failed to yield
substantive merit. First, their money claims have
already been amicably settled and paid in the
concurrent labor case they filed before the DOLE. The
Quitclaim and Release signed by the petitioners show
that they already received payment for their claims
from TWMPC and PTMC. The quitclaims were duly
attested by Atty. Joy Lily Elumir-Tan, Chief of the Labor
Relations Division of the DOLE, Region VII, Cebu
City.31cralawlawlibrary
Second, the LA correctly ruled that the petitioners'
allegations did not bear out a case for illegal dismissal.
The alleged termination from employment was merely
presumed by the petitioners from their disagreement
with TWMPC when the latter announced its plans to
shift to a "pakyaw system" of compensation instead of
the per hour scheme. We defer to the factual findings
of the LA considering its expertise on labor matters and
its inimitable opportunity to assess the parties' claims
first-hand. As observed by the LA, the petitioners
verbally agreed to settle the disagreement by
withdrawing their membership and monetary interests
from the cooperative. They later on filed the illegal
dismissal suit just to obtain more monetary
consideration from TWMPC in the form of a separation
pay. Meanwhile, PTMC was not the employer of the
petitioners and it hired them long before the present
controversy arose. They were hired as casual or
contractual employees through their job contractor
TWMPC.32cralawlawlibrary
In fine, in the absence of justifiable and compelling
reasons, a liberal application of procedural rules is not
warranted in this case. The Court thus agrees with the
CA that no grave abuse of discretion is attributable to
the NLRC when it found no justification to excuse the
absence of a certificate of non-forum shopping in the
petitioners' memorandum on appeal.
WHEREFORE, in view of the foregoing, the petition
is DENIED. The Decision dated March 25, 2010 and
Resolution dated September 30, 2010 of the Court of
Appeals in CA-G.R. CEB-SP. No. 02021 are
hereby AFFIRMED.
SO ORDERED.cralawred
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 193117 November 26, 2014
HEIRS OF SPOUSES ANGEL LIWAGON AND
FRANCISCA DUMALAGAN, namely: NARCISA
LIWAGON-LAGANG, represented by her Heir
VICTOR LIWAGON LAGANG, LEONCIO LIWAGON,
represented by his Heir GERONIMA VDA.
LIWAGON, and JOSEFINA LIWAGON-ESCAUSO
represented by their Attorney-in-Fact and for
herself, JOSEFINA LIWAGON-ESCAUSO, Petitioners,
vs.
HEIRS OF SPOUSES DEMETRIO LIWAGON AND
REGINA LIWAGON, namely: RODRIGO LIWAGON,
MINENCIA LIWAGONOMITTER, JOSEFINA
LIWAGON-NUEVO, TERESITO LIWAGON and
DANILO LIWAGON, Respondents.
DECISION
VILLARAMA; JR., J.:
Before this Court is a petition for review on certiorari of
the Decision1 of the Court of Appeals (CA) in Cagayan
de Oro City dated October 23, 2009 and its
Resolution2 dated June 24, 2010 in CA-G.R. CV No.
00965- MIN affirming in toto the September 5, 2006
Decision3 of the Regional Trial Court (RTC), Branch 5,
Mati, Davao Oriental in Civil Case No. 1902.
Petitioners and respondents in the case at bar are all
children and grandchildren of the late spouses Angel
and Francisca Liwagon. On June 4, 1957, Angel was
provisionally awarded the following parcel of land
through the Board of Liquidators of the Y. Furukawa
Plantation:
A parcel of land being portion of the Y. Furukawa
plantation, containing an area of 8:30:04 hectares,
designated as Lot No. 61, PSD 39427, bounded on the
North Abandoned Road, on the East Quinonoan
River, on the South Lot No. 57 and on the West Lot
No. 62 covered by the latest Tax Declaration No. ARP-
007-00127 under the name of the deceased Angel
Liwagon, xerox copy of said Tax Declaration is hereto
attached and marked as Annex "E" to form part of this
complaint.4
Together with his children, he cultivated and introduced
improvements on the land. Later, his children got
married and lived their own lives except for his son
Demetrio.
The appellate court adopted the findings of fact of the
trial court and narrates the succeeding material
events, viz.:
One of Angels sons named Demetrio, together with his
wife Regina, stayed with the former and administered
the property in litigation. The defendants who are all
Demetrios children helped with the cultivation and
took care of the familys copra-making business.
Eventually, Angel applied to the Y. Furukawa Tarragona
Plantation for final acquisition of the land by sale. A
deed of conveyance was thus executed in Angels
favor. As he grew older, Angel stayed with his children,
one after the other. He became sickly in 1976, while
staying with one of his daughters in Misamis
Occidental, until the time of his death in 1978.
Upon their fathers demise, the [petitioners] demanded
of their brother Demetrio for the partition of the subject
landholding. Demetrio pleaded to defer the partition for
economic reasons, to which the [petitioners]
acquiesced by permitting the spouses Demetrio and
Regina, and their children, to continuously occupy the
land in litigation. When Demetrio died, followed shortly
by Regina, [petitioner] Josefina signified her demand
for partition to one of Demetrios sons named Rodrigo.
Rodrigo ignored the demand, however, contending that
they now owned the property as inheritance from their
parents, who had earlier lawfully acquired the land by
purchase from their grandfather, as evidenced by a
Deed of Sale dated 24 July 1972. As heirs of Angel and
Francisca, the [petitioners] presently brought the
instant case for annulment of the sale, partition,
accounting and damages against the defendants-heirs
of Spouses Demetrio and Regina.5
Petitioners presented the testimony of Josefina
Liwagon-Escauso (Josefina) before the court a quo.
Josefina testified thatshe is the attorneyin-fact of
petitioners and respondents are her nephews from her
brother Demetrio. She testified that her fatherhad
acquired an eight-hectare parcel of land from the
Furukawa Plantation located at Quinonoan, Tarragona,
Davao Oriental on June 4, 1957. According to the
witness, she and her siblings cultivated and planted
coconuts on the subject land in 1955. Demetrio was
later allowed by his siblings to attend to the land. He
then took charge of the harvesting and making of
copra, and remained in possession of the subject land
during their lifetime. After he and his wife died, their
children retained possession of the property. 6
Josefina claimed that since the death of their father
Angel in 1994, she and her sisters never received any
share from the income derived from the proceeds of
the improvements on the land. Her brother Demetrio
allegedly refused to give their share because he
claimed that the income derived from the land was not
even sufficient for his own needs. In her accounting
before the court a quo, she pegged the copra
production of the subject land for the period 1994 to
1999 at 40 tons. She claimed her share of the proceeds
of the copra production, and explained that the reason
she did not demand for her share in the past was
because her brother Demetrio and his wife were then
hard up.7
Josefina further claimed that the signature appearing
on the assailed Deed of Sale is not the signature of her
father, and that his fathers true signature is the one
found on the Application for the sales patent. The
witness also testified on cross-examination that she
only learned, for the first time, that the subject
property was purportedly bought by the spouses
Demetrio and Regina in 1994 when she was
demanding for the partition of the property. Her father
also allegedly did not inform her about the purported
sale. She only saw the assailed Deed of Sale when it
was presented to her at the barangay office. Although
they have already had a conference and agreed to
divide the subject land before a certain Judge Castro
sometime in 1994, the agreement was never complied
with.8
Respondents presented the testimony of Rodrigo
Liwagon (Rodrigo). He stated that petitioners are his
aunties Gregoria Liwagon-Grundio, Josefina Liwagon-
Escauso and uncles Narciso Liwagon and Leoncio
Liwagon. He stated that his father Demetrio passed
away on March 14, 1994, and his mother on September
27, 1994. He is the eldest among five children who all
grew up in Tarragona, Davao Oriental. He testified that
he, his parents and siblings occupied and cultivated 17
hectares of the Furukawa Plantation. His father
Demetrio owned 81/2 hectares (designated as Lot 62)
of the said 17 hectares. He allegedly accompanied his
father when the latter submitted the name of his
grandfather to the NAFCO Board of Liquidators on or
about 1953 or 1954, in order for his grandfather to be
awarded a title over the other 8 hectares (designated
as Lot 61).9
Rodrigo testified that his mother acquired the subject
property from his grandfather by way of sale. The
subject land was already occupied by his family since
1954 prior to the execution of the assailed Deed of
Sale. Such fact of residence is corroborated by a
certification from the Barangay Secretary. He claimed
that his family had introduced improvements to the
subject land since 1954 by planting coconut, abaca,
bananaand other fruit bearing trees and they have
been receiving and utilizing the income realized from
these improvements. It was alsohis mother, Regina,
who paid the realty taxes on the subject property for
the years 1971, 1974, 1980, 1985, 1994 and 2000 as
evidenced by the corresponding Tax Declarations and
Certificate of Payment of Taxes presented.10
On cross-examination, Rodrigo stated that while he was
not present when the purported Deed of Sale over Lot
61 was executed, he is in possession of the said
document. Lastly, he claimed that he and his parents
were the only ones who cultivated the whole 17-
hectare property. His uncles and aunties all
petitioners in this case never took part in the
cultivation and introduction of improvements to the
land.11
Julia Divinagracia (Julia), another witness for
respondents, testified that she and the late spouses
Demetrio and Regina were neighbors. She stated that
she owns a nine-hectare parcel of land at the Furukawa
Plantation, while the late spouses owned eight
hectares. After the death of the spouses, their children
occupied the subject land. On cross-examination, Julia
stated that her lot is located about one kilometer from
the land of the late spouses. She, however, stated that
she had no personal knowledge as to who cultivated
and introduced the improvements to the subject land.
She clarified this part of her testimony on redirect
examination and stated that she saw respondents and
their father Demetrio attend to the young coconuts in
the area sometime in 1959.12
The last witness for respondents, Tobias Sapalo
(Tobias), is Reginas brother and was also a neighbor of
Demetrio at the Furukawa Plantation. He testified that
in 1954, the late spouses Demetrio and Regina joined
several other applicants who entered and cultivated
certain portions of the Furukawa Plantation. The late
spouses occupied Lot No. 61.13
In its decision dated September 5, 2006, the court a
quo dismissed the complaint for lack of merit. The trial
court found that petitioners failed to disprove the
genuineness of the signature of Angel in the purported
Deed of Sale which was duly executed before a notary
public. Thus, the trial court held that the authenticity of
the document must be upheld under the doctrine of
presumption of regularity. It ruled, viz.:
WHEREFORE, proceeding from the foregoing facts
supported by evidence and jurisprudence on the
matter, this Court hereby renders judgment as follows:
1. Dismissing the complaint for lack of merit;
2. Ordering the plaintiffs to pay jointly and
solidarily the defendants the amount of
[P]20,000.00 as attorneys fees and
[P]20,000.00 as litigation expenses;
3. Ordering the plaintiffs to pay the costs of
suit.
SO ORDERED.14
Petitioners filed a Notice of Appeal before the CA in
Cagayan de Oro City, raising the issues on whether or
not the purported deed of sale is void and whether the
present action is barred by prescription. Petitioners
maintained that the purported Deed of Sale was
simulated and fictitious because the signature of their
father was forged. They emphasized that the deed was
never shown to them by the late spouses Demetrio and
Regina who, during their lifetime, could not have had
the financial capacity to make the purchase. As to the
issue of prescription, petitioners argued that their
cause of action is imprescriptible because it involves
the declaration of nullity of a forged document.
In its assailed Decision dated October 23, 2009, the
appellate court denied the appeal for lack of merit, viz.:
FOR THE REASONS STATED, the appealed Decision
dated 5 September 2006 of the Regional Trial Court,
Branch 5, Mati, Davao Oriental, is AFFIRMED in toto;
with costs against the plaintiffs appellants.
SO ORDERED.15
The CA ruled that the purported Deed of Sale appears
regular and valid on its face and petitioners failed to
present clear and convincing evidence to controvert
the presumption that it was issued with regularity, viz.:
Being duly notarized, it carries with it the presumption
of regularity, authenticity, and due execution. It has
been the consistent rule that without clear, convincing,
and morethan preponderant evidence to controvert,
the presumption of regularity, the evidentiary weight
conferred upon such public document with respect to
its execution, as well as the statements and the
authenticity of the signatures thereon, stand. x x x16
As to the allegation of forgery, the appellate court ruled
that while there may be some variance or difference
from the signatures affixed by Angel in the sales
application and the assailed Deed of Sale, "these
variances could not be considered per seas conclusive
proof that the signature in the
document in question [has] been forged."17 Further, the
CA found that petitioners themselves failed to present
strong, concrete, and conclusive proof that the subject
deed of sale was forged, viz.:
It is well settled in this jurisdiction that forgery cannot
be presumed; it must always be proved by clear,
positive and convincing evidence. Those who make the
allegation of forgery have the burden of proving it.
Unarguably, no examination of the alleged different
signatures was ever conducted in the instant case.
Plaintiff-appellant Josefina Liwagon Escausos allegation
to the effect that the signature found in the assailed
document is not the real and true signature of their
father will not suffice to overcome the positive value of
the notarized Deed of Sale dated 24 July 1972. x x x18
xxxx
In the case at bar, the Court cannot accept the
[petitioners] claim of forgery because there was no
witness (save for [petitioner] Josefina herself), much
less an expert witness, who testified to that effect.
Neither were appellants able to prove that Angel
Liwagon never appeared before Notary Public Alfredo
D. Abayon and acknowledged the deed to be his
voluntary and free act, a burden which was theirs to
discharge.19
Petitioners moved for reconsideration but the motion
was denied by the appellate court in its assailed
Resolution dated June 24, 2010. Hence, this petition
raising the following lone assignment of error:
WHETHER THE ALLEGED DEED OF SALE EXECUTED BY
ANGEL LIWAGON IN FAVOR OF REGINALIWAGON IN
1972 IS VALID.20
In the instant petition, petitioners argue that the
purported Deed of Sale is invalid and has no force and
effect. They contend that both the trial and appellate
courts overlooked three material circumstances of the
case. First, at the time Angel allegedly sold the subject
parcel of land to Regina on July 24, 1972, he was
merely an awardee of the said property. The said
property then remained part of the governments
disposable public land until the Deed of Absolute Sale
was issued in Angels name sometime only in 1974.
Petitioners conclude that when Angel sold the subject
land to Regina, he was not yet the owner of the land
therefore making the conveyance devoid of any force
and effect under the law.21 Second, even if the
purported Deed of Sale is a public document which
enjoys the presumption of regularity, petitioners argue
that "the court may validly determine forgery from its
own independent examination of the documentary
evidence at hand" and the trial judge can do so
"without resorting to experts, especially when the
question involved is mere handwriting similarity or
dissimilarity, which can be determined by a visual
comparison of specimen of the questioned signatures
with those of currently existing ones."22 Third,
petitioners argue that the fact that their brother
Demetrio, during his lifetime, never brought out the
existence of the Deed of Sale is a form of concealment
which is "an indication of guilt and fully supports the
position of the petitioners that the subject Deed of Sale
dated 24 July 1972 is fictitious."23
We deny the petition.
Both the trial and appellate courts correctly ruled in
favor of the due execution of the subject Deed of Sale
which was duly acknowledged and recorded by Atty.
Alfredo Abayon in his notarial registry. It is a rule in our
jurisdiction that the act of notarization by a notary
public converts a private document into a public
document, making it admissible in evidence without
further proof of its authenticity. By law, a notarial
document is entitled to full faith and credit upon its
face.24 It enjoys the presumption of regularity and is a
prima facieevidence of the facts statedtherein which
may only be overcome by evidence that is
clear,convincing and more than merely preponderant.
Without such evidence, the presumption must be
upheld.25
Petitioners failed to overcome this presumption.
In the case at bar, a single fact fatal to the cause of
petitioners is clear: that aside from the sole testimony
of petitioner Josefina that the signature appearing in
the assailed Deed of Saleis not that of her father, no
clear, positive and convincing evidence was shown to
corroborate such claim. The trial court correctly
appreciated the testimony of Josefina in its ruling on
the issue, viz.:
The plaintiffs in this case failed to overcome the
presumption of regularity. Josefina testified that the
signature affixed on top of the typewritten name of
Angel Liwagon is not the real and true signature of her
father Angel. The presentation of a copy of a sales
application is not enough to substantiate her claim that
the signature found on said application is the real and
true signature of her father Angel Liwagon. Plaintiff did
not present the notary public who notarized the Deed
of Sale or any witness to prove that the signature of
Angel appearing on the deed is not the true signature
of her father. x x x
xxxx
Plaintiff merely said in her testimony that the signature
in the Deed of Sale is not the signature of her father.
No other evidence was offered that would indubitably
show that [the] signatures appearing on the sales
application and deed of sale were written by two
different persons or that one of the signatures was
written or affixed by a person other than Angel
Liwagon.26
In the case of Tapuroc v. Loquellano Vda. de
Mende,27 petitioners similarly contended "that by
merely examining the signatures in the questioned
Deed of Sale and the genuine signatures of their
predecessors-ininterest in their Special Power of
Attorney, the glaring dissimilarities between the two
sets of signatures are immediately evident to support
their claim of forgery."28 We reiterated the rule in
Tapuroc that forgery cannot be presumed and it must
be proved by clear, positive and convincing evidence.
Its mere allegation is not evidence and the burden of
proof lies on the party alleging it.29 The Court held in
that case that the bare denial of therein petitioners
that their predecessors-in-interest signed the subject
Deed of Sale did not suffice to overcome the
presumption of regularity of notarized documents.
We quote the Courts explanation in the case of
Tapurocon the factors involved in the examination and
comparison of handwritings, viz.:
In Jimenez v. Commission on Ecumenical Mission and
Relations of the United Presbyterian Church in the USA,
the Court identified and explained the factors involved
in the examination and comparison of handwritings:
x x x [T]he authenticity of a questioned signature
cannot be determined solely upon its general
characteristics, similarities or dissimilarities with the
genuine signature. Dissimilarities as regards
spontaneity, rhythm, pressure of the pen, loops in the
strokes, signs of stops, shades, etc., that may be found
between the questioned signatures and the genuine
one are not decisive on the question of the formers
authenticity. The result of examinations of questioned
handwriting, even with the benefit of aid of experts and
scientific instruments, is, at best, inconclusive. There
are other factors that must be taken into consideration.
The position of the writer, the condition of the surface
on which the paper where the questioned signature is
written is placed, his state of mind, feelings and
nerves, and the kind of pen and/or paper used, play an
important role on the general appearance of the
signature. Unless, therefore, there is, in a given case,
absolute absence, or manifest dearth, of direct or
circumstantial competent evidence on the character of
the questioned handwriting, much weight should not
be given to characteristic similarities, or dissimilarities,
between that questioned handwriting and an authentic
one.30
Prescinding from the foregoing, the contention of
petitioners must fail that a "visual comparison" 31 of
Angels signatures in the purported Deed of Sale and in
his Application with the Bureau of Lands and Affidavit
would reveal "that the signature in the Deed of Sale
was not genuine."32 Not only did petitioners fail to
present clear, positive and convincing evidence to
overcome the presumption of regularity in favor of the
assailed document, they merely stated these two
sentences in this petition for review to support their
claim of forgery viaa visual comparison of two
signatures, viz.:
In the Application and Affidavit, the word "Liwagon" in
his signature is very legible and readable. On the other
hand, the word "Liwagon" in his signature appearing in
the Deed of Sale is not legible or clear.33
It bears noting and stressing that what petitioners call
for in the case at bar is a review of the facts: whether
ornot the signature of Angel was forged in the assailed
Deed of Sale making the deed fictitious and the sale
between Angel and Regina not valid. Such factual
question may not be elevated in a petition for review
on certiorari as clearly stated under Section 1, Rule 45
of the 1997 Rules of Civil Procedure, as amended, viz.:
SECTION 1. Filing of petition with Supreme Court. A
party desiring to appeal by certiorari from a judgment
or final order or resolution of the Court of Appeals, the
Sandiganbayan, the Regional Trial Court or other courts
whenever authorized by law, may file with the
Supreme Court a verified petition for review on
certiorari. The petition shall raise only questions of law
which must be distinctly set forth.
The Court defers and accords finality to the factual
findings of trial courts especially when such findings
are undisturbed by the appellate court, as in the case
at bar. This factual determination deserves great
weight and shall not be disturbed on appeal, save for
the most compelling reasons, such as when that
determination is clearly without evidentiary support or
when grave abuse of discretion has been
committed.34 It is not the function of this Court to
analyze and weigh all over again the evidence or
premises supportive of the factual holdings of lower
courts,35 or that would defeat the very essence of Rule
45 and would convert the Court into a trier of facts.36
All the more, the Court cannot be called on to decide
on an issue of fact which was never raised in the
Amended Complaint37 before the trial court which could
have had the opportunity to hearand to rule on the
evidence presented to support petitioners claim. It is
one of the instant arguments of petitioners that the
Deedof Absolute Sale over the subject property was
issued in the name of Angel only in 1974. Hence, when
Angel sold the subject land to Regina in 1972, he was
not yet the owner of the land making the conveyance
devoid of any force and effect under the law.
To be sure, the stated cause of action of petitioners for
the annulment of the subject Deed of Sale in their
Amended Complaint was anchored on forgery. Hence,
testimonial and documentary evidence were presented
and offered to the trial court to prove the existence of
such forgery. Petitioners cannot now allege a new
cause of action - in this petition for review - for
invalidating the subject D.eed of Sale by arguing that
when "Angel Liwagon sold the subject land to Regina
Liwagon, he was not yet the owner of the land x x x
and had no right to transfer or convey the property.38 x
x x Consequently, the conveyance xx x had no force
and effect."39 It is the trial court which has the
jurisdiction to hear and to try evidence that should
have been adduced by the parties as to whether Angel
neither had ownership nor authority to convey the
subject property to Regina.
The Court in the case of Calanasan v. Dolorito40 could
not have been more incisive in explaining the reason
for this rule, viz.:
The petitioner never raised this issue before the lower
courts. It can't be emphasized enough that the Court
will not revisit the evidence presented below as well as
any evidence introduced for the first time on appeal.
Aside from being a factual issue that is not proper for
the present action, the Court dismisses this new
argument for being procedurally infirm and violative of
due process. As we have held in the past: "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. Basic consideration
of due process impels this rule."41
Lastly, as to petitioners making an issue of the
circumstance that their brother Demetrio never
disclosed to them the existence of the purported Deed
of Sale, such "unexplained delay in disclosing the
alleged deed of sale"42 is not sufficient basis to declare
that the sale was fictitious and hence not valid. While
petitioners may consider it as concealment and as a
sign of guilt that the purported deed is fictitious, this
Court needs relevant, convincing and clear evidence -
and not mere unsubstantiated conjectures -especially
in this case where petitioners failed to discharge their
burden to prove on all points that the assailed Deed of
Sale was not valid.
WHEREFORE, in view of the foregoing, the petition is
DENIED. The assailed Decision and Resolution dated
October 23, 2009 and June 24, 2010, respectively, of
the Court of Appeals in Cagayan de Oro City in CAG.R.
CV No. 00965-MIN are AFFIRMED.
With costs against the petitioners.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No.197530 July 9, 2014
ABOITIZ EQUITY VENTURES, INC., Petitioner,
vs.
VICTOR S. CHIONGBIAN, BENJAMIN D. GOTHONG,
and CARLOS A. GOTHONG LINES, INC.
(CAGLI), Respondents.
DECISION
LEONEN, J.:
This is a petition for review on certiorari with an
application for the issuance of a temporary restraining
order and/or writ of preliminary injunction under Rule
45 of the Rules of Court. This petition prays that the
assailed orders dated May 5, 20111 and June 24,
20112 of the Regional Trial Court, Cebu City, Branch 10
in Civil Case No. CEB-37004 be nullified and set aside
and that judgment be rendered dismissing with
prejudice the complaint3dated July 20, 2010 filed by
respondents Carlos A. Gothong Lines, Inc. ("CAGLI")
and Benjamin D. Gothong. On January 8, 1996, Aboitiz
Shipping Corporation ("ASC"), principally owned by the
Aboitiz family, CAGLI, principally owned by the Gothong
family, and William Lines, Inc.("WLI"), principally owned
by the Chiongbian family, entered into anagreement
(the "Agreement"),4 whereby ASC and CAGLI would
transfer their shipping assets to WLI in exchange for
WLIs shares of stock.5 WLI, in turn, would run their
merged shipping businesses and, henceforth, be known
as WG&A, Inc. ("WG&A").6
Sec. 11.06 of the Agreement required all disputes
arising out of or in connection with the Agreement tobe
settled by arbitration:
11.06 Arbitration
All disputes arising out of or in connection with this
Agreement including any issue as to this Agreements
validity or enforceability, which cannot be settled
amicably among the parties, shall be finally settled by
arbitration in accordance with the Arbitration Law
(Republic Act No. 876) by an arbitration tribunal
composed of four (4) arbitrators. Each of the parties
shall appoint one (1) arbitrator, the three (3) to appoint
the fourth arbitrator who shall act as Chairman. Any
award by the arbitration tribunal shall be final and
binding upon the parties and shall be enforced by
judgment of the Courts of Cebu or Metro Manila.7
Among the attachments to the Agreement was Annex
SL-V.8 This was a letter dated January 8,1996, from WLI,
through its President (herein respondent) Victor S.
Chiongbian addressed to CAGLI, through its Chief
Executive Officer Bob D. Gothong and Executive Vice
President for Engineering (herein respondent) Benjamin
D. Gothong. On its second page, Annex SL-V bore the
signatures ofBob D. Gothong and respondent Benjamin
D. Gothong by way of a conforme on behalf of CAGLI.
Annex SL-V confirmed WLIs commitment to acquire
certain inventories of CAGLI. These inventories would
havea total aggregate value of, at most, P400 million,
"as determinedafter a special examination of the
[i]nventories."9Annex SL-V also specificallystated that
such acquisition was "pursuant to the Agreement."10
The entirety of Annex SL-Vs substantive portion reads:
We refer to the Agreement dated January 8, 1996 (the
"Agreement") among William Lines, Inc. ("Company
C"), Aboitiz Shipping Corporation ("Company A") and
Carlos A. Gothong Lines, Inc. ("Company B") regarding
the transfer of various assets of Company A and
Company B to Company C in exchangefor shares of
capital stock of Company C. Terms defined in the
Agreement are used herein as therein defined.
This will confirm our commitment to acquire certain
spare parts and materials inventory (the "Inventories")
of Company B pursuant to the Agreement.
The total aggregate value of the Inventories to be
acquired shall not exceed P400 Million as determined
after a special examination of the Inventories as
performed by SGV & Co. to be completed on or before
the Closing Date under the agreed procedures
determined by the parties.
Subject to documentation acceptable to both parties,
the Inventories to be acquired shall be determined not
later than thirty (30) days after the Closing Date and
the payments shall be made in equal quarterly
instalments over a period of two years with the first
payment due on March 31, 1996.11
Pursuant to Annex SL-V, inventories were transferred
from CAGLI to WLI. These inventories were assessed to
have a value of 514 million, which was later adjusted to
558.89 million.12 Of the total amount of 558.89 million,
"CAGLIwas paid the amount of 400 Million."13 In
addition to the payment of 400 million,petitioner
Aboitiz Equity Ventures ("AEV") noted that WG&A
shares with a book value of 38.5 million were
transferred to CAGLI.14
As there was still a balance, in2001, CAGLI sent WG&A
(the renamed WLI) demand letters "for the return of or
the payment for the excess [i]nventories."15 AEV
alleged that to satisfy CAGLIs demand, WLI/WG&A
returned inventories amounting to 120.04 million.16 As
proof of this, AEV attached copies of delivery receipts
signed by CAGLIs representatives as Annex "K" of the
present petition.17
Sometime in 2002, the Chiongbian and Gothong
families decided to leave the WG&A enterprise and sell
their interest in WG&A to the Aboitiz family. As such, a
share purchase agreement18 ("SPA") was entered into
by petitioner AEV and the respective shareholders
groups of the Chiongbians and Gothongs. In the SPA,
AEV agreedto purchase the Chiongbian group's 40.61%
share and the Gothong group's 20.66% share in
WG&As issued and outstanding stock.19
Section 6.5 of the SPA provided for arbitration as the
mode of settling any dispute arising from the SPA. It
reads:
6.5 Arbitration. Should there be any dispute arising
between the parties relating to this Agreement
including the interpretation or performance hereof
which cannot beresolved by agreement of the parties
within fifteen (15) days after written notice by a party
to another, such matter shall then be finally settled by
arbitration in Cebu City in accordance with the
Philippine Arbitration Law. Substantive aspects of the
dispute shall be settled by applying the laws of the
Philippines. The decision of the arbitrators shall be final
and binding upon the parties hereto and the expense
of arbitration (including without limitation the award of
attorneys fees to the prevailing party) shall be paid as
the arbitrators shall determine.20
Section 6.8 of the SPA further provided that the
Agreement (of January 8, 1996) shall be deemed
terminated except its Annex SL-V. It reads:
6.8 Termination of Shareholders Agreement. The Buyer
and the Sellers hereby agree that on Closing, the
Agreement among Aboitiz Shipping Corporation, Carlos
A. Gothong Lines, Inc. and William Lines, Inc. dated
January 8, 1996, as the same has been amended from
time to time (the "Shareholders Agreement") shall all
be considered terminated, except with respect to such
rights and obligations that the parties to the
Shareholders Agreement have under a letter dated
January 8, 1996 (otherwise known as "SL-V") from
William Lines, Inc. to Carlos A. Gothong Lines, Inc.
regarding certain spare parts and materials inventory,
which rights and obligations shall survive through the
date prescribed by the applicable statute of
limitations.21
As part of the SPA, the parties entered into an Escrow
Agreement22 whereby ING Bank N.V.-Manila Branch was
to take custody of the shares subject of the
SPA.23 Section 14.7 of the Escrow Agreement provided
that all disputes arising from it shall be settled through
arbitration:
14.7 All disputes, controversies or differences which
may arise by and among the parties hereto out of, or in
relation to, or in connection with this Agreement, orfor
the breach thereof shall be finally settled by arbitration
in Cebu City in accordance with the Philippine
Arbitration Law. The award rendered by the
arbitrator(s) shall be final and binding upon the parties
concerned. However, notwithstanding the foregoing
provision, the parties reserve the right to seek redress
before the regular court and avail of any provisional
remedies in the event of any misconduct, negligence,
fraud or tortuous acts which arise from any extra-
contractual conduct that affects the ability ofa party to
comply with his obligations and responsibilities under
this Agreement.24
As a result of the SPA, AEV became a stockholder of
WG&A. Subsequently, WG&A was renamed Aboitiz
Transport Shipping Corporation ("ATSC").25
Petitioner AEV alleged that in2008, CAGLI resumed
making demands despite having already received
120.04 million worth of excess inventories.26 CAGLI
initially made its demand to ATSC (the renamed
WLI/WG&A) through a letter27 dated February 14, 2008.
As alleged by AEV, however, CAGLI subsequently
resorted to a "shotgun approach"28 and directed its
subsequent demand letters to AEV29 as well as to
FCLC30 (a company related to respondent Chiongbian).
AEV responded to CAGLIs demands through several
letters.31 In these letters, AEV rebuffed CAGLI's
demands noting that: (1) CAGLI already received the
excess inventories;(2) it was not a party to CAGLI's
claim as it had a personality distinct from
WLI/WG&A/ATSC; and (3) CAGLI's claim was already
barred by prescription.
In a reply-letter32 dated May 5, 2008, CAGLI claimed
that it was unaware of the delivery to it of the excess
inventories and asked for copies of the corresponding
delivery receipts.33 CAGLI threatened that unless it
received proof of payment or return ofexcess
inventories having been made on or before March 31,
1996, it would pursue arbitration.34
In letters written for AEV (the first dated October 16,
2008 by Aboitiz and Company, Inc.s Associate General
Counsel Maria Cristina G. Gabutina35 and the second
dated October 27, 2008 by SyCip Salazar Hernandez
and Gatmaitan36), it was noted that the excess
inventories were delivered to GT Ferry
Warehouse.37 Attached to these letters were a listing
and/or samples38 of the corresponding delivery
receipts. In these letters it was also noted that the
amount of excess inventories delivered (120.04 million)
was actually in excess of the value of the supposedly
unreturned inventories (119.89 million).39 Thus, it was
pointed out that it was CAGLI which was liable to return
the difference between 120.04 million and 119.89
million.40 Its claims not having been satisfied, CAGLI
filed on November 6, 2008 the first of two applications
for arbitration ("first complaint")41 against respondent
Chiongbian, ATSC, ASC, and petitioner AEV, before the
Cebu City Regional Trial Court, Branch 20. The first
complaint was docketed as Civil Case No. CEB-34951.
In response, AEV filed a motion to dismiss42 dated
February 5, 2009. AEV argued that CAGLI failed to state
a cause of action as there was no agreement to
arbitrate between CAGLI and AEV.43 Specifically, AEV
pointed out that: (1) AEV was never a party to the
January 8, 1996 Agreement or to its Annex SL-V;44 (2)
while AEV is a party to the SPA and Escrow Agreement,
CAGLI's claim had no connection to either agreement;
(3) the unsigned and unexecuted SPA attached to the
complaint cannot be a source of any right to
arbitrate;45 and (4) CAGLI did not say how
WLI/WG&A/ATSC's obligation to return the excess
inventories can be charged to AEV.
On December 4, 2009, the Cebu City Regional Trial
Court, Branch 20 issued an order46 dismissing the first
complaint with respect to AEV. It sustained AEVs
assertion that there was no agreement binding AEV
and CAGLI to arbitrate CAGLIs claim.47 Whether by
motion for reconsideration, appeal or other means,
CAGLI did not contest this dismissal.
On February 26, 2010, the Cebu CityRegional Trial
Court, Branch 20 issued an order48 directing the parties
remaining in the first complaint (after the discharge of
AEV) to proceed with arbitration.
The February 26, 2010 order notwithstanding, CAGLI
filed a notice of dismissal49 dated July 8, 2010,
withdrawing the first complaint. In an order 50 dated
August 13, 2010, the Cebu City Regional Trial Court,
Branch 20 allowed this withdrawal.
ATSC (the renamed WLI/WG&A) filed a motion for
reconsideration51 dated September 20, 2010 to the
allowance of CAGLI's notice of dismissal. This motion
was denied in an order52 dated April 15, 2011.
On September 1, 2010, while the first complaint was
still pending (n.b., it was only on April 15, 2011 that the
Cebu City Regional Trial Court, Branch 20 denied
ATSCs motion for reconsideration assailing the
allowance of CAGLIs notice of disallowance), CAGLI,
now joined by respondent Benjamin D. Gothong, filed a
second application for arbitration ("second
complaint")53 before the Cebu City Regional Trial Court,
Branch 10. The second complaint was docketed as Civil
Case No. CEB-37004 and was also in view of the return
of the same excess inventories subject of the first
complaint.
On October 28, 2010, AEV filed a motion to
dismiss54 the second complaint on the following
grounds:55 (1) forum shopping; (2) failure to state a
cause of action; (3) res judicata; and (4) litis pendentia.
In the first of the two (2) assailed orders dated May 5,
2011,56 the Cebu City Regional Trial Court, Branch 10
denied AEV's motion to dismiss.
On the matter of litis pendentia, the Regional Trial
Court, Branch 10 noted that the first complaint was
dismissed with respect to AEV on December 4, 2009,
while the second complaint was filed on September 1,
2010. As such, the first complaint was no longer
pending at the time of the filing of the second
complaint.57 On the matter of res judicata, the trial
court noted that the dismissal without prejudice of the
first complaint "[left] the parties free to litigate the
matter in a subsequent action, as though the
dismiss[ed] action had not been commenced."58 It
added that since litis pendentia and res judicata did not
exist, CAGLI could not be charged with forum
shopping.59 On the matter of an agreement to arbitrate,
the Regional Trial Court, Branch 10 pointed to the SPA
as "clearly express[ing] the intention of the parties to
bring to arbitration process all disputes, if amicable
settlement fails."60 It further dismissed AEVs claim that
it was not a party to the SPA, as "already touching on
the merits of the case"61and therefore beyond its duty
"to determine if they should proceed to arbitration or
not."62
In the second assailed order63 dated June 24, 2011, the
Cebu City Regional Trial Court, Branch 10 deniedAEV's
motion for reconsideration.
Aggrieved, AEV filed the present petition. 64 AEV asserts
that the second complaint is barred by res judicata and
litis pendentia and that CAGLI engaged in blatant
forum shopping.65 It insists that it is not bound by an
agreement to arbitrate with CAGLI and that, even
assuming that it may be required to arbitrate, it is
being ordered to do so under terms that are
"manifestly contrary to the . . . agreements on which
CAGLI based its demand for arbitration."66
For resolution are the following issues:
I. Whether the complaint in Civil Case No. CEB-37004
constitutes forum shopping and/or is barred by res
judicata and/or litis pendentia
II. Whether petitioner, Aboitiz Equity Ventures, Inc., is
bound by an agreement to arbitrate with Carlos A.
Gothong Lines, Inc., with respect to the latters claims
for unreturned inventories delivered to William Lines,
Inc./WG&A, Inc./Aboitiz Transport System Corporation
AEV availed of the wrong
remedy in seeking relief from
this court
Before addressing the specific mattersraised by the
present petition, we emphasize that AEV is in error
inseeking relief from this court via a petition for review
on certiorari under Rule45 of the Rules of Court. As
such, we are well in a position to dismiss the present
petition outright. Nevertheless, as the actions of the
Cebu City Regional Trial Court, Branch 10 are tainted
with grave abuse of discretion amounting to lack or
excess of jurisdiction, this court treats the present Rule
45 petition as a Rule 65 petition and gives it due
course.
A petition for review on certiorari under Rule 45 is a
mode of appeal. This is eminently clear from the very
title and from the first section of Rule 45 (as amended
by A.M. No. 07-7-12-SC):
Rule 45
APPEAL BY CERTIORARITO THE SUPREME COURT
SECTION 1. Filing of petition with Supreme Court. A
party desiring to appeal by certiorarifrom a judgment,
final order or resolution of the Court of Appeals, the
Sandiganbayan, the Court of Tax Appeals, the Regional
Trial Court or other courts, whenever authorized by law,
may file with the Supreme Court a verified petition for
review on certiorari. The petition may include an
application for a writ of preliminary injunction or other
provisional remedies and shall raise only questions of
law, which must be distinctly set forth. The petitioner
may seek the same provisional remedies by verified
motion filed inthe same action or proceeding at any
time during its pendency. (Emphasis supplied)
Further, it is elementary that anappeal may only be
taken from a judgment or final order that completely
disposes of the case.67 As such, no appeal may be
taken from an interlocutory order68 (i.e., "one which
refers to something between the commencement and
end of the suit which decides some point or matter but
it is not the final decision of the whole controversy" 69).
As explained in Sime Darby Employees Association v.
NLRC,70 "[a]n interlocutory order is not appealable until
after the rendition of the judgment on the merits for a
contrary rule would delay the administration of justice
and unduly burden the courts."71
An order denying a motion to dismiss is interlocutory in
character. Hence, it may not be the subject of an
appeal. The interlocutory nature of an order denying a
motion to dismiss and the remedies for assailing such
an order were discussed in Douglas Lu Ym v. Nabua:72
An order denying a motion to dismiss is an
interlocutory order which neither terminates nor finally
disposes of a case, as it leaves something to be done
by the court before the case is finally decided on the
merits. As such, the general rule is that the denial of a
motion to dismiss cannot be questioned in a special
civil action for certiorariwhich is a remedy designed to
correct errors ofjurisdiction and not errors of judgment.
Neither can a denial of a motion todismiss be the
subject of an appeal unless and until a final judgment
or order is rendered.In order to justify the grant of the
extraordinary remedy of certiorari, the denial of the
motion to dismiss must have been tainted with grave
abuse of discretion amounting to lack or excess of
jurisdiction.73 (Emphasis supplied)
Thus, where a motion to dismiss is denied, the proper
recourse is for the movant to file an
answer.74Nevertheless, where the order denying the
motion to dismiss is tainted with grave abuse of
discretion amounting to lack or excess of jurisdiction,
the movant may assail such order via a Rule 65 (i.e.,
certiorari, prohibition, and/or mandamus) petition. This
is expressly recognized in the third paragraph of Rule
41, Section 1 of the Rules of Court.75 Following the
enumeration in the second paragraph of Rule 41,
Section 1 of the instances when an appeal may not be
taken, the third paragraph specifies that "[in] any of
the foregoing circumstances, the aggrieved party may
file an appropriate special civil action as provided in
Rule 65."76
Per these rules, AEV is in error for having filed what it
itself calls a "Petition for Review on Certiorari [Appeal
by Certiorari under Rule 45 of the Rules of
Court]."77 Since AEV availed of the improper remedy,
this court is well in a position to dismiss the present
petition.
Nevertheless, there have been instances when a
petition for review on certiorari under Rule 45 was
treated by this court as a petition for certiorari under
Rule 65. As explained in China Banking Corporation v.
Asian Construction and Development Corporation:78
[I]n many instances, the Court has treated a petition
for review on certiorariunder Rule 45 as a petition for
certiorari under Rule 65 of the Rules of Court, such as
in cases where the subject of the recourse was one of
jurisdiction, or the act complained of was perpetrated
by a court with grave abuse of discretion amounting to
lack or excess of jurisdiction.79
In this case, the May 5, 2011 and June 24, 2011 orders
of the Cebu City Regional Trial Court, Branch 10 in Civil
Case No. CEB-37004 are assailed for having denied
AEVs motion todismiss despite: first, the second
complaint having been filed in a manner constituting
forum shopping; second, the prior judgment on the
merits made in Civil Case No. CEB-34951, thereby
violating the principle ofres judicata; and third, the
(then) pendency of Civil Case No. CEB-34951 with
respect to the parties that, unlike AEV, were not
discharged from the case, thereby violating the
principle of litis pendentia. The same orders are
assailed for having allowed CAGLIs application for
arbitration to continue despite supposedly clear and
unmistakable evidence that AEV is not bound by an
agreement to arbitrate with CAGLI.
As such, the Cebu City, Regional Trial Court, Branch
10s orders are assailed for having been made with
grave abuse of discretion amounting to lack or excess
of jurisdiction in that the Cebu City Regional Trial Court,
Branch 10 chose to continue taking cognizance of the
second complaint, despite there being compelling
reasons for its dismissal and the Cebu City, Regional
Trial Court Branch 20s desistance. Conformably, we
treat the present petition as a petition for certiorari
under Rule 65 of the Rules of Court and give it due
course.
The complaint in Civil Case
No. CEB-37004 constitutes
forum shopping and is barred
by res judicata
The concept of and rationale against forum shopping
were explained by this court in Top Rate Construction &
General Services, Inc. v. Paxton Development
Corporation:80
FORUM SHOPPING is committed by a party who
institutes two or more suits in different courts, either
simultaneously or successively, in order to ask the
courts to rule on the same or related causes or to grant
the same or substantially the same reliefs, on the
supposition that one or the other court would make a
favorabledisposition or increase a party's chances of
obtaining a favorable decision or action. It is an act of
malpractice for it trifles with the courts, abuses their
processes, degrades the administration of justice and
adds to the already congested court dockets. What is
critical is the vexation brought upon the courts and the
litigants by a party who asks different courts to rule on
the same or related causes and grant the same or
substantially the same reliefs and in the process
creates the possibility of conflicting decisions being
rendered by the different fora upon the same issues,
regardless of whether the court in which one of the
suits was brought has no jurisdiction over the action. 81
Equally settled is the test for determining forum
shopping. As this court explained in Yap v. Chua:82
To determine whether a party violated the rule against
forum shopping, the most important factor toask is
whether the elements of litis pendentiaare present, or
whether a final judgment in one case will amount to res
judicatain another; otherwise stated, the test for
determining forum shopping is whether in the two (or
more) cases pending, there is identity of parties, rights
or causes of action, and reliefs sought.83
Litis pendentia "refers to that situation wherein another
action is pending between the same parties for the
same cause ofaction, such that the second action
becomes unnecessary and vexatious."84 It requires the
concurrence of three (3) requisites: "(1)the identity of
parties, or at least such as representing the same
interests in both actions; (2) the identity of rights
asserted and relief prayed for,the relief being founded
on the same facts; and (3) the identity of the two cases
such that judgment in one, regardless of which party
issuccessful, would amount tores judicatain the
other."85
In turn, prior judgment or res judicata bars a
subsequent case when the following requisites concur:
"(1) the former judgment is final; (2) it is rendered by a
court having jurisdiction over the subject matter and
the parties; (3) it is a judgment or an order on the
merits; (4) there is between the first and the second
actions identityof parties, of subject matter, and of
causes of action."86
Applying the cited concepts and requisites, we find that
the complaint in Civil Case No. CEB-37004 is barred
byres judicata and constitutes forum shopping.
First, between the first and second complaints, there is
identity of parties. The first complaint was brought by
CAGLI as the sole plaintiff against Victor S. Chiongbian,
ATSC, and AEV as defendants. In the second complaint,
CAGLI was joined by Benjamin D. Gothong as
(co-)plaintiff. As to the defendants, ATSC was deleted
while Chiongbian and AEV were retained.
While it is true that the parties to the first and second
complaints are not absolutely identical, this court has
clarified that, for purposes of forum shopping,
"[a]bsolute identity of parties is not required [and that
it] is enough that there is substantial identity of
parties."87
Even as the second complaint alleges that Benjamin D.
Gothong "is . . . suing in his personal
capacity,"88 Gothong failed to show any personal
interest in the reliefs sought by the second complaint.
Ultimately, what is at stake in the second complaint is
the extent to which CAGLI may compel AEV and
Chiongbian to arbitrate in order that CAGLI may then
recover the value of its alleged unreturned inventories.
This claim for recovery is pursuant to the agreement
evinced in Annex SL-V. Annex SL-V was entered into by
CAGLI and not by Benjamin D. Gothong. While it is true
that Benjamin D. Gothong, along with Bob D. Gothong,
signed Annex SL-V, he did so only in a representative,
and not in a personal, capacity. As such, Benjamin D.
Gothong cannot claim any right that personally accrues
to him on account of Annex SL-V. From this, it follows
that Benjamin D. Gothong is not a real party in interest
"one who stands to be benefitted or injured by the
judgment in the suit or the party entitled to the avails
of the suit"89 and that his inclusion in the second
complaint is an unnecessary superfluity.
Second, there is identity in subject matter and cause of
action. There is identity in subject matter as both
complaints are applications for the same relief. There is
identity in cause ofaction as both complaints are
grounded on the right to be paid for or to receive the
value of excess inventories (and the supposed
corresponding breach thereof) as spelled out in Annex
SL-V.
The first and second complaints are both applications
for arbitration and are founded on the same instrument
Annex SL-V. Moreover, the intended arbitrations in
both complaintscater to the sameultimate purpose, i.e.,
that CAGLI may recover the value of its supposedly
unreturned inventories earlier delivered to
WLI/WG&A/ATSC.
In both complaints, the supposedpropriety of
compelling the defendants to submit themselves to
arbitration are anchored on the same bases: (1)
Section 6.8 of the SPA, which provides that the January
8, 1996 Agreement shall be deemed terminatedbut
that the rights and obligations arising from Annex SL-V
shall continue to subsist;90(2) Section 6.5 of the SPA,
which requires arbitration as the mode for settling
disputes relating to the SPA;91 and, (3) defendants
refusal to submit themselves to arbitration vis-a-vis
Republic Act No. 876, which provides that "[a] party
aggrieved by the failure, neglect or refusal of another
to perform under an agreement in writing providing for
arbitration may petition the court for an order directing
that such arbitration proceed in the manner provided
for in such agreement."92
Both complaints also rely on the same factual
averments:93
1. that ASC, CAGLI, and WLI entered into an
agreement on January 8, 1996;
2. that under Annex SL-V of the Agreement,
WLI/WG&A "committed to acquire certain
[inventories], the total aggregate value of
which shall not exceed P400 Million";94
 3. that after examination, it was ascertained
that the value of the transferred inventories
exceeded P400 million;
4. that pursuant to Annex SL-V, WG&A paid
CAGLI P400 million but that the former failed to
return or pay for spare parts representing a
value in excess of P400 million;
5. "[t]hat on August 31, 2001, [CAGLI] wrote
the WG&A through its AVP Materials
Management, Ms. Concepcion M. Magat, asking
for the return of the excess spare parts";95
6. that on September 5, 2001, WG&As Ms.
Magat replied that the matter is beyond her
authority level and that she must elevate it to
higher management;
7. that several communications demanding the
return of the excess spare parts were sent to
WG&Abut these did not elicit any response;
and
8. "[t]hat the issue of excess spare parts, was
taken over by events, when on July 31,
2002,"96 the Chiongbians and Gothongs
entered into an Escrow Agreement with AEV.
Third, the order dated December 4, 2009 of the Cebu
City Regional Trial Court, Branch 20, which dismissed
the first complaint with respect to AEV, attained finality
when CAGLI did not file a motion for reconsideration,
appealed, or, in any other manner, questioned the
order.
Fourth, the parties did not dispute that the December
4, 2009 order was issued by a court having jurisdiction
over the subject matter and the parties. Specifically as
to jurisdiction over the parties,jurisdiction was acquired
over CAGLI as plaintiff when it filed the first complaint
and sought relief from the Cebu City Regional Trial
Court, Branch 20; jurisdiction over defendants AEV,
ATSC, and Victor S.Chiongbian was acquired with the
service of summons upon them. Fifth, the dismissal of
the first complaint with respect to AEV was a judgment
on the merits. As explained in Cabreza, Jr. v. Cabreza:97
A judgment may be considered as one rendered on the
merits "when it determines the rights and liabilities of
the parties based on the disclosed facts, irrespective of
formal, technical or dilatoryobjections"; or when the
judgment is rendered "aftera determination of which
party is right, as distinguished from a judgment
rendered upon some preliminary or formal or merely
technical point."98
Further, as this court clarified in Mendiola v. Court of
Appeals,99 "[i]t is not necessary . . . that there [be] a
trial"100in order that a judgment be considered as one
on the merits.
Prior to issuing the December 4, 2009 order dismissing
the first complaint with respect to AEV, the Cebu City
Regional Trial Court, Branch 20 allowed the parties the
full opportunity to establish the facts and to ventilate
their arguments relevant to the complaint. Specifically,
the Cebu City Regional Trial Court, Branch 20 admitted:
1) AEVs motion to dismiss;101 2) CAGLIs opposition to
the motion to dismiss;102 3) AEVs reply and
opposition;103 4) CAGLIs rejoinder;104 and 5) AEVs
surrejoinder.105
Following these, the Cebu City Regional Trial Court,
Branch 20 arrived at the following findings and made a
definitive determination that CAGLI had no right to
compel AEV to subject itself to arbitration with respect
to CAGLIs claims under Annex SL-V:
After going over carefully the contentions and
arguments of both parties, the court has found that no
contract or document exists binding CAGLI and AEV to
arbitrate the formers claim. The WLI Letter upon which
the claim is based confirms only the commitment of
William Lines, Inc. (WLI) to purchase certain material
inventories from CAGLI. It does not involve AEV. The
court has searched in vain for any agreement or
document showing that said commitment was passed
on to and assumed by AEV. Such agreement or
document, if one exists, being an actionable document,
should have been attached to the complaint. While the
Agreement of January 8, 1996 and the Share Purchase
Agreement provide for arbitration of disputes, they
refer to disputes arising from or in connection with the
Agreements themselves. No reference is made, as
included therein, to the aforesaid commitment of WLI
or to any claim that CAGLI may pursue based thereon
or relative thereto. Section 6.8 of the Share Purchase
Agreement, cited by plaintiff CAGLI, does not
incorporate therein, expressly or impliedly, the WLI
commitment above-mentioned. It only declares that
the rights and obligations of the parties under the WLI
Letter shall survive even after the termination of the
Shareholders Agreement. It does not speak of
arbitration. Finally, the complaint does not allege the
existence of a contract obliging CAGLI and AEV to
arbitrate CAGLIs claim under the WLI Letter.
Consequently, there is no legal or factual basis for the
present complaint for application for
arbitration.106 (Emphasis supplied)
In the assailed order dated May 5, 2011, the Cebu City
Regional Trial Court, Branch 10 made much of the Cebu
City Regional Trial Court, Branch 20s pronouncement
in the latters December 4, 2009 order that "the [first]
complaint fails to state a cause of action."107 Based on
this, the Cebu City Regional Trial Court, Branch 10
concluded that the dismissal of the first complaint was
one made without prejudice, thereby "leav[ing] the
parties free to litigate the matter ina subsequent
action, as though the dismissal [sic] action had not
been commenced."108
The Cebu City Regional Trial Court, Branch 10 is in
serious error. In holding that the second complaint was
not barred by res judicata, the Cebu City Regional Trial
Court, Branch 10 ignored established jurisprudence.
Referring to the earlier cases of Manalo v. Court of
Appeals109 and Mendiola v. Court of Appeals,110 this
court emphasized in Luzon Development Bank v.
Conquilla111 that dismissal for failure to state a cause of
action may very well be considered a judgment on the
merits and, thereby, operate as res judicata on a
subsequent case:
[E]ven a dismissal on the ground of "failure to state a
cause of action" may operate as res judicata on a
subsequent case involving the same parties, subject
matter, and causes of action, provided that the order of
dismissalactually ruled on the issues raised.What
appears to be essential to a judgment on the merits is
that it be a reasoned decision, which clearly states the
facts and the law on which it is based.112 (Emphasis
supplied)
To reiterate, the Cebu City Regional Trial Court, Branch
20 made a definitive determination that CAGLI had no
right to compel AEV to subject itself to arbitrationvis-a-
vis CAGLIs claims under Annex SL-V. This
determination was arrived at after due consideration of
the facts established and the arguments advancedby
the parties. Accordingly, the Cebu City Regional Trial
Court, Branch 20s December 4, 2009 order constituted
a judgment on the merits and operated as res judicata
on the second complaint.
In sum, the requisites for res judicata have been
satisfied and the second complaint should, thus, have
been dismissed. From this, it follows that CAGLI
committed an act of forum shopping in filing the
second complaint. CAGLI instituted two suits in two
regional trial court branches, albeit successively and
not simultaneously. It asked both branches to rule on
the exact same cause and to grant the exact same
relief. CAGLI did so after it had obtained an unfavorable
decision (at least with respect to AEV) from the Cebu
City Regional Trial Court, Branch 20. These
circumstances afford the reasonable inference that the
second complaint was filed in the hopes of a more
favorable ruling.
Notwithstanding our pronouncements sustaining AEVs
allegations that CAGLI engaged in forum shopping and
that the second complaint was barred by res judicata,
we find that at the time of the filing of the second
complaint, AEV had already been discharged from the
proceedings relating to the first complaint. Thus,
asbetween AEV and CAGLI, the first complaint was no
longer pending at the time of the filing of the second
complaint. Accordingly, the second complaint could not
have been barred by litis pendentia.
There is no agreement
binding AEV to arbitrate
with CAGLI on the latters
claims arising from Annex SL-V
For arbitration to be proper, it is imperative thatit be
grounded on an agreement between the parties. This
was adequately explained in Ormoc Sugarcane
Planters Association,Inc. v. Court of Appeals:113
Section 2 of R.A. No. 876 (the Arbitration Law)
pertinently provides:
Sec. 2. Persons and matterssubject to arbitration. Two
or more persons or parties may submit to the
arbitration of one or more arbitrators any controversy
existing between them at the time of the submission
and which may be the subject of an action, or the
parties to any contract may in such contract agree to
settle by arbitration a controversy thereafter arising
between them. Such submission or contract shall be
valid, enforceable and irrevocable, save upon such
grounds as exist at law for the revocation of any
contract. . . . (Emphasis ours)
The foregoing provision speaks of two modes of
arbitration: (a) an agreement to submit to arbitration
somefuture dispute, usually stipulated upon in a civil
contract between the parties, and known as an
agreement to submit to arbitration, and (b) an
agreement submitting an existing matter of difference
to arbitrators, termed the submission agreement.
Article XX of the milling contract is an agreement to
submit to arbitrationbecause it was made in
anticipation of a dispute that might arise between the
parties after the contracts execution.
Except where a compulsory arbitration is provided by
statute, the first step toward the settlement of a
difference by arbitration is the entry by the parties into
a valid agreement to arbitrate.An agreement to
arbitrate is a contract, the relation ofthe parties is
contractual, and the rights and liabilities of the parties
are controlled by the law of contracts. In an agreement
for arbitration, the ordinary elements of a valid
contract must appear, including an agreement
toarbitrate some specific thing, and an agreement to
abide by the award, either in express language or by
implication.114 (Emphasis supplied)
In this petition, not one of the parties AEV, CAGLI,
Victor S. Chiongbian, and Benjamin D. Gothong has
alleged and/or shown that the controversy is properly
the subject of "compulsory arbitration [as] provided by
statute."115 Thus, the propriety of compelling AEV to
submit itself to arbitration must necessarilybe founded
on contract.
Four (4) distinct contracts have been cited in the
present petition:
1. The January 8, 1996 Agreement in which
ASC, CAGLI, and WLI merged their shipping
enterprises, with WLI (subsequently renamed
WG&A) as the surviving entity. Section 11.06 of
this Agreement provided for arbitration as the
mechanism for settling all disputes arising out
of or in connection with the Agreement.
2. Annex SL-V of the Agreement between CAGLI
and WLI (and excluded ASC and any other
Aboitiz-controlled entity), and which confirmed
WLIs commitment to acquire certain
inventories, worth not more than 400 million, of
CAGLI. Annex SL-V stated that the acquisition
was "pursuant to the Agreement."116 It did not
contain an arbitration clause.
3. The September 23, 2003 Share Purchase
Agreement or SPA in which AEV agreed to
purchasethe Chiongbian and Gothong groups'
shares in WG&As issued and outstanding
stock. Section 6.5 of the SPA provided for
arbitration as the mode of settling any dispute
arising from the SPA. Section 6.8 of the SPA
further provided that the Agreement of January
8, 1996 shall be deemed terminatedexcept its
Annex SL-V.
4. The Escrow Agreement whereby ING Bank
N.V.-Manila Branch was to take custody of the
shares subject of the SPA. Section 14.7 of the
Escrow Agreement provided that all disputes
arising from it shall be settled via arbitration.
The obligation for WLI to acquire certain inventories of
CAGLI and which is the subject of the present petition
was contained in Annex SL-V. It is therefore this
agreement which deserves foremost consideration. As
to this particular agreement, these points must be
underscored: first, that it has no arbitration clause;
second, Annex SL-V is only between WLI and CAGLI.
On the first point, it is clear, pursuant to this courts
pronouncements in Ormoc Sugarcane Planters
Association, that neither WLI nor CAGLI can compel
arbitration under Annex SL-V. Plainly, there is no
agreement to arbitrate.
It is of no moment that Annex SL-Vstates that it was
made "pursuant to the Agreement" or that Section
11.06 of the January 8, 1996 Agreement provides for
arbitration as the mode of settling disputes arising out
of or in connection with the Agreement.
For one, to say that Annex SL-V was made"pursuant to
the Agreement" is merely to acknowledge: (1) the
factual context in which Annex SL-V was executed and
(2) that it was that context that facilitated the
agreement embodied in it. Absentany other clear or
unequivocal pronouncement integrating Annex SL-V
into the January 8, 1996 Agreement, it would be too
much of a conjecture to jump to the conclusion that
Annex SL-V is governed by the exact same stipulations
which govern the January 8, 1996 Agreement.
Likewise, a reading of the Agreements arbitration
clause will reveal that it does not contemplate disputes
arising from Annex SL-V.
Section 11.06 of the January 8, 1996 Agreement
requires the formation of an arbitration tribunal
composed of four (4) arbitrators. Each of the parties
WLI, CAGLI, and ASC shall appoint one (1) arbitrator,
and the fourth arbitrator, who shall actas chairman,
shall be appointed by the three (3) arbitrators
appointed by the parties. From the manner by which
the arbitration tribunal is to be constituted, the
necessary implication is that the arbitration clause is
applicable tothree-party disputes as will arise from
the tripartite January 8, 1996 Agreement and not to
two-party disputesas will arise from the two-party
Annex SL-V.
From the second point that Annex SL-V is only
between WLI and CAGLI it necessarily follows that
none but WLI/WG&A/ATSC and CAGLI are bound by the
terms of Annex SL-V. It is elementary that contracts are
characterized by relativity or privity, that is, that
"[c]ontracts take effect only between the parties, their
assigns and heirs."117 As such, one who is not a party to
a contract may not seek relief for such contracts
breach. Likewise, one who is not a party to a contract
may not be held liable for breach of any its terms.
While the principle of privity or relativity of contracts
acknowledges that contractual obligations are
transmissible to a partys assigns and heirs, AEV is not
WLIs successor-in-interest. In the period relevant to
this petition, the transferee of the inventories
transferred by CAGLI pursuant to Annex SL-V assumed
three (3) names: (1) WLI, the original name of the
entity that survived the merger under the January 8,
1996 Agreement; (2) WG&A, the name taken by WLI in
the wake of the Agreement; and (3) ATSC, the name
taken by WLI/WG&A inthe wake of the SPA. As such, it
is now ATSC that is liable under Annex SL-V.
Pursuant to the January 8, 1996 Agreement, the Aboitiz
group (via ASC) and the Gothong group (viaCAGLI)
became stockholders of WLI/WG&A, along with the
Chiongbiangroup (which initially controlled WLI). This
continued until, pursuant to the SPA, the Gothong
group and the Chiongbian group transferred their
shares to AEV. With the SPA, AEV became a stockholder
of WLI/WG&A, which was subsequently renamed ATSC.
Nonetheless, AEVs status asATSCs stockholder does
not subject it to ATSCs obligations
It is basic that a corporation has a personality separate
and distinct from that of its individual stockholders.
Thus, a stockholder does not automatically assume the
liabilities of the corporation of which he is a
stockholder. As explained in Philippine National Bankv.
Hydro Resources Contractors Corporation:118
A corporation is an artificial entitycreated by operation
of law. It possesses the right of succession and such
powers, attributes, and properties expressly authorized
by law or incident to its existence. It has a personality
separate and distinct from that of its stockholders and
from that of other corporations to which it may be
connected. As a consequence of its status as a distinct
legal entityand as a result of a conscious policy
decision to promote capital formation, a corporation
incurs its own liabilities and is legally responsible for
payment of its obligations. In other words, by virtue of
the separate juridical personality ofa corporation, the
corporate debt or credit is not the debt or credit of the
stockholder. This protection from liability for
shareholders is the principle of limited liability. 119
In fact, even the ownership by a single stockholder of
all or nearly all the capital stock of a corporation is not,
in and of itself, a ground for disregarding a
corporations separate personality. As explained in
Secosa v. Heirs of Francisco:120
It is a settled precept in this jurisdiction that a
corporation is invested by law with a personality
separate from thatof its stockholders or members. It
has a personality separate and distinct from those of
the persons composing it as well as from that of any
other entity to which it may be related. Mere ownership
by a single stockholder or by another corporation of all
or nearly all of the capital stock of a corporation is not
in itself sufficient ground for disregarding the separate
corporate personality.A corporations authority to act
and its liability for its actions are separate and apart
from the individuals who own it.
The so-called veil of corporation fiction treats as
separate and distinct the affairs of a corporation and its
officers and stockholders. As a general rule, a
corporation will be looked upon as a legal entity, unless
and until sufficient reason to the contrary appears.
When the notion of legal entity is used to defeat public
convenience, justify wrong, protect fraud, or defend
crime, the law will regard the corporation as an
association of persons. Also, the corporate entity may
be disregarded in the interest of justice in such cases
asfraud that may work inequities among members of
the corporation internally, involving no rights of the
public or third persons. In both instances, there must
have been fraud and proof of it. For the separate
juridical personality of a corporation to be disregarded,
the wrongdoing must be clearly and convincingly
established. It cannot be presumed.121 (Emphasis
supplied)
AEVs status as ATSCs stockholder is, in and of itself,
insufficient to make AEV liable for ATSCs obligations.
Moreover, the SPA does not contain any stipulation
which makes AEV assume ATSCs obligations. It is true
that Section 6.8 of the SPA stipulates that the rights
and obligations arising from Annex SL-V are not
terminated. But all that Section 6.8 does is recognize
that the obligations under Annex SL-V subsist despite
the termination of the January 8, 1996 Agreement. At
no point does the text of Section 6.8 support the
position that AEV steps into the shoes of the obligor
under Annex SL-V and assumes its obligations.
Neither does Section 6.5 of the SPAsuffice to compel
AEV to submit itself to arbitration. While it is true that
Section 6.5 mandates arbitration as the mode for
settling disputes between the parties to the SPA,
Section 6.5 does not indiscriminatelycover any and all
disputes which may arise between the parties to the
SPA. Rather, Section 6.5 is limited to "dispute[s] arising
between the parties relating tothis Agreement [i.e., the
SPA]."122 To belabor the point, the obligation which is
subject of the present dispute pertains to Annex SL-V,
not to the SPA. That the SPA, in Section 6.8, recognizes
the subsistence of Annex SL-Vis merely a factual
recognition. It does not create new obligations and
does not alter or modify the obligations spelled out in
Annex SL-V.
AEV was drawn into the present controversy on
account of its having entered into the SPA. This SPA
made AEV a stockholder of WLI/WG&A/ATSC. Even
then, AEV retained a personality separate and distinct
from WLI/WG&A/ATSC. The SPA did not render AEV
personally liable for the obligations of the corporation
whose stocks it held.
The obligation animating CAGLIs desire to arbitrate is
rooted in Annex SL-V. Annex SL-V is a contractentirely
different from the SPA. It created distinct obligations for
distinctparties. AEV was never a party to Annex SL-V.
Rather than pertaining to AEV, Annex SL-V pertained to
a different entity: WLI (renamed WG&A then renamed
ATSC). AEV is, thus, not bound by Annex SL-V.
On one hand, Annex SL-V does not stipulate that
disputes arising from it are to be settled via
arbitration.On the other hand, the SPA requires
arbitration as the mode for settling disputes relating to
it and recognizes the subsistence of the obligations
under Annex SL-V. But as a separate contract, the mere
mention of Annex SL-V in the SPA does not suffice to
place Annex SL-V under the ambit of the SPA or to
render it subject to the SPAs terms, such as the
requirement to arbitrate.
WHEREFORE, the petition is GRANTED. The assailed
orders dated May 5, 2011 and June 24,2011 of the
Regional Trial Court, Cebu City, Branch 10 in Civil Case
No. CEB-37004 are declared VOID. The Regional Trial
Court, Cebu City, Branch 10 is ordered to DISMISSCivil
Case No. CEB-37004.
SO ORDERED.
THIRD DIVISION
G.R. No. 166923, November 26, 2014
PHILIPPINE MIGRANTS RIGHTS WATCH, INC., ON
ITS OWN BEHALF AND ON BEHALF OF ITS
MEMBER-OVERSEAS FILIPINO WORKERS, JESUS
REYES AND RODOLFO
MACOROL, Petitioners, v. OVERSEAS WORKERS
WELFARE ADMINISTRATION AND ITS BOARD OF
TRUSTEES COMPOSED OF HON. PATRICIA A. STO.
TOMAS, VIRGILIO R. ANGELO, MANUEL G. IMSON,
THE SECRETARY OF FOREIGN AFFAIRS,
REPRESENTED BY UNDERSECRETARY JOSE S.
BRILLANTES, ROSALINDA BALDOZ, THE
SECRETARY OF BUDGET AND MANAGEMENT,
REPRESENTED BY ASSISTANT SECRETARY
EDUARDO P. OPIDA, MINA C. FIGUEROA,
VICTORINO F. BALAIS, CAROLINE R. ROGGE,
GREGORIO S. OCA, CORAZON P. CARSOLA AND
VIRGINIA J. PASALO, Respondents.
DECISION
PERALTA, J.:
Before the Court is a petition for review under Rule 45
of the Rules of Court seeking to reverse and set aside
the Orders dated August 31, 20041 and January 14,
20052 of the Regional Trial Court (RTC) of Pasay City,
Branch CXI (111), in Civil Case No. 04-0077 dismissing
the same for lack of jurisdiction.
The antecedent facts are as
follows:chanroblesvirtuallawlibrary
On September 19, 2003, respondent Overseas Workers
Welfare Administration (OWWA) issued Board
Resolution No. 0383 entitled the OWWA Omnibus
Policies to provide guidelines on matters concerning
OWWA membership and its coverage, collection of
contributions, and availment of benefits.
On February 18, 2004, petitioners Philippine Migrants
Rights Watch, Inc., on behalf of its member-overseas
Filipino workers, together with Jesus P. Reyes and
Rodolfo B. Macorol, returned overseas Filipino workers,
filed a Complaint4 before the RTC of Pasay City seeking
to annul the Omnibus Policies, specifically Sections 4,
5, 6, 7, and 8 of Article II, Sections 5(C) (H) of Article III,
and Articles IV, V, VI, VII,VIII, the pertinent portions of
which provide:
Article II
OWWA Mandate
xxxx
Section 7. Clientele. The clients of OWWA are its
member-OFWs.
Article III
Organization and Management
xxxx
Section 5. Board Proceedings. The Board proceedings
shall be guided by the following
rules:chanroblesvirtuallawlibrary
xxxx
c.) Attendance of Proxies. The Board members may
designate their permanent alternate in writing
subject to the acceptance of the Board. The designated
alternate shall have voting rights. His decision shall be
deemed the decision of his principal.
The Alternate cannot further delegate such
representation. However, in the event that the member
and his permanent alternate are absent, any
representative sent shall be on observer
status.cralawred
xxxx
h.) Records Management and Archiving of Board
Documents. The Board Secretary shall ensure a
thorough recording of all proceedings during a Board
meeting. The minutes of the previous meeting shall be
made available for approval during the scheduled
Board Meeting. The Minutes of the Meeting shall
basically contain the attendance, business arising from
the minutes, major agreements reached, corresponding
resolutions, and other items noted or discussed, and
instructions issued by the Board. All minutes, tapes,
and other documents pertaining to the business of the
Board shall be kept and archived pursuant to standard
records management systems and procedures. The
minutes, transcripts and tapes are classified
confidential and are not for public circulation
unless otherwise authorized by the
Board/Administrator.
Article IV
MEMBERSHIP
Section 1. Membership. Membership in OWWA may be
obtained in two ways:
(a) By enrollment upon processing of contract at
the POEA; and
(b) By voluntary registration of OFWs at job-sites
overseas.
Section 2. Proof of Membership. All members shall
be issued Official Receipt upon payment of
contribution. They shall likewise be issued an
OWWA E-Card.
POEA and OWWA are required to maintain
database of member-OFWs and to update this
regularly.
Section 3. Effectivity of Membership. OWWA
membership, either through the compulsory or
voluntary coverages, shall be effective upon
payment of membership contribution until
expiration of the employment contract.
In case of voluntary members who register on-
site, membership coverage shall not exceed two
(2) years.
Section 4. Renewal of Membership. Membership shall
be renewed upon payment of contribution on
contract renewal/issuance of new contract. In
the case of voluntary membership, coverage
shall be renewed upon payment of contribution.
Article V
COLLECTION POLICY
Section 1. Legal Basis for Collection of Membership
Contribution. Letter of Instructions (LOI) No. 537
mandates the compulsory payment of OWWA
membership contribution in the amount of
US$25.00 or its equivalent.
xxxx
Section 3. Frequency of Membership Collection. The
membership contribution shall be collected on a
per contract basis.
xxxx
Article VIII
BENEFITS AND SERVICES
Section 1. Guiding Principle. In pursuance of its
mandate, it shall deliver social insurance benefits, loan
assistance, education and training, social services and
family welfare assistance subject to the qualification
requirements and availability of OWWA funds. All
benefits and services shall be over and above the
provisions of the employment contract, offer of
employers, or the laws of the receiving country.
Section 2. Benefits and Services for OWWA
Members. For a US$25.00 membership contribution,
an OWWA member shall be entitled to the following
benefits and services: x x x5
According to petitioners, respondents acted with grave
abuse of discretion amounting to lack or excess of
jurisdiction in issuing the Omnibus Policies, the
provisions of which are contrary to the Constitution and
its enabling laws. Petitioners alleged that the OWWA
was created by law to provide welfare services to all
Filipino overseas contract workers, without limiting the
same to member-contributors only. However, because
of the passage of the Omnibus Policies, the OWWA
benefits shall be available only to those overseas
contract workers who have paid their monetary
contribution on a per contract basis. It imposed on the
overseas workers the compulsory payment of OWWA
membership contribution in the amount of US$25.00,
which was originally collected from their employers.
This, petitioners contend, is violative of the Equal
Protection Clause of the Constitution for it created a
distinction between Filipino overseas workers who
contributed to the OWWA Fund and those who have
not. Moreover, petitioners likewise assailed as invalid
the provisions which allow the OWWA Board members
to designate their proxies to vote in their stead in the
Board meetings as well as those which classify the
minutes, transcripts, and other documents of the
OWWA as confidential and cannot be publicly circulated
without authorization from the Board.
Respondents countered that the assailed Omnibus
Policies do not violate the equal protection clause for
the same is germane to the purpose of the law, which
requires registration and documentation of overseas
workers for their protections from exploitation in
foreign countries. Moreover, the prescribed
membership fees chargeable to the employers had
long been implemented pursuant to Letter of
Instructions (LOI) No. 537 signed by then President
Ferdinand E. Marcos on May 1, 1977, which was
formalized by the issuance of Presidential Decree (PD)
No. 1694 on May 1, 1980, as amended by PD No. 1809
issued on January 16, 1981, creating the Welfare Fund
for Overseas Workers (hereinafter referred to as the
Welfund). According to respondents, these issuances
expressly instructed the collection of fees for the
promotion of Filipino overseas workers interests.
Hence, there was no undue implementation of the law.
Furthermore, the Omnibus Policies do not violate
petitioners right to free access to information as the
approved minutes and official resolutions of the OWWA
were made available upon legitimate request by the
public, pursuant to OWWA Resolution No. 006, Series of
2004.
On August 31, 2004, the RTC promulgated its Order
dismissing the complaint for lack of jurisdiction.
According to the lower court, the determination of
constitutionality of the assailed resolution rests, not
within its jurisdiction, but within the jurisdiction of this
Court. As such, it ruled that the appropriate remedy to
annul and set aside the subject issuance was a special
civil action for certiorari under Rule 65 of the Rules of
Court. Thus, for reasons of law, comity and
convenience, the lower court held that it could not
arrogate unto itself the authority to resolve the
constitutionality of the administrative act.
On February 18, 2005, petitioners filed the instant
petition essentially invoking the following argument:
I.
THE REGIONAL TRIAL COURT COMMITTED REVERSIBLE
ERROR OF LAW IN DISMISSING CIVIL CASE NO. 04-0077
ON THE GROUND OF LACK OF JURISDICTION FOR
REGIONAL TRIAL COURTS HAVE ORIGINAL
JURISDICTION TO HEAR AND DECIDE CASES INVOLVING
THE CONSTITUTIONALITY OR VALIDITY OF
ADMINISTRATIVE RULES AND REGULATIONS.
Petitioners fault the RTC for abruptly dismissing their
complaint for lack of jurisdiction when it is well
established in law and jurisprudence that Regional Trial
Courts have jurisdiction over cases involving the
constitutionality or legality of administrative rules and
regulations, such as the Omnibus Policies promulgated
by respondents herein. The reliance on our ruling
in Fortich v. Corona, petitioners posit, is misplaced for
the same involves a resolution issued by the Office of
the President in the exercise of its quasi-
judicial functions. Hence, the special civil action
for certiorari under Rule 65 of the Rules of Court is not
the appropriate remedy in the instant case.
In their Comment, respondents counter that
petitioners, in filing the instant action with this Court,
committed serious procedural error for violating the
doctrine of judicial hierarchy of courts. According to
respondents, petitioners should have first filed an
appeal before the Court of Appeals (CA), pursuant to
Section 2(a), Rule 41 of the Rules of
Court.6 Respondents further reiterated the validity of
the subject Omnibus Policies.
We rule in favor of petitioners.
Section 2(c), Rule 41 of the Rules of Court provides that
the mode of appeal in all cases involving only
questions of law shall be by petition for review
on certiorari to the Supreme Court in accordance with
Rule 45.7chanrobleslaw
Time and again, this Court has distinguished cases
involving pure questions of law from those of pure
questions of fact in the following manner:
A question of fact exists when a doubt or difference
arises as to the truth or falsity of alleged facts. If the
query requires a re-evaluation of the credibility of
witnesses or the existence or relevance of surrounding
circumstances and their relation to each other, the
issue in that query is factual. On the other hand, there
is a question of law when the doubt or difference arises
as to what the law is on certain state of facts and which
does not call for an existence of the probative value of
the evidence presented by the parties-litigants. In a
case involving a question of law, the resolution of the
issue rests solely on what the law provides on the
given set of circumstances.8
In the present petition, the appeal interposed by
petitioners stems from the Orders of the RTC dismissing
their complaint for lack of jurisdiction. The issue raised
herein is one of jurisdiction over the subject matter,
specifically, whether or not the RTC has jurisdiction
over petitioners complaint challenging the
constitutionality of the Omnibus Policies issued by
respondents.
Jurisdiction is the right to act or the power and
authority to hear and determine a case. 9 It is conferred
only by the Constitution or by statute. 10 The question
as to whether or not the dismissal by the lower court
for lack of jurisdiction is proper involves the
determination of whether, admitting the facts alleged
in the complaint to be true, the trial court has
jurisdiction over the same in light of the laws governing
jurisdiction.11 As such, jurisdiction is neither a question
of fact or of fact and law but a matter of law. For this
reason, We have consistently held that a courts
jurisdiction over the subject matter of a case is a
question of law,12 and have, in fact, affirmed dismissals
by the CA of appeals brought to them involving pure
questions of law.13 Considering that only questions of
law was raised in this petition, direct resort to this
Court is proper.14chanrobleslaw
We cannot, therefore, give credence to the lower
courts contention that the appropriate remedy to
annul and set aside the issuance subject of this case is
a special civil action for certiorari under Rule 65 of the
Rules of Court. Certiorari, as a special civil action, is
available only if: (1) it is directed against a tribunal,
board, or officer exercising judicial or quasi-judicial
functions; (2) the tribunal, board, or officer acted
without or in excess of jurisdiction or with grave abuse
of discretion amounting to lack or excess of
jurisdiction; and (3) there is no appeal nor any plain,
speedy, and adequate remedy in the ordinary course of
law.15chanrobleslaw
In this case, respondents did not act in any judicial or
quasi-judicial capacity in issuing the assailed
resolution. They were not called upon to adjudicate the
rights of contending parties to exercise, in any manner,
discretion of a judicial nature. Instead, their issuance of
the challenged resolution was done in the exercise of
their quasi-legislative and administrative functions
within the confines of the granting law. Hence,
contrary to the lower courts contention, certiorari is
not the proper remedy in the instant case.
As to whether the RTC has jurisdiction over the subject
matter involved in this case, it is settled in law and
jurisprudence that the RTC has jurisdiction to resolve
the constitutionality of a statute, presidential decree,
executive order, or administrative regulation, as
recognized in Section 2(a), Article VIII of the 1987
Constitution, which provides:
SECTION 5. The Supreme Court shall have the following
powers:chanroblesvirtuallawlibrary
xxxx
(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.16
In view of the foregoing provision, the jurisdiction of
regular courts involving the validity or constitutionality
of a rule or regulation cannot be denied. We have had
several occasions wherein We affirmed the power of
the RTC to take cognizance of actions assailing a
specific rule or set of rules promulgated by
administrative bodies for the power of judicial review is
vested by the Constitution not only in this Court but in
all Regional Trial Courts.17 It was, therefore, erroneous
for the RTC to abruptly dismiss the complaint filed by
petitioners on the basis of lack of jurisdiction since said
court clearly had the power to take cognizance of the
same. In so doing, the lower court failed to ascertain
factual issues necessary to determine whether the
subject issuance is, indeed, invalid and violative of the
Constitution. Considering the settled rule that this
Court is not a trier of facts,18 a remand of this case to
the RTC for the proper determination of the merits of
the complaint is just and proper.
WHEREFORE, premises considered, the instant
petition is GRANTED. The Orders of the Regional Trial
Court, dated August 31, 2004 and January 14, 2005, in
Civil Case No. 04-0077, are REVERSED and SET
ASIDE. This case is hereby REMANDED to the
Regional Trial Court, Branch CXI (111), Pasay City, for
further proceedings.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 206661 December 10, 2014
HON. ORLANDO C. CASIMIRO, in his capacity as
Acting Ombudsman, Office of the Ombudsman;
HON. ROGELIO L. SINGSON, in his capacity as
Department of Public Works and Highways
Secretary, Petitioner,
vs.
JOSEFINO N. RIGOR, Respondent.
DECISION
PERALTA, J.:
Before the Court is a Petition for Review on Certiorari
under Rule 45 of the Rules of Court filed by petitioners
Orlando C. Casimiro, as Acting Ombudsman, and
Rogelio L. Singson, in his capacity as Secretary of the
Department of Public Works and Highways (DPWH),
assailing the Decision1 of the Court of Appeals (CA)
dated July 4, 2012 and its Resolution2 dated March 27,
2013 in CA-G.R. SP 120708. The CA nullified and set
aside the Order3 of the Office of the Ombudsman
(OMB), dated July 18, 2011, and reinstated its
Order4 dated April 29, 2011, both in OMB-C-A-05-0123-
C.
The factual and procedural antecedents are as follows:
Sometime in 2005, the General Investigation Bureau-A
of the OMB (GIB-A-OMB) conducted a lifestyle check on
respondent Josefino N. Rigor, then the Regional
Director of the DPWH-National Capital Region
(DPWHNCR). Thereafter, the GIB-A-OMB filed a
complaint against Rigor charging him criminally and
administratively before the OMB for alleged
unexplained wealth and violation of Republic Act (R.A.)
No. 30195 and R.A. 1379.6 Said complaint was mainly
based on certain irregularities on Rigors Statement of
Assets, Liabilities and Net Worth (SALNs), allegedly
failing to declare therein several properties, business
interests, and financial connections. Its administrative
aspect asserted that Rigor committed Dishonesty,
Grave Misconduct, and Falsification of Official
Documents.
The complaint alleged that Rigor failed to declare in his
1999 SALN the following:
1) Fourteen (14) parcels of land located in
Barrio Maluid, Victoria, Tarlac, covered by
Transfer Certificate of Title (TCT) Nos. 223271
to 223284, which were all issued by the
Registry of Deeds for Tarlac province on August
21, 1989 in the name of Josefino Rigor, married
to Abigail S. Rigor;
2) Seven (7) parcels of land located in San
Roque and San Rafael, Tarlac City covered by a
single title, TCT No. T-240955 issued by the
Registry of Deeds for Tarlac Province on
September 6, 1991 in the name of Josefino
Rigor, married to Abigail S. Rigor;
3) A parcel of land located in San Roque and
San Rafael, Tarlac City covered by TCT No. T-
240956;
4) A two-storey commercial/residential building
at 1722 G. Tuazon St., Sampaloc, Manila
covered by TCT No. 229634 issued by the
Registry of Deeds for Manila and was
purchased from Jose N. Reyes for Nine Hundred
Fifty Thousand Pesos (P950,000.00) on July 18,
1996;
5) A Toyota Rav 4 Sports Utility Vehicle (SUV)
with License Plate No. XPT-816 registered
under Land Transportation Office (LTO) MV File
No. 1336-115201 and sold by Toyota Shaw, Inc.
on December 18, 1999 to Anastacia Corpuz
Rigor, Rigors wife;
6) A Dodge Ram Road Trek 1995 model with
license number UBA-898 registered under the
name of Rigors wife, Anastacia C. Rigor. The
same was sold by Anastacia only on May 16,
2003 to George Mamonluk for P1,050,000.00;
7) Business interest in Jetri Construction
Corporation which was incorporated in
November 1989 under Securities and Exchange
Commission (SEC) Reg. No. 171720 with an
authorized capital stock of P8,000,000.00
which was primarily incorporated for
construction business, in defiance ofa possible
conflict of interest with Rigor, being a ranking
 DPWH official. Rigors wife, as one of the
incorporators, has the biggest number of
shares worth P600,000.00; she made payment
of P150,000.00 worth of capital stocks and was
the elected Treasurer of the Corporation; and
8) Business interest in Disneyland Bus Line, Inc.
which was registered on March 30, 1994,
primarily intended to operate as a
transportation business with an authorized
capital stock of P10,000,000.00. Of
the P2,500,000.00 subscribed capital stocks,
Rigor subscribed to P1,125,000.00 while his
wife subscribed to P750,000.00. Both amounts
of subscribed shares were wholly paid up.
In 2000, Rigor allegedly failed to declare the following
in his SALN:
1) Fourteen (14) parcels of land located in
Barrio Maluid, Victoria, Tarlac, covered by
Transfer Certificate of Title (TCT) Nos. 223271
to 223284;
2) Seven (7) parcels of land locatedin San
Roque and San Rafael, Tarlac City covered by a
single title, TCT No. T-240955;
3) A parcel of land located in San Roque and
San Rafael, Tarlac City under TCT No. 132066
issued by the Registry of Deeds for Tarlac
Province on September 7, 1976 in the name of
Josefino Rigor; and
4) A parcel of land located in San Roque and
San Rafael, Tarlac City covered by TCT No. T-
240956.
Lastly, he failed to include in his 2001 and 2002 SALNs
the following properties, business interests,and
financial connections:
1) Four (4) parcels of land in San Sebastian
Village, Tarlac City covered by TCT Nos.
356610, 356611, 356612, and 356613, all in
Rigors name and purchased from Allan M.
Manalang;
2) The two-storey commercial/residential
building at1722 G. Tuazon St., Sampaloc,
Manila covered by TCT No. 229634;
3) The Toyota Rav 4 Sports Utility Vehicle (SUV)
with License Plate No. XPT-816;
4) The Dodge Ram Road Trek 1995 model with
license number UBA-898;
5) Business interest in Jetri Construction
Corporation;
6) Business interest in Disneyland Bus Line,
Inc.;
7) Business interest in Kontrata Construction
and Development Corporation;
8) A parcel of land situated in Barrio Tibag,
Tarlac City covered by TCT No. 249517 in the
name of Rigors son; and
9) Six (6) lots situated in San Sebastian Village,
Tarlac City covered by TCT Nos. 330183,
327448, 326965, 326966, 326964, and
325284.
On July 28, 2006, the OMB issued a Decision finding
Rigor guilty of Dishonesty, the dispositive portion of
which reads:
FOREGOING CONSIDERED, pursuant to Section 52 (A-1)
Rule IV of the Uniform Rules on Administrative Cases
(CSC Resolution No. 991936), dated August 31, 1999,
respondent JOSEFINO NACPIL RIGOR, Regional Director,
DPWH-NCR, 2nd St., Port Area, Manila, is hereby found
guilty of DISHONESTY and is meted the corresponding
penalty of DISMISSAL FROM THE SERVICE, including all
its accessory penalties of cancellation of eligibility,
forfeiture of retirement benefits and perpetual
disqualification for reemployment in the government
service and without prejudice to criminal prosecution.
Pursuant to the Memorandum Circular No. 01 dated
April 11, 2006 issued by the Office of the Ombudsman,
the Honorable HERMOGENES E. EBDANE, JR., Secretary,
Department of Public Works and Highways, is hereby
directed to immediately implement this Decision, with
the request to inform this Office of the action taken
thereon and promptly submit to this Office a
Compliance Report thereof.
SO ORDERED.7
Subsequently, Rigor moved for a reconsideration,
which the OMB granted on April 29, 2011. It thus ruled:
WHEREFORE, in view of the foregoing, the Motion for
Reconsideration of the respondent is hereby GRANTED.
The Decision dated September 23, 2010, finding
respondent JOSEFINO NACPIL RIGOR guilty of the
administrative offense is hereby MODIFIED and SET
ASIDE. Accordingly, respondent is adjudged GUILTY of
Simple Negligence and is hereby fined the amount of
One Thousand Pesos, with a warning that repetition of
the same or similar act shall be dealt with more strictly.
The Secretary of the Department of Public Works and
Highways is hereby directed to implement this Decision
within Ten (10) days from receipt hereof.
SO ORDERED.8
The DPWH Secretary then filed, through the Office of
the Solicitor General (OSG), an Omnibus Motion (for
Leave to Intervene and to Admit Motion for
Reconsideration), praying for its intervention in the
case to be allowed. The DPWH argued that there
existed strong and compelling reasons for the reversal
of the April 29,2011 OMB Order. On June 7, 2011, the
OMB directed Rigor to filehis Comment on said Motion.
On July 18, 2011, the OMB issued an Order with a
decretal portion that states:
PREMISES CONSIDERED, the Motion for Reconsideration
dated 23 May 2011 is GRANTED. Accordingly, the Order
dated 29 April 2011 finding JOSEFINO N. RIGOR guiltyof
Simple Negligence and imposing upon him the penalty
of Fine in the amount of One Thousand Pesos
(PhP1,000.00) is hereby SET ASIDE.
JOSEFINO N. RIGOR, Regional Director, DPWH-National
Capital Region, is hereby found GUILTY of Serious
Dishonesty and Falsification of Official Documents. The
penalty of DISMISSAL FROM THE SERVICE is accordingly
imposed against him pursuant to Section 52-A, Rule IV
of the Revised Uniform Rules on Administrative Cases
in the Civil Service, as amended, with the accessory
penalties of cancellation of eligibility, forfeiture of all
benefits, except leave credits, and the perpetual
disqualification for reemployment in the Government
service.
This Order is immediately executory pursuant to
Ombudsman Memorandum Circular No. 01, Series of
2006, in relation to paragraph 1, Section 27 of R.A.
6770, and Section 7, Rule III, Administrative Order No.
7, Rules of Procedure of the Office of the Ombudsman,
as amended, and in accordance with the ruling of the
Supreme Court in Ombudsman vs. Joel Samaniego.
Accordingly, let a copy of this Order be furnished to the
Honorable Secretary Rogelio L. Singson, Department of
Public Works and Highways (DPWH), for the
implementation thereof against JOSEFINO N. RIGOR.
SO ORDERED.9
Aggrieved, Rigor brought the case to the CA via a
Petition for Certiorari under Rule 65 of the Rules of
Court, attributing grave abuse of discretion amounting
to lack or excess of jurisdiction on the part of the OMB.
On July 4, 2012, the appellate court sustained Rigor
and rendered the herein assailed decision. Thus:
WHEREFORE, in view of the foregoing, the challenged
Order dated 18 July 2011 of the Office of the
Ombudsman is hereby NULLIFIED and SET ASIDE.
Accordingly, the Order dated 29 April 2011 is hereby
REINSTATED.
SO ORDERED.10
Thereafter, a Motion for Reconsideration was filed but
the same was denied for lack of merit. Hence, the OMB
and the DPWH filed the instant Petition for Review. It
asserts that the CA gravely erred in giving due course
to Rigors petition despite using the remedy of the
special civil action of certiorari under Rule 65, instead
of Rule 63, of the Rules of Court. They likewise
maintain that the DPWH could still intervene before the
OMB and question the April 29, 2011 OMB Order which
found Rigor guilty of mere Simple Negligence and
reduced the penalty to a fine of only P1,000.00. They
aver that there is sufficient evidence to hold
respondent administratively liable for Serious
Dishonesty and Falsification of Official Documents.
Petitioners present the following arguments:
I.
THE COURT OF APPEALS GRAVELY ERRED IN NOT
RULING THAT A PETITION FOR CERTIORARI AND
PROHIBITION IS AN IMPROPER REMEDY TO ASSAIL
RESPONDENTS DISMISSAL FROM SERVICE.
II.
THE COURT OF APPEALS GRAVELY ERRED IN RULING
THAT THE DPWH CAN NO LONGER INTERVENE BEFORE
THE OFFICE OF THE OMBUDSMAN AND ASSAIL THE
APRIL 29, 2011 ORDER FINDING RESPONDENT
ADMINISTRATIVELY LIABLE ONLY FOR SIMPLE
NEGLIGENCE.
III.
THE COURT OF APPEALS GRAVELY ERRED IN RULING
THAT THE DPWH CAN NO LONGER INTERVENE BEFORE
THE OFFICE OF THE OMBUDSMAN, DESPITE THE
PRESENCE OF SUFFICIENT EVIDENCE TO HOLD
RESPONDENT ADMINISTRATIVELY LIABLE FOR SERIOUS
DISHONESTY AND FALSIFICATION OF OFFICIAL
DOCUMENTS.11
There is merit in the petition.
The Court shall first delve on the procedural issues of
the case. The OMB contends that the CA should have
dismissed Rigors Petition for Certiorari for being an
improper remedy. Appeals from decisions in
administrative disciplinary cases of the OMB should be
taken to the CA via a Petition for Review under Rule 43
of the Rules of Court. Rule 43 prescribes the manner of
appeal from quasi-judicial agencies, such as the OMB,
and was formulated precisely to provide for a uniform
rule of appellate procedure for quasi-judicial agencies.
Rigor, in support of his petition for certiorari, argues
that there was no other plain, speedy, and adequate
legal remedy available to him. But it is settled that
certiorari under Rule 65 will not lie, as appeal under
Rule 43 is an adequate remedy in the ordinary course
of law. The remedies of appeal and certiorari are
mutually exclusive and not alternative or
successive.12 And even if the special civil action of
certiorari were to be allowed, Rigor still failed to show
that the OMB committed grave abuse of discretion in
giving due course to the intervention of the DPWH.
Under Section 13(8), Article XI of the 1987 Constitution,
the OMB is authorized to promulgate its own rules of
procedure. As such, it likewise holds the power to
amend or modify saidrules as the interest of justice
may require.13 The emerging trend of jurisprudence is
more inclined to the liberal and flexible application of
procedural rules. Nonetheless, rules of procedure still
exist to ensure the orderly, just, and speedy
dispensation of cases;to this end, inflexibility or
liberality must be weighed. Thus, the relaxation or
suspension of procedural rules or the exemption of a
case from their operation is warranted only by
compelling reasons or when the purpose of justice
requires it.14
Here, the records clearly show compelling and
justifiable reasons for the OMB to allow the Omnibus
Motion of the DPWH and, consequently, hold Rigor
administratively liable. Rigor alleges that the business
interests in the Jetri Construction Corporation, the two-
storey building in Sampaloc, Manila, the Toyota RAV 4
SUV, and the Dodge Ram Road Trek were all separate
properties of his second wife, Anastacia, that was why
he never included the same in his SALNs. Section 8 of
R.A. No. 6713,15 however, requires him to declare under
oath eventhe assets, liabilities, and financial interests
of his spouse, thus:
Section 8. Statements and Disclosure.- Public officials
and employees have an obligation to accomplish and
submit declarations under oath of, and the public has
the right to know, their assets, liabilities, net worth and
financial and business interests including those of their
spouses and of unmarried children under eighteen (18)
years of age living in their households. (A) Statements
of Assets and Liabilities and Financial Disclosure. - All
public officials and employees, except those who serve
in an honorary capacity, laborers and casual or
temporary workers, shall file under oath their
Statement of Assets, Liabilities and Net Worth and a
Disclosure of Business Interests and Financial
Connections and those of their spouses and unmarried
children under eighteen (18) years of age living in their
households.
The two documents shall contain information on the
following:
(a) real property, its improvements, acquisition
costs, assessed value and current fair market
value;
(b) personal property and acquisition cost;
(c) all other assets such as investments, cash
on hand or in banks, stocks, bonds, and the
like; (d) liabilities, and;
(e) all business interests and financial
connections.
x x x16Dishonesty, as juridically understood,
implies the disposition to lie, cheat, deceive, or
defraud; untrustworthiness; lack of integrity;
lack of honesty or probity in principle; lack of
fairness and straight forwardness; disposition
to defraud, deceive or betray. It is a malevolent
act that puts serious doubt on ones ability to
perform duties with the integrity and
uprightness demanded of a public officer or
employee. The requirement of filing a SALN is
enshrined in the Constitution to promote
transparency in the civil service and serves as
a deterrent against government officials bent
on enriching themselves through unlawful
means. By mandate of law, every government
official or employee must make a complete
disclosure of his assets, liabilities and net worth
in order to avoid any issue regarding
questionable accumulation of wealth. The
importance of requiring the submission of a
complete, truthful, and sworn SALN as a
measure to defeat corruption in the
bureaucracy cannot be gainsaid. Full disclosure
of wealth in the SALN is necessary to
particularly minimize, if not altogether
eradicate, the opportunities for official
corruption, and maintain a standard of honesty
in the public service. Through the SALN, the
public can monitor movement in the fortune of
a public official; it serves as a valid check and
balance mechanism to verify undisclosed
properties and wealth. The failure to file a
truthful SALN reasonably puts in doubts the
integrity of the officer and normally amounts to
dishonesty.17
In the case at bar, Rigor deliberately and wilfully
omitted his wifes business interests in the Jetri
Corporation, the two-storey building in Sampaloc, the
Toyota RAV 4, and the Dodge Ram Road Trek in his
SALNs for 1999, 2000, 2001, and 2002, despite being
required by law to do so. Anent his wifes alleged
business interests in Disneyland Bus Line, Inc., and
Kontrata Construction & Development Corporation, his
belief that he was no longer under obligation to declare
the same as they had already become dead
corporations, deserves scant merit. He and Anastacia
had paid-up capital stocks in the bus line amounting
toP1,125,000.00 and P750,000.00, respectively,
and P100,000.00 and P330,000.00 in the construction
firm, respectively. Since the bus line was incorporated
in 1994 and the construction firm in 1995, Rigor should
have nonetheless declared in his SALNs their interests
therein, until the time the corporations have been
dissolved. While said corporations may be considered
as dead corporations, dissolution and liquidation are
still necessary. Also, Rigors SALN for 1999 has two (2)
versions. Though it appears that both SALNs contain
the same property values and liabilities, his networth in
the SALN which he submitted to OMB-Luzon is
substantially higher than that in the SALN submitted to
DPWH-Region 1, on account of the declared
accumulated depreciation in the amount
of P5,898,181.00. True, no liability can be attributed to
him for submitting two (2) different SALNs for a
calendar year, as his real purpose behind it cannot be
ascertained with accuracy, but such act still manifests
Rigors predilection to misrepresent a fact. Since there
are two (2) versions of a SALN which appear to have
been subscribed on the same date before the same
administering officer, it cannot, therefore, be
determined which of these two versions represents his
real networth.
Rigor, moreover, alleged that he had no obligation to
declare the fourteen (14) parcels of land in Victoria,
Tarlac because these properties were actually owned
by Riya corp Piggery Form Incorporated, a family
corporation which his parents owned.He was merely
authorized to mortgage these properties and was
never the owner of the same prior to the subsequent
transfer to Metrobank, the present owner. However, the
annotations on the Memorandum of Encumbrances of
the titles showed that said properties were the subject
of a Deed of Sale in favor of the Associated Bank way
back in 1987. The ownership over these properties was
also consolidated in the name of said bank in the same
year and new TCTs were consequently issued. Thus, in
all likelihood, the owner of the properties prior to Rigor
was Associated Bank and not Riyacorp, and the latter
could not have possibly authorized Rigor to mortgage
the properties. This proves that Rigor was, in fact, the
owner of the lots and not merely Riyacorps authorized
mortgagor. As such, he was under obligation to declare
the same from 1989 to 2000, before the consolidation
of ownership in favor of Metrobank in 2001.
Lastly, as to the twenty-nine (29)copies of his SALNs
from 1972 to 1998, he knew that the Administrative
Division did not have file copies of his SALNs because
of the fire that gutted the DPWH Legal Office where its
employees SALNs were kept. Instead of admitting and
informing the Administrative Division of DPWH-Region
1 that copies of his old SALNs were no longer available,
here constituted them and made it appear that said
reconstituted SALNs were the very same documents
which he executed from 1972 to 1998. He even put the
blame on the fact-finding investigators of the OMB for
maliciously forcing him to reproduce his SALNs by
virtue of a subpoena. He could not, however, justify his
misrepresentation by this assertion as the one who was
actually directed by the subpoena to reproduce the
SALNs was the Chief of the Administrative Division,
DPWH-Region 1. In addition, Rigors SALNs do not have
markings or stamps of receipt as proof of filing and
give an impression that these had all been
accomplished on a single occasion. These facts
indubitably show that Rigor should likewise be held
liable for Falsification of Official Documents.
Falsification of an official document such as the SALN is
considered a grave offense. It amounts to
dishonesty.1awp++i1 Both falsification and dishonesty
are grave offenses punishable by dismissal from the
service, even for the first offense, with forfeiture of
retirement benefits, except accrued leave benefits, and
perpetual disqualification from reemployment in
government service. The act of falsifying an official
document is in itself grave because of its possible
deleterious effects on government service. At the same
time, it is also an act of dishonesty, which violates
fundamental principles of public accountability and
integrity. Under Civil Service regulations, falsification of
an official document and dishonesty are distinct
offenses, but both may be committed in one act, as in
this case. The constitutionalization of public
accountability shows the kind of standards of public
officers that are woven into the fabric of our legal
system. To reiterate, public office is a public trust,
which embodies a set of standards such as
responsibility, integrity and efficiency. Unfortunately,
reality may sometimes depart from these standards,
but our society has consciously embedded them in our
laws so that they may be demanded and enforced as
legal principles, and the Court is mandated to apply
these principles to bridge actual reality to the norms
envisioned for our public service.18
Administrative proceedings are governed by the
"substantial evidence rule," meaning a finding of guilt
in an administrative case may and would issue if
supported by substantial evidence that the respondent
has committed the acts stated in the complaint.
Substantial evidence is more than a mere scintilla. It
means such relevant evidence as a reasonable mind
might accept as adequate to support a conclusion,
even if other minds equally reasonable might
conceivably opine otherwise. Its absence is not shown
by stressing that there is contrary evidence, direct or
circumstantial, on record. Here, the pieces of evidence
met the quantum of evidence required in
administrative cases to justify Rigor's dismissal from
service.19 Not only did he fail to declare in his SALN the
separate properties of his wife, as required by law, he
likewise failed to satisfactorily explain the other glaring
irregularities involved with his SALNs. These facts
certainly constitute sufficient and relevant evidence
which a reasonable mind might accept as adequate to
sustain a finding of guilt against Rigor for Serious
Dishonesty and Falsification of Official Documents, for
which the penalty of Dismissal from Service is imposed
pursuant to Section 52, Rule IV of the Revised Uniform
Rules on Administrative Cases in the Civil Service, as
amended.
WHEREFORE, premises considered, the petition is
GRANTED. The Decision of the Court of Appeals dated
July 4, 2012 and its Resolution dated March 27, 2013 in
CA-G.R. SP 120708 are REVERSED AND SET ASIDE. The
Order of the Office of the Ombudsman dated July 18,
2011 in OMB-C-A-05-0123-C finding Josefino N. Rigor
guilty of Serious Dishonesty and Falsification of Official
Documents, and ordering his Dismissal from Service, is
hereby REINSTATED.
SO ORDERED.