G.R. No.
208232 March 10, 2014 WHEREFORE, a DECISION is hereby rendered based on the above-quoted
SURVIVING HEIRS OF ALFREDO R. BAUTISTA, namely: EPIFANIA G.
BAUTISTA and ZOEY G. BAUTISTA, Petitioners,
vs.
FRANCISCO LINDO and WELHILMINA LINDO; and HEIRS OF FILIPINA
DAQUIGAN, Respondents.
DECISION
VELASCO, JR., J.:
The Case
This is a Petition for Review on Certiorari under Rule 45 assailing the April 25, 2013
Order of the Regional Trial Court (RTC) in Civil Case No. (1798)-021 as well as its
Order of July 3, 2013 denying reconsideration.
The Facts
Alfredo R. Bautista (Bautista), petitioner’s predecessor, inherited in 1983 a free-
patent land located in Poblacion, Lupon, Davao Oriental and covered by Original
Certificate of Title (OCT) No. (1572) P-6144. A few years later, he subdivided the
property and sold it to several vendees, herein respondents, via a notarized deed of
absolute sale dated May 30, 1991. Two months later, OCT No. (1572) P-6144 was
canceled and Transfer Certificates of Title (TCTs) were issued in favor of the vendees.1
Three years after the sale, or on August 5, 1994, Bautista filed a complaint for
repurchase against respondents before the RTC, Branch 32, Lupon, Davao Oriental,
docketed as Civil Case No. 1798,2 anchoring his cause of action on Section 119 of
Commonwealth Act No. (CA) 141, otherwise known as the "Public Land Act," which
reads:
SECTION 119. Every conveyance of land acquired under the free patent or homestead
provisions, when proper, shall be subject to repurchase by the applicant, his widow, or
legal heirs, within a period of five years from the date of the conveyance.
Respondents, in their Answer, raised lack of cause of action, estoppel, prescription,
and laches, as defenses.
Meanwhile, during the pendency of the case, Bautista died and was substituted by
petitioner Epifania G. Bautista (Epifania).
Respondents Francisco and Welhilmina Lindo later entered into a compromise
agreement with petitioners, whereby they agreed to cede to Epifania a three thousand
two hundred and thirty square meter (3,230 sq.m.)-portion of the property as well as
to waive, abandon, surrender, and withdraw all claims and counterclaims against each
other. The compromise was approved by the RTC in its Decision dated January 27,
2011, the fallo of which reads:
Compromise Agreement and the parties are enjoined to strictly comply with the terms
and conditions of the same.
SO ORDERED.3
Other respondents, however, filed a Motion to Dismiss4 dated February 4, 2013,
alleging that the complaint failed to state the value of the property sought to be
recovered. Moreover, they asserted that the total selling price of all the properties is
only sixteen thousand five hundred pesos (PhP 16,500), and the selling price or
market value of a property is always higher than its assessed value. Since Batas
Pambansa Blg. (BP) 129, as amended, grants jurisdiction to the RTCs over civil
actions involving title to or possession of real property or interest therein where the
assessed value is more than PhP 20,000, then the RTC has no jurisdiction over the
complaint in question since the property which Bautista seeks to repurchase is below
the PhP 20,000 jurisdictional ceiling.
RTC Ruling5
Acting on the motion, the RTC issued the assailed order dismissing the complaint for
lack of jurisdiction. The trial court found that Bautista failed to allege in his complaint
that the value of the subject property exceeds 20 thousand pesos. Furthermore, what
was only stated therein was that the total and full refund of the purchase price of the
property is PhP 16,500. This omission was considered by the RTC as fatal to the case
considering that in real actions, jurisdictional amount is determinative of whether it is
the municipal trial court or the RTC that has jurisdiction over the case.
With respect to the belated filing of the motion, the RTC, citing Cosco Philippines
Shipping, Inc. v. Kemper Insurance Company,6 held that a motion to dismiss for lack
of jurisdiction may be filed at any stage of the proceedings, even on appeal, and is not
lost by waiver or by estoppel. The dispositive portion of the assailed Order reads:
WHEREFORE, the complaint for Repurchase, Consignation, with Preliminary
Injunction and Damages is hereby dismissed for lack of jurisdiction.
SO ORDERED.7
Assignment of Errors
Their motion for reconsideration having been denied, petitioners now seek recourse
before this Court with the following assigned errors:
I - THE PUBLIC RESPONDENT RTC ERRED IN ADMITTING THE MOTION TO
DISMISS DATED FEBRUARY 4, 2013, BELATEDLY FILED BY THE PRIVATE
RESPONDENTS IN THE CASE.
II - THE PUBLIC RESPONDENT RTC ERRED IN HOLDING THAT THE INSTANT
CASE FOR REPURCHASE IS A REAL ACTION.8
The Issue
Stated differently, the issue for the Court’s resolution is: whether or not the RTC erred
in granting the motion for the dismissal of the case on the ground of lack of
jurisdiction over the subject matter.
Arguments
Petitioners argue that respondents belatedly filed their Motion to Dismiss and are
now estopped from seeking the dismissal of the case, it having been filed nine (9)
years after the filing of the complaint and after they have actively participated in the
proceedings. Additionally, they allege that an action for repurchase is not a real
action, but one incapable of pecuniary estimation, it being founded on privity of
contract between the parties. According to petitioners, what they seek is the
enforcement of their right to repurchase the subject property under Section 119 of CA
141.
Respondents, for their part, maintain that since the land is no longer devoted to
agriculture, the right of repurchase under said law can no longer be availed of, citing
Santana v. Mariñas.9 Furthermore, they suggest that petitioners intend to resell the
property for a higher profit, thus, the attempt to repurchase. This, according to
respondents, goes against the policy and is not in keeping with the spirit of CA 141
which is the preservation of the land gratuitously given to patentees by the State as a
reward for their labor in cultivating the property. Also, the Deed of Absolute Sale
presented in evidence by Bautista was unilaterally executed by him and was not
signed by respondents. Lastly, respondents argue that repurchase is a real action
capable of pecuniary estimation.
Our Ruling
The petition is meritorious.
Jurisdiction of courts is granted by the Constitution and pertinent laws.
Jurisdiction of RTCs, as may be relevant to the instant petition, is provided in Sec. 19
of BP 129, which reads:
Sec. 19. Jurisdiction in civil cases.―Regional Trial Courts shall exercise exclusive
original jurisdiction:
1) In all civil actions in which the subject of the litigation is incapable of pecuniary
estimation;
2) In all civil actions which involve the title to, or possession of, real property, or any
interest therein, where the assessed value of the property involved exceeds Twenty
thousand pesos (₱20,000.00) or, for civil actions in Metro Manila, where such value
exceeds Fifty thousand pesos (₱50,000.00) except actions for forcible entry into and
unlawful detainer of lands or buildings, original jurisdiction over which is conferred
upon the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit
Trial Courts.
On the other hand, jurisdiction of first level courts is prescribed in Sec. 33 of BP 129,
which provides:
Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and
Municipal Circuit Trial Courts in civil cases.―Metropolitan Trial Courts, Municipal
Trial Courts, and Municipal Circuit Trial Courts shall exercise:
3) Exclusive original jurisdiction in all civil actions which involve title to, or
possession of, real property, or any interest therein where the assessed value of the
property or interest therein does not exceed Twenty thousand pesos (₱20,000.00) or,
in civil actions in Metro Manila, where such assessed value does not exceed Fifty
thousand pesos (₱50,000.00) exclusive of interest, damages of whatever kind,
attorney’s fees, litigation expenses and costs: Provided, That in cases of land not
declared for taxation purposes, the value of such property shall be determined by the
assessed value of the adjacent lots.
The core issue is whether the action filed by petitioners is one involving title to or
possession of real property or any interest therein or one incapable of pecuniary
estimation.
The course of action embodied in the complaint by the present petitioners’
predecessor, Alfredo R. Bautista, is to enforce his right to repurchase the lots he
formerly owned pursuant to the right of a free-patent holder under Sec. 119 of CA 141
or the Public Land Act.
The Court rules that the complaint to redeem a land subject of a free patent is a civil
action incapable of pecuniary estimation.
It is a well-settled rule that jurisdiction of the court is determined by the allegations in
the complaint and the character of the relief sought.10 In this regard, the Court, in
Russell v. Vestil,11 wrote that "in determining whether an action is one the subject
matter of which is not capable of pecuniary estimation this Court has adopted the
criterion of first ascertaining the nature of the principal action or remedy sought. If it
is primarily for the recovery of a sum of money, the claim is considered capable of
pecuniary estimation, and whether jurisdiction is in the municipal courts or in the
RTCs would depend on the amount of the claim." But where the basic issue is
something other than the right to recover a sum of money, where the money claim is
purely incidental to, or a consequence of, the principal relief sought, this Court has
considered such actions as cases where the subject of the litigation may not be
estimated in terms of money, and, hence, are incapable of pecuniary estimation.
These cases are cognizable exclusively by RTCs.12
Settled jurisprudence considers some civil actions as incapable of pecuniary
estimation, viz:
1. Actions for specific performance;
2. Actions for support which will require the determination of the civil status;
3. The right to support of the plaintiff;
4. Those for the annulment of decisions of lower courts;
5. Those for the rescission or reformation of contracts;13
6. Interpretation of a contractual stipulation.14
The Court finds that the instant cause of action to redeem the land is one for specific
performance.
The facts are clear that Bautista sold to respondents his lots which were covered by a
free patent. While the deeds of sale do not explicitly contain the stipulation that the
sale is subject to repurchase by the applicant within a period of five (5) years from the
date of conveyance pursuant to Sec. 119 of CA 141, still, such legal provision is deemed
integrated and made part of the deed of sale as prescribed by law. It is basic that the
law is deemed written into every contract.15 Although a contract is the law between
the parties, the provisions of positive law which regulate contracts are deemed written
therein and shall limit and govern the relations between the parties.16 Thus, it is a
binding prestation in favor of Bautista which he may seek to enforce. That is precisely
what he did. He filed a complaint to enforce his right granted by law to recover the lot
subject of free patent. Ergo, it is clear that his action is for specific performance, or if
not strictly such action, then it is akin or analogous to one of specific performance.
Such being the case, his action for specific performance is incapable of pecuniary
estimation and cognizable by the RTC.
Respondents argue that Bautista’s action is one involving title to or possession of real
property or any interests therein and since the selling price is less than PhP 20,000,
then jurisdiction is lodged with the MTC. They rely on Sec. 33 of BP 129.
Republic Act No. 769117 amended Sec. 33 of BP 129 and gave Metropolitan Trial
Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts exclusive original
jurisdiction in all civil actions which involve title to, or possession of, real property, or
any interest therein where the assessed value of the property or interest therein does
not exceed twenty thousand pesos (PhP 20,000) or, in civil actions in Metro Manila,
where such assessed value does not exceed fifty thousand pesos (PhP 50,000)
exclusive of interest, damages of whatever kind, attorney’s fees, litigation expenses
and costs.
At first blush, it appears that the action filed by Bautista involves title to or possession
of the lots he sold to respondents. Since the total selling price is less than PhP 20,000,
then the MTC, not the RTC, has jurisdiction over the case. This proposition is
incorrect for the re-acquisition of the lots by Bautista or herein successors-in-
interests, the present petitioners, is but incidental to and an offshoot of the exercise of
the right by the latter to redeem said lots pursuant to Sec. 119 of CA 141. The
reconveyance of the title to petitioners is solely dependent on the exercise of such
right to repurchase the lots in question and is not the principal or main relief or
remedy sought. Thus, the action of petitioners is, in reality, incapable of pecuniary
estimation, and the reconveyance of the lot is merely the outcome of the performance
of the obligation to return the property conformably to the express provision of CA
141.
Even if we treat the present action as one involving title to real property or an interest
therein which falls under the jurisdiction of the first level court under Sec. 33 of BP
129, as the total selling price is only PhP 16,000 way below the PhP 20,000 ceiling,
still, the postulation of respondents that MTC has jurisdiction will not hold water.
This is because respondents have actually participated in the proceedings before the
RTC and aggressively defended their position, and by virtue of which they are already
barred to question the jurisdiction of the RTC following the principle of jurisdiction
by estoppel.
In Heirs of Jose Fernando v. De Belen, it was held that the party raising defenses to
the complaint, actively participating in the proceedings by filing pleadings, presenting
his evidence, and invoking its authority by asking for an affirmative relief is deemed
estopped from questioning the jurisdiction of the court.18
Here, we note that aside from the belated filing of the motion to dismiss––it having
been filed nine (9) years from the filing of the complaint––respondents actively
participated in the proceedings through the following acts:
1. By filing their Answer and Opposition to the Prayer for Injunction19 dated
September 29, 1994 whereby they even interposed counterclaims, specifically: PhP
501,000 for unpaid survey accounts, PhP 100,000 each as litigation expenses, PhP
200,000 and PhP 3,000 per daily appearance by way of attorney’s fees, PhP 500,000
as moral damages, PhP 100,000 by way of exemplary damages, and costs of suit;
2. By participating in Pre-trial;
3. By moving for the postponement of their presentation of evidence;20
4. By presenting their witness;21 and
5. By submitting the compromise agreement for approval.22
Having fully participated in all stages of the case, and even invoking the RTC’s
authority by asking for affirmative reliefs, respondents can no longer assail the
jurisdiction of the said trial court. Simply put, considering the extent of their
participation in the case, they are, as they should be, considered estopped from
raising lack of jurisdiction as a ground for the dismissal of the action.1âwphi1
WHEREFORE, premises considered, the instant petition is hereby GRANTED. The
April 25, 2013 and July 3, 2013 Orders of the Regional Trial Court in Civil Case No.
(1798)-021 are hereby REVERSED and SET ASIDE.
The Regional Trial Court, Branch 32 in Lupon, Davao Oriental is ORDERED to
proceed with dispatch in resolving Civil Case No. (1798)-021.
No pronouncement as to costs. SO ORDERED.
G.R. No. 150135 October 30, 2006
SPOUSES ANTONIO F. ALGURA and LORENCITA S.J.
ALGURA, petitioners,
vs.
THE LOCAL GOVERNMENT UNIT OF THE CITY OF NAGA, ATTY.
MANUEL TEOXON, ENGR. LEON PALMIANO, NATHAN SERGIO and
BENJAMIN NAVARRO, SR., respondents.
DECISION
VELASCO, JR., J.:
Anyone who has ever struggled with poverty
knows how extremely expensive it is to be poor.
–– James Baldwin
The Constitution affords litigants—moneyed or poor—equal access to the courts;
moreover, it specifically provides that poverty shall not bar any person from having
access to the courts.1 Accordingly, laws and rules must be formulated, interpreted,
and implemented pursuant to the intent and spirit of this constitutional provision. As
such, filing fees, though one of the essential elements in court procedures, should not
be an obstacle to poor litigants' opportunity to seek redress for their grievances before
the courts.
The Case
This Petition for Review on Certiorari seeks the annulment of the September 11, 2001
Order of the Regional Trial Court (RTC) of Naga City, Branch 27, in Civil Case No. 99-
4403 entitled Spouses Antonio F. Algura and Lorencita S.J. Algura v. The Local
Government Unit of the City of Naga, et al., dismissing the case for failure of
petitioners Algura spouses to pay the required filing fees.2 Since the instant petition
involves only a question of law based on facts established from the pleadings and
documents submitted by the parties,3 the Court gives due course to the instant
petition sanctioned under Section 2(c) of Rule 41 on Appeal from the RTCs, and
governed by Rule 45 of the 1997 Rules of Civil Procedure.
The Facts
On September 1, 1999, spouses Antonio F. Algura and Lorencita S.J. Algura filed a
Verified Complaint dated August 30, 19994 for damages against the Naga City
Government and its officers, arising from the alleged illegal demolition of their
residence and boarding house and for payment of lost income derived from fees paid
by their boarders amounting to PhP 7,000.00 monthly.
Simultaneously, petitioners filed an Ex-Parte Motion to Litigate as Indigent
Litigants,5 to which petitioner Antonio Algura's Pay Slip No. 2457360 (Annex "A" of
motion) was appended, showing a gross monthly income of Ten Thousand Four
Hundred Seventy Four Pesos (PhP 10,474.00) and a net pay of Three Thousand Six
Hundred Sixteen Pesos and Ninety Nine Centavos (PhP 3,616.99) for [the month of]
July 1999.6 Also attached as Annex "B" to the motion was a July 14, 1999
Certification7 issued by the Office of the City Assessor of Naga City, which stated that
petitioners had no property declared in their name for taxation purposes.
Finding that petitioners' motion to litigate as indigent litigants was meritorious,
Executive Judge Jose T. Atienza of the Naga City RTC, in the September 1, 1999
Order,8 granted petitioners' plea for exemption from filing fees.
Meanwhile, as a result of respondent Naga City Government's demolition of a portion
of petitioners' house, the Alguras allegedly lost a monthly income of PhP 7,000.00
from their boarders' rentals. With the loss of the rentals, the meager income from
Lorencita Algura's sari-sari store and Antonio Algura's small take home pay became
insufficient for the expenses of the Algura spouses and their six (6) children for their
basic needs including food, bills, clothes, and schooling, among others.
On October 13, 1999, respondents filed an Answer with Counterclaim dated October
10, 1999,9 arguing that the defenses of the petitioners in the complaint had no cause
of action, the spouses' boarding house blocked the road right of way, and said
structure was a nuisance per se.
Praying that the counterclaim of defendants (respondents) be dismissed, petitioners
then filed their Reply with Ex-Parte Request for a Pre-Trial Setting10 before the Naga
City RTC on October 19, 1999. On February 3, 2000, a pre-trial was held wherein
respondents asked for five (5) days within which to file a Motion to Disqualify
Petitioners as Indigent Litigants.
On March 13, 2000, respondents filed a Motion to Disqualify the Plaintiffs for Non-
Payment of Filing Fees dated March 10, 2000.11 They asserted that in addition to the
more than PhP 3,000.00 net income of petitioner Antonio Algura, who is a member
of the Philippine National Police, spouse Lorencita Algura also had a mini-store and a
computer shop on the ground floor of their residence along Bayawas St., Sta. Cruz,
Naga City. Also, respondents claimed that petitioners' second floor was used as their
residence and as a boarding house, from which they earned more than PhP 3,000.00
a month. In addition, it was claimed that petitioners derived additional income from
their computer shop patronized by students and from several boarders who paid
rentals to them. Hence, respondents concluded that petitioners were not indigent
litigants.
On March 28, 2000, petitioners subsequently interposed their Opposition to the
Motion12 to respondents' motion to disqualify them for non-payment of filing fees.
On April 14, 2000, the Naga City RTC issued an Order disqualifying petitioners as
indigent litigants on the ground that they failed to substantiate their claim for
exemption from payment of legal fees and to comply with the third paragraph of Rule
141, Section 18 of the Revised Rules of Court—directing them to pay the requisite
filing fees.13
On April 28, 2000, petitioners filed a Motion for Reconsideration of the April 14,
2000 Order. On May 8, 2000, respondents then filed their Comment/Objections to
petitioner's Motion for Reconsideration.
On May 5, 2000, the trial court issued an Order14 giving petitioners the opportunity to
comply with the requisites laid down in Section 18, Rule 141, for them to qualify as
indigent litigants.
On May 13, 2000, petitioners submitted their Compliance15 attaching the affidavits of
petitioner Lorencita Algura16and Erlinda Bangate,17 to comply with the requirements
of then Rule 141, Section 18 of the Rules of Court and in support of their claim to be
declared as indigent litigants.
In her May 13, 2000 Affidavit, petitioner Lorencita Algura claimed that the
demolition of their small dwelling deprived her of a monthly income amounting to
PhP 7,000.00. She, her husband, and their six (6) minor children had to rely mainly
on her husband's salary as a policeman which provided them a monthly amount of
PhP 3,500.00, more or less. Also, they did not own any real property as certified by
the assessor's office of Naga City. More so, according to her, the meager net income
from her small sari-sari store and the rentals of some boarders, plus the salary of her
husband, were not enough to pay the family's basic necessities.
To buttress their position as qualified indigent litigants, petitioners also submitted the
affidavit of Erlinda Bangate, who attested under oath, that she personally knew
spouses Antonio Algura and Lorencita Algura, who were her neighbors; that they
derived substantial income from their boarders; that they lost said income from their
boarders' rentals when the Local Government Unit of the City of Naga, through its
officers, demolished part of their house because from that time, only a few boarders
could be accommodated; that the income from the small store, the boarders, and the
meager salary of Antonio Algura were insufficient for their basic necessities like food
and clothing, considering that the Algura spouses had six (6) children; and that she
knew that petitioners did not own any real property.
Thereafter, Naga City RTC Acting Presiding Judge Andres B. Barsaga, Jr. issued his
July 17, 200018 Order denying the petitioners' Motion for Reconsideration.
Judge Barsaga ratiocinated that the pay slip of Antonio F. Algura showed that the
"GROSS INCOME or TOTAL EARNINGS of plaintiff Algura [was] ₧10,474.00 which
amount [was] over and above the amount mentioned in the first paragraph of Rule
141, Section 18 for pauper litigants residing outside Metro Manila."19 Said rule
provides that the gross income of the litigant should not exceed PhP 3,000.00 a
month and shall not own real estate with an assessed value of PhP 50,000.00. The
trial court found that, in Lorencita S.J. Algura's May 13, 2000 Affidavit, nowhere was
it stated that she and her immediate family did not earn a gross income of PhP
3,000.00.
The Issue
Unconvinced of the said ruling, the Alguras instituted the instant petition raising a
solitary issue for the consideration of the Court: whether petitioners should be
considered as indigent litigants who qualify for exemption from paying filing fees.
The Ruling of the Court
The petition is meritorious.
A review of the history of the Rules of Court on suits in forma pauperis (pauper
litigant) is necessary before the Court rules on the issue of the Algura spouses' claim
to exemption from paying filing fees.
When the Rules of Court took effect on January 1, 1964, the rule on pauper litigants
was found in Rule 3, Section 22 which provided that:
Section 22. Pauper litigant.—Any court may authorize a litigant to
prosecute his action or defense as a pauper upon a proper showing that he
has no means to that effect by affidavits, certificate of the corresponding
provincial, city or municipal treasurer, or otherwise. Such authority[,] once
given[,] shall include an exemption from payment of legal fees and from
filing appeal bond, printed record and printed brief. The legal fees shall be a
lien to any judgment rendered in the case [favorable] to the pauper, unless
the court otherwise provides.
From the same Rules of Court, Rule 141 on Legal Fees, on the other hand, did not
contain any provision on pauper litigants.
On July 19, 1984, the Court, in Administrative Matter No. 83-6-389-0 (formerly G.R.
No. 64274), approved the recommendation of the Committee on the Revision of Rates
and Charges of Court Fees, through its Chairman, then Justice Felix V. Makasiar, to
revise the fees in Rule 141 of the Rules of Court to generate funds to effectively cover
administrative costs for services rendered by the courts.20 A provision on pauper
litigants was inserted which reads:
Section 16. Pauper-litigants exempt from payment of court fees.—Pauper-
litigants include wage earners whose gross income do not exceed P2,000.00
a month or P24,000.00 a year for those residing in Metro Manila, and
P1,500.00 a month or P18,000.00 a year for those residing outside Metro
Manila, or those who do not own real property with an assessed value of not
more than P24,000.00, or not more than P18,000.00 as the case may be.
Such exemption shall include exemption from payment of fees for filing
appeal bond, printed record and printed brief.
The legal fees shall be a lien on the monetary or property judgment rendered
in favor of the pauper-litigant.
To be entitled to the exemption herein provided, the pauper-litigant shall
execute an affidavit that he does not earn the gross income abovementioned,
nor own any real property with the assessed value afore-mentioned [sic],
supported by a certification to that effect by the provincial, city or town
assessor or treasurer.
When the Rules of Court on Civil Procedure were amended by the 1997 Rules of Civil
Procedure (inclusive of Rules 1 to 71) in Supreme Court Resolution in Bar Matter No.
803 dated April 8, 1997, which became effective on July 1, 1997, Rule 3, Section 22 of
the Revised Rules of Court was superseded by Rule 3, Section 21 of said 1997 Rules of
Civil Procedure, as follows:
Section 21. Indigent party.—A party may be authorized to litigate his
action, claim or defense as an indigent if the court, upon an ex parte
application and hearing, is satisfied that the party is one who has no money
or property sufficient and available for food, shelter and basic necessities for
himself and his family.
Such authority shall include an exemption from payment of docket and other
lawful fees, and of transcripts of stenographic notes which the court may
order to be furnished him. The amount of the docket and other lawful fees
which the indigent was exempted from paying shall be a lien on any
judgment rendered in the case favorable to the indigent, unless the court
otherwise provides.
Any adverse party may contest the grant of such authority at any time before
judgment is rendered by the trial court. If the court should determine after
hearing that the party declared as an indigent is in fact a person with
sufficient income or property, the proper docket and other lawful fees shall
be assessed and collected by the clerk of court. If payment is not made within
the time fixed by the court, execution shall issue for the payment thereof,
without prejudice to such other sanctions as the court may impose.
At the time the Rules on Civil Procedure were amended by the Court in Bar Matter
No. 803, however, there was no amendment made on Rule 141, Section 16 on pauper
litigants.
On March 1, 2000, Rule 141 on Legal Fees was amended by the Court in A.M. No. 00-
2-01-SC, whereby certain fees were increased or adjusted. In this Resolution, the
Court amended Section 16 of Rule 141, making it Section 18, which now reads:
Section 18. Pauper-litigants exempt from payment of legal fees.—Pauper
litigants (a) whose gross income and that of their immediate family do not
exceed four thousand (P4,000.00) pesos a month if residing in Metro
Manila, and three thousand (P3,000.00) pesos a month if residing outside
Metro Manila, and (b) who do not own real property with an assessed value
of more than fifty thousand (P50,000.00) pesos shall be exempt from the
payment of legal fees.
The legal fees shall be a lien on any judgment rendered in the case favorably
to the pauper litigant, unless the court otherwise provides.
To be entitled to the exemption herein provided, the litigant shall execute an
affidavit that he and his immediate family do not earn the gross income
abovementioned, nor do they own any real property with the assessed value
aforementioned, supported by an affidavit of a disinterested person attesting
to the truth of the litigant's affidavit.
Any falsity in the affidavit of a litigant or disinterested person shall be
sufficient cause to strike out the pleading of that party, without prejudice to
whatever criminal liability may have been incurred.
It can be readily seen that the rule on pauper litigants was inserted in Rule
141 without revoking or amendingSection 21 of Rule 3, which provides for the
exemption of pauper litigants from payment of filing fees. Thus, on March 1, 2000,
there were two existing rules on pauper litigants; namely, Rule 3, Section
21 and Rule 141, Section 18.
On August 16, 2004, Section 18 of Rule 141 was further amended in Administrative
Matter No. 04-2-04-SC, which became effective on the same date. It then became
Section 19 of Rule 141, to wit:
Sec. 19. Indigent litigants exempt from payment of legal fees.–
INDIGENT LITIGANTS (A) WHOSE GROSS INCOME AND THAT OF
THEIR IMMEDIATE FAMILY DO NOT EXCEED AN AMOUNT
DOUBLE THE MONTHLY MINIMUM WAGE OF AN
EMPLOYEE AND (B) WHO DO NOT OWN REAL PROPERTY WITH A
FAIR MARKET VALUE AS STATED IN THE CURRENT TAX
DECLARATION OF MORE THAN THREE HUNDRED THOUSAND
(P300,000.00) PESOS SHALL BE EXEMPT FROM PAYMENT OF
LEGAL FEES.
The legal fees shall be a lien on any judgment rendered in the case favorable
to the indigent litigant unless the court otherwise provides.
To be entitled to the exemption herein provided, the litigant shall
execute an affidavit that he and his immediate family do not earn a
gross income abovementioned, and they do not own any real
property with the fair value aforementioned, supported by an
affidavit of a disinterested person attesting to the truth of the
litigant's affidavit. The current tax declaration, if any, shall be attached to
the litigant's affidavit.
Any falsity in the affidavit of litigant or disinterested person shall be
sufficient cause to dismiss the complaint or action or to strike out the
pleading of that party, without prejudice to whatever criminal liability may
have been incurred. (Emphasis supplied.)
Amendments to Rule 141 (including the amendment to Rule 141, Section 18) were
made to implement RA 9227 which brought about new increases in filing fees.
Specifically, in the August 16, 2004 amendment, the ceiling for the gross income of
litigants applying for exemption and that of their immediate family was increased
from PhP 4,000.00 a month in Metro Manila and PhP 3,000.00 a month outside
Metro Manila, to double the monthly minimum wage of an employee; and the
maximum value of the property owned by the applicant was increased from an
assessed value of PhP 50,000.00 to a maximum market value of PhP 300,000.00, to
be able to accommodate more indigent litigants and promote easier access to justice
by the poor and the marginalized in the wake of these new increases in filing fees.
Even if there was an amendment to Rule 141 on August 16, 2004, there was still no
amendment or recall of Rule 3, Section 21 on indigent litigants.
With this historical backdrop, let us now move on to the sole issue—whether
petitioners are exempt from the payment of filing fees.
It is undisputed that the Complaint (Civil Case No. 99-4403) was filed on September
1, 1999. However, the Naga City RTC, in its April 14, 2000 and July 17, 2000
Orders, incorrectly applied Rule 141, Section 18 on Legal Feeswhen the
applicable rules at that time were Rule 3, Section 21 on Indigent Party which
took effect on July 1, 1997 and Rule 141, Section 16 on Pauper Litigants which
became effective on July 19, 1984 up to February 28, 2000.
The old Section 16, Rule 141 requires applicants to file an ex-parte motion to litigate
as a pauper litigant by submitting an affidavit that they do not have a gross income of
PhP 2,000.00 a month or PhP 24,000.00 a year for those residing in Metro Manila
and PhP 1,500.00 a month or PhP 18,000.00 a year for those residing outside Metro
Manila or those who do not own real property with an assessed value of not more than
PhP 24,000.00 or not more than PhP 18,000.00 as the case may be. Thus, there are
two requirements: a) income requirement—the applicants should not have a gross
monthly income of more than PhP 1,500.00, and b) property requirement––they
should not own property with an assessed value of not more than PhP 18,000.00.
In the case at bar, petitioners Alguras submitted the Affidavits of petitioner Lorencita
Algura and neighbor Erlinda Bangate, the pay slip of petitioner Antonio F. Algura
showing a gross monthly income of PhP 10,474.00,21 and a Certification of the Naga
City assessor stating that petitioners do not have property declared in their names for
taxation.22 Undoubtedly, petitioners do not own real property as shown by the
Certification of the Naga City assessor and so the property requirement is met.
However with respect to the income requirement, it is clear that the gross monthly
income of PhP 10,474.00 of petitioner Antonio F. Algura and the PhP 3,000.00
income of Lorencita Algura when combined, were above the PhP 1,500.00 monthly
income threshold prescribed by then Rule 141, Section 16 and therefore, the income
requirement was not satisfied. The trial court was therefore correct in disqualifying
petitioners Alguras as indigent litigants although the court should have applied Rule
141, Section 16 which was in effect at the time of the filing of the application on
September 1, 1999. Even if Rule 141, Section 18 (which superseded Rule 141, Section
16 on March 1, 2000) were applied, still the application could not have been granted
as the combined PhP 13,474.00 income of petitioners was beyond the PhP 3,000.00
monthly income threshold.
Unrelenting, petitioners however argue in their Motion for Reconsideration of the
April 14, 2000 Order disqualifying them as indigent litigants23 that the rules have
been relaxed by relying on Rule 3, Section 21 of the 1997 Rules of Civil procedure
which authorizes parties to litigate their action as indigents if the court is satisfied
that the party is "one who has no money or property sufficient and available for food,
shelter and basic necessities for himself and his family." The trial court did not give
credence to this view of petitioners and simply applied Rule 141 but ignored Rule 3,
Section 21 on Indigent Party.
The position of petitioners on the need to use Rule 3, Section 21 on their application
to litigate as indigent litigants brings to the fore the issue on whether a trial court has
to apply both Rule 141, Section 16 and Rule 3, Section 21 on such applications or
should the court apply only Rule 141, Section 16 and discard Rule 3, Section 21 as
having been superseded by Rule 141, Section 16 on Legal Fees.
The Court rules that Rule 3, Section 21 and Rule 141, Section 16 (later amended as
Rule 141, Section 18 on March 1, 2000 and subsequently amended by Rule 141,
Section 19 on August 16, 2003, which is now the present rule) are still valid and
enforceable rules on indigent litigants.
For one, the history of the two seemingly conflicting rules readily reveals that it was
not the intent of the Court to consider the old Section 22 of Rule 3, which took effect
on January 1, 1994 to have been amended and superseded by Rule 141, Section 16,
which took effect on July 19, 1984 through A.M. No. 83-6-389-0. If that is the case,
then the Supreme Court, upon the recommendation of the Committee on the Revision
on Rules, could have already deleted Section 22 from Rule 3 when it amended Rules 1
to 71 and approved the 1997 Rules of Civil Procedure, which took effect on July 1,
1997. The fact that Section 22 which became Rule 3, Section 21 on indigent litigant
was retained in the rules of procedure, even elaborating on the meaning of an indigent
party, and was also strengthened by the addition of a third paragraph on the right to
contest the grant of authority to litigate only goes to show that there was no intent at
all to consider said rule as expunged from the 1997 Rules of Civil Procedure.
Furthermore, Rule 141 on indigent litigants was amended twice: first on March 1,
2000 and the second on August 16, 2004; and yet, despite these two amendments,
there was no attempt to delete Section 21 from said Rule 3. This clearly evinces the
desire of the Court to maintain the two (2) rules on indigent litigants to cover
applications to litigate as an indigent litigant.
It may be argued that Rule 3, Section 21 has been impliedly repealed by the recent
2000 and 2004 amendments to Rule 141 on legal fees. This position is bereft of merit.
Implied repeals are frowned upon unless the intent of the framers of the rules is
unequivocal. It has been consistently ruled that:
(r)epeals by implication are not favored, and will not be decreed, unless it is
manifest that the legislature so intended. As laws are presumed to be passed
with deliberation and with full knowledge of all existing ones on the subject,
it is but reasonable to conclude that in passing a statute[,] it was not intended
to interfere with or abrogate any former law relating to same matter, unless
the repugnancy between the two is not only irreconcilable, but also clear and
convincing, and flowing necessarily from the language used, unless the later
act fully embraces the subject matter of the earlier, or unless the reason for
the earlier act is beyond peradventure removed. Hence, every effort must be
used to make all acts stand and if, by any reasonable construction they can
be reconciled, the later act will not operate as a repeal of the
earlier.24 (Emphasis supplied).
Instead of declaring that Rule 3, Section 21 has been superseded and impliedly
amended by Section 18 and later Section 19 of Rule 141, the Court finds that the two
rules can and should be harmonized.
The Court opts to reconcile Rule 3, Section 21 and Rule 141, Section 19 because it is a
settled principle that when conflicts are seen between two provisions, all efforts must
be made to harmonize them. Hence, "every statute [or rule] must be so construed and
harmonized with other statutes [or rules] as to form a uniform system of
jurisprudence."25
In Manila Jockey Club, Inc. v. Court of Appeals, this Court enunciated that in the
interpretation of seemingly conflicting laws, efforts must be made to first harmonize
them. This Court thus ruled:
Consequently, every statute should be construed in such a way that will
harmonize it with existing laws. This principle is expressed in the legal
maxim 'interpretare et concordare leges legibus est optimus interpretandi,'
that is, to interpret and to do it in such a way as to harmonize laws with laws
is the best method of interpretation.26
In the light of the foregoing considerations, therefore, the two (2) rules can stand
together and are compatible with each other. When an application to litigate as an
indigent litigant is filed, the court shall scrutinize the affidavits and supporting
documents submitted by the applicant to determine if the applicant complies with the
income and property standards prescribed in the present Section 19 of Rule 141—that
is, the applicant's gross income and that of the applicant's immediate family do not
exceed an amount double the monthly minimum wage of an employee; and the
applicant does not own real property with a fair market value of more than Three
Hundred Thousand Pesos (PhP 300,000.00). If the trial court finds that the applicant
meets the income and property requirements, the authority to litigate as indigent
litigant is automatically granted and the grant is a matter of right.
However, if the trial court finds that one or both requirements have not been met,
then it would set a hearing to enable the applicant to prove that the applicant has "no
money or property sufficient and available for food, shelter and basic necessities for
himself and his family." In that hearing, the adverse party may adduce countervailing
evidence to disprove the evidence presented by the applicant; after which the trial
court will rule on the application depending on the evidence adduced. In addition,
Section 21 of Rule 3 also provides that the adverse party may later still contest the
grant of such authority at any time before judgment is rendered by the trial court,
possibly based on newly discovered evidence not obtained at the time the application
was heard. If the court determines after hearing, that the party declared as an
indigent is in fact a person with sufficient income or property, the proper docket and
other lawful fees shall be assessed and collected by the clerk of court. If payment is
not made within the time fixed by the court, execution shall issue or the payment of
prescribed fees shall be made, without prejudice to such other sanctions as the court
may impose.
The Court concedes that Rule 141, Section 19 provides specific standards while Rule 3,
Section 21 does not clearly draw the limits of the entitlement to the exemption.
Knowing that the litigants may abuse the grant of authority, the trial court must use
sound discretion and scrutinize evidence strictly in granting exemptions, aware that
the applicant has not hurdled the precise standards under Rule 141. The trial court
must also guard against abuse and misuse of the privilege to litigate as an indigent
litigant to prevent the filing of exorbitant claims which would otherwise be regulated
by a legal fee requirement.
Thus, the trial court should have applied Rule 3, Section 21 to the application of the
Alguras after their affidavits and supporting documents showed that petitioners did
not satisfy the twin requirements on gross monthly income and ownership of real
property under Rule 141. Instead of disqualifying the Alguras as indigent litigants, the
trial court should have called a hearing as required by Rule 3, Section 21 to enable the
petitioners to adduce evidence to show that they didn't have property and money
sufficient and available for food, shelter, and basic necessities for them and their
family.27 In that hearing, the respondents would have had the right to also present
evidence to refute the allegations and evidence in support of the application of the
petitioners to litigate as indigent litigants. Since this Court is not a trier of facts, it will
have to remand the case to the trial court to determine whether petitioners can be
considered as indigent litigants using the standards set in Rule 3, Section 21.
Recapitulating the rules on indigent litigants, therefore, if the applicant for exemption
meets the salary and property requirements under Section 19 of Rule 141, then the
grant of the application is mandatory. On the other hand, when the application does
not satisfy one or both requirements, then the application should not be denied
outright; instead, the court should apply the "indigency test" under Section 21 of Rule
3 and use its sound discretion in determining the merits of the prayer for exemption.
Access to justice by the impoverished is held sacrosanct under Article III, Section 11 of
the 1987 Constitution. The Action Program for Judicial Reforms (APJR) itself,
initiated by former Chief Justice Hilario G. Davide, Jr., placed prime importance on
'easy access to justice by the poor' as one of its six major components. Likewise, the
judicial philosophy of Liberty and Prosperity of Chief Justice Artemio V. Panganiban
makes it imperative that the courts shall not only safeguard but also enhance the
rights of individuals—which are considered sacred under the 1987 Constitution.
Without doubt, one of the most precious rights which must be shielded and secured is
the unhampered access to the justice system by the poor, the underprivileged, and the
marginalized.
WHEREFORE, the petition is GRANTED and the April 14, 2000 Order granting
the disqualification of petitioners, the July 17, 2000 Order denying petitioners'
Motion for Reconsideration, and the September 11, 2001 Order dismissing the case in
Civil Case No. RTC-99-4403 before the Naga City RTC, Branch 27
are ANNULLED and SET ASIDE. Furthermore, the Naga City RTC is ordered to set
the "Ex-Parte Motion to Litigate as Indigent Litigants" for hearing and apply Rule 3,
Section 21 of the 1997 Rules of Civil Procedure to determine whether petitioners can
qualify as indigent litigants.
No costs. SO ORDERED.
G.R. No. 132765 January 31, 2003
GLICERIO R. BRIOSO, substituted by FELICIDAD Z. BRIOSO, BENER Z.
BRIOSO, JULITO Z. BRIOSO, GLICERIO Z. BRIOSO, JR., and ERNESTO
Z. BRIOSO, CONCEPCION B. NOLASCO, MARCOS NOLASCO and
SALVADOR Z. BRIOSO, petitioners,
vs.
SALVADORA RILI-MARIANO and LEONARDO C. MARIANO, respondents.
CARPIO, J.:
The Case
This petition for review on certiorari1seeks to reverse the Decision2 of the Court of
Appeals dated September 2, 1997 in CA-G.R. CV No. 51347, as well as the Resolution
dated January 21, 1998 denying the motion for reconsideration. The Court of Appeals
in its assailed Decision affirmed the Decision3 of the Regional Trial Court, Branch 29,
Libmanan, Camarines Sur. The trial court ordered petitioners to turn over possession
of certain properties to respondents and to pay respondents damages and attorney's
fees.
The Facts
On February 1, 1975, the Spouses Salvadora Rili-Mariano and Leonardo C. Mariano
("Spouses Mariano" for brevity), through the Land Bank of the Philippines ("Land
Bank" for brevity), repurchased the property that they previously sold to Glicerio
Brioso ("Glicerio" for brevity) within the period specified in the parties' pacto de retro
sale. Despite repeated demands, however, Glicerio refused to deliver the entire
property to the Spouses Mariano. Thus, on May 27, 1977, the Spouses Mariano filed a
complaint4 for recovery of possession of real property against Glicerio, Ernesto Brioso
("Ernesto" for brevity), Concepcion Brioso-Nolasco ("Concepcion" for brevity),
Eusebio Nocedal ("Eusebio" for brevity) and Salvador Brioso ("Salvador" for brevity).
The Spouses Mariano sought to repossess Lots 715, 716, 718, 722, 724 and 725
("Properties" for brevity), which constitute portions of a riceland containing an area of
19.5229 hectares and situated at Potot, Libmanan, Camarines Sur.
Defendants, through their counsels, Augusto Pardalis ("Atty. Pardalis" for brevity)
and Salvador, asserted that the Spouses Mariano had no cause of action against
Glicerio because the latter had already lost all interest in the land. Defendants claimed
that Glicerio installed his son Ernesto, his daughter Concepcion and his employee
Eusebio as tenants of the property before the repurchase, therefore, they were bona
fide cultivators-possessors of the land. Defendants also averred that the titles to the
Properties had already been transferred to the Land Bank. Defendants added that the
complaint was defective as it failed to implead Land Bank and Concepcion's husband
as indispensable parties. As part of their counterclaim, defendants alleged that the
Spouses Mariano failed to comply with their obligation to replace the Land Bank
bonds (which Spouses Mariano used to partly pay the repurchase price) with cash.
Subsequently, Spouses Mariano amended their complaint to implead Land Bank and
Concepcion spouse, Marcos Nolasco ("Marcos" for brevity).5
During the pre-trial, upon the Spouses Mariano's motion, the complaint was
dismissed against Land Bank, Ernesto and Eusebio.6 Thereafter, trial against the
remaining defendants, namely, Glicerio, Concepcion, Marcos and Salvador, ensued.
On August 30, 1987, Glicerio died. Accordingly, defendants, through Atty. Pardalis,
filed a Notice of Death of Glicerio Brioso.7 Subsequently, the Spouses Mariano's
counsel filed a Motion for Substitution of Deceased Defendant8which Atty. Pardalis
received. Acting on the motion for substitution, the trial court issued an Order9 which
reads:
"The motion of Atty. Grageda to substitute the deceased defendant Glicerio
Brioso is hereby admitted.
SO ORDERED."
Trial on the merits continued. Accordingly, defendants adduced their evidence. Part
of defendants' evidence consisted of the testimonies of Salvador, Concepcion and
Ernesto.10
On July 14, 1995, the trial court rendered a decision, the dispositive portion of which
reads:
"WHEREFORE, premises considered, after proper evaluation of the evidence
presented by both parties, this Court finds and holds that the preponderance
of evidence is in favor of the plaintiffs. Hence, judgment is rendered in favor
of the plaintiffs and against the defendants Concepcion Brioso-Nolasco and
her husband,11Salvador Brioso and the substitute defendants for deceased
defendant Glicerio Brioso who are ordered to pay the plaintiffs, jointly and
severally, in the proportion stated earlier:
a) P303,972.46, for actual damages;
b) P147,000.00 for transportation, hotel and representation
expenses;
c) P95,000.00 for income loss from employment and business
activities;
d) P20,000.00 for attorney's fees;
e) P150,000.00 for moral damages;
f) P50,000.00 for exemplary damages; and
g) to pay the cost.
 All these amounts shall earn interest at 6% per annum until fully paid by the
defendants.
The defendants are also directed to immediately turn over the physical and
material possession of Lots 716, 722 and 725 to the plaintiffs as reflected in
Exh. D.
SO ORDERED."12
Dissatisfied with the adverse decision, Marcos and Glicerio's heirs, namely, Felicidad
Z. Brioso ("Felicidad" for brevity), Bener Z. Brioso ("Bener" for brevity), Julito Z.
Brioso ("Julito" for brevity), Glicerio Z. Brioso, Jr. ("Glicerio, Jr." for brevity),
Ernesto, Concepcion and Salvador filed an appeal with the Court of Appeals.
In the Court of Appeals, petitioners presented, among others, the issue of whether
there was a valid substitution of the deceased party, the main issue presented in the
instant petition. Petitioners maintained that the substitution of Glicerio was invalid as
the trial court failed to comply with the Rules of Court on the substitution of a
deceased party. Considering that the substitution was null and void, petitioners
alleged that the trial court did not acquire jurisdiction over their persons. Hence, the
entire proceedings in the trial court and the judgment rendered by the trial court were
void.
The Ruling of the Court of Appeals
The Court of Appeals sustained the decision of the trial court. In ruling that there was
a valid substitution of the deceased party, the Court of Appeals quoted Section 17,
Rule 3 of the old Rules of Court. The Court of Appeals held that the trial court
acquired jurisdiction over the persons of the petitioners. Thus, the decision of the trial
court is valid and binding upon all of the petitioners. The Court of Appeals anchored
its ruling on the following factual findings:
"In this case, the records show that on September 23, 1987, Atty. Augusto
Pardales(sic), counsel for defendants, filed a notice of death informing the
court that defendant Glicerio R. Brioso died on August 30, 1987 (p. 316,
Records). Counsel for the plaintiffs accordingly filed a Motion for
Substitution of Deceased Defendant on October 5, 1987 (p. 318, Records).
The trial court on October 8, 1987 issued an Order which reads:
Subsequently, the heirs of Glicerio Brioso, namely: Mrs. Felicidad Z. Brioso,
Benet(sic) Z. Brioso, Julito Z. Brioso, Glicerio Z. Brioso, Jr., Ernesto Z. Brioso,
Concepcion Brioso-Nolasco, and Salvador Z. Brioso, were made substitute defendants
in the case. Their counsels were definitely aware of such substitution. In fact, one of
them, Atty. Salvador Z. Brioso, was one of the counsels of the defendants. It was the
duty of said counsels to inform the heirs of the substitution after the court had issued
the order granting the motion of the plaintiffs.
Moreover, Ernesto Brioso cannot deny the fact that he knew of the pendency of the
action and the substitution of the heirs because he participated as a witness for the
defendants even after the case against him was earlier dismissed. Undoubtedly, the
court had acquired jurisdiction over the persons of the heirs and the judgment is
thereby binding upon all of them."13
Petitioners filed a Motion for Reconsideration of the above decision. Finding no new
issues or arguments raised in the motion, the Court of Appeals denied the same.14
Hence, this petition.
The Issues
Petitioners posed these "two-fold issues"15 for resolution:
1. Whether there was a valid substitution of deceased Glicerio; and
2. Whether the trial court acquired jurisdiction over the persons of the
petitioners.
The Court's Ruling
The petition is partly meritorious.
Petitioners assert that the trial court failed to comply with the clear language of
Section 17, Rule 3 of the old Rules of Court which provides as follows:
"Death of a party. After a party dies and the claim is not thereby
extinguished, the court shall order, upon proper notice, the legal
representative of the deceased, within a period of thirty (30) days, or within
such time as may be granted. If the legal representative fails to appear within
said time, the court may order the opposing party to procure the
appointment of a legal representative of the deceased within a time to be
specified by the court, and the representative shall immediately appear for
and on behalf of the interest of the deceased. The court charges involved in
procuring such appointment, if defrayed by the opposing party, may be
recovered as costs. The heirs of the deceased may be allowed to be
substituted for the deceased, without requiring the appointment of an
executor or administrator and the court may appoint guardian ad litem for
the minor heirs."16
Petitioners allege that, as there was no appointed administrator for the estate of the
deceased defendant, the trial court should have ordered the heirs to appear personally
before it and manifest whether they were willing to substitute Glicerio. Petitioners
further aver that if none of the heirs appeared or manifested to act as substitutes, the
trial court should have ordered the adverse party to procure the appointment of a
legal representative of the deceased who should appear for and on behalf of the
deceased's interest.
Petitioners also harp on their failure to receive a copy of the Spouses Mariano's
motion for substitution of Glicerio as well as the Order of the trial court admitting the
motion. Petitioners argue that, even if they received a copy of the Order, the same did
not grant the Spouses Mariano's motion for substitution. Since they were not aware of
the purported substitution because of the lack of service on them of the motion and
the Order, petitioners insist that the entire proceedings in the trial court were void for
lack of jurisdiction over their persons.
It must be pointed out that, contrary to the Spouses Mariano's view, their complaint
for recovery of possession of real property is an action which survives the death of a
party.17 Such being the case, the rule on substitution of a deceased party is clearly
applicable.
Under the express terms of Section 17 of the old Rules, in case of the death of a party
and due notice is given to the trial court, it is the duty of the court to order the
deceased's legal representative or heir to appear for the deceased.18 Otherwise, "the
trial held by the court without appearance of the deceased's legal representative or
substitution of heirs and the judgment rendered after trial, are null and void."19
Non-compliance with the rule on substitution of a deceased party renders the
proceedings and judgment of the trial court infirm because the court acquired no
jurisdiction over the persons of the legal representatives or of the heirs on whom the
trial and the judgment would be binding. In other words, a party's right to due process
is at stake, as we enunciated in Vda. de Salazar v. Court of Appeals,20 thus —
"We should not lose sight of the principle underlying the general rule that formal
substitution of heirs must be effectuated for them to be bound by a subsequent
judgment. Such had been the general rule established not because the rule on
substitution of heirs and that on appointment of a legal representative are
jurisdictional requirements per se but because non-compliance therewith results in
the undeniable violation of the right to due process of those who, though not duly
notified of the proceedings, are substantially affected by the decision rendered
therein." (Emphasis supplied.)
In the instant case, it is true that the trial court, after receiving a notice of Glicerio's
death, failed to order the appearance of his legal representative or heirs. Instead, the
trial court issued an Order merely admitting respondents' motion for substitution.
There was no court order for Glicerio's legal representative to appear, nor did any
such legal representative ever appear in court to be substituted for Glicerio. Neither
did the respondents ever procure the appointment of such legal representative, nor
did Glicerio's heirs ever ask to be substituted for Glicerio. Clearly, the trial court failed
to observe the proper procedure in substituting Glicerio. As a result, contrary to the
Court of Appeals' decision, no valid substitution transpired in the present case.21
Thus, we rule that the proceedings and judgment of the trial court are void as to
Felicidad, Glicerio, Jr., Bener and Julito. There is no iota of proof that they were
apprised of the litigation against Glicerio. There is no indication that they authorized
Atty. Pardalis to represent them or any showing that they appeared in the
proceedings. Given these facts, the trial court clearly did not acquire jurisdiction over
their persons. Such being the case, these heirs cannot be bound by the judgment of
the trial court, as we have pronounced in Ferreria, et al. v. Vda. de Gonzales, et
al.,22thus —
"Inasmuch as Manolita Gonzales was never validly served a copy of the order granting
the substitution and that furthermore, a valid substitution was never effected,
consequently, the court never acquired jurisdiction over Manolita Gonzales for the
purpose of making her a party to the case and making the decision binding upon her,
either personally or as legal representative of the estate of her mother Manuela."
However, despite the trial court's failure to adhere to the rule on substitution of a
deceased party, its judgment remains valid and binding on the following heirs,
namely, Salvador, Concepcion and Ernesto. Formal substitution of heirs is not
necessary when the heirs themselves voluntarily appeared, shared in the case and
presented evidence in defense of deceased defendant.23 This is precisely because,
despite the court's non-compliance with the rule on substitution, the heirs' right to
due process was obviously not impaired.24 In other words, the purpose of the rule on
substitution of a deceased party was already achieved. The following facts indicate
plainly that there was active participation of these heirs in the defense of Glicerio after
his death.
First, Salvador and Concepcion were among the original defendants in the case.
Needless to state, the trial court, even before Glicerio's death, already acquired
jurisdiction over the persons of these heirs. Hence, the rule on substitution of a
deceased party is no longer required as to Salvador and Concepcion because they were
already impleaded as defendants. In fact, Salvador, a lawyer son of Glicerio, was also
one of the counsels for defendants.
Second, the lengthy testimonies of Salvador, Concepcion and Ernesto show that they
defended their deceased father. Both Concepcion and Salvador testified in defense not
only of themselves but also of their deceased father. As to Ernesto, while he was
dropped as a defendant, he testified and admitted that he was one of the substitutes of
Glicerio, thus —
"INTERPRETER: Please state your name and other personal circumstances.
WITNESS: ERNESTO BRIOSO, 45 years old, widower, farmer and residing
at Puro-Batia, Libmanan, Camarines Sur.
INTERPRETER: Your witness is now ready.
ATTY. PARDALIS: With the permission of the Honorable Court.
COURT: Proceed.
Q: Are you one of the defendants in this case who was substituted for the
late Glicerio R. Brioso?
A: Yes sir.
This shows that Ernesto understood that he was a substitute defendant in the case.
Third, Atty. Pardalis continued to represent Glicerio even after the latter's demise.
Acting on Glicerio's behalf, Atty. Pardalis presented the testimonies of Salvador,
Concepcion and Ernesto, to prove, among others, that Glicerio no longer had any
interest in the Properties. These pieces of evidence clearly negate petitioners'
contention that Atty. Pardalis ceased to be Glicerio's counsel upon the latter's death.
Assuming that Atty. Pardalis no longer represented Glicerio after his death, he
remained as counsel for Salvador, Concepcion and Marcos. He should have
questioned immediately the validity of the proceedings absent any formal substitution
of Glicerio. Yet, despite the court's alleged lack of jurisdiction over the persons of his
clients, Atty. Pardalis never bothered to challenge the same, not until after the trial
court rendered its adverse decision.
Lastly, Atty. Pardalis received a copy of respondents' motion for substitution and the
trial court's Order admitting the motion. Upon receipt of the motion and the Order,
Atty. Pardalis should have immediately opposed the same for failure to comply with
the rule on substitution. However, Atty. Pardalis did not question the motion and the
Order, not until after the trial court rendered its decision. His long silence, which
certainly binds his clients, can be construed as defendants' submission to the court's
jurisdiction. The acquiescence of defendants and their counsel on the trial court's
jurisdiction effectively precluded them from questioning the proceedings in the trial
court.
In Ferreria et al. v. Vda. de Gonzales, et al.,26 Manolita Gonzales (one of the heirs of
deceased defendant) was not served notice and, more importantly, never appeared in
court, unlike Salvador, Concepcion and Ernesto who appeared and even testified
regarding their father's interest in the Properties. In sum, with the active participation
of Salvador, Concepcion and Ernesto, the trial court acquired jurisdiction over their
persons. Accordingly, the proceedings and the decision of the trial court are valid with
respect to these heirs.
As regards Marcos Nolasco, he was impleaded as a defendant primarily because he
and Concepcion were among the actual possessors of the Properties. It was even
defendants' contention that the complaint was defective for failure to implead Marcos
as he was an indispensable party.27 Accordingly, the Spouses Mariano impleaded
Marcos as a defendant, without whom no final determination can be had of the
action.28 With Marcos' inclusion as a party, it is beyond dispute that the trial court
acquired jurisdiction over his person. Therefore, the proceedings and judgment of the
trial court are valid and binding upon Marcos.
WHEREFORE, the instant petition is partly GRANTED. The Decision of the Court
of Appeals dated September 2, 1997 is MODIFIED. As to Bener Brioso, Julito Brioso
and Glicerio Brioso, Jr., the Decision of the Regional Trial Court, Branch 29,
Libmanan, Camarines Sur, is void for lack of jurisdiction. As to Felicidad Brioso,
Concepcion B. Nolasco, Marcos Nolasco, Salvador Brioso and Ernesto Brioso, the
Decision of the Regional Trial Court, Branch 29, Libmanan, Camarines Sur, is valid.
SO ORDERED.
G.R. No. L-49475 September 28, 1993
JORGE C. PADERANGA, petitioner,
vs.
Hon. DIMALANES B. BUISSAN, Presiding Judge, Court of First Instance
of Zamboanga del Norte, Branch III and ELUMBA INDUSTRIES
COMPANY, represented by its General Manager, JOSE J.
ELUMBA, respondents.
BELLOSILLO, J.:
We are called upon in this case to determine the proper venue of an action to fix the period
of a contract of lease which, in the main, also prays for damages.
Sometime in 1973, petitioner JORGE C. PADERANGA and private respondent ELUMBA
INDUSTRIES COMPANY, a partnership represented by its General Manager JOSE J.
ELUMBA, entered into an oral contract of lease for the use of a commercial space within a
building owned by petition in Ozamiz City.1 The lease was for an indefinite period although
the rent of P150.00 per month was paid on a month-to-month basis. ELUMBA
INDUSTRIES COMPANY utilized the area under lease as the Sales Office of Allied Air
Freight in Ozamiz City.
On 4 April 1977, PADERANGA subdivided the leased premises into two (2) by constructing
a partition wall in between. He then took possession of the other half, which repossession
was said to have been undertaken with the acquiescence of the local manager of
ELUMBA,2 although private respondent maintains that this is not the case.3 At any rate,
the validity of the repossession is not here in issue.
On 18 July 1977, private respondent instituted an action for damages4 which, at the same
time, prayed for the fixing of the period of lease at five (5) years, before the then court of
First Instance of Zamboanga del Norte based in Dipolog City.5 Petitioner, a resident of
Ozamiz City, moved for its dismissal contending that the action was a real action which
should have been filed with the Court of First Instance of Misamis Occidental stationed in
Ozamiz City where the property in question was situated.
On 6 November 1978, respondent Judge Dimalanes B. Buissan denied the Motion to
Dismiss and held that Civil Case No. 2901 merely involved the enforcement of the contract
of lease, and while affecting a portion of real property, there was no question of ownership
raised.6 Hence, venue was properly laid.
Petitioner pleaded for reconsideration of the order denying his Motion to Dismiss. He
contended that while the action did not involve a question of ownership, it was
nevertheless seeking recovery of possession; thus, it was a real action which, consequently,
must be filed in Ozamiz City.7
On 4 December 1978, respondent judge denied reconsideration.8 While admitting that
Civil Case No. 2901 did pray for recovery of possession, he nonetheless ruled that this
matter was not the main issue at hand; neither was the question of ownership raised. Not
satisfied, petitioner instituted the present recourse.
PADERANGA argues that inasmuch as ELUMBA seeks to recover possession of the
portion surrendered to him by the local manager of private respondent, as well as to fix the
period of lease at five (5) years, Dipolog City could not be the proper venue of the action. it
being a real action, venue is laid in the court having jurisdiction over the territory in which
the property lies.
ELUMBA counters that the present action is chiefly for damages arising from an alleged
breach in the lease contract; hence, the issue of recovery of possession is merely incidental.
ELUMBA further argues that the action is one in personam and not in rem. Therefore
venue may be laid in the place where plaintiff or defendant resides at the option of
plaintiff.
Private respondent appears to be confused over the difference between personal and real
actions vis-a-vis actions in personam and in rem. The former determines venue; the latter,
the binding effect of a decision the court may render over the party, whether impleaded or
not.
In the case before us, it is indubitable that the action instituted by private respondent
against petitioner affects the parties alone, not the whole world. Hence, it is an action in
personam, i.e., any judgment therein is binding only upon the parties properly
impleaded.9 However, this does not automatically mean that the action for damages and to
fix the period of the lease contract is also a personal action. For, a personal action may not
at the same time be an action in rem. In Hernandez v. Rural Bank of Lucena, Inc., 10 we
held thus —
private respondent will be entitled to remain not only as lessee for another five (5) years
but also to the recovery of the portion earlier taken from him as well. This is because the
leased premises under the original contract was the whole commercial space itself and not
just the subdivided portion thereof.
While it may be that the instant complaint does not explicitly pray for recovery of
possession, such is the necessary consequence thereof. 13 The instant action therefore does
not operate to efface the fundamental and prime objective of the nature of the case which
is to recover the one-half portion repossessed by the lessor, herein petitioner. 14Indeed,
where the ultimate purpose of an action involves title to or seeks recovery of possession,
partition or condemnation of, or foreclosure of mortgage on, real property, 15 such an
action must be deemed a real action and must perforce be commenced and tried in the
province where the property or any part thereof lies.
Respondent judge, therefore, in denying petitioner's Motion to Dismiss gravely abused his
discretion amounting to lack or excess of jurisdiction.
WHEREFORE, the Petition for Prohibition is GRANTED. The Orders of 6 November 1978
and 4 December 1978 of respondent Judge Dimalanes B. Buissan are SET ASIDE. The
branch of the Regional Trial Court of Dipolog City where Civil Case No. 2901 may be
presently assigned is DIRECTED to DISMISS the case for improper venue. This decision is
immediately executory.
Costs against private respondent ELUMBA INDUSTRIES COMPANY.
SO ORDERED.

In a personal action, the plaintiff seeks the recovery of personal

property, the enforcement of a contract or the recovery of damages. In a
real action, the plaintiff seeks the recovery of real property, or, as
indicated in section 2(a) of Rule 4, a real action is an action affecting
title to real property or for the recovery of possession, or for partition or
condemnation of, or foreclosure of a mortgage on, real property.

An action in personam is an action against a person on the basis of his

personal liability, while an action in rem is an action against the thing
itself, instead of against the person. Hence, a real action may at the same
time be an action in personam and not necessarily an action in rem.

Consequently, the distinction between an action in personam and an action in rem for
purposes of determining venue is irrelevant. Instead, it is imperative to find out if the
action filed is a personal action or real action. After all, personal actions may be instituted
in the Regional Trial Court (then Court of First Instance) where the defendant or any of the
defendants resides or may be found, or where the plaintiff or any of the plaintiffs resides,
at the election of the plaintiff.11 On the other hand, real actions should be brought before
the Regional Trial Court having jurisdiction over the territory in which the subject
property or part thereof lies. 12

While the instant action is for damages arising from alleged breach of the lease contract, it
likewise prays for the fixing of the period of lease at five (5) years. If found meritorious,