Chapter VI – PROCEEDINGS AFTER SERVICE OF SUMMONS AND DISMISSAL OF ACTION

1. Virata VS. Sandiganbayan

SECOND DIVISION

[G.R. No. 114331. May 27, 1997]

CESAR E. A. VIRATA, petitioner, vs. THE HONORABLE SANDIGANBAYAN and THE REPUBLIC OF THE
PHILIPPINES, respondents.

DECISION

TORRES, JR., J.:

In times past, when due process was more of a myth - empty accusations have had its day. In a more enlightened age, a sage was heard to say -
Strike me if you must, but hear me first! We have come a long way, indeed, for in our time one who is required to answer for an alleged wrong
must at least know what is it all about.

This is the case before Us.

In this case, petitioner Cesar E. A. Virata (Virata, for brevity) is one of the defendants in Civil Case No. 0035, entitled Republic of the Philippines
versus Benjamin (Kokoy) Romualdez, et. al.. The case, which was filed by the Presidential Commission on Good Government in behalf of the
Republic of the Philippines (Republic, for brevity) against fifty three persons (53)[1]including Virata, involves the recovery of ill-gotten
wealth amassed by the defendants during the twenty year reign of former President Ferdinand Marcos.

The complaint against the defendants was amended three times. The last amended complaint filed with the Sandiganbayan, hereafter known as
the expanded Second Amended Complaint, states, inter alia, the following relevant allegations against petitioner Virata:

V. SPECIFIC AVERMENTS OF DEFENDANTS ILLEGAL ACTS

xxx.

14. Defendants Benjamin (Kokoy) Romualdez and Juliette Gomez Romualdez, acting by themselves and/or in unlawful concert with Defendants
Ferdinand E. Marcos and Imelda R. Marcos, and taking undue advantage of their relationship, influence and connection with the latter Defendant
spouses, engaged in devises, schemes and strategems to unjustly enrich themselves at the expense of plaintiff and the Filipino people, among
others:

xxx

(b) gave MERALCO undue advantage (i) by effecting the increase of power rates with automatic authority to tack into the consumers electric
bills the so-called purchase and currency adjustment, and (ii) with the active collaboration of Defendant Cesar E. A. Virata, by reducing the
electric franchise tax from 5% to 2% of gross receipts and the tariff duty on fuel oil imports by public utilities from 20% to 10%, resulting in
substantial savings for MERALCO but without any significant benefit to the consumers of electric power and loss of millions of pesos in much
needed revenues to the government;

xxx

(g) secured, in a veiled attempt to justify MERALCOs anomalous acquisition of the electric cooperatives, with the active collaborations of
Defendants Cesar E. A. Virata, Juanito R. Remulla, Isidro Rodriguez, Jose C. Hernandez, Pedro Dumol, Ricardo C. Galing, Francisco C.
Gatmaitan, Mario D. Camacho and the rest of the Defendants, the approval by Defendant Ferdinand E. Marcos and his cabinet of the so-called
Three-Year Program for the Extension of MERALCOs Services to Areas Within the 60-Kilometer Radius of Manila, which required government
capital investment amounting to millions of pesos;

xxx

(m) manipulated, with the support, assistance and collaboration of Philguarantee officials led by Chairman Cesar E. A. Virata and the senior
managers of FMMC/PNI Holdings Incorporated led by Jose S. Sandejas, Jr., Jose M. Mantecon and Kurt S. Bachman, Jr., among others, the
formation of Erectors Holdings, Inc. without infusing additional capital solely for the purpose of making it assume the obligation of Erectors
Incorporated with Philguarantee in the amount of P527,387,440.71 with insufficient securities/collaterals just to enable Erectors Inc. to appear
viable and to borrow more capitals, so much so that its obligation with Philguarantee has reached a total of more than P2 Billion as of June 30,
1987.

xxx

17. The following Defendants acted as dummies, nominees and/or agents by allowing themselves (i) to be used as instruments in accumulating
ill-gotten wealth through government concessions, orders and/or policies prejudicial to plaintiff, or (ii) to be incorporators, directors or members
of corporations beneficially held and/or controlled by Defendants Ferdinand E. Marcos, Imelda R. Marcos, Benjamin (Kokoy) T. Romualdez and
Julliette Gomez Romualdez in order (to) conceal and prevent recovery of assets illegally obtained: xxx Cesar E. A. Virata xxx.
xxx

18. The acts of Defendants, singly or collectively, and/or in unlawful concert with one another, constitute gross abuse of official position and
authority, flagrant breach of public trust and fiduciary obligations, acquisition of unexplained wealth, brazen abuse of right and power, unjust
enrichment, violation of the Constitution and laws of the Republic of the Philippines, to the grave and irreparable damage of Plaintiff and the
Filipino people."[2]

Asserting that the foregoing allegations are vague and are not averred with sufficient definiteness as to enable him to effectively prepare his
responsive pleading, petitioner Virata filed a motion for a bill of particulars on January 31, 1992.

In a Resolution promulgated on 4 August 1992, the Sandiganbayan partially granted the said motion by requiring the Republic to submit a bill of
particulars concerning the charges against petitioner Virata stated only in paragraph 17 (acting as dummy, nominee and/or agent) and paragraph
18 (gross abuse of authority and violation of laws and the Constitution) of the expanded Second Amended Complaint. However, as to the other
charges, namely: 1) Viratas alleged active collaboration in the reduction of electric franchise tax and the tariff duty on fuel oil imports, as stated
in paragraph 14 b (ii), 2) his active collaboration in securing the approval by Ferdinand Marcos of the Three Year Program for the Extension of
MERALCOs Services to Areas within the 60 Kilometer Radius of Manila, mentioned in paragraph 14 g, and 3) his support, assistance and
collaboration in the formation of Erectors Holdings Incorporated as reflected in paragraph 14 m of the expanded Second Amended Complaint, the
Sandiganbayan declared that these accusations are clear and specific enough to allow Virata to submit an intelligent responsive pleading, hence,
the motion for a bill of particulars respecting the foregoing three charges was denied.

In view of the Sandiganbayans order of August 4, 1992 requiring the Republic to amplify the charges in paragraphs 17 and 18 of the expanded
Second Amended Complaint, the Republic through the Office of the Solicitor General submitted the bill of particulars dated October 22, 1992,
hereafter called as the Limited Bill of Particulars, which was signed by a certain Ramon A. Felipe IV, who was designated in the bill of
particulars as private counsel, the relevant portion of which provides that:

xxx

1. Defendant Virata, while being one of the members of the Central Banks Monetary Board, approved Resolution No. 2320 dated December 14,
1973, allowing the Benpres Corporation, Meralco Securities Corporation (MSC) and Manila Electric Company (MERALCO) to
refinance/restructure their outstanding loan obligations, a sweetheart or behest accommodation which enabled Meralco Foundation, Inc. to
acquire ownership and control of Manila Electric Company. Meralco Foundation, Inc. was then controlled by the Marcos-Romualdez Group with
Benjamin (Kokoy) Romualdez being the beneficial owner and, thereby, expanding the said groups accumulation of ill-gotten wealth.

2. On July 11, 1978 defendant Virata representing the Republic of the Philippines as Finance Minister, executed an Agreement with the Manila
Electric Company (MERALCO) whereby the government agreed to buy the parcels of land, improvements and facilities known as Gardner
Station Unit No. 1, Gardner Station Unit No. 2, Snyder Station Unit No. 1, Snyder Station Unit No. 2 and Malaya Station Unit No. 1 for One
Billion One Hundred Million Pesos (P1,100,000,000.00), a transaction which was so disadvantageous to the government and most favorable to
MERALCO which gained a total of P206.2 million. As a result of this transaction, MERALCO is relieved of its heavy burden in servicing its
foreign loans which were assumed by the government. Furthermore, the agreement clearly showed the sweetheart deal and favors being given by
the government to MERALCO which was then owned/and or controlled by Benjamin Romualdez representing the Marcos-Romualdez group,
when it provided that the sale is subject to the reservation of rights, leases and easements in favor of Philippine Petroleum Corp., First Philippine
Industrial Corp. (formerly MERALCO Securities Industrial Corp.) and Pilipinas Shell Petroleum Corp. insofar as the same are presently in force
and applicable. This enabled the Marcos-Romualdez Group to further accumulate and expand the ill-gotten wealth and plunder the nation.

3. At the meeting of the Board of Directors of the Philippine Export and Foreign Loan Guarantee Corp. held on September 16, 1983 defendant
Virata acting as Chairman, together with the other members of the board, approved the request of Erectors, Inc., a Benjamin Romualdez owned
and/or controlled corporation, for a guarantee to cover 100 % of its proposed behest loan of US $33.5 Million under the Central Bank
Consolidated Foreign Borrowing Program with the Philippine National Bank, Development Bank of the Philippines, Interbank, Philippine
Commercial International Bank and Associated Bank as conduit banks, to refinance Erectors, Inc.s short term loans guaranteed by Philguarantee,
which at present forms part of the governments huge foreign debt. Such act of defendant Virata was a flagrant breach of public trust as well as a
violation of his duty to protect the financial condition and economy of the country against, among others, abuses and corruption.[3]

On 3 December 1992, a motion to strike out the Limited Bill of Particulars and to defer the filing of the answer was filed by Virata on the
grounds that the Limited Bill of Particulars avers for the first time new actionable wrongs allegedly committed by him in various official
capacities and that the allegations therein do not indicate that Virata acted as dummy, nominee or agent but rather as a government officer, acting
as such in his own name. This motion was not acted upon by the Sandiganbayan.

Way back on September 1, 1992, Virata, who was dissatisfied with the Sandiganbayan Resolution of August 4, 1992, filed a petition
for certiorari (G.R. No. 106527) with this Courtquestioning the Sandiganbayan s denial of his motion for a bill of particulars as regards the first
three charges stated in paragraph 14 b(ii), paragraph 14g and paragraph 14m of the expanded Second Amended Complaint. The petition was
granted by this Court in our decision promulgated on April 6, 1993. Accordingly, the Sandiganbayan Resolution of August 4, 1992 to the extent
that it denied the motion for a bill of particulars with respect to the first three (3) charges was set aside and the Republic was required by this
Court to submit to Virata a bill of particulars containing the facts prayed for by the latter insofar as to these first three (3) actionable wrongs are
concerned.[4]

On August 20, 1993, the Office of the Solicitor General (OSG) filed a manifestation and motion dated August 18, 1993 alleging, inter alia, that
the OSG and PCGG agreed that the required bill of particulars would be filed by the PCGG since the latter is the investigating body which has the
complete records of the case, hence, in a better position to supply the required pleading. The Sandiganbayan took note of this manifestation in a
Resolution dated August 26, 1993. On the basis of this arrangement, the PCGG submitted the bill of particulars dated November 3, 1993, which
was apparently signed by a certain Reynaldo G. Ros, who was named in the bill of particulars as deputized prosecutor of the PCGG. This bill
of particulars, which incorporates by reference the Limited Bill of Particulars of October 22, 1992, states, inter alia:

xxx

1. On the Specific Averments of Defendants Illegal Acts a (i) [paragraph 14 b (ii) of the expanded Second Amended Complaint]

Immediately after defendants Ferdinand E. Marcos and Benjamin Kokoy Romualdez took complete control of Meralco and its subsidiaries,
defendant Ferdinand E. Marcos issued Presidential Decree No. 551 on September 11, 1974 which effected the reduction of electric franchise tax
being paid by Meralco from 5% to 2% as well as lowered tariff duty of fuel oil imports from 20% to 10% and allowed Meralco to retain 3%
reduction in franchise tax rates thereby allowing it to save as much as P258 million as of December 31, 1992.

Defendant Cesar Virata then Minister of Finance, supported PD 551 and in fact issued the guidelines on its implementation which were heavily
relied upon by the Board of Energy in its questioned ruling dated 25 November 1982 by allowing Meralco to continue charging higher electric
consumption rates despite their savings from the aforesaid reduction of franchise tax without any significant benefit to the consumers of electric
power and resulting in the loss of millions of pesos in much needed revenues to the government.

2. On the Specific Averments of Defendants Illegal Acts a (ii) [par. 14g of the expanded Second Amended Complaint]

Defendant Cesar E.A. Virata, then Prime Minester [sic], caused the issuance of a confidential memorandum dated October 12, 1982 to then
President Ferdinand E. Marcos informing the latter of the recommendation of the cabinet of the so called Three Year Program for the Extension
of Meralco Services of Areas within the 60 Kilometer Radius of Manila in order to justify Meralcos anomalous acquisition of electric
cooperatives and which later required the Monetary Board and Philguarantee then headed by defendant Virata to recommend the restructuring of
Meralcos foreign and local obligation which led to the extending of loan accommodations by the Development Bank of the Philippines and
Philippine National Bank in favor of Meralco.

3. On the Specific Averments of Defendants Illegal Acts a (iii) [par. 14m of the expanded Second Amended Complaint]

Defendant Cesar Virata, as Chairman of Philguarantee and the Senior Managers of FMMC/PNI Holdings Inc. led by Jose S. Sandejas, J. Jose N.
Mantecon and Kurt S. Bachmann, Jr., supported and assisted the formation of Erectors Holdings, Inc. for the purpose of making it assume the
obligation of Erectors Inc. with Philguarantee in the amount of P527,387,440.71 without sufficient securities/collateral and despite this
outstanding obligation, defendant Virata, as Chairman of Philguarantee, approved the Erectors Inc. Applications for loan guarantees that reached
more than P2 Billion as of June 30, 1987.

4. On the Specific Averments of Defendants Illegal Acts a (iv) [par. 17 of the expanded Second Amended Complaint]

Plaintiff, hereby incorporates by reference plaintiffs Limited Bill of Particulars previously submitted to this Honorable Court with the
qualification that defendant Cesar Virata merely acted as agent.[5]

Consequently, Virata filed on November 23, 1993 his comment on the bill of particulars with motion to dismiss the expanded Second Amended
Complaint. He alleges that both the bills of particulars dated October 22, 1992 and November 3, 1993 are pro forma and should be stricken off
the records. According to him, the bill of particulars dated November 3, 1993 is merely a rehash of the assertions made in the expanded Second
Amended Complaint, hence, it is not the bill of particulars that is required by this Court in the previous case of Virata vs. Sandiganbayan, et.
al. (G.R. No. 106527). Furthermore, a reading of the Limited Bill of Particulars dated October 22, 1992 shows that it alleges new imputations
which are immaterial to the charge of being a dummy, nominee or agent, and that Virata acted, not as a dummy, nominee or agent of his co-
defendants as what is charged in the complaint, but as a government officer of the Republic. Virata also questions the authority of PCGG and its
deputized prosecutor to file the bill of particulars in behalf of the Republic. He asserts that the legal representation of the Republic by the OSG is
mandated by law and that the Sandiganbayan, through its Resolution dated August 26, 1993, should not have allowed the OSG to abdicate its
duty as the counsel of record for the Republic.

The Republic filed its Opposition to Viratas Comment to Bill of Particulars on December 17, 1993. Subsequently, Virata filed his Reply to
Opposition on January 18, 1994.

After considering the relevant pleadings and motions submitted by the parties, the Sandiganbayan, in a Resolution of February 16, 1994, admitted
the bill of particulars submitted by the Republic and ordered Virata to file his responsive pleading to the expanded Second Amended
Complaint. The relevant portion of the Resolution states as follows:

In the resolution of this incident, We find that the bill of particulars, filed by the plaintiff on November 3, 1993 in compliance with the Supreme
Courts directive, appears to have substantially set out additional averments and particulars which were not previously alleged in the Expanded
Amended Complaint. We likewise consider these additional averments and particulars to be sufficient enough to enable defendant Virata to frame
his responsive pleading or answer and that what he feels are still necessary in preparing for trial should be obtained by various modes of
discovery, such as interrogatories, depositions, etc. A bill of particulars is sufficient if matters constituting the causes of action have already been
specified with sufficient particularity and which matters are within the moving partys knowledge. It cannot be utilized to challenge the
sufficiency of the claim asserted.
Simplicity of pleading is the idea of modern procedure, hence, evidentiary facts and details should not be allowed to clutter a complaint as much
as possible, consistent with the right of the moving party to compel disclosure in instances where it is beyond cavil that He cannot adequately
frame a responsive pleading. In the instant case, the bill of particulars submitted by the plaintiff, in Our considered opinion, is sufficient and
adequate enough to fulfill its mission.[6]

Dissatisfied, Virata filed this instant petition for certiorari under Rule 65 of the Rules of Court to challenge the foregoing Resolution of the
Sandiganbayan.

The issues to be resolved in the instant case are as follows:

1. WHETHER OR NOT THE SANDIGANBAYAN COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR
EXCESS OF JURISDICTION IN ADMITTING THE BILL OF PARTICULARS SUBMITTED BY THE REPUBLIC.

2. WHETHER OR NOT THE OFFICE OF THE SOLICITOR GENERAL AND THE PCGG ARE AUTHORIZED BY LAW TO DEPUTIZE A
COUNSEL TO FILE THE BILL OF PARTICULARS IN BEHALF OF THE REPUBLIC.

Petitioner maintains the view that the allegations in the bill of particulars of November 3, 1993 remain vague, general and ambiguous, and the
purported illegal acts imputed to Virata have not been averred with sufficient definiteness so as to inform Virata of the factual and legal basis
thereof.

Respecting the Limited Bill of Particulars dated October 22, 1992, which amplifies paragraphs 17 and 18 of the expanded Second Amended
Complaint, Virata reiterates his basicarguments that the Limited Bill of Particulars fails to provide the relevant and material averments sought to
be clarified by him and that it asserts for the first time new matters allegedly committed by him in different official capacities, to wit: a) as a
member of the Central Bank Monetary Board, he, with the other Monetary Board members, approved Resolution No. 2320 dated December 14,
1973 regarding the restructuring of the loans of Benpres Corporation, Meralco Securities Corporation, and the Manila Electric Company, b) as
Finance Minister, he executed an agreement with Manila Electric Company in connection with the sale of lands and facilities of the Gardner
Station Unit No. 1, Gardner Station Unit No. 2, Snyder Station Unit No. 1, Snyder Station Unit No. 2, and Malaya Station Unit No. 1, and, c) as
Chairman of the Board of Directors of the Philippine Export and Foreign Loan Guarantee Corporation, approved the request of Erector,
Incorporated, for a guarantee to cover 100% of its proposed behest loan of US $ 33.5 Million under the Central Bank Consolidated Foreign
Borrowing Program. He argues that the thrust of paragraphs 17 and 18 of the expanded Second Amended Complaint is the charge that Virata
acted as dummy, nominee and/or agent, however, the foregoing allegations in the Limited Bill of Particulars do not indicate that he acted as
dummy, nominee or agent, but rather, as a government officer.

Invoking Section 3, Rule 17 of the Rules of Court, Virata argued that both the bills of particulars submitted by the Republic did not follow the
Rules of Court and the orders of the Sandiganbayan and this Honorable Court, as such, the failure to comply with these legal orders is a ground
for dismissal of the action. Additionally, it is asserted that under Rule 12, Section 1(c) of the Rules of Court, if an order of the court for a bill of
particulars is not obeyed, it may order the striking out of the pleading to which the motion was directed. Accordingly, Virata prayed for the
striking out of the bills of particulars dated October 22, 1992 and November 3, 1993 and the dismissal of the expanded Second Amended
Complaint in so far as he is concerned.

We find the instant petition meritorious.

The rule is that a complaint must contain the ultimate facts constituting plaintiffs cause of action. A cause of action has the following elements, to
wit: (1) a right in favor of the plaintiff by whatever means and under whatever law it arises or is created; (2) an obligation on the part of the
named defendant to respect or not to violate such right; and (3) an act or omission on the part of such defendant violative of the right of the
plaintiff or constituting a breach of the obligation of the defendant to the plaintiff for which the latter may maintain an action for recovery of
damages.[7] As long as the complaint contains these three elements, a cause of action exists even though the allegations therein are vague, and
dismissal of the action is not the proper remedy when the pleading is ambiguous because the defendant may ask for more particulars. As such,
Section 1, Rule 12 of the Rules of Court, provides, inter alia, that a party may move for more definite statement or for a bill of particulars of any
matter which is not averred with sufficient definiteness or particularity to enable him properly to prepare his responsive pleading or to prepare for
trial. Such motion shall point out the defects complained of and the details desired. Under this Rule, the remedy available to a party who seeks
clarification of any issue or matter vaguely or obscurely pleaded by the other party, is to file a motion, either for a more definite statement or for a
bill of particulars.[8] An order directing the submission of such statement or bill, further, is proper where it enables the party movant intelligently
to prepare a responsive pleading, or adequately to prepare for trial. [9]

A bill of particulars is a complementary procedural document consisting of an amplification or more particularized outline of a pleading, and
being in the nature of a more specific allegation of the facts recited in the pleading. [10] It is the office of the bill of particulars to inform the
opposite party and the court of the precise nature and character of the cause of action or defense which the pleader has attempted to set forth and
thereby to guide his adversary in his preparations for trial, and reasonably to protect him against surprise at the trial. [11] It gives information of the
specific proposition for which the pleader contends, in respect to any material and issuable fact in the case, and it becomes a part of the pleading
which it supplements.[12]It has been held that a bill of particulars must inform the opposite party of the nature of the pleaders cause of action or
defense, and it must furnish the required items of the claim with reasonable fullness and precision.[13] Generally, it will be held sufficient if it
fairly and substantially gives the opposite party the information to which he is entitled, as required by the terms of the application and of the order
therefor. It should be definite and specific and not contain general allegations and conclusions. It should be reasonably certain and as specific as
the circumstances will allow.[14]
Guided by the foregoing rules and principles, we are convinced that both the bill of particulars dated November 3, 1993 and the Limited Bill of
Particulars of October 22, 1992 are couched in such general and uncertain terms as would make it difficult for petitioner to submit an intelligent
responsive pleading to the complaint and to adequately prepare for trial.

Let us examine the bill of particulars dated November 3, 1993:

1. The first paragraph of the foregoing bill of particulars provides that (I)mmediately after defendants Ferdinand E. Marcos and Benjamin Kokoy
Romualdez took control of Meralco and its subsidiaries, defendant Ferdinand E. Marcos issued Presidential Decree No. 551 on September 11,
1974 which effected the reduction of electric franchise tax being paid by Meralco from 5% to 2% as well as lowered tariff duty of fuel oil imports
from 20% to 10% and allowed Meralco to retain the 3% reduction in franchise tax rates thereby allowing it to save as much as P258 million as of
December 31, 1992. Further, it is stated that (D)efendant Cesar Virata then Minister of Finance, supported PD 551 and in fact issued the
guidelines on its implementation which were heavily relied upon by the Board of Energy in its questioned ruling dated 25 November 1982 by
allowing Meralco to continue charging higher electric consumption rates despite their savings from the aforesaid reduction of franchise tax
without any significant benefit to the consumers of electric power and resulting in the loss of millions of pesos in much needed revenues to the
government.

The abovequoted paragraph of the said bill of particulars is supposed to be the amplification of the charge against Virata stated in paragraph 14(b)
of the expanded Second Amended Complaint-which is his alleged active collaboration in the reduction of electric franchise tax and tariff duty of
fuel oil imports. Yet, a careful perusal of the said paragraph shows that nothing is said about his alleged active collaboration in reducing the
taxes. Aside from the bare assertion that he supported PD 551 and issued the guidelines on its implementation, the bill of particulars is
disturbingly silent as to what are the particular acts of Virata that establish his active collaboration in the reduction of taxes. The allegation that he
supported PD 551 and issued its implementing guidelines is an insufficient amplification of the charge because the same is but a general
statement bereft of any particulars. It may be queried-how did Virata support PD 551? What were the specific acts indicating his support? What
were these implementing guidelines issued by him and when were they issued? In supporting PD 551 and in issuing its implementing guidelines,
what law or right, if there is any, is violated by Virata? It is worthy to note that, until now, PD 551 has not been declared unconstitutional. In
fact, this Court upheld its validity in the case of Philippine Consumer Foundation, Inc. vs. Board of Energy and Meralco.[15]

2. In the second paragraph of the said bill of particulars, it is alleged that (D)efendant Cesar E.A. Virata, then Prime Minester [sic], caused the
issuance of a confidential memorandum dated October 12, 1982 to then President Ferdinand E. Marcos informing the latter of the
recommendation of the cabinet of the so called Three Year Program for the Extension of Meralco Services of Areas within the 60 Kilometer
Radius of Manila in order to justify Meralcos anomalous acquisition of electric cooperatives and which later required the Monetary Board and
Philguarantee then headed by defendant Virata to recommend the restructuring of Meralcos foreign and local obligation which led to the
extending of loan accommodation by the Development Bank of the Philippines and Philippine National Bank in favor of Meralco.

The foregoing allegation purportedly amplifies the charge stated in paragraph 14 (g) of the expanded Second Amended Complaint, that is-Viratas
active collaboration in securing the approval by Ferdinand Marcos and his cabinet of the Three Year Program for the Extension of Meralcos
Services within the Manila Area. However, just like the first paragraph of the said bill of particulars, this Court finds that the second paragraph
failed to set forth particularly or specifically the charge against Virata. It is an incomplete or floating disclosure of material facts replete with
generalizations and indefinite statements which seemingly ends to nowhere. There are certain matters alleged that need to be clarified and filled
up with details so that Virata can intelligently and fairly contest them and raise them as cogent issues, to wit: a) In causing the issuance of the said
memorandum, what law, duty or right, if there is any, is violated by Virata?; b) What was the recommendation of the cabinet regarding the Three
Year Program? The Republic should have at least furnish the substantial or important features of the recommendation; c) What were these
electric cooperatives? Were these cooperatives the same as those enumerated in paragraph 14(e) of the expanded Second Amended
Complaint?[16]Why was the acquisition of these cooperatives anomalous?; and d) What were Viratas specific acts as the head of Philguarantee
which led to the restructuring of Meralcos obligation? What was his participation in recommending the restructuring of Meralcos
obligation? What were these foreign and local obligations? How much of the obligation was recommended for restructuring? What were the loan
accommodations given in favor of Meralco? When were they given and how much were involved in the transaction?

3. Regarding the third paragraph of the said bill of particulars, We find the same as a mere recast or restatement of the charge set forth in
paragraph 14 (m) of the expanded Second Amended Complaint, which is Viratas alleged support, assistance and collaboration in the formation of
Erectors Holding, Incorporated. The said paragraph of the bill of particulars states that (D)efendant Cesar Virata, as Chairman of Philguarantee
and the Senior Managers of FMMC/PNI Holdings Inc. led by Jose S. Sandejas, J. Jose N. Mantecon and Kurt S. Bachmann, Jr. supported and
assisted the formation of Erectors Holdings, Inc. for the purpose of making it assume the obligation of Erectors Inc. with Philguarantee in the
amount of P527,387,440.71 without sufficient securities/collateral and despite this outstanding obligation, defendant Virata, as Chairman of
Philguarantee, approved the Erectors Inc. Applications for loan guarantees that reached more than P2 Billion as of June 30, 1987.

Clearly from the foregoing allegation, the Republic failed miserably to amplify the charge against Virata because, instead of supplying the
pertinent facts and specific matters that form the basis of the charge, it only made repetitive allegations in the bill of particulars that Virata
supported and assisted the formation of the corporation concerned, which is the very same charge or allegation in paragraph 14 (m) of the
expanded Second Amended Complaint which requires specifications and unfailing certainty. As such, the important question as to what particular
acts of Virata that constitute support and assistance in the formation of Erectors Holding, Incorporated is still left unanswered, a product of
uncertainty.

We now take a closer look at the Limited Bill of Particulars dated October 22, 1992.
The said bill of particulars was filed by the Republic to amplify the charge of Viratas being a dummy, nominee or agent stated in paragraphs 17
and 18 of the expanded Second Amended Complaint. In the subsequent bill of particulars dated November 3, 1993, the said charge was qualified
by the Republic in the sense that Virata allegedly acted only as an agent.Let us consider each paragraph of the said bill of particulars:

1. The first paragraph of the Limited Bill of Particulars states that (D)efendant Virata, while being one of the members of the Central Banks
Monetary Board, approved Resolution No. 2320 dated December 14, 1973, allowing the Benpres Corporation, Meralco Securities Corp. (MSC)
and Manila Electric Company (MERALCO) to refinance/restructure their outstanding loan obligations, a sweetheart or behest accommodation
which enabled Meralco Foundation, Inc. to acquire ownership and control of Manila Electric Company. It is stated further that Meralco
Foundation, Inc. was then controlled by the Marcos-Romualdez Group with Benjamin (Kokoy) Romualdez being the beneficial owner and,
thereby, expanding the said groups accumulation of ill gotten wealth.

It is apparent from the foregoing allegations that the Republic did not furnish Virata the following material matters which are indispensable for
him to be placed in such a situation wherein he can properly be informed of the charges against him: a) Did Virata, who was only one of the
members of the Board, act alone in approving the Resolution? Who really approved the Resolution, Virata or the Monetary Board?; b) What were
these outstanding loan obligations of the three corporations concerned? Who were the creditors and debtors of these loan obligations? How much
were involved in the restructuring of the loan obligations? What made the transaction a sweetheart or behest accommodation?; and c) How was
the acquisition of MERALCO by Meralco Foundation, Inc. related to the Resolution restructuring the loan obligations of the three corporations?

2. The second paragraph provides that (O)n July 11, 1978 defendant Virata representing the Republic of the Philippines as Finance Minister,
executed an Agreement with the Manila Electric Co. (MERALCO) whereby the government agreed to buy the parcels of land, improvements and
facilities known as Gardner Station Unit No. 1, Gardner Station Unit No. 2, Snyder Station Unit No. 1, Snyder Station Unit No. 2 and Malaya
Station Unit No. 1 for One Billion One Hundred Million Pesos (P1,100,000,000.00), a transaction which was so disadvantageous to the
government and most favorable to MERALCO which gained a total of P206.2 million; that (A)s a result of this transaction, MERALCO was
relieved of its heavy burden in servicing its foreign loans which were assumed by the government; that xxx, the agreement clearly showed the
sweetheart deal and favors being given by the government to MERALCO which was then owned and/or controlled by Benjamin Romualdez
representing the Marcos-Romualdez group, when it provided that the sale is subject to the reservation of rights, leases and easements in favor of
Philippine Petroleum Corp., First Philippine Industrial Corp. (formerly MERALCO Securities Industrial Corp.) and Pilipinas Shell Petroleum
Corp. insofar as the same are presently in force and applicable.

There are certain matters in the foregoing allegations which lack in substantial particularity. They are broad and definitely vague which require
specifications in order that Virata can properly define the issues and formulate his defenses. The following are the specific matters which the
Republic failed to provide, to wit: a) What made the transaction disadvantageous to the government? The allegation that it was disadvantageous is
a conclusion of law that lacks factual basis. How did MERALCO gain the P206.2 million? The Republic should have provided for more specifics
how was the transaction favorable to MERALCO?; b) What were these foreign obligations of MERALCO which were assumed by the
government? Who were the creditors in these obligations? When were these obligations contracted? How much were involved in the assumption
of foreign obligations by the government?; and c) By the presence of the provision of the contract quoted by the Republic, what made the
agreement a sweetheart deal? The allegation that the agreement is a sweetheart deal is a general statement that needs further amplification.

3. The third paragraph states that (A)t the meeting of the Board of Directors of the Philippine Export and Foreign Loan Guarantee Corp. held on
September 16, 1983 defendant Virata acting as Chairman, together with the other members of the board, approved the request of Erectors Inc., a
Benjamin Romualdez owned and/or controlled corporation, for a guarantee to cover 100% of its proposed behest loan of US$ 33.5 Million under
the Central Bank Consolidated Foreign Borrowing Program with the Philippine National Bank, Development Bank of the Philippines, Interbank,
Philippine Commercial International Bank and Associated Bank as conduit banks, to refinance Erectors, Inc.s short term loans guaranteed by
Philguarantee, which at present forms part of the governments huge foreign debt; that (S)uch act of defendant Virata was a flagrant breach of
public trust as well as a violation of his duty to protect the financial condition and economy of the country against, among others, abuses and
corruption.

In like manner, the foregoing paragraph contains incomplete and indefinite statement of facts because it fails to provide the following relevant
matters: a) What was this $33.5 million proposed behest loan? What were its terms? Who was supposed to be the grantor of this loan?; b) What
were these short term loans? Who were the parties to these transactions? When were these transacted? How was this $ 33.5 million behest loan
related to the short term loans?

Furthermore, as correctly asserted by petitioner Virata, the Limited Bill of Particulars contains new matters which are not covered by the charge
that Virata acted as agent of his co-defendants in the expanded Second Amended Complaint. Apparently, as may be examined from the three
paragraphs of the Limited Bill of Particulars, Virata, in so doing the acts, can not be considered as an agent of any of his co-defendants, on the
contrary, the factual circumstances stated in the said bill of particulars indicate that Virata acted on behalf of the government, in his official
capacity as a government officer. This observation is established by the allegations that Virata acted as a member of the Central Bank Monetary
Board, as chairman of the Board of Directors of the Philippine Export and Foreign Loan Guarantee Corporation, and, when he executed the
Agreement with Meralco on July 7, 1978 concerning the sale of certain properties, he acted as the Finance Minister of the government and as a
representative of the Republic in the contract. In performing the said acts, he, therefore, acted as an agent of the government, not as an agent of
his co-defendants, which is the charge against him in the expanded Second Amended Complaint. Accordingly, the allegations in the Limited Bill
of Particulars are irrelevant and immaterial to the charge that Virata acted as an agent of his co-defendants.

As clearly established by the foregoing discussion, the two bills of particulars filed by the Republic failed to properly amplify the charges leveled
against Virata because, not only are they mere reiteration or repetition of the allegations set forth in the expanded Second Amended Complaint,
but, to the large extent, they contain vague, immaterial and generalizedassertions which are inadmissible under our procedural rules.
It must be remembered that in our decision promulgated on April 6, 1993 (G.R. No. 106527), We required the Republic to submit a bill of
particulars concerning the first three charges against Virata averred in paragraphs 14 b(ii), 14 g, and 14 m of the expanded Second Amended
Complaint, on the other hand, as regards the charges stated in paragraphs 17 and 18 of the said complaint, the Republic was ordered to file the
required bill of particulars by the Sandiganbayan through its Resolution dated August 4, 1992. The Republic purportedly complied with these
orders by filing the questioned bill of particulars dated November 3, 1993 and the Limited Bill of Particulars of October 22, 1992. However, as
shown by the above discussion, the two bills of particulars were not the bills of particulars which fully complied with the Rules of Court and with
the orders of the Sandiganbayan and this Court.

As such, in view of the Republics failure to obey this Courts directive of April 6, 1993 (G.R. No. 106527) and the Sandiganbayans order of
August 4, 1992 to file the proper bill of particulars which would completely amplify the charges against Virata, this Court deems it just and
proper to order the dismissal of the expanded Second Amended Complaint, in so far as the charges against Virata are concerned. This action is
justified by Section 3, Rule 17 of the Rules of Court, which provides that:

Section 3. Failure to prosecute. - If plaintiff fails to appear at the time of the trial, or to prosecute his action for an unreasonable length of time,
or to comply with these rules or any order of the court, the action may be dismissed upon motion of the defendant or upon the courts own
motion. This dismissal shall have the effect of an adjudication upon the merits, unless otherwise provided by court. (italics ours)

Regarding the second issue of the instant case, Virata contends that the Presidential Commission on Good Government is not authorized by law
to deputize a counsel to prepare and file pleadings in behalf of the Republic. Neither can the Office of the Solicitor General validly deputize an
outside counsel to completely take over the case for the Republic. According to petitioner, only the Office of the Solicitor General is mandated by
law to act counsel for the Republic. Thus, the bill of particulars filed for the Republic by private counsel or deputized prosecutor of the PCGG is
unauthorized.

This contention is devoid of merit.

We are of the opinion that the Limited Bill of Particulars dated October 22, 1992 signed by Ramon Felipe IV and the Bill of Particulars dated
November 3, 1993 signed by Reynaldo Ros are valid pleadings which are binding upon the Republic because the two lawyer-signatories are
legally deputized and authorized by the Office of the Solicitor General and the Presidential Commission on Good Government to sign and file the
bills of particulars concerned.

Realizing that it can not adequately respond to this Courts order of April 6 1993 (G.R. No. 106527) requiring the Republic to submit the bill of
particulars concerning the first three charges against Virata, the Office of the Solicitor deemed it better to seek the help of the Presidential
Commission on Good Government by availing the services of the latters lawyer who would directly file the required bill of particulars in behalf
of the Republic. This circumstance prompted the Office of the Solicitor General to manifest before the Sandiganbayan on August 20, 1993 that it
would be the PCGG which would file the required bill of particulars and move that it be excused from doing so as the PCGG, being in-charge of
investigating the case, was in a better position than the OSG. Armed with this authority given by the OSG, the PCGG, through one of its
deputized prosecutors, Reynaldo Ros, filed the bill of particulars dated November 3, 1993 to amplify the first three charges against Virata stated
in paragraphs 14 b(ii), 14g, and 14 m of the expanded Second Amended Complaint.

The action of the OSG in seeking the assistance of the PCGG is not without legal basis. The Administrative Code of 1987, which virtually
reproduces the powers and functions of the OSG enumerated in P.D. No. 478 (The Law Defining the Powers and Functions of the Office of the
Solicitor General), provides, inter alia, that:

Section 35. Powers and Functions. xxx.

It (the OSG) shall have the following specific powers and functions:

xxx

(8) Deputize legal officers of government departments, bureaus, agencies and offices to assist the Solicitor General and appear or represent the
Government in cases involving their respective offices, brought before the courts and exercise supervision and control over such legal officers
with respect to such cases.

(9) Call on any department, bureau, office, agency, or instrumentality of the Government for such service assistance and cooperation as may be
necessary in fulfilling its functions and responsibilities and for this purpose enlist the services of any government official or employee in the
pursuit of his task. xxx.[17]

Contrary to Viratas contention, the Solicitor General did not abdicate his function and turn over the handling of the instant case to the
PCGG. Nowhere in the manifestation and motion filed by the OSG on August 20, 1993 is there an iota or indication that the OSG is withdrawing
from the case and that the PCGG is taking over its prosecution. What the OSG did was merely to call the PCGG for assistance and authorize it to
respond to the motion for a bill of particulars filed by Virata. The OSG was impelled to act this way because of the existence of the special
circumstance that the PCGG, which has the complete records of the case and being in charge of its investigation, was more knowledgeable and
better informed of the facts of the case than the OSG.

The authority, therefore, of Attorney Reynaldo Ros to sign and submit in behalf of the Republic the bill of particulars dated November 3, 1993 is
beyond dispute because 1) he was duly deputized by the PCGG in pursuance to its power to prosecute cases of ill-gotten wealth under Executive
Order No. 14 of May 14, 1986, 2) the OSG empowered the PCGG to file the bill of particulars as evidenced by the OSGs manifestation and
motion filed on August 20, 1993, and 3) there was no abdication of OSGs duty by giving the PCGG the authority to file the bill of particulars.
On the other hand, the deputation of Ramon Felipe IV by the Solicitor General to sign and file the Limited Bill of Particulars is based on Section
3 of Presidential Decree No. 478, which provides that:

Section 3. The Solicitor General may, when necessary and after consultation with the Government entity concerned, employ, retain, and
compensate on a contractual basis, in the name of the Government, such attorneys and experts or technical personnel as he may deem necessary
to assist him in the discharge of his duties. The compensation and expenses may be charged to the agency or office in whose behalf the services
have to be rendered. (italics ours)

The Solicitor General is mandated by law to act as the counsel of the Government and its agencies in any litigation and matter requiring the
services of a lawyer. In providing the legal representation for the Government, he is provided with vast array of powers, which includes the power
to retain and compensate lawyers on contractual basis, necessary to fulfill his sworn duty with the end view of upholding the interest of the
Government. Thus, the Solicitor General acted within the legal bounds of its authority when it deputized Attorney Felipe IV to file in behalf of
the Republic the bill of particulars concerning the charges stated in paragraph 17 and 18 of the expanded Second Amended Complaint.

At any rate, whether or not the lawyer-signatories are duly deputized would not be decisive in the resolution of this case considering that the two
bills of particulars filed by the Republic are mere scraps of paper which miserably failed to amplify the charges against Virata. For the Republics
failure to comply with the courts order to file the required bill of particulars that would completely and fully inform Virata of the charges against
him, the dismissal of the action against him is proper based on Section 3, Rule 17 of the Revised Rules of Court and the relevant jurisprudence
thereon.[18] Simple justice demands that as stated earlier, petitioner must know what the complaint is all about. The law requires no less.

Although this Court is aware of the Governments laudable efforts to recover ill-gotten wealth allegedly taken by the defendants, this Court,
however, cannot shrink from its duty of upholding the supremacy of the law under the aegis of justice and fairness. This Court in dismissing the
action against the petitioner has rightfully adhered in the unyielding tenet - principia, non homines - the rule of law, not of men.

ACCORDINGLY, the instant petition is hereby GRANTED and the expanded Second Amended Complaint, in so far as petitioner Virata is
concerned, is hereby ordered DISMISSED.

SO ORDERED.
 2. Galeon VS. Galeon

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-30380 February 28, 1973

LEONARDO GALEON, petitioner,

vs.
MARCIAL GALEON, ZOSIMA GALEON-CANDA, MATEO GALEON, and COURT OF FIRST INSTANCE OF QUEZON,
BRANCH II, LUCENA CITY, respondents.

Joaquin M. Trinidad for petitioner.

Remigio L. Perez for respondents.

ANTONIO, J.:

Petitioner seeks in this petition for review by certiorari the reversal of the order of respondent court dismissing his amended complaint in Civil
Case No. 6614 of the Court of First Instance of Quezon, Branch II.

The record shows that petitioner filed a complaint for partition (which was amended on August 13, 1963), against private respondents, alleging,
among others, that petitioner is the illegitimate (adulterous) son of Demetrio Galeon, who during his lifetime had acknowledged and recognized
him as such illegitimate child, while the private respondents are Demetrio Galeon's only legitimate children begotten with his lawfully-wedded
wife, Felisa Venal; that Demetrio Galeon died intestate on September 9, 1958, and was survived by his compulsory heirs, namely, the three
private respondents, his surviving spouse Felisa Venal and the petitioner; that the deceased owned during his lifetime shares in the six parcels of
land described in the complaint, which upon his death were inherited in intestacy by his aforementioned heirs; that on March 22, 1962, the
surviving spouse Felisa Venal also died intestate, and her share in the estate of her husband was inherited by the private respondents as her only
compulsory heirs; that after the death of their mother private respondents took possession of all of the lands left by the deceased Demetrio
Galeon, appropriating for themselves the fruits thereof, to the exclusion of petitioner; that no partition has been made of the said estate, and there
is no assurance that the private respondents will agree to an extrajudicial partition of said properties. Plaintiff therefore prayed that the court order
the partition of the said properties of the deceased Demetrio Galeon in accordance with the provisions of the New Civil Code; that the private
respondents be ordered to render an accounting of the produce thereof; and that petitioner be granted such other relief as may be just and
equitable in the premises.

Private respondents moved to dismiss the amended complaint on the grounds that petitioner "has no legal capacity or personality to sue"; that the
amended complaint does not state a cause of action; and that the petitioner's cause of action, if any, is barred by the statute of limitations.

In its order dated February 2, 1966, respondent court dismissed the amended complaint on the ground that petitioner "has no legal personality to
sue", because according to said court, "nowhere in his pleading is the allegation or proof that petitioner's filiation has been duly established as
required by Article 887 of the Civil Code."

Submitted for resolution is whether or not from the averments in the amended complaint, petitioner has shown a present substantial interest in the
real properties left by the deceased Demetrio Galeon, as to entitle him to file the action for partition.

The questioned portion of the amended complaint states as follows:

2. That the plaintiff is an illegitimate (adulterous) son of one Demetrio Galeon, who during his lifetime, has acknowledged and recognized him as
such illegitimate child, while the defendants are his only legitimate children with his lawfully wedded wife, Felisa Venal;

It must be noted that the amended complaint was dismissed by the respondent court on the "lack of personality" of the petitioner to sue, because
there is no "allegation or proof that plaintiff's filiation has been established. ... ."

The dismissal of the amended complaint by the respondent court on the ground therein stated was in effect a dismissal based on the insufficiency
of the averments in said amended complaint to show that petitioner has a cause of action. 1

It is well settled that in a motion to dismiss a complaint based on lack of cause of action, "the question submitted to the court for determination is
the sufficiency of the allegations of fact made in the complaint to constitute a cause of action, and not whether these allegations of fact are true,
for said motion must hypothetically admit the truth of the facts alleged in the complaint; ... ."2 The test of the sufficiency of the facts, is whether
or not, accepting the veracity of the facts alleged, the court could render a valid judgment upon the same in accordance with the prayer of the
complaint.3 The uniform ruling of this Court is that the trial court "may not inquire into the truth of the allegations, and find them to be false
before a hearing is had on the merits of the cause ".4 If the court finds the allegations to be sufficient but doubts their veracity, it is incumbent
upon said court to deny the motion to dismiss and require the defendant to answer. The veracity of the assertions could be ascertained at the trial
on the merits.5

Tested by the aforecited criteria, does the complaint state facts sufficient to constitute a cause of action?

As early as Reyes, et al. v. Zuzuarregui, et al,6 Justice J.B.L. Reyes in his concurring opinion therein, advocated that illegitimate children other
than natural, should be acknowledged in the same manner as natural children. This aspect of his concurring opinion became the majority opinion
in Paulino v. Paulino.7

Thus the case of Paulino v. Paulino has declared certain principles that may be applied in the case at bar. In that case Genoveva Catalan Paulino
sought her share of the inheritance in the estate of the late Marcos Paulino claiming and alleging that "she is the illegitimate (spurious) child of
Marcos Paulino, begotten by him and Rustica Catalan on 3 January 1916 in Los Baños Laguna, while the former lawfully married to Dionisia
Hernandez ...". The defendants in that case moved for the dismissal of the plaintiff's complaint on the ground that it stated no cause of action, and
that, even if it did, the same was barred. The trial court, holding that the plaintiff's action to establish her filiation as the illegitimate (spurious)
child of the deceased brought after the latter's death, when she had reached the age of 35 years, was already barred, dismissed her complaint. On
appeal We sustained the order of dismissal, explaining that while it is true that by their motion to dismiss the appellees therein are "deemed to
have admitted that the appellant is the illegitimate spurious not natural child of the deceased Marcos Paulino," such admission was not sufficient
to entitle her to inherit from her alleged putative father. We said that "it is necessary to allege that her putative father had acknowledged and
recognized her as such. Such acknowledgment is essential and is the basis of her right to inherit. There being no allegation of such
acknowledgment the action becomes one to compel recognition which can not be brought after the death of the putative father."

Similarly in Nable v. Nable8 where a person claiming to be the illegitimate child of the deceased testator sought to establish her filiation in the
testamentary proceeding by alleging in her motion that she "is in continuous possession of the status of a child of the late Don Vicente Nable by
the direct acts of the latter and/or his family" and that she had evidence to prove that the deceased was her father, We ruled that "there being no
allegation of her recognition or acknowledgment by the alleged father in the petition to establish her filiation, the same, therefore, states no cause
of action and the dismissal thereof by the lower court was proper".

Clearly inferable from the aforecited cases, is that since acknowledgment is essential and is the basis of the right of a spurious child to inherit in
the estate of his deceased putative parent under Articles 287, 887 and 895 of the New Civil Code it is necessary as a basis for his claim in the
estate to allege that his putative father had acknowledged and recognized him as such. It is therefore evident that the questioned averment in
petitioner's amended complaint substantially complies with the aforestated requirement. For the case at bar is not an action to compel recognition
of petitioner as the illegitimate (spurious) child of the deceased Demetrio Galeon. Rather it is an action by one who alleges as a matter of fact that
he is an acknowledged and recognized illegitimate child of said deceased, for the partition of his estate. As to whether or not petitioner was
actually acknowledged and recognized by Demetrio Galeon as his illegitimate child, is a question of fact, which will depend upon the evidence to
be presented at the trial.9 Inasmuch as such alleged acknowledgment and recognition by Demetrio Galeon, of petitioner as the illegitimate child,
other than natural, of the latter was deemed hypothetically admitted in private respondents' motion to dismiss based on lack of cause of action, the
dismissal of the case would therefore be premature. It deprived petitioner of the opportunity of submitting proof of his acknowledgment and
recognition. It amounted to a denial of his day in court. 10

It is true that the allegation in question is rather vague, as it does not state the manner or form in which such voluntary recognition of petitioner
was made, whether in a record of birth, a will, statement before a court of record, or in any authentic writing. 11 But this Court, speaking thru
Chief Justice Moran, in Co Tiamco v. Diaz, 12 explained that under "the new Rules of Court, an action cannot be dismissed upon the ground that
the complaint is vague, ambiguous, or indefinite (see Rule 8, section 1), because the defendant, in such case, may ask for more particulars (Rule
16) or he may compel the plaintiff to disclose more relevant facts under the different methods of discovery provided by the Rules (Rules 18, 20,
21, 22 and 23). Professor Sunderland once said: "The real test of a good pleading under the new rules is whether the information given is
sufficient to enable the party to plead and prepare for trial. A legal conclusion may serve the purpose of pleading as well as anything else if it
gives the proper information. If the party wants more he may ask for more details in regard to the particular matter that is stated too generally."
(Vol. XIII, Cincinnati Law Review, January 1939)."

IN VIEW OF THE FOREGOING CONSIDERATIONS, the petition is hereby granted. Accordingly, the order of respondent court dismissing the
complaint is set aside, and the case is ordered remanded to the court a quo for further proceedings. Costs against private respondents.

Zaldivar, Castro, Fernando, Makasiar and Esguerra, JJ., concur.

Separate Opinions

TEEHANKEE, J., dissenting:

I dissent from the main opinion, on the ground that the mere allegation in the amended Complaint that "plaintiff is an illegitimate (adulterous) son
of one Demetrio Galeon, who during his lifetime has (sic) acknowledged and recognized him as such illegitimate child" is not sufficient to
constitute a cause of action for partition against "defendants (who) are (the deceased's) only legitimate children with his lawfully wedded wife,
Felisa Venal.

Such action brought in 1963 long after the death in 1958 of the deceased Demetrio Galeon against the lawful and compulsory heirs of the
deceased to recover the alleged share in inheritance of petitioner was premised on the bare conclusion of fact that petitioner had been
"acknowledged and recognized ... as (an) illegitimate child."

As conceded in the main opinion,1 "the allegation in question is rather vague, as it does not state the manner or formin which
such voluntary recognition of petitioner was made, whether in a record of birth, a will, statement before a court of record, or in any authentic
writing" which are the only modes recognized in Article 278 of the Civil Code for making such voluntary recognition of an illegitimate child.

Without such official, judicial or written acknowledgment of the illegitimate child, which in such cases constitutes the ultimate fact, as against a
mere conclusion, which must be duly alleged in the Complaint as required by Rule 8, section 1, the Complaint does not state a sufficient cause of
action, for as was emphasized in Paulino vs. Paulino,2cited in the main opinion as stating the prevailing rule, "such acknowledgment
is essential and is the basis of (the) right to inherit," or to recover a claimed inheritance as in this case.

The lower court, therefore, properly dismissed the amended complaint for partition, on the ground of lack of personality or capacity on
petitioner's part to sue, since there was no "allegation or proof that plaintiff's filiation has been established" i.e. that due recognition of petitioner
as an illegitimate child was made in the official, judicial or authentic writing required by Article 278 of the Civil Code.

Without such official or written recognition, petitioner's proposed action would be but an exercise in futility, causing needless expense and
anxiety on the part of the widow and legitimate children as the lawful compulsory heirs of the deceased and unduly taking the time and attention
which the courts need for the disposition and resolution of truly contentious cases.

As to the procedural question of whether the status of petitioner as an acknowledged illegitimate child was deemed hypothetically admitted upon
private respondents' filing of their motion to dismiss petitioner's complaint on the ground of lack of cause of action, the case of Paulino thus
disposed of the question, holding that "(I)t is true that by their motion to dismiss the appellees are deemed to have admitted that the appellant is
the illegitimate spurious, not natural, child of the deceased Marcos Paulino. Such an admission, however, does not entitle her to inherit from her
alleged putative father. It is necessary to allege that her putative father had acknowledged and recognized her as such. Such acknowledgment is
essential and is the basis of her light to inherit. There being no allegation of such acknowledgment the action becomes one to compel recognition
which can not be brought after the death of the putative father."3

The ultimate fact of due acknowledgment and recognition of the illegitimate child may only be duly averred by alleging the mode whereby such
acknowledgment was made, as circumscribed by Article 278 of the Civil Code, whether in "a record of birth, a will, a statement before a court of
record or in any authentic writing." Concededly, no such averment of the mode of recognition was made by petitioner in his amended complaint
and hence, no admission can be inferred as to the essential fact of due acknowledgment, which in turn is the very basis of any right to inherit.
With out such essential basis, petitioner's complaint should stand dismissed for lack of cause of action.

Without such essential basis of a valid acknowledgment made by the putative father during his lifetime, petitioner's action becomes — in the
language of Paulino — "one to compel recognition which cannot be brought after the death of the putative father." 4

I vote, therefore, for the affirmance of respondent court's dismissal order and for the dismissal of the herein petition.

Concepcion, C.J., concurs.

MAKALINTAL, J., dissenting:

I concur in the dissenting opinions of Mr. Justice Teehankee and Mr. Justice Barredo. The Civil Code (Art 278) does not merely speak of
recognition (voluntary), but of recognition in specific ways: "in the record of birth, a will, a statement before a court of record, or in any authentic
writing." The particular circumstance relied upon, among these four, constitutes an essential element of the cause of action and must therefore be
alleged for the complaint to be considered sufficient. If the test of sufficiency, as stated in the opinion of the majority, "is whether or not,
accepting the veracity of the facts alleged, the court could render a valid judgment upon the same in accordance with the prayer of the complaint,"
I do not believe that a judgment declaring herein petitioner as having been voluntarily acknowledged by his supposed father during the latter's
lifetime would be justified on the basis of the questioned allegation in the complaint. The mere statement that "Demetrio Galeon ... has
acknowledged and recognized him (petitioner) as such illegitimate (adulterous) child," even if accepted as true, would still leave the court
uncertain, and therefore unable to declare, just how such acknowledgment came about - whether in one of the modes enumerated in the Code, and
if so, which one, or in some other manner not authorized for purposes of voluntary acknowledgment.

Concepcion, C.J., concurs.

BARREDO, J., dissenting:

The main opinion assumes that the allegation in the petitioner's complaint to the effect that "Demetrio Galeon, ... during his lifetime, has
acknowledged and recognized him (petitioner) as such illegitimate child" is one of ultimate fact and, hence, complies with the ruling in Paulino
vs. Paulino, 3 SCRA 730. Personally, I am not sure that it is.

I would like to clarify that a distinction should exist, for purposes of pleading, between an ultimate fact and a conclusion of fact. Under the rules,
the former is what a pleading should alleged; the latter is not allowed. More importantly, there must be a difference between a conclusion of law,
on the one hand, and a conclusion of fact as well as an ultimate fact, on the other. To my mind, to say that a child has been acknowledged by his
father, whether as legitimate or illegitimate, is not strictly speaking a statement of an ultimate fact, it is at the very least a conclusion of fact, if it
is not a conclusion of law, both of which have no place in pleadings.

I maintain that the ultimate facts in a case of acknowledgment are those showing the specific form and manner of such acknowledgment. For
instance, if the acknowledgment has been made in a public instrument, that specific fact must be alleged in the pleading together with the
substance of the document, and in addition, the whole document or a copy thereof must either be reproduced in the body of the pleading or
attached thereto. This is clearly what Section 7 of Rule 8 requires, when it says:

Sec. 7. Action or defense based on document. — Whenever an action or defense is based upon a written instrument or document, the substance of
such instrument or document shall be set forth in the pleading, and the original or a copy thereof shall be attached to the pleading as an exhibit,
which shall be deemed to be a part of the pleading, or said copy may with like effect be set forth in the pleading.

As may be easily realized, the advantageous effect of this requirement is that if after all, the document does not exist or that from the very nature
of things the pleader knows that he cannot sustain the ultimate facts he needs to allege, he may refrain, as he should, from making the needed
allegation or even desist altogether from suing or defending, thus resulting in the avoidance of multiplicity of suits.

Accordingly, it is my opinion that the complaint of the petitioner in this case does not really pass the test laid down in Paulino, (supra) and,
therefore, the order appealed from is in the result, technically correct.

I disagree, however, with the way the trial court disposed of the incident. What should have been done, to avoid this appeal, was merely to require
the plaintiff to amend his complaint. While I recognize that the option to do amend or not to amend lies in the plaintiff, I believe that to simplify
procedures and save time and effort, members of the bar or practitioners should be made to understand that it is to the better interest of a more
speedy administration of justice, to which all lawyers are committed, for them to agree to more practical procedures suggested by the court, even
if they have to suffer a little loss of face, rather than insist on technical positions that may turn out later on as not approvable by the Supreme
Court. In other words, when a trial court orders amendment of a pleading, the party concerned would do well to abide with such order, unless, of
course, it can be clearly shown that the same is palpably capricious and whimsical because it has no basis whatsoever.

In view of all the foregoing, I vote to affirm the order appealed from because in effect it is technically correct, with the clarification, however,
that petitioner is not barred from filing an amended complaint making the proper allegations. In effect, the result of my vote would be practically
the same as the judgment in the main opinion, except that I feel that the correct legal basis thereof should be as above indicated.

Concepcion, C.J., concurs.

Separate Opinions

TEEHANKEE, J., dissenting:

I dissent from the main opinion, on the ground that the mere allegation in the amended Complaint that "plaintiff is an illegitimate (adulterous) son
of one Demetrio Galeon, who during his lifetime has (sic) acknowledged and recognized him as such illegitimate child" is not sufficient to
constitute a cause of action for partition against "defendants (who) are (the deceased's) only legitimate children with his lawfully wedded wife,
Felisa Venal.

Such action brought in 1963 long after the death in 1958 of the deceased Demetrio Galeon against the lawful and compulsory heirs of the
deceased to recover the alleged share in inheritance of petitioner was premised on the bare conclusion of fact that petitioner had been
"acknowledged and recognized ... as (an) illegitimate child."

As conceded in the main opinion,1 "the allegation in question is rather vague, as it does not state the manner or formin which
such voluntary recognition of petitioner was made, whether in a record of birth, a will, statement before a court of record, or in any authentic
writing" which are the only modes recognized in Article 278 of the Civil Code for making such voluntary recognition of an illegitimate child.

Without such official, judicial or written acknowledgment of the illegitimate child, which in such cases constitutes the ultimate fact, as against a
mere conclusion, which must be duly alleged in the Complaint as required by Rule 8, section 1, the Complaint does not state a sufficient cause of
action, for as was emphasized in Paulino vs. Paulino,2cited in the main opinion as stating the prevailing rule, "such acknowledgment
is essential and is the basis of (the) right to inherit," or to recover a claimed inheritance as in this case.

The lower court, therefore, properly dismissed the amended complaint for partition, on the ground of lack of personality or capacity on
petitioner's part to sue, since there was no "allegation or proof that plaintiff's filiation has been established" i.e. that due recognition of petitioner
as an illegitimate child was made in the official, judicial or authentic writing required by Article 278 of the Civil Code.

Without such official or written recognition, petitioner's proposed action would be but an exercise in futility, causing needless expense and
anxiety on the part of the widow and legitimate children as the lawful compulsory heirs of the deceased and unduly taking the time and attention
which the courts need for the disposition and resolution of truly contentious cases.
As to the procedural question of whether the status of petitioner as an acknowledged illegitimate child was deemed hypothetically admitted upon
private respondents' filing of their motion to dismiss petitioner's complaint on the ground of lack of cause of action, the case of Paulino thus
disposed of the question, holding that "(I)t is true that by their motion to dismiss the appellees are deemed to have admitted that the appellant is
the illegitimate spurious, not natural, child of the deceased Marcos Paulino. Such an admission, however, does not entitle her to inherit from her
alleged putative father. It is necessary to allege that her putative father had acknowledged and recognized her as such. Such acknowledgment is
essential and is the basis of her light to inherit. There being no allegation of such acknowledgment the action becomes one to compel recognition
which can not be brought after the death of the putative father."3

The ultimate fact of due acknowledgment and recognition of the illegitimate child may only be duly averred by alleging the mode whereby such
acknowledgment was made, as circumscribed by Article 278 of the Civil Code, whether in "a record of birth, a will, a statement before a court of
record or in any authentic writing." Concededly, no such averment of the mode of recognition was made by petitioner in his amended complaint
and hence, no admission can be inferred as to the essential fact of due acknowledgment, which in turn is the very basis of any right to inherit.
With out such essential basis, petitioner's complaint should stand dismissed for lack of cause of action.

Without such essential basis of a valid acknowledgment made by the putative father during his lifetime, petitioner's action becomes — in the
language of Paulino — "one to compel recognition which cannot be brought after the death of the putative father." 4

I vote, therefore, for the affirmance of respondent court's dismissal order and for the dismissal of the herein petition.

Concepcion, C.J., concurs.

MAKALINTAL, J., dissenting:

I concur in the dissenting opinions of Mr. Justice Teehankee and Mr. Justice Barredo. The Civil Code (Art 278) does not merely speak of
recognition (voluntary), but of recognition in specific ways: "in the record of birth, a will, a statement before a court of record, or in any authentic
writing." The particular circumstance relied upon, among these four, constitutes an essential element of the cause of action and must therefore be
alleged for the complaint to be considered sufficient. If the test of sufficiency, as stated in the opinion of the majority, "is whether or not,
accepting the veracity of the facts alleged, the court could render a valid judgment upon the same in accordance with the prayer of the complaint,"
I do not believe that a judgment declaring herein petitioner as having been voluntarily acknowledged by his supposed father during the latter's
lifetime would be justified on the basis of the questioned allegation in the complaint. The mere statement that "Demetrio Galeon ... has
acknowledged and recognized him (petitioner) as such illegitimate (adulterous) child," even if accepted as true, would still leave the court
uncertain, and therefore unable to declare, just how such acknowledgment came about - whether in one of the modes enumerated in the Code, and
if so, which one, or in some other manner not authorized for purposes of voluntary acknowledgment.

Concepcion, C.J., concurs.

BARREDO, J., dissenting:

The main opinion assumes that the allegation in the petitioner's complaint to the effect that "Demetrio Galeon, ... during his lifetime, has
acknowledged and recognized him (petitioner) as such illegitimate child" is one of ultimate fact and, hence, complies with the ruling in Paulino
vs. Paulino, 3 SCRA 730. Personally, I am not sure that it is.

I would like to clarify that a distinction should exist, for purposes of pleading, between an ultimate fact and a conclusion of fact. Under the rules,
the former is what a pleading should alleged; the latter is not allowed. More importantly, there must be a difference between a conclusion of law,
on the one hand, and a conclusion of fact as well as an ultimate fact, on the other. To my mind, to say that a child has been acknowledged by his
father, whether as legitimate or illegitimate, is not strictly speaking a statement of an ultimate fact, it is at the very least a conclusion of fact, if it
is not a conclusion of law, both of which have no place in pleadings.

I maintain that the ultimate facts in a case of acknowledgment are those showing the specific form and manner of such acknowledgment. For
instance, if the acknowledgment has been made in a public instrument, that specific fact must be alleged in the pleading together with the
substance of the document, and in addition, the whole document or a copy thereof must either be reproduced in the body of the pleading or
attached thereto. This is clearly what Section 7 of Rule 8 requires, when it says:

Sec. 7. Action or defense based on document. — Whenever an action or defense is based upon a written instrument or document, the substance of
such instrument or document shall be set forth in the pleading, and the original or a copy thereof shall be attached to the pleading as an exhibit,
which shall be deemed to be a part of the pleading, or said copy may with like effect be set forth in the pleading.

As may be easily realized, the advantageous effect of this requirement is that if after all, the document does not exist or that from the very nature
of things the pleader knows that he cannot sustain the ultimate facts he needs to allege, he may refrain, as he should, from making the needed
allegation or even desist altogether from suing or defending, thus resulting in the avoidance of multiplicity of suits.

Accordingly, it is my opinion that the complaint of the petitioner in this case does not really pass the test laid down in Paulino, (supra) and,
therefore, the order appealed from is in the result, technically correct.

I disagree, however, with the way the trial court disposed of the incident. What should have been done, to avoid this appeal, was merely to require
the plaintiff to amend his complaint. While I recognize that the option to do amend or not to amend lies in the plaintiff, I believe that to simplify
procedures and save time and effort, members of the bar or practitioners should be made to understand that it is to the better interest of a more
speedy administration of justice, to which all lawyers are committed, for them to agree to more practical procedures suggested by the court, even
if they have to suffer a little loss of face, rather than insist on technical positions that may turn out later on as not approvable by the Supreme
Court. In other words, when a trial court orders amendment of a pleading, the party concerned would do well to abide with such order, unless, of
course, it can be clearly shown that the same is palpably capricious and whimsical because it has no basis whatsoever.

In view of all the foregoing, I vote to affirm the order appealed from because in effect it is technically correct, with the clarification, however,
that petitioner is not barred from filing an amended complaint making the proper allegations. In effect, the result of my vote would be practically
the same as the judgment in the main opinion, except that I feel that the correct legal basis thereof should be as above indicated.
 3. Filipino VS. Fabricator VS. Magsino

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. L-47574 January 29, 1988

FILIPINAS FABRICATORS & SALES INC., FELIPE V. PESTANO, and BENITO UNCHUAN, petitioners,
vs.
THE HONORABLE CELSO L. MAGSINO, JUDGE OF THE COURT OF FIRST INSTANCE OF RIZAL AND ATLAS COPCO
(PHILIPPINES), INC., respondents.

GUTIERREZ, JR., J.:

By virtue of a dealership agreement, Filipinas Fabricators and Sales, Inc., (hereafter Filipinas) purchased on credit several products of Atlas
Copco (Phils.), Inc., (hereafter Atlas). As of January 27, 1976, Filipinas had accumulated on outstanding balance of P620,266.70. To settle that
account, Filipinas, with Felipe Y. Pestano and Benito Unchuan acting as sureties, entered into an agreement with Atlas on January 27, 1976,
assigning with recourse in favor of the latter some of its accounts receivables from personal debtors amounting to P361,745.98, the same to be
deducted from its outstanding balance. The parties further agreed to settle the balance in equal monthly installments and the total outstanding
balance to earn 14% interest per annum, plus attorney's fees, expenses and costs in case of litigation. (pp. 8-9, Rollo)

On January 21, 1977, a collection suit against Filipinas and its sureties was commenced by Atlas before the then Court of First Instance of Rizal
alleging that Filipinas total outstanding balance of P139,295.95 became due and demandable when all the assigned accounts with recourse and
the non-trade accounts had not been promptly paid; that with respect to the non-assigned accounts, Filipinas defaulted twice in the payment of
monthly installments.

Filipinas and surety Felipe Y. Pestano were duly served with summons while that issued to surety Benito Unchuan was returned unserved.

On March 2, 1977, counsel for Filipinas, et. al., requested a ten-day extension to file answer. However, before respondent Judge Celso L.
Magsino could act on said motion, the petitioners filed on March 11, 1977, a motion for bill of particulars alleging insufficiency of the complaint
and requested for a more precise statement of the matters alleged therein.

On March 15, 1977, the lower court resolve the petitioners' motion for extension and gave them ten (10) days from march 4, 1977 within which to
file answer.

In its order dated April 6, 1977, the respondent court required the petitioners to set for hearing the motion for bill of particulars with notice to
adverse party, "otherwise said motion shall be treated ... as a mere scrap of paper." The petitioners received this order on April 20, 1977.

On April 21, 1977, summons was served on the other surety, Benito Unchuan and on that same day, private respondent Atlas filed an "ex-parte
motion to declare defendants Filipinas and surety Pestano in default", with a prayer to present its evidence ex-parte.

In compliance with the order of the respondent court dated April 6, 1977, the petitioners filed a manifestation on April 26, 197, setting the hearing
of their motion on May 15, 1977.

In an order dated may 6, 1977, the respondent court held in abeyance the resolution of Atlas ex-parte motion to declare Filipinas, et al., in default,
pending expiration of Benito Unchuan's period within which to file answer.

On June 25, 1977, another "ex-parte motion to declare all the defendants in default" was filed by respondent Atlas alleging that petitioner Benito
Unchuan's period to file answer had already expired on May 6, 1977, and therefore, "all the defendants (could) now be properly declared in
default."

On August 10, 1977, respondent Judge Celso L. Magsino issued an omnibus order which reads:

The motion for bill of particulars filed by the defendants through counsel which was set for hearing on May 15, 1977 which was a Sunday is
denied for lack of merit considering that the matters sought to be alleged in the complaint are evidentiary in nature which may be presented at the
trial.

Acting on the ex-parte motion to declare defendants in default, it appearing that defendants failed to file an answer within the reglementary
period, the Court declares defendants Filipinas Fabricators & Sales, Inc., Felipe Y. Pestano and Benito Unchuan in default. Plaintiff is authorized
to present evidence ex-parte on November 4, 1977 at 8:30 in the morning. (p. 17, Rollo)

The petitioners' subsequent motion to set aside the above order with prayer to reconsider their motion for bill of particulars, was denied by
respondent court on October 14, 197, thus:
Considering the motion to set aside the order of default with prayer to reconsider motion for a Bill of Particulars filed by defendants thru counsel
and the opposition thereto, it appearing that the "Motion for Bill of Particulars" filed on March 12, 1977 without any notice of hearing was a mere
scrap of paper and did not produce any legal effect; that when herein defendants attempted on April 26, 1977 to cure the defect of its "Motion for
Bill of Particulars) by setting the motion for hearing, the plaintiff herein on April 25, 1977 had filed its motion to declare defendants Filipinas
Fabricators & Sales, Inc. and Felipe Pestano in default, and the period granted to them to file their responsive pleading had already expired on
March 14, 1977 without their having filed any responsive pleading, the Court denies the aforesaid motion to set aside the order of default for lack
of merit. (p. 22, Rollo)

The present petition for certiorari seeks to set aside and annul both orders of the respondent court.

The petition primarily questions the propriety of the motion for bill of particulars and simultaneously, declaring the petitioners to be in default.
The petitioners strongly urge that the filed motion for bill of particulars had definitely suspended the period within which to answer, citing
Section 1 (b), Rule 12 of the Revised Rules of Court which provides:

Stay of period to file responsive pleading. — After service of the bill of particulars or of a more definite pleading, or after notice of denial of his
motion, the moving party shall have the same time to serve his responsive pleading, if any is permitted by these rules, as that to which he was
entitled at the time of serving his motion, but not less than five (5) days in any event.

The petitioners state that, under the above provision, they were still allowed at least five (5) days from receipt of the order denying their motion
for bill of particulars within which to file answer and, to find them in default within this period is really premature and highly irregular for being
contrary to the Rules; thus, the respondent court, in declaring the petitioners in default before the lapse of the five-day period, had acted clearly in
excess of its jurisdiction and with grave abuse of discretion.

We agree with the petitioners' premise that a filed motion for bill of particulars renders the running of the reglementary period to answer,
suspended. This statement is, of course, accurate only if the filed motion is sufficient in form and substance, meaning, it complies with the
general requirements of motions under Sections 4 and 5 of Rule 15 of the Revised Rules of Court, which explicitly require a motion to
accompanied by a notice of hearing, to be served by the movant on the adverse parties concerned at least three (3) days before the hearing, and to
state therein the exact time and place of hearing. Section 6 of the same Rule further commands that "no motion shall be acted upon by the court,
without proof of service of the notice thereof except when the court is satisfied that the rights of the adverse party or parties are not affected."
These requirements under Rule 15, as we have often held, are mandatory, and the failure of the movant to comply with them renders his motion
fatal. (New Japan Motors, Inc. v. Perucho, 74 SCRA 14, 19 [1774]. See also Omico Mining Industrial Corporation v. Vallejos, 63 SCRA 285
[1975]; and Sacdalan v. Bautista, 56 SCRA 175 [1974]).

The petitioners' motion for bill of particulars filed on may 12, 1977, did not contain the notice of hearing and proof of service required by the
Rules. This kind of motion, as we have already held in several cases (Firme v. Reyes, 92 SCRA 713, 715 [1979], citing therein several cases), is
nothing but " mere scrap of paper." It presents no question which merits the attention and consideration of the court. In fact, it is not even
considered a motion. A defective motion of this kind does not interrupt the running of the period within which to file answer. As the motion filed
by the petitioners was nothing but a useless scrap of paper which did not affect at all the running of the reglementary period to answer, the
petitioners, who had not filed their answer to the complaint of respondent Atlas, should, as early as May 14, 1977 (the last day of the extended
period to answer), have been declared in default.

The petitioners also argue that, in denying the motion for a bill of particulars in the omnibus order of August 10, 1977, upon the ground that "...
the matters sought to be alleged in the complaint [were] evidentiary in nature which may be presented at the trial", the respondent court had in
effect clearly entertained the defective motion. Therefore, when the respondent court subsequently treated it as "a mere scrap of paper" in its
subsequent order of October 14, 1977, it committed a serious error.

The argument has no merit. As we earlier stated, a motion without notice of hearing is nothing but a piece of paper filed in court, which should be
disregarded and ignored. Even without the respondent court stating in the questioned orders its other reasons for throwing out the petitioners'
defective motion, the default order would still be valid. The additional finding that the matters which the petitioners wanted to be alleged in the
complaint were merely evidentiary shows that even equitable considerations are lacking in the instant petition.

Significantly, the fact that the court had taken cognizance of the defective motion first, by requiring the parties to set it for hearing and second,
when it denied the same for lack of merit in its omnibus motion, did not cure the defect nor alter the nature of the defective motion. In Andrada v.
Court of Appeals (60 SCRA 379, 382), we held: "[T]he subsequent action of the court hereon does not cure the flaw, for a motion with a notice
fatally defective is a "useless piece of paper."

Even on the assumption that the respondent court's omnibus order was irregular for denying the petitioners' defective motion and at the same time
declaring them in default, still, we find the default order valid. The petitioners, who admit in paragraph 6 of their petition that a copy of the
omnibus order denying the motion for bill of particulars was received on August 30, 1977, again failed to file their answer within five (5) days
from receipt thereof.

IN VIEW OF THE FOREGOING, the petition for certiorari is hereby DISMISSED for lack of merit. The questioned orders are AFFIRMED.

SO ORDERED.
 4. Bautista vs. Teodoro

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-8894 May 31, 1957

MARIA MATIAS DE BAUTISTA, assisted by her husband LORENZO BAUTISTA, plaintiff-appellant,

vs.
JOSE TEODORO, JR., defendant-appellee.

Jose S. Sarte for appellant.

Abad Santos and Pablo for appellee.

PADILLA, J.:

The plaintiff is the lessee of a house owned by the defendant located at 1035 Bilibid Viejo, Quiapo, Manila. On 8 September 1954 the plaintiff
brought an action in the Court of First Instance of Manila to recover from the defendant the sum of P10,000 representing expenses claimed to
have been incurred in the repair of the house leased by her; to annul a second mortgage on real estate executed by her in favor of the defendant,
the same having been executed through undue influence; to collect from the defendant moral and exemplary damages resulting from "moral
anguish, mental torture, and social and professional embarrassment suffered" by her due to the filing of the defendant against her of a complaint
for detainer; to secure a reduction in the monthly rental of the house leased by her from the defendant from P300 to P200; and to obtain such
other remedies as justice, law and equity warrant.

On 17 September 1954 the defendant filed a motion praying that the plaintiff be directed to amend her complaint or to submit a bill of particulars
specifying with definiteness whether the alleged contract of lease is verbal or written and its precise term and conditions regarding repairs and the
dates when the repairs were made and the cost of each; to furnish the defendant with a copy of the alleged instrument of second mortgage
executed by her in his favor; and to specify the nature and amount of damages sought to be recovered by her. On 8 October 1954 the plaintiff
filed an opposition to the motion.

The Court set the hearing of the motion for 9 October 1954. On 26 October 1954, acting upon the defendant's motion and the plaintiff's objection
thereto, the Court granted the motion and ordered the plaintiff to: file third amended pleading or a bill of particulars within ten (10) days from the
receipt of a copy of this order." Motion for reconsideration filed on 4 November 1954 was denied by the Court on 11 November 1954.

On 17 November 1954 the plaintiff filed a motion praying that she "be allowed an extension of two weeks from date of this motion to file the
required bill of particulars." On 23 November 1954 the Court granted the motion. The plaintiff, however, failed to file the required bill of
particulars within the time prayed for by her and granted by the Court.

On 3 December 1954 the defendant moved for the dismissal of the plaintiff's complaint for her failure to prosecute her action, she having failed to
comply with the order of the Court of 26 October 1954, in accordance with section 3, Rule 30. On 13 December 1954 the Court granted the
motion and dismissed the plaintiff's complaint. Motion for reconsideration filed on 5 January 1955 was denied by the Court on 10 January 1955.
The plaintiff has appealed.

Section 3, Rule 30, provides that —

When plaintiff fails to appear at the time of the trial, or to prosecute his action for an unreasonable length of time, or to comply with these rules
or any order of the court, the action may be dismissed upon motion of the defendant or upon the court's own motion. This dismissal shall have the
effect of an adjudication upon the merits, unless otherwise provided by court.

After the Court had ordered the appellant either to amend her complaint or to file a bill of particulars within ten days from receipt of notice, on 17
November 1955 she moved that she be granted two weeks from that date to file a bill of particulars. This the Court granted. But she failed to file
the bill of particulars within that period. If she thought that she could not file it on time, she should have seasonably explained to the Court the
reason why she could not do so and prayed that she be granted another extension of time within which to comply with the order of the Court, as
she previously had done. Said this Court in Smith Bell & Co., Ltd. vs. American President Lines Ltd., (99 Phil., 879) —

. . . The dismissal of an action pursuant to this rule rest upon the sound discretion of the court and will not be reversed on appeal in the absence of
abuse. The burden of showing abuse of judicial discretion is upon appellant since every presumption is in favor of the correctness of the court's
action.

Section 3. Rule 16, providing that —

If an order of the court to make more definite and certain or for a bill of particulars is not obeyed within ten (10) days after notice of the order
or within such, other time as the court may fix, the court may strike out the pleading to which the motion was directed or make such other order
as it deems just. (Emphasis supplied.)
is not in conflict with the provisions of section 3, Rule 30. On the contrary, it strengthens the authority of the Court to dismiss the appellant's
complaint.

As the appellant claims in her complaint that she made numerous repairs on the house leased by her from the defendant during a period of almost
twenty year and that she suffered damage due to the filing by the defendant of a complaint for detainer against her, the appellee is entitled to
know with certainty the date, nature, extent and cost of each repair that the appellant made and the nature and amount of damage she seeks to
recover to enable him to prepare his defense. The appellee should be informed as to when the expenses for repairs were incurred to determine
whether the action was brought within the statutory period.

The order appealed from is affirmed, with costs against the appellant.

Bengzon, Montemayor, Reyes, A., Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., Endencia and Felix, JJ.,concur.
 5. Calimlim VS. Ramirez

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-34362 November 19, 1982

MODESTA CALIMLIM AND LAMBERTO MAGALI IN HIS CAPACITY AS ADMINISTRATOR OF THE ESTATE OF DOMINGO
MAGALI, petitioners,
vs.
HON. PEDRO A. RAMIREZ IN HIS CAPACITY AS PRESIDING JUDGE OF THE COURT OF FIRST INSTANCE OF
PANGASINAN, BRANCH I, and FRANCISCO RAMOS, respondents.

Eugenio Ramos for petitioners.

Rogelio P. Closa for respondents.

VASQUEZ, J.:

The dismissal of Civil Case No. SCC-180 filed by the herein petitioners in the respondent Court against the private respondent is sought to be
annulled and set aside by this Petition For Review On Certiorari.

The antecedent material facts are not disputed. Sometime in 1961, a judgment for a sum of money was rendered in favor of Independent
Mercantile Corporation against a certain Manuel Magali by the Municipal Court of Manila in Civil Case No. 85136. After said judgment became
final, a writ of execution was issued on July 31, 1961. The Notice of Levy made on September 21, 1961 on a parcel of land covered by Transfer
Certificate of Title No. 9138 registered in the name of "Domingo Magali, married to Modesta Calimlim", specified that the said levy was only
against "all rights, title, action, interest and participation of the defendant Manuel Magali over the parcel of land described in this title. " The
Certificate of Sale executed by the Provincial Sheriff of Pangasinan on October 17, 1961 in favor of Independent Mercantile Corporation also
stated that the sale referred only to the rights and interest of Manuel Magali over the land described in TCT No. 9138. Manuel Magali is one of
the several children of Domingo Magali who had died in 1940 and herein petitioner Modesta Calimlim.

However, when the Sheriff issued the final Deed of Sale on January 25, 1963, it was erroneously stated therein that the sale was with respect to
"the parcel of land described in this title" (referring to TCT No. 9138) and not only over the rights and interest of Manuel Magali in the same. The
execution of the said final Deed of Sale was annotated at the back of said title.

On February 23, 1967, Independent Mercantile Corporation filed a petition in the respondent Court to compel Manuel Magali to surrender the
owner's duplicate of TCT No. 9138 in order that the same may be cancelled and a new one issued in the name of the said corporation. Not being
the registered owner and the title not being in his possession, Manuel Magali failed to comply with the order of the Court directing him to
surrender the said title. On June 20, 1967, Independent Mercantile Corporation filed an ex-parte petition to declare TCT No. 9138 as cancelled
and to issue a new title in its name. The said petition was granted by the respondent Court and in its Order dated July 13, 1967, it directed the
issuance of a new certificate of title in the name of the Independent Mercantile Corporation and the cancellation of TCT No. 9138. By virtue of
said Order, the Register of Deeds of Pangasinan issued a new title in the name of the corporation, Identified as TCT No. 68568.

On November 21, 1967, petitioner Modesta Calimlim, surviving spouse of Domingo Magali, upon learning that her husband's title over the parcel
of land had been cancelled, filed a petition with the respondent Court, sitting as a cadastral court, praying for the cancellation of TCT No. 68568.
An opposition to the said petition was filed by Independent Mercantile Corporation. After the parties submitted their respective Memoranda, the
respondent Court issued an Order dated June 3, 1968 dismissing the petition. (Rollo, pp. 31-38.)

The herein petitioners did not appeal the dismissal of the petition they filed in LRC Record No. 39492 for the cancellation of TCT No. 68568.
Instead, on January 11, 1971, they filed the complaint in Civil Case No. SCC-180 praying for the cancellation of the conveyances and sales that
had been made with respect to the property, covered by TCT No. 9138 previously registered in the name of Domingo Magali, married to Modesta
Calimlim. Named as defendant in said civil case was herein private respondent Francisco Ramos who claimed to have bought the property from
Independent Mercantile Corporation on July 25, 1967. Private respondent Francisco Ramos, however, failed to obtain a title over the property in
his name in view of the existence of an adverse claim annotated on the title thereof at the instance of the herein petitioners.

Private respondent Francisco Ramos filed a Motion To Dismiss Civil Case No. SCC-180 on the ground that the same is barred by prior
judgement or by statute of limitations (Rollo. pp. 42-45). Resolving the said Motion, the respondent Court, in its Order dated April 21, 1971,
dismissed Civil Case No. SCC- 180 on the ground of estoppel by prior judgment. (Ibid., pp, 10-13.) A Motion For Reconsideration filed by the
petitioners was denied by the respondent Judge in his Order of September 2, 1971. (Ibid., pp. 13-15.) A second Motion For Reconsideration was
similarly denied in the Order dated September 29, 197 1. (Rollo, pp. 16-17.) Hence, this Petition.

We find merit in this appeal.

It is error to consider the dismissal of the petition filed by the herein petitioner in LRC Record No. 39492 for the cancellation of TCT No. 68568
as a bar by prior judgment against the filing of Civil Case No. SCC-180. In order to avail of the defense of res judicata, it must be shown, among
others, that the judgment in the prior action must have been rendered by a court with the proper jurisdiction to take cognizance of the proceeding
in which the prior judgment or order was rendered. If there is lack of jurisdiction over the subject-matter of the suit or of the parties, the judgment
or order cannot operate as an adjudication of the controversy. (2 Moran Comments on the Rules of Court, 1970 Edition, p. 364.) This essential
element of the defense of bar by prior judgment or res judicata does not exist in the case presently considered.

The petition filed by the herein petitioners in LRC Record No. 39492 was an apparent invocation of the authority of the respondent Court sitting
as a land registration court, Although the said petition did not so state, that reliance was apparently placed on Section 112 of the Land
Registration Act. It has been settled by consistent rulings of this Court that a court of first instance, acting as a land registration court, is a court of
limited and special jurisdiction. As such, its proceedings are not adequate for the litigation of issues pertaining to an ordinary civil action, such as,
questions involving ownership or title to real property. (Bareng vs. Shintoist Shrine and Japanese Charity Bureau, 83 SCRA 418; Manalo vs.
Mariano, 69 SCRA 80; In re: Nicanor T Santos, 102 SCRA 747; Santos vs. Aquino, 101 SCRA 377.) In Hu chon Sunpongco vs. Heirs of Nicolas
Ronquillo, L- 27040, December 19, 1970, 36 SCRA 395, we have held that:

Section 112 of Act 496 confers authority upon the land registration court to order the cancellation, alteration or amendment of a certificate of title
but withdraws from the Court the power to pass upon any question concerning ownership of the registered property, or any incident where the
issues involved have become controversial.

It may hardly be questioned that the issues raised by the petitioners in their petition to cancel TCT No. 68568 refer to the ownership or title over
the property covered thereby. The said petition presented before the respondent Court in the exercise of its limited jurisdiction as a cadastral
court, the question of who should be considered the true and lawful owner of the parcel of land embraced in said title. The petitioners alleged
therein that they are the true owners of the property, and that TCT No. 68568 which they sought to cancel was issued as a result of the errors
which were not of their own making. In short, the petition raised a highly controversial matter which is beyond the judicial competence of a
cadastral court to pass upon or to adjudicate.

It may neither be claimed that the parties have mutually agreed to submit the aforesaid issues for the determination by the court, it being a fact
that herein private respondent was not a party in the petition in LRC Record No. 39492. Incidentally, although the said petition was filed by the
herein petitioners on November 21, 1967, the Opposition filed by Independent Mercantile Corporation to the said petition made no mention of the
alleged sale of the property in question in favor of private respondent Francisco Ramos on July 5, 1967. This circumstance places in grave doubt
the sincerity of said sale and the claim that the private respondent was an innocent purchaser for value of the property in question.

In the order of the respondent Judge dated September 29, 1971 denying the second motion for reconsideration, he cited the case of Tijam vs.
Sibonghanoy, 23 SCRA 29, to uphold the view that the petitioners are deemed estopped from questioning the jurisdiction of the respondent Court
in having taken cognizance of the petition for cancellation of TCT No. 68568, they being the ones who invoked the jurisdiction of the said Court
to grant the affirmative relief prayed for therein. We are of the opinion that the ruling laid down in Sibonghanoy may not be applied herein.
Neither its factual backdrop nor the philosophy of the doctrine therein expounded fits the case at bar.

A rule that had been settled by unquestioned acceptance and upheld in decisions so numerous to cite is that the jurisdiction of a court over the
subject-matter of the action is a matter of law and may not be conferred by consent or agreement of the parties. The lack of jurisdiction of a court
may be raised at any stage of the proceedings, even on appeal. This doctrine has been qualified by recent pronouncements which stemmed
principally from the ruling in the cited case of Sibonghanoy. It is to be regretted, however, that the holding in said case had been applied to
situations which were obviously not contemplated therein. The exceptional circumstance involved in Sibonghanoy which justified the departure
from the accepted concept of non-waivability of objection to jurisdiction has been ignored and, instead a blanket doctrine had been repeatedly
upheld that rendered the supposed ruling in Sibonghanoy not as the exception, but rather the general rule, virtually overthrowing altogether the
time-honored principle that the issue of jurisdiction is not lost by waiver or by estoppel.

In Sibonghanoy, the defense of lack of jurisdiction of the court that rendered the questioned ruling was held to be barred by estoppel by laches. It
was ruled that the lack of jurisdiction having been raised for the first time in a motion to dismiss filed almost fifteen (15) years after the
questioned ruling had been rendered, such a plea may no longer be raised for being barred by laches. As defined in said case, laches is "failure or
neglect, for an unreasonable and unexplained length of time, to do that which, by exercising due diligence, could or should have been done
earlier; it is negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert has
abandoned it or declined to assert it."

The petitioners in the instant case may not be faulted with laches. When they learned that the title to the property owned by them had erroneously
and illegally been cancelled and registered in the name of another entity or person who had no right to the same, they filed a petition to cancel the
latter's title. It is unfortunate that in pursuing said remedy, their counsel had to invoke the authority of the respondent Court as a cadastral court,
instead of its capacity as a court of general jurisdiction. Their petition to cancel the title in the name of Independent Mercantile Corporation was
dismissed upon a finding by the respondent Court that the same was "without merit." No explanation was given for such dismissal nor why the
petition lacked merit. There was no hearing, and the petition was resolved solely on the basis of memoranda filed by the parties which do not
appear of record. It is even a possibility that such dismissal was in view of the realization of the respondent Court that, sitting as a cadastral court,
it lacked the authority to entertain the petition involving as it does a highly controversial issue. Upon such petition being dismissed, the
petitioners instituted Civil Case No. SCC-180 on January 1, 1971, or only two and one-half years after the dismissal of their petition in LRC
Record No. 39492. Hence, we see no unreasonable delay in the assertion by the petitioners of their right to claim the property which rightfully
belongs to them. They can hardly be presumed to have abandoned or waived such right by inaction within an unreasonable length of time or
inexcusable negligence. In short, their filing of Civil Case No. SCC-180 which in itself is an implied non-acceptance of the validity of the
proceedings had in LRC Record No. 39492 may not be deemed barred by estoppel by laches.

It is neither fair nor legal to bind a party by the result of a suit or proceeding which was taken cognizance of in a court which lacks jurisdiction
over the same irrespective of the attendant circumstances. The equitable defense of estoppel requires knowledge or consciousness of the facts
upon which it is based. The same thing is true with estoppel by conduct which may be asserted only when it is shown, among others, that the
representation must have been made with knowledge of the facts and that the party to whom it was made is ignorant of the truth of the matter. (De
Castro vs. Gineta, 27 SCRA 623.) The filing of an action or suit in a court that does not possess jurisdiction to entertain the same may not be
presumed to be deliberate and intended to secure a ruling which could later be annulled if not favorable to the party who filed such suit or
proceeding. Instituting such an action is not a one-sided affair. It can just as well be prejudicial to the one who filed the action or suit in the event
that he obtains a favorable judgment therein which could also be attacked for having been rendered without jurisdiction. The determination of the
correct jurisdiction of a court is not a simple matter. It can raise highly debatable issues of such importance that the highest tribunal of the land is
given the exclusive appellate jurisdiction to entertain the same. The point simply is that when a party commits error in filing his suit or
proceeding in a court that lacks jurisdiction to take cognizance of the same, such act may not at once be deemed sufficient basis of estoppel. It
could have been the result of an honest mistake, or of divergent interpretations of doubtful legal provisions. If any fault is to be imputed to a party
taking such course of action, part of the blame should be placed on the court which shall entertain the suit, thereby lulling the parties into
believing that they pursued their remedies in the correct forum. Under the rules, it is the duty of the court to dismiss an action "whenever it
appears that the court has no jurisdiction over the subject matter." (Sec. 2, Rule 9, Rules of Court.) Should the court render a judgment without
jurisdiction, such judgment may be impeached or annulled for lack of jurisdiction (Sec. 30, Rule 132, Ibid), within ten (10) years from the finality
of the same. (Art. 1144, par. 3, Civil Code.)

The inequity of barring the petitioners from vindicating their right over their property in Civil Case No. SCC-180 is rendered more acute in the
face of the undisputed fact that the property in question admittedly belonged to the petitioners, and that the title in the name of the private
respondent was the result of an error committed by the Provincial Sheriff in issuing the deed of sale in the execution proceeding. The justness of
the relief sought by herein petitioners may not be ignored or rendered futile by reason of a doctrine which is of highly doubtful applicability
herein.

WHEREFORE, the Orders appealed from are hereby REVERSED and SET ASIDE. The Motion To Dismiss filed by the private respondent in
Civil Case No. SCC-180 shall be deemed denied and the respondent Court is ordered to conduct further proceedings in the case. With costs
against the private respondent.

SO ORDERED.
 6. Pangilinan VS. CA

SECOND DIVISION

[G.R. No. 83588. September 29, 1997]

Spouses ADORACION C. PANGILINAN and GEORGE B. PANGILINAN represented in this suit by their Attorney-in-fact, ARCADIO
S. MALLARI, petitioner, vs. COURT OF APPEALS, JOSE R. CANLAS and LUIS R. CANLAS and RURAL BANK OF STA. RITA,
INC., respondents.

DECISION

TORRES, JR., J.:

This petition for review seeks to set aside the January 14, 1988 decision [1] and May 31, 1988 resolution of the Court of Appeals in CA-GR CV
No. 09175 which reversed the December 12, 1985 decision of the Regional Trial Court, Third Judicial Region, Branch XL VIII, San Fernando,
Pampanga.

On May 18, 1968, petitioners Pangilinan (husband and wife), and the private respondents Jose R. Canlas and Luis R. Canlas entered into a
Cotract to Buy and To Sell a subdivision lot at Sto. Nio Village, San Fernando, Pampanga, particularly Lot No. 1, Block 3; with an area of 577
square meters at P 30.00 per square meter, for a total contract price of P 17,310.00, payable on installment basis at P 189.02 a month for 120
months.[2] The sum of P 1, 731 representing 10% of the total price of the lot was paid by the petitioner to the private respondents and thereafter
monthly installments which amounted to about 85% of the total price were effected as of January, 1974; the last payment thereof was made on
May 14, 1975 (Exh. C-54). [3]Paragraph 5 of the contract provided for automatic extrajudicial rescission upon default in payment of three (3)
consecutive monthly installments or to comply with any of the terms and conditions, with forfeitures of installment as rents and as payment for
damages. The said contract to buy and to sell as well as the receipts of various payments made by petitioners in favor of private respondents were
given by former to Mr. Arcadio S. Mallari. Mr. Mallari equipped with a Special Power of Attorney dated May 15, 1983 from the spouses
Adoracion C. Pangilinan and George Pangilinan went personally to the private respondents and requested them to release the title of the lot as he
would pay in full the alleged remaining balance of P 1,875.00. The private respondents told him to return after two weeks as they would confer
with each other. When he returned, the private respondent Jose R. Canlas told him that they were not in a position to release the title of said lot
because the same had already been disposed of. Mr. Mallari discovered that the lot was mortgaged to the Rural Bank of Sta. Rita. On July 25,
1983, after the lapse of eight years from the last date of payment, he instituted a complaint for Specific Performance and Damages docketed as
Civil Case No. 6843 entitled "Spouses Adoracion G. Pangilinan, et. al. vs. Jose R. Canlas, et. al. before the Regional Trial Court, Branch XLVIII,
San Fernando, Pampanga. On December 12, 1985, the trial court rendered its decision, the decretal part of which provides:

In view of all the foregoing, judgment is hereby rendered against the defendants Jose R. Canlas and Luis R. Canlas ordering them the following:

1) to accept the final payment or balance of the consideration of the lot in the amount of P 2,277.82;

2) to execute the final deed of sale of the lot in question in favor of herein plaintiffs;

3) to pay the mortgage loan to the defendant Rural bank for the purpose of releasing the said lot embraced in Transfer Certificate of Title No.
89745-R, Registry of Deeds for the Province of Pampanga in order to free the said lot from encumbrances;

4) to pay the plaintiff the amount of P 5,000.00 for attorneys fees; P 2,000.00 for litigation expenses;

5) to pay plaintiff the amount of P10,000.00 for exemplary damages as a corrective measure due to malevolent act of defendants Canlases;

6) to pay the costs of the suit.

The counterclaim interposed by the defendant Jose R. Canlas are hereby dismissed for lack of evidence.

The defendant Rural Bank of Sta. Rita Incorporated is hereby absolved of any liability but its counterclaim is hereby dismissed for lack of
evidence.

SO ORDERED. [4]

Private respondents appealed the abovementioned decision of the Court of Appeals which on January 14, 1988, promulgated its judgment which
reversed and set aside the decision of the trial court, to wit:

"WHEREFORE, the decision appealed from is hereby SET ASIDE. Another judgment is hereby entered DISMISSING Civil Case No. 6843
before the court below. The counter-claim of defendants-appellants is hereby DISMISSED.

SO ORDERED. [5]

Petitioner filed a motion for reconsideration but was denied for lack of merit by the Court of Appeals in its resolution of May 31, 1988. Hence,
petitioner instituted the instant petition for review raising two (2) assignment of errors, viz.:
1) THE COURT OF APPEALS ERRED THAT A CREDITOR CAN UNILATERALLY AND SUMMARILY RESCIND A CONTRACT TO
SELL A SUBDIVISION LOT;

2) THE COURT OF APPEALS ERRED IN RULING THAT HEREIN PETITIONERS ARE GUILTY OF LACHES.

Petitioners vigorously argue that automatic rescission of a contract extrajudicially undertaken by a creditor maybe effected only if the defaulter
was duly informed of the intention of the creditor to rescind the contract. If the defaulter will not object, then the creditor may proceed to
extrajudicially rescind or cancel the contract, however, if the defaulter will manifest his objection, then the matter of rescission will be subjected
to judicial determination. They further alleged that even if there is a waiver stipulated in the contract of adhesion, regarding rescission, such
waiver will not apply because the waiver must be unequivocal and intelligently made. Moreover, granting that petitioner have committed a breach
of contract for their failure to pay the balance of the consideration, yet this breach is slight, considering that 85% of the total consideration for the
lot has been paid.

The Court is not persuaded.

The fifth paragraph of the Contract to Buy and to Sell pertinently reads:

This contract shall be considered automatically rescinded and canceled and of no further force or effect, upon failure of the VENDEE to pay
when due, three (3) consecutive monthly installments or to comply with any of the terms and conditions hereof, in which case the VENDORS
shall have the right to resell said parcel of land to any person or purchaser, as if this contract has never been entered into. In such case of
cancellation of this contract, all amounts paid in accordance with the agreement together with all the improvements made on the premises shall be
considered as rents paid for the use and occupation of the above-mentioned premises and as and as payment for the damages suffered for the
failure of the VENDEE to ful fill his part of this agreement; and for the VENDEE hereby renounces his right to demand or reclaim the return of
the same obliges himself to peacefully vacate the premises and deliver the same to the VENDORS. [6]

Article 1592 [7] of the New Civil Code, requiring demand by suit or by notarial act in case the vendor of realty wants to rescind does not apply to
a contract to sell but only to contract of sale. In contracts to sell, where ownership is retained by the seller and is not to pass until the full
payment, such payment, as we said, is a positive suspensive condition, the failure of which is not a breach, casual or serious, but simply an event
that prevented the obligation of the vendor to convey title from acquiring binding force. To argue that there was only a casual breach is to proceed
from the assumption that the contract is one of absolute sale, where non-payment is a resolutory condition, which is not the case. [8]

The applicable provision of law in instant case is Article 1191 of the New Civil Code which provides as follows:

Art. 1191. The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with what is incumbent
upon him.

The injured party may choose between the fulfillment and the rescission of the obligation, with the payment of damages in either case. He may
also seek rescission, even after he has chosen fulfillment, if the latter should become impossible.

The Court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a period.

This is understood to be without prejudice to the rights of third persons who have acquired the thing, in accordance with articles 1385 and 1388
and the Mortgage Law. (1124)

Pursuant to the above, the law makes it available to the injured party alternative remedies such as the power to rescind or enforce fulfillment of
the contract, with damages in either case if the obligor does not comply with what is incumbent upon him. There is nothing in this law which
prohibits the parties from entering into an agreement that a violation of the terms of the contract would cause its cancellation even without court
intervention. The rationale for the foregoing is that in contracts providing for automatic revocation, judicial intervention is necessary not for
purposes of obtaining a judicial declaration rescinding a contract already deemed rescinded by virtue of an agreement providing for rescission
even without judicial intervention, but in order to determine whether or not the rescission was proper. Where such propriety is sustained, the
decision of the court will be merely declaratory of the revocation, but it is not itself the revocatory act. [9] Moreover, the vendors right in contracts
to sell with reserved title to extrajudicially cancel the sale upon failure of the vendee to pay the stipulated installments and retain the sums and
installments already received has long been recognized by the well-established doctrine of 39 years standing.[10] The validity of the stipulation in
the contract providing for automatic rescission upon non-payment cannot be doubted. It is in the nature of an agreement granting a party the right
to rescind a contract unilaterally in case of breach without need of going to court. Thus, rescission under Article 1191 was inevitable due to
petitioners failure to pay the stipulated price within the original period fixed in the agreement.

On the second assigned error, petitioners aver that the doctrine of laches is not applicable in this particular case because (1) petitioners failure to
pay in full the balance of 15% of the total price of the lot was due to the reneged obligation of the private respondent to improve the subdivision
and install facilities; and, (2) the mortgage of the lot to the Rural Bank of Sta. Rita was done without their consent and knowledge.

The same has no merit. It must be noted that upon a careful examination of the records of this case, it appears that the contention of the
petitioners that their failure to pay the balance of 15% of the total contract price of the lot was due to the inability of the private respondent to
improve the subdivision and install facilities which was raised only for the first time on appeal. They did not raised this issue before the lower
courts. It is settled that an issue which was neither averred in the complaint nor raised during the trial in the court below cannot be raised for the
first time on appeal.[11] Issues of fact and arguments not adequately brought to the attention of the trial court need not be and ordinarily will not be
considered by a reviewing court as they cannot be raised for the first time on appeal. [12] Assuming arguendo that it was raised before the trial
court, the same would be without merit because the failure of the private respondents to install facilities would not deter them from asking for the
rescission of the agreement if petitioners failed to comply with their obligation to pay the monthly installments when they become due, otherwise,
the right of rescission would be rendered inutile. In the same vein, petitioners by virtue of their contract with private respondents should have
complied in good faith with its terms and conditions being the law between them. From the moment the contract is perfected, the parties are
bound not only to the fulfillment of what has been expressly stipulated but also to all consequences which, according to their nature, may be in
keeping with good faith, usage and law.[13] The Contract to Buy and to Sell, specifically paragraph 5 thereof, not being contrary to law, morals,
good customs, public order or public policy, is valid and binding between the parties thereto.

As stated by the appellate court, thus:

The peculiar fact that militates against the cause of the appellees is that the appellees spouses Pangilinan did not directly and personally prosecute
the present proceedings. As shown from the records, Mr. Mallari had equipped himself with the special power of attorney in his favor by the
appellees executed only on May 15, 1983 or about six (should be eight) years from the date of last payment, made on May 14, 1975 for the
January, 1974 installment, during which time, the actual buyers, the Pangilinans had not by themselves personally shown interest in compelling
the appellants to accept the remaining balance of the purchase price of the said subdivision lot, to execute in their favor the Deed of Absolute Sale
and deliver to them the Transfer Certificate of Title over the said property. The aforesaid circumstances constitute laches. There was failure or
neglect on the part of the Pangilinan spouses for an unreasonable and unexplained length of time to do that which by exercising due diligence or
could have been done earlier, such failure or negligence warrants presumption that they had abandoned or declined to assert such right (Tejado
vs. Zamacoma, 138 SCRA 78).

Further, the Court of Appeals, stated:

The disturbing fact in the case at bar is that the spouses Pangilinan who bought the subject lot from the appellant seller did not directly and
personally prosecute the present case from May, 1975 (date of last payment for January, 1974 installment). Mr. Arcadio S. Mallari, the alleged
attorney-in-fact of the said spouses, represented them in the instant case which was filed only on July 25, 1983. He has an alleged special power
of attorney in his favor by the appellees which appears to have been executed on May 15,1983 or about eight (8) years from the date of last
payment on May 14, 1975 by the buyer spouses for the January, 1974 installment. Mr. Mallari was the only witness for the prosecution. He alone
identified the said power of attorney executed in his favor and testified on its due execution. The notary public who appears to have notarized the
said document was not presented neither did the Pangilinan spouses appear in the lower court. There was no mention in his (Mallari) testimony of
the whereabouts of the said Pangilinan spouses nor why the instant case had to be filed by him for them. The Court has doubts whether or not the
said Pangilinan spouses are really interested in the prosecution of this case. And more than this, in the mind of the Court, the genuineness of the
said special power of attorney has not been satisfactorily proved.

It also bears emphasis that from the said last payment on May 14, 1975, for the January, 1974 installment up to the execution of the alleged
special power of attorney (assuming the same to be true) in favor of Mr. Mallari, on May 15, 1983, and the filing of Mallari of the instant case
(which covers a period of eight (8) years)* the actual buyers, the Pangilinan spouses had not by themselves personally shown interest in
compelling the appellants to accept the remaining balance of the purchase price of the subdivision lot, to execute in their favor the Deed of
Absolute Sale and deliver to them the Transfer Certificate of Title over the said lot. Such failure/neglect on their part constitutes laches because
for an unreasonable and unexplained length of time [eight (8) years], they failed/neglected to do that which by exercising due diligence could or
should have been done earlier, and as stated in the decision rendered in the present appeal, such failure or negligence warrants a presumption that
they had abadoned or declined to assert such right.

Explicitly, spouses Pangilinan instead of being vigilant and diligent in asserting their rights over the subject property had failed to assert their
rights when the law requires them to act. Laches or stale demands is based upon grounds of public policy which requires, for the peace of society,
the discouragement of stale claims and unlike the statute of limitations, is not a mere question of time but is principally a question of the inequity
or unfairness of permitting a right or claim to be enforced or asserted. [14]

The legal adage finds application in the case at bar. Tempus enim modus tollendi obligationes et actiones, quia tempus currit contra desides et sui
juris contemptores For time is a means of dissipating obligations and actions, because time runs against the slothful and careless of their own
rights.

IN VIEW WHEREOF, the petition is hereby DENIED and the decision of respondent court AFFIRMED in toto.

Regalado, (Chairman), and Puno, JJ., concur.

Mendoza, J., on leave.

 7. Regalado VS. Go

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 167988 February 6, 2007

MA. CONCEPCION L. REGALADO, Petitioner,

vs.
ANTONIO S. GO, Respondent.

DECISION

CHICO-NAZARIO, J.:

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, of the Resolution 1 dated 30 August 2004 of the Court of Appeals,
finding petitioner Ma. Concepcion L. Regalado (Atty. Regalado) guilty of indirect contempt. Likewise assailed in this petition is the
Resolution2 denying her Motion for Reconsideration. The dispositive portion of the Resolution reads:

WHEREFORE, Atty. Ma. Concepcion Regalado of De Borja Medialdea Bello Guevarra and Gerodias Law Offices is declared GUILTY of
INDIRECT CONTEMPT and is ordered to pay a fine of Five Thousand Pesos (P5,000), with a STERN WARNING that a repetition of the same
or similar acts in the future will be dealt with more severely. The imposed fine should be paid to this Court upon finality hereof.

Let a copy of this resolution be furnished the Bar Confidant (sic), the Integrated Bar of the Philippines and the Court Administrator for
investigation and possible administrative sanction.3

The present controversy stemmed from the complaint of illegal dismissal filed before the Labor Arbiter by herein respondent Antonio S. Go
against Eurotech Hair Systems, Inc. (EHSI), and its President Lutz Kunack and General Manager Jose E. Barin.

In a Decision4 dated 29 December 2000, the Labor Arbiter ruled that respondent Go was illegally dismissed from employment, the decretal
portion of which reads:

WHEREFORE, premises considered, judgment is hereby rendered as follows:

1. Declaring [EHSI, Kunack and Barin] guilty of illegal dismissal;

2. Considering that reinstatement would not be feasible because of strained relations, [EHSI, Kunack and Barin] are ordered to pay [herein
respondent Go] backwages in the amount of Php900,000.00 (Php60,000 x 15 months), separation pay of Php180,000.00 (one month pay for every
year of service = Php60,000 x 3 years);

3. Ordering [EHSI, Kunack and Barin] to pay [respondent Go] Php500,000.00 as moral damages;

4. Ordering [EHSI, Kunack and Barin] to pay [respondent Go] Php300,000 as exemplary damages;

5. Ordering the payment of ten percent (10%) of the total monetary award as attorney’s fees in the sum of Php188,000.00.

All other claims are hereby dismissed for lack of merit.

On appeal to the National Labor Relations Commission (NLRC), EHSI, Kunack and Barin employed the legal services of De Borja Medialdea
Bello Guevarra and Gerodias Law Offices where herein petitioner Atty. Regalado worked as an associate.5

On 11 June 2001, the NLRC rendered a Decision 6 reversing the Labor Arbiter’s decision and declaring that respondent Go’s separation from
employment was legal for it was attended by a just cause and was validly effected by EHSI, Kunack and Barin. The dispositive part of the
decision reads:

WHEREFORE, the appealed decision is set aside. The complaint below is dismissed for being without merit.

For lack of patent or palpable error, the Motion for Reconsideration interposed by respondent Go was denied by the NLRC in an Order7 dated 20
December 2001.

Aggrieved, respondent Go elevated the adverse decision to the Court of Appeals which was docketed as CA-G.R. SP No. 69909 entitled, Antonio
S. Go v. National Labor Relations Commission, Eurotech Hair Systems, Inc., Lutz Kunack and Jose Barin.

On 9 July 2003, the Court of Appeals promulgated a Decision 8 setting aside the ruling of the NLRC and reinstating the decision of the Labor
Arbiter adjudging EHSI, Kunack and Barin guilty of illegal dismissal. The appellate court thus ordered EHSI, Kunack and Barin to pay
respondent Go full backwages, separation pay, moral and exemplary damages. The fallo of the decision reads:
WHEREFORE, the petition for certiorari is GRANTED. The assailed decision of the NLRC promulgated on July 30, 2001 and its Order dated
December 20, 2001 are SET ASIDE while the decision of Labor Arbiter Waldo Emerson R. Gan dated December 29, 2000 declaring the
dismissal of [herein respondent Go] as illegal is hereby REINSTATED with the modification that [EHSI] is hereby Ordered to pay [respondent
Go]:

1. His full backwages from the time of his illegal dismissal until the finality of this decision;

2. Separation pay equal to one month pay for every year of service;

3. Moral damages in the amount of ₱50,000.00; and

4. Exemplary damages in the amount of ₱20,000.00

The award of attorney’s fees is DELETED.

EHSI, Kunack and Barin were able to receive a copy of the decision through registered mail on 17 July 2003 while respondent Go received his
copy on 21 July 2003.9

On 16 July 2003, after the promulgation of the Court of Appeals decision but prior to the receipt of the parties of their respective copies, the
parties decided to settle the case and signed a Release Waiver and Quitclaim10 with the approval of the Labor Arbiter. In view of the amicable
settlement, the Labor Arbiter, on the same day, issued an Order11 dismissing the illegal dismissal case with prejudice. The order thus reads:

In view of the Release, Waiver and Quitclaim voluntarily executed by the [herein respondent] Antonio S. Go, let the instant case be as it is hereby
DISMISSED WITH PREJUDICE.

The execution of the compromise agreement was attended by the counsel for EHSI, Kunack and Barin, petitioner Atty. Regalado, and respondent
Go, but in the absence and without the knowledge of respondent Go’s lawyer. 12

After the receipt of a copy of the Court of Appeals decision, respondent Go, through counsel, filed, on 29 July 2003, a Manifestation with
Omnibus Motion13 seeking to nullify the Release Waiver and Quitclaim dated 16 July 2003 on the ground of fraud, mistake or undue influence. In
the same motion, respondent Go, through counsel, moved that petitioner Atty. Regalado be made to explain her unethical conduct for directly
negotiating with respondent Go without the knowledge of his counsel. The motion thus prays:

WHEREFORE, premises considered, it is most respectfully prayed for the Honorable Court to declare Null and Void the dismissal of the instant
(sic), with prejudice, by Labor (sic) Waldo Emerson Gan, as well as the Release Waiver and Quitclaim dated July 16, 2003 signed by [herein
respondent Go] for having been obtained through mistake, fraud or undue influence committed by [EHSI, Kunack and Barin] and their counsels
(sic).

It is likewise prayed for [EHSI, Kunack and Barin’s] counsel, particularly Atty. Ma. Concepcion Regalado, to be required to explain why no
disciplinary action should be taken against them (sic) for their (sic), unethical conduct of directly negotiating with [respondent Go] without the
presence of undersigned counsel, and for submitting the Release, Waiver and Quitclaim before Labor Arbiter Waldo Emerson Gan knowing fully
well that the controversy between [respondent Go] and [EHSI] is still pending before this Honorable Court.

[Respondent Go] likewise prays for such other relief [as may be] just and equitable under the premises. 14

For their part, EHSI, Kunack and Barin submitted a Manifestation and Motion with Leave of Court 15 praying that CA-G.R. SP No. 69909 be
considered settled with finality in view of the amicable settlement among the parties which resulted in the dismissal of respondent Go’s complaint
with prejudice in the Labor Arbiter’s Order dated 16 July 2003.

In addition, EHSI, Kunack and Barin also filed a Motion for Reconsideration 16 with an ad cautelam that in case of unfavorable action on their
foregoing Manifestation and Motion, the appellate court should reconsider its decision dated 9 July 2003.

Acting on the motions, the appellate court issued a Resolution17 on 19 November 2003 annulling the Order of the Labor Arbiter dated 16 July
2003 for lack of jurisdiction. It also denied for lack of merit EHSI, Kunack and Barin’s Motion for Reconsideration Ad Cautelam. In the same
resolution, petitioner Atty. Regalado was ordered to explain why she should not be cited for contempt of court for violating Canon 9 of the
Canons of Professional Ethics. The decretal portion of the Resolution reads:

WHEREFORE, premises considered, the Manifestation with Omnibus Motion is PARTIALLY GRANTED. The order of Labor Arbiter Gan
dismissing the case with prejudice is hereby declared NULL and VOID for lack of jurisdiction. [EHSI, Kunack and Barin’s] counsel, [herein
petitioner] Atty. Ma. Concepcion Regalado is ordered to SHOW CAUSE within five (5) days from receipt of this Resolution why she should not
be cited for contempt of court for directly negotiating with [herein respondent Go] in violation of Canon 9 of the Canons of Professional Ethics.
On the other hand, the Motion for Reconsideration Ad Cautelam is hereby denied for lack of merit.

EHSI, Kunack and Barin thus filed a Petition for Review on Certiorari before this Court, assailing the Court of Appeals decision promulgated on
9 July 2003 and its Resolution dated 19 November 2003, denying their Motion for Reconsideration. The case is cognized by another division of
this Court.

For her part, petitioner Atty. Regalado submitted a Compliance18 and explained that she never took part in the negotiation for the amicable
settlement of the illegal dismissal case with respondent Go which led to the execution of a compromise agreement by the parties on 16 July 2003.
EHSI, Kunack and Barin, through a Mr. Ragay, a former EHSI employee and a close ally of respondent Go, were the ones who negotiated the
settlement.

Further, petitioner Atty. Regalado maintained that she never met personally respondent Go, not until 16 July 2003, when the latter appeared
before the Labor Arbiter for the execution of the Release Waiver and Quitclaim. Petitioner Atty. Regalado claimed that she was in fact
apprehensive to release the money to respondent Go because the latter cannot present any valid identification card to prove his identity. It was
only upon the assurance of Labor Arbiter Gan that Antonio S. Go and the person representing himself as such were one and the same, that the
execution of the agreement was consummated.

Considering the circumstances, petitioner Atty. Regalado firmly stood that there was no way that she had directly dealt with respondent Go, to the
latter’s damage and prejudice, and misled him to enter into an amicable settlement with her client.

On 30 August 2004, the Court of Appeals issued a Resolution 19 disregarding petitioner Atty. Regalado’s defenses and adjudging her guilty of
indirect contempt under Rule 71 of the Revised Rules of Court. As declared by the appellate court, even granting arguendo that petitioner Atty.
Regalado did not participate in the negotiation process, she was nonetheless under the obligation to restrain her clients from doing acts that she
herself was prohibited to perform as mandated by Canon 16 of the Canons of Professional Ethics. However, instead of preventing her clients from
negotiating with respondent Go who was unassisted by his counsel, Atty. Regalado actively participated in the consummation of the compromise
agreement by dealing directly with respondent Go and allowing him to sign the Release Waiver and Quitclaim without his lawyer.

Undaunted, petitioner Atty. Regalado filed a Motion for Reconsideration which was also denied by the appellate court for lack of merit.20

Hence, this instant Petition for Review on Certiorari,21 raising the following issues:

I.

WHETHER OR NOT THE COURT OF APPEALS COMPLETELY VIOLATED PETITIONER’S CONSTITUTIONAL RIGHTS.

II.

WHETHER OR NOT THE COURT OF APPEALS TOTALLY DISREGARDED THE MANDATORY PROVISION OF RULE 71 OF THE
1997 RULES OF CIVIL PROCEDURE.

III.

WHETHER OR NOT THE COURT OF APPEALS COMMITTED A MANIFEST ERROR OF LAW IN RULING THAT PETITIONER IS
ESTOPPED FROM CHALLENGING ITS AUTHORITY TO ENTERTAIN THE CONTEMPT CHARGES AGAINST HER.

IV.

WHETHER OR NOT THE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR
EXCESS OF JURISDICTION IN DISREGARDING THE OVERWHELMING EVIDENCE ON RECORD TO EFFECT THAT PETITIONER
DID NOT COMMIT ANY CONTUMACIOUS CONDUCT.

V.

WHETHER OR NOT THE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF DISCRETION AND COMMITTED A GROSS
MISAPPRECIATION OF FACTS IN FINDING THE PETITIONER GUILTY OF INDIRECT CONTEMPT ON THE BASIS OF THE
CONFLICTING, UNCORROBORATED, AND UNVERIFIED ASSERTIONS OF THE RESPONDENT.

Considering that the issues raised herein are both questions of law and fact, and consistent with our policy that this Court is not a trier of facts, we
shall address only the pure questions of law and leave the factual issues, which are supported by evidence, as found by the appellate court. It is an
oft-repeated principle that in the exercise of the Supreme Court’s power of review, the Court is not a trier of facts and does not normally
undertake the re-examination of the evidence presented by the contending parties during the trial of the case considering that the findings of facts
of the Court of Appeals, if supported by evidence, are conclusive and binding upon this Court.1awphi1.net22

Contempt of court is a defiance of the authority, justice or dignity of the court; such conduct as tends to bring the authority and administration of
the law into disrespect or to interfere with or prejudice parties litigant or their witnesses during litigation. 23 It is defined as disobedience to the
Court by acting in opposition to its authority, justice, and dignity. It signifies not only a willful disregard or disobedience of the court’s orders, but
such conduct as tends to bring the authority of the court and the administration of law into disrepute or in some manner to impede the due
administration of justice.24

The power to punish for contempt is inherent in all courts and is essential to the preservation of order in judicial proceedings and to the
enforcement of judgments, orders, and mandates of the court, and consequently, to the due administration of justice. 25

Thus, contempt proceedings has a dual function: (1) vindication of public interest by punishment of contemptuous conduct; and (2) coercion to
compel the contemnor to do what the law requires him to uphold the power of the Court, and also to secure the rights of the parties to a suit
awarded by the Court.26

In our jurisdiction, the Rules of Court penalizes two types of contempt, namely direct contempt and indirect contempt. 27
Direct contempt is committed in the presence of or so near a court as to obstruct or interrupt the proceedings before the same, and includes
disrespect toward the court, offensive personalities toward others, or refusal to be sworn or answer as a witness, or to subscribe an affidavit or
deposition when lawfully required to do so.28

On the other hand, Section 3, Rule 71 of the Rules of Court enumerates particular acts which constitute indirect contempt, thus:

(a) Misbehavior of an officer of a court in the performance of his official duties or in his official transactions;

(b) Disobedience of or resistance to a lawful writ, process, order, or judgment of a court, including the act of a person who, after being
dispossessed or ejected from any real property by the judgment or process of any court of competent jurisdiction, enters or attempts or induces
another to enter into or upon such real property, for the purpose of executing acts of ownership or possession, or in any manner disturbs the
possession given to the person adjudged to be entitled thereto;

(c) Any abuse of or any unlawful interference with the processes or proceedings of a court not constituting direct contempt under Section 1 of this
Rule;

(d) Any improper conduct tending, directly or indirectly, to impede, obstruct, or degrade the administration of justice;

(e) Assuming to be an attorney or an officer of a court, and acting as such without authority;

(f) Failure to obey a subpoena duly served;

(g) The rescue, or attempted rescue, of a person or property in the custody of an officer by virtue of an order or process of a court held by him.

But nothing in this section shall be so construed as to prevent the court from issuing process to bring the respondent into court, or from holding
him in custody pending such proceedings. (Emphasis supplied.)29

Section 4, Rule 71 of the same Rules provides how proceedings for indirect contempt should be commenced, thus:

SEC. 4. How proceedings commenced. – Proceedings for indirect contempt may be initiated motu proprio by the court against which the
contempt was committed by an order or any other formal charge requiring the respondent to show cause why he should not be punished for
contempt.

In all other cases, charges for indirect contempt shall be commenced by a verified petition with supporting particulars and certified true copies of
documents or papers involved therein, and upon full compliance with the requirements for filing initiatory pleadings for civil actions in the court
concerned. If the contempt charges arose out of or are related to a principal action pending in the court, the petition for contempt shall allege that
fact but said petition shall be docketed, heard and decided separately, unless the court in its discretion orders the consolidation of the contempt
charge and the principal action for joint hearing and decision. (Emphases supplied.)

As can be gleaned above, the provisions of the Rules are unequivocal. Indirect contempt proceedings may be initiated only in two ways: (1) motu
proprio by the court; or (2) through a verified petition and upon compliance with the requirements for initiatory pleadings. Procedural
requirements as outlined must be complied with.

There is no doubt that the complained acts of Atty. Regalado would fall under paragraphs (a) and (d) of Section 3, Rule 71, as in fact, she was
adjudged guilty of indirect contempt. But were the proceedings conducted in convicting petitioner done in accordance with law?

In the instant case, the indirect contempt proceedings was initiated by respondent Go through a Manifestation with Omnibus Motion.30 It was
based on the aforesaid Motion that the appellate court issued a Resolution 31 dated 19 November 2003, requiring petitioner Atty. Regalado to show
cause why she should not be cited for contempt.

Clearly, respondent Go’s Manifestation with Omnibus Motion was the catalyst which set everything in motion and led to the eventual conviction
of Atty. Regalado. It was respondent Go who brought to the attention of the appellate court the alleged misbehavior committed by petitioner Atty.
Regalado. Without such positive act on the part of respondent Go, no indirect contempt charge could have been initiated at all.

Indeed, the appellate court itself, in its Resolution dated 30 August 2004, made categorical findings as to how the contempt charge was initiated,
to wit:

In the present case, [respondent’s Go] Manifestation With Omnibus Motion which led to our 19 November 2003 Resolution requiring Atty.
Regalado to explain why she should not be cited for contempt, x x x.32

We cannot, therefore, argue that the Court of Appeals on its own initiated the indirect contempt charge without contradicting the factual findings
made by the very same court which rendered the questioned resolution.

It is true in Leonidas v. Judge Supnet,33 this Court ruled that the contempt proceedings was considered commenced by the court motu proprio
even if the show cause order came after the filing of the motions to cite for contempt filed by the adverse party. The Decision thus reads:

Thus, independently of the motions filed by the Tamondong Spouses, it was the Pasay MTC which commenced the contempt proceedings motu
proprio. No verified petition is required if proceedings for indirect contempt are initiated in this manner, and the absence of a verified petition
does not affect the procedure adopted.
It is true that the Tamondong Spouses did file a Motion To Cite Plaintiff For Contempt Of Court, dated May 17, 2000. In this pleading they
prayed that Union Bank be declared in indirect contempt of court for its disobedience to the Pasay MTC’s Order dated May 9, 2000. This Order
dated May 9, 2000 specifically directed Union Bank to "return immediately to the defendants the replevied motor vehicle." However, the
Tamondong Spouses’ unverified motion dated May 17, 2000 cannot invalidate the contempt proceedings because these proceedings were
initiated by respondent judge motu proprio in accordance with Section 4, Rule 71 of the 1997 Rules of Civil Procedure.

This above-cited case, however, has no application in the case at bar for the factual milieu of the cases are different from each other. In Leonidas,
there was an order of the court that was utterly violated by Union Bank. Thus, even in the absence of the motion of spouses Tamondong to cite
Union Bank in contempt, the court a quo on its own can verily initiate the action. In the present case, the appellate court could not have acquired
knowledge of petitioner Atty. Regalado’s misbehavior without respondent Go’s Manifestation with Omnibus Motion reiterating the alleged
deceitful conduct committed by the former.

Having painstakingly laid down that the instant case was not initiated by the court motu proprio necessitates us to look into the second mode of
filing indirect contempt proceedings.

In cases where the court did not initiate the contempt charge, the Rules prescribe that a verified petition which has complied with the
requirements of initiatory pleadings as outlined in the heretofore quoted provision of second paragraph, Section 4, Rule 71 of the Rules of Court,
must be filed.

The manner upon which the case at bar was commenced is clearly in contravention with the categorical mandate of the Rules. Respondent Go
filed a Manifestation with Omnibus Motion, which was unverified and without any supporting particulars and documents. Such procedural flaw
notwithstanding, the appellate court granted the motion and directed petitioner Atty. Regalado to show cause why she should not be cited for
contempt. Upon petitioner Atty. Regalado’s compliance with the appellate court’s directive, the tribunal proceeded in adjudging her guilty of
indirect contempt and imposing a penalty of fine, completely ignoring the procedural infirmities in the commencement of the indirect contempt
action.

It bears to stress that the power to punish for contempt is not limitless. It must be used sparingly with caution, restraint, judiciousness,
deliberation, and due regard to the provisions of the law and the constitutional rights of the individual. 34

The limitations in the exercise of the power to punish for indirect contempt are delineated by the procedural guidelines specified under Section 4,
Rule 71 of the Rules of Court. Strict compliance with such procedural guidelines is mandatory considering that proceedings against person
alleged to be guilty of contempt are commonly treated as criminal in nature. 35

As explained by Justice Florenz Regalado,36 the filing of a verified petition that has complied with the requirements for the filing of initiatory
pleading, is mandatory, and thus states:

1. This new provision clarifies with a regularity norm the proper procedure for commencing contempt proceedings. While such proceeding has
been classified as special civil action under the former Rules, the heterogenous practice tolerated by the courts, has been for any party to file a
motion without paying any docket or lawful fees therefore and without complying with the requirements for initiatory pleadings, which is now
required in the second paragraph of this amended section.

xxxx

Henceforth, except for indirect contempt proceedings initiated motu propio by order of or a formal charge by the offended court, all
charges shall be commenced by a verified petition with full compliance with the requirements therefore and shall be disposed in accordance
with the second paragraph of this section.

Time and again we rule that the use of the word "shall" underscores the mandatory character of the Rule. The term "shall" is a word of command,
and one which has always or which must be given a compulsory meaning, and it is generally imperative or mandatory. 37

In Enriquez v. Enriquez,38 this Court applied the word "shall" by giving it mandatory and imperative import and ruled that non-compliance with
the mandatory requirements of the Rules goes into the very authority of the court to acquire jurisdiction over the subject matter of the case, thus:

"However, the 1997 Rules of Civil Procedure, as amended, which took effect on July 1, 1997, now require that appellate docket and other lawful
fees must be paid within the same period for taking an appeal. This is clear from the opening sentence of Section 4, Rule 41 of the same rules
that, "(W)ithin the period for taking an appeal, the appellant shall pay to the clerk of court which rendered the judgment or final order appealed
from, the full amount of the appellate court docket and other lawful fees."

xxxx

Time and again, this Court has consistently held that payment of docket fee within the prescribed period is mandatory for the perfection of an
appeal. Without such payment, the appellate court does not acquire jurisdiction over the subject matter of the action and the decision sought to be
appealed from becomes final and executory.39(Emphases supplied.)

In United States v. de la Santa,40 which bears parallelism in the instant case, we held:

The objection in this case is not, strictly speaking, to the sufficiency of the complaint, but goes directly to the jurisdiction of the court over the
crime with which the accused was charged. x x x. (Emphasis supplied.)
Even if the contempt proceedings stemmed from the main case over which the court already acquired jurisdiction, the Rules direct that the
petition for contempt be treated independently of the principal action. Consequently, the necessary prerequisites for the filing of initiatory
pleadings, such as the filing of a verified petition, attachment of a certification on non-forum shopping, and the payment of the necessary docket
fees, must be faithfully observed.41

We now proceed to the issue of estoppel raised by the Court of Appeals. When petitioner Atty. Regalado brought to the attention of the appellate
court through a Motion for Reconsideration the remedial defect attendant to her conviction, the Court of Appeals, instead of rectifying the
palpable and patent procedural error it earlier committed, altogether disregarded the glaring mistake by interposing the doctrine of estoppel. The
appellate court ruled that having actively participated in the contempt proceedings, petitioner Atty. Regalado is now barred from impugning the
Court of Appeals jurisdiction over her contempt case citing the case of People v. Regalario. 42

We do not agree.

Laches is defined as the "failure or neglect for an unreasonable and unexplained length of time, to do that which, by exercising due diligence,
could or should have been done earlier, it is negligence or omission to assert a right within a reasonable length of time, warranting a presumption
that the party entitled to assert it either has abandoned it or declined to assert it." 43

The ruling in People v. Regalario44 that was based on the landmark doctrine enunciated in Tijam v. Sibonghanoy45on the matter of jurisdiction by
estoppel is the exception rather than the rule. Estoppel by laches may be invoked to bar the issue of lack of jurisdiction only in cases in which the
factual milieu is analogous to that in the cited case. In such controversies, laches should have been clearly present; that is, lack of jurisdiction
must have been raised so belatedly as to warrant the presumption that the party entitled to assert it had abandoned or declined to assert it.46

In Sibonghanoy,47 the defense of lack of jurisdiction was raised for the first time in a motion to dismiss filed by the Surety48 almost 15 years after
the questioned ruling had been rendered.49 At several stages of the proceedings, in the court a quo as well as in the Court of Appeals, the Surety
invoked the jurisdiction of the said courts to obtain affirmative relief and submitted its case for final adjudication on the merits. It was only when
the adverse decision was rendered by the Court of Appeals that it finally woke up to raise the question of jurisdiction. 50

Clearly, the factual settings attendant in Sibonghanoy are not present in the case at bar. Petitioner Atty. Regalado, after the receipt of the Court of
Appeals resolution finding her guilty of contempt, promptly filed a Motion for Reconsideration assailing the said court’s jurisdiction based on
procedural infirmity in initiating the action. Her compliance with the appellate court’s directive to show cause why she should not be cited for
contempt and filing a single piece of pleading to that effect could not be considered as an active participation in the judicial proceedings so as to
take the case within the milieu of Sibonghanoy. Rather, it is the natural fear to disobey the mandate of the court that could lead to dire
consequences that impelled her to comply.

The provisions of the Rules are worded in very clear and categorical language. In case where the indirect contempt charge is not initiated by the
courts, the filing of a verified petition which fulfills the requirements on initiatory pleadings is a prerequisite. Beyond question now is the
mandatory requirement of a verified petition in initiating an indirect contempt proceeding. Truly, prior to the amendment of the 1997 Rules of
Civil Procedure, mere motion without complying with the requirements for initiatory pleadings was tolerated by the courts. 51 At the onset of the
1997 Revised Rules of Civil Procedure, however, such practice can no longer be countenanced.

Evidently, the proceedings attendant to the conviction of petitioner Atty. Regalado for indirect contempt suffered a serious procedural defect to
which this Court cannot close its eyes without offending the fundamental principles enunciated in the Rules that we, ourselves, had promulgated.

The other issues raised on the merits of the contempt case have become moot and academic.

WHEREFORE, premises considered, the instant Petition is GRANTED. The indirect contempt proceedings before the Court of Appeals
is DECLARED null and void.

SO ORDERED.
 8. Sps. Marasigan VS. Chevron

Republic of the Philippines

Supreme Court

Manila

THIRD DIVISION

SPOUSES MARIANO P. G.R. No. 184015

MARASIGAN and

JOSEFINA LEAL, Present:

Petitioners,

VELASCO, JR., J., Chairperson,

BRION,*

PERALTA,

- versus - ABAD, and

MENDOZA, JJ.

CHEVRON PHILS., INC., ACCRA INVESTMENTS,

CORP., and ANGARA ABELLO CONCEPCION
REGALA & CRUZ,

Respondents. Promulgated:

February 8, 2012

X ----------------------------------------------------------------------------------------------------- X

DECISION

MENDOZA, J.:

Challenged in this petition is the January 31, 2008 Decision [1] of the Court of Appeals (CA), in CA-G.R. CV No. 85223, which reversed and set
aside the January 4, 2005 Decision[2] of the Regional Trial Court, Branch 61, Gumaca, Quezon (RTC-Gumaca), in Civil Case No. 2448-G,
declaring the subject foreclosure sale and the consequent certificate of sale null and void and ordering the petitioners, Spouses Mariano P.
Marasigan and Josefina Leal (Spouses Marasigan) to pay respondent Chevron Phils., Inc. (Chevron [formerly Caltex Philippines, Inc.]), moral
damages, attorneys fees and costs of suit.

The Facts

Records disclose Spouses Marasigan were operators of a gasoline station in Montalban, Rizal, while Chevron is a corporation engaged in the
business of refining, manufacturing, storing, distributing, and marketing of fuels, lubricants and other petroleum products. Spouses Marasigan
and Chevron entered into a dealership and distributorship agreement wherein the former can purchase petroleum products from the latter on
credit. To complete said agreement, Spouses Marasigan executed deeds of real estate mortgage over their properties, as collateral, in favor of
Chevron.

Credit Lines Secured by

Location TCT No.

₱1,886.000.00 Diliman, Q.C. 93559/290739

350, 000.00 Bo. Cambal, 75470

San Mateo, Rizal

3,242,000.00 Quezon City 227086

1,975, 600.00 Bo. Burgos, Rodriguez TD No. 02-4813/

Rizal TD No. 02-4860

1,600, 000.00 Mulanay, Quezon Province T- 199817

₱9,053,600.00

Records further show that by September 30, 1993, Spouses Marasigan exceeded their credit line and owed Chevron the amount of
₱12,075,261.02. Spouses Marasigan failed to pay the obligation despite oral and written demands from Chevron. Thus, Chevron through its
counsel, the Angara Abello Concepcion Regala and Cruz (ACCRALAW), initiated foreclosure proceedings by filing a petition for extrajudicial
foreclosure against the real estate mortgages executed by Spouses Marasigan in favor of Chevron.

Chevron, through ACCRALAW, was able to foreclose all the real estate mortgages on Spouses Marasigans subject properties. Chevron, however,
was only able to recover the total amount of ₱4,925,000.00 from the public auction sales of the mortgaged properties including the sale of the
167.1597 hectare coconut farm property located in Mulanay, Quezon, which was sold for ₱130,000.00 to the only bidder, ACCRA
Investments,Corp. (ACCRAIN).

Subsequently, on November 7, 1995, Chevron filed a complaint (Civil Case No. 95-1619 for Sum of Money entitled Caltex Philippines, Inc. v.
Sps. Mariano P. Marasigan and Mareal Corporation) against Spouses Marasigan before the RTC, Branch 136, Makati City (RTCMakati) to
recover the deficiency in the amount of ₱7,667,188.10. Chevron basically alleged therein that Spouses Marasigans outstanding obligation as
of October 15, 1995 was ₱7,667,188.10 and that said obligation remained unpaid.

In their Answer, Spouses Marasigan mainly alleged that they were greatly prejudiced because the foreclosure sales on the subject mortgaged
properties were illegal and that the bid price of the Mulanay property in particular was shockingly low.
On February 8, 1996, Spouses Marasigan filed a complaint [Civil Case No. 2448-C for Declaration of Nullity and/or Annulment of Foreclosure
with Damages entitled Sps. Mariano P. Marasigan and Josefina Leal Marasigan v. Caltex (Philippines), Inc., ACCRA Investment Corporation,
Angara Abello Concepcion Regala & Cruz and Romeo N. Villafranca] against Chevron, ACCRAIN and ACCRALAW and Sheriff Romeo
Villafranca before the RTC-Gumaca. Spouses Marasigan principally alleged therein that the bid price was grossly inadequate and shockingly low
which rendered the foreclosure sale fatally defective and the foreclosure proceedings invalid and illegal. Chevron, ACCRAIN and ACCRALAW
filed a motion to dismiss citing as ground Spouses Marasigans failure to disclose in their certification against forum shopping the pending case
filed before the RTC-Makati and the consequent violation of the rule on litis pendentia.

On August 21, 1996, the RTC issued an order[3] denying the motion to dismiss, and ruling that there was no forum shopping because there was no
decision yet in the RTC-Makati case (Civil Case No. 95-1619) when the RTC-Gumaca case (Civil Case No. 2448-G) was filed and that there
were parties in the former who were not parties in the latter.

Chevron, ACCRAIN and ACCRALAW then filed their Answer with Compulsory Counterclaim alleging, among others, that the foreclosure sale
was conducted in accordance with law and that the complaint in Civil Case No. 2448-G violated the rule on forum shopping and litis pendentia.

On January 4, 2005, the RTC-Gumaca rendered a decision in favor of Spouses Marasigan and against Chevron, ACCRAIN and ACCRALAW,
the dispositive portion of which reads, as follows:

WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and against the defendant:

1. Declaring the foreclosure sale of Mulanay property conducted by Provincial Sheriff of Gumaca on September 12, 1995 as well as the
certificate of sale dated September 18, 1995 issued thereto as null and void and hereby ordered the same cancelled and set aside.

2. Ordering defendants jointly and severally to pay plaintiffs the amount of Php25,000.00 as moral damages, and the amount of Php50,000.00
as attorneys fees and costs of the suit.

The defendants counterclaim being merely the result of the filing of the plaintiffs complaint is hereby dismissed.

SO ORDERED.[4]

Chevron, ACCRAIN and ACCRALAW appealed to the CA which summed up the issues to be resolved as follow:

1) Whether or not the instant case is dismissible on the grounds of forum shopping and litis pendentia;

2) Whether or not the foreclosure sale can be declared null and void for gross inadequacy of the price;

3) Whether or not appellees are entitled to moral damages, attorneys fees and costs of suit; and

4) Whether or not the appellants are entitled to their counterclaims.

On January 31, 2008, the CA rendered a decision reversing and setting aside the RTC decision. The CA ruled that Spouses Marasigan committed
forum shopping and that all the elements of litis pendentia are present. Accordingly, Civil Case No. 2448-G, filed by Spouses Marasigan in the
RTC-Gumaca was dismissible on the grounds of forum shopping and litis pendentia. The CA ruled as follows:

On the other hand, forum shopping is the act of the party against whom an adverse judgment has been rendered in one forum, of seeking another
opinion in another forum other than by appeal or the special civil action of certiorari; or the institution of two or more actions or proceedings
grounded on the same cause on the supposition that one or the other court would make a favorable disposition. We find that the appellees
committed forum shopping which is cause for the dismissal of the case. Under the last part of Section 5, Rule 7 of the Rules, if the acts of the
party or his counsel clearly constitute willful and deliberate forum shopping, the same shall be ground for summary dismissal with prejudice and
shall constitute direct contempt as well as cause for administrative sanctions. Forum shopping is an act of malpractice because it abuses court
processes.

The test for determining whether a party violates the rule against forum shopping is where a final judgment in one case will amount to res
judicata in the action under consideration or where the elements of litis pendentia are present: The requisites of litis pendentia are the following:
(a) identity of parties, or at least such as representing the same interests in both actions; (b) identity of rights asserted and relief prayed for, the
relief founded on the same facts; and (c) identity of the two cases such that judgment in one, regardless of which party is successful, would
amount to res judicata in the other.

In the instant case, We find the elements of litis pendentia present. On identity of parties, appellant Chevron and the appellees are the same
parties in both cases. Appellant Chevron is the plaintiff while the appellees and Mareal Co., Inc. are the defendants in the Makati RTC case. On
the other hand, in the instant case, the appellees are the plaintiffs while appellants Chevron, ACCRALAW and ACCRAIN are the defendants. It
is of no moment that ACCRALAW and ACCRAIN are not party-plaintiffs in the Makati RTC case because the rule does not require absolute
identity of parties; substantial identity of parties is sufficient. The fact that there are additional parties in the present case is not material as long as
the principal parties Chevron and the Spouses Marasigan remain.

As to subject matter, the rights asserted by both parties are based on the same credit lines and real estate mortgages. In the Makati RTC case,
appellant Chevron has to prove that deliveries of Chevron products were made pursuant to the credit lines and the real estate mortgages securing
the same; and that the subsequent foreclosure are valid but there is still a deficiency after conducting the proceeds of the foreclosure sale from
appellees obligation. In the instant case, appellees seek to evade or diminish their liability under the credit lines and real estate mortgages by
either having the foreclosure sale of the Mulanay property annulled or by collecting the alleged discrepancy between the market value of the
property and the bid price offered by ACCRAIN. Thus, although the instant case pertains only to the Mulanay property, the resolution of both
cases would require a determination of the validity and enforceability of the deliveries made by Chevron, of the real estate mortgages and
foreclosure proceedings. In both cases, the same evidence would be presented and the same subject matter would be litigated. The difference in
the form of the actions is of no moment as the test of identity of causes of action lies not in the form of an action but on whether the same
evidence would support and establish the former and the present causes of action.

Xxx

It must be stressed that the appellees raised an affirmative defense in their amended answer in the Makati RTC case the illegality of the
foreclosure sale of the Mulanay property; appellees raise the same issue in the instant complaint. There is no doubt that a judgment in the Makati
RTC case as regards the validity of the foreclosure sale of the Mulanay property will constitute res judicata in the instant case, and vice versa.

Accordingly, the instant case is dismissible on the litis pendentia pursuant to Section 1 (e). Rule 16 of the Rules of Civil Procedure. The case is
also dismissible on the ground of forum shopping since forum shopping exists where the elements of litis pendentia are present.

The Makati case should subsist because it was filed ahead and is an appropriate vehicle for litigating all issues in this controversy.

Xxx
We find no need to expound on the other issues raised in this case. Indeed, to do so would preempt the judgment of the RTC in Civil Case No.
95-1619 which is still pending with Branch 136, and result in the miscarriage of justice.

Aggrieved by the CA decision, Spouses Marasigan filed this petition praying for its reversal and setting aside anchored on the following

GROUNDS:

THE CA ERRED IN RULING THAT THE RTC-GUMACA ERRED WHEN IT DENIED RESPONDENTS MOTION TO DISMISS
ON THE GROUND OF FORUM SHOPPING AND LITIS PENDENTIA.

II

THE CA ERRED IN RULING THAT THE MAKATI CASE (CIVIL CASE NO. 95-1619) SHOULD SUBSIST BECAUSE IT WAS
FILED AHEAD AND IS AN APPROPRIATE VEHICLE FOR LITIGATING ALL THE ISSUES IN THE CONTROVERSY.

III

THE COURT OF APPEALS GROSSLY ERRED IN NOT APPRECIATING THE DECISION OF ITS FIFTEENTH DIVISION
DATED MAY 21, 1999 FINDING ANOMALY IN THE CONDUCT OF FORECLOSURE BY RESPONDENTS. RESPONDENTS
DELIBERATELY OMITTED THE DECISION OF THE FIFTEENTH DIVISION IN ITS APPELLANTS BRIEF IN CA G.R. NO. C.V.
NO. 85223.

IV

RESPONDENTS CHEVRON, ACCRALAW AND ACCRAIN DID NOT INCLUDE RESPONDENT SHERIFF OF GUMACA
(QUEZON) IN THEIR APPEAL BEFORE THE COURT OF APPEALS. SHERIFF IS INDISPENSABLE PARTY TO THE GUMACA
CASE (CIVIL CASE NO. 2448-G).

V
RESPONDENTS ACCRALAW AND ACCRAIN VIOLATED ARTICLE 1461 OF THE CIVIL CODE.

Spouses Marasigan argue that the RTC-Gumaca properly denied the respondents motion to dismiss on the ground of forum shopping and litis
pendentia. Citing the decision of the RTC-Gumaca, Spouses Marasigan claim that Civil Case No. 95-1619 filed by Chevron in the RTC-Makati
was for collection with preliminary attachment with prayer for preliminary injunction, and that Mareal Co., Inc. and themselves are the
defendants therein. On the other hand, Civil Case No. 2448-G filed by them before the RTC-Gumaca was for declaration of nullity and/or
annulment of foreclosure with damages against Chevron, ACCRALAW and ACCRAIN. They further claim that in the Makati RTC case,
Chevron endeavored to collect the deficiency arising from the foreclosure of mortgage on the properties of Spouses Marasigan, including their
Gumaca property, while in the RTC-Gumaca case, they sought a court declaration that the foreclosure sale, specially the Mulanay property, was a
nullity.

Spouses Marasigan also insist that there is no forum shopping because of the diversity of parties in the RTC-Makati case and the RTC-Gumaca
case. They argue that in the RTC-Gumaca case, only the Spouses Marasigan stand as plaintiffs while Chevron, ACCRAIN and ACCRALAW are
the defendants. They likewise aver that Mareal Co., Inc. is not a party plaintiff in the RTC-Gumaca case and ACCRAIN, ACCRALAW and
Romeo Villafranca are not parties in the RTC-Makati case.

The petitioners state that ACCRAIN, ACCRALAW and Villafranca did not join Chevron in the RTC-Makati case. Neither did they participate in,
nor claim responsibility for, the acts complained of against Chevron. Said defendants had nothing to do with the deficiency claim and the
application, issuance and implementation of the writ of attachment which pertain solely to Chevron. Hence, any judgment that may be rendered in
the RTC-Makati case cannot be legally enforced against said defendants because they cannot be held responsible for the acts of Chevron.

Further, according to Spouses Marasigan, the rights alleged to have been violated in the two (2) cases arose out of separate sources. They claim
that in the RTC-Makati case, the legal basis for the claim of damages was the application, issuance and implementation of a writ of attachment
which resulted in damage to said defendants consisting of damaged reputation, credit standing before the banks and their creditors and the
business community; that, in effect, the issues in the RTC-Makati case were basically anchored on the applicability of the legal provisions on
damages defined in Articles 2195 to 2232 of the Civil Code and the pertinent provisions of the Rules of Court; that, on the other hand, the issues
in the RTC-Gumaca case were based on the application of Article 1491 of the Civil Code which relates to the validity of the acquisition of real
property at public or judicial action by officers of the court; and that since the issues in the two (2) civil actions were distinct, they did not engage
in forum shopping.

Thus, Spouses Marasigan are adamant that litis pendentia is not a valid ground for the dismissal of the RTC-Gumaca case because a judgment in
the RTC-Makati case or vice versa, will not be res judicata on the other.

Spouses Marasigan further argue that the CA violated the rule on venue and jurisdiction when it ruled that the RTC-Makati was the appropriate
vehicle for litigating the annulment of foreclosure of the Mulanay property. They add that the RTC-Gumaca is the appropriate vehicle for it
because the subject property is located there.

Finally, Spouses Marasigan assert that the CA erred in not appreciating the finding of an anomaly in the conduct of the foreclosure by the
respondents; that the respondents did not include the Sheriff of Gumaca in their appeal before the CA; that the Sheriff is an indispensable party to
the RTC-Gumaca case; and that Article 1461 of the Civil Code was violated by the acquisition of the Mulanay property by ACCRAIN, an
investment arm of ACCRALAW, and controlled by the latter.

On the other hand, the respondents counter, among others, that the petition should have been dismissed outright considering that the petitioners
failed to comply with the most basic and express requirements of the Rules of Court; that despite being given the opportunity to do so, the
petitioners failed to submit a Verification and Certification and an Affidavit of Service that complies with the 2004 Rules on Notarial Practice;
that the petitioners failed to attach material portions of the record, such as their Amended Answer to the complaint in the RTC-Makati case; that
the petitioners repeated non-compliance with procedural rules, absent special and compelling circumstances to justify the same, is undeserving of
a liberal application of the rules; that the petition raises questions of facts; that the petitioners committed forum-shopping in instituting the RTC-
Gumaca Case notwithstanding the pendency of the RTC-Makati Case; that the petitioners prayed for the same relief in their complaint in the
RTC-Gumaca Case and in their Answer in the Makati Case; that the petitioners are estopped from questioning the jurisdiction of the court in the
RTC-Makati case considering that they were the ones who submitted the issues before said court, and prayed for relief from said court; that the
petitioners failed to appeal the decision of the Makati RTC rejecting their claim that the foreclosure sale violated Article 1491 of the Civil Code,
thus, they are bound by such ruling and that, in any case, there was no violation of Article 1491 by ACCRALAW and ACCRAIN and that the
petitioners have no personality to question the foreclosure sale on the ground of Article 1491; and that the foreclosure sale was valid and
complied strictly with the requirements of Act No. 3135 and that inadequacy of the bid price is not a ground to annul the foreclosure sale.

THE COURTS RULING

The petition cannot prosper.

This Court shall first tackle the issue of whether or not the CA correctly ordered the dismissal of the complaint in Civil Case No. 2448-G filed by
Spouses Marasigan before the RTC-Gumaca on the grounds of forum shopping and litis pendentia. Simply put, the determinative questions in
this petition are: (1) is litis pendentia present? and (2) did petitioners violate the rules on forum shopping? An affirmative answer to these
particular questions would necessarily mean that there would be no need to discuss, much less, resolve all the other issues raised in this petition.

The essence of forum shopping is the filing by a party against whom an adverse judgment has been rendered in one forum, seeking another and
possibly favorable opinion in another suit other than by appeal or special civil action for certiorari. It is the act of filing of multiple suits involving
the same parties for the same cause of action, either simultaneously or successively for the purpose of obtaining a favorable judgment. Forum
shopping exists where the elements of litis pendentia are present or where a final judgment in one case will amount to res judicata in the action
under consideration.[5]

Litis pendentia is a Latin term, which literally means "a pending suit" and is variously referred to in some decisions as lis pendens and auter
action pendant. As a ground for the dismissal of a civil action, it refers to the situation where two actions are pending between the same parties
for the same cause of action, so that one of them becomes unnecessary and vexatious. It is based on the policy against multiplicity of suits.[6]

Litis pendentia requires the concurrence of the following requisites: (1) identity of parties, or at least such parties as those representing the same
interests in both actions; (2) identity of rights asserted and reliefs prayed for, the reliefs being founded on the same facts; and (3) identity with
respect to the two preceding particulars in the two cases, such that any judgment that may be rendered in the pending case, regardless of which
party is successful, would amount to res judicata in the other case.

What is pivotal in determining whether forum shopping exists or not is the vexation caused to the courts and parties-litigants by a party who asks
different courts and/or administrative agencies to rule on the same or related cases and/or grant the same or substantially the same reliefs, in the
process creating the possibility of conflicting decisions being rendered by the different courts and/or administrative agencies upon the same
issues.[7]

In the case at bench, all the requisites of litis pendentia are present. The first element, identity of parties, or at least representing the same interest
in both actions, exists. The Court agrees with the ruling of the CA that Chevron and Spouses Marasigan are the same parties in the RTC-Makati
Case and the RTC-Gumaca Case. Unquestionably, the plaintiff and the defendants in the RTC-Makati Case are Chevron and Spouses Marasigan
as well as Mareal Co., Inc., respectively. On the other hand, the plaintiffs in the RTC-Gumaca Case are the Spouses Marasigan and the
defendants therein are Chevron, ACCRAIN and ACCRALAW. The absence of ACCRAIN and ACCRALAW as party plaintiffs in the RTC-
Makati case and their additional presence as party defendants in the RTC-Gumaca case would not unfavorably affect the respondents because the
rule does not require absolute identity of parties. A substantial identity of parties is enough to qualify under the first requisite. What is important
here is that the principal parties Chevron and Spouses Marasigan are the same in both cases. The Court held:

In this case, the first requisite, identity of parties or at least such as represent the same interest in both actions, is present. The Court of Appeals
correctly ruled that the fact that there is no absolute identity of parties in both cases will not preclude the application of the rule of litis pendentia,
since only substantial and not absolute identity of parties is required for litis pendentia to lie.[8] [Emphasis supplied]
The second element, identity of rights asserted and reliefs prayed for, the reliefs being founded on the same facts, likewise subsists here. It cannot
be denied that the complaint filed in the RTC-Makati was for a Sum of Money while that filed in the RTC-Gumaca was for Declaration of Nullity
and/or Annulment of Foreclosure with Damages. Although both cases differ in form or nature, the same facts would be alleged and the same
evidence would be presented considering that the resolution of both cases would be based on the validity and enforceability of the same credit
lines, real estate mortgages and foreclosure proceedings. Indeed, the true test in determining the identity of causes of action lies not in the form or
nature of the actions but rather in the evidence that would be presented.

The test to determine identity of causes of action is to ascertain whether the same evidence necessary to sustain the second cause of action is
sufficient to authorize a recovery in the first, even if the forms or the nature of the two (2) actions are different from each other. If the same facts
or evidence would sustain both, the two (2) actions are considered the same within the rule that the judgment in the former is a bar to the
subsequent action; otherwise, it is not. This method has been considered the most accurate test as to whether a former judgment is a bar in
subsequent proceedings between the same parties. It has even been designated as infallible.[9]

In this regard, the CA aptly explained this matter, as follows:

As to subject matter, the rights asserted by both parties are based on the same credit lines and real estate mortgages. In the Makati RTC case,
appellant Chevron has to prove that deliveries of Chevron products were made pursuant to the credit lines and the real estate mortgages securing
the same; and that the subsequent foreclosure are valid but there is still a deficiency after deducting the proceeds of the foreclosure sale from
appellees obligation. In the instant case, appellees seek to evade or diminish their liability under the credit lines and real estate mortgages by
either having the foreclosure sale of the Mulanay property annulled or by collecting the alleged discrepancy between the market value of the
property and the bid price offered by ACCRAIN. Thus, although the instant case pertains only to the Mulanay property, the resolution of both
cases would require a determination of the validity and enforceability of the deliveries made by Chevron of the real estate mortgages and
foreclosure proceedings. In both cases, the same evidence would be presented and the same subject matter would be litigated. The difference in
the form of actions is of no moment as the test of identity of causes of action lies not in the form of an action but on whether the same evidence
would support and establish the former and the present causes of action.

Finally, the presence of the third element, that the identity of the two cases should be such that the judgment that may be rendered in one would,
regardless of which party is successful, amount to res judicata in the other, cannot be disputed either.

Spouses Marasigan do not deny the fact that the affirmative defense that they raised in the RTC-Makati case was the illegality of the foreclosure
sale of the Mulanay property.[10] They raised the same issue in the RTC-Gumaca case.[11] As correctly ruled by the CA, the judgment in the RTC-
Makati with regard to the validity of the foreclosure sale of the Mulanay property will constitute res judicata in the case, and vice versa. The
Court also agrees with its ruling that the RTC-Makati case should be the priority case because it was filed earlier and, therefore, the appropriate
vehicle for litigating all issues in this case.

The Court having ruled that the CA properly dismissed the petitioners complaint due to the presence of litis pendentia and the violation of the
rule on forum shopping, there is no need to rule further on the other issues raised by the petitioners and the respondents in this case.

WHEREFORE, the petition is DENIED.

SO ORDERED.
 9. Manaloto VS. Veloso III

Republic of the Philippines

Supreme Court

Manila

FIRST DIVISION

ERMELINDA C. MANALOTO, AURORA J. CIFRA, G.R. No. 171365

FLORDELIZA J. ARCILLA, LOURDES J. CATALAN,
ETHELINDA J. HOLT, BIENVENIDO R. JONGCO,
ARTEMIO R. JONGCO, JR. and JOEL JONGCO,

Petitioners,
Present:

CORONA, C.J.,
- versus -
Chairperson,

VELASCO, JR.,

NACHURA,*
ISMAEL VELOSO III,
LEONARDO-DE CASTRO, and
Respondent.
PEREZ, JJ.

Promulgated:

October 6, 2010

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

LEONARDO-DE CASTRO, J.:

Before Us is a Petition for Review on Certiorari of the Decision[1] dated January 31, 2006 of the Court Appeals in CA-G.R. CV No. 82610,
which affirmed with modification the Resolution[2] dated September 2, 2003 of Branch 227 of the Regional Trial Court (RTC-Branch 227) of
Quezon City in Civil Case No. Q-02-48341.
We partly reproduce below the facts of the case as culled by the Court of Appeals from the records:

This case is an off-shoot of an unlawful detainer case filed by [herein petitioners] Ermelinda C. Manaloto, Aurora J. Cifra, Flordeliza J. Arcilla,
Lourdes J. Catalan, Ethelinda J. Holt, Bienvenido R. Jongco, Artemio R. Jongco, Jr. and Joel Jongco against [herein respondent]. In said
complaint for unlawful detainer, it was alleged that they are the lessors of a residential house located at No. 42 Big Horseshoe Drive, Horseshoe
Village, Quezon City [subject property] which was leased to [respondent] at a monthly rental of P17,000.00. The action was instituted on the
ground of [respondents] failure to pay rentals from May 23, 1997 to December 22, 1998 despite repeated demands. [Respondent] denied the non-
payment of rentals and alleged that he made an advance payment of P825,000.00 when he paid for the repairs done on the leased property.

After trial, the Metropolitan Trial Court (MeTC) decided in favor of [petitioners] by ordering [respondent] to (a) vacate the premises at No. 42
Big Horseshoe Drive, Horseshoe Village, Quezon City; (b) pay [petitioners] the sum of P306,000.00 corresponding to the rentals due from May
23, 1997 to November 22, 1998, and the sum of P17,000.00 a month thereafter until [respondent] vacates the premises; and (c) pay [petitioners]
the sum of P5,000.00 as attorneys fees.

On appeal to the Regional Trial Court (RTC) [Branch 88, Quezon City], the MeTC decision was reversed. [Respondent] was ordered to pay
arrearages from May 23, 1997 up to the date of the decision but he was also given an option to choose between staying in the leased property or
vacating the same, subject to the reimbursement by [petitioners] of one-half of the value of the improvements which it found to be in the amount
of P120,000.00. [Respondent] was also given the right to remove said improvements pursuant to Article 1678 of the Civil Code, should
[petitioners] refuse to pay P60,000.00.

When both parties moved for the reconsideration of the RTC decision, the RTC issued an Order dated February 23, 2001 modifying its previous
ruling by increasing the value of the improvements from P120,000.00 to P800,000.00.

After successive appeals to the Court of Appeals and the Supreme Court, the decision of the RTC dated November 29, 2000 which reversed the
decision of the MeTC, became final and executory.[3]

Whilst respondents appeal of the Metropolitan Trial Court (MeTC) judgment in the unlawful detainer case was pending before the RTC-Branch
88, respondent filed before the RTC-Branch 227 on November 26, 2002 a Complaint for Breach of Contract and Damages [4] against the
petitioners, docketed as Civil Case No. Q-02-48341. The said complaint alleged two causes of action. The first cause of action was for damages
because the respondent supposedly suffered embarrassment and humiliation when petitioners distributed copies of the above-mentioned MeTC
decision in the unlawful detainer case to the homeowners of Horseshoe Village while respondents appeal was still pending before the Quezon
City RTC-Branch 88. The second cause of action was for breach of contract since petitioners, as lessors, failed to make continuing repairs on the
subject property to preserve and keep it tenantable. Thus, respondent sought the following from the court a quo:

PRAYER

WHEREFORE, premises considered, it is respectfully prayed that after hearing the court render a decision against the [herein petitioners] and in
favor of the [herein respondent] by

1. Ordering [petitioners] to pay [respondent] the following amounts:

a) P1,500,000.00 as moral damages and consequential damages;

b) P500,000.00 as exemplary damages;

c) P425,000.00 representing the difference of the expenses of the improvements of P825,000.00 and P400,000.00 pursuant to Art. 1678 of the
Civil Code;

d) P594,000.00 representing interest for three (3) years from 1998 to 2000 on the P825,000.00 advanced by the [respondent] at the rate of 24%
per annum;

e) P250,000.00 as compensation for the [respondents] labor and efforts in overseeing and attending the needs of contractors the repair/renovation
of the leased premises;

f) P250,000.00, plus 20% of all recoveries from [petitioners] and P2,500.00 per hearing as attorneys fees;

g) Cost of suit.

[Respondent] further prays for such other reliefs and remedies which are just and equitable under the premises. [5]

The petitioners filed an Omnibus Motion[6] on February 18, 2003 praying for, among other reliefs, the dismissal of respondents complaint in Civil
Case No. Q-02-48341.Petitioners argued that respondent had no cause of action against them because the MeTC decision in the unlawful detainer
case was a matter of public record and its disclosure to the public violated no law or any legal right of the respondent. Moreover, petitioners
averred that the respondents present Complaint for Breach of Contract and Damages was barred by prior judgment since it was a mere replication
of respondents Answer with Compulsory Counterclaim in the unlawful detainer case before the MeTC. The said unlawful detainer case was
already judicially decided with finality.

On September 2, 2003, the RTC-Branch 227 issued a Resolution dismissing respondents complaint in Civil Case No. Q-02-48341 for violating
the rule against splitting of cause of action, lack of jurisdiction, and failure to disclose the pendency of a related case. The RTC-Branch 227
adjudged that Civil Case No. Q-02-48341 involved the same facts, parties, and causes of action as those in the unlawful detainer case, and the
MeTC had already properly taken cognizance of the latter case.

Respondent received a copy of the RTC-Branch 227 decision in Civil Case No. Q-02-48341 on September 26, 2003. He filed a Motion for
Reconsideration[7] of said judgment on October 10, 2003, which RTC-Branch 227 denied in an Order[8] dated December 30, 2003.

Respondent received a copy of the RTC-Branch 227 order denying his Motion for Reconsideration on February 20, 2004, and he filed his Notice
of Appeal[9] on March 1, 2004. However, the RTC-Branch 227, in an Order[10] dated March 23, 2004, dismissed respondents appeal for being
filed out of time.

Respondent received a copy of the RTC-Branch 27 order dismissing his appeal on April 30, 2004 and he filed a Motion for Reconsideration [11] of
the same on May 3, 2004. The RTC-Branch 227, in another Order[12] dated May 31, 2004, granted respondents latest motion because it was
convinced that it is but appropriate and fair to both parties that this matter of whether or not the Appeal was filed on time, be resolved by the
appellate court rather than by this Court. The RTC-Branch 227 then ordered that the records of the case be forwarded as soon as possible to the
Court of Appeals for further proceedings.

The Court of Appeals, in a Resolution[13] dated February 8, 2005, resolved to give due course to respondents appeal. Said appeal was docketed as
CA-G.R. CV No. 82610.
On January 31, 2006, the Court of Appeals rendered its Decision in CA-G.R. CV No. 82610. The Court of Appeals fully agreed with the RTC-
Branch 227 in dismissing respondents second cause of action (i.e., breach of contract) in Civil Case No. Q-02-48341. The appellate court,
however, held that RTC-Branch 227 should have proceeded with the trial on the merits of the first cause of action (i.e., damages) in Civil Case
No. Q-02-48341, because [a]lthough [herein respondent] may have stated the same factual antecedents that transpired in the unlawful detainer
case, such allegations were necessary to give an overview of the facts leading to the institution of another case between the parties before the
RTC acting in its original jurisdiction.[14]

The Court of Appeals then went on to find that petitioners were indeed liable to respondent for damages:

No doubt, distributing the copies was primarily intended to embarrass [herein respondent] in the community he mingled in. We are not unmindful
of the fact that court decisions are public documents and the general public is allowed access thereto to make inquiries thereon or to secure a copy
thereof. Nevertheless, under the circumstances of this case, although court decisions are public documents, distribution of the same during the
pendency of an appeal was clearly intended to cause [respondent] some form of harassment and/or humiliation so that [respondent] would be
ostracized by his neighbors. The appeal may have delayed the attainment of finality of the determination of the rights of the parties and the
execution in the unlawful detainer case but it did not justify [herein petitioners] pre-emption of the outcome of the appeal. By distributing copies
of the MeTC decision, [petitioners] appeared to have assumed that the MeTC decision would simply be affirmed and therefore they tried to cause
the early ouster of [respondent] thinking that a humiliated [respondent] would scurry out of the leased premises.Clearly, there was evident bad
faith intended to mock [respondents] right to appeal which is a statutory remedy to correct errors which might have been committed by the lower
court.

Thus, moral damages may be awarded since [petitioners] acted in bad faith. Bad faith does not simply connote bad judgment or negligence, it
imports a dishonest purpose or some moral obliquity and conscious doing of a wrong, a breach of known duty through some motive or interest or
ill will that partakes of the nature of fraud. However, an award of moral damages would require certain conditions to be met, to wit: (1) first, there
must be an injury, whether physical, mental or psychological, clearly sustained by the claimant; (2) second, there must be culpable act or
omission factually established; (3) third, the wrongful act or omission of the defendant is the proximate cause of the injury sustained by the
claimant; and (4) fourth, the award of damages is predicated on any of the cases stated in Article 2219 of the Civil Code.

But it must again be stressed that moral damages are emphatically not intended to enrich a plaintiff at the expense of the defendant. When
awarded, moral damages must not be palpably and scandalously excessive as to indicate that it was the result of passion, prejudice or corruption
on the part of the trial court judge. For this reason, this Court finds an award of P30,000.00 moral damages sufficient under the circumstances.

On the other hand, to warrant the award of exemplary damages, the wrongful act must be accompanied by bad faith, and an award of damages
would be allowed only if the guilty party acted in a wanton, fraudulent, reckless or malevolent manner. Accordingly, exemplary damages in the
amount of P10,000.00 is appropriate.[15]

In the end, the Court of Appeals decreed:

WHEREFORE, the decision of the Regional Trial Court is AFFIRMED with the MODIFICATION that the case is dismissed only as to the
second cause of action. As to the first cause of action, [herein petitioners] are ordered to pay [herein respondent] moral damages of P30,000.00
and exemplary damages of P10,000.00.[16]

Hence, the instant Petition for Review.

Petitioners assert that respondents appeal of the RTC-Branch 227 Resolution dated September 2, 2003, which dismissed the latters complaint in
Civil Case No. Q-02-48341, was filed out of time. Respondent received a copy of the said resolution on September 26, 2003, and he only had 15
days from such date to file his appeal, or until October 11, 2003. Respondent, instead, filed a Motion for Reconsideration of the resolution
on October 10, 2003, which left him with only one more day to file his appeal. The RTC-Branch 227 subsequently denied respondents Motion
for Reconsideration in an Order dated December 30, 2003, which the respondent received on February 20, 2004.Respondent only had until the
following day, February 21, 2004, to file the appeal. However, respondent filed his Notice of Appeal only on March 1, 2004. Hence, petitioners
conclude that the dismissal of respondents complaint in Civil Case No. Q-02-48341 already attained finality.

Petitioners argue in the alternative that the award of damages in respondents favor has no factual and legal bases. They contend that the Court of
Appeals erred in awarding moral and exemplary damages to respondent based on the bare and unproven allegations in the latters complaint and
without the benefit of any hearing or trial. While the appellate court declared that RTC-Branch 227 should have proceeded with the trial on the
merits involving the action for damages, it surprisingly went ahead and ruled on petitioners liability for said damages even without trial. Even
assuming for the sake of argument that respondents allegations in his complaint are true, he still has no cause of action for damages against
petitioners, for the disclosure of a court decision, which is part of public record, did not cause any legal and compensable injury to respondent.

Respondent, on the other hand, maintains that his appeal of the September 2, 2003 Resolution of the RTC-Branch 227 to the Court of Appeals
was timely filed and that the same was aptly given due course. In addition, respondent asserts that the appellate court was correct in holding
petitioners liable for damages even without any hearing or trial since petitioners, in filing their omnibus motion praying for the dismissal of
respondents complaint on the ground of no cause of action, were deemed to have hypothetically admitted as true the allegations in said complaint.

The petition is partly meritorious.

We note, at the outset, that the propriety of the dismissal by the RTC-Branch 227 of respondents second cause of action against petitioners (e.g.,
for breach of contract) was no longer disputed by the parties. Thus, the present appeal pertains only to respondents first cause of action (e.g., for
damages), and in connection therewith, we are called upon to resolve the following issues: (1) whether respondent timely filed his appeal of the
Resolution dated September 2, 2003 of the RTC-Branch 227 before the Court of Appeals; and (2) whether respondent is entitled to the award of
moral and exemplary damages.

We answer the first issue on the timeliness of respondents appeal affirmatively.

Jurisprudence has settled the fresh period rule, according to which, an ordinary appeal from the RTC to the Court of Appeals, under Section 3 of
Rule 41 of the Rules of Court, shall be taken within fifteen (15) days either from receipt of the original judgment of the trial court or from receipt
of the final order of the trial court dismissing or denying the motion for new trial or motion for reconsideration. In Sumiran v. Damaso,[17] we
presented a survey of the cases applying the fresh period rule:

As early as 2005, the Court categorically declared in Neypes v. Court of Appeals that by virtue of the power of the Supreme Court to amend,
repeal and create new procedural rules in all courts, the Court is allowing a fresh period of 15 days within which to file a notice of appeal in
the RTC, counted from receipt of the order dismissing or denying a motion for new trial or motion for reconsideration. This would
standardize the appeal periods provided in the Rules and do away with the confusion as to when the 15-day appeal period should be counted.
Thus, the Court stated:

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

The foregoing ruling of the Court was reiterated in Makati Insurance Co., Inc. v. Reyes, to wit:

Propitious to petitioner is Neypes v. Court of Appeals, promulgated on 14 September 2005 while the present Petition was already pending before
us. x x x.
xxxx

With the advent of the "fresh period rule" parties who availed themselves of the remedy of motion for reconsideration are now allowed
to file a notice of appeal within fifteen days from the denial of that motion.

The "fresh period rule" is not inconsistent with Rule 41, Section 3 of the Revised Rules of Court which states that the appeal shall be taken
"within fifteen (15) days from notice of judgment or final order appealed from." The use of the disjunctive word "or" signifies disassociation and
independence of one thing from another. It should, as a rule, be construed in the sense which it ordinarily implies. Hence, the use of "or" in the
above provision supposes that the notice of appeal may be filed within 15 days from the notice of judgment or within 15 days from notice
of the "final order," x x x.

xxxx

The "fresh period rule" finally eradicates the confusion as to when the 15-day appeal period should be counted from receipt of notice of judgment
or from receipt of notice of "final order" appealed from.

Taking our bearings from Neypes, in Sumaway v. Urban Bank, Inc., we set aside the denial of a notice of appeal which was purportedly filed five
days late. With the fresh period rule, the 15-day period within which to file the notice of appeal was counted from notice of the denial of the
therein petitioner's motion for reconsideration.

We followed suit in Elbia v. Ceniza, wherein we applied the principle granting a fresh period of 15 days within which to file the notice of appeal,
counted from receipt of the order dismissing a motion for new trial or motion for reconsideration or any final order or resolution.

Thereafter, in First Aqua Sugar Traders, Inc. v. Bank of the Philippine Islands, we held that a party-litigant may now file his notice of appeal
either within fifteen days from receipt of the original decision or within fifteen days from the receipt of the order denying the motion for
reconsideration.

In De los Santos v. Vda. de Mangubat, we applied the same principle of "fresh period rule," expostulating that procedural law refers to the
adjective law which prescribes rules and forms of procedure in order that courts may be able to administer justice. Procedural laws do not come
within the legal conception of a retroactive law, or the general rule against the retroactive operation of statutes. The "fresh period rule" is
irrefragably procedural, prescribing the manner in which the appropriate period for appeal is to be computed or determined and, therefore, can be
made applicable to actions pending upon its effectivity, such as the present case, without danger of violating anyone else's rights. [18] (Emphases
supplied.)

Also in Sumiran, we recognized the retroactive application of the fresh period rule to cases pending and undetermined upon its effectivity:

The retroactivity of the Neypes rule in cases where the period for appeal had lapsed prior to the date of promulgation of Neypes on September
14, 2005, was clearly explained by the Court in Fil-Estate Properties, Inc. v. Homena-Valencia, stating thus:

The determinative issue is whether the "fresh period" rule announced in Neypes could retroactively apply in cases where the period for appeal
had lapsed prior to 14 September 2005 when Neypes was promulgated. That question may be answered with the guidance of the general rule
that procedural laws may be given retroactive effect to actions pending and undetermined at the time of their passage, there being no
vested rights in the rules of procedure. Amendments to procedural rules are procedural or remedial in character as they do not create new or
remove vested rights, but only operate in furtherance of the remedy or confirmation of rights already existing. [19] (Emphases supplied.)
In the case before us, respondent received a copy of the Resolution dated September 2, 2003 of the RTC-Branch 227 dismissing his complaint in
Civil Case No. Q-02-48341 on September 26, 2003. Fourteen days thereafter, on October 10, 2003, respondent filed a Motion for
Reconsideration of said resolution. The RTC-Branch 227 denied respondents Motion for Reconsideration in an Order dated December 30, 2003,
which the respondent received on February 20, 2004. On March 1, 2004, just after nine daysfrom receipt of the order denying his Motion for
Reconsideration, respondent already filed his Notice of Appeal. Clearly, under the fresh period rule, respondent was able to file his appeal well-
within the prescriptive period of 15 days, and the Court of Appeals did not err in giving due course to said appeal in CA-G.R. CV No. 82610.

We likewise agree with the Court of Appeals that the RTC-Branch 227 should not have dismissed respondents complaint for damages on the
ground of failure to state a cause of action.

According to Rule 2, Section 2 of the Rules of Court, a cause of action is the act or omission by which a party violates a right of another.

When the ground for dismissal is that the complaint states no cause of action, such fact can be determined only from the facts alleged in the
complaint and from no other, and the court cannot consider other matters aliunde. The test, therefore, is whether, assuming the allegations of fact
in the complaint to be true, a valid judgment could be rendered in accordance with the prayer stated therein. [20]

Respondent made the following allegations in support of his claim for damages against petitioners:

FIRST CAUSE OF ACTION

28. After the promulgation of the Metropolitan Trial Court of its Decision dated August 3, 1999, ordering the [herein respondent] and all person
claiming rights under him to

(a) Vacate the leased premises;

(b) pay the [herein petitioners] the sum of P306,000.00 as unpaid rentals from May 23, 1997 to November 22, 1998; and

(c) pay the sum of P5,000.00 as attorneys fees;

But while said Decision was still pending appeal with the Regional Trial Court, the [petitioners], through [petitioner] Manaloto, already
distributed copies of said Decision to some of the homeowners of Horseshoe Village, who personally know the [respondent]. This act is a direct
assault or character assassination on the part of the [respondent] because as stated in the said decision, [respondent] has been staying in the
premises but did not or refused to pay his monthly rentals for a long period of time when in truth and in fact was untrue.

29. That from the time the said decision was distributed to said members homeowners, the [respondent] became the subject of conversation or
talk of the town and by virtue of which [respondents] good name within the community or society where he belongs was greatly damaged; his
reputation was besmirched; [respondent] suffered sleepless night and serious anxiety.[Respondent], who is the grandson of the late Senator Jose
Veloso and Congressman Ismael Veloso, was deprived of political career and to start with was to run as candidate for Barangay Chairman within
their area which was being offered to him by the homeowners but this offer has started to fade and ultimately totally vanished after the
distribution of said Decision. Damages to his good names and reputations and other damages which he suffered as a consequence thereof, may be
reasonably compensated for at least P1,500,000.00 as moral and consequential damages.

30. In order to deter [petitioners] and others from doing as abovementioned, [petitioners] should likewise be assessed exemplary damages in the
amount of P500,000.00.[21]
A cause of action (for damages) exists if the following elements are present: (1) a right in favor of the plaintiff by whatever means and under
whatever law it arises or is created; (2) an obligation on the part of the named defendant to respect or not to violate such right; and (3) an act or
omission on the part of such defendant violative of the right of the plaintiff or constituting a breach of the obligation of defendant to the plaintiff
for which the latter may maintain an action for recovery of damages.[22] We find that all three elements exist in the case at bar. Respondent may
not have specifically identified each element, but it may be sufficiently determined from the allegations in his complaint.

First, respondent filed the complaint to protect his good character, name, and reputation. Every man has a right to build, keep, and be favored
with a good name. This right is protected by law with the recognition of slander and libel as actionable wrongs, whether as criminal offenses or
tortuous conduct.[23]

Second, petitioners are obliged to respect respondents good name even though they are opposing parties in the unlawful detainer case. As Article
19 of the Civil Code requires, [e]very person must, in the exercise of his rights and in the performance of his duties, act with justice, give
everyone his due, and observe honesty and good faith. A violation of such principle constitutes an abuse of rights, a tortuous conduct. We
expounded in Sea Commercial Company, Inc. v. Court of Appeals[24] that:

The principle of abuse of rights stated in the above article, departs from the classical theory that he who uses a right injures no one. The modern
tendency is to depart from the classical and traditional theory, and to grant indemnity for damages in cases where there is an abuse of rights, even
when the act is not illicit.

Article 19 was intended to expand the concept of torts by granting adequate legal remedy for the untold number of moral wrongs which is
impossible for human foresight to provide specifically in statutory law. If mere fault or negligence in ones acts can make him liable for damages
for injury caused thereby, with more reason should abuse or bad faith make him liable. The absence of good faith is essential to abuse of
right. Good faith is an honest intention to abstain from taking any unconscientious advantage of another, even through the forms or technicalities
of the law, together with an absence of all information or belief of fact which would render the transaction unconscientious. In business relations,
it means good faith as understood by men of affairs.

While Article 19 may have been intended as a mere declaration of principle, the cardinal law on human conduct expressed in said article has
given rise to certain rules, e.g. that where a person exercises his rights but does so arbitrarily or unjustly or performs his duties in a manner that is
not in keeping with honesty and good faith, he opens himself to liability. The elements of an abuse of rights under Article 19 are: (1) there is a
legal right or duty; (2) which is exercised in bad faith; (3) for the sole intent of prejudicing or injuring another. [25]

Petitioners are also expected to respect respondents dignity, personality, privacy and peace of mind under Article 26 of the Civil Code, which
provides:

ART. 26. Every person shall respect the dignity, personality, privacy and peace of mind of his neighbors and other persons. The following and
similar acts, though they may not constitute a criminal offense, shall produce a cause of action for damages, prevention and other relief:

(1) Prying into the privacy of anothers residence;

(2) Meddling with or disturbing the private life or family relations of another;

(3) Intriguing to cause another to be alienated from his friends;

(4) Vexing or humiliating another on account of his religious beliefs, lowly station in life, place of birth, physical defect, or other
personal condition.
Thus, Article 2219(10) of the Civil Code allows the recovery of moral damages for acts and actions referred to in Article 26, among other
provisions, of the Civil Code.

In Concepcion v. Court of Appeals,[26] we explained that:

The philosophy behind Art. 26 underscores the necessity for its inclusion in our civil law. The Code Commission stressed in no uncertain terms
that the human personality must be exalted. The sacredness of human personality is a concomitant consideration of every plan for human
amelioration. The touchstone of every system of law, of the culture and civilization of every country, is how far it dignifies man. If the statutes
insufficiently protect a person from being unjustly humiliated, in short, if human personality is not exalted - then the laws are indeed defective.
Thus, under this article, the rights of persons are amply protected, and damages are provided for violations of a persons dignity, personality,
privacy and peace of mind.

It is petitioners position that the act imputed to him does not constitute any of those enumerated in Arts. 26 and 2219. In this respect, the law is
clear. The violations mentioned in the codal provisions are not exclusive but are merely examples and do not preclude other similar or analogous
acts. Damages therefore are allowable for actions against a persons dignity, such as profane, insulting, humiliating, scandalous or abusive
language. Under Art. 2217 of the Civil Code, moral damages which include physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury, although incapable of pecuniary computation, may
be recovered if they are the proximate result of the defendants wrongful act or omission. [27]

And third, respondent alleged that the distribution by petitioners to Horseshoe Village homeowners of copies of the MeTC decision in the
unlawful detainer case, which was adverse to respondent and still on appeal before the RTC-Branch 88, had no apparent lawful or just purpose
except to humiliate respondent or assault his character. As a result, respondent suffered damages becoming the talk of the town and being
deprived of his political career.

Petitioners reason that respondent has no cause of action against them since the MeTC decision in the unlawful detainer case was part of public
records.

It is already settled that the public has a right to see and copy judicial records and documents. [28] However, this is not a case of the public seeking
and being denied access to judicial records and documents. The controversy is rooted in the dissemination by petitioners of the MeTC judgment
against respondent to Horseshoe Village homeowners, who were not involved at all in the unlawful detainer case, thus, purportedly affecting
negatively respondents good name and reputation among said homeowners. The unlawful detainer case was a private dispute between petitioners
and respondent, and the MeTC decision against respondent was then still pending appeal before the RTC-Branch 88, rendering suspect petitioners
intentions for distributing copies of said MeTC decision to non-parties in the case. While petitioners were free to copy and distribute such copies
of the MeTC judgment to the public, the question is whether they did so with the intent of humiliating respondent and destroying the latters good
name and reputation in the community.

Nevertheless, we further declare that the Court of Appeals erred in already awarding moral and exemplary damages in respondents favor when
the parties have not yet had the chance to present any evidence before the RTC-Branch 227. In civil cases, he who alleges a fact has the burden of
proving it by a preponderance of evidence. It is incumbent upon the party claiming affirmative relief from the court to convincingly prove its
claim. Bare allegations, unsubstantiated by evidence are not equivalent to proof under our Rules. In short, mere allegations are not evidence.[29]

At this point, the finding of the Court of Appeals of bad faith and malice on the part of petitioners has no factual basis. Good faith is presumed
and he who alleges bad faith has the duty to prove the same. Good faith refers to the state of the mind which is manifested by the acts of the
individual concerned. It consists of the intention to abstain from taking an unconscionable and unscrupulous advantage of another. Bad faith, on
the other hand, does not simply connote bad judgment to simple negligence. It imports a dishonest purpose or some moral obliquity and
conscious doing of a wrong, a breach of known duty due to some motive or interest or ill will that partakes of the nature of fraud. Malice
connotes ill will or spite and speaks not in response to duty. It implies an intention to do ulterior and unjustifiable harm.[30]
We cannot subscribe to respondents argument that there is no more need for the presentation of evidence by the parties since petitioners, in
moving for the dismissal of respondents complaint for damages, hypothetically admitted respondents allegations. The hypothetical admission of
respondents allegations in the complaint only goes so far as determining whether said complaint should be dismissed on the ground of failure to
state a cause of action. A finding that the complaint sufficiently states a cause of action does not necessarily mean that the complaint is
meritorious; it shall only result in the reinstatement of the complaint and the hearing of the case for presentation of evidence by the parties.

WHEREFORE, in view of all the foregoing, the petition is PARTIALLY GRANTED. The Decision dated January 31, 2006 of the Court of
Appeals in CA-G.R. CV No. 82610 is AFFIRMED WITH MODIFICATIONS. The award of moral and exemplary damages made by the
Court of Appeals in favor of respondent Ismael Veloso III is DELETED. The complaint of respondent Ismael Veloso III in Civil Case No. Q-02-
48341 is hereby REINSTATED before Branch 227 of the Regional Trial Court of Quezon City only in so far as the first cause of action is
concerned. The said court is DIRECTED to hear and dispose of the case with dispatch.

SO ORDERED.
 10. Macasiang VS. Zamora

Republic of the Philippines

Supreme Court

Manila

THIRD DIVISION

DOLORES ADORA MACASLANG, G.R. No. 156375

Petitioner,

Present:

CARPIOMORALES, Chairperson,

BRION,

-versus - BERSAMIN,

VILLARAMA, and

SERENO, JJ.

RENATO AND MELBA ZAMORA, Promulgated:

Respondents.

May 30, 2011

x-----------------------------------------------------------------------------------------x

DECISION

BERSAMIN, J.:

The Regional Trial Court (RTC) is not limited in its review of the decision of the Municipal Trial Court (MTC) to the issues assigned by the
appellant, but can decide on the basis of the entire records of the proceedings of the trial court and such memoranda or briefs as may be submitted
by the parties or required by the RTC.

The petitioner appeals the decision promulgated on July 3, 2002,[1] whereby the Court of Appeals (CA) reversedfor having no basis in fact and in
law the decision rendered on May 18, 2000[2] by the Regional Trial Court, Branch 25, in Danao City (RTC) thathad dismissed the respondents
action

for ejectment against the petitioner, andreinstated the decision dated September 13, 1999 of the Municipal Trial Court in Cities (MTCC)
of DanaoCity (ordering the petitioner as defendant to vacate the premises and to pay attorneys fees of P10,000.00 and monthly rental
of P5,000.00 starting December 1997 until they vacated the premises).[3]
We grant the petition for review and rule that contrary to the CAs conclusion, the RTCas an appellate court properly considered and resolved
issues even if not raised in the appeal from the decisionrendered in an ejectment case by the MTCC.

ANTECEDENTS

On March 10, 1999, the respondents filed a complaint for unlawful detainer in the MTCC, alleging that the [petitioner] sold to [respondents] a
residential land located in Sabang, DanaoCity and that the [petitioner] requested to be allowed to live in the house with a promise to vacate as
soon as she would be able to find a new residence. They further alleged thatdespitetheir demand after a year, the petitioner failed or refused to
vacate the premises.

Despite the due service of the summons and copy of the complaint, the petitioner did not file heranswer. The MTCC declared her in defaultupon
the respondents motion to declare her in default, and proceeded to receivethe respondentsoral testimony and documentary evidence. Thereafter,
on September 13, 1999, the MTCC rendered judgment against her, disposing:

WHEREFORE, considering the foregoing, Judgment is hereby rendered in favor [of] plaintiffs (sic) spouses Renato Zamora and Melba Zamora
and against defendant Dolores AdoraMacaslang, ordering defendant to vacate the properties in question, to pay to plaintiffs Attorneys Fees in the
sum of P10,000.00 and monthly rental of P5,000.00 starting December, 1997 until the time the defendant shall have vacated the properties in
question.

SO ORDERED.[4]

The petitioner appealed to the RTC, averring the following as reversible errors, namely:

1. Extrinsic Fraud was practiced upon defendant-appellant which ordinary prudence could not have guarded against and by reason of which
she has been impaired of her rights.

2. Defendant-Appellant has a meritorious defense in that there was no actual sale considering that the absolute deed of sale relied upon by the
plaintiff-appell[ees] is a patent-nullity as her signature therein was procured through fraud and trickery. [5]

and praying through her appeal memorandum as follows:

Wherefore, in view of the foregoing, it is most respectfully prayed for that judgment be rendered in favor of defendant-appellant ordering that this
case be remanded back to the Court of Origin, Municipal Trial Court of Danao City, for further proceedings to allow the defendant to present her
evidence, and thereafter, to render a judgment anew.[6]

On May 18, 2000, the RTC resolved the appeal, to wit:[7]

WHEREFORE,judgment is hereby rendered dismissing the complaint for failure to state a cause of action.
The same may, however, be refiled in the same Court, by alleging plaintiffs cause of action, if any.

Plaintiffs Motion for Execution of Judgment of the lower court is rendered moot by this judgment.

SO ORDERED.

The respondents appealed to the CA, assailing the RTCs decision for disregarding the allegations in the complaint in determining the existence or
non-existence of a cause of action.

On July 3, 2002, the CA reversed and set aside the RTCs decision and reinstated the MTCCs decision in favor of the respondents, disposing:

WHEREFORE,foregoing premises considered, the Petition is hereby GIVEN DUE COURSE. Resultantly, the impugned decision of the Regional
Trial Court is hereby REVERSED and SET ASIDE for having no basis in fact and in law, and the Decision of the Municipal Trial Court in Cities
REINSTATED and AFFIRMED. No costs.

SO ORDERED.[8]

The petitionersmotion for reconsideration was denied onNovember 19, 2002.

ISSUES

Hence, the petitioner appeals the CAs adverse decision, submitting legal issues, as follows:

1. Whether or not the Regional Trial Court in the exercise of its Appellate Jurisdiction is limited to the assigned errors in the Memorandum or
brief filed before it or whether it can decide the case based on the entire records of the case, as provided for in Rule 40, Sec. 7. This is a novel
issue which, we respectfully submit, deserves a definitive ruling by this Honorable Supreme Court since it involves the application of a new
provision, specifically underlined now under the 1997 Revised Rules on Civil procedure.

2. Whether or not in an action for unlawful detainer, where there was no prior demand to vacate and comply with the conditions of the lease
made, a valid cause of action exists?

3. Whether or not in reversing the Regional Trial Court Decision and reinstating and affirming the decision of the Municipal Circuit Trial
Court, which was tried and decided by the MCTC in violation of the Rules on Summary Procedure, the Court of Appeals sanctioned a gross
departure from the usual course of judicial proceedings?[9]

The issues that this Court has to resolve are stated thuswise:

1. Whether or not the CA correctly found that the RTC committed reversible error in ruling on issues not raised by the petitioner in her appeal;
2. Whether or not the CA correctly found that the complaint stated a valid cause of action;

3. Whether or not the CA erred in finding that there was a valid demand to vacate made by the respondents on the petitioner; and

4. Whether or not the petitioners defense of ownership was meritorious.

RULING

We grant the petition for review.

A.

As an appellate court, RTC may rule

upon an issue notraised on appeal

In its decision, the CA ruled that the RTC could not resolve issues that were not assigned by the petitioner in her appeal memorandum,
explaining:

Indeed(,) We are rather perplexed why the Regional Trial Court, in arriving at its decision, discussed and ruled on issues or grounds which were
never raised, assigned, or argued on by the Defendant-appellee in her appeal to the former. A careful reading of the Defendant-appellees appeal
memorandum clearly shows that it only raised two (2) grounds, namely (a) alleged extrinsic fraud, (b) meritorious defenses based on nullity of
the Deed of Sale Instrument. And yet the Trial Court, in its decision, ruled on issues not raised such as lack of cause of action and no prior
demand to vacate having been made.

Only errors assigned and properly argued on the brief and those necessarily related thereto, may be considered by the appellate court in resolving
an appeal in a civil case. Based on said clear jurisprudence, the court a quo committed grave abuse of discretion amounting to lack of jurisdiction
when it resolved Defendant-appellees appeal based on grounds or issues not raised before it, much less assigned by Defendant-appellee as an
error.

Not only that. It is settled that an issue which was not raised during the Trial in the court below would not be raised for the first time on appeal as
to do so would be offensive to the basic rules of fair play, justice and due process (Victorias Milling Co., Inc. vs. CA, 333 SCRA 663). We can
therefore appreciate Plaintiffs-appellants dismay caused by the Regional Trial Courts blatant disregard of a basic and fundamental right to due
process.[10]

The petitioner disagrees with the CA and contends that the RTC as an appellate courtcould rule on the failure of the complaint to state a cause of
action and the lack of demand to vacate even if not assigned in the appeal.

We concur with the petitioners contention.

The CA might have been correct had the appeal been a first appeal from the RTC to the CA or another proper superior court, in which instance
Section 8 of Rule 51, which applies to appeals from the RTC to the CA,imposesthe express limitation of the review to only those specified in the
assignment of errorsor closely related to or dependent on an assigned error and properly argued in the appellants brief, viz:

Section 8. Questions that may be decided. No error which does not affect the jurisdiction over the subject matter or the validity of the judgment
appealed from or the proceeding therein will be considered unless stated in the assignment of errors, or closely related to or dependent on
an assigned error and properly argued in the brief, save as the court may pass upon plain errors and clerical errors.

Butthe petitioners appeal herein,being taken from the decision of the MTCC to the RTC, was governed by a different rule, specifically Section 18
of Rule 70 of the Rules of Court, to wit:

Section 18. xxx

xxx

The judgment or final order shall be appealable to the appropriate Regional Trial Court which shall decide the same on the basis of the
entire record of the proceedings had in the court of origin and such memoranda and/or briefs as may be submitted by the parties or
required by the Regional Trial Court. (7a)

As such,the RTC, in exercising appellate jurisdiction,was not limited to the errors assigned in the petitioners appeal memorandum, but
coulddecide on the basis of the entire record of the proceedingshad in the trial court and such memoranda and/or briefs as may be submitted by
the parties or required by the RTC.

The difference between the procedures for deciding on review is traceable to Section 22 of Batas PambansaBlg. 129,[11]which provides:

Section 22. Appellate Jurisdiction. Regional Trial Courts shall exercise appellate jurisdiction over all cases decided by Metropolitan Trial Courts,
Municipal Trial Courts, and Municipal Circuit Trial Courts in their respective territorial jurisdictions.Such cases shall be decided on the basis of
the entire record of the proceedings had in the court of origin [and] such memoranda and/or briefs as may be submitted by the parties or
required by the Regional Trial Courts. The decision of the Regional Trial Courts in such cases shall be appealable by petition for review to the
Court of Appeals which may give it due course only when the petition shows prima facie that the lower court has committed an error of fact or
law that will warrant a reversal or modification of the decision or judgment sought to be reviewed. [12]

As its compliance with the requirement of Section 36 of Batas PambansaBlg. 129to adopt special rules or procedures applicable to such cases in
order to achieve an expeditious and inexpensive determination thereof without regard to technical rules, the Court promulgated the 1991 Revised
Rules on Summary Procedure, whereby it institutionalized the summary procedure for all the first level courts. Section 21 of the 1991 Revised
Rules on Summary Procedurespecifically stated:

Section 21. Appeal. Thejudgment or final order shall be appealable to the appropriate Regional Trial Court which shall decide the same
in accordance with Section 22 of Batas PambansaBlg. 129. The decision of the Regional Trial Court in civil cases governed by this Rule,
including forcible entry and unlawful detainer shall be immediately executory, without prejudice to a further appeal that may be taken therefrom.
Section 10 of Rule 70 shall be deemed repealed.

Later on, the Court promulgated the 1997 Rules of Civil Procedure, effective on July 1, 1997, and incorporated in Section 7 of Rule 40 thereof
the directive to the RTC to decide appealed caseson the basis of the entire record of the proceedings had in the court of origin and such
memoranda as are filed,viz:

Section 7. Procedure in the Regional Trial Court.

(a) Upon receipt of the complete record or the record on appeal, the clerk of court of the Regional Trial Court shall notify the parties of such fact.

(b) Within fifteen (15) days from such notice, it shall be the duty of the appellant to submit a memorandum which shall briefly discuss the errors
imputed to the lower court, a copy of which shall be furnished by him to the adverse party. Within fifteen (15) days from receipt of the appellants
memorandum, the appellee may file his memorandum. Failure of the appellant to file a memorandum shall be a ground for dismissal of the
appeal.

(c) Upon the filing of the memorandum of the appellee, or the expiration of the period to do so, the case shall be considered submitted for
decision. The Regional Trial Court shall decide the case on the basis of the entire record of the proceedings had in the court of origin and
such memoranda as are filed. (n)

As a result, the RTC presently decides all appeals from the MTC based on the entire record of the proceedings had in the court of origin and such
memoranda or briefs as are filed in the RTC.

Yet, even withoutthe differentiation in the procedures of deciding appeals, thelimitation of the review to onlythe errors assigned and properly
argued in the appeal brief or memorandum and the errors necessarily related to such assigned errorsought not to have obstructed the CA from
resolving the unassigned issues by virtue of their coming under one or several of the following recognized exceptions to the limitation, namely:

(a) When the question affectsjurisdiction over the subject matter;

(b) Matters that are evidently plain or clerical errors within contemplation of law;

(c) Matters whose consideration is necessary in arriving at a just decision and complete resolution of the case or in serving the interests of justice
or avoiding dispensing piecemeal justice;

(d) Matters raised in the trial court and are of record having some bearing on the issue submitted that the parties failed to raise or that the lower
court ignored;

(e) Matters closely related to an error assigned; and

(f) Matters upon which the determination of a question properly assigned is dependent. [13]

Consequently, the CA improperly disallowed the consideration and resolution of the two errors despite their being: (a)necessary in arriving at a
just decision and acomplete resolution of the case; and (b) matters of record having some bearing on the issues submitted that the lower court
ignored.

B.

CA correctly delved into and determined

whether or not complaint stateda cause of action

The RTC opined that the complaint failed to state a cause of action because the evidence showed that there was no demand to vacate made upon
the petitioner.

The CA disagreed, observingin its appealed decision:

But what is worse is that a careful reading of Plaintiffs-appellants Complaint would readily reveal that they have sufficiently established (sic) a
cause of action against Defendant-appellee. It is undisputed that as alleged in the complaint and testified to by Plaintiffs-appellants, a demand to
vacate was made before the action for unlawful detainer was instituted.

A complaint for unlawful detainer is sufficient if it alleges that the withholding of possession or the refusal is unlawful without necessarily
employing the terminology of the law (Jimenez vs. Patricia, Inc., 340 SCRA 525). In the case at bench, par. 4 of the Complaint alleges, thus:

4. After a period of one (1) year living in the aforementioned house, Plaintiff demanded upon defendant to vacate but she failed and refused;

From the foregoing allegation, it cannot be disputed that a demand to vacate has not only been made but that the same was alleged in the
complaint. How the Regional Trial Court came to the questionable conclusion that Plaintiffs-appellants had no cause of action is beyond Us.[14]

We concur with the CA.

A complaint sufficiently alleges a cause of action for unlawful detainer if it states the following:

(a)Initially, the possession of the property by the defendant was by contract with or by tolerance of the plaintiff;

(b)Eventually, such possession became illegal upon notice by the plaintiff to the defendant about the termination of the latters right of possession;

(c)Thereafter, the defendant remained in possession of the property and deprived the plaintiff of its enjoyment; and

(d)Within one year from the making of the last demand to vacate the propertyon the defendant, the plaintiff instituted the complaint for
ejectment.[15]

In resolving whether the complaint states a cause of actionor not, only the facts alleged in the complaint are considered. The test is whether the
court can render a valid judgment on the complaint based on the facts alleged and the prayer asked for. [16] Only ultimate facts, not legal
conclusions or evidentiary facts, are considered for purposes of applying the test.[17]

To resolve the issue, therefore, a look at the respondents complaint is helpful:

2. On September 10, 1997, defendant sold to plaintiffs a residential land located in Sabang, Danao City, covered by Tax Dec.0312417 RB with
an area of 400 square meters, including a residential house where defendant was then living covered by Tax Dec. 0312417 RB, a copy of the deed
of absolute [sale] of these properties is hereto attached as Annex A;
3. After the sale, defendant requested to be allowed to live in the house which plaintiff granted on reliance of defendants promise to
vacate as soon as she would be able to find a new residence;

4. After a period of one (1) year living in the aforementioned house, plaintiffs demanded upon defendant to vacate but she failed or refused.

5. Plaintiffs sought the aid of the barangay Lupon of Sabang, Danao City for arbitration but no settlement was reached as shown by a certification
to file action hereto attached as Annex B;

6. Plaintiffs were compelled to file this action and hire counsel for P10,000 by way of attorneys fee;

7. Defendant agreed to pay plaintiffs a monthly rental of P5,000 for the period of time that the former continued to live in the said house in
question.

WHEREFORE, it is respectfully prayed of this Honorable Court to render judgment ordering the defendant to vacate the properties in question,
ordering the defendant to pay plaintiffs attorneys fees in the sum of P10,000, ordering the defendant to pay the plaintiffs a monthly rental
of P5,000 starting in October 1997, until the time that defendant vacates the properties in question. Plaintiffs pray for such other refiefs consistent
with justice and equity.[18]

Based on its allegations, the complaintsufficiently stated a cause of action for unlawful detainer. Firstly, it averred that the petitioner possessed
the property by the mere tolerance of the respondents. Secondly, the respondents demanded that the petitioner vacate the property, thereby
rendering her possession illegal. Thirdly,she remained in possession of the property despite the demand to vacate. And, fourthly, the respondents
instituted the complaint on March 10, 1999,which was well within a year after the demand to vacate was made around September of 1998 or
later.

Yet, even as we rule that the respondents complaint stated a cause of action, we must find and hold that both the RTC and the CA erroneously
appreciatedthe real issue to be about the complaints failure to state a cause of action. It certainly was not so, butthe respondents lack of cause of
action. Their erroneous appreciationexpectedly prevented the correct resolution of the action.

Failure to state a cause of action and lack of cause of action are really different from each other.On the one hand, failure to state a cause of
actionrefers to the insufficiency of the pleading, and is a ground for dismissal under Rule 16 of the Rules of Court. On the other hand, lack of
cause action refers to a situation where the evidence does not prove the cause of action alleged in the pleading. Justice Regalado, a recognized
commentator on remedial law, has explained the distinction:[19]

xxx What is contemplated, therefore, is a failure to state a cause of action which is provided in Sec. 1(g) of Rule 16. This is a matter of
insufficiency of the pleading. Sec. 5 of Rule 10, which was also included as the last mode for raising the issue to the court, refers to the situation
where the evidence does not prove a cause of action. This is, therefore, a matter of insufficiency of evidence. Failure to state a cause of action is
different from failure to prove a cause of action. The remedy in the first is to move for dismissal of the pleading, while the remedy in the second
is to demur to the evidence, hence reference to Sec. 5 of Rule 10 has been eliminated in this section. The procedure would consequently be to
require the pleading to state a cause of action, by timely objection to its deficiency; or, at the trial, to file a demurrer to evidence, if such motion is
warranted.

A complaint states a cause of action if it avers the existence of the three essential elements of a cause of action, namely:

(a) The legal right of the plaintiff;

(b) The correlative obligation of the defendant; and

(c) The act or omission of the defendant in violation of said legal right.

If the allegations of the complaint do not aver the concurrence of these elements, the complaint becomes vulnerable to a motion to dismiss on the
ground of failure to state a cause of action.Evidently, it is not the lack or absence of a cause of action that is a ground for the dismissal of the
complaint but the fact that the complaint states no cause of action.Failure to state a cause of action may be raised at the earliest stages of an action
through a motion to dismiss, but lack of cause of action may be raised at any time after the questions of fact have been resolved on the basis of
the stipulations, admissions, or evidence presented.[20]

Having found that neither Exhibit C nor Exhibit E was a proper demand to vacate, [21] considering that Exhibit C (the respondents letter dated
February 11, 1998)demanded the payment of P1,101,089.90, and Exhibit E (theirletter dated January 21, 1999) demandedthe payment
of P1,600,000.00, the RTC concluded that the demand alleged in the complaint did not constitute a demand to pay rent and to vacate the premises
necessary in an action for unlawful detainer. It was this conclusion that caused the RTC to confuse the defect as failure of the complaint to state a
cause of action for unlawful detainer.

The RTCerred even in that regard.

To begin with, it was undeniable that Exhibit D (the respondents letter dated April 28, 1998) constitutedthedemand to vacate that validly
supported their action for unlawful detainer, because of its unmistakable tenor as a demand to vacate, which the following portion indicates:[22]

This is to give notice that since the mortgage to your property has long expired and that since the property is already in my name, I will be taking
over the occupancy of said property two (2) months from date of this letter.

Exhibit D, despite not explicitly using the wordvacate, relayed to the petitionerthe respondents desire to take over the possession of the property
by givingher no alternative exceptto vacate.The word vacate,according toGolden Gate Realty Corporation v. Intermediate Appellate Court,[23]is
not a talismanic word that must be employed in all notices to vacate.The tenantsin Golden Gate Realty Corporationhad defaulted in the payment
of rents, leading theirlessorto notify them to pay with a warning that a case of ejectment would be filed against themshould they not do so. The
Court held that the lessor had thereby given strong notice that you either pay your unpaid rentals or I will file a court case to have you thrown out
of my property,for therewas no other interpretation of the import of the notice due to the alternatives being clear cut, in that the tenants must pay
rentals that had been fixed and had become payable in the past, failing in which they must move out. [24]

Also, the demand not being to pay rent and to vacate did not render the cause of action deficient. Based on the complaint, the petitioners
possession was allegedly based on the respondents tolerance, not on any contract between them. Hence, thedemand to vacate sufficed.

C.

Ejectment was not proper due

to defense of ownership being established

The respondents cause of action for unlawful detainer was based on their supposed right to possession resulting from their having acquired it
through sale.

The RTCdismissed the complaint based on its following findings, to wit:

In the case at bench, there is conflict between the allegation of the complaint and the document attached thereto.

Simply stated, plaintiff alleged that she bought the house of the defendant for P100,000.00 on September 10, 1997 as stated in an alleged Deed of
Absolute Sale marked as Exhibit A to the complaint. Insofar as plaintiff is concerned, the best evidence is the said Deed of Absolute Sale.

The Court is surprised why in plaintiffs letter dated February 11, 1998, marked as Exhibit C and attached to the same complaint, she demanded
from the defendant the whooping sum of P1,101,089.90. It must be remembered that this letter was written five (5) months after the deed of
absolute sale was executed.

The same letter (Exhibit C) is not a letter of demand as contemplated by law and jurisprudence. The plaintiff simply said that she will appreciate
payment per notarized document. There is no explanation what this document is.

Plaintiffs letter dated April 28, 1998 (Exhibit D) contradicts her allegation that she purchased the house and lot mentioned in the complaint.
Exhibit D, which is part of the pleading and a judicial admission clearly shows that the house and lot of the defendant was not sold but
mortgaged.

Again, for purposes of emphasis and clarity, a portion of the letter (Exhibit D) reads:

This is to give notice that since the mortgage to your property has long expired and that since the property is already in my name, I will be taking
over the occupancy of said property two (2) months from date of this letter.

x xxx

Exhibit E, which is a letter dated January 21, 1999, shows the real transaction between the parties in their case. To reiterate, the consideration in
the deed of sale (Exhibit A) is P100,000.00 but in their letter (Exhibit E) she is already demanding the sum of P1,600,000.00 because somebody
was going to buy it for P2,000,000.00.

There are indications that point out that the real transaction between the parties is one of equitable mortgage and not sale. [25]

Despite holding herein that the respondents demand to vacate sufficed, we uphold the result of the RTC decision in favor of the petitioner. This
we do,because therespondents Exhibit Cand Exhibit E, by demandingpayment from the petitioner, respectively,of P1,101,089.90
and P1,600,000.00, revealedthe true nature of the transaction involving the property in question as one of equitable mortgage, not a sale.

Our upholding of the result reached by the RTC rests on the following circumstancesthat tended to show that the petitioner had not really sold the
property to the respondents, contrary to the latters averments, namely:

(a)The petitioner, as the vendor, was paid the amount of only P100,000.00,[26] a price too inadequate in comparison with the sum
of P1,600,000.00 demanded in Exhibit E;[27]

(b) The petitioner retained possession of the property despite the supposed sale; and
(c) The deed of sale wasexecuted as a result or by reason of the loan the respondents extended to the petitioner,because they still allowed the
petitioner to redeem the property by paying her obligation under the loan. [28]

Submissions of the petitioner further supported the findings of the RTCon the equitable mortgage. Firstly, there was the earlier dated instrument
(deed of pactode retro)involving the same property, albeit the consideration was only P480,000.00, executed between the petitioner as vendor a
retro and the respondent Renato Zamora as vendeea retro.[29] Secondly, there were two receipts for the payments the petitioner had made to the
respondentstotaling P300,000.00.[30] And, thirdly, the former secretary of respondent Melba Zamora executed an affidavit acknowledging that the
petitioner had already paid a total of P500,000.00 to the respondents.[31] All these confirmed the petitioners claim that she remained the owner of
the property and was still entitled to its possession.

Article 1602 of the Civil Codeenumerates the instances when a contract, regardless of its nomenclature, may be presumed to be an equitable
mortgage, namely:

(a) When the price of a sale with right to repurchase is unusually inadequate;

(b) When the vendor remains in possession as lessee or otherwise;

(c) When upon or after the expiration of the right to repurchase another instrument extending the period of redemption or granting a new period is
executed;

(d)When the purchaser retains for himself a part of the purchase price;

(e)When the vendor binds himself to pay the taxes on the thing sold; and,

(f) In any other case where it may be fairly inferred that the real intention of the parties is that the transaction shall secure the payment of a debt or
the performance of any other obligation.

The circumstances earlier mentioned were, indeed, badges of an equitable mortgage within the context ofArticle 1602 of the Civil Code.

Nonetheless, the findingsfavorable to the petitioners ownership are neitherfinally determinative of the title in the property, nor conclusive in any
other proceeding where ownership of the property involved herein may be more fittingly adjudicated.Verily, where the cause of action in an
ejectment suit is based on ownership of the property, the defense that the defendantretainedtitle or ownership is a proper subject for determination
by the MTC but only for the purpose of adjudicating the rightful possessor of the property.[32]This is based on Rule 70 of the Rules of Court, viz:

Section 16. Resolving defense of ownership. When the defendant raises the defense of ownership in his pleadings and the question of possession
cannot be resolved without deciding the issue of ownership, the issue of ownership shall be resolved only to determine the issue of
possession.(4a)

D.

MTC committed procedural lapses

that must be noted and corrected

The Court seizes theopportunity to note and to correctseveralnoticeable procedural lapses on the part of the MTCC, to avoid the impression that
the Court condones or tolerates the lapses.

The first lapse wasthe MTCCs granting of the respondents motion to declare the petitioner in default following her failure to file an answer. The
proper procedurewas not for the plaintiffs to move for the declaration in default of the defendant who failed to file the answer. Such a motion to
declare in default has been expressly prohibited under Section 13, Rule 70 of

theRules of Court.[33]Instead, the trial court, either motuproprio or on motion of the plaintiff, should render judgment as the facts alleged in the
complaint might warrant.[34]In other words, the defendants failure to file an answer under Rule 70 of the Rules of Courtmight result to a judgment
by default, not to a declaration of default.

The second lapse wasthe MTCCsreception of the oral testimony of respondent Melba Zamora. Rule 70 of the Rules of Courthas envisioned the
submission only of affidavits of the witnesses (not oral testimony) and other proofs on the factual issues defined in the order issued within five
days from the termination of the preliminary conference;[35]and has permittedthe trial court, should it find the need to clarify material facts, to
thereafterissue an order during the 30-day period from submission of the affidavits and other proofs specifying the matters to be clarified, and
requiring the parties to submit affidavits or other evidence upon such matters within ten days from receipt of the order. [36]

The procedural lapses committed in this case are beyond comprehension.The MTCC judge could not have been unfamiliar with the prevailing
procedure, considering that therevised version of Rule 70, although taking effect only on July 1, 1997,was derived from the 1991 Revised Rule on
Summary Procedure, in effect since November 15, 1991. It was not likely, therefore, that the MTCC judge committed the lapses out of his
unfamiliarity with the relevant rule. We discern thatthe cause of the lapses was his lack of enthusiasm in implementingcorrect procedures in this
case. If that was the true reason, the Court can only be alarmed and concerned, for a judge should not lack enthusiasm in applying the rules of
procedure lest the worthy objectives of their promulgation be unwarrantedly sacrificed and brushed aside. The MTCC judge should not forget
that the rules of procedure were always meant to be implemented deliberately, not casually, and their non-compliance should only be excused in
the higher interest of the administration of justice.

It is timely, therefore, to remind all MTC judges to display full and enthusiastic compliance with all the rules of procedure, especially those
intended for expediting proceedings.

WHEREFORE,we grant the petition for review on certiorari; set aside the decision promulgated on July 3, 2002 by the Court of Appeals; and
dismiss the complaint for unlawful detainer for lack of a cause of action.

The respondents shall pay the costs of suit.

SO ORDERED.
 11. Capiral VS. Robles

Republic of the Philippines

Supreme Court

Manila

THIRD DIVISION

SEVERINO S. CAPIRAL, G.R. No. 173628

Petitioner,

Present:

VELASCO, JR., J., Chairperson,

PERALTA,

- versus - ABAD,

PEREZ,* and

MENDOZA, JJ.

SIMEONA CAPIRAL ROBLES and VICENTE CAPIRAL, Promulgated:

Respondents.

November 16, 2011

x ----------------------------------------------------------------------------------------x

DECISION

PERALTA, J.:

Assailed in the present petition for review on certiorari under Rule 45 of the Rules of Court are the Decision1 dated May 29, 2006 and
Resolution2 dated July 20, 2006 of the Court of Appeals (CA) in CA-G.R. SP No. 83223. The CA Decision dismissed petitioner's petition
for certiorari and affirmed the August 15, 2003 and January 12, 2004 Orders of the Regional Trial Court (RTC) of Malabon City, Branch 74, in
Civil Case No. 3430-MN, while the CA Resolution denied petitioner's Motion for Reconsideration.

The following are the factual and procedural antecedents of the instant case:

The instant petition arose from a Complaint for Partition with Damages filed with the RTC of Malabon City by herein respondents against herein
petitioner and five other persons, all surnamed Capiral, whom respondents claim to be their co-heirs.3

On September 5, 2002, herein petitioner filed a Motion to Dismiss4 on grounds that respondents' Complaint lacked cause of action or that the
same is barred by prescription and laches.
In their Opposition to herein petitioner's Motion to Dismiss, private respondents questioned the factual allegations of petitioner and contended
that the property subject of the Complaint for Partition is covered by a Transfer Certificate of Title having been duly registered under the Torrens
System and as such may not be acquired by prescription. Private respondents also argued that neither is the principle of laches applicable; instead,
the doctrine of imprescriptibility of an action for partition should apply.

On February 21, 2003, the RTC issued an Order holding as follows:

In the subject motion, defendant-movant [herein petitioner] claimed that prior to the death of their [predecessor-in-interest] Apolonio Capiral, he
and his aunt, Arsenia Capiral, who died on 26 November 2002, has been in actual possession of the subject property and has been the one paying
for its realty tax; that after the death of Apolonio Capiral, defendant movant repudiated the co-ownership by permanently residing [in] the said
property... that for more than ten (10) years now, defendant [-movant] has been openly, continuously and exclusively possessing the same in the
concept of an owner thus, the subject property cannot be the subject of the instant action for partition because the same has been acquired by
defendant[-movant] . thru prescription; and that further, by plaintiffs' inaction for more than ten years in asserting their rights as co-owners, the
principle of estoppel bars them from filing the instant complaint.

The Court finds it necessary to set first the subject motion for further hearing for the reception of evidence of the parties pursuant to Sec. 2, Rule
16 of the 1997 Rules of Civil Procedure, x x x

xxxx

The allegations of defendant-movant that he has already repudiated the co-ownership and that plaintiffs are guilty of laches involve factual issues
warranting a hearing on the matters in order for the parties herein, as mandated by the aforequoted rules, to submit their respective evidence on
question of facts involved and for the Court to appreciate the same.

WHEREFORE, premised considered, let the instant motion be set for hearing on April 10, 2003 at 8:30 o'clock in the morning. 5

On August 12, 2003, petitioner filed a Motion to Resolve6 praying that an Order be issued by the RTC resolving petitioner's Motion to Dismiss.

On August 15, 2003, the RTC issued its first assailed Order7 denying petitioner's Motion to Resolve.

Petitioner filed a Motion for Reconsideration contending that there is no longer any need to set the case for hearing for the reception of evidence
to prove the allegations in the Motion to Dismiss considering that, in their Opposition, herein respondents failed to deny nor rebut the material
factual allegations in the said Motion.8

However, the RTC, in its second assailed Order dated January 12, 2004, denied petitioner's Motion for Reconsideration. 9

Subsequently, petitioner filed a special civil action for certiorari with the CA, arguing that the RTC is guilty of grave abuse of discretion in
issuing the abovementioned Orders.

On May 29, 2006, the CA promulgated its assailed Decision dismissing the special civil action for certiorari and affirming the disputed Orders of
the RTC.

Petitioner filed a Motion for Reconsideration, but the CA denied it via its Resolution dated July 20, 2006.
Hence, the present petition with a sole Assignment of Error, to wit:

THE COURT OF APPEALS COMMITTED A CLEAR AND REVERSIBLE ERROR WHEN IT HELD THAT THE TRIAL-TYPE HEARING
REQUIRED BY THE TRIAL COURT FOR THE RESOLUTION OF THE MOTION TO DISMISS IS IN ACCORD WITH SECTION 2, RULE
16 OF [THE] RULES OF COURT.10

Petitioner contends that there is nothing in Section 2, Rule 16 of the Rules of Court which requires a trial-type hearing for the resolution of a
motion to dismiss. Petitioner argues that the RTC, in requiring a trial-type hearing deferred the resolution of the subject Motion to Dismiss and, in
so doing, violated Section 3, Rule 16 of the Rules of Court.

The Court does not agree.

Contrary to petitioners contention, insofar as hearings on a motion to dismiss are concerned, Section 2, Rule 16 of the Rules of Court sanctions
trial-type proceedings in the sense that the parties are allowed to present evidence and argue their respective positions before the court, thus:

Sec. 2. Hearing of Motion. - At the hearing of the motion, the parties shall submit their arguments on the questions of law and their evidence on
the questions of fact involved except those not available at that time. Should the case go to trial, the evidence presented during the hearing shall
automatically be part of the evidence of the party presenting the same.

In Rimbunan Hijau Group of Companies v. Oriental Wood Processing Corporation,11 this Court had occasion to rule that the issues raised in a
motion to dismiss have to be determined in accordance with the evidence and facts presented, not on the basis of unsubstantiated allegations and
that the courts could not afford to dismiss a litigant's complaint on the basis of half-baked conclusions with no evidence to show for it. In
emphasizing the need for a formal hearing, this Court held that the demand for a clear factual finding to justify the grant or denial of a motion to
dismiss cannot be dispensed with.12 To this end, Section 2, Rule 16 of the Rules of Court allows not only a hearing on the motion to dismiss, but
also for the parties to submit their evidence on the questions of fact involved, which may be litigated extensively at the hearing or hearings on the
motion.13 During the said hearings, the parties are allowed to submit their respective evidence, and even rebut the opposing parties'
evidence.14 The hearings should provide the parties the forum for full presentation of their sides. 15 Moreover, from the trial court's perspective, the
extent of such hearings would depend on its satisfaction that the ground in filing the motion to dismiss has been established or disestablished.16

In the present case, petitioner's ground in filing his Motion to Dismiss is that he has been openly, continuously and exclusively possessing the
subject property in the concept of an owner for more than ten years and that he has explicitly repudiated his co-ownership of the subject property
with his co-heirs. Evidence is quite obviously needed in this situation, for it is not to be expected that said ground, or any facts from which its
existence may be inferred, will be found in the averments of the complaint.17 When such a ground is asserted in a motion to dismiss, the general
rule governing evidence on motions applies.18 The rule is embodied in Section 7, Rule 133 of the Rules of Court which provides that [w]hen a
motion is based on facts not appearing of record the court may hear the matter on affidavits or depositions presented by the respective parties, but
the court may direct that the matter be heard wholly or partly on oral testimony or depositions.

However, in the present case, there was no affidavit or any other documentary evidence attached to petitioner's Motion to Dismiss as proof of the
averments contained therein. Thus, the RTC is justified in directing the conduct of further hearings to ascertain petitioner's factual allegations in
its motion.

Indeed, unlike a motion to dismiss based on the failure of the complaint to state a cause of action, which may be resolved solely on the basis of
the allegations of the complaint, the Motion to Dismiss filed by petitioner raised an affirmative defense that he has long been in possession of the
disputed property as an owner and that he has repudiated his co-ownership of the subject property with private respondents and the other co-heirs.
The motion thus posed a question of fact that should be resolved after due hearing.19
Neither may the trial court's act of setting the case for hearing in order to receive evidence be considered as a move to defer the resolution of
petitioner's Motion to Dismiss. As discussed above, Section 2, Rule 16 is explicit in allowing the conduct of hearings and the reception of
evidence on the questions of fact involved in the motion to dismiss.

Contrary to petitioner's asseveration, what is prohibited by the second paragraph of Section 3, Rule 16 of the same Rules is the deferment until
trial of the resolution of the motion to dismiss itself.20 Under the circumstances obtaining in the instant case, the assailed Orders of the RTC may
not be construed as tantamount to deferring action on the motion to dismiss until trial is conducted.

In sum, the Court finds no error on the part of the CA in holding that the RTC did not commit grave abuse of discretion in issuing its assailed
Orders.

WHEREFORE, the petition is DENIED. The May 29, 2006 Decision and the July 20, 2006 Resolution of the Court of Appeals in CA-G.R. SP
No. 83223 are AFFIRMED. Let the records of this case be remanded to the Regional Trial Court of Malabon City, Branch 74, for further
proceedings with dispatch.

SO ORDERED.
 12. Topacio VS. Banco Filipino Savings Bank

Republic of the Philippines

Supreme Court

Manila

THIRD DIVISION

SPOUSES ERNESTO and VICENTA TOPACIO, as G.R. No. 157644

represented by their attorney-in-fact MARILOU TOPACIO-
NARCISO,

Petitioners, Present:

CARPIO MORALES, J., Chairperson,

- versus - BRION,

BERSAMIN,

VILLARAMA, JR., and

BANCO FILIPINO SAVINGS and MORTGAGE BANK, SERENO, JJ.

Respondent.
Promulgated:

November 17, 2010

x---------------------------------------------------------------------------------------- x

DECISION

BRION, J.:

Before the Court is a petition for review on certiorari,[1] filed by petitioner spouses Ernesto and Vicenta Topacio (petitioners), assailing the
August 26, 2002 Decision[2]of the Court of Appeals (CA) in CA-G.R. SP No. 32389, as well as its March 17, 2003 Resolution [3] denying the
petitioners motion for reconsideration. The CA Decision and Resolution affirmed in toto the October 1, 1993 Order of the Regional Trial Court of
Valenzuela City, Branch 75, which issued an alias writ of possession in favor of the respondent Banco Filipino Savings and Mortgage Bank
(respondent).

THE BACKGROUND FACTS

The backgrounds facts, as culled from the records, are summarized below.
The petitioners obtained a loan amounting to P400,000.00 from the respondent. To secure the loan, the petitioners executed on May 8, 1980, a
real estate mortgage over Lot 1224-B-1 LRC Psd-15436, covered by TCT No. T-191117 (now 13554) of the Registry of Deeds of Bulacan, in
favor of the respondent. The petitioners failed to pay the loan, prompting the respondent to file a Petition for Extrajudicial Foreclosure of
Mortgage, pursuant to Act No. 3135. To satisfy the obligation, the Provincial Sheriff of Bulacan, on November 8, 1982, sold the mortgaged
property at public auction, where the respondent emerged as the highest bidder. Accordingly, a Certification of Sale was issued in favor of the
respondent and registered with the Registry of Deeds.[4]

On May 26, 1983, the respondent filed a Petition for the Issuance of a Writ of Possession [5] over the mortgaged property before the Regional Trial
Court, Branch 172, Valenzuela City (RTC). In an Order[6] dated December 12, 1983, the RTC granted the petition, conditioned on the posting of
a P100,000.00 bond. Upon posting of the required bond, the RTC issued, on February 16, 1984, a writ of possession, commanding the sheriff to
place the respondent in possession of the property.

The writ of possession was not implemented[7] because, on February 27, 1984, the petitioners, filed with the RTC, a petition to set aside the
auction sale and the writ of possession (with application for a temporary restraining order and a writ of preliminary injunction). [8] In an Order
dated February 28, 1984, the RTC issued a temporary restraining order enjoining the respondent and the Deputy Sheriff from implementing the
writ of possession it previously issued. [9] After hearing, the RTC, issued on March 13, 1984, a writ of preliminary injunction ordering the
respondent and the Provincial Sheriff to desist from implementing the writ of possession and to refrain from interfering with and disrupting the
possession of the petitioners over the subject parcel of land.[10]

Sometime in April 1984, the respondent filed with the RTC its Motion to Admit Answer with Opposition to the Petition to Set Aside Auction
Sale and Writ of Possession with Motion to Dissolve or Lift Preliminary Injunction (Answer) which was granted on April 26, 1984.[11] On May
21, 1984, the petitioners filed their Reply thereto, praying that the writ of preliminary injunction previously issued be maintained. [12]

More than two years after the filing of the Answer and the Reply, and after a series of postponements at the instance of both parties, then
Presiding Judge Teresita D. Capulong issued an Order dated December 16, 1986, dismissing the respondents petition for the issuance of a writ of
possession on the ground of failure to prosecute.[13] The Order reads in full:

When this case was called for hearing, counsel for the oppositors [now petitioners], Atty. Constancio R. Gallamos, was present. Atty. Francisco
Rivera [counsel for the respondent] was absent despite notice. Upon petition of the counsel for the oppositors, this case is hereby ordered
dismissed for failure to prosecute.

SO ORDERED.

No copy of the above Order was served on the respondent[14] whose operations the Monetary Board (Central Bank of the Philippines) shut down
on January 25, 1985, for reasons not relevant to the present case.[15]

Nearly six (6) years later (after the Court ordered the reorganization and resumption of the respondents operations in G.R. No. 70054)[16] or
on August 19, 1992, the respondent filed a Motion to Clarify the Order of December 16, 1986. In the same motion, the respondent likewise
moved for the issuance of an alias writ of possession. [17]

In an Order[18] dated September 18, 1992, the RTC made a clarification that the Order of Dismissal of December 16, 1986 refers to the dismissal
of the main case for issuance of a writ of possession. In that same Order, the RTC denied the respondents motion for the issuance of an alias writ
of possession.

On May 18, 1993, the respondent moved for the reconsideration [19] of the September 18, 1992 Order. In an Order[20] dated June 2, 1993, the RTC,
this time presided by Judge Emilio L. Leachon, Jr., reconsidered and set aside the Order of December 16, 1986 and granted the respondents
prayer for the issuance of an alias writ of possession. The petitioners moved for a reconsideration of the June 2, 1993 Order and prayed that the
implementation of the alias writ of possession be held in abeyance.
The RTC Ruling

On October 1, 1993, the RTC, now presided by Judge Jaime F.

Bautista, issued the assailed Order[21] which denied the petitioners motion for reconsideration and reiterated its order for the issuance of
an alias writ of possession in favor of the respondent. The assailed RTC Order is summarized below.

First, the RTC ruled that the Order of Dismissal was granted on a technicality and that [t]he ground of failure to prosecute is manifestly
unfounded.[22] The RTC held that the power of the trial court to dismiss an action on the ground of non prosequitur is not unbounded. The real
test x x x is whether under the facts and circumstances, the plaintiff is chargeable with want of due diligence in [failing] to proceed with
reasonable promptitude.[23] In the present case, the RTC noted that the records show that the case dragged on for years because of several
postponements at the request of both parties, particularly petitioner Ernesto Topacio who went abroad for a long time during the pendency of the
case.[24]

Second, the RTC held that the December 16, 1986 Dismissal Order cannot be considered a dismissal on the merits as it was founded not on a
substantial ground but on a technical one; it does not amount to a declaration of the law [on] the respective rights and duties of the parties, based
upon the ultimate x x x facts disclosed by the pleadings and evidence, and upon which the right of recovery depends, irrespective of formal,
technical or dilatory objectives or contentions.[25]

Third, the RTC ruled that the revival by a motion for reconsideration (filed on May 18, 1993) of the February 16, 1984 Order, granting the writ of
possession, was seasonably filed by the respondent, pursuant to the period allowed under Section 6, Rule 39 of the Rules of
Court. Citing National Power Corporation v. Court of Appeals,[26]the RTC held that [i]n computing the time [limit] for suing out an execution, x
x x the general rule is that there should not be included the time when execution is stayed, either by agreement of the parties for a definite time,
by injunction, by the taking of an appeal or writ of error so as to operate as a supersedeas, by the death of a party, or otherwise. The RTC noted
that the running of the five-year period under Section 6 of the Rules of Court had been interrupted by the erroneous issuance of a writ of
preliminary injunction; the February 16, 1984 Order never attained finality and was overtaken by the issuance of the Order dated June 2, 1993,
granting the issuance of an alias writ of execution.[27]

Finally, the RTC held that the respondent, as the winning bidder, has an absolute right to a writ of possession,[28] considering that: (1) a writ of
possession had been issued on February 16, 1984 and the corresponding bond had already been posted, although the writ was not enforced
because of the erroneous injunction issued by Judge Capulong; and (2) there was no redemption by the petitioners. [29]

On October 20, 1993, the petitioners filed their Petition for Certiorari and Prohibition under Rule 65 of the 1997 Rules of Court with prayer for
the issuance of a preliminary injunction (petition), docketed as CA-G.R. SP No. 32389.[30] Before the CA, the petitioners argued that the RTC
acted without jurisdiction or with grave abuse of discretion when it: (1) reinstated the respondents case more than seven (7) years after the
December 16, 1986 Dismissal Order became final and executory, and (2) issued an alias writ of execution upon a mere motion for
reconsideration and not by an independent action pursuant to Section 6, Rule 39 of the Rules of Court.

The CA Ruling

On August 26, 2002, the CA denied the petitioners petition and affirmed in toto the June 2, 1993 and October 1, 1993 Orders of the RTC. The CA
found that the December 16, 1986 Order of the RTC does not amount to a dismissal on the merits as it was based on purely technical grounds. It
noted that the records show that the respondent was not furnished a copy of the Dismissal Order; hence, the case cannot be deemed to be final
with respect to the respondent. The CA also agreed with the RTCs conclusion that the delay in the resolution of the case cannot be solely
attributed to the respondent and did not warrant its outright dismissal. [31]
The CA held that an independent action for the revival of the writ of possession need not be filed in order to enforce the writ of possession issued
on December 12, 1983since Section 6, Rule 39 of the Rules of Court applies only to civil actions and not to special proceedings,[32] citing Heirs of
Cristobal Marcos v. de Banuvar.[33]

The Petition

In the present petition,[34] the petitioners contend that the CA erred in affirming the October 1, 1993 Order of the RTC considering that:

1) the December 16, 1986 Dismissal Order constitutes an adjudication on the merits which has already attained finality, and

2) a writ of possession may not be enforced upon mere motion of the applicant after the lapse of more than five (5) years from the time of its
issuance.

On the first assignment of error, the petitioners submit that the December 16, 1986 Dismissal Order for failure to prosecute constitutes
adjudication upon the merits, considering that the RTC did not declare otherwise, pursuant to Section 3, Rule 17 of the Rules of Court. The
petitioners further contend that the Dismissal Order has become final and executory since the respondent belatedly filed the Motion to Clarify the
Order of December 16, 1986 on August 19, 1992 or almost six years later. On these premises, the petitioners argue that res judicata has set in and
consequently, the RTC had no jurisdiction to grant the motion for reconsideration and to issue an alias writ of possession in favor of the
respondent.[35]

On the second assignment of error, the petitioners contend that pursuant to Section 6, Rule 39 of the Rules of Court, the writ of possession issued
on February 16, 1984 may no longer be enforced by a mere motion but by a separate action, considering that more than five years had elapsed
from its issuance. The petitioners also argue that Section 6, Rule 39 of the Rules of Court applies to the present case since a petition for the
issuance of a writ of possession is neither a special proceeding nor a land registration case. [36]

In their Memorandum, the petitioners additionally submit that they do not dispute that the CA made a finding that the December 16, 1986
Dismissal Order was not properly served. They, however, point out that the CA made no such finding with respect to the September 18,
1992 Order of the RTC. The petitioners contend that the Motion for Reconsideration, filed on May 18, 1993 or eight months later from
the September 18, 1992 Order by the respondent, was filed out of time. Thus, they conclude that any subsequent ruling of the RTC, including
the June 2, 1993 and October 1, 1993 Orders, is barred by res judicata.[37]

OUR RULING

We deny the petition for lack of merit.

A. Preliminary Considerations

Our review of the records, particularly the CA decision, indicates that the CA did not determine the presence or absence of grave abuse of
discretion in the RTC decision before it. Given that the petition before the CA was a petition for certiorari and prohibition under Rule 65 of the
Rules of Court, it appears that the CA instead incorrectly reviewed the case on the basis of whether the RTC decision on the merits was correct.

To put the case in its proper perspective, the task before us is to examine the CA decision from the prism of whether it correctly determined the
presence or absence of grave abuse of discretion in the RTC decision before it. Stated otherwise, did the CA correctly determine whether the RTC
committed grave abuse of discretion amounting to lack or excess of jurisdiction in ruling on the case?

As discussed below, our review of the records and the CA decision shows that the RTC did not commit grave abuse of discretion in issuing
an alias writ of possession in favor of the respondent.
B. Applicability of Res Judicata

Under the rule of res judicata, a final judgment or decree on the merits by a court of competent jurisdiction is conclusive of the rights of the
parties or their privies, in all later suits and on all points and matters determined in the previous suit. The term literally means a matter adjudged,
judicially acted upon, or settled by judgment.[38] The principle bars a subsequent suit involving the same parties, subject matter, and cause of
action. The rationale for the rule is that public policy requires that controversies must be settled with finality at a given point in time.[39]

The doctrine of res judicata embraces two (2) concepts: the first is "bar by prior judgment" under paragraph (b) of Rule 39, Section 47 of the
Rules of Court, and the second is "conclusiveness of judgment" under paragraph (c) thereof. Res judicata applies in the concept of "bar by prior
judgment" if the following requisites concur: (1) the former judgment or order must be final; (2) the judgment or order must be on the merits; (3)
the decision must have been rendered by a court having jurisdiction over the subject matter and the parties; and (4) there must be, between the
first and the second action, identity of parties, of subject matter and of causes of action.[40]

The petitioners claim that res judicata under the first concept applies in the present case because all of the elements thereof are present. In
response, the respondent argues that res judicata did not set in as the first element is lacking.

We agree with the respondent.

The December 16, 1986 Dismissal Order never attained finality as it was not properly served

The following provisions under Rule 13 of the Rules of Court define the proper modes of service of judgments: [41]

SEC. 2. Filing and service, defined. x x x

Service is the act of providing a party with a copy of the pleading or paper concerned. x x x

SEC. 5. Modes of service. Service of pleadings, motions, notices, orders, judgments and other papers shall be made either personally or by mail.

SEC. 6. Personal service. Service of the papers may be made by delivering personally a copy to the party or his counsel, or by leaving it in his
office with his clerk or with a person having charge thereof. If no person is found in his office, or his office is not known, or he has no office, then
by leaving the copy, between the hours of eight in the morning and six in the evening, at the partys or counsels residence, if known, with a person
of sufficient age and discretion then residing therein.

SEC. 7. Service by mail. Service by registered mail shall be made by depositing the copy in the office, in a sealed envelope, plainly addressed to
the party or his counsel at his office, if known, otherwise at his residence, if known, with postage fully pre-paid, and with instructions to the
postmaster to return the mail to the sender after ten (10) days if undelivered. If no registry service is available in the locality of either the sender
or the addressee, service may be done by ordinary mail.

SEC. 8. Substituted service. If service of pleadings, motions, notices, resolutions, orders and other papers cannot be made under the two
preceding sections, the office and place of residence of the party or his counsel being unknown, service may be made by delivering the copy to
the clerk of court, with proof of failure of both personal service and service by mail. The service is complete at the time of such delivery.

SEC. 9. Service of judgments, final orders or resolutions. Judgments, final orders or resolutions shall be served either personally or by registered
mail. When a party summoned by publication has failed to appear in the action, judgments, final orders or resolutions against him shall be served
upon him also by publication at the expense of the prevailing party.
As a rule, judgments are sufficiently served when they are delivered personally, or through registered mail to the counsel of record, or by leaving
them in his office with his clerk or with a person having charge thereof. After service, a judgment or order which is not appealed nor made
subject of a motion for reconsideration within the prescribed 15-day period attains finality.[42]

In Philemploy Services and Resources, Inc. v. Rodriguez,[43] the Court ruled that the Resolution of the National Labor Relations Commission,
denying the respondents motion for reconsideration, cannot be deemed to have become final and executory as there is no conclusive proof of
service of the said resolution. In the words of the Court, there was no proof of actual receipt of the notice of the registered mail by the
respondents counsel.[44] Based on these findings, the Court concluded that the CA properly acquired jurisdiction over the respondents petition
for certiorari filed before it; in the absence of a reckoning date of the period provided by law for the filing of the petition, the Court could not
assume that it was improperly or belatedly filed.

Similarly, in Tomawis v. Tabao-Cudang,[45] the Court held that the decision of the Regional Trial Court did not become final and executory
where, from the records, the respondent had not received a copy of the resolution denying her motion for reconsideration.[46] The Court also noted
that there was no sufficient proof that the respondent actually received a copy of the said Order or that she indeed received a first notice. Thus, the
Court concluded that there could be no valid basis for the issuance of the writ of execution as the decision never attained finality.

In the present case, we note that the December 16, 1986 Dismissal Order cannot be deemed to have become final and executory in view of the
absence of a valid service, whether personally or via registered mail, on the respondents counsel. We note in this regard that the petitioners do not
dispute the CA finding that the records failed to show that the private respondent was furnished with a copy of the said order of
dismissal[.][47] Accordingly, the Dismissal Order never attained finality.

The petitioners now claim that the Motion for Reconsideration, filed by the respondent on May 18, 1993 from the September 18, 1992 Order of
the RTC, was filed out of time. The petitioners make this claim to justify their contention that the subsequent rulings of the RTC, including
the June 2, 1993 and October 1, 1993 Orders, are barred by res judicata.

We reject this belated claim as the petitioners raised this only for the first time on appeal, particularly, in their Memorandum. In fact, the
petitioners never raised this issue in the proceedings before the court a quo or in the present petition for review.

As a rule, a party who deliberately adopts a certain theory upon which the case is tried and decided by the lower court will not be permitted
to change the theory on appeal.[48] Points of law, theories, issues and arguments not brought to the attention of the lower court need not be, and
ordinarily will not be, considered by a reviewing court, as these cannot be raised for the first time at such late stage. It would be unfair to the
adverse party who would have no opportunity to present further evidence material to the new theory, which it could have done had it been aware
of it at the time of the hearing before the trial court.[49] Thus, to permit the petitioners in this case to change their theory on appeal would thus be
unfair to the respondent and offend the basic rules of fair play, justice and due process. [50]

C. Applicability of the Rule on Execution

by Motion or by Independent Action

The petitioners finally submit that the writ of possession, issued by the RTC on February 16, 1984, may no longer be enforced by a mere motion,
but by a separate action, considering that more than five years had elapsed from its issuance, pursuant to Section 6, Rule 39 of the Rules of Court,
which states:

Sec. 6. Execution by motion or by independent action. A final and executory judgment or order may be executed on motion within five (5) years
from the date of its entry. After the lapse of such time, and before it is barred by the statute of limitations, a judgment may be enforced by action.
The revived judgment may also be enforced by motion within five (5) years from the date of its entry and thereafter by action before it is barred
by the statute of limitations.

Section 6, Rule 39 of the Rules of Court only applies to civil actions

In rejecting a similar argument, the Court held in Paderes v. Court of Appeals[51] that Section 6, Rule 39 of the Rules of Court finds application
only to civil actions and not to special proceedings. Citing Sta. Ana v. Menla,[52] which extensively discussed the rationale behind the rule, the
Court held:

In a later case [Sta. Ana v. Menla, 111 Phil. 947 (1961)], the Court also ruled that the provision in the Rules of Court to the effect that
judgment may be enforced within five years by motion, and after five years but within ten years by an action (Section 6, Rule 39) refers
to civil actions and is not applicable to special proceedings, such as land registration cases. x x x x

We fail to understand the arguments of the appellant in support of the above assignment, except in so far as it supports his theory that after a
decision in a land registration case has become final, it may not be enforced after the lapse of a period of 10 years, except by another proceeding
to enforce the judgment or decision. Authority for this theory is the provision in the Rules of Court to the effect that judgment may be enforced
within 5 years by motion, and after five years but within 10 years, by an action (Sec. 6, Rule 39). This provision of the Rules refers to civil
actions and is not applicable to special proceedings, such as a land registration case. This is so because a party in a civil action must
immediately enforce a judgment that is secured as against the adverse party, and his failure to act to enforce the same within a
reasonable time as provided in the Rules makes the decision unenforceable against the losing party. In special proceedings the purpose is
to establish a status, condition or fact; in land registration proceedings, the ownership by a person of a parcel of land is sought to be
established. After the ownership has been proved and confirmed by judicial declaration, no further proceeding to enforce said ownership
is necessary, except when the adverse or losing party had been in possession of the land and the winning party desires to oust him
therefrom.

Subsequently, the Court, in Republic v. Nillas,[53] affirmed the dictum in Sta. Ana and clarified that Rule 39 x x x applies only to ordinary civil
actions, not to other or extraordinary proceedings not expressly governed by the Rules of Civil Procedure but by some other specific law or legal
modality, viz:

Rule 39, as invoked by the Republic, applies only to ordinary civil actions, not to other or extraordinary proceedings not expressly governed by
the Rules of Civil Procedure but by some other specific law or legal modality such as land registration cases. Unlike in ordinary civil actions
governed by the Rules of Civil Procedure, the intent of land registration proceedings is to establish ownership by a person of a parcel of land,
consistent with the purpose of such extraordinary proceedings to declare by judicial fiat a status, condition or fact. Hence, upon the finality of a
decision adjudicating such ownership, no further step is required to effectuate the decision and a ministerial duty exists alike on the part of the
land registration court to order the issuance of, and the LRA to issue, the decree of registration.

In the present case, Section 6, Rule 39 of the Rules of Court is not applicable to an ex parte petition for the issuance of the writ of possession as it
is not in the nature of a civil action[54] governed by the Rules of Civil Procedure but a judicial proceeding governed separately by Section 7 of Act
No. 3135 which regulates the methods of effecting an extrajudicial foreclosure of mortgage. The provision states:

Section 7. Possession during redemption period. In any sale made under the provisions of this Act, the purchaser may petition the [Regional Trial
Court] where the property or any part thereof is situated, to give him possession thereof during the redemption period, furnishing bond in an
amount equivalent to the use of the property for a period of twelve months, to indemnify the debtor in case it be shown that the sale was made
without violating the mortgage or without complying with the requirements of this Act. Such petition shall be made under oath and filed in form
of an ex parte motion in the registration or cadastral proceedings if the property is registered, or in special proceedings in the case of property
registered under the Mortgage Law or under section one hundred and ninety-four of the Administrative Code, or of any other real property
encumbered with a mortgage duly registered in the office of any register of deeds in accordance with any existing law, and in each case the clerk
of the court shall, upon the filing of such petition, collect the fees specified in paragraph eleven of section one hundred and fourteen of Act
Numbered Four hundred and ninety-six, as amended by Act Numbered Twenty-eight hundred and sixty-six, and the court shall, upon approval
of the bond, order that a writ of possession issue, addressed to the sheriff of the province in which the property is situated, who shall
execute said order immediately.

The above-cited provision lays down the procedure that commences from the filing of a motion for the issuance of a writ of possession, to the
issuance of the writ of possession by the Court, and finally to the execution of the order by the sheriff of the province in which the property is
located. Based on the text of the law, we have also consistently ruled that the duty of the trial court to grant a writ of possession is ministerial; the
writ issues as a matter of course upon the filing of the proper motion and the approval of the corresponding bond. [55] In fact, the issuance and the
immediate implementation of the writ are declared ministerial and mandatory under the law.

Thus, in Philippine National Bank v. Adil,[56] we emphatically ruled that once the writ of possession has been issued, the trial court has no
alternative but to enforce the writ without delay. The issuance of a writ of possession to a purchaser in an extrajudicial foreclosure is summary
and ministerial in nature as such proceeding is merely an incident in the transfer of title. The trial court does not exercise discretion in the
issuance thereof;[57] it must grant the issuance of the writ upon compliance with the requirements set forth by law, and the provincial sheriff is
likewise mandated to implement the writ immediately.

Clearly, the exacting procedure provided in Act No. 3135, from the moment of the issuance of the writ of possession, leaves no room for the
application of Section 6, Rule 39 of the Rules of Court which we consistently ruled, as early as 1961 in Sta. Ana, to be applicable only to civil
actions. From another perspective, the judgment or the order does not have to be executed by motion or enforced by action within the purview of
Rule 39 of the Rules of Court. [58]

D. Conclusion

In sum, based on these considerations, we find that the RTC committed no grave abuse of discretion in issuing an alias writ of possession in favor
of the respondent.

WHEREFORE, the present petition is DENIED. The August 26, 2002 Decision and the March 17, 2003 Resolution of the Court of Appeals in
CA-G.R. SP No. 32389 are AFFIRMED. Costs against the petitioners.

SO ORDERED.

ARTURO D. BRION

Associate Justice

WE CONCUR:
 13. Domondon VS. Lopez

SECOND DIVISION

[A.M. No. RTJ-02-1696. June 20, 2002]

MELISSA DOMONDON, ALMIRA BASALO, and CLEO VILLAREIZ, complainants, vs. JUDGE PERCIVAL MANDAP
LOPEZ, respondent.

DECISION

MENDOZA, J.:

This is an administrative complaint against Judge Percival Mandap Lopez of the Regional Trial Court, Branch 78, Quezon City for undue delay
and gross ignorance of the law in the resolution of a case filed by complainants.

Complainants were students of the AMA Computer College in Quezon City and members of the editorial board of the official school publication
called Dataline. It appears that on December 7, 1996, complainants published a spoof edition of the Dataline, which they called Amable Tonite.
After conducting an investigation, the student Disciplinary Tribunal of the college recommended the expulsion of complainants from the
school.[1]

On March 14, 1997, complainants and other members of the Dataline editorial board filed a complaint for damages with prayer for the issuance
of a writ of preliminary mandatory injunction against AMA Computer College and Mauricia Herrera, Dean of Student Affairs. The case was filed
in the Regional Trial Court of Quezon City, where it was docketed as Civil Case No. Q-97-30549 and assigned to respondent judge of Branch 78.
Complainants alleged that they had been expelled from the defendant school in a despotic and oppressive manner in violation of their
constitutional rights to due process and to free speech as well as the provisions of R.A. No. 7079, otherwise known as the Campus Journalism Act
of 1991. They sought an award of damages in their favor and the issuance of a temporary preliminary mandatory injunction to enjoin the
defendant school in the meantime to allow them to attend their classes and take their examinations. [2]

On March 25, 1997, AMA Computer College and Mauricia Herrera filed an Opposition, contending that the articles in the spoof edition which
complainants had published were slanderous and derogatory; that R.A. No. 7079 itself enjoins student publications to observe the pertinent laws
and school policies in the selection of articles for publication; that complainants had been given the opportunity to controvert the charges against
them before they were expelled; and that complainants were guilty of using indecent language, committing vulgar and obscene acts, libel, and
unauthorized disbursement of Dataline funds in the amount of P25,000.00.[3]

On April 3, 1997, complainants filed a reply, contending that the issue in the case was not the alleged defamatory nature of the questioned
publication but the legality of their expulsion because they were expelled solely on the basis of their activities as members of the editorial board
of Dataline and claiming that they were deprived of their right to due process.[4]

On June 2, 1997, defendants AMA Computer College and Mauricia Herrera filed a rejoinder, opposing complainants prayer for the issuance of a
writ of preliminary injunction. They contended that, under R.A. No. 7079, editorial policies of the student publication should take into account
the pertinent laws as well as the school policies in the selection of articles for publication; that the Amable Tonite was not a legitimate issue of
the Dataline; and that complainants could have submitted their grievances to the Commission on Higher Education (CHED) but the fact was that
their complaint was dismissed because of their failure to attend a hearing previously set.[5]

On June 7, 1997, complainants pressed their request for the immediate resolution of their application for preliminary mandatory injunction before
the end of the enrollment period. They alleged that the delay in the resolution of the writ was due to the defendants failure to submit their
rejoinder within the period given to them as the rejoinder was actually filed more than a month after the prescribed period had lapsed. [6]

On June 14, 1997, on the basis of the pleadings of the parties, respondent judge issued a resolution dismissing the case itself after finding that the
expulsion of the complainants from the school was for cause and was effected only after an investigation during which they were duly heard.

Complainants moved for a reconsideration on the ground that the dismissal of the complaint could not be made solely on the basis of the parties
pleadings and affidavits and that trial must first be conducted to receive the evidence of the parties before the case was decided. They reiterated
their allegation that a writ of preliminary injunction was necessary because they were expelled from the school solely on the basis of the articles
published in their lampoon edition.[7]

Complainants then sought the disqualification of respondent judge on the following grounds: (a) that he had deliberately delayed the resolution of
the injunctive writ which tended to arouse suspicion as to his ability to decide the case with fairness and integrity; (b) that he dismissed their
complaint without legal or procedural basis and thus deprived them of their day in court; and (c) that they filed an administrative case against him
with this Court.[8]

On September 26, 1997, respondent judge denied complainants motion for reconsideration and motion to inhibit him for lack of
merit. Respondent judge said he had conducted a hearing on the motion for preliminary mandatory injunction after which the parties were given
time to file their pleadings and only after that did he resolve the case. [9]

Complainants blame respondent Judge Lopez for allowing the question of whether an injunction should be issued become moot by failing to
resolve their motion before the start of the enrollment period on the first week of June 1997. In addition, they charge respondent judge with gross
ignorance of the law in dismissing their case considering that: (a) no answer or motion to dismiss had been filed by the defendant school; (b) the
pleadings and evidence, if any, on record referred only to the issuance of a temporary preliminary mandatory injunction and none of the
defendants pleadings which averred additional factual matters was verified; and (c) they were not given an opportunity to present their
evidence.[10]

In his comment, respondent judge denied that he was guilty of undue delay in resolving complainants application for injunction. He claimed that
it took him only eight days to render his resolution after the issue of the injunction was submitted for resolution on June 6, 1997, the date of the
filing of the defendants rejoinder. He denied that he acted with malice in resolving the matter, claiming that he saw no urgency for the writ of
preliminary injunction because (a) complainants expulsion was for cause, the articles written by complainants being indecent and obscene; (b)
complainants had been duly heard before they were expelled; (c) not all of the complainants were graduating students; and (d) the status quo at
that point was that complainants were already expelled from the defendant school and such should not be disturbed in the absence of proof of
their claims. As for his dismissal of the case on the merits, respondent judge justified his decision on the ground that the defendants rejoinder
contained a prayer for the same. He contends that this was tantamount to a motion to dismiss filed on the ground of lack of cause of action on the
part of the complainants.[11]

Complainants filed a Supplement to the Complaint for Dismissal/Separation from Service, dated November 19, 1998, insisting that no hearing
had actually been held on March 31, 1997 as both respondent judge and the defendants counsel failed to appear during the said date and that
respondent judge did not show up despite being contacted by his clerk of court by telephone. Moreover, complainants claim that, although the
resolution dismissing their case was dated September 26, 1997, it was actually received by them only on February 19, 1998, almost five months
after its supposed issuance, raising the suspicion that the resolution had been antedated by respondent judge to make it appear that it was issued
prior to the filing of the present administrative complaint.[12]

Respondent judge filed his comment, making a general denial of the charges against him.[13]

The Office of the Court Administrator (OCA), to which this case was referred, found respondent judge guilty of undue delay and gross ignorance
of the law in his handling of Civil Case No. Q-97-30549 and recommended that he be ordered to pay a fine of P2,000.00 with warning that
repetition of the same or similar offenses shall be dealt with more severely.

We find the recommendation, except as to the penalty, to be on the main well taken.

First. As regards the charge of delay in resolving the injunction issue raised by complainants, respondent judge says that the Rules of Court does
not provide a period within which to resolve a prayer for a preliminary injunction. However, as the OCA well observed:

Judge Lopez cannot invoke the absence of any provision prescribing a period within which to resolve an application for a writ of injunction. He
should have been guided by the exigencies of the situation. He knew that complainants were seeking the writ of preliminary mandatory injunction
precisely because they wanted to be readmitted by the college and for them to be able to enroll in the first trimester of school year 1997-
1998. This is evident from the affidavit of Merit attached to the complaint. (Rollo, pp. 15-16) The least that respondent Judge could have done
was to resolve immediately the application for injunctive relief after the defendants failed to submit their Rejoinder on time so as to allow the
complainants enough time to seek recourse to a higher court. As it is, even if he granted the application, considering that it was done only on June
14, the same would have been useless because complainants could no longer enroll since, according to them, the period to enroll expires on the
second week of June 1997. (Rollo, p. 17)[14]

We agree with this observation and only add that Canon 3, Rule 3.05 of the Code of Judicial Conduct in fact enjoins judges to dispose of the
courts business promptly and decide cases within the required periods. [15] That respondent judge found the application for mandatory injunction to
be without merit is of no moment. What was important is that he should have resolved the matter before the start of the enrollment for the first
semester of the school year 1997-1998 so that complainants could avail themselves of other remedies if they were not satisfied with the ruling.
Complainants repeatedly urged respondent judge to resolve the issue of the injunctive writ with utmost dispatch considering the little time left for
them to enroll for the coming semester. But respondent judge failed to heed their plea.

Respondent judge says that the delay was due to the defendants failure to file their rejoinder on time but he lost no time promulgating his
resolution dismissing the complaint as it was in fact issued only eight days after the filing of the rejoinder. This contention has no merit. If this
excuse of respondent judge were accepted, all it would do for a party favored by a delay would be to mark time before filing his pleading until an
event (e.g., the end of the enrollment period) supervenes to render the issue moot.

As respondent judge admits, the defendants rejoinder was filed only on June 2, 1997, although the last day for submission of the same was on
May 9, 1997.[16] Respondent judge should have considered the defendants to have waived the filing of their rejoinder and resolved the issue of
injunction promptly. Respondent judges procrastination only opens him to suspicion that he was favoring the defendants. [17]

Second. It is undisputed that no trial was ever conducted by respondent judge before issuing his resolution, dated June 14, 1997, dismissing the
complaint in Civil Case No. Q-97-30549 for lack of merit. Respondent judge, however, justifies his action on the ground that the defendants
rejoinder sought the dismissal of the case for lack of merit and the same was in the nature of a motion to dismiss the case for lack of cause of
action.

To be sure, the defendants did not file a motion to dismiss. What they filed was an Opposition, dated March 25, 1997, in which they raised factual
matters and affirmative defenses to answer the allegations in the complaint against them and prayed for the denial of the writ prayed for. The fact
that the defendants filed a responsive pleading seeking affirmative relief and setting up defenses [18] negates the intent on their part to file a motion
to dismiss.
It is apparent that respondent judge failed to distinguish between a motion to dismiss for failure of the complaint to state a cause of action and a
motion to dismiss based on lack of cause of action. The first is governed by Rule 16, 1(g), while the second by Rule 33 of the 1997 Revised Rules
of Civil Procedure.[19] The distinction between these two has been explained thus:

. . . The first [situation where the complaint does not allege a sufficient cause of action] is raised in a motion to dismiss under Rule 16 before a
responsive pleading is filed and can be determined only from the allegations in the initiatory pleading and not from evidentiary or other
matters aliunde. The second [situation where the evidence does not sustain the cause of action alleged] is raised in a demurrer to evidence under
Rule 33 after the plaintiff has rested his case and can be resolved only on the basis of the evidence he has presented in support of his claim. The
first does not concern itself with the truth and falsity of the allegations while the second arises precisely because the judge has determined the
truth and falsity of the allegations and has found the evidence wanting.[20]

Hence, a motion to dismiss based on lack of cause of action is filed by the defendant after the plaintiff has presented his evidence on the ground
that the latter has shown no right to the relief sought.While a motion to dismiss under Rule 16 is based on preliminary objections which can be
ventilated before the beginning of the trial, a motion to dismiss under Rule 33 is in the nature of a demurrer to evidence on the ground of
insufficiency of evidence and is presented only after the plaintiff has rested his case.[21]

As the rejoinder filed by the defendants was not based on the failure of the complaint to state a cause of action but on factual and legal matters
allegedly excusing them from liability, the same could not be considered a motion to dismiss under Rule 16, 1(g).

Actually, what respondent judge did was to render a decision. Thus, in his so-called resolution, he stated:

Pertinent provisions of Republic Act No. 7099 provides that a set of guidelines by which a student publication is operated and managed, taking
into account pertinent laws as well as the school administrations policies. Said guidelines shall determine the frequency of publication,
the manner of selecting articles and features and other similar matters, (section 3(c) thereof); and students who are members of the editorial board
shall not be suspended or expelled solely on the basis of articles he or she has written, or on the basis of the performance of his or her duties in
the student publication, (section 7 thereof) (underscoring supplied).

The plaintiffs, who are all members of the editorial board, were not expelled solely on the basis of the articles they wrote in the alleged spoof
publication of Dataline. They violated the Manual of the school with regard to the manner of selecting articles and features they are supposed to
write or feature therein. . . . What they wrote is not in consonance with the principle of the State to promote campus journalism. . . but degrading
and insulting to the tenets of professional journalism in the level of campus journalism.

Defendant school, through its Dean of Student Affairs, conducted an investigation and subsequently a hearing on December 9 and 10,
1996. During these hearings, plaintiffs admitted that they have knowledge of and consented to the publication of the tabloid or the spoof edition
of the Dataline and their purpose for publishing such spoof edition is merely to entertain the studentry of AMACC. This was likewise not
disputed nor denied by the plaintiffs in their verified Reply. On December 17, 1996, plaintiffs, through their Editor-In-Chief Ian Dexter R.
Marquez, filed a complaint before the Commission of Higher [Education] against the administration of AMA Computer College for the
malicious, arbitrary dismissal or expulsion of plaintiffs herein which was detrimental to students rights and welfare, in violation of Republic Act
No. 7079, (Annex 2, Rejoinder). However, said complaint was dismissed for failure on the part of the plaintiffs themselves to comply with the
Order of the Commission dated February 19, 1997 for a formal hearing. Hence, this instant case.

....

. . . . Also, the Manual of Regulation for Private Schools provides that the school or university can impose penalty for cause after due
investigation having been conducted. The exclusion by the AMACC of plaintiffs from the roll of students to be admitted is warranted and in
accordance with the law and in consonance with its regulatory and supervisory power so that the spirit of the law is observed. [22]

Respondent judge could not do this since there were issues of facts which had to be resolved. Respondent could dismiss Civil Case No. Q-97-
30549 for lack of cause of action only after a trial on the merits. The manner in which the hearing before the disciplinary tribunal was held,
whether complainants were expelled on the sole basis of the articles written in Amable Tonite, and whether or not Mauricia Herrera, who was one
of the complainants in the disciplinary tribunal, was indeed a member thereof are factual issues which require the presentation of evidence before
respondent judge could determine the veracity of the parties claims. As admitted in his comment, dated October 23, 1997, respondent judge
simply accepted as facts the affirmative defenses raised by the defendants, namely: (1) that complainants had given cause for their expulsion with
the publication of the spoof edition of the Dataline; (2) that the articles in the said spoof edition, as selectively reproduced by the defendants in
their Opposition, contained obscene and indecent language; and (3) that complainants were given due process before their expulsion. [23]

Without evidence as to their truthfulness or veracity, the allegations in the opposition filed by the defendants remained mere allegations and did
not rise to the dignity of proof.[24] There is thus no factual support for respondent judges resolution. Indeed, all that was submitted to respondent
judge for resolution was merely the issue of whether or not to grant a preliminary mandatory injunction to compel the defendant school to allow
complainants to enroll for the school year 1997-1998.

Only ignorance of basic procedure can account for the bizarre proceedings before respondent judge. When the law is elementary, not to be aware
of it constitutes gross ignorance thereof. Judges are expected to have more than just a modicum of acquaintance with the statutes and procedural
rules.[25] Truly, respondent judge failed to live up to the demands of his position as a member of the bench.
Third. Complainants also claim that respondent judges resolution, dated September 26, 1997, denying their motion for reconsideration and
motion to inhibit him was received by them only on February 19, 1998, or almost five months after its supposed issuance.[26] Respondent judge
does not deny this allegation by complainants in his comment.[27]

This is not the first time a charge of this nature has been made against respondent judge. In A.M. No. RTJ-92-840, entitled Atty. Arturo V.
Miranda v. Judge Percival Lopez, Regional Trial Court, Branch 78, Quezon City, respondent judge was reprimanded by this Court for undue
delay in the service of his decision in a civil case upon the parties. Respondent judge was thus not above covering up his shortcomings by making
it appear that he timely resolved a matter before him. Considering that counsel for complainants maintains his office only in Makati City[28] while
respondent judge presides over a court located in Quezon City, it is hard to believe that the supposed September 27, 1997 resolution took five
months before it could be served on complainants and their counsel. In any event, it is incumbent upon a judge to manage his court in such
manner as to promote prompt and convenient disposition of its business.[29] Hence, the responsibility for the delay in the service of the resolution,
dated September 26, 1997, on the complainants in this case lies only with respondent judge.

We now consider the penalty to be imposed on respondent judge. In a recent case[30] decided by this Court, a judge was fined in the amount
of P1,000.00 for having incurred a delay of four months in resolving the issue of injunctive writ. On the other hand, a fine of P2,000.00 was
imposed by this Court in previous cases[31] where judges were found guilty of gross ignorance of the law. In this case, where we find respondent
judge guilty of undue delay in the resolution of a motion, gross ignorance of the law, and failure to heed a prior warning from this Court, a fine
of P5,000.00 with warning of a more drastic sanction should he repeat the same offenses is appropriate.

WHEREFORE, this Court finds respondent Judge Percival Mandap Lopez, of the Regional Trial Court, Branch 78, Quezon City, GUILTY of
gross ignorance of the law, undue delay in the resolution of the writ of preliminary mandatory injunction in Civil Case No. Q-97-30549, and
failure to heed a prior warning by this Court and hereby imposes on him a FINE of P5,000.00, with warning that repetition of the same or similar
offenses will be dealt with more severely.

SO ORDERED.
 14. Dayo VS. Dayo

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. L-44980 February 6, 1990

VIRGINIA MARAHAY, petitioner,

vs.
HON. MENELEO C. MELICOR, as Presiding Judge, Court of First Instance, Branch VI, Carigara, Leyte; ALIWANAG B.
VALLERAMOS, LIGAYA BRAZIL y PEREZ, FRUTO BRAZIL, MATIBAY BRAZIL Y PALADIN and DALISAY BRAZIL Y
AYASO, respondents.

Buenaventura A. Reposar for petitioner.

Wenceslao Yu for respondents.\

REGALADO, J.:

In this petition for certiorari under Rule 65 of the Rules of Court, petitioner imputes grave abuse of discretion on the part of respondent judge for
issuing an order, dated February 27, 1976, in Civil Case No. C-1222, entitled "Virginia Marahay vs. Aliwanag B. Valleramos et. al.," dismissing
the complaint; an order, issued on June 26, 1976, denying the motion for reconsideration filed by therein plaintiff, and an order, dated September
18, 1976, denying her second motion for reconsideration.

The records show that on June 20, 1974, petitioner filed with respondent court an action for recovery of real property against Aliwanag B.
Valleramos. Later, the complaint was amended to implead and include other defendants, the other private respondents herein, as indispensable
parties. 1

After the issues were joined, the case was set for pre-trial on August 9,1974, but this was deferred to a later date due to the absence of petitioner
and her counsel. 2 On April 4, 1975, the same case was again scheduled for pre-trial but the same did not proceed due to the fact that petitioner
appeared without her counsel while only one of the defendants appeared with counsel. 3 Later, informed of her lawyer's inability to attend the pre-
trial, petitioner secured the services of another lawyer, Atty. Dominador Monjardin, who was present at the next pre-trial conference held on
October 9, 1975.

Trial on the merits commenced on November 13, 1975 with the petitioner taking the witness stand on direct examination. 4 The defense failed to
cross-examine her since the proceedings were cut short for lack of time and the continuation thereof was set for January 19, 1976.

On January 7, 1976, Atty. Monjardin filed a motion for postponement for the reason that he was taking the examination for government
prosecutors in Manila on January 15, 1976, with a prayer that the case be reset either in the first week of January or the second week of February
of said year. 5 The court eventually issued an order resetting the trial to February 18, 1976 with notice to petitioner and her counsel. 6

On said date, petitioner appeared without counsel prompting private respondents, through their counsel, to move for the dismissal of the case for
petitioner's alleged inability to prosecute her case and for apparent lack of interest. 7

The motion to dismiss, which was made orally in open court, was submitted for resolution by the trial court. As earlier stated, the court below in
its order dated February 27, 1976, dismissed the complaint. Two motions for reconsideration were filed by petitioner but the same were denied by
respondent judge, hence, the present special civil action.

The sole issue is whether or not respondent judge committed grave abuse of discretion amounting to lack or excess of jurisdiction in ordering the
dismissal of the case and, consequently, denying petitioner the right to fully prosecute her case.

Before resolving said issue, it would be judicious to first clear the air of any misconception as to the procedural propriety of giving due course to
this petition. An order of dismissal, whether right or wrong, is a final order. If it is erroneous, ordinarily the remedy of the aggrieved party is
appeal, hence the same cannot be assailed by certiorari. 8

Nevertheless, in the broader interests of justice, this Court has given due course to the present petition in consideration of the fact that this is not
the first time we have passed upon a petition for certiorari, although the proper remedy is appeal, 9 where the equities warrant such extraordinary
recourse. This is especially true where, as in the case, petitioner's affidavit of merits shows that she has a good cause of action, that her counsel's
affidavit of merits avers justifiable reasons for his non-appearance at said hearing, and the trial court is faulted with gravely abusing its discretion
to the extent of denying due process to therein plaintiff. Significantly, it was respondent judge himself who advised petitioner to avail of said
remedy in his order dismissing petitioner's second motion for reconsideration, 10 obviously because appeal would not be a speedy and adequate
remedy under the circumstances and considering that dismissals on technicalities are viewed with disapproval.

Turning now to the main issue, petitioner asseverates that respondent-judge acted capriciously in denying her day in court by not postponing the
continuation of the trial to some future time and giving her an opportunity to secure the services of another lawyer. Parenthetically, it is of record
that petitioner is an invalid and moves around in a wheel chair.

The petition has the imprint of merit and the writ will lie.

Section 3, Rule 17 of the Rules of Court provides that —

If plaintiff fails to appear at the time of the trial, or to prosecute his action for an unreasonable length of time, or to comply with these rules or any
order of the court, the action may be dismissed upon motion of the defendant or upon the court's own motion. This dismissal shall have the effect
of an adjudication on the merits, unless otherwise provided by the court.

It is, therefore, the absence of the plaintiff, and not the absence of the lawyer, which may warrant the dismissal of the case on the ground of non-
suit. 11 In the case at bar, only the counsel for plaintiff was absent, plaintiff herself being in attendance in court.

While the aforequoted provision also provides sanctions for failure to prosecute for an unreasonable length of time, despite the presence of the
interested parties, it cannot be said that such neglect or failing obtains in the present case. There is failure to prosecute when the plaintiff, being
present, is not ready or is unwilling to proceed with the scheduled trial. 12 In the instant case, petitioner did not in the least manifest unwillingness
to proceed with the hearing. Upon the call for appearances, petitioner responded that her counsel was in Manila and that he had not yet returned.
Unschooled as she is in the vagaries of procedural law, petitioner indeed could not have responded otherwise nor done any better.

Considering all the attendant circumstances, the least that the trial court could have done was to afford petitioner a reasonable time, especially
considering her handicap, to procure the services of another lawyer and, if necessary, with a stern warning that any further postponement of the
trial shall cause the dismissal of the case.

The counter-argument that petitioner had already moved for postponements in the past should take into account the fact that the circumstances
thereof were not of her making nor intended to be dilatory and that no substantial prejudice has been caused private respondents. Besides,
judgments of non-suit are generally disfavored in the same manner that default judgments are discouraged. Thus, in Padua vs. Ericta, etc., et
al ., 13 we had the occasion to rule that:

Courts should not brook undue delays in the ventilation and determination of causes. It should be their constant effort to ensure that litigations are
prosecuted and resolved with dispatch. Postponements of trials and hearings should not be allowed except on meritorious grounds; and the grant
or refusal thereof rests entirely in the sound discretion of the Judge. It goes without saying, however, that discretion must be reasonably and
wisely exercised, in the light of the attendant circumstances. Some reasonable deferment of the proceedings may be allowed or tolerated to the
end that cases may be adjudged only after full and free presentation of evidence by all the parties, especially where the deferment would cause no
substantial prejudice to any party. The desideratum of a speedy disposition of cases should not, if at all possible, result in the precipitate loss of a
party's right to present evidence and either in the plaintiffs being non-suited or of the defendant's being pronounced liable under an ex-
parte judgment.

Indeed, after the issues had been duly joined, a plaintiff is entitled to present his case. Seldom does departure from orderly procedure bring
satisfactory results. 14

While a court can dismiss a case on the ground of non prosequitur, the real test for the exercise of such power is whether, under the
circumstances, plaintiff is chargeable with want of due diligence in failing to proceed with reasonable promptitude. 15 In the absence of a pattern
or scheme to delay the disposition of the case or a wanton failure to observe the mandatory requirement of the rules on the part of the plaintiff, as
in the case at bar, courts should decide to dispense with rather than wield their authority to dismiss.

Further, when a party, without malice, fault, or inexcusable negligence, is not really prepared for trial, the court would be abusing its discretion if
a reasonable opportunity is denied him for preparing therefor and for obtaining due process of law. 16

Time and again, we have emphasized that the rules should be liberally construed in order to promote their object and assist the parties in
obtaining not only speedy but, more importantly, just and inexpensive determination of every action or proceeding. 17

ACCORDINGLY, the writ of certiorari is hereby granted and the order of the court a quo of February 27, 1976 dismissing petitioner's complaint,
as well as its orders dated June 26, 1976 and September 18, 1976 denying petitioner's first and second motions for reconsideration, respectively,
are hereby ANNULLED and SET ASIDE. Civil Case No. C-1222 is hereby REINSTATED and the Regional Trial Court which replaced Branch
VI of the defunct Court of First Instance and/or in which this action is now pending is DIRECTED to continue with the trial of petitioner's action
and decide the same on the merits in due course.

SO ORDERED.