WHEREFORE I, respectfully return the original summons duly served
FORTUNATO GOMEZ and AURORA GOMEZ, petitioners, vs.
COURT OF APPEALS, ADOLFO TROCINO and MARIANO
TROCINO, respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
Before the Court is a petition for review on certiorari under Rule 45
of the Rules of Court assailing the decision[1] of the Court of Appeals
dated September 30, 1996, in CA-G.R. SP No. 40067, nullifying the
decision and orders of the Regional Trial Court of Cebu City (Branch
10) in Civil Case No. CEB-11103, for want of jurisdiction.
Civil Case No. CEB-11103 is an action for specific performance
and/or rescission filed by herein petitioners, spouses Fortunato and
Aurora Gomez, against the heirs of Jesus J. Trocino, Sr., which include
herein respondents and their mother Caridad Trocino.[2]
Filed on December 16, 1991, the complaint alleges: Some time in
1975, the spouses Jesus and Caridad Trocino mortgaged two parcels
of land covered by TCT Nos. 10616 and 31856 to Dr. Clarence
Yujuico. The mortgage was subsequently foreclosed and the properties
sold at public auction on July 11, 1988, and before the expiry of the
redemption period, the spouses Trocino sold the property to petitioners
on December 12, 1989, who in turn, redeemed the same from Dr.
Yujuico. The spouses Trocino, however, refused to convey ownership
of the properties to petitioners, hence, the complaint.
On January 10, 1992, the trial courts Process Server served
summons on respondents, in the manner described in his Return of
Service, to wit:
Respectfully returned to the Branch Clerk of Court, Regional Trial
Court of Cebu, Branch 10, the herein attached original summons
issued in the above-entitled case with the information that on January
8, 1992 summons and copies of the complaint were served to the
defendants Jacob, Jesus Jr., Adolfo, Mariano, Consolacion, Alice,
Racheal thru defendant Caridad Trocino at their given address at
Maria Cristina Extension (besides Sacred Heart School for Girls), Cebu
City, evidence by her signature found at the lower portion of the
original summons.[3]
to the court of origin.
Cebu City, Philippines, January 10, 1992.
(signed)
DELFIN D.
BARNIDO
RTC Process Server
On January 27, 1992, the defendants, through their counsel Atty.
Expedito P. Bugarin, filed their Answer. Defendant Caridad A. Trocino,
respondents mother, verified said pleading.[4]
After trial on the merits, the RTC rendered its decision on March
1993, with the following disposition:
WHEREFORE, premises considered, judgment is hereby rendered in
favor of the plaintiffs and against the defendants.
The latter are hereby ordered to jointly and severally execute a Deed
of Sale in favor of the plaintiffs and to deliver the owners duplicate
copies of TCT Nos. 10616 and 31856, covering the properties sold, to
the plaintiffs within ten (10) days from the finality of the judgment, after
which plaintiffs shall pay in turn to the defendants the balance
of P2,000,000.00. Otherwise, the sale is rescinded and revoked and
the defendants are directed to return to the plaintiffs the amount
of P500,000.00, with interest of 12% per annum computed
from December 6, 1989, until the full amount is paid.
In addition thereto, defendants are to pay jointly and severally to the
plaintiffs, the amount of P50,000.00 as moral damages; P20,000.00 as
exemplary damages; P40,000.00 by way of attorneys fees;
and P10,000.00 as litigation expenses.
SO ORDERED.[5]
Due to the defendants failure to deliver the owners duplicate of TCT
Nos. 10616 and 31856, the RTC issued an order on August 29,
1995 declaring said titles null and void, and ordering the Register of
Deeds of Cebu City to issue new titles in the name of herein
petitioners.[6]
Thereafter, or on March 13, 1996, respondents Adolfo and Mariano
Trocino filed with the Court of Appeals, a petition for the annulment of
the judgment rendered by the RTC-Cebu (Branch 10) in Civil Case No.
CEB-11103. Private respondents alleged that the trial courts decision is
null and void on the ground that it did not acquire jurisdiction over their
persons as they were not validly served with a copy of the summons and
the complaint. According to them, at the time summons was served on
them, Adolfo Trocino was already in Ohio, U.S.A., and has been
residing there for 25 years, while Mariano Trocino was in Talibon, Bohol,
and has been residing there since 1986. They also refuted the receipt of
the summons by Caridad A. Trocino, and the representation made by
Atty. Bugarin in their behalf. Respondents also contended that they have
a meritorious defense.[7] Petitioners filed their Comment/Answer to the
petition.[8]
On September 30, 1996, the Court of Appeals issued the assailed
Decision granting the petition and annulling the decision of the RTC-
Cebu (Branch 10). The decretal portion of the decision reads:
WHEREFORE, the decision of the Regional Trial Court of Cebu City,
Branch 10, in Civil Case No. CEB-11103 as well as all Orders issued
to implement the same are hereby ANNULLED AND SET ASIDE. The
Register of Deeds of Cebu City is hereby ENJOINED from cancelling
Transfer Certificates of Title Nos. 10616 and 31856. No
pronouncement as to costs.
SO ORDERED.[9]
Their motion for reconsideration having been denied by the Court
of Appeals, petitioners filed the present petition, setting forth the
following assignment of errors:
I. THE COURT OF APPEALS ERRED IN FINDING LACK OF
PRIOR KNOWLEDGE ON THE PART OF
RESPONDENTS TROCINO, REGARDING THE
PROCEEDINGS BEFORE THE RTC
OF CEBU CITY AND IN NOT DISMISSING THE
PETITION FOR VIOLATION OF SUPREME COURT
CIRCULAR 04-94.
II. THE COURT OF APPEALS ERRED IN DECLARING THE
NEED FOR PERSONAL AND/OR EXTRATERRITORIAL
SERVICE OF SUMMONS, DESPITE THE NATURE OF
THE CAUSE OF ACTION BEING ONE IN REM.
III. THE COURT OF APPEALS ERRED IN ANNULLING THE
JUDGMENT, CAUSING FURTHER USELESS
LITIGATION AND UNNECESSARY EXPENSE ON
PETITIONERS AND RESPONDENTS, ESPECIALLY
SINCE RESPONDENTS HAVE NOT SHOWN ANY VALID
DEFENSE AS GROUND FOR REVERSAL OF
JUDGMENT OF THE RTC.
IV. THE COURT OF APPEALS ERRED IN RULING THAT ITS
JUDGMENT IS APPLICABLE IN FAVOR OF CARIDAD
TROCINO.[10]
Summons is a writ by which the defendant is notified of the action
brought against him. Service of such writ is the means by which the court
acquires jurisdiction over his person.[11] Any judgment without such
service in the absence of a valid waiver is null and void.[12]
The resolution of the present petition hinges on the issue of whether
or not summons was effectively served on respondents. If in the
affirmative, the trial court had validly acquired jurisdiction over their
persons and therefore its judgment is valid.
To resolve whether there was valid service of summons on
respondents, the nature of the action filed against them must first be
determined. As the Court explained in Asiavest Limited vs. Court of
Appeals, it will be helpful to determine first whether the action is in
personam, in rem, or quasi in rem because the rules on service of
summons under Rule 14 of the Rules of Court of the Philippines apply
according to the nature of the action.[13]
In actions in personam, summons on the defendant must be served
by handing a copy thereof to the defendant in person, or, if he refuses
to receive it, by tendering it to him. This is specifically provided in Section
7, Rule 14 of the Rules of Court,[14] which states:
SEC. 7. Personal service of summons.-- The summons shall be served
by handing a copy thereof to the defendant in person or, if he refuses
to receive it, by tendering it to him.
 If efforts to find defendant personally makes prompt service
impossible, substituted service may be effected by leaving copies of the
summons at the defendant's dwelling house or residence with some
person of suitable age and discretion then residing therein, or by leaving
the copies at the defendant's office or regular place of business with
some competent person in charge thereof.[15] In substituted service, it is
mandated that the fact of impossibility of personal service should be
explained in the proof of service.[16]
When the defendant in an action in personam is a non-resident who
does not voluntarily submit himself to the authority of the court, personal
service of summons within the State is essential to the acquisition of
jurisdiction over his person. This cannot be done if the defendant is not
physically present in the country, and thus, the court cannot acquire
jurisdiction over his person and therefore cannot validly try and decide
the case against him.[17] An exception was accorded in Gemperle vs.
Schenker wherein service of summons through the non-residents wife,
who was a resident of the Philippines, was held valid, as the latter was
his representative and attorney-in-fact in a prior civil case filed by the
non-resident, and the second case was merely an offshoot of the first
case.[18]
Meanwhile, in actions in rem or quasi in rem, jurisdiction over the
person of the defendant is not a prerequisite to confer jurisdiction on the
court provided that the court acquires jurisdiction over the res, although
summons must be served upon the defendant in order to satisfy the due
process requirements.[19] Thus, where the defendant is a non-resident
who is not found in the Philippines, and (1) the action affects the
personal status of the plaintiff; (2) the action relates to, or the subject
matter of which is property in the Philippines in which the defendant has
or claims a lien or interest; (3) the action seeks the exclusion of the
defendant from any interest in the property located in the Philippines; or
(4) the property of the defendant has been attached in the Philippines,
summons may be served extraterritorially by (a) personal service out of
the country, with leave of court; (b) publication, also with leave of court;
or (c) any other manner the court may deem sufficient.[20]
In the present case, petitioners cause of action in Civil Case No.
CEB-11103 is anchored on the claim that the spouses Jesus and
Caridad Trocino reneged on their obligation to convey ownership of the
two parcels of land subject of their sale. Thus, petitioners pray in their
complaint that the spouses Trocino be ordered to execute the
appropriate deed of sale and that the titles be delivered to them
(petitioners); or in the alternative, that the sale be revoked and
rescinded; and spouses Trocino ordered to return to petitioners their
down payment in the amount of P500,000.00 plus interests. The action
instituted by petitioners affect the parties alone, not the whole
world. Hence, it is an action in personam, i.e., any judgment therein is
binding only upon the parties properly impleaded.[21]
Contrary to petitioners belief, the complaint they filed for specific
performance and/or rescission is not an action in rem. While it is a real
action because it affects title to or possession of the two parcels of land
covered by TCT Nos. 10616 and 31856, it does not automatically follow
that the action is already one in rem. In Hernandez vs. Rural Bank of
Lucena, Inc., the Court made the following distinction:
In a personal action, the plaintiff seeks the recovery of personal
property, the enforcement of a contract or the recovery of damages. In
a real action, the plaintiff seeks the recovery of real property, or, as
indicated in section 2(a) of Rule 4, a real action is an action affecting
title to real property or for the recovery of possession, or for partition or
condemnation of, or foreclosure of a mortgage on, real property.
An action in personam is an action against a person on the basis of his
personal liability, while an action in rem is an action against the thing
itself, instead of against the person. Hence, a real action may at the
same time be an action in personam and not necessarily an action in
rem.[22]
The objective sought in petitioners complaint was to establish a
claim against respondents for their alleged refusal to convey to them the
title to the two parcels of land that they inherited from their father, Jesus
Trocino, who was one of the sellers of the properties to
petitioners. Hence, to repeat, Civil Case No. CEB-11103 is an action in
personam because it is an action against persons, namely, herein
respondents, on the basis of their personal liability. As such, personal
service of summons upon the defendants is essential in order for
the court to acquire of jurisdiction over their persons.[23]
A distinction, however, must be made with regard to service of
summons on respondents Adolfo Trocino and Mariano Trocino. Adolfo
Trocino, as records show, is already a resident of Ohio, U.S.A. for 25
years. Being a non-resident, the court cannot acquire jurisdiction over
his person and validly try and decide the case against him.
 On the other hand, Mariano Trocino has been in
Talibon, Bohol since 1986. To validly acquire jurisdiction over his
person, summons must be served on him personally, or through
substituted service, upon showing of impossibility of personal
service. Such impossibility, and why efforts exerted towards personal
service failed, should be explained in the proof of service. The pertinent
facts and circumstances attendant to the service of summons must be
stated in the proof of service or Officers Return. Failure to do so would
invalidate all subsequent proceedings on jurisdictional grounds.[24]
In the present case, the process server served the summons and
copies of the complaint on respondents Jacob, Jesus, Jr., Adolfo,
Mariano, Consolacion, Alice and Racheal,[25] through their mother,
Caridad Trocino.[26] The return did not contain any particulars as to the
impossibility of personal service on Mariano Trocino within a reasonable
time. Such improper service renders the same ineffective.
Due process of law requires personal service to support a personal
judgment, and, when the proceeding is strictly in personam brought to
determine the personal rights and obligations of the parties, personal
service within the state or a voluntary appearance in the case is
essential to the acquisition of jurisdiction so as to constitute
compliance with the constitutional requirement of due process. [27]
Moreover, inasmuch as the sheriffs return failed to state the facts
and circumstances showing the impossibility of personal service of
summons upon respondents within a reasonable time, petitioners
should have sought the issuance of an alias summons. Under Section
5, Rule 14 of the Rules of Court, alias summons may be issued when
the original summons is returned without being served on any or all of
the defendants.[28] Petitioners, however, did not do so, and they should
now bear the consequences of their lack of diligence.
The fact that Atty. Expedito Bugarin represented all the
respondents without any exception does not transform the ineffective
service of summons into a valid one. It does not constitute a valid waiver
or even a voluntary submission to the trial courts jurisdiction. There was
not even the slightest proof showing that respondents authorized Atty.
Bugarins appearance for and in their behalf. As found by the Court of
Appeals:
While Caridad Trocino may have engaged the services of Atty.
Bugarin, it did not necessarily mean that Atty. Bugarin also had the
authority to represent the defendant heirs. The records show that in all
the pleadings which required verification, only Caridad Trocino signed
the same. There was never a single instance where defendant heirs
signed the pleading. The fact that a pleading is signed by one
defendant does not necessarily mean that it is binding on a co-
defendant. Furthermore, Caridad Trocino represented herself as the
principal defendant in her Motion to Withdraw Appeal. (Rollo, p. 80)
Since the defendant heirs are co-defendants, the trial court should
have verified the extent of Atty. Bugarins authority when petitioners
failed to appear as early as the pre-trial stage, where the parties are
required to appear. The absence of the defendant heirs should have
prompted the trial court to inquire from the lawyer whether he was also
representing the other petitioners. As co-defendant and co-heirs over
the disputed properties, the defendant heirs had every right to be
present during the trial. Only Caridad Trocino appeared and testified
on her own behalf. All the defenses raised were her own, not the
defendant heirs.[29]
Consequently, the judgment sought to be executed against
respondents were rendered without jurisdiction as there was neither a
proper service of summons nor was there any waiver or voluntary
submission to the trial courts jurisdiction. Hence, the same is void, with
regard to private respondents except Caridad Trocino.
It must be pointed out that while it was the spouses Jesus and
Caridad Trocino who sold the properties to petitioners, their right to
proceed against Jesus Trocino when he died was passed on to his heirs,
which includes respondents and Caridad Trocino. Such transmission of
right occurred by operation of law, more particularly by succession,
which is a mode of acquisition by virtue of which the property, rights and
obligations to the extent of the value of the inheritance of a person are
transmitted.[30] When the process server personally served the
summons on Caridad Trocino, the trial court validly acquired jurisdiction
over her person alone. Hence, the trial courts decision is valid and
binding with regard to her, but only in proportion to Caridad Trocinos
share. As aptly stated by the Court of Appeals:
This Courts decision is therefore applicable to all the defendant heirs
with the exception of defendant Caridad Trocino considering that it was
the latter who entered into the alleged sale without the consent of her
husband. She is therefore estopped from questioning her own authority
to enter into the questioned sale. Moreover, Caridad Trocino was
validly served with summons and was accorded due process.[31]

WHEREFORE, the petition for review is DENIED. The decision of

the Court of Appeals in CA-G.R. SP No. 40067 is AFFIRMED.
Costs against petitioners.
SO ORDERED.
 THIRD DIVISION

Petitioner BPI is a banking institution duly organized and existing as

BANK OF THE PHILIPPINEISLANDS, G.R. No. 169116 such under the Philippine laws.
Petitioner, Present:
Private respondent Centrogen, Inc. (Centrogen) is a domestic
YNARES-SANTIAGO, J.,
corporation engaged in pharmaceutical business, duly organized and
- versus - Chairperson, existing as such under the Philippine laws and represented in this act by
AUSTRIA-MARTINEZ,
its President, Edwin Santiago, son of private respondents
CALLEJO, SR., Spouses Ireneo M. Santiago and Liwanag P. Santiago.
SPS. IRENEO M. SANTIAGO and LIWANAG CHICO-NAZARIO, and
P. SANTIAGO, CENTROGEN, INC., NACHURA, JJ. On several occasions, private respondent Centrogen obtained loans
REPRSENTED BY EDWINSANTIAGO, from Far East Bank and Trust Company (FEBTC) in different amounts,
Respondent. Promulgated: the total of which reached the sum P4,650,000.00, as evidenced by
promissory notes executed by Edwin Santiago.
March 28, 2007
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - As a security for a fraction of the loan obligation, Ireneo M. Santiago
x executed a Real Estate Mortgage over a parcel of land covered by TCT
No. T-131382 registered under his name and located at Sta Cruz,
Laguna, with an area of 2,166 square meters (subject property). [4] The
mortgage secured the principal loan in the amount
DECISION of P490,000.00. Later on, the same property secured another loan
obligation in the amount of P1,504,280.00.[5]
Subsequently, however, Centrogen incurred default and therefore the
CHICO-NAZARIO, J.: loan obligation became due and demandable.

Before this Court is a Petition for Review on Certiorari filed by petitioner
Bank of the Philippine Islands (BPI) seeking to reverse and set aside the
Decision[1] of the Court of Appeals dated 3 March 2005 and its
Resolution[2] dated 28 July 2005 affirming the Order[3] of the Regional
Trial Court (RTC) of Santa Cruz, Laguna, Branch 91, dated 20 March
2003 enjoining the extrajudicial foreclosure sale of a parcel of land
covered by Transfer Certificate of Title (TCT) No. T-131382 registered
under the name of Spouses Ireneo and Liwanag Santiago. The
dispositive portion of the Court of Appeals Decision reads:
Meanwhile, FEBTC merged with the BPI with the latter as the surviving
corporation. As a result, BPI assumed all the rights, privileges and
obligations of FEBTC.
On 13 December 2002, BPI filed an Extra-Judicial Foreclosure
of Real Estate Mortgage[6] over the subject property before the RTC of
Sta. Cruz, Laguna. In order to validly effect the foreclosure, a Notice of
Sale was issued by the Provincial Sheriff on 21 January 2003. On the
same day, the Spouses Santiago were served with the copy of the
Notice of Sale.

WHEREFORE, premises considered, the petition is Upon receipt of the Notice of Sale, the Spouses Santiago
DISMISSED. The assailed orders dated March 20, and Centrogen filed a Complaint seeking the issuance of a Temporary
2003 and August 25, 2003 of the respondent court in Restraining Order and Preliminary and Final Injunction and in the
Civil Case No. SC-4259 are hereby AFFIRMED. alternative, for the annulment of the Real Estate Mortgage with BPI.
 The complaint alleged that the initial loan obligation in the
amount of P490,000.00, including interest thereon was fully paid as
evidenced by Union Bank Check No. 0363020895 dated 20 December
2001 in the amount of P648,521.51 with BPI as payee. Such payment
notwithstanding, the amount was still included in the amount of
computation of the arrears as shown by the document of Extra-Judicial
Foreclosure of Real Estate Mortgage filed by the latter.
In addition, the Spouses Santiago and Centrogen asseverated that the
original loan agreement was for the amount of Five Million Pesos. Such
amount will be supposedly utilized to finance the squalene project of the
company. However, after the amount of Two Million Pesos was released
and was accordingly used in funding the erection of the structural details
of the project, FEBTC, in gross violation of the agreement, did not
release the balance of Three Million Pesos that will supposedly finance
the purchase of machineries and equipment necessary for the
operation. As a result, the squalene project failed and the company
groped for funds to pay its loan obligations.
On 27 February 2003, BPI was summoned to file and serve its
Answer to the Complaint filed by Spouses Santiago and Centrogen. On
the same day, the Sheriff served a copy of the summons to the Branch
Manager of BPI Sta. Cruz, Laguna Branch, as evidenced by the Sheriffs
Return,[7] which reads:
SHERIFFS RETURN
Respectfully returned the original summons and
order dated February 2003 with the information that on
February 27, 2003 the undersigned served the copy of
summons together with the corresponding copy of
complaint and its Annexes and order dated February
27, 2003, to defendants (sic) Bank of the Philippine
Islands (BPI) thru the manager Ms. Glona Ramos at
Sta. Cruz Laguna Branch, at Sta. Cruz, Laguna, to
defendant Sheriff Marcial Opinion at the Office of the
Provincial Sheriff of Laguna, R.T.C. (sic) Sta. Cruz,
Laguna as shown by their signatures on the original
summons and order.
Instead of filing an Answer, BPI filed a Motion to Dismiss[8] the complaint
on the ground of lack of jurisdiction over the person of the defendant and
other procedural infirmities attendant to the filing of the complaint. In its
Motion to Dismiss, BPI claimed that the Branch Manager of its Sta. Cruz,
Laguna Branch, was not one of those authorized by Section 11, Rule 14
of the Revised Rules of Court[9] to receive summons on behalf of the
corporation. The summons served upon its Branch Manager, therefore,
did not bind the corporation. In addition, it was alleged that the complaint
filed by the Spouses Santiago and Centrogen lacked a Certificate of
Non-Forum Shopping[10] and was therefore dismissible. Finally, BPI
underscored that the person who verified the complaint was not duly
authorized by Centrogens Board of Directors to institute the present
action as required by Section 23 of the Corporation Code.[11]
In an Order[12] dated 28 February 2003, the RTC denied the Motion to
Dismiss and emphasized that the nature of the case merited its removal
from the purview of Section 11, Rule 14 of the Revised Rules of
Court. Based on the provisions of Section 5, Rule 58 of the Revised
Rules of Court,[13] the RTC declared that the instant Order is still valid
and binding despite non-compliance with the provisions of Section 11,
Rule 14 of the same Rules. The dispositive portion of the Order reads:
WHEREFORE, premises considered, the
motion to dismiss is hereby denied because of the
presence of extreme urgency wherein the Court has
jurisdiction to act on the TRO despite lack of proper
service of summons. Let the instant case be called for
summary hearing on plaintiffs application for temporary
restraining order.
After summary hearing on the Spouses Santiago
and Centrogens application for Temporary Restraining Order, the RTC,
on 28 February 2003, issued an Order[14] enjoining the Provincial Sheriff
from proceeding with the extra-judicial foreclosure sale of the subject
property until the propriety of granting a preliminary injunction is
ascertained. The decretal portion of the said Order reads:
Wherefore, premises considered, the Court
orders that pending the resolution of the plaintiffs prayer
for preliminary injunction:
 1. The Defendant Provincial Sheriff, his
deputies, employees, and agents are enjoined from
proceeding with the threatened extra-judicial
foreclosure sale (to be conducted today) of the parcel
of land owned by plaintiffs Spouses Ireneo M. Santiago
and Liwanag P. Santiago located in (sic) Brgy. Sto.
Angel Norte, Sta. Cruz, Laguna.
2. The application for a preliminary injunction is
hereby set for hearing on March 10, 2003 at 1:30 pm.
Further, the plaintiffs are hereby ordered to immediately
file a bond amounting to One Hundred Thousand Pesos
(P100,000.00) to answer for damages that Defendant
Bank may sustain if the court should finally decide that
the plaintiffs are not entitled thereto.
On 6 March 2003, the RTC ordered the service of new
summons to BPI in accordance with the provisions of the Revised Rules
of Court. The aforesaid Order reads:
To avoid further argument as regards the proper
service of summons to Defendant Bank, the Branch
Clerk of Court is hereby directed to issue another
summons and serve copy of the same together with the
complaint and its annexes to any of the officers of the
Defendant Bank as provided by the rules of civil
procedure.[15]
In compliance with the aforesaid Order, the Branch Clerk of Court
caused the issuance of a new summons on 7 March 2003, a copy of
which was served upon the Office of the Corporate Secretary of the BPI
on 11 March 2003, as evidenced by the Sheriffs Return,[16] which reads:
Sheriffs Return
This is to Certify that on March 11, 2003 the
undersigned caused the service of summons together
with the copy of complaint and its annexes to defendant
Bank of the Philippine Islands (BPI) and receive (sic) by
the Office of the Corporate Secretary dated March 11,
2003 at the BPI Building Ayala Avenue, Makati City.
On 20 March 2003, the RTC issued an Order granting the
application for the issuance of a Writ of Preliminary Injunction filed by
the Spouses Santiago and Centrogen. It enjoined the extra-judicial
foreclosure sale of the subject property pending resolution of the main
action for Annulment of Real Estate Mortgage or until further orders of
the trial court. In issuing the Writ of Preliminary Injunction, it rationalized
that to allow the foreclosure without hearing the main case would work
injustice to the complainant and since Spouses Santiago
and Centrogen claimed that the first loan in the amount
of P490,000.00 secured by the property subject of the extra-judicial sale
had long been paid by Centrogen through a Union Bank Check No.
0363020895 presented as evidence. The dispositive part of the Order
reads:
Wherefore, premises considered, the Court
orders that pending the resolution of the main action for
the annulment of the real estate mortgage, etc., and /or
order from this Court:
1. The Defendant Provincial
Sheriff, his deputies, employees, and
agents are enjoined from proceeding
with the threatened extra-judicial
foreclosure sale of the parcel of land
covered by TCT No. T-131382 owned
by Plaintiffs Spouses Ireneo M.
Santiago
and Liwanag P. Santiago located
in Brgy. Sto. Angel, Sta. Cruz,
Laguna.
2. The bond in the amount of
One Hundred Thousand
(P100,000.00) Pesos ordered by the
Court to be posted by the plaintiffs to
answer for damages that defendant
bank may sustain if the court should
finally decide that the plaintiffs are
entitled thereto still stands.

The Motion for Reconsideration filed by BPI was denied by the RTC in
its Order[17] dated 25 August 2003.
Aggrieved, BPI filed a Petition for Certiorari before the Court of Appeals
seeking the reversal of the adverse Orders of the RTC.
On 3 March 2005, the Court of Appeals rendered a Decision[18] affirming
the assailed Orders of the RTC and dismissing the Petition
for Certiorari filed by BPI. The Court of Appeals declared that jurisdiction
was acquired upon the service of new summons. Before the assailed
Orders were therefore issued, the RTC properly acquired jurisdiction
over the person of BPI.
Undaunted, BPI filed this instant Petition for Review on Certiorari under
Rule 45 of the Revised Rules of Court. For our resolution are the
following issues:
I.
WHETHER OR NOT THE RTC ACQUIRED
JURISDICTION OVER THE PERSON OF BPI WHEN
THE ORIGINAL SUMMONS WAS SERVED UPON
THE BRANCH MANAGER OF ITS STA. CRUZ,
LAGUNA BRANCH.
II.
WHETHER OR NOT THE RTC COMMITTED A
GRAVE ABUSE OF DISCRETION IN ISSUING THE
WRIT OF PRELIMINARY INJUNCTION.
BPI vehemently insists that the court a quo did not acquire
jurisdiction over its person and consequently, the Order issued by the
RTC, permanently enjoining the foreclosure sale, was therefore void and
does not bind BPI.
We are not persuaded.
The pertinent provision of the Revised Rules of Court provides:
Sec. 11, Rule 14. Service upon domestic private
juridical entity When the defendant is a corporation,
partnership or association organized under the laws of
the Philippines with a juridical personality service may
be made on the president, managing partner, general
manager, corporate secretary, treasurer or in-house
counsel.
Basic is the rule that a strict compliance with the mode of service
is necessary to confer jurisdiction of the court over a corporation. The
officer upon whom service is made must be one who is named in the
statute; otherwise, the service is insufficient.[19] The purpose is to render
it reasonably certain that the corporation will receive prompt and proper
notice in an action against it or to insure that the summons be served on
a representative so integrated with the corporation that such person will
know what to do with the legal papers served on him.
Applying the aforestated principle in the case at bar, we rule that
the service of summons on BPIs Branch Manager did not bind the
corporation for the branch manager is not included in the enumeration
of the statute of the persons upon whom service of summons can be
validly made in behalf of the corporation. Such service is therefore void
and ineffectual.
However, upon the issuance and the proper service of new
summons on 11 March 2003, before the Writ of Preliminary Injunction
was issued on 20 March 2003, whatever defect attended the service
of the original summons, was promptly and accordingly cured.
It bears stressing, that on 7 March 2003, the Branch Clerk of Court
issued a new summons which was properly served
upon BPIs Corporate Secretary on 11 March 2003, as evidenced by the
Sheriffs Return.
The subsequent service of summons was neither disputed nor
was it mentioned by BPI except in a fleeting narration of facts and
therefore enjoys the presumption that official duty has been regularly
performed.[20] The Process Servers Certificate of Service of Summons
is a prima facie evidence of facts set out in that certificate.[21]
 Inarguably, before the Order granting the application for Writ of
Preliminary Injunction was issued, the RTC already acquired jurisdiction
over the person of BPI by virtue of the new summons validly served on
the Corporate Secretary. The fact that the original summons was
invalidly served is of no moment since jurisdiction over BPI was
subsequently acquired by the service of a new summons.
In the case of The Philippine American Life and General
Insurance Company v. Brevea,[22] we ruled:
A case should not be
dismissed simply because an
original summons was wrongfully
served. It should be difficult to
conceive, for example, that when a
defendant personally appears before
a Court complaining that he had not
been validly summoned, that the case
against him should be
dismissed. An alias summons can
be actually served on said
defendant.
xxxx
x x x It is not pertinent whether the summons is
designated as an original or an alias summons as
long as it has adequately served its purpose. What
is essential is that the summons complies with the
requirements under the Rules of Court and it has
been duly served on the defendant together with the
prevailing complaint. x x x Moreover, the second
summons was technically not an alias summons but
more of a new summons on the amended complaint. It
was not a continuation of the first summons considering
that it particularly referred to the amended complaint
and not to the original complaint. (Emphases supplied.)
BPIs lamentation, at every turn, on the invalidity of the service
of summons made on the Branch Manager and its deliberate neglect to
acknowledge the fact that a new summons was accordingly served on
its Corporate Secretary, is an attempt in futility to mislead this Court into
believing that the court a quo never acquired jurisdiction over the case
and thus the issuance of the Writ of Preliminary Injunction was invalid.
We are not drawn into petitioners sophistry.
In the case of G&G Trading Corporation v. Court of
Appeals,[23] this Court made the following pronouncements:
Although it may be true that the service of
summons was made on a person not authorized to
receive the same in behalf of the petitioner,
nevertheless since it appears that the summons and
complaint were in fact received by the corporation
through its said clerk, the Court finds that there was
substantial compliance with the rule on service of
summons. x x x The need for speedy justice must
prevail over a technicality.
In explaining the test on the validity of service of summons,
Justice Florenz Regalado[24] stressed that substantial justice must take
precedence over technicality and thus stated:
The ultimate test on the validity and sufficiency
on service of summons is whether the same and the
attachments thereto where ultimately received by the
corporation under such circumstances that no undue
prejudice is sustained by it from the procedural lapse
and it was afforded full opportunity to present its
responsive pleadings. This is but in accord with the
entrenched rule that the ends of substantial justice
should not be subordinated to technicalities and, for
which purpose, each case should be examined within
the factual milieu peculiar to it.
Prescinding from the above, we deem it best to underscore that
there is no hard and fast rule pertaining to the manner of service of
summons. Rather, substantial justice demands that every case should
be viewed in light of the peculiar circumstances attendant to each.
 In any event, as it is glaringly evident from the records of the
case that jurisdiction over the person of the defendant was validly
acquired by the court by the valid service of a new summons before the
writ of preliminary injunction was issued and guided by jurisprudential
pronouncements heretofore adverted to, we hold that the proceedings
attendant to the issuance of the writ of preliminary injunction were
regular.
Having settled this issue necessitates us to look into the
propriety of the issuance of the Writ of Preliminary Injunction.
BPI asserts that the RTC gravely abused its discretion in
granting the Spouses Santiago and Centrogens application for the Writ
of Preliminary Injunction in the absence of showing that the latter have
a clear legal right sought to be protected.
Again, we do not agree.
An injunction is a preservative remedy for the protection of ones
substantive right or interest; it is not a cause of action by itself but merely
a provisional remedy, an adjunct to the main suit.[25] The purpose of
injunction is to prevent threatened or continuous irremediable injury to
some of the parties before their claims can be thoroughly studied and
educated. Its sole aim is to preserve the status quo until the merits of
the case is heard fully.[26]
The issuance of the writ of preliminary injunction as an ancillary
or preventive remedy to secure the rights of a party in a pending case is
entirely within the discretion of the court taking cognizance of the case,
the only limitation being that the discretion should be exercised based
upon the grounds and in a manner provided by law. Before a writ of
preliminary injunction may be issued, the following requisites must be
complied with: (1) a right in esse or a clear or unmistakable right to be
protected; (2) violation of that right; and (3) that there is an urgent and
permanent act and urgent necessity for the writ to prevent serious
damage.[27]
Verily, the aforestated requisites for the issuance of the Writ of
Preliminary Injunction have been fully complied with. The right of
Spouses Santiago over the property clearly exists since they are the
registered owners thereof, and the existence of a Real Estate Mortgage
does not undermine the right of the absolute owner over the
property. The violation of such right is manifest in the threatened
foreclosure proceedings commenced by BPI amidst the claim that the
principal obligation has been fully paid. Finally, to allow the foreclosure
of the subject property without first calibrating the evidence of opposing
parties pertaining to the action for the annulment of mortgage would
cause irreparable damage to the registered owner.
The right of BPI to foreclose the subject property is under
dispute upon the claim interposed by the Spouses Santiago
and Centrogen that payments for the loan secured by the property
subject to the threatened foreclosure proceedings were already
made. To support their assertions, Spouses Santiago
and Centrogen presented as evidence Union Bank Check No.
0363020895 dated 20 December 2001 in the amount of P648,521.51,
with BPI as payee. From this, we can deduce that the right of BPI to
foreclose the subject property is questionable. We cannot therefore
allow the foreclosure of the Real Estate Mortgage to proceed without
first setting the main case for hearing so that based on the evidence
presented by the parties, the trial court can determine who between
them has the better right over the subject property. To rule otherwise
would cause a grave irreparable damage to the Spouses Santiago
and Centrogen.
Parenthetically, this petition affords us the opportunity to once
again reiterate the rule that the issuance of the writ of preliminary
injunction rests entirely within the discretion of the court and generally
not interfered with except in case of manifest abuse. The assessment
and evaluation of evidence in the issuance of the writ of preliminary
injunction involve finding of facts ordinarily left to the trial court for its
conclusive determination.[28]
In Toyota Motor Phils. Corp. Workers Association v. Court of
Appeals,[29] citing Ubanes, Jr. v. Court of Appeals,[30] we made the
following declaration:
[T]he matter of the issuance of writ of a preliminary
injunction is addressed to the sound discretion of the
trial court, unless the court commits a grave abuse of
discretion. Grave abuse of discretion in the issuance of
writs of preliminary injunction implies a capricious and
whimsical exercise of judgment that is equivalent to lack
of jurisdiction or whether the power is exercised in an
 arbitrary or despotic manner by reason of passion, WHEREFORE, IN VIEW OF THE FOREGOING, the instant
prejudice or personal aversion amounting to an evasion petition is DENIED. The Decision dated 3 March 2005, and the
of positive duty or to a virtual refusal to perform the duty Resolution dated 28 July 2005, rendered by the Court of Appeals in CA-
enjoined, or to act at all in contemplation of law. x x x. G.R. SP No. 80643, are hereby AFFIRMED. Costs against petitioner.

SO ORDERED.
In the case at bar, after summary hearing and evaluation of
evidence presented by both contending parties, the RTC ruled that
justice would be better served if status quo is preserved until the final
determination of the merits of the case, to wit:

For purposes of preliminary injunction, between

the evidence presented by [the
spouses Santiago and Centrogen] and [BPI], the
evidence of the former carries more weight. The
evidence of [the spouses Santiago and Centrogen]
established that to allow extra-judicial foreclosure
without hearing the main action for the annulment of
mortgage would probably work injustice to the plaintiffs
and would probably violate their rights over the subject
lot.

Furthermore, this case involves complicated

issues that must be resolved first before altering the
status quo. The issue of payment and non-payment of
the loan and the issue of breach of the second loan
directly affect the rights of the plaintiffs over the subject
lot. Hence, the last actual, peaceable, uncontested
status of the parties before the controversy must be
preserved.

The unyielding posture of BPI that its right to foreclose the

subject property was violated since it is permanently barred from
proceeding with the auction sale is patently erroneous. The RTC, in the
exercise of its discretion merely intended to preserve the status
quo while the principal action for the annulment of mortgage is heard
with the end view that no irreversible damage may be caused to the
opposing parties. We find nothing whimsical, arbitrary or capricious in
the exercise of the RTC of its discretion.
 PHILIPPINE DAILY INQUIRER, ISAGANI
YAMBOT, LETTY JIMENEZ-MAGSANOC,
PERGENITO B. BANDAYREL, JR., GOBLETH
C. MOULIC, ESTANISLAO CALDEZ, and
ZENAIDA CALDEZ,
Petitioners,
HON. ELMO M. ALAMEDA, in his capacity as
the Presiding Judge of the REGIONAL TRIAL
COURT OF TUGUEGARAO CITY, CAGAYAN,
BRANCH 5, and LUZ CORTEZ BABARAN,
Respondents.
G.R. No. 160604 On July 25, 2001, based on the two PDI column articles, Dr.
Babaran filed a complaint for Damages,[5] Civil Case No. 5850, against
herein petitioners. In said complaint Dr. Babaran alleged, among other
Present: things, that: after learning about the article published in the August 1,
PUNO, C.J., Chairperson, 2000 issue of the PDI, she wrote a letter to the editor of the PDI but she
CARPIO, never received any response from the latter; to aggravate the matter,
CORONA, another article appeared in the September 29, 2000 issue of the PDI
AZCUNA, and and she was again singled out as having erroneously diagnosed the
LEONARDO-DE CASTRO, JJ. illness of Expedito Caldez; the Report[6] of the DOH Fact-Finding
Committee concluding that her diagnosis cannot be considered
Promulgated: erroneous, was suppressed and was never published by the PDI; the
articles portrayed her as incompetent and one whose alleged erroneous
March 28, 2008 diagnosis caused the death of Expedito Caldez; and,in causing the
articles to be published, petitioners acted in bad faith.

x-----------------------------------------------------------------------------------------x
DECISION
AZCUNA, J.:
Before us is a petition for review on certiorari seeking the
review, setting aside, and annulment of the Resolution [1] of the Court of
Appeals (CA) in CA-G.R. SP No. 79702 dated October 22,
2003 dismissing the petition for certiorari and prohibition filed by
petitioners.
On September 13, 2001, petitioners filed their Answer [7] with
counterclaims. In said answer, petitioners raised, among others, the
following defenses: that the complaint states no cause of action against
them; that the complaint fails and omits to state the factual premises to
support a conclusion that there was malice on the part of the PDI in
publishing the questioned news report; that private respondent failed to
allege actual malice on the part of the petitioners; that a case for
actionable libel with claims for damages has not been adequately stated
in the complaint; and, that the complaint fails to establish the basis of
petitioners liability.[8]

The antecedents are as follows:
The Philippine Daily Inquirer (PDI), in its August 1, 2000 issue,
published an article with the heading After Bong, whos next? [2] The
article narrates the death of Expedito Bong Caldez, a photo
correspondent of the PDI in Cagayan. In said article, the family of the
deceased correspondent laments the death of their loved one due to the
alleged erroneous diagnosis of Dr. Luz Babaran. [3]
Later, in its September 29, 2000 issue, the PDI published
another article with the heading DOH orders probe of fotogs death. [4] In
said article, it was reported that the regional Department of Health
(DOH) in Tuguegarao City has started investigating the death of
Expedito Caldez following an order from the DOHs Bureau of Licensing
and Regulation.
Pre-trial was held and terminated, and petitioners thereafter
filed a Motion for a Preliminary Hearing on Affirmative Defense Raised
in the Answer (which is also a ground for a motion to dismiss). [9] In said
motion, it was alleged that at the pre-trial on February 19, 2003, the court
noted that one of the defenses raised by petitioners was that private
respondent has not delineated the participation of each of petitioners in
the publication of the alleged libelous articles.[10] Thereupon, private
respondents counsel asked for a few days to determine whether the
complaint should be amended to cure its defects. However, private
respondent had not moved to amend the complaint, hence, petitioners
filed the motion.[11]
In support thereof, petitioners contend that: in libel charges, the
participation of each defendant must be specifically alleged in the
complaint, which private respondent failed to do; and the allegations of
the complaint are mere conclusions of law and opinions of the private
respondent.[12] Petitioners ultimately prayed that a preliminary hearing
be conducted on their affirmative defense that the complaint failed to THE RESPONDENT TRIAL JUDGE GRAVELY
state a cause of action; and that, thereafter, the complaint be ABUSED HIS DISCRETION AND EXCEEDED HIS
dismissed.[13] JURISDICTION IN NOT DISMISSING THE
COMPLAINT DESPITE ITS FAILURE TO VALIDLY
Subsequently, private respondent filed a Comment/Opposition AND SUFFICIENTLY STATE A CAUSE OF ACTION
to the Motion to Dismiss Based on Affirmative Defense. [14] In said FOR LIBEL AGAINST THE PETITIONERS BECAUSE:
comment/opposition, private respondent averred that at the February
19, 2003 pre-trial, the issue of whether or not the complaint states a A) THE PARTICIPATION OF EACH
cause of action was not raised. As such, it is no longer an issue to be DEFENDANT (PETITIONER) IN THE
litigated in the case. Private respondent prayed that the court deny WRITING, EDITING, PRINTING, AND
petitioners motion to dismiss. PUBLICATION OF THE NEWS ARTICLES IN
QUESTION IS NOT SPECIFICALLY SET OUT
On May 30, 2003, the Regional Trial Court (RTC) issued an IN THE COMPLAINT;
Order[15] denying petitioners motion in this wise:
B) THE MATERIAL ALLEGATIONS OF THE
With this finding and conclusion, the Court finds COMPLAINT ARE PURELY LEGAL
no further necessity in dwelling at length on the other CONCLUSIONS AND OPINIONS OF
issues raised by the defendants. Consequently, the PRIVATE RESPONDENT, AND NOT
motion for a Preliminary Hearing on Affirmative Defense STATEMENTS OF ULTIMATE FACTS.[21]
Raised in the Answer (which is also a ground for a
motion to dismiss) is hereby DENIED. The initial Petitioners prayed among others: that the Orders of the RTC
presentation of plaintiffs evidence is set on July 3, 2003, dated May 30, 2003 and July 29, 2003 be annulled and set aside for
at 8:30 oclock in the morning. having been rendered with grave abuse of discretion and/or excess of
jurisdiction; and that Civil Case No. 5850 be dismissed for failure to state
SO ORDERED.[16] a cause of action.[22]

On October 22, 2003, the CA issued a Resolution[23] dismissing the

The RTC opined that private respondents allegations in her complaint,
as well as her documentary evidence, show that there is sufficient cause
of action. It added that the documentary evidence discloses facts which
are sufficient to enable the court to go beyond the disclosures in the
complaint. Considering that the facts alleged in the complaint which
make out the principal cause of action and relief are sufficient, the case
should not be dismissed.[17]
petition for being insufficient in form and substance and for presenting
no justiciable issue needing serious consideration by the court. Also, the
CA noted that the Order dated May 30, 2003 shows that the RTC had
already ruled against petitioners affirmative defense that the complaint
states no cause of action.
Hence, this petition, raising the following issues:

Petitioners filed a Motion for Reconsideration[18] but it was denied in the WHETHER OR NOT A COMPLAINT WHICH
Order[19] dated July 29, 2003. FAILS TO VALIDLY AND SUFFICIENTLY STATE A
CAUSE OF ACTION FOR LIBEL BECAUSE:
Aggrieved, petitioners filed a Petition for Certiorari and Prohibition (with
Prayer for the Issuance of Temporary Restraining Order and/or A) THE PARTICIPATION OF EACH
Preliminary Injunction)[20] with the CA, relying on the ground that: DEFENDANT (PETITIONER) IN THE
 WRITING, EDITING, PRINTING, AND
PUBLICATION OF THE NEWS ARTICLES IN
QUESTION IS NOT SPECIFICALLY SET OUT
IN THE COMPLAINT;
B) THE MATERIAL ALLEGATIONS OF THE
COMPLAINT ARE PURELY LEGAL
CONCLUSIONS AND OPINIONS OF PRIVATE
RESPONDENT, AND NOT STATEMENTS OF
ULTIMATE FACTS; AND
C) THE COMPLAINT IS VIOLATIVE OF
PETITIONERS CONSTITUTIONAL RIGHTS
TO FREE PRESS AND TO FREE SPEECH.
SHOULD BE DISMISSED UPON MOTION BY
THE DEFENDANTS (PETITIONERS HEREIN). [24]
Petitioners argue that private respondents complaint failed to
comply with the requirement in libel cases that the participation of each
defendant must be specifically alleged in the complaint. Petitioners
maintain that their divergent personal circumstances and different legal
existence, not to mention the absence of any professional relationship
of two of petitioners with the rest of them, should have prompted private
respondent to specify the participation of each petitioner in the news
gathering, reporting, editing, publication, and circulation of the subject
articles. As such it cannot be determined with certainty from the
allegations in the complaint whose acts and omissions are actually
complained of.[25]
Also, petitioners added that the material allegations of the
complaint are not statements of ultimate facts but were mere
conclusions of law and were merely private respondents opinions. [26]
Finally, petitioners contend that the complaint violates their
constitutionally protected freedom of speech and of the press.[27]
As defined in Section 2, Rule 2 of the Rules of Court, a cause
of action is the act or omission by which a party violates the right of
another. In relation to a complaint, it is a formal statement of the
operative facts that give rise to a remedial right. The question of whether
the complaint states a cause of action is determined by its averments
regarding the acts committed by the defendant. Thus, it must contain a
concise statement of the ultimate or essential facts constituting the
plaintiff's cause of action. As such, the failure to make a sufficient
allegation of a cause of action in the complaint warrants its
dismissal.[28] Its essential elements are as follows:
1. A right in favor of the plaintiff by whatever means and under
whatever law it arises or is created;
2. An obligation on the part of the named defendant to respect
or not to violate such right; and
3. Act or omission on the part of such defendant in violation of
the right of the plaintiff or constituting a breach of the
obligation of the defendant to the plaintiff for which the
latter may maintain an action for recovery of damages
or other appropriate relief.
Of the three, the most important is the last element since it is
only upon the occurrence of the last element that a cause of action
arises, giving the plaintiff the right to maintain an action in court for
recovery of damages or other appropriate relief.[29] In determining
whether an initiatory pleading states a cause of action, the test is as
follows: admitting the truth of the facts alleged, can the court render a
valid judgment in accordance with the prayer? To be taken into account
are only the material allegations in the complaint; extraneous facts and
circumstances or other matters aliunde are not considered. The court
may however consider, in addition to the complaint, the appended
annexes or documents, other pleadings of the plaintiff, or admissions in
the records.[30]
When a defendant seeks the dismissal of the complaint through
a motion to dismiss, the sufficiency of the motion should be tested on
the strength of the allegations of facts contained in the complaint and on
no other basis.[31] The issue of whether or not the complaint failed to
state a cause of action, warranting its dismissal, must be passed upon
on the basis of the allegations stated therein assuming them to be true
and the court cannot inquire into the truth of the allegations and declare
them to be false; otherwise, it would be a procedural error and a denial
of due process to the plaintiff.[32]
 This Court finds that petitioners raised the threshold question of
whether the complaint sufficiently alleges a cause of action.

Hence, the trial court should have granted petitioners motion for
a preliminary hearing on the affirmative defenses raised in the answer
based on failure to state a cause of action. This procedure is designed
to prevent a tedious, if not traumatic, trial in case the complaint falls short
of sufficiently alleging a cause of action.

WHEREFORE, the petition is GRANTED. The Resolution of the

Court of Appeals dated October 22, 2003 is REVERSED, and the case
is REMANDED to the Regional Trial Court of Tuguegarao City,
Cagayan, Branch 5, for the trial court to hear and resolve petitioners
Affirmative Defenses Raised in the Answer.

No costs.

SO ORDERED.
 CONRADO O. LASQUITE and G.R. No. 175375 Lasquite. Lasquite applied for a free patent over the lot, and pending
TEODORA I. ANDRADE, approval of the application, sold half of the land to Juanito L. Andrade
on January 11, 1981.[7] Upon the grant of the patent application, OCT
Petitioners, Present: Nos. NP-197 and NP-198 were issued in the names of Andrade and
Lasquite, respectively, on June 18, 1981.

QUISUMBING, J., Chairperson,

- versus -
VICTORY HILLS, INC.,
Respondent.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
x
DECISION
QUISUMBING, J.:
This appeal seeks to annul the Decision[1] dated November 8,
2006 of the Court of Appeals in CA G.R. CV No. 77599. The Court of
Appeals had set aside the Decision[2]dated July 2, 2002 of the Regional
Trial Court (RTC) of San Mateo, Rizal, Branch 77 in Civil Case No. 548
which upheld Original Certificate of Title (OCT) Nos. NP-197[3] and NP-
198,[4] in the names of petitioners Andrade and Lasquite, respectively.
The antecedent facts are as follows:
On May 4, 1971, Jose Manahan[5] executed a Deed of
Quitclaim/Assignment of Rights[6] over a parcel of land designated as Lot
No. 3050 at Barrio Ampid, San Mateo, Rizal in favor of Conrado O.
Thereafter, on August 22, 1983[8] and October 22,
* 1983, [9]
YNARES-SANTIAGO, Simeona, Armentina, Herminia, Zenaida, Gloria, Yolanda and
Rodolfo, all surnamed Prescilla, filed a protest with the Bureau of Lands to
CHICO-NAZARIO,** question the grant of free patent in favor of petitioners. They claimed to have
been in possession in concepto de dueno of Lot No. 3050, planting and
LEONARDO-DE CASTRO,*** and
cultivating crops thereon since 1940. On March 8, 1989, the Prescillas also
BRION, JJ. instituted a case for reconveyance and damages against petitioners before
the RTC of San Mateo, Rizal, Branch 77 which was docketed as Civil Case
No. 548-SM. They alleged that Lasquite forged the signature of
Jose M. Manahan in the Deed of Quitclaim/Assignment of Rights since the
Promulgated: latter has died on April 11, 1968.[10]
June 23, 2009
It also appears that a second complaint, [11] for annulment of
title, reconveyance and damages, was filed by Roberto and Raquel
Manahan, Maria Gracia M. Natividad, the heirs of Leocadio Manahan,
and the heirs of Joaquin Manahan against petitioners on June 1,
1990. The Manahans asserted title over Lot No. 3050 as successors
of Jose S.Manahan whom they claimed to have died on October 12,
1947.[12] The case was docketed as Civil Case No. 680-90-SM and
raffled to Branch 76 of the San Mateo, Rizal RTC. Upon learning of
Civil Case No. 548-SM initiated by the Prescillas against petitioners,
the Manahans filed a Complaint in Intervention[13] on June 23, 1993,
and Civil Case No. 680-90-SM was consolidated with Civil Case No.
548-SM.
It also appears that on January 11, 1994, respondent Victory
Hills, Inc. (Victory Hills) also intervened in Civil Case No. 548-
SM. Victory Hills likewise claimed to be the owner of the subject
lot. Victory Hills traced its title to Lot No. 3050 to OCT No. 380[14] which
was allegedly registered on January 4, 1937 to Jose H. Manahan by
virtue of Homestead Patent No. H-19562[15] dated December 14,
1936. According to Victory Hills, Jose H. Manahan sold Lot No. 3050 to
Rufino Hieras on May 17, 1944 to whom Transfer Certificate of Title
(TCT) No. 46219[16] was issued. Hieras then conveyed the lot to
spouses Serafin and Veronica Angeles, and Catalina Cayetano who
obtained TCT No. 85082[17] in their names. Later, the lot was transferred
to Victory Hills on September 6, 1961 under TCT No. 90816.[18]
On November 27, 1991, Victory Hills filed an Ex-Parte Motion for
Relocation Survey[19] with the Department of Environment and Natural
Resources (DENR). Upon grant of the motion, the DENR released a
Narration Report of the Relocation Survey[20] on December 9, 1993. The
report noted that:
xxxx
1. H-19562 and H-19887 had been accepted by
Cad. 375-D, San Mateo Cadastre
and identical to Lot [No.] 3050 and Lot [No.]
258 respectively[;]
2. H-19562 had been issued a free patent and
Original Certificate of Title No. 380 in favor [of]
Jose Manahan on June 4, 1937. That said title
was transferred to Rufin[o] Hieras on May 17,
1944 with TCT [No.] 46219, cancelling O[CT]
[No.] 3[8]0. Again TCT [No.] 46219-T-237 was
cancelled and TCT [No.] [8]5082 was issued to
[Spouses] Serafin Angeles and [Veronica] D.
Angeles and Catalina Cayetano [on] March 17,
1961;
3. A consolidate[d] subdivision survey of H-19562
and H-19887 had been approved by the LRC
designated as plan (LRC) Pcs [-] [1586]
surveyed June 1-15, 1961; which was not
projected in Cad. 375-D, San Mateo Cadastre;
4. Lot [No.] 3050 which is identical to H-19562 was
subdivided and designated as plan Cad-04-
002023-D, into two lots. (Emphasis
supplied.)[21]
xxxx
Notwithstanding the said report, Branch 77 of the Rizal RTC,
on July 2, 2002, promulgated a Decision which upheld the title of
petitioners to Lot No. 3050. It decreed:
Accordingly, the title of defendants, Conrado
Lasquite and Jose Andrade, involving the subject parcel
of land under OCT No. NP-198 and OCT No. NP-197
registered on June 18, 1981, are sustained. Likewise,
the title issued to plaintiffs Prescilla, under OCT No.
ON-333 involving Lot 3052 is sustained.
WHEREFORE, premises considered,
judgment is hereby rendered dismissing these cases.
No Costs.
SO ORDERED.[22]
The trial court disregarded OCT No. 380 and ruled that it was
spurious as it lacked the signature of then Secretary of Agriculture and
Commerce Eulogio Rodriguez. The RTC also ruled that the complaints
for reconveyance of the Precillas, the Manahans and Victory Hills, which
were all founded on extrinsic fraud, had prescribed since more than four
(4) years have elapsed since the land was registered before they filed
cases in court.
The Prescillas, the Manahans and Victory Hills interposed an
appeal to the Court of Appeals. On November 8, 2006, the appellate
court set aside the ruling of the RTC and declared Victory Hills the
absolute owner of Lot No. 3050. The appellate court ruled:
WHEREFORE, the Decision dated July 2, 2002
rendered by the Regional Trial Court of San Mateo,
Rizal, Branch 77 is ANNULLED and SET ASIDE and a
new one entered DECLARING VICTORY HILLS, INC.
the absolute owner of the parcel of land designated
 as Lot 3050 subject of the instant case V.
and ORDERING the Register of Deeds of Rizal to
cancel OCT No. NP-198 and OCT No. NP-197 in the NOT RESOLVING THE ISSUE THAT RESPONDENTS
names of defendants-appellees Conrado Lasquite and CLAIM HAD ALREADY PRESCRIBED.[24]
Juanito Andrade.

Condensed, the twin issues for our determination are: (1)

whether respondent Victory Hills, Inc. is entitled to reconveyance of Lot
SO ORDERED.[23] No. 3050; and (2) whether respondents claim had prescribed.

Aggrieved, petitioners elevated the case to us. Petitioners Petitioners assail the validity of OCT No. 380 as the source of
contend that the Court of Appeals erred in respondents derivative title. They fault the appellate court for according
weight to the certificate of title even if it does not bear the signature of
I. the Secretary of Agriculture and Commerce. They stress that the Bureau
of Lands has no record of Patent No. H-19562 which respondent cited
HOLDING THAT RESPONDENTS OCT NO. 380 AND
as the basis for the issuance of its title to Lot No. 3050 and yet the
HOMESTEAD PATENT NO. H-19562 ARE VALIDLY
appellate court still concluded that the transcription of Patent No. H-
ISSUED;
19562 in OCT No. 380 was conclusive proof of its due
execution. Petitioners likewise call for a review of the facts in this case
II.
owing to the conflicting findings of the RTC and the Court of Appeals.
HOLDING THAT RESPONDENT VICTORY HILLS,
INC. HAS A BETTER RIGHT OF TITLE AND On the other hand, respondent relies on OCT No. 380 as
OWNERSHIP OVER THE SUBJECT PROPERTY VIS- evidence of the earlier registration of Lot No. 3050 in the name of its
A-VIS PETITIONERS CONRADO O. LASQUITE AND predecessor, Jose H. Manahan. Such recording, respondent asserts,
TEODORA I. ANDRADE; has rendered OCT No. 380 indefeasible one year following its issuance
on January 4, 1937 and has effectively segregated Lot No. 3050 from
III. the domain of public lands. Respondent further justifies that the notation
sgd in OCT No. 380 was sufficient indication that the original copy of
GIVING WEIGHT AND CREDENCE TO
RESPONDENTS HOMESTEAD PATENT NO. H- Homestead Patent No. H-19562 had been signed by then Secretary of
Agriculture and Commerce Eulogio Rodriguez. In any case, respondent
19562 DESPITE THE FACT THAT A COPY OF
invokes the presumption of regularity in the performance of duty by the
SAID HOMESTEAD PATENT WAS NEVER
Register of Deeds in issuing OCT No. 380. It finally argues against the
PRESENTED DURING THE TRIAL NOR IN THE
issue of prescription since petitioners raised the same only for the first
APPEAL;
time on appeal.
IV.
Often cited but rarely heeded is the rule that the Supreme Court
HOLDING THAT OCT NO. 380 IS AN EN is not a trier of facts. In the exercise of its power of review, the Court
TOTO TRANSCRIPTION OF HOMESTEAD PATENT does not normally undertake a re-examination of the evidence
NO. H-19562 NOTWITHSTANDING THE FACT THAT presented by the contending parties during the trial of the case
NO EVIDENCE RELATIVE THERETO WAS considering that the findings of fact of the Court of Appeals are
ADDUCED IN THE LOWER COURT;
conclusive and binding on the Court. However, there are several
recognized exceptions[25] in which factual issues may be resolved by this
Court. Two of these exceptions find application in the present case, to
wit: (1) when the findings of fact of the appellate court are contrary to
those of the trial court;[26] and (2) when the findings of fact are premised
on the supposed absence of evidence and contradicted by the evidence
on record.
The assailed Decision of the Court of Appeals upheld OCT No.
380 as the origin of TCT No. 90816 in the name of respondent Victory
Hills. The appellate court ruled that the homestead patent which was
awarded to respondents predecessor, Jose H. Manahan, in 1936
cannot simply be defeated by the subsequent grant of free patent to
petitioners 45 years later. It accepted the transcript of Homestead
Patent No. H-19562 in OCT No. 380 as a faithful reproduction of the
original. Also, the Court of Appeals recognized the notation sgd in OCT
No. 380 as customary to signify that the original copy of the patent had
been signed by the Secretary of Agriculture and Commerce.
After carefully poring over all the evidence submitted in this
case, we find the petition to be impressed with merit.
The relocation survey conducted by the DENR on October 25,
1993 positively confirmed that the mother title of respondents TCT and
the OCTs of petitioners cover the same land. We are confronted,
therefore, with a case of successive registration, in the event of which
we have been constantly guided that:
In successive registrations, where more than
one certificate is issued in respect of a particular estate
or interest in land, the person claiming under the prior
certificate is entitled to the estate or interest; and the
person is deemed to hold under the prior certificate who
is the holder of, or whose claim is derived directly or
indirectly from the person who was the holder of the
earliest certificate issued in respect thereof.[27]
However, we find that the circumstances attendant in this case
militate against a forthright application of this rule.
Section 105 of Act No. 2874,[28] the governing law when
Homestead Patent No. H-19562 was purportedly issued, speaks of who
must sign the patents and certificates granted pursuant to the Act:
SEC. 105. All patents or certificates for
lands granted under this Act shall be prepared in the
Bureau of Lands and shall issue in the name of the
Government of the Philippine Islands under the
signature of the Governor-General, countersigned
by the Secretary of Agriculture and Natural
Resources, but such patents or certificates shall be
effective only for the purposes defined in section one
hundred and twenty-two of the Land Registration Act;
and the actual conveyance of the land shall be effected
only as provided in said section. (Emphasis supplied.)
Noteworthy, Section 47[29] of Act No. 496 or the Land
Registration Act[30] provides that a certified true copy of an original
certificate of title shall be admissible as evidence in our courts and shall
be conclusive as to all matters contained therein except as otherwise
provided by the Act. This is complementary to the rule on the
admissibility of public documents as evidence under Section 23, Rule
132 of the Rules of Court:
SEC. 23. Public documents as evidence. -
Documents consisting of entries in public records made
in the performance of a duty by a public officer
are prima facie evidence of the facts therein stated. All
other public documents are evidence, even against a
third person, of the fact which gave rise to their
execution and of the date of the latter.
Thus, the evidentiary value of public documents must be
sustained in the absence of strong, complete and conclusive proof of its
falsity or nullity.[31]
In the case at bar, the appellate court gave credence to the
certified true copy of OCT No. 380 as proof of ownership of respondents
predecessor. Yet, it is readily apparent from a cursory reading of said
copy that OCT No. 380 was supposedly signed,[32] not by the Secretary
of Agriculture and Natural Resources, as mandated by law, but by the
Secretary of Agriculture and Commerce. Hence, it is plain to see that to
give OCT No. 380 probative value in court would be to allow variance or
an evasion or circumvention of the requirement laid down in Section 105
of Act No. 2874. We are thus warned that any title sourced from the
flawed OCT No. 380 could be void. On this basis, we are justified to
consider with great care any claims derived therefrom.
What taints OCT No. 380 even more is the fact that the records
of the Community Environment and Natural Resources Office (CENRO)
are devoid of evidence to prove that Homestead Patent No. H-
19562,[33] much less a patent application[34] for Lot No. 3050 with the
Bureau of Lands ever existed. The certification[35] from the Bureau of
Lands that Lot No. 3050 was surveyed in the name of Jose Manahan
suggests, at best, that he was a survey claimant. Neither do we find the
derivative titles of OCT No. 380 free from any taint of irregularity. While
TCT No. 46219 in the name of Hieras indicated January 4, 1937 as the
original registration date of Lot No. 3050, the TCTs of subsequent
transferees designated a different date May 17, 1944.
True, a duly-registered certificate of title is considered a public
document and the entries found in it are presumed correct, unless the
party who contests its accuracy can produce evidence establishing
otherwise.[36] Even then, records of public officers which are admissible
in evidence are limited to those matters which the public officer has
authority to record.[37] Indisputably, it was beyond the power of the
Register of Deeds to register a public land based on an invalid, much
worse, a non-existent patent. To sanction an otherwise invalid document
in the guise of upholding the stability of our land registration system
would run counter to the judicial devotion towards purging the system of
illicit titles, in accordance with our base task as the ultimate citadel of
justice and legitimacy.[38]
The established legal principle in actions for annulment or
reconveyance of title is that a party seeking it should establish not
merely by a preponderance of evidence but by clear and convincing
evidence that the land sought to be reconveyed is his. [39] It is rather
obvious from the foregoing disquisition that respondent failed to
dispense such burden. Indeed, the records are replete with proof that
respondent declared the lots comprising Lot No. 3050 for taxation
purposes only after it had instituted the present case in court. This is not
to say of course that tax receipts are evidence of ownership, since they
are not, albeit they are good indicia of possession in the concept of
owner, for no one would ordinarily be paying taxes for a property not in
his actual or at least constructive possession.[40]
Other than paying taxes from 1994-1997, however, respondent
has not shown that it exercised dominion over Lot No. 3050. In contrast,
petitioner Lasquite has been continuously paying taxes on the land since
1972,[41] and has utilized the land as a farm, planted fruit trees and
raised goats thereon. Petitioners have likewise built structures and
managed to entrust the property to the care of certain individuals without
any objection from respondent.
Respondent avers that petitioner Lasquite forged the Deed of
Quitclaim/Assignment of Rights to make it appear that Jose Manahan
conveyed Lot No. 3050 to him. It must be stressed, however, that
whoever alleges forgery has the burden of proving the same. Forgery
cannot be presumed but should be substantiated with clear and
convincing evidence.[42]
Regrettably, Victory Hills was unable to establish that the
Jose H. Manahan from whom it derived its title is the same Jose
Manahan from whom petitioner Lasquite bought Lot No. 3050. During
the trial of this case, several death certificates had been proferred by the
parties, albeit, inconclusive to establish the identity of Jose Manahan as
the common origin of all their titles. Respondent Victory Hills obtained
its title from Jose H. Manahan. Meanwhile, the records disclose that the
Jose S. Manahan from whom the Manahans derived title was 54 years
old and married when he died of infectious hepatitis on October 12,
1947.[43] For their part, the Prescillas traced their title from
Jose M.Manahan, who was supposedly 68 years old and single when
he succumbed to acute myocardial infarction on April 11, 1968.[44] This
was however belied by the List of Register of Deaths in
the Municipality of San Mateo Rizal for the year 1968.[45]
Relevant to the issue of prescription, we have ruled that to
determine when the prescriptive period commenced in an action for
reconveyance, the plaintiffs possession of the disputed property is
material. An action for reconveyance based on an implied trust
prescribes in 10 years. The reference point of the 10-year prescriptive
period is the date of registration of the deed or the issuance of the
title. The prescriptive period applies only if there is an actual need to
reconvey the property as when the plaintiff is not in possession of the
property. However, if the plaintiff, as the real owner of the property also
remains in possession of the property, the prescriptive period to recover
title and possession of the property does not run against him. In such a
case, an action for reconveyance, if nonetheless filed, would be in the
nature of a suit for quieting of title, an action that is imprescriptible.[46]

The records reveal that it was only on January 11, 1994 or

nearly 13 years after OCT Nos. NP-197 and NP-198 were issued that
respondent filed a Motion for Leave to Admit Complaint in
Intervention[47] and Complaint in Intervention[48] before the RTC of
Rizal. Nevertheless, respondent claimed to be in actual possession in
concepto de dueno of a sizeable portion of Lot No. 3050. Thus, the
action assumed the nature of a suit to quiet title; hence, imprescriptible.

However, in our view, respondent Victory Hills has failed to

show its entitlement to a reconveyance of the land subject of the action.

WHEREFORE, the petition is GRANTED. The Decision

dated November 8, 2006 of the Court of Appeals in CA G.R. CV No.
77599 is hereby REVERSED and SET ASIDE. The Decision dated July
2, 2002 of the Regional Trial Court of San Mateo, Rizal, Branch 77,
is REINSTATED. No pronouncement as to costs.

SO ORDERED.