G.R. No.

148090 November 28, 2006

STRONGHOLD INSURANCE COMPANY, INC., Petitioner,

vs. HONORABLE NEMESIO S. FELIX, in his capacity as Presiding Judge of Branch 56, Regional Trial Court, Makati City,
RICHARD C. JAMORA, Branch Clerk of Court, and EMERITA GARON, Respondents.

Before the Court is a petition for review1 assailing the 4 May 2001 Decision2 of the Court of Appeals in CA-G.R. SP No. 63334.

Emerita Garon ("Garon") filed an action for sum of money docketed as Civil Case No. 99-1051 against Project Movers Realty and
Development Corporation ("Project Movers") and Stronghold Insurance Company, Inc. ("Stronghold Insurance"). In an Order 3 dated 19
September 2000, the Regional Trial Court of Makati City, Branch 56 4 ("trial court") granted Garon’s motion for summary judgment. The
trial court rendered judgment in favor of Garon, as follows:

1. Defendant Project Movers Realty and Development Corporation is hereby directed to pay plaintiff as follows:

On Promissory Note No. PMRDC 97-12-332:

(A) The sum of PESOS: Six Million Eighty Eight Thousand Seven Hundred Eighty Three and 68/100 (₱6,088,783.68) under PMRDC-
97-12-332;

(B) Interest thereon at 36% per annum computed from 19 December 1997 until fully paid;

(C) A penalty of 3% per month computed from 03 November 1998 until full payment on all unpaid amounts consisting of the principal
and interest.

On Promissory Note No. PMRDC No. 97-12-333:

(A) The peso equivalent of the sum of DOLLARS: One Hundred Eighty Nine Thousand Four Hundred Eighteen and 75/100
(US$189,418.75) under PMRDC-97-12-333;

(B) Interest thereon at the stipulated rate of 17% per annum computed from 31 December 1997;

(C) A penalty of 3% per month computed from 03 November 1998 until full payment on all unpaid amounts consisting of the principal
and interest.

2. Defendant Stronghold Insurance Company, Inc. is hereby held jointly and solidarily liable to plaintiff Mrs. Garon in the amount of
PESOS: TWELVE MILLION SEVEN HUNDRED FIFTY FIVE THOUSAND ONE HUNDRED THIRTY NINE AND EIGHTY FIVE
CENTAVOS (₱12,755,139.85).

3. Defendants Project Movers Realty and Development Corporation and Stronghold Insurance Company, Inc. are also ordered to pay
plaintiff Mrs. Garon jointly and severally the sum of PESOS: TWO HUNDRED THOUSAND as attorney’s fees plus costs of suit.

All other claims and counter-claims of the parties are hereby ordered dismissed.

On 6 October 2000, Garon filed a motion for execution pending appeal. On 10 October 2000, Stronghold Insurance moved for the
reconsideration of the 19 September 2000 Order of the trial court.

In an Order6 dated 23 January 2001, the trial court denied Stronghold Insurance’s motion for reconsideration for lack of merit.

In an Order7 dated 8 February 2001, the trial court granted Garon’s motion for execution pending appeal. The trial court ordered Garon
to post a bond of ₱20 million to answer for any damage that Project Movers and Stronghold Insurance may sustain by reason of the
execution pending appeal. On 14 February 2001, Branch Clerk of Court Richard C. Jamora ("Jamora") issued a writ of execution
pending appeal.

On 16 February 2001, Stronghold Insurance filed a notice of appeal.

Stronghold Insurance also filed a petition for certiorari before the Court of Appeals to assail the trial court’s 8 February 2001 Order and
the writ of execution pending appeal. In its Resolution8 of 23 February 2001, the Court of Appeals enjoined the trial court, Jamora and
Garon from enforcing the 8 February 2001 Order. However, it turned out that notices of garnishment had been served before the Court
of Appeals issued the temporary restraining order (TRO). In its Order 9 dated 7 March 2001, the trial court denied Stronghold
Insurance’s Urgent Motion for the recall of the notices of garnishment.

The Ruling of the Court of Appeals

In its 4 May 2001 Decision, the Court of Appeals dismissed the petition of Stronghold Insurance and lifted the TRO it issued.

The Court of Appeals sustained the trial court in issuing the writ of execution pending appeal on the ground of illness of Garon’s
husband. Citing Articles 6810 and 19511 of the Family Code, the Court of Appeals held that while it was not Garon who was ill, Garon
needed the money to support her husband’s medical expenses and to support her family.

Stronghold Insurance alleged that its liability is limited only to ₱12,755,139.85 in accordance with its surety bond with Project Movers,
plus attorney’s fees of ₱200,000 as awarded by the trial court. However, the amount in the writ of execution pending appeal and notices
of garnishment is ₱56 million. Nevertheless, the Court of Appeals ruled that Stronghold Insurance failed to show that more than
₱12,755,139.85 had been garnished.
Hence, the petition before this Court.

In its Resolution12 dated 8 August 2001, this Court issued a TRO to restrain and enjoin the enforcement of the 8 February 2001 Order
and the writ of execution pending appeal until further orders from this Court.

The Issue The sole issue is whether there are good reasons to justify execution pending appeal.

The Ruling of This Court The petition has merit.

Requisites of Execution Pending Appeal

Execution pending appeal is governed by paragraph (a), Section 2, Rule 39 of the 1997 Rules of Civil Procedure ("Rules") which
provides:

SEC. 2. Discretionary execution. -

(a) Execution of a judgment or final order pending appeal. - On motion of the prevailing party with notice to the adverse party filed in the
trial court while it has jurisdiction over the case and is in possession of either the original record or the record on appeal, as the case
may be, at the time of the filing of such motion, said court may, in its discretion, order execution of a judgment or final order even before
the expiration of the period to appeal.

After the trial court has lost jurisdiction, the motion for execution pending appeal may be filed in the appellate court.

Discretionary execution may only issue upon good reasons to be stated in a special order after due hearing.

Execution pending appeal is an exception to the general rule. The Court explained the nature of execution pending appeal as follows:

Execution pending appeal is an extraordinary remedy, being more of the exception rather than the rule. This rule is strictly construed
against the movant because courts look with disfavor upon any attempt to execute a judgment which has not acquired finality. Such
execution affects the rights of the parties which are yet to be ascertained on appeal. 13

The requisites for the grant of an execution of a judgment pending appeal are the following:

(a) there must be a motion by the prevailing party with notice to the adverse party;

(b) there must be good reasons for execution pending appeal;

(c) the good reasons must be stated in the special order.14

As a discretionary execution, execution pending appeal is permissible only when good reasons exist for immediately executing the
judgment before finality or pending appeal or even before the expiration of the period to appeal. 15 Good reasons, special, important,
pressing reasons must exist to justify execution pending appeal; otherwise, instead of an instrument of solicitude and justice, it may well
become a tool of oppression and inequality.16 Good reasons consist of exceptional circumstances of such urgency as to outweigh the
injury or damage that the losing party may suffer should the appealed judgment be reversed later. 17

Existence of Good Grounds to Justify Execution Pending Appeal

In this case, Garon anchors the motion for execution pending appeal on the following grounds:

(a) any appeal which Project Movers and Stronghold Insurance may take from the summary judgment would be patently dilatory;

(b) the ill health of Garon’s spouse and the spouses’ urgent need for the funds owed to them by Project Movers and Stronghold
Insurance constitute good reasons for execution pending appeal; and

(c) Garon is ready and willing to post a bond to answer for any damage Project Movers and Stronghold Insurance may suffer should the
trial court’s decision be reversed on appeal.18

In granting the motion for execution pending appeal, the trial court ruled:

A perusal of [t]he records of the instant case will sustain plaintiff’s claim that defendants raised no valid or meritorious defenses against
the claims of plaintiff. The Court notes with interest the fact that defendants admitted the genuineness and due execution of the
Promissory Notes and Surety Agreement sued upon in this case.

The instant case simply turns on the issues of (i) whether or not there was a valid, due and demandable obligation and (ii) whether or
not the obligation had been extinguished in the manner provided for under our laws. The Answers of defendants contained admissions
that the obligation was valid and subsisting and that the same was due and unpaid. Founded as it is on Promissory Notes and Surety
Agreements, the authenticity and due execution of which had been admitted, the Court is convinced that plaintiff is entitled to a
judgment in her favor and that any appeal therefrom will obviously be a ploy to delay the proceedings (See Home Insurance Company
vs. Court of Appeals, 184 SCRA 318).

The second ground relied upon by plaintiff is also impressed with merit. In Ma-ao Sugar Central vs. Canete, 19 SCRA 646, the
Supreme Court held that the movant was entitled to execution pending appeal of an award of compensation, ruling that his ill health and
urgent need for the funds so awarded were considered "good reasons" to justify execution pending appeal (See also De Leon vs.
Soriano, 95 Phil. 806).
It is established that plaintiff’s spouse, Mr. Robert Garon, suffers from coronary artery disease, benign Prostatic Hyperplasia and
hyperlipidemia. He is undergoing continuous treatment for the foregoing ailments and has been constrained to make serious lifestyle
changes, that he can no longer actively earn a living. As shown in plaintiff’s verified motion, she has urgent need of the funds owed to
her by defendants in order to answer for her husband’s medical expenses and for the day-to-day support of the family considering her
husband’s ill health. The Court therefore finds and holds that there exists good reasons warranting an execution pending appeal.19

The trial court ruled that an appeal from its 19 September 2000 Order is only a ploy to delay the proceedings of the case. However, the
authority to determine whether an appeal is dilatory lies with the appellate court.20 The trial court’s assumption that the appeal is dilatory
prematurely judges the merits of the main case on appeal.21 Thus:

Well-settled is the rule that it is not for the trial court to determine the merit of a decision it rendered as this is the role of the appellate
Court. Hence, it is not within the competence of the trial court, in resolving the motion for execution pending appeal, to rule that the
appeal is patently dilatory and to rely on the same as the basis for finding good reason to grant the motion. 22

In a Decision23 promulgated on 7 May 2004 in CA-G.R. CV No. 69962 entitled "Emerita Garon v. Project Movers Realty and
Development Corporation, et al.," the Court of Appeals sustained the trial court in rendering the summary judgment in Civil Case No.
99-1051. However, the Court of Appeals ruled that Stronghold Insurance could not be held solidarily liable with Project Movers. The
Court of Appeals ruled that the surety bond between Project Movers and Stronghold Insurance expired on 7 November 1998 before the
maturity of Project Movers’ loans on 17 December 1998 and 31 December 1998, respectively. Hence, when the loans matured, the
liability of Stronghold Insurance had long ceased. The Court of Appeals affirmed the trial court’s 19 September 2000 Order with
modification by ruling that Stronghold Insurance is not liable to Garon.

The 7 May 2004 Decision of the Court of Appeals is not yet final. It is the subject of a petition for review filed by Garon before this Court.
The case, docketed as G.R. No. 166058, is still pending with this Court. While this Court may either affirm or reverse the 7 May 2004
Decision of the Court of Appeals, the fact that the Court of Appeals absolved Stronghold Insurance from liability to Garon shows that
the appeal from the 19 September 2000 Order is not dilatory on the part of Stronghold Insurance.

We agree with Stronghold Insurance that Garon failed to present good reasons to justify execution pending appeal. The situations in
the cases cited by the trial court are not similar to this case. In Ma-Ao Sugar Central Co., Inc. v. Cañete,24 Cañete filed an action for
compensation for his illness. The Workmen’s Compensation Commission found the illness compensable. Considering Cañete’s
physical condition and the Court’s finding that he was in constant danger of death, the Court allowed execution pending appeal. In De
Leon, et al. v. Soriano, et al.,25 De Leon, et al. defaulted on an agreement that was peculiarly personal to Asuncion. The agreement was
valid only during Asuncion’s lifetime. The Court considered that Soriano’s health was delicate and she was 75 years old at that time.
Hence, execution pending appeal was justified. In this case, it was not Garon, but her husband, who was ill.

The posting of a bond, standing alone and absent the good reasons required under Section 2, Rule 39 of the Rules, is not enough to
allow execution pending appeal. The mere filing of a bond by a successful party is not a good reason to justify execution pending
appeal as a combination of circumstances is the dominant consideration which impels the grant of immediate execution. 26 The bond is
only an additional factor for the protection of the defendant’s creditor. 27

The exercise of the power to grant or deny a motion for execution pending appeal is addressed to the sound discretion of the trial
court.28 However, the existence of good reasons is indispensable to the grant of execution pending appeal. 29 Here, Garon failed to
advance good reasons that would justify the execution pending appeal.

Execution Pending Appeal against Stronghold Insurance Exceeds its Liability under the Trial Court’s Order

The dispositive portion of the trial court’s 19 September 2000 Order states:

WHEREFORE, premises considered[,] this Court hereby renders judgment in favor of the plaintiff Mrs. Emerita I. Garon as follows:

2. Defendant Stronghold Insurance Company, Inc. is hereby held jointly and solidarily liable to plaintiff Mrs. Garon in the amount of
PESOS: TWELVE MILLION SEVEN HUNDRED FIFTY FIVE THOUSAND ONE HUNDRED THIRTY NINE AND EIGHTY FIVE
CENTAVOS (₱12,755,139.85).

3. Defendants Project Movers Realty and Development Corporation and Stronghold Insurance Company, Inc. are also ordered to pay
plaintiff Mrs. Garon jointly and severally the sum of PESOS: TWO HUNDRED THOUSAND as attorney’s fees plus costs of suit.

The writ of execution pending appeal issued against Project Movers and Stronghold Insurance is for ₱56 million. 31 However, the Court
of Appeals ruled that Stronghold Insurance failed to show that more than ₱12,755,139.85 had been garnished. The ruling of the Court
of Appeals unduly burdens Stronghold Insurance because the amount garnished could exceed its liability. It gives the sheriff the
discretion to garnish more than ₱12,755,139.85 from the accounts of Stronghold Insurance. The amount for garnishment is no longer
ministerial on the part of the sheriff. This is not allowed. Thus:

Leaving to the Sheriff, as held by the Court of Appeals, the determination of the exact amount due under the Writ would be tantamount
to vesting such officer with judicial powers. He would have to receive evidence to determine the exact amount owing. In his hands
would be placed a broad discretion that can only lead to delay and open the door to possible abuse. The orderly administration of
justice requires that the amount on execution be determined judicially and the duties of the Sheriff confined to purely ministerial ones.32

WHEREFORE, we SET ASIDE the 4 May 2001 Decision of the Court of Appeals in CA-G.R. SP No. 63334. We also SET ASIDE the 8
February 2001 Order of the Regional Trial Court of Makati City, Branch 56 and the writ of execution pending appeal issued on 14
February 2001. We make permanent the temporary restraining order we issued on 8 August 2001.

G.R. No. 132592 January 23, 2002

AIDA P. BAÑEZ, petitioner, vs. GABRIEL B. BAÑEZ, respondent.

G.R. No. 133628 AIDA P. BAÑEZ, petitioner, vs. GABRIEL B. BAÑEZ, respondent.

These two petitions stem from the decision1 dated September 23, 1996 of the Regional Trial Court of Cebu, Branch 20, in Civil Case
No. CEB-16765. The first2 seeks the reversal of the Court of Appeals’ decision dated March 21, 1997, setting aside the orders dated
October 1 and November 22, 1996 of the Regional Trial Court. The second 3 prays for the reversal of the resolution dated February 10,
1998, of the Court of Appeals in CA-G.R. No. CV-56265, denying the motion to dismiss.

On September 23, 1996, the Regional Trial Court of Cebu, Branch 20, decided Civil Case No. CEB-16765, decreeing among others the
legal separation between petitioner Aida Bañez and respondent Gabriel Bañez on the ground of the latter’s sexual infidelity; the
dissolution of their conjugal property relations and the division of the net conjugal assets; the forfeiture of respondent’s one-half share in
the net conjugal assets in favor of the common children; the payment to petitioner’s counsel of the sum of ₱100,000 as attorney’s fees
to be taken from petitioner’s share in the net assets; and the surrender by respondent of the use and possession of a Mazda motor
vehicle and the smaller residential house located at Maria Luisa Estate Park Subdivision to petitioner and the common children within
15 days from receipt of the decision.

Thereafter, petitioner filed an urgent ex-parte motion to modify said decision, while respondent filed a Notice of Appeal.

The trial court granted petitioner Aida Banez’ urgent ex-parte motion to modify the decision on October 1, 1996 by approving the
Commitment of Fees dated December 22, 1994; obliging petitioner to pay as attorney’s fees the equivalent of 5% of the total value of
respondent’s ideal share in the net conjugal assets; and ordering the administrator to pay petitioner’s counsel, Atty. Adelino B. Sitoy,
the sum of ₱100,000 as advance attorney’s fees chargeable against the aforecited 5%. 4

In another motion to modify the decision, petitioner Aida Bañez sought moral and exemplary damages, as well as litigation expenses.
On October 9, 1996, she filed a motion for execution pending appeal. Respondent Gabriel Bañez filed a consolidated written opposition
to the two motions, and also prayed for the reconsideration of the October 1, 1996 order.

On November 22, 1996, the trial court denied Aida’s motion for moral and exemplary damages and litigation expenses but gave due
course to the execution pending appeal. Thus:

WHEREFORE, in view of all the foregoing premises, the petitioner’s motion to modify decision is hereby ordered denied. But,
petitioner’s motion for execution of decision pending appeal is hereby granted. Consequently, let a writ of execution be issued in this
case to enforce the decision for (1) respondent to vacate the premises of the small residential house situated in Maria Luisa Estate Park
Subdivision, Lahug, Cebu City and for (2) respondent to surrender the use and possession of said Mazda motor vehicle together with
its keys and accessories thereof to petitioner.

Atty. Edgar Gica, the Special Administrator, appointed in this case, is hereby ordered to make the necessary computation of the value
of the one-half (1/2) share of petitioner in the net remaining conjugal assets of the spouses within 10 days from receipt of this order.

The petitioner is hereby ordered to post a bond in the amount of P1,500,000.00 to answer for all the damages that respondent may
suffer arising from the issuance of said writ of execution pending appeal and to further answer for all the advances that petitioner may
have received from the Special Administrator in this case pending final termination of this present case. 5

In turn, in a petition for certiorari, Gabriel Bañez elevated the case to the Court of Appeals. On March 21, 1997, the appellate court
rendered its decision, thus:

WHEREFORE, the Order dated October 1, 1996 and the Omnibus Order dated November 22, 1996, insofar as (1) it authorized the
release of the sum of P100,000.00 to private respondent’s counsel as the advanced share of private respondent [Aida Bañez] in the net
remaining conjugal assets, and (2) granted the motion for execution pending appeal by ordering petitioner [Gabriel Bañez] to vacate the
premises of the small residential house situated in Maria Luisa Estate Park Subdivision, Lahug, Cebu City, and to surrender the use
and possession of the Mazda Motor vehicle to private respondent are hereby SET ASIDE. The writ of execution dated December 2,
1996 and the Order dated December 10, 1996 granting the motion filed by the sheriff to make symbolic delivery of the subject house
and motor vehicle to the administrator of the partnership are also SET ASIDE.

As prayed for by petitioner, the Administrator of the conjugal partnership is hereby ordered to cause the reimbursement by counsel for
the private respondent [Aida Bañez] of the amount of P100,000.00 released to him as advance payment of attorney’s fees.

On February 10, 1998, the Court of Appeals denied Aida’s motion for reconsideration. Hence, the petition in G.R. No. 132592, filed by
herein petitioner.

In the meantime, the trial court gave due course to Gabriel’s Notice of Appeal and elevated on April 15, 1997 the entire case records to
the Court of Appeals. Aida filed with the Court of Appeals a motion to dismiss the appeal on the ground that Gabriel had failed to file
with the appellate court a Record on Appeal. On February 10, 1998, the Court of Appeals decided the motion, thus:

WHEREFORE, premises considered, the petitioner–appellant’s motion to dismiss filed on November 3, 1997 is hereby DENIED. The
appointment of the petitioner-appellee as administratix of the conjugal properties is hereby AFFIRMED.

In view of petitioner’s Motion to Withdraw her own appeal filed on November 27, 1997, and for failing to pay the required docket fee
within the prescribed period under Rule 41, Section 4 of the 1997 Rules of Civil Procedure, the appeal instituted by the petitioner Aida
P. Bañez is hereby DISMISSED.

In continuance of the appeal of respondent-appellant [Gabriel Bañez], he is hereby ordered to file his brief with the court within 45 days
from receipt of this resolution. The petitioner-appellee [Aida Bañez] shall file her own brief with the court within 45 days from receipt of
the petitioner-appellant’s [Gabriel Bañez] brief.

The appellate court also denied herein petitioner’s motion for reconsideration, hence, the petition in G.R. No. 133628.
On January 19, 2000, we consolidated the two petitions.1avvphi1 Petitioner Aida Bañez now avers that the Court of Appeals erred:

I. G.R. No. 132592 ... IN SETTING ASIDE THE GRANT OF EXECUTION PENDING APPEAL BY THE TRIAL COURT OF THE
PORTIONS OF ITS DECISION ORDERING RESPONDENT TO VACATE THE SMALLER RESIDENTIAL HOUSE LOCATED AT THE
MARIA LUISA ESTATE PARK SUBDIVISION, CEBU CITY, AND TO PAY P100,000.00 TO PETITIONER’S COUNSEL AS
ATTORNEY’S FEES TO BE TAKEN FROM HER SHARE IN THE NET CONJUGAL ASSETS.8

II. G.R. No. 133628: ... IN NOT GRANTING PETITIONER’S MOTION TO DISMISS RESPONDENT’S ORDINARY APPEAL AND/OR
NOT RETURNING THE RECORDS OF CIVIL CASE NO. CEB-16765 TO THE REGIONAL TRIAL COURT OF CEBU.9

In G.R. No. 132592, petitioner manifested that she no longer questions the Court of Appeals’ decision on the Mazda vehicle because
respondent repossessed it. As to the residential house, she claimed that being conjugal in nature, justice requires that she and her
children be allowed to occupy and enjoy the house considering that during the entire proceedings before the trial court, she did not
have the chance to occupy it. Further, she posted a bond of ₱1,500,000 for the damages which respondent may suffer. 10 For these
reasons, she asked for execution pending appeal. The amount of ₱100,000 as advance payment to her counsel was a "drop in the
bucket" compared to the bond she posted, according to her. She also suggested as an alternative that she simply be required to put up
an additional bond. She also agreed to submit to an accounting as regular administratrix and the advance attorney’s fees be charged to
her share in the net conjugal assets.

In his comment, respondent denied petitioner’s allegation that she did not have the chance to occupy the residential house. He averred
that she could have, had she chosen to. According to him, as the inventory of the couple’s properties showed, petitioner owned two
houses and lots and two motor vehicles in the United States, where she is a permanent resident. Respondent contended that there was
no compelling reason for petitioner to have the judgment executed pending appeal.

Essentially, the core issue in G.R. No. 132592 is whether execution of judgment pending appeal was justified.

As held in Echaus vs. Court of Appeals, 199 SCRA 381, 386 (1991), execution pending appeal is allowed when superior circumstances
demanding urgency outweigh the damages that may result from the issuance of the writ. Otherwise, instead of being an instrument of
solicitude and justice, the writ may well become a tool of oppression and inequity. 11

In this case, considering the reasons cited by petitioner, we are of the view that there is no superior or urgent circumstance that
outweighs the damage which respondent would suffer if he were ordered to vacate the house. We note that petitioner did not refute
respondent’s allegations that she did not intend to use said house, and that she has two (2) other houses in the United States where
she is a permanent resident, while he had none at all. Merely putting up a bond is not sufficient reason to justify her plea for execution
pending appeal. To do so would make execution routinary, the rule rather than the exception.12

Similarly, we are not persuaded that the ₱100,000 advance payment to petitioner’s counsel was properly granted. We see no
justification to pre-empt the judgment by the Court of Appeals concerning said amount of ₱100,000 at the time that the trial court’s
judgment was already on appeal.

In G.R. No. 133628, petitioner Aida Bañez contends that an action for legal separation is among the cases where multiple appeals may
be taken. According to her, the filing of a record on appeal, pursuant to Section 2(a), Rule 41 of the Rules of Court, 13 is required in this
case. She concludes that respondent’s appeal should have been dismissed for his failure to file the record on appeal within the
reglementary period, as provided under Section 1-b, Rule 50 of the Rules of Court.14

Petitioner likewise prays that, in the event that we do not dismiss Gabriel Bañez’ appeal, we should direct the appellate court to return
the records of the case to the RTC of Cebu. Thereafter, according to her, respondent should file his record on appeal for approval and
transmittal to the Court of Appeals. In the alternative, she prays that the appellate court retain only the pleadings and evidence
necessary to resolve respondent’s appeal pursuant to Section 6, Rule 4415 and Section 6, Rule 13516 of the Rules of Court, and return
the rest of the case records to the RTC.

In turn, respondent argues that Section 39 of B.P. 129 17 expressly abolished the requirement of a record on appeal, except in appeals
in special proceedings in accordance with Rule 109, 18 and other cases wherein multiple appeals are allowed. An action for legal
separation, he avers, is neither a special proceeding nor one where multiple appeals are allowed.

Now, is an action for legal separation one where multiple appeals are allowed? We do not think so.

In Roman Catholic Archbishop of Manila v. Court of Appeals, 258 SCRA 186, 194 (1996), this Court held:

Multiple appeals are allowed in special proceedings, in actions for recovery of property with accounting, in actions for partition of
property with accounting, in the special civil actions of eminent domain and foreclosure of mortgage. The rationale behind allowing
more than one appeal in the same case is to enable the rest of the case to proceed in the event that a separate and distinct issue is
resolved by the court and held to be final.

In said case, the two issues raised by therein petitioner that may allegedly be the subject of multiple appeals arose from the same
cause of action, and the subject matter pertains to the same lessor-lessee relationship between the parties. Hence, splitting the appeals
in that case would only be violative of the rule against multiplicity of appeals.

The same holds true in an action for legal separation.1âwphi1 The issues involved in the case will necessarily relate to the same marital
relationship between the parties. The effects of legal separation, such as entitlement to live separately, dissolution and liquidation of the
absolute community or conjugal partnership, and custody of the minor children, follow from the decree of legal separation. 19 They are
not separate or distinct matters that may be resolved by the court and become final prior to or apart from the decree of legal separation.
Rather, they are mere incidents of legal separation.20 Thus, they may not be subject to multiple appeals.

Petitioner’s alternative prayers that in case we do not dismiss the appeal, we return the records to the trial court and require respondent
to file a record on appeal, or we return the records to the trial court and retain only the pleadings and orders relevant to the appeal, are
untenable. If we grant the first, we are effectively saying that the instant case is one involving multiple appeals, which it is not. If we
allow the second, we are effectively applying by analogy, Section 6, Rule 44 and Section 6, Rule 135 of the Rules of Court, without
petitioner showing support therefor in law or jurisprudence.21

WHEREFORE, the instant petitions are DENIED for lack of merit. The decision and resolution of the Court of Appeals in CA-G.R. SP
No. 42663 and CA-G.R. No. CV-56265, respectively, are hereby AFFIRMED, so that the Order dated October 1, 1996, of the Regional
Trial Court authorizing the release of ₱100,000 to petitioner’s counsel; the Omnibus Order dated November 22, 1996 granting the
motion pending appeal; the writ of execution dated December 2, 1996; and the Order dated December 10, 1996 granting the motion by
the sheriff to make symbolic delivery of the house and vehicle are SET ASIDE. Further, the Administrator of the conjugal partnership is
ORDERED to cause the reimbursement by petitioner’s counsel of the released amount of ₱100,000. The Court of Appeals is hereby
DIRECTED to give due course to respondent’s appeal, and the Division Clerk of Court of this Court is likewise DIRECTED to promptly
remand the record of these cases to the Court of Appeals.

A.M. No. P-02-1535 March 28, 2003

FERNANDO FAJARDO, complainant,

vs. SHERIFF RODOLFO V. QUITALIG, Municipal Trial Court in Cities, San Carlos City, Pangasinan, respondent.

As frontline officials of the justice system, sheriffs must always strive to maintain public trust in the performance of their duties. Hence,
they must see to it that the final stage in the litigation process is completed without unnecessary delay.

In a Sworn Complaint1 dated April 11, 2000, Sheriff Rodolfo V. Quitalig of the Municipal Trial Court in Cities (MTCC) of San Carlos City
was charged by Reverend Fernando Fajardo with conduct prejudicial to the best interest of the service and/or dereliction of duty.

"Complainant, who is one of the plaintiffs in [Civil Case No. MTCC-2266 entitled ‘Spouses Fernando Fajardo and Evangeline Perez vs.
Maria Datuin], alleged that the complaint for ejectment which they filed on July 17, 1997 was finally decided on July 29, 1999 against
the defendant. The decision was appealed to the Regional Trial Court but it was dismissed on November 29, 1999, and the decision
became final and executory. His lawyer filed a Motion for Execution, and on March 7, 2000, the Court issued a Writ of Execution which
was brought by the respondent Sheriff to the defendant Maria Datuin on March 9, 2000.

"Complainant claimed that after the Writ of Execution was served, defendant asked for a period of two (2) weeks for her to remove her
personal properties on the land. After two (2) weeks he went to Sheriff Quitalig so that the Writ of Execution may be implemented but
he was told that a restraining order was issued, but when he asked for it, the respondent told him that he left it in the office.

"Complainant stated that on March 24, 2000, he and his lawyer went to the court to verify whether a restraining order has really been
issued but they found out that there was none; so he told the respondent to implement the Writ of Execution. Respondent,
accompanied by a policeman and the barangay captain went to the place where the Writ of Execution is to be implemented at 10:00
that morning but when they reached the place, respondent did not do anything except to ask the defendant to bring out her personal
properties. His reason is that an employee of the Probation Office, Mr. Leonardo Martinez, talked to him. At 5:30 p.m., the restraining
order was brought to the place, and the respondent told him that the writ of execution can no longer be implemented.

"Complainant asserted that respondent favored, or showed partiality in favor of the defendant to his prejudice." 2

In his Comment3 dated October 3, 2000, respondent denied the charge. He asked for the dismissal of the case, because he had
already implemented the Writ on August 24, 2000 as evidenced by his August 25, 2000 Report of Service. 4 He also pointed out that he
had made an inventory of the personal properties recovered from the subject premises. That he had done so was attested to by
defendant’s mother, Rufina Datuin, and witnessed by the barangay captain and two councilors.

The OCA’s Finding and Recommendation -In its October 29, 2001 Report,5 the OCA found respondent to have been negligent in the
performance of his duty as a sheriff. It said thus:

"Respondent was negligent in the performance of his duty as sheriff. The Writ of Execution was issued on March 7, 2000, and was
served on the judgment obligor on March 9, 2000. Respondent admitted that the judgment obligor promised to vacate the premises on
March 29, 2000, but he was not able to implement the Writ of Execution because on March 24, 2000, RTC, Branch 56, San Carlos,
Pangasinan issued a Temporary Restraining Order. The Temporary Restraining Order did not ripen into an injunction so it lapsed after
twenty (20) days from the date it was issued, but the Writ of Execution was implemented only [on] August 24, 2000 which is more than
four (4) months from the date the restraining order lapsed. It is the duty of the sheriff to enforce a writ of execution without delay once it
is given to him unless restrained.

"The Writ of Execution was finally and/or implemented only on August 24, 2000, as shown in the Report submitted by the respondent in
court. Complainant claimed that the respondent was reluctant to implement the Writ of Execution because a certain Leonardo Martinez
intervened. This allegation of the complainant was not denied by the respondent in his Comment. Respondent just stated in his
Comment that he implemented the Writ of Execution on August 24, 2000, and made inventory of the personal properties pulled out form
the building and signed by defendant’s mother and Barangay Captain Nestor Poquiz. Respondent’s deliberate refusal to traverse or
refute the charges is an admission that the allegations are true and he cannot deny them."6 (Citation omitted)

The OCA recommended that respondent be ordered to pay a fine of P5,000 and warned that a repetition of the same or a similar
offense would be dealt with more severely.7

This Court’s Ruling - We agree with the OCA’s findings and recommendation.

Respondent’s Administrative Liability As frontline officials of the justice system, sheriffs must always strive to maintain public trust in
the performance of their duties. Having the forsworn duty to uphold the majesty of the law, they must see to it that the final stage in the
litigation process is carried out without unnecessary delay. 8

A review of the records of this case reveals that respondent enforced the Writ of Execution dated March 7, 2000 only on August 24,
2000, as shown by his August 25, 2000 Report of Service. Within 30 days from receipt thereof and every 30 days thereafter until the
judgment is fully satisfied, a sheriff is required by the Rules of Court to render a report on the action taken on a writ of execution.
Section 14 of Rule 39 of the Rules provides the manner in which the execution is to be implemented, as follows:

"SEC. 14. Return of Writ of Execution. The writ of execution shall be returnable to the court issuing it immediately after the judgment
has been satisfied in part or in full. If the judgment cannot be satisfied in full within thirty days (30) days after his receipt of the writ, the
officer shall report to the court and state the reason therefore. Such writ shall continue in effect during the period within which the
judgment may be enforced by motion. The officer shall make a report to the court every thirty (30) days on the proceedings taken
thereon until the judgment is satisfied in full, or its effectivity expires. The returns or periodic reports shall set forth the whole of the
proceedings taken, and shall be filed with the court and copies thereof promptly furnished the parties."

Evidently, respondent was not only remiss in his implementation of the Writ, but likewise derelict in his submission of the returns
thereof.

Respondent should have immediately implemented and made a return of the Writ after duly serving it upon the defendant on March 9,
2000. Nonetheless, because of the request of the defendant and her promise that she would vacate the premises on March 23, 2000,
he allowed her to remain there. However, when he came back on March 24, 2000, he was unable to enforce the Writ because of a TRO
issued by the RTC of San Carlos, Pangasinan. He averred that he was finally able to execute the Writ on August 24, 2000 and to
submit his Return thereof on the next day.

We find respondent’s explanation to be utterly wanting. He is guilty of dereliction of his duty as a sheriff, because he failed to (1)
execute the Writ within 30 days from his receipt thereof, (2) submit his Report of Service within the same period, (3) make periodic
reports to the MTCC until the judgment was fully satisfied, and (4) furnish the parties with copies of the Reports.

By his own words, respondent admitted his dereliction of duty. First, as we have said earlier, he should have immediately executed the
Writ when he served it upon the defendant on March 9, 2000.

Second, he should have immediately reported to the MTCC that he was unable to enforce the Writ because another court had issued a
TRO enjoining him from doing so. Third, he should have informed the parties, particularly the plaintiff or his counsel, about his inability
to enforce the Writ. Fourth, he should have immediately enforced it twenty days after its issuance.

Fifth, he should have made periodic Reports to the MTCC until the judgment was fully satisfied and the parties furnished a copy thereof.
Sixth, within thirty days from his receipt of the Writ, he should have promptly made his Return, a copy of which he should have
immediately furnished the parties.

Clearly, the actuations of respondent constitute disrespect, if not outright defiance, of the MTCC’s authority. In the absence of
instructions to the contrary, a sheriff has the duty to execute a Writ with reasonable celerity and promptness in accordance with its
mandate.

In several cases,9 the Court has said that the failure to make a return of a writ within the required period is nonfeasance. In Bautista v.
De Castro,10 the provincial sheriff of Zambales and his deputy were suspended without pay for 30 and 15 days, respectively, for
dereliction of duty. In Barola v. Abogatal,11 a sheriff who had received a writ of execution on January 15, 1978, but made a return
thereof only on May 22, 1978, was fined a month’s salary. In Lapeña v. Pamarang,12 a sheriff whose Return was four days late was
fined P2,000.

Casal v. Concepcion Jr.13 ordered the dismissal of respondent sheriff from the service and the forfeiture of all his benefits, with
prejudice to his reemployment in any branch or service of the government including government-owned and controlled corporations.
After the lapse of two years from the issuance of the original Writ in a simple ejectment case, he not only failed to exert reasonable
efforts to fully implement its subsequent issuances, but likewise failed to account for the amounts he got from complainant.
Furthermore, he abandoned his work during the time that the charges against him were being investigated.

In Concerned Citizen v. Torio,14 the respondent therein was suspended for a year without pay when he failed to act promptly on the
Writs of Execution issued from 1998-2001. And in Lumbre v. Dela Cruz,15 respondent, after being found guilty of an inexcusable seven-
month delay in carrying out a lawful Writ of Execution was fined P5,000. Justifying the penalty, the Court said:

"When a writ of execution is placed in the hands of a sheriff, it is his duty, in the absence of contrary instructions, to have it implemented
forthwith. The sheriff is primarily responsible for the speedy and efficient service of all court processes and writs originating from the
court and its branches, including such as may be properly delegated to him by other courts. The delay of more than seven months, from
the time the writ of execution was issued by the court on 07 August 1998 to the time when respondent sheriff posted the notice of sale
or levy on 23 March 1999, is an inordinately long period for respondent to act thereon. The importance of the role played by all court
personnel in the administration of justice is never to be taken lightly. It is the sheriffs particularly who are depended on, and who must
properly attend to, the proper implementation of court decrees and orders, and they are expected to do so with utmost diligence and
dispatch. WHEREFORE, Sheriff Rodolfo V. Quitalig is found guilty of dereliction of duty and is ordered to pay a FINE of five thousand
pesos (P5,000). Considering that he has already retired from the service, this amount is hereby ordered deducted from his retirement
benefits.

G.R. No. 136726. September 24, 2003

PANFILO V. VILLARUEL, JR., petitioner, vs. REYNALDO D. FERNANDO, MODESTO ABARCA, JR. and MARILOU M. CLEOFAS,
respondents.

This petition for review on certiorarii seeks to reverse the Decisionii of the Court of Appeals in CA-G.R. SP No. 48233iii dated 30
September 1998 denying due course to the petition for certiorariiv filed by Panfilo V. Villaruel, Jr. and the Resolution dated 3 December
1998 denying the motion for reconsideration.

Petitioner Panfilo V. Villaruel, Jr. (petitioner) is the former Assistant Secretary of the Air Transportation Office (ATO), Department of
Transportation and Communication (DOTC). Respondents Reynaldo D. Fernando, Modesto E. Abarca, Jr. (Abarca), and Marilou M.
Cleofas are the Chief, Chief Administrative Assistant, and Administrative Assistant, respectively, of the Civil Aviation Training Center
(CATC). The CATC is an adjunct agency of the ATO tasked to train air traffic controllers, airway communicators and related civil aviation
personnel for the local aviation industry as well as for the Southeast Asian and Pacific region.
 Petitioner issued a memorandum dated 27 April 1995 addressed to the respondents, detailing them to the Office of DOTC
Undersecretary Primitivo C. Cal effective 2 May 1995.
On 29 April 1995, respondents wrote to DOTC Secretary Jesus B. Garcia and Undersecretary Josefina T. Lichauco through
petitioner requesting for reconsideration of the detail order.
On 7 May 1995, in compliance with the detail order, respondents reported to the Office of Undersecretary Cal at DOTC.
Without acting on respondents request for reconsideration, petitioner issued a memorandum on 19 July 1995 addressed to Abarca
placing him under preventive suspension for 90 days without pay pending investigation for alleged grave misconduct.
On 10 August 1995, respondents requested Secretary Garcia to lift the detail order and to order their return to their mother unit
since more than 90 days had already lapsed. Respondents also sought the intervention of the Ombudsman in their case. As a result, the
Ombudsman inquired from Secretary Garcia the action taken on respondents request for reconsideration of the detail order.
On 22 November 1995, Secretary Garcia replied to the Ombudsman that he had issued a memorandum dated 9 November 1995
directing petitioner to recall respondents to their mother unit. Secretary Garcia declared that the law does not sanction the continuous
detail of respondents.
Despite repeated demands by respondents, petitioner failed and refused to reinstate respondents to their mother unit.
On 24 January 1996, respondents filed a Petition for Mandamus and Damages with Prayer for a Preliminary Mandatory Injunction
against petitioner with the Regional Trial Court of Pasay City docketed as Civil Case No. 96-0139. Respondents prayed for the following:
PRAYER
WHEREFORE, premises considered, petitioners herein respectfully pray of this Honorable Court that:
1. Pending the determination of the merits of this petition, a writ of preliminary mandatory injunction be issued ex-parte
directing respondent Panfilo V. Villaruel, Jr., to recall the petitioners herein within twenty four (24) hours from receipt hereof to their
mother unit, the Civil Aviation Training Center, Air Transportation Office, DOTC, and to forthwith allow them to assume, perform and
discharge the functions, duties and responsibilities inherent, appurtenant and incident to their respective offices.
2. After hearing on the merits, judgment be rendered confirming the writ of preliminary mandatory injunction earlier issued by
this Honorable Court and declaring the same permanent, and ordering the respondent Panfilo Villaruel, Jr., to pay petitioners herein
the following damages, to wit:
a) to pay petitioner Reynaldo D. Fernando the amount of P50,000 as actual and compensatory damages;
b) to pay petitioners herein moral, exemplary and temperate damages, in such amounts as may hereafter be proven
in the course of trial, which petitioners herein are leaving to the sound discretion of this Honorable Court to determine and adjudge;
c) to pay petitioners herein attorneys fees in the amount of P100,000;
d) to pay petitioners herein the costs of suit.
Petitioners herein pray for such other and further relief as may be just and equitable in the premises. v
On 23 February 1996, the trial court granted respondents prayer for a preliminary mandatory injunction.
Meanwhile, Judge Aurora Navarette-Recia of the trial court was appointed Chairman of the Commission on Human Rights.
Consequently, the case was re-raffled and assigned to Branch 231 of the Regional Trial Court, Pasay City.vi
On 12 April 1996, the trial court issued an order modifying the 23 February 1996 order of Judge Recia. The trial court issued a writ
of preliminary mandatory injunction ordering petitioner to comply with the 9 November 1995 order of Secretary Garcia directing petitioner
to recall respondents to their mother unit until further orders by the trial court.
For petitioners continued failure to comply with the writ of preliminary injunction, respondents moved to cite petitioner in contempt.
Respondents also moved to declare petitioner in default for not filing an answer within the period prescribed in the trial courts order of 26
January 1996.
On 28 May 1996, the trial court granted the motion and declared petitioner guilty of indirect contempt. The trial court issued a bench
warrant against petitioner.
Petitioner, through the Office of the Solicitor General (OSG), filed a special civil action for certiorari with the Court of Appealsvii
assailing the trial courts order finding petitioner guilty of indirect contempt. The case was docketed as CA-G.R. SP No. 41263.
Meanwhile, the trial court declared petitioner in default for his failure to file an answer to the petition for mandamus and damages.
Accordingly, respondents adduced their evidence ex-parte before the Clerk of Court.
On 11 July 1996, the trial court rendered a Decision the dispositive portion of which reads:
Wherefore, considering the foregoing premises, judgment is hereby rendered in favor of the petitioners and against the
respondent declaring mandamus permanent and thereby ordering respondent Panfilo V. Villaruel, Jr., to pay the following:
(1) One hundred thousand pesos (P100,000.00) each as moral damages;
(2) Twenty five thousand pesos (P25,000.00) each as exemplary damages;
(3) Twenty five thousand pesos (P25,000.00) each as temperate damages, and;
(4) Fifty thousand pesos (P50,000.00) as attorneys fees.
Aggrieved, petitioner, represented by the OSG, appealed to the Court of Appeals. The appeal was docketed as CA-G.R. SP No.
42447.viii With the filing of the appeal, the Court of Appeals granted respondents motion for the dismissal of the petition for certiorari in
CA-G.R. SP No. 41263 for being moot and academic.
The Court of Appeals granted the OSG a non-extendible extension until 13 December 1996 within which to file petitioners
memorandum. However, the OSG failed to file the memorandum. Subsequently, Solicitor Restituto Tuando, Jr. who was handling the
case was appointed Regional Trial Court judge of Dumaguete City. The case was re-assigned to Assistant Solicitor Luciano Joson, Jr.
On 13 March 1997, the Court of Appeals issued a Resolution dismissing petitioners appeal for failure to file the required memorandum.
The OSG, through Assistant Solicitor Luciano Joson, Jr., filed a Motion for Reconsideration, but the Court of Appeals denied the same.
The Resolution became final and executory on 14 June 1997.
Consequently, the respondents filed a Motion for Execution with the trial court. Although served a copy of the motion for execution,
 the OSG did not file any opposition.
Acting on the motion for execution, the trial court issued a Writ of Execution on 22 September 1997. On 3 February 1998, the Sheriff
issued a Notice of Sheriffs Sale setting on 23 February 1998 the sale of petitioners real property covered by Transfer Certificate of Title
No. 83030.
On 17 February 1998, petitioner, through his new counsel,ix filed a Motion to Quash the Writ of Execution and to Suspend Sheriffs
Sale. In his motion, petitioner alleged that the trial courts decision never became final and executory as the trial court deprived him of his
right to due process. Petitioner claimed that the OSG failed to file petitioners memorandum in CA-G.R. SP No. 42447 resulting in the
dismissal of his appeal. Furthermore, petitioner alleged that the OSG failed to inform him of the dismissal of his appeal and of the trial
courts order granting respondents motion for execution. Petitioner further asserted that the Resolution of the Ombudsman in OMB-ADM
0-96-0090x superseded the decision of the trial court. The Ombudsmans Resolution approved the following recommendation of the
reviewing Assistant Ombudsman:
PREMISES CONSIDERED, respondent MODESTO ABARCA, JR., is hereby found GUILTY of violation of Section 7(d) of
Republic Act 6713, for which the penalty of Suspension Without Pay for Six (6) Months is hereby recommended pursuant to Section
10(b), Rule III of Administrative Order No. 07, in relation to Section 25(2) of Republic Act No. 6770.
It is also respectfully recommended that the charge against respondents REYNALDO FERNANDO and MARY LOU CLEOFAS
be DISMISSED.xi
On 23 February 1998, the trial court issued an Order quashing the Writ of Execution because the Sheriff failed to follow Section 9,
Rule 39 of the Rules of Court. The trial court, however, issued an Alias Writ of Execution. Petitioner filed a Motion for Reconsideration
but the trial court denied the same on 28 April 1998.
Dissatisfied with the trial courts orders, petitioner filed a special civil action for certiorari with the Court of Appeals docketed as CA-
G.R. SP No. 48233 assailing the execution of the trial courts decision of 11 July 1996. The Court of Appeals denied due course to the
petition for certiorari and dismissed the same in the Decision dated 30 September 1998. Petitioner moved for reconsideration but the
appellate court denied the motion in a Resolution of 3 December 1998. Hence, the instant petition.
The Ruling of the Court of Appeals Petitioner raised before the Court of Appeals the following issues:
1. THE TRIAL COURTS DECISION DATED JULY 11, 1996 IS VOID FOR LACK OF DUE PROCESS AND COULD NOT HAVE
BECOME FINAL AND EXECUTORY.
2. SUPERVENING FACTS AND CIRCUMSTANCES HAVE TRANSPIRED WHICH RENDERED EXECUTION OF THE JUDGMENT
UNJUST AND INEQUITABLE.xii
On the first issue, the Court of Appeals ruled that the negligence of the OSG could not relieve petitioner of the effects of such
negligence and prevent the decision of the trial court from becoming final and executory. In short, the OSGs negligence binds petitioner.
The Court of Appeals admonished petitioner for his failure to ascertain periodically from the OSG or from the Court of Appeals the
status of his appeal. The appellate court cited Reyes v. Court of Appeals,xiii which held that it is the duty of a party litigant to make
inquiries to his counsel on matters concerning his case. A party litigant bears the responsibility of contacting his lawyer periodically to
apprise himself of the progress of the case. A lawyers negligence binds a party litigant who must suffer the consequences of such
negligence. The Court of Appeals further held that there was no proof that the OSG failed to inform petitioner of the dismissal of his
appeal.
On the second issue, the Court of Appeals concurred with the trial courts ruling that the nature of the case before the Ombudsman
is different from the case before the trial court. The former deals with a violation of Republic Act No. 6713 (RA 6713) xiv punished with
suspension from office while the latter deals with an ultra vires act punished with damages. The appellate court ruled that the findings of
the Ombudsman had nothing to do with the findings of the trial court, as the two forums are separate and distinct from each other.
Moreover, the Court of Appeals opined that petitioner failed to prove that the trial court committed grave abuse of discretion to
warrant the writ of certiorari. The appellate court ruled that the trial court acted in accord with law and prevailing jurisprudence in issuing
the questioned orders.
The Issues
1. Whether the award of moral, exemplary and temperate damages to respondents has legal basis.
2. Whether the trial court correctly ruled that the negligence of the OSG could not relieve petitioner of the effects of such negligence
and prevent the decision of the trial court from becoming final and executory.
3. Whether petitioner was denied of his right to due process when the appellate court dismissed his appeal for failure of the OSG to
file the memorandum.
4. Whether the resolution of the Ombudsman finding Modesto Abarca, Jr. guilty of violating Section 7 of RA 6713 rendered the
execution of the trial courts decision unjust and inequitable.
The main issue to resolve is whether the Court of Appeals erred in dismissing the petition for certiorari assailing the trial courts
orders dated 23 February 1998 and 28 April 1998. Resolving this issue necessarily determines the validity of the questioned orders. This
in turn resolves the questions of whether the trial court denied petitioner of his right to due process and whether the Ombudsmans
resolution rendered the execution of the trial courts decision unjust and inequitable.
We can no longer resolve the issue regarding the validity and reasonableness of the award of damages for three reasons. First, the
decision of the trial court dated 11 July 1996 is already final and executory. Second, the petition for certiorari filed by petitioner was simply
a direct consequence of the trial courts issuance of the writ of execution and notice of sheriffs sale. In other words, petitioner merely
questioned the execution of the trial courts decision in his petition for certiorari. Third, petitioner did not raise the issue of the validity and
reasonableness of the award of damages before the Court of Appeals.xv
The Courts Ruling The petition has no merit.
We begin by pointing out that petitioner failed to allege the essential requisites under Section 1, Rule 65 of the Rules of Court for a
petition for certiorari to prosper. Specifically, petitioner never alleged that the trial court acted without or in excess of its jurisdiction in
issuing the questioned orders. Neither did petitioner allege that the trial court gravely abused its discretion amounting to lack or excess
of jurisdiction, and there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law. In other words, there is
no issue that the trial court committed grave abuse of discretion amounting to lack or excess of jurisdiction in handing down the questioned
orders. On this score alone, the dismissal of the petition for certiorari before the Court of Appeals is in order. However, in disposing of the
instant case, we shall still resolve the principal issues raised by petitioner.
No Denial of Petitioners Right to Due Process Petitioner essentially contends that the judgment of the trial court in Civil Case No.
96-0139 is void for lack of due process. Petitioner alleges that the trial court never gave him the chance to be heard and to submit his
evidence. Petitioner, formerly represented by the OSG, failed to file an answer to respondents petition for mandamus and damages.
Consequently, the trial court declared petitioner in default. While the OSG filed a notice of appeal of the judgment by default, it failed to
file with the Court of Appeals the required memorandum resulting in the dismissal of the appeal. In petitioners words, the OSG virtually
abandonedxvi his case. Petitioner argues that the inexcusable negligence of the OSG did not bind him and prevented the decision of the
trial court from becoming final and executory.

We do not agree. Due process, in essence, is simply an opportunity to be heardxvii and this opportunity was not denied petitioner.
Throughout the proceedings in the trial court as well as in the Court of Appeals, petitioner had the opportunity to present his side but he
failed to do so. Clearly, petitioners former counsel, the OSG, was negligent. This negligence, however, binds petitioner. The trial and
appellate courts correctly ruled that the negligence of the OSG could not relieve petitioner of the effects such negligence xviii and prevent
the decision of the trial court from becoming final and executory.
In Villa Rhecar Bus v. De la Cruz,xix which petitioner himself cited, the Court ruled:
It is unfortunate that the lawyer of the petitioner neglected his responsibilities to his client. This negligence ultimately resulted
in a judgment adverse to the client. Be that as it may, such mistake binds the client, the herein petitioner. As a general rule, a client
is bound by the mistakes of his counsel. Only when the application of the general rule would result in serious injustice
should an exception thereto be called for. Under the circumstances obtaining in this case, no undue prejudice against the
petitioner has been satisfactorily demonstrated. At most, there is only an unsupported claim that the petitioner had been prejudiced
by the negligence of its counsel, without an explanation to that effect. (Emphasis supplied)
In the present case, there was no proof that petitioner suffered serious injustice to exempt him from the general rule that the
negligence of the counsel binds the client. Petitioner did not even attempt to refute the respondents allegations in the petition for
mandamus and damages.
Moreover, petitioner is not entirely blameless for the dismissal of his appeal. After the OSGs failure to file the answer to the petition
for mandamus and damages and to have the order declaring petitioner in default lifted, petitioner should have already replaced the OSG
with another lawyer. However, petitioner still retained the services of the OSG, despite its apparent lack of interest in petitioners case,
until the trial courts decision became final. In Salva v. Court of Appeals,xx the Court declared:
Respondents reliance on Legarda is inapropos. Notably, the decision in said case was not yet final in 1991. The private
respondent therein then filed a timely motion for reconsideration. In granting the motion for reconsideration, the Court en banc held:
Neither Cathay nor Cabrera should be made to suffer for the gross negligence of Legardas counsel. If she may be said
to be innocent because she was ignorant of the acts of negligence of her counsel, with more reason are respondents truly
innocent. In this case, it was not respondents, but Legarda, who misjudged and hired the services of the lawyer who practically
abandoned her case and who continued to retain him even after his proven apathy and negligence.
At any rate, we find that respondent Governor Sato, as well as the Province of Occidental Mindoro which she represents, were
not denied their day in court. Responsive pleadings were filed before the lower courts, and respondent was given all the opportunities
to prove her case. Her chosen counsel did not diligently exhaust all legal remedies to advance respondents cause, yet
respondent did not terminate his services. She was aware of the repeated negligence of her counsel and cannot now
complain of counsels errors. Hence, there is no justifiable reason to exempt her from the general rule that clients should
suffer the consequences of the negligence, mistake or lack of competence of the counsel whom they themselves hired
and had the full authority to fire at any time and replace with another even without justifiable reason. (Emphasis supplied)
Furthermore, petitioner cannot now complain of the OSGs errors. Petitioner should have taken the initiative of making periodic
inquiries from the OSG and the appellate court about the status of his case.xxi Litigants represented by counsel should not expect that all
they need to do is sit back, relax and await the outcome of their case.xxii To agree with petitioners stance would enable every party to
render inutile any adverse order or decision through the simple expedient of alleging negligence on the part of his counsel. xxiii The Court
will not countenance such ill-founded argument which contradicts long-settled doctrines of trial and procedure.
The Ombudsmans Resolution Does Not Render the Execution of the Trial Courts Decision Unjust and Inequitable
Petitioner contends that the Ombudsmans Resolution finding Abarca guilty of violating Section 7(d) of RA 6713 superseded the trial
courts decision finding petitioner liable for damages. Petitioner insists that the Ombudsmans resolution rendered the execution of the trial
courts decision unjust and inequitable.
We are not persuaded.
Settled is the rule that a judgment that has acquired finality becomes immutable and unalterable and may no longer be modified in
any respect except only to correct clerical errors or mistakes. xxiv True, this rule admits of certain exceptions. One of these exceptions is
whenever circumstances transpire after the finality of the decision rendering its execution unjust and inequitable.xxv This, however, is not
the case here. In the present case, the Ombudsman issued his Resolution prior to the finality of the trial courts decision. The Ombudsman
issued his Resolution on 22 January 1997 while the trial courts decision became final and executory on 14 June 1997. Therefore, the
resolution of the Ombudsman is not a supervening event to warrant the stay of the execution of the decision of the trial court.
Furthermore, the resolution of the Ombudsman finding Abarca guilty of violating Section 7(d) of RA 6713 did not and could not
supersede the decision of the trial court holding petitioner liable for damages. The action filed by the petitioner before the Ombudsman is
completely different from the action instituted by respondents before the trial court. The two actions, which are clearly separate and
distinct from each other, presented two different causes of action. Petitioners cause of action arose from respondents alleged violation of
certain provisions of RA 6713 whereas respondents cause of action resulted from petitioners refusal to recall respondents to their mother
unit at CATC. In the administrative case before the Ombudsman, the issue was whether respondents were guilty of violating RA 6713. In
contrast, the issue in the civil action before the trial court was whether respondents were entitled to the issuance of the writ of mandamus
and damages.
The findings of the Ombudsman did not render the execution of the trial courts decision unjust and inequitable. The resolution of
the Ombudsman finding Abarca guilty of violating Section 7(d) of RA 6713 did not state that petitioner had a valid reason to detail
respondents to the Office of Undersecretary Cal. In fact, the Ombudsman dismissed the charges against Reynaldo Fernando and Mary
Lou Cleofas. Thus, the trial court correctly awarded damages to respondents. Contrary to petitioners contention, awarding damages to
respondents does not amount to rewarding respondents for their alleged wrongdoing. The award merely compensates respondents for
petitioners own unlawful acts. Clearly illegal were petitioners acts of unjustifiably detailing respondents to the office of DOTC
Undersecretary Cal and refusing to comply with the 9 November 1995 directive of Secretary Garcia to recall immediately respondents to
their mother unit. WHEREFORE, we DENY the instant petition. The Decision of the Court of Appeals in CA G.R. SP No. 48233 dated 30
September 1998 and the Resolution dated 3 December 1998 are AFFIRMED. No costs.
G.R. No. 145260 July 31, 2003

CITY OF ILIGAN, Represented by Hon. FRANKLIN M. QUIJANO in His Capacity as City Mayor, Petitioner,
vs.
PRINCIPAL MANAGEMENT GROUP, INC. (PMGI), Represented by Its President & Chief Executive Officer, FERNANDO M.
SOPOT, Respondent.

The ascertainment of good reasons for execution pending appeal lies within the sound discretion of the trial court. Normally, its finding
will not be disturbed by a reviewing court, in the absence of grave abuse of discretion.

Before this Court is a Petition1 for Review under Rule 45 of the Rules of Court, assailing the May 4, 2000 Decision 2 and the July 14,
2000 Resolution3 of the Court of Appeals (CA) in CA-GR CV No. 56952. The decretal portion of the Decision reads as follows:

"WHEREFORE, the Petition for Certiorari is hereby DISMISSED." The assailed Resolution denied petitioner’s Motion for
Reconsideration.

"On October 19, 1998, Mayor Franklin M. Quijano, acting for and in behalf of [petitioner] City of Iligan, requested from the Sangguniang
Panlungsod for: (a) Resolution authorizing him to open a domestic Standby Letter of Credit (SLC) in the amount of ₱14,000,000.00 in
favor of the Land Bank Realty Development Corporation and/or PNCC with the Principal Management Group, Inc. (herein private
respondent) as the funder/financial managers in connection with the development of a project on a ‘turn-key’ basis; and (b) Resolution
authorizing him to open a high yielding depository account with the Land Bank of the Philippines in the amount of ₱14,000,000.00 as a
hold-out collateral for the domestic SLC.

"The City Council approved Mayor Quijano’s requests and passed Resolutions Nos. 1050 and 1051 series of 1998 on October 20,
1998.

"On December 29, 1998, a Memorandum of Agreement (MOA) on a ‘turn-key’ arrangement was drawn by Mayor Quijano, representing
the City of Iligan, with Land Bank Realty Development Corporation (LBRDC) as General Contractor and Principal Management Group,
Inc. (PMGI) as Developer - Financing Manager. The project to be undertaken was the construction of a Sports Complex which upon
completion shall be turned over to Iligan City for acceptance and the issuance of Certificate of Acceptance and Authority to Pay to
enable Land Bank Realty-PMGI to call on the SLC.

"The project started on November 26, 1998 despite the fact that some drawings had not yet been completed, since the MOA provides
for a construction period of one hundred twenty days from the date of the signing.

"The construction site of the Sports Complex was donated by San Miguel (Iligan) Enterprises, Inc. wherein the City of Iligan as donee
was bound to provide for all expenses for the transfer of the occupants therein.

"On or about January 1999, the work on the project stopped due to the refusal of some of the occupants to vacate the premises
claiming that they have not been paid x x x their disturbance compensation. By then, PMGI had already accomplished 78.27% of the
contracted project equivalent to ₱10,957,800.00 of the total project cost of ₱14,000,000.00.

"On February 24, 1999, PMGI requested from the City of Iligan for a deductive change order to enable it to collect the above-stated
amount based on the 78.27% accomplishment of the project. The City of Iligan, however, claimed that PMGI’s accomplishment was
only 52.89% or equivalent only to ₱6,958,861.59 based on the Accomplishment Report as of February 9, 1999.

"The City of Iligan refused to pay for the reason that the mutually agreed price of ₱14 Million shall only be paid after the completion of
the project and acceptance by it and since the project is not yet complete, no payment can be paid.

"The problem on the payment of the affected occupant, which was the cause of the work stoppage, was accordingly brought to the
attention of the Sangguniang Panlungsod which favorably acted on it through Resolution No. 99-765 dated June 8, 1999 authorizing the
payment of the affected occupants in the project site.

"On November 8, 1999, PMGI filed a complaint against the City of Iligan for rescission of the MOA and damages. After the filing of City
of Iligan’s Answer, a Motion for Partial Summary Judgment was filed by PMGI which claimed that there was no genuine issue as to the
fact of the obligation of the City of Iligan since it admitted the accomplishment of 52.89% or equivalent to ₱6,958,861.59 of PMGI and
that the City of Iligan had not specifically denied under oath the genuineness of the Letter of Credit and Memorandum of Agreement.

"An Opposition to the Motion for Partial Summary Judgment was filed by the City of Iligan on December 7, 1999 which stated that: it
never admitted that PMGI made any accomplishment at all but merely stated that with respect to the work accomplishment, it was only
52.89% based on the report of Engr. Maata’s team; the MOA or the contract for the construction of the sports complex is between the
City of Iligan, as owner, and the Land Bank Realty Development Corporation as General Contractor, PMGI only entered into the picture
to support LBRDC in accordance with their own separate agreement; the grounds of lack of cause of action and jurisdiction raised in
the Answer should be set for hearing; LBRDC as an indispensable party should be impleaded; and the court does not have jurisdiction
over the case in view of Sec. 4 of Executive Order No. 1008 which vests exclusive jurisdiction over construction disputes to
Construction Industry Arbitration Commission (CIAC).

"In private respondent’s Rejoinder to Opposition, it was alleged that PMGI and LBRDC are solidary creditors, hence, there was no need
to implead the latter since the suit redounds to the benefit of LBRDC, there was no disagreement or dispute as to the accomplishment
of 52.89% or equivalent to ₱6,958,861.59, hence, there was no need to resort to arbitration; and the ‘turn-key’ provision in the MOA is
not applicable since the 120-day construction period lapsed due to the failure of the City of Iligan to perform its obligation.

"In the Order dated December 20, 1999, the trial court granted the Motion for Partial Summary Judgment and rendered the following
judgment/order:

‘WHEREFORE, foregoing premises considered, [respondent’s] motion is GRANTED.

‘Partial summary judgment is hereby issued in favor of [respondent] in the amount of Six Million Nine Hundred Fifty-eight Thousand
Eight Hundred Sixty one & 59/100 (₱6,958,861.59) Pesos Only.

‘The Manager of the LAND BANK OF THE PHILIPPINES (Iligan City Branch), or his authorized representative, or any competent officer
of said bank is hereby ORDERED to pay the amount of ₱6,958,861.59 out of LC NO. 98003/D to Mr. Fernando M. Sopot, President
and CEO of [respondent].

‘In the event said LC NO. 98003/D is insufficient or has expired, the Manager and/or any competent officer of said LAND BANK OF
THE PHILIPPINES (Iligan City Branch) is hereby ORDERED to pay to said Mr. Fernando M. Sopot the amount of ₱6,958,861.59 out of
any accounts or moneys of [petitioner].

"The Motion for Reconsideration filed by the City of Iligan to the December 20, 1999 Order was denied in the Resolution dated January
17, 2000.

"A Notice of Appeal was filed by the City of Iligan on January 26, 2000.

"A Motion for Execution Pending Appeal filed on January 18, 2000 by PMGI which alleged that when the appeal is clearly dilatory, order
for execution upon good reasons may be issued with the discretion of the court, was granted on January 24, 2000 over the opposition
of the City of Iligan, to justify the same, the dispositive portion of which was earlier quoted. The trial court further stated that:

‘The Court is convinced that there are good reasons to allow the immediate execution pending appeal. Its adjudication is based on
[petitioner’s] own admission hence, any appeal would be unmeritorious and would only serve to delay execution of the final order
subject of the instant motion. The fact that an appeal in this case if taken by [petitioner] will be a merely dilatory tactic has been
declared by the Supreme Court as a ‘good and sufficient reason upon which to issue execution’ of the order under Section 2, Rule 39 of
the Revised Rules of Court.’

"A Demand Letter and Notice of Garnishment, both dated January 26, 2000, were served on even date by Sheriff Montoy B. Lomondot
to herein petitioner."5 (Citations omitted)

Ruling of the Court of Appeals

The CA held that "the trial court did not commit grave abuse of discretion in granting the execution pending appeal since the appeal
filed by petitioner was a dilatory tactic and is not allowed in the first place." 6 Ruling that the trial court could grant executions pending
appeal, provided that a good reason therefor was stated in a special order, the appellate court upheld "dilatory tactic" as one such good
reason.

The appellate court also ruled that certiorari would not be allowed in this case, because there were other remedies still available to
petitioner, like the filing of a supersedeas bond to stay the execution or the filing of a motion for reconsideration.1âwphi1

The Issues

"A Whether or not the Honorable Court of Appeals erred in affirming the Order of the trial court granting a Writ of Execution Pending
Appeal to implement its previous Order dated December 20, 1999 approving respondent’s Motion for Partial Summary Judgment;

"B Whether or not the Honorable Court of Appeals erred in affirming the Order of the trial court that there were good reasons to allow
the immediate execution pending appeal; and

"C Whether or not the Honorable Court of Appeals erred in affirming the Order of the trial court in spite of the latter’s failure to take into
consideration the provision in paragraph 8 of the Memorandum of Agreement entered into by the herein parties."

Simply put, the main issue is whether the Order granting execution pending appeal was proper.

The Court’s Ruling The Petition has no merit.

Main Issue: Propriety of Execution Pending Appeal

Executions pending appeal are governed by Section 2 of Rule 39 of the Rules of Court, which reads:

"SEC. 2. Discretionary execution.--

(a) Execution of a judgment or a final order pending appeal. – On motion of the prevailing party with notice to the adverse party filed in
the trial court while it has jurisdiction over the case and is in possession of either the original record or the record on appeal, as the
case may be, at the time of the filing of such motion, said court may, in its discretion, order execution of a judgment or final order even
before the expiration of the period to appeal.

"After the trial court has lost jurisdiction, the motion for execution pending appeal may be filed in the appellate court.

"Discretionary execution may only issue upon good reasons to be stated in a special order after due hearing."

There are three requisites for the execution of a judgment pending appeal: a) a motion must be filed by the prevailing party with notice
to the adverse party; b) there must be good reasons for execution pending appeal; and c) the good reasons must be stated in a special
order.9

Execution pending appeal is, of course, the exception to the general rule. 10 Normally, execution cannot be obtained until and unless (a)
the judgment has become final and executory; (b) the right of appeal has been renounced or waived; (c) the period for appeal has
lapsed without an appeal having been filed; or (d) having been filed, the appeal has been resolved and the records of the case have
been returned to the court of origin -- in which case, execution shall issue as a matter of right. 11

On the other hand, when the period of appeal has not yet expired, the execution of a judgment should not be allowed except if, in the
court’s discretion, there are good reasons therefor. 12

Since the execution of a judgment pending appeal is an exception to the general rule, the existence of "good reasons" is essential.
These reasons must be stated in a special order, because unless these are divulged, it will be difficult to determine on appeal whether
judicial discretion has been properly exercised by the lower court. 13

Good reasons consist of compelling circumstances that justify the immediate execution of a judgment, lest it become illusory; or the
prevailing party be unable to enjoy it after the lapse of time, considering the tactics of the adverse party who may have no recourse but
to delay.14

In the present case, the good reason relied upon by both the trial and the appellate courts was that the partial adjudication of the case
was based on petitioner’s own admission; hence, any appeal based on that point would be unmeritorious and merely dilatory. Indeed,
both courts ruled that an appeal by petitioner would only serve as "a good and sufficient reason upon which to issue execution."15

The ascertainment of good reasons for execution pending appeal lies within the sound discretion of the trial court, and the appellate
court will not normally disturb such finding. Intervention by the latter may be proper, if it is shown that there has been an abuse of
discretion.16

Like the CA, we find no abuse of discretion in the trial court’s grant of execution pending appeal. Indeed, this Court has held that a good
and sufficient reason upon which to authorize immediate execution is when an appeal is clearly dilatory. 17

Normally, the trial court is not allowed to assess its own judgment and to hold that an appeal may not prosper, or that it would merely be
dilatory. In the present case, however, there are circumstances that undisputedly serve as cogent bases for arriving at such a
conclusion.

First, it is not seriously disputed that the judgment is anchored upon material facts as follows: (1) there is a Memorandum of Agreement
(MOA) for the site development of Sports Complex Project No. 1 signed by the parties; (2) petitioner failed to pay the occupants of the
project site on time, thereby preventing respondent from fully complying with its obligation under the MOA; (3) respondent admitted that
the work accomplished was 52.89 percent, which was equivalent to ₱6,958,861.59. Obviously, there is no genuine issue as to any
material fact on this point.

Second, Article 1191 of the Civil Code states:

"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.

By failing to pay the occupants of the project site within the time required for the completion of the project, petitioner did not comply with
what was incumbent upon it. Applying the law to the undisputed facts, the trial court had prima facie bases for rendering its partial
summary judgment holding that respondent was entitled to rescission and to the payment of ₱6,958,861.59.

Verily, the trial court committed no abuse of discretion in granting execution pending appeal. Its conclusion was upheld by the CA,
which found that "the appeal filed by the petitioner was a dilatory tactic and was not allowed in the first place." Consequently, the
appellate court did not err in refusing to attribute grave abuse of discretion to the trial court’s Order granting execution pending appeal.

WHEREFORE, the Petition is DENIED and the assailed Decision and Resolution AFFIRMED. Costs against petitioner.

A.M. No. MTJ-03-1513 November 12, 2003

Spouses JAIME and PURIFICACION MORTA, Complainants.

vs.
Judge ANTONIO C. BAGAGÑAN, Municipal Trial Court, Guinobatan, Albay; and Sheriff DANILO O. MATIAS, Regional Trial
Court, Branch 14, Ligao, Albay, Respondents.

Unreasonable delay in resolving motions opens a judge to administrative sanctions. Likewise, a sheriff is administratively liable for
delayed implementation of a writ of execution and failure to render the required reports thereon. These are necessary lessons from the
time-honored principle that "justice delayed is justice denied."

In their Administrative Complaint1 dated July 26, 2001, Spouses Jaime and Purificacion Morta Sr. charged Judge Antonio C. Bagagñan
of the Municipal Trial Court (MTC) of Guinobatan, Albay with gross ignorance of the law, incompetence, bias and delay. They also
indicted Sheriff Danilo O. Matias of the Regional Trial Court (RTC) of Ligao, Albay (Branch 14) with gross ignorance of the law,
negligence and connivance with the defendants in Civil Case Nos. 481 and 482 (MTC, Guinobatan, Albay). The Office of the Court
Administrator (OCA) summarized the factual antecedents as follows:

In a Complaint-Affidavit dated July 26, 2001 (with enclosures), x x x [Spouses] Jaime and Purificacion Morta, through their counsel[,]
Atty. Rodolfo R. Paulino[,] charg[ed] [Respondent] Judge Antonio C. Bagagñan and Sheriff Danilo O. Matias with gross ignorance of the
law and procedure, incompetence, bias and delay in the disposition of Civil Case No. 481, entitled ‘Jaime Morta, Sr. and Purficacion
Padilla vs. Jamie Occidental and Atty. Mariano Baranda, Jr.’, for Damages with Prayer for a Writ of Preliminary Injunction, and Civil
Case No. 482 entitled ‘Jaime Morta, Sr. and Purficacion Padilla vs. Jamie Occidental, Atty. Mariano Baranda, Jr. and Daniel Corral’, for
Damages with Prayer for a Writ of Preliminary Injunction.
"Complainants, who are the plaintiffs in the aforementioned civil cases, allege[d] that on March 29, 1994[,] the Municipal Trial Court [of]
Guinobatan, Albay rendered a decision in their favor. The decretal portion of the decision reads:

‘WHEREFORE, in view of the foregoing considerations, judgment is rendered in favor of the plaintiffs and against the defendants in
both cases as follows:

1) Ordering the defendants not to molest and disturb the peaceful possession of the plaintiffs in the lands in question situated at San
Rafael, Guinobatan;

2) Condemning the defendants in Civil Case No. 481 to jointly and severally pay the plaintiffs the total amount of ₱8,130.00
representing the value of the coconuts, pili nuts and anahaw leaves and for the destroyed plants;

3) Ordering the defendants in Civil Case No. 481 jointly and severally to reimburse the plaintiffs the amount of ₱202.00 as legal
expenses incurred in filing their suit;

4) Condemning the defendants in Civil Case No. 482 jointly and severally to pay the plaintiffs the total amount of ₱9,950.00
representing the value of the coconuts and anahaw leaves;

5) Ordering the said defendants in Civil Case No. 482 to jointly and severally reimburse the plaintiffs the sum of ₱202.00 as legal
expenses in filing this suit.’

"The defendants appealed to the Regional Trial Court [of] Ligao, Albay. In its decision dated August 10, 1994, the Regional Trial Court
[RTC] dismissed the aforesaid cases on the ground that the claims for damages are tenancy-related problems which fall under the
original and exclusive jurisdiction of the Department of Agrarian Reform Adjudicatory Board (DARAB). On September 9, 1994, the
plaintiffs filed a petition for review with the Court of Appeals assailing the decision of the RTC. However, in its decision dated May 31,
1995, the Court of Appeals affirmed the lower court’s ruling that the cases fall within the original and exclusive jurisdiction of DARAB.
Thereafter, the First Division of this Court, acting on the petition for review on certiorari filed by the plaintiffs, rendered its decision dated
June 10, 1999 in G.R. No. 123417 affirming the decision of the Municipal Trial Court, Guinobatan, Albay in Civil Case Nos. 481 and 482
and thereby setting aside the decision of the Court of Appeals in CA-GR SP No. 35300 and that of the Regional Trial Court in Civil
Cases Nos. 1751 and 1752.

"They now complain that despite the fact that the decision of the Supreme Court in the aforesaid case had already become final and
executory, the respondent Judge still refused to issue a writ of possession in their favor.

"Complainants further allege that on June 6, 2000 they filed a motion to cite Jaime Occidental for contempt of court. Although more than
one (1) year had already elapsed since the motion was filed in the respondent Judge’s sala, the same had remained unresolved up to
the filing of the instant complaint.

"As against the respondent Sheriff, the complainants aver[red] that through his ignorance, negligence and connivance with the
defendants, he failed to execute in full the writ of execution that had been previously issued by the court in Civil Case Nos. 481 and
482. Moreover, it took respondent Sheriff a long time before he finally submitted his Sheriff's Return of Service on the Writ of
Execution."2

In his Answer/Comment3 dated April 2, 2002, respondent judge explained that he had denied complainants’ Motion for the issuance of a
writ of possession because, by the time Civil Case Nos. 481 and 482 were finally decided by this Court on June 10, 1999, they had
already been ousted from the lots in question pursuant to the Decisions in DARAB Case No. 2413 and Civil Case No. 1920. In Civil
Case No. 1920, respondent judge ordered complainants to vacate the disputed lots. A Writ of Execution/Demolition was thereafter
issued on January 29, 1998. On the other hand, the DARAB Decision, which became final and executory on October 27, 1998, directed
them to cease and desist from disturbing the peaceful possession of therein Petitioner Jaime Occidental.

Regarding the alleged delay in the resolution of the Motion for Contempt filed by complainants, respondent judge contended that an
ocular inspection and a hearing had been conducted by his court as early as June 16, 2000, to determine if their Motion had any basis.
With the consent of their counsel, the hearing had to be deferred, however, pending receipt of the Sheriff’s Report in Civil Case No.
1920.

For his part, Respondent Sheriff Matias admitted in his Comment 4 dated April 18, 2002, that there was delay in the full implementation
of the Writ of Execution in Civil Case Nos. 481 and 482. Explaining that the delay was due to his heavy workload and thus
unintentional, he begged for compassion from this Court.

Evaluation and Recommendation of the OCA

The OCA found that the explanation of respondent judge for not granting the Motion for Execution, filed by complainants, was sufficient.
According to the court administrator, the records showed that they had indeed been evicted from the lots they were claiming when Civil
Case Nos. 481 and 482 were finally decided by the Supreme Court on June 10, 1999. 5 Moreover, it emphasized that this Court had
merely affirmed the Decision of the MTC insofar as the award of damages was concerned.

As to complainants’ Motion to cite Occidental in contempt, the OCA held that the delay was due primarily to the need of the court to
clarify some important matters, not to the negligence or partiality of respondent. Accordingly, it recommended that the charges against
him be dismissed for lack of merit.

On the other hand, the OCA found that Sheriff Matias had failed to implement the Writ of Execution promptly and efficiently. It
recommended that he be ordered to pay a fine of ₱1,000, with a warning that a repetition of the same or a similar act in the future would
be dealt with more severely.

The Court’s Ruling We modify the OCA’s findings and recommended penalties, consistent with Rule 140 of the Revised Rules of Court
and the Revised Uniform Rules on Administrative Cases in the Civil Service.
Administrative Liability We agree with the OCA that respondent judge acted correctly in not issuing a writ of execution/possession. His
action was consistent with the Decision of this Court in GR No. 123417 affirming that of the MTC as to damages. Besides, the latter’s
Order directing defendants not to molest complainants in their peaceful possession was rendered moot when they were ousted from the
disputed lots by virtue of the final and executory judgments in Civil Case No. 1920 and DARAB Case No. 2413. Indeed, the execution
of a final judgment may be refused, as in this case, when there has been a change in the situation of the parties that would make its
execution inequitable.6

The delay in the resolution of complainants’ Motion, however, is an altogether different matter. The Code of Judicial Conduct enjoins
trial court judges, as paragons of justice in the first instance, to dispose of the court’s business promptly 7 and to decide cases and
motions within the required periods.8 Section 15(1) of Article VIII of the Constitution mandates them to do so within three months from
the date of submission for decision or final resolution. This Court, through Administrative Circular No. 1, 9 also specifically requires all of
them to act promptly on all motions and interlocutory matters pending before their courts. 10

Hence, it is well-settled that the unexplained failure of judges to decide cases and resolve motions and incidents within the
reglementary period of 90 days, which is fixed by the Constitution and the law, renders them administratively liable. 11 We have stressed
often enough that delay in the administration of justice undermines the faith of the people in the judiciary, which is expected to hear
their supplications promptly. Delay reinforces in the mind of litigants the impression that the wheels of justice grind ever so slowly. 12 As
the time-honored principle goes, "justice delayed is justice denied."

In this case, respondent judge never resolved the Motion, filed on June 6, 2000, to cite Defendant Occidental for contempt. W hile it is
true that the former immediately conducted an ocular inspection of the area to determine if the Motion had any basis, this act served
only to mitigate his infraction, but not absolve him from it. The Sheriff’s Return of Service of the Writ of Demolition issued in Civil Case
No. 1920 would have clarified whether or not Occidental had already been fully restored in possession. But while its absence was a
valid reason to defer action on the contempt Motion at the outset, it was certainly not an excuse for the prolonged inaction.

Had respondent judge been so minded, he would have requested a copy of the Sheriff’s Report, so that he could rule on the Motion
with dispatch. He has not satisfactorily explained his failure to do so, considering that the Writ of Demolition issued in Civil Case No.
1920 had been fully executed as early as February 25, 1998, and the return thereon made on March 17, 1998. 13

With respect to the charges against respondent sheriff, we agree with the OCA that he was remiss in his duty to implement the Writ fully
in Civil Case Nos. 481 and 482.1a\^/phi1 Time and time again, we have impressed upon those tasked to implement court orders and
processes to see to it that the final stage in the litigation process -- the execution of judgment -- be carried out promptly. They should
exert every effort and indeed consider it their bounden duty to do so, in order to ensure the speedy and efficient administration of
justice.14 A decision that is left unexecuted or delayed indefinitely because of the sheriff’s inefficiency or negligence remains an empty
victory on the part of the prevailing party.15 For this reason, any inordinate delay in the execution of judgment is truly deplorable and
cannot be countenanced by the Court.1a\^/phi1

There is no mistaking the mandatory character of the period prescribed under Section 14 of Rule 39 of the Revised Rules of Court on
the Return of a Writ of Execution, which reads:

"SEC. 14. Return of writ of execution. – The writ of execution shall be returnable to the court issuing it immediately after the judgment
has been satisfied in part or in full. If the judgment cannot be satisfied in full within thirty (30) days after his receipt of the writ, the officer
shall report to the court and state the reason therefor. Such writ shall continue in effect during the period within which the judgment may
be enforced by motion. The officer shall make a report to the court every thirty (30) days on the proceedings taken thereon until the
judgment is satisfied in full, or its effectivity expires. The returns or periodic reports shall set forth the whole of the proceedings taken,
and shall be filed with the court and copies thereof promptly furnished the parties."

A similar rule is stated in Administrative Circular No. 12 dated October 1, 1985, and incorporated in the Manual for Clerks of Court.16
According to this Circular, all sheriffs and deputy sheriffs shall submit to the judge concerned a report on actions taken on all writs and
processes assigned to them within 10 days from receipt.

Per the records of this case, a Writ of Execution was issued on November 22, 1999 in Civil Case Nos. 481 and 482. 17 Respondent
Sheriff’s Return of Service18 of that Writ was filed only on May 25, 2000, however, or six months thereafter. There is nothing in the
records showing that he submitted before then a periodic report on the actions he had taken on the Writ "every 30 days from the date of
receipt" as required. On the contrary, the Report indicates that the Writ was partially executed on December 15-28, 1999 and January
11, 2000; and that the damages adjudged were partly paid in the amount of ₱3,500 plus one unit of Karaoke machine. But it was only
on May 25, 2000, that this matter was reported to the trial court.

The excuse proffered by respondent sheriff -- heavy workload -- cannot absolve him from administrative sanctions.19 As an officer of the
court, he should at all times show a high degree of professionalism in the performance of his duties. 20 He has failed to observe that
degree of dedication required of him as a sheriff. The charge of connivance is, however, dismissed for lack of basis.

Although the OCA recommended that Respondent Judge Bagagñan be absolved of all charges, we find him guilty of undue delay 21 in
resolving a pending motion, an infraction that also constitutes a violation of a Court circular. 22 Under Section 11(B) of Rule 140 of the
Revised Rules of Court, this less serious charge23 may be sanctioned by a fine of more than ₱10,000, but not exceeding ₱20,000.

As to Sheriff Matias, we find him guilty of simple neglect of duty, 24 a less grave offense under the Revised Uniform Rules on
Administrative Cases in the Civil Service. This infraction is punishable by a suspension of one month and one day to six months. 25 But
under the circumstances, we find it inadvisable to suspend respondent sheriff, considering that his work would be left unattended in his
absence. Instead, we adopt our previous ruling in Aquino v. Lavadia 26 imposing a fine equivalent to his one-month salary, so that he
can finally implement the subject Writ and perform his other duties.

WHEREFORE, Judge Antonio C. Bagagñan of the Municipal Trial Court of Guinobatan, Albay, is found guilty of unreasonable delay
and is FINED ₱11,000 with a stern warning that a repetition of the same or a similar act in the future shall be dealt with more severely.
On the other hand, Sheriff Danilo O. Matias of the Regional Trial Court of Ligao, Albay (Branch 14), is ordered to pay a fine equivalent
to his one-month salary, with a similar warning of stiffer sanctions for the same or a similar act.

G.R. No. 151325 June 27, 2005

D' ARMOURED SECURITY AND INVESTIGATION AGENCY, INC., petitioner,
vs.
ARNULFO ORPIA, LODUVICO ABUCEJO, ROWEL AGURO, EFREN ALMOETE, ROMEO AMISTA, WARLITO BALAGOSA,
ROMEO BALINGBING, RAMON BARROA, MONTECLARO BATAWIL, ARNEL BON, RICARDO CAPENTES, DANILO DADA,
JOEL DELA CRUZ, HERNANO DELOS REYES, FLORENTINO DELOS TRINO, ROGELIO DUERME, NONITO ESTRELLADO,
JOSEPH FALCESO, ISIDRO FLORES, VICTOR GUNGON, SONNY JULBA, PATRICIO LACANA, JR., FELIX LASCONA, JUANITO
LUNA, RAUL LUZADAS, ROMMEL MAGBANUA, ROGELIO MARIBUNG, NICOLAS MENDOZA, EZVENER OGANA, RICKY
ORANO, REYNALDO OZARAGA, SAMUEL PADILLA, EDWIN PARRENO, IRENEO PARTOLAN, JUAN PIGTUAN, GUILLERMO
PUSING, RODEL SIBAL, SILVESTRE SOLEDAD, JOVENAR TEVER, VIRGILIO TIMAJO, ERMILIO TOMARONG, JR., VIRGILIO
VERDEFLOR and JOEREX VICTORINO, respondents.

For resolution is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, assailing the
Decision1 dated December 18, 2001 rendered by the Court of Appeals in CA-G.R. SP No. 61799, entitled "D’Armoured Security and
Investigation Agency, Inc. vs. National Labor Relations Commission, Arbiter Ariel C. Santos, NLRC Sheriff Ricardo Perona, Arnulfo
Orpia, Ludovico Abucejo, Rowel Aguro, Efren Almoete, Romeo Amista, Warlito Balgosa, Romeo Balingbing, Ramon Barroa,
Monteclaro Batawil, Arnel Bon, Ricardo Capentes, Danilo Dada, Joel dela Cruz, Hernando delos Reyes, Florentino delos Trino, Rogelio
Duerme, Nonito Estrellado, Joseph Falceso, Isidro Flores, Victor Gungon, Sonny Julba, Patricio Lacana, Jr., Felix Lascona, Juanito
Luna, Raul Lozadas, Rommel Magbanua, Rogelio Maribung, Nicolas Mendoza, Ezvener Ogana, Ricky Orano, Reynaldo Ozaraga,
Samuel Padilla, Edwin Parreno, Ireneo Partolan, Juan Pigtuan, Guillermo Pusing, Rodel Sibal, Silvestre Soledad, Jovener Tever,
Virgilio Timajo, Emilio Tomarong, Jr., Virgilio Verdeflor and Joerex Victorino."

On February 9, 1995, the above-named respondents, who were employed as security guards by D’Armoured Security and Investigation
Agency, Inc., petitioner, and assigned to Fortune Tobacco, Inc. (Fortune Tobacco), filed with the Labor Arbiter a complaint for illegal
dismissal and various monetary claims against petitioner and Fortune Tobacco, docketed as NLRC-NCR Case No. 00-02-01148-95.

On June 11, 1998, the Labor Arbiter rendered a Decision, the dispositive portion of which reads:

"WHEREFORE, premises considered, all the respondents except Antonio Cabangon Chua are jointly and severally liable to pay
complainants the total sum of ONE MILLION SEVENTY SEVEN THOUSAND ONE HUNDRED TWENTY FOUR AND TWENTY NINE
CENTAVOS (₱1,077,124.29) for underpayment, overtime pay, legal holiday pay, service incentive leave pay, 13th month pay, illegal
deduction and refund of firearms bond, as indicated in Annex ‘A’.Finally, ten (10%) percent of all sums owing to complainants is hereby
awarded as attorney’s fees.

From the said Decision, Fortune Tobacco interposed an appeal to the National Labor Relations Commission (NLRC). Petitioner did not
appeal. On March 26, 1999, the NLRC rendered its Decision affirming with modification the assailed Arbiter’s Decision in the sense that
the complaint against Fortune Tobacco was dismissed. This Decision became final and executory. Thus, the award specified in the
Decision of the Arbiter became the sole liability of petitioner.

The records were then remanded to the Arbiter for execution.

Upon respondents’ motion, the Arbiter issued a writ of execution. Eventually, the sheriff served a writ of garnishment upon the Chief
Accountant of Foremost Farms, Inc., a corporation with whom petitioner has an existing services agreement. Thus, petitioner’s
receivables with Foremost were garnished.

Petitioner filed with the NLRC a "Motion to Quash/Recall Writ of Execution and Garnishment" which was opposed by respondents.

On March 10, 2000, the Arbiter issued an Order denying the motion and directing the sheriff to release the garnished sum of money to
respondents pro rata.

Petitioner’s motion for reconsideration was denied, hence, it interposed an appeal to the NLRC.

In a Resolution dated July 27, 2000, the NLRC dismissed the appeal for petitioner’s failure to post a bond within the reglementary
period. Its motion for reconsideration was denied in a Resolution dated September 25, 2000.

Forthwith, petitioner filed with the Court of Appeals a petition for certiorari and prohibition with prayer for issuance of a writ of
preliminary injunction.

In a Decision dated December 18, 2001, the Court of Appeals dismissed the petition.

Hence, this petition for review on certiorari.

In this petition, the issue posed is whether the Court of Appeals erred in holding that petitioner’s monthly receivables from the Foremost
Farms, Inc. (garnishee) are not exempt from execution.

The petition lacks merit. We have ruled that an order of execution of a final and executory judgment, as in this case, is not
appealable, otherwise, there would be no end to litigation. 2 On this ground alone, the instant petition is dismissible.

Assuming that an appeal is proper, still we have to deny the instant petition. Section 1, Rule IV of the NLRC Manual on Execution of
Judgment provides:

"Rule IV EXECUTION

SECTION 1. Properties exempt from execution. – Only the properties of the losing party shall be the subject of execution, except:
(a) The losing party’s family home constituted in accordance with the Civil Code or Family Code or as may be provided for by law or in
the absence thereof, the homestead in which he resides, and land necessarily used in connection therewith, subject to the limits fixed
by law;
(b) His necessary clothing, and that of his family;
(c) Household furniture and utensils necessary for housekeeping, and used for that purpose by the losing party such as he may select,
of a value not exceeding the amount fixed by law;
(d) Provisions for individual or family use sufficient for three (3) months;
(e) The professional libraries of attorneys, judges, physicians, pharmacists, dentists, engineers, surveyors, clergymen, teachers, and
other professionals, not exceeding the amount fixed by law;
(f) So much of the earnings of the losing party for his personal services within the month preceding the levy as are necessary for the
support of his family;
(g) All monies, benefits, privileges, or annuities accruing or in any manner growing out of any life insurance;
(h) Tools and instruments necessarily used by him in his trade or employment of a value not exceeding three thousand (P3,000.00)
pesos;
(i) Other properties especially exempted by law."
The above Rule clearly enumerates what properties are exempt from execution. It is apparent that the exemption pertains only to
natural persons and not to juridical entities. On this point, the Court of Appeals correctly ruled that petitioner, being a corporate entity,
does not fall within the exemption, thus:

"We cannot accede to petitioner’s position that the garnished amount is exempt from execution.

Section 13 of Rule 39 of the Rules of Court is plain and clear on what properties are exempt from execution. Section 13 (i) of the Rules
pertinently reads:

‘SECTION 13. Property exempt from execution. – Except as otherwise expressly provided by law, the following property, and no other,
shall be exempt from execution:

(i) So much of the salaries, wages or earnings of the judgment obligor for his personal services within the four months preceding the
levy as are necessary for the support of his family.’

The exemption under this procedural rule should be read in conjunction with the Civil Code, the substantive law which proscribes the
execution of employee’s wages, thus:

‘ART. 1708. The laborer’s wage shall not be subject to execution or attachment, except for debts incurred for food, shelter, clothing and
medical attendance.’

Obviously, the exemption under Rule 39 of the Rules of Court and Article 1708 of the New Civil Code is meant to favor only laboring
men or women whose works are manual. Persons belonging to this class usually look to the reward of a day’s labor for immediate or
present support, and such persons are more in need of the exemption than any other [Gaa vs. Court of Appeals, 140 SCRA 304
(1985)].

In this context, exemptions under this rule are confined only to natural persons and not to juridical entities such as petitioner.
Thus, the rule speaks of salaries, wages and earning from the ‘personal services’ rendered by the judgment obligor. The rule further
requires that such earnings be intended for the support of the judgment debtor’s family.

Necessarily, petitioner which is a corporate entity, does not fall under the exemption. If at all, the exemption refers to petitioner’s
individual employees and not to petitioner as a corporation.

Parenthetically, in a parallel case where a security agency claimed that the guns it gives to its guards are tools and implements exempt
from execution, the Supreme Court had the occasion to rule that the exemption pertains only to natural and not to juridical persons,
thus:

‘However, it would appear that the exemption contemplated by the provision involved is personal, available only to a natural person,
such as a dentist’s dental chair and electric fan (Belen v. de Leon, G.R. No. L-15612, 30 Nov. 1962). As pointed out by the Solicitor
General, if properties used in business are exempt from execution, there can hardly be an instance when a judgment claim can be
enforced against the business entity’ [Pentagon Security and Investigation Agency vs. Jimenez, 192 SCRA 492 (1990)].

It stands to reason that only natural persons whose salaries, wages and earnings are indispensable for his own and that of his family’s
support are exempted under Section 13 (i) of Rule 39 of the Rules of Court. Undeniably, a corporate entity such as petitioner security
agency is not covered by the exemption. WHEREFORE, the petition is hereby DISMISSED.

WHEREFORE, the petition is DENIED. The assailed Decision dated December 18, 2001 of the Court of Appeals in CA-G.R. SP No.
61799 is AFFIRMED IN TOTO. Costs against petitioner.

G.R. No. 144018 June 23, 2003

FAR EAST BANK AND TRUST CO. (now BANK OF THE PHILIPPINE ISLANDS), Petitioner,
vs. TOMAS TOH, SR., AND REGIONAL TRIAL COURT, MANDALUYONG CITY, BRANCH 214, Respondents.

Assailed in this petition for review on certiorari is the Resolution1 dated June 26, 2000 of the Court of Appeals in CA-G.R. SP No.
59234, which dismissed petitioner’s petition and affirmed the Order 2 dated May 26, 2000 of the Regional Trial Court (RTC) of
Mandaluyong City, Branch 214 in Civil Case No. MC-99-643 granting private respondent’s motion for discretionary execution because
of private respondent’s advanced age. Likewise challenged is the appellate court’s Resolution 3 dated July 10, 2000, denying petitioner’s
motion for reconsideration in CA-G.R. SP No. 59234.

On March 17, 1999, Tomas Toh, Sr., private respondent herein, filed Civil Case No. MC-99-643 against petitioner Far East Bank &
Trust Co. (FEBTCO now merged in Bank of the Philippine Islands), seeking recovery of his bank deposits with petitioner in the amount
of ₱2,560,644.68 plus damages. In his complaint, Toh claimed that petitioner had debited, without Toh’s knowledge and consent, said
amount from his savings and current accounts with petitioner bank and then applied the money as payment for the Letters of Credit
availed of by Catmon Sales International Corporation (CASICO) from petitioner. Thus, when Toh issued two checks to Anton
Construction Supply, Inc., they were dishonored by FEBTCO allegedly for having been drawn against insufficient funds, although Toh
alleged as of February 4, 1999, he had an outstanding withdrawable balance of ₱2,560,644.68.

It appears that earlier on August 29, 1997, private respondent Tomas Toh, Sr., together with his sons, Tomas Tan Toh, Jr., and Antonio
Tan Toh, had executed a Comprehensive Security Agreement in favor of petitioner, wherein the Tohs jointly and severally bound
themselves as sureties for the ₱22 million credit facilities, denominated as Omnibus Line and Bills Purchased Line, earlier granted by
petitioner to CASICO. Said credit line expired on June 30, 1998, but the parties renewed the same for another year, subject to the
following amendments: (1) a reduction in the credit line from ₱22 million to ₱7.5 million; and (2) the relief of Toh, Sr., as one of the
sureties of CASICO.

In its answer to private respondent’s complaint, petitioner bank averred that the debiting of Toh’s bank accounts was justified due to his
surety undertaking in the event of the default of CASICO in its payments. Petitioner further claimed that the reduction of credit line does
not relieve Toh, Sr. from his continuing surety obligation, citing the absence of a new surety undertaking or any provisions in the
renewal agreement releasing Toh, Sr., from his personal obligation. It pointed out that CASICO’s default in its obligations became
inevitable after CASICO filed a Petition for Declaration in a State of Suspension of Payments before the Securities and Exchange
Commission (SEC).

On July 30, 1999, private respondent filed a Motion for Judgment on the Pleadings, which petitioner opposed. On October 15, 1999, the
lower court granted the aforesaid motion. In its Order dated March 10, 2000, the lower court rendered a decision in favor of Toh, Sr.,
the dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered ordering the defendant to restore immediately to plaintiff’s savings/current accounts the
amount of P2,560,644.68 plus the stipulated interest thereon from February 17, 1999, until fully restored; and to pay to the plaintiff the
amount of P100,000.00, as moral damages; and the amount of P50,000.00, as and by way of attorney’s fees. With costs against the
defendant.4

On March 29, 2000, Toh Sr., filed a Motion for Discretionary Execution by invoking Section 2, 5 Rule 39 of the Revised Rules of Court.
He prayed that execution pending appeal be granted on the ground of old age and the probability that he may not be able to enjoy his
money deposited in petitioner’s bank. Petitioner duly opposed said motion.

On March 31, 2000, while private respondent’s motion was pending before the RTC, petitioner filed a notice of appeal of the trial court’s
order of March 10, 2000.

On May 26, 2000, the RTC issued its order granting private respondent’s Motion for Discretionary Execution, thus:

WHEREFORE, the motion for discretionary execution is GRANTED. The issuance of the corresponding writ of execution for the
enforcement and satisfaction of the aforesaid decision against the defendant is hereby ordered. 6

On May 30, 2000, petitioner’s appeal was given due course.

In granting Toh’s motion, the trial court held that discretionary execution may be issued upon good reasons by virtue of Section 2(a),7
Rule 39 of the Revised Rules of Court. Citing De Leon v. Soriano,8 where we held that the approach of the end of one’s life span is a
compelling cause for discretionary execution pending appeal, 9 the trial court used the circumstance of Toh’s advanced age as a "good
reason" to allow execution pending appeal.

On June 16, 2000, petitioner decided to forego filing a motion for reconsideration of the trial court’s order of May 26, 2000. Instead, it
brought the matter to the Court of Appeals in a special civil action for certiorari, docketed as CA-G.R. SP No. 59234.

On June 26, 2000, the appellate court decided CA-G.R. SP No. 59234 as follows:

10
WHEREFORE, premises considered, the instant petition for certiorari is hereby DISMISSED.

The Court of Appeals pointed out that petitioner filed its petition for certiorari without filing a motion for reconsideration. It held that the
fact that the lower court already ordered the execution of its judgment did not constitute a situation of extreme urgency as to justify
petitioner’s by-passing the remedy of reconsideration. The appellate court declared it found no grave abuse of discretion on the part of
the trial court in granting discretionary execution. For the trial court had determined that Toh Sr. was already 79 years old and given his
advanced age, might not be able to enjoy the fruits of a judgment favorable to him if he were to wait for the eventual resolution of the
appeal filed by petitioner.

Petitioner filed its Motion for Reconsideration but the Court of Appeals denied it on July 10, 2000.

Hence, this petition where petitioner submits the following issues for our resolution:

1) WHETHER OR NOT THE FILING OF A MOTION FOR RECONSIDERATION IS NECESSARY BEFORE PETITIONER BANK CAN
ASSAIL THE LOWER COURT’S ORDER DATED MAY 26, 2000 IN A SPECIAL CIVIL ACTION FOR CERTIORARI BEFORE THE
HONORABLE COURT OF APPEALS.

2) WHETHER OR NOT THE HONORABLE COURT OF APPEALS GRIEVOUSLY ERRED IN RULING THAT THE LOWER COURT
COMMITTED NO GRAVE ABUSE OF DISCRETION IN ISSUING THE ORDER OF MAY 26, 2000.11

At the outset, it bears stressing that the first issue is now moot. We find that the appellate court did note petitioner’s procedural by-pass
or oversight. Nonetheless it proceeded to rule on the petition on its merits. The appellate court’s action is not wanting in precedents as
a special civil action for certiorari may be given due course, notwithstanding that no motion for reconsideration has been filed before the
lower court under certain exceptional circumstances. 12 These exceptions include instances where: (1) the issue raised is purely one of
law; (2) public interest is involved; (3) the matter is one of urgency; (4) the question of jurisdiction was squarely raised, submitted to,
met and decided by the lower court; and (5) where the order is a patent nullity. 13

Hence, the only relevant issue for our resolution now is whether the Court of Appeals erred in affirming the lower court’s Order granting
execution pending appeal on the ground of advanced age of private respondent Tomas Toh, Sr.

Petitioner contends that the Court of Appeals erred in finding no grave abuse of discretion on the part of the lower court when it granted
the motion for discretionary execution based on private respondent’s bare allegation that he was already 79 years old.

Private respondent avers that Section 2, Rule 49 of the 1997 Rules of Civil Procedure states the requisites for a grant of a motion
pending appeal. All these requirements and conditions were complied with as evidenced by respondent’s motion for discretionary
execution, petitioner’s opposition to the motion and the special order issued by the Regional Trial Court stating the good reason for the
grant of the motion. Hence, the Regional Trial Court could not have committed any grave abuse of discretion. 14

In our view, the Court of Appeals committed no reversible error in sustaining the lower court.1âwphi1 Discretionary execution is
permissible only when "good reasons" exist for immediately executing the judgment before finality or pending appeal or even before the
expiration of the time to appeal. "Good reasons" are compelling circumstances justifying the immediate execution lest judgment
becomes illusory, or the prevailing party may, after the lapse of time, become unable to enjoy it, considering the tactics of the adverse
party who may apparently have no case except to delay. 15

The Rules of Court does not state, enumerate, or give examples of "good reasons" to justify execution. The determination of what is a
good reason must, necessarily, be addressed to the sound discretion of the trial court. In other words, the issuance of the writ of
execution must necessarily be controlled by the judgment of the judge in accordance with his own conscience and by a sense of justice
and equity, free from the control of another’s judgment or conscience. It must be so for discretion implies the absence of a hard and fast
rule.16

In this case, the trial court granted private respondent’s motion for discretionary execution due to his advanced age, citing our ruling in
De Leon v. Soriano.17 It concluded that old age is a "good reason" to allow execution pending appeal as any delay in the final
disposition of the present case may deny private respondent of his right to enjoy fully the money he has with defendant bank. 18 The
Court of Appeals found said ruling in conformity with sound logical precepts, inspired as it is by the probability that the lapse of time
would render the ultimate judgment ineffective. It further stressed that the trial court was in the vantage position to determine whether
private respondent’s advanced age and state of health would merit the execution private respondent prayed for.

In De Leon, we upheld immediate execution of judgment in favor of a 75-year-old woman. We ruled that her need of and right to
immediate execution of the decision in her favor amply satisfied the requirement of a paramount and compelling reason of urgency and
justice, outweighing the security offered by the supersedeas bond. 19 In the subsequent case of Borja v. Court of Appeals,20 we likewise
allowed execution pending appeal in favor of a 76 year-old man on the ground that the appeal will take years to decide with finality, and
he might very well be facing a different judgment from a Court higher than any earthly tribunal and the decision on his complaint, even if
it be in his favor, would have become meaningless as far as he himself was concerned. 21

In the present case, private respondent Toh is already 79 years old. It cannot, by any stretch of imagination, be denied that he is
already of advanced age. Not a few might be fortunate to live beyond 79 years. But no one could claim with certainty that his tribe
would be always blessed with long life.

Private respondent obtained a favorable judgment in the trial court. But that judgment in Civil Case No. MC-99-643 is still on appeal
before the Court of Appeals. It might even reach this Court before the controversy is finally resolved with finality. As well said in Borja,
"while we may not agree that a man of his years is practically moribund, the Court can appreciate his apprehension that he will not be
long for this world and may not enjoy the fruit of the judgment before he finally passes away." 22

Petitioner avers that private respondent’s claim of old age was unsubstantiated by clear and convincing evidence. In essence, petitioner
wants us to re-evaluate this factual issue. Needless to stress, such re-examination is improper in a petition for review on certiorari.
Here, only questions of law should be raised.23 Factual findings of the trial court, when affirmed by the appellate court, bind this Court
and are entitled to utmost respect.24 No cogent reason having been given for us to depart therefrom we shall stand by this salutary rule.

WHEREFORE, the petition is DENIED for lack of merit. The assailed resolutions of the Court of Appeals in CA-G.R. SP No. 59234 are
AFFIRMED. Costs against petitioner.

G.R. No. 154739 January 23, 2007

ROGELIO (ROGER) PANOTES (thru ARACELI BUMATAY, as successor-in-interest), Petitioner,

vs.
CITY TOWNHOUSE DEVELOPMENT CORPORATION, Respondent.

For our resolution is the instant Petition for Review on Certiorari assailing the Decision 1 of the Court of Appeals dated January 29, 2002
in CA-G.R. SP No. 52621 and its Resolution2 dated August 5, 2002 denying the motion for reconsideration.

This case stemmed from a complaint filed with the National Housing Authority (NHA) in April 1979 by Rogelio (Roger) Panotes,
petitioner, then president of the Provident Village Homeowners Association, Inc., against Provident Securities Corporation
(PROSECOR), owner-developer of the Provident Village in Marikina City. The complaint, docketed as NHA Case No. 4175, alleges that
PROSECOR violated Sections 19, 20, 21, 38, and 39 of Presidential Decree (P.D.) No. 957.3 One of the violations complained of was
its failure to provide an open space in the said subdivision.

During the proceedings before the NHA, an ocular inspection showed that the subdivision has no open space. The NHA found,
however, that Block 40, with an area of 22,916 square meters, could be utilized as open space. Thus, in its Resolution dated August 14,
1980, the NHA directed PROSECOR to provide the Provident Village an open space which is Block 40.
In a letter of the same date, then NHA Acting General Manager Antonio A. Fernando ordered PROSECOR to "provide Block 40 of the
subdivision as open space."

PROSECOR was served copies of the NHA Resolution and the letter on August 22, 1980.

Considering that PROSECOR did not appeal from the NHA Resolution, it became final and executory.

When Panotes filed a motion for execution of the NHA Resolution, it was found that the records of the case were "mysteriously
missing." Hence, his motion "was provisionally dismissed" without prejudice.

Meanwhile, PROSECOR sold to City Townhouse Development Corporation (CTDC), respondent, several lots in the subdivision. Among
the lots sold were those comprising Block 40. CTDC was unaware of the NHA Resolution ordering PROSECOR to have Block 40
utilized as open space of Provident Village.

Eventually, Panotes was succeeded by Araceli Bumatay as president of the Provident Village Homeowners Association, Inc. On July
17, 1990, she filed with the Housing and Land Use Regulatory Board (HLURB) a complaint for revival of the NHA Resolution dated
August 14, 1980. Impleaded therein as defendant was CTDC, whom she alleged as successor-in-interest of PROSECOR.

In its answer, CTDC averred, among others, that (1) Araceli Bumatay has no legal personality to file the action for revival of judgment;
(2) there is a pending litigation between CTDC and PROSECOR involving Block 40; and (3) other entities like the Bangko Sentral Ng
Pilipinas and Provident Savings Bank have existing liens over Block 40.

On October 15, 1991, the HLURB, through Housing and Land Use Arbiter Charito M. Bunagan, rendered its Decision in favor of
Bumatay, reviving the NHA Resolution and declaring Block 40 of the Provident Village as "open space" for the said subdivision, thus:

WHEREFORE, premises considered, judgment is hereby rendered declaring Block 40 (with an area of 22,916 square meters) of the
Subdivision Plan Pcs-5683 of the Provident Villages located at Marikina, Metro Manila as the legally mandated "open space" for said
subdivision project; and the Register of Deeds for Marikina is hereby directed to cause the annotation of this fact on the corresponding
Torrens Title which describes and covers said open space; said area to be reserved and utilized exclusively in the manner and for the
purposes provided for under P.D. N0. 957 and P.D. No. 1216.4

Furthermore, let a Cease and Desist Order be, as it is hereby, issued against respondent Provident Securities Corp. and City
Townhouse Development Corporation, restraining said respondents, and all persons, agents, or other associations or corporate entities
acting on their behalf, from asserting or perpetrating any or further acts of dominion or claim over said Block 40, Pcs-5683, the open
space allocated and reserved for the Provident Villages in Marikina, Metro Manila.

On appeal to the HLURB Board of Commissioners, Arbiter Bunagan’s Decision was affirmed with modification in the sense that CTDC
has the right to recover from PROSECOR "what it has lost."

After its motion for reconsideration was denied, CTDC then interposed an appeal to the Office of the President (OP). On February 10,
1999, the OP rendered its Decision affirming in toto the judgment of the HLURB Board of Commissioners. CTDC filed a motion for
reconsideration, but it was denied in a Resolution dated April 14, 1999.

CTDC then filed with the Court of Appeals a petition for review under Rule 43 of the 1997 Rules of Procedure, as amended, docketed
therein as CA-G.R. SP No. 52621.

In a Resolution5 dated May 10, 1999, the Court of Appeals dismissed CTDC’s petition for its failure to attach thereto a certification
against forum shopping. The Court of Appeals also found that the petition was not supported by certified true copies of such material
portions of the records and other pertinent papers referred to in the petition.

CTDC filed a motion for reconsideration which was opposed by Bumatay.

On June 10, 1999, CTDC submitted to the Court of Appeals a certification of non-forum shopping as well as the pleadings mentioned in
its Resolution.

On July 27, 1999, the Court of Appeals issued a Resolution granting CTDC’s motion for reconsideration and reinstated its petition.

On January 29, 2002, the appellate court rendered its Decision reversing the Decision of the OP and dismissing the complaint for
revival of judgment, thus:

IN VIEW OF ALL THE FOREGOING, finding merit in this petition for review, the assailed Decision of the Office of the President dated
February 10, 1999, together with its Resolution dated February 14, 1999 are REVERSED and SET ASIDE, and a new one entered
dismissing HLRB Case No. REM-071790-4052 (NHA Case No. 4175; HLRB Case No. REM-A-1089). Costs against the respondent.

The basic issue for our resolution is whether the NHA Resolution dated August 14, 1980 may be enforced against CTDC.

An action for revival of judgment is no more than a procedural means of securing the execution of a previous judgment which has
become dormant after the passage of five years without it being executed upon motion of the prevailing party. It is not intended to re-
open any issue affecting the merits of the judgment debtor’s case nor the propriety or correctness of the first judgment. 6

Here, the original judgment or the NHA Resolution sought to be revived was between Rogelio Panotes and PROSECOR, not between
petitioner Araceli Bumatay and respondent CTDC.

In maintaining that CTDC is bound by the NHA Resolution, petitioner claims that CTDC is the successor-in-interest of PROSECOR and,
therefore, assumed the obligations of the latter to provide an open space for Provident Village.
CTDC purchased from PROSECOR Block 40 in the said village, not as an owner-developer like PROSECOR, but as an ordinary buyer
of lots. Even after the sale, CTDC did not become an owner-developer. The Deed of Sale executed by CTDC, as buyer, and
PROSECOR, as seller, shows that the subject matter of the sale is the unsold lots comprising Block 40 within the subdivision to CTDC.
The contract does not include the transfer of rights of PROSECOR as owner-developer of the said subdivision. Clearly, there is no
basis to conclude that CTDC is the successor-in-interest of PROSECOR.

It bears stressing that when CTDC bought Block 40, there was no annotation on PROSECOR’s title showing that the property is
encumbered. In fact, the NHA Resolution was not annotated thereon. CTDC is thus a buyer in good faith and for value, and as such,
may not be deprived of the ownership of Block 40. Verily, the NHA Resolution may not be enforced against CTDC.

Section 2 of P.D. No. 1216 provides: Section 2. Section 31 of Presidential Decree No. 957 is hereby amended to read as follows:

Section 31. Roads, Alleys, Sidewalks and Open Spaces. – The owner or developer of a subdivision shall provide adequate roads,
alleys and sidewalks. For subdivision projects of one (1) hectare or more, the owner shall reserve thirty percent (30%) of the gross area
for open space.

Clearly, providing an open space within the subdivision remains to be the obligation of PROSECOR, the owner-developer and the real
party-in-interest in the case for revival of judgment. As aptly held by the Court of Appeals:

Quintessentially, the real party-in-interest in the revival of NHA Case No. 4175 is PROSECOR and not CTDC. PROSECOR was the
lone defendant or respondent in that case against whom judgment was rendered. To insist that CTDC is a successor-in-interest of
PROSECOR may have some truth if we are talking about the ownership of the lots sold by PROSECOR in favor of CTDC as a result of
a civil action between the two. But then, to hold CTDC as the successor-in-interest of PROSECOR as the developer of the subdivision,
is far from realty. CTDC is simply on the same footing as any lot buyer-member of PVHIA.

Furthermore, strangers to a case, like CTDC, are not bound by the judgment rendered by a court. It will not divest the rights of a party
who has not and never been a party to a litigation. Execution of a judgment can be issued only against a party to the action and not
against one who did not have his day in court. 7

WHEREFORE, we DENY the petition and AFFIRM the assailed Decision and Resolution of the Court of Appeals in CA-G.R. SP No.
52621. Costs against petitioner.

July 19, 2017

G.R. No. 216124

RIZAL COMMERCIAL BANKING CORPORATION, Petitioner

vs.
FEDERICO A. SERRA, SPOUSES EDUARDO and HENEDINA ANDUEZA, ATTY. LEOMAR R. LANUZA, MR. JO VITO· C.
SORIANO, ATTY. EDWIN L. RANA, ATTY. PARIS G. REAL, ATTY. PRUDENCIO B. DENSING, JR., HON. JUDGE MAXIMINO R.
ABLES, and ATTY. ERWIN S. OLIVA, Respondents

DECISION

CARPIO, J.:

The Case

Before the Court is a petition for indirect. contempt1 with prayer for the issuance of a temporary restraining order (TRO) filed by
petitioner Rizal Commercial Banking Corporation (RCBC) against respondents Federico A. Serra, et al., for acts allegedly disregarding
this Court's final and executory decisions in G.R. Nos. 103338,2 182478,3 182664,4 and 203241.5

The Facts

On 25 August 2011, RCBC filed a motion for execution before the Regional Trial Court, Makati, Branch 134 (RTC-Makati), in Civil Case
No. 10054. RCBC sought to execute the RTC-Makati's Order dated 5 January 1989, which directed respondent Federico A. Serra
(Serra) to sell to RCBC a parcel of land in Masbate covered by Original Certificate of Title (OCT) No. 0-232 on which the Masbate
Business Center of RCBC is located (subject property).

During the pendency of Civil Case No. 10054, Serra mortgaged the subject property to respondent Spouses Eduardo M. Andueza and
Henedina V. Andueza (Spouses Andueza) on 21 September 2011. On 26 September 2011, Spouses Andueza had the real estate
mortgage annotated on OCT No. 0-232 under Entry No. 2011000513.6

In an Order dated 16 February 2012,7 the RTC-Makati denied RCBC's motion for execution for lack of basis. The RTC-Makati found
that it had been almost 18 years after the 5 January 1989 Order had become final and executory that RCBC filed the motion for
execution. Neither did RCBC file an action to revive judgment within ten years from the date the Order became final.

In an Order dated 26 July 2012, the RTC-Makati denied RCBC's motion for reconsideration.

On 11 October 2012, RCBC filed a petition for review with this Court assailing the RTC-Makati's Orders dated 16 February 2012 and 26
July 2012. The petition was docketed as G.R. No. 203241. In its petition, RCBC prayed for the issuance of a TRO to prevent any
attempt to remove it from the subject property, since Serra and Atty. Gina Besa-Serra had already caused the service of a notice to
vacate and demand for the payment of accrued back rentals, dated 6 September 2012, on RCBC.
On 3 December 2012, the Court issued a TRO, which restrained Serra and the RTC-Makati from implementing and enforcing the
Orders dated 16 February 2012 and 26 July 2012 and from performing any act to remove or threaten RCBC from the subject property.

On 14 February 2013, RCBC had the TRO issued by this Court annotated on OCT No. 0-232 under Entry No. 2013000087.

On 10 July 2013, the Court issued a Decision in G.R. No. 203241 which reads:

WHEREFORE, we GRANT the petition. We SET ASIDE the assailed Orders of the Regional Trial Court of Makati dated 16 February
2012 and 26 July 2012. The Temporary Restraining Order issued by this Court on 3 December 2012 is made permanent. The Regional
Trial Court of Makati City is DIRECTED to issue the writ of execution in Civil Case No. 10054 for the enforcement of the decision
therein. Costs against petitioner.

SO ORDERED.8

The Decision became final and executory on 27 November 2013.9

Meanwhile, Andueza filed a petition for extrajudicial foreclosure of real estate mortgage,10 dated 13 August 2013, with the Provincial
Sheriff of Masbate since Serra defaulted on his loan obligation.

Pursuant to the Decision in G.R. No. 203241, RCBC filed on 27 February 2014 a new motion for execution before the RTC-Makati.
Andueza, a non-party to the case, filed an opposition to the motion for execution with affirmative reliefs.

In an Order dated 14 May 2014,11 the RTC-Makati granted the motion for execution and dismissed the opposition of Andueza. The
RTC-Makati held that the real estate mortgage is inferior to RCBC's right since the mortgage was constituted when Serra no longer had
ownership and free disposal of the subject property. Accordingly, the RTC-Makati ordered the issuance of a writ of execution.

Andueza did not file a motion for reconsideration of the RTC Makati's execution order. Neither did he file an appeal before the Court of
Appeals. Thus, the Order of 14 May 2014 became final.

On 23 June 2014, the RTC-Makati issued a writ of execution.12

Based on his Report,13 Sheriff Roberto V. Harina (Sheriff Harina) of the RTC-Makati attempted to serve on Serra a copy of the Notice
to Comply and a copy of the Writ of Execution. However, Serra was not in his office so Sheriff Harina left with Serra's caretaker copies
of the Notice to Comply and the Writ of Execution, who returned such copies by leaving them at the information table of the Bulwagan
ng Katarungan, Masbate City.

Meanwhile, acting on the petition for extrajudicial foreclosure, respondents Atty. Leomar R. Lanuza (Atty. Lanuza), Clerk of Court and
Ex-Officio Provincial Sheriff of the RTC-Masbate, and Jovito C. Soriano (Soriano), Sheriff of the RTC-Masbate, scheduled the public
auction of the subject property on 26 June 2014 at 2:00 in the aftemoon.14

On 14 June 2014, RCBC filed a petition for injunction15 before the RTC-Masbate, docketed as Civil Case No. 6971, to enjoin the
extrajudicial foreclosure sale and public auction of the subject property. Respondent Judge Maximina R. Ables (Judge Ables), as
Executive Judge of the RTC Masbate, issued a 72-hour TRO on 25 June 2014.

In a Notice of Extrajudicial Foreclosure and Sale of Real Estate Mortgage dated 18 August 2014,16 Soriano scheduled anew the public
auction sale of the subject property on 24 September 2014 at 2:00 in the afternoon.

In the meantime, RCBC filed before the RTC-Makati a motion to divest Serra of his title, invoking Section 10(a), Rule 39 of the Rules of
Court.17

In a Resolution dated 23 September 2014,18 the RTC-Masbate denied RCBC's motion for the issuance of a 20-day TRO.

The public auction sale of the subject property proceeded on 24 September 2014, with Andueza being the highest bidder.19

On 25 September 2014, a Certificate of Sale20 was issued by Soriano, noted by Atty. Lanuza and approved by Judge Ables. The
certificate of sale showed that the subject property was sold to Andueza.

In an Order dated 26 September 2014,21 the RTC-Makati granted RCBC's motion to divest Serra of his title. The. RTC-Makati also
granted RCBC's prayer to have the Registry of Deeds for Masbate cancel Entry No. 2011000513, representing the mortgage of the
subject property. The RTC-Makati stated:

In the same vein, the Court resolves to grant plaintiff's prayer to remove or cancel the mortgage annotation on OCT No. 0-232,
specifically Entry No. 2011000513. As held by this Court in its Order dated 14 May 2014, defendant no longer had ownership and free
disposal of the property by the time he fraudulently mortgaged the property to the Spouses Eduardo M. Andueza and Dina Andueza.
Clearly, mortgagees-spouses Andueza do not have any right or interest over the property and the title to be transferred to plaintiff must
be free from invalid encumbrances, such as that of Entry No. 2011000513 of the Real Estate Mortgage in favor of the Spouses
Andueza.22

In his Comment dated 7 October 2014,23 Serra asserted that due to the public auction sale on 24 September 2014, where the subject
property was sold to Andueza for being the highest bidder, he could no longer sell the subject property to RCBC.

In a motion dated 10 December 2014,24 Spouses Andueza pleaded that the RTC-Makati vacate its 26 September 2014 Order.
Spouses Andueza claimed that the RTC-Makati erred in cancelling the real estate mortgage without the trial court conducting any full-
blown hearing.1âwphi1 They also alleged that they were not parties in Civil Case No. 10054; thus, they are not bound by whatever
decision or order the trial court issued in the case. RCBC opposed the motion.25
On 22 December 2014, RCBC had the Decision in G.R. No. 203241 annotated on OCT No. 0-232 under Entry No. 2014000568.

On 27 January 2015, Andueza, through his counsels respondents Atty. Paris G. Real (Atty. Real) and Atty. Prudencio B. Densing, Jr.
(Atty. Densing) filed before the RTC-Masbate an ex-parte motion for issuance of writ of possession,26 which was granted by Judge
Ables in an Order dated 28 January 2015.27

On 29 January 2015, respondent Atty. Edwin L. Rana (Atty. Rana), Clerk of Court of RTC-Masbate, Branch 47 and Assistant Provincial
Sheriff of RTC-Masbate, issued a writ of possession,28 directing the provincial sheriff to place Andueza in possession of the subject
property, and to eject all persons claiming rights under Serra.

On the same day, Atty. Rana issued a Notice to Vacate,29 directed against Serra and RCBC, and all persons claiming any right under
Serra. The Notice to Vacate was served on RCBC on 30 January 2015. The Notice to Vacate directed RCBC to "vacate the subject
property and to peaceably turn-over its possession in favor of the mortgagee within five (5) working days from receipt hereof."30 The
Notice to Vacate also stated that RCBC will be forcibly evicted from the subject property should it refuse to vacate.

On 4 February 2015, RCBC filed the present petition for indirect contempt with prayer for a TRO to enjoin respondents from enforcing
the Notice to Vacate and the Writ of Possession issued by RTC-Masbate, and to enjoin the respondent Register of Deeds from
annotating on OCT No. 0-232 the Notice to Vacate and Writ of Possession. RCBC pleaded that respondents be declared guilty of
indirect contempt for disregarding the Court's decisions in G.R. Nos. 103338, 182478, 182664, and 203241, as well as the permanent
restraining order in G.R. No. 203241.

On 11 February 2015, the Court issued a TR0,31 enjoining respondents, the RTC-Masbate, the Register of Deeds of Masbate City,
their agents, representatives, and all other persons acting on their behalf from (1) enforcing or causing the enforcement of the Notice to
Vacate and the Writ of Possession, and (2) annotating on OCT No. 0-232 the Notice to Vacate and Writ of Possession.

In its petition for indirect contempt, RCBC argues that Serra is liable for indirect contempt of court for refusing to obey the Court's
restraining order and Decision in G.R. No. 203241, the RTC-Makati's 5 January 1989 Order, and for colluding with Spouses Andueza
for the illegal mortgage and foreclosure of the subject property.

Respondents filed their respective Comments to the petition.

In his Corrected Comment filed on 13 March 2015,32 Serra alleged that he is not liable for indirect contempt of court. He stated:

As it is, the enforcement of the aforesaid Supreme Court Resolution dated July 10, 2013 was directed by the Supreme Court to the
RTC of Makati, Branch 134. In turn, the enforcement of the RTC of Makati, Branch 134's May 14, 2014 Order of Execution and Writ of
Execution dated June 23, 2014, were directed to be enforced by Sheriff Roberto V. Harina. Such being the case, Atty. Serra, to whom
the power and authority to enforce the aforesaid Order and Writ of Execution is not being directed to, cannot be held liable for indirect
contempt of court. x x x.33

Serra further claimed that he did not collude with Spouses Andueza in having the subject property mortgaged in 2011. Serra alleged he
was a mortgagor in good faith and the Spouses Andueza were mortgagees in good faith when they executed a real estate mortgage
over the subject property on 15 August 2011. Spouses Andueza validly annotated the mortgage on the title of the subject property with
the Register of Deeds for Masbate City on 26 September 2011. At the time of the execution of the mortgage, OCT No. 0-232 had no
notice of lis pendens, no adverse claim, and there was no other lien annotated on the title of the subject property. In addition, Serra
alleged that RCBC is guilty of forum-shopping. RCBC filed a petition for certiorari before the Court of Appeals assailing the RTC-
Masbate's denial of RCBC's application for TRO. Meanwhile, RCBC filed with this Court the instant petition for indirect contempt
seeking a similar relief.

In their Comment filed on 19 March 2015,34 Spouses Andueza35 and Atty. Real contended that they are not guilty of indirect contempt
considering that the writ of execution issued by the RTC-Makati was directed to Sheriff Roberto V. Harina, and not to Spouses
Andueza; and the Decision in G.R. No. 203241 was not directed to Spouses Andueza, who are not parties in the case. Spouses
Andueza accused RCBC and its counsels of negligence and lack of prudence in failing to annotate for almost 18 years RCBC's
supposed rights over the subject property on OCT No. 0-232. Spouses Andueza claimed good faith in executing the real estate
mortgage with Serra, after checking with the Register of Deeds of Masbate City that OCT No. 0-232 was free from any lien. RCBC and
its counsels allegedly did not exercise prudence to protect RCBC's interests even after the annotation of the real estate mortgage on
OCT No. 0-232 on 26 September 2011. Neither did RCBC and its counsels inform Spouses Andueza of RCBC's rights over the subject
property. RCBC and its counsels also failed to oppose Andueza's petition for extrajudicial foreclosure, which Andueza filed after Serra
defaulted on his loan obligation. They also failed to file any action to cancel the real estate mortgage with application for TRO to
possibly enjoin the foreclosure proceedings. Spouses Andueza also claimed that RCBC committed forum-shopping when it filed the
present petition since it had a pending petition for certiorari before the Court of Appeals seeking practically the same relief, which is to
prevent the foreclosure of the real estate mortgage and auction sale of the subject property. Likewise, RCBC violated the doctrine of
hierarchy of courts when it filed the present petition directly with this Court, when it should have been filed with the RTC.

In his Comment filed on 26 February 2015, Atty. Densing alleged that he was not a party or a counsel in G.R. No. 203241. He was
merely a collaborating counsel in the extrajudicial foreclosure case filed by Spouses Andueza.

In his Comment filed on 9 July 2015,36 Judge Ables argued that he issued a writ of possession order in favor of Andueza "after finding
mortgagee x x x Andueza to have satisfied all the requirements provided for under Act No. 3135 x x x." He stated that he "simply
performed his ministerial duty and was not in a position to adjudicate and look further on matters not forming part" of the case before
him. Further, he alleged that at the time he issued the writ of possession, there was no injunction from the Court.

In their Comment filed on 11 March 2015,37 Atty. Lanuza, Atty. Rana, and Soriano claimed that they were merely performing their
ministerial duties under A.M. No. 99-10-05-0 which prescribes the procedure in extrajudicial foreclosure of mortgage. The TRO issued
by this Court was specifically addressed to Serra, RTC-Makati, their agents, representatives and any person acting in their behalf. In
short, the TRO was not addressed to respondent clerks of court and sheriff. Further, Atty. Rana issued the Writ of Possession and
Notice to Vacate against Serra, RCBC, and all persons claiming rights under the former pursuant to the Order of RTC-Masbate dated
28 January 2015 and Section l0(c), Rule 39 of the Rules of Court.
In his Comment filed on 6 March 2015,38 respondent Atty. Erwin S. Oliva, as Acting Register of Deeds for the Province of Masbate,
argued that he was merely performing his ministerial duty to approve and annotate documents when all the requirements have been
complied with. The restraining order was allegedly not directed or addressed to his office.

The Issue

The issue in this case is whether respondents are liable for indirect contempt.

The Ruling of the Court

The petition is granted in part.

Indirect Contempt

In Castillejos Consumers Association, Inc. v. Dominguez,39 the Court defined contempt of court, as follows:

Contempt of court has been defined as a willful disregard or disobedience of a public authority.1âwphi1 In its broad sense, contempt is
a disregard of, or disobedience to, the rules or orders of a legislative or judicial body or an interruption of its proceedings by disorderly
behavior or insolent language in its presence or so near thereto as to disturb its proceedings or to impair the respect due to such a
body. In its restricted and more usual sense, contempt comprehends a despising of the authority, justice, or dignity of a court.

There are two (2) kinds of contempt of court, namely: direct and indirect. Indirect contempt or constructive contempt is that which is
committed out of the presence of the court. A person who is guilty of disobedience or of resistance to a lawful order of a court or who
commits any improper conduct tending, directly or indirectly, to impede, obstruct, or degrade the administration of justice may be
punished for indirect contempt.

In this case, RCBC accuses respondents of committing indirect contempt under Section 3, paragraphs (b) and (d), Rule 71 of the Rules
of Court, to wit:

Section 3. Indirect contempt to be punished after charge and hearing. After a charge in writing has been filed, and an opportunity given
to the respondent to comment thereon within such period as may be fixed by the court and to be heard by himself or counsel, a person
guilty of any of the following acts may be punished for indirect contempt:

xxxx

(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;

xxxx

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

xxxx

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)

RCBC alleges that respondents are guilty of indirect contempt for disregarding this Court's final and executory decisions in G.R. Nos.
103338, 182478, 182664, and 203241, which essentially upheld RCBC's superior right over the subject property.

In G.R. No. 103338, which became final and executory on 15 April 1994, the Court found that "the contract of 'LEASE WITH OPTION
TO BUY' between [Serra] and [RCBC] is valid, effective and enforceable, the price being certain and that there was consideration
distinct from the price to support the option given to the lessee."40

In G.R. Nos. 182478 and 182664, the Court issued separate Resolutions dated 30 June 2008 and 22 October 2008, which became
final and executory on 27 August 2008 and 3 March 2009, respectively, finding neither reversible error nor grave abuse of discretion on
the part of the Court of Appeals which held that Serra's donation of the subject property to Ablao was simulated and was done solely to
evade Serra's obligation of selling the subject property to RCBC. Consequently, the deed of donation was null and void.41

The Decision and TRO in G.R. No. 203241

In its Resolution of 3 December 2012 in G.R. No. 203241, the Court issued a TRO which pertinently reads:

xxxx

NOW, THEREFORE, effective immediately and continuing until further orders from this Court, You, the respondent [Federico A. Serra],
and the Regional Trial Court, Br. 134, Makati City, your agents, representatives and anyone acting on your behalf are hereby
RESTRAINED from implementing and enforcing the Orders dated 16 February 2012 and 26 July 2012 of the Regional Trial Court, Br.
134, Makati City, in Civil Case No. 10054 and from performing any act to remove or threaten to remove the petitioner Rizal Commercial
Banking Corporation from the subject property.

x x x x42 (Emphasis supplied)

In its Decision of 10 July 2013 in G.R. No. 203241, the Court directed the RTC-Makati to issue the writ of execution in Civil Case No.
10054 and made the TRO permanent. The Court further stated that:

In the present case, there is no dispute that RCBC seeks to enforce the decision which became final and executory 9n 15 April 1994.
This decision orders Serra to execute and deliver the proper deed of sale in favor of RCBC. However, to evade his obligation to RCBC,
Serra transferred the property to his mother Ablao, who then transferred it to Liok. Serra's action prompted RCBC to file the Annulment
case. Clearly, the delay in the execution of the decision was caused by Serra for his own advantage.x x x.43

Serra and Spouses Andueza are guilty of indirect contempt.

As a party in G.R. No. 203241, Serra cannot feign ignorance of the Court's decision and restraining order in that case. The TRO was
issued on 3 December 2012 while the decision was promulgated on 10 July 2013. By virtue of the TRO, which was made permanent,
Serra was enjoined to perform any act to remove RCBC from the subject property. Yet, by defaulting on his loan obligation with
Andueza, and Andueza's foreclosure of the real estate mortgage, Serra in effect allowed the removal of RCBC from the subject
property. Serra's conduct tended to impede the administration of justice by effectively allowing RCBC to be removed from the premises
of the subject property, in contravention of the clear directive in the decision and restraining order in G.R. No. 203241. Therefore, Serra
is guilty of indirect contempt and accordingly fined ₱30,000.

Serra also claims that "he can no longer execute a Deed of Absolute Sale in favor of [RCBC] because the subject property was already
foreclosed and sold in public auction in favor of Spouses Eduardo and Dina Andueza x x x."44 In other words, Serra alleges that a
supervening event - the foreclosure sale in favor of Spouses Andueza - occurred precluding the execution of the Court's decision in
G.R. No. 203241.

InAbrigo v. Flores,45 the Court held:

A supervening event consists of facts that transpire after the judgment became final and executory, or of new circumstances that
develop after the judgment attained finality, including matters that the parties were not aware of prior to or during the trial because such
matters were not yet in existence at that time. In that event, the interested party may properly seek the stay of execution or the quashal
of the writ of execution, or he may move the court to modify or alter the judgment in order to harmonize it with justice and the
supervening event. The party who alleges a supervening event to stay the execution should necessarily establish the facts by
competent evidence; otherwise, it would become all too easy to frustrate the conclusive effects of a final and immutable judgment.

The Court is not convinced that a supervening event occurred which would effectively prevent the execution of the decision in G.R. No.
203241. While the foreclosure sale proceeded on 24 September 2014, after the finality of the decision in G.R. No. 203241, the real
estate mortgage in favor of Spouses Andueza was executed on 21 September 2011 while G.R. No. 203241 was pending. Serra could
not possibly be unaware that a foreclosure sale would likely transpire since he was the mortgagor who defaulted on his loan obligation.
Clearly, Serra performed acts intended to defeat and circumvent the conclusive effects of the final decision in G.R. No. 203241. Serra
defaulted on his loan obligation and did not lift a finger to prevent Andueza or any person for that matter from removing RCBC from the
subject property.

The 5 January 1989 Order of the RTC-Makati, which directed Serra to sell to RCBC the subject property, became final and executory
on 15 April 1994.1âwphi1 Serra has delayed for 23 years the execution of this Order. As the Court observed in G.R. No. 203241, "Serra
has continued to evade his obligation by raising issues of technicality." Clearly, Serra deserves to be sanctioned for such reprehensible
conduct of delaying for 23 years the execution of the final and executory order of the RTC-Makati, as affirmed by this Court in G.R. No.
203241.

Despite being non-parties in G.R. No. 203241, Spouses Andueza have notice of the pendency of such action. On 14 February 2013,
RCBC had the TRO issued by this Court annotated on OCT No. 0-232 under Entry No. 2013000087. Therefore, Spouses Andueza
have actual knowledge of the Court's TRO in G.R. No. 203241 prior to their filing of the petition for extrajudicial foreclosure of the
subject property on 13 August 2013. Further, the decision in G.R. No. 203241 was promulgated prior to the Spouses Andueza's
initiation of foreclosure proceedings. Spouses Andueza cannot therefore invoke lack of knowledge of RCBC's interest over the subject
property when they filed the petition for extrajudicial foreclosure. Hence, such knowledge should have prevented, or at the very least
cautioned, the Spouses Andueza from proceeding with the foreclosure which had the effect of removing RCBC from the property, in
contravention of the clear language of the Court in G.R. No. 203241. In other words, the Spouses Andueza's act of instituting the
petition for extrajudicial foreclosure, which would ultimately result in removing RCBC from the subject property, obviously tended to
impede the administration of justice and thus constitutes indirect contempt of court. Accordingly, the Spouses Andueza are likewise
adjudged guilty of indirect contempt and fined ₱30,000.

The other respondents, namely the counsels of the Spouses Andueza, merely acted to protect the interests of their clients over the
subject property while the public respondents simply acted pursuant to their ministerial duties and responsibilities in foreclosure
proceedings. These acts do not constitute indirect contempt of court absent any clear and convincing evidence that they willfully
disobeyed the _decision and restraining order in G.R. No. 203241 or committed any act which tended to impede the administration of
justice.

The TRO must be lifted.

The TRO earlier issued in this case must be lifted. The Court notes that RCBC filed a petition for certiorari with the Court of Appeals,
docketed as CA-G.R. SP No. 137314, assailing the denial by Judge Jose C. Fortuno of RTC-Masbate, Branch 48 of its motion for
issuance of a TRO, and praying for a writ of injunction to enjoin "respondent Clerk of Court and Ex Officio Sheriff of the Regional Trial
Court of Mas bate City, Deputy Sheriff Soriano, respondent Spouses Andueza, the Register of Deeds for the Province of Masbate, and
respondent-intervenor Federico A. Serra, from further performing any act done pursuant to or resulting from the illegal foreclosure sale
of the subject property, and any other act pursuant to or resulting from the foreclosure sale that has the effect of ousting petitioner
RCBC from the subject property,."46 RCBC's certiorari petition before the Court of Appeals questions the proceedings resulting from
the extrajudicial foreclosure sale of the subject property and similarly involves the respondents impleaded in this contempt petition.
Since the certiorari petition before the Court of Appeals likewise prays for an injunction writ and clearly involves the extrajudicial
foreclosure of the subject property, the Court of Appeals must be given the opportunity to resolve the propriety of such prayer for
injunction, and ultimately the validity of RCBC's claims over the subject property. This petition for indirect contempt is not the proper
action to determine the validity of the mortgage between Serra and the Spouses Andueza, and the foreclosure proceedings resulting
from such mortgage.
WHEREFORE, the petition is GRANTED IN PART. Respondents Federico A. Serra and Spouses Eduardo and Henedina Andueza are
found guilty of indirect contempt of court and accordingly ordered to pay a fine of Thirty Thousand Pesos (₱30,000.00) each. The
Temporary Restraining Order issued earlier is hereby LIFTED.

G.R. No. 196049 June 26, 2013

MINORU FUJIKI, PETITIONER,

vs.
MARIA PAZ GALELA MARINAY, SHINICHI MAEKARA, LOCAL CIVIL REGISTRAR OF QUEZON CITY, AND THE
ADMINISTRATOR AND CIVIL REGISTRAR GENERAL OF THE NATIONAL STATISTICS OFFICE, RESPONDENTS.

DECISION

CARPIO, J.:

The Case

This is a direct recourse to this Court from the Regional Trial Court (RTC), Branch 107, Quezon City, through a petition for review on
certiorari under Rule 45 of the Rules of Court on a pure question of law. The petition assails the Order 1 dated 31 January 2011 of the
RTC in Civil Case No. Q-11-68582 and its Resolution dated 2 March 2011 denying petitioner’s Motion for Reconsideration. The RTC
dismissed the petition for "Judicial Recognition of Foreign Judgment (or Decree of Absolute Nullity of Marriage)" based on improper
venue and the lack of personality of petitioner, Minoru Fujiki, to file the petition.

The Facts

Petitioner Minoru Fujiki (Fujiki) is a Japanese national who married respondent Maria Paz Galela Marinay (Marinay) in the Philippines2
on 23 January 2004. The marriage did not sit well with petitioner’s parents. Thus, Fujiki could not bring his wife to Japan where he
resides. Eventually, they lost contact with each other.

In 2008, Marinay met another Japanese, Shinichi Maekara (Maekara). Without the first marriage being dissolved, Marinay and Maekara
were married on 15 May 2008 in Quezon City, Philippines. Maekara brought Marinay to Japan. However, Marinay allegedly suffered
physical abuse from Maekara. She left Maekara and started to contact Fujiki. 3

Fujiki and Marinay met in Japan and they were able to reestablish their relationship. In 2010, Fujiki helped Marinay obtain a judgment
from a family court in Japan which declared the marriage between Marinay and Maekara void on the ground of bigamy. 4 On 14 January
2011, Fujiki filed a petition in the RTC entitled: "Judicial Recognition of Foreign Judgment (or Decree of Absolute Nullity of Marriage)."
Fujiki prayed that (1) the Japanese Family Court judgment be recognized; (2) that the bigamous marriage between Marinay and
Maekara be declared void ab initio under Articles 35(4) and 41 of the Family Code of the Philippines; 5 and (3) for the RTC to direct the
Local Civil Registrar of Quezon City to annotate the Japanese Family Court judgment on the Certificate of Marriage between Marinay
and Maekara and to endorse such annotation to the Office of the Administrator and Civil Registrar General in the National Statistics
Office (NSO).6

The Ruling of the Regional Trial Court

A few days after the filing of the petition, the RTC immediately issued an Order dismissing the petition and withdrawing the case from its
active civil docket.7 The RTC cited the following provisions of the Rule on Declaration of Absolute Nullity of Void Marriages and
Annulment of Voidable Marriages (A.M. No. 02-11-10-SC):

Sec. 2. Petition for declaration of absolute nullity of void marriages. –

(a) Who may file. – A petition for declaration of absolute nullity of void marriage may be filed solely by the husband or the wife.

xxxx

Sec. 4. Venue. – The petition shall be filed in the Family Court of the province or city where the petitioner or the respondent has been
residing for at least six months prior to the date of filing, or in the case of a non-resident respondent, where he may be found in the
Philippines, at the election of the petitioner. x x x

The RTC ruled, without further explanation, that the petition was in "gross violation" of the above provisions. The trial court based its
dismissal on Section 5(4) of A.M. No. 02-11-10-SC which provides that "[f]ailure to comply with any of the preceding requirements may
be a ground for immediate dismissal of the petition."8 Apparently, the RTC took the view that only "the husband or the wife," in this case
either Maekara or Marinay, can file the petition to declare their marriage void, and not Fujiki.

Fujiki moved that the Order be reconsidered. He argued that A.M. No. 02-11-10-SC contemplated ordinary civil actions for declaration
of nullity and annulment of marriage. Thus, A.M. No. 02-11-10-SC does not apply. A petition for recognition of foreign judgment is a
special proceeding, which "seeks to establish a status, a right or a particular fact," 9 and not a civil action which is "for the enforcement
or protection of a right, or the prevention or redress of a wrong." 10 In other words, the petition in the RTC sought to establish (1) the
status and concomitant rights of Fujiki and Marinay as husband and wife and (2) the fact of the rendition of the Japanese Family Court
judgment declaring the marriage between Marinay and Maekara as void on the ground of bigamy. The petitioner contended that the
Japanese judgment was consistent with Article 35(4) of the Family Code of the Philippines 11 on bigamy and was therefore entitled to
recognition by Philippine courts.12

In any case, it was also Fujiki’s view that A.M. No. 02-11-10-SC applied only to void marriages under Article 36 of the Family Code on
the ground of psychological incapacity.13 Thus, Section 2(a) of A.M. No. 02-11-10-SC provides that "a petition for declaration of
absolute nullity of void marriages may be filed solely by the husband or the wife." To apply Section 2(a) in bigamy would be absurd
because only the guilty parties would be permitted to sue. In the words of Fujiki, "[i]t is not, of course, difficult to realize that the party
interested in having a bigamous marriage declared a nullity would be the husband in the prior, pre-existing marriage."14 Fujiki had
material interest and therefore the personality to nullify a bigamous marriage.

Fujiki argued that Rule 108 (Cancellation or Correction of Entries in the Civil Registry) of the Rules of Court is applicable. Rule 108 is
the "procedural implementation" of the Civil Register Law (Act No. 3753)15 in relation to Article 413 of the Civil Code.16 The Civil
Register Law imposes a duty on the "successful petitioner for divorce or annulment of marriage to send a copy of the final decree of the
court to the local registrar of the municipality where the dissolved or annulled marriage was solemnized." 17 Section 2 of Rule 108
provides that entries in the civil registry relating to "marriages," "judgments of annulments of marriage" and "judgments declaring
marriages void from the beginning" are subject to cancellation or correction. 18 The petition in the RTC sought (among others) to
annotate the judgment of the Japanese Family Court on the certificate of marriage between Marinay and Maekara.

Fujiki’s motion for reconsideration in the RTC also asserted that the trial court "gravely erred" when, on its own, it dismissed the petition
based on improper venue. Fujiki stated that the RTC may be confusing the concept of venue with the concept of jurisdiction, because it
is lack of jurisdiction which allows a court to dismiss a case on its own. Fujiki cited Dacoycoy v. Intermediate Appellate Court19 which
held that the "trial court cannot pre-empt the defendant’s prerogative to object to the improper laying of the venue by motu proprio
dismissing the case."20 Moreover, petitioner alleged that the trial court should not have "immediately dismissed" the petition under
Section 5 of A.M. No. 02-11-10-SC because he substantially complied with the provision.

On 2 March 2011, the RTC resolved to deny petitioner’s motion for reconsideration. In its Resolution, the RTC stated that A.M. No. 02-
11-10-SC applies because the petitioner, in effect, prays for a decree of absolute nullity of marriage. 21 The trial court reiterated its two
grounds for dismissal, i.e. lack of personality to sue and improper venue under Sections 2(a) and 4 of A.M. No. 02-11-10-SC. The RTC
considered Fujiki as a "third person"22 in the proceeding because he "is not the husband in the decree of divorce issued by the
Japanese Family Court, which he now seeks to be judicially recognized, x x x." 23 On the other hand, the RTC did not explain its ground
of impropriety of venue. It only said that "[a]lthough the Court cited Sec. 4 (Venue) x x x as a ground for dismissal of this case[,] it
should be taken together with the other ground cited by the Court x x x which is Sec. 2(a) x x x." 24

The RTC further justified its motu proprio dismissal of the petition based on Braza v. The City Civil Registrar of Himamaylan City,
Negros Occidental.25 The Court in Braza ruled that "[i]n a special proceeding for correction of entry under Rule 108 (Cancellation or
Correction of Entries in the Original Registry), the trial court has no jurisdiction to nullify marriages x x x." 26 Braza emphasized that the
"validity of marriages as well as legitimacy and filiation can be questioned only in a direct action seasonably filed by the proper party,
and not through a collateral attack such as [a] petition [for correction of entry] x x x." 27

The RTC considered the petition as a collateral attack on the validity of marriage between Marinay and Maekara. The trial court held
that this is a "jurisdictional ground" to dismiss the petition.28 Moreover, the verification and certification against forum shopping of the
petition was not authenticated as required under Section 5 29 of A.M. No. 02-11-10-SC. Hence, this also warranted the "immediate
dismissal" of the petition under the same provision.

The Manifestation and Motion of the Office of the Solicitor General and the Letters of Marinay and Maekara

On 30 May 2011, the Court required respondents to file their comment on the petition for review.30 The public respondents, the Local
Civil Registrar of Quezon City and the Administrator and Civil Registrar General of the NSO, participated through the Office of the
Solicitor General. Instead of a comment, the Solicitor General filed a Manifestation and Motion. 31

The Solicitor General agreed with the petition. He prayed that the RTC’s "pronouncement that the petitioner failed to comply with x x x
A.M. No. 02-11-10-SC x x x be set aside" and that the case be reinstated in the trial court for further proceedings. 32 The Solicitor
General argued that Fujiki, as the spouse of the first marriage, is an injured party who can sue to declare the bigamous marriage
between Marinay and Maekara void. The Solicitor General cited Juliano-Llave v. Republic33 which held that Section 2(a) of A.M. No. 02-
11-10-SC does not apply in cases of bigamy. In Juliano-Llave, this Court explained:

[t]he subsequent spouse may only be expected to take action if he or she had only discovered during the connubial period that the
marriage was bigamous, and especially if the conjugal bliss had already vanished. Should parties in a subsequent marriage benefit
from the bigamous marriage, it would not be expected that they would file an action to declare the marriage void and thus, in such
circumstance, the "injured spouse" who should be given a legal remedy is the one in a subsisting previous marriage. The latter is
clearly the aggrieved party as the bigamous marriage not only threatens the financial and the property ownership aspect of the prior
marriage but most of all, it causes an emotional burden to the prior spouse. The subsequent marriage will always be a reminder of the
infidelity of the spouse and the disregard of the prior marriage which sanctity is protected by the Constitution. 34

The Solicitor General contended that the petition to recognize the Japanese Family Court judgment may be made in a Rule 108
proceeding.35 In Corpuz v. Santo Tomas,36 this Court held that "[t]he recognition of the foreign divorce decree may be made in a Rule
108 proceeding itself, as the object of special proceedings (such as that in Rule 108 of the Rules of Court) is precisely to establish the
status or right of a party or a particular fact." 37 While Corpuz concerned a foreign divorce decree, in the present case the Japanese
Family Court judgment also affected the civil status of the parties, especially Marinay, who is a Filipino citizen.

The Solicitor General asserted that Rule 108 of the Rules of Court is the procedure to record "[a]cts, events and judicial decrees
concerning the civil status of persons" in the civil registry as required by Article 407 of the Civil Code. In other words, "[t]he law requires
the entry in the civil registry of judicial decrees that produce legal consequences upon a person’s legal capacity and status x x x." 38 The
Japanese Family Court judgment directly bears on the civil status of a Filipino citizen and should therefore be proven as a fact in a Rule
108 proceeding.

Moreover, the Solicitor General argued that there is no jurisdictional infirmity in assailing a void marriage under Rule 108, citing De
Castro v. De Castro39 and Niñal v. Bayadog40 which declared that "[t]he validity of a void marriage may be collaterally attacked."41

Marinay and Maekara individually sent letters to the Court to comply with the directive for them to comment on the petition. 42 Maekara
wrote that Marinay concealed from him the fact that she was previously married to Fujiki. 43 Maekara also denied that he inflicted any
form of violence on Marinay.44 On the other hand, Marinay wrote that she had no reason to oppose the petition.45 She would like to
maintain her silence for fear that anything she say might cause misunderstanding between her and Fujiki. 46

The Issues
Petitioner raises the following legal issues:

(1) Whether the Rule on Declaration of Absolute Nullity of Void Marriages and Annulment of Voidable Marriages (A.M. No. 02-11-10-
SC) is applicable.

(2) Whether a husband or wife of a prior marriage can file a petition to recognize a foreign judgment nullifying the subsequent marriage
between his or her spouse and a foreign citizen on the ground of bigamy.

(3) Whether the Regional Trial Court can recognize the foreign judgment in a proceeding for cancellation or correction of entries in the
Civil Registry under Rule 108 of the Rules of Court.

The Ruling of the Court

We grant the petition.

The Rule on Declaration of Absolute Nullity of Void Marriages and Annulment of Voidable Marriages (A.M. No. 02-11-10-SC) does not
apply in a petition to recognize a foreign judgment relating to the status of a marriage where one of the parties is a citizen of a foreign
country. Moreover, in Juliano-Llave v. Republic,47 this Court held that the rule in A.M. No. 02-11-10-SC that only the husband or wife
can file a declaration of nullity or annulment of marriage "does not apply if the reason behind the petition is bigamy." 48

I.

For Philippine courts to recognize a foreign judgment relating to the status of a marriage where one of the parties is a citizen of a
foreign country, the petitioner only needs to prove the foreign judgment as a fact under the Rules of Court. To be more specific, a copy
of the foreign judgment may be admitted in evidence and proven as a fact under Rule 132, Sections 24 and 25, in relation to Rule 39,
Section 48(b) of the Rules of Court.49 Petitioner may prove the Japanese Family Court judgment through (1) an official publication or (2)
a certification or copy attested by the officer who has custody of the judgment. If the office which has custody is in a foreign country
such as Japan, the certification may be made by the proper diplomatic or consular officer of the Philippine foreign service in Japan and
authenticated by the seal of office.50

To hold that A.M. No. 02-11-10-SC applies to a petition for recognition of foreign judgment would mean that the trial court and the
parties should follow its provisions, including the form and contents of the petition, 51 the service of summons,52 the investigation of the
public prosecutor,53 the setting of pre-trial,54 the trial55 and the judgment of the trial court.56 This is absurd because it will litigate the
case anew. It will defeat the purpose of recognizing foreign judgments, which is "to limit repetitive litigation on claims and issues." 57 The
interpretation of the RTC is tantamount to relitigating the case on the merits. In Mijares v. Rañada,58 this Court explained that "[i]f every
judgment of a foreign court were reviewable on the merits, the plaintiff would be forced back on his/her original cause of action,
rendering immaterial the previously concluded litigation." 59

A foreign judgment relating to the status of a marriage affects the civil status, condition and legal capacity of its parties. However, the
effect of a foreign judgment is not automatic. To extend the effect of a foreign judgment in the Philippines, Philippine courts must
determine if the foreign judgment is consistent with domestic public policy and other mandatory laws.60 Article 15 of the Civil Code
provides that "[l]aws relating to family rights and duties, or to the status, condition and legal capacity of persons are binding upon
citizens of the Philippines, even though living abroad." This is the rule of lex nationalii in private international law. Thus, the Philippine
State may require, for effectivity in the Philippines, recognition by Philippine courts of a foreign judgment affecting its citizen, over whom
it exercises personal jurisdiction relating to the status, condition and legal capacity of such citizen.

A petition to recognize a foreign judgment declaring a marriage void does not require relitigation under a Philippine court of the case as
if it were a new petition for declaration of nullity of marriage. Philippine courts cannot presume to know the foreign laws under which the
foreign judgment was rendered. They cannot substitute their judgment on the status, condition and legal capacity of the foreign citizen
who is under the jurisdiction of another state. Thus, Philippine courts can only recognize the foreign judgment as a fact according to the
rules of evidence.

Section 48(b), Rule 39 of the Rules of Court provides that a foreign judgment or final order against a person creates a "presumptive
evidence of a right as between the parties and their successors in interest by a subsequent title." Moreover, Section 48 of the Rules of
Court states that "the judgment or final order may be repelled by evidence of a want of jurisdiction, want of notice to the party, collusion,
fraud, or clear mistake of law or fact." Thus, Philippine courts exercise limited review on foreign judgments. Courts are not allowed to
delve into the merits of a foreign judgment. Once a foreign judgment is admitted and proven in a Philippine court, it can only be repelled
on grounds external to its merits, i.e. , "want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact."
The rule on limited review embodies the policy of efficiency and the protection of party expectations, 61 as well as respecting the
jurisdiction of other states.62

Since 1922 in Adong v. Cheong Seng Gee,63 Philippine courts have recognized foreign divorce decrees between a Filipino and a
foreign citizen if they are successfully proven under the rules of evidence. 64 Divorce involves the dissolution of a marriage, but the
recognition of a foreign divorce decree does not involve the extended procedure under A.M. No. 02-11-10-SC or the rules of ordinary
trial. While the Philippines does not have a divorce law, Philippine courts may, however, recognize a foreign divorce decree under the
second paragraph of Article 26 of the Family Code, to capacitate a Filipino citizen to remarry when his or her foreign spouse obtained a
divorce decree abroad.65

There is therefore no reason to disallow Fujiki to simply prove as a fact the Japanese Family Court judgment nullifying the marriage
between Marinay and Maekara on the ground of bigamy. While the Philippines has no divorce law, the Japanese Family Court
judgment is fully consistent with Philippine public policy, as bigamous marriages are declared void from the beginning under Article
35(4) of the Family Code. Bigamy is a crime under Article 349 of the Revised Penal Code. Thus, Fujiki can prove the existence of the
Japanese Family Court judgment in accordance with Rule 132, Sections 24 and 25, in relation to Rule 39, Section 48(b) of the Rules of
Court.

II.
Since the recognition of a foreign judgment only requires proof of fact of the judgment, it may be made in a special proceedi ng for
cancellation or correction of entries in the civil registry under Rule 108 of the Rules of Court. Rule 1, Section 3 of the Rules of Court
provides that "[a] special proceeding is a remedy by which a party seeks to establish a status, a right, or a particular fact." Rule 108
creates a remedy to rectify facts of a person’s life which are recorded by the State pursuant to the Civil Register Law or Act No. 3753.
These are facts of public consequence such as birth, death or marriage, 66 which the State has an interest in recording. As noted by the
Solicitor General, in Corpuz v. Sto. Tomas this Court declared that "[t]he recognition of the foreign divorce decree may be made in a
Rule 108 proceeding itself, as the object of special proceedings (such as that in Rule 108 of the Rules of Court) is precisely to establish
the status or right of a party or a particular fact."67

Rule 108, Section 1 of the Rules of Court states:

Sec. 1. Who may file petition. — Any person interested in any act, event, order or decree concerning the civil status of persons
which has been recorded in the civil register, may file a verified petition for the cancellation or correction of any entry relating
thereto, with the Regional Trial Court of the province where the corresponding civil registry is located. (Emphasis supplied)

Fujiki has the personality to file a petition to recognize the Japanese Family Court judgment nullifying the marriage between Marinay
and Maekara on the ground of bigamy because the judgment concerns his civil status as married to Marinay. For the same reason he
has the personality to file a petition under Rule 108 to cancel the entry of marriage between Marinay and Maekara in the civil registry on
the basis of the decree of the Japanese Family Court.

There is no doubt that the prior spouse has a personal and material interest in maintaining the integrity of the marriage he contracted
and the property relations arising from it. There is also no doubt that he is interested in the cancellation of an entry of a bigamous
marriage in the civil registry, which compromises the public record of his marriage. The interest derives from the substantive right of the
spouse not only to preserve (or dissolve, in limited instances68) his most intimate human relation, but also to protect his property
interests that arise by operation of law the moment he contracts marriage.69 These property interests in marriage include the right to be
supported "in keeping with the financial capacity of the family"70 and preserving the property regime of the marriage.71

Property rights are already substantive rights protected by the Constitution, 72 but a spouse’s right in a marriage extends further to
relational rights recognized under Title III ("Rights and Obligations between Husband and Wife") of the Family Code. 73 A.M. No. 02-11-
10-SC cannot "diminish, increase, or modify" the substantive right of the spouse to maintain the integrity of his marriage. 74 In any case,
Section 2(a) of A.M. No. 02-11-10-SC preserves this substantive right by limiting the personality to sue to the husband or the wife of the
union recognized by law.

Section 2(a) of A.M. No. 02-11-10-SC does not preclude a spouse of a subsisting marriage to question the validity of a subsequent
marriage on the ground of bigamy. On the contrary, when Section 2(a) states that "[a] petition for declaration of absolute nullity of void
marriage may be filed solely by the husband or the wife"75—it refers to the husband or the wife of the subsisting marriage. Under
Article 35(4) of the Family Code, bigamous marriages are void from the beginning. Thus, the parties in a bigamous marriage are neither
the husband nor the wife under the law. The husband or the wife of the prior subsisting marriage is the one who has the personality to
file a petition for declaration of absolute nullity of void marriage under Section 2(a) of A.M. No. 02-11-10-SC.

Article 35(4) of the Family Code, which declares bigamous marriages void from the beginning, is the civil aspect of Article 349 of the
Revised Penal Code,76 which penalizes bigamy. Bigamy is a public crime. Thus, anyone can initiate prosecution for bigamy because
any citizen has an interest in the prosecution and prevention of crimes. 77 If anyone can file a criminal action which leads to the
declaration of nullity of a bigamous marriage, 78 there is more reason to confer personality to sue on the husband or the wife of a
subsisting marriage. The prior spouse does not only share in the public interest of prosecuting and preventing crimes, he is also
personally interested in the purely civil aspect of protecting his marriage.

When the right of the spouse to protect his marriage is violated, the spouse is clearly an injured party and is therefore interested in the
judgment of the suit.79 Juliano-Llave ruled that the prior spouse "is clearly the aggrieved party as the bigamous marriage not only
threatens the financial and the property ownership aspect of the prior marriage but most of all, it causes an emotional burden to the
prior spouse."80 Being a real party in interest, the prior spouse is entitled to sue in order to declare a bigamous marriage void. For this
purpose, he can petition a court to recognize a foreign judgment nullifying the bigamous marriage and judicially declare as a fact that
such judgment is effective in the Philippines. Once established, there should be no more impediment to cancel the entry of the
bigamous marriage in the civil registry.

III.

In Braza v. The City Civil Registrar of Himamaylan City, Negros Occidental, this Court held that a "trial court has no jurisdiction to nullify
marriages" in a special proceeding for cancellation or correction of entry under Rule 108 of the Rules of Court. 81 Thus, the "validity of
marriage[] x x x can be questioned only in a direct action" to nullify the marriage. 82 The RTC relied on Braza in dismissing the petition
for recognition of foreign judgment as a collateral attack on the marriage between Marinay and Maekara.

Braza is not applicable because Braza does not involve a recognition of a foreign judgment nullifying a bigamous marriage where one
of the parties is a citizen of the foreign country.

To be sure, a petition for correction or cancellation of an entry in the civil registry cannot substitute for an action to invalidate a
marriage. A direct action is necessary to prevent circumvention of the substantive and procedural safeguards of marriage under the
Family Code, A.M. No. 02-11-10-SC and other related laws. Among these safeguards are the requirement of proving the limited
grounds for the dissolution of marriage,83 support pendente lite of the spouses and children,84 the liquidation, partition and distribution of
the properties of the spouses,85 and the investigation of the public prosecutor to determine collusion. 86 A direct action for declaration of
nullity or annulment of marriage is also necessary to prevent circumvention of the jurisdiction of the Family Courts under the Family
Courts Act of 1997 (Republic Act No. 8369), as a petition for cancellation or correction of entries in the civil registry may be filed in the
Regional Trial Court "where the corresponding civil registry is located." 87 In other words, a Filipino citizen cannot dissolve his marriage
by the mere expedient of changing his entry of marriage in the civil registry.

However, this does not apply in a petition for correction or cancellation of a civil registry entry based on the recognition of a foreign
judgment annulling a marriage where one of the parties is a citizen of the foreign country. There is neither circumvention of the
substantive and procedural safeguards of marriage under Philippine law, nor of the jurisdiction of Family Courts under R.A. No. 8369. A
recognition of a foreign judgment is not an action to nullify a marriage. It is an action for Philippine courts to recognize the effectivity of a
foreign judgment, which presupposes a case which was already tried and decided under foreign law. The procedure in A.M. No.
02-11-10-SC does not apply in a petition to recognize a foreign judgment annulling a bigamous marriage where one of the parties is a
citizen of the foreign country. Neither can R.A. No. 8369 define the jurisdiction of the foreign court.

Article 26 of the Family Code confers jurisdiction on Philippine courts to extend the effect of a foreign divorce decree to a Filipino
spouse without undergoing trial to determine the validity of the dissolution of the marriage. The second paragraph of Article 26 of the
Family Code provides that "[w]here a marriage between a Filipino citizen and a foreigner is validly celebrated and a divorce is thereafter
validly obtained abroad by the alien spouse capacitating him or her to remarry, the Filipino spouse shall have capacity to remarry under
Philippine law." In Republic v. Orbecido,88 this Court recognized the legislative intent of the second paragraph of Article 26 which is "to
avoid the absurd situation where the Filipino spouse remains married to the alien spouse who, after obtaining a divorce, is no longer
married to the Filipino spouse"89 under the laws of his or her country. The second paragraph of Article 26 of the Family Code only
authorizes Philippine courts to adopt the effects of a foreign divorce decree precisely because the Philippines does not allow divorce.
Philippine courts cannot try the case on the merits because it is tantamount to trying a case for divorce.

The second paragraph of Article 26 is only a corrective measure to address the anomaly that results from a marriage between a
Filipino, whose laws do not allow divorce, and a foreign citizen, whose laws allow divorce. The anomaly consists in the Filipino spouse
being tied to the marriage while the foreign spouse is free to marry under the laws of his or her country. The correction is made by
extending in the Philippines the effect of the foreign divorce decree, which is already effective in the country where it was rendered. The
second paragraph of Article 26 of the Family Code is based on this Court’s decision in Van Dorn v. Romillo90 which declared that the
Filipino spouse "should not be discriminated against in her own country if the ends of justice are to be served."91

The principle in Article 26 of the Family Code applies in a marriage between a Filipino and a foreign citizen who obtains a foreign
judgment nullifying the marriage on the ground of bigamy. The Filipino spouse may file a petition abroad to declare the marriage void on
the ground of bigamy. The principle in the second paragraph of Article 26 of the Family Code applies because the foreign spouse, after
the foreign judgment nullifying the marriage, is capacitated to remarry under the laws of his or her country. If the foreign judgment is not
recognized in the Philippines, the Filipino spouse will be discriminated—the foreign spouse can remarry while the Filipino spouse
cannot remarry.

Under the second paragraph of Article 26 of the Family Code, Philippine courts are empowered to correct a situation where the Filipino
spouse is still tied to the marriage while the foreign spouse is free to marry. Moreover, notwithstanding Article 26 of the Family Code,
Philippine courts already have jurisdiction to extend the effect of a foreign judgment in the Philippines to the extent that the foreign
judgment does not contravene domestic public policy. A critical difference between the case of a foreign divorce decree and a foreign
judgment nullifying a bigamous marriage is that bigamy, as a ground for the nullity of marriage, is fully consistent with Philippine public
policy as expressed in Article 35(4) of the Family Code and Article 349 of the Revised Penal Code. The Filipino spouse has the option
to undergo full trial by filing a petition for declaration of nullity of marriage under A.M. No. 02-11-10-SC, but this is not the only remedy
available to him or her. Philippine courts have jurisdiction to recognize a foreign judgment nullifying a bigamous marriage, without
prejudice to a criminal prosecution for bigamy.

In the recognition of foreign judgments, Philippine courts are incompetent to substitute their judgment on how a case was decided
under foreign law. They cannot decide on the "family rights and duties, or on the status, condition and legal capacity" of the foreign
citizen who is a party to the foreign judgment. Thus, Philippine courts are limited to the question of whether to extend the effect of a
foreign judgment in the Philippines. In a foreign judgment relating to the status of a marriage involving a citizen of a foreign country,
Philippine courts only decide whether to extend its effect to the Filipino party, under the rule of lex nationalii expressed in Article 15 of
the Civil Code.

For this purpose, Philippine courts will only determine (1) whether the foreign judgment is inconsistent with an overriding public policy in
the Philippines; and (2) whether any alleging party is able to prove an extrinsic ground to repel the foreign judgment, i.e. want of
jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact. If there is neither inconsistency with public policy
nor adequate proof to repel the judgment, Philippine courts should, by default, recognize the foreign judgment as part of the comity of
nations. Section 48(b), Rule 39 of the Rules of Court states that the foreign judgment is already "presumptive evidence of a right
between the parties." Upon recognition of the foreign judgment, this right becomes conclusive and the judgment serves as the basis for
the correction or cancellation of entry in the civil registry. The recognition of the foreign judgment nullifying a bigamous marriage is a
subsequent event that establishes a new status, right and fact 92 that needs to be reflected in the civil registry. Otherwise, there will be
an inconsistency between the recognition of the effectivity of the foreign judgment and the public records in the Philippines.1âwphi1

However, the recognition of a foreign judgment nullifying a bigamous marriage is without prejudice to prosecution for bigamy under
Article 349 of the Revised Penal Code.93 The recognition of a foreign judgment nullifying a bigamous marriage is not a ground for
extinction of criminal liability under Articles 89 and 94 of the Revised Penal Code. Moreover, under Article 91 of the Revised Penal
Code, "[t]he term of prescription [of the crime of bigamy] shall not run when the offender is absent from the Philippine archipelago."

Since A.M. No. 02-11-10-SC is inapplicable, the Court no longer sees the need to address the questions on venue and the contents
and form of the petition under Sections 4 and 5, respectively, of A.M. No. 02-11-10-SC.

WHEREFORE, we GRANT the petition. The Order dated 31 January 2011 and the Resolution dated 2 March 2011 of the Regional Trial
Court, Branch 107, Quezon City, in Civil Case No. Q-11-68582 are REVERSED and SET ASIDE. The Regional Trial Court is
ORDERED to REINSTATE the petition for further proceedings in accordance with this Decision.

G.R. No. 198680 July 8, 2013

HEIRS OF MAGDALENO YPON, NAMELY, ALVARO YPON, ERUDITA Y. BARON, CICERO YPON, WILSON YPON, VICTOR
YPON, AND HINIDINO Y. PEÑALOSA, PETITIONERS,
vs.
GAUDIOSO PONTERAS RICAFORTE A.K.A. "GAUDIOSO E. YPON," AND THE REGISTER OF DEEDS OF TOLEDO CITY,
RESPONDENTS.

This is a direct recourse to the Court from the Regional Trial Court of Toledo City, Branch 59 (RTC), through a petition for review on
certiorari1 under Rule 45 of the Rules of Court, raising a pure question of law. In particular, petitioners assail the July 27, 2011 2 and
August 31, 20113 Orders of the RTC, dismissing Civil Case No. T-2246 for lack of cause of action.
The Facts - On July 29, 2010, petitioners, together with some of their cousins, 4 filed a complaint for Cancellation of Title and
Reconveyance with Damages (subject complaint) against respondent Gaudioso Ponteras Ricaforte a.k.a. "Gaudioso E. Ypon"
(Gaudioso), docketed as Civil Case No. T-2246.5 In their complaint, they alleged that Magdaleno Ypon (Magdaleno) died intestate and
childless on June 28, 1968, leaving behind Lot Nos. 2-AA, 2-C, 2-F, and 2-J which were then covered by Transfer Certificates of Title
(TCT) Nos. T-44 and T-77-A.6 Claiming to be the sole heir of Magdaleno, Gaudioso executed an Affidavit of Self-Adjudication and
caused the cancellation of the aforementioned certificates of title, leading to their subsequent transfer in his name under TCT Nos. T-
2637 and T-2638,7 to the prejudice of petitioners who are Magdaleno’s collateral relatives and successors-in-interest.8

In his Answer, Gaudioso alleged that he is the lawful son of Magdaleno as evidenced by: (a) his certificate of Live Birth; (b) two (2)
letters from Polytechnic School; and (c) a certified true copy of his passport.9 Further, by way of affirmative defense, he claimed that: (a)
petitioners have no cause of action against him; (b) the complaint fails to state a cause of action; and (c) the case is not prosecuted by
the real parties-in-interest, as there is no showing that the petitioners have been judicially declared as Magdaleno’s lawful heirs. 10

The RTC Ruling - On July 27, 2011, the RTC issued the assailed July 27, 2011 Order, 11 finding that the subject complaint failed to state
a cause of action against Gaudioso. It observed that while the plaintiffs therein had established their relationship with Magdaleno in a
previous special proceeding for the issuance of letters of administration,12 this did not mean that they could already be considered as
the decedent’s compulsory heirs. Quite the contrary, Gaudioso satisfactorily established the fact that he is Magdaleno’s son – and
hence, his compulsory heir – through the documentary evidence he submitted which consisted of: (a) a marriage contract between
Magdaleno and Epegenia Evangelista; (b) a Certificate of Live Birth; (c) a Letter dated February 19, 1960; and (d) a passport.13

The plaintiffs therein filed a motion for reconsideration which was, however, denied on August 31, 2011 due to the counsel’s failure to
state the date on which his Mandatory Continuing Legal Education Certificate of Compliance was issued. 14

Aggrieved, petitioners, who were among the plaintiffs in Civil Case No. T-2246,15 sought direct recourse to the Court through the instant
petition.

The Issue Before the Court -The core of the present controversy revolves around the issue of whether or not the RTC’s dismissal of
the case on the ground that the subject complaint failed to state a cause of action was proper.

The Court’s Ruling - The petition has no merit.

Cause of action is defined as the act or omission by which a party violates a right of another. 16 It is well-settled that the existence of a
cause of action is determined by the allegations in the complaint.17 In this relation, a complaint is said to assert a sufficient cause of
action if, admitting what appears solely on its face to be correct, the plaintiff would be entitled to the relief prayed for. 18Accordingly, if the
allegations furnish sufficient basis by which the complaint can be maintained, the same should not be dismissed, regardless of the
defenses that may be averred by the defendants.19

As stated in the subject complaint, petitioners, who were among the plaintiffs therein, alleged that they are the lawful heirs of
Magdaleno and based on the same, prayed that the Affidavit of Self-Adjudication executed by Gaudioso be declared null and void and
that the transfer certificates of title issued in the latter’s favor be cancelled. While the foregoing allegations, if admitted to be true, would
consequently warrant the reliefs sought for in the said complaint, the rule that the determination of a decedent’s lawful heirs should be
made in the corresponding special proceeding20 precludes the RTC, in an ordinary action for cancellation of title and reconveyance,
from granting the same. In the case of Heirs of Teofilo Gabatan v. CA,21 the Court, citing several other precedents, held that the
determination of who are the decedent’s lawful heirs must be made in the proper special proceeding for such purpose, and not in an
ordinary suit for recovery of ownership and/or possession, as in this case:

Jurisprudence dictates that the determination of who are the legal heirs of the deceased must be made in the proper special
proceedings in court, and not in an ordinary suit for recovery of ownership and possession of property.1âwphi1 This must take
precedence over the action for recovery of possession and ownership. The Court has consistently ruled that the trial court cannot make
a declaration of heirship in the civil action for the reason that such a declaration can only be made in a special proceeding. Under
Section 3, Rule 1 of the 1997 Revised Rules of Court, a civil action is defined as one by which a party sues another for the enforcement
or protection of a right, or the prevention or redress of a wrong while a special proceeding is a remedy by which a party seeks to
establish a status, a right, or a particular fact. It is then decisively clear that the declaration of heirship can be made only in a special
proceeding inasmuch as the petitioners here are seeking the establishment of a status or right.

In the early case of Litam, et al. v. Rivera, this Court ruled that the declaration of heirship must be made in a special proceeding, and
not in an independent civil action. This doctrine was reiterated in Solivio v. Court of Appeals

In the more recent case of Milagros Joaquino v. Lourdes Reyes, the Court reiterated its ruling that matters relating to the rights of
filiation and heirship must be ventilated in the proper probate court in a special proceeding instituted precisely for the purpose of
determining such rights. Citing the case of Agapay v. Palang, this Court held that the status of an illegitimate child who claimed to be an
heir to a decedent's estate could not be adjudicated in an ordinary civil action which, as in this case, was for the recovery of property.

By way of exception, the need to institute a separate special proceeding for the determination of heirship may be dispensed with for the
sake of practicality, as when the parties in the civil case had voluntarily submitted the issue to the trial court and already presented their
evidence regarding the issue of heirship, and the RTC had consequently rendered judgment thereon, 23 or when a special proceeding
had been instituted but had been finally closed and terminated, and hence, cannot be re-opened.24

In this case, none of the foregoing exceptions, or those of similar nature, appear to exist. Hence, there lies the need to institute the
proper special proceeding in order to determine the heirship of the parties involved, ultimately resulting to the dismissal of Civil Case
No. T-2246.

Verily, while a court usually focuses on the complaint in determining whether the same fails to state a cause of action, a court cannot
disregard decisions material to the proper appreciation of the questions before it. 25 Thus, concordant with applicable jurisprudence,
since a determination of heirship cannot be made in an ordinary action for recovery of ownership and/or possession, the dismissal of
Civil Case No. T-2246 was altogether proper. In this light, it must be pointed out that the RTC erred in ruling on Gaudioso’s heirship
which should, as herein discussed, be threshed out and determined in the proper special proceeding. As such, the foregoing
pronouncement should therefore be devoid of any legal effect.
WHEREFORE, the petition is DENIED. The dismissal of Civil Case No. T-2246 is hereby AFFIRMED, without prejudice to any
subsequent proceeding to determine the lawful heirs of the late Magdaleno Ypon and the rights concomitant therewith.

G.R. No. 172852 January 30, 2013

CITY OF CEBU, Petitioner, vs. APOLONIO M. DEDAMO, JR., Respondent.

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court seeking to annul and set aside the Decision1 dated
November 30, 2005 of the Court of Appeals (CA) ordering petitioner City of Cebu (petitioner) to pay twelve percent (12%) legal interest
per annum on the unpaid balance of the just compensation paid to respondent Apolonio Dedamo, Jr. (respondent). Likewise assailed is
the Resolution2 dated May 9, 2006 denying reconsideration.

The ensuing facts are not disputed.3

The present controversy is an off-shoot of Civil Case No. CEB-14632 for eminent domain over two (2) parcels of land owned by
spouses Apolonio and Blasa Dedamo (Spouses Dedamo), filed by the petitioner before the Regional Trial Court (RTC) of Cebu City,
Branch 13, on September 17, 1993. The petitioner immediately took possession of the lots after depositing ₱51,156.00 with the
Philippine National Bank pursuant to Section 19 of Republic Act No. 7160. 4

During the pendency of the case, or on December 14, 1994, the petitioner and Spouses Dedamo entered into a Compromise
Agreement whereby the latter agreed to part with the ownership of the parcels of land in favor of the former in consideration of ONE
MILLION SEVEN HUNDRED EIGHTY-SIX THOUSAND FOUR HUNDRED PESOS (₱1,786,400.00) as provisional payment and just
compensation in an amount to be determined by a panel of commissioners.

Forthwith, the panel was constituted and a report was submitted to the RTC recommending the sum of ₱20,826,339.50 as just
compensation. The report was adopted and approved by the RTC in its Order dated December 27, 1996. 5

The RTC Order was affirmed by the CA and then by the Court, in a Decision dated May 7, 2002, when the matter was elevated for
review in a petition docketed as G.R. No. 142971.

When the said decision became final and executory on September 20, 2002, the case was remanded for execution to the RTC, before
which, a motion for the issuance of a writ of execution was filed by Spouses Dedamo on April 4, 2003. On May 16, 2003, the RTC
granted the motion and ordered the issuance of the writ.

In the meantime, Spouses Dedamo passed away and they were substituted in the case by herein respondent.

On December 23, 2003, the petitioner paid the respondent the sum of ₱19,039,939.50 which is the difference between the just
compensation due and the provisional payment already made.

On March 24, 2004, the respondent filed a Manifestation and Motion before the RTC to order the petitioner to pay interest on the just
compensation computed from the time of actual taking of the lands.

On April 30, 2004, the RTC denied the motion and ruled that it can no longer amend a final and executory judgment that did not
specifically direct the payment of legal interest. Adamant, the respondent sought recourse before the CA asserting that the petitioner is
liable to pay: (a) 12% legal interest on the unpaid balance of the just compensation computed from the time of actual taking of the
property up to the date of payment of just compensation; and (b) 12% legal interest from the time the decision awarding just
compensation became final and executory on September 20, 2002 until its satisfaction on December 23, 2003.

The Ruling of the CA In its Decision dated November 30, 2005, the CA rejected the respondent’s first claim since the issue was
belatedly raised during the execution stage and after the judgment of just compensation attained finality.

Nonetheless, the CA found the respondent’s second contention meritorious. The CA awarded legal interest accruing from the time the
RTC Order dated December 27, 1996 awarding just compensation was affirmed with finality by the Supreme Court up to the time of full
payment thereof in line with the ruling in Eastern Shipping Lines, Inc. v. Court of Appeals 6 that when a court judgment awarding a sum
of money becomes final and executory, it shall earn legal interest of 12% per annum reckoned from such finality until satisfaction.

Accordingly, the decretal portion of the decision reads:

WHEREFORE, in view of the foregoing, the instant petition is partially GRANTED in that the resolution dated April 30, 2004 is
MODIFIED to GRANT payment of legal interest of 12% per annum reckoned from the date of finality of the decision of the Supreme
Court on May 2, 2002 up to the time full payment for the just compensation shall have been made.

The CA effectively reiterated the above decision when it denied8 the petitioner’s motion for reconsideration thereof. Both parties
elevated the CA judgment to the Court. The respondent’s petition was docketed as G.R. No. 172942 where he sought, in the main, that
the 12% interest rate be reckoned from the date of taking of the property and not from the date of finality of the Decision dated May 7,
2002 in G.R. No. 142971. The Court denied his petition on August 22, 2006 for failure to sufficiently show that the CA committed any
reversible error in the questioned judgment. The respondent’s motion for reconsideration of the said decision was denied with finality on
November 27, 2006.9

At bar is the recourse interposed by the petitioner wherein he seeks the setting aside of the same CA Decision dated November 30,
2005.

On October 20, 2006, the respondent moved for the consolidation of the present petition with G.R. No. 172942. 10 The motion was
denied in view of the prior denial of G.R. No. 172942 on August 22, 2006.11
In the case at bar, the petitioner prays for the annulment of the award of 12% legal interest made by the CA in view of the termination of
the eminent domain case upon payment of the just compensation in satisfaction of the writ of execution. The petitioner further asserts
that the final judgment in Civil Case No. CEB-14632 which did not explicitly pronounce the payment of interest can no longer be
modified lest the basic principles of remedial law be defiled. 12

For his part, the respondent avers13 that Section 10, Rule 67 of the Rules of Court mandating the payment of legal interest on just
compensation forms part of every judgment rendered in eminent domain cases even if the same was not directly ordered therein.

The respondent also claims that the award of just compensation must be reckoned from the date of taking of subject lots and not from
the date of finality of G.R. No. 142971 because just compensation, before it is paid, constitutes loan or forbearance of money that
entails the imposition of a 12% interest per annum.

Ruling of the Court The petition is denied on the ground of res judicata in the mode of conclusiveness of judgment.

A perusal of the allegations in the present case evidently shows that the petitioner broaches the issues similarly raised and already
resolved in G.R. No. 172942.

Under the principle of conclusiveness of judgment, when a right or fact has been judicially tried and determined by a court of competent
jurisdiction, or when an opportunity for such trial has been given, the judgment of the court, as long as it remains unreversed, should be
conclusive upon the parties and those in privity with them.14 Stated differently, conclusiveness of judgment bars the re-litigation in a
second case of a fact or question already settled in a previous case.151âwphi1

The adjudication in G.R. No. 172942 has become binding and conclusive on the petitioner who can no longer question the respondent’s
entitlement to the 12% legal interest awarded by the CA. The Court’s determination in G.R. No. 172942 on the reckoning point of the
12% legal interest is likewise binding on the petitioner who cannot re-litigate the said matter anew through the present recourse.

Thus, the judgment in G.R. No. 172942 bars the present case as the relief sought in the latter is inextricably related to the ruling in the
former. WHEREFORE, premises considered, the Petition is hereby DENIED.

March 11, 2015 G.R. No. 167052

BANK OF THE PHILIPPINE ISLANDS SECURITIES CORPORATION, Petitioner,

vs. EDGARDO V. GUEVARA, Respondent.

Before the Court is a Petition for Review under Rule 45 of the Rules of Court seeking the reversal and setting aside of the Decision1
dated December 19, 2003 and Resolution2 dated February 9, 2005 of the Court Appeals in CA-G.R. CV No. 69348, affirming the
Decision3 dated September 11, 2000 of the Regional Trial Court (RTC) of Makati City, Branch 57 in Civil Case No. 92-1445. The RTC
acted favorably on the action instituted by respondent Edgardo V. Guevara for the enforcement of a foreign judgment, particularly, the
Order4 dated March 13, 1990 of the United States (U.S.) District Court for the Southern District of Tex.as, Houston Division (U.S.
District Court), in Civil Action No. H-86-440, and ordered petitioner Bank of the Philippine Islands (BPI) Securities Corporation to pay
respondent (a) the sum of US$49,500.00 with legal interest; (b) P250,000.00 attorney's fees and litigation ex.penses; and (c) costs of
suit.

The facts are culled from the records of the case.

Ayala Corporation, a holding company, and its subsidiaries are engaged in a wide array of businesses including real estate, financial
services, telecommunications, water and used water, electronics manufacturing services, automotive dealership and distributorship,
business process outsourcing, power, renewable energy, and transport infrastructure. 5

In the 1980s, Ayala Corporation was the majority stockholder of Ayala Investment and Development Corporation (AIDC). AIDC, in turn,
wholly owned Philsec Investment Corporation (PHILSEC), a domestic stock brokerage firm, which was subsequently bought by
petitioner; and Ayala International Finance Limited (AIFL), a Hong Kong deposit-taking corporation, which eventually became BPI
International Finance Limited (BPI-IFL). PHILSEC was a member of the Makati Stock Exchange and the rules of the said organization
required that a stockbroker maintain an amount of security equal to at least 50% of a client's outstanding debt.

Respondent was hired by Ayala Corporation in 1958. Respondent later became the Head of the Legal Department of Ayala Corporation
and then the President of PHILSEC from September 1, 1980 to December 31, 1983. Thereafter, respondent served as Vice-President
of Ayala Corporation until his retirement on August 31, 1997.

While PHILSEC President, one of respondent's obligations was to resolve the outstanding loans of Ventura O. Ducat (Ducat), which the
latter obtained separately from PHILSEC and AIFL. Although Ducat constituted a pledge of his stock portfolio valued at approximately
US$1.4 million, Ducat's loans already amounted to US$3.1 million. Because the security for Ducat's debts fell below the 50%
requirement of the Makati Stock Exchange, the trading privileges of PHILSEC was in peril of being suspended.

Ducat proposed to settle his debts by an exchange of assets. Ducat owned several pieces of real estate in Houston, Texas, in
partnership with Drago Daic (Daic), President of 1488, Inc., a U.S.-based corporation. Respondent relayed Ducat's proposal to Enrique
Zobel (Zobel), the Chief Executive Officer of Ayala Corporation. Zobel was amenable to Ducat's proposal but advised respondent to
send Thomas Gomez (Gomez), an AIFL employee who traveled often to the U.S., to evaluate Ducat's properties.

In December of 1982, Gomez examined several parcels of real estate that were being offered by Ducat and 1488, Inc. for the
exchange. Gomez, in a telex to respondent, recommended the acceptance of a parcel of land in Harris County, Texas (Harris County
property), which was believed to be worth around US$2.9 million. Gomez further opined that the "swap would be fair and reasonable"
and that it would be better to take this opportunity rather than pursue a prolonged legal battle with Ducat. Gomez's recommendation
was brought to Zobel's attention. The property-for-debt exchange was subsequently approved by the AIFL Board of Directors even
without a prior appraisal of the Harris County property. However, before the exchange actually closed, an AIFL director asked
respondent to obtain such an appraisal.
William Craig (Craig), a former owner of the Harris County property, conducted the appraisal of the market value of the said property. In
his January 1983 appraisal, Craig estimated the fair market value of the Harris County property at US$3,365,000.

Negotiations finally culminated in an Agreement,6 executed on January 27, 1983 in Makati City, Philippines, among 1488, Inc.,
represented by Daic; Ducat, represented by Precioso Perlas (Perlas); AIFL, represented by Joselito Gallardo (Gallardo); and PHILSEC
and Athona Holdings, N. V. (ATHONA), both represented by respondent. Under the Agreement, the total amount of Ducat's debts was
reduced from US$3.1 million to US$2.5 million; ATHONA, a company wholly owned by PHILSEC and AIFL, would buy the Harris
County property from 1488, Inc. for the price of US$2,807,209.02; PHILSEC and AIFL would grant ATHONA a loan of US$2.5 million,
which ATHONA would entirely use as initial payment for the purchase price of the Harris County property; ATHONA would execute a
promissory note in favor of 1488, Inc. in the sum of US$307,209.02 to cover the balance of the purchase price for the Harris County
property; upon its receipt of the initial payment of US$2.5 million from ATHONA, 1488, Inc. would then fully pay Ducat's debts to
PHILSEC and AIFL in the same amount; for their part, PHILSEC and AIFL would release and transfer possession of Ducat's pledged
stock portfolio to 1488, Inc.; and 1488, Inc. would become the new creditor of Ducat, subject to such other terms as they might agree
upon.

The series of transactions per the Agreement was eventually executed. However, after acquiring the Harris County property, ATHONA
had difficulty selling the same. Despite repeated demands by 1488, Inc., ATHONA failed to pay its promissory note for the balance of
the purchase price for the Harris County property, and PHILSEC and AIFL refused to release the remainder of Ducat's stock portfolio,
claiming that they were defrauded into believing that the said property had a fair market value higher than it actually had.

Civil Action No. H-86-440 before the U.S. District Court of Southern District of Texas, Houston Division

On October 17, 1985, 1488, Inc. instituted a suit against PHILSEC, AIFL, and ATHONA for (a) misrepresenting that an active market
existed for two shares of stock included in Ducat's portfolio when, in fact, said shares were to be withdrawn from the trading list; (b)
conversion of the stock portfolio; (c) fraud, as ATHONA had never intended to abide by the provisions of its promissory note when they
signed it; and (d) acting in concert as a common enterprise or in the alternative, that ATHONA was the alter ego of PHILSEC and AIFL.
The suit was docketed as Civil Action No. H-86-440 before the U.S. District Court.

PHILSEC, AIFL, and ATHONA filed counterclaims against 1488, Inc., Daic, Craig, Ducat, and respondent, for the recovery of damages
and excess payment or, in the alternative, the rescission of the sale of the Harris County property, alleging fraud, negligence, and
conspiracy on the part of counter-defendants who knew or should have known that the value of said property was less than the
appraisal value assigned to it by Craig.

Before the referral of the case to the jury for verdict, the U.S. District Court dropped respondent as counter-defendant for lack of
evidence to support the allegations against him. Respondent then moved in open court to sanction petitioner (formerly PHILSEC), AIFL,
and ATHONA based on Rule 11 of the U.S. Federal Rules of Civil Procedure.7

In its Order dated March 13, 1990, the U.S. District Court stated that on February 14, 1990, after trial, the jury returned a verdict for
1488, Inc. In the same Order, the U.S. District Court ruled favorably on respondent's pending motion for sanction, thus:

During the course of the trial, the Court was required to review plaintiff's Exhibit No. 91 to determine whether the exhibit should be
admitted. After reviewing the exhibit and hearing the evidence, the Court concluded that the defendants' counterclaims against Edgardo
V. Guevara are frivolous and brought against him simply to humiliate and embarrass him. It is the opinion of the Court that the
defendants, Philsec Investment Corporation, A/K/A BPI Securities, Inc., and Ayala International Finance Limited, should be sanctioned
appropriately based on Fed. R. Civ. P. 11 and the Court's inherent powers to punish unconscionable conduct. Based upon the motion
and affidavit of Edgardo V. Guevara, the Court finds that $49,450 is reasonable punishment.

ORDERED that defendants, Philsec Investment Corporation A/K/A BPI Securities, Inc., and Ayala International Finance Limited, jointly
and severally, shall pay to Edgardo V. Guevara $49,450 within 30 days of the entry of this order. 8

Petitioner, AIFL, and ATHONA appealed the jury verdict, as well as the aforementioned order of the U.S. District Court for them to pay
respondent US$49,450.00; while 1488, Inc. appealed a post-judgment decision of the U.S. District Court to amend the amount of
attorney's fees awarded. The appeals were docketed as Case No. 90-2370 before the U.S. Court of Appeals, Fifth Circuit.

The U.S. Court of Appeals rendered its Decision on September 3, 1991 affirming the verdict in favor of 1488, Inc. The U.S. Court of
Appeals found no basis for the allegations of fraud made by petitioner, AIFL, and ATHONA against 1488, Inc., Daic, Craig, and Ducat:

[2] To state a cause of action for fraud under Texas law, a plaintiff must allege sufficient facts to show:
(1)that a material representation was made;
(2)that it was false;
(3)that when the speaker made it he knew that it was false or made it recklessly without any knowledge of the truth and as a positive
assertion;
(4)that he made it with the intention that it should be acted on by the party;
(5)that the party acted in reliance upon it;
(6)that he thereby suffered injury.

Stone v. Lawyers Title Ins. Corp., 554 S.W.2d 183, 185 (Tex.1977). We agree with the district court's decision to grant a directed verdict
against the defendants. The defendants failed to allege sufficient facts to establish the elements necessary to demonstrate fraud. In
particular, the defendants have failed to allege any facts that would tend to show that the plaintiff or any of the third party defendants
made a false representation or a representation with reckless disregard as to its truth.

The Houston real estate market was extremely volatile during the late 1970's and the early 1980's. Like a stream of hot air, property
values rose rapidly as the heat and fury generated by speculation and construction plans mounted, but, just as rapidly, the climate
cooled and the high-flying market came crashing to an all time low. The real estate transaction involved in this case was certainly
affected by this environment of capriciousness. Moreover, a number of additional variables may have contributed to the uncertainty of
its value. For instance, the land abutted a two-lane asphalt road that had been targeted by the state for conversion into a major multi-
lane divided highway. Water and sewage treatment facilities were located near the boundary lines of the property. In addition,
Houston's lack of conventional zoning ordinances meant that the value of the property could fluctuate depending upon the use
(commercial or residential) for which the property would ultimately be used.

[3]The fact that the defendants were unable to sell the property at the price for which it had been appraised does not demonstrate that
the plaintiff or the third party defendants knew that the value of the property was less than the appraised value, nor does it establish that
the opposing parties were guilty of negligent misrepresentation or negligence.

[4]In support of their allegation of fraud, the defendants rely heavily on a loan application completed by 1488 shortly before the subject
property was transferred to Athona. See Defendant's Exhibit 29. At the time, 1488 still owed approximately $300,000 to Republic of
Texas Savings Association on its original loan for the subject property. The debt had matured and 1488 was planning to move the loan
to Home Savings Association of Houston, that is, take out a loan from Home Savings to pay off the debt to Republic. 1488 had planned
to borrow $350,000 for that purpose. A line item on the Home Savings loan application form asked for the amount of the loan as a
percentage of the appraised value of the land. A figure of thirty-nine percent was typed into that space, and the defendants suggest that
this proves that the plaintiff knew Craig's appraisal was erroneous. The defendants reason that if the $350,000 loan amount was only
thirty-nine percent of the land's appraised value, then the real estate must have been worth approximately $897,436.

Although their analysis is sound, the conclusion reached by the defendants cannot withstand additional scrutiny. At the time that the
loan application was completed, 1488 did not request to have a new appraisal done for the property. Instead, 1488 planned to use the
numbers that had been generated for a quasi-appraisal done in 1977. The 1977 report purported only to "supplement" an earlier
appraisal that had been conducted in 1974, and the supplement described its function as estimating market value "for mortgage loan
purposes" only. See Defendant's Trial Exhibit 4. The two page supplement was based on such old information that even the Home
Savings Association would not accept it without additional collateral as security for the loan. See Record on Appeal, Vol. 17 at 5-29 to
5-30. The loan, however, was never made because the property was transferred to Athona, and the outstanding loan to Republic was
paid off as part of that transaction. In addition, the loan application itself was never signed by anyone affiliated with 1488. The district
court was correct in dismissing this argument in support of the defendant's fraud allegations.

[5] The defendants also allege that the plaintiff and counter defendants knew that Craig's appraisal was fraudulent because the
purchaser's statement signed by their own representative, and the seller's statement, signed by the plaintiff, as well as the title
insurance policy all recited a purchase price of $643,416.12. Robert Higgs, general counsel for 1488, explained that because of the
nature of the transaction, 1488, for tax purposes, wanted the purchase price on the closing statement to reflect only that amount of cash
actually exchanged at the closing as well as the promissory note given at the closing. See Record on Appeal, Vol. 17 at 5- 127.
Although the closing documents recite a purchase price well under the actual sales price, nothing indicates that any of the parties
actually believed the property to be worth less than the sales amount.

The defendants also assert that it was error for the district court to deny them permission to designate O. Frank McPherson, a Houston
appraiser, as an expert witness after the cutoff date established by a pretrial order for such designations. The defendants contend that
the error prevented them from presenting facts that would support their fraud allegations. Although the defendants were allowed to
present the testimony of another expert witness on the subject of valuation, they argue that McPherson's testimony was critical because
he had performed an appraisal of the property for the Texas Highway Department close to the time period during which Craig had made
his appraisal. McPherson's appraisal was performed as part of the State's condemnation proceedings that preceded the planned
highway expansion next to the subject property.

[9] In their briefs, the defendants fail to provide an adequate explanation for their failure to identify their expert witness in accordance
with the district court's pretrial order. This law suit was initiated in 1985, and the defendants had until November of 1988 to designate
their expert witnesses. The defendants were aware of the condemnation proceedings, and they, therefore, had approximately three
years to determine the identity of any appraiser used by the state. The defendants simply failed to make this inquiry.

Enforcement of the district court's pretrial order did not leave the defendants without an expert witness on the issue of valuation, and
the available expert had also conducted appraisals for the Texas Highway Department in the area surrounding the subject property.

Although the degree of prejudice suffered by the plaintiff due to the late designation of an expert would not have been great, a district
court still has the discretion to control pretrial discovery and sanction a party's failure to follow a scheduling order. See id. at 791. Such
action is particularly appropriate here, where the defendants have failed to provide an adequate explanation for their failure to identify
their expert within the designated timetable.

The defendants failed to produce enough evidence from which fraud could be inferred to justify the submission of the issue to a jury.
Conclusional allegations or speculation regarding what the plaintiff knew or did not know concerning the value of the subject property
are insufficient to withstand a motion for a directed verdict. The district court committed no error in granting the motion.

Since the defendants failed to present the district court with any facts that would tend to show that the plaintiffs committed a fraud
against them, their claim of a conspiracy to commit fraud must also fail. 9

The U.S. Court of Appeals likewise adjudged that petitioner, AIFL, and ATHONA failed to prove negligence on the part of 1488, Inc.,
Daic, Craig, and Ducat in the appraisal of the market value of the said property:

[10, 11] The defendants have likewise failed to present any facts that would tend to support their claim of negligent misrepresentation or
negligence. The defendants rely on assumptions and unsupportable conclusions of law in establishing their case for negligence:
"Assuming the Property's true value is less than $800,000, it is reasonable to assume that the counter defendants failed to exercise
reasonable care or competence . . ." Brief for Athona at 45-46 A party may not rely on assumptions of fact to carry their case forward.
The defendants have presented no facts to suggest that the plaintiff was negligent in acquiring its appraisal. The plaintiff hired Craig, a
real estate broker, to perform the appraisal after the defendants had already given their initial approval for the transaction. Craig had
performed real estate appraisals in the past, and Texas law permits real estate brokers to conduct such appraisals, see
Tex.Rev.Civ.Stat.Ann. art. 6573a, §2(2)(E) (Vernon Supp. 1988) (Original version at Tex.Rev.Civ.Stat.Ann. art. 6573a, §4(1)(e) (Vernon
1969). These facts do not support a claim of negligence.

For the foregoing reasons the district court committed no error in granting a directed verdict against the counterclaims advanced by the
defendants.10
The U.S. Court of Appeals, however, vacated the award of exemplary damages in favor of 1488, Inc. for the fraudulent
misrepresentation regarding the marketability of the two shares of stock in Ducat's portfolio. Under Texas law, a jury may not award
damages unless it was determined that the plaintiff had also sustained actual damages. The U.S. Court of Appeals agreed with
petitioner, AIFL, and ATHONA that 1488, Inc. brought its suit alleging fraudulent misrepresentation after the two-year statute of
limitation had expired. The misrepresentation issue should never have gone to the jury. Therefore, the jury's finding of actual damages
is nullified; and since the jury verdict is left without a specific finding of actual damages, the award of exemplary damages must be
vacated.

The U.S. Court of Appeals also vacated the award of Rule 11 sanctions in favor of respondent and against petitioner, AIFL, and
ATHONA for being rendered without due process, and remanded the issue to the U.S. District Court:

[18-20] The Rule 11 motion was first made by Guevara on February 14, 1990, and the court immediately ruled on the issue without
giving the defendants an opportunity to prepare a written response. See Record on Appeal, Vol. 22 at 10-25 to 10-37. Although, the
defendants were given an opportunity to speak, we conclude that the hearing failed to comport with the requirements of due process,
which demand that the defendants be provided with adequate notice and an opportunity to prepare a response. See Henderson v.
Department of Public Safety and Corrections, 901 F.2d 1288, 1293-94 (5th Cir.1990). Providing specific notice and an opportunity to
respond is particularly important in cases, such as the one before us, in which the sanctions have been imposed on the clients and not
the attorneys. See Donaldson v. Clark, 819 F.2d 1551, 1560 (11th Cir.1987) ("If sanctions are proposed to be imposed on the client,
due process will demand more specific notice because the client is likely unaware of the existence of Rule 11 and should be given the
opportunity to prepare a defense."). A separate hearing is not a prerequisite to the imposition of Rule 11 sanctions, see Donaldson, 819
F.2d at 1560 n. 12, but the defendants in this case, should have been given more of an opportunity to respond to the motion than that
provided at the hearing in which the motion was first raised. Providing the defendant with an opportunity to mount a defense "on the
spot" does not comport with due process. Given that the defendants were not provided with adequate notice or an opportunity to be
heard, we vacate the award of sanctions and remand so that the district court can provide the defendants with an adequate opportunity
to be heard.11

Finally, the U.S. Court of Appeals similarly vacated the award of attorney's fees and remanded the matter to the U.S. District Court for
recalculation to conform with the requirements provided in the promissory note.

In accordance with the Decision dated September 3, 1991 of the U.S. Court of Appeals, the U.S. District Court issued an Order 12 dated
October 28, 1991 giving petitioner, AIFL, and ATHONA 20 days to formally respond to respondent's motion for Rule 11 sanctions.
Petitioner, AIFL, and ATHONA jointly filed before the U.S. District Court their opposition to respondent's motion for Rule 11 sanctions. 13
Respondent filed his reply to the opposition, to which petitioner, AIFL, and ATHONA, in turn, filed a reply-brief.14

In an Order15 dated December 31, 1991, the U.S. District Court still found respondent's motion for Rule 11 sanctions meritorious and
reinstated its Order dated March 13, 1990:

The basis of the Court's prior decision as well as now is the fact that the defendants filed suit against Guevara with knowledge that the
basis of the suit was unfounded. In the defendants' file was an appraisal from an international appraisal firm, which the defendants
refused to disclose during discovery and was only discovered at a bench conference during a discussion about appraisers. Based on
the defendants' own appraisers, no basis existed for a suit by the defendants against their employee.

The previous judgment entered by this Court is REINSTATED.

The above-quoted Order of the U.S. District Court attained finality as it was no longer appealed by petitioner, AIFL, and ATHONA.

Through a letter dated February 18, 1992, respondent demanded that petitioner pay the amount of US$49,450.00 awarded by the U.S.
District Court in its Order dated March 13, 1990. Given the continuous failure and/or refusal of petitioner to comply with the said Order
of the U.S. District Court, respondent instituted an action for the enforcement of the same, which was docketed as Civil Case No. 92-
1445 and raffled to the RTC of Makati City, Branch 57.

Civil Case No. 92-1445 before Branch 57 of the RTC of Makati City

In his Complaint for the enforcement of the Order dated March 13, 1990 of the U.S. District Court in Civil Action No. H-86-440,
respondent prayed that petitioner be ordered to pay:

1.The sum of US$49,450.00 or its equivalent in Philippine Pesos x x x with interest from date of demand;

2.Attorney's fees and litigation expenses in the sum of P250,000.00;

3.Exemplary damages of P200,000.00; and

4.Costs of the suit.16

In its Amended Answer Ad Cautelam,17 petitioner opposed the enforcement of the Order dated March 13, 1990 of the U.S. District
Court on the grounds that it was rendered upon a clear mistake of law or fact and/or in violation of its right to due process.

In the course of the pre-trial and scheduled trial proceedings, the parties respectively manifested before the court that they were
dispensing with the presentation of their witnesses since the subject matter of their testimonies had already been stipulated upon.18

Thereafter, the parties formally offered their respective evidence which entirely consisted of documentary exhibits. Respondent
submitted authenticated and certified true copies of Rule 11 of the U.S. Federal Rules of Civil Procedure; 19 the Orders dated March 13,
1990, October 28, 1991, and December 31, 1991 of the U.S. District Court in Civil Action No. H-86- 440;20 the Decision dated
September 3, 1991 of the U.S. Court of Appeals in Case No. 90-2370;21 and the opposition to respondent's motion for Rule 11
sanctions and reply-brief filed by PHILSEC, AIFL, and ATHONA before the U.S. District Court.22 Petitioner presented photocopies of
pleadings, documents, and transcripts of stenographic notes in Civil Action No. H-86- 440 before the U.S. District Court;23 the pleadings
filed in other cases related to Civil Case No. 92-1440;24 and a summary of lawyer's fees incurred by petitioner in the U.S.25 The RTC
admitted in evidence the documentary exhibits of the parties in its Orders dated September 21, 1998 and February 8, 1999, 26 and then
deemed the case submitted for decision.

The RTC rendered a Decision on September 11, 2000 with the following dispositive portion:
WHEREFORE, judgment is hereby rendered in favor of [respondent] Edgardo V. Guevara ordering [petitioner] BPI Securities
Corporation to pay [respondent] the following:
1.the sum of US$49,500.00 with legal interest from the filing of this case until fully paid;
2.the sum of P250,000.00 as attorney's fees and litigation expenses; and
3.the costs of suit.
An award of exemplary damages for P200,000.00 is denied for being speculative. 27

Petitioner appealed to the Court of Appeals, assigning the following errors on the part of the RTC:

A.The trial court erred in not passing upon the merit or validity of [petitioner's] defenses against the enforcement of the foreign judgment
in the Philippines. Had the trial court considered [petitioner's] defenses, it would have concluded that the foreign judgment was not
enforceable because it was made upon a clear mistake of law or fact and/or was made in violation of the [petitioner's] right to due
process.

B.The trial court erred in not utilizing the standard for determining the enforceability of the foreign award that was agreed upon by the
parties to this case during the pre-trial, namely, did the defendants in the Houston case (PHILSEC, AIFL, AND ATHONA) have
reasonable grounds to implead [respondent] in the Houston case based upon the body of the evidence submitted therein. Thus,
whether or not PHILSEC, AIFL and ATHONA ultimately prevailed against [respondent] was immaterial or irrelevant; the question only
was whether they had reasonable grounds to proceed against him, for if they had, then there was admittedly no basis for the Rule 11
award against them by the Houston Court.

C.In the light of its ruling, the trial court failed to pass upon and resolve the other issues and/or defenses expressly raised by
[petitioner], including the defense that PHILSEC, AIFL, and ATHONA were deprived of their right to defend themselves against the Rule
11 sanction and the main decision because of the prohibitive cost of legal representation in the us and also because of the gross
negligence of its US counsel. x x x.28

In its Decision dated December 19, 2003, the Fifth Division of the Court of Appeals decreed:

WHEREFORE, the Decision dated 11 September 2000 in Civil Case No. 92-1445 of the Regional Trial Court of Makati, Branch 57, is
hereby AFFIRMED in all respect with costs against [petitioner].29

In its Motion for Reconsideration,30 petitioner lamented that the Fifth Division of the Court of Appeals failed to resolve on its own
petitioner's appeal as the Decision dated December 19, 2003 of the said Division was copied almost verbatim from respondent's brief.
Thus, petitioner prayed that the Fifth Division of the Court of Appeals recuse itself from deciding petitioner's Motion for Reconsideration
and that the case be re-raffled to another division.

The Fifth Division of the Court of Appeals maintained in its Resolution dated May 25, 2004 that the issues and contentions of the parties
were all duly passed upon and that the case was decided according to its merits. The said Division, nonetheless, abstained from
resolving petitioner's Motion for Reconsideration and directed the re-raffle of the case.31

Petitioner's Motion for Reconsideration was re-raffled to and subsequently resolved by the Tenth Division of the Court of Appeals. In its
Resolution dated February 9, 2005, the Tenth Division of the appellate court denied the said Motion for lack of merit. 32

Hence, petitioner seeks recourse from this Court via the instant Petition for Review, insisting that the Court of Appeals erred in affirming
the RTC judgment which enforced the Order dated March 13, 1990 of the U.S. District Court in Civil Action No. H-86-440.

Petitioner contends that it was not accorded by the Court of Appeals the right to refute the foreign judgment pursuant to Rule 39,
Section 48 of the Rules of Court because the appellate court gave the effect of res judicata to the said foreign judgment. The Court of
Appeals copied wholesale or verbatim the respondent's brief without addressing the body of evidence adduced by petitioner showing
that it had reasonable grounds to implead respondent in Civil Action No. H-86-440.

Petitioner asserts that the U.S. District Court committed a clear mistake of law and fact in its issuance of the Order dated March 13,
1990, thus, said Order is unenforceable in this jurisdiction. Petitioner discusses in detail its evidence proving that respondent, together
with 1488, Inc., Ducat, Craig, and Daic, induced petitioner to agree to a fraudulent deal. Petitioner points out that respondent had the
duty of looking for an independent and competent appraiser of the market value of the Harris County property; that instead of choosing
an unbiased and skilled appraiser, respondent connived with 1488, Inc., Ducat, and Daic in selecting Craig, who turned out to be the
former owner of the Harris County property and a close associate of 1488, Inc. and Daic; and that respondent endorsed to petitioner
Craig's appraisal of the market value of the Harris County property, which was overvalued by more than 400%.

According to petitioner, it had reasonable grounds to implead respondent in Civil Action No. H-86-440 so the sanction imposed upon it
under Rule 11 of the U.S. Federal Rules of Civil Procedure was unjustified. Petitioner additionally argues that there is no basis for the
U.S. District Court to impose upon it the Rule 11 sanction as there is nothing in the said provision which allows "the imposition of
sanctions for simply bringing a meritless lawsuit." If the Rule 11 sanction was imposed upon petitioner as punishment for impleading a
party (when it had reasonable basis for doing so) and not prevailing against said party, then, petitioner claims that such a sanction is
against Philippine public policy and should not be enforced in this jurisdiction. Settled in this jurisdiction that there should be no
premium attached to the right to litigate, otherwise parties would be very hesitant to assert a claim in court.

Petitioner further alleges that it was denied due process in Civil Action No H-86-440 because: (1) the U.S. District Court imposed the
Rule 11 sanction on the basis of a single document, i.e., the letter dated September 26, 1983 of Bruce C. Bossom, a partner at Jones
Lang Wooton, a firm of chartered surveyors and international real estate consultants, addressed to a Mr. Senen L. Matoto of AIFL
(marked as Exhibit 91 before the U.S. District Court), which was never admitted into evidence; (2) in said letter, Jones Lang Wooton
was "soliciting a listing agreement" and in which the "said firm unilaterally, without being asked as to the value of the [Harris County]
property, indicated a value for the [same] which approximate[d] with the value given in the Craig appraisal," hence, it cannot be used as
basis to conclude that petitioner, AIFL, and ATHONA assented to Craig's appraisal of the Harris County property; (3) the counsel who
represented petitioner, AIFL, and ATHONA in Civil Action No. H-86-440 before the U.S. District Court was grossly ignorant and/or
negligent in the prosecution of their counterclaims and/or in proving their defenses, such as when said counsel failed to present an
expert witness who could have testified as to the actual market value of the Harris County property or when said counsel failed to
discredit respondent's credibility despite the availability of evidence that respondent had been previously fined by the Philippine
Securities and Exchange Commission for "stock manipulation;" and (4) the excessive and unconscionable legal fees charged by their
U.S. counsel effectively prevented them from making further appeal.

The Court finds the Petition bereft of merit.

In Mijares v. Rañada,33 the Court extensively discussed the underlying principles for the recognition and enforcement of foreign
judgments in Philippine jurisdiction:

There is no obligatory rule derived from treaties or conventions that requires the Philippines to recognize foreign judgments, or allow a
procedure for the enforcement thereof.1âwphi1 However, generally accepted principles of international law, by virtue of the
incorporation clause of the Constitution, form part of the laws of the land even if they do not derive from treaty obligations. The classical
formulation in international law sees those customary rules accepted as binding result from the combination two elements: the
established, widespread, and consistent practice on the part of States; and a psychological element known as the opinion juris sive
necessitates (opinion as to law or necessity). Implicit in the latter element is a belief that the practice in question is rendered obligatory
by the existence of a rule of law requiring it.

While the definite conceptual parameters of the recognition and enforcement of foreign judgments have not been authoritatively
established, the Court can assert with certainty that such an undertaking is among those generally accepted principles of international
law. As earlier demonstrated, there is a widespread practice among states accepting in principle the need for such recognition and
enforcement, albeit subject to limitations of varying degrees. The fact that there is no binding universal treaty governing the practice is
not indicative of a widespread rejection of the principle, but only a disagreement as to the imposable specific rules governing the
procedure for recognition and enforcement.

Aside from the widespread practice, it is indubitable that the procedure for recognition and enforcement is embodied in the rules of law,
whether statutory or jurisprudential, adopted in various foreign jurisdictions. In the Philippines, this is evidenced primarily by Section 48,
Rule 39 of the Rules of Court which has existed in its current form since the early 1900s. Certainly, the Philippine legal system has long
ago accepted into its jurisprudence and procedural rules the viability of an action for enforcement of foreign judgment, as well as the
requisites for such valid enforcement, as derived from internationally accepted doctrines. Again, there may be distinctions as to the
rules adopted by each particular state, but they all prescind from the premise that there is a rule of law obliging states to allow for,
however generally, the recognition and enforcement of a foreign judgment. The bare principle, to our mind, has attained the status of
opinio juris in international practice.

This is a significant proposition, as it acknowledges that the procedure and requisites outlined in Section 48, Rule 39 derive their
efficacy not merely from the procedural rule, but by virtue of the incorporation clause of the Constitution. Rules of procedure are
promulgated by the Supreme Court, and could very well be abrogated or revised by the high court itself. Yet the Supreme Court is
obliged, as are all State components, to obey the laws of the land, including generally accepted principles of international law which
form part thereof, such as those ensuring the qualified recognition and enforcement of foreign judgments.

It is an established international legal principle that final judgments of foreign courts of competent jurisdiction are reciprocally respected
and rendered efficacious subject to certain conditions that vary in different countries.34 In the Philippines, a judgment or final order of a
foreign tribunal cannot be enforced simply by execution. Such judgment or order merely creates a right of action, and its non-
satisfaction is the cause of action by which a suit can be brought upon for its enforcement. 35 An action for the enforcement of a foreign
judgment or final order in this jurisdiction is governed by Rule 39, Section 48 of the Rules of Court, which provides:

SEC. 48. Effect of foreign judgments or final orders. - The effect of a judgment or final order of a tribunal of a foreign country, having
jurisdiction to render the judgment or final order is as follows:

(a) In case of a judgment or final order upon a specific thing, the judgment or final order is conclusive upon the title to the thing; and

(b) In case of a judgment or final order against a person, the judgment or final order is presumptive evidence of a right as between the
parties and their successors in interest by a subsequent title.

In either case, the judgment or final order may be repelled by evidence of a want of jurisdiction, want of notice to the party, collusion,
fraud, or clear mistake of law or fact.

The Court expounded in Mijares on the application of the aforequoted provision:

There is an evident distinction between a foreign judgment in an action in rem and one in personam. For an action in rem, the foreign
judgment is deemed conclusive upon the title to the thing, while in an action in personam, the foreign judgment is presumptive, and not
conclusive, of a right as between the parties and their successors in interest by a subsequent title. However, in both cases, the foreign
judgment is susceptible to impeachment in our local courts on the grounds of want of jurisdiction or notice to the party, collusion, fraud,
or clear mistake of law or fact. Thus, the party aggrieved by the foreign judgment is entitled to defend against the enforcement of such
decision in the local forum. It is essential that there should be an opportunity to challenge the foreign judgment, in order for the court in
this jurisdiction to properly determine its efficacy.

It is clear then that it is usually necessary for an action to be filed in order to enforce a foreign judgment, even if such judgment has
conclusive effect as in the case of in rem actions, if only for the purpose of allowing the losing party an opportunity to challenge the
foreign judgment, and in order for the court to properly determine its efficacy. Consequently, the party attacking a foreign judgment has
the burden of overcoming the presumption of its validity.

The rules are silent as to what initiatory procedure must be undertaken in order to enforce a foreign judgment in the Philippines. But
there is no question that the filing of a civil complaint is an appropriate measure for such purpose. A civil action is one by which a party
sues another for the enforcement or protection of a right, and clearly an action to enforce a foreign judgment is in essence a vindication
of a right prescinding either from a "conclusive judgment upon title" or the "presumptive evidence of a right." Absent perhaps a statutory
grant of jurisdiction to a quasi-judicial body, the claim for enforcement of judgment must be brought before the regular courts.

There are distinctions, nuanced but discernible, between the cause of action arising from the enforcement of a foreign judgment, and
that arising from the facts or allegations that occasioned the foreign judgment. They may pertain to the same set of facts, but there is an
essential difference in the right-duty correlatives that are sought to be vindicated. For example, in a complaint for damages against a
tortfeasor, the cause of action emanates from the violation of the right of the complainant through the act or omission of the respondent.
On the other hand, in a complaint for the enforcement of a foreign judgment awarding damages from the same tortfeasor, for the
violation of the same right through the same manner of action, the cause of action derives not from the tortious act but from the foreign
judgment itself.

More importantly, the matters for proof are different. Using the above example, the complainant will have to establish before the court
the tortious act or omission committed by the tortfeasor, who in turn is allowed to rebut these factual allegations or prove extenuating
circumstances. Extensive litigation is thus conducted on the facts, and from there the right to and amount of damages are assessed. On
the other hand, in an action to enforce a foreign judgment, the matter left for proof is the foreign judgment itself, and not the facts from
which it prescinds.

As stated in Section 48, Rule 39, the actionable issues are generally restricted to a review of jurisdiction of the foreign court, the service
of personal notice, collusion, fraud, or mistake of fact or law. The limitations on review [are] in consonance with a strong and pervasive
policy in all legal systems to limit repetitive litigation on claims and issues. Otherwise known as the policy of preclusion, it seeks to
protect party expectations resulting from previous litigation, to safeguard against the harassment of defendants, to insure that the task
of courts not be increased by never-ending litigation of the same disputes, and - in a larger sense - to promote what Lord Coke in the
Ferrer's Case of 1599 stated to be the goal of all law: "rest and quietness." If every judgment of a foreign court were reviewable on the
merits, the plaintiff would be forced back on his/her original cause of action, rendering immaterial the previously concluded litigation.36

Also relevant herein are the following pronouncements of the Court in Minoru Fujiki v. Marinay37:

A petition to recognize a foreign judgment declaring a marriage void does not require relitigation under a Philippine court of the case as
if it were a new petition for declaration of nullity of marriage. Philippine courts cannot presume to know the foreign laws under which the
foreign judgment was rendered. They cannot substitute their judgment on the status, condition and legal capacity of the foreign citizen
who is under the jurisdiction of another state. Thus, Philippine courts can only recognize the foreign judgment as a fact according to the
rules of evidence.

Section 48(b), Rule 39 of the Rules of Court provides that a foreign judgment or final order against a person creates a "presumptive
evidence of a right as between the parties and their successors in interest by a subsequent title." Moreover, Section 48 of the Rules of
Court states that "the judgment or final order may be repelled by evidence of a want of jurisdiction, want of notice to the party, collusion,
fraud, or clear mistake of law or fact." Thus, Philippine courts exercise limited review on foreign judgments. Courts are not allowed to
delve into the merits of a foreign judgment. Once a foreign judgment is admitted and proven in a Philippine court, it can only be repelled
on grounds external to its merits, i.e., "want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact."
The rule on limited review embodies the policy of efficiency and the protection of party expectations, as well as respecting the
jurisdiction of other states. (Emphases supplied, citations omitted.)

As the foregoing jurisprudence had established, recognition and enforcement of a foreign judgment or final order requires only proof of
fact of the said judgment or final order. In an action in personam, as in the case at bar, the foreign judgment or final order enjoys the
disputable presumption of validity. It is the party attacking the foreign judgment or final order that is tasked with the burden of
overcoming its presumptive validity.38 A foreign judgment or final order may only be repelled on grounds external to its merits,
particularly, want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact.

The fact of a foreign final order in this case is not disputed. It was duly established by evidence submitted to the RTC that the U.S.
District Court issued an Order on March 13, 1990 in Civil Action No. H-86-440 ordering petitioner, AIFL, and ATHONA, to pay
respondent the sum of US$49,450.00 as sanction for filing a frivolous suit against respondent, in violation of Rule 11 of the U.S. Federal
Rules of Civil Procedure. The said Order became final when its reinstatement in the Order dated December 31, 1991 of the U.S. District
Court was no longer appealed by petitioner, AIFL, and/or ATHONA.

The Order dated March 13, 1990 of the U.S. District Court in Civil Action No. H-86-440 is presumptive evidence of the right of
respondent to demand from petitioner the payment of US$49,450.00 even in this jurisdiction. The next question then is whether
petitioner was able to discharge the burden of overcoming the presumptive validity of said Order.

The Court rules in the negative.

In complete disregard of the limited review by Philippine courts of foreign judgments or final orders, petitioner opposes the enforcement
of the Order dated March 13, 1990 of the U.S. District Court on the very same allegations, arguments, and evidence presented before
and considered by the U.S. District Court when it rendered its verdict imposing the Rule 11 sanction against petitioner. Petitioner
attempts to convince the Court that it is necessary to look into the merits of the Order dated March 13, 1990 because the U.S. District
Court committed clear mistake of law and fact in issuing the same. The Court, however, is not convinced. A Philippine court will not
substitute its own interpretation of any provision of the law or rules of procedure of another country, nor review and pronounce its own
judgment on the sufficiency of evidence presented before a competent court of another jurisdiction. Any purported mistake petitioner
attributes to the U.S. District Court in the latter's issuance of the Order dated March 13,1990 would merely constitute an error of
judgment in the exercise of its legitimate jurisdiction, which could have been corrected by a timely appeal before the U.S. Court of
Appeals.

Petitioner cannot insist that the RTC and the Court of Appeals resolve the issue of whether or not petitioner, AIFL, and ATHONA had
reasonable grounds to implead respondent as a counter-defendant in Civil Action No. H-86-440. Although petitioner submitted such an
issue for resolution by the RTC in its Pre-Trial Brief, the RTC did not issue any pre-trial order actually adopting the same. In addition,
petitioner was also unable to lay the basis, whether in U.S. or Philippine jurisdiction, for the use of the "reasonable grounds standard"
for determining a party's liability for or exemption from the sanctions imposed for violations of Rule 11 of the U.S. Federal Rules of Civil
Procedure. Equally baseless is petitioner's assertion that the Rule 11 sanction is contrary to public policy and in effect, puts a premium
on the right to litigate. It bears to stress that the U.S. District Court imposed the Rule 11 sanction upon petitioner, AIFL, and ATHONA
for their frivolous counterclaims against respondent intended to simply humiliate and embarrass respondent; and not because
petitioner, AIFL, and ATHONA impleaded but lost to respondent.

Contrary to the claims of petitioner, both the RTC and the Court of Appeals carefully considered the allegations, arguments, and
evidence presented by petitioner to repel the Order dated March 13, 1990 of the U.S. District Court in Civil Action No. H-86-440. Worthy
of reproducing herein are the following portions of the RTC judgment:

[Petitioner's] contention that the judgment sought to be enforced herein is violative of its right to due process and contrary to public
policy because the Houston Court relied upon Exhibit 91 (which is [petitioner BPI Securities'] Exh. "1" in this case) and the US Court
disregarded the evidence on record in the Houston Action is unavailing. Whether or not said Exhibit 91 (petitioner's Exh. "1") is
inadmissible or is not entitled to any weight is a question which should have been addressed to the US of Court of Appeals by
[petitioner]. To ask a Philippine court to pass upon the admissibility or weight of Exh. 91 is violative of our public policy not to substitute
our judgment for that of a competent court of another jurisdiction.

[Petitioner] does not deny the fact that the judgment awarding sanctions based on [Rule 11 of the U.S.] Federal Rules of Civil
Procedure was elevated to the United States Court of Appeals for the Fifth Circuit which remanded the case to the District Court
precisely to give [petitioner] a reasonable opportunity to be heard. After remand, the District Court ordered [petitioner] to file its
response to the motion of [respondent] for sanctions and after the filing of their respective briefs, the District Court reinstated the former
judgment.

Certainly, under these circumstances, the claim of violation of due process cannot be sustained since [petitioner] was given reasonable
opportunity to present its side before the imposition of sanctions.

[Petitioner] likewise argued that the US District Court committed a clear mistake of law or fact and in support thereof presented Exhibits
"10" to "18" to establish that the fair market value of the Houston property in January 1983 was no longer US$800,000.00 by the
admissions against interest of 1488 itself, of Craig who submitted the fraudulent appraisal, and by the previous owners of the said
property and to "show that [respondent] Guevara was either directly involved in the conspiracy against the Houston defendants in
submitting to the latter a fraudulent appraisal of W. Craig (or was at least responsible to the Houston defendants for the injury that they
suffered) and that the Houston defendants had reasonable basis to implead him as a defendant in the Houston Case on account of his
participation in the conspiracy or his fault of responsibility for the injury suffered by them."

However, none of these documents show that [respondent] had any participation nor knowledge in the execution, custody or other
intervention with respect to the said. Thus, said Exhibits "10" to "18" are irrelevant and immaterial to the issue of the enforceability of a
foreign judgment. It must be emphasized that the imposition of the sanctions under [Rule 11 of the U.S.] Federal Rules of Civil
Procedure did not flow from the merits of the civil case in the US District Court but from the lack of even an iota of evidence against
[respondent] Guevara. To quote the US District Court:

THE COURT - I am disturbed about that. I don't see any evidence at all in this case, after listening to all of this evidence, that there ever
was a lawsuit that could have been brought against Guevara, and even after all of the discovery was done, there was still no evidence
of a conspiracy. There is no evidence of any conspiracy to this good day that he could have been, but there is no proof of it, and that's
what we base these lawsuits on. That's what the Rule 11 is designed to do, to deal with the circumstance.

So, I brought it up to Mr. Guevara because I know the frustration, and irrespective as to whether or not he brought it up, it would have
been my position, my own position as an officer of this Court to sanction the defendants in this case. That is my opinion, that they are to
be sanctioned because they have brought all of the power that they have in the Philippines to bear and put pressure on this man so that
he would have to come over 10,000 miles to defend himself or to hire lawyers to defend himself against a totally frivolous claim.

As for petitioner's contention that the Fifth Division of the Court of Appeals, in its Decision dated December 19, 2003, copied verbatim
or wholesale from respondent's brief, the Court refers to its ruling in Halley v. Printwell, Inc., 40 thus:

It is noted that the petition for review merely generally alleges that starting from its page 5, the decision of the RTC "copied verbatim the
allegations of herein Respondents in its Memorandum before the said court," as if "the Memorandum was the draft of the Decision of
the Regional Trial Court of Pasig," but fails to specify either the portions allegedly lifted verbatim from the memorandum, or why she
regards the decision as copied. The omission renders the petition for review insufficient to support her contention, considering that the
mere similarity in language or thought between Printwell's memorandum and the trial court's decision did not necessarily justify the
conclusion that the RTC simply lifted verbatim or copied from the memorandum.

It is to be observed in this connection that a trial or appellate judge may occasionally view a party's memorandum or brief as worthy of
due consideration either entirely or partly. When he does so, the judge may adopt and incorporate in his adjudication the memorandum
or the parts of it he deems suitable, and yet not be guilty of the accusation of lifting or copying from the memorandum. This is because
of the avowed objective of the memorandum to contribute in the proper illumination and correct determination of the controversy. Nor is
there anything untoward in the congruence of ideas and views about the legal issues between himself and the party drafting the
memorandum. The frequency of similarities in argumentation, phraseology, expression, and citation of authorities between the
decisions of the courts and the memoranda of the parties, which may be great or small, can be fairly attributable to the adherence by
our courts of law and the legal profession to widely know nor universally accepted precedents set in earlier judicial actions with identical
factual milieus or posing related judicial dilemmas. (Citations omitted.)

The Court is unmoved by petitioner's allegations of denial of due process because of its U.S. counsel's exorbitant fees and
negligence.1âwphi1 As aptly pointed out by respondent in his Memorandum:

On the specific claim that petitioner has been denied legal representation in the United States in view of the exorbitant legal fees of US
counsel, petitioner is now estopped from asserting that the costs of litigation resulted in a denial of due process because it was
petitioner which impleaded Guevara. If petitioner cannot prosecute a case to its final stages, then it should not have filed a counterclaim
against Guevara in the first place. Moreover, there is no showing that petitioner could not find a less expensive counsel. Surely,
petitioner could have secured the services of another counsel whose fees were more "affordable." 41

Moreover, petitioner is bound by the negligence of its counsel. The declarations of the Court in Gotesco Properties, Inc. v. Moral 42 is
applicable to petitioner:
The general rule is that a client is bound by the acts, even mistakes, of his counsel in the realm of procedural technique.1âwphi1 The
basis is the tenet that an act performed by counsel within the scope of a "general or implied authority" is regarded as an act of the
client. While the application of this general rule certainly depends upon the surrounding circumstances of a given case, there are
exceptions recognized by this Court: "(1) where reckless or gross negligence of counsel deprives the client of due process of law; (2)
when its application will result in outright deprivation of the client's liberty or property; or (3) where the interests of justice so require."

The present case does not fall under the said exceptions. In Amil v. Court of Appeals, the Court held that "to fall within the exceptional
circumstance relied upon x x x, it must be shown that the negligence of counsel must be so gross that the client is deprived of his day in
court. Thus, "where a party was given the opportunity to defend [its] interests in due course, [it] cannot be said to have been denied due
process of law, for this opportunity to be heard is the very essence of due process." To properly claim gross negligence on the part of
the counsel, the petitioner must show that the counsel was guilty of nothing short of a clear abandonment of the client's cause.

Finally, it is without question that the U.S. District Court, in its Order dated March 13, 1990 in Civil Action No. H-86-440, ordered
petitioner, AIFL, and ATHONA to pay respondent US$49,450.00 as sanction for violating Rule 11 of the U.S. Federal Rules of Civil
Procedure. The Court noticed that throughout its Decision dated September 11, 2000 in Civil Case No. 92-1445, the RTC variably
mentioned the amount of Rule 11 sanction imposed by the U.S. District Court as US$49,450.00 and US$49,500.00, the latter obviously
being a typographical error. In the dispositive portion, though, the RTC ordered petitioner to pay respondent US$49,500.00, which the
Court hereby corrects motu proprio to US$49,450.00 in conformity with the U.S. District Court Order being enforced.

The Court notes that during the pendency of the instant Petition before this Court, respondent passed away on August 17, 2007, and is
survived and substituted by his heirs, namely: Ofelia B. Guevara, Ma. Leticia G. Allado, Jose Edgardo B. Guevara, Jose Emmanuel B.
Guevara, and Ma. Joselina G. Gepuela.

WHEREFORE, the instant Petition is hereby DENIED for lack of merit. The Decision dated December 19, 2003 and Resolution dated
February 9, 2005 of the Court Appeals in CA-G.R. CV No. 69348, affirming the Decision dated September 11, 2000 of the Regional
Trial Court of Makati City, Branch 57 in Civil Case No. 92-1445, is hereby AFFIRMED with MODIFICATION that petitioner BPI
Securities Corporation is ordered to pay respondent Edgardo V. Guevara the sum of US$49,450.00 or its equivalent in Philippine Peso,
with interest at six percent (6%) per annum from the filing of the case before the trial court on May 28, 1992 until fully paid.

G.R. No. 133883 December 10, 2003

SPOUSES ARTURO AND NICETA SERRANO, petitioners,

vs.
COURT OF APPEALS AND HEIRS OF EMILIO S. GELI, respondents.

DECISION

CALLEJO, SR., J.:

Before us is a petition for review on certiorari under Rule 45 of the Rules of Court of the Decision 1 of the Court of Appeals (CA) in CA-
G.R. SP No. 45573 setting aside the Order of the Regional Trial Court of Quezon City in Civil Case No. Q-24790 with motion of herein
petitioners, Spouses Arturo and Niceta Serrano, for the issuance of an alias writ of execution. 2

The Antecedents

The Spouses Serrano were the owners of a parcel of land as well as the house constructed thereon located at Road 4, Project 6,
Diliman, Quezon City, covered by Transfer Certificate of Title No. 80384, and a parcel of land located in Caloocan City, covered by
Transfer Certificate of Title No. 15191. The couple mortgaged the said properties in favor of the Government Service Insurance System
(GSIS) as security for a loan of ₱50,000. By June 1969, the couple was able to pay only the amount of ₱18,000.

On June 23, 1969, the Spouses Serrano, as vendors, and Spouses Emilio and Evelyn Geli, as vendees, executed a deed of absolute
sale with partial assumption of mortgage over the parcel of land covered by TCT No. 80384 and the house thereon for the price of
₱70,000. The Spouses Geli paid the amount of ₱38,000 in partial payment of the property, the balance of ₱32,000 to be paid by them
to the GSIS for the account of the Spouses Serrano. The Spouses Geli thereafter took possession of the property. In the meantime,
Evelyn Geli died intestate and was survived by her husband Emilio Geli and their children.

However, Emilio Geli and his children failed to settle the amount of ₱32,000 to the GSIS. The latter forthwith filed a complaint against
Emilio Geli and his children with the Regional Trial Court of Quezon City for the rescission of the deed of absolute sale with partial
assumption of mortgage. The defendants therein alleged, by way of special defense, that the plaintiffs Spouses Serrano failed to furnish
them with a detailed statement of the account due from the GSIS, thus accounting for their failure to remit the balance of the loan to the
GSIS. On September 6, 1984, the trial court rendered judgment ordering the rescission of the said deed, the decretal portion of which
reads:

WHEREFORE, judgment is hereby rendered: a) ordering the rescission of the Deed of Absolute Sale with Assumption of Mortgage,
dated June 23, 1969; b) ordering defendant Emilio S. Geli and all persons claiming under him, including the other defendants Oswaldo,
Eugenia, Marilyn, Cristopher and Ray, all surnamed Geli, to vacate the house and lot located at No. 110 A-1, Road 4, Project 6,
Quezon City, and to turn over the peaceful possession of the premises to plaintiffs Arturo Serrano and Niceta M. Serrano; c) ordering
defendant Emilio S. Geli to pay plaintiffs the amount of ₱1,000.00 a month representing reasonable compensation for the use and
occupancy of the premises starting June 23, 1969 up to the time the defendant Geli and all other persons claiming under them including
the other defendants, shall have completely vacated the property, deducting therefrom the sum of ₱38,000.00 paid by defendant Geli to
plaintiffs as part of the aforesaid compensation; and, d) ordering defendant Emilio S. Geli to pay plaintiffs the sum of ₱10,000.00
representing exemplary damages. Costs against defendant Emilio S. Geli.3

Emilio Geli and his children appealed the decision to the CA on October 19, 1984. During the pendency of the appeal, the GSIS
foreclosed the real estate mortgage over the property for non-payment of the ₱50,000 loan secured by the said property. At the sale on
public auction, the GSIS was the highest bidder. A certificate of sale over the property was thereby issued by the sheriff in its favor on
August 30, 1986. On October 30, 1987 and November 3, 1987, Emilio Geli paid the redemption price of ₱67,701.84 4 to the GSIS.
Official Receipts Nos. 905401 and 901685 for the said amount with the notation "for the account of Arturo Serrano" were issued.
Accordingly, on February 22, 1988, the GSIS executed a certificate of redemption 5 and turned over to Emilio Geli the owner’s copy of
TCT No. 80384 in the names of the Spouses Serrano. Emilio Geli did not inform the Spouses Serrano and the CA that he had paid the
redemption price to the GSIS.

On January 8, 1991, the CA dismissed the appeal of Emilio Geli and his children on the ground that the appellants failed to pay the
requisite docket fees despite notices from the appellate court. No motion for the reconsideration of the resolution was filed. Thus, the
said dismissal of the appeal became final and executory. The Court of Appeals forthwith issued an Entry of Judgment on February 27,
1991.

After the remand of the records, the Spouses Serrano filed with the RTC on January 14, 1994 a motion for the execution of the trial
court’s September 6, 1984 Decision. On February 15, 1994, the trial court issued an order granting the motion and forthwith issued a
writ of execution. The writ, however, was not implemented as the Spouses Serrano were then in the United States. On August 1, 1995,
the trial court issued an alias writ of execution on motion of the plaintiffs. This, too, was not implemented, because of the defendants’
change of address. On May 9, 1996, the trial court issued an order granting the motion of the plaintiffs for a second alias writ of
execution. On September 6, 1996, the defendants filed a motion to quash the same claiming, for the first time, that defendant Emilio
Geli had already redeemed the subject property in 1988 from the GSIS. According to the defendants, this constituted a supervening
event that would make the execution of the trial court’s decision unjust and inequitable.

On May 19, 1997, the trial court issued an order denying the aforesaid motion of the defendants. It noted that the payment by defendant
Emilio Geli of the redemption price to the GSIS took place before the CA dismissed the appeal and before the decision of the RTC
became final and executory; hence, it did not constitute a supervening event warranting a quashal of the writ of execution. The trial
court cited the ruling of this Court in Lim v. Jabalde. 6

On September 18, 1997, the trial court issued an order granting the motion for the issuance of another alias writ of execution filed by
the Spouses Serrano, to wit:

The Motion to Quash Writ of Execution, filed by defendants having been earlier denied and, it being explicit under the New Rules of
Civil Procedure (1997) that no appeals may be taken from orders of execution, instead of giving due course to the appeal interposed by
defendant, the court resolves to grant the motion for the issuance of an Alias Writ of Execution. 7

On September 26, 1997, the trial court issued an Alias Writ of Execution. 8 Conformably with said writ, the sheriff served a Sheriff’s
Notice to Vacate9 on the defendants. In the meantime, Emilio Geli died intestate and was survived by his children.

On October 10, 1997, the heirs of Emilio Geli filed with the Court of Appeals a petition for certiorari and/or prohibition praying for the
nullification of the May 19, 1997 and September 18, 1997 Orders of the trial court. They alleged inter alia that when their father Emilio
Geli paid the redemption price to the GSIS on October 30, 1987 and November 3, 1987, their appeal of the September 6, 1984
Decision of the RTC in Civil Case No. Q-24790 before the CA was still pending resolution. Consequently, under the terms of the deed
of absolute sale with assumption of mortgage which was still subsisting at that time, they were ipso facto subrogated to the rights of the
Spouses Serrano as mortgagors of the property; hence, they became the owners of the property and were entitled to the possession
thereof. The petitioners therein further posited that since they acquired ownership of the property before the CA dismissed their appeal
and before the September 6, 1984 Decision of the RTC became final and executory, the execution of the decision against them was
unjust and unfair. They then prayed for the following relief:

WHEREFORE, premises considered, it is respectfully prayed that the order of public respondent Judge, dated 18 September 1997 and
the Notice to Vacate issued by public respondent Sheriff, dated 26 September 1997 be set aside. Likewise, to declare execution of
judgment in Civil Case No. Q-24790 to have been rendered impossible, as execution hereof would result to injustice. In the meantime
to obviate irreversible damage on the part of petitioners, a writ of PRELIMINARY INJUNCTION be granted after due hearing,
ORDERING public respondent Judge and public respondent Sheriff to desist or refrain from implementing the September 18, 1997
order.

Other remedies available in law and equity are likewise prayed for.10

On January 5, 1998, the appellate court issued an order restraining the implementation of the alias writ of execution and the notice to
vacate issued by the trial court.11 On May 12, 1998, the CA rendered the assailed decision in favor of the heirs of Emilio Geli, the
decretal portion of which reads:

WHEREFORE, the foregoing considered, the petition is hereby GRANTED, and the writ of certiorari issued. The respondent court is
hereby PERPETUALLY ENJOINED from issuing any order or writ which would disturb the petitioners in their lawful ownership and
possession of the property subject matter of the instant case.12

The appellate court ruled that since Emilio Geli paid the redemption price for the property to the GSIS in 1987 while his appeal was
pending in the CA, the said redemption was a supervening event which rendered the enforcement of the writ of execution issued by the
trial court against them unjust and inequitable.

The Spouses Serrano filed the instant petition and assigned to the CA the following errors:

THE COURT A QUO COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION
WHEN IT PERMANENTLY ENJOINED THE TRIAL COURT FROM DISTURBING THE RESPONDENTS IN THEIR ‘LAWFUL
OWNERSHIP AND POSSESSION’ OF THE SAID PROPERTY, IT BEING CLEAR THAT THEIR REDEMPTION WAS EFFECTED
FOR AND ON BEHALF OF PETITIONER ARTURO V. SERRANO.

II
THE COURT A QUO COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION
WHEN IT HELD THAT THE REDEMPTION CONSTITUTED A SUPERVENING EVENT WHICH CHANGE THE RELATIONS OF THE
PARTIES, THUS RENDERING EXECUTION INEQUITABLE UNDER THE PREMISES.13

The petitioners contend that the payment of the redemption price made by Emilio Geli in 1987 during the pendency of the appeal in the
CA was ineffective because, subsequently, when the respondents’ appeal was dismissed by the CA, the summary decision of the RTC
declaring the deed of absolute sale with partial assumption of mortgage rescinded had become final and executory. The deed of
absolute sale with partial assumption of mortgage executed by the petitioners and the Spouses Geli had ceased to exist with its
rescission as decreed by the RTC. According to the petitioners, the payment of the redemption price was conditioned upon the
perfection and outcome of the appeal. Since the appeal of the respondents was dismissed by their failure to pay the requisite docket
fees, they must suffer the consequences thereof. The petitioners assert that the redemption of a property is a right belonging to the
mortgagor-debtor, and since the deed of absolute sale with partial assumption of mortgage had been rescinded by final judgment of the
RTC, Emilio Geli was no longer a mortgagor or the successor-in-interest of the mortgagors; hence, he could not redeem the property on
behalf of the mortgagors without the latter’s knowledge and consent.

For their part, the respondents echo the ruling of the CA that although the issuance by the trial court of a writ of execution is ministerial
upon the finality of its decision, the same is subject to the onset of a supervening event which may, as in this case, render the same
unwarranted, unjust and inequitable.

The respondents contend that the petitioners lost their ownership over the property when they failed to redeem the property within one
year from the sale thereof at public auction to the GSIS. Although the GSIS executed a Certificate of Redemption in favor of Emilio Geli
on February 22, 1988, the deed was, in fact, a deed of conveyance because, by then, the one-year period to redeem the property had
already lapsed and the GSIS in the meantime had become the owner of the property. Thus, the Spouses Geli acquired ownership
thereof when they purchased the same from the GSIS in 1988 for ₱67,701.84. The GSIS in effect sold the property to Emilio Geli and
did not merely allow him to redeem it. Departing from their submission before the CA, the respondents now posit that their claim of
ownership over the subject property was after all not anchored on the deed of sale with assumption of mortgage, as it had been
admittedly rescinded by virtue of the finality of the trial court’s September 6, 1984 Decision. Their claim of ownership rests on the fact
that they had acquired the property from the GSIS, the purchaser at public auction. As owners of the property, they cannot now be
evicted therefrom.

We find the petition to be meritorious.

Generally, the execution upon a final judgment is a matter of right on the part of the prevailing party. It is the ministerial and mandatory
duty of the trial court to enforce its own judgment once it becomes final and executory. It may happen, however, that new facts and
circumstances may develop or occur after a judgment had been rendered and while an appeal therefrom is pending; or new matters
had developed after the appeal has been dismissed and the appealed judgment had become final and executory, which the parties
were not aware of and could not have been aware of prior to or during the trial or during the appeal, as they were not yet in existence at
that time. In the first situation, any attempt to frustrate or put off the enforcement of an executory decision must fail. Once a judgment
has become final and executory, the only remedy left for material attention thereof is that provided for in Rule 38 of the Rules of Court,
as amended. There is no other prerequisite mode of thwarting the execution of the judgment on equitable grounds predicated on facts
occurring before the finality of judgment.14 In the second situation, the execution may be stayed, notwithstanding the affirmance of the
appealed judgment by this Court.15 It is required, however, that the supervening facts and circumstances must either have a direct
effect upon the matter already litigated and settled or create a substantial change in the rights or relations of the parties therein which
would render execution of a final judgment unjust, impossible or inequitable or when it becomes imperative in the interest of justice.16
The interested party may file a motion to quash a writ of execution issued by the trial court, or ask the court to modify or alter the
judgment to harmonize the same with justice and further supervening facts. 17 Evidence may be adduced by the parties on such
supervening facts or circumstances.18

In this case, the payment by Emilio Geli of the amount of ₱67,701.84 on October 30 and November 3, 1987 to the GSIS for the account
of the petitioners was made while the appeal of the private respondents from the summary judgment of the RTC was pending. The
summary judgment of the RTC had not yet become final and executory. It behooved the said respondents to prosecute their appeal and
file their brief, where they should have invoked the payment of the redemption price as a ground for the reversal of the trial court’s
summary judgment in their favor. The respondents failed to do so, and even concealed the payment of the loan for the account of the
petitioners. Worse, the respondents did not pay the requisite docket fees for their appeal, which resulted in its dismissal. The
respondents even opted not to file any motion for the reconsideration of the resolution of the CA dismissing their appeal. In sum, the
respondents allowed the decision of the trial court to become final and executory. Consequently, the enforcement of the summary
judgment of the trial court can no longer be frustrated by the respondents’ payment, through Emilio Geli, of the amount of ₱67,701.84 to
the GSIS in 1987.

Irrefragably, the Spouses Geli, as vendees-mortgagors under the deed of absolute sale with partial assumption of mortgage, would
have been subrogated to the rights and obligations of the petitioners under the said deed, including the right to redeem the property
from the GSIS.19 However, the CA dismissed their appeal for failure to pay the requisite docket fees, and such dismissal became final
and executory. Hence, the summary judgment of the trial court declaring the deed of absolute sale with partial assumption of mortgage
rescinded had also become final and executory.

Generally, the rule is that to rescind a contract is not merely to terminate it, but to abrogate and undo it from the beginning; that is, not
merely to release the parties from further obligations to each other in respect to the subject of the contract, but to annul the contract and
restore the parties to the relative positions which they would have occupied if no such contract had ever been made. Rescission
necessarily involves a repudiation of the contract and a refusal of the moving party to be further bound by it. 20 With the rescission of the
deed of sale, etc., the rights of Emilio Geli under the said deed to redeem the property had been extinguished. The petitioners cannot
even be compelled to subrogate the respondents to their rights under the real estate mortgage over the property which the petitioners
executed in favor of the GSIS since the payment of the ₱67,701.84 redemption price was made without the knowledge of the
petitioners.21 The respondents, however, are entitled to be reimbursed by the petitioners to the extent that the latter were benefited. 22

Neither did the respondents acquire title to the property under the certificate of redemption executed by the GSIS on February 10, 1998.

First. In the certificate of redemption, the mortgagor-debtor in whose favor the certificate was executed was the petitioner Arturo
Serrano and not Emilio Geli and/or the respondents:
NOW, THEREFORE, for and in consideration of the foregoing premises and the sum of SIXTY-SEVEN THOUSAND SEVEN
HUNDRED ONE & 84/100 (₱67,701.84) PESOS, Philippine Currency, herein paid by EMILIO S. GELI, of legal age, married, Filipino,
with residence and postal address at 110 A-1, Road 4, Project 6, Quezon City, do hereby resell, retransfer and reconvey by way of
Certificate of Redemption in favor of ARTURO V. SERRANO, the above-described parcel/s of land, together with the building/s and
improvements existing thereon.

IN WITNESS WHEREOF, the GOVERNMENT SERVICE INSURANCE SYSTEM has caused this instrument to be executed by its
Director, Atty. Roque M. Fernando, Jr., at the City of Manila, Philippines, this _______ day of ______, 19__.

GOVERNMENT SERVICE INSURANCE SYSTEM

Mortgagee-Purchaser

By: Sgd.
ROQUE M. FERNANDO, JR.
in his capacity as Director23

Second. Case law has it that the one-year period within which the mortgagor-debtor or his successor-in-interest may redeem the
property should be counted from the time the certificate of sale was registered with the Register of Deeds.24 Upon the lapse of the one-
year period, the right to redeem becomes functus officio on the date of its expiry. 25 The rule on redemption is actually liberally construed
in favor of the original owner of the property. The purpose of the law is to aid rather than to defeat him in the exercise of his right of
redemption.26 Before the lapse of the one-year period, the mortgagor-debtor remains the owner of the property. The right acquired by
the purchaser at public auction is merely inchoate until the period of redemption has expired without the right being exercised by the
redemptioner.27 Such right becomes absolute only after the expiration of the redemption period without the right of redemption having
been exercised.28 The purchaser is entitled as a matter of right to consolidation of title and to the possession of the property.29 Where
redemption is seasonably exercised by the mortgagor-debtor, what is actually effected is not the recovery of ownership of his land,
which ownership he never lost, but the elimination from his title thereto of the lien created by the registration of a mortgage thereon.30

Upon the expiry of the redemption period without the mortgagor-debtor being able to redeem the property, the purchaser can no longer
be compelled to allow the former to redeem the property or to resell the property; and if he agrees to sell the property, it may be for a
price higher than that for which he purchased the property at public auction. 31

In this case, there is no showing in the records that the sheriff’s certificate of sale in favor of the GSIS had been registered in the Office
of the Register of Deeds of Quezon City and if so, when it was in fact registered in the said office. It cannot thus be argued that when
Emilio Geli remitted the amount of ₱67,701.84 to the GSIS in full payment of the account of the petitioners, the one-year period to
redeem the property had by then lapsed. Hence, the petitioners remained the owners of the property. The GSIS never acquired title
over the property and could not have conveyed and transferred ownership over the same when it executed the certificate of redemption
to and in the name of the petitioner Arturo Serrano. As the Latin maxim goes: NEMO DAT QUOD NON HABET.

We are not convinced by the ratiocination of the respondents that the enforcement of the summary decision of the trial court and the
alias writ of execution against them is unjust and unreasonable.

The Spouses Geli and the respondents, as heirs and successors-in-interest of the said spouses, were obliged under the deed of
absolute sale with partial assumption of mortgage to pay to the GSIS the balance of the petitioners’ account. The Spouses Geli reneged
on their undertaking. The petitioners were impelled to secure the services of counsel and sue the Spouses Geli with the RTC for the
rescission of the said deed with damages. The respondent spouses nevertheless remained adamant and refused to pay the petitioners’
account with the GSIS which impelled the latter to foreclose the real estate mortgage and sell the property at public auction. Emilio Geli
and the respondents did not inform the CA and the petitioners that Emilio Geli had paid the amount of ₱67,701.84 for the account of the
petitioners. The respondents even allowed their appeal to be dismissed by the CA, and the dismissal to become final and executory.
The petitioners were impelled to spend money for their counsel and for sheriff’s fees for the implementation of the writ of execution and
the alias writ of execution issued by the trial court. In the meantime, the respondents remained in possession of the property from 1969,
when the said deed of absolute sale with partial assumption of mortgage was executed, up to the present, or for a period of 34 years
without paying a single centavo. For the Court to allow the respondents to benefit from their own wrong would run counter to the maxim:
Ex Dolo Malo Non Oritur Actio (No man can be allowed to found a claim upon his own wrongdoing). 32 Equity is applied only in the
absence of and never against statutory law or judicial rules of procedure. 33 We reiterate our ruling that:

Justice is done according to law. As a rule, equity follows the law.1âwphi1 There may be a moral obligation, often regarded as an
equitable consideration (meaning compassion), but if there is no enforceable legal duty, the action must fail although the disadvantaged
party deserves commiseration or sympathy.

The choice between what is legally just and what is morally just, when these two options do not coincide, is explained by Justice
Moreland in Vales v. Villa, 35 Phil. 769, 788 where he said:

"Courts operate not because one person has been defeated or overcome by another, but because he has been defeated or overcome
illegally. Men may do foolish things, make ridiculous contracts, use miserable judgment, and lose money by them—indeed, all they
have in the world; but not for that alone can the law intervene and restore. There must be in addition, a violation of law, the commission
of what the law knows as an actionable wrong before the courts are authorized to lay hold of the situation and remedy it." (Rural Bank
of Parañaque, Inc. v. Remolado, 62051, March 18, 1985) (135 SCRA 409, 412). 34

In sum then, the respondents, as heirs of Emilio Geli, are obliged to vacate the subject property. However, since the petitioners were
benefited to the extent of ₱67,701.84 which was the total amount paid by Emilio Geli to the GSIS as redemption price for the foreclosed
property, the petitioners are obliged to refund the said amount to the respondents.

IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The assailed decision of the Court of Appeals dated May 12, 1998 in
CA-G.R. SP No. 45573 is SET ASIDE AND REVERSED. The petitioners Spouses Serrano are obliged to refund to the respondents, as
heirs of Emilio S. Geli, the amount of ₱67,701.84 to be deducted from the amount due to the petitioners under the September 6, 1984
Decision of the Regional Trial Court, Quezon City, in Civil Case No. Q-24790.