CIVPRO Rule 46-57 FULL CASES 1 of 128
RULE 46: Original Cases
(1) Guy vs CA
G.R. No. 163707 September 15, 2006
MICHAEL C. GUY, petitioner,
vs.
HON. COURT OF APPEALS, HON. SIXTO MARELLA, JR., Presiding
Judge, RTC, Branch 138, Makati City and minors, KAREN DANES
WEI and KAMILLE DANES WEI, represented by their mother,
REMEDIOS OANES, respondents.
DECISION
YNARES-SANTIAGO, J.:
This petition for review on certiorari assails the January 22, 2004
Decision1 of the Court of Appeals in CA-G.R. SP No. 79742, which
affirmed the Orders dated July 21, 20002 and July 17, 20033 of the
Regional Trial Court of Makati City, Branch 138 in SP Proc. Case No.
4549 denying petitioner's motion to dismiss; and its May 25, 2004
Resolution4 denying petitioner's motion for reconsideration.
The facts are as follows:
On June 13, 1997, private respondent-minors Karen Oanes Wei and
Kamille Oanes Wei, represented by their mother Remedios Oanes
(Remedios), filed a petition for letters of administration 5 before the
Regional Trial Court of Makati City, Branch 138. The case was docketed
as Sp. Proc. No. 4549 and entitled Intestate Estate of Sima Wei (a.k.a.
Rufino Guy Susim).
Private respondents alleged that they are the duly acknowledged
illegitimate children of Sima Wei, who died intestate in Makati City on
October 29, 1992, leaving an estate valued at P10,000,000.00
consisting of real and personal properties. His known heirs are his
surviving spouse Shirley Guy and children, Emy, Jeanne, Cristina,
George and Michael, all surnamed Guy. Private respondents prayed for
the appointment of a regular administrator for the orderly settlement of
Sima Wei's estate. They likewise prayed that, in the meantime,
petitioner Michael C. Guy, son of the decedent, be appointed as Special
Administrator of the estate. Attached to private respondents' petition
was a Certification Against Forum Shopping6 signed by their counsel,
Atty. Sedfrey A. Ordoez.
In his Comment/Opposition,7 petitioner prayed for the dismissal of the
petition. He asserted that his deceased father left no debts and that his
estate can be settled without securing letters of administration pursuant
to Section 1, Rule 74 of the Rules of Court. He further argued that
private respondents should have established their status as illegitimate
children during the lifetime of Sima Wei pursuant to Article 175 of the
Family Code.
The other heirs of Sima Wei filed a Joint Motion to Dismiss8 on the
ground that the certification against forum shopping should have been
signed by private respondents and not their counsel. They contended
that Remedios should have executed the certification on behalf of her
minor daughters as mandated by Section 5, Rule 7 of the Rules of
Court.
In a Manifestation/Motion as Supplement to the Joint Motion to
Dismiss,9 petitioner and his co-heirs alleged that private respondents'
claim had been paid, waived, abandoned or otherwise extinguished by
reason of Remedios' June 7, 1993 Release and Waiver of Claim stating
that in exchange for the financial and educational assistance received
from petitioner, Remedios and her minor children discharge the estate
of Sima Wei from any and all liabilities.
The Regional Trial Court denied the Joint Motion to Dismiss as well as
the Supplemental Motion to Dismiss. It ruled that while the Release and
Waiver of Claim was signed by Remedios, it had not been established
that she was the duly constituted guardian of her minor daughters.
Thus, no renunciation of right occurred. Applying a liberal application of
the rules, the trial court also rejected petitioner's objections on the
certification against forum shopping.
Petitioner moved for reconsideration but was denied. He filed a petition
for certiorari before the Court of Appeals which affirmed the orders of
the Regional Trial Court in its assailed Decision dated January 22,
2004, the dispositive portion of which states:

WHEREFORE, premises considered, the present petition is hereby
DENIED DUE COURSE and accordingly DISMISSED, for lack of merit.
Consequently, the assailed Orders dated July 21, 2000 and July 17,
2003 are hereby both AFFIRMED. Respondent Judge is hereby
DIRECTED to resolve the controversy over the illegitimate filiation of the
private respondents (sic) minors [-] Karen Oanes Wei and Kamille
Oanes Wei who are claiming successional rights in the intestate estate
of the deceased Sima Wei, a.k.a. Rufino Guy Susim.
SO ORDERED.10
The Court of Appeals denied petitioner's motion for reconsideration,
hence, this petition.
Petitioner argues that the Court of Appeals disregarded existing rules on
certification against forum shopping; that the Release and Waiver of
Claim executed by Remedios released and discharged the Guy family
and the estate of Sima Wei from any claims or liabilities; and that private
respondents do not have the legal personality to institute the petition for
letters of administration as they failed to prove their filiation during the
lifetime of Sima Wei in accordance with Article 175 of the Family Code.
Private respondents contend that their counsel's certification can be
considered substantial compliance with the rules on certification of non-
forum shopping, and that the petition raises no new issues to warrant
the reversal of the decisions of the Regional Trial Court and the Court of
Appeals.
The issues for resolution are: 1) whether private respondents' petition
should be dismissed for failure to comply with the rules on certification
of non-forum shopping; 2) whether the Release and Waiver of Claim
precludes private respondents from claiming their successional rights;
and 3) whether private respondents are barred by prescription from
proving their filiation.
The petition lacks merit.
Rule 7, Section 5 of the Rules of Court provides that the certification of
non-forum shopping should be executed by the plaintiff or the principal
party. Failure to comply with the requirement shall be cause for
dismissal of the case. However, a liberal application of the rules is
proper where the higher interest of justice would be served. In Sy Chin
CIVPRO Rule 46-57 FULL CASES 2 of 128
v. Court of Appeals,11 we ruled that while a petition may have been
flawed where the certificate of non-forum shopping was signed only by
counsel and not by the party, this procedural lapse may be overlooked
in the interest of substantial justice.12 So it is in the present controversy
where the merits13 of the case and the absence of an intention to violate
the rules with impunity should be considered as compelling reasons to
temper the strict application of the rules.
As regards Remedios' Release and Waiver of Claim, the same does not
bar private respondents from claiming successional rights. To be valid
and effective, a waiver must be couched in clear and unequivocal terms
which leave no doubt as to the intention of a party to give up a right or
benefit which legally pertains to him. A waiver may not be attributed to a
person when its terms do not explicitly and clearly evince an intent to
abandon a right.14
In this case, we find that there was no waiver of hereditary rights. The
Release and Waiver of Claim does not state with clarity the purpose of
its execution. It merely states that Remedios received P300,000.00 and
an educational plan for her minor daughters "by way of financial
assistance and in full settlement of any and all claims of whatsoever
nature and kind x x x against the estate of the late Rufino Guy
Susim."15 Considering that the document did not specifically mention
private respondents' hereditary share in the estate of Sima Wei, it
cannot be construed as a waiver of successional rights.
Moreover, even assuming that Remedios truly waived the hereditary
rights of private respondents, such waiver will not bar the latter's claim.
Article 1044 of the Civil Code, provides:
ART. 1044. Any person having the free disposal of his property may
accept or repudiate an inheritance.
Any inheritance left to minors or incapacitated persons may be
accepted by their parents or guardians. Parents or guardians may
repudiate the inheritance left to their wards only by judicial
authorization.
The right to accept an inheritance left to the poor shall belong to the
persons designated by the testator to determine the beneficiaries and
distribute the property, or in their default, to those mentioned in Article
1030. (Emphasis supplied)

Parents and guardians may not therefore repudiate the inheritance of
their wards without judicial approval. This is because repudiation
amounts to an alienation of property16 which must pass the court's
scrutiny in order to protect the interest of the ward. Not having been
judicially authorized, the Release and Waiver of Claim in the instant
case is void and will not bar private respondents from asserting their
rights as heirs of the deceased.
Furthermore, it must be emphasized that waiver is the intentional
relinquishment of a known right. Where one lacks knowledge of a right,
there is no basis upon which waiver of it can rest. Ignorance of a
material fact negates waiver, and waiver cannot be established by a
consent given under a mistake or misapprehension of fact.17
In the present case, private respondents could not have possibly waived
their successional rights because they are yet to prove their status as
acknowledged illegitimate children of the deceased. Petitioner himself
has consistently denied that private respondents are his co-heirs. It
would thus be inconsistent to rule that they waived their hereditary rights
when petitioner claims that they do not have such right. Hence,
petitioner's invocation of waiver on the part of private respondents must
fail.
Anent the issue on private respondents' filiation, we agree with the
Court of Appeals that a ruling on the same would be premature
considering that private respondents have yet to present evidence.
Before the Family Code took effect, the governing law on actions for
recognition of illegitimate children was Article 285 of the Civil Code, to
wit:
ART. 285. The action for the recognition of natural children may be
brought only during the lifetime of the presumed parents, except in the
following cases:
(1) If the father or mother died during the minority of the child, in
which case the latter may file the action before the expiration of
four years from the attainment of his majority;
(2) If after the death of the father or of the mother a document should
appear of which nothing had been heard and in which either or both
parents recognize the child.
CIVPRO Rule 46-57 FULL CASES 3 of 128
In this case, the action must be commenced within four years from the
finding of the document. (Emphasis supplied)
We ruled in Bernabe v. Alejo18 that illegitimate children who were still
minors at the time the Family Code took effect and whose putative
parent died during their minority are given the right to seek recognition
for a period of up to four years from attaining majority age. This vested
right was not impaired or taken away by the passage of the Family
Code.19
On the other hand, Articles 172, 173 and 175 of the Family Code, which
superseded Article 285 of the Civil Code, provide:
ART. 172. The filiation of legitimate children is established by any of the
following:
(1) The record of birth appearing in the civil register or a final judgment;
or
(2) An admission of legitimate filiation in a public document or a private
handwritten instrument and signed by the parent concerned.
In the absence of the foregoing evidence, the legitimate filiation shall be
proved by:
(1) The open and continuous possession of the status of a legitimate
child; or
(2) Any other means allowed by the Rules of Court and special laws.
ART. 173. The action to claim legitimacy may be brought by the child
during his or her lifetime and shall be transmitted to the heirs should the
child die during minority or in a state of insanity. In these cases, the
heirs shall have a period of five years within which to institute the action.
The action already commenced by the child shall survive
notwithstanding the death of either or both of the parties.
ART. 175. Illegitimate children may establish their illegitimate filiation in
the same way and on the same, evidence as legitimate children.

The action must be brought within the same period specified in Article
173, except when the action is based on the second paragraph of
Article 172, in which case the action may be brought during the lifetime
of the alleged parent.
Under the Family Code, when filiation of an illegitimate child is
established by a record of birth appearing in the civil register or a final
judgment, or an admission of filiation in a public document or a private
handwritten instrument signed by the parent concerned, the action for
recognition may be brought by the child during his or her lifetime.
However, if the action is based upon open and continuous possession
of the status of an illegitimate child, or any other means allowed by the
rules or special laws, it may only be brought during the lifetime of the
alleged parent.
It is clear therefore that the resolution of the issue of prescription
depends on the type of evidence to be adduced by private respondents
in proving their filiation. However, it would be impossible to determine
the same in this case as there has been no reception of evidence yet.
This Court is not a trier of facts. Such matters may be resolved only by
the Regional Trial Court after a full-blown trial.
While the original action filed by private respondents was a petition for
letters of administration, the trial court is not precluded from receiving
evidence on private respondents' filiation. Its jurisdiction extends to
matters incidental and collateral to the exercise of its recognized powers
in handling the settlement of the estate, including the determination of
the status of each heir.20 That the two causes of action, one to compel
recognition and the other to claim inheritance, may be joined in one
complaint is not new in our jurisprudence.21 As held in Briz v. Briz:22
The question whether a person in the position of the present plaintiff can
in any event maintain a complex action to compel recognition as a
natural child and at the same time to obtain ulterior relief in the
character of heir, is one which in the opinion of this court must be
answered in the affirmative, provided always that the conditions
justifying the joinder of the two distinct causes of action are present in
the particular case. In other words, there is no absolute necessity
requiring that the action to compel acknowledgment should have been
instituted and prosecuted to a successful conclusion prior to the action
in which that same plaintiff seeks additional relief in the character of
heir. Certainly, there is nothing so peculiar to the action to compel
CIVPRO Rule 46-57 FULL CASES 4 of 128
acknowledgment as to require that a rule should be here applied
different from that generally applicable in other cases. x x x
The conclusion above stated, though not heretofore explicitly formulated
by this court, is undoubtedly to some extent supported by our prior
decisions. Thus, we have held in numerous cases, and the doctrine
must be considered well settled, that a natural child having a right to
compel acknowledgment, but who has not been in fact acknowledged,
may maintain partition proceedings for the division of the inheritance
against his coheirs (Siguiong vs. Siguiong, 8 Phil., 5; Tiamson vs.
Tiamson, 32 Phil., 62); and the same person may intervene in
proceedings for the distribution of the estate of his deceased natural
father, or mother (Capistrano vs. Fabella, 8 Phil., 135; Conde vs. Abaya,
13 Phil., 249; Ramirez vs. Gmur, 42 Phil., 855). In neither of these
situations has it been thought necessary for the plaintiff to show a prior
decree compelling acknowledgment. The obvious reason is that in
partition suits and distribution proceedings the other persons who might
take by inheritance are before the court; and the declaration of heirship
is appropriate to such proceedings.
WHEREFORE, the instant petition is DENIED. The Decision dated
January 22, 2004 of the Court of Appeals in CA-G.R. SP No. 79742
affirming the denial of petitioner's motion to dismiss; and its Resolution
dated May 25, 2004 denying petitioner's motion for reconsideration,
are AFFIRMED. Let the records be REMANDED to the Regional Trial
Court of Makati City, Branch 138 for further proceedings.
SO ORDERED.

(2) Molina vs CA
[G.R. No. 143156. January 13, 2003]
TEDDY MOLINA, JULIET PASCUAL, ISAGANI YAMBOT, and LETTY
JIMENEZ-MAGSANOC, petitioners, vs. HON. COURT OF APPEALS
and RAYMUNDO A. ARMOVIT, respondents.
RESOLUTION
QUISUMBING, J.:
This petition for review seeks the reversal of the resolutions dated
September 30, 1999[1] and May 2, 2000[2] of the Court of Appeals in CA-
G.R. SP No. 54397. Both resolutions dismissed herein petitioners special
civil action for certiorari due to their failure to: (a) include certified true
copies of the orders dated July 9, 1997 and June 29, 1999 of the Regional
Trial Court of Vigan, Ilocos Sur, Branch 21, and other pleadings referred
to in the petition; and (b) implead the RTC judge as a nominal party.
The facts, as culled from the parties pleadings, are as follows:
On May 2, 1996, the Philippine Daily Inquirer published a news item,
which reads in part:
PACC coddled GO,
2 NBI execs claim
By Teddy Molina
and Juliet Pascual
PDI Northern Luzon Bureau
xxx
NBI agents reportedly raided a vacation house in San Fernando, La
Union, owned by Raymundo Armovit, Gos lawyer, in September.
They missed Go, who left the house hours before the agents came.
CIVPRO Rule 46-57 FULL CASES 5 of 128
The source said Go was also in Vigan in November, during which he
attended the wedding anniversary of a movie couple. [3]
On May 3, 1996, the same newspaper reported that:
NBI exec says Go
tipped off by PACC
By Teddy Molina
and Juliet Pascual
PDI Northern Luzon Bureau
AN OFFICIAL of the National Bureau of Investigation in Northern
Luzon accused the Presidential Anti-Crime Commission of leaking
out to Rolito Go a planned raid by NBI agents on a vacation house
in San Fernando, La Union, where the convicted killer was hiding
at the time.
The raiders belonging to the NBI Special Operations Group missed
Go but found some of his personal belongings near the houses
swimming pool, the source, who asked not to be identified said.
This happened in September at the vacation home of Gos lawyer,
Raymundo Armovit, or eight months before the PACC arrested him
on Tuesday in Lubao, Pampanga.
After the La Union raid, it was hard to track Go because he was moving
as if he was receiving advice, the source further claimed.[4]
As a consequence, private respondent Raymundo Armovit filed a
complaint for libel against petitioners, alleging that they caused to be
published reports that maliciously accused him of harboring and/or
concealing a convicted murderer.
In a resolution dated October 31, 1996, the Provincial Prosecutor of Ilocos
Sur found probable cause and recommended the filing of an Information
for libel against petitioners.[5]Accordingly, on November 28, 1996, two
Informations for libel were filed with the RTC of Vigan, Ilocos Sur. [6]
On December 12, 1996, petitioners sought a review of the resolution
dated October 31, 1996 by the Office of the Regional State Prosecutor.
The latter reversed the findings of the Provincial Prosecutor and directed
the latter to withdraw the Informations filed.

However, the RTC of Vigan, Ilocos Sur denied the motion to withdraw the
indictments on the ground that there was probable cause for the filing of
the Informations. Petitioners moved to reconsider the denial, but this
motion was similarly denied.
Petitioners then elevated the case to the Court of Appeals via a special
civil action for certiorari, docketed as CA-G.R. SP No. 54397.
On September 30, 1999, the appellate court resolved the case as follows:
WHEREFORE, in view of the foregoing, the petition is hereby
DISMISSED.
SO ORDERED.[7]
The Court of Appeals found that the copies of the assailed orders of the
trial court were purportedly certified, but there was no showing
whatsoever of the authority of the person who certified the same.
Moreover, the seal of the trial court could not be identified on the copies
of said orders. Furthermore, the petition was not accompanied by all the
pleadings and documents pertinent thereto.
Petitioners then moved for reconsideration, but this was likewise denied.
Hence, the instant petition, grounded on the allegation that:
THE COURT OF APPEALS ERRED IN DISMISSING THE PETITION
FOR CERTIORARI AND PROHIBITION ON MERE TECHNICALITIES
SUCH AS: 1.) PETITIONERS FAILED TO SHOW THE AUTHORITY OF
THE PERSON WHO CERTIFIED THE COPIES OF THE ATTACHED
ORDERS; 2.) THE SEAL OF THE TRIAL COURT COULD NOT BE
IDENTIFIED FROM THE COPIES SUBMITTED; 3) PETITIONERS DID
NOT ATTACH COPIES OF ALL PLEADINGS AND DOCUMENTS; AND
4.) THE JUDGE OF THE LOWER COURT WAS NOT IMPLEADED,
AND COMPLETELY DISREGARDING THE MERITS OF THE
PETITION. [8]
Simply stated, the issue is: Did the Court of Appeals commit a reversible
error of law in dismissing the petition? We find that it did.
Petitioners contend, firstly, that they should not be faulted for such
technical defects as the failure to indicate the authority of the certifying
officer or the inscrutable imprint of the trial courts seal because they did
not have a hand in the preparation of the documents. After all, they only
CIVPRO Rule 46-57 FULL CASES 6 of 128
relied in good faith on the authority and diligence of the court personnel
who prepared and authenticated the subject documents, considering that
said personnel are presumed to know the procedural and technical
requirements and because of the presumption that official duty has been
regularly performed. According to petitioners, it was too harsh and
arbitrary for the Court of Appeals to fault them for the oversight committed
by the trial court personnel.
Second, petitioners aver that their failure to attach the pleadings and
documents relevant to the petition is immaterial as the Supreme Court, in
a long line of cases, has given due course to similarly faulty petitions in
the interests of equity and justice and merely directed that the lacking
pleadings and documents be attached.
Lastly, petitioners claim that they did not err if they only mentioned in the
caption of the petition the trial court and not the trial court judge. After all,
it is clear from the enumeration of parties against whom or against which
a petition for certiorari may be filed, namely, any tribunal, board or officer
exercising judicial or quasi-judicial functions in Rule 65, Section 1[9] of the
Rules of Court that they need not implead the officer or the trial court
judge who committed the grave abuse of discretion, amounting to want
or excess of jurisdiction.
Instead of addressing the issue and the petitioners arguments, private
respondents submission focuses on the merits of the libel case. Thus, we
are unable to agree with his contentions insofar as they lack direct
pertinence to the present petition.
A litigation is a contest in which each contending party fully and fairly lays
before the court the facts in issue and then, brushing aside as wholly
trivial and indecisive all imperfections of form and technicalities, asks that
justice be done on the merits.[10] Hence, Rule 1, Section 6[11] of the Rules
of Court mandates that rules of procedure shall be liberally interpreted. In
the instant case, we agree with petitioners that the Court of Appeals erred
in stressing too much petitioners failure to comply with technicalities. We
cannot attribute to petitioners the perceived defects on the attached
copies of the trial courts orders because petitioners did not have control
over their preparation. Moreover, Rule 131, Section 3 (ff) [12] of the Rules
of Court lays the presumption in petitioners favor that they followed the
pertinent rules on attaching certified copies of the orders subject of their
petition below. As private respondent failed to show evidence to rebut this
presumption, the presumption must stand.
We likewise rule that in the present case, the alleged failure to attach all
pleadings and documents is not a sufficient ground to dismiss the petition.
In appropriate cases, the courts may liberally construe procedural rules

in order to meet and advance the cause of substantial justice. [13] We have
held that lapses in the literal observation of a procedural rule will be
overlooked when they do not involve public policy, when they arose from
an honest mistake or unforeseen accident, when they have not prejudiced
the adverse party, nor deprived the court of its authority.[14] In the instant
case, petitioners failure to append: (1) herein respondents Answer to the
Petition for Review filed on January 2, 1997; (2) petitioners Memorandum
filed on April 28, 1997; and (3) respondents Memorandum filed on May
16, 1997, all of which were mentioned in the petition for certiorari before
the appellate court do not touch on public policy, nor do they deprive the
appellate court of its authority. No right of respondent is prejudiced or
adversely affected.
Lastly, it is not required under Rule 65, Section 1 of the Rules of Court
that the trial judge himself be impleaded in a petition for certiorari. The
rule clearly states that a petition for certiorari may be filed against the
tribunal, board or officer exercising judicial or quasi-judicial
functions.[15] The inclusion of the tribunal, which issued the decision, as
nominal party, was substantially complied with. When petitioners
mentioned the Regional Trial Court, Branch 21 of Vigan, Ilocos Sur, they
also referred necessarily to the judge who issued the assailed resolutions.
WHEREFORE, the instant petition is GRANTED. The resolutions of the
Court of Appeals in CA-G.R. SP No. 54397, dated September 30, 1999
and May 2, 2000 are REVERSED and SET ASIDE. The Court of Appeals
is hereby directed to reinstate the petition for certiorari filed by petitioners
in CA-G.R. SP No. 54397, with dispatch.
SO ORDERED.
Bellosillo, (Chairman), Mendoza, Austria-Martinez, and Callejo, Sr.,
JJ., concur.
CIVPRO Rule 46-57 FULL CASES 7 of 128
(3) NYK vs NLRC
[G.R. No. 146267. February 17, 2003]
NYK INTERNATIONAL KNITWEAR CORPORATION PHILIPPINES and/or
CATHY NG, petitioners, vs. NATIONAL LABOR RELATIONS
COMMISSION and VIRGINIA M. PUBLICO, respondents.
DECISION
QUISUMBING, J.:
In this petition for review, petitioners NYK International Knitwear
Corporation Philippines (henceforth NYK, for brevity) and its manager,
Cathy Ng, assail the resolution[1] dated September 15, 2000 of the Court
of Appeals in CA-G.R. SP No. 60542, which dismissed their petition for
certiorari for non-compliance with Section 1, Rule 65 of the 1997 Rules
of Civil Procedure. Also assailed is the appellate courts resolution [2] of
December 5, 2000, which denied the motion for reconsideration.
The facts, as gleaned from the findings of the Labor Arbiter as affirmed
by the National Labor Relations Commission (NLRC), show that:
On February 8, 1995, herein petitioner NYK hired respondent Virginia
Publico as a sewer. Under the terms and conditions of her employment,
Publico was paid on a piece-rate basis, but required to work from 8:00
A.M. to 12:00 midnight. On the average, she earned P185.00 daily.
At about 10:00 P.M. of May 7, 1997, Publico requested that she be
allowed to leave the work place early, as she was not feeling well due to
a bout of influenza. Permission was refused but nonetheless, Publico
went home.
The following day, Publico called up her employer and notified
management that she was still recovering from her ailment.
On May 9, 1997, Publico reported for work. To her mortification and
surprise, however, the security guard prevented her from entering the
NYK premises, allegedly on managements order. She begged to be
allowed inside, but the guard remained adamant. It was only when

Publico declared that she would just complete the unfinished work she
had left on May 7 that the guard let her in.
Once inside the factory, Publico requested to see the owner, one Stephen
Ng. Her request was declined. She was instead asked to come back the
following day.
On May 10, 1997, Publico returned to NYK as instructed. After waiting for
three and half (3) hours, she was finally able to see Stephen Ng. When
she inquired why she was barred from reporting for work, Mr. Ng told her
she was dismissed due to her refusal to render overtime service.
Aggrieved, private respondent filed a complaint for illegal dismissal
against petitioner corporation and its manager, petitioner Cathy Ng,
docketed as NLRC NCR Case No. 00-06-03925-97.
Before the Labor Arbiter, petitioners predictably had a different version of
the story. Allegedly, they took the pains to verify why Publico did not
report for work on May 7, 1997 and found out that her husband did not
allow her to work at night. As night work is a must in their line of business,
particularly when there are rush orders, petitioners claimed that given
Publicos failure to render overtime work, they were left with no other
recourse but to fire her.
On March 19, 1998, the Labor Arbiter held Publicos dismissal to be illegal,
disposing as follows:
WHEREFORE, the respondents are hereby ordered to reinstate the
complainant to her former position with full backwages from the date her
salary was withheld until she is actually reinstated, which amounted
to P50,168.30 x x x. The respondents are, likewise, assessed the sum
of P5,016.83 representing 10% of the amount awarded as attorneys
fees. The rest of the claims are dismissed for lack of merit.
SO ORDERED.[3]
On appeal, the NLRC, in a resolution[4] dated May 17, 2000, affirmed the
decision of the Labor Arbiter in toto.
In due time, petitioners impugned the NLRC decision by way of a special
civil action of certiorari filed before the Court of Appeals, docketed as CA-
G.R. SP No. 60542. Petitioners ascribed grave abuse of discretion
amounting to lack or excess of jurisdiction to public respondent NLRC for
affirming the ruling of the Labor Arbiter.
CIVPRO Rule 46-57 FULL CASES 8 of 128
In its resolution of September 15, 2000, the appellate court dismissed the
petition outright. The Court of Appeals pointed out that there was non-
compliance with Section 1 of Rule 65 of the 1997 Rules of Civil Procedure
as the petition was merely accompanied by a certified xerox copy of the
assailed NLRC decision, instead of a certified true copy thereof as
required by the Rules of Court.[5] Furthermore, petitioners failed to attach
the other pleadings and documents pertinent and material to their petition,
such as the parties position papers, their evidence and the motion for
reconsideration in contravention of the said rule.[6]
Petitioners duly moved for reconsideration, explaining that they had
requested for a certified true copy of the NLRCs decision but since the
original NLRC decision was printed on onionskin was not legible, the
NLRC itself photocopied the resolution and certified it afterwards. As
proof of payment of petitioners request for a certified true copy of the
NLRC decision, petitioners attached a copy of the official receipts issued
by the NLRC, which described the nature of the entry as CERT. TRUE
COPY.[7] Petitioners, likewise, appended in their motion copies of
pertinent pleadings and documents not previously attached in their
petition.
On December 5, 2000, the appellate court denied petitioners motion for
reconsideration.[8]
Hence this petition for review.
Before us, petitioners submit the following issues for our resolution:
I
WHETHER OR NOT THE COURT OF APPEALS SHOULD HAVE
GIVEN DUE COURSE TO THE PETITION FOR CERTIORARI.
II
WHETHER OR NOT THERE EXISTS EVIDENCE ON RECORD TO
WARRANT THE RULING THAT COMPLAINANT WAS ILLEGALLY
DISMISSED, AND COROLLARY THERETO, WHETHER OR NOT
THERE IS LEGAL JUSTIFICATION TO AWARD BACKWAGES AND
ORDER REINSTATEMENT.
III

WHETHER OR NOT THERE WAS GRAVE ABUSE OF DISCRETION
ON THE PART OF THE PUBLIC RESPONDENT NLRC SO AS TO
JUSTIFY A REVERSAL OF ITS RESOLUTIONS DATED MAY 17, 2000
AND JUNE 30, 2000.[9]
Only two issues need resolution, one having to do with adjective law and
the other with substantial law, namely:
(1) Did the Court of Appeals commit a reversible error in dismissing CA-
G.R. SP No. 60542 on purely technical grounds, i.e., that the attached
copy of the NLRC decision is a mere photocopy of the original decision;
and
(2) Did the Court of Appeals err in refusing to rule on the correctness of
the NLRCs findings that private respondent was illegally dismissed?
On the first issue, petitioners contend that they have substantially
complied with the requirements of Section 1, Rule 65, hence, in the
interests of justice and equity, the Court of Appeals should have given
due course to their special civil action for certiorari.
Private respondent, on the other hand, maintains that petitioners wanton
disregard of the Rule warrant the outright dismissal of their petition. She
adds that the present petition raises factual issues that the Court cannot
pass upon at the first instance.
Section 1 of Rule 65,[10] 1997 Rules of Civil Procedure, requires that the
petition shall be accompanied by a certified true copy of the judgment or
order subject thereof, together with copies of all pleadings and documents
relevant and pertinent thereto. The precursor of the Revised Rules of Civil
Procedure, Administrative Circular No. 3-96, which took effect on June 1,
1996, instructs us what a certified true copy is:
1. The "certified true copy" thereof shall be such other copy
furnished to a party at his instance or in his behalf, duly
authenticated by the authorized officers or representatives of the
issuing entity as hereinbefore specified.
xxx
3. The certified true copy must further comply with all the
regulations therefor of the issuing entity and it is the authenticated
original of such certified true copy, and not a mere xerox copy
thereof, which shall be utilized as an annex to the petition or other
initiatory pleading. (Emphasis supplied.)
CIVPRO Rule 46-57 FULL CASES 9 of 128
xxx
Applying the preceding guidepost in the present case, the disputed
document although stamped as certified true copy is not an
authenticated original of such certified true copy, but only a xerox copy
thereof, in contravention of paragraph 3 of the above-quoted guidelines.
Hence, no error may be ascribed to the Court of Appeals in dismissing
the petition for certiorari outright pursuant to paragraph 5 of
Administrative Circular No. 3-96, which provides:
5. It shall be the duty and responsibility of the party using the
documents required by Paragraph (3) of Circular No. 1-88 to verify and
ensure compliance with all the requirements therefor as detailed in the
preceding paragraphs. Failure to do so shall result in the rejection of
such annexes and the dismissal of the case. Subsequent
compliance shall not warrant any reconsideration unless the court
is fully satisfied that the non-compliance was not in any way
attributable to the party, despite due diligence on his part, and that
there are highly justifiable and compelling reasons for the court to
make such other disposition as it may deem just and
equitable. (Emphasis supplied.)
The members of this Court are not unmindful that in exceptional cases
and for compelling reasons, we have disregarded similar procedural
defects in order to correct a patent injustice made. However, petitioners
here have not shown any compelling reason for us to relax the rule.
Petitioners are hereby reminded that the right to file a special civil action
of certiorari is neither a natural right nor a part of due process. A writ of
certiorari is a prerogative writ, never demandable as a matter of right,
never issued except in the exercise of judicial discretion. [11]Hence, he who
seeks a writ of certiorari must apply for it only in the manner and strictly
in accordance with the provisions of the law and the Rules.
To avoid further delay in resolving the present controversy, we now come
to the second issue. Petitioners contend that private respondents refusal
to render night work is tantamount to abandonment of duties which
constitutes a just ground for termination of service. They aver that the
Labor Arbiter gravely erred in awarding backwages to private respondent,
as there was no illegal dismissal. Petitioners allege that management did
not terminate her services, but in fact asked her to return to work during
the preliminary conferences. Hence, it would be the height of injustice to
award backwages for work, which was never rendered through private
respondents own choice. Petitioners add that they cannot be held
solidarily liable in this case as there was neither malice nor bad faith.
 CIVPRO Rule 46-57 FULL CASES 10 of 128

Petitioners arguments fail to persuade us. Petitioners raise factual
questions which are improper in a petition for review on certiorari.
Findings of facts of the NLRC, particularly in a case where the NLRC and
the Labor Arbiter are in agreement, are deemed binding and conclusive
upon this Court.[12]
WHEREFORE, the instant petition is DENIED. The assailed resolutions
of the Court of Appeals dated September 15, 2000 and December 5,
2000, are hereby AFFIRMED. Costs against petitioners.
SO ORDERED.

Hence, petitioners bare allegations of abandonment cannot stand the

unswerving conclusion by both quasi-judicial agencies below that private
respondent was unlawfully dismissed.We find no reason to deviate from
the consistent findings of the Labor Arbiter and the NLRC that there was
no basis to find that Virginia abandoned her work. Indeed, factual findings
of the NLRC affirming those of the Labor Arbiter, both bodies being
deemed to have acquired expertise in matters within their jurisdictions,
when sufficiently supported by evidence on record, are accorded respect
if not finality, and are considered binding on this Court.[13] As long as their
decisions are devoid of any unfairness or arbitrariness in the process of
their deduction from the evidence proffered by the parties, all that is left
is for the Court to stamp its affirmation and declare its finality. No
reversible error may thus be laid at the door of the Court of Appeals when
it refused to rule that the NLRC committed a grave abuse of discretion
amounting to want or excess of jurisdiction in holding that private
respondent was illegally dismissed.
Anent petitioners assertion that they cannot be solidarily liable in this case
as there was no malice or bad faith on their part has no leg to stand on.
What the Court finds apropos is our disquisition in A.C. Ransom Labor
Union-CCLU v. NLRC,[14] which held that since a corporation is an
artificial person, it must have an officer who can be presumed to be the
employer, being the person acting in the interest of the employer. In other
words the corporation, in the technical sense only, is the employer. In a
subsequent case, we ordered the corporate officers of the employer
corporation to pay jointly and solidarily the private respondents monetary
award.[15] More recently, a corporation and its president were directed by
this Court to jointly and severally reinstate the illegally dismissed
employees to their former positions and to pay the monetary awards. [16]
In this case Cathy Ng, admittedly, is the manager of NYK. Conformably
with our ruling in A. C. Ransom, she falls within the meaning of an
employer as contemplated by the Labor Code,[17] who may be held jointly
and severally liable for the obligations of the corporation to its dismissed
employees. Pursuant to prevailing jurisprudence, Cathy Ng, in her
capacity as manager and responsible officer of NYK, cannot be
exonerated from her joint and several liability in the payment of monetary
award to private respondent.

RULE 47: Annulment of Judgments of Final Orders, and Resolutions
(1) Bulawan vs Aquende
The Case
This is a petition for review1 of the 26 November 2007 Decision2 and 7
May 2008 Resolution3 of the Court of Appeals in CA-G.R. SP No.
91763. In its 26 November 2007 Decision, the Court of Appeals granted
respondent Emerson B. Aquendes (Aquende) petition for annulment of
judgment and declared the 26 November 1996 Decision4 of the
Regional Trial Court, Legazpi City, Branch 6 (trial court) void. In its 7
May 2008 Resolution, the Court of Appeals denied
petitioner Maximina A. Bulawans5 (Bulawan) motion for reconsideration.
The Facts
On 1 March 1995, Bulawan filed a complaint for annulment of
title, reconveyance and damages against Lourdes Yap (Yap) and the
Register of Deeds before the trial court docketed as Civil Case No.
9040.6 Bulawan claimed that she is the owner of Lot No. 1634-B of Psd-
153847 covered by Transfer Certificate of Title (TCT) No. 13733 having
bought the property from its owners, brothers Santos and
Francisco Yaptengco (Yaptengco brothers), who claimed to have
inherited the property from Yap Chin Cun.7 Bulawan alleged that Yap
claimed ownership of the same property and caused the issuance of
TCT No. 40292 in Yaps name.
In her Answer,8 Yap clarified that she asserts ownership of Lot No.
1634-A of Psd-187165, which she claimed is the controlling subdivision
survey for Lot No. 1634. Yap also mentioned that, in Civil Case No.
5064, the trial court already declared that Psd-153847 was simulated by
CIVPRO Rule 46-57 FULL CASES 11 of 128
the Yaptengco brothers and that their claim on Lot No. 1634-B was
void.9 The trial court likewise adjudged Yap Chin Cun as the rightful
owner of Lot No. 1634-B. Yap also stated that Lot No. 1634-B was sold
by Yap Chin Cun to the Aquende family.
On 26 November 1996, the trial court ruled in favor of Bulawan. The trial
courts 26 November 1996 Decision reads:
WHEREFORE, premises considered, decision is hereby rendered in
favor of the plaintiff (Bulawan) and against the defendant (Yap)
declaring the plaintiff as the lawful owner and possesor of the property
in question, particularly designated as Lot 1634-B of Plan Psd-153847.
The defendant Lourdes Yap is hereby ordered to respect the plaintiffs
ownership and possession of said lot and to desist from disturbing the
plaintiff in her ownership and possession of said lot.
Subdivision Plan Psd-187165 for Lot 1634 Albay Cadastre as well as
TCT No. 40292 in the name of plaintiff10 over Lot 1634-A of Plan Psd-
187165 are hereby declared null and void and the Register of Deeds
of Legazpi City is hereby ordered to cancel as well as any other
certificate of title issued pursuant to said Plan Psd-187165.
Defendant Lourdes Yap is hereby ordered to pay plaintiff P10,000.00 as
reasonable attorneys fees, P5,000.00 as litigation and incidental
expenses and the costs.
SO ORDERED.11

Yap appealed. On 20 July 2001, the Court of Appeals dismissed Yaps
appeal.
On 7 February 2002, the trial courts 26 November 2006 Decision
became final and executory per entry of judgment dated 20 July 2001.
On 19 July 2002, the trial court issued a writ of execution. 12
In a letter dated 24 July 2002,13 the Register of Deeds
informed Aquende of the trial courts writ of execution and
required Aquende to produce TCT No. 40067 so that a memorandum of
the lien may be annotated on the title. On 25 July 2002, Aquende wrote
a letter to the Register of Deeds questioning the trial courts writ of
execution against his property.14 Aquende alleged that he was unaware
of any litigation involving his property having received no summons or
notice thereof, nor was he aware of any adverse claim as no notice
of lis pendenswas inscribed on the title.
On 2 August 2002, Aquende filed a Third Party Claim15 against the writ
of execution because it affected his property and, not being a party in
Civil Case No. 9040, he argued that he is not bound by the trial courts
26 November 1996 Decision. In a letter dated 5 August 2002, 16 the
Clerk of Court said that a Third Party Claim was not the proper remedy
because the sheriff did not levy upon or seize Aquendes property.
Moreover, the property was not in the sheriffs possession and it was not
about to be sold by virtue of the writ of execution.
Aquende then filed a Notice of Appearance with Third Party
Motion17 and prayed for the partial annulment of the trial courts 26
November 1996 Decision, specifically the portion which ordered the
cancellation of Psd-187165 as well as any other certificate of title issued
pursuant to Psd-187165. Aquende also filed a Supplemental
Motion18 where he reiterated that he was not a party in Civil Case No.
9040 and that since the action was in personam or quasi in rem, only
the parties in the case are bound by the decision.
CIVPRO Rule 46-57 FULL CASES 12 of 128
In its 19 February 2003 Order,19 the trial court
denied Aquendes motions. According to the trial court, it had lost
jurisdiction to modify its 26 November 1996 Decision when the Court of
Appeals affirmed said decision.
Thereafter, Aquende filed a petition for annulment of judgment before
the Court of Appeals on the grounds of extrinsic fraud and lack of
jurisdiction.20 Aquende alleged that he was deprived of his property
without due process of law. Aquende argued that there was extrinsic
fraud when Bulawan conveniently failed to implead him despite her
knowledge of the existing title in his name and, thus, prevented him
from participating in the proceedings and protecting his
title. Aquende also alleged that Bulawan was in collusion with Judge
Vladimir B. Brusola who, despite knowledge of the earlier decision in
Civil Case No. 5064 on the ownership of Lot No. 1634-B
and Aquendes interest over the property, ruled in favor
of Bulawan. Aquende added that he is an indispensable party and the
trial court did not acquire jurisdiction over his person because he was
not impleaded as a party in the case. Aquende also pointed out that the
trial court went beyond the jurisdiction conferred by the allegations on
the complaint because Bulawan did not pray for the cancellation of Psd-
187165 and TCT No. 40067. Aquende likewise argued that a certificate
of title should not be subject to collateral attack and it cannot be altered,
modified or canceled except in direct proceedings in accordance with
law.
The Court of Appeals ruled in favor of Aquende. The 26 November 2007
Decision of the Court of Appeals reads:
WHEREFORE, the petition is GRANTED. The Decision dated
November 26, 1996 in Civil Case No. 9040 is hereby
declared NULL and VOID. Transfer Certificate of Title No. 40067
registered in the name of petitioner Emerson B. Aquende and (LRC)
Psd-187165 are hereby ordered REINSTATED. Entry Nos. 3823 A, B

and C annotated by the Register of Deeds of Legazpi City on TCT No.
40067 are hereby ordered DELETED.
The parties are hereby DIRECTED to respect and abide by the Decision
dated October 31, 1990 in Civil Case No. 5064 quieting title over Lot
No. 1634-B (LRC) Psd-187165, now registered in the name of
Emerson Aquende under TCT No. 40067.
SO ORDERED.21
On 8 January 2008, Bulawan filed a motion for reconsideration.22 In its 7
May 2008 Resolution, the Court of Appeals denied Bulawans motion.
Hence, this petition.
The Ruling of the Court of Appeals
The Court of Appeals ruled that it may still entertain the petition despite
the fact that another division of the Court of Appeals already affirmed
the trial courts 26 November 1996 Decision. The other division of the
Court of Appeals was not given the opportunity to rule on the issue
of Aquende being an indispensable party because that issue was not
raised during the proceedings before the trial court and on appeal.
CIVPRO Rule 46-57 FULL CASES 13 of 128
The Court of Appeals declared that Aquende was an indispensable
party who was adversely affected by the trial courts 26 November 1996
Decision. The Court of Appeals said that the trial court should
have impleaded Aquende under Section 11, Rule 323 of the Rules of
Court. Since jurisdiction was not properly acquired over Aquende, the
Court of Appeals declared the trial courts 26 November 1996 Decision
void. According to the Court of Appeals, Aquende had no other recourse
but to seek the nullification of the trial courts 26 November 1996
Decision that unduly deprived him of his property.
The Court of Appeals added that the trial courts 26 November 1996
Decision was void because the trial court failed to note that the
Extrajudicial Settlement of Estate and Partition, from where
the Yaptengco brothers derived their ownership over Lot No. 1634-B of
Psd-153847 allegedly as heirs of Yap Chin Cun and now being claimed
by Bulawan, had already been declared void in Civil Case No.
5064.24 The Court of Appeals also said that a reading
of Bulawans complaint showed that the trial court had no jurisdiction to
order the nullification of Psd-187165 and TCT No. 40067 because this
was not one of the reliefs that Bulawan prayed for.
The Issues
Bulawan raises the following issues:
I.
The Former Third Division of the Court of Appeals decided contrary to
existing laws and jurisprudence when it declared the Decision, dated 26
November 1996, in Civil Case No. 9040 null and void considering that a
petition for annulment [of judgment] under Rule 47 of the Rules of Court
is an equitable remedy which is available only under extraordinary
circumstances.

II.
The Former Third Division of the Court of Appeals decided contrary to
law when it considered Respondent Emerson B. Aquende as an
indispensable party in Civil Case No. 9040.
III.
The Former Third Division of the Court of Appeals sanctioned a
departure from the accepted and usual course of judicial proceedings
when it overturned a final and executory decision of another Division
thereof.25
The Ruling of the Court
The petition has no merit.
Petition for Annulment of Judgment
is the Proper Remedy
Bulawan argues that the Court of Appeals erred in
granting Aquendes petition for annulment of judgment in the absence of
CIVPRO Rule 46-57 FULL CASES 14 of 128
extrinsic fraud and the existence of jurisdiction on the part of the trial
court. Bulawan adds that the Court of Appeals erred because it annulled
a decision which had already been considered and affirmed by another
division of the Court of Appeals. According to Bulawan, the trial courts
26 November 1996 Decision is already final and had been fully
executed.
In a petition for annulment of judgment, the judgment may be annulled
on the grounds of extrinsic fraud and lack of jurisdiction. 26 Fraud is
extrinsic where it prevents a party from having a trial or from presenting
his entire case to the court, or where it operates upon matters pertaining
not to the judgment itself but to the manner in which it is procured. 27 The
overriding consideration when extrinsic fraud is alleged is that the
fraudulent scheme of the prevailing litigant prevented a party from
having his day in court.28 On the other hand, lack of jurisdiction refers to
either lack of jurisdiction over the person of the defending party or over
the subject matter of the claim, and in either case the judgment or final
order and resolution are void.29 Where the questioned judgment is
annulled, either on the ground of extrinsic fraud or lack of jurisdiction,
the same shall be set aside and considered void.30
In his petition for annulment of judgment, Aquende alleged that there
was extrinsic fraud because he was prevented from protecting his title
when Bulawan and the trial court failed to implead him as a
party. Bulawan also maintained that the trial court did not acquire
jurisdiction over his person and, therefore, its 26 November 1996
Decision is not binding on him. In its 26 November 2007 Decision, the
Court of Appeals found merit in Aquendes petition and declared that the
trial court did not acquire jurisdiction over Aquende, who was adversely
affected by its 26 November 1996 Decision. We find no error in the
findings of the Court of Appeals.
Moreover, annulment of judgment is a remedy in law independent of the
case where the judgment sought to be annulled was
rendered.31 Consequently, an action for annulment of judgment may be
availed of even if the judgment to be annulled had already been fully
executed or implemented.32

Therefore, the Court of Appeals did not err when it took cognizance
of Aquendes petition for annulment of judgment and overturned the trial
courts 26 November 1996 Decision even if another division of the Court
of Appeals had already affirmed it and it had already been executed.
The Court also notes that when the Court of Appeals affirmed the trial
courts 26 November 1996 Decision, it had not been given the occasion
to rule on the issue of Aquende being an indispensable party and, if in
the affirmative, whether the trial court properly acquired jurisdiction over
his person. This question had not been raised before the trial court and
earlier proceedings before the Court of Appeals.
Aquende is a Proper Party to Sue
for the Annulment of the Judgment
Bulawan argues that Aquende was not an indispensable party in Civil
Case No. 9040 because the lot Aquende claims ownership of is different
from the subject matter of the case. Bulawan clarifies that she claims
ownership of Lot No. 1634-B of Psd-153847, while Aquende claims
ownership of Lot No. 1634-B of Psd-187165. Bulawan argues that even
if Aquende will be affected by the trial courts 26 November 1996
Decision, this will not make him an indispensable party.
Contrary to Bulawans argument, it appears that Aquendes Lot No.
1634-B of Psd-187165 and Bulawans Lot No. 1634-B of Psd-153847
actually refer to the same Lot No. 1634-B originally owned by Yap
Chin Cun. Both Aquende and Bulawan trace their ownership of the
property to Yap Chin Cun. Aquende maintains that he purchased the
property from Yap Chin Cun, while Bulawan claims to have purchased
the property from the Yaptengco brothers, who alleged that they
CIVPRO Rule 46-57 FULL CASES 15 of 128
inherited the property from Yap Chin Cun. However, as the Court of
Appeals declared, the title of the Yaptengco brothers over Lot No. 1634-
B of Psd-153847 had already been cancelled and they were forever
enjoined not to disturb the right of ownership and possession of Yap
Chin Cun.
Section 7, Rule 3 of the Rules of Court defines indispensable parties as
parties in interest without whom no final determination can be had of an
action. An indispensable party is one whose interest will be affected by
the courts action in the litigation.33 As such, they must be joined either
as plaintiffs or as defendants. In Arcelona v. Court of Appeals,34 we
said:
The general rule with reference to the making of parties in a civil action
requires, of course, the joinder of all necessary parties where possible,
and the joinder of all indispensable parties under any and all conditions,
their presence being a sine qua non for the exercise of judicial power. It
is precisely when an indispensable party is not before the court (that)
the action should be dismissed. The absence of an indispensable party
renders all subsequent actions of the court null and void for want of
authority to act, not only as to the absent parties but even as to those
present.35
During the proceedings before the trial court, the answers of Yap 36 and
the Register of Deeds37 should have prompted the trial court to inquire
further whether there were other indispensable parties who were
not impleaded. The trial court should have taken the initiative
to implead Aquende as defendant or to order Bulawan to do so as
mandated under Section 11, Rule 3 of the Rules of Court.38 The burden
to implead or to order the impleading of indispensable parties is placed
on Bulawan and on the trial court, respectively.39
 CIVPRO Rule 46-57 FULL CASES 16 of 128

However, even if Aquende were not an indispensable party, he could
still file a petition for annulment of judgment. We have consistently held
that a person need not be a party to the judgment sought to be
annulled.40 What is essential is that he can prove his allegation that the
judgment was obtained by the use of fraud and collusion and that he
would be adversely affected thereby.41
tantamount to a violation of the constitutional guarantee that no
person shall be deprived of property without due process of
law. Clearly, the trial courts judgment is void insofar as paragraph 3 of
its dispositive portion is concerned.44 (Emphasis supplied)

We agree with the Court of Appeals that Bulawan obtained a favorable
judgment from the trial court by the use of
fraud. Bulawan prevented Aquende from presenting his case before the
trial court and from protecting his title over his property. We also agree
with the Court of Appeals that the 26 November 1996 Decision
adversely affected Aquende as he was deprived of his property without
due process.
Likewise, Aquende was never made a party in Civil Case No. 9040. Yet,
the trial court ordered the cancellation of Psd-187165 and any other
certificate of title issued pursuant to Psd-187165,
including Aquendes TCT No. 40067. Aquende was adversely affected
by such judgment as his title was cancelled without giving him the
opportunity to present his evidence to prove his ownership of the
property.

WHEREFORE, we DENY the petition. We AFFIRM the 26 November

2007 Decision and 7 May 2008 Resolution of the Court of Appeals in
Moreover, a person who was not impleaded in the complaint cannot be CA-G.R. SP No. 91763.
bound by the decision rendered therein, for no man shall be affected by
a proceeding in which he is a stranger.42In National Housing Authority v.
Evangelista,43 we said:
SO ORDERED.

In this case, it is undisputed that respondent was never made a party to

Civil Case No. Q-91-10071. It is basic that no man shall be affected by
any proceeding to which he is a stranger, and strangers to a case are
not bound by judgment rendered by the court. Yet, the assailed
paragraph 3 of the trial courts decision decreed that (A)ny transfers,
assignment, sale or mortgage of whatever nature of the parcel of land
subject of this case made by defendant Luisito Sarte or his/her agents
or assigns before or during the pendency of the instant case are hereby
declared null and void, together with any transfer certificates of title
issued in connection with the aforesaid transactions by the Register of
Deeds of Quezon City who is likewise ordered to cancel or cause the
cancellation of such TCTs. Respondent is adversely affected by such
judgment, as he was the subsequent purchaser of the subject property
from Sarte, and title was already transferred to him. It will be the
height of inequity to allow respondents title to be nullified without
being given the opportunity to present any evidence in support of
his ostensible ownership of the property. Much more, it is
 CIVPRO Rule 46-57 FULL CASES 17 of 128

(2) Lopez vs Esquivel

On the other hand, Noel Rubber and Development Corporation (Nordec

DECISION Phil.) and Dr. Potenciano Malvar (Dr. Malvar), the petitioners in G.R. No.

170621, pray for the setting aside of the Resolutions dated 6 October

2005[7] and 16 November 2005[8] of the Court of Appeals in CA-G.R. SP

CHICO-NAZARIO, J.:
No. 91428. The Court of Appeals, in its questioned Resolution dated 6

October 2005, dismissed for prematurity the Petition for Annulment of

Before this Court are two consolidated[1] Petitions for Review
Judgment filed by Nordec Phil. and Dr. Malvar under Rule 47 of the 1997
on Certiorari under Rule 45 of the 1997 Revised Rules of Civil Procedure.
Revised Rules of Civil Procedure, assailing the RTC Decision dated 11

January 2001 in Civil Case No. 96-4193, as they were not impleaded in
The petitioners in G.R. No. 168734, namely, Marcelino, Felisa, Leonardo
said case, neither as indispensable nor necessary parties. The appellate
and Zoilo, all surnamed Lopez (Lopez siblings), seek to reverse and set
court, in its other questioned Resolution dated 16 November 2005,
aside the Decision[2]dated 14 February 2005 and Resolution[3] dated 27
denied the Motion for Amendment and/or Reconsideration of Nordec Phil.
June 2005 of the Court of Appeals in CA-G.R. CV No. 70200. In its
and Dr. Malvar.
assailed Decision, the appellate court affirmed in toto the

Decision[4] dated 11 January 2001 of the Regional Trial Court (RTC)

The antecedent facts of both Petitions are recounted as follows:
of Antipolo City, Branch 73, in Civil Case No. 96-4193, which (1) ordered

the Lopez siblings to vacate and to convey to Jose Esquivel, Jr. (Esquivel)
G.R. No. 168734
and Carlito Talens (Talens) a parcel of land, measuring 2.6950 hectares,
Hermogenes Lopez (Hermogenes) was the father of the Lopez
situated in Barrio dela Paz, Antipolo, Rizal[5] (subject property); and (2)
siblings. During Hermogenes lifetime, he applied with the Bureau of
directed the Register of Deeds of Marikina, Metropolitan Manila,[6] to
Lands for a homestead patent over a parcel of land, with an area of
divest the Lopez siblings of their title over the subject property and to
19.4888 hectares, located in Barrio dela Paz, Antipolo,
issue title over the same property in the names of Esquivel and Talens. In
Rizal. Hermogenes application was docketed as Homestead Patent No.
its assailed Resolution, the appellate court denied for lack of merit the
138612. After ascertaining that the land was free from claim of any private
Motion for Reconsideration of the Lopez siblings.
person, the Bureau of Lands approved Hermogenes application. In 1939,
Hermogenes submitted his final proof of compliance with the residency

and cultivation requirements of the Public Land Act. As a matter of

 CIVPRO Rule 46-57 FULL CASES 18 of 128

course, the aforesaid parcel of land was surveyed by a government
surveyor and the resulting plan H-138612 was approved by the Director
of Lands on 7 February 1939. The Director of Lands, thereafter, ordered
the issuance of the homestead patent in Hermogenes name. The patent
was subsequently transmitted to the Register of Deeds of Rizal for
entire 19.4888-hectare land. It was docketed as Civil Case No. 463-A.In
a Decision[17] dated 5 February 1985, the RTC declared the aforesaid
Deed of Absolute Sale null and void ab initio as it was made in violation
of Section 118 of Commonwealth Act No. 141, otherwise known as the
Public Land Act, as amended. The said RTC Decision was affirmed in
toto by the Court of Appeals in its Decision[18]dated 18 August

transcription and issuance of the corresponding certificate of title [9] in 1987 in CA-G.R. CV No. 06242. In a Resolution[19] dated 13 April 1988,
this Court denied Aguilars appeal, docketed as G.R. No. 81092, for being
Hermogenes name.[10]
filed late.

Unaware that he had already been awarded a homestead patent over the
On 4 March 1993, on the basis of the Deed of Absolute Sale of
19.4888-hectare land, Hermogenes sold[11] the same to Ambrocio Aguilar
Unregistered Land dated 26 August 1968 executed by Hizon in their
(Aguilar) by virtue of a Deed of Absolute Sale[12] dated 31 July 1959.
favor, Esquivel and Talens filed an Application for Registration of the

subject property with the RTC of Antipolo, Rizal, Branch 73. It was
Years later, it was allegedly discovered that the subject property, with an
docketed as LRC Case No. 93-1211. The Lopez siblings filed an
area of 2.6950 hectares, was erroneously included in survey plan H-
opposition to the application in LRC Case No. 93-1211, asserting, among
138612 of Hermogenes property. The subject property supposedly
other grounds, that: (1) they did not know the persons and personal
formed part of the land owned by Lauro Hizon (Hizon), which adjoined
circumstances of Esquivel and Talens who were not the formers adjoining
that of Hermogenes. Resultantly, on 29 November 1965, Hermogenes
property owners; (2) the subject property, which Esquivel and Talens
executed a Quitclaim[13] over his rights and interests to the subject
sought to have registered, was already titled under the Torrens system
property[14] in Hizons favor. Hizon, in turn, sold the subject property to
and covered by Transfer Certificates of Title (TCT) No. 207990 to No.
Esquivel and Talens, as evidenced by a Deed of Absolute Sale of
207997[20] in the names of the Lopez siblings; and (3) Tax Declaration
Unregistered Land[15] dated 26 August 1968.
No. 04-10304 of Esquivel and Talens covering the subject property was

spurious. The Lopez siblings also moved for the dismissal of LRC Case
Hermogenes died[16] on 20 August 1982. The Lopez siblings, as
No. 93-1211 invoking the final and executory Decision[21]dated 5
Hermogenes heirs, filed an action with the RTC of Antipolo, Rizal, Branch
71, for the cancellation of the Deed of Absolute Sale dated 31 July 1959, February 1985 of the RTC of Antipolo, Rizal, Branch 71, in Civil Case No.
executed between Hermogenes and Aguilar, and which involved the
 CIVPRO Rule 46-57 FULL CASES 19 of 128

463-A, which affirmed Hermogenes title to the 19.4888-hectare land, that In their Complaint, Esquivel and Talens alleged that when the Lopez

included the subject property. siblings had the land they inherited from Hermogenes registered, they

included the subject property, which Hermogenes already conveyed to

The RTC rendered its Decision[22] on 4 April 1995 in LRC Case No. No. Hizon in the Quitclaim dated 29 November 1965. Hence, the subject

93-1211, granting the Application for Registration of the subject property property was erroneously included in TCTs No. 207990 to No. 207997,

filed by Esquivel and Talens.Accordingly, the Lopez siblings filed a Motion issued by the Register of Deeds of Marikina, Metro Manila, in the names

for Reconsideration of the said RTC judgment. Acting on the Motion of of the Lopez siblings. The subject property is presently occupied and in

the Lopez siblings, the RTC issued an Order[23] dated 23 May 1996 in the physical possession of the Lopez siblings.[25]
which it corrected several errors in its earlier decision, i.e., a

typographical error on the area of the subject property, and a mistake in In their Answer with Compulsory Counterclaim, the Lopez siblings denied

the conversion of the area of the subject property from square meters to all the allegations of Esquivel and Talens. As their special defenses, the

hectares. The RTC also stated in the same Order that it could not direct Lopez siblings called attention to the non-compliance by Esquivel and

the amendment of the TCTs in the names of the Lopez siblings, to Talens with Section 5, Rule 7 of the 1997 Revised Rules of Civil

exclude therefrom the subject property which was adjudged to Esquivel Procedure, on non-forum shopping, considering that there was another

and Talens, as the RTC was sitting only as a land registration court. The case before the RTC of Antipolo, Rizal, Branch 71, [26] also involving the

RTC, thus, advised Esquivel and Talens to file an action for reconveyance subject property and the issues on the genuineness and validity of the

of the subject property and only when Esquivel and Tales succeed in such Deed of Absolute Sale of Unregistered Land dated 26 August 1968,

action can they subsequently cause the registration of the subject executed by Hizon in favor of Esquivel and Talens. The Lopez siblings

property in their names. further averred that the cause of action of Esquivel and Talens was

already barred by the statute of limitations and laches since they failed to

Following the advice of the RTC, Esquivel and Talens filed with the RTC assert their alleged rights to the subject property for 25 years.[27] The

of Antipolo, Rizal, Branch 73, on 2 October 1996, a Complaint[24] for Lopez siblings additionally interposed that the Quitclaim involving the

Reconveyance and Recovery of Possession of the subject property subject property, invoked by Esquivel and Talens, was ineffective,
against the Lopez siblings. The case was docketed as Civil Case No. 96- because by the time it was executed by Hermogenes in favor of Hizon
4193. on 29 November 1965, Hermogenes had already sold his entire 19.4888-

hectare land, of which the subject property was part, to Aguilar on 31 July

1959. The Lopez siblings finally argued that the said Quitclaim was a
nullity as it contravened Section 17[28] of the Public Land Act, as
amended.[29]
On 11 January 2001, the RTC rendered a Decision in Civil Case 96-4193,
granting the prayer of Esquivel and Talens for the reconveyance and
recovery of possession of the subject property. The RTC held that the
Deed of Absolute Sale dated 31 July 1959 between Hermogenes and
Aguilar was already declared null and void ab initio by a court of
competent jurisdiction. Therefore, the Lopez siblings were estopped from
asserting said Deed to defeat the rights of Esquivel and Talens to the
subject property. The RTC also ruled that Esquivel and Talens were not
guilty of laches because as early as 1986, they had declared the subject
property in their names for taxation purposes. Moreover, in 1993,
Esquivel and Talens filed before the RTC an application for registration
of the subject property, LRC Case No. 93-1222, where they obtained a
favorable judgment. The RTC lastly found that the action for
reconveyance of Esquivel and Talens was not yet barred by prescription
as it was instituted within the 30-year prescriptive period.
The Lopez siblings filed an appeal of the aforementioned RTC Decision
to the Court of Appeals, docketed as CA-G.R. CV No. 70200.
In their Appellants Brief, the Lopez siblings assigned the following errors:
1. The trial court presided by Judge Mauricio M. Rivera erred
in failing to dismiss this case for reconveyance on the grounds
of: (a) prescription of action; and (b) laches;
CIVPRO Rule 46-57 FULL CASES 20 of 128
2. [Hermogenes] was no longer the owner of the property
when he executed the [quitclaim] dated [29 November 1965]
because of the previous sale to third party on [31 July 1959];
3. There was (sic) no prior records in the Bureau of Lands or
in the assessors office that [Hizon], the predecessor-in-interest
of the [Esquivel and Talens] is a landholder or a previous tax
declarant;
4. The court a quo thru the same judge indiscreetly based
primarily the appealed decision on its erroneous findings and
conclusions in LRC Case No. 93-1211 contrary to the findings
and conclusions of this Honorable Court among others in CA
G.R. CV No. 07745, entitled Ambrocio Aguilar v. Heirs of
Fernando Gorospe, et al. promulgated on 31 August 1989; in
CA G.R. CV No. 06242, entitled Marcelino Lopez, et al. v. Sps.
Ambrocio [Aguilar] and Pelagia Viray promulgated on 18 August
1987; and the findings and conclusions of the Supreme Court in
G.R. No. 90380 entitled Santos v. Court of Appeals promulgated
on 13 September 1990 among others.
5. Having already erred in favor of the [Esquivel and Talens],
the same presiding judge of the trial court erringly proceeded to
conduct hearing and to decide this case despite the
consolidation of Civil Case No. 95-3693 entitled Angelina Hizon,
et al. v. Carlito Talens, et al., involving the same subject property
and the efficacy and validity of the [quitclaim] solely relied upon
by the [Esquivel and Talens].[30]
On 14 February 2005, the Court of Appeals rendered its Decision
dismissing the appeal of the Lopez siblings and affirming in toto the RTC
Decision dated 11 January 2001. The appellate court ruled that the Lopez
siblings are barred by the doctrine of estoppel in pais from challenging
the Quitclaim executed by Hermogenes over the subject property in favor
of Hizon on 29 November 1965 on the ground that Hermogenes no longer
owned the subject property at that time. The Lopez siblings themselves,
as Hermogenes heirs, filed with the RTC Civil Case No. 463-A for the

cancellation of the Deed of Absolute Sale involving the 19.4888-hectare
land (which included the subject property), executed by Hermogenes in
favor of Aguilar on 31 July 1959. The Lopez siblings obtained a favorable
judgment in Civil Case No. 463-A as the RTC therein declared void ab
initio the aforesaid Deed of Absolute Sale. Hence, the Lopez siblings are
now estopped from asserting the validity of the same Deed of Absolute
Sale so as to void or nullify the Quitclaim executed by Hermogenes in
favor of Aguilar, on which Esquivel and Talens based their claim to the
subject property. Any deviation by the Lopez siblings from their previous
position would definitely cause injury and prejudice to Esquivel and
Talens, who acted relying on the knowledge that the previous sale
between Hermogenes and Aguilar of the land, which included the subject
property, was already adjudged void ab initio. The Lopez siblings,
moreover, were only subrogated to whatever rights and interests their
father Hermogenes still had over the subject property upon the latters
death in 1982. They were, thus, bound by the Quitclaim Hermogenes
executed in 1965 involving the subject property.[31]
The Motion for Reconsideration of the aforesaid Decision filed by the
Lopez siblings was denied by the Court of Appeals in a Resolution
dated 27 June 2005.
The Lopez siblings are presently before this Court seeking the resolution
of the following issues:
I. Whether or not the [Court of Appeals] erred in
applying the rule of estoppel in disregard of the law of the case
CIVPRO Rule 46-57 FULL CASES 21 of 128
doctrine (a) in the Decision promulgated on [13 September
1990] in G.R. No. 90380 entitled Eduardo Santos v. The
Honorable Court of Appeals; (b) in the Decision [E]n
[B]anc promulgated on [24 September 2002] in G.R. No.
123780, entitled In Re: Petition Seeking for Clarification as to
the Validity and Forceful Effect of Two (2) Final and Executory
but conflicting Decisions of [this Court] Col. Pedro Cabuay, Jr.
v. Marcelino Lopez, et al; and (c) in the Decision promulgated
on [5 March 2003] in G.R. No. 127827 entitled Eleuterio Lopez,
et al. v. The Hon. Court of Appeals, Spouses Marcelino Lopez
and Cristina Lopez, et al.;
II. Whether or not the [appellate court] was correct in
applying the rule of estoppel in pais in disregard of the
peremptory and [personal-to-the-applicants-homestead]
provisions of the Public Land Law or Commonwealth Act 141,
as amended;
III. Are the [Esquivel and Talens] and their predecessor-
in-interest barred by the statute of limitations?
IV. Are the [Esquivel and Talens] and their predecessor-
in-interest guilty of laches?
V. The quitclaim relied upon by [Esquivel and Talens]
is intrinsically void and has violated the provisions of the Public
Land Law.[32]
The Lopez siblings aver that a deeper analysis of the assailed Decision
of the Court of Appeals will reveal the latters utter disregard for or
deviation from the law of the case set by this Court in its Decisions
in Santos v. Court of Appeals,[33] Group Commander, Intelligence &
Security Group, Philippine Army v. Dr. Malvar,[34] and Lopez v. Court of
Appeals,[35] where the issue on the validity of the homestead patent
granted to Hermogenes, father of the Lopez siblings, was already passed
upon. In these three Decisions, the Court already declared the
homestead patent awarded to Hermogenes valid. Therefore, the Court of
 CIVPRO Rule 46-57 FULL CASES 22 of 128

Appeals erred in applying the rule on estoppel in disregard of the doctrine reconveyance of the subject property. Section 38 of the Land Registration

of law of the case. Act may only be availed of by an aggrieved owner whose property was

fraudulently included in a decree of registration. A decree of registration

The Lopez siblings further argue that the assailed Decision of the Court under the Land Registration Act merely confirms, but does not confer,

of Appeals runs counter to the personal-to-the-homestead-applicant ownership over private land so as to bring it under the operation of

policy[36] provisions embodied in Sections 12, 13, and 17 of the Public the Torrens system. The remedies provided under Sections 101 and 102
Land Act, as amended, that this Court upheld in Santos, Cabuay, of the Public Land Act, on one hand, and Section 38 of the Land
and Lopez. The Court precisely disregarded the rule on estoppel in Registration Act, on the other, are exclusive of each other, considering
pais or the principle of trust in said three cases as it had no room for the basic distinction in the subject matters thereof, i.e., the award or grant

application under the tenor or context of the mandatory personal-to-the- of public land in the former, and the registration of private land in the latter.

homestead-applicant policy provisions of the Public Land Act, as

amended. It was, thus, erroneous for the appellate court to apply The Lopez siblings also maintain that Hizon, predecessor-in-interest of
estoppel in pais in ruling against the Lopez siblings in its assailed Esquivel and Talens, who claimed ownership over the subject property,

judgment. was duty bound to exercise the diligence of a good father of the family by

opposing or taking exception to Hermogenes homestead application,

The Lopez siblings additionally avow that in the proceedings conducted which included said property. Even after the homestead patent over the

on Hermogenes homestead application by the Bureau of Lands, it was subject property was already awarded to Hermogenes, Hizon still had

verified that the land applied for, which included the subject property, was opportunity to protest the same before the Bureau of Lands, prior to the

disposable public land. If it was true that the subject property was only registration of said homestead patent with the Register of Deeds. For

erroneously included in the homestead patent awarded to Hermogenes, failing to take appropriate actions, Hizon, and his successors-in-interest,

then such an award could only be challenged by the government in an Esquivel and Talens, are now barred from doing so by the statute of

action for reversion under Section 101 of the Public Land Act, as limitations and laches.

amended; or objected to by a private person under Section 102 of the

same statute. Resultantly, Esquivel and Talens could not have availed Finally, the Lopez siblings assert that the reliance by the Court of Appeals
themselves of the recourse prescribed by Section 38 [37] of Act No. 496, on the legal efficacy of the Quitclaim involving the subject property

otherwise known as the Land Registration Act, in their action for executed by Hermogenes in favor of Hizon is misplaced. The reason for
 CIVPRO Rule 46-57 FULL CASES 23 of 128

the renunciation, waiver, or repudiation by Hermogenes of his rights to considered and decided by it, were to be litigated anew in the same case

the subject property in Hizons favor, as stated in the said Quitclaim, is not and upon any and subsequent appeal.[39]

a recognized cause or consideration for conveyance of a parcel of land

subject of a homestead patent under the prohibitive and mandatory Given the foregoing, it is apparent that the Decisions of this Court

provisions of the Public Land Act, as amended. Moreover, whatever in Santos, Cabuay, and Lopez, cited by the Lopez siblings in their instant

efficacy the Quitclaim had was already barred by the ruling of this Petition, cannot be regarded as the law of the case herein. The law of the
Court en banc in Cabuay and Lopez. case applies only when (1) a question is passed upon by an appellate

court, and (2) the appellate court remands the case to the lower court for

The instant Petition is meritorious. further proceedings; the lower court and even the appellate courts on

subsequent appeal of the case are, thus, bound by how such question

Since the issues in this case are interrelated, the Court shall discuss them had been previously settled. It must be emphasized, therefore, that

concurrently. the law of the case finds application only in the same case between the

same parties.

Law of the case has been defined as the opinion delivered on a

former appeal. It is a term applied to an established rule that when an The Petition at bar is without question separate and distinct

appellate court passes on a question and remands the case to the lower from Santos, Cabuay, and Lopez, although they may all involve, in

court for further proceedings, the question there settled becomes the law varying degrees, the homestead patent granted to Hermogenes over the
of the case upon subsequent appeal. It means that whatever is once 19.8222-hectare land, which included the subject
irrevocably established as the controlling legal rule or decision property. First, Santos, Cabuay, and Lopez, directly tackled the validity of
between the same parties in the same case continues to be the law the homestead patent granted to Hermogenes over the 19.8222-hectare
of the case, whether correct on general principles or not, so long as the land; while, in the instant case, the validity of the homestead patent thus

facts on which such decision was predicated continue to be the facts of granted to Hermogenes is no longer in issue, but it is alleged herein that

the case before the court.[38] Thus, the court reviewing the succeeding said patent erroneously included the subject property. Second, to recall,

appeal will not re-litigate the case but instead apply the ruling in the the instant Petition originated from Civil Case No. 96-4193, the Complaint
previous appeal. This enables the appellate court to perform its duties for Reconveyance and Recovery of the subject property filed by Esquivel

satisfactorily and efficiently which would be impossible if a question, once and Talens against the Lopez siblings before the RTC of Antipolo, Rizal,

Branch 73. In no instance was a question or issue in Civil Case No. 96-
4193 ever been previously raised to an appellate court. Santos, Cabuay,
and Lopez, did not pass upon any question or issue raised before this
Court from Civil Case No. 96-4193. And thirdly, despite the fact that all
these cases may have common antecedent facts and sometimes
involved the same personalities, the Lopez siblings (herein petitioners)
and Esquivel and Talens (herein respondents) were not parties
in Santos, Cabuay, and Lopez.
The Court now proceeds to resolve the issue of whether Esquivel and
Talens have a right to the reconveyance of the subject property based on
the Quitclaim executed by Hermogenes in Hizons favor on 29 November
1965. Such determination shall be dependent on whether the Quitclaim
was executed beyond the period within which encumbrance or alienation
of the land acquired by homestead patent is prohibited; and whether the
Quitclaim effected a valid conveyance of the subject property from
Hermogenes to Hizon.
Section 118 of the Public Land Act, as amended, prohibits any
encumbrance or alienation of lands acquired under homestead provisions
from the date of the approval of application and for a term of five years
from and after the date of issuance of the patent or grant. The same
provision provides that no alienation, transfer, or conveyance of any
homestead after five years and before 25 years after issuance of title shall
be valid without the approval of the Secretary of Agriculture and Natural
Resources, which approval shall not be denied except on constitutional
and legal grounds.
CIVPRO Rule 46-57 FULL CASES 24 of 128
In this case, the subject property was included, whether correctly or
erroneously, in the 19.4888-hectare land awarded to Hermogenes, by
virtue of a homestead patent, issued on 7 February 1939. The Quitclaim
over the subject property, a 2.6950-hectare portion of the said 19.4888-
hectare land, was executed by Hermogenes in Hizons favor on 29
November 1965. Between the date of issuance of the homestead patent
to Hermogenes and that of the execution of the Quitclaim, more than 26
years had passed. Therefore, the execution of the Quitclaim was no
longer within the five-year period within which the land covered by the
homestead patent issued to Hermogenes must not be encumbered or
alienated; and was also beyond the period between five and 25 years
following the issuance of patent within which approval of the Secretary of
Environment and Natural Resources is still necessary to make the
alienation or encumbrance valid.[40]
Although it has been established that the Quitclaim was executed beyond
any of the prohibitive and/or restrictive periods under the Public Land Act,
as amended, the Court must next look into whether the Quitclaim had the
effect of validly conveying the subject property to Hizon.
The pertinent portions of the Quitclaim in question read as follows:
2. That it has come to my personal knowledge that a boundary
owner of my above-cited parcel of land by the name of [Hizon]
has duly caused the survey of his land bordering mine x x x; that
after the actual execution of the survey of the land of said
[Hizon], it was found out that the land which has been in his
 CIVPRO Rule 46-57 FULL CASES 25 of 128

possession for many many years or since time immemorial is

within my plan denominated as H-138612;
Even assuming that the homestead patent awarding the 19.4888-hectare
xxxx
land to Hermogenes did erroneously include the subject property,
5. That in fairness and in justice to [Hizon], I herewith renounce,
repudiate and unconditionally and irrevocably waive and Hermogenes could not simply convey said property to Hizon, nor could
quitclaim all my rights, shares, interests or participations on the
above-described parcel of land in favor of [Hizon], of legal age, Hizon easily recover the same, by virtue of a mere Quitclaim. Lands
Filipino, married to Angelina Villarosa and a resident of Antipolo,
acquired under homestead patents come from the public domain. If the
Rizal, and for this purpose I am agreeable that my plan H-
138612 be duly amended so as to segregate the above- subject property was erroneously included in the homestead patent
described portion which is owned by the aforesaid [Hizon]. [41]
awarded to Hermogenes, then the subject property must be returned to

the State and not to Hizon.Furthermore, the survey plan conducted and
It can be gleaned from the afore-quoted paragraphs of the Quitclaim that
homestead patent issued in Hermogenes name covered a 19.4888-
the intention of Hermogenes in executing the same was to restore to
hectare land; to exclude therefrom the 2.6950-hectare subject property
Hizon the subject property, which Hermogenes believed to have been
(since it purportedly belonged to Hizon) would mean that Hermogenes
mistakenly included in his homestead patent.
actually acquired land with an area less that what he was awarded under

the homestead patent.This complication reveals that any alleged mistake

It is worthy to note, however, that the subject property was part of the
as regards the subject property is not a simple and private matter
19.4888-hectare land covered by the homestead patent awarded by the
between Hermogenes and Hizon; but is primarily a problem between
Bureau of Lands to Hermogenes. The 19.4888-hectare land was
Hermogenes and the State, the latter having awarded the 19.4888-
identified and measured in a survey conducted by a government surveyor
hectare land to the former by virtue of the homestead patent.
and the resulting plan H-138612 was approved by the Director of

Lands. The approval of survey plan H-138612 and the grant of the
A homestead patent is one of the modes to acquire title to public lands
homestead patent over the 19.4888-hectare land in favor of Hermogenes,
suitable for agricultural purposes. Under the Public Land Act, as
performed as part of the official functions of the Director of Lands and the
amended, a homestead patent is one issued to any citizen of this country,
Bureau of Lands, enjoy the presumption of regularity.[42] Reasonable
over the age of 18 years or the head of a family, and who is not the owner
doubt is thus cast on the supposed mistake which resulted in the inclusion
of more than 24 hectares of land in the country. To be qualified, the
of the subject property in the 19.4888-hectare land awarded to
applicant must show that he has resided continuously for at least one
Hermogenes by virtue of the homestead patent.
 CIVPRO Rule 46-57 FULL CASES 26 of 128

year in the municipality where the land is situated and must have In the end, the Quitclaim dated 29 November 1965 could not have validly

cultivated at least one-fifth of the land applied for.[43] conveyed or transferred ownership of the subject property from

Hermogenes to Hizon. It is null and void for being contrary to the

In this case, the Bureau of Lands approved Hermogenes application for provisions of the Public Land Act, as amended. As a result, Hizon

homestead patent over the 19.4888-hectare land after finding him acquired no right over the subject property which he could have sold to

qualified for the same. In contrast, the only evidence supporting Hizons Esquivel and Talens; and the Deed of Absolute Sale of Unregistered Land

claim to the subject property was the Quitclaim. There is no other proof dated 26 August 1968 executed by Hizon in favor of Esquivel and Talens,

that Hizon possessed, cultivated, and introduced improvements on the is similarly void for lack of an object.

subject property. Neither is there any showing that after the execution of

the Quitclaim, Hizon himself applied for a homestead patent over the Even granting arguendo, that the Quitclaim is valid and transferred

subject property. In fact, it is undisputed that the subject property has ownership of the subject property from Hermogenes to Hizon, the latter

always been in the possession of Hermogenes, then the Lopez and his successors-in-interest, Esquivel and Talens, are now barred by

Siblings. Hizon and Esquivel and Talens never came into the possession the statute of limitations and laches from asserting their rights to the

of the subject property even after the execution of the supposed deeds of subject property, after failing to exercise the same for an unreasonable

conveyances in their favor. length of time.

The Court also cannot consider the subject property to have been held in Laches has been defined as the failure of or neglect for an unreasonable

trust by Hermogenes for and on behalf of Hizon. Settled is the rule that a and unexplained length of time to do that which by exercising due

homestead applicant must personally comply with the legal requirements diligence, could or should have been done earlier, or to assert a right

for a homestead grant. The homestead applicant himself must possess within reasonable time, warranting a presumption that the party entitled

the necessary qualifications, cultivate the land, and reside thereon. It thereto has either abandoned it or declined to assert it. Thus, the doctrine

would be a circumvention of the law if an individual were permitted to of laches presumes that the party guilty of negligence had the opportunity

apply in behalf of another, as the latter may be disqualified or might not to do what should have been done, but failed to do so. [45]

comply with the residency and cultivation requirements.[44] In the instant case, when Esquivel and Talens filed with the RTC their
application for registration of the subject property on 5 March 1993, 28

years had passed since the execution by Hermogenes of the Quitclaim

 CIVPRO Rule 46-57 FULL CASES 27 of 128

covering the subject property in favor of Hizon on 29 November 1965; owned the subject property and could never have sold the same to
and 25 years elapsed from the execution by Hizon of the Deed of Esquivel and Talens.

Absolute Sale of the subject property in favor of Esquivel and Talens on

26 August 1968. During these periods, without providing any reasons

therefor, neither Hizon nor Esquivel and Talens took possession of the G.R. No. 170621

subject property or exercised in any other way their rights over the same.

Finally, concerning this Petition, is the issue of whether the Lopez siblings A Petition for Annulment of Judgment was filed with the Court of Appeals

are estopped from questioning the validity of the Quitclaim, as ruled by by Nordec Phil., a corporation organized and existing under the laws of

the Court of Appeals? It bears to point out that the question of estoppel the Philippines; and Dr. Malvar, President and General Manager of

is relevant only if the Lopez siblings are challenging the validity of the petitioner Nordec Phil., docketed as CA G.R. CV No. 91428.

Quitclaim on the ground that when Hermogenes executed the same, he

had already previously sold his 19.4888-hectare land, which included the The Lopez siblings, Esquivel, and Talens, were named respondents in

subject property, to Aguilar. In recollection, the Lopez siblings CA-G.R. CV No. 91428 (and also herein), being the parties in Civil Case

successfully had the said sale of the land by Hermogenes to Aguilar No. 96-4193, wherein the RTC of Antipolo, Rizal, Branch 73, rendered

nullified. Since the Court herein refuses to give effect to the Quitclaim in the Decision dated 11 January 2001, which Nordec Phil. and Dr. Malvar

question on other grounds already discussed above, the issue of estoppel was seeking to have annulled by the Court of Appeals. Atty. Sergio

actually loses relevance and need not be resolved anymore. Angeles (Atty. Angeles) and Atty. George A. Ang Cheng (Atty. Ang

Cheng) were similarly impleaded as respondents in said petition before

Considering the pronouncements of this Court that the Quitclaim covering the appellate court on account of their involvement as counsels for the

the subject property executed by Hermogenes in favor of Hizon is null parties in Civil Case No. 96-4193.

and void for being contrary to the provisions of the Public Land Act, as

amended, on homestead grants; and that the Deed of Absolute Sale of In its Decision dated 11 January 2001 in Civil Case No. 96-4193, the RTC

the subject property executed by Hizon in favor of Esquivel and Talens is granted the action for reconveyance of the subject property to Esquivel

null and void for lack of a proper object, then Esquivel and Talens have and Talens. The subject property, however, was already supposedly sold
no basis to ask for the reconveyance of the subject property. Hizon never by Lopez siblings to Nordec Phil. and Dr. Malvar.
 CIVPRO Rule 46-57 FULL CASES 28 of 128

Nordec Phil. and Dr. Malvar alleged in their Petition for Annulment of involving the subject property, it was also Atty. Angeles who appeared for

Judgment that the Lopez siblings, the successors-in-interest of Nordec Phils. and Dr. Malvar.

Hermogenes, were the registered owners of 15 parcels of land situated

at Overlooking, Sumulong Highway, Barangay Sta. Cruz, (formerly Barrio Sometime after 2 August 2004, Atty. Angeles again informed Nordec Phil.

dela Paz), Antipolo City, Rizal, covered by plan (LRC) Psd-3289610, with and Dr. Malvar that there was another case filed against the Lopez

a total area of 19.4888 hectares.[46] Among these parcels of land were siblings involving the subject property. The said case was the action for

Lots 1, 2, 3, 4, 7 and 8, covered by TCTs No. 207990 to No. 207997 [47] of reconveyance filed by Esquivel and Talens, docketed as Civil Case No.

the Registry of Deeds of Marikina City, with an aggregate area of 2.875 96-4193 before RTC of Antipolo, Rizal, Branch 73, but which was already,

hectares, and which constituted the subject property.[48] by then, the subject of an appeal before the Court of Appeals, docketed
as CA-G.R. CV No. 70200 (and which would eventually reach this Court

Beginning 20 April 1994, Nordec Phils. and Dr. Malvar purchased the in G.R. No. 168734). Atty. Angeles, however, belittled this most recent

afore-mentioned lots from the Lopez siblings and their assigns, namely, case involving the subject property, and even showed to Nordec Phils.

Atty. Angeles and Rogelio Amurao (Amurao),[49] as evidenced by several and Dr. Malvar the Motion to Resolve Appeal dated 2 August 2004, which

Deeds of Absolute Sale and Deeds of Conditional Sale. Immediately after he filed in CA-G.R. CV No. 70200, together with the Brief for the Lopez

making such purchases, Nordec Phils. and Dr. Malvar introduced large siblings. Yet, Nordec Phils. and Dr. Malvar conducted their own inquiry,

scale improvements on the subject property, among which were several and were surprised to discover that the Decision rendered by the RTC

business establishments[50] with a cost of no less than P50,000,000. on 11 January 2001 in Civil Case No. 96-4193 was actually adverse to

their rights and interest; and despite this, they were neither impleaded nor

In 1996, when the subject property was involved in Civil Case No. 96- represented therein. Even Atty. Angeles, the supposed counsel for
4130 heard before the RTC of Antipolo, Rizal, Branch 74, entitled Heirs Nordec Phils. and Dr. Malvar, did not lift a finger to protect their rights in
of Elino Adia v. Heirs of Hermogenes Lopez, it was Atty. Angeles who said case.

represented and protected the interest of Nordec Phils. and Dr. Malvar in
said case by filing a Motion to Dismiss.[51] In Cabuay, Jr., wherein Dr. Further intensive investigation revealed to Nordec Phils. and Dr. Malvar

Malvar and the Lopez siblings were named the respondents in the that the 11 January 2001 Decision of the RTC in Civil Case No. 96-4193
Petition Seeking for Clarification as to the Validity and Forceful Effect of was rendered under circumstances amounting to extrinsic fraud and lack

the Two (2) Final and Executory but Conflicting Decisions of this Court or denial of due process, insofar as said Decision adversely affected their
 CIVPRO Rule 46-57 FULL CASES 29 of 128

rights and interests to the subject property. Among the circumstances have been or may thereafter be issued to enforce the said RTC decision,

which allegedly amounted to extrinsic fraud and lack or denial of due be declared ineffective, insofar as they and their assigns are concerned.

process, were described by Nordec Phils. and Dr. Malvar as follows: (1)

when Esquivel and Talens instituted Civil Case No. 96-4193, they On 6 October 2005, the Court of Appeals issued its assailed Resolution

personally and through their caretakers, already knew that Nordec Phils. in CA-G.R. SP No. 91428 dismissing the Petition of Nordec Phil. and Dr.

and Malvar already bought and took possession of the subject property, Malvar. According to the said Resolution, the RTC Decision dated 11

but Esquivel and Talens, through their counsel Atty. Ang Cheng January 2001 in Civil Case No. 96-4193 could not be the proper subject

deliberately failed to implead Nordec Phils. and Dr. Malvar; and (2) Atty. of the said Petition for Annulment of Judgment given that the very same

Angeles, who was supposed to protect the rights and interests of Nordec decision was still pending appeal before this Court in G.R. No. 168734

Phils. and Dr. Malvar, as their counsel, had an adverse personal interest and, thus, was not yet final and executory. In addition, should the Court

in the subject property as he unconscionably taken, by way of of Appeals take cognizance of such a Petition, it could result in contrary

champertous attorneys fees, almost the whole of the 19.4888-hectare and inconsistent rulings by the appellate court and this Court.

land inherited by the Lopez siblings from Hermogenes.

Nordec Phils. and Dr. Malvar filed a Motion for Amendment and/or

Given the foregoing circumstances and the unsuccessful attempt of Reconsideration of the dismissal of their Petition in CA-G.R. SP No.

Nordec Phil. and Dr. Malvar to intervene in CA-G.R. No. 70200, Nordec 91428, but it was denied by the Court of Appeals in a Resolution dated 16

Phil. and Dr. Malvar opted to file with the Court of Appeals a Petition to November 2005.

annul the Decision dated 11 January 2001 of the RTC in Civil Case No. Nordec Phils. and Dr. Malvar then filed the instant Petition assailing the

96-4193, granting the reconveyance of the subject property to Esquivel Resolutions dated 6 October 2005 and 16 November 2005 of the Court

and Talens. Their Petition was docketed as CA-G.R. SP No. 91428. of Appeals in CA-G.R. SP No. 91428.

Nordec Phil. and Dr. Malvar prayed in their Petition that the 11 January

2001 Decision of the RTC in Civil Case No. 96-4193 be annulled for the In their Memorandum before this Court, Nordec Phils. and Dr. Malvar

reason that they were not impleaded therein even as they were raised the following issues:

necessary, if not indispensable, parties. Nordec Phil. and Dr. Malvar

I. Do [Nordec Phils. and Dr. Malvar] have good
additionally prayed that any writ of execution and other orders, which may standing and substantial defenses?
 CIVPRO Rule 46-57 FULL CASES 30 of 128

II. In view of all the documented and unrebutted

circumstances detailed in the petition not to mention the Nordec Phils. and Dr. Malvar to the subject property. The remedies of
obviously pre-conceived and even incompatible claims of
new trial, appeal, petition for relief or other appropriate remedies are also
private respondents [Lopez siblings] and [Atty. Angeles] in their
Comment that the sale to [Nordec Phils. and Dr. Malvar] is void no longer available to Nordec Phils. and Dr. Malvar because of the
and defective from the very start being signed by only one of the
co-owners, simulated and only partially paid and that petitioners extrinsic fraud committed upon them by the Lopez siblings, Esquivel,
rights have prescribed was there extrinsic fraud and lack of due
process insofar as [Nordec Phils. and Dr. Malvar] are Talens, Atty. Angeles, and Atty. Ang Cheng; and of the lack of jurisdiction
concerned?
on the part of the RTC to take cognizance of Civil Case No. 96-4193 and
III. Considering all the foregoing and, more significantly, to render the 11 January 2001 Decision therein. Even the Motion for
the admission of [Esquivel and Talens] in their separate
Comment that they (as plaintiffs) purposely did not implead Intervention of Nordec Phils. and Dr. Malvar in CA-G.R. No. 70200, the
[Nordec Phils. and Dr. Malvar] because it was from the [Lopez
siblings] alone that they are trying to recover the [subject appeal of the 11 January 2001 Decision of the RTC, was not allowed by
property], is annulment of the judgment proper, at least insofar the Court of Appeals. Therefore, it is neither improper nor premature for
as the rights and interests of [Nordec Phils. and Dr. Malvar] are
concerned? Nordec Phil. and Malvar to file a Petition for the annulment of the said 11

IV. Inasmuch as [Nordec Phils. and Dr. Malvar] were not January 2001 Decision of the RTC in Civil Case No. 96-4193, even
impleaded as defendants and were not parties to the appeal of
the judgment affecting [the subject property], hence, the though the said Decision, after being affirmed in toto by the Court of
remedies of new trial, appeal, petition for relief or other Appeals, is now pending appeal before this Court.
appropriate remedies are no longer available to them and so
even their motion for intervention was not allowed is it improper
or premature for them to file an action for annulment of the
judgment while further appeal by the impleaded [Esquivel and Nordec Phils. and Dr. Malvar additionally argue that the Court of Appeals
Talens] is pending with this [Court]?
resolved the question of procedure in a manner that was patently not in
V. In view of the undisputed accordance with the 1997 Rules of Civil Procedure, particularly, when it
circumstances showing extrinsic fraud and in view of the
consolidation of G.R. No. 170621 with G.R. No. 168734, it is now held that (1) Rule 47 does not cover the judgment of the RTC in this
proper or imperative for [this Court] to resolve the issues
presented by annulling the impugned judgment of the [RTC of particular case; and (2) Nordec Phils. and Dr. Malvar still had an adequate
Antipolo City, Branch 73] without having to remand the case to
remedy in seeking intervention in G.R. No. 167834, the appeal to this
the Court of Appeals.
Court of the RTC Decision dated 11 January 2001, as affirmed by the

Court of Appeals.
Nordec Phils. and Dr. Malvar asseverate that they were not impleaded as

defendants in Civil Case No. 96-4193 where the RTC rendered its
Nordec Phils. and Dr. Malvar insist that since Rules 37, 38 and 41 of the
Decision dated 11 January 2001, affecting the rights and interest of
1997 Rules of Civil Procedure on motion for new trial, petition for relief,
 CIVPRO Rule 46-57 FULL CASES 31 of 128

and appeal, respectively, simply mention judgments or final orders, was rendered. Nordec Phils. and Dr. Malvar also cannot seek the

without making any distinction as to whether or not the same is final and annulment of the 11 January 2001 Decision of the RTC in Civil Case No.

executory; it should follow that where only the words judgments or final 96-4193.

orders are similarly used in Rule 47 on annulment of judgments, then

such words should be understood to also refer to all judgments or final An action for annulment of judgment is a remedy in law independent of

orders, regardless of whether they are final and executory. the case where the judgment sought to be annulled was rendered. The

purpose of such action is to have the final and executory judgment set

The issues and arguments raised by Nordec Phils. and Dr. Malvar all boil aside so that there will be a renewal of litigation. It is resorted to in cases

down to the question of whether the Court of Appeals erred in dismissing where the ordinary remedies of new trial, appeal, petition for relief from

their Petition for Annulment of Judgment for being premature since the judgment, or other appropriate remedies are no longer available through

judgment sought to be annulled is still the subject of a Petition for Review no fault of the petitioner, and is based on only two grounds: extrinsic

before this Court, docketed as G.R. No. 168734, and is not yet final and fraud, and lack of jurisdiction or denial of due process. A person need not

executory. be a party to the judgment sought to be annulled, and it is only essential

that he can prove his allegation that the judgment was obtained by the

The Court answers in the negative. use of fraud and collusion and he would be adversely affected thereby. [53]

The ordinary remedies of a motion for new trial or reconsideration and a An action to annul a final judgment on the ground of fraud lies only if the

petition for relief from judgment are remedies available fraud is extrinsic or collateral in character. Fraud is regarded as extrinsic

only to parties in the proceedings where the assailed judgment is where it prevents a party from having a trial or from presenting his entire

rendered. In fact, it has been held that a person who was never a party case to the court, or where it operates upon matters pertaining not to the

to the case, or even summoned to appear therein, cannot make use of a judgment itself but to the manner in which it is procured. The overriding

petition for relief from judgment.[52] Indubitably, Nordec Phils. and Dr. consideration when extrinsic fraud is alleged is that the fraudulent

Malvar cannot avail themselves of the aforesaid ordinary remedies scheme of the prevailing litigant prevented a party from having his day in

ofmotion for new trial, petition for relief from judgment, or appeal, because court.[54]
they were not parties to the proceedings in Civil Case No. 96-4193 in

which the RTC Decision dated 11 January 2001 sought to be annulled

 CIVPRO Rule 46-57 FULL CASES 32 of 128

It is, thus, settled that the purpose of a Petition for Annulment of Esquivel, Jr. and Carlito Talens in Civil Case No. 96-4193 is DISMISSED;
Judgment is to have the final and executory judgment set aside so that and

there will be a renewal of litigation.If the judgment sought to be annulled,

like in this case, is still on appeal or under review by a higher court, it

cannot be regarded as final, and there can be no renewal of litigation

because the litigation is actually still open and on-going. In this light, the

arguments of Nordec Phil. and Dr. Malvar that the judgments or final (b) The Petition in G.R. No. 170621 is hereby DENIED. The Resolutions

orders need not be final and executory for it to be annulled must fail. dated 6 October 2005 and 16 November 2005 of the Court of Appeals in
CA-G.R. SP No. 91428 are hereby AFFIRMED. No costs.

This Court, therefore, finds no error in the dismissal by the Court of

SO ORDERED.
Appeals of the Petition for Annulment of Judgment filed by Nordec Phil.

and Dr. Malvar, on the ground of prematurity. Given that the 11 January

2001 Decision of the RTC in Civil Case No. 96-4193 was still pending

appeal before this Court, the Court of Appeals could not take cognizance

of the Petition for annulment of the same judgment, for if it had done so,

then it would risk promulgating a ruling which could be contrary to and

inconsistent with the ruling of this Court on the appeal of the judgment.

WHEREFORE, premises considered:

(a) The Petition in G.R. No. 168734 is GRANTED. The Decision

dated 14 February 2005 and Resolution dated 27 June 2005 of the Court
of Appeals in CA-G.R. CV No.70200, affirming in toto the 11 January

2001 Decision of the Regional Trial Court of Antipolo City, Branch 73, in
Civil Case No. 96-4193, are REVERSED and SET ASIDE. The

Complaint for Reconveyance and Recovery of Possession of Jose

 CIVPRO Rule 46-57 FULL CASES 33 of 128

(3) Alaban vs CA
fees, defective publication, and lack of notice to the other heirs. Moreover,
DECISION
they alleged that the will could not have been probated because: (1) the

TINGA, J.: signature of the decedent was forged; (2) the will was not executed in

accordance with law, that is, the witnesses failed to sign below the attestation

clause; (3) the decedent lacked testamentary capacity to execute and publish
This is a petition for review of the Resolutions[1] of the a will; (4) the will was executed by force and under duress and improper
Court of Appeals (CA) in CA-G.R. SP No. 69221,[2] dismissing petitioners pressure; (5) the decedent had no intention to make a will at the time of affixing
petition for annulment of judgment. of her signature; and (6) she did not know the properties to be disposed of,

having included in the will properties which no longer belonged to her.

Petitioners prayed that the letters testamentary issued to respondent be

On 8 November 2000, respondent Francisco Provido (respondent) withdrawn and the estate of the decedent disposed of under intestate
filed a petition, docketed as SP Proc. No. 00-135, for the probate of the Last succession.[9]
Will and Testament[3] of the late Soledad Provido Elevencionado (decedent),

who died on 26 October 2000 in Janiuay, Iloilo.[4] Respondent alleged that he

was the heir of the decedent and the executor of her will. On 30 May 2001, On 11 January 2002, the RTC issued an Order[10] denying petitioners motion

the Regional Trial Court (RTC), Branch 68, in P.D. Monfort North, Dumangas, for being unmeritorious. Resolving the issue of jurisdiction, the RTC held that
Iloilo, rendered its Decision,[5] allowing the probate of the will of the decedent petitioners were deemed notified of the hearing by publication and that the
and directing the issuance of letters testamentary to respondent. [6] deficiency in the payment of docket fees is not a ground for the outright

dismissal of the petition. It merely required respondent to pay the

deficiency.[11] Moreover, the RTCs Decision was already final and executory
More than four (4) months later, or on 4 October 2001, herein petitioners filed even before petitioners filing of the motion to reopen. [12]
a motion for the reopening of the probate proceedings. [7] Likewise, they filed

an opposition to the allowance of the will of the decedent, as well as the

Petitioners thereafter filed a petition[13] with an application for preliminary
issuance of letters testamentary to respondent, [8] claiming that they are the
injunction with the CA, seeking the annulment of the RTCs Decision dated 30
intestate heirs of the decedent. Petitioners claimed that the RTC did not
May 2001 and Order dated 11 January 2002. They claimed that after the
acquire jurisdiction over the petition due to non-payment of the correct docket
 CIVPRO Rule 46-57 FULL CASES 34 of 128

death of the decedent, petitioners, together with respondent, held several Petitioners now come to this Court, asserting that the CA committed grave

conferences to discuss the matter of dividing the estate of the decedent, with abuse of discretion amounting to lack of jurisdiction when it dismissed their

respondent agreeing to a one-sixth (1/6) portion as his share. Petitioners petition for the alleged failure to show that they have not availed of or resorted

allegedly drafted a compromise agreement to implement the division of the to the remedies of new trial, appeal, petition for relief from judgment or other

estate. Despite receipt of the agreement, respondent refused to sign and remedies through no fault of their own, and held that petitioners were not

return the same. Petitioners opined that respondent feigned interest in denied their day in court during the proceedings before the RTC. [20] In

participating in the compromise agreement so that they would not suspect his addition, they assert that this Court has yet to decide a case involving Rule 47

intention to secure the probate of the will.[14] They claimed that they learnt of of the Rules of Court and, therefore, the instant petition should be given due

the probate proceedings only in July of 2001, as a result of which they filed course for the guidance of the bench and bar.[21]

their motion to reopen the proceedings and admit their opposition to the

probate of the will only on 4 October 2001. They argued that the
RTC Decision should be annulled and set aside on the ground of extrinsic For his part, respondent claims that petitioners were in a position to avail of

fraud and lack of jurisdiction on the part of the RTC.[15] the remedies provided in Rules 37 and 38, as they in fact did when they filed

a motion for new trial.[22] Moreover, they could have resorted to a petition for

relief from judgment since they learned of the RTCs judgment only three and
In its Resolution[16] promulgated on 28 February 2002, the CA dismissed the a half months after its promulgation.[23] Respondent likewise maintains that no

petition. It found that there was no showing that petitioners failed to avail of or extrinsic fraud exists to warrant the annulment of the RTCs Decision, since

resort to the ordinary remedies of new trial, appeal, petition for relief from there was no showing that they were denied their day in court. Petitioners

judgment, or other appropriate remedies through no fault of their were not made parties to the probate proceedings because the decedent did

own.[17] Moreover, the CA declared as baseless petitioners claim that the not institute them as her heirs.[24] Besides, assuming arguendo that

proceedings in the RTC was attended by extrinsic fraud. Neither was there petitioners are heirs of the decedent, lack of notice to them is not a fatal defect

any showing that they availed of this ground in a motion for new trial or petition since personal notice upon the heirs is a matter of procedural convenience

for relief from judgment in the RTC, the CA added. [18]Petitioners sought and not a jurisdictional requisite.[25] Finally, respondent charges petitioners of
reconsideration of the Resolution, but the same was denied by the CA for lack forumshopping, since the latter have a pending suit involving the same issues
of merit.[19] as those in SP No. 00-135, that is SP No. 1181[26] filed before Branch 23, RTC
 CIVPRO Rule 46-57 FULL CASES 35 of 128

of General Santos City and subsequently pending on appeal before the CA in notify them of the probate of the will constitute extrinsic fraud that necessitates

CA-G.R. No.74924.[27] the annulment of the RTCs judgment.[31]

It appears that one of the petitioners herein, Dolores M. Flores The petition is devoid of merit.

(Flores), who is a niece of the decedent, filed a petition for letters of

administration with the RTC of General Santos City, claiming that the

decedent died intestate without any issue, survived by five groups of collateral Section 37 of the Rules of Court allows an aggrieved party to file a

heirs. Flores, armed with a Special Power of Attorney from most of the other motion for new trial on the ground of fraud, accident, mistake, or excusable

petitioners, prayed for her appointment as administratrix of the estate of the negligence. The same

decedent. The RTC dismissed the petition on the ground of lack of jurisdiction,

stating that the probate court in Janiuay, Iloilo has jurisdiction since the venue

for a petition for the settlement of the estate of a decedent is the place where

the decedent died. This is also in accordance with the rule that the first court
Rule permits the filing of a motion for reconsideration on the grounds of
acquiring jurisdiction shall continue hearing the case to the exclusion of other
excessive award of damages, insufficiency of evidence to justify the decision
courts, the RTC added.[28] On 9 January 2002, Flores filed a Notice of
or final order, or that the decision or final order is contrary to law. [32] Both
Appeal [29] and on 28 January 2002, the case was ordered forwarded to the
motions should be filed within the period for taking an appeal, or fifteen (15)
CA.[30]
days from notice of the judgment or final order.

Petitioners maintain that they were not made parties to the case in
Meanwhile, a petition for relief from judgment under Section 3 of Rule
which the decision sought to be annulled was rendered and, thus, they could
38 is resorted to when a judgment or final order is entered, or any other
not have availed of the ordinary remedies of new trial, appeal, petition for relief
proceeding is thereafter taken, against a party in any court through fraud,
from judgment and other appropriate remedies, contrary to the ruling of the
accident, mistake, or excusable negligence. Said party may file a petition in
CA. They aver that respondents offer of a false compromise and his failure to
the same court and in the same case to set aside the judgment, order or
 CIVPRO Rule 46-57 FULL CASES 36 of 128

proceeding. It must be filed within sixty (60) days after the petitioner learns of proceeding for the probate of a will is one in rem, such that with the

the judgment and within six (6) months after entry thereof.[33] corresponding publication of the petition the court's jurisdiction extends to all

persons interested in said will or in the settlement of the estate of the

decedent.[39]
A motion for new trial or reconsideration and a petition for relief from judgment

are remedies available only to parties in the proceedings where the assailed

Publication is notice to the whole world that the proceeding has for

its object to bar indefinitely all who might be minded to make an objection of

any sort against the right sought to be established. It is the publication of such

notice that brings in the whole world as a party in the case and vests the court
judgment is rendered.[34] In fact, it has been held that a person who was never
with jurisdiction to hear and decide it.[40] Thus, even though petitioners were
a party to the case, or even summoned to appear therein, cannot avail of a
not mentioned in the petition for probate, they eventually became parties
petition for relief from judgment.[35]
thereto as a consequence of the publication of the notice of hearing.

However, petitioners in this case are mistaken in asserting that they are not
As parties to the probate proceedings, petitioners could have validly availed
or have not become parties to the probate proceedings.
of the remedies of motion for new trial or reconsideration and petition for relief

from judgment. In fact, petitioners filed a motion to reopen, which is essentially

a motion for new trial, with petitioners praying for the reopening of the case
Under the Rules of Court, any executor, devisee, or legatee named
and the setting of further proceedings. However, the motion was denied for
in a will, or any other person interested in the estate may, at any time after the
having been filed out of time, long after the Decision became final and
death of the testator, petition the court having jurisdiction to have the will
executory.
allowed.[36] Notice of the time and place for proving the will must be published

for three (3) consecutive weeks, in a newspaper of general circulation in the Conceding that petitioners became aware of the Decision after it had become

province,[37] as well as furnished to the designated or other known heirs, final, they could have still filed a petition for relief from judgment after the

legatees, and devisees of the testator.[38] Thus, it has been held that a denial of their motion to reopen. Petitioners claim that they learned of

the Decision only on 4 October 2001, or almost four (4) months from the time
the Decision had attained finality. But they failed to avail of the remedy.
For failure to make use without sufficient justification of the said
remedies available to them, petitioners could no longer resort to a petition for
annulment of judgment; otherwise, they would benefit from their own inaction
or negligence.[41]
Even casting aside the procedural requisite, the petition for annulment of
judgment must still fail for failure to comply with the substantive requisites, as
the appellate court ruled.
An action for annulment of judgment is a remedy in law independent
of the case where the judgment sought to be annulled was rendered. [42] The
purpose of such action is to have the final and executory judgment set aside
so that there will be a renewal of litigation. It is resorted to in cases where the
ordinary remedies of new trial, appeal, petition for relief from judgment, or
other appropriate remedies are no longer available through no fault of the
petitioner,[43] and is based on only two grounds: extrinsic fraud, and lack of
CIVPRO Rule 46-57 FULL CASES 37 of 128
jurisdiction or denial of due process.[44] A person need not be a party to the
judgment sought to be annulled, and it is only essential that he can prove his
allegation that the judgment was obtained by the use of fraud and collusion
and he would be adversely affected thereby.[45]
An action to annul a final judgment on the ground of fraud lies only if
the fraud is extrinsic or collateral in character.[46] Fraud is regarded as extrinsic
where it prevents a party from having a trial or from presenting his entire case
to the court, or where it operates upon matters pertaining not to the judgment
itself but to the manner in which it is procured. The overriding consideration
when extrinsic fraud is alleged is that the fraudulent scheme of the prevailing
litigant prevented a party from having his day in court.[47]
To sustain their allegation of extrinsic fraud, petitioners assert that as a result
of respondents deliberate omission or concealment of their names, ages and
residences as the other heirs of the decedent in his petition for allowance of
the will, they were not notified of the proceedings, and thus they were denied
their day in court. In addition, they claim that respondents offer of a false
compromise even before the filing of the petition prevented them from
appearing and opposing the petition for probate.
 CIVPRO Rule 46-57 FULL CASES 38 of 128

The Court is not convinced.

One other vital point is the issue of forum-shopping against

petitioners. Forum-shopping consists of filing multiple suits in different courts,

either simultaneously or successively, involving the same parties, to ask the

According to the Rules, notice is required to be personally given to
courts to rule on the same or related causes and/or to grant the same or
known heirs, legatees, and devisees of the testator. [48] A perusal of the will
substantially same reliefs,[51] on the supposition that one or the other court
shows that respondent was instituted as the sole heir of the decedent.
would make a favorable disposition.[52] Obviously, the parties in the instant
Petitioners, as nephews and nieces of the decedent, are neither compulsory

nor testate heirs[49] who are entitled to be notified of the probate proceedings case, as well as in the appealed case before the CA, are the same. Both cases

under the Rules. Respondent had no legal obligation to mention petitioners in deal with the existence and validity of the alleged will of the decedent, with
the petition for probate, or to personally notify them of the same. petitioners anchoring their cause on the state of intestacy. In the probate

proceedings, petitioners position has always been that the decedent left no

will and if she did, the will does not comply with the requisites of a valid will.

Besides, assuming arguendo that petitioners are entitled to be so Indeed, that position is the bedrock of their present petition. Of course,
notified, the purported infirmity is cured by the publication of the notice. After
respondent maintains the contrary stance. On the other hand, in the petition
all, personal notice upon the heirs is a matter of procedural convenience and
for letters of administration, petitioner Flores prayed for her appointment as
not a jurisdictional requisite.[50]
administratrix of the

The non-inclusion of petitioners names in the petition and the alleged

failure to personally notify them of the proceedings do not constitute extrinsic

fraud. Petitioners were not denied their day in court, as they were not
prevented from participating in the proceedings and presenting their case estate on the theory that the decedent died intestate. The petition was

before the probate court. dismissed on the ground of lack of jurisdiction, and it is this order of dismissal
 CIVPRO Rule 46-57 FULL CASES 39 of 128

which is the subject of review in CA-G.R. No. 74924. Clearly, therefore, there (4) Triumph International vs Apostol

is forum-shopping. The Case

Moreover, petitioners failed to inform the Court of the said pending

This is a petition for review[1] of the Court of Appeals Decision[2] dated 20
case in their certification against forum- shopping. Neither have they done so
February 2004 and Resolution dated 5 July 2004 in CA-G.R. SP No.
at any time thereafter. The Court notes that even in the petition for annulment 69280. The Court of Appeals reversed the Decision[3] dated 16 July 2001

of judgment, petitioners failed to inform the CA of the pendency of their appeal and Order dated 20 December 2001 of the National Labor Relations

in CA-G.R. No. 74924, even though the notice of appeal was filed way before Commission (NLRC) in NLRC NCR CA No. 026159-00 (NLRC NCR Case

No. 39-01-0422-00).
the petition for annulment of judgment was instituted.

The Antecedent Facts

WHEREFORE, the petition is DENIED. Costs against petitioners.

Respondent Ramon L. Apostol (Apostol) was hired as assistant manager

SO ORDERED. by petitioner Triumph International (Phils.), Inc. (TIPI) in March 1991, and

was holding the same position until TIPIs termination of his employment

on 21 January 2000. On the other hand, respondent Ben M. Opulencia

(Opulencia) was hired as a warehouse helper by TIPI sometime in 1990,

and was the companys warehouse supervisor at the time of the

termination of his employment on 21 January 2000. Apostol was the

immediate superior of Opulencia.

On 14 and 15 August 1999, TIPI conducted an inventory cycle count of

its direct and retail sales in its Muoz warehouse. The inventory cycle

count yielded discrepancies between its result and the stock list
balance as forwarded on 14 August 1999. Consequently, Leonardo T.
Gomez (Gomez), TIPIs Comptroller, issued a memorandum dated 24
August 1999, addressed to Virginia A. Sugue (Sugue), TIPIs Marketing
Services Manager Direct, and R.S. Silva, Marketing and Sales
ManagerRetail, requesting for a reconciliation of the discrepancies. On 6
September 1999, Sugue issued a memorandum addressed to Gomez,
explaining that the discrepancy could be attributed to pilferage of finished
goods at the warehouse, as stated in the affidavit dated 31 August 1999
of Opulencia, TIPIs Warehouse Supervisor. Two days later, or on 8
September 1999, Sugue sent a show-cause letter to Apostol, TIPIs
Assistant Manager-Warehouse and Distribution, requiring him to explain
in writing the negative variance based on the inventory cycle count. The
letter also placed Apostol on leave with pay, pending the investigation
being conducted by TIPI. Sugue issued a similar letter to Opulencia. On
10 September 1999, Apostol sent a letter-memorandum to Sugue,
explaining that the negative variance was due to pilferage of finished
goods by Alfred Hernandez, a security consultant of TIPI. Apostol also
objected to his being placed on leave with pay. On the same day, Gomez
issued a memorandum addressed to Sugue, stating that in the
reconciliation of stock development report against stock list, he noted that
significant adjustments were made by Opulencia and approved by
Apostol.[4] Gomez asked Sugue if she approved such adjustments,[5] and
at the same time, requested the latter to direct Opulencia and Apostol to
explain the adjustments.
CIVPRO Rule 46-57 FULL CASES 40 of 128
On 16 September 1999, Apostol issued a memorandum [6] addressed to
Sugue, copy furnished Gomez, explaining the significant adjustments, to
wit:
(1) Adjustments to conform against the physical existence of
stock balance of 15,836 pcs. x x x
This is the adjustment made in accordance with the agreed
cycle count during the Direct Sales coordination meeting with
RSV, VAS and RLA of SMSD-Direct Sales. These are
documented adjustments to correct the stocklist balance. This
measure was agreed in order to address numerous complaints
of dealers regarding unserved orders.
(2) Discrepancy on Stock transfer from Retail Sales to Direct
Sales of 1,784 pcs. x x x
There are also adjustments to conform against the physical
existence of stock balance of spot items mostly transfer fro
Retail Sales. There are also documented adjustments and are
meant to correct the stocklist balance.
For his part, Opulencia explained in another memorandum of the same
date that the adjustments were made to address the problem of variances
between the stocklist balance and the actual stocks. These were covered
by the usual stock adjustment reports which were approved by the Asst.
Manager-Warehouse and Distribution [i.e., Apostol].[7] Opulencia wrote

Sugue a separate letter-memorandum objecting to his being placed on
leave with pay.
On 22 October 1999, Sugue issued a memorandum [8] informing Apostol
of the following findings of the TIPI investigation, to wit:
1. An inventory count was conducted at the Muoz warehouse on
the 14th and 15th of August 1999. The inventory count uncovered
the pilferage of 15,574 pieces of finished products amounting to
more or less P3.5 million;
2. Adjusting entries to the stock list totaling to (sic) 17,620 were
made without proper investigation and reconciliation with the
Accounting Department in conformity with the Companys
records and accountability;
3. The warehouse keys, which should have been with (sic) Mr.
Apostols custody, were entrusted to the custody of contractual
and/or regular employees in violation of the Companys Standard
Operating Procedure;
4. Mr. Apostol failed to report the alleged fact of pilferage of Mr.
Alfredo A. Hernandez, which act of pilferage having been
committed under Mr. Apostol's area of control and supervision;
and
5. On September 29, 1999, in a telephone conversation with Mr.
Ralph Funtilla, Personnel Manager of the Company, Mr. Apostol
uttered profane, indecent, abusive, derogatory remarks and
indecorous words, and even threatened the former.
CIVPRO Rule 46-57 FULL CASES 41 of 128
Sugue also required Apostol to show cause, within 24 hours, why he
should not be terminated by TIPI for loss of confidence.[9] On 27 October
1999, Apostol issued a reply to Sugues memorandum, stating the
following:[10]
1. The variance uncovered by the inventory cycle count is
caused by pilferage. He referred to the report of Ms. Sugue to
Mr. Gomez stating such fact;
2. The adjustments were made with the full knowledge of the
Accounting Department of the company as reflected in a
Summary Transaction Report which said department has a copy
and which it never questioned. The adjusting entries to the stock
list were made in accordance with the agreed cycle count during
the Direct Sales coordination meeting in order to correct the
stock list balance. These adjustments were done in order to
address the numerous complaints of dealers regarding unserved
orders. The adjusting entries do not violate any company rule
and regulation or any of the Companys internal control systems.
This procedure has also been followed since the start of the
Direct Sales operations where adjustments are made on the
stock list to conform with the actual situation;
3. The entrusting of the keys to warehouse staff is a practice
since 1990 and had been known to all concerned, and no

objections were relayed with regard to this practice. Sufficient
control had been imposed in order to ensure that the staff
member who had custody of the key may not pilfer any stock;
4. The pilferage of Mr. Hernandez was reported to Ms. Sugue
and Mr. Valderama; and
5. No profane, indecent, abuse (sic), derogatory language, or
threats were uttered against Mr. Funtilla.
TIPI conducted administrative investigations on 20 December 1999 and
10 January 2000. On 21 January 2000, TIPI, through Sugue, served
notices to Apostol and Opulencia, stating that their employment had been
terminated for committing infractions of the companys rules and
regulations. Specifically, Apostol was found to have committed Offense
No. 3 (Fraud or willful breach by an employee of the trust reposed in him
by the Company) and Offense No. 25 (Using, uttering or saying profane,
indecent, abusive, derogatory and/or indecorous words or language
against the employer or supervisor), while Opulencia was found to have
committed Offense No. 3 only.
On 28 January 2000, Apostol and Opulencia filed with the Labor Arbiter
a complaint for illegal dismissal and non-payment of salaries and other
benefits against TIPI.
CIVPRO Rule 46-57 FULL CASES 42 of 128
On 28 July 2000, the Labor Arbiter[11] rendered a Decision dismissing the
Complaint for lack of merit.[12] On appeal, the NLRC affirmed the Decision
of the Labor Arbiter.[13]Apostol and Opulencia filed a motion for
reconsideration, but this was denied by the NLRC.[14]
The Court of Appeals Ruling
Apostol and Opulencia filed with the Court of Appeals a petition for
certiorari under Rule 65 of the 1997 Rules of Civil Procedure, assailing
the Decision of the NLRC. On 20 February 2004, the Court of Appeals
rendered judgment, reversing and setting aside the NLRC Decision. The
dispositive portion of the Court of Appeals Decision reads:
WHEREFORE, the instant petition is GRANTED. The assailed
Decision dated July 16, 2001 and Order dated December 20,
2001, of the public respondent NLRC, First Division, Quezon
City in NLRC NCR CA No. 026159-00 (NLRC NCR CASE NO.
39-01-0422-00) are REVERSED and SET ASIDE. In lieu
thereof, the private respondent is hereby ordered to reinstate
the petitioners with full backwages from the time their
employments were terminated on January 21, 2000 up to the
time the decision herein becomes final. However, if
reinstatement is no longer feasible, due to the strained relation
between the parties, the private respondent is ordered to pay
the petitioners their separation pay equivalent to one (1) month
pay for every year of service and, in addition, to backwages.
 CIVPRO Rule 46-57 FULL CASES 43 of 128

2. Whether the Court of Appeals contravened prevailing jurisprudence

by requiring a higher quantum of proof for the dismissal of managerial
SO ORDERED.[15] employees on the ground of loss of trust; and

3. Whether the Court of Appeals gravely erred in ruling that

respondents were illegally dismissed.

TIPI filed a Motion for Reconsideration, but this was denied by the Court

of Appeals in its Resolution of 5 July 2004.[16]

The Courts Ruling

We find the appeal meritorious.

Hence, this appeal.

At the outset, respondents contend that the issues raised by TIPI in this

case entail an evaluation of the factual findings of the Court of Appeals,

The Issues which is proscribed in a petition for review on certiorari where only

questions of law may be raised. Respondents refer to Section 1, Rule 45

of the 1997 Rules of Civil Procedure which states:

TIPI raises the following issues:

1. Whether the Court of Appeals exceeded its jurisdiction when it

reversed the factual findings of the Labor Arbiter and the NLRC by
reevaluating the evidence on record;
 CIVPRO Rule 46-57 FULL CASES 44 of 128

of discretion; (4) when the judgment is based on misapprehension of

facts; (5) when the findings of fact are conflicting; (6) when in making its

findings the Court of Appeals went beyond the issues of the case, or

its findings are contrary to the admissions of both the appellant and the

appellee; (7) when the findings are contrary to that of the trial court; (8)

when the findings are conclusions without citation of specific evidence on

Section 1. Filing of petition with Supreme Court. A party
desiring to appeal by certiorari from a judgment or final order which they are based; (9) when the facts set forth in the petition as well
or resolution of the Court of Appeals, the Sandiganbayan, the
Regional Trial Court or other courts whenever authorized by as in the petitioners main and reply briefs are not disputed by the
law, may file with the Supreme Court a verified petition for respondent; (10) when the findings of fact are premised on the supposed
review on certiorari. The petition shall raise only questions
of law which must be distinctly set forth. (Emphasis absence of evidence and contradicted by the evidence on record; or (11)
supplied)
when the Court of Appeals manifestly overlooked certain relevant facts

not disputed by the parties, which, if properly considered, would justify a

different conclusion.

Applying the above rule, respondents maintain that the instant petition
should be dismissed motu proprio by this Court. In this case, the factual findings of the Court of Appeals are different from

those of the NLRC and the Labor Arbiter. These conflicting findings led

to the setting aside by the Court of Appeals of the decision of the NLRC
As a general rule, petitions for review under Rule 45 of the Rules of Civil
which affirmed the Labor Arbiter. In view thereof, we deem a review of
Procedure filed before this Court may only raise questions of
the instant case proper.
law. However, jurisprudence has recognized several exceptions to this
rule. In Almendrala v. Ngo,[17] we have enumerated several instances

when this Court may review findings of fact of the Court of Appeals on On whether the Court of Appeals exceeded

appeal by certiorari, to wit:[18] (1) when the findings are grounded entirely its jurisdiction when it reversed the factual findings

on speculation, surmises or conjectures; (2) when the inference made is of the Labor Arbiter and the NLRC

manifestly mistaken, absurd or impossible; (3) when there is grave abuse


TIPI contends that a reevaluation of the factual findings of the NLRC is
not within the province of a petition for certiorari under Rule 65. TIPI
asserts that the Court of Appeals can only pass upon such findings if they
are not supported by evidence on record, or if the impugned judgment is
based on misapprehension of facts which circumstances are not present
in this case. TIPI also emphasizes that the NLRC and the Labor Arbiter
concurred in their factual findings which were based on substantial
evidence and, therefore, should have been accorded great weight and
respect by the Court of Appeals.
Respondents, on the other hand, contend that the Court of Appeals
neither exceeded its jurisdiction nor committed error in reevaluating
NLRCs factual findings since such findings are not in accord with the
evidence on record and the applicable law or jurisprudence.
The power of the Court of Appeals to review NLRC decisions via a
Petition for Certiorari under Rule 65 has been settled as early as our
decision in St. Martin Funeral Home v. NLRC.[19] In said case, we held
that the proper vehicle for such review is a Special Civil Action for
Certiorari under Rule 65 of the Rules of Court, and that the case should
be filed in the Court of Appeals in strict observance of the doctrine of the
CIVPRO Rule 46-57 FULL CASES 45 of 128
hierarchy of courts.[20] Moreover, it is already settled that under Section 9
of Batas Pambansa Blg. 129, as amended by Republic Act No.
7902,[21] the Court of Appeals pursuant to the exercise of its original
jurisdiction over petitions for certiorari is specifically given the power to
pass upon the evidence, if and when necessary, to resolve factual
issues.[22] Section 9 clearly states:
xxx
The Court of Appeals shall have the power to try cases and
conduct hearings, receive evidence and perform any and all acts
necessary to resolve factual issues raised in cases falling within
its original and appellate jurisdiction, including the power to grant
and conduct new trials or further proceedings. x x x
However, equally settled is the rule that factual findings of labor officials,
who are deemed to have acquired expertise in matters within their
jurisdiction, are generally accorded not only respect but even finality by
the courts when supported by substantial evidence, i.e., the amount of
relevant evidence which a reasonable mind might accept as adequate to
justify a conclusion.[23] But these findings are not infallible. When there is
a showing that they were arrived at arbitrarily or in disregard of the
evidence on record, they may be examined by the courts.[24]
In this case, the NLRC sustained the factual findings of the Labor
Arbiter. Thus, these findings are generally binding on the appellate court,

unless there was a showing that they were arrived at arbitrarily or in
disregard of the evidence on record. Questioned in a petition for certiorari
under Rule 65, these factual findings were reexamined and reversed by
the Court of Appeals for being not in accord with the evidence on record
and the applicable law or jurisprudence. [25] To determine if the Court of
Appeals reexamination of factual findings and reversal of the NLRC
decision are proper and with sufficient basis, it is incumbent upon this
Court to make its own evaluation of the evidence on record.
On whether the Court of Appeals erred in ruling
that respondents were illegally dismissed
In cases of termination of employees, the well-entrenched policy is that
no worker shall be dismissed except for just or authorized cause provided
by law and after due process.[26] Dismissals of employees have two
facets: first, the legality of the act of dismissal, which constitutes
substantive due process; and second, the legality in the manner of
dismissal, which constitutes procedural due process.[27]
Apostol and Opulencia were dismissed by TIPI allegedly for committing
Offense No. 3 or fraud or willful breach by an employee of the trust
reposed in him by the company or the companys representative. Apostol
was also found to have committed Offense No. 25 or using, uttering or
saying profane, indecent, abusive, derogatory and/or indecorous words
CIVPRO Rule 46-57 FULL CASES 46 of 128
or language against the employer or the supervisor. These grounds are
among the just causes for termination of employment under Article 282
of the Labor Code, to wit:
ART. 282. Termination by employer. An employer may
terminate an employment for any of the following causes:
a) Serious misconduct or willful disobedience by the employee
of the lawful orders of his employer or representative in
connection with his work;
b) Gross and habitual neglect by the employee of his duties;
c) Fraud or willful breach by the employee of the trust reposed
in him by his employer or duly authorized representative;
d) Commission of a crime or offense by the employee against
the person of his employer or any immediate member of his
family or his duly authorized representative; and
e) Other causes analogous to the foregoing. (Italicization
supplied)
Termination of employment based on Article 282 mandates that the
employer substantially comply with the requirements of due process
under the rules implementing the Labor Code, to wit:[28]
Section 2. Security of Tenure. x x x
xxx
(d) In all cases of termination of employment, the following
standards of due process shall be substantially observed:

For termination of employment based on just causes defined in
Article 282 of the Labor Code:
(i) A written notice served on the employee specifying the
ground or grounds for termination, and giving said employee
reasonable opportunity within which to explain his side;
(ii) A hearing or conference during which the employee
concerned, with the assistance of counsel if he so desires is
given opportunity to respond to the charge, present his
evidence or rebut the evidence presented against him; and
(iii) a written notice of termination served on the employee,
indicating that upon, due consideration of all the circumstances,
grounds have been established to justify his termination.
xxx
There is no question that TIPI, in dismissing Apostol and Opulencia,
complied with the above requirements of procedural due process. The
Court of Appeals even pointed out in its decision some of the
documentary proofs of such compliance. We quote the pertinent portion
of the Court of Appeals decision, viz:
x x x In the present case, the evidence shows that the private
respondent [TIPI] had substantially complied with the
requirements of procedural due process. The private
CIVPRO Rule 46-57 FULL CASES 47 of 128
respondent sent the following to the petitioners: (a) show cause
letters addressed to the petitioners [Apostol and Opulencia]
requiring them to explain in writing within 48 hours upon receipt,
the discrepancy on the cycle count conducted on the Muoz
warehouse on August 14-15, 1999 and placing both of them on
leave with pay until further notice pending investigation on the
matter; (b) memorandum dated October 22, 1999 addressed to
petitioner Apostol showing the findings after the investigation
was conducted by the private respondent, requiring him to
explain within 24 hours from receipt why he should not be
terminated from his employment for loss of confidence; and (c)
the notices of termination dated January 21, 2000.[29]
Thus, we are left with the question on whether the alleged causes for
dismissal of respondents Apostol and Opulencia are supported by
substantial evidence.
Apostol and Opulencia were dismissed mainly on ground of fraud or
willful breach of trust. As previously mentioned, fraud or willful breach of
the employers trust is a just cause for termination of employment under
Article 282(c) of the Labor Code. This provision is premised on the fact
that the employee concerned holds a position of trust and confidence, a
situation which exists where such employee is entrusted by the employer
with confidence on delicate matters, such as care and protection,
handling or custody of the employers property. [30] But, in order to
constitute a just cause for dismissal, the act complained of must be work-

related such as would show the employee concerned to be unfit to
continue working for the employer.[31]
Recent decisions of this Court have distinguished the treatment of
managerial employees from that of the rank-and-file personnel,[32] insofar
as the application of the doctrine of loss of trust and confidence is
concerned.[33] Thus, with respect to rank-and-file personnel, loss of trust
and confidence, as ground for valid dismissal, requires proof of
involvement in the alleged events in question, and that mere
uncorroborated assertions and accusations by the employer will not be
sufficient.[34] But as regards a managerial employee, the mere existence
of a basis for believing that such employee has breached the trust of his
employer would suffice for his dismissal.[35] Hence, in the case of
managerial employees, proof beyond reasonable doubt is not
required.[36] It is sufficient that there is some basis for the employers loss
of trust and confidence, such as when the employer has reasonable
ground to believe that the employee concerned is responsible for the
purported misconduct, and the nature of his participation therein renders
him unworthy of the trust and confidence demanded of his
position.[37] Nonetheless, the evidence must be substantial and must
establish clearly and convincingly the facts on which
the loss of confidence rests and not on the employers arbitrariness,
whims, and caprices or suspicion.[38]
CIVPRO Rule 46-57 FULL CASES 48 of 128
In this case, Apostol and Opulencia were not ordinary rank and file
employees; they were managerial and supervisory employees. Apostol
was TIPIs assistant manager for warehouse and distribution, while
Opulencia was a warehouse supervisor. They were entrusted with the
management and handling of the companys warehouse goods.
In the Notices of Termination,[39] TIPI explained the cause for dismissal
of the respondents in this manner:
xxx
Offense No. 3 states that:
Fraud or willful breach by an employee of the trust reposed
in him by the Company or the Companys Representative
is a ground for dismissal.
xxx
An inventory count was conducted at the Muoz warehouse on
the 14th and 15th of August 1999 by the Companys Accounting
Department. The inventory count uncovered the
shortage/pilferage of 15,574 pieces of finished products
amounting to more or less P3.5 Million.
It was further uncovered that you have made unauthorized
and unreported adjusting entries to the stocklist totaling
17,620 pieces, without proper investigation and
reconciliation with the Accounting Department, in
conformity with the Companys records and accountability.
 CIVPRO Rule 46-57 FULL CASES 49 of 128

companys internal control procedures, which resulted to the loss of the

Such an action on your part constitutes a clear violation of
the established internal control procedures of the companys trust and confidence in the respondents.
Company which are meant primarily to safeguard
Company assets. As required by generally accepted
internal control standards, all inventory-related
adjustments should be authorized by Management, Internal control procedures are usually adopted by large manufacturing
including, but not limited to the preparation of formal
reports indicating the parties responsible for as well as the companies, such as petitioner TIPI, to efficiently monitor production and
parties who approved such adjustments. In this respect, it
safeguard company assets and inventories. As part of its internal control
is the Companys finding that you have failed to comply
with such mandatory internal control requirement. procedure, TIPI requires the conduct of a monthly physical inventory in

the finished goods warehouse, with an accompanying report as to

As a responsible officer of the Company, you are mandated to discrepancies between the records and actual count.[40] Adjusting entries
strictly observe such internal control procedures, knowing fully
can be made on the inventory report, provided that a specific procedure
well the adverse consequences of breakdown in internal
control. More so, since you are directly responsible for the is followed. This procedure, which was outlined in the affidavit [41] of
custody and safekeeping of goods, in the direct sales
warehouse. Your culpable negligence in this respect, has Zenaida Galang, TIPIs assistant manager-operations accounting, was
resulted in millions of pesos lost in pilfered goods which could never questioned by the respondents. It provides:
have been uncovered earlier had you reported to Management
the abnormal discrepancy in the amount of inventory per
stocklist vis-a-vis the actual inventory count. (Emphasis
supplied)
xxx

Thus, respondents were found by TIPI to have made unauthorized and

unreported adjusting entries to the stocklist without proper investigation
and reconciliation with the Accounting Department, without prior
authorization by management, and without preparation of formal reports
indicating the parties responsible for the adjustments and those who
approved the same. This, according to TIPI, is a clear violation of the
3. The procedure for making an adjusting entry to the inventory
report is as follows: First, the Sales and Marketing Services
Department, including Mr. Ramon Apostol, must recommend
that such adjusting entry should be made. Second, the
Department Head, namely, Ms. Virginia A. Sugue, must
approve such recommendation. Third, the adjustment made is
reflected in the stock development report prepared by Mr.
Apostol, noted by Ms. Sugue and submitted to me [Galang] for
my checking and review on or before the 10th day of [the]

month. Fourth, the adjustment made must be reviewed and
approved by Leonardo T. Gomez, the Chief Financial Officer of
Triumph.
Respondents do not deny making adjustment entries to the stocklist. In
fact, both admitted making such adjustments in the office memoranda
and affidavits submitted as evidence in this case.[42] The question,
therefore, is whether respondents Apostol and Opulencia, in making such
adjustments, violated TIPI internal control procedures.
After a careful evaluation of the evidence on record, we are convinced
that the respondents made unauthorized adjustments in TIPIs stocklist,
in violation of the companys internal control procedures. This act
warrants respondents dismissal for willful breach of employers trust.
Respondents claim that they made the adjustments[43] in accordance with
the agreed cycle count during the Direct Sales coordination meeting with
other TIPI managerial employees,[44] and that these were documented
adjustments made to correct the stocklist balance.[45] They also claim that
the adjustments were made with full knowledge of the Accounting
Department, as reflected in a Summary Transaction Report which
remained in the custody of said department.[46]
CIVPRO Rule 46-57 FULL CASES 50 of 128
These claims of the respondents are negated by the statements of other
TIPI employees. In an affidavit dated 17 May 2000, Galang, the
person handling the TIPIs accounting records pertaining to the inventory
report of the Direct and Retail Sales Department, stated that she was not
informed by either Apostol or Opulencia that they would make adjusting
entries to the stocklist. Moreover, the Stock Development Reports
submitted to her by Apostol and Opulencia for the months of April to July
1999 did not reflect that they made adjusting entries. We quote the
relevant portion of Galangs affidavit, thus:
xxx
4. I was not informed by either Mr. Ramon L. Apostol or Mr.
Ben M. Opulencia, the persons-in-charge of the Muoz
warehouse, that they will be making adjusting entries to
the stocklist balance in the total quantity of 15,836 pieces
under the heading Adjustment to conform against physical
existence of stock balance, as follows:
April 1999 5,435
May 1999 1,383
June 1999 6,011
July 1999 3,007
TOTAL 15,836
 CIVPRO Rule 46-57 FULL CASES 51 of 128

5. The stock development reports that were submitted to

me by Mr. Apostol and Mr. Opulencia in the months that
the above adjusting entries were made did not reflect that
they made adjusting entries. Sugue, on the other hand, stated in her affidavit dated 26 April

2000,[49] that although she might have given Apostol an informal

6. I never gave any formal or informal authority to either Mr. authorization to make any adjusting entry, she still expected Apostol to
Opulencia or Mr. Apostol to make such adjusting entries to the
submit a formal report for her (Sugues) approval; and that she received
stocklist balance because it is not within my authority to do so. I
can only recommend, after my review, that an adjusting entry no such formal report from Apostol or Opulencia, but discovered that
be made but it is Mr. Gomez who gives the final approval.
adjustments were made only sometime in July or August, after the cycle

count was completed.[50]

7. I was shocked when Mr. Apostol informed me only after the
inventory cycle count done in August 14 and 15, 1999 that he Moreover, respondents claim that the adjustments were with full
made adjusting entries to the stocklist balance without going
through with the above procedures as I have never knowledge of the Accounting Department as reflected in the Summary
encountered an adjusting entry being made in such a manner Transaction Report remains unsubstantiated. No Summary Transaction
in my twenty-one (21) years with Triumph.[47] (Emphasis
supplied) Report was adduced in evidence. Considering the importance of such

report which could have proven respondents allegation that the

adjustments made were formally documented and had, at least, the

authorization of the accounting department, failure of respondents to

It is also apparent from the memorandum dated 10 September exert effort to secure and present the same as evidence is beyond us.

1999,[48] sent by Gomez, TIPIs chief financial officer, to Sugue, that

Gomez did not know of the adjustments made by Apostol and Opulencia.

In the memorandum, Gomez informed Sugue that in the Reconciliation As regards respondents claim that the adjustments were made pursuant

of the Stock Development Report against Stocklist (ending inventory as to a long standing company practice and with the informal authorization

of 13 August 1999), he noted significant adjustments done by Mr. Ben of Sugue, suffice it to say that considering TIPIs formal requirements in

Opulencia and approved by Mr. Mon Apostol x x x. Gomez asked Sugue making adjusting entries, an informal and verbal authorization given by

if she approved the adjustments and even requested her (Sugue) to ask Sugue, even if true, cannot be considered sufficient, especially

Opulencia and Apostol to explain the adjustments. considering the materiality of the discrepancies involved in this case and

the resulting loss to the company.

 CIVPRO Rule 46-57 FULL CASES 52 of 128

Finally, we quote with approval the following findings of the Labor Arbiter:

Considering the foregoing, we find that respondents Apostol and

It has been established that none of the steps [for making
adjustments] were undertaken by complainants when they Opulencia were dismissed by TIPI for a valid and just cause. The
made the entry adjustments. x x x
relationship of employer and employee, specially where the employee

has access to the employers property, necessarily involves trust and

What makes the case worse for the complainants
confidence.[52] Where the rules laid down by the employer to protect its
[respondents] is that these entry adjustments were made as far
back as April 1999. These entry adjustments could have property are violated by the very employee who is entrusted and
accounted for the discrepancies discovered during the August
4 and 15, 1999 cycle count, aside from the pilferages expected to follow and implement the rules, the employee may be validly
committed by Mr. Hernandez, assuming these pilferages were dismissed from service.
true. Yet, complainants never volunteered this fact to the
Company officials. It was only after the discovery by Mr. Gomez
of these unauthorized entry adjustments that they admitted to Finding the dismissal of respondents Apostol and Opulencia, based on
have made such adjustments. willful breach of employers trust, valid, we deem it unnecessary to further

rule on TIPIs other ground for Apostols dismissal, i.e., uttering indecent,
Because of the total disregard of the complainants of the abusive and derogatory words against his supervisor. Note, however,
internal control procedure of the Company, the latter was
definitely prejudiced since it was in a sense blind as to the real that such act of an employee, if substantially proven, may be considered
status of the stocks it has on hand in the warehouse being as serious misconduct which would warrant the termination of his
supervised by the complainants. This being the case, the
Company would have had no idea as to whether it should employment.
increase or decrease its inventory level vis-a-vis the existing
market conditions and whether or not its operations are WHEREFORE, we GRANT the petition. We REVERSE the Court of
profitable.
Appeals Decision dated 20 February 2004 in CA-G.R. SP No. 69280,
Regarding the pilferage allegedly committed by Mr. Hernandez,
this Office finds that such allegations are, in fact, irrelevant in and REINSTATE the Decision dated 16 July 2001 and Order dated 20
these proceedings. Assuming, arguendo, that such pilferage December 2001 of the National Labor Relations Commission in NLRC
existed, it does not and cannot exculpate complainants from
facing the consequences of the unauthorized entry NCR CA No. 026159-00 (NLRC NCR Case No. 39-01-0422-00).
adjustments they committed.[51]
SO ORDERED.
 CIVPRO Rule 46-57 FULL CASES 53 of 128

(5) Navarro vs Executive Secretary Norte and the Province of Dinagat Islands (Dinagat), the President appointed

RESOLUTION the interim set of provincial officials who took their oath of office on January

26, 2007. Later, during the May 14, 2007 synchronized elections, the
NACHURA, J.:
Dinagatnons elected their new set of provincial officials who assumed office

on July 1, 2007.[5]

For consideration of the Court is the Urgent Motion to Recall Entry of

On November 10, 2006, petitioners Rodolfo G. Navarro, Victor F.
Judgment dated October 20, 2010 filed by Movant-Intervenors[1] dated and
Bernal and Rene O. Medina, former political leaders of Surigao del Norte, filed
filed on October 29, 2010, praying that the Court (a) recall the entry of
before this Court a petition for certiorari and prohibition (G.R. No. 175158)
judgment, and (b) resolve their motion for reconsideration of the July 20, 2010
challenging the constitutionality of R.A. No. 9355.[6] The Court dismissed the
Resolution.
petition on technical grounds. Their motion for reconsideration was also

denied.[7]

To provide a clear perspective of the instant motion, we present

hereunder a brief background of the relevant antecedents

Undaunted, petitioners, as taxpayers and residents of
the Province of Surigao del Norte, filed another petition for certiorari[8] seeking

to nullify R.A. No. 9355 for being unconstitutional. They alleged that the
On October 2, 2006, the President of the Republic approved into law
creation of Dinagat as a new province, if uncorrected, would perpetuate an
Republic Act (R.A.) No. 9355 (An Act Creating the Province of Dinagat
illegal act of Congress, and would unjustly deprive the people of Surigao del
Islands).[2] On December 3, 2006, the Commission on Elections (COMELEC)
Norte of a large chunk of the provincial territory, Internal Revenue Allocation
conducted the mandatory plebiscite for the ratification of the creation of the
(IRA), and rich resources from the area. They pointed out that when the law
province under the Local Government Code (LGC). [3] The plebiscite yielded
was passed, Dinagat had
69,943 affirmative votes and 63,502 negative votes. [4] With
a land area of 802.12 square kilometers only and a population of only
the approval of the people from both the mother province of Surigao del
106,951, failing to comply with Section 10, Article X of the Constitution and of
Section 461 of the LGC, on both counts, viz.

Constitution, Article X Local Government
Section 10. No province, city, municipality,
or barangay may be created, divided, merged, abolished,
or its boundary substantially altered, except in
accordance with the criteria established in the local
government code and subject to the approval by a
majority of the votes cast in a plebiscite in the political units
directly affected.
LGC, Title IV, Chapter I
Section 461. Requisites for Creation. (a) A
province may be created if it has an average annual
income, as certified by the Department of Finance, of not
less than Twenty million pesos (P20,000,000.00) based on
1991 constant prices and either of the following requisites:
(i) a continuous territory of at least
two thousand (2,000) square
kilometers, as certified by the Lands
Management Bureau; or
(ii) a population of not less than two
hundred fifty thousand (250,000)
inhabitants as certified by the National
Statistics Office:
CIVPRO Rule 46-57 FULL CASES 54 of 128
Provided, That, the creation thereof shall not
reduce the land area, population, and income of the original
unit or units at the time of said creation to less than the
minimum requirements prescribed herein.
(b) The territory need not be contiguous if it
comprises two (2) or more islands or is separated by a
chartered city or cities which do not contribute to the
income of the province.
(c) The average annual income shall include the
income accruing to the general fund, exclusive of special
funds, trust funds, transfers, and non-recurring income.
(Emphasis supplied.)
On February 10, 2010, the Court rendered its Decision[9] granting the
petition.[10] The Decision declared R.A. No. 9355 unconstitutional for failure to
comply with the requirements on population and land area in the creation of a
province under the LGC. Consequently, it declared the proclamation of
Dinagat and the election of its officials as null and void. The Decision likewise
declared as null and void the provision on Article 9(2) of the Rules and
Regulations Implementing the LGC (LGC-IRR), stating that, [t]he land
area requirement shall not apply where the proposed province is composed
of one (1) or more islands for being beyond the ambit of Article 461 of the
LGC, inasmuch as such exemption is not expressly provided in the law. [11]

The Republic, represented by the Office of the Solicitor General, and
Dinagat filed their respective motions for reconsideration of the Decision. In
its Resolution[12] dated May 12, 2010,[13] the Court denied the said motions.[14]
Unperturbed, the Republic and Dinagat both filed their respective
motions for leave of court to admit their second motions for reconsideration,
accompanied by their second motions for reconsideration. These motions
were eventually noted without action by this Court in its June 29,
2010 Resolution.[15]
Meanwhile, the movants-intervenors filed on June 18, 2010 a Motion
for Leave to Intervene and to File and to Admit Intervenors Motion for
Reconsideration of the Resolution dated May 12, 2010. They alleged that the
COMELEC issued Resolution No. 8790, relevant to this case, which provides
RESOLUTION NO. 8790
WHEREAS, Dinagat Islands, consisting of seven (7)
municipalities, were previously components of the First
Legislative District of the Province of Surigao del Norte. In
December 2006 pursuant to Republic Act No. 9355, the
Province of Dinagat Island[s] was created and its creation
was ratified on 02 December 2006 in the Plebiscite for this
purpose;
CIVPRO Rule 46-57 FULL CASES 55 of 128
WHEREAS, as a province, Dinagat Islands was, for
purposes of the May 10, 2010 National and Local
Elections, allocated one (1) seat for Governor, one (1) seat
for Vice Governor, one (1) for congressional seat, and ten
(10) Sangguniang Panlalawigan seats pursuant to
Resolution No. 8670 dated 16 September 2009;
WHEREAS, the Supreme Court in G.R. No. 180050
entitled Rodolfo Navarro, et al., vs. Executive Secretary
Eduardo Ermita, as representative of the President of
the Philippines, et al. rendered a Decision, dated 10
February 2010, declaring Republic Act No. 9355
unconstitutional for failure to comply with the criteria for the
creation of a province prescribed in Sec. 461 of the Local
Government Code in relation to Sec. 10, Art. X, of the 1987
Constitution;
WHEREAS, respondents intend to file Motion[s] for
Reconsideration on the above decision of the Supreme
Court;
WHEREAS, the electoral data relative to the: (1) position
for Member, House of Representatives representing the
lone congressional district of Dinagat Islands, (2) names of
the candidates for the aforementioned position, (3) position
for Governor, Dinagat Islands, (4) names of the candidates
for the said position, (5) position of the Vice Governor, (6)
the names of the candidates for the said position, (7)
positions for the ten (10) Sangguniang Panlalawigan
Members and, [8] all the names of the candidates for
Sangguniang Panlalawigan Members, have already been
configured into the system and can no longer be revised
within the remaining period before the elections on May 10,
2010.

NOW, THEREFORE, with the current system
configuration, and depending on whether the Decision of
the Supreme Court in Navarro vs. Ermita is reconsidered
or not, the Commission RESOLVED, as it hereby
RESOLVES, to declare that:
a. If the Decision is reversed, there will be no
problem since the current system
configuration is in line with the reconsidered
Decision, meaning that the Province of
Dinagat Islands and the Province of Surigao
del Norte remain as two (2) separate
provinces;
b. If the Decision becomes final and executory
before the election, the Province of Dinagat
Islands will revert to its previous status as
part of the First Legislative District, Surigao
del Norte.
But because of the current system
configuration, the ballots for the Province of
Dinagat Islands will, for the positions of
Member, House of Representatives,
Governor, Vice Governor and Members,
Sangguniang Panlalawigan, bear only the
names of the candidates for the said
positions.
Conversely, the ballots for the First
Legislative District of Surigao del Norte, will,
for the position of Governor, Vice Governor,
Member, House of Representatives, First
District of Surigao del Norte and Members,
Sangguniang Panlalawigan, show only
candidates for the said position. Likewise, the
CIVPRO Rule 46-57 FULL CASES 56 of 128
whole Province of Surigao del Norte, will, for
the position of Governor and Vice Governor,
bear only the names of the candidates for the
said position[s].
Consequently, the voters of the Province of
Dinagat Islands will not be able to vote for the
candidates of Members, Sangguniang
Panlalawigan, and Member, House [of]
Representatives, First Legislative District,
Surigao del Norte, and candidates for
Governor and Vice Governor for Surigao del
Norte. Meanwhile, voters of the First
Legislative District of Surigao del Norte, will
not be able to vote for Members,
Sangguniang Panlalawigan and Member,
House of
Representatives, Dinagat Islands. Also, the
voters of the whole Province of Surigao del
Norte, will not be able to vote for the
Governor and Vice
Governor, Dinagat Islands. Given this
situation, the Commission will postpone the
elections for Governor, Vice Governor,
Member, House of Representatives, First
Legislative District, Surigao del Norte, and
Members, Sangguniang Panlalawigan, First
Legislative District, Surigao del Norte,
because the election will result in [a] failure to
elect, since, in actuality, there are no
candidates for Governor, Vice Governor,
Members, Sangguniang Panlalawigan, First
Legislative District, and Member, House of
Representatives, First Legislative District
(with Dinagat Islands) of Surigao del Norte.
 CIVPRO Rule 46-57 FULL CASES 57 of 128

c. If the Decision becomes final and executory

after the election, the Province of Dinagat
Islands will revert to its previous status as
part of the First Legislative District of Surigao
del Norte. The result of the election will have
to be nullified for the same reasons given in
Item b above. A special election for
Governor, Vice Governor, Member, House of
Representatives, First Legislative District of
Surigao del Norte, and Members,
Sangguniang Panlalawigan, First District,
Surigao del Norte (with Dinagat Islands) will
have to be conducted.
representing the interests of their constituents, they have a clear and strong
interest in the outcome of this case inasmuch as the reversion of Dinagat as
part of the First Legislative District of Surigao del Norte will affect the latter
province such that: (1) the whole administrative set-up of the province will
have to be restructured; (2) the services of many employees will have to be
terminated; (3) contracts will have to be invalidated; and (4) projects and other
developments will have to be discontinued. In addition, they claim that their
rights cannot be adequately pursued and protected in any other proceeding

xxxx since their rights would be foreclosed if the May 12, 2010 Resolution would

attain finality.

SO ORDERED.

In their motion for reconsideration of the May 12, 2010 Resolution, movants-

intervenors raised three (3) main arguments to challenge the above

Resolution, namely: (1) that the passage of R.A. No. 9355 operates as an act
They further alleged that, because they are the duly elected officials
of Congress amending Section 461 of the LGC; (2) that the exemption from
of Surigao del Norte whose positions will be affected by the nullification of the
territorial contiguity, when the intended province consists of two or more
election results in the event that the May 12, 2010 Resolution is not reversed,
islands, includes the exemption from the application of the minimum land area
they have a legal interest in the instant case and would be directly affected by
requirement; and (3) that the Operative Fact Doctrine is applicable in the
the declaration of nullity of R.A. No. 9355.Simply put, movants-intervenors
instant case.
election to their respective offices would necessarily be annulled since

Dinagat Islands will revert to its previous status as part of the First Legislative

District of Surigao del Norte and a special election will have to be conducted
In the Resolution dated July 20, 2010,[16] the Court denied the Motion
for governor, vice governor, and House of Representatives member and
for Leave to Intervene and to File and to Admit Intervenors Motion for
Sangguniang Panlalawigan member for the First Legislative District of Surigao
Reconsideration of the Resolution dated May 12, 2010 on the ground that the
del Norte. Moreover, as residents of Surigao del Norte and as public servants
allowance or disallowance of a motion to intervene is addressed to the sound
 CIVPRO Rule 46-57 FULL CASES 58 of 128

discretion of the Court, and that the appropriate time to file the said motion

was before and not after the resolution of this case.

At the outset, it must be clarified that this Resolution delves solely on the

instant Urgent Motion to Recall Entry of Judgment of movants-intervenors, not

on the second motions for reconsideration of the original

On September 7, 2010, movants-intervenors filed a Motion for
parties, and neither on Dinagats Urgent Omnibus Motion, which our
Reconsideration of the July 20, 2010 Resolution, citing several rulings[17] of

the Court, allowing intervention as an exception to Section 2, Rule 19 of the

Rules of Court that it should be filed at any time before the rendition of
esteemed colleague, Mr. Justice Arturo D. Brion considers as Dinagats third
judgment. They alleged that, prior to the May 10, 2010 elections, their legal
motion for reconsideration. Inasmuch as the motions for leave to admit their
interest in this case was not yet existent. They averred that prior to the May
respective motions for reconsideration of the May 12, 2010 Resolution and
10, 2010 elections, they were unaware of the proceedings in this case. Even
the aforesaid motions for reconsideration were already noted without action
for the sake of argument that they had notice of the pendency of the case,
by the Court, there is no reason to treat Dinagats Urgent Omnibus Motion
they pointed out that prior to the said elections, Sol T. Matugas was a simple
differently. In relation to this, the Urgent Motion to Recall Entry of Judgment
resident of Surigao del Norte, Arturo Carlos A. Egay, Jr. was a member of the
of movants-intervenors could not be considered as a second motion for
Sangguniang Panlalawigan of the Second District of Surigao del Norte, and
reconsideration to warrant the application of Section 3, Rule 15 of the Internal
Mamerto D. Galanida was the Municipal Mayor of Socorro, Surigao del Norte,
Rules of the Supreme Court.[18] It should be noted that this motion prays for
and that, pursuant to COMELEC Resolution No. 8790, it was only after they
the recall of the entry of judgment and for the resolution of their motion for
were elected as Governor of Surigao del Norte, Vice Governor of Surigao del
reconsideration of the July 20, 2010 Resolution which remained
Norte and Sangguniang Panlalawigan Member of the First District of Surigao
unresolved. The denial of their motion for leave to intervene and to admit
del Norte, respectively, that they became possessed with legal interest in this
motion for reconsideration of the May 12, 2010 Resolution did not rule on the
controversy.
merits of the motion for reconsideration of the May 12, 2010 Resolution, but

only on the timeliness of the intended intervention. Their motion for

On October 5, 2010, the Court issued an order for Entry of Judgment, stating reconsideration of this denial elaborated on movants-intervenors interest in

that the decision in this case had become final and executory on May 18, this case which existed only after judgment had been rendered. As such, their

2010. Hence, the above motion. motion for intervention and their motion for reconsideration of the May 12,
 CIVPRO Rule 46-57 FULL CASES 59 of 128

2010 Resolution merely stand as an initial reconsideration of the said their election to their respective positions. Thus, to the Courts mind, there is

resolution. an imperative to grant the Urgent Motion to Recall Entry of Judgment by

movants-intervenors.

With due deference to Mr. Justice Brion, there appears nothing in the

records to support the claim that this was a ploy of respondents legal tactician It should be remembered that this case was initiated upon the filing

to reopen the case despite an entry of judgment. To be sure, it is actually of the petition for certiorari way back on October 30, 2007. At that time,

COMELEC Resolution No. 8790 that set this controversy into motion anew. To movants-intervenors had nothing at stake in the outcome of this case. While

reiterate, the pertinent portion of the Resolution reads: it may be argued that their interest in this case should have commenced upon

the issuance of COMELEC Resolution No. 8790, it is obvious that their interest

in this case then was more imaginary than real. This is because COMELEC
c. If the Decision becomes final and executory after
the election, the Province of Dinagat Islands will Resolution No. 8790 provides that should the decision in this case attain
revert to its previous status as part of the First
finality prior to the May 10, 2010 elections, the election of the local government
Legislative District of Surigao del Norte. The result of
the election will have to be nullified for the same officials stated therein would only have to be postponed. Given such a
reasons given in Item b above. A special election for
Governor, Vice Governor, Member, House of scenario, movants-intervenors would not have suffered any injury or adverse
Representatives, First Legislative District of Surigao effect with respect to the reversion of Dinagat as part of Surigao del Norte
del Norte, and Members, Sangguniang Panlalawigan,
First District, Surigao del Norte (with Dinagat Islands) since they would simply have remained candidates for the respective positions
will have to be conducted. (Emphasis supplied.)
they have vied for and to which they have been elected.

For a party to have locus standi, one must allege such a personal stake in the
Indeed, COMELEC Resolution No. 8790 spawned the peculiar
outcome of the controversy as to assure that concrete adverseness which
circumstance of proper party interest for movants-intervenors only with the
sharpens the presentation of issues upon which the court so largely depends
specter of the decision in the main case becoming final and executory. More
for illumination of difficult constitutional questions. Because constitutional
importantly, if the intervention be not entertained, the movants-intervenors
cases are often public actions in which the relief sought is likely to affect other
would be left with no other remedy as regards to the impending nullification of

persons, a preliminary question frequently arises as to this interest in the
constitutional question raised.[19]
It cannot be denied that movants-intervenors will suffer direct injury in the
event their Urgent Motion to Recall Entry of Judgment dated October 29, 2010
is denied and their Motion for Leave to Intervene and to File and to Admit
Intervenors Motion for Reconsideration of the Resolution dated May 12, 2010
is denied with finality. Indeed, they have sufficiently shown that they have a
personal and substantial interest in the case, such that if the May 12, 2010
Resolution be not reconsidered, their election to their respective positions
during the May 10, 2010 polls and its concomitant effects would all be nullified
and be put to naught. Given their unique circumstances, movants-intervenors
should not be left without any remedy before this Court simply because their
interest in this case became manifest only after the case had already been
decided. The consequences of such a decision would definitely work to their
disadvantage, nay, to their utmost prejudice, without even them being parties
to the dispute. Such decision would also violate their right to due process, a
right that cries out for protection. Thus, it is imperative that the movants-
intervenors be heard on the merits of their cause. We are not only a court of
law, but also of justice and equity, such that our position and the dire
repercussions of this controversy should be weighed on the scales of justice,
rather than dismissed on account of mootness.
CIVPRO Rule 46-57 FULL CASES 60 of 128
The moot and academic principle is not a magical formula that can
automatically dissuade the courts from resolving a case. Courts will decide
cases, otherwise moot and academic, if: (1) there is a grave violation of the
Constitution; (2) there is an exceptional character of the situation and the
paramount public interest is involved; (3) the constitutional issue raised
requires formation of controlling principles to guide the bench, the bar, and the
public; and (4) the case is capable of repetition yet evading review.[20]The
second exception attends this case.
This Court had taken a liberal attitude in the case of David v. Macapagal-
Arroyo,[21] where technicalities of procedure on locus standi were brushed
aside, because the constitutional issues raised were of paramount public
interest or of transcendental importance deserving the attention of the
Court. Along parallel lines, the motion for intervention should be given due
course since movants-intervenors have shown their substantial legal interest
in the outcome of this case, even much more than petitioners themselves, and
because of the novelty, gravity, and weight of the issues involved.
Undeniably, the motion for intervention and the motion for reconsideration of
the May 12, 2010 Resolution of movants-intervenors is akin to the right to
appeal the judgment of a case, which, though merely a statutory right that
must comply with the requirements of the rules, is an essential part of our
judicial system, such that courts should proceed with caution not to deprive a
party of the right to question the judgment and its effects, and ensure that

every party-litigant, including those who would be directly affected, would have
the amplest opportunity for the proper and just disposition of their cause, freed
from the constraints of technicalities.[22]
Verily, the Court had, on several occasions, sanctioned the recall entries of
judgment in light of attendant extraordinary circumstances. [23] The power to
suspend or even disregard rules of procedure can be so pervasive and
compelling as to alter even that which this Court itself had already declared
final.[24] In this case, the compelling concern is not only to afford the movants-
intervenors the right to be heard since they would be adversely affected by
the judgment in this case despite not being original parties thereto, but also to
arrive at the correct interpretation of the provisions of the LGC with respect to
the creation of local government units. In this manner, the thrust of the
Constitution with respect to local autonomy and of the LGC with respect to
decentralization and the attainment of national goals, as hereafter elucidated,
will effectively be realized.
On the merits of the motion for intervention, after taking a long and
intent look, the Court finds that the first and second arguments raised by
movants-intervenors deserve affirmative consideration.
It must be borne in mind that the central policy considerations in the creation
of local government units are economic viability, efficient administration, and
capability to deliver basic services to their constituents. The criteria prescribed
CIVPRO Rule 46-57 FULL CASES 61 of 128
by the LGC, i.e., income, population and land area, are all designed to
accomplish these results. In this light, Congress, in its collective wisdom, has
debated on the relative weight of each of these three criteria, placing
emphasis on which of them should enjoy preferential consideration.
Without doubt, the primordial criterion in the creation of local government
units, particularly of a province, is economic viability. This is the clear intent of
the framers of the LGC. In this connection, the following excerpts from
congressional debates are quoted hereunder
HON. ALFELOR. Income is mandatory. We can even have
this doubled because we thought
CHAIRMAN CUENCO. In other words, the primordial
consideration here is the economic viability of the new local
government unit, the new province?
xxxx
HON. LAGUDA. The reason why we are willing to increase
the income, double than the House version, because we
also believe that economic viability is really a
minimum. Land area and population are functions really of
the viability of the area, because you have an income level
which would be the trigger point for economic
development, population will naturally increase because
there will be an immigration. However, if you disallow the

particular area from being converted into a province
because of the population problems in the beginning, it will
never be able to reach the point where it could become a
province simply because it will never have the economic
take off for it to trigger off that economic development.
Now, were saying that maybe Fourteen Million Pesos is a
floor area where it could pay for overhead and provide a
minimum of basic services to the population. Over and
above that, the provincial officials should be able to trigger
off economic development which will attract immigration,
which will attract new investments from the private
sector. This is now the concern of the local officials. But if
we are going to tie the hands of the proponents, simply by
telling them, Sorry, you are now at 150 thousand or 200
thousand, you will never be able to become a province
because nobody wants to go to your place. Why? Because
you never have any reason for economic viability.
xxxx
CHAIRMAN PIMENTEL. Okay, what about land area?
HON. LUMAUIG. 1,500 square kilometers
HON. ANGARA. Walang problema yon, in fact thats not
very critical, yong land area because
CHAIRMAN PIMENTEL. Okay, ya, our, the Senate version
is 3.5, 3,500 square meters, ah, square kilometers.
CIVPRO Rule 46-57 FULL CASES 62 of 128
HON. LAGUDA. Ne, Ne. A province is constituted for the
purpose of administrative efficiency and delivery of basic
services.
CHAIRMAN PIMENTEL. Right.
HON. LAGUDA. Actually, when you come down to it, when
government was instituted, there is only one central
government and then everybody falls under that. But it was
later on subdivided into provinces for purposes of
administrative efficiency.
CHAIRMAN PIMENTEL. Okay.
HON. LAGUDA. Now, what were seeing now is that the
administrative efficiency is no longer there precisely
because the land areas that we are giving to our governors
is so wide that no one man can possibly administer all of
the complex machineries that are needed.
Secondly, when you say delivery of basic services, as
pointed out by Cong. Alfelor, there are sections of the
province which have never been visited by public officials,
precisely because they dont have the time nor the energy
anymore to do that because its so wide. Now, by
compressing the land area and by reducing the population
requirement, we are, in effect, trying to follow the basic
policy of why we are creating provinces, which is to deliver
basic services and to make it more efficient in
administration.
CHAIRMAN PIMENTEL. Yeah, thats correct, but on the
assumption that the province is able to do it without being
a burden to the national government. Thats the
assumption.

HON. LAGUDA. Thats why were going into the minimum
income level. As we said, if we go on a minimum income
level, then we say, this is the trigger point at which this
administration can take place.[25]
Also worthy of note are the requisites in the creation of a barangay, a
municipality, a city, and a province as provided both in the LGC and the LGC-
IRR, viz.
For a Barangay:
LGC: SEC. 386. Requisites for Creation. (a) A barangay
may be created out of a contiguous territory which has a
population of at least two thousand (2,000) inhabitants as
certified by the National Statistics Office except in cities
and municipalities within Metro Manila and other
metropolitan political subdivisions or in highly urbanized
cities where such territory shall have a certified population
of at least five thousand (5,000) inhabitants: Provided, That
the creation thereof shall not reduce the population of the
original barangay or barangays to less than the minimum
requirement prescribed herein.
To enhance the delivery of basic services in the indigenous
cultural communities, barangays may be created in such
communities by an Act of Congress, notwithstanding the
above requirement.
(b) The territorial jurisdiction of the new barangay shall be
properly identified by metes and bounds or by more or less
CIVPRO Rule 46-57 FULL CASES 63 of 128
permanent natural boundaries. The territory need not be
contiguous if it comprises two (2) or more islands.
(c) The governor or city mayor may prepare a consolidation
plan for barangays, based on the criteria prescribed in this
Section, within his territorial jurisdiction. The plan shall be
submitted to the sangguniang panlalawigan or
sangguniang panlungsod concerned for appropriate
action. In the case of municipalities within the Metropolitan
Manila area and other metropolitan political subdivisions,
the barangay consolidation plan can be prepared and
approved by the sangguniang bayan concerned.
LGC-IRR: ARTICLE 14. Barangays. (a) Creation of
barangays by the sangguniang panlalawigan shall require
prior recommendation of the sangguniang bayan.
(b) New barangays in the municipalities within MMA shall
be created only by Act of Congress, subject to the
limitations and requirements prescribed in this Article.
(c) Notwithstanding the population requirement, a
barangay may be created in the indigenous cultural
communities by Act of Congress upon recommendation of
the LGU or LGUs where the cultural community is located.
(d) A barangay shall not be created unless the following
requisites are present:
(1) Population which shall not be less than two thousand
(2,000) inhabitants, except in municipalities and cities
within MMA and other metropolitan political
subdivisions as may be created by law, or in highly-

urbanized cities where such territory shall have a
population of at least five thousand (5,000)
inhabitants, as certified by the NSO. The creation of a
barangay shall not reduce the population of the
original barangay or barangays to less than the
prescribed minimum/
(2) Land Area which must be contiguous, unless
comprised by two (2) or more islands. The territorial
jurisdiction of a barangay sought to be created shall
be properly identified by metes and bounds or by more
or less permanent natural boundaries.
Municipality:
LGC: SEC. 442. Requisites for Creation. (a) A municipality
may be created if it has an average annual income, as
certified by the provincial treasurer, or at least Two million
five hundred thousand pesos (P2,500,000.00) for the last
two (2) consecutive years based on the 1991 constant
prices; a population of at least twenty-five thousand
(25,000) inhabitants as certified by the National Statistics
Office; and a contiguous territory of at least fifty (50)
square kilometers as certified by the Lands
Management Bureau: Provided, That the creation thereof
shall not reduce the land area, population or income of the
original municipality or municipalities at the time of said
creation to less than the minimum requirements prescribed
herein.
(b) The territorial jurisdiction of a newly-created
municipality shall be properly identified by metes and
bounds. The requirement on land area shall not apply
where the municipality proposed to be created is
CIVPRO Rule 46-57 FULL CASES 64 of 128
composed of one (1) or more islands. The territory need
not be contiguous if it comprises two (2) or more islands.
(c) The average annual income shall include the income
accruing to the general fund of the municipality concerned,
exclusive of special funds, transfers and non-recurring
income.
(d) Municipalities existing as of the date of effectivity of this
Code shall continue to exist and operate as such. Existing
municipal districts organized pursuant to presidential
issuances or executive orders and which have their
respective set of elective municipal officials holding office
at the time of the effectivity of this Code shall henceforth
be considered regular municipalities.
LGC-IRR: ARTICLE 13. Municipalities. (a) Requisites for
Creation A municipality shall not be created unless the
following requisites are present:
(i) Income An average annual income of not less
than Two Million Five Hundred Thousand Pesos
(P2,500,000.00), for the immediately preceding
two (2) consecutive years based on 1991
constant prices, as certified by the provincial
treasurer. The average annual income shall
include the income accruing to the general fund,
exclusive of special funds, special accounts,
transfers, and nonrecurring income;
(ii) Population which shall not be less than twenty
five thousand (25,000) inhabitants, as certified by
NSO; and

(iii) Land area which must be contiguous with an
area of at least fifty (50) square kilometers, as
certified by LMB. The territory need not be
contiguous if it comprises two (2) or more
islands. The requirement on land area shall not
apply where the proposed municipality is
composed of one (1) or more islands. The
territorial jurisdiction of a municipality sought to be
created shall be properly identified by metes and
bounds.
The creation of a new municipality shall not reduce the land
area, population, and income of the original LGU or LGUs
at the time of said creation to less than the prescribed
minimum requirements. All expenses incidental to the
creation shall be borne by the petitioners.
City:
LGC: SEC. 450. Requisites for Creation. (a) A municipality
or a cluster of barangays may be converted into a
component city if it has an average annual income, as
certified by the Department of Finance, of at least Twenty
million pesos (P20,000,000.00) for the last two (2)
consecutive years based on 1991 constant prices, and if it
has either of the following requisities:
(i) a contiguous territory of at least one hundred
(100) square kilometers, as certified by the Lands
Management Bureau; or,
CIVPRO Rule 46-57 FULL CASES 65 of 128
(ii) a population of not less than one hundred fifty
thousand (150,000) inhabitants, as certified by
the National Statistics Office: Provided, That, the
creation thereof shall not reduce the land area,
population, and income of the original unit or units
at the time of said creation to less than the
minimum requirements prescribed herein.
(b) The territorial jurisdiction of a newly-created city shall
be properly identified by metes and bounds. The
requirement on land area shall not apply where the city
proposed to be created is composed of one (1) or more
islands. The territory need not be contiguous if it
comprises two (2) or more islands.
(c) The average annual income shall include the income
accruing to the general fund, exclusive of special funds,
transfers, and non-recurring income.
LGC-IRR: ARTICLE 11. Cities. (a) Requisites for creation
A city shall not be created unless the following requisites
on income and either population or land area are present:
(1) Income An average annual income of not less than
Twenty Million Pesos (P20,000,000.00), for the
immediately preceding two (2) consecutive years
based on 1991 constant prices, as certified by
DOF. The average annual income shall include the
income accruing to the general fund, exclusive of
special funds, special accounts, transfers, and
nonrecurring income; and
(2) Population or land area Population which shall not be
less than one hundred fifty thousand (150,000)
inhabitants, as certified by the NSO; or land area
which must be contiguous with an area of at least one

hundred (100) square kilometers, as certified by
LMB. The territory need not be contiguous if it
comprises two (2) or more islands or is separated by
a chartered city or cities which do not contribute to the
income of the province. The land area requirement
shall not apply where the proposed city is
composed of one (1) or more islands. The territorial
jurisdiction of a city sought to be created shall be
properly identified by metes and bounds.
The creation of a new city shall not reduce the land area,
population, and income of the original LGU or LGUs at the
time of said creation to less than the prescribed minimum
requirements.All expenses incidental to the creation shall
be borne by the petitioners.
Provinces:
LGC: SEC. 461. Requisites for Creation. (a) A province
may be created if it has an average annual income, as
certified by the Department of Finance, of not less than
Twenty million pesos (P20,000,000.00) based on 1991
prices and either of the following requisites:
(i) a contiguous territory of at least two thousand
(2,000) square kilometers, as certified by the
Lands Management Bureau; or,
(ii) a population of not less than two hundred fifty
thousand (250,000) inhabitants as certified by the
National Statistics Office:
CIVPRO Rule 46-57 FULL CASES 66 of 128
Provided, That the creation thereof shall not reduce the
land area, population, and income of the original unit or
units at the time of said creation to less than the minimum
requirements prescribed herein.
(b) The territory need not be contiguous if it comprises two
(2) or more islands or is separated by a chartered city or
cities which do not contribute to the income of the province.
(c) The average annual income shall include the income
accruing to the general fund, exclusive of special funds,
trust funds, transfers, and non-recurring income.
LGC-IRR: ARTICLE 9. Provinces. (a) Requisites for
creation A province shall not be created unless the
following requisites on income and either population or
land area are present:
(1) Income An average annual income of not less than
Twenty Million pesos (P20,000,000.00) for the
immediately preceding two (2) consecutive years
based on 1991 constant prices, as certified by
DOF. The average annual income shall include the
income accruing to the general fund, exclusive of
special funds, special accounts, transfers, and non-
recurring income; and
(2) Population or land area Population which shall not be
less than two hundred fifty thousand (250,000)
inhabitants, as certified by NSO; or land area which
must be contiguous with an area of at least two
thousand (2,000) square kilometers, as certified by
LMB. The territory need not be contiguous if it
comprises two (2) or more islands or is separated by
a chartered city or cities which do not contribute to the
income of the province. The land area requirement

shall not apply where the proposed province is
composed of one (1) or more islands. The territorial
jurisdiction of a province sought to be created shall be
properly identified by metes and bounds.
The creation of a new province shall not reduce the land
area, population, and income of the original LGU or LGUs
at the time of said creation to less than the prescribed
minimum requirements. All expenses incidental to the
creation shall be borne by the petitioners. (Emphasis
supplied.)
It bears scrupulous notice that from the above cited provisions, with respect
to the creation of barangays, land area is not a requisite indicator of
viability. However, with respect to the creation of municipalities, component
cities, and provinces, the three (3) indicators of viability and projected capacity
to provide services, i.e., income, population, and land area, are provided for.
But it must be pointed out that when the local government unit to be created
consists of one (1) or more islands, it is exempt from the land area requirement
as expressly provided in Section 442 and Section 450 of the LGC if the local
government unit to be created is a municipality or a component city,
respectively. This exemption is absent in the enumeration of the requisites for
the creation of a province under Section 461 of the LGC, although it is
expressly stated under Article 9(2) of the LGC-IRR.
CIVPRO Rule 46-57 FULL CASES 67 of 128
There appears neither rhyme nor reason why this exemption should apply to
cities and municipalities, but not to provinces. In fact, considering the physical
configuration of the Philippine archipelago, there is a greater likelihood that
islands or group of islands would form part of the land area of a newly-created
province than in most cities or municipalities. It is, therefore, logical to infer
that the genuine legislative policy decision was expressed in Section 442 (for
municipalities) and Section 450 (for component cities) of the LGC, but was
inadvertently omitted in Section 461 (for provinces). Thus, when the
exemption was expressly provided in Article 9(2) of the LGC-IRR, the inclusion
was intended to correct the congressional oversight in Section 461 of the LGC
and to reflect the true legislative intent. It would, then, be in order for the Court
to uphold the validity of Article 9(2) of the LGC-IRR.
This interpretation finds merit when we consider the basic policy
considerations underpinning the principle of local autonomy.
Section 2 of the LGC, of which paragraph (a) is pertinent to this case, provides
Sec. 2. Declaration of Policy. (a) It is hereby
declared the policy of the State that the territorial and
political subdivisions of the State shall enjoy genuine and
meaningful local autonomy to enable them to attain their
fullest development as self-reliant communities and make
them more effective partners in the attainment of national
goals. Toward this end, the State shall provide for a more
responsive and accountable local government structure
instituted through a system of decentralization whereby
local government units shall be given more powers,
authority, responsibilities, and resources. The process of

decentralization shall proceed from the national
government to the local government units.
This declaration of policy is echoed in Article 3(a) of the LGC-IRR[26] and in
the Whereas clauses of Administrative Order No. 270,[27] which read
WHEREAS, Section 25, Article II of the Constitution
mandates that the State shall ensure the autonomy of local
governments;
WHEREAS, pursuant to this declared policy, Republic Act
No. 7160, otherwise known as the Local Government Code
of 1991, affirms, among others, that the territorial and
political subdivisions of the State shall enjoy genuine and
meaningful local autonomy to enable them to attain their
fullest development as self-reliant communities and make
them more effective partners in the attainment of national
goals;
WHEREAS, Section 533 of the Local Government Code of
1991 requires the President to convene an Oversight
Committee for the purpose of formulating and issuing the
appropriate rules and regulations necessary for the efficient
and effective implementation of all the provisions of the said
Code; and
WHEREAS, the Oversight Committee, after due
deliberations and consultations with all the concerned
sectors of society and consideration of the operative
principles of local autonomy as provided in the Local
CIVPRO Rule 46-57 FULL CASES 68 of 128
Government Code of 1991, has completed the formulation
of the implementing rules and regulations; x x x
Consistent with the declared policy to provide local government units genuine
and meaningful local autonomy, contiguity and minimum land area
requirements for prospective local government units should be liberally
construed in order to achieve the desired results. The strict interpretation
adopted by the February 10, 2010 Decision could prove to be counter-
productive, if not outright absurd, awkward, and impractical. Picture an
intended province that consists of several municipalities and component cities
which, in themselves, also consist of islands. The component cities and
municipalities which consist of islands are exempt from the minimum land area
requirement, pursuant to Sections 450 and 442, respectively, of the LGC. Yet,
the province would be made to comply with the minimum land area criterion
of 2,000 square kilometers, even if it consists of several islands. This would
mean that Congress has opted to assign a distinctive preference to create a
province with contiguous land area over one composed of islands and negate
the greater imperative of development of self-reliant communities, rural
progress, and the delivery of basic services to the constituency. This
preferential option would prove more difficult and burdensome if the 2,000-
square-kilometer territory of a province is scattered because the islands are
separated by bodies of water, as compared to one with a contiguous land
mass.

Moreover, such a very restrictive construction could trench on the equal
protection clause, as it actually defeats the purpose of local autonomy and
decentralization as enshrined in the Constitution. Hence, the land area
requirement should be read together with territorial contiguity.
Another look at the transcript of the deliberations of Congress should
prove enlightening:
CHAIRMAN ALFELOR. Can we give time to Congressman
Chiongbian,[28] with respect to his
CHAIRMAN LINA. Okay.
HON. CHIONGBIAN. At the outset, Chairman Lina, we
would like to apprise the distinguished Senator about the
action taken by the House, on House Bill No. 7166. This
was passed about two years ago and has been pending in
the Senate for consideration. This is a bill that I am not the
only one involved, including our distinguished Chairman
here. But then we did want to sponsor the bill, being the
Chairman then of the Local Government.
So, I took the cudgels for the rest of the Congressmen, who
were more or less interested in the creation of the new
provinces, because of the vastness of the areas that were
involved.
CIVPRO Rule 46-57 FULL CASES 69 of 128
At any rate, this bill was passed by the House unanimously
without any objection. And as I have said a while ago, that
this has been pending in the Senate for the last two
years. And Sen. Pimentel himself was just in South
Cotabato and he delivered a speech that he will support this
bill, and he says, that he will incorporate this in the Local
Government Code, which I have in writing from him. I
showed you the letter that he wrote, and naturally, we in the
House got hold of the Senate version. It becomes an
impossibility for the whole Philippines to create a new
province, and that is quite the concern of the respective
Congressmen.
Now, insofar as the constitutional provision is concerned,
there is nothing to stop the mother province from voting
against the bill, if a province is going to be created.
So, we are talking about devolution of powers here. Why is
the province not willing to create another province, when it
can be justified. Even Speaker Mitra says, what will happen
to Palawan?We wont have one million people there, and if
you look at Palawan, there will be about three or four
provinces that will comprise that island. So, the
development will be hampered.
Now, I would like to read into the record the letter of Sen.
Pimentel, dated November 2, 1989. This was practically
about a year after 7166 was approved by the House, House
Bill 7166.

On November 2, 1989, the Senator wrote me:
Dear Congressman Chiongbian:
We are in receipt of your letter of 17
October. Please be informed that your House No.
7166 was incorporated in the proposed Local
Government Code, Senate Bill No. 155, which is
pending for second reading.
Thank you and warm regards.
Very truly yours,
That is the very context of the letter of the Senator, and we
are quite surprised that the Senate has adopted another
position.
So, we would like because this is a unanimously approved
bill in the House, thats the only bill that is involving the
present Local Government Code that we are practically
considering; and this will be a slap on the House, if we do
not approve it, as approved by the lower House. This can
be [an] irritant in the approval of the Conference Committee
Report. And I just want to manifest that insofar as the
creation of the province, not only in my province, but the
other provinces. That the mother province will participate in
the plebiscite, they can defeat the province, lets say, on the
basis of the result, the province cannot be created if they
lose in the plebiscite, and I dont see why, we should put this
CIVPRO Rule 46-57 FULL CASES 70 of 128
stringent conditions to the private people of the devolution
that they are seeking.
So, Mr. Senator, I think we should consider the situation
seriously, because, this is an approved version of the
House, and I will not be the one to raise up and question
the Conference Committee Report, but the rest of the
House that are interested in this bill. And they have been
approaching the Speaker about this. So, the Speaker
reminded me to make sure that it takes the cudgel of the
House approved version.
So, thats all what I can say, Mr. Senator, and I dont believe
that it is not, because its the wish of the House, but because
the mother province will participate anyhow, you vote them
down; and that is provided for in the Constitution. As a
matter of fact, I have seen the amendment with regards to
the creation of the city to be urbanized, subject to the
plebiscite. And why should we not allow that to happen in
the provinces! In other words, we dont want the people who
wants to create a new province, as if they are left in the
devolution of powers, when they feel that they are far away
from civilization.
Now, I am not talking about other provinces, because I am
unaware, not aware of their situation. But
the province of South Cotabato has a very unique
geographical territorial conglomerations.One side is in the
other side of the Bay, of Sarangani Bay. The capital town is
in the North; while these other municipalities are in the East
and in the West. And if they have to travel from the last town
in the eastern part of the province, it is about one hundred
forty kilometers to the capital town. And from the West side,
it is the same distance. And from the North side, it is about
one hundred kilometers. So that is the problem there. And
besides, they have enough resources and I feel that, not
because I am interested in the province, I am after their
 CIVPRO Rule 46-57 FULL CASES 71 of 128

welfare in the future. Who am I to dictate on those people? I are considering a bill that has not yet been passed. So I
have no interest but then I am looking at the future hope the Senator will take that into account.
development of these areas.

Thank you for giving me this time to explain.

As a matter of fact, if I am in politics, its incidental; I do not
need to be there, but I can foresee what the creation of a
new province will bring to these people. It will bring them
prosperity; it will bring them more income, and it will
encourage even foreign investors. Like the PAP now,
they are concentrating in South Cotabato, especially in the
City of
General Santos and the neighboring municipalities, and
they are quite interested and even the AID people are
asking me, What is holding the creation of a new province
when practically you need it? Its not 20 or 30 kilometers
from the capital town; its about 140 kilometers. And imagine
those people have to travel that far and our road is not like
Metropolitan Manila. That is as far as from here to
Tarlac. And there are municipalities there that are just one
municipality is bigger than the province of La Union. They
have the income. Of course, they dont have the population
because thats a part of the land of promise and people
from Luzon are migrating everyday because they feel that
there are more opportunities here.
CHAIRMAN LINA. Thank you very much, Congressman
James. We will look into the legislative history of the Senate
version on this matter of creation of provinces. I am sure
there was an amendment. As I said, Ill look into it. Maybe
the House version was incorporated in toto, but maybe
during the discussion, their amendments were introduced
and, therefore, Senator Pimentel could not hold on to the
original version and as a result new criteria were introduced.
But because of the manifestation that you just made, we will
definitely, when we reach a book, Title IV, on the matter of
provinces, we will look at it sympathetically from your end
so that the objective that you want [to] achieve can be
realized. So we will look at it with sympathy. We will review
our position on the matter, how we arrived at the Senate
version and we will adopt an open mind definitely when we
come into it.

So, by creating the new provinces, not only in my case, in

the other cases, it will enhance the development of
the Philippines, not because I am interested in my
province. Well, as far as I am concerned, you know, I am in
the twilight years of my life to serve and I would like to serve
my people well. No personal or political interest here. I hope CHAIRMAN ALFELOR. Kanino yan?
the distinguished Chairman of the Committee will
appreciate the House Bill 7166, which the House has
already approved because we dont want them to throw the
Conference Committee Report after we have worked that CHAIRMAN LINA. Book III.
the house Bill has been, you know, drawn over board and
not even considered by the Senate. And on top of that, we
CHAIRMAN ALFELOR. Title?
 CIVPRO Rule 46-57 FULL CASES 72 of 128

Tuguegarao, there are six municipalities. Ah, excuse me,

Batanes.
CHAIRMAN LINA. Title IV.

CHAIRMAN LINA. Will you look at the case of --- how many
CHAIRMAN ALFELOR. I have been pondering on the case municipalities are there in Batanes province?
of James, especially on economic stimulation of a certain
area. Like our case, because I put myself on our province,
our province is quite very big. Its composed of four (4)
congressional districts and I feel it should be five now. But CHAIRMAN ALFELOR. Batanes is only six.
during the Batasan time, four of us talked and conversed
proposing to divide the province into two.
CHAIRMAN LINA. Six town. Siquijor?

There are areas then, when since time immemorial, very

few governors ever tread on those areas. That is, maybe CHAIRMAN ALFELOR. Siquijor. It is region?
youre acquainted with the Bondoc Peninsula of Quezon,
fronting that is RagayGulf. From Ragay there is a long
stretch of coastal area. From Albay going to Ragay, very
CHAIRMAN LINA. Seven.
few governors ever tread [there] before, even today. That
area now is infested with NPA. That is the area of
Congressman Andaya.
CHAIRMAN ALFELOR.L Seven. Anim.

Now, we thought that in order to stimulate growth, maybe

provincial aid can be extended to these areas. With a big or CHAIRMAN LINA. Six also.
a large area of a province, a certain administrator or
provincial governor definitely will have no sufficient
time. For me, if we really would like to stimulate growth, I
CHAIRMAN ALFELOR. Six also.
believe that an area where there is physical or geographical
impossibilities, where administrators can penetrate, I think
we have to create certain provisions in the law where
maybe we can treat it with special considerations. CHAIRMAN LINA. It seems with a minimum number of
towns?

CHAIRMAN ALFELOR. The population of Siquijor is only

Now, we went over the graduate scale of the Philipppine
Local Government Data as far as provinces are
concerned. It is very surprising that there are provinces
here which only composed of six municipalities, eight
municipalities, seven municipalities. Like in Cagayan,
70 thousand, not even one congressional district. But
tumaas in 1982. Camiguin, that is Region 9. Wala
dito. Nagtataka nga ako ngayon.
 CIVPRO Rule 46-57 FULL CASES 73 of 128

CHAIRMAN LINA. Camiguin, Camiguin. composed only of five municipalities; in Siquijor, its
composed of six, but the share of Siquijor is the same share
with that of the province of Camarines Sur, having a bigger
area, very much bigger.
CHAIRMAN ALFELOR. That is region? Camiguin has five
municipalities, with a population of 63 thousand. But we do
not hold it against the province because maybe thats one
stimulant where growth can grow, can start. The land area That is the budget in process.
for Camiguin is only 229 square kilometers. So if we hard
fast on requirements of, we set a minimum for every
province, palagay ko we just leave it to legislation,
CHAIRMAN LINA. Well, as I said, we are going to consider
eh. Anyway, the Constitution is very clear that in case we
this very seriously and even with sympathy because of the
would like to divide, we submit it to a plebiscite. Pabayaan
explanation given and we will study this very carefully. [29]
natin ang tao. Kung maglalagay tayo ng set ng minimum,
tila yata mahihirapan tayo, eh. Because what is really the
thrust of the Local Government Code? Growth. To devolve
powers in order for the community to have its own idea how
they will stimulate growth in their respective areas.
The matters raised during the said Bicameral Conference Committee meeting

clearly show the manifest intention of Congress to promote development in

So, in every geographical condition, mayroon sariling
the previously underdeveloped and uninhabited land areas
id[i]osyncracies eh, we cannot make a generalization.
by allowing them to directly share in the allocation of funds under the

CHAIRMAN LINA. Will the creation of a province, carved

out of the existing province because of some geographical
id[i]osyncracies, as you called it, stimulate the economic
growth in the area or will substantial aid coming from the national budget. It should be remembered that, under Sections 284 and 285
national government to a particular area, say, to a
municipality, achieve the same purpose? of the LGC, the IRA is given back to local governments, and the sharing is

based on land area, population, and local revenue.[30]

CHAIRMAN ALFELOR. Ano tayo dito sa budget. All right,

here is a province. Usually, tinitingnan lang yun, provision
eh, hindi na yung composition eh. You are entitled to, say,
20% of the area. Elementary is the principle that, if the literal application of the law results in

absurdity, impossibility, or injustice, then courts may resort to extrinsic aids of

Theres a province of Camarines Sur which have the same statutory construction, such as the legislative history of the law, [31] or may
share with that of Camiguin and Siquijor, but Camiguin is consider the implementing rules and regulations and pertinent executive
 CIVPRO Rule 46-57 FULL CASES 74 of 128

issuances in the nature of executive and/or legislative construction. Pursuant

to this principle, Article 9(2) of the LGC-IRR should be deemed incorporated

These State policies are the very reason for the enactment of the
in the basic law, the LGC.
LGC, with the view to attain decentralization and countryside

development. Congress saw that the old LGC, Batas Pambansa Bilang 337,

had to be replaced with a new law, now the LGC of 1991, which is more
It is well to remember that the LGC-IRR was formulated by the
dynamic and cognizant of the needs of the Philippines as an archipelagic
Oversight Committee consisting of members of both the Executive and
country. This accounts for the exemption from the land area requirement of
Legislative departments, pursuant to Section 533 [32] of the LGC. As Section
local government units composed of one or more islands, as expressly stated
533 provides, the Oversight Committee shall formulate and issue
under Sections 442 and 450 of the LGC, with respect to the creation of
the appropriate rules and regulations necessary for the efficient and
municipalities and cities, but inadvertently omitted from Section 461 with
effective implementation of any and all provisions of this Code, thereby
respect to the creation of provinces.Hence, the void or missing detail was filled
ensuring compliance with the principles of local autonomy as defined
in by the Oversight Committee in the LGC-IRR.
under the Constitution. It was also mandated by the Constitution that a local

government code shall be enacted by Congress, to wit

With three (3) members each from both the Senate and the House

of Representatives, particularly the chairpersons of their respective

Section 3. The Congress shall enact a local
Committees on Local Government, it cannot be gainsaid that the inclusion by
government code which shall provide for a more
responsive and accountable local government the Oversight Committee of the exemption from the land area requirement
structure instituted through a system of
decentralization with effective mechanisms of recall, with respect to the creation of provinces consisting of one (1) or more islands
initiative, and referendum, allocate among the different was intended by Congress, but unfortunately not expressly stated in Section
local government units their powers, responsibilities,
and resources, and provide for the qualifications, election, 461 of the LGC, and this intent was echoed through an express provision in
appointment and removal, term, salaries, powers and
the LGC-IRR. To be sure, the Oversight Committee did not just arbitrarily and
functions and duties of local officials, and all other matters
relating to the organization and operation of the local whimsically insert such an exemption in Article 9(2) of the LGC-IRR. The
units. (Emphasis supplied.)
Oversight Committee evidently conducted due deliberation and consultations
with all the concerned sectors of society and considered the operative

principles of local autonomy as provided in the LGC when the IRR was
formulated.[33] Undoubtedly, this amounts not only to an executive
construction, entitled to great weight and respect from this Court, [34] but to
legislative construction as well, especially with the inclusion of representatives
from the four leagues of local government units as members of the Oversight
Committee.
With the formulation of the LGC-IRR, which amounted to both
executive and legislative construction of the LGC, the many details to
implement the LGC had already been put in place, which Congress
understood to be impractical and not too urgent to immediately translate into
direct amendments to the LGC. But Congress, recognizing the capacity and
viability of Dinagat to become a full-fledged province, enacted R.A. No. 9355,
following the exemption from the land area requirement, which, with respect
to the creation of provinces, can only be found as an express provision in the
LGC-IRR. In effect, pursuant to its plenary legislative powers, Congress
breathed flesh and blood into that exemption in Article 9(2) of the LGC-IRR
and transformed it into law when it enacted R.A. No. 9355 creating the Island
Province of Dinagat.
Further, the bill that eventually became R.A. No. 9355 was filed and
favorably voted upon in both Chambers of Congress. Such acts of both
Chambers of Congress definitively show the clear legislative intent to
incorporate into the LGC that exemption from the land area requirement, with
CIVPRO Rule 46-57 FULL CASES 75 of 128
respect to the creation of a province when it consists of one or more islands,
as expressly provided only in the LGC-IRR. Thereby, and by necessity, the
LGC was amended by way of the enactment of R.A. No. 9355.
What is more, the land area, while considered as an indicator of
viability of a local government unit, is not conclusive in showing that Dinagat
cannot become a province, taking into account its average annual income
of P82,696,433.23 at the time of its creation, as certified by the Bureau of
Local Government Finance, which is four times more than the minimum
requirement of P20,000,000.00 for the creation of a province. The delivery of
basic services to its constituents has been proven possible and
sustainable.Rather than looking at the results of the plebiscite and the May
10, 2010 elections as mere fait accompli circumstances which cannot operate
in favor of Dinagats existence as a province, they must be seen from the
perspective that Dinagat is ready and capable of becoming a province. This
Court should not be instrumental in stunting such capacity. As we have held
in League of Cities of the Philippines v. Commission on Elections[35]
Ratio legis est anima. The spirit rather than the
letter of the law. A statute must be read according to its
spirit or intent, for what is within the spirit is within the statute
although it is not within its letter, and that which is within the
letter but not within the spirit is not within the statute. Put a
bit differently, that which is within the intent of the lawmaker
is as much within the statute as if within the letter, and that
which is within the letter of the statute is not within the
statute unless within the intent of the lawmakers. Withal,
courts ought not to interpret and should not accept an
interpretation that would defeat the intent of the law and its
legislators.
 CIVPRO Rule 46-57 FULL CASES 76 of 128

So as it is exhorted to pass on a challenge against the

validity of an act of Congress, a co-equal branch of
government, it behooves the Court to have at once one
principle in mind: the presumption of constitutionality of 3. GRANT the Intervenors Motion for Reconsideration of the
statutes. This presumption finds its roots in the tri-partite
system of government and the corollary separation of Resolution dated May 12, 2010. The May 12, 2010 Resolution
powers, which enjoins the three great departments of the is RECONSIDERED and SET ASIDE. The provision in Article 9(2) of the
government to accord a becoming courtesy for each others
acts, and not to interfere inordinately with the exercise by Rules and Regulations Implementing the Local Government Code of 1991
one of its official functions. Towards this end, courts ought
stating, The land area requirement shall not apply where the proposed
to reject assaults against the validity of statutes, barring of
course their clear unconstitutionality. To doubt is to sustain, province is composed of one (1) or more islands, is
the theory in context being that the law is the product of
earnest studies by Congress to ensure that no declared VALID. Accordingly, Republic Act No. 9355 (An Act Creating the
constitutional prescription or concept is Province of Dinagat Islands) is declared as VALID and CONSTITUTIONAL,
infringed. Consequently, before a law duly challenged is
nullified, an unequivocal breach of, or a clear conflict with, and the proclamation of the Province of Dinagat Islands and the election of
the Constitution, not merely a doubtful or argumentative
the officials thereof are declared VALID; and
one, must be demonstrated in such a manner as to leave
no doubt in the mind of the Court.

4. The petition is DISMISSED.

WHEREFORE, the Court resolved to:

No pronouncement as to costs.

1. GRANT the Urgent Motion to Recall Entry of Judgment by

SO ORDERED.
movants-intervenors, dated and filed on October 29, 2010;

2. RECONSIDER and SET ASIDE the July 20, 2010 Resolution,

and GRANT the Motion for Leave to Intervene and to File and to Admit

Intervenors Motion for Reconsideration of the Resolution dated July 20, 2010;
 CIVPRO Rule 46-57 FULL CASES 77 of 128

(6) Heirs of Maura vs Obliosca

In February 1979, the Jomoc heirs executed a Deed of Extrajudicial
DECISION Settlement with Absolute Sale of Registered Land[2] in favor of petitioner,
NACHURA, J.: Maura So, over the property for P300,000.00. However, the three

respondents and Maura So failed to affix their signatures on this

document. Moreover, the document was not notarized. Nonetheless,

petitioner made a partial payment of P49,000.00 thereon.

This is a petition for review on certiorari of the Decision[1] of the Court of

Thereafter, petitioner demanded the execution of a final deed of
Appeals (CA) dated October 18, 2000, and Resolution dated January 11,
conveyance but the Jomoc heirs ignored the demand. On February 24,
2001, denying the motion for reconsideration of the said decision. The
1983, petitioner filed a Complaint[3]for specific performance against the
assailed decision declared that a petition for annulment of judgment
Jomoc heirs to compel them to execute and deliver the proper
cannot be availed of when the petitioner had already filed an appeal under
registerable deed of sale over the lot. The Jomoc heirs, except for the
Rule 45 of the Rules of Court.
respondents, were impleaded as defendants. The case was docketed as

Civil Case No. 8983.

The antecedents of the case are as follows:

On February 28, 1983, the Jomoc heirs executed again a Deed of

Extrajudicial Settlement with Absolute Sale of Registered Land [4] in favor

Pantaleon Jomoc was the owner of a parcel of land with an area of 496
of the spouses Lim Liong Kang and Lim Pue King for P200,000.00. The
square meters, covered by Transfer Certificate of Title (TCT) No. T-
spouses Lim intervened as defendants in Civil Case No. 8983.
19648, and located at Cogon District, Cagayan de Oro. Upon his death,

the property was inherited by his wife, brothers, sisters, nephews and
On February 12, 1988, the trial court decided the case in favor of the
nieces (collectively referred to as the Jomoc heirs). The respondents,
petitioner. On appeal, the CA affirmed the decision with the modification
Lucila Jomoc Obliosca and Abundia Jomoc Balala, sisters of the
that the award of damages, attorneys fees and expenses of litigation was
deceased, and Elvira Jomoc, a niece, were among those who inherited
deleted. The defendant heirs and the spouses Lim filed separate petitions
the property.
for review with the Supreme Court, docketed as G.R. Nos. 92871 and

92860, which petitions were later consolidated.


On August 2, 1991, the Court rendered a Decision[5] in these
consolidated cases upholding petitioners better right over the
property.[6] The decision became final and executory on November 25,
1991.
On February 10, 1992, petitioner filed a motion for execution of the said
decision. The respondents opposed the motion on the ground that they
did not participate in the execution of the Deed of Extrajudicial Settlement
with Absolute Sale of Registered Land and they were not parties to the
case. Despite the opposition, the trial court granted the motion for
execution. The respondents filed a motion for reconsideration but the trial
court denied the same.
On July 22, 1992, the trial court issued an Order granting the motion for
execution and divesting all the Jomoc heirs of their titles over the
property.[7] Accordingly, the Register of Deeds cancelled the title of the
Jomoc heirs and issued TCT No. T-68370 in the name of the petitioner
on July 24, 1992.
All the Jomoc heirs filed a petition for certiorari with the CA, assailing the
said order of the RTC. They alleged that herein respondents were not
parties to the case, therefore, they should not be bound by the decision
therein and be deprived of their right over the property. On December 8,
1992, the CA dismissed the petition, holding that respondents were
bound by the said decision. The CA ratiocinated that respondents were
CIVPRO Rule 46-57 FULL CASES 78 of 128
aware of the pendency of the case, yet they did not intervene, and that
the case is barred by res judicata. Respondents elevated the case to this
Court through a petition for review on certiorari, which was docketed as
G.R. No. 110661. In a Resolution dated December 1, 1993, the Court
denied the petition, thus:
In the case of Vda. de Jomoc v. Court of Appeals (200 SCRA
[1991]), this Court concluded that the contract of sale between
the heirs of Pantaleon Jomoc and the private respondent Maura
So, even if not complete in form, so long as the essential
requisites of consent of the contracting parties, object and cause
of the obligation concur, and they were clearly established to be
present, is valid and effective between the parties.
The lower court found that petitioners were aware of the
pendency of the specific performance case brought by Maura
So and we agree with the Court of Appeals that their failure to
intervene in said suit for the protection of their rights binds them
to the decision rendered therein.
This Court has held that a writ of execution may be issued
against a person not a party to a case where the latters remedy,
which he did not avail of, was to intervene in the case in question
involving rights over the same parcel of land (Lising vs. Plan,
133 SCRA 194 [1984]; Suson vs. Court of Appeals, 172 SCRA
70 [1989])
It appears that petitioner Elvira Jomoc Gadrinab signed a
Special Power of Attorney in favor of Fellermo Jomoc to
represent her in all proceedings regarding Civil Case No. 8983.
It also appears that all the Jomoc heirs wanted to realize a
higher price by selling the same piece of land a second time to
the Lim spouses. Petitioner Lucila, Abundia and Elvira shared
the same goal, and kept quiet while Maura So sought relief
before the trial court. The other heirs sought to capitalize on
Lucilas, Abundias and Elviras non-participation in the first sale
to Maura So. The heirs (all of them) position is bereft of moral
and equitable basis.

As for the issue of res judicata, we believe that the same applies
as a bar to the instant Petition. In G.R. No. 92871 and G.R. No.
92860, this Court had occasion to rule that herein private
respondent had the right to compel the heirs of Pantaleon Jomoc
to execute the proper public instrument so that a valid contract
of sale of registered land can be duly registered and can bind
third persons. In effect, this Court had already determined the
right of private respondent to a proper registerable deed of sale
which petitioners seek to challenge again in this Petition. A party
cannot avoid the application of the principle of bar by prior
judgment by simply varying the form of the action or by adopting
a different mode of presenting its case or by adding or dropping
a party (Widows and Orphans Association, Inc. vs. Court of
Appeals, 212 SCRA 360 [1992]).
ACCORDINGLY, the Court Resolved to DENY the Petition for
Review for lack of merit.
The resolution became final and executory on June 20, 1994.
It appears that, on March 12, 1992, respondents also filed a complaint for
legal redemption against petitioner with the Regional Trial Court (RTC) of
Misamis Oriental. The case was docketed as Civil Case No. 92-135.
Respondents posited therein that, since they did not sell their shares in
the property to petitioner, they remained co-owners, who have the right
to redeem the shares sold by the other heirs. They prayed that they be
allowed to exercise their right to redeem their co-heirs shares and that
petitioner execute all papers, documents and deeds to effectuate the right
of legal redemption.
On April 27, 1994, the RTC resolved the case in favor of the respondents,
thus:
CIVPRO Rule 46-57 FULL CASES 79 of 128
WHEREFORE, judgment is hereby rendered on the pleadings
and evidence of the parties on record, affidavits and other
documents submitted, there being but purely legal issues
involve[d], ordering the defendant herein, MAURA SO, to
allow the plaintiffs to exercise their substantive right of
legal redemption of the shares of plaintiffs co- heirs,
defendant Maura So, for the purpose of redemption by the
plaintiffs, Lucita Jomoc Obliosca, Abundia Jomoc Balala
(deceased) substituted by her children: Rosita Balala Acenas,
Evangeline Balala Baaclo, Oliver J. Balala, and Perla Balala
Condesa; and Elvira Jomoc Gardinab, is ordered to receive and
accept the amount tendered by the plaintiffs in the amount
of P49,000.00 deposited in the Office of the Clerk of Court of the
Regional Trial Court of Misamis Oriental at Cagayan de Oro
City, and to execute a deed of redemption in favor of the herein
plaintiffs reconveying to the latter the property, and to pay
Plaintiffs for attorneys fees in the reasonable sum
of P20,000.00.
Other claims and for counterclaims for monetary damages of the
parties are dismissed, with costs against defendant.
SO ORDERED.[8]
In a Resolution dated July 14, 1994, the RTC granted petitioners motion
for reconsideration.[9] Respondents moved for reconsideration of the said
resolution. On September 7, 1994, the RTC issued an Order[10] granting
respondents motion for reconsideration and reinstating the April 27,
1994 Resolution.
On November 14, 1994, acting jointly on petitioners Motion for
Reconsideration and respondents Compliance/Motion for the Issuance of
a Writ of Execution, the RTC rendered a Resolution,[11] denying
petitioners motion for reconsideration and granting respondents motion
for execution.

On December 28, 1994, petitioner, later substituted by her heirs, filed with
the CA a petition for annulment of judgment, particularly the September
7, 1994 Order, which reinstated the RTCs April 27, 1994 and November
14, 1994 Resolutions, which denied the petitioners motion for
reconsideration. On October 18, 2000, the CA denied the petition, holding
that the remedy of a petition for annulment of judgment is no longer
available since petitioner Maura So had already filed a petition for review
with this Court assailing the same orders of the trial court.[12]
Apparently, on December 19, 1994, prior to the filing of the petition for
annulment of judgment with the CA, petitioner Maura So filed a petition
for review on certiorari[13] with this Court assailing the same RTC Order
and Resolution. This case was docketed as G.R. No. 118050. In a Minute
Resolution dated March 1, 1995, the Court denied the petition for failure
to sufficiently show that the questioned judgment is tainted with grave
abuse of discretion and for being the wrong remedy.[14] On June 7, 1995,
the Court likewise denied petitioners first motion
reconsideration,[15] and on July 27, 1998, the second motion for
reconsideration. The March 1, 1995 Minute Resolution became final and
executory on September 1, 1998.[16]
On January 11, 2001, the CA denied petitioners motion
reconsideration of its decision denying the petition for annulment of
judgment.[17] Petitioners then filed this petition for review, raising the
following issues:
CIVPRO Rule 46-57 FULL CASES 80 of 128
I.
WHETHER OR NOT THE HONORABLE COURT OF APPEALS
COMMITTED A REVERSIBLE ERROR IN NOT HOLDING
THAT THE TRIAL COURT ACTED WITHOUT JURISDICTION
IN CIVIL CASE NO. 92-135 BECAUSE THE HONORABLE
SUPREME COURT HAD PREVIOUSLY RULED THAT
THE LOT IN QUESTION HAD BEEN SOLD TWICE BY ALL
THE HEIRS OF PANTALEON TO MAURA SO AND LATER TO
THE LIM SPOUSES IN G.R. NOS. 92871 AND 98860 AND G.R.
NO. 110661 AND SAID FINAL DECISIONS AND RESOLUTION
CANNOT BE REVISED AND REVERSED BY SAID TRIAL
COURT.
II.
WHETHER OR NOT THE HONORABLE COURT OF APPEALS
COMMITTED A REVERSIBLE ERROR IN HOLDING THAT
THE ORIGINAL PETITION DOCKETED AS CA-G.R. SP NO.
50059 IS BARRED BY RES JUDICATA BECAUSE THE
RESOLUTION IN G.R. NO. 118050 DID NOT AND CANNOT
REPEAL THE FINAL AND EXECUT[ORY] DECISIONS IN G.R.
NO. 92871 AND G.R. NO. 92860, AND THE FINAL AND
EXECUT[ORY] RESOLUTION IN G.R. NO. 110661, AS THE
RESOLUTION IN G.R. NO. 118050 IS NOT ON THE MERITS,
OR BY THE SUPREME COURT EN BANC.[18]
for The Court resolves to grant the petition despite the prevailing procedural
restrictions, considering the peculiar circumstances of the case, in order
to avoid causing a grave injustice to petitioners.
But before we discuss these circumstances which impel us to grant the
for petition, we must acknowledge extant procedural principles.
First, annulment of judgment is a recourse equitable in character, allowed
only in exceptional cases as where there is no available or other adequate
 CIVPRO Rule 46-57 FULL CASES 81 of 128

remedy.[19] Thus, it may not be invoked (1) where the party has availed an appeal.[21] The error raised by petitioners pertains to the trial courts

himself of the remedy of new trial, appeal, petition for relief, or other exercise of its jurisdiction, not its lack of authority to decide the case. In a

appropriate remedy and lost; or (2) where he has failed to avail himself of petition for annulment of judgment based on lack of jurisdiction, petitioner

those remedies through his own fault or negligence. [20] We, therefore, must show not merely an abuse of jurisdictional discretion but an absolute

agree with the CA that the remedy of a petition for annulment of judgment lack of authority to hear and decide the case. On this basis, there would

is no longer available to petitioners since their predecessor-in-interest, be no valid ground to grant the petition for annulment of judgment.
Maura So, had already availed herself of a petition for review on certiorari

under Rule 45 of the Rules of Court. Second, well-settled is the principle that a decision that has acquired

finality becomes immutable and unalterable, and may no longer be

Further, none of the grounds for annulment of judgment, namely, extrinsic modified in any respect even if the modification is meant to correct

fraud and lack of jurisdiction, is present in this case. erroneous conclusions of fact or law and whether it will be made by the

court that rendered it or by the highest court of the land. [22] The reason

Petitioners argue that the RTC acted without jurisdiction when it rendered for this is that litigation must end and terminate sometime and

the Resolution which recognized respondents right to redeem the somewhere, and it is essential to an effective and efficient administration

property because this, in effect, amended the Decision of the Supreme of justice that, once a judgment has become final, the winning party,

Court in G.R. Nos. 92871 and 92860, and the Resolution in G.R. No. through a mere subterfuge, be not deprived of the fruits of the verdict.[23]

110661, which sustained the sale of the property to Maura So.

The doctrine of finality of judgment is grounded on the fundamental

Petitioners clearly confused lack of jurisdiction with error in the exercise principle of public policy and sound practice that, at the risk of occasional

of jurisdiction. Jurisdiction is not the same as the exercise of jurisdiction. error, the judgment of courts and the award of quasi-judicial agencies

As distinguished from the exercise of jurisdiction, jurisdiction is the must become final on some definite date fixed by law. [24] The only

authority to decide a case, and not the decision rendered therein. Where exceptions to the general rule are the correction of clerical errors, the so-

there is jurisdiction over the person and the subject matter, the decision called nunc pro tunc entries which cause no prejudice to any party, void

on all other questions arising in the case is but an exercise of such judgments, and whenever circumstances transpire after the finality of the
jurisdiction. And the errors which the court may commit in the exercise of decision which render its execution unjust and inequitable.[25] Again, none

jurisdiction are merely errors of judgment which are the proper subject of of these exceptions is present in this case.
 CIVPRO Rule 46-57 FULL CASES 82 of 128

Maura Sos petition for review of the RTC Decision granting respondents

Notwithstanding these principles, however, the higher interests of justice right to redeem the property.

and equity demand that we brush aside the procedural norms. After all,

rules of procedure are intended to promote rather than defeat substantial It is the third judgment that is apparently in conflict with the two previous

justice, and should not be applied in a very rigid and technical sense. judgments. It rendered final and executory the April 27, 1994 Resolution

Rules of procedure are merely tools designed to facilitate the attainment of the RTC which recognized the right of respondents, as co-owners, to

of justice; they are promulgated to aid the court in the effective redeem the disputed land from Maura So. To recall, the RTC premised

dispensation of justice. The Court has the inherent power and discretion its decision on its finding that respondents did not actually sell their shares

to amend, modify or reconsider a final judgment when it is necessary to in the property to Maura So because they did not sign the Deed of

accomplish the ends of justice.[26] Extrajudicial Settlement with Absolute Sale of Registered Land in favor of

So; hence, they remained co-owners. This ruling is patently erroneous

If the rigid application of the Rules would frustrate rather than promote because this Court had already pronounced in the first two final and

justice, it is always within the Courts power to suspend the Rules or executory judgments (in G.R. Nos. 92871 and 92860, and G.R. No.
[27] 110661) that the whole property had already been sold to Maura So. The
except a particular case from its operation. The power to suspend or

even disregard rules can be so pervasive and compelling as to alter even RTC was barred from holding otherwise under the doctrine of

that which this Court itself has already declared to be final. [28] conclusiveness of judgment.

The present case is peculiar in the sense that it involves three final and The doctrine of conclusiveness of judgment precludes the re-litigation of

executory judgments. The first is this Courts Decision in G.R. Nos. 92871 a particular fact or issue already passed upon by a court of competent
and 92860 which upheld the sale of the whole property by the Jomoc jurisdiction in a former judgment, in another action between the same

heirs, including the herein respondents, to petitioner Maura So. The parties based on a different claim or cause of action.[29]

second is the Courts Resolution in G.R. No. 110661, which sustained the

order of execution of the said decision against the herein respondents In Collantes v. Court of Appeals,[30] the Court offered three options to

despite the fact that they were not party-defendants in the first case. And solve a case of conflicting decisions: the first is for the parties to assert

the third is the Courts Minute Resolution in G.R. No. 118050 which denied their claims anew, the second is to determine which judgment came first,

and the third is to determine which of the judgments had been rendered
 CIVPRO Rule 46-57 FULL CASES 83 of 128

by a court of last resort. In that case, the Court applied the first option and on certiorari of the RTC Resolution in the legal redemption case for failure

resolved the conflicting issues anew. to sufficiently show that the questioned resolution was tainted with grave

abuse of discretion and for being the wrong remedy. In a manner of

Instead of resorting to the first offered solution as in Collantes, which speaking, therefore, the third final and executory judgment was

would entail disregarding all the three final and executory decisions, we substantially a decision of the trial court.

find it more equitable to apply the criteria mentioned in the second and
third solutions, and thus, maintain the finality of one of the conflicting Obviously, the complaint for legal redemption was deliberately filed by the

judgments. The principal criterion under the second option is the time respondents with the RTC to circumvent this Courts previous decisions

when the decision was rendered and became final and executory, such sustaining the sale of the whole property to Maura So. The Court cannot

that earlier decisions should be sustained over the current ones since condone this ploy, even if it failed to uncover the same when the case

final and executory decisions vest rights in the winning party. The major was erroneously elevated to it directly from the trial court (G.R. No.

criterion under the third solution is a determination of which court or 118050).

tribunal rendered the decision. Decisions of this Court should be

accorded more respect than those made by the lower courts. The matter is again before this Court, and this time, it behooves the Court

to set things right in order to prevent a grave injustice from being

The application of these criteria points to the preservation of the Decision committed against Maura So who had, for 15 years since the first decision

of this Court in G.R. Nos. 92871 and 92860 dated August 2, 1991, and was executed, already considered herself to be the owner of the property.

its Resolution in G.R. No. 110661 dated December 1, 1993. Both The Court is not precluded from rectifying errors of judgment if blind and

judgments were rendered long before the Minute Resolution in G.R. No. stubborn adherence to the doctrine of immutability of final judgments

118050 was issued on March 1, 1995. In fact, the August 2, 1991 would involve the sacrifice of justice for technicality.

Decision was executed already respondents were divested of their title WHEREFORE, premises considered, the petition is GRANTED. The

over the property and a new title, TCT No. T-68370, was issued in the Decision of the Court of Appeals dated October 18, 2000, and Resolution

name of Maura So on July 24, 1992.Further, while all three judgments dated January 11, 2001, are REVERSED. The April 27, 1994 Resolution

actually reached this Court, only the two previous judgments extensively and September 7, 1994 Order of the RTC are SET ASIDE. The complaint

discussed the respective cases on the merits. The third judgment (in G.R. for legal redemption docketed as Civil Case No. 92-135 is DISMISSED.

No. 118050) was a Minute Resolution, dismissing the petition for review SO ORDERED.

RULE 57: Preliminary Attachment
(1) Magaling vs Ong
DECISION
CHICO-NAZARIO, J.:
Before this Court is a Petition for Review on Certiorari[1] filed under Rule
45 of the Rules of Court, as amended, seeking the reversal of
the Decision[2] and Amended Decision[3] both of the Court of Appeals,
dated 31 August 2005 and 28 June 2006, respectively, in CA-G.R. CV
No. 70954, entitled, Peter Ong v. Spouses Reynaldo Magaling and Lucia
Magaling, and Thermo Loans and Credit Corporation. The assailed
rulings reversed and set aside the Decision[4] of the Regional Trial Court
(RTC), Branch 13, Lipa City, Batangas, which made petitioner Lucia
Magaling, together with her spouse, Reynaldo Magaling, [5] and
Termo[6] Loans & Credit Corporation, jointly and severally liable to
respondent Peter Ong for the corporate obligation of the aforenamed
corporation as adjudged in the RTC Decision dated 23 June 1999.
As culled from the record, the antecedent facts of the present petition are
as follows:
On 30 September 1998, respondent Peter Ong (Ong) instituted with the
RTC a Complaint[7] for the collection of the sum of P389,000.00, with
interest, attorneys fees and costs of suit, with prayer for issuance of a writ
CIVPRO Rule 46-57 FULL CASES 84 of 128
of preliminary attachment against the spouses Reynaldo Magaling and
Lucila Magaling (Spouses Magaling) and Termo Loans & Credit
Corporation (Termo Loans). The Complaint alleged that:
3. Defendants Sps. Reynaldo Magaling and Lucila Magaling are
the controlling stockholders/owners of Thermo (sic) Loans and
Credit Corp. and had used the corporation as mere alter ego or
adjunct to evade the payment of valid obligation;
4. On or about December 1994, defendant Reynaldo Magaling,
(sic) approached plaintiff in his store at Lipa City and induced
him to lend him money and/or his company Thermo (sic) Loans
and Credit Corp. with undertaking to pay interest at the rate of
two and a half (2 %) percent per month. Defendant gave
assurance that he and his company Thermo (sic) Loans and
Credit Corp. will be able to pay the loan. Without the assurance
plaintiff would not have lent the money;
5. Based on the assurance and representation of Reynaldo
Magaling, Peter Ong extended loan to defendants. As of
September 1997, the principal loan extended to defendants
stands at P350,000.00. The interest thereon computed at 2 %
per month is P8,750.00 per month;
6. In acknowledgment of the loan, on or about September 1997,
defendants issued and tendered to plaintiff series of postdated
checks more particularly described as follows:
Planters Bank
Check No. Date Amount
0473400 Sept. 22, 1997 P8,750.00
0473401 Oct. 22, 1997 8,750.00
0473402 Nov. 22, 1997 8,750.00
0473403 Dec. 22, 1997 8,750.00
0473404 Jan. 22, 1998 8,750.00
0473405 Feb. 22, 1998 8,750.00
0473406 Feb. 22, 1998 350,000.00
which were issued for payment of interest and principal loan
of P350,000.00. However, only check nos. 473400 and 473401

were cleared by the bank. Check no. 473402 was likewise
dishonored but it was subsequently replaced with cash x x x;
7. Despite demands, oral and written, defendants Sps.
Reynaldo and Lucila Magaling and/or Thermo (sic) Loans and
Credit Corp. unjustifiably and illegally failed, refused and
neglected and still fail, refuse and neglect to pay to the prejudice
and damage of plaintiff. As of June 30, 1998, defendants
obligation stands at P389,043.96 inclusive of interest;
It was alleged further that Reynaldo Magaling, as President of Termo
Loans, together with the corporations treasurer, a certain Mrs. L. Rosita,
signed a Promissory Note[8]in favor of Ong for the amount of P300,000.00
plus a monthly interest of 2.5%.
Because of the failure of Termo Loans to pay its outstanding obligation
despite demand, Ong filed the above-mentioned complaint praying that
Spouses Magaling and Termo Loans be ordered to pay, jointly and
severally, the principal amount of P389,000.00, plus interest, attorneys
fees and costs of suit. In addition to the preceding entreaty, Ong asked
for the issuance of the writ of preliminary attachment pursuant to Section
1(d), Rule 57 of the Rules of Court, as amended.
On 7 October 1998, acting on Ongs prayer for the issuance of a writ of
preliminary attachment grounded on the allegation that Spouses
Magaling were guilty of fraud in contracting the obligation subject of the
complaint for sum of money[9]; and finding the same to be impressed with
merit, the RTC issued an Order[10] directing the issuance of the
writ[11] prayed for upon the filing of a bond in the amount of P390,000.00.
CIVPRO Rule 46-57 FULL CASES 85 of 128
Meanwhile, on 3 November 1998, Ong moved to amend the above
complaint to correct the name of Lucila Magaling to Lucia Magaling.[12] In
an Order[13] dated 9 November 1998, the RTC granted the aforesaid
motion and admitted Ongs Amended Complaint[14] dated 29 October
1998.
In their defense, Spouses Magaling alleged in their Answer with
Counterclaim[15] dated 12 November 1998, that:
[P]laintiff (Peter Ong) on its (sic) own invested money with
Termo Loans and Credit Corp. x x x without any inducement
from answering defendants much less assurance that Termo
Loans will be able to pay the loan. Plaintiff got attracted with the
rate of interest being given by Termo Loans to money
placements and this is the reason why plaintiff, at its own risk,
invested money with Termo Loans.
xxxx
The alleged checks appear to have been issued by Termo
Loans as a corporation and answering defendants are not even
signatories thereto. Furthermore, the Promissory Note x x x was
issued by Termo Loans and not by defendants in their individual
capacity.
The Spouses Magaling further clarified that:
There could be no fraud on the part of Reynaldo Magaling
regarding the post-dated checks because he is not even a
signatory thereto. The alleged assurances/warranties to plaintiff
are mere after thoughts to make answering defendants
personally answerable for corporate obligations of Termo
Loans, and to give semblance of merit to plaintiffs application for
attachment.

For its part, Termo Loans failed to file an Answer; thus, upon Ongs
motion, the RTC declared said corporation in default and allowed Ong to
present evidence ex parte.
Pursuant to the writ of preliminary attachment earlier issued, and
evidenced by the Sheriffs Return[16] dated 27 November 1998, the
Sheriff[17] of RTC, Br. 13 of Lipa City, caused the attachment of two (2)
parcels of land covered by Transfer Certificates of Title No. T-109347 and
No. T-75559, both in the names of the Spouses Magaling.
The Spouses Magaling expectedly moved for the reconsideration of the 7
October 1998 Order of the RTC granting the writ of preliminary
attachment, arguing that:
The Writ of Preliminary Attachment x x x was improperly or
irregularly issued as there is no existing ground to support the
issuance of an attachment.
Plaintiff nakedly alleged that the individual defendants are guilty
of fraud in contracting the obligation. Nevertheless, a perusal of
the Amended Complaint and the annexes thereto readily reveals
that the obligation subject of the present case is corporate in
character and not personal obligations of the individual
defendants.[18]
In an Order[19] dated 19 February 1999, the RTC found that Spouses
Magalings Motion to Discharge Attachment[20] was impressed with merit
based on the following reasons:
CIVPRO Rule 46-57 FULL CASES 86 of 128
FIRSTLY, it appears that the obligation was incurred by Termo
Loans and Credit Corporation x x x. It is therefore a corporate
liability and not the personal obligation of herein movants. As
correctly stated by the movants, a corporation has a personality
separate and distinct from that of the stockholders and officers.
SECONDLY, the checks which bounced do not bear the
signatures of herein movants. It is indeed implausible that
movants will give assurances concerning checks they did not
sign.
THIRDLY, the obligation appears to have been incurred in 1994
x x x. Fraud was alleged in connection with the checks that
bounced, and which appear to have been issued only in 1998
by way of renewal of plaintiffs money placement. It appears
therefore that if there was indeed fraud, the same was not
committed simultaneously with the inception of the obligation.
On 23 June 1999, the RTC promulgated the first of two decisions in this
case. Ruling in favor of Ong, and against Termo Loans, the dispositive
portion reads:
WHEREFORE, the Court finds for the plaintiff and against the
defendant-corporation and hereby orders the latter to pay the
former the following amounts:
1. The sum of P350,000.00 representing principal
obligation;
2. Interest at the rate of 2.5% per month from date of
default until full payment (sic)
3. P20,000.00 as and for attorneys fees;
4. The expenses of litigation; and
5. The cost of suit.[21]
 CIVPRO Rule 46-57 FULL CASES 87 of 128

On 11 August 1999, Ong filed a motion[22] for execution of the above, xxxx
which the RTC granted[23] on 18 October 1999. The Writ of
Furthermore, the Planters Development Bank Checks (Exh. A
Execution[24] was subsequently issued by the RTC on 1 March A-3) which were allegedly issued by defendant Reynaldo
Magaling to herein plaintiff were corporate checks under the
2000. On 26 April 2000, the Sheriffs Return[25] was filed before the RTC account name of Thermo (sic) Loans and Credit Corporation
with defendant Reynaldo Magaling not even a signatory thereof.
manifesting that the Writ of Execution earlier issued was being returned In fact, plaintiffs demand letter dated February 24, 1998 (Exh. F)
is addressed to the corporation and not to Reynaldo Magaling.
unsatisfied in view of the fact that Termo Loans had ceased to exist or
A stockholder as a rule is not directly, individually and/or
had been dissolved. personally liable for the indebtedness of the corporation (citation
omitted). Hence, Reynaldo Magaling being a mere stockholder
of Thermo (sic) Loans and Credit Corporation cannot be held
personally liable for the corporate debt incurred by it. [26]
In a parallel development, trial on the merits concerning Ongs cause of

action against the Spouses Magaling ensued.

The fallo of the foregoing decision thus states:

On 5 February 2001, in complete contrast to its first decision, the RTC

WHEREFORE, foregoing premises considered, the instant
promulgated its second decision holding the Spouses Magaling free and Complaint against defendants-spouses Magaling is hereby
DISMISSED for lack of merit.[27]
clear of any obligation or liability with respect to the sum of money claimed

by Ong. The trial court ruled in this wise:

Ong appealed the instant case to the Court of Appeals.
Records show that the subject obligation is the obligation of
defendant corporation. The Non-negotiable Promissory Note
No. 551 dated November 25, 1994 (Exh. B, p. 3) evidencing In a Decision dated 31 August 2005, the appellate court reversed and set
plaintiffs money placement belongs to/or is owned by defendant
Thermo (sic) Loans and Credit Corporation. Defendant aside the ruling of the RTC, viz:
Reynaldo Magaling only signed said Promissory Note in his
capacity as President of the corporation. Even plaintiffs WHEREFORE, the foregoing considered, the instant appeal is
documentary evidence shows that the obligation subject matter hereby GRANTED. The assailed decision is REVERSED and
of the instant case is a corporate one for which the stockholders SET ASIDE and a new one entered declaring appellee spouses
and officers of Thermo (sic) Loans and Credit Corporation are Magaling jointly and severally liable to appellant Peter Ong for
not personally answerable. For being its President, defendant the corporate obligation of Thermo (sic) Loans adjudged in the
Magalings act of convincing the plaintiff in investing money with decision of the trial court dated 23 June 1999.[28]
the corporation granting without admitting it to be true is an act
in usual course of business of said corporation. Thus, Thermo
(sic) Loans and Credit Corporation has a personality separate
and distinct from that of Reynaldo Magaling who happens to be
only a stockholder thereof and president at that time.

The Court of Appeals, in reversing the 5 February 2001 Decision of the
RTC, found that the general rule that corporate officers cannot be held
personally liable for corporate debt when they act in good faith and within
the scope of their authority in executing a contract for and in behalf of the
corporation, cannot apply to the spouses Magaling. The Court of Appeals
pierced the veil of corporate fiction and held the spouses Magaling
solidarily liable with Termo Loans for the corporate obligations of the latter
since it found that Reynaldo Magaling was grossly negligent in managing
the affairs of the said corporation.
The Spouses Magaling moved for the reconsideration of the aforequoted
decision. But not to be outdone, Ong likewise filed a motion for
reconsideration, albeit partial, that is, insofar as the issue of the propriety
of the discharge of the writ of preliminary attachment was concerned.
The Spouses Magalings motion for reconsideration was denied by the
Court of Appeals in its Amended Decision dated 28 June 2006. Deciding
affirmatively on Ongs propositions, the Court of Appeals explained in the
same Amended Decision that:
With respect to appellants prayer, he invited Our attention to his
assignment of error in his Appellants Brief where he sought the
nullification of the Order of the trial court discharging the writ of
attachment. He argued that the said Order granting such
discharge had the effect of prejudging the merits of the case at
a time when Thermo (sic) Loans and Credit Corp. had not even
filed its answer to the complaint. Indeed, We find that such
discharge, even before the issues were joined, prematurely
adjudicated the merits of the case on the lack of personal liability
of appellees, and without the latter even posting a counter bond.
CIVPRO Rule 46-57 FULL CASES 88 of 128
Therefore, as prayed for by appellant, the discharge of
attachment is declared illegal and the writ of attachment is
declared effective and subsisting.[29]
And the dispositive part of the Amended Decision provides:
WHEREFORE, the foregoing considered, the partial motion for
reconsideration of appellant is GRANTED. Accordingly, the
Order discharging the writ of attachment is SET ASIDE and the
Writ of Attachment is hereby declared effective and subsisting.
Appellees motion for reconsideration is DENIED.[30]
Hence, the present petition premised on the following arguments [31]:
I.
THE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF
DISCRETION AND IN EXCESS OF JURISDICTION IN
RELYING ON A GROUND RAISED ONLY FOR THE FIRST
TIME ON APPEAL, TO MAKE REYNALDO MAGALING
PERSONALLY LIABLE FOR CORPORATE LIABILITY; and
II.
THE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF
DISCRETION AND IN EXCESS OF JURISDICTION IN
REINSTATING THE PRELIMINARY ATTACHMENT.
At the outset, we note that while the instant suit is denominated as a
Petition for Review on Certiorari, under Rule 45 of the Revised Rules of
Court, the allegations for the allowance of this petition are that the
appellate court committed grave abuse of discretion amounting to lack or
excess of jurisdiction in reversing the decision dated 5 February 2001 of
the RTC. This is a procedural error. This being an appeal

by certiorari, under Rule 45 of the Revised Rules of Court, this Courts
power to review is generally limited to questions of law and errors of
judgment.[32] Under this mode of appeal, this Court is precluded from
entertaining errors of jurisdiction or grave abuse of discretion a question
which may be appropriately addressed through a petition
for certiorari under Rule 65 of the Revised Rules of Court. In any case, to
put an end to the present controversy, in accordance with the liberal spirit
pervading the Revised Rules of Court and in the interest of justice, this
Court decided to treat the present petition for certiorari as an appeal
by certiorari, considering that it was filed[33] within 15 days from receipt of
the Amended Decision of the Court of Appeals denying petitioners motion
for reconsideration.
In the case at bar, the Spouses Magaling claim that the Court of Appeals
gravely abused its discretion when it (1) held the Spouses Magaling
equally liable with Termo Loans with regard to the financial liability of the
latter; and (2) reinstated the writ of preliminary attachment.
In ruling against the Spouses Magaling on the sole issue of whether or
not they may be held personally liable for the corporate obligation of
Thermo (sic) Loans in favor of Peter Ong,[34] the Court of Appeals
debunked the ratiocination of the RTC that the checks issued by appellee
Reynaldo Magaling were all corporate checks under the account name of
Thermo (sic) Loans to which he was not even a signatory (of) x x x (and)
that the demand letter was addressed to Thermo (sic) Loans and not to
Reynaldo Magaling.[35]It took note of the following:
CIVPRO Rule 46-57 FULL CASES 89 of 128
Appellee Reynaldo Magaling testified that as president of
Thermo (sic) Loans from 1994 up to 1997, it was his duty and
responsibility to supervise the personnel and the operation of
the corporation. (Citation omitted.) The Articles of Incorporation
of Thermo (sic) Loans where he was incorporator and director
states its primary purpose was to engage in the business of a
lending investor, lending money to persons and entities under
the terms and conditions allowed by law. Renaldo (sic) Magaling
likewise admitted that there are other twenty more different
companies also dealing in financing or lending business.
(Citation omitted.) Thus, while it is true that there may have been
no fraud at the inception of the transaction with appellant Peter
Ong, and from 1994 to 1997, he was paid his monthly interest
of 2.5% on his investment or P8,750.00 monthly, the degree of
diligence required of Reynaldo Magaling as director and
president of Thermo (sic) Loans was not shown to have been
exercised by him as expected from the highest officer of the said
company.
Reynaldo Magaling resigned as president of Thermo (sic) Loans
in 1998 when the company already became insolvent. He
admitted that when he resigned, nobody took over as president
of the company. Neither were the investors informed about the
bankruptcy thereof, and nor was any bankruptcy or insolvency
or suspension of payments proceedings instituted to protect the
assets of the corporation and the interest of its investors. As
director and president of the company, he seemed to know
nothing at all about its operations, nor could he produce any
financial document like the companys financial statement, and
in his own words, he conveniently gave all the responsibilities to
the manager x x x.
Considering the nature of the business of Thermo (sic) Loans
and other lending companies of appellee Reynaldo Magaling. It
behooved him to have exercised utmost diligence in running the
affairs of Thermo (sic) Loans to protect its interest and its
investors. Miserably, he failed in this respect that the trial court
even commented that he seemed not to know anything about
the operation of his business. (Citation omitted.)
It then concluded that:

Clearly, Reynaldo Magaling was grossly negligent in directing
the affairs of Thermo (sic) Loans without due regard to the plight
of its investors and thus should be held jointly and severally
liable for the corporate obligation of Thermo (sic) Loans to
appellant Peter Ong.[36]
In asking this Court to reverse and set aside the above-quoted Decision,
as well as the Amended Decision, of the Court of Appeals, the petitioners
contend that the appellate court failed to appreciate several important
facts: 1) that the issue of whether or not a corporate debt or credit can be
the debt or credit of a stockholder was alleged for the first time on appeal;
2) that the Amended Complaint did not allege that Reynaldo Magaling
was guilty of gross negligence or bad faith in directing the affairs of the
corporation[37]; 3) that the solvency of Termo Loans was never put in issue
or raised by Ong; and 4) that negligence is not one of the grounds
provided for by Rule 57 of the Rules of Court that will warrant (the)
issuance of preliminary attachment.[38]
Ong, in traversing the allegations in support of the present petition,
argues in his Comment that he brought up the issue of Reynaldo
Magalings negligence in managing the affairs of Termo Loans in his
Memorandum before the RTC where he stated that:
Being President, it is incumbent upon Reynaldo Magaling to
know the financial condition of his company. He was found
wanting and did not know the financial condition of his company.
How many creditors does the company have? He was supposed
to know that as President but he does not know. One glaring fact
that stands out is that these creditors are left with an empty bag
CIVPRO Rule 46-57 FULL CASES 90 of 128
and cannot collect because of the negligence of Reynaldo
Magaling in running his financing companies.[39]
From the preceding arguments and counter-arguments, the threshold
issues proper for this Courts consideration are, given the facts of the
case, whether or not the Court of Appeals erred in: 1) making the
Spouses Magaling and Termo Loans jointly and severally liable to Ong
for the obligation incurred by the corporation; and 2) reinstating the writ
of preliminary attachment issued against two (2) real properties of the
Spouses Magaling.
The petition is not meritorious.
It is basic that a corporation is a juridical entity with legal personality
separate and distinct from those acting for and in its behalf and, in
general, from the people comprising it.[40] The general rule is that
obligations incurred by the corporation, acting through its directors,
officers and employees, are its sole liabilities, and vice versa.
There are times, however, when solidary liabilities may be incurred and
the veil of corporate fiction may be pierced. Exceptional circumstances
warranting such disregard of a separate personality are summarized as
follows:
1. When directors and trustees or, in appropriate case, the
officers of a corporation:
(a) vote for or assent to patently unlawful acts of the corporation;
 CIVPRO Rule 46-57 FULL CASES 91 of 128

(b) act in bad faith or with gross negligence in directing the
corporate affairs;
(c) are guilty of conflict of interest to the prejudice of the
corporation, its stockholders or members, and other persons; [41]
purpose or some moral obliquity and conscious wrongdoing. It means
breach of a known duty through some ill motive or interest. It partakes of
the nature of fraud.[45]

2. When a director or officer has consented to the issuance of

watered down stocks or who, having knowledge thereof, did not In the present case, there is nothing substantial on record to show that
forthwith file with the corporate secretary his written objection
Reynaldo Magaling, as President of Termo Loans, has, indeed, acted in
thereto;[42]
bad faith in inviting Ong to invest in Termo Loans and/or in obtaining a
3. When a director, trustee or officer has contractually agreed or
stipulated to hold himself personally and solidarily liable with the loan from Ong for said corporation in order to warrant his personal liability.
corporation;[43] or
From all indications, the proceeds of the investment and/or loan were
4. When a director, trustee or officer is made, by specific indeed utilized by Termo Loans. Likewise, bad faith does not arise just
provision of law, personally liable for his corporate action. [44]
because a corporation fails to pay its obligations, because the inability to

pay ones obligation is not synonymous with fraudulent intent not to honor
In making the Spouses Magaling co-defendants of Termo Loans, Ong
the obligations.[46]
alleged in his Complaint for Sum of Money filed with the RTC that the

spouses Reynaldo Magaling and Lucia Magaling were the controlling

The foregoing discussion notwithstanding, this Court still cannot totally
stockholders and/or owners of Termo Loans, and that they had used the
absolve Reynaldo Magaling from any liability considering his gross
corporation to evade the payment of a valid obligation. The appellate
negligence in directing the affairs of Termo Loans; thus, he must be made
court eventually found the Spouses Magaling equally liable with Termo
personally liable for the debt of Termo Loans to Ong.
Loans for the sum of money sought to be collected by Ong.

In order to pierce the veil of corporate fiction, for reasons of negligence

As explained above, to hold a director, a trustee or an officer personally
by the director, trustee or officer in the conduct of the transactions of the
liable for the debts of the corporation and, thus, pierce the veil of
corporation, such negligence must be gross. Gross negligence is one that
corporate fiction, bad faith or gross negligence by the director, trustee or
is characterized by the want of even slight care, acting or omitting to act
officer in directing the corporate affairs must be established clearly and
in a situation where there is a duty to act, not inadvertently but willfully
convincingly. Bad faith is a question of fact and is evidentiary. Bad faith
and intentionally with a conscious indifference to consequences insofar
does not connote bad judgment or negligence. It imports a dishonest
as other persons may be affected;[47] and must be established by clear
 CIVPRO Rule 46-57 FULL CASES 92 of 128

and convincing evidence. Parenthetically, gross or willful negligence on appeal[49] and, as such, are deemed to have been waived. Basic

could amount to bad faith.[48] consideration of due process impels this rule.[50] In the case at bar,

however, the issue respecting Reynaldo Magalings gross negligence was

In the case at bar, in their Memorandum filed before the RTC, the seasonably raised in the proceedings before the RTC. The testimonial
Spouses Magaling argued that the Amended Complaint did not allege evidence elicited from Reynaldo Magaling himself during his cross-

that Reynaldo Magaling was guilty of gross negligence or bad faith in examination in the RTC bears out his wanton disregard of the

directing the affairs of the corporation; and that respondent Ong was not transactions of Termo Loans, particularly in consideration of the fact that

able to adduce evidence to offset the effect of the particular allegation. he was the latters President.

Hence, they insist that it was unfair for the appellate court to conclude

that Reynaldo Magaling failed to exercise the necessary diligence in

It cannot be said that the Spouses Magaling were not given an
running Termo Loans.
opportunity to refute the issue of his supposed gross negligence in

directing the affairs of Termo Loans when the same, having been
We disagree.
established by his own testimony during cross-examination, could have

Petitioners argument is that Ong failed to actually allege in the complaint been objected to at the time it was made. Objection to evidence cannot

Reynaldo Magalings gross negligence in running Termo Loans as basis be raised for the first time on appeal; when a party desires the court to
for making the subject sum of money a personal liability of Reynaldo. For
reject the evidence offered, he must so state in the form of
them, it is, thus, too late in the day to raise the alleged gross negligence
objection. Without such objection, he cannot raise the question for the
of Termo Loans President, Reynaldo Magaling, as this matter has not
first time on appeal. That the Spouses Magaling were not able to present
been pleaded before the RTC. Or simply put, issues raised for the first

time on appeal and not raised timely in the proceedings in the lower court evidence to the contrary was solely due to the ineffectiveness of their

are barred for being violative of basic due process. counsel in rebutting the evidence unearthed and brought to light during

the witness presentation in court. Their counsel could have clarified in the
Generally, laws, theories, issues and arguments not adequately brought
re-direct examination the matters revealed during cross-examination, but
to the attention of the lower court need not be, and ordinarily will not be,
he did not do so.
considered by a reviewing court, as they cannot be raised for the first time
 CIVPRO Rule 46-57 FULL CASES 93 of 128

Q. Your Manager. But you, yourself did not tell him?

Reynaldo Magalings gross negligence became apparent, undeniable and
A. I cannot remember, Your Honor.
proven during the course of the proceedings in the trial court. Reynaldo
COURT:
Magaling was the lone witness presented in court to belie the claim of
Q. So, there was absolutely no occasion for you to tell him even
Ong. On cross-examination, he (Reynaldo Magaling) clearly and plainly in passing in his store that there is danger in the P300,000.00
investment?
shed light on how Termo Loans was run under his aegis, to wit:
A. No, Your Honor.

ATTY. NG:
Q. Mr. witness, this company that you have, this Flagship
Lending Corporation, you said . When was this established, Mr.
witness?
A. I think it is in 1998, more or less, sir.
Q. 1998. How about this First Solid Lending Corporation, when
was this put up?
Q. How about the other investors? Did you not also tell them of
such a situation that you were in in your company?
A. No, Your Honor.
Q. Why not?
A. I did not tell that to investors, what is going on for fear
that they might be afraid of what is happening, Your
Honor.[51]

A. I cannot remember also when it started operating, sir. xxxx

COURT: ATTY. NG:

Q. So, when did you first realize that you have difficulty in Q. Mr. Witness, was there a formal bankruptcy proceedings filed
receiving payments from borrowers? in dissolving the company?

A. In the later part of . xxxx

Q. 19 ..? WITNESS:
A. I do not know, sir.
A. In 1998, Your Honor.
ATTY. NG:
Q. And in 1998 you did not tell Peter Ong that there was difficulty
in receiving payments from the borrowers? Q. Being the President, you do not know or you refused to
know?
A. He knew about it, Your Honor. A. No, sir. I resigned at that time in 1998, sir.

Q. You cannot presume that the investor knows that you have COURT:
difficulty. You have to tell the investor. Did you tell him?
Q. And who took over as President?
A. It was told to him by our manager, what was happening, Your
Honor. A. Nobody took over, Your Honor.
 CIVPRO Rule 46-57 FULL CASES 94 of 128

Q. How about the investors? Did they get all their money? COURT:

WITNESS: Q. So, as President, you do not know who are the other
investor?
A. I do not know, Your Honor.
A. I know the Directors, but the other investors, I do not know,
ATTY. NG: Your Honor.

Q. As of the time that you were still the President, were there Q. Who is in-charged (sic) of the company?
other investors in the company, is it not, aside from Peter Ong?
A. As of now, Your Honor?
A. Yes, sir.
Q. As of now?
Q. Do you know how much was the investment of the other
persons aside from Peter Ong? A. Our manager, Your Honor.

xxxx ATTY. NG:

Q. But because you were the President, you also supervised
WITNESS: your manager, is it not?

A. Like me, I have invested, sir. A. Yes, sir.

ATTY. NG: Q. To your knowledge, can you name some of the other persons
Q. How much? who also invested in your company, if you know?

A. P1.8 Million, sir. A. Yes, sir.

Q. That is your share in the company? Q. Can you name them?

A. No. That is not a share, sir. A. The Directors listed there, sir.

Q. So, that is your investment in the company? Q. How much did the Directors invest in this company?

A. That is my investment, sir. A. That I do not know, sir.

Q. How about the other persons who also invested money with COURT:
your company?
Q. Upon insolvency, the fact that Thermo (sic) Loans became
A. I do not know that, sir. insolvent in 1998, did all the investors get their money?

Q. Can you produce the financial statement of Thermo (sic) A. Many are saying that they will get their money, Your Honor.
Loans, Mr. witness?
Q. But did they actually get their money investment?
A. (No answer).

A. The others were not able to get back, Your Honor.
Q. Did they file a case against you?
A. No charges were filed against me, Your Honor.
Q. How about Thermo (sic) Loans?
A. I do not know, Your Honor.
Q. So, this is the only case filed by an investor against Thermo
(sic) Loans?
A. Yes, Your Honor.
ATTY. NG:
Q. Mr. Witness, going back to your relationship with Mr. Peter
Ong, were you the one who convinced Peter Ong to invest in
your company, the Thermo (sic) Loans?
A. I do not remember that, sir.
COURT:
Q. But you talked to him about the interest and the principal?
A. Yes, Your Honor.
Q. But you did not mention to him that you have other lending
companies?
A. In that matter, I do not remember, Your Honor.
ATTY. NG:
Q. Mr. Witness, when this company, Thermo (sic) Loans pulled
(sic) it up, nagsarado, it was a de facto, there was no. who got
hold of the assets of the company?
A. I do not know that, sir.
Q. Why?
CIVPRO Rule 46-57 FULL CASES 95 of 128
A. Because I am not only attending to that company, I have
so many other companies, sir.
COURT:
Q. You did not go after your P1.8 Million?
A. Nomore (sic), Your Honor, because akoy kinukunsensya
rin ng aking sarili, bilang Katolikoy ayaw ko nang makasali
pa sa ibang bagay na sa banda rooy pera lang ho iyon.
Q. Nakukunsiyensya ka but you were not being bothered for the
money of the other investors? How can that be? Your
conscience bothers you?
A. If I will think about it, I might get sick. I did not bother to
run after my investment for reason of health x x x.
ATTY. NG:
Q. Okay, Mr. Witness, considering that you are a businessman
engaged in similar lines of lending company and being the
President, the former President of Themo (sic) Loans, you had .
you were furnished with final. with financial statement of the
company was it not?
A. I do not remember that, sir.
COURT:
Q. You did not call a meeting of the Directors and other stock
holders that your company is going down?
A. No more, Your Honor, because no Directors attended the
meeting.
Q. But you called a meeting?
A. Yes, Your Honor. I called a meeting but nobody attended the
meeting.
ATTY. NG:
Q. Where are now the financial records of the company?
 CIVPRO Rule 46-57 FULL CASES 96 of 128

A. That I do not know, sir.

cross- examination, he admitted that he had, aside from Termo Loans,
Q. How about your own personal records? Your personal copy
of the financial statement of the company, considering that your various other lending companies, to wit:
classification in Rotary Club is financial services?

A. I do not know where it was placed, sir. ATTY. NG:

Q. So, you are telling this Court that you cannot produce Q. Mr. witness, you said that you are a businessman
anymore the financial statement related to this company, is it? by profession?

A. No, sir. Not like that. WITNESS:

Q. Where you tried to retrieve or will you try to retrieve the A. Yes, sir.
financial statement of this company?
xxxx
A. I gave all the responsibilities to the manager, sir.[52]
ATTY. NG:

Q. In 1994 when you got this alleged investment from

Reynaldo Magalings very own testimony gave reason for the appellate Peter Ong, what were the businesses that you own or control at
that time?
courts finding of gross negligence on his part. Instead of the intended
xxxx
effect of refuting the supposition that Termo Loans was assiduously
WITNESS:
managed, Reynaldo Magalings foregoing testimony only convincingly
A. I did not receive the investment of Peter Ong, it was the
displayed his gross negligence in the conduct of the affairs of Termo company who received, sir.

Loans. From our standpoint, his casual manner, insouciance and ATTY. NG:

nonchalance, nay, indifference, to the predicament of the distressed Q. Okay. But what were your businesses that you
had at that time?
corporation glaringly exhibited a lackadaisical attitude from a top office of
A. Lending companies, sir.
a corporation, a conduct totally abhorrent in the corporate world.
Q. What are the names of that lending companies that
you had?

Reynaldo Magaling is not a novice in the field of commerce. He is a A. Thermo Loans, sir.

seasoned businessman running several lending companies. During his Q. Aside from Thermo Loans?

A. First Solid Lending Company, sir.

 CIVPRO Rule 46-57 FULL CASES 97 of 128

Q. What else? ATTY. NG:

A. Mediator Lending Company, sir. Q. Do you mean to tell this Honorable Court that all these
companies are now doing well and still existing including
Q. What else? Thermo Loans?

A. Beneficial Lending Company, sir. A. Thermo Loans was insolvent at that time, sir. But you did not
ask those insolvent. I have so many companies that are
Q. What else? already insolvent. But you did not ask about the company
that are solvent.
A. Vintage Lending Company, sir.
COURT:
Q. What else?
Q. Among those companies which you mentioned, which of
A. New Profile Lending Company, sir. those are solvent and which are not?

Q. What else? A. All of those I mentioned except Thermo Loans, Your

Honor.[53]
A. Smart Cash Lending Company, sir.
xxxx
Q. What else?
COURT:
A. Cash Line Lending Company, sir.
Q. And Peter Ong could have not parted with the Three Hundred
Q. What else? Thousand pesos (P300,000.00) investment if he did not talk to
you?
A. Insight Lending Company, sir.
A. He talked to me, Your Honor.
Q. What else?
ATTY. NG:
A. Antigo Lending Company, sir.
Q. He talked to you? Now, that you admitted .
Q. What else?
COURT:
A. Flagship Lending Company, sir.
Q. Who was the one who made the offer for him to invest? Was
Q. What else? he the one who voluntarily invested the money or you were the
one who convinced him to invest the P300,000.00 money to
COURT: Thermo Loans Lending and Credit Corporation?

Q. So, what happened to all these lending A. I cannot remember, Your Honor, because due to the lapse of
companies now? time. It was in 1994.[54]

A. They are okay, Your Honor. xxxx


COURT:
Q. So, what you are saying now is that, your manager and Peter
Ong made preliminary talks about Peter Ong investing in
Thermo Loans and Credit Corporation and thereafter, you also
talked with Peter Ong about Peter Ongs investing in Thermo
Loans?
A. Yes, Your Honor.
Q. What about after that?
A. After four (4) years that investment was in 1994 up to 1998,
Your Honor, and this last in the year 1999, the corporation
became insolvent, Your Honor.[55]
xxxx
ATTY. NG:
xxxx
Q. What happened when Mr. witness, how did Thermo Loans
become bankrupt?
A. The reason is that, the borrowers did not pay, sir.[56]
Accordingly, the Court of Appeals observed correctly when it succinctly
stated that, [c]learly, Reynaldo Magaling was grossly negligent in
directing the affairs of Thermo (sic) Loans without due regard to the plight
of its investors and thus should be held jointly and severally liable for the
corporate obligation of Thermo (sic) Loans to appellant Peter Ong.
On the propriety of the RTCs discharge of the preliminary attachment, we
hew to the provisions of the law and jurisprudence.
CIVPRO Rule 46-57 FULL CASES 98 of 128
A writ of preliminary attachment is a provisional remedy by virtue of which
a plaintiff or other proper party may, at the commencement of the action
or at any time thereafter, have the property of the adverse party taken
into the custody of the court as security for the satisfaction of the
judgment that may be recovered.[57] The chief purpose of the remedy of
attachment is to secure a contingent lien on defendants property until
plaintiff can, by appropriate proceedings, obtain a judgment and have
such property applied to its satisfaction, or to make some provision for
unsecured debts in cases where the means of satisfaction thereof are
liable to be removed beyond the jurisdiction, or improperly disposed of or
concealed, or otherwise placed beyond the reach of creditors. [58]
For the provisional remedy to issue, Sec. 1, Rule 57 of the Rules of Court,
as amended, provides that:
SECTION 1. Grounds upon which attachment may issue. At the
commencement of the action or at any time before entry of
judgment, a plaintiff or any proper party may have the property
of the adverse party attached as security for the satisfaction of
any judgment that may be recovered in the following cases:
(a) In an action for the recovery of a specified amount of money
or damages, other than moral and exemplary, on a cause of
action arising from law, contract, quasi-contract, delict or quasi-
delict against a party who is about to depart from the Philippines
with intent to defraud his creditors;
(b) In an action for money or property embezzled or fraudulently
misapplied or converted to his own use by a public officer, or an
officer of a corporation, or an attorney, factor, broker, agent, or
clerk, in the course of his employment as such, or by any other
person in a fiduciary capacity, or for a willful violation of duty;

(c) In an action to recover possession of property unjustly or
fraudulently taken, detained or converted, when the property, or
any part thereof, has been concealed, removed, or disposed of
to prevent its being found or taken by the applicant or an
authorized person;
(d) In an action against a party who has been guilty of a fraud in
contracting the debt or incurring the obligation upon which the
action is brought, or in the performance thereof;
(e) In an action against a party who has removed or disposed of
his property, or is about to do so, with intent to defraud his
creditors; or
(f) In an action against a party who does not reside and is not
found in the Philippines, or on whom summons may be served
by publication.
Once the writ of preliminary attachment is issued, the same rule provides
for two ways by which it can be dissolved or discharged.
First, the writ of preliminary attachment may be discharged upon a
security given, i.e., a counter-bond, viz:
SEC. 12. Discharge of attachment upon giving counter-
bound. After a writ of attachment has been enforced, the party
whose property has been attached, or the person appearing on
his behalf, may move for the discharge of the attachment wholly
or in part on the security given. The court shall, after due
notice and hearing, order the discharge of the attachment if
the movant makes a cash deposit, or files a counter-bond
executed to the attaching party with the clerk of the court
where the application is made, in an amount equal to that
fixed by the court in the order of attachment, exclusive of
costs. But if the attachment is sought to be discharged with
respect to a particular property, the counter-bond shall be equal
to the value of that property as determined by the court. In either
case, the cash deposit or the counter-bond shall secure the
payment of any judgment that the attaching party may recover
CIVPRO Rule 46-57 FULL CASES 99 of 128
in the action. A notice of the deposit shall forthwith be served on
the attaching party. Upon the discharge of an attachment in
accordance with the provisions of this section, the property
attached, or the proceeds of any sale thereof, shall be delivered
to the party making the deposit or giving the counter-bond, or to
the person appearing on his behalf, the deposit or counter-bond
aforesaid standing in place of the property so released. Should
such counter-bond for any reason be found to be, or become
insufficient, and the party furnishing the same fail to file an
additional counter-bond, the attaching party may apply for a new
order of attachment. (Emphasis supplied.)
Second, said provisional remedy must be shown to have been irregularly
or improperly issued, to wit:
SEC. 13. Discharge of attachment on other grounds. The party
whose property has been ordered attached may file a motion
with the court in which the action is pending, before or after levy
or even after the release of the attached property, for an order
to set aside or discharge the attachment on the ground that
the same was improperly or irregularly issued or enforced,
or that the bond is insufficient. If the attachment is excessive,
the discharge shall be limited to the excess. If the motion be
made on affidavits on the part of the movant but not otherwise,
the attaching party may oppose the motion by counter-affidavits
or other evidence in addition to that on which the attachment
was made. After due notice and hearing, the court shall
order the setting aside or the corresponding discharge of
the attachment if it appears that it was improperly or
irregularly issued or enforced, or that the bond is
insufficient, or that the attachment is excessive, and the
defect is not cured forthwith. (Emphasis supplied.)
In the case at bar, there is no question that no counter bond was given
by the Spouses Magaling for the discharge or dissolution of the writ of
preliminary attachment, as their position is that the provisional remedy
was irregularly or improperly issued. They sought the discharge or

dissolution of the writ based on Sec. 13, Rule 57 of the Rules of Court, as
amended. Under said provision, when the attachment is challenged for
having been illegally or improperly issued, there must be a hearing, with
the burden of proof to sustain the writ being on the attaching
creditor.[59] That hearing embraces not only the right to present evidence
but also a reasonable opportunity to know the claims of the opposing
parties and meet them. It means a fair and open hearing.[60] Herein, there
is no showing that a hearing was conducted prior to the issuance of the 19
February 1999Order of the RTC discharging or dissolving the writ of
preliminary attachment. That Ong was able to file an opposition to the
motion of the Spouses Magaling to discharge the preliminary attachment
is of no moment. The written opposition filed is not equivalent to a
hearing. The absence of a hearing before the RTC bars the discharge of
the writ of preliminary attachment for the simple reason that the discharge
or dissolution of said writ, whether under Sec. 12 or Sec. 13 of Rule 57 of
the Rules of Court, as amended, shall be granted only after due notice
and hearing.
WHEREFORE, premises considered, the instant petition
is DENIED. Accordingly, the assailed 31 August 2005 Decision and 28
June 2006 Amended Decision, both of the Court of Appeals in CA-G.R.
CV No. 70954, are hereby AFFIRMED. Costs against petitioners, heirs of
Reynaldo Magaling.
SO ORDERED.
CIVPRO Rule 46-57 FULL CASES 100 of 128
(2) Davao Light vs CA
G.R. No. 93262 December 29, 1991
DAVAO LIGHT & POWER CO., INC., petitioner,
vs.
THE COURT OF APPEALS, QUEENSLAND HOTEL or MOTEL or
QUEENSLAND TOURIST INN, and TEODORICO
ADARNA, respondents.
Breva & Breva Law Offices for petitioner.
Goc-Ong & Associates for private respondents.
NARVASA, J.:p
Subject of the appellate proceedings at bar is the decision of the Court
of Appeals in CA-G.R. Sp. No. 1967 entitled "Queensland Hotel,
Inc., etc. and Adarna v. Davao Light & Power Co., Inc.," promulgated on
May 4, 1990. 1 That decision nullified and set aside the writ of
preliminary attachment issued by the Regional Trial Court of Davao
City 2 in Civil Case No. 19513-89 on application of the plaintiff (Davao
Light & Power Co.), before the service of summons on the defendants
(herein respondents Queensland Co., Inc. and Adarna).
Following is the chronology of the undisputed material facts culled from
the Appellate Tribunal's judgment of May 4, 1990.
1. On May 2, 1989 Davao Light & Power Co., Inc. (hereafter, simply
Davao Light) filed a verified complaint for recovery of a sum of money
and damages against Queensland Hotel, etc. and Teodorico Adarna
(docketed as Civil Case No. 19513-89). The complaint contained an ex
parte application for a writ of preliminary attachment.
2. On May 3, 1989 Judge Nartatez, to whose branch the case was
assigned by raffle, issued an Order granting the ex parte application and
fixing the attachment bond at P4,600,513.37.

3. On May 11, 1989 the attachment bond having been submitted by
Davao Light, the writ of attachment issued.
4. On May 12, 1989, the summons and a copy of the complaint, as well
as the writ of attachment and a copy of the attachment bond, were
served on defendants Queensland and Adarna; and pursuant to the
writ, the sheriff seized properties belonging to the latter.
5. On September 6, 1989, defendants Queensland and Adarna filed a
motion to discharge the attachment for lack of jurisdiction to issue the
same because at the time the order of attachment was promulgated
(May 3, 1989) and the attachment writ issued (May 11, 1989), the Trial
Court had not yet acquired jurisdiction over the cause and over the
persons of the defendants.
6. On September 14, 1989, Davao Light filed an opposition to the
motion to discharge attachment.
7. On September 19, 1989, the Trial Court issued an Order denying the
motion to discharge.
This Order of September 19, 1989 was successfully challenged by
Queensland and Adarna in a special civil action of certiorari instituted by
them in the Court of Appeals. The Order was, as aforestated, annulled
by the Court of Appeals in its Decision of May 4, 1990. The Appellate
Court's decision closed with the following disposition:
. . . the Orders dated May 3, 1989 granting the issuance of a writ of
preliminary attachment, dated September 19, 1989 denying the motion
to discharge attachment; dated November 7, 1989 denying petitioner's
motion for reconsideration; as well as all other orders emanating
therefrom, specially the Writ of Attachment dated May 11, 1989 and
Notice of Levy on Preliminary Attachment dated May 11, 1989, are
hereby declared null and void and the attachment hereby ordered
DISCHARGED.
The Appellate Tribunal declared that
. . . While it is true that a prayer for the issuance of a writ of preliminary
attachment may be included m the complaint, as is usually done, it is
likewise true that the Court does not acquire jurisdiction over the person
of the defendant until he is duly summoned or voluntarily appears, and
CIVPRO Rule 46-57 FULL CASES 101 of 128
adding the phrase that it be issued "ex parte" does not confer said
jurisdiction before actual summons had been made, nor retroact
jurisdiction upon summons being made. . . .
It went on to say, citing Sievert v. Court of Appeals, 3 that "in a
proceedings in attachment," the "critical time which must be identified is
. . . when the trial court acquires authority under law to act coercively
against the defendant or his property . . .;" and that "the critical time is
the of the vesting of jurisdiction in the court over the person of the
defendant in the main case."
Reversal of this Decision of the Court of Appeals of May 4, 1990 is what
Davao Light seeks in the present appellate proceedings.
The question is whether or not a writ of preliminary attachment may
issue ex parte against a defendant before acquisition of jurisdiction of
the latter's person by service of summons or his voluntary submission to
the Court's authority.
The Court rules that the question must be answered in the affirmative
and that consequently, the petition for review will have to be granted.
It is incorrect to theorize that after an action or proceeding has been
commenced and jurisdiction over the person of the plaintiff has been
vested in the court, but before the acquisition of jurisdiction over the
person of the defendant (either by service of summons or his voluntary
submission to the court's authority), nothing can be validly done by the
plaintiff or the court. It is wrong to assume that the validity of acts done
during this period should be defendant on, or held in suspension until,
the actual obtention of jurisdiction over the defendant's person. The
obtention by the court of jurisdiction over the person of the defendant is
one thing; quite another is the acquisition of jurisdiction over the person
of the plaintiff or over the subject-matter or nature of the action, or
the res or object hereof.
An action or proceeding is commenced by the filing of the complaint or
other initiatory pleading. 4 By that act, the jurisdiction of the court over
the subject matter or nature of the action or proceeding is invoked or
called into activity; 5 and it is thus that the court acquires jurisdiction
over said subject matter or nature of the action. 6 And it is by that self-
same act of the plaintiff (or petitioner) of filing the complaint (or other
appropriate pleading) by which he signifies his submission to the
court's power and authority that jurisdiction is acquired by the court

over his person. 7 On the other hand, jurisdiction over the person of the
defendant is obtained, as above stated, by the service of summons or
other coercive process upon him or by his voluntary submission to the
authority of the court. 8
The events that follow the filing of the complaint as a matter of routine
are well known. After the complaint is filed, summons issues to the
defendant, the summons is then transmitted to the sheriff, and finally,
service of the summons is effected on the defendant in any of the ways
authorized by the Rules of Court. There is thus ordinarily some
appreciable interval of time between the day of the filing of the
complaint and the day of service of summons of the defendant. During
this period, different acts may be done by the plaintiff or by the Court,
which are unquestionable validity and propriety. Among these, for
example, are the appointment of a guardian ad litem, 9 the grant of
authority to the plaintiff to prosecute the suit as a pauper litigant, 10 the
amendment of the complaint by the plaintiff as a matter of right without
leave of court, 11 authorization by the Court of service of summons by
publication, 12 the dismissal of the action by the plaintiff on mere
notice. 13
This, too, is true with regard to the provisional remedies of preliminary
attachment, preliminary injunction, receivership or replevin. 14 They
may be validly and properly applied for and granted even before the
defendant is summoned or is heard from.
A preliminary attachment may be defined, paraphrasing the Rules of
Court, as the provisional remedy in virtue of which a plaintiff or other
party may, at the commencement of the action or at any time thereafter,
have the property of the adverse party taken into the custody of the
court as security for the satisfaction of any judgment that may be
recovered. 15 It is a remedy which is purely statutory in respect of which
the law requires a strict construction of the provisions granting
it. 16 Withal no principle, statutory or jurisprudential, prohibits its
issuance by any court before acquisition of jurisdiction over the person
of the defendant.
Rule 57 in fact speaks of the grant of the remedy "at the
commencement of the action or at any time thereafter." 17 The phase,
"at the commencement of the action," obviously refers to the date of the
filing of the complaint which, as above pointed out, is the date that
marks "the commencement of the action;" 18 and the reference plainly
is to a time before summons is served on the defendant, or even before
CIVPRO Rule 46-57 FULL CASES 102 of 128
summons issues. What the rule is saying quite clearly is that after an
action is properly commenced by the filing of the complaint and the
payment of all requisite docket and other fees the plaintiff may apply
for and obtain a writ of preliminary attachment upon fulfillment of the
pertinent requisites laid down by law, and that he may do so at any time,
either before or after service of summons on the defendant. And this
indeed, has been the immemorial practice sanctioned by the courts: for
the plaintiff or other proper party to incorporate the application for
attachment in the complaint or other appropriate pleading (counter-
claim, cross-claim, third-party claim) and for the Trial Court to issue the
writ ex-parte at the commencement of the action if it finds the
application otherwise sufficient in form and substance.
In Toledo v. Burgos, 19 this Court ruled that a hearing on a motion or
application for preliminary attachment is not generally necessary unless
otherwise directed by the Trial Court in its discretion. 20 And in Filinvest
Credit Corporation v. Relova, 21 the Court declared that "(n)othing in
the Rules of Court makes notice and hearing indispensable and
mandatory requisites for the issuance of a writ of attachment." The only
pre-requisite is that the Court be satisfied, upon consideration of "the
affidavit of the applicant or of some other person who personally knows
the facts, that a sufficient cause of action exists, that the case is one of
those mentioned in Section 1 . . . (Rule 57), that there is no other
sufficient security for the claim sought to be enforced by the action, and
that the amount due to the applicant, or the value of the property the
possession of which he is entitled to recover, is as much as the sum for
which the order (of attachment) is granted above all legal
counterclaims." 22 If the court be so satisfied, the "order of attachment
shall be granted," 23 and the writ shall issue upon the applicant's
posting of "a bond executed to the adverse party in an amount to be
fixed by the judge, not exceeding the plaintiffs claim, conditioned that
the latter will pay all the costs which may be adjudged to the adverse
party and all damages which he may sustain by reason of the
attachment, if the court shall finally adjudge that the applicant was not
entitled thereto." 24
In Mindanao Savings & Loan Association, Inc. v. Court of
Appeals, decided on April 18, 1989, 25 this Court had occasion to
emphasize the postulate that no hearing is required on an application
for preliminary attachment, with notice to the defendant, for the reason
that this "would defeat the objective of the remedy . . . (since the) time
which such a hearing would take, could be enough to enable the
defendant to abscond or dispose of his property before a writ of
attachment issues." As observed by a former member of this

Court, 26 such a procedure would warn absconding debtors-defendants
of the commencement of the suit against them and the probable seizure
of their properties, and thus give them the advantage of time to hide
their assets, leaving the creditor-plaintiff holding the proverbial empty
bag; it would place the creditor-applicant in danger of losing any security
for a favorable judgment and thus give him only an illusory victory.
Withal, ample modes of recourse against a preliminary attachment are
secured by law to the defendant. The relative ease with which a
preliminary attachment may be obtained is matched and paralleled by
the relative facility with which the attachment may legitimately be
prevented or frustrated. These modes of recourse against preliminary
attachments granted by Rule 57 were discussed at some length by the
separate opinion in Mindanao Savings & Loans Asso. Inc. v. CA., supra.
That separate opinion stressed that there are two (2) ways of
discharging an attachment: first, by the posting of a counterbond;
and second, by a showing of its improper or irregular issuance.
1.0. The submission of a counterbond is an efficacious mode of lifting
an attachment already enforced against property, or even of preventing
its enforcement altogether.
1.1. When property has already been seized under attachment, the
attachment may be discharged upon counterbond in accordance with
Section 12 of Rule 57.
Sec. 12. Discharge of attachment upon giving counterbond. At any
time after an order of attachment has been granted, the party whose
property has been attached or the person appearing in his behalf, may,
upon reasonable notice to the applicant, apply to the judge who granted
the order, or to the judge of the court in which the action is pending, for
an order discharging the attachment wholly or in part on the security
given . . . in an amount equal to the value of the property attached as
determined by the judge to secure the payment of any judgment that the
attaching creditor may recover in the action. . . .
1.2. But even before actual levy on property, seizure under attachment
may be prevented also upon counterbond. The defendant need not wait
until his property is seized before seeking the discharge of the
attachment by a counterbond. This is made possible by Section 5 of
Rule 57.
CIVPRO Rule 46-57 FULL CASES 103 of 128
Sec. 5. Manner of attaching property. The officer executing the order
shall without delay attach, to await judgment and execution in the
action, all the properties of the party against whom the order is issued in
the province, not exempt from execution, or so much thereof as may be
sufficient to satisfy the applicant's demand, unless the former makes a
deposit with the clerk or judge of the court from which the order issued,
or gives a counter-bond executed to the applicant, in an amount
sufficient to satisfy such demand besides costs, or in an amount equal
to the value of the property which is about to be attached, to secure
payment to the applicant of any judgment which he may recover in the
action. . . . (Emphasis supplied)
2.0. Aside from the filing of a counterbond, a preliminary attachment
may also be lifted or discharged on the ground that it has been
irregularly or improperly issued, in accordance with Section 13 of Rule
57. Like the first, this second mode of lifting an attachment may be
resorted to even before any property has been levied on. Indeed, it may
be availed of after property has been released from a levy on
attachment, as is made clear by said Section 13, viz.:
Sec. 13. Discharge of attachment for improper or irregular issuance.
The party whose property has been attached may also, at any time
either BEFORE or AFTER the release of the attached property, or
before any attachment shall have been actually levied, upon reasonable
notice to the attaching creditor, apply to the judge who granted the
order, or to the judge of the court in which the action is pending, for an
order to discharge the attachment on the ground that the same was
improperly or irregularly issued. If the motion be made on affidavits on
the part of the party whose property has been attached, but not
otherwise, the attaching creditor may oppose the same by counter-
affidavits or other evidence in addition to that on which the attachment
was made. . . . (Emphasis supplied)
This is so because "(a)s pointed out in Calderon v. I.A.C., 155 SCRA
531 (1987), The attachment debtor cannot be deemed to have waived
any defect in the issuance of the attachment writ by simply availing
himself of one way of discharging the attachment writ, instead of the
other. Moreover, the filing of a counterbond is a speedier way of
discharging the attachment writ maliciously sought out by the attaching
creditor instead of the other way, which, in most instances . . . would
require presentation of evidence in a fullblown trial on the merits, and
cannot easily be settled in a pending incident of the case." 27

It may not be amiss to here reiterate other related principles dealt with
in Mindanao Savings & Loans Asso. Inc. v. C.A., supra., 28 to wit:
(a) When an attachment may not be dissolved by a showing of its
irregular or improper issuance:
. . . (W)hen the preliminary attachment is issued upon a ground which is
at the same time the applicant's cause of action; e.g., "an action for
money or property embezzled or fraudulently misapplied or converted to
his own use by a public officer, or an officer of a corporation, or an
attorney, factor, broker, agent, or clerk, in the course of his employment
as such, or by any other person in a fiduciary capacity, or for a willful
violation of duty." (Sec. 1 [b], Rule 57), or "an action against a party who
has been guilty of fraud m contracting the debt or incurring the
obligation upon which the action is brought" (Sec. 1 [d], Rule 57), the
defendant is not allowed to file a motion to dissolve the attachment
under Section 13 of Rule 57 by offering to show the falsity of the factual
averments in the plaintiff's application and affidavits on which the writ
was based and consequently that the writ based thereon had been
improperly or irregularly issued (SEE Benitez v. I.A.C., 154 SCRA 41)
the reason being that the hearing on such a motion for dissolution of
the writ would be tantamount to a trial of the merits of the action. In
other words, the merits of the action would be ventilated at a mere
hearing of a motion, instead of at the regular trial. Therefore, when the
writ of attachment is of this nature, the only way it can be dissolved is by
a counterbond (G.B. Inc. v. Sanchez, 98 Phil. 886).
(b) Effect of the dissolution of a preliminary attachment on the plaintiffs
attachment bond:
. . . The dissolution of the preliminary attachment upon security given, or
a showing of its irregular or improper issuance, does not of course
operate to discharge the sureties on plaintiff's own attachment bond.
The reason is simple. That bond is "executed to the adverse party, . . .
conditioned that the . . . (applicant) will pay all the costs which may be
adjudged to the adverse party and all damages which he may sustain
by reason of the attachment, if the court shall finally adjudge that the
applicant was not entitled thereto" (SEC. 4, Rule 57). Hence, until that
determination is made, as to the applicant's entitlement to the
attachment, his bond must stand and cannot be with-drawn.
With respect to the other provisional remedies, i.e., preliminary
injunction (Rule 58), receivership (Rule 59), replevin or delivery of
CIVPRO Rule 46-57 FULL CASES 104 of 128
personal property (Rule 60), the rule is the same: they may also
issue ex parte. 29
It goes without saying that whatever be the acts done by the Court prior
to the acquisition of jurisdiction over the person of defendant, as above
indicated issuance of summons, order of attachment and writ of
attachment (and/or appointments of guardian ad litem, or grant of
authority to the plaintiff to prosecute the suit as a pauper litigant, or
amendment of the complaint by the plaintiff as a matter of right without
leave of court 30 and however valid and proper they might otherwise
be, these do not and cannot bind and affect the defendant until and
unless jurisdiction over his person is eventually obtained by the court,
either by service on him of summons or other coercive process or his
voluntary submission to the court's authority. Hence, when the sheriff or
other proper officer commences implementation of the writ of
attachment, it is essential that he serve on the defendant not only a
copy of the applicant's affidavit and attachment bond, and of the order of
attachment, as explicity required by Section 5 of Rule 57, but also the
summons addressed to said defendant as well as a copy of the
complaint and order for appointment of guardian ad litem, if any, as also
explicity directed by Section 3, Rule 14 of the Rules of Court. Service of
all such documents is indispensable not only for the acquisition of
jurisdiction over the person of the defendant, but also upon
considerations of fairness, to apprise the defendant of the complaint
against him, of the issuance of a writ of preliminary attachment and the
grounds therefor and thus accord him the opportunity to prevent
attachment of his property by the posting of a counterbond in an amount
equal to the plaintiff's claim in the complaint pursuant to Section 5 (or
Section 12), Rule 57, or dissolving it by causing dismissal of the
complaint itself on any of the grounds set forth in Rule 16, or
demonstrating the insufficiency of the applicant's affidavit or bond in
accordance with Section 13, Rule 57.
It was on account of the failure to comply with this fundamental
requirement of service of summons and the other documents above
indicated that writs of attachment issued by the Trial Court ex
parte were struck down by this Court's Third Division in two (2) cases,
namely: Sievert v. Court of Appeals, 31 and BAC Manufacturing and
Sales Corporation v. Court of Appeals, et al. 32 In contrast to the case
at bar where the summons and a copy of the complaint, as well as
the order and writ of attachment and the attachment bond were served
on the defendant in Sievert, levy on attachment was attempted
notwithstanding that only the petition for issuance of the writ of
preliminary attachment was served on the defendant, without any prior

or accompanying summons and copy of the complaint; and in BAC
Manufacturing and Sales Corporation, neither the summons nor the
order granting the preliminary attachment or the writ of attachment itself
was served on the defendant "before or at the time the levy was made."
For the guidance of all concerned, the Court reiterates and reaffirms the
proposition that writs of attachment may properly issue ex
parte provided that the Court is satisfied that the relevant requisites
therefor have been fulfilled by the applicant, although it may, in its
discretion, require prior hearing on the application with notice to the
defendant; but that levy on property pursuant to the writ thus issued
may not be validly effected unless preceded, or contemporaneously
accompanied, by service on the defendant of summons, a copy of the
complaint (and of the appointment of guardian ad litem, if any), the
application for attachment (if not incorporated in but submitted
separately from the complaint), the order of attachment, and the
plaintiff's attachment bond.
WHEREFORE, the petition is GRANTED; the challenged decision of the
Court of Appeals is hereby REVERSED, and the order and writ of
attachment issued by Hon. Milagros C. Nartatez, Presiding Judge of
Branch 8, Regional Trial Court of Davao City in Civil Case No. 19513-89
against Queensland Hotel or Motel or Queensland Tourist Inn and
Teodorico Adarna are hereby REINSTATED. Costs against private
respondents.
SO ORDERED.
CIVPRO Rule 46-57 FULL CASES 105 of 128
(3) Olib vs Pastoral
G.R. No. 81120 August 20, 1990
Sps. OLIB and ROBERTA R. OLIB, petitioners,
vs.
Hon. EDELWINA C, PASTORAL, Judge of the Regional Trial Court
of Agusan del Norte and Butuan City, Branch III and CORAZON M,
NAVIA, respondents.
Carlito B. Yebes for petitioners.
Wenceslao B. Resales for respondents.
CRUZ, J.:
This case could have been remanded to the Court of Appeals, which
has concurrent jurisdiction with this Court in petitions
for certiorari against the regional trial courts under Rule 65 of the Rules
of Court. We have decided to retain and rule on it directly, however, so
we can emphasize the important doctrines we shall here affirm.
On November 13, 1981, Corazon M. Navia sued the spouses Oscar and
Roberta Olib, petitioner herein, for dissolution of their partnership and
other reliefs, with a prayer for the issuance of a writ of a preliminary
attachment. 1 The it was granted on November 10, 1983, resulting in the
attachment of six parcels of land belonging to the petitioners, along with
stocks of merchandise in their bodega. 2 The writ was amended on
December 14, 1983, to release the merchandise. Two years later, on
May 16, 1985, the petitioners filed a motion to discharge the preliminary
attachment on the ground that the attachment bond executed for one
year from November 1983 had already lapsed. 3 This was accompanied
by a certification from the bonding company that the bond had not been
renewed and the corresponding payment for extension had not been
made . 4
On February 25,1986, Judge Miguel S. Rallos of the Regional Trial
Court of Agusan del Norte and Butuan City rendered judgment for the
petitioners and sentenced the private respondent to pay them actual,

moral and exemplary damages, plus attorney's fees and litigation
expenses. 5 On April 16, 1986, Navia perfected her appeal from the
challenged judgment, and the records of the case were elevated to the
Court of Appeals on January 25, 1988. 6
Although the trial court found in the text of the decision that the private
respondent was not entitled to the issuance of the writ of preliminary
attachment, no mention was made of the said writ in the dispositive
portion. As a result, the annotation of the preliminary attachment on the
certificates/titles of the attached lands was maintained and could not be
canceled.
On July 20, 1987, the petitioners moved for the discharge of the writ of
preliminary attachment by the respondent court on the basis of the
judgment in their favor. Navia filed an opposition, contending that as she
had perfected her appeal to the Court of Appeals, the trial court no
longer had any jurisdiction over the case. The private respondent cited
Rule 41, Section 9, of the Rules of Court, reading as follows:
When appeal deemed perfected; effect thereof. If the notice of
appeal, the appeal bond and the record on appeal have been filed in
due time, the appeal is deemed perfected upon the approval of the
record on appeal and of the appeal bond other than a cash bond, and
thereafter the trial court loses its jurisdiction over the case, except to
issue orders for the protection and preservation of the rights of the
parties which do not involve any matter litigated by the appeal, to
approve compromises offered by the parties prior to the transmittal of
the record on appeal to the appellate court, and to permit the
prosecution of pauper's appeals.
On August 24, 1987, Judge Edelwina C. Pastoral, who had succeeded
Judge Rallos denied the motion on the ground invoked in the opposition
and declared:
Settled is the rule that the trial court loses its jurisdiction over the record
and over the subject of the case once an appeal in the case has been
perfected. The exception to this rule refers to the orders of the Court to
protect and preserve the rights of the parties which do not involve any
matter litigated by appeal (Section 9, Rule 41 of the Rules of Court).
The writ of preliminary attachment was earlier granted as a security for
the satisfaction of the judgment, the latter being now the subject of the
appeal. To grant defendant's motion at this juncture is to disturb and not
to preserve the rights of the parties. It is the stand of this Court that the
CIVPRO Rule 46-57 FULL CASES 106 of 128
status quo of the parties shall be maintained for it cannot predetermine
the posture which the appellate court will adopt, either to affirm, modify
or reverse the questioned decision of this Court.
The petitioners moved for reconsideration, invoking the case of Galang
v. Endencia, 7 where this Court held:
The levy in attachment of the properties of the defendant upon the
allegation that he is about to dispose of the same to defraud his
creditors is one which is intended for the protection and preservation of
the rights of the plaintiff and which in no way involves any matter
litigated by the defendant's appeal. And as the respondent court had
jurisdiction to issue the writ of attachment, its errors, if any, committed in
the appreciation of the probative value of the facts stated in the petition
for the writ do not affect its jurisdiction but merely the exercise of such
jurisdiction. We need not belabor here the rule that what makes up
jurisdiction is the authority to act in a particular case and not the
correctness of the action taken thereon. Without such authority, as
determined by law, the court cannot act, or if it does, its actuations are
null and voId; but where the authority exists, all orders and decisions of
the court rendered in the exercise thereof and within its limits are valId
even if they were erroneous.
They argued that if the court a quo could issue a writ of attachment after
the appeal had been perfected, then it could a fortiori discharge such a
writ, especially where, as in the case at bar, the movants were the
prevailing parties.
Later, somewhat inconsistently, the petitioners also contended that
there was really no more need for an order discharging the attachment
as this followed by operation of Rule 57, Section 19, of the Rules of
Court. Such discharge was the immediate and automatic effect of any
judgment in favor of the party whose property had been attached, thus:
SEC. 19. Disposition of attached property where judgment is for party
against whom attachment is issued. If judgment be rendered against
the attaching creditor, all the proceeds of sales and money collected or
received by the sheriff, clerk, or other proper officer under the order of
attachment, and all property attached remaining in any such officer's
hands, shall be delivered to the party against whom attachment was
issued, and the order of attachment discharged.

The motion having been denied, the petitioners sought reconsideration
a second time, insisting that (a) the attachment had been automatically
discharged under Rule 57, Section 19; and (b) the attachment bond had
already lapsed for non-payment of the premiums. They were rebuffed
again. They then came before this Court, contending that the
respondent court committed grave abuse of discretion in denying their
motion.
We hold that it did not.
Attachment is defined as a provisional remedy by which the property of
an adverse party is taken into legal custody, either at the
commencement of an action or at any time thereafter, as a security for
the satisfaction of any judgment that may be recovered by the plaintiff or
any proper party. 8
It is an auxiliary remedy and cannot have an independent existence
apart from the main suit or claim instituted by the plaintiff against the
defendant. 9 Being merely ancillary to a principal proceeding, the
attachment must fail if the suit itself cannot be maintained as the
purpose of the writ can no longer be justified.
The consequence is that where the main action is appealed, the
attachment which may hive been issued as an incident of that action, is
also considered appealed and so also removed from the jurisdiction of
the court a quo. The attachment itself cannot be the subject of a
separate case independent of the principal action because the
attachment was only an incident of such action.
We held in Olsen v. Olsen: 10
The preliminary attachment is an auxiliary remedy the granting of which
lies within the sound discretion of the judge taking cognizance of the
principal case upon whose existence it depends. The order of the judge
denying a motion for the annulment of a writ of preliminary attachment,
being of an incIdental or interlocutory and auxiliary character, cannot be
the subject of an appeal independently from the principal case, because
our procedural law now in force authorizes an appeal only from a final
judgement which gives an end to the litigation. (Section 143, Act 190; 3
C.J., 549. par. 389.)
xxx xxx xxx
CIVPRO Rule 46-57 FULL CASES 107 of 128
While it is true that an order denying a motion for the annulment of a
preliminary attachment is not subject to review through an appeal
independently from the principal case, it is not constituting a final order,
yet when the writ of preliminary attachment becomes final by virtue of a
final judgment rendered in the principal case, saId writ is subject to
review jointly with the judgment rendered in the principal case through
an ordinary appeal.
It is also worth noting, as an appropriate observation on the impropriety
of the remedy employed by the petitioners in this case, that, in Jopillo v.
Court of Appeals, 11 this Court observed:
... even assuming that the trial court committed an error in denying the
motion to discharge the writ of attachment the error (if it is an error at
all) is an error in judgment which cannot be corrected through the
extraordinary remedy of certiorari but by an ordinary appeal at the
proper time.
Coming now to the argument that the attachment was automatically
lifted because of the non-payment of the premium on the attachment
bond, the Court feels it is time again to correct a common
misimpression. The rule is that the bond is not deemed extinguished by
reason alone of such non-payment. The Court made this clear in Luzon
Surety Co. v. Quebrar, 12 where it declared:
To allow the defendants-appellants to evade their liability under the
Indemnity Agreements by non-payment of the premiums would
ultimately lead to giving the administrator the power to diminish or
reduce and altogether nullify his liability under the Administrator's
Bonds. As already stated, this is contrary to the intent and purpose of
the law in provIding for the administrator's bonds for the protection of
the creditors, heirs, legatees, and the estate.
xxx xxx xxx
Lastly, in Manila Surety and FIdelity Co., Inc. v. Villarama (107 Phil.
891), it was held that "the one-year period mentioned therein refers not
to the duration or lifetime of the bond, but merely to the payment of
premiums, and, consequently, does not affect at all the effectivity or
efficacy of such bond. But such non-payment alone of the premiums for
the succeeding years ... does not necessarily extinguish or terminate
the effectivity of the counter-bond in the absence of an express

stipulation in the contract making such non- payment of premiums a
cause for the extinguishment or termination of the undertaking.
These principles are applicable to other kinds of bonds, including the
attachment bond in the case at bar. On this bond, the respondent court
correctly observed:
... a cursory examination of the bond for levy on attachment executed
between herein plaintiff Corazon M. Navia and the branch manager of
the First Continental Assurance ' Co., Inc. (Rollo, pp. 347-348) discloses
no stipulation that the surety company will terminate the bond for non-
payment of the premium. This minor matter on non-payment of
premiums of the bond pertains to the contracting parties to resolve. 13
Finally, on the correct interpretation of Rule 57, Section 19, of the Rules
of Court, we hold that the order of attachment is considered discharged
only where the judgment has already become final and executory and
not when it is still on appeal. The obvious reason is that, except in a few
specified cases, execution pending appeal is not allowed. 14
WHEREFORE, the petition is DISMISSED, with costs against the
petitioners. The petitioners may, if they see fit, move for the lifting of the
writ of preliminary attachment in the Court of Appeals, to which that
ancillary remedy is deemed elevated along with the principal action.
SO ORDERED.
CIVPRO Rule 46-57 FULL CASES 108 of 128
(4) Valmonte vs CA
[G.R. No. 108538. January 22, 1996]
LOURDES A. VALMONTE and ALFREDO D. VALMONTE, petitioners,
vs. THE HONORABLE COURT OF APPEALS, THIRD DIVISION and
ROSITA DIMALANTA, respondents.
DECISION
MENDOZA, J.:
Petitioner Lourdes A. Valmonte is a foreign resident. The question is
whether in an action for partition filed against her and her husband, who
is also her attorney, summons intended for her may be served on her
husband, who has a law office in the Philippines. The Regional Trial Court
of Manila, Branch 48, said no and refused to declare Lourdes A.
Valmonte in default, but the Court of Appeals said yes. Hence this petition
for review on certiorari.
The facts of the case are as follows:
Petitioners Lourdes A. Valmonte and Alfredo D. Valmonte are husband
and wife. They are both residents of 90222 Carkeek Drive South Seattle,
Washington, U.S.A. Petitioner Alfredo D. Valmonte, who is a member of
the Philippine bar, however, practices his profession in the Philippines,
commuting for this purpose between his residence in the state of
Washington and Manila, where he holds office at S-304 Gedisco Centre,
1564 A. Mabini, Ermita, Manila.
On March 9, 1992, private respondent Rosita Dimalanta, who is the sister
of petitioner Lourdes A. Valmonte, filed a complaint for partition of real
property and accounting of rentals against petitioners Lourdes A.
Valmonte and Alfredo D. Valmonte before the Regional Trial Court of
Manila, Branch 48. The subject of the action is a three-door apartment
located in Paco, Manila.
In her Complaint, private respondent alleged:
The plaintiff is of legal age, a widow and is at present a resident of 14823
Conway Road, Chesterfield, Missouri, U.S.A., while the defendants are

spouses, of legal age and at present residents of 90222 Carkeek Drive,
South Seattle, Washington, U.S.A., but, for purposes of this complaint
may be served with summons at Gedisco Center, Unit 304, 1564 A.
Mabini St., Ermita, Manila where defendant Alfredo D. Valmonte as
defendant Lourdes Arreola Valmontes spouse holds office and where he
can be found.
Apparently, the foregoing averments were made on the basis of a letter
previously sent by petitioner Lourdes A. Valmonte to private respondents
counsel
in which, in regard to the partition of the property in question, she referred
private respondents counsel to her husband as the party to whom all
communications intended for her should be sent. The letter reads:
July 4, 1991
Dear Atty. Balgos:
This is in response to your letter, dated 20 June 1991, which I received
on 3 July 1991. Please address all communications to my lawyer, Atty.
Alfredo D. Valmonte, whose address, telephone and fax numbers
appear below.
c/o Prime Marine
Gedisco Center, Unit 304
1564 A. Mabini, Ermita
Metro Manila
Telephone: 521-1736
Fax: 21-2095
Service of summons was then made upon petitioner Alfredo D. Valmonte,
who at the time, was at his office in Manila. Petitioner Alfredo D. Valmonte
accepted the summons, insofar as he was concerned, but refused to
accept the summons for his wife, Lourdes A. Valmonte, on the ground
that he was not authorized to accept the process on her behalf.
Accordingly the process server left without leaving a copy of the
summons and complaint for petitioner Lourdes A. Valmonte.
Petitioner Alfredo D. Valmonte thereafter filed his Answer with
Counterclaim. Petitioner Lourdes A. Valmonte, however, did not file her
Answer. For this reason private respondent moved to declare her in
default. Petitioner Alfredo D. Valmonte entered a special appearance in
behalf of his wife and opposed the private respondents motion.
CIVPRO Rule 46-57 FULL CASES 109 of 128
In its Order dated July 3, 1992, the trial court, denied private respondents
motion to declare petitioner Lourdes A. Valmonte in default. A motion for
reconsideration was similarly denied on September 23, 1992.
Whereupon, private respondent filed a petition for certiorari, prohibition
and mandamus with the Court of Appeals.
On December 29, 1992, the Court of Appeals rendered a decision
granting the petition and declaring Lourdes A. Valmonte in default. A copy
of the appellate courts decision was received by petitioner Alfredo D.
Valmonte on January 15, 1993 at his Manila office and on January 21,
1993 in Seattle, Washington. Hence, this petition.
The issue at bar is whether in light of the facts set forth above, petitioner
Lourdes A. Valmonte was validly served with summons. In holding that
she had been, the Court of Appeals stated:[1]
[I]n her above-quoted reply, Mrs. Valmonte clearly and unequivocally
directed the aforementioned counsel of Dimalanta to address all
communications (evidently referring to her controversy with her sister
Mrs. Dimalanta over the Paco property, now the subject of the instant
case) to her lawyer who happens also to be her husband. Such directive
was made without any qualification just as was her choice/designation
of her husband Atty. Valmonte as her lawyer likewise made without any
qualification or reservation. Any disclaimer therefore on the part of Atty.
Valmonte as to his being his wifes attorney (at least with regard to the
dispute vis-a-vis [sic] the Paco property) would appear to be feeble or
trifling, if not incredible.
This view is bolstered by Atty. Valmontes subsequent alleged special
appearance made on behalf of his wife. Whereas Mrs. Valmonte had
manifestly authorized her husband to serve as her lawyer relative to her
dispute with her sister over the Paco property and to receive all
communications regarding the same and subsequently to appear on her
behalf by way of a so-called special appearance, she would
nonetheless now insist that the same husband would nonetheless had
absolutely no authority to receive summons on her behalf. In effect, she
is asserting that representation by her lawyer (who is also her husband)
as far as the Paco property controversy is concerned, should only be
made by him when such representation would be favorable to her but
not otherwise. It would obviously be inequitable for this Court to allow
private respondent Lourdes A. Valmonte to hold that her husband has
the authority to represent her when an advantage is to be obtained by
her and to deny such authority when it would turn out to be her
disadvantage. If this be allowed, Our Rules of Court, instead of being an

instrument to promote justice would be made use of to thwart or
frustrate the same.
xxx xxx xxx
Turning to another point, it would not do for Us to overlook the fact that
the disputed summons was served not upon just an ordinary lawyer of
private respondent Lourdes A. Valmonte, but upon her lawyer husband.
But that is not all, the same lawyer/husband happens to be also her co-
defendant in the instant case which involves real property which,
according to her lawyer/husband/ co-defendant, belongs to the conjugal
partnership of the defendants (the spouses Valmonte). It is highly
inconceivable and certainly it would be contrary to human nature for the
lawyer/husband/co-defendant to keep to himself the fact that they (the
spouses Valmonte) had been sued with regard to a property which he
claims to be conjugal. Parenthetically, there is nothing in the records of
the case before Us regarding any manifestation by private respondent
Lourdes A. Valmonte about her lack of knowledge about the case
instituted against her and her lawyer/husband/co-defendant by her
sister Rosita.
PREMISES CONSIDERED, the instant petition for certiorari, prohibition
and mandamus is given due course. This Court hereby Resolves to
nullify the orders of the court a quo dated July 3, 1992 and September
23, 1992 and further declares private respondent Lourdes Arreola
Valmonte as having been properly served with summons.
Petitioners assail the aforequoted decision, alleging that the Court of
Appeals erred (1) in refusing to apply the provisions of Rule 14, 17 of the
Revised Rules of Court and applying instead Rule 14, 8 when the fact is
that petitioner Lourdes A. Valmonte is a nonresident defendant; and (2)
because even if Rule 14, 8 is the applicable provision, there was no valid
substituted service as there was no strict compliance with the requirement
by leaving a copy of the summons and complaint with petitioner Alfredo
D. Valmonte. Private respondent, upon the other hand, asserts that
petitioners are invoking a technicality and that strict adherence to the
rules would only result in a useless ceremony.
We hold that there was no valid service of process on Lourdes A.
Valmonte.
To provide perspective, it will be helpful to determine first the nature of
the action filed against petitioners Lourdes A. Valmonte and Alfredo D.
Valmonte by private respondent, whether it is an action in personam, in
CIVPRO Rule 46-57 FULL CASES 110 of 128
rem or quasi in rem. This is because the rules on service of summons
embodied in Rule 14 apply according to whether an action is one or the
other of these actions.
In an action in personam, personal service of summons or, if this is not
possible and he cannot be personally served, substituted service, as
provided in Rule 14, 7-8[2] is essential for the acquisition by the court of
jurisdiction over the person of a defendant who does not voluntarily
submit himself to the authority of the court. [3] If defendant cannot be
served with summons because he is temporarily abroad, but otherwise
he is a Philippine resident, service of summons may, by leave of court,
be made by publication.[4] Otherwise stated, a resident defendant in an
action in personam, who cannot be personally served with summons,
may be summoned either by means of substituted service in accordance
with Rule 14, 8 or by publication as provided in 17 and 18 of the same
Rule.[5]
In all of these cases, it should be noted, defendant must be a resident of
the Philippines, otherwise an action in personam cannot be brought
because jurisdiction over his person is essential to make a binding
decision.
On the other hand, if the action is in rem or quasi in rem, jurisdiction over
the person of the defendant is not essential for giving the court jurisdiction
so long as the court acquires jurisdiction over the res. If the defendant is
a nonresident and he is not found in the country, summons may be served
extraterritorially in accordance with Rule 14, 17, which provides:
17. Extraterritorial service. - When the defendant does not reside and is
not found in the Philippines and the action affects the personal status of
the plaintiff or relates to, or the subject of which is, property within the
Philippines, in which the defendant has or claims a lien or interest,
actual or contingent, or in which the relief demanded consists, wholly or
in part, in excluding the defendant from any interest therein, or the
property of the defendant has been attached within the Philippines,
service may, by leave of court, be effected out of the Philippines by
personal service as under Section 7; or by publication in a newspaper of
general circulation in such places and for such time as the court may
order, in which case a copy of the summons and order of the court shall
be sent by registered mail to the last known address of the defendant,
or in any other manner the court may deem sufficient. Any order
granting such leave shall specify a reasonable time, which shall not be
less than sixty (60) days after notice, within which the defendant must
answer.

In such cases, what gives the court jurisdiction in an action in rem or quasi
in rem is that it has jurisdiction over the res, i.e. the personal status of the
plaintiff who is domiciled in the Philippines or the property litigated or
attached. Service of summons in the manner provided in 17 is not for the
purpose of vesting it with jurisdiction but for complying with the
requirements of fair play or due process, so that he will be informed of the
pendency of the action against him and the possibility that property in the
Philippines belonging to him or in which he has an interest may be
subjected to a judgment in favor of the plaintiff and he can thereby take
steps to protect his interest if he is so minded.[6]
Applying the foregoing rules to the case at bar, private respondents
action, which is for partition and accounting under Rule 69, is in the nature
of an action quasi in rem. Such an action is essentially for the purpose of
affecting the defendants interest in a specific property and not to render
a judgment against him. As explained in the leading case of Banco
Espaol Filipino v. Palanca :[7]
[An action quasi in rem is] an action which while not strictly speaking an
action in rem partakes of that nature and is substantially such. . . . The
action quasi in rem differs from the true action in rem in the
circumstance that in the former an individual is named as defendant and
the purpose of the proceeding is to subject his interest therein to the
obligation or lien burdening the property. All proceedings having for their
sole object the sale or other disposition of the property of the defendant,
whether by attachment, foreclosure, or other form of remedy, are in a
general way thus designated. The judgment entered in these
proceedings is conclusive only between the parties.
As petitioner Lourdes A. Valmonte is a nonresident who is not found in
the Philippines, service of summons on her must be in accordance with
Rule 14, 17. Such service, to be effective outside the Philippines, must
be made either (1) by personal service; (2) by publication in a newspaper
of general circulation in such places and for such time as the court may
order, in which case a copy of the summons and order of the court should
be sent by registered mail to the last known address of the defendant; or
(3) in any other manner which the court may deem sufficient.
Since in the case at bar, the service of summons upon petitioner Lourdes
A. Valmonte was not done by means of any of the first two modes, the
question is whether the service on her attorney, petitioner Alfredo D.
Valmonte, can be justified under the third mode, namely, in any . . .
manner the court may deem sufficient.
CIVPRO Rule 46-57 FULL CASES 111 of 128
We hold it cannot. This mode of service, like the first two, must be made
outside the Philippines, such as through the Philippine Embassy in the
foreign country where the defendant resides.[8] Moreover, there are
several reasons why the service of summons on Atty. Alfredo D.
Valmonte cannot be considered a valid service of summons on petitioner
Lourdes A. Valmonte. In the first place, service of summons on petitioner
Alfredo D. Valmonte was not made upon the order of the court as required
by Rule 14, 17 and certainly was not a mode deemed sufficient by the
court which in fact refused to consider the service to be valid and on that
basis declare petitioner Lourdes A. Valmonte in default for her failure to
file an answer.
In the second place, service in the attempted manner on petitioner was
not made upon prior leave of the trial court as required also in Rule 14,
17. As provided in 19, such leave must be applied for by motion in writing,
supported by affidavit of the plaintiff or some person on his behalf and
setting forth the grounds for the application.
Finally, and most importantly, because there was no order granting such
leave, petitioner Lourdes A. Valmonte was not given ample time to file
her Answer which, according to the rules, shall be not less than sixty (60)
days after notice. It must be noted that the period to file an Answer in an
action against a resident defendant differs from the period given in an
action filed against a nonresident defendant who is not found in
the Philippines. In the former, the period is fifteen (15) days from service
of summons, while in the latter, it is at least sixty (60) days from notice.
Strict compliance with these requirements alone can assure observance
of due process. That is why in one case,[9] although the Court considered
publication in the Philippines of the summons (against the contention that
it should be made in the foreign state where defendant was residing)
sufficient, nonetheless the service was considered insufficient because
no copy of the summons was sent to the last known correct address in
the Philippines.
Private respondent cites the ruling in De Leon v. Hontanosas, 67 SCRA
458,462-463 (1975), in which it was held that service of summons upon
the defendants husband was binding on her. But the ruling in that case is
justified because summons were served upon defendants husband in
their conjugal home in Cebu City and the wife was only temporarily
absent, having gone to Dumaguete City for a vacation. The action was
for collection of a sum of money. In accordance with Rule 14, 8,
substituted service could be made on any person of sufficient discretion
in the dwelling place of the defendant, and certainly defendants husband,
who was there, was competent to receive the summons on her behalf. In
any event, it appears that defendant in that case submitted to the

jurisdiction of the court by instructing her husband to move for the
dissolution of the writ of attachment issued in that case.
On the other hand, in the case of Gemperle v. Schenker,[10] it was held
that service on the wife of a nonresident defendant was found sufficient
because the defendant had appointed his wife as his attorney-in-fact. It
was held that although defendant Paul Schenker was a Swiss citizen and
resident of Switzerland, service of summons upon his wife Helen
Schenker who was in the Philippines was sufficient because she was her
husbands representative and attorney-in-fact in a civil case, which he had
earlier filed against William Gemperle. In fact Gemperles action was for
damages arising from allegedly derogatory statements contained in the
complaint filed in the first case. As this Court said, i]n other words, Mrs.
Schenker had authority to sue, and had actually sued, on behalf of her
husband, so that she was, also, empowered to represent him in suits filed
against him, particularly in a case, like the one at bar, which is a
consequence of the action brought by her on his behalf.[11] Indeed, if
instead of filing an independent action Gemperle filed a counterclaim in
the action brought by Mr. Schenker against him, there would have been
no doubt that the trial court could have acquired jurisdiction over Mr.
Schenker through his agent and attorney-in-fact, Mrs. Schenker.
In contrast, in the case at bar, petitioner Lourdes A. Valmonte did not
appoint her husband as her attorney-in-fact. Although she wrote private
respondent s attorney that all communications intended for her should be
addressed to her husband who is also her lawyer at the latters address
in Manila, no power of attorney to receive summons for her can be
inferred therefrom. In fact the letter was written seven months before the
filing of this case below, and it appears that it was written in connection
with the negotiations between her and her sister, respondent Rosita
Dimalanta, concerning the partition of the property in question. As is usual
in negotiations of this kind, the exchange of correspondence was carried
on by counsel for the parties. But the authority given to petitioners
husband in these negotiations certainly cannot be construed as also
including an authority to represent her in any litigation.
For the foregoing reasons, we hold that there was no valid service on
petitioner Lourdes A. Valmonte in this case.
WHEREFORE, the decision appealed from is REVERSED and the
orders dated July 3, 1992 and September 23, 1992 of the Regional Trial
Court of Manila, Branch 48 are REINSTATED.
SO ORDERED.
CIVPRO Rule 46-57 FULL CASES 112 of 128
(5) Traders Royal Bank vs IAC
G.R. No. L-66321 October 31 1984
TRADERS ROYAL BANK, petitioner,
vs.
THE HON INTERMEDIATE APPELATE COURT, HON., JESUS R. DE
VEGA, AS PRESIDING JUDGE OF THE RETIONAL TRIA COURT,
THIRD JUDICIAL REGION, BRANCH IX, MALOLOS, Bulacan, LA
TONDEA, INC., VICTORINO P. EVANGELISTA IN HIS CAPACITY
AS Ex-Officio Provincial Sheriff of Bulacan, and/or any and all his
deputies, respondents.
ESCOLIN, J.:+.wph!1
The issue posed for resolution in this petition involves the authority of a
Regional Trial Court to issue, at the instance of a third-party claimant,
an injunction enjoining the sale of property previously levied upon by the
sheriff pursuant to a writ of attachment issued by another Regional Trial
Court.
The antecedent facts, undisputed by the parties, are set forth in the
decision of the respondent Intermediate Appellate Court
thus: t.hqw
Sometime on March 18, 1983 herein petitioner Traders Royal Bank
instituted a suit against the Remco Alcohol Distillery, Inc. REMCO
before the Regional Trial Court, Branch CX, Pasay City, in Civil Case
No. 9894-P, for the recovery of the sum of Two Million Three Hundred
Eighty Two Thousand Two Hundred Fifty Eight & 71/100 Pesos
(P2,382,258.71) obtaining therein a writ of pre attachment directed
against the assets and properties of Remco Alcohol Distillery, Inc.
Pursuant to said writ of attachment issued in Civil Case No. 9894-P,
Deputy Sheriff Edilberto Santiago levied among others about 4,600
barrels of aged or rectified alcohol found within the premises of said
Remco Distillery Inc. A third party claim was filed with the Deputy Sheriff
by herein respondent La Tondea, Inc. on April 1, 1982 claiming
ownership over said attached property (Complaint, p. 17, Rollo).

On May 12, 1982, private respondent La Tondea, Inc. filed a
complaint-in- intervention in said Civil Case No. 9894, alleging among
others, that 'it had made advances to Remco Distillery Inc. which
totalled P3M and which remains outstanding as of date' and that the
'attached properties are owned by La Tondea, Inc.' (Annex '3' to
petitioner's Motion to Dismiss dated July 27, 1983 Annex "C" to the
petition).
Subsequently, private respondent La Tondea, Inc., without the
foregoing complaint-in- intervention having been passed upon by the
Regional Trial Court, Branch CX, (Pasay City), filed in Civil Case No.
9894-P a "Motion to Withdraw" dated October 8, 1983, praying that it be
allowed to withdraw alcohol and molasses from the Remco Distillery
Plant (Annex 4 to Petitioner's Motion to Dismiss-Annex C, Petition) and
which motion was granted per order of the Pasay Court dated January
27, 1983, authorizing respondent La Tondea, Inc. to withdraw alcohol
and molasses from the Remco Distillery Plant at Calumpit, Bulacan
(Annex "I" to Reply to Plaintiff's Opposition dated August 2, 1983
Annex E to the Petition).
The foregoing order dated January 27, 1983 was however reconsidered
by the Pasay Court by virtue of its order dated February 18, 1983
(Annex A Petition, p. 15) declaring that the alcohol "which has not
been withdrawn remains in the ownership of defendant Remco Alcohol
Distillery Corporation" and which order likewise denied La Tondea's
motion to intervene.
A motion for reconsideration of the foregoing order of February 18, 1983
was filed by respondent La Tondea, Inc., on March 8, 1983 reiterating
its request for leave to withdraw alcohol from the Remco Distillery Plant,
and praying further that the "portion of the order dated February 18,
1983" declaring Remco to be the owner of subject alcohol, "be
reconsidered and striken off said order". This motion has not been
resolved (p. 4, Petition) up to July 18, 1983 when a manifestation that it
was withdrawing its motion for reconsideration was filed by respondent
La Tondea Inc.
On July 19, 1983, private respondent La Tondea Inc. instituted before
the Regional Trial Court, Branch IX, Malolos, Bulacan presided over by
Respondent Judge, Civil Case No. 7003-M, in which it asserted its claim
of ownership over the properties attached in Civil Case No. 9894-P, and
likewise prayed for the issuance of a writ of Preliminary Mandatory and
Prohibitory Injunction (Annex B,id ).
CIVPRO Rule 46-57 FULL CASES 113 of 128
A Motion to Dismiss and/or Opposition to the application for a writ of
Preliminary Injunction by herein respondent La Tondea Inc. was filed
by petitioner on July 27, 1983 (Annex C, p. 42, Id.)
This was followed by respondent La Tondea's opposition to petitioner's
Motion to Dismiss on August 1, 1983 (Annex D, p. 67, Id.).
A reply on the part of petitioner was made on the foregoing opposition
on August 3, 1983 (p. 92, Id.).
Hearings were held on respondent La Tondea's application for
injunctive relief and on petitioner's motion to dismiss on August 8, 19 &
23, 1983 (p. 5, Id.).
Thereafter, the parties filed their respective memoranda (Annex F, p.
104; Annex G, p. 113, Rollo).
Subsequently, the questioned order dated September 28, 1983 was
issued by the respondent Judge declaring respondent La Tondea Inc.
to be the owner of the disputed alcohol, and granting the latter's
application for injunctive relief (Annex H-1, Id.).
On October 6, 1983, respondent Sheriff Victorino Evangelista issued on
Edilberto A. Santiago Deputy Sheriff of Pasay City the corresponding
writ of preliminary injunction (Annex N, p. 127, Id.).
This was followed by an order issued by the Pasay Court dated October
11, 1983 in Civil Case No. 9894-P requiring Deputy Sheriff Edilberto A.
Santiago to enforce the writ of preliminary attachment previously issued
by said court, by preventing respondent sheriff and respondent La
Tondea, Inc. from withdrawing or removing the disputed alcohol from
the Remco ageing warehouse at Calumpit, Bulacan, and requiring the
aforenamed respondents to explain and show cause why they should
not be cited for contempt for withdrawing or removing said attached
alcohol belonging to Remco, from the latter's ageing warehouse at
Calumpit, Bulacan (Annex F, p. 141, Petition).
Thereafter, petitioner Traders Royal Bank filed with the Intermediate
Appellate Court a petition for certiorari and prohibition, with application
for a writ of preliminary injunction, to annul and set aside the Order
dated September 28, 1983 of the respondent Regional Trial Court of
Malolos, Bulacan, Branch IX, issued in Civil Case No. 7003-M; to

dissolve the writ of preliminary injunction dated October 6, 1983 issued
pursuant to said order; to prohibit respondent Judge from taking
cognizance of and assuming jurisdiction over Civil Case No. 7003-M,
and to compel private respondent La Tondea, Inc., and Ex- Oficio
Provincial Sheriff of Bulacan to return the disputed alcohol to their
original location at Remco's ageing warehouse at Calumpit, Bulacan.
In its decision, the Intermediate Appellate Court dismissed the petition
for lack of legal and factual basis, holding that the respondent Judge did
not abuse his discretion in issuing the Order of September 28, 1983 and
the writ of preliminary injunction dated October 3, 1983. citing the
decision in Detective and Protective Bureau vs. Cloribel (26 SCRA 255).
Petitioner moved for reconsideration, but the respondent court denied
the same in its resolution dated February 2, 1984.
Hence, this petition.
Petitioner contends that respondent Judge of the Regional T- trial Court
of Bulacan acted without jurisdiction in entertaining Civil Case No. 7003-
M, in authorizing the issuance of a writ of preliminary mandatory and
prohibitory injunction, which enjoined the sheriff of Pasay City from
interferring with La Tondea's right to enter and withdraw the barrels of
alcohol and molasses from Remco's ageing warehouse and from
conducting the sale thereof, said merchandise having been previously
levied upon pursuant to the attachment writ issued by the Regional Trial
Court of Pasay City in Civil Case No. 9894-P. It is submitted that such
order of the Bulacan Court constitutes undue and illegal interference
with the exercise by the Pasay Court of its coordinate and co-equal
authority on matters properly brought before it.
We find the petition devoid of merit.
There is no question that the action filed by private respondent La
Tondea, Inc., as third-party claimant, before the Regional Trial Court of
Bulacan in Civil Case No. 7003-M wherein it claimed ownership over the
property levied upon by Pasay City Deputy Sheriff Edilberto Santiago is
sanctioned by Section 14, Rule 57 of the Rules of Court. Thus
t.hqw to deliver it to the plaintiff-claimant or desist from seizing it. It follows
If property taken be claimed by any person other than the party against
whom attachment had been issued or his agent, and such person
makes an affidavit of his title thereto or right to the possession thereof,
stating the grounds of such right or title, and serves such affidavit upon
CIVPRO Rule 46-57 FULL CASES 114 of 128
the officer while the latter has possession of the property, and a copy
thereof upon the attaching creditor, the officer shall not be bound to
keep the property under the attachment, unless the attaching creditor or
his agent, on demand of said officer, secures aim against such claim by
a bond in a sum not greater than the value of the property attached. In
case of disagreement as to such value, the same shall be decided by
the court issuing the writ of attachment. The officer shall not be liable for
damages, for the taking or keeping of such property, to any such third-
party claimant, unless such a claim is so made and the action upon the
bond brought within one hundred and twenty (120) days from the date
of the filing of said bond. But nothing herein contained shall prevent
such third person from vindicating his claim to the property by proper
action ...
The foregoing rule explicitly sets forth the remedy that may be availed of
by a person who claims to be the owner of property levied upon by
attachment, viz: to lodge a third- party claim with the sheriff, and if the
attaching creditor posts an indemnity bond in favor of the sheriff, to file a
separate and independent action to vindicate his claim (Abiera vs. Court
of Appeals, 45 SCRA 314). And this precisely was the remedy resorted
to by private respondent La Tondea when it filed the vindicatory action
before the Bulacan Court.
The case before us does not really present an issue of first impression.
In Manila Herald Publishing Co., Inc. vs. Ramos, 1 this Court resolved a
similar question in this wise: t.hqw
The objection that at once suggests itself to entertaining in Case No.
12263 the motion to discharge the preliminary attachment levied in
Case No. 11531 is that by so doing one judge would interfere with
another judge's actuations. The objection is superficial and will not bear
analysis.
It has been seen that a separate action by the third party who claims to
be the owner of the property attached is appropriate. If this is so, it must
be admitted that the judge trying such action may render judgment
ordering the sheriff of whoever has in possession the attached property
further that the court may make an interlocutory order, upon the filing of
such bond as may be necessary, to release the property pending final
adjudication of the title. Jurisdiction over an action includes jurisdiction
over an interlocutory matter incidental to the cause and deemed
 CIVPRO Rule 46-57 FULL CASES 115 of 128

necessary to preserve the subject matter of the suit or protect the right to the property even if he failed to appeal from the order denying
parties' interests. This is self-evident. his original third-party claim. 4

xxx xxx xxx WHEREFORE, the instant petition is hereby dismissed and the decision
of the Intermediate Appellate Court in AC-G.R. No. SP-01860 is
It is true of course that property in custody of the law can not be affirmed, with costs against petitioner Traders Royal Bank.
interfered without the permission of the proper court, and property
legally attached is property in custodia legis. But for the reason just SO ORDERED.1wph1.t
stated, this rule is confined to cases where the property belongs to the
defendant or one in which the defendant has proprietary interest. When
the sheriff acting beyond the bounds of his office seizes a stranger's
property, the rule does not apply and interference with his custody is not
interference with another court's order of attachment.

It may be argued that the third-party claim may be unfounded; but so

may it be meritorious, for that matter. Speculations are however beside
the point. The title is the very issue in the case for the recovery of
property or the dissolution of the attachment, and pending final decision,
the court may enter any interlocutory order calculated to preserve the
property in litigation and protect the parties' rights and interests.

Generally, the rule that no court has the power to interfere by injunction
with the judgments or decrees of a concurrent or coordinate jurisdiction
having equal power to grant the injunctive relief sought by injunction, is
applied in cases where no third-party claimant is involved, in order to
prevent one court from nullifying the judgment or process of another
court of the same rank or category, a power which devolves upon the
proper appellate court . 2 The purpose of the rule is to avoid conflict of
power between different courts of coordinate jurisdiction and to bring
about a harmonious and smooth functioning of their proceedings.

It is further argued that since private respondent La Tondea, Inc., had

voluntarily submitted itself to the jurisdiction of the Pasay Court by filing
a motion to intervene in Civil Case No. 9894-P, the denial or dismissal
thereof constitutes a bar to the present action filed before the Bulacan
Court.

We cannot sustain the petitioner's view. Suffice it to state that

intervention as a means of protecting the third-party claimant's right in
an attachment proceeding is not exclusive but cumulative and
suppletory to the right to bring an independent suit. 3 The denial or
dismissal of a third-party claim to property levied upon cannot operate to
bar a subsequent independent action by the claimant to establish his

RULE 65: Certiorari, Prohibition, and Mandamus
(1) Day vs RTC Zamboanga City
VICTORINO E. DAY, Petitioner, v. THE REGIONAL TRIAL COURT
OF ZAMBOANGA CITY, BRANCH XIII, Presided by Hon. Judge
Carlito A. Eisma, and GO CHU, Respondents.
Castillo & Castillo Law Offices for Petitioner.
Cerilles, Murillo, Navarro & Go for Private Respondent.
DECISION
PARAS, J.:
This is a petition to review the decision of the Regional Trial Court of
Zamboanga City, Branch XIII dated July 8, 1986 setting aside the
decision of the Municipal Trial Court of Zamboanga City, Branch II in
Civil Case No. 3717 (169-11).
The following, in brief, are the facts of the case:chanrob1es virtual 1aw
library
Herein petitioner Victorino Day is the registered owner of a parcel of
land covered by Original Certificate of Title No. P-2667 and situated at
Tomas Claudio St., Zamboanga City. Private respondent Go Chu is the
owner of a building constructed on the said lot occupying an area of 101
square meters.chanrobles lawlibrary : rednad
Private respondent was asked by petitioner to peacefully vacate and
remove that portion of the formers building standing on the latters lot.
Due to private respondents refusal to vacate the premises, on April 17,
1982, petitioner instituted a formal complaint against respondent with
the Office of the Barangay Chairman, Zone I, Zamboanga City. As no
amicable settlement could be reached in the case, the Barangay
Chairman, on April 20, 1982, issued a certification that conciliation of
the dispute at the barangay level had failed. (MTC Decision, Annex "A",
Petition, pp. 1-2; Rollo, p. 25.)
CIVPRO Rule 46-57 FULL CASES 116 of 128
The dispute was continuously discussed by the parties through 1982,
1983, and 1984. On October 16, 1984, petitioner agreed to accept
P1,000.00 from private respondent as rental for the use of his lot from
1979 to December 1984. As petitioner had received the P1,000.00 as
compensation for respondents use of his land, respondent claimed the
existence of a lease contract between them. Respondent Go Chu,
however, failed to prove the existence of a formal or even verbal
contract of lease.
On January 15, 1985, petitioner again made another demand on private
respondent to remove the building. Because of private respondents
adamant and continued refusal to vacate the disputed lot, petitioner filed
on March 25, 1985 an action for unlawful detainer with application for a
writ of preliminary mandatory injunction. Apparently, petitioner Day did
not use the former Barangay Certification in commencing the said suit
against private Respondent. On April 15, 1986, the trial court rendered a
decision in favor of petitioner Day, the dispositive portion reading as
follows:jgc:chanrobles.com.ph
"WHEREFORE, in view of the foregoing findings of facts judgment is
hereby rendered in favor of the plaintiff and against the defendant to
remove that portion of his building which stands on the 101 square
meters over plaintiffs property; to pay plaintiff the amount of P950.00
monthly compensation from January 1986 until defendant vacates the
premises; to pay attorneys fees in the sum of P5,000.00 and to pay the
costs of the action. Defendants compulsory counterclaims are hereby
ordered dismissed." (Rollo, p. 27)
On April 23, 1986, without having first filed a motion for reconsideration,
private respondent Go Chu filed an original action for certiorari with
respondent court, against Judge Cabato and petitioner Victorino Day.
Pending hearing of the application for preliminary injunction, respondent
court issued a temporary restraining order in the case.
On May 12, 1986, petitioner filed his Answer and Opposition to the
Petition, to which private respondent filed a reply.
At the hearing of the application for preliminary injunction, the parties
waived further oral arguments and submitted the case based on their
pleadings and documents.chanrobles virtualawlibrary
chanrobles.com:chanrobles.com.ph
On May 27, 1986, respondent court issued an order resolving all the
matters and issues in the petition in favor of herein petitioner Day, that
the petition on its main is "lacking in merit except that there are still

certain matters which the respondent court would like to resolve after
hearing thereon." (Rollo, p. 3). The application for preliminary injunction
was likewise denied and the hearing of the main petition was set on
June 24, 1986. At the said hearing, respondent court gave the parties
opportunity to adduce additional arguments on the merits of the case.
They, however, submitted the case for decision without further
arguments, relying therefore on the pleadings and documents on
record.
On July 8, 1986, however, respondent court issued another order
granting the petition for certiorari and setting aside the decision of Judge
Cabato of the Municipal Trial Court. In connection therewith, the parties
were directed to submit their dispute before the Lupong Tagapayapa
pursuant to the requirements of PD 1508. Petitioners motion for
reconsideration was denied on June 25, 1987.
Hence, this petition.
The following issues are presented for the courts
determination:chanrob1es virtual 1aw library
1) Whether or not the respondent court may modify or reverse its own
order (of May 27, 1986) after the lapse of 15 days from its issuance;
2) Whether or not B.P. 129 allows the plaintiff in an unlawful detainer
case to apply for a writ of preliminary injunction;
3) Whether or not prior conciliation proceedings pursuant to P.D. 1508
is applicable to petitioners suit in the Municipal Trial Court;
4) Whether or not respondent court may entertain the petition for review
on certiorari when the proper remedy is ordinary appeal;
5) Whether or not respondent court, in a petition for certiorari, may
entertain procedural questions or questions of facts or substance
already decided by the lower court; and
6) Whether or not respondent court may grant a Writ of Certiorari on
grounds other than those specified under Section 1, Rule 65 of the
Rules of Court.
On the first issue, petitioner maintains that the respondent court has no
jurisdiction to reverse its own order after the lapse of 15 days from its
issuance because the May 27, 1986 order was a final order, all issues in
the main petition having been resolved therein. Said controversial order
CIVPRO Rule 46-57 FULL CASES 117 of 128
reads as follows:chanrobles law library
"Although the primary objective of this order is the determination of
whether or not to issue a writ of preliminary injunction in the instant
case, yet in the consideration thereof, the Court finds the main petition
for certiorari as it appears on the pleadings to be LACKING IN MERIT .
Hence, it follows that where the petitioner is not entitled to the primary
relief demanded, he cannot likewise be entitled to the ancillary remedy
of injunction, because injunction is not to protect contingent or future
right or enforce an abstract right (EMILLA VS. RADO, 23 SCRA 1983)
or to protect a right not in esse. (DIZON VS. YATCO, 13 SCRA 167).
However, there are STILL CERTAIN MATTERS in the main petition that
can only be completely resolved after a hearing thereon." (Emphasis
ours) And the Petition was set for hearing on June 24, 1986." (Rollo, p.
4-A)
According to petitioner, since the respondent court resolved no new or
other matter in its July 8, 1986 order, the May 27, 1986 order should be
considered as already a final one insofar as the issues resolved therein
are concerned. To quote the petitioner, "this phrase certain matters
referred to by the respondent court did not touch or dwell on certain
matters not yet passed upon by it, but reversed itself on the same
matters already resolved by it earlier after the lapse of the 15-day period
without any motion for reconsideration ever asked by herein private
respondent Go Chu." (Petition, p. 4)
Private respondent, on the other hand argues that the order of May 27,
1986 was merely an interlocutory order that did not finally dispose of the
action and that the dispositive portion thereof dealt only with the
preliminary injunction incident; that the denial of the issuance of the writ
of preliminary injunction and the setting of further hearing on the main
petition was the highlight of the said order and that since the order was
interlocutory in nature, nothing precluded respondent judge from further
hearing the case after the issuance of the May 27, 1986 order and
deciding it on its merits on July 8, 1986.
We find the contention of the petitioner meritorious. In the case of de
Ocampo v. Republic, L-19533, Oct. 31, 1963, 9 SCRA 440, this Court
said. "The test to ascertain whether an order is interlocutory or final is:
does it leave something to be done in the court with respect to the
merits of the case? If it does, it is interlocutory; if it does not, it is final."
In the instant case, it is evident that the respondent court resolved no
new or other matter in the order of July 8, 1986. Such being the case, it
necessarily follows that the order of May 27, 1986 should be deemed as
a final order in so far as the issues resolved therein are concerned. An

order which decides an issue or issues in a complaint is final and
appealable, although the other issue or issues have not been resolved,
if the latter issues are distinct and separate from the others. Thus, the
respondent court was without jurisdiction to modify or reverse the earlier
order after the expiration of fifteen (15) days from and after receipt
thereof by the parties, considering that there was no motion for
reconsideration filed by then private respondent Go Chu.
As regards the second issue, We agree with petitioner that Section 33
of B.P. 129 allows the plaintiff in an unlawful detainer action to apply for
a writ of preliminary injunction. With the advent of B.P. 129, Art. 539 of
the New Civil Code, Sec. 88 of the Judiciary Act of 1948, and Sec. 3,
Rule 70 of the Rules of Court have been substantially modified. B.P.
129 provides: "provided the main action is within its jurisdiction, an
inferior court can appoint a receiver and it has jurisdiction to issue a writ
of preliminary injunction in either forcible entry or unlawful detainer
cases." (Regalado, Remedial Law Compendium, Second Revised
Edition, p. 33). "Under the present law, an inferior court has jurisdiction
to grant provisional remedies in proper cases. These proper cases
would be:chanrob1es virtual 1aw library
1) Preliminary attachment under Rule 57, provided the principal action is
within its jurisdiction such as an action for recovery of personal property
valued at not more than P20,000.00; an action for recovery of a sum of
money not exceeding P20,000.00; an action of forcible entry and
unlawful detainer.
2) Preliminary injunction under Rule 58 in both forcible entry and
unlawful detainer also in cases mentioned in the preceding paragraph."
(Dean Jose Y. Feria, Phil. Legal Studies, Series No. 1, the Judiciary
Reorganization Act of 1980, 1981 edition, pp. 43-44.)
The third issue centers on the applicability of prior conciliation
proceedings pursuant to P.D. 1508, section 6 of which reads as
follows:jgc:chanrobles.com.ph
"Sec. 6. Conciliation, pre-condition to filing of complaint. No
complaint, petition, action or proceeding involving any matter within the
authority of the Lupon as provided in Sec. 2 hereof shall be filed or
instituted in court or any other government office for adjudication unless
there has been a confrontation of the parties before the Lupon
Chairman or the Pangkat and no conciliation or settlement has been
reached as certified by the Lupon Secretary or the Pangkat Secretary,
attested by the Lupon or Pangkat Chairman, or unless the settlement
has been repudiated. However, the parties may go directly to court in
CIVPRO Rule 46-57 FULL CASES 118 of 128
the following cases:chanrob1es virtual 1aw library
(1) where the accused is under detention;
(2) where a person has otherwise been deprived of personal liberty
calling for habeas corpus proceedings;
(3) actions coupled with provisional remedies such as preliminary
injunction, attachment, delivery of personal property and support
pendente lite; and
(4) where the action may otherwise be barred by the Statute of
Limitations.
It is clear from the foregoing that prior conciliation proceedings as
mandated by P.D. 1508 were inapplicable to the petitioners suit before
the Municipal Trial Court of Zamboanga City, the action being for
ejectment with application for a writ of preliminary mandatory injunction.
P.D. 1508 provides that an action "coupled with provisional remedies
such as preliminary injunction," etc. does not require conciliation
proceedings as a pre-condition for filing an action in court. The case of
petitioner being an exception to the requirement of prior conciliation by
P.D. 1508, it was not necessary for petitioner to first secure the
necessary certification to file action from the proper barangay court.
Even assuming that petitioners complaint for ejectment in the Municipal
Trial Court did not fall within the exceptions enumerated in Sec. 6 of
P.D. 1508, the lower court in its decision ruled that the April 1982
certification to file action issued by the proper Barangay Court was
sufficient compliance with P.D. 1508.
As to the fourth issue, private respondent is of the firm belief that the
action he filed before the respondent Regional Trial Court was both an
original action for certiorari and a petition for certiorari as a mode of
appeal. We disagree. Applying Sec. 22 of B.P. 129 (governing law in the
matter of appeals from the inferior courts to the Regional Trial Courts),
decisions of inferior courts may be elevated to the Regional Trial Court
only by ordinary appeal, that is, by filing a Notice of Appeal with the
inferior court. The said proviso does not admit of any other mode of
elevating decisions of inferior courts to the Regional Trial Court
presumably to carry out the purpose of B.P. 129 which is to simplify
judicial procedure to effect a speedy administration of
justice.chanrobles.com.ph : virtual law library
Anent the fifth issue, We hold that respondent court has no jurisdiction
in a certiorari case to entertain procedural questions or questions of

facts or substance already passed upon by the lower court. The
barangay certificate of 1982 was admitted and found to be sufficient by
the Municipal Trial Court, Branch II, Zamboanga City, after considering
the circumstances surrounding its issuance. This is a procedural
question or a question of fact which cannot be raised or corrected in
a certiorari case, but should be assigned as error and reviewed in the
appeal properly taken from the decision rendered by the trial court on
the merits of the case. (Lamagan v. de la Cruz, 40 SCRA 101). It should
be remembered that except for the lower courts admission in evidence
of the Barangay Certification of 1982 and the said courts appreciations
of the said Certification as sufficient compliance with P.D. 1508, the
respondent courts order (RTC), which is herein sought to be nullified,
resolved all the matters raised by private respondent in his petition,
against the latter. Admissibility of evidence is a matter that is addressed
to the sound discretion of the trial court (the lower court in this case).
Such being the case, no potent reason existed to justify respondent
courts substitution of the lower courts judgment with its own judgment.
"Errors in the appreciation of evidence may not be reviewed
by certiorari because they do not involve any jurisdictional question."
(Mujer v. CFI of Laguna, 35 O.G. 1384; Abig v. Constantino, L-12460,
May 31, 1961)
Further, in an original action for certiorari, questions of fact cannot be
raised much less passed upon by the respondent court. Thus, it has
been ruled that:jgc:chanrobles.com.ph
"Questions of fact cannot be raised in an original action for certiorari.
Only established or admitted facts can be considered." (Rubio v. Reyes,
Et Al., L-24581, May 27, 1968)
It is therefore clear that respondent court erred in reversing the lower
courts findings regarding the sufficiency of the Barangay Certificate of
1982. It was an error for the respondent court to rule upon a question of
fact or procedural question already decided by the lower court.
Finally, the question on whether or not the respondent court can grant a
writ of certiorari on grounds other than those specified under Sec. 1,
Rule 65 of the Rules of Court, Our answer is in the negative.
In an original action for certiorari under Sec. 1, Rule 65 of the Rules of
Court, the grounds for the issuance of the Writ of Certiorari are as
follows, to wit:chanrobles virtualawlibrary
chanrobles.com:chanrobles.com.ph
CIVPRO Rule 46-57 FULL CASES 119 of 128
(a) Lack of jurisdiction;
(b) Grave abuse of discretion; and
(c) When the court acts without or in excess of jurisdiction.
We have consistently adhered to the principle that only errors of
jurisdiction are correctible by certiorari. As early as in the case of
Herrera v. Barreto, 25 Phil. 245, 271, the Supreme Court ruled: "The
office of the Writ of Certiorari has been reduced to the correction of
defects of jurisdiction solely and cannot legally be used for any other
purpose."cralaw virtua1aw library
Clearly, the only grounds which may serve as the basis for the
respondent court to raise the writ of certiorari are lack of jurisdiction or
grave abuse of discretion by the inferior court or that the said inferior
court acted without or in excess of jurisdiction in its appreciation of the
barangay certification as constituting sufficient compliance with P.D.
1508.
In the ejectment suit filed by petitioner against private respondent, the
lower court undoubtedly acquired jurisdiction over the subject matter
and over the person of then defendant (now private respondent) by the
filing of the complaint and service of summons upon then defendant
(now private respondent) and the filing by the latter of his answer. Thus,
it cannot be said that the lower court had no jurisdiction to render the
decision set aside by respondent court. Assuming that the lower court
committed a mistake on the merits of the case, it was in the exercise of
such jurisdiction. The error, if at all, is at most one of judgment and not
of jurisdiction, which cannot be the object of a petition for certiorari. The
proper remedy in such case was appeal. Errors in the application of the
law and the appreciation of evidence committed by a court after it has
acquired jurisdiction over a case, are correctible only by appeal (So Chu
v. Nepomuceno, 29 Phil. 208; Valencia v. Victoriano, 50 O.G. 5815,
Dec. 1954 (CA) citing Herrera v. Barreto, Et Al., 26 Phil.
245).chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph
Neither can it be said that the lower court committed a grave abuse of
discretion or exceeded its jurisdiction when it appreciated the barangay
certification as sufficient compliance with P.D. 1508. In the petition
for certiorari filed by private respondent before the respondent court, he
did not allege that the lower courts decision was outside or in excess of
its jurisdiction, or was issued in grave abuse of discretion. Private
respondent merely alleged that the lower court "erroneously"
appreciated facts and evidence, issued interlocutory orders, and
 CIVPRO Rule 46-57 FULL CASES 120 of 128

appreciated the issues. He also challenged the soundness of the

decision. These do not constitute excess of jurisdiction or grave abuse
of discretion. It must be remembered that there is "excess of (2) Romys Freight Service vs Castro
jurisdiction" where the court has jurisdiction but has transcended the
same or acted without any statutory authority. (Soriano v. del Rosario, ROMYS FREIGHT SERVICE, G.R. No. 141637
55 Phil. 924). There is "grave abuse of discretion" where there is a represented by Roman G. Cruz,
capricious and whimsical exercise of judgment amounting to lack of Petitioner,
jurisdiction or where the power is exercised in an arbitrary and despotic Present:
manner by reasons of passion or personal hostility, and it is so patent
and gross as to amount to an invasion of positive duty or to a virtual PUNO, J., Chairperson,
refusal to perform the duty enjoined or to act at all in contemplation of - v e r s u s - SANDOVAL-GUTIERREZ,
law. (Tavera-Luna, Inc. v. Nable, 67 Phil. 341) We find no such grave CORONA,
abuse of discretion committed by the lower court in appreciating the AZCUNA and
barangay certification to be sufficient compliance with P.D. 1508. In fact, GARCIA, JJ.
the respondent court categorically ruled that there was no grave abuse JESUS C. CASTRO,
of discretion or excess of jurisdiction on the part of the lower court when DOMINADOR VELORIA and
it held that:jgc:chanrobles.com.ph the FIRST DIVISION of the
COURT OF APPEALS,
"The foregoing recital and discussions of each particular questioned act
of the respondent judge would plainly show that no grave abuse of
discretion has been committed by him. If any, they could have been Respondents. Promulgated:
assigned as errors in an ordinary appeal, which to the mind of the Court
should have been the remedy resorted to by the herein petitioner." June 8, 2006
(Paragraph 2, Page 5 of the Order of the Respondent Court dated May
27, 1986.) (Rollo, p. 142) x------------------------------------------x

WHEREFORE, finding merit in the appeal of petitioner, the assailed

DECISION
order of the respondent court is hereby SET ASIDE and the order of the
Municipal Trial Court of Zamboanga City, Branch II in Civil Case No.
CORONA, J.:
3717 (169-11) is hereby REINSTATED.

SO ORDERED.

Melencio-Herrera, Padilla, Sarmiento and Regalado, JJ., concur. This petition for certiorari under Rule 65 of the Rules of Court assails the

September 9, 1999 decision[1] and January 18, 2000 resolution of the

First Division of the Court of Appeals in CA-G.R. SP No. 51268.

This case originated from a complaint for illegal dismissal filed jointly by

private respondents Jesus C. Castro

 CIVPRO Rule 46-57 FULL CASES 121 of 128

and Dominador Veloriaagainst petitioner Romys Freight Service, 1995, he figured in an accident. The overheated water coming from the

represented by Roman G. Cruz, its owner/sole proprietor, with the radiator of a car he was repairing spurted onto his face, burning it. He

Regional Arbitration Branch of the National Labor Relations Commission was forced to absent himself from work to undergo recuperation. During

(NLRC) in Baguio City. his absence, he received several letters from Cruz. One letter required

him to explain the loss of several tools, another ordered him to pay his
Private respondent Castro was hired by petitioner as a mechanic in April
loan and still another required him to explain his absences. He was later
1975. He was promoted to supervisor in 1986. On December 31, 1994,
charged for qualified theft of the missing tools. [2] Because of petitioners
he suffered a stroke. On his doctors advice, he took a leave of absence
acts against him, Veloria joined Castro in filing a case for illegal
from work. Pending recovery, he extended his leave several times. While
constructive dismissal against petitioner.
on leave, however, petitioner Roman G. Cruz sent him several letters first

urging him to return to work. The succeeding ones assumed the nature For its part, petitioner denied that private respondents were dismissed

of show cause letters requiring him to explain why he should not be from their employment, asserting that private respondents abandoned

disciplined for his prolonged absence. Cruz also filed complaints their work.

for estafa and qualified theft against him. Because of these, Castro was
On September 15, 1997, executive labor arbiter Jesselito Latoja ruled
constrained to file a case for illegal dismissal against petitioner on the
that petitioner was guilty of illegal dismissal and ordered it to pay private
ground that Cruzs acts constituted constructive dismissal.
respondents the total amount of P352,944.90, representing 13th month

On the other hand, private respondent Veloria was hired by petitioner in pay, backwages, separation pay, premium pay for work rendered on rest

1977 as a carpenter. After several years, he was promoted to mechanic days and holidays, and attorneys fees.

and, in 1993, as senior mechanic. Sometime in the last week of February

 CIVPRO Rule 46-57 FULL CASES 122 of 128

Private respondents moved for the clarification of the decision, On September 9, 1999, the appellate court granted the petition. It ruled

specifically on the award of backwages in their favor. While the decision

that, since the findings of the labor arbiter were supported by substantial
discussed their entitlement to backwages, it was not included in the
evidence, it should be respected by appellate tribunals. Petitioner failed
computation of the judgment award in the dispositive portion of the
to overcome the burden of proving the existence of just cause for
decision. The labor arbiter, in his October 1, 1997 order, recognized his

inadvertence and granted the motion. He amended the decision and dismissing private respondents, hence, it was guilty of illegal dismissal.

increased the award to P985,529.20 to include backwages. The CA rejected petitioners contention that private respondents

abandoned their work. It held that their failure to report for work was for
Petitioner appealed to the NLRC which, in its October 29, 1998 decision,

reversed and set aside the labor arbiters ruling. It found private justifiable reasons and that they had no intention to sever their

respondents guilty of abandonment of work and dismissed their complaint employment. As a consequence, the CA reversed and set aside the

for illegal dismissal against petitioner.[3]

decision of the NLRC and reinstated the September 15, 1997 decision of

Aggrieved, private respondents filed a petition for certiorari under Rule 65 the labor arbiter as modified by the latters October 1, 1997 order.

of the Rules of Court with the Court of Appeals (CA). They ascribed grave
Petitioner moved for the reconsideration of the appellate courts decision
abuse of discretion amounting to lack or excess of jurisdiction on the part
but the same was denied. Hence, this petition.
of the NLRC for not finding that they were constructively dismissed by

petitioner. Petitioner faults the CA for reversing the decision of the NLRC. It asserts

that the petition for certiorari of private respondents should have been

dismissed outright for failure to file a motion for reconsideration with the
 CIVPRO Rule 46-57 FULL CASES 123 of 128

NLRC before filing the petition for certiorari with the CA. Petitioner also of the case even if no motion for reconsideration had been filed by private

maintains that the CA erred when it adopted the findings of the labor respondents with the NLRC.

arbiter that private respondents were constructively dismissed, instead of

The other issues raised by petitioner, i.e., whether private respondents
the contrary finding of the NLRC. It insists that the appellate court erred
were illegally dismissed (as the CA and the labor arbiter ruled) or
when it awarded 13th month pay, backwages, separation pay and
abandoned their work (as the NLRC held) and whether they were entitled
attorneys fees to Castro and 13th month pay, backwages, premium pay
to backwages, unpaid benefits, separation pay and attorneys fees, are
for work rendered on rest days and holidays, and attorneys fees toVeloria.
not proper subjects of a petition for certiorari. They involve an inquiry into

We affirm the CA decision. factual matters.

As a general rule, a motion for reconsideration is needed before a petition The Supreme Court is not a trier of facts, more so in the consideration of

for certiorari under Rule 65 can be resorted to.[4] However, there are well the extraordinary writ of certiorari where neither questions of fact nor of

recognized exceptions to this rule.[5] Private respondents petition for law are entertained, but only questions of lack or excess of jurisdiction or

certiorari before the CA was covered by the exceptions. grave abuse of discretion.[7] The sole object of the writ is to correct errors

of jurisdiction or grave abuse of discretion. [8] The phrase grave abuse of

The issue raised in the certiorari proceeding before the appellate
discretion has a precise meaning in law, denoting abuse of discretion too
court, i.e., whether private respondents were constructively dismissed
patent and gross as to amount to an evasion of a positive duty, or a virtual
without just cause, was also the very same issue raised before the NLRC
refusal to perform the duty enjoined or act in contemplation of law, or
and resolved by it. Moreover, the employer-employee relationship
where the power is exercised in an arbitrary and despotic manner by
between petitioner and private respondents was impressed with public
reason of passion and personal hostility.[9] It does not encompass an
interest.[6] Thus, it was proper for the appellate court to take cognizance
 CIVPRO Rule 46-57 FULL CASES 124 of 128

error of law.[10] Nor does it include a mistake in the appreciation of the terminating the employment of private respondents and that private

contending parties respective evidence or the evaluation of their relative respondents did not abandon their work were supported by substantial

weight.[11] evidence. Moreover, petitioners obstinate insistence on the alleged

serious misconduct (i.e., the commission of estafa and/or qualified theft)

The Court cannot be tasked to go over the proofs presented by the parties
of private respondents belies his claim of abandonment as the ground for
and analyze, assess and weigh them all over again to ascertain if the trial
the dismissal of private respondents. Rather, it strengthens the finding of
court or quasi-judicial agency and the appellate court were correct in
petitioners discrimination, insensibility and antagonism towards private
according superior credit to this or that piece of evidence of one party or
respondents which gave no choice to private respondents except to
the other.[12] The sole office of a writ of certiorari is the correction of errors
forego their employment.
of jurisdiction including the commission of grave abuse of discretion
WHEREFORE, the petition is hereby DISMISSED.
amounting to lack of jurisdiction, and does not include the review of public
Costs against petitioner.
respondents evaluation of the evidence and the factual findings based
SO ORDERED.
thereon.[13] Therefore, the present petition for certiorari fails insofar as it

questions the affirmation by the CA of the factual finding of the labor

arbiter that private respondents were illegally dismissed, entitling them to

an award of backwages, unpaid benefits, separation pay and attorneys

fees.

Nevertheless, a perusal of the CA decision shows that the findings that

petitioner failed to overcome the burden of proving just cause for


(3) Fajardo vs Bautista
G.R. Nos. 102193-97 May 10, 1994
MS. EMILY YU FAJARDO, SPOUSES SALVADOR and ENGRACIA
GIANAN, RENE and BEVERLY RODELAS, SPOUSES JULIAN and
TERESITA CUIZON, MS. TERESITA RIVERA and RICARDO
VILLANUEVA, petitioners,
vs.
HON. ODILON I. BAUTISTA, in his capacity as the Presiding Judge
of the Regional Trial Court, Branch 37, Calamba, Laguna,
SPOUSES ISABELO and PURITA JAREO, RUBEN HABACON, and
CESAR S. REYES, in his capacity as the Register of Deeds,
Calamba, Laguna, respondents.
Encanto, Mabugat & Associates for petitioners.
Narciso M. Habacon for respondents Ruben Habacon and Cesar S.
Reyes.
DAVIDE, JR., J.:
This is a special civil action for certiorari which seeks to annul the 4
September 1991 Order of the respondent Judge dismissing the
complaints of the petitioners for lack of jurisdiction, and the 20
September 1991 Order denying the petitioners' motion for
reconsideration. The respondent Judge had ruled that jurisdiction over
the cases pertained to the Housing and Land Use Regulatory Board
(HLRB) and not the Regional Trial Court. The petitioners asseverate
that the RTC has jurisdiction over the cases.
The pleadings of the parties disclose the following facts:
Private respondents Isabelo Jareo and Purita Jareo (hereinafter
JAREOS) are the owners and developers of a subdivision known as
the Calamba Central Compound. On various dates, they as SELLERS,
and the petitioners as BUYERS signed separate contracts, each
designated as a CONTRACT TO SELL, under which, for the
CIVPRO Rule 46-57 FULL CASES 125 of 128
considerations therein stated, they bound themselves to sell to the
petitioners the lots subject thereof, and after the latter shall have paid
the purchase price and interest, to execute in favor of the petitioners the
corresponding deeds of transfer of title, free from any lien or
encumbrance except those expressly provided for in the Contract to
Sell. The Contracts to Sell are herein described:
Petitioners-Buyers Lot subject Date of execution of
of contract to sell contract to sell
1) Spouses Julian a) Lot No. 9, Block
and Teresita No. 3, covered by
Cuizon TCT No. T-66231 25 January 1979 1
b) Lot No. 11, Block
No. 1. 2 24 April 1979 3
2) Teresita Rivera Lot No. 12, BLock 5 December 1985 4
and Ricardo No. 3, covered by
Villanueva TCT No. 7-62229
5
3) Spouses Rene and Lot No. 14, Block 17 December 1985
Beverly Rodelas No. 3, covered by
TCT No. T-66231
4) Spouses Salvador Lot No. 9, Block 17 March 1988 6
and Engracia No. 2, covered by
Gianan TCT No. T-66273
On the other hand, private respondent Fernando Realty and
Development Corporation (hereinafter FERNANDO) as SELLER, and
petitioner Emily Yu Fajardo as BUYER signed on 22 February 1985 a
CONTRACT TO SELL 7under which for the considerations therein
stated, FERNANDO agreed to sell to Fajardo Lot No. 10, Block No. 3,
also located at the Calamba Central Compound Subdivision, 8 and upon
full payment of the agreed price and interest thereon, to execute a deed
of absolute sale in favor of Fajardo.
It appears, however, that on 18 October 1986, the JAREOS sold the
aforesaid lots subject of the different contracts to sell to private
respondent Ruben Habacon (hereinafter HABACON) under separate
documents denominated as "Kasulatan ng Bilihan." 9 On 18 February

1991, HABACON caused the cancellation of the certificates of title
covering the said lots and the issuance of new ones in his name. 10
When the petitioners learned of these, they filed on 21 June 1991
separate complaints with the court a quo for annulment of the sales in
favor of HABACON and of the new certificates of title issued to him, for
reinstatement of the certificates of title cancelled by those issued to
HABACON, and for accounting and damages. They prayed in their
complaints for a judgment
(a) declaring the "Kasulatan na Bilihan" executed in favor of HABACON
as an equitable mortgage; (b) annulling the new certificates of title
issued to HABACON and reinstating those previously cancelled by the
new certificates of title; (c) ordering HABACON and the JAREOS to
determine the unpaid balance of the purchase price under the Contracts
to Sell, to accept payments thereof, and to execute the deeds of
absolute sale in favor of the petitioners; and (e) ordering the defendants
to pay actual and exemplary damages and attorney's fees specified
therein, as well as the costs.
The complaints were docketed as Civil Cases Nos. 1683-91-C, 11 1684-
91-C, 12 1685-91-C, 13 1686-91-C, 14 and 1688-91-C, 15 and were
assigned to Branch 37 of the Regional Trial Court of Calamba.
On 9 August 1991, HABACON filed a motion to dismiss the complaints
on the ground that the plaintiffs (petitioners herein) have no legal
capacity to sue because they were not parties to the "BILIHAN." 16
In its Order of 12 August 1991, 17 the trial court, through the respondent
Judge, directed the plaintiffs to show cause why their complaints should
not be dismissed for lack of jurisdiction pursuant to P.D. No. 957
(Subdivision and Condominium Buyers' Protective Decree), as
amended by P.D. No. 1344, and the doctrine laid down by this Court
in Solid Homes, Inc. vs. Payawal. 18
In their compliance 19 with the show cause order, the petitioners
maintained that it is the trial court, and not the HLRB, which has
jurisdiction over the complaint. They contend that Solid Homes, Inc. vs.
Payawal is inapplicable because in their cases: (1) the title of the
developers, the JAREOS, had already passed to a third person,
HABACON; (2) their action is for the annulment of the title of a third
person; (3) HABACON is not a developer; and (4) Section 19(1) of B.P.
Blg. 129 vests upon the Regional Trial Court the jurisdiction to hear and
decide all civil actions which involve title to or possession of any real
CIVPRO Rule 46-57 FULL CASES 126 of 128
property or any interest therein, except actions for unlawful detainer and
forcible entry.
In its Order of 4 September 1991, 20 the trial court dismissed the
aforesaid civil cases for lack of jurisdiction. It held:
The Court does not agree with the plaintiffs. PD No. 957 as amended by
P.D. No. 1344 gives the National Housing Authority now the Human
Settlement Regulatory Commission (HSRC) 21 inclusive [sic] jurisdiction
to hear and, decide cases of "unsound real estate business practices"
(Sec. 1(a), P.D. 1344). This authority is broad enough to include all
kinds of real estate transactions involving subdivision lot or
condominium, wherein either the subdivision lot or condominium buyer,
project owner, developer, dealer, broker or salesman is involved.
The petitioners filed a motion for the reconsideration of the order, but
the trial court denied this in its Order of 20 September 1991. 22 It ruled
that while HABACON may not be the developer, the JAREOS are, and
by selling the same lots to HABACON after they were previously sold to
different parties, the JAREOS may have committed an "unsound
business practice." Moreover, it ruled that Section 19(2) of B.P. Blg.
129, being a general law, should yield to P.D. No. 957, as amended by
P.D. No. 1344, which is a special law.
On 24 December 1991, the petitioners filed the instant special civil
action for certiorari to annul the 4 September 1991 and 20 September
1991 Orders of the trial court on the ground that the judge acted with
grave abuse of discretion amounting to lack of jurisdiction in dismissing
their complaints and that they have no other plain, speedy, and
adequate remedy in the ordinary course of law. The petitioners maintain
that the trial court has jurisdiction over their complaints.
In the Resolution of 18 November 1991, 23 we required the respondents
to comment on the petition. Private respondent HABACON filed his
comment and opposition on 27 August 1992 24 while public respondent
Cesar S. Reyes filed his comment on 24 August 1993. 25 Both
respondents rely on our pronouncement in Solid Homes, Inc. vs.
Payawal and echo the ruling of the trial court in the questioned orders.
The copy of the resolution sent to the JAREOS was returned unserved
and in the Resolution of 21 July 1993, we considered it as served on
them. 26 As required, the petitioners filed a reply to the comment. 27 On
8 November 1993, we resolved to give due course to the petition and
required the parties to submit their memoranda, which the petitioners

complied with on 29 December 1993 28 and the private respondents, on
28 March 1994. 29
The core issue in this case is whether the trial court gravely abused its
discretion in dismissing, for lack of jurisdiction, the complaints filed by
the petitioners. Before resolving this issue, a procedural matter must
first be considered. Generally, an order of dismissal, whether right or
wrong, is a
final order, and hence a proper subject of appeal, not certiorari. 30 The
remedies of appeal and certiorari are mutually exclusive and not
alternative or
successive. 31 Accordingly, although the special civil action
of certiorari is not proper when an ordinary appeal is available, it may be
granted where it is shown that the appeal would be inadequate, slow,
insufficient, and will not promptly relieve a party from the injurious
effects of the order complained of, or where appeal is inadequate and
ineffectual. 32 Nevertheless, certiorari cannot be a substitute for the lost
or lapsed remedy of appeal, 33 where such loss is occasioned by the
petitioner's own neglect or error in the choice of remedies. 34
The petitioners admit that they received a copy of the trial court's order
dismissing their complaints on 4 October 1991. 35 The instant petition
was filed on 24 October 1991 or beyond the 15-day period to appeal
from the order. The petitioners have not even attempted to explain why
they were unable to appeal from the challenged order within the
reglementary period. This civil action then was resorted to as a
substitute for the lost or lapsed remedy of appeal, and since none of the
exceptions to the rigid rule barring substitution of remedies was alleged
to exist in this petition, or even indicated by the pleadings, this petition
must be dismissed.
Even if we were to accept this petition in the broader interest of justice,
it must still fail for the trial court correctly ruled that it has no jurisdiction
over the subject matter in Civil Cases Nos. 1683-91-C, 1684-91-C,
1685-91-C, 1686- 91-C, and 1688-91-C. Jurisdiction thereon was
originally vested in the National Housing Authority (NHA) under P.D. No.
957, as amended by P.D. No. 1344. Under E.O. No. 648 of 7 February
1981, this jurisdiction was transferred to the Human Settlements
Regulatory Commission (HSRC) which, pursuant to E.O. No. 90 of 17
December 1986, was renamed as the Housing and Land Use
Regulatory Board.
CIVPRO Rule 46-57 FULL CASES 127 of 128
We agree with the trial court that the complaints do involve unsound real
estate business practices on the part of the owners and developers of
the subdivision who entered into Contracts to Sell with the petitioners.
By virtue of Section 1 of P.D. No. 1344 and our decision in Solid
Homes, Inc. vs. Payawal, the NHA, now HLRB, has the exclusive
jurisdiction to hear and decide the matter. In addition to involving
unsound real estate business practices, the complaints also involve
specific performance of the contractual and statutory obligations of the
owners or developers of the subdivision. The claims for annulment of
the "Kasulatan ng Bilihan" in favor of HABACON and the certificates of
title issued to him and for damages are merely incidental.
Section 1 of P.D. No. 1344, promulgated on 2 April 1978, provides as
follows:
Sec. 1. In the exercise of its functions to regulate the real estate trade
and business and in addition to its powers provided for in Presidential
Decree No. 957, the National Housing Authority shall have exclusive
jurisdiction to hear and decide cases of the following nature:
A. Unsound real estate business practices;
B. Claims involving refund and any other claims filed by subdivision lot
or condominium unit buyer against the project owner, developer, dealer,
broker or salesman; and
C. Cases involving specific performance of contractual and statutory
obligations filed by buyers of subdivision lots or condominium units
against the owner, developer, dealer, broker or salesman. (Italics
supplied)
Conformably with this section, we had earlier upheld the jurisdiction of
the NHA to determine the rights of the parties under a contract to sell a
subdivision lot in Antipolo Reality Corp. vs. National Housing
Authority 36 and struck down the exercise of jurisdiction by the Regional
Trial Court over a case instituted by a lot buyer for delivery of title
against the subdivision owner in Solid Homes, Inc. vs. Payawal. We
also sustained the jurisdiction of the HLRB over complaints for (a) the
refund of reservation fees for the purchase of a subdivision lot, 37 (b)
specific performance filed by a lot buyer against the seller of a
subdivision lot, 38 (c) annulment of the mortgage constituted by the
project owner without the buyer's consent, the mortgage foreclosure
sale, and the condominium certificate of title issued to the highest bidder
 CIVPRO Rule 46-57 FULL CASES 128 of 128

at the said foreclosure sale, 39 and (d) collection of the balance of the
unpaid purchase price of a subdivision lot filed by the developer of a
subdivision against the lot
buyer. 40

In CT Torres Enterprises, Inc. vs. Hibionada, 41 we further declared that

incidental claims for damages may be resolved by the HLRB. Thus:

It is clear from Section 1(c) of the above quoted PD No. 1344 that the
complaint for specific performance with damages filed by Diongon with
the Regional Trial Court of Negros Occidental comes under the
jurisdiction of the Housing and Land Use Regulatory Board. Diongon is
a buyer of a subdivision lot seeking specific performance of the seller's
obligation to deliver to him the corresponding certificate of title.

The argument that only courts of justice can adjudicate claims resoluble
under the provisions of the Civil Code is out of step with the
fast-changing times. There are hundreds of administrative bodies now
performing this function by virtue of a valid authorization from the
legislature. This quasi-judicial function, as it is called, is exercised by
them as an incident of the principal power entrusted to them of
regulating certain activities falling under their particular expertise.

In the Solid Homes case for example the Court affirmed the
competence of the Housing and Land use Regulatory Board to award
damages although this is an essentially judicial power exercisable
ordinarily only by the courts of justice. This departure from the traditional
allocation of governmental powers is justified by expediency, or the
need of the government to respond swiftly and competently to the
pressing problems of the modern world.

Accordingly, the trial court committed no grave abuse of discretion in

dismissing the complaints of the petitioners.

WHEREFORE, the due course Resolution of 8 November 1993 is

RECALLED and, for lack of merit, the instant petition is DISMISSED
with costs against the petitioners.

SO ORDERED.