NENITA GONZALES, SPOUSES GENEROSA The Facts

GONZALES and RODOLFO FERRER, SPOUSES

The deceased spouses Bartolome Ayad and Marcelina Tejada
FELIPE GONZALES and CAROLINA SANTIAGO, ("Spouses Ayad") had five (5) children: Enrico, Encarnacion,
SPOUSES LOLITA GONZALES and Consolacion, Maximiano and Mariano. The latter, who was single,
GERMOGENES GARLITOS, SPOUSES DOLORES predeceased his parents on December 4, 1943. Marcelina died in
September 1950 followed by Bartolome much later on February 17,
GONZALES and FRANCISCO COSTIN, 1964.
SPOUSES CONCHITA GONZALES and
JONATHAN CLAVE, and SPOUSES BEATRIZ Enrico has remained single. Encarnacion died on April 8, 1966 and
is survived by her children, Nenita Gonzales, Generosa Gonzales,
GONZALES and ROMY CORTES,
Felipe Gonzales, Lolita Gonzales, Dolores Gonzales, Conchita
REPRESENTED BY THEIR ATTORNEY-IN-FACT Gonzales and Beatriz Gonzales, the petitioners in this case.
and CO-PETITIONER NENITA Consolacion, meanwhile, was married to the late Imigdio Bugaay.
Their children are Mariano Bugaay, Alicia Bugaay, Amelita Bugaay,
GONZALES, Petitioners,
Rodolfo Bugaay, Letecia Bugaay, Lydia Bugaay, Luzviminda Bugaay
vs. and Belen Bugaay, respondents herein. Maximiano died single and
MARIANO BUGAAY AND LUCY BUGAAY, without issue on August 20, 1986. The spouses of petitioners,
except Nenita, a widow, and those of the respondents, except Lydia
SPOUSES ALICIA BUGAAY AND FELIPE
and Belen, were joined as parties in this case.
BARCELONA, CONEY "CONIE" BUGAAY, JOEY
GATAN, LYDIA BUGAAY, SPOUSES In their Amended Complaint4 for Partition and Annulment of
LUZVIMINDA BUGAAY AND REY PAGATPATAN Documents with Damages dated February 5, 1991 against Enrico,
Consolacion and the respondents, petitioners alleged, inter alia,
AND BELEN BUGAAY, Respondents. that the only surviving children of the Spouses Ayad are Enrico and
Consolacion, and that during the Spouses Ayad's lifetime, they
DECISION owned several agricultural as well as residential properties.

PERLAS-BERNABE, J.: Petitioners averred that in 1987, Enrico executed fraudulent

Assailed in this Petition for Review on Certiorari under Rule 45 is
the Decision1 of the Court of Appeals (CA) dated March 23, 2006 in
CA-G.R. SP No. 91381 as well as the Resolution2 dated June 2, 2006
dismissing petitioners' motion for reconsideration. The CA reversed
and set aside the assailed Orders 3 of the Regional Trial Court (RTC)
of Lingayen, Pangasinan, Branch 39, dated April 13, 2005 and
August 8, 2005, respectively, in Civil Case No. 16815, denying the
demurrer to evidence filed by herein respondents and instead
dismissed petitioners' complaint.
documents covering all the properties owned by the Spouses Ayad
in favor of Consolacion and respondents, completely disregarding
their rights. Thus, they prayed, among others, for the partition of
the Spouses Ayad's estate, the nullification of the documents
executed by Enrico, and the award of actual, moral and exemplary
damages, as well as attorney's fees.
As affirmative defenses5, Enrico, Consolacion and respondents
claimed that petitioners had long obtained their advance
inheritance from the estate of the Spouses Ayad, and that the
properties sought to be partitioned are now individually titled in
respondents' names.
After due proceedings, the RTC rendered a Decision6 dated
November 24, 1995, awarding one-fourth () pro-indiviso share of
the estate each to Enrico, Maximiano, Encarnacion and
Consolacion as the heirs of the Spouses Ayad, excluding Mariano
who predeceased them. It likewise declared the Deed of
Extrajudicial Settlement and Partition executed by Enrico and
respondents, as well as all other documents and muniments of title
in their names, as null and void. It also directed the parties to
submit a project of partition within 30 days from finality of the
Decision.
On December, 13, 1995,7 respondents filed a motion for
reconsideration and/or new trial from the said Decision. On
November 7, 1996, the RTC, through Judge Eugenio Ramos, issued
an Order which reads: "in the event that within a period of one (1)
month from today, they have not yet settled the case, it is
understood that the motion for reconsideration and/or new trial is
submitted for resolution without any further hearing."8
Without resolving the foregoing motion, the RTC, noting the failure
of the parties to submit a project of partition, issued a writ of
execution9 on February 17, 2003 giving them a period of 15 days
within which to submit their nominees for commissioner, who will
partition the subject estate.
Subsequently, the RTC, through then Acting Presiding Judge Emilio
V. Angeles, discovered the pendency of the motion for
reconsideration and/or new trial and set the same for hearing. In
the Order10 dated August 29, 2003, Judge Angeles granted
respondents' motion for reconsideration and/or new trial for the
specific "purpose of receiving and offering for admission the
documents referred to by the [respondents]."11
However, instead of presenting the documents adverted to,
consisting of the documents sought to be annulled, respondents
demurred12 to petitioners' evidence on December 6, 2004 which
the RTC, this time through Presiding Judge Dionisio C. Sison, denied
in the Order13 dated April 13, 2005 as well as respondents' motion
for reconsideration in the August 8, 2005 Order. 14
Aggrieved, respondents elevated their case to the CA through a
petition for certiorari, imputing grave abuse of discretion on the
part of the RTC in denying their demurrer notwithstanding
petitioners' failure to present the documents sought to be
annulled. On March 23, 2006, the CA rendered the assailed
Decision reversing and setting aside the Orders of the RTC
disposing as follows:
"WHEREFORE, the instant petition is hereby GRANTED. Accordingly,
the assailed Orders of the trial court dated April 13, 2006 and
August 8, 2005 are hereby both SET ASIDE and in lieu thereof,
another Order is hereby issued DISMISSING the Complaint, as
amended.
No pronouncement as to costs.
SO ORDERED."15
In dismissing the Amended Complaint, the appellate court
ratiocinated in the following manner:
"In the light of the foregoing where no sufficient evidence was
presented to grant the reliefs being prayed for in the complaint,
more particularly the absence of the documents sought to be
annulled as well as the properties sought to be partitioned,
common sense dictates that the case should have been dismissed
outright by the trial court to avoid unnecessary waste of time,
money and efforts."16
Subsequently, the CA denied petitioners' motion for
reconsideration in its Resolution17 dated June 2, 2006.
The Issues
In this petition for review, petitioners question whether the CA's
dismissal of the Amended Complaint was in accordance with law,
rules of procedure and jurisprudence.
The Ruling of the Court
The RTC Orders assailed before the CA basically involved the
propriety of filing a demurrer to evidence after a Decision had been
rendered in the case.
Section 1, Rule 33 of the Rules of Court provides:
"SECTION 1. Demurrer to evidence. - After the plaintiff has
completed the presentation of his evidence, the defendant may
move for dismissal on the ground that upon the facts and the law
the plaintiff has shown no right to relief. If his motion is denied, he
shall have the right to present evidence. If the motion is granted
but on appeal the order of dismissal was reversed he shall be
deemed to have waived the right to present evidence."
In this case, respondents demurred to petitioners'
evidence after the RTC promulgated its Decision.1wphi1 While
respondents' motion for reconsideration and/or new trial was
granted, it was for the sole purpose of receiving and offering for
admission the documents not presented at the trial. As
respondents never complied with the directive but instead filed a
demurrer to evidence, their motion should be deemed abandoned.
Consequently, the RTC's original Decision stands.
Accordingly, the CA committed reversible error in granting the
demurrer and dismissing the Amended Complaint a quo for
insufficiency of evidence. The demurrer to evidence was clearly no
longer an available remedy to respondents and should not have
been granted, as the RTC had correctly done.
WHEREFORE, the petition is GRANTED. The assailed Decision and
Resolution of the CA are SET ASIDE and the Orders of the RTC
denying respondents' demurrer are REINSTATED. The Decision of
the RTC dated November 24, 1995 STANDS.

SO ORDERED.
The Court has previously explained the nature of a demurrer to
evidence in the case of Celino v. Heirs of Alejo and Teresa
Santiago18 as follows:

"A demurrer to evidence is a motion to dismiss on the ground of

insufficiency of evidence and is presented after the plaintiff rests
his case. It is an objection by one of the parties in an action, to the
effect that the evidence which his adversary produced is
insufficient in point of law, whether true or not, to make out a case
or sustain the issue. The evidence contemplated by the rule on
demurrer is that which pertains to the merits of the case."

In passing upon the sufficiency of the evidence raised in a

demurrer, the court is merely required to ascertain whether there
is competent or sufficient proof to sustain the judgment. 19 Being
considered a motion to dismiss, thus, a demurrer to evidence must
clearly be filed before the court renders its judgment.
 business under the name and style NISSAN
GALLERY-ORTIGAS, and AYALA GENERAL
INSURANCE CORPORATION, Respondents.

RESOLUTION

PEREZ, J.:

This Petition for Review on Certiorari assails the 14 January 2010

Decision1 of the Court of Appeals and its 16 March 2010
Resolution2 in CAG. R. CV No. 89665 affirming the 22 February
2005 Order3 of the Regional Trial Court (RTC) of Quezon City,
Branch 80 which dismissed the case for specific performance and
damages on demurrer to evidence.

In his Complaint for Specific Performance and Damages against

respondents MGM Motors, Inc. (MGM Motors) and Ayala General
Insurance Corporation (Ayala Insurance), petitioner Frederick Felipe
claimed. that he purchased on installment basis a Nissan Terrano
Wagon through MGM Motors' authorized representative Jane
Sarmiento (Sarmiento). Petitioner allegedly gave a P200,000.00
downpayment and P5,000.00 reservation fee to Sarmiento. He
further issued seven (7) Allied Bank checks, each bearing the
amount of P24,165.00 payable to MGM Motors. On 14 May 1997,
MGM Motors delivered the subject vehicle to petitioner. He then
insured the vehicle with Ayala Insurance under Policy No.
PC970000440001-00-000 and paid a premium of P40,220.67. On
15 November 1997, the subject vehicle, while parked along
Adriatico Street in Manila, was reportedly lost. He tried to claim
from Ayala Insurance but the latter refused to pay its liability
causing damages to petitioner. On the other hand, MGM Motors
refused to produce, despite repeated demands, the document of
sale by installment covering the vehicle. Petitioner allegedly paid
additional P200,000.00 on 7 May 1998 as partial payment for the
vehicle. The refusal of MGM Motors to produce the document and
its renouncement of the existence of the installment sale; and the
FREDERICK F. FELIPE, Petitioners, subsequent unlawful insistence on a cash transaction agreement,
vs. had caused damages to petitioner.4

MGM MOTOR TRADING CORPORATION, doing

In its Answer, MGM Motors denied receiving the down payment of
P200,000.00 and P5,000.00 reservation fee paid through
Sarmiento. The following is its version of the controversy:
MGM Motors offered Petitioner a discount of P220,000.00 if the
latter would pay in cash. MGM Motors averred that the vehicle was
delivered to petitioner on 14 May 1997 but the latter failed to pay
in cash, thus MGM Motors did not give the registration papers to
petitioner. MGM Motors sent two letters to petitioner demanding
the payment for the said vehicle but the latter refused or failed to
pay. MGM Motors stated that petitioner was able. to fraudulently
register the vehicle with the Land Transportation Office in his name
and insure the same with Ayala Insurance. During a negotiation,
the parties agreed that petitioner's obligation amounted to
Pl,020,000.00. In an effort to settle petitioner's obligation, his
mother Purificacion issued a postdated check for Pl,020,000.00 as
full payment for the subject vehicle but, upon maturity, the check
bounced. Consequently, MGM Motors filed a case for violation of
Batas Pambansa Bilang 22 (BP 22) against petitioner's mother. In
order to settle the civil aspect of the BP 22 case, petitioner paid
P200,00.00 to MGM Motors. MGM Motors counterclaimed for
damages.5
Ayala Insurance, for its part, contended that petitioner had no valid
cause of action against it. Ayala Insurance. asserted that petitioner
had no insurable interest because he is not the owner of the
vehicle that he had insured with it. Ayala Insurance also
counterclaimed for damages.6
Trial proceeded with petitioner and his father Alberto Felipe
(Alberto) testifying on the behalf of the former. Petitioner's
testimony was however stricken off the record because he failed to
return, despite numerous opportunities, to the witness stand for
cross-examination. Only two pieces of evidence were admitted by
the trial court: (1) the Official Receipt dated 7 May 1998 issued by
MGM Motors wherein it acknowledged receipt of P200,000.00 from
petitioner; and (2) the testimony of his father Alberto that he was
present when petitioner paid P200,000.00 to MGM Motors.
MGM Motors and Ayala Insurance filed their respective Motions to
Dismiss on demurrer to evidence.
On 22 February 2005, the RTC dismissed the case. The trial court
reasoned that the evidence admitted by the trial court do not
prove the material allegations of petitioner's complaint, as well as
the alleged liability of Ayala Insurance.
Petitioner filed a motion for reconsideration from said Order but it
was denied by the trial court on 23 May 2005.7
Meanwhile, the trial, with respect to MGM Motor's counterclaim,
subsisted.
On 6 June 2007, the trial court awarded P25,000.00 in attorney's
fees to MGM Motors.8
Petitioner elevated the matter to the Court of Appeals. On 14
January 2010, the appellate court gave weight to the factual
findings of the trial court and found no reason to reverse its
ruling.9 Petitioner filed a motion for reconsideration but it was
likewise denied by the Court of Appeals.
In the instant petition for review on certiorari, petitioner raises a
lone argument, to wit:
THE COURT OF APPEALS HAS DISPOSED OF PETITIONER'S
(PLAINTIFF-APPELLANT THEREIN) APPEAL IN A WAY NOT IN ACCORD
WITH LAW OR WITH THE APPLICABLE DECISIONS OF THIS
HONORABLE TRIBUNAL, THUS COMMITTING ERRORS THAT
WARRANT REVERSAL BY THIS HONORABLE TRIBUNAL THIS
HAPPENED WHEN:
THE COURT OF APPEALS AFFIRMED THE RULING OF THE TRIAL
COURT THAT FAILED/REFUSED TO GRANT PETITIONER THE RELIEFS
PRAYED FOR IN THE COMPLAINT DESPITE THE FACT THAT WITH THE
EVIDENCE THAT HE ADDUCED HE HAS CLEARLY, CONVINCINGLY
AND PREPONDERANTLY PROVEN HIS CAUSES OF ACTION AGAINST
THE RESPONDENTS (DEFENDANTS). THIS IS TRUE EVEN IF A
CONSIDERABLE PORTION OF HIS EVIDENCE WAS DENIED
ADMISSION BY THE TRIAL COURT.10
Petitioner insists that the two pieces of evidence admitted by the
trial court are sufficient to substantiate the material allegations of
the complaint. Petitioner stresses that Alberto's testimony
established that the purchase of the subject vehicle was on
installment basis from MGM Motors; that Petitioner paid additional
1!200,000.00; and that MGM Motors failed and refused to deliver
the promised documents. of sale on installment despite payments
having been made. The fact of sale on installment, according to
petitioner, was further proved by the receipt issued by MGM
Motors. Petitioner highlights the fact that the vehicle was actually
delivered to him, thus .ownership was transferred to him upon
delivery thereof. Proceeding from the same line of argument,
petitioner states that with respect to Ayala Insurance, he is already
the owner of the subject vehicle when the insurance on it was
taken and when the subject vehicle was lost.
Assuming arguendo that title to the subject vehicle remained with
MGM Motors, petitioner addsthat his insurable interest on the
vehicle consisted of the substantial amount that he had paid on the
purchase price of the vehicle.
MGM Motors cites the Municipal Trial Court's (MTC) finding in the
criminal complaint for BP 22 against petitioner's mother that the
agreement for the purchase of the subject vehicle was on cash
basis and not installment MGM Motors echoes the trial court's
ruling that petitioner failed to substantiate the material allegations
in his complaint.
On its part, Ayala Insurance puts up the argument that the only
evidence submitted by petitioner against it was the receipt of the
P200,000.00 that he paid to MGM Motors.1wphi1 The evidence
does not constitute proof of the insurable interest. Moreover, Ayala
Insurance asserts that petitioner also failed to establish the
following proof: (1) premium payment; (2) that the insurable
interest existed at the time of the loss; (3) deed of sale; (4)
proximate cause of the loss is one of the perils insured against; (5)
existence of the original insurance policy. Ayala Insurance
maintains that Petitioner failed to establish his case by
preponderance of evidence.
The basic issue is whether the trial court correctly granted the
demurrer to evidence and subsequently dismissed the complaint.
We agree:
A demurrer to evidence is a motion to dismiss on the ground of
insufficiency of evidence and is presented after the plaintiff rests
his case. It is an objection by one of the parties in an action, to the
effect that the evidence which his adversary produced is
insufficient in point of law, whether true or not, to make out a case
or sustain the issue.11
Rule 33, Section 1 of the 1997 Rules of Civil Procedure provides:
Section 1. Demurrer to evidence.-After the plaintiff has completed
the presentation of his evidence, the defendant may move for
dismissal on the ground that upon the facts and the law the
plaintiff has shown no right to relief. If his motion is denied, he shall
have the right to present evidence. If the motion is granted but on
appeal the order of dismissal is reversed he shall be deemed to
have waived the right to present evidence.
The essential question to be resolved in a demurrer to evidence is
whether the plaintiff has been able to show that he is entitled to
his claim, and it is incumbent upon the trial court judge to make
such a determination.12
A review of the dismissal of the complaint naturally entails a
Calibration of the evidence to determine whether the material
allegations of the complaint were sufficiently backed by evidence.
We have repeatedly stressed that the remedy of appeal by
certiorari under Rule 45 of the Rules of Court contemplates only
questions of law, not of fact.
A question of law exists when there is doubt or controversy as to
what the law is on a certain state of facts. There is a question of
fact when doubt arises as to the truth or falsity of the statement of
facts. The resolution of a question of fact necessarily involves a
calibration of the evidence, the credibility of the witnesses, the
existence and the relevance of surrounding circumstances, and the
probability of specific situations. It is for this reason that this Court
defers to the factual findings of a trial judge, who has had the
distinct advantage of directly observing the witnesses on the stand
and determining from their demeanor whether they were speaking
or distorting the truth.13

The questions on whether the sale was on cash or installment basis

and whether petitioner had insurable interest on the subject car
are evidently questions of fact which are beyond the purview of the
instant petition.

In any event, a perusal of the records show that the trial court
correctly dismissed petitioner's complaint on demurrer to evidence.

Well-established is the rule that the burden of proof lies on the

party who makes the allegations.14 There is no dispute that the
only pieces of evidence admitted in court are the testimony of
Alberto and the receipt showing MGM Motors receiving
P200,000.00 from petitioner as partial payment of the subject car.
The allegation that the purchase of the vehicle was on an
installment basis was not supported by any evidence. The receipt
of a partial payment does not suffice to prove that the purchase
was made on an installment basis. Petitioner did not present any
document to prove said allegation while MGM Motors produced a
sales invoice wherein it was stated that the mode of payment is
"COD" or cash on delivery.

In the same vein, petitioner failed to substantiate his allegation

against Ayala Insurance. Petitioner has the burden of proof to show
that a loss occurred and said loss was covered by his insurance
policy. Considering that the trial court only admitted two pieces of
evidence in petitioner's favor and none of those tend to prove loss
of the subject car and coverage thereof under the insurance policy,
petitioner is not entitled to the reliefs he had prayed for.
ESPIRITA N. ACOSTA, petitioner,
BASED ON THE FOREGOING, the Petition is DENIED. The 14 vs.
January 2010 Decision of the Court of Appeals and its 16 March THE COMMISSION ON ELECTIONS, JUDGE
2010 Resolution in CA-G.R. CV No. 89665 are AFFIRMED. GENOVEVA COCHING MARAMBA, in her
capacity as Presiding Judge of the Municipal
SO ORDERED.
Circuit Trial Court, San Fabian/San Jacinto,
Pangasinan and RAYMUNDO I.
RIVERA, respondents.
ROMERO, J.:
For the Court's resolution is the instant petition for certiorari with
prayer for the issuance of a writ of preliminary injunction and/or
temporary restraining order assailing the December 2, 1997,
resolution of the Commission on Elections (COMELEC) En Banc in
SPR No. 13-97, entitled "Espirita N. Acosta v. Hon. Genoveva
Coching-Maramba in her capacity as Presiding Judge, 4th Municipal
Circuit Trial Court, San Fabian-San Jacinto, Pangasinan, and
Raymundo I. Rivera."
The parties herein were candidates for the position of Punong
Barangay in Bgy. Sobol, San Fabian, Pangasinan, during the May
12, 1997, barangay election. By a winning margin of four votes,
petitioner was proclaimed as the duly elected Punong Barangay. On
May 15, 1997, Rivera filed an election protest with the Municipal
Circuit Trial Court of San Fabian-San Jacinto, alleging that the votes
cast for him in Precincts No. 22-A, No. 22-A-1, No. 22-B, and No. 22-
B-1 were not duly and properly accounted for due to "misreading,
non-reading, mistallying, and misappreciation of ballots/votes," and
praying for a recount of the votes. The following day, the court a
quosummoned Acosta who, on May 19, 1997, filed a Motion for
Time to File Answer. In an order dated May 21, 1997, the court
denied said motion and concluded that the election protest was
sufficient in form and substance. Furthermore, considering that
from the allegations in the protest revision of ballots was
necessary, the court also ordered the COMELEC Election Registrar
and/or the Municipal Treasurer of San Fabian to bring to court the
ballot boxes of Bgy. Sobol, together with their keys, list of voters
with voting records, book of voters and other election documents.
On May 29, 1997, petitioner filed with the COMELEC a petition
for certiorari and prohibition with prayer for the issuance of a
temporary restraining order and/or writ of preliminary injunction,
questioning the May 21, 1997, order of the MCTC. This was
docketed as SPR No. 13-97.
The following day, May 30th, after determining that Rivera should
have garnered 408 votes, three votes more than Acosta's 405, the
lower court rendered a decision nullifying petitioner's proclamation
and declaring Rivera as the duly elected Punong Barangay of Bgy.
Sobol. Petitioner filed a notice of appeal on June 11, 1997, which
respondent Judge granted in an order of even date. Said appeal
was assigned UNDK No. 5-97 before the COMELEC.
On December 2, 1997, the COMELEC issued an en banc Resolution
in SPR No. 13-97 dismissing the petition for lack of merit, and
affirming the assailed order dated May 21, 1997, as well as the
trial court's decision dated May 20, 1997 (should be May 30, 1997).
Aggrieved by said ruling, petitioner went to this Court for relief.
The Court finds the instant petition meritorious.
The COMELEC indeed exceeded the bounds of its authority when it
affirmed the trial court's decision when said judgment was not the
subject of SPR No. 13-97, a special civil action assailing an
interlocutory order of the same lower court. The fact that the
decision was eventually elevated to the COMELEC on appeal does
not cure the defect since said appeal was not consolidated with
SPR No. 13-97. In fact, it was still undocketed at the time and the
parties had not yet submitted any evidence relating to the election
protest.
Due process dictates that before any decision can be validly
rendered in a case, the following safeguards must be met: (a) the
court or tribunal must be clothed with judicial authority to hear and
determine the matter before it; (b) it must have jurisdiction over
the person of the party or over the property subject of the
controversy; (c) the parties thereto must have been given an
opportunity to adduce evidence in their behalf, and (d) such
evidence must be considered by the tribunal in deciding the
case. 1 While the COMELEC cannot be faulted for resolving the
issue raised by petitioner in SPR No. 13-97, namely, the propriety
of the lower court's order dated May 21, 1997, it exceeded its
authority and thereby gravely abused its discretion when, in the
same resolution, it affirmed said court's decision dated May 30,
1997, which was the subject of petitioner's appeal, UNDK No. 5-97.

Furthermore, the Court notes that the assailed resolution was

issued by the COMELEC en banc, again in excess of its jurisdiction.
Under Article IX-C, Section 3 of the Constitution, the COMELEC
must hear and decide election cases "in division, provided that
motions for reconsideration of decision shall be decided by the
Commission en banc." 2 This Constitutional mandate was clearly
violated by the COMELEC in the case at bar.

WHEREFORE, the instant petition for certiorari is GRANTED. The

assailed resolution of the COMELEC en bancdated December 2,
1997, is hereby NULLIFIED and SET ASIDE, and the records of this
case are ordered REMANDED to a Division of the COMELEC for
proper disposition of SPR No. 13-97 and UNDK No. 5-97. No
pronouncement as to costs.

SO ORDERED.
 On January 24, 1965, Prudencio de Luna donated a portion of 7,500
square meters of Lot No. 3707 of the Cadastral Survey of Lucena
covered by Transfer Certificate of Title No. 1-5775 to the Luzonian
Colleges, Inc., (now Luzonian University Foundation, Inc., herein
referred to as the foundation). The donation, embodied in a Deed
of Donation Intervivos (Annex "A" of Petition) was subject to certain
terms and conditions and provided for the automatic reversion to
the donor of the donated property in case of violation or non-
compliance (pars. 7 and 10 of Annex "A", p. 20, Rollo). The
foundation failed to comply with the conditions of the donation. On
April 9, 1971, Prudencio de Luna "revived" the said donation in
favor of the foundation, in a document entitled "Revival of
Donation Intervivos" (Annex "B" of Petition) subject to terms and
conditions which among others, required:
EVELYN DE LUNA, ROSALINA DE LUNA,
PRUDENCIO DE LUNA, JR., WILLARD DE xxx xxx xxx
LUNA, ANTONIO DE LUNA, and JOSELITO DE
LUNA, petitioners, 3. That the DONEE shall construct at its own
expense a Chapel, a Nursery and Kindergarten
vs. School, to be named after St. Veronica, and other
HON. SOFRONIO F. ABRIGO, Presiding Judge constructions and Accessories shall be constructed
of the Court of First Instance of Quezon, on the land herein being donated strictly in
accordance with the plans and specifications
Branch IX, and LUZONIAN UNIVERSITY prepared by the O.R. Quinto & Associates and
FOUNDATION, INC., respondents. made part of this donation; provided that the
flooring of the Altar and parts of the Chapel shall
Milberto B. Zurbano for petitioners. be of granoletic marble.

Joselito E. Talabong for private respondent.
MEDIALDEA, J.:
This is a petition for review on certiorari of the Order dated July 7,
1981 of respondent judge Sofronio F. Abrigo of the Court of First
Instance of Quezon, Branch IX in Civil Case No. 8624 dismissing the
complaint of petitioners on the ground of prescription of action.
4. That the construction of the Chapel, Nursery and
Kindergarten School shall start immediately and
must be at least SEVENTY (70) PER
CENTUM finished by the end of THREE (3) YEARS
from the date hereof, however, the whole project
as drawn in the plans and specifications made
parts of this donation must be completed within
FIVE (5) YEARS from the date hereon, unless
extensions are granted by the DONOR in writing;

The antecedent facts are as follows: . . . . (p. 23, Rollo)

As in the original deed of donation, the "Revival of Donation
Intenrivos" also provided for the automatic reversion to the donor
of the donated area in case of violation of the conditions thereof,
couched in the following terms:
xxx xxx xxx.
11. That violation of any of the conditions herein
provided shall cause the automatic reversion of the
donated area to the donor, his heirs, assigns and
representatives, without the need of executing any
other document for that purpose and without
obligation whatever on the part of the DONOR. (p.
24,Rollo).
The foundation, through its president, accepted the donation in the
same document, subject to all the terms and conditions stated in
the donation (p. 24, Rollo). The donation was registered and
annotated on April 15, 1971 in the memorandum of encumbrances
as Entry No. 17939 of Transfer Certificate of Title No. T-5775 (p.
15, Rollo).
On August 3, 1971, Prudencio de Luna and the foundation
executed a 'Deed of Segregation" (Annex "C" of Petition) whereby
the area donated which is now known as Lot No. 3707-B of
Subdivision Plan Psd-40392 was adjudicated to the foundation. As
a result, transfer certificate of title No. T-16152 was issued in the
name of the foundation. The remaining portion known as Lot No.
3707-A was retained by the donor. (p. 16, Rollo).
On September 23, 1980, herein petitioners, Evelyn, Rosalina,
Prudencio, Jr., Willard, Antonio and Joselito, all surnamed de Luna,
who claim to be the children and only heirs of the late Prudencio de
Luna who died on August 18, 1980, filed a complaint (pp. 14-
17, Rollo) with the Regional Trial Court of Quezon alleging that the
terms and conditions of the donation were not complied with by
the foundation. Among others, it prayed for the cancellation of the
donation and the reversion of the donated land to the heirs. The
complaint was docketed as Civil Case No. 8624.
In its answer (pp. 29-36, Rollo), respondent foundation claimed
that it had partially and substantially complied with the conditions
of the donation and that the donor has granted the foundation an
indefinite extension of time to complete the construction of the
chapel. It also invoked the affirmative defense of prescription of
action and prayed for the dismissal of the complaint.
During the pre-trial of the case, the foundation moved for a
preliminary hearing of its affirmative defense of prescription of
action which was opposed by the plaintiffs. After the parties have
filed their respective written motions, oppositions and memoranda,
an Order (pp., 40-43, Rollo) dated July 7, 1981 was issued
dismissing the complaint. The dispositive portion of the Order
states:
In view of the foregoing considerations, this Court
finds the motion to dismiss deemed filed by the
defendant on the ground of prescription to be well-
taken and the same is hereby GRANTED.
WHEREFORE, the instant complaint is hereby
ordered DISMISSED.
No pronouncement as to costs.
SO ORDERED. (pp. 42-43, Rollo)
No motion for reconsideration was filed by petitioners.
On July 22, 1981, petitioners brought the instant petition for review
with the following assignments of error:
I. THE LOWER COURT ERRED IN HOLDING THAT THE
DONEE'S CONSENT TO THE REVOCATION OF A
DONATION TO BE VALID MUST BE GIVEN
SUBSEQUENT TO THE EFFECTIVITY OF THE
DONATION OR VIOLATION OF (THE) ANY OF THE
CONDITIONS IMPOSED THEREIN.
 II. THE LOWER COURT ERRED IN TREATING THE
COMPLAINT AS ONE FOR JUDICIAL DECREE OF
REVOCATION OF THE DONATION IN QUESTION AS
CONTEMPLATED IN ARTICLE 764 OF THE CIVIL
CODE OF THE PHILIPPINES AND WHICH
PRESCRIBES IN FOUR (4) YEARS AND IN NOT
CONSIDERING IT AS AN ACTION TO ENFORCE A
WRITTEN CONTRACT WHICH PRESCRIBES IN TEN
(10) YEARS AS PROVIDED IN ARTICLE 1144, HENCE,
THE LOWER COURT ERRED IN DISMISSING THE
COMPLAINT.
III. THE LOWER COURT ERRED IN NOT RENDERING
JUDGMENT ON THE MERITS BY WAY OF JUDGMENT
ON THE PLEADINGS. (pp. 1-2, Petitioner's Brief)
We gave due course to the petition on August 3, 1981 (p.
45, Rollo). After the parties' submission of their respective briefs,
the Court resolved to consider the petition submitted for decision
on January 27, 1982 (p. 62,Rollo).
The assailed order of the trial court stated that revocation (of a
donation) will be effective only either upon court judgment or upon
consent of the donee as held in the case of Parks v. Province of
Tarlac, No. 24190, July 13, 1926, 49 Phil. 143. The trial court
dismissed the claim of petitioners that the stipulation in the
donation providing for revocation in case of non-compliance of
conditions in the donation is tantamount to the consent of the
donee, opining that the consent contemplated by law should be
such consent given by the donee subsequent to the effectivity of
the donation or violation of the conditions imposed therein. The
trial court further held that, far from consenting to the revocation,
the donee claimed that it had already substantially complied with
the conditions of the donation by introducing improvements in the
property donated valued at more than the amount of the donated
land. In view thereof, a judicial decree revoking the subject
donation is necessary. Accordingly, under Article 764 of the New
Civil Code, actions to revoke a donation on the ground of non-
compliance with any of the conditions of the donation shall
prescribe in four years counted from such non-compliance. In the
instant case, the four-year period for filing the complaint for
revocation commenced on April 9, 1976 and expired on April 9,
1980. Since the complaint was brought on September 23, 1980 or
more than five (5) months beyond the prescriptive period, it was
already barred by prescription.
On the other hand, petitioners argue that Article 764 of the New
Civil Code was adopted to provide a judicial remedy in case of non-
fulfillment of conditions when revocation of the donation has not
been agreed upon by the parties. By way of contrast, when there is
a stipulation agreed upon by the parties providing for revocation in
case of non-compliance, no judicial action is necessary. It is then
petitioners' claim that the action filed before the Court of First
Instance of Quezon is not one for revocation of the donation under
Article 764 of the New Civil Code which prescribes in four (4) years,
but one to enforce a written contract which prescribes in ten (10)
years.
The petition is impressed with merit.
From the viewpoint of motive, purpose or cause, donations may be
1) simple, 2) remuneratory or 3) onerous. A simple donation is one
the cause of which is pure liberality (no strings attached). A
remuneratory donation is one where the donee gives something to
reward past or future services or because of future charges or
burdens, when the value of said services, burdens or charges is
less than the value of the donation. An onerous donation is one
which is subject to burdens, charges or future services equal (or
more) in value than that of the thing donated (Edgardo L. Paras,
Civil Code of the Philippines Annotated, 11 ed., Vol. 11, p. 726).
It is the finding of the trial court, which is not disputed by the
parties, that the donation subject of this case is one with an
onerous cause. It was made subject to the burden requiring the
donee to construct a chapel, a nursery and a kindergarten school
in the donated property within five years from execution of the
deed of donation.
Under the old Civil Code, it is a settled rule that donations with an
onerous cause are governed not by the law on donations but by
the rules on contracts, as held in the cases of Carlos v. Ramil, L-
6736, September 5, 1911, 20 Phil. 183, Manalo vs. de Mesa, L-
9449, February 12, 1915, 29 Phil. 495. On the matter of
prescription of actions for the revocation of onerous donation, it
was held that the general rules on prescription applies. (Parks v.
Province of Tarlac, supra.). The same rules apply under the New
Civil Code as provided in Article 733 thereof which provides:
Art. 733. Donations with an onerous cause shall be
governed by the rules on contracts, and
remuneratory donations by the provisions of the
present Title as regards that portion which exceeds
the value of the burden imposed.
It is true that under Article 764 of the New Civil Code, actions for
the revocation of a donation must be brought within four (4) years
from the non-compliance of the conditions of the donation.
However, it is Our opinion that said article does not apply to
onerous donations in view of the specific provision of Article 733
providing that onerous donations are governed by the rules on
contracts.
In the light of the above, the rules on contracts and the general
rules on prescription and not the rules on donations are applicable
in the case at bar.
Under Article 1306 of the New Civil Code, the parties to a contract
have the right "to establish such stipulations, clauses, terms and
conditions as they may deem convenient, provided they are not
contrary to law, morals, good customs, public order or public
policy." Paragraph 11 of the "Revival of Donation Intervivos, has
provided that "violation of any of the conditions (herein) shall
cause the automatic reversion of the donated area to the donor,
his heirs, . . ., without the need of executing any other document
for that purpose and without obligation on the part of the DONOR".
Said stipulation not being contrary to law, morals, good customs,
public order or public policy, is valid and binding upon the
foundation who voluntarily consented thereto.
The validity of the stipulation in the contract providing for the
automatic reversion of the donated property to the donor upon
non-compliance cannot be doubted. It is in the nature of an
agreement granting a party the right to rescind a contract
unilaterally in case of breach, without need of going to court. Upon
the happening of the resolutory condition of non-compliance with
the conditions of the contract, the donation is automatically
revoked without need of a judicial declaration to that effect. In the
case of University of the Philippines v. de los Angeles, L-28602,
September 29, 1970, 35 SCRA 102-107, it was held:
. . . There is nothing in the law that prohibits the
parties from entering into agreement that violation
of the terms of the contract would cause
cancellation thereof. even without court
intervention. In other words, it is not always
necessary for the injured party to resort to court for
rescission of the contract (Froilan v. Pan Oriental
Shipping Co., et al.,
L-11897, 31 October 1964, 12 SCRA 276).
This was reiterated in the case of Angeles v. Calasanz, L-42283,
March 18, 1985:
Well settled is, however, the rule that a judicial
action for the rescission of a contract is not
necessary where the contract provides that it may
be revoked and cancelled for violation of any of its
terms and conditions (Lopez v. Commissioner of
Customs, 37 SCRA 327, 334, and cases cited
therein).
Resort to judicial action for rescission is obviously
not contemplated. The validity of the stipulation
can not be seriously disputed. It is in the nature of
a facultative resolutory condition which in many
cases has been upheld, by this court. (Ponce Enrile
v. Court of Appeals, 29 SCRA 504)
However, in the University of the Philippines v. Angeles case,
(supra), it was held that in cases where one of the parties contests
or denies the rescission, "only the final award of the court of
competent jurisdiction can conclusively settle whether the
resolution is proper or not." It was held, thus:
. . . since in every case, where the extrajudicial
resolution is contested, only the final award of the
court of competent jurisdiction can conclusively
settle whether the resolution was proper or not. It
is in this sense that judicial action will be necessary
as without it, the extrajudicial resolution will
remain contestable and subject to judicial
invalidation, unless attack thereon should become
barred by acquiescence, estoppel or prescription.
It is clear, however, that judicial intervention is necessary not for
purposes of obtaining a judicial declaration rescinding a contract
already deemed rescinded by virtue of an agreement providing for
rescission even without judicial intervention, but in order to
determine whether or not the recession was proper.
that improvements more valuable than the donated property had
been introduced, a judgment on the pleadings is not proper.
Moreover, in the absence of a motion for judgment on the
pleadings, the court cannot motu proprio render such judgment.
Section 1 of Rule 19 provides: "Where an answer fails to tender an
issue, or otherwise admits the material allegations of the adverse
party's pleading, the court may, on motion of that party, direct
judgment on such pleading." (Emphasis supplied)
ACCORDINGLY, the petition is GRANTED. Civil Case No. 8624 is
hereby ordered reinstated. Respondent judge is ordered to conduct
a trial on the merits to determine the propriety of the revocation of
the subject donation.
SO ORDERED.

The case of Parks v. Province of Tarlac, supra, relied upon by the

trial court, is not applicable in the case at bar. While the donation
involved therein was also onerous, there was no agreement in the
donation providing for automatic rescission, thus, the need for a
judicial declaration revoking said donation.

The trial court was therefore not correct in holding that the
complaint in the case at bar is barred by prescription under Article
764 of the New Civil Code because Article 764 does not apply to
onerous donations. SPOUSES RAMON VILLUGA and MERCEDITA
VILLUGA, Petitioners,
As provided in the donation executed on April 9, 1971, complaince
vs.
with the terms and conditions of the contract of donation, shall be
made within five (5) years from its execution. The complaint which KELLY HARDWARE AND CONSTRUCTION
was filed on September 23, 1980 was then well within the ten (10) SUPPLY INC., represented by ERNESTO V. YU,
year prescriptive period to enforce a written contract (Article
Executive Vice-President and General
1144[1], New Civil Code), counted from April 9, 1976.
Manager, Respondent.
Finally, considering that the allegations in the complaint on the
matter of the donee's non-compliance with the conditions of the DECISION
donation have been contested by private respondents who claimed
PERALTA, J.:
Before the Court is a petition for review on certiorari under Rule 45
of the Rules of Court seeking to reverse and set aside the
Decision1 and Resolution2 dated November 30, 2006 and February
8, 2007 of the Court of Appeals (CA) in CA-G.R. CV No. 69001. The
CA Decision affirmed the Orders of the Regional Trial Court (RTC) of
Bacoor, Cavite, Branch 89, dated September 28, 1998 and May 6,
1999, while theCA Resolution denied petitioners' Motion for
Reconsideration.
The factual and procedural antecedents of the case are as follows:
On March 3, 1995, herein respondent filed with the RTC of Bacoor,
Cavite a Complaint for a Sum of Money and Damages against
herein petitioners alleging as follows:
xxxx
(3) During the period of November 19, 1992 to January 5,
1993, defendants [herein petitioners] made purchases of
various construction materials from plaintiff corporation
[herein respondent] in the sum of P259,809.50, which has
not been paid up to the present time, both principal and
stipulated interests due thereon.
(4) Plaintiff made several demands, oral and written, for
the same defendants to pay all their obligations due
plaintiff herein, but defendants fail and refuse to comply
with, despite demands made upon them, to the damage
and prejudice of plaintiff.
xxxx
WHEREFORE, premises considered, it is most respectfully prayed of
this Honorable Court that judgment be rendered in favor of plaintiff
and against defendants by ordering defendants to pay the sum of:
(1) P259,809.50 as principal obligation due plaintiff, plus
interest due thereon at 14% interest per annum, until all
sums due are paid in full.
(2) P64,952.38 by way of reimbursements of attorney's
fees plus P500.00 appearance fee in court.
(3) P26,000.00 for litigation and other related expenses.
And to pay the cost of suit.3
In their Answer to Complaint,4 petitioners admitted having made
purchases from respondent, but alleged that they do not
remember the exact amount thereof as no copy of the documents
evidencing the purchases were attached to the complaint.
Petitioners, nonetheless, claimed that they have made payments
to the respondent on March 4, 1994 and August 9, 1994 in the
amounts of P110,301.80 and P20,000.00, respectively, and they
are willing to pay the balance of their indebtedness after deducting
the payments made and after verification of their account.
In a Manifestation5 dated July 18, 1995, petitioners stated that in
order to buy peace, they were willing to pay respondent the
principal sum of P259,809.50, but without interests and costs, and
on installment basis.
In its Counter Manifestation,6 respondent signified that it was
amenable to petitioners' offer to pay the principal amount of
P259,809.50. However, respondent insisted that petitioners should
also pay interests, as well as litigation expenses and attorney's
fees, and all incidental expenses.
Subsequently, on August 11, 1995, respondent filed a Motion for
Partial Judgment on the Pleadings7 contending that petitioners
were deemed to have admitted in their Answer that they owed
respondent the amount of P259,809.50 when they claimed that
they made partial payments amounting to P130,301.80. Based on
this premise, respondent prayed that it be awarded the remaining
balance of P129,507.70. Petitioners filed their Opposition 8 to the
said Motion.
On September 11, 1995, the RTC issued an Order9 deferring
resolution of respondent's Motion for Partial Judgment on the
ground that there is no clear and specific admission on the part of
petitioners as to the actual amount that they owe respondent.
On January 30, 1996, respondent filed an Amended
Complaint,10 with leave of court, alleging that between October
1992 until January 5, 1993, petitioners purchased from it
(respondent) various construction materials and supplies, the
aggregate value of which is P279,809.50; that only P20,000.00 had
been paid leaving a balance of P259,809.50.
In their Answer to Amended Complaint, 11 petitioners reiterated
their allegations in their Answer to Complaint.
On March 8, 1996, respondent filed a Request for
Admission12 asking that petitioners admit the genuineness of
various documents, such as statements of accounts, delivery
receipts, invoices and demand letter attached thereto as well as
the truth of the allegations set forth therein.
Respondent basically asked petitioners to admit that the latter's
principal obligation is P279,809.50 and that only P20,000.00 was
paid.
On June 3, 1996, respondent filed a Manifestation and
Motion13 before the RTC praying that since petitioners failed to
timely file their comment to the Request for Admission, they be
considered to have admitted the genuineness of the documents
described in and exhibited with the said Request as well as the
truth of the matters of fact set forth therein, in accordance with the
Rules of Court.
On June 6, 1996, petitioners filed their Comments on the Request
for Admission14 stating their objections to the admission of the
documents attached to the Request.
On January 24, 1997, respondent filed its Second Amended
Complaint,15 again with leave of court. The amendment modified
the period covered by the complaint. Instead of October 1992 to
January 5, 1993, it was changed to July 29, 1992 until August 10,
1994. The amendment also confirmed petitioners' partial payment
in the sum of P110,301.80 but alleged that this payment was
applied to other obligations which petitioners owe respondent.
Respondent reiterated its allegation that, despite petitioners'
partial payment, the principal amount which petitioners owe
remains P259,809.50.
Petitioners filed their Answer to the Second Amended
Complaint16 denying the allegations therein and insisting that they
have made partial payments.
On September 4, 1997, respondent filed a Motion to Expunge with
Motion for Summary Judgment17 claiming that petitioners'
Comments on respondent's Request for Admission is a mere scrap
of paper as it was signed by petitioners' counsel and not by
petitioners themselves and that it was filed beyond the period
allowed by the Rules of Court. Respondent goes on to assert that
petitioners, in effect, were deemed to have impliedly admitted the
matters subject of the said request. Respondent also contended
that it is already entitled to the issuance of a summary judgment in
its favor as petitioners not only failed to tender a genuine issue as
to any material fact but also did not raise any special defenses,
which could possibly relate to any factual issue.
In their Opposition to Motion to Expunge with Motion for Summary
Judgment,18 petitioners argued that respondent's request for
admission is fatally defective, because it did not indicate or specify
a period within which to answer; that verification by petitioners'
counsel is sufficient compliance with the Rules of Court; that
petitioners' request for admission should be deemed dispensed
with and no longer taken into account as it only relates to the
Amended Complaint, which was already abandoned when the
Second Amended Complaint was filed; and that summary
judgment is improper and without legal basis, as there exists a
genuine controversy brought about by petitioners' specific denials
and defenses.
On September 28, 1998, the RTC issued an Order, the dispositive
portion of which reads as follows:
ACCORDINGLY, plaintiff's [herein respondent's] Motion to Expunge
with Motion for Summary Judgment is hereby GRANTED.
Defendants' Petitioners "Comments on the Request for Admission"
dated 04 June 1996 is hereby expunged from the record for being
contrary to the Rules of Court. Judgment is hereby rendered in
favor of the plaintiff and against the defendants as follows:
Defendants are hereby ordered to pay, jointly and severally,
plaintiff the sum of TWO HUNDRED FIFTY-NINE [THOUSAND] EIGHT
HUNDRED NINE PESOS and 50/100 (P259,809.50), with legal
interest due thereon until the whole amount is paid.
SO ORDERED.19
Petitioners filed a Motion for Reconsideration, but it was denied by
the RTC in its Order dated May 6, 1999.
Unyielding, petitioners filed an appeal with the CA.
On November 30, 2006, the CA rendered its presently assailed
Decision, affirming the September 28, 1998 and May 6, 1999
Orders of the RTC.
Petitioners' Motion for Reconsideration was subsequently denied by
the CA via its Resolution dated February 8, 2007.
Hence, the instant petition for review on certiorari raising the
following issues:
THE HONORABLE COURT SHOULD NOT HAVE DENIED DEFENDANTS-
APPELLANTS' (PETITIONERS) COMMENT AND RULED THAT THERE
WAS IMPLIED ADMISSION CONTAINED IN THE REQUEST.
THERE SHOULD NOT HAVE BEEN A SUMMARY JUDGMENT AGAINST
DEFENDANTSAPPELLANTS (PETITIONERS).20
In their first assigned error, petitioners insist in arguing that
respondent waived its Request for Admission when it filed its
Second Amended Complaint; that all motions or requests based on
the complaint, which was amended, should no longer be
considered. Petitioners also contend that the Request for Admission
was not in the form specified by the Rules of Court as it did not
specify a period within which to reply as required by Section 1, Rule
26 of the same Rules.
As to the second assignment of error, petitioners aver that the
summary judgment issued by the RTC is improper and without
legal bases, considering that genuine issues were raised in the
pleadings filed by petitioners.
The petition lacks merit.
The Court agrees with the CA in holding that respondent's Second
Amended Complaint supersedes only its Amended Complaint and
nothing more.
Section 8, Rule 10 of the Rules of Court provides:
Sec. 8. Effect of amended pleading. An amended pleading
supersedes the pleading that it amends. However, admissions in
superseded pleadings may be received in evidence against the
pleader; and claims or defenses alleged therein not incorporated in
the amended pleading shall be deemed waived.
From the foregoing, it is clear that respondent's Request for
Admission is not deemed abandoned or withdrawn by the filing of
the Second Amended Complaint.
The Court also finds no error when the CA ruled that petitioners'
Comments on the Request for Admission was filed out of time, and
quotes with approval the disquisition of the appellate court on this
matter, to wit:
x x x Pursuant to the above-quoted Section 2 of Rule 26 of the
Rules of Court, the party to whom the request is directed must
respond to the request within a period of not less than ten (10)
days after the service thereof, or upon such further time the Court
may allow on motion. In the instant case, the plaintiff-appellee's
herein respondent's "Request" failed to designate any period for
the filing of the defendants-appellants' herein petitioners'
response. Neither did the trial court fix the period for the same
upon motion of the parties. However, such failure to designate
does not automatically mean that the filing or the service of an
answer or comment to the "Request" would be left to the whims
and caprices of defendants-appellants. It must be reiterated that
one of the main objectives of Rule 26 is to expedite the trial of the
case (Duque vs. Court of Appeals, 383,
SCRA 520, 527 2002 ). Thus, it is also provided in the second
paragraph of Section 2 of Rule 26 of the Rules of Court that
"[o]bjections on the ground of irrelevancy or impropriety of the
matter requested shall be promptly submitted to the court for
resolution."21
Nonetheless, the Court takes exception to the ruling of the CA that
by reason of the belated filing of petitioners' Comments on the
Request for Admission, they are deemed to have impliedly
admitted that they are indebted to respondent in the amount of
P259,809.50.
A careful examination of the said Request for Admission shows that
the matters of fact set forth therein are simply a reiteration of
respondent's main allegation in its Amended Complaint and that
petitioners had already set up the affirmative defense of partial
payment with respect to the above allegation in their previous
pleadings.
This Court has ruled that if the factual allegations in the complaint
are the very same allegations set forth in the request for admission
and have already been specifically denied, the required party
cannot be compelled to deny them anew.22 A request for admission
that merely reiterates the allegations in an earlier pleading is
inappropriate under Rule 26 of the Rules of Court, which as a mode
of discovery, contemplates of interrogatories that would clarify and
tend to shed light on the truth or falsity of the allegations in the
pleading.23 Rule 26 does not refer to a mere reiteration of what has
already been alleged in the pleadings.24 Nonetheless, consistent
with the abovementioned Rule, the party being requested should
file an objection to the effect that the request for admission is
improper and that there is no longer any need to deny anew the
allegations contained therein considering that these matters have
already been previously denied.
The foregoing notwithstanding, the Court finds that the CA was
correct in sustaining the summary judgment rendered by the
RTC.1wphi1
Sections 1 and 3, Rule 35 of the Rules of Court provide as follows:
Section 1. Summary judgment for claimant. A party seeking to
recover upon a claim, counterclaim, or cross-claim or to obtain a
declaratory relief may, at any time after the pleading in answer
thereto has been served, move with supporting affidavits,
depositions or admissions for a summary judgment in his favor
upon all or any part thereof.
Section 3. Motion and proceedings thereon. The motion shall be
served at least ten (10) days before the time specified for the
hearing. The adverse party may serve opposing affidavits,
depositions, or admissions at least three (3) days before the
hearing. After the hearing, the judgment sought shall be rendered
forthwith if the pleadings, supporting affidavits, depositions, and
admissions on file, show that, except as to the amount of damages,
there is no genuine issue as to any material fact and that the
moving party is entitled to a judgment as a matter of law.
Summary judgment is a procedural device resorted to in order to
avoid long drawn out litigations and useless delays. 25 Such
judgment is generally based on the facts proven summarily by
affidavits, depositions, pleadings, or admissions of the parties. 26
In this respect, the Court's ruling in Nocom v. Camerino, 27 is
instructive, to wit:
x x x When the pleadings on file show that there are no genuine
issues of fact to be tried, the Rules of Court allow a party to obtain
immediate relief by way of summary judgment, that is, when the
facts are not in dispute, the court is allowed to decide the case
summarily by applying the law to the material facts. Conversely,
where the pleadings tender a genuine issue, summary judgment is
not proper. A "genuine issue" is such issue of fact which requires
the presentation of evidence as distinguished from a sham,
fictitious, contrived or false claim. Section 3 of [Rule 35 of the
Rules of Court] provides two (2) requisites for summary judgment
to be proper: (1) there must be no genuine issue as to any material
fact, except for the amount of damages; and (2) the party
presenting the motion for summary judgment must be entitled to a
judgment as a matter of law. A summary judgment is permitted
only if there is no genuine issue as to any material fact and a
moving party is entitled to a judgment as a matter of law. A
summary judgment is proper if, while the pleadings on their face
appear to raise issues, the affidavits, depositions, and admissions
presented by the moving party show that such issues are not
genuine.28
In the present case, it bears to note that in its original Complaint,
as well as in its Amended Complaint, respondent did not allege as
to how petitioners' partial payments of P110,301.80 and
P20,000.00 were applied to the latter's obligations. In fact, there is
no allegation or admission whatsoever in the said Complaint and
Amended Complaint that such partial payments were made.
Petitioners, on the other hand, were consistent in raising their
affirmative defense of partial payment in their Answer to the
Complaint and Answer to Amended Complaint. Having pleaded a
valid defense, petitioners, at this point, were deemed to have
raised genuine issues of fact.
the amount of P259,809.50 despite their payments of P110,301.80
and P20,000.00. It is settled that the rule authorizing an answer to
the effect that the defendant has no knowledge or information
sufficient to form a belief as to the truth of an averment and giving
such answer the effect of a denial, does not apply where the fact
as to which want of knowledge is asserted, is so plainly and
necessarily within the defendants knowledge that his averment of
ignorance must be palpably untrue.29 In the instant case, it is
difficult to believe that petitioners do not know how their payment
was applied. Instead of denying knowledge, petitioners could have
easily asserted that their payments of P110,301.80 and P20,000.00
were applied to, and should have been deducted from, the sum
sought to be recovered by respondent, but they did not, leading
the court to no other conclusion than that these payments were
indeed applied to their other debts to respondent leaving an
outstanding obligation of P259,809.50.
On the basis of the foregoing, petitioners' defense of partial
payment in their Answer to Second Amended Complaint, in effect,
no longer raised genuine issues of fact that require presentation of
evidence in a full-blown trial. Hence, the summary judgment of the
RTC in favor of respondent is proper.
WHEREFORE, the instant petition Is DENIED. The assailed Decision
and Resolution of the Court of Appeals are AFFIRMED.
SO ORDERED.

The situation became different, however, when respondent

subsequently filed its Second Amended Complaint admitting
therein that petitioners, indeed, made partial payments of
P110,301.80 and P20,000.00. Nonetheless, respondent accounted
for such payments by alleging that these were applied to
petitioners' obligations which are separate and distinct from the
sum of P259,809.50 being sought in the complaint. This allegation
was not refuted by petitioners in their Answer to Second Amended
Complaint. Rather, they simply insisted on their defense of partial
payment while claiming lack of knowledge or information to form a
belief as to the truth of respondent's allegation that they still owe
THE HEIRS OF NICOLAS S. CABIGAS, NAMELY:
LOLITA ZABATE CABIGAS, ANECITA C.
CANQUE, DIOSCORO CABIGAS, FIDEL
CABIGAS, and RUFINO CABIGAS, Petitioners,
vs.
MELBA L. LIMBACO, LINDA L. LOGARTA,
RAMON C. LOGARTA, HENRY D. SEE, FREDDIE
S. GO, BENEDICT Y. QUE, AWG DEVELOPMENT
CORPORATION, PETROSA DEVELOPMENT
CORPORATION, and UNIVERSITY OF CEBU
BANILAD, INC.,

DECISION

BRION, J.:

We resolve the petition for review on certiorari 1 filed by Lolita

Cabigas, Anecita Canque, Dioscoro Cabigas, Fidel Cabigas, and
Rufino Cabigas (petitioners), heirs of Nicolas S. Cabigas, to reverse
and set aside the resolutions of the Court of Appeals (CA) in CA-
G.R. CV No. 01144 dated May 31, 2006 2 and October 4,
2006,3 dismissing their ordinary appeal for being the wrong
recourse.

THE FACTS

On February 4, 2003, the petitioners filed a complaint for the

annulment of titles of various parcels of land registered in the
names of Melba Limbaco, Linda Logarta, Ramon Logarta, Eugenio
Amores, New Ventures Realty Corporation, Henry See, Freddie Go,
Benedict Que, AWG Development Corporation (AWG), Petrosa
Development Corporation (Petrosa), and University of Cebu
Banilad, Inc. (UCB) with the Regional Trial Court (RTC) of Cebu City,
docketed as Civil Case No. 28585.
The complaint alleged that petitioner Lolita Cabigas and her late
husband, Nicolas Cabigas, purchased two lots (Lot No. 742 4 and Lot
No. 9535) from Salvador Cobarde on January 15, 1980. Cobarde in
turn had purchased these lots from Ines Ouano 6 on February 5,
1948.
Notwithstanding the sale between Ouano and Cobarde, and
because the two lots remained registered in her name, 7 Ouano was
able to sell these same lots to the National Airports Corporation on
November 25, 1952 for its airport expansion project. The National
Airports Corporation promptly had the titles of these properties
registered in its name.
When the airport expansion project fell through, respondents Melba
Limbaco, Ramon Logarta, and Linda Logarta, the legal heirs of
Ouano, succeeded in reclaiming title to the two lots through an
action for reconveyance filed with the lower court;8 the titles over
these lots were thereafter registered in their names.9 They then
subdivided the two lots10 and sold them to New Ventures Realty
Corporation, Eugenio Amores, Henry See, Freddie Go, Benedict
Que, Petrosa, and AWG. AWG, in turn, sold one of the parcels of
land to UCB. All the buyers registered the titles over their
respective lots in their names.
After the respondents had filed their individual Answers,
respondents Henry See, Freddie Go and Benedict Que filed a
motion to set the case for hearing on special affirmative defenses
on July 8, 2004. On the other hand, respondents AWG, Petrosa, and
UCB filed a motion for summary judgment on April 13, 2005,
admitting as true the facts stated in the petitioners complaint, but
claiming that the petitioners had no legal right to the properties in
question.
THE RTC RESOLUTION
On August 23, 2005, the RTC issued a resolution, 11 granting the
motion for summary judgment filed by AWG, Petrosa and UCB, and
dismissing the petitioners complaint. According to the RTC, while
the petitioners alleged bad faith and malice on the part of Ouano
when she sold the same properties to the National Airports
Corporation, they never alleged bad faith on the part of the buyer,
the National Airports Corporation. Since good faith is always
presumed, the RTC concluded that the National Airports
Corporation was a buyer in good faith and its registration of the
properties in its name effectively transferred ownership over the
two lots, free from all the unrecorded prior transactions involving
these properties, including the prior sale of the lots to Cobarde.
As the RTC explained, the unregistered sale of the lots by Ouano to
Cobarde was merely an in personam transaction, which bound only
the parties. On the other hand, the registered sale between Ouano
and the National Airports Corporation, a buyer in good faith, was
an in rem transaction that bound the whole world. Since Cobardes
rights to the properties had already been cut off with their
registration in the name of the National Airports Corporation, he
could not sell any legal interest in these properties to the Cabigas
spouses. Hence, under the Torrens system, the petitioners are
strangers to the lots and they had no legally recognized interest
binding it in rem that the courts could protect and enforce against
the world.12
The petitioners filed a notice of appeal to question the RTC
resolution. In response, respondents AWG, Petrosa, and UCB filed a
motion to dismiss the appeal, claiming that the petitioners raised
only questions of law in their appeal; thus, they should have filed
an appeal by certiorari with the Supreme Court, and not an
ordinary appeal with the appellate court.
THE COURT OF APPEALS RESOLUTIONS
In its May 31, 2006 resolution, the CA ruled that the petitioners
should have filed a petition for review on certiorari under Rule 45
of the Rules of Court with the Supreme Court instead of an ordinary
appeal since they only raised a question of law, i.e., the propriety
of the summary judgment. Accordingly, insofar as the respondents
who filed the motion for summary judgment are concerned,
namely, AWG, Petrosa, and UCB, the CA dismissed the petitioners
appeal.
However, the CA remanded the case to the RTC for further
proceedings on the Motion to Set Case for Hearing on Special and
Affirmative Defenses filed by respondents Henry See, Freddie Go,
and Benedict Que.
In its October 4, 2006 resolution, the CA resolved the petitioners
motion for reconsideration, as well as the Partial Motion for
Reconsideration filed by respondents Henry See, Freddie Go, and
Benedict Que. The CA observed that it did not have jurisdiction to
entertain the appeal since it raised a pure question of law. Since it
dismissed the appeal based on a technicality, it did not have the
jurisdiction to order that the case be remanded to the RTC.
Furthermore, the trial court had already dismissed the case in its
entirety when it held that the petitioners had no enforceable right
as against the respondents, since they had no registered legal
interest in the properties. There was thus no need to remand the
case to the RTC.
Hence, the petitioners seek recourse with this Court via the present
petition, raising the following grounds:
(1) The Court of Appeals committed grave and serious
error in dismissing the appeal and in holding that a
summary judgment is appealable only through a petition
for review on certiorari under Rule 45 to the Supreme
Court.
(2) The paramount and overriding considerations of
substantial justice and equity justify the reversal and
setting aside of the questioned resolutions.
THE RULING
We AFFIRM the assailed CA resolutions.
Petitioners availed of the wrong mode of appeal
Section 2, Rule 41 of the Rules of Court provides the three modes
of appeal, which are as follows:
Section 2. Modes of appeal.
(a) Ordinary appeal. The appeal to the Court of Appeals
in cases decided by the Regional Trial Court in the exercise
of its original jurisdiction shall be taken by filing a notice of
appeal with the court which rendered the judgment or final
order appealed from and serving a copy thereof upon the
adverse party. No record on appeal shall be required except
in special proceedings and other cases of multiple or
separate appeals where the law or these Rules so require.
In such cases, the record on appeal shall be filed and
served in like manner.
(b) Petition for review. The appeal to the Court of
Appeals in cases decided by the Regional Trial Court in the
exercise of its appellate jurisdiction shall be by petition for
review in accordance with Rule 42.
(c) Appeal by certiorari. In all cases where only
questions of law are raised or involved, the appeal shall be
to the Supreme Court by petition for review on certiorari in
accordance with Rule 45.
The first mode of appeal, the ordinary appeal under Rule 41 of the
Rules of Court, is brought to the CA from the RTC, in the exercise of
its original jurisdiction, and resolves questions of fact or mixed
questions of fact and law. The second mode of appeal, the petition
for review under Rule 42 of the Rules of Court, is brought to the CA
from the RTC, acting in the exercise of its appellate jurisdiction, and
resolves questions of fact or mixed questions of fact and law. The
third mode of appeal, the appeal by certiorari under Rule 45 of the
Rules of Court, is brought to the Supreme Court and resolves only
questions of law.
Where a litigant files an appeal that raises only questions of law
with the CA, Section 2, Rule 50 of the Rules of Court expressly
mandates that the CA should dismiss the appeal outright as the
appeal is not reviewable by that court.
There is a question of law when the issue does not call for an
examination of the probative value of the evidence presented, the
truth or falsehood of facts being admitted, and the doubt concerns
the correct application of law and jurisprudence on the matter. 13 On
the other hand, there is a question of fact when the doubt or
controversy arises as to the truth or falsity of the alleged facts.
While the petitioners never filed their appellants brief, we discern
from the petitioners submissions to the CA,14as well as from their
petition with this Court, their perceived issues with respect to the
RTCs summary judgment, and they are as follows:
a) Whether or not the National Airports Corporation acted
with good faith when it purchased the properties from
Ouano;
b) Whether the heirs of Ouano acted with good faith in
recovering the properties from the National Airports
Corporation; and
c) Whether the subsequent buyers of the properties acted
with good faith in purchasing the properties from the heirs
of Ouano.
Given that the question of whether a person acted with good faith
or bad faith in purchasing and registering real property is a
question of fact,15 it appears, at first glance, that the petitioners
raised factual issues in their appeal and, thus, correctly filed an
ordinary appeal with the CA. After reviewing the RTC resolution
being assailed, however, we find that the petitioners actually
raised only questions of law in their appeal.
We quote the pertinent portions of the RTC decision:
The main issue to be resolved is who between [the] plaintiffs and
the defendants have a better right to the subject lots.
In selling the land in favor of the National Airports Corporation[,]
plaintiffs alleged bad faith and malice on the part of the seller
Ine[s] Ouano but have not pleaded bad faith on the part of the
buyer. Since good faith is always presumed under Article 427 of the
Civil Code, the National Airports Corporation was therefore a buyer
in good faith. Being [a] purchaser in good faith and for value, it is
axiomatic that the right of [the] National Airports Corporation must
be upheld and its titles protected over the claim of the plaintiffs. In
the case of Flordeliza Cabuhat vs. The Honorable Court of Appeals,
G.R. No. 122425, September 28, 2001, the Supreme Court upheld
the validity of the title of an innocent purchaser in good faith and
for value and at the same time invoked the principle of stability of
our Torrens system and indefeasibility of title guaranteeing the
integrity of land titles once the claim of ownership is established
and recognized.
"However, it is well-settled that even if the procurement of a
certificate of title was tainted with fraud and misrepresentation,
such defective title may be the source of a completely legal and
valid title in the hands of an innocent purchaser for value. Thus:
where innocent third persons, relying on the correctness of the
certificate of title thus issued, acquire rights over the property the
court cannot disregard such rights and order the total cancellation
of the certificate. The effect of such an outright cancellation would
be to impair public confidence in the certificate of title, for
everyone dealing with property registered under [the] Torrens
system would have to inquire in every instance whether the title
has been regularly or irregularly issued. This is contrary to the
evident purpose of the law. Every person dealing with the
registered land may safely rely on the correctness of the certificate
of title issued therefore and the law will in no way oblige him to go
behind the certificate to determine the condition of the property."
The subject lots being registered land under the Torrens [s]ystem
the recordation of the sale by the National Airports Corporation, a
buyer in good faith gave National Airports Corporation a title free
of all unrecorded prior transactions, deeds, liens and
encumbrances, and conversely forever erased or cut off the
unrecorded interest of Salvador Cobarde. Section 50 of Article 496
of the Land Registration Act (now sec. 51 of PD 1529) reads: "No
deed, mortgage, lease or other voluntary instrument, except a will,
purporting to convey or affect registered land shall take effect as a
conveyance or bind the land xxx. The act of registration shall be
the operative act to convey and affect [the] land." In the case of
National Grains Authority v. IAC, 157 SCRA 380, the Supreme Court
ruled, thus, the possession by plaintiffs and their predecessors-in-
interest is irrelevant to this case because possession of registered
land can never ripen into ownership. "No title to registered land in
derogation of the title of the registered owner shall be acquired by
prescription or adverse possession." (Sec. 46 of Act 496, now Sec.
47 of PD 1529).
In the eyes of the Torrens system, the unregistered sale of the
property by Ine[s] Ouano to Salvador Cobarde did not bind the land
or the whole world in rem; it bound, in personam, only the parties.
On the other hand, the registered sale by Ine[s] Ouano to National
Airports Corporation, a buyer in good faith, bound the land in rem,
meaning that the whole world was put on constructive notice that
thenceforth the land belonged to National Airports Corporation free
of all prior transactions, deeds and encumbrances, such as the
claim of Salvador Cobarde, which were at the very moment
National Airports Corporation registered its title free of prior claims
forever erased or cut off by operation of law.
xxxx
Salvador Cobarde, whose rights to the property had been erased or
cut off by operation of law, had nothing or had no legally
recognized interest in the property that he could sell when he
"sold" the property to Nicolas and Lolita Cabigas. Nicolas and Lolita
Cabigas having bought nothing could transmit nothing to their
successors-in-interest, the plaintiffs herein. Under the Torrens
system, herein plaintiffs are strangers to the property; they
possess no legally recognized interest binding the property in rem
that courts could protect and enforce against the world. 16
As astutely observed by the CA, the RTC resolution merely collated
from the pleadings the facts that were undisputed, admitted, and
stipulated upon by the parties, and thereafter ruled on the legal
issues raised by applying the pertinent laws and jurisprudence on
the matter. In other words, the RTC did not resolve any factual
issues, only legal ones.
When there is no dispute as to the facts, the question of whether or
not the conclusion drawn from these facts is correct is a question
of law.17 When the petitioners assailed the summary judgment,
they were in fact questioning the conclusions drawn by the RTC
from the undisputed facts, and raising a question of law.
In light of the foregoing, jurisdiction over the petitioners appeal
properly lay with this Court via an appeal by certiorari, and the CA
was correct in dismissing the appeal for lack of jurisdiction.
Rendition of summary judgment was proper
Even if we overlook the procedural lapse and resolve the case on
the merits, we still affirm the assailed CA resolutions.
Under the Rules of Court, a summary judgment may be rendered
where, on motion of a party and after hearing, the pleadings,
supporting affidavits, depositions and admissions on file show that,
"except as to the amount of damages, there is no genuine issue as
to any material fact and that the moving party is entitled to a
judgment as a matter of law."18 The Court explained the concept of
summary judgment in Asian Construction and Development
Corporation v. Philippine Commercial International Bank:19
Summary or accelerated judgment is a procedural technique aimed
at weeding out sham claims or defenses at an early stage of
litigation thereby avoiding the expense and loss of time involved in
a trial.
Under the Rules, summary judgment is appropriate when there are
no genuine issues of fact which call for the presentation of
evidence in a full-blown trial. Even if on their face the pleadings
appear to raise issues, when the affidavits, depositions and
admissions show that such issues are not genuine, then summary
judgment as prescribed by the Rules must ensue as a matter of
law. The determinative factor, therefore, in a motion for summary
judgment, is the presence or absence of a genuine issue as to any
material fact. [Emphasis supplied.]
The petitioners assert that the RTC erred in rendering a summary
judgment since there were factual issues that required the
presentation of evidence at a trial.
We disagree with the petitioners.
At the outset, we note from the respondents pleadings that
several respondents20 denied that the sale between anwhile,
missed the information against all the accused. on in Court,
claiming that cutors, who are his subordinates. Ouano and Cobarde
ever occurred. It would, therefore, appear that a factual issue
existed that required resolution through a formal trial, and the RTC
erred in rendering summary judgment.
A closer examination of the parties submissions, however, makes
it apparent that this is not a genuine issue of fact because, as will
be discussed below, the petitioners do not have any legally
enforceable right to the properties in question, as their
predecessors-in-interest are not buyers in good faith.
i. Cabigas spouses are not buyers in good faith
A purchaser in good faith is one who buys the property of another
without notice that some other person has a right to or interest in
such property, and pays a full and fair price for the same at the
time of such purchase or before he has notice of the claim of
another person.21 It is a well-settled rule that a purchaser cannot
close his eyes to facts which should put a reasonable man upon his
guard, and then claim that he acted in good faith under the belief
that there was no defect in the title of the vendor. His mere refusal
to believe that such defect exists, or his willful closing of his eyes
to the possibility of the existence of a defect in his vendors title,
will not make him an innocent purchaser for value, if it afterwards
develops that the title was in fact defective, and it appears that he
had such notice of the defect as would have led to its discovery
had he acted with that measure of precaution which may
reasonably be required of a prudent man in a like situation. 22
We are dealing with registered land, a fact known to the Cabigas
spouses since they received the duplicate owners certificate of
title from Cobarde when they purchased the land. At the time of
the sale to the Cabigas spouses, however, the land was registered
not in Cobardes name, but in Ouanos name. By itself, this fact
should have put the Cabigas spouses on guard and prompted them
to check with the Registry of Deeds as to the most recent
certificates of title to discover if there were any liens,
encumbrances, or other attachments covering the lots in question.
As the Court pronounced in Abad v. Sps. Guimba: 23
[The law protects to a greater degree a purchaser who buys from
the registered owner himself. Corollarily, it] requires a higher
degree of prudence from one who buys from a person who is not
the registered owner, although the land object of the transaction is
registered. While one who buys from the registered owner does not
need to look behind the certificate of title, one who buys from one
who is not the registered owner is expected to examine not only
the certificate of title but all factual circumstances necessary for
[one] to determine if there are any flaws in the title of the
transferor, or in [the] capacity to transfer the land. (emphasis
supplied)
Instead, the Cabigas spouses relied completely on Cobardes
representation that he owned the properties in question, and did
not even bother to perform the most perfunctory of investigations
by checking the properties titles with the Registry of Deeds. Had
the Cabigas spouses only done so, they would easily have learned
that Cobarde had no legal right to the properties they were
acquiring since the lots had already been registered in the name of
the National Airports Corporation in 1952. Their failure to exercise
the plain common sense expected of real estate buyers bound
them to the consequences of their own inaction.
ii. No allegation that the National Airports Corporation registered
the lots in bad faith
All the parties to this case trace their ownership to either of the
two persons that Ouano sold the properties to either to Cobarde,
who allegedly purchased the land in 1948, or to the National
Airports Corporation, which bought the land in 1952. Undoubtedly,
the National Airports Corporation was the only party that registered
the sale with the Registry of Deeds. For this registration to be
binding, we now have to determine whether the National Airports
Corporation acted with good faith when it registered the properties,
in accordance with Article 1544 of the Civil Code, which provides:
Article 1544. If the same thing should have been sold to different
vendees, the ownership shall be transferred to the person who may
have first taken possession thereof in good faith, if it should be
movable property.
Should it be immovable property, the ownership shall belong to the
person acquiring it who in good faith first recorded it in the
Registry of Property.
Should there be no inscription, the ownership shall pertain to the
person who in good faith was first in the possession; and, in the
absence thereof, to the person who presents the oldest title,
provided there is good faith.1avvphi1
Based on this provision, the overriding consideration to determine
ownership of an immovable property is the good or bad faith not of
the seller, but of the buyer; specifically, we are tasked to
determine who first registered the sale with the Registry of
Property (Registry of Deeds) in good faith.
As accurately observed by the RTC, the petitioners, in their
submissions to the lower court, never imputed bad faith on the
part of the National Airports Corporation in registering the lots in
its name. This oversight proves fatal to their cause, as we
explained in Spouses Chu, Sr. v. Benelda Estate Development
Corporation:
In a case for annulment of title, therefore, the complaint must
allege that the purchaser was aware of the defect in the title so
that the cause of action against him will be sufficient. Failure to do
so, as in the case at bar, is fatal for the reason that the court
cannot render a valid judgment against the purchaser who is
presumed to be in good faith in acquiring the said property. Failure
to prove, much less impute, bad faith on said purchaser who has
acquired a title in his favor would make it impossible for the court
to render a valid judgment thereon due to the indefeasibility and
conclusiveness of his title.24
Since the petitioners never alleged that the National Airports
Corporation acted with bad faith when it registered the lots in its
name, the presumption of good faith prevails. Consequently, the
National Airports Corporation, being a registrant in good faith, is
recognized as the rightful owner of the lots in question, and the
registration of the properties in its name cut off any and all prior
liens, interests and encumbrances, including the alleged prior sale
to Cobarde, that were not recorded on the titles. Cobarde, thus,
had no legal rights over the property that he could have
transferred to the Cabigas spouses.
Since the Cabigas spouses have no legally recognizable interest in
the lots in question, it follows that the petitioners, who are
subrogated to the rights of the former by virtue of succession, also
have no legally recognizable rights to the properties that could be
enforced by law. The petitioners clearly have no cause of action
against the respondents, and the RTC correctly dismissed their
complaint for annulment of title.
WHEREFORE, premises considered, we DENY the petition for lack
of merit, and AFFIRM the Resolutions, dated May 31, 2006 and
October 4, 2006, of the Court of Appeals in CA-G.R. CV No. 01144.
No costs.
SO ORDERED.
DARE ADVENTURE FARM
CORPORATION, Petitioner,
vs.
HON. COURT OF APPEALS, MANILA, HON.
AUGUSTINE VESTIL, as Presiding Judge of
RTC-CEBU, Br. 56, MANDAUE CITY, SPS. FELIX
NG AND NENITA NG, and SPS. MARTIN T. NG
AND AZUCENA S. NG AND AGRIPINA R. GOC-
ONG, Respondents.

DECISION

BERSAMIN, J.:

A decision rendered on a complaint in a civil action or proceeding

does not hind or prejudice a person not impleaded therein, for no
person shall he adversely affected by the outcome of a civil action
or proceeding in which he is not a party. 1 Hence, such person
cannot bring an action for the annulment of the judgment under
Rule 47 of the 1997 Rules of Civil Procedure, except if he has been
a successor in interest by title subsequent to the commencement
of the action, or the action or proceeding is in rem the judgment in
which is binding against him.

Antecedents

The petitioner acquired a parcel of land with an area of 65,100

square meters situated in San Roque, Lilo-an, Metro Cebu known as
lot 7531-part (the property) through a deed of absolute sale
executed on July 28, 1994 between the petitioner, as vendee, and
Agripina R. Goc-ong (a respondent herein), Porferio Goc-ong,
Diosdado Goc-ong, Crisostomo Goc-ong, Tranquilino Goc-ong,
Naciancena Goc-ong and Avelino Goc-ong (collectively, the Goc-
ongs), as vendors.2
The petitioner later on discovered the joint affidavit executed on
June 19, 1990 by the Goc-ongs, whereby the Goc-ongs declared
that they were the owners of the property, and that they were
mortgaging the property to Felix Ng, married to Nenita N. Ng, and
Martin T. Ng, married to Azucena S. Ng (collectively, the Ngs) to
secure their obligation amounting to P 648,000.00, subject to the
condition that should they not pay the stipulated 36-monthly
installments, the Ngs would automatically become the owners of
the property.3
With the Goc-ongs apparently failing to pay their obligation to the
Ngs as stipulated, the latter brought on January 16, 1997 a
complaint for the recovery of a sum of money, or, in the
alternative, for the foreclosure of mortgage in the Regional Trial
Court, Branch 56, in Mandaue City (RTC) only against respondent
Agripina R. Goc-ong.4 The action was docketed as Civil Case No.
MAN-2838.
With Agripina R. Goc-ong being declared in default for failing to file
her answer in Civil Case No. MAN-2838,5 the RTC rendered its
Decision on October 16, 1997, disposing:
In the light of the foregoing, judgment is hereby rendered:
1) Declaring herein Plaintiffs the owners of lot 7531-part,
situated at San Roque, Liloan, Cebu containing an area of
Sixty Five Thousand One Hundred (65,100) square meters
and assessed for P 22,240.00 and
2) Directing Defendant to pay Plaintiff the sum of P
10,000.00 as attorneys fees and
3) P 10,000.00 as litigation expenses.
SO ORDERED.6
Ruling of the Court of Appeals
In 2001, the petitioner commenced in the Court of Appeals (CA) an
action for the annulment of the October 16, 1997 decision of the
RTC.
On June 19, 2001, however, the CA dismissed the petition for
annulment of judgment, viz:
We are constrained to DISMISS OUTRIGHT the present petition for
annulment of judgment under Rule 47 of the 1997 Rules of Civil
Procedure, as amended, considering that nowhere therein is there
an allegation on why "the ordinary remedies of new trial, appeal,
petition for relief or other appropriate remedies are no longer
available through no fault of the petitioner.["]7
The petitioner moved for the reconsideration of the outright
dismissal, but the CA denied its motion for reconsideration on
October 24, 2003 on the basis that petitioner did not show why it
had not availed itself of the ordinary remedies of new trial, appeal,
petition for relief or other appropriate remedies as provided in
Section 1, Rule 47 of the Rules of Court.
Issues
Hence, the petitioner ascribes to the CA the following errors, to wit:
I.
THE RESPONDENT COURT OF APPEALS SERIOUSLY ERRED
IN RULING THAT PETITIONER FAILED TO EXPLAIN WHY IT
DID NOT AVAIL OF THE OTHER REMEDIES ENUMERATED
UNDER SECTION 1 RULE 47 OF THE 1997 RULES ON CIVIL
PROCEDURE.
II.
 THE RESPONDENT COURT OF APPEALS SERIOUSLY ERRED
IN RULING THAT PETITIONER COULD HAVE ASSAILED THE
DEED OF SALE AND QUESTIONED THE FORECLOSURE
PROCEEDINGS OR SOUGHT THE QUIETING OF TITLE TO THE
SUBJECT PROPERTY.
The decisive query is whether the action for annulment of
judgment under Rule 47 was a proper recourse for the petitioner to
set aside the decision rendered in Civil Case No. MAN-2838.
Ruling
We deny the petition for review.
I.
A petition for annulment of judgment is a remedy in equity
so exceptional in nature that it may be availed of only
when other remedies are wanting, and only if the
judgment, final order or final resolution sought to be
annulled was rendered by a court lacking jurisdiction or
through extrinsic fraud.8 Yet, the remedy, being exceptional
in character, is not allowed to be so easily and readily
abused by parties aggrieved by the final judgments, orders
or resolutions.9 The Court has thus instituted safeguards by
limiting the grounds for the annulment to lack of
jurisdiction and extrinsic fraud, and by prescribing in
Section 110 of Rule 47 of theRules of Court that the
petitioner should show that the ordinary remedies of new
trial, appeal, petition for relief or other appropriate
remedies are no longer available through no fault of the
petitioner.11 A petition for annulment that ignores or
disregards any of the safeguards cannot prosper.
The attitude of judicial reluctance towards the annulment
of a judgment, final order or final resolution is
understandable, for the remedy disregards the time-
honored doctrine of immutability and unalterability of final
judgments, a solid corner stone in the dispensation of
justice by the courts. The doctrine of immutability and
unalterability serves a two-fold purpose, namely: (a) to
avoid delay in the administration of justice and thus,
procedurally, to make orderly the discharge of judicial
business; and (b) to put an end to judicial controversies, at
the risk of occasional errors, which is precisely why the
courts exist.12 As to the first, a judgment that has acquired
finality becomes immutable and unalterable and is no
longer to be modified in any respect even if the
modification is meant to correct an erroneous conclusion of
fact or of law, and whether the modification is made by the
court that rendered the decision or by the highest court of
the land.13 As to the latter, controversies cannot drag on
indefinitely because fundamental considerations of public
policy and sound practice demand that the rights and
obligations of every litigant must not hang in suspense for
an indefinite period of time.14
II.
We uphold the CAs dismissal of the petitioners action for
annulment of judgment based on the foregoing
considerations.
It is elementary that a judgment of a court is conclusive
and binding only upon the parties and those who are their
successors in interest by title after the commencement of
the action in court.15 Section 47(b) of Rule 39 of the Rules
of Court explicitly so provides, to wit:
Section 47. Effect of judgments or final orders .The effect of a
judgment or final order rendered by a court of the Philippines,
having jurisdiction to pronounce the judgment or final order, may
be as follows:
xxxx
(b) In other cases, the judgment or final order is, with respect
to the matter directly adjudged or as to any other matter that
could have been raised in relation thereto, conclusive between
the parties and their successors in interest by title
subsequent to the commencement of the action or special
proceeding, litigating for the same thing and under the same title
and in the same capacity; xxx.
The principle that a person cannot be prejudiced by a ruling
rendered in an action or proceeding in which he has not been
made a party conforms to the constitutional guarantee of due
process of law. The operation of this principle was illustrated
in Muoz v. Yabut, Jr.,16 where the Court declared that a person not
impleaded and given the opportunity to take part in the
proceedings was not bound by the decision declaring as null and
void the title from which his title to the property had been derived.
We said there that the effect of a judgment could not be extended
to non-parties by simply issuing an alias writ of execution against
them, for no man should be prejudiced by any proceeding to which
he was a stranger. In the same manner, a writ of execution could
be issued only against a party, not against a person who did not
have his day in court.17
Accordingly, the petitioners resort to annulment of judgment
under Rule 47 was unnecessary if, after all, the judgment rendered
in Civil Case No. MAN-2838 did not prejudice it.
Moreover, Section 1 of Rule 47 extends the remedy of annulment
only to a party in whose favor the remedies of new trial,
reconsideration, appeal, and petition for relief from judgment are
no longer available through no fault of said party. As such, the
petitioner, being a non-party in Civil Case No. MAN-2838, could not
bring the action for annulment of judgment due to unavailability to
it of the remedies of new trial, reconsideration, appeal, or setting
the judgment aside through a petition for relief.
The petitioner probably brought the action for annulment upon its
honest belief that the action was its remaining recourse from a
perceived commission of extrinsic fraud against it. It is worthwhile
for the petitioner to ponder, however, that permitting it despite its
being a non-party in Civil Case No. MAN-2838 to avail itself of the
remedy of annulment of judgment would not help it in any
substantial way. Although Rule 47 would initially grant relief to it
from the effects of the annulled judgment, the decision of the CA
would not really and finally determine the rights of the petitioner in
the property as against the competing rights of the original parties.
To be borne in mind is that the annulment of judgment is an
equitable relief not because a party-litigant thereby gains another
opportunity to reopen the already-final judgment but because a
party-litigant is enabled to be discharged from the burden of being
bound by a judgment that was an absolute nullity to begin with. 18
We agree with the CAs suggestion that the petitioners proper
recourse was either an action for quieting of title or an action for
reconveyance of the property. It is timely for the Court to remind
that the petitioner will be better off if it should go to the courts to
obtain relief through the proper recourse; otherwise, it would waste
its own time and effort, aside from thereby unduly burdening the
dockets of the courts.
The petitioner may vindicate its rights in the property through an
action for quieting of title, a common law remedy designed for the
removal of any cloud upon, or doubt, or uncertainty affecting title
to real property. The action for quieting of title may be brought
whenever there is a cloud on title to real property or any interest in
real property by reason of any instrument, record, claim,
encumbrance, or proceeding that is apparently valid or effective,
but is, in truth and in fact, invalid, ineffective, voidable, or
unenforceable, and may be prejudicial to said title. In the action,
the competent court is tasked to determine the respective rights of
the plaintiff and the other claimants, not only to put things in their
proper places, and make the claimant, who has no rights to the
immovable, respect and not disturb the one so entitled, but also for
the benefit of both, so that whoever has the right will see every
cloud of doubt over the property dissipated, and he can thereafter
fearlessly introduce any desired improvements, as well as use, and
even abuse the property.19
The other proper remedy the CA suggested was an action for
reconveyance of property.1wphi1 According to Vda. de Recinto v.
Inciong,20 the remedy belongs to the landowner whose property
has been wrongfully or erroneously registered in another persons
name, and such landowner demands the reconveyance of the
property in the proper court of justice. If the property has
meanwhile passed into the hands of an innocent purchaser for
value, the landowner may seek damages. In either situation, the
landowner respects the decree as incontrovertible and no longer
open to review provided the one-year period from the land coming
under the operation of the Torrens System of land registration
already passed.
WHEREFORE the Court AFFIRMS the decision of the Court of
Appeals promulgated on June 19, 2001; andDIRECTS the
petitioner to pay the costs of suit.
SO ORDERED.
DEVELOPMENT BANK OF THE
PHILIPPINES, Petitioner,
vs.
GUARIA AGRICULTURAL AND REALTY
DEVELOPMENT CORPORATION, Respondent.
DECISION
BERSAMIN, J.:
The foreclosure of a mortgage prior to the mortgagor's default on
the principal obligation is premature, and should be undone for
being void and ineffectual. The mortgagee who has been
meanwhile given possession of the mortgaged property by virtue
of a writ of possession issued to it as the purchaser at the
foreclosure sale may be required to restore the possession of the
property to the mortgagor and to pay reasonable rent for the use
of the property during the intervening period.
The Case
In this appeal, Development Bank of the Philippines (DBP) seeks
the reversal of the adverse decision promulgated on March 26,
2003 in C.A.-G.R. CV No. 59491,1 whereby the Court of Appeals
(CA) upheld the judgment rendered on January 6, 1998 2 by the
Regional Trial Court, Branch 25, in Iloilo City (RTC) annulling the
extra-judicial foreclosure of the real estate and chattel mortgages
at the instance of DBP because the debtor-mortgagor, Guaria
Agricultural and Realty Development Corporation (Guaria
Corporation), had not yet defaulted on its obligations in favor of
DBP.
Antecedents
In July 1976, Guaria Corporation applied for a loan from DBP to
finance the development of its resort complex situated in Trapiche,
Oton, Iloilo. The loan, in the amount of P3,387,000.00, was
approved on August 5, 1976.3Guaria Corporation executed a
promissory note that would be due on November 3, 1988. 4 On
October 5, 1976, Guaria Corporation executed a real estate
mortgage over several real properties in favor of DBP as security
for the repayment of the loan. On May 17, 1977, Guaria
Corporation executed a chattel mortgage over the personal
properties existing at the resort complex and those yet to be
acquired out of the proceeds of the loan, also to secure the
performance of the obligation.5 Prior to the release of the loan, DBP
required Guaria Corporation to put up a cash equity
of P1,470,951.00 for the construction of the buildings and other
improvements on the resort complex.
The loan was released in several instalments, and Guaria
Corporation used the proceeds to defray the cost of additional
improvements in the resort complex. In all, the amount released
totalled P3,003,617.49, from which DBP withheld P148,102.98 as
interest.6
Guaria Corporation demanded the release of the balance of the
loan, but DBP refused. Instead, DBP directly paid some suppliers of
Guaria Corporation over the latter's objection. DBP found upon
inspection of the resort project, its developments and
improvements that Guaria Corporation had not completed the
construction works.7In a letter dated February 27, 1978,8 and a
telegram dated June 9, 1978,9 DBP thus demanded that Guaria
Corporation expedite the completion of the project, and warned
that it would initiate foreclosure proceedings should Guaria
Corporation not do so.10
Unsatisfied with the non-action and objection of Guaria
Corporation, DBP initiated extrajudicial foreclosure proceedings. A
notice of foreclosure sale was sent to Guaria Corporation. The
notice was eventually published, leading the clients and patrons of
Guaria Corporation to think that its business operation had slowed
down, and that its resort had already closed.11
On January 6, 1979, Guaria Corporation sued DBP in the RTC to
demand specific performance of the latter's obligations under the
loan agreement, and to stop the foreclosure of the mortgages (Civil
Case No. 12707).12However, DBP moved for the dismissal of the
complaint, stating that the mortgaged properties had already been
sold to satisfy the obligation of Guaria Corporation at a public
auction held on January 15, 1979 at the Costa Mario Resort Beach
Resort in Oton, Iloilo.13 Due to this, Guaria Corporation amended
the complaint on February 6, 197914 to seek the nullification of the
foreclosure proceedings and the cancellation of the certificate of
sale. DBP filed its answer on December 17, 1979, 15 and trial
followed upon the termination of the pre-trial without any
agreement being reached by the parties.16
In the meantime, DBP applied for the issuance of a writ of
possession by the RTC. At first, the RTC denied the application but
later granted it upon DBP's motion for reconsideration. Aggrieved,
Guaria Corporation assailed the granting of the application before
the CA on certiorari (C.A.-G.R. No. 12670-SP entitled Guaria
Agricultural and Realty Development Corporation v. Development
Bank of the Philippines). After the CA dismissed the petition for
certiorari, DBP sought the implementation of the order for the
issuance of the writ of possession. Over Guaria Corporation's
opposition, the RTC issued the writ of possession on June 16,
1982.17
Judgment of the RTC
On January 6, 1998, the RTC rendered its judgment in Civil Case
No. 12707, disposing as follows:
WHEREFORE, premises considered, the court hereby resolves that
the extra-judicial sales of the mortgaged properties of the plaintiff
by the Office of the Provincial Sheriff of Iloilo on January 15, 1979
are null and void, so with the consequent issuance of certificates of
sale to the defendant of said properties, the registration thereof
with the Registry of Deeds and the issuance of the transfer
certificates of title involving the real property in its name.
It is also resolved that defendant give back to the plaintiff or its
representative the actual possession and enjoyment of all the
properties foreclosed and possessed by it. To pay the plaintiff the
reasonable rental for the use of its beach resort during the period
starting from the time it (defendant) took over its occupation and
use up to the time possession is actually restored to the plaintiff.
And, on the part of the plaintiff, to pay the defendant the loan it
obtained as soon as it takes possession and management of the
beach resort and resume its business operation.
Furthermore, defendant is ordered to pay plaintiff's attorney's fee
of P50,000.00.
So ORDERED.18
Decision of the CA
On appeal (C.A.-G.R. CV No. 59491), DBP challenged the judgment
of the RTC, and insisted that:
I
THE TRIAL COURT ERRED AND COMMITTED REVERSIBLE ERROR IN
DECLARING DBP'S FORECLOSURE OF THE MORTGAGED
PROPERTIES AS INVALID AND UNCALLED FOR.
II
THE TRIAL COURT GRIEVOUSLY ERRED IN HOLDING THE GROUNDS
INVOKED BY DBP TO JUSTIFY FORECLOSURE AS "NOT SUFFICIENT."
ON THE CONTRARY, THE MORTGAGE WAS FORECLOSED BY
EXPRESS AUTHORITY OF PARAGRAPH NO. 4 OF THE MORTGAGE
CONTRACT AND SECTION 2 OF P.D. 385 IN ADDITION TO THE
QUESTIONED PAR. NO. 26 PRINTED AT THE BACK OF THE FIRST
PAGE OF THE MORTGAGE CONRACT.
III
THE TRIAL COURT ERRED IN HOLDING THE SALES OF THE
MORTGAGED PROPERTIES TO DBP AS INVALID UNDER ARTICLES
2113 AND 2141 OF THE CIVIL CODE.
IV
THE TRIAL COURT GRAVELY ERRED AND COMMITTED [REVERSIBLE]
ERROR IN ORDERING DBP TO RETURN TO PLAINTIFF THE ACTUAL
POSSESSION AND ENJOYMENT OF ALL THE FORECLOSED
PROPERTIES AND TO PAY PLAINTIFF REASONABLE RENTAL FOR THE
USE OF THE FORECLOSED BEACH RESORT.
V
THE TRIAL COURT ERRED IN AWARDING ATTORNEY'S FEES AGAINST
DBP WHICH MERELY EXERCISED ITS RIGHTS UNDER THE
MORTGAGE CONTRACT.19
In its decision promulgated on March 26, 2003, 20 however, the CA
sustained the RTC's judgment but deleted the award of attorney's
fees, decreeing:
WHEREFORE, in view of the foregoing, the Decision dated January
6, 1998, rendered by the Regional Trial Court of Iloilo City, Branch
25 in Civil Case No. 12707 for Specific Performance with
Preliminary Injunction is hereby AFFIRMED with MODIFICATION, in
that the award for attorney's fees is deleted.
SO ORDERED.21
DBP timely filed a motion for reconsideration, but the CA denied its
motion on October 9, 2003.
Hence, this appeal by DBP.
Issues
DBP submits the following issues for consideration, namely:
WHETHER OR NOT THE DECISION OF THE COURT OF APPEALS
DATED MARCH 26, 2003 AND ITS RESOLUTION DATED OCTOBER 9,
DENYING PETITIONER'S MOTION FOR RECONSIDERATION WERE
ISSUED IN ACCORDANCE WITH LAW, PREVAILING JURISPRUDENTIAL
DECISION AND SUPPORTED BY EVIDENCE;
WHETHER OR NOT THE HONORABLE COURT OF APPEALS ADHERED
TO THE USUAL COURSE OF JUDICIAL PROCEEDINGS IN DECIDING
C.A.-G.R. CV NO. 59491 AND THEREFORE IN ACCORDANCE WITH
THE "LAW OF THE CASE DOCTRINE."22
Ruling
The appeal lacks merit.
1.
Findings of the CA were supported by the
evidence as well as by law and jurisprudence
DBP submits that the loan had been granted under its supervised
credit financing scheme for the development of a beach resort, and
the releases of the proceeds would be subject to conditions that
included the verification of the progress of works in the project to
forestall diversion of the loan proceeds; and that under Stipulation
No. 26 of the mortgage contract, further loan releases would be
terminated and the account would be considered due and
demandable in the event of a deviation from the purpose of the
loan,23 including the failure to put up the required equity and the
diversion of the loan proceeds to other purposes.24 It assails the
declaration by the CA that Guaria Corporation had not yet been in
default in its obligations despite violations of the terms of the
mortgage contract securing the promissory note.
Guaria Corporation counters that it did not violate the terms of
the promissory note and the mortgage contracts because DBP had
fully collected the interest notwithstanding that the principal
obligation did not yet fall due and become demandable. 25
The submissions of DBP lack merit and substance.
The agreement between DBP and Guaria Corporation was a loan.
Under the law, a loan requires the delivery of money or any other
consumable object by one party to another who acquires
ownership thereof, on the condition that the same amount or
quality shall be paid.26 Loan is a reciprocal obligation, as it arises
from the same cause where one party is the creditor, and the other
the debtor.27 The obligation of one party in a reciprocal obligation is
dependent upon the obligation of the other, and the performance
should ideally be simultaneous. This means that in a loan, the
creditor should release the full loan amount and the debtor repays
it when it becomes due and demandable.28
In its assailed decision, the CA found and held thusly:
xxxx
x x x It is undisputed that appellee obtained a loan from appellant,
and as security, executed real estate and chattel mortgages.
However, it was never established that appellee was already in
default. Appellant, in a telegram to the appellee reminded the
latter to make good on its construction works, otherwise, it would
foreclose the mortgage it executed. It did not mention that
appellee was already in default. The records show that appellant
did not make any demand for payment of the promissory note. It
appears that the basis of the foreclosure was not a default on the
loan but appellee's failure to complete the project in accordance
with appellant's standards. In fact, appellant refused to release the
remaining balance of the approved loan after it found that the
improvements introduced by appellee were below appellant's
expectations.
The loan agreement between the parties is a reciprocal obligation.
Appellant in the instant case bound itself to grant appellee the loan
amount of P3,387,000.00 condition on appellee's payment of the
amount when it falls due. Furthermore, the loan was evidenced by
the promissory note which was secured by real estate mortgage
over several properties and additional chattel mortgage. Reciprocal
obligations are those which arise from the same cause, and in
which each party is a debtor and a creditor of the other, such that
the obligation of one is dependent upon the obligation of the other
(Areola vs. Court of Appeals, 236 SCRA 643). They are to be
performed simultaneously such that the performance of one is
conditioned upon the simultaneous fulfilment of the other (Jaime
Ong vs. Court of Appeals, 310 SCRA 1). The promise of appellee to
pay the loan upon due date as well as to execute sufficient security
for said loan by way of mortgage gave rise to a reciprocal
obligation on the part of appellant to release the entire approved
loan amount. Thus, appellees are entitled to receive the total loan
amount as agreed upon and not an incomplete amount.
The appellant did not release the total amount of the approved
loan. Appellant therefore could not have made a demand for
payment of the loan since it had yet to fulfil its own obligation.
Moreover, the fact that appellee was not yet in default rendered
the foreclosure proceedings premature and improper.
The properties which stood as security for the loan were foreclosed
without any demand having been made on the principal obligation.
For an obligation to become due, there must generally be a
demand. Default generally begins from the moment the creditor
demands the performance of the obligation. Without such demand,
judicial or extrajudicial, the effects of default will not arise
(Namarco vs. Federation of United Namarco Distributors, Inc., 49
SCRA 238; Borje vs. CFI of Misamis Occidental, 88 SCRA 576).
xxxx
Appellant also admitted in its brief that it indeed failed to release
the full amount of the approved loan. As a consequence, the real
estate mortgage of appellee becomes unenforceable, as it cannot
be entirely foreclosed to satisfy appellee's total debt to appellant
(Central Bank of the Philippines vs. Court of Appeals, 139 SCRA
46).
Since the foreclosure proceedings were premature and
unenforceable, it only follows that appellee is still entitled to
possession of the foreclosed properties. However, appellant took
possession of the same by virtue of a writ of possession issued in
its favor during the pendency of the case. Thus, the trial court
correctly ruled when it ordered appellant to return actual
possession of the subject properties to appellee or its
representative and to pay appellee reasonable rents.
However, the award for attorney's fees is deleted. As a rule, the
award of attorney's fees is the exception rather than the rule and
counsel's fees are not to be awarded every time a party wins a
suit. Attorney's fees cannot be recovered as part of damages
because of the policy that no premium should be placed on the
right to litigate (Pimentel vs. Court of Appeals, et al., 307 SCRA
38).29
xxxx
We uphold the CA.
To start with, considering that the CA thereby affirmed the factual
findings of the RTC, the Court is bound to uphold such findings, for
it is axiomatic that the trial court's factual findings as affirmed by
the CA are binding on appeal due to the Court not being a trier of
facts.
Secondly, by its failure to release the proceeds of the loan in their
entirety, DBP had no right yet to exact on Guaria Corporation the
latter's compliance with its own obligation under the loan. Indeed,
if a party in a reciprocal contract like a loan does not perform its
obligation, the other party cannot be obliged to perform what is
expected of it while the other's obligation remains unfulfilled. 30 In
other words, the latter party does not incur delay.31
Still, DBP called upon Guaria Corporation to make good on the
construction works pursuant to the acceleration clause written in
the mortgage contract (i.e., Stipulation No. 26),32 or else it would
foreclose the mortgages.
DBP's actuations were legally unfounded. It is true that loans are
often secured by a mortgage constituted on real or personal
property to protect the creditor's interest in case of the default of
the debtor. By its nature, however, a mortgage remains an
accessory contract dependent on the principal obligation, 33 such
that enforcement of the mortgage contract will depend on whether
or not there has been a violation of the principal obligation. While a
creditor and a debtor could regulate the order in which they should
comply with their reciprocal obligations, it is presupposed that in a
loan the lender should perform its obligation - the release of the
full loan amount - before it could demand that the borrower repay
the loaned amount. In other words, Guaria Corporation would not
incur in delay before DBP fully performed its reciprocal obligation. 34
Considering that it had yet to release the entire proceeds of the
loan, DBP could not yet make an effective demand for payment
upon Guaria Corporation to perform its obligation under the loan.
According to Development Bank of the Philippines v. Licuanan,35 it
would only be when a demand to pay had been made and was
subsequently refused that a borrower could be considered in
default, and the lender could obtain the right to collect the debt or
to foreclose the mortgage.1wphi1 Hence, Guaria Corporation
would not be in default without the demand.
Assuming that DBP could already exact from the latter its
compliance with the loan agreement, the letter dated February 27,
1978 that DBP sent would still not be regarded as a demand to
render Guaria Corporation in default under the principal contract
because DBP was only thereby requesting the latter "to put up the
deficiency in the value of improvements."36
Under the circumstances, DBP's foreclosure of the mortgage and
the sale of the mortgaged properties at its instance were
premature, and, therefore, void and ineffectual.37
Being a banking institution, DBP owed it to Guaria Corporation to
exercise the highest degree of diligence, as well as to observe the
high standards of integrity and performance in all its transactions
because its business was imbued with public interest. 38 The high
standards were also necessary to ensure public confidence in the
banking system, for, according to Philippine National Bank v.
Pike:39 "The stability of banks largely depends on the confidence of
the people in the honesty and efficiency of banks." Thus, DBP had
to act with great care in applying the stipulations of its agreement
with Guaria Corporation, lest it erodes such public confidence. Yet,
DBP failed in its duty to exercise the highest degree of diligence by
prematurely foreclosing the mortgages and unwarrantedly causing
the foreclosure sale of the mortgaged properties despite Guaria
Corporation not being yet in default. DBP wrongly relied on
Stipulation No. 26 as its basis to accelerate the obligation of
Guaria Corporation, for the stipulation was relevant to an
Omnibus Agricultural Loan, to Guaria Corporation's loan which
was intended for a project other than agricultural in nature.
Even so, Guaria Corporation did not elevate the actionability of
DBP's negligence to the CA, and did not also appeal the CA's
deletion of the award of attorney's fees allowed by the
RTC.1wphi1 With the decision of the CA consequently becoming
final and immutable as to Guaria Corporation, we will not delve
any further on DBP's actionable actuations.
2.
The doctrine of law of the case
did not apply herein
DBP insists that the decision of the CA in C.A.-G.R. No. 12670-SP
already constituted the law of the case. Hence, the CA could not
decide the appeal in C.A.-G.R. CV No. 59491 differently.
Guaria Corporation counters that the ruling in C.A.-G.R. No.
12670-SP did not constitute the law of the case because C.A.-G.R.
No. 12670-SP concerned the issue of possession by DBP as the
winning bidder in the foreclosure sale, and had no bearing
whatsoever to the legal issues presented in C.A.-G.R. CV No.
59491.
Law of the case has been defined as the opinion delivered on a
former appeal, and means, more specifically, that whatever is once
irrevocably established as the controlling legal rule of decision
between the same parties in the same case continues to be the
law of the case, whether correct on general principles or not, so
long as the facts on which such decision was predicated continue
to be the facts of the case before the court.40
The concept of law of the case is well explained in Mangold v.
Bacon,41 an American case, thusly:
The general rule, nakedly and boldly put, is that legal conclusions
announced on a first appeal, whether on the general law or the law
as applied to the concrete facts, not only prescribe the duty and
limit the power of the trial court to strict obedience and conformity
thereto, but they become and remain the law of the case in all
other steps below or above on subsequent appeal. The rule is
grounded on convenience, experience, and reason. Without the
rule there would be no end to criticism, reagitation, reexamination,
and reformulation. In short, there would be endless litigation. It
would be intolerable if parties litigants were allowed to speculate
on changes in the personnel of a court, or on the chance of our
rewriting propositions once gravely ruled on solemn argument and
handed down as the law of a given case. An itch to reopen
questions foreclosed on a first appeal would result in the
foolishness of the inquisitive youth who pulled up his corn to see
how it grew. Courts are allowed, if they so choose, to act like
ordinary sensible persons. The administration of justice is a
practical affair. The rule is a practical and a good one of frequent
and beneficial use.
The doctrine of law of the case simply means, therefore, that when
an appellate court has once declared the law in a case, its
declaration continues to be the law of that case even on a
subsequent appeal, notwithstanding that the rule thus laid down
may have been reversed in other cases.42 For practical
considerations, indeed, once the appellate court has issued a
pronouncement on a point that was presented to it with full
opportunity to be heard having been accorded to the parties, the
pronouncement should be regarded as the law of the case and
should not be reopened on remand of the case to determine other
issues of the case, like damages.43 But the law of the case, as the
name implies, concerns only legal questions or issues thereby
adjudicated in the former appeal.
The foregoing understanding of the concept of the law of the case
exposes DBP's insistence to be unwarranted.

To start with, the ex parte proceeding on DBP's application for the

issuance of the writ of possession was entirely independent from
the judicial demand for specific performance herein. In fact, C.A.-
G.R. No. 12670-SP, being the interlocutory appeal concerning the
issuance of the writ of possession while the main case was
pending, was not at all intertwined with any legal issue properly
raised and litigated in C.A.-G.R. CV No. 59491, which was the
appeal to determine whether or not DBP's foreclosure was valid
and effectual. And, secondly, the ruling in C.A.-G.R. No. 12670-SP
did not settle any question of law involved herein because this
case for specific performance was not a continuation of C.A.-G.R.
No. 12670-SP (which was limited to the propriety of the issuance of
the writ of possession in favor of DBP), and vice versa.

3.
Guarifia Corporation is legally entitled to the
restoration of the possession of the resort complex
and payment of reasonable rentals by DBP

Having found and pronounced that the extrajudicial foreclosure by

DBP was premature, and that the ensuing foreclosure sale was void
and ineffectual, the Court affirms the order for the restoration of
possession to Guarifia Corporation and the payment of reasonable
rentals for the use of the resort. The CA properly held that the
premature and invalid foreclosure had unjustly dispossessed
Guarifia Corporation of its properties. Consequently, the restoration
of possession and the payment of reasonable rentals were in
accordance with Article 561 of the Civil Code, which expressly
states that one who recovers, according to law, possession unjustly
lost shall be deemed for all purposes which may redound to his
benefit to have enjoyed it without interruption.

WHEREFORE, the Court AFFIRMS the decision promulgated on

March 26, 2003; and ORDERS the petitioner to pay the costs of
suit. DOMINGO NEYPES, LUZ FAUSTINO, ROGELIO
FAUSTINO, LOLITO VICTORIANO, JACOB
SO ORDERED. OBANIA AND DOMINGO
CABACUNGAN, Petitioners,
vs.
HON. COURT OF APPEALS, HEIRS OF
BERNARDO DEL MUNDO, namely: FE,
CORAZON, JOSEFA, SALVADOR and CARMEN,
all surnamed DEL MUNDO, LAND BANK OF
THE PHILIPPINES AND HON. ANTONIO N.
ROSALES, Presiding Judge, Branch 43,
Regional Trial Court, Roxas, Oriental
Mindoro,Respondent.
DECISION
CORONA, J.:
Petitioners Domingo Neypes, Luz Faustino, Rogelio Faustino, Lolito
Victoriano, Jacob Obania and Domingo Cabacungan filed an action
for annulment of judgment and titles of land and/or reconveyance
and/or reversion with preliminary injunction before the Regional
Trial Court, Branch 43, of Roxas, Oriental Mindoro, against the
Bureau of Forest Development, Bureau of Lands, Land Bank of the
Philippines and the heirs of Bernardo del Mundo, namely, Fe,
Corazon, Josefa, Salvador and Carmen.
In the course of the proceedings, the parties (both petitioners and
respondents) filed various motions with the trial court. Among
these were: (1) the motion filed by petitioners to declare the
respondent heirs, the Bureau of Lands and the Bureau of Forest
Development in default and (2) the motions to dismiss filed by the
respondent heirs and the Land Bank of the Philippines,
respectively.
In an order dated May 16, 1997, the trial court, presided by public
respondent Judge Antonio N. Rosales, resolved the foregoing
motions as follows: (1) the petitioners motion to declare
respondents Bureau of Lands and Bureau of Forest Development in
default was granted for their failure to file an answer, but denied as
against the respondent heirs of del Mundo because the substituted
service of summons on them was improper; (2) the Land Banks
motion to dismiss for lack of cause of action was denied because
there were hypothetical admissions and matters that could be
determined only after trial, and (3) the motion to dismiss filed by
respondent heirs of del Mundo, based on prescription, was also
denied because there were factual matters that could be
determined only after trial.1
The respondent heirs filed a motion for reconsideration of the order
denying their motion to dismiss on the ground that the trial court
could very well resolve the issue of prescription from the bare
allegations of the complaint itself without waiting for the trial
proper.
In an order2 dated February 12, 1998, the trial court dismissed
petitioners complaint on the ground that the action had already
prescribed. Petitioners allegedly received a copy of the order of
dismissal on March 3, 1998 and, on the 15th day thereafter or on
March 18, 1998, filed a motion for reconsideration. On July 1, 1998,
the trial court issued another order dismissing the motion for
reconsideration3 which petitioners received on July 22, 1998. Five
days later, on July 27, 1998, petitioners filed a notice of
appeal4 and paid the appeal fees on August 3, 1998.
On August 4, 1998, the court a quo denied the notice of appeal,
holding that it was filed eight days late. 5 This was received by
petitioners on July 31, 1998. Petitioners filed a motion for
reconsideration but this too was denied in an order dated
September 3, 1998.6
Via a petition for certiorari and mandamus under Rule 65 of the
1997 Rules of Civil Procedure, petitioners assailed the dismissal of
the notice of appeal before the Court of Appeals.
In the appellate court, petitioners claimed that they had
seasonably filed their notice of appeal. They argued that the 15-
day reglementary period to appeal started to run only on July 22,
1998 since this was the day they received the final order of the
trial court denying their motion for reconsideration. When they
filed their notice of appeal on July 27, 1998, only five days had
elapsed and they were well within the reglementary period for
appeal.7
On September 16, 1999, the Court of Appeals (CA) dismissed the
petition. It ruled that the 15-day period to appeal should have been
reckoned from March 3, 1998 or the day they received the
February 12, 1998 order dismissing their complaint. According to
the appellate court, the order was the "final order" appealable
under the Rules. It held further:
Perforce the petitioners tardy appeal was correctly dismissed for
the (P)erfection of an appeal within the reglementary period and in
the manner prescribed by law is jurisdictional and non-compliance
with such legal requirement is fatal and effectively renders the
judgment final and executory.8
Petitioners filed a motion for reconsideration of the aforementioned
decision. This was denied by the Court of Appeals on January 6,
2000.
In this present petition for review under Rule 45 of the Rules,
petitioners ascribe the following errors allegedly committed by the
appellate court:
I The foregoing issues essentially revolve around the period within
THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING THE
PETITIONERS PETITION FOR CERTIORARI AND MANDAMUS AND IN
AFFIRMING THE ORDER OF THE HON. JUDGE ANTONIO N. ROSALES
WHICH DISMISSED THE PETITIONERS APPEAL IN CIVIL CASE NO. C-
36 OF THE REGIONAL TRIAL COURT, BRANCH 43, ROXAS, ORIENTAL
MINDORO, EVEN AFTER THE PETITIONERS HAD PAID THE APPEAL
DOCKET FEES.
II
THE HONORABLE COURT OF APPEALS LIKEWISE ERRED IN RULING
AND AFFIRMING THE DECISION OR ORDER OF THE RESPONDENT
HON. ANTONIO M. ROSALES THAT PETITIONERS APPEAL WAS FILED
OUT OF TIME WHEN PETITIONERS RECEIVED THE LAST OR FINAL
ORDER OF THE COURT ON JULY 22, 1998 AND FILED THEIR NOTICE
OF APPEAL ON JULY 27, 1998 AND PAID THE APPEAL DOCKET FEE
ON AUGUST 3, 1998.
III
THE HONORABLE COURT OF APPEALS FURTHER ERRED IN RULING
THAT THE WORDS "FINAL ORDER" IN SECTION 3, RULE 41, OF THE
1997 RULES OF CIVIL PROCEDURE WILL REFER TO THE [FIRST]
ORDER OF RESPONDENT JUDGE HON. ANTONIO M. MORALES
DATED FEBRUARY 12, 1998 INSTEAD OF THE LAST AND FINAL
ORDER DATED JULY 1, 1998 COPY OF WHICH WAS RECEIVED BY
PETITIONERS THROUGH COUNSEL ON JULY 22, 1998.
IV.
THE HONORABLE COURT OF APPEALS FINALLY ERRED IN FINDING
THAT THE DECISION IN THE CASE OF DENSO, INC. V. IAC, 148 SCRA
280, IS APPLICABLE IN THE INSTANT CASE THEREBY IGNORING THE
PECULIAR FACTS AND CIRCUMSTANCES OF THIS CASE AND THE
FACT THAT THE SAID DECISION WAS RENDERED PRIOR TO THE
ENACTMENT OF THE 1997 RULES OF CIVIL PROCEDURE. 9
which petitioners should have filed their notice of appeal.
First and foremost, the right to appeal is neither a natural right nor
a part of due process. It is merely a statutory privilege and may be
exercised only in the manner and in accordance with the provisions
of law. Thus, one who seeks to avail of the right to appeal must
comply with the requirements of the Rules. Failure to do so often
leads to the loss of the right to appeal.10 The period to appeal is
fixed by both statute and procedural rules. BP 129,11as amended,
provides:
Sec. 39. Appeals. The period for appeal from final orders,
resolutions, awards, judgments, or decisions of any court in all
these cases shall be fifteen (15) days counted from the notice of
the final order, resolution, award, judgment, or decision appealed
from. Provided, however, that in habeas corpus cases, the period
for appeal shall be (48) forty-eight hours from the notice of
judgment appealed from. x x x
Rule 41, Section 3 of the 1997 Rules of Civil Procedure states:
SEC. 3. Period of ordinary appeal. The appeal shall be taken
within fifteen (15) days from the notice of the judgment or
final order appealed from. Where a record on appeal is required,
the appellant shall file a notice of appeal and a record on appeal
within thirty (30) days from the notice of judgment or final order.
The period to appeal shall be interrupted by a timely motion for
new trial or reconsideration. No motion for extension of time to file
a motion for new trial or reconsideration shall be allowed.
(emphasis supplied)
Based on the foregoing, an appeal should be taken within 15 days
from the notice of judgment or final order appealed from. A final
judgment or order is one that finally disposes of a case, leaving
nothing more for the court to do with respect to it. It is an
adjudication on the merits which, considering the evidence
presented at the trial, declares categorically what the rights and
obligations of the parties are; or it may be an order or judgment
that dismisses an action.12
As already mentioned, petitioners argue that the order of July 1,
1998 denying their motion for reconsideration should be construed
as the "final order," not the February 12, 1998 order which
dismissed their complaint. Since they received their copy of the
denial of their motion for reconsideration only on July 22, 1998, the
15-day reglementary period to appeal had not yet lapsed when
they filed their notice of appeal on July 27, 1998.
What therefore should be deemed as the "final order," receipt of
which triggers the start of the 15-day reglementary period to
appeal the February 12, 1998 order dismissing the complaint or
the July 1, 1998 order dismissing the MR?
In the recent case of Quelnan v. VHF Philippines, Inc.,13 the trial
court declared petitioner Quelnan non-suited and accordingly
dismissed his complaint. Upon receipt of the order of dismissal, he
filed an omnibus motion to set it aside. When the omnibus motion
was filed, 12 days of the 15-day period to appeal the order had
lapsed. He later on received another order, this time dismissing his
omnibus motion. He then filed his notice of appeal. But this was
likewise dismissed for having been filed out of time.
The court a quo ruled that petitioner should have appealed within
15 days after the dismissal of his complaint since this was the final
order that was appealable under the Rules. We reversed the trial
court and declared that it was the denial of the motion for
reconsideration of an order of dismissal of a complaint which
constituted the final order as it was what ended the issues raised
there.
This pronouncement was reiterated in the more recent case
of Apuyan v. Haldeman et al.14 where we again considered the
order denying petitioner Apuyans motion for reconsideration as
the final order which finally disposed of the issues involved in the
case.
Based on the aforementioned cases, we sustain petitioners view
that the order dated July 1, 1998 denying their motion for
reconsideration was the final order contemplated in the Rules.
We now come to the next question: if July 1, 1998 was the start of
the 15-day reglementary period to appeal, did petitioners in fact
file their notice of appeal on time?
Under Rule 41, Section 3, petitioners had 15 days from notice of
judgment or final order to appeal the decision of the trial court. On
the 15th day of the original appeal period (March 18, 1998),
petitioners did not file a notice of appeal but instead opted to file a
motion for reconsideration. According to the trial court, the MR only
interrupted the running of the 15-day appeal period.15 It ruled that
petitioners, having filed their MR on the last day of the 15-day
reglementary period to appeal, had only one (1) day left to file the
notice of appeal upon receipt of the notice of denial of their MR.
Petitioners, however, argue that they were entitled under the Rules
to a fresh period of 15 days from receipt of the "final order" or the
order dismissing their motion for reconsideration.
In Quelnan and Apuyan, both petitioners filed a motion for
reconsideration of the decision of the trial court. We ruled there
that they only had the remaining time of the 15-day appeal period
to file the notice of appeal. We consistently applied this rule in
similar cases,16 premised on the long-settled doctrine that the
perfection of an appeal in the manner and within the period
permitted by law is not only mandatory but also
jurisdictional.17 The rule is also founded on deep-seated
considerations of public policy and sound practice that, at risk of
occasional error, the judgments and awards of courts must become
final at some definite time fixed by law.18
Prior to the passage of BP 129, Rule 41, Section 3 of the 1964
Revised Rules of Court read:
Sec. 3. How appeal is taken. Appeal maybe taken by serving
upon the adverse party and filing with the trial court within
thirty (30) days from notice of order or judgment, a notice
of appeal, an appeal bond, and a record on appeal. The time
during which a motion to set aside the judgment or order or for
new trial has been pending shall be deducted, unless such motion
fails to satisfy the requirements of Rule 37.
But where such motion has been filed during office hours of the
last day of the period herein provided, the appeal must be
perfected within the day following that in which the party
appealing received notice of the denial of said motion. 19 (emphasis
supplied)
According to the foregoing provision, the appeal period previously
consisted of 30 days. BP 129, however, reduced this appeal period
to 15 days. In the deliberations of the Committee on Judicial
Reorganization20 that drafted BP 129, the raison d etre behind the
amendment was to shorten the period of appeal21 and enhance the
efficiency and dispensation of justice. We have since required strict
observance of this reglementary period of appeal. Seldom have we
condoned late filing of notices of appeal,22 and only in very
exceptional instances to better serve the ends of justice.
In National Waterworks and Sewerage Authority and Authority v.
Municipality of Libmanan,23 however, we declared that appeal is an
essential part of our judicial system and the rules of procedure
should not be applied rigidly. This Court has on occasion advised
the lower courts to be cautious about not depriving a party of the
right to appeal and that every party litigant should be afforded the
amplest opportunity for the proper and just disposition of his
cause, free from the constraint of technicalities.
In de la Rosa v. Court of Appeals,24 we stated that, as a rule,
periods which require litigants to do certain acts must be followed
unless, under exceptional circumstances, a delay in the filing of an
appeal may be excused on grounds of substantial justice. There,
we condoned the delay incurred by the appealing party due to
strong considerations of fairness and justice.
In setting aside technical infirmities and thereby giving due course
to tardy appeals, we have not been oblivious to or unmindful of the
extraordinary situations that merit liberal application of the Rules.
In those situations where technicalities were dispensed with, our
decisions were not meant to undermine the force and effectivity of
the periods set by law. But we hasten to add that in those rare
cases where procedural rules were not stringently applied, there
always existed a clear need to prevent the commission of a grave
injustice. Our judicial system and the courts have always tried to
maintain a healthy balance between the strict enforcement of
procedural laws and the guarantee that every litigant be given the
full opportunity for the just and proper disposition of his cause. 25
The Supreme Court may promulgate procedural rules in all
courts.26 It has the sole prerogative to amend, repeal or even
establish new rules for a more simplified and inexpensive process,
and the speedy disposition of cases. In the rules governing appeals
to it and to the Court of Appeals, particularly Rules 42, 27 4328 and
45,29 the Court allows extensions of time, based on justifiable and
compelling reasons, for parties to file their appeals. These
extensions may consist of 15 days or more.
To standardize the appeal periods provided in the Rules and to
afford litigants fair opportunity to appeal their cases, the Court
deems it practical to allow a fresh period of 15 days within which to
file the notice of appeal in the Regional Trial Court, counted from
receipt of the order dismissing a motion for a new trial or motion
for reconsideration. 30
Henceforth, this "fresh period rule" shall also apply to Rule 40
governing appeals from the Municipal Trial Courts to the Regional
Trial Courts; Rule 42 on petitions for review from the Regional Trial
Courts to the Court of Appeals; Rule 43 on appeals from quasi-
judicial agencies31 to the Court of Appeals and Rule 45 governing
appeals by certiorari to the Supreme Court.32 The new rule aims to
regiment or make the appeal period uniform, to be counted from
receipt of the order denying the motion for new trial, motion for
reconsideration (whether full or partial) or any final order or
resolution.
We thus hold that petitioners seasonably filed their notice of
appeal within the fresh period of 15 days, counted from July 22,
1998 (the date of receipt of notice denying their motion for
reconsideration). This pronouncement is not inconsistent with Rule
41, Section 3 of the Rules which states that the appeal shall be
taken within 15 days from notice of judgment or final order
appealed from. The use of the disjunctive word "or" signifies
disassociation and independence of one thing from another. It
should, as a rule, be construed in the sense in which it ordinarily
implies.33 Hence, the use of "or" in the above provision supposes
that the notice of appeal may be filed within 15 days from the
notice of judgment or within 15 days from notice of the "final
order," which we already determined to refer to the July 1, 1998
order denying the motion for a new trial or reconsideration.
Neither does this new rule run counter to the spirit of Section 39 of
BP 129 which shortened the appeal period from 30 days to 15 days
to hasten the disposition of cases. The original period of appeal (in
this case March 3-18, 1998) remains and the requirement for strict
compliance still applies. The fresh period of 15 days becomes
significant only when a party opts to file a motion for new trial or
motion for reconsideration. In this manner, the trial court which
rendered the assailed decision is given another opportunity to
review the case and, in the process, minimize and/or rectify any
error of judgment. While we aim to resolve cases with dispatch and
to have judgments of courts become final at some definite time,
we likewise aspire to deliver justice fairly.
In this case, the new period of 15 days eradicates the confusion as
to when the 15-day appeal period should be counted from receipt
of notice of judgment (March 3, 1998) or from receipt of notice of
"final order" appealed from (July 22, 1998).
To recapitulate, a party litigant may either file his notice of appeal
within 15 days from receipt of the Regional Trial Courts decision or
file it within 15 days from receipt of the order (the "final order")
denying his motion for new trial or motion for reconsideration.
Obviously, the new 15-day period may be availed of only if either
motion is filed; otherwise, the decision becomes final and
executory after the lapse of the original appeal period provided in
Rule 41, Section 3.
Petitioners here filed their notice of appeal on July 27, 1998 or five
days from receipt of the order denying their motion for
reconsideration on July 22, 1998. Hence, the notice of appeal was
well within the fresh appeal period of 15 days, as already
discussed.34
We deem it unnecessary to discuss the applicability of Denso
(Philippines), Inc. v. IAC35 since the Court of Appeals never even
referred to it in its assailed decision.
WHEREFORE, the petition is hereby GRANTED and the assailed
decision of the Court of Appeals REVERSEDand SET ASIDE.
Accordingly, let the records of this case be remanded to the Court
of Appeals for further proceedings.
No costs.
SO ORDERED.